1-1 By: Bivins S.B. No. 5
1-2 (In the Senate - Filed January 31, 1995; February 1, 1995,
1-3 read first time and referred to Committee on Education;
1-4 March 23, 1995, reported adversely, with favorable Committee
1-5 Substitute by the following vote: Yeas 8, Nays 2; March 23, 1995,
1-6 sent to printer.)
1-7 COMMITTEE SUBSTITUTE FOR S.B. No. 5 By: Bivins
1-8 A BILL TO BE ENTITLED
1-9 AN ACT
1-10 relating to state financing of public school facilities.
1-11 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-12 SECTION 1. Title 2, Education Code, is amended by adding
1-13 Chapter 37 to read as follows:
1-14 CHAPTER 37. SCHOOL FACILITIES
1-15 Sec. 37.001. SCHOOL FACILITIES ALLOTMENT. (a) For each
1-16 year, a school district is guaranteed a specified amount per
1-17 student in state and local funds for each cent of tax effort, up to
1-18 the maximum rate under Subsection (b), to pay the principal of and
1-19 interest on eligible bonds. The amount of state support is
1-20 determined by the formula:
1-21 where:
1-22 "FYA" is the guaranteed facilities yield amount of state
1-23 funds allocated to the district for the year;
1-24 "FYL" is the dollar amount guaranteed level of state and
1-25 local funds per student per cent of tax effort, which is $28 or a
1-26 greater amount for any year provided by appropriation;
1-27 "ADA" is the number of students in average daily attendance
1-28 in the district;
1-29 "BTR" is the district's bond tax rate for the current year,
1-30 which is determined by dividing the amount of taxes budgeted to be
1-31 collected by the district for payment of eligible bonds by the
1-32 quotient of the district's taxable value of property as determined
1-33 under Section 11.86 divided by 100; and
1-34 "DPV" is the district's taxable value of property as
1-35 determined under Section 11.86.
1-36 (b) For purposes of this section, the bond tax rate under
1-37 Subsection (a) may not exceed the lesser of:
1-38 (1) the rate necessary for the current year, using
1-39 state funds under Subsection (a), to make payments of principal and
1-40 interest on the bonds for which the tax is pledged; or
1-41 (2) $0.25 per $100 of valuation.
1-42 (c) Bonds are eligible to be paid with state and local funds
1-43 under this section if:
1-44 (1) taxes to pay the principal of and interest on the
1-45 bonds were first levied in the 1995-1996 school year or a later
1-46 school year;
1-47 (2) the bonds are guaranteed by the permanent school
1-48 fund as provided by Subchapter E, Chapter 20;
1-49 (3) the bonds do not have a weighted average maturity
1-50 of less than eight years and may not be called for redemption
1-51 earlier than 10 years after the date of issuance; and
1-52 (4) the bonds are not issued to refund bonds described
1-53 by Section 37.002(e)(1).
1-54 (d) A district may use state funds received under this
1-55 section only to pay the principal of and interest on the bonds for
1-56 which the district received the funds.
1-57 (e) The board of trustees and voters of a school district
1-58 shall determine district needs concerning construction,
1-59 acquisition, renovation, or improvement of school facilities.
1-60 Sec. 37.002. EXISTING SCHOOL FACILITIES ALLOTMENT. (a) For
1-61 each year, a school district is guaranteed a specified amount per
1-62 student in state and local funds for each cent of tax effort, up to
1-63 the maximum rate under Subsection (c), to pay the principal of and
1-64 interest on eligible bonds. The amount of state support is
1-65 determined by the formula:
1-66 where:
1-67 "EFYA" is the guaranteed yield amount of state funds
1-68 allocated to the district for the year;
2-1 "EFYL" is the dollar amount guaranteed level of state and
2-2 local funds per student per cent of tax effort, which is equal to
2-3 the quotient of the statewide average property value per student
2-4 for the final fiscal year of the preceding state fiscal biennium
2-5 divided by 10,000;
2-6 "GR" is the district's growth rate, which is the greater of
2-7 one or the quotient of the district's enrollment, as of a date
2-8 determined by the commissioner, in the preceding school year
2-9 divided by the district's enrollment in the school year that began
2-10 five years before the preceding school year;
2-11 "ADA" is the number of students in average daily attendance
2-12 in the district;
2-13 "EBTR" is the district's bond tax rate for the current year,
2-14 which is determined by subtracting the amount of taxes collected by
2-15 the district for payment of eligible bonds at an effective tax rate
2-16 of $0.25 per $100 of valuation from the total amount of taxes
2-17 collected by the district for payment of eligible bonds and
2-18 dividing the difference by the quotient of the district's taxable
2-19 value of property as determined under Section 11.86 divided by 100;
2-20 and
2-21 "DPV" is the district's taxable value of property as
2-22 determined under Section 11.86 for the final fiscal year of the
2-23 preceding state fiscal biennium.
2-24 (b) For purposes of Subsection (a), the statewide average
2-25 property value per student is the quotient of the total taxable
2-26 value of property in the state as determined under Section 11.86
2-27 divided by the total average daily attendance in the state.
2-28 (c) The bond tax rate under Subsection (a) may not exceed
2-29 the rate necessary for the current year, using state funds under
2-30 Subsection (a), to make payments of principal and interest on the
2-31 bonds for which the tax is pledged.
2-32 (d) To be entitled to funds under this section, a school
2-33 district must have imposed a tax for payment of principal and
2-34 interest on bonds at an effective rate in excess of $0.25 per $100
2-35 of valuation in the final year of the preceding state fiscal
2-36 biennium.
2-37 (e) Bonds are eligible to be paid with state and local funds
2-38 under this section only if:
2-39 (1) taxes to pay the principal of and interest on the
2-40 bonds were first levied in the 1994-1995 school year or an earlier
2-41 school year; or
2-42 (2) the bonds are issued to refund bonds described by
2-43 Subdivision (1).
2-44 (f) A district may use state funds received under this
2-45 section only to pay the principal of and interest on the bonds for
2-46 which the district received the funds.
2-47 Sec. 37.003. REFUNDING BONDS. A school district may use
2-48 state funds received under this chapter to pay the principal of and
2-49 interest on refunding bonds that:
2-50 (1) are issued to refund bonds eligible under Section
2-51 37.001 or 37.002;
2-52 (2) do not have a final maturity date later than the
2-53 final maturity date of the bonds being refunded;
2-54 (3) may not be called for redemption earlier than the
2-55 earliest call date of the bonds being refunded; and
2-56 (4) result in a present value savings, which is
2-57 determined by computing the net present value of the difference
2-58 between each scheduled payment on the original bonds and each
2-59 scheduled payment on the refunding bonds.
2-60 Sec. 37.004. PAYMENT OF SCHOOL FACILITIES ALLOTMENTS.
2-61 (a) For each school year, the commissioner of education shall
2-62 determine the amount of money to which each school district is
2-63 entitled under Sections 37.001 and 37.002.
2-64 (b) If the amount appropriated for purposes of Sections
2-65 37.001 and 37.002 for a year is less than the total amount
2-66 determined under Subsection (a) for that year, the commissioner
2-67 shall:
2-68 (1) transfer from the foundation school program to the
2-69 school facilities program the amount by which the total amount
2-70 determined under Subsection (a) exceeds the amount appropriated;
3-1 and
3-2 (2) reduce each district's foundation school fund
3-3 allocations in the manner provided by Section 16.254.
3-4 (c) Warrants for payments under this chapter shall be
3-5 approved and transmitted to school district treasurers or
3-6 depositories in the same manner as warrants for payments under
3-7 Chapter 16.
3-8 (d) Payments under this chapter shall be made semiannually
3-9 on dates selected by the school district and approved by the
3-10 commissioner to enable the district to meet scheduled bond
3-11 payments.
3-12 (e) Section 16.259 applies to payments under this chapter.
3-13 Sec. 37.005. SALE OF SCHOOL FACILITY FINANCED WITH SCHOOL
3-14 FACILITIES ALLOTMENT. (a) If a school facility financed by bonds
3-15 paid with state and local funds under Section 37.001 is sold before
3-16 the bonds are fully paid, the school district shall remit to the
3-17 comptroller an amount equal to the district's net proceeds from the
3-18 sale multiplied by a percentage determined by dividing the amount
3-19 of state funds under this section used to pay the principal of and
3-20 interest on the bonds by the total amount of principal and interest
3-21 paid on the bonds with funds other than the proceeds of the sale.
3-22 (b) In this section, "net proceeds" means the difference
3-23 between the total amount received from the sale less:
3-24 (1) the amount necessary to fully pay the outstanding
3-25 principal of and interest on the bonds; and
3-26 (2) the school district's costs of the sale, as
3-27 approved by the commissioner of education.
3-28 SECTION 2. Sections 16.401 and 16.402, Education Code, are
3-29 transferred to Chapter 37, Education Code, as added by this Act,
3-30 are redesignated as Sections 37.006 and 37.007, respectively, and
3-31 are amended to read as follows:
3-32 Sec. 37.006 <16.401>. Inventory of School Facilities.
3-33 (a) The State Board of Education shall establish a statewide
3-34 inventory of school facilities and shall update the inventory on a
3-35 periodic basis.
3-36 (b) The inventory shall include information on the
3-37 condition, use, type, and replacement cost of public school
3-38 facilities in this state.
3-39 Sec. 37.007 <16.402>. Standards. The State Board of
3-40 Education shall establish standards for adequacy of school
3-41 facilities. The standards shall include requirements related to
3-42 space, educational adequacy, and construction quality. All
3-43 facilities constructed after September 1, 1992, must meet the
3-44 standards in order to be financed with state or local tax funds.
3-45 SECTION 3. Subsection (e), Section 16.256, Education Code,
3-46 is amended to read as follows:
3-47 (e) The funding elements shall include:
3-48 (1) a basic allotment for the purposes of Section
3-49 16.101 of this code that represents the cost per student of a
3-50 regular education program that meets the basic criteria for an
3-51 accredited program including all mandates of law and regulation;
3-52 (2) adjustments designed to reflect the variation in
3-53 known resource costs and costs of education beyond the control of
3-54 school districts;
3-55 (3) appropriate program cost differentials and other
3-56 funding elements for the programs authorized under Subchapter D of
3-57 this chapter, with the program funding level expressed as dollar
3-58 amounts and as weights applied to the adjusted basic allotment for
3-59 the appropriate year;
3-60 (4) the maximum guaranteed level of qualified state
3-61 and local funds per student for the purposes of Subchapter H of
3-62 this chapter;
3-63 (5) the enrichment and facilities tax rate under
3-64 Subchapter H of this chapter; and
3-65 (6) <the formula elements for the funding formulas for
3-66 capital outlay and debt service under the provision of Subchapter I
3-67 of this chapter; and>
3-68 <(7)> the calculation of weighted students in average
3-69 daily attendance under Section 16.302 of this code.
3-70 SECTION 4. Section 16.302, Education Code, is amended to
4-1 read as follows:
4-2 Sec. 16.302. Allotment. Each school district is guaranteed
4-3 a specified amount per weighted student in state and local funds
4-4 for each cent of tax effort over that required for the district's
4-5 local fund assignment up to the maximum level specified in this
4-6 subchapter. The amount of state support, subject only to the
4-7 maximum amount under Section 16.303 of this code, is determined by
4-8 the formula:
4-9 where:
4-10 "GYA" is the guaranteed yield amount of state funds to be
4-11 allocated to the district;
4-12 "GL" is the dollar amount guaranteed level of state and local
4-13 funds per weighted student per cent of tax effort, which is $20.55
4-14 or a greater amount for any year provided by appropriation, or a
4-15 greater amount adopted by the foundation school fund budget
4-16 committee under Section 16.256(d);
4-17 "WADA"<, except as provided by Section 16.206 of this code,>
4-18 is the number of weighted students in average daily attendance,
4-19 which is calculated by dividing the sum of the school district's
4-20 allotments under Subchapters C and D of this chapter, less any
4-21 allotments to the district for transportation, teacher
4-22 compensation, or technology and 50 percent of the adjustment under
4-23 Section 16.102 of this code, by the basic allotment for the
4-24 applicable year;
4-25 "DTR" is the district enrichment and facilities tax rate of
4-26 the school district, which is determined by subtracting the sum of
4-27 the district's local fund assignment and the amount of taxes
4-28 collected by the school district for the applicable school year for
4-29 payment of bonds that are being paid with state and local funds
4-30 under Section 37.001 of this code from the total amount of taxes
4-31 collected by the school district for the applicable school year and
4-32 dividing the difference by the quotient of the district's taxable
4-33 value of property as determined under Section 11.86 of this code
4-34 divided by 100; and
4-35 "LR" is the local revenue, which is determined by multiplying
4-36 "DTR" by the quotient of the district's taxable value of property
4-37 as determined under Section 11.86 of this code divided by 100.
4-38 SECTION 5. Section 20.04, Education Code, is amended by
4-39 amending Subsection (c) and by adding Subsections (f) and (g) to
4-40 read as follows:
4-41 (c) If bonds are ever voted in a district pursuant to
4-42 Subsection (b)(1) of this section, then all bonds thereafter
4-43 proposed shall be submitted pursuant to that subsection, and
4-44 Subsection (b)(2) of this section shall not be applicable to such
4-45 district. Except as otherwise provided by this section, no bonds
4-46 shall be issued pursuant to Subsection (b)(1) of this section if
4-47 the aggregate principal amount of tax bond indebtedness of the
4-48 district after such issuance would be in excess of 10 percent of
4-49 the assessed valuation of taxable property in the district
4-50 according to the then last completed and approved ad valorem tax
4-51 rolls of the district. A district may issue bonds resulting in an
4-52 aggregate principal amount of tax bond indebtedness in excess of 10
4-53 percent of the district's assessed valuation if:
4-54 (1) the bonds are issued for the purpose of
4-55 constructing and equipping a replacement for a building lost to
4-56 fire or natural disaster and:<;>
4-57 (A) <(2)> the bonds are issued in an amount
4-58 necessary for that purpose, less the amount paid by insurance
4-59 covering the loss; and
4-60 (B) <(3)> the resulting aggregate principal
4-61 amount of tax bond indebtedness does not exceed 16 percent of the
4-62 district's assessed valuation; or
4-63 (2) the bonds are eligible to be paid with state and
4-64 local funds under Section 37.001 of this code, and the aggregate
4-65 principal amount of tax bond indebtedness after issuance, counting
4-66 only the estimated local share as determined under Subsection (f)
4-67 of this section of the principal of the bonds to be issued, does
4-68 not exceed 10 percent of the district's assessed valuation.
4-69 (f) For purposes of Subsection (c) of this section, the
4-70 estimated local share of the principal of bonds is that portion of
5-1 the principal for which the district must provide funds under
5-2 Section 37.001 of this code, assuming that:
5-3 (1) the amount of the principal of the bonds to be
5-4 paid by the district equals the amount that would be paid by the
5-5 district if the principal were amortized on an equal annual basis
5-6 through final maturity; and
5-7 (2) the guaranteed facilities yield amount of state
5-8 funds provided by Section 37.001 of this code, computed on the date
5-9 of issuance, were constant for each year.
5-10 (g) Prior to the issuance of bonds, a district shall
5-11 demonstrate to the attorney general with respect to the proposed
5-12 bond issue a projected ability to pay the principal of and interest
5-13 on the proposed bonds and all previously issued bonds, other than
5-14 bonds issued prior to September 1, 1992, from a tax at a debt rate
5-15 not to exceed $0.50 per $100 of valuation.
5-16 SECTION 6. Section 20.09, Education Code, is repealed.
5-17 SECTION 7. Section 20.911, Education Code, is amended to
5-18 read as follows:
5-19 Sec. 20.911. Reimbursement of Fund. (a) If the
5-20 commissioner orders payment from the fund on behalf of a school
5-21 district, the commissioner <he> shall direct the comptroller <of
5-22 public accounts> to withhold the amount paid, plus interest, from
5-23 the first state money payable to the school district, other than
5-24 money to which the school district is entitled under Section
5-25 37.001. The amount withheld shall be deposited to the credit of
5-26 the fund.
5-27 (b) If the commissioner orders payment from the permanent
5-28 school fund in connection with bonds that were, before default,
5-29 being paid with state and local funds under Section 37.001 and the
5-30 commissioner finds the default is caused by the failure to
5-31 appropriate sufficient funds to make a payment to the district
5-32 under Section 37.004, the commissioner shall:
5-33 (1) withhold under Subsection (a) only that portion of
5-34 the amount paid from the permanent school fund that is
5-35 proportionate to the school district's local share under Section
5-36 37.001; and
5-37 (2) transfer from the foundation school fund to the
5-38 permanent school fund that portion of the amount paid from the
5-39 permanent school fund that is proportionate to the state's share
5-40 under Section 37.001.
5-41 (c) In accordance with the rules of the board, the
5-42 commissioner may authorize reimbursement to the fund with interest
5-43 in a manner other than that provided by this section.
5-44 SECTION 8. This Act takes effect September 1, 1995.
5-45 SECTION 9. The importance of this legislation and the
5-46 crowded condition of the calendars in both houses create an
5-47 emergency and an imperative public necessity that the
5-48 constitutional rule requiring bills to be read on three several
5-49 days in each house be suspended, and this rule is hereby suspended.
5-50 * * * * *