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SECTION 2. Chapter 489,
Government Code, is amended by adding Subchapter E to read as follows:
SUBCHAPTER E. TEXAS
LEVERAGE FUND
Sec. 489.251.
DEFINITION. In this subchapter, "leverage fund" means the Texas
leverage fund established by Section 489.252.
Sec. 489.252. TEXAS
LEVERAGE FUND. (a) The Texas leverage fund is created as a trust fund
held outside the state treasury by the comptroller as trustee. The
comptroller shall hold money in the fund in escrow and in trust for and on
behalf of the bank and the owners of obligations
issued under Section 489.253.
(b) The leverage fund
consists of:
(1) proceeds from the
issuance of obligations under
Section 489.253;
(2) payments of principal
and interest on loans made under this subchapter;
(3) loan origination fees
imposed on loans made under this subchapter; and
(4) any other money
received by the bank under this subchapter.
(c) The leverage fund may
be used only:
(1) to make loans to
economic development corporations for eligible projects as authorized by
Chapters 501, 504, and 505, Local Government Code;
(2) to pay the bank's
necessary and reasonable costs of administering the program established by
this subchapter, including the payment of letter of credit fees and credit
rating fees;
(3) to pay the principal
of and interest on obligations
issued under Section 489.253;
(4) to pay reasonable
fees and other costs incurred by the bank in administering the fund; and
(5) for any other purpose
authorized by this subchapter.
(d) The bank may provide
for the establishment and maintenance of separate accounts or sub-accounts
in the leverage fund, including interest and sinking accounts, reserve
accounts, program accounts, or other accounts. The accounts and
sub-accounts must be kept and held in escrow and in trust as provided by
Subsection (a).
(e) Pending use, the
comptroller may invest and reinvest the money in the leverage fund in
investments authorized by law for state funds.
Sec. 489.253.
REVENUE-BASED OBLIGATIONS AUTHORIZED. (a) The bank, the office, or the
office's successor agency may provide for the issuance, sale, and
retirement of obligations in the form of commercial paper notes to provide
funding for economic development purposes as authorized by Section 52-a,
Article III, Texas Constitution, and this subchapter.
(b) The obligations must be special obligations
of the bank and the principal of and interest on the obligations must be payable solely from
the revenues derived by the bank and
secured by a pledge of the
local economic development sales and use tax revenues imposed by
municipalities for the benefit of economic development corporations created
under Chapters 504 and 505, Local Government Code. The obligations may not constitute an
indebtedness of this state, the office, or the bank in the meaning of the
Texas Constitution or of a statutory limitation. The obligations may not constitute a
pecuniary liability of this state, the office, or the bank or constitute a
charge against the general credit of this state or its taxing power, the
office, or the bank. The limitations provided by this subsection must be
stated plainly on the face of each obligation.
(c) The executive
director of the office by resolution may provide for the obligations to:
(1) be executed and
delivered at any time as a single issue or as several issues;
(2) be in any denomination
and form, including registered uncertificated obligations
not represented by written instruments and commonly known as book-entry
obligations, the registration of ownership and transfer of which the bank
shall provide for under a system of books and records maintained by a
financial institution serving as trustee, paying agent, or bond registrar;
(3) be of a term
authorized by the executive director;
(4) be in coupon or
registered form;
(5) be payable in
installments and at a time or times not exceeding the term authorized by
applicable law;
(6) be subject to terms
of redemption;
(7) be payable at a place
or places;
(8) bear no interest or
bear interest at any rate or rates, fixed, variable, floating, or otherwise
determined by the bank or determined under a contractual arrangement
approved by the executive director, except that the maximum net effective
interest rate, computed in accordance with Section 1204.005, on the obligations may not exceed a rate equal
to the maximum annual interest rate established by Section 1204.006; and
(9) contain provisions
not inconsistent with this subchapter.
(d) Obligations issued under this section
are subject to review and approval by the attorney general in the same
manner and with the same effect as provided
by Chapters 1202 and 1371.
(e) This state pledges to
and agrees with the owners of any obligations
issued under this section that this state will not limit or alter the
rights vested in the bank to fulfill the terms of any agreements made with
an owner or in any way impair the rights and remedies of an owner until the
obligations, together with any
premium and the interest on the obligations,
with interest on any unpaid premium or installments of interest, and all
costs and expenses in connection with any action or proceeding by or on
behalf of the owners, are fully met and discharged. The bank may include
this pledge and agreement of this state in any agreement with the owners of
the obligations.
Sec. 489.254. OBLIGATION
SALE AND ISSUANCE. (a) Obligations
issued under Section 489.253 may be sold at public or private sale at a
price and in a manner and from time to time as the executive director of
the office's resolutions authorizing issuance of the obligations provide.
(b) From the proceeds of
the sale of the obligations, the
bank may pay expenses, premiums, and insurance premiums that the bank
considers necessary or advantageous in connection with the authorization,
sale, and issuance of the obligations.
(c) In connection with
the issuance of its obligations,
the bank may exercise the powers granted to the governing body of an issuer
in connection with the issuance of obligations under Chapter 1371.
Sec. 489.255. AGREEMENTS
IN OBLIGATIONS. (a) The resolution under which the obligations are authorized to be issued
under Section 489.253 or a security agreement, including a related
indenture or trust indenture, may contain any agreements and provisions
customarily contained in instruments securing obligations,
including provisions respecting the fixing and collection of obligations,
the creation and maintenance of special funds, and the rights and remedies
available, in the event of default to the holders of the obligations or to the trustee under the
security agreement, all as the bank considers advisable and consistent with
this subchapter. However, in making such an agreement or provision, the
bank may not incur a pecuniary liability or a charge on the general credit
of the bank, the office, or this state or against the taxing powers of this
state.
(b) The resolution of the
bank authorizing the issuance of
the obligations and a security
agreement securing the obligations
may provide that, in the event of default in payment of the principal of or
interest on the obligations or in
the performance of an agreement contained in the proceedings or security
agreement, the payment and performance may be enforced as provided by
Sections 403.055 and 403.0551, by mandamus, or by the appointment of a
receiver in equity with power to charge and collect obligations and to apply revenues pledged according to
the proceedings or the provisions of the security agreement.
A security agreement may
provide that in the event of default in payment or the violation of an
agreement contained in the security agreement it
may be foreclosed by proceedings at law or in equity and that a trustee
under the security agreement or the holder of an obligation it secures may
become the purchaser at a foreclosure sale, if the trustee or holder is the
highest bidder.
(c) A breach of a security agreement does
not constitute:
(1) a pecuniary liability
of this state, the office, or the bank; or
(2) constitute a charge
against the general credit of this state or its taxing power, the office,
or the bank.
(d) The trustee or
trustees under a security agreement or a depository specified by the
security agreement may be any person that the bank designates, regardless
of whether the person is a resident of this state or incorporated under the
laws of the United States or any state.
Sec. 489.256. REFUNDING
OBLIGATIONS. (a) Obligations
issued under Section 489.253 may be refunded by the bank by the issuance of
the bank's refunding obligations
in the amount that the bank considers necessary to refund the unpaid principal
of the refunded obligations,
together with any unpaid interest, premiums, expenses, and commissions
required to be paid in connection with the refunded obligations. Refunding may be effected whether the
refunded obligations have matured
or are to mature later, either by sale of the refunding obligations or by exchange of the
refunding obligations for the
refunded obligations.
(b) A holder of refunded obligations may not be compelled to
surrender the obligations for
payment or exchange before the date on which the obligations are payable, or, if the obligations are called for redemption,
before the date on which they are by their terms subject to redemption.
(c) Refunding obligations having a final maturity not
to exceed that permitted for other obligations
issued under Section 489.253 may be issued under the same terms and
conditions provided by this subchapter for the issuance of obligations or may be issued in the
manner provided by statute, including Chapters 1207 and 1371.
Sec. 489.257. OBLIGATION
PROCEEDS; USE OF LEVERAGE FUND. (a) The proceeds from the sale of obligations issued under this
subchapter may be applied only for a purpose for which the obligations were issued, except that
any premium or secured interest
received in the sale shall be applied to the payment of the principal of or
interest on the obligations sold
and, if a portion of the proceeds is not needed for a purpose for which the
obligations were issued, that
portion shall be applied to the payment of the principal of or interest on
the obligations.
(b) The bank is authorized to use money in the leverage fund
for the purposes specified in and according to the procedures established
by this subchapter, and this state may not take any action with respect to
the leverage fund other than as this subchapter specifies and the
resolutions of the executive director of the office specify.
Sec. 489.258. OBLIGATIONS
AS LEGAL INVESTMENTS FOR FIDUCIARIES AND OTHER PERSONS. (a) Obligations of the bank issued under
this subchapter are securities in which all public officers and bodies of
this state; municipalities; municipal subdivisions; insurance companies and
associations and other persons carrying on an insurance business; banks,
bankers, trust companies, savings and loan associations, investment
companies, and other persons carrying on a banking business;
administrators, guardians, executors, trustees, and other fiduciaries; and
other persons authorized to invest in other obligations of this state may
invest funds, including capital, in their control or belonging to them.
(b) Notwithstanding any
other provision of law, the obligations
of the bank issued under this subchapter are also securities that may be
deposited with and received by public officers and bodies of this state and
municipalities and municipal subdivisions for any purpose for which the
deposit of other obligations of the state are authorized.
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SECTION 1. Chapter 489,
Government Code, is amended by adding Subchapter E to read as follows:
SUBCHAPTER E. TEXAS
LEVERAGE FUND
Sec. 489.251.
DEFINITION. In this subchapter, "leverage fund" means the Texas
leverage fund established by Section 489.252.
Sec. 489.252. TEXAS
LEVERAGE FUND. (a) The Texas leverage fund is created as a trust fund
held outside the state treasury by the comptroller as trustee. The
comptroller shall hold money in the fund in escrow and in trust for and on
behalf of the bank and the owners of bonds
issued under Section 489.253.
(b) The leverage fund
consists of:
(1) proceeds from the
issuance of bonds under Section
489.253;
(2) payments of principal
and interest on loans made under this subchapter;
(3) loan origination fees
imposed on loans made under this subchapter;
(4) investment earnings described by Subsection (c); and
(5) any other money
received by the bank under this subchapter.
(c) The leverage fund may
be used only:
(1) to make loans to
economic development corporations for eligible projects as authorized by
Chapters 501, 504, and 505, Local Government Code;
(2) to pay the bank's
necessary and reasonable costs of administering the program established by
this subchapter, including the payment of letter of credit fees and credit
rating fees;
(3) to pay the principal
of and interest on bonds issued
under Section 489.253;
(4) to pay reasonable
fees and other costs incurred by the bank in administering the fund; and
(5) for any other purpose
authorized by this subchapter.
(d) The bank, in coordination with the comptroller,
may provide for the establishment and maintenance of separate accounts or
sub-accounts in the leverage fund, including interest and sinking accounts,
reserve accounts, program accounts, or other accounts. The accounts and
sub-accounts must be kept and held in escrow and in trust as provided by
Subsection (a).
(e) Pending use, the
comptroller may invest and reinvest the money in the leverage fund in
investments authorized by law for state funds. Earnings on the investments shall be credited to the fund.
(f) The bank may use money in the leverage fund for the
purposes specified by and according to the procedures established by this
subchapter. This state may take action with respect to the fund only as
specified by this subchapter and only in accordance with the resolutions of
the executive director of the office adopted under Section 489.253.
Sec. 489.253.
REVENUE-BASED BONDS AUTHORIZED. (a) The bank, the office, or the office's
successor agency may provide for the issuance, sale, and retirement of bonds, including obligations in the
form of commercial paper notes, to provide funding for economic development
purposes as authorized by Section 52-a, Article III, Texas Constitution,
and this subchapter.
(b) The bonds are special obligations of the
bank and the principal of and interest on the bonds
must be payable solely from the revenues derived by the bank under this subchapter, including loan
repayments secured by a pledge of the local economic development
sales and use tax revenues imposed by municipalities for the benefit of
economic development corporations created under Chapters 504 and 505, Local
Government Code. The bonds do not
constitute an indebtedness of this state, the office, or the bank in the
meaning of the Texas Constitution or of any statutory limitation. The bonds do not constitute a pecuniary
liability of this state, the office, or the bank or constitute a charge
against the general credit of this state, the office, or the bank, or
against the taxing power of this state. The limitations provided by this
subsection must be stated plainly on the face of each bond.
(c) The executive
director of the office by resolution may provide for the bonds to:
(1) be executed and
delivered at any time in one or more
series as a single issue or as several issues;
(2) be in any
denomination and form, including registered uncertificated bonds not represented by written
instruments and commonly known as book-entry obligations, the registration
of ownership and transfer of which the bank shall provide for under a system
of books and records maintained by a financial institution serving as
trustee, paying agent, or bond registrar;
(3) be of a term
authorized by the executive director, not
to exceed 40 years from their date;
(4) be in coupon or
registered form;
(5) be payable in
installments and at a time or times not exceeding the term authorized by
applicable law;
(6) be subject to terms
of redemption;
(7) be payable at a place
or places;
(8) bear no interest or
bear interest at any rate or rates, fixed, variable, floating, or otherwise
determined by the bank or determined under a contractual arrangement
approved by the executive director, except that the maximum net effective
interest rate, computed in accordance with Section 1204.005, on the bonds may not exceed a rate equal to
the maximum annual interest rate established by Section 1204.006; and
(9) contain provisions
not inconsistent with this subchapter.
(d) Bonds issued under this section are
subject to review and approval by the attorney general in the same manner
and with the same effect as may be
required by law, including Chapter 1202 or 1371, as applicable.
(e) This state pledges to
and agrees with the owners of any bonds
issued under this section that this state will not limit or alter the
rights vested in the bank to fulfill the terms of any agreements made with
an owner or in any way impair the rights and remedies of an owner until the
bonds, together with any premium
and the interest on the bonds,
with interest on any unpaid premium or installments of interest, and all
costs and expenses in connection with any action or proceeding by or on
behalf of the owners, are fully met and discharged. The bank may include
this pledge and agreement of this state in any agreement with the owners of
the bonds.
Sec. 489.254. BOND SALE
AND ISSUANCE. (a) Bonds issued
under Section 489.253 may be sold at public or private sale at a price and
in a manner and from time to time as resolutions of the executive director
of the office that authorize issuance of the bonds
provide.
(b) From the proceeds of
the sale of the bonds, the bank
may pay expenses, premiums, and insurance premiums that the bank considers
necessary or advantageous in connection with the authorization, sale, and
issuance of the bonds.
(c) In connection with
the issuance of its bonds, the
bank may exercise the powers granted to the governing body of an issuer in
connection with the issuance of obligations under Chapter 1371. However, any bonds issued in accordance with
this subchapter and Chapter 1371 are not subject to the rating requirement
for an obligation issued under Chapter 1371.
Sec. 489.255. AGREEMENTS
IN BONDS. (a) A resolution of the executive director of the office that
authorizes bonds to be issued
under Section 489.253 or a security agreement, including a related
indenture or trust indenture, may contain any agreements and provisions
customarily contained in instruments securing bonds,
including provisions respecting the fixing and collection of obligations,
the creation and maintenance of special funds, and the rights and remedies
available, in the event of default to the holders of the bonds or to the trustee under the
security agreement, all as the bank considers advisable and consistent with
this subchapter. However, in making such an agreement or provision, the
bank may not incur:
(1) a pecuniary liability
of this state, the office, or the bank;
or
(2) a charge against the
general credit of this state, the office, or the bank, or against the
taxing powers of this state.
(b) The resolution of the
executive director of the office
authorizing the issuance of the bonds
and a security agreement securing the bonds
may provide that, in the event of default in payment of the principal of or
interest on the bonds or in the
performance of an agreement contained in the proceedings or security
agreement, the payment and performance may be enforced as provided by
Sections 403.055 and 403.0551, by mandamus, or by the appointment of a
receiver in equity with power to charge and collect bonds and to apply revenues pledged according to the
proceedings or the provisions of the security agreement. A security
agreement may provide that, in the event of default in payment or the
violation of an agreement contained in the security agreement, a trustee under the security agreement may
enforce the bondholder's rights by mandamus or other proceedings at law or
in equity to obtain any relief permitted by law, including the right to
collect and receive any revenue used to secure the bonds.
(c) A breach of a resolution of the executive
director of the office adopted under Section 489.253, a breach of an
agreement made under this section, or a default under bonds issued under this
subchapter does not constitute:
(1) a pecuniary liability
of this state, the office, or the bank; or
(2) a charge against the
general credit of this state, the office, or the bank, or against the
taxing power of this state.
(d) The trustee or trustees
under a security agreement or a depository specified by the security
agreement may be any person that the bank designates, regardless of whether
the person is a resident of this state or incorporated under the laws of
the United States or any state.
Sec. 489.256. REFUNDING
BONDS. (a) Bonds issued under
Section 489.253 may be refunded by the bank by the issuance of the bank's
refunding bonds in the amount
that the bank considers necessary to refund the unpaid principal of the
refunded bonds, together with any
unpaid interest, premiums, expenses, and commissions required to be paid in
connection with the refunded bonds.
Refunding may be effected whether the refunded bonds have matured or are to mature later, either by sale
of the refunding bonds or by exchange
of the refunding bonds for the
refunded bonds.
(b) A holder of refunded bonds may not be compelled to surrender
the bonds for payment or exchange
before the date on which the bonds
are payable, or, if the bonds are
called for redemption, before the date on which they are by their terms
subject to redemption.
(c) Refunding bonds having a final maturity not to
exceed that permitted for other bonds
issued under Section 489.253 may be issued under the same terms and
conditions provided by this subchapter for the issuance of bonds or may be issued in the manner
provided by statute, including Chapters 1207 and 1371.
Sec. 489.257. USE OF BOND
PROCEEDS. The proceeds from the sale of bonds
issued under this subchapter may be applied only for a purpose for which
the bonds were issued, except
that:
(1) any secured interest
received in the sale shall be applied to the payment of the principal of or
interest on the bonds sold and,
if a portion of the proceeds is not needed for a purpose for which the bonds were issued, that portion shall
be applied to the payment of the principal of or interest on the bonds; and
(2) any premium received in the sale of the bonds shall be
applied in accordance with Section 1201.042(d).
Sec. 489.258. BONDS AS
LEGAL INVESTMENTS FOR FIDUCIARIES AND OTHER PERSONS. (a) Bonds of the bank issued under this
subchapter are securities in which all public officers and bodies of this
state; municipalities; municipal subdivisions; insurance companies and
associations and other persons carrying on an insurance business; banks,
bankers, trust companies, savings and loan associations, investment
companies, and other persons carrying on a banking business;
administrators, guardians, executors, trustees, and other fiduciaries; and
other persons authorized to invest in other obligations of this state may
invest funds, including capital, in their control or belonging to them.
(b) Notwithstanding any
other provision of law, the bonds
of the bank issued under this subchapter are also securities that may be
deposited with and received by public officers and bodies of this state and
municipalities and municipal subdivisions for any purpose for which the
deposit of other obligations of the state are authorized.
Sec. 489.259. ADMINISTRATION OF LEVERAGE FUND. The bank shall
administer the leverage fund. In administering the leverage fund and this
subchapter, the bank has the powers necessary to carry out the purposes of
this subchapter, including the power to:
(1) make, execute, and deliver contracts, conveyances, and
other instruments; and
(2) impose charges and provide for reasonable penalties for
delinquent payments or performance in connection with any transaction.
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