HBA- ALS H.B. 2209 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 2209
By: McClendon
Urban Affairs
3/21/1999
Introduced



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 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 3/21/1999 

Sec. 392.066.  PUBLIC FACILITY CORPORATION.  (a) Authorizes an authority
that creates a public facility corporation (corporation) under Article
717s, V.T.C.S., (Public Facility Corporation Act), with or without
consideration, 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
place in service 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, 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, in
order to implement a purpose as described by Subsection (a), 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) as
needed to implement programs designed for specific public purposes. 
 
(d) Provides that the powers granted by this section do not affect the
powers of an authority granted under the Public Facility Corporation Act. 

SECTION 2.  Emergency clause.
  Effective date: upon passage.