MMA H.B. 1043 75(R)BILL ANALYSIS HIGHER EDUCATION H.B. 1043 By: Bailey 4-30-97 Committee Report (Unamended) BACKGROUND Under Chapter 53, Education Code, a higher education facilities corporation created by a sponsoring local government may issue bonds to provide facilities for an institution of higher education. Because such bonds may be issued as tax-exempt, private universities and colleges have borrowed through such corporations to achieve lower borrowing costs and interest rates. The existing Section 53.48, Education Code, also allows higher education facilities corporations to issue such bonds for certain primary and secondary schools which are military related and located in specific types of counties. Bonds issued by higher education facilities corporations are payable solely from revenues received from the borrowing university or college, and are not the debts of the State of Texas or any political subdivision of the state. PURPOSE H.B. 1043 would expand the types of property or revenues which may be pledged to pay bonds issued and authorizes issuance of bonds by higher education facilities corporation to benefit primary and secondary schools. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 53.02, Education Code, by adding Subdivision (12) to define "accredited primary or secondary school." SECTION 2. Amends Section 53.34(b), Education Code, by adding language which allows a school greater freedom in determining the source of payment and securing bonds when borrowing under this section. The change would allow schools to pledge gross or net revenues or assets. SECTION 3. Amends Section 53.48, Education Code, to read as follows: Sec. 53.48 BONDS FOR ACCREDITED PRIMARY OR SECONDARY SCHOOLS. Authorizes higher education facilities corporations to issue bonds and loan the proceeds to primary and secondary schools in the same manner that the corporations may currently loan bond proceeds to accredited universities or colleges. Deletes language relating to military related primary or secondary schools. SECTION 4. Provides that the amendments to Section 53.48 does not affect the validity of bonds issued pursuant to the section prior to its amendment. SECTION 5. Emergency clause.