HBA-JLV S.B. 827 77(R)    BILL ANALYSIS


Office of House Bill AnalysisS.B. 827
By: Duncan
Land & Resource Management
3/23/2001
Engrossed



BACKGROUND AND PURPOSE 

Currently, rural municipalities and counties are not expressly authorized
to sell anticipation notes to the Texas Agricultural Finance Authority
(authority).  These entities must issue municipal bonds for even small loan
amounts, and the bond issuance process creates expenses for the political
subdivision and requires review by the Texas attorney general.  The sale of
anticipation notes may facilitate economic development in these
municipalities and counties by providing the political subdivisions with a
simple and cost-effective means to borrow small amounts of money.  Senate
Bill 827 authorizes these municipalities and counties to sell anticipation
notes to the authority.  

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

Senate Bill 827 amends the Government Code to authorize a county or
municipality (issuer) participating in a rural economic development plan
established by the Texas Agricultural Finance Authority to sell to the
authority an anticipation note issued for a specified purpose, provided
that the note matures before the 30th anniversary of the date the note is
issued. Anticipation notes issued by a single issuer under this Act in an
aggregate original principal amount of not more than $500,000 are not
subject to the approval of the attorney general or examination and
registration of public securities. The bill authorizes an issuer to issue
anticipation notes for rural economic development for the same purpose not
more than once in any 12month period.  

EFFECTIVE DATE

On passage, or if the Act does not receive the necessary vote, the Act
takes effect September 1, 2001.