SB2842 - Relating to prohibiting a school district from using interest and sinking tax revenue to pay for deferred maintenance.

      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.