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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;

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;

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.

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.

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.

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.