By:  Ogden                                             S.B. No. 914
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to certain educational facilities and housing facilities
 1-3     owned by higher education authorities or by certain nonprofit
 1-4     entities.
 1-5           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-6           SECTION 1.  Section 53.46, Education Code, is amended to read
 1-7     as follows:
 1-8           Sec. 53.46.  EXEMPTION [AUTHORITY EXEMPT] FROM TAXATION.
 1-9     (a)  An educational facility or housing facility is exempt from
1-10     taxation if the facility qualifies for an exemption under
1-11     Subsection (b), (c), or (d).
1-12           (b)  An educational facility or housing facility is exempt
1-13     from taxation if the facility is owned by an authority, by a
1-14     corporation created under Section 53.35(b), or by a nonprofit
1-15     foundation created on behalf of an institution of higher education,
1-16     an accredited primary or secondary school, or an authorized charter
1-17     school, if the facility is financed in whole or in part under this
1-18     chapter, and if the facility:
1-19                 (1)  is held for the exclusive benefit of an
1-20     institution of higher education, an accredited primary or secondary
1-21     school, or an authorized charter school that has, by official
1-22     action under this section, approved that ownership and financing;
1-23                 (2)  is held for the exclusive use of the students,
1-24     faculty, and staff members of the benefited institution or school;
1-25     and
 2-1                 (3)  would be exempt from taxation under other
 2-2     applicable law if the facility were owned by the institution or
 2-3     school.
 2-4           (c)  An educational facility or housing facility owned or
 2-5     leased by an institution of higher education, by an accredited
 2-6     primary or secondary school, or by an authorized charter school
 2-7     that is financed in whole or in part under this chapter is exempt
 2-8     from taxation if it is exempt from taxation under other applicable
 2-9     law.
2-10           (d)  A housing facility is exempt from taxation by a taxing
2-11     unit if:
2-12                 (1)  the facility is owned by an authority created by a
2-13     municipality, or by a corporation created under Section 53.35(b) by
2-14     a municipality, or created on behalf of an institution of higher
2-15     education, an accredited primary or secondary school, or an
2-16     authorized charter school and if the facility is financed or
2-17     acquired in whole or in part under this chapter; and 
2-18                 (2)  all net revenues derived from the facility are
2-19     devoted exclusively to the granting of scholarships in the form of
2-20     reduced room and board or room or board charges or in other lawful
2-21     forms.      
2-22           (e)  Subsection (d) shall only apply to an authority or
2-23     nonprofit corporation created or to be created under this chapter
2-24     by a city if an authority or nonprofit corporation created by the
2-25     same city had granted room and board scholarships prior to
2-26     September 1, 2001, to students residing in facilities owned by the
 3-1     authority or nonprofit corporation.
 3-2           (f)  If a housing facility exempt under Subsection (d)(2)
 3-3     fails to award scholarships having a value at least equal to the
 3-4     amount of ad valorem taxes that would have been owed if the
 3-5     facility had not been exempt, the facility shall make a payment in
 3-6     the amount of the taxes that would be due, if taxes would have been
 3-7     owed, for the proportional benefit of the applicable taxing
 3-8     jurisdictions in the amount of the difference between the value of
 3-9     the scholarships and the taxes which otherwise would have been
3-10     payable.  For purposes of determining the value of scholarships
3-11     described in this subsection, a scholarship shall be valued at the
3-12     same amount that is charged to a non-scholarship-recipient residing
3-13     at the same facility who receives substantially the same benefits
3-14     as the scholarship recipient.  This provision may not alter an
3-15     existing agreement in existence prior to September 1, 2001, without
3-16     permission of the affected taxing authority.  The local taxing unit
3-17     shall determine the amount of the difference between the value of
3-18     the scholarships and the taxes that would have been payable.
3-19     [Because the property owned by authority will be held for
3-20     educational purposes only and will be devoted exclusively to the
3-21     use and benefit of the students, faculty, and staff members of an
3-22     accredited institution of higher education, it is exempt from
3-23     taxation of every character.]
3-24           SECTION 2.  Subchapter C, Chapter 53, Education Code, is
3-25     amended by adding Section 53.461 to read as follows:
3-26           Sec. 53.461.  TAX REBATE.  (a)  A housing facility is
 4-1     eligible for a rebate of the ad valorem property taxes paid to a
 4-2     taxing unit as defined by Section 1.04, Tax Code, if:
 4-3                 (1)  the facility is owned by an authority, by a
 4-4     corporation created under Section 53.35(b), or by a nonprofit
 4-5     foundation created on behalf of an institution of higher education,
 4-6     an accredited primary or secondary school, or an authorized charter
 4-7     school;
 4-8                 (2)  the facility is financed in whole or in part under
 4-9     this chapter; and 
4-10                 (3)  all net revenues derived from the facility are
4-11     devoted exclusively to the granting of scholarships in the form of
4-12     reduced room and board charges or in other lawful forms.    
4-13           (b) The governing body of the taxing unit shall determine the
4-14     amount of the rebate except that the amount of the rebate in any
4-15     year may not exceed the lesser of:
4-16                 (1)  the amount of ad valorem taxes paid to the taxing
4-17     unit in that year; or
4-18                 (2)  the fair market value of scholarships awarded
4-19     under Subsection (a)(3) in the preceding year.
4-20           SECTION 3.  This Act takes effect immediately if it receives
4-21     a vote of two-thirds of all the members elected to each house, as
4-22     provided by Section 39, Article III, Texas Constitution.  If this
4-23     Act does not receive the vote necessary for immediate effect, this
4-24     Act takes effect September 1, 2001.