1-1     By:  Gallegos                                         S.B. No. 1325
 1-2           (In the Senate - Filed March 11, 1999; March 15, 1999, read
 1-3     first time and referred to Committee on Education; May 7, 1999,
 1-4     reported adversely, with favorable Committee Substitute by the
 1-5     following vote:  Yeas 7, Nays 0; May 7, 1999, sent to printer.)
 1-6     COMMITTEE SUBSTITUTE FOR S.B. No. 1325               By:  Zaffirini
 1-7                            A BILL TO BE ENTITLED
 1-8                                   AN ACT
 1-9     relating to school district purchasing and bonds.
1-10           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-11           SECTION 1.  Section 44.031, Education Code, is amended by
1-12     amending Subsections (f) and (h) and adding Subsection (m) to read
1-13     as follows:
1-14           (f)  This section does not apply to a contract [fees
1-15     received] for professional services rendered, including services of
1-16     an architect, attorney, or fiscal agent.  A school district may, at
1-17     its option, contract for professional services rendered by a
1-18     financial consultant or a technology consultant in the manner
1-19     provided by Section 2254.003, Government Code, in lieu of the
1-20     methods provided by this section [architect's fees, attorney's
1-21     fees, and fees for fiscal agents].
1-22           (h)  If school equipment or all or part of a school facility
1-23     is destroyed, [or] severely damaged, or undergoes a major
1-24     unforeseen operational or structural failure, and the board of
1-25     trustees determines that the delay posed by the contracting methods
1-26     required by this section [competitive bidding process] would
1-27     prevent or substantially impair the conduct of classes or other
1-28     essential school activities, then contracts for the replacement or
1-29     repair of the equipment or all or part of the school facility may
1-30     be made by a method other than the methods [without competitive
1-31     bidding as otherwise] required by this section.
1-32           (m)  If a purchase is made at the campus level in a school
1-33     district with an average daily attendance of 190,000 or more as
1-34     determined under Section 42.005, that has formally adopted a
1-35     site-based decision-making plan under Subchapter F, Chapter 11,
1-36     that delegates purchasing decisions to the campus level, this
1-37     section applies only to the campus and does not require the
1-38     district to aggregate and jointly award purchasing contracts.
1-39           SECTION 2.  Section 44.033, Education Code, is amended by
1-40     adding Subsection (e) to read as follows:
1-41           (e)  If a purchase is made at the campus level in a school
1-42     district with an average daily attendance of 190,000 or more as
1-43     determined under Section 42.005, that has formally adopted a
1-44     site-based decision-making plan under Subchapter F, Chapter 11,
1-45     that delegates purchasing decisions to the campus level, this
1-46     section applies only to the campus and does not require the
1-47     district to aggregate and jointly award purchasing contracts.
1-48           SECTION 3.  Subdivision (1), Section 1, Chapter 656, Acts of
1-49     the 68th Legislature, Regular Session, 1983 (Article 717q, Vernon's
1-50     Texas Civil Statutes), is amended to read as follows:
1-51                 (1)  "Issuer" means (A) any incorporated city operating
1-52     under a home-rule charter adopted pursuant to Article XI, Section
1-53     5, of the Constitution of Texas having a population according to
1-54     the latest federal decennial census of 90,000 or more and having
1-55     outstanding long-term debt secured by the revenues of the public
1-56     utility for which the obligations are being issued which is rated
1-57     by a nationally recognized rating agency for municipal securities
1-58     in one of the four highest rating categories for long-term
1-59     obligations; (B) any conservation and reclamation district created
1-60     and organized as a river authority under and pursuant to Article
1-61     III, Section 52, or Article XVI, Section 59, of the Constitution of
1-62     Texas and by an act of the legislature of the State of Texas; (C)
1-63     any joint powers agency organized and operating pursuant to Chapter
1-64     163, Utilities Code [166, Acts of the 63rd Legislature, Regular
 2-1     Session, 1973 (Article 1435a, Revised Statutes)]; (D) any
 2-2     metropolitan rapid transit authority or regional transportation
 2-3     authority created, organized, and operating pursuant to Chapter 451
 2-4     or 452, Transportation Code [141, Acts of the 63rd Legislature,
 2-5     Regular Session, 1973 (Article 1118x, Revised Statutes) or Chapter
 2-6     683, Acts of the 66th Legislature, Regular Session, 1979 (Article
 2-7     1118y, Revised Statutes)]; (E) any conservation and reclamation
 2-8     district organized or operating as a navigation district under and
 2-9     pursuant to Article III, Section 52, or Article XVI, Section 59, of
2-10     the Constitution of Texas; (F) any district organized or operating
2-11     under and pursuant to Article XVI, Section 59, of the Constitution
2-12     of Texas which has all or part of two or more incorporated cities
2-13     within its boundaries; (G) agencies of the State of Texas
2-14     (including the governing boards of the state institutions of higher
2-15     education); (H) any hospital authority in a county with a
2-16     population of more than 2 million, according to the most recent
2-17     federal census, or any hospital authority in a county that is
2-18     included, in whole or in part, in a standard metropolitan
2-19     statistical area of this state that includes a county with a
2-20     population of more than 1,800,000, that was created or is operating
2-21     under Chapter 262, Health and Safety Code, or Chapter 264, Health
2-22     and Safety Code; (I) any nonprofit corporation organized to
2-23     exercise the powers of a higher education authority under
2-24     Subsection (e), Section 53.47, Education Code; [and] (J) a county
2-25     having a population of 2 million or more according to the most
2-26     recent federal census; and (K) an independent school district that
2-27     has an average daily attendance of 190,000 or more as determined
2-28     under section 42.005, Education Code.
2-29           SECTION 4.  Section 3.028, Article 717s, Revised Statutes, is
2-30     amended by adding Subsection (g) to read as follows:
2-31           (g)  A member of a corporation's board of directors who is
2-32     acting in good faith and in the course and scope of corporate
2-33     duties or functions has the same immunity from liability as state
2-34     law provides to a member of the governing body of the sponsor.
2-35           SECTION 5.  Section 1, Article 717w, Revised Statutes, is
2-36     amended by amending Subdivisions (6) and (7) and adding Subdivision
2-37     (8) to read as follows:
2-38                 (6)  "Eligible school district" means an independent
2-39     school district that has an average daily attendance of 190,000 or
2-40     more as determined under Section 42.005, Education Code.
2-41                 (7)  "Governing body" means the board, council,
2-42     commission, court, or other body or group authorized to issue
2-43     anticipation notes for or on behalf of an issuer.
2-44                 (8) [(7)]  "Issuer" means a municipality, [or] county,
2-45     or eligible school district.
2-46           SECTION 6.  Section 3, Article 717w, Revised Statutes, is
2-47     amended to read as follows:
2-48           Sec. 3.  Purposes for which anticipation notes may be
2-49     authorized.  (a)  The commissioners court of a county, on
2-50     recommendation of the county auditor or budget officer if
2-51     applicable, or the governing body of a municipality may authorize
2-52     anticipation notes to:
2-53                 (1)  pay a contractual obligation incurred or to be
2-54     incurred for the construction of any public work;
2-55                 (2)  pay a contractual obligation incurred or to be
2-56     incurred for the purchase of materials, supplies, equipment,
2-57     machinery, buildings, lands, and rights-of-way for an issuer's
2-58     authorized needs and purposes;
2-59                 (3)  pay a contractual obligation incurred or to be
2-60     incurred for professional services, including services provided by
2-61     tax appraisal engineers, engineers, architects, attorneys,
2-62     mapmakers, auditors, financial advisors, and fiscal agents;
2-63                 (4)  pay operating expenses or current expenses; or
2-64                 (5)  fund the issuer's cumulative cash flow deficit.
2-65           (b)  The governing body of an eligible school district may
2-66     authorize anticipation notes for a purpose described by Subsection
2-67     (a)(2), (3), (4), or (5) of this section.
2-68           SECTION 7.  Subsection (a), Section 4, Article 717w, Revised
2-69     Statutes, is amended to read as follows:
 3-1           (a)  This section applies only to:
 3-2                 (1)  a county; [or]
 3-3                 (2)  a municipality that has a population of 80,000 or
 3-4     more, according to the most recent federal census; or
 3-5                 (3)  an eligible school district.
 3-6           SECTION 8.  Section 5, Article 717w, Revised Statutes, is
 3-7     amended to read as follows:
 3-8           Sec. 5.  Authorization of anticipation notes by ordinance or
 3-9     order. Anticipation notes may be authorized by an ordinance adopted
3-10     by the governing body of a municipality or by an order adopted by
3-11     the governing body of a county or an eligible school district.
3-12           SECTION 9.  Subsections (e), (f), (g), and (h), Article 717w,
3-13     Revised Statutes, are amended to read as follows:
3-14           (e)  Anticipation notes issued for a purpose described by
3-15     Section 3(a)(1), (2), or (3) [Subdivision (1), (2), or (3) of
3-16     Section 3] of this article must mature before the seventh
3-17     anniversary of the date that the attorney general approves the
3-18     notes.
3-19           (f)  Anticipation notes issued for a purpose described in
3-20     Section 3(a)(4) or (5) [Subdivision (4) or (5) of Section 3] of
3-21     this article must mature before the first anniversary of the date
3-22     that the attorney general approves the notes.
3-23           (g)  Anticipation notes issued by a municipality under
3-24     Section 3(a)(4) [Subdivision (4) of Section 3] of this article may
3-25     not exceed 75 percent of the revenues or taxes anticipated to be
3-26     collected in the fiscal year in which the attorney general approves
3-27     the notes.  Anticipation notes issued by a county under Section
3-28     3(a)(4) [Subdivision (4) of Section 3] of this article may not
3-29     exceed 50 percent of the revenues or taxes anticipated to be
3-30     collected in the fiscal year in which the attorney general approves
3-31     the notes.  Anticipation notes issued by an eligible school
3-32     district under Section 3(a)(4) of this article may not exceed 75
3-33     percent of the income of the district for the fiscal year preceding
3-34     the fiscal year in which the attorney general approves the notes.
3-35           (h)  A county must comply with the competitive bidding
3-36     requirements of Subchapter C, Chapter 271, Local Government Code,
3-37     in connection with a contract to be paid from the proceeds of
3-38     anticipation notes issued for a purpose described by Section
3-39     3(a)(1) [3(1)] of this article.
3-40           SECTION 10.  Subsection (f), Section 44.031, Education Code,
3-41     as amended by this Act, applies only to a contract for professional
3-42     services a school district entered into on or after the effective
3-43     date of this Act.  A contract for professional services a school
3-44     district entered into before the effective date of this Act is
3-45     governed by the law in effect on the date the contract was entered
3-46     into, and that law is continued in effect for that purpose.
3-47           SECTION 11.  Subsection (m), Section 44.031, and Subsection
3-48     (e), Section 44.033, Education Code, as added by this Act, apply
3-49     only to a contract a public school enters into on or after the
3-50     effective date of this Act.  A contract a public school entered
3-51     into before the effective date of this Act is governed by the law
3-52     in effect on the date the contract was entered into, and that law
3-53     is continued in effect for that purpose.
3-54           SECTION 12.  Subsection (g), Section 3.028, Article 717s,
3-55     Revised Statutes, as added by this Act, applies to an act or
3-56     omission of a public facility corporation or a director, officer,
3-57     or employee of a public facility corporation regardless of when the
3-58     act was taken or the omission occurred.
3-59           SECTION 13.  This Act takes effect September 1, 1999.
3-60           SECTION 14.  The importance of this legislation and the
3-61     crowded condition of the calendars in both houses create an
3-62     emergency and an imperative public necessity that the
3-63     constitutional rule requiring bills to be read on three several
3-64     days in each house be suspended, and this rule is hereby suspended.
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