78S40057 KKA/CBH/DAK-D
By: Griggs H.B. No. 14
A BILL TO BE ENTITLED
AN ACT
relating to public school finance, a voluntary personal income tax,
and other sources of revenue.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
ARTICLE 1. PUBLIC SCHOOL FINANCE
SECTION 1.01. Section 42.002(a), Education Code, is amended
to read as follows:
[(a)] The purposes of the Foundation School Program set
forth in this chapter are to guarantee that each school district in
the state has:
(1) adequate resources to provide each eligible
student an exemplary [a basic] instructional program [and
facilities] suitable to the student's educational needs; and
(2) access to resources [a substantially equalized
program of financing] in excess of the [basic] costs of an exemplary
instructional program [for certain services], as provided by this
chapter.
SECTION 1.02. Subchapter A, Chapter 42, Education Code, is
amended by adding Section 42.0051 to read as follows:
Sec. 42.0051. WEIGHTED AVERAGE DAILY ATTENDANCE. In this
chapter, the number of students in weighted average daily
attendance is calculated by dividing the sum of a 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.
SECTION 1.03. Sections 42.007(c) and (d), Education Code,
are amended to read as follows:
(c) The funding elements must include:
(1) a basic allotment for the purposes of Section
42.101 [that, when combined with the guaranteed yield component
provided by Subchapter F, represents the cost per student of a
regular education program that meets all mandates of law and
regulation];
(2) adjustments designed to reflect the variation in
known resource costs and costs of education beyond the control of
school districts; and
(3) appropriate program cost differentials and other
funding elements for the programs authorized under Subchapter C,
with the program funding level expressed as dollar amounts and as
weights applied to the adjusted basic allotment for the appropriate
year[;
[(4) the maximum guaranteed level of qualified state
and local funds per student for the purposes of Subchapter F;
[(5) the enrichment and facilities tax rate under
Subchapter F;
[(6) the computation of students in weighted average
daily attendance under Section 42.302; and
[(7) the amount to be appropriated for the school
facilities assistance program under Chapter 46].
(d) The board shall conduct a study on the funding elements
each biennium, as appropriate. [The study must include a
determination of the projected cost to the state in the next state
fiscal biennium of ensuring the ability of each school district to
maintain existing programs without increasing property tax rates.]
SECTION 1.04. 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 in an amount determined [of
$2,537. A greater amount for any school year may be provided] by
appropriation. The commissioner shall adjust the amount as
appropriate to:
(1) reflect the findings of any biennial state study
of the cost of providing an adequate education to students in this
state; and
(2) address costs beyond the control of the district
and not otherwise addressed by this code.
SECTION 1.05. Section 42.158(g), Education Code, is amended
to read as follows:
(g) In this section, "instructional facility" means an
improvement to real property that is used predominantly for
teaching the curriculum required under Section 28.002 [has the
meaning assigned by Section 46.001].
SECTION 1.06. Section 42.251, Education Code, is amended to
read as follows:
Sec. 42.251. FINANCING; GENERAL RULE. (a) The sum of the
basic allotment under Subchapter B and the special allotments under
Subchapter C, computed in accordance with this chapter, constitute
the exemplary program [tier one] allotments. The sum of the
exemplary program [tier one] allotments and the enrichment amounts
[guaranteed yield allotments] under Subchapter F, computed in
accordance with this chapter, constitute the total cost of the
Foundation School Program. State funding of exemplary program
allotments, as provided by Subsection (c), provides for an
equalized exemplary education for all public school students in
this state.
(b) The program shall be financed by:
(1) ad valorem tax revenue generated by a [an
equalized] uniform school district effort;
(2) ad valorem tax revenue generated by local school
district effort in excess of the [equalized] uniform school
district effort;
(3) state available school funds distributed in
accordance with law; [and]
(4) state funds appropriated for the purposes of
public school education and allocated to each district in
accordance with this chapter;
(5) revenue generated by cigarette and tobacco taxes
in accordance with Chapters 154 and 155, Tax Code;
(6) revenue generated by an expanded sales and use tax
in accordance with Section 151.0511, Tax Code; and
(7) revenue generated by a voluntary personal income
tax in accordance with Chapter 261, Tax Code [an amount sufficient
to finance the cost of each district's Foundation School Program
not covered by other funds specified in this subsection].
(c) The state shall provide each district with state revenue
sufficient to pay at least 50 percent of the total amount of
exemplary program allotments to which the district is entitled.
(d) Notwithstanding any other provision of this chapter, a
school district is entitled to the amount of state revenue needed to
maintain state and local revenue in an amount equal to state and
local revenue per weighted student for maintenance and operation of
the district for the 2004-2005 school year less the district's
current year distribution per weighted student from the available
school fund, other than amounts distributed under Chapter 31, if
the district imposes an effective tax rate for maintenance and
operation of the district at least equal to the district's tax rate
for the 2004-2005 school year. This subsection expires September
1, 2006.
SECTION 1.07. The heading to Section 42.252, Education
Code, is amended to read as follows:
Sec. 42.252. LOCAL SHARE OF PROGRAM COST [(TIER ONE)].
SECTION 1.08. Section 42.252, Education Code, is amended by
amending Subsections (a) and (d) and adding Subsection (e) to read
as follows:
(a) Each school district's share of the Foundation School
Program is determined by the following formula:
LS [LFA] = TR X DPV
where:
"LS" ["LFA"] is the school district's local share;
"TR" is a tax rate which for each hundred dollars of valuation
is an effective tax rate of $1.45 or the rate specified by
Subsection (e) [$0.86]; and
"DPV" is the taxable value of property in the school district
for the preceding tax year determined under Subchapter M, Chapter
403, Government Code.
(d) A school district must raise its total local share of
the Foundation School Program [to be eligible to receive foundation
school fund payments]. Any portion of a district's total local
share that exceeds 50 percent of the total amount of the exemplary
program allotments to which the district is entitled is considered
state revenue and shall be remitted to the comptroller for
equalization purposes in accordance with rules adopted by the
commissioner.
(e) Notwithstanding the tax rate specified by Subsection
(a), a school district's local share for the 2006-2007 school year
is computed using a tax rate that results in an effective tax rate
of $1.435. In each subsequent school year, a district's local share
is computed using a tax rate that results in an effective tax rate
that is $0.015 less than the effective tax rate required under this
section for the preceding school year. Beginning with the
2015-2016 school year, a district's local share is computed using a
tax rate that results in an effective tax rate of $1.30.
SECTION 1.09. Section 42.2521(a), Education Code, is
amended to read as follows:
(a) For purposes of [Chapters 41 and 46 and] this chapter,
and to the extent money specifically authorized to be used under
this section is available, the commissioner shall adjust the
taxable value of property in a school district that, due to factors
beyond the control of the board of trustees, experiences a rapid
decline in the tax base used in calculating taxable values in excess
of four percent of the tax base used in the preceding year.
SECTION 1.10. Sections 42.253(a), (c), and (h), Education
Code, are amended to read as follows:
(a) For each school year the commissioner shall determine:
(1) the amount of money to which a school district is
entitled under Subchapters B and C;
(2) the amount of money to which a school district is
entitled or awarded under Subchapter F;
(3) the amount of money allocated to the district from
the available school fund; and
(4) the amount of each district's [tier one] local
share under Section 42.252[; and
[(5) the amount of each district's tier two local share
under Section 42.302].
(c) Each school district is entitled to an amount necessary
to ensure that the district has state and local revenue sufficient
to pay the costs of an exemplary education for each student in
weighted average daily attendance [equal to the difference for that
district between the sum of Subsections (a)(1) and (a)(2) and the
sum of Subsections (a)(3), (a)(4), and (a)(5)]. Each school
district is also entitled to an amount equal to 50 percent of the
revenues raised by the district through an enrichment tax imposed
by the district under Subchapter F.
(h) If the amount appropriated for purposes of the
Foundation School Program is less than the amount to which school
districts are entitled for the second year of a state fiscal
biennium, the commissioner shall certify the amount of the
difference to the Legislative Budget Board not later than January 1
of the second year of the state fiscal biennium. The Legislative
Budget Board shall propose to the legislature that the certified
amount be transferred to the foundation school fund from the
economic stabilization fund and appropriated for the purpose of
increases in allocations under this subsection. If the legislature
fails during the regular session to enact the transfer and
appropriation proposed under this subsection [Subsection (f) and
there are not funds available under Subsection (j)], the
commissioner shall reduce the total amount of state funds allocated
to each district proportionately [by an amount determined by a
method under which the application of the same number of cents of
increase in tax rate in all districts applied to the taxable value
of property of each district, as determined under Subchapter M,
Chapter 403, Government Code, results in a total levy equal to the
total reduction]. The following fiscal year, a district's
entitlement under this section is increased by an amount equal to
the reduction made under this subsection.
SECTION 1.11. Sections 42.2531(a), (b), and (c), Education
Code, are amended to read as follows:
(a) The commissioner may make adjustments to amounts due to
a school district under this chapter [or Chapter 46, or to amounts
necessary for a district to comply with the requirements of Chapter
41,] as provided by this section.
(b) A school district that has a major taxpayer, as
determined by the commissioner, that because of a protest of the
valuation of the taxpayer's property fails to pay all or a portion
of the ad valorem taxes due to the district may apply to the
commissioner to have the district's taxable value of property or ad
valorem tax collections adjusted for purposes of this chapter [or
Chapter 41 or 46]. The commissioner may make the adjustment only to
the extent the commissioner determines that making the adjustment
will not:
(1) in the fiscal year in which the adjustment is made,
cause the amount to which school districts are entitled under this
chapter to exceed the amount appropriated for purposes of the
Foundation School Program for that year; and
(2) if the adjustment is made in the first year of a
state fiscal biennium, cause the amount to which school districts
are entitled under this chapter for the second year of the biennium
to exceed the amount appropriated for purposes of the Foundation
School Program for that year.
(c) The commissioner shall recover the benefit of any
adjustment made under this section by making offsetting adjustments
in the school district's taxable value of property or ad valorem tax
collections for purposes of this chapter [or Chapter 41 or 46] on a
final determination of the taxable value of property that was the
basis of the original adjustment, or in the second school year
following the year in which the adjustment is made, whichever is
earlier.
SECTION 1.12. The heading to Subchapter F, Chapter 42,
Education Code, is amended to read as follows:
SUBCHAPTER F. ENRICHMENT [GUARANTEED YIELD] PROGRAM
SECTION 1.13. Section 42.301, Education Code, is amended to
read as follows:
Sec. 42.301. PURPOSE. The purpose of the enrichment
[guaranteed yield] component of the Foundation School Program is to
provide each school district with the opportunity to [provide the
basic program and to] supplement the exemplary [that] program at a
level of its own choice. [An allotment under this subchapter may be
used for any legal purpose other than capital outlay or debt
service.]
SECTION 1.14. The heading to Section 42.302, Education
Code, is amended to read as follows:
Sec. 42.302. ENRICHMENT TAX [ALLOTMENT].
SECTION 1.15. Sections 42.302(a) and (b), Education Code,
are amended to read as follows:
(a) In addition to the [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 a school [the]
district's local share under Section 42.252, each school district
may impose an additional ad valorem tax [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
$27.14 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.]
(b) Fifty percent of any amount collected by a school
district through an enrichment tax imposed under this subchapter is
considered state revenue and must be remitted to the comptroller
for equalization purposes in accordance with rules adopted by the
commissioner. [In computing the district enrichment tax rate of a
school district, the total amount of maintenance and operations
taxes collected by the school district does not include the amount
of:
[(1) the district's local fund assignment under
Section 42.252; or
[(2) taxes paid into a tax increment fund under
Chapter 311, Tax Code.]
SECTION 1.16. Section 42.303, Education Code, is amended to
read as follows:
Sec. 42.303. LIMITATION ON ENRICHMENT TAX RATE. (a) The
district enrichment tax rate [("DTR")] under Section 42.302 may not
exceed $0.05 [$0.64] per $100 of valuation, or the [a greater]
amount specified by Subsection (b) [for any year provided by
appropriation].
(b) Notwithstanding Subsection (a), the district enrichment
tax rate for the 2006-2007 school year may not exceed $0.065 per
$100 of valuation. In each subsequent school year, the district
enrichment tax rate may not exceed an amount that is $0.015 more
than the enrichment tax rate imposed by the district for the
preceding school year, provided that the rate may never exceed
$0.20 per $100 of valuation.
SECTION 1.17. Section 42.304, Education Code, is amended to
read as follows:
Sec. 42.304. STATE ENRICHMENT GRANTS [COMPUTATION OF AID
FOR DISTRICT ON MILITARY RESERVATION OR AT STATE SCHOOL]. (a) The
commissioner shall use state revenue made available through the
enrichment tax authorized by this subchapter to award grants to
school districts to supplement the enrichment component of the
Foundation School Program [State assistance under this subchapter
for a school district located on a federal military installation or
at Moody State School is computed using the average tax rate and
property value per student of school districts in the county, as
determined by the commissioner].
(b) In awarding grants, the commissioner shall:
(1) rank school districts by wealth per student and
award grants beginning with the district with the lowest wealth per
student;
(2) distribute all available grant funds; and
(3) award grants in amounts so that each district
receiving a grant has an equal total amount of local and state
enrichment revenue per weighted student per cent of enrichment tax
effort under Section 42.302(a).
(c) The imposition of a tax under Section 42.302(a) does not
entitle a school district to a grant under this section.
(d) In this section, "wealth per student" means a school
district's taxable value of property as determined under Subchapter
M, Chapter 403, Government Code, or, if applicable, Section
42.2521, divided by the district's weighted average daily
attendance as determined under Section 42.0051.
SECTION 1.18. Sections 45.003(a) and (d), Education Code,
are amended to read as follows:
(a) Bonds described by Section 45.001 may not be issued and
taxes described by Section 45.001 or 45.002, other than a tax
required for a school district's local share under Section 42.252,
may not be levied unless authorized by a majority of the qualified
voters of the district, voting at an election held for that purpose,
at the expense of the district, in accordance with the Election
Code, except as provided by this section. Each election must be
called by resolution or order of the governing board or
commissioners court. The resolution or order must state the date of
the election, the proposition or propositions to be submitted and
voted on, the polling place or places, and any other matters
considered necessary or advisable by the governing board or
commissioners court.
(d) A proposition submitted to authorize the levy of
maintenance taxes must include the question of whether the
governing board or commissioners court may levy, assess, and
collect annual ad valorem taxes for the further maintenance of
public schools[,] at a rate not to exceed the rate[, which may be
not more than $1.50 on the $100 valuation of taxable property in the
district,] stated in the proposition, which may not exceed the sum
of the rate required by Section 42.252 and the maximum rate
authorized by Section 42.303.
ARTICLE 2. SALES AND USE TAXES
SECTION 2.01. Section 151.051(b), Tax Code, is amended to
read as follows:
(b) Subject to adjustment as provided by Section 151.0511,
the [The] sales tax rate is 6-1/4 percent of the sales price of the
taxable item sold.
SECTION 2.02. Subchapter C, Tax Code, is amended by adding
Section 151.0511 to read as follows:
Sec. 151.0511. TEMPORARY INCREASE IN RATE TO FUND STATE'S
SHARE OF EXEMPLARY PROGRAM. (a) The comptroller, in cooperation
with the commissioner of education, shall determine whether
legislatively mandated reductions in the property tax rates that
school districts may impose will result in the state having
insufficient revenue to provide each district with at least 50
percent of the total amount of exemplary program allotments to
which the district is entitled under Chapter 42, Education Code,
for a school year.
(b) If the comptroller determines that state revenue is
insufficient for the purpose described in Subsection (a) for a
school year, the comptroller shall by rule adopt an increase in the
rate of the sales tax for a period necessary to raise additional
state revenue equal to the amount of the insufficiency determined
under Subsection (a).
(c) On adoption of the rule under Subsection (b), the rate
of the sales tax is increased as provided by the rule for the time
provided in the rule unless:
(1) the legislature enacts a bill that provides
otherwise and that bill becomes law; or
(2) the comptroller certifies that enough additional
state revenue has been raised to provide each district with at least
50 percent of the total amount of exemplary program allotments to
which the district is entitled under Chapter 42, Education Code,
for a school year.
ARTICLE 3. CIGARETTE AND TOBACCO TAXES
SECTION 3.01. 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 3.02. 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 as follows:
(1) the next 50 cents of tax received per 1,000
cigarettes weighing three pounds or less per thousand and the next
50 cents per 1,000 cigarettes of the tax received for cigarettes
weighing more than three pounds per thousand shall be deposited to
the credit of the tobacco cessation account in the general revenue
fund and may be appropriated only to the Texas Department of Health
to provide grants to one or more national nonprofit organizations
for programs to reduce the use of cigarettes and tobacco products in
this state; and
(2) the remaining revenue shall be deposited to the
foundation school fund.
SECTION 3.03. Section 155.021(b), Tax Code, is amended to
read as follows:
(b) The tax rates are:
(1) 3.44 cents [one cent] per 10 or fraction of 10 on
cigars weighing three pounds or less per thousand;
(2) $25.80 [$7.50] per thousand on cigars that:
(A) weigh more than three pounds per thousand;
and
(B) sell at factory list price, exclusive of any
trade discount, special discount, or deal, for 3.3 cents or less
each;
(3) $37.84 [$11] per thousand on cigars that:
(A) weigh more than three pounds per thousand;
(B) sell at factory list price, exclusive of any
trade discount, special discount, or deal, for more than 3.3 cents
each; and
(C) contain no substantial amount of nontobacco
ingredients; and
(4) $51.60 [$15] per thousand on cigars that:
(A) weigh more than three pounds per thousand;
(B) sell at factory list price, exclusive of any
trade discount, special discount, or deal, for more than 3.3 cents
each; and
(C) contain a substantial amount of nontobacco
ingredients.
SECTION 3.04. Section 155.0211(b), Tax Code, is amended to
read as follows:
(b) The tax rate for tobacco products other than cigars is
121 [35.213] percent of the manufacturer's list price, exclusive of
any trade discount, special discount, or deal.
SECTION 3.05. Section 155.241, Tax Code, is amended to read
as follows:
Sec. 155.241. ALLOCATION OF TAX. (a) Revenue collected
under this chapter at the following rates shall be deposited to the
credit of the general revenue fund:
(1) the revenue from the first one cent per 10 or
fraction of 10 on cigars weighing three pounds or less per thousand;
(2) the revenue from the first $7.50 per thousand on
cigars that:
(A) weigh more than three pounds per thousand;
and
(B) sell at factory list price, exclusive of any
trade discount, special discount, or deal, for 3.3 cents or less
each;
(3) the revenue from the first $11 per thousand on
cigars that:
(A) weigh more than three pounds per thousand;
(B) sell at factory list price, exclusive of any
trade discount, special discount, or deal, for more than 3.3 cents
each; and
(C) contain no substantial amount of nontobacco
ingredients;
(4) the revenue from the first $15 per thousand on
cigars that:
(A) weigh more than three pounds per thousand;
(B) sell at factory list price, exclusive of any
trade discount, special discount, or deal, for more than 3.3 cents
each; and
(C) contain a substantial amount of nontobacco
ingredients; and
(5) the revenue from the tax on tobacco products other
than cigars imposed at the rate of 35.213 percent of the
manufacturer's list price, exclusive of any trade discount, special
discount, or deal.
(b) The revenue remaining after the allocation under
Subsection (a) shall be deposited to the credit of the foundation school fund.
ARTICLE 4. INCOME TAX ALTERNATIVE
SECTION 4.01. Title 2, Tax Code, is amended by adding
Subtitle L to read as follows:
SUBTITLE L. PERSONAL INCOME TAX ALTERNATIVE
CHAPTER 261. PERSONAL INCOME TAX ALTERNATIVE
SUBCHAPTER A. PERSONAL INCOME TAX ELECTION
Sec. 261.001. TAX IMPOSED. (a) An individual who is a
resident of this state may elect to pay a tax on the resident's
taxable income and receive a refund of the sales and use taxes the
individual is imputed to have paid under Chapter 151 as provided by
Section 151.433.
(b) An individual who is a nonresident of this state may
elect to pay a tax on the nonresident's taxable income derived from
sources in this state and receive a refund of the sales and use
taxes the individual is imputed to have paid under Chapter 151 as
provided by Section 151.433.
(c) The tax rate is 2.5 percent of the individual's taxable
income.
Sec. 261.002. JOINT RETURN. If a husband and wife file a
joint return, the tax imposed by Section 261.001 is twice the tax
that would be imposed if the taxable income were divided by two.
Sec. 261.003. MEANING OF TERMS. (a) In this chapter:
(1) an individual is a resident of this state if the
individual:
(A) is domiciled in this state, unless the
individual does not maintain a permanent place of abode in this
state and does maintain a permanent place of abode elsewhere and
spends, in the aggregate, not more than 30 days of the tax year in
this state; or
(B) is not domiciled in this state but maintains
a permanent place of abode in this state and spends, in the
aggregate, more than 183 days of the tax year in this state; and
(2) an individual is a nonresident of this state if the
individual is not a resident of this state.
(b) Any term used in this chapter and not defined by or for
purposes of this chapter has the same meaning as when used in a
comparable context in the laws of the United States relating to
federal income taxes, unless a different meaning is clearly
required. Any reference in this chapter to federal law means the
provisions of the Internal Revenue Code of 1986 in effect on
December 31, 2004, and other provisions of federal laws relating to
federal income taxes in effect on December 31, 2004.
[Sections 261.004-261.050 reserved for expansion]
SUBCHAPTER B. COMPUTATION OF TAXABLE INCOME
Sec. 261.051. RESIDENT INDIVIDUALS: TAXABLE INCOME. The
taxable income of a resident of this state who elects to pay the tax
imposed by this chapter is the resident's federal adjusted gross
income as defined by federal law.
Sec. 261.052. CREDIT FOR INCOME TAX PAID TO ANOTHER STATE.
(a) A resident individual is allowed a credit against the tax
otherwise due under this chapter for the amount of any income tax
imposed on the individual for the tax year by another state of the
United States on income that is derived from sources in that state
and that is subject to tax under this chapter.
(b) The credit provided by this section may not exceed the
proportion of the tax otherwise due under this chapter that the
amount of the taxpayer's adjusted gross income derived from sources
in the other taxing jurisdiction bears to the taxpayer's entire
adjusted gross income as modified by this subchapter.
Sec. 261.053. DUAL RESIDENCE; REDUCTION OF TAX. If a
taxpayer is a resident of this state and is regarded as a resident
of another jurisdiction for purposes of personal income taxation,
the comptroller shall reduce the tax on that portion of the
taxpayer's income that is subject to tax in both jurisdictions
solely by virtue of dual residence. The reduction shall be in an
amount equal to that portion of the lower of the two taxes
applicable to the income taxed twice that the tax imposed by this
state bears to the combined taxes of the two jurisdictions on the
income taxed twice.
Sec. 261.054. NONRESIDENT INDIVIDUALS: TAXABLE INCOME.
The taxable income of a nonresident individual who elects to pay the
tax imposed by this chapter is that part of the individual's federal
adjusted gross income derived from sources in this state determined
under Section 261.056.
Sec. 261.055. HUSBAND AND WIFE--NONRESIDENT. (a) If the
federal taxable income of a husband and wife, both of whom are
nonresidents of this state, is determined on separate federal
returns, their taxable incomes in this state shall be separately
determined.
(b) If the federal taxable income of a husband and wife,
both of whom are nonresidents, is determined on a joint federal
return, their tax shall be determined in this state on their
combined taxable income.
(c) If one spouse is a nonresident and the other a resident,
separate taxes shall be determined on their separate taxable
incomes in this state on forms prescribed by the comptroller unless
both elect to determine their combined taxable income in this state
as if both were residents. If a husband and wife file a joint
federal income tax return but determine their taxable income in
this state separately, they must compute their taxable incomes in
this state as if their federal adjusted gross incomes had been
determined separately.
Sec. 261.056. ADJUSTED GROSS INCOME FROM SOURCES IN THIS
STATE--NONRESIDENT. (a) The adjusted gross income of a
nonresident derived from sources in this state is the net amount of
items of income, gain, loss, and deduction entering into the
nonresident's federal adjusted gross income that are derived from
or connected with sources in this state, including:
(1) the nonresident's distributive share of
partnership income and deductions determined under Section
261.203; and
(2) the nonresident's share of estate or trust income
and deductions derived from sources in this state.
(b) Items of income, gain, loss, and deduction derived from
or connected with sources in this state are those items
attributable to:
(1) the ownership or disposition of an interest in
real or tangible personal property in this state; and
(2) a business, trade, profession, or occupation
conducted in this state.
(c) Income from intangible personal property, including
annuities, dividends, interest, and gains from the disposition of
intangible personal property, constitutes income derived from
sources in this state only to the extent that the income is from
property used in a business, trade, profession, or occupation
carried on in this state.
(d) Deductions for capital losses, net long-term capital
gains, and net operating losses derived from or connected with
sources in this state, are determined in the same manner as the
corresponding federal deductions. However, the extent to which the
deductions are derived from or connected with sources in this state
is determined under the comptroller's rules.
(e) For a nonresident individual who is a shareholder of a
corporation that is an electing small business corporation for
federal income tax purposes, the undistributed taxable income of
the corporation does not constitute income derived from sources in
this state and a net operating loss of the corporation does not
constitute a loss or deduction connected with sources in this
state.
(f) If a business, trade, profession, or occupation is
carried on partly in and partly outside this state, the items of
income and deduction derived from or connected with sources in this
state are determined by apportionment and allocation consistent
with Chapter 141 under the comptroller's rules.
(g) Compensation paid by the United States for service in
the armed forces of the United States performed by a nonresident is
not income derived from sources in this state.
[Sections 261.057-261.100 reserved for expansion]
SUBCHAPTER C. ACCOUNTING PERIODS AND METHODS
Sec. 261.101. PERIOD FOR COMPUTATION OF TAXABLE INCOME.
(a) For purposes of the tax imposed by this chapter, a taxpayer's
tax year is the same as the taxpayer's tax year for federal income
tax purposes.
(b) If a taxpayer's tax year is changed for federal income
tax purposes, the taxpayer's tax year for purposes of the tax
imposed by this chapter shall be similarly changed.
Sec. 261.102. METHODS OF ACCOUNTING. (a) A taxpayer's
method of accounting is the same as the taxpayer's method of
accounting for federal income tax purposes.
(b) If a taxpayer's method of accounting is changed for
federal income tax purposes, the taxpayer's method of accounting
for purposes of this chapter is changed in the same manner.
[Sections 261.103-261.200 reserved for expansion]
SUBCHAPTER D. PARTNERS AND PARTNERSHIPS
Sec. 261.201. ENTITY NOT TAXABLE. A partnership as an
entity is not subject to the tax imposed by this chapter.
Individuals carrying on business as partners are liable for the tax
imposed by this chapter only in their separate or individual
capacities.
Sec. 261.202. RESIDENT PARTNER--ADJUSTED GROSS INCOME. (a)
Partnership income, gain, loss, or deduction shall be allocated in
accordance with each partner's distributive share for federal
income tax purposes.
(b) Each item of partnership income, gain, loss, or
deduction has the same character for a partner under this chapter as
it has for federal income tax purposes. If an item is not
characterized for federal income tax purposes, it has the same
character for a partner as if realized directly from the source from
which realized by the partnership or incurred in the same manner as
incurred by the partnership.
Sec. 261.203. NONRESIDENT PARTNER--ADJUSTED GROSS INCOME
FROM SOURCES IN THIS STATE. (a) In determining the adjusted gross
income of a nonresident partner of any partnership, there shall be
included only that part derived from or connected with sources in
this state of the partner's distributive share of items of
partnership income, gain, loss, and deduction entering into the
partner's federal adjusted gross income, as that part is determined
under rules adopted by the comptroller and consistent with the
rules under Section 261.056.
(b) Except as authorized in Subsection (c), in determining
the sources of a nonresident partner's income, no effect is given to
a provision in the partnership agreement that:
(1) characterizes payments to the partner as being for
services or for the use of capital, or allocates to the partner, as
income or gain from sources outside this state, a greater
proportion of the partner's distributive share of partnership
income or gain than the ratio of partnership income or gain from
sources outside this state to partnership income or gain from all
sources; or
(2) allocates to the partner a greater proportion of a
partnership item of loss or deduction connected with sources in
this state than the partner's proportionate share, for federal
income tax purposes, of partnership loss or deduction generally.
(c) The comptroller may, on application, authorize the use
of other methods of determining a nonresident partner's portion of
partnership items derived from or connected with sources in this
state, and the modifications related to it, that are appropriate
and equitable, on terms and conditions the comptroller may require.
(d) A nonresident partner's distributive share of items of
income, gain, loss, or deduction is determined under Section
261.202(a). The character of partnership items for a nonresident
partner is determined under Section 261.202(b).
[Sections 261.204-261.300 reserved for expansion]
SUBCHAPTER E. TAX RETURNS AND PAYMENTS
Sec. 261.301. PERSONS REQUIRED TO MAKE RETURNS OF INCOME.
(a) A state income tax return shall be made by every individual who
elects to pay the tax imposed by this chapter.
(b) The comptroller by rule shall prescribe the form of the
return. The return must include a statement that by filing the
return and paying the tax the individual has automatically applied
for a refund of sales and use taxes under Section 151.433.
Sec. 261.302. JOINT RETURNS BY HUSBAND AND WIFE. (a) A
husband and wife who elect to pay the tax imposed by this chapter
may make a joint state income tax return even though one of the
spouses has no gross income or deductions except that:
(1) a joint return may not be made if the spouses are
not permitted to file a joint federal income tax return;
(2) if the federal income tax liability of either
spouse is determined on a separate federal return, their income tax
liabilities under this chapter must be determined on separate
returns;
(3) if the federal income tax liabilities of husband
and wife, other than a husband and wife described in Subsection (b),
are determined on a joint federal return, the husband and wife must
file a joint return under this chapter, and their tax liabilities
are joint and severable; and
(4) if neither spouse is required to file a federal
income tax return and either or both elect to file an income tax
return under this chapter, they may elect to file separate returns
or a joint return, and, according to their election, their
liabilities are separate or joint and severable.
(b) If either husband or wife is a resident and the other is
a nonresident, they must file on forms required by the comptroller
separate income tax returns in this state if either spouse has
income that is not community property, and in that case their tax
liabilities are separate; but they may elect to determine their
joint taxable income as if both were residents, and in that case
their liabilities are joint and severable.
Sec. 261.303. RETURNS BY FIDUCIARIES. (a) An income tax
return for a deceased individual must be made and filed by the
executor, administrator, or other person charged with the care of
the property of the decedent. A final return of a decedent is due
when it would have been due if the decedent had not died.
(b) An income tax return for an individual who is unable to
make a return because of minority or other disability must be made
and filed by the individual's duly authorized agent, guardian,
conservator, fiduciary, or other person charged with the care of
the individual or the individual's property other than a receiver
in possession of only a part of the individual's property.
(c) If two or more fiduciaries are acting jointly, the
return may be made by any one of them.
Sec. 261.304. NOTICE OF QUALIFICATION AS RECEIVER. A
receiver, trustee in bankruptcy, assignee for benefit of creditors,
or other similar fiduciary must give notice of the person's
qualification to the comptroller, as may be required by rule.
Sec. 261.305. CHANGE OF STATUS AS RESIDENT OR NONRESIDENT
DURING YEAR. (a) If the status of an individual changes during the
individual's tax year from resident to nonresident or from
nonresident to resident, the comptroller by rule may require the
individual to file one return for the portion of the year during
which the individual is a resident and one for the portion of the
year during which the individual is a nonresident.
(b) Except as provided by Subsection (c), the taxable income
of an individual is determined as provided by Section 261.051 for
residents and Section 261.054 for nonresidents as if the
individual's tax year for federal income tax purposes were limited
to the period of the individual's resident and nonresident status
respectively.
(c) There shall be included in determining taxable income
from sources in or outside this state, as the case may be, income,
gain, loss, or deduction accrued prior to the change of status even
though not otherwise includable or allowable in respect to the
period before the change, but the taxation or deduction of items
accrued before the change of status is not affected by the change.
(d) If two returns are required to be filed under this
section, the total of the taxes due may not be less than would be due
if the total of the taxable incomes reported on the two returns were
includable in one return.
Sec. 261.306. TIME AND PLACE FOR FILING RETURNS AND PAYING
TAX. An individual who elects to pay the tax under this chapter
must file a tax return and pay the tax not earlier than April 15 or
later than December 31 following the end of the taxpayer's tax year.
The comptroller by rule shall prescribe the place for filing a
return, statement, or other document required by this chapter and
for the payment of a tax.
Sec. 261.307. ESTIMATED TAX OR PAYMENT IN INSTALLMENTS.
(a) An individual subject to the income tax imposed by this chapter
may make estimated prepayments of the tax or prepay the tax in
installments.
(b) The comptroller shall adopt rules for the
administration of this section.
(c) Prepayment of the estimated tax or an installment is
considered payment on account of the tax imposed by this chapter.
Sec. 261.308. CHANGE OF ELECTION. An election expressly
authorized by this chapter may be changed as authorized by the
comptroller or by the comptroller's rule.
Sec. 261.309. SIGNING OF RETURNS AND OTHER DOCUMENTS. (a)
A return, statement, or other document required to be made or filed
under this chapter must be signed as provided by the comptroller.
An individual's name signed to a return, statement, or other
document is prima facie evidence that the individual signed the
return, statement, or other document.
(b) A return, statement, or other document required of a
partnership must be signed by at least one partner. A partner's
name signed to a return, statement, or other document is prima facie
evidence that the partner is authorized to sign on behalf of the
partnership.
(c) The making or filing of a return, statement, or other
document or copy required to be made or filed under this chapter,
including a copy of a federal return, constitutes a certification
by the individual making or filing the return, statement, or other
document or copy that the statements contained in it are true and
that a copy filed is a true copy.
[Sections 261.310-261.350 reserved for expansion]
SUBCHAPTER F. CREDITS AND REFUNDS
Sec. 261.351. CREDITS AND REFUNDS. (a) Within the
applicable period of limitations the comptroller may credit an
overpayment of income tax and interest on the overpayment against a
liability of a tax imposed by the tax laws of this state on the
individual who made the overpayment, and the balance shall be
refunded by the comptroller out of the proceeds of the tax retained
by the comptroller.
(b) If an individual entitled to a credit or refund under
this section received a sales and use tax refund under Section
151.433 based on the original amount of income tax paid, the
comptroller shall determine whether the individual would be
entitled to that refund based on the adjusted income tax paid. If
the comptroller determines that the individual received an
overpayment of the sales and use tax refund, the comptroller shall
deduct that overpayment from the amount of any credit or refund to
which the individual is otherwise entitled under this section.
[Sections 261.352-261.400 reserved for expansion]
SUBCHAPTER G. MISCELLANEOUS ENFORCEMENT PROVISIONS
Sec. 261.401. INCOME TAX CLAIMS OF OTHER STATES. The courts
of this state shall recognize and enforce liabilities for personal
income taxes lawfully imposed by another state that extends a like
comity to this state, and the duly authorized officer of the other
state may sue for the collection of personal income tax in the
courts of this state. A certificate by the secretary of state of
the other state that an officer suing for the collection of the tax
is duly authorized to collect the tax is conclusive proof of the
officer's authority. For the purposes of this section, "taxes"
includes additions to tax, interest, and penalties.
[Sections 261.402-261.450 reserved for expansion]
SUBCHAPTER H. POWERS OF COMPTROLLER
Sec. 261.451. RECORDS. The comptroller by rule may require
the keeping of records, prescribe the content and form of returns
and statements, and require the filing of copies of federal income
tax returns and determinations.
Sec. 261.452. COOPERATION WITH OTHER JURISDICTIONS. The
comptroller may permit the United States secretary of the treasury
or the secretary's delegate, or the proper officer of any state or
other jurisdiction imposing an income tax on the incomes of
individuals, or the authorized representative of either officer, to
inspect the income tax returns of an individual, or may furnish to
the officer or authorized representative an abstract of the return
of income of an individual or supply the officer or representative
with information concerning an item of income contained in a
return, or disclosed by the report of an investigation of the income
or return of income of an individual, but permission may be granted
only if the statutes of the United States or of the other
jurisdiction, as applicable, grant substantially similar
privileges to the comptroller.
Sec. 261.453. COOPERATION WITH OTHER TAX OFFICIALS OF THIS
STATE. The comptroller may permit other tax officials of this state
to inspect tax returns and reports filed under this chapter but the
inspection may be permitted only to enforce a tax law and only to
the extent and under the conditions prescribed by rule of the
comptroller.
[Sections 261.454-261.500 reserved for expansion]
SUBCHAPTER I. DISPOSITION OF PROCEEDS
Sec. 261.501. DISPOSITION OF PROCEEDS. The revenue from
the tax imposed by this chapter shall be deposited to the credit of
the foundation school fund.
SECTION 4.02. The heading to Subchapter I, Chapter 151, Tax
Code, is amended to read as follows:
SUBCHAPTER I. REPORTS, PAYMENTS, [AND] METHODS OF REPORTING, AND
CREDITS AND REFUNDS
SECTION 4.03. Subchapter I, Chapter 151, Tax Code, is
amended by adding Section 151.433 to read as follows:
Sec. 151.433. SALES AND USE TAX REFUND FOR PAYING INCOME TAX
ALTERNATIVE. (a) An individual who elects to pay a tax on the
individual's taxable income under Chapter 261 is entitled to a
refund of sales and use taxes the individual is imputed to have paid
during a calendar year under this chapter as provided by this
section. The filing of a return and the payment of the tax under
Chapter 261 constitutes an application for a refund under this
section.
(b) Using available statistical data, the comptroller by
rule shall estimate the percentage of an individual's adjusted
gross income that is spent on items subject to the tax imposed under
this chapter. In estimating the percentage, the comptroller shall
consider:
(1) the amount of the individual's federal adjusted
gross income as defined by federal law;
(2) the number of dependents the individual has for
federal income tax purposes; and
(3) any other information the comptroller considers
appropriate.
(c) Based on the estimation made under Subsection (b), the
comptroller shall develop a table specifying by income bracket and
number of dependents the amount of sales and use taxes a taxpayer is
imputed to have paid during a calendar year under this chapter.
(d) The comptroller shall refund the amount of sales and use
taxes imputed to have been paid under this chapter not later than
the 60th day after the comptroller receives an income tax return and
tax payment under Chapter 261. If the taxpayer made estimated
income tax payments or paid in installments, the comptroller shall
refund the sales and use taxes not later than the 60th day after the
comptroller receives the final tax return and final tax payment.
SECTION 4.04. (a) Not later than July 1, 2004, the
comptroller shall request from the federal Internal Revenue Service
a written determination on whether the income tax alternative
provided by Chapter 261, Tax Code, as added by this article,
qualifies as a deductible state income tax for purposes of
determining a taxpayer's federal adjusted gross income.
(b) The comptroller shall publish a copy of a written
determination received under Subsection (a) of this section in the
Texas Register.
ARTICLE 5. CONFORMING AMENDMENTS
SECTION 5.01. Section 12.013(b), Education Code, is amended
to read as follows:
(b) A home-rule school district is subject to:
(1) a provision of this title establishing a criminal
offense;
(2) a provision of this title relating to limitations
on liability; and
(3) a prohibition, restriction, or requirement, as
applicable, imposed by this title or a rule adopted under this
title, relating to:
(A) the Public Education Information Management
System (PEIMS) to the extent necessary to monitor compliance with
this subchapter as determined by the commissioner;
(B) educator certification under Chapter 21 and
educator rights under Sections 21.407, 21.408, and 22.001;
(C) criminal history records under Subchapter C,
Chapter 22;
(D) student admissions under Section 25.001;
(E) school attendance under Sections 25.085,
25.086, and 25.087;
(F) inter-district or inter-county transfers of
students under Subchapter B, Chapter 25;
(G) elementary class size limits under Section
25.112, in the case of any campus in the district that is considered
low-performing under Section 39.132;
(H) high school graduation under Section 28.025;
(I) special education programs under Subchapter
A, Chapter 29;
(J) bilingual education under Subchapter B,
Chapter 29;
(K) prekindergarten programs under Subchapter E,
Chapter 29;
(L) safety provisions relating to the
transportation of students under Sections 34.002, 34.003, 34.004,
and 34.008;
(M) computation and distribution of state aid
under Chapters 31, 42, and 43;
(N) extracurricular activities under Section
33.081;
(O) health and safety under Chapter 38;
(P) public school accountability under
Subchapters B, C, D, and G, Chapter 39;
(Q) [equalized wealth under Chapter 41;
[(R)] a bond or other obligation or tax rate
under Chapters 42, 43, and 45; and
(R) [(S)] purchasing under Chapter 44.
SECTION 5.02. Section 12.029(b), Education Code, is amended
to read as follows:
(b) If [Except as provided by Subchapter H, Chapter 41, if]
two or more school districts having different status, one of which
is home-rule school district status, consolidate into a single
district, the petition under Section 13.003 initiating the
consolidation must state the status for the consolidated district.
The ballot shall be printed to permit voting for or against the
proposition: "Consolidation of (names of school districts) into a
single school district governed as (status of school district
specified in the petition)."
SECTION 5.03. Section 12.106(a), Education Code, is amended
to read as follows:
(a) A charter holder is entitled to receive for the
open-enrollment charter school funding under Chapter 42 in an
equitable manner determined by the commissioner as if the school
were a school district [without a tier one local share for purposes
of Section 42.253 and without any local revenue ("LR") for purposes
of Section 42.302. In determining funding for an open-enrollment
charter school, adjustments under Sections 42.102, 42.103, 42.104,
and 42.105 and the district enrichment tax rate ("DTR") under
Section 42.302 are based on the average adjustment and average
district enrichment tax rate for the state].
SECTION 5.04. Section 21.402, Education Code, is amended by
amending Subsections (a) and (c) and adding Subsection (i) to read
as follows:
(a) Except as provided by Subsection (d)[, (e),] or (f), and
subject to biennial adjustment in accordance with Subsection (i), a
school district must pay each classroom teacher, full-time
librarian, full-time counselor certified under Subchapter B, or
full-time school nurse not less than the minimum monthly salary,
based on the employee's level of experience, prescribed
[determined] by Subsection (c) [the following formula:
[MS = SF X FS
[where:
["MS" is the minimum monthly salary;
["SF" is the applicable salary factor specified by Subsection
(c); and
["FS" is the amount, as determined by the commissioner under
Subsection (b), of state and local funds per weighted student
available to a district eligible to receive state assistance under
Section 42.302 with an enrichment tax rate, as defined by Section
42.302, equal to the maximum rate authorized under Section 42.303,
except that the amount of state and local funds per weighted student
does not include the amount attributable to the increase in the
guaranteed level made by H.B. No. 3343, Acts of the 77th
Legislature, Regular Session, 2001].
(c) The minimum monthly salary under this section is
[factors per step are] as follows:Years Experience 0 1 2
A district to which Chapter 41
applies is entitled to the grants paid under this section.] The
commissioner shall determine the timing of the distribution of
grants to a district that does not receive Foundation School
Program payments.
SECTION 5.06. Section 21.411(h), Education Code, is amended
to read as follows:
(h) A grant a school district receives under this section is
in addition to any funding the district receives under Chapter 42.
The commissioner shall distribute funds under this section with the
Foundation School Program payment to which the district is entitled
as soon as practicable after the end of the school year as
determined by the commissioner. [A district to which Chapter 41
applies is entitled to the grants paid under this section.] The
commissioner shall determine the timing of the distribution of
grants to a district that does not receive Foundation School
Program payments.
SECTION 5.07. Section 21.412(h), Education Code, is amended
to read as follows:
(h) A grant a school district receives under this section is
in addition to any funding the district receives under Chapter 42.
The commissioner shall distribute funds under this section with the
Foundation School Program payment to which the district is entitled
as soon as practicable after the end of the school year as
determined by the commissioner. [A district to which Chapter 41
applies is entitled to the grants paid under this section.] The
commissioner shall determine the timing of the distribution of
grants to a district that does not receive Foundation School
Program payments.
SECTION 5.08. Section 21.413(h), Education Code, as added
by Section 2, Chapter 430, Acts of the 78th Legislature, Regular
Session, 2003, is amended to read as follows:
(h) A grant a school district receives under this section is
in addition to any funding the district receives under Chapter 42.
The commissioner shall distribute funds under this section with the
Foundation School Program payment to which the district is entitled
as soon as practicable after the end of the school year as
determined by the commissioner. [A district to which Chapter 41
applies is entitled to the grants paid under this section.] The
commissioner shall determine the timing of the distribution of
grants to a district that does not receive Foundation School
Program payments.
SECTION 5.09. Section 29.008(b), Education Code, is amended
to read as follows:
(b) Except as provided by Subsection (c), costs of an
approved contract for residential placement may be paid from a
combination of federal, state, and local funds. [The local share of
the total contract cost for each student is that portion of the
local tax effort that exceeds the district's local fund assignment
under Section 42.252, divided by the average daily attendance in
the district. If the contract involves a private facility, the
state share of the total contract cost is that amount remaining
after subtracting the local share. If the contract involves a
public facility, the state share is that amount remaining after
subtracting the local share from the portion of the contract that
involves the costs of instructional and related services. For
purposes of this subsection, "local tax effort" means the total
amount of money generated by taxes imposed for debt service and
maintenance and operation less any amounts paid into a tax
increment fund under Chapter 311, Tax Code.]
SECTION 5.10. Section 29.087(j), Education Code, is amended
to read as follows:
(j) For purposes of funding under Chapter [Chapters 41,]
42[, and 46], a student attending a program authorized by this
section may be counted in attendance only for the actual number of
hours each school day the student attends the program, in
accordance with Sections 25.081 and 25.082.
SECTION 5.11. Section 37.0061, Education Code, is amended
to read as follows:
Sec. 37.0061. FUNDING FOR ALTERNATIVE EDUCATION SERVICES IN
JUVENILE RESIDENTIAL FACILITIES. A school district that provides
education services to pre-adjudicated and post-adjudicated
students who are confined by court order in a juvenile residential
facility operated by a juvenile board is entitled to count such
students in the district's average daily attendance for purposes of
receipt of state funds under the Foundation School Program. [If the
district has a wealth per student greater than the guaranteed
wealth level but less than the equalized wealth level, the district
in which the student is enrolled on the date a court orders the
student to be confined to a juvenile residential facility shall
transfer to the district providing education services an amount
equal to the difference between the average Foundation School
Program costs per student of the district providing education
services and the sum of the state aid and the money from the
available school fund received by the district that is attributable
to the student for the portion of the school year for which the
district provides education services to the student.]
SECTION 5.12. Section 2175.304(c), Government Code, is
amended to read as follows:
(c) The procedures established under Subsection (b) must
give preference to transferring the property directly to a public
school or school district or to an assistance organization
designated by the school district before disposing of the property
in another manner. If more than one public school or school
district or assistance organization seeks to acquire the same
property on substantially the same terms, the system, institution,
or agency shall give preference to a public school that is
considered low-performing by the commissioner of education or to a
school district that has a relatively low [taxable] wealth per
student, as determined by the commissioner of education in
accordance with Section 42.304 [that entitles the district to an
allotment of state funds under Subchapter F, Chapter 42], Education
Code, or to the assistance organization designated by such a school
district.
SECTION 5.13. Section 6.02(b), Tax Code, is amended to read
as follows:
(b) A taxing unit that has boundaries extending into two or
more counties may choose to participate in only one of the appraisal
districts. In that event, the boundaries of the district chosen
extend outside the county to the extent of the unit's boundaries.
To be effective, the choice must be approved by resolution of the
board of directors of the district chosen. [The choice of a school
district to participate in a single appraisal district does not
apply to property annexed to the school district under Subchapter C
or G, Chapter 41, Education Code, unless:
[(1) the school district taxes property other than
property annexed to the district under Subchapter C or G, Chapter
41, Education Code, in the same county as the annexed property; or
[(2) the annexed property is contiguous to property in
the school district other than property annexed to the district
under Subchapter C or G, Chapter 41, Education Code.]
SECTION 5.14. Section 21.01, Tax Code, is amended to read as
follows:
Sec. 21.01. REAL PROPERTY. Real property is taxable by a
taxing unit if located in the unit on January 1[, except as provided
by Chapter 41, Education Code].
SECTION 5.15. Section 21.02(a), Tax Code, is amended to
read as follows:
(a) Except as provided by [Subsection (b) and] Sections
21.021, 21.04, and 21.05, tangible personal property is taxable by
a taxing unit if:
(1) it is located in the unit on January 1 for more
than a temporary period;
(2) it normally is located in the unit, even though it
is outside the unit on January 1, if it is outside the unit only
temporarily;
(3) it normally is returned to the unit between uses
elsewhere and is not located in any one place for more than a
temporary period; or
(4) the owner resides (for property not used for
business purposes) or maintains his principal place of business in
this state (for property used for business purposes) in the unit and
the property is taxable in this state but does not have a taxable
situs pursuant to Subdivisions (1) through (3) [of this section].
SECTION 5.16. Sections 26.08(i) and (k), Tax Code, are
amended to read as follows:
(i) For purposes of this section, the rollback tax rate of a
school district is the sum of:
(1) the tax rate that, applied to the current total
value for the district, would impose taxes in an amount that, when
added to state funds that would be distributed to the district under
Chapter 42, Education Code, for the school year beginning in the
current tax year using that tax rate, would provide the same amount
of state funds distributed under Chapter 42 and maintenance and
operations taxes of the district per student in weighted average
daily attendance for that school year that would have been
available to the district in the preceding year if the funding
elements for Chapter [Chapters 41 and] 42, Education Code, for the
current year had been in effect for the preceding year;
(2) the rate of $0.06 per $100 of taxable value; and
(3) the district's current debt rate.
(k) For purposes of this section, for the 2003, 2004, 2005,
2006, 2007, or 2008 tax year, for a school district that is entitled
to state funds under Section 1581.1015 [4(a-1), (a-2), (a-3),
(a-4), (a-5), or (a-6), Article 3.50-9], Insurance Code, the
rollback tax rate of the district is the sum of:
(1) the tax rate that, applied to the current total
value for the district, would impose taxes in an amount that, when
added to state funds that would be distributed to the district under
Chapter 42, Education Code, for the school year beginning in the
current tax year using that tax rate, would provide the same amount
of state funds distributed under Chapter 42 and maintenance and
operations taxes of the district per student in weighted average
daily attendance for that school year that would have been
available to the district in the preceding year if the funding
elements for Chapter [Chapters 41 and] 42, Education Code, for the
current year had been in effect for the preceding year;
(2) the tax rate that, applied to the current total
value for the district, would impose taxes in the amount that, when
added to state funds that would be distributed to the district under
Chapter 42, Education Code, for the school year beginning in the
current tax year using that tax rate, permits the district to comply
with Section 1581.052 [3, Article 3.50-9], Insurance Code;
(3) the rate of $0.06 per $100 of taxable value; and
(4) the district's current debt rate.
SECTION 5.17. Section 1579.251(a), Insurance Code, is
amended to read as follows:
(a) The state shall assist employees of participating
school districts and charter schools in the purchase of group
health coverage under this chapter by providing for each covered
employee the amount of $900 each state fiscal year or a greater
amount as provided by the General Appropriations Act. [The state
contribution shall be distributed through the school finance
formulas under Chapters 41 and 42, Education Code, and used by
school districts and charter schools as provided by Sections
42.2514 and 42.260, Education Code.]
ARTICLE 6. REPEALER AND EFFECTIVE DATE
SECTION 6.01. (a) The following provisions of the
Education Code are repealed:
(1) Chapters 41 and 46; and
(2) Sections 7.055(b)(34), 21.402(b) and (e),
42.002(b), 42.103(e), 42.106, 42.158(e), 42.2511, 42.2512,
42.2514, 42.2515, 42.253(e)-(g) and (l), 42.260, and
42.302(c)-(e).
(b) Sections 21.02(b) and (c), Tax Code, are repealed.
(c) Sections 1, 2, and 3, Chapter 201, Acts of the 78th
Legislature, Regular Session, 2003, are repealed.
SECTION 6.02. Notwithstanding the repeal of Chapter 46,
Education Code, by this Act, the state shall continue to provide
state assistance under Chapter 46, Education Code, as it existed
before repeal by this Act, to each district receiving state
assistance under that chapter during the 2004-2005 school year, as
necessary to comply with the state's obligations under that chapter
as it existed before repeal by this Act, and the former law is
continued in effect for that purpose. The commissioner of
education may adopt rules to implement this section.
SECTION 6.03. (a) Except as provided by Subsections (b) and
(c) of this section, this Act takes effect September 1, 2005, but
only if the constitutional amendment proposed by H.J.R. No. ___,
____ Legislature, ______ Session, 200_, is approved by the voters.
If that amendment is not approved by the voters, this Act has no
effect, except as provided by Subsection (b) of this section.
(b) The repeal by this Act of Sections 1, 2, and 3, Chapter
201, Acts of the 78th Legislature, Regular Session, 2003, and
Section 4.04 of this Act take effect immediately if this Act
receives a vote of two-thirds of all the members elected to each
house, as provided by Section 39, Article III, Texas Constitution.
If this Act does not receive the vote necessary for immediate
effect, the repeal by this Act of Sections 1, 2, and 3, Chapter 201,
Acts of the 78th Legislature, Regular Session, 2003, and Section
4.04 of this Act take effect on the 91st day after the last day of
the legislative session.
(c) Sections 4.01, 4.02, and 4.03 of this Act take effect
January 1, 2006, but only if:
(1) the constitutional amendment proposed by H.J.R.
No. ___, ___ Legislature, ___ Session, 200_, is approved by the
voters; and
(2) not later than January 1, 2006, the federal
Internal Revenue Service provides to the comptroller a written
determination that the income tax alternative provided by Chapter
261, Tax Code, as added by this Act, qualifies as a deductible state
income tax for purposes of determining a taxpayer's federal
adjusted gross income.