BILL ANALYSIS C.S.H.B. 1355 By: Van de Putte 04-27-95 Committee Report (Substituted) BACKGROUND According to the U.S. Council of the Mexico/U.S. Business Committee, almost $3 billion is needed to bring potable water and wastewater treatment plants to Texas colonias, Texas cities and towns, and to Juarez, Reynosa, and Matamoros. The council indicated current revenue sources available in Texas and Mexico will leave the border region $1.9 billion short of fulfilling its water needs. With the passage of NAFTA and the advent of the Border Environmental Cooperation Commission and the North American Development Bank, local communities have a mechanism through which they can use international cooperation agreements with Mexico to finance infrastructure development. PURPOSE As proposed, C.S.H.B. 1355 authorizes a political subdivision or a state agency to enter into agreements with the United Mexican States. 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. Amends Title 7, of the Government Code by adding Chapter 792, INTERNATIONAL COOPERATION AGREEMENTS Sec. 792.001. Defines "political subdivision" and "state agency". Sec. 792.002. AGREEMENTS WITH MEXICO. Permits an agency or political subdivision to enter into agreements with the United Mexican States or a subdivision there of, an agency of the United States, or any agency created under treaty between the United States and the United States of Mexico. Sec. 792.003. SCOPE OF AGREEMENT. Agreements under this section shall only be entered if the agreement is for the accomplishment of a function that the agency or political subdivision is authorized to perform under law. Sec. 792.004. TERMS. An agency or political subdivision is authorized to; acquire or dispose an interest in real property in this state or the United Mexican States, use necessary funds to accomplish the purposes of the agreement, use necessary equipment, facilities or other property to accomplish the agreement, and to agree to any other necessary terms that are not prohibited by federal or state law. An agreement made under this section shall not provide for the liability of the state or political subdivision on a bond or other obligation. Sec. 792.005. BONDS. Agencies and political subdivisions may issue bonds or other evidence of indebtedness to provide financing for the agreements in the same manner that the agency or political subdivision is currently authorized to perform. Sec. 792.006. APPROVAL OF THE TEXAS BOND REVIEW BOARD. An agreement under this chapter requires the approval of governor and the Legislative Budget Board. SECTION 2. Effective date: upon passage. Emergency clause. COMPARISON OF ORIGINAL TO SUBSTITUTE The following changes were made to this bill by means of a substitute: (1) SECTION 1, Sec. 792.001(2) has been expanded by the addition of subsections (A)-(F) to specify which agencies would be allowed to participate in these agreements. (2) SECTION 1, Sec. 792.004 has been expanded by the addition of subsection (b) which states that an agreement made under this chapter shall not provide for the liability of the state or any political subdivision on a bond or other obligation. (3) SECTION 1, Sec. 792.005 has been expanded by the addition of the phrase, "and in the same manner" added for clarification as to application of present regulations. (4) SECTION 2, Sec. 792.006; Approval by the Texas Bond Review Board was replaced by approval by the Governor and the Legislative Budget Board. SUMMARY OF COMMITTEE ACTION Pursuant to posting of public notice the House Committee on State Affairs convened in a public hearing on February 27, 1995 to consider HB 1355. The Chair laid out HB 1355 and recognized Rep. Van de Putte to explain the bill. Rep. Seidlits laid out a complete committee substitute which was not adopted. The following persons testified for the bill: William T. Avila representing himself; and Robert G. Rodriguez representing himself. The following persons testified neutrally on the bill: Jeannie Cisnenos representing the Texas Water Development Board; Anne L. Schwartz representing the Texas Public Finance Authority; and Jonathan Steinberg representing the Texas Water Development Board. The Chair recognized Rep. Van de Putte to close. The Chair left HB 1355 pending. In a public hearing on April 11, 1995 the Chair laid out HB 1355. Rep. B. Hunter laid out a complete committee substitute which was adopted without objection. The bill was reported favorably as substituted with the recommendation that it do pass and be printed by a record vote of 9 ayes, 3 nay, 1 pnv, and 2 absent.