By:  Cain                                             S.B. No. 1729
         Line and page numbers may not match official copy.
         Bill not drafted by TLC or Senate E&E.
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to uses of the guaranteed yield component of the
 1-3     Foundation School Program, treatment of lease payments under the
 1-4     Public Property Finance Act, payment of lease contracts under the
 1-5     Local Government Code and the Education Code, and the permanent
 1-6     school fund guarantee under the Education Code.
 1-7           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-8           SECTION 1.  Section 42.301, Education Code is amended to read
 1-9     as follows:
1-10           Sec. 42.301.  PURPOSE.  The purpose of the guaranteed yield
1-11     component of the Foundation School Program is to provide each
1-12     school district with the opportunity to provide the basic program
1-13     and to supplement that program at a level of its own choice and
1-14     with access to additional funds for facilities.  An allotment under
1-15     this subchapter may be used for any legal purpose including [other
1-16     than] capital outlay and [or] debt service.  A school district may
1-17     not receive an allotment under this chapter for any tax effort that
1-18     receives an allotment under Chapter 46 of this code.
1-19           SECTION 2.  Section 45.001, Education Code, is amended by
1-20     adding a new Subsection (d) to read as follows:
1-21           (d)  The governing board of an independent school district,
1-22     including the city council or commission that has jurisdiction over
1-23     a municipally controlled independent school district, the governing
 2-1     board of a rural high school district, and the commissioners court
 2-2     of a county, on behalf of each common school district under its
 2-3     jurisdiction, may levy, pledge, assess, and collect annual ad
 2-4     valorem taxes sufficient to pay for the acquisition of or financing
 2-5     of the construction, acquisition and equipment of school buildings
 2-6     in the district, including the purchase of necessary sites for the
 2-7     school buildings, financed under a contract entered under
 2-8     Subchapter A, Chapter 271, Local Government Code, subject to
 2-9     Section 45.003 of this chapter.
2-10           SECTION 3.  Section 45.003, Education Code, is amended by
2-11     adding a new Subsection (f) to read as follows:
2-12           (f)  A proposition submitted to authorize the payment of
2-13     obligation for the acquisition or financing of school buildings
2-14     under Section 45.001(d) may be submitted at any time prior to or
2-15     during the contract and must include the question of whether the
2-16     governing board or commissioners court may levy, pledge, assess,
2-17     and collect annual ad valorem taxes, on all taxable property in the
2-18     district, either:
2-19                 (1)  sufficient, without limit as to rate or amount, to
2-20     pay the obligations of the contract; or
2-21                 (2)  sufficient to pay the obligations of the contract,
2-22     provided that the annual aggregate bond taxes in the district may
2-23     never be more than the rate stated in the proposition.
2-24           SECTION 4.  Section 45.052, Texas Education Code, is amended
2-25     to read as follows:
2-26           Sec. 45.052.  On approval by the commissioner, bonds issued
 3-1     under Subchapter A, including refunding bonds, or bonds or other
 3-2     evidence of indebtedness issued under Sections 45.103, 45.104 or
 3-3     45.108, or obligations to pay under lease-purchase agreements
 3-4     entered into under Sec. 271.004, Local Government Code, are
 3-5     guaranteed by the corpus of and income of the permanent school
 3-6     fund.
 3-7           SECTION 5.  Section 271.004(e), Local Governmental Code, is
 3-8     amended to read as follows:
 3-9           Section 271.004(e).  If the contract provides that payments
3-10     by the school district are to be made from maintenance taxes
3-11     previously approved by the voters of the school district and are
3-12     subject to annual appropriation or are paid from a source other
3-13     than ad valorem taxes, the payments under [the contract shall not
3-14     be considered payment of indebtedness under Section 26.04(c), Tax
3-15     Code] must be treated as debt as defined in Section 26.012(7), Tax
3-16     Code.
3-17           SECTION 6.  This Act takes effect immediately if it receives
3-18     a vote of two-thirds of all members elected to each house, as
3-19     provided by Section 39, Article III, Texas Constitution.  If this
3-20     Act does not receive the votes necessary for immediate effect, this
3-21     Act takes effect September 1, 2001.