1-1     By:  Ogden                                             S.B. No. 914
 1-2           (In the Senate - Filed February 23, 2001; February 28, 2001,
 1-3     read first time and referred to Committee on Education;
 1-4     April 17, 2001, reported adversely, with favorable Committee
 1-5     Substitute by the following vote:  Yeas 7, Nays 0; April 17, 2001,
 1-6     sent to printer.)
 1-7     COMMITTEE SUBSTITUTE FOR S.B. No. 914                   By:  Nelson
 1-8                            A BILL TO BE ENTITLED
 1-9                                   AN ACT
1-10     relating to certain educational facilities and housing facilities
1-11     owned by higher education authorities or by certain nonprofit
1-12     entities.
1-13           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-14           SECTION 1.  Section 53.46, Education Code, is amended to read
1-15     as follows:
1-16           Sec. 53.46.  EXEMPTION [AUTHORITY EXEMPT] FROM TAXATION.
1-17     (a)  An educational facility or housing facility is exempt from
1-18     taxation if the facility qualifies for an exemption under
1-19     Subsection (b) or (c).
1-20           (b)  An educational facility or housing facility is exempt
1-21     from taxation if the facility is owned by an authority, by a
1-22     corporation created under Section 53.35(b), or by a nonprofit
1-23     foundation created on behalf of an institution of higher education,
1-24     an accredited primary or secondary school, or an authorized charter
1-25     school, if the facility is financed in whole or in part under this
1-26     chapter, and if the facility:
1-27                 (1)  is held for the exclusive benefit of an
1-28     institution of higher education, an accredited primary or secondary
1-29     school, or an authorized charter school that has, by official
1-30     action under this section, approved that ownership and financing;
1-31                 (2)  is held for the exclusive use of the students,
1-32     faculty, and staff members of the benefited institution or school;
1-33     and
1-34                 (3)  would be exempt from taxation under other
1-35     applicable law if the facility were owned by the institution or
1-36     school.
1-37           (c)  An educational facility or housing facility owned or
1-38     leased by an institution of higher education, by an accredited
1-39     primary or secondary school, or by an authorized charter school
1-40     that is financed in whole or in part under this chapter is exempt
1-41     from taxation if it is exempt from taxation under other applicable
1-42     law.
1-43           (d)  A housing facility is exempt from taxation by a taxing
1-44     unit as defined by Section 1.04, Tax Code, if:
1-45                 (1)  the facility is owned by an authority created by a
1-46     municipality, or by a corporation created under Section 53.35(b) by
1-47     a municipality, or created on behalf of an institution of higher
1-48     education, an accredited primary or secondary school, or an
1-49     authorized charter school and if the facility is financed or
1-50     acquired in whole or in part under this chapter; and 
1-51                 (2)  all net revenues derived from the facility are
1-52     devoted exclusively to the granting of scholarships in the form of
1-53     reduced room and board charges or in other lawful forms.    
1-54           (e)  Subsection (d) shall not apply to any authority or
1-55     nonprofit corporation created or to be created under this chapter
1-56     by a city if an authority or nonprofit corporation created by the
1-57     same city had granted room and board scholarships prior to
1-58     September 1, 2001, to students residing in facilities owned by the
1-59     authority or nonprofit corporation.
1-60           (f)  If a housing facility exempt under Subsection (d)(2)
1-61     fails to award scholarships having a value at least equal to the
1-62     amount of ad valorem taxes that would have been owed if the
1-63     facility had not been exempt, the facility shall make a payment in
1-64     the amount of the taxes that would be due, if taxes would have been
 2-1     owed, for the proportional benefit of the applicable taxing
 2-2     jurisdictions in the amount of the difference between the value of
 2-3     the scholarships and the taxes which otherwise would have been
 2-4     payable.  For purposes of determining the value of scholarships
 2-5     described in this subsection, a scholarship shall be valued at the
 2-6     same amount that is charged to a non-scholarship-recipient residing
 2-7     at the same facility who receives substantially the same benefits
 2-8     as the scholarship recipient.  This provision may not alter an
 2-9     existing agreement in existence prior to September 1, 2001, without
2-10     permission of the affected taxing authority.  The local taxing unit
2-11     shall determine the amount of the difference between the value of
2-12     the scholarships and the taxes that would have been payable.
2-13     [Because the property owned by authority will be held for
2-14     educational purposes only and will be devoted exclusively to the
2-15     use and benefit of the students, faculty, and staff members of an
2-16     accredited institution of higher education, it is exempt from
2-17     taxation of every character.]
2-18           SECTION 2.  Subchapter C, Chapter 53, Education Code, is
2-19     amended by adding Section 53.461 to read as follows:
2-20           Sec. 53.461.  TAX REBATE.  (a)  A housing facility is
2-21     eligible for a rebate of the ad valorem property taxes paid to a
2-22     taxing unit as defined by Section 1.04, Tax Code, if:
2-23                 (1)  the facility is owned by an authority, by a
2-24     corporation created under Section 53.35(b), or by a nonprofit
2-25     foundation created on behalf of an institution of higher education,
2-26     an accredited primary or secondary school, or an authorized charter
2-27     school;
2-28                 (2)  the facility is financed in whole or in part under
2-29     this chapter; and 
2-30                 (3)  all net revenues derived from the facility are
2-31     devoted exclusively to the granting of scholarships in the form of
2-32     reduced room and board charges or in other lawful forms.    
2-33           (b) The governing body of the taxing unit shall determine the
2-34     amount of the rebate except that the amount of the rebate in any
2-35     year may not exceed the lesser of:
2-36                 (1)  the amount of ad valorem taxes paid to the taxing
2-37     unit in that year; or
2-38                 (2)  the fair market value of scholarships awarded
2-39     under Subsection (a)(3) in the preceding year.
2-40           SECTION 3.  This Act takes effect immediately if it receives
2-41     a vote of two-thirds of all the members elected to each house, as
2-42     provided by Section 39, Article III, Texas Constitution.  If this
2-43     Act does not receive the vote necessary for immediate effect, this
2-44     Act takes effect September 1, 2001.
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