By Truan S.B. No. 845
75R6018 JRD-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the powers, duties, and composition of the Texas
1-3 Housing Corporation; granting the authority to issue revenue bonds.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 2306.553, Government Code, is amended by
1-6 adding Subsection (c) to read as follows:
1-7 (c) The corporation shall focus its efforts on serving the
1-8 housing needs of persons whose income is less than 125 percent of
1-9 the state median family income.
1-10 SECTION 2. Section 2306.554, Government Code, is amended to
1-11 read as follows:
1-12 Sec. 2306.554. BOARD OF DIRECTORS. The governor, lieutenant
1-13 governor, and comptroller [members of the board] serve ex officio
1-14 as the board of directors of the corporation. The speaker of the
1-15 house of representatives and the director of of the bond finance
1-16 office serve ex officio as nonvoting members of the board of
1-17 directors.
1-18 SECTION 3. Section 2306.555, Government Code, is amended by
1-19 adding Subsection (d) to read as follows:
1-20 (d) The corporation may issue and service loans for housing.
1-21 SECTION 4. Subchapter Y, Chapter 2306, Government Code, is
1-22 amended by adding Sections 2306.5551-2306.5558 to read as follows:
1-23 Sec. 2306.5551. ISSUANCE OF REVENUE BONDS. (a) The
1-24 corporation may issue revenue bonds to carry out its purposes. The
2-1 authority of the corporation to issue revenue bonds under this
2-2 subchapter is separate and independent of the authority of the
2-3 department to issue revenue bonds under this chapter. The
2-4 corporation may:
2-5 (1) provide for and secure payment of the bonds;
2-6 (2) provide for the rights of the holders of the
2-7 bonds, as permitted by this subchapter and the Texas Constitution;
2-8 and
2-9 (3) purchase, hold, cancel, resell, or otherwise
2-10 dispose of its bonds, subject to restrictions in a resolution
2-11 authorizing issuance of its bonds.
2-12 (b) In connection with or incidental to issuing and selling
2-13 its bonds, the corporation may enter into contracts that the board
2-14 of directors considers necessary or appropriate for the
2-15 corporation's obligation, as represented by the bonds and
2-16 incidental contracts, to be placed, in whole or in part, on the
2-17 basis desired by the board of directors, including interest rate,
2-18 currency, or cash flow.
2-19 (c) Contracts that may be entered into under Subsection (b)
2-20 include contracts:
2-21 (1) commonly known as interest rate swap agreements,
2-22 currency swap agreements, or forward payment conversion agreements;
2-23 (2) providing for payments based on levels of or
2-24 changes in interest rates or currency exchange rates;
2-25 (3) to exchange cash flows or a series of payments; or
2-26 (4) that include options, puts or calls to hedge
2-27 payment, currency, rate, spread, or similar exposure.
3-1 (d) A contract entered into under Subsections (b) and (c)
3-2 shall be on terms and conditions approved by the board of
3-3 directors.
3-4 (e) The bonds may be issued from time to time in one or more
3-5 series or issues.
3-6 (f) The bonds shall be payable as to principal, interest,
3-7 and redemption premium, if any, from, and secured by, a first or
3-8 subordinate lien on, and pledge of, all or part of the revenues,
3-9 income, or other resources of the corporation, including:
3-10 (1) the repayments of mortgage loans;
3-11 (2) the earnings from investment or deposit of the
3-12 reserve fund and other funds of the corporation;
3-13 (3) the fees, charges, and other amounts or payments
3-14 received under this subchapter; and
3-15 (4) grants, allocations, subsidies, rent supplements,
3-16 guaranties, aid, contribution, donations, and, to the extent
3-17 allowed under the Texas Constitution, appropriations.
3-18 (g) The corporation may issue bonds to provide all or part
3-19 of the money required for funding or increasing the corporation's
3-20 reserves or funds.
3-21 Sec. 2306.5552. DEFINITIVE REFUNDING BONDS; ADDITIONAL PARITY
3-22 OR SUBORDINATE LIEN BONDS. (a) The corporation may issue
3-23 definitive refunding bonds if the bonds are issued and delivered to
3-24 refund:
3-25 (1) other corporation bonds; or
3-26 (2) the obligations of a local housing finance
3-27 corporation.
4-1 (b) The bonds must be payable as to principal, interest, and
4-2 redemption premium, if any, from the refunding bonds and other
4-3 revenues, income, or resources of the corporation.
4-4 (c) The corporation may contract to issue, sell, and deliver
4-5 the definitive refunding bonds in a manner that will provide the
4-6 money necessary to pay a required part of the principal, interest,
4-7 and redemption premium, if any, on the refunded bonds or
4-8 obligations when due.
4-9 (d) The refunded bonds or obligations may be refunded in
4-10 another manner permitted by this subchapter or other state law,
4-11 including Chapter 503, Acts of the 54th Legislature, Regular
4-12 Session, 1955 (Article 717k, Vernon's Texas Civil Statutes), and
4-13 Chapter 784, Acts of the 61st Legislature, Regular Session, 1969
4-14 (Article 717k-3, Vernon's Texas Civil Statutes).
4-15 (e) The corporation may issue additional parity bonds or
4-16 subordinate lien bonds under terms or conditions in the resolution
4-17 authorizing issuance of the bonds.
4-18 Sec. 2306.5553. BOARD OF DIRECTORS' ACTION ON BONDS.
4-19 (a) Bonds issued by the corporation must be authorized by
4-20 resolution of the board of directors.
4-21 (b) In a resolution authorizing the issuance of the
4-22 corporation's bonds, the board of directors may prescribe the
4-23 systems and procedures under which the corporation shall function.
4-24 (c) The board of directors may provide in a resolution
4-25 authorizing the issuance of the corporation's bonds that part of
4-26 the proceeds from the sale of the bonds may be used to:
4-27 (1) pay the costs and expenses of issuing the bonds;
5-1 (2) pay interest on the bonds during a period required
5-2 by the board of directors;
5-3 (3) pay or repay the corporation's operation and
5-4 maintenance expenses to the extent and for the period specified in
5-5 the resolution; and
5-6 (4) fund, increase, or restore any depletions of the
5-7 reserve fund or of other reserves or funds for any purpose.
5-8 (d) The board of directors may state in a resolution
5-9 authorizing the issuance of an installment or series of bonds the
5-10 extent to which the presiding officer of the board of directors or
5-11 any other officer may use a facsimile signature or facsimile seal
5-12 instead of a manual signature or manually impressed seal to execute
5-13 or attest the bonds and appurtenant coupons.
5-14 (e) An interest coupon may be signed by the facsimile
5-15 signature of the presiding officer of the board of directors.
5-16 (f) A member of the board of directors or the director is
5-17 not liable personally for bonds issued or contracts executed by the
5-18 corporation.
5-19 Sec. 2306.5554. FORM; TERMS; SECURITY. (a) The
5-20 corporation's bonds may be issued as:
5-21 (1) serial bonds;
5-22 (2) term bonds; or
5-23 (3) a combination of serial and term bonds as
5-24 determined by the board of directors.
5-25 (b) The corporation's bonds may be issued:
5-26 (1) in coupon form payable to bearer;
5-27 (2) in fully registered form;
6-1 (3) as coupon bonds payable to bearer but registrable
6-2 as to principal alone or as to both principal and interest; or
6-3 (4) in another form, including a registered
6-4 uncertificated obligation not represented by written instruments,
6-5 commonly known as a book-entry obligation.
6-6 (c) The corporation shall provide for the registration of
6-7 ownership and transfer of a book-entry obligation under a system of
6-8 books and records maintained by a bank serving as trustee, paying
6-9 agent, or bond registrar.
6-10 (d) The corporation's bonds may be sold in a manner, at a
6-11 price, and under terms and conditions determined by the board of
6-12 directors under a contractual arrangement approved by the board of
6-13 directors.
6-14 (e) The corporation's bonds may be payable at a place inside
6-15 or outside the United States.
6-16 (f) The bonds may be made payable in any currency or medium
6-17 of exchange, including United States dollars and currencies of
6-18 other nations.
6-19 (g) The corporation's bonds may be issued to bear interest
6-20 at a rate determined by the board of directors.
6-21 (h) The corporation's bonds may mature within a period
6-22 determined by the board of directors.
6-23 (i) Corporation bonds may be made redeemable before
6-24 maturity.
6-25 (j) The board of directors may provide and covenant for the:
6-26 (1) conversion of one form of bond to another form;
6-27 and
7-1 (2) reconversion of a bond to another form.
7-2 (k) Except as provided by Subsection (l), a replacement,
7-3 converted, or reconverted bond must be approved and registered as
7-4 provided by Section 2306.5555, under procedures established by the
7-5 resolution authorizing the bonds.
7-6 (l) If the duty of replacement, conversion, or reconversion
7-7 of a bond is imposed on a place of payment (paying agent) or a
7-8 corporate trustee under a trust agreement or trust indenture, the
7-9 replacement, converted, or reconverted bond does not need to be
7-10 reapproved by the attorney general or reregistered by the
7-11 comptroller as provided by Section 2306.5555.
7-12 (m) In addition to other security for the corporation's
7-13 bonds authorized by this subchapter, payment of the principal and
7-14 interest and redemption premium, if any, on the corporation's bonds
7-15 may be secured by a first or subordinate lien on and pledge of all
7-16 or part of:
7-17 (1) the corporation's assets and real, personal, or
7-18 mixed property, including:
7-19 (A) mortgages or other obligations securing the
7-20 assets of property;
7-21 (B) investments; and
7-22 (C) trust agreements or trust indentures
7-23 administered by one or more corporate trustees as allowed by the
7-24 board of directors; and
7-25 (2) the reserves or funds of the corporation.
7-26 (n) The form of a mortgage, trust agreement, or trust
7-27 indenture securing corporation bonds must be authorized under the
8-1 resolution authorizing the issuance of the bonds.
8-2 (o) A lien on or pledge of revenues, income, assets,
8-3 reserves, funds, or other resources of the corporation, as
8-4 authorized by this subchapter, is valid and binding from the time
8-5 of payment for and delivery of the bonds authorized by the board of
8-6 directors' resolution creating or confirming the lien or pledge.
8-7 (p) A lien or pledge is fully effective as to revenues,
8-8 income, assets, reserves, funds, or other resources on hand or
8-9 later received, and those items are subject to the lien or pledge
8-10 without physical delivery of the item or any further act.
8-11 (q) A lien or pledge is valid and binding against a party
8-12 who has a claim in tort, contract, or otherwise against the
8-13 corporation or another party, regardless of whether the party has
8-14 notice of the lien or pledge.
8-15 (r) A resolution authorizing the issuance of the
8-16 corporation's bonds or any other instrument creating or confirming
8-17 a lien or pledge is not required to be filed or recorded, except
8-18 that:
8-19 (1) the resolution or instrument must be filed in the
8-20 corporation's records; and
8-21 (2) each bond resolution of the board of directors
8-22 must be submitted to the attorney general under Section 2306.5555.
8-23 Sec. 2306.5555. APPROVAL AND REGISTRATION OF BONDS.
8-24 (a) Bonds issued by the corporation and the appropriate
8-25 proceedings authorizing the bonds' issuance shall be submitted to
8-26 the attorney general for examination.
8-27 (b) The attorney general shall approve the bonds if the
9-1 attorney general finds that the bonds have been authorized as
9-2 provided by this subchapter.
9-3 (c) On approval of the attorney general under Subsection
9-4 (b), the comptroller shall register the corporation's bonds.
9-5 Sec. 2306.5556. RIGHTS AND REMEDIES. (a) The state pledges
9-6 to and agrees with the holders of bonds issued under this
9-7 subchapter that it will not limit or alter the rights vested in the
9-8 corporation under this subchapter to fulfill the terms of an
9-9 agreement made with a bondholder or impair the rights and remedies
9-10 of a bondholder until the following obligations are fully
9-11 discharged:
9-12 (1) the bonds;
9-13 (2) interest on the bonds;
9-14 (3) interest on any unpaid installment of interest;
9-15 and
9-16 (4) all costs and expenses related to an action or
9-17 proceeding by or on behalf of the holders.
9-18 (b) The corporation may include the state's pledge and
9-19 agreement under Subsection (a) in an agreement with the holders of
9-20 the corporation's bonds.
9-21 (c) A writ of mandamus and any other legal or equitable
9-22 remedy are available to a party in interest to require the
9-23 corporation, the comptroller, or another party to carry out an
9-24 agreement or to perform a function or duty under:
9-25 (1) this subchapter;
9-26 (2) the Texas Constitution; or
9-27 (3) the corporation's bond resolutions.
10-1 Sec. 2306.5557. BONDS NOT OBLIGATIONS OF STATE. (a) The
10-2 corporation's bonds under this subchapter:
10-3 (1) are solely obligations of the corporation and are
10-4 payable solely from funds of the corporation;
10-5 (2) are not an obligation, debt, or liability of the
10-6 state; and
10-7 (3) do not create or constitute a pledge, giving, or
10-8 lending of the faith, credit, or taxing power of the state.
10-9 (b) A bond of the corporation issued under this subchapter
10-10 must contain a statement on the face of the bond that:
10-11 (1) the state is not obligated to pay the principal or
10-12 interest on the bond; and
10-13 (2) the faith, credit, or taxing power of the state is
10-14 not pledged, given, or loaned to payment of the bond's principal or
10-15 interest.
10-16 Sec. 2306.5558. MISCELLANEOUS PROVISIONS RELATING TO BONDS.
10-17 (a) Notwithstanding any other statute, a bond and interest coupon
10-18 issued and delivered by the corporation is a negotiable instrument
10-19 under the Uniform Commercial Code, except that the bond may be
10-20 registered or subject to registration under this subchapter.
10-21 (b) Bonds of the corporation are incontestable for any
10-22 reason in a court or other forum after approval by the attorney
10-23 general and registration by the comptroller and are valid and
10-24 binding obligations for all purposes under the terms of the bonds.
10-25 (c) If an officer whose manual or facsimile signature
10-26 appears on a bond or whose facsimile signature appears on a coupon
10-27 is not an officer at the time the bond is delivered, the signature
11-1 is valid and sufficient for all purposes as if the officer had
11-2 remained in office until delivery.
11-3 (d) The following are free from taxation or assessment by
11-4 this state or a public agency:
11-5 (1) bonds of the corporation issued under this
11-6 subchapter;
11-7 (2) interest and income from bonds of the corporation,
11-8 including a profit from the sale of the bonds; and
11-9 (3) all fees, charges, gifts, grants, revenues,
11-10 receipts, and other money received or pledged to pay or secure the
11-11 payment of the corporation's bonds.
11-12 (e) Bonds issued by the corporation under this subchapter
11-13 are legal and authorized investments for:
11-14 (1) banks;
11-15 (2) savings banks;
11-16 (3) trust companies;
11-17 (4) savings and loan associations;
11-18 (5) insurance companies;
11-19 (6) fiduciaries;
11-20 (7) trustees;
11-21 (8) guardians; or
11-22 (9) sinking or other public funds of:
11-23 (A) this state;
11-24 (B) a municipality;
11-25 (C) a county;
11-26 (D) a school district; or
11-27 (E) another political subdivision or public
12-1 agency of this state.
12-2 (f) Bonds of the corporation are eligible and lawful
12-3 security for a deposit of public funds of the state or a public
12-4 agency to the extent of the greater of the bonds' par or market
12-5 value when accompanied by appurtenant unmatured interest coupons.
12-6 (g) The board of directors may provide procedures for the
12-7 replacement of a mutilated, lost, stolen, or destroyed bond or
12-8 interest coupon.
12-9 (h) The director or a member of the board of directors may
12-10 not have or attempt to have a pecuniary interest in a transaction
12-11 to which the corporation is a party for purposes of personal
12-12 pecuniary gain.
12-13 (i) A member of the board of directors or corporation
12-14 employee may not purchase bonds of the corporation in the open
12-15 secondary market for municipal securities.
12-16 SECTION 5. Subchapter Y, Chapter 2306, Government Code, is
12-17 amended by adding Section 2306.560 to read as follows:
12-18 Sec. 2306.560. STATE AUDITOR. The transactions of the
12-19 corporation are subject to audit by the state auditor in accordance
12-20 with Chapter 321.
12-21 SECTION 6. This Act takes effect September 1, 1997.
12-22 SECTION 7. The importance of this legislation and the
12-23 crowded condition of the calendars in both houses create an
12-24 emergency and an imperative public necessity that the
12-25 constitutional rule requiring bills to be read on three several
12-26 days in each house be suspended, and this rule is hereby suspended.