Texas § TN.452.108 - DURATION OF CONTRACTS AND DELEGATION OF POWERS

§ TN.452.108. DURATION OF CONTRACTS AND DELEGATION OF POWERS

DURATION OF CONTRACTS AND DELEGATION OF POWERS. (a) An authority may contract for payment with debt obligations and for performance and payments to extend longer than one fiscal year if the contract provides for the discharge of the authority's contractual obligations by any method, including: (1) committing current year funds, future tax revenues, or cancellation charges; and (2) making the contract subject to the future availability of funds. (b) The executive committee may delegate to designated persons the power to contract for construction, services, and property, within budgeted amounts approved by the executive committee. (c) Except as provided by Subsection (d), an authority consisting of one subregion governed by a subregional board created under Subchapter O may not enter a lease or financing agreement secured wholly or partially by the assets of the authority if the duration of the lease or financing agreement is longer than five years unless the lease or agreement is approved by the voters of the authority in the manner provided for the issuance of bonds and notes under Subchapter H. (d) To provide tax benefits to another party that are available with respect to property under the laws of a foreign country or to encourage private investment with a transportation authority in the United States, and notwithstanding any other provision of this chapter, an authority consisting of one subregion governed by a subregional board created under Subchapter O may enter into and execute, as it considers appropriate, contracts, agreements, notes, security agreements, conveyances, bills of sale, deeds, leases as lessee or lessor, and currency hedges, swap transactions, or agreements relating to foreign and domestic currency. The agreements or instruments may have the terms, maturities, duration, provisions as to governing law, indemnities, and other provisions that are approved by the subregional board. In connection with any transaction authorized by this subsection, the authority may deposit in trust, escrow, or similar arrangement cash or lawful investments securities, or may enter into one or more payment agreements, financial guarantees, or insurance contracts with counterparties having either a corporate credit or debt rating in any form, a claims-paying ability, or a rating for financial strength of "AA" or better by Moody's Investors Service, Inc. or by Standard & Poor's Corporation or of "A (Class XII)" or better by Best's rating system, that by their terms, including interest to be earned on the cash or securities, or payment obligations, are sufficient in amount to pay when due all amounts required to be paid by the authority as rent over the full term of the transaction plus any optional purchase price or other obligation due under the transaction. (e) Property sold, acquired, or otherwise transferred under Subsection (d) is considered for all purposes to be property owned and held by the authority and used for public purposes. The property is exempt from ad valorem taxes imposed in this state. A leasehold interest in the property is exempt from Section 25.07 (a), Tax Code. A sale, lease, sublease, or other transfer of personal property by or to the authority under Subsection (d) is exempt from all sales, use, and motor vehicle taxes imposed by this state or a political subdivision of this state. (f) Subsection (c) does not apply to a lease or financing agreement that is payable from or secured by a pledge of funds described by Section 452.357 (a)(4). (g) Subsection (c) does not apply to a multiyear commodity or utility service purchase arrangement or agreement. Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995. Amended by Acts 1997, 75th Leg., ch. 1028, Sec. 2, eff. June 19, 1997; Acts 1999, 76th Leg., ch. 1284, Sec. 2, eff. Aug. 30, 1999; Acts 2001, 77th Leg., ch. 509, Sec. 1, eff. Sept. 1, 2001. Amended by: Acts 2011, 82nd Leg., R.S., Ch. 792 (H.B. 2195 ), Sec. 1, eff. June 17, 2011.