SRC-SEW S.B. 588 77(R)BILL ANALYSIS


Senate Research CenterS.B. 588
By: Lindsay
Intergovernmental Relations
6/20/2001
Enrolled


DIGEST AND PURPOSE 

Under current law, many public service not-for-profit organizations must
borrow money from banks at high market interest rates because they have no
statutorial alternatives.  S.B. 588 expands the statute allowing
not-for-profit organizations to issue tax-exempt bonds to public
organizations.            

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to a
state officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 2(a), Cultural Education Facilities Finance
Corporation Act (Article 1528m, V.T.C.S.), to present certain legislative
findings. 

SECTION 2.  Amends Section 3(5), Cultural Education Facilities Finance
Corporation Act (Article 1528m, V.T.C.S.), to redefine "cultural facility." 

SECTION 3.  Amends The Cultural Education Facilities Finance Corporation
Act (Article 1528m, V.T.C.S.) by adding Section 4A, as follows: 

Sec. 4A.  LIMITATION ON CORPORATE PURPOSES.  Authorizes a city or county
that creates a corporation under this act 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.  Authorizes a corporation, as a condition of
providing financing, to restrict a person receiving financing from using a
cultural facility for a particular purpose.  Authorizes a restriction
imposed by a city or county on a corporation to be enforced by the
governing body of the sponsoring entity by injunction or mandamus.
Prohibits a violation of a restriction by a corporation from impairing the
validity of the obligations incurred by the corporation. 

SECTION 4.  Amends Section 5, Cultural Education Facilities Finance
Corporation Act (Article 1528m, V.T.C.S.), by adding Subsection (c) to
provide that, 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., V.T.C.S.).

SECTION 5.  Effective date:  upon passage or September 1, 2001.