1-1 By: Shapiro S.B. No. 4 1-2 (In the Senate - Filed January 25, 2001; January 29, 2001, 1-3 read first time and referred to Committee on State Affairs; 1-4 February 28, 2001, reported adversely, with favorable Committee 1-5 Substitute by the following vote: Yeas 7, Nays 0; 1-6 February 28, 2001, sent to printer.) 1-7 COMMITTEE SUBSTITUTE FOR S.B. No. 4 By: Shapiro 1-8 A BILL TO BE ENTITLED 1-9 AN ACT 1-10 relating to the administration and use of the Texas Mobility Fund 1-11 and the issuance of obligations for financing the construction, 1-12 reconstruction, acquisition, and expansion of state highways and 1-13 other mobility projects. 1-14 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-15 SECTION 1. Chapter 201, Transportation Code, is amended by 1-16 adding Subchapter M to read as follows: 1-17 SUBCHAPTER M. OBLIGATIONS FOR CERTAIN HIGHWAY AND 1-18 MOBILITY PROJECTS 1-19 Sec. 201.941. DEFINITIONS. In this subchapter: 1-20 (1) "Comptroller's certification" means: 1-21 (A) as to long-term obligations, the 1-22 certification made under Section 201.943(e); and 1-23 (B) as to short-term obligations, the 1-24 certification made under Section 201.943(f). 1-25 (2) "Credit agreement" has the meaning assigned by 1-26 Section 1371.001, Government Code. 1-27 (3) "Fund" means the Texas Mobility Fund. 1-28 (4) "Long-term obligations" means an issue or series 1-29 of obligations the latest scheduled maturity of which is more than 1-30 five years. 1-31 (5) "Maximum obligation amount" means the maximum 1-32 aggregate principal amount of long-term obligations and short-term 1-33 obligations that the commission may issue from time to time after 1-34 receipt of the applicable comptroller's certification. 1-35 (6) "Obligations" means bonds, notes, or other 1-36 negotiable securities. 1-37 (7) "Short-term obligations" means an issue or series 1-38 of obligations the latest scheduled maturity of which is five years 1-39 or less. 1-40 Sec. 201.942. ADMINISTRATION OF FUND. The comptroller shall 1-41 hold the fund, and the commission, through the department, shall 1-42 manage, invest, use, and administer the fund as provided by this 1-43 subchapter. Income on money in the fund shall be deposited in the 1-44 fund. 1-45 Sec. 201.943. AUTHORITY TO ISSUE OBLIGATIONS; PURPOSES; 1-46 LIMITATIONS. (a) Subject to Subsections (e), (f), and (g), the 1-47 commission by order or resolution may issue obligations in the name 1-48 and on behalf of the state and the department and may enter into 1-49 credit agreements related to the obligations. The obligations may 1-50 be issued in multiple series and issues from time to time in an 1-51 aggregate amount not exceeding the maximum obligation amount. The 1-52 obligations may be issued on and may have the terms and provisions 1-53 the commission determines appropriate and in the interests of the 1-54 state. The obligations may be issued as long-term obligations, 1-55 short-term obligations, or both. The latest scheduled maturity of 1-56 an issue or series of obligations may not exceed 30 years. 1-57 (b) Obligations must be secured by and payable from a pledge 1-58 of and lien on all or part of the money in the fund. Obligations 1-59 may be additionally secured by and payable from credit agreements. 1-60 The commission may pay amounts due on the obligations from 1-61 discretionary money available to it that is not dedicated to or 1-62 appropriated for other specific purposes. 1-63 (c) The commission may create within the fund accounts, 1-64 reserves, and subfunds for purposes the commission finds 2-1 appropriate and necessary in connection with the issuance of 2-2 obligations. 2-3 (d) Obligations may be issued for one or more of the 2-4 following purposes: 2-5 (1) to pay all or part of the costs of constructing, 2-6 reconstructing, acquiring, and expanding state highways, including 2-7 any necessary design and acquisition of rights-of-way, in the 2-8 manner and locations determined by the commission that, according 2-9 to conclusive findings of the commission, have an expected useful 2-10 life, without material repair, of not less than five years; 2-11 (2) to provide participation by the state in the 2-12 payment of part of the costs of constructing and providing publicly 2-13 owned toll roads and other transportation projects that are 2-14 determined by the commission to be in the best interests of the 2-15 state in its major goal of improving the mobility of the residents 2-16 of the state; 2-17 (3) to create debt service reserve accounts, paying 2-18 interest on obligations for a period of not longer than two years; 2-19 (4) to refund or cancel outstanding obligations; and 2-20 (5) to pay the commission's costs of issuance. 2-21 (e) Long-term obligations in the amount proposed to be 2-22 issued by the commission may not be issued unless the comptroller 2-23 projects in a comptroller's certification that the amount of money 2-24 to be on deposit in the fund during each year of the period during 2-25 which the proposed obligations are scheduled to be outstanding will 2-26 be at least equal to 110 percent of the requirements to pay the 2-27 principal of and interest on the proposed long-term obligations 2-28 during the year. 2-29 (f) Short-term obligations in the amount proposed by the 2-30 commission may not be issued unless the comptroller, in a 2-31 comptroller's certification: 2-32 (1) assumes that the short-term obligations will be 2-33 refunded and refinanced to mature over a 20-year period with level 2-34 principal requirements and bearing interest at then current market 2-35 rates, as determined by the comptroller; and 2-36 (2) projects that the amount of money to be on deposit 2-37 in the fund during each year of the assumed 20-year period will be 2-38 at least equal to 110 percent of the requirements to pay the 2-39 principal of and interest on the proposed refunding obligations 2-40 during the year. 2-41 (g) The commission may agree to further restrictions in 2-42 connection with the issuance of obligations and may retain 2-43 independent professional consultants to make projections in 2-44 addition to, but not instead of, those of the comptroller if 2-45 required as a prerequisite to the issuance of the obligations. 2-46 (h) The commission has all powers necessary or appropriate 2-47 to carry out this subchapter and to implement Section 49-k, Article 2-48 III, Texas Constitution, including the powers granted to other 2-49 bond-issuing governmental agencies and units and to nonprofit 2-50 corporations by Chapters 1201, 1207, and 1371, Government Code. 2-51 (i) A comptroller's certification under this section must be 2-52 based on economic data, forecasting methods, and projections that 2-53 the comptroller determines are reliable. 2-54 Sec. 201.944. PLEDGE OF STATE'S FULL FAITH AND CREDIT. 2-55 (a) The commission may guarantee on behalf of the state the 2-56 payment of any obligations and credit agreements issued under 2-57 Section 201.943 by pledging the full faith and credit of the state 2-58 to the payment of the obligations and credit agreements in the 2-59 event the revenue and money dedicated under Section 201.945 or 2-60 other law and on deposit in the fund are insufficient for that 2-61 purpose. 2-62 (b) The exercise of the authority granted by Subsection (a) 2-63 does not modify or relieve the commission from complying with 2-64 Section 201.943(e) or (f) and does not permit the issuance of 2-65 aggregate obligations in an amount exceeding the maximum obligation 2-66 amount. 2-67 (c) If the commission exercises the authority granted by 2-68 Subsection (a), the constitutional appropriation contained in 2-69 Section 49-k(f), Article III, Texas Constitution, shall be 3-1 implemented and observed by all officers of the state during any 3-2 period during which obligations and credit agreements are 3-3 outstanding and unpaid. 3-4 Sec. 201.945. DEDICATION OF REVENUE TO FUND. Annually, out 3-5 of the miscellaneous and general revenue of the state that is not 3-6 dedicated for specific purposes by the constitution, an amount 3-7 determined by the General Appropriations Act is dedicated to the 3-8 fund. 3-9 Sec. 201.946. USE OF MONEY IN FUND. (a) Money in the fund 3-10 may be invested in the investments permitted by law for the 3-11 investment of money on deposit in the state highway fund. 3-12 (b) As a part of its covenants and commitments made in 3-13 connection with the issuance of obligations and the execution of 3-14 credit agreements, the commission may limit the types of 3-15 investments eligible for investment of money in the fund but may 3-16 not expand the types of investments to include any investments that 3-17 are not authorized by Subsection (a). 3-18 (c) To the extent money is on deposit in the fund in amounts 3-19 that are in excess of the money required by the provisions of the 3-20 obligations and credit agreements to be retained on deposit, the 3-21 commission may use the money for any purpose for which obligations 3-22 may be issued under this subchapter. 3-23 SECTION 2. This Act takes effect on the date on which the 3-24 constitutional amendment proposed by the 77th Legislature, Regular 3-25 Session, 2001, creating the Texas Mobility Fund and authorizing 3-26 the issuance of obligations for financing the construction, 3-27 reconstruction, acquisition, and expansion of state highways and 3-28 other mobility projects, takes effect. If that amendment is not 3-29 approved by the voters, this Act has no effect. 3-30 * * * * *