HomeMy WebLinkAbout10-24-2002-11.02 - Resolution - 10/24/2002 RESOLUTION NO. 10 -24- 2002 -11.02
A RESOLUTION SUPPORTING CHANGES TO CHAPTER 53.11 OF THE TEXAS
EDUCATION CODE
WHEREAS, Chapter 53.11 of the Texas Education Code authorizes creation of high Chapter 53
( §53.11) of the Texas Education Code authorizes creation of Higher Education Authorities. The
Higher Education Authority is an entity formed by a City for the purpose of acquiring housing to
be used exclusively for students and/or employees of institutions of higher education. The
property does not have to be located within the boundaries of the City seeking the exemption;
and,
WHEREAS, Section 53.46 of the Texas Education Code grants a Higher Education Authority
exemption from all taxes. This statute also gives the HEA the authority to issue tax exempt debt,
i.e. municipal bonds. Therefore their borrowing cost is lower than that for a similar private
sector financing; and,
WHEREAS, The school funding system in Texas is largely dependent on the local property taxes
that are levied on taxable property. Any reduction in the value of local taxable property reduces
the amount of funding available for the operation of Texas school districts. After a one year time
lag, the State of Texas is then required to provide additional funding to make up the shortfall
4 0 resulting from these exemptions; and,
WHEREAS, The Cities where such property is located are required to provide police, fire,
infrastructure, utility and other services to these properties. However, a City where such
property is located will receive no tax revenue from these properties; and,
WHEREAS, County government services are also provided to these properties and their
residents with no tax revenue from them to the County Government; and,
WHEREAS, Because the State of Texas makes up the shortfall to Texas school districts after a
one year time lag, these exemptions constitute a granting of State funds without action by the
Legislature. A City has the authority to grant State funds by causing the increase in State
funding required for Texas school districts; and,
WHEREAS, The exemption makes it a very favorable investment for a City as compared to a
private sector investment in an apartment complex. They can finance the acquisition of the
property with tax exempt bond proceeds resulting in lower interest rates. And their operating
expenses are lower because they pay no ad valorem taxes. The private sector property owner is
paying higher interest rates on the acquisition costs and also paying property taxes annually.
Yet, the rental income market is the same for both; now, therefore,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF COLLEGE STATION,
ik TEXAS THAT:
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Resolution No.10 -24- 2002 -11.02 Page 2
1. The City Council of the City of College Station, Texas hereby resolves to seek legislation
to limit the ability of a Higher Education Authority to obtain property tax exemption to
property only within the boundaries of the enabling City; or,
2. The City Council of the City of College Station, Texas hereby resolves to support
legislation that requires a "payment in lieu" of property taxes to each entity that would
otherwise receive tax revenue from the property.
3. This Resolution shall be effective immediately upon its adoption and passage.
ADOPTED AND PASSED by affirmative vote this 24 day of October, 2002.
APPROVED:
`
BY: _ �i / ,
Ron 1 via, Mayor
ATTEST:
44'2
City Secretary
APPROVED:
E Signed by Harvey Carrllb
Authenticate with Apprrovelt f
l
City Attorney
4
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