Bill Text: TX HB586 | 2021-2022 | 87th Legislature | Comm Sub

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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.

Sponsorship: Bipartisan Bill

Status: (Introduced - Dead) 2021-05-13 - Placed on General State Calendar [HB586 Detail]

Download: Texas-2021-HB586-Comm_Sub.html

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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.