By: Turner S.B. No. 819
A BILL TO BE ENTITLED
AN ACT
1-1 relating to financial assistance programs administered by the
1-2 Veterans' Land Board.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 ARTICLE 1
1-5 SECTION 1.01. Section 161.001, Natural Resources Code, is
1-6 amended to read as follows:
1-7 Sec. 161.001. DEFINITIONS. (a) In this chapter:
1-8 (1) "Board" means the Veterans' <Veterans> Land Board.
1-9 (2) "Commissioner" means the Commissioner of the
1-10 General Land Office.
1-11 (3) "Land office" means the General Land Office.
1-12 (4) "Program" means the Veterans' <Veterans> Land
1-13 Program.
1-14 (5) "Fund" means the veterans' <veterans> land fund.
1-15 (6) "Bonds" means general obligation <veterans land>
1-16 bonds issued by the board for the purpose of funding the program.
1-17 (7) "Veteran" means a person who:
1-18 (A)(i) served not less than 90 continuous days
1-19 <after September 16, 1940>, unless sooner discharged by reason of a
1-20 service-connected disability, on active duty in the Army, Navy, Air
1-21 Force, Coast Guard, United States Public Health Service (as
1-22 constituted under 42 U.S.C. Section 201 et seq.),<;> or Marine
1-23 Corps of the United States after September 16, 1940, and who on
2-1 <and has not been dishonorably discharged or released from any of
2-2 those branches as of> the date of filing an application under the
2-3 program has not been dishonorably discharged from the branch of the
2-4 service in which the person served;
2-5 (ii) has at least <his application, or who
2-6 has completed> 20 years of active or reserve military service as
2-7 computed when determining the person's eligibility to receive
2-8 retired pay <creditable for retirement> under applicable federal
2-9 law; <laws,> or
2-10 (iii) has enlisted or received an <who has
2-11 completed all initial active duty training required as a condition
2-12 of enlistment or> appointment in the Texas National Guard, who has
2-13 completed all initial active duty training required as a condition
2-14 of the enlistment or appointment, and who on the date of filing the
2-15 person's application has not been dishonorably discharged from the
2-16 Texas National Guard;
2-17 (B) at the time of the person's <his>
2-18 enlistment, induction, commissioning, appointment, or drafting was
2-19 a bona fide resident of this state or has resided in this state at
2-20 least five years immediately before the date of filing an <his>
2-21 application under this chapter <for a loan>; and
2-22 (C) at the time of the person's <his>
2-23 application <for a loan> under this chapter is <a citizen of the
2-24 United States and> a bona fide resident of this state. The term
2-25 includes the unmarried surviving spouse of a veteran who died or
3-1 who is identified as missing in action if the deceased or missing
3-2 veteran meets the requirements of this section, with the exception
3-3 that the deceased or missing veteran need not have served 90
3-4 continuous days under Paragraph (A)(i) of this subdivision, and if
3-5 the deceased or missing veteran <in the line of duty provided the
3-6 deceased veteran> was a bona fide resident of this state at the
3-7 time of enlistment, induction, commissioning, appointment, or
3-8 drafting. <In order for the surviving spouse to qualify, the
3-9 deceased veteran must meet the requirements in this section with
3-10 the exception that the deceased veteran need not have served 90
3-11 continuous days><.>
3-12 (b) Notwithstanding Subdivision (7) of Subsection (a) of
3-13 this section, the board may by rule change the definition of
3-14 "veteran" as necessary or appropriate to protect the best interests
3-15 of the program <in response to changes in the laws of the United
3-16 States as they may affect the program>.
3-17 SECTION 1.02. Section 161.061, Natural Resources Code, is
3-18 amended to read as follows:
3-19 Sec. 161.061. GENERAL DUTIES OF BOARD. The board shall:
3-20 (1) authorize and execute negotiable bonds as provided
3-21 by law;
3-22 (2) provide by resolution for use of the fund in a
3-23 manner that will effectuate the intent of the constitution and the
3-24 law;
3-25 (3) prescribe <fix> the interest rates as provided by
4-1 law;
4-2 (4) provide for the forfeiture of contracts of sale
4-3 and purchase and resale of forfeited land;
4-4 (5) conduct investigations it considers necessary; and
4-5 (6) formulate policies and rules necessary and not in
4-6 conflict with the law to ensure the proper administration and to
4-7 carry out the intent and purposes of the law.
4-8 SECTION 1.03. Subchapter C, Chapter 161, Natural Resources
4-9 Code, is amended by adding Section 161.074 to read as follows:
4-10 Sec. 161.074. BOND ENHANCEMENT AGREEMENTS. The board may at
4-11 any time and from time to time enter into one or more bond
4-12 enhancement agreements that the board determines to be necessary or
4-13 appropriate to place the obligation of the board, as represented by
4-14 the bonds, in whole or in part, on the interest rate, currency,
4-15 cash flow, or other basis desired by the board. Bond enhancement
4-16 agreements may include, on terms and conditions approved by the
4-17 board, interest rate swap agreements, currency swap agreements,
4-18 forward payment conversion agreements, agreements providing for
4-19 payments based on levels of or changes in interest rates or
4-20 currency exchange rates, agreements to exchange cash flows or a
4-21 series of payments, or agreements, including options, puts, or
4-22 calls, to hedge payment, currency, rate, spread, or other exposure.
4-23 A bond enhancement agreement is an agreement for professional
4-24 services and shall contain the terms and conditions and be for the
4-25 period that the board approves. The fees and expenses of the board
5-1 in connection with the issuance of bonds and the purchase and sale
5-2 of land may be paid from money in the fund, provided that payments
5-3 due from the board under a bond enhancement agreement, other than
5-4 fees and expenses, that relate to the payment of debt service on
5-5 bonds constitute payments of principal of and interest on the
5-6 bonds.
5-7 SECTION 1.04. The heading of Subchapter D, Chapter 161,
5-8 Natural Resources Code, is amended to read as follows:
5-9 SUBCHAPTER D. GENERAL OBLIGATION BONDS
5-10 SECTION 1.05. Section 161.113, Natural Resources Code, is
5-11 amended to read as follows:
5-12 Sec. 161.113. INTEREST RATE. <(a)> The bonds shall bear
5-13 the rate or rates of interest prescribed by the board.
5-14 <(b) The weighted average annual interest rate of the bonds,
5-15 as that phrase is commonly and ordinarily used and understood in
5-16 the municipal bond market, may not be more than six percent in each
5-17 installment.>
5-18 SECTION 1.06. Section 161.114, Natural Resources Code, is
5-19 amended to read as follows:
5-20 Sec. 161.114. PAYMENT AND MATURITY OF BONDS. (a) The bonds
5-21 shall be payable as provided by the board and shall mature serially
5-22 or otherwise not later than 40 years from their date.
5-23 (b) Bonds previously issued shall mature according to their
5-24 provisions.
5-25 (c) The board shall determine the medium of payment for both
6-1 principal of and interest on the bonds.
6-2 (d) The board at its own option may make the bonds
6-3 redeemable or subject to tender for purchase before maturity at the
6-4 price and under the terms and conditions fixed by the board in the
6-5 resolution providing for the issuance and sale of the bonds.
6-6 SECTION 1.07. Section 161.116, Natural Resources Code, is
6-7 amended to read as follows:
6-8 Sec. 161.116. MANNER OF EXECUTION. (a) The bonds shall be
6-9 executed by and on behalf of the board and the state as obligations
6-10 of the state in the manner provided in Subsection (b) of this
6-11 section.
6-12 (b) The bonds shall be signed by the chairman and the
6-13 executive secretary of the board and the seal of the board shall be
6-14 impressed on the bonds. In addition, the bonds shall be signed by
6-15 the governor and attested by the Secretary of State with the seal
6-16 of the state impressed on the bonds.
6-17 SECTION 1.08. Section 161.118, Natural Resources Code, is
6-18 amended to read as follows:
6-19 Sec. 161.118. APPROVAL BY ATTORNEY GENERAL. Before bonds
6-20 are delivered to the purchasers, the record relating to the bonds
6-21 shall be examined by the attorney general. If the record
6-22 demonstrates that the bonds have been issued in accordance with the
6-23 constitution and this subchapter, the <and the record and> bonds
6-24 shall be approved by the attorney general.
6-25 SECTION 1.09. Section 161.119, Natural Resources Code, is
7-1 amended to read as follows:
7-2 Sec. 161.119. REGISTRATION WITH COMPTROLLER. After the
7-3 bonds are approved by the attorney general, they shall be
7-4 registered in the office of the <state> comptroller.
7-5 SECTION 1.10. Section 161.123, Natural Resources Code, is
7-6 amended to read as follows:
7-7 Sec. 161.123. NOTICE FOR BIDS ON BONDS. <(a)> If the board
7-8 authorizes the issuance of a series of bonds and decides to call
7-9 for bids, it shall publish an appropriate notice at least one time
7-10 not less than 10 days before the date of the sale in a <daily
7-11 newspaper of general statewide circulation that is published not
7-12 less than seven times a week.>
7-13 <(b) The notice shall be published for the number of times
7-14 the board determines in one or more popularly> recognized financial
7-15 journal <journals> of general circulation.
7-16 SECTION 1.11. Section 161.124, Natural Resources Code, is
7-17 amended to read as follows:
7-18 Sec. 161.124. SECURITY FOR BID. The <At its option, the>
7-19 board may require bidders<, other than administrators of state
7-20 funds listed in Section 161.122 of this code,> to accompany their
7-21 bids with exchange or bank cashier's checks in an amount considered
7-22 adequate by the board to be a forfeit guaranteeing the acceptance
7-23 and payment for bonds covered by the bids and accepted by the
7-24 board.
7-25 SECTION 1.12. Section 161.125, Natural Resources Code, is
8-1 amended to read as follows:
8-2 Sec. 161.125. SALE OF BONDS. Bonds may be sold at public or
8-3 private sale at a price or prices and on terms determined by the
8-4 board <(a) No bonds may be sold for less than their face value with
8-5 accrued interest from their date and shall be sold after
8-6 competitive bidding to the highest and best bidder.>
8-7 <(b) The provisions of Subsection (a) of this section do not
8-8 apply to administrators of the state funds that are given a
8-9 priority if they exercise the right of priority to take the bonds
8-10 at the highest price bid by another within 15 days after notice is
8-11 given.>
8-12 <(c) If two or more administrators of state funds desire to
8-13 exercise their right of priority to purchase the bonds, the board
8-14 shall prorate the bonds to the administrators who desire to make
8-15 the purchase>.
8-16 SECTION 1.13. Section 161.128, Natural Resources Code, is
8-17 amended to read as follows:
8-18 Sec. 161.128. BONDS AS INVESTMENTS AND SECURITY. (a) Bonds
8-19 issued under <Article III, Section 49-b of the Texas Constitution,
8-20 and> this chapter are legal and authorized investments for banks,
8-21 savings banks, trust companies, building and loan associations,
8-22 insurance companies, fiduciaries, trustees, guardians, and for the
8-23 sinking funds of cities, towns, villages, counties, school
8-24 districts, and other political subdivisions and public agencies of
8-25 the state.
9-1 (b) The bonds<, if accompanied by unmatured coupons
9-2 appurtenant to them,> are legal and sufficient security for the
9-3 deposits in the amount of the par value of the bonds.
9-4 SECTION 1.14. Section 161.129, Natural Resources Code, is
9-5 amended to read as follows:
9-6 Sec. 161.129. TAXATION OF BONDS. Bonds <issued under
9-7 Article III, Section 49-b of the Texas Constitution, and laws
9-8 implementing that section of the constitution,> are exempt from any
9-9 tax by the state and by cities, towns, villages, counties, school
9-10 districts, and other political subdivisions and public agencies of
9-11 the state.
9-12 SECTION 1.15. Subchapter D, Chapter 161, Natural Resources
9-13 Code, is amended by adding Sections 161.130, 161.131, and 161.132
9-14 to read as follows:
9-15 Sec. 161.130. CONSTITUTIONAL APPROPRIATIONS. (a) If during
9-16 the existence of the fund or during the time general obligation
9-17 bonds are payable from the fund the board determines that there
9-18 will not be sufficient money in the fund during the following
9-19 biennium available to pay principal of or interest on the bonds
9-20 that are to come due and to be paid from the fund during that
9-21 biennium, the comptroller shall transfer to the fund the first
9-22 money coming into the State Treasury not otherwise appropriated by
9-23 the constitution in amounts sufficient to pay the obligations.
9-24 (b) The money appropriated shall be used to pay the
9-25 obligations only if at the time the principal or interest actually
10-1 become due there is not sufficient money in the fund available to
10-2 pay the amount due.
10-3 Sec. 161.131. MINORITY-OWNED BUSINESSES. (a) The board
10-4 shall make a good faith effort to award to minority-owned
10-5 businesses:
10-6 (1) contracts relating to the issuance of bonds by the
10-7 board under this chapter in the amount of at least 20 percent of
10-8 the total costs of issuing those bonds; and
10-9 (2) contracts for the items to be financed by bonds
10-10 issued by the board in the amount of at least 20 percent of the
10-11 proceeds of those bonds.
10-12 (b) Not later than October 31 of each year, the board shall
10-13 file with the governor and each house of the legislature a written
10-14 report containing the following information for the previous year
10-15 for all businesses and for minority-owned businesses classified by
10-16 minority group:
10-17 (1) the total number of contracts relating to the
10-18 issuance of bonds by the board under this chapter and to the items
10-19 to be financed by those bonds;
10-20 (2) the total dollar amount the board must pay under
10-21 each contract described by Subdivision (1) of this subsection; and
10-22 (3) the total number of businesses submitting bids or
10-23 proposals relating to the issuance of bonds by the board under this
10-24 chapter and to the items to be financed by those bonds.
10-25 (c) In this section:
11-1 (1) "Minority-owned business" means a business entity
11-2 at least 51 percent of which is owned by members of a minority
11-3 group or, in the case of a corporation, at least 51 percent of the
11-4 shares of which are owned by members of a minority group, and that
11-5 is managed and controlled by members of a minority group in its
11-6 daily operations.
11-7 (2) "Minority group" includes:
11-8 (A) African Americans;
11-9 (B) American Indians;
11-10 (C) Asian Americans; and
11-11 (D) Mexican Americans and other Americans of
11-12 Hispanic origin.
11-13 Sec. 161.132. WOMEN-OWNED BUSINESSES. (a) The board shall
11-14 make a good faith effort to award to women-owned businesses:
11-15 (1) contracts relating to the issuance of bonds by the
11-16 board under this chapter in the amount of at least 10 percent of
11-17 the total costs of issuing those bonds; and
11-18 (2) contracts for the items to be financed by bonds
11-19 issued by the board in the amount of at least 10 percent of the
11-20 proceeds of those bonds.
11-21 (b) Not later than October 31 of each year, the board shall
11-22 file with the governor and each house of the legislature a written
11-23 report containing the following information for the previous year
11-24 for all businesses and for women-owned businesses classified by
11-25 minority group:
12-1 (1) the total number of contracts relating to the
12-2 issuance of bonds by the board under this chapter and to the items
12-3 to be financed by those bonds;
12-4 (2) the total dollar amount the board must pay under
12-5 each contract described by Subdivision (1) of this subsection; and
12-6 (3) the total number of businesses submitting bids or
12-7 proposals relating to the issuance of bonds by the board under this
12-8 chapter and to the items to be financed by those bonds.
12-9 (c) In this section:
12-10 (1) "Women-owned business" means a business entity at
12-11 least 51 percent of which is owned by women or, in the case of a
12-12 corporation, at least 51 percent of the shares of which are owned
12-13 by women, and that is managed and controlled by women in its daily
12-14 operations.
12-15 (2) "Minority group" includes:
12-16 (A) African Americans;
12-17 (B) American Indians;
12-18 (C) Asian Americans; and
12-19 (D) Mexican Americans and other Americans of
12-20 Hispanic origin.
12-21 SECTION 1.16. The heading of Subchapter E, Chapter 161,
12-22 Natural Resources Code, is amended to read as follows:
12-23 SUBCHAPTER E. VETERANS' <VETERANS> LAND FUND
12-24 SECTION 1.17. Section 161.171, Natural Resources Code, is
12-25 amended to read as follows:
13-1 Sec. 161.171. MONEY AND LAND INCLUDED IN <VETERANS LAND>
13-2 FUND. (a) The veterans' <veterans> land fund shall include:
13-3 (1) land purchased by the board from money in the fund
13-4 <until the sale price, interest, and penalties due have been
13-5 received by the board>;
13-6 (2) money attributable to general obligation bonds
13-7 issued and sold by the board, including proceeds from the issuance
13-8 and sale of the bonds;
13-9 (3) money received from the sale or resale of land or
13-10 rights in land purchased with the proceeds from the general
13-11 obligation bonds;
13-12 (4) money received from the sale or resale of land or
13-13 rights in land purchased with other money attributable to the
13-14 general obligation bonds;
13-15 (5) proceeds derived from the sale or other
13-16 disposition of the board's interest in contracts for the sale of
13-17 land or rights in land;
13-18 (6) interest and penalties received from the sale or
13-19 resale of the land or rights in the land;
13-20 (7) <(6)> bonuses, income, rents, royalties, and any
13-21 other pecuniary benefit received by the board from the land;
13-22 (8) <(7)> money received as indemnity or forfeiture
13-23 for the failure of any bidder for purchase of general obligation
13-24 bonds to comply with the person's <his> bid and accept and pay for
13-25 the bonds or for the failure of a bidder for purchase of land
14-1 comprising a part of the fund to comply with the person's <his> bid
14-2 and accept and pay for the land and amounts received by the board
14-3 under bond enhancement agreements with respect to the bonds; and
14-4 (9) <(8)> interest received from investments of this
14-5 money.
14-6 (b) Money in the fund shall be deposited in the State
14-7 Treasury to the credit of the fund.
14-8 <(c) The provisions of this section may not be construed to
14-9 prevent the board from accepting for a portion of a tract of land.>
14-10 SECTION 1.18. Section 161.173, Natural Resources Code, is
14-11 amended to read as follows:
14-12 Sec. 161.173. INVESTMENT OF MONEY IN FUND <PAYMENT OF
14-13 PRINCIPAL AND INTEREST; INVESTMENTS>. (a) <The principal of and
14-14 interest on bonds issued by the board shall be paid from money in
14-15 the fund as provided in the constitutional provision authorizing
14-16 the bonds.>
14-17 <(b)> Except as limited by Subsection (b) <(c)> of this
14-18 section, money in the fund that is not immediately committed to
14-19 paying principal of and interest on the bonds, to the purchase of
14-20 land, or to the payment of expenses as provided in this chapter may
14-21 be invested in:
14-22 (1) direct security repurchase agreements and reverse
14-23 security repurchase agreements made with state or national banks
14-24 domiciled in this state or with primary dealers as approved by the
14-25 Federal Reserve System;
15-1 (2) direct obligations of or obligations the principal
15-2 and interest of which are guaranteed by the United States;
15-3 (3) direct obligations of or obligations guaranteed by
15-4 the Federal Home Loan Banks, the Federal National Mortgage
15-5 Association, the Federal Farm Credit System, the Student Loan
15-6 Marketing Association, the Federal Home Loan Mortgage Corporation,
15-7 or a successor organization to one of those organizations;
15-8 (4) bankers' acceptances that:
15-9 (A) are eligible for purchase by members of the
15-10 Federal Reserve System;
15-11 (B) do not exceed 270 days to maturity; and
15-12 (C) are issued by a bank that has received the
15-13 highest short-term credit rating by a nationally recognized
15-14 investment rating firm;
15-15 (5) commercial paper that:
15-16 (A) does not exceed 270 days to maturity; and
15-17 (B) has received the highest short-term credit
15-18 rating by a nationally recognized investment rating firm;
15-19 (6) contracts written by the board in which the board
15-20 grants the purchaser the right to purchase securities in the
15-21 board's marketable securities portfolio at a specified price over a
15-22 specified period and for which the board is paid a fee and
15-23 specifically prohibits naked-option or uncovered option trading;
15-24 (7) obligations of a state or an agency, county, city,
15-25 or other political subdivision of a state and mutual funds composed
16-1 of these obligations;
16-2 (8) an investment instrument, obligation, or other
16-3 evidence of indebtedness the payment of which is directly or
16-4 indirectly guaranteed by the full faith and credit of the United
16-5 States;
16-6 (9) an investment, account, depository receipt, or
16-7 deposit that is fully:
16-8 (A) insured by the Federal Deposit Insurance
16-9 Corporation, the Federal Savings and Loan Insurance Corporation, or
16-10 a successor organization to one of those organizations; or
16-11 (B) secured by securities described by
16-12 Subdivision (2), (3), or (8) of this subsection;
16-13 (10) a collateralized mortgage obligation fully
16-14 secured by securities or mortgages issued or guaranteed by the
16-15 Government National Mortgage Association (GNMA) or any entity
16-16 described by Subdivision (3) of this subsection;
16-17 (11) a security or evidence of indebtedness issued by
16-18 the Farm Credit System Financial Assistance Corporation, the
16-19 Private Export Funding Corporation, or the Export-Import Bank; and
16-20 (12) any other investment authorized for investment of
16-21 state funds by the treasurer under Section 404.024, Government
16-22 Code.
16-23 (b) <(c)> The board may not invest in or purchase
16-24 obligations of a private corporation or other private business
16-25 entity doing business in the Republic of South Africa unless the
17-1 corporation or other entity:
17-2 (1) has:
17-3 (A) adopted the Statement of Principles for
17-4 South Africa as they existed in 1987, as described in the Report on
17-5 the Signatory Companies to the Statement of Principles for South
17-6 Africa published by Arthur D. Little, Inc., Cambridge,
17-7 Massachusetts, and has obtained a performance rating in Category 1
17-8 or 2 of the Statement of Principles for South Africa rating system
17-9 as determined by Arthur D. Little, Inc.; or
17-10 (B) agreed to the Code of Conduct that is
17-11 enforced by the United States Department of State under Section
17-12 208, Comprehensive Anti-Apartheid Act of 1986 (Pub. L. No. 99-440)
17-13 and has received a rating of "Making Satisfactory Progress"; and
17-14 (2) does not supply strategic products or services for
17-15 use by the government, military, or police of the Republic of South
17-16 Africa.
17-17 (c) <(d)> In this section:
17-18 (1) "Direct security repurchase agreement" means an
17-19 agreement under which the board buys, holds for a specified time,
17-20 and then sells back any of the following securities, obligations,
17-21 or participation certificates:
17-22 (A) United States government securities;
17-23 (B) direct obligations of or obligations the
17-24 principal and interest of which are guaranteed by the United
17-25 States;
18-1 (C) direct obligations of or obligations
18-2 guaranteed by the Federal Home Loan Banks, the Federal National
18-3 Mortgage Association, the Federal Farm Credit System, the Student
18-4 Loan Marketing Association, the Federal Home Loan Mortgage
18-5 Corporation, or a successor organization to one of those
18-6 organizations; or
18-7 (D) any other investment instrument, obligation,
18-8 or other evidence of indebtedness the payment of which is directly
18-9 or indirectly guaranteed by the full faith and credit of the United
18-10 States.
18-11 (2) "Doing business in the Republic of South Africa"
18-12 means conducting or performing manufacturing, assembly, or
18-13 warehousing operations within the Republic of South Africa and for
18-14 a bank or other financial institution, lending money to the
18-15 government of the Republic of South Africa or any of its agencies
18-16 or instrumentalities.
18-17 (3) "Market value" means the fair and reasonable
18-18 prevailing price at which a security is being sold on the open
18-19 market at the time of the appraisement of the security by the
18-20 board.
18-21 (4) "Reverse security repurchase agreement" means an
18-22 agreement under which the board sells and after a specified time
18-23 buys back any of the securities, obligations, or participation
18-24 certificates listed in Paragraphs (A) through (D) of Subdivision
18-25 (1) of this subsection.
19-1 (5) "Strategic products or services" means articles
19-2 designated as arms, ammunition, or implements of war as provided by
19-3 22 Code of Federal Regulations Part 121 or data processing
19-4 equipment or computers sold for military or police use or for use
19-5 in connection with restriction on travel within the Republic of
19-6 South Africa by residents of that country.
19-7 SECTION 1.19. Section 161.174, Natural Resources Code, is
19-8 amended to read as follows:
19-9 Sec. 161.174. USE OF FUND TO PAY PRINCIPAL AND INTEREST
19-10 <DIVISIONS; USE OF MONEY IN DIVISIONS TO PAY FOR VARIOUS BOND
19-11 ISSUES>. The principal of and interest on bonds issued by the
19-12 board shall be paid from money in the fund as provided by the
19-13 constitutional provision authorizing the bonds <(a) A division
19-14 consists of money attributable to bonds issued and sold under a
19-15 single constitutional authorization and land purchased with money
19-16 from that issue.>
19-17 <(b) If a division of the fund contains sufficient money to
19-18 retire bonds secured by the division, the money attributable to
19-19 that division, except that portion necessary to retire bonds in
19-20 that division, may be used at the discretion and direction of the
19-21 board to pay principal of and interest on and authorized expenses
19-22 for other bonds issued and sold by the board. However, the amount
19-23 of money necessary to retire bonds in the division shall be set
19-24 aside and shall remain a part of that division for the purpose of
19-25 retiring those bonds.>
20-1 <(c) No use of money as provided in Subsection (b) of this
20-2 section may be made contrary to the rights of a holder of bonds
20-3 issued and sold by the board or violative of a contract to which
20-4 the board is a party>.
20-5 SECTION 1.20. Section 161.175, Natural Resources Code, is
20-6 amended to read as follows:
20-7 Sec. 161.175. USE OF FUND TO PAY <FOR> EXPENSES RELATED TO
20-8 THE LAND. (a) The board may use money in the fund attributable to
20-9 bonds that have been issued and sold to pay:
20-10 (1) expenses of surveying and monumenting the land and
20-11 the tracts of land;
20-12 (2) the cost of constructing roads on the land or the
20-13 tracts of land;
20-14 (3) legal fees, recordation fees, and advertising
20-15 costs arising from the purchase and sale or resale of the land and
20-16 the tracts of land; and
20-17 (4) other similar costs necessary or incidental to the
20-18 purchase and sale of land acquired by the board.
20-19 (b) These expenses shall be added to the price of the land
20-20 when sold or resold by the board.
20-21 (c) The board may award a contract in an amount not to
20-22 exceed $10,000 to purchase supplies, materials, services, and
20-23 equipment for use by the board in connection with improvements to,
20-24 repairs to, or maintenance of land and with roadways and
20-25 improvements located on land that are undertaken by the board under
21-1 this chapter to make the land more marketable or useable without
21-2 the necessity of soliciting or obtaining competitive bids. The
21-3 board may not award a contract under this subsection in an amount
21-4 that exceeds $10,000 without soliciting or obtaining competitive
21-5 bids <No money in the fund before November 11, 1967, may be used
21-6 to pay the expenses listed in Subsection (a) of this section
21-7 until there is sufficient money in the division to retire all bonds
21-8 secured by the division, at which time, all money except that
21-9 needed to retire the bonds secured by the division, which shall be
21-10 retained in the division to retire the bonds, may be used to pay
21-11 the expenses as fully as the money attributable to bonds>.
21-12 SECTION 1.21. Section 161.176, Natural Resources Code, is
21-13 amended to read as follows:
21-14 Sec. 161.176. USE OF FUND TO PAY BOND EXPENSES. <(a)> The
21-15 board may use money in the fund attributable to bonds issued and
21-16 sold to pay:
21-17 (1) legal fees and fees for financial advice necessary
21-18 in the opinion of the board to the sale of bonds;
21-19 (2) the expense of publishing notice of sale of an
21-20 installment of bonds;
21-21 (3) the expense of printing the bonds;
21-22 (4) the expenses of issuance of the bonds, including
21-23 the actual costs of travel, lodging, and meals of board members,
21-24 officers or employees of the board, the <state> comptroller, the
21-25 State Treasurer, and the attorney general that are necessary in the
22-1 opinion of the board to effectuate the issuance, rating, and
22-2 delivery of the bonds;
22-3 (5) the cost of manually signing the bonds;
22-4 (6) remuneration to any agent employed by the board to
22-5 pay the principal of and interest on the bonds;
22-6 (7) any amounts required to be paid to maintain the
22-7 federal tax exemption of interest on the bonds; and
22-8 (8) all other costs, fees, and expenses relating to
22-9 the issuance of the bonds.
22-10 <(b) No money in a division of the fund created before
22-11 November 11, 1967, may be used to pay the expenses listed in
22-12 Subsection (a) of this section until there is sufficient money
22-13 for the division to retire all bonds secured by the division, at
22-14 which time all money, except that which may be needed to retire the
22-15 bonds, may be used to pay the expenses under Subsection (a) of
22-16 this section as fully as money attributable to bonds issued and
22-17 sold in the future. The money in the division needed to retire the
22-18 bonds shall remain in the division.>
22-19 SECTION 1.22. Section 161.179, Natural Resources Code, is
22-20 amended to read as follows:
22-21 Sec. 161.179. SALE OF LAND AND LAND CONTRACTS.
22-22 Notwithstanding any other provision of this chapter, the board may
22-23 sell at public or private sale, with or without public bidding, any
22-24 or all of the land contracts and related land. Proceeds from the
22-25 sale shall be deposited in the fund or account from which the
23-1 contracts or related land were sold and otherwise applied in the
23-2 manner set forth in this chapter, except that at the direction of
23-3 the board the sale proceeds may be used by the board, together with
23-4 other available money, to discharge, pay, or redeem, in whole or in
23-5 part, outstanding bonds issued by the board <LEGISLATIVE
23-6 APPROPRIATIONS. To the extent not otherwise appropriated by the
23-7 constitution:>
23-8 <(a) During the existence of the fund, if the board
23-9 determines that there will not be sufficient money in the fund
23-10 during the following biennium to pay principal of or interest on
23-11 the bonds or both principal and interest that are to come due
23-12 during the following biennium, the legislature shall appropriate
23-13 from the General Revenue Fund sufficient money to pay the
23-14 obligations.>
23-15 <(b) The money appropriated shall be used to pay the
23-16 obligations only if at the time the principal or interest or both
23-17 actually become due there is not sufficient money in the fund to
23-18 pay the amount due>.
23-19 SECTION 1.23. Subchapter E, Chapter 161, Natural Resources
23-20 Code, is amended by adding Section 161.180 to read as follows:
23-21 Sec. 161.180. TEMPORARY TRANSFERS. Amounts temporarily
23-22 transferred from the fund to the veterans' housing assistance fund
23-23 or the veterans' housing assistance fund II under the Texas
23-24 Constitution shall be returned to the fund as soon as practicable.
23-25 Investment earnings allocated by the board to the transferred
24-1 amounts shall be credited to the fund as if the transfer had not
24-2 been made.
24-3 SECTION 1.24. Section 161.216, Natural Resources Code, is
24-4 amended to read as follows:
24-5 Sec. 161.216. COST OF LAND SOLD BY <TO> BOARD. Except for
24-6 forfeited land that may be resold by <to> the board at less than
24-7 actual cost under Section 161.319 of this code, land shall not be
24-8 sold by <to> the board at less than its actual cost.
24-9 SECTION 1.25. Subsections (a) and (b), Section 161.222,
24-10 Natural Resources Code, are amended to read as follows:
24-11 (a) The purchaser shall make an initial payment in an amount
24-12 set by the board's rules for land sold under this chapter. <In no
24-13 event shall the payment be more than $1,000 together with an
24-14 additional down payment as provided in Sections 161.175 and 161.231
24-15 through 161.234 of this code or Subchapter G of this chapter.>
24-16 (b) The balance of the selling price shall be amortized over
24-17 a period determined by the board not to exceed 40 years together
24-18 with interest at a fixed, variable, floating, or other rate or
24-19 rates <to be> determined by the board.
24-20 SECTION 1.26. Section 161.319, Natural Resources Code, is
24-21 amended to read as follows:
24-22 Sec. 161.319. RESALE OF FORFEITED LAND. (a) Resale of
24-23 forfeited land under this chapter may be made to the highest
24-24 bidder<, but the sale shall be made only to a qualified purchaser
24-25 under Article III, Section 49-b of the Texas Constitution, and>
25-1 under terms and conditions and at the time and in the manner
25-2 prescribed by the board in its rules, the provisions of this
25-3 chapter notwithstanding.
25-4 (b) The board may reject any and all bids.
25-5 (c) If the successful bidder refuses to execute a contract
25-6 of sale and purchase, the money submitted with the person's <his>
25-7 bid is forfeited and shall be deposited in the State Treasury and
25-8 credited to the fund.
25-9 ARTICLE 2
25-10 SECTION 2.01. Section 162.001, Natural Resources Code, is
25-11 amended to read as follows:
25-12 Sec. 162.001. DEFINITIONS. (a) In this chapter:
25-13 (1) "Board" means the Veterans' Land Board.
25-14 (2) "Fund" means the veterans' housing assistance
25-15 fund.
25-16 (3) "Home" means a dwelling within this state in which
25-17 a veteran intends to reside as the veteran's <his> principal
25-18 residence.
25-19 (4) "Lending institution" means a bank, trust company,
25-20 savings bank, national banking association, savings and loan
25-21 association, building and loan association, mortgage banker,
25-22 mortgage company, credit union, life insurance company, or other
25-23 financial institution that customarily provides service or aids in
25-24 the financing of mortgages on single-family residential housing
25-25 which has been approved for participation in the program by the
26-1 board. The term includes a holding company for any of the
26-2 foregoing.
26-3 (5) "Loan" means a veterans' housing assistance loan
26-4 made or acquired by the board under this chapter secured by a
26-5 mortgage on a veteran's home.
26-6 (6) "Program" means the Veterans' Housing Assistance
26-7 Program.
26-8 (7) "Commission" means the Texas Veterans Commission.
26-9 (8) "Veteran" means a person who:
26-10 (A)(i) served not less than 90 continuous days,
26-11 unless sooner discharged by reason of a service-connected
26-12 disability, on active duty in the Army, Navy, Air Force, Coast
26-13 Guard, United States Public Health Service (as constituted under 42
26-14 U.S.C. Section 201 et seq.), or Marine Corps of the United States
26-15 after September 16, 1940, and who on the date of filing a <his>
26-16 loan application has not been dishonorably discharged from the
26-17 branch of the service in which the person <he> served;
26-18 (ii) has at least 20 years of active or
26-19 reserve military service as computed when determining the person's
26-20 eligibility to receive retired pay under applicable federal law; or
26-21 (iii) has enlisted or received an
26-22 appointment in the Texas National Guard, who has completed all
26-23 initial active duty training required as a condition of the
26-24 enlistment or appointment, and who on the date of filing the
26-25 person's loan application has not been dishonorably discharged from
27-1 the Texas National Guard;
27-2 (B) at the time of the person's <his>
27-3 enlistment, induction, commissioning, appointment, or drafting was
27-4 a bona fide resident of this state or has resided in this state at
27-5 least five years immediately before the date of filing an <his>
27-6 application for a loan; and
27-7 (C) at the time of the person's <his>
27-8 application for a loan under this chapter is <a citizen of the
27-9 United States and> a bona fide resident of this state. The term
27-10 includes the unmarried surviving spouse of a veteran who died or
27-11 who is identified as missing in action <in the line of duty> if the
27-12 deceased or missing veteran meets the requirements in this section,
27-13 with the exception that the deceased or missing veteran need not
27-14 have served 90 continuous days under Paragraph (A)(i) of this
27-15 subdivision, and if the deceased or missing veteran was a bona fide
27-16 resident of the state at time of enlistment, induction,
27-17 commissioning, appointment, or drafting.
27-18 (b) Notwithstanding Subdivision (8) of Subsection (a) of
27-19 this section, the board may by rule change the definition of
27-20 "veteran" as necessary or appropriate to protect the best interests
27-21 of the program <in response to changes in the laws of the United
27-22 States as they may affect the program>.
27-23 SECTION 2.02. Subsection (a), Section 162.001, Natural
27-24 Resources Code, is amended by adding Subdivision (9) to read as
27-25 follows:
28-1 (9) "Veterans' housing assistance fund" means the
28-2 Veterans' Housing Assistance Fund established under Article III,
28-3 Section 49-b-1, of the Texas Constitution.
28-4 SECTION 2.03. Subject to Subsection (b) of Section 6.01 of
28-5 this Act, Subdivision (9), Subsection (a), Section 162.001, Natural
28-6 Resources Code, as added by Section 2.02 of this Act, is amended to
28-7 read as follows:
28-8 (9) "Veterans' housing assistance fund" means the
28-9 Veterans' Housing Assistance Fund established under Article III,
28-10 Section 49-b-1, of the Texas Constitution or the Veterans' Housing
28-11 Assistance Fund II established under Article III, Section 49-b-2,
28-12 of the Texas Constitution. Each fund shall be separate and
28-13 distinct from the other fund and the provisions of this chapter
28-14 dealing with the fund shall relate to each fund separately and to
28-15 the separate assets, liabilities, and administration of each fund.
28-16 SECTION 2.04. Section 162.002, Natural Resources Code, is
28-17 amended to read as follows:
28-18 Sec. 162.002. MONEY AND INTERESTS INCLUDED IN THE VETERANS'
28-19 HOUSING ASSISTANCE FUND. (a) The veterans' housing assistance
28-20 fund shall include:
28-21 (1) any interest of the board in <all> home mortgage
28-22 loans made from money in the fund to veterans pursuant to this
28-23 chapter including any insurance thereon or on the homes<, until the
28-24 principal amount together with any interest and penalties due have
28-25 been received by the board>;
29-1 (2) the proceeds derived from the sale or other
29-2 disposition of the board's interest in home mortgage loans;
29-3 (3) the money attributable to any bonds issued and
29-4 sold by the board to provide money for the fund which shall include
29-5 but shall not be limited to the proceeds from the issuance and sale
29-6 of such bonds;
29-7 (4) <(3)> income, rents, and any other pecuniary
29-8 benefit received by the board as a result of making these loans;
29-9 (5) <(4)> sums received by way of indemnity or
29-10 forfeiture for the failure of any bidder for the purchase of any
29-11 such bonds to comply with the person's <his> bid and accept and pay
29-12 for such bonds and amounts received by the board under bond
29-13 enhancement agreements with respect to the bonds;
29-14 (6) <(5)> interest received from investments of any
29-15 such money; and
29-16 (7) <(6)> any equitable interest in properties
29-17 encumbered under this program and attributable to the fund.
29-18 (b) Money in the fund shall be deposited in the State
29-19 Treasury to the credit of the fund.
29-20 SECTION 2.05. Subchapter A, Chapter 162, Natural Resources
29-21 Code, is amended by adding Section 162.005 to read as follows:
29-22 Sec. 162.005. SALE OF LOANS. Notwithstanding any other
29-23 provision of this chapter, the board may sell at public or private
29-24 sale, with or without public bidding, any or all of the loans in
29-25 the fund. Proceeds from the sale shall be deposited in the fund
30-1 and otherwise applied in the manner provided by this chapter,
30-2 except that at the direction of the board the sale proceeds may be
30-3 used by the board, together with other available money, to
30-4 discharge, pay, or redeem, in whole or in part, outstanding bonds
30-5 issued by the board under this chapter.
30-6 SECTION 2.06. Subchapter A, Chapter 162, Natural Resources
30-7 Code, is amended by adding Section 162.006 to read as follows:
30-8 Sec. 162.006. TEMPORARY TRANSFERS. Amounts temporarily
30-9 transferred from either veterans' housing assistance fund to the
30-10 veterans' land fund or to the other veterans' housing assistance
30-11 fund under the Texas Constitution shall be returned to the fund as
30-12 soon as practicable. Investment earnings allocated by the board
30-13 to the transferred amounts shall be credited to the fund as if the
30-14 transfer had not been made.
30-15 SECTION 2.07. Section 162.011, Natural Resources Code, is
30-16 amended to read as follows:
30-17 Sec. 162.011. LOANS. (a) The board shall make or acquire
30-18 loans with money from the veterans' housing assistance fund in
30-19 accordance with this chapter and the rules adopted by the board.
30-20 (b) To qualify for a loan under this chapter, a person must
30-21 be a veteran at the time the person <he> applies for the loan. If
30-22 an eligible veteran dies after filing an application, the surviving
30-23 spouse may complete the transaction.
30-24 (c) The <A loan under this chapter may not exceed $45,000
30-25 and the> final principal payment on any <the> loan under this
31-1 chapter shall be made not later than 40 years after the date of the
31-2 loan. The board shall determine the maximum principal amount of
31-3 loans to any veteran that may be outstanding at any time, except
31-4 that a loan under this chapter to a veteran to finance the
31-5 acquisition of a home may not exceed $45,000<, and such a loan may
31-6 not previously have been granted to the same veteran under this
31-7 chapter. The board in its discretion may waive this requirement
31-8 for circumstances the board deems appropriate, including but not
31-9 limited to veterans who financed homes with a loan under this
31-10 chapter who are forced to move due to a change in employment or
31-11 because their homes are condemned through no fault of the veteran>.
31-12 (d) The board shall obtain insurance covering at least 50
31-13 percent of all losses anticipated in connection with veteran
31-14 payment defaults on loans secured by first or second mortgages,
31-15 based upon the advice of one or more qualified consultants to the
31-16 board as to potential losses which may be reasonably expected on
31-17 the loans as determined by analysis, including but not limited to
31-18 actual experience in the residential mortgage lending industry on
31-19 similar types of mortgage loans, or, in the alternative, the board
31-20 shall obtain insurance which shall insure repayment of at least 50
31-21 percent of the outstanding principal amount of all loans in the
31-22 event of the nonpayment of the loans by the veterans.
31-23 (e) <Funds approved for disbursement under this chapter
31-24 shall be forwarded directly to a lending institution.>
31-25 <(f)> All fees to be charged to a veteran receiving a loan
32-1 under this chapter must be approved by the board. The board may
32-2 enter into contracts with lending institutions to assist in
32-3 processing, originating, servicing, or administering loans under
32-4 this chapter. Any fees and expenses incurred in connection with a
32-5 loan, including the cost of insurance, may be charged to the
32-6 veteran and made a part of the veteran's payments.
32-7 SECTION 2.08. Section 162.013, Natural Resources Code, is
32-8 amended to read as follows:
32-9 Sec. 162.013. INTEREST RATE. A loan under this chapter
32-10 shall bear a fixed, variable, floating, or other <an interest> rate
32-11 or rates of interest determined <fixed> by the board. The board
32-12 may set the interest rate or rates to provide a margin over the
32-13 rate paid by the board on its bonds issued under this chapter. The
32-14 difference between the cost of the money to the board and the
32-15 interest rate or rates charged to a veteran may be used in whole or
32-16 in part to defray the expense of administering the program. To
32-17 assure the maximum benefit of the program to the veteran, the board
32-18 shall adopt rules relative to the fees, charges, and interest rates
32-19 charged by the lending institutions on the financing of the home
32-20 with money other than from the fund and shall limit to the maximum
32-21 extent practical such fees, charges, and interest rates to those
32-22 which would be collected by the lending institution in the normal
32-23 course of its residential mortgage lending business.
32-24 SECTION 2.09. Section 162.015, Natural Resources Code, is
32-25 amended to read as follows:
33-1 Sec. 162.015. INITIAL PAYMENT OR EQUITY. The board may
33-2 require an initial payment on a loan <of not more than five percent
33-3 of the loan> or may require an investment in the home by the
33-4 veteran in an amount or amounts set by the board's rules under this
33-5 chapter <not to exceed five percent of the amount of the loan>.
33-6 SECTION 2.10. Section 162.031, Natural Resources Code, is
33-7 amended to read as follows:
33-8 Sec. 162.031. ISSUANCE AND SALE OF BONDS; DISPOSITION OF
33-9 PROCEEDS. (a) By appropriate action, the board may provide by
33-10 resolution for the issuance and sale of negotiable bonds authorized
33-11 by the constitution, and the proceeds shall be a part of the fund,
33-12 except that the proceeds of bonds issued under the authority of
33-13 Article III, Section 49-b-1, of the Texas Constitution for the
33-14 purpose of making loans to veterans shall be a part of the
33-15 veterans' housing assistance fund established by that provision,
33-16 and the proceeds of bonds issued under the authority of Article
33-17 III, Section 49-b-2, of the Texas Constitution for the purpose of
33-18 making loans to veterans shall be a part of the veterans' housing
33-19 assistance fund established by that provision.
33-20 (b) The board may use money in the fund attributable to
33-21 bonds issued to provide money for the fund to pay all costs of
33-22 issuance of the bonds, including costs, fees, and expenses of the
33-23 sort the board is authorized to pay from the veterans' <veterans>
33-24 land fund in connection with the issuance of the veterans'
33-25 <veterans> land bonds.
34-1 SECTION 2.11. Section 162.034, Natural Resources Code, is
34-2 amended to read as follows:
34-3 Sec. 162.034. PAYMENT AND MATURITY OF BONDS. (a) The bonds
34-4 shall be payable as provided by the board and shall mature serially
34-5 or otherwise not later than 40 years from the date of their
34-6 issuance.
34-7 (b) The board may make the bonds redeemable or subject to
34-8 tender for purchase before maturity at the price and under the
34-9 terms and conditions fixed by the board in the resolution providing
34-10 for the issuance and sale of the bonds.
34-11 SECTION 2.12. Subsection (b), Section 162.036, Natural
34-12 Resources Code, is amended to read as follows:
34-13 (b) The bonds shall be signed by the chairman and the
34-14 executive secretary of the board and the seal of the board shall be
34-15 impressed on the bonds. In addition, the bonds shall be signed by
34-16 the governor and attested by the secretary of state with the seal
34-17 of the state impressed on the bonds.
34-18 SECTION 2.13. Section 162.044, Natural Resources Code, is
34-19 amended to read as follows:
34-20 Sec. 162.044. SALE OF BONDS. Bonds <The bonds> may be sold
34-21 at public or private sale at a price or prices and on terms
34-22 determined by the board <after competitive bidding to the highest
34-23 and best bidder provided the bonds are sold for not less than par
34-24 value and accrued interest>.
34-25 SECTION 2.14. Section 162.047, Natural Resources Code, is
35-1 amended to read as follows:
35-2 Sec. 162.047. BONDS AS INVESTMENTS AND SECURITY. (a) Bonds
35-3 issued under <Article III, Section 49-b-1, of the Texas
35-4 Constitution and> this chapter are legal and authorized investments
35-5 for banks, savings banks, trust companies, building and loan
35-6 associations, insurance companies, fiduciaries, trustees,
35-7 guardians, and the sinking funds of cities, towns, villages,
35-8 counties, school districts, and other political subdivisions and
35-9 public agencies of the state.
35-10 (b) The bonds are legal and sufficient security for the
35-11 deposits in the amount of the par value of the bonds.
35-12 SECTION 2.15. Section 162.050, Natural Resources Code, is
35-13 amended to read as follows:
35-14 Sec. 162.050. CONSTITUTIONAL APPROPRIATIONS. (a) If,
35-15 during the existence of the fund or during the time any general
35-16 obligation bonds are payable from the fund, the board determines
35-17 that there will not be sufficient money in the fund during the
35-18 following biennium available to pay principal of or interest on the
35-19 bonds or both principal and interest that are to come due and to be
35-20 paid from the fund during the following biennium, the comptroller
35-21 <of public accounts> shall transfer to the fund the first money
35-22 coming into the State Treasury not otherwise appropriated by the
35-23 constitution in amounts sufficient to pay the obligations.
35-24 (b) The money appropriated shall be used to pay the
35-25 obligations only if at the time the principal or interest or both
36-1 actually become due there is not sufficient money in the fund
36-2 available to pay the amount due.
36-3 SECTION 2.16. Subchapter C, Chapter 162, Natural Resources
36-4 Code, is amended by adding Section 162.051 to read as follows:
36-5 Sec. 162.051. PURCHASE AND DESTRUCTION OF BONDS. (a) The
36-6 board may use money in the fund to purchase on the open market any
36-7 bonds it has issued and sold to provide money for the fund, and the
36-8 debt represented by those bonds when purchased is considered
36-9 canceled.
36-10 (b) Bonds purchased by the board under Subsection (a) of
36-11 this section shall be mutilated, burned, or otherwise destroyed by
36-12 the state treasurer, who shall certify this fact to the board under
36-13 the seal of office.
36-14 (c) Interest may not be paid on those bonds after their
36-15 purchase by the board.
36-16 SECTION 2.17. Subchapter C, Chapter 162, Natural Resources
36-17 Code, is amended by adding Section 162.052 to read as follows:
36-18 Sec. 162.052. BOND ENHANCEMENT AGREEMENTS. The board may at
36-19 any time and from time to time enter into one or more bond
36-20 enhancement agreements that the board determines to be necessary or
36-21 appropriate to place the obligation of the board, as represented by
36-22 the bonds, in whole or in part, on the interest rate, currency,
36-23 cash flow, or other basis desired by the board. Bond enhancement
36-24 agreements may include, on terms and conditions approved by the
36-25 board, interest rate swap agreements, currency swap agreements,
37-1 forward payment conversion agreements, agreements providing for
37-2 payments based on levels of or changes in interest rates or
37-3 currency exchange rates, agreements to exchange cash flows or a
37-4 series of payments, or agreements, including options, puts, or
37-5 calls, to hedge payment, currency, rate, spread, or other exposure.
37-6 A bond enhancement agreement is an agreement for professional
37-7 services and shall contain the terms and conditions and be for the
37-8 period that the board approves. The fees and expenses of the board
37-9 in connection with the issuance of bonds and the making of loans
37-10 may be paid from money in the related fund, provided that any
37-11 payments due from the board under a bond enhancement agreement,
37-12 other than fees and expenses, that relate to the payment of debt
37-13 service on bonds constitute payments of principal of and interest
37-14 on the bonds.
37-15 ARTICLE 3
37-16 SECTION 3.01. Title 7, Natural Resources Code, is amended by
37-17 adding Chapter 164 to read as follows:
37-18 CHAPTER 164. VETERANS' FINANCIAL ASSISTANCE PROGRAM
37-19 Sec. 164.001. PURPOSE AND POLICY. (a) The legislature
37-20 declares that it is the policy of the state to provide financial
37-21 assistance to veterans of the state in recognition of their service
37-22 to this state and the United States.
37-23 (b) The legislature declares that existing mechanisms for
37-24 implementing the policy stated in Subsection (a) of this section
37-25 may be enhanced by adoption of this chapter and implementation of
38-1 the financial assistance programs authorized by this chapter.
38-2 (c) The legislature finds that this chapter and the
38-3 financial assistance programs authorized by this chapter are in
38-4 furtherance of a public purpose.
38-5 Sec. 164.002. DEFINITIONS. (a) In this chapter:
38-6 (1) "Board" means the Veterans' Land Board.
38-7 (2) "Bonds" means the revenue bonds issued by the
38-8 board under this chapter.
38-9 (3) "Financial assistance" means the purchase of land,
38-10 the sale of land to veterans, and the making of home mortgage loans
38-11 to veterans, as provided for in this chapter.
38-12 (4) "Home" means a dwelling within this state in which
38-13 a veteran intends to reside as the veteran's principal residence.
38-14 (5) "Lending institution" means a bank, trust company,
38-15 savings bank, national banking association, savings and loan
38-16 association, building and loan association, mortgage banker,
38-17 mortgage company, credit union, life insurance company, or other
38-18 financial institution that customarily provides service or aids in
38-19 the financing of mortgages on single-family residential housing
38-20 that has been approved for participation by the board, including a
38-21 holding company for a lending institution.
38-22 (6) "Veteran" means a person who:
38-23 (A)(i) served not less than 90 continuous days,
38-24 unless sooner discharged by reason of a service-connected
38-25 disability, on active duty in the Army, Navy, Air Force, Coast
39-1 Guard, United States Public Health Service (as constituted under 42
39-2 U.S.C. Section 201 et seq.), or Marine Corps of the United States
39-3 after September 16, 1940, and who on the date of filing an
39-4 application for financial assistance under this chapter has not
39-5 been dishonorably discharged from the branch of the service in
39-6 which the person served;
39-7 (ii) has at least 20 years of active or
39-8 reserve military service as computed when determining the person's
39-9 eligibility to receive retired pay under applicable federal law; or
39-10 (iii) has enlisted or received an
39-11 appointment in the Texas National Guard, who has completed all
39-12 initial active duty training required as a condition of the
39-13 enlistment or appointment, and who on the date of filing the
39-14 person's application has not been dishonorably discharged from the
39-15 Texas National Guard;
39-16 (B) at the time of the person's enlistment,
39-17 induction, commissioning, appointment, or drafting was a bona fide
39-18 resident of this state or has resided in this state at least one
39-19 year immediately before the date of filing an application; and
39-20 (C) at the time of the person's application
39-21 under this chapter is a bona fide resident of this state. The term
39-22 includes the unmarried surviving spouse of a veteran who died or
39-23 who is identified as missing in action if the deceased or missing
39-24 veteran meets the requirements in this section, with the exception
39-25 that the deceased or missing veteran need not have served 90
40-1 continuous days under Paragraph (A)(i) of this subdivision, and if
40-2 the deceased or missing veteran was a bona fide resident of the
40-3 state at the time of enlistment, induction, commissioning,
40-4 appointment, or drafting.
40-5 (b) Notwithstanding Subdivision (6) of Subsection (a) of
40-6 this section, the board may by rule change the definition of
40-7 "veteran" as necessary or appropriate to protect the best interests
40-8 of the program.
40-9 Sec. 164.003. FINANCIAL ASSISTANCE PROGRAMS. The board may
40-10 establish one or more programs for providing financial assistance
40-11 to veterans under this chapter. A program may be limited to the
40-12 purpose of purchasing land, selling land to veterans, or making
40-13 home mortgage loans to veterans. To the extent a financial
40-14 assistance program is for the purpose of purchasing land or selling
40-15 land to veterans, the program shall be administered, to the extent
40-16 consistent with this chapter and otherwise deemed practicable and
40-17 desirable by the board, in accordance with the board's Veterans'
40-18 Land Program. To the extent a financial assistance program is for
40-19 the purpose of making home mortgage loans to veterans, the program
40-20 shall be administered, to the extent consistent with this chapter
40-21 and otherwise deemed practicable and desirable by the board, in
40-22 accordance with the board's Veterans' Housing Assistance Program.
40-23 Sec. 164.004. RULES. The board shall adopt rules providing
40-24 for the administration of its financial assistance programs
40-25 established under this chapter, including rules concerning:
41-1 (1) the purchasing of land and the selling of land to
41-2 veterans;
41-3 (2) the making of home mortgage loans to veterans;
41-4 (3) the use of insurance on land and homes as deemed
41-5 appropriate by the board, as further security for land sold or home
41-6 mortgage loans made;
41-7 (4) the criteria for approving lending institutions
41-8 participating in programs;
41-9 (5) the terms and conditions of a contract made with a
41-10 lending institution; and
41-11 (6) other matters as the board deems appropriate.
41-12 Sec. 164.005. RIGHTS AND POWERS OF BOARD. In connection
41-13 with the administration of its financial assistance programs under
41-14 this chapter, the board has and may exercise, to the extent not
41-15 inconsistent with this chapter, all the rights and powers granted
41-16 to it by Chapters 161 and 162 of this code relating to the
41-17 administration of the board's Veterans' Land Program and Veterans'
41-18 Housing Assistance Program.
41-19 Sec. 164.006. ISSUANCE OF BONDS. For the issuance of bonds
41-20 under this chapter, the board may exercise the authority granted to
41-21 the governing body of an issuer with regard to issuance of
41-22 obligations under Chapter 656, Acts of the 68th Legislature,
41-23 Regular Session, 1983 (Article 717q, Vernon's Texas Civil
41-24 Statutes), to the extent that it is not inconsistent with this
41-25 chapter.
42-1 Sec. 164.007. CONDITIONS FOR ISSUANCE OF BONDS. (a) Bonds
42-2 may be issued in various series and issues.
42-3 (b) Bonds shall be payable as provided by the board and may
42-4 mature serially or otherwise.
42-5 (c) Bonds shall be redeemable before maturity or subject to
42-6 tender for purchase at the price or prices and under the terms and
42-7 conditions fixed by the board in the resolution providing for the
42-8 issuance and sale of the bonds.
42-9 (d) Bonds may bear a fixed, variable, floating, or other
42-10 rate or rates of interest or may bear no interest, as determined by
42-11 the board.
42-12 (e) Bonds may be sold at public or private sale at a price
42-13 or prices and on terms determined by the board.
42-14 (f) Bonds issued under this chapter for a purpose other than
42-15 buying back or refunding general obligation bonds issued under
42-16 Article III, Section 49-b, 49-b-1, or 49-b-2, of the Texas
42-17 Constitution may not in the aggregate exceed $250 million.
42-18 Sec. 164.008. FORM OF BONDS. (a) The bonds may be issued
42-19 in the form, denominations, and manner and under the terms,
42-20 conditions, and details as provided by the board in the resolution
42-21 authorizing their existence.
42-22 (b) The bonds shall be signed and executed as provided by
42-23 the board's resolution or order authorizing the issuance of the
42-24 bonds.
42-25 Sec. 164.009. SECURITY FOR THE BONDS. (a) The bonds issued
43-1 under this chapter shall be special obligations of the board. As
43-2 security for the payment of the bonds, the board may provide for a
43-3 pledge of and lien on:
43-4 (1) receipts of all kinds of the veterans' land fund
43-5 and the veterans' housing assistance fund that are determined by
43-6 the board, on the basis of facts, circumstances, and expectations
43-7 at the time of issuance of the bonds, not to be required for the
43-8 payment of the principal of or interest on the general obligation
43-9 bonds issued under Article III, Sections 49-b and 49-b-1, of the
43-10 Texas Constitution or to make payments with respect to principal or
43-11 interest under a bond enhancement agreement with respect to the
43-12 general obligation bonds;
43-13 (2) the assets of the veterans' land fund or the
43-14 veterans' housing assistance fund determined by the board, on the
43-15 basis of facts, circumstances, and expectations at the time of
43-16 issuance of the bonds, not to be required for the purposes of the
43-17 fund;
43-18 (3) the repayments received by the board from
43-19 financial assistance provided under this chapter;
43-20 (4) other program revenues; and
43-21 (5) other lawfully available revenues of the board.
43-22 (b) The pledge and lien are to be provided for and
43-23 determined in accordance with the resolution of the board providing
43-24 for the issuance and sale of the bonds.
43-25 Sec. 164.010. BOND ENHANCEMENT AGREEMENTS. The board may at
44-1 any time and from time to time enter into one or more bond
44-2 enhancement agreements that the board deems to be necessary or
44-3 appropriate to place the obligation of the board, as represented by
44-4 the bonds, in whole or in part, on the interest rate, currency,
44-5 cash flow, or other basis desired by the board. Bond enhancement
44-6 agreements may include, on terms and conditions approved by the
44-7 board, interest rate swap agreements, currency swap agreements,
44-8 forward payment conversion agreements, agreements providing for
44-9 payments based on levels of or changes in interest rates or
44-10 currency exchange rates, agreements to exchange cash flows or a
44-11 series of payments, or agreements including options, puts, or
44-12 calls, to hedge payment, currency, rate, spread, or other exposure.
44-13 A bond enhancement agreement is an agreement for professional
44-14 services and shall contain the terms and conditions and be for the
44-15 period that the board approves. The cost to the board of the bond
44-16 enhancement agreement may be paid from the proceeds of the sale of
44-17 the bonds to which the bond enhancement agreement relates or from
44-18 any other source, including the revenues of the board that are
44-19 available for the purpose of paying the bonds or that may otherwise
44-20 be available to make those payments.
44-21 Sec. 164.011. FUNDS. (a) In the resolution authorizing the
44-22 issuance of bonds, the board may make additional covenants with
44-23 respect to the bonds and the pledged revenues and may provide for
44-24 the flow of funds and the establishment, maintenance, and
44-25 investment of funds.
45-1 (b) The funds established may include an interest and
45-2 sinking fund, a reserve fund, and other funds that will be kept and
45-3 maintained by or under the direction of the board.
45-4 (c) Funds established by the board under this chapter are
45-5 not to be part of the State Treasury but, at the direction of the
45-6 board, may be kept and held in escrow and in trust by the state
45-7 treasurer on behalf of the board and the owners of the bonds and
45-8 used only as provided by this chapter.
45-9 (d) Money in a fund shall be invested in authorized
45-10 investments as provided by a bond resolution or order of the board.
45-11 (e) Legal title to money in a fund is in the board unless or
45-12 until paid from the fund as provided by this chapter or the
45-13 resolution authorizing the issuance of the bonds.
45-14 (f) The state treasurer, as custodian of the fund, shall
45-15 administer the fund solely and strictly as provided by this chapter
45-16 and the resolution authorizing the issuance of the bonds, and the
45-17 state may not take any other action relating to the fund except
45-18 those specified in this chapter and the resolution authorizing the
45-19 issuance of the bonds.
45-20 Sec. 164.012. RESOLUTIONS. (a) The resolution authorizing
45-21 the issuance of the bonds may prohibit the further issuance of
45-22 bonds or other obligations payable from the pledged revenues or may
45-23 reserve the right to issue additional bonds to be secured by a
45-24 pledge of and payable from the revenue on a parity with or
45-25 subordinate to the lien and pledge in support of the bonds being
46-1 issued.
46-2 (b) The resolution of the board authorizing the issuance of
46-3 the bonds may include other provisions and covenants that the board
46-4 determines necessary.
46-5 (c) In a resolution authorizing the issuance of bonds, the
46-6 board may prescribe systems, methods, routines, and procedures
46-7 under which the board will function.
46-8 (d) The board may adopt and have executed any other
46-9 proceedings or instruments necessary or convenient in the issuance
46-10 of bonds.
46-11 Sec. 164.013. INVESTMENT SECURITIES. The bonds and any
46-12 interest coupons are investment securities under Chapter 8,
46-13 Business & Commerce Code, and may be issued registrable as to
46-14 principal or as to both principal and interest or may be made
46-15 redeemable before maturity at the option of the authority or may
46-16 contain a mandatory redemption provision.
46-17 Sec. 164.014. APPROVAL OF THE ATTORNEY GENERAL. Bonds
46-18 issued under this chapter are subject to review and approval by the
46-19 attorney general in the same manner and with the same effect as
46-20 provided by Chapter 656, Acts of the 68th Legislature, Regular
46-21 Session, 1983 (Article 717q, Vernon's Texas Civil Statutes).
46-22 Sec. 164.015. REFUNDING BONDS. (a) The board may issue
46-23 refunding bonds to refund all or part of its outstanding bonds
46-24 issued under this chapter, including matured but unpaid interest.
46-25 (b) The board may refund bonds in the manner provided by
47-1 general law for revenue bonds.
47-2 Sec. 164.016. BONDS AS INVESTMENTS AND SECURITY. (a) The
47-3 bonds are legal and authorized investments for banks, savings
47-4 banks, trust companies, savings and loan companies, insurance
47-5 companies, fiduciaries, trustees, guardians, the sinking funds of
47-6 cities, towns, villages, counties, school districts, and other
47-7 political subdivisions of the state, and other public funds of the
47-8 state and its agencies.
47-9 (b) The bonds are eligible to secure deposits of public
47-10 funds of the state and cities, counties, school districts, and
47-11 other political subdivisions of the state. The bonds are lawful
47-12 and sufficient security for deposits to the extent of their par
47-13 value.
47-14 Sec. 164.017. TAX EXEMPT. Since the board is performing an
47-15 essential governmental function in the exercise of the powers
47-16 conferred on it by this chapter, the bonds issued under this
47-17 chapter, and the interest and income from the bonds, including any
47-18 profit made on the sale of bonds, and all fees, charges, gifts,
47-19 grants, revenues, receipts, and other money received or pledged to
47-20 pay or secure the payment of bonds are free from taxation and
47-21 assessments of every kind by this state and any city, county,
47-22 district, authority, or other political subdivision of this state.
47-23 Sec. 164.018. NO PLEDGE OF STATE FAITH AND CREDIT; COVENANT
47-24 WITH OWNERS OF BONDS. (a) Bonds issued under this chapter are
47-25 special obligations of the board and are payable only from and
48-1 secured only by the revenues and assets pledged to secure payment
48-2 of the bonds under the Texas Constitution and this chapter, and the
48-3 bonds are not and do not create or constitute a pledge, gift, or
48-4 loan of the faith, credit, or taxing authority of the state.
48-5 (b) Each bond must include a statement that the faith or
48-6 credit and the taxing authority of the state are not pledged,
48-7 given, or loaned to secure payment of the principal of, or premium
48-8 or interest on the bonds.
48-9 (c) The state pledges to and agrees with the owners of bonds
48-10 issued under this chapter that the state will not limit or alter
48-11 the rights vested in the board to fulfill the terms of agreements
48-12 made with the owners of the bonds or in any way impair the rights
48-13 and remedies of those owners until the bonds, together with any
48-14 premium and interest, interest on any unpaid premium or
48-15 installments of interest, and all costs and expenses in connection
48-16 with any action or proceeding by or on behalf of those owners, are
48-17 fully met and discharged. The board may include this pledge and
48-18 agreement of the state in an agreement with the owners of the
48-19 bonds.
48-20 Sec. 164.019. ENFORCEMENT BY MANDAMUS. A writ of mandamus
48-21 and all other legal and equitable remedies are available to a party
48-22 in interest to require the board and any other party to carry out
48-23 agreements and to perform functions and duties under this chapter,
48-24 the Texas Constitution, or the board's bond resolutions or orders.
48-25 SECTION 3.02. Subject to Subsection (b) of Section 6.01 of
49-1 this Act, Section 164.009, Natural Resources Code, as added by
49-2 Section 3.01 of this Act, is amended to read as follows:
49-3 Sec. 164.009. SECURITY FOR THE BONDS. (a) The bonds issued
49-4 under this chapter shall be special obligations of the board. As
49-5 security for the payment of the bonds, the board may provide for a
49-6 pledge of and lien on:
49-7 (1) the receipts of all kinds of the veterans' land
49-8 fund, the veterans' housing assistance fund, and the veterans'
49-9 housing assistance fund II determined by the board, on the basis of
49-10 facts, circumstances, and expectations at the time of issuance of
49-11 the bonds, not to be required for the payment of principal of or
49-12 interest on the general obligation bonds issued under Article III,
49-13 Sections 49-b, 49-b-1, and 49-b-2, of the Texas Constitution or to
49-14 make payments with respect to principal or interest under a bond
49-15 enhancement agreement with respect to the general obligation bonds;
49-16 (2) the assets of the veterans' land fund, the
49-17 veterans' housing assistance fund, or the veterans' housing
49-18 assistance fund II determined by the board on the basis of facts,
49-19 circumstances, and expectations at the time of issuance of the
49-20 bonds not to be required for the purposes of the fund;
49-21 (3) the repayments received by the board from
49-22 financial assistance provided under this chapter;
49-23 (4) other program revenues; and
49-24 (5) other available revenues of the board.
49-25 (b) The pledge and lien are to be provided for and
50-1 determined in accordance with the resolution of the board providing
50-2 for the issuance and sale of the bonds.
50-3 ARTICLE 4
50-4 SECTION 4.01. Article 4, State Purchasing and General
50-5 Services Act (Article 601b, Vernon's Texas Civil Statutes), is
50-6 amended by adding Section 3.052 to read as follows:
50-7 Sec. 3.052. PURCHASES BY THE VETERANS' LAND BOARD. This Act
50-8 does not apply to purchases of supplies, materials, services, or
50-9 equipment for use by the Veterans' Land Board in connection with
50-10 improvements to, repairs to, or maintenance of land or other
50-11 activities undertaken by the Veterans' Land Board with respect to
50-12 land under the provisions of Section 161.175, Natural Resources
50-13 Code.
50-14 ARTICLE 5
50-15 SECTION 5.01. Sections 161.122, 161.172, and 161.211,
50-16 Natural Resources Code, are repealed.
50-17 ARTICLE 6
50-18 SECTION 6.01. (a) Except as provided by Subsection (b) of
50-19 this section, this Act takes effect immediately.
50-20 (b) Sections 1.23, 2.03, 2.06, 2.10, and 3.02 of this Act
50-21 take effect on the date on which the constitutional amendment
50-22 proposed by S.J.R. No. 34, 73rd Legislature, Regular Session, 1993,
50-23 takes effect. On the adoption of that amendment, Section 2.03 of
50-24 this Act shall supersede and replace Section 2.02 of this Act, and
50-25 Section 2.02 of this Act shall have no further effect, and Section
51-1 164.009, Natural Resources Code, as added by Section 3.02 of this
51-2 Act shall supersede and replace Section 164.009, Natural Resources
51-3 Code, as added by Section 3.01 of this Act, and Section 164.009,
51-4 Natural Resources Code, as added by Section 3.01 of this Act shall
51-5 have no further effect. If that amendment is not approved by the
51-6 voters, Sections 1.23, 2.03, 2.06, 2.10, and 3.02 of this Act have
51-7 no effect.
51-8 SECTION 6.02. The importance of this legislation and the
51-9 crowded condition of the calendars in both houses create an
51-10 emergency and an imperative public necessity that the
51-11 constitutional rule requiring bills to be read on three several
51-12 days in each house be suspended, and this rule is hereby suspended,
51-13 and that this Act take effect and be in force according to its
51-14 terms, and it is so enacted.