The House Committee on Investments & Financial Services met on April 11 to take up HB 3336, relating to general obligation bonds issued by political subdivisions, among other issues. The report below covers only the discussion over HB 3336.
HB 3336 (Murphy) Relating to general obligation bonds issued by political subdivisions.
Rep. Murphy
- Bill on debt issuance and how we issue the bonds
- To better inform voters, make sure that elections are fair, and insure that taxpayers money is used responsibly
- Increases transparency to make them post their sample ballots, so that voters can know what they will see in the booth
- Polling places cannot be used to influence election
- The term of a bond is tied to the useful life of the product
- If the subdivision has unspent proceeds from the issuance, this bill requires the fund to be spent for the specific purpose or to retie the bond obligation.
- If the county wants use the money for some other purpose, then they must submit that proposition at an election to get approval
- CS – polling places are established not to influence an election, alters bond term language to track federal regulations
- Stephenson – if x dollars being spent, what if the next election they keep saying next election, next election so they keep benefitting off the interest’
- I have not come up with a way to address this. If you finance a new football stadium, you cannot use that money
- Stephenson – If you wait till the next election, then the next election, you have a CD that you’re earning money even though you’re not spending
- The inflation rate of construction costs is growing faster than anything in that you could get out of a CD, so you would do better withdrawing it
- Stephenson – There should be a time limit where you have to do one of the two
- Sure. We don’t have a time limit though.
James Quintero – Texas Public Policy Foundation (For)
- We view the growth of local government debt as the biggest policy problem
- Local debt outstanding is 218.5 billion
- Will do a lot to address the swell of debt
- Texas ranks as 2nd for local debt per capita
- This will protect the taxpayer
Trey Lary – Allen Boone Humphries Robinson LLP (For)
- This will improve public policy
- Supports these good government changes
Rep. Murphy closes
- Some political subdivisions are worried that they must have elections to move money from point A to point B; this is a small price for accountability
- Elections happen very often, so this would only be a line on a ballot; this would not make another election
- We are going to look into code and see what it says about revenue bonds
CS withdrawn, HB 3336 left pending