1-1 By: Turner S.B. No. 819
1-2 (In the Senate - Filed March 10, 1993; March 15, 1993, read
1-3 first time and referred to Committee on Finance; April 15, 1993,
1-4 reported adversely, with favorable Committee Substitute by the
1-5 following vote: Yeas 11, Nays 0; April 15, 1993, sent to printer.)
1-6 COMMITTEE VOTE
1-7 Yea Nay PNV Absent
1-8 Montford x
1-9 Turner x
1-10 Armbrister x
1-11 Barrientos x
1-12 Bivins x
1-13 Ellis x
1-14 Haley x
1-15 Moncrief x
1-16 Parker x
1-17 Ratliff x
1-18 Sims x
1-19 Truan x
1-20 Zaffirini x
1-21 COMMITTEE SUBSTITUTE FOR S.B. No. 819 By: Turner
1-22 A BILL TO BE ENTITLED
1-23 AN ACT
1-24 relating to financial assistance programs administered by the
1-25 Veterans' Land Board.
1-26 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-27 ARTICLE 1
1-28 SECTION 1.01. Section 161.001, Natural Resources Code, is
1-29 amended to read as follows:
1-30 Sec. 161.001. DEFINITIONS. (a) In this chapter:
1-31 (1) "Board" means the Veterans' <Veterans> Land Board.
1-32 (2) "Commissioner" means the Commissioner of the
1-33 General Land Office.
1-34 (3) "Land office" means the General Land Office.
1-35 (4) "Program" means the Veterans' <Veterans> Land
1-36 Program.
1-37 (5) "Fund" means the veterans' <veterans> land fund.
1-38 (6) "Bonds" means general obligation <veterans land>
1-39 bonds issued by the board for the purpose of funding the program.
1-40 (7) "Veteran" means a person who:
1-41 (A)(i) served not less than 90 continuous days
1-42 <after September 16, 1940>, unless sooner discharged by reason of a
1-43 service-connected disability, on active duty in the Army, Navy, Air
1-44 Force, Coast Guard, United States Public Health Service (as
1-45 constituted under 42 U.S.C. Section 201 et seq.),<;> or Marine
1-46 Corps of the United States after September 16, 1940, and who on
1-47 <and has not been dishonorably discharged or released from any of
1-48 those branches as of> the date of filing an application under the
1-49 program has not been dishonorably discharged from the branch of the
1-50 service in which the person served;
1-51 (ii) has at least <his application, or who
1-52 has completed> 20 years of active or reserve military service as
1-53 computed when determining the person's eligibility to receive
1-54 retired pay <creditable for retirement> under applicable federal
1-55 law; <laws,> or
1-56 (iii) has enlisted or received an <who has
1-57 completed all initial active duty training required as a condition
1-58 of enlistment or> appointment in the Texas National Guard, who has
1-59 completed all initial active duty training required as a condition
1-60 of the enlistment or appointment, and who on the date of filing the
1-61 person's application has not been dishonorably discharged from the
1-62 Texas National Guard;
1-63 (B) at the time of the person's <his>
1-64 enlistment, induction, commissioning, appointment, or drafting was
1-65 a bona fide resident of this state or has resided in this state at
1-66 least five years immediately before the date of filing an <his>
1-67 application under this chapter <for a loan>; and
1-68 (C) at the time of the person's <his>
2-1 application <for a loan> under this chapter is <a citizen of the
2-2 United States and> a bona fide resident of this state. The term
2-3 includes the unmarried surviving spouse of a veteran who died or
2-4 who is identified as missing in action if the deceased or missing
2-5 veteran meets the requirements of this section, with the exception
2-6 that the deceased or missing veteran need not have served 90
2-7 continuous days under Paragraph (A)(i) of this subdivision, and if
2-8 the deceased or missing veteran <in the line of duty provided the
2-9 deceased veteran> was a bona fide resident of this state at the
2-10 time of enlistment, induction, commissioning, appointment, or
2-11 drafting. <In order for the surviving spouse to qualify, the
2-12 deceased veteran must meet the requirements in this section with
2-13 the exception that the deceased veteran need not have served 90
2-14 continuous days><.>
2-15 (b) Notwithstanding Subdivision (7) of Subsection (a) of
2-16 this section, the board may by rule change the definition of
2-17 "veteran" as necessary or appropriate to protect the best interests
2-18 of the program <in response to changes in the laws of the United
2-19 States as they may affect the program>.
2-20 SECTION 1.02. Section 161.061, Natural Resources Code, is
2-21 amended to read as follows:
2-22 Sec. 161.061. GENERAL DUTIES OF BOARD. The board shall:
2-23 (1) authorize and execute negotiable bonds as provided
2-24 by law;
2-25 (2) provide by resolution for use of the fund in a
2-26 manner that will effectuate the intent of the constitution and the
2-27 law;
2-28 (3) prescribe <fix> the interest rates as provided by
2-29 law;
2-30 (4) provide for the forfeiture of contracts of sale
2-31 and purchase and resale of forfeited land;
2-32 (5) conduct investigations it considers necessary; and
2-33 (6) formulate policies and rules necessary and not in
2-34 conflict with the law to ensure the proper administration and to
2-35 carry out the intent and purposes of the law.
2-36 SECTION 1.03. Subchapter C, Chapter 161, Natural Resources
2-37 Code, is amended by adding Section 161.074 to read as follows:
2-38 Sec. 161.074. BOND ENHANCEMENT AGREEMENTS. The board may at
2-39 any time and from time to time enter into one or more bond
2-40 enhancement agreements that the board determines to be necessary or
2-41 appropriate to place the obligation of the board, as represented by
2-42 the bonds, in whole or in part, on the interest rate, currency,
2-43 cash flow, or other basis desired by the board. Bond enhancement
2-44 agreements may include, on terms and conditions approved by the
2-45 board, interest rate swap agreements, currency swap agreements,
2-46 forward payment conversion agreements, agreements providing for
2-47 payments based on levels of or changes in interest rates or
2-48 currency exchange rates, agreements to exchange cash flows or a
2-49 series of payments, or agreements, including options, puts, or
2-50 calls, to hedge payment, currency, rate, spread, or other exposure.
2-51 A bond enhancement agreement is an agreement for professional
2-52 services and shall contain the terms and conditions and be for the
2-53 period that the board approves. The fees and expenses of the board
2-54 in connection with the issuance of bonds and the purchase and sale
2-55 of land may be paid from money in the fund, provided that payments
2-56 due from the board under a bond enhancement agreement, other than
2-57 fees and expenses, that relate to the payment of debt service on
2-58 bonds constitute payments of principal of and interest on the
2-59 bonds.
2-60 SECTION 1.04. The heading of Subchapter D, Chapter 161,
2-61 Natural Resources Code, is amended to read as follows:
2-62 SUBCHAPTER D. GENERAL OBLIGATION BONDS
2-63 SECTION 1.05. Section 161.113, Natural Resources Code, is
2-64 amended to read as follows:
2-65 Sec. 161.113. INTEREST RATE. <(a)> The bonds shall bear
2-66 the rate or rates of interest prescribed by the board.
2-67 <(b) The weighted average annual interest rate of the bonds,
2-68 as that phrase is commonly and ordinarily used and understood in
2-69 the municipal bond market, may not be more than six percent in each
2-70 installment.>
3-1 SECTION 1.06. Section 161.114, Natural Resources Code, is
3-2 amended to read as follows:
3-3 Sec. 161.114. PAYMENT AND MATURITY OF BONDS. (a) The bonds
3-4 shall be payable as provided by the board and shall mature serially
3-5 or otherwise not later than 40 years from their date.
3-6 (b) Bonds previously issued shall mature according to their
3-7 provisions.
3-8 (c) The board shall determine the medium of payment for both
3-9 principal of and interest on the bonds.
3-10 (d) The board at its own option may make the bonds
3-11 redeemable or subject to tender for purchase before maturity at the
3-12 price and under the terms and conditions fixed by the board in the
3-13 resolution providing for the issuance and sale of the bonds.
3-14 SECTION 1.07. Section 161.116, Natural Resources Code, is
3-15 amended to read as follows:
3-16 Sec. 161.116. MANNER OF EXECUTION. (a) The bonds shall be
3-17 executed by and on behalf of the board and the state as obligations
3-18 of the state in the manner provided in Subsection (b) of this
3-19 section.
3-20 (b) The bonds shall be signed by the chairman and the
3-21 executive secretary of the board and the seal of the board shall be
3-22 impressed on the bonds. In addition, the bonds shall be signed by
3-23 the governor and attested by the Secretary of State with the seal
3-24 of the state impressed on the bonds.
3-25 SECTION 1.08. Section 161.118, Natural Resources Code, is
3-26 amended to read as follows:
3-27 Sec. 161.118. APPROVAL BY ATTORNEY GENERAL. Before bonds
3-28 are delivered to the purchasers, the record relating to the bonds
3-29 shall be examined by the attorney general. If the record
3-30 demonstrates that the bonds have been issued in accordance with the
3-31 constitution and this subchapter, the <and the record and> bonds
3-32 shall be approved by the attorney general.
3-33 SECTION 1.09. Section 161.119, Natural Resources Code, is
3-34 amended to read as follows:
3-35 Sec. 161.119. REGISTRATION WITH COMPTROLLER. After the
3-36 bonds are approved by the attorney general, they shall be
3-37 registered in the office of the <state> comptroller.
3-38 SECTION 1.10. Section 161.123, Natural Resources Code, is
3-39 amended to read as follows:
3-40 Sec. 161.123. NOTICE FOR BIDS ON BONDS. <(a)> If the board
3-41 authorizes the issuance of a series of bonds and decides to call
3-42 for bids, it shall publish an appropriate notice at least one time
3-43 not less than 10 days before the date of the sale in a <daily
3-44 newspaper of general statewide circulation that is published not
3-45 less than seven times a week.>
3-46 <(b) The notice shall be published for the number of times
3-47 the board determines in one or more popularly> recognized financial
3-48 journal <journals> of general circulation.
3-49 SECTION 1.11. Section 161.124, Natural Resources Code, is
3-50 amended to read as follows:
3-51 Sec. 161.124. SECURITY FOR BID. The <At its option, the>
3-52 board may require bidders<, other than administrators of state
3-53 funds listed in Section 161.122 of this code,> to accompany their
3-54 bids with exchange or bank cashier's checks in an amount considered
3-55 adequate by the board to be a forfeit guaranteeing the acceptance
3-56 and payment for bonds covered by the bids and accepted by the
3-57 board.
3-58 SECTION 1.12. Section 161.125, Natural Resources Code, is
3-59 amended to read as follows:
3-60 Sec. 161.125. SALE OF BONDS. Bonds may be sold at public or
3-61 private sale at a price or prices and on terms determined by the
3-62 board <(a) No bonds may be sold for less than their face value with
3-63 accrued interest from their date and shall be sold after
3-64 competitive bidding to the highest and best bidder.>
3-65 <(b) The provisions of Subsection (a) of this section do not
3-66 apply to administrators of the state funds that are given a
3-67 priority if they exercise the right of priority to take the bonds
3-68 at the highest price bid by another within 15 days after notice is
3-69 given.>
3-70 <(c) If two or more administrators of state funds desire to
4-1 exercise their right of priority to purchase the bonds, the board
4-2 shall prorate the bonds to the administrators who desire to make
4-3 the purchase>.
4-4 SECTION 1.13. Section 161.128, Natural Resources Code, is
4-5 amended to read as follows:
4-6 Sec. 161.128. BONDS AS INVESTMENTS AND SECURITY. (a) Bonds
4-7 issued under <Article III, Section 49-b of the Texas Constitution,
4-8 and> this chapter are legal and authorized investments for banks,
4-9 savings banks, trust companies, building and loan associations,
4-10 insurance companies, fiduciaries, trustees, guardians, and for the
4-11 sinking funds of cities, towns, villages, counties, school
4-12 districts, and other political subdivisions and public agencies of
4-13 the state.
4-14 (b) The bonds<, if accompanied by unmatured coupons
4-15 appurtenant to them,> are legal and sufficient security for the
4-16 deposits in the amount of the par value of the bonds.
4-17 SECTION 1.14. Section 161.129, Natural Resources Code, is
4-18 amended to read as follows:
4-19 Sec. 161.129. TAXATION OF BONDS. Bonds <issued under
4-20 Article III, Section 49-b of the Texas Constitution, and laws
4-21 implementing that section of the constitution,> are exempt from any
4-22 tax by the state and by cities, towns, villages, counties, school
4-23 districts, and other political subdivisions and public agencies of
4-24 the state.
4-25 SECTION 1.15. Subchapter D, Chapter 161, Natural Resources
4-26 Code, is amended by adding Sections 161.130, 161.131, and 161.132
4-27 to read as follows:
4-28 Sec. 161.130. CONSTITUTIONAL APPROPRIATIONS. (a) If during
4-29 the existence of the fund or during the time general obligation
4-30 bonds are payable from the fund the board determines that there
4-31 will not be sufficient money in the fund during the following
4-32 biennium available to pay principal of or interest on the bonds
4-33 that are to come due and to be paid from the fund during that
4-34 biennium, the comptroller shall transfer to the fund the first
4-35 money coming into the State Treasury not otherwise appropriated by
4-36 the constitution in amounts sufficient to pay the obligations.
4-37 (b) The money appropriated shall be used to pay the
4-38 obligations only if at the time the principal or interest actually
4-39 become due there is not sufficient money in the fund available to
4-40 pay the amount due.
4-41 Sec. 161.131. MINORITY-OWNED BUSINESSES. (a) The board
4-42 shall make a good faith effort to award to minority-owned
4-43 businesses:
4-44 (1) contracts relating to the issuance of bonds by the
4-45 board under this chapter in the amount of at least 20 percent of
4-46 the total costs of issuing those bonds; and
4-47 (2) contracts for the items to be financed by bonds
4-48 issued by the board in the amount of at least 20 percent of the
4-49 proceeds of those bonds.
4-50 (b) Not later than October 31 of each year, the board shall
4-51 file with the governor and each house of the legislature a written
4-52 report containing the following information for the previous year
4-53 for all businesses and for minority-owned businesses classified by
4-54 minority group:
4-55 (1) the total number of contracts relating to the
4-56 issuance of bonds by the board under this chapter and to the items
4-57 to be financed by those bonds;
4-58 (2) the total dollar amount the board must pay under
4-59 each contract described by Subdivision (1) of this subsection; and
4-60 (3) the total number of businesses submitting bids or
4-61 proposals relating to the issuance of bonds by the board under this
4-62 chapter and to the items to be financed by those bonds.
4-63 (c) In this section:
4-64 (1) "Minority-owned business" means a business entity
4-65 at least 51 percent of which is owned by members of a minority
4-66 group or, in the case of a corporation, at least 51 percent of the
4-67 shares of which are owned by members of a minority group, and that
4-68 is managed and controlled by members of a minority group in its
4-69 daily operations.
4-70 (2) "Minority group" includes:
5-1 (A) African Americans;
5-2 (B) American Indians;
5-3 (C) Asian Americans; and
5-4 (D) Mexican Americans and other Americans of
5-5 Hispanic origin.
5-6 Sec. 161.132. WOMEN-OWNED BUSINESSES. (a) The board shall
5-7 make a good faith effort to award to women-owned businesses:
5-8 (1) contracts relating to the issuance of bonds by the
5-9 board under this chapter in the amount of at least 10 percent of
5-10 the total costs of issuing those bonds; and
5-11 (2) contracts for the items to be financed by bonds
5-12 issued by the board in the amount of at least 10 percent of the
5-13 proceeds of those bonds.
5-14 (b) Not later than October 31 of each year, the board shall
5-15 file with the governor and each house of the legislature a written
5-16 report containing the following information for the previous year
5-17 for all businesses and for women-owned businesses classified by
5-18 minority group:
5-19 (1) the total number of contracts relating to the
5-20 issuance of bonds by the board under this chapter and to the items
5-21 to be financed by those bonds;
5-22 (2) the total dollar amount the board must pay under
5-23 each contract described by Subdivision (1) of this subsection; and
5-24 (3) the total number of businesses submitting bids or
5-25 proposals relating to the issuance of bonds by the board under this
5-26 chapter and to the items to be financed by those bonds.
5-27 (c) In this section:
5-28 (1) "Women-owned business" means a business entity at
5-29 least 51 percent of which is owned by women or, in the case of a
5-30 corporation, at least 51 percent of the shares of which are owned
5-31 by women, and that is managed and controlled by women in its daily
5-32 operations.
5-33 (2) "Minority group" includes:
5-34 (A) African Americans;
5-35 (B) American Indians;
5-36 (C) Asian Americans; and
5-37 (D) Mexican Americans and other Americans of
5-38 Hispanic origin.
5-39 SECTION 1.16. The heading of Subchapter E, Chapter 161,
5-40 Natural Resources Code, is amended to read as follows:
5-41 SUBCHAPTER E. VETERANS' <VETERANS> LAND FUND
5-42 SECTION 1.17. Section 161.171, Natural Resources Code, is
5-43 amended to read as follows:
5-44 Sec. 161.171. MONEY AND LAND INCLUDED IN <VETERANS LAND>
5-45 FUND. (a) The veterans' <veterans> land fund shall include:
5-46 (1) land purchased by the board from money in the fund
5-47 <until the sale price, interest, and penalties due have been
5-48 received by the board>;
5-49 (2) money attributable to general obligation bonds
5-50 issued and sold by the board, including proceeds from the issuance
5-51 and sale of the bonds;
5-52 (3) money received from the sale or resale of land or
5-53 rights in land purchased with the proceeds from the general
5-54 obligation bonds;
5-55 (4) money received from the sale or resale of land or
5-56 rights in land purchased with other money attributable to the
5-57 general obligation bonds;
5-58 (5) proceeds derived from the sale or other
5-59 disposition of the board's interest in contracts for the sale of
5-60 land or rights in land;
5-61 (6) interest and penalties received from the sale or
5-62 resale of the land or rights in the land;
5-63 (7) <(6)> bonuses, income, rents, royalties, and any
5-64 other pecuniary benefit received by the board from the land;
5-65 (8) <(7)> money received as indemnity or forfeiture
5-66 for the failure of any bidder for purchase of general obligation
5-67 bonds to comply with the person's <his> bid and accept and pay for
5-68 the bonds or for the failure of a bidder for purchase of land
5-69 comprising a part of the fund to comply with the person's <his> bid
5-70 and accept and pay for the land and amounts received by the board
6-1 under bond enhancement agreements with respect to the bonds; and
6-2 (9) <(8)> interest received from investments of this
6-3 money.
6-4 (b) Money in the fund shall be deposited in the State
6-5 Treasury to the credit of the fund.
6-6 <(c) The provisions of this section may not be construed to
6-7 prevent the board from accepting for a portion of a tract of land.>
6-8 SECTION 1.18. Section 161.173, Natural Resources Code, is
6-9 amended to read as follows:
6-10 Sec. 161.173. INVESTMENT OF MONEY IN FUND <PAYMENT OF
6-11 PRINCIPAL AND INTEREST; INVESTMENTS>. (a) <The principal of and
6-12 interest on bonds issued by the board shall be paid from money in
6-13 the fund as provided in the constitutional provision authorizing
6-14 the bonds.>
6-15 <(b)> Except as limited by Subsection (b) <(c)> of this
6-16 section, money in the fund that is not immediately committed to
6-17 paying principal of and interest on the bonds, to the purchase of
6-18 land, or to the payment of expenses as provided in this chapter may
6-19 be invested in:
6-20 (1) direct security repurchase agreements and reverse
6-21 security repurchase agreements made with state or national banks
6-22 domiciled in this state or with primary dealers as approved by the
6-23 Federal Reserve System;
6-24 (2) direct obligations of or obligations the principal
6-25 and interest of which are guaranteed by the United States;
6-26 (3) direct obligations of or obligations guaranteed by
6-27 the Federal Home Loan Banks, the Federal National Mortgage
6-28 Association, the Federal Farm Credit System, the Student Loan
6-29 Marketing Association, the Federal Home Loan Mortgage Corporation,
6-30 or a successor organization to one of those organizations;
6-31 (4) bankers' acceptances that:
6-32 (A) are eligible for purchase by members of the
6-33 Federal Reserve System;
6-34 (B) do not exceed 270 days to maturity; and
6-35 (C) are issued by a bank that has received the
6-36 highest short-term credit rating by a nationally recognized
6-37 investment rating firm;
6-38 (5) commercial paper that:
6-39 (A) does not exceed 270 days to maturity; and
6-40 (B) has received the highest short-term credit
6-41 rating by a nationally recognized investment rating firm;
6-42 (6) contracts written by the board in which the board
6-43 grants the purchaser the right to purchase securities in the
6-44 board's marketable securities portfolio at a specified price over a
6-45 specified period and for which the board is paid a fee and
6-46 specifically prohibits naked-option or uncovered option trading;
6-47 (7) obligations of a state or an agency, county, city,
6-48 or other political subdivision of a state and mutual funds composed
6-49 of these obligations;
6-50 (8) an investment instrument, obligation, or other
6-51 evidence of indebtedness the payment of which is directly or
6-52 indirectly guaranteed by the full faith and credit of the United
6-53 States;
6-54 (9) an investment, account, depository receipt, or
6-55 deposit that is fully:
6-56 (A) insured by the Federal Deposit Insurance
6-57 Corporation, the Federal Savings and Loan Insurance Corporation, or
6-58 a successor organization to one of those organizations; or
6-59 (B) secured by securities described by
6-60 Subdivision (2), (3), or (8) of this subsection;
6-61 (10) a collateralized mortgage obligation fully
6-62 secured by securities or mortgages issued or guaranteed by the
6-63 Government National Mortgage Association (GNMA) or any entity
6-64 described by Subdivision (3) of this subsection;
6-65 (11) a security or evidence of indebtedness issued by
6-66 the Farm Credit System Financial Assistance Corporation, the
6-67 Private Export Funding Corporation, or the Export-Import Bank; and
6-68 (12) any other investment authorized for investment of
6-69 state funds by the treasurer under Section 404.024, Government
6-70 Code.
7-1 (b) <(c)> The board may not invest in or purchase
7-2 obligations of a private corporation or other private business
7-3 entity doing business in the Republic of South Africa unless the
7-4 corporation or other entity:
7-5 (1) has:
7-6 (A) adopted the Statement of Principles for
7-7 South Africa as they existed in 1987, as described in the Report on
7-8 the Signatory Companies to the Statement of Principles for South
7-9 Africa published by Arthur D. Little, Inc., Cambridge,
7-10 Massachusetts, and has obtained a performance rating in Category 1
7-11 or 2 of the Statement of Principles for South Africa rating system
7-12 as determined by Arthur D. Little, Inc.; or
7-13 (B) agreed to the Code of Conduct that is
7-14 enforced by the United States Department of State under Section
7-15 208, Comprehensive Anti-Apartheid Act of 1986 (Pub. L. No. 99-440)
7-16 and has received a rating of "Making Satisfactory Progress"; and
7-17 (2) does not supply strategic products or services for
7-18 use by the government, military, or police of the Republic of South
7-19 Africa.
7-20 (c) <(d)> In this section:
7-21 (1) "Direct security repurchase agreement" means an
7-22 agreement under which the board buys, holds for a specified time,
7-23 and then sells back any of the following securities, obligations,
7-24 or participation certificates:
7-25 (A) United States government securities;
7-26 (B) direct obligations of or obligations the
7-27 principal and interest of which are guaranteed by the United
7-28 States;
7-29 (C) direct obligations of or obligations
7-30 guaranteed by the Federal Home Loan Banks, the Federal National
7-31 Mortgage Association, the Federal Farm Credit System, the Student
7-32 Loan Marketing Association, the Federal Home Loan Mortgage
7-33 Corporation, or a successor organization to one of those
7-34 organizations; or
7-35 (D) any other investment instrument, obligation,
7-36 or other evidence of indebtedness the payment of which is directly
7-37 or indirectly guaranteed by the full faith and credit of the United
7-38 States.
7-39 (2) "Doing business in the Republic of South Africa"
7-40 means conducting or performing manufacturing, assembly, or
7-41 warehousing operations within the Republic of South Africa and for
7-42 a bank or other financial institution, lending money to the
7-43 government of the Republic of South Africa or any of its agencies
7-44 or instrumentalities.
7-45 (3) "Market value" means the fair and reasonable
7-46 prevailing price at which a security is being sold on the open
7-47 market at the time of the appraisement of the security by the
7-48 board.
7-49 (4) "Reverse security repurchase agreement" means an
7-50 agreement under which the board sells and after a specified time
7-51 buys back any of the securities, obligations, or participation
7-52 certificates listed in Paragraphs (A) through (D) of Subdivision
7-53 (1) of this subsection.
7-54 (5) "Strategic products or services" means articles
7-55 designated as arms, ammunition, or implements of war as provided by
7-56 22 Code of Federal Regulations Part 121 or data processing
7-57 equipment or computers sold for military or police use or for use
7-58 in connection with restriction on travel within the Republic of
7-59 South Africa by residents of that country.
7-60 SECTION 1.19. Section 161.174, Natural Resources Code, is
7-61 amended to read as follows:
7-62 Sec. 161.174. USE OF FUND TO PAY PRINCIPAL AND INTEREST
7-63 <DIVISIONS; USE OF MONEY IN DIVISIONS TO PAY FOR VARIOUS BOND
7-64 ISSUES>. The principal of and interest on bonds issued by the
7-65 board shall be paid from money in the fund as provided by the
7-66 constitutional provision authorizing the bonds <(a) A division
7-67 consists of money attributable to bonds issued and sold under a
7-68 single constitutional authorization and land purchased with money
7-69 from that issue.>
7-70 <(b) If a division of the fund contains sufficient money to
8-1 retire bonds secured by the division, the money attributable to
8-2 that division, except that portion necessary to retire bonds in
8-3 that division, may be used at the discretion and direction of the
8-4 board to pay principal of and interest on and authorized expenses
8-5 for other bonds issued and sold by the board. However, the amount
8-6 of money necessary to retire bonds in the division shall be set
8-7 aside and shall remain a part of that division for the purpose of
8-8 retiring those bonds.>
8-9 <(c) No use of money as provided in Subsection (b) of this
8-10 section may be made contrary to the rights of a holder of bonds
8-11 issued and sold by the board or violative of a contract to which
8-12 the board is a party>.
8-13 SECTION 1.20. Section 161.175, Natural Resources Code, is
8-14 amended to read as follows:
8-15 Sec. 161.175. USE OF FUND TO PAY <FOR> EXPENSES RELATED TO
8-16 THE LAND. (a) The board may use money in the fund attributable to
8-17 bonds that have been issued and sold to pay:
8-18 (1) expenses of surveying and monumenting the land and
8-19 the tracts of land;
8-20 (2) the cost of constructing roads on the land or the
8-21 tracts of land;
8-22 (3) legal fees, recordation fees, and advertising
8-23 costs arising from the purchase and sale or resale of the land and
8-24 the tracts of land; and
8-25 (4) other similar costs necessary or incidental to the
8-26 purchase and sale of land acquired by the board.
8-27 (b) These expenses shall be added to the price of the land
8-28 when sold or resold by the board.
8-29 (c) The board may award a contract in an amount not to
8-30 exceed $10,000 to purchase supplies, materials, services, and
8-31 equipment for use by the board in connection with improvements to,
8-32 repairs to, or maintenance of land and with roadways and
8-33 improvements located on land that are undertaken by the board under
8-34 this chapter to make the land more marketable or useable without
8-35 the necessity of soliciting or obtaining competitive bids. The
8-36 board may not award a contract under this subsection in an amount
8-37 that exceeds $10,000 without soliciting or obtaining competitive
8-38 bids <No money in the fund before November 11, 1967, may be used
8-39 to pay the expenses listed in Subsection (a) of this section
8-40 until there is sufficient money in the division to retire all bonds
8-41 secured by the division, at which time, all money except that
8-42 needed to retire the bonds secured by the division, which shall be
8-43 retained in the division to retire the bonds, may be used to pay
8-44 the expenses as fully as the money attributable to bonds>.
8-45 SECTION 1.21. Section 161.176, Natural Resources Code, is
8-46 amended to read as follows:
8-47 Sec. 161.176. USE OF FUND TO PAY BOND EXPENSES. <(a)> The
8-48 board may use money in the fund attributable to bonds issued and
8-49 sold to pay:
8-50 (1) legal fees and fees for financial advice necessary
8-51 in the opinion of the board to the sale of bonds;
8-52 (2) the expense of publishing notice of sale of an
8-53 installment of bonds;
8-54 (3) the expense of printing the bonds;
8-55 (4) the expenses of issuance of the bonds, including
8-56 the actual costs of travel, lodging, and meals of board members,
8-57 officers or employees of the board, the <state> comptroller, the
8-58 State Treasurer, and the attorney general that are necessary in the
8-59 opinion of the board to effectuate the issuance, rating, and
8-60 delivery of the bonds;
8-61 (5) the cost of manually signing the bonds;
8-62 (6) remuneration to any agent employed by the board to
8-63 pay the principal of and interest on the bonds;
8-64 (7) any amounts required to be paid to maintain the
8-65 federal tax exemption of interest on the bonds; and
8-66 (8) all other costs, fees, and expenses relating to
8-67 the issuance of the bonds.
8-68 <(b) No money in a division of the fund created before
8-69 November 11, 1967, may be used to pay the expenses listed in
8-70 Subsection (a) of this section until there is sufficient money
9-1 for the division to retire all bonds secured by the division, at
9-2 which time all money, except that which may be needed to retire the
9-3 bonds, may be used to pay the expenses under Subsection (a) of
9-4 this section as fully as money attributable to bonds issued and
9-5 sold in the future. The money in the division needed to retire the
9-6 bonds shall remain in the division.>
9-7 SECTION 1.22. Section 161.179, Natural Resources Code, is
9-8 amended to read as follows:
9-9 Sec. 161.179. SALE OF LAND AND LAND CONTRACTS.
9-10 Notwithstanding any other provision of this chapter, the board may
9-11 sell at public or private sale, with or without public bidding, any
9-12 or all of the land contracts and related land. Proceeds from the
9-13 sale shall be deposited in the fund or account from which the
9-14 contracts or related land were sold and otherwise applied in the
9-15 manner set forth in this chapter, except that at the direction of
9-16 the board the sale proceeds may be used by the board, together with
9-17 other available money, to discharge, pay, or redeem, in whole or in
9-18 part, outstanding bonds issued by the board <LEGISLATIVE
9-19 APPROPRIATIONS. To the extent not otherwise appropriated by the
9-20 constitution:>
9-21 <(a) During the existence of the fund, if the board
9-22 determines that there will not be sufficient money in the fund
9-23 during the following biennium to pay principal of or interest on
9-24 the bonds or both principal and interest that are to come due
9-25 during the following biennium, the legislature shall appropriate
9-26 from the General Revenue Fund sufficient money to pay the
9-27 obligations.>
9-28 <(b) The money appropriated shall be used to pay the
9-29 obligations only if at the time the principal or interest or both
9-30 actually become due there is not sufficient money in the fund to
9-31 pay the amount due>.
9-32 SECTION 1.23. Subchapter E, Chapter 161, Natural Resources
9-33 Code, is amended by adding Section 161.180 to read as follows:
9-34 Sec. 161.180. TEMPORARY TRANSFERS. Amounts temporarily
9-35 transferred from the fund to the veterans' housing assistance fund
9-36 or the veterans' housing assistance fund II under the Texas
9-37 Constitution shall be returned to the fund as soon as practicable.
9-38 Investment earnings allocated by the board to the transferred
9-39 amounts shall be credited to the fund as if the transfer had not
9-40 been made.
9-41 SECTION 1.24. Section 161.216, Natural Resources Code, is
9-42 amended to read as follows:
9-43 Sec. 161.216. COST OF LAND SOLD BY <TO> BOARD. Except for
9-44 forfeited land that may be resold by <to> the board at less than
9-45 actual cost under Section 161.319 of this code, land shall not be
9-46 sold by <to> the board at less than its actual cost.
9-47 SECTION 1.25. Subsections (a) and (b), Section 161.222,
9-48 Natural Resources Code, are amended to read as follows:
9-49 (a) The purchaser shall make an initial payment in an amount
9-50 set by the board's rules for land sold under this chapter. <In no
9-51 event shall the payment be more than $1,000 together with an
9-52 additional down payment as provided in Sections 161.175 and 161.231
9-53 through 161.234 of this code or Subchapter G of this chapter.>
9-54 (b) The balance of the selling price shall be amortized over
9-55 a period determined by the board not to exceed 40 years together
9-56 with interest at a fixed, variable, floating, or other rate or
9-57 rates <to be> determined by the board.
9-58 SECTION 1.26. Section 161.319, Natural Resources Code, is
9-59 amended to read as follows:
9-60 Sec. 161.319. RESALE OF FORFEITED LAND. (a) Resale of
9-61 forfeited land under this chapter may be made to the highest
9-62 bidder<, but the sale shall be made only to a qualified purchaser
9-63 under Article III, Section 49-b of the Texas Constitution, and>
9-64 under terms and conditions and at the time and in the manner
9-65 prescribed by the board in its rules, the provisions of this
9-66 chapter notwithstanding.
9-67 (b) The board may reject any and all bids.
9-68 (c) If the successful bidder refuses to execute a contract
9-69 of sale and purchase, the money submitted with the person's <his>
9-70 bid is forfeited and shall be deposited in the State Treasury and
10-1 credited to the fund.
10-2 ARTICLE 2
10-3 SECTION 2.01. Section 162.001, Natural Resources Code, is
10-4 amended to read as follows:
10-5 Sec. 162.001. DEFINITIONS. (a) In this chapter:
10-6 (1) "Board" means the Veterans' Land Board.
10-7 (2) "Fund" means the veterans' housing assistance
10-8 fund.
10-9 (3) "Home" means a dwelling within this state in which
10-10 a veteran intends to reside as the veteran's <his> principal
10-11 residence.
10-12 (4) "Lending institution" means a bank, trust company,
10-13 savings bank, national banking association, savings and loan
10-14 association, building and loan association, mortgage banker,
10-15 mortgage company, credit union, life insurance company, or other
10-16 financial institution that customarily provides service or aids in
10-17 the financing of mortgages on single-family residential housing
10-18 which has been approved for participation in the program by the
10-19 board. The term includes a holding company for any of the
10-20 foregoing.
10-21 (5) "Loan" means a veterans' housing assistance loan
10-22 made or acquired by the board under this chapter secured by a
10-23 mortgage on a veteran's home.
10-24 (6) "Program" means the Veterans' Housing Assistance
10-25 Program.
10-26 (7) "Commission" means the Texas Veterans Commission.
10-27 (8) "Veteran" means a person who:
10-28 (A)(i) served not less than 90 continuous days,
10-29 unless sooner discharged by reason of a service-connected
10-30 disability, on active duty in the Army, Navy, Air Force, Coast
10-31 Guard, United States Public Health Service (as constituted under 42
10-32 U.S.C. Section 201 et seq.), or Marine Corps of the United States
10-33 after September 16, 1940, and who on the date of filing a <his>
10-34 loan application has not been dishonorably discharged from the
10-35 branch of the service in which the person <he> served;
10-36 (ii) has at least 20 years of active or
10-37 reserve military service as computed when determining the person's
10-38 eligibility to receive retired pay under applicable federal law; or
10-39 (iii) has enlisted or received an
10-40 appointment in the Texas National Guard, who has completed all
10-41 initial active duty training required as a condition of the
10-42 enlistment or appointment, and who on the date of filing the
10-43 person's loan application has not been dishonorably discharged from
10-44 the Texas National Guard;
10-45 (B) at the time of the person's <his>
10-46 enlistment, induction, commissioning, appointment, or drafting was
10-47 a bona fide resident of this state or has resided in this state at
10-48 least five years immediately before the date of filing an <his>
10-49 application for a loan; and
10-50 (C) at the time of the person's <his>
10-51 application for a loan under this chapter is <a citizen of the
10-52 United States and> a bona fide resident of this state. The term
10-53 includes the unmarried surviving spouse of a veteran who died or
10-54 who is identified as missing in action <in the line of duty> if the
10-55 deceased or missing veteran meets the requirements in this section,
10-56 with the exception that the deceased or missing veteran need not
10-57 have served 90 continuous days under Paragraph (A)(i) of this
10-58 subdivision, and if the deceased or missing veteran was a bona fide
10-59 resident of the state at time of enlistment, induction,
10-60 commissioning, appointment, or drafting.
10-61 (b) Notwithstanding Subdivision (8) of Subsection (a) of
10-62 this section, the board may by rule change the definition of
10-63 "veteran" as necessary or appropriate to protect the best interests
10-64 of the program <in response to changes in the laws of the United
10-65 States as they may affect the program>.
10-66 SECTION 2.02. Subsection (a), Section 162.001, Natural
10-67 Resources Code, is amended by adding Subdivision (9) to read as
10-68 follows:
10-69 (9) "Veterans' housing assistance fund" means the
10-70 Veterans' Housing Assistance Fund established under Article III,
11-1 Section 49-b-1, of the Texas Constitution.
11-2 SECTION 2.03. Subject to Subsection (b) of Section 6.01 of
11-3 this Act, Subdivision (9), Subsection (a), Section 162.001, Natural
11-4 Resources Code, as added by Section 2.02 of this Act, is amended to
11-5 read as follows:
11-6 (9) "Veterans' housing assistance fund" means the
11-7 Veterans' Housing Assistance Fund established under Article III,
11-8 Section 49-b-1, of the Texas Constitution or the Veterans' Housing
11-9 Assistance Fund II established under Article III, Section 49-b-2,
11-10 of the Texas Constitution. Each fund shall be separate and
11-11 distinct from the other fund and the provisions of this chapter
11-12 dealing with the fund shall relate to each fund separately and to
11-13 the separate assets, liabilities, and administration of each fund.
11-14 SECTION 2.04. Section 162.002, Natural Resources Code, is
11-15 amended to read as follows:
11-16 Sec. 162.002. MONEY AND INTERESTS INCLUDED IN THE VETERANS'
11-17 HOUSING ASSISTANCE FUND. (a) The veterans' housing assistance
11-18 fund shall include:
11-19 (1) any interest of the board in <all> home mortgage
11-20 loans made from money in the fund to veterans pursuant to this
11-21 chapter including any insurance thereon or on the homes<, until the
11-22 principal amount together with any interest and penalties due have
11-23 been received by the board>;
11-24 (2) the proceeds derived from the sale or other
11-25 disposition of the board's interest in home mortgage loans;
11-26 (3) the money attributable to any bonds issued and
11-27 sold by the board to provide money for the fund which shall include
11-28 but shall not be limited to the proceeds from the issuance and sale
11-29 of such bonds;
11-30 (4) <(3)> income, rents, and any other pecuniary
11-31 benefit received by the board as a result of making these loans;
11-32 (5) <(4)> sums received by way of indemnity or
11-33 forfeiture for the failure of any bidder for the purchase of any
11-34 such bonds to comply with the person's <his> bid and accept and pay
11-35 for such bonds and amounts received by the board under bond
11-36 enhancement agreements with respect to the bonds;
11-37 (6) <(5)> interest received from investments of any
11-38 such money; and
11-39 (7) <(6)> any equitable interest in properties
11-40 encumbered under this program and attributable to the fund.
11-41 (b) Money in the fund shall be deposited in the State
11-42 Treasury to the credit of the fund.
11-43 SECTION 2.05. Subchapter A, Chapter 162, Natural Resources
11-44 Code, is amended by adding Section 162.005 to read as follows:
11-45 Sec. 162.005. SALE OF LOANS. Notwithstanding any other
11-46 provision of this chapter, the board may sell at public or private
11-47 sale, with or without public bidding, any or all of the loans in
11-48 the fund. Proceeds from the sale shall be deposited in the fund
11-49 and otherwise applied in the manner provided by this chapter,
11-50 except that at the direction of the board the sale proceeds may be
11-51 used by the board, together with other available money, to
11-52 discharge, pay, or redeem, in whole or in part, outstanding bonds
11-53 issued by the board under this chapter.
11-54 SECTION 2.06. Subchapter A, Chapter 162, Natural Resources
11-55 Code, is amended by adding Section 162.006 to read as follows:
11-56 Sec. 162.006. TEMPORARY TRANSFERS. Amounts temporarily
11-57 transferred from either veterans' housing assistance fund to the
11-58 veterans' land fund or to the other veterans' housing assistance
11-59 fund under the Texas Constitution shall be returned to the fund as
11-60 soon as practicable. Investment earnings allocated by the board
11-61 to the transferred amounts shall be credited to the fund as if the
11-62 transfer had not been made.
11-63 SECTION 2.07. Section 162.011, Natural Resources Code, is
11-64 amended to read as follows:
11-65 Sec. 162.011. LOANS. (a) The board shall make or acquire
11-66 loans with money from the veterans' housing assistance fund in
11-67 accordance with this chapter and the rules adopted by the board.
11-68 (b) To qualify for a loan under this chapter, a person must
11-69 be a veteran at the time the person <he> applies for the loan. If
11-70 an eligible veteran dies after filing an application, the surviving
12-1 spouse may complete the transaction.
12-2 (c) The <A loan under this chapter may not exceed $45,000
12-3 and the> final principal payment on any <the> loan under this
12-4 chapter shall be made not later than 40 years after the date of the
12-5 loan. The board shall determine the maximum principal amount of
12-6 loans to any veteran that may be outstanding at any time, except
12-7 that a loan under this chapter to a veteran to finance the
12-8 acquisition of a home may not exceed $45,000<, and such a loan may
12-9 not previously have been granted to the same veteran under this
12-10 chapter. The board in its discretion may waive this requirement
12-11 for circumstances the board deems appropriate, including but not
12-12 limited to veterans who financed homes with a loan under this
12-13 chapter who are forced to move due to a change in employment or
12-14 because their homes are condemned through no fault of the veteran>.
12-15 (d) The board shall obtain insurance covering at least 50
12-16 percent of all losses anticipated in connection with veteran
12-17 payment defaults on loans secured by first or second mortgages,
12-18 based upon the advice of one or more qualified consultants to the
12-19 board as to potential losses which may be reasonably expected on
12-20 the loans as determined by analysis, including but not limited to
12-21 actual experience in the residential mortgage lending industry on
12-22 similar types of mortgage loans, or, in the alternative, the board
12-23 shall obtain insurance which shall insure repayment of at least 50
12-24 percent of the outstanding principal amount of all loans in the
12-25 event of the nonpayment of the loans by the veterans.
12-26 (e) <Funds approved for disbursement under this chapter
12-27 shall be forwarded directly to a lending institution.>
12-28 <(f)> All fees to be charged to a veteran receiving a loan
12-29 under this chapter must be approved by the board. The board may
12-30 enter into contracts with lending institutions to assist in
12-31 processing, originating, servicing, or administering loans under
12-32 this chapter. Any fees and expenses incurred in connection with a
12-33 loan, including the cost of insurance, may be charged to the
12-34 veteran and made a part of the veteran's payments.
12-35 SECTION 2.08. Section 162.013, Natural Resources Code, is
12-36 amended to read as follows:
12-37 Sec. 162.013. INTEREST RATE. A loan under this chapter
12-38 shall bear a fixed, variable, floating, or other <an interest> rate
12-39 or rates of interest determined <fixed> by the board. The board
12-40 may set the interest rate or rates to provide a margin over the
12-41 rate paid by the board on its bonds issued under this chapter. The
12-42 difference between the cost of the money to the board and the
12-43 interest rate or rates charged to a veteran may be used in whole or
12-44 in part to defray the expense of administering the program. To
12-45 assure the maximum benefit of the program to the veteran, the board
12-46 shall adopt rules relative to the fees, charges, and interest rates
12-47 charged by the lending institutions on the financing of the home
12-48 with money other than from the fund and shall limit to the maximum
12-49 extent practical such fees, charges, and interest rates to those
12-50 which would be collected by the lending institution in the normal
12-51 course of its residential mortgage lending business.
12-52 SECTION 2.09. Section 162.015, Natural Resources Code, is
12-53 amended to read as follows:
12-54 Sec. 162.015. INITIAL PAYMENT OR EQUITY. The board may
12-55 require an initial payment on a loan <of not more than five percent
12-56 of the loan> or may require an investment in the home by the
12-57 veteran in an amount or amounts set by the board's rules under this
12-58 chapter <not to exceed five percent of the amount of the loan>.
12-59 SECTION 2.10. Section 162.031, Natural Resources Code, is
12-60 amended to read as follows:
12-61 Sec. 162.031. ISSUANCE AND SALE OF BONDS; DISPOSITION OF
12-62 PROCEEDS. (a) By appropriate action, the board may provide by
12-63 resolution for the issuance and sale of negotiable bonds authorized
12-64 by the constitution, and the proceeds shall be a part of the fund,
12-65 except that the proceeds of bonds issued under the authority of
12-66 Article III, Section 49-b-1, of the Texas Constitution for the
12-67 purpose of making loans to veterans shall be a part of the
12-68 veterans' housing assistance fund established by that provision,
12-69 and the proceeds of bonds issued under the authority of Article
12-70 III, Section 49-b-2, of the Texas Constitution for the purpose of
13-1 making loans to veterans shall be a part of the veterans' housing
13-2 assistance fund established by that provision.
13-3 (b) The board may use money in the fund attributable to
13-4 bonds issued to provide money for the fund to pay all costs of
13-5 issuance of the bonds, including costs, fees, and expenses of the
13-6 sort the board is authorized to pay from the veterans' <veterans>
13-7 land fund in connection with the issuance of the veterans'
13-8 <veterans> land bonds.
13-9 SECTION 2.11. Section 162.034, Natural Resources Code, is
13-10 amended to read as follows:
13-11 Sec. 162.034. PAYMENT AND MATURITY OF BONDS. (a) The bonds
13-12 shall be payable as provided by the board and shall mature serially
13-13 or otherwise not later than 40 years from the date of their
13-14 issuance.
13-15 (b) The board may make the bonds redeemable or subject to
13-16 tender for purchase before maturity at the price and under the
13-17 terms and conditions fixed by the board in the resolution providing
13-18 for the issuance and sale of the bonds.
13-19 SECTION 2.12. Subsection (b), Section 162.036, Natural
13-20 Resources Code, is amended to read as follows:
13-21 (b) The bonds shall be signed by the chairman and the
13-22 executive secretary of the board and the seal of the board shall be
13-23 impressed on the bonds. In addition, the bonds shall be signed by
13-24 the governor and attested by the secretary of state with the seal
13-25 of the state impressed on the bonds.
13-26 SECTION 2.13. Section 162.044, Natural Resources Code, is
13-27 amended to read as follows:
13-28 Sec. 162.044. SALE OF BONDS. Bonds <The bonds> may be sold
13-29 at public or private sale at a price or prices and on terms
13-30 determined by the board <after competitive bidding to the highest
13-31 and best bidder provided the bonds are sold for not less than par
13-32 value and accrued interest>.
13-33 SECTION 2.14. Section 162.047, Natural Resources Code, is
13-34 amended to read as follows:
13-35 Sec. 162.047. BONDS AS INVESTMENTS AND SECURITY. (a) Bonds
13-36 issued under <Article III, Section 49-b-1, of the Texas
13-37 Constitution and> this chapter are legal and authorized investments
13-38 for banks, savings banks, trust companies, building and loan
13-39 associations, insurance companies, fiduciaries, trustees,
13-40 guardians, and the sinking funds of cities, towns, villages,
13-41 counties, school districts, and other political subdivisions and
13-42 public agencies of the state.
13-43 (b) The bonds are legal and sufficient security for the
13-44 deposits in the amount of the par value of the bonds.
13-45 SECTION 2.15. Section 162.050, Natural Resources Code, is
13-46 amended to read as follows:
13-47 Sec. 162.050. CONSTITUTIONAL APPROPRIATIONS. (a) If,
13-48 during the existence of the fund or during the time any general
13-49 obligation bonds are payable from the fund, the board determines
13-50 that there will not be sufficient money in the fund during the
13-51 following biennium available to pay principal of or interest on the
13-52 bonds or both principal and interest that are to come due and to be
13-53 paid from the fund during the following biennium, the comptroller
13-54 <of public accounts> shall transfer to the fund the first money
13-55 coming into the State Treasury not otherwise appropriated by the
13-56 constitution in amounts sufficient to pay the obligations.
13-57 (b) The money appropriated shall be used to pay the
13-58 obligations only if at the time the principal or interest or both
13-59 actually become due there is not sufficient money in the fund
13-60 available to pay the amount due.
13-61 SECTION 2.16. Subchapter C, Chapter 162, Natural Resources
13-62 Code, is amended by adding Section 162.051 to read as follows:
13-63 Sec. 162.051. PURCHASE AND DESTRUCTION OF BONDS. (a) The
13-64 board may use money in the fund to purchase on the open market any
13-65 bonds it has issued and sold to provide money for the fund, and the
13-66 debt represented by those bonds when purchased is considered
13-67 canceled.
13-68 (b) Bonds purchased by the board under Subsection (a) of
13-69 this section shall be mutilated, burned, or otherwise destroyed by
13-70 the state treasurer, who shall certify this fact to the board under
14-1 the seal of office.
14-2 (c) Interest may not be paid on those bonds after their
14-3 purchase by the board.
14-4 SECTION 2.17. Subchapter C, Chapter 162, Natural Resources
14-5 Code, is amended by adding Section 162.052 to read as follows:
14-6 Sec. 162.052. BOND ENHANCEMENT AGREEMENTS. The board may at
14-7 any time and from time to time enter into one or more bond
14-8 enhancement agreements that the board determines to be necessary or
14-9 appropriate to place the obligation of the board, as represented by
14-10 the bonds, in whole or in part, on the interest rate, currency,
14-11 cash flow, or other basis desired by the board. Bond enhancement
14-12 agreements may include, on terms and conditions approved by the
14-13 board, interest rate swap agreements, currency swap agreements,
14-14 forward payment conversion agreements, agreements providing for
14-15 payments based on levels of or changes in interest rates or
14-16 currency exchange rates, agreements to exchange cash flows or a
14-17 series of payments, or agreements, including options, puts, or
14-18 calls, to hedge payment, currency, rate, spread, or other exposure.
14-19 A bond enhancement agreement is an agreement for professional
14-20 services and shall contain the terms and conditions and be for the
14-21 period that the board approves. The fees and expenses of the board
14-22 in connection with the issuance of bonds and the making of loans
14-23 may be paid from money in the related fund, provided that any
14-24 payments due from the board under a bond enhancement agreement,
14-25 other than fees and expenses, that relate to the payment of debt
14-26 service on bonds constitute payments of principal of and interest
14-27 on the bonds.
14-28 ARTICLE 3
14-29 SECTION 3.01. Title 7, Natural Resources Code, is amended by
14-30 adding Chapter 164 to read as follows:
14-31 CHAPTER 164. VETERANS' FINANCIAL ASSISTANCE PROGRAM
14-32 Sec. 164.001. PURPOSE AND POLICY. (a) The legislature
14-33 declares that it is the policy of the state to provide financial
14-34 assistance to veterans of the state in recognition of their service
14-35 to this state and the United States.
14-36 (b) The legislature declares that existing mechanisms for
14-37 implementing the policy stated in Subsection (a) of this section
14-38 may be enhanced by adoption of this chapter and implementation of
14-39 the financial assistance programs authorized by this chapter.
14-40 (c) The legislature finds that this chapter and the
14-41 financial assistance programs authorized by this chapter are in
14-42 furtherance of a public purpose.
14-43 Sec. 164.002. DEFINITIONS. (a) In this chapter:
14-44 (1) "Board" means the Veterans' Land Board.
14-45 (2) "Bonds" means the revenue bonds issued by the
14-46 board under this chapter.
14-47 (3) "Financial assistance" means the purchase of land,
14-48 the sale of land to veterans, and the making of home mortgage loans
14-49 to veterans, as provided for in this chapter.
14-50 (4) "Home" means a dwelling within this state in which
14-51 a veteran intends to reside as the veteran's principal residence.
14-52 (5) "Lending institution" means a bank, trust company,
14-53 savings bank, national banking association, savings and loan
14-54 association, building and loan association, mortgage banker,
14-55 mortgage company, credit union, life insurance company, or other
14-56 financial institution that customarily provides service or aids in
14-57 the financing of mortgages on single-family residential housing
14-58 that has been approved for participation by the board, including a
14-59 holding company for a lending institution.
14-60 (6) "Veteran" means a person who:
14-61 (A)(i) served not less than 90 continuous days,
14-62 unless sooner discharged by reason of a service-connected
14-63 disability, on active duty in the Army, Navy, Air Force, Coast
14-64 Guard, United States Public Health Service (as constituted under 42
14-65 U.S.C. Section 201 et seq.), or Marine Corps of the United States
14-66 after September 16, 1940, and who on the date of filing an
14-67 application for financial assistance under this chapter has not
14-68 been dishonorably discharged from the branch of the service in
14-69 which the person served;
14-70 (ii) has at least 20 years of active or
15-1 reserve military service as computed when determining the person's
15-2 eligibility to receive retired pay under applicable federal law; or
15-3 (iii) has enlisted or received an
15-4 appointment in the Texas National Guard, who has completed all
15-5 initial active duty training required as a condition of the
15-6 enlistment or appointment, and who on the date of filing the
15-7 person's application has not been dishonorably discharged from the
15-8 Texas National Guard;
15-9 (B) at the time of the person's enlistment,
15-10 induction, commissioning, appointment, or drafting was a bona fide
15-11 resident of this state or has resided in this state at least one
15-12 year immediately before the date of filing an application; and
15-13 (C) at the time of the person's application
15-14 under this chapter is a bona fide resident of this state. The term
15-15 includes the unmarried surviving spouse of a veteran who died or
15-16 who is identified as missing in action if the deceased or missing
15-17 veteran meets the requirements in this section, with the exception
15-18 that the deceased or missing veteran need not have served 90
15-19 continuous days under Paragraph (A)(i) of this subdivision, and if
15-20 the deceased or missing veteran was a bona fide resident of the
15-21 state at the time of enlistment, induction, commissioning,
15-22 appointment, or drafting.
15-23 (b) Notwithstanding Subdivision (6) of Subsection (a) of
15-24 this section, the board may by rule change the definition of
15-25 "veteran" as necessary or appropriate to protect the best interests
15-26 of the program.
15-27 Sec. 164.003. FINANCIAL ASSISTANCE PROGRAMS. The board may
15-28 establish one or more programs for providing financial assistance
15-29 to veterans under this chapter. A program may be limited to the
15-30 purpose of purchasing land, selling land to veterans, or making
15-31 home mortgage loans to veterans. To the extent a financial
15-32 assistance program is for the purpose of purchasing land or selling
15-33 land to veterans, the program shall be administered, to the extent
15-34 consistent with this chapter and otherwise deemed practicable and
15-35 desirable by the board, in accordance with the board's Veterans'
15-36 Land Program. To the extent a financial assistance program is for
15-37 the purpose of making home mortgage loans to veterans, the program
15-38 shall be administered, to the extent consistent with this chapter
15-39 and otherwise deemed practicable and desirable by the board, in
15-40 accordance with the board's Veterans' Housing Assistance Program.
15-41 Sec. 164.004. RULES. The board shall adopt rules providing
15-42 for the administration of its financial assistance programs
15-43 established under this chapter, including rules concerning:
15-44 (1) the purchasing of land and the selling of land to
15-45 veterans;
15-46 (2) the making of home mortgage loans to veterans;
15-47 (3) the use of insurance on land and homes as deemed
15-48 appropriate by the board, as further security for land sold or home
15-49 mortgage loans made;
15-50 (4) the criteria for approving lending institutions
15-51 participating in programs;
15-52 (5) the terms and conditions of a contract made with a
15-53 lending institution; and
15-54 (6) other matters as the board deems appropriate.
15-55 Sec. 164.005. RIGHTS AND POWERS OF BOARD. In connection
15-56 with the administration of its financial assistance programs under
15-57 this chapter, the board has and may exercise, to the extent not
15-58 inconsistent with this chapter, all the rights and powers granted
15-59 to it by Chapters 161 and 162 of this code relating to the
15-60 administration of the board's Veterans' Land Program and Veterans'
15-61 Housing Assistance Program.
15-62 Sec. 164.006. ISSUANCE OF BONDS. For the issuance of bonds
15-63 under this chapter, the board may exercise the authority granted to
15-64 the governing body of an issuer with regard to issuance of
15-65 obligations under Chapter 656, Acts of the 68th Legislature,
15-66 Regular Session, 1983 (Article 717q, Vernon's Texas Civil
15-67 Statutes), to the extent that it is not inconsistent with this
15-68 chapter.
15-69 Sec. 164.007. CONDITIONS FOR ISSUANCE OF BONDS. (a) Bonds
15-70 may be issued in various series and issues.
16-1 (b) Bonds shall be payable as provided by the board and may
16-2 mature serially or otherwise.
16-3 (c) Bonds shall be redeemable before maturity or subject to
16-4 tender for purchase at the price or prices and under the terms and
16-5 conditions fixed by the board in the resolution providing for the
16-6 issuance and sale of the bonds.
16-7 (d) Bonds may bear a fixed, variable, floating, or other
16-8 rate or rates of interest or may bear no interest, as determined by
16-9 the board.
16-10 (e) Bonds may be sold at public or private sale at a price
16-11 or prices and on terms determined by the board.
16-12 (f) Bonds issued under this chapter for a purpose other than
16-13 buying back or refunding general obligation bonds issued under
16-14 Article III, Section 49-b, 49-b-1, or 49-b-2, of the Texas
16-15 Constitution may not in the aggregate exceed $250 million.
16-16 Sec. 164.008. FORM OF BONDS. (a) The bonds may be issued
16-17 in the form, denominations, and manner and under the terms,
16-18 conditions, and details as provided by the board in the resolution
16-19 authorizing their existence.
16-20 (b) The bonds shall be signed and executed as provided by
16-21 the board's resolution or order authorizing the issuance of the
16-22 bonds.
16-23 Sec. 164.009. SECURITY FOR THE BONDS. (a) The bonds issued
16-24 under this chapter shall be special obligations of the board. As
16-25 security for the payment of the bonds, the board may provide for a
16-26 pledge of and lien on:
16-27 (1) receipts of all kinds of the veterans' land fund
16-28 and the veterans' housing assistance fund that are determined by
16-29 the board, on the basis of facts, circumstances, and expectations
16-30 at the time of issuance of the bonds, not to be required for the
16-31 payment of the principal of or interest on the general obligation
16-32 bonds issued under Article III, Sections 49-b and 49-b-1, of the
16-33 Texas Constitution or to make payments with respect to principal or
16-34 interest under a bond enhancement agreement with respect to the
16-35 general obligation bonds;
16-36 (2) the assets of the veterans' land fund or the
16-37 veterans' housing assistance fund determined by the board, on the
16-38 basis of facts, circumstances, and expectations at the time of
16-39 issuance of the bonds, not to be required for the purposes of the
16-40 fund;
16-41 (3) the repayments received by the board from
16-42 financial assistance provided under this chapter;
16-43 (4) other program revenues; and
16-44 (5) other lawfully available revenues of the board.
16-45 (b) The pledge and lien are to be provided for and
16-46 determined in accordance with the resolution of the board providing
16-47 for the issuance and sale of the bonds.
16-48 Sec. 164.010. BOND ENHANCEMENT AGREEMENTS. The board may at
16-49 any time and from time to time enter into one or more bond
16-50 enhancement agreements that the board deems to be necessary or
16-51 appropriate to place the obligation of the board, as represented by
16-52 the bonds, in whole or in part, on the interest rate, currency,
16-53 cash flow, or other basis desired by the board. Bond enhancement
16-54 agreements may include, on terms and conditions approved by the
16-55 board, interest rate swap agreements, currency swap agreements,
16-56 forward payment conversion agreements, agreements providing for
16-57 payments based on levels of or changes in interest rates or
16-58 currency exchange rates, agreements to exchange cash flows or a
16-59 series of payments, or agreements including options, puts, or
16-60 calls, to hedge payment, currency, rate, spread, or other exposure.
16-61 A bond enhancement agreement is an agreement for professional
16-62 services and shall contain the terms and conditions and be for the
16-63 period that the board approves. The cost to the board of the bond
16-64 enhancement agreement may be paid from the proceeds of the sale of
16-65 the bonds to which the bond enhancement agreement relates or from
16-66 any other source, including the revenues of the board that are
16-67 available for the purpose of paying the bonds or that may otherwise
16-68 be available to make those payments.
16-69 Sec. 164.011. FUNDS. (a) In the resolution authorizing the
16-70 issuance of bonds, the board may make additional covenants with
17-1 respect to the bonds and the pledged revenues and may provide for
17-2 the flow of funds and the establishment, maintenance, and
17-3 investment of funds.
17-4 (b) The funds established may include an interest and
17-5 sinking fund, a reserve fund, and other funds that will be kept and
17-6 maintained by or under the direction of the board.
17-7 (c) Funds established by the board under this chapter are
17-8 not to be part of the State Treasury but, at the direction of the
17-9 board, may be kept and held in escrow and in trust by the state
17-10 treasurer on behalf of the board and the owners of the bonds and
17-11 used only as provided by this chapter.
17-12 (d) Money in a fund shall be invested in authorized
17-13 investments as provided by a bond resolution or order of the board.
17-14 (e) Legal title to money in a fund is in the board unless or
17-15 until paid from the fund as provided by this chapter or the
17-16 resolution authorizing the issuance of the bonds.
17-17 (f) The state treasurer, as custodian of the fund, shall
17-18 administer the fund solely and strictly as provided by this chapter
17-19 and the resolution authorizing the issuance of the bonds, and the
17-20 state may not take any other action relating to the fund except
17-21 those specified in this chapter and the resolution authorizing the
17-22 issuance of the bonds.
17-23 Sec. 164.012. RESOLUTIONS. (a) The resolution authorizing
17-24 the issuance of the bonds may prohibit the further issuance of
17-25 bonds or other obligations payable from the pledged revenues or may
17-26 reserve the right to issue additional bonds to be secured by a
17-27 pledge of and payable from the revenue on a parity with or
17-28 subordinate to the lien and pledge in support of the bonds being
17-29 issued.
17-30 (b) The resolution of the board authorizing the issuance of
17-31 the bonds may include other provisions and covenants that the board
17-32 determines necessary.
17-33 (c) In a resolution authorizing the issuance of bonds, the
17-34 board may prescribe systems, methods, routines, and procedures
17-35 under which the board will function.
17-36 (d) The board may adopt and have executed any other
17-37 proceedings or instruments necessary or convenient in the issuance
17-38 of bonds.
17-39 Sec. 164.013. INVESTMENT SECURITIES. The bonds and any
17-40 interest coupons are investment securities under Chapter 8,
17-41 Business & Commerce Code, and may be issued registrable as to
17-42 principal or as to both principal and interest or may be made
17-43 redeemable before maturity at the option of the authority or may
17-44 contain a mandatory redemption provision.
17-45 Sec. 164.014. APPROVAL OF THE ATTORNEY GENERAL. Bonds
17-46 issued under this chapter are subject to review and approval by the
17-47 attorney general in the same manner and with the same effect as
17-48 provided by Chapter 656, Acts of the 68th Legislature, Regular
17-49 Session, 1983 (Article 717q, Vernon's Texas Civil Statutes).
17-50 Sec. 164.015. REFUNDING BONDS. (a) The board may issue
17-51 refunding bonds to refund all or part of its outstanding bonds
17-52 issued under this chapter, including matured but unpaid interest.
17-53 (b) The board may refund bonds in the manner provided by
17-54 general law for revenue bonds.
17-55 Sec. 164.016. BONDS AS INVESTMENTS AND SECURITY. (a) The
17-56 bonds are legal and authorized investments for banks, savings
17-57 banks, trust companies, savings and loan companies, insurance
17-58 companies, fiduciaries, trustees, guardians, the sinking funds of
17-59 cities, towns, villages, counties, school districts, and other
17-60 political subdivisions of the state, and other public funds of the
17-61 state and its agencies.
17-62 (b) The bonds are eligible to secure deposits of public
17-63 funds of the state and cities, counties, school districts, and
17-64 other political subdivisions of the state. The bonds are lawful
17-65 and sufficient security for deposits to the extent of their par
17-66 value.
17-67 Sec. 164.017. TAX EXEMPT. Since the board is performing an
17-68 essential governmental function in the exercise of the powers
17-69 conferred on it by this chapter, the bonds issued under this
17-70 chapter, and the interest and income from the bonds, including any
18-1 profit made on the sale of bonds, and all fees, charges, gifts,
18-2 grants, revenues, receipts, and other money received or pledged to
18-3 pay or secure the payment of bonds are free from taxation and
18-4 assessments of every kind by this state and any city, county,
18-5 district, authority, or other political subdivision of this state.
18-6 Sec. 164.018. NO PLEDGE OF STATE FAITH AND CREDIT; COVENANT
18-7 WITH OWNERS OF BONDS. (a) Bonds issued under this chapter are
18-8 special obligations of the board and are payable only from and
18-9 secured only by the revenues and assets pledged to secure payment
18-10 of the bonds under the Texas Constitution and this chapter, and the
18-11 bonds are not and do not create or constitute a pledge, gift, or
18-12 loan of the faith, credit, or taxing authority of the state.
18-13 (b) Each bond must include a statement that the faith or
18-14 credit and the taxing authority of the state are not pledged,
18-15 given, or loaned to secure payment of the principal of, or premium
18-16 or interest on the bonds.
18-17 (c) The state pledges to and agrees with the owners of bonds
18-18 issued under this chapter that the state will not limit or alter
18-19 the rights vested in the board to fulfill the terms of agreements
18-20 made with the owners of the bonds or in any way impair the rights
18-21 and remedies of those owners until the bonds, together with any
18-22 premium and interest, interest on any unpaid premium or
18-23 installments of interest, and all costs and expenses in connection
18-24 with any action or proceeding by or on behalf of those owners, are
18-25 fully met and discharged. The board may include this pledge and
18-26 agreement of the state in an agreement with the owners of the
18-27 bonds.
18-28 Sec. 164.019. ENFORCEMENT BY MANDAMUS. A writ of mandamus
18-29 and all other legal and equitable remedies are available to a party
18-30 in interest to require the board and any other party to carry out
18-31 agreements and to perform functions and duties under this chapter,
18-32 the Texas Constitution, or the board's bond resolutions or orders.
18-33 SECTION 3.02. Subject to Subsection (b) of Section 6.01 of
18-34 this Act, Section 164.009, Natural Resources Code, as added by
18-35 Section 3.01 of this Act, is amended to read as follows:
18-36 Sec. 164.009. SECURITY FOR THE BONDS. (a) The bonds issued
18-37 under this chapter shall be special obligations of the board. As
18-38 security for the payment of the bonds, the board may provide for a
18-39 pledge of and lien on:
18-40 (1) the receipts of all kinds of the veterans' land
18-41 fund, the veterans' housing assistance fund, and the veterans'
18-42 housing assistance fund II determined by the board, on the basis of
18-43 facts, circumstances, and expectations at the time of issuance of
18-44 the bonds, not to be required for the payment of principal of or
18-45 interest on the general obligation bonds issued under Article III,
18-46 Sections 49-b, 49-b-1, and 49-b-2, of the Texas Constitution or to
18-47 make payments with respect to principal or interest under a bond
18-48 enhancement agreement with respect to the general obligation bonds;
18-49 (2) the assets of the veterans' land fund, the
18-50 veterans' housing assistance fund, or the veterans' housing
18-51 assistance fund II determined by the board on the basis of facts,
18-52 circumstances, and expectations at the time of issuance of the
18-53 bonds not to be required for the purposes of the fund;
18-54 (3) the repayments received by the board from
18-55 financial assistance provided under this chapter;
18-56 (4) other program revenues; and
18-57 (5) other available revenues of the board.
18-58 (b) The pledge and lien are to be provided for and
18-59 determined in accordance with the resolution of the board providing
18-60 for the issuance and sale of the bonds.
18-61 ARTICLE 4
18-62 SECTION 4.01. Article 4, State Purchasing and General
18-63 Services Act (Article 601b, Vernon's Texas Civil Statutes), is
18-64 amended by adding Section 3.052 to read as follows:
18-65 Sec. 3.052. PURCHASES BY THE VETERANS' LAND BOARD. This Act
18-66 does not apply to purchases of supplies, materials, services, or
18-67 equipment for use by the Veterans' Land Board in connection with
18-68 improvements to, repairs to, or maintenance of land or other
18-69 activities undertaken by the Veterans' Land Board with respect to
18-70 land under the provisions of Section 161.175, Natural Resources
19-1 Code.
19-2 ARTICLE 5
19-3 SECTION 5.01. Sections 161.122, 161.172, and 161.211,
19-4 Natural Resources Code, are repealed.
19-5 ARTICLE 6
19-6 SECTION 6.01. (a) Except as provided by Subsection (b) of
19-7 this section, this Act takes effect immediately.
19-8 (b) Sections 1.23, 2.03, 2.06, 2.10, and 3.02 of this Act
19-9 take effect on the date on which the constitutional amendment
19-10 proposed by S.J.R. No. 34, 73rd Legislature, Regular Session, 1993,
19-11 takes effect. On the adoption of that amendment, Section 2.03 of
19-12 this Act shall supersede and replace Section 2.02 of this Act, and
19-13 Section 2.02 of this Act shall have no further effect, and Section
19-14 164.009, Natural Resources Code, as added by Section 3.02 of this
19-15 Act shall supersede and replace Section 164.009, Natural Resources
19-16 Code, as added by Section 3.01 of this Act, and Section 164.009,
19-17 Natural Resources Code, as added by Section 3.01 of this Act shall
19-18 have no further effect. If that amendment is not approved by the
19-19 voters, Sections 1.23, 2.03, 2.06, 2.10, and 3.02 of this Act have
19-20 no effect.
19-21 SECTION 6.02. The importance of this legislation and the
19-22 crowded condition of the calendars in both houses create an
19-23 emergency and an imperative public necessity that the
19-24 constitutional rule requiring bills to be read on three several
19-25 days in each house be suspended, and this rule is hereby suspended,
19-26 and that this Act take effect and be in force according to its
19-27 terms, and it is so enacted.
19-28 * * * * *
19-29 Austin,
19-30 Texas
19-31 April 15, 1993
19-32 Hon. Bob Bullock
19-33 President of the Senate
19-34 Sir:
19-35 We, your Committee on Finance to which was referred S.B. No. 819,
19-36 have had the same under consideration, and I am instructed to
19-37 report it back to the Senate with the recommendation that it do not
19-38 pass, but that the Committee Substitute adopted in lieu thereof do
19-39 pass and be printed.
19-40 Montford,
19-41 Chairman
19-42 * * * * *
19-43 WITNESSES
19-44 No witnesses appeared on S.B. No. 819.