BILL ANALYSIS S.B. 1092 By: Cain (De La Garza) May 12, 1995 Committee Report (Unamended) BACKGROUND Chapter 791, Government Code, authorizes political subdivisions to enter into interlocal contracts with each other in order to cooperatively provide services or perform functions. The purpose of this contract authority is to save taxpayers' money by creating economies of scale. Traditionally, such cooperative entities have been treated as if they were political subdivisions themselves for tax purposes. However, the statutory authority for this treatment is unclear. Revocation of this status would result in higher costs for the participating subdivisions and ultimately, higher local property taxes. PURPOSE S.B. 1092 provides that property held and used for a public purpose is exempt from or subject to taxation under an interlocal contract between political subdivisions. 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 791.013, Government Code, by adding Subsection (c), to provide that all property that is held and used for a public purpose by the administrative agency or designated local government is exempt from or subject to taxation in the same manner as if the property were held and used by the participating political subdivisions. SECTION 2. Emergency Clause. SUMMARY OF COMMITTEE ACTION Public notice was posted in accordance with the rules, and a public hearing was held on May 9, 1995. Representative Finnell explained the bill. By a record vote of 8 ayes, 0 nays, 0 present not voting and 3 absent, the committee voted to report S.B. 1092 to the House without amendment with the recommendation that it be sent to the Local & Consent Calendar, and that it do pass. Testimony received in favor of the bill: Joe Woods, representing the Texas Municipal League Intergovernmental Risk Pool