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78S40450 ESH/DAK-D
By: Pitts H.B. No. 37
A BILL TO BE ENTITLED
AN ACT
relating to public school finance and state taxes; authorizing a
state tax on payrolls.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 42.251(b), Education Code, is amended to
read as follows:
(b) The program shall be financed by:
(1) ad valorem tax revenue generated by 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) the proceeds of the payroll tax imposed under
Chapter 251, Tax Code;
(4) state available school funds distributed in
accordance with law; and
(5) [(4)] state funds appropriated for the purposes of
public school education and allocated to each district in an amount
sufficient to finance the cost of each district's Foundation School
Program not covered by other funds specified in this subsection.
SECTION 2. Section 42.252(a), Education Code, is amended to
read as follows:
(a) Each school district's share of the Foundation School
Program is determined by the following formula:
LFA = TR X DPV
where:
"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 $0.76 [$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.
SECTION 3. 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 $27.65
[$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 4. 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 $0.24 [$0.64] per $100 of valuation, or a greater amount for
any year provided by appropriation.
SECTION 5. Section 45.003(d), Education Code, is amended to
read as follows:
(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 $1.00 [$1.50] on the $100 valuation of taxable property in
the district, stated in the proposition.
SECTION 6. Title 2, Tax Code, is amended by adding Subtitle
K to read as follows:
SUBTITLE K. PAYROLL TAX
CHAPTER 251. PAYROLL TAX
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 251.001. DEFINITIONS. In this chapter:
(1) "Calendar quarter," "commission," "contribution,"
and "compensation fund" have the meaning assigned those terms by
Section 201.011, Labor Code.
(2) "Employer" has the meaning assigned by Subchapter
C, Chapter 201, Labor Code.
(3) "Wages" means the wages for employment paid by an
employer for which a contribution is required under Chapter 204,
Labor Code, to the compensation fund.
Sec. 251.002. RULES. The comptroller may adopt rules to
implement and administer this chapter.
[Sections 251.003-251.050 reserved for expansion]
SUBCHAPTER B. PAYROLL TAX FOR EMPLOYERS
Sec. 251.051. TAX IMPOSED. A payroll tax is imposed on each
employer for all wages paid during a calendar quarter.
Sec. 251.052. RATE. The rate of the tax is two percent of
the wages.
Sec. 251.053. TAX NOT DEDUCTED FROM WAGES. An employer may
not deduct the payroll tax imposed under this subchapter from any
wages of the employer's employees.
Sec. 251.054. REPORTS AND PAYMENT. Each employer shall, on
or before the last day of the month immediately following each
calendar quarter for which the employer is required to pay a
contribution under Chapter 204, Labor Code:
(1) file with the comptroller:
(A) a copy of any report required by the
commission for determining the amount of the contribution required
for any wages paid by the employer during that calendar quarter; and
(B) any other information required by the
comptroller on a form prescribed by the comptroller; and
(2) pay to the comptroller the tax due under this
subchapter.
Sec. 251.055. EXEMPTION FOR GOVERNMENTAL ENTITIES. (a)
The tax imposed under this subchapter does not apply to a
governmental entity.
(b) A governmental entity shall file reports under Section
251.054 in the same manner as any other employer.
[Sections 251.056-251.100 reserved for expansion]
SUBCHAPTER C. DISPOSITION OF PROCEEDS
Sec. 251.101. DISPOSITION OF PROCEEDS. All proceeds from
the collection of the taxes imposed under this chapter shall be
deposited to the credit of the foundation school fund.
SECTION 7. (a) Chapter 171, Tax Code, is repealed January
1, 2005.
(b) 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 Chapter 171 until
barred by limitations.
(c) The repeal of Chapter 171, Tax Code, does not affect:
(1) the status of a corporation that has had its
corporate privileges, certificate of authority, or corporate
charter revoked, 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 Subchapter F, G, or H of that chapter 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
Subchapter F, G, or H of that chapter.
SECTION 8. (a) Except as otherwise provided by this
section, this Act takes effect September 1, 2005.
(b) Sections 6 and 7 of this Act take effect January 1, 2005.