82R13696 T

By: Williams S.B. No. 1395

A BILL TO BE ENTITLED

AN ACT

relating to the administration, financing, and use of the State Infrastructure Bank.

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

SECTION 1. Section 222.071, Transportation Code, is amended to read as follows:

Sec. 222.071. DEFINITIONS. In this subchapter:

(1) "Bank" means the state infrastructure bank account.

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

(3) [(2)] "Construction" has the meaning assigned by 23 U.S.C. Section 101.

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

(5) [(3)] "Federal act" means Section 350 of the National Highway System Designation Act of 1995 (Pub. L. No. 104-59).

(6) [(4)] "Federal-aid highway" has the meaning assigned by 23 U.S.C. Section 101.

(7) [(5)] "Qualified project" includes:

(A) the construction of a federal-aid highway;

(B) a transit project under 49 U.S.C. Sections 5307, 5309, and 5311; [or]

(C) a transportation project; or

(D) [(C)] for the expenditure of secondary funds from a subaccount subject to the federal act, a project eligible for assistance under Title 23 or Title 49, United States Code.

(8) [(6)] "Secondary funds" includes:

(A) the repayment of a loan or other assistance that is provided with money deposited to the credit of the bank; and

(B) investment income generated by secondary funds deposited to the credit of the bank.

(9) "Transportation project" means a tolled or nontolled highway improvement project.

SECTION 2. Section 222.072, Transportation Code, is amended to read as follows:

Sec. 222.072. STATE INFRASTRUCTURE BANK. (a) The state infrastructure bank is an account held in the Texas Treasury Safekeeping Trust Company [state highway fund]. The bank is administered by the commission.

(b) The commission may deposit in the bank money derived from any source available to the commission, including:

(1) federal [Federal] funds received by the state, including funds received under the federal act; [,]

(2) matching state funds in an amount required by the federal [that] act; [,]

(3) if appropriated by the legislature for that purpose:

(A) the proceeds of bonds issued under Section 222.003;

(B) the proceeds of bonds issued under Section 222.004; and

(C) other direct appropriations;

(4) the proceeds of bonds issued under Section 201.943 and 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;

(5) repayments of principal and interest on loans made under Section 222.074;

(6) the proceeds from the sale of loans under Section 222.078;

(7) proceeds from bonds issued under Section 222.075; [,]

(8) secondary funds; and [,]

(9) gifts and grants [other state funds deposited into the bank by order of the commission, and other money received by the state that is eligible for deposit in the bank may be deposited into the bank and used only for the purposes described in this subchapter].

(c) The commission shall prepare and file biennially with the governor, the lieutenant governor, and the Legislative Budget Board a report providing information on the operation of the bank, including:

(1) the amounts and sources of money deposited in the bank during the biennium;

(2) investments and returns on investments of money in the bank during the biennium;

(3) loans made from the bank during the biennium;

(4) other financial assistance provided from the bank during the biennium;

(5) the status of any defaults on repayment of loans or other financial assistance provided from the bank; and

(6) the details of any qualified project for which financial assistance is received from the bank during the biennium, 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.

SECTION 3. Section 222.074, Transportation Code, is amended by amending Subsection (a) and by adding Subsections (d), (e), (f), and (g) to read as follows:

(a) To further a purpose described by Section 222.073, the commission may use money deposited to the credit of the bank to provide financial assistance to a public or private entity, including the department, for a qualified project to:

(1) extend credit by direct loan, including through the purchase of obligations of a public entity;

(2) provide liquidity or credit enhancement, [enhancements] including through the agreement to loan to a public or private entity or to purchase bonds, notes, or other obligations from a public entity;

(3) serve as a capital reserve for bond or debt instrument financing;

(4) subsidize interest rates;

(5) insure the issuance of a letter of credit or credit instrument;

(6) finance a purchase or lease agreement in connection with a transit project;

(7) provide capitalized interest for debt financing by the public or private entity;

(8) providing a guarantee of the payment of the costs of the operation and maintenance of a qualified project by a public entity;

(9) [(7)] provide security for bonds and other debt instruments; [or]

(10) pay the costs of issuing bonds or other debt instruments; or

(11) [(8)] provide methods of leveraging money that have been approved by the United States secretary of transportation and relate to the project for which the assistance is provided.

(d) The proceeds of bonds issued under Section 222.003 or Section 222.004 may only be used to provide financial assistance for highway improvement projects, subject to any limitations provided by law.

(e) 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.

(f) The commission may require a public or private entity to pay an application fee and other reasonable amounts in connection with any request for financial assistance provided from the bank. Revenue generated from payments of fees and other amounts shall be deposited in the state highway fund.

(g) The department shall monitor the use of financial assistance provided to a public or private entity to ensure the financial assistance is used for purposes authorized by law and may audit the books and records of a public or private entity for this purpose.

SECTION 4. Section 222.0745, Transportation Code, is amended to read as follows:

Sec. 222.0745. INCURRENCE OF DEBT BY PUBLIC ENTITY. (a) A public entity in this state, including a municipality, county, district, authority, agency, department, board, or commission, that is authorized by law to construct, maintain, or finance a qualified project may borrow money from the bank, including by direct loan or other financial assistance from the bank, and may enter into any agreement relating to receiving financial assistance from the bank [based on the credit of the public entity].

(b) Money received by a public entity under this subchapter [borrowed under this section] must be segregated from other funds under the control of the public entity and may only be used for purposes authorized by this subchapter [related to a qualified project].

(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 bank 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.

(e) [(c)] The authority granted by this section does not affect the ability of a public entity to incur debt using other statutorily authorized methods.

SECTION 5. Section 222.075, Transportation Code, is amended by amending Subsections (b), (f), (i), and (j) to read as follows:

(b) Except as provided by Subsection (c), the commission may issue revenue bonds or revenue refunding bonds under this section without complying with any other law applicable to the issuance of bonds, and may enter into credit agreements related to the bonds.

(f) The commission may require participants to make charges, levy taxes, or otherwise provide for sufficient money to repay financial assistance provided from the bank, including any [pay] acquired obligations.

(i) Before the issuance of revenue bonds or credit agreements, the commission shall submit the record of [All] proceedings of the commission authorizing [relating to] the issuance, execution, and delivery of the [revenue] bonds or credit agreement and any contract providing revenue or security to pay the bonds or credit agreement [issued under this section shall be submitted] to the attorney general for review [examination]. 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 [On determining that the revenue bonds have been authorized in accordance with law], the attorney general shall approve the proceedings and the [revenue] bonds, and shall deliver to [the revenue bonds shall be registered by] 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. After the approval and registration, the [revenue] 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 any court or other forum for any reason and are valid, [and] binding, and enforceable [obligations] in accordance with their terms for all purposes.

(j) The proceeds from the sale of 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 [The] proceeds received from the sale of the [revenue] bonds shall be deposited in the bank and invested and used in the manner provided for other funds deposited under this subchapter.

SECTION 6. Section 222.076, Transportation Code, is amended by adding Subsection (c) to read as follows:

(c) The commission may create within a subaccount one or more additional subaccounts as determined appropriate and necessary by the commission.

SECTION 7. Section 222.077, Transportation Code, is amended to read as follows:

Sec. 222.077. REPAYMENT TERMS; DEPOSIT OF REPAYMENTS; INVESTMENT INCOME. (a) For financial assistance that [Any funds disbursed through the state infrastructure bank] must be repaid, [on terms determined by] the commission shall determine the terms and conditions of the repayment, including the interest rates to be charged. The terms must comply with the federal act except for terms applicable to funds deposited in a subaccount described by Section 222.076(b).

(b) For a tolled highway improvement project, the commission 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.

(c) [(b)] Notwithstanding any other law to the contrary:

(1) the repayment of a loan or other assistance provided with money deposited to the credit of a subaccount in the bank, including all amounts received as a share of revenues from a tolled highway improvement project, shall be deposited in that subaccount; and

(2) investment income generated by money deposited to the credit of a subaccount in the bank shall be:

(A) credited to that subaccount, subject to requirements that may be imposed by the proceedings authorizing bonds issued to provide money for deposit in the bank 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;

(B) available for use in providing financial assistance under this subchapter; and

(C) invested in United States Treasury securities, bank deposits, or other financing instruments approved by the United States secretary of transportation to earn interest and enhance the financing of projects assisted by the bank, except that the proceeds of bonds deposited in the bank under Section 222.072 shall be subject to any limitations contained in the documents authorizing the issuance of the bonds.

(d) [(c)] The commission shall administer the bank in compliance with applicable requirements of the federal act and any applicable federal regulation or guideline.

(e) [(d)] The commission by rule shall:

(1) implement this subchapter; and

(2) establish eligibility criteria for an entity applying for financial assistance from the bank.

SECTION 8. Subchapter D, Chapter 222, Transportation Code, is amended by adding Sections 222.078 and 222.079 to read as follows:

Sec. 222.078. 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 bank and shall deposit the proceeds of the sale in the bank.

(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 enforcing 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) Neither the state nor the commission shall be liable for the repayment of, and may not repay, any loan sold under this section.

Sec. 222.079. WAIVER OF SOVEREIGN IMMUNITY. A public entity receiving financial assistance under this subchapter waives sovereign immunity to suit for the purpose of adjudicating a claim for breach of the terms of the financial assistance agreement.

SECTION 9. 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, 2011.