what they purport to be on their face and under the statutespursuant to which they are issued, but are authorizedextensionsand continuationsof the obligationsrepresentrrd by the bonds refunded; that refunding bonds do not create new i.cbtbut merely continue an existing debt. Id. 1267, at 301. - As you note, articleVII, section5 of the Texas Constitutionwas amendedin 1983 to provide:
(b) The legislatureby law may provide for using the permanent school fund and the income from the permeue~~t school Tund to guaranteebonds issuedby schoold.istricts.
Anticipating adoption of the constitutionalamendment, the legislaturein 1983 enacted statutory provisions to Implement the new authority- statuteswhi.chare now codifiedas subchapterE of the
1. Subsection(a) of that constitutionalprovision establishes as the permanentschool fund "[tlhe principalof all bonds and other funds, and the principalarising from the sale of lands hereinbefore set apart to said school fund," and establishesas the available school fund (to be appliedtwuu~.lly to the supportof the publfc free schools) "all the therefromand the taxes herein authorizedand levied."
p. 2105 Mr. WilliamN. Kirby - Page 3 (JM-460)
See Acts 1983, 68th Leg., ch. 154, at 671. Texas Education Code. --. Section 20.902 of the Edumtion Code provides that upon approvalby the commissionerof educazion."bonds Issued under SubchapterA of this chapter [chapter201,' includingrefundingbonds" are guaranteed by the PermanentSchool Fund. Section20.903(a)statesthat
[tlhe commissiov~rmay not approve bonds for guarantee if the approval would result In the total amount of outstanding guaranteed bonds exceedingan amount equal to two times the cost value or market value, whichever is less, of the permanent scho,,:tfund, exclusive of real estate. . . . (Emphasisadded).
That limitationhas promptlrd your question.
Tou accompaniedyour request for an opinion with information pertainingto a particularmethod of "refunding"which, we understand, is the focus of your concern, and we will limit our discussion accordingly. In that connection,you advise:
At the time the originalbonds of the district were issued, the governing body of the school district made provision for the payment of the bonds by the levy of an ad valoram tax which was pledged to the payment of the principal of and intereston the hcmds. Section20.01 of the Texas EducationCode.
By reason of the refunding,the originalbonds are no longer psgable from ad valoram taxation, but are payable :?romthe principalof and interest on the direct obligationsof the United States government purchased with the proceeds of the refundingbonds and other moneys belongingto the schooldistricts (whichhave been depositedunder the escrowagreementto which referenceis made in the statute).
2. SubchapterA of chapter20 of the EducationCoda, consisting of sections 20.01 through 20.06, concerns school district tax bonds and maintenancetaxes. Section 20.01 authorizesschool districtsto issue negotiablecoupon bonds to acquire sites for, constmct, and equip school buildings,and to levy ad valoram taxes for their pay- ment. Section 20.05(b)provides for the issuanceof refundingbonds payable from ad valoram taxes "to refund or refinanceall or any part of any district'soutstani&ngbonds" without an electionunless the Texas Constitutionrequiresone.
p. 2106 Mr. WilliamN. Kirby - Page 4 (JM-460)
Section20.05 of the UducationCode is part of subchapterA, the subchapter which concerns the tar bonds that nay be guaranteed