S.B. No. 389
  relating to the capacity of the permanent school fund bond
  guarantee program.
         SECTION 1.  Section 45.053, Education Code, is amended by
  amending Subsections (a) and (b) and adding Subsection (d) to read
  as follows:
         (a)  Except as provided by Subsection (d), the [The]
  commissioner may not approve bonds for guarantee if the approval
  would result in the total amount of outstanding guaranteed bonds
  exceeding an amount equal to 2-1/2 times the cost value [or market
  value, whichever is less,] of the permanent school fund, as
  estimated by the board and certified by the state auditor.
         (b)  Each year, the state auditor shall analyze the status of
  guaranteed bonds as compared to the cost value [and market value] of
  the permanent school fund. Based on that analysis, the state
  auditor shall certify whether the amount of bonds guaranteed is
  within the limit prescribed by this section.
         (d)  The board by rule may increase the limit prescribed by
  Subsection (a) to an amount not to exceed five times the cost value
  of the permanent school fund, provided that the increased limit is
  consistent with federal law and regulations and does not prevent
  the bonds to be guaranteed from receiving the highest available
  credit rating, as determined by the board. The board shall at least
  annually consider whether to change any limit in accordance with
  this subsection. This subsection may not be construed in a manner
  that impairs, limits, or removes the guarantee of bonds that have
  been approved by the commissioner.
         SECTION 2.  This Act takes effect immediately if it receives
  a vote of two-thirds of all the members elected to each house, as
  provided by Section 39, Article III, Texas Constitution.  If this
  Act does not receive the vote necessary for immediate effect, this
  Act takes effect September 1, 2007.
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
         I hereby certify that S.B. No. 389 passed the Senate on
  March 13, 2007, by the following vote:  Yeas 29, Nays 0.
  Secretary of the Senate    
         I hereby certify that S.B. No. 389 passed the House on
  May 8, 2007, by the following vote:  Yeas 146, Nays 0, two present
  not voting.
  Chief Clerk of the House