Honorable Rob Eissler, Chair, House Committee on Public Education
FROM:
John S. O'Brien, Director, Legislative Budget Board
IN RE:
HB3697 by Aycock (Relating to the issuance of certain tax-supported bonds.), As Introduced
No significant fiscal implication to the State is anticipated.
The bill would provide for an alternate methodology for school districts to demonstrate the ability to pay debt service on all current and proposed bond issuances at an Interest and Sinking tax rate of $0.50 per $100 of valuation in order for the Office of the Attorney General to provide approval of a new bond issuance (the 50-cent test). The bill would allow a district to demonstrate that it meets the requirements of the 50-cent test based on pro forma debt service projections amortized over the maximum term permitted by law (currently 40 years). The bill would permit a school district to issue bonds in any manner that would provide a 10 percent savings in debt service as compared to the pro forma debt service projections. No significant cost to the state is anticipated.
Local Government Impact
School districts seeking approval of bonds could use an alternate methodology to demonstrate that they meet the requirements of the 50-cent test.
Source Agencies:
302 Office of the Attorney General, 701 Central Education Agency