By Heflin H.B. No. 3309
75R6290 DAK-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the repeal of property taxes, an increase in the rate
1-3 of the sales and use tax and an expansion of that tax to any
1-4 transaction in this state, including a sale for resale, involving
1-5 tangible or real property or any service, and the distribution of
1-6 the proceeds from the sales and use tax to replace property tax
1-7 revenue.
1-8 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-9 ARTICLE 1. PROPERTY TAXES
1-10 SECTION 1.01. Title 1, Tax Code, is repealed.
1-11 SECTION 1.02. (a) This article takes effect January 1,
1-12 1998.
1-13 (b) This article does not affect taxes assessed before the
1-14 effective date of this Act, and the law in effect before the
1-15 effective date of this Act is continued in effect for purposes of
1-16 the liability for and collection of those taxes and penalties and
1-17 interest on those taxes.
1-18 ARTICLE 2. SALES AND USE TAX PROVISIONS
1-19 SECTION 2.01. Subchapter A, Chapter 151, Tax Code, is
1-20 amended by adding Section 151.0046 to read as follows:
1-21 Sec. 151.0046. "REAL PROPERTY." Real property includes a
1-22 building, structure, or other improvement to real property.
1-23 SECTION 2.02. Section 151.005, Tax Code, is amended to read
1-24 as follows:
2-1 Sec. 151.005. "SALE" OR "PURCHASE." (a) "Sale" or
2-2 "purchase" means any of the following when done or performed for
2-3 consideration:
2-4 (1) a transfer of title or possession of tangible
2-5 personal property or real property;
2-6 (2) the exchange, barter, lease, or rental of tangible
2-7 personal property or real property;
2-8 (3) the performance of a taxable service or, in the
2-9 case of an amusement service, a transfer of title to or possession
2-10 of a ticket or other admission document, the collection of an
2-11 admission fee, whether by individual performance, subscription
2-12 series, or membership privilege, the collection of dues or a fee,
2-13 charge, or assessment, including an initiation fee, by a club or
2-14 organization for membership or a special privilege, status, or
2-15 membership classification in the club or organization, or the use
2-16 of a coin-operated machine;
2-17 (4) the production, fabrication, processing, printing,
2-18 or imprinting of tangible personal property for consumers who
2-19 directly or indirectly furnish the materials used in the
2-20 production, fabrication, processing, printing, or imprinting;
2-21 (5) the furnishing and distribution of tangible
2-22 personal property by a social club or fraternal organization to
2-23 anyone;
2-24 (6) the furnishing, preparation, or service of food,
2-25 meals, or drinks;
2-26 (7) a transfer of the possession of tangible personal
2-27 property or real property if the title to the property is retained
3-1 by the seller as security for the payment of the price; or
3-2 (8) a transfer of the title or possession of tangible
3-3 personal property that has been produced, fabricated, or printed to
3-4 the special order of the customer.
3-5 (b) "Sale" or "purchase" includes a sale for resale.
3-6 SECTION 2.03. Section 151.006, Tax Code, is amended to read
3-7 as follows:
3-8 Sec. 151.006. "SALE FOR RESALE." (a) "Sale for resale"
3-9 means a sale of:
3-10 (1) tangible personal property or a taxable service to
3-11 a purchaser who acquires the property or service for the purpose of
3-12 reselling it in the United States of America or a possession or
3-13 territory of the United States of America or in the United Mexican
3-14 States in the normal course of business in the form or condition in
3-15 which it is acquired or as an attachment to or integral part of
3-16 other tangible personal property or taxable service;
3-17 (2) tangible personal property to a purchaser for the
3-18 sole purpose of the purchaser's leasing or renting it in the United
3-19 States of America or a possession or territory of the United States
3-20 of America or in the United Mexican States to another person, but
3-21 not if incidental to the leasing or renting of real estate;
3-22 (3) tangible personal property to a purchaser who
3-23 acquires the property for the purpose of transferring it in the
3-24 United States of America or a possession or territory of the United
3-25 States of America or in the United Mexican States as an integral
3-26 part of a taxable service; or
3-27 (4) a taxable service performed on tangible personal
4-1 property that is held for sale by the purchaser of the taxable
4-2 service.
4-3 (b) "Sale for resale" includes any sale of real property,
4-4 without regard to whether the purchaser acquires the property with
4-5 the intention of reselling it.
4-6 SECTION 2.04. Section 151.010, Tax Code, is amended to read
4-7 as follows:
4-8 Sec. 151.010. "TAXABLE ITEM." "Taxable item" means:
4-9 (1) real property;
4-10 (2) tangible personal property; and
4-11 (3) taxable services.
4-12 SECTION 2.05. Section 151.0101(a), Tax Code, is amended to
4-13 read as follows:
4-14 (a) "Taxable services" means the performance of any services
4-15 other than services by employees as described by Section 151.057.
4-16 The term includes both services defined under this chapter and
4-17 those not defined [:]
4-18 [(1) amusement services;]
4-19 [(2) cable television services;]
4-20 [(3) personal services;]
4-21 [(4) motor vehicle parking and storage services;]
4-22 [(5) the repair, remodeling, maintenance, and
4-23 restoration of tangible personal property, except:]
4-24 [(A) aircraft;]
4-25 [(B) a ship, boat, or other vessel, other than:]
4-26 [(i) a taxable boat or motor as defined by
4-27 Section 160.001;]
5-1 [(ii) a sports fishing boat; or]
5-2 [(iii) any other vessel used for pleasure;]
5-3 [(C) the repair, maintenance, and restoration of
5-4 a motor vehicle; and]
5-5 [(D) the repair, maintenance, creation, and
5-6 restoration of a computer program, including its development and
5-7 modification, not sold by the person performing the repair,
5-8 maintenance, creation, or restoration service;]
5-9 [(6) telecommunications services;]
5-10 [(7) credit reporting services;]
5-11 [(8) debt collection services;]
5-12 [(9) insurance services;]
5-13 [(10) information services;]
5-14 [(11) real property services;]
5-15 [(12) data processing services;]
5-16 [(13) real property repair and remodeling;]
5-17 [(14) security services; and]
5-18 [(15) telephone answering services].
5-19 SECTION 2.06. Section 151.051(b), Tax Code, is amended to
5-20 read as follows:
5-21 (b) The sales tax rate is 7 [6 1/4] percent of the sales
5-22 price of the taxable item sold.
5-23 SECTION 2.07. Section 151.054, Tax Code, is amended to read
5-24 as follows:
5-25 Sec. 151.054. GROSS RECEIPTS PRESUMED SUBJECT TO TAX. (a)
5-26 All [Except as provided by Subsection (d) of this section, all]
5-27 gross receipts of a seller are presumed to have been subject to the
6-1 sales tax unless a properly completed [resale or] exemption
6-2 certificate is accepted by the seller.
6-3 (b) [A sale is exempt if the seller receives in good faith
6-4 from a purchaser, who is in the business of selling, leasing, or
6-5 renting taxable items, a resale certificate stating that the
6-6 tangible personal property or service is acquired for the purpose
6-7 of selling, leasing, or renting it in the regular course of
6-8 business or for the purpose of transferring it as an integral part
6-9 of a taxable service performed in the regular course of business.]
6-10 [(c)] A sale is exempt if the seller receives in good faith
6-11 from a purchaser an exemption certificate stating qualifications
6-12 for an exemption provided in Subchapter H of this chapter.
6-13 (c) [(d) A sale of liquor, wine, beer, or malt liquor by the
6-14 holder of a manufacturer's license, wholesaler's permit, general
6-15 class B wholesaler's permit, local class B wholesaler's permit,
6-16 local distributor's permit, or a general, local, or branch
6-17 distributor's license issued under the Alcoholic Beverage Code to
6-18 the holder of a retail license or permit issued under the Alcoholic
6-19 Beverage Code is presumed to be a sale for resale. In a sale to
6-20 which this section applies, the seller is not required to receive a
6-21 resale certificate from the purchaser.]
6-22 [(e)] Properly completed [resale or] exemption certificates
6-23 should be in the possession of the seller at the time the
6-24 nontaxable transaction occurs. If the seller is not in possession
6-25 of these certificates within 60 days from the date written notice
6-26 requiring possession of them is given to the seller by the
6-27 comptroller, deductions claimed by the seller that require delivery
7-1 of the certificates shall be disallowed. If the seller delivers
7-2 the certificates to the comptroller within the 60-day period, the
7-3 comptroller may verify the reason or basis for exemption claimed in
7-4 the certificates before allowing any deductions. A deduction may
7-5 not be granted on the basis of certificates delivered to the
7-6 comptroller after the 60-day period.
7-7 SECTION 2.08. Section 151.055, Tax Code, is amended to read
7-8 as follows:
7-9 Sec. 151.055. SALES OF ITEMS ACQUIRED FOR LEASE OR RENTAL.
7-10 [(a) If a person purchases tangible personal property by means of
7-11 a sale for resale for the purpose of renting or leasing the
7-12 property for use but subsequently sells the property in an
7-13 occasional sale before the person has collected and paid to the
7-14 state an amount of sales tax on rental or lease charges equal to
7-15 the amount of sales tax that would have been due if the person had
7-16 not acquired the property at a sale for resale, the person at the
7-17 time of the occasional sale shall include in his receipts from
7-18 taxable sales the amount by which the purchase price of the item at
7-19 the occasional sale exceeds the amount received from renting or
7-20 leasing the property.]
7-21 [(b)] If tangible personal property is rented or leased
7-22 under an agreement that provides that all or a portion of the
7-23 rental or lease payments may be credited against the purchase price
7-24 of the item, the lessor shall collect the sales tax on the sales
7-25 price, including the sum of all lease or rental payments for the
7-26 term of the lease or rental, at the time the purchaser takes
7-27 possession of the property or when the first payment is due,
8-1 whichever period is the earlier. If the purchaser-lessee returns
8-2 the taxable item to the seller-lessor before the end of the lease
8-3 or rental period without having acquired title to the property, the
8-4 seller-lessor may take a credit against other taxes due under this
8-5 chapter or claim a refund as provided by this code for an amount
8-6 equal to the amount of the taxes paid on the unpaid portion of the
8-7 sales price.
8-8 SECTION 2.09. Section 151.104, Tax Code, is amended to read
8-9 as follows:
8-10 Sec. 151.104. SALE FOR STORAGE, USE, OR CONSUMPTION
8-11 PRESUMED. (a) A sale of a taxable item by a person for delivery
8-12 in this state is presumed to be a sale for storage, use, or
8-13 consumption in this state unless an [a resale or] exemption
8-14 certificate is accepted by the seller.
8-15 (b) [A sale is exempt if the seller receives in good faith
8-16 from a purchaser, who is in the business of selling, leasing, or
8-17 renting taxable items, a resale certificate stating that the
8-18 property is acquired for the purpose of selling, leasing, or
8-19 renting it in the regular course of business or for the purpose of
8-20 transferring it as an integral part of a taxable service performed
8-21 in the regular course of business.]
8-22 [(c)] A sale is exempt if the seller receives in good faith
8-23 from a purchaser an exemption certificate stating qualifications
8-24 for an exemption provided in Subchapter H of this chapter.
8-25 (c) [(d)] Properly executed [resale or] exemption
8-26 certificates should be in possession of the seller at the time the
8-27 nontaxable transaction occurs. If the seller is not in possession
9-1 of these certificates within 60 days from the date written notice
9-2 requiring possession of them is given to the seller by the
9-3 comptroller, deductions claimed by the seller that require delivery
9-4 of the certificates shall be disallowed. If the seller acquires
9-5 certificates within the 60-day period, the comptroller may verify
9-6 the reason or basis for exemption claimed in the certificates
9-7 before allowing any deductions. A deduction may not be granted on
9-8 the basis of certificates obtained after the 60-day period.
9-9 SECTION 2.10. The heading to Subchapter E, Chapter 151, Tax
9-10 Code, is amended to read as follows:
9-11 SUBCHAPTER E. [RESALE AND] EXEMPTION CERTIFICATES
9-12 SECTION 2.11. Section 151.313, Tax Code, is amended to read
9-13 as follows:
9-14 Sec. 151.313. DRUGS OR MEDICINE. A [HEALTH CARE SUPPLIES.
9-15 (a) The following items are exempted from the taxes imposed by
9-16 this chapter:]
9-17 [(1) a] drug or medicine[, other than insulin,] if
9-18 prescribed or dispensed for a human or animal by a licensed
9-19 practitioner of the healing arts is exempted from the taxes imposed
9-20 by this chapter[;]
9-21 [(2) insulin;]
9-22 [(3) a hypodermic syringe or needle;]
9-23 [(4) a brace; hearing aid or audio loop; orthopedic,
9-24 dental, or prosthetic device; ileostomy, colostomy, or ileal
9-25 bladder appliance; or supplies or replacement parts for the listed
9-26 items;]
9-27 [(5) a therapeutic appliance, device, and any related
10-1 supplies specifically designed for those products, if dispensed or
10-2 prescribed by a licensed practitioner of the healing arts, when
10-3 those items are purchased and used by an individual for whom the
10-4 items listed in this subdivision were dispensed or prescribed;]
10-5 [(6) corrective lens and necessary and related
10-6 supplies, if dispensed or prescribed by an ophthalmologist or
10-7 optometrist;]
10-8 [(7) specialized printing or signalling equipment used
10-9 by the deaf for the purpose of enabling the deaf to communicate
10-10 through the use of an ordinary telephone and all materials, paper,
10-11 and printing ribbons used in that equipment;]
10-12 [(8) a braille wristwatch, braille writer, braille
10-13 paper and braille electronic equipment that connects to computer
10-14 equipment, and the necessary adaptive devices and adaptive computer
10-15 software;]
10-16 [(9) each of the following items if purchased for use
10-17 by the blind to enable them to function more independently: a
10-18 slate and stylus, print enlarger, light probe, magnifier, white
10-19 cane, talking clock, large print terminal, talking terminal, or
10-20 harness for guide dog; and]
10-21 [(10) hospital beds.]
10-22 [(b) Each of the following items is exempted from the tax
10-23 imposed by this chapter if the item is used by a person who is deaf
10-24 to enable the person to function more independently:]
10-25 [(1) a light signal and device to adapt items such as
10-26 telecommunication devices for the deaf (TDDs), telephones,
10-27 doorbells, and smoke alarms; and]
11-1 [(2) adaptive devices or adaptive software for
11-2 computers used by persons who are deaf].
11-3 SECTION 2.12. Section 151.419(b), Tax Code, is amended to
11-4 read as follows:
11-5 (b) The application must be accompanied with:
11-6 (1) an agreement that is signed by the applicant or a
11-7 responsible officer of an applicant corporation, that is in a form
11-8 prescribed by the comptroller, and that provides that the applicant
11-9 agrees to:
11-10 (A) accrue and pay all taxes imposed by
11-11 Subchapter D of this chapter on the storage and use of all taxable
11-12 items sold to or leased or rented by the permit holder unless the
11-13 items are exempted from the taxes imposed by this chapter;
11-14 (B) pay the imposed taxes monthly on or before
11-15 the 20th day of the month following the end of each calendar month;
11-16 and
11-17 (C) waive the discount permitted by Section
11-18 151.423 of this code on the payment of all taxes under the direct
11-19 payment permit only;
11-20 (2) a description, in the amount of detail that the
11-21 comptroller requires, of the accounting method by which the
11-22 applicant proposes to differentiate between taxable and exempt
11-23 transactions; and
11-24 (3) records establishing that the applicant is a
11-25 responsible person who annually purchases taxable items that have a
11-26 value when purchased of $800,000 or more [excluding the value of
11-27 taxable items for which resale certificates were or could have been
12-1 given].
12-2 SECTION 2.13. Section 151.707, Tax Code, is amended to read
12-3 as follows:
12-4 Sec. 151.707. [RESALE OR] EXEMPTION CERTIFICATE; CRIMINAL
12-5 PENALTY. (a) A person commits an offense if the person:
12-6 (1) intentionally or knowingly makes a false entry in,
12-7 or a fraudulent alteration of, an exemption [or resale]
12-8 certificate;
12-9 (2) makes, presents, or uses an exemption certificate
12-10 [or resale certificate] with knowledge that it is false and with
12-11 the intent that it be accepted as a valid [resale or] exemption
12-12 certificate; or
12-13 (3) intentionally conceals, removes, or impairs the
12-14 verity or legibility of an exemption [or resale] certificate or
12-15 unreasonably impedes the availability of an exemption [or resale]
12-16 certificate.
12-17 (b) An offense under Subsection (a)(1) or (a)(2) of this
12-18 section is:
12-19 (1) a Class C misdemeanor if the tax avoided by the
12-20 use of the exemption [or resale] certificate is less than $20;
12-21 (2) a Class B misdemeanor if the tax avoided by the
12-22 use of the exemption [or resale] certificate is $20 or more, but
12-23 less than $200;
12-24 (3) a Class A misdemeanor if the tax avoided by the
12-25 use of the exemption [or resale] certificate is $200 or more, but
12-26 less than $750;
12-27 (4) a felony of the third degree if the tax avoided by
13-1 the use of the exemption [or resale] certificate is $750 or more,
13-2 but less than $20,000; or
13-3 (5) a felony of the second degree if the tax avoided
13-4 by the use of the exemption [or resale] certificate is $20,000 or
13-5 more.
13-6 SECTION 2.14. Subchapter M, Chapter 151, Tax Code, is
13-7 amended by adding Section 151.802 to read as follows:
13-8 Sec. 151.802. DISPOSITION OF PROCEEDS FROM INCREASED RATE
13-9 AND EXPANDED TAX BASE. (a) Notwithstanding Section 151.801, all
13-10 proceeds from the collection of the taxes imposed by this chapter
13-11 from the increase in the rate of the tax effective January 1, 1998,
13-12 or the imposition of the tax on a taxable item not subject to the
13-13 tax before January 1, 1998, shall be distributed as provided by
13-14 this section.
13-15 (b) The comptroller shall distribute to the foundation
13-16 school fund an amount sufficient to provide each school district
13-17 with the money allotted to the district by Chapter 42, Education
13-18 Code, to be paid in the manner provided by that chapter.
13-19 (c) The chief financial officer of each entity, other than a
13-20 school district, that imposed an ad valorem tax in 1997 shall send
13-21 an affidavit to the comptroller stating the amount of revenue
13-22 generated by the tax for that year. The chief financial officer of
13-23 a school district shall send an affidavit to the comptroller
13-24 stating the amount of principal and interest payments due by the
13-25 school on bonded indebtedness in 1997 for bonds for which the
13-26 district's ad valorem taxes are pledged. The comptroller by rule
13-27 shall provide for the form of the affidavit and specify any
14-1 information that must accompany the submission of the affidavit.
14-2 The chief financial officer shall submit the affidavit in the form
14-3 and manner provided by the comptroller not later than July 1, 1998.
14-4 The comptroller shall accept the affidavit only if the comptroller
14-5 determines that the amount of revenue stated in the affidavit is
14-6 accurate.
14-7 (d) The comptroller shall each year send to each entity for
14-8 which the comptroller has accepted an affidavit submitted under
14-9 Subsection (c) the amount of money stated in the affidavit as soon
14-10 as possible, taking into consideration the distribution of money to
14-11 school districts under Subsection (b) and the cash flow needs of
14-12 the state, but not later than January 31 of the year following the
14-13 year for which the payment is made.
14-14 (e) After distribution by the comptroller of all the money
14-15 necessary to make payments under this section, any remaining
14-16 revenue shall be deposited to the credit of the general revenue
14-17 fund.
14-18 SECTION 2.15. Subchapter B, Chapter 322, Tax Code, is
14-19 amended by adding Section 322.111 to read as follows:
14-20 Sec. 322.111. EXPANDED TAX BASE EXEMPTION. The receipts
14-21 from the sale, use, storage, rental, or other consumption of a
14-22 taxable item that was not subject to the tax imposed by Chapter
14-23 151 on January 1, 1998, are exempt from the tax imposed by this
14-24 chapter.
14-25 SECTION 2.16. The following provisions of the Tax Code are
14-26 repealed:
14-27 (1) Sections 151.0034-151.0039;
15-1 (2) Section 151.0048;
15-2 (3) Section 151.0075;
15-3 (4) Section 151.0102;
15-4 (5) Section 151.052(b);
15-5 (6) Sections 151.151-151.154;
15-6 (7) Section 151.302;
15-7 (8) Section 151.314;
15-8 (9) Section 151.315;
15-9 (10) Section 151.316;
15-10 (11) Section 151.3161;
15-11 (12) Section 151.317;
15-12 (13) Sections 151.319(a), (b), and (c);
15-13 (14) Section 151.320;
15-14 (15) Section 151.322;
15-15 (16) Section 151.3291;
15-16 (17) Section 151.336;
15-17 (18) Section 151.342;
15-18 (19) Section 151.353; and
15-19 (20) Section 151.427.
15-20 SECTION 2.17. (a) The receipts from the sale, use, or
15-21 rental of and the storage, use, or consumption in this state of
15-22 taxable services that become subject to the sales and use tax under
15-23 Chapter 151, Tax Code, because of the change in law made by this
15-24 article are exempt from the sales and use tax if:
15-25 (1) the services are used for the performance of a
15-26 written contract entered into before the date this article takes
15-27 effect if the contract is not subject to change or modification by
16-1 reason of the tax or the services are used pursuant to an
16-2 obligation of a bid or bids submitted before the date this article
16-3 takes effect if the bid or bids may not be withdrawn, modified, or
16-4 changed by reason of the tax imposed by this article; and
16-5 (2) notice of a contract or bid on which an exemption
16-6 is to be claimed is given by the taxpayer to the comptroller before
16-7 the 61st day after the date this article takes effect.
16-8 (b) The exemption provided by this section expires on
16-9 December 31, 2000.
16-10 SECTION 2.18. (a) There is exempted from the use tax
16-11 imposed by Subchapter D, Chapter 151, Tax Code, the storage, use,
16-12 or other consumption of an item of tangible personal property or
16-13 real property or the value of the performance of a service if the
16-14 item or service was purchased before January 1, 1998, and the item
16-15 or service was exempt, or, had it been purchased in Texas at the
16-16 same time would have been exempt, from the sales tax imposed by
16-17 Subchapter C, Chapter 151, Tax Code.
16-18 (b) This section does not apply to an item or service
16-19 exempted by this section after the item or service is subject to
16-20 the sales tax imposed by Subchapter C, Chapter 151, Tax Code,
16-21 because of a subsequent sale or lease of the item.
16-22 SECTION 2.19. (a) This article takes effect January 1,
16-23 1998.
16-24 (b) The comptroller shall begin payments under Section
16-25 151.802, Tax Code, as added by this Act, beginning with the
16-26 calendar year 1998.
17-1 ARTICLE 3. SCHOOL FINANCE
17-2 SECTION 3.01. Section 42.101, Education Code, is amended to
17-3 read as follows:
17-4 Sec. 42.101. BASIC ALLOTMENT. For each student in average
17-5 daily attendance, not including the time students spend each day in
17-6 special education programs in an instructional arrangement other
17-7 than mainstream or career and technology education programs, for
17-8 which an additional allotment is made under Subchapter C, a
17-9 district is entitled to an allotment of $3,500 [$2,387] or a
17-10 greater amount adopted by the foundation school fund budget
17-11 committee under Section 42.256. A greater amount for any school
17-12 year may be provided by appropriation.
17-13 SECTION 3.02. Sections 42.251(a) and (b), Education Code,
17-14 are amended to read as follows:
17-15 (a) The sum of the basic allotment under Subchapter B and
17-16 the special allotments under Subchapter C, computed in accordance
17-17 with this chapter, constitute the [tier one allotments. The sum of
17-18 the tier one allotments, the guaranteed yield allotments under
17-19 Subchapter F, and assistance provided under the school facilities
17-20 assistance program under Subchapter H, computed in accordance with
17-21 this chapter, constitute the total cost of the] Foundation School
17-22 Program.
17-23 (b) The program shall be financed by:
17-24 (1) [ad valorem tax revenue generated by an equalized
17-25 uniform school district effort;]
17-26 [(2) ad valorem tax revenue generated by local school
17-27 district effort in excess of the equalized uniform school district
18-1 effort;]
18-2 [(3)] state available school funds distributed in
18-3 accordance with law; and
18-4 (2) [(4)] state funds appropriated for the purposes of
18-5 public school education and allocated to each district in an
18-6 amount sufficient to finance the cost of each district's Foundation
18-7 School Program not covered by state available school [other] funds
18-8 [specified in this subsection].
18-9 SECTION 3.03. Sections 42.253(a)-(c) and (i), Education
18-10 Code, are amended to read as follows:
18-11 (a) For each school year the commissioner shall determine:
18-12 (1) the amount of money to which a school district is
18-13 entitled under Subchapters B and C; and
18-14 (2) [the amount of money to which a school district is
18-15 entitled under Subchapter F;]
18-16 [(3)] the amount of money allocated to the district
18-17 from the available school fund[;]
18-18 [(4) the amount of each district's tier one local
18-19 share under Section 42.252; and]
18-20 [(5) the amount of each district's tier two local
18-21 share under Section 42.302].
18-22 (b) The [Except as provided by this subsection, the]
18-23 commissioner shall base the determinations under Subsection (a) on
18-24 the estimate [estimates] provided to the legislature under Section
18-25 42.254 for each school district for each school year. [The
18-26 commissioner shall reduce the entitlement of each district that has
18-27 a final taxable value of property for the second year of a state
19-1 fiscal biennium that is higher than the estimate under Section
19-2 42.254. A reduction under this subsection may not reduce the
19-3 district's entitlement below the amount to which it is entitled at
19-4 its actual taxable value of property. The sum of the reductions
19-5 under this subsection may not be greater than the amount necessary
19-6 to fully fund the entitlement of each district.]
19-7 (c) Each school district is entitled to an amount equal to
19-8 the difference for that district between [the sum of] Subsections
19-9 (a)(1) and (a)(2) [and the sum of Subsections (a)(3), (a)(4), and
19-10 (a)(5)].
19-11 (i) Not later than March 1 each year, the commissioner shall
19-12 determine the actual amount of state funds to which each school
19-13 district is entitled under the allocation formulas in this chapter
19-14 for the current school year and shall compare that amount with the
19-15 amount of the warrants issued to each district for that year. If
19-16 the amount of the warrants differs from the amount to which a
19-17 district is entitled because of variations in the district's [tax
19-18 rate,] student enrollment, [or taxable value of property,] the
19-19 commissioner shall adjust the district's entitlement for the next
19-20 fiscal year accordingly.
19-21 SECTION 3.04. Section 42.254(a), Education Code, is amended
19-22 to read as follows:
19-23 (a) Not later than October 1 of each even-numbered year,[:]
19-24 [(1)] the agency shall submit to the foundation school
19-25 fund budget committee and the legislature an estimate of the [tax
19-26 rate and] student enrollment of each school district for the
19-27 following biennium[; and]
20-1 [(2) the comptroller shall submit to the foundation
20-2 school fund budget committee and the legislature an estimate of the
20-3 total taxable value of all property in the state as determined
20-4 under Subchapter M, Chapter 403, Government Code, for the following
20-5 biennium].
20-6 SECTION 3.05. Section 42.256(e), Education Code, is amended
20-7 to read as follows:
20-8 (e) The funding elements shall include:
20-9 (1) a basic allotment for the purposes of Section
20-10 42.101 that[, when combined with the guaranteed yield component
20-11 provided by Subchapter F,] represents the cost per student of a
20-12 regular education program that meets all mandates of law and
20-13 regulation;
20-14 (2) adjustments designed to reflect the variation in
20-15 known resource costs and costs of education beyond the control of
20-16 school districts; and
20-17 (3) appropriate program cost differentials and other
20-18 funding elements for the programs authorized under Subchapter C,
20-19 with the program funding level expressed as dollar amounts and as
20-20 weights applied to the adjusted basic allotment for the appropriate
20-21 year[;]
20-22 [(4) the maximum guaranteed level of qualified state
20-23 and local funds per student for the purposes of Subchapter F;]
20-24 [(5) the enrichment and facilities tax rate under
20-25 Subchapter F;]
20-26 [(6) the calculation of students in weighted average
20-27 daily attendance under Section 42.302; and]
21-1 [(7) the amount to be appropriated for the school
21-2 facilities assistance program under Subchapter H].
21-3 SECTION 3.06. Section 42.259(c), Education Code, is amended
21-4 to read as follows:
21-5 (c) Payments from the foundation school fund to each
21-6 [category 2] school district shall be made as follows:
21-7 (1) 22 percent of the yearly entitlement of the
21-8 district shall be paid in an installment to be made on or before
21-9 the 25th day of September of a fiscal year;
21-10 (2) 18 percent of the yearly entitlement of the
21-11 district shall be paid in an installment to be made on or before
21-12 the 25th day of October;
21-13 (3) 9.5 percent of the yearly entitlement of the
21-14 district shall be paid in an installment to be made on or before
21-15 the 25th day of November;
21-16 (4) 7.5 percent of the yearly entitlement of the
21-17 district shall be paid in an installment to be made on or before
21-18 the 25th day of April;
21-19 (5) five percent of the yearly entitlement of the
21-20 district shall be paid in an installment to be made on or before
21-21 the 25th day of May;
21-22 (6) 10 percent of the yearly entitlement of the
21-23 district shall be paid in an installment to be made on or before
21-24 the 25th day of June;
21-25 (7) 13 percent of the yearly entitlement of the
21-26 district shall be paid in an installment to be made on or before
21-27 the 25th day of July; and
22-1 (8) 15 percent of the yearly entitlement of the
22-2 district shall be paid in an installment to be made on or before
22-3 the 25th day of August.
22-4 SECTION 3.07. Section 45.001, Education Code, is amended to
22-5 read as follows:
22-6 Sec. 45.001. BONDS; [AND BOND] TAXES. (a) The governing
22-7 board of an independent school district, including the city
22-8 council or commission that has jurisdiction over a municipally
22-9 controlled independent school district, the governing board of a
22-10 rural high school district, and the commissioners court of a
22-11 county, on behalf of each common school district under its
22-12 jurisdiction, may issue negotiable coupon bonds for the
22-13 construction and equipment of school buildings in the district and
22-14 the purchase of the necessary sites for school buildings, and may
22-15 [levy,] pledge state funds to be received under Chapters 42 and
22-16 43[, assess, and collect annual ad valorem taxes sufficient] to
22-17 pay the principal of and interest on the bonds as the principal and
22-18 interest become due[, subject to Section 45.003]. The bonds must
22-19 mature serially or otherwise not more than 40 years from their
22-20 date. The bonds may be made redeemable before maturity. All bonds
22-21 must be sold to the highest bidder for not less than their par
22-22 value and accrued interest.
22-23 (b) Notwithstanding any other provision of this code, the
22-24 governing body of a school district may not impose an ad valorem
22-25 tax.
22-26 SECTION 3.08. The following provisions of the Education Code
22-27 are repealed:
23-1 (1) Chapter 41;
23-2 (2) Subchapters F and G, Chapter 42;
23-3 (3) Subchapter H, Chapter 45;
23-4 (4) Sections 11.152, 42.001(b), 42.002(b), 42.103(e),
23-5 42.251(c), 42.252, 42.253(e)-(h) and (k), 42.254(b), 42.257,
23-6 42.259(a), (b), and (d), 45.002, 45.003, 45.006, and 45.104.
23-7 SECTION 3.09. Subchapter M, Chapter 403, Government Code, is
23-8 repealed.
23-9 SECTION 3.10. This article takes effect September 1, 1998.
23-10 ARTICLE 4. CONTINGENCY; EMERGENCY
23-11 SECTION 4.01. This Act takes effect as provided by each
23-12 article, but only if the constitutional amendment proposed by
23-13 H.J.R. No. ___, 75th Legislature, Regular Session, 1997, is
23-14 approved by the voters. If that amendment is not approved by the
23-15 voters, this Act has no effect.
23-16 SECTION 4.02. The importance of this legislation and the
23-17 crowded condition of the calendars in both houses create an
23-18 emergency and an imperative public necessity that the
23-19 constitutional rule requiring bills to be read on three several
23-20 days in each house be suspended, and this rule is hereby suspended.