TX
Texas House Bill HB1131

Texas 2019 - 86th Regular

Texas House Bill HB1131 Compare Versions

OldNewDifferences
1-By: Cole, et al. (Senate Sponsor - Hughes) H.B. No. 1131
2- (In the Senate - Received from the House May 3, 2019;
3- May 8, 2019, read first time and referred to Committee on
4- Education; May 17, 2019, reported adversely, with favorable
5- Committee Substitute by the following vote: Yeas 7, Nays 3,
6- 1 present not voting; May 17, 2019, sent to printer.)
7-Click here to see the committee vote
8- COMMITTEE SUBSTITUTE FOR H.B. No. 1131 By: Lucio
1+By: Cole, Ashby, Minjarez, Allen, Guillen, H.B. No. 1131
2+ et al.
93
104
115 A BILL TO BE ENTITLED
126 AN ACT
137 relating to the creation of a state financing program administered
14- by the Texas Public Finance Authority to assist certain school
15- districts with certain expenses; granting authority to issue bonds
16- or other obligations.
8+ by the Texas Public Finance Authority to assist school districts
9+ with certain expenses; granting authority to issue bonds or other
10+ obligations.
1711 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
18- SECTION 1. Subchapter E, Chapter 45, Education Code, is
19- amended by adding Sections 45.114 and 45.115 to read as follows:
12+ SECTION 1. Section 45.051, Education Code, is amended to
13+ read as follows:
14+ Sec. 45.051. DEFINITIONS. In this subchapter:
15+ (1) "Authority" means the Texas Public Finance
16+ Authority.
17+ (2) "Board" means the State Board of Education.
18+ (3) [(1-a)] "Charter district" means an
19+ open-enrollment charter school designated as a charter district
20+ under Section 12.135.
21+ (4) [(2)] "Paying agent" means the financial
22+ institution that is designated by a school district, a [or] charter
23+ district, or the authority as its agent for the payment of the
24+ principal of and interest on guaranteed bonds.
25+ SECTION 2. Section 45.052, Education Code, is amended to
26+ read as follows:
27+ Sec. 45.052. GUARANTEE. (a) On approval by the
28+ commissioner, bonds issued under Subchapter A by a school district,
29+ [or] Chapter 53 for a charter district, or Section 1232.1031,
30+ Government Code, by the Texas Public Finance Authority, including
31+ refunding and refinanced bonds, are guaranteed by the corpus and
32+ income of the permanent school fund.
33+ (b) Notwithstanding any amendment of this subchapter or
34+ other law, the guarantee under this subchapter of school district,
35+ [or] charter district, or authority bonds remains in effect until
36+ the date those bonds mature or are defeased in accordance with state
37+ law.
38+ (c) In seeking the guarantee of bonds under this subchapter,
39+ the authority is subject to each provision of this subchapter that
40+ applies to a school district seeking guarantee of school district
41+ bonds, except as provided by board rules adopted under Section
42+ 45.063.
43+ (d) A reference in this subchapter to bonds issued by the
44+ Texas Public Finance Authority includes short-term debt
45+ obligations and any other obligations the authority is authorized
46+ to issue under Section 1232.1031, Government Code.
47+ SECTION 3. Section 45.057(b), Education Code, is amended to
48+ read as follows:
49+ (b) The guarantee is not effective unless the attorney
50+ general approves the bonds under Section 45.005 or 53.40 of this
51+ code or Section 1232.1031, Government Code, as applicable.
52+ SECTION 4. Section 45.063, Education Code, is amended to
53+ read as follows:
54+ Sec. 45.063. RULES. The board may adopt rules necessary for
55+ the administration of the bond guarantee program, including rules
56+ modifying requirements imposed under this subchapter as necessary
57+ to facilitate the guarantee of bonds issued by the authority. The
58+ rules must provide for the application of Sections 45.058, 45.059,
59+ 45.060, 45.061, and 45.062 to a default in the payment of bonds
60+ issued by the authority and guaranteed under this subchapter in a
61+ manner that provides for the withholding of state aid under Section
62+ 45.061 that would otherwise be paid to the school district on whose
63+ behalf the authority issued its bonds.
64+ SECTION 5. Subchapter E, Chapter 45, Education Code, is
65+ amended by adding Section 45.114 to read as follows:
2066 Sec. 45.114. ASSISTANCE FROM TEXAS PUBLIC FINANCE
21- AUTHORITY. A school district may:
67+ AUTHORITY. (a) A school district may:
2268 (1) borrow money from the Texas Public Finance
2369 Authority made available in accordance with Section 1232.1031,
24- Government Code;
70+ Government Code; and
2571 (2) as necessary in connection with obtaining loans or
2672 other financial assistance from the Texas Public Finance Authority
2773 in accordance with Section 1232.1031, Government Code:
2874 (A) issue bonds and notes, provided that the term
2975 of an obligation issued for this purpose may not exceed 15 years;
3076 and
3177 (B) enter into loan agreements, lease
3278 agreements, lease purchase agreements, or other appropriate
33- financing agreements with the Texas Public Finance Authority;
34- (3) make payments on an obligation or agreement issued
35- or executed under this section using any available funds, including
36- maintenance and operations tax revenue; and
37- (4) secure the payment of an obligation or agreement
38- issued or executed under this section through:
79+ financing agreements with the Texas Public Finance Authority.
80+ (b) A school district may:
81+ (1) make payments on an obligation or agreement issued
82+ or executed under Subsection (a) using any available funds,
83+ including maintenance and operations tax revenue; and
84+ (2) secure the payment of an obligation or agreement
85+ issued or executed under Subsection (a) through:
3986 (A) creating a lien against equipment obtained
40- using the proceeds of the obligation;
41- (B) creating a lien against and pledging any
42- funds of the district available for that purpose, including
43- maintenance and operations tax revenue; or
44- (C) obtaining credit enhancement under
45- Subchapter I.
46- Sec. 45.115. PAYMENT PROTECTIONS FOR TEXAS PUBLIC FINANCE
47- AUTHORITY. (a) In this section, "obligation" means an obligation
48- issued by the Texas Public Finance Authority under Section
49- 1232.1031, Government Code, for the benefit of a school district.
50- (b) Immediately following a determination that a school
51- district will be or is unable to pay maturing or matured principal
52- or interest on an obligation, but not later than the fifth day
53- before maturity date, the district shall notify the commissioner.
54- (c) Immediately following receipt of notice from a school
55- district under Subsection (b), the commissioner shall instruct the
56- comptroller to transfer to the Texas Public Finance Authority from
57- the next payment of state money payable to the district from
58- appropriations to the Foundation School Program the amount
59- necessary to pay the maturing or matured principal or interest.
60- (d) Immediately following receipt of the funds for payment
61- of the principal or interest, the Texas Public Finance Authority
62- shall forward the canceled obligation to the comptroller. The
63- comptroller shall hold the canceled obligation on behalf of the
64- Texas Public Finance Authority.
65- (e) Following full reimbursement to the Texas Public
66- Finance Authority with interest, the comptroller shall cancel the
67- obligation and forward it to the school district.
68- (f) If a school district fails to pay principal or interest
69- on an obligation at maturity, other obligations not yet mature are
70- not accelerated and are not due by virtue of the district's default.
71- (g) If a total of two or more payments are made using state
72- money otherwise payable to a school district from appropriations to
73- the Foundation School Program and the commissioner determines that
74- the district is acting in bad faith, the commissioner may request
75- the attorney general to institute appropriate legal action to
76- compel the district and the district's officers, agents, and
77- employees to comply with the duties required by law in regard to the
78- appropriate obligations. Jurisdiction of proceedings under this
79- subsection is in district court in Travis County.
80- (h) The Texas Public Finance Authority and the agency may
81- enter into a memorandum of understanding governing the duties of
82- the authority and the agency under this section, Section 45.114,
83- and Section 1232.1031, Government Code.
84- (i) The Texas Public Finance Authority may adopt rules
85- necessary for the administration of obligations issued on behalf of
86- school districts.
87- SECTION 2. Section 45.252, Education Code, is amended by
88- adding Subsection (a-1) to read as follows:
89- (a-1) A school district may apply for credit enhancement
90- under this subchapter of obligations issued under Section 45.114.
91- SECTION 3. Subchapter C, Chapter 1232, Government Code, is
87+ using the proceeds of the obligation; or
88+ (B) imposing an ad valorem maintenance tax
89+ otherwise authorized by law.
90+ (c) A school district that secures payment of an obligation
91+ or agreement issued or executed under Subsection (a) through
92+ imposing an ad valorem maintenance tax must include the obligation
93+ or agreement in the district's total maintenance tax debt service
94+ when submitting public securities for review to the attorney
95+ general under Chapter 1202, Government Code.
96+ SECTION 6. Subchapter C, Chapter 1232, Government Code, is
9297 amended by adding Section 1232.1031 to read as follows:
93- Sec. 1232.1031. ISSUANCE OF OBLIGATIONS TO ASSIST CERTAIN
94- SCHOOL DISTRICTS. (a) The authority may issue and sell obligations
95- to finance:
96- (1) loans to school districts for eligible purposes;
98+ Sec. 1232.1031. ISSUANCE OF OBLIGATIONS TO ASSIST SCHOOL
99+ DISTRICTS. (a) The authority may issue and sell obligations to
100+ finance:
101+ (1) loans to eligible school districts for eligible
102+ purposes;
97103 (2) the purchase by the authority of vehicles,
98104 equipment, or appliances for sale, lease, or lease purchase to
99- school districts;
105+ eligible school districts;
100106 (3) a lease or other agreement that concerns equipment
101- that a school district has purchased or leased or intends to
102- purchase or lease; and
103- (4) costs associated with maintenance, repair,
107+ that an eligible school district has purchased or leased or intends
108+ to purchase or lease; and
109+ (4) costs associated with improvement of existing
110+ instructional facilities, limited to the maintenance, repair,
104111 rehabilitation, or renovation of eligible school district
105112 facilities.
106- (b) The amount of obligations issued by the authority under
107- this section must be for the benefit of school districts with an
108- average daily attendance of 1,600 students or fewer, as determined
109- under Section 42.005, Education Code. Not more than two percent of
110- the obligations issued under this section may be for the benefit of
111- a single school district.
112- (c) The authority may use proceeds of obligations issued
113+ (b) The authority may use proceeds of obligations issued
113114 under this section to pay costs of administering this section,
114115 including costs of issuing obligations.
116+ (c) Vehicles, equipment, and appliances are considered
117+ furnishings of instructional facilities for purposes of Section
118+ 5(d), Article VII, Texas Constitution.
115119 (d) In connection with a purchase or project financed with
116120 the proceeds of obligations issued under this section, the
117121 authority may:
118122 (1) enter into loan agreements, lease agreements,
119123 lease purchase agreements, or other appropriate financing
120- agreements with school districts;
121- (2) purchase obligations issued by school districts;
122- and
124+ agreements with eligible school districts;
125+ (2) purchase obligations issued by eligible school
126+ districts; and
123127 (3) enter into credit agreements and exercise other
124128 powers granted to issuers under Chapter 1371.
125129 (e) The authority may secure payment of authority
126- obligations issued under this section with the pledge of money in
127- the school district equipment and improvement fund established
130+ obligations issued under this section only with the pledge of money
131+ in the school district equipment and improvement fund established
128132 under Subsection (f).
129133 (f) The school district equipment and improvement fund is
130134 established outside the treasury as a trust fund and is
131135 administered by the comptroller on behalf of the authority as
132136 directed or agreed to by the board. The fund consists of proceeds
133137 of obligations issued by the authority under this section and
134138 obligations and agreements issued or executed by school districts
135139 and purchased or funded by the authority with proceeds of authority
136140 obligations. Money in the fund may be spent without appropriation
137141 and may be used only to fund activities under this section or to
138142 secure repayment of authority obligations. Interest and income
139143 from the assets of the fund shall be credited to and deposited in
140144 the fund.
141145 (g) The board may establish funds and accounts determined to
142146 be necessary or appropriate in connection with the activities of
143147 the authority under this section.
144148 (h) The aggregate amount of obligations issued by the
145- authority under this section outstanding at one time may not exceed
146- $100 million.
149+ authority under this section may not exceed $100 million. An
150+ issuance of obligations to refund outstanding obligations is not
151+ included in determining the maximum aggregate amount under this
152+ subsection if the principal amount of the refunding obligations
153+ does not exceed the principal amount of the refunded obligations.
154+ If the principal amount of the refunding obligations exceeds the
155+ principal amount of the refunded obligations, the excess amount of
156+ the refunding obligations is included in determining the maximum
157+ aggregate amount.
147158 (i) The board shall adopt rules necessary to implement this
148- section, including rules prescribing requirements for school
149- districts seeking assistance under this section, rules identifying
150- eligible purposes for purposes of Subsection (a)(1), and rules
151- identifying eligible school district facilities for purposes of
152- Subsection (a)(4). Before adopting or modifying a rule under this
153- subsection, the board shall consult with the commissioner of
154- education.
159+ section, including rules prescribing eligibility requirements for
160+ school districts seeking assistance under this section, rules
161+ identifying eligible purposes for purposes of Subsection (a)(1),
162+ and rules identifying eligible school district facilities for
163+ purposes of Subsection (a)(4). Before adopting or modifying a rule
164+ under this subsection, the board shall consult with the
165+ commissioner of education.
155166 (j) Rules adopted under Subsection (i) may establish a
156167 process under which a school district must obtain approval by the
157- commissioner of education before the district may receive
158- assistance under this section.
168+ commissioner of education in order to be eligible for assistance
169+ under this section.
159170 (k) The authority may not issue an obligation under this
160171 section on or after September 1, 2023. The prohibition imposed by
161172 this subsection does not apply to:
162173 (1) refunding bonds issued by the authority in
163174 accordance with Chapter 1207; or
164175 (2) other obligations issued by the authority to
165176 refinance obligations incurred under this section before September
166177 1, 2023.
167- SECTION 4. This Act takes effect immediately if it receives
168- a vote of two-thirds of all the members elected to each house, as
169- provided by Section 39, Article III, Texas Constitution. If this
170- Act does not receive the vote necessary for immediate effect, this
171- Act takes effect on the 91st day after the last day of the
172- legislative session.
173- * * * * *
178+ (l) An obligation issued under this section is not a debt of
179+ the state or any state agency, political corporation, or political
180+ subdivision of the state and is not a pledge of the faith and credit
181+ of any of those entities. The obligation may only be payable from
182+ all or part of the amounts on deposit in the school district
183+ equipment and improvement fund established under Subsection (f).
184+ (m) An obligation issued under this section must contain on
185+ the obligation's face a statement to the effect that:
186+ (1) neither the state nor a state agency, political
187+ corporation, or political subdivision of the state is obligated to
188+ pay the principal of or interest on the obligation except as
189+ provided by this section; and
190+ (2) neither the faith and credit nor the taxing power
191+ of the state or any state agency, political corporation, or
192+ political subdivision of the state is pledged to the payment of the
193+ principal of or interest on the obligation.
194+ (n) The authority may not issue an obligation under this
195+ section until the Bond Review Board has approved the issuance under
196+ Chapter 1231.
197+ (o) In submitting an obligation for review under Chapter
198+ 1202 or 1371, as applicable, the authority shall demonstrate to the
199+ attorney general the ability of the eligible school district to
200+ repay the loan or other financing agreement executed with the
201+ authority.
202+ SECTION 7. This Act takes effect September 1, 2019.