BILL ANALYSIS



C.S.H.B. 2969
By: McCoulskey
04-21-95
Committee Report (Substituted)


BACKGROUND

Article 835s of Vernon's Texas Civil Statutes authorizes the
issuance of bonds by a municipality to acquire land and construct
or otherwise acquire buildings or other facilities for the purpose
of leasing the land, building, or other facility.  The Article
provides for a bond election prior to issuance, the application of
the Bond Procedures Act of 1981 to the issuance, approval by the
Attorney General of the issuance, and other regulations.

The campus of the Houston Community College System ("HCCS")located
in the City of Stafford has experienced enormous growth since its
inception in 1987, quadrupling in size to over 4,000 students.  The
campus has fostered economic development in the city by
establishing a free enterprise center with a business incubator,
the operation of a small business development center, and the
development of numerous technical programs used to train workers
for employers located in Stafford.  These and other programs are
provided by the Stafford campus of HCCS through a partnership with
Stafford area high schools which has facilitated the movement of
high school students from their high school training to the receipt
of technical certificates or two year college degrees preparing
them for direct entry into the work force.

However, because of its fast growth, the campus presently faces
severe restrictions on increased enrollment due to its limited and
inadequate facilities.

As a result, the City of Stafford and HCCS have entered into an
agreement for the city to afford its credit to HCCS to build a
70,000 square foot facility on seventeen acres of land located in
the city which will then be purchased by the city and leased back
to HCCS at payments equal to or greater than the amount of
principal, interest and costs necessary to finance the total cost
of the municipal bonds utilized by the city for the purchase and
construction of the facility.


PURPOSE

The bill would amend article 835s to clarify that an institution of
higher education such as the Houston Community College System is an
entity which may lease land or facilities from a municipality
pursuant to the article and would also amend the article to permit
municipalities the option of selling the land and facilities to
their lessee pursuant to an installment sales agreement or other
similar agreement.  The bill, therefore, would confirm the validity
of the agreement between the City of Stafford and the Houston
Community College System and the results of a bond election held in
Stafford on January 21, 1995 authorizing the issuance of bonds to
finance the agreement.  The bill would also give other Texas cities
the clear authority to enter into agreements under article 835s
with institutions of higher education.


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.

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 2 of article 835s to permit a
municipality to sell land, a building or other facility pursuant to
an installment sale agreement or otherwise, clarifies that public
notice and public bidding requirements do not apply to the sale or
the lease contemplated by the Section, and clarifies that an
"institution of higher education" as defined by Section 61.003 of
the Education Code is a political subdivision or agency of the
state which can purchase or lease the land, building or other
facility from a political subdivision as authorized by the Section.

SECTION 2.  Makes a conforming amendment to Section 4 of article
835s that the revenues from the sale of the land, building or other
facility may be pledged for the payment of the principal of and
interest on the bonds authorized by the article.

SECTION 3.  Makes a conforming amendment to Section 7 of article
835s authorizing the sale of the land, building or other facility
under Section 2 of the article.

SECTION 4.  Provides that the bill shall take effect immediately
upon passage and an emergency clause.


COMPARISON OF ORIGINAL TO SUBSTITUTE

The substitute corrects a procedural error in the text of the
original bill by underlining language that is to amend the current
statute.


SUMMARY OF COMMITTEE ACTION

HB 2969 was considered in a public hearing on April 20, 1995.  The
committee considered a complete substitute for the bill.  The
substitute was adopted without objection.  The following people
testified in favor of the bill:  Rep. McCoulskey; Mayor Leonard
Scarcella, representing himself and the City of Stafford;and Dr.
Robert Mulcahy, representing the Houston Community College System. 
The bill was reported favorably as substituted, with the
recommendation that it do pass and be printed and be sent to the
Committee on Local and Consent Calendars by a record vote of 8
ayes, 0 nays, 0 pnv, and 1 absent.