SRC-MKV S.B. 914 77(R)   BILL ANALYSIS


Senate Research Center   S.B. 914
77R5274 KEL-DBy: Ogden
Education
4/3/2001
As Filed


DIGEST AND PURPOSE 

Chapter 53 of the Education Code permits a city to create a higher
education authority or a nonprofit corporation to exercise powers similar
to those of an authority.  The nonprofit organization can issue tax exempt
bonds to buy dormitories outside the city that created the corporation.
These bonds, which are sold to investors, are paid off from the rent from
the dormitories.  To qualify under the law, the dormitories must be rented
exclusively to students or others officially connected with a university.
The tax exempt bonds must be approved by the state attorney general's
office.  Some cities that have created higher education authorities contend
that facilities they have constructed or acquired outside their
extraterritorial jurisdiction are not subject to local ad valorem property
taxes.  Local taxing entities outside of these cities are thereby deprived
of needed property tax revenues.  As proposed, S.B. 914 requires facilities
constructed or acquired by a higher education authority to be located
within the boundaries or extraterritorial jurisdiction of a city that
created the authority. 

RULEMAKING AUTHORITY

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

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 53.33, Education Code, as follows:

(b) Adds language to require the facilities to be located within the
boundaries or extraterritorial jurisdiction of a city that created the
authority.  Deletes language providing that the facilities need not be
located within the city limits of the city or cities. 

(c) Provides that if a city under Section 53.35 authorizes a nonprofit
corporation to exercise the powers of an authority under this section, to
the extent that this section conflicts with the powers of the nonprofit
organization under the Texas Non-Profit Corporation Act (Article 1396-1.01
et seq., V.T.C.S.), this section controls. 

(d) Provides that Subsection (b) does not affect the validity of bonds
issued under this chapter before September 1, 2001, or powers exercised
under this chapter with respect to land or facilities acquired under this
chapter before that date. 

SECTION 2.  Effective date: September 1, 2001.