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John Cornyn
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September 5, 1995

To All Bond Counsel:

Re: Design/Build; Bond Review Board Requirements; Surety Bonds

1. Design/Build. Section 44.031 Tex. Educ. Code now provides that a "design/build contract" is one of the types of contracts that may be used for the acquisition of goods and services by a school district. Inasmuch as the method used must provide the "best value" for the acquisition, it is our view that any use of a design/build contract must be by way of requests for proposals or similar competitive methodology for selection of the vendor to provide the facility and/or the financing. We will, therefore, require satisfactory evidence of compliance with this standard when reviewing lease/purchase or similar financings for school districts.

2. Surety Bonds. Please be reminded that the use of a surety bond with a separate obligation to repay amounts drawn under the surety bond for a reserve fund is authorized only for those issuers qualified to use Tex. Rev. Civ. Stat. Ann. art. 717q.

3. Bond Review Board Information Requirements. Attached is a form document showing information requested by the Bond Review Board pursuant to H.B. 1564, 74th Legislature, Regular Session (Tex. Laws 1995, ch. 383, at 2930). This information is to be included with all transcripts submitted for bonds and other obligations sold on or after September 1, 1995.

Very truly yours,
Jim Thomassen
Assistant Attorney General
Chief, Public Finance Division


Attachment: Additional Transcript Requirements Pursuant to HB 1564

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