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.