1-1 By: Cuellar (Senate Sponsor - Gallegos) H.B. No. 51 1-2 (In the Senate - Received from the House May 13, 1999; 1-3 May 14, 1999, read first time and referred to Committee on 1-4 Intergovernmental Relations; May 14, 1999, reported favorably by 1-5 the following vote: Yeas 4, Nays 0; May 14, 1999, sent to 1-6 printer.) 1-7 A BILL TO BE ENTITLED 1-8 AN ACT 1-9 relating to the authority of a taxing unit to permit certain 1-10 persons to perform services or to provide persons to perform 1-11 services for the taxing unit in lieu of paying ad valorem taxes 1-12 owed to the unit. 1-13 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-14 SECTION 1. Chapter 31, Tax Code, is amended by adding 1-15 Section 31.035 to read as follows: 1-16 Sec. 31.035. PERFORMANCE OF SERVICE IN LIEU OF PAYMENT OF 1-17 TAXES ON HOMESTEAD OF ELDERLY PERSON. (a) The governing body of a 1-18 taxing unit by order or resolution may permit an individual who is 1-19 at least 65 years of age to perform service for the taxing unit in 1-20 lieu of paying taxes imposed by the taxing unit on property owned 1-21 by the individual and occupied as the individual's residence 1-22 homestead. 1-23 (b) The governing body of the taxing unit shall determine: 1-24 (1) the number of property owners who will be 1-25 permitted to perform service for the taxing unit under this 1-26 section; and 1-27 (2) the maximum number of hours of service that a 1-28 property owner may perform for the taxing unit under this section. 1-29 (c) The governing body shall require that each property 1-30 owner permitted to perform service for the taxing unit under this 1-31 section execute a contract with the taxing unit. The contract must 1-32 be executed before the delinquency date and must: 1-33 (1) specify: 1-34 (A) the nature of the service that the property 1-35 owner will perform for the taxing unit; 1-36 (B) the facility or location where the service 1-37 will be performed; 1-38 (C) the number of hours of service the property 1-39 owner will perform; and 1-40 (D) when the property owner will perform the 1-41 service; and 1-42 (2) set out or describe the provisions of Subsections 1-43 (d), (e), and (f). 1-44 (d) For each hour of service performed for the taxing unit, 1-45 the property owner receives a credit against the taxes owed in an 1-46 amount equal to the amount that would be earned by working one hour 1-47 at the federal hourly minimum wage rate. The contract must require 1-48 the property owner to perform the service not later than one year 1-49 after the delinquency date for the taxes against which the property 1-50 owner receives credit. 1-51 (e) Taxes for which the property owner is to receive credit 1-52 under the contract do not become delinquent on the delinquency date 1-53 otherwise provided by this chapter as long as the contract is in 1-54 effect and are considered paid when the service is performed. If 1-55 the property owner fails to perform the service, or if the taxing 1-56 unit determines that the service of the property owner is 1-57 unsatisfactory, the taxing unit shall terminate the contract and 1-58 notify the property owner of the termination. The unpaid taxes for 1-59 which the property owner was to receive credit under the contract 1-60 for service not yet performed become delinquent and incur penalty 1-61 and interest provided by Section 33.01 on the later of: 1-62 (1) the delinquency date otherwise provided by this 1-63 chapter for the unpaid taxes; or 1-64 (2) the first day of the next calendar month that 2-1 begins at least 21 days after the date the taxing unit delivers 2-2 notice to the property owner that the contract has been terminated. 2-3 (f) While performing service for a taxing unit, the property 2-4 owner: 2-5 (1) is not an employee of the taxing unit; and 2-6 (2) is not entitled to any benefit, including workers' 2-7 compensation coverage, that the taxing unit provides to an employee 2-8 of the taxing unit. 2-9 (g) Property owners performing services for a taxing unit 2-10 under this section may only supplement or complement the regular 2-11 personnel of the taxing unit. A taxing unit may not reduce the 2-12 number of persons the taxing unit employs or reduce the number of 2-13 hours to be worked by employees of the taxing unit because the 2-14 taxing unit permits property owners to perform services for the 2-15 taxing unit under this section. 2-16 (h) A person performing service for a taxing unit under this 2-17 section is not entitled to indemnification from the taxing unit for 2-18 injury or property damage the person sustains or liability the 2-19 person incurs in performing service under this section. The taxing 2-20 unit is not liable for any damages arising from an act or omission 2-21 of the person in performing service under this section. 2-22 SECTION 2. Chapter 31, Tax Code, is amended by adding 2-23 Sections 31.036 and 31.037 to read as follows: 2-24 Sec. 31.036. PERFORMANCE OF TEACHING SERVICES IN LIEU OF 2-25 PAYMENT OF SCHOOL TAXES ON HOMESTEAD. (a) The governing body of a 2-26 school district by resolution may permit qualified individuals to 2-27 perform teaching services for the school district at a junior high 2-28 school or high school of the district in lieu of paying taxes 2-29 imposed by the district on property owned and occupied by the 2-30 individual as a residence homestead. 2-31 (b) The governing body of the school district shall 2-32 determine: 2-33 (1) the number of qualified individuals who will be 2-34 permitted to perform teaching services for the district under this 2-35 section; 2-36 (2) the courses that a qualified individual may teach 2-37 for the district under this section; and 2-38 (3) the amount of the tax credit that a qualified 2-39 individual may earn. 2-40 (c) The governing body shall require that each qualified 2-41 individual permitted to perform teaching services for the district 2-42 under this section execute a contract with the district. The 2-43 contract must be executed before the delinquency date and must: 2-44 (1) specify: 2-45 (A) the course or courses that the qualified 2-46 individual will teach for the district; 2-47 (B) the high school or junior high school of the 2-48 district where the qualified individual will perform the teaching 2-49 services; 2-50 (C) the semester in which the qualified 2-51 individual will perform the teaching services; and 2-52 (D) the amount of the tax credit that the 2-53 qualified individual will receive on successful completion of the 2-54 individual's contractual obligations; and 2-55 (2) set out or describe the provisions of Subsections 2-56 (d)-(g). 2-57 (d) A qualified individual who teaches a course for an 2-58 entire school semester is entitled to a maximum credit of $500 2-59 against the taxes imposed, except that if the qualified individual 2-60 teaches a course for which a student receives a full year's credit 2-61 for one semester, the qualified individual is entitled to a maximum 2-62 credit of $1,000 for each such course taught for one semester by 2-63 the qualified individual. A qualified individual may not receive 2-64 credits for teaching more than two courses in any school year. 2-65 (e) The district shall terminate the contract if: 2-66 (1) the qualified individual fails to perform the 2-67 teaching services; or 2-68 (2) the district determines that the teaching services 2-69 of the qualified individual are unsatisfactory. 3-1 (f) If the contract is terminated under Subsection (e), on 3-2 the termination date the district may grant the individual a 3-3 portion of the tax credit based on the portion of the teaching 3-4 services performed. 3-5 (g) While performing teaching services for a school 3-6 district, the qualified individual: 3-7 (1) is not an employee of the district; and 3-8 (2) is not entitled to any benefit, including workers' 3-9 compensation coverage, that the district provides to an employee of 3-10 the district. 3-11 (h) An individual is qualified to perform teaching services 3-12 for a school district under this section only if the individual 3-13 holds a baccalaureate or more advanced degree in a field related to 3-14 each course to be taught and: 3-15 (1) is certified as a classroom teacher under 3-16 Subchapter B, Chapter 21, Education Code; or 3-17 (2) obtains a school district teaching permit under 3-18 Section 21.055, Education Code. 3-19 Sec. 31.037. PERFORMANCE OF TEACHING SERVICES BY EMPLOYEE IN 3-20 LIEU OF PAYMENT OF SCHOOL TAXES ON PROPERTY OF BUSINESS ENTITY. 3-21 (a) The governing body of a school district by resolution may 3-22 authorize a corporation or other business entity to permit a 3-23 qualified individual employed by the business entity to perform 3-24 teaching services in a high school or a junior high school for the 3-25 school district in lieu of paying taxes imposed by the district on 3-26 property owned by the business entity. 3-27 (b) The governing body of the school district shall 3-28 determine: 3-29 (1) the number of business entities that will be 3-30 eligible for a tax credit under this section; 3-31 (2) the courses that an employee of the business 3-32 entity may teach for the district under this section; and 3-33 (3) the amount of the tax credit that a business 3-34 entity may earn. 3-35 (c) The governing body shall require that each business 3-36 entity permitted to provide an employee to perform teaching 3-37 services for the district under this section execute a contract 3-38 with the district. The contract must be executed before the 3-39 delinquency date and must: 3-40 (1) specify: 3-41 (A) the course or courses that the employee will 3-42 teach for the district; 3-43 (B) the high school or junior high school of the 3-44 district where the employee will perform the teaching services; 3-45 (C) the semester in which the employee will 3-46 perform the teaching services; and 3-47 (D) the amount of the tax credit that the 3-48 business entity will receive on successful completion of the 3-49 contractual obligations of the business entity and its employee; 3-50 and 3-51 (2) set out or describe the provisions of Subsections 3-52 (d)-(h). 3-53 (d) For each course taught for the entire school semester by 3-54 an employee of the business entity for the school district, the 3-55 business entity is entitled to a maximum credit of $500 against the 3-56 taxes imposed, except that if the employee teaches a course for 3-57 which a student receives a full year's credit for one semester, the 3-58 business entity is entitled to a maximum credit of $1,000 for each 3-59 such course taught for one semester by the employee. 3-60 (e) The district shall terminate the contract if: 3-61 (1) the employee fails to perform the teaching 3-62 services; or 3-63 (2) the district determines that the teaching services 3-64 of the employee of the business entity are unsatisfactory. 3-65 (f) If the contract is terminated under Subsection (e), on 3-66 the termination date the district may grant the business entity a 3-67 portion of the tax credit based on the portion of the teaching 3-68 services performed. 3-69 (g) While performing teaching services for a school 4-1 district, the employee of the business entity: 4-2 (1) is not an employee of the district; and 4-3 (2) is not entitled to any benefit, including workers' 4-4 compensation coverage, that the district provides to an employee of 4-5 the district. 4-6 (h) An individual may not perform teaching services for 4-7 which a business entity receives a tax credit under this section if 4-8 the individual enters into a contract with the same school district 4-9 to provide teaching services for a tax credit for the same tax year 4-10 under Section 31.036. 4-11 (i) An individual is qualified to perform teaching services 4-12 for a school district under this section only if the individual 4-13 holds a baccalaureate or more advanced degree in a field related to 4-14 the course to be taught and: 4-15 (1) is certified as a classroom teacher under 4-16 Subchapter B, Chapter 21, Education Code; or 4-17 (2) obtains a school district teaching permit under 4-18 Section 21.055, Education Code. 4-19 SECTION 3. Section 42.302, Education Code, is amended by 4-20 adding Subsection (c) to read as follows: 4-21 (c) For purposes of this section, school district taxes for 4-22 which credit is granted under Section 31.035, 31.036, or 31.037, 4-23 Tax Code, are considered taxes collected by the school district as 4-24 if the taxes were paid when the credit for the taxes was granted. 4-25 SECTION 4. The importance of this legislation and the 4-26 crowded condition of the calendars in both houses create an 4-27 emergency and an imperative public necessity that the 4-28 constitutional rule requiring bills to be read on three several 4-29 days in each house be suspended, and this rule is hereby suspended, 4-30 and that this Act take effect and be in force from and after its 4-31 passage, and it is so enacted. 4-32 * * * * *