In addition to our reliable water, wastewater and solid waste management activities, GCA supports Texas economic development and environmental protection by providing financing services. Since the 1970s, we have issued over $3 billion in private activity bonds toward this end. We also issue industrial development bonds for small manufacturers in Galveston, Harris and Chambers counties.
The Finance department provides for the issuance of private activity bonds to finance solid waste facilities or industrial development facilities as provided by IRS rules. These bonds can be issued either directly by GCA or through its industrial development corporation, the Gulf Coast Industrial Development Authority, depending on the structure of the financing.
What type of bonds financing can GCA do?
GCA can issue two types of tax exempt bonds, Government Municipal Bonds and Private Activity Bonds (PAB’s).
What is the difference between a Municipal Bond and a PAB?
Municipal bonds are issues for traditional governmental activities in which 90% of the use is by governmental entities. PAB’s are bonds issues where private entities have a 10% or greater interest in either the facilities being financed or 10% or greater share of the proceeds of the bonds.
Are all the GCA Bonds tax exempt?
Most of the bonds that GCA can issue are tax exempt, however with the tax reform of 1986 Private Activity bonds that are issued for water and air pollution control facilities are no longer tax exempt.
What type of PAB’s are tax exempt?
The type of Private Activity Bonds that GCA can issue are for:
Water Supply Facilities
Solid Waste Disposal Facilities
Local Furnishing of Steam or Electricity
Dock and Wharf Facilities
Are there other types of facilities that PAB’s can be issued for?
Taxable Private Activity bonds can be issued by the Authority for Water Pollution Control Facilities, and Air Pollution Control Facilities. In addition Water Supply facilities that are not governmental entities where the water is not considered available for public use can qualify for these taxable bonds.
The Gulf Coast Industrial Development Corporation, a component unit of Gulf Coast Waste Disposal Authority can also issue taxable bonds for the following type of facilities that are built for the creation of primary jobs:
Research and development facilities
Military facilities, including closed or realigned military bases
Transportation facilities including:
Rail switching facilities
Maintenance and repair facilities
Related infrastructure located on or adjacent to;
Rail port facility
Mass commuting facilities
Small warehouse facilities that serve as decentralized storage and distribution centers
Primary job training facilities used by higher education institutions
Regional or national corporate headquarters facilities
Streets and roads, rail spurs, water and sewer facilities, electric utilities, gas utilities drainage, site improvements and related improvements.
Telecommunications and internet improvements
Beach remediation along the Gulf of Mexico
Projects for the creation or retention of primary jobs for the Coast Guard (subject to certain conditions)
Projects suitable for use for a career center (subject to certain conditions)
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Gulf Coast Waste Disposal Authority