PART 10. TEXAS PUBLIC FINANCE AUTHORITY
CHAPTER 221. DISTRIBUTION OF BOND PROCEEDS
The Texas Public Finance Authority proposes amendments to §§221.2 - 221.6 concerning the distribution of bond proceeds. The proposed amendments are required to update technical information, such as legal citations, and to make the procedures for financing agencies' projects as efficient as possible.
Judith Porras, Interim Executive Director, estimates that for each year of the first five years the amendments will be in effect, there will be no foreseeable fiscal implications for state or local governments as a result of enforcing or administering the rules.
Ms. Porras has determined that for each year of the first five years the proposed rules will be in effect, the public benefit anticipated as a result of enforcing the rules will be a technically correct rule text and more efficient procedures.
Ms. Porras has also determined that there will be no probable economic cost to persons who are required to comply with the proposed rules. Further, in accordance with Texas Government Code §2001.022, she has determined that the proposed rules will not affect a local economy, and, therefore, no local employment impact statement is required, and that the proposed rules will have no adverse economic effect on small businesses or micro-businesses, as result of enforcing or administering the rules.
Written comments on the proposed rules may be submitted within 30 days of publication of this proposal in the Texas Register to Judith Porras, Texas Public Finance Authority, 300 W. 15th St., Room 411, Austin, Texas 78701, or electronically to: judith.porras@tpfa.state.tx.us.
The amendments are proposed under Texas Government Code, Chapter 1232, which provides the Texas Public Finance Authority with the authority to adopt rules necessary to administer Texas Government Code, Chapter 1232.
No other statutes, articles or codes are affected by this proposal.
§221.2.Definitions.
The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise.
(1) Act--The Texas Public Finance Authority Act, Texas
Government Code, Chapter 1232 [1231].
(2) Authority--The Texas Public Finance Authority, together with any successor to its duties and functions.
(3) Board--The board of directors of the authority, the governing body of the authority.
(4) Bond Review Board--The Bond Review Board as created by the Texas Legislature pursuant to Texas Government Code, Chapter 1231, or any successor to its duties and functions.
(5) Bonds--Public securities [General
obligation bonds and/or revenue bonds] issued by the authority
pursuant to a constitutional provision and the Act, [or]
the Act, or other legislation.
(6) Capitalized interest--That portion of the proceeds of bonds which represents interest to be capitalized and payable prior to completion of acquisition, construction, or renovation of the projects being financed with such bonds.
(7) Client Agency--A state agency or institution of higher education on whose behalf the board may issue bonds and who has control of or responsibility for facilities to be financed with proceeds of such bonds.
(8) Code--The Internal Revenue Code of 1986.
(9) Commercial paper notes--Variable rate public securities that mature in not more than 270 days and issued by the authority pursuant to a constitutional provision and the Act, the Act, or other legislation.
(10) [(9)] Comptroller--The Comptroller
of Public Accounts of the State of Texas, or any successor thereto.
(11) [(10)] Constitutional provision--A
provision of the Texas Constitution that authorizes the issuance of
general obligation bonds by the Authority; namely: Article III, §49-h,
Article III, §49(e), Article III, §49-l, Article III, §49-n,
[or] Article III, §50-f, Article III, §50-g,
or Article III, §67.
(12) [(11)] Construction schedule--The
time period and sequence of action during which the actual construction
of a project or projects is planned to be accomplished.
(13) [(12)] Costs of issuance--The
costs related to the issuance of any issue of bonds, including, but
not limited to:
(A) financing charges, including insuring principal and interest payment on the bonds or obtaining other credit enhancement for the bonds;
(B) professional fees and expenses, including architectural, engineering, surveying, and legal services;
(C) administrative expenses of the authority to the extent provided by law;
(D) the authority's or the paying agent/registrar's charges and expenses;
(E) rating agency fees;
(F) bond printing expenses; and
(G) such other expenses as may be necessary or incident to issuing and marketing of the bonds.
(14) [(13)] Debt service fund--Generally,
the fund created in financing documents to contain money for the payment
of debt service on the bonds.
(15) [(14)] Disbursement--The
transfer of bond proceeds within a project fund from the authority's
control to the client agency's control. [from the state
treasury to a cost center with the comptroller for payment of duly
authorized expenses relating to a bond issue.]
(16) [(15)] Expenditure [
Disbursement] schedule--The schedule controlling the frequency
and amounts of expenditures [disbursements]
from bond proceeds and used for payment of duly authorized expenses
relating to a project.
(17) [(16)] Executive director--The
executive director, or other authorized agent of the authority empowered
by the board to perform the duties of the executive director.
(18) [(17)] Financing documents--Those
documents approved by the board relating to the issuance of bonds,
including, but not limited to, bond resolutions, financing agreements,
funds management agreements, lease agreements, and official statements.
(19) [(18)] General appropriations
act--Any legislative act appropriating money for the operation of
state government.
(20) [(19)] General obligation
bond--A bond issued on behalf of the State of Texas, the repayment
of which is guaranteed by the full faith and credit of the State
of Texas [state] and which has been authorized by
the Texas Constitution.
(21) [(20)] Legislature--The
Legislature of the State of Texas.
(22) [(21)] Memorandum of understanding--The
document executed by the authority and a client agency that defines
the division of authority and responsibility between the authority
and a client agency.
(23) [(22)] Plans and specifications--The
plans and specifications for each respective project, as the same
may be amended from time to time.
(24) [(23)] Project--The
construction, renovation, acquisition, or equipping a [Any]
building, structure, or other facility, and the component parts thereof,
or program authorized by the legislature for financing
by a debt issuance. [from bond proceeds and which consists
of acquiring, construcing, or equipping new facilities or major repair
or renovation of existing facilities.]
(25) [(24)] Project Summary [analysis
]--A general description of the project that will
be paid for with proceeds of bonds or commercial paper notes including,
but not limited to:
(A) a complete description of the facility or project together with a justification of such facility or project prepared by the client agency;
[(B) a detailed estimate of the amount
of space needed to meet the needs of the client agency and to allow
for realistic future growth;]
(B) [(C)] a description of the
proposed facility prepared by an architect/engineer and including
schematic plans and outline specifications describing the type of
construction and probable materials to be used, sufficient to establish
the general scope and quality of construction;
(C) [(D)] an estimate of the
probable cost of construction;
(D) [(E)] a description of the
proposed site of the project and an estimate of the cost of site preparation;
(E) [(F)] an overall estimate
of the cost of the project;
(F) a description of the program to be financed, including costs and a schedule of expenditures; and
[(G) information about alternative
proposals for meeting the space needs of the client agency by new
construction, acquisition, and rehabilitation of an existing or historic
structure, or a combination thereof; and]
(G) [(H)] other information as
required by the authority.
(26) [(25)] Project costs--To
the extent authorized by law or regulation, all costs incurred by
the authority, or any client agency requesting financing of a project
with respect to the acquisition, construction, or equipment of new
facilities, or for major repair or renovation of existing facilities,
as the case may be, including, but not limited to, the costs of:
(A) the acquisition of all land, rights-of-way, property rights, easements, and interests;
(B) all furnishings, machinery, and equipment;
(C) necessary contingency funds;
(D) architectural, engineering, and legal services;
(E) plans, specifications, surveys, and estimates of cost and revenue, including a master plan;
(F) contracts necessary or incident to determining the feasibility and practicability of a project;
(G) administrative expenses of the authority which are necessary and related to a project to the extent provided by law; and
(H) such other contracts as may be necessary or incident
to the carrying out or start-up of any project, including the refunding
or refinancing of any outstanding obligations, mortgages, or advances
issued, made, or given by any person for any of the aforementioned costs; or [.]
(I) costs anticipated to be necessary to fund a program.
(27) [(26)] Project fund--The
fund created in financing documents for the payment of project costs.
(28) [(27)] Regulations--The
Income Tax Regulations promulgated pursuant to the Code.
(29) [(28)] Revenue bond--A bond
issued by the authority, the repayment of which depends on:
(A) the pledge of all or any part of the designated
rents, issues, and profits from leasing the project to the
State of Texas [state] through the client agency; or
(B) from any other source of funds lawfully available to the authority.
(30) [(29)] TDCJ--The Texas Department
of Criminal Justice, together with any successor to its duties and functions.
§221.3.Bond Issuance Process.
(a) Preliminary Requirements. Following a legislative session in which bonds have been authorized for a project, the authority and the client agency will confirm basic information concerning the bond issue, such as the time, amount, and scope of the project, and schedule an orientation meeting at their mutual convenience. In most cases, a formal orientation meeting will be required and such a meeting should occur before the authority must begin work on the bond issue, but after the client agency has had sufficient time to prepare a preliminary plan for the project.
(1) As part of the orientation, the authority will provide the client agency the following information:
(A) an explanation of the bond issuance process in plain language;
(B) a review of the specific tasks required for a bond issue and the time needed for such tasks;
(C) a review of the documents, other information, if any, and time requirements applicable to the client agency's request for financing; and
(D) an identification of the authority's staff and outside consultants who will work on the financing, by name and function.
(2) The client agency should be prepared to review a detailed project description and project schedule during the orientation meeting and identify the client agency's staff who will work with the authority on the bond issue.
(3) If a client agency's staff is familiar with the bond issuance process and the authority's requirements for issuing bonds because they have participated in prior bond issuance transactions, a formal orientation meeting is not required. The executive director will insure that up-to-date information described in paragraph (1)(A) - (D) of this subsection is provided to the client agency in an alternative manner such as by schedules, memorandum, or telephone conference.
(b) Request for financing. A request for financing under this section shall include:
(1) a resolution of the client agency's governing body [
board] signed by the appropriate officer authorizing
submission of the request for financing;
(2) a project summary [analysis],
required by the authority for application to the Bond Review Board;
and[, except as provided in X221.4(b) of this title (relating
to Criteria for Issuance of Bonds);]
[(3) a schedule of actions required
to be accomplished by the client agency prior to the first actual
disbursement of funds after issuance; and]
(3) [(4)] an expenditure [
a disbursement] schedule.
(c) Amendment to request for financing. A client agency may reschedule the date requested for authority consideration of the bond issuance or amend its request by submitting an amendment to its request for financing at any time prior to the authority board meeting at which the issue will be considered.
(d) Board action. The request for financing will be
posted for consideration by the board at the [its]
next [regularly scheduled] open meeting following the authority's
receipt of the request, for which timely public notice may be
given pursuant to Texas Government Code, Chapter 551. [If
the client agency's request is received eight days before the board's
regularly scheduled meeting date, which schedule shall be posted on
the authority's website, the request will be timely for the board's
consideration at the scheduled meeting.] The client agency will
be informed promptly of a change in the board's meeting date for the
month and the exact date on which the request will be considered.
(1) The board may either approve the request or require additional information. When it approves a request for financing, the board will also determine the method of sale of the bonds, either negotiated or competitive, or the issuance of commercial paper notes.
(2) The Board's approval of a request for financing is deemed to constitute approval of the submission of an application to the Bond Review Board for approval of the issuance of debt and instruction to staff to proceed with submission of the application.
(3)[ (2)] If the board determines
to sell bonds through a negotiated sale, it will designate an underwriting
syndicate in accordance with authority's underwriter selection procedures.
(4) [(3)] If the board determines
to sell bonds through a competitive sale, it will authorize the executive
director and financial advisor to prepare an invitation for competitive
bids in the time and manner required so that the board may approve
the distribution of the invitation and the Preliminary Official Statement
at its open meeting in the month immediately following.
(5) If the board determines to finance a request through the issuance of commercial paper notes, staff shall proceed to complete such issuances.
(e) Procedures following board approval of a request for financing through the issuance of bonds. As soon as possible following the board's approval of a request for financing, the authority staff, financial advisors, bond counsel, representatives of the client agency, and, for negotiated sales, the senior manager of the underwriting syndicate and its counsel, will convene an organization meeting to prepare a schedule of events for the financing, and begin work on the financing documents and an application for Bond Review Board approval of the financing.
(1) In most cases, the application for Bond Review Board approval will be submitted timely for consideration and approval of the Bond Review Board at its next regularly scheduled meeting following the board's approval of the request, however, the timing of the submission is within the discretion of the executive director.
(2) After the Bond Review Board approves the financing, the issuance and sale of the bonds may be scheduled and completed.
§221.4.Criteria for Issuance of Bonds or Commercial Paper Notes .
(a) The authority shall not issue bonds or commercial paper notes to finance any project or cost related thereto, unless:
(1) the project has been specifically authorized by the Act, the General Appropriations Act, or other applicable law;
(2) the [authority] board has approved [
accepted] the request for financing and has determined to proceed
with the issuance of bonds or commercial paper notes;
(3) the governing body of the client agency requesting such financing has authorized the execution of a memorandum of understanding between the client agency and the authority relating to the specific bond issue or commercial paper notes program and has agreed to necessary financing documents as may be appropriate and consistent with these sections;
(4) the bond or commercial paper notes issuance and the projects have been reviewed and approved by the Bond Review Board or any other agency required to review such bond proceedings or approve projects as authorized by law;
(5) the governing body of the client agency has by resolution authorized the execution and performance of the financing documents; and
(6) the board has approved the related financing documents.
(b) In the event proceeds are to be used to finance a project of the TDCJ, the TDCJ must have submitted to the Bond Review Board a master plan for correctional facilities prior to disbursement of bond proceeds.
(c) The authority assumes no responsibility in connection
with the eligibility of any specific project for financing nor with
respect to the need for such project or that any project will comply
with any legal requirement, except to review legislation authorizing
the project, the approval process with respect to the project, including
Bond Review Board approvals, and to provide a proper
description [descritpion
] of the project in bond offering documents, if required.
(d) The authority may request the assistance of the
client agency in complying with information requests from the Bond
Review Board, rating agencies, the [agency,]
attorney general, financial advisor, bond counsel, or other requests
required for issuance of the bonds. [approval of the
bond issue.]
§221.5. Procedure for Disbursement of Bond Proceeds.
(a) Unless otherwise indicated herein, proceeds of
bonds shall be distributed [by the comptroller] pursuant
to the terms of the financing documents.
(b) Upon the closing of each series of bonds, the purchasers
thereof shall pay the proceeds thereof in immediately available funds
to the authority, a corporate trustee, or depository account
designated by the client agency and specified in the financing documents.
[comptroller.]
(c) The executive director shall certify to the
client [comptroller and to the qualified
] agency requesting
such financing that the funds are available and, if bond proceeds
must be deposited to the Texas state treasury, to the comptroller
that such funds have been deposited with the comptroller for
the purpose of financing the related project.
(d) The authority will process vouchers for payment
of costs of issuance. The client agency will process vouchers for
payment of project costs. [The executive director shall
certify to the specific amounts to be transferred from the project
fund to the debt service fund. The executive director shall instruct
the comptroller from time to time to pay the costs of issuance in
such amounts as specified by the executive director from the project
fund. The qualified agency shall request disbursement of funds for
the purpose of paying project costs in accordance with the provisions
of the financing documents for a particular issue. The proceeds shall
be invested by the comptroller with the concurrence of the authority
until such time as the costs of issuance and project costs are paid.]
(e) The client agency requesting financing from the
authority shall pay [make or cause to be made payment
of] project costs from the project fund in accordance with the
contracts therefore and shall provide a written monthly report to
the authority of the activity on each project in compliance with the
reporting provisions of the financing documents. The authority will
not assume any responsibility for the actual acquisition, construction,
equipment, repair, or renovation of any project or the operation or
maintenance thereof, but the authority may inspect projects at reasonable
times upon reasonable notice to the client agency.
(f) No payments from the project fund may be made for any purpose other than paying costs of issuance and project costs, depositing amounts to any rebate fund for the benefit of the federal government in compliance with the Code, or deposit to the debt service fund of amounts remaining after payment of project costs.
(g) If any proceeds of the bonds remain in the project
fund after the completion of a project and depositing amounts to any
rebate fund for the benefit of the federal government in compliance
with the Code, except the amounts specified by the client agency requesting
such financing from the authority to be retained for any amount of
any project costs not then due and payable or the liability for payment
of which is being contested or disputed by the qualified agency and
all labor, services, materials, and supplies used in the project have
been fully paid and all costs and expenses incurred in connection
therewith have been paid, then the client agency requesting such financing
from the authority shall notify the authority that [cause
] such proceeds are to be transferred from the project
fund to the debt service fund; provided, however, that if the legislature
has authorized additional projects of the same nature as the project
theretofore financed during such time period, the board may, by formal
resolution and if permitted by law, authorize the use of such amounts
for such additional projects.
(h) If the bonds are intended by the board to bear
interest which is not includable in gross income of the recipient
pursuant to the Code, the use of proceeds of the bonds shall be restricted
in such manner and to such extent, as may be necessary, to obtain
and retain such tax exemption, in accordance with the Code and
Regulations. [including restrictions so that the bonds
will not constitute arbitrage bonds under the Code, §149(d) (concerning
advance refunding), unless otherwise prescribed by law. The requirements
of this section are subject to and shall be interpreted in accordance
with the Code, §148.]
(i) The plans and specifications will be on file at the client agency and available at all times for inspection by the authority.
§221.6.Complaints to the Authority.
In accordance with the requirements of §1232.113(e) of
the Act, the authority will notify client agencies of the name, mailing
address, and telephone number of the authority for the purpose of
directing complaints to the authority by posting such information
on the authority's website, by direct mail, [notifying
and reminding client agencies periodically of the authority's electronic
mail address,] and by distributing a fact sheet on the authority
during the orientation meeting described in §221.3 of this title
(relating to the Bond Issuance Process) of this Chapter 221.
This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of the Secretary of State on March 23, 2009.
TRD-200901151
Judith Porras
Interim Executive Director and General Counsel
Texas Public Finance Authority
Earliest possible date of adoption: May 3, 2009
For further information, please call: (512) 463-3143
The Texas Public Finance Authority proposes amendments to §223.1, concerning Historically Underutilized Business Program. The proposed amendments are required to update technical information, such as legal citations, and to make the procedures for financing agencies projects as efficient as possible.
Judith Porras, Interim Executive Director, estimates that for each year of the first five years the amendments will be in effect, there will be no foreseeable fiscal implications for state or local governments as a result of enforcing or administering the rules.
Ms. Porras has determined that for each year of the first five years the proposed rules will be in effect, the public benefit anticipated as a result of enforcing the rules will be a technically correct rule text and more efficient procedures.
Ms. Porras has also determined that there will be no probable economic cost to persons who are required to comply with the proposed rules. Further, in accordance with Texas Government Code §2001.022, she has determined that the proposed rules will not affect a local economy, and, therefore, no local employment impact statement is required, and that the proposed rules will have no adverse economic effect on small businesses or micro-businesses, as result of enforcing or administering the rules.
Written comments on the proposed rules may be submitted within 30 days of publication of this proposal in the Texas Register to Judith Porras, Texas Public Finance Authority, 300 W. 15th St., Room 411, Austin, Texas 78701, or electronically to: judith.porras@tpfa.state.tx.us.
The amendments are proposed under Texas Government Code, Chapter 1232, which provides the Texas Public Finance Authority with the authority to adopt rules necessary to administer Texas Government Code, Chapter 1232.
No other statutes, articles or codes are affected by this proposal.
§223.1.Historically Underutilized Businesses.
The authority adopts by reference the rules promulgated by
the Comptroller of Public Accounts [Texas Building
and Procurement Commission (TBPC)] concerning Historically Underutilized
Businesses, which are found in 34 Texas Administrative Code,
Chapter 20, Subchapter B. [
1 Texas Administrative Code §§111.11-111.28,
as amended.] A copy of the [TBPC
] rules may be obtained by request to the Authority, [
to the] attention, [of the
] Executive Director [at Texas Public Finance Authority
], 300 W. 15th Street, Austin, Texas 78701,
or by accessing the rules at: http://www.sos.state.tx.us/
[
http://info.sos.state.tx.us/pls/pub/readtae$ext.ViewTAC?tae_view=17PT=5&CH=111&SCH=b&RL=y.
].
This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of the Secretary of State on March 23, 2009.
TRD-200901152
Judith Porras
Interim Executive Director and General Counsel
Texas Public Finance Authority
Earliest possible date of adoption: May 3, 2009
For further information, please call: (512) 463-3143
The Texas Public Finance Authority proposes amendments to §§225.1, 225.3, and 225.5, concerning the Master Lease Purchase Program. The proposed amendments are required to update technical information, such as legal citations, and to make the procedures for financing agencies projects as efficient as possible.
Judith Porras, Interim Executive Director, estimates that for each year of the first five years the amendments will be in effect, there will be no foreseeable fiscal implications for state or local governments as a result of enforcing or administering the rules.
Ms. Porras has determined that for each year of the first five years the proposed rules will be in effect, the public benefit anticipated as a result of enforcing the rules will be a technically correct rule text and more efficient procedures.
Ms. Porras has also determined that there will be no probable economic cost to persons who are required to comply with the proposed rules. Further, in accordance with Texas Government Code §2001.022, she has determined that the proposed rules will not affect a local economy, and, therefore, no local employment impact statement is required, and that the proposed rules will have no adverse economic effect on small businesses or micro-businesses, as result of enforcing or administering the rules.
Written comments on the proposed rules may be submitted within 30 days of publication of this proposal in the Texas Register to Judith Porras, Texas Public Finance Authority, 300 W. 15th St., Room 411, Austin, Texas 78701, or electronically to: judith.porras@tpfa.state.tx.us.
The amendments are proposed under Texas Government Code, Chapter 1232, which provides the Texas Public Finance Authority with the authority to adopt rules necessary to administer Texas Government Code, Chapter 1232.
No other statutes, articles or codes are affected by this proposal.
§225.1.Purpose of the Rules.
The Texas Public Finance Authority proposes these new rules,
as Chapter 225, concerning the administration of the [State of
Texas] Master Lease Purchase Program authorized by Texas Government
Code, §1232.103. This chapter defines certain terms pertaining
to the operation of the [Texas] Master Lease Purchase Program,
identifies the responsibilities of various parties in administering
the [Texas] Master Lease Purchase Program, and establishes
basic procedures under which state agencies may participate in the
[Texas] Master Lease Purchase Program.
§225.3Definitions.
The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise.
(1) Act--The Texas Public Finance Authority Act, Texas Government Code, Chapter 1232, as amended.
(2) Administrative costs--The reasonable costs incurred by the authority in developing, administering, and monitoring the program, which costs include, but are not limited to fees for the paying agent, the dealer, the servicing agent, and the authority's operational charges.
(3) Amortization schedule--A detailed schedule of principal and interest payments and administrative costs due for each lease payment as required under the master lease agreement and contained in each lease supplement. The principal amount will include the purchase price of the eligible projects and the costs of issuance, if any, which will be separately itemized.
(4) Authority--The Texas Public Finance Authority,
or any successor [successors or assignees] to
its duties and functions.
(5) Authorized representative--That person(s) duly authorized by a client agency and the authority to execute and deliver a master lease agreement and lease supplement(s) and such other documents as are deemed necessary or appropriate to implement the program, and a client agency's participation therein.
(6) Board--The board of directors of the authority.
(7) Bond Review Board--The Bond Review Board as [board]
defined by the Texas Legislature pursuant to [created by
] Texas Government Code, Chapter 1231, or any successor [
successors or assignees] to its duties and functions.
(8) Bundled purchases--Those purchases of multiple
eligible projects individually valued at a minimum of $100 for and
on behalf of a client agency [one or more client agencies
], which are aggregated into one vendor contract for acquisition.
(9) Client agency--Any Texas state agency
or Texas institution of higher education that participates in the
program. [that wants to use the program to finance eligible
projects and has the authority, pursuant to applicable law, to do so.]
(10) Comptroller--The Comptroller of Public Accounts
of the State of Texas, or any successor thereto [successors
or assignees to its duties and functions].
(11) Comptroller's interagency agreement--The agreement
between the authority and the comptroller [provision contained
in the master lease agreement and in the lease supplements]
authorizing the authority to access each client agency's appropriated
funds to pay debt service on the program by delivering payment vouchers
to the comptroller drawn on the client agency's designated funds.
(12) Costs of issuance--All costs associated with the program, including, but not limited to, printing costs, costs of preparation of documents, and fees to rating agencies, financial advisor, credit and liquidity providers, bond counsel, and underwriters.
(13) Debit memo--The notice provided to each client agency within 30 days after each lease payment. The debit memo will include the name of the client agency, each lease supplement by identifying number, the eligible project, the total amount paid reflected as principal and interest payments, administrative costs, the payment date, credit, if any, and the remaining principal balance.
(14) Eligible project--Any physical structure that has been authorized by the Texas legislature for the authority to finance and is used by a client agency to conduct official Texas state business, together with the land and major equipment or personal property that is functionally related to the physical structure, or any other fixed asset used by a client agency to conduct official Texas state business, or project, including, without limitation, telecommunications devices or systems, automated information systems, computers and computer software, and energy performance contracts, provided, that such property has a useful life of at least three years, and a value of at least $10,000, valued either individually or as a group of individual items of property, each having a minimum value of $100 per item.
(15) Fees--The amount assessed each client agency for participating in the program. Fees include the costs of issuance, if any, and administrative costs.
(16) Interim financing--The initial financing source
by which an eligible project may be financed if it is deemed
advisable by the authority. Interim financing will occur when the
authority issues its Master Lease Purchase Program Tax-Exempt Commercial
Paper Revenue Notes [(the notes)] in various amounts, not
to exceed $300 million outstanding at any one time, or such other
amount authorized by resolution of the board.
(17) LBB--The Legislative Budget Board of the State
of Texas, or any successor [successors or assignees]
to its duties and functions.
(18) Lease payments--Those amounts specified in the
lease supplements and made pursuant to the comptroller's intercept
payable annually on the first day of August. The term "lease payments"
also includes all payments and pre-payments, if any, made
while the eligible project is in the interim financing [and to
lease revenue bond holders].
(19) Lease revenue bonds--The long-term bonds issued by the authority either to refinance an eligible project that has been initially financed through interim financing, or to fund the purchase of an eligible project.
(20) Lease supplement--A form promulgated by the authority to be executed by each client agency which incorporates the terms of the master lease agreement and other agreements under the program. The lease supplement shall specifically identify the eligible project to be financed, including the serial number or other Texas state identification number, the exact amount to be paid, the payee, and any updates or corrections to the request for financing.
(21) Master lease agreement--The [master lease
agreement is the] contract executed by [between
] the authorized representative of a [each
] client
agency and the authority, containing such terms and provisions necessary
to authorize the client agency to participate in the program and the
authority to make payments on behalf of the client agency for the
purchase of aneligible project as specifically set forth
in each lease supplement.
(22) Program--The Texas Public Finance Authority [
State of Texas] Master Lease Purchase Program described in
this chapter [these rules
] to be carried out by the authority
for the purpose of financing or refinancing [of] eligible
projects.
(23) Progress payments--Periodic payments for eligible
projects to be made during installation of and prior to acceptance
of such eligible project by the client agency that [
which payments] are set out in an agreement with the vendor.
Such [The
] agreement must provide for specific payments corresponding
to completion of definitive components sufficient to create identifiable
collateral.
(24) Request for financing--A [written]
request from a client agency to the authority to finance the acquisition
of an eligible project through the program. Such request for financing
shall include an itemized description of the eligible project prepared
by the client agency including the estimated cost of acquisition,
the estimated useful life of the project, the proposed date(s) of
delivery and acceptance of the eligible project, the proposed use
of the eligible project, and the source of funds to be used by the
client agency to make the payments for the eligible project, and any
one of the following documents:
(A) a copy of the purchase order for the eligible project;
(B) a copy of the contract prepared and awarded by the Texas Department of Information Resources for an eligible project; or
(C) any awarded contract for an eligible project, or for bundled purchases, a copy of which is sent to and received by the authority and which may be generated by any client agency.
(25) State agency--A Texas board, commission, department, office, agency, institution of higher education or other governmental entity in the executive, judicial, or legislative branch of Texas state government.
(26) State lease fund account--The account by that name created by the Act.
(27) Statement of acceptance--A statement contained in the lease supplement, executed by the client agency, which states that the eligible project has been received, inspected, and found to be in fully acceptable condition by the client agency, that all approvals, if any, have been obtained and that all other requirements of law have been satisfied and authorizing the authority to provide payment to the vendor.
§225.5.Procedures for Financing Eligible Projects.
(a) A client agency shall submit a request for financing when it is prepared to proceed with a program financing. A resolution of the client agency's governing body which authorizes the request for financing and the execution of documents required under the program shall be submitted with the request. Upon receipt of a request for financing the authority will review such request for completeness and compliance with program rules. If the request for financing is found to be complete and in compliance, the authority will accept the request for financing.
(b) Upon acceptance of the request for financing, if
the client agency has not previously participated in the program,
the authority will forward to the client agency a copy of the master
lease agreement to be executed by an authorized representative. The
master lease agreement is not subject to revision by the client agency
and, when executed by the client agency's authorized representative
and the authority, will serve as the basis for all future purchases
of eligible projects [project] under the program.
(c) After acceptance of the request for financing by
the authority and execution of the master lease agreement, the client
agency will proceed to procure the eligible project in compliance
with all applicable laws and rules governing such procurement, including
obtaining the approval, if any is required, of the Bond Review Board,
the Department of Information Resources, the Comptroller of Public
Accounts [Texas Building and Procurement Commission],
or other Texas state agency.
(d) After the client agency has taken delivery and
acceptance of the eligible project and determined that it meets all
requirements for payment in full to the vendor, and the vendor's
invoice complies with the terms and conditions of the contract, the
client agency will prepare the lease supplement together with all
documents required by the comptroller, sign [and will
execute two copies of] the lease supplement, and forward
it to the authority, [which also contains the statement
of acceptance of the eligible project and will forward all copies]
along with [the payment voucher and] all other documents
required or requested by [to] the authority. The
authority will sign [immediately execute two copies
of] the lease supplement and provide a [return
one] copy to the client agency.
(e) The authority will make a determination to initially fund the eligible project through the interim financing or through the issuance of lease revenue bonds. Such determination will be within the sole discretion of the authority.
(f) The authority will effect the payment in full to the vendor, or partial payment if the eligible project has been designated for progress payments.
(g) Upon receipt of the lease payment [supplement
], the authority and the comptroller will effect the comptroller's
intercept to provide for the lease payments.
(h) At least [No later than on or before]
48 hours prior to a lease payment, the authority will submit a voucher
directing the comptroller to transfer sufficient monies from each
client agency into the Texas state lease fund account and
the authority will provide a voucher to the comptroller to effect
debt service payment. The monies will then be transferred out of the
Texas state lease fund account and lease payments will be made.
(i) Within 30 days following each lease payment, the authority will provide a debit memo to each client agency.
(j) Upon the occurrence of any of the following
events listed in paragraphs (1) and (2) of this subsection, the [
The] authority may issue lease revenue bonds in order to refinance
the lease supplements initially funded through the interim financing.
The final maturity of lease revenue bonds shall not exceed the latest
maturity of any [the] lease supplement [
supplements] being financed. Revenue bonds may be issued:
[upon the occurrence of any of the following events:]
(1) on any date [on which] the
aggregate volume of lease supplements then being financed through
the interim financing reaches $150 million; or
(2) 30 days prior to the end of any Texas state biennial appropriation period which is currently August 31 of odd-numbered years.
(k) The authority may adjust the lease payments under a lease supplement as a result of a change in interest rates, or a refinancing, or a change in administrative costs. When such adjustment in lease payments is effected, the authority will, concurrent with establishing the new interest rate, provide an amended amortization schedule reflecting the adjusted lease payments to the comptroller and to each client agency.
(l) At least once during each Texas state fiscal year, [
of the state] the authority will forward
to the Legislative Budget Board (LBB) a schedule, by client agency,
of all lease payments. The authority will use its best efforts to
ensure that the staff of the LBB will include in its budget recommendation
sufficient appropriations to make all lease payments required under the program.
(m) All books and records of the authority will be available to the LBB, the comptroller, the Texas state auditor's office, client agencies, and other interested parties which may, from time to time, request access to information regarding the program.
(n) All issuances of lease revenue bonds under the program will comply with all approvals required for the public issuance of debt by a Texas state agency, including review and approval by the Bond Review Board and the Texas attorney general.
This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of the Secretary of State on March 23, 2009.
TRD-200901153
Judith Porras
Interim Executive Director and General Counsel
Texas Public Finance Authority
Earliest possible date of adoption: May 3, 2009
For further information, please call: (512) 463-3143