1-1     By:  Hochberg (Senate Sponsor - Cain)                 H.B. No. 2075
 1-2           (In the Senate - Received from the House May 11, 1999;
 1-3     May 12, 1999, read first time and referred to Committee on
 1-4     Education; May 14, 1999, reported favorably by the following vote:
 1-5     Yeas 6, Nays 0; May 14, 1999, sent to printer.)
 1-6                            A BILL TO BE ENTITLED
 1-7                                   AN ACT
 1-8     relating to the public notice required to be provided by a school
 1-9     district before adopting a proposed budget and tax rate.
1-10           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-11           SECTION 1.  Section 44.004, Education Code, is amended to
1-12     read as follows:
1-13           Sec. 44.004.  NOTICE OF BUDGET AND TAX RATE MEETING; BUDGET
1-14     ADOPTION.  (a)  When the budget has been prepared under Section
1-15     44.002, the president shall call a meeting of the board of trustees
1-16     for[, stating that] the purpose of adopting [the meeting is the
1-17     adoption of] a budget for the succeeding fiscal year.
1-18           (b)  The president shall provide for the publication of
1-19     notice of the budget and proposed tax rate meeting in a daily,
1-20     weekly, or biweekly newspaper published in the district.  If no
1-21     daily, weekly, or biweekly newspaper is published in the district,
1-22     the president shall provide for the publication of notice in at
1-23     least one newspaper of general circulation in the county in which
1-24     the district's central administrative office is located.  [Notice
1-25     published under this subsection is in addition to notice required
1-26     by other law.]  Notice under this subsection shall be published not
1-27     earlier than the 30th day or later than the 10th day before the
1-28     date of the hearing.  [A district may include the notice required
1-29     under this subsection in a notice required under Section 26.06, Tax
1-30     Code.]
1-31           (c)  The notice of public meeting to discuss and adopt the
1-32     budget and the proposed tax rate may not be smaller than
1-33     one-quarter page of a standard-size or a tabloid-size newspaper,
1-34     and the headline on the notice must be in 18-point or larger type.
1-35     Subject to Subsection (d), the notice must:
1-36                 (1)  contain a statement in the following form:
1-37                 "NOTICE OF PUBLIC MEETING TO DISCUSS BUDGET
1-38                            AND PROPOSED TAX RATE
1-39           "The (name of school district) will hold a public meeting at
1-40     (time, date, year) in (name of room, building, physical location,
1-41     city, state). The purpose of this meeting is to discuss the school
1-42     district's budget that will determine the tax rate that will be
1-43     adopted.  Public  participation in the discussion is invited."  The
1-44     statement of the purpose of the meeting must be in bold type.  In
1-45     reduced type, the notice must state:  "The tax rate that is
1-46     ultimately adopted at this meeting or at a separate meeting at a
1-47     later date may not exceed the proposed rate shown below without
1-48     publication of a revised notice containing the same information and
1-49     comparisons set out below.";
1-50                 (2)  contain a section entitled "Comparison of Proposed
1-51     Rates with Preceding Year's Adopted Rates," which must:
1-52                       (A)  show in rows the tax rates described by
1-53     Subparagraphs (i)-(iii), expressed as amounts per $100 valuation of
1-54     property, for columns entitled "Maintenance & Operations Tax Rate,"
1-55     "Interest & Sinking Fund Tax Rate," and "Total Tax Rate," which is
1-56     the sum of the "Maintenance & Operations Tax Rate" and the
1-57     "Interest & Sinking Fund Tax Rate":
1-58                             (i)  the school district's "Adopted Tax
1-59     Rate for the Preceding Year";
1-60                             (ii)  the "Tax Rate Required to Maintain
1-61     the Same Level of Maintenance & Operations Revenue and Pay Debt
1-62     Service," which:
1-63                                            (a)  in the case of the
1-64     "Maintenance & Operations Tax Rate," is the tax rate that, when
 2-1     applied to the current taxable value for the district as certified
 2-2     by the chief appraiser under Section 26.01, Tax Code, would impose
 2-3     taxes in an amount that, when added to state funds to be
 2-4     distributed to the district under Chapter 42, would provide the
 2-5     same amount of maintenance and operations taxes and state funds
 2-6     distributed under Chapter 42 per student in average daily
 2-7     attendance for the applicable school year that was available to the
 2-8     district in the preceding school year; and
 2-9                                            (b)  in the case of the
2-10     "Interest & Sinking Fund Tax Rate," is the tax rate that, when
2-11     applied to the current taxable value for the district as certified
2-12     by the chief appraiser under Section 26.01, Tax Code, and when
2-13     multiplied by the district's anticipated collection rate, would
2-14     impose taxes in an amount that, when added to state funds to be
2-15     distributed to the district under Chapter 46 and any excess taxes
2-16     collected to service the district's debt during the preceding year
2-17     but not used for that purpose during that year, would provide the
2-18     amount required to service the district's debt; and
2-19                             (iii)  the "Proposed Tax Rate";
2-20                       (B)  contain fourth and fifth columns aligned
2-21     with the columns required by Paragraph (A) that show, for each row
2-22     required by Paragraph (A):
2-23                             (i)  the "Local Revenue per Student," which
2-24     is computed by multiplying the district's total taxable value of
2-25     property, as certified by the chief appraiser for the applicable
2-26     school year under Section 26.01, Tax Code, by the "Total Tax Rate,"
2-27     and dividing the product by the number of students in average daily
2-28     attendance in the district for the applicable school year; and
2-29                             (ii)  the "State Revenue per Student,"
2-30     which is computed by determining the amount of state aid received
2-31     or to be received by the district under Chapters 42, 43, and 46 and
2-32     dividing that amount by the number of students in average daily
2-33     attendance in the district for the applicable school year; and
2-34                       (C)  contain an asterisk after each calculation
2-35     for an "Interest & Sinking Fund Tax Rate" and a footnote to the
2-36     section that says "The Interest & Sinking Fund Tax Revenue is used
2-37     to pay for bonded indebtedness on construction, equipment, or both.
2-38     The bonds, and the tax rate necessary to pay those bonds, were
2-39     approved by the voters of this district in (an election or
2-40     elections) held (dates of election or elections).";
2-41                 (3)  contain a section entitled  "Comparison of
2-42     Proposed Levy with Last Year's Levy on Average Residence
2-43     Homestead," which must:
2-44                       (A)  show in rows the information described by
2-45     Subparagraphs (i)-(iv), rounded to the nearest dollar, for columns
2-46     entitled "Preceding Tax Year" and "Current Tax Year":
2-47                             (i)  "Average Appraised Value of Residence
2-48     Homesteads," determined using the same group of residences for each
2-49     year;
2-50                             (ii)  "Average Taxable Value of Residence
2-51     Homesteads, after Homestead Exemptions," determined using the same
2-52     group of residences for each year;
2-53                             (iii)  "Last Year's Rate Versus Proposed
2-54     Rate per $100 of Property Value"; and
2-55                             (iv)  "Taxes Imposed on Average Residence
2-56     Homestead," determined using the same group of residences for each
2-57     year; and
2-58                       (B)  contain the following information:
2-59     "Increase (Decrease) in Taxes" expressed in dollars and cents,
2-60     which is computed by subtracting the "Taxes Imposed on Average
2-61     Residence Homestead" for the preceding tax year from the "Taxes
2-62     Imposed on Average Residence Homestead" for the current tax year;
2-63                 (4)  contain the following statement in bold print:
2-64     "Under state law, the dollar amount of school taxes imposed on the
2-65     residence homestead of a person 65 years of age or older or of the
2-66     surviving spouse of such a person, if the surviving spouse was 55
2-67     years of age or older when the person died, may not be increased
2-68     above the amount paid in the first year after the person turned 65,
2-69     regardless of changes in tax rate.";
 3-1                 (5)  contain the following statement in bold print:
 3-2     "Notice of Rollback Rate: The highest tax rate the district can
 3-3     adopt before requiring voter approval at an election is (the school
 3-4     district rollback rate determined under Section 26.08, Tax Code).
 3-5     This election will be automatically held if the district adopts a
 3-6     rate in excess of the rollback rate of (the school district
 3-7     rollback rate)."; and
 3-8                 (6)  contain a section entitled "Fund Balances," which
 3-9     must include:
3-10                       (A)  the estimated total fund balances that are
3-11     not encumbered by a corresponding debt obligation and that will be
3-12     left in the district's property tax accounts at the end of the
3-13     fiscal year; or
3-14                       (B)  the estimated fund balances in the following
3-15     categories that cumulatively equal the amount described by
3-16     Paragraph (A):
3-17                             (i)  fund balances to be spent in the
3-18     budget for the next fiscal year;
3-19                             (ii)  fund balances designated by the board
3-20     of trustees at a public meeting to be set aside for construction,
3-21     cash flow, or other specified purposes; and
3-22                             (iii)  other nondesignated fund balances.
3-23           (d)  The comptroller by rule shall prescribe the language and
3-24     format to be used in the part of the notice required by Subsection
3-25     (c).  A notice under Subsection (c) is not valid if it does not
3-26     substantially conform to the language and format prescribed by the
3-27     comptroller under this subsection.
3-28           (e)  The board of trustees, at the meeting called for that
3-29     purpose, shall adopt a budget to cover all expenditures for the
3-30     school district for the next succeeding fiscal year.  Any taxpayer
3-31     of the district may be present and participate in the meeting
3-32     [hearing].
3-33           (f) [(d)]  The budget must be adopted before the adoption of
3-34     the tax rate for the tax year in which the fiscal year covered by
3-35     the budget begins.
3-36           SECTION 2.  Section 26.05(d), Tax Code, is amended to read as
3-37     follows:
3-38           (d)  The governing body may not adopt a tax rate that if
3-39     applied to the total taxable value would impose an amount of taxes
3-40     that exceeds last year's levy until it has held a public hearing on
3-41     the proposed tax rate and:
3-42                 (1)  if the taxing unit is not a school district, has
3-43     otherwise complied with Section 26.06; or
3-44                 (2)  if the taxing unit is a school district, has
3-45     complied with Section 44.004, Education Code.
3-46           SECTION 3.  Section 26.06, Tax Code, is amended by adding
3-47     Subsection (g) to read as follows:
3-48           (g)  This section does not apply to a school district.  A
3-49     school district shall provide notice of a public meeting on a tax
3-50     increase as required by Section 44.004, Education Code.
3-51           SECTION 4.  This Act takes effect September 1, 1999.
3-52           SECTION 5.  The importance of this legislation and the
3-53     crowded condition of the calendars in both houses create an
3-54     emergency and an imperative public necessity that the
3-55     constitutional rule requiring bills to be read on three several
3-56     days in each house be suspended, and this rule is hereby suspended.
3-57                                  * * * * *