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Texas Public
Finance Authority

(512) 463-5544   300 W. 15th St., Suite 411   Austin, TX 78701

Master Lease Purchase Program Overview

Overview | Requirements | Documents | Payment Estimator | Rules | Seminar Materials

Master Lease Announcement

The Master Lease Purchase Program ("MLPP") is a lease revenue financing program established in 1992, primarily to finance capital equipment acquisitions by state agencies, authorized by Texas Civil Statutes, Article 601d, §9A (now, Texas Gov’t. Code, §1232.103.) MLPP also may be used to finance other types of projects that have been specifically authorized by the Legislature and approved by the TPFA Board. The financing vehicle for the MLPP program is a tax-exempt revenue commercial paper program established pursuant to Texas Gov’t. Code, Chapter 1371.

Under the program, the TPFA borrows money to pay for an agency’s equipment or other project by issuing tax-exempt revenue commercial paper notes. The agency and the TPFA enter into a lease pursuant to which TPFA takes title to the equipment or other project and leases it to the agency who is required to make lease payments to TPFA. TPFA uses the lease payments to repay the principal and interest on the commercial paper notes. When the lease is fully paid, the agency receives title to the equipment or other financed project. An agency may pay off its lease at any time without penalty.

MLPP carries ratings from Standard & Poor’s of A-1+, Moody’s of P-1, and Fitch’s of F-1+. Liquidity for the program in an amount of $150,000,000 plus interest at 10% for 270 days is provided by the Texas Comptroller of Public Accounts. For additional information, you may review the Offering Memorandum (link to Offering Memorandum) and the Liquidity Agreement (link to Liquidity Agreement).

Who may use MLPP?

MLPP is available to any state agency. A "State Agency" is any board, commission, department, office, agency, institution of higher education, or other governmental entity in the executive, judicial, or legislative branch of state government. (See, Texas Gov’t Code, § 1232.003.)

What may be financed?

MLPP may be used to finance a state agency’s acquisition of equipment that costs at least $10,000 and has a useful life of at least three years. Individual items may be bundled and financed in one purchase as long as the value of the individual item is at least $100. In other words, an acquisition of equipment may be financed if the total amount of the one contract or purchase order is for at least $10,000. (Since this is the acquisition of "equipment" as a general rule, the contract will be in the form of a standard purchase order and the amount of that one purchase order has to be $10,000 or more.)

"Equipment" means any "fixed asset, other than land or a building, used by a state agency to conduct state business,"... including computer equipment. Computer equipment includes any automated information technology system and computer software.

Other projects, such as real estate or construction, may be financed through MLPP if the specific project has been authorized by the Legislature and approved for MLPP financing by the TPFA Board.

In the MLPP documents and rules, the term "Eligible Project" is used to define and describe projects that may be financed.

Getting Started

After the agency has determined that it has the authority to purchase or complete an Eligible Project, the agency’s governing body must adopt a Resolution, which determines that financing is appropriate, approves and authorizes a request for financing, designates an officer or employee and delegates to the officer or employee authority to proceed with the submission of a request for financing and completion of the financing. To view a sample resolution, click here.

An agency may use its own form of resolution as long as it contains the substantive evidence that the governing body approved the financing request and the officer or employee signing the documents is authorized to do so.

The agency is required to obtain approval of the Bond Review Board or other agencies if required.

Bond Review Board Approval
A lease for an amount of $250,000 or more or for a term of 5 years or more requires Bond Review Board ("BRB") approval. The agency is responsible for submitting its own application and obtaining approval of the BRB. However, as the BRB’s current application form requires the attachment of an amortization schedule prepared by TPFA, the agency should notify TPFA MLPP Program Administrator of its intent to seek BRB approval as soon as practicable. For further information, please consult the BRB.