CCA(LEGAL) -

Bonds and Bond Taxes

  1. The construction, acquisition, and equipment of school buildings in the district;
  2. The acquisition of property or the refinancing of property under a contract entered under the Public Property Finance Act (Local Government Code, Chapter 271, Subchapter A), regardless of whether payment obligations under the contract are due in the current year or a future year;
  3. The purchase of the necessary sites for school buildings; and
  4. The purchase of new school buses.

Use of Proceeds for Utilities

Instructional Facilities Allotment

Existing Debt Allotment

Capital Appreciation Bonds

Limitation on Issuance

  1. The bonds have a scheduled maturity date that is not later than 20 years after the date of issuance;
  2. The board has received a written estimate of the cost of the issuance, including:
    1. The amount of principal and interest to be paid until maturity;
    2. The amount of fees to be paid to outside vendors, including vendors who sell products to be financed by the bond issuance;
    3. The amount of fees to be paid to each financing team member; and
    4. The projected tax impact of the bonds and the assumptions on which the calculation of the projected tax impact is based;
  3. The board has determined in writing whether any personal or financial relationship exists between the members of the board and any financial advisor, bond counsel, bond underwriter, or other professional associated with the bond issuance and submitted the determination to the Ethics Commission; and
  4. The board posts prominently on the district's Internet website and enters in the minutes of the board:
    1. The total amount of the proposed bonds;
    2. The length of maturity of the proposed bonds;
    3. The projects to be financed with bond proceeds;
    4. The intended use of bond proceeds not spent after completion of the projects identified;
    5. The total amount of the district's outstanding bonded indebtedness at the time of the election on the bonds, including the amount of principal and interest to be paid on existing bond indebtedness until maturity;
    6. The total amount of the district's outstanding bonded indebtedness, including the amount of principal and interest to be paid until maturity; and
    7. The information received at item 2 above and determined under item 3 above.

Limitation on Use of Proceeds

  1. Items more regularly considered maintenance items, including replacement HVAC units, upgraded plumbing, or similar items; or
  2. Transportation-related items, including buses.

Unspent Proceeds

Total Amount of Capital Appreciation Bonds

Extension

  1. The extension of the maturity date will decrease the total amount of projected principal and interest to maturity; or
  2. The maximum legally allowable tax rate for indebtedness has been adopted and TEA certifies in writing that the solvency of the permanent school fund's bond guarantee program would be threatened without the extension.

Bond Elections

  1. The first Saturday in May; or
  2. The first Tuesday after the first Monday in November.

Call for Election

Election Order

  1. The proposition language that will appear on the ballot;
  2. The purpose for which the bonds are to be authorized;
  3. The principal amount of the bonds to be authorized;
  4. That taxes sufficient to pay the annual principal of and interest on the bonds may be imposed;
  5. The estimated tax rate if the bonds are authorized or the maximum interest rate of the bonds or any series of the bonds, based on the market conditions at the time of the election order;
  6. The maximum maturity date of the bonds to be authorized or that the bonds may be issued to mature over a specified number of years not to exceed 40;
  7. The aggregate amount of the outstanding principal of the district's debt obligations as of the beginning of the fiscal year in which the election is ordered;
  8. The aggregate amount of the outstanding interest on the district's debt obligations as of the beginning of the district's fiscal year in which the election is ordered; and
  9. The district's ad valorem debt service tax rate at the time the election is ordered, expressed as an amount per $100 valuation of taxable property.

Propositions

  1. Sufficient, without limits as to rate or amount, to pay the principal of and interest on said bonds; or
  2. Sufficient to pay the principal of and interest on the bonds, provided that the annual aggregate bond taxes in the district may never be more than the rate stated in the proposition.
  1. The total principal amount of the bonds to be authorized, if approved; and
  2. A general description of the purposes for which the bonds are to be authorized, if approved.

Posting

The election order must be posted:

  1. On election day and during early voting by personal appearance, in a prominent location at each polling place;
  2. Not later than the 21st day before the election in three public places in the boundaries of the district; and
  3. During the 21 days before the election, on the district's Internet website, prominently and together with the notice of the election and the contents of the proposition, if the district maintains an Internet website.

Election Notice

Publication and Posting

Notice to Election Officials

Electioneering and Political Advertising

50 Cent Test for New Debt

Future Taxable Value

Refunding Bonds

Instructional Facilities Allotment for Refunding Bonds

  1. Are issued to refund bonds eligible under Education Code 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 all bonds being refunded; and
  4. Result in a present value savings as defined in Education Code 46.007(4).

Authorized Unissued Bonds

Bond Guarantee Program

Eligibility

Application

  1. The name of the district and the principal amount of the bonds to be issued;
  2. The name and address of the district's paying agent, which means the financial institution designated by a district as its agent for payment of principal and interest on guaranteed bonds; and
  3. The maturity schedule, estimated interest rate, and date of the bonds.

Credit Enhancement Program

  1. As required under the Texas Constitution; or
  2. For assistance in paying debt service.

Eligibility

  1. Bonds must be issued in the manner provided by Education Code 45.054;
  2. Payments of all of the principal of the bonds must be scheduled during the first six months of the state fiscal year;
  3. The district's lowest credit rating from any credit rating agency may not be the same as or higher than that of the School District Bond Enhancement Program;
  4. The bonded debt for which the credit enhancement is sought must be structured so that no single annual debt service payment exceeds two times the quotient produced by dividing the total proposed annual debt service, as defined in 19 Administrative Code 61.1038(b)(10), for the term of the bonds by the number of years in the amortization schedule; and
  5. The district must agree in its application that the total annual debt service on bonds approved for the credit enhancement will be paid on or before August 15 of each state fiscal year.

Application

  1. Include the information required by Education Code 45.055(b), at Bond Guarantee Program—Application, above; and
  2. Be accompanied by a fee set by the State Board of Education. 19 TAC 61.1038(d)(1)

Federal Securities Law

Disclosure Obligations for Bond and Other Debt Offerings

Liability under Federal Securities Law

Continuing Disclosure after Issuing Bonds

Note: In preparing an official statement, a district may reasonably rely on the advice of outside professionals who are also subject to the antifraud provisions, but a district is primarily liable for the content of its official statement and other disclosures. SEC Exchange Act Release No. 36761 (Jan. 24, 1996)

Eustace ISD

CCA(LEGAL)-P

UPDATE 110

DATE ISSUED: 2/9/2018