CHAPTER 161. VETERANS LAND BOARD

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NATURAL RESOURCES CODE

TITLE 7. RESOURCES PROGRAMS

CHAPTER 161. VETERANS LAND BOARD

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 161.001. DEFINITIONS. (a) In this chapter:

(1) "Board" means the Veterans' Land Board.

(2) "Commissioner" means the Commissioner of the General Land

Office.

(3) "Land office" means the General Land Office.

(4) "Program" means the Veterans' Land Program.

(5) "Fund" means the veterans' land fund.

(6) "Bonds" means general obligation bonds issued by the board

for the purpose of funding the program.

(7) "Veteran" means a person who:

(A)(i) served not less than 90 days, unless sooner discharged by

reason of a service-connected disability, on active duty in the

Army, Navy, Air Force, Coast Guard, United States Public Health

Service (as constituted under 42 U.S.C. Section 201 et seq.), or

Marine Corps of the United States after September 16, 1940, and

who on the date of filing an application under the program has

not been dishonorably discharged from the branch of the service

in which the person served;

(ii) has at least 20 years of active or reserve military service

as computed when determining the person's eligibility to receive

retired pay under applicable federal law;

(iii) has enlisted or received an appointment in the Texas

National Guard, who has completed all initial active duty

training required as a condition of the enlistment or

appointment, and who on the date of filing the person's

application has not been dishonorably discharged from the Texas

National Guard; or

(iv) served in the armed forces of the Republic of Vietnam

between February 28, 1961, and May 7, 1975, if the board adopts a

rule regarding these veterans under Subsection (b);

(B) at the time of the person's enlistment, induction,

commissioning, appointment, or drafting was a bona fide resident

of this state or has resided in this state at least one year

immediately before the date of filing an application under this

chapter; and

is a bona fide resident of this state. The term includes the

unmarried surviving spouse of a veteran who died or who is

identified as missing in action if the deceased or missing

veteran meets the requirements of this section, with the

exception that the deceased or missing veteran need not have

served 90 days under Paragraph (A)(i) of this subdivision, and if

the deceased or missing veteran was a bona fide resident of this

state at the time of enlistment, induction, commissioning,

appointment, or drafting.

(8) "Commission" means the Texas Veterans Commission.

(b) Notwithstanding Subdivision (7) of Subsection (a) of this

section, the board may by rule change the definition of "veteran"

as necessary or appropriate to protect the best interests of the

program. If the board adopts a rule to change the definition of

"veteran" to include a person who served in the armed forces of

the Republic of Vietnam between February 28, 1961, and May 7,

1975, the rule must include procedures for establishing proof of

that service.

discharged from the branch of the service in which the person

served or from the Texas National Guard is considered not to have

been dishonorably discharged if the person:

(1) received an honorable discharge;

(2) received a discharge under honorable conditions; or

(3) received a discharge and provides evidence from the United

States Department of Veterans Affairs, its successor, or other

competent authority that indicates that the character of the

person's duty has been determined to be other than dishonorable.

Acts 1977, 65th Leg., p. 2655, ch. 871, art. I, Sec. 1, eff.

Sept. 1, 1977. Amended by Acts 1985, 69th Leg., ch. 798, Sec. 1;

Acts 1989, 71st Leg., ch. 298, Sec. 1, eff. June 14, 1989; Acts

1993, 73rd Leg., ch. 242, Sec. 1.01, eff. Aug. 30, 1993; Acts

2001, 77th Leg., ch. 83, Sec. 1, eff. May 11, 2001; Acts 2003,

78th Leg., ch. 1145, Sec. 1, 2, eff. June 20, 2003.

Amended by:

Acts 2005, 79th Leg., Ch.

17, Sec. 3, eff. September 1, 2005.

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

334, Sec. 1, eff. June 15, 2007.

SUBCHAPTER B. ADMINISTRATIVE PROVISIONS

Sec. 161.011. VETERANS LAND BOARD DESIGNATED. The Veterans Land

Board is a state agency designated to perform the governmental

functions authorized in Article III, Section 49-b of the Texas

Constitution.

Acts 1977, 65th Leg., p. 2655, ch. 871, art. I, Sec. 1, eff.

Sept. 1, 1977.

Sec. 161.0111. SUNSET PROVISION. The Veterans' Land Board is

subject to review under Chapter 325, Government Code (Texas

Sunset Act), but is not abolished under that chapter. The board

shall be reviewed during the period in which state agencies

abolished in 2019 and every 12th year after 2019 are reviewed.

Added by Acts 1985, 69th Leg., ch. 798, Sec. 2, eff. Sept. 1,

1985. Amended by Acts 1987, 70th Leg., ch. 167, Sec. 2.20(42),

eff. Sept. 1, 1987; Acts 1991, 72nd Leg., 1st C.S., ch. 17, Sec.

3.08, eff. Nov. 12, 1991; Acts 1995, 74th Leg., ch. 970, Sec.

2.03, eff. Sept. 1, 1995; Acts 1997, 75th Leg., ch. 1169, Sec.

2.10, eff. Sept. 1, 1997; Acts 2001, 77th Leg., ch. 1481, Sec.

2.04, eff. Sept. 1, 2001; Acts 2003, 78th Leg., ch. 1112, Sec.

2.05, eff. Sept. 1, 2003.

Amended by:

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

334, Sec. 2, eff. June 15, 2007.

Sec. 161.013. EXECUTIVE SECRETARY AND ASSISTANT EXECUTIVE

SECRETARY. (a) The board shall select an executive secretary

and an assistant executive secretary, each of whom shall be

nominated by the commissioner and approved by a majority of the

board.

(b) The executive secretary and assistant executive secretary

shall perform all duties required of them by the board.

Acts 1977, 65th Leg., p. 2655, ch. 871, art. I, Sec. 1, eff.

Sept. 1, 1977.

Sec. 161.014. EMPLOYEES. (a) The commissioner may employ all

other employees that may be necessary for the discharge of the

board's duties. The employees may include stenographers, typists,

bookkeepers, surveyors, appraisers, and other employees in the

number and for the time necessary to perform these duties.

(b) The employees of the board are considered to be employees of

the land office, and civil and criminal laws regulating the

conduct and relations of the employees of the land office apply

to the employees of the board.

Acts 1977, 65th Leg., p. 2656, ch. 871, art. I, Sec. 1, eff.

Sept. 1, 1977.

Sec. 161.015. COMPENSATION AND DUTIES OF EMPLOYEES. The

employees of the board shall be paid their compensation and shall

perform their duties with the same rules and requirements of the

general law governing other state employees in those respects.

Acts 1977, 65th Leg., p. 2656, ch. 871, art. I, Sec. 1, eff.

Sept. 1, 1977.

Sec. 161.016. FISCAL AGENT. (a) The board may designate the

comptroller as the fiscal agent for payment of principal of and

interest on the bonds.

(b) The comptroller shall act as fiscal agent without

compensation.

agent to perform these services and shall pay him adequate

compensation.

Acts 1977, 65th Leg., p. 2656, ch. 871, art. I, Sec. 1, eff.

Sept. 1, 1977. Amended by Acts 1997, 75th Leg., ch. 1423, Sec.

14.16, eff. Sept. 1, 1997.

Sec. 161.017. MEETINGS OF BOARD. (a) When necessary, the board

shall meet on the first and third Tuesdays of each month in the

land office, where its session shall be held and continue until

its docket is cleared. The board may recess at its own

discretion.

(b) The chairman of the board may call special meetings of the

board at any time he thinks necessary by giving the other members

notice.

Acts 1977, 65th Leg., p. 2656, ch. 871, art. I, Sec. 1, eff.

Sept. 1, 1977.

Sec. 161.018. MINUTES OF BOARD. Minutes of each meeting of the

board shall be kept, and only those matters that actually

transpire at the meeting shall be entered in the minutes.

Acts 1977, 65th Leg., p. 2656, ch. 871, art. I, Sec. 1, eff.

Sept. 1, 1977.

Sec. 161.019. DEPOSITORY FOR PAPERS, RECORDS, AND ARCHIVES.

Papers, records, and archives of the board shall be deposited and

kept in the land office.

Acts 1977, 65th Leg., p. 2656, ch. 871, art. I, Sec. 1, eff.

Sept. 1, 1977.

Sec. 161.020. PURCHASE OF SUPPLIES. The board may purchase at

state expense through the comptroller supplies, including

stationery, stamps, printing, record books, and other things that

may be needed to carry on the board's functions as a state agency

in performing the duties imposed by this chapter.

Acts 1977, 65th Leg., p. 2656, ch. 871, art. I, Sec. 1, eff.

Sept. 1, 1977.

Amended by:

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

937, Sec. 1.105, eff. September 1, 2007.

Sec. 161.021. SEAL. The board shall procure and adopt a seal

bearing the words "Veterans Land Board" encircled by the oak and

olive branches common to other official seals.

Acts 1977, 65th Leg., p. 2656, ch. 871, art. I, Sec. 1, eff.

Sept. 1, 1977.

Sec. 161.022. CHAPTER APPLICATION TO SUCCESSOR BOARDS. The

provisions of this chapter shall apply to any successor of the

board.

Acts 1977, 65th Leg., p. 2657, ch. 871, art. I, Sec. 1, eff.

Sept. 1, 1977.

Sec. 161.023. TRAINING. (a) A person who is appointed to and

qualifies for office as a member of the board may not vote,

deliberate, or be counted as a member in attendance at a meeting

of the board until the person completes a training program that

complies with this section.

(b) The training program must provide the person with

information regarding:

(1) the legislation that created the board;

(2) the programs, functions, rules, and budget of the board;

(3) the results of the most recent formal audit of the board;

(4) the requirements of laws relating to open meetings, public

information, administrative procedure, and conflicts of interest;

and

(5) any applicable ethics policies adopted by the board or the

Texas Ethics Commission.

reimbursement, as provided by the General Appropriations Act, for

the travel expenses incurred in attending the training program

regardless of whether the attendance at the program occurs before

or after the person qualifies for office.

Added by Acts 1985, 69th Leg., ch. 798, Sec. 3, eff. Sept. 1,

1985.

Amended by:

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

334, Sec. 3, eff. June 15, 2007.

Sec. 161.024. CONFLICTS OF INTEREST. (a) In this section,

"Texas trade association" means a cooperative and voluntarily

joined statewide 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.

(b) A person may not be an appointed member of the board and may

not be a board employee employed in a "bona fide executive,

administrative, or professional capacity," as that phrase is used

for purposes of establishing an exemption to the overtime

provisions of the federal Fair Labor Standards Act of 1938 (29

U.S.C. Section 201 et seq.) if:

(1) the person is an officer, employee, or paid consultant of a

Texas trade association in the field of real property sales,

brokerage, or development; or

(2) the person's spouse is an officer, manager, or paid

consultant of a Texas trade association in the field of real

property sales, brokerage, or development.

as the general counsel to the board if the person is required to

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

a profession related to the operation of the board.

Added by Acts 1985, 69th Leg., ch. 798, Sec. 3, eff. Sept. 1,

1985. Amended by Acts 1987, 70th Leg., ch. 167, Sec. 2.19(22),

eff. Sept. 1, 1987.

Amended by:

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

334, Sec. 3, eff. June 15, 2007.

Sec. 161.025. EQUAL PROTECTION FOR BOARD MEMBERS. Appointments

to the board shall be made without regard to the race, color,

disability, sex, religion, age, or national origin of the

appointees.

Added by Acts 1985, 69th Leg., ch. 798, Sec. 3, eff. Sept. 1,

1985.

Amended by:

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

334, Sec. 3, eff. June 15, 2007.

Sec. 161.026. REMOVAL OF BOARD MEMBER. (a) It is a ground for

removal from the board if an appointed member:

(1) does not have at the time of appointment the qualifications

required by Article III, Section 49-b, of the Texas Constitution

for appointment to the board;

(2) does not maintain during the service on the board the

qualifications required by Article III, Section 49-b, of the

Texas Constitution for appointment to the board;

(3) is ineligible for membership under Section 161.024;

(4) is unable to discharge his duties for a substantial portion

of the term for which he was appointed because of illness or

disability; or

(5) is absent from more than one-half of the regularly scheduled

board meetings which the member is eligible to attend during each

calendar year, except when the absence is excused by a majority

vote of the board.

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

the fact that it was taken when a ground for removal of an

appointed member of the board existed.

ground for removal exists, the executive secretary shall notify

the presiding officer of the board of the potential ground. The

presiding officer of the board 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 secretary shall notify the next highest

ranking officer of the board, who shall then notify the governor

and the attorney general that a potential ground for removal

exists.

Added by Acts 1985, 69th Leg., ch. 798, Sec. 3, eff. Sept. 1,

1985.

Amended by:

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

334, Sec. 3, eff. June 15, 2007.

Sec. 161.027. ANNUAL ACCOUNTING. The board shall file annually

with the governor and the presiding officer of each house of the

legislature a complete and detailed written report accounting for

all funds received and disbursed by the board during the

preceding year. The form of the annual report and the reporting

time shall be that provided in the General Appropriations Act.

The report shall be included in the reports of the General Land

Office.

Added by Acts 1985, 69th Leg., ch. 798, Sec. 3, eff. Sept. 1,

1985.

Sec. 161.028. CAREER LADDER. (a) The executive secretary or

his designee shall develop an intraagency career ladder program,

one part of which shall require the intraagency posting of all

nonentry level positions concurrently with any public posting.

(b) The program and posting requirements of this section apply

to the employees of the board and the employees of the land

office that support the board.

Added by Acts 1985, 69th Leg., ch. 798, Sec. 3, eff. Sept. 1,

1985.

Sec. 161.029. PERFORMANCE EVALUATIONS. (a) The executive

secretary or his designee shall develop a system of annual

performance evaluations based on measurable job tasks. All merit

pay for board employees must be based on the system established

under this section.

(b) The evaluations required by this section apply to the

employees of the board and the employees of the land office that

support the board.

Added by Acts 1985, 69th Leg., ch. 798, Sec. 3, eff. Sept. 1,

1985.

Sec. 161.030. AUDIT. The financial transactions of the board

are subject to audit by the state auditor in accordance with

Chapter 321, Government Code.

Added by Acts 1985, 69th Leg., ch. 798, Sec. 3, eff. Sept. 1,

1985. Amended by Acts 1989, 71st Leg., ch. 584, Sec. 8, eff.

Sept. 1, 1989.

Sec. 161.0301. INTERNAL AUDITOR. An internal auditor who

performs an audit function for the board shall:

(1) submit to the board any parts of the applicable internal

audit plan that relate to the board; and

(2) report to the board regarding the results of any internal

audits that relate to the board.

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

334, Sec. 3, eff. June 15, 2007.

Sec. 161.031. EQUAL EMPLOYMENT OPPORTUNITY. (a) The executive

secretary or his or her designee shall prepare and maintain a

written plan to assure implementation of a program of equal

employment opportunity whereby all personnel transactions are

made without regard to race, color, handicap, sex, religion, age,

or national origin. The plan shall include:

(1) a comprehensive analysis which meets federal and state

guidelines of all the agency's work force by race, sex, ethnic

origin, class of position, and salary or wages;

(2) plans for recruitment, evaluation, selection, appointment,

training, promotion, and other personnel policies;

(3) procedures by which a determination can be made of

significant underutilization in the agency work force of all

persons for whom federal and state guidelines encourage a more

equitable balance and steps reasonably designed to overcome any

identified underutilization; and

(4) objectives and goals, with appropriate timetables for the

achievement of the objectives and goals, assignments of

responsibility for their achievement, and an appropriate program

for reviewing and maintaining these goals and objectives once

achieved.

(b) The plan shall be filed with the governor's office within 60

days of the effective date of this Act, cover an annual period,

and be updated at least annually. The governor's office shall

develop a biennial report to the legislature based on the

information submitted. Such report may be made separately or as a

part of other biennial reports made to the legislature.

this section apply to the employees of the board and the

employees of the land office that support the board.

Added by Acts 1985, 69th Leg., ch. 798, Sec. 3, eff. Sept. 1,

1985.

Sec. 161.032. STANDARDS OF CONDUCT. (a) The board shall

provide to its members and employees as often as is necessary

information regarding their qualifications under this chapter and

their responsibilities under applicable laws relating to

standards of conduct for state officers or employees.

(b) The employees referred to in Subsection (a) of this section

are the employees of the board and the employees of the land

office that support the board.

Added by Acts 1985, 69th Leg., ch. 798, Sec. 3, eff. Sept. 1,

1985.

Sec. 161.033. PUBLIC DEBATE BEFORE BOARD. The board shall

develop and implement policies that will provide the public with

a reasonable opportunity to appear before the board and to speak

on any issue under the jurisdiction of the board.

Added by Acts 1985, 69th Leg., ch. 798, Sec. 3, eff. Sept. 1,

1985.

Sec. 161.034. COMPLAINTS. (a) The board shall maintain a

system to promptly and efficiently act on complaints filed with

the board. The board shall maintain information about parties to

the complaint, the subject matter of the complaint, a summary of

the results of the review or investigation of the complaint, and

the disposition of the complaint.

(b) The board shall make information available describing its

procedures for complaint investigation and resolution.

the status of the complaint until final disposition.

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

334, Sec. 3, eff. June 15, 2007.

Sec. 161.035. USE OF TECHNOLOGY. The board shall implement a

policy requiring the board to use appropriate technological

solutions to improve the board's ability to perform its

functions. The policy must ensure that the public is able to

interact with the board on the Internet.

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

334, Sec. 3, eff. June 15, 2007.

Sec. 161.036. NEGOTIATED RULEMAKING; ALTERNATIVE DISPUTE

RESOLUTION. (a) The board shall develop and implement a policy

to encourage the use of:

(1) negotiated rulemaking procedures under Chapter 2008,

Government Code, for the adoption of board rules; and

(2) appropriate alternative dispute resolution procedures under

Chapter 2009, Government Code, to assist in the resolution of

internal and external disputes under the board's jurisdiction,

other than disputes governed by Section 161.311.

(b) The board's procedures relating to alternative dispute

resolution shall conform, to the extent possible, to any model

guidelines issued by the State Office of Administrative Hearings

for the use of alternative dispute resolution by state agencies.

(1) coordinate the implementation of the policy adopted under

Subsection (a);

(2) serve as a resource for any training needed to implement the

procedures for negotiated rulemaking or alternative dispute

resolution; and

(3) collect data concerning the effectiveness of those

procedures, as implemented by the board.

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

334, Sec. 3, eff. June 15, 2007.

SUBCHAPTER C. POWERS AND DUTIES

Sec. 161.061. GENERAL DUTIES OF BOARD. The board shall:

(1) authorize and execute negotiable bonds as provided by law;

(2) provide by resolution for use of the fund in a manner that

will effectuate the intent of the constitution and the law;

(3) prescribe the interest rates as provided by law;

(4) provide for the forfeiture of contracts of sale and purchase

and resale of forfeited land;

(5) conduct investigations it considers necessary;

(6) obtain and review any components of internal audit plans

that relate to board functions and approve those plans as

appropriate during public meetings of the board;

(7) obtain and review any internal audit reports that relate to

board functions and discuss those reports during public meetings

of the board; and

(8) formulate policies and rules necessary and not in conflict

with the law to ensure the proper administration and to carry out

the intent and purposes of the law.

Acts 1977, 65th Leg., p. 2657, ch. 871, art. I, Sec. 1, eff.

Sept. 1, 1977. Amended by Acts 1993, 73rd Leg., ch. 242, Sec.

1.02, eff. Aug. 30, 1993.

Amended by:

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

334, Sec. 4, eff. June 15, 2007.

Sec. 161.062. GENERAL DUTIES OF COMMISSIONER. The commissioner

is the chairman of the board and administrator of the program as

provided in Article III, Section 49-b of the Texas Constitution,

and shall perform the duties and functions of the board

prescribed by law except for those duties and functions provided

in Section 161.061 of this code, which shall be performed by the

board.

Acts 1977, 65th Leg., p. 2657, ch. 871, art. I, Sec. 1, eff.

Sept. 1, 1977.

Sec. 161.063. RULES. (a) The board may adopt rules that are

not inconsistent with this chapter and that it considers

necessary or advisable. The board shall adopt rules and

procedures that it considers necessary to ensure the integrity of

the program.

(b) The rules shall be considered a part of this chapter and

violation of the rules subject the offender to prosecution under

Sections 161.401 through 161.403 of this code.

Acts 1977, 65th Leg., p. 2657, ch. 871, art. I, Sec. 1, eff.

Sept. 1, 1977. Amended by Acts 1985, 69th Leg., ch. 798, Sec. 4,

eff. Sept. 1, 1985.

Sec. 161.064. BOARD AUTHORITY TO MAKE INVESTIGATIONS. The board

may make any investigation it considers necessary relating to

transactions involving land purchases or sales under this

chapter.

Acts 1977, 65th Leg., p. 2657, ch. 871, art. I, Sec. 1, eff.

Sept. 1, 1977.

Sec. 161.065. OATHS; BOOKS, RECORDS, AND DOCUMENTS. (a) The

board is specifically authorized to administer oaths and to

examine the books, records, or other documents dealing with or

relating to the transactions of any person involved in the

transaction.

(b) The board may make copies of the books, records, and other

documents that in its judgment may show or tend to show fraud on

the board or a veteran or a violation or attempted violation

under this chapter.

Acts 1977, 65th Leg., p. 2657, ch. 871, art. I, Sec. 1, eff.

Sept. 1, 1977.

Sec. 161.066. SUBPOENA DUCES TECUM. The board may issue a

subpoena duces tecum to require a person to produce books,

records, or any other documents for the board's examination.

Acts 1977, 65th Leg., p. 2657, ch. 871, art. I, Sec. 1, eff.

Sept. 1, 1977.

Sec. 161.067. FORFEITURE OF CHARTER AND RIGHTS. (a) If a

corporation fails or refuses to comply with the orders of the

board under Sections 161.064 through 161.066 of this code, the

corporation shall forfeit its right to do business in this state,

and its permit or charter shall be canceled or forfeited by the

attorney general.

(b) The failure or refusal by a person is presumed to be prima

facie evidence of fraud on the board and veteran in violation of

this chapter, and the person shall lose and forfeit all rights

and benefits under this chapter.

Acts 1977, 65th Leg., p. 2657, ch. 871, art. I, Sec. 1, eff.

Sept. 1, 1977.

Sec. 161.068. FORM OF INSTRUMENTS. The board may prescribe the

form and contents of notices, bids, applications, awards,

contracts, deeds, and instruments used by the board in carrying

out a project or plan if it is not in conflict with the law.

Acts 1977, 65th Leg., p. 2658, ch. 871, art. I, Sec. 1, eff.

Sept. 1, 1977.

Sec. 161.069. FEES. (a) The board shall collect the fee it

considers necessary from each applicant under Subchapter G of

this chapter and deposit the fee in a bank. Interest received on

the deposit shall be credited to the General Land Office special

fund and shall be spent for administrative purposes.

(b) Repealed by Acts 1985, 69th Leg., ch. 798, Sec. 22, eff.

Sept. 1, 1985.

Acts 1977, 65th Leg., p. 2658, ch. 871, art. I, Sec. 1, eff.

Sept. 1, 1977. Amended by Acts 1985, 69th Leg., ch. 798, Sec. 22,

eff. Sept. 1, 1985.

Sec. 161.070. ADDITIONAL FEES. (a) The board shall set and

collect, for the use of the state, reasonable fees in amounts

determined by the board for services it may provide in connection

with processing and servicing of purchase applications and

contracts of sale and purchase and matters incidental to these

purchases. These fees may include but are not limited to the

following:

(1) appraisal fee for each application under Subchapter G of

this chapter;

(2) contract of sale and purchase transfer fee for each

transfer;

(3) mineral lease service fee for each lease executed by

purchasers;

(4) reappraisal fee, if required by the board;

(5) fee for each loan of abstract;

(6) fee for servicing and filing each easement;

(7) service fee for each contract of sale and purchase;

(8) fee for homesite, severance, or paid-in-full deed;

(9) title examination fee;

(10) recording fees;

(11) fee for preparing credit reports;

(12) fee from each successful bidder under Section 161.319 of

this code in an amount sufficient to pay for examination of

title, recording fees, and other expenses incidental to resale of

land under Section 161.319 of this code;

(13) fee for preparation of legal instruments, including but not

limited to deeds, contracts, affidavits, and curative

instruments;

(14) fee for legal research, including but not limited to

preparation of title opinions and other legal opinions,

preparation for court appearances;

(15) fee for general research, including but not limited to

preparation of certified copies of documents on file with the

board; and

(16) fees for any other services which may be requested of the

board.

(b) These fees may be added to the price of any land sold or

resold by the board.

board unused shall be refunded.

(d) Money received from payment of these fees and not refunded

shall be deposited in the State Treasury and credited to the fund

and shall be spent as provided in the General Appropriations Act.

Acts 1977, 65th Leg., p. 2658, ch. 871, art. I, Sec. 1, eff.

Sept. 1, 1977. Amended by Acts 1983, 68th Leg., p. 406, ch. 81,

Sec. 21(o), eff. Sept. 1, 1983; Acts 1985, 69th Leg., ch. 798,

Sec. 5, eff. Sept. 1, 1985.

Sec. 161.071. PAMPHLETS. The board shall have published

pamphlets containing the provisions of this chapter and rules the

board desires, and these pamphlets shall be made available to any

interested veteran, veterans organization, or other interested

person in the state.

Acts 1977, 65th Leg., p. 2658, ch. 871, art. I, Sec. 1, eff.

Sept. 1, 1977.

Sec. 161.072. LEASE BY BOARD. (a) The board may lease any

property that it owns on terms it considers proper.

(b) A lease for agricultural and grazing purposes is subject to

cancellation on the sale of the property to a veteran.

purchased by it before it sells the land by following the same

procedure provided for the school land board in the lease of

public school land.

Acts 1977, 65th Leg., p. 2658, ch. 871, art. I, Sec. 1, eff.

Sept. 1, 1977.

Sec. 161.073. CONTRACTS WITH PRIVATE ENTITIES. The board may

contract with a private entity to administer all or part of the

program if it is cost effective to do so.

Added by Acts 1985, 69th Leg., ch. 798, Sec. 6, eff. Sept. 1,

1985.

Sec. 161.074. BOND ENHANCEMENT AGREEMENTS. (a) The board may

at any time and from time to time enter into one or more bond

enhancement agreements that the board determines to be necessary

or appropriate to place the obligation of the board, as

represented by the bonds, in whole or in part, on the interest

rate, currency, cash flow, or other basis desired by the board.

Bond enhancement agreements may include, on terms and conditions

approved by the board, interest rate swap agreements, currency

swap agreements, forward payment conversion agreements,

agreements providing for payments based on levels of or changes

in interest rates or currency exchange rates, agreements to

exchange cash flows or a series of payments, or agreements,

including options, puts, or calls, to hedge payment, currency,

rate, spread, or other exposure. A bond enhancement agreement is

an agreement for professional services and shall contain the

terms and conditions and be for the period that the board

approves. The fees and expenses of the board in connection with

the issuance of bonds and the purchase and sale of land may be

paid from money in the fund, provided that payments due from the

board under a bond enhancement agreement, other than fees and

expenses, that relate to the payment of debt service on bonds

constitute payments of principal of and interest on the bonds.

(b) The resolution of the board authorizing a bond enhancement

agreement may authorize one or more designated officers or

employees of the board to act on behalf of the board in entering

into and delivering the bond enhancement agreement and in

determining or setting the counterparty and terms of the bond

enhancement agreement specified in the resolution, except that

the resolution must set the maximum amount and term for the bond

enhancement agreement.

enhancement agreement, the bond enhancement agreement is not a

credit agreement for purposes of Chapter 1371, Government Code,

regardless of whether the bonds relating to the bond enhancement

agreement were issued in part under that law.

Added by Acts 1993, 73rd Leg., ch. 242, Sec. 1.03, eff. Aug. 30,

1993. Amended by Acts 1999, 76th Leg., ch. 134, Sec. 1, eff. May

20, 1999; Acts 2001, 77th Leg., ch. 1420, Sec. 8.354, eff. Sept.

1, 2001.

Sec. 161.075. INFORMATION FOR LENDING INSTITUTIONS. (a) In

this section, "lending institution" has the meaning assigned by

Section 161.502.

(b) On request, the board shall provide to a lending institution

information regarding state land and housing benefits programs

for veterans in this state.

Added by Acts 2003, 78th Leg., ch. 69, Sec. 3, eff. May 16, 2003.

Sec. 161.076. MEMORANDUM OF UNDERSTANDING. (a) The board shall

enter into a memorandum of understanding with the commission.

The memorandum of understanding must specify the guidelines,

powers, and duties necessary for the board and the commission to

coordinate veterans benefits outreach activities.

(b) The memorandum of understanding must address board and

commission coordination with respect to the following veterans

benefits outreach activities:

(1) operation by the board of a consolidated communications

center;

(2) combined direct mail efforts;

(3) sharing veterans contact databases;

(4) dissemination of information through integrated websites and

a joint brochure;

(5) veterans benefits seminars; and

(6) any other veterans benefits outreach activity determined by

the board and the commission to be appropriate for coordination

by those agencies.

separate powers and duties of the board and the commission as

necessary to implement coordinated veterans benefits outreach

activities, including powers and duties relating to:

(1) reimbursements for coordinated activities;

(2) the management and funding of a consolidated communications

center;

(3) operating expenses associated with the coordinated

activities, including expenses relating to office space,

printing, and postage;

(4) the development and maintenance of integrated web services

regarding veterans benefits and services;

(5) the development and dissemination of a joint brochure

regarding veterans benefits and services; and

(6) joint presentations at or sponsorship of veterans benefits

seminars.

(d) The commission and the board shall periodically update the

memorandum of understanding and continue to explore additional

opportunities for coordination between the agencies regarding

their respective veterans benefits outreach activities.

(e) The commission and the board shall consider the appropriate

use of authorized bond proceeds and federal money to ensure that

each agency complies with applicable funding constraints in

entering into the memorandum of understanding.

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

334, Sec. 4, eff. June 15, 2007.

Sec. 161.077. COMMUNICATIONS CENTER. (a) Based on the

memorandum of understanding described by Section 161.076, the

board shall operate a consolidated communications center to

provide information regarding the benefits and services available

to veterans of this state, including benefits and services

offered by the board and the commission.

(b) In operating the communications center, employees must be

knowledgeable about the functions of the center and be able to

access information regarding all available veterans benefits and

services and shall:

(1) answer the veterans toll-free hotline; and

(2) disseminate to veterans, including newly discharged

veterans, information regarding the benefits and services, as

appropriate.

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

334, Sec. 4, eff. June 15, 2007.

Sec. 161.078. WEBSITE; BROCHURE. (a) Based on the memorandum

of understanding described by Section 161.076, the board shall

integrate web services and develop a hard-copy brochure that

provides in a centralized, comprehensive, and simplified format

information about all available veterans benefits and services,

including benefits and services offered by the board and the

commission. In integrating web services, the board shall develop

a single entry point to allow public access to information

related to all available veterans benefits and services.

(b) This section does not preclude the board or commission from

operating additional websites or disseminating other information

as determined appropriate by the board or the commission, in

accordance with the memorandum of understanding provided under

Section 161.076.

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

334, Sec. 4, eff. June 15, 2007.

Sec. 161.079. BENEFITS SEMINARS. (a) To ensure that the

veterans of this state receive uniform information on all

veterans benefits and services available, the board and the

commission shall:

(1) jointly plan and provide state-sponsored veterans benefits

seminars; and

(2) coordinate the involvement of each agency in seminars hosted

for veterans by other organizations.

(b) Planning and coordination under this section must ensure the

consistent presentation of benefits and services information by

the board or the commission at seminars described by this

section.

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

334, Sec. 4, eff. June 15, 2007.

SUBCHAPTER D. GENERAL OBLIGATION BONDS

Sec. 161.111. ISSUANCE AND SALE OF BONDS; DISPOSITION OF

PROCEEDS. By appropriate action, the board may provide by

resolution for the issuance and sale of negotiable bonds

authorized by the constitution, and the proceeds shall be a part

of the fund.

Acts 1977, 65th Leg., p. 2659, ch. 871, art. I, Sec. 1, eff.

Sept. 1, 1977.

Sec. 161.112. INSTALLMENTS. The board, at its option, may issue

bonds in one or several installments.

Acts 1977, 65th Leg., p. 2659, ch. 871, art. I, Sec. 1, eff.

Sept. 1, 1977.

Sec. 161.113. INTEREST RATE. The bonds shall bear the rate or

rates of interest prescribed by the board.

Acts 1977, 65th Leg., p. 2659, ch. 871, art. I, Sec. 1, eff.

Sept. 1, 1977. Amended by Acts 1993, 73rd Leg., ch. 242, Sec.

1.05, eff. Aug. 30, 1993.

Sec. 161.114. PAYMENT AND MATURITY OF BONDS. (a) The bonds

shall be payable as provided by the board and shall mature

serially or otherwise not later than 40 years from their date.

(b) Bonds previously issued shall mature according to their

provisions.

principal of and interest on the bonds.

(d) The board at its own option may make the bonds redeemable or

subject to tender for purchase before maturity at the price and

under the terms and conditions fixed by the board in the

resolution providing for the issuance and sale of the bonds.

Acts 1977, 65th Leg., p. 2659, ch. 871, art. I, Sec. 1, eff.

Sept. 1, 1977. Amended by Acts 1993, 73rd Leg., ch. 242, Sec.

1.06, eff. Aug. 30, 1993.

Sec. 161.115. FORM, DENOMINATION, AND PLACE OF PAYMENT OF BONDS.

The board shall determine the form of the bonds, including the

forms of interest coupons attached to the bonds, and shall fix

the denomination or denominations of the bonds and the place or

places for payment of the principal of and interest on the bonds.

Acts 1977, 65th Leg., p. 2659, ch. 871, art. I, Sec. 1, eff.

Sept. 1, 1977.

Sec. 161.116. MANNER OF EXECUTION. (a) The bonds shall be

executed by and on behalf of the board and the state as

obligations of the state in the manner provided in Subsection (b)

of this section.

(b) The bonds shall be signed and executed as the board provides

in the resolution or order authorizing the issuance of the bonds.

Acts 1977, 65th Leg., p. 2659, ch. 871, art. I, Sec. 1, eff.

Sept. 1, 1977. Amended by Acts 1993, 73rd Leg., ch. 242, Sec.

1.07, eff. Aug. 30, 1993; Acts 1993, 73rd Leg., ch. 300, Sec. 36,

eff. Aug. 30, 1993; Acts 2001, 77th Leg., ch. 620, Sec. 1, eff.

Sept. 1, 2001.

Sec. 161.117. SIGNATURES AND SEALS. (a) The resolution

authorizing the issuance of an installment or series of bonds may

prescribe the extent to which facsimile signatures and facsimile

seals may be used in lieu of manual signatures and manually

impressed seals in executing the bonds and attached coupons.

(b) Interest coupons may be signed with the facsimile signatures

of the chairman and secretary of the board.

a bond, or whose facsimile signature appears on a coupon, ceases

to be an officer before the bonds are delivered, the signature

shall still be valid and sufficient for all purposes the same as

if the officer had remained in office until the delivery of the

bonds.

Acts 1977, 65th Leg., p. 2660, ch. 871, art. I, Sec. 1, eff.

Sept. 1, 1977.

Sec. 161.118. APPROVAL BY ATTORNEY GENERAL. Before bonds are

delivered to the purchasers, the record relating to the bonds

shall be examined by the attorney general. If the record

demonstrates that the bonds have been issued in accordance with

the constitution and this subchapter, the bonds shall be approved

by the attorney general.

Acts 1977, 65th Leg., p. 2660, ch. 871, art. I, Sec. 1, eff.

Sept. 1, 1977. Amended by Acts 1993, 73rd Leg., ch. 242, Sec.

1.08, eff. Aug. 30, 1993.

Sec. 161.119. REGISTRATION WITH COMPTROLLER. After the bonds

are approved by the attorney general, they shall be registered in

the office of the comptroller.

Acts 1977, 65th Leg., p. 2660, ch. 871, art. I, Sec. 1, eff.

Sept. 1, 1977. Amended by Acts 1993, 73rd Leg., ch. 242, Sec.

1.09, eff. Aug. 30, 1993.

Sec. 161.120. VALIDITY OF BONDS. (a) After the bonds are

approved by the attorney general and registered with the state

comptroller, they shall be held as valid and binding obligations

of the state in every action, suit, or proceeding in which their

validity is or may be brought into question.

(b) In each action brought to enforce collection of the bonds or

rights incident to the bonds, the certificate of approval by the

attorney general or a certified copy of that certificate shall be

admitted and received in evidence as to the validity of the

bonds.

the bonds shall be forgery or fraud.

Acts 1977, 65th Leg., p. 2660, ch. 871, art. I, Sec. 1, eff.

Sept. 1, 1977.

Sec. 161.121. BONDS AS NEGOTIABLE INSTRUMENTS. Bonds issued

under this chapter have and are declared to have all qualities

and incidents of negotiable instruments under the laws of this

state.

Acts 1977, 65th Leg., p. 2660, ch. 871, art. I, Sec. 1, eff.

Sept. 1, 1977.

Sec. 161.123. NOTICE FOR BIDS ON BONDS. If the board authorizes

the issuance of a series of bonds and decides to call for bids,

it shall publish an appropriate notice at least one time not less

than 10 days before the date of the sale in a recognized

financial journal of general circulation.

Acts 1977, 65th Leg., p. 2660, ch. 871, art. I, Sec. 1, eff.

Sept. 1, 1977. Amended by Acts 1993, 73rd Leg., ch. 242, Sec.

1.10, eff. Aug. 30, 1993.

Sec. 161.124. SECURITY FOR BID. The board may require bidders

to accompany their bids with exchange or bank cashier's checks in

an amount considered adequate by the board to be a forfeit

guaranteeing the acceptance and payment for bonds covered by the

bids and accepted by the board.

Acts 1977, 65th Leg., p. 2661, ch. 871, art. I, Sec. 1, eff.

Sept. 1, 1977. Amended by Acts 1993, 73rd Leg., ch. 242, Sec.

1.11, eff. Aug. 30, 1993.

Sec. 161.125. SALE OF BONDS. Bonds may be sold at public or

private sale at a price or prices and on terms determined by the

board.

Acts 1977, 65th Leg., p. 2661, ch. 871, art. I, Sec. 1, eff.

Sept. 1, 1977. Amended by Acts 1993, 73rd Leg., ch. 242, Sec.

1.12, eff. Aug. 30, 1993.

Sec. 161.126. REPLACEMENT BONDS. The board may provide for

replacement of bonds that are mutilated, lost, or destroyed.

Acts 1977, 65th Leg., p. 2661, ch. 871, art. I, Sec. 1, eff.

Sept. 1, 1977.

Sec. 161.127. REFUNDING BONDS. (a) The board may provide by

resolution for issuance of refunding bonds for the purpose of

refunding outstanding bonds issued under this chapter together

with accrued interest on the bonds.

(b) As far as applicable, the preceding provisions of this

subchapter shall govern:

(1) the issuance of the refunding bonds;

(2) the maturities and other details of the refunding bonds;

(3) the rights of bondholders; and

(4) the duties of the board with respect to the refunding bonds.

Acts 1977, 65th Leg., p. 2661, ch. 871, art. I, Sec. 1, eff.

Sept. 1, 1977.

Sec. 161.128. BONDS AS INVESTMENTS AND SECURITY. (a) Bonds

issued under this chapter are legal and authorized investments

for banks, savings banks, trust companies, building and loan

associations, insurance companies, fiduciaries, trustees,

guardians, and for the sinking funds of cities, towns, villages,

counties, school districts, and other political subdivisions and

public agencies of the state.

(b) The bonds are legal and sufficient security for the deposits

in the amount of the par value of the bonds.

Acts 1977, 65th Leg., p. 2661, ch. 871, art. I, Sec. 1, eff.

Sept. 1, 1977. Amended by Acts 1993, 73rd Leg., ch. 242, Sec.

1.13, eff. Aug. 30, 1993.

Sec. 161.129. TAXATION OF BONDS. Bonds are exempt from any tax

by the state and by cities, towns, villages, counties, school

districts, and other political subdivisions and public agencies

of the state.

Acts 1977, 65th Leg., p. 2661, ch. 871, art. I, Sec. 1, eff.

Sept. 1, 1977. Amended by Acts 1993, 73rd Leg., ch. 242, Sec.

1.14, eff. Aug. 30, 1993.

Sec. 161.130. CONSTITUTIONAL APPROPRIATIONS. (a) If during the

existence of the fund or during the time general obligation bonds

are payable from the fund the board determines that there will

not be sufficient money in the fund during the following biennium

available to pay principal of or interest on the bonds that are

to come due and to be paid from the fund during that biennium,

the comptroller shall transfer to the fund the first money coming

into the State Treasury not otherwise appropriated by the

constitution in amounts sufficient to pay the obligations.

(b) The money appropriated shall be used to pay the obligations

only if at the time the principal or interest actually become due

there is not sufficient money in the fund available to pay the

amount due.

Added by Acts 1993, 73rd Leg., ch. 242, Sec. 1.15, eff. Aug. 30,

1993.

Sec. 161.131. MINORITY-OWNED BUSINESSES. (a) The board shall

make a good faith effort to award to minority-owned businesses:

(1) contracts relating to the issuance of bonds by the board

under this chapter in the amount of at least 20 percent of the

total costs of issuing those bonds; and

(2) contracts for the items to be financed by bonds issued by

the board in the amount of at least 20 percent of the proceeds of

those bonds.

(b) Not later than October 31 of each year, the board shall file

with the governor and each house of the legislature a written

report containing the following information for the previous year

for all businesses and for minority-owned businesses classified

by minority group:

(1) the total number of contracts relating to the issuance of

bonds by the board under this chapter and to the items to be

financed by those bonds;

(2) the total dollar amount the board must pay under each

contract described by Subdivision (1) of this subsection; and

(3) the total number of businesses submitting bids or proposals

relating to the issuance of bonds by the board under this chapter

and to the items to be financed by those bonds.

(1) "Minority-owned business" means a business entity at least

51 percent of which is owned by members of a minority group or,

in the case of a corporation, at least 51 percent of the shares

of which are owned by members of a minority group, and that is

managed and controlled by members of a minority group in its

daily operations.

(2) "Minority group" includes:

(A) African Americans;

(B) American Indians;

(D) Mexican Americans and other Americans of Hispanic origin.

Added by Acts 1993, 73rd Leg., ch. 242, Sec. 1.15, eff. Aug. 30,

1993.

Sec. 161.132. WOMEN-OWNED BUSINESSES. (a) The board shall make

a good faith effort to award to women-owned businesses:

(1) contracts relating to the issuance of bonds by the board

under this chapter in the amount of at least 10 percent of the

total costs of issuing those bonds; and

(2) contracts for the items to be financed by bonds issued by

the board in the amount of at least 10 percent of the proceeds of

those bonds.

(b) Not later than October 31 of each year, the board shall file

with the governor and each house of the legislature a written

report containing the following information for the previous year

for all businesses and for women-owned businesses classified by

minority group:

(1) the total number of contracts relating to the issuance of

bonds by the board under this chapter and to the items to be

financed by those bonds;

(2) the total dollar amount the board must pay under each

contract described by Subdivision (1) of this subsection; and

(3) the total number of businesses submitting bids or proposals

relating to the issuance of bonds by the board under this chapter

and to the items to be financed by those bonds.

(1) "Women-owned business" means a business entity at least 51

percent of which is owned by women or, in the case of a

corporation, at least 51 percent of the shares of which are owned

by women, and that is managed and controlled by women in its

daily operations.

(2) "Minority group" includes:

(A) African Americans;

(B) American Indians;

(D) Mexican Americans and other Americans of Hispanic origin.

Added by Acts 1993, 73rd Leg., ch. 242, Sec. 1.15, eff. Aug. 30,

1993.

SUBCHAPTER E. VETERANS' LAND FUND

Sec. 161.171. MONEY AND LAND INCLUDED IN FUND. (a) The

veterans' land fund shall include:

(1) land purchased by the board from money in the fund;

(2) money attributable to general obligation bonds issued and

sold by the board, including proceeds from the issuance and sale

of the bonds;

(3) money received from the sale or resale of land or rights in

land purchased with the proceeds from the general obligation

bonds;

(4) money received from the sale or resale of land or rights in

land purchased with other money attributable to the general

obligation bonds;

(5) proceeds derived from the sale or other disposition of the

board's interest in:

(A) contracts for the sale of land or rights in land; or

(B) a loan made under Subchapter K;

(6) interest and penalties received from the sale or resale of

land purchased under this chapter or from rights in the land;

(7) bonuses, income, rents, royalties, and any other pecuniary

benefit received by the board from:

(A) land purchased under this chapter; or

(B) loans made under Subchapter K;

(8) money received as indemnity or forfeiture for the failure of

any bidder for purchase of general obligation bonds to comply

with the person's bid and accept and pay for the bonds or for the

failure of a bidder for purchase of land comprising a part of the

fund to comply with the person's bid and accept and pay for the

land and amounts received by the board under bond enhancement

agreements with respect to the bonds;

(9) interest received from investments of this money;

(10) any interest of the board in a loan made under Subchapter K

using money in the fund, including any title insurance related to

the loan or land purchased with the loan; and

(11) any equitable interest in property encumbered under

Subchapter K and attributable to the fund.

(b) Except as otherwise provided by law, money in the fund shall

be deposited in the State Treasury to the credit of the fund.

Acts 1977, 65th Leg., p. 2662, ch. 871, art. I, Sec. 1, eff.

Sept. 1, 1977. Amended by Acts 1993, 73rd Leg., ch. 242, Sec.

1.17, eff. Aug. 30, 1993; Acts 1997, 75th Leg., ch. 71, Sec. 1,

eff. May 9, 1997; Acts 2001, 77th Leg., ch. 333, Sec. 1, eff. May

21, 2001.

Sec. 161.173. INVESTMENT OF MONEY IN FUND. (a) Money in the

fund that is not immediately committed to paying principal of and

interest on the bonds, to the purchase of land, or to the payment

of expenses as provided in this chapter may be invested in:

(1) direct security repurchase agreements and reverse security

repurchase agreements made with state or national banks that have

main offices or branch offices in this state or with primary

dealers as approved by the Federal Reserve System;

(2) direct obligations of or obligations the principal and

interest of which are guaranteed by the United States;

(3) direct obligations of or obligations guaranteed by the

Federal Home Loan Banks, the Federal National Mortgage

Association, the Federal Farm Credit System, the Student Loan

Marketing Association, the Federal Home Loan Mortgage

Corporation, or a successor organization to one of those

organizations;

(4) bankers' acceptances that:

(A) are eligible for purchase by members of the Federal Reserve

System;

(B) do not exceed 270 days to maturity; and

short-term credit rating by a nationally recognized investment

rating firm;

(5) commercial paper that:

(A) does not exceed 270 days to maturity; and

(B) has received the highest short-term credit rating by a

nationally recognized investment rating firm;

(6) contracts written by the board in which the board grants the

purchaser the right to purchase securities in the board's

marketable securities portfolio at a specified price over a

specified period and for which the board is paid a fee and

specifically prohibits naked-option or uncovered option trading;

(7) obligations of a state or an agency, county, city, or other

political subdivision of a state, including revenue bonds issued

under Chapter 164, and mutual funds composed of these

obligations;

(8) an investment instrument, obligation, or other evidence of

indebtedness the payment of which is directly or indirectly

guaranteed by the full faith and credit of the United States;

(9) an investment, account, depository receipt, or deposit that

is fully:

(A) insured by the Federal Deposit Insurance Corporation or its

successor; or

(B) secured by securities described by Subdivision (2), (3), or

(8) of this subsection;

(10) a collateralized mortgage obligation fully secured by

securities or mortgages issued or guaranteed by the Government

National Mortgage Association (GNMA) or any entity described by

Subdivision (3) of this subsection;

(11) a security or evidence of indebtedness issued by the Farm

Credit System Financial Assistance Corporation, the Private

Export Funding Corporation, or the Export-Import Bank; and

(12) any other investment authorized for investment of state

funds by the comptroller under Section 404.024, Government Code.

(b) In this section:

(1) "Direct security repurchase agreement" means an agreement

under which the board buys, holds for a specified time, and then

sells back any of the following securities, obligations, or

participation certificates:

(A) United States government securities;

(B) direct obligations of or obligations the principal and

interest of which are guaranteed by the United States;

Federal Home Loan Banks, the Federal National Mortgage

Association, the Federal Farm Credit System, the Student Loan

Marketing Association, the Federal Home Loan Mortgage

Corporation, or a successor organization to one of those

organizations; or

(D) any other investment instrument, obligation, or other

evidence of indebtedness the payment of which is directly or

indirectly guaranteed by the full faith and credit of the United

States.

(2) "Market value" means the fair and reasonable prevailing

price at which a security is being sold on the open market at the

time of the appraisement of the security by the board.

(3) "Reverse security repurchase agreement" means an agreement

under which the board sells and after a specified time buys back

any of the securities, obligations, or participation certificates

listed in Paragraphs (A) through (D) of Subdivision (1) of this

subsection.

million in revenue bonds issued under Chapter 164 and shall

report to the governor, the senate committee on finance, and the

house of representatives committee on appropriations on or before

December 1, 2000, regarding the status of its investment in such

revenue bonds and all related debt service.

Acts 1977, 65th Leg., p. 2662, ch. 871, art. I, Sec. 1, eff.

Sept. 1, 1977. Amended by Acts 1989, 71st Leg., ch. 720, Sec. 2,

eff. June 14, 1989; Acts 1991, 72nd Leg., ch. 56, Sec. 1, 2; Acts

1993, 73rd Leg., ch. 242, Sec. 1.18, eff. Aug. 30, 1993; Acts

1995, 74th Leg., ch. 265, Sec. 2, eff. Aug. 28, 1995; Acts 1997,

75th Leg., ch. 1423, Sec. 14.17, eff. Sept. 1, 1997; Acts 1999,

76th Leg., ch; 262, Sec. 1, 2, eff. May 28, 1999; Acts 1999, 76th

Leg., ch. 344, Sec. 5.013, eff. Sept. 1, 1999.

Sec. 161.1731. CUSTODY AND INVESTMENT OF ASSETS PENDING

TRANSACTIONS. With the approval of the comptroller, the board,

in managing the assets of the fund, pending the completion of an

investment transaction, may:

(1) select one or more commercial banks, depository trust

companies, or other entities to serve as a custodian of the cash

or securities of the fund; and

(2) authorize the custodian to invest cash held under

Subdivision (1) in the investments determined by the board.

Added by Acts 1997, 75th Leg., ch. 71, Sec. 2, eff. May 9, 1997.

Sec. 161.1732. LENDING SECURITIES. (a) In managing the assets

of the fund, the board may:

(1) select one or more commercial banks, depository trust

companies, or other entities to serve as a custodian of the

securities of the fund; and

(2) authorize the custodian to lend the securities held under

Subdivision (1) as provided by this section and by rules adopted

by the board.

(b) To be eligible to lend securities under this section, a

custodian selected by the board under Subsection (a) must be

experienced in the operation of a fully secured securities loan

program and must:

(1) maintain adequate capital in the prudent judgment of the

board to assure the safety of the securities;

(2) execute an indemnification agreement satisfactory in form

and content to the board fully indemnifying the board against

loss resulting from the custodian's operation of a securities

loan program for the fund's securities; and

(3) require any securities broker or dealer to whom it lends

securities of the fund to deliver to, and maintain with, the

custodian collateral in the form of cash, United States

government securities, or letters of credit that are issued by

banks rated as to investment quality not less than A or its

equivalent by a nationally recognized investment rating firm in

an amount equal to at least 100 percent of the market value, from

time to time, of the loaned securities.

Added by Acts 1997, 75th Leg., ch. 71, Sec. 2, eff. May 9, 1997.

Amended by Acts 1999, 76th Leg., ch. 134, Sec. 2, eff. May 20,

1999.

Sec. 161.174. USE OF FUND TO PAY PRINCIPAL AND INTEREST. The

principal of and interest on bonds issued by the board shall be

paid from money in the fund as provided by the constitutional

provision authorizing the bonds.

Acts 1977, 65th Leg., p. 2662, ch. 871, art. I, Sec. 1, eff.

Sept. 1, 1977. Amended by Acts 1993, 73rd Leg., ch. 242, Sec.

1.19, eff. Aug. 30, 1993.

Sec. 161.175. USE OF FUND TO PAY EXPENSES RELATED TO THE LAND.

(a) The board may use money in the fund attributable to bonds

that have been issued and sold to pay:

(1) expenses of surveying and monumenting the land and the

tra

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State Codes and Statutes

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