By: Lucio, et al. S.B. No. 241 A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to the financing and construction of highways. 1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-4 SECTION 1. Subchapter B, Chapter 222, Transportation Code, 1-5 is amended by adding Section 222.035 to read as follows: 1-6 Sec. 222.035. ISSUANCE OF GRANT ANTICIPATION REVENUE BONDS. 1-7 (a) The commission may issue bonds secured by a pledge of and 1-8 payable from: 1-9 (1) revenue received or to be received from the 1-10 federal government that is available for the payment of bonds and 1-11 bond-related costs under 23 U.S.C. Section 122 and its subsequent 1-12 amendments; 1-13 (2) other revenue deposited in the state highway fund; 1-14 or 1-15 (3) a combination of those sources. 1-16 (b) Proceeds from the sale of bonds issued under this 1-17 section shall be used to fund improvements to the state highway 1-18 system. The commission shall select the improvements to be funded 1-19 considering the following criteria: 1-20 (1) potential cost savings, economic and 1-21 environmental benefits, and other benefits associated with 1-22 completing the project earlier than would be possible using 1-23 traditional methods of funding; and 1-24 (2) the effect on the state's transportation system. 1-25 (c) The proceeds of bonds issued under this section may not 2-1 be used for any purpose other than the purposes for which federal 2-2 revenues are dedicated under Section 7-b, Article VIII, Texas 2-3 Constitution. 2-4 (d) The commission may enter into bond enhancement 2-5 agreements relating to the bonds authorized by this section. The 2-6 agreements may be secured by and made payable from the same sources 2-7 as the bonds. 2-8 (e) Bonds issued under this section must mature not later 2-9 than 15 years after their date. 2-10 (f) Bonds issued and bond enhancement agreements entered 2-11 into under this section may not have a principal amount or terms 2-12 that, at the time of the issuance or agreement, are expected to 2-13 cause expenditures with respect to the obligations to exceed five 2-14 percent of the federal highway obligation authority anticipated to 2-15 be received by this state in any year payments are to be due on the 2-16 obligations. 2-17 (g) The commission may not issue the bonds without the 2-18 approval of the Bond Review Board. 2-19 (h) Before the issuance of bonds or the entering into of a 2-20 bond enhancement agreement, the proceedings relating to the 2-21 issuance or agreement shall be submitted to the attorney general 2-22 for review and approval. If the attorney general finds that the 2-23 proceedings conform to law, the attorney general shall approve 2-24 them. After this approval the bonds or agreements are 2-25 incontestable. 2-26 (i) The comptroller shall withdraw from the state highway 3-1 fund and forward to the commission or another person at the 3-2 direction of the commission the amounts as determined by the 3-3 commission to permit timely payment of: 3-4 (1) the principal of and interest on the bonds that 3-5 mature or become due; and 3-6 (2) any cost related to the bonds that becomes due, 3-7 including payments under bond enhancement agreements, eligible for 3-8 reimbursement under federal law. 3-9 (j) Before each issuance of bonds authorized by this 3-10 section, the commission shall determine the 10-year historic 3-11 average expenditure ratio of nonfederal aid projects to federal aid 3-12 projects and certify to the governor and Legislative Budget Board, 3-13 in a form prescribed by the governor and Legislative Budget Board, 3-14 that the ratio will not be reduced as a result of the proposed 3-15 issuance. 3-16 SECTION 2. This Act takes effect on the date on which the 3-17 constitutional amendment proposed by the 77th Legislature, Regular 3-18 Session, 2001, that authorizes the legislature to provide for the 3-19 issuance of bonds for improvements to the state highway system 3-20 takes effect. If that amendment is not approved by the voters, 3-21 this Act has no effect.