Texas Senate Bill SB706

Texas 2011 - 82nd Regular

• Introduced: 2/15/11
• Refer: 2/23/11

Caption

Relating to the approval and issuance of tax and revenue anticipation notes.

Impact

The introduction of SB706 is expected to enhance the state's cash flow management capabilities by clarifying the approval process for revenue anticipation notes. By requiring a detailed cash flow forecast and public hearings, the bill seeks to ensure that the issuance of notes aligns with actual financial needs, potentially leading to more judicious use of state funds. This could help prevent overspending and maintain fiscal responsibility during periods of economic shortfalls, thus contributing to more stable financial planning within the state government.

Summary

SB706 aims to establish a clear procedure for the approval and issuance of tax and revenue anticipation notes in Texas. It amends Section 404.124 of the Government Code, requiring the comptroller to submit a forecast of anticipated revenue shortfalls before issuing notes. This forecast is intended to provide a detailed monthly breakdown of estimated revenues and expenditures while reflecting the state's overall economic condition. Additionally, the bill mandates that the committee holds public hearings to solicit testimony on the forecast, ensuring transparency in the process of authorizing these financial instruments.

Sentiment

Overall sentiment surrounding SB706 appears to be positive, with stakeholders recognizing the importance of having a transparent and accountable framework for the issuance of tax anticipation notes. Legislative discussions suggest that the bill stands to improve financial oversight and discipline within the state government, with support coming from various economic and fiscal management advocates. However, some concerns may arise regarding the logistics of public hearings and the potential delays this could introduce in urgent funding situations, although these issues were not prominently highlighted in the discussions accessed.

Contention

One point of contention that may surface pertains to the timeline and approval process outlined in the bill. Critics may voice concerns over the expedited nature of the approvals, particularly as the committee's approval is only valid for 61 days post-hearing. This could lead to bottlenecks if revenue shortfalls occur promptly after the approval period. Furthermore, the ongoing necessity for reapproval based on updated forecasts might be seen as an additional layer of bureaucracy, complicating the quick mobilization of necessary funds, especially in times of economic distress.