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Amend CSSB 422 by inserting the following appropriately
numbered SECTIONS:
SECTION 1.__. Subchapter C, Chapter 45, Education Code, is
amended by adding Section 45.0561 to read as follows:
Sec. 45.0561. PRIORITY FOR CERTAIN BONDS. (a) In
determining which bonds to approve for guarantee under this
subchapter, the commissioner shall give priority to a school
district that has had bonds refunded and defeased under Subchapter
D, Chapter 46.
(b) The commissioner may adopt rules to administer this
section.
(2)
SECTION 1C.__. Chapter 46, Education Code, is amended by
adding Subchapter D to read as follows:
SUBCHAPTER D. REFUNDING TO INCREASE PERMANENT
SCHOOL FUND CAPACITY
Sec. 46.091. DEFINITIONS. In this subchapter:
(1) "Allocated revenue" means that portion of state
assistance under Subchapter A or B equal to the scheduled debt
service payments in effect immediately before the refunding of
eligible bonds being refunded under this subchapter.
(2) "Authority" means the Texas Public Finance
Authority.
(3) "Authority obligation" means any type of revenue
obligation, including a bond, note, certificate, or other
instrument issued under this subchapter. The term includes an
obligation issued to refund an obligation issued under this
subchapter.
(4) "Credit agreement" has the meaning assigned by
Section 1371.001, Government Code.
(5) "Obligation administrative expenses" means
expenses incurred in administering authority obligations,
including:
(A) administrative expenses incurred by the
commissioner or the authority relating to the administration of
this subchapter; and
(B) fees for:
(i) paying agents, trustees, and attorneys;
(ii) other professional services necessary
to ensure compliance with applicable state or federal law; and
(iii) a school district with eligible bonds
refunded under this subchapter, professional service expenses in an
amount approved by the commissioner.
Sec. 46.092. ISSUANCE OF AUTHORITY OBLIGATIONS. (a) If the
commissioner determines that it is feasible to refund eligible
school district bonds as provided by this subchapter, the
commissioner may request that the authority issue authority
obligations necessary to accomplish the refunding. On request of
the commissioner, the authority shall issue authority obligations,
in accordance with Title 9, Government Code, in an amount
sufficient to:
(1) refund eligible bonds;
(2) pay all obligation administrative expenses;
(3) pay the costs of issuing the authority
obligations;
(4) pay the costs of any credit agreement; and
(5) provide any reserve funds.
(b) Authority obligations and any related credit agreements
must be secured by allocated revenue.
(c) The commissioner's request for the issuance of
authority obligations must state:
(1) the maximum principal amount of bonds to be
refunded under this subchapter;
(2) the maximum term of bonds to be refunded; and
(3) the amount of state assistance under Subchapter A
or B to support the payment of the bonds to be refunded.
(d) To best achieve the economic goals of this subchapter
and accomplish the borrowing at the lowest practicable cost, the
authority may determine:
(1) the method of sale of authority obligations;
(2) the type and form of obligation;
(3) the maximum interest rates and other terms of
authority obligations; and
(4) the need for related credit agreements.
(e) The authority shall certify to the commissioner that
each series of authority obligations issued under this subchapter
will result in an aggregate present value savings.
(f) Section 46.007 does not apply to the issuance of
authority obligations under this subchapter.
Sec. 46.093. ELIGIBILITY OF BONDS FOR REFUNDING. School
district bonds are eligible for refunding under this subchapter if:
(1) the district receives state assistance for payment
of the bonds under Subchapter A or B; and
(2) the principal and interest of the bonds are
guaranteed by the permanent school fund under Subchapter C, Chapter
45.
Sec. 46.094. IDENTIFICATION OF ELIGIBLE BONDS; NOTICE TO
SCHOOL DISTRICTS. (a) If the commissioner determines that it is
feasible to refund eligible school district bonds as provided by
this subchapter, the commissioner shall periodically identify
which outstanding school bonds are eligible for refunding under
this subchapter. The commissioner shall notify the school districts
issuing the bonds that:
(1) the bonds are subject to being refunded and
defeased through the issuance of authority obligations; and
(2) a school district whose bonds are refunded under
this subchapter is entitled to priority in the allocation of
resulting increases in the capacity of the permanent school fund to
guarantee school district bonds under Subchapter C, Chapter 45, as
provided by Section 45.0561.
(b) The district may elect to direct the commissioner to
include any of the district's eligible bonds for consideration for
refunding under this subchapter. If the district does not elect to
direct the commissioner to include the district's bonds for
consideration for refunding within the time prescribed by this
subsection, the bonds may not be refunded under this subchapter.
(c) Notice under Subsection (a) must:
(1) identify the bonds the commissioner proposes to
refund under this subchapter;
(2) state that the school district may elect to direct
the commissioner to include any of the district's bonds for
consideration for refunding; and
(3) advise the district of:
(A) the effect of electing to have the bonds
considered for refunding; and
(B) the effect of not electing to have the bonds
considered for refunding.
Sec. 46.095. AGREEMENT BETWEEN COMMISSIONER AND AUTHORITY.
(a) To permit the authority to pledge allocated revenue to the
payment of authority obligations, the commissioner shall enter into
an agreement with the authority under which:
(1) the commissioner, acting on behalf of each school
district whose bonds are being refunded under this subchapter, may
pledge the allocated revenue to secure the payment of the principal
of and interest and premium on authority obligations; and
(2) each school year, the commissioner shall allocate
and distribute to the authority allocated revenue equal to the
scheduled debt service payments for that year on the bonds being
refunded.
(b) An agreement under this section must state that the
funding for allocated revenue is subject to legislative
appropriation. A distribution to the authority under the agreement
is considered to be a distribution for purposes of Section 46.009.
If the commissioner determines that the amount appropriated for any
year for allocated revenue is insufficient, the commissioner may
act under Section 46.009(b) to ensure the sufficiency of allocated
revenue.
Sec. 46.096. USE OF PROCEEDS OF AUTHORITY OBLIGATIONS. (a)
The authority shall use the proceeds of authority obligations, less
the cost of issuing those obligations and the cost of
administrative expenses incurred by the commissioner or the
authority relating to the administration of this subchapter, to
refund and defease eligible bonds as requested by the commissioner.
To accomplish the refunding and defeasance:
(1) the commissioner, on behalf of the school
districts issuing the bonds, may:
(A) exercise any reserved right of optional
redemption; and
(B) issue any required notice of redemption and
defeasance; and
(2) the authority, on behalf of the districts issuing
the bonds, may enter into escrow agreements and purchase escrow
securities as provided by Chapter 1207, Government Code, with the
same effect under that chapter as if the authority were the issuer
of the bonds being refunded and defeased.
(b) The authority shall provide to a school district whose
bonds are refunded under this subchapter appropriate documentation
showing that the bonds have been refunded and defeased.
Sec. 46.097. PAYMENT OF OBLIGATION ADMINISTRATIVE
EXPENSES. After paying the current debt service on authority
obligations, the authority may use allocated revenue to pay
obligation administrative expenses.
Sec. 46.098. DISTRIBUTION OF ALLOCATED REVENUE IN EXCESS OF
DISTRICT'S ENTITLEMENT TO STATE ASSISTANCE. (a) If the
commissioner allocates and distributes to the authority allocated
revenue for a school district's bonds refunded under this
subchapter in an amount in excess of the state assistance to which
the district is entitled in connection with all of the district's
bonds, the district shall reimburse the commissioner in the amount
of the excess.
(b) If a school district elects not to reimburse the
commissioner in the amount of excess state assistance as required
under Subsection (a), the commissioner shall direct the comptroller
to withhold the amount of the excess from the succeeding payment of
state assistance payable to the school district and credit the
amount to the account or accounts from which the excess payment was
made.
(c) A school may reimburse the commissioner under this
section from any lawfully available source.
Sec. 46.099. REFUNDING OF AUTHORITY OBLIGATIONS. The
authority may issue authority obligations to refund any previously
issued authority obligations if the authority by resolution
determines that the issuance of refunding obligations will result
in the lowest practicable borrowing cost to the state and school
districts with outstanding eligible bonds.
Sec. 46.100. AUTHORITY OBLIGATIONS NOT A PLEDGE OF STATE'S
CREDIT. (a) Authority obligations and any related credit
agreements are not:
(1) a debt of the state, a state agency, or a political
subdivision of the state; or
(2) a pledge of the faith and credit or taxing power of
the state, a state agency, or a political subdivision of the state.
(b) Authority obligations and any related credit agreements
are payable solely from allocated revenue pledged to the payment of
those obligations.
(c) Subject to the limitations of Subsection (a), as long as
authority obligations are outstanding, the state may not:
(1) take any action to limit or restrict the
authority's responsibility to pay the authority obligations; or
(2) in any way impair the rights and remedies of the
owners of authority obligations.
(d) The reallocation of allocated revenue to secure
authority obligations to refund school district bonds is:
(1) consistent with the original authorization,
allocation, and application of state assistance under Subchapter A
or B;
(2) in furtherance of any covenants, agreements, or
undertakings by school districts or the commissioner to cause
allocated revenue to be credited to debt service funds for school
district bonds; and
(3) consistent with all statutory and regulatory
dedications and restrictions on the allocated revenue.