1-1 By: Truitt, et al. (Senate Sponsor - Shapiro) H.B. No. 2888 1-2 (In the Senate - Received from the House May 3, 2001; 1-3 May 4, 2001, read first time and referred to Committee on 1-4 Education; May 8, 2001, reported favorably by the following vote: 1-5 Yeas 7, Nays 0; May 8, 2001, sent to printer.) 1-6 A BILL TO BE ENTITLED 1-7 AN ACT 1-8 relating to limitations on the issuance of tax-supported bonds by 1-9 school districts. 1-10 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-11 SECTION 1. Subchapter A, Chapter 45, Education Code, is 1-12 amended by adding Section 45.0031 to read as follows: 1-13 Sec. 45.0031. LIMITATION ON ISSUANCE OF TAX-SUPPORTED BONDS. 1-14 (a) Before issuing bonds described by Section 45.001, a school 1-15 district must demonstrate to the attorney general under Subsection 1-16 (b) or (c) that, with respect to the proposed issuance, the 1-17 district has a projected ability to pay the principal of and 1-18 interest on the proposed bonds and all previously issued bonds 1-19 other than bonds authorized to be issued at an election held on or 1-20 before April 1, 1991, and issued before September 1, 1992, from a 1-21 tax at a rate not to exceed $0.50 per $100 of valuation. 1-22 (b) A district may demonstrate the ability to comply with 1-23 Subsection (a) by using the most recent taxable value of property 1-24 in the district, combined with state assistance to which the 1-25 district is entitled under Chapter 42 or 46 that may be lawfully 1-26 used for the payment of bonds. 1-27 (c) A district may demonstrate the ability to comply with 1-28 Subsection (a) by using a projected future taxable value of 1-29 property in the district anticipated for the earlier of the tax 1-30 year five years after the current tax year or the tax year in which 1-31 the final payment is due for the bonds submitted to the attorney 1-32 general, combined with state assistance to which the district is 1-33 entitled under Chapter 42 or 46 that may be lawfully used for the 1-34 payment of bonds. The district must submit to the attorney general 1-35 a certification of the district's projected taxable value of 1-36 property that is prepared by a registered professional appraiser 1-37 certified under The Property Taxation Professional Certification 1-38 Act (Article 8885, Revised Statutes) who has demonstrated 1-39 professional experience in projecting taxable values of property or 1-40 who can by contract obtain any necessary assistance from a person 1-41 who has that experience. To demonstrate the professional experience 1-42 required by this subsection, a registered professional appraiser 1-43 must provide to the district written documentation relating to two 1-44 previous projects for which the appraiser projected taxable values 1-45 of property. Until the bonds submitted to the attorney general are 1-46 approved or disapproved, the district must maintain the 1-47 documentation and on request provide the documentation to the 1-48 attorney general or comptroller. The certification of the 1-49 district's projected taxable value of property must be signed by 1-50 the district's superintendent. The attorney general must base a 1-51 determination of whether the district has complied with Subsection 1-52 (a) on a taxable value of property that is equal to 90 percent of 1-53 the value certified under this subsection. 1-54 (d) A district that demonstrates to the attorney general 1-55 that the district's ability to comply with Subsection (a) is 1-56 contingent on receiving state assistance may not adopt a tax rate 1-57 for a year for purposes of paying the principal of and interest on 1-58 the bonds unless the district credits to the account of the 1-59 interest and sinking fund of the bonds the amount of state 1-60 assistance equal to the amount needed to demonstrate compliance and 1-61 received or to be received in that year. 1-62 (e) If a district demonstrates to the attorney general the 1-63 district's ability to comply with Subsection (a) using a projected 1-64 future taxable value of property under Subsection (c) and 2-1 subsequently imposes a tax to pay the principal of and interest on 2-2 bonds to which Subsection (a) applies at a rate that exceeds the 2-3 limit imposed by Subsection (a), the attorney general may not 2-4 approve a subsequent issuance of bonds unless the attorney general 2-5 finds that the district has a projected ability to pay the 2-6 principal of and interest on the proposed bonds and all previously 2-7 issued bonds to which Subsection (a) applies from a tax at a rate 2-8 not to exceed $0.45 per $100 of valuation. 2-9 SECTION 2. Section 45.003(e), Education Code, is repealed. 2-10 SECTION 3. Section 45.0031, Education Code, as added by this 2-11 Act, applies only to school district bonds submitted to the 2-12 attorney general for approval on or after the effective date of 2-13 this Act. Bonds submitted to the attorney general for approval 2-14 before the effective date of this Act are governed by the law in 2-15 effect on the date the bonds are submitted for approval, and the 2-16 former law is continued in effect for that purpose. 2-17 SECTION 4. This Act takes effect immediately if it receives a 2-18 vote of two-thirds of all the members elected to each house, as 2-19 provided by Section 39, Article III, Texas Constitution. If this 2-20 Act does not receive the vote necessary for immediate effect, this 2-21 Act takes effect September 1, 2001. 2-22 * * * * *