Relating to a prohibition on the guarantee of public school bonds.
Impact
The legislation represents a significant shift in how public school financing is approached within Texas, potentially impacting the ability of schools to secure funding through bond measures. By eliminating the backing of the Permanent School Fund for new school bonds, the bill risks increasing the cost of borrowing for school districts and could lead to challenges in funding educational projects. In this context, school districts may have to turn to alternative sources of funding, which could result in limited financial flexibility for schools, particularly for those in lower-income areas.
Summary
House Bill 5035 introduces a prohibition on the guarantee of public school bonds, aiming to amend existing statutes related to school funding and bond issuance under the Texas Education Code. Specifically, it prohibits both school districts and charter districts from having their bonds guaranteed or underwritten by the Texas Permanent School Fund. This act is set to take effect on September 1, 2025, and will only apply to school bonds approved after this date, ensuring that previous guarantees remain valid until maturity or defeasance under the previous law.
Contention
Notable points of contention surrounding HB 5035 likely include debates on the sufficiency of alternatives to fund education without the guarantee of the Permanent School Fund. Advocates for the bill argue that removing the guarantee could foster more responsible financial management among school districts. Conversely, opponents might contend that this change could jeopardize the quality of education by restricting financial resources for necessary infrastructure improvements and educational programs. As this bill progresses through legislative discussions, stakeholders are expected to express diverse perspectives on the implications for school finance and education quality in Texas.
Texas Constitutional Statutes Affected
Education Code
Chapter 45. School District Funds
Section: New Section
Section: 052
Section: 051
Section: 054
Section: 058
Section: 059
Section: 060
Section: 061
Section: 062
Section: 063
Chapter 12. Charters
Section: New Section
Chapter 43. Permanent School Fund And Available School Fund
Relating to requiring an open-enrollment charter school to conduct an efficiency audit before applying for designation as a charter district or for the guarantee of certain bonds.
Relating to a local optional teacher designation system implemented by a school district, a security officer employed by a school district, the basic allotment and guaranteed yield under the public school finance system, and certain allotments under the Foundation School Program; making an appropriation.
Relating to a local optional teacher designation system implemented by a school district, the basic allotment and guaranteed yield under the public school finance system, and certain allotments under the Foundation School Program; making an appropriation.