JH S.B. 721 75(R)    BILL ANALYSIS


URBAN AFFAIRS
S.B. 721
By: Duncan (Isett)
4-23-97
Committee Report (Unamended)



BACKGROUND 

Currently, Section 271.021, Local Government Code, sets forth the purposes
to which governing entities may issue certificates of obligations to
finance projects the entities own and operate. These entities would have
added flexibility to finance other projects if they had the ability to
issue certificates of obligation for the payment of contractual interest
in certain projects undertaken on their behalf by other governing
entities. This bill would authorize such certificates to be issued by such
governing entities for the payment of contractual interest in certain
utility projects to be constructed in whole or in part on behalf of the
entity by another governmental entity or political subdivision pursuant to
a written agreement. 

PURPOSE

As proposed, S.B. 721 authorizes the governing body of a municipality to
issue certificates of obligation for the payment of a municipality's
contractual interests in certain utility projects that are constructed in
whole or in part on behalf of the governing body by another governmental
entity or political subdivision. 

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any
additional rulemaking authority to a state office, department, agency or
institution. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 271.045, Local Government Code, by adding
Subsections (c) and (d), to authorize the governing body of a municipality
to issue certificates of obligation to pay all or part of a municipality's
obligations incurred by contract for interests in and rights to water or
sewer treatment capacity in connection with a water supply and
transmission project, or sewer treatment or collection project to be
constructed in whole or in part on behalf of the municipality by another
governmental entity or political subdivision pursuant to a written
agreement expressly authorized under Section 402.014, Local Government
Code, or Section 791.026, Government Code. Sets forth the limits for the
principal amount of the certificates to be issued for the purpose of
funding the municipality's contractual obligations. 

SECTION 2. Emergency clause. Effective date: upon passage.