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) 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
 
 
 
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.  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.
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