SRC-BWC S.B. 407 77(R)   BILL ANALYSIS


Senate Research Center   S.B. 407
2001S0171/1By: Cain
State Affairs
2/15/2001
As Filed


DIGEST AND PURPOSE 

The attorney general issued an opinion in 1999, concerning whether a county
may borrow money from the State Infrastructure Bank (SIB) for road and
bridge construction without issuing bonds or other obligations evidencing
the loan.  The opinion generally held that county authority to enter into
debt must be express or necessarily implied by statue, but because no
statute expressly or implicitly authorizes a county to borrow money from
the SIB in the manner described, a county may not borrow funds from the SIB
without issuing bonds or other statutorily authorized obligations that
would be acquired by the SIB with the proceeds of a loan. As proposed, S.B.
407 authorizes public entities in this state, including cities, counties,
and state agencies, to borrow funds from the SIB based on credit of the
public entity. 

RULEMAKING AUTHORITY

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

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Chapter 222D, Transportation Code, by adding Section
222.0745, as follows: 

Sec. 222.0745.  INCURRENCE OF DEBT BY PUBLIC ENTITY.  Authorizes a public
entity in this state that is authorized by law to construct, maintain, or
finance a qualified project to borrow money from the bank, including by
direct loan, based on the credit of the public entity.  Requires money
borrowed under this section to be segregated from other funds under the
control of the public entity, and authorizes these funds to only be used
for purposes related to a qualified project.  Provides that the authority
granted by this section does not affect the ability of a public entity to
incur debt using other statutorily authorized methods. 

SECTION 2.  Effective date:  upon passage or September 1, 2001.