HBA-NMO, LCA H.B. 2685 76(R)BILL ANALYSIS


Office of House Bill AnalysisH.B. 2685
By: Coleman
Public Education
10/29/1999
Enrolled



BACKGROUND AND PURPOSE 

State law authorizes a municipality or a county to issue notes with a
maximum maturity of seven years.  The law authorizes the use of these notes
to finance, among other things, equipment, machinery, professional
services, and operating expenses.  In addition, the law authorizes a
municipality or a county to  issue short-term obligations such as
commercial paper as another method of finance.  However, prior to the 76th
Legislature, state law did not authorize an independent school district to
issue either form of obligation. 

H.B.  2685 allows a school district with an average daily attendance of at
least 190,000 to issue both anticipation notes and short-term obligations,
with certain provisions regarding the use of funds generated and
restrictions on the amounts of notes issued. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 1(1), Chapter 656, Acts of the 68th Legislature,
Regular Session, 1983 (Article 717q, V.T.C.S.), to include an independent
school district having an average daily attendance, as defined under
Section 42.005 (Average Daily Attendance), Education Code, of 190,000 or
more in the definition of "issuer."  Makes changes to conform to
Legislative Council format. 

SECTION 2.  Amends Article 717q, V.T.C.S., by adding Subsection (d), as
follows:  

(d) Prohibits an issuer that is an independent school district from issuing
obligations under this article unless such obligations are authorized in
accordance with the provisions of Section 45.003 (Bond and Tax Elections),
Education Code. 

SECTION 3.  Amends Section 1, Article 717w, V.T.C.S., by amending
Subdivisions (6) and (7) and adding Subdivision (8), as follows: 

(6)  Defines "eligible school district" as an independent school district
having an average daily attendance of 190,000 or more, as defined under
Section 42.005, Education Code. 

(7) Makes a conforming change.

(8) Includes "eligible school district" with "municipality" and "county" in
the definition of "issuer." 

SECTION 4.  Amends Section 3, Article 717w, V.T.C.S., as follows:

(a) Created from existing text.

(b) Authorizes the governing body of an eligible school district to
authorize anticipation  notes for any or all of the purposes described in
Subsection (a)(3), (4), or (5) of this section; or paying a contractual
obligation incurred or to be incurred for the purchase of materials,
supplies, equipment, and machinery for an issuer's authorized needs and
purposes. 

SECTION 5.  Amends Section 4(a), Article 717w, V.T.C.S., to include an
eligible school district among the entities to which this section applies
regarding the issuance of obligations under Article 717q (Short Term
Obligation  for Public Utility), V.T.C.S., and to make a conforming change. 

SECTION 6.  Amends Section 5, Article 717w, V.T.C.S., as follows:

Sec.  5.  AUTHORIZATION OF ANTICIPATION NOTES BY ORDINANCE OR ORDER.
Includes an order adopted by an eligible school district among the means by
which anticipation notes may be authorized. 

SECTION 7.  Amends Sections 6(e)-(h), Article 717w, Revised Statutes, as
follows: 

(e) Makes conforming changes.

(f)  Makes conforming changes.

(g) Prohibits an anticipation note issued by a school district under
Section 3(a)(4) of this article from exceeding 75 percent of the income of
the district for the fiscal year preceding the fiscal year in which the
attorney general approves the notes.  Makes conforming changes. 

(h) Makes conforming changes.

SECTION 8.  Effective date: September 1, 1999.

SECTION 9.  Emergency clause.