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.