| 1 | 1 | | By: Aycock H.B. No. 3697 |
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| 2 | 2 | | |
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| 3 | 3 | | |
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| 4 | 4 | | A BILL TO BE ENTITLED |
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| 5 | 5 | | AN ACT |
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| 6 | 6 | | relating to the issuance of certain tax-supported bonds. |
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| 7 | 7 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 8 | 8 | | SECTION 1. Section 45.0031, Education Code, is amended by |
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| 9 | 9 | | amending Subsection (a) and adding Subsections (c-1) and (f) to |
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| 10 | 10 | | read as follows: |
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| 11 | 11 | | (a) Before issuing bonds described by Section 45.001, a |
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| 12 | 12 | | school district must demonstrate to the attorney general under |
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| 13 | 13 | | Subsection (b), [or] (c), or (c-1) that, with respect to the |
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| 14 | 14 | | proposed issuance, the district has a projected ability to pay the |
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| 15 | 15 | | principal of and interest on the proposed bonds and all previously |
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| 16 | 16 | | issued bonds other than bonds authorized to be issued at an election |
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| 17 | 17 | | held on or before April 1, 1991, and issued before September 1, |
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| 18 | 18 | | 1992, from a tax at a rate not to exceed $0.50 per $100 of valuation. |
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| 19 | 19 | | (c-1) A district may demonstrate the ability to comply with |
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| 20 | 20 | | Subsection (a) by using pro forma debt service projections on the |
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| 21 | 21 | | proposed bonds and all previously issued bonds described in |
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| 22 | 22 | | Subsection (a) based on current market interest rates and yields, |
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| 23 | 23 | | as determined by the district and certified by a financial advisor |
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| 24 | 24 | | or consultant to the district. For the purposes of determining pro |
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| 25 | 25 | | forma debt service on the proposed bonds and all previously issued |
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| 26 | 26 | | bonds described in Subsection (a), the district shall amortize the |
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| 27 | 27 | | proposed bonds and the previously issued bonds over the maximum |
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| 28 | 28 | | term for such bonds permitted by law. |
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| 29 | 29 | | (f) A district that demonstrates to the attorney general |
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| 30 | 30 | | that the district has the ability to comply with Subsection (a) may |
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| 31 | 31 | | issue the proposed bonds in any manner that will produce actual debt |
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| 32 | 32 | | service savings of at least 10 percent, as determined by the |
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| 33 | 33 | | district, when compared to the pro forma debt service payments on |
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| 34 | 34 | | the proposed bonds used to demonstrate that the district has the |
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| 35 | 35 | | projected ability to comply with Subsection (a). Actual debt |
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| 36 | 36 | | service savings shall be determined using the difference between |
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| 37 | 37 | | the total amount of the pro forma debt service payments on the |
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| 38 | 38 | | proposed bonds and the actual debt service on the proposed bonds, as |
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| 39 | 39 | | a percentage of the total amount of the pro forma debt service |
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| 40 | 40 | | payments on the proposed bonds. |
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| 41 | 41 | | SECTION 2. This Act takes effect September 1, 2009. |
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