HB 3772

85(R) - 2017
House Economic & Small Business Development
House Economic & Small Business Development
Economic Development

Vote Recommendation

  • Negative
  • Neutral
  • Neutral
  • Negative
  • Negative


Angie Chen Button

Bill Caption

Relating to operation of the Texas leverage fund program administered by the Texas Economic Development Bank.

Fiscal Notes

Estimated Two-year Net Impact to General Revenue Related Funds for HB3772, Committee Report 1st House, Substituted: a negative impact of ($4,259,000) through the biennium ending August 31, 2019.

The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.

Bill Analysis

HB 3772 would create the Texas leverage fund outside the state treasury by the comptroller as trustee.

The fund would consist of:
  • proceeds from the issuance of revenue-based obligations;
  • payments of principal and interest on loans;
  • loan origination fees;
  • investment earnings;
  • and other funds.

They may only be used to:

  • make loans to economic development corporations;
  • pay the costs of administering the program;
  • pay the principal and interest on the obligations; and
  • any other authorized purpose.
This bill would limit the type of obligations that could be issued and would establish certain requirements relating to the issuance and refunding of bonds. Certain limits would also be placed on the usage of the bond proceeds, and bonds would be defined as legal investments for fiduciaries and other persons. 

Vote Recommendation Notes

Economic development programs and funds are examples of central planning, as the government uses taxpayer dollars to incentivize and encourage growth in specific industries, irrespective of the free market. Not only does this disrupt the market, it can have negative unintended consequences on other affiliated industries and is not an essential use of taxpayer dollars. This violates our principles of limited government, free markets, and individual liberty, so for these reasons, we oppose this legislation.