By: Fraser S.B. No. 1555
A BILL TO BE ENTITLED
AN ACT
1-1 relating to administration of bond and other programs by the
1-2 Veterans' Land Board.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Section 161.074, Natural Resources Code, is
1-5 amended to read as follows:
1-6 Sec. 161.074. BOND ENHANCEMENT AGREEMENTS. (a) The board
1-7 may at any time and from time to time enter into one or more bond
1-8 enhancement agreements that the board determines to be necessary or
1-9 appropriate to place the obligation of the board, as represented by
1-10 the bonds, in whole or in part, on the interest rate, currency,
1-11 cash flow, or other basis desired by the board. Bond enhancement
1-12 agreements may include, on terms and conditions approved by the
1-13 board, interest rate swap agreements, currency swap agreements,
1-14 forward payment conversion agreements, agreements providing for
1-15 payments based on levels of or changes in interest rates or
1-16 currency exchange rates, agreements to exchange cash flows or a
1-17 series of payments, or agreements, including options, puts, or
1-18 calls, to hedge payment, currency, rate, spread, or other exposure.
1-19 A bond enhancement agreement is an agreement for professional
1-20 services and shall contain the terms and conditions and be for the
1-21 period that the board approves. The fees and expenses of the board
1-22 in connection with the issuance of bonds and the purchase and sale
1-23 of land may be paid from money in the fund, provided that payments
1-24 due from the board under a bond enhancement agreement, other than
2-1 fees and expenses, that relate to the payment of debt service on
2-2 bonds constitute payments of principal of and interest on the
2-3 bonds.
2-4 (b) The resolution of the board authorizing a bond
2-5 enhancement agreement may authorize one or more designated officers
2-6 or employees of the board to act on behalf of the board in entering
2-7 into and delivering the bond enhancement agreement and in
2-8 determining or setting the counterparty and terms of the bond
2-9 enhancement agreement specified in the resolution, except that the
2-10 resolution must set the maximum amount and term for the bond
2-11 enhancement agreement.
2-12 (c) Unless the board elects otherwise in its approval of a
2-13 bond enhancement agreement, the bond enhancement agreement is not a
2-14 credit agreement for purposes of Chapter 656, Acts of the 68th
2-15 Legislature, Regular Session, 1983 (Article 717q, Vernon's Texas
2-16 Civil Statutes), regardless of whether the bonds relating to the
2-17 bond enhancement agreement were issued in part under that law.
2-18 SECTION 2. Subsection (b), Section 161.1732, Natural
2-19 Resources Code, is amended to read as follows:
2-20 (b) To be eligible to lend securities under this section, a
2-21 custodian selected by the board under Subsection (a) must be
2-22 experienced in the operation of a fully secured securities loan
2-23 program and must:
2-24 (1) maintain adequate capital in the prudent judgment
2-25 of the board to assure the safety of the securities;
2-26 (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. Subsection (b), Section 161.312, Natural
3-13 Resources Code, is 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. Subsection (b), Section 162.0042, Natural
3-19 Resources Code, is 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
4-1 in form and content to the board fully indemnifying the board
4-2 against loss resulting from the custodian's operation of a
4-3 securities loan program for the fund's securities; and
4-4 (3) require any securities broker or dealer to whom it
4-5 lends securities of the fund to deliver to, and maintain with, the
4-6 custodian collateral in the form of cash, [or] United States
4-7 government securities, or letters of credit that are issued by
4-8 banks and rated as to investment quality not less than A or its
4-9 equivalent by a nationally recognized investment rating firm in an
4-10 amount equal to at least 100 percent of the market value, from time
4-11 to time, of the loaned securities.
4-12 SECTION 5. Section 162.052, Natural Resources Code, is
4-13 amended to read as follows:
4-14 Sec. 162.052. BOND ENHANCEMENT AGREEMENTS. (a) The board
4-15 may at any time and from time to time enter into one or more bond
4-16 enhancement agreements that the board determines to be necessary or
4-17 appropriate to place the obligation of the board, as represented by
4-18 the bonds, in whole or in part, on the interest rate, currency,
4-19 cash flow, or other basis desired by the board. Bond enhancement
4-20 agreements may include, on terms and conditions approved by the
4-21 board, interest rate swap agreements, currency swap agreements,
4-22 forward payment conversion agreements, agreements providing for
4-23 payments based on levels of or changes in interest rates or
4-24 currency exchange rates, agreements to exchange cash flows or a
4-25 series of payments, or agreements, including options, puts, or
4-26 calls, to hedge payment, currency, rate, spread, or other exposure.
5-1 A bond enhancement agreement is an agreement for professional
5-2 services and shall contain the terms and conditions and be for the
5-3 period that the board approves. The fees and expenses of the board
5-4 in connection with the issuance of bonds and the making of loans
5-5 may be paid from money in the related fund, provided that any
5-6 payments due from the board under a bond enhancement agreement,
5-7 other than fees and expenses, that relate to the payment of debt
5-8 service on bonds constitute payments of principal of and interest
5-9 on the bonds.
5-10 (b) The resolution of the board authorizing a bond
5-11 enhancement agreement may authorize one or more designated officers
5-12 or employees of the board to act on behalf of the board in entering
5-13 into and delivering the bond enhancement agreement and in
5-14 determining or setting the counterparty and terms of the bond
5-15 enhancement agreement specified in the resolution, except that the
5-16 resolution must set the maximum amount and term for the bond
5-17 enhancement agreement.
5-18 (c) Unless the board elects otherwise in its approval of a
5-19 bond enhancement agreement, the bond enhancement agreement is not a
5-20 credit agreement for purposes of Chapter 656, Acts of the 68th
5-21 Legislature, Regular Session, 1983 (Article 717q, Vernon's Texas
5-22 Civil Statutes), regardless of whether the bonds relating to the
5-23 bond enhancement agreement were issued in part under that law.
5-24 SECTION 6. Section 164.005, Natural Resources Code, is
5-25 amended by adding Subsections (d) and (e) to read as follows:
5-26 (d) The board may not authorize the use of any veterans home
6-1 in a manner that would entitle the United States to recover any
6-2 amounts pursuant to 38 U.S.C. Section 8136, as amended, or any
6-3 successor statute.
6-4 (e) On terms and conditions acceptable to it, the board may
6-5 accept and administer gifts, grants, or donations for the support,
6-6 acquisition, construction, operation, enlargement, improvement,
6-7 furnishing, or equipping of veterans homes and may enter into
6-8 agreements with a nonprofit corporation for the solicitation,
6-9 receipt, and disbursement of the gifts, grants, or donations.
6-10 SECTION 7. Section 164.009, Natural Resources Code, is
6-11 amended to read as follows:
6-12 Sec. 164.009. SECURITY FOR THE BONDS. (a) The bonds issued
6-13 under this chapter shall be special obligations of the board. As
6-14 security for the payment of the bonds, the board may provide for a
6-15 pledge of and lien or mortgage on:
6-16 (1) the receipts of all kinds of the veterans' land
6-17 fund, the veterans' housing assistance fund, and the veterans'
6-18 housing assistance fund II determined by the board, on the basis of
6-19 facts, circumstances, and expectations at the time of issuance of
6-20 the bonds, not to be required for the payment of principal of or
6-21 interest on the general obligation bonds issued under Article III,
6-22 Sections 49-b, 49-b-1, and 49-b-2, of the Texas Constitution or to
6-23 make payments with respect to principal or interest under a bond
6-24 enhancement agreement with respect to the general obligation bonds
6-25 if the bonds are issued to provide funds to purchase land and sell
6-26 land to veterans or to make home mortgage loans to veterans;
7-1 (2) the assets of the veterans' land fund, the
7-2 veterans' housing assistance fund, or the veterans' housing
7-3 assistance fund II determined by the board on the basis of facts,
7-4 circumstances, and expectations at the time of issuance of the
7-5 bonds not to be required for the purposes of the fund if the bonds
7-6 are issued to provide funds to purchase land and sell land to
7-7 veterans or to make home mortgage loans to veterans;
7-8 (3) the payments and repayments received by the board
7-9 from the board's financial assistance provided under this chapter;
7-10 (4) other program revenues; [and]
7-11 (5) other available revenues of the board; and
7-12 (6) one or more veterans homes.
7-13 (b) The pledge and lien or mortgage are to be provided for
7-14 and determined in accordance with the resolution of the board
7-15 providing for the issuance and sale of the bonds.
7-16 SECTION 8. Section 164.011, Natural Resources Code, is
7-17 amended to read as follows:
7-18 Sec. 164.011. FUNDS. (a) In the resolution authorizing the
7-19 issuance of bonds, the board may make additional covenants with
7-20 respect to the bonds and the pledged revenues and may provide for
7-21 the flow of funds and the establishment, maintenance, and
7-22 investment of funds.
7-23 [(b)] The funds established may include an interest and
7-24 sinking fund, a reserve fund, and other funds that will be kept and
7-25 maintained by or under the direction of the board.
7-26 (b) The board may by resolution provide for the
8-1 establishment, maintenance, and investment of additional funds into
8-2 which the board may deposit revenues from any financial assistance
8-3 program under this chapter that are not pledged to bonds, including
8-4 any gifts, grants, or donations accepted by the board for the
8-5 support, acquisition, construction, operation, enlargement,
8-6 improvement, furnishing, or equipping of veterans homes.
8-7 (c) Funds established by the board under this chapter are
8-8 not to be part of the State Treasury and are not subject to
8-9 Subchapter F, Chapter 404, Government Code. Any provision of this
8-10 chapter or other law that provides for the deposit of money or
8-11 another thing of value into the funds prevails over the
8-12 requirements of Subchapter F, Chapter 404, Government Code. The
8-13 funds shall remain under the control of the board but, at the
8-14 direction of the board, may be kept and held in escrow and in trust
8-15 by the comptroller on behalf of the board and the owners of the
8-16 bonds and used only as provided by this chapter.
8-17 (d) Money in a fund shall be invested in [authorized]
8-18 investments authorized as provided by a [bond] resolution or order
8-19 of the board.
8-20 (e) Legal title to money in a fund is in the board unless or
8-21 until paid from the fund as provided by this chapter or the
8-22 resolution authorizing the issuance of the bonds or the
8-23 establishment of the fund.
8-24 (f) The board shall select the comptroller or one or more
8-25 commercial banks, depository trust companies, or other entities to
8-26 serve as custodian of the cash or securities of a [the] fund and
9-1 may authorize the custodian to invest the cash in investments as
9-2 determined by the board.
9-3 (g) In managing the assets of a fund, the board may permit
9-4 the custodian of the fund's securities to lend the securities as
9-5 provided by this section and by rules adopted by the board.
9-6 (h) To be eligible to lend securities under this section, a
9-7 custodian selected under Subsection (f) must be experienced in the
9-8 operation of a fully secured securities loan program and must:
9-9 (1) maintain adequate capital in the prudent judgment
9-10 of the board to assure the safety of the securities;
9-11 (2) execute an indemnification agreement satisfactory
9-12 in form and content to the board fully indemnifying the board
9-13 against loss resulting from the custodian's operation of a
9-14 securities loan program for the fund's securities; and
9-15 (3) require any securities broker or dealer to whom it
9-16 lends securities of the fund to deliver and maintain with the
9-17 custodian collateral in the form of cash, [or] United States
9-18 government securities, or letters of credit that are issued by
9-19 banks and rated as to investment quality not less than A or its
9-20 equivalent by a nationally recognized investment rating firm in an
9-21 amount equal to at least 100 percent of the market value, from time
9-22 to time, of the loaned securities.
9-23 (i) The board shall require the custodian or custodians of a
9-24 [the] fund to administer the fund solely and strictly as provided
9-25 by this chapter and the resolution authorizing the issuance of the
9-26 bonds, and the state may not take any other action relating to the
10-1 fund except those specified in this chapter and the resolution
10-2 authorizing the issuance of the bonds or the establishment of the
10-3 fund.
10-4 SECTION 9. The importance of this legislation and the
10-5 crowded condition of the calendars in both houses create an
10-6 emergency and an imperative public necessity that the
10-7 constitutional rule requiring bills to be read on three several
10-8 days in each house be suspended, and this rule is hereby suspended,
10-9 and that this Act take effect and be in force from and after its
10-10 passage, and it is so enacted.