DALLAS -- After a three-month lull in state issuance, two Texas school districts yesterday brought to market the largest issues since lawmakers implemented a new wealth-sharing education finance system in April.

The two issues -- which total $46 million -- are the biggest since more than $1 billion of bonds were sold in the first quarter.

While some officials believe the deals signal an increase in school bonds, many say large-scale issuance is likely to remain sparse until a legal challenge to the new finance system is resolved.

"Even though districts can legally issue debt, I think some have a psychological block until the school case is resolved," a Dallas bond lawyer said. "The ones that will issue now are the ones that have building programs that cannot wait."

The Irving Independent School District yesterday priced #34 million of Series 1991 B and C bonds, while the Duncanville Independent School District marketed $12 million of unlimited tax bonds.

Mel Schonhorst, first vice president at Dallas-based Rauscher, Pierce, Refsnes, the financial adviser to both districts, said the issues were authorized by voters before the Legislature adopted a new school finance system in April.

The two issues add up to more than the $35.5 million of school bonds sold by nine districts since the new system was implemented in mid-April.

So far this year, Texas schools have issued $1.183 billion of bonds. That total is already 52% higher than the $779.6 million sold in all of 1991.

Another four issues totaling $38.8 million are scheduled for sale by July 9, including a $30 million issue by the Arlington Independent School District.

Many market observers speculate that total volume by Texas schools could double the numbers from a year ago and reach $1.5 billion by yearend.

"I think there is a second push to market waiting to happen, but what it's waiting on, I can't say for certain," said a Houston investment banker. "Need has always been the self-regulator for schools, and I think that's going to be true."

Some believe districts were waiting for Gov. Ann Richards to sign H.B. 2885, the technical corrections legislation to the school reform act. Others say schools are waiting for a definite sign from the courts on the contested status of the newest fundign formula.

"Obviously, we can't wait forever to see what the courts are going to do," Mr. Schonhorst said. "They could be another three years."

Some districts are getting creative to deal with the uncertainty. For instance, the Irving schools late next month expect to seel $20 million of variable-rate bonds.

Dale Henderson, senior vice president and manager of public finance at Rauscher Pierce, said that structure will enable the district to fund its capital program under the new law without locking into a traditional long-term bond mode.

Travis County District Judge Scott McCown this week is expected to conclude hearings on the constitutionality of the new system. Property-rich districts say the plan is a statewide property tax -- which is forbidden by statute.

The new law, which was ordered by the Texas Supreme Court, establishes a maximum property tax rate of $1.50 by 1994. However, new countywide taxing districts would collect and redistribute $1 of that total levy.

Because the tax wealth would be redistributed on a per capita basis, rich schools probably would see their taxes increase, while the amount of money they have to spend would decline.

While the judge is expected to issue a ruling by early July, the uncertainty over how schools will be financed has made some districts skittish about issuing bonds.

Because the county-wide districts are new, some experts believe dozens of Texas schools could issue seldom-used tax and revenue anticipation notes by late August.

Chuck Kobdish, a bond lawyer at McCall, Parkhurst & Horton of Dallas, said schools will use notes to ensure that they have adequate operating funds until it is clear how the new districts will distribute money.

Investment bankers say it is too early to tell if the struggle for a fair funding system will also make investors nervous.

Mr. Schonhorst said that because his firm's two clients were issuing bonds grandfathered from the new law, the pricings were not expected to be affected.

The bonds were still unlimited tax obligations that have a triple-A rating because they are secured by the Texas Permanent School Fund, he said, aiding, "There is no weakening of the credit."

The same should be true for those districts issuing bonds that are not grandfathered after the technical corrections bill made it possible for most future debt to be issued as unlimited tax bonds.

So far, no Texas school has tested how receptive the market is to bonds issued under the new law. Mr. Schonhorst said that could happen by August.

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