By: Carona, Shapiro S.B. No. 1350
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the creation, administration, financing, and use of a
  Texas Transportation Revolving Fund; granting the authority to
  issue bonds.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Chapter 222, Transportation Code, is amended by
  adding Subchapter F to read as follows:
  SUBCHAPTER F. TEXAS TRANSPORTATION REVOLVING FUND
         Sec. 222.131.  DEFINITIONS. In this subchapter:
               (1)  "Bonds" means bonds, notes, and other public
  securities.
               (2)  "Credit agreement" has the meaning assigned by
  Section 1371.001, Government Code.
               (3)  "Fund" means the Texas Transportation Revolving
  Fund.
               (4)  "Fund revenue bonds" means bonds issued under
  Section 222.135.
               (5)  "Highway improvement project" includes
  acquisition of the highway, construction, reconstruction, and
  major maintenance, including any necessary design, and the
  acquisition of rights-of-way.
               (6)  "Transit provider" has the meaning assigned by
  Section 370.003.
               (7)  "Transportation project" means a tolled or
  nontolled highway improvement project.
         Sec. 222.132.  CREATION OF FUND. The Texas Transportation
  Revolving Fund is created as a fund held in the Texas Treasury
  Safekeeping Trust Company.
         Sec. 222.133.  ADMINISTRATION OF FUND. (a)  The commission,
  through the department, shall manage, invest, use, administer, and
  provide financial assistance from the fund as provided by this
  subchapter.
         (b)  The commission may create within the fund one or more
  accounts or subaccounts as determined appropriate and necessary by
  the commission.
         (c)  The commission shall prepare and file annually with the
  governor, the lieutenant governor, and the Legislative Budget Board
  a report providing information on the operation of the fund,
  including:
               (1)  the amounts and sources of money deposited in the
  fund during the year;
               (2)  investments and returns on investments of money in
  the fund;
               (3)  loans made from the fund;
               (4)  other financial assistance provided from the fund;
               (5)  the status of any defaults on repayment of loans or
  other financial assistance provided from the fund; and
               (6)  the details of any transportation project for
  which financial assistance is received from the fund, including the
  identity of any highway directly affected by the project, and the
  degree to which the project is designed to reduce congestion,
  improve traffic safety, and enhance connectivity.
         Sec. 222.134.  SOURCES OF MONEY DEPOSITED IN FUND. The
  commission may deposit in the fund money derived from any source
  available to the commission, including:
               (1)  if appropriated by the legislature for that
  purpose:
                     (A)  the proceeds of bonds issued under Section
  222.003;
                     (B)  the proceeds of bonds authorized by Section
  49-p, Article III, Texas Constitution, if the law providing for the
  issuance of the bonds does not prohibit the deposit of the proceeds
  in the fund;
                     (C)  money provided by the commission from the
  state highway fund;
                     (D)  money provided by the commission from the
  Texas Mobility Fund that is in excess of the money required to be on
  deposit in the Texas Mobility Fund by the proceedings authorizing
  Texas Mobility Fund bonds and credit agreements; and
                     (E)  other direct appropriations;
               (2)  repayments of principal and interest on loans made
  under Section 222.137;
               (3)  the proceeds from the sale of loans under Section
  222.140;
               (4)  the proceeds from the sale of fund revenue bonds;
  and
               (5)  gifts and grants.
         Sec. 222.135.  FUND REVENUE BONDS. (a)  The commission may
  issue, sell, and deliver fund revenue bonds for the purpose of
  providing money for the fund.
         (b)  Fund revenue bonds are special obligations of the
  commission payable from the repayment of loans from the fund and
  other money on deposit in the fund as the commission may designate.
         (c)  Fund revenue bonds do not constitute a debt of the state
  or a pledge of the faith and credit of the state.
         (d)  The commission by order or resolution may issue fund
  revenue bonds in the name and on behalf of the state and the
  department and may enter into credit agreements related to the
  bonds. The bonds may be issued in multiple series and issues from
  time to time and may be issued on the terms and with the provisions
  the commission determines appropriate and in the interests of the
  state.
         (e)  The commission has all powers necessary or appropriate
  to carry out this section, including the powers granted to other
  bond-issuing governmental agencies and units and to nonprofit
  corporations by Chapters 1201, 1207, and 1371, Government Code.
         (f)  Before the issuance of fund revenue bonds or credit
  agreements, the commission shall submit the record of proceedings
  of the commission authorizing the issuance, execution, and delivery
  of the bonds or credit agreement and any contract providing revenue
  or security to pay the bonds or credit agreement to the attorney
  general for review. If the attorney general finds that the
  proceedings authorizing a bond or credit agreement and any bonds
  authorized in the proceedings conform to the requirements of the
  Texas Constitution and this subchapter, the attorney general shall
  approve the proceedings and the bonds and deliver to the
  comptroller for registration a copy of the attorney general's legal
  opinion stating that approval and the record of proceedings. After
  approval, the bonds or credit agreement may be executed and
  delivered, exchanged, or refinanced from time to time in accordance
  with those authorizing proceedings.
         (g)  If the proceedings and any bonds authorized in the
  proceedings are approved by the attorney general and registered by
  the comptroller as provided above, the bonds or credit agreement,
  as applicable, or a contract providing revenue or security included
  in or executed and delivered according to the authorizing
  proceedings are incontestable in a court or other forum and are
  valid, binding, and enforceable according to their terms.
         (h)  The proceeds from the sale of fund revenue bonds may be
  used to finance other funds or accounts relating to the bonds or
  credit agreement, including a debt service reserve fund, and to pay
  the costs of issuance. All remaining proceeds received from the
  sale of the bonds shall be deposited in the fund and invested and
  used as provided by this subchapter.
         Sec. 222.136.  INVESTMENT OF MONEY IN THE FUND. (a)  Money
  in the fund may be invested as provided by Chapter 2256, Government
  Code, except that the proceeds of bonds deposited in the fund under
  Section 222.134 shall be subject to any limitations contained in
  the documents authorizing the issuance of the bonds.
         (b)  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 bonds issued to provide
  money for deposit in the fund that are necessary to protect the
  tax-exempt status of interest payable on the bonds in accordance
  with applicable law of the United States concerning federal income
  taxation of interest on the bonds. Investment income shall be
  deposited in an account or subaccount in the fund as determined by
  the department.
         Sec. 222.137.  USES OF MONEY IN THE FUND. (a)  Except as
  otherwise provided by this section, the commission may use money
  held in the fund to provide financial assistance to a public entity,
  including the department, for the costs of a transportation project
  by:
               (1)  making loans, including through the purchase of
  obligations of the public entity;
               (2)  providing liquidity or credit enhancement,
  including through the agreement to loan to or purchase bonds,
  notes, or other obligations from a public entity;
               (3)  serving as a reserve fund established in
  connection with debt financing by the public entity;
               (4)  providing capitalized interest for debt financing
  by the public entity; or
               (5)  providing a guarantee of the payment of the costs
  of operations and maintenance of a transportation project.
         (b)  The proceeds of bonds authorized by Section 49-p,
  Article III, Texas Constitution, or issued under Section 222.003
  may only be used to provide financial assistance for highway
  improvement projects, subject to any limitations provided by law.
         (c)  Money from the state highway fund may only be used for
  the purposes for which revenues are dedicated under Section 7-a,
  Article VIII, Texas Constitution.
         (d)  Money from the Texas Mobility Fund may only be used to
  provide financial assistance for state highway improvement
  projects, publicly owned toll roads, and public transportation
  projects, whether on or off of the state highway system, subject to
  any limitations provided by law.
         (e)  Money in the fund may be used to pay debt service on fund
  revenue bonds.
         (f)  The commission may require the payment of reasonable
  fees and other amounts by a public entity for all forms of financial
  assistance provided under this section.
         (g)  The department shall monitor the use of financial
  assistance provided to a public entity to ensure the financial
  assistance is used for purposes authorized by law and may audit the
  books and records of a public entity for this purpose.
         Sec. 222.138.  BORROWING FROM THE FUND BY PUBLIC ENTITY.
  (a)  A public entity, including a municipality, county, district,
  authority, agency, department, board, or commission, that is
  authorized by law to construct, maintain, or finance a
  transportation project may borrow money from the fund, including by
  direct loan or other financial assistance from the fund, and may
  enter into any agreement relating to receiving financial assistance
  from the fund.
         (b)  Money received by a public entity under this subchapter
  must be segregated from other funds under the control of the public
  entity and may only be used for purposes authorized by this
  subchapter.
         (c)  To provide for the repayment of a loan or other
  financial assistance, a public entity may:
               (1)  pledge revenues or income from any available
  source;
               (2)  pledge, levy, and collect any taxes, subject to
  any constitutional limitation; or
               (3)  pledge any combination of revenues, income, and
  taxes.
         (d)  This section is wholly sufficient authority for a public
  entity to borrow or otherwise obtain financial assistance from the
  fund as authorized by this subchapter and to pledge revenues,
  income, or taxes, or any combination of revenues, income, and
  taxes, to the repayment of a loan or other financial assistance.
         Sec. 222.139.  REPAYMENT TERMS; DEPOSIT OF REPAYMENTS.
  (a)  For financial assistance that must be repaid, the commission
  shall determine the terms and conditions of the repayment,
  including the interest rates to be charged.
         (b)  The commission may require the entity receiving
  financial assistance that must be repaid to make charges, levy and
  collect taxes, pledge revenues, or otherwise take such action as
  may be necessary to provide for money in an amount sufficient for
  repayment according to the terms agreed on at the time the financial
  assistance is provided.
         (c)  For a tolled highway improvement project, the
  commission, in lieu of requiring the repayment of financial
  assistance and any interest thereon, may require that revenues from
  the project be shared between the entity and the department, and the
  entity and the department may enter into an agreement specifying
  the terms and conditions of the revenue sharing.
         (d)  The department shall deposit in the fund all amounts
  received from repayment of the financial assistance or as a share of
  revenues from a tolled highway improvement project.
         Sec. 222.140.  SALE OF LOANS. (a)  As used in this section,
  "loan" includes any financial assistance that must be repaid or any
  portion of such assistance.
         (b)  The commission may sell any loans made from money in the
  fund and shall deposit the proceeds of the sale in the fund.
         (c)  For any loans to be sold under this section, the
  commission may submit to the attorney general for review and
  approval the related financial assistance agreement, which shall,
  for the purposes of Chapter 1202, Government Code, be considered to
  be a public security, along with the record of proceedings of the
  borrowing entity relating to the agreement. If the attorney
  general approves the agreement, it shall be incontestable in a
  court or other forum and is valid, binding, and enforceable
  according to its terms as provided by Chapter 1202, Government
  Code.
         (d)  The commission must sell the loans using a competitive
  bidding process and at the price and under the terms and conditions
  that it determines to be reasonable.
         (e)  As part of the sales agreement with the purchaser of a
  loan, the commission may agree to perform the functions required to
  enforce the conditions and requirements stated in the loans,
  including the payment of debt service by the borrowing entity.
         (f)  The commission may exercise any powers necessary to
  carry out the authority granted by this section, including the
  authority to contract with any person to accomplish the purposes of
  this section.
         (g)  The commission shall not be liable for the repayment of,
  and may not repay, any loan sold under this section.
         Sec. 222.141.  WAIVER OF SOVEREIGN IMMUNITY. A public
  entity receiving financial assistance under this subchapter and the
  department may agree to waive sovereign immunity to suit for the
  purpose of adjudicating a claim to enforce any of their obligations
  brought by a party for breach of the terms of the financial
  assistance agreement.
         Sec. 222.142.  IMPLEMENTATION BY RULE. (a)  The commission
  shall adopt rules to implement this subchapter, including rules:
               (1)  establishing eligibility and prioritization
  criteria for entities applying for financial assistance from the
  fund and for transportation projects that may receive financial
  assistance from the fund;
               (2)  specifying the method for setting the terms and
  conditions for providing financial assistance from the fund and for
  the repayment of financial assistance from the fund; and
               (3)  establishing procedures for the sale of loans
  originated from amounts on deposit in the fund.
         (b)  The eligibility and prioritization criteria described
  in Subsection (a)(1) shall provide that financial assistance made
  available for the delivery of a transportation project by the
  department may not be in a larger amount or on more favorable terms
  than the financial assistance requested and previously offered for
  the delivery of that transportation project by a public entity, if
  any.
         (c)  The commission shall appoint a rules advisory committee
  to advise the department and the commission on the development of
  the commission's initial rules required by this section. The
  committee must include one or more members representing a local
  toll project entity, as defined in Section 228.0111.  Chapter 2110,
  Government Code, does not apply to the committee.  This subsection
  expires on the date the commission adopts initial rules 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.