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.