Bill Text: TX HB272 | 2017 | 85th Legislature 1st Special Session | Comm Sub
Bill Title: 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.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2017-08-08 - Committee report sent to Calendars [HB272 Detail]
Download: Texas-2017-HB272-Comm_Sub.html
85S11763 KKA-D | |||
By: Koop | H.B. No. 272 | ||
Substitute the following for H.B. No. 272: | |||
By: Koop | C.S.H.B. No. 272 |
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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. Subchapter E, Chapter 45, Education Code, is | ||
amended by adding Sections 45.116 and 45.117 to read as follows: | ||
Sec. 45.116. 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; | ||
(B) imposing an ad valorem tax otherwise | ||
authorized by law; or | ||
(C) obtaining credit enhancement under | ||
Subchapter I. | ||
Sec. 45.117. PAYMENT PROTECTIONS FOR TEXAS PUBLIC FINANCE | ||
AUTHORITY. (a) In this section, "obligation" means an obligation | ||
issued by the Texas Public Finance Authority under Section | ||
1232.1031, Government Code, for the benefit of a school district. | ||
(b) Immediately following a determination that a school | ||
district will be or is unable to pay maturing or matured principal | ||
or interest on an obligation, but not later than the fifth day | ||
before maturity date, the school district shall notify the | ||
commissioner. | ||
(c) Immediately following receipt of notice from a school | ||
district under Subsection (b), the commissioner shall instruct the | ||
comptroller to transfer to the Texas Public Finance Authority from | ||
the next payment of state money payable to the district from | ||
appropriations to the Foundation School Program the amount | ||
necessary to pay the maturing or matured principal or interest. | ||
(d) Immediately following receipt of the funds for payment | ||
of the principal or interest, the Texas Public Finance Authority | ||
shall forward the canceled obligation to the comptroller. The | ||
comptroller shall hold the canceled obligation on behalf of the | ||
Texas Public Finance Authority. | ||
(e) Following full reimbursement to the Texas Public | ||
Finance Authority with interest, the comptroller shall cancel the | ||
obligation and forward it to the school district. | ||
(f) If a school district fails to pay principal or interest | ||
on an obligation at maturity, other obligations not yet mature are | ||
not accelerated and are not due by virtue of the school district's | ||
default. | ||
(g) If a total of two or more payments are made using state | ||
money otherwise payable to a school district from appropriations to | ||
the Foundation School Program and the commissioner determines that | ||
the district is acting in bad faith, the commissioner may request | ||
the attorney general to institute appropriate legal action to | ||
compel the school district and the district's officers, agents, and | ||
employees to comply with the duties required by law in regard to the | ||
appropriate obligations. Jurisdiction of proceedings under this | ||
subsection is in district court in Travis County. | ||
(h) The Texas Public Finance Authority may adopt rules | ||
necessary for the administration of obligations issued on behalf of | ||
school districts. | ||
(i) The Texas Public Finance Authority and the agency may | ||
enter into a memorandum of understanding governing the duties of | ||
the authority and agency under Section 45.116 and this section and | ||
Section 1232.1031, Government Code. | ||
SECTION 2. Section 45.252, Education Code, is amended by | ||
adding Subsection (a-1) to read as follows: | ||
(a-1) A school district may apply for credit enhancement | ||
under this subchapter of obligations issued under Section 45.116. | ||
SECTION 3. 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 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) 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. | ||
(d) The authority may secure payment of authority | ||
obligations issued under this section with the pledge of money in | ||
the school district equipment and improvement fund established | ||
under Subsection (e). | ||
(e) 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. | ||
(f) The board may establish funds and accounts determined to | ||
be necessary or appropriate in connection with the activities of | ||
the authority under this section. | ||
(g) The aggregate amount of obligations issued by the | ||
authority under this section outstanding at one time may not exceed | ||
$100 million. | ||
(h) 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. | ||
(i) Rules adopted under Subsection (h) 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. | ||
(j) The authority may not issue an obligation under this | ||
section on or after September 1, 2021. 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, 2021. | ||
SECTION 4. This Act takes effect immediately if it receives | ||
a vote of two-thirds of all the members elected to each house, as | ||
provided by Section 39, Article III, Texas Constitution. If this | ||
Act does not receive the vote necessary for immediate effect, this | ||
Act takes effect on the 91st day after the last day of the | ||
legislative session. |