LABOR CODE
CHAPTER 203. FINANCING AND FUNDS
SUBCHAPTER A. GENERAL PROVISIONS
§ 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(4) Repealed by Acts 1997, 75th Leg., ch. 1423, §
12.14, eff. Sept. 1, 1997.
Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993. Amended
by Acts 1997, 75th Leg., ch. 1423, § 12.14, eff. Sept. 1, 1997.
§ 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, § 1, eff. Sept. 1, 1993. Amended
by Acts 1997, 75th Leg., ch. 1423, § 12.01, eff. Sept. 1, 1997.
§ 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, § 1, eff. Sept. 1, 1993. Amended
by Acts 1997, 75th Leg., ch. 1423, § 12.02, eff. Sept. 1, 1997.
§ 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, § 1, eff. Sept. 1, 1993.
§ 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, § 1, eff. Sept. 1, 1993.
SUBCHAPTER B. UNEMPLOYMENT COMPENSATION FUND
§ 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, § 1, eff. Sept. 1, 1993. Amended
by Acts 1997, 75th Leg., ch. 1423, § 12.03, eff. Sept. 1, 1997.
§ 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, § 1, eff. Sept. 1, 1993. Amended
by Acts 1997, 75th Leg., ch. 1423, § 12.04, eff. Sept. 1, 1997.
§ 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, § 1, eff. Sept. 1, 1993. Amended
by Acts 1997, 75th Leg., ch. 1423, § 12.05, eff. Sept. 1, 1997.
§ 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, § 1, eff. Sept. 1, 1993. Amended
by Acts 1997, 75th Leg., ch. 1423, § 12.06, eff. Sept. 1, 1997.
§ 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, § 1, eff. Sept. 1, 1993.
§ 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, § 9.28(a),
eff. Sept. 1, 1995.
Acts 1993, 73rd Leg., ch. 269, § 1, eff. Sept. 1, 1993. Amended
by Acts 1995, 74th Leg., ch. 76, § 9.28(a), eff. Sept. 1, 1995.
§ 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, § 1, eff. Sept. 1, 1993.
§ 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, § 1, eff. Sept. 1, 1993.
§ 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, § 1, eff. Sept. 1, 1993.
§ 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, § 1, eff. Sept. 1, 1993.
§ 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, § 1, eff. Sept. 1, 1993.
§ 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, § 1, eff. Sept. 1, 1993. Amended
by Acts 1997, 75th Leg., ch. 1423, § 12.07, eff. Sept. 1, 1997.
SUBCHAPTER C. ADVANCES FROM FEDERAL TRUST FUND AND OBLIGATION
ASSESSMENT
§ 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, § 1, eff. Sept. 1, 1993.
§ 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.
(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, § 1, eff. Sept. 1, 1993. Amended
by Acts 1995, 74th Leg., ch. 1004, § 1, eff. Sept. 1, 1995; Acts
1997, 75th Leg., ch. 1423, § 12.08, eff. Sept. 1, 1997; Acts
2003, 78th Leg., ch. 317, § 2, eff. June 18, 2003; Acts 2003,
78th Leg., ch. 817, § 6.02, eff. June 20, 2003.
§ 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, § 1, eff. Sept. 1, 1993. Amended
by Acts 2003, 78th Leg., ch. 317, § 3, eff. June 18, 2003; Acts
2003, 78th Leg., ch. 817, § 6.03, eff. June 20, 2003.
§ 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, § 1, eff. Sept. 1, 1993. Amended
by Acts 2003, 78th Leg., ch. 317, § 4, eff. June 18, 2003; Acts
2003, 78th Leg., ch. 817, § 6.04, eff. June 20, 2003.
SUBCHAPTER D. ADMINISTRATION FUND
§ 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, § 1, eff. Sept. 1, 1993.
§ 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, § 1, eff. Sept. 1, 1993.
§ 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, § 1, eff. Sept. 1, 1993.
SUBCHAPTER E. SPECIAL ADMINISTRATION FUND
§ 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, § 1, eff. Sept. 1, 1993.
§ 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, § 1, eff. Sept. 1, 1993. Amended
by Acts 1997, 75th Leg., ch. 94, § 2, eff. Sept. 1, 1997.
§ 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, § 1, eff. Sept. 1, 1993.
SUBCHAPTER F. ISSUANCE OF FINANCIAL OBLIGATIONS FOR UNEMPLOYMENT
COMPENSATION FUND
§ 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, § 5, eff. June 18, 2003;
Acts 2003, 78th Leg., ch. 817, § 6.05, eff. June 20, 2003.
§ 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, § 5, eff. June 18, 2003;
Acts 2003, 78th Leg., ch. 817, § 6.05, eff. June 20, 2003.
§ 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, § 5, eff. June 18, 2003;
Acts 2003, 78th Leg., ch. 817, § 6.05, eff. June 20, 2003.
§ 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, § 5, eff. June 18, 2003;
Acts 2003, 78th Leg., ch. 817, § 6.05, eff. June 20, 2003.
§ 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, § 5, eff. June 18, 2003;
Acts 2003, 78th Leg., ch. 817, § 6.05, eff. June 20, 2003.
§ 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, § 5, eff. June 18, 2003;
Acts 2003, 78th Leg., ch. 817, § 6.05, eff. June 20, 2003.
§ 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, § 5, eff. June 18, 2003;
Acts 2003, 78th Leg., ch. 817, § 6.05, eff. June 20, 2003.
§ 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, § 5, eff. June 18, 2003;
Acts 2003, 78th Leg., ch. 817, § 6.05, eff. June 20, 2003.
§ 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, § 5, eff. June 18, 2003;
Acts 2003, 78th Leg., ch. 817, § 6.05, eff. June 20, 2003.
§ 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, § 5, eff. June 18, 2003;
Acts 2003, 78th Leg., ch. 817, § 6.05, eff. June 20, 2003.
§ 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, § 5, eff. June 18, 2003;
Acts 2003, 78th Leg., ch. 817, § 6.05, eff. June 20, 2003.
§ 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, § 5, eff. June 18, 2003;
Acts 2003, 78th Leg., ch. 817, § 6.05, eff. June 20, 2003.
