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Relating to the creation of a state financing program administered by the Texas Public Finance Authority to assist school districts with certain expenses; granting authority to issue bonds or other obligations.
This bill would authorize the Texas Public Finance Authority to issue and sell an aggregate amount of outstanding obligations not to exceed $100 million to finance: loans to eligible school for the costs associated with maintenance, repair, rehabilitation, or renovation of eligible school district facilities.
These funds would establish the school district equipment and improvement fund outside the treasury as a trust fund administered by the comptroller of public accounts on behalf of the authority as directed or agreed to by the authority's board of directors and consisting of proceeds of obligations issued by the authority to assist districts and obligations and agreements issued or executed by districts and purchased or funded by the authority with proceeds of authority obligations.
Obligations under this program would be eligible to be guaranteed by the Permanent School Fund.
This bill creates a new trust fund outside of the treasury that would be controlled by the Comptroller. Dedicating funds outside of the treasury and without appropriation is inconsistent with limited government. Also, the funds would be guaranteed by the Permanent School Fund which would make the state responsible for payment in the event of default. Furthermore, we have deep reservations about allowing a new mechanism for the creation of local debt when we already have a massive and growing local debt problem. For these reasons we oppose HB 3438.