HBA-MPM S.B. 1089 76(R) BILL ANALYSIS Office of House Bill AnalysisS.B. 1089 By: Duncan Public Education 5/12/1999 Engrossed BACKGROUND AND PURPOSE Currently, a school district may not enter into a contract to purchase investments with the proceeds of taxes levied or to be levied by the district to retire debt service on bonds it has issued. S.B. 1089 amends Chapter 45, Education Code (School District Funds) to authorize a school district, including a junior college district or community college district, to enter into a contract, with a term of less than seven years, to purchase investments with the proceeds of taxes levied or to be levied by the district to pay debt service on bonds issued by the district. This bill also sets forth bidding and contract requirements for a purchase of investments under this section. 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 Subchapter E, Chapter 45, Education Code, by adding Section 45.112, as follows: Sec. 45.112. CONTRACTS FOR INVESTMENT OF DEBT SERVICE FUNDS. (a) Authorizes a school district, including a junior or community college district (district), to enter into a contract with a term not to exceed seven years to purchase investments with the proceeds of taxes levied or to be levied by the district for the purpose of paying debt service on bonds the district issued. (b) Authorizes a contract under this section to provide for the purchase of investments at a stated yield or yields. (c) Provides that before entering a contract under this section, a district must solicit and receive bids from at least three separate providers, and must accept the qualifying bid that provides the highest yield investments over the term of the contract. (d) Authorizes a contract under this section to provide only for the purchase of an obligation described by Section 2256.009(a)(1) (Authorized Investments: Obligations of, or Guaranteed by Governmental Entities), Government Code, which provides that obligations of the United States or its agencies and instrumentalities are authorized investments. SECTION 2. Emergency clause. Effective date: upon passage.