Bill Text: TX HB3438 | 2017-2018 | 85th Legislature | Engrossed


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 3-0)

Status: (Engrossed) 2017-05-10 - Referred to Education [HB3438 Detail]

Download: Texas-2017-HB3438-Engrossed.html
  85R23386 KKA-D
 
  By: Koop, Ashby, VanDeaver H.B. No. 3438
 
 
 
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 Texas Public Finance 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
  Texas Public Finance 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 45.063, 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 4.  Subchapter E, Chapter 45, Education Code, is
  amended by adding Section 45.116 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.
         SECTION 5.  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 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 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 7.  This Act takes effect September 1, 2017.
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