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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.
Estimated Two-year Net Impact to General Revenue Related Funds for HB1131, As Introduced: a negative impact of ($195,824) through the biennium ending August 31, 2021.
The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
This bill would authorize the Texas Public Finance Authority (TPFA) to issue and sell an aggregate amount of outstanding obligations not to exceed $100 million to finance: loans to eligible schools for the costs associated with maintenance, repair, rehabilitation, or renovation of eligible school district facilities; the purchase of TPFA vehicles, equipment, or appliances for sale, lease, or lease purchase to eligible districts; and a lease that concerns equipment that an eligible district has purchased or leased.
These funds would establish the school district equipment and improvement fund outside the treasury as a trust fund administered by the comptroller on behalf of TPFA as directed or agreed to by TPFA's board. The fund would consist of proceeds of the obligations issued by TPFA. TPFA would be prohibited from issuing an obligation under this bill's provisions on or after September 1, 2023.
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 a district defaulting. 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 1131.