BILL ANALYSIS


                                                        S.J.R. 32
                                                        By: Brown
                                                          Finance
                                                           3-3-95
                                     Committee Report (Unamended)
BACKGROUND

In 1983, the Texas Legislature created the Veterans Housing
Assistance Program to provide low-interest loans to qualified Texas
veterans for the purchase of a home.  The program is funded by
bonds.  Since inception of the program, the voters have approved
$1.5 billion in general obligation bond authority, of which $1.235
billion has been issued.  The program, including all administrative
costs, is self-sufficient with no tax dollars being used.

Because of the low interest rates of the loans and on land,
combined with the steadily rising private mortgage rates, the
Veterans Land Board made more than $354 million in loans in 1994. 
At the current lending rate, it is anticipated that the remaining
bond authority will be insufficient to meet loan demand after 1996.

PURPOSE

As proposed, S.J.R. 32 requires the submission to the voters of a
constitutional amendment authorizing the Veterans' Land Board to
sell up to $500 million in bonds for the purpose of financing
housing for veterans in the state.

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 III, Texas Constitution, by adding
Section 49-b-3, as follows:

     Sec. 49-b-3.  (a)  Authorizes the Veterans' Land Board (board)
     to provide for, issue, and sell general obligation bonds of
     the state in an amount not to exceed $500 million to provide
     housing financing to veterans of the state.  Authorizes the
     board to enter into bond enhancement agreements with respect
     to the bonds.  Requires the proceeds from the issuance and
     sale of the bonds to be used to augment the Veterans' Housing
     Assistance Fund II to be administered and invested as provided
     by law.
     
     (b)  Requires the principal and interest on the general
       obligation bonds to be payable from the sources and in the
       manner provided by Section 49-b-2 of this article.
       
       (c)  Requires the bonds to be issued and sold in forms and
       denominations, on terms, at times, in the manner, at places,
       and in installments the board determines.  Requires the
       bonds to bear a rate or rates of interest the board
       determines.  Requires the bonds to be incontestable after
       the execution by the board, approval by the attorney
       general, and delivery to the purchaser or purchasers of the
       bonds.
       
SECTION 2. Requires this proposed constitutional amendment to be
submitted to the voters at an election to be held November 7, 1995. 
Sets forth the required language for the ballot.