HBA-LCA C.S.H.B. 2685 76(R)BILL ANALYSIS


Office of House Bill AnalysisC.S.H.B. 2685
By: Coleman
Public Education
4/19/1999
Committee Report (Substituted)



BACKGROUND AND PURPOSE 

A municipality or a county may issue notes with a maximum maturity of seven
years.  These notes may be used to finance, among other things, equipment,
machinery, professional services, and operating expenses.  In addition, a
municipality or a county may issue short-term obligations such as
commercial paper as another method of finance.  Under current law, an
independent school district may not issue either form of obligation. 

C.S.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, Education Code (Average Daily Attendance), of 190,000 or
more in the definition of "issuer."  Makes changes to conform to
Legislative Council format. 

SECTION 2.  Amends Section 1, Article 717w, V.T.C.S., 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 3.  Amends Section 3, Article 717w, V.T.C.S., by amending
Subsection (a) and adding Subsection (b), as follows: 

(a) Created from existing text.

(b) Authorizes the governing body of an eligible school district to
authorize anticipation notes for a purpose described by Subsection (a)(2),
(3), (4), or (5) of this Section. 

SECTION 4.  Amends Section 4(a), Article 717w, V.T.C.S., to include an
eligible school district among the entities to which this section applies
only, and to make a conforming change. 


SECTION 5.  Amends Section 5, Article 717w, V.T.C.S., as follows:
 
Sec.  5.  AUTHORIZATION OF ANTICIPATION NOTES BY ORDINANCE OR ORDER. Makes
a conforming change. 

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

(e) Makes a nonsubstantive change.

(f)  Makes a nonsubstantive change.

(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 a nonsubstantive change. 

(h) Makes a nonsubstantive change.

SECTION 7.  Effective date: September 1, 1999.

SECTION 8.  Emergency clause.

COMPARISON OF ORIGINAL TO SUBSTITUTE

The substitute modifies the original to update and provide statutory
references, and to conform to Legislative Council format.