CHAPTER 303. PUBLIC FACILITY CORPORATIONS

State Codes and Statutes

Statutes > Texas > Local-government-code > Title-9-public-buildings-and-grounds > 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

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.

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.

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.

(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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

(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.

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.

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.

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.

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.

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.

(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.

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.

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.

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.

State Codes and Statutes

State Codes and Statutes

State Codes and Statutes

State Codes and Statutes

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