NATURAL RESOURCES CODE
CHAPTER 162. VETERANS' HOUSING ASSISTANCE PROGRAM
SUBCHAPTER A. GENERAL PROVISIONS
§ 162.001. DEFINITIONS. (a) In this chapter:
(1) "Board" means the Veterans' Land Board.
(2) "Fund" means the veterans' housing assistance
fund.
(3) "Home" means a dwelling within this state in which
a veteran intends to reside as the veteran's principal residence.
(4) "Lending institution" means a bank, trust company,
savings bank, national banking association, savings and loan
association, building and loan association, mortgage banker,
mortgage company, credit union, life insurance company, or other
financial institution that customarily provides service or aids in
the financing of mortgages on single-family residential housing
which has been approved for participation in the program by the
board. The term includes a holding company for any of the
foregoing.
(5) "Loan" means a veterans' housing assistance loan
made or acquired by the board under this chapter secured by a
mortgage on a veteran's home.
(6) "Program" means the Veterans' Housing Assistance
Program.
(7) "Commission" means the Texas Veterans Commission.
(8) "Veteran" has the meaning assigned by Section
161.001.
(9) "Veterans' housing assistance fund" means the
Veterans' Housing Assistance Fund established under Article III,
Section 49-b-1, of the Texas Constitution or the Veterans' Housing
Assistance Fund II established under Article III, Section 49-b-2,
of the Texas Constitution. Each fund shall be separate and distinct
from the other fund and the provisions of this chapter dealing with
the fund shall relate to each fund separately and to the separate
assets, liabilities, and administration of each fund.
(b) Repealed by Acts 2003, 78th Leg., ch. 1145, § 5.
(c) Repealed by Acts 2003, 78th Leg., ch. 1145, § 5.
Added by Acts 1983, 68th Leg., p. 547, ch. 115, § 1. Amended by
Acts 1985, 69th Leg., ch. 266, § 1, eff. Sept. 1, 1985; Acts
1985, 69th Leg., ch. 798, § 15; Acts 1991, 72nd Leg., ch. 239,
§ 1, eff. Sept. 1, 1991; Acts 1993, 73rd Leg., ch. 242, § 2.01
to 2.03, eff. Aug. 30, 1993; Acts 2001, 77th Leg., ch. 83, § 2,
eff. May 11, 2001; Acts 2003, 78th Leg., ch. 1145, § 3, 5, eff.
June 20, 2003.
§ 162.002. MONEY AND INTERESTS INCLUDED IN THE VETERANS'
HOUSING ASSISTANCE FUND. (a) The veterans' housing assistance
fund shall include:
(1) any interest of the board in home mortgage loans
made from money in the fund to veterans pursuant to this chapter
including any insurance thereon or on the homes;
(2) the proceeds derived from the sale or other
disposition of the board's interest in home mortgage loans;
(3) the money attributable to any bonds issued and
sold by the board to provide money for the fund which shall include
but shall not be limited to the proceeds from the issuance and sale
of such bonds;
(4) income, rents, and any other pecuniary benefit
received by the board as a result of making these loans;
(5) sums received by way of indemnity or forfeiture
for the failure of any bidder for the purchase of any such bonds to
comply with the person's bid and accept and pay for such bonds and
amounts received by the board under bond enhancement agreements
with respect to the bonds;
(6) interest received from investments of any such
money; and
(7) any equitable interest in properties encumbered
under this program 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.
Added by Acts 1983, 68th Leg., p. 547, ch. 115, § 1. Amended by
Acts 1993, 73rd Leg., ch. 242, § 2.04, eff. Aug. 30, 1993; Acts
1997, 75th Leg., ch. 71, § 3, eff. May 9, 1997.
§ 162.003. ADMINISTRATION. (a) The board shall
administer the veterans' housing assistance fund and the Veterans'
Housing Assistance Program in accordance with this chapter.
(1) The board may contract with other agencies of the
state or with private entities to administer all or part of the
program.
(2) To the extent that it is cost effective, the board
may contract with the commission to determine whether or not
applicants qualify as veterans under the terms of this chapter.
(3) The board may set and collect fees it considers
reasonable and necessary from each applicant to cover the expenses
of administering the program, and these fees shall be deposited in
the State Treasury and credited to a special housing program fee
fund.
(b) The board shall adopt rules governing the
administration of the fund and program, the making or acquiring of
veterans' housing assistance loans, the criteria for approving
lending institutions, the use of insurance on the loans and the
homes financed under the program, as deemed appropriate by the
board, as further security for the loans, the verification of
occupancy of the home by the veteran as his principal residence, and
the terms and conditions of any contract made with any lending
institution for processing, originating, servicing, or
administering the loans. In determining the terms of any contracts
for the origination or servicing of loans, the board shall review
the prudent lending practices prevalent in the residential mortgage
lending industry and shall follow such practices to the maximum
extent practical.
(c) The board shall determine the quality and type of homes
to be financed under the Veterans' Housing Assistance Program.
(d) The board shall maintain a list of approved lending
institutions and shall review and revise such list as necessary at
least annually.
(e) With respect to loans made under the program, the
Veterans' Land Board shall file semiannually with the Bond Review
Board a report on the performance of the loans. The Bond Review
Board shall review the reports filed by the Veterans' Land Board
under this subsection to assess the performance of loans made under
the program. The filing dates and the contents of the reports must
comply with any rules adopted by the Bond Review Board.
Added by Acts 1983, 68th Leg., p. 547, ch. 115, § 1. Amended by
Acts 1985, 69th Leg., ch. 798, § 16, eff. Sept. 1, 1985; Acts
1991, 72nd Leg., 1st C.S., ch. 4, § 13.03, eff. Aug. 22, 1991;
Acts 2001, 77th Leg., ch. 1420, § 8.356, eff. Sept. 1, 2001.
§ 162.004. INVESTMENTS OF CERTAIN MONEY IN THE VETERANS'
HOUSING ASSISTANCE FUND. Money in the fund that is not immediately
committed to the payment of principal and interest on bonds issued
by the board to provide money for the fund, the making of home
mortgage loans as provided by this chapter, or the payment of
expenses as provided by this chapter may be invested in investments
authorized for the veterans land fund.
Added by Acts 1989, 71st Leg., ch. 720, § 4, eff. June 14, 1989.
§ 162.0041. 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, § 4, eff. May 9, 1997.
§ 162.0042. 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, § 4, eff. May 9, 1997.
Amended by Acts 1999, 76th Leg., ch. 134, § 4, eff. May 20, 1999.
§ 162.005. SALE OF LOANS. (a) Notwithstanding any
other provision of this chapter, the board may sell at public or
private sale, with or without public bidding, any or all of the
loans in the fund. Proceeds from the sale shall be deposited in the
fund and otherwise applied in the manner provided by this chapter,
except that at the direction of the board the sale proceeds may be
used by the board, together with other available money, to
discharge, pay, or redeem, in whole or in part, outstanding bonds
issued by the board under this chapter.
(b) In the resolution of the board that authorizes the sale
of any or all of the loans in the fund, the board may also authorize
one or more designated officers or employees of the board to act on
the board's behalf in:
(1) conducting the sale of the loans; and
(2) determining:
(A) the purchaser of the loans; and
(B) the terms of the purchase agreement.
(c) A resolution that authorizes an officer or employee of
the board to act on the board's behalf as provided by Subsection (b)
must establish the maximum principal amount of the loans to be sold
and the minimum sales price of the loans to be sold, expressed as a
percentage of the principal amount of the loans.
Added by Acts 1993, 73rd Leg., ch. 242, § 2.05, eff. Aug. 30,
1993. Amended by Acts 2001, 77th Leg., ch. 620, § 2, eff. Sept.
1, 2001.
§ 162.006. TEMPORARY TRANSFERS. Amounts temporarily
transferred from either veterans' housing assistance fund to the
veterans' land fund or to the other veterans' housing assistance
fund under the Texas Constitution shall be returned to the fund as
soon as practicable. Investment earnings allocated by the board to
the transferred amounts shall be credited to the fund as if the
transfer had not been made.
Added by Acts 1993, 73rd Leg., ch. 242, § 2.06.
SUBCHAPTER B. VETERANS' HOUSING ASSISTANCE PROGRAM
§ 162.011. LOANS. (a) The board shall make or acquire
loans with money from the veterans' housing assistance fund in
accordance with this chapter and the rules adopted by the board.
(b) To qualify for a loan under this chapter, a person must
be a veteran at the time the person applies for the loan. If an
eligible veteran dies after filing an application, the surviving
spouse may complete the transaction.
(c) The final principal payment on any loan under this
chapter shall be made not later than 40 years after the date of the
loan. The board shall determine the maximum principal amount of
loans to any veteran that may be outstanding at any time, except
that amounts allocable to a home mortgage loan may not exceed the
maximum amount allowable for a similar home mortgage loan through
the United States Department of Veterans Affairs or any successor
agency.
(d) The board shall obtain insurance covering at least 50
percent of all losses anticipated in connection with veteran
payment defaults on loans secured by first or second mortgages,
based upon the advice of one or more qualified consultants to the
board as to potential losses which may be reasonably expected on the
loans as determined by analysis, including but not limited to
actual experience in the residential mortgage lending industry on
similar types of mortgage loans, or, in the alternative, the board
shall obtain insurance which shall insure repayment of at least 50
percent of the outstanding principal amount of all loans in the
event of the nonpayment of the loans by the veterans.
(e) All fees to be charged to a veteran receiving a loan
under this chapter must be approved by the board. The board may
enter into contracts with lending institutions to assist in
processing, originating, servicing, or administering loans under
this chapter. Any fees and expenses incurred in connection with a
loan, including the cost of insurance, may be charged to the veteran
and made a part of the veteran's payments.
(f) The board may by rule determine, from time to time, the
number of loans that a veteran may receive under this chapter.
Added by Acts 1983, 68th Leg., p. 547, ch. 115, § 1. Amended by
Acts 1985, 69th Leg., ch. 798, § 21, eff. Sept. 1, 1985; Acts
1991, 72nd Leg., ch. 160, § 3, eff. Aug. 26, 1991; Acts 1993,
73rd Leg., ch. 242, § 2.07, eff. Aug. 30, 1993; Acts 1999, 76th
Leg., ch. 133, § 2, eff. May 20, 1999.
§ 162.013. INTEREST RATE. A loan under this chapter
shall bear a fixed, variable, floating, or other rate or rates of
interest determined by the board. The board may set the interest
rate or rates to provide a margin over the rate paid by the board on
its bonds issued under this chapter. The difference between the
cost of the money to the board and the interest rate or rates
charged to a veteran may be used in whole or in part to defray the
expense of administering the program. To assure the maximum
benefit of the program to the veteran, the board shall adopt rules
relative to the fees, charges, and interest rates charged by the
lending institutions on the financing of the home with money other
than from the fund and shall limit to the maximum extent practical
such fees, charges, and interest rates to those which would be
collected by the lending institution in the normal course of its
residential mortgage lending business.
Added by Acts 1983, 68th Leg., p. 547, ch. 115, § 1. Amended by
Acts 1993, 73rd Leg., ch. 242, § 2.08, eff. Aug. 30, 1993.
§ 162.014. SECURITY FOR THE LOAN. No disbursement of
funds on a loan shall be made unless the loan is secured by a
mortgage, deed of trust, or other lien on the home. A mortgage
retained by or a deed of trust to the board or any other lien may be
a participation in a lien securing any other loan for the purchase
of the property. Payments to retire the loan shall be made at times
determined by the board.
Added by Acts 1983, 68th Leg., p. 547, ch. 115, § 1.
§ 162.015. INITIAL PAYMENT OR EQUITY. The board may
require an initial payment on a loan or may require an investment in
the home by the veteran in an amount or amounts set by the board's
rules under this chapter.
Added by Acts 1983, 68th Leg., p. 547, ch. 115, § 1. Amended by
Acts 1993, 73rd Leg., ch. 242, § 2.09, eff. Aug. 30, 1993.
§ 162.016. TIME LIMIT ON TRANSFER. (a) A home or any
interest therein, against which there is a mortgage, deed of trust,
or any other lien securing a loan under this chapter may not be
leased, transferred, sold, or conveyed in whole or in part until the
original veteran purchaser has occupied the home as his principal
residence for a period of three years from the date of the purchase
of the home and complied with the terms and conditions of this
chapter and the rules of the board.
(b) After the three-year period, a home may be transferred,
sold, or conveyed subject to any lien securing a loan under this
chapter at any time if all mature interest, principal, and taxes
have been paid, the terms and conditions of this chapter and rules
of the board have been met, and the approval of the board has been
obtained.
(c) The board may waive the time limitation of Subsection
(a) of this section upon the death, bankruptcy, financial
incapacity, or divorce of the veteran or in the event a veteran is
forced to move due to a change in employment or because his home is
condemned through no fault of the veteran or at any other time it
deems a waiver to be in the best interest of the program.
(d) In the event the requirements of Subsection (a) of this
section fail to be met and the board does not waive the time
limitations as provided in Subsection (c) of this section, the
board may provide in its rules for the escalation of the interest
rate on the loan to a higher rate of interest or the acceleration of
all principal and interest on the loan or such other remedy as the
board may in its discretion deem appropriate.
Added by Acts 1983, 68th Leg., p. 547, ch. 115, § 1.
§ 162.017. FORECLOSURE AND RESALE. The board shall
adopt rules providing for the procedures and the rules for
foreclosure and resale of homes financed with a loan under this
chapter.
Added by Acts 1983, 68th Leg., p. 547, ch. 115, § 1.
§ 162.018. INTEREST RATE ON DELINQUENT PRINCIPAL AND
INTEREST. Principal and interest that become delinquent shall
bear interest at a rate fixed by the board.
Added by Acts 1983, 68th Leg., p. 547, ch. 115, § 1.
§ 162.019. ENFORCEMENT OF FORFEITURE AND PROTECTION OF
RIGHTS. The board may request the attorney general to take
whatever action is necessary to protect the rights of the state and
the veterans' housing assistance funds in any matter concerning the
program, and on a request, the attorney general shall take such
action.
Added by Acts 1983, 68th Leg., p. 547, ch. 115, § 1.
[Sections 162.020 to 162.030 reserved for expansion]
SUBCHAPTER C. BONDS
§ 162.031. ISSUANCE AND SALE OF BONDS; DISPOSITION OF
PROCEEDS. (a) 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,
except that the proceeds of bonds issued under the authority of
Article III, Section 49-b-1, of the Texas Constitution for the
purpose of making loans to veterans shall be a part of the veterans'
housing assistance fund established by that provision, and the
proceeds of bonds issued under the authority of Article III,
Section 49-b-2, of the Texas Constitution for the purpose of making
loans to veterans shall be a part of the veterans' housing
assistance fund established by that provision.
(b) The board may use money in the fund attributable to
bonds issued to provide money for the fund to pay all costs of
issuance of the bonds, including costs, fees, and expenses of the
sort the board is authorized to pay from the veterans' land fund in
connection with the issuance of the veterans' land bonds.
Added by Acts 1983, 68th Leg., p. 547, ch. 115, § 1. Amended by
Acts 1989, 71st Leg., ch. 720, § 5, eff. June 14, 1989; Acts
1993, 73rd Leg., ch. 242, § 2.10.
§ 162.032. INSTALLMENTS. The board may issue bonds in
one or several installments.
Added by Acts 1983, 68th Leg., p. 547, ch. 115, § 1.
§ 162.033. INTEREST RATE. The bonds shall bear the rate
of interest prescribed by the board.
Added by Acts 1983, 68th Leg., p. 547, ch. 115, § 1.
§ 162.034. 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 the date of their
issuance.
(b) The board 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.
Added by Acts 1983, 68th Leg., p. 547, ch. 115, § 1. Amended by
Acts 1993, 73rd Leg., ch. 242, § 2.11, eff. Aug. 30, 1993.
§ 162.035. FORM, DENOMINATION, AND PLACE OF PAYMENT OF
BONDS. The board shall determine the terms of the bonds and the
form of the bonds, including the forms of interest coupons attached
to the bonds, if any, and shall fix the denomination of the bonds
and the place for payment of the principal of and interest on the
bonds.
Added by Acts 1983, 68th Leg., p. 547, ch. 115, § 1.
§ 162.036. 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.
Added by Acts 1983, 68th Leg., p. 547, ch. 115, § 1. Amended by
Acts 1993, 73rd Leg., ch. 242, §2.12, eff. Aug. 30, 1993; Acts
1993, 73rd Leg., ch. 300, § 37, eff. Aug. 30, 1993; Acts 2001,
77th Leg., ch. 620, § 3, eff. Sept. 1, 2001.
§ 162.037. 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.
(c) If an officer whose manual or facsimile signature
appears on 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 as if
the officer had remained in office until the delivery of the bonds.
Added by Acts 1983, 68th Leg., p. 547, ch. 115, § 1.
§ 162.038. APPROVAL BY ATTORNEY GENERAL. Before the
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 chapter, the bonds shall be approved by the
attorney general.
Added by Acts 1983, 68th Leg., p. 547, ch. 115, § 1.
§ 162.039. REGISTRATION WITH COMPTROLLER. After the
bonds are approved by the attorney general, they shall be
registered in the office of the comptroller of public accounts.
Added by Acts 1983, 68th Leg., p. 547, ch. 115, § 1.
§ 162.040. VALIDITY OF BONDS. (a) After the bonds are
approved by the attorney general and registered with the
comptroller of public accounts, they shall be held as valid and
binding general 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 certified copy of that certificate shall
be admitted and received in evidence as to the validity of the
bonds.
(c) Only forgery or fraud may be offered as a challenge to
the validity of the bonds.
Added by Acts 1983, 68th Leg., p. 547, ch. 115, § 1.
§ 162.041. 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.
Added by Acts 1983, 68th Leg., p. 547, ch. 115, § 1.
§ 162.042. 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.
Added by Acts 1983, 68th Leg., p. 547, ch. 115, § 1.
§ 162.043. 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.
Added by Acts 1983, 68th Leg., p. 547, ch. 115, § 1.
§ 162.044. SALE OF BONDS. Bonds may be sold at public or
private sale at a price or prices and on terms determined by the
board.
Added by Acts 1983, 68th Leg., p. 547, ch. 115, § 1. Amended by
Acts 1993, 73rd Leg., ch. 242, § 2.13, eff. Aug. 30, 1993.
§ 162.045. REPLACEMENT BONDS. The board may provide for
replacement of bonds that are mutilated, lost, or destroyed.
Added by Acts 1983, 68th Leg., p. 547, ch. 115, § 1.
§ 162.046. REFUNDING BONDS. 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.
Added by Acts 1983, 68th Leg., p. 547, ch. 115, § 1.
§ 162.047. 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 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.
Added by Acts 1983, 68th Leg., p. 547, ch. 115, § 1. Amended by
Acts 1993, 73rd Leg., ch. 242, § 2.14, eff. Aug. 30, 1993.
§ 162.048. TAXATION OF BONDS. The 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.
Added by Acts 1983, 68th Leg., p. 547, ch. 115, § 1.
§ 162.049. PAYMENT OF PRINCIPAL AND INTEREST. The
comptroller shall pay the principal on bonds as they mature and the
interest as it becomes payable. Payments shall be made at the place
of payment designated on the bonds.
Added by Acts 1983, 68th Leg., p. 547, ch. 115, § 1. Amended by
Acts 1997, 75th Leg., ch. 1423, § 14.21, eff. Sept. 1, 1997.
§ 162.050. CONSTITUTIONAL APPROPRIATIONS. (a) If,
during the existence of the fund or during the time any 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 or both principal and interest that are to come due and to be
paid from the fund during the following 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 or both
actually become due there is not sufficient money in the fund
available to pay the amount due.
Added by Acts 1983, 68th Leg., p. 547, ch. 115, § 1. Amended by
Acts 1993, 73rd Leg., ch. 242, § 2.15, eff. Aug. 30, 1993.
§ 162.051. PURCHASE AND DESTRUCTION OF BONDS. (a) The
board may use money in the fund to purchase on the open market any
bonds it has issued and sold to provide money for the fund, and the
debt represented by those bonds when purchased is considered
canceled.
(b) Bonds purchased by the board under Subsection (a) of
this section shall be mutilated, burned, or otherwise destroyed by
the comptroller, who shall certify this fact to the board under the
seal of office.
(c) Interest may not be paid on those bonds after their
purchase by the board.
Added by Acts 1993, 73rd Leg., ch. 242, § 2.16, eff. Aug. 30,
1993. Amended by Acts 1997, 75th Leg., ch. 1423, § 14.22, eff.
Sept. 1, 1997.
§ 162.052. 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 making of loans may be
paid from money in the related fund, provided that any 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.
(c) Unless the board elects otherwise in its approval of a
bond 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, § 2.17, eff. Aug. 30,
1993. Amended by Acts 1999, 76th Leg., ch. 134, § 5, eff. May 20,
1999; Acts 2001, 77th Leg., ch. 1420, § 8.357, eff. Sept. 1,
2001.
