1-1 By: Turner S.B. No. 1237 1-2 (In the Senate - Filed March 12, 1993; March 16, 1993, read 1-3 first time and referred to Committee on Education; April 15, 1993, 1-4 reported favorably by the following vote: Yeas 11, Nays 0; 1-5 April 15, 1993, sent to printer.) 1-6 COMMITTEE VOTE 1-7 Yea Nay PNV Absent 1-8 Ratliff x 1-9 Haley x 1-10 Barrientos x 1-11 Bivins x 1-12 Harris of Tarrant x 1-13 Luna x 1-14 Montford x 1-15 Shapiro x 1-16 Sibley x 1-17 Turner x 1-18 Zaffirini x 1-19 A BILL TO BE ENTITLED 1-20 AN ACT 1-21 relating to the powers of the board of directors of Texas A&M 1-22 University and to the board's authority to finance utility 1-23 services, including the issuance of bonds. 1-24 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-25 SECTION 1. Section 85.24, Education Code, is amended to read 1-26 as follows: 1-27 Sec. 85.24. UTILITIES. (a) The board from time to time may 1-28 improve and equip existing central power plants and may construct, 1-29 acquire, improve, and equip steam plants and additions to them, and 1-30 the board may acquire land for these purposes for the institutions 1-31 under its control, when the total cost, type of construction, 1-32 capacity, and plans and specifications have been approved by the 1-33 board. As used in this subsection, "steam plants" does not include 1-34 electrical generating facilities, but "central power plants" does 1-35 include electrical generating facilities. The board may 1-36 additionally enter into contracts for the purchase of any utility 1-37 services or commodities and may pledge to the payment of such 1-38 contracts any sources it is authorized to pledge to the payment of 1-39 bonds under this code under such terms and conditions as determined 1-40 by the board. 1-41 (b) The board from time to time may construct, extend, and 1-42 improve the water systems, sewer systems, or both, for any or all 1-43 institutions under its control, when the total cost, type of 1-44 construction, capacity, and plans and specifications have been 1-45 approved by the board. 1-46 (c) The board may furnish water, sewer, steam, power, 1-47 electricity, or any or all of those services from the power and 1-48 steam plant or plants and other facilities located at each 1-49 institution to any or all dormitories, kitchens and dining halls, 1-50 hospitals, student activity buildings, gymnasiums, athletic 1-51 buildings and stadiums, the dormitory for help, laundry, and other 1-52 buildings or facilities that may have been or may be constructed at 1-53 each institution, and may determine the amount to be charged as a 1-54 part of the maintenance and operation expense of those buildings or 1-55 facilities for the service or services. The board may allocate the 1-56 cost of furnishing the services to revenue-producing buildings and 1-57 facilities and to other buildings and facilities at the 1-58 institutions. The board may pledge the net revenues from the 1-59 amounts thus received for the services to pay the principal of and 1-60 interest on, and to create and maintain the reserve for, the 1-61 negotiable revenue bonds issued for the purpose of constructing, 1-62 acquiring, improving, extending, or equipping the power and steam 1-63 plants, or additions thereto, or other facilities, and may secure 1-64 the bonds additionally by pledging rentals, rates, charges, and 1-65 fees for the use or availability of all or any property, buildings, 1-66 structures, activities, operations, or facilities, of any nature, 1-67 which may be fixed and collected from all or any designated part of 1-68 the students enrolled in the institution or institutions or from 2-1 others in the amounts and in the manner determined and provided by 2-2 the board in the resolution authorizing the issuance of the bonds. 2-3 (d) The board may create by order one or more nonprofit 2-4 corporations to act on behalf of the board in the exercise of any 2-5 power of the board under this section, including the authority to 2-6 acquire, construct, develop, and operate a cogeneration facility 2-7 for the production of steam, electric power and energy, hot and 2-8 chilled water, or any of the above, and to enter into such 2-9 contracts and issue debt on behalf of the board for such purposes 2-10 under such terms and conditions as determined by the board of 2-11 directors. 2-12 (e)(1) When exercising a power under this Act, a corporation 2-13 created under this Act and the board of directors of the 2-14 corporation have the same powers as the board. 2-15 (2) The board shall appoint the directors of a 2-16 nonprofit corporation created under this section. A member of the 2-17 board may serve as a member of the nonprofit corporation's board of 2-18 directors. The corporation's directors serve at the will of the 2-19 board. 2-20 (3) The budget of a nonprofit corporation created 2-21 under this section must be approved by the board. The activities 2-22 of the corporation are subject to the continuing review and 2-23 supervision of the board. No debt may be incurred by the nonprofit 2-24 corporation until it has been approved by the board. 2-25 (4) A nonprofit corporation created under this section 2-26 is a public entity performing an essential public function, and 2-27 property owned by a corporation is public property used for an 2-28 essential public and governmental purpose. Therefore, the 2-29 corporation and the corporation's property are exempt from all 2-30 taxes and special assessments of the state or of a municipality, 2-31 county, or other political subdivision of the state. 2-32 (f)(1) The Texas Non-Profit Corporation Act (Article 2-33 1396-1.01 et seq., Vernon's Texas Civil Statutes) and its 2-34 subsequent amendments and Sections 5 through 20 and 33 through 36, 2-35 Development Corporation Act of 1979 (Article 5190.6, Vernon's Texas 2-36 Civil Statutes), and its subsequent amendments apply to and govern 2-37 a corporation created under this section. 2-38 (2) As used in this section, "bonds" shall mean bonds, 2-39 notes, commercial paper, or other evidence of indebtedness. 2-40 (g) All proceedings relating to the issuance of bonds issued 2-41 pursuant to this section shall be submitted to the attorney general 2-42 for examination. If the attorney general finds that the bonds and 2-43 the proceedings have been authorized in accordance with law, the 2-44 attorney general shall approve the bonds and the proceedings, 2-45 including any trust agreements or other agreements securing the 2-46 payment of the bonds, and the bonds shall be registered by the 2-47 comptroller of public accounts. After approval and registration, 2-48 the bonds and such proceedings are incontestable in any court or 2-49 other forum for any reason and are valid and binding obligations in 2-50 accordance with their terms for all purposes. 2-51 (h) Bonds may not be issued under this section unless the 2-52 issuance of the bonds has been reviewed and approved by the bond 2-53 review board. 2-54 SECTION 2. The importance of this legislation and the 2-55 crowded condition of the calendars in both houses create an 2-56 emergency and an imperative public necessity that the 2-57 constitutional rule requiring bills to be read on three several 2-58 days in each house be suspended, and this rule is hereby suspended, 2-59 and that this Act take effect and be in force from and after its 2-60 passage, and it is so enacted. 2-61 * * * * * 2-62 Austin, 2-63 Texas 2-64 April 15, 1993 2-65 Hon. Bob Bullock 2-66 President of the Senate 2-67 Sir: 2-68 We, your Committee on Education to which was referred S.B. 2-69 No. 1237, have had the same under consideration, and I am 2-70 instructed to report it back to the Senate with the recommendation 3-1 that it do pass and be printed. 3-2 Ratliff, 3-3 Chairman 3-4 * * * * * 3-5 WITNESSES 3-6 FOR AGAINST ON 3-7 ___________________________________________________________________ 3-8 Name: W. H. Mobley x 3-9 Representing: Texas A&M University 3-10 City: College Station 3-11 ------------------------------------------------------------------- 3-12 Name: Joe Sugg x 3-13 Representing: TAMU 3-14 City: College Station 3-15 ------------------------------------------------------------------- 3-16 Name: Christy Jacobs x 3-17 Representing: Texas A&M 3-18 City: Bryan 3-19 ------------------------------------------------------------------- 3-20 Name: Christy M. Durham x 3-21 Representing: Texas A&M Student Government 3-22 City: College Station 3-23 ------------------------------------------------------------------- 3-24 Name: Juli Phillips x 3-25 Representing: Texas A&M 3-26 City: College Station 3-27 ------------------------------------------------------------------- 3-28 Name: Pamela Haith x 3-29 Representing: Texas A&M 3-30 City: College Station 3-31 ------------------------------------------------------------------- 3-32 Name: Russell Langley x 3-33 Representing: Texas A&M Student Government 3-34 City: College Station 3-35 -------------------------------------------------------------------