By: Carona, et al. S.B. No. 263

Substitute the following for S.B. No. 263:

By: Pickett C.S.S.B. No. 263

A BILL TO BE ENTITLED

AN ACT

relating to the issuance by the Texas Transportation Commission of general obligation bonds for highway improvement projects.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Subchapter A, Chapter 222, Transportation Code, is amended by adding Section 222.004 to read as follows:

Sec. 222.004. GENERAL OBLIGATION BONDS FOR HIGHWAY IMPROVEMENT PROJECTS. (a) In this section:

(1) "Bonds" means bonds, notes, and other public securities.

(2) "Credit agreement" has the meaning assigned by Section 1371.001, Government Code.

(3) "Improvement" includes the design of a highway, the acquisition of a highway, the construction of a highway, the major maintenance of a highway, and the acquisition of highway rights-of-way.

(b) The commission by order or resolution may issue general obligation bonds for the purposes stated in this section. The aggregate principal amount of the bonds may not exceed the amount specified by Section 49-p(a), Article III, Texas Constitution.

(c) The commission may enter into credit agreements relating to the bonds. A credit agreement entered into under this section may be secured by and payable from the same sources as the bonds.

(d) The bonds shall be executed in the form, on the terms, and in the denominations, bear interest, and be issued in installments as prescribed by the commission, and must mature not later than 30 years after their dates of issuance, subject to any refundings or renewals. The bonds may be issued in multiple series and issues from time to time and may include any provision the commission determines appropriate and in the interest of this state.

(e) The commission has any power necessary or appropriate to carry out this section or to implement Section 49-p, Article III, Texas Constitution, including each power granted to other governmental units or agencies authorized to issue bonds or to a nonprofit corporation by Chapter 1201, 1207, or 1371, Government Code.

(f) The bonds, the record of the proceedings that authorize the bonds, and any related credit agreement shall be submitted to the attorney general for approval as to their legality. If the attorney general finds that the bonds will be issued in accordance with this section and other applicable law, the attorney general shall approve the bonds. After payment by the purchasers of the bonds in accordance with the terms of sale and the execution and delivery of any related credit agreement, the bonds and the related credit agreement are incontestable for any cause.

(g) Bonds may be issued for one or more of the following purposes:

(1) to pay all or part of the costs of a highway improvement project;

(2) to pay:

(A) the costs of administering a project authorized under this section;

(B) the cost or expense of the issuance of the bonds; or

(C) all or part of a payment owed or to be owed under a credit agreement;

(3) to provide money for deposit to the credit of the Texas Transportation Revolving Fund or a similar revolving fund authorized by law, to be used to make loans for highway improvement projects as provided by law; and

(4) to provide money to be used to finance projects authorized by Section 222.104.

(h) Proceeds from the sale of the bonds may not be spent or used for a purpose authorized by this section unless the legislature has appropriated the proceeds.

(i) Ten percent of the proceeds from the sale of the bonds must be used for the sole purpose of financing projects authorized by Section 222.104. Bond proceeds dedicated by this subsection shall be deposited to the credit of a separate account in the general revenue fund created for the deposit of money to be used to finance projects authorized by Section 222.104.

(j) The comptroller shall pay the principal of the bonds as the bonds mature and the interest as it becomes payable and shall pay any cost related to the bonds that becomes due, including a payment under a credit agreement.

(k) The commission shall make a good faith effort to recruit individuals who are in the private sector and described by Section 201.403 to underwrite the issuance of bonds under this section.

SECTION 2. This Act takes effect immediately if it receives a vote of two-thirds of all the members elected to each house, as provided by Section 39, Article III, Texas Constitution. If this Act does not receive the vote necessary for immediate effect, this Act takes effect September 1, 2009.