By Truitt, Sadler, Grusendorf, Brimer,                H.B. No. 2888
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to limitations on the issuance of tax-supported bonds by
 1-3     school districts.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1. Subchapter A, Chapter 45, Education Code, is
 1-6     amended by adding Section 45.0031 to read as follows:
 1-7           Sec. 45.0031.  LIMITATION ON ISSUANCE OF TAX-SUPPORTED BONDS.
 1-8     (a)  Before issuing bonds described by Section 45.001, a school
 1-9     district must demonstrate to the attorney general under Subsection
1-10     (b) or (c) that, with respect to the proposed issuance, the
1-11     district has a projected ability to pay the principal of and
1-12     interest on the proposed bonds and all previously issued bonds
1-13     other than bonds authorized to be issued at an election held on or
1-14     before April 1, 1991, and issued before September 1, 1992, from a
1-15     tax at a rate not to exceed $0.50 per $100 of valuation.
1-16           (b)  A district may demonstrate the ability to comply with
1-17     Subsection (a)  by using the most recent taxable value of property
1-18     in the district, combined with state assistance to which the
1-19     district is entitled under Chapter 42 or 46 that may be lawfully
1-20     used for the payment of bonds.
1-21           (c)  A district may demonstrate the ability to comply with
1-22     Subsection (a)  by using a projected future taxable value of
1-23     property in the district anticipated for the earlier of the tax
1-24     year five years after the current tax year or the tax year in which
1-25     the final payment is due for the bonds submitted to the attorney
 2-1     general, combined with state assistance to which the district is
 2-2     entitled under Chapter 42 or 46 that may be lawfully used for the
 2-3     payment of bonds.  The district must submit to the attorney general
 2-4     a certification of the district's projected taxable value of
 2-5     property that is prepared by a registered professional appraiser
 2-6     certified under The Property Taxation Professional Certification
 2-7     Act (Article 8885, Revised Statutes) who has demonstrated
 2-8     professional experience in projecting taxable values of property or
 2-9     who can by contract obtain any necessary assistance from a person
2-10     who has that experience. To demonstrate the professional experience
2-11     required by this subsection, a registered professional appraiser
2-12     must provide to the district written documentation relating to two
2-13     previous projects for which the appraiser projected taxable values
2-14     of property.  Until the bonds submitted to the attorney general are
2-15     approved or disapproved, the district must maintain the
2-16     documentation and on request provide the documentation to the
2-17     attorney general or comptroller. The certification of the
2-18     district's projected taxable value of property must be signed by
2-19     the district's superintendent.  The attorney general must base a
2-20     determination of whether the district has complied with Subsection
2-21     (a)  on a taxable value of property that is equal to 90 percent of
2-22     the value certified under this subsection.
2-23           (d)  A district that demonstrates to the attorney general
2-24     that the district's ability to comply with Subsection (a)  is
2-25     contingent on receiving state assistance may not adopt a tax rate
2-26     for a year for purposes of paying the principal of and interest on
2-27     the bonds unless the district credits to the account of the
 3-1     interest and sinking fund of the bonds the amount of state
 3-2     assistance equal to the amount needed to demonstrate compliance and
 3-3     received or to be received in that year.
 3-4           (e)  If a district demonstrates to the attorney general the
 3-5     district's ability to comply with Subsection (a)  using a projected
 3-6     future taxable value of property under Subsection (c) and
 3-7     subsequently imposes a tax to pay the principal of and interest on
 3-8     bonds to which Subsection (a) applies at a rate that exceeds the
 3-9     limit imposed by Subsection (a), the attorney general may not
3-10     approve a subsequent issuance of bonds unless the attorney general
3-11     finds that the district has a projected ability to pay the
3-12     principal of and interest on the proposed bonds and all previously
3-13     issued bonds to which Subsection (a)  applies from a tax at a rate
3-14     not to exceed $0.45 per $100 of valuation.
3-15           SECTION 2.  Section 45.003(e), Education Code, is repealed.
3-16           SECTION 3. Section 45.0031, Education Code, as added by this
3-17     Act, applies only to school district bonds submitted to the
3-18     attorney general for approval on or after the effective date of
3-19     this Act.  Bonds submitted to the attorney general for approval
3-20     before the effective date of this Act are governed by the law in
3-21     effect on the date the bonds are submitted for approval, and the
3-22     former law is continued in effect for that purpose.
3-23           SECTION 4. This Act takes effect immediately if it receives a
3-24     vote of two-thirds of all the members elected to each house, as
3-25     provided by Section 39, Article III, Texas Constitution.  If this
3-26     Act does not receive the vote necessary for immediate effect, this
3-27     Act takes effect September 1, 2001.