BILL ANALYSIS Financial Institutions Committee C.S.H.B. 1564 By: Chisum 03-16-95 Committee Report (Substituted) BACKGROUND According to the Texas Bond Review Board, there is no mechanism currently in place to collect data or numbers of total outstanding debt incurred by units of local government. While it is generally acknowledged that outstanding state debt is low in comparison to other states, it is also generally acknowledged that the combined state and local debt in Texas is high. At present, however, there is not a reliable estimate of total outstanding local debt, and no public entity has the express legal authority to collect the information needed for such an estimate. A comprehensive picture of combined state and local debt would be helpful to create an overall debt management policy for the state. PURPOSE Because the Attorney General must already approve all bonds for local governmental entities prior to issuance, H.B. 1564 would require the Attorney General to collect information on bonds issued by a municipal corporation or other political subdivision of the state. The information collected would be included in the Texas Bond Review Board's report of debt statistics under Section 7A, Chapter 1078, Act of the 70th Legislature. RULEMAKING AUTHORITY Although additional rulemaking authority is not expressly granted to a state officer, department, agency or institution, HB 1564 does imply in Section 1 that the Attorney General will have new rulemaking authority to collect the debt information, and the Bond Review Board will have new rulemaking authority to report debt information. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 3.002, Article 3, Chapter 53, Acts of the 70th Legislature, 2nd Called Session, 1987 (Article 717k-8, Vernon's Texas Civil Statutes by adding subsection (h). Subsection (h) requires the Attorney General to collect information on bonds issued by a municipal corporation or other political subdivision. The Attorney General is to provide the information to the Bond Review Board for inclusion in the board's report of debt statistics under Section 7A, Chapter 1078, Acts of the 70th Legislature, Regular Session, 1987 (Article 717k-7, Vernon's Texas Civil Statutes). SECTION 2. Section 7A(c), Chapter 1078, Acts of the 70th Legislature, Regular Session, 1987 (Article 717k-7, Vernon's Texas Civil Statutes), is amended to require the Attorney General to provide, in a timely manner, the information reasonably believed by the Bond Review Board to be necessary to prepare the board's report to the legislature. SECTION 3. Provides that the Act take effect September 1, 1995, and that the Act applies only to bonds submitted to the Attorney General for approval on or after that date. SECTION 4. Emergency Clause COMPARISON OF ORIGINAL TO SUBSTITUTE The original bill stated that the AG "shall collect" information. The substitute clarifies the language which grants the Attorney General power to collect information on bonds issued by a municipal corporation or a political subdivision of this state, by expressly authorizing the AG to collect this information. SUMMARY OF COMMITTEE ACTION The committee convened in a public hearing on March 13, 1995 to consider HB 1564. Rep. Gutierrez offered a committee substitute for the bill which was adopted without objection. The following person testified in favor of the bill: Rep. Chisum. The motion to report HB 1564 favorably as substituted, with the recommendation that it do pass and be printed and be sent to the Committee on Local and Consent Calendars, prevailed by the following record vote: 8 Ayes, 0 Nays, 0 PNV, 1 Absent.