HBA-CMT S.B. 588 77(R)    BILL ANALYSIS


Office of House Bill AnalysisS.B. 588
By: Lindsay
County Affairs
4/17/2001
Committee Report (Amended)



BACKGROUND AND PURPOSE 

Currently, many public service not-for-profit organizations must borrow
money from banks at high market interest rates because they have no
statutory alternatives.  Senate Bill 588 provides that a corporation formed
under the Cultural Education Facilities Finance Corporation Act has the
same rights and powers as a corporation organized under the Texas
Non-Profit Corporation Act, thus allowing nonprofit organizations to issue
tax-exempt bonds to public organizations. 

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. 

ANALYSIS

Senate Bill 588 amends the Cultural Education Facilities Finance
Corporation Act (Act) to set forth legislative findings regarding cultural
facilities in this state.  

The bill provides that a city or county that creates a cultural education
facilities finance corporation (corporation) under the Act is authorized to
limit the corporation's purposes in the proceedings directing the creation
of the corporation by prohibiting the corporation from financing particular
types of cultural facilities, including a cultural facility to be used for
a purpose specified in the proceedings.  As a condition of providing
financing, a corporation is authorized to restrict a person receiving
financing from using a cultural facility for a particular purpose.  A
restriction imposed by a city or county on a corporation is authorized to
be enforced by the governing body of the sponsoring entity by injunction or
mandamus.  It is prohibited for a violation of a restriction by a
corporation to impair the validity of the obligations incurred by the
corporation.  

Except as provided by the Act, a corporation formed under the Act has the
same rights and powers as a corporation organized under the Texas
Non-Profit Corporation Act.  

The bill updates the definition of a "cultural facility."

EFFECTIVE DATE

On passage, or if the Act does not receive te necessary vote, the Act takes
effect September 1, 2001. 

EXPLANATION OF AMENDMENTS

Committee Amendment No. 1 removes "religious groups" from inclusion in the
list of groups in the legislative findings portion of the Cultural
Education Facilities Finance Corporation Act that the legislature seeks to
promote the culture and history of through the development of new and
expanded cultural and community facilities.