LCA H.B. 2687 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 2687 By: Coleman Public Education 4/12/1999 Introduced BACKGROUND AND PURPOSE Under current law, a school district (district) may pledge delinquent maintenance taxes for specific school years as security for loans for the payment of maintenance expenditures. This law may be interpreted to mean that a district may only pledge taxes that are delinquent at the time when the loan is made, which limits a district's ability to borrow against those taxes. Current statute is also unclear regarding a district's ability to pledge maintenance taxes toward the payment of an environmental note or its ability to issue notes to finance the cost of labor and materials involved in the installation of capital acquisitions financed by the district. H.B. 2687 amends Chapter 45, Education Code (School District Funds), to allow a district to borrow against specific past, current, and future school years' delinquent maintenance taxes and to issue notes and other securities with a maximum maturity of 20 years, payable from those delinquent taxes. This bill also amends Chapter 271, Local Government Code (Purchasing and Contracting), to establish a district's authority to pledge maintenance taxes toward the cost of environmental cleanup and asbestos removal, and to establish a district's authority to issue notes to finance costs associated with the installation of capital acquisitions. 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 Sections 45.104(a) and (c), Education Code, as follows: (a) Provides that the board of trustees of a school district (board) may pledge certain delinquent taxes for specific past, current, and future school years as security for a loan, and may evidence the loan with negotiable notes that must mature in not more than 20 years from issuance. (c) Provides that funds secured through loans secured by delinquent taxes may be used for costs incurred in connection with environmental cleanup and asbestos removal programs, and maintenance, repair, rehabilitation, or replacement of certain specified building systems. SECTION 2. Amends Sections 45.108(a), (b), and (d), Education Code, as follows: (a) Provides that loans for the purpose of paying maintenance expenses may be secured by a lien on and pledge of any available funds in the district, including proceeds of a maintenance tax. Deletes language providing that "maintenance expenses" or "maintenance expenditures" as used in this section means any lawful expenditure of the district other than payment of principal of and interest on bonds; and provides that the terms include costs incurred in connection with the maintenance, repair, rehabilitation, or repair of certain specified building systems. Provides that notes issued pursuant to this section, rather than an environmental cleanup and asbestos cleanup and removal program, may mature in not more than 20, rather than 15, years from their date. (b) Provides that notes for a term of less than one year may be issued under this section only after a budget has been adopted for the current school year. (d) Provides that a note issued under this section for a term of less than one year may contain a certain certification that is sufficient evidence that the note is a valid obligation of the district. SECTION 3. Amends Section 271.005, Local Government Code, by adding Subsection (b), as follows: (b) Provides that a governing body of a governmental agency may contract under this section for materials and labor incident to the installation of personal property. SECTION 4. Amends Section 271.007(b), Local Government Code, to provide that the legal obligation of the lessor, vendor, or supplier of the person installing personal property to the governmental agency is not diminished in any respect by the approval and registration of the contract. SECTION 5. Emergency clause. Effective date: upon passage.