CHAPTER 203. FINANCING AND FUNDS
LABOR CODE
TITLE 4. EMPLOYMENT SERVICES AND UNEMPLOYMENT
SUBTITLE A. TEXAS UNEMPLOYMENT COMPENSATION ACT
CHAPTER 203. FINANCING AND FUNDS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 203.001. DEFINITIONS. In this chapter:
(1) "Administration fund" means the unemployment compensation
administration fund created under Section 203.151.
(2) "Federal trust fund" means the unemployment trust fund
created under Section 904, Social Security Act (42 U.S.C. Section
1104).
(3) "Special administration fund" means the unemployment
compensation special administration fund created under Section
203.201.
(4) Repealed by Acts 1997, 75th Leg., ch. 1423, Sec. 12.14, eff.
Sept. 1, 1997.
Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.
Amended by Acts 1997, 75th Leg., ch. 1423, Sec. 12.14, eff. Sept.
1, 1997.
Sec. 203.002. DUTIES OF COMPTROLLER. (a) The comptroller is
treasurer and custodian of the compensation fund and the special
administration fund and shall administer the funds in accordance
with the directions of the commission.
(b) The comptroller shall issue warrants on the compensation
fund in accordance with rules adopted by the commission.
(c) The comptroller shall issue warrants on the special
administration fund in accordance with the directions of the
commission.
Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.
Amended by Acts 1997, 75th Leg., ch. 1423, Sec. 12.01, eff. Sept.
1, 1997.
Sec. 203.003. COMPTROLLER'S BOND LIABILITY. The comptroller is
liable on the comptroller's official bond for the faithful
performance of the comptroller's duties under this subtitle in
connection with the compensation fund, the administration fund,
and the special administration fund. This liability is in
addition to liability on any separate bond that the comptroller
may give.
Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.
Amended by Acts 1997, 75th Leg., ch. 1423, Sec. 12.02, eff. Sept.
1, 1997.
Sec. 203.004. DEPOSIT OF FUNDS; EXCEPTION. All money paid to
the commission under this subtitle:
(1) shall be deposited in the treasury unless:
(A) a state or federal law prohibits deposit in the treasury; or
(B) the deposit would result in the loss of any federal funds;
and
(2) may be used only for the administration of this subtitle.
Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.
Sec. 203.005. APPLICATION OF OTHER LAW. Money in the
compensation fund, the administration fund, and the special
administration fund shall be deposited, administered, and
disbursed in the same manner and under the same requirements as
provided by law for other special funds in the state treasury.
Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.
SUBCHAPTER B. UNEMPLOYMENT COMPENSATION FUND
Sec. 203.021. UNEMPLOYMENT COMPENSATION FUND; SEPARATE ACCOUNTS.
(a) The unemployment compensation fund is a special fund.
(b) The compensation fund consists of:
(1) contributions collected under this subtitle;
(2) interest earned on money in the compensation fund;
(3) property or securities acquired through the use of money in
the compensation fund;
(4) earnings of property or securities described by Subdivision
(3);
(5) amounts recovered for losses sustained by the compensation
fund; and
(6) other money received for the compensation fund from any
other source.
(c) Money in the compensation fund shall be mingled and
undivided.
(d) The comptroller shall maintain in the compensation fund:
(1) a clearing account;
(2) a federal trust fund account; and
(3) a benefit account.
Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.
Amended by Acts 1997, 75th Leg., ch. 1423, Sec. 12.03, eff. Sept.
1, 1997.
Sec. 203.022. COMPOSITION AND USE OF CLEARING ACCOUNT. (a) On
receipt of any money payable to the compensation fund, the
commission shall forward the money to the comptroller, who shall
immediately deposit it in the clearing account.
(b) Except as provided by Section 203.026, money in the clearing
account, after it has cleared, shall be immediately deposited
with the United States secretary of the treasury to the credit of
this state's account in the federal trust fund. This section
prevails over any conflicting state statute relating to the
deposit, administration, release, or disbursement of money in the
possession or custody of this state.
Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.
Amended by Acts 1997, 75th Leg., ch. 1423, Sec. 12.04, eff. Sept.
1, 1997.
Sec. 203.023. REQUISITIONS FROM FEDERAL TRUST FUND; BENEFIT
ACCOUNT. (a) The commission periodically shall requisition from
the federal trust fund amounts the commission considers necessary
for the payment of benefits and refunds for a reasonable period.
The commission may not requisition an amount exceeding the
balance of this state's account in the federal trust fund.
(b) The benefit account is composed of money requisitioned from
this state's account in the federal trust fund.
(c) On receipt of money requisitioned from the federal trust
fund, the comptroller shall deposit it in the benefit account.
Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.
Amended by Acts 1997, 75th Leg., ch. 1423, Sec. 12.05, eff. Sept.
1, 1997.
Sec. 203.024. DEPOSITS. (a) Except as otherwise provided by
this subchapter, the comptroller, under the direction of the
commission, may deposit money credited to the clearing and
benefit accounts in a bank or public depository in which general
funds of this state may be deposited.
(b) A public deposit insurance charge or premium may not be paid
out of the compensation fund.
Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.
Amended by Acts 1997, 75th Leg., ch. 1423, Sec. 12.06, eff. Sept.
1, 1997.
Sec. 203.025. USE OF REQUISITIONED MONEY. (a) The commission
shall direct the administration of the compensation fund
exclusively for the purposes of this subtitle.
(b) Money requisitioned from this state's account in the federal
trust fund may be used only for the payment of benefits or for
refunds as provided by Sections 203.023, 203.026, 203.027, and
203.203 and by Subchapter B, Chapter 210, and Subchapter E,
Chapter 213 except that money credited to this state's account as
provided by Section 903, Social Security Act (42 U.S.C. Section
1103), may be requisitioned and used by the commission only to
the extent and under the conditions prescribed by that section.
Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.
Sec. 203.026. ACCOUNTS FROM WHICH BENEFITS AND REFUNDS ARE PAID.
(a) The comptroller may issue a warrant for a benefit only from
the benefit account.
(b) As directed by the commission, the comptroller may issue a
warrant for a refund as provided by Subchapter E, Chapter 213,
from the benefit account or the clearing account.
(c) An expenditure from the benefit account or a refund from the
clearing account is not subject to a law that requires
itemization or other formal release by a state officer of money
in the officer's custody.
(d) Repealed by Acts 1995, 74th Leg., ch. 76, Sec. 9.28(a), eff.
Sept. 1, 1995.
Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.
Amended by Acts 1995, 74th Leg., ch. 76, Sec. 9.28(a), eff. Sept.
1, 1995.
Sec. 203.027. UNEXPENDED BALANCE OF BENEFIT ACCOUNT. Money
requisitioned from the federal trust fund that remains unclaimed
or unpaid in the benefit account after the end of the period for
which the money was requisitioned shall be, in the commission's
discretion:
(1) deducted from an estimate for the succeeding periods and
used to pay benefits and refunds in those periods; or
(2) redeposited in the federal trust fund as provided by Section
203.022.
Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.
Sec. 203.028. SOLVENCY OF COMPENSATION FUND; RESERVE. (a) If
the commission believes that a change in contribution or benefit
rates will become necessary to protect the solvency of the
compensation fund, it shall inform the governor and legislature
of its belief and when the change will become necessary and shall
make recommendations for the necessary change.
(b) The commission, if possible, shall maintain in the
compensation fund a reserve against the liability to pay benefits
in future years in excess of current contributions. The
commission shall create the reserve according to accepted
actuarial principles using statistics of employment, business
activity, and other relevant factors for the longest possible
period.
Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.
Sec. 203.029. REFUND OF CONTRIBUTIONS TO FEDERAL
INSTRUMENTALITY. If this state is not certified for any year by
the United States secretary of labor as required under Section
3304(c), Internal Revenue Code of 1986 (26 U.S.C. Section
3304(c)), the commission shall refund from the compensation fund
a payment required of an instrumentality of the federal
government for that year in the same manner and within the same
period as provided by Subchapter E, Chapter 213, for
contributions erroneously collected.
Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.
Sec. 203.030. REIMBURSEMENT FROM OR TO COMPENSATION FUND UNDER
RECIPROCAL ARRANGEMENT. (a) The commission may reimburse a
state or federal agency from the compensation fund or receive a
reimbursement from a state or federal agency for the compensation
fund under an arrangement under Section 211.003.
(b) A reimbursement paid from the compensation fund under this
section is a benefit for the purposes of this subtitle.
Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.
Sec. 203.031. NONLIABILITY OF STATE. Benefits are due and
payable only to the extent money is available for that purpose in
the compensation fund. Neither this state nor the commission is
liable for any amount in excess of the amount in that fund.
Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.
Sec. 203.032. MANAGEMENT OF COMPENSATION FUND ON DISCONTINUANCE
OF FEDERAL TRUST FUND. (a) To the extent that a provision of
this subchapter relates to the federal trust fund, the provision
is operative only as long as:
(1) the federal trust fund exists; and
(2) the United States secretary of the treasury maintains for
this state a separate book account of all funds deposited in the
federal trust fund by this state for benefit purposes, with this
state's proportionate share of the earnings of the federal trust
fund, from which no other state is permitted to make withdrawals.
(b) If the federal trust fund ceases to exist or the secretary
of the treasury ceases to maintain a separate book account for
this state in the federal trust fund, all money, property, or
securities in the federal trust fund that belong to the
compensation fund shall be transferred to the comptroller. The
comptroller shall hold, invest, transfer, deposit, and release
the money, property, or securities in a manner approved by the
commission in accordance with this subtitle.
(c) Money held by the comptroller under Subsection (b) shall be
invested in readily marketable bonds or other interest-bearing
obligations of the United States of America. The money shall be
invested in such a manner that the assets of the compensation
fund are readily convertible at all times into cash as needed for
the payment of benefits.
(d) The comptroller may dispose of securities or other property
belonging to the compensation fund only under the direction of
the commission.
Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.
Amended by Acts 1997, 75th Leg., ch. 1423, Sec. 12.07, eff. Sept.
1, 1997.
SUBCHAPTER C. ADVANCES FROM FEDERAL TRUST FUND AND OBLIGATION
ASSESSMENT
Sec. 203.101. LIMIT ON APPLICATION FOR ADVANCE. In any
application for an advance from the federal trust fund (Section
1201, Social Security Act (42 U.S.C. Section 1321)), the governor
shall limit the amount of the application to an amount that, when
added to previous advances, does not exceed the amount for which
principal and interest may be paid from taxes on employers.
Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.
Sec. 203.102. OBLIGATION TRUST FUND. (a) The obligation trust
fund is a dedicated trust fund outside of the state treasury in
the custody of the comptroller. The obligation trust fund is
composed of:
(1) revenue received under Section 203.105; and
(2) any surplus revenue transferred from the compensation fund
under Section 204.065.
(b) The commission and governor may use money in the obligation
trust fund without legislative appropriation to pay:
(1) bond obligations and bond administrative expenses; and
(2) principal and interest incurred on advances from the federal
trust fund.
Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.
Amended by Acts 1995, 74th Leg., ch. 1004, Sec. 1, eff. Sept. 1,
1995; Acts 1997, 75th Leg., ch. 1423, Sec. 12.08, eff. Sept. 1,
1997; Acts 2003, 78th Leg., ch. 317, Sec. 2, eff. June 18, 2003;
Acts 2003, 78th Leg., ch. 817, Sec. 6.02, eff. June 20, 2003.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
34, Sec. 1, eff. May 4, 2007.
Sec. 203.104. LIMITATION ON TRANSFER FROM OBLIGATION TRUST FUND
TO COMPENSATION FUND. An amount that is attributable to the
portion of the unemployment obligation assessment authorized by
Section 203.105(a)(2) may not be transferred to the compensation
fund unless all bond obligations, including bond administrative
expenses, have been fully paid and satisfied. After the
obligations have been fully satisfied, the commission shall
transfer the balance of the obligation trust fund to the
compensation fund.
Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.
Amended by Acts 2003, 78th Leg., ch. 317, Sec. 3, eff. June 18,
2003; Acts 2003, 78th Leg., ch. 817, Sec. 6.03, eff. June 20,
2003.
Sec. 203.105. UNEMPLOYMENT OBLIGATION ASSESSMENT. (a) An
unemployment obligation assessment shall be imposed as provided
by this section if after January 1 of a year:
(1) an interest payment on an advance from the federal trust
fund will be due and the estimated amount necessary to make the
interest payment is not available in the obligation trust fund or
available otherwise; or
(2) bond obligations are due and the amount necessary to pay in
full those obligations, including bond administrative expenses,
is not available in the obligation trust fund or available
otherwise.
(b) The unemployment obligation assessment rate is the total of
the amounts required to make the payments necessary under
Subsections (a)(1) and (2). The commission shall set the
unemployment obligation assessment rate in an amount sufficient
to ensure timely payment of interest under Subsection (a)(1), but
not exceeding two-tenths of one percent. The commission shall set
the unemployment obligation assessment rate in an amount
sufficient to ensure timely payment of the bond obligations,
including administrative expenses, and to provide an amount
necessary in the commission's judgment to enhance investor
acceptance of the bonds. The rate shall be based on a formula
prescribed by commission rule, using the employer's experience
rating from the previous year. The unemployment obligation
assessment rate applies to the same wage base to which the
employer's unemployment tax applies for the year.
(c) The unemployment obligation assessment is due at the same
time, collected in the same manner, and subject to the same
penalties and interest as other contributions assessed under this
subtitle.
(d) Revenue from the unemployment obligation assessment under
this section shall be deposited to the credit of the obligation
trust fund under Section 203.102.
Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.
Amended by Acts 2003, 78th Leg., ch. 317, Sec. 4, eff. June 18,
2003; Acts 2003, 78th Leg., ch. 817, Sec. 6.04, eff. June 20,
2003.
SUBCHAPTER D. ADMINISTRATION FUND
Sec. 203.151. ADMINISTRATION FUND. (a) The unemployment
compensation administration fund is a special fund in the state
treasury.
(b) The administration fund consists of money:
(1) appropriated to the administration fund by this state;
(2) received from the United States or any federal agency for
the administration of this subtitle;
(3) collected by the commission as fees for furnishing
photostatic or certified copies of commission records;
(4) collected by the commission as fees for conducting audits
under the authority granted by this subtitle;
(5) received from any federal agency or any agency of another
state as compensation for services or facilities supplied to the
agency;
(6) received under any surety bond or insurance policy or from
other sources:
(A) for losses sustained by the administration fund; or
(B) by reason of damage to equipment or supplies purchased with
money in the administration fund;
(7) received as proceeds from the sale or disposition of
equipment or supplies that are no longer necessary for the proper
administration of this subtitle, if the equipment or supplies
were purchased with money in the administration fund; and
(8) received from any other source for the administration of
this subtitle.
Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.
Sec. 203.152. USE OF ADMINISTRATION FUND. (a) Money credited
to the administration fund may be used by the commission as
provided by this subtitle and may not be transferred to any other
fund.
(b) Money in the administration fund received from the federal
government or a federal agency may be spent only for the purposes
and in the amounts found necessary by the United States secretary
of labor or that secretary's successor for the proper and
efficient administration of this subtitle.
Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.
Sec. 203.154. REIMBURSEMENT OF ADMINISTRATION FUND. (a) If the
United States secretary of labor or that secretary's successor
finds that money received from the secretary or the secretary's
successor under Title III of the Social Security Act (42 U.S.C.
Section 501 et seq.) or any other federal money granted to the
commission for the administration of this subtitle has been lost
or spent for a purpose other than, or in an amount in excess of,
that found necessary for the proper administration of this
subtitle by the secretary or the secretary's successor, the money
shall be replaced by money appropriated for that purpose from the
general funds of this state to the administration fund for
expenditure as provided by Section 203.152.
(b) On receipt of notice that the secretary or the secretary's
successor has made a determination described in Subsection (a),
the commission shall promptly report the amount needed for
reimbursement to the governor. The governor, at the earliest
opportunity, shall submit to the legislature a request for the
appropriation of that amount.
Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.
SUBCHAPTER E. SPECIAL ADMINISTRATION FUND
Sec. 203.201. SPECIAL ADMINISTRATION FUND. (a) The
unemployment compensation special administration fund is a
special fund.
(b) The special administration fund consists of:
(1) all interest and penalties collected under this subtitle;
(2) any amounts received under any surety bond for losses
sustained by the special administration fund; and
(3) money transferred under Section 203.103.
Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.
Sec. 203.202. USE OF SPECIAL ADMINISTRATION FUND. (a) Money in
the special administration fund may be spent in accordance with
this subtitle and may be used:
(1) to pay the cost of reimbursing the benefit account in the
compensation fund for benefits paid to former employees of this
state that are based on service for this state, and the cost of
construction and purchase of buildings and land necessary for
that administration;
(2) in the administration of Chapters 51, 61, and 62;
(3) for payment of interest on advances from the federal trust
fund;
(4) as a revolving fund to cover expenditures that are necessary
and proper under this subtitle and for which federal funds have
been requested but not received, subject to the charging of the
expenditures against the federal funds when received;
(5) to refund a penalty as provided by Section 203.203; and
(6) subject to the provisions of Chapter 2107, Government Code,
to pay persons who contract with the commission to collect
delinquent unemployment taxes, penalties, and interest owed under
this subtitle.
(b) Money in the special administration fund may not be spent in
any manner that would permit its substitution for, or a
corresponding reduction in, federal funds that would, in the
absence of that money, be available to finance expenditures for
the administration of this subtitle.
(c) The commission by a resolution entered in its minutes may
authorize to be charged against the special administration fund
any expenditure the commission considers proper in the interest
of good administration of this subtitle if the resolution states
that no other funds are available for the expenditure.
Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.
Amended by Acts 1997, 75th Leg., ch. 94, Sec. 2, eff. Sept. 1,
1997.
Sec. 203.203. REFUND OF PENALTIES. A refund under Subchapter E,
Chapter 213 of a penalty that has been erroneously collected and
deposited to the credit of the special administration fund shall
be made, without interest, from the special administration fund.
Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.
SUBCHAPTER F. ISSUANCE OF FINANCIAL OBLIGATIONS FOR UNEMPLOYMENT
COMPENSATION FUND
Sec. 203.251. FINDINGS AND PURPOSE. (a) The legislature finds
that:
(1) it is an essential governmental function to maintain funds
in an amount sufficient to pay unemployment benefits when due;
(2) at the time of the enactment of this subchapter, borrowing
from the federal government was the only option available to
obtain sufficient funds to pay benefits when the balance in the
compensation fund is depleted;
(3) alternative methods of replenishing the unemployment
compensation fund may reduce the costs of providing unemployment
benefits and employers' cost of doing business in the state; and
(4) funds representing revenues received from the unemployment
obligation assessment authorized under this subchapter and any
income from the investment of those funds are not state property.
(b) The purpose of this subchapter is to provide appropriate
methods through which the state may continue the unemployment
compensation program at the lowest possible cost to the state and
employers in the state.
Added by Acts 2003, 78th Leg., ch. 317, Sec. 5, eff. June 18,
2003; Acts 2003, 78th Leg., ch. 817, Sec. 6.05, eff. June 20,
2003.
Sec. 203.252. DEFINITIONS; GENERAL PROVISION. (a) In this
subchapter:
(1) "Authority" means the Texas Public Finance Authority.
(2) "Bond" means any type of revenue obligation, including a
bond, note, certificate, or other instrument, payable from and
secured by a pledge of revenues received from the unemployment
obligation assessment and amounts on deposit in the obligation
trust fund to the extent provided in the proceedings authorizing
the obligation.
(3) "Bond administrative expenses" means expenses incurred to
administer bonds issued under this subchapter, including fees for
paying agents, trustees, and attorneys, and for other
professional services necessary to ensure compliance with
applicable state or federal law.
(4) "Bond obligations" means the principal of a bond and any
premium and interest on a bond issued under this subchapter,
together with any amount owed under a related credit agreement.
(5) "Credit agreement" means a loan agreement, a revolving
credit agreement, an agreement establishing a line of credit, a
letter of credit, an interest rate swap agreement, an interest
rate lock agreement, a currency swap agreement, a forward payment
conversion agreement, an agreement to provide payments based on
levels of or changes in interest rates or currency exchange
rates, an agreement to exchange cash flows or a series of
payments, an option, put, or call to hedge payment, currency,
interest rate, or other exposure, or another agreement that
enhances the marketability, security, or creditworthiness of a
bond issued under this subchapter.
(b) An amount owed by the authority under a credit agreement
shall be payable from and secured by a pledge of revenues
received from the unemployment obligation assessment and amounts
on deposit in the obligation trust fund to the extent provided in
the proceedings authorizing the credit agreement.
Added by Acts 2003, 78th Leg., ch. 317, Sec. 5, eff. June 18,
2003; Acts 2003, 78th Leg., ch. 817, Sec. 6.05, eff. June 20,
2003.
Sec. 203.253. REQUEST FOR BOND ISSUANCE. (a) If the commission
determines that the issuance of bonds is necessary to reduce or
avoid the need to borrow or obtain a federal advance under
Section 1201, Social Security Act (42 U.S.C. Section 1321), as
amended, or any similar federal law, or to refinance a previous
loan or advance received by the commission and that bond
financing is the most cost-effective method of funding the
payment of benefits, the commission may request the authority to
issue bonds on its behalf. Before making a request of the
authority under this subsection, the commission must by
resolution determine that the issuance of bonds for the purposes
established by this section will result in a savings to the state
and to employers in this state as compared to the cost of
borrowing or obtaining an advance under Section 1201, Social
Security Act (42 U.S.C. Section 1321), as amended, or any similar
federal law.
(b) The commission shall specify in the commission's request to
the authority the maximum principal amount of the bonds, not to
exceed $2 billion for any separate bond issue, and the maximum
term of the bonds, not to exceed 10 years.
(c) The principal amount determined by the commission under
Subsection (b) may be increased to include an amount sufficient
to:
(1) pay the costs of issuance of the authority;
(2) provide a bond reserve fund; and
(3) capitalize interest for the period determined necessary by
the commission, not to exceed two years.
Added by Acts 2003, 78th Leg., ch. 317, Sec. 5, eff. June 18,
2003; Acts 2003, 78th Leg., ch. 817, Sec. 6.05, eff. June 20,
2003.
Sec. 203.254. ISSUANCE OF BONDS BY AUTHORITY. (a) The
authority shall issue bonds on request by the commission, in
accordance with the requirements of Chapter 1232, Government
Code, and other provisions of Title 9, Government Code, that
apply to bond issuance by a state agency.
(b) The authority shall determine the method of sale, type of
bond, bond form, maximum interest rates, and other terms of the
bonds that, in the authority's judgment, best achieve the
economic goals of the commission and effect the borrowing at the
lowest practicable cost.
(c) The authority may enter into a credit agreement in
connection with the bonds.
Added by Acts 2003, 78th Leg., ch. 317, Sec. 5, eff. June 18,
2003; Acts 2003, 78th Leg., ch. 817, Sec. 6.05, eff. June 20,
2003.
Sec. 203.255. BOND PROCEEDS. (a) The proceeds of bonds issued
by the authority under this subchapter may be deposited with a
trustee selected by the authority and the commission or held by
the comptroller in a dedicated trust fund outside the state
treasury in the custody of the comptroller.
(b) Bond proceeds, including investment income, shall be held in
trust for the exclusive use and benefit of the commission. The
commission may use the proceeds to:
(1) repay the principal and interest of previous advances from
the federal trust fund;
(2) pay unemployment benefits by depositing the proceeds in the
unemployment compensation fund, as defined in Subchapter B;
(3) pay the costs of issuing the bonds;
(4) provide a bond reserve; and
(5) pay capitalized interest on the bonds for the period
determined necessary by the commission, not to exceed two years.
(c) Any excess money remaining after the purposes for which the
bonds were issued is satisfied may be used to purchase or redeem
outstanding bonds.
(d) If there are no outstanding bonds or bond interest to be
paid, the remaining proceeds shall be transferred to the
unemployment compensation fund.
Added by Acts 2003, 78th Leg., ch. 317, Sec. 5, eff. June 18,
2003; Acts 2003, 78th Leg., ch. 817, Sec. 6.05, eff. June 20,
2003.
Sec. 203.256. REPAYMENT OF COMMISSION'S FINANCIAL OBLIGATIONS.
(a) The commission shall assess an unemployment obligation
assessment annually on each employer entitled to an experience
rating under Chapter 204 if any bonds issued under this
subchapter are outstanding.
(b) With regard to outstanding bonds issued by the authority
under this subchapter, the authority shall notify the commission
of the amount of the bond obligations and the estimated amount of
bond administrative expenses each year in sufficient time, as
determined by the commission, to permit the commission to assess
the annual rate of the unemployment obligation assessment,
subject to verification by a financial advisor of the commission
or as otherwise specified in the proceedings authorizing the
bonds.
(c) The commission shall deposit all revenue collected from the
unemployment obligation assessment into the obligation trust
fund. Money deposited in the fund may be invested as permitted by
general law. Money in the obligation trust fund required to be
used to pay bond obligations and bond administrative expenses
shall be transferred to the authority or used by the commission
in the manner and at the time specified in the resolution adopted
in connection with the bond issue to ensure timely payment of
obligations and expenses, or as otherwise provided by the bond
documents.
(d) For bonds issued by the authority for the commission, the
commission shall provide for the payment of the bond obligations
and the bond administrative expenses by irrevocably pledging
revenues received from the unemployment obligation assessment and
amounts on deposit in the obligation trust fund, together with
any bond reserve fund, as provided in the proceedings authorizing
the bonds and related credit agreements.
Added by Acts 2003, 78th Leg., ch. 317, Sec. 5, eff. June 18,
2003; Acts 2003, 78th Leg., ch. 817, Sec. 6.05, eff. June 20,
2003.
Sec. 203.257. BOND PAYMENTS. (a) Revenues received from the
unemployment obligation assessment may be applied only as
provided by this subchapter.
(b) The commission may pay bond obligations with other legally
available funds.
(c) Bond obligations are payable only from sources provided for
payment in this subchapter.
Added by Acts 2003, 78th Leg., ch. 317, Sec. 5, eff. June 18,
2003; Acts 2003, 78th Leg., ch. 817, Sec. 6.05, eff. June 20,
2003.
Sec. 203.258. EXCESS REVENUE COLLECTIONS AND INVESTMENT
EARNINGS. Revenue collected from the unemployment obligation
assessment in any year that exceeds the amount of the bond
obligations and bond administrative expenses payable in that year
and interest earned on the obligation trust fund may, in the
discretion of the commission, be:
(1) used to pay bond obligations payable in the subsequent year,
offsetting the amount of the assessment that would otherwise have
to be levied for the year under this subchapter;
(2) used to redeem or purchase outstanding bonds;
(3) deposited in the unemployment compensation fund; or
(4) used to pay principal and interest on advances from the
federal trust fund.
Added by Acts 2003, 78th Leg., ch. 317, Sec. 5, eff. June 18,
2003; Acts 2003, 78th Leg., ch. 817, Sec. 6.05, eff. June 20,
2003.
Sec. 203.259. STATE DEBT NOT CREATED. (a) A bond issued under
this subchapter, and any related credit agreement, is not a debt
of the state or any state agency or political subdivision of the
state and is not a pledge of the faith and credit of any of them.
A bond or credit agreement is payable solely from revenue as
provided by this subchapter.
(b) A bond, and any related credit agreement, issued under this
chapter must contain on its face a statement to the effect that:
(1) neither the state nor a state agency, political corporation,
or political subdivision of the state is obligated to pay the
principal of or interest on the bond except as provided by this
subchapter; and
(2) neither the faith and credit nor the taxing power of the
state or any state agency, political corporation, or political
subdivision of the state is pledged to the payment of the
principal of or interest on the bond.
Added by Acts 2003, 78th Leg., ch. 317, Sec. 5, eff. June 18,
2003; Acts 2003, 78th Leg., ch. 817, Sec. 6.05, eff. June 20,
2003.
Sec. 203.260. STATE NOT TO IMPAIR BOND OBLIGATIONS. If bonds
under this subchapter are outstanding, the state may not:
(1) take action to limit or restrict the rights of the
commission to fulfill its responsibility to pay bond obligations;
or
(2) in any way impair the rights and remedies of the bond owners
until the bonds are fully discharged.
Added by Acts 2003, 78th Leg., ch. 317, Sec. 5, eff. June 18,
2003; Acts 2003, 78th Leg., ch. 817, Sec. 6.05, eff. June 20,
2003.
Sec. 203.261. EXEMPTION FROM TAXATION. A bond issued under this
subchapter, any transaction relating to the bond, and profits
made from the sale of the bond are exempt from taxation by this
state or by a municipality or other political subdivision of this
state.
Added by Acts 2003, 78th Leg., ch. 317, Sec. 5, eff. June 18,
2003; Acts 2003, 78th Leg., ch. 817, Sec. 6.05, eff. June 20,
2003.
Sec. 203.262. NO PERSONAL LIABILITY. The members of the
commission, commission employees, the board of directors of the
authority, and the employees of the authority are not personally
liable as a result of exercising the rights and responsibilities
granted under this subchapter.
Added by Acts 2003, 78th Leg., ch. 317, Sec. 5, eff. June 18,
2003; Acts 2003, 78th Leg., ch. 817, Sec. 6.05, eff. June 20,
2003.