SRC-JJJ H.B. 2209 76(R)   BILL ANALYSIS


Senate Research Center   H.B. 2209
By: McClendon (Madla)
Intergovernmental Relations
5/3/1999
Engrossed


DIGEST 

Under the Public Facility Corporation Act, housing authorities may create
nonprofit public facility corporations to promote development of
residential housing and accomplish other public purposes. Although the
legislature has declared public facility corporations to be public
corporations and instrumentalities of the housing authority, there is no
statutory provision specifically authorizing a housing authority that
creates a public facility corporation to enter into a transaction with that
corporation.  As a result, the attorney general, in reviewing tax-exempt
bond financing, has questioned the ability of such a housing authority to
make capital contributions or loans to these entities.  H.B. 2209 would
establish conditions regarding the ability of a public housing authority to
use a public facility corporation to promote development of residential
housing and accomplish other public purposes. 
  
PURPOSE

As proposed, H.B. 2209 establishes conditions regarding the ability of a
public housing authority to use a public facility corporation to promote
development of residential housing and accomplish other public purposes. 

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Chapter 392D, Local Government Code, by adding Section
392.066, as follows: 

Sec. 392.066.  PUBLIC FACILITY CORPORATION.  Authorizes an authority that
creates a public facility corporation (corporation) with or without
consideration, for the purpose of providing affordable housing or housing
assistance, to enter into an agreement with, make a contribution to, make
an investment in, enter into a lease or exchange with, or make a mortgage
or loan to the corporation in order to accomplish certain conditions.  Sets
forth further considerations and conditions for an authority regarding the
providing of affordable housing or housing assistance and for a purpose
described by Subsection (a).  Authorizes an authority to exercise a power
granted by Subsection (a) to fulfill certain conditions for the purpose of
providing affordable housing.  Provides that the powers granted by this
section do not affect the powers of the authority granted under Article
717s, V.T.C.S.  Requires a housing development project or other program
that uses funds provided by an authority to benefit individuals and
families whose incomes are not more than 60 percent of the area median
family income, adjusted for family size, in the same proportion that the
funds provided bear to the overall cost of the housing development project
or other program. 

SECTION 2.  Emergency clause.
  Effective date: upon passage.