SRC-JJJ S.B. 1091 76(R)BILL ANALYSIS


Senate Research CenterS.B. 1091
By: Duncan
Education
7/27/1999
Enrolled


DIGEST 

Currently, at least ten school and college districts have adjustable rate
tax bonds outstanding for a small portion of their total debt.  Districts
currently lack statutory authority to enter into lines or letters of credit
with liquidity providers and instead must utilize stand-by bond purchase
agreements for liquidity on their outstanding variable rate bonds.  S.B.
1091 will establish provisions regarding the issuance and sale of bonds and
time warrants by school districts and the issuance of obligations and
execution of credit agreements by school districts and junior college
districts.  

PURPOSE

As enrolled, S.B. 1091 establishes provisions regarding the issuance and
sale of bonds and time warrants by school districts and the issuance of
obligations and execution of credit agreements by school districts and
junior college districts. 

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 45.001, Education Code, to authorize certain
school districts and entities to issue negotiable coupon bonds for the
acquisition of school buildings in the district; and the acquisition of
property regardless of whether payment obligations under the contract 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 text requiring all bonds to be sold to the highest
bidder.  Makes conforming changes. 

SECTION 2.  Amends Chapter 45A, Education Code, by adding Section 45.0011,
as follows: 

Sec. 45.001.  CREDIT AGREEMENTS IN CERTAIN SCHOOL DISTRICTS.  Provides that
this section applies only to an independent school district that fulfills
certain conditions at the time of the issuance of obligations and execution
of credit agreements.  Authorizes a district, in the issuance of bonds, to
exercise the powers granted to the governing body of an issuer with regard
to the issuance of obligations and execution of certain credit agreements.
Requires a proposition to issue bonds to which this section applies to
include the question of whether the governing board or commissioners court
may levy, pledge, assess, and collect annual ad valorem  taxes on all
taxable property sufficient to pay the principal of and interest on the
bonds and costs of any credit agreement.  Requires a proposition to issue
bonds to include the question of whether the governing board or
commissioners court may 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 and interest on the bonds and
the costs of any credit agreements executed in connection with the bonds.
Prohibits a district from issuing bonds to which this section applies in
certain amount.  Provides that the average daily attendance is determined
in the manner provided by Section 42.005. Provides that 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 provide
that any school  district in need of funds to construct, purchase, equip,
or improve school buildings and facilities, and that is financially unable
out of available funds to do so, the school district may issue
interest-bearing time warrants, in amounts sufficient to construct,
purchase, equip, or improve school buildings and facilities, or pay certain
compensation.  Deletes text regarding the making of repairs or renovations,
and improvements. Makes conforming changes. 

SECTION 4.  Amends Chapter 130G, Education Code, by adding Section
130.1221, as follows: 

Sec. 130.1221.  CREDIT AGREEMENTS IN CERTAIN JUNIOR COLLEGE DISTRICTS.
Provides that this section applies only to a junior college district that
fulfills certain conditions at the time of the issuance of obligations and
execution of credit agreements. Authorizes a district, in the issuance of
bonds, to exercise the powers granted to the governing body of an issuer
with regard to the issuance of obligations and execution of credit
agreements.  Requires a proposition to issue bonds to include the question
of whether the governing board may 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.   Prohibits a district from issuing bonds to which this section
applies in certain amounts.  Provides that 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.