1-1 By: Marchant (Senate Sponsor - Wentworth) H.C.R. No. 211 1-2 (In the Senate - Received from the House May 8, 1997; 1-3 May 9, 1997, read first time and referred to Committee on Finance; 1-4 May 18, 1997, reported favorably by the following vote: Yeas 13, 1-5 Nays 0; May 18, 1997, sent to printer.) 1-6 HOUSE CONCURRENT RESOLUTION 1-7 WHEREAS, Private activity tax-exempt bonds finance many 1-8 worthy projects with a public benefit such as environmental 1-9 infrastructure projects, including sewage facilities, solid waste 1-10 disposal facilities, and hazardous waste disposal facilities, 1-11 industrial development projects, student loans, and low-income 1-12 housing projects; and 1-13 WHEREAS, In 1986 the United States Congress imposed a 1-14 state-by-state volume cap on the issuance of private activity 1-15 tax-exempt bonds, with a cap of $75 per person per year for Texas; 1-16 and 1-17 WHEREAS, In 1988 the cap was lowered to $50 per person and 1-18 has not increased, even with the passage of time and inflation; and 1-19 WHEREAS, Many worthy projects with a public benefit, such as 1-20 environmental infrastructure projects undertaken by private firms, 1-21 industrial development projects, low-income housing projects, and 1-22 others, are not going forward due to the lack of available 1-23 financing; and 1-24 WHEREAS, While taxable financing may be available, the cost 1-25 of such financing can make a project uneconomic because most of 1-26 these projects do not provide a positive rate of return; and 1-27 WHEREAS, The allocation of these bonds in Texas has been 1-28 oversubscribed each year since 1988, and last year applications 1-29 exceeded allocations by 211 percent, with two out of three 1-30 applicants in the nondedicated category being denied a tax-exempt 1-31 bond under the lottery system of allocation because of a shortage 1-32 of funds; and 1-33 WHEREAS, Demand for private activity bond cap allocation will 1-34 certainly continue to increase, given Texas' growing economy, but 1-35 the $50 per person allocation will decrease in real value over 1-36 time, increasing demand relative to the available ceiling; and 1-37 WHEREAS, Unless congress increases the volume cap and 1-38 provides an inflation adjustment for the future, there will be 1-39 fewer and fewer projects that will receive financing; and 1-40 WHEREAS, As entities decide to delay or cancel planned 1-41 investments, economic growth will necessarily slow, causing ripple 1-42 effects throughout the economy; and 1-43 WHEREAS, Legislation has been introduced in the Congress of 1-44 the United States that would increase the volume caps and index 1-45 them for inflation in the future; now, therefore, be it 1-46 RESOLVED, That the 75th Legislature of the State of Texas 1-47 hereby respectfully request the Congress of the United States to 1-48 pass legislation that would increase the volume caps; and, be it 1-49 further 1-50 RESOLVED, That the congress be specifically requested to 1-51 ensure that inflation in the future be addressed in any legislation 1-52 on this issue; and, be it further 1-53 RESOLVED, That the congress be specifically requested to 1-54 ensure that funds for this program that are not used by other 1-55 states be allowed to be allocated to oversubscribed states such as 1-56 Texas; and, be it further 1-57 RESOLVED, That the Texas secretary of state forward official 1-58 copies of this resolution to the president of the United States, to 1-59 the speaker of the house of representatives and the president of 1-60 the senate of the United States Congress, and to all the members of 1-61 the Texas delegation to the congress with the request that this 1-62 resolution be officially entered in the Congressional Record as a 1-63 memorial to the Congress of the United States of America.