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SB 1382

Relating to the eligibility of certain school districts with outstanding debt for the guarantee of a bond by the permanent school fund.

89th Legislature (2025) Introduced by Mayes Middleton

SB 1382 expands Texas school bond guarantee eligibility to districts with outstanding debt, potentially lowering borrowing costs for capital projects in financially-stressed districts.

Referred to Education K-16
#bonds(s6060) #education--primary&secondary--finance(i0250)
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Bill Summary · SB 1382

Legislative bill overview

SB 1382 modifies Texas's permanent school fund bond guarantee program to allow school districts with outstanding debt to access bond guarantees they were previously ineligible to receive. The bill adjusts eligibility criteria that currently exclude districts based on existing debt levels, potentially expanding access to lower-cost financing for school construction and facility projects.

Why is this important

School districts use bond guarantees from the permanent school fund to reduce borrowing costs for capital projects like building schools and renovating facilities. Expanding eligibility could help debt-burdened districts—often in lower-income areas—access more affordable financing. However, this change affects how the permanent school fund manages risk and allocates its limited guarantee capacity across the state.

Potential points of contention

  • Risk management: Critics may argue that guaranteeing bonds for already-indebted districts increases default risk and strains the permanent school fund's financial stability
  • Equity concerns: Supporters may contend the current restrictions unfairly penalize districts that took on necessary debt for infrastructure, while opponents worry about moral hazard
  • Fund capacity: Questions about whether expanding eligibility dilutes the guarantee benefit for districts currently able to access it, or if the fund has sufficient capacity for broader access

Compiled from official sources — confirm details with the bill’s official record.

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