HBA-NRS CCH H.B. 934 77(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 934
By: Solis, Jim
Public Education
4/9/2001
Introduced



BACKGROUND AND PURPOSE 

Current law allows school districts with eligible bonds to receive state
assistance for making debt service payments available through a guaranteed
yield formula with certain limitations. Certain school districts that
qualified for Tier II monies under the Foundation School Program to pay for
these bonds did not have to levy a tax in the 1998-1999 school year.
Because the tax rate of the district does not imply the use of funds for
debt service, the ceiling rate for Tier II was reset as directed by
legislation last session to a level that allows the district to raise the
same funds for maintenance and operations as under the old law. This
calculation effectively treats the debt service use of Tier II funds as a
maintenance expense, thereby letting the district's revenue stream support
the continued payment of debt service without a separate debt tax. House
Bill 934 provides that school bonds are eligible to be paid with state and
local funds if the district made payments on the bonds during the 1998-1999
school year. 

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. 

ANALYSIS

House Bill 934 amends the Education Code to provide that school bonds are
eligible to be paid with state and local funds if: 

 _the district made payments on the bonds during the 1998-1999 school year,
or taxes levied to pay the principal of and interest on the bonds were
included in the district's audited debt service collections for that school
year, rather than only for the 1998-1999 school year; and 
 
 _the district does not receive state assistance for payment of the
principal and interest on the bonds under the instructional facilities
allotment. 

EFFECTIVE DATE

September 1, 2001.