1-1     By:  Duncan                                           S.B. No. 1091
 1-2           (In the Senate - Filed March 9, 1999; March 11, 1999, read
 1-3     first time and referred to Committee on Education; April 23, 1999,
 1-4     reported favorably by the following vote:  Yeas 6, Nays 0;
 1-5     April 23, 1999, sent to printer.)
 1-6                            A BILL TO BE ENTITLED
 1-7                                   AN ACT
 1-8     relating to the issuance and sale of bonds and time warrants by
 1-9     school districts and the issuance of obligations and execution of
1-10     credit agreements by certain school districts and junior college
1-11     districts.
1-12           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-13           SECTION 1.  Section 45.001, Education Code, is amended to
1-14     read as follows:
1-15           Sec. 45.001.  BONDS AND BOND TAXES.  (a)  The governing board
1-16     of an independent school district, including the  city council or
1-17     commission that has jurisdiction over a municipally controlled
1-18     independent school district, the governing board of a rural high
1-19     school district, and the commissioners court of a county, on behalf
1-20     of each common school district under its jurisdiction, may:
1-21                 (1)  issue negotiable coupon bonds for:
1-22                       (A)  the construction, acquisition, and equipment
1-23     of school buildings in the district;
1-24                       (B)  the acquisition of property or the
1-25     refinancing of property financed under a contract entered under
1-26     Subchapter A, Chapter 271, Local Government Code, regardless of
1-27     whether payment obligations under the contract are due in the
1-28     current year or a future year; and
1-29                       (C)  the purchase of the necessary sites for
1-30     school buildings;[,] and
1-31                 (2)  may levy, pledge, assess, and collect annual ad
1-32     valorem taxes sufficient to pay the principal of and interest on
1-33     the bonds as the principal and interest become due, subject to
1-34     Section 45.003.
1-35           (b)  The bonds must mature serially or otherwise not more
1-36     than 40 years from their date.  The bonds may be made redeemable
1-37     before maturity.
1-38           (c)  Bonds may be sold at public or private sale as
1-39     determined by the governing board of the district [All bonds must
1-40     be sold to the highest bidder for not less than their par value and
1-41     accrued interest].
1-42           SECTION 2.  Subchapter A, Chapter 45, Education Code, is
1-43     amended by adding Section 45.0011 to read as follows:
1-44           Sec. 45.0011.  CREDIT AGREEMENTS IN CERTAIN SCHOOL DISTRICTS.
1-45     (a)  This section applies only to an independent school district
1-46     that, at the time of the issuance of obligations and execution of
1-47     credit agreements under this section, has:
1-48                 (1)  at least 2,000 students in average daily
1-49     attendance, as determined under Section 42.005; or
1-50                 (2)  a combined aggregate principal amount of at least
1-51     $50 million of outstanding bonds and voted but unissued bonds.
1-52           (b)  A district to which this section applies may, in the
1-53     issuance of bonds as provided by Sections 45.001 and 45.003(b)(1),
1-54     exercise the powers granted to the governing body of an issuer with
1-55     regard to the issuance of obligations and execution of credit
1-56     agreements under Chapter 656, Acts of the 68th Legislature, Regular
1-57     Session, 1983 (Article 717q, Vernon's Texas Civil Statutes).
1-58           (c)  A proposition to issue bonds to which this section
1-59     applies must, in addition to meeting the requirements of Section
1-60     45.003(b)(1), include the question of whether the governing board
1-61     or commissioners court may levy, pledge, assess, and collect annual
1-62     ad valorem taxes, on all taxable property in the district,
1-63     sufficient, without limit as to rate or amount, to pay the
1-64     principal of and interest on the bonds and the costs of any credit
 2-1     agreements executed in connection with the bonds.
 2-2           (d)  Section 6, Chapter 656, Acts of the 68th Legislature,
 2-3     Regular Session, 1983 (Article 717q, Vernon's Texas Civil
 2-4     Statutes), governs approval by the attorney general of obligations
 2-5     issued under the authority of this section.
 2-6           SECTION 3.  Subsections (a) and (b), Section 45.103,
 2-7     Education Code, are amended to read as follows:
 2-8           (a)  Any school district in need of funds to construct,
 2-9     repair, or renovate school buildings, purchase school buildings and
2-10     school equipment, or equip school properties with necessary
2-11     heating, water, sanitation, lunchroom, or electric facilities or in
2-12     need of funds with which to employ a person who has special skill
2-13     and experience to compile taxation data and that is financially
2-14     unable out of available funds to construct, repair, renovate, or
2-15     [make the repairs or renovations of school buildings,] purchase
2-16     school buildings, purchase school equipment, or equip school
2-17     properties with necessary heating, water, sanitation, lunchroom, or
2-18     electric facilities or is unable to pay the person for compiling
2-19     taxation data, may, subject to this section, issue interest-bearing
2-20     time warrants, in amounts sufficient to construct, [make the]
2-21     purchase, equip, or improve school buildings and facilities
2-22     [improvements] or to pay all or part of the compensation of the
2-23     person to compile taxation data, any law to the contrary
2-24     notwithstanding.  The warrants shall mature in serial installments
2-25     of not more than five years from their date of issue.  The warrants
2-26     on maturity may be payable out of any available funds of the school
2-27     district in the order of their maturity dates.  Any
2-28     interest-bearing time warrants may be issued and sold by the
2-29     district for not less than their face value, and the proceeds used
2-30     to provide funds required for the purpose for which they are
2-31     issued.  The warrants shall be entitled to first payment out of any
2-32     available funds of the district as they become due.  Included in
2-33     the purposes for which interest-bearing time warrants may be issued
2-34     is the payment of any amounts owed by the school district that was
2-35     incurred in carrying out any of those purposes.
2-36           (b)  Interest-bearing time warrants may not be issued or sold
2-37     by a common school district or rural high school district until
2-38     they are approved by the county board of school trustees.  The
2-39     board shall, on application of the school district, inquire into
2-40     the financial conditions and needs of the district, and may not
2-41     approve the issuance of interest-bearing time warrants unless in
2-42     its opinion the district:
2-43                 (1)  is in need of constructing, purchasing, repairing,
2-44     or renovating a school building, obtaining the school equipment, or
2-45     equipping school properties with necessary heating, water,
2-46     sanitation, lunchroom, or electric facilities; and
2-47                 (2)  will be able with the resources in prospect to
2-48     liquidate the warrants at their maturity.
2-49           SECTION 4.  Subchapter G, Chapter 130, Education Code, is
2-50     amended by adding Section 130.1221 to read as follows:
2-51           Sec. 130.1221.  CREDIT AGREEMENTS IN CERTAIN JUNIOR COLLEGE
2-52     DISTRICTS.  (a)  This section applies only to a junior college
2-53     district that, at the time of the issuance of obligations and
2-54     execution of credit agreements under this section, has:
2-55                 (1)  at least 2,000 full-time students or the
2-56     equivalent; or
2-57                 (2)  a combined aggregate principal amount of at least
2-58     $50 million of outstanding bonds and voted but unissued bonds.
2-59           (b)  A district to which this section applies may, in the
2-60     issuance of bonds as provided by Section 130.122, exercise the
2-61     powers granted to the governing body of an issuer with regard to
2-62     the issuance of obligations and execution of credit agreements
2-63     under Chapter 656, Acts of the 68th Legislature, Regular Session,
2-64     1983 (Article 717q, Vernon's Texas Civil Statutes).
2-65           (c)  A proposition to issue bonds to which this section
2-66     applies must include the question of whether the governing board
2-67     may levy, pledge, assess, and collect annual ad valorem taxes
2-68     sufficient to pay the principal of and interest on the bonds and
2-69     the costs of any credit agreements executed in connection with the
 3-1     bonds.
 3-2           (d)  Section 6, Chapter 656, Acts of the 68th Legislature,
 3-3     Regular Session, 1983 (Article 717q, Vernon's Texas Civil
 3-4     Statutes), governs approval by the attorney general of obligations
 3-5     issued under the authority of this section.
 3-6           SECTION 5.  The importance of this legislation and the
 3-7     crowded condition of the calendars in both houses create an
 3-8     emergency and an imperative public necessity that the
 3-9     constitutional rule requiring bills to be read on three several
3-10     days in each house be suspended, and this rule is hereby suspended,
3-11     and that this Act take effect and be in force from and after its
3-12     passage, and it is so enacted.
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