BILL ANALYSIS

Senate Research Center	C.S.S.B. 1546
88R24334 MCF-D	By: Bettencourt
	Local Government
	5/2/2023
	Committee Report (Substituted)

AUTHOR'S / SPONSOR'S STATEMENT OF INTENT

Special districts are political subdivisions of the State that are created for special purposes by local law or under general law.  When special districts are created, they are created for a specific or local reason.  Some special districts have begun exercising rights and powers granted to them by special or general law, well outside of the district's boundaries.

S.B. 1546 seeks to restrict a special district's rights and powers to the jurisdictional boundaries of the special district.

(Original Author's/Sponsor's Statement of Intent)

C.S.S.B. 1546 amends current law relating to the authority of certain special districts and corporations created by certain special districts to exercise certain rights and powers outside district boundaries.

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Subtitle Z, Title 10, Government Code, by adding Chapter 3001, as follows:

CHAPTER 3001. LIMITATION OF RIGHTS AND POWERS OF CERTAIN SPECIAL

DISTRICTS AND CORPORATIONS

Sec. 3001.001. DEFINITIONS. Defines "corporation," "special district," and "private entity."

Sec. 3001.002. CERTAIN RIGHTS AND POWERS LIMITED TO BOUNDARIES. (a) Provides that notwithstanding any other law and except as provided by Subsection (d), on or after September 1, 2023:

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

(2) a corporation created by a special district is prohibited 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 ad valorem taxation under Section 303.042 (Taxation), Local Government Code, for the private entity.

(b) Provides that a contract, agreement, or action of a special district or a corporation created by a special district that violates Subsection (a) is void.

(c) Provides that this section prevails over a special law governing a special district.

(d) Provides that this chapter does 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. 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 Subsection (a) 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.

SECTION 2. Effective date: upon passage or September 1, 2023.