BILL ANALYSIS



H.B. 1947
By: Heflin
03-17-95
Committee Report (Amended)


BACKGROUND

Subtitle C, Title 4, Local Government Code, provides for financial
provisions that apply to more than one type of local government. 
There are various constitutional and statutory provisions which
allow the state and its political subdivisions to issue debt. 
However, none of these provisions require a local governmental
entity to place a cap on the amount of debt it can issue.

PURPOSE

The purpose of HB 1947 is to require a municipality, county, school
district, special purpose district or authority, or other political
subdivision of the state to set a limit on the amount of debt they
can incur.

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 Subtitle C, Title 4, Local Government Code, by
adding Chapter 133, LIMITATION OF DEBT INCURRED.

     Section 133.001.  DEFINITIONS.  (1) Defines debt as an
obligation to pay money that is created by a bond, certificate of
obligation, or other evidence of indebtedness that is owed by a
local government; that has a term of longer than a year; that is
secured by tax revenues; and that is not budgeted for payment out
of maintenance & operation funds.  (2)  Defines local government as
a municipality, county, school district, special purpose district
or authority, or other political subdivision of the state.  (3) 
Defines regulation as an ordinance, order, rule, or other similar
governmental act.

     Section 133.002.  DEBT LIMIT.  (a)  Defines debt limit as the
maximum amount of debt that a local government may incur.  (b) 
Provides a proposed debt limit as a percentage of the total
assessment of taxable property in the jurisdiction, and that it may
not exceed any other constitutional or statutory-imposed limit.

     Section 133.003.  EFFECT OF DEBT LIMIT.  (a)  States that any
debt incurred in violation of a debt limit regulation is voidable. 
(b)  Prohibits any debt limit regulation from hindering any debt
incurred before this act.

     Section 133.004.  INITIAL DEBT LIMIT.  Requires a local
government to set an initial debt limit.

     Section 133.005.  AMENDMENT OF DEBT LIMIT.  Allows a debt
limit to be changed only by the governing body or by voter
petitions.

     Section 133.006.  PETITION REQUIREMENTS.  (a)  Requires
petitioners to gather signatures equal to at least 10 percent of
the total number of votes cast for governor in the most recent
general election in that jurisdiction; requires compliance with
Chapter 277 of the Election Code, which governs petition
requirements not otherwise covered by the Election Code or other
applicable code.

(b)  Requires a local government to call an election if the
petition is valid.

     Section 133.007.  ELECTION ON PROPOSED DEBT LIMIT.  Requires
(a) a debt limit regulation to be submitted to the voters on the
first uniform general election date at least 45 days after the
governing body proposes the regulation or certifies a voter
petition; (b) local publication for three consecutive weeks prior
to the election; (c) printing of ballots to vote for or against the
proposed regulation; (d) canvassing of returns; (e) immediate
effect of the regulation upon canvassing of its approval; (f) new
election within 90 days of a proposed regulation's failure if a
debt limit does not already exist.

SECTION 2.  Effective date of January 1, 1996.

SECTION 3.  Emergency clause.

EXPLANATION OF AMENDMENTS

Committee amendment #1 amends  Sec. 133.004 regarding Initial Debt
Limit to add that a debt limit previously imposed by law is
considered an initial debt limit approved by the voters.

Also, the amendment changes the effective date of the bill to
January 1, 1998.

Committee amendment #2 amends Sec. 133.007 regarding Election on
Proposed Debt Limit subsection (f) to required that the debt limit
be set at 25 percent of the total assessed valuation of taxable
property within the jurisdiction of the local government if a debt
limit had not been previously approved.

SUMMARY OF COMMITTEE ACTION

The committee convened in a public hearing on March 20, 1995 to
consider HB 1947.

The following person testified in favor of the bill:
Rep. Heflin.

The following people testified against the bill:
Sam D. Seale;
Frank Battle; and
Jeanine Cadena.

HB 1947 was referred to a subcommittee consisting of
Representatives:  Patterson, Chair; Marchant; and Carona.

The committee convened in a public hearing on March 27, 1995 to
consider HB 1947.

The Chair recalled the bill from subcommittee.

The committee considered amendment #1 to the bill.
The committee considered amendment #2 to the bill.
Both amendments were adopted without objection.

The motion to report HB 1947 favorably as amended, with the
recommendation that it do pass and be printed, prevailed by the
following record vote:  6 Ayes, 0 Nays, 0 PNV, 3 Absent.