C.S.H.B. 1295 78(R)    BILL ANALYSIS

C.S.H.B. 1295
By: Hochberg
Public Education
Committee Report (Substituted)


The construction and renovation of school facilities is financed largely
through bonds issued by school districts.  The Permanent School Fund Bond
Guarantee Program allows districts to obtain a lower interest rate on the
bonds, by using the corpus and income of the permanent school fund to
guarantee the bonds.  The guarantee capacity of the fund is limited by
both state law and Internal Revenue Service limits.  Until recently, the
IRS limit was the more restrictive of the two.  However, a possible change
in IRS policy could allow the state to guarantee more bonds.   


Increasing the statutory limit on  the guarantee capacity of the fund to
the possible higher IRS limit would enable the state to help more
districts finance the construction and repair of school facilities.
C.S.H.B. 1295 increases the amount of bonds the Permanent School Fund can


It is the committee's opinion that this bill does not expressly grant any
additional rulemaking authority to a state officer, department, agency, or


C.S.H.B. 1295 amends the Education Code to prohibit the commissioner of
education from approving bonds for guarantee if the approval would result
in the total amount of outstanding guaranteed bonds exceeding an amount
equal to two and one-half times the cost value or market value, whichever
is less, of the permanent school fund as estimated by the board and
certified by the state auditor. 


Upon passage, or, if the Act does not receive the necessary vote, the Act
takes effect September 1, 2003. 


C.S.H.B. 1295 modifies the original by conforming to Texas Legislative
Council style and format.