Tuesday, August 13, 2013

Texas 83rd -- Last Acts of Congress

On August 5, 2013, the Texas 83rd Legislature's 2nd Special Session concluded its mandatory business. There were three main issues the special session was to consider.

The considerations that took the longest to deliberate and accomplish were the first filed in the special session. They revolved around the Texas budget and transportation spending.

Here is what Governor Rick Perry had to say on the bills' passage:

"Today's action by the Texas Legislature moves our state closer to securing a strong economy well into the future by providing more resources for building and maintaining a transportation system that will keep our economy growing and our population moving. Just as important is the fact that we are increasing funding for transportation without raising taxes, which sends an incredibly strong message that Texas is committed to keeping the wheels of commerce turning, while protecting taxpayers."

HB 1 is a law written to fund highway an road repair and construction as well as port security. The bill is an effort to reduce public debt by significantly paying down both principle and interest on bonds and securities the state sold to fund many projects. It proposes to do so mainly through transferring surplus funds from other accounts. The funds, from taxes and other previous bond sales, would be re-disbursed and allocated, sort of like debt consolidation efforts in the private sector.

      Sec. 222.0031.  REQUIRED REPAYMENT OF BONDS. (a) On or before August 31, 2015, the department shall identify and implement savings and efficiencies that result in a total savings of at least $100 million in funds appropriated to the department for the state fiscal biennium ending August 31, 2015. The amount saved is appropriated for the state fiscal biennium ending August 31, 2015, to the department from the source from which the money was originally appropriated for the purpose of reducing the principal of and interest on bonds and other public securities issued, and bond enhancement agreements entered into, by the commission as authorized by Section 49-n, Article III, Texas Constitution, as proposed by H.J.R. 28, 78th Legislature, Regular Session, 2003. 
       (b)  To make payments required under Subsection (a), the department: 
             (1)  shall maximize the use of all amounts appropriated to the department; 
             (2)  may use savings realized through operational efficiencies, cost reductions, and cost savings; and
             (3)  may not reduce the amount of funding available for transportation projects.
       (c)  Not later than August 31, 2015, the department shall report in writing to the legislature on the implementation of this section.
       (d)  This section expires September 1, 2015.

The bill also authorizes other fund-shifting and re-allocations, particularly from the state's Economic Stabilization Fund. Read HB 1 in its entirety to see all the various provisions and committee requirements.

Those familiar with the Texas State Constitution may find this bill dances close to unconstitutionality.

HB 1 is set to go into effect upon the ratification of SJR 1.

SJR 1 is a proposed amendment to the Texas State Constitution which will allow for HB 1. The proposed amendment passed both houses of the Texas Legislature and is set for ratification in November 4, 2014. On that election day (the upcoming "midterms"), registered Texas voters will decide if the amendment and the companion law will go into effect. Read SJR 1 in its final form, as it will be voted upon, here.

       TEMPORARY PROVISION. (a)  This temporary provision applies to the constitutional amendment proposed by the 83rd Legislature, 3rd Called Session, 2013, to provide for the transfer of certain general revenue to the economic stabilization fund and to the state highway fund and for the dedication of the revenue transferred to the state highway fund.
       (b)  The amendment to Section 49-g, Article III, of this constitution takes effect immediately on the final canvass of the election on the amendment. If, between September 1, 2014, and the effective date of that constitutional amendment, the comptroller of public accounts has transferred from general revenue to the economic stabilization fund amounts in accordance with Subsections (c), (d), and (e) of that section, as those subsections existed at the time of the transfer, as soon as practicable after the effective date of the amendment, the comptroller shall return the transferred amounts from the economic stabilization fund to general revenue and transfer from general revenue to the economic stabilization fund and the state highway fund amounts in accordance with the amended provisions and in accordance with general law, notwithstanding the requirement of Subsection (c) of that section that the transfers for that fiscal year be made before the 90th day of the fiscal year beginning September 1, 2014. 
       (c)  This temporary provision expires January 1, 2017.

Both bills provide for temporary measures pending the ratification of the amendment and full enactment of HB 1. Between Sept. 1, 2014 and Jan. 1, 2017, certain funds can, legally, be transferred. However, once the two become fully effective, the amounts of those funds previously transferred must be returned to their appropriate funds.

Keep informed, up to date on the information, and make an educated decision come Nov. 4, 2014. The fiscal future of the Republic of Texas is now in the hands of voters.