Texas Industrial Revenue Bond Program

OVERVIEW :
The State of Texas Industrial Revenue Bond Program is designed to provide tax-exempt financing to finance land and depreciable property for eligible industrial or manufacturing projects. The Development Corporation Act allows cities, counties, conservation and reclamation districts to form non-profit industrial development corporations or authorities on their behalf. The purpose is to issue taxable and tax-exempt bonds for eligible projects in their jurisdictions.

The industrial development corporation acts as a conduit through which all monies are channeled. Generally, all debt services on the bonds are paid by the business under the terms of a lease, sale, or loan agreement. As such, it does not constitute a debt or obligation of the governmental unit, the industrial development corporation, or the State of Texas.

PROCESS:
The local industrial development corporation issuing the bonds for a project must pass a declaration of official intent resolution if the bonds are tax-exempt. This allows the business entity to begin immediately incurring eligible costs that may be reimbursed with bond proceeds.

The local industrial development corporations must pass a bond resolution, whether the bonds are taxable or tax-exempt. This resolution will approve the project, set the bond amount, and make findings required by state law.

Next, the unit of government on whose behalf the local industrial development corporation was created, must pass a resolution that approves the corporation’s resolution and the project.

All terms of the bond sale are negotiated among the appropriate parties and all documents may be prepared by legal counsel.

The Industrial Development Corporation submits an application to TxED in accordance with TxED’s rules.

The corporation must submit an application to the Attorney General’s office in accordance with its rules. Both applications may be submitted simultaneously; however, the Attorney General will not give final approval until they receive a copy of TxED’s approval letter.

Once all approvals have been granted, the IDC can issue the bonds and finance the project from the proceeds.

FEES:
TxED will not accept applications submitted by an industrial development corporation without the required fee. The fee, as set by rule, will not be less than $500 or greater than $25,000. Call TxED for current fee information.

RESOURCES:
Summary of Bond Financing Options (Adobe PDF)
Development Corporation Act

CONTACT US:
For further information or assistance, please contact:
Texas Economic Development
P.O. Box 12728
Austin, TX 78711
E-mail: finance@TxED.state.tx.us
Internet: http://www.TxED.state.tx.us
Phone: 512/936-0134 or 512/936-0528
Fax: 512/936-0520 TDD: 512/936-0555
Relay Texas: 800/735-2989