SRC-MKV, S.B. 827 77(R)   BILL ANALYSIS


Senate Research Center   S.B. 827
77R4616 BDH-FBy: Duncan
Natural Resources
2/26/2001
As Filed


DIGEST AND PURPOSE 

Currently, cities and counties must issue municipal bonds for even small
loan amounts, and the bond issuance process creates expenses for the
political subdivision and requires review by the Texas attorney general.
S.B. 827 authorizes rural municipalities and counties to issue anticipation
notes to the Texas Agriculture Finance Authority (TAFA) to finance public
purpose projects that will promote economic development or facilitate the
infrastructure necessary for local economic growth.  Allowing TAFA to serve
as a small loan bond bank will reduce expenses and requirements for rural
area needing to finance small dollar amount projects. 

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 1431, Government Code, by adding Section
1431.014, as follows: 

Sec. 1431.014.  CERTAIN NOTES FOR RURAL ECONOMIC DEVELOPMENT.  (a)
Authorizes an issuer participating in a rural economic development program
established by the Texas Agricultural Finance Authority (authority) to sell
to the authority an anticipation note issued for a purpose described by
Section 1431.004(a)(1), provided that the note matures before the 30th
anniversary of the date the note is issued, and notwithstanding any other
provision of this chapter. 

(b) Provides that anticipation notes issued by a single issuer under this
section in an aggregate original principal amount of not more than $500,000
are not subject to the approval requirements of Section 1431.011 or Chapter
1202. 

(c) Authorizes an issuer to issue anticipation notes under this section for
the same purpose note more than once in any 12-month period. 

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