Bill Text: TX HB586 | 2021-2022 | 87th Legislature | 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: Bipartisan Bill
Status: (Introduced - Dead) 2021-05-13 - Placed on General State Calendar [HB586 Detail]
Download: Texas-2021-HB586-Comm_Sub.html
87R3184 CAE-D | ||
By: Cole, VanDeaver, Israel, et al. | H.B. No. 586 |
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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. 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) [ |
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open-enrollment charter school designated as a charter district | ||
under Section 12.135. | ||
(4) [ |
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institution that is designated by a school district, a [ |
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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, | ||
[ |
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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, | ||
[ |
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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. |