By: Bivins S.B. No. 131
72S40042 ESH-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to facilities equalization for public schools.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Chapter 20, Education Code, is amended by adding
1-5 Subchapter H to read as follows:
1-6 SUBCHAPTER H. SCHOOL FACILITIES EQUALIZATION PROGRAM
1-7 Sec. 20.961. DEFINITIONS. In this subchapter:
1-8 (1) "Agency" means the Central Education Agency.
1-9 (2) "Basic program" means the basic facilities
1-10 equalization program.
1-11 (3) "Facilities certificate" means a debt instrument
1-12 issued by a school district under Section 20.970 of this code.
1-13 (4) "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 (5) "Level of local participation" means the ratio
1-18 that the dollar amount of bonds issued under Section 20.968 of this
1-19 code or of cash provided by a school district under Section 20.969
1-20 of this code bears to the total dollar amount of bonds, cash, and
1-21 facilities certificates to be sold to finance a project, expressed
1-22 as a percentage.
1-23 (6) "Repayment period" means a four-year period for
1-24 which a school district's level of local participation has been
2-1 established as provided by Section 20.966 or 20.967 of this code.
2-2 (7) "School district" means any public school district
2-3 in this state.
2-4 (8) "Supplemental program" means the supplemental
2-5 facilities equalization program.
2-6 (9) "Wealth per student" means the taxable property
2-7 values reported by the comptroller to the commissioner of education
2-8 under Section 11.86 of this code divided by the number of students
2-9 in regular average daily attendance as determined under Section
2-10 16.006 of this code.
2-11 Sec. 20.962. PROJECTS FINANCED THROUGH BASIC FACILITIES
2-12 EQUALIZATION PROGRAM OR SUPPLEMENTAL FACILITIES EQUALIZATION
2-13 PROGRAM. (a) A project that is financed through the basic program
2-14 or the supplemental program is financed by:
2-15 (1) the issuance and sale of bonds as provided by
2-16 Section 20.968 of this code or the provision in cash of the school
2-17 district's level of local participation as provided by Section
2-18 20.969 of this code; and
2-19 (2) the issuance and sale to the state of facilities
2-20 certificates as provided by Section 20.970 of this code.
2-21 (b) The state may forgive the payment of principal and
2-22 interest on facilities certificates as provided by Section
2-23 20.971(c) of this code.
2-24 (c) The state may issue and sell bonds as provided by
2-25 Article 717w, Revised Statutes, to finance the state's share of the
2-26 basic program and the supplemental program.
2-27 (d) To be eligible for assistance through the basic program
3-1 or the supplemental program, a school district must submit an
3-2 application to the agency. A district may not apply for more than
3-3 $9 million in assistance under this subchapter in a state fiscal
3-4 biennium.
3-5 (e) The agency shall determine the costs that are eligible
3-6 for state assistance under this subchapter. Those costs:
3-7 (1) may include costs necessary for construction of
3-8 necessary technology infrastructure; and
3-9 (2) may not:
3-10 (A) exceed the cost index applicable to the
3-11 district under Subsection (g) of this section; or
3-12 (B) permit the district to construct a facility
3-13 that meets a standard higher than that required by the State Board
3-14 of Education under Section 16.402 of this code.
3-15 (f) A school district may not receive more than $9 million
3-16 in assistance under this subchapter in a state fiscal biennium.
3-17 (g) The agency shall adopt regional cost indexes for
3-18 acquisition of land and construction, renovation, and improvement
3-19 of instructional facilities for use in determining costs that are
3-20 eligible for state assistance.
3-21 Sec. 20.963. BASIC PROGRAM. (a) A school district may
3-22 finance an instructional facility through the basic program.
3-23 (b) A school district may apply for assistance through the
3-24 basic program if:
3-25 (1) the district has conducted a bond election as
3-26 provided by Section 20.974 of this code; and
3-27 (2) the voters have approved the issuance of bonds
4-1 sufficient to pay the entire cost of the project for which the
4-2 district is applying for assistance.
4-3 (c) The agency shall rank each school district to determine
4-4 the district's priority for participation in the basic program,
4-5 with the rankings determined as follows:
4-6 (1) a district's wealth per student in the preceding
4-7 year accounts for 80 percent of the district's ranking; and
4-8 (2) a district's average debt service tax rate in the
4-9 preceding three years accounts for 20 percent of the district's
4-10 ranking.
4-11 Sec. 20.964. SUPPLEMENTAL PROGRAM. (a) A school district
4-12 may finance an instructional facility through the supplemental
4-13 program.
4-14 (b) A school district may apply for assistance through the
4-15 supplemental program if:
4-16 (1) the district has conducted a bond election as
4-17 provided by Section 20.974 of this code; and
4-18 (2) the voters have approved the issuance of bonds
4-19 sufficient to pay the entire cost of the project for which the
4-20 district is applying for assistance.
4-21 (c) The agency shall rank each school district to determine
4-22 the district's priority for participation in the supplemental
4-23 program, with the rankings determined as follows:
4-24 (1) a district's wealth per student in the preceding
4-25 year accounts for 10 percent of the district's ranking;
4-26 (2) the average aggregate rate of taxes levied by a
4-27 district in the preceding three years accounts for 50 percent of
5-1 the district's ranking; and
5-2 (3) a district's growth in student population over the
5-3 past five years accounts for 40 percent of the district's ranking.
5-4 Sec. 20.965. PERCENTILE OF WEALTH PER STUDENT. In this
5-5 subchapter, a school district's percentile of wealth per student is
5-6 determined by:
5-7 (1) ranking all the school districts in the state in
5-8 ascending order according to each district's wealth per student;
5-9 (2) beginning with the district with the lowest wealth
5-10 per student, adding the number of students in each district to the
5-11 sum of the number of students in all lower ranked districts until
5-12 the district for which a percentile is being computed is reached;
5-13 and
5-14 (3) determining the percent the sum of students
5-15 represents in relation to the total number of students in the
5-16 state.
5-17 Sec. 20.966. INITIAL LEVEL OF LOCAL PARTICIPATION; MINIMUM
5-18 LEVEL OF LOCAL PARTICIPATION. (a) The commissioner of education
5-19 shall determine the initial level of local participation for a
5-20 school district that applies for assistance under the basic program
5-21 or the supplemental program. The initial level of local
5-22 participation is equal to the district's percentile of wealth per
5-23 student. If a district's percentile of wealth per student is less
5-24 than the minimum level of local participation under Subsection (c)
5-25 or (d) of this section, the minimum level applies.
5-26 (b) A school district may appeal the commissioner of
5-27 education's determination of the level of local participation to
6-1 the State Board of Education.
6-2 (c) The level of local participation for a project financed
6-3 through the basic program may not be less than 20 percent.
6-4 (d) After considering the needs of school districts and the
6-5 availability of state funds, the agency shall determine for all
6-6 school districts a minimum level of local participation for
6-7 projects financed through the supplemental program.
6-8 (e) If the agency determines that the level of local
6-9 participation for a project is so great that the cost of the
6-10 state's participation in financing the project outweighs the
6-11 benefit to be obtained by the school district, the agency shall
6-12 assign the project a level of local participation of 100 percent.
6-13 Sec. 20.967. REPAYMENT PERIOD; CHANGE IN LEVEL OF LOCAL
6-14 PARTICIPATION. (a) The initial repayment period for a project
6-15 begins the date the first bond or facilities certificate is sold to
6-16 finance the project and ends on the fourth anniversary of the date
6-17 the period began. A new repayment period for a project begins the
6-18 day after the previous repayment period ends and ends on the fourth
6-19 anniversary of the date the new period began.
6-20 (b) Before the end of each repayment period, the agency
6-21 shall determine if there has been a change in the school district's
6-22 percentile of wealth per student.
6-23 (c) The agency shall assign a new level of local
6-24 participation for the subsequent repayment period if the agency
6-25 determines that the district is at a higher percentile of wealth
6-26 per student. A new level of local participation may not be less
6-27 than the highest previous level of local participation.
7-1 Sec. 20.968. ISSUANCE AND SALE OF BONDS. (a) Except as
7-2 provided by Section 20.969 of this code, a school district that has
7-3 contracted with the agency under the basic program or the
7-4 supplemental program shall issue and sell bonds as provided by this
7-5 subchapter.
7-6 (b) Proceeds from the sale of bonds issued under this
7-7 subchapter may be used only for:
7-8 (1) the acquisition of the asset for which the bonds
7-9 were issued; and
7-10 (2) payment of costs of issuance of the bonds.
7-11 Sec. 20.969. PROVISION OF CASH IN LIEU OF BONDS. In lieu of
7-12 issuing bonds as provided by Section 20.968 of this code, a school
7-13 district may provide its level of local participation on a project
7-14 in cash. A school district that provides its level of local
7-15 participation in cash must nonetheless conduct an election under
7-16 Section 20.974 of this code authorizing the issuance of bonds to
7-17 provide its level of local participation.
7-18 Sec. 20.970. ISSUANCE AND SALE OF FACILITIES CERTIFICATES.
7-19 (a) A school district that has contracted with the agency under
7-20 the basic program or the supplemental program shall issue
7-21 facilities certificates.
7-22 (b) The state treasurer shall prescribe the form of
7-23 facilities certificates to meet the goals of the basic program or
7-24 the supplemental program. A facilities certificate must provide
7-25 for payment by the issuing district of the principal and interest
7-26 of the certificate. A facilities certificate must provide for the
7-27 forgiveness of principal and interest payments as provided by
8-1 Section 20.971(c) of this code. The agency shall prescribe the
8-2 interest rate and maturity dates of facilities certificates.
8-3 (c) A school district may sell facilities certificates to
8-4 the state only.
8-5 (d) Proceeds from the sale of facilities certificates may be
8-6 used only for:
8-7 (1) the acquisition of the asset for which the
8-8 certificates were issued; and
8-9 (2) payment of costs of issuance of the certificates.
8-10 Sec. 20.971. PAYMENT OF FACILITIES CERTIFICATES. (a)
8-11 During the initial repayment period, a school district is not
8-12 obligated to make scheduled payments of principal or interest on
8-13 facilities certificates.
8-14 (b) A school district shall begin making scheduled payments
8-15 of principal and interest on facilities certificates in any
8-16 subsequent repayment period in which the agency assigns the
8-17 district a higher level of local participation under Section 20.967
8-18 of this code. The percentage of principal and interest that a
8-19 district must pay during a repayment period must equal the
8-20 difference between the district's current level of local
8-21 participation and the district's level of local participation in
8-22 the initial repayment period.
8-23 (c) Principal and interest payments on facilities
8-24 certificates are forgiven except for payments required under
8-25 Subsection (b) of this section.
8-26 Sec. 20.972. SUDDEN DECLINE IN PROPERTY VALUES. If a
8-27 natural or economic disaster occurs in a school district, the
9-1 agency may waive all or part of a scheduled payment on a facilities
9-2 certificate that is required under Section 20.971 of this code if
9-3 the agency finds that:
9-4 (1) the total of property values in the school
9-5 district has declined by 25 percent or more since the preceding tax
9-6 year; and
9-7 (2) the decline is not primarily due to:
9-8 (A) an increase in the amount of property that:
9-9 (i) is exempt from taxation; or
9-10 (ii) qualifies for special appraisal under
9-11 Chapter 23, Tax Code; or
9-12 (B) detachment of territory from the district.
9-13 Sec. 20.973. BOND TAXES. (a) The governing body of a
9-14 school district that issues bonds under the basic program or the
9-15 supplemental program shall levy, pledge, assess, and collect annual
9-16 ad valorem taxes sufficient to pay the principal and interest on
9-17 the bonds as they become due.
9-18 (b) The governing body of a school district that issues
9-19 facilities certificates under the basic program or the supplemental
9-20 program shall levy, pledge, assess, and collect annual ad valorem
9-21 taxes sufficient to pay the principal and interest on facilities
9-22 certificates as they become due, if required to do so under Section
9-23 20.971 of this code.
9-24 Sec. 20.974. BOND AND TAX ELECTIONS. (a) A school district
9-25 may not issue bonds or facilities certificates or levy taxes under
9-26 the basic program or the supplemental program unless authorized by
9-27 a majority of the qualified voters of the district voting at an
10-1 election:
10-2 (1) held for that purpose; or
10-3 (2) held before the effective date of this subchapter
10-4 to authorize the issuance of bonds.
10-5 (b) A proposition to authorize the issuance of bonds or
10-6 facilities certificates under the basic program or the supplemental
10-7 program must include the question of whether the governing body of
10-8 the district may levy, pledge, and collect annual ad valorem taxes
10-9 on all taxable property in the district sufficient, without limit
10-10 as to rate or amount, to pay the principal and interest on the
10-11 bonds or facilities certificates.
10-12 SECTION 2. Section 20.04, Education Code, is amended by
10-13 adding Subsection (f) to read as follows:
10-14 (f) For purposes of the limitation on the amount of tax bond
10-15 indebtedness of a district under Subsection (c) of this section, a
10-16 facilities certificate issued under Section 20.970 of this code is
10-17 not considered a bond.
10-18 SECTION 3. Sections 20.902 and 20.904, Education Code, are
10-19 amended to read as follows:
10-20 Sec. 20.902. GUARANTEE. On approval by the commissioner,
10-21 bonds issued under Subchapter A or H of this chapter, including
10-22 refunding bonds, are guaranteed by the corpus and income of the
10-23 permanent school fund.
10-24 Sec. 20.904. ELIGIBILITY. To be eligible for approval by
10-25 the commissioner, bonds must be issued under Subchapter A or H of
10-26 this chapter or under Chapter 503, Acts of the 54th Legislature,
10-27 1955 (Article 717k, Vernon's Texas Civil Statutes), by an
11-1 accredited school district.
11-2 SECTION 4. Chapter 1, Title 22, Revised Statutes, is amended
11-3 by adding Article 717w to read as follows:
11-4 Art. 717w. PUBLIC SCHOOL FACILITIES EQUALIZATION FUNDING
11-5 Sec. 1. DEFINITIONS. In this article:
11-6 (1) "Basic program" means the basic facilities
11-7 equalization program under Section 20.963, Education Code.
11-8 (2) "Instructional facility" has the meaning assigned
11-9 by Section 20.961, Education Code.
11-10 (3) "Supplemental program" means the supplemental
11-11 facilities equalization program under Section 20.964, Education
11-12 Code.
11-13 Sec. 2. BONDS. (a) The state treasurer shall issue general
11-14 obligation bonds to finance the basic program and the supplemental
11-15 program in the amount specified in the General Appropriations Act.
11-16 The amount of outstanding bonds issued under this article may not
11-17 exceed $750 million at any one time. Bonds that are or have been
11-18 refunded do not count against the limit on outstanding bonds.
11-19 (b) In connection with the issuance and administration of
11-20 bonds, the state treasurer may exercise the rights and powers
11-21 granted to an issuer by:
11-22 (1) Chapter 503, Acts of the 54th Legislature, Regular
11-23 Session, 1955 (Article 717k, Vernon's Texas Civil Statutes); and
11-24 (2) the Bond Procedures Act of 1981 (Article 717k-6,
11-25 Vernon's Texas Civil Statutes).
11-26 Sec. 3. FUND. (a) The school facilities equalization fund
11-27 is in the state treasury. The fund shall be administered by the
12-1 state treasurer as directed by the Central Education Agency. The
12-2 state treasurer may create accounts in the fund as the state
12-3 treasurer considers necessary.
12-4 (b) The state treasurer shall deposit in the fund:
12-5 (1) the proceeds of all bonds sold under this article,
12-6 less the costs of issuance;
12-7 (2) all payments on facilities certificates under
12-8 Section 20.971, Education Code;
12-9 (3) any federal or private funds received and
12-10 designated for assisting school districts in acquiring,
12-11 constructing, renovating, or improving instructional facilities;
12-12 (4) any investment securities purchased by the fund;
12-13 (5) interest or other earnings derived from the
12-14 amounts described in Subdivisions (1)-(4) of this subsection; and
12-15 (6) any amounts transferred for deposit into the fund.
12-16 (c) Money in the fund may be used only to provide aid to
12-17 qualifying school districts under the basic program or the
12-18 supplemental program.
12-19 Sec. 4. ALLOCATION BETWEEN PROGRAMS. The state treasurer
12-20 shall allocate the proceeds of bonds sold under this article, less
12-21 the costs of issuance, as follows:
12-22 (1) 75 percent shall be allocated to the basic
12-23 program; and
12-24 (2) 25 percent shall be allocated to the supplemental
12-25 program.
12-26 SECTION 5. The Public School Facilities Funding Act (Article
12-27 717t, Vernon's Texas Civil Statutes) is repealed.
13-1 SECTION 6. This Act takes effect only if the constitutional
13-2 amendment proposed by __J.R. No. ___, 72nd Legislature, 4th Called
13-3 Session, 1992, authorizing state general obligation bonds to assist
13-4 school districts in financing facilities is approved by the voters.
13-5 If the proposed constitutional amendment is not approved by the
13-6 voters, this Act has no effect.
13-7 SECTION 7. The importance of this legislation and the
13-8 crowded condition of the calendars in both houses create an
13-9 emergency and an imperative public necessity that the
13-10 constitutional rule requiring bills to be read on three several
13-11 days in each house be suspended, and this rule is hereby suspended.