BILL ANALYSIS



C.S.H.B. 1441
By: Holzheauser
03-31-95
Committee Report (Substituted)


BACKGROUND

Last session the Legislature passed SB 737 which included a
provision for a $50 million revenue bond package to finance
conversion of vehicles to alternative fuels, including the
construction of fueling stations.  After the legislation passed,
concerns were raised by the Attorney General's office regarding the
legislation and, because of these concerns, no bonds have been
issued under the program to date.

Concerns were also raised about whether SB 737 clearly allows the
direct participation of counties and cities in the program.  It is
also not entirely clear whether SB 737 grants certain local
governments -- counties in particular -- the necessary authority to
enter into debt under the legislation.  This is important because
counties typically can only borrow money through the issuance of
bonds that have voter approval or through certificates of
obligation.

PURPOSE

CSHB 1441 clearly authorizes counties, cities, and special
districts to participate in the alternative fuels revenue bond
program.  In addition the bill clarifies that bond proceeds can be
used to pay for the underwriting costs of issuing the bonds, and it
creates clear statutory authority for local governments to borrow
money from the Public Finance Authority through the sale of
obligations.  While these issues are also addressed in a concurrent
resolution, HCR 145, the statutory changes in the committee
substitute will strengthen and improve the original law.

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 Section 9C, Texas Public Finance Authority Act
(Article 601d, Vernon's Texas Civil Statutes) by amending
subsections (a) and (f) and adding subsections (g) and (h).

     (a) is amended to allow that the proceeds from the sale of
bonds be used for the costs of     issuance and administration of
a project.

     A new part (7) gives authority to counties, cities, and
special districts to convert motor      vehicles and other
governmental sources of substantial energy output to alternative
fuels.

     A new part (8) gives authority to counties, cities, and
special districts to supply the    necessary resources to support
alternative fuel motor vehicles and other governmental      alternative fuel systems.

     Existing part (7) is renumbered as (9).

     (f) is amended by adding language to provide that the issuance
of bonds may be funded   with bond proceeds.

     (g) is added to allow the Public Finance Authority to
determine a price and purchase at  that price any obligation of an
eligible entity.  Also, the subsection provides that the    authority can make such purchases in a private sale as provided for
by resolution or order   of the governing body, not contrary to any
provision of law.

     (h) Gives local governments authority to borrow from the
Public Finance Authority by   selling its obligation to the
authority.
     
SECTION 2. Emergency clause and effective date: upon passage.


COMPARISON OF ORIGINAL TO SUBSTITUTE

The original version of HB 1441 repealed Section 9C of Article 601d
(V.T.C.S.) and completely rewrote the statute addressing the
provisions for a $50 million revenue bond package passed in the
73rd session in SB 737. 

The substitute for H.B. 1441 amends Section 9C, Subsections (a) and
(f) and adds subsection (g) and (h), to accomplish the same
objectives.

SUMMARY OF COMMITTEE ACTION

The committee considered HB 1441 in a public hearing on April 3,
1995.

The committee considered a complete committee substitute for the
bill.

The following people testified in favor of the bill:
Rep. Holzheauser;
Randy Fritz representing Southern Union Gas; and 
Jody Richardson representing Mesa, Inc.

The following people testified neutrally on the bill:
Jim Thomasson representing the Office of the Attorney General; 
Soll Sussman representing the Texas General Land Office;
Mike Hatchman representing Railroad Commission of Texas and the
Alternative Fuels Council; and 
Anne L. Schwartz representing the Texas Public Finance Authority.

The motion to adopt the committee substitute and report the bill
favorably as substituted, with the recommendation that it do pass
and be printed, prevailed by the following record vote:  9 Ayes, 0
Nays, 0 PNV, 0 Absent.