By Counts H.B. No. 1812
76R6927 GCH-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to administration of bond and other programs by the
1-3 Veterans' Land Board.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 161.074, Natural Resources Code, is
1-6 amended to read as follows:
1-7 Sec. 161.074. BOND ENHANCEMENT AGREEMENTS. (a) The board
1-8 may at any time and from time to time enter into one or more bond
1-9 enhancement agreements that the board determines to be necessary
1-10 or appropriate to place the obligation of the board, as represented
1-11 by the bonds, in whole or in part, on the interest rate, currency,
1-12 cash flow, or other basis desired by the board. Bond enhancement
1-13 agreements may include, on terms and conditions approved by the
1-14 board, interest rate swap agreements, currency swap agreements,
1-15 forward payment conversion agreements, agreements providing for
1-16 payments based on levels of or changes in interest rates or
1-17 currency exchange rates, agreements to exchange cash flows or a
1-18 series of payments, or agreements, including options, puts, or
1-19 calls, to hedge payment, currency, rate, spread, or other exposure.
1-20 A bond enhancement agreement is an agreement for professional
1-21 services and shall contain the terms and conditions and be for the
1-22 period that the board approves. The fees and expenses of the board
1-23 in connection with the issuance of bonds and the purchase and sale
1-24 of land may be paid from money in the fund, provided that payments
2-1 due from the board under a bond enhancement agreement, other than
2-2 fees and expenses, that relate to the payment of debt service on
2-3 bonds constitute payments of principal of and interest on the
2-4 bonds.
2-5 (b) The resolution of the board authorizing a bond
2-6 enhancement agreement may authorize one or more designated officers
2-7 or employees of the board to act on behalf of the board in entering
2-8 into and delivering the bond enhancement agreement and in
2-9 determining or setting the counterparty and terms of the bond
2-10 enhancement agreement specified in the resolution, except that the
2-11 resolution must set the maximum amount and term for the bond
2-12 enhancement agreement.
2-13 (c) Unless the board elects otherwise in its approval of a
2-14 bond enhancement agreement, the bond enhancement agreement is not a
2-15 credit agreement for purposes of Chapter 656, Acts of the 68th
2-16 Legislature, Regular Session, 1983 (Article 717q, Vernon's Texas
2-17 Civil Statutes), regardless of whether the bonds relating to the
2-18 bond enhancement agreement were issued in part under that law.
2-19 SECTION 2. Section 161.1732(b), Natural Resources Code, is
2-20 amended to read as follows:
2-21 (b) To be eligible to lend securities under this section, a
2-22 custodian selected by the board under Subsection (a) must be
2-23 experienced in the operation of a fully secured securities loan
2-24 program and must:
2-25 (1) maintain adequate capital in the prudent judgment
2-26 of the board to assure the safety of the securities;
2-27 (2) execute an indemnification agreement satisfactory
3-1 in form and content to the board fully indemnifying the board
3-2 against loss resulting from the custodian's operation of a
3-3 securities loan program for the fund's securities; and
3-4 (3) require any securities broker or dealer to whom it
3-5 lends securities of the fund to deliver to, and maintain with, the
3-6 custodian collateral in the form of cash, [or] United States
3-7 government securities, or letters of credit that are issued by
3-8 banks and rated as to investment quality not less than A or its
3-9 equivalent by a nationally recognized investment rating firm in an
3-10 amount equal to at least 100 percent of the market value, from time
3-11 to time, of the loaned securities.
3-12 SECTION 3. Section 161.312(b), Natural Resources Code, is
3-13 amended to read as follows:
3-14 (b) The notice shall state the reason why the contract of
3-15 sale and purchase is subject to forfeiture and is sufficient if
3-16 given by certified [registered] mail to the last known address of
3-17 the original purchaser and his vendees.
3-18 SECTION 4. Section 162.0042(b), Natural Resources Code, is
3-19 amended to read as follows:
3-20 (b) To be eligible to lend securities under this section, a
3-21 custodian selected by the board under Subsection (a) must be
3-22 experienced in the operation of a fully secured securities loan
3-23 program and must:
3-24 (1) maintain adequate capital in the prudent judgment
3-25 of the board to assure the safety of the securities;
3-26 (2) execute an indemnification agreement satisfactory
3-27 in form and content to the board fully indemnifying the board
4-1 against loss resulting from the custodian's operation of a
4-2 securities loan program for the fund's securities; and
4-3 (3) require any securities broker or dealer to whom it
4-4 lends securities of the fund to deliver to, and maintain with, the
4-5 custodian collateral in the form of cash, [or] United States
4-6 government securities, or letters of credit that are issued by
4-7 banks and rated as to investment quality not less than A or its
4-8 equivalent by a nationally recognized investment rating firm in an
4-9 amount equal to at least 100 percent of the market value, from time
4-10 to time, of the loaned securities.
4-11 SECTION 5. Section 162.052, Natural Resources Code, is
4-12 amended to read as follows:
4-13 Sec. 162.052. BOND ENHANCEMENT AGREEMENTS. (a) The board
4-14 may at any time and from time to time enter into one or more bond
4-15 enhancement agreements that the board determines to be necessary or
4-16 appropriate to place the obligation of the board, as represented by
4-17 the bonds, in whole or in part, on the interest rate, currency,
4-18 cash flow, or other basis desired by the board. Bond enhancement
4-19 agreements may include, on terms and conditions approved by the
4-20 board, interest rate swap agreements, currency swap agreements,
4-21 forward payment conversion agreements, agreements providing for
4-22 payments based on levels of or changes in interest rates or
4-23 currency exchange rates, agreements to exchange cash flows or a
4-24 series of payments, or agreements, including options, puts, or
4-25 calls, to hedge payment, currency, rate, spread, or other exposure.
4-26 A bond enhancement agreement is an agreement for professional
4-27 services and shall contain the terms and conditions and be for the
5-1 period that the board approves. The fees and expenses of the board
5-2 in connection with the issuance of bonds and the making of loans
5-3 may be paid from money in the related fund, provided that any
5-4 payments due from the board under a bond enhancement agreement,
5-5 other than fees and expenses, that relate to the payment of debt
5-6 service on bonds constitute payments of principal of and interest
5-7 on the bonds.
5-8 (b) The resolution of the board authorizing a bond
5-9 enhancement agreement may authorize one or more designated officers
5-10 or employees of the board to act on behalf of the board in entering
5-11 into and delivering the bond enhancement agreement and in
5-12 determining or setting the counterparty and terms of the bond
5-13 enhancement agreement specified in the resolution, except that the
5-14 resolution must set the maximum amount and term for the bond
5-15 enhancement agreement.
5-16 (c) Unless the board elects otherwise in its approval of a
5-17 bond enhancement agreement, the bond enhancement agreement is not a
5-18 credit agreement for purposes of Chapter 656, Acts of the 68th
5-19 Legislature, Regular Session, 1983 (Article 717q, Vernon's Texas
5-20 Civil Statutes), regardless of whether the bonds relating to the
5-21 bond enhancement agreement were issued in part under that law.
5-22 SECTION 6. Section 164.005, Natural Resources Code, is
5-23 amended by adding Subsections (d) and (e) to read as follows:
5-24 (d) The board may not authorize the use of any veterans home
5-25 in a manner that would entitle the United States to recover any
5-26 amounts pursuant to 38 U.S.C. Section 8136, as amended, or any
5-27 successor statute.
6-1 (e) On terms and conditions acceptable to it, the board may
6-2 accept and administer gifts, grants, or donations for the support,
6-3 acquisition, construction, operation, enlargement, improvement,
6-4 furnishing, or equipping of veterans homes and may enter into
6-5 agreements with a nonprofit corporation for the solicitation,
6-6 receipt, and disbursement of the gifts, grants, or donations.
6-7 SECTION 7. Section 164.009, Natural Resources Code, is
6-8 amended to read as follows:
6-9 Sec. 164.009. SECURITY FOR THE BONDS. (a) The bonds issued
6-10 under this chapter shall be special obligations of the board. As
6-11 security for the payment of the bonds, the board may provide for a
6-12 pledge of and lien or mortgage on:
6-13 (1) the receipts of all kinds of the veterans' land
6-14 fund, the veterans' housing assistance fund, and the veterans'
6-15 housing assistance fund II determined by the board, on the basis of
6-16 facts, circumstances, and expectations at the time of issuance of
6-17 the bonds, not to be required for the payment of principal of or
6-18 interest on the general obligation bonds issued under Article III,
6-19 Sections 49-b, 49-b-1, and 49-b-2, of the Texas Constitution or to
6-20 make payments with respect to principal or interest under a bond
6-21 enhancement agreement with respect to the general obligation bonds
6-22 if the bonds are issued to provide funds to purchase land and sell
6-23 land to veterans or to make home mortgage loans to veterans;
6-24 (2) the assets of the veterans' land fund, the
6-25 veterans' housing assistance fund, or the veterans' housing
6-26 assistance fund II determined by the board on the basis of facts,
6-27 circumstances, and expectations at the time of issuance of the
7-1 bonds not to be required for the purposes of the fund if the bonds
7-2 are issued to provide funds to purchase land and sell land to
7-3 veterans or to make home mortgage loans to veterans;
7-4 (3) the payments and repayments received by the board
7-5 from the board's financial assistance provided under this chapter;
7-6 (4) other program revenues; [and]
7-7 (5) other available revenues of the board; and
7-8 (6) one or more veterans homes.
7-9 (b) The pledge and lien or mortgage are to be provided for
7-10 and determined in accordance with the resolution of the board
7-11 providing for the issuance and sale of the bonds.
7-12 SECTION 8. Section 164.011, Natural Resources Code, is
7-13 amended to read as follows:
7-14 Sec. 164.011. FUNDS. (a) In the resolution authorizing the
7-15 issuance of bonds, the board may make additional covenants with
7-16 respect to the bonds and the pledged revenues and may provide for
7-17 the flow of funds and the establishment, maintenance, and
7-18 investment of funds.
7-19 [(b)] The funds established may include an interest and
7-20 sinking fund, a reserve fund, and other funds that will be kept and
7-21 maintained by or under the direction of the board.
7-22 (b) The board may by resolution provide for the
7-23 establishment, maintenance, and investment of additional funds into
7-24 which the board may deposit revenue from any financial assistance
7-25 program under this chapter that are not pledged to bonds, including
7-26 any gifts, grants, or donations accepted by the board for the
7-27 support, acquisition, construction, operation, enlargement,
8-1 improvement, furnishing, or equipping of veterans homes.
8-2 (c) Funds established by the board under this chapter are
8-3 not to be part of the State Treasury and are not subject to
8-4 Subchapter F, Chapter 404, Government Code. Any provision of this
8-5 chapter or other law that provides for the deposit of money or
8-6 another thing of value into the funds prevails over the
8-7 requirements of Subchapter F, Chapter 404, Government Code. The
8-8 funds shall remain under the control of the board but, at the
8-9 direction of the board, may be kept and held in escrow and in trust
8-10 by the comptroller on behalf of the board and the owners of the
8-11 bonds and used only as provided by this chapter.
8-12 (d) Money in a fund shall be invested in [authorized]
8-13 investments authorized as provided by a [bond] resolution or order
8-14 of the board.
8-15 (e) Legal title to money in a fund is in the board unless or
8-16 until paid from the fund as provided by this chapter or the
8-17 resolution authorizing the issuance of the bonds or the
8-18 establishment of the fund.
8-19 (f) The board shall select the comptroller or one or more
8-20 commercial banks, depository trust companies, or other entities to
8-21 serve as custodian of the cash or securities of a [the] fund and
8-22 may authorize the custodian to invest the cash in investments as
8-23 determined by the board.
8-24 (g) In managing the assets of a fund, the board may permit
8-25 the custodian of the fund's securities to lend the securities as
8-26 provided by this section and by rules adopted by the board.
8-27 (h) To be eligible to lend securities under this section, a
9-1 custodian selected under Subsection (f) must be experienced in the
9-2 operation of a fully secured securities loan program and must:
9-3 (1) maintain adequate capital in the prudent judgment
9-4 of the board to assure the safety of the securities;
9-5 (2) execute an indemnification agreement satisfactory
9-6 in form and content to the board fully indemnifying the board
9-7 against loss resulting from the custodian's operation of a
9-8 securities loan program for the fund's securities; and
9-9 (3) require any securities broker or dealer to whom it
9-10 lends securities of the fund to deliver and maintain with the
9-11 custodian collateral in the form of cash, [or] United States
9-12 government securities, or letters of credit that are issued by
9-13 banks and rated as to investment quality not less than A or its
9-14 equivalent by a nationally recognized investment rating firm in an
9-15 amount equal to at least 100 percent of the market value, from time
9-16 to time, of the loaned securities.
9-17 (i) The board shall require the custodian or custodians of a
9-18 [the] fund to administer the fund solely and strictly as provided
9-19 by this chapter and the resolution authorizing the issuance of the
9-20 bonds, and the state may not take any other action relating to the
9-21 fund except those specified in this chapter and the resolution
9-22 authorizing the issuance of the bonds or the establishment of the
9-23 fund.
9-24 SECTION 9. The importance of this legislation and the
9-25 crowded condition of the calendars in both houses create an
9-26 emergency and an imperative public necessity that the
9-27 constitutional rule requiring bills to be read on three several
10-1 days in each house be suspended, and this rule is hereby suspended,
10-2 and that this Act take effect and be in force from and after its
10-3 passage, and it is so enacted.