Texas 2021 - 87th Regular

Texas House Bill HB586 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1	1		87R3184 CAE-D
2		-	By: Cole~~, VanDeaver, Israel, et al.~~ H.B. No. 586
	2	+	By: Cole H.B. No. 586
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. Section 45.051, Education Code, is amended to
13	13		read as follows:
14	14		Sec. 45.051. DEFINITIONS. In this subchapter:
15	15		(1) "Authority" means the Texas Public Finance
16	16		Authority.
17	17		(2) "Board" means the State Board of Education.
18	18		(3) [(1-a)] "Charter district" means an
19	19		open-enrollment charter school designated as a charter district
20	20		under Section 12.135.
21	21		(4) [(2)] "Paying agent" means the financial
22	22		institution that is designated by a school district, a [or] charter
23	23		district, or the authority as its agent for the payment of the
24	24		principal of and interest on guaranteed bonds.
25	25		SECTION 2. Section 45.052, Education Code, is amended to
26	26		read as follows:
27	27		Sec. 45.052. GUARANTEE. (a) On approval by the
28	28		commissioner, bonds issued under Subchapter A by a school district,
29	29		[or] Chapter 53 for a charter district, or Section 1232.1031,
30	30		Government Code, by the authority, including refunding and
31	31		refinanced bonds, are guaranteed by the corpus and income of the
32	32		permanent school fund.
33	33		(b) Notwithstanding any amendment of this subchapter or
34	34		other law, the guarantee under this subchapter of school district,
35	35		[or] charter district, or authority bonds remains in effect until
36	36		the date those bonds mature or are defeased in accordance with state
37	37		law.
38	38		(c) In seeking the guarantee of bonds under this subchapter,
39	39		the authority is subject to each provision of this subchapter that
40	40		applies to a school district seeking guarantee of school district
41	41		bonds, except as provided by board rules adopted under Section
42	42		45.063.
43	43		(d) A reference in this subchapter to bonds issued by the
44	44		authority includes short-term debt obligations and any other
45	45		obligations the authority is authorized to issue under Section
46	46		1232.1031, Government Code.
47	47		SECTION 3. Section 45.057(b), Education Code, is amended to
48	48		read as follows:
49	49		(b) The guarantee is not effective unless the attorney
50	50		general approves the bonds under Section 45.005 or 53.40 of this
51	51		code or Section 1232.1031, Government Code, as applicable.
52	52		SECTION 4. Section 45.063, Education Code, is amended to
53	53		read as follows:
54	54		Sec. 45.063. RULES. The board may adopt rules necessary for
55	55		the administration of the bond guarantee program, including rules
56	56		modifying requirements imposed under this subchapter as necessary
57	57		to facilitate the guarantee of bonds issued by the authority. The
58	58		rules must provide for the application of Sections 45.058, 45.059,
59	59		45.060, 45.061, and 45.062 to a default in the payment of bonds
60	60		issued by the authority and guaranteed under this subchapter in a
61	61		manner that provides for the withholding of state aid under Section
62	62		45.061 that would otherwise be paid to the school district on whose
63	63		behalf the authority issued its bonds.
64	64		SECTION 5. Subchapter E, Chapter 45, Education Code, is
65	65		amended by adding Section 45.114 to read as follows:
66	66		Sec. 45.114. ASSISTANCE FROM TEXAS PUBLIC FINANCE
67	67		AUTHORITY. (a) A school district may:
68	68		(1) borrow money from the Texas Public Finance
69	69		Authority made available in accordance with Section 1232.1031,
70	70		Government Code; and
71	71		(2) as necessary in connection with obtaining loans or
72	72		other financial assistance from the Texas Public Finance Authority
73	73		in accordance with Section 1232.1031, Government Code:
74	74		(A) issue bonds and notes, provided that the term
75	75		of an obligation issued for this purpose may not exceed 15 years;
76	76		and
77	77		(B) enter into loan agreements, lease
78	78		agreements, lease purchase agreements, or other appropriate
79	79		financing agreements with the Texas Public Finance Authority.
80	80		(b) A school district may:
81	81		(1) make payments on an obligation or agreement issued
82	82		or executed under Subsection (a) using any available funds,
83	83		including maintenance and operations tax revenue; and
84	84		(2) secure the payment of an obligation or agreement
85	85		issued or executed under Subsection (a) through:
86	86		(A) creating a lien against equipment obtained
87	87		using the proceeds of the obligation; or
88	88		(B) imposing an ad valorem maintenance tax
89	89		otherwise authorized by law.
90	90		(c) A school district that secures payment of an obligation
91	91		or agreement issued or executed under Subsection (a) through
92	92		imposing an ad valorem maintenance tax must include the obligation
93	93		or agreement in the district's total maintenance tax debt service
94	94		when submitting public securities for review to the attorney
95	95		general under Chapter 1202, Government Code.
96	96		SECTION 6. Subchapter C, Chapter 1232, Government Code, is
97	97		amended by adding Section 1232.1031 to read as follows:
98	98		Sec. 1232.1031. ISSUANCE OF OBLIGATIONS TO ASSIST SCHOOL
99	99		DISTRICTS. (a) The authority may issue and sell obligations to
100	100		finance:
101	101		(1) loans to eligible school districts for eligible
102	102		purposes;
103	103		(2) the purchase by the authority of vehicles,
104	104		equipment, or appliances for sale, lease, or lease purchase to
105	105		eligible school districts;
106	106		(3) a lease or other agreement that concerns equipment
107	107		that an eligible school district has purchased or leased or intends
108	108		to purchase or lease; and
109	109		(4) costs associated with improvement of existing
110	110		instructional facilities, limited to the maintenance, repair,
111	111		rehabilitation, or renovation of eligible school district
112	112		facilities.
113	113		(b) The authority may use proceeds of obligations issued
114	114		under this section to pay costs of administering this section,
115	115		including costs of issuing obligations.
116	116		(c) Vehicles, equipment, and appliances are considered
117	117		furnishings of instructional facilities for purposes of Section
118	118		5(d), Article VII, Texas Constitution.
119	119		(d) In connection with a purchase or project financed with
120	120		the proceeds of obligations issued under this section, the
121	121		authority may:
122	122		(1) enter into loan agreements, lease agreements,
123	123		lease purchase agreements, or other appropriate financing
124	124		agreements with eligible school districts;
125	125		(2) purchase obligations issued by eligible school
126	126		districts; and
127	127		(3) enter into credit agreements and exercise other
128	128		powers granted to issuers under Chapter 1371.
129	129		(e) The authority may secure payment of authority
130	130		obligations issued under this section only with the pledge of money
131	131		in the school district equipment and improvement fund established
132	132		under Subsection (f).
133	133		(f) The school district equipment and improvement fund is
134	134		established outside the treasury as a trust fund and is
135	135		administered by the comptroller on behalf of the authority as
136	136		directed or agreed to by the board. The fund consists of proceeds
137	137		of obligations issued by the authority under this section and
138	138		obligations and agreements issued or executed by school districts
139	139		and purchased or funded by the authority with proceeds of authority
140	140		obligations. Money in the fund may be spent without appropriation
141	141		and may be used only to fund activities under this section or to
142	142		secure repayment of authority obligations. Interest and income
143	143		from the assets of the fund shall be credited to and deposited in
144	144		the fund.
145	145		(g) The board may establish funds and accounts determined to
146	146		be necessary or appropriate in connection with the activities of
147	147		the authority under this section.
148	148		(h) The aggregate amount of obligations issued by the
149	149		authority under this section may not exceed $100 million. An
150	150		issuance of obligations to refund outstanding obligations is not
151	151		included in determining the maximum aggregate amount under this
152	152		subsection if the principal amount of the refunding obligations
153	153		does not exceed the principal amount of the refunded obligations.
154	154		If the principal amount of the refunding obligations exceeds the
155	155		principal amount of the refunded obligations, the excess amount of
156	156		the refunding obligations is included in determining the maximum
157	157		aggregate amount.
158	158		(i) The board shall adopt rules necessary to implement this
159	159		section, including rules prescribing eligibility requirements for
160	160		school districts seeking assistance under this section, rules
161	161		identifying eligible purposes for purposes of Subsection (a)(1),
162	162		and rules identifying eligible school district facilities for
163	163		purposes of Subsection (a)(4). Before adopting or modifying a rule
164	164		under this subsection, the board shall consult with the
165	165		commissioner of education.
166	166		(j) Rules adopted under Subsection (i) may establish a
167	167		process under which a school district must obtain approval by the
168	168		commissioner of education in order to be eligible for assistance
169	169		under this section.
170	170		(k) The authority may not issue an obligation under this
171	171		section on or after September 1, 2025. The prohibition imposed by
172	172		this subsection does not apply to:
173	173		(1) refunding bonds issued by the authority in
174	174		accordance with Chapter 1207; or
175	175		(2) other obligations issued by the authority to
176	176		refinance obligations incurred under this section before September
177	177		1, 2025.
178	178		(l) An obligation issued under this section is not a debt of
179	179		the state or any state agency, political corporation, or political
180	180		subdivision of the state and is not a pledge of the faith and credit
181	181		of any of those entities. The obligation may only be payable from
182	182		all or part of the amounts on deposit in the school district
183	183		equipment and improvement fund established under Subsection (f).
184	184		(m) An obligation issued under this section must contain on
185	185		the obligation's face a statement to the effect that:
186	186		(1) neither the state nor a state agency, political
187	187		corporation, or political subdivision of the state is obligated to
188	188		pay the principal of or interest on the obligation except as
189	189		provided by this section; and
190	190		(2) neither the faith and credit nor the taxing power
191	191		of the state or any state agency, political corporation, or
192	192		political subdivision of the state is pledged to the payment of the
193	193		principal of or interest on the obligation.
194	194		(n) The authority may not issue an obligation under this
195	195		section until the Bond Review Board has approved the issuance under
196	196		Chapter 1231.
197	197		(o) In submitting an obligation for review under Chapter
198	198		1202 or 1371, as applicable, the authority shall demonstrate to the
199	199		attorney general the ability of the eligible school district to
200	200		repay the loan or other financing agreement executed with the
201	201		authority.
202	202		SECTION 7. This Act takes effect September 1, 2021.