TX Water Code § 15.435 (2021)
2021 Texas Statutes|Water Code|Title 2 - Water Administration|Subtitle C - Water Development|Chapter 15 - Texas Water Assistance Program|Subchapter G. State Water Implementation Fund for Texas|Section 15.435. Bond Enhancement Agreements

Sec. 15.435.  BOND ENHANCEMENT AGREEMENTS.  (a)  A bond enhancement agreement entered into under this section is an agreement for professional services.  A bond enhancement agreement must contain terms that are consistent with Section 15.433(h), and the agreement, including the period covered by the agreement and all other terms and conditions of the agreement, must be approved by the board.  An obligation to disburse money from the fund, or from a special account established by the board, in accordance with a bond enhancement agreement is a special obligation of the board payable solely from designated income and receipts of the fund or of the account, as determined by the board.  An obligation to disburse money from the fund, or from a special account established by the board, in accordance with a bond enhancement agreement does not constitute indebtedness of the state.(b)  To facilitate the use of the fund for the purposes of this subchapter, the board may direct the trust company to enter into bond enhancement agreements to provide a source of revenue or security for the payment of the principal of and interest on general obligation bonds, including bonds issued under Section 49-d-9 or 49-d-11, Article III, Texas Constitution, or revenue bonds issued by the board to finance or refinance projects included in the state water plan if the proceeds of the sale of the bonds have been or will be deposited to the credit of:(1)  the state water implementation revenue fund for Texas;(2)  the water infrastructure fund;(3)  the rural water assistance fund;(4)  the Texas Water Development Fund II state participation account; or(5)  the agricultural water conservation fund.(c)  If the trust company enters into a bond enhancement agreement under Subsection (b), the board may direct the trust company to make disbursements from the fund to another fund or account for the support of bonds the proceeds of which are used to provide financial assistance in the form of:(1)  a loan bearing an interest rate of not less than 50 percent of the then-current market rate of interest available to the board;(2)  a loan to finance a facility under repayment terms similar to the terms of debt customarily issued by the entity requesting assistance but not to exceed the lesser of:(A)  the expected useful life of the facility; or(B)  30 years;(3)  a deferral of loan repayment, including deferral of the repayment of:(A)  principal and interest; or(B)  accrued interest;(4)  incremental repurchase terms for an acquired facility, including terms for no initial repurchase payment followed by progressively increasing incremental levels of interest payment, repurchase of principal and interest, and ultimate repurchase of the entire state interest in the facility using simple interest calculations; or(5)  a combination of the methods of financing described by Subdivisions (1)-(4).(d)  The board may direct the trust company to enter into bond enhancement agreements with respect to bonds issued by the board before September 1, 2013, only if:(1)  those bonds otherwise satisfy the requirements of Subsections (b) and (c);(2)  the proceeds of those bonds were or are required to be used only for the implementation of water projects recommended through the state and regional water planning processes under Sections 16.051 and 16.053; and(3)  general revenue of the state was appropriated before September 1, 2013, for the payment of debt service on those bonds.(e)  The board may direct the trust company to enter into bond enhancement agreements with respect to refunding bonds issued by the board to refund bonds issued by the board the proceeds of which have been or are to be used for projects included in the state water plan and which otherwise satisfied the requirements of Subsections (b) and (c).(f)  The board may not direct the trust company to enter into a bond enhancement agreement with respect to bonds issued by the board the proceeds of which have been or are to be used to make grants.(g)  The board may not direct the trust company to enter into a bond enhancement agreement with respect to bonds issued by the board the proceeds of which may be used to provide financial assistance to an applicant if at the time of the request the applicant has failed to  provide information regarding a water conservation plan in accordance with Section 16.4021.(h)  The board may not direct the trust company to enter into a bond enhancement agreement with respect to bonds issued by the board the proceeds of which may be used to provide financial assistance to an applicant unless at the time of the request the applicant has acknowledged its legal obligation to comply with any applicable requirements of:(1)  federal law relating to contracting with disadvantaged business enterprises; and(2)  state law relating to contracting with historically underutilized businesses.(i)  The board may not approve a bond enhancement agreement with respect to bonds issued by the board unless the agreement contains a provision to the effect that if the trust company makes a disbursement under the bond enhancement agreement from the fund to the credit of another fund or account as provided by Section 15.434(a), the board shall direct the comptroller to transfer an amount not to exceed that amount from the fund or account receiving the payment back to the fund if:(1)  money is available in the surplus balance in the fund or account for that purpose; and(2)  the money transferred back to the fund will not cause general obligation bonds that are payable from the fund or account receiving the payment to no longer be self-supporting for purposes of Section 49-j(b), Article III, Texas Constitution.(j)  For purposes of Subsection (i)(1), the surplus balance of a fund or account that receives a disbursement from the fund under a bond enhancement agreement is the amount of money on deposit in the fund or account, as determined by the board, that is attributable to the general obligation bonds or revenue bonds that are the subject of the bond enhancement agreement, including money received from the sale or other disposition of the board's rights to receive repayment of financial assistance, money received from the sale, transfer, or lease of an acquired facility, money received from the sale of water associated with an acquired facility, and related investment earnings, that exceeds the amount required to pay annual debt service on the bonds and any other amounts specified in the resolution or other proceedings authorizing the bonds and any related obligations.(k)  The board shall submit each bond enhancement agreement and the record relating to the agreement to the attorney general for examination as to the validity of the agreement.  If the attorney general finds that the agreement has been made in accordance with the constitution and other laws of this state, the attorney general shall approve the agreement and the comptroller shall register the agreement.  If the agreement is not submitted at the same time that the bonds to which it relates are submitted, the agreement shall be treated as a public security solely for the purposes of Section 1202.004, Government Code.(l)  After a bond enhancement agreement has been approved and registered as provided by Subsection (k), the agreement is valid and is incontestable for any cause.(m)  At the direction of the board, the trust company shall make disbursements from the fund, or from a special account established by the board, in accordance with a bond enhancement agreement in the amounts the board determines are needed for debt service payments on, or for security provisions of, general obligation bonds or revenue bonds issued by the board the proceeds of the sale of which have been deposited in another fund administered by the board, or in an account in that other fund, for use in accordance with this subchapter, after the board considers all other sources available for those purposes in that other fund or account.  Money transferred under this subsection may be deposited into that other fund or into a special account established by the trust company or a corporate trustee that is a trust company or a bank that has the powers of a trust company, as determined by the board.|Added by Acts 2013, 83rd Leg., R.S., Ch. 207 (H.B. 4), Sec. 2.02, eff. November 5, 2013.Amended by: Acts 2019, 86th Leg., R.S., Ch. 886 (H.B. 3339), Sec. 3, eff. September 1, 2019.Acts 2021, 87th Leg., R.S., Ch. 68 (H.B. 1905), Sec. 1, eff. September 1, 2021.|