Sec. 58.033. ISSUANCE OF REVENUE BONDS

(a) In addition to the authority to issue general obligation bonds, the authority may issue not more than $500 million of revenue bonds for the purpose of providing money to carry out any purpose of the authority under this chapter. The authority shall establish and maintain funds and accounts, in accordance with Subsection (d) of this section, that the board considers necessary to ensure payment of the bonds and to provide for the use of the bond proceeds and the implementation of the program financed. Proceeds of revenue bonds shall be applied in accordance with the resolution authorizing those bonds:

(1) to provide financial assistance:

(A) to eligible agricultural businesses; and

(B) for programs designed to further rural economic development;

(2) to pay costs of issuance of those bonds and the administration of any financial assistance program established by the authority; and

(3) together with any other available funds, to pay the principal of or interest on or to discharge or redeem, in whole or in part, any outstanding bonds issued by the authority.

(b) The authority's revenue bonds are obligations solely of the authority and are payable solely from funds of the authority that are pledged to the repayment of the revenue bonds. The authority may not use, except as provided in Section 58.032, or pledge money in the Texas agricultural fund to repayment of its revenue bonds. The authority's bonds are not and do not create or constitute a pledge, giving, or lending of the faith or credit or taxing power of the state. Each bond of the authority issued under this section must contain a statement to the effect that the state is not obligated to pay the principal of or any premium or interest on the bond, and that neither the faith or credit nor the taxing power of the state is pledged, given, or loaned to such a payment.

(c) Revenue bonds of the authority shall be payable as to principal, interest, and redemption premium, if any, from and secured by a first lien or a subordinate lien on and pledge of all or any part of the property, revenues, income, or other resources of the authority, as specified in the board's resolution authorizing issuance of those bonds, including mortgages or other interests in property financed, with the proceeds of such bonds, repayments of financial assistance, earnings from investments or deposits of the funds of the authority, fees, charges, and any other amounts or payments received pursuant to this chapter, and any appropriations, grants, allocations, subsidies, supplements, guaranties, aid, contribution, or donations from the state or federal government or any other person.

(d) The board may make additional covenants with respect to the bonds and the pledged revenues and may provide for the flow of funds, the establishment and maintenance and investment of funds, which may include interest and sinking funds, reserve funds, program funds, and other funds. Those funds shall be kept and maintained in escrow and in trust by the comptroller for and on behalf of the authority and the owners of its revenue bonds, in funds held outside the treasury pursuant to Chapter 404, Government Code. Those funds shall be used only as provided by this chapter, and pending their use shall be invested as provided by any resolution of the authority. Legal title to those funds shall be in the authority unless or until paid out as provided by this chapter or by the resolutions authorizing the authority's bonds. The comptroller, as custodian, shall administer those funds strictly and only as provided by this chapter and in those resolutions. The comptroller shall invest the funds in investments authorized by law for state funds. The state shall take no action with respect to those funds other than that specified in this chapter and in those resolutions.

(e) The board may provide in the resolution authorizing any revenue bonds for the issuance of additional bonds to be equally and ratably secured by lien on the revenues and receipts, or for the issuance of subordinate lien bonds.

(f) Revenues of the authority that may be used as a source of payment for the bonds or to establish a reserve fund to secure the payment of debt service on the bonds or related obligations of the authority include repayments of financial assistance, money appropriated by the legislature to the authority for the purpose of paying or securing the payment of debt service on the authority's revenue bonds or related obligations, federal or private money allocated to financial assistance programs established under this chapter, amounts paid under any credit agreement for those purposes, or any other money that the authority pledges or otherwise commits for those purposes. To the extent that pledged revenues include amounts appropriated by the legislature, the revenue bonds must state on their face that those revenues are available to pay debt service only if appropriated by the legislature for that purpose.

Added by Acts 1987, 70th Leg., 2nd C.S., ch. 32, art. 2, Sec. 1, eff. Oct. 20, 1987; Acts 1989, 71st Leg., ch. 1247, Sec. 1, eff. Sept. 1, 1989. Amended by Acts 1997, 75th Leg., ch. 1423, Sec. 2.05, eff. Sept. 1, 1997; Acts 2001, 77th Leg., ch. 26, Sec. 9, eff. May 2, 2001.