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By: Pickett, et al. (Senate Sponsor - Lucio) H.B. No. 471
(In the Senate - Received from the House May 1, 2003;
May 6, 2003, read first time and referred to Committee on
Infrastructure Development and Security; May 24, 2003, reported
adversely, with favorable Committee Substitute by the following
vote: Yeas 7, Nays 0; May 24, 2003, sent to printer.)
COMMITTEE SUBSTITUTE FOR H.B. No. 471 By: Ogden
A BILL TO BE ENTITLED
AN ACT
relating to the borrowing of money and the issuance of notes and
bonds and other public securities secured by the state highway fund
by the Texas Transportation Commission; making an appropriation.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter C, Chapter 201, Transportation Code,
is amended by adding Section 201.115 to read as follows:
Sec. 201.115. BORROWING MONEY. (a) The commission may
borrow money from any source to carry out the functions of the
department.
(b) A loan under this section may be in the form of an
agreement, note, contract, or other form as determined by the
commission and may contain any provisions the commission considers
appropriate, except:
(1) the term of the loan may not exceed two years;
(2) the amount of the loan, combined with any amounts
outstanding on other loans under this section, may not exceed the
average monthly revenue deposited to the state highway fund for the
12 months preceding the month of the loan; and
(3) the loan may not create general obligation of the
state and is payable only as authorized by legislative
appropriation.
(c) If the commission borrows money by the issuance of
notes, the notes shall be issued in accordance with the
requirements of Subchapter N, except that the maturity limitations
in Subsection (b) supersede the maturity limitations in Section
201.963.
(d) Notwithstanding Section 222.001, money in the state
highway fund may be used to repay a loan under this section, if
appropriated by the legislature for that purpose.
SECTION 2. Chapter 201, Transportation Code, is amended by
adding Subchapter N to read as follows:
SUBCHAPTER N. HIGHWAY TAX AND REVENUE ANTICIPATION NOTES
Sec. 201.961. DEFINITIONS. In this subchapter:
(1) "Committee" means the cash management committee
described in Section 404.122, Government Code.
(2) "Credit agreement" has the meaning assigned by
Section 1208.001, Government Code.
(3) "Notes" means tax and revenue anticipation notes
issued under this subchapter. The term includes any obligation
under a credit agreement.
Sec. 201.962. NOTES AUTHORIZED; COMMITTEE APPROVAL. (a) In
anticipation of a temporary cash flow shortfall in the state
highway fund during any fiscal year, the commission, subject to the
approval of the committee, may issue, sell, and deliver tax and
revenue anticipation notes on behalf of the state.
(b) Before issuing the notes, the commission shall submit to
the committee a state highway fund cash flow shortfall forecast
containing a detailed report of estimated revenue and expenditures.
Based on the forecast, the committee may approve the issuance of
notes in an amount not to exceed the maximum temporary cash flow
shortfall forecast.
Sec. 201.963. ISSUANCE OF NOTES. (a) The commission,
consistent with the committee's determination under Section
201.962, may issue, sell, and deliver the notes.
(b) Notes issued under this subchapter are not debts of the
state and may be used only to make up a temporary shortfall in the
state highway fund's cash flow. All notes must mature and be paid
in full during the fiscal biennium in which they were issued.
(c) Except as otherwise provided by this subsection, the
proceeds of the notes shall be deposited in a special fund in the
state treasury known as the highway tax and revenue anticipation
note fund. Notwithstanding any other provision of law, depository
interest shall be credited to the fund. The department shall
transfer the net proceeds from the fund to the state highway fund as
necessary to pay authorized expenditures. The comptroller may
invest funds in the highway tax and revenue anticipation note fund
as authorized under Section 404.024, Government Code. Proceeds of
a credit agreement may be deposited as provided by the order
authorizing the credit agreement.
(d) The commission may exercise the powers granted to the
governing body of an issuer in connection with the issuance of
obligations under Chapter 1371, Government Code, to the extent not
inconsistent with this subchapter. The notes are not subject to
review by the Bond Review Board but are subject to review and
approval by the attorney general as provided by Chapter 1371,
Government Code. On request, the comptroller may assist the
commission with the issuance of notes under this subchapter.
(e) The commission is an authorized issuer under Chapter
1201, Government Code, and that chapter applies to notes authorized
by this subchapter.
(f) Amounts in the highway tax and revenue anticipation note
fund may be pledged to secure the payment of the notes and
performance of obligations under credit agreements relating to the
notes and may be used to pay issuance costs and required rebates to
the federal government.
Sec. 201.964. FUND TRANSFERS; INTEREST; PAYMENT OF NOTES.
(a) The department periodically shall transfer cash received in the
state highway fund to the highway tax and revenue anticipation note
fund to ensure the timely payment of the notes.
(b) On payment of all outstanding notes, rebates to the
federal government, and costs of issuance, the department shall
transfer to the state highway fund any amounts remaining in the
highway tax and revenue anticipation note fund. If amounts
credited to the highway tax and revenue anticipation note fund are
insufficient to pay principal, any premium, interest, issuance
costs, and any required rebate to the federal government, amounts
in the state highway fund are available for appropriation by the
legislature to make those payments.
SECTION 3. Subchapter A, Chapter 222, Transportation Code,
is amended by adding Section 222.003 to read as follows:
Sec. 222.003. ISSUANCE OF BONDS SECURED BY STATE HIGHWAY
FUND. (a) The commission may issue bonds and other public
securities secured by a pledge of and payable from revenue
deposited to the credit of the state highway fund.
(b) The aggregate principal amount of the bonds and other
public securities that are issued may not exceed $10 billion. The
commission may only issue bonds or other public securities in an
aggregate principal amount of not more than $1 billion each year.
(c) Proceeds from the sale of bonds and other public
securities issued under this section shall be used to fund state
highway improvement projects. Proceeds may be used only to
provide:
(1) funding for projects that:
(A) allow the department to draw down additional
federal-aid highway funds;
(B) are eligible for expedited contracting under
Subchapter C, Chapter 223;
(C) facilitate, for the purpose of reducing
unemployment or underemployment, the retention of businesses in
this state or the ability to provide an incentive for new businesses
to locate in this state;
(D) reduce accidents or correct or improve
hazardous locations on the state highway system; or
(E) are included in the Texas Highway Trunk
System; or
(2) short-term financing of turnpike project costs
that are incurred before the project is open to traffic and begins
generating revenue, if the commission determines that issuing
short-term bonds will reduce total project costs.
(d) In this section, "Texas Highway Trunk System" means a
rural network of four-lane or better divided roadways that will
serve as a principal connector of all Texas cities with over 20,000
population, as well as major ports and points of entry.
(e) Of the aggregate principal amount of bonds and other
public securities that may be issued under this section, the
commission shall issue bonds or other public securities in an
aggregate principal amount of $2 billion to fund projects eligible
under Subsection (c)(1)(D). The commission by rule shall prescribe
criteria for selecting projects eligible for funding under this
section. In establishing criteria for projects eligible under
Subsection (c)(1)(D), the commission shall consider accident data,
traffic volume, pavement geometry, and other conditions that can
create or exacerbate hazardous roadway conditions.
(f) The proceeds of bonds and other public securities issued
under this section may not be used for any purpose other than any
costs related to the bonds and other public securities and the
purposes for which revenues are dedicated under Section 7-a,
Article VIII, Texas Constitution. The proceeds of bonds and other
public securities issued under this section may not be used for the
construction of a state highway or other facility on the
Trans-Texas Corridor. For purposes of this section, the
"Trans-Texas Corridor" means the statewide system of multimodal
facilities under the jurisdiction of the department that is
designated by the commission, notwithstanding the name given to
that corridor.
(g) The commission may enter into credit agreements, as
defined by Chapter 1371, Government Code, relating to the bonds and
other public securities authorized by this section. The agreements
may be secured by and payable form the same sources as the bonds and
other public securities.
(h) All laws affecting the issuance of bonds and other
public securities by governmental entities, including Chapters
1201, 1202, 1204, 1207, 1231, and 1371, Government Code, apply to
the issuing of bonds and other public securities and the entering
into of credit agreements under this section.
(i) The proceeds of bonds and other public securities issued
under this section may be used to:
(1) finance other funds relating to the public
security, including debt service reserve and contingency; and
(2) pay the cost or expense of the issuance of the
public security.
(j) Bonds and other public securities and credit agreements
authorized by this section may not have a principal amount or terms
that, at the time the bonds or other public securities are issued or
the agreements entered into, are expected by the commission to
cause annual expenditures with respect to the obligations to exceed
10 percent of the amount deposited to the credit of the state
highway fund in the immediately preceding year.
(k) Bonds and other public securities issued under this
section may be sold in such manner and subject to such terms and
provisions as set forth in the order authorizing their issuance,
and such bonds and other public securities must mature not later
than 20 years after their dates of issuance, subject to any
refundings or renewals.
(l) The comptroller shall withdraw from the state highway
fund and forward at the direction of the commission to another
person the amounts as determined by the commission to permit timely
payment of:
(1) the principal of and interest on the bonds and
other public securities that mature or become due; and
(2) any cost related to the bonds and other public
securities that become due, including payments under credit
agreements.
(m) The commission may not fund a project unless the
commission makes a formal finding by minute order that the funding
of the project will satisfy the requirements of Subsection (c).
SECTION 4. For the fiscal biennium beginning September 1,
2003, the Texas Department of Transportation is appropriated all
money deposited in the highway tax and revenue anticipation note
fund for the purposes specified in Subchapter N, Chapter 201,
Transportation Code, as added by this Act, during that biennium. To
the extent that money deposited into the highway tax and revenue
anticipation note fund is insufficient to pay the principal of, any
premium or interest on, or costs of issuance relating to the notes,
and rebates to the federal government, the department is
appropriated from the state highway fund the amounts necessary for
the full repayment of all principal of, any premium or interest on,
or costs of issuance relating to the notes, and rebates to the
federal government.
SECTION 5. (a) Sections 1 and 3 of this Act take effect on
the date on which the constitutional amendment proposed by the 78th
Legislature, Regular Session, 2003, providing for authorization of
the borrowing of money on a short-term basis by a state
transportation agency for transportation-related projects and the
issuance of bonds and other public securities secured by the state
highway fund takes effect. If that amendment is not approved by the
voters, Section 1 and 3 of this Act have no effect.
(b) Sections 2 and 4 of this Act take effect September 1,
2003.
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