BILL ANALYSIS


                                                    C.S.S.B. 1646
                                                        By: Madla
                                             Economic Development
                                                          4-28-95
                                   Committee Report (Substituted)
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.