BILL ANALYSIS


                                                        H.B. 1441
                                         By: Holzheauser (Bivins)
                                                Natural Resources
                                                         05-12-95
                              Senate Committee Report (Unamended)
BACKGROUND

The 73rd Legislature passed S.B. 737, which included a provision
for a $50 million bond package to finance the conversion of motor
vehicles to alternative fuels and to finance the construction of
fueling stations.  No bonds from this package have been issued due
to concerns about this Act that were raised by the attorney
general.

Questions were asked about whether S.B. 737 allows direct
participation by cities and counties in the conversion program. 
Other concerns have arisen as to whether local governments were
given authority by this Act to enter into debt under the
legislation.

PURPOSE

As proposed, H.B. 1441 authorizes the Texas Public Finance
Authority to issue, sell, and purchase obligations to finance
alternative fuels projects.

RULEMAKING AUTHORITY

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

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 9C, Article 601d, V.T.C.S. (Texas Public
Finance Authority Act), by amending Subsections (a) and (f) and by
adding Subsections (g) and (h), as follows:

     (a) Authorizes the Texas Public Finance Authority (TPFA), upon
     determination that a project is financially viable and
     sufficient revenue is or will be available, to issue and sell
     obligations, the proceeds of which shall be used for the
     financing of certain works, including the conversion of motor
     vehicles and other sources of substantial energy output of a
     local government to alternative fuels; the conversion of motor
     vehicles and other sources of substantial energy output of a
     hospital district or authority, a housing authority, or a
     district or authority crated under Section 52, Article III,
     Texas Constitution, or Section 59, Article XVI, Texas
     Constitution, to alternative fuels; and the construction,
     acquisition, or maintenance of fueling stations supplying
     alternative fuels or equipment enhancing the use of engine-driven technology to support motor vehicles and other energy
     applications that use alternative fuels by a local government
     or political subdivision.
     
     (f) Requires costs of issuance of bonds and of administration
     of the alternative fuels finance program to be considered a
     part of project costs and to be funded with bond proceeds.
     
     (g) Authorizes TPFA to use the proceeds of obligations issued
     by TPFA to purchase, at the price determined by TPFA, an
     obligation of an entity that evidences the entity's obligation
     to repay TPFA.  Authorizes TPFA to acquire an obligation of an
     entity in a private sale as provided by resolution or order of
     the entity's governing body.
     
     (h) Authorizes an entity to borrow from TPFA by selling an
     obligation to TPFA.
     
     SECTION 2.     Sets forth the intent of the legislature regarding the
financing of alternative fuels projects through legislative
appropriations, the purchase of state obligations by local
governments, loans, and the issuance of obligations by local
governments.

SECTION 3. Emergency clause.
           Effective date: upon passage.