H.B. No. 1546
AN ACT
relating to the administration and use of the Texas rail relocation
and improvement fund and the issuance of obligations for financing
the relocation, construction, reconstruction, acquisition,
improvement, rehabilitation, and expansion of certain rail
facilities.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 201, Transportation Code, is amended by
adding Subchapter O to read as follows:
SUBCHAPTER O. RAIL RELOCATION AND IMPROVEMENT
Sec. 201.971. DEFINITIONS. In this subchapter:
(1) "Comptroller's certification" means:
(A) as to long-term obligations, the
certification made under Section 201.973(e); and
(B) as to short-term obligations, the
certification made under Section 201.973(f).
(2) "Credit agreement" has the meaning assigned by
Section 1371.001, Government Code.
(3) "Fund" means the Texas rail relocation and
improvement fund.
(4) "Long-term obligations" means an issue or series
of obligations the latest scheduled maturity of which is more than
five years.
(5) "Maximum obligation amount" means the maximum
aggregate principal amount of long-term obligations and short-term
obligations that the commission may issue from time to time after
receipt of the applicable comptroller's certification.
(6) "Obligations" means bonds, notes, and other public
securities.
(7) "Rail facility" means real or personal property,
or any interest in that property, that is determined to be necessary
or convenient for the provision of a freight or passenger rail
facility, including commuter rail, intercity rail, and high-speed
rail. The term includes all property or interests necessary or
convenient for the acquiring, providing, using, or equipping of a
rail facility or system, including rights-of-way, trackwork, train
controls, stations, and maintenance facilities.
(8) "Short-term obligations" means an issue or series
of obligations the latest scheduled maturity of which is five years
or less.
(9) "Station" means a passenger or freight service
building, terminal, station, ticketing facility, waiting area,
platform, concession, elevator, escalator, facility for
handicapped access, access road, parking facility for passengers,
baggage handling facility, or local maintenance facility, together
with any interest in real property necessary or convenient for
those items.
Sec. 201.972. ADMINISTRATION OF FUND. The comptroller
shall hold the fund, and the commission, through the department,
shall manage, invest, use, and administer the fund as provided by
this subchapter.
Sec. 201.973. AUTHORITY TO ISSUE OBLIGATIONS; PURPOSES;
LIMITATIONS. (a) Subject to Subsections (e), (f), and (g), the
commission by order or resolution may issue obligations in the name
and on behalf of the state and the department and may enter into
credit agreements related to the obligations. The obligations may
be issued in multiple series and issues from time to time in an
aggregate amount not exceeding the maximum obligation amount. The
obligations may be issued on and may have the terms and provisions
the commission determines appropriate and in the interests of the
state. The obligations may be issued as long-term obligations,
short-term obligations, or both. The latest scheduled maturity of
an issue or series of obligations may not exceed 30 years.
(b) Obligations must be secured by and payable from a pledge
of and lien on all or part of the money in the fund, including the
revenues of the state dedicated or appropriated for deposit to the
fund. Obligations may be additionally secured by and payable from
credit agreements. The commission may pay amounts due on the
obligations from discretionary money available to it that is not
dedicated to or appropriated for other specific purposes.
(c) The commission may create within the fund accounts,
reserves, and subfunds for purposes the commission finds
appropriate and necessary.
(c-1) If proceeds of obligations are to be used for a
project located in the planning area of a metropolitan planning
organization, the project must first be approved by the policy
board of the metropolitan planning organization.
(d) Obligations may be issued for one or more of the
following purposes:
(1) to pay all or part of the costs of relocating,
constructing, reconstructing, acquiring, improving,
rehabilitating, or expanding rail facilities owned or to be owned
by the department, including any necessary design, in the manner
and locations determined by the commission that according to
conclusive findings of the commission have an expected useful life,
without material repair, of not less than 10 years;
(2) to provide participation by the state in the
payment of part of the costs of relocating, constructing,
reconstructing, acquiring, improving, rehabilitating, or expanding
publicly or privately owned rail facilities, including any
necessary design, if the commission determines that the project
will be in the best interests of the state in its major goal of
improving the mobility of the residents of the state and will:
(A) relieve congestion on public highways;
(B) enhance public safety;
(C) improve air quality; or
(D) expand economic opportunity;
(3) to create debt service reserve accounts;
(4) to pay interest on obligations for a period of not
longer than two years;
(5) to refund or cancel outstanding obligations; and
(6) to pay the commission's costs of issuance.
(d-1) The fund may also be used to provide a method of
financing the construction of railroad underpasses and overpasses,
if the construction is part of the relocation of a rail facility.
(d-2) Proceeds of obligations may not be used to relocate an
existing rail line unless the governing bodies of a majority of the
total number of counties and municipalities in which the relocated
rail line will be located have first approved the relocation.
(e) Long-term obligations in the amount proposed to be
issued by the commission may not be issued unless the comptroller
projects in a comptroller's certification that the amount of money
dedicated to the fund pursuant to Section 49-o(d), Article III,
Texas Constitution, and required to be on deposit in the fund
pursuant to Section 49-o(e), Article III, Texas Constitution, and
the investment earnings on that money, during each year of the
period during which the proposed obligations are scheduled to be
outstanding will be equal to at least 110 percent of the
requirements to pay the principal of and interest on the proposed
long-term obligations during that year.
(f) Short-term obligations in the amount proposed by the
commission may not be issued unless the comptroller, in a
comptroller's certification:
(1) assumes that the short-term obligations will be
refunded and refinanced to mature over a 20-year period with level
debt service requirements and bearing interest at then current
market rates, as determined by the comptroller; and
(2) projects that the amount of money dedicated to the
fund pursuant to Section 49-o(d), Article III, Texas Constitution,
and required to be on deposit in the fund pursuant to Section
49-o(e), Article III, Texas Constitution, and the investment
earnings on that money, during each year of the assumed 20-year
period will be equal to at least 110 percent of the requirements to
pay the principal of and interest on the proposed refunding
obligations during that year.
(g) The commission may agree to further restrictions in
connection with the issuance of obligations and may retain
independent professional consultants to make projections in
addition to, but not instead of, those of the comptroller if
required as a prerequisite to the issuance of the obligations.
(h) The commission has all powers necessary or appropriate
to carry out this subchapter and to implement Section 49-o, Article
III, Texas Constitution, including the powers granted to other
bond-issuing governmental agencies and units and to nonprofit
corporations by Chapters 1201, 1207, and 1371, Government Code.
(i) As required by Section 49-o(g), Article III, Texas
Constitution, proceedings authorizing obligations and related
credit agreements to be issued and executed under this subchapter
shall be submitted to the attorney general for approval as to their
legality. If the attorney general finds that they will be issued in
accordance with this subchapter and other applicable law, the
attorney general shall approve them, and, after payment by the
purchasers of the obligations in accordance with the terms of sale
and after execution and delivery of the related credit agreements,
the obligations and related credit agreements are incontestable for
any cause.
(j) A comptroller's certification under this section must
be based on economic data, forecasting methods, and projections
that the comptroller determines are reliable. In determining the
principal and interest requirements on outstanding and proposed
obligations, and subject to the express limitations of this
subchapter and Section 49-o, Article III, Texas Constitution, the
comptroller shall rely on the assumptions included in the
resolutions authorizing the obligations for the computation of debt
service.
(k) The holders of obligations and the counterparties to
credit agreements have the rights granted in Section 49-o(i),
Article III, Texas Constitution.
Sec. 201.974. PLEDGE OF STATE'S FULL FAITH AND CREDIT. (a)
The commission may guarantee on behalf of the state the payment of
any obligations and credit agreements issued under Section 201.973
by pledging the full faith and credit of the state to the payment of
the obligations and credit agreements in the event the revenue and
money dedicated to the fund pursuant to Section 49-o(d), Article
III, Texas Constitution, and on deposit in the fund pursuant to
Section 49-o(e), Article III, Texas Constitution, are insufficient
for that purpose.
(b) The exercise of the authority granted by Subsection (a)
does not modify or relieve the commission from complying with
Section 201.973(e) or (f) and does not permit the issuance of
aggregate obligations in an amount exceeding the maximum obligation
amount.
(c) If the commission exercises the authority granted by
Subsection (a), the constitutional appropriation contained in
Section 49-o(f), Article III, Texas Constitution, shall be
implemented and observed by all officers of the state during any
period during which obligations and credit agreements are
outstanding and unpaid.
Sec. 201.975. DEDICATION OF REVENUE TO FUND. Annually, the
revenue of the state that is dedicated or appropriated to the fund
pursuant to Section 49-o(d), Article III, Texas Constitution, shall
be deposited to the fund in accordance with Section 49-o(e),
Article III, Texas Constitution.
Sec. 201.976. INVESTMENT AND USES OF MONEY IN FUND. (a)
Money in the fund may be invested in the investments permitted by
law for the investment of money on deposit in the state highway
fund.
(b) As a part of its covenants and commitments made in
connection with the issuance of obligations and the execution of
credit agreements, the commission may limit the types of
investments eligible for investment of money in the fund but may not
expand the types of investments to include any investments that are
not authorized by Subsection (a).
(c) Income received from the investment of money in the fund
shall be deposited in the fund, subject to requirements that may be
imposed by the proceedings authorizing obligations to protect the
tax-exempt status of interest payable on the obligations under the
Internal Revenue Code of 1986.
(d) To the extent money is on deposit in the fund in amounts
that are in excess of the money required by the proceedings
authorizing the obligations and credit agreements to be retained on
deposit, the commission may use the money for any purpose for which
obligations may be issued under this subchapter.
Sec. 201.977. STRATEGIC PLAN. The commission may not issue
obligations under this subchapter before the department has
developed a strategic plan that outlines how the money will be used
and the benefit the state will derive from use of money in the fund.
Sec. 201.978. ACQUISITION AND DISPOSAL OF PROPERTY. (a)
The department may acquire by purchase property or an interest in
property necessary or convenient for one or more of the purposes for
which obligations may be issued under Section 201.973(d).
(b) Property acquired under Subsection (a) may be used for
any transportation purpose.
(c) Notwithstanding Chapter 202, the department may sell or
lease property acquired under Subsection (a) that is no longer
needed for a transportation purpose. Revenue from a sale or lease
shall be deposited in the fund.
SECTION 2. This Act takes effect on the date on which the
constitutional amendment proposed by the 79th Legislature, Regular
Session, 2005, creating the Texas rail relocation and improvement
fund and authorizing grants of money and issuance of obligations
for financing the relocation, construction, reconstruction,
acquisition, improvement, rehabilitation, and expansion of rail
facilities takes effect. If that amendment is not approved by the
voters, this Act has no effect.
______________________________ ______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 1546 was passed by the House on April
27, 2005, by the following vote: Yeas 137, Nays 5, 2 present, not
voting; and that the House concurred in Senate amendments to H.B.
No. 1546 on May 27, 2005, by the following vote: Yeas 142, Nays 0,
2 present, not voting.
______________________________
Chief Clerk of the House
I certify that H.B. No. 1546 was passed by the Senate, with
amendments, on May 25, 2005, by the following vote: Yeas 31, Nays
0.
______________________________
Secretary of the Senate
APPROVED: __________________
Date
__________________
Governor