The use of nonprofit corporations (sometimes referred to as "63-20 Corporations") in structuring public/private infrastructure financings can preserve the ability for a project to be financed with tax-exempt bonds, while maintaining for both the public and private participants most of the benefits of private development.
Public benefit corporations have long been used as a vehicle to finance the construction of public buildings, including hospitals, court houses and schools. Historically, such projects have been accomplished through the use of nonprofit corporations to avoid statutory debt limitations and other restrictions. In some cases, private developers in association with public agencies around the country have utilized the nonprofit structure to develop major transportation projects, particularly those involving innovative contracting and public-private partnerships. Rather than issuing debt through an established conduit, debt issuance is done through a nonprofit corporation pursuant to IRS Revenue Ruling 63-20.
Further information on the use of 63-20 nonprofit public benefit corporations to finance surface transportation projects is available from the FHWA Center for Innovative Fianance Support Alternative Project Delivery website.