Senate Bill 301

The Specific Statutes added by 1995’s Senate Bill 301 Were: 360.106, and 360.111 to 360.118.

FIRST REGULAR SESSION
[TRULY AGREED TO AND FINALLY PASSED]
HOUSE SUBSTITUTE FOR
HOUSE COMMITTEE SUBSTITUTE FOR
SENATE SUBSTITUTE NO. 2 FOR
SENATE BILL NO. 301
88TH GENERAL ASSEMBLY

L11 26.1 4T

AN ACT

To repeal sections 160.534, 165.091, 166.275, 166.300, 360.015 and 360.106, RSMo 1994, relating to the funding of certain capital improvements projects for school districts, and to enact in lieu thereof nine new sections relating to the same subject, with an emergency clause.

Be it enacted by the General Assembly of the State of Missouri, as follows:

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EXPLANATION—Matter enclosed in bold-faced brackets [thus] in this bill is not enacted
and is intended to be omitted in the law.
Section A. Sections 160.534, 165.091, 166.275, 166.300, 360.015 and 360.106,
RSMo 1994, are repealed and nine new sections enacted in lieu thereof, to be known
as sections 160.534, 164.303, 165.091, 166.275, 166.300, 360.015, 360.106, 360.111 and
1, to read as follows:
160.534. For fiscal year 1996 and each subsequent fiscal year, any amount [not
in excess of fifty million dollars] of the excursion gambling boat proceeds deposited
in the gaming proceeds for education fund in excess of the amount transferred to
the school district bond fund as provided in section 164.303, RSMo, shall be
transferred to the state school moneys fund. Such moneys shall be transferred on a
monthly basis and shall be distributed in the manner provided in section 163.031,
RSMo[, and any proceeds deposited in the gaming proceeds for education fund in excess
of fifty million dollars shall be transferred to the school building revolving fund
established under section 166.300, RSMo].
164.303. There is hereby established in the state treasury the “School
District Bond Fund”. Such amounts as may be necessary to fund the annual
requests submitted by the health and educational facilities authority to fund
the payment of costs and grants as provided in subsection 7 of section 360.106,
RSMo, and section 360.111 of this act and necessary costs for administration
of those provisions, but not to exceed seven million dollars per year, shall be
transferred by appropriation to the fund from the gaming proceeds for
education fund before any amounts in the gaming proceeds for education fund
are transferred to the state school moneys fund, as provided in section 160.534,
RSMo. Moneys deposited in the school district bond fund shall be used by the
health and educational facilities authority, subject to appropriation, to fund
the payment of costs and grants as provided in subsection 7 of section 360.106,
RSMo, and section 360.111 of this act and necessary costs for adninistration
of those provisions. Notwithstanding the provisions of section 33.080, RSMo,
to the contrary, moneys in the fund shall not be transferred to the credit of
the general revenue fund at the end of each biennium.
      165.091. No money belonging to the school district shall be paid by any depositary
or from any investment account maintained pursuant to section 165.051 except
upon the check of the treasurer and president of the board of the school district or
order for payment duly issued by the treasurer. The board, by resolution, may direct
that the signatures be affixed to the checks in facsimile in the manner and with the
effect provided in sections 105.273 to 10D.278, RSMo.
166.275. If the total amount appropriated by the state to school districts, in
accordance with a judgment or order based on the equal protection clause of [article
XIV of] the fourteenth amendment to the Constitution of the United States, for
fiscal year 1996 or any subsequent fiscal year is less than the amount appropriated for
the same purpose in fiscal year 1994, any amount of the difference, [not to exceed
fifty million dollars,] in addition to any unexpended appropriation for the prior
fiscal year that results in additional unobligated resources for the state
beginning in fiscal year 1997, necessary to fund the district entitlements under
section 163.031, RSMo, with a district entitlement proration factor no less than one,
shall be transferred to the state school moneys fund and distributed in the manner
provided in section 163.031, RSMo[, and any remaining amount of the difference shall
be transferred to the school building revolving fund established under section 166.300].
166.300. 1. As used in this section, the following words and phrases shall mean:
(1) “Capital improvement projects”, expenditures for lands or existing buildings,
improvements of grounds, construction of buildings, additions to buildings, remodeling
of buildings and initial equipment purchases;
(2)”School facility”, a structure dedicated primarily to housing teachers and
students in the instructional process, but shall not include buildings dedicated primarily
to administrative and support functions within the school.
2. There is hereby created a revolving fund to be known as the “School Building
Revolving Fund”. [For all years, no more than four hundred forty million dollars shall
be transferred under section 160.534, RSMo, and section 166.275 from the gaming
proceeds for education fund] Such moneys as may be appropriated to the fund
shall be deposited into the school building revolving fund. After a fund balance has
been established by prior years’ deposits and interest, school districts may submit
requests for loans and grants from the revolving fund for specific projects consistent
with rules and regulations of the state board of education and subsection 3 of this
section, except that no school district may be permitted to receive a loan from the school
building revolving fund without first submitting a long-range capital improvements
plan.
3. To be eligible for loans or grants authorized by this section:
(1) A school district shall meet the minimum criteria for state aid and for increases
in state aid established pursuant to section 163.021, RSMo;
(2) A school district shall provide a program which is accredited by the state board 23 of
education for grades kindergarten through twelve; and
(3) A school district shall not incur a total debt, including short-term debt and
bonded indebtedness in excess of ten percent of the guaranteed tax base for the current
payment year multiplied by the number of eligible pupils in the district in the preceding
year.
4. If the balance in the school building revol~ing fund is insufficient to fund project
plans for capital improvements, applications shall be funded based upon a priority
ranking. Ranking of the projects shall be based upon the following variables:
(1) A rating of provisionally accredited or unaccredited as determined by the state
board of education pursuant to section 161.092, RSMo, based upon the condition and
adequacy of facilities pursuant to section 163.023, RSMo, and section 160.538, RSMo;
(2) Equalized assessed valuation per eligible pupil;
(3) Increasingenrollment;
(4) Age or condition of facility; and
(5) Building destruction due to fire or natural disaster.
5. The state board of education shall promulgate, by rule, the methodology for
prioritizing projects based upon these variables.
360.015. As used in sections 360.010 to 360.140, unless the context clearly
requires otherwise, the following terms mean:
(1)”Authority”, the health and educational facilities authority of the state of 4 Missouri created
by sections 360.010 to 360.140;
(2) “Costs”, as applied to health or educational facilities financed in whole or in
part under the provisions of sections 360.010 to 360.140 includes the sum total of all
reasonable or necessary expenses incidental to the acquisition, construction,
reconstruction, repair, alteration, improvement, and extension of the facilities,
including without limitation the expense of studies and surveys; land title and mortgage
guaranty policies; architectural and engineering services; legal, organizational,
marketing, or other special services; financing, acquiring, demolishing existing
structures, constructing, equipping, and developing the sites of new and rehabilitated
buildings; rehabilitating, reconstructing, repairing, or remodeling existing buildings;
provisions for working capital; reserves for principal and interest and for extensions,
enlargements, additions, replacements, renovations, and improvements; and all other
necessary and incidental expenses including interest during construction on bonds
issued to finance the facilities and for a period subsequent to the estimated date of
completion of the facilities;
(3) “Educational facilities”, a structure suitable for use as a dormitory or other
housing, including housing for staff members, dining hall, student union,
administration building, academic building, library, laboratory, place in which to
conduct research, classroom, place for athletic activities, p]ace in which to provide
health care, place in which to house maintenance equipment and supplies, storage
place, and place in which to locate utilities, as well as other structures or appurtenances
related thereto required or useful for the instruction of students in the conducting of
research at, or the operation of an educational institution, as defined in sections 360.010
to 360.140, including parking lots, garages, and other buildings or structures essential
or convenient for the orderly conduct of such an institution and also including
furnishings, equipment, machinery, and appurtenances necessary or convenient for the
operation of a particular service or structure in the manner for which its use is
intended, but shall not include such items as books, fuel, supplies, or other items which
customarily are deemed to constitute a current operating expense, and shall not include
any property used or to be used for sectarian instruction or study or as a place for
religious worship or any property used or to be used primarily in connection with any
part of a program of a school or department of divinity of any religious denomination;
(4)”Educational institution”, any public or private association, corporation,
institution, partnership, limited partnership, joint venture or other entity, or any public
association, corporation or institution which is, or is owned and operated by, a political
subdivision of the state of bIissouri, not operated for private or corporate profit
authorized by law to provide or operate educational facilities and to provide a program
of education in the state of Missouri; and any state educational institution as defined
in subdivision (5) of section 176.010, RSMo, and “participating educational institution”,
any such educational institution which, pursuant to the provisions of sections 360.010
to 360.140, undertakes the financing and construction or acquisition of educational
facilities or undertakes the refunding or refinancing of outstanding obligations, of a
mortgage, or of advances or loans as provided in and permitted by sections 360.010
to 360.140;
(5) “Health facilities”, a structure or building suitable for use as a hospital, clinic,
nursing home, home for the aged or infirm, [place providing] or other health care
facility, laboratory, laundry, residence facility or housing for nurses, doctors, interns,
staff members, employees, students at such health facilities or their immediate families,
and for physically or mentally handicapped persons, place for administrative offices,
place in which to conduct research, place in which to house maintenance equipment
and supplies, storage place, place in which to locate utilities, auditorium, dining hall,
place for food service and preparation, place in which to house fire fighting equipment,
place in which to provide mental and physical health care and dental care, nursing
school, medical teaching school, and place in which to house offices; parking lots,
garages, and buildings or structures in which to house supporting services;-and all
necessary, useful, and related furnishings, equipment, machinery, and appurtenances,
or other assets, tangible or intangible, including but not limited to assets
related to health delivery systems or networks which are necessary or useful
in the development, establishment or operation of a participating health
institution; including without limitation the acquisition, preparation, and development
of all lands necessary or convenient as a site or sites for any of the foregoing, but [shall
not include such items as fuel, supplies, or other items which customarily are deemed
to constitute a current operating expense, and] shall not include any property used
or to be used for sectarian instruction or study or as a place for religious worship or
any property used or to be used primarily in connection with any part of a program
of a school or department of divinity of any religious denomination;
(6) “Health institution”[,]:
Any public or private association, corporation, institution, partnership, limited
partnership, joint venture or other entity, or any public association, corporation or
institution which is, or is owned and operated by, a political subdivision of the state
of Missouri, not operated for private or corporate profit authorized by law to provide
or operate health facilities in the state of Missouri; [and “participating health
institution”, any such health institution v.hich, pursuant to the provisions of sections
360.010 to 360.140, undertakes the financing and construction or acquisition of health
facilities or undertakes the refunding or refinancing of outstanding obligations, of a
mortgage, or of advances or loans as provided in and permitted by sections 360.010
to 360.140;]
      (b) Any network or organization of health care providers, however
organized; any integrated health care deliverv system; any joint venture,
partnership or similar arrangement between or among health care providers;
any health care purchasing alliance; any health insurers and third-party
administrators which are participants in a system, network, joint venture, or
partnership that provides health services; any organization which, as its
primary purpose, provides supporting services to one or more health
institutions; and any foundation which supports a health institution or
promotes and encourages health policy or medical research and public health;
and
   (c) Any of the entities listed in paragraph (a) or (b) of this subdivision
whether operated for profit or not operated for private or corporate profit;
      (7)”Missouri college savings bonds”, bonds, notes or other evidences of
indebtedness issued pursuant to sections 360.010 to 360.140 and designated as such;
      (8) “Partieipating health institution”, any health institution which,
pursuant to the provisions of sections 360.010 to 360.140, undertakes the
financing and construction or acquisition of health facilities or undertakes the
refunding or refinancing of outstanding obligations, of a mortgage, or of
advances or loans as provided in and permitted by sections 360.010 to 360.140;
      [(8)] (9) “Revenues”, with respect to health or educational facilities, the rents,
fees, charges, and other income derived from the operation of the facilities.
360.106. 1. As used in this section and section 360.111 of this act, the
following terms mean:
      (1) “Funding agreement”, any loan agreement, financing agreement or
other agreement between the authority and a participating district under this
section, providing for the use of proceeds of, security for, and the repayment
of, school district bonds, and shall include a complete waiver by the
participating district of all powers, rights and privileges conferred upon the
participating district to institute any action authorized by any act of the
Congress of the United States relating to bankruptcy on the part of the
participating district;
(2) “Participating district”, with respect to a particular issue of bonds,
notes or other financial obligations, any school district and any public
community junior college in this state which voluntarily enters into a funding
agreement with the authority pursuant to this section;
      (3) “School district bonds”, any bonds, notes or other obligations issued
by the authority for the purpose of making loans to, purchasing the bonds
or notes of or otherwise 1,y agreement using or providing for the use of the
proceeds of the obligations by a participating district under this section and
all related costs of issuance of the obligations including, but not limited to,
all costs, charges, fees and expenses of undervvriters, financial advisors,
attorneys, consultants, accountants and of the authority.
      2. In addition to other powers granted to the authority by sections 360.010 to
360.140, the authority shall have the power to issue school district bonds or notes
for the purpose of making loans to, or purchasing the [notes of,] bonds, notes or
other financial instruments of:
      (1) Any school district or any public community junior college in this state for the
use of the various funds of such school district or public community junior college for
any lawful purpose[.]; and
      (2) Any school district in this state with respect to obligations issued by
such school district pursuant to sections 164.121 to 164.301, RSMo, or otherwise
by law.
3. In connection with the issuance of school district bonds pursuant to the
powers granted in this section, the authority shall have all powers as set forth
elsewhere in sections 360.010 to 360.140, and the provisions of sections 360.010
to 360.140 shall be applicable to the issuance of school district bonds to the
extent that they are not inconsistent with the provisions of this section.
      4. School district bonds [or notes] issued pursuant to this section may be secured
by a pledge of payments made to the authority by the [school] participating district
[or public community junior college], by the bonds or notes of the [school]
participating district [or public community junior college], or by a pooling of such
payments, bonds or notes of two or more of such participating [school] districts [or
public community junior colleges.] or as otherwise set forth in the funding
agreements.
      5. The authority may invest any funds held pursuant to powers granted under this
45 section, which are not required for immediate disbursement, in any investment
46 approved by the authority and specified in the trust indenture or resolution pursuant
47 to which such bonds or notes are issued ~vithout regard to any limitation otherwise
48 imposed by section 360.120[.] or otherwise by law; provided, however, that each
participating district shall receive the earnings, or a credit for such earnings,
to the extent any such amounts invested are attributable to a particular
participating district.
      6. (1) In connection with school district bonds, upon certification by the
authority to the commissioner of education and the state treasurer that the
funding agreement provides for consent by a participating district for direct
deposit of its state payments to the trustee, the state treasurer shall transfer,
but only out of funds described in this section, directly to the trustee for such
school district bonds, the amounts needed to pay the principal and interest
when due on the school district bonds attributable to a particular
participating district. Such transfers for any school district bonds attributable
to a particular participating distlict shall only be made out of, and to the
extent of, the state payments and distributions from all funds to be made by
the state to such participating district pursuant to sections 1G3.011 to 163.195,
RSMo, and the distributions from the fair share fund to be made by the state
to such participating district pursuant to section 149.016, RSMo. Any such
transfer by the state on behalf of a participating district shall discharge the
state’s obligation to make such state payments to such participating district
to the extent of such transfer;
      (2) A participating district shall w-ithdraw amounts from any of its funds
established pursuant to section 165.011, RSMo, to the extent such amounts
could have been used to make the payments made on its behalf by the state
treasurer as provided in subdivision (1) of this subsection. Notwithstanding
any provisions of section 108.180, RSMo, to the contrary, such amounts shall
be deposited into the participating district’s funds as provided by law in lieu
of the state payments transferred to the trustee under the funding agreement;
      (3) The authority shall from time to time develop guidelines containing
certain criteria with respect to participating school districts and with respect
to the issuance of school district bonds;
      (4) Transfers made under this subsection pursuant to a school district’s
participation in a funding agreement under this section shall be made at no
cost to the school district.
      7. The authority shall provide for the payment of costs of issuance, costs
of credit enhancement and any other costs or fees related to the issuance of
any school district bonds other than reserve funds, out of the proceeds thereof
or out of amounts distributed annually to the authority pursuant to sections
160.534 and 164.303, RSMo. The authority shall annually submit a request for
funding of such costs to the cornmissioner of education in such form and at
such time as he may request. A copy of such request shall be forwarded to
the commissioner of administration. The authority shall provide for the
payment of costs pursuant to this subsection only for bonds issued for the
purpose of financing construction or renovation projects approved by voters
after January 1, 1995, or refinancing construction or renovation projects or
for reSnance of lease purchase obligations with general obligation bonds.
      8. Any refunding or refinancing of existing bonds of a school district
under this section shall have a net present value savings of at least one and
one-half percent of the par amount of the refunded bonds.
      9. The commissioner of education shall serve as an ex officio, nonvoting, advisory
member of the authority solely w~th regard to the exercise of powers granted pursuant
to this section.
10. Nothing in this section or section 360.111 of this act shall be construed
to relieve a school district of its obligation to levy a debt service levy or capital
projects levy sufficient to retire any obligation of the district as otherwise
provided by law.
11. Any professional services provided in connection with the sale of such
bonds pursuant to this section, including, but not limited to, underwriters,
bond counsel, underwriters’ counsel, trustee and financial advisors, shall be
obtained through competitive bidding. The initial bid for professional services
shall be for a period of not longer than two years, and thereafter such bids
shall be awarded for a period not longer than one year.
12. The authority shall review the cost effectiveness of the program
established under this section and section 360.111 of this act and shall, on or
before the fifteenth of January of each year, provide a report to the general
assembly which shall contain a report on the program, the authority’s findings
and a recommendation of whether this section should be repealed,
strengthened or otherwise amended.
360.111. 1. Any school district which is not a participating district, as
defined in section 360.106 of this act, with respect to a particular issue of its
bonds, notes or other financial obligations may participate with the authority
in a direct deposit agreement with respect to such issue of bonds, notes or other financial
obligations. A direct deposit agreement under this section shall
satisfy all requirements of subsection 6 of section 360.106 of this act with
regard to funding agreements of participating districts, and such school
district shall be subject to all requirements applicable to participating
districts under subsections 6 and 9 of section 360.106 of this act and shall have
all powers granted to participating districts under subsection 6 of section
360.106 of this act. A direct deposit agreement under this section shall include
a complete waiver by the school district of all powers, rights and privileges
conferred upon the school district to institute any action authorized by any
act of the Congress of the United States relating to bankruptcy on the part
of the school district. No school district shall be precluded from participation
with the authority pursuant to section 360.106 of this act with respect to any
particular issue of bonds, notes or other financial obligations on the basis of
the district’s participation with the authority in a direct deposit agreement
pursuant to this section with respect to any other issue of bonds, notes or
other financial obligations.
2. The authority shall serve as administrator for any issuance pursuant
to this section. The authority, the commissioner of education and the state
treasurer shall be authorized to take all actions with regard to a school
district which has a direct deposit agreement under this section as such
persons are authorized to take such actions with respect to a participating
district under subsection 6 of section 360.106 of this act.
3. Any school district which has a direct deposit agreement with the
authority pursuant to this section shall be eligible to receive a one-time grant
for each issue based upon the par amount of general obligation bonds issued
for the purpose of financing construction or renovation projects approved by
voters after January 1,1995, or refinancing construction or renovation projects
or for refinance of lease purchase obligations with general obligation bonds.
4. Until July 1, 1997, the grant amount for a school district under
subsection 3 of this section shall be the lesser of two percent of the par amount
of the bonds issued or the actual costs of issuance as determined by the
authority.
5. On or before July 1, 1997, and every tu o years thereafter, the authority
shall determine the ueighted average, actual cost of issuance percentage for
issuances under section 360.106 of this act during the two years immediately
preceding the date such determination is required.
6. On and after July 1, 1997, the grant amount for a school district under
subsection 3 of this section shall be the lesser of the most recent ueighted
average, actual cost of issuance percentage, as determined by the authority
pursuant to subsection 5 of this section, times the par amount of the bonds
issued or the actual costs of issuance as determined by the authority.
7. Transfers made pursuant to a school district’s participation in a direct
deposit agreement under this section shall be made at no cost to the school
district.
8. Payment of grants under this section shall be made from funds
appropriated for such purpose under section 164.303, RSMo. Payment shall be
authorized by the commissioner of education upon receipt of the closing legal
opinion for the bonds by the commissioner of education and a certification
by the school district that the funds will be used for costs relating to projects
approved under and satisfying the qualifications and requirements of
subsection 3 of this section.
9. Any refunding or refinancing of existing bonds of a school district
under this section shall have a net present value savings of at least one and
one-half percent of the par amount of the refunded bonds.
10. If the amount of funding available for grants under this section is less
than the total amount of grants distributable under this section for qualifying
issues, first priority for funding of grants shall be given to qualifying issues
for financing of construction or renovation projects.
11. The authority may invest any funds held pursuant to powers granted
under this section, which are not required for immediate disbursement, in any
investment approved by the authority; provided, however, that each school
district shall receive the earnings, or a credit for such earnings, for any such
amounts invested which are attributable to the district.
Section 1. Nothing in sections 360.106 and 360.111 of this act shall be
construed to apply to obligations issued to finance new lease purchase
agreements.
Section B. Because of the need to facilitate the financing mechanisms for certain
school districts in this state, section A of this act is deemed necessary for the immediate
preservation of the public health, welfare, peace and safety, and is hereby declared
to be an emergency act within the meaning of the constitution, and section A of this
act shall be in full force and effect upon its passage and approval