VERNON'S TEXAS CIVIL STATUTES
CHAPTER 18. MISCELLANEOUS
Art. 1525. [1262 to 1267] Drainage
Corporations chartered for the purpose of constructing,
maintaining and operating canals, drains and ditches outside of the
corporate limits of cities and towns in any county in Texas shall:
1. Have power for the purpose of drainage, to acquire lands for the
purpose of its business or in payment of stock or drainage rights,
and to hold and dispose of such lands and all other property.
2. Alienate within fifteen years from the date of acquiring same all
lands acquired by such corporations, subject to judicial
forfeiture, except lands used for the construction, maintenance and
operation of drains, ditches and laterals.
3. Have power to make contracts for the permanent drainage of any
tract of land and the charges therefor, said charges to be subject
to the control of the Legislature; and the rights therein shall be
secured by a lien expressly given upon the lands, other than
homesteads, benefited by said drain or canal.
4. Have the right to borrow money for the construction, maintenance
and operation of its ditches, canals and laterals, and to issue
bonds and mortgage its franchises to secure the payment of any debts
contracted for the same.
5. Report to the commissioners court of the county wherein
constructed, all drains and canals so constructed by such
corporations, such report to be approved by said court.
Acts 1897, 25th Leg., p. 101, ch. 77, Sec. 23, 24. Amended by Acts
1897, 25th Leg., p. 109, ch. 84, Sec. 1; G.L. vol. 10, p. 1163.
Art. 1526. [3125, 5002, 5011e, 5011f] Irrigation and waterpower
Corporations organized to construct, maintain and operate canals,
ditches, flumes, feeders, laterals, dams, reservoirs, lakes and
wells, and for conserving, storing, conducting and transferring
water to all persons entitled to the use of same for irrigation,
mining, milling, manufacturing, the development of power, to cities
and towns for waterworks, and for stockraising, shall have power to
acquire lands by voluntary donation or purchase in payment of stock
or bonds or water rights; and to hold, improve, subdivide and
dispose of all such land and other property. Such corporations may
elect directors or trustees to hold office for a period of three
years, and may provide for the election of one-third in number
thereof each year.
Acts 1895, 24th Leg., p. 23, ch. 21, Sec. 11. Amended by Acts 1895,
24th Leg., p. 27, ch. 23, Sec. 11; Acts 1917, 35th Leg., p. 224, ch.
88, Sec. 54.
Art. 1527. International trading corporations
Corporations created for the purpose of engaging in international
trading and the purchase and sale of the products of the farm,
ranch, orchard, mine and forest shall be empowered to pledge,
borrow, hypothecate and receive in trust for the purpose of sale any
and all products of the farm, ranch, and orchard, and shall be
authorized to buy, sell and exchange raw products of the farm,
ranch, orchard, mine and forest, and to take in payment therefor
finished products of whatever kind and character that they may
determine at a fair, equitable and just valuation. Such
corporations shall have power to charter, lease, construct or
purchase necessary vessels, ships, docks, wharves, and warehouses
for the conduct of their business; to pool products of the farm in
the sale of same; to hypothecate or pledge the credit of such
corporations for the products so received under contract for the
necessary funds with which to market same; to borrow money as other
business corporations and to lend the same upon products that they
may be engaged in the sale of, either as owner, agent, consignee, or
commission merchant. They shall have generally and specially all
the rights, powers and privileges belonging to a corporation
engaging in international trading. Such corporations shall have
authority to receive in payment of capital stock, manufacturing
establishments, and the stocks and bonds of same at a fair and just
valuation, and to so receive the products of the farm, ranch and
orchard. Whenever property is received in payment for capital
stock, the Secretary of State shall appoint a board of appraisers
who are familiar with the valuations of such property so taken in
payment for capital stock to appraise same and furnish him with a
sworn statement of the valuations of the property so taken in
payment for capital stock. On receipt of same he shall approve,
file and record the charter of such corporation. A majority of the
stock shall in all instances be owned by citizens of the United
States, and a majority of the officers and directors thereof shall
in all instances be citizens of the United States and of this State.
Nothing in this article shall prevent citizens of foreign countries
from becoming stockholders in such corporations, but the control of
such corporations shall never in any instance be vested in citizens
of other countries than the United States. Violation of any
provision herein as to the control of stock of such corporation
shall be sufficient for the Secretary of State to cancel the charter
of said corporation and same shall be placed in the hands of a
receiver as provided by law.
Acts 1921, 37th Leg., p. 227, ch. 120.
Art. 1527a. International Commerce Development Corporation;
foreign trade zone
The International Commerce Development Corporation, organized and
incorporated under the laws of the State of Texas, with offices at
Fort Worth, Tarrant County, Texas, is authorized to apply for and
accept a grant to establish, operate and maintain a foreign trade
zone at the Fort Worth Port of Entry, and other sub-zones, subject
to the requirements of federal law and regulations of the Foreign
Trade Zones Board.
Acts 1969, 61st Leg., p. 581, ch. 196, Sec. 1, eff. May 14, 1969.
Art. 1528. Ice companies
Corporations organized or chartered under the laws of this State
for the manufacture of ice shall also be authorized to engage in and
transact the business of buying, selling and refrigerating poultry
and poultry products, and buying, selling, canning and
refrigerating fruits, produce and dairy products.
Acts 1913, 33rd Leg., p. 267, ch. 134.
Art. 1528a. State Housing Law
Short Title
Sec. 1. This Act shall be known as the "State Housing Law."
State Agencies and Instrumentalities
Sec. 2. It is hereby declared that it is necessary in the public
interest to make provision for housing for families of low income,
and that, the providing of such housing being now otherwise
impossible, it is essential that provision be made for the
investment of private and public funds at low interest rates, the
acquisition at fair prices of adequate parcels of land and the
construction of new housing facilities under public supervision in
accord with proper standards of sanitation and safety, at a cost
which will permit their rental or sale at prices which families of
low income can afford to pay. Therefore, there are created and
established the agencies and instrumentalities hereinafter
prescribed which are declared to be the agencies and
instrumentalities of the state for the purpose of attaining the
ends herein recited, and their necessity in the public interest is
hereby declared a matter of legislative determination.
State Housing Board
Sec. 3. There is hereby created a State Board of Housing of the
State of Texas. The Texas Rehabilitation and Relief Commission is
hereby designated as the State Housing Board of the State of Texas,
and shall perform all duties imposed by the Legislature as
hereinafter provided: and insofar as its responsibilities and
duties have to do with the State Housing Law the Texas
Rehabilitation and Relief Commission shall continue to exist as the
State Housing Board until its duties and obligations shall have
ceased to exist.
Definition
Sec. 4. Definition: The term board as used in this Act shall mean
the Texas Rehabilitation and Relief Commission.
Conditions of Approval of Housing Projects by Board
Sec. 5. No housing project proposed by a limited dividend housing
corporation incorporated under this Act shall be undertaken, and no
building or other construction shall be placed under contract or
started without the approval of the board. No housing project shall
be approved by the board unless:
(a) It shall appear practicable to rent or sell the housing
accommodations to be created at prices not exceeding those
prescribed by the board. No such project shall be approved in
contravention of any zoning or building ordinance in effect in the
locality in which designated areas are located.
(b) There shall be submitted to the board a financial plan in such
form and with such assurances as the board may prescribe to raise
the actual cost of the lands and projected improvements by
subscriptions to or the sale of the stock, income debentures and
mortgage bonds of such corporation. Whenever reference is made in
this Act to cost of projects or of buildings and improvements in
projects, such cost shall include charges for financing and
supervision approved by the board and carrying charges during
construction required in the project including interest on
borrowed, and, where approved by the board, on invested capital.
(c) There shall be such plans of site development and buildings as
show conformity to reasonable standards of health, sanitation,
safety and provisions for light and air, accompanied by proper
specifications and estimates of cost. Such plans and
specifications shall not in any case fall below the requirements of
the health, sanitation, safety and housing laws of the state and
shall meet superior requirements if prescribed by local laws and
ordinances.
(d) The corporation agrees to accept a designee of the board of
housing as a member of the board of directors of said corporation.
(e) If required by the board, the corporation shall deposit all
moneys received by it as proceeds of its mortgage bonds, notes,
income debentures, or stock, with a trustee which shall be a banking
corporation authorized to do business in the State of Texas and to
perform trust functions, and such trustee shall receive such moneys
and make payment therefrom for the acquisition of land, the
construction of improvements and other items entering into cost of
land improvements upon presentation of draft, check or order signed
by a proper officer of the corporation and, if required by the
board, countersigned by the said board or a person designated by it
for said purpose. Any funds remaining in the custody of said
trustee after the completion of the said project and payment or
arrangement in a manner satisfactory to the board for payment in
full thereof shall be paid to the corporation.
Investigation of Housing Companies
Sec. 6. The board shall have power to investigate into the affairs
of limited dividend housing companies, incorporated under this Act,
and into the dealings, transactions or relationships of such
companies with other persons. Any of the investigations provided
for in this Act may be conducted by the board or by a committee to be
appointed by the board consisting of one or more members of the
board. Each member of the board or a committee thereof shall have
power to administer oaths, take affidavits and to make personal
inspections of all places to which their duties relate. The board
or a committee thereof shall have power to subpoena and require the
attendance of witnesses and the production of books and papers
relating to the investigations and inquiries authorized in this
Act, and to examine them in relation to any matter it has power to
investigate, and to issue commissions for the examination of
witnesses who are out of the state or unable to attend before the
board or excused from attendance.
Powers of Board
Sec. 7. The board is hereby empowered to (a) study housing
conditions and needs throughout the state to determine in what
areas congested and unsanitary housing conditions constitute a
menace to the health, safety, morals, welfare and reasonable
comfort of the citizens of the state, (b) prepare programs for
correcting such conditions, (c) collect and distribute information
relating to housing, (d) investigate all matters affecting the cost
of construction or production of dwellings, (e) study means of
securing economy in the construction and arrangement of buildings,
(f) recommend and approve the areas within which or adjacent to
which the construction of housing projects by limited dividend
housing companies may be undertaken, and (g) cooperate with local
housing officials and planning commissions or similar bodies in
cities and other localities in developments of projects they at any
time may have under consideration.
Consolidation of Projects
Sec. 8. The board may permit the consolidation of two or more
approved projects or the extension or amendment of any approved
project or the consolidation of any approved project with a
proposed project. In any of these events, the consolidation
project shall be treated as an original project, and an application
shall be submitted as in the case of an original project and rents
may be averaged throughout the consolidated or extended project.
The board may likewise permit or decline to permit any limited
dividend corporation to organize and operate more than one project
or to take over any project heretofore approved by the board and to
operate it independently of other projects of the corporation.
Supervision and Regulation of Operation of Housing Companies
Sec. 9. In pursuance of its power and authority to supervise and
regulate the operations of limited dividend housing companies
incorporated under this Act the board may:
(a) Order any such corporation to make, at its expense, such repairs
and improvements as will preserve or promote the health and safety
of the occupants of buildings and structures owned or operated by
such corporations.
(b) Order all such corporations to do such acts as may be necessary
to comply with the provisions of the law, the rules and regulations
adopted by the board or by the terms of any project approved by the
board, or to refrain from doing any acts in violation thereof.
(c) Examine all such corporations and keep informed as to their
general condition, their capitalization and the manner in which
their property is constructed, leased, operated or managed.
(d) Either through its members or agents duly authorized by it,
enter in or upon and inspect the property, equipment, buildings,
plants, offices, apparatus and devices of any such corporation,
examine all books, contracts, records, documents and papers of any
such corporation and by subpoena duces tecum compel the production
thereof.
(e) In its discretion prescribe uniform methods and forms of
keeping accounts, records and books to be observed by such
companies and to prescribe by order accounts in which particular
outlays and receipts shall be entered, charged or credited.
(f) Require every such corporation to file with the board an annual
report setting forth such information as the board may require
verified by the oath of the President and General Manager or
Receiver if any thereof or by the person required to file the same.
Such report shall be in the form, cover the period and be filed at
the time prescribed by the board. The board may further require
specific answers to questions upon which the board may desire
information and may also require such corporations to file periodic
reports in the form covering the period and at the time prescribed
by the board.
(g) From time to time make, amend and repeal rules and regulations
for carrying into effect the provisions of this Act.
Maximum Rentals or Purchase Price
Sec. 10. The board shall fix the maximum rental or purchase price to
be charged for the housing accommodations furnished by such
corporation. Such maximum rental or purchase price shall be
determined upon the basis of the actual final cost of the project so
as to secure, together with all other income of the corporation, a
sufficient income to meet all necessary payments to be made by said
corporations, as hereinafter prescribed, and such rental or
purchase price shall be subject to revision by the board from time
to time. The payments to be made by such corporation shall be (a)
all fixed charges, and all operating and maintenance charges and
expenses which shall include taxes, assessments, insurance,
amortization charges in amounts approved by the board to amortize
the mortgage indebtedness in whole or in part, depreciation charges
if, when and to the extent deemed necessary by the board; reserves,
sinking funds and corporate expenses essential to operation and
management of the project in amounts approved by the board. (b) A
dividend not exceeding the maximum fixed by this act upon the stock
of the corporation allotted to the project by the board. (c) Where
feasible in the discretion of the board, a sinking fund in an amount
to be fixed by the board for the gradual retirement of the stock,
and income debentures of the corporation to the extent permitted by
this Act.
Letting, subletting or assignment of leases of apartments in such
buildings or structures at greater rentals than prescribed by the
order of the board are prohibited and all such leases will be void
for all purposes.
Reorganization of Companies
Sec. 11. (1) Reorganization of limited dividend housing companies
shall be subject to the supervision and control of the board and no
such reorganization shall be had without the authorization of such
board.
(2) Upon all such reorganizations the amount of capitalization,
including therein all stocks, income debentures and bonds and other
evidence of indebtedness shall be such as is authorized by the board
which, in making its determination, shall not exceed the fair value
of the property involved.
Actions by Board Against Housing Companies
Sec. 12. Whenever the board shall be of the opinion that any such
limited dividend housing company is failing or omitting, or about
to fail or omit to do anything required of it by law or by order of
the board and is doing or about to do anything, or permitting
anything or about to permit anything to be done, contrary to or in
violation of law or of any order of the board, or which is
improvident or prejudicial to the interests of the public, the
lienholders or the stockholders, it may commence an action or
proceeding in the District Court of the county in which the said
company is located, in the name of the board for the purpose of
having such violations or threatened violations stopped and
prevented by mandatory injunction. The board shall begin such
action or proceeding by a petition and complaint to the said
District Court, alleging the violation complained of and praying
for appropriate relief by way of mandatory injunction. It shall
thereupon be the duty of the court to specify the time, not
exceeding twenty days after service of a copy of the petition and
complaint, within which the corporation complained of must answer
the petition and complaint.
In case of default in answer or after answer the court shall
immediately inquire into the facts and circumstances in such manner
as the court shall direct without other or formal pleadings, and
without respect to any technical requirements. Such other persons
or corporations as it shall seem to the court necessary or proper to
join as parties in order to make its order or judgment effective,
may be joined as parties. The final judgment in any such action or
proceeding shall either dismiss the action or proceeding or direct
that a mandatory injunction be issued as prayed for in the petition
and complaint or in such modified or other form as the court may
determine will afford appropriate relief.
Acquisition of Property for Projects
Sec. 13. When the board shall have approved a project for the
construction of housing accommodations presented to it by a limited
dividend housing company, such company may undertake the
acquisition of the property needed for said project. Such property
may be acquired by gift, bequest or purchase or, in the case of
limited dividend housing companies.
The board may expressly except from its certificate hereunder any
part of the property proposed to be acquired as unnecessary to the
plan. The approval by the board of the project shall be deemed in
any proceeding to acquire land by appropriation as sufficient
evidence of the necessity of the appropriation and a duly certified
copy of the certificate of the board shall be conclusive evidence as
to the matters lawfully certified therein in any appropriation
proceeding.
Incorporation
Sec. 14. Any number of natural persons, not less than three, a
majority of whom are citizens of the United States, may become a
corporation by subscribing, acknowledging and filing in the office
of the Secretary of State, articles of incorporation, hereinafter
called "articles," setting forth the information required by the
general corporation act of the state, except as herein modified or
changed.
(a) The purposes for which a limited dividend housing company is to
be formed shall be as follows: To acquire, construct, maintain and
operate housing projects when authorized by and subject to the
supervision of the board of housing.
(b) The shares of which the capital shall consist shall have a par
value.
(c) Articles of incorporation shall contain a declaration that the
corporation has been organized to serve a public purpose and that it
shall remain at all times subject to the supervision and control of
the board or of other appropriate state authority; that all real
estate acquired by it and all structures erected by it, shall be
deemed to be acquired for the purpose of promoting the public health
and safety and subject to the provisions of the state housing law
and that the stockholders of this corporation shall be deemed, when
they subscribe to and receive the stock thereof, to have agreed that
they shall at no time receive or accept from the company, in
repayment of their investment in its stock, any sums in excess of
the par value of the stock, together with cumulative dividends at
the rate of six (6%) per centum per annum, and that any surplus in
excess of such amount if said company shall be dissolved, shall
revert to the State of Texas.
(d) The provisions of the general corporation act, as hereafter
from time to time amended, shall apply to limited dividend housing
companies, except where such provisions are in conflict therewith.
Dividend Rate
Sec. 15. No stockholder in any company formed hereunder shall
receive any dividend, or other distribution based on stock
ownership, in any one year in excess of six (6%) per centum per
annum except that when in any preceding year dividends in the amount
prescribed in the articles of incorporation shall not have been
paid on the said stock, the stockholders may be paid such deficiency
without interest out of any surplus earned in any succeeding years.
Stock and Bond Issues for Property or Money Actually Received
Sec. 16. No limited dividend housing company incorporated under
this act shall issue stock, bonds or income debentures, except for
money, services or property actually received for the use and
lawful purpose of the corporation. No stock, bonds or income
debentures shall be issued for property or services except upon a
valuation approved by the board of housing and such valuation shall
be used in computing actual or estimated cost.
Income Debenture Certificates
Sec. 17. The articles of incorporation may authorize the issuance
of income debenture certificates bearing no greater interest than
six (6%) per centum per annum. After the incorporation of a limited
dividend housing company, the directors thereof may, with the
consent of two-thirds of the holders of any preferred stock that may
be issued and outstanding, offer to the stockholders of the company
the privilege of exchanging their preferred and common stock in
such quantities and at such times as may be approved by the board of
housing for such income debenture certificates, whose face value
shall not exceed the par value of the stock exchanged therefor.
Limitation of Powers
Sec. 18. No limited dividend housing company incorporated shall
under this Act:
(1) Acquire any real property or interest therein unless it shall
first have obtained from the board a certificate that such
acquisition is necessary or convenient for the public purpose
defined in this Act.
(2) Sell, transfer, assign or lease any real property without first
having obtained the consent of the board, provided, however, that
leases conforming to the regulations and rules of the board and for
actual occupancy by the lessees may be made without the consent of
the board. Any conveyance, incumbrance, lease or sublease made in
violation of the provisions of this section and any transfer or
assignment thereof shall be void.
(3) Pay interest returns on its mortgage indebtedness and its
income debenture certificates at a higher rate than six (6%) per
centum per annum.
(4) Issue its stock, debentures and bonds covering any project
undertaken by it in an amount greater in the aggregate than the
total actual final cost of such project, including the lands,
improvements, charges for financing and supervision approved by the
board and interest and other carrying charges during construction.
(5) Mortgage any real property without first having obtained the
consent of the board.
(6) Issue any securities or evidences of indebtedness without first
having obtained the approval of the board.
(7) Use any building erected or acquired by it for other than
housing purposes, except that when permitted by law the story of the
building above the cellar or basement and the space below such story
may be used for stores, commercial, cooperative or community
purposes, and when permitted by law the roof may be used for
cooperative or community purposes.
(8) Charge or accept any rental, purchase price or other charge in
excess of the amounts prescribed by the board.
(9) Enter into contracts for the construction of housing projects,
or for the payments of salaries to officers or employees except
subject to the inspection and revision of the board and under such
regulations as the board from time to time may prescribe.
(10) Voluntarily dissolve without first having obtained the consent
of the board.
(11) Make any guaranty without the approval of the board.
Bonds and Mortgages Subject to Board's Approval
Sec. 19. Any company formed under this act may, subject to the
approval of the board, borrow funds and secure the repayment
thereof by bonds and mortgage or by an issue of bonds under trust
indenture. The bonds so issued and secured and the mortgage or
trust indentures relating thereto, may create a first or senior
lien and a second or junior lien upon the real property embraced in
any project. Such bonds and mortgages may contain such other
clauses and provisions as shall be approved by the board, including
the right to assignment of rents and entry into possession in case
of default; but the operation of the housing projects in the event
of such entry by mortgagee or receiver shall be subject to the
regulations of the board under this act. Provisions for the
amortization of the bonded indebtedness of companies formed under
this act shall be subject to the approval of the board.
Surplus Earnings
Sec. 20. The amount of net earnings transferable to surplus in any
year after making or providing for the payments specified in
subdivisions (a), (b) and (c) of Section 10 of this act shall be
subject to the approval of the board. The amount of such surplus
shall not exceed fifteen (15%) per centum of the outstanding
capital stock and income debentures of the corporation, but the
surplus so limited shall not be deemed to include any increase in
assets due to the reduction of mortgage or amortization or similar
payments. On dissolution of any limited dividend housing company,
the stockholders and income debenture certificate holders shall in
no event receive more than the par value of their stock and
debentures plus accumulated, accrued and unpaid dividends of
interest, less any payment or distributions theretofore made other
than by dividends provided in Section 15, and any remaining surplus
or other undistributed earnings shall be paid into the general fund
of the State of Texas, or shall be disposed of in such other manner
as the board may direct and the Governor may approve.
Rentals Reduced After Payments of Charges
Sec. 21. If in any calendar or fiscal year the gross receipts of any
company formed hereunder should exceed the payments or charges
specified in Section 10, the sums necessary to pay dividends,
interest accrued or unpaid on any stock or income debentures, and
the authorized transfer to surplus, the balance shall, unless the
board of directors with the approval of the board of housing shall
deem such balance too small for the purposes, be applied to the
reduction of rentals.
Board as Party in Foreclosures
Sec. 22. (1) In any foreclosure action the board shall be made a
party defendant; and such board shall take all steps in such action
necessary to protect the interest of the public therein, and no
costs shall be awarded against the board. Foreclosure shall not be
decreed unless the court to which application therefor is made
shall be satisfied that the interests of the lienholder or holders
cannot be adequately secured or safeguarded except by the sale of
the property. In any such proceeding, the court shall be authorized
to make an order increasing the rental to be charged for the housing
accommodations in the project involved in such foreclosure, or
appoint a receiver of the property or grant such other and further
relief as may be reasonable and proper. In the event of a
foreclosure sale or other judicial sale, the property shall, except
as provided in the next succeeding paragraph of this section, be
sold to a limited dividend housing corporation organized under this
act, provided such corporation shall bid and pay a price for the
property sufficient to pay court costs and all liens on the property
with interest. Otherwise the property shall be sold free of all
restrictions imposed by this act.
(2) Notwithstanding the foregoing provision of this section,
wherever it shall appear that a corporation, subject to the
supervision either of the state insurance department or state
banking department, or the federal government or any agency or
department of the federal government, shall have loaned on a
mortgage which is a lien upon any such property such corporation
shall have all the remedies available to a mortgagee under the laws
of the State of Texas, free from any restrictions contained in this
section, except that the board shall be made a party defendant and
that such board shall take all steps necessary to protect the
interests of the public and no costs shall be awarded against it.
Purchase of Property of Other Housing Corporations
Sec. 23. Before any limited dividend housing corporation
incorporated under this act shall purchase the property of any
other limited dividend housing corporation, it shall file an
application with the board in the manner hereinbefore provided as
for a new project and shall obtain the consent of the board to the
purchase and agree to be bound by the provisions of this act, and
the board shall not give its consent unless it is shown to the
satisfaction of the board that the project is one that can be
successfully operated according to the provisions of this act.
Notice to Board of Sales Under Judgments
Sec. 24. In the event of a judgment against a limited dividend
housing corporation in any action not pertaining to the collection
of a mortgage indebtedness, there shall be no sale of any of the
real property of such corporation except upon sixty days' written
notice to the board. Upon receipt of such notice the board shall
take such steps as in its judgment may be necessary to protect the
rights of all parties.
Fees of Board
Sec. 25. The board may charge and collect for a limited dividend
housing corporation, incorporated under this act, reasonable fees
in accordance with rates to be established by the rules of the board
for the examination of plans and specifications and the supervision
of construction in an amount not to exceed one-half of one per cent
of the cost of the project; for the holding of a public hearing upon
application of a housing corporation an amount sufficient to meet
the reasonable cost of advertising the notice thereof and of the
transcript of testimony taken thereat; for any examination or
investigation made upon application of a housing corporation and
for any act done by the board, or any of its employees, in
performance of their duties under this act an amount reasonably
calculated to meet the expense of the board incurred in connection
therewith. In no event shall any part of the expenses of the board
ever be paid out of the state treasury. The board may authorize a
housing corporation to include such fees as part of the cost of a
project, or as part of the charges specified in Section 10 of this
act pursuant to rules to be established by the board.
Partial Invalidity
Sec. 26. The provisions of this act shall be severable and if any of
its provisions shall be held to be unconstitutional the decision so
holding shall not be construed to affect the validity of any of the
remaining provisions of this act. It is hereby declared as the
legislative intent that this act would have been adopted had such
unconstitutional provision not been included therein.
Corporate Existence
Sec. 27. The corporate existence of any corporation authorized
hereunder shall not extend beyond twenty-five years from the date
of incorporation, and promptly upon such termination the
corporation shall be liquidated and its assets distributed as
provided herein, unless the Incorporation Board, by approval of the
State Board of Housing, should grant an extension for an additional
period of time.
Acts 1933, 43rd Leg., p. 751, ch. 223.
Art. 1528e. Professional Corporation Act
Text of article effective until January 1, 2010
Title
Sec. 1. This Act shall be known and may be cited as "The Texas
Professional Corporation Act."
Sections, Subsections and Captions
Sec. 2. The division of this Act into sections and subsections and
the use of captions in connection therewith are solely for
convenience and shall have no legal effect in construing the
provisions of this Act.
Definitions
Sec. 3. As used in this Act, unless the context otherwise requires,
the term:
(a) "Professional Service" means any type of personal service which
requires as a condition precedent to the rendering of such service,
the obtaining of a license, permit, certificate of registration or
other legal authorization, and which prior to the passage of this
Act and by reason of law, could not be performed by a corporation,
including by way of example and not in limitation of the generality
of the foregoing provisions of this definition, the personal
services rendered by architects, attorneys-at-law, certified
public accountants, dentists, public accountants, and
veterinarians; provided, however, that physicians, surgeons and
other doctors of medicine are specifically excluded from the
operations of this Act, since there are established precedents
allowing them to associate for the practice of medicine in joint
stock companies.
(b) "Professional Corporation" means a corporation organized under
this Act for the sole and specific purpose of rendering
professional service and which has as its shareholders only
individuals who themselves are duly licensed or otherwise duly
authorized within this state to render the same professional
service as the corporation.
(c) "Professional Legal Service" means any type of personal service
rendered by attorneys-at-law which requires as a condition
precedent to the rendering of such service within this state, the
obtaining of a license, permit, certificate of registration, or
other legal authorization and which prior to the passage of this Act
and by reason of law could not be performed within this state by a
corporation.
(d) "Professional Legal Corporation" means a corporation organized
under this Act for the sole and specific purpose of rendering
professional legal service and which has as its shareholders only
individuals, professional legal corporations and foreign
professional legal corporations each of which is duly licensed or
otherwise duly authorized to render professional legal service;
provided, however, any individual shareholder, director, officer,
employee or agent of a professional legal corporation who renders
professional legal service within this state must be duly licensed
to render professional legal service within this state.
(e) "Foreign Professional Legal Corporation" means a professional
corporation organized in a jurisdiction other than this state for
the sole specific purpose of rendering professional legal service
and which has as its shareholders only individuals, professional
legal corporations and foreign legal professional corporations
each of which is duly licensed or otherwise duly authorized to
render professional legal service.
Articles of Incorporation
Sec. 4. (a) One or more individuals may incorporate a professional
corporation by filing the original and a copy of Articles of
Incorporation with the Secretary of State. One or more individuals
may incorporate a professional legal corporation by filing the
original and a copy of Articles of Incorporation with the Secretary
of State. Except as provided by Subsection (b) of this section, no
professional corporation organized under this Act shall render more
than one kind of professional service. In addition to other
provisions required or permitted by law, the Articles of
Incorporation shall set forth:
(1) A statement that the corporation is a professional corporation;
and
(2) A statement of the professional service to be rendered by the
corporation.
(b) Professionals, other than physicians, engaged in related mental
health fields such as psychology, clinical social work, licensed
professional counseling, and licensed marriage and family therapy
may form a professional corporation under this Act to perform
professional services that fall within the scope of practice of
those practitioners. When professionals engaged in related mental
health fields form a corporation under this Act, the authority of
each of the practitioners is limited by the scope of practice of the
respective practitioner, and none can exercise control over the
others' clinical authority granted by their respective licenses,
whether through agreements, bylaws, directives, financial
incentives, or other arrangements that would assert control over
treatment decisions made by a practitioner. The state agencies
exercising regulatory control over professions to which this
subsection applies continue to exercise regulatory authority over
the respective licenses of the professionals.
Applicability of Texas Business Corporation Act
Sec. 5. The Texas Business Corporation Act shall be applicable to
professional corporations, except to the extent that the provisions
of the Texas Business Corporation Act conflict with the provisions
of this Act; and professional corporations shall enjoy the powers
and privileges and be subject to the duties, restrictions and
liabilities of other business corporations except insofar as the
same may be limited or enlarged by this Act. A shareholder of a
professional corporation, as such, shall have no duty to supervise
the manner or means whereby the officers or employees of the
corporation perform their respective duties. Shareholders of a
professional corporation, as such, shall have no greater liability
than do shareholders, as such, of other business corporations.
This Act shall take precedence in the event of any conflict with the
provisions of the Texas Business Corporation Act or the law. The
filing fee for a document under this Act is the same as the filing
fee for a similar document filed under the Texas Business
Corporation Act.
Purpose
Sec. 6. A professional corporation may be organized under this Act
only for the purpose of rendering one specific type of professional
service and services ancillary thereto.
Sec. 7. Deleted by Acts 1991, 72nd Leg., ch. 901, Sec. 49, eff. Aug.
26, 1991.
Name
Sec. 8. A professional corporation may adopt any name that is not
contrary to the law or ethics regulating the practice of the
professional service rendered through the professional
corporation. A professional corporation may use the initials
"P.C." in its corporate name in lieu of the word, or in lieu of the
abbreviation of the word, "corporation," "company," or
"incorporated."
Board of Directors
Sec. 9. No person not duly licensed or otherwise duly authorized to
render the professional service of the corporation shall be a
member of the Board of Directors.
Officers
Sec. 10. No person not duly licensed or otherwise duly authorized to
render the professional service of the professional corporation may
hold an office.
Sec. 11. Repealed by Acts 1991, 72nd Leg., ch. 901, Sec. 52, eff.
Aug. 26, 1991.
Issuance and Transfer of Shares
Sec. 12. A professional corporation may issue shares representing
ownership of the capital of the professional corporation only to
individuals, and in the case of a professional legal corporation,
individuals, professional legal corporations and foreign
professional legal corporations, which are duly licensed or
otherwise legally authorized to render the same type of
professional service as that for which the corporation was
organized. Except to the extent provided in the Articles of
Incorporation, the bylaws or any applicable stock purchase or
redemption agreement, shares representing ownership of
professional corporation capital shall be freely transferable by
any shareholder to any other shareholder, or to the professional
corporation which issued such shares or to any person, and in the
case of a professional legal corporation, to any professional legal
corporation or foreign professional legal corporation, who or which
is not a shareholder, provided such person is duly licensed or
qualified under the laws of this state, or in the case of a
professional legal corporation, such person, professional legal
corporation or foreign professional legal corporation is duly
licensed or otherwise duly authorized to render professional legal
service, and such transferee shall thereupon become a shareholder
and be entitled to participate in the management, affairs, and
profits of the professional corporation. Any restriction on the
transfer of shares imposed by the Articles of Incorporation, the
bylaws or any stock purchase or redemption agreement shall be
written or printed on all certificates representing shares issued
to shareholders, unless such restrictions are incorporated by
reference pursuant to the provisions of the Texas Business
Corporation Act.
Redemption of Shares
Sec. 13. A professional corporation shall have the power to redeem
the shares of any shareholder, or the shares of a deceased
shareholder, upon such terms as may be agreed upon by the Board of
Directors and such shareholder or his personal representative, or
at such price and upon such terms as may be provided in the Articles
of Incorporation, the bylaws, or any applicable stock purchase or
redemption agreement.
Legal Disqualification
Sec. 14. If any shareholder, officer or director of a professional
corporation, or any agent or employee thereof who has been
rendering professional service for or with it of the same type which
such professional corporation was organized to render, becomes
legally disqualified to render such professional service, he shall
sever all employment with such professional corporation and shall
terminate all financial interest therein forthwith; and such
corporation shall thereupon purchase or cause to be purchased from
him all shares owned by him in such professional corporation, at
such price and upon such terms as may be provided in the Articles of
Incorporation, the bylaws or any applicable stock purchase or
redemption agreement; provided, however, that if he was the sole
shareholder of the professional corporation, he may continue to act
as officer, director and shareholder for the purposes of winding up
the affairs of the corporation and effecting its dissolution,
selling the assets of the corporation, or selling the outstanding
shares of the corporation, but not for rendering any professional
service. Likewise, if any person who is not licensed or duly
authorized to render the professional service which a professional
corporation was organized to render should succeed to the interest
of any shareholder of such professional corporation, the person
holding such interest shall terminate all financial interest in
such professional corporation forthwith; and such corporation
shall thereupon purchase or cause to be purchased from such person
all shares owned by such person in such professional corporation,
at such price and upon such terms as may be provided in the Articles
of Incorporation, the bylaws or any applicable stock purchase or
redemption agreement; provided, however, that if such person has
succeeded to all of the shares of the professional corporation,
such person may act as officer, director and shareholder for the
purposes of winding up the affairs of the corporation and effecting
its dissolution, selling the assets of the corporation, or selling
the outstanding shares of the corporation, but not for rendering
any professional service.
Rendering of Professional Services
Sec. 15. A professional corporation may render professional service
in this state only through its officers, employees and individual
agents who are duly licensed to render such professional service in
this state or through agents of the professional corporation that
are themselves professional corporations that render such
professional service only through officers and employees of the
agent who are so licensed, and a professional legal corporation may
render professional legal service in this state only through its
officers, employees and individual agents who are duly licensed to
render professional legal service in this state or through agents
of the professional legal corporation that are themselves
professional legal corporations or foreign professional legal
corporations that render professional legal service in this state
only through officers, employees and agents who are duly licensed
to render professional legal service in this state; provided,
however, that this provision shall not be interpreted to include
within such prohibition employees such as clerks, secretaries,
bookkeepers, technicians, nurses, assistants and other individuals
who are not usually and ordinarily considered by custom and
practice to be rendering professional service for which a license
or other legal authorization is required; and further provided,
that no person shall, under the guise of employment, practice a
profession in this state unless duly licensed or otherwise legally
authorized to practice that profession under the laws of this
state.
Professional Relationships Not Affected
Sec. 16. The provisions of this Act shall not be construed to alter
or affect the professional relationship between a person rendering
professional service and a person receiving such service, and all
such confidential relationships enjoyed under this state shall
remain unchanged. Nothing in this Act shall remove or diminish any
rights at law that a person receiving professional service shall
have against a person rendering professional service for errors,
omissions, negligence, incompetence or malfeasance. The
corporation (but not the individual shareholders, officers or
directors) shall be jointly and severally liable with the officer,
employee or agent rendering professional service for such
professional errors, omissions, negligence, incompetence or
malfeasance on the part of such officer, employee or agent when such
officer, employee or agent is in the course of his employment for
the corporation.
Continuity of Existence
Sec. 17. Unless the Articles of Incorporation expressly provide
otherwise, a professional corporation shall continue as a separate
entity for all purposes and for such period of time as is provided
in the Articles of Incorporation until dissolved by a vote of its
shareholders. A professional corporation shall continue to exist
regardless of the death, incompetency, bankruptcy, resignation,
withdrawal, retirement or expulsion of any one or more of its
shareholders or the transfer of any of its shares to any new holder
or the happening of any other event which under the laws of this
state and under like circumstances would cause a dissolution of a
partnership, it being the intent of this Section that such
professional corporation shall have continuity of life independent
of the life or status of its shareholders. No shareholder shall
have power to dissolve the professional corporation by his
independent act of any kind.
Sec. 18. Repealed by Acts 2001, 77th Leg., ch. 757, Sec. 17, eff.
Sept. 1, 2001.
Exemption from Securities Laws
Sec. 19. The sale, issuance or offering of any capital stock of a
professional corporation to persons permitted by the provisions of
this Act to own such capital stock are hereby exempted from all
provisions of the laws of this state, other than this Act, which
provide for supervision, registration or regulation in connection
with the sale, issuance or offering of securities; and the sale,
issuance or offering of any such capital stock to such persons shall
be legal without any action or approval whatsoever on the part of
any official or state regulatory agency authorized to license,
regulate, or supervise the sale, issuance or offering of
securities.
Foreign Professional Corporations
Sec. 19A. (a) A foreign professional legal corporation may apply
for a certificate of authority to perform professional legal
service in this state by filing an application in accordance with
the Texas Business Corporation Act. The Secretary of State may not
issue the certificate unless the name of the corporation or the name
the corporation elects in this state meets the requirements of
Section 8 of this Act. The corporation may not exercise in this
state powers other than the powers provided by Section 7 of this
Act. A shareholder, director, officer, employee, or agent of the
corporation who renders professional legal service in this state on
behalf of the corporation must be licensed or otherwise authorized
to render professional legal service in this state.
(b) A certificate may not be issued to a corporation under this
section unless the application for such certificate of authority
includes a statement that the jurisdiction in which the corporation
is incorporated would permit reciprocal admission of such
corporation if it were incorporated in this state.
Effective Date
Sec. 20. This Act shall be effective on and after January 1, 1970.
Applicability; Expiration
Sec. 21. (a) Except as provided by Title 8, Business Organizations
Code, this Act does not apply to a professional corporation to which
the Business Organizations Code applies.
(b) This Act expires January 1, 2010.
Acts 1969, 61st Leg., p. 2304, ch. 779, eff. Jan. 1, 1970. Amended
by Acts 1975, 64th Leg., p. 243, ch. 92, Sec. 1, eff. April 30, 1975;
Acts 1977, 65th Leg., p. 1613, ch. 630, Sec. 1, eff. Aug. 29, 1977;
Acts 1979, 66th Leg., p. 219, ch. 120, Sec. 16, 17, eff. May 9, 1979;
Acts 1983, 68th Leg., p. 318, ch. 69, Sec. 13, eff. Sept. 1, 1983;
Acts 1985, 69th Leg., ch. 128, Sec. 33, eff. May 20, 1985; Acts
1985, 69th Leg., ch. 371, Sec. 1 to 5, eff. Aug. 26, 1985; Acts
1989, 71st Leg., ch. 801, Sec. 78, 79, eff. Aug. 28, 1989; Acts
1991, 72nd Leg., ch. 901, Sec. 47 to 52, 78 to 82, eff. Aug. 26,
1991; Acts 1999, 76th Leg., ch. 1245, Sec. 1, eff. June 18, 1999;
Acts 2001, 77th Leg., ch. 757, Sec. 17, eff. Sept. 1, 2001.
Sec. 21 added by Acts 2003, 78th Leg., ch. 182, Sec. 7, eff. Jan. 1,
2006.
Art. 1528f. Professional Association Act
Text of article effective until January 1, 2010
Short Title
Sec. 1. This Act may be cited as the Texas Professional Association
Act.
Authority
Sec. 2. (A) Formation. Any one or more persons duly licensed to
practice a profession, including podiatry, dentistry, optometry,
therapeutic optometry, chiropractic, or veterinary medicine, under
the laws of this state may, by complying with this Act, form a
professional association, as distinguished from either a
partnership or a corporation, by associating themselves for the
purpose of performing professional services and dividing the gains
therefrom as stated in articles of association or bylaws.
(B) Licenses. (1) Except as provided by this subsection, all
members of the association shall be licensed to perform the type of
professional service for which the association is formed.
(2) Doctors of medicine and osteopathy licensed by the Texas State
Board of Medical Examiners and podiatrists licensed by the Texas
State Board of Podiatric Medical Examiners may form an association
that is jointly owned by those practitioners to perform a
professional service that falls within the scope of practice of
those practitioners.
(3) Professionals, other than physicians, engaged in related mental
health fields such as psychology, clinical social work, licensed
professional counseling, and licensed marriage and family therapy
may form an association that is jointly owned by those
practitioners to perform professional services that fall within the
scope of practice of those practitioners.
(4) When doctors of medicine, osteopathy, and podiatry or mental
health professionals form an association that is jointly owned by
those practitioners, the authority of each of the practitioners is
limited by the scope of practice of the respective practitioners
and none can exercise control over the other's clinical authority
granted by their respective licenses, either through agreements,
bylaws, directives, financial incentives, or other arrangements
that would assert control over treatment decisions made by the
practitioner. The state agencies exercising regulatory control
over professions to which this subdivision applies continue to
exercise regulatory authority over their respective licenses.
Definitions
Sec. 3. As used in this Act, the term "professional service" means
any type of personal service to the public which requires as a
condition precedent to the rendering of such service the obtaining
of a license, and which service by law cannot be performed by a
corporation. The term "license" includes a license, certificate of
registration or any other evidence of the satisfaction of state
requirements.
Name
Sec. 4. A professional association shall adopt a name which shall be
followed by the word or words "Associated," "Association,"
"Professional Association," "and Associates," or the abbreviation
"Assoc." or "P.A."; provided, and except, however, a professional
association shall not adopt or make use of any name which is
contrary to or in conflict with any law or ethics regulating the
practice or practitioners of any professional service rendered
through or in connection with the professional association.
Powers Concerning Property and Suits
Sec. 5. (A) Property. A professional association may in its own
name invest its funds in real estate, mortgages, stocks, bonds, or
any other type of investment, and may own real or personal property
necessary or appropriate for rendering its professional service.
Any investment or property so owned may be transferred in the
association name by action of the Board of Directors or Executive
Committee.
(B) Suits. An association shall have power to sue and be sued,
complain and defend in its association name.
Licensed Individuals as Employees of Association--Prohibition
Sec. 6. Each individual licensed in this state to perform
professional services who is employed by a professional association
shall remain subject to reprimand or discipline for his conduct
under the provisions of the licensing statute pursuant to which he
is licensed.
Professional Relations
Sec. 7. This Act does not alter any law applicable to the
relationship between a person furnishing professional service and a
person receiving such professional service including liability
arising out of such professional service.
Articles of Association
Sec. 8. (A) Required provisions. The articles of association shall
set forth:
(1) The name and address of the association
(2) The period of duration
(3) The type of professional service to be performed
(4) The names and addresses of each of the original members
(5) A statement that each of the original members is licensed to
perform the type of professional service for which the association
is formed.
(B) Continuity. Articles of association may provide that a
professional association
(1) shall continue as a separate entity independent of its members,
for all purposes, for such period of time as provided in the
articles, or until dissolved by a vote of two-thirds of the members,
and
(2) shall continue notwithstanding the death, insanity,
incompetency, conviction for felony, resignation, withdrawal,
transfer of membership, retirement, or expulsion of any one or more
of the members (except the last surviving member), the admission of
or transfer of membership to any new member or members, or the
happening of any other event, which under the law of this state and
under like circumstances, would work a dissolution of a
partnership.
(C) Power to dissolve. The articles shall provide that no member of
a professional association shall have the power to dissolve the
association by his independent act of any kind.
(D) Optional provisions. The articles of association may set forth
any other provision, not inconsistent with the law, which the
members elect to set forth for the regulation of the internal
affairs of the association.
(E) Execution. The articles of association shall be signed by each
of the members.
Governing Body; Officers
Sec. 9. (A) Board or committee. A professional association
organized pursuant to the provisions of this Act shall be governed
by, and the business and affairs of a professional association
shall be managed under the direction of, a Board of Directors or an
Executive Committee elected by the members, and represented by
officers elected by the Board of Directors or Executive Committee,
so that centralization of management will be assured.
(B) Member's power to bind. No member shall have the power to bind
the association within the scope of the association's business or
profession merely by virtue of his being a member of the
association.
(C) Qualification of officers and board or committee members.
Officers and members of the Board of Directors or Executive
Committee shall be members of the professional association.
Officers need not be members of the Board of Directors or Executive
Committee except that the President shall be a member of the Board
of Directors or Executive Committee.
(D) Bylaws. The members may adopt such bylaws as they may deem
proper, or the power to promulgate bylaws of the association may be
delegated by the articles of association to the Board of Directors
or Executive Committee, as the members may decide.
(E) Members' voting rights. Each member shall have power to cast
such vote or votes at the meeting of the members as the articles of
association shall provide.
(F) Agents and employees. The officers of the professional
association may employ such agents or employees of the association
as they may deem advisable.
(G) Officers. The officers of the association shall include a
President, Vice-President, Secretary, Treasurer, and such other
officers as the Board of Directors or Executive Committee may
determine. Any one person may serve in more than one office
provided that the President and the Secretary of the professional
association shall not be the same person unless the association has
only one member.
Shares or Units of Ownership--Transfer
Sec. 10. Shares or units of ownership in a professional association
shall be transferable to persons licensed to perform the same type
of professional service as that for which the professional
association was formed.
Regulation of Practice of Law
Sec. 11. The manner in which lawyers practice law under this Act is
subject to the powers of the Supreme Court to regulate the practice
of law.
Filing of Articles of Association
Sec. 12. (A) The original and a copy of the articles of association
shall be delivered to the Secretary of State. If the Secretary of
State finds that the articles of association conform to law, he
shall, when all fees have been paid as required by law:
(1) Endorse on the original and the copy the word "Filed," and the
month, day, and year of the filing thereof.
(2) File the original in his office.
(3) Issue a certificate of association to which he shall affix the
copy.
(B) The certificate of association, together with the copy of the
articles of association affixed thereto by the Secretary of State,
shall be delivered to the members or their representatives.
Effect of Issuance of Certificate of Association
Sec. 13. Upon the issuance of the certificate of association, the
association's existence shall begin.
Amendment of Articles of Association
Sec. 14. (A) Authority to amend. A professional association may
amend its articles of association, from time to time, in accordance
with the procedure for amendment stated therein or if none is stated
therein, by two-thirds vote of its members.
(B) Acts not requiring amendment. Changes in membership or
transfer of shares or units of ownership shall not require
amendment.
Articles of Amendment
Sec. 15. The articles of amendment shall be executed on behalf of
the association by an officer and shall set forth:
(1) The name and address of the association;
(2) If the amendment alters any provision of the original or amended
articles of association, an identification by reference or
description of the altered provision and a statement of its text as
it is amended to read. If the amendment is an addition to the
original or amended articles of association, a statement of that
fact and the full text of each provision added;
(3) The date of the adoption of the amendment; and
(4) A statement that the amendment was adopted in accordance with
the procedure for amendment stated in the articles of association,
or, if none is stated therein, a statement that the amendment was
adopted by two-thirds vote of its members.
Filing of Articles of Amendment
Sec. 16. (A) The original and a copy of the articles of amendment
shall be delivered to the Secretary of State. If the Secretary of
State finds that the articles of amendment conform to law, he shall,
when all fees have been paid as required by law:
(1) Endorse on the original and the copy the word "Filed," and the
month, day, and year of the filing thereof.
(2) File the original in his office.
(3) Issue a certificate of amendment to which he shall affix the
copy.
(B) The certificate of amendment, together with the copy of the
articles of amendment affixed thereto by the Secretary of State,
shall be delivered to the association or its representatives.
Effect of Certificate of Amendment
Sec. 17. (A) Issuance. Upon the issuance of the certificate of
amendment by the Secretary of State, the amendment shall become
effective and the articles of association shall be deemed to be
amended accordingly.
(B) Prior rights. No amendment shall affect any existing cause of
action in favor of or against the association, or any pending suit
to which the association shall be a party, or the existing rights of
persons other than members. If the association name is changed by
amendment, no suit brought by or against the association under its
former name shall abate for that reason.
Articles of Dissolution
Sec. 18. The articles of dissolution shall be executed on behalf of
the association by an officer. If there are no living officers of
the association, the articles shall be executed by the legal
representative of the last surviving officer. The articles of
dissolution shall set forth:
(1) The name and address of the association;
(2) The names and respective addresses of its officers;
(3) The names and respective addresses of the members of its Board
of Directors or Executive Committee; and
(4) A statement that the association is dissolving in accordance
with its articles of association or, if there is no dissolution
provision in the articles, by two-thirds vote of its members.
Filing of Articles of Dissolution
Sec. 19. (A) The original and a copy of the articles of dissolution
shall be delivered to the Secretary of State. If the Secretary of
State finds that the articles of dissolution conform to law, he
shall, when all fees have been paid as required by law:
(1) Endorse on the original and the copy the word "Filed," and the
month, day, and year of the filing thereof.
(2) File the original in his office.
(3) Issue a certificate of dissolution to which he shall affix the
copy.
(B) The certificate of dissolution, together with the copy of the
articles of dissolution affixed thereto by the Secretary of State,
shall be delivered to the association or its representatives.
Effect of Certificate of Dissolution
Sec. 20. Upon the issuance of the certificate of dissolution by the
Secretary of State, the dissolution shall become effective and the
existence of the association shall cease except for the purpose of
suits, other proceedings and acts necessary for the winding up of
the association.
Annual Statement
Sec. 21. A professional association shall in June of each year file
with the Secretary of State a statement showing the name and address
of the association; the names and addresses of all members of the
association, and all officers and all members of the Board of
Directors or Executive Committee; and shall state that all members
are licensed to perform the type of professional service for which
the association is formed. The statement shall be on such form as
the Secretary of State shall prescribe and furnish. It shall be
executed on behalf of the association by an officer.
Fees
Sec. 22. The Secretary of State is authorized and required to
collect for the use of the state the following fees:
(1) Filing articles of association and issuing a certificate of
association, Two Hundred Dollars ($200.00)
(2) Filing annual statement, Thirty-Five Dollars ($35.00)
(3) Filing any other document, the fee provided for the filing of a
similar document under the Texas Business Corporation Act.
Existing Associations
Sec. 23. Any existing association may become subject to this Act by
complying with its terms and filing requirements.
Association Liability
Sec. 24. Nothing in this Act shall remove or diminish any rights at
law that a person receiving professional services shall have
against a person furnishing professional services for errors,
omissions, negligence, incompetence or malfeasance. The
association (but not the individual members, officers or directors)
shall be jointly and severally liable with the officer or employee
furnishing professional services for such professional errors,
omissions, negligence, incompetence or malfeasance on the part of
such officer or employee when such officer or employee is in the
course of his employment for the association.
Applicability of Business Corporation Act
Sec. 25. The Texas Business Corporation Act shall be applicable to
professional associations, except to the extent that the provisions
of the Texas Business Corporation Act conflict with the provisions
of this Act; and professional associations shall enjoy the powers
and privileges and be subject to the duties, restrictions and
liabilities of business corporations except insofar as the same may
be limited or enlarged by this Act. This Act shall take precedence
in the event of any conflict with the provisions of the Texas
Business Corporation Act or the law.
Penalty for Signing False Document
Sec. 26. (A) A person commits an offense if the person signs a
document the person knows is false in any material respect with
intent that the document be delivered on behalf of a professional
association to the Secretary of State for filing.
(B) An offense under this section is a Class A misdemeanor.
Applicability; Expiration
Sec. 27. (A) Except as provided by Title 8, Business Organizations
Code, this Act does not apply to a professional association to which
the Business Organizations Code applies.
(B) This Act expires January 1, 2010.
Acts 1969, 62nd Leg., p. 2513, ch. 840, eff. June 18, 1969. Amended
by Acts 1971, 62nd Leg., p. 888, ch. 118, Sec. 1 to 6, eff. May 10,
1971; Acts 1979, 66th Leg., p. 220, ch. 120, Sec. 18 to 22, eff. May
9, 1979; Acts 1983, 68th Leg., p. 319, ch. 69, Sec. 14, eff. Sept.
1, 1983; Acts 1989, 71st Leg., ch. 801, Sec. 80, eff. Aug. 28, 1989;
Acts 1991, 72nd Leg., ch. 672, Sec. 1, eff. Aug. 26, 1991; Acts
1993, 73rd Leg., ch. 215, Sec. 2.22 to 2.25, 2.27, eff. Sept. 1,
1993; Acts 1997, 75th Leg., ch. 160, Sec. 1, eff. May 20, 1997;
Acts 1997, 75th Leg., ch. 375, Sec. 51, eff. Sept. 1, 1997; Acts
1999, 76th Leg., ch. 415, Sec. 1, eff. Sept. 1, 1999; Acts 1999,
76th Leg., ch. 1245, Sec. 2, eff. June 18, 1999; Acts 2001, 77th
Leg., ch. 508, Sec. 1, eff. June 11, 2001; Acts 2001, 77th Leg., ch.
883, Sec. 1, eff. June 14, 2001.
Sec. 2(A) amended by Acts 2003, 78th Leg., ch. 1146, Sec. 1, eff.
June 20, 2003; Sec. 27 added by Acts 2003, 78th Leg., ch. 182, Sec.
8, eff. Jan. 1, 2006.
Art. 1528g. Business development corporations
Definitions
Sec. 1. In this Act, unless the context requires a different
definition:
(1) "Corporation" means a business development corporation created
under the terms of this Act.
(2) "Board of directors" means the board of directors of a business
development corporation.
(3) "Financial institution" means any banking corporation or trust
company, building and loan association, governmental agency,
insurance company, or related corporation, partnership,
foundation, or other institution engaged primarily in lending or
investing funds.
(4) "Member" means any financial institution authorized to do
business in this state which shall undertake to lend money to a
corporation created under the terms of this Act.
(5) "Loan limit" means the maximum amount permitted to be
outstanding at one time on loans by a member to a business
development corporation.
Incorporation
Sec. 2. (a) Subject to the provisions of the Texas Securities Act,
25 or more persons, a majority of whom shall be residents of this
state, may form a business development corporation for the purpose
of promoting, developing, and advancing the prosperity and economic
welfare of this state.
(b) The corporation may be organized either as a profit making
corporation under the Texas Business Corporation Act, or as a
nonprofit corporation under the Texas Non-Profit Corporation Act.
(c) The articles of incorporation shall set forth:
(1) the name of the corporation, which shall include the words
"Business Development Corporation";
(2) the purpose or purposes for which the corporation is organized,
which shall include the following:
The purposes of the corporation shall be to promote, stimulate,
develop, and advance the business prosperity and economic welfare
of this state and its citizens; to encourage and assist through
loans, investments, or other business transactions, in the location
of new business and industry in this state and to rehabilitate and
assist existing industry; and so to stimulate and assist in the
expansion of all kinds of business activity which will tend to
promote the business development and maintain the economic
stability of this state, provide maximum opportunities for
employment, encourage thrift, and improve the standard of living of
the citizens of this state; similarly, to cooperate and act in
conjunction with other organizations, public or private, in the
promotion and advancement of industrial, commercial, agricultural,
and recreational developments in this state; and to provide
financing for the promotion, development, and conduct of all kinds
of business activity in this state"; and
(3) any other information required by the Texas Business
Corporation Act, if the corporation is organized as a profit making
corporation, or by the Texas Non-Profit Corporation Act, if the
corporation is organized as a nonprofit corporation.
Powers
Sec. 3. (a) In addition to the powers conferred on business
corporations generally by the Texas Business Corporation Act, or if
the corporation is organized as a nonprofit corporation, by the
Texas Non-Profit Corporation Act, the corporation has the following
powers:
(1) to elect, appoint, and employ officers, agents, and employees;
to make contracts and incur liabilities for any of the purposes of
the corporation;
(2) to borrow money on a secured or unsecured basis to carry out any
of the purposes of the corporation; to issue therefor its bonds,
debentures, notes, or other evidences of indebtedness, whether
secured or unsecured, and to secure any evidence of indebtedness by
mortgage, pledge, deed of trust, or other lien on its property,
franchises, rights, and privileges of every kind and nature, or any
part thereof or interest therein, without securing stockholder or
member approval;
(3) to make secured or unsecured loans and to establish and regulate
the terms and conditions of these loans and the charges for interest
or service connected therewith; however, the corporation shall not
approve any application for a loan unless and until the person
applying for the loan demonstrates that he has applied for the loan
through ordinary banking channels and that the loan has been
refused by at least two banks or other financial institutions; it
is the intention of the Legislature not to take from the lending
institutions of this state any loans desired by these institutions
generally in the course of their business;
(4) to purchase, receive, hold, lease, or otherwise acquire, and to
sell, convey, transfer, lease, or otherwise dispose of real and
personal property, together with such rights and privileges as may
be incidental and appurtenant thereto and the use thereof,
including, but not restricted to, any real or personal property
acquired by the corporation from time to time in the satisfaction of
debts or enforcement of obligations;
(5) to acquire improved or unimproved real estate for the purpose of
constructing industrial plants or other business establishments
thereon or for the purpose of disposing of such real estate to
others for the construction of industrial plants or other business
establishments; and to acquire, construct or reconstruct, alter,
repair, maintain, operate, sell, convey, transfer, lease, or
otherwise dispose of industrial plants or business establishments;
(6) to protect its position as creditor by acquiring the goodwill,
business, rights, real and personal property including stock,
shares, bonds, debentures, notes, and other evidences of
indebtedness, and other assets or any part thereof or interest
therein, of any persons, firms, corporations, joint-stock
companies, associations, or trusts to whom or to which the
corporation has loaned money, and to assume, undertake, or pay the
obligations, debts, and liabilities of any such person, firm,
corporation, joint-stock company, or trust;
(7) to mortgage, pledge, or otherwise encumber any property, right,
or thing of value, acquired pursuant to the powers contained in
paragraphs (4), (5), or (6), as security for the payment of any part
of the purchase price thereof;
(8) to promote the establishment of local development corporations
in the various communities of this state; to enter into agreements
with them; and to cooperate with, assist, and otherwise encourage
such local foundations;
(9) to participate with any duly authorized federal lending agency
in the making of loans.
(b) Any corporation organized under the provisions of this Act
shall be a state development company as defined in the Small
Business Investment Act of 1958, as amended, Public Law 85-699,
85th Congress, or any other similar Federal legislation, and shall
be authorized to operate on a statewide basis.
Participation
Sec. 4. All natural persons and corporations authorized to conduct
business in this state, including without any implied limitation
public utility companies, insurance and casualty companies, and
foreign corporations licensed to do business in this state, and all
trusts, may acquire, purchase, hold, sell, assign, transfer,
mortgage, pledge, or otherwise dispose of any bonds, securities, or
other evidences of indebtedness created by, or the shares of
capital stock of, the corporation, and while owners of the stock,
may exercise all the rights, powers, and privileges of ownership,
including the right to vote thereon.
Membership
Sec. 5. (a) Any financial institution may become a member of the
corporation and may make loans to the corporation as provided by
this Act.
(b) Any financial institution may request membership in the
corporation by making application to the board of directors in a
manner prescribed by the board of directors, and membership shall
be effective upon acceptance of the application by the board of
directors.
(c) Any financial institution which becomes a member of the
corporation may acquire, purchase, hold, sell, assign, transfer,
mortgage, pledge, or otherwise dispose of, any bonds, securities,
or other evidences of indebtedness created by, or the shares of the
capital stock of, the corporation, and while owner of the stock may
exercise all the rights, powers, and privileges of ownership,
including the right to vote thereon. However, no member may acquire
capital stock in an amount greater than 10 percent of the loan limit
of that member. The amount of capital stock of the corporation
which a member may acquire is in addition to the amount of capital
stock in corporations which the member may otherwise acquire.
(d) A financial institution which is not a member of the corporation
may not acquire any shares of the capital stock of the corporation.
Loans to the Corporation
Sec. 6. (a) Each member of the corporation shall make loans to the
corporation when called upon by it to do so on such terms and
conditions as shall be approved from time to time by the board of
directors.
(b) All loan limits shall be established at the thousand-dollar
amount nearest to the amount computed in accordance with the
provisions of this section.
(c) No loan to the corporation may be made if immediately thereafter
the total amount of the obligations of the corporation would exceed
50 times the capital of the corporation. For the purposes of this
subsection, the capital of the corporation includes the amount of
the outstanding capital stock of the corporation, whether common or
preferred, and the earned or paid-in surplus of the corporation.
(d) The total amount outstanding on loans to the corporation made by
any member at any one time, when added to the amount of the
investment in the capital stock of the corporation then held by the
member, shall not exceed:
(1) twenty percent of the total amount then outstanding on loans to
the corporation by all members, including outstanding amounts
validly called for loan but not yet loaned;
(2) the following limit, to be determined as of the time such member
becomes a member or at any time requested by a member on the basis of
the audited balance sheet of such member at the close of its fiscal
year immediately preceding its application for membership, or, in
the case of an insurance company, its last annual statement to the
State Board of Insurance: an amount of two percent of the capital
and surplus of commercial banks and trust companies or $750,000,
whichever is the lesser amount; an amount of one percent of the
total outstanding loans made by a building and loan or savings and
loan association; an amount of one percent of the capital and
unassigned surplus of stock insurance companies, except fire
insurance companies; an amount of one percent of the unassigned
surplus of mutual insurance companies, except fire insurance
companies; an amount of one-tenth of one percent of the assets of
fire insurance companies; and such limits as may be approved by the
board of directors of the corporation for any government pension
fund or for other financial institutions.
(e) Subject to Subsection (d) of this section, each call made by the
corporation shall be prorated among the members of the corporation
in substantially the same proportion that the adjusted loan limit
of each member bears to the aggregate of the adjusted loan limits of
all members. The adjusted loan limit of a member shall be the
amount of such member's loan limit, reduced by the balance of
outstanding loans made by such member to the corporation and the
investment in capital stock of the corporation held by such member
at the time of such call.
(f) All loans to the corporation by members shall be evidenced by
bonds, debentures, notes, or other evidences of indebtedness of the
corporation, which shall be freely transferable at all times, and
which shall bear interest at a rate of not less than one-quarter of
one percent in excess of the rate of interest determined by the
board of directors to be the prime rate prevailing at the date of
issuance thereof on unsecured commercial loans.
Withdrawal
Sec. 7. Upon written notice to the board of directors six months in
advance, a member may withdraw from the corporation at the
expiration date of the notice. A member is not obligated to make
any loans to the corporation pursuant to calls made subsequent to
the expiration date, but a member shall fulfill any obligations
which have accrued or for which commitments have been made before
the expiration date.
Powers of Members and Stockholders; Voting
Sec. 8. (a) The stockholders and the members of the corporation
shall have the following powers:
(1) to determine the number of and elect the directors as provided
by Section 9 of this Act;
(2) to make, amend, and repeal bylaws of the corporation; and
(3) to exercise any other powers of the corporation which may be
conferred on the stockholders and the members by the bylaws.
(b) Each stockholder has one vote, in person or by proxy, for each
share of capital stock held by the stockholder, and each member has
one vote, in person or by proxy; however, any member with a loan
limit greater than $1,000 has one additional vote, in person or by
proxy, for each additional $1,000 which the member may have
outstanding on loans to the corporation at any one time as
determined under the provisions of Section 6 of this Act.
Officers and Directors
Sec. 9. (a) The organization, control, and management of the
corporation are vested in a board of not less than 15 nor more than
21 directors.
(b) The board of directors may exercise all the powers of the
corporation except those conferred upon the stockholders or members
by law or by the bylaws of the corporation.
(c) The board of directors shall choose and appoint a president, a
treasurer, and all other agents and officers of the corporation and
shall fill all vacancies except vacancies in the board of
directors, which shall be filled as provided by Subsection (g) of
this section.
(d) The board of directors shall be named in the first instance by
the incorporators and shall be elected thereafter at each annual
meeting of the corporation, or if no annual meeting is held at the
time fixed by the bylaws, at a special meeting held in lieu of the
annual meeting.
(e) At any annual meeting or special meeting held in lieu of the
annual meeting, the members of the corporation shall elect
two-thirds of the directors, and the stockholders shall elect the
remaining directors.
(f) The directors shall hold office until the next annual meeting or
special meeting of the corporation held in lieu of the annual
meeting after their election and until their successors are elected
and have qualified, unless sooner removed in accordance with the
provisions of the bylaws.
(g) Any vacancy in the office of a director elected by the members
shall be filled by the directors elected by the members, and any
vacancy in the office of a director elected by the stockholders
shall be filled by the directors elected by the stockholders.
Surplus
Sec. 10. (a) The corporation shall set apart as earned surplus not
less than 10 percent of its net earnings each year, until such
surplus, with any unimpaired surplus paid in, is equal to one-half
of the amount paid in on the capital stock then outstanding. The
surplus shall be kept to secure against losses and contingencies,
and whenever it becomes impaired, it shall be reimbursed in the
manner provided for its accumulation.
(b) Net earnings and surplus shall be determined by the board of
directors after providing for the required reserves as the
directors deem advisable, and the determination of the directors
made in good faith shall be conclusive on all persons.
Depositories
Sec. 11. (a) The corporation may deposit any of its funds in any
banking institution which has been designated as a depository by a
vote of the majority of the directors present at an authorized
meeting of the board of directors, exclusive of any director who is
an officer or director of the depository so designated.
(b) The corporation may not receive money on deposit.
Report of Condition
Sec. 12. The corporation shall make annual reports of its condition
to the banking commissioner and the State Board of Insurance, and
the corporation shall furnish any information which may from time
to time be required by the secretary of state.
Applicability
Sec. 13. Except as provided by Title 8, Business Organizations
Code, this Act does not apply to a business development corporation
to which the Business Organizations Code applies.
Acts 1971, 62nd Leg., p. 2601, ch. 853, eff. Aug. 30, 1971.
Sec. 13 added by Acts 2003, 78th Leg., ch. 182, Sec. 15, eff. Jan. 1,
2006.
Art. 1528h. Dealing in acceptances
Any officer, director, employé, or agent of any corporation
organized for the purpose of contracting with reference to, or
otherwise dealing in acceptances, bills of exchange, bills of
lading, warehouse and other receipts growing out, or to be used in
aid, of the transportation, warehousing, distribution, or
financing of agricultural products, who shall enter into, or cause
such corporation to enter into, any contract of acceptance,
guaranty, indorsement, or suretyship, without complying with the
laws of this State regulating such contracts, shall be fined not
less than two hundred nor more than one thousand dollars, or be
imprisoned in jail not less than three months nor more than one
year, or both.
Acts 1919, 36th Leg., 2nd C.S., p. 21, ch. 4, Sec. 2.
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 400,000 or inside or outside the
limits of the county that created the corporation if the county has
a population of more than 400,000. 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.
Art. 1528n. Texas Limited Liability Company Act
Text of article effective until January 1, 2010
PART ONE
Short Title, Captions, Parts, Articles, Sections, Subsections, and
Paragraphs
Art. 1.01. A. This act shall be known and may be cited as the "Texas
Limited Liability Company Act."
B. The divisions of this act into Parts, Articles, Sections,
Subsections and Paragraphs and the use of captions in connection
therewith are solely for the convenience and shall have no legal
effect in construing the provisions of this Act.
C. This act has been organized and subdivided in the following
manner:
(1) The act is divided into Parts, containing groups of related
Articles. Parts are numbered consecutively with cardinal numbers.
(2) The act is also divided into Articles, numbered consecutively
with Arabic numerals.
(3) Articles are divided into Sections. The Sections within each
Article are numbered consecutively with capital letters.
(4) Sections are divided into subsections. The subsections within
each Section are numbered consecutively with Arabic numerals
enclosed in parentheses.
(5) Subsections are divided into paragraphs. The paragraphs within
each subsection are numbered consecutively with lower case letters
enclosed in parentheses.
Definitions
Art. 1.02. A. As used in this Act, unless the context otherwise
requires, the term:
(1) "Bankrupt" means bankrupt under the federal Bankruptcy Act or
insolvent under any state insolvency act.
(2) "Court" includes every court and judge having jurisdiction in
the action.
(3) "Limited Liability Company" or "Company" means a limited
liability company organized and existing under this chapter.
(4) "Person" includes an individual, corporation, business trust,
estate, trust, custodian, trustee, executor, administrator,
nominee, partnership, registered limited liability partnership,
limited partnership, association, limited liability company,
government, governmental subdivision, governmental agency,
governmental instrumentality, and any other legal or commercial
entity, in its own or representative capacity. Any of the foregoing
entities may be formed under the laws of this state or any other
jurisdiction.
(5) "Real Property" means land and any interest or estate in land.
(6) "Business" means every trade and occupation or profession.
(7) "Conveyance" means every assignment, lease, mortgage, or
incumbrance.
(8) "TBCA" means the Texas Business Corporation Act as amended and
as it may hereafter be amended.
(9) "Foreign Limited Liability Company" means an entity formed
under the laws of a jurisdiction other than this state (a) that is
characterized as a limited liability company by such laws or (b)
although not so characterized by such laws, that elects to procure a
certificate of authority pursuant to Article 7.01 of this act, that
is formed under laws which provide that some or all of the persons
entitled to receive a distribution of the assets thereof upon the
entity's dissolution or otherwise or to exercise voting rights with
respect to an interest in the entity shall not be liable for the
debts, obligations or liabilities of the entity and which is not
eligible to become authorized to do business in this state under any
other statute.
(10) "Merger" means (a) the division of a domestic limited
liability company into two or more new domestic limited liability
companies or into a surviving limited liability company and one or
more new domestic or foreign limited liability companies or other
entities, or (b) the combination of one or more domestic limited
liability companies with one or more domestic or foreign limited
liability companies or other entities resulting in (i) one or more
surviving domestic or foreign limited liability companies or other
entities, (ii) the creation of one or more new domestic or foreign
limited liability companies or other entities, or (iii) one or more
surviving domestic or foreign limited liability companies or other
entities and the creation of one or more new domestic or foreign
limited liability companies or other entities.
(11) "Conversion" means:
(a) the continuance of a domestic limited liability company as, and
in the organizational form of, a foreign limited liability company
or other entity; or
(b) the continuance of a foreign limited liability company or other
entity as, and in the organizational form of, a domestic limited
liability company.
(12) "Converted entity" means any domestic or foreign limited
liability company or other entity to which a converting entity has
converted or intends to convert as permitted by Article 10.08 of
this Act.
(13) "Converting entity" means any domestic or foreign limited
liability company or other entity that has converted or intends to
convert as permitted by Article 10.08 of this Act.
(14) "Other entity" means any entity, whether organized for profit
or not, that is a corporation, limited or general partnership,
limited liability company (other than a domestic or foreign limited
liability company), real estate investment trust, joint venture,
joint stock company, cooperative, association, bank, trust,
insurance company, or other legal entity organized pursuant to the
laws of this state or any other state or country.
PART TWO
Purposes
Art. 2.01. A. A limited liability company formed under this Act may
engage in any lawful business unless a more limited purpose is
stated in its articles of organization or regulations.
B. A limited liability company engaging in a business that is
subject to regulation by another Texas statut
