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.
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