Texas 2017 - 85th Regular

Texas Senate Bill SB1480 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	S.B. No. 1480
	1	+	By: Hughes S.B. No. 1480
	2	+	(Murphy)
2	3
3	4
	5	+	A BILL TO BE ENTITLED
4	6		AN ACT
5	7		relating to the guarantee of school district and charter district
6	8		bonds by the permanent school fund.
7	9		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
8	10		SECTION 1. Section 45.0532, Education Code, is amended by
9	11		amending Subsections (a), (a-1), and (b) and adding Subsections
10	12		(b-1), (b-2), (b-3), and (b-4) to read as follows:
11	13		(a) In addition to the general limitation under Section
12	14		45.053, the commissioner may not approve charter district bonds for
13	15		guarantee under this subchapter in a total amount that exceeds the
14	16		charter capacity [percentage of the total available capacity] of
15	17		the guaranteed bond program [that is equal to the percentage of the
16	18		number of students enrolled in open-enrollment charter schools in
17	19		this state compared to the total number of students enrolled in all
18	20		public schools in this state, as determined by the commissioner].
19	21		(a-1) The commissioner may not approve charter district
20	22		refunding or refinanced bonds for guarantee under this subchapter
21	23		in a total amount that exceeds one-half of the charter capacity
22	24		[total amount available for the guarantee of charter district bonds
23	25		under Subsection (a)].
24	26		(b) For purposes of this section [Subsection (a)], the
25	27		charter [total available] capacity of the guaranteed bond program
26	28		is the percentage of the total capacity of the guaranteed bond
27	29		program [limit] established by the board under Sections 45.053(d)
28	30		and 45.0531 that is equal to the percentage of the number of
29	31		students enrolled in open-enrollment charter schools in this state
30	32		compared to the total number of students enrolled in all public
31	33		schools in this state, as determined by the commissioner [minus the
32	34		total amount of outstanding guaranteed bonds]. Each time the board
33	35		increases the limit under Section 45.053(d), the total amount of
34	36		charter district bonds that may be guaranteed increases accordingly
35	37		under Subsection (a).
36	38		(b-1) The charter capacity provided by Subsection (b)
37	39		applies beginning with the state fiscal year that begins September
38	40		1, 2021. Subject to Subsections (b-2) and (b-3), the board shall
39	41		establish a charter capacity for the preceding state fiscal years
40	42		by increasing the total limitation on the amount of charter
41	43		district bonds that could be guaranteed under the law in effect on
42	44		January 1, 2017, by the following amount:
43	45		(1) for the state fiscal year that begins September 1,
44	46		2017, 20 percent of the difference between the charter capacity
45	47		provided by Subsection (b) and the charter capacity in effect on
46	48		January 1, 2017;
47	49		(2) for the state fiscal year that begins September 1,
48	50		2018, 40 percent of the difference between the charter capacity
49	51		provided by Subsection (b) and the charter capacity in effect on
50	52		January 1, 2017;
51	53		(3) for the state fiscal year that begins September 1,
52	54		2019, 60 percent of the difference between the charter capacity
53	55		provided by Subsection (b) and the charter capacity in effect on
54	56		January 1, 2017; and
55	57		(4) for the state fiscal year that begins September 1,
56	58		2020, 80 percent of the difference between the charter capacity
57	59		provided by Subsection (b) and the charter capacity in effect on
58	60		January 1, 2017.
59	61		(b-2) For any year, the board may increase the charter
60	62		capacity by less than the amount provided by Subsection (b-1) or may
61	63		decline to increase the charter capacity by any amount if:
62	64		(1) the board determines that increasing the charter
63	65		capacity by the amount provided by Subsection (b-1) would likely
64	66		result in a negative impact on the bond ratings provided by one or
65	67		more nationally recognized investment rating firms for school
66	68		district or charter district bonds for which a guarantee is
67	69		requested under this subchapter; or
68	70		(2) one or more charter districts default on payment
69	71		of maturing or matured principal or interest on a guaranteed bond,
70	72		resulting in a negative impact on the bond ratings provided by one
71	73		or more nationally recognized investment rating firms for school
72	74		district or charter district bonds for which a guarantee is
73	75		requested under this subchapter.
74	76		(b-3) If the board makes a determination described by
75	77		Subsection (b-2) for any year and modifies the schedule provided by
76	78		Subsection (b-1) for that year, the board may also make appropriate
77	79		adjustments to the schedule for subsequent years to reflect the
78	80		modification, provided that the charter capacity for any year may
79	81		not exceed the limit provided for that year by the schedule.
80	82		(b-4) Subsections (b-1), (b-2), and (b-3) and this
81	83		subsection expire September 1, 2022.
82	84		SECTION 2. Subchapter C, Chapter 45, Education Code, is
83	85		amended by adding Section 45.0533 to read as follows:
84	86		Sec. 45.0533. COMMUNICATION WITH NATIONALLY RECOGNIZED
85	87		INVESTMENT RATING FIRM. Information obtained from a nationally
86	88		recognized investment rating firm relating to Section 45.053,
87	89		45.0531, or 45.0532 that concerns a hypothetical or actual scenario
88	90		relating to the credit rating of the permanent school fund or the
89	91		bond guarantee program of the permanent school fund, and any
90	92		communications from, or information generated by, the agency, the
91	93		board, the commissioner, or their employees relating to that
92	94		information, is confidential and not subject to disclosure under
93	95		Chapter 552, Government Code.
94	96		SECTION 3. Section 45.056, Education Code, is amended by
95	97		adding Subsection (a-1) to read as follows:
96	98		(a-1) For purposes of this subsection, "bond security
97	99		documents" include the resolution, trust agreement, indenture,
98	100		ordinance, loan agreement, deed of trust, bond, note, and any
99	101		additional document executed in connection with the issuance of a
100	102		charter district bond for which a guarantee is requested under this
101	103		subchapter. The commissioner's investigation of an application
102	104		submitted by a charter district may include evaluation of whether
103	105		the charter district bond security documents provide a security
104	106		interest in real property pledged as collateral for the bond and the
105	107		repayment obligation under the proposed guarantee. The
106	108		commissioner may decline to approve the application if the
107	109		commissioner determines that sufficient security is not provided.
108	110		SECTION 4. Subchapter C, Chapter 45, Education Code, is
109	111		amended by adding Section 45.0561 to read as follows:
110	112		Sec. 45.0561. COMMISSIONER CONSIDERATION OF ADDITIONAL
111	113		FACTORS FOR CHARTER DISTRICT BONDS. (a) In addition to
112	114		considering all other applicable requirements under this
113	115		subchapter, in determining whether to approve charter district
114	116		bonds for guarantee the commissioner may consider any additional
115	117		reasonable factor that the commissioner determines necessary to
116	118		protect the guarantee program or minimize risk to the permanent
117	119		school fund, including:
118	120		(1) whether the charter district had an average daily
119	121		attendance of more than 75 percent of its student capacity for each
120	122		of the preceding three school years, or for each school year of
121	123		operation if the charter district has not been in operation for the
122	124		preceding three school years;
123	125		(2) the performance of the charter district under
124	126		Sections 39.053 and 39.054; and
125	127		(3) any other indicator of performance that could
126	128		affect the charter district's financial performance.
127	129		(b) This section expires September 1, 2019.
128	130		SECTION 5. Section 45.0571, Education Code, is amended by
129	131		adding Subsections (a-1) and (a-2) and amending Subsections (b) and
130	132		(c) to read as follows:
131	133		(a-1) Notwithstanding Chapter 404, Government Code, the
132	134		charter district bond guarantee reserve fund is managed by the
133	135		board in the same manner that the permanent school fund is managed
134	136		by the board. The board may invest money in the charter district
135	137		bond guarantee reserve fund in accordance with the investment
136	138		standard described by Section 404.024(j), Government Code, and the
137	139		board's investment is not subject to any other limitation or
138	140		requirement provided by Section 404.024, Government Code.
139	141		(a-2) The board shall adjust the investment portfolio of
140	142		charter district bond guarantee reserve fund money periodically to
141	143		ensure that the balance of the fund is sufficient to meet the cash
142	144		flow requirements of the fund.
143	145		(b) Subject to Subsection (c), a [A] charter district that
144	146		has a bond guaranteed as provided by this subchapter must
145	147		[annually] remit to the commissioner, for deposit in the charter
146	148		district bond guarantee reserve fund, an amount equal to 20 [10]
147	149		percent of the savings to the charter district that is a result of
148	150		the lower interest rate on the bond due to the guarantee by the
149	151		permanent school fund. The amount due under this section shall be
150	152		[amortized and] paid on receipt by the charter district of the bond
151	153		proceeds [over the duration of the bond. Each payment is due on the
152	154		anniversary of the date the bond was issued]. The commissioner
153	155		shall adopt rules to determine the amount [total and annual
154	156		amounts] due under this section.
155	157		(c) Subsection (b) does not apply if, at the time the
156	158		charter district receives the proceeds of the bond guaranteed as
157	159		provided by this subchapter, the balance of the charter district
158	160		bond guarantee reserve fund is at least equal to three percent of
159	161		the total amount of outstanding guaranteed bonds issued by charter
160	162		districts. [The commissioner may direct the comptroller to
161	163		annually withhold the amount due to the charter district bond
162	164		guarantee reserve fund under Subsection (b) for that year from the
163	165		state funds otherwise payable to the charter district.]
164	166		SECTION 6. Section 45.0571, Education Code, as amended by
165	167		this Act, applies only to a charter district bond that is approved
166	168		by the commissioner of education for guarantee under Subchapter C,
167	169		Chapter 45, Education Code, on or after the effective date of this
168	170		Act. A charter district bond that is approved by the commissioner
169	171		of education for guarantee under Subchapter C, Chapter 45,
170	172		Education Code, before the effective date of this Act is governed by
171	173		the law in effect on the date the bond is approved for guarantee,
172	174		and the former law is continued in effect for that purpose.
173	175		SECTION 7. This Act takes effect September 1, 2017.
174		-	______________________________ ______________________________
175		-	President of the Senate Speaker of the House
176		-	I hereby certify that S.B. No. 1480 passed the Senate on
177		-	May 1, 2017, by the following vote: Yeas 27, Nays 3, one present
178		-	not voting.
179		-	______________________________
180		-	Secretary of the Senate
181		-	I hereby certify that S.B. No. 1480 passed the House on
182		-	May 23, 2017, by the following vote: Yeas 139, Nays 7, one
183		-	present not voting.
184		-	______________________________
185		-	Chief Clerk of the House
186		-	Approved:
187		-	______________________________
188		-	Date
189		-	______________________________
190		-	Governor