CHAPTER 1433. BONDS FOR DEVELOPMENT OF EMPLOYMENT, INDUSTRIAL, AND HEALTH RESOURCES

State Codes and Statutes

Statutes > Texas > Government-code > Title-9-public-securities > Chapter-1433-bonds-for-development-of-employment-industrial-and-health-resources

GOVERNMENT CODE

TITLE 9. PUBLIC SECURITIES

SUBTITLE H. SPECIFIC AUTHORITY FOR MORE THAN ONE TYPE OF LOCAL

GOVERNMENT TO ISSUE SECURITIES

CHAPTER 1433. BONDS FOR DEVELOPMENT OF EMPLOYMENT, INDUSTRIAL,

AND HEALTH RESOURCES

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 1433.001. SHORT TITLE. This chapter may be cited as the

Act for Development of Employment, Industrial, and Health

Resources.

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

1999.

Sec. 1433.002. DEFINITIONS. In this chapter:

(1) "Department" means the Texas Department of Economic

Development.

(2) "District" means a conservation and reclamation district

established under Section 59, Article XVI, or Section 52, Article

III, Texas Constitution.

(3) "Governing body" means the commissioners court of a county

or the governing body of a municipality or district.

(4) "Industrial project" means the land, buildings, equipment,

facilities, and improvements found by the governing body to be

required or suitable for the promotion of industrial development

and for use by manufacturing or industrial enterprise, regardless

of whether the land, buildings, equipment, facilities, and

improvements are in existence when or are to be acquired or

constructed after the finding is made.

(5) "Issuer" means a municipality, county, or district.

(6) "Medical project" means the land, buildings, equipment,

facilities, and improvements found by the governing body to be

required for public health, research, and medical facilities

located in this state, regardless of whether the land, buildings,

equipment, facilities, and improvements are in existence when or

are to be acquired or constructed after the finding is made.

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

1999.

Sec. 1433.003. APPLICABILITY OF CHAPTER TO MUNICIPALITIES. This

chapter applies to a municipality only if the municipality:

(1) has the power to impose an ad valorem tax of not less than

$1.50 on each $100 valuation of taxable property in the

municipality; or

(2) is a home-rule municipality.

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

1999.

Sec. 1433.004. COST OF PROJECT. For purposes of this chapter,

the cost of an industrial project or medical project is:

(1) the cost of acquisitions for the project, including the cost

of the acquisition of all land, rights-of-way, property rights,

easements, and interests acquired for the construction;

(2) the cost of all machinery and equipment;

(3) financing charges;

(4) interest accruing before and during construction and until

the first anniversary of the date on which the construction is

completed;

(5) the cost of estimates, including estimates of revenue,

engineering and legal services, plans, specifications, surveys,

and other expenses necessary or incident to determining the

feasibility and practicability of constructing the project;

(6) administrative expenses; and

(7) other expenses that are necessary or incident to the

acquisition of the project, the financing of the acquisition, and

the placing of the project in operation.

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

1999.

Sec. 1433.005. ULTIMATE LESSEE. For purposes of this chapter,

an ultimate lessee is the person, firm, corporation, or company

that leases an industrial project or medical project from the

lessee of the project.

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

1999.

Sec. 1433.006. CORRECTION OF INVALID PROCEDURES. If a court

holds that any procedure under this chapter violates the

constitution of this state or the United States, the issuer by

resolution may provide an alternative procedure that conforms

with the constitution.

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

1999.

Sec. 1433.007. RELOCATION OR ALTERATION EXPENSE. If a

municipality, county, district, or other political subdivision,

in the exercise of a power under this chapter, including the

power of relocation, makes necessary the relocation or rerouting

of, or alteration of the construction of, a highway, railroad,

electric transmission line, telegraph or telephone property or

facility, or pipeline, the relocation or rerouting or alteration

of construction must be accomplished at the sole expense of the

political subdivision. In this section, "sole expense" means the

actual cost of the relocation or rerouting or alteration of

construction to provide comparable replacement without

enhancement of the facility, after deduction of the net salvage

value derived from the old facility.

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

1999.

Sec. 1433.008. USE OF STATE MONEY. (a) The legislature may not

appropriate money to pay all or a part of the obligation of an

issuer under this chapter.

(b) The department shall pay any expense it incurs under this

chapter from money appropriated to the department.

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

1999.

SUBCHAPTER B. POWERS OF ISSUER

Sec. 1433.021. ACQUISITION OF PROJECT; DISPOSITION. (a) An

issuer may acquire, by construction, purchase, devise, gift, or

lease or by more than one of those methods, an industrial project

or medical project that is located in this state and at least a

part of which is located within the issuer's territorial limits.

(b) For an issuer that is a municipality, an industrial project

or medical project may be located outside the municipality's

territorial limits if the project is within the municipality's

extraterritorial jurisdiction as determined under Subchapter B,

Chapter 42, Local Government Code.

acquired under this section and make an order relating to the

sale or conveyance that the issuer considers conducive to the

best interest of the issuer.

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

1999.

Sec. 1433.022. LIMITATIONS ON ACQUISITIONS. (a) An issuer may

not acquire an industrial project, or any part of an industrial

project, by eminent domain.

(b) Land previously acquired by an issuer by eminent domain may

be sold, leased, or otherwise used in accordance with this

chapter, if the governing body determines that:

(1) the use will not interfere with the purpose for which that

land was originally acquired or that the land is no longer needed

for that purpose;

(2) at least seven years have elapsed since the land was

acquired by eminent domain; and

(3) the land was not acquired for park purposes unless the sale

or lease of that land has been approved at an election held under

Section 1502.055.

or medical project for an individual, firm, partnership, or

corporation, or make or authorize a lease to an individual, firm,

partnership, or corporation if the effect of the lease of that

project is to remove the lessee's business from existing

facilities in this state.

(d) An issuer may not issue bonds to acquire existing facilities

for the purpose of leasing those facilities to the industrial

concern from which the facilities are acquired or to another

person controlled by the industrial concern.

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

1999. Amended by Acts 1999, 76th Leg., ch. 1064, Sec. 31, eff.

Sept. 1, 1999.

Sec. 1433.023. AUTHORITY TO ISSUE REVENUE BONDS. (a) Except as

provided by Subsection (b), an issuer may issue revenue bonds to

pay all or a part of the cost of acquiring, constructing,

enlarging, or improving an industrial project, including a

project in an enterprise zone designated under Chapter 2303, or a

medical project.

(b) A district may not authorize revenue bonds for a medical

project.

this chapter.

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

1999.

Sec. 1433.024. LEASE OF PROJECT. (a) An issuer may, in

accordance with this chapter, lease any or all of the issuer's

industrial projects and medical projects.

(b) An issuer may lease property under this chapter only to a

corporation organized under the Texas Non-Profit Corporation Act

(Article 1396-1.01 et seq., Vernon's Texas Civil Statutes).

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

1999.

Sec. 1433.025. ADVERTISING FOR CERTAIN CONTRACTS; PERFORMANCE

AND PAYMENT BONDS. (a) A contract for construction or purchase

under this chapter involving the expenditure of more than $2,000

may be made only after advertising in the manner provided by

Chapter 252, Local Government Code, or Subchapter C, Chapter 262,

Local Government Code, as applicable.

(b) The provisions of Chapter 2253 relating to performance and

payment bonds apply to construction contracts let by the issuer.

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

1999.

Sec. 1433.026. PROHIBITED OPERATIONS. An issuer may not operate

an industrial project as a business or in any manner other than

as the lessor of the project.

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

1999.

SUBCHAPTER C. PROCEDURE FOR ISSUING BONDS

Sec. 1433.041. DEPARTMENT APPROVAL OF LEASE; APPEAL. (a) An

issuer may not begin proceedings to authorize bonds under Section

1433.044 or 1433.061 until the department has given tentative

approval to the suggested contents of the lease agreement, and if

a lessee is allowed to sublease, the department has tentatively

approved the financial responsibility of the ultimate lessee. The

department shall investigate a proposed acquisition of existing

facilities for compliance with Section 1433.022(d) before

tentatively approving an industrial project or medical project.

(b) The department may not give final approval to any agreement

unless the department affirmatively finds that the lessee and

ultimate lessee have the business experience, financial

resources, and responsibility to provide reasonable assurance

that all bonds and interest on the bonds to be paid from or

because of that agreement will be paid as they become due.

under this chapter until the department has given final approval

to the lease agreement and may not approve the bonds if the

provisions for security and payment of lease payments do not

conform with this chapter.

(d) An issuer may appeal any adverse ruling or decision of the

department under this section to a district court in Travis

County. The substantial evidence rule applies to an appeal under

this subsection.

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

1999.

Sec. 1433.042. REGULATION OF LEASES. The department by rule

shall adopt minimum standards for lease agreements and guidelines

relating to financial responsibilities of the lessee and any

ultimate lessee.

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

1999.

Sec. 1433.043. ISSUER'S AUTHORITY. (a) An issuer may issue

bonds under this chapter without obtaining the consent of any

department, division, commission, board, bureau, or agency of the

state, other than the attorney general under Chapter 1202 or the

department, and without any proceedings or satisfying any

condition precedent other than the proceedings and conditions

required by:

(1) this chapter;

(2) Subchapter B or D, Chapter 1201; or

(3) Chapter 1204.

(b) Except as provided by this chapter or by department rule,

each governing body has complete authority with respect to bonds

and lease agreements governed by this chapter.

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

1999.

Sec. 1433.044. BOND RESOLUTION; CALLING ELECTION; PUBLICATION OF

RESOLUTION. (a) Before issuing bonds under this chapter, a

governing body shall adopt a resolution declaring its intention

to issue the bonds.

(b) The resolution must specify:

(1) the amount of bonds proposed to be issued;

(2) the purpose for which the bonds are to be issued; and

(3) the date on which the governing body proposes to authorize

the issuance of the bonds.

the bonds.

(d) If an election is not called under Subsection (c), the

governing body shall publish the resolution once a week for at

least two consecutive weeks in at least one newspaper of general

circulation in the territorial limits of the issuer. The first

publication must be not less than 14 days before the date

specified in the resolution for the authorization of the bonds.

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

1999.

Sec. 1433.045. PROTEST. (a) If at least 10 percent of the

registered voters of the issuer file a written protest against

the issuance of the bonds on or before the date specified for the

authorization of the bonds, the governing body shall hold an

election on the issuance of the bonds.

(b) If a written protest is not filed, the bonds may be issued

without an election at any time before the second anniversary of

the date specified in the resolution.

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

1999.

Sec. 1433.046. ELECTION ORDER. In addition to the requirements

provided by Chapter 3, Election Code, an order calling an

election under this subchapter must include the location of each

polling place and the election judges and clerks appointed for

each polling place.

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

1999.

Sec. 1433.047. NOTICE OF ELECTION. Notice of an election under

this subchapter shall be published once a week for at least two

consecutive weeks, in at least one newspaper of general

circulation within the territorial limits of the issuer. The

first publication must be not less than 14 days before the date

of the election.

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

1999.

Sec. 1433.048. BALLOT PROPOSITION; ELECTION PROCEDURES. (a)

The ballot for an election held under this subchapter shall be

printed to permit voting for or against the proposition: "The

issuance of revenue bonds for the (medical project or industrial

project)."

(b) The election shall be conducted in accordance with the

general laws of this state relating to general elections, except

as modified by this chapter.

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

1999.

Sec. 1433.049. RESULTS OF ELECTION. (a) Within 10 days after

the election, or as soon after that as possible, the governing

body of the issuer shall convene and canvass the returns of the

election.

(b) If a majority of the voters voting in a bond election vote

in favor of the proposition, the governing body shall find and

declare that the results favor the proposition, and subject to

Section 1433.041, the governing body may proceed with the

authorization of the bonds.

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

1999.

SUBCHAPTER D. BONDS

Sec. 1433.061. ISSUANCE OF BONDS. (a) A series of bonds may be

issued for each industrial project or medical project. Any

projects may be combined in a single series of bonds if the

governing body considers the combination to be in the best

interest of the issuer, but each project shall be considered

separately with respect to this subsection and Subchapter C.

(b) Bonds must be issued and delivered before the third

anniversary of the later of the date of the tentative approval of

the department or the date of the final judgment of any

litigation affecting the validity of the bonds or the provision

made for their payment. This subsection does not prohibit the

department from conditioning its approval of an industrial

project or medical project on the completion of the financing of

the project within a shorter period.

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

1999.

Sec. 1433.062. MONEY USED TO PAY BONDS; PROHIBITION ON CERTAIN

OBLIGATIONS. (a) The principal of and the interest on bonds

authorized under this chapter are payable only from the money

provided for that payment and from the revenue of the industrial

project or medical project for which the bonds were authorized.

(b) An issuer may not incur financial obligations that cannot be

paid from revenue from the lease of an industrial project or

medical project.

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

1999.

Sec. 1433.063. BONDS NOT DEBT OF STATE OR ISSUER. (a) A bond

issued under this chapter is not a debt or a pledge of the faith

and credit of this state, the issuer, or any other political

subdivision or agency of this state.

(b) A bond issued under this chapter must contain on its face a

statement that:

(1) this state, the issuer, or any other political subdivision

or agency of this state is not obligated to pay the principal of

or the interest on the bond except from revenue of the industrial

project or medical project for which the bond is issued; and

(2) the faith and credit and the taxing power of this state, the

issuer, or any other political subdivision or agency of this

state are not pledged to the payment of the principal of or the

interest on the bond.

substantially the following language: "No pecuniary obligation is

or may be imposed on the issuer of this bond in the event of a

failure to pay all or part of the principal or interest on the

bond, except that the issuer is obligated to apply rental income

it receives from the (industrial project or medical project) to

those purposes."

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

1999.

Sec. 1433.064. MATURITY. A bond issued under this chapter must

mature not later than 40 years after its date.

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

1999.

Sec. 1433.065. SALE OF BONDS. Bonds issued under this chapter

shall be sold to the highest bidder for cash and may not be

exchanged for property.

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

1999.

Sec. 1433.066. INTERIM RECEIPTS; TEMPORARY BONDS. Before the

preparation of definitive bonds, an issuer may, under the

restrictions applicable to the definitive bonds, issue interim

receipts or temporary bonds, with or without coupons,

exchangeable for definitive bonds when the definitive bonds are

executed and available for delivery.

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

1999.

Sec. 1433.067. USE OF BOND PROCEEDS. The proceeds of the bonds

of each issue may be used only for the payment of the cost of the

industrial project or medical project for which the bonds were

issued, and shall be disbursed in the manner and under any

restrictions provided in the resolution authorizing the issuance

of the bonds or in the trust agreement securing the bonds. Any

proceeds of the bonds of an issue that exceed the cost of the

project for which the bonds were issued shall be deposited to the

credit of the sinking fund for those bonds.

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

1999.

Sec. 1433.068. REFUNDING BONDS. (a) An issuer by resolution

may provide for the issuance of revenue refunding bonds to:

(1) refund any outstanding bonds issued under this chapter; and

(2) construct improvements, extensions, or enlargements to the

industrial project or medical project in connection with which

the bonds being refunded were issued.

(b) An issuer may issue revenue refunding bonds in exchange for

outstanding bonds, notwithstanding Section 1433.065, or the

issuer may use the proceeds from the sale of the revenue

refunding bonds to redeem outstanding bonds.

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

1999.

Sec. 1433.069. EXEMPTIONS FROM TAXATION AND SECURITIES ACT. (a)

A bond issued under this chapter and the issuance and transfer

of the bond, including any profit made in the sale of the bond,

are exempt from taxation by this state or by a political

subdivision of this state.

(b) A bond issued under this chapter and any coupon representing

interest on the bond are exempt securities under The Securities

Act (Article 581-1 et seq., Vernon's Texas Civil Statutes).

The Securities Act (Article 581-1 et seq., Vernon's Texas Civil

Statutes).

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

1999.

SUBCHAPTER E. AGREEMENTS RELATING TO BONDS

Sec. 1433.101. SECURITY FOR BOND; TRUST AGREEMENT. (a) A bond

issued under this chapter may be secured by a trust agreement

between the issuer and a trust company or a bank having the

powers of a trust company in this state.

(b) A trust agreement may:

(1) assign the lease revenue to be received from the lessee or

the ultimate lessee of the industrial project or medical project

for which the bond proceeds are used; or

(2) pledge the lease revenue for the payment of principal of and

interest on the bond as they become due and payable and may

provide for the creation and maintenance of reserves for that

purpose.

of the bonds may contain provisions for protecting and enforcing

the rights and remedies of the bondholders, including covenants

that state the duties of the issuer or lessee relating to:

(1) the acquisition of property for the industrial project or

medical project in connection with which the bonds were

authorized;

(2) the construction, improvement, maintenance, repair,

operation, and insurance of the project; and

(3) the custody, protection, and application of all money

related to the project.

(d) An issuer may require a bank or trust company incorporated

under the laws of this state that acts as depository of the

proceeds of the bonds or of revenue of the issuer to furnish

indemnifying bonds or to pledge securities.

(e) A trust agreement may state the rights and remedies of the

bondholders and of the trustee, and may restrict the individual

right of action by bondholders as is customary in trust

agreements or trust indentures securing bonds and debentures of

corporations. A trust agreement may contain additional provisions

for the security of the bondholders.

(f) All expenses incurred in carrying out a trust agreement may

be treated as a part of the cost of the operation of the

industrial project or medical project.

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

1999.

Sec. 1433.102. DEFAULT IN LEASE AGREEMENT OR MORTGAGE;

ENFORCEMENT. (a) An agreement relating to an industrial project

or medical project between the issuer and the lessee or between a

lessee and ultimate lessee must be for the benefit of the issuer.

The agreement must provide that, in the event of a default in the

payment of the principal of or the interest on the bonds or in

the performance of any agreement contained in a proceeding,

mortgage, or instrument, the payment or performance may be

enforced by mandamus or by the appointment of a receiver with the

power to charge rents and to apply the revenue from the project

in accordance with the resolution, mortgage, or instrument.

(b) A mortgage to secure bonds issued under this chapter may

also provide that, in the event of a default in the payment of

the mortgage or a violation of an agreement contained in the

mortgage, the mortgage may be foreclosed and the property

securing the bonds may be sold in any manner permitted by law.

The mortgage may provide that a trustee under the mortgage or the

holder of any of the bonds secured by the mortgage may purchase

the property at a foreclosure sale if the person is the highest

bidder.

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

1999.

Sec. 1433.103. PURCHASE OPTION. (a) An issuer may grant a

lessee or ultimate lessee an option to purchase all or a part of

an industrial project or medical project when all bonds of the

issuer delivered to provide those facilities have been paid or

provision has been made for their final payment, if, while the

bonds or interest on the bonds remains unpaid, the lease rentals

are paid in the manner required and when the rentals become due.

(b) For purposes of this section, a payment is considered to be

paid in the manner required and when it becomes due if no event

of default is declared and the payment is made within 15 calendar

days of the date it is scheduled to become due.

an option to purchase an industrial project or medical project.

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

Loading..

Loading, Please Wait!