By: Bivins S.B. No. 5
A BILL TO BE ENTITLED
AN ACT
1-1 relating to state financing of public school facilities.
1-2 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-3 SECTION 1. Title 2, Education Code, is amended by adding
1-4 Chapter 37 to read as follows:
1-5 CHAPTER 37. SCHOOL FACILITIES
1-6 Sec. 37.001. SCHOOL FACILITIES ALLOTMENT. (a) For each
1-7 year, a school district is guaranteed a specified amount per
1-8 student in state and local funds for each cent of tax effort, up to
1-9 the maximum rate under Subsection (b), to pay the principal of and
1-10 interest on eligible bonds. The amount of state support is
1-11 determined by the formula:
1-12 where:
1-13 "FYA" is the guaranteed facilities yield amount of state
1-14 funds allocated to the district for the year;
1-15 "FYL" is the dollar amount guaranteed level of state and
1-16 local funds per student per cent of tax effort, which is $28 or a
1-17 greater amount for any year provided by appropriation;
1-18 "ADA" is the number of students in average daily attendance
1-19 in the district;
1-20 "BTR" is the district's bond tax rate for the current year,
1-21 which is determined by dividing the amount of taxes budgeted to be
1-22 collected by the district for payment of eligible bonds by the
1-23 quotient of the district's taxable value of property as determined
1-24 under Section 11.86 divided by 100; and
2-1 "DPV" is the district's taxable value of property as
2-2 determined under Section 11.86.
2-3 (b) For purposes of this section, the bond tax rate under
2-4 Subsection (a) may not exceed the lesser of:
2-5 (1) the rate necessary for the current year, using
2-6 state funds under Subsection (a), to make payments of principal and
2-7 interest on the bonds for which the tax is pledged; or
2-8 (2) $0.25 per $100 of valuation.
2-9 (c) Bonds are eligible to be paid with state and local funds
2-10 under this section if:
2-11 (1) taxes to pay the principal of and interest on the
2-12 bonds were first levied in the 1995-1996 school year or a later
2-13 school year;
2-14 (2) the bonds are guaranteed by the permanent school
2-15 fund as provided by Subchapter E, Chapter 20;
2-16 (3) the bonds do not have a weighted average maturity
2-17 of less than eight years and may not be called for redemption
2-18 earlier than 10 years after the date of issuance; and
2-19 (4) the bonds are not issued to refund bonds described
2-20 by Section 37.002(e)(1).
2-21 (d) A district may use state funds received under this
2-22 section only to pay the principal of and interest on the bonds for
2-23 which the district received the funds.
2-24 (e) The board of trustees and voters of a school district
2-25 shall determine district needs concerning construction,
2-26 acquisition, renovation, or improvement of school facilities.
2-27 Sec. 37.002. EXISTING SCHOOL FACILITIES ALLOTMENT. (a) For
3-1 each year, a school district is guaranteed a specified amount per
3-2 student in state and local funds for each cent of tax effort, up to
3-3 the maximum rate under Subsection (c), to pay the principal of and
3-4 interest on eligible bonds. The amount of state support is
3-5 determined by the formula:
3-6 where:
3-7 "EFYA" is the guaranteed yield amount of state funds
3-8 allocated to the district for the year;
3-9 "EFYL" is the dollar amount guaranteed level of state and
3-10 local funds per student per cent of tax effort, which is equal to
3-11 the quotient of the statewide average property value per student
3-12 for the final fiscal year of the preceding state fiscal biennium
3-13 divided by 10,000;
3-14 "GR" is the district's growth rate, which is the greater of
3-15 one or the quotient of the district's enrollment, as of a date
3-16 determined by the commissioner, in the preceding school year
3-17 divided by the district's enrollment in the school year that began
3-18 five years before the preceding school year;
3-19 "ADA" is the number of students in average daily attendance
3-20 in the district;
3-21 "EBTR" is the district's bond tax rate for the current year,
3-22 which is determined by subtracting the amount of taxes collected by
3-23 the district for payment of eligible bonds at an effective tax rate
3-24 of $0.25 per $100 of valuation from the total amount of taxes
3-25 collected by the district for payment of eligible bonds and
3-26 dividing the difference by the quotient of the district's taxable
3-27 value of property as determined under Section 11.86 divided by 100;
4-1 and
4-2 "DPV" is the district's taxable value of property as
4-3 determined under Section 11.86 for the final fiscal year of the
4-4 preceding state fiscal biennium.
4-5 (b) For purposes of Subsection (a), the statewide average
4-6 property value per student is the quotient of the total taxable
4-7 value of property in the state as determined under Section 11.86
4-8 divided by the total average daily attendance in the state.
4-9 (c) The bond tax rate under Subsection (a) may not exceed
4-10 the rate necessary for the current year, using state funds under
4-11 Subsection (a), to make payments of principal and interest on the
4-12 bonds for which the tax is pledged.
4-13 (d) To be entitled to funds under this section, a school
4-14 district must have imposed a tax for payment of principal and
4-15 interest on bonds at an effective rate in excess of $0.25 per $100
4-16 of valuation in the final year of the preceding state fiscal
4-17 biennium.
4-18 (e) Bonds are eligible to be paid with state and local funds
4-19 under this section only if:
4-20 (1) taxes to pay the principal of and interest on the
4-21 bonds were first levied in the 1994-1995 school year or an earlier
4-22 school year; or
4-23 (2) the bonds are issued to refund bonds described by
4-24 Subdivision (1).
4-25 (f) A district may use state funds received under this
4-26 section only to pay the principal of and interest on the bonds for
4-27 which the district received the funds.
5-1 Sec. 37.003. REFUNDING BONDS. A school district may use
5-2 state funds received under this chapter to pay the principal of and
5-3 interest on refunding bonds that:
5-4 (1) are issued to refund bonds eligible under Section
5-5 37.001 or 37.002;
5-6 (2) do not have a final maturity date later than the
5-7 final maturity date of the bonds being refunded;
5-8 (3) may not be called for redemption earlier than the
5-9 earliest call date of the bonds being refunded; and
5-10 (4) result in a present value savings, which is
5-11 determined by computing the net present value of the difference
5-12 between each scheduled payment on the original bonds and each
5-13 scheduled payment on the refunding bonds. The present value
5-14 savings shall be calculated at the true interest cost of the
5-15 refunding bonds.
5-16 Sec. 37.004. PAYMENT OF SCHOOL FACILITIES ALLOTMENTS.
5-17 (a) For each school year, the commissioner of education shall
5-18 determine the amount of money to which each school district is
5-19 entitled under Sections 37.001 and 37.002.
5-20 (b) If the amount appropriated for purposes of Sections
5-21 37.001 and 37.002 for a year is less than the total amount
5-22 determined under Subsection (a) for that year, the commissioner
5-23 shall:
5-24 (1) transfer from the foundation school program to the
5-25 school facilities program the amount by which the total amount
5-26 determined under Subsection (a) exceeds the amount appropriated;
5-27 and
6-1 (2) reduce each district's foundation school fund
6-2 allocations in the manner provided by Section 16.254.
6-3 (c) Warrants for payments under this chapter shall be
6-4 approved and transmitted to school district treasurers or
6-5 depositories in the same manner as warrants for payments under
6-6 Chapter 16.
6-7 (d) Payments under this chapter shall be made semiannually
6-8 on dates selected by the school district and approved by the
6-9 commissioner to enable the district to meet scheduled bond
6-10 payments.
6-11 (e) Section 16.259 applies to payments under this chapter.
6-12 Sec. 37.005. SALE OF SCHOOL FACILITY FINANCED WITH SCHOOL
6-13 FACILITIES ALLOTMENT. (a) If a school facility financed by bonds
6-14 paid with state and local funds under Section 37.001 is sold before
6-15 the bonds are fully paid, the school district shall remit to the
6-16 comptroller an amount equal to the district's net proceeds from the
6-17 sale multiplied by a percentage determined by dividing the amount
6-18 of state funds under this section used to pay the principal of and
6-19 interest on the bonds by the total amount of principal and interest
6-20 paid on the bonds with funds other than the proceeds of the sale.
6-21 (b) In this section, "net proceeds" means the difference
6-22 between the total amount received from the sale less:
6-23 (1) the amount necessary to fully pay the outstanding
6-24 principal of and interest on the bonds; and
6-25 (2) the school district's costs of the sale, as
6-26 approved by the commissioner of education.
6-27 SECTION 2. Sections 16.401 and 16.402, Education Code, are
7-1 transferred to Chapter 37, Education Code, as added by this Act,
7-2 are redesignated as Sections 37.006 and 37.007, respectively, and
7-3 are amended to read as follows:
7-4 Sec. 37.006 <16.401>. Inventory of School Facilities.
7-5 (a) The State Board of Education shall establish a statewide
7-6 inventory of school facilities and shall update the inventory on a
7-7 periodic basis.
7-8 (b) The inventory shall include information on the
7-9 condition, use, type, and replacement cost of public school
7-10 facilities in this state.
7-11 Sec. 37.007 <16.402>. Standards. The State Board of
7-12 Education shall establish standards for adequacy of school
7-13 facilities. The standards shall include requirements related to
7-14 space, educational adequacy, and construction quality. All
7-15 facilities constructed after September 1, 1992, must meet the
7-16 standards in order to be financed with state or local tax funds.
7-17 SECTION 3. Subsection (e), Section 16.256, Education Code,
7-18 is amended to read as follows:
7-19 (e) The funding elements shall include:
7-20 (1) a basic allotment for the purposes of Section
7-21 16.101 of this code that represents the cost per student of a
7-22 regular education program that meets the basic criteria for an
7-23 accredited program including all mandates of law and regulation;
7-24 (2) adjustments designed to reflect the variation in
7-25 known resource costs and costs of education beyond the control of
7-26 school districts;
7-27 (3) appropriate program cost differentials and other
8-1 funding elements for the programs authorized under Subchapter D of
8-2 this chapter, with the program funding level expressed as dollar
8-3 amounts and as weights applied to the adjusted basic allotment for
8-4 the appropriate year;
8-5 (4) the maximum guaranteed level of qualified state
8-6 and local funds per student for the purposes of Subchapter H of
8-7 this chapter;
8-8 (5) the enrichment and facilities tax rate under
8-9 Subchapter H of this chapter; and
8-10 (6) <the formula elements for the funding formulas for
8-11 capital outlay and debt service under the provision of Subchapter I
8-12 of this chapter; and>
8-13 <(7)> the calculation of weighted students in average
8-14 daily attendance under Section 16.302 of this code.
8-15 SECTION 4. Section 16.302, Education Code, is amended to
8-16 read as follows:
8-17 Sec. 16.302. Allotment. Each school district is guaranteed
8-18 a specified amount per weighted student in state and local funds
8-19 for each cent of tax effort over that required for the district's
8-20 local fund assignment up to the maximum level specified in this
8-21 subchapter. The amount of state support, subject only to the
8-22 maximum amount under Section 16.303 of this code, is determined by
8-23 the formula:
8-24 where:
8-25 "GYA" is the guaranteed yield amount of state funds to be
8-26 allocated to the district;
8-27 "GL" is the dollar amount guaranteed level of state and local
9-1 funds per weighted student per cent of tax effort, which is $20.55
9-2 or a greater amount for any year provided by appropriation, or a
9-3 greater amount adopted by the foundation school fund budget
9-4 committee under Section 16.256(d);
9-5 "WADA"<, except as provided by Section 16.206 of this code,>
9-6 is the number of weighted students in average daily attendance,
9-7 which is calculated by dividing the sum of the school district's
9-8 allotments under Subchapters C and D of this chapter, less any
9-9 allotments to the district for transportation, teacher
9-10 compensation, or technology and 50 percent of the adjustment under
9-11 Section 16.102 of this code, by the basic allotment for the
9-12 applicable year;
9-13 "DTR" is the district enrichment and facilities tax rate of
9-14 the school district, which is determined by subtracting the sum of
9-15 the district's local fund assignment and the amount of taxes
9-16 collected by the school district for the applicable school year for
9-17 payment of bonds that are being paid with state and local funds
9-18 under Section 37.001 of this code from the total amount of taxes
9-19 collected by the school district for the applicable school year and
9-20 dividing the difference by the quotient of the district's taxable
9-21 value of property as determined under Section 11.86 of this code
9-22 divided by 100; and
9-23 "LR" is the local revenue, which is determined by multiplying
9-24 "DTR" by the quotient of the district's taxable value of property
9-25 as determined under Section 11.86 of this code divided by 100.
9-26 SECTION 5. Section 20.04, Education Code, is amended by
9-27 amending Subsection (c) and by adding Subsections (f) and (g) to
10-1 read as follows:
10-2 (c) If bonds are ever voted in a district pursuant to
10-3 Subsection (b)(1) of this section, then all bonds thereafter
10-4 proposed shall be submitted pursuant to that subsection, and
10-5 Subsection (b)(2) of this section shall not be applicable to such
10-6 district. Except as otherwise provided by this section, no bonds
10-7 shall be issued pursuant to Subsection (b)(1) of this section if
10-8 the aggregate principal amount of tax bond indebtedness of the
10-9 district after such issuance would be in excess of 10 percent of
10-10 the assessed valuation of taxable property in the district
10-11 according to the then last completed and approved ad valorem tax
10-12 rolls of the district. A district may issue bonds resulting in an
10-13 aggregate principal amount of tax bond indebtedness in excess of 10
10-14 percent of the district's assessed valuation if:
10-15 (1) the bonds are issued for the purpose of
10-16 constructing and equipping a replacement for a building lost to
10-17 fire or natural disaster and:<;>
10-18 (A) <(2)> the bonds are issued in an amount
10-19 necessary for that purpose, less the amount paid by insurance
10-20 covering the loss; and
10-21 (B) <(3)> the resulting aggregate principal
10-22 amount of tax bond indebtedness does not exceed 16 percent of the
10-23 district's assessed valuation; or
10-24 (2) the bonds are eligible to be paid with state and
10-25 local funds under Section 37.001 of this code, and the aggregate
10-26 principal amount of tax bond indebtedness after issuance, counting
10-27 only the estimated local share as determined under Subsection (f)
11-1 of this section of the principal of the bonds to be issued, does
11-2 not exceed 10 percent of the district's assessed valuation.
11-3 (f) For purposes of Subsection (c) of this section, the
11-4 estimated local share of the principal of bonds is that portion of
11-5 the principal for which the district must provide funds under
11-6 Section 37.001 of this code, assuming that:
11-7 (1) the amount of the principal of the bonds to be
11-8 paid by the district equals the amount that would be paid by the
11-9 district if the principal were amortized on an equal annual basis
11-10 through final maturity; and
11-11 (2) the guaranteed facilities yield amount of state
11-12 funds provided by Section 37.001 of this code, computed on the date
11-13 of issuance, were constant for each year.
11-14 (g) Prior to the issuance of bonds, a district shall
11-15 demonstrate to the attorney general with respect to the proposed
11-16 bond issue a projected ability to pay the principal of and interest
11-17 on the proposed bonds and all previously issued bonds, other than
11-18 bonds issued prior to September 1, 1992, from a tax at a debt rate
11-19 not to exceed $0.50 per $100 of valuation.
11-20 SECTION 6. Section 20.09, Education Code, is repealed.
11-21 SECTION 7. Section 20.911, Education Code, is amended to
11-22 read as follows:
11-23 Sec. 20.911. Reimbursement of Fund. (a) If the
11-24 commissioner orders payment from the fund on behalf of a school
11-25 district, the commissioner <he> shall direct the comptroller <of
11-26 public accounts> to withhold the amount paid, plus interest, from
11-27 the first state money payable to the school district, other than
12-1 money to which the school district is entitled under Section
12-2 37.001. The amount withheld shall be deposited to the credit of
12-3 the fund.
12-4 (b) If the commissioner orders payment from the permanent
12-5 school fund in connection with bonds that were, before default,
12-6 being paid with state and local funds under Section 37.001 and the
12-7 commissioner finds the default is caused by the failure to
12-8 appropriate sufficient funds to make a payment to the district
12-9 under Section 37.004, the commissioner shall:
12-10 (1) withhold under Subsection (a) only that portion of
12-11 the amount paid from the permanent school fund that is
12-12 proportionate to the school district's local share under Section
12-13 37.001; and
12-14 (2) transfer from the foundation school fund to the
12-15 permanent school fund that portion of the amount paid from the
12-16 permanent school fund that is proportionate to the state's share
12-17 under Section 37.001.
12-18 (c) In accordance with the rules of the board, the
12-19 commissioner may authorize reimbursement to the fund with interest
12-20 in a manner other than that provided by this section.
12-21 SECTION 8. (a) A commission is established to study the
12-22 costs of facilities that are related to the needs of different
12-23 student populations.
12-24 (b) The commission is composed of the commissioner of
12-25 education or the commissioner's designee and one member appointed
12-26 by the commissioner from each of the 20 regional education service
12-27 center areas. The board of directors of each regional education
13-1 service center shall submit the names of three persons from the
13-2 region to the commissioner to consider for appointment to the
13-3 commission. The commissioner shall select one of the three persons
13-4 named from each region to serve on the commission. In making the
13-5 appointments, the commissioner shall ensure that the composition of
13-6 the commission is representative of the demographics of the state
13-7 population and includes representatives of:
13-8 (1) rural, suburban, and urban districts;
13-9 (2) districts of various wealth levels; and
13-10 (3) districts that serve various student populations.
13-11 (c) Not later than September 15, 1996, the commission shall
13-12 report to the legislature recommendations, if any, for
13-13 modifications to the state formulas for financing facilities that
13-14 are needed to account for costs related to serving different
13-15 student populations.
13-16 (d) From funds appropriated for the purposes of Chapter 37,
13-17 Education Code, as added by this Act, the commissioner may withhold
13-18 the amount necessary to staff the commission and for the actual
13-19 travel expenses of the members of the commission.
13-20 (e) The commission established by this section is abolished
13-21 January 1, 1997.
13-22 SECTION 9. Notwithstanding Section 95, S.B. No. 1, Acts of
13-23 the 74th Legislature, Regular Session, 1995, this Act prevails over
13-24 that Act to the extent of any conflict.
13-25 SECTION 10. This Act takes effect September 1, 1995.
13-26 SECTION 11. The importance of this legislation and the
13-27 crowded condition of the calendars in both houses create an
14-1 emergency and an imperative public necessity that the
14-2 constitutional rule requiring bills to be read on three several
14-3 days in each house be suspended, and this rule is hereby suspended.