Texas 2017 - 85th 1st C.S.

Texas Senate Bill SB106 Compare Versions

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

Old	New	Differences
1	1	85S10741 KKA-D
2	2	By: Hughes S.B. No. 106
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the creation of a state financing program administered
8	8	by the Texas Public Finance Authority to assist school districts
9	9	with certain expenses; granting authority to issue bonds or other
10	10	obligations.
11	11	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
12	12	SECTION 1. Subchapter E, Chapter 45, Education Code, is
13	13	amended by adding Sections 45.116 and 45.117 to read as follows:
14	14	Sec. 45.116. ASSISTANCE FROM TEXAS PUBLIC FINANCE
15	15	AUTHORITY. (a) A school district may:
16	16	(1) borrow money from the Texas Public Finance
17	17	Authority made available in accordance with Section 1232.1031,
18	18	Government Code; and
19	19	(2) as necessary in connection with obtaining loans or
20	20	other financial assistance from the Texas Public Finance Authority
21	21	in accordance with Section 1232.1031, Government Code:
22	22	(A) issue bonds and notes, provided that the term
23	23	of an obligation issued for this purpose may not exceed 15 years;
24	24	and
25	25	(B) enter into loan agreements, lease
26	26	agreements, lease purchase agreements, or other appropriate
27	27	financing agreements with the Texas Public Finance Authority.
28	28	(b) A school district may:
29	29	(1) make payments on an obligation or agreement issued
30	30	or executed under Subsection (a) using any available funds,
31	31	including maintenance and operations tax revenue; and
32	32	(2) secure the payment of an obligation or agreement
33	33	issued or executed under Subsection (a) through:
34	34	(A) creating a lien against equipment obtained
35	35	using the proceeds of the obligation;
36	36	(B) imposing an ad valorem tax otherwise
37	37	authorized by law; or
38	38	(C) obtaining credit enhancement under
39	39	Subchapter I.
40	40	Sec. 45.117. PAYMENT PROTECTIONS FOR TEXAS PUBLIC FINANCE
41	41	AUTHORITY. (a) In this section, "obligation" means an obligation
42	42	issued by the Texas Public Finance Authority under Section
43	43	1232.1031, Government Code, for the benefit of a school district.
44	44	(b) Immediately following a determination that a school
45	45	district will be or is unable to pay maturing or matured principal
46	46	or interest on an obligation, but not later than the fifth day
47	47	before maturity date, the school district shall notify the
48	48	commissioner.
49	49	(c) Immediately following receipt of notice from a school
50	50	district under Subsection (b), the commissioner shall instruct the
51	51	comptroller to transfer to the Texas Public Finance Authority from
52	52	the next payment of state money payable to the district from
53	53	appropriations to the Foundation School Program the amount
54	54	necessary to pay the maturing or matured principal or interest.
55	55	(d) Immediately following receipt of the funds for payment
56	56	of the principal or interest, the Texas Public Finance Authority
57	57	shall forward the canceled obligation to the comptroller. The
58	58	comptroller shall hold the canceled obligation on behalf of the
59	59	Texas Public Finance Authority.
60	60	(e) Following full reimbursement to the Texas Public
61	61	Finance Authority with interest, the comptroller shall cancel the
62	62	obligation and forward it to the school district.
63	63	(f) If a school district fails to pay principal or interest
64	64	on an obligation at maturity, other obligations not yet mature are
65	65	not accelerated and are not due by virtue of the school district's
66	66	default.
67	67	(g) If a total of two or more payments are made using state
68	68	money otherwise payable to a school district from appropriations to
69	69	the Foundation School Program and the commissioner determines that
70	70	the district is acting in bad faith, the commissioner may request
71	71	the attorney general to institute appropriate legal action to
72	72	compel the school district and the district's officers, agents, and
73	73	employees to comply with the duties required by law in regard to the
74	74	appropriate obligations. Jurisdiction of proceedings under this
75	75	subsection is in district court in Travis County.
76	76	(h) The Texas Public Finance Authority may adopt rules
77	77	necessary for the administration of obligations issued on behalf of
78	78	school districts.
79	79	SECTION 2. Section 45.252, Education Code, is amended by
80	80	adding Subsection (a-1) to read as follows:
81	81	(a-1) A school district may apply for credit enhancement
82	82	under this subchapter of obligations issued under Section 45.116.
83	83	SECTION 3. Subchapter C, Chapter 1232, Government Code, is
84	84	amended by adding Section 1232.1031 to read as follows:
85	85	Sec. 1232.1031. ISSUANCE OF OBLIGATIONS TO ASSIST SCHOOL
86	86	DISTRICTS. (a) The authority may issue and sell obligations to
87	87	finance:
88	88	(1) loans to eligible school districts for eligible
89	89	purposes;
90	90	(2) the purchase by the authority of vehicles,
91	91	equipment, or appliances for sale, lease, or lease purchase to
92	92	eligible school districts;
93	93	(3) a lease or other agreement that concerns equipment
94	94	that an eligible school district has purchased or leased or intends
95	95	to purchase or lease; and
96	96	(4) costs associated with maintenance, repair,
97	97	rehabilitation, or renovation of eligible school district
98	98	facilities.
99	99	(b) The authority may use proceeds of obligations issued
100	100	under this section to pay costs of administering this section,
101	101	including costs of issuing obligations.
102	102	(c) In connection with a purchase or project financed with
103	103	the proceeds of obligations issued under this section, the
104	104	authority may:
105	105	(1) enter into loan agreements, lease agreements,
106	106	lease purchase agreements, or other appropriate financing
107	107	agreements with eligible school districts;
108	108	(2) purchase obligations issued by eligible school
109	109	districts; and
110	110	(3) enter into credit agreements and exercise other
111	111	powers granted to issuers under Chapter 1371.
112	112	(d) The authority may secure payment of authority
113	113	obligations issued under this section with the pledge of money in
114	114	the school district equipment and improvement fund established
115	115	under Subsection (e).
116	116	(e) The school district equipment and improvement fund is
117	117	established outside the treasury as a trust fund and is
118	118	administered by the comptroller on behalf of the authority as
119	119	directed or agreed to by the board. The fund consists of proceeds
120	120	of obligations issued by the authority under this section and
121	121	obligations and agreements issued or executed by school districts
122	122	and purchased or funded by the authority with proceeds of authority
123	123	obligations. Money in the fund may be spent without appropriation
124	124	and may be used only to fund activities under this section or to
125	125	secure repayment of authority obligations. Interest and income
126	126	from the assets of the fund shall be credited to and deposited in
127	127	the fund.
128	128	(f) The board may establish funds and accounts determined to
129	129	be necessary or appropriate in connection with the activities of
130	130	the authority under this section.
131	131	(g) The aggregate amount of obligations issued by the
132	132	authority under this section outstanding at one time may not exceed
133	133	$100 million.
134	134	(h) The board shall adopt rules necessary to implement this
135	135	section, including rules prescribing eligibility requirements for
136	136	school districts seeking assistance under this section, rules
137	137	identifying eligible purposes for purposes of Subsection (a)(1),
138	138	and rules identifying eligible school district facilities for
139	139	purposes of Subsection (a)(4). Before adopting or modifying a rule
140	140	under this subsection, the board shall consult with the
141	141	commissioner of education.
142	142	(i) Rules adopted under Subsection (h) may establish a
143	143	process under which a school district must obtain approval by the
144	144	commissioner of education in order to be eligible for assistance
145	145	under this section.
146	146	(j) The authority may not issue an obligation under this
147	147	section on or after September 1, 2021. The prohibition imposed by
148	148	this subsection does not apply to:
149	149	(1) refunding bonds issued by the authority in
150	150	accordance with Chapter 1207; or
151	151	(2) other obligations issued by the authority to
152	152	refinance obligations incurred under this section before September
153	153	1, 2021.
154	154	SECTION 4. This Act takes effect immediately if it receives
155	155	a vote of two-thirds of all the members elected to each house, as
156	156	provided by Section 39, Article III, Texas Constitution. If this
157	157	Act does not receive the vote necessary for immediate effect, this
158	158	Act takes effect on the 91st day after the last day of the
159	159	legislative session.