BILL ANALYSIS C.S.H.B. 4993 By: Paul International Relations & Economic Development Committee Report (Substituted) BACKGROUND AND PURPOSE The Gulf Coast Authority was created in 1969 by the Texas Legislature with the primary focus of protecting the waters of Texas. In 1979, the authority's role evolved to include providing the financing necessary to build the infrastructure for waste, wastewater, and water treatment facilities. Today, the authority serves as a conduit financing authority for the issuance of private activity bonds for qualified projects that support Texas' economic development. The authority's ability to issue taxable and tax-exempt bonds for eligible projects allows the authority to provide safe, reliable, cost-effective, and compliant services for a broad range of industrial and municipal customers statewide. Recently, the authority has been approached by industries to help provide additional conduit financing supported by user fees for a variety of other uses, primarily focused on produced waters, renewables, and at-large energy transition projects. With Texas, the energy capital of the world, positioning itself to make sweeping changes to use produced waters as a potential source of future water supply, the authority offers a viable financial solution to support industries as new and improved technologies become available. C.S.H.B. 4993 authorizes a development corporation created by the authority to serve as a conduit financer for certain projects and streamlines approvals for out-of-state financings. CRIMINAL JUSTICE IMPACT It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution. ANALYSIS C.S.H.B. 4993 amends Chapter 409 (S.B. 225), Acts of the 61st Legislature, Regular Session, 1969, to authorize a development corporation created by the Gulf Coast Authority under the Development Corporation Act to finance projects located inside or outside Texas that acquire, construct, equip, renovate, improve, or refinance the following: educational and housing facilities in the same manner as a higher education facility authority under the Higher Education Facility Authority for Private Schools Act; health facilities in the same manner as development corporations under the Health Facilities Development Act; facilities or activities of a 501(c)(3) tax exempt organization; hotels, including convention center facilities or convention center complexes primarily used to host conventions and meetings: and storage infrastructure and related facilities for energy and alternative energy production or carbon capture. These projects are each authorized projects under the Development Corporation Act. C.S.H.B. 4993 requires a development corporation created by the Gulf Coast Authority that issues a public security for an out-of-state project of the development corporation to submit to the attorney general a resolution approving the public security and a detailed description of the proposed project and financing for the project. The bill establishes that a public security issued by the development corporation for a project located outside of Texas or a contract supporting the public security are not subject to review and approval by the attorney general if the attorney general does not request in writing the submission of the record of proceedings relating to the authorization of the public security within 12 business days from the date the attorney general receives the resolution and detailed description. C.S.H.B. 4993 exempts a development corporation created by the Gulf Coast Authority from certain provisions under the Development Corporation Act relating to corporate powers and limitations regarding bonds and administration by the Texas Economic Development and Tourism Office (TEDTO). EFFECTIVE DATE On passage, or, if the bill does not receive the necessary vote, September 1, 2023. COMPARISON OF INTRODUCED AND SUBSTITUTE While C.S.H.B. 4993 may differ from the introduced in minor or nonsubstantive ways, the following summarizes the substantial differences between the introduced and committee substitute versions of the bill. The substitute does not include the following provisions present in the introduced: an authorization for a development corporation created by the Gulf Coast Authority to issue and execute bonds, notes, or other obligations to provide funds for borrowers to acquire, construct, enlarge, extend, repair, renovate, or improve facilities located inside or outside Texas, acquire land to be used for such purposes, and create an operating or debt service reserve to pay the issuance costs related to the bonds, notes, or other obligations; and a requirement for TEDTO, for a project located outside of Texas, to evaluate the direct or indirect contribution to the economic growth or stability of the authority that results from the development corporation's financing and the project's promotion of or impact on commerce where the project is located in order to determine whether a project meets specified approval standards adopted under the Development Corporation Act. Whereas the introduced authorized the development corporation to finance projects located inside or outside Texas that acquire, construct, provide, improve, finance, or refinance the following: public education and public health care facilities; facilities or activities of a 501(c)(3) tax exempt organization; hotels, student housing, or assisted living facilities to provide housing; broadband infrastructure; and alternative energy and carbon sequestration facilities to assist in the transition to and diversification of clean energy, the substitute authorizes the development corporation to finance projects located inside or outside Texas that acquire, construct, equip, renovate, improve, or refinance the following: educational and housing facilities in the same manner as a higher education facility authority under the Higher Education Facility Authority for Private Schools Act; health facilities in the same manner as development corporations under the Health Facilities Development Act; facilities or activities of a 501(c)(3) tax exempt organization; hotels, including convention center facilities or convention center complexes primarily used to host conventions and meetings; and storage infrastructure and related facilities for energy and alternative energy production or carbon capture. The substitute includes the following provisions absent from the introduced: a requirement for a development corporation that issues a public security for an out-of-state project to submit to the attorney general a resolution approving the public security and a detailed description of the proposed project and financing for the project; a provision establishing that a public security issued by the development corporation for a project located outside of Texas or a contract supporting the public security are not subject to review and approval by the attorney general if the attorney general does not request the submission of the record of proceedings relating to the authorization of the public security within a certain period; and a provision exempting the development corporation from certain provisions under the Development Corporation Act.
BILL ANALYSIS
# BILL ANALYSIS
C.S.H.B. 4993
By: Paul
International Relations & Economic Development
Committee Report (Substituted)
C.S.H.B. 4993
By: Paul
International Relations & Economic Development
Committee Report (Substituted)
BACKGROUND AND PURPOSE The Gulf Coast Authority was created in 1969 by the Texas Legislature with the primary focus of protecting the waters of Texas. In 1979, the authority's role evolved to include providing the financing necessary to build the infrastructure for waste, wastewater, and water treatment facilities. Today, the authority serves as a conduit financing authority for the issuance of private activity bonds for qualified projects that support Texas' economic development. The authority's ability to issue taxable and tax-exempt bonds for eligible projects allows the authority to provide safe, reliable, cost-effective, and compliant services for a broad range of industrial and municipal customers statewide. Recently, the authority has been approached by industries to help provide additional conduit financing supported by user fees for a variety of other uses, primarily focused on produced waters, renewables, and at-large energy transition projects. With Texas, the energy capital of the world, positioning itself to make sweeping changes to use produced waters as a potential source of future water supply, the authority offers a viable financial solution to support industries as new and improved technologies become available. C.S.H.B. 4993 authorizes a development corporation created by the authority to serve as a conduit financer for certain projects and streamlines approvals for out-of-state financings.
CRIMINAL JUSTICE IMPACT It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.
RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.
ANALYSIS C.S.H.B. 4993 amends Chapter 409 (S.B. 225), Acts of the 61st Legislature, Regular Session, 1969, to authorize a development corporation created by the Gulf Coast Authority under the Development Corporation Act to finance projects located inside or outside Texas that acquire, construct, equip, renovate, improve, or refinance the following: educational and housing facilities in the same manner as a higher education facility authority under the Higher Education Facility Authority for Private Schools Act; health facilities in the same manner as development corporations under the Health Facilities Development Act; facilities or activities of a 501(c)(3) tax exempt organization; hotels, including convention center facilities or convention center complexes primarily used to host conventions and meetings: and storage infrastructure and related facilities for energy and alternative energy production or carbon capture. These projects are each authorized projects under the Development Corporation Act. C.S.H.B. 4993 requires a development corporation created by the Gulf Coast Authority that issues a public security for an out-of-state project of the development corporation to submit to the attorney general a resolution approving the public security and a detailed description of the proposed project and financing for the project. The bill establishes that a public security issued by the development corporation for a project located outside of Texas or a contract supporting the public security are not subject to review and approval by the attorney general if the attorney general does not request in writing the submission of the record of proceedings relating to the authorization of the public security within 12 business days from the date the attorney general receives the resolution and detailed description. C.S.H.B. 4993 exempts a development corporation created by the Gulf Coast Authority from certain provisions under the Development Corporation Act relating to corporate powers and limitations regarding bonds and administration by the Texas Economic Development and Tourism Office (TEDTO).
EFFECTIVE DATE On passage, or, if the bill does not receive the necessary vote, September 1, 2023.
COMPARISON OF INTRODUCED AND SUBSTITUTE While C.S.H.B. 4993 may differ from the introduced in minor or nonsubstantive ways, the following summarizes the substantial differences between the introduced and committee substitute versions of the bill. The substitute does not include the following provisions present in the introduced: an authorization for a development corporation created by the Gulf Coast Authority to issue and execute bonds, notes, or other obligations to provide funds for borrowers to acquire, construct, enlarge, extend, repair, renovate, or improve facilities located inside or outside Texas, acquire land to be used for such purposes, and create an operating or debt service reserve to pay the issuance costs related to the bonds, notes, or other obligations; and a requirement for TEDTO, for a project located outside of Texas, to evaluate the direct or indirect contribution to the economic growth or stability of the authority that results from the development corporation's financing and the project's promotion of or impact on commerce where the project is located in order to determine whether a project meets specified approval standards adopted under the Development Corporation Act. Whereas the introduced authorized the development corporation to finance projects located inside or outside Texas that acquire, construct, provide, improve, finance, or refinance the following: public education and public health care facilities; facilities or activities of a 501(c)(3) tax exempt organization; hotels, student housing, or assisted living facilities to provide housing; broadband infrastructure; and alternative energy and carbon sequestration facilities to assist in the transition to and diversification of clean energy, the substitute authorizes the development corporation to finance projects located inside or outside Texas that acquire, construct, equip, renovate, improve, or refinance the following: educational and housing facilities in the same manner as a higher education facility authority under the Higher Education Facility Authority for Private Schools Act; health facilities in the same manner as development corporations under the Health Facilities Development Act; facilities or activities of a 501(c)(3) tax exempt organization; hotels, including convention center facilities or convention center complexes primarily used to host conventions and meetings; and storage infrastructure and related facilities for energy and alternative energy production or carbon capture. The substitute includes the following provisions absent from the introduced: a requirement for a development corporation that issues a public security for an out-of-state project to submit to the attorney general a resolution approving the public security and a detailed description of the proposed project and financing for the project; a provision establishing that a public security issued by the development corporation for a project located outside of Texas or a contract supporting the public security are not subject to review and approval by the attorney general if the attorney general does not request the submission of the record of proceedings relating to the authorization of the public security within a certain period; and a provision exempting the development corporation from certain provisions under the Development Corporation Act.
BACKGROUND AND PURPOSE
The Gulf Coast Authority was created in 1969 by the Texas Legislature with the primary focus of protecting the waters of Texas. In 1979, the authority's role evolved to include providing the financing necessary to build the infrastructure for waste, wastewater, and water treatment facilities. Today, the authority serves as a conduit financing authority for the issuance of private activity bonds for qualified projects that support Texas' economic development. The authority's ability to issue taxable and tax-exempt bonds for eligible projects allows the authority to provide safe, reliable, cost-effective, and compliant services for a broad range of industrial and municipal customers statewide. Recently, the authority has been approached by industries to help provide additional conduit financing supported by user fees for a variety of other uses, primarily focused on produced waters, renewables, and at-large energy transition projects. With Texas, the energy capital of the world, positioning itself to make sweeping changes to use produced waters as a potential source of future water supply, the authority offers a viable financial solution to support industries as new and improved technologies become available. C.S.H.B. 4993 authorizes a development corporation created by the authority to serve as a conduit financer for certain projects and streamlines approvals for out-of-state financings.
CRIMINAL JUSTICE IMPACT
It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.
RULEMAKING AUTHORITY
It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.
ANALYSIS
C.S.H.B. 4993 amends Chapter 409 (S.B. 225), Acts of the 61st Legislature, Regular Session, 1969, to authorize a development corporation created by the Gulf Coast Authority under the Development Corporation Act to finance projects located inside or outside Texas that acquire, construct, equip, renovate, improve, or refinance the following:
educational and housing facilities in the same manner as a higher education facility authority under the Higher Education Facility Authority for Private Schools Act;
health facilities in the same manner as development corporations under the Health Facilities Development Act;
facilities or activities of a 501(c)(3) tax exempt organization;
hotels, including convention center facilities or convention center complexes primarily used to host conventions and meetings: and
storage infrastructure and related facilities for energy and alternative energy production or carbon capture.
These projects are each authorized projects under the Development Corporation Act.
C.S.H.B. 4993 requires a development corporation created by the Gulf Coast Authority that issues a public security for an out-of-state project of the development corporation to submit to the attorney general a resolution approving the public security and a detailed description of the proposed project and financing for the project. The bill establishes that a public security issued by the development corporation for a project located outside of Texas or a contract supporting the public security are not subject to review and approval by the attorney general if the attorney general does not request in writing the submission of the record of proceedings relating to the authorization of the public security within 12 business days from the date the attorney general receives the resolution and detailed description.
C.S.H.B. 4993 exempts a development corporation created by the Gulf Coast Authority from certain provisions under the Development Corporation Act relating to corporate powers and limitations regarding bonds and administration by the Texas Economic Development and Tourism Office (TEDTO).
EFFECTIVE DATE
On passage, or, if the bill does not receive the necessary vote, September 1, 2023.
COMPARISON OF INTRODUCED AND SUBSTITUTE
While C.S.H.B. 4993 may differ from the introduced in minor or nonsubstantive ways, the following summarizes the substantial differences between the introduced and committee substitute versions of the bill.
The substitute does not include the following provisions present in the introduced:
an authorization for a development corporation created by the Gulf Coast Authority to issue and execute bonds, notes, or other obligations to provide funds for borrowers to acquire, construct, enlarge, extend, repair, renovate, or improve facilities located inside or outside Texas, acquire land to be used for such purposes, and create an operating or debt service reserve to pay the issuance costs related to the bonds, notes, or other obligations; and
a requirement for TEDTO, for a project located outside of Texas, to evaluate the direct or indirect contribution to the economic growth or stability of the authority that results from the development corporation's financing and the project's promotion of or impact on commerce where the project is located in order to determine whether a project meets specified approval standards adopted under the Development Corporation Act.
Whereas the introduced authorized the development corporation to finance projects located inside or outside Texas that acquire, construct, provide, improve, finance, or refinance the following:
public education and public health care facilities;
facilities or activities of a 501(c)(3) tax exempt organization;
hotels, student housing, or assisted living facilities to provide housing;
broadband infrastructure; and
alternative energy and carbon sequestration facilities to assist in the transition to and diversification of clean energy,
the substitute authorizes the development corporation to finance projects located inside or outside Texas that acquire, construct, equip, renovate, improve, or refinance the following:
educational and housing facilities in the same manner as a higher education facility authority under the Higher Education Facility Authority for Private Schools Act;
health facilities in the same manner as development corporations under the Health Facilities Development Act;
facilities or activities of a 501(c)(3) tax exempt organization;
hotels, including convention center facilities or convention center complexes primarily used to host conventions and meetings; and
storage infrastructure and related facilities for energy and alternative energy production or carbon capture.
The substitute includes the following provisions absent from the introduced:
a requirement for a development corporation that issues a public security for an out-of-state project to submit to the attorney general a resolution approving the public security and a detailed description of the proposed project and financing for the project;
a provision establishing that a public security issued by the development corporation for a project located outside of Texas or a contract supporting the public security are not subject to review and approval by the attorney general if the attorney general does not request the submission of the record of proceedings relating to the authorization of the public security within a certain period; and
a provision exempting the development corporation from certain provisions under the Development Corporation Act.