SRC-MKV S.B. 460 77(R)   BILL ANALYSIS


Senate Research Center   S.B. 460
77R3647 JD-FBy: Duncan
Education
3/12/2001
As Filed


DIGEST AND PURPOSE 

The definition of debt used in the Tax Code for the purpose of effective
tax rate computation is clear for taxing entities such as cities and
counties but has proven less clear for school and college taxing entities.
School and college districts that have two separate sources of taxing
authority, one for maintenance and operations and one for interest and
sinking funds, are experiencing problems in applying the current definition
of debt.  As proposed, S.B. 460 conforms the treatment of school and
college district debt with that of other taxing entities by clarifying that
obligations greater than one year are defined as debt of the respective
taxing authority under the Tax Code's effective tax rate computation. 

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to a
state officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 26.012 (7), Tax Code, to redefine "debt."

SECTION 2.  Amends Chapter 26, Tax Code, by adding Section 26.03, as
follows: 

Sec. 26.03.  NOTICE OF INTENTION TO INCLUDE CONTRACTUAL OBLIGATION IN DEBT
OF SCHOOL DISTRICT.  (a) Authorizes the board of trustees of a school
district to include a contractual obligation budgeted for payment from
maintenance and operations fund as described by Section 26.012 (7) in the
debt of the district only in compliance with this section. 

(b) Authorizes the board of trustees to include a contractual obligation
described by Subsection (a) in the district's debt only to the extent that
the district's debt rate imposed for payment of all such contractual
obligations does not exceed $0.05 per $100 of valuation. 

(c) Requires the board of trustees to provide public notice of the board's
intention before the board may act to include the contractual obligation in
the debt of the district. 

(d) Requires the notice in Subsection (c) to be published in a newspaper of
general circulation in the district not later than the 15th day before the
date set for the board meeting at which a tax rate is to be adopted for the
district and requires the statement to be in a specified form. 

(e) Requires the board of trustees, at the meeting,  to specify whether all
of part of the contractual obligation will be included in the debt of the
district. 

SECTION 3.  Effective date: upon passage or September 1, 2001.