HBA-CMT H.B. 1670 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 1670 By: Coleman County Affairs 3/26/2001 Introduced 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. House Bill 1670 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 House Bill 1670 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.