By Sadler H.B. No. 3394
75R9119 JBN-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to funding public elementary and secondary schools and to
1-3 the imposition, administration, enforcement, and collection of, and
1-4 allocation of the revenue from, various state and local taxes.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 ARTICLE 1. STATE PROPERTY TAX
1-7 SECTION 1.01. The Tax Code is amended by adding Title 4 to
1-8 read as follows:
1-9 TITLE 4. STATE AD VALOREM TAX
1-10 CHAPTER 501. STATE AD VALOREM TAX
1-11 Sec. 501.001. STATE AD VALOREM TAX. (a) A state ad valorem
1-12 tax is levied on all taxable property in each county of this state.
1-13 (b) The state ad valorem tax rate is $1.50 on the $100
1-14 valuation of taxable property.
1-15 Sec. 501.002. APPRAISAL OF PROPERTY. (a) Property that is
1-16 subject to the ad valorem tax levied by Section 501.001 shall be
1-17 appraised by the appraisal officials in each county who appraise
1-18 property in the county for county ad valorem tax purposes.
1-19 (b) Property that is subject to the tax levied by Section
1-20 501.001 shall be appraised in the manner provided by Title 1 for
1-21 the appraisal of property that is subject to ad valorem taxation by
1-22 a county.
1-23 Sec. 501.003. ASSESSMENT AND COLLECTION OF TAX. (a) The
1-24 assessor for each county is responsible for assessing the ad
2-1 valorem tax levied by Section 501.001.
2-2 (b) The collector for each county is responsible for
2-3 collecting the ad valorem tax levied by Section 501.001.
2-4 (c) The ad valorem tax levied by Section 501.001 shall be
2-5 assessed and collected at the time and in the manner provided by
2-6 Title 1 for the assessment and collection of ad valorem taxes
2-7 levied by a county.
2-8 SECTION 1.02. This article takes effect only if a
2-9 constitutional amendment proposed by the 75th Legislature
2-10 authorizing a state property tax for public school purposes is
2-11 approved by the voters. If that amendment is not approved by the
2-12 voters, this article has no effect.
2-13 ARTICLE 2. SCHOOL FINANCE
2-14 SECTION 2.01. The following provisions of the Education Code
2-15 are repealed:
2-16 (1) Chapter 41; and
2-17 (2) Sections 7.055(a)(34), 12.107(b), and 42.103(e).
2-18 SECTION 2.02. Section 12.013(b), Education Code, is amended
2-19 to read as follows:
2-20 (b) A home-rule school district is subject to:
2-21 (1) a provision of this title establishing a criminal
2-22 offense;
2-23 (2) a provision of this title relating to limitations
2-24 on liability; and
2-25 (3) a prohibition, restriction, or requirement, as
2-26 applicable, imposed by this title or a rule adopted under this
2-27 title, relating to:
3-1 (A) the Public Education Information Management
3-2 System (PEIMS) to the extent necessary to monitor compliance with
3-3 this subchapter as determined by the commissioner;
3-4 (B) educator certification under Chapter 21 and
3-5 educator rights under Sections 21.407, 21.408, and 22.001;
3-6 (C) criminal history records under Subchapter C,
3-7 Chapter 22;
3-8 (D) student admissions under Section 25.001;
3-9 (E) school attendance under Sections 25.085,
3-10 25.086, and 25.087;
3-11 (F) inter-district or inter-county transfers of
3-12 students under Subchapter B, Chapter 25;
3-13 (G) elementary class size limits under Section
3-14 25.112, in the case of any campus in the district that is
3-15 considered low-performing under Section 39.131(b);
3-16 (H) high school graduation under Section 28.025;
3-17 (I) special education programs under Subchapter
3-18 A, Chapter 29;
3-19 (J) bilingual education under Subchapter B,
3-20 Chapter 29;
3-21 (K) prekindergarten programs under Subchapter E,
3-22 Chapter 29;
3-23 (L) safety provisions relating to the
3-24 transportation of students under Sections 34.002, 34.003, 34.004,
3-25 and 34.008;
3-26 (M) computation and distribution of state aid
3-27 under Chapters 31, 42, and 43;
4-1 (N) extracurricular activities under Section
4-2 33.081;
4-3 (O) health and safety under Chapter 38;
4-4 (P) public school accountability under
4-5 Subchapters B, C, D, and G, Chapter 39;
4-6 (Q) [equalized wealth under Chapter 41;]
4-7 [(R)] a bond or other obligation or tax rate
4-8 under Chapters 42, 43, and 45; and
4-9 (R) [(S)] purchasing under Chapter 44.
4-10 SECTION 2.03. Section 12.029(b), Education Code, is amended
4-11 to read as follows:
4-12 (b) If [Except as provided by Subchapter H, Chapter 41, if]
4-13 two or more school districts having different status, one of which
4-14 is home-rule school district status, consolidate into a single
4-15 district, the petition under Section 13.003 initiating the
4-16 consolidation must state the status for the consolidated district.
4-17 The ballot shall be printed to permit voting for or against the
4-18 proposition: "Consolidation of (names of school districts) into a
4-19 single school district governed as (status of school district
4-20 specified in the petition)."
4-21 SECTION 2.04. Section 21.402(b), Education Code, is amended
4-22 to read as follows:
4-23 (b) Not later than June 1 of each year, the commissioner
4-24 shall determine the amount appropriated for purposes of Chapter 42
4-25 for the state fiscal year beginning September 1. The commissioner
4-26 shall exclude from the determination[:]
4-27 [(1)] amounts designated solely for use in connection
5-1 with school facilities or for payment of principal of and interest
5-2 on bonds[; and]
5-3 [(2) local funds received under Subchapter D, Chapter
5-4 41].
5-5 SECTION 2.05. Section 42.252(e), Education Code, is amended
5-6 to read as follows:
5-7 (e) The commissioner shall hear appeals from school
5-8 districts that have experienced a rapid decline in tax base used in
5-9 calculating the local fund assignment, exceeding four percent of
5-10 the preceding year, that is beyond the control of the board of
5-11 trustees of the district. The commissioner may adjust the
5-12 district's taxable values for local fund assignment purposes for
5-13 such losses in value exceeding four percent and thereby adjust the
5-14 local fund assignment to reflect the local current year taxable
5-15 value. The decision of the commissioner is final. An adjustment
5-16 does not affect the local fund assignment of any other school
5-17 district. [This subsection applies to determinations by the
5-18 commissioner in identifying districts with wealth per student
5-19 exceeding the equalized wealth level pursuant to Section 41.004.]
5-20 ARTICLE 3. SCHOOL TAX RATE LIMIT
5-21 SECTION 3.01. Subchapter A, Chapter 45, Education Code, is
5-22 amended by adding Section 45.0031 to read as follows:
5-23 Sec. 45.0031. RATE LIMIT. (a) Notwithstanding Section
5-24 45.003 or other law, for the 1998 tax year, a school district may
5-25 not levy a tax for maintenance and operations at a rate that
5-26 exceeds 50 cents on the $100 valuation of taxable property.
5-27 (b) This section expires January 1, 2000.
6-1 ARTICLE 4. FRANCHISE TAX
6-2 SECTION 4.01. Section 171.001, Tax Code, is amended by
6-3 adding Subsection (d) to read as follows:
6-4 (d) For purposes of Subsection (a)(1), a corporation does
6-5 business in this state if the corporation:
6-6 (1) is a limited partner in a partnership that does
6-7 business in this state; and
6-8 (2) engages, directly or indirectly, in the
6-9 participation or domination or in the control of all or any part of
6-10 the partnership's business or assets in this state.
6-11 ARTICLE 5. STATE LOTTERY ACCOUNT
6-12 SECTION 5.01. Section 466.355(b), Government Code, is
6-13 amended to read as follows:
6-14 (b) Money in the state lottery account may be used only for
6-15 the following purposes and shall be distributed as follows:
6-16 (1) the payment of prizes to the holders of winning
6-17 tickets;
6-18 (2) the payment of costs incurred in the operation and
6-19 administration of the lottery, including any fees received by a
6-20 lottery operator, provided that the costs incurred in a fiscal
6-21 biennium may not exceed an amount equal to 15 percent of the gross
6-22 revenue accruing from the sale of tickets in that biennium;
6-23 (3) the establishment of a pooled bond fund, lottery
6-24 prize reserve fund, unclaimed prize fund, and prize payment
6-25 account; and
6-26 (4) the balance, after creation of a reserve
6-27 sufficient to pay the amounts needed or estimated to be needed
7-1 under Subdivisions (1) through (3), to be transferred to the
7-2 foundation school fund [unobligated portion of the general revenue
7-3 fund], on or before the 15th day of each month.
7-4 SECTION 5.02. Section 466.355, Government Code, as amended
7-5 by this article, applies only to revenue from the sale of a lottery
7-6 ticket that occurs on or after the effective date of this article.
7-7 Revenue from the sale of a lottery ticket that occurs before the
7-8 effective date of this article is governed by the law in effect on
7-9 the date of the sale, and the former law is continued in effect for
7-10 that purpose.
7-11 ARTICLE 6. PROPERTY TAX APPRAISAL
7-12 SECTION 6.01. Section 5.102, Tax Code, is amended to read as
7-13 follows:
7-14 Sec. 5.102. NONCOMPLIANCE BY APPRAISAL DISTRICT. (a) If
7-15 the study required by Section 403.302, Government Code, or a
7-16 performance audit conducted by the comptroller under this chapter
7-17 results in a finding that an appraisal district is not in
7-18 compliance with generally accepted appraisal standards and
7-19 practices, the comptroller shall deliver a report that details the
7-20 comptroller's findings and recommendations for improvement to the
7-21 appraisal district's chief appraiser and board of directors.
7-22 (b) If noncompliance with generally accepted appraisal
7-23 standards and practices is found in two consecutive annual studies
7-24 under Section 403.302, Government Code, or is found in a
7-25 performance audit conducted under this chapter and if an affected
7-26 appraisal district's chief appraiser and board of directors fail to
7-27 take effective remedial action as determined by the comptroller or
8-1 if a chief appraiser or the board of directors of an appraisal
8-2 district fails to cooperate fully with the comptroller in the
8-3 conduct of a study or audit, the comptroller may appoint a special
8-4 master who may exercise supervision and control over the operations
8-5 of the district, including the appraisal of property, until full
8-6 compliance with generally accepted appraisal standards and
8-7 practices is achieved. The appraisal district shall bear the costs
8-8 related to the master's supervision and control.
8-9 ARTICLE 7. SALES TAX
8-10 SECTION 7.01. Subchapter A, Chapter 151, Tax Code, is
8-11 amended by adding Section 151.0043 to read as follows:
8-12 Sec. 151.0043. "LEGAL SERVICES." "Legal services" means
8-13 representation or legal counseling by an attorney, including
8-14 paralegal or other office services performed by an employee or
8-15 agent of the attorney and billed to a client of the attorney.
8-16 SECTION 7.02. Section 151.0101(a), Tax Code, is amended to
8-17 read as follows:
8-18 (a) "Taxable services" means:
8-19 (1) amusement services;
8-20 (2) cable television services;
8-21 (3) personal services;
8-22 (4) motor vehicle parking and storage services;
8-23 (5) the repair, remodeling, maintenance, and
8-24 restoration of tangible personal property, except:
8-25 (A) aircraft;
8-26 (B) a ship, boat, or other vessel, other than:
8-27 (i) a taxable boat or motor as defined by
9-1 Section 160.001;
9-2 (ii) a sports fishing boat; or
9-3 (iii) any other vessel used for pleasure;
9-4 (C) the repair, maintenance, and restoration of
9-5 a motor vehicle; and
9-6 (D) the repair, maintenance, creation, and
9-7 restoration of a computer program, including its development and
9-8 modification, not sold by the person performing the repair,
9-9 maintenance, creation, or restoration service;
9-10 (6) telecommunications services;
9-11 (7) credit reporting services;
9-12 (8) debt collection services;
9-13 (9) insurance services;
9-14 (10) information services;
9-15 (11) real property services;
9-16 (12) data processing services;
9-17 (13) real property repair and remodeling;
9-18 (14) security services; [and]
9-19 (15) telephone answering services; and
9-20 (16) legal services.
9-21 SECTION 7.03. Section 151.317(a), Tax Code, is amended to
9-22 read as follows:
9-23 (a) Gas and electricity are exempted from the taxes imposed
9-24 by this chapter except when sold for residential or commercial use.
9-25 SECTION 7.04. Section 151.315, Tax Code, is repealed.
9-26 ARTICLE 8. EFFECTIVE DATE AND EMERGENCY
9-27 SECTION 8.01. This Act takes effect January 1, 1998.
10-1 SECTION 8.02. The importance of this legislation and the
10-2 crowded condition of the calendars in both houses create an
10-3 emergency and an imperative public necessity that the
10-4 constitutional rule requiring bills to be read on three several
10-5 days in each house be suspended, and this rule is hereby suspended.