By:  Johnson, Jerry                                    H.B. No. 639
       73R3224 CAS-D
                                 A BILL TO BE ENTITLED
    1-1                                AN ACT
    1-2  relating to public school finance.
    1-3        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-4        SECTION 1.  Section 16.002(b), Education Code, is amended to
    1-5  read as follows:
    1-6        (b)  The Foundation School Program consists of two tiers to
    1-7  provide for the purposes specified by Subsection (a) of this
    1-8  section.  The first tier guarantees sufficient financing for all
    1-9  school districts to provide a basic program of education that meets
   1-10  accreditation and other legal standards.  The second tier provides
   1-11  a guaranteed equal yield system of financing to provide all school
   1-12  districts with substantially equal access to funds to provide an
   1-13  enriched program and additional funds for facilities.
   1-14        SECTION 2.  Subchapter A, Chapter 16, Education Code, is
   1-15  amended by adding Section 16.004 to read as follows:
   1-16        Sec. 16.004.  SCOPE OF PROGRAM.  Under the Foundation School
   1-17  Program, a school district may receive state financial aid for
   1-18  programs, services, facilities, and equipment, including personnel
   1-19  salaries, current operating expenses, categorical programs, and
   1-20  transportation services.
   1-21        SECTION 3.  Section 16.007(a), Education Code, is amended to
   1-22  read as follows:
   1-23        (a)  Each school district <and each county education
   1-24  district> shall participate in the Public Education Information
    2-1  Management System (PEIMS) and shall provide through that system
    2-2  information required for the administration of this chapter and of
    2-3  other appropriate provisions of this code.
    2-4        SECTION 4.  Section 16.008, Education Code, is amended to
    2-5  read as follows:
    2-6        Sec. 16.008.  EQUALIZED FUNDING ELEMENTS.  (a)  The
    2-7  Legislative Education Board shall adopt rules, subject to
    2-8  appropriate notice and opportunity for public comment, for the
    2-9  calculation for each year of a biennium of the qualified funding
   2-10  elements <under Section 16.256(e) of this code> necessary to
   2-11  achieve the state policy under Section 16.001 of this code <not
   2-12  later than the 1994-1995 school year and for each school year
   2-13  thereafter>.   The board shall report the funding elements
   2-14  calculated to the commissioner of education and the legislature.
   2-15        (b)  The funding elements shall include:
   2-16              (1)  a basic allotment for the purposes of Section
   2-17  16.101 of this code that represents the cost per student of a
   2-18  regular education program that meets the basic criteria for an
   2-19  accredited program including all mandates of law and regulation;
   2-20              (2)  the formula or other provision for the cost of
   2-21  education index designed to reflect the geographic variation in
   2-22  known resource costs and costs of education beyond the control of
   2-23  school districts for the purposes of Sections 16.102 and 16.103 of
   2-24  this code; and
   2-25              (3)  appropriate program cost differentials and other
   2-26  funding elements for the programs authorized under Subchapter D of
   2-27  this chapter, with the program funding level expressed as dollar
    3-1  amounts and as weights applied to the adjusted basic allotment for
    3-2  the appropriate year <Beginning in 1992, not later than October 1
    3-3  preceding each regular session of the legislature, the board shall
    3-4  report the equalized funding elements to the foundation school fund
    3-5  budget committee, the commissioner of education, and the
    3-6  legislature>.
    3-7        SECTION 5.  Section 16.101, Education Code, is amended to
    3-8  read as follows:
    3-9        Sec. 16.101.  Basic Allotment.  For each student in average
   3-10  daily attendance, not including the time students spend each day in
   3-11  special education or vocational education programs for which an
   3-12  additional allotment is made under Subchapter D of this chapter, a
   3-13  district is entitled to an allotment of $2,400 <$2,200 for the
   3-14  1991-1992 school year, $2,400 for the 1992-1993 school year,
   3-15  $2,600> for the 1993-1994 school year<,> and $2,440 <$2,800> for
   3-16  the 1994-1995 school year <and thereafter or a greater amount
   3-17  adopted by the foundation school fund budget committee under
   3-18  Section 16.256 of this code for the 1993-1994 school year> and each
   3-19  school year thereafter.  A greater amount for any school year may
   3-20  be provided by appropriation.
   3-21        SECTION 6.  Section 16.1031, Education Code, is amended to
   3-22  read as follows:
   3-23        Sec. 16.1031.  USE OF SMALL DISTRICT ADJUSTMENTS IN
   3-24  CALCULATING SPECIAL ALLOTMENTS.  In determining the amount of a
   3-25  special allotment under Subchapter D of this chapter for a district
   3-26  to which Section 16.103 of this code applies, a district's adjusted
   3-27  basic allotment is considered to be the district's adjusted
    4-1  allotment determined under Section 16.103.  <This section expires
    4-2  September 1, 1993.>
    4-3        SECTION 7.  Section 16.104, Education Code, is amended to
    4-4  read as follows:
    4-5        Sec. 16.104.  SPARSITY ADJUSTMENT.  Notwithstanding Sections
    4-6  16.101<, 16.102,> and 16.103 of this code, a school district that
    4-7  has fewer than 130 students in average daily attendance shall be
    4-8  provided an adjusted basic allotment on the basis of 130 average
    4-9  daily attendance if it offers a kindergarten through grade 12
   4-10  program and has prior or current year's average daily attendance of
   4-11  at least 90 students or is 30 miles or more by bus route from the
   4-12  nearest high school district.  A district offering a kindergarten
   4-13  through grade 8 program whose prior or current year's average daily
   4-14  attendance was at least 50 students or which is 30 miles or more by
   4-15  bus route from the nearest high school district shall be provided
   4-16  an adjusted basic allotment on the basis of 75 average daily
   4-17  attendance.  An average daily attendance of 60 students shall be
   4-18  the basis of providing the adjusted basic allotment if a district
   4-19  offers a kindergarten through grade 6 program and has prior or
   4-20  current year's average daily attendance of at least 40 students or
   4-21  is 30 miles or more by bus route from the nearest high school
   4-22  district.  <This section expires September 1, 1993.>
   4-23        SECTION 8.  Section 16.152(c), Education Code, is amended to
   4-24  read as follows:
   4-25        (c)  Funds allocated under this section, other than an
   4-26  indirect cost allotment established under State Board of Education
   4-27  rule, which shall not exceed 20 <15> percent, must be used in
    5-1  providing remedial and compensatory education programs under
    5-2  Section 21.557 of this code, and the district must account for the
    5-3  expenditure of state funds by program and by campus.  <Funds
    5-4  allocated under this section, other than the indirect cost
    5-5  allotment, shall only be expended to improve and enhance programs
    5-6  and services funded under the regular education program.>
    5-7        SECTION 9.  Sections 16.156(c), (e), and (g), Education Code,
    5-8  are amended to read as follows:
    5-9        (c)  Each district or county operating a regular
   5-10  transportation system is entitled to an allotment based on the
   5-11  daily cost per regular eligible pupil of operating and maintaining
   5-12  the regular transportation system and the linear density of that
   5-13  system as follows:
   5-14               Linear              Allocation Per Mile
   5-15            Density Group           of Approved Route
   5-16            2.40 and above                 $1.91
   5-17            1.65 to 2.40                    1.67
   5-18            1.15 to 1.65                    1.48
   5-19             .90 to 1.15                    1.29
   5-20             .65 to  .90                    1.17
   5-21             .40 to  .65                    1.20
   5-22              up to  .40                    0.91
   5-23  <.  In determining the cost, the commissioner shall give
   5-24  consideration to factors affecting the actual cost of providing
   5-25  these transportation services in each district or county.  The
   5-26  average actual cost is to be computed by the commissioner of
   5-27  education and included for consideration by the Foundation School
    6-1  Fund Budget Committee and the legislature in the General
    6-2  Appropriations Act.  The allotment per mile of approved route may
    6-3  not exceed the amount set by appropriation.>
    6-4        (e)  The state commissioner of education may grant an amount
    6-5  <set by appropriation> for private or commercial transportation for
    6-6  eligible pupils from isolated areas.   The need for this type of
    6-7  transportation grant shall be determined on an individual basis and
    6-8  the amount granted shall not exceed the least of $0.33 per mile,
    6-9  $1,089 per student, or the actual cost.  The grants shall be made
   6-10  only in extreme hardship cases, and no grants shall be made if the
   6-11  pupils live within two miles of an approved school bus route.
   6-12        (g)  A school district or county that provides special
   6-13  transportation services for eligible handicapped pupils is entitled
   6-14  to a state allocation equal to $1.44 per mile <paid on a previous
   6-15  year's cost-per-mile basis.  The maximum rate per mile allowable
   6-16  shall be set by appropriation based on data gathered from the first
   6-17  year of each preceding biennium>.  Districts may use a portion of
   6-18  their support allocation to pay transportation costs, if necessary.
   6-19  The commissioner of education may grant an amount <set by
   6-20  appropriation> for private transportation to reimburse parents or
   6-21  their agents for transporting eligible handicapped pupils.  The
   6-22  grant may not exceed the lesser of $0.33 per mile or $1,089 per
   6-23  student.  The mileage allowed shall be computed along the shortest
   6-24  public road from the pupil's home to school and back, morning and
   6-25  afternoon.  The need for this type transportation shall be
   6-26  determined on an individual basis and shall be approved only in
   6-27  extreme hardship cases.
    7-1        SECTION 10.  Subchapter D, Chapter 16, Education Code, is
    7-2  amended by adding Section 16.161 to read as follows:
    7-3        Sec. 16.161.  FACILITIES OR OPERATIONS ALLOTMENT.  (a)  Each
    7-4  district is entitled to an allotment equal to its unadjusted
    7-5  average daily attendance multiplied by $168.
    7-6        (b)  A district shall use its allotment under this section
    7-7  for the payment of principal and interest for bonded indebtedness,
    7-8  capital outlay, capital projects, or for any legal purpose.
    7-9        SECTION 11.  Section 16.202, Education Code, is amended to
   7-10  read as follows:
   7-11        Sec. 16.202.  Studies.  On a biennial basis, the Legislative
   7-12  Education Board and the Legislative Budget Board, with the
   7-13  assistance of the <Educational Economic Policy Center and the>
   7-14  Central Education Agency, shall complete each of the following
   7-15  studies and develop recommended amounts where appropriate for each
   7-16  year of the next biennium:
   7-17              (1)  a study of the fiscal neutrality of the system to
   7-18  determine the status of the state and local finance system with
   7-19  regard to the policies established under the provisions of Section
   7-20  16.001 of this code, including recommendations for adjustments
   7-21  necessary to maintain fiscal neutrality;
   7-22              (2)  the accountable costs per student to school
   7-23  districts of providing educational programs, personnel, and other
   7-24  operating costs that meet accreditation criteria and the provisions
   7-25  of law and regulation;
   7-26              (3)  program cost differentials designed by program to
   7-27  provide support for the added expense of high-cost courses or
    8-1  programs for students participating in such courses or programs,
    8-2  with the program funding level expressed as dollar amounts and as
    8-3  weights applied to the adjusted basic allotment for the appropriate
    8-4  year; and
    8-5              (4)  transportation and career ladder allotments<;>
    8-6              <(5)  the levels of tax effort necessary for each tier
    8-7  of the Foundation School Program necessary to fulfill the
    8-8  requirements of Sections 16.001 and 16.008 of this code; and>
    8-9              <(6)  capital outlay and debt service requirements and
   8-10  formula elements for the requirements of Subchapter I of this
   8-11  chapter or other provisions of this chapter>.
   8-12        SECTION 12.  Sections 16.251(a) and (b), Education Code, are
   8-13  amended to read as follows:
   8-14        (a)  The sum of the basic allotment under Subchapter C of
   8-15  this chapter, the special allotments under Subchapter D of this
   8-16  chapter, and the guaranteed equal yield funds <allotments> under
   8-17  Subchapter H, computed in accordance with the provisions of this
   8-18  chapter, constitute the total cost of the Foundation School
   8-19  Program.
   8-20        (b)  The program shall be financed by:
   8-21              (1)  ad valorem tax revenue generated by an equalized
   8-22  uniform local school <county education> district effort;
   8-23              (2)  ad valorem tax revenue generated by local school
   8-24  district effort in excess of the equalized uniform <county
   8-25  education> district effort;
   8-26              (3)  state available school funds distributed in
   8-27  accordance with law; and
    9-1              (4)  state funds appropriated for the purposes of
    9-2  public school education and allocated to each district in an amount
    9-3  sufficient to finance the cost of each district's Foundation School
    9-4  Program not covered by other funds specified in this subsection.
    9-5        SECTION 13.  Section 16.252, Education Code, is amended to
    9-6  read as follows:
    9-7        Sec. 16.252.  Local Share of Program Cost (Tier One).  (a)
    9-8  Each school  <county education> district's share of tier one of the
    9-9  statewide Foundation School Program costs under Subchapters C and D
   9-10  of this chapter shall be an amount determined by the following
   9-11  formula:
   9-12  where:
   9-13        "LFA" is the <county education> district's local share;
   9-14        "TR" is a tax rate of $0.84 <which> for each hundred dollars
   9-15  of valuation <is $0.72 for the 1991-1992 school year, $0.82 for the
   9-16  1992-1993 school year, $0.92 for the 1993-1994 school year, and
   9-17  $1.00 for each school year thereafter>; and
   9-18        "DPV" is the taxable value of property in the <county
   9-19  education> district for the prior tax year determined under Section
   9-20  11.86 of this code.
   9-21        (b)  The commissioner of education shall adjust the values
   9-22  reported in the official report of the comptroller as required by
   9-23  Section 5.09(a), <Property> Tax Code, to reflect reductions in
   9-24  taxable value of property resulting from natural or economic
   9-25  disaster after January 1 in the year in which the valuations are
   9-26  determined.  The decision of the commissioner of education shall be
   9-27  final.  An adjustment does not affect the local fund assignment of
   10-1  any other <county education> district.
   10-2        (c)  Appeals of district values shall be held pursuant to
   10-3  Subsection (e) of Section 11.86 of this code.
   10-4        (d)  A <county education> district shall raise its total
   10-5  local share under this section <of the foundation school program>.
   10-6  <The funds shall be reallocated to the school districts in the
   10-7  county education district in the manner prescribed by Subchapter J
   10-8  of this chapter.>
   10-9        (e)  The commissioner of education shall hear appeals from
  10-10  <county education> districts which have experienced a rapid decline
  10-11  in tax base used in calculating the local fund assignment,
  10-12  exceeding eight percent of prior year, that is beyond the control
  10-13  of the board of trustees of the <county education> district.  The
  10-14  commissioner of education may adjust the <county education>
  10-15  district's taxable values for local fund assignment purposes for
  10-16  such losses in value exceeding eight percent and thereby adjust the
  10-17  local fund assignment to reflect the local current year taxable
  10-18  value.  The decision of the commissioner of education shall be
  10-19  final.  An adjustment does not affect the local fund assignment of
  10-20  any other <county education> district.
  10-21        (f)  The comptroller shall collect local tax funds from each
  10-22  district in which the sum of the required tax effort for the
  10-23  district's share of the foundation school program and the
  10-24  distribution to the district from the available school fund is an
  10-25  amount that is greater than the cost of the foundation school
  10-26  program for the district.  In that event, the comptroller shall
  10-27  collect a percentage of the district's local fund assignment
   11-1  revenue that is determined by dividing the total local fund
   11-2  assignment revenue to be collected by the comptroller by the total
   11-3  local fund assignment revenue collected by the district.  Each
   11-4  district required to shall forward an amount equal to that
   11-5  percentage of the district's local fund assignment to the
   11-6  comptroller according to a schedule established by the commissioner
   11-7  of education and the comptroller.  The comptroller shall deposit
   11-8  the funds in the state treasury to the credit of the foundation
   11-9  school fund.  <For the purposes of Subsection (a) of this section,
  11-10  a county education district's "DPV" for the 1991-1992 school year
  11-11  is the sum of the taxable value of property for the prior tax year
  11-12  determined under Section 11.86 of this code for the school
  11-13  districts composing the county education district.  This subsection
  11-14  expires September 1, 1992.>
  11-15        SECTION 14.  Sections 16.254(a) and (b), Education Code, are
  11-16  amended to read as follows:
  11-17        (a)  The commissioner of education shall determine annually:
  11-18              (1)  the amount of the <money necessary to operate a>
  11-19  Foundation School Program costs under Subchapters C and D of this
  11-20  chapter in each school district; and
  11-21              (2)  <the amount of local funds due the school district
  11-22  from the local fund assignment of the county education district;
  11-23  and>
  11-24              <(3)>  the amount of state available school funds
  11-25  distributed to each school district.
  11-26        (b)  The commissioner of education shall then grant to each
  11-27  school district from the Foundation School Program appropriation
   12-1  the amount of funds necessary to provide the difference between
   12-2  Subdivision (1) and Subdivision (2) <the sum of Subdivisions (2)
   12-3  and (3)> of Subsection (a) of this section.
   12-4        SECTION 15.  Subchapter H, Chapter 16, Education Code, is
   12-5  amended to read as follows:
   12-6                 SUBCHAPTER H.  GUARANTEED EQUAL YIELD
   12-7                          PROGRAM (TIER TWO)
   12-8        Sec. 16.301.  PURPOSE.  The purpose of the guaranteed equal
   12-9  yield component of the Foundation School Program is to provide each
  12-10  school district with the opportunity to supplement the basic
  12-11  program at a level of its own choice and with access to additional
  12-12  funds for facilities.  An allotment under this subchapter may be
  12-13  used for any legal purpose, including capital outlay and debt
  12-14  service.
  12-15        Sec. 16.302.  EQUAL YIELD PROGRAM <ALLOTMENT>.  (a)  Each
  12-16  school district is guaranteed an equal <a specified> amount of
  12-17  $14.50 per weighted student <in state and local funds> for each
  12-18  cent of tax effort, of the first $0.43 of tax effort, over that
  12-19  required for the local fund assignment.
  12-20        (b)  The comptroller shall collect guaranteed equal yield
  12-21  funds from each district in which the yield per weighted student
  12-22  exceeds $14.50 for one cent of tax effort.  In that event, the
  12-23  comptroller shall collect a percentage of the district's guaranteed
  12-24  equal yield funds that is determined by dividing the total
  12-25  guaranteed equal yield funds to be collected by the comptroller by
  12-26  the total guaranteed equal yield funds collected by the district.
  12-27  A district shall forward an amount equal to that percentage of the
   13-1  district's guaranteed equal yield funds to the comptroller
   13-2  according to a schedule established by the commissioner of
   13-3  education and the comptroller.  The comptroller shall deposit that
   13-4  amount in the guaranteed equal yield fund, which is established in
   13-5  the state treasury.  Guaranteed equal yield collections do not
   13-6  include penalties, interest, or attorney's fees awarded to a
   13-7  district in the collection of delinquent taxes.
   13-8        (c)  Each cent of a district's debt tax rate that is included
   13-9  in the guaranteed yield program is equalized before any cent of the
  13-10  district's maintenance and operations tax rate is deposited in the
  13-11  guaranteed equal yield fund, except as provided by Section 20.10 of
  13-12  this code.
  13-13        (d)  One or more times each month, on a schedule established
  13-14  by the commissioner of education and the comptroller, the
  13-15  comptroller shall distribute recaptured guaranteed equal yield
  13-16  funds to each district whose yield is less than the guaranteed
  13-17  amount, in an amount necessary to provide the district with the
  13-18  amount guaranteed.
  13-19        (e)  If a district forwards an amount of the district's
  13-20  guaranteed equal yield funds to the comptroller that is less than
  13-21  the amount the district is required to forward to the comptroller
  13-22  under this section, the district shall forward the difference to
  13-23  the comptroller from the district's excess or other revenue, and
  13-24  the district shall adjust the district's budget accordingly.  If
  13-25  the district does not forward the difference to the comptroller,
  13-26  the comptroller shall notify the commissioner.  If a district fails
  13-27  to comply with this subsection, the commissioner may revoke the
   14-1  district's accreditation or impose other sanctions on the district
   14-2  as the commissioner determines necessary.
   14-3        (f)  If a district forwards an amount of the district's
   14-4  guaranteed equal yield funds to the comptroller that is greater
   14-5  than the amount the district is required to forward to the
   14-6  comptroller under this section, the comptroller shall return the
   14-7  excess amount to the district.
   14-8        (g)  For the purposes of this section, the number of weighted
   14-9  students in average daily attendance in a district is calculated by
  14-10  dividing the sum of the district's allotments under Subchapters C
  14-11  and D of this chapter, less any allotments to the district for
  14-12  transportation, career ladder supplements, or facilities, and 50
  14-13  percent of the adjustment under Section 16.102 of this code, by the
  14-14  basic allotment for the applicable year.
  14-15        (h)  In this section, "per weighted student" means per
  14-16  weighted student in average daily attendance.  <of the county
  14-17  education district in which the school district is located up to
  14-18  the maximum level specified in this subchapter.  The amount of
  14-19  state support, subject only to the maximum amount under Section
  14-20  16.303 of this code, is determined by the formula:>
  14-21  <where:>
  14-22        <"GYA" is the guaranteed yield amount of state funds to be
  14-23  allocated to the district;>
  14-24        <"GL" is the dollar amount guaranteed level of state and
  14-25  local funds per weighted student per cent of tax effort, which is
  14-26  $21.50 for the 1991-1992 school year, $22.50 for the 1992-1993
  14-27  school year, $26 for the 1993-1994 school year, and $28 for each
   15-1  school year thereafter, or a greater amount for any year provided
   15-2  by appropriation, or a greater amount adopted by the foundation
   15-3  school fund budget committee under Section 16.256(d) of this code
   15-4  for the 1993-1994 or 1994-1995 school year or thereafter;>
   15-5        <"WADA", except as provided by Section 16.206 of this code,
   15-6  is the number of weighted students in average daily attendance,
   15-7  which is calculated by dividing the sum of the school district's
   15-8  allotments under Subchapters C and D of this chapter, less any
   15-9  allotments to the district for transportation, career ladder
  15-10  supplements, or technology and 50 percent of the adjustment under
  15-11  Section 16.102 of this code, by the basic allotment for the
  15-12  applicable year;>
  15-13        <"DTR" is the district enrichment and facilities tax rate of
  15-14  the school district, which is determined by dividing the total
  15-15  amount of taxes collected by the school district for the applicable
  15-16  school year by the quotient of the district's taxable value of
  15-17  property as determined under Section 11.86 of this code divided by
  15-18  100; and>
  15-19        <"LR" is the local revenue, which is determined by
  15-20  multiplying "DTR" by the quotient of the district's taxable value
  15-21  of property as determined under Section 11.86 of this code divided
  15-22  by 100.>
  15-23        <(b)  Beginning with the 1993-1994 school year, if the
  15-24  program cost differentials developed jointly by the Legislative
  15-25  Education Board and the Legislative Budget Board under Section
  15-26  16.203 of this code and the adjustments studied under Section
  15-27  16.206 of this code are not adopted by the foundation school fund
   16-1  budget committee or the commissioner of education, the amount
   16-2  guaranteed under this section is an amount per student rather than
   16-3  per weighted student and a school district's average daily
   16-4  attendance ("ADA") under Section 16.006 of this code is substituted
   16-5  for "WADA" in the formula under Subsection (a) of this section.>
   16-6        <Sec. 16.303.  LIMITATION ON ENRICHMENT AND FACILITIES TAX
   16-7  RATE.  The district enrichment and facilities tax rate ("DTR")
   16-8  under Section 16.302 of this code may not exceed $0.45 or a greater
   16-9  amount for 1993-1994 and 1994-1995 school years or thereafter as
  16-10  adopted by the foundation school fund budget committee under
  16-11  Section 16.256(d) of this code.>
  16-12        Sec. 16.304.  COMPUTATION OF AID FOR DISTRICT ON MILITARY
  16-13  RESERVATION OR AT STATE SCHOOL.  State assistance under this
  16-14  subchapter for a school district located on a federal military
  16-15  installation or at Moody State School is computed using the average
  16-16  tax rate and property value per student of school districts in the
  16-17  county, as determined by the commissioner of education.
  16-18        SECTION 16.  Section 11.86(a), Education Code, is amended to
  16-19  read as follows:
  16-20        (a)  The comptroller shall conduct an annual study using
  16-21  comparable sales and generally accepted auditing and sampling
  16-22  techniques to determine the total value of all taxable property in
  16-23  each <county education> school district <and each of its component
  16-24  school districts>.  The study shall determine the taxable value of
  16-25  all property and of each category of property within the district
  16-26  and the productivity value of all land that qualifies for appraisal
  16-27  on the basis of its productive capacity and for which the owner has
   17-1  applied for and received a productivity appraisal.  In conducting
   17-2  the study, the comptroller shall review the appraisal standards,
   17-3  procedures, and methodology used by each appraisal district to
   17-4  determine the taxable value of property in each school district.
   17-5  The review must test the validity of the taxable values assigned to
   17-6  each category of property by the appraisal district:
   17-7              (1)  using, if appropriate, samples selected through
   17-8  generally accepted sampling techniques; and
   17-9              (2)  according to generally accepted standard
  17-10  valuation, statistical compilation, and analysis techniques.  If
  17-11  the comptroller finds in the annual study that generally accepted
  17-12  appraisal standards and practices were used by the appraisal
  17-13  district in valuing a particular category of property, and that the
  17-14  taxable values assigned to each category of property by the
  17-15  appraisal district are valid, the appraisal roll value of that
  17-16  category of property is presumed to represent taxable value.  In
  17-17  the absence of such a presumption, the comptroller shall estimate
  17-18  the taxable value of that category of property using generally
  17-19  accepted standard valuation, statistical compilation, and analysis
  17-20  techniques.  For the purposes of this section, "taxable value"
  17-21  means market value less:
  17-22                    (1)  the total dollar amount of any exemptions of
  17-23  part but not all of the value of taxable property required by the
  17-24  constitution or a statute that a district lawfully granted in the
  17-25  year that is the subject of the study;
  17-26                    (2)  the total dollar amount of any exemptions
  17-27  granted within a reinvestment zone under agreements authorized by
   18-1  the Property Redevelopment and Tax Abatement Act (Chapter 312, Tax
   18-2  Code);
   18-3                    (3)  the total dollar amount of any captured
   18-4  appraised value of property that is located in a reinvestment zone
   18-5  and that is eligible for tax increment financing under the Tax
   18-6  Increment Financing Act (Chapter 311, Tax Code);
   18-7                    (4)  the total dollar amount of any exemptions
   18-8  granted under Section 11.251, Tax Code;
   18-9                    (5)  the difference between the market value and
  18-10  the productivity value of land that qualifies for appraisal on the
  18-11  basis of its productive capacity, except that the productivity
  18-12  value may not exceed the fair market value of the land;
  18-13                    (6)  the portion of the appraised value of
  18-14  residence homesteads of the elderly on which school district taxes
  18-15  are not imposed in the year that is the subject of the study,
  18-16  calculated as if the residence homesteads were appraised at the
  18-17  full value required by law;
  18-18                    (7)  a portion of the market value of property
  18-19  not otherwise fully taxable by the district at market value because
  18-20  of action required by statute or the Texas Constitution that, if
  18-21  the tax rate adopted by the district is applied to it, produces an
  18-22  amount equal to the difference between the tax that the district
  18-23  would have imposed on the property if the property were fully
  18-24  taxable at market value and the tax that the district is actually
  18-25  authorized to impose on the property; and
  18-26                    (8)  the market value of all tangible personal
  18-27  property, other than manufactured homes, owned by a family or
   19-1  individual and not held or used for the production of income.
   19-2        SECTION 17.  Section 20.01, Education Code, is amended to
   19-3  read as follows:
   19-4        Sec. 20.01.  BONDS; PLEDGED FUNDS <AND BOND TAXES>.  The
   19-5  governing board of each independent school district (including, as
   19-6  to each municipally controlled independent school district, the
   19-7  city council or commission which has jurisdiction thereof), and the
   19-8  governing board of each rural high school district, and the
   19-9  commissioners court of every county, for and on behalf of each
  19-10  common school district under its jurisdiction, shall be authorized
  19-11  to issue negotiable coupon bonds for the construction and equipment
  19-12  of school buildings in the district and the purchase of the
  19-13  necessary sites therefor, and to levy <and pledge>, and cause to be
  19-14  assessed and collected, annual ad valorem taxes at a rate that
  19-15  entitles the district to funds under Chapter 16 of this code from
  19-16  the foundation school program and the guaranteed equal yield
  19-17  program sufficient to pay the principal of and interest on said
  19-18  bonds as the same come due and to pledge those funds for that
  19-19  purpose, subject to the provisions and restrictions of Section
  19-20  20.04 of this code.  Such bonds may be issued in various series or
  19-21  issues, and shall mature serially or otherwise not more than 40
  19-22  years from their date, and shall bear interest at such rate or
  19-23  rates as shall be determined within the discretion of such
  19-24  governing board or commissioners court.  Said bonds, and the
  19-25  interest coupons appertaining thereto, shall be negotiable
  19-26  instruments, and they may be made redeemable prior to maturity, and
  19-27  may be issued in such form, denominations, and manner, and under
   20-1  such terms, conditions, and details, and shall be signed and
   20-2  executed, as provided by such governing board or commissioners
   20-3  court in the resolution or order authorizing the issuance of said
   20-4  bonds.  All bonds shall be sold to the highest bidder for not less
   20-5  than their par value and accrued interest.
   20-6        SECTION 18.  Section 20.04, Education Code, is amended to
   20-7  read as follows:
   20-8        Sec. 20.04.  Bond and Tax Elections.  (a)  No such bonds
   20-9  shall be issued and none of the aforesaid taxes shall be levied
  20-10  unless authorized by a majority of the resident, qualified electors
  20-11  of the district, who own taxable property therein and who have duly
  20-12  rendered the same for taxation, voting at an election held for such
  20-13  purpose, at the expense of the district, in accordance with the
  20-14  <Texas> Election Code, except as hereinafter provided.  Each such
  20-15  election shall be called by resolution or order of such governing
  20-16  board or commissioners court, which shall set forth the date of the
  20-17  election, the proposition or propositions to be submitted and voted
  20-18  on, the polling place or places, and any other matters deemed
  20-19  necessary or advisable by such governing board or commissioners
  20-20  court.
  20-21        (b)  In each proposition submitted to authorize the issuance
  20-22  of bonds there shall be included the question of whether the
  20-23  governing board or commissioners court shall be authorized to levy
  20-24  <and pledge>, and cause to be assessed and collected, annual ad
  20-25  valorem taxes at a rate that entitles the district to funds under
  20-26  Chapter 16 of this code from the foundation school program and the
  20-27  guaranteed equal yield program:<, on all taxable property in the
   21-1  district, either>
   21-2              (1)  sufficient, without limit as to tax rate or
   21-3  amount, to pay the principal of and interest on said bonds and to
   21-4  pledge those funds for that purpose; or
   21-5              (2)  sufficient to pay the principal of and interest on
   21-6  said bonds and to pledge those funds for that purpose, provided
   21-7  that the annual aggregate bond taxes in the district shall never be
   21-8  more than the tax rate (not to exceed $1 on the $100 valuation of
   21-9  taxable property in the district) stated in said proposition.
  21-10        (c)  If bonds are ever voted in a district pursuant to
  21-11  Subsection (b)(1) of this section, then all bonds thereafter
  21-12  proposed shall be submitted pursuant to that subsection, and
  21-13  Subsection (b)(2) of this section shall not be applicable to such
  21-14  district.  Except as otherwise provided by this section, no bonds
  21-15  shall be issued pursuant to Subsection (b)(1) of this section if
  21-16  the aggregate principal amount of tax bond indebtedness of the
  21-17  district after such issuance would be in excess of 10 percent of an
  21-18  amount equal to the product of the district's average daily
  21-19  attendance multiplied by the quotient of the statewide taxable
  21-20  value of property, as determined under Section 11.86 of this code,
  21-21  divided by the statewide average daily attendance <the assessed
  21-22  valuation of taxable property in the district according to the then
  21-23  last completed and approved ad valorem tax rolls of the district>.
  21-24  A district may issue bonds resulting in an aggregate principal
  21-25  amount of tax bond indebtedness in excess of 10 percent of that
  21-26  amount <the district's assessed valuation> if:
  21-27              (1)  the bonds are issued for the purpose of
   22-1  constructing and equipping a replacement for a building lost to
   22-2  fire or natural disaster;
   22-3              (2)  the bonds are issued in an amount necessary for
   22-4  that purpose, less the amount paid by insurance covering the loss;
   22-5  and
   22-6              (3)  the resulting aggregate principal amount of tax
   22-7  bond indebtedness does not exceed 16 percent of that amount <the
   22-8  district's assessed valuation>.
   22-9        (d)  In each proposition submitted to authorize the levy of
  22-10  maintenance taxes there shall be included the question of whether
  22-11  the governing board or commissioners court shall be authorized to
  22-12  levy, and cause to be assessed and collected, annual ad valorem
  22-13  taxes, for the further maintenance of public free schools, of not
  22-14  to exceed the rate (which shall be not more than $1.50 on the $100
  22-15  valuation of taxable property in the district) stated in said
  22-16  proposition.
  22-17        (e)  Notice of each such election shall be given by
  22-18  publishing a substantial copy of the election resolution or order
  22-19  one time, at least 10 days prior to the date set for the election,
  22-20  in a newspaper of general circulation in the district.  Such
  22-21  governing board or commissioners court shall canvass the returns
  22-22  and declare the results of such elections.
  22-23        SECTION 19.  Sections 20.05(b) and (c), Education Code, are
  22-24  amended to read as follows:
  22-25        (b)  Each such governing board or commissioners court shall
  22-26  be authorized to refund or refinance all or any part of any of the
  22-27  district's outstanding bonds and matured or unmatured but unpaid
   23-1  interest thereon <payable from ad valorem taxes> by the issuance of
   23-2  refunding bonds payable from funds to which the district is
   23-3  entitled under Chapter 16 of this code from the foundation school
   23-4  program and the guaranteed equal yield program <ad valorem taxes>.
   23-5  Said refunding bonds shall mature serially or otherwise not more
   23-6  than forty years from their date, and shall bear interest at such
   23-7  rate or rates, as shall be determined within the discretion of such
   23-8  governing board or commissioners court.  Said refunding bonds may
   23-9  be issued without an election in connection therewith.
  23-10        Provided, however, if the Texas Constitution would require an
  23-11  election or vote to permit any procedure, action, or matter
  23-12  pertaining to such refunding bonds, then an election to authorize
  23-13  any such procedure, action, or matter shall be held substantially
  23-14  in accordance with this Chapter 20 of this code to the extent
  23-15  practicable, applicable, and appropriate.
  23-16        (c)  A series or issue of refunding bonds may not be issued
  23-17  unless:
  23-18              (1)  the total debt service on the refunding bonds will
  23-19  amount to less than the total debt service on the bonds being
  23-20  refunded; and
  23-21              (2)  <if a maximum interest rate was voted for the
  23-22  bonds being refunded, the refunding bonds do not bear interest at a
  23-23  rate higher than such voted maximum rate; and>
  23-24              <(3)>  the refunding bonds are payable from <taxes of>
  23-25  the same source as that <nature as those> pledged to the payment of
  23-26  the obligations being refunded thereby.
  23-27        SECTION 20.  Subchapter A, Chapter 20, Education Code, is
   24-1  amended by adding Section 20.10 to read as follows:
   24-2        Sec. 20.10.  DEBT EXISTING ON SEPTEMBER 1, 1993.  (a)  Except
   24-3  as provided by this section, a district may not impose a tax for
   24-4  the payment of the principal and interest due on debt incurred by
   24-5  the district under this chapter that is not included in the
   24-6  foundation school program or the guaranteed equal yield program
   24-7  under Chapter 16 of this code.
   24-8        (b)  A district with a yield per weighted student in average
   24-9  daily attendance greater than $14.50 for one cent of tax effort may
  24-10  impose a tax that is not included in the foundation school program
  24-11  or the guaranteed equal yield program for the purpose of the
  24-12  payment of principal and interest on debt incurred by this district
  24-13  under this chapter before September 1, 1993.  Any revenue generated
  24-14  by the tax in excess of the revenue needed to pay principal and
  24-15  interest on that debt must be included in the foundation school
  24-16  program or the guaranteed equal yield program.
  24-17        (c)  For the purposes of this section, the number of weighted
  24-18  students in average daily attendance in a district is calculated by
  24-19  dividing the sum of the district's allotments under Subchapters C
  24-20  and D of this chapter, less any allotments to the district for
  24-21  transportation, career ladder supplements, or facilities, and 50
  24-22  percent of the adjustment under Section 16.102 of this code, by the
  24-23  basic allotment for the applicable year.
  24-24        SECTION 21.  Section 20.43(c), Education Code, is amended to
  24-25  read as follows:
  24-26        (c)  <No school district in the State of Texas shall issue
  24-27  such interest-bearing time warrants in excess of five percent of
   25-1  the assessed valuation of the district, for the year in which such
   25-2  interest-bearing time warrants are issued; nor shall the payment of
   25-3  such interest-bearing time warrants in any one year exceed the
   25-4  anticipated surplus income of the district for the year in which
   25-5  the warrants are issued.  Based on the budget of the district for
   25-6  said year, such anticipated income to be computed by taking the
   25-7  entire expected income of such school district from every source
   25-8  for the year in which such interest-bearing time warrants are
   25-9  issued, less teachers' salaries, bus aid included in the foundation
  25-10  fund, and that part of the local maintenance tax earmarked for
  25-11  salaries and known in the Gilmer-Aiken Law as the economic index or
  25-12  fund assignment.  The anticipated income computation as herein
  25-13  defined shall be exclusive of all bond taxes.>  No school district
  25-14  shall have outstanding at any one time warrants totaling in excess
  25-15  of $120,000 under the provisions of this section.
  25-16        SECTION 22.  Sections 20.50(c) and (d), Education Code, are
  25-17  amended to read as follows:
  25-18        (c)  The consideration for any such contract may be paid from
  25-19  any source available to such independent school district; but if
  25-20  <it> voted, as hereinafter provided, such independent school
  25-21  district shall be authorized to levy, assess, and collect <pledge
  25-22  to the payment of said contract> an annual maintenance tax at a
  25-23  rate that entitles the district to funds under Chapter 16 of this
  25-24  code from the foundation school program and the guaranteed equal
  25-25  yield program <in an amount> sufficient<, without limitation,> to
  25-26  provide all of such consideration and to pledge those funds to the
  25-27  payment of the contract.  If so voted <and pledged>, such
   26-1  maintenance tax shall be assessed, levied, and collected annually
   26-2  in the same manner as provided by general law applicable to
   26-3  independent school districts for other maintenance taxes.
   26-4        (d)  No foundation school program or guaranteed equal yield
   26-5  program funds <maintenance tax> shall be pledged to the payment of
   26-6  any such contract or a maintenance tax assessed, levied, or
   26-7  collected for that purpose unless an election is held in the
   26-8  independent school district and any such maintenance tax is duly
   26-9  and favorably voted by a majority of the resident, qualified
  26-10  electors of the independent school district who own taxable
  26-11  property therein and who have duly rendered the same for taxation,
  26-12  voting at said election.  Each such election shall be called by
  26-13  order of the board of trustees of the independent school district.
  26-14  The election order shall set forth the date of the election, the
  26-15  proposition to be submitted and voted on, the polling place or
  26-16  places, and any other matters deemed advisable by the board of
  26-17  trustees.  Notice of said election shall be given by publishing a
  26-18  substantial copy of the order calling the election one time, at
  26-19  least ten days prior to the election, in a newspaper of general
  26-20  circulation in the district.  Except as herein otherwise
  26-21  specifically provided, any such election shall be held in
  26-22  accordance with the <Texas> Election Code.
  26-23        SECTION 23.  Sections 20.55(a), (b), and (d), Education Code,
  26-24  are amended to read as follows:
  26-25        (a)  Any school district, including a junior college
  26-26  district, situated in a county containing a population of 200,000
  26-27  or more, according to the last preceding federal census, may issue
   27-1  interest-bearing certificates of indebtedness for the purpose of
   27-2  providing funds for the erection and equipment of school buildings
   27-3  within the boundaries of the district or refinancing outstanding
   27-4  certificates as herein provided.  The term "certificates," as used
   27-5  in this section, includes all obligations authorized to be issued
   27-6  hereunder, and the term shall include interest thereon, unless
   27-7  clearly indicated by the context that another meaning is intended.
   27-8  The governing body of a school district other than a junior college
   27-9  district shall make provision for the payment of the certificates
  27-10  from funds available to the district under Chapter 16 of this code
  27-11  from the foundation school program and the guaranteed equal yield
  27-12  program.
  27-13        (b)  The governing body of a junior college <the> district
  27-14  shall make provision for the payment of the certificates issued
  27-15  under the authority of this section by the appropriation and pledge
  27-16  of local school funds derived and to be derived from maintenance
  27-17  taxes levied and assessed or to be levied and assessed under
  27-18  authority of Section <Sections 20.02 and> 130.122 of this code<,
  27-19  Chapter 273, Acts of the 53rd Legislature, 1953, as amended
  27-20  (Article 2784g, Vernon's Texas Civil Statutes),> or other similar
  27-21  law now in existence or hereinafter enacted which limits the amount
  27-22  of tax which may be levied for maintenance purposes for a junior
  27-23  college district, as distinguished from bond requirements.  The
  27-24  appropriation and pledge may be in the nature of a continuing
  27-25  irrevocable pledge to apply the first moneys collected or to be
  27-26  collected annually from the tax levy to the payment of the
  27-27  obligations or by the irrevocable present levy and appropriation of
   28-1  the amount of the maintenance tax as is required to meet the annual
   28-2  debt service requirements of the obligations, in which event the
   28-3  governing body shall covenant to annually set aside the amount in
   28-4  the annual tax levy, showing the same is a portion of the
   28-5  maintenance tax.  The governing body shall annually budget the
   28-6  amount required to pay the debt service requirements, principal and
   28-7  interest, of the obligations which may be scheduled to become due
   28-8  in any fiscal year.  Nothing herein shall be construed as
   28-9  permitting the levy of a maintenance tax in excess of the amount
  28-10  approved by the resident qualified property taxpaying voters of the
  28-11  district.
  28-12        (d)  The principal amount of certificates of a junior college
  28-13  district which may be authorized at any one time and the scheduling
  28-14  of their principal maturity shall be further restricted as follows:
  28-15              (1)  where the assessed valuation is more than $1
  28-16  million and less than $15 million the limiting factor is 25 cents.
  28-17              (2)  where the assessed valuation is $15 million or
  28-18  more but less than $35 million the limiting factor is 15 cents.
  28-19              (3)  where the assessed valuation is $35 million or
  28-20  more the limiting factor is 5 cents.
  28-21        SECTION 24.  Section 20.56(k)(3), Education Code, is amended
  28-22  to read as follows:
  28-23              (3)  The consideration payable by the district under a
  28-24  contract may be paid from any source available to the district; and
  28-25  if voted, the district is authorized to levy, assess, and collect
  28-26  <pledge to the payment of the contract> an annual maintenance tax
  28-27  at a rate that entitles the district to funds under Chapter 16 of
   29-1  this code from the foundation school program and the guaranteed
   29-2  equal yield program <in an amount> sufficient<, without
   29-3  limitation,> to provide all or part of the consideration and to
   29-4  pledge those funds to the payment of the contract.  If so voted
   29-5  <and pledged>, the maintenance tax shall be assessed, levied, and
   29-6  collected annually in the same manner as provided by general law
   29-7  applicable to independent school districts for other maintenance
   29-8  taxes.  No foundation school program funds <maintenance tax> shall
   29-9  be pledged to the payment of any contract or a maintenance tax
  29-10  assessed, levied, or collected for that purpose unless an election
  29-11  is held by and in the district, and the maintenance tax for that
  29-12  purpose is duly and favorably voted by a majority of the resident,
  29-13  qualified electors of the district who own taxable property therein
  29-14  and who have duly rendered the property for taxation, voting at the
  29-15  election.  Each election shall be called by order of the board of
  29-16  trustees of the district.  The election order shall set forth the
  29-17  date of the election, the proposition to be submitted and voted on,
  29-18  the polling place or places, and any other matters deemed advisable
  29-19  by the board of trustees.  Notice of election shall be given by
  29-20  publishing a substantial copy of the order calling the election one
  29-21  time, at least 10 days prior to the election, in a newspaper of
  29-22  general circulation in the district.  Except as herein otherwise
  29-23  specifically provided, the election shall be held in accordance
  29-24  with the <Texas> Election Code.
  29-25        SECTION 25.  Section 1.04(12), Tax Code, is amended to read
  29-26  as follows:
  29-27              (12)  "Taxing unit" means a county, an incorporated
   30-1  city or town (including a home-rule city), a school district, <a
   30-2  county education district,> a special district or authority
   30-3  (including a junior college district, a hospital district, a
   30-4  district created by or pursuant to the Water Code, a mosquito
   30-5  control district, a fire prevention district, or a noxious weed
   30-6  control district), or any other political unit of this state,
   30-7  whether created by or pursuant to the constitution or a local,
   30-8  special, or general law, that is authorized to impose and is
   30-9  imposing ad valorem taxes on property even if the governing body of
  30-10  another political unit determines the tax rate for the unit or
  30-11  otherwise governs its affairs.
  30-12        SECTION 26.  Section 6.02(b), Tax Code, is amended to read as
  30-13  follows:
  30-14        (b)  A taxing unit <other than a county education district>
  30-15  that has boundaries extending into two or more counties may choose
  30-16  to participate in only one of the appraisal districts.  In that
  30-17  event, the boundaries of the district chosen extend outside the
  30-18  county to the extent of the unit's boundaries.  To be effective,
  30-19  the choice must be approved by resolution of the board of directors
  30-20  of the district chosen.  <A county education district that has
  30-21  boundaries extending into two or more counties must participate in
  30-22  each appraisal district in which one of its component school
  30-23  districts participates for purposes of appraisal of the component
  30-24  school district's territory.>
  30-25        SECTION 27.  Sections 6.03(c)-(e), Tax Code, are amended to
  30-26  read as follows:
  30-27        (c)  Members of the board of directors are appointed by vote
   31-1  of the governing bodies of the incorporated cities and towns, the
   31-2  school districts <other than the county education district>, and,
   31-3  if entitled to vote, the conservation and reclamation districts
   31-4  that participate in the district and of the county.  A governing
   31-5  body may cast all its votes for one candidate or distribute them
   31-6  among candidates for any number of directorships.  Conservation and
   31-7  reclamation districts are not entitled to vote unless at least one
   31-8  conservation and reclamation district in the district delivers to
   31-9  the chief appraiser a written request to nominate and vote on the
  31-10  board of directors by June 1 of each odd-numbered year.  On receipt
  31-11  of a request, the chief appraiser shall certify a list by June 15
  31-12  of all eligible conservation and reclamation districts that are
  31-13  imposing taxes and that participate in the district.
  31-14        (d)  The voting entitlement of a taxing unit that is entitled
  31-15  to vote for directors is determined by dividing the total dollar
  31-16  amount of property taxes imposed in the district by the taxing unit
  31-17  for the preceding tax year by the sum of the total dollar amount of
  31-18  property taxes imposed in the district for that year by each taxing
  31-19  unit that is entitled to vote, by multiplying the quotient by
  31-20  1,000, and by rounding the product to the nearest whole number.
  31-21  That number is multiplied by the number of directorships to be
  31-22  filled.  <For a school district, the total dollar amount of
  31-23  property taxes imposed in the district by the unit is considered to
  31-24  be the sum of the taxes imposed by the district and the revenue
  31-25  received by the district from the county education district.>  A
  31-26  taxing unit participating in two or more districts is entitled to
  31-27  vote in each district in which it participates, but only the taxes
   32-1  imposed in a district are used to calculate voting entitlement in
   32-2  that district.
   32-3        (e)  The chief appraiser shall calculate the number of votes
   32-4  to which each taxing unit other than a conservation and reclamation
   32-5  district is entitled and shall deliver written notice to each of
   32-6  those units of its voting entitlement before October 1 of each
   32-7  odd-numbered year.  The chief appraiser shall deliver the notice:
   32-8              (1)  to the county judge and each commissioner of the
   32-9  county served by the appraisal district;
  32-10              (2)  to the presiding officer of the governing body of
  32-11  each city or town participating in the appraisal district, to the
  32-12  city manager of each city or town having a city manager, and to the
  32-13  city secretary or clerk, if there is one, of each city or town that
  32-14  does not have a city manager; and
  32-15              (3)  to the presiding officer of the governing body of
  32-16  each school district<, other than the county education district,>
  32-17  participating in the district and to the superintendent of each
  32-18  <those> school district <districts>.
  32-19        SECTION 28.  Sections 6.06(d) and (h), Tax Code, are amended
  32-20  to read as follows:
  32-21        (d)  Each taxing unit participating in the district<, other
  32-22  than a county education district,> is allocated a portion of the
  32-23  amount of the budget equal to the proportion that the total dollar
  32-24  amount of property taxes imposed in the district by the unit for
  32-25  the tax year in which the budget proposal is prepared bears to the
  32-26  sum of the total dollar amount of property taxes imposed in the
  32-27  district by each participating unit for that year.  <For a school
   33-1  district, other than a county education district, the total dollar
   33-2  amount of property taxes imposed in the district by the unit is
   33-3  considered to be the sum of the taxes imposed by the district and
   33-4  the revenue received by the district from the county education
   33-5  district.>  If a taxing unit participates in two or more districts,
   33-6  only the taxes imposed in a district are used to calculate the
   33-7  unit's cost allocations in that district.  If the number of real
   33-8  property parcels in a taxing unit is less than 5 percent of the
   33-9  total number of real property parcels in the district and the
  33-10  taxing unit imposes in excess of 25 percent of the total amount of
  33-11  the property taxes imposed in the district by all of the
  33-12  participating taxing units for a year, the unit's allocation may
  33-13  not exceed a percentage of the appraisal district's budget equal to
  33-14  three times the unit's percentage of the total number of real
  33-15  property parcels appraised by the district.
  33-16        (h)  If a newly formed taxing unit or a taxing unit that did
  33-17  not impose taxes in the preceding year<, other than a county
  33-18  education district,> imposes taxes in any tax year, that unit is
  33-19  allocated a portion of the amount budgeted to operate the district
  33-20  as if it had imposed taxes in the preceding year, except that the
  33-21  amount of taxes the unit imposes in the current year is used to
  33-22  calculate its allocation.  Before the amount of taxes to be imposed
  33-23  for the current year is known, the allocation may be based on an
  33-24  estimate to which the district board of directors and the governing
  33-25  body of the unit agree, and the payments made after that amount is
  33-26  known shall be adjusted to reflect the amount imposed.  The
  33-27  payments of a newly formed taxing unit that has no source of funds
   34-1  are postponed until the unit has received adequate tax or other
   34-2  revenues.
   34-3        SECTION 29.  Sections 11.13(d), (e), (m), and (n), Tax Code,
   34-4  are amended to read as follows:
   34-5        (d)  In addition to the exemptions provided by Subsections
   34-6  (b) and (c) of this section, an individual who is disabled or is 65
   34-7  or older is entitled to an exemption from taxation by a taxing unit
   34-8  of a portion (the amount of which is fixed as provided by
   34-9  Subsection (e) of this section) of the appraised value of his
  34-10  residence homestead if the exemption is adopted either:
  34-11              (1)  by the governing body of the taxing unit <other
  34-12  than a county education district>; or
  34-13              (2)  by a favorable vote of a majority of the qualified
  34-14  voters of the taxing unit at an election called by the governing
  34-15  body of the taxing unit <other than a county education district>,
  34-16  and the governing body shall call the election on the petition of
  34-17  at least 20 percent of the number of qualified voters who voted in
  34-18  the preceding election of the taxing unit<; or>
  34-19              <(3)  by a favorable vote of a majority of the
  34-20  qualified voters of a county education district at an election held
  34-21  under Section 20.950, Education Code>.
  34-22        (e)  The amount of an exemption adopted as provided by
  34-23  Subsection (d) of this section is $3,000 of the appraised value of
  34-24  the residence homestead unless a larger amount is specified by:
  34-25              (1)  the governing body authorizing the exemption if
  34-26  the exemption is authorized as provided by Subdivision (1) of
  34-27  Subsection (d) of this section; or
   35-1              (2)  the petition for the election if the exemption is
   35-2  authorized as provided by Subdivision (2) of Subsection (d) of this
   35-3  section<; or>
   35-4              <(3)  the proposition approved at an election held
   35-5  under Section 20.950, Education Code>.
   35-6        (m)  In this section:
   35-7              (1)  "Disabled" means under a disability for purposes
   35-8  of payment of disability insurance benefits under Federal Old-Age,
   35-9  Survivors, and Disability Insurance.
  35-10              (2)  "School district" means a political subdivision
  35-11  organized to provide general elementary and secondary public
  35-12  education.  <"School district" includes a county education district
  35-13  established by the consolidation of the local school districts in
  35-14  its boundaries for the limited purpose of exercising a portion of
  35-15  the taxing power previously authorized by the voters in those
  35-16  school districts.>  "School district" does not include a junior
  35-17  college district or a political subdivision organized to provide
  35-18  special education services.
  35-19        (n)  In addition to any other exemptions provided by this
  35-20  section, an individual is entitled to an exemption from taxation by
  35-21  a taxing unit <other than a county education district> of a
  35-22  percentage of the appraised value of his residence homestead if the
  35-23  exemption is adopted by the governing body of the taxing unit
  35-24  before May 1 in the manner provided by law for official action by
  35-25  the body.  If the percentage set by the taxing unit produces an
  35-26  exemption in a tax year of less than $5,000 when applied to a
  35-27  particular residence homestead, the individual is entitled to an
   36-1  exemption of $5,000 of the appraised value.  The percentage adopted
   36-2  by the taxing unit may not exceed 20 percent.  <In addition to any
   36-3  other exemptions provided by this section, an individual is
   36-4  entitled to an exemption from taxation by a county education
   36-5  district of a percentage of the appraised value of his residence
   36-6  homestead if the exemption is adopted by the voters of the district
   36-7  at an election held in the district for that purpose under Section
   36-8  20.946, Education Code.  If the percentage set by the voters
   36-9  produces an exemption in a tax year of less than $5,000 when
  36-10  applied to a particular residence homestead, the individual is
  36-11  entitled to an exemption of $5,000 of the appraised value.  The
  36-12  percentage adopted by the voters may not exceed 20 percent.>
  36-13        SECTION 30.  Sections 11.14(c) and (e), Tax Code, are amended
  36-14  to read as follows:
  36-15        (c)  The governing body of a taxing unit<, other than a
  36-16  county education district,> by resolution or order, depending upon
  36-17  the method prescribed by law for official action by that governing
  36-18  body, may provide for taxation of tangible personal property
  36-19  exempted under Subsection (a).  <The voters of a county education
  36-20  district, by an election held under Section 20.951, Education Code,
  36-21  may provide for taxation of tangible personal property exempted
  36-22  under Subsection (a).>  If a taxing unit provides for taxation of
  36-23  tangible personal property as provided by this subsection, the
  36-24  exemption prescribed by Subsection (a) does not apply to that unit.
  36-25        (e)  A political subdivision <other than a county education
  36-26  district> choosing to tax property otherwise made exempt by this
  36-27  section, pursuant to Article VIII, Section 1(e), of the Texas
   37-1  Constitution, may not do so until the governing body of the
   37-2  political subdivision has held a public hearing on the matter,
   37-3  after having given notice of the hearing at the times and in the
   37-4  manner required by this subsection, and has found that the action
   37-5  will be in the public interest of all the residents of that
   37-6  political subdivision.  At the hearing, all interested persons are
   37-7  entitled to speak and present evidence for or against taxing the
   37-8  property.  Not later than the 30th day prior to the date of a
   37-9  hearing held under this subsection, notice of the hearing must be:
  37-10              (1)  published in a newspaper having general
  37-11  circulation in the political subdivision and in a section of the
  37-12  newspaper other than the advertisement section;
  37-13              (2)  not less than one-half of one page in size; and
  37-14              (3)  republished on not less than three separate days
  37-15  during the period beginning with the 10th day prior to the hearing
  37-16  and ending with the actual date of the hearing.
  37-17        SECTION 31.  Section 26.08, Tax Code, is amended by adding
  37-18  Subsection (k) to read as follows:
  37-19        (k)  Notwithstanding any other provision of this section, a
  37-20  district's rollback tax rate for each year beginning with the 1993
  37-21  tax year is a rate equal to the sum of the district's debt rate and
  37-22  the maintenance and operations tax rate necessary for the district
  37-23  to obtain a total amount of state and local maintenance and
  37-24  operations funds for the school year beginning September 1 of the
  37-25  applicable tax year equal to the total amount of state and local
  37-26  maintenance and operations funds per student that the district
  37-27  received for the preceding school year multiplied by 1.05.
   38-1        SECTION 32.  (a)  All county education districts are
   38-2  abolished.
   38-3        (b)  Except as provided by Subsection (c), all funds and
   38-4  other assets of each county education district shall be distributed
   38-5  among its component school districts in proportion to the taxable
   38-6  property wealth of each component school district in accordance
   38-7  with rules adopted by the commissioner of education.
   38-8        (c)  After August 31, 1993, uncollected property taxes levied
   38-9  by the board of trustees of a county education district are the
  38-10  asset of the school district in which the property is located.
  38-11  Each school district shall collect these taxes and shall bear the
  38-12  cost of collection.  The school district may take actions to ensure
  38-13  the efficient collection of these taxes.
  38-14        SECTION 33.  (a)  The following provisions of the Education
  38-15  Code are repealed:
  38-16              (1)  Sections 1.05, 11.86(h), 16.007(c), 16.009,
  38-17  16.010, 16.011, 16.103(e), 16.155(g), 16.256(d)-(g), 20.09,
  38-18  20.43(e), (f), (g), and (i), 20.45, 20.48(c)-(f), 20.51, and
  38-19  20.55(e);
  38-20              (2)  Subchapter J, Chapter 16; and
  38-21              (3)  Subchapter G, Chapter 20.
  38-22        (b)  The following sections of the Tax Code are
  38-23  repealed:  6.061(f), 26.12(e), and 312.002(e) and (f).
  38-24        (c)  Section 322.008(b), Government Code, is repealed.
  38-25        (d)  Article 717t-1, Revised Statutes, is repealed.
  38-26        SECTION 34.  This Act takes effect immediately and applies
  38-27  beginning with the 1993-1994 school year, but only if the
   39-1  constitutional amendment proposed by __J.R. No.____, 73rd
   39-2  Legislature, Regular Session, 1993, takes effect.  If that
   39-3  amendment is not approved by the voters, this Act has no effect.
   39-4        SECTION 35.  The importance of this legislation and the
   39-5  crowded condition of the calendars in both houses create an
   39-6  emergency and an imperative public necessity that the
   39-7  constitutional rule requiring bills to be read on three several
   39-8  days in each house be suspended, and this rule is hereby suspended,
   39-9  and that this Act take effect and be in force from and after its
  39-10  passage, and it is so enacted.