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House Bill 3226 |
House Author: Branch et al. |
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Effective: 6-15-07 |
Senate Sponsor: West, Royce |
The Education Code requires the commissioner of education to notify a school district when the commissioner finds that the district's taxable value of property per pupil exceeds a specified equalized wealth level. A district identified as having excess per-pupil property wealth must exercise one of five options to reduce its per-pupil property wealth or face a state action such as detachment of territory or mandatory consolidation. District options, some of which require an election to obtain voter approval for the redistribution of excess local revenue, include sending local tax revenue to the state to purchase attendance credits. In 2006, when the Texas Legislature reduced local property taxes by compressing school district tax rates, it included a "hold harmless" provision providing additional state funds to districts to offset local revenue lost as a result of the required tax rate compression. It also exempted a property wealthy district entitled to state revenue under that hold harmless provision from having to send recapture funds to the state if the funds sent to the state and the hold harmless funds received from the state would offset. However, a district newly identified as a property wealthy district would still be required to hold an election on the redistribution of revenue subject to recapture, even if the amount of recapture funds it sent to the state was less than or equal to the district's entitlement under the hold harmless provision. House Bill 3226 amends the Education Code to require the commissioner, on the initial identification of a school district as having a wealth per student for a school year above the equalized wealth level (for the 2006-2007 or subsequent school year), to (1) estimate the amount of hold harmless state funds to which the district is entitled for that school year and the cost to the district to purchase the amount of attendance credits needed to reduce its per-pupil wealth to the equalized wealth level for that same year; and (2) notify the district if the amount of hold harmless state funds to which it is entitled is greater than the cost of the needed credits. The district then, without a local election, may authorize the commissioner to withhold from the district's hold harmless funds an amount equal to that needed to purchase the attendance credits in lieu of exercising one of the five options available to it. If the commissioner determines that the district's cost to reduce its per-pupil property wealth to the equalized wealth level for a school year exceeds the amount of state funds to which it is entitled for that year, the bill requires the commissioner to withhold the entire amount of the district's hold harmless state funding for that year and to withhold any additional amount of the cost required to reduce the district's per-pupil property wealth for that year from its hold harmless state funding for a subsequent school year. The bill also exempts the district from having to take any further action to reduce its wealth per student for that year.