CHAPTER 18. MISCELLANEOUS
VERNON'S CIVIL STATUTES
TITLE 32. CORPORATIONS
CHAPTER 18. MISCELLANEOUS
Art. 1528m. CULTURAL EDUCATION FACILITIES FINANCE CORPORATION
ACT.
Short Title
Sec. 1. This Act may be cited as the Cultural Education
Facilities Finance Corporation Act.
Legislative Findings
Sec. 2. (a) The legislature finds that:
(1) the health, education, and general welfare of the people of
this state require the development of new and expanded cultural
and community facilities for the purpose of:
(A) exhibition and promotion of and education about the
performing, dramatic, visual, and literary arts; the culture and
history of races, ethnic groups, and national heritage groups;
and history, natural history, and science;
(B) promotion of and education about health and physical fitness,
public health and safety, conservation and preservation of the
environment or natural resources, child care, adoption,
children's services, substance abuse counseling, family
counseling, and care of persons who are elderly or disabled;
(C) administering the provision and granting of charitable
services and grants in accomplishment of the purposes described
by Paragraph (B) of this subdivision;
(D) promotion of and education about activities devoted to
general cultural improvement, including scouting programs and
programs by which agencies seek to provide facilities for
retreats in urban or rural settings;
(E) support of agencies devoted to the eradication, elimination,
or amelioration of one or more diseases or afflictions affecting
health or improving the condition of individuals or groups within
a community; and
(F) provision of public health and safety and charitable services
to communities in times of catastrophe or disaster;
(2) the existence, development, and expansion of cultural
facilities are essential to the continuing education, health,
general welfare, and comfort of the citizens of this state;
(3) the means and measures authorized and the assistance provided
by this Act are in the public interest and serve a public purpose
in promoting the health, education, and general welfare of the
people of this state by securing and maintaining cultural
facilities and the resulting advancement of culture and
civilization;
(4) qualified cultural organizations in this state have invested
substantial funds in useful and beneficial cultural facilities
and have experienced difficulty in undertaking additional
projects because of the partial inadequacy of their own funds or
of funds potentially available from local subscription sources
and because of limitations of local financial institutions in
providing necessary financing for these facilities; and
(5) the enactment of this Act will:
(A) secure for present and future generations the benefits and
nurturance derived from these cultural facilities; and
(B) enhance the public health and welfare of communities
receiving the benefit of the cultural facilities.
(b) This Act shall be liberally construed to carry out the
intention of the legislature.
Definitions
Sec. 3. In this Act:
(1) "Board" means the board of directors of a cultural education
facilities finance corporation.
(2) "Bond" means a bond, note, interim certificate, or other
evidence of indebtedness of a corporation issued under this Act.
(3) "Corporation" means a cultural education facilities finance
corporation created under this Act.
(4) "Cost," as applied to a cultural facility, means the cost of
the cultural facility including:
(A) the cost of the acquisition of land or a right-of-way, option
to purchase land, easement, leasehold estate in land, or other
interest in land related to the cultural facility;
(B) the cost of acquisition, construction, repair, renovation,
remodeling, or improvement of a building or structure to be used
as or in conjunction with the cultural facility;
(C) the cost of site preparation, including the cost of
demolishing or removing a building or structure the removal of
which is necessary or incident to providing the cultural
facility;
(D) the cost of architectural, engineering, legal, and related
services; the cost of the preparation of a plan, specification,
study, survey, or estimate of cost and revenue; and other
expenses necessary or incident to planning, providing, or
determining the feasibility and practicability of the cultural
facility;
(E) the cost of machinery, equipment, furnishings, and facilities
necessary or incident to the equipping of the cultural facility
so that it may be placed in operation;
(F) the cost of finance charges, interest, marketing, and
start-up of the cultural facility before and during construction
and for not more than two years after completion of construction;
(G) costs paid or incurred in connection with the financing of
the cultural facility, including out-of-pocket expenses; bond
insurance; a letter of credit, standby bond purchase agreement,
or liquidity facility; financing, legal, accounting, financial
advisory, and appraisal fees; expenses and disbursements; a
policy of title insurance; printing, engraving, and reproduction
services; and the initial or acceptance fee of a trustee, paying
agent, remarketing agent, tender agent, or indexing agent; and
(H) direct and indirect costs of the corporation incurred in
connection with providing the cultural facility, including
reasonable sums to reimburse the corporation for time spent by
its agents or employees in providing and financing the cultural
facility.
(5) "Cultural facility" means:
(A) real property or an interest in real property, including
buildings and improvements, or equipment, furnishings, or other
personal property that:
(i) is found by the board to be necessary or convenient to
finance, refinance, acquire, construct, enlarge, remodel,
renovate, improve, furnish, or equip for cultural education or
community benefit;
(ii) is made available for use by the general public, the user,
or community groups; and
(iii) is used for a purpose described by Section 2(a)(1) of this
Act; and
(B) facilities incidental, subordinate, or related to or
appropriate in connection with property described by Paragraph
(A) of this subdivision, located within the state, regardless of
the date of construction or acquisition.
(6) "Director" means a member of a board.
(7) "Resolution" means a resolution, order, ordinance, or other
official action by a governing body of a sponsoring city or
county.
(8) "User" means a nonprofit corporation exempt from the state
franchise tax under Section 171.063, Tax Code, an organization
described in Section 11.18, Tax Code, or an organization
described in Section 501(c)(3), Internal Revenue Code of 1954,
that will own, use, operate, or develop a cultural facility after
the financing, acquisition, or construction of the cultural
facility.
(9) "Furnishings" shall include but not be limited to works of
art, books, artifacts, scientific instruments, stage sets,
musical scores, collections, and other property necessary or
useful for the purposes of the cultural facility.
Creation of Corporations; Powers; Issuance of Bonds
Sec. 4. (a) A city or county may create a nonmember, nonstock,
public, cultural educational facilities finance corporation for
the sole purpose of acquiring, constructing, providing,
improving, financing, and refinancing cultural facilities for the
public purposes stated in this Act.
(b) The corporation shall be created and organized in the same
manner and has the same powers, authority, and rights:
(1) with respect to cultural facilities and health facilities
that a health facilities development corporation has with respect
to health facilities under Chapter 221, Health and Safety Code;
and
(2) with respect to educational facilities, housing facilities,
and other facilities incidental, subordinate, or related to those
facilities that a nonprofit corporation created under Section
53.35(b), Education Code, or an authority created under Section
53.11, Education Code, has under Chapter 53, Education Code.
(c) The powers of a corporation under Subsection (b) include the
power to acquire, purchase, lease, mortgage, and convey property
with respect to a facility; borrow money by issuing bonds, notes,
and other obligations; lend money for its corporate purposes;
invest and reinvest its funds; and secure its bonds, notes, and
obligations by mortgaging, pledging, assigning, or otherwise
encumbering its property or assets.
(d) Regardless of any provision in Chapter 221, Health and
Safety Code, or Chapter 53, Education Code, the authority of the
corporation may be exercised inside or outside the limits of the
city that created the corporation if the city is located in a
county with a population of more than 300,000 or inside or
outside the limits of the county that created the corporation if
the county has a population of more than 300,000. The authority
may be exercised without the consent or other action of any
person that would otherwise be required under Chapter 221, Health
and Safety Code, or Chapter 53, Education Code, unless the
articles of incorporation or bylaws of the corporation provide
differently. The authority of a corporation under this section
shall not preempt the police powers of any sponsoring entity or
any other laws regulating or empowering sponsoring entities to
regulate the activities of the corporation.
Limitation on Corporate Purposes
Sec. 4A. (a) A city or county that creates a corporation under
this Act may 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.
(b) As a condition of providing financing, a corporation may
restrict a person receiving financing from using a cultural
facility for a particular purpose.
(c) A restriction imposed by a city or county on a corporation
may be enforced by the governing body of the sponsoring entity by
injunction or mandamus.
(d) A violation of a restriction by a corporation may not impair
the validity of the obligations incurred by the corporation.
Construction
Sec. 5. (a) If this Act conflicts with a provision of another
law, this Act prevails.
(b) If a procedure under this Act is held by a court to be
unconstitutional, a corporation by resolution may provide an
alternate procedure conforming to the constitution. It is the
intent of the legislature that a corporation authorized under
this Act is a public corporation, constituted authority, and
instrumentality authorized to issue bonds on behalf of the city
or county on behalf of which the corporation is created, all
within the meaning of Section 103, Internal Revenue Code of 1954,
and the regulations adopted and rulings issued under that
section, and this Act shall be construed accordingly.
(c) Except as provided by this Act, a corporation formed under
this Act has the same rights and powers as a corporation
organized under the Texas Non-Profit Corporation Act (Article
1396-1.01 et seq., Vernon's Texas Civil Statutes).
Acts 1985, 69th Leg., ch. 635, eff. June 14, 1985. Amended by
Acts 1991, 72nd Leg., ch. 14, Sec. 284(4), eff. Sept. 1, 1991;
Acts 2001, 77th Leg., ch. 1130, Sec. 1, eff. June 15, 2001; Acts
2001, 77th Leg., ch. 1253, Sec. 1 to 4, eff. June 15, 2001.
Amended by:
Acts 2009, 81st Leg., R.S., Ch.
214, Sec. 1, eff. May 27, 2009.