By: Bivins S.B. No. 678
A BILL TO BE ENTITLED
AN ACT
1-1 relating to financing of alternative fuels infrastructure by the
1-2 Texas Public Finance Authority on behalf of state agencies,
1-3 political subdivisions, and other eligible entities.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. This Act may be cited as the "Alternative Fuels
1-6 Projects Funding Act".
1-7 SECTION 2. DEFINITIONS. In this Act:
1-8 (a) "Administration Costs" means the reasonable paying
1-9 agent, liquidity, standby purchaser, dealer, financial advisory,
1-10 legal, arbitrage compliance, and other costs incurred by or on
1-11 behalf of the Board (including, without limitation, costs of
1-12 enforcement of the transaction documents and attorney's fees) in
1-13 connection with the administration of the program of financing
1-14 Projects and issuance of bonds.
1-15 (b) "Alternative Fuel" means natural gas; liquified
1-16 petroleum gas; electricity; methanol or methanol/gasoline blends of
1-17 85% (M85) or greater; ethanol or ethanol/gasoline blend of 85%
1-18 (E85) or greater; or hydrogen.
1-19 (c) "Assistance" means the making of loans to an Eligible
1-20 Entity or purchasing Eligible Entity Obligations.
1-21 (d) "Bonds" includes bonds, notes, and other obligations as
1-22 defined in Article 717k-6, Vernon's Texas Civil Statutes, issued by
1-23 the Board, including, without limitation, commercial paper notes.
2-1 (e) "Board" means the board of the Texas Public Finance
2-2 Authority created by and operating under Article 601d and 601d-1,
2-3 Vernon's Texas Civil Statutes, as amended.
2-4 (f) "Conversion" means the replacement of specified
2-5 percentages of gasoline or diesel-powered fleet vehicles with
2-6 alternative fuel vehicles to achieve greater alternative fuel
2-7 vehicle composition in the fleet, or the retrofitting of a gasoline
2-8 or diesel-powered vehicle with an alternative fuel fueling system.
2-9 (g) "Council" means the Alternative Fuels Council created
2-10 and operating pursuant to Subchapter J, Chapter 113, Texas Natural
2-11 Resources Code, as amended.
2-12 (h) "County" means any county of the State.
2-13 (i) "Eligible Entity" means a State Agency, a School
2-14 District, a Mass Transit Authority, a Municipality, a County, or a
2-15 Special District.
2-16 (j) "Eligible Entity Obligations" means any obligation which
2-17 an Eligible Entity may issue which evidences the Eligible Entity's
2-18 obligation to repay any assistance provided under this Act and
2-19 includes bonds, notes, certificates of obligation, certificates of
2-20 participation, anticipation notes, contractual obligations,
2-21 warrants, and other evidences of indebtedness now or hereafter
2-22 authorized by law.
2-23 (k) "Fund" means the alternative fuels assistance fund
2-24 created by this Act, including any accounts created within it.
2-25 (l) "Mass Transit Authority" means any local mass transit
3-1 authority organized and operating pursuant to the laws of Texas,
3-2 including Articles 1118x, 1118y, and 1118z, Vernon's Texas Civil
3-3 Statutes, as amended.
3-4 (m) "Municipality" means any city, town, or village created
3-5 and operating under the laws of the State.
3-6 (n) "Project" means the Conversion of vehicles and other
3-7 sources of substantial energy output to alternative fuels; the
3-8 construction, acquisition, or maintenance of fueling stations
3-9 supplying alternative fuels or equipment enhancing the use of
3-10 engine-driven technology to support vehicles and other energy
3-11 applications that use alternative fuels; and, when approved by the
3-12 Council, other undertakings to aid in the distribution of
3-13 alternative fuels and to facilitate the use of alternative fuels.
3-14 (o) "Required Debt Service Reserve" means, as of the date of
3-15 computation, the amount or amounts required to be on deposit in the
3-16 reserve fund or an account within it as provided by resolution of
3-17 the Board. In computing the amount of the required debt service
3-18 reserve, investments held therein shall be valued in such manner as
3-19 shall be determined by resolution of the Board.
3-20 (p) "Reserve Fund" means the alternative fuels assistance
3-21 reserve fund created by this Act, including any accounts created
3-22 within it.
3-23 (q) "School District" means any school district created and
3-24 operating pursuant to the Texas Education Code.
3-25 (r) "Special District" means any hospital district or
4-1 authority, river authority, housing authority, navigation district,
4-2 water district, or any other governmental entity created and
4-3 operating pursuant to State law.
4-4 (s) "State Agency" means a board, commission, department,
4-5 office, agency, institution of higher education or other
4-6 governmental entity in the executive, judicial, or legislative
4-7 branch of the State government.
4-8 SECTION 3. FINDINGS. This Act is in furtherance of the
4-9 legislature's duty to conserve and protect the natural resources of
4-10 the state, as required by Article XVI, Section 59 of the Texas
4-11 Constitution, and provide for economic development in the state,
4-12 including development and diversification of the economy of the
4-13 state, and the development or expansion of transportation or
4-14 commerce in the state, pursuant to Article III, Section 52-a of the
4-15 Texas Constitution. The legislature finds that it is appropriate
4-16 for the Board to make loans to Eligible Entities and to purchase
4-17 Eligible Entity Obligations for the purpose of assisting Eligible
4-18 Entities in the Conversion, acquisition, construction, renovation,
4-19 repair, remodeling, retrofitting, or improvement of Projects.
4-20 SECTION 4. PURPOSE. The purpose of this Act is to create
4-21 funds to be administered by the Board and funded by proceeds from
4-22 the sale or refunding of Bonds. The funds are to be used to
4-23 provide assistance to Eligible Entities for Projects and to provide
4-24 loans and other assistance for those purposes. This Act shall be
4-25 construed liberally to effect its purpose.
5-1 SECTION 5. COUNCIL APPROVAL. The Council shall evaluate an
5-2 application for assistance under this section by an Eligible Entity
5-3 and shall determine whether the proposed Project will increase
5-4 energy or cost savings to the applicant or improve air quality.
5-5 Bonds may not be issued under this Act to finance a Project unless
5-6 the Council certifies that the proposed Project will increase
5-7 energy or cost savings to the applicant or improve air quality.
5-8 The Council may by rule adopt procedures and standards for the
5-9 evaluation of an application for assistance of a proposed Project
5-10 under this section.
5-11 SECTION 6. ALTERNATIVE FUELS ASSISTANCE FUND. (a) The
5-12 alternative fuels assistance fund is hereby created as a special
5-13 revolving fund in the state treasury. The Fund shall be
5-14 administered by the Board under this Act and rules adopted by the
5-15 Board. The Fund shall be used to provide assistance to the
5-16 Eligible Entities for Projects that have been approved by the
5-17 Council under this Act. Money in the Fund shall not be commingled
5-18 or otherwise deposited to the credit of any other fund in the state
5-19 treasury, except as provided by this Act. The creation and
5-20 dedication of the alternative fuels assistance fund is expressly
5-21 exempted and excluded from the application of Section 403.094,
5-22 Government Code.
5-23 (b) The Board shall require to be deposited to the credit of
5-24 the Fund:
5-25 (1) the proceeds of bonds, exclusive of the costs of
6-1 issuance, issued under this Act which are not required to be
6-2 deposited into the Reserve Fund;
6-3 (2) any federal funds or private funds received and
6-4 designated for the purposes of the Fund;
6-5 (3) all repayments, interest, principal, or other
6-6 amounts received in connection with assistance provided under this
6-7 Act, including Eligible Entity Obligations;
6-8 (4) any investment securities purchased by the Fund or
6-9 otherwise held for the purposes of this Act, including interest or
6-10 other earnings derived from the investment of the amounts described
6-11 in Subsections (a), (b), and (c) of this section; and
6-12 (5) any amounts transferred for deposit into the Fund.
6-13 (c) Except as otherwise provided by this Act, the Fund shall
6-14 be available only for:
6-15 (1) purchasing Eligible Entities Obligations or
6-16 otherwise making loans to Eligible Entities for expenses related to
6-17 Projects;
6-18 (2) administration costs relating to the performance
6-19 of any duties under this Act;
6-20 (3) payment of issuance costs, interest, premium, if
6-21 any, credit enhancement, and principal on bonds issued under this
6-22 Act;
6-23 (4) any costs resulting from the bonds being
6-24 outstanding, including fees and expenses for trustees, paying
6-25 agents, dealers, and remarketing agents; and
7-1 (5) any transfers to the Reserve Fund as required by
7-2 resolution of the Board.
7-3 (d) The Fund may not be used to pay the general
7-4 administrative expenses of any Eligible Entity nor to pay any part
7-5 of the salary or benefits of an official or employee of any
7-6 Eligible Entity receiving assistance under this Act.
7-7 (e) The Board may create accounts within the Fund as shall
7-8 seem advisable. Such accounts shall be kept separate from other
7-9 accounts within the Fund and shall receive such amounts as the
7-10 Board may transfer or dedicate to them. The Board, may in the
7-11 resolution authorizing the issuance of bonds, dedicate an account
7-12 or accounts within the Fund, including future amounts to be
7-13 deposited within an account, to the payment of debt service on one
7-14 or more series of bonds issued under this Act. The Board may also
7-15 pledge such an account or accounts as security for bonds issued
7-16 under this Act.
7-17 (f) Upon the payment in full or defeasance of all
7-18 outstanding bonds of the Board, the Board shall transfer to the
7-19 state's general revenue fund all amounts then on deposit in the
7-20 Fund and any future amounts to be received by the Board or the Fund
7-21 representing the payment of principal of or interest on outstanding
7-22 Eligible Entity Obligations.
7-23 SECTION 7. ALTERNATIVE FUELS ASSISTANCE RESERVE FUND.
7-24 (a) The Board may create an alternative fuels assistance reserve
7-25 fund within the state treasury and deposit in that fund the
8-1 proceeds of bonds issued pursuant to this Act, as well as any
8-2 repayments of interest or principal from assistance granted under
8-3 this Act including Eligible Entity Obligations, or other amounts
8-4 that may be transferred from the Fund, which are required to be
8-5 deposited therein by any resolution of the Board. Money in the
8-6 Reserve Fund shall be held and applied solely to the payment of the
8-7 principal or redemption price of and interest on bonds issued
8-8 pursuant to this Act as they become due and payable, either
8-9 directly or by transfer to the Fund for those purposes, when money
8-10 in the Fund is not sufficient to make such payments or to make
8-11 final payments on bonds. Except as provided in this section, no
8-12 money may be removed from the Reserve Fund or an account within the
8-13 Reserve Fund if that action would reduce the amount therein to less
8-14 than the required debt service reserve. The creation and
8-15 dedication of the alternative fuels assistance reserve fund is
8-16 expressly exempted and excluded from the application of Section
8-17 403.094, Government Code.
8-18 (b) Money in the Reserve Fund or any account within it in
8-19 excess of the required debt service reserve, whether by reason of
8-20 investment or otherwise, may at any time be withdrawn by resolution
8-21 of the Board and transferred to the Fund or to an account within
8-22 the Fund or transferred to another account within the Reserve Fund.
8-23 (c) The Board may create a separate account within the
8-24 Reserve Fund to secure or otherwise be for the benefit of each
8-25 series of bonds. Notwithstanding any other provision in this Act,
9-1 no additional bonds secured or benefitted by an account within the
9-2 Reserve Fund shall be issued unless at that time there is in the
9-3 appropriate account within the Reserve Fund the required debt
9-4 service reserve for all bonds then outstanding and secured or
9-5 benefitted by that account. The requirements of this subsection
9-6 may be satisfied by depositing so much of the proceeds of the bonds
9-7 to be issued, on their issuance, as is needed to achieve the
9-8 required debt service reserve.
9-9 (d) If an Eligible Entity fails to timely pay principal of
9-10 or interest on its Eligible Entity Obligations purchased by the
9-11 Board as required by Section 11 of this Act, the Board shall
9-12 transfer money from the Reserve Fund, or any account therein, to
9-13 the Fund in an amount equal to the deficiency of the Eligible
9-14 Entity's payment due to the Fund. Such transfer shall be made to
9-15 the extent money is available in the Reserve Fund without regard to
9-16 whether such action would reduce the amount in the Reserve Fund to
9-17 less than the required debt service reserve. An Eligible Entity
9-18 which is not a State Agency is obligated to promptly repay to the
9-19 Reserve Fund any amounts transferred therefrom as a result of its
9-20 failure to timely pay principal and interest due on its Eligible
9-21 Entity Obligations.
9-22 (e) The Board may create accounts within the Reserve Fund as
9-23 it deems advisable. Such accounts shall be kept separate from
9-24 other accounts within the Reserve Fund and shall receive such
9-25 amounts as the Board shall transfer or dedicate to them. The Board
10-1 may pledge an account or accounts within the Reserve Fund,
10-2 including future amounts to be deposited within an account, as
10-3 security for one or more series of bonds issued under this Act.
10-4 (f) Upon the payment in full or defeasance of all
10-5 outstanding bonds of the Board, the Board shall by resolution
10-6 transfer to the state's general revenue fund all amounts then on
10-7 deposit in the Reserve Fund and any future amounts to be received
10-8 by the Board or the Reserve Fund representing any repayment by an
10-9 Eligible Entity.
10-10 SECTION 8. APPROPRIATIONS. In order to provide for the
10-11 continued economic development of the state and conservation of its
10-12 natural resources, the legislature may, but is not required to,
10-13 appropriate to an Eligible Entity amounts it deems necessary for
10-14 Projects. The Eligible Entities that receive such appropriations
10-15 may contract with the Board for the use thereof.
10-16 SECTION 9. BONDS. (a) The Board may by resolution provide
10-17 for the issuance of its revenue bonds for the purposes of this Act
10-18 in an amount not to exceed $50 million outstanding at any one time.
10-19 Bonds which are or have been refunded shall not count against the
10-20 limit imposed on outstanding bonds. The Board may specify a
10-21 principal amount and a date of delivery of the proceeds of bonds
10-22 issued under this Act.
10-23 (b) Revenue bonds issued under this Act are special
10-24 obligations of the state payable only from amounts in or to be
10-25 received for deposit in the Fund or Reserve Fund or accounts
11-1 created within either as designated by the Board in the resolution
11-2 authorizing the issuance of such bonds, including principal and
11-3 interest paid and to be paid on securities or other obligations
11-4 held by the Board, or from income from accounts created within the
11-5 Fund or Reserve Fund by the Board, or from whatever sources may
11-6 hereafter be available to and designated by the Board for such
11-7 purpose. Such revenue bonds shall not constitute indebtedness of
11-8 the state prohibited by the Texas Constitution and shall contain on
11-9 their face a statement to the effect that the Board is obligated to
11-10 repay the principal thereof and the interest thereon solely from
11-11 money in or to be received for deposit in the Fund or Reserve Fund
11-12 and that neither the full faith and credit nor taxing power of the
11-13 state is pledged, given, or loaned to secure such payment.
11-14 (c) The Board may authorize the issuance of revenue bonds to
11-15 refund bonds issued under this Act.
11-16 (d) The bonds issued under this Act shall be authorized by
11-17 resolution of the Board and approved in the same manner as other
11-18 bonds issued by the Board. Bonds issued under this Act shall have
11-19 the form and bear the designations as directed by Board resolution.
11-20 (e) All bonds (except commercial paper) and all proceedings
11-21 relating to the issuance of bonds pursuant to this Act shall be
11-22 submitted to the attorney general for examination. If the attorney
11-23 general finds that the bonds have been authorized in accordance
11-24 with law, the bonds issued pursuant to this Act shall be approved,
11-25 and the bonds shall be issued by the Board and registered by the
12-1 comptroller of public accounts in a manner consistent with Chapter
12-2 53, Acts of the 70th Legislature, 2nd Called Session, 1987 (Article
12-3 717k-8, Vernon's Texas Civil Statutes). The approval by the
12-4 attorney general of commercial paper notes issued pursuant to this
12-5 Act is governed by Chapter 656, Acts of the 68th Legislature,
12-6 Regular Session, 1983 (Article 717q, Vernon's Texas Civil
12-7 Statutes). After approval and registration, the bonds and
12-8 proceedings relating thereto are incontestable in any court or
12-9 other forum for any reason and are valid and binding obligations in
12-10 accordance with their terms for all purposes.
12-11 (f) The proceeds received from the sale of bonds pursuant to
12-12 this Act may be invested in the manner and in any obligations or
12-13 securities authorized for governmental entities under Subchapter A,
12-14 Chapter 2256, Government Code. In connection with the issuance and
12-15 administration of bonds, the Board may exercise the rights and
12-16 powers granted to an issuer under Chapter 503, Acts of the 54th
12-17 Legislature, 1955 (Article 717k, Vernon's Texas Civil Statutes);
12-18 the Bond Procedures Act of 1981 (Article 717k-6, Vernon's Texas
12-19 Civil Statutes); and Chapter 656, Acts of the 68th Legislature,
12-20 Regular Session, 1983 (Article 717q, Vernon's Texas Civil
12-21 Statutes).
12-22 SECTION 10. FORM OF ASSISTANCE. (a) The Board may provide
12-23 assistance to an Eligible Entity by purchasing, at a price
12-24 determined by the Board, Eligible Entity Obligations.
12-25 (b) An Eligible Entity is authorized to borrow from the fund
13-1 by selling its Eligible Entity Obligations to the Board. To be
13-2 sold to the Board, Eligible Entity Obligations must be authorized
13-3 by the Eligible Entity in accordance with applicable law, including
13-4 approval by the voters of the Eligible Entity if voter approval is
13-5 required by law.
13-6 (c) The Board may purchase all or part of an issue of
13-7 Eligible Entity Obligations, including bonds issued to refund bonds
13-8 issued under this Act, without the Eligible Entity complying with
13-9 the requirement of any law requiring that its obligations be sold
13-10 to the highest bidder. Any Eligible Entity may request from the
13-11 Board an advisory statement as to whether the Board will consider
13-12 purchasing the Eligible Entity Obligations. Such a request shall
13-13 contain whatever information shall be reasonably required by the
13-14 Board. Notwithstanding any provision of law to the contrary, the
13-15 Board may acquire Eligible Entity Obligations in a public or
13-16 private sale with or without competitive bidding as provided by
13-17 resolution or order of the governing body of the Eligible Entity.
13-18 The resolution or order may designate an officer or employee of the
13-19 Eligible Entity to act on behalf of the Eligible Entity to set the
13-20 price, interest rate, and date for the sale of the Eligible Entity
13-21 Obligations.
13-22 (d) The Board may require by rule that Eligible Entity
13-23 Obligations to be purchased by the Board contain specified terms
13-24 and provisions.
13-25 (e) The Board may make assistance to an Eligible Entity
14-1 contingent on the entity paying for a portion of the project out of
14-2 its own funds in an amount determined by the Board.
14-3 (f) The Board shall require of an Eligible Entity that the
14-4 assistance provided to and any independent funds required of the
14-5 Eligible Entity by the Board be spent exclusively on the Project
14-6 for which the assistance was originally awarded. The Council may
14-7 by rule provide for a procedure by which an Eligible Entity may
14-8 apply to the Council for permission to use the assistance provided
14-9 and any required independent funds for a different purpose. The
14-10 Council may grant such permission if it finds that the alternative
14-11 use proposed would have qualified for at least the same amount and
14-12 type of assistance. The Council shall aid the Board in monitoring
14-13 the use of assistance under this Act.
14-14 (g) The Board may by rule set limits on the amount of
14-15 assistance which any single Eligible Entity may receive in a
14-16 specified number of years in a manner calculated to ensure that all
14-17 Eligible Entities are able to be considered for assistance.
14-18 SECTION 11. REPAYMENT AND SECURITY. (a) An Eligible Entity
14-19 shall make payments of principal and interest on Eligible Entity
14-20 Obligations purchased by the Board directly to the Board for
14-21 deposit in the fund.
14-22 (b) If the Board receives notification from an Eligible
14-23 Entity that it will not make a timely payment on an Eligible Entity
14-24 Obligation or if an Eligible Entity fails to make a timely payment
14-25 of principal or interest due on an Eligible Entity Obligation, the
15-1 Board shall notify the Council and shall notify the Eligible Entity
15-2 in writing by certified mail.
15-3 (c) In addition to other rights and remedies provided in the
15-4 documents authorizing the Eligible Entity Obligations, an Eligible
15-5 Entity may provide that any money in the state treasury held for
15-6 the benefit of the Eligible Entity may be applied by the Board to
15-7 partial or full payment of amounts due under the Eligible Entity
15-8 Obligations.
15-9 SECTION 12. REPEALER. Section 9C of Article 601d, Vernon's
15-10 Texas Civil Statutes, added by Acts 1993, 73rd Legislature, Chapter
15-11 603, is hereby repealed; provided, however, that any obligations
15-12 issued thereunder are hereby validated and may continue to be
15-13 outstanding until their maturity or early redemption.
15-14 SECTION 13. SEVERABILITY. If any provision of this Act or
15-15 its application to any person or circumstance is held invalid, the
15-16 invalidity shall not affect other provisions or applications of
15-17 this Act that can be given effect without the invalid provision or
15-18 application, and to this end the provisions of this Act are
15-19 declared to be severable.
15-20 SECTION 14. The importance of this legislation and the
15-21 crowded condition of the calendars in both houses create an
15-22 emergency and an imperative public necessity that the
15-23 constitutional rule requiring bills to be read on three several
15-24 days in each house be suspended, and this rule is hereby suspended,
15-25 and that this Act take effect and be in force from and after its
16-1 passage, and it is so enacted.