87R3184 CAE-D
 
  By: Cole, VanDeaver, Israel, et al. H.B. No. 586
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the creation of a state financing program administered
  by the Texas Public Finance Authority to assist school districts
  with certain expenses; granting authority to issue bonds or other
  obligations.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 45.051, Education Code, is amended to
  read as follows:
         Sec. 45.051.  DEFINITIONS. In this subchapter:
               (1)  "Authority" means the Texas Public Finance
  Authority.
               (2)  "Board" means the State Board of Education.
               (3) [(1-a)]  "Charter district" means an
  open-enrollment charter school designated as a charter district
  under Section 12.135.
               (4) [(2)]  "Paying agent" means the financial
  institution that is designated by a school district, a [or] charter
  district, or the authority as its agent for the payment of the
  principal of and interest on guaranteed bonds.
         SECTION 2.  Section 45.052, Education Code, is amended to
  read as follows:
         Sec. 45.052.  GUARANTEE. (a)  On approval by the
  commissioner, bonds issued under Subchapter A by a school district,
  [or] Chapter 53 for a charter district, or Section 1232.1031,
  Government Code, by the authority, including refunding and
  refinanced bonds, are guaranteed by the corpus and income of the
  permanent school fund.
         (b)  Notwithstanding any amendment of this subchapter or
  other law, the guarantee under this subchapter of school district,
  [or] charter district, or authority bonds remains in effect until
  the date those bonds mature or are defeased in accordance with state
  law.
         (c)  In seeking the guarantee of bonds under this subchapter,
  the authority is subject to each provision of this subchapter that
  applies to a school district seeking guarantee of school district
  bonds, except as provided by board rules adopted under Section
  45.063.
         (d)  A reference in this subchapter to bonds issued by the
  authority includes short-term debt obligations and any other
  obligations the authority is authorized to issue under Section
  1232.1031, Government Code.
         SECTION 3.  Section 45.057(b), Education Code, is amended to
  read as follows:
         (b)  The guarantee is not effective unless the attorney
  general approves the bonds under Section 45.005 or 53.40 of this
  code or Section 1232.1031, Government Code, as applicable.
         SECTION 4.  Section 45.063, Education Code, is amended to
  read as follows:
         Sec. 45.063.  RULES. The board may adopt rules necessary for
  the administration of the bond guarantee program, including rules
  modifying requirements imposed under this subchapter as necessary
  to facilitate the guarantee of bonds issued by the authority.  The
  rules must provide for the application of Sections 45.058, 45.059,
  45.060, 45.061, and 45.062 to a default in the payment of bonds
  issued by the authority and guaranteed under this subchapter in a
  manner that provides for the withholding of state aid under Section
  45.061 that would otherwise be paid to the school district on whose
  behalf the authority issued its bonds.
         SECTION 5.  Subchapter E, Chapter 45, Education Code, is
  amended by adding Section 45.114 to read as follows:
         Sec. 45.114.  ASSISTANCE FROM TEXAS PUBLIC FINANCE
  AUTHORITY. (a) A school district may:
               (1)  borrow money from the Texas Public Finance
  Authority made available in accordance with Section 1232.1031,
  Government Code; and
               (2)  as necessary in connection with obtaining loans or
  other financial assistance from the Texas Public Finance Authority
  in accordance with Section 1232.1031, Government Code:
                     (A)  issue bonds and notes, provided that the term
  of an obligation issued for this purpose may not exceed 15 years;
  and
                     (B)  enter into loan agreements, lease
  agreements, lease purchase agreements, or other appropriate
  financing agreements with the Texas Public Finance Authority.
         (b)  A school district may:
               (1)  make payments on an obligation or agreement issued
  or executed under Subsection (a) using any available funds,
  including maintenance and operations tax revenue; and
               (2)  secure the payment of an obligation or agreement
  issued or executed under Subsection (a) through:
                     (A)  creating a lien against equipment obtained
  using the proceeds of the obligation; or
                     (B)  imposing an ad valorem maintenance tax
  otherwise authorized by law.
         (c)  A school district that secures payment of an obligation
  or agreement issued or executed under Subsection (a) through
  imposing an ad valorem maintenance tax must include the obligation
  or agreement in the district's total maintenance tax debt service
  when submitting public securities for review to the attorney
  general under Chapter 1202, Government Code.
         SECTION 6.  Subchapter C, Chapter 1232, Government Code, is
  amended by adding Section 1232.1031 to read as follows:
         Sec. 1232.1031.  ISSUANCE OF OBLIGATIONS TO ASSIST SCHOOL
  DISTRICTS. (a) The authority may issue and sell obligations to
  finance:
               (1)  loans to eligible school districts for eligible
  purposes;
               (2)  the purchase by the authority of vehicles,
  equipment, or appliances for sale, lease, or lease purchase to
  eligible school districts;
               (3)  a lease or other agreement that concerns equipment
  that an eligible school district has purchased or leased or intends
  to purchase or lease; and
               (4)  costs associated with improvement of existing
  instructional facilities, limited to the maintenance, repair,
  rehabilitation, or renovation of eligible school district
  facilities.
         (b)  The authority may use proceeds of obligations issued
  under this section to pay costs of administering this section,
  including costs of issuing obligations.
         (c)  Vehicles, equipment, and appliances are considered
  furnishings of instructional facilities for purposes of Section
  5(d), Article VII, Texas Constitution.
         (d)  In connection with a purchase or project financed with
  the proceeds of obligations issued under this section, the
  authority may:
               (1)  enter into loan agreements, lease agreements,
  lease purchase agreements, or other appropriate financing
  agreements with eligible school districts;
               (2)  purchase obligations issued by eligible school
  districts; and
               (3)  enter into credit agreements and exercise other
  powers granted to issuers under Chapter 1371.
         (e)  The authority may secure payment of authority
  obligations issued under this section only with the pledge of money
  in the school district equipment and improvement fund established
  under Subsection (f).
         (f)  The school district equipment and improvement fund is
  established outside the treasury as a trust fund and is
  administered by the comptroller on behalf of the authority as
  directed or agreed to by the board. The fund consists of proceeds
  of obligations issued by the authority under this section and
  obligations and agreements issued or executed by school districts
  and purchased or funded by the authority with proceeds of authority
  obligations. Money in the fund may be spent without appropriation
  and may be used only to fund activities under this section or to
  secure repayment of authority obligations. Interest and income
  from the assets of the fund shall be credited to and deposited in
  the fund.
         (g)  The board may establish funds and accounts determined to
  be necessary or appropriate in connection with the activities of
  the authority under this section.
         (h)  The aggregate amount of obligations issued by the
  authority under this section may not exceed $100 million.  An
  issuance of obligations to refund outstanding obligations is not
  included in determining the maximum aggregate amount under this
  subsection if the principal amount of the refunding obligations
  does not exceed the principal amount of the refunded obligations.
  If the principal amount of the refunding obligations exceeds the
  principal amount of the refunded obligations, the excess amount of
  the refunding obligations is included in determining the maximum
  aggregate amount.
         (i)  The board shall adopt rules necessary to implement this
  section, including rules prescribing eligibility requirements for
  school districts seeking assistance under this section, rules
  identifying eligible purposes for purposes of Subsection (a)(1),
  and rules identifying eligible school district facilities for
  purposes of Subsection (a)(4). Before adopting or modifying a rule
  under this subsection, the board shall consult with the
  commissioner of education.
         (j)  Rules adopted under Subsection (i) may establish a
  process under which a school district must obtain approval by the
  commissioner of education in order to be eligible for assistance
  under this section.
         (k)  The authority may not issue an obligation under this
  section on or after September 1, 2025.  The prohibition imposed by
  this subsection does not apply to:
               (1)  refunding bonds issued by the authority in
  accordance with Chapter 1207; or
               (2)  other obligations issued by the authority to
  refinance obligations incurred under this section before September
  1, 2025.
         (l)  An obligation issued under this section is not a debt of
  the state or any state agency, political corporation, or political
  subdivision of the state and is not a pledge of the faith and credit
  of any of those entities. The obligation may only be payable from
  all or part of the amounts on deposit in the school district
  equipment and improvement fund established under Subsection (f).
         (m)  An obligation issued under this section must contain on
  the obligation's face a statement to the effect that:
               (1)  neither the state nor a state agency, political
  corporation, or political subdivision of the state is obligated to
  pay the principal of or interest on the obligation except as
  provided by this section; and
               (2)  neither the faith and credit nor the taxing power
  of the state or any state agency, political corporation, or
  political subdivision of the state is pledged to the payment of the
  principal of or interest on the obligation.
         (n)  The authority may not issue an obligation under this
  section until the Bond Review Board has approved the issuance under
  Chapter 1231.
         (o)  In submitting an obligation for review under Chapter
  1202 or 1371, as applicable, the authority shall demonstrate to the
  attorney general the ability of the eligible school district to
  repay the loan or other financing agreement executed with the
  authority.
         SECTION 7.  This Act takes effect September 1, 2021.