| TO: | Honorable Vicki Truitt, Chair, House Committee on Pensions, Investments & Financial Services |
| FROM: | John S. O'Brien, Director, Legislative Budget Board |
| IN RE: | SB2064 by West (Relating to the issuance of state and local government securities, including the powers and duties of the Bond Review Board and the issuance of private activity bonds. ), Committee Report 2nd House, Substituted |
The bill would allow the Bond Review Board (BRB) to enter into a contract for services related to the collection and maintenance of information on the indebtedness of local governments related to a statistical report. The bill would change the submission date of the statistical report to no later than December 31 of each even-numbered year.
The bill would change the submission date for the Debt Affordability Study to February 15 of each year.
The bill would include multiple facilities in the definition of a project that would be proposed to be financed by an issue of private activity bonds and provides that applications may include multiple facilities in multiple jurisdictions only for applications for the financing of sewage facilities, solid waste disposal facilities, and qualified hazardous waste facilities. The bill would also allow the number of facilities to be reduced as needed without affecting status as a project for the purposes of the application.
The bill would require the nonrefundable fee of $500 for each facility included in the project application for a reservation or a carryforward designation of state ceiling. According to the Bond Review Board (BRB), it is expected that the number of applications would decrease and would be offset by an equal increase of facilities within an application. Therefore no significant fiscal impact is expected. However, it is expected that the total project cost per application would increase and could potentially decrease the amount of closing costs collected for each private activity bond transaction. Based on historical closing costs and amounts for each private activity bond transaction, the Bond Review Board estimates less than $12,000 per fiscal year in closing costs would be lost due to the requirements of the bill.
The bill would require an issuer to pay a non-refundable fee of $500 before receiving a certain carryforward designation. According to the Bond Review Board, approximately 15 carryforward applications that would be applicable to this fee are received each fiscal year. Based on this volume, the new fee would generate approximately $7,500 in fees each fiscal year of 2010-11 biennium to the credit of the General Revenue Fund.
The bill would authorize the Bond Review Board to administer the allocation of miscellaneous bond ceiling authorized by the federal government by the Housing and Economic Recovery Act of 2008, Heartland Disaster Tax Relief Act of 2008, or by the American Recovery and Reinvestment Act of 2009.
The bill would repeal Government Code 1372.0235 relating to ceiling set-aside for the Texas Agriculture Finance Authority.
The bill would amend the Government Code relating to the duties and programs of the Texas Department of Housing and Community Affairs. Based on the analysis of the agency, duties and responsibilities associated with implementing the provisions of the bill could be accomplished by utilizing existing resources.
The bill would take effect immediately if it receives a vote of two-thirds of all the members elected to each house, otherwise, the bill would take effect September 1, 2009.
It is assumed that any additional duties and responsibilities required by the bill could be absorbed within existing resources.
| Source Agencies: | 352 Bond Review Board, 332 Department of Housing and Community Affairs
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| LBB Staff: | JOB, JRO, MN, EP
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