Tex.
Spec. Dist. Local Laws Code Section 5007.006
Revenue Obligations; Certain Powers; Fees and Charges; Facilities; Taxation Exemption; Refunding Bonds; Certain Bond Provisions
(a)
The authority, in addition to all other powers conferred by law, is hereby given authority and shall hereafter have power in the manner hereinafter provided to acquire, purchase, construct, enlarge, extend, repair, maintain, operate, or develop channels and turning basins, wharves, docks, warehouses, grain elevators, bunkering facilities, railroads, floating plants and facilities, lightering facilities and towing facilities, bulk handling facilities, and everything appurtenant thereto, together with all other facilities or aids incident to or useful in the operation or development of the authority’s ports and waterways or in aid of navigation and commerce thereon.(b)
The port commission may covenant to and shall prescribe fees and charges to be collected for the use of those improvements and facilities of the authority (the net revenues of which improvements and facilities are pledged, as hereinafter provided), which fees and charges shall be reasonable and equitable and fully sufficient to produce revenues adequate to pay, and said port commission shall cause to be paid:(1)
All expenses necessary to the operation, replacement and maintenance of said improvements and facilities. Such operating and maintenance expenses payable from current revenues shall include the cost of the acquisitions of properties and materials necessary to repair, replace and maintain said improvements and facilities in good condition and operate them efficiently, wages and salaries paid to the employees of the authority in that connection, and such other expenses as may be necessary to the efficient operation of said improvements and facilities.(2)
The annual or semiannual interest upon any obligations issued hereunder and payable out of the revenues of said improvements and facilities.(3)
The amount required to be paid annually into the sinking fund for the payment of any obligations issued hereunder and payable out of the revenues of said improvements and facilities.(4)
The amount or amounts required to be paid in reserve funds or other funds as may be provided for in the proceedings authorizing such obligations, to secure the payment of the obligations issued pursuant to the provisions hereof.(b-1)
Revenues which may be received in excess of those required for the purposes listed in the above Subsection (b) may be used by the port commission to pay the cost of any other authority improvements or for any other lawful purpose.(c)
The port commission may borrow money from any department or agency of the United States, or from any other source, and in evidence thereof issue the notes, warrants, certificates of indebtedness, negotiable bonds, or other forms of obligation of the authority (heretofore and hereafter referred to as “obligations”) payable solely out of the revenues to be derived from said improvements and facilities for any or all of the purposes set forth in Subsection (a).(d)
Such obligations shall not constitute an indebtedness or pledge of the credit of the authority, and the holders thereof shall never have the right to demand payment thereof out of any funds raised or to be raised by taxation, and such obligations shall contain a recital to that effect. All obligations issued hereunder shall be in registered or coupon form, and if in coupon form may be registerable as to principal only, or as to both principal and interest, shall bear interest at a rate not to exceed the amount allowed by law, payable annually or semiannually, and shall be in such denominations and shall mature serially or at one time not more than forty (40) years from their date in such manner as may be provided by the port commission. Principal of and interest on such obligations shall be made payable at any place or places within or without the State of Texas, and in the discretion of the port commission such obligations may be made callable and/or refundable at the option of the port commission prior to maturity at such premium or premiums as the port commission shall determine. Such obligations shall be signed by the manual or facsimile signatures of the chair of the port commission and the executive director as may be provided in the proceedings authorizing said obligations, and the interest coupons attached thereto may also be executed by the facsimile signatures of such officers. Such obligations shall be sold in such manner and at such times as the port commission shall determine to be expedient and necessary to the interests of the authority, provided, that in no event shall such obligations be sold for a price which will result in an interest yield therefrom of more than the amount allowed by law computed to maturity according to standard bond tables in general use by banks and insurance companies. Any premium or premiums provided for the call or refunding of any bonds issued pursuant to this Section shall not be included in the computation of the maximum interest yield on such bonds. In the event of the officers whose signatures are on such obligations or coupons shall cease to be such officers before the delivery of such obligations to the purchaser, such signature or signatures, nevertheless, shall be valid and sufficient for all purposes. All obligations issued hereunder shall constitute negotiable instruments under Chapter 3 (Insolvency, Fraudulent Transfers, and Fraud), Business & Commerce Code.(e)
Any obligations issued hereunder may be issued payable from and secured by the pledge of all the revenues derived from the operation of the improvements and facilities of the authority, exclusive of any revenues derived from taxation or assessments, or may be payable from and secured by the pledge of only such revenues as may be derived from the operation of the improvements and facilities acquired or improved with the proceeds of the sale of such obligations, or may be payable from and secured by the pledge of a specified part of the revenues derived from the operation of the improvements and facilities of the authority, all as may be provided in the proceedings authorizing the issuance of such obligations.(f)
In the resolution or order adopted by the port commission authorizing the issuance of any obligations hereunder, the port commission may provide for the flow of funds, the establishment and maintenance of the interest and sinking fund, reserve, and other funds, and may provide for such additional covenants with respect to the obligations and the pledged revenues and the operation, maintenance, and upkeep of those improvements and facilities (the income of which is pledged), including provision for the leasing of all or part of said improvements and facilities and the use or pledge of moneys derived from leases thereon, as it may deem appropriate. Said resolution or order may also prohibit the further issuance of obligations payable from the pledged net revenues, or may reserve the right to issue additional bonds to be secured by a pledge of and payable from said net revenues on a parity with, or subordinate to, the lien and pledge in support of the obligations being issued, subject to such conditions as are set forth in said resolution or order. Such resolution may contain a provision appropriating out of the bond proceeds an amount sufficient to pay the interest which will accrue on such obligations during the period of construction of the improvements and facilities covered by such obligations. Such resolution or order may contain other provisions and covenants, as in the opinion of the port commission may be necessary or desirable to insure marketability of the obligations, provided that such provisions and covenants are not prohibited by the Constitution of Texas or by this chapter; and the port commission may adopt and cause to be executed any other proceedings or instruments necessary and/or convenient in the issuance of said obligations.(g)
The authority may adopt plans for the construction or refinancing of a facility, to be paid for by the issuance and sale of obligations payable from and secured by a pledge of revenues to be derived from the operation of the facility and further secured by a trust indenture, or by a deed of trust on the physical properties of such improvement; and during the time any such improvement is encumbered by the pledge of such revenues and the lien upon its physical properties, in the proceedings authorizing the bonds or the indenture, may vest its management and control in a Board of Trustees, to be named in such resolution or indenture, consisting of not less than five (5) nor more than nine (9) members. The compensation of the members of such Board of Trustees shall be fixed by such resolution or indenture, but shall never exceed one percent (1%) of the gross receipts of such improvement in any one (1) year. The terms of office of the members of such Board of Trustees, their powers and duties, including the power to fix fees and charges for the use of such improvements, and the manner of exercising same, the manner of the selection of their successors, and all matters pertaining to their duties and the organization of such Board of Trustees shall be specified in such resolution or indenture. Any such Board of Trustees may adopt bylaws regulating the procedure of the Board and fixing the duties of its officers, but the bylaws shall not contain any provision in conflict with the covenants and provisions contained in the resolution authorizing the bonds or the indenture. In all matters wherein the resolution or indenture are silent as to the powers, duties, obligations and procedure of the Board, the laws and rules governing the port commission shall control the Board of Trustees in so far as applicable. The Board may be created by the resolution or indenture, and in that event shall have all or any of the powers and authority which could be exercised by the port commission in so far as the management and operation of any such improvement is concerned. By the terms of any such resolution or indenture the port commission may make provision for later supplementing such resolution or indenture so as to vest the management and control of the facility in a Board of Trustees having the powers, rights and duties herein conferred or imposed.(h)
Any resolution or order authorizing the issuance of obligations hereunder may provide that the revenues from which such obligations are to be paid and which are pledged to the payment of such obligations shall from month to month as the same shall accrue and be received, be set apart and placed in the interest and sinking fund, reserve fund, and other funds established in said resolution or order, and disbursed in the manner hereinabove provided.(i)
Any holder of obligations issued hereunder or of coupons originally attached thereto, may either at law or in equity, by suit, action, mandamus or other proceeding, enforce and compel performance of all duties required by this chapter to be performed by the port commission, including the making and collection of reasonable and sufficient fees or charges for the use of the improvements and facilities of the authority, the segregation of the income and revenues of such improvements and facilities, and the application of such income and revenues pursuant to the provisions of this chapter.(j)
As additional security for the payment of any obligations issued hereunder, the port commission may in its discretion have executed in favor of the holders of such obligations an indenture or deed of trust mortgaging and encumbering all or any part of the physical properties comprising the improvements and facilities the net revenues of which are pledged to the payment of such obligations, including the lands upon which said improvements and facilities are located, and may provide in such mortgage or encumbrance for a grant to any purchaser or purchasers at foreclosure sale thereunder of a franchise or lease to operate such improvements, facilities and properties for a term of not over fifty (50) years from the date of such purchase, subject to all laws regulating same then in force. Any such indenture or deed of trust may contain such terms and provisions as the port commission shall deem proper and shall be enforceable in the manner provided by the laws of Texas for the enforcement of other mortgages and encumbrances. Under any such sale ordered pursuant to the provisions of such mortgage or encumbrance, the purchaser or purchasers at such sale, and the purchaser’s or purchasers’ successors or assigns, shall be vested with a permit or franchise conforming to the provisions stipulated in the indenture or deed of trust to maintain and operate the improvements, facilities and properties purchased at such sale with like powers and privileges as may theretofore have been enjoyed by the authority in the operation of said improvements, facilities and properties. The purchaser or purchasers of such improvements, facilities and properties at any such sale, and the purchaser’s successors and assigns, may operate said improvements, facilities and properties as provided in the last above sentence or may at their option remove all or any part or parts of said improvements, facilities and properties for diversion to other purposes. The provisions of any statute not included in this chapter that relates to the authorization or execution of mortgages and encumbrances or the granting of franchises or leases shall not be applicable to the authorization or execution of any mortgage or encumbrance entered into pursuant to the provisions of this chapter, nor to the granting of any franchise or lease hereunder. Any obligations issued pursuant to the provisions of this chapter and additionally secured by an indenture or deed of trust as provided by this subsection, whether such obligations are notes or certificates of indebtedness or otherwise, and the record relating to their issuance, may, at the option of the port commission, be submitted to the Attorney General of Texas for the attorney general’s examination and approval, as in the case of bonds, and after the Attorney General has approved the same, such obligations shall be registered by the Comptroller of Public Accounts of Texas; and after such obligations have been approved by the Attorney General and registered by the Comptroller, they shall thereafter be incontestable for any cause except for forgery or fraud.(k)
The proceeds of the sale of any obligations issued hereunder may be deposited in such bank or banks as may be agreed upon between the purchaser at such sale and the port commission, and may be deposited and paid out pursuant to such terms and conditions as may be so agreed upon, it being expressly provided that the Statutes of Texas pertaining to the deposit of funds in the depository of the authority shall not be applicable to the deposit of the proceeds of such sale.(l)
The port commission is authorized to enter into an agreement or agreements with the purchaser or purchasers of any obligations issued hereunder under the terms of which the port commission shall agree to keep all of the improvements and facilities, the revenues of which are pledged to the payment of such obligations, insured with insurers of good standing against loss or damage by fire, water or flood, and also from any other hazards customarily insured against by private companies operating similar properties, and to carry with insurers of good standing such insurance covering the use and occupancy of such property as is customarily carried by such private companies. The cost of such insurance shall be budgeted as maintenance and operation expense and such insurance shall be carried for the benefit of the holders of such obligations.(m)
The authority, in addition to the other powers hereinabove set out, shall have general power and authority to make and enter into all contracts, leases and agreements necessary or convenient to the carrying out of any of the powers granted in this chapter, which contracts, leases or agreements may be entered into with any person, real or artificial, any corporation, municipal, public or private, and the government or governmental agency, including those of the United States and the State of Texas. Except as provided by Chapter 60 (Navigation Districts--general Provisions), Water Code, any contracts, leases or agreements entered into pursuant hereto shall be approved by action of the port commission, and shall be executed by the chair of the port commission and attested by the executive director.(n)
Any obligations issued pursuant to the provisions of this section shall be exempt from taxation by the State of Texas or by any municipal corporation, county, or other political subdivision or taxing district of the State.(o)
The port commission shall have the power to issue obligations of the authority for the purpose of refunding any outstanding obligations payable out of the revenues of the authority and accrued interest thereon. Such refunding obligations may be issued to refund more than one series of issues of outstanding obligations and combine the pledges for the outstanding obligations for the security of the refunding obligations, and such refunding obligations may be secured by other and additional revenues, provided that such refunding will not impair the contract rights of the holders of any of the outstanding obligations which are not to be refunded.(o-1)
Such refunding obligations shall be authorized, shall be executed, and shall mature as is provided herein for original obligations, and shall bear interest at the same or lower rate than that of the obligations refunded unless it is shown mathematically that a saving will result in the total amount of interest to be paid. Refunding bonds issued hereunder shall be approved by the Attorney General of Texas as in the case of other bonds issued hereunder, and shall be registered by the Comptroller of Public Accounts upon surrender and cancellation of the bonds to be refunded, but in lieu thereof, the resolution or order authorizing their issuance may provide that they shall be sold and the proceeds thereof deposited in the place or places where the original bonds are payable, in which case the refunding bonds may be issued in an amount sufficient to pay the interest on the original bonds to their option or maturity date, and the Comptroller shall register them without the surrender and cancellation of the original bonds. The port commission may combine refunding bonds and new bonds in one issue, in which event the provisions of this subsection and Subsection (o) shall apply to those bonds of the combined issue which are designated in the resolution or order as the refunding bonds.(p)
After any bonds have been authorized by the authority hereunder, such bonds and the record relating to their issuance shall be submitted to the Attorney General of Texas for his examination as to the validity thereof, and after the Attorney General has approved the same, such bonds shall be registered by the Comptroller of Public Accounts of Texas. After such bonds have been approved by the Attorney General and registered by the Comptroller, they shall thereafter be incontestable for any cause except for forgery or fraud.(q)
All bonds issued hereunder shall be and are hereby declared to be, and to have all the qualifications of, negotiable instruments under Chapter 3 (Insolvency, Fraudulent Transfers, and Fraud), Business & Commerce Code, and all such bonds shall be and are hereby declared to be legal and authorized investments for banks, savings banks, trust companies, building and loan associations, insurance companies, fiduciaries, trustees, guardians, for State funds and retirement system funds (without limiting the generalization of the foregoing, including the Permanent School Fund of Texas, and funds of retirement systems created under the Constitution and laws of the State of Texas), and for the sinking funds of cities, towns, villages, counties, school districts, or other governmental agencies, political corporations or subdivisions of the State of Texas. Such bonds shall be eligible to secure the deposit of any and all public funds of the State of Texas, and any and all public funds of cities, towns, villages, counties, school districts, or other governmental agencies, political corporations or subdivisions of the State of Texas; and such bonds shall be lawful and sufficient security for said deposits to the extent of their face value when accompanied by all unmatured coupons appurtenant thereto.(r)
This Section, without reference to other Statutes of the State of Texas, shall constitute full authority for the authorization and issuance of obligations hereunder and for the accomplishment of all things herein authorized to be done, and no proceedings relating to the authorization or issuance of such obligations or the doing of such things shall be necessary except such as are herein required, and no provisions of the Laws of the State of Texas pertinent to the authorization or issuance of obligations, the operation and maintenance of ports, canals and waterways, the granting of franchise, permits, or leases, the right to elections or referendum petitions, shall in anywise impede or restrict the carrying out of the acts authorized to be done hereunder or acts done pursuant hereto.
Source:
Section 5007.006 — Revenue Obligations; Certain Powers; Fees and Charges; Facilities; Taxation Exemption; Refunding Bonds; Certain Bond Provisions, https://statutes.capitol.texas.gov/Docs/SD/htm/SD.5007.htm#5007.006 (accessed Jun. 5, 2024).
