BILL ANALYSIS

S.B. 1942

By: Gutierrez

Urban Affairs

Committee Report (Unamended)

BACKGROUND AND PURPOSE

A housing authority is a governmental unit and can only act to promote a public purpose, exercising public and essential governmental functions with the powers necessary to accomplish the purposes. When a housing authority creates a nonprofit corporation, it is with the understanding that the corporation acts as its instrumentality, aligned with its public purpose. A question has arisen as to whether a nonprofit created by a governmental body may act on its own and cease serving as an instrumentality of the governmental body. If unchecked, a nonprofit could convert public assets for private use without complying with the well-established gifting prohibitions found in the Texas Constitution. S.B. 1942 seeks to make clear that a nonprofit established by a housing authority must remain part of the entity regardless of when it was created or whether it was created relying on the Public Facility Corporation Act.

CRIMINAL JUSTICE IMPACT

It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.

ANALYSIS

S.B. 1942 amends the Local Government Code to require a corporation created by a municipality, county, school district, housing authority, or special district under the Public Facility Corporation Act to remain a public facility corporation for purposes of the act. The bill makes a nonprofit corporation created by a housing authority under the Texas Non‑Profit Corporation Act subject to the requirements of the Public Facility Corporation Act, regardless of the date the corporation is created.

EFFECTIVE DATE

On passage, or, if the bill does not receive the necessary vote, September 1, 2021.