CHAPTER 203. FINANCING AND FUNDS

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LABOR CODE

TITLE 4. EMPLOYMENT SERVICES AND UNEMPLOYMENT

SUBTITLE A. TEXAS UNEMPLOYMENT COMPENSATION ACT

CHAPTER 203. FINANCING AND FUNDS

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 203.001. DEFINITIONS. In this chapter:

(1) "Administration fund" means the unemployment compensation

administration fund created under Section 203.151.

(2) "Federal trust fund" means the unemployment trust fund

created under Section 904, Social Security Act (42 U.S.C. Section

1104).

(3) "Special administration fund" means the unemployment

compensation special administration fund created under Section

203.201.

(4) Repealed by Acts 1997, 75th Leg., ch. 1423, Sec. 12.14, eff.

Sept. 1, 1997.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.

Amended by Acts 1997, 75th Leg., ch. 1423, Sec. 12.14, eff. Sept.

1, 1997.

Sec. 203.002. DUTIES OF COMPTROLLER. (a) The comptroller is

treasurer and custodian of the compensation fund and the special

administration fund and shall administer the funds in accordance

with the directions of the commission.

(b) The comptroller shall issue warrants on the compensation

fund in accordance with rules adopted by the commission.

administration fund in accordance with the directions of the

commission.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.

Amended by Acts 1997, 75th Leg., ch. 1423, Sec. 12.01, eff. Sept.

1, 1997.

Sec. 203.003. COMPTROLLER'S BOND LIABILITY. The comptroller is

liable on the comptroller's official bond for the faithful

performance of the comptroller's duties under this subtitle in

connection with the compensation fund, the administration fund,

and the special administration fund. This liability is in

addition to liability on any separate bond that the comptroller

may give.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.

Amended by Acts 1997, 75th Leg., ch. 1423, Sec. 12.02, eff. Sept.

1, 1997.

Sec. 203.004. DEPOSIT OF FUNDS; EXCEPTION. All money paid to

the commission under this subtitle:

(1) shall be deposited in the treasury unless:

(A) a state or federal law prohibits deposit in the treasury; or

(B) the deposit would result in the loss of any federal funds;

and

(2) may be used only for the administration of this subtitle.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.

Sec. 203.005. APPLICATION OF OTHER LAW. Money in the

compensation fund, the administration fund, and the special

administration fund shall be deposited, administered, and

disbursed in the same manner and under the same requirements as

provided by law for other special funds in the state treasury.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.

SUBCHAPTER B. UNEMPLOYMENT COMPENSATION FUND

Sec. 203.021. UNEMPLOYMENT COMPENSATION FUND; SEPARATE ACCOUNTS.

(a) The unemployment compensation fund is a special fund.

(b) The compensation fund consists of:

(1) contributions collected under this subtitle;

(2) interest earned on money in the compensation fund;

(3) property or securities acquired through the use of money in

the compensation fund;

(4) earnings of property or securities described by Subdivision

(3);

(5) amounts recovered for losses sustained by the compensation

fund; and

(6) other money received for the compensation fund from any

other source.

undivided.

(d) The comptroller shall maintain in the compensation fund:

(1) a clearing account;

(2) a federal trust fund account; and

(3) a benefit account.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.

Amended by Acts 1997, 75th Leg., ch. 1423, Sec. 12.03, eff. Sept.

1, 1997.

Sec. 203.022. COMPOSITION AND USE OF CLEARING ACCOUNT. (a) On

receipt of any money payable to the compensation fund, the

commission shall forward the money to the comptroller, who shall

immediately deposit it in the clearing account.

(b) Except as provided by Section 203.026, money in the clearing

account, after it has cleared, shall be immediately deposited

with the United States secretary of the treasury to the credit of

this state's account in the federal trust fund. This section

prevails over any conflicting state statute relating to the

deposit, administration, release, or disbursement of money in the

possession or custody of this state.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.

Amended by Acts 1997, 75th Leg., ch. 1423, Sec. 12.04, eff. Sept.

1, 1997.

Sec. 203.023. REQUISITIONS FROM FEDERAL TRUST FUND; BENEFIT

ACCOUNT. (a) The commission periodically shall requisition from

the federal trust fund amounts the commission considers necessary

for the payment of benefits and refunds for a reasonable period.

The commission may not requisition an amount exceeding the

balance of this state's account in the federal trust fund.

(b) The benefit account is composed of money requisitioned from

this state's account in the federal trust fund.

fund, the comptroller shall deposit it in the benefit account.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.

Amended by Acts 1997, 75th Leg., ch. 1423, Sec. 12.05, eff. Sept.

1, 1997.

Sec. 203.024. DEPOSITS. (a) Except as otherwise provided by

this subchapter, the comptroller, under the direction of the

commission, may deposit money credited to the clearing and

benefit accounts in a bank or public depository in which general

funds of this state may be deposited.

(b) A public deposit insurance charge or premium may not be paid

out of the compensation fund.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.

Amended by Acts 1997, 75th Leg., ch. 1423, Sec. 12.06, eff. Sept.

1, 1997.

Sec. 203.025. USE OF REQUISITIONED MONEY. (a) The commission

shall direct the administration of the compensation fund

exclusively for the purposes of this subtitle.

(b) Money requisitioned from this state's account in the federal

trust fund may be used only for the payment of benefits or for

refunds as provided by Sections 203.023, 203.026, 203.027, and

203.203 and by Subchapter B, Chapter 210, and Subchapter E,

Chapter 213 except that money credited to this state's account as

provided by Section 903, Social Security Act (42 U.S.C. Section

1103), may be requisitioned and used by the commission only to

the extent and under the conditions prescribed by that section.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.

Sec. 203.026. ACCOUNTS FROM WHICH BENEFITS AND REFUNDS ARE PAID.

(a) The comptroller may issue a warrant for a benefit only from

the benefit account.

(b) As directed by the commission, the comptroller may issue a

warrant for a refund as provided by Subchapter E, Chapter 213,

from the benefit account or the clearing account.

clearing account is not subject to a law that requires

itemization or other formal release by a state officer of money

in the officer's custody.

(d) Repealed by Acts 1995, 74th Leg., ch. 76, Sec. 9.28(a), eff.

Sept. 1, 1995.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.

Amended by Acts 1995, 74th Leg., ch. 76, Sec. 9.28(a), eff. Sept.

1, 1995.

Sec. 203.027. UNEXPENDED BALANCE OF BENEFIT ACCOUNT. Money

requisitioned from the federal trust fund that remains unclaimed

or unpaid in the benefit account after the end of the period for

which the money was requisitioned shall be, in the commission's

discretion:

(1) deducted from an estimate for the succeeding periods and

used to pay benefits and refunds in those periods; or

(2) redeposited in the federal trust fund as provided by Section

203.022.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.

Sec. 203.028. SOLVENCY OF COMPENSATION FUND; RESERVE. (a) If

the commission believes that a change in contribution or benefit

rates will become necessary to protect the solvency of the

compensation fund, it shall inform the governor and legislature

of its belief and when the change will become necessary and shall

make recommendations for the necessary change.

(b) The commission, if possible, shall maintain in the

compensation fund a reserve against the liability to pay benefits

in future years in excess of current contributions. The

commission shall create the reserve according to accepted

actuarial principles using statistics of employment, business

activity, and other relevant factors for the longest possible

period.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.

Sec. 203.029. REFUND OF CONTRIBUTIONS TO FEDERAL

INSTRUMENTALITY. If this state is not certified for any year by

the United States secretary of labor as required under Section

3304(c), Internal Revenue Code of 1986 (26 U.S.C. Section

3304(c)), the commission shall refund from the compensation fund

a payment required of an instrumentality of the federal

government for that year in the same manner and within the same

period as provided by Subchapter E, Chapter 213, for

contributions erroneously collected.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.

Sec. 203.030. REIMBURSEMENT FROM OR TO COMPENSATION FUND UNDER

RECIPROCAL ARRANGEMENT. (a) The commission may reimburse a

state or federal agency from the compensation fund or receive a

reimbursement from a state or federal agency for the compensation

fund under an arrangement under Section 211.003.

(b) A reimbursement paid from the compensation fund under this

section is a benefit for the purposes of this subtitle.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.

Sec. 203.031. NONLIABILITY OF STATE. Benefits are due and

payable only to the extent money is available for that purpose in

the compensation fund. Neither this state nor the commission is

liable for any amount in excess of the amount in that fund.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.

Sec. 203.032. MANAGEMENT OF COMPENSATION FUND ON DISCONTINUANCE

OF FEDERAL TRUST FUND. (a) To the extent that a provision of

this subchapter relates to the federal trust fund, the provision

is operative only as long as:

(1) the federal trust fund exists; and

(2) the United States secretary of the treasury maintains for

this state a separate book account of all funds deposited in the

federal trust fund by this state for benefit purposes, with this

state's proportionate share of the earnings of the federal trust

fund, from which no other state is permitted to make withdrawals.

(b) If the federal trust fund ceases to exist or the secretary

of the treasury ceases to maintain a separate book account for

this state in the federal trust fund, all money, property, or

securities in the federal trust fund that belong to the

compensation fund shall be transferred to the comptroller. The

comptroller shall hold, invest, transfer, deposit, and release

the money, property, or securities in a manner approved by the

commission in accordance with this subtitle.

invested in readily marketable bonds or other interest-bearing

obligations of the United States of America. The money shall be

invested in such a manner that the assets of the compensation

fund are readily convertible at all times into cash as needed for

the payment of benefits.

(d) The comptroller may dispose of securities or other property

belonging to the compensation fund only under the direction of

the commission.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.

Amended by Acts 1997, 75th Leg., ch. 1423, Sec. 12.07, eff. Sept.

1, 1997.

SUBCHAPTER C. ADVANCES FROM FEDERAL TRUST FUND AND OBLIGATION

ASSESSMENT

Sec. 203.101. LIMIT ON APPLICATION FOR ADVANCE. In any

application for an advance from the federal trust fund (Section

1201, Social Security Act (42 U.S.C. Section 1321)), the governor

shall limit the amount of the application to an amount that, when

added to previous advances, does not exceed the amount for which

principal and interest may be paid from taxes on employers.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.

Sec. 203.102. OBLIGATION TRUST FUND. (a) The obligation trust

fund is a dedicated trust fund outside of the state treasury in

the custody of the comptroller. The obligation trust fund is

composed of:

(1) revenue received under Section 203.105; and

(2) any surplus revenue transferred from the compensation fund

under Section 204.065.

(b) The commission and governor may use money in the obligation

trust fund without legislative appropriation to pay:

(1) bond obligations and bond administrative expenses; and

(2) principal and interest incurred on advances from the federal

trust fund.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.

Amended by Acts 1995, 74th Leg., ch. 1004, Sec. 1, eff. Sept. 1,

1995; Acts 1997, 75th Leg., ch. 1423, Sec. 12.08, eff. Sept. 1,

1997; Acts 2003, 78th Leg., ch. 317, Sec. 2, eff. June 18, 2003;

Acts 2003, 78th Leg., ch. 817, Sec. 6.02, eff. June 20, 2003.

Amended by:

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

34, Sec. 1, eff. May 4, 2007.

Sec. 203.104. LIMITATION ON TRANSFER FROM OBLIGATION TRUST FUND

TO COMPENSATION FUND. An amount that is attributable to the

portion of the unemployment obligation assessment authorized by

Section 203.105(a)(2) may not be transferred to the compensation

fund unless all bond obligations, including bond administrative

expenses, have been fully paid and satisfied. After the

obligations have been fully satisfied, the commission shall

transfer the balance of the obligation trust fund to the

compensation fund.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.

Amended by Acts 2003, 78th Leg., ch. 317, Sec. 3, eff. June 18,

2003; Acts 2003, 78th Leg., ch. 817, Sec. 6.03, eff. June 20,

2003.

Sec. 203.105. UNEMPLOYMENT OBLIGATION ASSESSMENT. (a) An

unemployment obligation assessment shall be imposed as provided

by this section if after January 1 of a year:

(1) an interest payment on an advance from the federal trust

fund will be due and the estimated amount necessary to make the

interest payment is not available in the obligation trust fund or

available otherwise; or

(2) bond obligations are due and the amount necessary to pay in

full those obligations, including bond administrative expenses,

is not available in the obligation trust fund or available

otherwise.

(b) The unemployment obligation assessment rate is the total of

the amounts required to make the payments necessary under

Subsections (a)(1) and (2). The commission shall set the

unemployment obligation assessment rate in an amount sufficient

to ensure timely payment of interest under Subsection (a)(1), but

not exceeding two-tenths of one percent. The commission shall set

the unemployment obligation assessment rate in an amount

sufficient to ensure timely payment of the bond obligations,

including administrative expenses, and to provide an amount

necessary in the commission's judgment to enhance investor

acceptance of the bonds. The rate shall be based on a formula

prescribed by commission rule, using the employer's experience

rating from the previous year. The unemployment obligation

assessment rate applies to the same wage base to which the

employer's unemployment tax applies for the year.

time, collected in the same manner, and subject to the same

penalties and interest as other contributions assessed under this

subtitle.

(d) Revenue from the unemployment obligation assessment under

this section shall be deposited to the credit of the obligation

trust fund under Section 203.102.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.

Amended by Acts 2003, 78th Leg., ch. 317, Sec. 4, eff. June 18,

2003; Acts 2003, 78th Leg., ch. 817, Sec. 6.04, eff. June 20,

2003.

SUBCHAPTER D. ADMINISTRATION FUND

Sec. 203.151. ADMINISTRATION FUND. (a) The unemployment

compensation administration fund is a special fund in the state

treasury.

(b) The administration fund consists of money:

(1) appropriated to the administration fund by this state;

(2) received from the United States or any federal agency for

the administration of this subtitle;

(3) collected by the commission as fees for furnishing

photostatic or certified copies of commission records;

(4) collected by the commission as fees for conducting audits

under the authority granted by this subtitle;

(5) received from any federal agency or any agency of another

state as compensation for services or facilities supplied to the

agency;

(6) received under any surety bond or insurance policy or from

other sources:

(A) for losses sustained by the administration fund; or

(B) by reason of damage to equipment or supplies purchased with

money in the administration fund;

(7) received as proceeds from the sale or disposition of

equipment or supplies that are no longer necessary for the proper

administration of this subtitle, if the equipment or supplies

were purchased with money in the administration fund; and

(8) received from any other source for the administration of

this subtitle.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.

Sec. 203.152. USE OF ADMINISTRATION FUND. (a) Money credited

to the administration fund may be used by the commission as

provided by this subtitle and may not be transferred to any other

fund.

(b) Money in the administration fund received from the federal

government or a federal agency may be spent only for the purposes

and in the amounts found necessary by the United States secretary

of labor or that secretary's successor for the proper and

efficient administration of this subtitle.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.

Sec. 203.154. REIMBURSEMENT OF ADMINISTRATION FUND. (a) If the

United States secretary of labor or that secretary's successor

finds that money received from the secretary or the secretary's

successor under Title III of the Social Security Act (42 U.S.C.

Section 501 et seq.) or any other federal money granted to the

commission for the administration of this subtitle has been lost

or spent for a purpose other than, or in an amount in excess of,

that found necessary for the proper administration of this

subtitle by the secretary or the secretary's successor, the money

shall be replaced by money appropriated for that purpose from the

general funds of this state to the administration fund for

expenditure as provided by Section 203.152.

(b) On receipt of notice that the secretary or the secretary's

successor has made a determination described in Subsection (a),

the commission shall promptly report the amount needed for

reimbursement to the governor. The governor, at the earliest

opportunity, shall submit to the legislature a request for the

appropriation of that amount.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.

SUBCHAPTER E. SPECIAL ADMINISTRATION FUND

Sec. 203.201. SPECIAL ADMINISTRATION FUND. (a) The

unemployment compensation special administration fund is a

special fund.

(b) The special administration fund consists of:

(1) all interest and penalties collected under this subtitle;

(2) any amounts received under any surety bond for losses

sustained by the special administration fund; and

(3) money transferred under Section 203.103.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.

Sec. 203.202. USE OF SPECIAL ADMINISTRATION FUND. (a) Money in

the special administration fund may be spent in accordance with

this subtitle and may be used:

(1) to pay the cost of reimbursing the benefit account in the

compensation fund for benefits paid to former employees of this

state that are based on service for this state, and the cost of

construction and purchase of buildings and land necessary for

that administration;

(2) in the administration of Chapters 51, 61, and 62;

(3) for payment of interest on advances from the federal trust

fund;

(4) as a revolving fund to cover expenditures that are necessary

and proper under this subtitle and for which federal funds have

been requested but not received, subject to the charging of the

expenditures against the federal funds when received;

(5) to refund a penalty as provided by Section 203.203; and

(6) subject to the provisions of Chapter 2107, Government Code,

to pay persons who contract with the commission to collect

delinquent unemployment taxes, penalties, and interest owed under

this subtitle.

(b) Money in the special administration fund may not be spent in

any manner that would permit its substitution for, or a

corresponding reduction in, federal funds that would, in the

absence of that money, be available to finance expenditures for

the administration of this subtitle.

authorize to be charged against the special administration fund

any expenditure the commission considers proper in the interest

of good administration of this subtitle if the resolution states

that no other funds are available for the expenditure.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.

Amended by Acts 1997, 75th Leg., ch. 94, Sec. 2, eff. Sept. 1,

1997.

Sec. 203.203. REFUND OF PENALTIES. A refund under Subchapter E,

Chapter 213 of a penalty that has been erroneously collected and

deposited to the credit of the special administration fund shall

be made, without interest, from the special administration fund.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.

SUBCHAPTER F. ISSUANCE OF FINANCIAL OBLIGATIONS FOR UNEMPLOYMENT

COMPENSATION FUND

Sec. 203.251. FINDINGS AND PURPOSE. (a) The legislature finds

that:

(1) it is an essential governmental function to maintain funds

in an amount sufficient to pay unemployment benefits when due;

(2) at the time of the enactment of this subchapter, borrowing

from the federal government was the only option available to

obtain sufficient funds to pay benefits when the balance in the

compensation fund is depleted;

(3) alternative methods of replenishing the unemployment

compensation fund may reduce the costs of providing unemployment

benefits and employers' cost of doing business in the state; and

(4) funds representing revenues received from the unemployment

obligation assessment authorized under this subchapter and any

income from the investment of those funds are not state property.

(b) The purpose of this subchapter is to provide appropriate

methods through which the state may continue the unemployment

compensation program at the lowest possible cost to the state and

employers in the state.

Added by Acts 2003, 78th Leg., ch. 317, Sec. 5, eff. June 18,

2003; Acts 2003, 78th Leg., ch. 817, Sec. 6.05, eff. June 20,

2003.

Sec. 203.252. DEFINITIONS; GENERAL PROVISION. (a) In this

subchapter:

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

(2) "Bond" means any type of revenue obligation, including a

bond, note, certificate, or other instrument, payable from and

secured by a pledge of revenues received from the unemployment

obligation assessment and amounts on deposit in the obligation

trust fund to the extent provided in the proceedings authorizing

the obligation.

(3) "Bond administrative expenses" means expenses incurred to

administer bonds issued under this subchapter, including fees for

paying agents, trustees, and attorneys, and for other

professional services necessary to ensure compliance with

applicable state or federal law.

(4) "Bond obligations" means the principal of a bond and any

premium and interest on a bond issued under this subchapter,

together with any amount owed under a related credit agreement.

(5) "Credit agreement" means a loan agreement, a revolving

credit agreement, an agreement establishing a line of credit, a

letter of credit, an interest rate swap agreement, an interest

rate lock agreement, a currency swap agreement, a forward payment

conversion agreement, an agreement to provide payments based on

levels of or changes in interest rates or currency exchange

rates, an agreement to exchange cash flows or a series of

payments, an option, put, or call to hedge payment, currency,

interest rate, or other exposure, or another agreement that

enhances the marketability, security, or creditworthiness of a

bond issued under this subchapter.

(b) An amount owed by the authority under a credit agreement

shall be payable from and secured by a pledge of revenues

received from the unemployment obligation assessment and amounts

on deposit in the obligation trust fund to the extent provided in

the proceedings authorizing the credit agreement.

Added by Acts 2003, 78th Leg., ch. 317, Sec. 5, eff. June 18,

2003; Acts 2003, 78th Leg., ch. 817, Sec. 6.05, eff. June 20,

2003.

Sec. 203.253. REQUEST FOR BOND ISSUANCE. (a) If the commission

determines that the issuance of bonds is necessary to reduce or

avoid the need to borrow or obtain a federal advance under

Section 1201, Social Security Act (42 U.S.C. Section 1321), as

amended, or any similar federal law, or to refinance a previous

loan or advance received by the commission and that bond

financing is the most cost-effective method of funding the

payment of benefits, the commission may request the authority to

issue bonds on its behalf. Before making a request of the

authority under this subsection, the commission must by

resolution determine that the issuance of bonds for the purposes

established by this section will result in a savings to the state

and to employers in this state as compared to the cost of

borrowing or obtaining an advance under Section 1201, Social

Security Act (42 U.S.C. Section 1321), as amended, or any similar

federal law.

(b) The commission shall specify in the commission's request to

the authority the maximum principal amount of the bonds, not to

exceed $2 billion for any separate bond issue, and the maximum

term of the bonds, not to exceed 10 years.

Subsection (b) may be increased to include an amount sufficient

to:

(1) pay the costs of issuance of the authority;

(2) provide a bond reserve fund; and

(3) capitalize interest for the period determined necessary by

the commission, not to exceed two years.

Added by Acts 2003, 78th Leg., ch. 317, Sec. 5, eff. June 18,

2003; Acts 2003, 78th Leg., ch. 817, Sec. 6.05, eff. June 20,

2003.

Sec. 203.254. ISSUANCE OF BONDS BY AUTHORITY. (a) The

authority shall issue bonds on request by the commission, in

accordance with the requirements of Chapter 1232, Government

Code, and other provisions of Title 9, Government Code, that

apply to bond issuance by a state agency.

(b) The authority shall determine the method of sale, type of

bond, bond form, maximum interest rates, and other terms of the

bonds that, in the authority's judgment, best achieve the

economic goals of the commission and effect the borrowing at the

lowest practicable cost.

connection with the bonds.

Added by Acts 2003, 78th Leg., ch. 317, Sec. 5, eff. June 18,

2003; Acts 2003, 78th Leg., ch. 817, Sec. 6.05, eff. June 20,

2003.

Sec. 203.255. BOND PROCEEDS. (a) The proceeds of bonds issued

by the authority under this subchapter may be deposited with a

trustee selected by the authority and the commission or held by

the comptroller in a dedicated trust fund outside the state

treasury in the custody of the comptroller.

(b) Bond proceeds, including investment income, shall be held in

trust for the exclusive use and benefit of the commission. The

commission may use the proceeds to:

(1) repay the principal and interest of previous advances from

the federal trust fund;

(2) pay unemployment benefits by depositing the proceeds in the

unemployment compensation fund, as defined in Subchapter B;

(3) pay the costs of issuing the bonds;

(4) provide a bond reserve; and

(5) pay capitalized interest on the bonds for the period

determined necessary by the commission, not to exceed two years.

bonds were issued is satisfied may be used to purchase or redeem

outstanding bonds.

(d) If there are no outstanding bonds or bond interest to be

paid, the remaining proceeds shall be transferred to the

unemployment compensation fund.

Added by Acts 2003, 78th Leg., ch. 317, Sec. 5, eff. June 18,

2003; Acts 2003, 78th Leg., ch. 817, Sec. 6.05, eff. June 20,

2003.

Sec. 203.256. REPAYMENT OF COMMISSION'S FINANCIAL OBLIGATIONS.

(a) The commission shall assess an unemployment obligation

assessment annually on each employer entitled to an experience

rating under Chapter 204 if any bonds issued under this

subchapter are outstanding.

(b) With regard to outstanding bonds issued by the authority

under this subchapter, the authority shall notify the commission

of the amount of the bond obligations and the estimated amount of

bond administrative expenses each year in sufficient time, as

determined by the commission, to permit the commission to assess

the annual rate of the unemployment obligation assessment,

subject to verification by a financial advisor of the commission

or as otherwise specified in the proceedings authorizing the

bonds.

unemployment obligation assessment into the obligation trust

fund. Money deposited in the fund may be invested as permitted by

general law. Money in the obligation trust fund required to be

used to pay bond obligations and bond administrative expenses

shall be transferred to the authority or used by the commission

in the manner and at the time specified in the resolution adopted

in connection with the bond issue to ensure timely payment of

obligations and expenses, or as otherwise provided by the bond

documents.

(d) For bonds issued by the authority for the commission, the

commission shall provide for the payment of the bond obligations

and the bond administrative expenses by irrevocably pledging

revenues received from the unemployment obligation assessment and

amounts on deposit in the obligation trust fund, together with

any bond reserve fund, as provided in the proceedings authorizing

the bonds and related credit agreements.

Added by Acts 2003, 78th Leg., ch. 317, Sec. 5, eff. June 18,

2003; Acts 2003, 78th Leg., ch. 817, Sec. 6.05, eff. June 20,

2003.

Sec. 203.257. BOND PAYMENTS. (a) Revenues received from the

unemployment obligation assessment may be applied only as

provided by this subchapter.

(b) The commission may pay bond obligations with other legally

available funds.

payment in this subchapter.

Added by Acts 2003, 78th Leg., ch. 317, Sec. 5, eff. June 18,

2003; Acts 2003, 78th Leg., ch. 817, Sec. 6.05, eff. June 20,

2003.

Sec. 203.258. EXCESS REVENUE COLLECTIONS AND INVESTMENT

EARNINGS. Revenue collected from the unemployment obligation

assessment in any year that exceeds the amount of the bond

obligations and bond administrative expenses payable in that year

and interest earned on the obligation trust fund may, in the

discretion of the commission, be:

(1) used to pay bond obligations payable in the subsequent year,

offsetting the amount of the assessment that would otherwise have

to be levied for the year under this subchapter;

(2) used to redeem or purchase outstanding bonds;

(3) deposited in the unemployment compensation fund; or

(4) used to pay principal and interest on advances from the

federal trust fund.

Added by Acts 2003, 78th Leg., ch. 317, Sec. 5, eff. June 18,

2003; Acts 2003, 78th Leg., ch. 817, Sec. 6.05, eff. June 20,

2003.

Sec. 203.259. STATE DEBT NOT CREATED. (a) A bond issued under

this subchapter, and any related credit agreement, is not a debt

of the state or any state agency or political subdivision of the

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

A bond or credit agreement is payable solely from revenue as

provided by this subchapter.

(b) A bond, and any related credit agreement, 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 bond except as provided by this

subchapter; 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 bond.

Added by Acts 2003, 78th Leg., ch. 317, Sec. 5, eff. June 18,

2003; Acts 2003, 78th Leg., ch. 817, Sec. 6.05, eff. June 20,

2003.

Sec. 203.260. STATE NOT TO IMPAIR BOND OBLIGATIONS. If bonds

under this subchapter are outstanding, the state may not:

(1) take action to limit or restrict the rights of the

commission to fulfill its responsibility to pay bond obligations;

(2) in any way impair the rights and remedies of the bond owners

until the bonds are fully discharged.

Added by Acts 2003, 78th Leg., ch. 317, Sec. 5, eff. June 18,

2003; Acts 2003, 78th Leg., ch. 817, Sec. 6.05, eff. June 20,

2003.

Sec. 203.261. EXEMPTION FROM TAXATION. A bond issued under this

subchapter, any transaction relating to the bond, and profits

made from the sale of the bond are exempt from taxation by this

state or by a municipality or other political subdivision of this

state.

Added by Acts 2003, 78th Leg., ch. 317, Sec. 5, eff. June 18,

2003; Acts 2003, 78th Leg., ch. 817, Sec. 6.05, eff. June 20,

2003.

Sec. 203.262. NO PERSONAL LIABILITY. The members of the

commission, commission employees, the board of directors of the

authority, and the employees of the authority are not personally

liable as a result of exercising the rights and responsibilities

granted under this subchapter.

Added by Acts 2003, 78th Leg., ch. 317, Sec. 5, eff. June 18,

2003; Acts 2003, 78th Leg., ch. 817, Sec. 6.05, eff. June 20,

2003.

State Codes and Statutes

State Codes and Statutes

State Codes and Statutes

State Codes and Statutes

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