SRC-CTC H.B. 2888 77(R)   BILL ANALYSIS


Senate Research Center   H.B. 2888
By: Truitt (Shapiro)
Education
5/4/2001
Engrossed


DIGEST AND PURPOSE 

Although there are approximately 1,000 school districts in the state of
Texas, most of the growth in student enrollment in the last five years has
occurred in approximately 10 percent of the state's school districts. Most
fast-growth school districts finance the expansion of their facilities
through voted bond issues.  Current law provides that the interest and
sinking fund (I&S) tax rate for all bonds that a school district issues
after September 1, 1992, must not exceed fifty cents per $100 of valuation.
This "fifty cent test," based on current property values, has limited the
ability of some fast-growth school districts to expand their facilities.
H.B. 2888 authorizes a district to demonstrate the ability to pay bonds
using the most recent property values or projected future property values. 

RULEMAKING AUTHORITY

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

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Chapter 45A, Education Code, by adding Section 45.0031,
as follows: 

Sec. 45.0031.  LIMITATION ON ISSUANCE OF TAX-SUPPORTED BONDS.  (a) Requires
a school district (district), before issuing bonds described by Section
45.001, to demonstrate certain capabilities to the attorney general under
Subsection (b) or (c). 

(b) Sets forth the manner in which a district is authorized to demonstrate
its ability to comply with Subsection (a). 

(c) Sets forth the manner in which a district is authorized to demonstrate
its ability to comply with Subsection (a). 

(d) Prohibits a district that demonstrates to the attorney general that the
district's ability to comply with Subsection (a) is contingent on receiving
state assistance from adopting a tax rate for a year for purposes of paying
the principle of and interest on the bonds unless the district credits to
the account of the interest and sinking fund of the bonds the amount of
state assistance equal to the amount needed to demonstrate compliance and
received or to be received in that year. 

(e) Prohibits the attorney general, if a district demonstrates its ability
to comply with Subsection (a) using a projected future taxable property
value under Subsection (c) and subsequently imposes a tax to pay the
principal of and interest on bonds to which Subsection (a) applies at a
rate that exceeds the limit imposed by Subsection (a), from approving a
subsequent issuance of bonds unless certain conditions are met. 

SECTION 2. Repealer: Section 45.003(e), Education Code.

 SECTION 3.  Makes application of Section 45.0031, Education Code, as added
by this Act, prospective. 

SECTION 4.  Effective date: upon passage or September 1, 2001.