HOUSE CONCURRENT RESOLUTION
1-1 WHEREAS, Private activity tax-exempt bonds finance many
1-2 worthy projects with a public benefit such as environmental
1-3 infrastructure projects, including sewage facilities, solid waste
1-4 disposal facilities, and hazardous waste disposal facilities,
1-5 industrial development projects, student loans, and low-income
1-6 housing projects; and
1-7 WHEREAS, In 1986 the United States Congress imposed a
1-8 state-by-state volume cap on the issuance of private activity
1-9 tax-exempt bonds, with a cap of $75 per person per year for Texas;
1-10 and
1-11 WHEREAS, In 1988 the cap was lowered to $50 per person and
1-12 has not increased, even with the passage of time and inflation; and
1-13 WHEREAS, Many worthy projects with a public benefit, such as
1-14 environmental infrastructure projects undertaken by private firms,
1-15 industrial development projects, low-income housing projects, and
1-16 others, are not going forward due to the lack of available
1-17 financing; and
1-18 WHEREAS, While taxable financing may be available, the cost
1-19 of such financing can make a project uneconomic because most of
1-20 these projects do not provide a positive rate of return; and
1-21 WHEREAS, The allocation of these bonds in Texas has been
1-22 oversubscribed each year since 1988, and last year applications
1-23 exceeded allocations by 211 percent, with two out of three
1-24 applicants in the nondedicated category being denied a tax-exempt
2-1 bond under the lottery system of allocation because of a shortage
2-2 of funds; and
2-3 WHEREAS, Demand for private activity bond cap allocation will
2-4 certainly continue to increase, given Texas' growing economy, but
2-5 the $50 per person allocation will decrease in real value over
2-6 time, increasing demand relative to the available ceiling; and
2-7 WHEREAS, Unless congress increases the volume cap and
2-8 provides an inflation adjustment for the future, there will be
2-9 fewer and fewer projects that will receive financing; and
2-10 WHEREAS, As entities decide to delay or cancel planned
2-11 investments, economic growth will necessarily slow, causing ripple
2-12 effects throughout the economy; and
2-13 WHEREAS, Legislation has been introduced in the Congress of
2-14 the United States that would increase the volume caps and index
2-15 them for inflation in the future; now, therefore, be it
2-16 RESOLVED, That the 75th Legislature of the State of Texas
2-17 hereby respectfully request the Congress of the United States to
2-18 pass legislation that would increase the volume caps; and, be it
2-19 further
2-20 RESOLVED, That the congress be specifically requested to
2-21 ensure that inflation in the future be addressed in any legislation
2-22 on this issue; and, be it further
2-23 RESOLVED, That the congress be specifically requested to
2-24 ensure that funds for this program that are not used by other
2-25 states be allowed to be allocated to oversubscribed states such as
2-26 Texas; and, be it further
2-27 RESOLVED, That the Texas secretary of state forward official
3-1 copies of this resolution to the president of the United States, to
3-2 the speaker of the house of representatives and the president of
3-3 the senate of the United States Congress, and to all the members of
3-4 the Texas delegation to the congress with the request that this
3-5 resolution be officially entered in the Congressional Record as a
3-6 memorial to the Congress of the United States of America.
Marchant
_______________________________ _______________________________
President of the Senate Speaker of the House
I certify that H.C.R. No. 211 was adopted by the House on May
7, 1997, by a non-record vote.
_______________________________
Chief Clerk of the House
I certify that H.C.R. No. 211 was adopted by the Senate on
May 26, 1997, by a viva-voce vote.
_______________________________
Secretary of the Senate
APPROVED: _____________________
Date
_____________________
Governor