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78R1758 DWS-D

By:  Lucio                                                        S.B. No. 410



A BILL TO BE ENTITLED

AN ACT

relating to the financing and construction of highways.                       
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.   Subchapter B, Chapter 222, Transportation Code, 
is amended by adding Section 222.035 to read as follows:
	Sec. 222.035.  ISSUANCE OF GRANT ANTICIPATION REVENUE 
BONDS.  (a)  The commission may issue bonds secured by a pledge of 
and payable from:
		(1)  revenue received or to be received from the 
federal government that is available for the payment of bonds and 
bond-related costs under 23 U.S.C. Section 122 and its subsequent 
amendments;
		(2)  other revenue deposited in the state highway fund; 
or           
		(3)  a combination of those sources.                                   
	(b)  Proceeds from the sale of bonds issued under this 
section shall be used to fund improvements to the state highway 
system. The commission, in conjunction with the Bond Review Board, 
shall select the improvements to be funded considering the 
following criteria:
		(1)  potential  cost savings, economic and 
environmental benefits, and other benefits associated with 
completing the project earlier than would be possible using 
traditional methods of funding;
		(2)  the effect on the state's transportation system; 
and            
		(3)  any possible effect on evaluation of the state's 
credit.        
	(c)  The proceeds of bonds issued under this section may not 
be used for any purpose other than the purposes for which federal 
revenues are dedicated under Section 7-b, Article VIII, Texas 
Constitution.
	(d)  The commission may enter into bond enhancement 
agreements relating to the bonds authorized by this section.  The 
agreements may be secured by and made payable from the same sources 
as the bonds.
	(e)  Bonds issued under this section must mature not later 
than 15 years after their date.
	(f)  Bonds issued and bond enhancement agreements entered 
into under this section may not have a principal amount or terms 
that, at the time of the issuance or agreement, are expected to 
cause expenditures with respect to the obligations to exceed 10 
percent of the federal highway obligation authority anticipated to 
be received by this state in any year payments are to be due on the 
obligations.
	(g)  The commission may not issue the bonds without the 
approval of the Bond Review Board.
	SECTION 2.   This Act takes effect on the date on which the 
constitutional amendment proposed by the 78th Legislature, Regular 
Session, 2003, that authorizes the legislature to provide for the 
issuance of bonds for improvements to the state highway system, 
takes effect.  If that amendment is not approved by the voters, this 
Act has no effect.