HBA-EDN C.S.H.B. 3329 77(R)BILL ANALYSIS


Office of House Bill AnalysisC.S.H.B. 3329
By: Averitt
Financial Institutions
4/16/2001
Committee Report (Substituted)



BACKGROUND AND PURPOSE 

Federal law limits the amount of tax-exempt financing that may be used to
benefit private entities or individuals each year and authorizes each state
to allocate this money through a private activity bond allocation program
(program).  The United States Congress has set the state ceiling on bonds
for fiscal years 2001 and 2002.  C.S.H.B. 3329 dedicates a portion of the
state ceilings available exclusively for reservations by issuers of
qualified small issue bonds and enterprise zone facility bonds for a
limited time to the Texas Agricultural Finance Authority for the purpose of
issuing such bonds in rural areas of the state and provides that current
provisions regarding private activity bonds expire September 1, 2003.   

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

ANALYSIS

C.S.H.B. 3329 amends the Government Code to provide that until June 1, of
that portion of the state ceiling that is available exclusively for
reservations by issuers of qualified small issue bonds and enterprise zone
facility bonds, one-third is available exclusively to the Texas
Agricultural Finance Authority (TAFA) for the purpose of issuing such bonds
in rural areas of the state.  The bill provides that TAFA is exempt from
the requirement that an issuer of bonds provide a statement on an
application for reservation that bonds are not being issued for the same
stated project for which the issuer has received sufficient carryforward
during a previous year or for which there exists unexpended proceeds from
one or more prior issues of bonds issued by the same issuer or based on the
issuer's population.      

C.S.H.B. 3329 provides that the existing state ceiling rates for the
private activity bond allocation program expire September 1, 2003.   

EFFECTIVE DATE

September 1, 2001. 

COMPARISON OF ORIGINAL TO SUBSTITUTE

C.S.H.B. 3329 modifies the original by removing a provision that
established new state ceiling provisions for the private activity bond
allocation program.  The substitute provides that the current provisions
expire September 1, 2003.  The substitute  dedicates a portion of these
state ceilings to the Texas Agricultural Finance Authority for a limited
time for the purpose of issuing qualified small issue bonds and enterprise
zone facility bonds in rural areas of the state.