73R8444 ESH-D By Bivins S.B. No. 131 Substitute the following for S.B. No. 131: By Ogden C.S.S.B. No. 131 A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to assistance to school districts in the acquisition, 1-3 construction, renovation, or improvement of instructional 1-4 facilities. 1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-6 SECTION 1. Chapter 20, Education Code, is amended by adding 1-7 Subchapter H to read as follows: 1-8 SUBCHAPTER H. SCHOOL FACILITIES EQUALIZATION PROGRAM 1-9 Sec. 20.961. DEFINITIONS. In this subchapter: 1-10 (1) "Agency" means the Central Education Agency. 1-11 (2) "Authority" means the Texas Public Finance 1-12 Authority. 1-13 (3) "Instructional facility" means real property, an 1-14 improvement to real property, or a necessary fixture of an 1-15 improvement to real property that is used predominantly for 1-16 teaching the curriculum required under Section 21.101 of this code. 1-17 (4) "School district" means any public school district 1-18 in this state. 1-19 (5) "Wealth per student" means the taxable property 1-20 values reported by the comptroller to the commissioner of education 1-21 under Section 11.86 of this code divided by the number of students 1-22 in average daily attendance as determined under Section 16.006 of 1-23 this code. 1-24 Sec. 20.962. SCHOOL FACILITIES EQUALIZATION PROGRAM; BONDS. 2-1 (a) The agency shall administer the school facilities equalization 2-2 program. 2-3 (b) The authority shall issue general obligation bonds in 2-4 the amount of $750 million to finance the program. 2-5 (c) In connection with the issuance and administration of 2-6 bonds, the authority may exercise the rights and powers granted to 2-7 an issuer by: 2-8 (1) Chapter 503, Acts of the 54th Legislature, 1955 2-9 (Article 717k, Vernon's Texas Civil Statutes); and 2-10 (2) the Bond Procedures Act of 1981 (Article 717k-6, 2-11 Vernon's Texas Civil Statutes). 2-12 Sec. 20.963. FUND. (a) The school facilities equalization 2-13 fund is in the state treasury. The fund shall be administered by 2-14 the state treasurer as directed by the agency. The state treasurer 2-15 may create accounts in the fund as the agency considers necessary. 2-16 (b) The authority or the state treasurer shall deposit in 2-17 the fund: 2-18 (1) the proceeds of all bonds sold under this 2-19 subchapter, less the costs of issuance; 2-20 (2) any federal or private funds received and 2-21 designated for assisting school districts in acquiring, 2-22 constructing, renovating, or improving instructional facilities; 2-23 (3) any investment securities purchased by the fund; 2-24 (4) interest or other earnings derived from the 2-25 amounts described in Subdivisions (1)-(3) of this subsection; and 2-26 (5) any amounts transferred for deposit into the fund. 2-27 (c) Except as provided by Subsection (e) of this section, 3-1 money in the fund may be used only to: 3-2 (1) provide to eligible school districts a state share 3-3 for the acquisition, construction, renovation, or improvement of 3-4 instructional facilities; and 3-5 (2) administer the school facilities equalization 3-6 program. 3-7 (d) The cost of administering the school facilities 3-8 equalization program in a fiscal biennium may not exceed 0.1 3-9 percent of the amount of bonds issued under this subchapter in that 3-10 biennium. 3-11 (e) The agency may use interest or other earnings derived 3-12 from the amounts described in Subsections (b)(1)-(3) of this 3-13 section for payment of inspections performed under Section 20.971 3-14 of this code. 3-15 Sec. 20.964. SCHOOL DISTRICT ELIGIBILITY. A school district 3-16 is eligible under the school facilities equalization program if the 3-17 district: 3-18 (1) has a wealth per student that is less than the 3-19 statewide average wealth per student; and 3-20 (2) has an effective public school tax rate of at 3-21 least $1.16 for the 1992-1993 school year. 3-22 Sec. 20.965. APPLICATION. (a) An eligible school district 3-23 must submit a single application for the approval of a state share 3-24 of the district's most urgently needed school facilities project in 3-25 a category listed in Section 20.966(a) of this code for which a 3-26 construction contract has not been awarded as of the effective date 3-27 of this section. An application must: 4-1 (1) specify the category listed in Section 20.966(a) 4-2 of this code in which the project belongs; 4-3 (2) state the amount of the state share requested; 4-4 (3) be filed by the date specified by the agency; and 4-5 (4) contain any other information required by the 4-6 agency. 4-7 (b) Based on the applications, the agency shall rank each 4-8 project in order of priority. The agency shall rank each category 4-9 of projects listed in Section 20.966(a) of this code separately. 4-10 The rankings must be based on a 180-point scale as follows: 4-11 (1) the degree of need accounts for a maximum of 60 4-12 points; 4-13 (2) the adequacy of the proposed project to meet the 4-14 need accounts for a maximum of 60 points; and 4-15 (3) the cost-effectiveness of the proposal in relation 4-16 to other available alternatives accounts for a maximum of 60 4-17 points. 4-18 (c) The agency shall adopt objective standards for awarding 4-19 points under Subsection (b) of this section. 4-20 (d) To be eligible for a state share, a project must meet 4-21 the standards established under Section 16.402 of this code and 4-22 must score at least 120 points under Subsection (b) of this 4-23 section. The project with the highest score is entitled to first 4-24 priority. If two or more projects in a category have the same 4-25 score, the agency shall rank the projects using a random drawing. 4-26 Sec. 20.966. ALLOCATION OF BOND PROCEEDS. (a) Proceeds of 4-27 bonds issued under Section 20.962 of this code are allocated as 5-1 follows: 5-2 (1) $150 million for assisting school districts in 5-3 renovating or repairing existing instructional facilities that 5-4 violate applicable health and safety standards; 5-5 (2) $150 million for assisting school districts in 5-6 renovating or repairing existing instructional facilities that do 5-7 not violate applicable health and safety standards but are not 5-8 adequate; 5-9 (3) $250 million for assisting school districts in 5-10 constructing new instructional facilities to relieve existing 5-11 overcrowding; and 5-12 (4) $200 million for assisting school districts in 5-13 constructing new instructional facilities in anticipation of growth 5-14 in the near future. 5-15 (b) After the agency has approved a state share for each 5-16 eligible project in a category under Subsection (a)(3) or (4) of 5-17 this section, the agency shall reallocate any remaining bond 5-18 proceeds in the category to the category under Subsection (a)(1) of 5-19 this section to the extent necessary to approve state shares for 5-20 projects meeting the minimum requirements of Section 20.965(d) of 5-21 this code in that category that have not been funded. 5-22 (c) After the agency has made the reallocation required by 5-23 Subsection (b) of this section, the agency shall reallocate any 5-24 remaining bond proceeds allocated to a category under Subsection 5-25 (a)(3) or (4) of this section to the category under Subsection 5-26 (a)(2) of this section to the extent necessary to approve state 5-27 shares for projects meeting the minimum requirements of Section 6-1 20.965(d) of this code in that category that have not been funded. 6-2 (d) If any bond proceeds remain available after the agency 6-3 has made the reallocation required by Subsection (c) of this 6-4 section, the agency may: 6-5 (1) notify each school district that additional funds 6-6 are available under the facilities grant program; and 6-7 (2) approve state shares for projects in the 6-8 categories listed in Subsection (a) of this section. 6-9 (e) Notwithstanding any other provision of this section, the 6-10 agency may transfer from one category under Subsection (a) of this 6-11 section to another an amount not to exceed 35 percent of the amount 6-12 allocated under Subsection (a) of this section to the category from 6-13 which the transfer is made. 6-14 Sec. 20.967. APPROVAL OF STATE SHARE; AMOUNT. (a) The 6-15 agency shall approve a state share for each eligible project based 6-16 on the ranking of eligible projects under Section 20.965 of this 6-17 code. Except as provided by Section 20.966(b), (c), (d), or (e) of 6-18 this code, the agency may not approve a state share that exceeds 6-19 the balance of the amount available in that category listed in 6-20 Section 20.966(a) of this code. 6-21 (b) A state share for a project under this subchapter may 6-22 not exceed the lesser of: 6-23 (1) $9 million; 6-24 (2) an amount equal to $2,000 multiplied by the school 6-25 district's average daily attendance in the previous school year; or 6-26 (3) 80 percent of the total cost of the project. 6-27 (c) Subject to Subsection (b) of this section, the amount of 7-1 a state share is determined by the following formula: 7-2 where: 7-3 "SS" is the amount of the state share; 7-4 "W" is the school district's wealth per student; and 7-5 "P" is the total cost of the project. 7-6 (d) For purposes of Article VII, Section 5, of the Texas 7-7 Constitution, the state's share under this subchapter is a loan to 7-8 the school district. Except as provided by Section 20.970(b) or 7-9 (c) of this code, the state forgives the payment of principal and 7-10 interest on a loan under this subchapter. 7-11 Sec. 20.968. JOINT APPLICATION. (a) Two eligible school 7-12 districts may apply jointly for assistance under this subchapter 7-13 for a project to be used by both districts. 7-14 (b) A state share for a project under this subchapter for 7-15 school districts applying jointly may not exceed the lesser of: 7-16 (1) $9 million; 7-17 (2) an amount equal to $2,000 multiplied by the school 7-18 districts' combined average daily attendance in the previous school 7-19 year; or 7-20 (3) 80 percent of the total cost of the project. 7-21 (c) The amount of a state share for a project under this 7-22 subchapter for school districts applying jointly is determined by 7-23 the formula provided by Section 20.967(c) of this code, except that 7-24 "W" is computed by dividing the taxable values of property 7-25 determined under Section 11.86 of this code in both districts by 7-26 the number of students in regular average daily attendance in both 7-27 districts. 8-1 (d) Each district applying jointly for assistance under this 8-2 subchapter must comply with this subchapter and is liable for the 8-3 full amount of state funds provided under this subchapter as 8-4 provided by Section 20.970 of this code. 8-5 Sec. 20.969. PAYMENT. Before the agency may disburse a 8-6 state share under this subchapter, the school district must 8-7 demonstrate to the agency's satisfaction that the district is 8-8 capable of paying the district's share of the cost of the project 8-9 by demonstrating that: 8-10 (1) the district has obtained voter approval of the 8-11 issuance of bonds sufficient to pay the district's share of the 8-12 project, without regard to whether the bonds were approved for a 8-13 project other than that for which the state share was approved; or 8-14 (2) the district has or will have cash reserves 8-15 sufficient to pay the district's share of the cost of the project. 8-16 Sec. 20.970. USE OF FUNDS. (a) A school district that 8-17 receives state funds under this subchapter may use the funds only 8-18 for the acquisition, construction, renovation, or improvement of 8-19 the instructional facility for which the state share was approved. 8-20 (b) A school district must refund to the agency any portion 8-21 of state funds provided under this subchapter that are not used as 8-22 required by Subsection (a) of this section before the second 8-23 anniversary of the date the state share was approved. On 8-24 application of the district, the agency may grant the district an 8-25 additional year in which to complete the project. 8-26 (c) The commissioner of education shall deduct from 8-27 foundation school fund payments to a district any amount of state 9-1 funds provided under this subchapter that the commissioner finds 9-2 the district has used for a purpose other than the acquisition, 9-3 construction, renovation, or improvement of the instructional 9-4 facility for which the state share was approved. 9-5 Sec. 20.971. INSPECTION FOLLOWING COMPLETION OF PROJECT. A 9-6 school district shall notify the agency when a project financed 9-7 with a state share under this subchapter has been completed. The 9-8 agency shall inspect the project and verify that it has been 9-9 satisfactorily completed. 9-10 SECTION 2. The Public School Facilities Funding Act (Article 9-11 717t, Vernon's Texas Civil Statutes) is repealed. 9-12 SECTION 3. This Act takes effect only if the constitutional 9-13 amendment proposed by S.J.R. No. 4, 73rd Legislature, Regular 9-14 Session, 1993, is approved by the voters. If the proposed 9-15 amendment is not approved by the voters, this Act has no effect. 9-16 SECTION 4. The importance of this legislation and the 9-17 crowded condition of the calendars in both houses create an 9-18 emergency and an imperative public necessity that the 9-19 constitutional rule requiring bills to be read on three several 9-20 days in each house be suspended, and this rule is hereby suspended, 9-21 and that this Act take effect and be in force according to its 9-22 terms, and it is so enacted.