HBA-JEK H.B. 2888 77(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 2888
By: Truitt
Public Education
4/10/2001
Introduced



BACKGROUND AND PURPOSE 

Although there are approximately 1,000 school districts in the state of
Texas most of the growth in student enrollment has occurred in
approximately 10% of the state's school districts during the past five
years. These fast-growth districts face strong financial pressures.  Most
fast-growth school districts finance the expansion of their facilities
through voted bond issues.  Current law provides that the interest and
sinking fund (I&S) tax rate for all bonds that a school district issues
after September 1, 1992, must not exceed fifty cents per $100 of valuation.
This "fifty cent test" has limited the ability of some fast-growth school
districts to expand their facilities.  House Bill 2888 repeals the
provision that prohibits the principal of and interest on school district
bonds from exceeding the revenue generated by a tax at $0.50 per $100 of
valuation. 

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. 

ANALYSIS

House Bill 2888 amends the Education Code to repeal the provision that,
before issuing bonds, a district must demonstrate to the attorney general
that the district has a projected ability to pay the principal of and
interest on proposed bonds and previously issued bonds from a tax at a rate
not to exceed $0.50 per $100 of valuation.  

EFFECTIVE DATE

On passage, or if the Act does not receive the necessary vote, the Act
takes effect September 1, 2001.