Texas Public Finance Authority

In 1983, the 68th Texas Legislature (Senate Bill 1355, Regular Session) created the Texas Public Building Authority to issue revenue bonds to finance the construction, renovation, or repair of buildings and other structures for use by state agencies in Travis County.

In 1987, the agency was renamed the Texas Public Finance Authority (Senate Bill 64, 70th Texas Legislature, 2nd Called Session). Its mission was broadened to include the issuance of State of Texas general obligation bonds to finance the construction, purchase, renovation, or repair of correctional and mental health facilities operated by the Texas Department of Mental Health and Mental Retardation throughout the state and to include the issuance of revenue bonds to finance the purchase of buildings and other facilities if the General Services Commission determined that purchase was economically feasible.

In 1989 (Senate Bill 558, 71st Texas Legislature, Regular Session) the legislature also authorized the agency to issue bonds or other obligations to finance the purchase of equipment by state agencies. In 1991, the 72nd Texas Legislature, 1st Called Session (Senate Bill 3), consolidated bond issuance authority for the Texas National Research Laboratory Commission, Texas Parks and Wildlife Department, Texas National Guard Armory Board, and Texas State Technical College System under the Texas Public Finance Authority. The Authority has also issued general obligation bonds for the Texas Department of Criminal Justice, the Texas Youth Commission, the Texas Department of Public Safety, the Texas Parks and Wildlife Department, the Texas National Research Laboratory Commission (the Superconducting Super Collider Project ) and the Texas Juvenile Probation Commission.

The 74th Texas Legislature (House Bill 1441, Regular Session, 1995) amended the Authority's statute to allow for the issuance of up to $50 million of revenue bonds or other revenue obligations for the financing of alternate fuels conversions and infrastructure projects. Both state agencies and local political subdivisions are eligible for this fuel financing. In May 1997, House Bill 1077, 75th Texas Legislature, Regular Session, was passed. Effective on September 1, 1997, the bill granted the Authority exclusive bond issuing authority for the Texas Low Level Radioactive Waste Disposal Authority, Midwestern State University, Stephen F. Austin University, and Texas Southern University. Furthermore, the Appropriations Act for the 1998-1999 biennium, effective September 1, 1997 authorized the Authority to issue revenue bonds on behalf of the Texas State Preservation Board for the museum project.

In 1999 (House Bill 3157, 76th Texas Legislature, Regular Session) the Authority was given the power to issue bonds on behalf of certain joint power municipal utilities to finance their stranded costs.

Before the Authority may issue bonds for the acquisition or construction of a building, the Legislature must have authorized the acquisition and construction of the building for which the bonds are to be issued and the estimated cost of the acquisition or construction of the building, or the maximum amount of bonded indebtedness, that may be incurred by the issuance of bonds. The Texas Supreme Court, in Texas Public Building Authority v. Mattox, 686 S.W.2d 924 (1985), ruled that revenue bonds issued by the Authority do not constitute debt of the State within the meaning of the Texas Constitution.

The Texas Public Building Authority was originally composed of three members (Senate Bill 1355, 68th Texas Legislature, Regular Session); the number of members of the Texas Public Finance Authority was raised to six in 1991 (Senate Bill 3, 72nd Texas Legislature, 1st Called Session), and to seven in 2001 (House Bill 2153, 77th Texas Legislature, Regular Session). Members are appointed by the governor, with advice and consent of the senate, for overlapping six-year terms.

As of April 4, 1996, the Public Finance Authority had issued $1,140,092,603 in revenue bonds, $3,025,005,000 in State of Texas general obligation bonds, $133,500,000 in revenue commercial paper, and $719,300,000 in general obligation commercial paper. Of these amounts, $1,317,374,401 were refunding bonds. By 1998-1999, the Authority had 15 full time equivalent employees, in addition to the six member board of directors.

(Sources include: Guide to Texas State Agencies, 11th edition (2001); the agency web site (http://www.tpfa.state.tx.us/about.aspx), accessed September 2006; and the enabling legislation, 1983, 1987, 1989, 1991, 1995, 1999, 2001.)