18_03 Proposed Amendment to 19 TAC §61.1035
Commissioner's Rules
Proposed Amendment to 19 TAC Chapter 61, School Districts, Subchapter CC, Commissioner's Rules Concerning School Facilities, §61.1035, Assistance with Payment of Existing Debt
Attachments:
I. Statutory Citations (PDF)
II. Text of Proposed Amendment to 19 TAC Chapter 61, School Districts, Subchapter CC, Commissioner's Rules Concerning School Facilities, §61.1035, Assistance with Payment of Existing Debt (PDF)
SUMMARY: The rule action presented in this item was filed as proposed with the Texas Register under the commissioner's rulemaking authority. This item proposes an amendment to 19 TAC Chapter 61, School Districts, Subchapter CC, Commissioner's Rules Concerning School Facilities, §61.1035, Assistance with Payment of Existing Debt. The proposed amendment would update the rule to align with current practice for administering the Existing Debt Allotment (EDA) program and remove obsolete and redundant provisions.
STATUTORY AUTHORITY: Texas Education Code (TEC), §§46.031-46.037 and 46.061.
TEC, §46.031, permits the commissioner of education to adopt rules necessary for the implementation of the TEC, Chapter 46, Subchapter B.
TEC, §46.032, provides for an allotment of state funds to certain school districts to assist with the payments of principal and interest on eligible bonds.
TEC, §46.033, specifies which bonds may be eligible for state assistance.
TEC, §46.034, provides for certain limits on state assistance.
TEC, §46.035, addresses the timing of payments of state assistance to school districts.
TEC, §46.036, clarifies that open-enrollment charter schools are not eligible for state assistance under the TEC, Chapter 46, Subchapter B.
TEC, §46.037, clarifies that school districts are not eligible for state assistance under the TEC, Chapter 46, Subchapter B, for any taxes for which a district receives assistance under the TEC, Chapter 42, Subchapter F.
TEC, §46.061, authorizes the commissioner by rule to provide for the payment of state assistance under the TEC, Chapter 46, to refinance school district debt.
EARLIEST POSSIBLE DATE OF ADOPTION: April 30, 2018.
PROPOSED EFFECTIVE DATE: July 2, 2018.
BACKGROUND INFORMATION AND JUSTIFICATION: The proposed amendment to 19 TAC §61.1035 exercises the commissioner's authority to adopt rules to implement the EDA program under the TEC, Chapter 46, Subchapter B, which assists certain school districts with state support for the payment of principal and interest on eligible bonds. The proposed amendment reflects changes in how the TEA administers this program. Specifically, the following changes would be made.
The proposed changes would simplify the requirements for school districts by removing obsolete requirements to report debt service changes to the TEA in current subsections (a)(1), (b)(3) and (4), (f)(1) and (2), and (g) and to send debt service schedules for interest rate management agreements that are updated with the state information depository and sent electronically to the TEA in current subsection (b)(5).
Rule text that has expired would be removed from current subsections (a)(1) and (c)(2).
Rule text that restates statutory requirements or is redundant would be removed from current subsections (a)(1), (2), and (4); (c)(1)-(3); and (d)(3).
Current subsection (a)(4) would be repealed, and rule text would be removed from current subsection (a)(4)(A)-(D) to clarify that a lease purchase refinanced with a general obligation bond is immediately eligible for consideration for EDA funding.
Current subsection (b) would be divided into new subsections (b) and (c), and rule text would be rearranged, added, or removed to clarify TEA's current practice. New subsection (b) would clarify the provisions applicable to debt service payments used in EDA funding calculations. New subsection (c) would clarify how TEA calculates the amount of excess collections, if any, to be applied to satisfy the EDA local share requirement.
The text of current subsection (c) would be repealed and added as new subsection (d). The new subsection would clarify exclusions applied for purposes of computing the biennial limit to Existing Debt Tax Rate.
Current subsection (d) would be relettered to subsection (e), and new subsection (e)(3) would be added to clarify the data sources used in TEA's payment process.
Current subsection (e) would be relettered to subsection (f).
Current subsection (f) would be relettered to subsection (g), and rule text that doesn't align with TEA's current practice would be removed from relettered subsection (g)(4).
FISCAL IMPACT: The TEA has determined that there are no additional costs to persons required to comply with the proposed amendment. There are no fiscal implications for state and local government beyond what the authorizing statute requires.
The TEA has determined that there is no direct adverse economic impact for small businesses, microbusinesses, and rural communities; therefore, no regulatory flexibility analysis, specified in Texas Government Code, §2006.002, is required. There is no effect on local economy; therefore, no local employment impact statement is required under Texas Government Code, §2001.022. The proposed amendment does not impose a cost on regulated persons and, therefore, is not subject to Texas Government Code, §2001.0045.
GOVERNMENT GROWTH IMPACT: TEA staff has determined that the amendment to §61.1035 would repeal an existing regulation. The amendment would remove the requirement for school districts to send documentation to the TEA when a bond eligible for the EDA is refinanced. The TEA now receives all the information required electronically from the state information depository.
PUBLIC AND STUDENT BENEFIT: The proposed amendment would simplify the administration of the EDA program for the TEA and school districts. State assistance for this program will be more timely and with less administrative burden for school districts.
PROCEDURAL AND REPORTING IMPLICATIONS: The proposed amendment would reduce reporting requirements for school districts by removing the requirement for school districts to send documentation to the TEA when a bond eligible for the EDA is refinanced.
LOCALLY MAINTAINED PAPERWORK REQUIREMENTS: The proposed amendment would reduce locally maintained records as the reporting burden to the TEA is decreased.
PUBLIC COMMENTS: The public comment period on the proposal begins March 30, 2018, and ends April 30, 2018.
ALTERNATIVES: None.
OTHER COMMENTS AND RELATED ISSUES: A request for a public hearing on the proposal submitted under the Administrative Procedure Act must be received by the commissioner of education not more than 14 calendar days after notice of the proposal has been published in the Texas Register on March 30, 2018.
Staff Members Responsible:
Leo Lopez, Associate Commissioner, School Finance / Chief School Finance Officer
Al McKenzie, Director, State Funding