By Green H.B. No. 3259
77R1470 DAK-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the abolition of school district property taxes, an
1-3 increase in the rate of the state sales and use tax and the
1-4 application of the state sales and use tax to any transaction in
1-5 this state, including a sale for resale, involving real property,
1-6 and the distribution of the proceeds from the sales and use tax to
1-7 replace school district property tax revenue.
1-8 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-9 ARTICLE 1. SCHOOL DISTRICT PROPERTY TAXES
1-10 SECTION 1.01. Section 1.04(12), Tax Code, is amended to read
1-11 as follows:
1-12 (12) "Taxing unit" means a county, an incorporated
1-13 city or town (including a home-rule city), [a school district,] a
1-14 special district or authority (including a junior college district,
1-15 a hospital district, a district created by or pursuant to the Water
1-16 Code, a mosquito control district, a fire prevention district, or a
1-17 noxious weed control district), or any other political unit of this
1-18 state, whether created by or pursuant to the constitution or a
1-19 local, special, or general law, that is authorized to impose and is
1-20 imposing ad valorem taxes on property even if the governing body of
1-21 another political unit determines the tax rate for the unit or
1-22 otherwise governs its affairs.
1-23 SECTION 1.02. Section 5.09(a), Tax Code, is amended to read
1-24 as follows:
2-1 (a) The comptroller shall publish an annual report of the
2-2 operations of the appraisal districts. The report shall include
2-3 for each appraisal district and [,] each county[, and each school
2-4 district] and may include for other taxing units the total
2-5 appraised values, assessed values, and taxable values of taxable
2-6 property by class of property, the assessment ratio, and the tax
2-7 rate.
2-8 SECTION 1.03. Section 5.10(a), Tax Code, is amended to read
2-9 as follows:
2-10 (a) The comptroller shall conduct an annual study in each
2-11 appraisal district to determine the degree of uniformity of and the
2-12 median level of appraisals by the appraisal district within each
2-13 major category of property. The comptroller shall publish a report
2-14 of the findings of the study, including in the report the median
2-15 levels of appraisal for each major category of property, the
2-16 coefficient of dispersion around the median level of appraisal for
2-17 each major category of property, and any other standard statistical
2-18 measures that the comptroller considers appropriate. [In
2-19 conducting the study, the comptroller shall apply appropriate
2-20 standard statistical analysis techniques to data collected as part
2-21 of the annual study of school district taxable values required by
2-22 Section 403.302, Government Code.]
2-23 SECTION 1.04. Sections 5.101(a)-(d), Tax Code, are amended
2-24 to read as follows:
2-25 (a) The comptroller shall appoint a technical advisory
2-26 committee for the purpose of providing professional and practical
2-27 expertise to the comptroller and to review and comment on the
3-1 methodology used by the comptroller to conduct the annual study
3-2 [studies] required by Section 5.10 [of this code and by Section
3-3 403.302, Government Code]. A member of the committee serves at the
3-4 will of the comptroller.
3-5 (b) The committee shall:
3-6 (1) review the methodology used by the comptroller to
3-7 conduct the study [studies] described in Subsection (a) [of this
3-8 section];
3-9 (2) make an annual report to the comptroller that
3-10 includes the committee's findings and recommendations relating to
3-11 the methodology used to conduct the study [studies]; and
3-12 (3) meet as often as necessary to perform its duties,
3-13 but not less often than semi-annually.
3-14 (c) The comptroller shall appoint the committee to provide
3-15 for a balanced representation of the general public and of
3-16 professionals affiliated with the entities affected by the study
3-17 [studies].
3-18 (d) Each member of the committee must have expertise
3-19 sufficient to determine the accuracy of the annual study [studies]
3-20 and the appropriateness of the methods used to develop the findings
3-21 of the study [studies].
3-22 SECTION 1.05. Section 5.16(a), Tax Code, is amended to read
3-23 as follows:
3-24 (a) The comptroller may inspect the records or other
3-25 materials of an appraisal office or taxing unit, including the
3-26 relevant records and materials in the possession or control of a
3-27 consultant, advisor, or expert hired by the appraisal office or
4-1 taxing unit, for the purpose of:
4-2 (1) establishing, reviewing, or evaluating the value
4-3 of or an appraisal of any property; or
4-4 (2) conducting a study, review, or audit required by
4-5 Section 5.10 or 5.102 [or by Section 403.302, Government Code].
4-6 SECTION 1.06. Section 6.02(b), Tax Code, is amended to read
4-7 as follows:
4-8 (b) A taxing unit that has boundaries extending into two or
4-9 more counties may choose to participate in only one of the
4-10 appraisal districts. In that event, the boundaries of the district
4-11 chosen extend outside the county to the extent of the unit's
4-12 boundaries. To be effective, the choice must be approved by
4-13 resolution of the board of directors of the district chosen. [The
4-14 choice of a school district to participate in a single appraisal
4-15 district does not apply to property annexed to the school district
4-16 under Subchapter C or G, Chapter 41, Education Code, unless:]
4-17 [(1) the school district taxes property other than
4-18 property annexed to the district under Subchapter C or G, Chapter
4-19 41, Education Code, in the same county as the annexed property; or]
4-20 [(2) the annexed property is contiguous to property in
4-21 the school district other than property annexed to the district
4-22 under Subchapter C or G, Chapter 41, Education Code.]
4-23 SECTION 1.07. Sections 6.03(c) and (e), Tax Code, are
4-24 amended to read as follows:
4-25 (c) Members of the board of directors other than a county
4-26 assessor-collector serving as a nonvoting director are appointed by
4-27 vote of the governing bodies of the county, the incorporated cities
5-1 and towns, [the school districts,] and, if entitled to vote, the
5-2 conservation and reclamation districts that participate in the
5-3 district [and of the county]. A governing body may cast all its
5-4 votes for one candidate or distribute them among candidates for any
5-5 number of directorships. Conservation and reclamation districts
5-6 are not entitled to vote unless at least one conservation and
5-7 reclamation district in the district delivers to the chief
5-8 appraiser a written request to nominate and vote on the board of
5-9 directors by June 1 of each odd-numbered year. On receipt of a
5-10 request, the chief appraiser shall certify a list by June 15 of all
5-11 eligible conservation and reclamation districts that are imposing
5-12 taxes and that participate in the district.
5-13 (e) The chief appraiser shall calculate the number of votes
5-14 to which each taxing unit other than a conservation and reclamation
5-15 district is entitled and shall deliver written notice to each of
5-16 those units of its voting entitlement before October 1 of each
5-17 odd-numbered year. The chief appraiser shall deliver the notice:
5-18 (1) to the county judge and each commissioner of the
5-19 county served by the appraisal district; and
5-20 (2) to the presiding officer of the governing body of
5-21 each city or town participating in the appraisal district, to the
5-22 city manager of each city or town having a city manager, and to the
5-23 city secretary or clerk, if there is one, of each city or town that
5-24 does not have a city manager[; and]
5-25 [(3) to the presiding officer of the governing body of
5-26 each school district participating in the district and to the
5-27 superintendent of those school districts].
6-1 SECTION 1.08. Section 6.062(c), Tax Code, is amended to read
6-2 as follows:
6-3 (c) The notice must state that the appraisal district is
6-4 supported solely by payments from the local taxing units served by
6-5 the appraisal district. The notice must also contain the following
6-6 statement: "If approved by the appraisal district board of
6-7 directors at the public hearing, this proposed budget will take
6-8 effect automatically unless disapproved by the governing bodies of
6-9 the county, [school districts,] cities, and towns served by the
6-10 appraisal district. A copy of the proposed budget is available for
6-11 public inspection in the office of each of those governing bodies."
6-12 SECTION 1.09. Sections 11.13(d), (i), and (m), Tax Code, are
6-13 amended to read as follows:
6-14 (d) An [In addition to the exemptions provided by
6-15 Subsections (b) and (c) of this section, an] individual who is
6-16 disabled or is 65 or older is entitled to an exemption from
6-17 taxation by a taxing unit of a portion (the amount of which is
6-18 fixed as provided by Subsection (e) [of this section]) of the
6-19 appraised value of the individual's [his] residence homestead if
6-20 the exemption is adopted either:
6-21 (1) by the governing body of the taxing unit; or
6-22 (2) by a favorable vote of a majority of the qualified
6-23 voters of the taxing unit at an election called by the governing
6-24 body of a taxing unit, and the governing body shall call the
6-25 election on the petition of at least 20 percent of the number of
6-26 qualified voters who voted in the preceding election of the taxing
6-27 unit.
7-1 (i) The assessor and collector for a taxing unit may
7-2 disregard the exemptions authorized by Subsection [(b), (c),]
7-3 (d)[,] or (n) [of this section] and assess and collect a tax
7-4 pledged for payment of debt without deducting the amount of the
7-5 exemption if:
7-6 (1) prior to adoption of the exemption, the unit
7-7 pledged the taxes for the payment of a debt; and
7-8 (2) granting the exemption would impair the obligation
7-9 of the contract creating the debt.
7-10 (m) In this section, "disabled" [:]
7-11 [(1) "Disabled"] means under a disability for purposes
7-12 of payment of disability insurance benefits under Federal Old-Age,
7-13 Survivors, and Disability Insurance.
7-14 [(2) "School district" means a political subdivision
7-15 organized to provide general elementary and secondary public
7-16 education. "School district" does not include a junior college
7-17 district or a political subdivision organized to provide special
7-18 education services.]
7-19 SECTION 1.10. Section 11.42(c), Tax Code, is amended to read
7-20 as follows:
7-21 (c) An exemption authorized by Section 11.13(d) [11.13(c) or
7-22 (d)] for an individual 65 years of age or older is effective as of
7-23 January 1 of the tax year in which the person qualifies for the
7-24 exemption and applies to the entire tax year.
7-25 SECTION 1.11. Section 11.43(k), Tax Code, is amended to read
7-26 as follows:
7-27 (k) A person who qualifies for the exemption authorized by
8-1 Section 11.13(d) [11.13(c) or (d)] for an individual 65 years of
8-2 age or older must apply for the exemption no later than the first
8-3 anniversary of the date the person qualified for the exemption.
8-4 SECTION 1.12. Sections 21.01 and 21.02, Tax Code, are amended
8-5 to read as follows:
8-6 Sec. 21.01. REAL PROPERTY. Real property is taxable by a
8-7 taxing unit if located in the unit on January 1[, except as
8-8 provided by Chapter 41, Education Code].
8-9 Sec. 21.02. TANGIBLE PERSONAL PROPERTY GENERALLY. [(a)]
8-10 Except as provided by [Subsection (b) and] Sections 21.021, 21.04,
8-11 and 21.05, tangible personal property is taxable by a taxing unit
8-12 if:
8-13 (1) it is located in the unit on January 1 for more
8-14 than a temporary period;
8-15 (2) it normally is located in the unit, even though it
8-16 is outside the unit on January 1, if it is outside the unit only
8-17 temporarily;
8-18 (3) it normally is returned to the unit between uses
8-19 elsewhere and is not located in any one place for more than a
8-20 temporary period; or
8-21 (4) the owner resides (for property not used for
8-22 business purposes) or maintains the owner's [his] principal place
8-23 of business in this state (for property used for business purposes)
8-24 in the unit and the property is taxable in this state but does not
8-25 have a taxable situs pursuant to Subdivisions (1) through (3) [of
8-26 this section].
8-27 [(b) Tangible personal property having taxable situs at the
9-1 same location as real property detached from a school district and
9-2 annexed by another school district under Chapter 41, Education
9-3 Code, is taxable in the tax year in which the detachment and
9-4 annexation occurs by the same school district by which the real
9-5 property is taxable in that tax year under Chapter 41, Education
9-6 Code. For purposes of this subsection and Chapter 41, Education
9-7 Code, tangible personal property has taxable situs at the same
9-8 location as real property detached and annexed under Chapter 41,
9-9 Education Code, if the detachment and annexation of the real
9-10 property, had it occurred before January 1 of the tax year, would
9-11 have changed the taxable situs of the tangible personal property
9-12 determined as provided by Subsection (a) from the school district
9-13 from which the real property was detached to the school district to
9-14 which the real property was annexed.]
9-15 [(c) Tangible personal property has taxable situs in a
9-16 school district that is the result of a consolidation under Chapter
9-17 41, Education Code, in the year in which the consolidation occurs
9-18 if the property would have had taxable situs in the consolidated
9-19 district in that year had the consolidation occurred before January
9-20 1 of that year.]
9-21 SECTION 1.13. Sections 23.19(b) and (g), Tax Code, are
9-22 amended to read as follows:
9-23 (b) If an appraisal district receives a written request for
9-24 the appraisal of real property and improvements of a cooperative
9-25 housing corporation according to the separate interests of the
9-26 corporation's stockholders, the chief appraiser shall separately
9-27 appraise the interests described by Subsection (d) [of this
10-1 section] if the conditions required by Subsections (e) and (f) [of
10-2 this section] have been met. Separate appraisal under this section
10-3 is for the purposes of administration of tax exemptions[,
10-4 determination of applicable limitations of taxes under Section
10-5 11.26 of this code,] and apportionment by a cooperative housing
10-6 corporation of property taxes among its stockholders but is not the
10-7 basis for determining value on which a tax is imposed under this
10-8 title. A stockholder whose interest is separately appraised under
10-9 this section may protest and appeal the appraised value in the
10-10 manner provided by this title for protest and appeal of the
10-11 appraised value of other property.
10-12 (g) A tax bill or a separate statement accompanying the tax
10-13 bill to a cooperative housing corporation for which interests of
10-14 stockholders are separately appraised under this section must
10-15 state, in addition to the information required by Section 31.01 [of
10-16 this code], the appraised value and taxable value of each interest
10-17 separately appraised. Each exemption claimed as provided by this
10-18 title by a person entitled to the exemption shall also be deducted
10-19 from the total appraised value of the property of the corporation.
10-20 [The total tax imposed by a school district shall be reduced by any
10-21 amount that represents an increase in taxes attributable to
10-22 separately appraised interests of the real property and
10-23 improvements that are subject to the limitation of taxes prescribed
10-24 by Section 11.26 of this code.] The corporation shall apportion
10-25 among its stockholders liability for reimbursing the corporation
10-26 for property taxes according to the relative taxable values of
10-27 their interests.
11-1 SECTION 1.14. Sections 26.012(4), (6), (9), (13), and (14),
11-2 Tax Code, are amended to read as follows:
11-3 (4) "Current debt rate" means a rate expressed in
11-4 dollars per $100 of taxable value and calculated according to the
11-5 following formula:
11-6 CURRENT DEBT RATE = ((CURRENT DEBT SERVICE - EXCESS COLLECTIONS) /
11-7 (CURRENT TOTAL VALUE x COLLECTION RATE)) [+ (CURRENT JUNIOR COLLEGE
11-8 LEVY / CURRENT TOTAL VALUE)]
11-9 (6) "Current total value" means the total taxable
11-10 value of property listed on the appraisal roll for the current
11-11 year, including all appraisal roll supplements and corrections as
11-12 of the date of the calculation, less the taxable value of property
11-13 exempted for the current tax year for the first time under Section
11-14 11.31[, except that the current total value for a school district
11-15 excludes the total value of homesteads that qualify for a tax
11-16 limitation as provided by Section 11.26].
11-17 (9) "Effective maintenance and operations rate" means
11-18 a rate expressed in dollars per $100 of taxable value and
11-19 calculated according to the following formula:
11-20 EFFECTIVE MAINTENANCE AND OPERATIONS RATE =
11-21 (LAST YEAR'S LEVY) - (LAST YEAR'S DEBT LEVY) [- (LAST YEAR'S JUNIOR
11-22 COLLEGE LEVY)] / (CURRENT TOTAL VALUE - NEW PROPERTY VALUE)
11-23 (13) "Last year's levy" means the total of:
11-24 (A) the amount of taxes that would be generated
11-25 by multiplying the total tax rate adopted by the governing body in
11-26 the preceding year by the total taxable value of property on the
11-27 appraisal roll for the preceding year, including:
12-1 (i) taxable value that was reduced in an
12-2 appeal under Chapter 42; and
12-3 (ii) all appraisal roll supplements and
12-4 corrections other than corrections made pursuant to Section
12-5 25.25(d), as of the date of the calculation[, except that last
12-6 year's taxable value for a school district excludes the total value
12-7 of homesteads that qualified for a tax limitation as provided by
12-8 Section 11.26]; and
12-9 (B) the amount of taxes refunded by the taxing
12-10 unit in the preceding year for tax years before that year.
12-11 (14) "Last year's total value" means the total taxable
12-12 value of property listed on the appraisal roll for the preceding
12-13 year, including all appraisal roll supplements and corrections,
12-14 other than corrections made pursuant to Section 25.25(d) [of this
12-15 code], as of the date of the calculation[, except that last year's
12-16 taxable value for a school district excludes the total value of
12-17 homesteads that qualified for a tax limitation as provided by
12-18 Section 11.26 of this code].
12-19 SECTION 1.15. Section 26.05(d), Tax Code, is amended to read
12-20 as follows:
12-21 (d) The governing body of a taxing district [other than a
12-22 school district] may not adopt a tax rate that exceeds the lower of
12-23 the rollback tax rate or 103 percent of the effective tax rate
12-24 calculated as provided by this chapter until the governing body has
12-25 held a public hearing on the proposed tax rate and has otherwise
12-26 complied with Section 26.06 and Section 26.065. The governing body
12-27 of a taxing unit shall reduce a tax rate set by law or by vote of
13-1 the electorate to the lower of the rollback tax rate or 103 percent
13-2 of the effective tax rate and may not adopt a higher rate unless it
13-3 first complies with Section 26.06.
13-4 SECTION 1.16. Section 26.07(a), Tax Code, is amended to read
13-5 as follows:
13-6 (a) If the governing body of a taxing unit [other than a
13-7 school district] adopts a tax rate that exceeds the rollback tax
13-8 rate calculated as provided by this chapter, the qualified voters
13-9 of the taxing unit by petition may require that an election be held
13-10 to determine whether or not to reduce the tax rate adopted for the
13-11 current year to the rollback tax rate calculated as provided by
13-12 this chapter.
13-13 SECTION 1.17. Section 26.112, Tax Code, is amended to read as
13-14 follows:
13-15 Sec. 26.112. CALCULATION OF TAXES ON RESIDENCE HOMESTEAD OF
13-16 ELDERLY PERSON. (a) If at any time during a tax year property is
13-17 owned by an individual who qualifies for an exemption under Section
13-18 11.13(d) [11.13(c) or (d)] for an individual 65 years of age or
13-19 older, the amount of the tax due on the property for the tax year
13-20 is calculated as if the person qualified for the exemption on
13-21 January 1 and continued to qualify for the exemption for the
13-22 remainder of the tax year.
13-23 (b) If property is the residence homestead of more than one
13-24 individual during a tax year and any of those individuals qualifies
13-25 [qualify] for an exemption under Section 11.13(d) [11.13(c) or (d)]
13-26 for an individual 65 years of age or older with respect to the
13-27 property, the amount of the tax due on the property for the tax
14-1 year is calculated as if that individual owned the property for the
14-2 entire tax year.
14-3 (c) If a person qualifies for an exemption under Section
14-4 11.13(d) [11.13(c) or (d)] for an individual 65 years of age or
14-5 older with respect to the property after the amount of the tax due
14-6 on the property is calculated and the effect of the qualification
14-7 is to reduce the amount of the tax due on the property, the
14-8 assessor for each taxing unit shall recalculate the amount of the
14-9 tax due on the property and correct the tax roll. If the tax bill
14-10 has been mailed and the tax on the property has not been paid, the
14-11 assessor shall mail a corrected tax bill to the person in whose
14-12 name the property is listed on the tax roll or to the person's
14-13 authorized agent. If the tax on the property has been paid, the
14-14 tax collector for the taxing unit shall refund to the person who
14-15 paid the tax the amount by which the payment exceeded the tax due.
14-16 SECTION 1.18. Section 31.031(a), Tax Code, is amended to read
14-17 as follows:
14-18 (a) If before the delinquency date an individual who is
14-19 disabled or at least 65 years of age [and is qualified for an
14-20 exemption under Section 11.13(c)] pays at least one-fourth of a
14-21 taxing unit's taxes imposed on property that the person owns and
14-22 occupies as a residence homestead, accompanied by notice to the
14-23 taxing unit that the person will pay the remaining taxes in
14-24 installments, the person may pay the remaining taxes without
14-25 penalty or interest in three equal installments. The first
14-26 installment must be paid before April 1, the second installment
14-27 before June 1, and the third installment before August 1.
15-1 SECTION 1.19. Section 33.01(d), Tax Code, is amended to read
15-2 as follows:
15-3 (d) In lieu of the penalty imposed under Subsection (a), a
15-4 delinquent tax incurs a penalty of 50 percent of the amount of the
15-5 tax without regard to the number of months the tax has been
15-6 delinquent if the tax is delinquent because the property owner
15-7 received an exemption under:
15-8 (1) Section 11.13 and the chief appraiser subsequently
15-9 cancels the exemption because the residence was not the principal
15-10 residence of the property owner and the property owner received an
15-11 exemption for two or more additional residence homesteads for the
15-12 tax year in which the tax was imposed;
15-13 (2) Section 11.13(d) [11.13(c) or (d)] for a person
15-14 who is 65 years of age or older and the chief appraiser
15-15 subsequently cancels the exemption because the property owner was
15-16 younger than 65 years of age; or
15-17 (3) Section 11.13(q) and the chief appraiser
15-18 subsequently cancels the exemption because the property owner was
15-19 younger than 55 years of age when the property owner's spouse died.
15-20 SECTION 1.20. Section 311.003(f), Tax Code, is amended to
15-21 read as follows:
15-22 (f) A taxing unit may request additional information from
15-23 the governing body of the municipality. The governing body of the
15-24 municipality shall provide the information requested to the extent
15-25 practicable. In addition to the notice required by Subsection (e),
15-26 the governing body of the municipality shall make a formal
15-27 presentation to the governing body of each county [or school
16-1 district] that levies real property taxes in the proposed
16-2 reinvestment zone. The presentation must include a description of
16-3 the proposed boundaries of the zone, the tentative plans for the
16-4 development or redevelopment of the zone, and an estimate of the
16-5 general impact of the proposed zone on property values and tax
16-6 revenues. The governing body of the municipality shall notify each
16-7 taxing unit that levies real property taxes in the proposed zone of
16-8 each presentation to be made to a county [or school district] under
16-9 this subsection. Members of the governing body of each taxing unit
16-10 that levies real property taxes in the proposed zone may attend a
16-11 presentation under this subsection. If agreed to by the county [or
16-12 school districts] involved, the governing body of the municipality
16-13 may make a single presentation to more than one county [or school
16-14 district] governing body.
16-15 SECTION 1.21. Section 311.006(c), Tax Code, is amended to
16-16 read as follows:
16-17 (c) A municipality may not create a reinvestment zone or
16-18 change the boundaries of an existing reinvestment zone if the
16-19 proposed zone or proposed boundaries of the zone contain more than
16-20 15 percent of the total appraised value of real property taxable by
16-21 a county [or school district].
16-22 SECTION 1.22. Section 311.009(b), Tax Code, is amended to
16-23 read as follows:
16-24 (b) If the zone was designated under Section 311.005(a)(5),
16-25 the board of directors of the zone consists of nine members. Each
16-26 [school district or] county that levies taxes on real property in
16-27 the zone may appoint one member of the board if the [school
17-1 district or] county has approved the payment of all or part of the
17-2 tax increment produced by the unit. The member of the state senate
17-3 in whose district the zone is located is a member of the board, and
17-4 the member of the state house of representatives in whose district
17-5 the zone is located is a member of the board, except that either
17-6 may designate another individual to serve in the member's place at
17-7 the pleasure of the member. If the zone is located in more than
17-8 one senate or house district, this subsection applies only to the
17-9 senator or representative in whose district a larger portion of the
17-10 zone is located than any other senate or house district, as
17-11 applicable. The remaining members of the board are appointed by
17-12 the governing body of the municipality that created the zone.
17-13 SECTION 1.23. Section 311.0125(a), Tax Code, is amended to
17-14 read as follows:
17-15 (a) Notwithstanding any provision in this chapter to the
17-16 contrary, a taxing unit [other than a school district] may enter
17-17 into a tax abatement agreement with an owner of real or personal
17-18 property in a reinvestment zone, regardless of whether the taxing
17-19 unit deposits or agrees to deposit any portion of its tax increment
17-20 into the tax increment fund.
17-21 SECTION 1.24. Sections 312.206(b) and (d), Tax Code, are
17-22 amended to read as follows:
17-23 (b) If property taxes on property located in the taxing
17-24 jurisdiction of a municipality are abated under an agreement made
17-25 by the municipality before September 1, 1989, the terms of the
17-26 agreement with the municipality regarding the share of the property
17-27 that is to be exempt in each year of the agreement apply to the
18-1 taxation of the property by every other taxing unit, other than a
18-2 county [or school district], in which the property is located. If
18-3 the agreement was made before September 1, 1987, the terms
18-4 regarding the share of the property to be exempt in each year of
18-5 the agreement also apply to the taxation of the property by a
18-6 county [or school district].
18-7 (d) If property taxes are abated on property in the
18-8 extraterritorial jurisdiction of a municipality due to an agreement
18-9 with a county or school district made before September 1, 1989, the
18-10 terms of the agreement with the county or school district relating
18-11 to the share of the property that is to be exempt in each year of
18-12 the agreement apply to the taxation of the property by every other
18-13 taxing unit, other than a municipality[, school district,] or
18-14 county, in which the property is located.
18-15 SECTION 1.25. Sections 312.210(b) and (c), Tax Code, are
18-16 amended to read as follows:
18-17 (b) A tax abatement agreement with the owner of real
18-18 property that is located in a [the] reinvestment zone described by
18-19 Subsection (a) and in a school district that on January 1, 2001,
18-20 had [has] a wealth per student that did [does] not exceed the
18-21 equalized wealth level must exempt from taxation:
18-22 (1) the portion of the value of the property in the
18-23 amount specified in the joint agreement among the municipality,
18-24 county, and junior college district; and
18-25 (2) an amount equal to 10 percent of the maximum
18-26 portion of the value of the property that may under Section
18-27 312.204(a) be otherwise exempted from taxation.
19-1 (c) In this section, "wealth per student" and "equalized
19-2 wealth level" have the meanings assigned those terms by Section
19-3 41.001, Education Code, as that section existed on January 1, 2001.
19-4 SECTION 1.26. Section 312.402(b), Tax Code, is amended to
19-5 read as follows:
19-6 (b) A tax abatement agreement made by a county has the same
19-7 effect on the [school districts and] other taxing units in which
19-8 the property subject to the agreement is located as is provided by
19-9 Sections 312.206(a) and (b) for an agreement made by a municipality
19-10 to abate taxes on property located in the taxing jurisdiction of
19-11 the municipality.
19-12 SECTION 1.27. Section 610.001(2), Government Code, is amended
19-13 to read as follows:
19-14 (2) "School district" means a political subdivision
19-15 organized to provide general elementary and secondary public
19-16 education. The term does not include a junior college district or
19-17 a political subdivision organized to provide special education
19-18 services [has the meaning assigned by Section 11.13, Tax Code].
19-19 SECTION 1.28. The following provisions are repealed:
19-20 (1) Sections 6.02(g), 6.03(m), 11.13(b) and (c),
19-21 11.26, 25.19(c), 25.25(k), 26.01(d), 26.012(5) and (12),
19-22 26.04(e-1), 26.06(g), 26.08, 26.085, 26.135, 31.036, 31.037,
19-23 111.301, 311.011(g), 311.013(k), and 312.211(h), Tax Code;
19-24 (2) Subchapter M, Chapter 403, Government Code; and
19-25 (3) Sections 825.405(h) and (i), Government Code.
19-26 SECTION 1.29. (a) This article takes effect January 1, 2002.
19-27 (b) This article does not affect property taxes imposed
20-1 before the effective date of this article, and the law in effect
20-2 before the effective date of this article is continued in effect
20-3 for purposes of the liability for and collection of those taxes and
20-4 penalties and interest on those taxes.
20-5 (c) The repeal of Section 111.301, Tax Code, by this Act
20-6 does not affect the refund of any property taxes as provided by
20-7 that section paid before the effective date of this article, and
20-8 that section is continued in effect for the purpose of the
20-9 implementation of that refund.
20-10 ARTICLE 2. SALES AND USE TAX PROVISIONS
20-11 SECTION 2.01. Subchapter A, Chapter 151, Tax Code, is
20-12 amended by adding Section 151.0046 to read as follows:
20-13 Sec. 151.0046. "REAL PROPERTY." Real property includes a
20-14 building, structure, or other improvement to real property.
20-15 SECTION 2.02. Section 151.005, Tax Code, is amended to read
20-16 as follows:
20-17 Sec. 151.005. "SALE" OR "PURCHASE." (a) "Sale" or
20-18 "purchase" means any of the following when done or performed for
20-19 consideration:
20-20 (1) a transfer of title or possession of tangible
20-21 personal property or real property;
20-22 (2) the exchange, barter, lease, or rental of tangible
20-23 personal property or real property;
20-24 (3) the performance of a taxable service or, in the
20-25 case of an amusement service, a transfer of title to or possession
20-26 of a ticket or other admission document, the collection of an
20-27 admission fee, whether by individual performance, subscription
21-1 series, or membership privilege, the collection of dues or a fee,
21-2 charge, or assessment, including an initiation fee, by a club or
21-3 organization for membership or a special privilege, status, or
21-4 membership classification in the club or organization, or the use
21-5 of a coin-operated machine;
21-6 (4) the production, fabrication, processing, printing,
21-7 or imprinting of tangible personal property for consumers who
21-8 directly or indirectly furnish the materials used in the
21-9 production, fabrication, processing, printing, or imprinting;
21-10 (5) the furnishing and distribution of tangible
21-11 personal property by a social club or fraternal organization to
21-12 anyone;
21-13 (6) the furnishing, preparation, or service of food,
21-14 meals, or drinks;
21-15 (7) a transfer of the possession of tangible personal
21-16 property or real property if the title to the property is retained
21-17 by the seller as security for the payment of the price; or
21-18 (8) a transfer of the title or possession of tangible
21-19 personal property that has been produced, fabricated, or printed to
21-20 the special order of the customer.
21-21 (b) "Sale" or "purchase" of real property includes any sale
21-22 of real property, without regard to whether the purchaser acquires
21-23 the property with the intention of reselling it.
21-24 SECTION 2.03. Section 151.010, Tax Code, is amended to read
21-25 as follows:
21-26 Sec. 151.010. "TAXABLE ITEM." "Taxable item" means:
21-27 (1) real property;
22-1 (2) tangible personal property; and
22-2 (3) taxable services.
22-3 SECTION 2.04. Section 151.051(b), Tax Code, is amended to
22-4 read as follows:
22-5 (b) The sales tax rate is 8 [6 1/4] percent of the sales
22-6 price of the taxable item sold.
22-7 SECTION 2.05. Section 151.302(a), Tax Code, is amended to
22-8 read as follows:
22-9 (a) The sale for resale of a taxable item other than real
22-10 property is exempted from the taxes imposed by this chapter.
22-11 SECTION 2.06. Subchapter M, Chapter 151, Tax Code, is
22-12 amended by adding Section 151.802 to read as follows:
22-13 Sec. 151.802. DISPOSITION OF PROCEEDS FROM INCREASED RATE
22-14 AND EXPANDED TAX BASE. (a) Notwithstanding Section 151.801, all
22-15 proceeds from the collection of the taxes imposed by this chapter
22-16 from the increase in the rate of the tax effective January 1, 2002,
22-17 or the imposition of the tax on a taxable item not subject to the
22-18 tax before January 1, 2002, shall be distributed as provided by
22-19 this section.
22-20 (b) The comptroller shall distribute to the foundation
22-21 school fund an amount sufficient to provide each school district
22-22 with the money allotted to the district by Chapter 42, Education
22-23 Code, to be paid in the manner provided by that chapter.
22-24 (c) The chief financial officer of a school district shall
22-25 send an affidavit to the comptroller stating the amount of
22-26 principal and interest payments due by the school on bonded
22-27 indebtedness in 2001 for bonds for which the district's ad valorem
23-1 taxes are pledged. The comptroller by rule shall provide for the
23-2 form of the affidavit and specify any information that must
23-3 accompany the submission of the affidavit. The chief financial
23-4 officer shall submit the affidavit in the form and manner provided
23-5 by the comptroller not later than July 1, 2002. The comptroller
23-6 shall accept the affidavit only if the comptroller determines that
23-7 the amount of revenue stated in the affidavit is accurate.
23-8 (d) The comptroller shall each year send to each school
23-9 district for which the comptroller has accepted an affidavit
23-10 submitted under Subsection (c) the amount of money stated in the
23-11 affidavit as soon as possible, taking into consideration the
23-12 distribution of money to school districts under Subsection (b) and
23-13 the cash flow needs of the state, but not later than January 31 of
23-14 the year following the year for which the payment is made.
23-15 (e) After distribution by the comptroller of all the money
23-16 necessary to make payments under this section, any remaining
23-17 revenue shall be deposited to the credit of the general revenue
23-18 fund.
23-19 SECTION 2.07. Subchapter B, Chapter 322, Tax Code, is
23-20 amended by adding Section 322.111 to read as follows:
23-21 Sec. 322.111. EXPANDED TAX BASE EXEMPTION. The receipts
23-22 from the sale, use, or rental of real property are exempt from the
23-23 tax imposed by this chapter.
23-24 SECTION 2.08. Subtitle C, Title 3, Tax Code, is amended by
23-25 adding Chapter 328 to read as follows:
23-26 CHAPTER 328. SCHOOL DISTRICT SALES AND USE TAX
23-27 SUBCHAPTER A. GENERAL PROVISIONS
24-1 Sec. 328.001. MUNICIPAL SALES AND USE TAX ACT APPLICABLE.
24-2 Except to the extent that a provision of this chapter applies,
24-3 Chapter 321 applies to the tax authorized by this chapter in the
24-4 same manner as that chapter applies to the tax authorized by that
24-5 chapter.
24-6 (Sections 328.002-328.020 reserved for expansion
24-7 SUBCHAPTER B. IMPOSITION OF TAX
24-8 Sec. 328.021. TAX AUTHORIZED. A school district may adopt
24-9 the sales and use tax authorized by this chapter at an election
24-10 held in the school district.
24-11 Sec. 328.022. TAX RATE. The rate of the tax authorized by
24-12 this chapter may not exceed one-half of one percent and must be in
24-13 increments not less than one-eighth of one percent.
24-14 Sec. 328.023. SALES AND USE TAX EFFECTIVE DATE. (a) The
24-15 adoption of the tax authorized by this chapter takes effect on the
24-16 first day of the first calendar quarter occurring after the
24-17 expiration of the first complete calendar quarter occurring after
24-18 the date on which the comptroller receives a notice of the results
24-19 of the election.
24-20 (b) If the comptroller determines that an effective date
24-21 provided by Subsection (a) will occur before the comptroller can
24-22 reasonably take the action required to begin collecting the tax,
24-23 the effective date may be extended by the comptroller until the
24-24 first day of the next succeeding calendar quarter.
24-25 (Sections 328.024-328.060 reserved for expansion
24-26 SUBCHAPTER C. TAX ELECTION PROCEDURES
24-27 Sec. 328.061. ELECTION PROCEDURE. (a) An election to adopt
25-1 the tax authorized by this chapter is called by the adoption of a
25-2 resolution by the governing body of the school district. The
25-3 governing body of the school district shall call an election if a
25-4 number of qualified voters of the school district equal to at least
25-5 five percent of the total number of voters who cast votes in the
25-6 most recent regular school district election petitions the
25-7 governing body to call the election.
25-8 (b) At an election to adopt the tax, the ballot shall be
25-9 prepared to permit voting for or against the proposition: "The
25-10 adoption of a local sales and use tax in (name of school district)
25-11 at the rate of (proposed rate of tax) to provide revenue for the
25-12 school district."
25-13 (Sections 328.062-328.080 reserved for expansion
25-14 SUBCHAPTER D. USE OF TAX REVENUE
25-15 Sec. 328.081. USE OF TAX REVENUE. Revenue from the tax
25-16 imposed under this chapter may be used only for the reasonable and
25-17 necessary expenses of the school district.
25-18 SECTION 2.09. (a) There is exempted from the use tax
25-19 imposed by Subchapter D, Chapter 151, Tax Code, the use of real
25-20 property if the property was purchased before January 1, 2002.
25-21 (b) This section does not apply to real property exempted by
25-22 this section after the real property is subject to the sales tax
25-23 imposed by Subchapter C, Chapter 151, Tax Code, because of a
25-24 subsequent sale or lease of the real property.
25-25 SECTION 2.10. (a) This article takes effect January 1,
25-26 2002.
25-27 (b) The comptroller shall begin payments under Section
26-1 151.802, Tax Code, as added by this Act, beginning with the
26-2 calendar year 2002.
26-3 ARTICLE 3. SCHOOL FINANCE
26-4 SECTION 3.01. Sections 42.001, 42.002, and 42.007, Education
26-5 Code, are amended to read as follows:
26-6 Sec. 42.001. STATE POLICY. [(a)] It is the policy of this
26-7 state that the provision of public education is a state
26-8 responsibility and that a thorough and efficient system be provided
26-9 and substantially financed through state revenue sources so that
26-10 each student enrolled in the public school system shall have access
26-11 to programs and services that are appropriate to the student's
26-12 educational needs and that are substantially equal to those
26-13 available to any similar student, notwithstanding varying local
26-14 economic factors.
26-15 [(b) The public school finance system of this state shall
26-16 adhere to a standard of neutrality that provides for substantially
26-17 equal access to similar revenue per student at similar tax effort,
26-18 considering all state and local tax revenues of districts after
26-19 acknowledging all legitimate student and district cost
26-20 differences.]
26-21 Sec. 42.002. PURPOSES OF FOUNDATION SCHOOL PROGRAM. [(a)]
26-22 The purposes of the Foundation School Program set forth in this
26-23 chapter are to guarantee that each school district in the state
26-24 has[:]
26-25 [(1)] adequate resources to provide each eligible
26-26 student a basic instructional program and facilities suitable to
26-27 the student's educational needs[; and]
27-1 [(2) access to a substantially equalized program of
27-2 financing in excess of basic costs for certain services, as
27-3 provided by this chapter].
27-4 [(b) The Foundation School Program consists of:]
27-5 [(1) two tiers that in combination provide for:]
27-6 [(A) sufficient financing for all school
27-7 districts to provide a basic program of education that is rated
27-8 academically acceptable or higher under Section 39.072 and meets
27-9 other applicable legal standards; and]
27-10 [(B) substantially equal access to funds to
27-11 provide an enriched program; and]
27-12 [(2) a facilities component as provided by Chapter
27-13 46.]
27-14 Sec. 42.007. EQUALIZED FUNDING ELEMENTS. (a) The
27-15 Legislative Budget Board shall adopt rules, subject to appropriate
27-16 notice and opportunity for public comment, for the calculation for
27-17 each year of a biennium of the [qualified] funding elements, in
27-18 accordance with Subsection (c), necessary to achieve the state
27-19 policy under Section 42.001.
27-20 (b) Before each regular session of the legislature, the
27-21 board shall report the [equalized] funding elements to the
27-22 commissioner and the legislature.
27-23 (c) The funding elements must include:
27-24 (1) a basic allotment for the purposes of Section
27-25 42.101 that[, when combined with the guaranteed yield component
27-26 provided by Subchapter F,] represents the cost per student of a
27-27 regular education program that meets all mandates of law and
28-1 regulation;
28-2 (2) adjustments designed to reflect the variation in
28-3 known resource costs and costs of education beyond the control of
28-4 school districts; and
28-5 (3) appropriate program cost differentials and other
28-6 funding elements for the programs authorized under Subchapter C,
28-7 with the program funding level expressed as dollar amounts and as
28-8 weights applied to the adjusted basic allotment for the appropriate
28-9 year[;]
28-10 [(4) the maximum guaranteed level of qualified state
28-11 and local funds per student for the purposes of Subchapter F;]
28-12 [(5) the enrichment and facilities tax rate under
28-13 Subchapter F;]
28-14 [(6) the computation of students in weighted average
28-15 daily attendance under Section 42.302; and]
28-16 [(7) the amount to be appropriated for the school
28-17 facilities assistance program under Chapter 46].
28-18 (d) The board shall conduct a study on the funding elements
28-19 each biennium, as appropriate. [The study must include a
28-20 determination of the projected cost to the state in the next state
28-21 fiscal biennium of ensuring the ability of each school district to
28-22 maintain existing programs without increasing property tax rates.]
28-23 SECTION 3.02. Section 42.101, Education Code, is amended to
28-24 read as follows:
28-25 Sec. 42.101. BASIC ALLOTMENT. For each student in average
28-26 daily attendance, not including the time students spend each day in
28-27 special education programs in an instructional arrangement other
29-1 than mainstream or career and technology education programs, for
29-2 which an additional allotment is made under Subchapter C, a
29-3 district is entitled to an allotment of $3,700 [$2,537]. A greater
29-4 amount for any school year may be provided by appropriation.
29-5 SECTION 3.03. Sections 42.152(e), (h), and (k), Education
29-6 Code, are amended to read as follows:
29-7 (e) The commissioner may:
29-8 (1) retain a portion of the total amount allotted
29-9 under Subsection (a) that the commissioner considers appropriate to
29-10 finance intensive accelerated instruction programs and study guides
29-11 provided under Sections 39.024(b) and (c); and
29-12 (2) reduce each district's allotment under Subsection
29-13 (a) proportionately [tier one allotments in the same manner
29-14 described for a reduction in allotments under Section 42.253].
29-15 (h) After deducting the amount withheld under Subsection (f)
29-16 from the total amount appropriated for the allotment under
29-17 Subsection (a), the commissioner shall reduce each district's
29-18 allotment under Subsection (a) proportionately [tier one allotments
29-19 in the same manner described for a reduction in allotments under
29-20 Section 42.253 and shall allocate funds to each district
29-21 accordingly].
29-22 (k) After deducting the amount withheld under Subsection (i)
29-23 from the total amount appropriated for the allotment under
29-24 Subsection (a), the commissioner shall reduce each district's
29-25 allotment under Subsection (a) proportionately [tier one
29-26 allotments in the same manner described for a reduction in
29-27 allotments under Section 42.253].
30-1 SECTION 3.04. Section 42.154(e), Education Code, is amended
30-2 to read as follows:
30-3 (e) Out of the total statewide allotment for career and
30-4 technology education under this section, the commissioner shall set
30-5 aside an amount specified in the General Appropriations Act, which
30-6 may not exceed an amount equal to one percent of the total amount
30-7 appropriated, to support regional career and technology education
30-8 planning. After deducting the amount set aside under this
30-9 subsection from the total amount appropriated for career and
30-10 technology education under this section, the commissioner shall
30-11 reduce each district's allotment under Subsection (a)
30-12 proportionately [tier one allotments in the same manner described
30-13 for a reduction in allotments under Section 42.253].
30-14 SECTION 3.05. Sections 42.158(d) and (g), Education Code, are
30-15 amended to read as follows:
30-16 (d) The amount appropriated for allotments under this
30-17 section may not exceed $25 million in a school year. If the total
30-18 amount of allotments to which districts are entitled under this
30-19 section for a school year exceeds the amount appropriated for
30-20 allotments under this section, the commissioner shall reduce each
30-21 district's allotment under this section proportionately [in the
30-22 manner provided by Section 42.253(h)].
30-23 (g) In this section, "instructional facility" means real
30-24 property, an improvement to real property, or a necessary fixture
30-25 of an improvement to real property that is used predominantly for
30-26 teaching the curriculum required under Section 28.002 [has the
30-27 meaning assigned by Section 46.001].
31-1 SECTION 3.06. Section 42.201(d), Education Code, is amended
31-2 to read as follows:
31-3 (d) If a school district fails to reduce administrative
31-4 costs to the level required by this section, the commissioner shall
31-5 deduct from a school district's foundation school program payments
31-6 [tier one allotments] an amount equal to the amount by which the
31-7 district's administrative costs exceed the amount permitted by its
31-8 administrative cost ratio, unless the commissioner has granted a
31-9 waiver in response to the district's request. The commissioner
31-10 shall make a deduction under this subsection from the foundation
31-11 school fund payments to the district in the school year following
31-12 the school year in which the plan to reduce costs was to be
31-13 implemented. [If a school district does not receive a tier one
31-14 allotment, the district shall remit an amount equal to the excess
31-15 to the comptroller for deposit to the credit of the foundation
31-16 school fund.]
31-17 SECTION 3.07. Sections 42.251, 42.2512, 42.253, 42.254, and
31-18 42.259, Education Code, are amended to read as follows:
31-19 Sec. 42.251. FINANCING; GENERAL RULE. (a) The sum of the
31-20 basic allotment under Subchapter B and the special allotments
31-21 under Subchapter C computed in accordance with this chapter,
31-22 constitute the [tier one allotments. The sum of the tier one
31-23 allotments and the guaranteed yield allotments under Subchapter F,
31-24 computed in accordance with this chapter, constitute the] total
31-25 cost of the Foundation School Program.
31-26 (b) The program shall be financed by:
31-27 (1) [ad valorem tax revenue generated by an equalized
32-1 uniform school district effort;]
32-2 [(2) ad valorem tax revenue generated by local school
32-3 district effort in excess of the equalized uniform school district
32-4 effort;]
32-5 [(3)] state available school funds distributed in
32-6 accordance with law; and
32-7 (2) [(4)] state funds appropriated for the purposes of
32-8 public school education and allocated to each district in an amount
32-9 sufficient to finance the cost of each district's Foundation School
32-10 Program not covered by state available school [other] funds
32-11 [specified in this subsection].
32-12 Sec. 42.2512. Additional State Aid for Professional Staff
32-13 Salaries. (a) In addition to any other amounts to which a school
32-14 district is entitled under this chapter, a [A] school district[,
32-15 including a school district that is otherwise ineligible for state
32-16 aid under this chapter,] is entitled to state aid in an amount, as
32-17 determined by the commissioner, equal to the [difference, if any,
32-18 between:]
32-19 [(1) an amount equal to the] product of $3,000
32-20 multiplied by the number of classroom teachers, full-time
32-21 librarians, full-time counselors certified under Subchapter B,
32-22 Chapter 21, and full-time school nurses employed by the district
32-23 and entitled to a minimum salary under Section 21.402[; and]
32-24 [(2) an amount equal to 80 percent of the amount of
32-25 additional funds to which the district is entitled due to the
32-26 increases made by S.B. No. 4, Acts of the 76th Legislature, Regular
32-27 Session, 1999, to:]
33-1 [(A) the equalized wealth level under Section
33-2 41.002;]
33-3 [(B) the basic allotment under Section 42.101;
33-4 and]
33-5 [(C) the guaranteed level of state and local
33-6 funds per weighted student per cent of tax effort under Section
33-7 42.302].
33-8 (b) A determination by the commissioner under this section
33-9 is final and may not be appealed.
33-10 (c) The commissioner may adopt rules to implement this
33-11 section.
33-12 Sec. 42.253. DISTRIBUTION OF FOUNDATION SCHOOL FUND. (a)
33-13 For each school year the commissioner shall determine:
33-14 (1) the amount of money to which a school district is
33-15 entitled under Subchapters B and C; and
33-16 (2) [the amount of money to which a school district is
33-17 entitled under Subchapter F;]
33-18 [(3)] the amount of money allocated to the district
33-19 from the available school fund[;]
33-20 [(4) the amount of each district's tier one local
33-21 share under Section 42.252; and]
33-22 [(5) the amount of each district's tier two local
33-23 share under Section 42.302].
33-24 (b) The [Except as provided by this subsection, the]
33-25 commissioner shall base the determinations under Subsection (a) on
33-26 the estimates provided to the legislature under Section 42.254, or,
33-27 if the General Appropriations Act provides estimates for that
34-1 purpose, on the estimates provided under that Act, for each school
34-2 district for each school year. [The commissioner shall reduce the
34-3 entitlement of each district that has a final taxable value of
34-4 property for the second year of a state fiscal biennium that is
34-5 higher than the estimate under Section 42.254 or the General
34-6 Appropriations Act, as applicable. A reduction under this
34-7 subsection may not reduce the district's entitlement below the
34-8 amount to which it is entitled at its actual taxable value of
34-9 property. The sum of the reductions under this subsection may not
34-10 be greater than the amount necessary to fully fund the entitlement
34-11 of each district.]
34-12 (c) Each school district is entitled to an amount equal to
34-13 the difference for that district between [the sum of] Subsections
34-14 (a)(1) and (a)(2) [and the sum of Subsections (a)(3), (a)(4), and
34-15 (a)(5)].
34-16 (d) The commissioner shall approve warrants to each school
34-17 district equaling the amount of its entitlement except as provided
34-18 by this section. Warrants for all money expended according to this
34-19 chapter shall be approved and transmitted to treasurers or
34-20 depositories of school districts in the same manner that warrants
34-21 for state payments are transmitted. The total amount of the
34-22 warrants issued under this section may not exceed the total amount
34-23 appropriated for Foundation School Program purposes for that fiscal
34-24 year.
34-25 (e) [The commissioner shall recompute the amount to which
34-26 the district is entitled under Subsection (c) if a school
34-27 district's tax rate is less than the limit authorized under this
35-1 subsection. The amount to which a district is entitled under this
35-2 section may not exceed the amount to which the district would be
35-3 entitled at the district's tax rate for the final year of the
35-4 preceding biennium, or a different tax rate provided by
35-5 appropriation. The commissioner shall recompute the amount to
35-6 which a district is entitled to the extent necessary under this
35-7 section. The commissioner shall approve warrants to the school in
35-8 the amount that results from the new computation. An amount equal
35-9 to the difference between the initial allocation and the amount of
35-10 the warrants shall be transferred to a special account in the
35-11 foundation school fund known as the reserve account.]
35-12 [(f) Amounts transferred to the reserve account under
35-13 Subsection (e) shall be used in the succeeding fiscal year to
35-14 finance increases in allocations to school districts under
35-15 Subsection (i). If the amount in the reserve account is less than
35-16 the amount of the increases under Subsection (i) for the second
35-17 year of a state fiscal biennium, the commissioner shall certify the
35-18 amount of the difference to the Legislative Budget Board not later
35-19 than January 1 of the second year of the state fiscal biennium.
35-20 The Legislative Budget Board shall propose to the legislature that
35-21 the certified amount be transferred to the foundation school fund
35-22 from the economic stabilization fund and appropriated for the
35-23 purpose of increases in allocations under Subsection (h).]
35-24 [(g)] If a school district demonstrates to the satisfaction
35-25 of the commissioner that the estimate of the district's [tax rate,]
35-26 student enrollment[, or taxable value of property] used in
35-27 determining the amount of state funds to which the district is
36-1 entitled are so inaccurate as to result in undue financial hardship
36-2 to the district, the commissioner may adjust funding to that
36-3 district in that school year to the extent that funds are available
36-4 for that year[, including funds in the reserve account. Funds in
36-5 the reserve account may not be used under this subsection until any
36-6 reserve funds have been used for purposes of Subsection (f)].
36-7 (f) [(h)] If the amount to which school districts are
36-8 entitled under Subsection (c) for a fiscal year exceeds the amount
36-9 appropriated for that purpose for the fiscal year [legislature
36-10 fails during the regular session to enact the transfer and
36-11 appropriation proposed under Subsection (f)] and there are not
36-12 funds available under Subsection (h) [(j)], the commissioner shall
36-13 reduce the total amount of state funds allocated to each district
36-14 proportionately [by an amount determined by a method under which
36-15 the application of the same number of cents of increase in tax rate
36-16 in all districts applied to the taxable value of property of each
36-17 district, as determined under Subchapter M, Chapter 403, Government
36-18 Code, results in a total levy equal to the total reduction]. The
36-19 following fiscal year, a district's entitlement under this section
36-20 is increased by an amount equal to the reduction made under this
36-21 subsection.
36-22 (g) [(i)] Not later than March 1 each year, the commissioner
36-23 shall determine the actual amount of state funds to which each
36-24 school district is entitled under the allocation formulas in this
36-25 chapter for the current school year and shall compare that amount
36-26 with the amount of the warrants issued to each district for that
36-27 year. If the amount of the warrants differs from the amount to
37-1 which a district is entitled because of variations in the
37-2 district's [tax rate,] student enrollment, [or taxable value of
37-3 property,] the commissioner shall adjust the district's entitlement
37-4 for the next fiscal year accordingly.
37-5 (h) [(j)] The legislature may appropriate funds necessary
37-6 for shortages under Subsection (e) or (f) or increases under
37-7 Subsection (g) [(i)] from funds that the comptroller, at any time
37-8 during the fiscal year, finds are available.
37-9 (i) [(k)] The commissioner shall compute for each school
37-10 district the total amount by which the district's allocation of
37-11 state funds is increased or reduced under Subsection (g) [(i)] and
37-12 shall certify that amount to the district.
37-13 [(l) In this section, the number of students in weighted
37-14 average daily attendance is calculated in the manner provided by
37-15 Section 42.302.]
37-16 Sec. 42.254. ESTIMATES REQUIRED. (a) Not later than
37-17 October 1 of each even-numbered year,[:]
37-18 [(1)] the agency shall submit to the legislature an
37-19 estimate of the [tax rate and] student enrollment of each school
37-20 district for the following biennium[; and]
37-21 [(2) the comptroller shall submit to the legislature
37-22 an estimate of the total taxable value of all property in the state
37-23 as determined under Subchapter M, Chapter 403, Government Code, for
37-24 the following biennium].
37-25 (b) The agency [and the comptroller] shall update the
37-26 information provided to the legislature under Subsection (a) not
37-27 later than March 1 of each odd-numbered year.
38-1 Sec. 42.259. FOUNDATION SCHOOL FUND TRANSFERS. (a) [In
38-2 this section:]
38-3 [(1) "Category 1 school district" means a school
38-4 district having a wealth per student of less than one-half of the
38-5 statewide average wealth per student.]
38-6 [(2) "Category 2 school district" means a school
38-7 district having a wealth per student of at least one-half of the
38-8 statewide average wealth per student but not more than the
38-9 statewide average wealth per student.]
38-10 [(3) "Category 3 school district" means a school
38-11 district having a wealth per student of more than the statewide
38-12 average wealth per student.]
38-13 [(4) "Wealth per student" means the taxable property
38-14 values reported by the comptroller to the commissioner under
38-15 Section 42.252 divided by the number of students in average daily
38-16 attendance.]
38-17 [(b) Payments from the foundation school fund to each
38-18 category 1 school district shall be made as follows:]
38-19 [(1) 15 percent of the yearly entitlement of the
38-20 district shall be paid in an installment to be made on or before
38-21 the 25th day of September of a fiscal year;]
38-22 [(2) 80 percent of the yearly entitlement of the
38-23 district shall be paid in eight equal installments to be made on or
38-24 before the 25th day of October, November, December, January, March,
38-25 May, June, and July; and]
38-26 [(3) five percent of the yearly entitlement of the
38-27 district shall be paid in an installment to be made on or before
39-1 the 25th day of February.]
39-2 [(c)] Payments from the foundation school fund to each
39-3 [category 2] school district shall be made as follows:
39-4 (1) 22 percent of the yearly entitlement of the
39-5 district shall be paid in an installment to be made on or before
39-6 the 25th day of September of a fiscal year;
39-7 (2) 18 percent of the yearly entitlement of the
39-8 district shall be paid in an installment to be made on or before
39-9 the 25th day of October;
39-10 (3) 9.5 percent of the yearly entitlement of the
39-11 district shall be paid in an installment to be made on or before
39-12 the 25th day of November;
39-13 (4) 7.5 percent of the yearly entitlement of the
39-14 district shall be paid in an installment to be made on or before
39-15 the 25th day of April;
39-16 (5) five percent of the yearly entitlement of the
39-17 district shall be paid in an installment to be made on or before
39-18 the 25th day of May;
39-19 (6) 10 percent of the yearly entitlement of the
39-20 district shall be paid in an installment to be made on or before
39-21 the 25th day of June;
39-22 (7) 13 percent of the yearly entitlement of the
39-23 district shall be paid in an installment to be made on or before
39-24 the 25th day of July; and
39-25 (8) 15 percent of the yearly entitlement of the
39-26 district shall be paid in an installment to be made on or before
39-27 the 25th day of August.
40-1 [(d) Payments from the foundation school fund to each
40-2 category 3 school district shall be made as follows:]
40-3 [(1) 45 percent of the yearly entitlement of the
40-4 district shall be paid in an installment to be made on or before
40-5 the 25th day of September of a fiscal year;]
40-6 [(2) 35 percent of the yearly entitlement of the
40-7 district shall be paid in an installment to be made on or before
40-8 the 25th day of October; and]
40-9 [(3) 20 percent of the yearly entitlement of the
40-10 district shall be paid in an installment to be made on or before
40-11 the 25th day of August.]
40-12 (b) [(e)] The amount of any installment required by this
40-13 section may be modified to provide a school district with the
40-14 proper amount to which the district may be entitled by law and to
40-15 correct errors in the allocation or distribution of funds. If an
40-16 installment under this section is required to be equal to other
40-17 installments, the amount of other installments may be adjusted to
40-18 provide for that equality. A payment under this section is not
40-19 invalid because it is not equal to other installments.
40-20 (c) [(f)] Any previously unpaid additional funds from prior
40-21 years owed to a district shall be paid to the district together
40-22 with the September payment of the current year entitlement.
40-23 SECTION 3.08. Section 45.001, Education Code, is amended to
40-24 read as follows:
40-25 Sec. 45.001. BONDS; [AND BOND] TAXES. (a) The governing
40-26 board of an independent school district, including the city council
40-27 or commission that has jurisdiction over a municipally controlled
41-1 independent school district, the governing board of a rural high
41-2 school district, and the commissioners court of a county, on behalf
41-3 of each common school district under its jurisdiction, may:
41-4 (1) issue negotiable coupon bonds for:
41-5 (A) the construction, acquisition, and equipment
41-6 of school buildings in the district;
41-7 (B) the acquisition of property or the
41-8 refinancing of property financed under a contract entered under
41-9 Subchapter A, Chapter 271, Local Government Code, regardless of
41-10 whether payment obligations under the contract are due in the
41-11 current year or a future year; and
41-12 (C) the purchase of the necessary sites for
41-13 school buildings; and
41-14 (2) [may levy,] pledge state funds to be received
41-15 under Chapters 42 and 43 and revenue from a school district sales
41-16 and use tax imposed under Chapter 328, Tax Code,[, assess, and
41-17 collect annual ad valorem taxes sufficient] to pay the principal of
41-18 and interest on the bonds as the principal and interest become
41-19 due[, subject to Section 45.003].
41-20 (b) The bonds must mature serially or otherwise not more
41-21 than 40 years from their date. The bonds may be made redeemable
41-22 before maturity.
41-23 (c) Bonds may be sold at public or private sale as
41-24 determined by the governing board of the district.
41-25 (d) Notwithstanding any other provision of this code, the
41-26 governing body of a school district may not impose an ad valorem
41-27 tax.
42-1 SECTION 3.09. Section 12.013(b), Education Code, is amended
42-2 to read as follows:
42-3 (b) A home-rule school district is subject to:
42-4 (1) a provision of this title establishing a criminal
42-5 offense;
42-6 (2) a provision of this title relating to limitations
42-7 on liability; and
42-8 (3) a prohibition, restriction, or requirement, as
42-9 applicable, imposed by this title or a rule adopted under this
42-10 title, relating to:
42-11 (A) the Public Education Information Management
42-12 System (PEIMS) to the extent necessary to monitor compliance with
42-13 this subchapter as determined by the commissioner;
42-14 (B) educator certification under Chapter 21 and
42-15 educator rights under Sections 21.407, 21.408, and 22.001;
42-16 (C) criminal history records under Subchapter C,
42-17 Chapter 22;
42-18 (D) student admissions under Section 25.001;
42-19 (E) school attendance under Sections 25.085,
42-20 25.086, and 25.087;
42-21 (F) inter-district or inter-county transfers of
42-22 students under Subchapter B, Chapter 25;
42-23 (G) elementary class size limits under Section
42-24 25.112, in the case of any campus in the district that is
42-25 considered low-performing under Section 39.131(b);
42-26 (H) high school graduation under Section 28.025;
42-27 (I) special education programs under Subchapter
43-1 A, Chapter 29;
43-2 (J) bilingual education under Subchapter B,
43-3 Chapter 29;
43-4 (K) prekindergarten programs under Subchapter E,
43-5 Chapter 29;
43-6 (L) safety provisions relating to the
43-7 transportation of students under Sections 34.002, 34.003, 34.004,
43-8 and 34.008;
43-9 (M) computation and distribution of state aid
43-10 under Chapters 31, 42, and 43;
43-11 (N) extracurricular activities under Section
43-12 33.081;
43-13 (O) health and safety under Chapter 38;
43-14 (P) public school accountability under
43-15 Subchapters B, C, D, and G, Chapter 39;
43-16 (Q) [equalized wealth under Chapter 41;]
43-17 [(R)] a bond or other obligation [or tax rate]
43-18 under Chapters 42, 43, and 45; and
43-19 (R) [(S)] purchasing under Chapter 44.
43-20 SECTION 3.10. Section 12.029(b), Education Code, is amended
43-21 to read as follows:
43-22 (b) If [Except as provided by Subchapter H, Chapter 41, if]
43-23 two or more school districts having different status, one of which
43-24 is home-rule school district status, consolidate into a single
43-25 district, the petition under Section 13.003 initiating the
43-26 consolidation must state the status for the consolidated district.
43-27 The ballot shall be printed to permit voting for or against the
44-1 proposition: "Consolidation of (names of school districts) into a
44-2 single school district governed as (status of school district
44-3 specified in the petition)."
44-4 SECTION 3.11. Section 12.106(b), Education Code, is amended
44-5 to read as follows:
44-6 (b) A student attending an open-enrollment charter school
44-7 who is eligible under Section 42.003 is entitled to the benefits of
44-8 the Foundation School Program under Chapter 42. The commissioner
44-9 shall distribute from the foundation school fund to each school an
44-10 amount equal to the cost of a Foundation School Program provided by
44-11 the program for which the charter is granted as determined under
44-12 Section 42.251, including the transportation allotment under
44-13 Section 42.155, for the student that the district in which the
44-14 student resides would be entitled to, less an amount equal to the
44-15 [sum of the school's tuition receipts under Section 12.107 plus
44-16 the] school's distribution from the available school fund.
44-17 SECTION 3.12. Section 12.108, Education Code, is amended to
44-18 read as follows:
44-19 Sec. 12.108. TUITION PROHIBITED [RESTRICTED]. An [Except as
44-20 provided by Section 12.106, an] open-enrollment charter school may
44-21 not charge tuition to an eligible student who applies under Section
44-22 12.117.
44-23 SECTION 3.13. Sections 13.004(d) and (f), Education Code,
44-24 are amended to read as follows:
44-25 (d) A school district required to assume the indebtedness of
44-26 another district under this chapter is not required to conduct an
44-27 election on assumption of the indebtedness. [Without an election,
45-1 the school district assuming the indebtedness may levy and collect
45-2 taxes necessary to pay principal and interest on the assumed debt
45-3 so long as the debt is outstanding.]
45-4 (f) If an entire district is annexed to or consolidated with
45-5 another district, if a district is converted from a common to an
45-6 independent school district, or if a school district is separated
45-7 from a municipality, the governing board of the district as changed
45-8 may, without an election, sell and deliver any unissued bonds voted
45-9 in the district before the change [and may levy and collect taxes
45-10 in the district as changed for the payment of principal and
45-11 interest on bonds].
45-12 SECTION 3.14. Section 13.231, Education Code, is amended to
45-13 read as follows:
45-14 Sec. 13.231. MINOR BOUNDARY ADJUSTMENTS BY AGREEMENT. [(a)]
45-15 Two contiguous school districts may adjust their common boundary by
45-16 agreement if, at the time the agreement is executed,[:]
45-17 [(1)] no child who resides in the territory that is
45-18 transferred from one jurisdiction to the other is enrolled in a
45-19 school of the district from which the territory is transferred[;
45-20 and]
45-21 [(2) the taxable value of the territory that is
45-22 transferred from one jurisdiction to the other does not exceed
45-23 one-tenth of one percent of the total taxable value of all property
45-24 in the school district from which the territory is transferred.]
45-25 [(b) In this section, "taxable value" has the meaning
45-26 assigned by Section 403.302, Government Code].
45-27 SECTION 3.15. Sections 21.402(a) and (b), Education Code,
46-1 are amended to read as follows:
46-2 (a) Except as provided by Subsection (d), (e), or (f), a
46-3 school district must pay each classroom teacher, full-time
46-4 librarian, full-time counselor certified under Subchapter B, or
46-5 full-time school nurse not less than the minimum monthly salary,
46-6 based on the employee's level of experience, determined by the
46-7 following formula:
46-8 MS = SF X FS
46-9 where:
46-10 "MS" is the minimum monthly salary;
46-11 "SF" is the applicable salary factor specified by Subsection
46-12 (c); and
46-13 "FS" is the average amount, as determined by the commissioner
46-14 under Subsection (b), of foundation school payments per student
46-15 made during the preceding school year [state and local funds per
46-16 weighted student available to a district eligible to receive state
46-17 assistance under Section 42.302 with an enrichment tax rate, as
46-18 defined by Section 42.302, equal to the maximum rate authorized
46-19 under Section 42.303].
46-20 (b) Not later than July [June] 1 of each year, the
46-21 commissioner shall determine the average amount of foundation
46-22 school program payments per student made during the preceding
46-23 school year [state and local funds per weighted student available,
46-24 for purposes of Subsection (a), to a district described by that
46-25 subsection for the following school year].
46-26 SECTION 3.16. Section 21.410(h), Education Code, is amended
46-27 to read as follows:
47-1 (h) A grant a school district receives under this section is
47-2 in addition to any funding the district receives under Chapter 42.
47-3 The commissioner shall distribute funds under this section with the
47-4 Foundation School Program payment to which the district is entitled
47-5 as soon as practicable after the end of the school year as
47-6 determined by the commissioner. [A district to which Chapter 41
47-7 applies is entitled to the grants paid under this section. The
47-8 commissioner shall determine the timing of the distribution of
47-9 grants to a district that does not receive Foundation School
47-10 Program payments.]
47-11 SECTION 3.17. Section 29.008(b), Education Code, is amended
47-12 to read as follows:
47-13 (b) Except as provided by Subsection (c), costs of an
47-14 approved contract for residential placement may be paid from a
47-15 combination of federal, state, and local funds. [The local share
47-16 of the total contract cost for each student is that portion of the
47-17 local tax effort that exceeds the district's local fund assignment
47-18 under Section 42.252, divided by the average daily attendance in
47-19 the district. If the contract involves a private facility, the
47-20 state share of the total contract cost is that amount remaining
47-21 after subtracting the local share. If the contract involves a
47-22 public facility, the state share is that amount remaining after
47-23 subtracting the local share from the portion of the contract that
47-24 involves the costs of instructional and related services. For
47-25 purposes of this subsection, "local tax effort" means the total
47-26 amount of money generated by taxes imposed for debt service and
47-27 maintenance and operation less any amounts paid into a tax
48-1 increment fund under Chapter 311, Tax Code.]
48-2 SECTION 3.18. Section 29.203(b), Education Code, is amended
48-3 to read as follows:
48-4 (b) A school district is entitled to the allotment provided
48-5 by Section 42.157 for each eligible student using a public
48-6 education grant. [If the district has a wealth per student greater
48-7 than the guaranteed wealth level but less than the equalized wealth
48-8 level, a school district is entitled under rules adopted by the
48-9 commissioner to additional state aid in an amount equal to the
48-10 difference between the cost to the district of providing services
48-11 to a student using a public education grant and the sum of the
48-12 state aid received because of the allotment under Section 42.157
48-13 and money from the available school fund attributable to the
48-14 student.]
48-15 SECTION 3.19. Section 39.024(c), Education Code, is amended
48-16 to read as follows:
48-17 (c) The agency shall develop study guides for the assessment
48-18 instruments administered under Sections 39.023(a) and (c). To
48-19 assist parents in providing assistance during the period that
48-20 school is recessed for summer, each school district shall
48-21 distribute the study guides to parents of students who do not
48-22 perform satisfactorily on one or more parts of an assessment
48-23 instrument administered under this subchapter. [The commissioner
48-24 shall retain a portion of the total amount of funds allotted under
48-25 Section 42.152(a) that the commissioner considers appropriate to
48-26 finance the development and distribution of the study guides and
48-27 shall reduce each district's allotment proportionately.]
49-1 SECTION 3.20. Section 39.031(a), Education Code, is amended
49-2 to read as follows:
49-3 (a) The cost of preparing, administering, or grading the
49-4 assessment instruments shall be paid from the funds allotted under
49-5 Section 42.152, and each district shall bear the cost in proportion
49-6 to its allotment under Section 42.152 [in the same manner described
49-7 for a reduction in allotments under Section 42.253]. If a district
49-8 does not receive an allotment under Section 42.152, the
49-9 commissioner shall subtract the cost from the district's other
49-10 foundation school fund allotments.
49-11 SECTION 3.21. Sections 56.208(a) and (b), Education Code, are
49-12 amended to read as follows:
49-13 (a) The Early High School Graduation Scholarship program is
49-14 financed under the Foundation School Program. Funding for the
49-15 state tuition credits is not subject to the provisions of Section
49-16 42.253(f) [Sections 42.253(e) through (k)].
49-17 (b) The commissioner of education shall reduce the total
49-18 annual amount of foundation school fund payments made to a school
49-19 district by an amount equal to [F x A, where:]
49-20 [(1) "F" is the lesser of one or the quotient of the
49-21 district's local share for the preceding school year under Section
49-22 42.252 divided by the amount of money to which the district was
49-23 entitled under Subchapters B and C, Chapter 42, for the preceding
49-24 school year; and]
49-25 [(2) "A" is] the amount of state tuition credits under
49-26 this subchapter applied by institutions of higher education on
49-27 behalf of eligible persons who graduated from the district that has
50-1 not been used to compute a previous reduction under this
50-2 subsection.
50-3 SECTION 3.22. Section 39.903(e), Utilities Code, is amended
50-4 to read as follows:
50-5 (e) The system benefit fund shall provide funding solely for
50-6 the following regulatory purposes:
50-7 (1) programs to assist low-income electric customers
50-8 provided by Subsections (f)-(l); and
50-9 (2) customer education programs[; and]
50-10 [(3) the school funding loss mechanism provided by
50-11 Section 39.901].
50-12 SECTION 3.23. (a) The following provisions of the Education
50-13 Code are repealed:
50-14 (1) Chapters 41 and 46;
50-15 (2) Subchapters F, G, and H, Chapter 42;
50-16 (3) Subchapter H, Chapter 45; and
50-17 (4) Sections 7.055(b)(34), 11.152, 12.107, 13.006,
50-18 13.007, 13.051(c) and (e), 13.054(f) and (g), 13.205(d), 29.203(c)
50-19 and (g), 42.103(e), 42.106, 42.152(s) and (t), 42.156(d),
50-20 42.158(e), 42.2511, 42.252, 42.2521, 42.2522, 42.257, 44.004(c),
50-21 (d), and (e), 45.002, 45.003, 45.006, 45.104, and 56.208(c).
50-22 (b) Section 39.901, Utilities Code, is repealed.
50-23 SECTION 3.24. This article takes effect September 1, 2002.