1-1     By:  Lucio, et al.                                     S.B. No. 241
 1-2           (In the Senate - Filed January 12, 2001; January 16, 2001,
 1-3     read first time and referred to Committee on Business and Commerce;
 1-4     March 19, 2001, reported adversely, with favorable Committee
 1-5     Substitute by the following vote:  Yeas 5, Nays 0; March 19, 2001,
 1-6     sent to printer.)
 1-7     COMMITTEE SUBSTITUTE FOR S.B. No. 241                    By:  Lucio
 1-8                            A BILL TO BE ENTITLED
 1-9                                   AN ACT
1-10     relating to the financing and construction of highways.
1-11           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-12           SECTION 1.  Subchapter B, Chapter 222, Transportation Code,
1-13     is amended by adding Section 222.035 to read as follows:
1-14           Sec. 222.035.  ISSUANCE OF GRANT ANTICIPATION REVENUE BONDS.
1-15     (a)  The commission may issue bonds secured by a pledge of and
1-16     payable from:
1-17                 (1)  revenue received or to be received from the
1-18     federal government that is available for the payment of bonds and
1-19     bond-related costs under 23 U.S.C. Section 122 and its subsequent
1-20     amendments;
1-21                 (2)  other revenue deposited in the state highway fund;
1-22     or
1-23                 (3)  a combination of those sources.
1-24           (b)  Proceeds from the sale of bonds issued under this
1-25     section shall be used to fund improvements to the state highway
1-26     system.  The commission shall select the improvements to be funded
1-27     considering the following criteria:
1-28                 (1)  potential  cost savings, economic and
1-29     environmental benefits, and other benefits associated with
1-30     completing the project earlier than would be possible using
1-31     traditional methods of funding; and
1-32                 (2)  the effect on the state's transportation system.
1-33           (c)  The proceeds of bonds issued under this section may not
1-34     be used for any purpose other than the purposes for which federal
1-35     revenues are dedicated under Section 7-b, Article VIII, Texas
1-36     Constitution.
1-37           (d)  The commission may enter into bond enhancement
1-38     agreements relating to the bonds authorized by this section.  The
1-39     agreements may be secured by and made payable from the same sources
1-40     as the bonds.
1-41           (e)  Bonds issued under this section must mature not later
1-42     than 15 years after their date.
1-43           (f)  Bonds issued and bond enhancement agreements entered
1-44     into under this section may not have a principal amount or terms
1-45     that, at the time of the issuance or agreement, are expected to
1-46     cause expenditures with respect to the obligations to exceed five
1-47     percent of the federal highway obligation authority anticipated to
1-48     be received by this state in any year payments are to be due on the
1-49     obligations.
1-50           (g)  The commission may not issue the bonds without the
1-51     approval of the Bond Review Board.
1-52           (h)  Before the issuance of bonds or the entering into of a
1-53     bond enhancement agreement, the proceedings relating to the
1-54     issuance or agreement shall be submitted to the attorney general
1-55     for review and approval.  If the attorney general finds that the
1-56     proceedings conform to law, the attorney general shall approve
1-57     them.  After this approval the bonds or agreements are
1-58     incontestable.
1-59           (i)  The comptroller shall withdraw from the state highway
1-60     fund and forward to the commission or another person at the
1-61     direction of the commission the amounts as determined by the
1-62     commission to permit timely payment of:
1-63                 (1)  the principal of and interest on the bonds that
1-64     mature or become due; and
 2-1                 (2)  any cost related to the bonds that becomes due,
 2-2     including payments under bond enhancement agreements, eligible for
 2-3     reimbursement under federal law.
 2-4           SECTION 2.  This Act takes effect on the date on which the
 2-5     constitutional amendment proposed by the 77th Legislature, Regular
 2-6     Session, 2001, that authorizes the legislature to provide for the
 2-7     issuance of bonds for improvements to the state highway system
 2-8     takes effect.  If that amendment is not approved by the voters,
 2-9     this Act has no effect.
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