SRC-AAA S.B. 1902 75(R)   BILL ANALYSIS


Senate Research Center   S.B. 1902
By: Carona
Finance
4-4-97
As Filed


DIGEST 

Currently, tax-exempt debt is restricted in the private purposes for which
it could be issued and the amount of private activity, tax-exempt debt
which could be issued in each state, each calendar year. This bill
proposes administrative amendments for tax-exempt private activity bonds,
such as defining "project," decreasing certain subceilings, allowing
single-family set-asides for either single-family or multi-family housing,
changing the priority system for  single-family housing, and allowing 120
days to complete a bond issue. 
  
PURPOSE

As proposed, S.B. 1902 proposes administrative amendments for tax-exempt
private activity bonds, such as defining "project," decreasing certain
subceilings, allowing single-family set-asides for either single-family or
multi-family housing, changing the priority system for  single-family
housing, and allowing 120 days to complete a bond issue. 
  
RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Article 5190.9a, V.T.C.S., to redefine "local
population," and to define "project."  Makes conforming changes.  

SECTION 2. Amends Article 5190.9a, V.T.C.S., to provide that 15.5, rather
than 17.5, percent of the state ceiling is available exclusively for
certain reservations.  Provides that 7, rather than 5, percent  of the
state ceiling is available exclusively for qualified residential rental
project issues. Provides that 15 percent of the state ceiling is available
exclusively for reservations by issuers of qualified student loan bonds.
Provides that 27, rather than 42, percent, of the state ceiling is
available exclusively for all other issuers of bonds. Makes a conforming
change. 

SECTION 3. Amends Article 5190.9a, V.T.C.S., to require one-third of the
state ceiling reserved for qualified mortgage bonds to be made available
until August 25 to the Texas Department of Housing and Community Affairs
for issuing qualified mortgage and the residential rental project. 

SECTION 4. Amends Article 5190.9a, V.T.C.S., to delete a provision
relating to second category priorities. Requires second, rather than third
category of priority to include those applications for a reservation not
included in the first category, rather than the first and second category.
Provides that a priority under Subsection(b)(1) of an issuer composed of
more than one jurisdiction is not affected by the issuer's loss of a
sponsoring governmental unit and that unit's population base if the dollar
amount of the amount of the application has not increased.  Requires
reservations to be granted to mortgage bonds applicable to each housing
finance corporation.  Sets forth requirements of most recent closings
applicable to housing finance corporations.  Deletes a provision relating
to priority of certain issuers composed of more than one jurisdiction. 

SECTION 5. Amends Article 5190.9a, V.T.C.S., to prohibit an issuer prior
to September 1, from receiving in excess of $35 million for higher
education authorities authorized by Section 53.47, Education Code, and
described by Section 2(b)(5) of this Act; and $25 million for issuers
described  by Section 2(b)(6), rather than Section 2(b)(5), of this Act.
Deletes provisions relating to  higher education authorities. 

SECTION 6. Amends Article 5190.9a, V.T.C.S., to require certain members or
officers of the issuer to state that bonds are not being issued for which
there exists unexpended proceeds from a prior issue or issues of bonds
issued by the same issuer, or based on the issuer's population.  

SECTION 7. Amends Article 5190.9a, V.T.C.S., to require an issuer to close
on the bonds no later than the 120th, rather than the 90th, day after the
reservation date.  Provides that the issuer's reservation is cancelled, if
the issuer does not timely close on the bonds and that certain actions
will take place during the 150-day, rather than 120-day, period beginning
on the reservation date of the cancelled reservation. 

SECTION 8. Emergency clause.
  Effective date: upon passage.