1-1 By: Bivins S.B. No. 405
1-2 (In the Senate - Filed February 13, 1995; February 14, 1995,
1-3 read first time and referred to Committee on Finance;
1-4 April 28, 1995, reported adversely, with favorable Committee
1-5 Substitute by the following vote: Yeas 11, Nays 0; April 28, 1995,
1-6 sent to printer.)
1-7 COMMITTEE SUBSTITUTE FOR S.B. No. 405 By: Bivins
1-8 A BILL TO BE ENTITLED
1-9 AN ACT
1-10 relating to the distribution of the foundation school fund and to
1-11 tax and revenue anticipation notes made necessary in part by such
1-12 distribution.
1-13 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-14 SECTION 1. Subsections (b), (c), and (d), Section 16.260,
1-15 Education Code, are amended to read as follows:
1-16 (b) Payments from the foundation school fund to each
1-17 category 1 school district shall be made as follows:
1-18 (1) 15 <21> percent of the yearly entitlement of the
1-19 district shall be paid in an installment <two equal installments>
1-20 to be made on or before the 25th day of September <and October> of
1-21 a fiscal year;
1-22 (2) 80 <57> percent of the yearly entitlement of the
1-23 district shall be paid in eight <six> equal installments to be made
1-24 on or before the 25th day of October, November, December, January,
1-25 <February,> March, May, June, and July; and
1-26 (3) five <22> percent of the yearly entitlement of the
1-27 district shall be paid in an installment <two equal installments>
1-28 to be made on or before the 25th day of February <April and May>.
1-29 (c) Payments from the foundation school fund to each
1-30 category 2 school district shall be made as follows:
1-31 (1) 22 <21> percent of the yearly entitlement of the
1-32 district shall be paid in an installment <two equal installments>
1-33 to be made on or before the 25th day of September <and October> of
1-34 a fiscal year;
1-35 (2) 18 <38> percent of the yearly entitlement of the
1-36 district shall be paid in an installment <four equal installments>
1-37 to be made on or before the 25th day of October <November,
1-38 December, March, and July>;
1-39 (3) 9.5 <seven> percent of the yearly entitlement of
1-40 the district shall be paid in an installment <two equal
1-41 installments> to be made on or before the 25th day of November
1-42 <January and February>;
1-43 (4) 7.5 <22> percent of the yearly entitlement of the
1-44 district shall be paid in an installment <two equal installments>
1-45 to be made on or before the 25th day of April <and May>; <and>
1-46 (5) five <12> percent of the yearly entitlement of the
1-47 district shall be paid in an installment <two equal installments>
1-48 to be made on or before the 25th day of May <June and August>;
1-49 (6) 10 percent of the yearly entitlement of the
1-50 district shall be paid in an installment to be made on or before
1-51 the 25th day of June;
1-52 (7) 13 percent of the yearly entitlement of the
1-53 district shall be paid in an installment to be made on or before
1-54 the 25th day of July; and
1-55 (8) 15 percent of the yearly entitlement of the
1-56 district shall be paid in an installment to be made on or before
1-57 the 25th day of August.
1-58 (d) Payments from the foundation school fund to each
1-59 category 3 school district shall be made as follows:
1-60 (1) 45 <21> percent of the yearly entitlement of the
1-61 district shall be paid in an installment <two equal installments>
1-62 to be made on or before the 25th day of September <and October> of
1-63 a fiscal year;
1-64 (2) 35 <57> percent of the yearly entitlement of the
1-65 district shall be paid in an installment <six equal installments>
1-66 to be made on or before the 25th day of October <November,
1-67 December, March, June, July, and August>; and
1-68 (3) 20 <22> percent of the yearly entitlement of the
2-1 district shall be paid in an installment <two equal installments>
2-2 to be made on or before the 25th day of August <April and May>.
2-3 SECTION 2. Section 404.121, Government Code, is amended to
2-4 read as follows:
2-5 Sec. 404.121. Definitions. In this subchapter:
2-6 (1) "Cash flow deficit" for any period means the
2-7 excess, if any, of (A) expenditures paid and transfers made from
2-8 the general revenue fund in the period, including payments provided
2-9 by Section 16.260, Education Code, over (B) taxes and other
2-10 revenues deposited to the fund in the period, other than pursuant
2-11 to Section 403.092, that are legally available for such
2-12 expenditures and transfers.
2-13 (2) "Committee" means the cash management committee.
2-14 (3) <(2)> "Credit agreement" means a loan agreement,
2-15 revolving credit agreement, agreement establishing a line of
2-16 credit, letter of credit, reimbursement agreement, insurance
2-17 contract, commitment to purchase tax and revenue anticipation
2-18 notes, purchase or sale agreement, forward payment conversion
2-19 agreement, contract providing for payments based on levels of or
2-20 changes in interest rates or currency exchange rates, or commitment
2-21 or other contract or agreement approved by the treasurer in
2-22 connection with the authorization, issuance, security, exchange,
2-23 payment, purchase, or redemption of an obligation, interest on an
2-24 obligation, or both.
2-25 (4) <(3)> "Tax and revenue anticipation notes" and
2-26 "notes" mean notes issued under this section, including any
2-27 obligations under credit agreements entered into by the treasurer
2-28 in connection with the issuance of the notes.
2-29 (5) <(4)> "Temporary cash shortfall" during any period
2-30 means the greater of (A) the <cumulative> cash flow deficit
2-31 forecast by the treasurer for the <at any time during a> period and
2-32 (B) <within a fiscal year in which> the cash balance of taxes and
2-33 revenues in the general revenue fund at the beginning of the period
2-34 that are legally available for expenditures and transfers included
2-35 in such cash flow deficit, other than pursuant to Section 403.092,
2-36 less the cash flow deficit for the period, and less<, as projected
2-37 by the treasurer, is insufficient to honor the authorized
2-38 expenditures from that fund during that period and to establish> an
2-39 amount reasonably required as a cash balance in the general revenue
2-40 fund, as determined by the treasurer, but not more than 10 percent
2-41 of expenditures and transfers made from the general revenue fund in
2-42 the fiscal year before the determination.
2-43 SECTION 3. Subsection (d), Section 404.123, Government Code,
2-44 is amended to read as follows:
2-45 (d) All notes must mature and be paid in full during the
2-46 fiscal biennium in which they were issued. The notes must be
2-47 signed by the governor. <The interest rate on the notes must be
2-48 set so that the amount equal to the total amount of interest to be
2-49 paid on the notes plus the costs of issuance of the notes does not
2-50 exceed the amount of interest that would be paid on the notes if
2-51 the interest rate on the notes were one percent less than one of
2-52 the following, as computed by the treasurer:>
2-53 <(1) the average interest yield being earned on funds
2-54 invested by the treasurer as of the date of the notes' issuance; or>
2-55 <(2) the projected average interest yield to be earned
2-56 on funds invested by the treasurer over the life of the note
2-57 issue.>
2-58 SECTION 4. Section 404.124, Government Code, is amended to
2-59 read as follows:
2-60 Sec. 404.124. Shortfall Forecast; Committee Approval.
2-61 (a) Before issuing notes the treasurer shall submit to the
2-62 committee a general revenue cash flow shortfall forecast, based on
2-63 the comptroller's most recent <anticipated> revenue estimate. The
2-64 forecast must contain a detailed report of estimated revenues and
2-65 expenditures for each month and each major revenue and expenditure
2-66 category and must demonstrate the maximum general revenue cash flow
2-67 shortfall that may be predicted.
2-68 (b) Based on the forecast the committee may approve the
2-69 issuance of notes and the maximum outstanding balance of notes in
2-70 any fiscal year. The outstanding balance may not exceed the
3-1 maximum temporary cash shortfall forecast by the treasurer for any
3-2 period in the fiscal year. The treasurer may not issue notes in
3-3 excess of the amount approved <amount of notes that may be issued
3-4 and determine whether the notes shall be sold on a negotiated or
3-5 competitive bid basis. If the committee determines that
3-6 competitive bids are appropriate, the underwriter of any notes
3-7 issued under this section shall be selected by the solicitation of
3-8 sealed bids and an appropriate bid notice shall be published at
3-9 least one time in one or more recognized financial publications of
3-10 general circulation published within the state and one or more
3-11 recognized financial publications of general circulation published
3-12 outside the state. Unless all bids are rejected, the underwriter
3-13 shall be selected from the bids received>.
3-14 (c) The committee may determine whether the notes shall be
3-15 sold on a negotiated or competitive bid basis. If the committee
3-16 determines that competitive bids are appropriate, the underwriter
3-17 of any notes issued under this section shall be selected by the
3-18 solicitation of sealed bids and an appropriate bid notice shall be
3-19 published at least one time in one or more recognized financial
3-20 publications of general circulation published within the state and
3-21 one or more recognized financial publications of general
3-22 circulation published outside the state. Unless all bids are
3-23 rejected, the underwriter shall be selected from the bids received.
3-24 The treasurer may not sell the notes in a manner not approved <not
3-25 approve the issuance of notes in excess of the amount reasonably
3-26 necessary to meet the temporary cash shortfall. The treasurer may
3-27 not issue notes in excess of the amount approved or sell the notes
3-28 in a manner not approved>.
3-29 SECTION 5. This Act takes effect September 1, 1995.
3-30 SECTION 6. The importance of this legislation and the
3-31 crowded condition of the calendars in both houses create an
3-32 emergency and an imperative public necessity that the
3-33 constitutional rule requiring bills to be read on three several
3-34 days in each house be suspended, and this rule is hereby suspended.
3-35 * * * * *