Texas House Bill HB2738

Texas 2009 - 81st Regular

• Out of House Committee: 4/21/09

Caption

Relating to the pledge of certain revenue of a regional transportation authority to the payment of bonds.

Impact

The changes proposed in HB2738 are significant for regional transportation authorities since they enhance their ability to manage revenue more flexibly and reliably. By explicitly stating that the pledged revenue can be a first lien, the bill aims to improve bond market access, thereby enabling authorities to fund infrastructure projects that directly benefit public transport systems. This financial assurance is meant to attract more investors, resulting in a more robust transportation network. Overall, the bill could support the enhancement or expansion of transportation services across the state.

Summary

House Bill 2738 seeks to amend the Transportation Code regarding the financial obligations of regional transportation authorities concerning the pledge of revenue. The bill allows such authorities to pledge various sources of revenue, including tax income they impose, public transportation system revenue, as well as federal grants, to secure the payment of bonds. A notable addition is that the pledged revenue from taxes or the transportation system is designated as a first lien, offering greater security for bondholders and potentially lowering the cost of borrowing for the authority.

Contention

While the bill is generally positioned as a benefit for regional transportation authorities and their financial stability, concerns may arise from how these changes could affect local governance and funding priorities. Critics might argue that prioritizing bond repayment and security via such pledges could limit funds available for essential transportation operations or maintenance costs. Additionally, some stakeholders may call for transparency on how the funds will be utilized, emphasizing the need for oversight in the diversion of revenue which might otherwise be allocated to critical transport services.