By Turner of Harris H.B. No. 2095
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 authorizing revenue bonds issued by Regional Education Service
1-3 Centers to be guaranteed by the Permanent School Fund.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Texas Education Code, Section 20.901 is amended
1-6 to read as follows:
1-7 "Sec. 20.901. Definitions. In this subchapter:
1-8 (1) "Board" means the State Board of Education.
1-9 (2) "Commissioner" means the commissioner of
1-10 education.
1-11 (3) "Fund" means the permanent school fund.
1-12 (4) "Paying agent" means the financial institution
1-13 that is designated by a school district as its agent for the
1-14 payment of the principal of and interest on guaranteed bonds.
1-15 (5) "Center" means a Regional Education Service Center
1-16 established under the provisions of Texas Education Code, Section
1-17 11.32."
1-18 SECTION 2. Texas Education Code, Section 20.904 is amended
1-19 to read as follows:
1-20 "Sec. 20.904. Eligibility. To be eligible for approval by
1-21 the commissioner, bonds must be issued under Subchapter A of this
1-22 chapter or under Chapter 503, Acts of the 54th Legislature, 1955
1-23 (Article 717k, Vernon's Texas Civil Statutes), by an accredited
2-1 school district, or must be issued under Texas Education Code,
2-2 Section 11.331 by a center."
2-3 SECTION 3. Texas Education Code, Section 20.905 is amended
2-4 to read as follows:
2-5 Sec. 20.905. Application for Guarantee. (a) A school
2-6 district or center seeking the guarantee of eligible bonds shall
2-7 apply to the commissioner.
2-8 (b) The application must include:
2-9 (1) the name of the school district or center and the
2-10 principal amount of the bonds to be issued;
2-11 (2) the name and address of the <district's> district
2-12 or center's paying agent for those bonds; and
2-13 (3) the maturity schedule, estimated interest rate,
2-14 and date of the bonds.
2-15 (c) The application must be accompanied by a fee set by rule
2-16 of the board in an amount designed to cover the costs of
2-17 administering the guarantee program.
2-18 SECTION 4. Texas Education Code, Section 20.906 is amended
2-19 to read as follows:
2-20 Sec. 20.906. Investigation. (a) Following receipt of an
2-21 application for the guarantee of bonds, the commissioner shall
2-22 conduct an investigation of the applicant <school district> in
2-23 regard to:
2-24 (1) the district's accreditation in the case of an
2-25 applicant school district; and
3-1 (2) the total amount of outstanding guaranteed bonds.
3-2 (b) If following the investigation the commissioner is
3-3 satisfied that the school <district's> district or center's bonds
3-4 should be guaranteed under this subchapter, the commissioner shall
3-5 endorse the bonds.
3-6 SECTION 5. Texas Education Code, Section 20.908 is amended
3-7 to read as follows:
3-8 Sec. 20.908. Notice of Default. Immediately following a
3-9 determination that a school district or center will be or is unable
3-10 to pay maturing or matured principal or interest on a guaranteed
3-11 bond, but not later than the fifth day before maturity date, the
3-12 school district or center shall notify the commissioner.
3-13 SECTION 6. Texas Education Code, Section 20.900 is amended
3-14 to read as follows:
3-15 Sec. 20.909. Payment From Permanent School Fund.
3-16 (a) Immediately following receipt of notice under Section 20.908
3-17 of this code, the commissioner shall cause to be transferred from
3-18 the appropriate account in the permanent school fund to the
3-19 <district's> district or center's paying agent the amount
3-20 necessary to pay the maturing or matured principal or interest.
3-21 (b) Immediately following receipt of the funds for payment
3-22 of the principal or interest, the paying agent shall pay the amount
3-23 due and forward the canceled bond or coupon to the State Treasurer.
3-24 The State Treasurer shall hold the canceled bond or coupon on
3-25 behalf of the fund.
4-1 (c) Following full reimbursement to the fund with interest,
4-2 the State Treasurer shall further cancel the bond or coupon and
4-3 forward it to the school district or center for which payment was
4-4 made.
4-5 SECTION 7. Texas Education Code, Section 20.910 is amended
4-6 to read as follows:
4-7 Sec. 20.910. Bonds Not Accelerated on Default. If a school
4-8 district or center fails to pay principal or interest on a
4-9 guaranteed bond when it matures, other amounts not yet mature are
4-10 not accelerated and do not become due by virtue of the school
4-11 <district's> district or center's default.
4-12 SECTION 8. Texas Education Code, Section 20.911 is amended
4-13 to read as follows:
4-14 Sec. 20.911. Reimbursement of Fund. (a) If the
4-15 commissioner orders payment from the fund on behalf of a school
4-16 district or center, he shall direct the comptroller of public
4-17 accounts to withhold the amount paid, plus interest, from the first
4-18 state money payable to the school district or center. The amount
4-19 withheld shall be deposited to the credit of the fund.
4-20 (b) In accordance with the rules of the board, the
4-21 commissioner may authorize reimbursement to the fund with interest
4-22 in a manner other than that provided by this section.
4-23 SECTION 9. Texas Education Code, Section 20.912 is amended
4-24 to read as follows:
4-25 Sec. 20.912. Repeated Defaults. (a) If two or more
5-1 payments from the fund are made on the guaranteed bonds of a school
5-2 district or center and the commissioner determines that the school
5-3 district or center is acting in bad faith under the guarantee, the
5-4 commissioner may request the attorney general to institute
5-5 appropriate legal action to compel the school district or center
5-6 and its officers, agents, and employees to comply with the duties
5-7 required of them by law in regard to the bonds.
5-8 (b) Jurisdiction of proceedings under this section is in
5-9 district court in Travis County.
5-10 SECTION 10. The importance of this legislation and the
5-11 crowded condition of the calendars in both houses create an
5-12 emergency and an imperative public necessity that the
5-13 Constitutional rule requiring bills to be read on three several
5-14 days in each house be suspended, and this rule is hereby suspended.