BILL ANALYSIS S.J.R. 30 By: West State Affairs 3-3-95 Committee Report (Unamended) BACKGROUND Testimony before the Joint Interim Committee on Historically Underutilized Businesses suggests that as a direct result of the size, bonding and insurance requirements of many state contracts, the contracts are frequently awarded to large prime contractors, which are the "lowest bidders" but are generally not HUBs. In order to achieve contract and procurement goals established by the legislature, the committee recommended that a bonding fund be established which would provide surety bonds for historically underutilized businesses. PURPOSE As proposed, S.J.R. 30 requires the submission to the voters of a constitutional amendment authorizing the legislature to issue bonds to provide or guarantee surety bonds for historically underutilized businesses. 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 Article XVI, Texas Constitution, by adding Section 73, as follows: Sec. 73. (a) Authorizes the legislature, by law, to establish a Texas historically underutilized business (HUB) bonding fund to be used without further appropriation solely in furtherance of a program established by the legislature to provide surety bonds to HUBs. Requires the fund to contain certain accounts authorized by the legislature. Authorizes the legislature to issue up to $50 million of general obligation bonds (bonds) to provide funding for the program. Sets forth the sources from which the fund is to be composed. (b) Authorizes the legislature to require review and approval of the issuance of bonds under this section, of the use of the bond proceeds, or of the rules adopted by an agency to govern use of the proceeds. Authorizes any entity directed to conduct this review and approval to include members or appointees of members of all state government branches. (c) Provides that bonds under this section constitute a general obligation of the state. Provides that there is appropriated out of the first money coming into the treasury in each fiscal year not otherwise appropriated the amount sufficient to pay the principal of and interest on the bonds less any amount in any interest and sinking account at the end of the preceding fiscal year that is pledged to payment of the bonds or interest. SECTION 2. Requires this constitutional amendment to be submitted to the voters at an election to be held November 7, 1995. Sets forth required language for the ballot.