BILL ANALYSIS

S.B. 500

By: Shapiro

Culture, Recreation & Tourism

Committee Report (Unamended)

BACKGROUND AND PURPOSE

The Cultural Education Facilities Finance Corporation Act was originally enacted by the 69th Legislature, Regular Session, 1985.  Certain cultural organizations have been unable, however, to finance their activities due to restrictive interpretations of the act. 

S.B. 500 redefines "cultural facility," requires the creation of the cultural education facilities finance corporation in the same manner as a health facilities development corporation, and authorizes the corporation to exercise its powers on behalf of a user outside Texas if the user also conducts lawful activities in Texas.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.

ANALYSIS

S.B. 500 amends the Cultural Education Facilities Finance Corporation Act to clarify that the term "cultural facility" means any capital expenditure by a user.  The bill includes in that term, in addition to certain other real property or facilities, a facility in which a nonprofit corporation exempt from the state franchise tax, an organization described as a charitable organization under state law, or a federally tax exempt organization under Section 501(c)(3) of the Internal Revenue Code engages in any activity in which the entity is permitted to engage.  The bill removes from the definition the criterion that a facility incidental, subordinate, or related to or appropriate in connection with property described as a cultural facility, regardless of the date of construction or acquisition, be located within Texas.

S.B. 500 clarifies that a cultural education facilities finance corporation shall be created and organized in the same manner as a health facilities development corporation under the Health Facilities Development Act.  The bill authorizes the corporation, regardless of any other provision of that act or of the Higher Education Facility Authority for Public Schools Act, to exercise its powers on behalf of a user outside Texas if that user also conducts lawful activities in Texas.

EFFECTIVE DATE

On passage, or, if the act does not receive the necessary vote, the act takes effect September 1, 2009.