C.S.H.B. 3551 78(R) BILL ANALYSIS C.S.H.B. 3551 By: Chavez Urban Affairs Committee Report (Substituted) BACKGROUND AND PURPOSE Under current law, cities are unable to issue commercial paper in lieu of certificates of obligation. Committee Substitute House Bill 3551 would amend the Government Code to allow municipalities to use commercial paper for any authorized expenditure the State of Texas allows for certificates of obligation. Municipalities would be able to use commercial paper for infrastructure projects and large capital acquisitions, thereby saving large expenses in interest by only issuing commercial paper when cash is required. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. House Bill 3551 amends Section 1371.001(2),Government Code, to add activities described by Section 271.045, Local Government Code, to the list of permissible activities for which municipalities may issue commercial paper. SECTION 2. Effective date. EFFECTIVE DATE: September 1, 2003. COMPARISON OF ORIGINAL TO SUBSTITUTE C.S.H.B. 3551 modifies the original by amending Section 1371.001(2),Government Code, to add activities described by Section 271.045, Local Government Code, to the list of permissible activities for which municipalities may issue commercial paper, rather than amending Chapter 271, Local Government Code, to add a section which would permit municipalities to use commercial paper in lieu of certificates of obligation if such use is found by the governing body of the municipality to constitute "an economic benefit" to the municipality.