CHAPTER 1401. BONDS FOR CERTAIN CRIMINAL JUSTICE OR MENTAL HEALTH AND MENTAL RETARDATION FACILITIES

GOVERNMENT CODE

TITLE 9. PUBLIC SECURITIES

SUBTITLE G. SPECIFIC AUTHORITY FOR STATE GOVERNMENT TO ISSUE

SECURITIES

CHAPTER 1401. BONDS FOR CERTAIN CRIMINAL JUSTICE OR MENTAL HEALTH

AND MENTAL RETARDATION FACILITIES

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 1401.001. DEFINITIONS. In this chapter:

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

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

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

1999.

Sec. 1401.002. BOND REVIEW BOARD MEMBER IMMUNITY. A Bond Review

Board member is not liable for damages that result from

performing a function of the member under this chapter.

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

1999.

Sec. 1401.003. LEGISLATIVE AUTHORITY. The authority may not

issue or sell a bond under this chapter for a project unless the

legislature has authorized the specific project by:

(1) this chapter;

(2) the General Appropriations Act; or

(3) Chapter 1232.

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

1999.

SUBCHAPTER B. BOND REVIEW BOARD OVERSIGHT

Sec. 1401.021. BOND REVIEW BOARD APPROVAL OF BOND ISSUANCE. The

authority may not issue a bond under this chapter unless the Bond

Review Board has reviewed and approved the issuance.

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

1999.

Sec. 1401.022. BOND REVIEW BOARD APPROVAL OF PROJECT. The

proceeds of a bond issued under this chapter may not be used to

finance a project unless the Bond Review Board has reviewed and

approved the project.

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

1999.

SUBCHAPTER C. GENERAL OBLIGATION BONDS AND PROCEEDS

Sec. 1401.041. GENERAL OBLIGATION BONDS. (a) As provided by

Section 49-h( a), Article III, Texas Constitution, as that

section existed September 1, 1999, the authority may:

(1) issue general obligation bonds in an amount not to exceed

$500 million; and

(2) distribute the bond proceeds as provided by that section.

(b) As provided by Section 49-h(c), Article III, Texas

Constitution, as that section existed September 1, 1999, the

authority may:

(1) issue general obligation bonds in an amount not to exceed

$400 million; and

(2) distribute the bond proceeds to any appropriate agency to:

(A) acquire, construct, or equip a new facility; or

(B) make a major repair of or renovate a facility, corrections

institution, youth corrections institution, or mental health and

mental retardation institution.

(c) As provided by Section 49-h(d), Article III, Texas

Constitution, as that section existed September 1, 1999, the

authority may:

(1) issue general obligation bonds in an amount not to exceed

$1.055 billion and distribute the bond proceeds to any

appropriate agency to:

(A) acquire, construct, or equip a:

(i) new prison or substance abuse felony punishment facility to

confine criminals; or

(ii) youth corrections institution;

(B) make a major repair of or renovate a prison facility or

youth corrections institution; or

(C) acquire, make a major repair of, or renovate a facility for

use as a state prison, a substance abuse felony punishment

facility, or a facility in which a pilot program established as

provided by Section 614.011, Health and Safety Code, is

conducted;

(2) issue general obligation bonds in an amount not to exceed

$45 million and distribute the bond proceeds to any appropriate

agency to:

(A) acquire, construct, or equip a new mental health or mental

retardation facility, including a community-based mental health

or mental retardation facility; or

(B) make a major repair of or renovate a mental health or mental

retardation facility; and

(3) issue general obligation bonds in an amount not to exceed

$50 million and distribute the bond proceeds to any appropriate

agency to:

(A) acquire, construct, or equip a new youth corrections

facility; or

(B) make a major repair of or renovate a youth corrections

facility.

(d) As provided by Section 49-h(e), Article III, Texas

Constitution, as that section existed September 1, 1999, the

authority may:

(1) issue general obligation bonds in an amount not to exceed $1

billion; and

(2) distribute the bond proceeds as provided by that section.

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

1999. Amended by Acts 2001, 77th Leg., ch. 1420, Sec. 8.017, eff.

Sept. 1, 2001.

Sec. 1401.042. REFUNDING BONDS. The authority may issue a

general obligation bond authorized under Section 1401.041 to

refund a revenue bond issued under Subchapter D.

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

1999.

Sec. 1401.043. REFINANCING CERTAIN OBLIGATIONS. (a) The

proceeds of a bond issued under Section 1401.041(a), (b), (c)(1),

or (d) may be used to refinance an existing obligation for a

purpose described by those subsections.

(b) The proceeds of a bond issued under Section 1401.041(c)(2)

may be used to refinance an existing obligation for a purpose

described by that subdivision.

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

1999.

Sec. 1401.044. DISTRIBUTION OF PROCEEDS. The authority by rule

shall establish guidelines, criteria, and procedures for

distributions of general obligation bond proceeds.

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

1999.

Sec. 1401.045. INTEREST AND SINKING FUND BALANCE REPORT. (a)

The authority shall report to the Legislative Budget Board and

the Governor's Office of Budget and Planning an accurate estimate

of interest and sinking fund balances available for payment of

debt service on general obligation bonds.

(b) The report must be made not later than January 1 of each

odd-numbered year.

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

1999.

SUBCHAPTER D. REVENUE BONDS AND PROCEEDS

Sec. 1401.061. REVENUE BONDS. (a) The authority may:

(1) issue revenue bonds; and

(2) distribute the bond proceeds to any appropriate agency to:

(A) acquire, construct, or equip a new facility; or

(B) make a major repair of or renovate a:

(i) facility;

(ii) corrections institution, including a facility authorized by

Section 495.001(a) or 495.021(a);

(iii) criminal justice facility for the Texas Department of

Criminal Justice;

(iv) youth corrections institution; or

(v) mental health and mental retardation institution.

(b) The bond proceeds may be used to refinance an existing

obligation for a purpose described by Subsection (a).

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

1999.

Sec. 1401.062. REVENUE BOND PROCEEDS. On issuing bonds under

Section 1401.061, the board shall:

(1) certify to the appropriate agency and to the comptroller

that the funds are available; and

(2) deposit the bond proceeds in the state treasury to the

account of the appropriate agency.

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

1999.

Sec. 1401.063. INVESTMENT OF PROCEEDS. (a) With the board's

concurrence, the comptroller shall invest the unexpended revenue

bond proceeds and the investment income of those unexpended

proceeds in investments approved by law for the investment of

state funds.

(b) The investment income required for project costs, and not

required to be rebated to the federal government or used for debt

service, as determined by the board, shall be credited to the

appropriate agency. The investment income not required for

project costs, not required to be rebated to the federal

government, and not required for debt service shall be allocated

as provided by Section 404.071.

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

1999.

Sec. 1401.064. PAYMENT OF PRINCIPAL OR INTEREST. The board may

provide that the principal of and interest on revenue bonds

issued under this subchapter be paid from any source of funds

lawfully available to the board.

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

1999.

Sec. 1401.065. BOND REQUIREMENTS. Revenue bonds issued under

this subchapter are subject to Sections 1232.117 and 1232.118.

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

1999.

SUBCHAPTER E. REVENUE BOND PROJECTS

Sec. 1401.081. CONDITIONS FOR BEGINNING PROJECT. The

appropriate agency may begin an approved project financed under

Subchapter D after:

(1) the authority has certified that the authority has

authorized obligations in an amount sufficient to pay the

construction or purchase price of the project under an interim

construction finance agreement established by the authority in

accordance with Chapter 1371; or

(2) the following conditions are met:

(A) the revenue bond proceeds are deposited;

(B) the comptroller has certified that the funds are available;

(C) any reserve funds or capitalized interest certified to be

reasonably required by the authority has been transferred; and

(D) according to the authority's statement that specifies those

costs, the costs of issuance of the bonds have been paid.

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

1999.

Sec. 1401.082. REVENUE BOND REPAYMENT AND LEASE AGREEMENT. (a)

In accordance with a lease agreement, the appropriate agency,

with money appropriated for the purpose, shall pay to the board

an amount the board determines to be sufficient to:

(1) pay the principal of and interest on the bonds issued under

Section 1401.061;

(2) maintain a reserve fund necessary to service the debt; and

(3) reimburse the authority for other costs and expenses

relating to:

(A) a project; or

(B) the outstanding bonds.

(b) For purposes of this section, a state agency may enter into

a lease agreement in the name of and on behalf of the state.

(c) A state agency shall include in its biennial appropriation

request an amount sufficient to pay the principal of and interest

on outstanding bonds issued under Section 1401.061 for the

agency.

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

1999.

Sec. 1401.083. RIGHTS TO FINANCED PROPERTY. (a) Property

financed by the authority under Subchapter D does not become part

of other property to which it is attached or affixed or into

which it is incorporated, regardless of whether the other

property is real or personal.

(b) A state agency has the rights of a lessee in property

financed by the authority under Subchapter D. A person who claims

under or through the agency may not acquire any greater rights

with respect to the property.

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

1999.

SUBCHAPTER F. FINANCIAL PROVISIONS

Sec. 1401.101. EXEMPTION FROM TAXATION. A bond issued under

this chapter, any transaction related to the bond, and profits

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

state, a state agency, or a municipality or other political

subdivision of this state.

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

1999.

SUBCHAPTER G. MISCELLANEOUS PROVISIONS

Sec. 1401.121. TEXAS DEPARTMENT OF CRIMINAL JUSTICE MASTER PLAN.

(a) Unless the Texas Department of Criminal Justice has

submitted to the Bond Review Board a master plan for the

construction of corrections facilities, the proceeds of bonds

issued under this chapter may not be:

(1) distributed to the department; or

(2) used to finance a project of the correctional institutions

division of the department.

(b) The master plan must:

(1) be in the form, contain the information, and cover the

period prescribed by the Bond Review Board; and

(2) be revised annually.

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

1999.

Amended by:

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

87, Sec. 25.086, eff. September 1, 2009.