BILL ANALYSIS S.B. 1646 By: Madla (Coleman) May 15, 1995 Committee Report (Unamended) BACKGROUND For several years, housing authorities have been creating nonprofit corporations. These corporations have been issuing bonds on the behalf of the housing authorities with the review and approval of the attorney general. Due to lower long-term interest rates, housing authorities have been using tax-exempt mortgage revenue bonds and private investment to finance their activities. Since the housing authorities do not have specific statutory authority, the attorney general, in an All Bonds Counsel letter, stated that the attorney general's office would no longer authorize the issuance of these bonds unless the legislature established statutory authority. Housing authorities have also used nonprofit corporations to access money from various housing programs created by governmental and private entities for nonprofit organizations. The U.S. Department of Housing and Urban Development Affairs and organizations such as the Ford Foundation, Rockerfeller Foundation, Eli Lilly Foundation, and the National Community Development Initiative provide grants and program-related investments to nonprofit housing developers. PURPOSE As proposed, C.S.S.B. 1646 provides for the ability of a public housing authority to sponsor a public facility corporation. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not grant any additional rulemaking authority to a state officer, institution, or agency. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 1.003, Article 717s, V.T.C.S. (Public Facility Corporation Act), to add the definition of "housing authority" to mean a public corporation that is created under Chapter 392, Local Government Code. Amends the definition of "sponsor" to include a housing authority. Redesignates existing Subdivisions (10)-(14) as (11)-(15). SECTION 2. Amends Section 3.021, Article 717s, V.T.C.S., by adding Subsection (j), to provide that a nonprofit corporation created by a housing authority under Article 1396-1.01 et seq., V.T.C.S. (Texas Non-Profit Corporation Act) is considered to be a corporation under this article and shall have the same rights and powers necessary or convenient to accomplish a corporation's purposes under this article. SECTION 3. Amends Section 4.044, Article 717s, V.T.C.S., by adding Subsection (d), to authorize a corporation to issue or incur bonds to refund outstanding debt obligations of a nonprofit corporation created by a housing authority under Article 1396-1.01 et seq., V.T.C.S. SECTION 4. Emergency clause. Effective date: upon passage. SUMMARY OF COMMITTEE ACTION SB 1646 was considered by the committee in a formal meeting on May 15, 1995. The bill was reported favorably without amendment, 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 6 ayes, 0 nays, 0 pnv, and 3 absent.