CHAPTER 1232. TEXAS PUBLIC FINANCE AUTHORITY

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GOVERNMENT CODE

TITLE 9. PUBLIC SECURITIES

SUBTITLE B. PROVISIONS APPLICABLE TO SECURITIES ISSUED BY STATE

GOVERNMENT

CHAPTER 1232. TEXAS PUBLIC FINANCE AUTHORITY

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 1232.001. SHORT TITLE. This chapter may be cited as the

Texas Public Finance Authority Act.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1232.002. PURPOSE. The purpose of this chapter is to

provide a method of financing for:

(1) the acquisition or construction of buildings; and

(2) the purchase or lease of equipment by executive or judicial

branch state agencies.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999. Amended by Acts 2001, 77th Leg., ch. 646, Sec. 1, eff.

Sept. 1, 2001.

Sec. 1232.003. DEFINITIONS. In this chapter:

(1) "Authority" means the Texas Public Finance Authority.

(2) "Board" means the board of directors of the authority.

(3) "Building" means:

(A) a structure used by a state agency to conduct state

business; and

(B) the major equipment or personal property related

functionally to a structure used by a state agency to conduct

state business.

(4) "Commission" means the Texas Building and Procurement

Commission.

(5) "Computer equipment" means a telecommunications device or

system, an automated information system, a computer on which an

information system is automated, and computer software.

(6) "Construction" means the erection, improvement, repair,

renovation, or remodeling of a building.

(7) "Equipment" means a fixed asset, other than land or a

building, used by a state agency to conduct state business. The

term includes computer equipment.

(8) "Obligation" means a bond, note, certificate of

participation, certificate of obligation, or interest in a

contract.

(9) "State agency" means a board, commission, department,

office, agency, institution of higher education, or other

governmental entity in the executive, judicial, or legislative

branch of state government.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999. Amended by Acts 2001, 77th Leg., ch. 1422, Sec. 1.01, eff.

Sept. 1, 2001.

Sec. 1232.004. STATE LEASE FUND ACCOUNT. (a) The state lease

fund account is an account in the general revenue fund and may be

used only for a purpose designated by law.

(b) The state lease fund account may be used to finance an

appropriation to the commission or a state agency or directly to

the authority on behalf of a state agency to pay required rents,

fees, and installments to the authority.

legislature may transfer money deposited in the state lease fund

account to the Texas capital trust fund account for other

purposes.

(d) The amount in the state lease fund account that is in excess

of amounts needed for debt service and is unencumbered shall be

transferred at the end of each biennium to the undedicated

portion of the general revenue fund.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1232.005. APPLICATION OF STATE FUNDS REFORM ACT. All money

paid to the authority under this chapter is subject to Subchapter

F, Chapter 404.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

SUBCHAPTER B. TEXAS PUBLIC FINANCE AUTHORITY

Sec. 1232.051. TEXAS PUBLIC FINANCE AUTHORITY. The Texas Public

Finance Authority is a public authority and a body politic and

corporate.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1232.052. COMPOSITION OF GOVERNING BOARD. (a) The

authority is governed by a board of directors composed of seven

members appointed by the governor with the advice and consent of

the senate.

(b) A person is not eligible for appointment as a member of the

board if the person or the person's spouse:

(1) is employed by or participates in the management of a

business entity or other organization receiving funds from the

authority;

(2) owns or controls, directly or indirectly, more than a 10

percent interest in a business entity or other organization

receiving funds from the authority; or

(3) uses or receives a substantial amount of tangible goods,

services, or funds from the authority, other than compensation or

reimbursement authorized by law for board membership, attendance,

or expenses.

the race, color, disability, sex, religion, age, or national

origin of the appointees.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999. Amended by Acts 2001, 77th Leg., ch. 646, Sec. 2, eff.

Sept. 1, 2001.

Sec. 1232.053. TERMS. Members of the board are appointed for

staggered terms of six years, with two or three members' terms

expiring February 1 of each odd-numbered year.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999. Amended by Acts 2001, 77th Leg., ch. 646, Sec. 3, eff.

Sept. 1, 2001.

Sec. 1232.054. GROUNDS FOR REMOVAL. (a) It is a ground for

removal from the board that a member:

(1) violates a prohibition established by Section 1232.060;

(2) cannot because of illness or disability discharge the

member's duties for a substantial part of the term for which the

member is appointed; or

(3) is absent from more than half of the regularly scheduled

board meetings that the member is eligible to attend during a

calendar year unless the absence is excused by majority vote of

the board.

(b) The validity of an action of the board is not affected by

the fact that it is taken when a ground for removal of a board

member exists.

that a potential ground for removal exists, the executive

director shall notify the presiding officer of the board of the

potential ground. The presiding officer shall then notify the

governor and the attorney general that a potential ground for

removal exists. If the potential ground for removal involves the

presiding officer, the executive director shall notify the

assistant presiding officer, who shall notify the governor and

the attorney general that a potential ground for removal exists.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1232.055. BOARD MEMBER TRAINING. (a) To be eligible to

take office as a member of the board, a person appointed to the

board must complete at least one course of a training program

that complies with this section.

(b) The training program must provide information to the person

regarding:

(1) the enabling legislation that created the authority and the

board;

(2) the programs operated by the authority;

(3) the role and functions of the authority;

(4) the rules of the authority, with an emphasis on the rules

that relate to disciplinary and investigatory authority;

(5) the current budget for the authority;

(6) the results of the most recent formal audit of the

authority;

(7) the requirements of the:

(A) open meetings law, Chapter 551;

(B) public information law, Chapter 552; and

(8) the requirements of the conflict of interest laws and other

laws relating to public officials; and

(9) any applicable ethics policies adopted by the authority or

the Texas Ethics Commission.

for travel expenses incurred in attending the training program,

as provided by the General Appropriations Act and as if the

person were a member of the board.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1232.056. OFFICERS; MEETINGS. (a) The governor shall

designate a member of the board as the presiding officer to serve

in that capacity at the pleasure of the governor. The board

biennially shall elect an assistant presiding officer from its

members.

(b) The board shall meet at least once in each calendar quarter

and shall meet at other times at the call of the presiding

officer or as prescribed by board rule.

provided by Section 1371.053(c)(2), is not subject to Chapter 551

when it is acting to price and sell the obligations of the

authority in accordance with parameters for the issuance

established by the board.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999. Amended by Acts 2001, 77th Leg., ch. 1420, Sec. 8.005(a),

eff. Sept. 1, 2001.

Sec. 1232.057. PUBLIC TESTIMONY AT BOARD MEETINGS. The board

shall develop and implement policies that provide the public with

a reasonable opportunity to appear before the board and to speak

on any issue under the jurisdiction of the authority.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1232.058. COMPENSATION AND EXPENSES. A board member is

entitled to:

(1) a per diem of $50, unless otherwise specified in the General

Appropriations Act, for each day the member performs functions as

a board member; and

(2) reimbursement for actual and necessary expenses that the

member incurs in performing board functions.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1232.059. STAFF; CONSULTANTS. (a) The board shall employ

persons and contract with consultants necessary for the board to

perform its functions.

(b) Employees of the authority are considered to be state

employees.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1232.060. CONFLICT OF INTEREST. (a) An officer, employee,

or paid consultant of a Texas trade association in the field of

public finance may not be a member of the board or an employee of

the authority who is exempt from the state's position

classification plan or is compensated at or above the amount

prescribed by the General Appropriations Act for step 1, salary

group A17, of the position classification salary schedule.

(b) A person who is the spouse of an officer, manager, or paid

consultant of a Texas trade association in the field of public

finance may not be a member of the board and may not be an

employee of the authority who is exempt from the state's position

classification plan or is compensated at or above the amount

prescribed by the General Appropriations Act for step 1, salary

group A17, of the position classification salary schedule.

is a nonprofit, cooperative, and voluntarily joined association

of business or professional competitors in this state designed to

assist its members and its industry or profession in dealing with

mutual business or professional problems and in promoting their

common interest.

(d) A person may not serve as a member of the board or act as

the general counsel to the board or the authority if the person

is required to register as a lobbyist under Chapter 305 because

of the person's activities for compensation on behalf of a

profession related to the operation of the authority.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1232.061. INFORMATION ON RESPONSIBILITIES OF BOARD MEMBERS

AND EMPLOYEES. The executive director of the authority or the

executive director's designee shall provide to members of the

board and to authority employees, as often as necessary,

information regarding their qualification for office or

employment under this chapter and their responsibilities under

applicable laws relating to standards of conduct for state

officers or employees.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1232.062. SEPARATION OF POLICYMAKING AND MANAGEMENT

RESPONSIBILITIES. The board shall develop and implement policies

that clearly separate the policymaking responsibilities of the

board and the management responsibilities of the executive

director and the staff of the authority.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1232.063. EQUAL EMPLOYMENT OPPORTUNITY. (a) The executive

director of the authority or the executive director's designee

shall prepare and maintain a written policy statement to assure

implementation of a program of equal employment opportunity under

which all personnel transactions are made without regard to race,

color, disability, sex, religion, age, or national origin. The

policy statement must include:

(1) personnel policies, including policies relating to

recruitment, evaluation, selection, appointment, training, and

promotion of personnel that are in compliance with requirements

of Chapter 21, Labor Code;

(2) a comprehensive analysis of the authority workforce that

meets federal and state guidelines;

(3) procedures by which a determination can be made about the

extent of underuse in the authority workforce of all persons for

whom federal or state guidelines encourage a more equitable

balance; and

(4) reasonable methods to appropriately address those areas of

underuse.

(b) A policy statement prepared under Subsection (a) must cover

an annual period, be updated annually and reviewed by the

Commission on Human Rights for compliance with Subsection (a)(1),

and be filed with the governor's office.

legislature based on the information received under Subsection

(b). The report may be made separately or as a part of other

biennial reports made to the legislature.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1232.064. CAREER LADDER; EMPLOYEE PERFORMANCE EVALUATIONS.

(a) The executive director of the authority or the executive

director's designee shall develop an intra-agency career ladder

program that addresses opportunities for mobility and advancement

for employees within the authority. The program shall require

intra-agency posting of all positions concurrently with any

public posting.

(b) The executive director of the authority or the executive

director's designee shall develop a system of annual performance

evaluations that are based on documented employee performance.

All merit pay for authority employees must be based on the system

established under this subsection.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1232.065. COMPLIANCE WITH LAWS RELATING TO ACCESSIBILITY.

The authority shall comply with federal and state laws related to

program and facility accessibility.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1232.066. BOARD AUTHORITY. (a) The board's authority

under this chapter is limited to the financing of:

(1) the acquisition or construction of a building;

(2) the purchase or lease of equipment; or

(3) stranded costs of a municipal power agency.

(b) The board's authority does not affect the authority of the

commission or any other state agency.

chapter do not become part of other property to which they may be

attached or into which they may be incorporated, without regard

to whether the other property is real or personal.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999. Amended by Acts 2001, 77th Leg., ch. 1420, Sec. 8.006(a),

eff. Sept. 1, 2001.

Sec. 1232.067. GENERAL POWERS. The board may:

(1) exercise, to the extent practicable, all powers given to a

corporation under the general laws of the state;

(2) have perpetual succession by its corporate name;

(3) sue and be sued in its corporate name;

(4) adopt a seal for use as the board considers appropriate;

(5) accept gifts; and

(6) adopt rules and perform all functions reasonably necessary

for the board to administer its functions prescribed by this

chapter.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1232.068. EMINENT DOMAIN. The authority may exercise the

power of eminent domain for the purposes set forth in this

chapter in connection with the acquisition or construction of a

building that is authorized as provided by Section 1232.108.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1232.069. ANNUAL FINANCIAL REPORT. The board, authority,

or executive director of the authority shall prepare annually a

complete and detailed written report accounting for all funds

received and disbursed by the authority during the preceding

fiscal year. The annual report must meet the reporting

requirements applicable to financial reporting provided in the

General Appropriations Act.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1232.070. INFORMATION ON COMPLAINTS. (a) The authority

shall keep a file about each written complaint filed with the

authority that the authority has authority to resolve. The

authority shall provide to the person filing the complaint and

the persons complained about the authority's policies and

procedures relating to complaint investigation and resolution.

The authority, at least quarterly and until final disposition of

the complaint, shall notify the person filing the complaint and

the persons complained about of the status of the complaint

unless the notice would jeopardize an undercover investigation.

(b) The authority shall keep information about each complaint

filed with the authority. The information must include:

(1) the date the complaint is received;

(2) the name of the complainant;

(3) the subject matter of the complaint;

(4) a record of all persons contacted in relation to the

complaint;

(5) a summary of the results of the review or investigation of

the complaint; and

(6) for complaints for which the authority took no action, an

explanation of the reason the complaint was closed without

action.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1232.071. RELATIONSHIP TO PREVIOUS BOARD. (a) The Texas

Public Finance Authority owns the property formerly owned by, and

is the successor to each lease or rental contract entered into

by, the Texas Public Building Authority created by Chapter 700,

Acts of the 68th Legislature, Regular Session, 1983.

(b) An obligation contracted or assumed by the Texas Public

Building Authority with respect to a property or contract

described by Subsection (a) is an obligation of the Texas Public

Finance Authority.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1232.072. SUNSET PROVISION. The Texas Public Finance

Authority is subject to Chapter 325 (Texas Sunset Act). Unless

continued in existence as provided by that chapter, the authority

is abolished and this chapter expires September 1, 2011.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

928, Sec. 3.13, eff. June 15, 2007.

SUBCHAPTER C. OBLIGATIONS

Sec. 1232.101. ISSUANCE OF BONDS FOR CERTAIN STATE AGENCIES.

With respect to all bonds authorized to be issued by or on behalf

of the adjutant general's department, Parks and Wildlife

Department, Texas Agricultural Finance Authority, Texas Low-Level

Radioactive Waste Disposal Authority, Stephen F. Austin State

University, Midwestern State University, and Texas Southern

University, the authority has the exclusive authority to act on

behalf of those entities in issuing bonds on their behalf. In

connection with those issuances and with the issuance of

refunding bonds on behalf of those entities, the authority is

subject to all rights, duties, and conditions surrounding

issuance previously applicable to the issuing entity under the

statute authorizing the issuance. A reference in an authorizing

statute to the entity on whose behalf the bonds are being issued

applies equally to the authority in its capacity as issuer on

behalf of the entity.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999. Amended by Acts 2001, 77th Leg., ch. 646, Sec. 4, eff.

Sept. 1, 2001.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

1335, Sec. 13, eff. September 1, 2007.

Acts 2009, 81st Leg., R.S., Ch.

506, Sec. 1.18, eff. September 1, 2009.

Sec. 1232.102. ISSUANCE OF BONDS FOR STATE OFFICE BUILDINGS.

(a) The board may issue and sell bonds in the name of the

authority to finance the acquisition or construction of

buildings. After receiving a request described by Section

2166.452, the board may issue bonds in amounts not exceeding the

previously authorized amount of bonds plus five percent of the

acquisition cost of the property, as described in the request.

(b) The board shall promptly issue and sell bonds in the name of

the authority under this chapter to finance the acquisition or

construction of a building that has been authorized in accordance

with this chapter or under Section 2166.452 or 2166.453.

or constructing a building financed by bonds issued under this

chapter shall accomplish its statutory authority as if the

building were financed by legislative appropriation. The board

and the commission or other state agency involved in the

acquisition or construction of a building shall adopt a

memorandum of understanding that defines the division of

authority between the board and the commission or other agency.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999. Amended by Acts 2001, 77th Leg., ch. 646, Sec. 5, eff.

Sept. 1, 2001.

Sec. 1232.1025. ISSUANCE OF BONDS FOR MILITARY FACILITIES. (a)

The board may issue and sell bonds in the name of the authority

to finance the acquisition or construction of buildings to be

used as state military forces facilities.

(b) After receiving a request under Section 431.0292 or

431.0302(c), the board shall promptly issue and sell bonds in the

name of the authority to provide the requested financing.

authority as if the property or building were financed by

legislative appropriation. The board and the adjutant general

shall adopt a memorandum of understanding that defines the

division of authority between the board and adjutant general.

(d) On completion of the acquisition or construction, the

adjutant general shall lease the building from the authority.

Added by Acts 2007, 80th Leg., R.S., Ch.

1335, Sec. 14, eff. September 1, 2007.

Sec. 1232.103. ISSUANCE OF OBLIGATIONS FOR EQUIPMENT. (a) The

authority may issue and sell obligations for the financing of:

(1) a lease or other agreement that concerns equipment that an

executive or judicial branch state agency has purchased or leased

or intends to purchase or lease; or

(2) a package of agreements described by Subdivision (1) that

involves one or more state agencies.

(b) An obligation issued by the authority is payable under an

agreement that may be in the nature of:

(1) a lease under which the authority leases equipment from a

vendor for sublease to the commission or another state agency;

(2) a purchase by the authority of equipment and the lease of

that equipment to either:

(A) the commission for the benefit of a state agency; or

(B) a state agency other than the commission;

(3) a purchase by the authority of equipment and the sale of

that equipment to a state agency on an installment payment basis;

(4) any similar agreement.

or between a vendor and a state agency, the commission shall

nevertheless perform its functions as purchasing agent for the

state, with the funds obtained under this section used solely to

finance the agreement. The board and the commission shall adopt a

memorandum of understanding that defines the division of

authority between the board and the commission.

(d) A state agency may enter into a type of agreement described

by this section to purchase or lease necessary equipment.

(e) If a law requires a state agency to obtain the approval of

another state agency or perform any other act before the agency

may purchase or lease computer equipment, those requirements must

be satisfied before the agency may enter into an agreement under

this chapter. The authority shall adopt rules so that computer

equipment may not be financed before the authority receives

written proof that the requirements have been satisfied.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1232.104. ISSUANCE OF OBLIGATIONS FOR ALTERNATIVE FUEL

PROJECTS. (a) If the authority determines that a project is

financially viable and sufficient revenue is or will be

available, the authority may issue and sell obligations the

proceeds of which shall be used for the financing of:

(1) the conversion of state agency vehicles and other sources of

substantial energy output to an alternative fuel under Subchapter

A, Chapter 2158;

(2) the construction, acquisition, or maintenance by the

commission of fueling stations supplying alternative fuels or

equipment enhancing the use of engine-driven technology to

support state agency vehicles and other energy applications that

use an alternative fuel;

(3) the conversion of school district motor vehicles and other

sources of substantial energy output to an alternative fuel;

(4) the construction, acquisition, or maintenance by a school

district of fueling stations supplying alternative fuels or

equipment enhancing the use of engine-driven technology to

support school district motor vehicles and other energy

applications that use an alternative fuel;

(5) the conversion of local mass transit authority or department

motor vehicles and other sources of substantial energy output to

an alternative fuel;

(6) the construction, acquisition, or maintenance of fueling

stations supplying alternative fuels or equipment enhancing the

use of engine-driven technology by a local mass transit authority

or department to support transit authority or department vehicles

and other energy applications that use an alternative fuel;

(7) the conversion of motor vehicles and other sources of

substantial energy output of a local government to an alternative

fuel;

(8) the conversion of motor vehicles and other sources of

substantial energy output of a hospital district or authority, a

housing authority, or a district or authority created under

Section 52, Article III, Texas Constitution, or Section 59,

Article XVI, Texas Constitution, to an alternative fuel;

(9) the construction, acquisition, or maintenance of fueling

stations supplying alternative fuels or equipment enhancing the

use of engine-driven technology to support motor vehicles and

other energy applications that use an alternative fuel by a

county, a municipality, or an entity described by Subdivision

(8); or

(10) a joint venture between the private sector and a state

agency or political subdivision that is required under law to use

an alternative fuel in the agency's or subdivision's vehicles or

other energy applications to:

(A) convert vehicles or other sources of substantial energy

output to an alternative fuel;

(B) develop fueling stations and resources for the supply of

alternative fuels and engine-driven applications;

(D) engage in other projects to facilitate the use of

alternative fuels.

(b) The board may provide for the payment of the principal of or

interest on an obligation issued under this section:

(1) by pledging all or a part of the revenue the state derives

from the sale of alternative fuel, alternative fuel equipment or

technology, or vehicles powered by an alternative fuel;

(2) by contracting with a political subdivision or a private

entity to pledge revenue the political subdivision or private

entity derives from the sale of alternative fuel, alternative

fuel equipment or technology, or vehicles powered by an

alternative fuel in an amount sufficient to ensure that the

obligations are paid;

(3) by pledging appropriated general revenues of the state or

other appropriated money in the state treasury; or

(4) from any other source of funds available to the board.

(1) include minority-owned businesses in the issuance and

underwriting of at least 20 percent of the obligations issued

under this section; and

(2) include women-owned businesses in the issuance and

underwriting of at least 10 percent of the obligations issued

under this section.

(d) Costs of administering the alternative fuel finance program

shall be considered a part of project costs and shall be funded

with proceeds of the obligations.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Amended by:

Acts 2005, 79th Leg., Ch.

864, Sec. 4, eff. September 1, 2005.

Sec. 1232.105. AGGREGATE LIMIT ON ISSUANCE OF OBLIGATIONS FOR

ALTERNATIVE FUEL PROJECTS. The authority may not issue and sell

more than $50 million in obligations for projects under Section

1232.104.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1232.106. EVALUATION OF APPLICATION FOR ASSISTANCE WITH

ALTERNATIVE FUEL PROJECTS. (a) The Alternative Fuels Council

shall evaluate an application by an eligible entity for the

financing under Section 1232.104 of the acquisition,

construction, or improvement of alternative fuels infrastructure

and shall determine whether the proposed project will increase

energy or cost savings to the applicant.

(b) The authority may not issue an obligation under Section

1232.104 unless the Alternative Fuels Council certifies that the

proposed project will increase energy or cost savings to the

applicant.

and standards for the evaluation of an application for the

financing of a proposed project under Section 1232.104.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1232.107. PURCHASE OF OBLIGATIONS FOR ALTERNATIVE FUEL

PROJECTS. (a) The authority may use the proceeds of obligations

issued under Section 1232.104 to purchase, at a price determined

by the authority, an obligation of an entity described by Section

1232.104(a) that evidences the entity's obligation to repay the

authority. Notwithstanding any other law, the authority may

acquire an obligation of an entity described by Section

1232.104(a) in a private sale as provided by resolution or order

of the governing body of the entity.

(b) An entity described by Section 1232.104(a) may borrow from

the authority by selling an obligation to the authority.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1232.1071. ISSUANCE OF OBLIGATIONS FOR FINANCING STRANDED

COSTS OF MUNICIPAL POWER AGENCY. (a) The authority may, either

directly or by means of a trust or trusts established by it,

issue obligations or other evidences of indebtedness for

financing stranded costs of a municipal power agency created by

concurrent resolution by its member cities on or before November

1, 1979, pursuant to Chapter 163, Utilities Code, or a

predecessor statute to that chapter. The stranded costs of the

municipal power agency are set forth as allocated to the member

cities in the "Potentially Strandable Investment (ECOM) Report:

1998 Update" issued by the Public Utility Commission of Texas.

(b) At the request of any member city of a municipal power

agency, the authority shall issue obligations or other evidences

of indebtedness in the amount of the requesting member city's

stranded costs, plus the sum of the costs described in

Subdivision (1) and the issuance costs, and shall make a grant of

the proceeds of the obligations or evidences of indebtedness to

the municipal power agency. A member city's request under this

subsection must include a statement of the payment terms for

recovering stranded costs. A grant of the proceeds of obligations

or evidences of indebtedness is subject to the following

conditions:

(1) the municipal power agency shall use the grant to reduce the

outstanding principal of the agency's debts allocable to stranded

costs of the requesting member city for federal income tax

purposes, whether by redemption, defeasance, or tender offer,

together with any interest expenses, call premium, tender

premium, or administrative expenses associated with the principal

payment; and

(2) the municipal power agency shall reduce the amount payable

by the requesting member city under its power sales contract with

the agency to reflect the reduced debt service on the agency's

debt as a result of the payments made under Subdivision (1).

authority under this section must be secured by nonbypassable

charges imposed by the authority on retail customers receiving

transmission and distribution services provided by the requesting

member city, which must be consistent with the stranded cost

recovery terms stated in the member city's request unless

otherwise approved by the member city. Obligations or evidences

of indebtedness issued by the authority under this section are

not a debt of this state, the municipal power agency, or any

member of the municipal power agency.

(d) The Public Utility Commission of Texas shall provide

necessary assistance to the authority to ensure the collection

and enforcement of the nonbypassable charges, whether directly or

by using the assistance and powers of the requesting member city.

(e) The authority and the Public Utility Commission of Texas

have all powers necessary to perform the duties and

responsibilities described by this section. This section shall be

interpreted broadly in a manner consistent with the most

cost-effective financing of stranded costs. To the extent

possible, obligations or evidences of indebtedness issued by the

authority under this section must be structured so that any

interest on the obligations or evidences of indebtedness is

excluded from gross income for federal income tax purposes. Any

interest on the obligations or evidences of indebtedness is not

subject to taxation by and may not be included as part of the

measurement of a tax by this state or a political subdivision of

this state.

Added by Acts 2001, 77th Leg., ch. 1420, Sec. 8.007(a), eff.

Sept. 1, 2001.

Sec. 1232.108. LEGISLATIVE AUTHORIZATION REQUIRED. Except as

permitted by Section 1232.109, 2166.452, or 2166.453, before the

board may issue and sell bonds, the legislature by the General

Appropriations Act or other law must have authorized:

(1) the specific project for which the bonds are to be issued

and sold; and

(2) the estimated cost of the project or the maximum amount of

bonded indebtedness that may be incurred by the issuance and sale

of bonds for the project.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1232.109. AUTHORIZATION TO PURCHASE CERTAIN REAL PROPERTY.

(a) Because there is a continued need to acquire real property

in or in the immediate vicinity of state office building

complexes for the continued operation of state government,

because prices and values of real property periodically

fluctuate, and because the state must be able to respond to

rapidly changing market conditions to acquire real property at

substantial savings to taxpayers, the commission may purchase and

renovate real property located, in whole or in part, within 1,000

feet of:

(1) the Capitol Complex in Travis County; or

(2) the John H. Winters Human Services Complex in Travis County.

(b) The commission may contract as necessary to accomplish the

purposes stated in Subsection (a). The estimated cost of the

project is $10 million. Before purchasing property under this

section, the commission must determine that the purchase would be

in the state's best interest.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1232.110. SPECIFIC PROJECTS. The board may issue bonds

under Section 1232.102 for the following projects:

Project

Estimated Cost

State Board of Insurance Building in Travis County;

facilities associated with relocation of the State Aircraft

Pooling Board (not to exceed an estimated amount of

$7,000,000); and the acquisition and development of acreage

at Robert Mueller Municipal Airport for a state complex

(not to exceed an estimated amount of $41,000,000)

$59,937,000

Laboratory and Office Facilities for the Texas Department

of Health

$42,300,000

Parking facilities for state officers and employees to be

built on state parking Lot 20 and for visitors to the

Capitol Complex to be built on state parking Lot 17

$29,500,000

Construction or purchase and renovation of a building or

buildings by the commission in Tarrant County

$10,000,000

Construction or purchase and renovation of a building or

buildings by the commission in Harris County

$20,000,000

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999. Amended by Acts 2001, 77th Leg., ch. 646, Sec. 6, eff.

Sept. 1, 2001.

Sec. 1232.111. CERTAIN PROJECTS BY TEXAS DEPARTMENT OF

TRANSPORTATION. (a) The authority may issue and sell

obligations to finance one or more projects described by Section

201.1055(a), Transportation Code. Notwithstanding Section

1232.108(2), the estimated cost of the project must be specified

in the General Appropriations Act or other law.

(b) Any provision of this chapter that relates to the issuance

or sale of obligations to finance the acquisition or construction

of a building, including provisions relating to form, procedure,

repayment, actions that may be taken to ensure that the payment

of the principal of and interest on the obligations is continued

without interruption, and other relevant matters, applies to the

issuance or sale of obligations under this section to the extent

that the provision may be appropriately made applicable.

source, including the state highway fund, to the Texas Department

of Transportation to make lease payments to the authority for

space occupied by the department in a building acquired or

constructed under Section 201.1055(a), Transportation Code.

Added by Acts 2005, 79th Leg., Ch.

281, Sec. 2.90, eff. June 14, 2005.

Sec. 1232.1115. CERTAIN CONSTRUCTION AND REPAIR PROJECTS AND

EQUIPMENT PURCHASES; GENERAL OBLIGATION BONDS. (a) The

authority has the exclusive power to issue general obligation

bonds under Section 50-f, Article III, Texas Constitution. The

board shall issue the bonds in a cumulative amount not to exceed

$850 million for:

(1) construction or repair projects in or outside Travis County

that are administered by or on behalf of a state agency listed in

Section 50-f, Article III, Texas Constitution, and authorized by

the legislature in accordance with Section 1232.108; or

(2) the purchase of needed equipment by or on behalf of such an

agency, and authorized by the legislature by the General

Appropriations Act or other law.

(b) The board shall provide for, issue, and sell the bonds in

accordance with Section 50-f, Article III, Texas Constitution,

and this chapter. Proceeds from the sale of the bonds shall be

invested as provided by this chapter.

authorized project or for the purchase of needed equipment only

in accordance with the legislative appropriation of the proceeds.

Added by Acts 2001, 77th Leg., ch. 565, Sec. 1, eff. Nov. 6,

2001.

Text of section effective on Passage of SJR 65.

Sec. 1232.1116. CERTAIN MAINTENANCE, IMPROVEMENT, REPAIR, AND

CONSTRUCTION PROJECTS; GENERAL OBLIGATION BONDS. (a) The

authority has the exclusive power to issue general obligation

bonds under Section 50-g, Article III, Texas Constitution. The

board shall issue the bonds in a cumulative amount not to exceed

$1 billion for:

(1) maintenance, improvement, repair, and construction projects

in or outside Travis County that are administered by or on behalf

of a state agency listed in Section 50-g, Article III, Texas

Constitution, and authorized by the legislature in accordance

with Section 1232.108; or

(2) the purchase of needed equipment by or on behalf of such an

agency, and authorized by the legislature by the General

Appropriations Act or other law.

(b) The board shall provide for, issue, and sell the bonds in

accordance with Section 50-g, Article III, Texas Constitution,

and this chapter. Proceeds from the sale of the bonds shall be

invested as provided by this chapter.

authorized project or for the purchase of needed equipment only

in accordance with the legislative appropriation of the proceeds.

Added by Acts 2007, 80th Leg., R.S., Ch.

1392, Sec. 1.

Sec. 1232.112. BOND REVIEW BOARD APPROVAL. (a) The authority

may not issue obligations until the Bond Review Board has

approved the issuance under Chapter 1231.

(b) The Bond Review Board may not approve a bond issue unless a

project analysis is submitted for approval as provided by Section

1232.114.

the Bond Review Board.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1232.113. OBLIGATION ISSUANCE ORIENTATION; INFORMATION TO

AND FROM CLIENT AGENCIES. (a) In this section, "client agency"

means a state agency on whose behalf the board may issue

obligations.

(b) The authority shall develop an orientation to the obligation

issuance process for the authority's client agencies.

(1) information explaining the obligation issuance process in

plain language; and

(2) an orientation meeting to be held before the issuance

process begins.

(d) As part of the orientation, a client agency shall provide to

the authority:

(1) detailed information concerning the project for which

obligations are to be issued;

(2) a description of the legislative authority for the issuance

of the obligations; and

(3) the names of employees of the client agency who are

designated to work with the authority in connection with the

project.

(e) The authority shall prepare information of interest to the

authority's client agencies describing the functions of the

authority and the procedures by which complaints are filed with

and resolved by the authority. The authority shall make the

information available to its client agencies.

(f) The board by rule shall establish methods by which client

agencies are notified of the name, mailing address, and telephone

number of the authority for the purpose of directing complaints

to the authority. The board may provide for that notification on

a form provided to a client agency during the orientation.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1232.114. PROJECT ANALYSIS. (a) When the authority

submits its application for approval of a bond issue to the Bond

Review Board, the agency or institution that will use the project

to be financed by the bonds shall submit to the Bond Review Board

a project analysis of the project. The project analysis must be

in the form required for a project analysis requested from the

commission under Sections 2166.151-2166.155.

(b) This section does not apply to a minor renovation, repair,

or construction project at a facility operated by the Texas

Department of Criminal Justice for the imprisonment of

individuals convicted of felonies other than state jail felonies,

as defined by the department in cooperation with the commission.

Instead of submitting a project analysis, the department may

substitute the master plan required to be submitted by Section

1401.121 if the master plan contains information substantially

equivalent to the information required to be in a project

analysis under Sections 2166.151-2166.155.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Amended by:

Acts 2009, 81st Leg., R.S., Ch.

87, Sec. 25.085, eff. September 1, 2009.

Sec. 1232.115. EXPENSES INCLUDED IN PRINCIPAL AMOUNT. (a) The

principal amount of obligations may include amounts required to

pay required reserve funds, capitalized interest, the authority's

administrative costs, issuing expenses, and other expenses

associated with the authority's issuance and sale of the

obligations.

(b) The principal amount of obligations issued to finance the

purchase of computer equipment that is the subject of a

contingent appropriation under Subchapter B, Chapter 317, must be

sufficient to cover any payments of principal and interest that

must occur during the remainder of the biennium after the

obligations are issued.

because the cost estimates for acquisition, construction, repair,

or renovation of a project cannot be finally determined at the

time the project is authorized for financing, the principal

amount of any issuance of obligations may be an amount not to

exceed 150 percent of the amount of the estimated cost for the

project being financed.

(d) Costs and expenses authorized by this section may not be

included in the principal amount unless the board finds that

those costs and expenses are necessary and reasonable at the time

the obligations are issued.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999. Amended by Acts 2001, 77th Leg., ch. 1420, Sec. 8.008, eff.

Sept. 1, 2001.

Sec. 1232.116. MANNER OF REPAYMENT. (a) The board may provide

for the payment of the principal of and interest on obligations

issued under this chapter:

(1) by pledging all or part of the revenue derived from:

(A) leasing a building or equipment to a state agency either

directly or through the commission; or

(B) selling equipment on an installment basis to a state agency

either directly or through the commission; or

(2) from any other funds lawfully available to the board.

(b) From funds appropriated for paying rental charges or making

installment payments on buildings or equipment, the commission or

an occupying or using state agency shall pay to the board a

rental or make installment payments on the buildings or

equipment.

installment payments. The amount must be sufficient to:

(1) pay the principal of and interest on the obligations;

(2) maintain any reserve fund required for servicing the

obligations; and

(3) reimburse the authority for other costs incurred by it with

respect to the obligations.

(d) When the commission or another state agency is required by

Subsection (b) to pay a rental to the authority and the

commission or other state agency depends on receiving a rental

from an occupying or using state agency to pay the authority, the

commission or other state agency shall set the rental in an

amount that is sufficient to pay the rental required by the

board.

(e) In addition to other sources of repayment provided by this

section, the legislature by law may direct that money in the

Texas capital trust fund account be used to pay the principal of

and interest on bonds issued under this chapter for the

acquisition or construction of a building.

(f) The legislature may require the deposit into the Texas

capital trust fund account of all or part of the proceeds of a

transaction concerning a building.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1232.117. STATE DEBT NOT CREATED. (a) An obligation

issued under this chapter is not a debt of the state or any state

agency, political corporation, or political subdivision of the

state and is not a pledge of the faith and credit of any of them.

A bond is payable solely from revenue as provided by this

chapter.

(b) An obligation issued under this chapter must contain on its

face a statement to the effect that:

(1) neither the state nor a state agency, political corporation,

or political subdivision of the state is obligated to pay the

principal of or interest on the obligation except as provided by

this chapter; and

(2) neither the faith and credit nor the taxing power of the

state or any state agency, political corporation, or political

subdivision of the state is pledged to the payment of the

principal of or interest on the obligation.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1232.118. ORDER OR RESOLUTION AUTHORIZING ISSUANCE OF

OBLIGATIONS. (a) An order or resolution of the board

authorizing the issuance of obligations, including refunding

obligations, may provide for the flow of funds and the

establishment and maintenance of the interest and sinking fund,

the reserve fund, and other funds.

(b) The order or resolution may:

(1) prohibit the issuance of additional obligations payable from

the pledged revenues; or

(2) preserve the right of the board to issue additional

obligations that are on a parity with or subordinate to the lien

and pledge on the revenue being used to support the obligations

being issued pursuant to the order or resolution.

covenant determined by the board.

(d) The board may make covenants with respect to the

obligations, the pledged revenues, and the operation and

maintenance of the buildings or equipment financed under this

chapter.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1232.119. ADOPTION AND EXECUTION OF INSTRUMENTS. The board

may adopt and have executed any other proceeding or instrument

necessary and convenient in the issuance of obligations.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1232.1191. DELEGATION OF AUTHORITY. (a) The board may

delegate authority to negotiate contracts required for issuance

of obligations to one or more of its employees or members.

(b) The negotiation of a contract described by Subsection (a),

including oral discussions with contractors, is not considered to

be a meeting or a deliberation.

Added by Acts 2001, 77th Leg., ch. 1420, Sec. 8.009(a), eff.

Sept. 1, 2001.

Sec. 1232.120. EXEMPTION FROM TAXATION. An obligation issued by

the board, any transaction relating to the obligation, and

profits made from the sale of the obligation are exempt from

taxation by this state or by a municipality or other political

subdivision of this state.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1232.121. CERTIFICATION AND DEPOSIT OF PROCEEDS OF

OBLIGATIONS. (a) After issuing obligations, the board shall

certify to the commission or the appropriate state agency and to

the comptroller that the proceeds from the issuance are

available. The board shall deposit the proceeds in the state

treasury.

(b) The proceeds shall be credited to the account of the state

agency that is responsible under an agreement for making rental

or installment payments to the authority.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1232.122. COMMENCEMENT OF CONSTRUCTION, PURCHASE, OR LEASE.

The acquisition or construction of a building or the purchase or

lease of equipment may begin after:

(1) the authority has certified that obligations in an amount

sufficient to pay the construction or purchase price of the

project have been authorized for issuance by the authority and

approved by the Bond Review Board; or

(2) the proceeds have been deposited into the state treasury

and:

(A) the comptroller has certified that the proceeds are

available;

(B) the reserve funds and capitalized interest, as certified by

the authority as reasonably required, have been paid; and

authority, have been paid.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999. Amended by Acts 2001, 77th Leg., ch. 1420, Sec. 8.010(a),

eff. Sept. 1, 2001.

Sec. 1232.123. INVESTMENT OF BOND PROCEEDS. (a) With the

board's concurrence, the comptroller shall invest the unexpended

bond proceeds and investment income on bond proceeds in

investments approved by law for the investment of state funds.

(b) Investment income that the board determines is needed to

finance the acquisition, construction, purchase, or lease of

buildings or equipment and that is not required to be rebated to

the federal government shall be credited to the account of the

appropriate state agency.

finance the acquisition, construction, purchase, or lease of

buildings or equipment and that is not required to be rebated to

the federal government shall be credited to and accounted for in

the state lease fund account.

(d) Notwithstanding Section 404.071, the interest earned on the

investment income that is deposited in the state lease fund

account shall be credited to and accounted for in that account.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1232.124. PREFERENCE FOR TEXAS BUSINESSES. If the

authority contracts with a private entity to issue bonds under

this chapter, the authority shall consider contracting with:

(1) an entity that has a place of business in this state; and

(2) a historically underutilized business as defined by Section

2161.001.

Added by Acts 2007, 80th Leg., R.S., Ch.

991, Sec. 6, eff. September 1, 2007.

SUBCHAPTER D. LEASE AND CONVEYANCE OF PROPERTY BY AUTHORITY

Sec. 1232.201. RENT AND FEES. (a) The commission or the

appropriate state agency shall establish schedules necessary to

properly charge occupying state agencies for the expenses

incurred in financing the acquisition or construction of

buildings in accordance with this chapter.

(b) An occupying state agency shall, when the payments are due,

pay to the commission, the appropriate state agency, or directly

into the state lease fund account the amount determined by the

commission. Instead of payments by an occupying state agency, the

legislature may appropriate money on the agency's behalf directly

to the state lease fund account.

under this section shall be deposited to the credit of the state

lease fund account.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1232.202. CONTRACTS CONTINGENT ON LEGISLATIVE

APPROPRIATIONS. (a) Each lease or installment sale contract

entered into under this chapter is contingent on the

legislature's appropriation of sufficient funds.

(b) The board may act as necessary to ensure that the payment of

the principal of and interest on obligations is continued without

interruption if:

(1) sufficient appropriated funds are unavailable;

(2) the commission or another state agency fails to pay a rental

or installment; or

(3) the commission or another state agency fails to renew a

lease contract.

(1) the re-leasing or subleasing of buildings or equipment to

any entity; and

(2) the repossession and resale of equipment to any entity.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1232.203. LEASE OF SPACE FOR CHILD CARE FACILITY. (a) The

commission, when acting under Chapter 663, is not an occupying

state agency for purposes of Section 1232.201.

(b) The commission or the appropriate state agency shall include

in the schedules developed under Section 1232.201(a) the method

of charging state agencies that occupy all or part of a building

to which Section 1232.201 applies for the space in the building

that is used for a child-care facility under Chapters 663, 2165,

and 2166.

part on the ratio of the number of the occupying agency's

employees who work in the building to the total number of state

employees who work in the building.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999. Amended by Acts 2001, 77th Leg., ch. 761, Sec. 6, eff.

Sept. 1, 2001.

Sec. 1232.204. LEASING PREFERENCE. A building owned by the

authority is considered state-owned space for the purposes of:

(1) Section 2165.107; and

(2) child-care facility sites located in state-owned buildings

under Chapters 663, 2165, and 2166.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1232.205. LEASE OF SPACE TO OUTSIDE ENTITIES. The board

may lease all or part of a building, the acquisition or

construction of which was financed under this chapter, to any

person if the building cannot be leased to the commission or

another state agency.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1232.206. PROPERTY CONVEYANCE. (a) When the principal of

and interest on obligations relating to equipment or a building

financed under this chapter are fully paid and the equipment or

building is free of all liens, the board shall certify to the

commission or the appropriate state agency that rentals,

payments, or installments are no longer required to pay the

principal of and interest on the obligations.

(b) When making the certification required by Subsection (a),

the board shall, if necessary and for $1, convey the title of the

equipment or building, including any real property, to the

commission or the appropriate state agency.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

State Codes and Statutes

State Codes and Statutes

State Codes and Statutes

State Codes and Statutes

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