State Rep. Tony Dale is trying to cut back on the use of high-risk loans by Texas school districts.
Dale announced a new bill Monday that would limit the use of Capital Appreciation Bonds, which are loans that don't require any payments until the end of the bond.
The tradeoff is those types of bonds usually come with high interest rates, and if those school districts don't grow as predicted, it can leave them in a financial bind.
Dale says schools can't gamble with that kind of money.
"Really, these are bets,” he said. “You're betting that your school district is going to continue to grow rapidly; you're betting that their property values will continue to go up because it's pretty hard for anybody to look 30 or 40 years in the future and say what the economy is going to look like, what your community's going to look like, and if you're wrong, you're going to have a very large bill."
House Bill 2099 limits the use of Capital Appreciation Bonds to only high-enrollment growth districts and caps the maximum bond at 25 percent of the organization's total debt.
It would also require a referendum for any purchase of one of those bonds and would mandate the funding only go to land purchases and school construction.