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.