SRC-VRA S.C.R. 6 78(R)   BILL ANALYSIS


Senate Research Center   S.C.R. 6
By: Averitt
Intergovernmental Relations
2/20/2003
As Filed


DIGEST

Current federal tax provisions place an arbitrary state cap on the volume
of private activity bonds, which hinders the ability of Texas to meet its
rapidly growing water infrastructure needs and private activity bonds
afford a cost-effective, nonrecourse means of financing the development of
adequate wastewater and drinking water facilities for the future and
minimize the risk to the ratepayer.  Other sources of municipal
infrastructure financing, such as general obligation bonds, revenue bonds,
and loans under the federal Environmental Protection Agency's state
revolving loan fund program, are insufficient to allow Texas to comply
with new federal environmental and public health mandates.  The cap on the
volume of private activity bonds forces water and wastewater projects to
compete with other projects in Texas without regard to the urgent priority
of protecting public health and the environment.  Removing the financing
cap would give public officials the maximum number of tools for meeting
the growing public demand for water services while ensuring compliance
with federal environmental and public health laws. 

PURPOSE 

As proposed, S.C.R. 6 submits the following resolutions:

Resolves the 78th Legislature of the State of Texas respectfully urge the
Congress of the United States to amend the Internal Revenue code of 1986
to provide that the volume cap for private activity bonds not apply to
bonds for water and wastewater facilities and requires that the Texas
secretary of state forward official copies of this resolution to the
president of the United States, to the speaker of the house of
representatives and the president of the senate of the United States
Congress, and to all members of the Texas delegation to the congress with
the request that this resolution be officially entered in the
congressional Record as a memorial to the Congress of the United States of
America.