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