BILL ANALYSIS



H.B. 1320
By: Romo
03-03-95
Committee Report (Unamended)


BACKGROUND

There are two authorized but unissued bond issues that could be
removed from the state's bond authorization. First, the National
Research Laboratory Commission has authorized but not issued debt
for the Superconducting Super Collider: $250 million of General
Obligation bonds and $250 million of revenue bonds. There is no
need for this debt, given the decision by Congress to end the
project's federal funding. General revenue bonds can be revoked by
the Texas legislature while General Obligation bonds must be
revoked by the voters of Texas.

Rating agencies periodically evaluate the state's debt structure to
determine municipal bond ratings, which affect the state's interest
rate of bonds. Debt factors include the type of security pledged to
debt repayment, debt burden, debt history and trend. Texas
currently has a "Aa" bond rating from Moody's, a "AA" rating from
Standard and Poor's and a "AA+" rating from Fitch Investors
Service. The difference between the interest rate on a "AA"-rated
bond and a "AAA" bond is a rating of 20 basis points which could,
in fact, save the State of Texas as much as $15 million in debt
service payments.

Revoking the authorization of the unissued bonds would affect the
state's debt structure by lowering the potential debt. By lowering
the debt, the state could eventually have its General Obligation
bond rating raised. The authorized-but unissued-debt is considered
in the overall debt analysis, and reducing this amount would
represent effective debt management and accounting.

PURPOSE

As proposed, HB 1320 authorizes the legislature to reduce the
amount of general revenue bonds issued for the Superconducting
Super Collider from $500 million to $250 million.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly
grant any additional rulemaking authority to a state officer,
department, agency or institution.

SECTION BY SECTION ANALYSIS

Section 1. Repeals Chapter 626, Acts of the 70th Legislature,
Regular Session, 1987 (Article 601d-2, Vernon's Texas Civil
Statutes).

Section 2. Amends Section 465.022, Government Code, (a) Provides
for a reduction in the amount of general revenue bonds that the
commission is authorized to issue, sell, and deliver or cause any
financing corporation to issue, sell, and deliver from $500 million
to $250 million.

Section 3.  Amends Section 465.022, Government Code, (a) Provides
for a reduction in the amount of general obligation bonds that the
commission is authorized to issue, sell, and deliver or cause any
financing corporation to issue, sell, and deliver from $500 million
to $250 million.

     (b) Provides that Section 3 takes effect on the date which the
constitutional amendment      proposed by the 74th Legislature,
Regular Session, 1995; reducing the amount of     authorized
general obligation bonds for the superconducting super collider
research   facility, takes effect. Provides that if the amendment
is not approved by the voters, this     section has no effect.

Section 4. Amends Chapter 1078 Acts of the 70th Legislature,
Regular Session, 1987 (Article 717k-7, Vernon's Texas Civil
Statutes) by adding Section 7c.

     Sec. 7c. REVIEW OF UNISSUED STATE BONDS; REPORT. (a) Provides
that the   board shall review authorized but unissued state general
obligation and revenue bonds.

           (b) Requires that the board submit to the legislature
a report no later than        October 31 of each even-numbered year
whether any general obligation or       revenue authorization
should be revoked.

Section 5. Provides that this except for Section 3(b) this Act
takes effect on September 1, 1995.

Section 6. Emergency Clause.


SUMMARY OF COMMITTEE ACTION

The committee convened in a public hearing on March 6, 1995 to
consider HB 1320.  

The following people testified in neutrally of the bill:  Edward C.
Binglar and Robert P. Carpenter.  

HB 1320 was left pending.  

The committee convened in a public hearing on March 13, 1995 to
consider HB 1320.  The motion to report HB 1320 without amendments,
with the recommendation that it do pass and be printed, prevailed
by the following record vote:  9 Ayes, 0 Nays, 0 PNV, 0 Absent.