CHAPTER 303. PUBLIC FACILITY CORPORATIONS
LOCAL GOVERNMENT CODE
TITLE 9. PUBLIC BUILDINGS AND GROUNDS
SUBTITLE C. PUBLIC BUILDING PROVISIONS APPLYING TO MORE THAN ONE
TYPE OF LOCAL GOVERNMENT
CHAPTER 303. PUBLIC FACILITY CORPORATIONS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 303.001. SHORT TITLE. This chapter may be cited as the
Public Facility Corporation Act.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 11, eff. Sept. 1,
1999.
Sec. 303.002. PURPOSE; CONSTRUCTION. (a) The purpose of this
chapter is to authorize the creation and use of public facility
corporations with the broadest possible powers to finance or to
provide for the acquisition, construction, rehabilitation,
renovation, repair, equipping, furnishing, and placement in
service of public facilities in an orderly, planned manner and at
the lowest possible borrowing costs.
(b) The legislature intends that a corporation created under
this chapter be a public corporation, constituted authority, and
instrumentality authorized to issue bonds on behalf of its
sponsor for the purposes of Section 103, Internal Revenue Code of
1986 (26 U.S.C. Section 103). This chapter and the rules and
rulings issued under this chapter shall be construed according to
this intent.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 11, eff. Sept. 1,
1999.
Sec. 303.003. DEFINITIONS. In this chapter:
(1) "Board of directors" means the board of directors of a
corporation.
(2) "Bonds" includes notes, interim certificates, or other
evidences of indebtedness of a corporation issued or incurred
under this chapter.
(3) "Corporation" means a public facility corporation created
and existing under this chapter.
(4) "Credit agreement" means a loan agreement, revolving credit
agreement, agreement establishing a line of credit, letter of
credit, reimbursement agreement, insurance contract, commitment
to purchase bonds or sponsor obligations, purchase or sale
agreement, or commitment or other contract or agreement
authorized and approved by the board of directors of a
corporation in connection with the authorization, issuance,
incurrence, sale, security, exchange, payment, purchase, or
redemption of bonds or interest on bonds.
(5) "Director" means a member of a board of directors.
(6) "Housing authority" means a public corporation created under
Chapter 392.
(7) "Public facility" means any real, personal, or mixed
property, or an interest in property devoted or to be devoted to
public use, and authorized to be financed, refinanced, or
provided by sponsor obligations.
(8) "Resolution" means a resolution, order, ordinance, or other
official action by the governing body of a sponsor.
(9) "School district" means a political subdivision created
under Section 3, Article VII, Texas Constitution.
(10) "Special district" means:
(A) a district created under Section 52, Article III, or Section
59, Article XVI, Texas Constitution;
(B) a hospital district or authority; or
(C) a junior college district authorized by Chapter 130,
Education Code.
(11) "Sponsor" means a municipality, county, school district,
housing authority, or special district that causes a corporation
to be created to act in accordance with this chapter.
(12) "Sponsor obligation" means an evidence of indebtedness or
obligation that a sponsor issues or incurs to finance, refinance,
or provide a public facility, including bonds, notes, warrants,
certificates of obligation, leases, and contracts authorized by
Section 303.041 and Subchapter C.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 11, eff. Sept. 1,
1999.
Sec. 303.004. ADOPTION OF ALTERNATE PROCEDURE IN CASE OF
CONSTITUTIONAL VIOLATION. If a court holds that a procedure
under this chapter violates the federal or state constitution, a
corporation or its sponsor by resolution may provide an alternate
procedure that conforms to the constitution.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 11, eff. Sept. 1,
1999.
Sec. 303.005. EFFECT OF CHAPTER ON OTHER LAW. (a) This chapter
does not limit the police power provided by law to this state or
a municipality or other political subdivision of this state, or
an official or agency of this state or of a municipality or other
political subdivision of this state, over property of a
corporation.
(b) A sponsor or corporation may use other law not in conflict
with this chapter to the extent convenient or necessary to carry
out a power expressly or impliedly granted by this chapter.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 11, eff. Sept. 1,
1999.
Sec. 303.006. LIMITATION OF CHAPTER. This chapter does not
authorize a sponsor to issue a sponsor obligation, use a letter
of credit, or mortgage a public facility.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 11, eff. Sept. 1,
1999.
SUBCHAPTER B. CREATION AND OPERATION OF PUBLIC FACILITY
CORPORATION
Sec. 303.021. AUTHORITY TO CREATE. (a) A sponsor may create
one or more nonmember, nonstock, nonprofit public facility
corporations to:
(1) issue bonds under this chapter to purchase sponsor
obligations;
(2) finance public facilities on behalf of its sponsor; or
(3) loan the proceeds of the obligations to other entities to
accomplish the purposes of the sponsor.
(b) A sponsor may use the corporation to:
(1) acquire, construct, rehabilitate, renovate, repair, equip,
furnish, or place in service public facilities; or
(2) issue bonds on the sponsor's behalf to finance the costs of
the public facilities.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 11, eff. Sept. 1,
1999.
Sec. 303.022. CREATION UNDER OTHER LAW. A nonprofit corporation
created by a housing authority under the Texas Non-Profit
Corporation Act (Article 1396-1.01 et seq., Vernon's Texas Civil
Statutes) is considered a corporation under this chapter and has
the rights and powers necessary or convenient to accomplish a
corporation's purposes under this chapter.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 11, eff. Sept. 1,
1999.
Sec. 303.023. PROCEDURE. A governing body of a sponsor 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:
(1) authorize and approve the creation of a corporation to act
on behalf of the sponsor; and
(2) approve proposed articles of incorporation for the
corporation.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 11, eff. Sept. 1,
1999.
Sec. 303.024. ARTICLES OF INCORPORATION. (a) The articles of
incorporation of the corporation must include:
(1) the corporation's name;
(2) a statement that the corporation is a nonprofit public
corporation;
(3) the duration of the corporation, which may be perpetual;
(4) a statement that the purpose of the corporation is to assist
its sponsor in financing, refinancing, or providing public
facilities;
(5) a statement that the corporation has no members and is a
nonstock corporation;
(6) the street address of the corporation's initial registered
office and the name of its initial registered agent at that
address;
(7) the number of directors on the initial board of directors
and those directors' names and addresses;
(8) each incorporator's name and street address;
(9) the sponsor's name and address; and
(10) a statement that the sponsor has specifically authorized
the corporation to act on its behalf to further the public
purpose set forth in the articles of incorporation and has
approved the articles of incorporation.
(b) The corporate powers listed in this chapter are not required
to be included in the articles of incorporation.
(c) The articles of incorporation may include provisions for the
regulation of the internal affairs of the corporation, including
a provision required or permitted by this chapter to be in the
bylaws.
(d) Unless the articles of incorporation provide that a change
in the number of directors may be made only by amendment to those
articles, a change may be made by amendment to the bylaws.
(e) A provision of the articles of incorporation that requires
the vote or concurrence of a greater proportion of the board of
directors than this chapter controls over this chapter.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 11, eff. Sept. 1,
1999.
Sec. 303.025. CERTIFICATE OF INCORPORATION; BEGINNING OF
CORPORATE EXISTENCE. (a) The incorporators shall deliver to the
secretary of state the original and two copies of the articles of
incorporation and a certified copy of the resolution of the
sponsor's governing body approving the articles of incorporation.
(b) If the secretary of state finds that the articles of
incorporation comply with this chapter and have been approved by
the sponsor's governing body, the secretary of state, on payment
of the fees required by this chapter, shall:
(1) write "filed" on the original and each copy of the articles
of incorporation and the month, day, and year of the filing;
(2) file the original in the office of the secretary of state;
and
(3) issue two certificates of incorporation with a copy of the
articles of incorporation attached to each.
(c) The secretary of state shall deliver a certificate of
incorporation, with a copy of the articles of incorporation
attached, to the incorporators or their representatives and to
the sponsor's governing body.
(d) The corporation's existence begins on issuance of the
certificate of incorporation.
(e) The certificate of incorporation is conclusive evidence that
all conditions precedent required to be performed by the
incorporators and by the sponsor have been performed and that the
corporation has been incorporated under this chapter.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 11, eff. Sept. 1,
1999.
Sec. 303.026. ORGANIZATIONAL MEETING. (a) After issuance of
the certificate of incorporation and at the call of a majority of
the incorporators, the board of directors named in the articles
of incorporation shall hold an organizational meeting in this
state to adopt bylaws, to elect officers, and for any other
purpose.
(b) Not later than the sixth day before the date of the meeting,
the incorporators shall mail, postage prepaid, notice to each
director of the time and place of the meeting.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 11, eff. Sept. 1,
1999.
Sec. 303.027. AMENDMENT OF ARTICLES OF INCORPORATION. (a)
Articles of incorporation may be amended to contain a provision
that is lawful under this chapter if the sponsor's governing body
by appropriate resolution determines that the amendment is
advisable and authorizes or directs that an amendment be made.
(b) The corporation's president or vice president and the
secretary or clerk of the sponsor's governing body shall execute
articles of amendment on behalf of the corporation. An officer
signing the articles of amendment shall verify those articles.
(c) The articles of amendment must include:
(1) the name of the corporation;
(2) if the amendment alters a provision of the original or
amended articles of incorporation, an identification by reference
or description of the altered provision and a statement of its
text as amended;
(3) if the amendment is an addition to the original or amended
articles of incorporation, a statement of that fact and the full
text of each provision;
(4) the name and address of the sponsor;
(5) a statement that the amendment was authorized by the
sponsor's governing body; and
(6) the date of the meeting at which the governing body adopted
or approved the amendment.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 11, eff. Sept. 1,
1999.
Sec. 303.028. CERTIFICATE OF AMENDMENT. (a) The original and
two copies of the articles of amendment and a certified copy of
the resolution of the sponsor's governing body authorizing the
articles shall be delivered to the secretary of state.
(b) If the secretary of state finds that the articles of
amendment comply with this chapter and are authorized by the
sponsor's governing body, the secretary of state, on payment of
the fees required by this chapter, shall:
(1) write "filed" on the original and on each copy of the
articles of amendment and the month, day, and year of the filing;
(2) file the original in the office of the secretary of state;
and
(3) issue two certificates of amendment with a copy of the
articles of amendment attached to each.
(c) The secretary of state shall deliver to the corporation or
its representative and to the sponsor's governing body a
certificate of amendment with a copy of the articles of amendment
attached.
(d) The amendment to the articles of incorporation takes effect
on issuance of the certificate of amendment.
(e) An amendment does not affect an existing cause of action in
favor of or against the corporation, a pending suit to which the
corporation is a party, or an existing right of a person. Change
of the corporate name by amendment does not abate a suit brought
by or against the corporation under its former name.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 11, eff. Sept. 1,
1999.
Sec. 303.029. RESTATED ARTICLES OF INCORPORATION. (a) A
corporation may authorize, execute, and file restated articles of
incorporation by following the procedure to amend articles of
incorporation, including obtaining authorization from the
sponsor's governing body.
(b) The restated articles of incorporation must restate the
entire text of the articles of incorporation as amended or
supplemented by all previous certificates of amendment. The
restated articles of incorporation may also contain further
amendments to the articles of incorporation.
(c) Unless the restated articles of incorporation include
amendments that were not previously in the articles of
incorporation and previous certificates of amendment, the
introductory paragraph of the restated articles of incorporation
must contain a statement that the instrument accurately copies
the articles of incorporation and all amendments that are in
effect on the date of filing without further changes, except
that:
(1) the number of directors then constituting the board of
directors and those directors' names and addresses may be
inserted in place of the similar information concerning the
initial board of directors; and
(2) the incorporators' names and addresses may be omitted.
(d) If the restated articles of incorporation contain further
amendments not included in the articles of incorporation and
previous certificates of amendment, the instrument containing the
restated articles of incorporation must:
(1) include for each further amendment a statement that the
amendment has been made in conformity with this chapter;
(2) include the statements required by this chapter to be
contained in articles of amendment, except that the full text of
the amendment need not be included except in the restated
articles of incorporation;
(3) contain a statement that the instrument accurately copies
the articles of incorporation and all previous amendments in
effect on the date of the filing, as further amended by the
restated articles of incorporation, and that the instrument does
not contain any other change, except that:
(A) the number of directors then constituting the board of
directors and those directors' names and addresses may be
inserted in place of the similar information concerning the
initial board of directors; and
(B) the incorporators' names and addresses may be omitted; and
(4) restate the entire text of the articles of incorporation as
amended and supplemented by all previous certificates of
amendment and as further amended by the restated articles of
incorporation.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 11, eff. Sept. 1,
1999.
Sec. 303.030. RESTATED CERTIFICATE OF INCORPORATION. (a) The
original and two copies of the restated articles of incorporation
and a certified copy of the resolution of the sponsor's governing
body authorizing the articles shall be delivered to the secretary
of state.
(b) If the secretary of state finds that the restated articles
of incorporation comply with this chapter and have been
authorized by the sponsor's governing body, the secretary of
state, on payment of the fees required by this chapter, shall:
(1) write "filed" on the original and each copy of the restated
articles of incorporation and the month, day, and year of the
filing;
(2) file the original in the office of the secretary of state;
and
(3) issue two restated certificates of incorporation with a copy
of the restated articles of incorporation attached to each.
(c) The secretary of state shall deliver a restated certificate
of incorporation, with a copy of the restated articles of
incorporation attached, to the corporation or its representative
and to the sponsor's governing body.
(d) On the issuance by the secretary of state of the restated
certificate of incorporation, the original articles of
incorporation and all amendments are superseded, and the restated
articles of incorporation become the corporation's articles of
incorporation.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 11, eff. Sept. 1,
1999.
Sec. 303.031. REGISTERED OFFICE AND AGENT. (a) A corporation
shall continuously maintain a registered office and registered
agent in this state.
(b) The registered office shall be the same as the corporation's
principal office. The registered agent may be:
(1) an individual resident of this state whose business office
is the same as the registered office; or
(2) a domestic or foreign profit or nonprofit corporation that
is authorized to transact business or conduct affairs in this
state and that has a principal or business office that is the
same as the registered office.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 11, eff. Sept. 1,
1999.
Sec. 303.032. CHANGE OF REGISTERED OFFICE OR AGENT. (a) A
corporation may change its registered office, registered agent,
or both by filing the original and a copy of a statement in the
office of the secretary of state. The president or vice president
of the corporation shall execute and verify the statement.
(b) The statement must include:
(1) the corporation's name;
(2) the post office address of the corporation's current
registered office;
(3) if the registered office is to be changed, the post office
address of the corporation's new registered office;
(4) the name of the corporation's registered agent;
(5) if the registered agent is to be changed, the name of the
successor registered agent;
(6) a statement that, after the change, the post office address
of the registered office will be the same as the post office
address of the business office of the registered agent; and
(7) a statement that the change was authorized by the board of
directors or by a corporate officer authorized by the board of
directors to make the change.
(c) If the secretary of state finds that the statement complies
with this chapter, the secretary of state, when all fees have
been paid as required by this chapter, shall:
(1) write "filed" on the original and each copy of the statement
and the month, day, and year of the filing;
(2) file the original statement in the office of the secretary
of state; and
(3) return the copy of the statement to the corporation or its
representative.
(d) The change made by the statement takes effect on the filing
of the statement.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 11, eff. Sept. 1,
1999.
Sec. 303.033. RESIGNATION OF REGISTERED AGENT. (a) A
registered agent of a corporation may resign by:
(1) mailing or delivering written notice to the corporation; and
(2) filing the original and two copies of the notice in the
office of the secretary of state not later than the 10th day
after the date the notice is mailed or delivered to the
corporation.
(b) The notice must include:
(1) the corporation's last known address;
(2) a statement that written notice was given to the
corporation; and
(3) the date the written notice was given to the corporation.
(c) If the secretary of state finds that the notice complies
with this chapter, the secretary of state, on payment of all fees
required by this chapter, shall:
(1) write "filed" on the original notice and both copies and the
month, day, and year of the filing;
(2) file the original notice in the office of the secretary of
state;
(3) return one copy of the notice to the resigning registered
agent; and
(4) deliver one copy of the notice to the corporation at the
address shown in the notice.
(d) The resignation takes effect on the 31st day after the date
the notice is received by the secretary of state.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 11, eff. Sept. 1,
1999.
Sec. 303.034. AGENTS FOR SERVICE. (a) The president, each vice
president, and the registered agent of a corporation are the
corporation's agents on whom a process, notice, or demand
required or permitted by law to be served on the corporation may
be served.
(b) If a corporation does not appoint or maintain a registered
agent in this state or if the registered agent cannot with
reasonable diligence be found at the registered office, the
secretary of state is an agent of the corporation on whom a
process, notice, or demand may be served.
(c) The secretary of state may be served by delivering two
copies of the process, notice, or demand to the secretary of
state, the deputy secretary of state, or a clerk in charge of the
corporation department of the secretary of state's office. The
secretary of state shall immediately forward one copy of the
process, notice, or demand by registered mail to the corporation
at its registered office.
(d) Service on the secretary of state is returnable not earlier
than the 30th day after the date of service.
(e) The secretary of state shall keep a record of each process,
notice, and demand served, including the time of the service and
the action of the secretary of state in reference to the process,
notice, or demand.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 11, eff. Sept. 1,
1999.
Amended by:
Acts 2005, 79th Leg., Ch.
41, Sec. 3, eff. September 1, 2005.
Sec. 303.035. BOARD. (a) A corporation's affairs are governed
by a board of directors composed of at least three individuals
appointed by the sponsor's governing body. Directors may be
divided into classes.
(b) A director serves for a term of not more than six years. The
terms of directors of different classes may be of different
lengths.
(c) A director holds office for the term to which the director
is appointed and until a successor is appointed and has
qualified.
(d) The sponsor's governing body may remove a director for cause
or at any time without cause.
(e) A director serves without compensation but is entitled to
reimbursement for actual expenses incurred in the performance of
duties under this chapter.
(f) A director has the same immunity from liability as is
granted under the laws of this state to a member of the sponsor's
governing body if the director was acting in good faith and in
the course and scope of the duties or functions within the
corporation.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 11, eff. Sept. 1,
1999. Amended by Acts 2001, 77th Leg., ch. 1420, Sec. 8.103(a),
eff. Sept. 1, 2001.
Sec. 303.036. OFFICERS. (a) The officers of a corporation are:
(1) the president, vice president, and secretary; and
(2) other officers, including a treasurer, and assistant
officers considered necessary.
(b) An officer is elected or appointed at the time, in the
manner, and for the term provided by the articles of
incorporation or bylaws, except that an officer's term may not
exceed three years. If the articles of incorporation or bylaws do
not contain those requirements, the board of directors shall
elect or appoint each officer annually.
(c) A person may simultaneously hold more than one office,
except that the same person may not simultaneously hold the
offices of president and secretary.
(d) An officer may be removed by the persons authorized to elect
or appoint the officer if those persons believe the best
interests of the corporation will be served by the removal.
(e) A director who is a member of the governing body or an
officer or employee of the sponsor is eligible to serve as an
officer of the corporation.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 11, eff. Sept. 1,
1999.
Sec. 303.037. INDEMNIFICATION. (a) Except as provided by
Subsection (c), a corporation may indemnify a director, officer,
employee, or agent or former director, officer, employee, or
agent for expenses and costs, including attorney's fees, actually
or necessarily incurred by the person in connection with a claim
asserted against the person, by action in court or another forum,
because of the person's being or having been a director, officer,
employee, or agent.
(b) Except as provided by Subsection (c), if a corporation has
not fully indemnified a director, officer, employee, or agent of
the corporation under Subsection (a), the court in a proceeding
in which a claim is asserted against the director, officer,
employee, or agent of the corporation or a court having
jurisdiction over an action brought by the director, officer,
employee, or agent on a claim for indemnity may assess indemnity
against the corporation or its receiver or trustee. The
assessment must equal:
(1) the amount that the director, officer, employee, or agent
paid to satisfy the judgment or compromise the claim, not
including any amount paid the corporation; and
(2) to the extent the court considers reasonable and equitable,
the expenses and costs, including attorney's fees, actually and
necessarily incurred by the director, officer, employee, or agent
in connection with the claim.
(c) A corporation may not provide indemnity in a matter if the
director, officer, employee, or agent is guilty of negligence or
misconduct in relation to the matter. A court may not assess
indemnity unless it finds that the director, officer, employee,
or agent was not guilty of negligence or misconduct in relation
to the matter in which indemnity is sought.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 11, eff. Sept. 1,
1999.
Sec. 303.038. BYLAWS. (a) The board of directors shall adopt a
corporation's initial bylaws and may amend or repeal the bylaws
or adopt new bylaws. The bylaws and each amendment and repeal of
the bylaws must be approved by the sponsor's governing body by
resolution.
(b) The bylaws may contain any provision for the regulation and
management of the corporation's affairs consistent with law and
the articles of incorporation.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 11, eff. Sept. 1,
1999.
Sec. 303.039. COMMITTEES. (a) If permitted by the articles of
incorporation or bylaws, the board of directors, by resolution
adopted by a majority of directors in office, may designate one
or more committees consisting of two or more directors to
exercise the board's authority in the management of the
corporation to the extent provided by the resolution, articles of
incorporation, or bylaws. The designation of a committee or
delegation of authority to a committee does not relieve the board
of directors or an individual director of a responsibility
imposed by law.
(b) Other committees not exercising the authority of the board
of directors in the management of the corporation may be
designated. The composition of those committees may be limited to
directors, and the committee members shall be designated and
appointed by:
(1) the board of directors by resolution; or
(2) the president, if authorized by the articles of
incorporation, the bylaws, or a resolution of the board of
directors.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 11, eff. Sept. 1,
1999.
Sec. 303.040. MEETINGS; QUORUM. (a) A regular or special
meeting of the board of directors must be called and held as
provided by the bylaws. A regular or special meeting may be held
at any location in this state.
(b) A director's attendance at a meeting waives notice to the
director of the meeting, unless the attendance is for the express
purpose of objecting to the transaction of any business on the
ground that the meeting is not lawfully called or convened.
(c) A quorum is the lesser of:
(1) a majority of the number of directors established by the
bylaws or, if the bylaws do not establish a number of directors,
a majority of the number of directors stated in the articles of
incorporation; or
(2) the number of directors, not less than three, established as
a quorum by the articles of incorporation or bylaws.
(d) The act of a majority of the directors present at a meeting
at which a quorum is present is an act of the board of directors,
unless the act of a larger number is required by the articles of
incorporation or bylaws.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 11, eff. Sept. 1,
1999.
Sec. 303.041. CORPORATION'S GENERAL POWERS. (a) Subject to
Section 303.045, a corporation has the rights and powers
necessary or convenient to accomplish the corporation's purposes,
including the power to:
(1) acquire title to a public facility in order to lease,
convey, or dispose of the public facility to the corporation's
sponsor or, on direction of the sponsor and in furtherance of the
sponsor's purposes, to another entity;
(2) accept a mortgage or pledge of a public facility financed,
refinanced, or provided by sponsor obligations purchased by the
corporation and, as security for the payment of any connected
bonds or credit agreements that the corporation issues or incurs:
(A) assign the mortgage or pledge and the revenue and receipts
from the mortgage or pledge and from the sponsor obligations; or
(B) grant other security;
(3) sell, convey, mortgage, pledge, lease, exchange, transfer,
and otherwise dispose of all or any part of the corporation's
property and other assets, including sponsor obligations;
(4) make a contract, incur a liability, and borrow money at
interest;
(5) lend money for its corporate purposes, invest its money, and
take and hold security for the payment of money loaned or
invested;
(6) sue and be sued in its corporate name;
(7) appoint agents of the corporation and determine their
duties; and
(8) have a corporate seal and use the seal by having it or a
facsimile of it impressed on, affixed to, or reproduced on an
instrument required or authorized to be executed by the
corporation's proper officers.
(b) Subsection (a) does not authorize a corporate officer or
director to exercise a power specified in that subsection in a
manner that is inconsistent with the corporation's articles of
incorporation or bylaws or beyond the scope of the corporation's
purposes.
(c) A sponsor may not delegate to a corporation the power of
taxation or eminent domain, a police power, or an equivalent
sovereign power of this state or the sponsor.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 11, eff. Sept. 1,
1999.
Sec. 303.042. TAXATION. (a) A public facility, including a
leasehold estate in a public facility, that is owned by a
corporation and that, except for the purposes and nonprofit
nature of the corporation, would be taxable to the corporation
under Title 1, Tax Code, shall be assessed to the user of the
public facility to the same extent and subject to the same
exemptions from taxation as if the user owned the public
facility. If there is more than one user of the public facility,
the public facility shall be assessed to the users in proportion
to the value of the rights of each user to occupy, operate,
manage, or use the public facility.
(b) The user of a public facility is considered the owner of the
facility for purposes of the application of:
(1) sales and use taxes in the construction, sale, lease, or
rental of the public facility; and
(2) other taxes imposed by this state or a political subdivision
of this state.
(c) A corporation is engaged exclusively in performance of
charitable functions and is exempt from taxation by this state or
a municipality or other political subdivision of this state.
Bonds issued by a corporation under this chapter, a transfer of
the bonds, interest on the bonds, and a profit from the sale or
exchange of the bonds are exempt from taxation by this state or a
municipality or other political subdivision of this state.
(d) An exemption under this section for a multifamily
residential development which is owned by a public facility
corporation created by a housing authority under this chapter and
which does not have at least 20 percent of its units reserved for
public housing units, applies only if:
(1) the housing authority holds a public hearing, at a regular
meeting of the authority's governing body, to approve the
development; and
(2) at least 50 percent of the units in the multifamily
residential development are reserved for occupancy by individuals
and families earning less than 80 percent of the area median
family income.
(e) For the purposes of Subsection (d), a "public housing unit"
is a dwelling unit for which the landlord receives a public
housing operating subsidy. It does not include a unit for which
payments are made to the landlord under the federal Section 8
Housing Choice Voucher Program.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 11, eff. Sept. 1,
1999. Amended by Acts 2001, 77th Leg., ch. 1493, Sec. 1, eff.
Aug. 31, 2002.
Sec. 303.043. NET EARNINGS. No part of a corporation's net
earnings remaining after payment of its bonds and expenses in
accomplishing its public purpose may benefit a person other than
the sponsor of the corporation.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 11, eff. Sept. 1,
1999.
Sec. 303.044. OPEN MEETINGS; OPEN RECORDS. A corporation and
its board of directors are considered to be governmental bodies
under Chapters 551 and 552, Government Code.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 11, eff. Sept. 1,
1999.
Sec. 303.045. ALTERATION OF CORPORATION OR ACTIVITIES. The
sponsor of a corporation, in its sole discretion, may alter the
corporation's structure, organization, programs, or activities,
consistent with the other provisions of this chapter and subject
to limitations provided by law relating to the impairment of
contracts entered into by the corporation.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 11, eff. Sept. 1,
1999.
Sec. 303.046. EXAMINATION OF BOOKS AND RECORDS. A
representative of the sponsor may examine all books and other
records of the corporation at any time.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 11, eff. Sept. 1,
1999.
Sec. 303.047. WAIVER OF NOTICE. If a notice is required to be
given to a director by this chapter, the articles of
incorporation, or the bylaws, a written waiver of the notice
signed by the person entitled to the notice, before or after the
time that would have been stated in the notice, is equivalent to
giving the notice.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 11, eff. Sept. 1,
1999.
SUBCHAPTER C. BONDS
Sec. 303.071. AUTHORITY TO ISSUE. With the specific approval by
resolution of the governing body of its sponsor, a corporation
may issue or incur bonds, including refunding bonds, to finance,
refinance, or provide one or more public facilities.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 11, eff. Sept. 1,
1999.
Sec. 303.072. SOURCE OF PAYMENT. (a) Bonds of a corporation
are payable from revenue derived from public facilities or
sponsor obligations. Bonds issued under this chapter are not an
obligation or a pledge of the faith and credit of this state, a
sponsor or other political subdivision of this state, or an
agency of this state.
(b) Each bond must contain on its face a statement that neither
the faith and credit nor the taxing power of this state, the
sponsor, except to the extent of the sponsor obligations, or
another political subdivision of this state is pledged to the
payment of the principal of or the interest on the bonds.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 11, eff. Sept. 1,
1999.
Sec. 303.073. TERMS. (a) A bond issued under this chapter must
mature not later than 40 years after its date.
(b) Bonds issued under this chapter may be sold in any manner
authorized by the corporation and permitted by Chapter 1201,
Government Code.
(c) The interest rate on the bonds may be determined by a
formula or index or in accordance with a contract or other
arrangement for the periodic determination of interest rates.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 11, eff. Sept. 1,
1999.
Sec. 303.074. USE OF PROCEEDS. (a) The proceeds of the bonds
of a corporation may be used to:
(1) finance, refinance, or provide one or more public
facilities;
(2) maintain reserve funds determined by the sponsor and the
corporation to be necessary and appropriate; or
(3) pay any costs relating to the issuance or incurrence of
bonds by the corporation and the purchase of sponsor obligations
by the corporation, including:
(A) the cost of:
(i) financing charges and interest on the bonds;
(ii) financing, legal, accounting, financial advisory, and
appraisal fees, expenses, and disbursements;
(iii) an insurance policy;
(iv) printing, engraving, and reproduction services;
(v) the initial and acceptance fees of a trustee, paying agent,
bond registrar, or authenticating agent; and
(vi) a credit agreement; and
(B) reasonable amounts to reimburse the corporation for time
spent by its agents or employees with respect to the issuance,
incurrence, or purchase.
(b) The purchase by the corporation of a sponsor obligation does
not extinguish the debt represented by the sponsor obligation.
(c) Pending a use described by Subsection (a), the proceeds may
be invested in accordance with Section 303.041.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 11, eff. Sept. 1,
1999.
Sec. 303.075. REFUNDING OBLIGATIONS. (a) A corporation may
issue or incur bonds to refund its outstanding bonds or sponsor
obligations of its sponsor, including any redemption premium on
them and interest accrued to the date of redemption.
(b) The provisions of this chapter generally applicable to bonds
apply to the issuance, maturity, terms, and holder's rights in
the refunding bonds and to the corporation's rights, duties, and
obligations in relation to the refunding bonds.
(c) The corporation may issue the refunding bonds in exchange or
substitution for outstanding bonds or sponsor obligations or may
sell the refunding bonds and use the proceeds to pay or redeem
outstanding bonds or sponsor obligations.
(d) A corporation may issue or incur bonds to refund outstanding
debt obligations of a nonprofit corporation created by a housing
authority under the Texas Non-Profit Corporation Act (Article
1396-1.01 et seq., Vernon's Texas Civil Statutes).
Added by Acts 1999, 76th Leg., ch. 227, Sec. 11, eff. Sept. 1,
1999.
Sec. 303.076. APPROVAL OF BONDS BY OTHER ENTITIES. Except as
required by Chapter 1202, Government Code, and Section 303.071 a
corporation may issue bonds, acquire sponsor obligations, and
enter into credit agreements under this chapter without the
consent or approval of any other subdivision or agency of this
state.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 11, eff. Sept. 1,
1999.
Sec. 303.077. PERFECTION OF SECURITY INTEREST. (a) This
section applies only to a security interest granted by:
(1) a corporation as security for its bonds;
(2) a credit agreement pledged as security for the obligations
of the corporation on the bonds; or
(3) a credit agreement issued or entered into in connection with
the bonds.
(b) Notwithstanding Section 9.109(d), Business & Commerce
Code, and without any other filing, a security interest is
perfected until payment of the bonds and credit agreement, with
the effect specified by Chapter 9, Business & Commerce Code,
when the bonds are registered by the comptroller and the
proceedings authorizing the bonds are filed with the comptroller.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 11, eff. Sept. 1,
1999. Amended by Acts 2001, 77th Leg., ch. 1420, Sec. 8.104(a),
eff. Sept. 1, 2001.
Sec. 303.078. PURCHASE OF SPONSOR OBLIGATIONS. A sponsor may
sell its sponsor obligations to a corporation that the sponsor
has created at public or private sale on the terms the governing
body of the sponsor determines.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 11, eff. Sept. 1,
1999.
SUBCHAPTER D. DISSOLUTION OF CORPORATION
Sec. 303.101. DISSOLUTION AUTHORIZED. After a corporation's
bonds and other obligations are paid and discharged, or adequate
provision is made for their payment and discharge, the sponsor's
governing body by written resolution may authorize and direct the
dissolution of the corporation.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 11, eff. Sept. 1,
1999.
Sec. 303.102. ARTICLES OF DISSOLUTION. (a) Articles of
dissolution on behalf of the corporation must be executed by:
(1) the president or vice president and the secretary or
assistant secretary; or
(2) the presiding officer of the sponsor's governing body and
the secretary or clerk of that body.
(b) An officer signing the articles of dissolution must verify
them.
(c) The articles of dissolution must include:
(1) the name of the corporation;
(2) the name and address of the sponsor;
(3) a statement that the dissolution was authorized by the
sponsor's governing body;
(4) the date of the meeting at which the dissolution was
authorized;
(5) a statement that all of the corporation's bonds and other
obligations have been paid and discharged or that adequate
provision has been made for their payment and discharge; and
(6) a statement that no suit is pending in a court against the
corporation or that adequate provision has been made for the
satisfaction of any judgment, order, or decree that may be
entered against the corporation in each pending suit.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 11, eff. Sept. 1,
1999.
Sec. 303.103. CERTIFICATE OF DISSOLUTION. (a) The original and
two copies of the articles of dissolution shall be delivered to
the secretary of state.
(b) If the secretary of state finds that the articles of
dissolution comply with this chapter and have been authorized by
the sponsor's governing body, the secretary of state, on payment
of the fees required by this chapter, shall:
(1) write "filed" on the original and each copy of the articles
of dissolution and the month, day, and year of the filing;
(2) file the original in the office of the secretary of state;
and
(3) issue two certificates of dissolution with a copy of the
articles of dissolution attached to each.
(c) The secretary of state shall deliver a certificate of
dissolution, with a copy of the articles of dissolution attached,
to the representative of the dissolved corporation and to the
sponsor's governing body.
(d) The existence of the corporation ceases on the issuance of
the certificate of dissolution, except for the purpose of suits,
other proceedings, and appropriate corporate action by the
directors and officers of the corporation as provided by this
chapter.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 11, eff. Sept. 1,
1999.
Sec. 303.104. EXTENSION OF DURATION. If a corporation is
dissolved by expiration of its duration, the corporation may
amend its articles of incorporation to extend its duration before
the third anniversary of the date of dissolution.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 11, eff. Sept. 1,
1999.
Sec. 303.105. VESTING PROPERTY IN SPONSORING ENTITY. The title
to all funds and other property owned by a corporation when it
dissolves automatically vests in the corporation's sponsor
without further conveyance, transfer, or other act.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 11, eff. Sept. 1,
1999.
Sec. 303.106. RIGHTS, CLAIMS, AND LIABILITIES BEFORE
DISSOLUTION. (a) The dissolution of a corporation by the
expiration of its duration or by the issuance of a certificate of
dissolution does not impair a remedy available to or against the
corporation or a director or officer of the corporation for a
right or claim existing or a liability incurred before the
dissolution, if action or other proceeding on the remedy is begun
before the third anniversary of the date of the dissolution.
(b) The action may be prosecuted or defended by the corporation
in its corporate name.
(c) The directors and officers may take corporate or other
action as appropriate to protect the remedy, right, or claim.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 11, eff. Sept. 1,
1999.
SUBCHAPTER E. ADMINISTRATION BY SECRETARY OF STATE
Sec. 303.121. ADMINISTRATION OF CHAPTER. The secretary of state
may act as reasonably necessary to efficiently administer this
chapter and to perform the duties imposed by this chapter.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 11, eff. Sept. 1,
1999.
Sec. 303.122. FEES. (a) The secretary of state shall charge
and collect fees for:
(1) filing articles of incorporation and issuing two
certificates of incorporation;
(2) filing articles of amendment and issuing two certificates of
amendment;
(3) filing a statement of change of address of registered office
or change of registered agent or both;
(4) filing restated articles of incorporation and issuing two
restated certificates of incorporation; and
(5) filing articles of dissolution.
(b) The fees are in the amounts charged by the secretary of
state for the respective filings and issuances under the Texas
Non-Profit Corporation Act (Article 1396-1.01 et seq., Vernon's
Texas Civil Statutes).
Added by Acts 1999, 76th Leg., ch. 227, Sec. 11, eff. Sept. 1,
1999.
Sec. 303.123. NOTICE AND APPEAL OF DISAPPROVAL. (a) If the
secretary of state does not approve a document required by this
chapter to be approved by the secretary of state, the secretary
of state, not later than the 10th day after the date the document
is delivered to the secretary of state, shall give written notice
of the disapproval to the person who delivered the document. The
notice must state the reasons for the disapproval.
(b) The person may appeal the disapproval to a district court of
Travis County by filing with the clerk of the court a petition
including a copy of the disapproved document and a copy of the
disapproval notice.
(c) The court shall try the matter de novo and either sustain
the secretary of state's action or direct the secretary of state
to take action the court considers proper.
Added by Acts 1999, 76th Leg., ch. 227, Sec. 11, eff. Sept. 1,
1999.
Sec. 303.124. DOCUMENTS AS PRIMA FACIE EVIDENCE. A court,
public office, or official body shall receive the following
documents as prima facie evidence of the facts, or the existence
or nonexistence of the facts, stated in the documents:
(1) a certificate issued by the secretary of state under this
chapter;
(2) a copy, certified by the secretary of state, of a document
filed in the office of the secretary of state under this chapter;
and
(3) a certificate of the secretary of state under the state seal
as to the existence or nonexistence of a fact relating to a
corporation that would not appear from a document or certificate
under Subdivision (1) or (2).
Added by Acts 1999, 76th Leg., ch. 227, Sec. 11, eff. Sept. 1,
1999.