DALLAS -- The Texas attorney general's office in delaying approval of new school bonds until a state district judge clarifies part of a broad ruling that upholds a share-the-wealth education finance law while calling for equalization of construction funding.

"We see a potential problem in one portion of the opinion," said Jim Thomassen, public finance section chief for the attorney general's office. But "I expect it could be resolved by early next week."

Thomassen said the attorney general's office submitted a clarification proposal yesterday to state district Judge Scott McCown, who last week issued the latest ruling on a nine-year-old legal dispute involving the redistribution of taxes from rich to poor school districts. McCown ruled that a new school finance law was constitutional as far as it went, but ordered the Legislature to find a more equitable system for capital spending by Sept. 1, 1995, or school bond issuance would be halted.

Thomassen said the judge's opinion crates some confusion in the interim and centers on the judge's discussion of the ability of school districts to continue to issue unlimited taxation bonds and under what circumstances.

For example, Thomassen said districts now can exceed a $1.50 limit on its per capita tax rate if voters approve the increase to issue new bonds or if the district needs to increase the tax rate to pay debt service because its tax base has declined. "It's not clear they can still do that," he said. "Some language in the opinion is too broad brush, and it needs to be clarified."

To correct that, Thomassen said the attorney general's office, in conjuction with some bond and other attorneys in Texas, suggested that clarifications be added to retain the ability of districts to exceed the tax rate limit under those circumstances.

"As far as we know, there is no opposition to the proposal," Thomassen said.

In the meantime, Thomassen said the attorney general's office put on hold approvals for two bond sales this week, Edgewood Independent School District and Humble Independent School District. Bond refundings are not affected, he said.

Bond industry sources said they were confident McCown would agree to the changes, but they decided to postpone some future bond issues until the issue was resolved.

"There is a willingness of the court to deal with the issue," said Leon Johnson, a director at First Southwest Co. in Dallas. "It's looks like a procedural problem, not a substantive issue."

Johnson said First Southwest was delaying several bond issues that were scheduled to close in the near future.

Vincent Matrone, head of the public finance section for Rauscher Pierce Refsnes in Dallas, said he knows of about eight deals in the pipeline that would be affected by the attorney general's office action. However, he said other issuers were contemplating whether to postpone.

"Anytime the market is interrupted for any kind of ambiguity, there is concern," Matrone said.

However, Matrone and others said they did not expect long-term disruption over the problem.

The larger problem could come next year when some wealthier school districts may try to rush their bond issues to market to beat a court-imposed deadline, several sources said, although several others disagreed.

Under the judge's order, the state attorney general's office could not approve any school bond issues after Sept. 1, 1995, if the Legislature does not come up with a more equitable plan for financing capital expenditures.

"This kind of deadline will cause the rich districts to go to the market next year," Dallas bond attorney Ray Hutchison said. "It promotes decision-making for the wrong reasons."

But others said they thought the districts would still be prudent and said much of the rush to market already has occurred before other court-imposed deadlines.

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