78S40246 ESH/CBH/JD/YDB-D

By:  Grusendorf                                                   H.B. No. 1  


A BILL TO BE ENTITLED
AN ACT
relating to public education and public school finance, including state and local taxation. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: SECTION 1. Chapter 21, Education Code, is amended by adding Subchapter N to read as follows:
SUBCHAPTER N. EDUCATOR EXCELLENCE INCENTIVE PROGRAM
Sec. 21.651. EDUCATOR EXCELLENCE INCENTIVE PROGRAM; FUND. (a) The commissioner shall establish an educator excellence incentive program as provided by this subchapter. The purpose of the program is to reward classroom teachers and principals in participating school districts whose performance demonstrates success in adding value to student achievement. (b) The educator excellence incentive fund is an account in the general revenue fund. The fund consists of amounts transferred to the fund at the direction of the legislature for purposes of the program and donations and grants made to the fund for purposes of the program. (c) The commissioner must approve each payment from the fund and may adopt rules for the administration of the program and the payment of incentive grants from the fund. Sec. 21.652. STATE EVALUATION SYSTEM. (a) The commissioner shall develop a system for evaluating classroom teachers and principals in participating school districts for purposes of awarding campus incentives under this subchapter. The evaluation system must provide for awarding grants based on value-added student achievement, as measured by the performance of the students at a campus on: (1) state assessment instruments administered under Sections 39.023(a), (b), (c), and (l); (2) end-of-course assessment instruments administered under Section 39.023(d); and (3) other appropriate academic excellence indicators under Section 39.051. (b) At the end of each school year, the commissioner shall evaluate each campus in participating school districts under the state evaluation system and rank each campus by the campus's score on the evaluation system. The commissioner shall then divide the ranked campuses into three groups, as follows: (1) the first group consists of the highest-ranked campuses, beginning with the highest-ranked campus and ending with the first campus that results in the total number of students served by the campuses in the group equaling or exceeding 20 percent of the total number of students in the state; (2) the second group consists of the next highest-ranked campuses, beginning with the highest-ranked campus that is not in the first group and ending with the first campus that results in the total number of students served by the campuses in the group equaling or exceeding 20 percent of the total number of students in the state; and (3) the third group consists of all campuses that are not in the first two groups. (c) After grouping school campuses as provided by Subsection (b), the commissioner shall promptly notify each participating school district of the commissioner's determination. Each district in which a campus in a group described by Subsection (b)(1) or (2) is located shall promptly notify the commissioner of the number of full-time classroom teachers and principals employed at each listed campus during the school year for which the determination is made who are eligible for an incentive under this subchapter. (d) The commissioner's determination under this section is final and may not be appealed. Sec. 21.653. GRANTS TO SCHOOL DISTRICTS. (a) From funds appropriated for that purpose, and based on the evaluations under Section 21.652(b), the commissioner shall make grants to all school districts in which a campus in a group described by Section 21.652(b)(1) or (2) is located to enable the districts to pay campus incentives to full-time classroom teachers and principals under this subchapter. (b) The amount of a grant must be sufficient to enable the school district receiving the grant to pay: (1) the full amount of incentive payments to eligible campus principals under Section 21.654; and (2) the minimum amount of incentive payments to eligible classroom teachers under Section 21.655. (c) If the total amount available for campus incentives under this subchapter exceeds the total minimum amount of the grants under Subsection (b), the commissioner shall grant to each school district receiving a grant under this section an amount determined by dividing the excess under this subsection by the number of eligible classroom teachers in the state and multiplying the resulting quotient by the number of eligible classroom teachers in the school district. (d) The commissioner shall determine the amount of the grant to which each school district is entitled under this section and shall notify each participating district of the determination not later than June 1 of the fiscal year for which the determination is made. The commissioner shall remit the grant money not later than August 1 of that fiscal year. The commissioner's determination under this section is final and may not be appealed. (e) A school district may use money received under this section only to pay an incentive to a classroom teacher or principal as provided by this subchapter. Sec. 21.654. INCENTIVE PAYMENTS TO PRINCIPALS. Each eligible principal at a campus in a group described by Section 21.652(b)(1) or (2) is entitled to an incentive payment of: (1) $10,000, if the campus is in the group described by Section 21.652(b)(1); or (2) $5,000, if the campus is in the group described by Section 21.652(b)(2). Sec. 21.655. INCENTIVE PAYMENTS TO CLASSROOM TEACHERS. (a) Each eligible classroom teacher at a campus in a group described by Section 21.652(b)(1) or (2) is entitled to an incentive payment of: (1) not less than $3,000 or more than $5,000, if the campus is in the group described by Section 21.652(b)(1); or (2) not less than $1,000 or more than $2,000, if the campus is in the group described by Section 21.652(b)(2). (b) The principal at a campus in a group described by Section 21.652(b)(1) or (2) shall determine the amount of each incentive payment under this section. The principal must base the principal's determination on the recommendations of the campus-level committee established under Section 11.253. The committee's recommendations must be based on the committee's assessment of the classroom teacher's contributions towards the campus's success. (c) The determination of a principal under this section is final and may not be appealed. SECTION 2. Section 39.023(c), Education Code, is amended to read as follows: (c) The agency shall also adopt end-of-course [secondary exit-level] assessment instruments for secondary-level courses in Algebra I, Algebra II, Geometry, Biology, Chemistry, Physics, Integrated Physics and Chemistry, English I, English II, English III, World Geography, World History, and United States History [designed to be administered to students in grade 11 to assess essential knowledge and skills in mathematics, English language arts, social studies, and science. The mathematics section must include at least Algebra I and geometry with the aid of technology. The English language arts section must include at least English III and must include the assessment of essential knowledge and skills in writing. The social studies section must include early American and United States history. The science section must include at least biology and integrated chemistry and physics. The assessment instruments must be designed to assess a student's mastery of minimum skills necessary for high school graduation and readiness to enroll in an institution of higher education]. If a student is in a special education program under Subchapter A, Chapter 29, the student's admission, review, and dismissal committee shall determine whether any allowable modification is necessary in administering to the student an assessment instrument required under this subsection or whether the student should be exempted under Section 39.027(a)(2). The State Board of Education shall administer the assessment instruments. The State Board of Education shall adopt a schedule for the administration of end-of-course [secondary exit-level] assessment instruments. Each student who did not perform satisfactorily on any end-of-course [secondary exit-level] assessment instrument when initially tested shall be given multiple opportunities to retake that assessment instrument. [A student who performs at or above a level established by the Texas Higher Education Coordinating Board on the secondary exit-level assessment instruments is exempt from the requirements of Section 51.306.] SECTION 3. Section 39.025, Education Code, is amended to read as follows: Sec. 39.025. EXIT-LEVEL PERFORMANCE REQUIRED. (a) A student may not receive a high school diploma until the student has performed satisfactorily on the following end-of-course [secondary exit-level] assessment instruments for students in secondary grades [English language arts, mathematics, social studies, and science] administered under Section 39.023(c): (1) English III; (2) United States History; (3) two of the following assessment instruments: (A) Algebra I; (B) Algebra II; or (C) Geometry; (4) two of the following assessment instruments: (A) Biology; (B) Chemistry; (C) Physics; or (D) Integrated Physics and Chemistry; (5) one of the following assessment instruments: (A) English I; or (B) English II; and (6) one of the following assessment instruments: (A) World Geography; or (B) World History. [This subsection does not require a student to demonstrate readiness to enroll in an institution of higher education.] (b) Each time an end-of-course [a secondary exit-level] assessment instrument is administered, a student who has not been given a high school diploma because of a failure to perform satisfactorily on the assessment instrument for that subject area may retake the assessment instrument. (c) A student who has been denied a high school diploma under Subsections (a) and (b) and who subsequently performs satisfactorily on each necessary end-of-course [secondary exit-level] assessment instrument shall be issued a high school diploma. (d) Subsection (a) does not require a student to demonstrate readiness to enroll in an institution of higher education. (e) Each school district or school that is required to administer an end-of-course assessment instrument under Section 39.023(c) shall determine whether a student who will graduate during or before the 2008-2009 school year and who is enrolled in a class in which an end-of-course assessment instrument is administered is required to take the assessment instrument. A student who is required by the school district to take the end-of-course assessment instrument and who will graduate during or before the 2008-2009 school year is not required to perform satisfactorily on the assessment instrument to receive a high school diploma. This subsection expires September 1, 2010. (f) The agency shall notify each student who will graduate during the 2009-2010 school year after completing four years of high school of the requirement to perform satisfactorily on the end-of-course assessment instruments described by Subsection (a) in order to receive a high school diploma. This subsection expires September 1, 2010. SECTION 4. Section 42.101, Education Code, is amended to read as follows: Sec. 42.101. BASIC ALLOTMENT. For each student in average daily attendance, not including the time students spend each day in special education programs in an instructional arrangement other than mainstream or career and technology education programs, for which an additional allotment is made under Subchapter C, a district is entitled to an allotment of $2,650 [$2,537]. A greater amount for any school year may be provided by appropriation. SECTION 5. Section 42.302(a), Education Code, is amended to read as follows: (a) Each school district is guaranteed a specified amount per weighted student in state and local funds for each cent of tax effort over that required for the district's local fund assignment up to the maximum level specified in this subchapter. The amount of state support, subject only to the maximum amount under Section 42.303, is determined by the formula:
GYA = (GL X WADA X DTR X 100) - LR
where: "GYA" is the guaranteed yield amount of state funds to be allocated to the district; "GL" is the dollar amount guaranteed level of state and local funds per weighted student per cent of tax effort, which is $27.50 [$27.14] or a greater amount for any year provided by appropriation; "WADA" is the number of students in weighted average daily attendance, which is calculated by dividing the sum of the school district's allotments under Subchapters B and C, less any allotment to the district for transportation, any allotment under Section 42.158, and 50 percent of the adjustment under Section 42.102, by the basic allotment for the applicable year; "DTR" is the district enrichment tax rate of the school district, which is determined by subtracting the amounts specified by Subsection (b) from the total amount of maintenance and operations taxes collected by the school district for the applicable school year and dividing the difference by the quotient of the district's taxable value of property as determined under Subchapter M, Chapter 403, Government Code, or, if applicable, under Section 42.2521, divided by 100; and "LR" is the local revenue, which is determined by multiplying "DTR" by the quotient of the district's taxable value of property as determined under Subchapter M, Chapter 403, Government Code, or, if applicable, under Section 42.2521, divided by 100. SECTION 6. Section 42.303, Education Code, is amended to read as follows: Sec. 42.303. LIMITATION ON ENRICHMENT TAX RATE. The district enrichment tax rate ("DTR") under Section 42.302 may not exceed $0.44 [$0.64] per $100 of valuation, or a greater amount for any year provided by appropriation. SECTION 7. Section 46.003(a), Education Code, is amended to read as follows: (a) For each year, except as provided by Sections 46.005 and 46.006, a school district is guaranteed a specified amount per student in state and local funds for each cent of tax effort, up to the maximum rate under Subsection (b), to pay the principal of and interest on eligible bonds issued to construct, acquire, renovate, or improve an instructional facility. The amount of state support is determined by the formula:
FYA = (FYL X ADA X BTR X 100) - (BTR X (DPV/100))
where: "FYA" is the guaranteed facilities yield amount of state funds allocated to the district for the year; "FYL" is the dollar amount guaranteed level of state and local funds per student per cent of tax effort, which is $35.50 [$35] or a greater amount for any year provided by appropriation; "ADA" is the greater of the number of students in average daily attendance, as determined under Section 42.005, in the district or 400; "BTR" is the district's bond tax rate for the current year, which is determined by dividing the amount budgeted by the district for payment of eligible bonds by the quotient of the district's taxable value of property as determined under Subchapter M, Chapter 403, Government Code, or, if applicable, Section 42.2521, divided by 100; and "DPV" is the district's taxable value of property as determined under Subchapter M, Chapter 403, Government Code, or, if applicable, Section 42.2521. SECTION 8. Subtitle E, Title 4, Government Code, is amended by adding Chapter 466A to read as follows:
CHAPTER 466A. VIDEO LOTTERY
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 466A.001. DEFINITIONS. In this chapter: (1) "Commission" means the Texas Lottery Commission. (2) "Video lottery" means the conduct of video lottery games as authorized under this chapter. (3) "Video lottery game" means any game of chance, including a game of chance in which the outcome may be partially determined by skill or ability, that for consideration may be played by an individual on an electronic machine or video display. (4) "Video lottery retailer" means a person licensed under this chapter to conduct video lottery.
[Sections 466A.002-466A.050 reserved for expansion]
SUBCHAPTER B. ADMINISTRATION
Sec. 466A.051. POWERS AND DUTIES OF COMMISSION AND EXECUTIVE DIRECTOR. (a) The commission may conduct video lottery in accordance with this subchapter under a contract with: (1) a video lottery retailer; or (2) an Indian tribe described by Section 47(f), Article III, Texas Constitution. (b) The commission and executive director have broad authority and shall exercise strict control and close supervision over video lottery games operated in this state to promote and ensure integrity, security, honesty, and fairness in the conduct and administration of video lottery. Sec. 466A.052. RULES. The commission shall adopt all rules necessary to conduct or supervise video lottery, administer this chapter, and provide security for video lottery.
[Sections 466A.053-466A.100 reserved for expansion]
SUBCHAPTER C. LICENSE AND CONTRACT REQUIREMENTS
Sec. 466A.101. RESTRICTIONS ON VIDEO LOTTERY. (a) A person other than the commission may not conduct video lottery in this state unless the person: (1) is a video lottery retailer or an Indian tribe described by Section 47(f), Article III, Texas Constitution; and (2) operates the video lottery games on behalf of this state under a contract with the commission authorized by this chapter. (b) A person may not provide video lottery technology for use in this state unless the person holds a license to provide video lottery technology under this chapter. (c) A person licensed as a video lottery technology provider may not provide video lottery technology or equipment to any person without the consent of the commission. Sec. 466A.102. VIDEO LOTTERY RETAILER LICENSE. On application, the commission shall issue a video lottery retailer license to a pari-mutuel license holder in good standing under the Texas Racing Act (Article 179e, Vernon's Texas Civil Statutes) who: (1) holds a Class 1 or Class 2 racetrack license or is licensed to conduct greyhound races under that act; and (2) is not ineligible to hold the license under another provision of this chapter or a commission rule. Sec. 466A.103. VIDEO LOTTERY TECHNOLOGY PROVIDER LICENSE. The commission shall issue a video lottery technology provider license to an eligible person with equipment and technology the commission determines to be compatible with the commission's video lottery system to provide video lottery machines and services to video lottery retailers and Indian tribes conducting video lottery under this chapter.
[Sections 466A.104-466A.150 reserved for expansion]
SUBCHAPTER D. REVENUE
Sec. 466A.151. DIVISION OF REVENUE OF VIDEO LOTTERY RETAILER. (a) Not later than the third business day of each month, or on a later date as permitted by commission rule, a video lottery retailer shall pay to the commission 50 percent of the net terminal income derived from video lottery games operated by the retailer in the preceding month. (b) The remainder of the net terminal income shall be retained by the video lottery retailer. Sec. 466A.152. REVENUE FROM INDIAN TRIBE VIDEO LOTTERY. A contract with an Indian tribe under this chapter must provide for the commission to receive not less than 25 percent of the net terminal income derived from video lottery games operated under the contract. SECTION 9. (a) Section 23.23(a), Tax Code, is amended to read as follows: (a) The appraised value of a residence homestead for a tax year may not exceed the lesser of: (1) the market value of the property; or (2) the sum of: (A) three [10] percent of the appraised value of the property for the last year in which the property was appraised for taxation times the number of years since the property was last appraised; (B) the appraised value of the property for the last year in which the property was appraised; and (C) the market value of all new improvements to the property. (b) Section 23.23(a), Tax Code, as amended by this Act, applies only to the appraisal for ad valorem tax purposes of a residence homestead for a tax year that begins on or after January 1, 2005. SECTION 10. Section 26.04(c), Tax Code, is amended to read as follows: (c) An officer or employee designated by the governing body shall calculate the effective tax rate and the rollback tax rate for the unit, where: (1) "Effective tax rate" means a rate expressed in dollars per $100 of taxable value calculated according to the following formula: EFFECTIVE TAX RATE = (LAST YEAR'S LEVY - LOST PROPERTY LEVY) / (CURRENT TOTAL VALUE - NEW PROPERTY VALUE) ; and (2) "Rollback tax rate" means a rate expressed in dollars per $100 of taxable value calculated according to the following formula: ROLLBACK TAX RATE = (EFFECTIVE MAINTENANCE AND OPERATIONS RATE x 1.03 [1.08]) + CURRENT DEBT RATE SECTION 11. Sections 26.041(a), (b), and (c), Tax Code, are amended to read as follows: (a) In the first year in which an additional sales and use tax is required to be collected, the effective tax rate and rollback tax rate for the unit are calculated according to the following formulas: EFFECTIVE TAX RATE = [(LAST YEAR'S LEVY - LOST PROPERTY LEVY) / (CURRENT TOTAL VALUE - NEW PROPERTY VALUE)] - SALES TAX GAIN RATE and ROLLBACK RATE = (EFFECTIVE MAINTENANCE AND OPERATIONS RATE x 1.03 [1.08]) + CURRENT DEBT RATE - SALES TAX GAIN RATE where "sales tax gain rate" means a number expressed in dollars per $100 of taxable value, calculated by dividing the revenue that will be generated by the additional sales and use tax in the following year as calculated under Subsection (d) [of this section] by the current total value. (b) Except as provided by Subsections (a) and (c) [of this section], in a year in which a taxing unit imposes an additional sales and use tax the rollback tax rate for the unit is calculated according to the following formula, regardless of whether the unit levied a property tax in the preceding year: ROLLBACK RATE = [(LAST YEAR'S MAINTENANCE AND OPERATIONS EXPENSE X 1.03 [1.08]) / ([TOTAL] CURRENT TOTAL VALUE - NEW PROPERTY VALUE)] + (CURRENT DEBT RATE - SALES TAX REVENUE RATE) where "last year's maintenance and operations expense" means the amount spent for maintenance and operations from property tax and additional sales and use tax revenues in the preceding year, and "sales tax revenue rate" means a number expressed in dollars per $100 of taxable value, calculated by dividing the revenue that will be generated by the additional sales and use tax in the current year as calculated under Subsection (d) [of this section] by the current total value. (c) In a year in which a taxing unit that has been imposing an additional sales and use tax ceases to impose an additional sales and use tax the effective tax rate and rollback tax rate for the unit are calculated according to the following formulas: EFFECTIVE TAX RATE = [(LAST YEAR'S LEVY - LOST PROPERTY LEVY) / (CURRENT TOTAL VALUE - NEW PROPERTY VALUE)] + SALES TAX LOSS RATE and ROLLBACK TAX RATE = [(LAST YEAR'S MAINTENANCE AND OPERATIONS EXPENSE X 1.03 [1.08]) / ([TOTAL] CURRENT TOTAL VALUE - NEW PROPERTY VALUE)] + CURRENT DEBT RATE where "sales tax loss rate" means a number expressed in dollars per $100 of taxable value, calculated by dividing the amount of sales and use tax revenue generated in the last four quarters for which the information is available by the current total value and "last year's maintenance and operations expense" means the amount spent for maintenance and operations from property tax and additional sales and use tax revenues in the preceding year. SECTION 12. Section 151.0031, Tax Code, is amended to read as follows: Sec. 151.0031. "COMPUTER PROGRAM." "Computer program" means a series of instructions that are coded for acceptance or use by a computer system and that are designed to permit the computer system to process data and provide results and information. The series of instructions may be contained in or on magnetic tapes, punched cards, printed instructions, or other tangible or electronic media. For purposes of this chapter, the term includes a computer program created or developed exclusively for a client who retains all rights to the program. SECTION 13. Section 151.0101(a), Tax Code, is amended to read as follows: (a) "Taxable services" means: (1) amusement services; (2) cable television services; (3) personal services; (4) motor vehicle parking and storage services; (5) the repair, remodeling, maintenance, and restoration of tangible personal property, except: (A) aircraft; (B) a ship, boat, or other vessel, other than: (i) a taxable boat or motor as defined by Section 160.001; (ii) a sports fishing boat; or (iii) any other vessel used for pleasure; and (C) the repair, maintenance, and restoration of a motor vehicle; [and [(D) the repair, maintenance, creation, and restoration of a computer program, including its development and modification, not sold by the person performing the repair, maintenance, creation, or restoration service;] (6) telecommunications services; (7) credit reporting services; (8) debt collection services; (9) insurance services; (10) information services; (11) real property services; (12) data processing services; (13) real property repair and remodeling; (14) security services; (15) telephone answering services; (16) Internet access service; and (17) a sale by a transmission and distribution utility, as defined in Section 31.002, Utilities Code, of transmission or delivery of service directly to an electricity end-use customer whose consumption of electricity is subject to taxation under this chapter. SECTION 14. Section 154.021(b), Tax Code, is amended to read as follows: (b) The tax rates are: (1) $70.50 [$20.50] per thousand on cigarettes weighing three pounds or less per thousand; and (2) the rate provided by Subdivision (1) plus $2.10 per thousand on cigarettes weighing more than three pounds per thousand. SECTION 15. Section 154.603, Tax Code, is amended to read as follows: Sec. 154.603. DISPOSITION OF REVENUE. (a) After the deductions for the purposes provided by Section 154.602 [of this code], the revenue remaining of the first $2 of tax received per 1,000 cigarettes for cigarettes weighing three pounds or less per thousand and the first $4.10 per 1,000 cigarettes of the tax received for cigarettes weighing more than three pounds per thousand is allocated: (1) 18.75 percent to the foundation school fund; and (2) 81.25 percent to the general revenue fund. (b) The revenue remaining after the deductions for the purposes provided by Section 154.602 [of this code] and allocation under Subsection (a) of the next $18.50 of tax received per 1,000 cigarettes for cigarettes weighing three pounds or less per thousand and the next $18.50 per 1,000 cigarettes of the tax received for cigarettes weighing more than three pounds per thousand [this section] is allocated to the general revenue fund. (c) The revenue remaining after the deductions for the purposes provided by Section 154.602 and allocation under Subsections (a) and (b) shall be deposited to the credit of the foundation school fund. SECTION 16. (a) The following provisions of the Education Code are repealed: (1) Chapter 41; (2) Subchapter H, Chapter 21; and (3) Section 4.003. (b) Article 3.50-8, Insurance Code, as amended by Chapter 313, Acts of the 78th Legislature, Regular Session, 2003, is repealed. (c) Chapter 171, Tax Code, is repealed. (d) Section 49.236, Water Code, as added by Chapter 248, Acts of the 78th Legislature, Regular Session, 2003, and Section 49.236, Water Code, as added by Chapter 335, Acts of the 78th Legislature, Regular Session, 2003, are repealed. (e) Section 49.107(g), Water Code, is repealed. SECTION 17. (a) Chapter 171, Tax Code, and Subtitle B, Title 2, Tax Code, continue to apply to audits, deficiencies, redeterminations, and refunds of any tax due or collected under that chapter until barred by limitations. (b) The repeal of Chapter 171, Tax Code, by this Act does not affect: (1) the status of a corporation that has had its corporate privileges, certificate of authority, or corporate charter revoked, a suit filed against it, or a receiver appointed under Subchapter F, G, or H of that chapter; (2) the ability of the comptroller, secretary of state, or attorney general to take action against a corporation under those subchapters for actions that took place before the repeal; or (3) the right of a corporation to contest a forfeiture, revocation, lawsuit, or appointment of a receiver under those subchapters. SECTION 18. This Act takes effect January 1, 2005, but only if the constitutional amendment proposed by __.J.R. No. ___, 78th Legislature, 4th Called Session, 2004, is approved by the voters. If that amendment is not approved by the voters, this Act has no effect.