By: Hinojosa of Nueces S.B. No. 2842
A BILL TO BE ENTITLED
AN ACT
relating to prohibiting a school district from using interest and
sinking tax revenue to pay for deferred maintenance.
SECTION 1. Section 45.001, Education Code, is amended by
amending Subsection (a) to read as follows:
Sec. 45.001. BONDS AND BOND TAXES. (a) The governing board
of an independent school district, including the city council or
commission that has jurisdiction over a municipally controlled
independent school district, the governing board of a rural high
school district, and the commissioners court of a county, on behalf
of each common school district under its jurisdiction, may:
(1) issue bonds for:
(A) the construction, acquisition, and equipment
of school buildings in the district;
(B) the acquisition of property or the
refinancing of property financed under a contract entered under
Subchapter A, Chapter 271, Local Government Code, regardless of
whether payment obligations under the contract are due in the
current year or a future year;
(C) the purchase of the necessary sites for
school buildings;
(D) the purchase of new school buses;
(E) the retrofitting of school buses with
emergency, safety, or security equipment; and
(F) the purchase or retrofitting of vehicles to
be used for emergency, safety, or security purposes; and
(2) levy, pledge, assess, and collect annual ad
valorem taxes sufficient to pay the principal of and interest on the
bonds as or before the principal and interest become due, subject to
Section 45.003.
(b) The bonds must mature serially or otherwise not more
than 40 years from their date. The bonds may be made redeemable
before maturity.
(c) Bonds may be sold at public or private sale as
determined by the governing board of the district.
(d) Bonds may not be issued to pay for:
(1) any item or asset with less than a 10-year useful
life span; or
(2) the maintenance of school facilities including
preventive maintenance; replacement of parts, systems, or
components; and other activities needed to preserve or maintain the
asset.
SECTION 2. Section 45.0031, Education Code, is amended by
adding Subsection (a-1) to read as follows:
Sec. 45.0031. LIMITATION ON ISSUANCE OF TAX-SUPPORTED
BONDS. (a) Before issuing bonds described by Section 45.001, a
school district must demonstrate to the attorney general under
Subsection (b) or (c) that, with respect to the proposed issuance,
the district has a projected ability to pay the principal of and
interest on the proposed bonds and all previously issued bonds
other than bonds authorized to be issued at an election held on or
before April 1, 1991, and issued before September 1, 1992, from a
tax at a rate not to exceed $0.50 per $100 of valuation.
(a-1) In addition to Subsection (a), a school district must
demonstrate the bonds are not in violation of Section 45.001(d).
(b) A district may demonstrate the ability to comply with
Subsection (a) by using the most recent taxable value of property in
the district, combined with state assistance to which the district
is entitled under Chapter 46 or 48 that may be lawfully used for the
payment of bonds.
(c) A district may demonstrate the ability to comply with
Subsection (a) by using a projected future taxable value of
property in the district anticipated for the earlier of the tax year
five years after the current tax year or the tax year in which the
final payment is due for the bonds submitted to the attorney
general, combined with state assistance to which the district is
entitled under Chapter 46 or 48 that may be lawfully used for the
payment of bonds. The district must submit to the attorney general
a certification of the district's projected taxable value of
property that is prepared by a registered professional appraiser
certified under Chapter 1151, Occupations Code, who has
demonstrated professional experience in projecting taxable values
of property or who can by contract obtain any necessary assistance
from a person who has that experience. To demonstrate the
professional experience required by this subsection, a registered
professional appraiser must provide to the district written
documentation relating to two previous projects for which the
appraiser projected taxable values of property. Until the bonds
submitted to the attorney general are approved or disapproved, the
district must maintain the documentation and on request provide the
documentation to the attorney general or comptroller. The
certification of the district's projected taxable value of property
must be signed by the district's superintendent. The attorney
general must base a determination of whether the district has
complied with Subsection (a) on a taxable value of property that is
equal to 90 percent of the value certified under this subsection.
(d) A district that demonstrates to the attorney general
that the district's ability to comply with Subsection (a) is
contingent on receiving state assistance may not adopt a tax rate
for a year for purposes of paying the principal of and interest on
the bonds unless the district credits to the account of the interest
and sinking fund of the bonds the amount of state assistance equal
to the amount needed to demonstrate compliance and received or to be
received in that year.
(e) If a district demonstrates to the attorney general the
district's ability to comply with Subsection (a) using a projected
future taxable value of property under Subsection (c) and
subsequently imposes a tax to pay the principal of and interest on
bonds to which Subsection (a) applies at a rate that exceeds the
limit imposed by Subsection (a), the attorney general may not
approve a subsequent issuance of bonds unless the attorney general
finds that the district has a projected ability to pay the principal
of and interest on the proposed bonds and all previously issued
bonds to which Subsection (a) applies from a tax at a rate not to
exceed $0.45 per $100 of valuation.
SECTION 3. This Act takes effect September 1, 2025.