HBA-MPM S.B. 1091 76(R) BILL ANALYSIS Office of House Bill AnalysisS.B. 1091 By: Duncan Public Education 5/18/1999 Engrossed BACKGROUND AND PURPOSE Current law authorizes the governing board of an independent school district or rural high school, and the commissioners court of a county, to issue negotiable coupon bonds for the construction and equipping of school buildings. S.B. 1091 extends that authorization to the acquisition of school buildings or property and the refinancing of property financed under the Public Property Finance Act. This bill also provides that certain independent school districts and junior college districts must consider, when issuing such bonds, whether the governing board may assess taxes sufficient to pay the principal of and interest on the bonds and costs of any credit agreements executed in connection with the bonds. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 45.001, Education Code, as follows: Sec. 45.001. BONDS AND BOND TAXES. (a) Authorizes the governing board of an independent school district or rural high school, and the commissioners court of a county, to issue negotiable coupon bonds to acquire school buildings in the district, and to acquire or refinance property financed under Subchapter A (Public Property Finance Act), Chapter 271, Local Government Code, regardless of whether payment obligations are due in the current year or a future year. Authorizes bonds to be sold at public or private sale as determined by the governing board of the district. Deletes the provision that all bonds must be sold to the highest bidder for no less than their par value and accrued interest. Makes conforming changes. SECTION 2. Amends Subchapter A, Chapter 45, Education Code, by adding Section 45.0011, as follows: Sec. 45.0011. CREDIT AGREEMENTS IN CERTAIN SCHOOL DISTRICTS. (a) Makes this section applicable only to an independent school district that, at the time of the issuance of obligations and execution of credit agreements under this section, has at least 2,000 students in average daily attendance or a combined aggregate principal of at least $50 million in outstanding bonds and voted but unissued bonds. (b) Authorizes a district, when issuing bonds as provided by Sections 45.001 (Bonds and Bond Taxes) and 45.003(b)(1) (Bond and Tax Elections), Education Code, to exercise the powers granted to the governing body of an issuer with regard to issuance of obligations and execution of credit agreements under Article 717q, V.T.C.S., which relates to the issuance of short term obligations for a public utility. (c) Provides that a proposition to issue bonds to which this section applies, in addition to meeting specific requirements, must include the question of whether the governing board or commissioners court is authorized to levy, pledge, assess, and collect annual ad valorem taxes on all taxable property in the district, sufficient, without limit as to rate or amount, to pay the principal of the interest on the bonds and the costs of any credit agreements executed in connection with the bonds. (d) Prohibits a district from issuing bonds applicable to this section in an amount greater than the greater of 25 percent of the sum of certain aggregate principals; $25 million, in a district with a student population of 3,500 to 15,000 in average daily attendance; and $50 million, in a district with a student population of more than 15,000. (e) Provides that in this section, average daily attendance is determined in the manner provided by Section 42.005 (Average Daily Attendance), Education Code. (f) Provides that Section 6 (Execution of Credit Agreements; Contracts Providing Revenues or Security to Pay Obligations; Review and Approval by Attorney General), Article 717q, V.T.C.S., governs approval by the attorney general of obligations issued under the authority of this section. SECTION 3. Amends Sections 45.103(a) and (b), Education Code, to authorize a school district in need of funds to construct, in addition to repair, renovate, or purchase school buildings and purchase school equipment, or equip school properties with certain facilities or one that is in need of funds with which to employ a person with special skill and experience to compile taxation data and that is financially unable out of available funds to construct, repair, renovate, or purchase school buildings or equipment, or equip school properties with certain facilities or is unable to pay the person for compiling taxation data, subject to this section, to issue interest-bearing time warrants, in amounts sufficient to construct, purchase, equip, or improve school buildings and facilities or to pay all or part of the compensation of the person to compile taxation data, any law to the contrary notwithstanding. Makes conforming changes. SECTION 4. Amends Subchapter G, Chapter 130, Education Code, by adding Section 130.1221, as follows: Sec. 130.1221. CREDIT AGREEMENTS IN CERTAIN JUNIOR COLLEGE DISTRICTS. (a) Makes this section applicable only to a junior college district that, at the time of issuance of obligations and execution of credit agreements under this section has at least 2,000 fulltime students or the equivalent; or a combined aggregate principal amount of at least $50 million of outstanding bonds and voted but unissued bonds. (b) Authorizes a district to which this section applies, when issuing bonds as provided by Section 130.122 (Tax Bonds and Maintenance Tax), Education Code, to exercise the powers granted to the governing body of an issuer with regard to the issuance of obligations and execution of credit agreements under Article 717q, V.T.C.S. (c) Provides that a proposition to issue bonds under this section must include the question of whether the governing board is authorized to levy, pledge, assess, and collect annual ad valorem taxes sufficient to pay the principal of and interest on the bonds and the costs of any credit agreements executed in connection with the bonds. (d) Prohibits a district from issuing bonds to which this section applies in an amount greater than the greater of 25 percent of the sum of certain aggregate principals; $25 million, in a district with a full-time student population from 3,500 to 15,000 or the equivalent; or $50 million, in a district with a full-time student population of more than 15,000 or the equivalent. (e) Provides that Section 6 (Execution of Credit Agreements; Contracts Providing Revenues or Security to Pay Obligations; Review and Approval by Attorney General), Article 717q, V.T.C.S., governs approval by the attorney general of obligations issued under the authority of this section. SECTION 5. Emergency clause. Effective date: upon passage.