Texas 2009 - 81st Regular

Texas House Bill HB2894 Compare Versions

Only one version of the bill is available at this time.

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1	1	81R8487 CAS-D
2	2	By: Hochberg H.B. No. 2894
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to additional guarantees for certain bonds issued by
8	8	school districts.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Chapter 45, Education Code, is amended by adding
11	11	Subchapter I to read as follows:
12	12	SUBCHAPTER I. ADDITIONAL GUARANTEE FOR BONDS
13	13	Sec. 45.251. DEFINITIONS. In this subchapter:
14	14	(1) "Board" means the State Board of Education.
15	15	(2) "Paying agent" means the financial institution
16	16	that is designated by a school district as the district's agent for
17	17	the payment of the principal of and interest on guaranteed bonds.
18	18	Sec. 45.252. GUARANTEE. (a) If a school district's
19	19	application for guarantee of district bonds by the corpus and
20	20	income of the permanent school fund as provided by Subchapter C is
21	21	rejected, the district may apply under this subchapter for
22	22	guarantee of bonds issued under Subchapter A, including refunding
23	23	bonds, by money appropriated for the Foundation School Program that
24	24	may be used for the purpose, other than money that:
25	25	(1) is appropriated for the school facilities
26	26	assistance program under Chapter 46;
27	27	(2) is necessary for purposes of Section 46.009(b)(1)
28	28	or 46.035; or
29	29	(3) is appropriated from the available school fund.
30	30	(b) School district bonds may not be guaranteed under both
31	31	Subchapter C and this subchapter.
32	32	Sec. 45.253. ELIGIBILITY. To be eligible for approval by
33	33	the commissioner under this subchapter, bonds must be:
34	34	(1) issued in the manner provided by Section 45.054;
35	35	and
36	36	(2) payable from an ad valorem tax under Section
37	37	45.003.
38	38	Sec. 45.254. USE OF FOUNDATION SCHOOL PROGRAM
39	39	APPROPRIATIONS AS GUARANTEE. Money appropriated for the Foundation
40	40	School Program that may be used for the purpose under this
41	41	subchapter and under any other law, rule, or regulation shall be
42	42	used to guarantee eligible bonds as provided by this subchapter,
43	43	the General Appropriations Act, and board rule if using the
44	44	permanent school fund to guarantee particular bonds would result
45	45	in:
46	46	(1) a total amount of outstanding bonds guaranteed by
47	47	the permanent school fund exceeding the amount authorized under:
48	48	(A) Section 45.053; or
49	49	(B) federal law or regulations; or
50	50	(2) the use of a portion of the cost value of the
51	51	permanent school fund reserved under Section 45.0531, as determined
52	52	by the board and certified by the state auditor.
53	53	Sec. 45.255. APPLICATION FOR GUARANTEE. (a) A school
54	54	district seeking the guarantee of eligible bonds shall apply to the
55	55	commissioner using a form adopted by the commissioner for the
56	56	purpose. The commissioner may adopt a single form on which a
57	57	district seeking the guarantee of eligible bonds may apply
58	58	simultaneously for a guarantee first under Subchapter C, and then,
59	59	if that guarantee is rejected, for a guarantee under this
60	60	subchapter.
61	61	(b) An application under Subsection (a) must:
62	62	(1) include the information required by Section
63	63	45.055(b); and
64	64	(2) be accompanied by a fee set by board rule in an
65	65	amount designed to cover the costs of administering the guarantee
66	66	of the bonds.
67	67	Sec. 45.256. INVESTIGATION. (a) Following receipt of an
68	68	application for the guarantee of bonds, the commissioner shall
69	69	conduct an investigation of the applicant school district as
70	70	provided for an investigation under Section 45.056(a).
71	71	(b) If following the investigation under Subsection (a) the
72	72	commissioner is satisfied that the school district's bonds should
73	73	be guaranteed under Subchapter C or this subchapter, as applicable,
74	74	the commissioner shall endorse the bonds.
75	75	Sec. 45.257. GUARANTEE ENDORSEMENT. (a) The commissioner
76	76	shall endorse bonds approved for guarantee under this subchapter in
77	77	the manner provided under Section 45.057 for endorsing bonds
78	78	approved under Subchapter C.
79	79	(b) The guarantee is not effective unless the attorney
80	80	general approves the bonds under Section 45.005.
81	81	Sec. 45.258. NOTICE OF DEFAULT. Immediately following a
82	82	determination that a school district will be or is unable to pay
83	83	maturing or matured principal or interest on a guaranteed bond, but
84	84	not later than the fifth day before maturity date, the school
85	85	district shall notify the commissioner.
86	86	Sec. 45.259. PAYMENT FROM GUARANTEE FUNDS. (a)
87	87	Immediately following receipt of notice under Section 45.258, the
88	88	commissioner shall instruct the comptroller to transfer to the
89	89	district's paying agent from appropriations to the Foundation
90	90	School Program that may be used for the purpose under Section 45.252
91	91	and other law the amount necessary to pay the maturing or matured
92	92	principal or interest.
93	93	(b) Immediately following receipt of the funds for payment
94	94	of the principal or interest, the paying agent shall pay the amount
95	95	due and forward the canceled bond or coupon to the comptroller. The
96	96	comptroller shall hold the canceled bond or coupon on behalf of the
97	97	Foundation School Program.
98	98	(c) Following full reimbursement to the Foundation School
99	99	Program, with interest, the comptroller shall further cancel the
100	100	bond or coupon and forward it to the school district for which
101	101	payment was made.
102	102	(d) If money appropriated for the Foundation School Program
103	103	is used for purposes of this subchapter and, as a result there is
104	104	insufficient money to fully fund the Foundation School Program, the
105	105	commissioner shall, to the extent necessary, reduce each school
106	106	district's foundation school fund allocations in the same manner
107	107	provided by Section 42.253(h) for a case in which school district
108	108	entitlements exceed the amount appropriated.
109	109	Sec. 45.260. BONDS NOT ACCELERATED ON DEFAULT. If a school
110	110	district fails to pay principal or interest on a guaranteed bond
111	111	when the bond matures, other amounts not yet mature are not
112	112	accelerated and do not become due by virtue of the district's
113	113	default.
114	114	Sec. 45.261. REIMBURSEMENT OF FOUNDATION SCHOOL
115	115	FUND. (a) If the commissioner orders payment from the money
116	116	appropriated to the Foundation School Program on behalf of a school
117	117	district, the commissioner shall direct the comptroller to withhold
118	118	the amount paid, plus interest, from the first state money payable
119	119	to the district. The amount withheld shall be deposited to the
120	120	credit of the foundation school fund.
121	121	(b) In accordance with commissioner rules, the commissioner
122	122	may authorize reimbursement to the foundation school fund with
123	123	interest in a manner other than that provided by this section.
124	124	(c) The commissioner may order a school district to set an
125	125	ad valorem tax rate capable of producing an amount of revenue
126	126	sufficient to enable the district to:
127	127	(1) provide reimbursement under this section; and
128	128	(2) pay the remaining principal of and interest on the
129	129	bonds as the principal and interest become due.
130	130	(d) If a school district fails to comply with the
131	131	commissioner's order under Subsection (c), the commissioner may
132	132	impose any sanction on the district authorized to be imposed on a
133	133	district under Subchapter G, Chapter 39, including appointment of
134	134	a board of managers or annexation to another district, regardless
135	135	of the district's accreditation status or the duration of a
136	136	particular accreditation status.
137	137	(e) Any part of a school district's tax rate attributable to
138	138	producing revenue for purposes of Subsection (c)(1):
139	139	(1) is not considered part of the district's tax rate
140	140	for purposes of the tax rate limit under Section 45.0031; and
141	141	(2) is considered part of the district's:
142	142	(A) current debt rate for purposes of computing a
143	143	rollback tax rate under Section 26.08, Tax Code; and
144	144	(B) interest and sinking fund tax rate.
145	145	Sec. 45.262. REPEATED DEFAULTS. (a) If a total of two or
146	146	more payments are made under Subchapter C or this subchapter on the
147	147	guaranteed bonds of a school district and the commissioner
148	148	determines that the district is acting in bad faith under the
149	149	guarantee, the commissioner may request the attorney general to
150	150	institute appropriate legal action to compel the district and the
151	151	district's officers, agents, and employees to comply with the
152	152	duties required of them by law in regard to the bonds.
153	153	(b) Jurisdiction of proceedings under this section is in
154	154	district court in Travis County.
155	155	Sec. 45.263. RULES. The commissioner may adopt rules
156	156	necessary for the administration of the bond guarantee program
157	157	under this subchapter.
158	158	SECTION 2. Sections 45.053(a), (b), and (c), Education
159	159	Code, are amended to read as follows:
160	160	(a) Except as provided by Subsection (d), the commissioner
161	161	may not approve bonds for guarantee under this subchapter if the
162	162	approval would result in the total amount of outstanding guaranteed
163	163	bonds under this subchapter exceeding an amount equal to 2-1/2
164	164	times the cost value of the permanent school fund, as estimated by
165	165	the board and certified by the state auditor.
166	166	(b) Each year, the state auditor shall analyze the status of
167	167	guaranteed bonds under this subchapter as compared to the cost
168	168	value of the permanent school fund. Based on that analysis, the
169	169	state auditor shall certify whether the amount of bonds guaranteed
170	170	under this subchapter is within the limit prescribed by this
171	171	section.
172	172	(c) The commissioner shall prepare and the board shall adopt
173	173	an annual report on the status of the guaranteed bond program under
174	174	this subchapter.
175	175	SECTION 3. Subchapter C, Chapter 45, Education Code, is
176	176	amended by adding Section 45.0531 to read as follows:
177	177	Sec. 45.0531. ADDITIONAL LIMITATION: RESERVATION OF
178	178	PERCENTAGE OF PERMANENT SCHOOL FUND VALUE. (a) In addition to the
179	179	limitation on the approval of bonds for guarantee under Section
180	180	45.053, the board by rule may establish a percentage of the cost
181	181	value of the permanent school fund to be reserved from use in
182	182	guaranteeing bonds under this subchapter.
183	183	(b) If the board has reserved a portion of the permanent
184	184	school fund under Subsection (a), each year, the state auditor
185	185	shall analyze the status of the reserved portion compared to the
186	186	cost value of the permanent school fund. Based on that analysis,
187	187	the state auditor shall certify whether the portion of the
188	188	permanent school fund reserved from use in guaranteeing bonds under
189	189	this subchapter satisfies the reserve percentage established.
190	190	(c) If the board has reserved a portion of the permanent
191	191	school fund under Subsection (a), the board shall at least annually
192	192	consider whether to change the reserve percentage established to
193	193	ensure that the reserve percentage allows compliance with federal
194	194	law and regulations and serves to enable bonds guaranteed under
195	195	this subchapter to receive the highest available credit rating, as
196	196	determined by the board.
197	197	(d) This section may not be construed in a manner that
198	198	impairs, limits, or removes the guarantee of bonds that have been
199	199	approved by the commissioner.
200	200	SECTION 4. Section 45.054, Education Code, is amended to
201	201	read as follows:
202	202	Sec. 45.054. ELIGIBILITY. To be eligible for approval by
203	203	the commissioner, bonds must be:
204	204	(1) issued under Subchapter A of this chapter or under
205	205	Subchapter A, Chapter 1207, Government Code, to make a deposit
206	206	under Subchapter B or C of that chapter, by an accredited school
207	207	district; and
208	208	(2) payable from an ad valorem tax under Section
209	209	45.003.
210	210	SECTION 5. Section 45.055, Education Code, is amended to
211	211	read as follows:
212	212	Sec. 45.055. APPLICATION FOR GUARANTEE. (a) A school
213	213	district seeking the guarantee of eligible bonds shall apply to the
214	214	commissioner using a form adopted by the commissioner for the
215	215	purpose. The commissioner may adopt a single form on which a
216	216	district seeking the guarantee of eligible bonds may apply
217	217	simultaneously first for a guarantee under this subchapter and
218	218	then, if that guarantee is rejected, for a guarantee under
219	219	Subchapter I.
220	220	(b) An [The] application under Subsection (a) must include:
221	221	(1) the name of the school district and the principal
222	222	amount of the bonds to be issued;
223	223	(2) the name and address of the district's paying agent
224	224	for those bonds; and
225	225	(3) the maturity schedule, estimated interest rate,
226	226	and date of the bonds.
227	227	(c) An [The] application under Subsection (a) must be
228	228	accompanied by a fee set by rule of the board in an amount designed
229	229	to cover the costs of administering the guarantee of the bonds
230	230	[program].
231	231	SECTION 6. Section 45.056(b), Education Code, is amended to
232	232	read as follows:
233	233	(b) If following the investigation the commissioner is
234	234	satisfied that the school district's bonds should be guaranteed
235	235	under this subchapter or Subchapter I, as applicable, the
236	236	commissioner shall endorse the bonds.
237	237	SECTION 7. Section 45.061, Education Code, is amended by
238	238	adding Subsections (c) and (d) to read as follows:
239	239	(c) The commissioner may order a school district to set an
240	240	ad valorem tax rate capable of producing an amount of revenue
241	241	sufficient to enable the district to:
242	242	(1) provide reimbursement under this section; and
243	243	(2) pay the principal of and interest on district
244	244	bonds as the principal and interest become due.
245	245	(d) If a school district fails to comply with the
246	246	commissioner's order under Subsection (c), the commissioner may
247	247	impose any sanction on the district authorized to be imposed on a
248	248	district under Subchapter G, Chapter 39, including appointment of
249	249	a board of managers or annexation to another district, regardless
250	250	of the district's accreditation status or the duration of a
251	251	particular accreditation status.
252	252	SECTION 8. Section 45.062(a), Education Code, is amended to
253	253	read as follows:
254	254	(a) If a total of two or more payments [from the permanent
255	255	school fund] are made under this subchapter or Subchapter I on the
256	256	guaranteed bonds of a school district and the commissioner
257	257	determines that the school district is acting in bad faith under the
258	258	guarantee, the commissioner may request the attorney general to
259	259	institute appropriate legal action to compel the school district
260	260	and its officers, agents, and employees to comply with the duties
261	261	required of them by law in regard to the bonds.
262	262	SECTION 9. Section 45.001(a), Education Code, is amended to
263	263	read as follows:
264	264	(a) The governing board of an independent school district,
265	265	including the city council or commission that has jurisdiction over
266	266	a municipally controlled independent school district, the
267	267	governing board of a rural high school district, and the
268	268	commissioners court of a county, on behalf of each common school
269	269	district under its jurisdiction, may:
270	270	(1) issue bonds for:
271	271	(A) the construction, acquisition, and equipment
272	272	of school buildings in the district;
273	273	(B) the acquisition of property or the
274	274	refinancing of property financed under a contract entered under
275	275	Subchapter A, Chapter 271, Local Government Code, regardless of
276	276	whether payment obligations under the contract are due in the
277	277	current year or a future year;
278	278	(C) the purchase of the necessary sites for
279	279	school buildings; and
280	280	(D) the purchase of new school buses; and
281	281	(2) may levy, pledge, assess, and collect annual ad
282	282	valorem taxes sufficient to pay:
283	283	(A) the principal of and interest on the bonds as
284	284	the principal and interest become due, subject to Section 45.003;
285	285	and
286	286	(B) any reimbursement under Section 45.061 or
287	287	45.261.
288	288	SECTION 10. This Act takes effect immediately if it
289	289	receives a vote of two-thirds of all the members elected to each
290	290	house, as provided by Section 39, Article III, Texas Constitution.
291	291	If this Act does not receive the vote necessary for immediate
292	292	effect, this Act takes effect September 1, 2009.