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.