78R6556 JSA-F
By: Van de Putte S.B. No. 1139
A BILL TO BE ENTITLED
AN ACT
relating to instructional facilities of a junior college district
and to state financial assistance for junior college instructional
facilities and outstanding bonds.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 130, Education Code, is amended by
adding Subchapter K to read as follows:
SUBCHAPTER K. ASSISTANCE WITH INSTRUCTIONAL FACILITIES
AND PAYMENT OF EXISTING DEBT
Sec. 130.301. DEFINITIONS. In this subchapter:
(1) "Coordinating board" means the Texas Higher
Education Coordinating Board.
(2) "District" means a junior college district.
(3) "Instructional facility" means real property, an
improvement to real property, or a necessary fixture of an
improvement to real property that is used predominantly for
teaching students enrolled in a public junior college.
Sec. 130.302. DETERMINATION OF DISTRICT ENROLLMENT AND
TAXABLE VALUE OF PROPERTY. (a) For purposes of this chapter, the
number of full-time students enrolled in a district is the number of
full-time equivalent students enrolled in the district for the
applicable academic year as determined by the coordinating board.
(b) For purposes of this subchapter, the taxable value of
property for a district is the total taxable value of property in
the district according to the certified appraisal roll for the
district.
Sec. 130.303. RULES. (a) The coordinating board may adopt
rules for the administration of this subchapter.
(b) The coordinating board's rules may limit the amount of
an allotment under this subchapter that is to be used to construct,
acquire, renovate, or improve an instructional facility that may
also be used for noninstructional or extracurricular activities.
Sec. 130.304. INSTRUCTIONAL FACILITIES ALLOTMENT. (a) For
each year, except as provided by Sections 130.306 and 130.307, a
district is guaranteed a specified amount per full-time student in
state and local funds for each cent of tax effort, up to the maximum
rate under Subsection (b), to pay the principal of and interest on
eligible bonds issued to construct, acquire, renovate, or improve
an instructional facility. The amount of state support under this
section is determined by the formula:
FYA = (FYL X FTE X BTR X 100) - (BTR X (DPV/100))
where:
"FYA" is the guaranteed facilities yield amount of state funds
allocated to the district under this section for the year;
"FYL" is the dollar amount guaranteed level of state and local funds
per full-time student enrolled per cent of tax effort, which is $35
or a greater amount for any year provided by appropriation;
"FTE" is the greater of the number of full-time students enrolled in
the district or 400;
"BTR" is the district's bond tax rate for the current year, which is
determined by dividing the amount budgeted by the district for
payment of eligible bonds by the quotient of the district's taxable
value of property divided by 100; and
"DPV" is the district's taxable value of property.
(b) The bond tax rate (BTR) of the district under Subsection
(a) may not exceed the rate that would be necessary for the current
year, using state funds under Subsection (a), to make payments of
principal and interest on the bonds for which the tax is pledged.
(c) To enable the district to collect local funds sufficient
to pay the district's share of the debt service, a district may levy
a bond tax at a rate higher than the maximum rate for which it may
receive state assistance, except that the total tax rate of the
district may not exceed the maximum rate permitted by other law.
(d) The amount budgeted by a district for payment of
eligible bonds may include:
(1) bond taxes collected in the current academic year;
(2) bond taxes collected in a preceding academic year
in excess of the amount necessary to pay the district's share of
actual debt service on bonds in that year, provided that the taxes
were not used to generate other state financial assistance for the
district; or
(3) maintenance and operations taxes collected in the
current academic year or a preceding academic year, provided that
the taxes were not used to generate other state financial
assistance for the district.
(e) Bonds are eligible to be paid with state and local funds
under this section if:
(1) taxes to pay the principal of and interest on the
bonds were first levied in the 2002-2003 academic year or a later
academic year; and
(2) the bonds do not have a weighted average maturity
of less than eight years.
(f) A district may use state funds received under this
section only to pay the principal of and interest on the bonds for
which the district received the funds.
(g) The governing board and voters of a district shall
determine district needs concerning construction, acquisition,
renovation, or improvement of instructional facilities.
(h) To receive state assistance under this subchapter, a
district must apply to the coordinating board in accordance with
the coordinating board's rules before issuing bonds that will be
paid with state assistance. Until the bonds are fully paid or the
instructional facility is sold:
(1) a district is entitled to continue receiving state
assistance without reapplying to the coordinating board; and
(2) the guaranteed level of state and local funds per
full-time student enrolled per cent of tax effort applicable to the
bonds may not be reduced below the level provided for the year in
which the bonds were issued.
Sec. 130.305. LEASE-PURCHASE AGREEMENTS. (a) A district
may receive state assistance in connection with a lease-purchase
agreement concerning an instructional facility. For purposes of
this subchapter:
(1) taxes levied for purposes of maintenance and
operations that are necessary to pay a district's share of the
payments under a lease-purchase agreement for which the district
receives state assistance under this subchapter are considered to
be bond taxes; and
(2) payments under a lease-purchase agreement are
considered to be payments of principal of and interest on bonds.
(b) Section 130.304(b) applies to taxes levied to pay a
district's share of the payments under a lease-purchase agreement
for which the district receives state assistance under this
subchapter.
(c) A lease-purchase agreement must be for a term of at
least eight years to be eligible to be paid with state and local
funds under this subchapter.
Sec. 130.306. LIMITATION ON GUARANTEED ALLOTMENT FOR NEW
PROJECTS. The guaranteed amount of state and local funds for a new
project that a district may be awarded in any state fiscal biennium
under Section 130.304 may not exceed the lesser of:
(1) the amount the actual debt service payments the
district makes in the biennium in which the bonds are issued; or
(2) the greater of:
(A) $100,000; or
(B) the product of the number of full-time
students enrolled in the district multiplied by $250.
Sec. 130.307. SHORTAGE OR EXCESS OF FUNDS APPROPRIATED FOR
NEW PROJECTS. (a) If the total amount appropriated for a year for
new projects is less than the amount of money to which districts
applying for state assistance under Section 130.304 are entitled
for that year, the coordinating board shall rank each district
applying by wealth per student. For purposes of this section, a
district's wealth per student is reduced by 10 percent for each
state fiscal biennium in which the district did not receive
assistance under this subchapter.
(b) A district's wealth per student is reduced for purposes
of this section if a district has had substantial full-time student
enrollment growth in the preceding five-year period. The reduction
is in addition to any reduction under Subsection (a) and is computed
before the district's wealth per student is reduced under that
subsection, if applicable. A district's wealth per student is
reduced:
(1) by five percent, if the district has an enrollment
growth rate in that period that is 10 percent or more but less than
15 percent;
(2) by 10 percent, if the district has an enrollment
growth rate in that period that is 15 percent or more but less than
30 percent; or
(3) by 15 percent, if the district has an enrollment
growth rate in that period that is 30 percent or more.
(c) A district's wealth per student is reduced by 10 percent
for purposes of this section if the district does not have any
outstanding debt at the time the district applies for assistance
under this subchapter. The reduction is in addition to any
reduction under Subsection (a) or (b) and is computed before the
district's wealth per student is reduced under those subsections,
if applicable.
(d) The coordinating board shall adjust the rankings after
making the reductions in wealth per student required by Subsections
(a), (b), and (c).
(e) Beginning with the district with the lowest adjusted
wealth per student that has applied for state assistance for the
year, the coordinating board shall award state assistance to
districts that have applied for state assistance in ascending order
of adjusted wealth per student. The coordinating board shall award
the full amount of state assistance to which a district is entitled
under this subchapter, except that the coordinating board may award
less than the full amount to the last district for which any funds
are available.
(f) Any amount appropriated for the first year of a fiscal
biennium that is not awarded to a district may be used to provide
assistance in the following fiscal year.
(g) In this section, "wealth per student" means a district's
taxable value of property divided by the district's full-time
student enrollment.
Sec. 130.308. REFUNDING BONDS. A district may use state
funds received under Section 130.304 to pay the principal of and
interest on refunding bonds that:
(1) are issued to refund bonds eligible under Section
130.304;
(2) do not have a final maturity date later than the
final maturity date of the bonds being refunded;
(3) may not be called for redemption earlier than the
earliest call date of the bonds being refunded; and
(4) result in a present value savings, which is
determined by computing the net present value of the difference
between each scheduled payment on the original bonds and each
scheduled payment on the refunding bonds, and shall be computed at
the true interest cost of the refunding bonds.
Sec. 130.309. STANDARDS FOR INSTRUCTIONAL FACILITIES. The
coordinating board shall establish standards for adequacy of
instructional facilities of districts. The standards must include
requirements related to space, educational adequacy, and
construction quality. All new facilities constructed after
September 1, 2003, must meet the standards to be eligible to be
financed with state or local tax funds.
Sec. 130.310. PAYMENT OF ALLOTMENTS. (a) For each academic
year, the coordinating board shall determine the amount of money to
which each district is entitled under Sections 130.304 and 130.314.
(b) If the amount appropriated for purposes of Section
130.304 or 130.314 for a year is less than the total amount
determined under Subsection (a) for that year, the coordinating
board shall reduce the amount for which each district is entitled
proportionally so that the total amount to which districts are
entitled under the applicable section equals the amount
appropriated.
(c) Warrants for payments under this subchapter shall be
approved and transmitted to district treasurers or depositories in
the manner determined by the coordinating board.
(d) As soon as practicable after September 1 of each year,
the coordinating board shall distribute to each district the amount
of state assistance under this subchapter to which the coordinating
board has determined the district is entitled for the academic
year. The district shall deposit the money in the interest and
sinking fund for the bonds for which the assistance is received and
shall adopt a tax rate for purposes of debt service that takes into
account the balance of the interest and sinking fund.
Sec. 130.311. PROJECTS BY MORE THAN ONE DISTRICT. If two or
more districts apply for state assistance in connection with a
joint project at a single location, each district is entitled to a
guaranteed facilities yield amount of state and local funds that is
20 percent higher than the amount to which the district would
otherwise be entitled under Section 130.306.
Sec. 130.312. SALE OF INSTRUCTIONAL FACILITY FINANCED WITH
INSTRUCTIONAL FACILITIES ALLOTMENT. (a) If an instructional
facility financed by bonds paid with state and local funds under
this subchapter is sold before the bonds are fully paid, the
district shall send to the comptroller an amount equal to the
district's net proceeds from the sale multiplied by a percentage
determined by dividing the amount of state funds under this
subchapter used to pay the principal of and interest on the bonds by
the total amount of principal and interest paid on the bonds with
funds other than the proceeds of the sale.
(b) In this section, "net proceeds" means the total amount
received from the sale less:
(1) the amount necessary to fully pay the outstanding
principal of and interest on the bonds; and
(2) the district's costs of the sale, as approved by
the coordinating board.
Sec. 130.313. MULTIPLE ALLOTMENTS PROHIBITED. A district
is not entitled to state assistance under this subchapter based on
taxes with respect to which the district receives state assistance
under any other law.
Sec. 130.314. ASSISTANCE WITH PAYMENT OF EXISTING DEBT.
(a) Each district is guaranteed a specified amount per full-time
student enrolled in state and local funds for each cent of tax
effort to pay the principal of and interest on eligible bonds. The
amount of state support, subject to the maximum amount under
Section 130.316, is determined by the formula:
EDA = (EDGL X FTE X EDTR X 100) - (EDTR X (DPV/100))
where:
"EDA" is the amount of state funds to be allocated to the district
for assistance with existing debt;
"EDGL" is the dollar amount guaranteed level of state and local
funds per full-time student enrolled per cent of tax effort, which
is $35 or a greater amount for any year provided by appropriation;
"FTE" is the number of full-time students enrolled in the district;
"EDTR" is the existing debt tax rate of the district, which is
determined by dividing the amount budgeted by the district for
payment of eligible bonds by the quotient of the district's taxable
value of property divided by 100; and
"DPV" is the district's taxable value of property.
(b) The existing debt tax rate (EDTR) of the district under
Subsection (a) may not exceed the rate that would be necessary for
the current year, using state funds under Subsection (a), to make
payments of principal and interest on the bonds for which the tax is
pledged.
(c) The amount budgeted by a district for payment of
eligible bonds may include:
(1) bond taxes collected in the current academic year;
(2) bond taxes collected in a preceding academic year
in excess of the amount necessary to pay the district's share of
actual debt service on bonds in that year, provided that the taxes
were not used to generate other state financial assistance for the
district; or
(3) maintenance and operations taxes collected in the
current academic year or a preceding academic year in excess of the
amount eligible to be used to generate other state financial
assistance for the district.
Sec. 130.315. BONDS ELIGIBLE FOR EXISTING DEBT ASSISTANCE.
Bonds are eligible to be paid with state and local funds under
Section 130.314 if:
(1) the district made payments on the bonds during the
2002-2003 academic year or taxes levied to pay the principal of and
interest on the bonds were included in the district's audited debt
service collections for that school year; and
(2) the district does not receive state assistance
under Section 130.304 for payment of the principal and interest on
the bonds.
Sec. 130.316. LIMITS ON EXISTING DEBT ASSISTANCE. (a) The
existing debt tax rate (EDTR) under Section 130.314 may not exceed
$0.29 per $100 of valuation, or a greater amount for any year
provided by appropriation.
(b) The amount of state assistance to which a district is
entitled under Section 130.314 may not exceed the amount to which
the district would be entitled at the district's tax rate for the
payment of eligible bonds for the final year of the preceding state
fiscal biennium.
(c) If the amount required to pay the principal of and
interest on eligible bonds in an academic year is less than the
amount of payments made by the district on the bonds during the
2002-2003 academic year or the district's audited debt service
collections for that academic year, the district may not receive
aid under Section 130.314 in excess of the amount that, when added
to the district's local revenue for the academic year, equals the
amount required to pay the principal of and interest on the bonds.
Sec. 130.317. REFINANCING. (a) The coordinating board by
rule may provide for the payment of state assistance under this
subchapter to refinance district debt. A refinancing may not
increase the cost to the state of providing the assistance.
(b) The coordinating board may allocate state assistance
provided for a refinancing to Section 130.304, Section 130.314, or
both, as appropriate.
SECTION 2. This Act takes effect September 1, 2003.