HBA-TYH, ALS H.B. 2209 76(R)BILL ANALYSIS Office of House Bill AnalysisH.B. 2209 By: McClendon Urban Affairs 7/8/1999 Enrolled BACKGROUND AND PURPOSE 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 allows a housing authority that creates a public facility corporation to enter into various agreements with and make various loans and contributions to that corporation for the purpose of providing affordable housing and other specified purposes relating to the promotion of the development of residential housing. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Subchapter D, Chapter 392, Local Government Code, by adding Section 392.066, as follows: Sec. 392.066. PUBLIC FACILITY CORPORATION. (a) Authorizes an authority that creates a public facility corporation (corporation) under Article 717s, (Public Facility Corporation Act) V.T.C.S., with or without consideration, for the purpose of providing affordable housing or housing assistance, to enter into an agreement to make a contribution to, make an investment in, enter into a lease or exchange with, or make a mortgage or loan to the corporation to: (1) acquire, construct, rehabilitate, renovate, repair, equip, furnish, or provide assistance to a residential development under Section 394.004 (Application of Chapter to Certain Residential Developments) or a housing project, or (2) achieve another public purpose authorized by law. (b) Authorizes such an authority, with or without consideration, for the purpose of providing affordable housing or housing assistance and for a purpose described under Subsection (a), to: (1) transfer, convey, pledge, or use money, personal or real property, or any other right or benefit that the authority is entitled to under law, and (2) pledge a right or benefit as described in Subdivision (1) to secure the payment of indebtedness issued by the corporation. (c) Authorizes an authority to exercise a power under Subsection (a), for the purpose of providing affordable housing or housing assistance, as necessary to develop and diversify the state's economy; reduce unemployment or underemployment; develop or expand commerce; or promote another public purpose. (d) Provides that the powers granted by this section do not affect the powers of an authority granted under the Public Facility Corporation Act. (e) Provides that a housing development project or program that uses funds provided by an authority under this section must benefit individuals and families with specified incomes in the same proportion that the funds provided by the authority under this section bear to the overall cost of the housing development project or other program. SECTION 2. Emergency clause. Effective date: upon passage.