APPROPRIATIONS AND REVENUE SOURCES: PUBLIC FACILITIES CORPORATIONS

Authorization

A governing body of a sponsor, including a college district, that determines that it is in the public interest and to the benefit of the sponsor’s residents and the citizens of this state that a corporation be created to finance, refinance, or provide the costs of public facilities of the sponsor may by resolution stating that determination authorize and approve the creation of a corporation to act on behalf of the sponsor and approve proposed articles of incorporation for the corporation as described by Local Government Code Chapter 303, Subchapter B. Local Gov’t Code 303.023

Purpose

A sponsor may create one or more nonmember, nonstock, nonprofit public facility corporations to:

1. Issue bonds under Local Government Code Chapter 303, including bonds to purchase sponsor obligations;

2. Finance public facilities on behalf of the sponsor; or

3. Loan the proceeds of the obligations to other entities to accomplish the purposes of the sponsor.

Local Gov’t Code 303.021(a)

Use of the

Corporation

A sponsor may use the corporation to acquire, construct, rehabilitate, renovate, repair, equip, furnish, or place in service

public facilities or to issue bonds on the sponsor’s behalf to finance the cost of the public facilities. Local Gov’t Code 303.021(b)

Residences

A corporation or a sponsor may finance, own, or operate a multifamily residential development only if:

1. The corporation or sponsor complies with all applicable provisions of Local Government Code Chapter 303; and

2. The development is located inside the boundaries of the sponsor without regard to whether the sponsor is authorized

to own property or provide services outside the boundaries of the sponsor.

Local Gov’t Code 303.021(d)

Status as a Public

Facility Corporation

A corporation created under Local Government Code Chapter 303 must remain a public facility corporation under Chapter 303. Local Gov’t Code 303.021(c)

Conflicts of Interest

A member of the board of a corporation or a member of the governing body of a sponsor of a corporation is subject to the same restrictions as a local public official under Local Government Code Chapter 171. Local Gov’t Code 303.0415