BILL ANALYSIS

S.B. 1546

By: Bettencourt

County Affairs

Committee Report (Unamended)

BACKGROUND AND PURPOSE

Special districts are political subdivisions of the state that are created under special or general law to serve specific and local purposes. However, some special districts have begun to exercise their rights and powers well outside of their boundaries. S.B. 1546 seeks to address this issue by prohibiting the exercise of certain rights and powers outside district boundaries.

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

S.B. 1546 amends the Government Code to prohibit the following on or after September 1, 2023:

· a special district or a corporation created by a special district from acquiring, purchasing, constructing, rehabilitating, renovating, repairing, equipping, furnishing, financing, owning, or leasing a multifamily residential development located outside the district's boundaries; and

· a corporation created by a special district from granting a leasehold or other possessory interest in real property outside the district's boundaries to a private entity if the leasehold or other interest would result in an exemption from property taxation under specified taxation provisions of the Public Facility Corporation Act for the private entity.

The bill voids a contract, agreement, or action of a special district or a corporation created by a special district that violates the bill's prohibition.

S.B. 1546 establishes that its provisions prevail over a special law governing a special district and do not diminish or impair the rights of the holders of any outstanding and unpaid debts, bonds, warrants, or other obligations of a special district or a corporation created by a special district. The bill authorizes a special district or a corporation created by a special district, after September 1, 2023, to continue to exercise a right or power prohibited by the bill outside the district as provided by other law only as necessary to pay or fulfill any outstanding and unpaid debts, bonds, warrants, or other obligations.

S.B. 1546 defines the following terms by reference for purposes of its provisions:

· "corporation" as a public facility corporation created and existing under the Public Facility Corporation Act;

· "special district" as the following:

o a district created under applicable constitutional provisions;

o a hospital district or authority; or

o a junior college district authorized by applicable statutory provisions; and

· "private entity" as any individual person, corporation, general partnership, limited liability company, limited partnership, joint venture, business trust, public benefit corporation, nonprofit entity, or other business entity.

EFFECTIVE DATE

On passage, or, if the bill does not receive the necessary vote, September 1, 2023.