Texas Insurance Code - Not Codified - Article 21.49-3d. Revenue Bond Program And Procedures For Certain Liability Insurance
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Art. 21.49-3d. REVENUE BOND PROGRAM AND PROCEDURES FOR
CERTAIN LIABILITY INSURANCE.
Article repealed effective April 1, 2007
Legislative Finding; Purpose
Sec. 1. The legislature finds that the issuance of bonds to
provide a method to raise funds to provide professional liability
insurance through the association for nursing homes and assisted
living facilities in this state is for the benefit of the public and
in furtherance of a public purpose.
Definitions
Sec. 2. In this article:
(1) "Association" means the joint underwriting association
established under Article 21.49-3 of this code.
(2) "Bond resolution" means the resolution or order
authorizing the bonds to be issued under this article.
(3) "Board" means the board of directors of the Texas Public
Finance Authority.
(4) "Insurer" means any insurer required to be a member of
the association under Section 3, Article 21.49-3 of this code.
Bonds authorized; application of Texas Public Finance Authority
Act
Sec. 3. (a) On behalf of the association, the Texas Public
Finance Authority shall issue revenue bonds to:
(1) fund the stabilization reserve fund for for-profit and
not-for-profit nursing homes and assisted living facilities
established under Section 4B, Article 21.49-3 of this code;
(2) pay costs related to issuance of the bonds; and
(3) pay other costs related to the bonds as may be
determined by the board.
(b) To the extent not inconsistent with this article,
Chapter 1232, Government Code, applies to bonds issued under this
article. In the event of a conflict, this article controls.
Applicability of other statutes
Sec. 4. The following laws apply to bonds issued under this
article to the extent consistent with this article:
(1) Chapters 1201, 1202, 1204, 1205, 1231, and 1371,
Government Code; and
(2) Subchapter A, Chapter 1206, Government Code.
Limits
Sec. 5. The Texas Public Finance Authority may issue, on
behalf of the association, bonds in a total amount not to exceed $75
million.
Conditions
Sec. 6. (a) Bonds may be issued at public or private sale.
(b) Bonds may mature not more than 10 years after the date
issued.
(c) Bonds must be issued in the name of the association.
Additional covenants
Sec. 7. In a bond resolution, the board may make additional
covenants with respect to the bonds and the designated income and
receipts of the association pledged to their payment and may
provide for the flow of funds and the establishment, maintenance,
and investment of funds and accounts with respect to the bonds.
Special accounts
Sec. 8. (a) A bond resolution may establish special accounts,
including an interest and sinking fund account, reserve account,
and other accounts.
(b) The association shall administer the accounts in
accordance with Article 21.49-3 of this code.
Security
Sec. 9. (a) Bonds are payable only from the surcharge fee
established in Section 10 of this article or other sources the
association is authorized to levy, charge, and collect in
connection with paying any portion of the bonds.
(b) Bonds are obligations solely of the association. Bonds
do not create a pledging, giving, or lending of the faith, credit,
or taxing authority of this state.
(c) Each bond must include a statement that the state is not
obligated to pay any amount on the bond and that the faith, credit,
and taxing authority of this state are not pledged, given, or lent
to those payments.
(d) Each bond issued under this article must state on its
face that the bond is payable solely from the revenues pledged for
that purpose and that the bond does not and may not constitute a
legal or moral obligation of the state.
Surcharge fee
Sec. 10. (a) A surcharge fee is assessed against:
(1) each insurer; and
(2) the association.
(b) The surcharge fee shall be set by the commissioner in an
amount sufficient to pay all debt service on the bonds. The
surcharge shall be paid by each insurer and the association as
required by commissioner rule.
(c) The comptroller shall collect the surcharge fee and the
department shall reimburse the comptroller in the manner described
by Article 4.19 of this code.
(d) The commissioner, in consultation with the comptroller,
may coordinate payment and collection of the surcharge fee with
other payments made by insurers and collected by the comptroller.
(e) As a condition of engaging in the business of insurance
in this state, an insurer agrees that if the company leaves the
market for liability insurance in this state the insurer remains
obligated to pay, until the bonds are retired, the insurer's share
of the surcharge fee assessed under this section in an amount
proportionate to that insurer's share of the market for liability
insurance, including motor vehicle liability insurance, in this
state as of the last complete reporting period before the date on
which the insurer ceases to engage in that insurance business in
this state. The proportion assessed against the insurer shall be
based on the insurer's gross premiums for liability insurance,
including motor vehicle liability insurance, for the insurer's last
reporting period. However, an insurer is not required to pay the
proportionate amount in any year in which the surcharge fee
assessed against insurers continuing to write liability insurance
in this state is sufficient to service the bond obligation.
Tax exempt
Sec. 11. The bonds issued under this article, and any
interest from the bonds, and all assets pledged to secure the
payment of the bonds are free from taxation by the state or a
political subdivision of this state.
Authorized investments
Sec. 12. The bonds issued under this article constitute
authorized investments under Article 2.10 and Subpart A, Part I,
Article 3.39, of this code.
State pledge
Sec. 13. The state pledges to and agrees with the owners of
any bonds issued in accordance with this article that the state will
not limit or alter the rights vested in the association to fulfill
the terms of any agreements made with the owners of the bonds or in
any way impair the rights and remedies of those owners until the
bonds, any premium or interest, and all costs and expenses in
connection with any action or proceeding by or on behalf of those
owners are fully met and discharged. The association may include
this pledge and agreement of the state in any agreement with the
owners of the bonds.
Enforcement by mandamus
Sec. 14. A writ of mandamus and all other legal and equitable
remedies are available to any party at interest to require the
association and any other party to carry out agreements and to
perform functions and duties under this article, the Texas
Constitution, or a bond resolution.
Added by Acts 2001, 77th Leg., ch. 1284, Sec. 5.10, eff. June 15,
2001; Sec. 1 amended by Acts 2003, 78th Leg., ch. 141, Sec. 12, eff.
Sept. 1, 2003; Sec. 3(a) amended by Acts 2003, 78th Leg., ch. 141,
Sec. 13, eff. Sept. 1, 2003.
Article: 21.47 21.49 21.49-2V 21.49-3 21.49-3a 21.49-3b 21.49-3c 21.49-3d 21.49-4 21.49-4a 21.49-5 21.49-6 21.49-7 21.49-8 21.49-11
Last modified: August 11, 2007
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