By Duncan S.B. No. 460
77R2647 JD-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the inclusion of certain contractual obligations in the
1-3 debt of a school district for property tax purposes.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 26.012(7), Tax Code, is amended to read as
1-6 follows:
1-7 (7) "Debt" means a bond, warrant, certificate of
1-8 obligation, or other evidence of indebtedness owed by a taxing unit
1-9 that is payable solely from property taxes in installments over a
1-10 period of more than one year, not budgeted for payment from
1-11 maintenance and operations funds, and secured by a pledge of
1-12 property taxes, or a payment made under contract to secure
1-13 indebtedness of a similar nature issued by another political
1-14 subdivision on behalf of the taxing unit. For a school district
1-15 that complies with Section 26.03, the term also includes all or
1-16 part of a contractual obligation entered into by the district that
1-17 has a term of more than one year, is payable from property taxes,
1-18 is budgeted for payment from maintenance and operations funds, and
1-19 is secured by a pledge of property taxes.
1-20 SECTION 2. Chapter 26, Tax Code, is amended by adding Section
1-21 26.03 to read as follows:
1-22 Sec. 26.03. NOTICE OF INTENTION TO INCLUDE CONTRACTUAL
1-23 OBLIGATION IN DEBT OF SCHOOL DISTRICT. (a) The board of trustees
1-24 of a school district may include a contractual obligation budgeted
2-1 for payment from maintenance and operations funds as described by
2-2 Section 26.012(7) in the debt of the district only in compliance
2-3 with this section.
2-4 (b) The board of trustees may include a contractual
2-5 obligation described by Subsection (a) in the district's debt only
2-6 to the extent that the district's debt rate imposed for payment of
2-7 all such contractual obligations does not exceed $0.05 per $100 of
2-8 valuation.
2-9 (c) Before the board of trustees may act to include the
2-10 contractual obligation in the debt of the district, the board of
2-11 trustees must provide public notice of the board's intention.
2-12 (d) The notice required by Subsection (c) must:
2-13 (1) be published in a newspaper of general circulation
2-14 in the district not later than the 15th day before the date set for
2-15 the board meeting at which a tax rate is to be adopted for the
2-16 district; and
2-17 (2) contain a statement in the following form:
2-18 "NOTICE OF INTENTION TO INCLUDE ONE OR MORE SCHOOL
2-19 DISTRICT CONTRACTUAL OBLIGATIONS IN DEBT OF DISTRICT
2-20 "The board of trustees of (name of school district), in
2-21 adopting a tax rate for the district, will consider a proposal to
2-22 include one or more contractual obligations in the debt of the
2-23 district. If approved, inclusion of those obligations in the
2-24 district's debt will have the effect of increasing the amount of
2-25 the district's debt service and raising the district's rollback tax
2-26 rate. The rollback tax rate is the limit on the amount of a tax
2-27 rate increase over the previous year's rate that the district may
3-1 adopt without holding an election."
3-2 (e) At the meeting, the board of trustees shall specify
3-3 whether all or part of the contractual obligation will be included
3-4 in the debt of the district.
3-5 SECTION 3. This Act takes effect immediately if it receives
3-6 a vote of two-thirds of all the members elected to each house, as
3-7 provided by Section 39, Article III, Texas Constitution. If this
3-8 Act does not receive the vote necessary for immediate effect, this
3-9 Act takes effect September 1, 2001.