SRC-JXG S.B. 1695 76(R)   BILL ANALYSIS


Senate Research Center   S.B. 1695
76R9009 JRD-DBy: Brown
Finance
4/8/1999
As Filed


DIGEST 

Throughout the last decade, the State's population has grown by more than
2.8 million. According to the U.S. Census Bureau, five Texas counties were
among the 10 fastest growing counties in the nation, and among them the Rio
Grande Valley population. S.B. 1695 would address Texas' rapidly growing
population, and the increased infrastructure needs this growth mandates. 

PURPOSE

As proposed, S.B. 1695 creates the Vital Infrastructure Program to fund new
or existing improvement projects for schools, health facilities,
transportation structures, and environmental related infrastructure, from
the issuance of bonds backed by tobacco settlement money. 

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 Title 10G, Government Code, by adding Chapter 2312, as
follows: 

CHAPTER 2312. TEXAS VITAL INFRASTRUCTURE PROGRAM

Sec. 2312.001. DEVELOPMENT OF VITAL INFRASTRUCTURE PROGRAMS. Authorizes the
Texas Education Agency (TEA) to define, develop, and propose to the
governor and the Legislative Budget Board (LBB) infrastructure programs
relating to the construction and improvement of the state's public school
infrastructure, including public school buildings and other essential
public education facilities. Requires TEA to design a program that meets
certain provisions. Authorizes the Texas Department of Health (TDH), and
each institution of higher education, as defined by Section 61.003,
Education Code, that has as a component or affiliate of the institution a
health sciences center or medical school, to define, develop, and propose
to the governor and LBB infrastructure programs designed for medical
research, such as cancer research or pediatric medical research, at state
medical research institutions. Authorizes the Texas Department of
Transportation (TxDOT) to define, develop, and propose to the governor and
LBB infrastructure programs that will supplement the efforts of counties
and of the Texas Department of Commerce (TDC) to improve highways, roads,
and bridges in various parts of the state. Authorizes the Texas Water
Development Board (TWDB) to define, develop, and propose to the governor
and LBB infrastructure programs designed to provide or improve
infrastructure, such as water or wastewater facilities required for the
maintenance of the environment, and to improve the quality of life in
various parts of the state. 

Sec. 2312.002. REVIEW AND APPROVAL BY GOVERNOR AND LEGISLATIVE BUDGET
BOARD. Requires the governor and LBB to review and comment on proposed
programs submitted under Section 2312.001. Requires the governor and LBB to
consider the extent to which a proposed program is consistent with the
state's infrastructure priorities as determined under applicable law or by
the governor and LBB. Provides that a proposed program is not considered
approved, unless approved by the governor and LBB.  

 Sec. 2312.003. TEXAS PUBLIC FINANCE AUTHORITY; BOND REVIEW BOARD. Requires
the Texas Public Finance Authority (TPFA) to prepare a plan to issue bonds
to pay for the approved infrastructure program, after the governor and LBB
approve a proposed program. Requires TPFA to submit the financing plan to
the Bond Review Board (board) for its review and approval. 

Sec. 2312.004. ISSUANCE OF BONDS. Requires TPFA to issue bonds to finance
the approved infrastructure program on terms approved by the board and in
accordance with Section 49-k, Article III, Texas Constitution, if the
financing plan is approved by the board. Provides that the only money that
may be pledged by TPFA to the payment of the principal and interest on the
bonds is money generated by an approved vital infrastructure program and
money received by the state under the Comprehensive Settlement Agreement
and Release filed in the case styled The State of Texas v. The American
Tobacco Co., et al., No. 5-96CV91, in the United States District Court,
Eastern District of Texas. Provides that no more than 50 percent of the sum
of unspent and unencumbered money received in previous years from
settlement proceeds in the tobacco litigation, together with the projected
amount reasonably expected to be received from those proceeds during that
year to be scheduled for the payment of principal and interest during the
year on all outstanding bonds issued under this chapter for any calendar
year. Provides that the holders of bonds issued under this chapter have a
first lien on the money pledged to the payment of the bonds. Requires the
bonds issued under this section to be issued subject to the condition that
bondholders do not have the right to demand payment out of a source of
money that has not been specifically pledged to the payment of principal
and interest on the bonds. 

Sec. 2312.005. TRANSFER OF TOBACCO SETTLEMENT MONEY. Requires the
comptroller to transfer any amounts received by the state as proceeds of
the tobacco settlement described by Section 2312.004 that are pledged to
the payment of principal or interest on a bond issued under this chapter
into a separate vital infrastructure program account in the general revenue
fund. Requires all payments of principal and interest on bonds issued under
this chapter to be made from that account. Provides that amounts in the
vital infrastructure program account that are not required during a fiscal
year to make payments of principal and interest on bonds or to create a
reasonable reserve fund for the bonds to be appropriated for other purposes
for that fiscal year. 

SECTION 2. Provides that this Act takes effect on the date on which the
constitutional amendment proposed by the 76th Legislature, Regular Session,
1999, allowing the state to create a program involving the issuance of
bonds to meet the vital infrastructure needs of the state, takes effect.
Provides that this Act has no effect, if the amendment is not approved by
the voters. 

SECTION 3. Emergency clause.