EDUCATION CODE
CHAPTER 46. ASSISTANCE WITH INSTRUCTIONAL FACILITIES AND PAYMENT OF
EXISTING DEBT
SUBCHAPTER A. INSTRUCTIONAL FACILITIES ALLOTMENT
§ 46.001. DEFINITION.
Acts 2003, 78th Leg., ch. 201, § 1(1) repealed this section
effective September 1, 2004, provided the legislature enacts a law
that creates a comprehensive school finance system.
In this subchapter, "instructional facility" means real
property, an improvement to real property, or a necessary fixture
of an improvement to real property that is used predominantly for
teaching the curriculum required under Section 28.002.
Added by Acts 1997, 75th Leg., ch. 592, § 1.04, eff. Sept. 1,
1997. Amended by Acts 1999, 76th Leg., ch. 396, § 1.23, eff.
Sept. 1, 1999.
§ 46.002. RULES.
Acts 2003, 78th Leg., ch. 201, § 1(1) repealed this section
effective September 1, 2004, provided the legislature enacts a law
that creates a comprehensive school finance system.
(a) The commissioner may adopt rules for the administration
of this subchapter.
(b) The commissioner's rules may limit the amount of an
allotment under this subchapter that is to be used to construct,
acquire, renovate, or improve an instructional facility that may
also be used for noninstructional or extracurricular activities.
Added by Acts 1997, 75th Leg., ch. 592, § 1.04, eff. Sept. 1,
1997. Amended by Acts 1999, 76th Leg., ch. 396, § 1.23, eff.
Sept. 1, 1999.
§ 46.003. SCHOOL FACILITIES ALLOTMENT.
Acts 2003, 78th Leg., ch. 201, § 1(1) repealed this section
effective September 1, 2004, provided the legislature enacts a law
that creates a comprehensive school finance system.
(a) For each year, except as provided by Sections 46.005 and
46.006, a school district is guaranteed a specified amount per
student in state and local funds for each cent of tax effort, up to
the maximum rate under Subsection (b), to pay the principal of and
interest on eligible bonds issued to construct, acquire, renovate,
or improve an instructional facility. The amount of state support
is determined by the formula:
FYA = (FYL X ADA X BTR X 100) - (BTR X (DPV/100))
where:
"FYA" is the guaranteed facilities yield amount of state
funds allocated to the district for the year;
"FYL" is the dollar amount guaranteed level of state and
local funds per student per cent of tax effort, which is $35 or a
greater amount for any year provided by appropriation;
"ADA" is the greater of the number of students in average
daily attendance, as determined under Section 42.005, in the
district or 400;
"BTR" is the district's bond tax rate for the current year,
which is determined by dividing the amount budgeted by the district
for payment of eligible bonds by the quotient of the district's
taxable value of property as determined under Subchapter M, Chapter
403, Government Code, or, if applicable, Section 42.2521, divided
by 100; and
"DPV" is the district's taxable value of property as
determined under Subchapter M, Chapter 403, Government Code, or, if
applicable, Section 42.2521.
(b) The bond tax rate under Subsection (a) may not exceed
the rate that would be necessary for the current year, using state
funds under Subsection (a), to make payments of principal and
interest on the bonds for which the tax is pledged.
(c) To enable the district to collect local funds sufficient
to pay the district's share of the debt service, a district may levy
a bond tax at a rate higher than the maximum rate for which it may
receive state assistance.
(d) The amount budgeted by a district for payment of
eligible bonds may include:
(1) bond taxes collected in the current school year;
(2) bond taxes collected in a preceding school year in
excess of the amount necessary to pay the district's share of actual
debt service on bonds in that year, provided that the taxes were not
used to generate other state financial assistance for the district;
or
(3) maintenance and operations taxes collected in the
current school year or a preceding school year in excess of the
amount eligible to be used to generate other state financial
assistance for the district.
(e) Bonds are eligible to be paid with state and local funds
under this section if:
(1) taxes to pay the principal of and interest on the
bonds were first levied in the 1997-1998 school year or a later
school year; and
(2) the bonds do not have a weighted average maturity
of less than eight years.
(f) A district may use state funds received under this
section only to pay the principal of and interest on the bonds for
which the district received the funds.
(g) The board of trustees and voters of a school district
shall determine district needs concerning construction,
acquisition, renovation, or improvement of instructional
facilities.
(h) To receive state assistance under this subchapter, a
school district must apply to the commissioner in accordance with
rules adopted by the commissioner before issuing bonds that will be
paid with state assistance. Until the bonds are fully paid or the
instructional facility is sold:
(1) a school district is entitled to continue
receiving state assistance without reapplying to the commissioner;
and
(2) the guaranteed level of state and local funds per
student per cent of tax effort applicable to the bonds may not be
reduced below the level provided for the year in which the bonds
were issued.
Added by Acts 1997, 75th Leg., ch. 592, § 1.04, eff. Sept. 1,
1997. Amended by Acts 1999, 76th Leg., ch. 396, § 1.24, eff.
Sept. 1, 1999; Acts 2001, 77th Leg., ch. 1156, § 6, eff. Sept. 1,
2001.
§ 46.004. LEASE-PURCHASE AGREEMENTS.
Acts 2003, 78th Leg., ch. 201, § 1(1) repealed this section
effective September 1, 2004, provided the legislature enacts a law
that creates a comprehensive school finance system.
(a) A district may receive state assistance in connection
with a lease-purchase agreement concerning an instructional
facility. For purposes of this subchapter:
(1) taxes levied for purposes of maintenance and
operations that are necessary to pay a district's share of the
payments under a lease-purchase agreement for which the district
receives state assistance under this subchapter are considered to
be bond taxes; and
(2) payments under a lease-purchase agreement are
considered to be payments of principal of and interest on bonds.
(b) Section 46.003(b) applies to taxes levied to pay a
district's share of the payments under a lease-purchase agreement
for which the district receives state assistance under this
subchapter.
(c) A lease-purchase agreement must be for a term of at
least eight years to be eligible to be paid with state and local
funds under this subchapter.
Added by Acts 1997, 75th Leg., ch. 592, § 1.04, eff. Sept. 1,
1997. Amended by Acts 1999, 76th Leg., ch. 396, § 1.25, eff.
Sept. 1, 1999.
§ 46.005. LIMITATION ON GUARANTEED AMOUNT.
Acts 2003, 78th Leg., ch. 201, § 1(1) repealed this section
effective September 1, 2004, provided the legislature enacts a law
that creates a comprehensive school finance system.
The guaranteed amount of state and local funds for a new
project that a district may be awarded in any state fiscal biennium
under Section 46.003 for a school district may not exceed the lesser
of:
(1) the amount the actual debt service payments the
district makes in the biennium in which the bonds are issued; or
(2) the greater of:
(A) $100,000; or
(B) the product of the number of students in
average daily attendance in the district multiplied by $250.
Added by Acts 1997, 75th Leg., ch. 592, § 1.04, eff. Sept. 1,
1997.
§ 46.006. SHORTAGE OR EXCESS OF FUNDS APPROPRIATED FOR
NEW PROJECTS.
Acts 2003, 78th Leg., ch. 201, § 1(1) repealed this section
effective September 1, 2004, provided the legislature enacts a law
that creates a comprehensive school finance system.
(a) If the total amount appropriated for a year for new
projects is less than the amount of money to which school districts
applying for state assistance are entitled for that year, the
commissioner shall rank each school district applying by wealth per
student. For purposes of this section, a district's wealth per
student is reduced by 10 percent for each state fiscal biennium in
which the district did not receive assistance under this
subchapter.
(b) A district's wealth per student is reduced for purposes
of this section if a district has had substantial student
enrollment growth in the preceding five-year period. The reduction
is in addition to any reduction under Subsection (a) and is computed
before the district's wealth per student is reduced under that
subsection, if applicable. A district's wealth per student is
reduced:
(1) by five percent, if the district has an enrollment
growth rate in that period that is 10 percent or more but less than
15 percent;
(2) by 10 percent, if the district has an enrollment
growth rate in that period that is 15 percent or more but less than
30 percent; or
(3) by 15 percent, if the district has an enrollment
growth rate in that period that is 30 percent or more.
(c) A district's wealth per student is reduced by 10 percent
for purposes of this section if the district does not have any
outstanding debt at the time the district applies for assistance
under this subchapter. The reduction is in addition to any
reduction under Subsection (a) or (b) and is computed before the
district's wealth per student is reduced under those subsections,
if applicable.
(d) The commissioner shall adjust the rankings after making
the reductions in wealth per student required by Subsections (a),
(b), and (c).
(e) Beginning with the district with the lowest adjusted
wealth per student that has applied for state assistance for the
year, the commissioner shall award state assistance to districts
that have applied for state assistance in ascending order of
adjusted wealth per student. The commissioner shall award the full
amount of state assistance to which a district is entitled under
this subchapter, except that the commissioner may award less than
the full amount to the last district for which any funds are
available.
(f) Any amount appropriated for the first year of a fiscal
biennium that is not awarded to a school district may be used to
provide assistance in the following fiscal year.
(g) In this section, "wealth per student" means a school
district's taxable value of property as determined under Subchapter
M, Chapter 403, Government Code, or, if applicable, Section
42.2521, divided by the district's average daily attendance as
determined under Section 42.005.
Added by Acts 1997, 75th Leg., ch. 592, § 1.04, eff. Sept. 1,
1997. Amended by Acts 1999, 76th Leg., ch. 396, § 1.26, eff.
Sept. 1, 1999.
§ 46.007. REFUNDING BONDS.
Acts 2003, 78th Leg., ch. 201, § 1(1) repealed this section
effective September 1, 2004, provided the legislature enacts a law
that creates a comprehensive school finance system.
A school district may use state funds received under this
subchapter to pay the principal of and interest on refunding bonds
that:
(1) are issued to refund bonds eligible under Section
46.003;
(2) do not have a final maturity date later than the
final maturity date of the bonds being refunded;
(3) may not be called for redemption earlier than the
earliest call date of the bonds being refunded; and
(4) result in a present value savings, which is
determined by computing the net present value of the difference
between each scheduled payment on the original bonds and each
scheduled payment on the refunding bonds. The present value
savings shall be computed at the true interest cost of the refunding
bonds.
Added by Acts 1997, 75th Leg., ch. 592, § 1.04, eff. Sept. 1,
1997. Amended by Acts 1999, 76th Leg., ch. 396, § 1.27, eff.
Sept. 1, 1999.
§ 46.008. STANDARDS.
Acts 2003, 78th Leg., ch. 201, § 1(1) repealed this section
effective September 1, 2004, provided the legislature enacts a law
that creates a comprehensive school finance system.
The commissioner shall establish standards for adequacy of
school facilities. The standards must include requirements related
to space, educational adequacy, and construction quality. All new
facilities constructed after September 1, 1998, must meet the
standards to be eligible to be financed with state or local tax
funds.
Added by Acts 1997, 75th Leg., ch. 592, § 1.04, eff. Sept. 1,
1997.
§ 46.009. PAYMENT OF SCHOOL FACILITIES ALLOTMENTS.
Acts 2003, 78th Leg., ch. 201, § 1(1) repealed this section
effective September 1, 2004, provided the legislature enacts a law
that creates a comprehensive school finance system.
(a) For each school year, the commissioner shall determine
the amount of money to which each school district is entitled under
this subchapter.
(b) If the amount appropriated for purposes of this
subchapter for a year is less than the total amount determined under
Subsection (a) for that year, the commissioner shall:
(1) transfer from the Foundation School Program to the
instructional facilities program the amount by which the total
amount determined under Subsection (a) exceeds the amount
appropriated; and
(2) reduce each district's foundation school fund
allocations in the manner provided by Section 42.253(h).
(c) Warrants for payments under this subchapter shall be
approved and transmitted to school district treasurers or
depositories in the same manner as warrants for payments under
Chapter 42.
(d) As soon as practicable after September 1 of each year,
the commissioner shall distribute to each school district the
amount of state assistance under this subchapter to which the
commissioner has determined the district is entitled for the school
year. The district shall deposit the money in the interest and
sinking fund for the bonds for which the assistance is received and
shall adopt a tax rate for purposes of debt service that takes into
account the balance of the interest and sinking fund.
(e) Section 42.258 applies to payments under this
subchapter.
(f) If a school district would have received a greater
amount under this subchapter for the applicable school year using
the adjusted value determined under Section 42.257, the
commissioner shall add the difference between the adjusted value
and the amount the district received under this subchapter to
subsequent distributions to the district under this subchapter.
Added by Acts 1997, 75th Leg., ch. 592, § 1.04, eff. Sept. 1,
1997. Amended by Acts 1999, 76th Leg., ch. 396, § 1.27, eff.
Sept. 1, 1999.
§ 46.010. PROJECTS BY MORE THAN ONE DISTRICT.
Acts 2003, 78th Leg., ch. 201, § 1(1) repealed this section
effective September 1, 2004, provided the legislature enacts a law
that creates a comprehensive school finance system.
If two or more districts apply for state assistance in
connection with a joint project at a single location, each district
is entitled to a guaranteed facilities yield amount of state and
local funds that is 20 percent higher than the amount to which the
district would otherwise be entitled under Section 46.005.
Added by Acts 1997, 75th Leg., ch. 592, § 1.04, eff. Sept. 1,
1997.
§ 46.011. SALE OF INSTRUCTIONAL FACILITY FINANCED WITH
INSTRUCTIONAL FACILITIES ALLOTMENT.
Acts 2003, 78th Leg., ch. 201, § 1(1) repealed this section
effective September 1, 2004, provided the legislature enacts a law
that creates a comprehensive school finance system.
(a) If an instructional facility financed by bonds paid with
state and local funds under this subchapter is sold before the bonds
are fully paid, the school district shall send to the comptroller an
amount equal to the district's net proceeds from the sale
multiplied by a percentage determined by dividing the amount of
state funds under this subchapter used to pay the principal of and
interest on the bonds by the total amount of principal and interest
paid on the bonds with funds other than the proceeds of the sale.
(b) In this section, "net proceeds" means the difference
between the total amount received from the sale less:
(1) the amount necessary to fully pay the outstanding
principal of and interest on the bonds; and
(2) the school district's costs of the sale, as
approved by the commissioner.
Added by Acts 1997, 75th Leg., ch. 592, § 1.04, eff. Sept. 1,
1997. Amended by Acts 1999, 76th Leg., ch. 396, § 1.28, eff.
Sept. 1, 1999.
§ 46.012. APPLICABILITY TO OPEN-ENROLLMENT CHARTER
SCHOOLS.
Acts 2003, 78th Leg., ch. 201, § 1(1) repealed this section
effective September 1, 2004, provided the legislature enacts a law
that creates a comprehensive school finance system.
An open-enrollment charter school is not entitled to an
allotment under this subchapter.
Added by Acts 2001, 77th Leg., ch. 1504, § 30, eff. Sept. 1,
2001.
§ 46.013. MULTIPLE ALLOTMENTS PROHIBITED.
Acts 2003, 78th Leg., ch. 201, § 1(1) repealed this section
effective September 1, 2004, provided the legislature enacts a law
that creates a comprehensive school finance system.
A school district is not entitled to state assistance under
this subchapter based on taxes with respect to which the district
receives state assistance under Subchapter F, Chapter 42.
Added by Acts 2001, 77th Leg., ch. 1156, § 7, eff. Sept. 1, 2001.
Renumbered from V.T.C.A., Education Code § 46.012 by Acts 2003,
78th Leg., ch. 1275, § 2(22), eff. Sept. 1, 2003.
SUBCHAPTER B. ASSISTANCE WITH PAYMENT OF EXISTING DEBT
§ 46.031. RULES.
Acts 2003, 78th Leg., ch. 201, § 1(1) repealed this section
effective September 1, 2004, provided the legislature enacts a law
that creates a comprehensive school finance system.
The commissioner may adopt rules for the administration of
this subchapter.
Added by Acts 1999, 76th Leg., ch. 396, § 1.29, eff. Sept. 1,
1999.
§ 46.032. ALLOTMENT.
Acts 2003, 78th Leg., ch. 201, § 1(1) repealed this section
effective September 1, 2004, provided the legislature enacts a law
that creates a comprehensive school finance system.
(a) Each school district is guaranteed a specified amount
per student in state and local funds for each cent of tax effort to
pay the principal of and interest on eligible bonds. The amount of
state support, subject only to the maximum amount under Section
46.034, is determined by the formula:
EDA = (EDGL X ADA X EDTR X 100) - (EDTR X (DPV/100))
where:
"EDA" is the amount of state funds to be allocated to the
district for assistance with existing debt;
"EDGL" is the dollar amount guaranteed level of state and
local funds per student per cent of tax effort, which is $35 or a
greater amount for any year provided by appropriation;
"ADA" is the number of students in average daily attendance,
as determined under Section 42.005, in the district;
"EDTR" is the existing debt tax rate of the district, which is
determined by dividing the amount budgeted by the district for
payment of eligible bonds by the quotient of the district's taxable
value of property as determined under Subchapter M, Chapter 403,
Government Code, or, if applicable, under Section 42.2521, divided
by 100; and
"DPV" is the district's taxable value of property as
determined under Subchapter M, Chapter 403, Government Code, or, if
applicable, under Section 42.2521.
(b) The existing debt tax rate of the district under
Subsection (a) may not exceed the rate that would be necessary for
the current year, using state funds under Subsection (a), to make
payments of principal and interest on the bonds for which the tax is
pledged.
(c) The amount budgeted by a district for payment of
eligible bonds may include:
(1) bond taxes collected in the current school year;
(2) bond taxes collected in a preceding school year in
excess of the amount necessary to pay the district's share of actual
debt service on bonds in that year, provided that the taxes were not
used to generate other state financial assistance for the district;
or
(3) maintenance and operations taxes collected in the
current school year or a preceding school year in excess of the
amount eligible to be used to generate other state financial
assistance for the district.
Added by Acts 1999, 76th Leg., ch. 396, § 1.29, eff. Sept. 1,
1999. Amended by Acts 2001, 77th Leg., ch. 1156, § 8, eff. Sept.
1, 2001.
§ 46.033. ELIGIBLE BONDS.
Acts 2003, 78th Leg., ch. 201, § 1(1) repealed this section
effective September 1, 2004, provided the legislature enacts a law
that creates a comprehensive school finance system.
Bonds, including bonds issued under Section 45.006, are
eligible to be paid with state and local funds under this subchapter
if:
(1) the district made payments on the bonds during the
2002-2003 school year or taxes levied to pay the principal of and
interest on the bonds were included in the district's audited debt
service collections for that school year; and
(2) the district does not receive state assistance
under Subchapter A for payment of the principal and interest on the
bonds.
Added by Acts 1999, 76th Leg., ch. 396, § 1.29, eff. Sept. 1,
1999. Amended by Acts 2001, 77th Leg., ch. 1156, § 9, eff. Sept.
1, 2001; Acts 2003, 78th Leg., ch. 201, § 40, eff. Sept. 1, 2003.
§ 46.034. LIMITS ON ASSISTANCE.
Acts 2003, 78th Leg., ch. 201, § 1(1) repealed this section
effective September 1, 2004, provided the legislature enacts a law
that creates a comprehensive school finance system.
(a) The existing debt tax rate ("EDTR") under Section 46.032
may not exceed $0.29 per $100 of valuation, or a greater amount for
any year provided by appropriation.
(b) The amount of state assistance to which a district is
entitled under this subchapter may not exceed the amount to which
the district would be entitled at the district's tax rate for the
payment of eligible bonds for the final year of the preceding state
fiscal biennium.
(c) If the amount required to pay the principal of and
interest on eligible bonds in a school year is less than the amount
of payments made by the district on the bonds during the 2002-2003
school year or the district's audited debt service collections for
that school year, the district may not receive aid in excess of the
amount that, when added to the district's local revenue for the
school year, equals the amount required to pay the principal of and
interest on the bonds.
Text of subsecs. (d) and (e) effective until Sept. 1, 2005.
(d) Notwithstanding any other provision of this chapter, if
the appropriation to support newly eligible bonds for the 2003-2004
school year and the 2004-2005 school year is not sufficient to
provide the state aid that school districts are entitled to under
Section 46.032, the commissioner is directed to reduce the $35
guaranteed level of state and local support per student per cent of
tax effort for newly eligible debt only to the level necessary to
fund the sum of the allotments within the appropriated amount. The
guaranteed level for eligible debt through the 2000-2001 school
year is not affected by this adjustment. The commissioner shall
make this determination as soon as practicable, prior to the
beginning of the school year. The decision of the commissioner is
final and may not be appealed.
(e) Subsection (d) and this subsection expire September 1,
2005.
Added by Acts 1999, 76th Leg., ch. 396, § 1.29, eff. Sept. 1,
1999. Amended by Acts 2001, 77th Leg., ch. 1156, § 10, 12, eff.
Sept. 1, 2001; Acts 2003, 78th Leg., ch. 201, § 41, eff. Sept. 1,
2003.
§ 46.035. PAYMENT OF ASSISTANCE.
Acts 2003, 78th Leg., ch. 201, § 1(1) repealed this section
effective September 1, 2004, provided the legislature enacts a law
that creates a comprehensive school finance system.
Section 46.009 applies to the payment of assistance under
this subchapter.
Added by Acts 1999, 76th Leg., ch. 396, § 1.29, eff. Sept. 1,
1999.
§ 46.036. APPLICABILITY TO OPEN-ENROLLMENT CHARTER
SCHOOLS.
Acts 2003, 78th Leg., ch. 201, § 1(1) repealed this section
effective September 1, 2004, provided the legislature enacts a law
that creates a comprehensive school finance system.
An open-enrollment charter school is not entitled to an
allotment under this subchapter.
Added by Acts 2001, 77th Leg., ch. 1504, § 31, eff. Sept. 1,
2001.
§ 46.037. MULTIPLE ALLOTMENTS PROHIBITED.
Acts 2003, 78th Leg., ch. 201, § 1(1) repealed this section
effective September 1, 2004, provided the legislature enacts a law
that creates a comprehensive school finance system.
A school district is not entitled to state assistance under
this subchapter based on taxes with respect to which the district
receives state assistance under Subchapter F, Chapter 42.
Added by Acts 2001, 77th Leg., ch. 1156, § 11, eff. Sept. 1,
2001. Renumbered from V.T.C.A., Education Code § 46.036 by Acts
2003, 78th Leg., ch. 1275, § 2(23), eff. Sept. 1, 2003.
SUBCHAPTER C. REFINANCING
§ 46.061. AUTHORITY OF COMMISSIONER.
Acts 2003, 78th Leg., ch. 201, § 1(1) repealed this section
effective September 1, 2004, provided the legislature enacts a law
that creates a comprehensive school finance system.
(a) The commissioner by rule may provide for the payment of
state assistance under this chapter to refinance school district
debt. A refinancing may not increase the cost to the state of
providing the assistance.
(b) The commissioner may allocate state assistance provided
for a refinancing to Subchapter A, Subchapter B, or both, as
appropriate.
Added by Acts 1999, 76th Leg., ch. 396, § 1.29, eff. Sept. 1,
1999.
