Texas 2011 - 82nd Regular

Texas Senate Bill SB597 Compare Versions

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1	1	By: Shapiro S.B. No. 597
2	2	(Eissler)
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the guarantee of open-enrollment charter school bonds
8	8	by the permanent school fund.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Subchapter D, Chapter 12, Education Code, is
11	11	amended by adding Section 12.135 to read as follows:
12	12	Sec. 12.135. DESIGNATION AS CHARTER DISTRICT FOR PURPOSES
13	13	OF BOND GUARANTEE. (a) On the application of the charter holder,
14	14	the commissioner may grant designation as a charter district to an
15	15	open-enrollment charter school that meets financial standards
16	16	adopted by the commissioner. The financial standards must require
17	17	an open-enrollment charter school to have an investment grade
18	18	credit rating as specified by Section 45.0541.
19	19	(b) A charter district may apply for bonds issued under
20	20	Chapter 53 for the open-enrollment charter school to be guaranteed
21	21	by the permanent school fund as provided by Chapter 45.
22	22	SECTION 2. Section 45.051, Education Code, is amended by
23	23	adding Subdivision (1-a) and amending Subdivision (2) to read as
24	24	follows:
25	25	(1-a) "Charter district" means an open-enrollment
26	26	charter school designated as a charter district under Section
27	27	12.135.
28	28	(2) "Paying agent" means the financial institution
29	29	that is designated by a school district or charter district as its
30	30	agent for the payment of the principal of and interest on guaranteed
31	31	bonds.
32	32	SECTION 3. Section 45.052, Education Code, is amended to
33	33	read as follows:
34	34	Sec. 45.052. GUARANTEE. (a) On approval by the
35	35	commissioner, bonds issued under Subchapter A by a school district
36	36	or Chapter 53 for a charter district, including refunding bonds,
37	37	are guaranteed by the corpus and income of the permanent school
38	38	fund.
39	39	(b) Notwithstanding any amendment of this subchapter or
40	40	other law, the guarantee under this subchapter of school district
41	41	or charter district bonds remains in effect until the date those
42	42	bonds mature or are defeased in accordance with state law.
43	43	SECTION 4. Subchapter C, Chapter 45, Education Code, is
44	44	amended by adding Section 45.0532 to read as follows:
45	45	Sec. 45.0532. LIMITATION ON GUARANTEE OF CHARTER DISTRICT
46	46	BONDS. (a) In addition to the general limitation under Section
47	47	45.053, the commissioner may not approve charter district bonds for
48	48	guarantee under this subchapter in a total amount that exceeds the
49	49	percentage of the total available capacity of the guaranteed bond
50	50	program that is equal to the percentage of the number of students
51	51	enrolled in open-enrollment charter schools in this state compared
52	52	to the total number of students enrolled in all public schools in
53	53	this state, as determined by the commissioner.
54	54	(b) For purposes of Subsection (a), the total available
55	55	capacity of the guaranteed bond program is the limit established by
56	56	the board under Sections 45.053(d) and 45.0531 minus the total
57	57	amount of outstanding guaranteed bonds. Each time the board
58	58	increases the limit under Section 45.053(d), the total amount of
59	59	charter district bonds that may be guaranteed increases accordingly
60	60	under Subsection (a).
61	61	(c) Notwithstanding Subsections (a) and (b), the
62	62	commissioner may not approve charter district bonds for guarantee
63	63	under this subchapter if the guarantee will result in lower bond
64	64	ratings for school district bonds for which a guarantee is
65	65	requested under this subchapter.
66	66	(d) The commissioner may request that the comptroller place
67	67	the portion of the permanent school fund committed to the guarantee
68	68	of charter district bonds in a segregated account if the
69	69	commissioner determines that a separate account is needed to avoid
70	70	any negative impact on the bond ratings of school district bonds for
71	71	which a guarantee is requested under this subchapter.
72	72	(e) A guarantee of charter district bonds must be made in
73	73	accordance with this chapter and any applicable federal law.
74	74	SECTION 5. Section 45.054, Education Code, is amended to
75	75	read as follows:
76	76	Sec. 45.054. ELIGIBILITY OF SCHOOL DISTRICT BONDS. To be
77	77	eligible for approval by the commissioner, school district bonds
78	78	must be issued under Subchapter A of this chapter or under
79	79	Subchapter A, Chapter 1207, Government Code, to make a deposit
80	80	under Subchapter B or C of that chapter, by an accredited school
81	81	district.
82	82	SECTION 6. Subchapter C, Chapter 45, Education Code, is
83	83	amended by adding Section 45.0541 to read as follows:
84	84	Sec. 45.0541. ELIGIBILITY OF CHARTER DISTRICT BONDS. To be
85	85	eligible for approval by the commissioner, charter district bonds
86	86	must:
87	87	(1) without the guarantee, be rated as investment
88	88	grade by a nationally recognized investment rating firm; and
89	89	(2) be issued under Chapter 53.
90	90	SECTION 7. Subsections (a) and (b), Section 45.055,
91	91	Education Code, are amended to read as follows:
92	92	(a) A school district or charter district seeking guarantee
93	93	of eligible bonds under this subchapter shall apply to the
94	94	commissioner using a form adopted by the commissioner for the
95	95	purpose. The commissioner may adopt a single form on which a school
96	96	district seeking guarantee or credit enhancement of eligible bonds
97	97	may apply simultaneously first for guarantee under this subchapter
98	98	and then, if that guarantee is rejected, for credit enhancement
99	99	under Subchapter I.
100	100	(b) An application under Subsection (a) must include:
101	101	(1) the name of the school district or charter
102	102	district and the principal amount of the bonds to be issued;
103	103	(2) the name and address of the district's paying agent
104	104	for those bonds; and
105	105	(3) the maturity schedule, estimated interest rate,
106	106	and date of the bonds.
107	107	SECTION 8. Section 45.056, Education Code, is amended to
108	108	read as follows:
109	109	Sec. 45.056. INVESTIGATION. (a) Following receipt of an
110	110	application for the guarantee of bonds, the commissioner shall
111	111	conduct an investigation of the applicant school district or
112	112	charter district in regard to:
113	113	(1) the status of the district's accreditation; and
114	114	(2) the total amount of outstanding guaranteed bonds.
115	115	(b) If following the investigation the commissioner is
116	116	satisfied that the school district's bonds should be guaranteed
117	117	under this subchapter or provided credit enhancement under
118	118	Subchapter I, as applicable, or the charter district's bonds should
119	119	be guaranteed under this subchapter, the commissioner shall endorse
120	120	the bonds.
121	121	SECTION 9. Subsection (b), Section 45.057, Education Code,
122	122	is amended to read as follows:
123	123	(b) The guarantee is not effective unless the attorney
124	124	general approves the bonds under Section 45.005 or 53.40, as
125	125	applicable.
126	126	SECTION 10. Subchapter C, Chapter 45, Education Code, is
127	127	amended by adding Section 45.0571 to read as follows:
128	128	Sec. 45.0571. CHARTER DISTRICT BOND GUARANTEE RESERVE FUND.
129	129	(a) The charter district bond guarantee reserve fund is a special
130	130	fund in the state treasury outside the general revenue fund. The
131	131	following amounts shall be deposited in the fund:
132	132	(1) money due from a charter district as provided by
133	133	Subsection (b); and
134	134	(2) interest earned on balances in the fund.
135	135	(b) A charter district that has a bond guaranteed as
136	136	provided by this subchapter must annually remit to the
137	137	commissioner, for deposit in the charter district bond guarantee
138	138	reserve fund, an amount equal to 10 percent of the savings to the
139	139	charter district that is a result of the lower interest rate on the
140	140	bond due to the guarantee by the permanent school fund. The amount
141	141	due under this section shall be amortized and paid over the duration
142	142	of the bond. Each payment is due on the anniversary of the date the
143	143	bond was issued. The commissioner shall adopt rules to determine
144	144	the total and annual amounts due under this section.
145	145	(c) The commissioner may direct the comptroller to annually
146	146	withhold the amount due to the charter district bond guarantee
147	147	reserve fund under Subsection (b) for that year from the state funds
148	148	otherwise payable to the charter district.
149	149	(d) Each year, the commissioner shall:
150	150	(1) review the condition of the bond guarantee program
151	151	and the amount that must be deposited in the charter district bond
152	152	guarantee reserve fund from charter districts; and
153	153	(2) determine if charter districts should be required
154	154	to submit a greater percentage of the savings resulting from the
155	155	guarantee.
156	156	(e) The commissioner shall make recommendations to the
157	157	legislature based on the review under Subsection (d).
158	158	SECTION 11. Section 45.058, Education Code, is amended to
159	159	read as follows:
160	160	Sec. 45.058. NOTICE OF DEFAULT. Immediately following a
161	161	determination that a school district or charter district will be or
162	162	is unable to pay maturing or matured principal or interest on a
163	163	guaranteed bond, but not later than the fifth day before maturity
164	164	date, the school district or charter district shall notify the
165	165	commissioner.
166	166	SECTION 12. The heading to Section 45.059, Education Code,
167	167	is amended to read as follows:
168	168	Sec. 45.059. PAYMENT OF SCHOOL DISTRICT BOND ON DEFAULT
169	169	[FROM PERMANENT SCHOOL FUND].
170	170	SECTION 13. Subsection (a), Section 45.059, Education Code,
171	171	is amended to read as follows:
172	172	(a) Immediately following receipt of notice under Section
173	173	45.058 that a school district will be or is unable to pay maturing
174	174	or matured principal or interest on a guaranteed bond, the
175	175	commissioner shall instruct the comptroller to transfer from the
176	176	appropriate account in the permanent school fund to the district's
177	177	paying agent the amount necessary to pay the maturing or matured
178	178	principal or interest.
179	179	SECTION 14. Subchapter C, Chapter 45, Education Code, is
180	180	amended by adding Section 45.0591 to read as follows:
181	181	Sec. 45.0591. PAYMENT OF CHARTER DISTRICT BOND ON DEFAULT.
182	182	(a) Immediately following receipt of notice under Section 45.058
183	183	that a charter district will be or is unable to pay maturing or
184	184	matured principal or interest on a guaranteed bond, the
185	185	commissioner shall instruct the comptroller to transfer from the
186	186	charter district bond guarantee reserve fund created under Section
187	187	45.0571 to the district's paying agent the amount necessary to pay
188	188	the maturing or matured principal or interest.
189	189	(b) If money in the charter district bond guarantee reserve
190	190	fund is insufficient to pay the amount due on a bond under
191	191	Subsection (a), the commissioner shall instruct the comptroller to
192	192	transfer from the appropriate account in the permanent school fund
193	193	to the district's paying agent the amount necessary to pay the
194	194	balance of the unpaid maturing or matured principal or interest.
195	195	(c) Immediately following receipt of the funds for payment
196	196	of the principal or interest, the paying agent shall pay the amount
197	197	due and forward the canceled bond or coupon to the comptroller. The
198	198	comptroller shall hold the canceled bond or coupon on behalf of the
199	199	fund or funds from which payment was made.
200	200	(d) Following full reimbursement to the charter district
201	201	bond guarantee reserve fund and the permanent school fund, if
202	202	applicable, with interest, the comptroller shall further cancel the
203	203	bond or coupon and forward it to the charter district for which
204	204	payment was made.
205	205	SECTION 15. Section 45.060, Education Code, is amended to
206	206	read as follows:
207	207	Sec. 45.060. BONDS NOT ACCELERATED ON DEFAULT. If a school
208	208	district or charter district fails to pay principal or interest on a
209	209	guaranteed bond when it matures, other amounts not yet mature are
210	210	not accelerated and do not become due by virtue of the school
211	211	district's or charter district's default.
212	212	SECTION 16. The heading to Section 45.061, Education Code,
213	213	is amended to read as follows:
214	214	Sec. 45.061. REIMBURSEMENT OF FUNDS [PERMANENT SCHOOL
215	215	FUND].
216	216	SECTION 17. Section 45.061, Education Code, is amended by
217	217	amending Subsections (a) and (b) and adding Subsection (a-1) to
218	218	read as follows:
219	219	(a) If the commissioner orders payment from the permanent
220	220	school fund or the charter district bond guarantee reserve fund on
221	221	behalf of a school district or charter district, the commissioner
222	222	shall direct the comptroller to withhold the amount paid, plus
223	223	interest, from the first state money payable to the school district
224	224	or charter district. Except as provided by Subsection (a-1), the
225	225	[The] amount withheld shall be deposited to the credit of the
226	226	permanent school fund.
227	227	(a-1) After the permanent school fund has been reimbursed
228	228	for all money paid from the fund as the result of a default of a
229	229	charter district bond guaranteed under this subchapter, any
230	230	remaining amounts withheld under Subsection (a) shall be deposited
231	231	to the credit of the charter district bond guarantee reserve fund.
232	232	(b) In accordance with the rules of the board, the
233	233	commissioner may authorize reimbursement to the permanent school
234	234	fund or charter district bond guarantee reserve fund with interest
235	235	in a manner other than that provided by this section.
236	236	SECTION 18. Section 45.062, Education Code, is amended by
237	237	adding Subsection (a-1) to read as follows:
238	238	(a-1) If a total of two or more payments are made under this
239	239	subchapter on charter district bonds and the commissioner
240	240	determines that the charter district is acting in bad faith under
241	241	the guarantee program under this subchapter, the commissioner may
242	242	request the attorney general to institute appropriate legal action
243	243	to compel the charter district and its officers, agents, and
244	244	employees to comply with the duties required of them by law in
245	245	regard to the bonds.
246	246	SECTION 19. Subdivision (10), Section 53.02, Education
247	247	Code, is amended to read as follows:
248	248	(10) "Authorized charter school" means an
249	249	open-enrollment charter school that holds a charter granted under
250	250	Subchapter D, Chapter 12, and includes an open-enrollment charter
251	251	school designated as a charter district as provided by Section
252	252	12.135.
253	253	SECTION 20. Section 53.351, Education Code, is amended by
254	254	amending Subsection (f) and adding Subsection (f-1) to read as
255	255	follows:
256	256	(f) Except as provided by Subsection (f-1), a [A] revenue
257	257	bond issued under this section is not a debt of the state or any
258	258	state agency, political corporation, or political subdivision of
259	259	the state and is not a pledge of the faith and credit of any of these
260	260	entities. A revenue bond is payable solely from the revenue of the
261	261	authorized open-enrollment charter school on whose behalf the bond
262	262	is issued. A revenue bond issued under this section must contain on
263	263	its face a statement to the effect that:
264	264	(1) neither the state nor a state agency, political
265	265	corporation, or political subdivision of the state is obligated to
266	266	pay the principal of or interest on the bond; and
267	267	(2) neither the faith and credit nor the taxing power
268	268	of the state or any state agency, political corporation, or
269	269	political subdivision of the state is pledged to the payment of the
270	270	principal of or interest on the bond.
271	271	(f-1) Subsection (f) does not apply to a revenue bond issued
272	272	under this section for a charter district if the bond is approved
273	273	for guarantee by the permanent school fund under Subchapter C,
274	274	Chapter 45.
275	275	SECTION 21. This Act applies only to a bond issued or
276	276	refunded on or after the effective date of this Act by an
277	277	open-enrollment charter school designated as a charter district
278	278	under Section 12.135, Education Code, as added by this Act. A bond
279	279	issued or refunded by an open-enrollment charter school before the
280	280	effective date of this Act is governed by the law in effect
281	281	immediately before that date, and that law is continued in effect
282	282	for that purpose.
283	283	SECTION 22. This Act takes effect September 1, 2011.
284	284	COMMITTEE AMENDMENT NO. 1
285	285	Amend S.B. No. 597 (senate engrossed version) by adding the
286	286	following appropriately numbered SECTIONS to the bill and
287	287	renumbering subsequent SECTIONS accordingly:
288	288	SECTION ____. Section 12.120, Education Code, is amended by
289	289	adding Subsection (c) to read as follows:
290	290	(c) A person may not serve as a member of the governing body
291	291	of a charter holder, as a member of the governing body of an
292	292	open-enrollment charter school, or as an officer of an
293	293	open-enrollment charter school unless the person is a qualified
294	294	voter.
295	295	SECTION ____. Subchapter D, Chapter 12, Education Code, is
296	296	amended by adding Section 12.1201 to read as follows:
297	297	Sec. 12.1201. PROOF OF UNITED STATES CITIZENSHIP. (a) This
298	298	section applies to:
299	299	(1) a person serving as a member of the governing body
300	300	of:
301	301	(A) a charter holder; or
302	302	(B) an open-enrollment charter school; and
303	303	(2) an officer of an open-enrollment charter school
304	304	who receives one of the five highest salaries paid by the charter
305	305	school.
306	306	(b) A person to whom this section applies must submit to the
307	307	agency proof of United States citizenship in the form of:
308	308	(1) a certified copy of the person's birth
309	309	certificate;
310	310	(2) a United States passport;
311	311	(3) a certificate of naturalization; or
312	312	(4) any other form of proof prescribed by the
313	313	secretary of state.
314	314	82R28835 CAE-DHilderbran
315	315	COMMITTEE AMENDMENT NO. 2
316	316	Amend S.B. No. 597 (senate engrossed version) by adding the
317	317	following appropriately numbered SECTION to the bill and
318	318	renumbering subsequent SECTIONS accordingly:
319	319	SECTION ____. Subchapter D, Chapter 12, Education Code, is
320	320	amended by adding Section 12.1202 to read as follows:
321	321	Sec. 12.1202. INTERNET ACCESS TO INFORMATION REGARDING
322	322	GOVERNING BODY AND OFFICERS. (a) This section applies to:
323	323	(1) a person serving as a member of the governing body
324	324	of:
325	325	(A) a charter holder; or
326	326	(B) an open-enrollment charter school; and
327	327	(2) an officer of an open-enrollment charter school
328	328	who receives one of the five highest salaries paid by the charter
329	329	school.
330	330	(b) A charter holder or open-enrollment charter school
331	331	shall post on the Internet website of the charter holder or charter
332	332	school the name, title, and resume of each person to whom this
333	333	section applies.
334	334	82R28834 CAE-DHilderbran
335	335	COMMITTEE AMENDMENT NO. 3
336	336	Amend S.B. No. 597 (senate engrossed version) by adding the
337	337	following appropriately numbered SECTION to the bill and
338	338	renumbering subsequent SECTIONS of the bill accordingly:
339	339	SECTION ____. Subchapter D, Chapter 12, Education Code, is
340	340	amended by adding Section 12.1072 to read as follows:
341	341	Sec. 12.1072. INTERNET ACCESS TO CHECKING ACCOUNT
342	342	TRANSACTIONS. Each open-enrollment charter school shall post each
343	343	month on the school's Internet website a copy of the school's
344	344	checking account transaction register to the extent necessary to
345	345	provide, for each payment by check or electronic fund transfer or
346	346	any other method of disbursing funds, the following information:
347	347	(1) the amount of the payment;
348	348	(2) the date of the payment;
349	349	(3) a brief description of the purpose of the payment;
350	350	and
351	351	(4) the name of the payee.
352	352	82R28833 CAE-DHilderbran