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Estimated Two-year Net Impact to General Revenue Related Funds for SB 132, As Engrossed:
an impact of $0 through the biennium ending August 31, 2021.
The bill would make no appropriation but could provide the legal basis for an appropriation of
funds to implement the provisions of the bill.
SB 132 would extend the Texas Leverage Fund commercial paper note program currently within the Texas Economic Development Bank (TEDB). This program is currently set to expire in 2022.
The Texas Leverage Fund is an existing economic development program that would make loans to economic development corporations for eligible projects, pay the bank's necessary and reasonable costs of administering the program, pay the principal of and interest on bonds, and pay reasonable fees and costs incurred by the bank in administering the leverage fund. The bill would authorize the TEDB to issue, sell, and retire bonds, including obligations in the form of commercial paper, to provide funding for economic development purposes. Also, the bill authorizes the Texas Leverage Fund to continue as established by the 1992 master resolution of the Texas Department of Commerce.
Texas Action recommends opposing SB 132 because it violates our principles of free markets and limited government. Granting loans to economic development corporations to use for corporate welfare distorts the marketplace, and picks winners and losers. We would prefer to see this program expire altogether.
To quote the economic historian Eli Heckscher: "Either a company is viable, and then it doesn't need government support; or it's not viable, and then it doesn't deserve government support."