Art. 21.49A-1. REVENUE BOND PROGRAM FOR FAIR PLAN
ASSOCIATION.
Article repealed effective April 1, 2007
Purpose
Sec. 1. The legislature finds that the issuance of public
securities to provide a method to raise funds to provide
residential property insurance through the FAIR Plan Association 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 FAIR Plan Association
established under Article 21.49A of this code.
(2) "Public security resolution" means the resolution or
order authorizing public securities to be issued under this
article.
(3) "Bond" means any debt instrument or public security
issued by the Texas Public Finance Authority.
(4) "Board" means the board of directors of the Texas Public
Finance Authority.
(5) "Insurer" means any insurer required to participate in
the association under Section 5, Article 21.49A of this code,
including a Lloyd's plan or a reciprocal or interinsurance
exchange.
Public securities authorized; application of Texas public finance
authority act.
Sec. 3. (a) At the request of the association, the Texas
Public Finance Authority shall issue public securities to:
(1) fund the association, including:
(A) to establish and maintain reserves to pay claims;
(B) to pay operating expenses; and
(C) to purchase reinsurance;
(2) pay costs related to issuance of the public securities;
and
(3) pay other costs related to the public securities as may
be determined by the board.
(b) To the extent not inconsistent with this article,
Chapter 1232, Government Code, applies to public securities issued
under this article. In the event of a conflict, this article
controls.
Applicability of other statutes
Sec. 4. The following laws apply to public securities 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, public securities in a total amount not
to exceed $75 million.
Conditions
Sec. 6. (a) Public securities issued under this article may
be issued at public or private sale.
(b) Public securities may mature not more than 10 years
after the date issued.
(c) Public securities must be issued in the name of the
association.
Additional covenants
Sec. 7. In a public security resolution, the board may make
additional covenants with respect to the public securities 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 public securities.
Special accounts
Sec. 8. (a) A public security 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 21.49A of this code.
Security
Sec. 9. (a) Public securities are payable only from the
service fee established under Section 10 of this article or other
amounts that the association is authorized to levy, charge, and
collect.
(b) Public securities are obligations solely of the
association. Public securities do not create a pledging, giving,
or lending of the faith, credit, or taxing authority of this state.
(c) Each public security must include a statement that the
state is not obligated to pay any amount on the public security and
that the faith, credit, and taxing authority of this state are not
pledged, given, or lent to those payments.
(d) Each public security issued under this article must
state on its face that the public security is payable solely from
the revenues pledged for that purpose and that the public security
does not and may not constitute a legal or moral obligation of the
state.
Service fee
Sec. 10. (a) A service fee may be assessed against:
(1) each insurer; and
(2) the association.
(b) The service fee shall be set by the commissioner in an
amount sufficient to pay all debt service on the public securities.
The service fee shall be paid by each insurer and the association as
required by the commissioner by rule.
(c) The comptroller shall collect the service 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 service 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
property insurance market in this state the insurer remains
obligated to pay, until the public securities are retired, the
insurer's share of the service fee assessed under this section in an
amount proportionate to that insurer's share of the property
insurance market, including residential property 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 property insurance,
including residential property insurance, for the insurer's last
reporting period.
Tax exempt
Sec. 11. The public securities issued under this article, any
interest from those public securities, and all assets pledged to
secure the payment of the public securities are free from taxation
by the state or a political subdivision of this state.
Authorized investments
Sec. 12. The public securities issued under this article
constitute authorized investments under Articles 2.10 and 3.33 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 public securities 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 public securities or in any way impair the rights and
remedies of those owners until the public securities, bond premium,
if any, 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
public securities.
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 public security resolution.
Added by Acts 2003, 78th Leg., ch. 206, Sec. 11.01, eff. June 11,
2003.
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