Hinojosa Bill Bars School Bonds For Anything Lasting Under 10 Years

The text as introduced · 982 words

By: Hinojosa of Nueces
S.B. No. 2842

A BILL TO BE ENTITLED

AN ACT

relating to prohibiting a school district from using interest and

sinking tax revenue to pay for deferred maintenance.

SECTION 1. Section 45.001, Education Code, is amended by

amending Subsection (a) to read as follows:

Sec. 45.001. BONDS AND BOND TAXES. (a) The governing board

of an independent school district, including the city council or

commission that has jurisdiction over a municipally controlled

independent school district, the governing board of a rural high

school district, and the commissioners court of a county, on behalf

of each common school district under its jurisdiction, may:

(1) issue bonds for:

(A) the construction, acquisition, and equipment

of school buildings in the district;

(B) the acquisition of property or the

refinancing of property financed under a contract entered under

Subchapter A, Chapter 271, Local Government Code, regardless of

whether payment obligations under the contract are due in the

current year or a future year;

(C) the purchase of the necessary sites for

school buildings;

(D) the purchase of new school buses;

(E) the retrofitting of school buses with

emergency, safety, or security equipment; and

(F) the purchase or retrofitting of vehicles to

be used for emergency, safety, or security purposes; and

(2) levy, pledge, assess, and collect annual ad

valorem taxes sufficient to pay the principal of and interest on the

bonds as or before the principal and interest become due, subject to

Section 45.003.

(b) The bonds must mature serially or otherwise not more

than 40 years from their date. The bonds may be made redeemable

before maturity.

(c) Bonds may be sold at public or private sale as

determined by the governing board of the district.

(d) Bonds may not be issued to pay for:

(1) any item or asset with less than a 10-year useful

life span; or

(2) the maintenance of school facilities including

preventive maintenance; replacement of parts, systems, or

components; and other activities needed to preserve or maintain the

asset.

SECTION 2. Section 45.0031, Education Code, is amended by

adding Subsection (a-1) to read as follows:

Sec. 45.0031. LIMITATION ON ISSUANCE OF TAX-SUPPORTED

BONDS. (a) Before issuing bonds described by Section 45.001, a

school district must demonstrate to the attorney general under

Subsection (b) or (c) that, with respect to the proposed issuance,

the district has a projected ability to pay the principal of and

interest on the proposed bonds and all previously issued bonds

other than bonds authorized to be issued at an election held on or

before April 1, 1991, and issued before September 1, 1992, from a

tax at a rate not to exceed $0.50 per $100 of valuation.

(a-1) In addition to Subsection (a), a school district must

demonstrate the bonds are not in violation of Section 45.001(d).

(b) A district may demonstrate the ability to comply with

Subsection (a) by using the most recent taxable value of property in

the district, combined with state assistance to which the district

is entitled under Chapter 46 or 48 that may be lawfully used for the

payment of bonds.

(c) A district may demonstrate the ability to comply with

Subsection (a) by using a projected future taxable value of

property in the district anticipated for the earlier of the tax year

five years after the current tax year or the tax year in which the

final payment is due for the bonds submitted to the attorney

general, combined with state assistance to which the district is

entitled under Chapter 46 or 48 that may be lawfully used for the

payment of bonds. The district must submit to the attorney general

a certification of the district's projected taxable value of

property that is prepared by a registered professional appraiser

certified under Chapter 1151, Occupations Code, who has

demonstrated professional experience in projecting taxable values

of property or who can by contract obtain any necessary assistance

from a person who has that experience. To demonstrate the

professional experience required by this subsection, a registered

professional appraiser must provide to the district written

documentation relating to two previous projects for which the

appraiser projected taxable values of property. Until the bonds

submitted to the attorney general are approved or disapproved, the

district must maintain the documentation and on request provide the

documentation to the attorney general or comptroller. The

certification of the district's projected taxable value of property

must be signed by the district's superintendent. The attorney

general must base a determination of whether the district has

complied with Subsection (a) on a taxable value of property that is

equal to 90 percent of the value certified under this subsection.

(d) A district that demonstrates to the attorney general

that the district's ability to comply with Subsection (a) is

contingent on receiving state assistance may not adopt a tax rate

for a year for purposes of paying the principal of and interest on

the bonds unless the district credits to the account of the interest

and sinking fund of the bonds the amount of state assistance equal

to the amount needed to demonstrate compliance and received or to be

received in that year.

(e) If a district demonstrates to the attorney general the

district's ability to comply with Subsection (a) using a projected

future taxable value of property under Subsection (c) and

subsequently imposes a tax to pay the principal of and interest on

bonds to which Subsection (a) applies at a rate that exceeds the

limit imposed by Subsection (a), the attorney general may not

approve a subsequent issuance of bonds unless the attorney general

finds that the district has a projected ability to pay the principal

of and interest on the proposed bonds and all previously issued

bonds to which Subsection (a) applies from a tax at a rate not to

exceed $0.45 per $100 of valuation.

SECTION 3. This Act takes effect September 1, 2025.