SRC-JEC S.B. 2 78(R) BILL ANALYSIS
Senate Research Center S.B. 2
78R14010 ESH/JD/CBH-DBy: Shapiro et al.
Committee of the Whole Senate
5/1/2003
As Filed
DIGEST AND PURPOSE
S.B. 2 provides that it is state policy: to encourage and support local
control; that the provision of public education is a state responsibility;
that a thorough and efficient system must be provided and substantially
financed through state revenue sources so that each student enrolled in
the public school system has access to appropriate programs and services
that are substantially equal; that the public school finance system must
adhere to a standard of neutrality that provides for substantially equal
access to similar revenue per student, given certain factors. It also
provides that the commissioner of education must certify that sufficient
funds are available for new mandates.
Creates the Texas Education Excellence Program and replaces the Foundation
School Program.
Provides a student allotment initially set at $4,270 per weighted student
in average daily attendance (WADA). The current weights and adjustments
do not change with one exception: the cost of education adjustment is
converted to a "rolling average."
Provides for a "minimum per-student aid" (i.e., hold harmless), which is
the total maintenance and operations funds of a district for the 2002-03
school year.
Funds an enrichment program that is funded by a local ad valorem tax.
Local tax revenue is equalized to the 90th percentile of wealth (around
$32 per WADA). Beginning in the 2005-06 school year, districts are
authorized to levy five cents; the following year they may levy the full
10 cents.
Creates an Education Excellence Task Force to conduct a comprehensive
study of the academic and funding elements needed to ensure the
opportunity for excellence of every Texas student. The report must include
specific recommendations for improving student performance on the Texas
Assessment of Knowledge and Skills, for increasing high school graduation
rates, and for revising the education funding formulas and weights to
promote educational excellence.
Creates the Texas Education Fund. The state ad valorem tax rate is set at
75 cents. The tax is collected by county assessor-collectors. Property
is appraised by local appraisal districts. The comptroller is provided
certain new duties. The comptroller and the state do not participate in
appraisal district governance. The comptroller is entitled to challenge
before the appraisal board the exclusion of property from the appraisal
roll for state ad valorem taxes and to appeal an order excluding such
property.
Requires local revenue from state sales tax base expansion to be used for
tax relief unless another use is authorized by local voters. There is a
40 percent sales tax exemption for certain financial assistance and food
stamp recipients (i.e., Lone Star Card recipients). Health care services
are exempt from sales tax.
Provides for mandatory residential tenant property tax relief. Landlords
must rebate or credit tenants for 75 percent of tax savings in 2005, 2006,
and 2007.
RULEMAKING AUTHORITY
Rulemaking authority is granted throughout this bill to the commissioner
of public education, the comptroller of public accounts, the Legislative
Budget Board, and the State Board of Education, including the following
grants:
Rulemaking authority is expressly granted to the commissioner of education
in SECTION 1.02 (Sections 41.007, 41.156, and 41.404, Education Code) and
SECTION 1.08 (Section 44.007, Education Code) of this bill.
Rulemaking authority is expressly granted to the comptroller of public
accounts in SECTION 3.01 (Section 6.038, Tax Code) and SECTION 4.04
(Section 151.3145, Tax Code) of this bill.
Rulemaking authority is expressly granted to the Legislative Budget Board
in SECTION 1.02 (Sections 41.008 and 41.053, Education Code) of this bill.
Rulemaking authority is expressly granted to the State Board of Education
in SECTION 1.02 (Sections 41.053, 41.451, and 41.453, Education Code) of
this bill.
SECTION BY SECTION ANALYSIS
ARTICLE 1. PUBLIC SCHOOL FINANCE
SECTION 1. Amends Chapter 4, Education Code, by adding Section 4.003, as
follows:
Sec. 4.003. PRESERVATION OF LOCAL CONTROL OF PUBLIC EDUCATION. (a) Sets
forth the state policy of preservation of local control of public
education through the board of trustees in each school district.
(b) Prohibits a state law, rule, or other requirement, after September 1,
2004, from being imposed on the school districts of this state unless the
commissioner of education (commissioner) certifies that sufficient funds
will be distributed to districts to pay the full cost of complying with
the proposed law, rule, or other requirement.
SECTION 1.02. Amends Subtitle I, Title 2, Education Code, by adding
Chapters 41 and 42, as follows:
CHAPTER 41. TEXAS EDUCATION EXCELLENCE PROGRAM
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 41.001. STATE POLICY. (a) Establishes that it is the policy of
this state that the provision of public education is a state
responsibility and that a thorough and efficient system must be provided
and substantially financed through state revenue sources so that each
student enrolled in the public school system has access to programs and
services that are appropriate to the student's educational needs and are
substantially equal to those available to any similar student,
notwithstanding varying local economic factors.
(b) Requires the public school finance system of this state to adhere to
a standard of neutrality that provides for substantially equal access to
similar revenue per student after acknowledging all legitimate student and
district cost differences.
Sec. 41.002. PURPOSE OF TEXAS EDUCATION EXCELLENCE PROGRAM. (a) Provides
that the purpose of the Texas Education Excellence Program set forth in
this chapter is to guarantee that each school district in the state has
adequate resources and access to a substantially equalized program of
financing an enriched program.
(b) Provides that the Texas Education Excellence Program consists of
certain programs.
Sec. 41.003. STUDENT ELIGIBILITY. (a) Specifies that a student is
entitled to the benefits of the Texas Education Excellence Program if the
student is five years of age or older and under 21 years of age on
September 1 of the school year and has not graduated from high school.
(b) Established that a student to whom Subsection (a) does not apply is
entitled to the benefits of the Texas Education Excellence Program if the
student is enrolled in a prekindergarten class under Section 29.153.
(c) Authorizes a child to be enrolled in the first grade if the child is
at least six years of age at the beginning of the district's school year
or has been enrolled in the first grade or has completed kindergarten in
the public schools in another state before transferring to a public school
in this state.
(d) Provides that a student younger than five years of age is entitled to
the benefits of the Texas Education Excellence Program if the student
meets certain requirements.
Sec. 41.004. ADMINISTRATION OF PROGRAM. Requires the commissioner, in
accordance with rules adopted by the State Board of Education (SBOE), to
administer the Texas Education Excellence Program.
Sec. 41.005. AVERAGE DAILY ATTENDANCE. (a) Establishes that in this
chapter, average daily attendance is the quotient of the sum of attendance
for each day of the minimum number of days of instruction as described
under Section 25.081(a) divided by the minimum number of days of
instruction.
(b) Requires a school district that experiences a decline of two or more
in average daily attendance to be funded on the basis of the actual
average daily attendance of the preceding school year, if the decline is
the result of the closing or reduction in personnel of a military base,
or, subject to Subsection (e), an average daily attendance not to exceed
98 percent of the actual average daily attendance of the preceding school
year, if the decline is not the result of the closing or reduction in
personnel of a military base.
(c) Requires the commissioner to adjust the average daily attendance of a
school district that has a significant percentage of students who are
migratory children as defined by 20 U.S.C. Section 6399 and its subsequent
amendments.
(d) Authorizes the commissioner to adjust the average daily attendance of
a school district in which a disaster, flood, extreme weather condition,
fuel curtailment, or other calamity has a significant effect on the
district's attendance.
(e) Requires the commissioner, for each school year, to adjust the
average daily attendance of school districts that are entitled to funding
on the basis of an adjusted average daily attendance under Subsection
(b)(2) so that all districts are funded on the basis of the same
percentage of the preceding year's actual average daily attendance; and
the total cost to the state does not exceed the amount specifically
appropriated for that year for purposes of Subsection (b)(2).
(f) Provides that an open-enrollment charter school is not entitled to
funding based on an adjustment under Subsection (b)(2).
Sec. 41.006. STUDENT COUNT. Provides that for purposes of this chapter,
the student count is the number of students in average daily attendance,
the number of full-time equivalent students, or the number of students
enrolled, as appropriate, in a regular education program or an educational
program described by Chapter 29 (Educational Programs).
Sec. 41.007. PUBLIC EDUCATION INFORMATION MANAGEMENT SYSTEM (PEIMS).
(a) Requires each school district participate in the Public Education
Information Management System (PEIMS) and to provide through that system
information required for the administration of this chapter and of other
appropriate provisions of this code.
(b) Requires each school district to use a uniform accounting system
adopted by the commissioner for the data required to be reported for
PEIMS.
(c) Requires the commissioner, annually, to review PEIMS and to repeal or
amend rules that require school districts to provide information through
the system that is not necessary. Requires the commissioner, in reviewing
and revising PEIMS, to develop rules to ensure that the system meets
certain standards.
Sec. 41.008. FUNDING ELEMENTS. (a) Requires the Legislative Budget
Board (LBB) to adopt rules, subject to appropriate notice and opportunity
for public comment, for the computation for each year of a biennium of the
funding elements, in accordance with Subsection (c), necessary to achieve
the state policy under Section 41.001.
(b) Requires LBB, before each regular session of the legislature, to
report the funding elements to the commissioner and the legislature.
(c) Requires the funding elements to include certain factors.
(d) Requires the board to conduct a study on the funding elements each
biennium.
Requires the study to 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
enrichment tax rates.
[Reserves Sections 41.009-41.050 for expansion.]
SUBCHAPTER B. BASIC PROGRAM
Sec. 41.051. GUARANTEED AMOUNT. Provides that each school district is
guaranteed a specified amount per weighted student in state funds.
Provides that the amount of state support is determined by the certain
formula.
Sec. 41.052. PROGRAM WEIGHTS. (a) Defines "career and technology
education program," "full-time equivalent student," and "special
education program."
(b) Sets forth program weights.
(c) Specifies that the total number of weights under Subsection (b)(19)
to which a district is entitled may not exceed the number by which the
number of students using public education grants to attend school in the
district exceeds the number of students who reside in the district and use
public education grants to attend school in another district.
Sec. 41.053. COST OF EDUCATION ADJUSTMENT. (a) Provides that the
guaranteed amount ("GA") under Section 41.051 for each district is
adjusted to reflect the geographic variation in known resource costs and
costs of education due to factors beyond the control of the school
district.
(a-1) Establishes that for the 2004-2005 school year, the cost of
education adjustment is the cost of education index adjustment adopted by
the foundation school fund budget committee and contained in Chapter 203,
Title 19, Texas Administrative Code, as that chapter existed on March 26,
1997.
(b) Requires LBB to conduct a study each biennium and to recompute the
cost of education index and adopt adjustments as LBB determines are
necessary to ensure that the cost of education index reflects current
variations in known resource costs and costs of education due to factors
beyond the control of a school district. Provides that LBB's determination
is final and prohibits it from being appealed.
(c) Authorizes LBB, from funds appropriated for the purpose, to contract
with one or more public or private entities for studies to assist with the
recomputation and adjustments. Authorizes LBB, subject to appropriate
notice and opportunity for public comment, to adopt rules necessary to
implement this section.
(c-1) Provides that, for the 2005-2006 and 2006-2007 school years, the
cost of education index is the average of the cost of education index as
provided by Subsection (a-1) and the initial recomputation and adjustment
of the cost of education index adopted by LBB in accordance with
Subsection (b).
(d) Provides that the cost of education index is the average of the two
most recent recomputations and adjustments adopted by LBB under Subsection
(b).
(e) Establishes that Subsection (d) applies beginning with the 2007-2008
school year. Provides that Subsections (a-1) and (c-1) and this
subsection expire September 1, 2007.
Sec. 41.054. SMALL AND MID-SIZED DISTRICT ADJUSTMENT. (a) Provides that
the guaranteed amount ("GA") under Section 41.051 for certain small and
mid-sized districts, as adjusted under Section 41.053, is adjusted in
accordance with this section. Defines "ADA" "AGA," and "SAGA."
(b) Provides that the GA under Section 41.051 of a school district that
contains at least 300 square miles and has not more than 1,600 students in
average daily attendance is adjusted by applying the formula: SAGA = (1 +
((1,600 - ADA) X 0.0004)) X AGA.
(c) Provides that the GA under Section 41.051 of a school district that
contains less than 300 square miles and has not more than 1,600 students
in average daily attendance is adjusted by applying the formula: SAGA = (1
+ ((1,600 - ADA) X 0.00025)) X AGA.
(d) Provides that the GA under Section 41.051 of a school district that
offers a kindergarten through grade 12 program and has fewer than 5,000
students in average daily attendance is adjusted by applying the formula,
of two specified formulas, that results in the greatest guaranteed amount.
Sec. 41.055. SPARSITY ADJUSTMENT. Specifies that the sparsity
adjustment meet certain requirements, notwithstanding Sections 41.051,
41.053, and 41.054.
[Reserves Sections 41.056-41.100 for expansion.]
SUBCHAPTER C. TRANSPORTATION ALLOTMENT
Sec. 41.101. TRANSPORTATION ALLOTMENT. Establishes that each district
or county operating a transportation system is entitled to allotments for
transportation costs as provided by this subchapter.
Sec. 41.102. DEFINITIONS. Defines "eligible special education student,"
"linear density," and "regular eligible student."
Sec. 41.103. REGULAR TRANSPORTATION ALLOTMENT. (a) Provides that each
school district or county operating a regular transportation system is
entitled to an allotment based on the daily cost per regular eligible
student of operating and maintaining the regular transportation system and
the linear density of that system.
(b) Requires the commissioner, in determining the cost, to give
consideration to factors affecting the actual cost of providing these
transportation services in each school district or county. Requires the
commissioner to compute the average actual cost and to report that cost to
LBB for consideration by the legislature in the General Appropriations
Act.
(c) Prohibits the allotment per mile of approved route from exceeding the
amount set by appropriation.
Sec. 41.104. HAZARDOUS CONDITIONS TRANSPORTATION ALLOTMENT. (a)
Authorizes a school district or county to apply for and on approval of
the commissioner receive an additional amount of up to 10 percent of its
regular transportation allotment to be used for the transportation of
children who live within two miles of the school they attend and who would
be subject to hazardous traffic conditions if they walked to school.
(b) Requires each board of trustees to provide to the commissioner the
definition of hazardous conditions applicable to that district and to
identify the specific hazardous areas for which the allotment is
requested. Provides that a hazardous condition exists where no walkway is
provided and children must walk along or cross a freeway or expressway, an
underpass, an overpass or a bridge, an uncontrolled major traffic artery,
an industrial or commercial area, or another comparable condition.
Sec. 41.105. PRIVATE OR COMMERCIAL TRANSPORTATION ALLOTMENT. (a)
Authorizes the commissioner to grant an amount set by appropriation for
private or commercial transportation for eligible students from isolated
areas. Requires the need for this type of transportation grant to be
determined on an individual basis, and prohibits the amount granted from
exceeding the actual cost.
(b) Authorizes the grant to be made only in extreme hardship cases.
Prohibits the grant from being made if the students live within two miles
of an approved school bus route.
Sec. 41.106. TRANSPORTATION OF CAREER AND TECHNOLOGY EDUCATION STUDENTS.
Requires the cost of transporting career and technology education
students from one campus to another inside a school district or from a
sending district to another secondary public school for a career and
technology program or an area career and technology school or to an
approved postsecondary institution under a contract for instruction
approved by the Texas Education Agency (TEA) to be reimbursed based on the
number of actual miles traveled times the district's official
extracurricular travel per mile rate as set by the board of trustees and
approved by TEA.
Sec. 41.107. TRANSPORTATION OF SPECIAL EDUCATION STUDENTS. (a) Provides
that a school district or county that provides special transportation
services for eligible special education students is entitled to a state
allotment paid on a previous year's cost-per-mile basis. Requires the
maximum rate per mile allowable to be set by appropriation based on data
gathered from the first year of each preceding biennium.
(b) Authorizes a school district to use a portion of its support
allocation to pay transportation costs, if necessary. Authorizes the
commissioner to grant an amount set by appropriation for private
transportation to reimburse parents or their agents for transporting
eligible special education students. Requires the mileage allowed to be
computed along the shortest public road from the student's home to school
and back, morning and afternoon. Requires the need for this type of
transportation to be determined on an individual basis and to be approved
only in extreme hardship cases.
Sec. 41.108. DETERMINATION OF TRANSPORTATION ALLOTMENTS OF DISTRICT
BELONGING TO COUNTY TRANSPORTATION SYSTEM. Provides that, if a school
district belongs to a county transportation system, the district's
transportation allotment is determined on the basis of the number of
approved daily route miles in the district multiplied by the allotment per
mile to which the county transportation system is entitled.
Sec. 41.109. TRANSPORTATION ALLOTMENT FOR TEXAS SCHOOL FOR THE DEAF.
Provides that the Texas School for the Deaf is entitled to an allotment
under this subchapter. Requires the commissioner to determine the
appropriate allotment.
Sec. 41.110. TRANSPORTATION TO CHILD-CARE FACILITIES. Prohibits the
commissioner, notwithstanding any other provision of this subchapter, from
reducing the allotment to which a school district or county is entitled
under this subchapter because, as authorized by Section 34.007, the
district or county provides transportation for an eligible student to and
from a child-care facility, as defined by Section 42.002 (Definitions),
Human Resources Code, instead of the student's residence, if the
transportation is provided within the approved routes of the district or
county for the school the student attends.
Sec. 41.111. USE OF TRANSPORTATION ALLOTMENTS. Requires the funds
allotted under this subchapter to be used in providing transportation
services.
[Reserves Sections 41.112-41.150 for expansion.]
SUBCHAPTER D. NEW INSTRUCTIONAL FACILITY ALLOTMENT
Sec. 41.151. NEW INSTRUCTIONAL FACILITY ALLOTMENT. Provides that a
school district is entitled to an additional allotment as provided by this
subchapter for operational expenses associated with opening a new
instructional facility.
Sec. 41.152. DEFINITION. Defines "instructional facility."
Sec. 41.153. ALLOTMENT FOR FIRST YEAR OF OPERATION. Provides that a
school district, for the first school year in which students attend a new
instructional facility, is entitled to an allotment of $250 for each
student in average daily attendance at the facility.
Sec. 41.154. ALLOTMENT FOR SECOND YEAR OF OPERATION. (a) Provides that
a school district, for the second school year in which students attend a
new instructional facility, is entitled to an allotment of $250 for each
additional student in average daily attendance at the facility.
(b) Provides that for purposes of this section, the number of additional
students in average daily attendance at a facility is the difference
between the number of students in average daily attendance in the current
year at that facility and the number of students in average daily
attendance at that facility in the preceding year.
Sec. 41.155. LIMITATION ON ALLOTMENTS. (a) Prohibits the amount
appropriated for allotments under this subchapter from exceeding $25
million in a school year.
(b) Requires the commissioner, if the total amount of allotments to which
school districts are entitled under this subchapter for a school year
exceeds the amount appropriated for allotments under this subchapter, to
reduce each district's allotment under this subchapter proportionately.
Sec. 41.156. RULES. Authorizes the commissioner to adopt rules necessary
to implement this subchapter.
[Reserves Subchapters E-H for expansion.]
SUBCHAPTER I. FINANCING THE SYSTEM
Sec. 41.401. FINANCING; GENERAL RULE. (a) Provides that the sum of the
guaranteed amounts under Subchapter B, the transportation allotments under
Subchapter C, and the new instructional facility allotments under
Subchapter D constitute the total cost of the Texas Education Excellence
Program.
(b) Requires the program to be financed by revenue generated by the state
ad valorem tax under Section 1-e, Article VIII, Texas Constitution; state
available school funds distributed in accordance with law; and 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 Texas Education Excellence Program not covered by other
funds specified by this subsection.
Sec. 41.402. DISTRIBUTION OF TEXAS EDUCATION FUND. (a) Requires the
commissioner, for each school year, to determine the amount of money to
which a school district is entitled under Subchapters B, C, and D; the
amount of money to which a school district is entitled under Chapter 42;
and the amount of each district's enrichment program local revenue under
Section 42.002.
(b) Requires the commissioner, except as provided by this subsection, to
base the determinations under Subsection (a) on the estimates provided to
the legislature under Section 41.403, or, if the General Appropriations
Act provides estimates for that purpose, on the estimates provided under
that Act, for each school district for each school year. Requires the
commissioner to reduce the entitlement under Chapter 42 of each district
that has a final taxable value of property for the second year of a state
fiscal biennium that is higher than the estimate under Section 41.403 or
the General Appropriations Act, as applicable. Provides that a reduction
under this subsection may not reduce the district's entitlement below the
amount to which it is entitled at its actual taxable value of property.
Prohibits the sum of the reductions under this subsection from being
greater than the amount necessary to fully fund the entitlement of each
district.
(c) Provides that each school district is entitled to state aid in an
amount equal to the difference for that district between the sum of
Subsections (a)(1) and (2) and the amount determined under Subsection
(a)(3).
(d) Requires the commissioner, except as provided by Section 42.005, to
approve warrants to each school district equaling the amount of its
entitlement. Prohibits the total amount of the warrants approved under
this section from exceeding the total amount appropriated for Texas
Education Excellence Program purposes for that fiscal year.
(e) Authorizes the commissioner, if a school district demonstrates to the
satisfaction of the commissioner that the estimate of the district's
enrichment tax rate, student enrollment, or taxable value of property used
in determining the amount of state funds to which the district is entitled
is so inaccurate as to result in undue financial hardship to the district,
to adjust funding to that district in that school year to the extent that
funds are available for that year.
(f) Requires the commissioner, if the total amount appropriated for a
year for the basic program under the Texas Education Excellence Program is
less than the amount of money to which school districts are entitled for
that year, to reduce the total amount of basic program funds allocated to
each district proportionately. Establishes that the following fiscal year,
a district's entitlement under this section is increased by an amount
equal to the reduction made under this subsection.
(g) Requires the payment from the Texas education fund to each school
district to be made in a certain manner.
(h) Requires the commissioner, by March 1 of each year, to determine the
actual amount of state funds to which each school district is entitled
under this chapter and Chapter 42 for the current school year and to
compare that amount with the amount of the warrants issued to each
district for that year. Requires the commissioner, if the amount of the
warrants differs from the amount to which a district is entitled because
of variations in the district's enrichment tax rate, student enrollment,
or taxable value of property, to adjust the district's entitlement for the
next fiscal year accordingly.
Sec. 41.403. ESTIMATES REQUIRED. (a) Requires TEA and the comptroller,
by October 1 of each even-numbered year, to submit certain information to
the legislature.
(b) Requires TEA and the comptroller, by March 1 of each odd-numbered
year, to update the information provided to the legislature under
Subsection (a).
Sec. 41.404. MINIMUM PER-STUDENT AID. (a) Provides that a school
district, notwithstanding any other provision of this subtitle, is
entitled to an amount of state aid per student in weighted average daily
attendance that is equal to the amount of state and local funds for
maintenance and operations per student in weighted average daily
attendance the district received under former Chapters 41 and 42 and
Chapter 45 or under another law authorizing a school district to impose a
tax for maintenance and operations for the 2002-2003 school year, or a
greater amount provided for any year by appropriation. Provides that for
purposes of this subsection, the amount of state and local funds for
maintenance and operations per student in weighted average daily
attendance a district received for the 2002-2003 school year does not take
into consideration any amounts the district paid for the purchase of
attendance credits under former Subchapter D, Chapter 41, or the
education of nonresident students under former Subchapter E, Chapter 41.
(b) Requires the commissioner, each year, to determine for each school
district whether the amount of state aid to which the district is entitled
under Section 41.402(c) is less than the amount specified under Subsection
(a) and to provide additional state aid in an amount equal to the
difference, if any.
(c) Requires the additional to state aid under this section to be funded
from general revenue and designated in a separate line item in the General
Appropriations Act.
(d) Provides that a determination by the commissioner under this section
is final and prohibits it from being appealed.
(e) Authorizes the commissioner to adopt rules to implement this section.
Sec. 41.405. FALSIFICATION OF RECORDS; REPORT. Requires TEA's director
of school audits, when, in the director's opinion, audits or reviews of
accounting, enrollment, or other records of a school district reveal
deliberate falsification of the records, or violation of the provisions of
this chapter, through which the district's share of state funds allocated
under this chapter would be or has been illegally increased, to promptly
and fully report the fact to SBOE, the state auditor, and the appropriate
county attorney, district attorney, or criminal district attorney.
Sec. 41.406. RECOVERY OF OVERALLOCATED FUNDS. (a) Requires TEA, if a
school district has received an overallocation of state funds, by
withholding from subsequent allocations of state funds or by requesting
and obtaining a refund, to recover from the district an amount equal to
the overallocation.
(b) Requires TEA, if a district fails to comply with a request for a
refund under Subsection (a), to certify to the comptroller that the amount
constitutes a debt for purposes of Section 403.055, Government Code.
Requires TEA to provide to the comptroller the amount of the
overallocation and any other information required by the comptroller.
Authorizes the comptroller to certify the amount of the debt to the
attorney general for collection.
(c) Requires any amounts recovered under this section to be deposited in
the Texas education fund.
[Reserves Sections 41.407-41.450 for expansion.]
SUBCHAPTER J. LIMITATIONS ON PROGRAM ALLOTMENTS
Sec. 41.451. SPECIAL EDUCATION PROGRAMS. (a) Prohibits the number of
contact hours credited per day for each special education student in the
off-home-campus instructional arrangement from exceeding the contact hours
credited per day for the multidistrict class instructional arrangement in
the 1992-1993 school year, for funding purposes.
(b) Prohibits the contact hours credited per day for each special
education student in the resource room; self-contained, mild and moderate,
regular campus; and self-contained, severe, regular campus instructional
arrangements from exceeding the average of the statewide total contact
hours credited per day for those three instructional arrangements in the
1992-1993 school year, for funding purposes.
(c) Requires SBOE by rule to prescribe the qualifications a special
education instructional arrangement must meet in order to be funded as a
particular instructional arrangement under this chapter. Requires SBOE,
in prescribing the qualifications that a mainstream instructional
arrangement must meet, to require that students with disabilities and
their teachers receive the direct, indirect, and support services that are
necessary to enrich the regular classroom and enable student success.
(d) Requires SBOE to adopt rules and procedures governing contracts for
residential placement of special education students. Requires the
legislature to provide by appropriation for the state's share of the costs
of those placements.
(e) Requires funds allocated under this chapter for special education
programs, other than an indirect cost allotment established under SBOE
rule, to be used in the special education program under Subchapter A,
Chapter 29.
(f) Requires TEA to encourage the placement of students in special
education programs, including students in residential instructional
arrangements, in the least restrictive environment appropriate for
students' educational needs.
(g) Requires a school district that maintains for two successive years a
ratio of full-time equivalent special education students placed in
partially or totally selfcontained classrooms to the number of full-time
equivalent students placed in resource room or mainstream instructional
arrangements that is 25 percent higher than the statewide average ratio to
be reviewed by TEA to determine the appropriateness of student placement.
Authorizes the commissioner to reduce the guaranteed amount the district
receives to the level to which the district would be entitled if the
district's ratio was not more than 25 percent higher than the statewide
average ratio.
(h) Provides that a school district that provides an extended year
program required by federal law for special education students who may
regress is entitled to receive funds in an amount equal to 75 percent, or
a lesser percentage determined by the commissioner, of the guaranteed
amount for each full-time equivalent student in average daily attendance,
multiplied by the amount designated for the student's instructional
arrangement under Section 41.052(b), for each day the program is provided
divided by the number of days in the minimum school year. Prohibits the
total amount of state funding for extended year services under this
section from exceeding $10 million per year. Authorizes a school district
to use funds received under this subsection only in providing an extended
year program.
(i) Requires the commissioner, from the total amount of funds
appropriated for special education under this chapter, to withhold an
amount specified in the General Appropriations Act and distribute that
amount to school districts for programs under Section 29.014. Provides
that the program established under that section is required only in school
districts in which the program is financed by funds distributed under this
subsection and any other funds available for the program. Requires the
commissioner, after deducting the amount withheld under this subsection
from the total amount appropriated for special education, to reduce each
district's allocation proportionately.
Sec. 41.452. BILINGUAL EDUCATION AND SPECIAL LANGUAGE PROGRAMS. (a)
Requires funds allocated under this chapter for bilingual education or
special language programs, other than an indirect cost allotment
established under SBOE rule, to be used in providing bilingual education
or special language programs under Subchapter B, Chapter 29, and to be
accounted for under existing agency reporting and auditing procedures.
(b) Authorizes a district's bilingual education or special language
allocation to be used only for program and student evaluation,
instructional materials and equipment, staff development, supplemental
staff expenses, salary supplements for teachers, and other supplies
required for quality instruction and smaller class size.
Sec. 41.453. COMPENSATORY EDUCATION PROGRAMS. (a) Provides that for
purposes of Section 41.052(b)(14), the number of educationally
disadvantaged students is determined by averaging the best six months'
enrollment in the national school lunch program of free or reduced-price
lunches for the preceding school year or in the manner provided by
commissioner rule, if no campus in the district participated in the
national school lunch program of free or reduced-price lunches during the
preceding school year.
(b) Authorizes funds allocated under Sections 41.052(b)(14) and (15) to
be used only to fund supplemental programs and services designed to
eliminate any disparity in performance on assessment instruments
administered under Subchapter B, Chapter 39, or disparity in the rates of
high school completion between students at risk of dropping out of school,
as defined by Section 29.081, and all other students. Authorizes the
funds, other than an indirect cost allotment established under SBOE rule,
prohibited from exceeding 15 percent, to be used only to meet the costs of
providing a compensatory, intensive, or accelerated instruction program
under Section 29.081 or an alternative education program established under
Section 37.008 or to support a program eligible under Title I of the
Elementary and Secondary Education Act of 1965, as provided by Pub. L. No.
103-382 and its subsequent amendments, and by federal regulations
implementing that Act, at a campus at which at least 50 percent of the
students are educationally disadvantaged. Authorizes funds allocated under
Sections 41.052(b)(14) and (15), in meeting the costs of providing a
compensatory, intensive, or accelerated instruction program under Section
29.081, to be used only for costs supplementary to the regular education
program, such as costs for program and student evaluation, instructional
materials and equipment and other supplies required for quality
instruction, supplemental staff expenses, salary for teachers of at-risk
students, smaller class size, and individualized instruction. Requires a
home-rule school district or an open-enrollment charter school to use
funds allocated under Sections 41.052(b)(14) and (15) for a purpose
authorized by this subsection, but provides that such a district or school
is not otherwise subject to Subchapter C, Chapter 29. Authorizes certain
actions to be taken, notwithstanding any other provisions of this section.
(c) Requires a district, in a petition under Subsection (b)(2), to report
the number of students in each grade level, by demographic subgroup, not
making satisfactory progress under the state's assessment system.
Requires the commissioner to make this waiver request information
available annually to the public on TEA's website.
(d) Requires TEA to evaluate the effectiveness of accelerated instruction
and support programs provided under Section 29.081 for students at risk of
dropping out of school.
(e) Authorizes the commissioner, from the total amount of funds
appropriated for allocations under Sections 41.052(b)(14) and (15), to
take certain actions each fiscal year.
(f) Requires the commissioner, from the total amount of funds
appropriated for allocations under Sections 41.052(b)(14) and (15), to
take certain actions, each fiscal year.
(g) Requires the commissioner, after deducting the amounts withheld under
Subsections (e) and (f) from the total amount appropriated for the
allocations under Sections 41.051(b)(14) and (15), to reduce each
district's guaranteed amount proportionately.
(h) Requires SBOE, with the assistance of the state auditor and the
comptroller, to develop and implement by rule a reporting and auditing
system for district and campus expenditures of funds allocated under
Sections 41.051(b)(14) and (15) to ensure that those funds, other than the
indirect cost allotment, are spent only to supplement the regular program.
Requires the commissioner, in the year following an audit of compensatory
education expenditures, to withhold from a district's Texas education fund
payment an amount equal to the amount of funds allocated under Sections
41.051(b)(14) and (15) TEA determines were not used in compliance with
Subsection (b). Requires the commissioner to release to a district funds
withheld under this subsection when the district provides to the
commissioner a detailed plan to use those funds in compliance with
Subsection (b).
(i) Requires the commissioner to grant a one-year exemption from the
requirements of Subsection (h) to a school district in which the group of
students who failed to perform satisfactorily in the preceding school year
on an assessment instrument required under Section 39.023(a), (c), or (l)
subsequently performs on those assessment instruments at a level that
meets or exceeds a level prescribed by commissioner rule. Requires the
commissioner, each year, based on the most recent information available,
to determine if a school district is entitled to an exemption for the
following school year and notify the district of that determination.
Sec. 41.454. PROGRAMS FOR GIFTED AND TALENTED STUDENTS. (a) Requires
funds allocated under this chapter for programs for gifted and talented
students, other than the amount that represents the program's share of
general administrative costs, to be used in providing programs for gifted
and talented students under Subchapter D, Chapter 29, including programs
sanctioned by International Baccalaureate and Advanced Placement, or in
developing programs for gifted and talented students. Requires each
district to account for the expenditure of state funds as provided by SBOE
rule. Requires the district, if by the end of the 12th month after
receiving an allocation for developing a program a district has failed to
implement a program, to refund the amount of the allocation to TEA within
30 days.
(b) Provides that not more than five percent of a district's students in
average daily attendance are eligible for funding under this chapter for
attendance in a program for gifted and talented students.
(c) Authorizes SBOE, after each district has received allocated funds for
programs for gifted and talented students, to use up to $500,000 of the
funds allocated under Section 41.052(b)(18) for programs such as
MATHCOUNTS, Future Problem Solving, Odyssey of the Mind, and Academic
Decathlon, as long as those funds are used to train personnel and provide
program services. Requires a program, to be eligible for funding under
this subsection, to be determined by SBOE to provide services that are
effective and consistent with the state plan for gifted and talented
education.
Sec. 41.455. CAREER AND TECHNOLOGY EDUCATION PROGRAMS. (a) Requires
funds allocated under this chapter for career and technology education,
other than an indirect cost allotment established under SBOE rule, to be
used in providing career and technology education programs in grades 9
through 12 or career and technology education programs for students with
disabilities in grades 9 through 12 under Sections 29.182, 29.183, and
29.184.
(b) Authorizes the commissioner, out of the total amount appropriated for
allocations for career and technology education under Section
41.052(b)(17), to withhold an amount specified in the General
Appropriations Act, prohibited from exceeding one percent of the total
amount appropriated, to support regional career and technology education
planning. Requires the commissioner, after deducting the amount withheld
under this subsection from the total amount appropriated for allocations
for career and technology education under Section 41.052(b)(17), to reduce
each district's allocations under that section proportionately.
(c) Requires the commissioner to conduct a cost-benefit comparison
between career and technology education programs and mathematics and
science programs.
CHAPTER 42. ENRICHMENT PROGRAM
Sec. 42.001. PURPOSE. Provides that the purpose of the enrichment
program component of the Texas Education Excellence Program is to provide
each school district with the opportunity to supplement the basic program
at a level of its own choice.
Sec. 42.002. ALLOTMENT. (a) Defines "wealth per student."
(b) Provides that each school district is guaranteed a specified amount
per student in state and local funds for each cent of enrichment tax
effort up to the maximum level specified in this chapter. Provides that
the amount of state support is determined by a certain formula.
Sec. 42.003. DISTRICT ENRICHMENT TAX. (a) Authorizes the board of
trustees of a school district, subject to Section 42.004, to impose an
annual ad valorem tax for the enrichment of the public schools in the
district.
(b) Prohibits the district enrichment tax rate from exceeding the rate
permitted by Section 3(e), Article VII, Texas Constitution.
(c) Prohibits the district enrichment tax rate, notwithstanding
Subsection (b), for the 2005-2006 school year, from exceeding $0.05 for
each $100 of taxable value of property. Provides that this subsection
expires August 31, 2006.
Sec. 42.004. ENRICHMENT TAX ELECTION. (a) Prohibits a school district
from imposing an enrichment tax under Section 42.003 unless authorized by
a majority of the qualified voters of the district voting at an election
held for that purpose.
(b) Requires a proposition submitted to authorize the imposition of an
enrichment tax to include the question of whether the board of trustees
may impose annual ad valorem taxes for the further enrichment of public
schools, at a rate not to exceed the rate stated in the proposition.
Sec. 42.005. DISTRIBUTION OF ENRICHMENT PROGRAM FUNDS. (a) Requires the
commissioner, as provided by Section 41.402, for each school year, to
determine the guaranteed yield amount of state enrichment program funds to
which a school district is entitled under Section 42.002 and approve and
transmit warrants to school districts.
(b) Requires the commissioner, if the total amount of state enrichment
funds allocated to districts under this chapter for a fiscal year exceeds
the amount appropriated for that year, to reduce the total amount of state
enrichment funds allocated to each district proportionately. Provides
that the following fiscal year, a district's entitlement under this
chapter is increased by an amount equal to the reduction made under this
subsection.
Sec. 42.006. USE OF ALLOTMENT. Authorizes state enrichment funds
allocated under this chapter to be used for any legal purpose, including
capital outlay and debt service.
Sec. 42.007. COMPUTATION OF ENRICHMENT AID FOR DISTRICT ON MILITARY
RESERVATION OR AT STATE SCHOOL. Provides that state enrichment funds
allocated under this chapter for a school district located on a federal
military installation or at Moody State School are computed using the
average district enrichment tax rate and property value per student of
school districts in the county, as determined by the commissioner.
SECTION 1.03. Amends Section 29.085, Education Code, by adding
Subsections (e) and (f), as follows:
(e) Provides that the program established under this section is required
only in school districts in which the program is financed by funds
distributed under Section 41.453(f)(1) and any other funds available for
the program.
(f) Requires the commissioner to coordinate the funds withheld under
Section 41.453(f)(1) and any other funds available for the program and to
distribute those funds. Requires a school district, in order to receive
funds for the program, to apply to the commissioner. Requires the
commissioner to give a preference to the districts that apply that have
the highest concentration of students who are pregnant or who are parents.
SECTION 1.04. Amends Section 33.002, Education Code, by adding
Subsections (d) and (e), as follows:
(d) Provides that this section applies only to a school district that
receives funds distributed under Section 41.453(f)(2) or any other funds
available.
(e) Requires the commissioner to coordinate the funds withheld under
Section 41.453(f)(2) and any other funds available for the program and to
distribute those funds. Requires a school district, in order to receive
funds for the program, to apply to the commissioner. Requires the
commissioner to give a preference to the districts that apply that have
the highest concentration of at-risk students.
SECTION 1.05. Amends Sections 39.052(b) and (c), Education Code, as
follows:
(b) Requires the report card to include certain information. Makes
nonsubstantive changes.
(c) Requires the commissioner to adopt rules requiring dissemination of
the information required under Subsection (b)(4) and appropriate class
size and student performance portions of campus report cards annually to
the parent, guardian, conservator, or other person having lawful control
of each student at the campus. Makes a nonsubstantive change.
SECTION 1.06. Amends Section 39.182(a), Education Code, to require TEA,
not later than December 1 of each year, to prepare and deliver to the
governor, the lieutenant governor, the speaker of the house of
representatives, each member of the legislature, the Legislative Budget
Board, and the clerks of the standing committees of the senate and house
of representatives with primary jurisdiction over the public school system
a comprehensive report covering the preceding school year and containing
certain items and information.
SECTION 1.07. Amends Section 43.001(b), Education Code, to delete text
specifying that the available school fund is to be apportioned annually to
each county according to its scholastic population.
SECTION 1.08. Amends Subchapter A, Chapter 44, Education Code, by adding
Section 44.0071, as follows:
Sec. 44.0071. COMPUTATION OF INSTRUCTIONAL EXPENDITURES RATIO AND
INSTRUCTIONAL EMPLOYEES RATIO. (a) Requires a school district, each
fiscal year, to compute and report certain information to the
commissioner.
(b) Requires a school district, at least annually, to provide educators
employed by the district with a list of district employees determined by
the district for purposes of this section to be engaged in directly
providing classroom instruction to students. Requires the list to include
the percentage of time spent by each employee in directly providing
classroom instruction to students.
(c) Requires the computation of a district's expenditures used to fund
direct instructional activities, for purposes of this section, to include
the salary, including any associated employment taxes, and value of any
benefits provided to any district employee who directly provided classroom
instruction to students, but only in proportion to the percentage of time
spent by the employee in directly providing classroom instruction to
students.
(d) Requires the commissioner to adopt rules as necessary to implement
this section.
SECTION 1.09. Amends Section 45.003(a), Education Code, to prohibit bonds
described by Section 45.001 from being issued and taxes described by that
section, rather than Section 45.001 or 45.002, from being levied unless
authorized by a majority of the qualified voters of the district voting at
an election held for that purpose. Deletes existing language regarding a
resolution or order relating to an election.
SECTION 1.10. Amends Section 43.015, Education Code, by adding Subsection
(c-1), to requires the comptroller, on the 10th day of each month and on
the last day of the fiscal year, to transfer from the available school
fund to the Texas education fund all amounts in the available school fund
that SBOE certifies are not needed to purchase and distribute textbooks
under Chapter 31.
SECTION 1.11. Amends Section 46.033, Education Code, to provide that
bonds, including bonds issued under Section 45.006, are eligible to be
paid with state and local funds under this subchapter if certain
conditions apply.
SECTION 1.12. Amends Section 46.034(c), Education Code, to prohibit the
district, if the amount required to pay the principal of and interest on
eligible bonds in a school year is less than the amount of payments made
by the district on the bonds during the final, rather than the 20002001,
school year of the state fiscal biennium preceding the biennium in which
the district first receives assistance under this subchapter for the
payment of principal of and interest on the bonds or the district's
audited debt service collections for that school year, from receiving aid
in excess of the amount that, when added to the district's local revenue
for the school year, equals the amount required to pay the principal of
and interest on the bonds.
SECTION 1.13. Repealers: Section 33.001, as amended by Chapters 1223 and
1487, Acts of the 77th Legislature, Regular Session, 2001; Chapters 41 and
42, as added by Chapter 260, Acts of the 74th Legislature, Regular
Session, 1995; and Sections 11.151(b), 43.001(c), 43.016, 45.002, and
45.003(d), Education Code.
SECTION 1.14. (a) Provides that the Education Excellence Task Force is
composed of certain persons.
(b) Requires the Education Excellence Task Force to take certain actions.
(c) Requires the Education Excellence Task Force, not later than December
1, 2004, to submit to the lieutenant governor, the speaker of the house of
representatives, and the legislature a comprehensive study of the academic
and funding elements needed to ensure the opportunity for educational
excellence of every Texas student. Requires the report to include
specific recommendations for improving student performance on the Texas
Assessment of Knowledge and Skills, for increasing high school graduation
rates, and for revising the education funding formulas and weights to
promote educational excellence.
SECTION 1.15. (a) Provides that this article takes effect September 1,
2004, and applies beginning with the 2004-2005 school year, except as
otherwise provided by this Act.
(b) Provides that Chapter 42, Education Code, as added by this Act,
applies beginning with the 2005-2006 school year.
SECTION 1.16. (a) Provides that a school district maintenance tax rate
imposed under Sections 45.002 and 45.003, Education Code, before September
1, 2004, is void. Prohibits the board of trustees of a school district
from imposing a district enrichment tax under Chapter 42, Education Code,
as added by this Act, without holding an election in compliance with that
chapter.
(b) Provides that the repeal by this Act of Section 45.002, Education
Code, does not affect the authority of a school district to collect and
use delinquent ad valorem taxes imposed under that section before
September 1, 2004.
(c) Provides that the repeal of Chapter 42, Education Code, by this Act
does not affect the liability of a school district for excess
administrative costs during the 2003-2004 school year that the
commissioner is entitled to recover during the 2004-2005 school year under
Section 42.201(d), Education Code, as that subsection existed on January
1, 2003, and provides that the former law is continued in effect for that
purpose.
SECTION 1.17. Provides that a reference in this code or other law to the
Foundation School Program means the Texas Education Excellence Program.
Provides that a reference in this code or other law to the foundation
school fund means the Texas education fund.
ARTICLE 2. TEXAS EDUCATION FUND
SECTION 2.01. Amends Chapter 45, Education Code, by adding Subchapter I,
as follows:
SUBCHAPTER I. TEXAS EDUCATION FUND
Sec. 45.251. TEXAS EDUCATION FUND. (a) Provides that the Texas
education fund is a fund maintained by the comptroller within the general
revenue fund. Provides that the Texas education fund consists of the tax
revenue allocated to the fund under Section 5A, Article VII, Texas
Constitution.
(b) Provides that the state ad valorem tax rate is $0.75 for each $100 of
the taxable value of property subject to the tax.
(c) Requires the state, except as otherwise provided by law, to be
treated, for purposes of the state ad valorem tax, as a taxing unit under
Title 1, Tax Code (Property Tax Code).
Sec. 45.252. APPRAISAL OF PROPERTY. (a) Requires property subject to
the state ad valorem tax to be appraised by the appraisal district for the
county in which the property is located.
(b) Requires property subject to the state ad valorem tax to be appraised
in the manner provided by Title 1, Tax Code, for the appraisal of property
that is subject to ad valorem taxation by a county.
Sec. 45.253. TAX COLLECTION. (a) Requires the assessor-collector for
the county, in each county, to assess and collect state ad valorem taxes
imposed on property in that county.
(b) Requires the official, taxing unit, or political subdivision to also
assess or collect, as applicable, the state ad valorem taxes imposed on
property in that county, if the commissioners court of a county contracts
with an official, taxing unit, or political subdivision of this state for
the assessment or collection of the ad valorem taxes of the county.
(c) Provides that each assessor or collector of state ad valorem taxes is
entitled to be reimbursed by the comptroller for the actual costs incurred
by the assessor or collector in assessing or collecting state ad valorem
taxes. Provides that an assessor or collector is not entitled to be
reimbursed for any amount that is greater than the additional incremental
costs incurred in assessing or collecting the state ad valorem taxes.
(d) Requires the comptroller to take certain actions.
Sec. 45.254. DUTIES AND POWERS OF COMPTROLLER. (a) Authorizes a duty
imposed on or power granted to the governing body of a taxing unit by
Title 1, Tax Code, to, for purposes of the state ad valorem tax under this
subchapter, be exercised by the comptroller, except as otherwise provided
by this subchapter. Provides that a reference to the presiding officer of
a governing body in Title 1, Tax Code, is a reference to the comptroller
for the purposes of the state tax under this subchapter.
(b) Authorizes the comptroller to delegate to the county
assessor-collector any function of the comptroller with respect to the
state ad valorem tax and to designate the county assessor-collector as the
comptroller's agent for purposes of administration of the state ad valorem
tax.
Sec. 45.255. ADMINISTRATION AND REFUND ACCOUNTS. Requires the
comptroller to deposit to the credit of the general revenue fund in
appropriately designated accounts an amount of revenue collected from the
state ad valorem tax to pay for the comptroller's expenses in
administering this subchapter and for the payment of tax refunds that may
become payable.
Sec. 45.256. NONAPPLICABILITY OF CERTAIN OTHER TAX LAWS. Provides that
Title 2, Tax Code (State Taxation), does not apply to the state ad valorem
tax under this subchapter.
SECTION 2.02. Provides that this article takes effect January 1, 2004,
except as otherwise provided by this Act.
ARTICLE 3. AMENDMENTS TO PROPERTY TAX CODE
SECTION 3.01. Amends Subchapter A, Chapter 6, Tax Code, by adding Section
6.038, as follows:
Sec. 6.038. STATE PARTICIPATION. (a) Provides that the comptroller and
the state do not participate in the election of the board of directors of
an appraisal district, the governance or management of the district, or
the determination of the district's finances and budget.
(b) Requires the comptroller by rule to establish guidelines and criteria
under which, if the comptroller finds that generally accepted appraisal
standards and practices were not used by the appraisal district appraising
property subject to the state ad valorem tax or that the appraised values
assigned to property subject to that tax are invalid, the comptroller is
authorized to take certain actions.
SECTION 3.02. Amends Section 6.06(d), Tax Code, to provide that the state
and each taxing unit participating in the district is allocated a portion
of the amount of the budget equal to the proportion that the total dollar
amount of property taxes imposed in the district by the state or taxing
unit for the tax year in which the budget proposal is prepared bears to
the sum of the total dollar amount of property taxes imposed in the
district by the state and each participating unit for that year. Provides
that, for purposes of this subsection, only state ad valorem taxes imposed
in the county for which the district is established are considered as
state ad valorem taxes imposed in the district. Provides that if a taxing
unit participates in two or more districts, only the taxes imposed in a
district are used to calculate the unit's cost allocations in that
district. Prohibits the unit's allocation, if the number of real property
parcels in a taxing unit is less than 5 percent of the total number of
real property parcels in the district and the taxing unit imposes in
excess of 25 percent of the total amount of the property taxes imposed in
the district by all of the participating taxing units for a year, from
exceeding a percentage of the appraisal district's budget equal to three
times the unit's percentage of the total number of real property parcels
appraised by the district.
SECTION 3.03. Amends Sections 11.13(b) and (c), Tax Code, as follows:
(b) Provides that an adult is entitled to exemption from taxation by the
state for public school purposes or by a school district of $15,000 of the
appraised value of the adult's residence homestead, except that $10,000 of
the exemption does not apply to an entity operating under former Chapter
17, 18, 25, 26, 27, or 28, Education Code, as those chapters existed on
May 1, 1995, as permitted by Section 11.301, Education Code.
(c) Provides that, in addition to the exemption provided by Subsection
(b), an adult who is disabled or is 65 years of age or older is entitled
to an exemption from taxation by the state for public school purposes or
by a school district of $10,000 of the appraised value of the adult's,
rather than his, residence homestead.
SECTION 3.04. Amends Section 11.14, Tax Code, by adding Subsection (f),
to provide that Subsection (c) does not apply to the comptroller or to the
state ad valorem tax.
SECTION 3.05. Amends Section 11.251(i), Tax Code, as follows:
(i) Provides that the exemption provided by Subsection (b) does not apply
to a taxing unit that takes action to tax the property under Article VIII,
Section 1-j, Subsection (b), of the Texas Constitution. Provides that if
the property is located in a school district that taxes the property in
the tax year, the property is not exempt from state ad valorem taxes
imposed under Article VIII, Section 1-n, Texas Constitution, in that tax
year.
SECTION 3.06. Amends the heading to Section 11.26, Tax Code, to read as
follows:
Sec. 11.26. LIMITATION OF SCHOOL TAXES ON HOMESTEADS OF ELDERLY.
SECTION 3.07. Amends Section 11.26, Tax Code, by amending Subsections
(a), (b), (g), (h), (j), and (k) and adding Subsections (a-1) and (g-1),
as follows:
(a) Prohibits the state or a school district from increasing the total
annual amount of ad valorem tax it imposes on the residence homestead of
an individual 65 years or older above the amount of the tax it imposed in
the first tax year in which the individual qualified that residence
homestead for the exemption provided by Section 11.13(c) for an individual
65 years of age or older. Makes conforming changes.
(a-1) Provides that if the first tax year the individual qualified the
residence homestead for the exemption provided by Section 11.13(c) was a
tax year before the 2004, rather than 1997, tax year, certain limitations
apply.
(b) Makes conforming changes.
(g) Deletes existing text relating to school district taxes. Makes
conforming changes.
(g-1) Provides that Subsection (g) does not apply to a residence
homestead to which this subsection applies. Prohibits the state from
imposing taxes on the subsequently qualified homestead in an amount that
exceeds the amount of taxes the state would have imposed on the
subsequently qualified homestead in the first year in which the individual
receives that exemption for the subsequently qualified homestead had the
limitation on tax increases imposed by this section not been in effect,
multiplied by a fraction the numerator of which is the total amount of
school district taxes imposed on the former homestead in the last year in
which the individual received that exemption for the former homestead and
the denominator of which is the total amount of school district taxes that
would have been imposed on the former homestead in the last year in which
the individual received that exemption for the former homestead had the
limitations on tax increases imposed by this section not been in effect
and prohibits the school district from imposing taxes on the subsequently
qualified homestead in an amount that exceeds the positive amount, if any,
by which the limitation on state taxes calculated under Subdivision (1)
exceeds the amount of state taxes imposed in the first year in which the
subsequently qualified homestead receives the exemption, except as
provided by Subsection (b), if an individual who receives a limitation on
tax increases imposed by this section in a tax year before the 2004 tax
year, including a surviving spouse who receives a limitation under
Subsection (i), subsequently qualifies a different residence homestead for
an exemption under Section 11.13 and the first year in which the
subsequently qualified homestead qualifies for the exemption is a tax year
after the 2003 tax year.
(h), (j), and (k) Make conforming changes.
SECTION 3.08. Amends Section 21.03(a), Tax Code, to make conforming
changes.
SECTION 3.09. Amends Section 21.031(a), Tax Code, to make conforming
changes.
SECTION 3.10. Amends Section 23.46(d), Tax Code, to delete the phrase "of
this section" after
text referring to Subsection (c). Provides that the lien exists in favor
of the state and all taxing units for which the additional tax is imposed.
SECTION 3.11. Amends Section 23.55(b), Tax Code, to make a conforming
change.
SECTION 3.12. Amends Section 23.76(b), Tax Code, to make a conforming
change.
SECTION 3.13. Amends Section 23.86(b), Tax Code, to make a conforming
change.
SECTION 3.14. Amends Section 23.96(b), Tax Code, to make a conforming
change.
SECTION 3.15. Amends Section 23.9807(c), Tax Code, to make a conforming
change.
SECTION 3.16. Amends Section 24.39, Tax Code, as follows:
Sec. 24.39. IMPOSITION OF TAX. (a) Creates this subsection from
existing text.
(b) Requires the county assessor-collector to add each owner's rolling
stock and the value apportioned to the county as certified to that
official, rather than him, to the appraisal roll certified to that
official by the chief appraiser as provided by Section 26.01 for county
tax purposes and to the appraisal roll for state ad valorem taxes. Makes
conforming changes.
SECTION 3.17. Amends and reenacts Section 25.19(b), Tax Code, as amended
by Chapters 1358 and 1517, Acts of the 76th Legislature, Regular Session,
1999, to require the chief appraiser to separate real from personal
property and include in the notice for each a list of the taxing units in
which the property is taxable and a statement that the property is subject
to the state tax to support the public schools. Includes "and for state
taxation" in relation to the taxable value of the property. Includes "for
each taxing unit other than the state" in relation to the effective tax
rate. Includes the term "local" when referring to taxes. Makes
conforming and nonsubstantive changes.
SECTION 3.18. Amends the heading to Section 26.01, Tax Code, to read as
follows:
Sec. 26.01. SUBMISSION OF ROLLS TO STATE AND TAXING UNITS.
SECTION 3.19. Amends Sections 26.01(a), (c), and (d), Tax Code, as
follows:
(a) Requires the chief appraiser by a certain date to prepare and certify
to the comptroller that part of the appraisal roll for the district that
lists property taxable by the state. Provides that the part certified to
the assessor or the comptroller is the appraisal roll for the taxing unit
or the state. Requires the chief appraiser to consult with the assessor
for each taxing unit and the comptroller and notify each taxing unit and
the comptroller in writing by April 1 of the form in which the roll will
be provided to each unit and to the comptroller.
(c) and (d) Make conforming changes.
SECTION 3.20. Amends Chapter 26, Tax Code, by adding Section 26.011, as
follows:
Sec. 26.011. PROVISIONS EXCLUDED FOR STATE TAX. Provides that Sections
26.04, 26.041, 26.05, 26.051, 26.06, 26.07, and 26.08 do not apply to the
state ad valorem tax or to the comptroller.
SECTION 3.21. Amends Sections 26.09(b) and (c), Tax Code, as follows:
(b) Makes conforming and nonsubstantive changes.
(c) Provides a method for calculating the tax.
SECTION 3.22. Amends Section 26.12, Tax Code, by adding Subsection (e),
to provide that for purposes of this section, the state is not a taxing
unit.
SECTION 3.23. Amends Section 26.15(c), Tax Code, to authorize the
comptroller to order changes on the state tax roll to correct errors in
the mathematical computation of the state tax.
SECTION 3.24. Amends Section 31.11(a), Tax Code, to add the phrase "or
the comptroller in the case of the state ad valorem tax" in relation to
the overpayment or erroneous payment of taxes. Inserts the phrase "for
taxes other than state ad valorem taxes" in relation to refunds.
SECTION 3.25. Amends Sections 32.01(a) and (d), Tax Code, as follows:
(a) Provides that the lien to secure the payment of state ad valorem
taxes and applicable penalties and interest exists in favor of the state.
Provides that the lien to secure the payment of taxes imposed by a taxing
unit and applicable penalties and interest exists in favor of the taxing
unit having power to tax the property. Makes conforming changes.
(d) Makes a conforming change.
SECTION 3.26. Amends Section 33.01(a), Tax Code, to include a delinquent
state ad valorem tax in relation to a penalty.
SECTION 3.27. Amends Subchapter A, Chapter 33, Tax Code, by adding
Section 33.10, as follows:
Sec. 33.10. COLLECTION OF DELINQUENT STATE AD VALOREM TAXES; PENALTY.
(a) Requires the attorney general to represent the state to enforce the
collection of delinquent state ad valorem taxes, except as provided by
Subsection (b). Authorizes the attorney general to delegate the attorney
general's duties under this subsection to a county or district attorney or
contract with a private attorney for the performance of those duties.
(b) Provides that if the commissioners court of a county contracts with a
private attorney for the collection of delinquent county ad valorem taxes,
the contract applies to the collection of delinquent state ad valorem
taxes on property taxable in that county without further action. Provides
that the compensation of the private attorney for collecting delinquent
state ad valorem taxes is equal to a percentage of the amount collected
that represents the portion of that amount attributable to the additional
penalty provided by Subsection (c). Provides that if the commissioners
court of a county contracts with an official, taxing unit, or political
subdivision of this state for the collection of the ad valorem taxes of
the county that includes the collection of delinquent county taxes, the
contract applies to the collection of delinquent state ad valorem taxes on
property taxable in that county without further action.
(c) Provides that state ad valorem taxes that remain delinquent on July 1
of the year in which they become delinquent incur an additional penalty to
defray costs of collection if the collection of the delinquent taxes is
covered by a contract with a private attorney under Subsection (a) or (b).
Provides that the amount of the penalty is 15 percent of the amount of the
taxes, penalty, and interest due.
(d) Provides that a tax lien attaches in favor of the state to the
property on which the tax is imposed to secure payment of the penalty.
(e) Requires the attorney general or the person responsible for
collecting the delinquent tax to deliver a notice of delinquency and of
the penalty to the property owner at least 30 and not more than 60 days
before July 1.
(f) Provides that Sections 6.30, 33.07, and 33.08 do not apply to the
state ad valorem tax.
SECTION 3.28. Amends Sections 33.21(a) and (b), Tax Code, to make
conforming and nonsubstantive changes.
SECTION 3.29. Amends Section 33.23(b), Tax Code, to make a conforming
change.
SECTION 3.30. Amends Section 33.44(b), Tax Code, to provide that for
purposes of joining the state, citation shall be served on the county
assessor-collector. Makes conforming and nonsubstantive changes.
SECTION 3.31. Amends Section 34.04(b), Tax Code, to provide that the
attorney general represents the state at the hearing unless the attorney
general delegates that duty to the county or district attorney.
SECTION 3.32. Amends the heading to Chapter 41, Tax Code, to read as
follows:
CHAPTER 41. ADMINISTRATIVE REVIEW
SECTION 3.33. Amends Section 41.03, Tax Code, as follows:
Sec. 41.03. New heading: CHALLENGE BY STATE OR TAXING UNIT. Makes
conforming changes.
SECTION 3.34. Amends Subchapter A, Chapter 41, Tax Code, by adding
Section 41.031, as follows:
Sec. 41.031. CHALLENGE BY COMPTROLLER. Entitles the comptroller to
challenge before the appraisal review board the exclusion of property from
the appraisal roll for state ad valorem taxes.
SECTION 3.35. Amends Section 41.06(a), Tax Code, to require the secretary
of the appraisal review board to deliver to the comptroller and the
presiding officer of the governing body of each taxing unit entitled to
appear at a challenge hearing written notice of the date, time, and place
fixed for the hearing.
SECTION 3.36. Amends Section 41.07(d), Tax Code, to require the appraisal
review board, if the order of the board excludes property from the
appraisal roll for state ad valorem taxes, to also deliver a notice of
issuance and a copy of the order to the comptroller in the manner
prescribed by the comptroller.
SECTION 3.37. Amends Section 41.12, Tax Code, by adding Subsection (c),
to provide that a protest upon which a determination is pending under
Subchapter E is not considered to be an undetermined protest for the
purposes of Subsection (b).
SECTION 3.38. Amends Section 41.47(d), Tax Code, to make conforming
changes.
SECTION 3.39. Amends Section 41.41(a), Tax Code, to entitle a property
owner to protest before the appraisal review board the inclusion of the
property on or the exclusion of the property from the appraisal roll for
state ad valorem taxes.
SECTION 3.40. Amends Subchapter A, Chapter 42, Tax Code, by adding
Section 42.032, as follows:
Sec. 42.032. RIGHT OF APPEAL BY COMPTROLLER. (a) Entitles the
comptroller to appeal an order of the appraisal review board excluding
property from the appraisal roll for state ad valorem taxes.
(b) Requires the attorney general to represent the comptroller in an
appeal under this section. Authorizes the attorney general to delegate
its duties under this section to a county or district attorney or to
contract with a private attorney for the performance of those duties.
SECTION 3.41. Amends Sections 42.06(a) and (c), Tax Code, to make
conforming changes.
SECTION 3.42. Amends Sections 42.43(a)-(c), Tax Code, as follows:
(a) Provides that if the final determination of an appeal that decreases
a property owner's tax liability occurs after the property owner has paid
the owner's taxes, the taxing unit and the comptroller, if the property
is subject to the state ad valorem tax, are required to refund to the
property owner the difference between the amount of taxes paid and amount
of taxes for which the property owner is liable.
(b) and (c) Make conforming changes.
SECTION 3.43. Amends Sections 43.01 and 43.04, Tax Code, to make
conforming changes.
SECTION 3.44. Amends Subchapter A, Chapter 312, Tax Code, by adding
Section 312.0011, to define "taxing unit."
SECTION 3.45. Makes application of the changes in law made by this
article to Chapter 41, Tax Code, prospective.
SECTION 3.46. (a) Provides that except as otherwise provided by this
Act, this article takes effect January 1, 2004.
(b) Provides that this article applies to each tax year that begins on or
after January 1, 2004. Provides that the changes in law made by this
article do not apply to a tax year that begins before January 1, 2004, and
the law as it existed before January 1, 2004, is continued in effect for
purposes of taxes imposed in that tax year.
ARTICLE 4. STATE SALES AND USE TAXES
SECTION 4.01. Amends Subchapter A, Chapter 151, Tax Code, by adding
Section 151.0082, as follows:
Sec. 151.0082. "SERVICE." Defines "service."
SECTION 4.02. Amends Section 151.0101, Tax Code, by adding Subsection
(c), as follows:
(c) Provides that notwithstanding Subsection (a), "taxable service"
includes a service to which the tax imposed by this chapter applies under
Section 25, Article VIII, Texas Constitution, to the extent the service is
not otherwise exempted by this chapter.
SECTION 4.03. Amends Subchapter H, Chapter 151, Tax Code, by adding
Section 151.3135, as follows:
Sec. 151.3135. HEALTH CARE SERVICES. (a) Defines "health care service."
(b) Provides that except as provided by Subsection (c), the sale or use
of a health care service is exempted from the taxes imposed by this
chapter.
(c) Provides that this section does not apply to a health care service
for which a license is required under Chapter 451 or 651, Occupations
Code.
SECTION 4.04. Amends Subchapter H, Subchapter 151, Tax Code, by adding
Section 151.3145, as follows:
Sec. 151.3145. CERTAIN FINANCIAL ASSISTANCE AND FOOD STAMP RECIPIENTS.
(a) Provides that this section applies to a person who receives financial
assistance under Chapter 31, Human Resources Code, or nutritional
assistance under Chapter 33, Human Resources Code, through the use of an
electronic benefits transfer system.
(b) Provides that there is exempted from the taxes imposed by this
chapter 40 percent of the value of a taxable item sold, leased, or rented
to a person to which this section applies.
(c) Requires the comptroller by rule to prescribe procedures relating to
the exemption provided by this section. Requires the rules to require
that a person to whom this section applies present a government-issued
identification card bearing the picture of the person to qualify for the
exemption.
SECTION 4.05. Amends Sections 151.801(a), (b), and (c), Tax Code, as
follows:
(a) Provides that except for the amounts allocated under Subsections (b)
and (c), all proceeds from the collection of the taxes imposed by this
chapter that are not required to be deposited to the credit of the Texas
education fund under Section 25, Article VIII, Texas Constitution, must be
deposited to the credit of the general revenue fund.
(b) Provides that the amount of the proceeds from the collection of the
taxes imposed by this chapter on the sale, storage, or use of lubricating
and motor oils used to propel motor vehicles over the public roadways that
are not required to be deposited to the credit of the Texas education fund
under Section 25, Article VIII, Texas Constitution, must be deposited to
the credit of the state highway fund.
(c) Provides that the proceeds from the collection of the taxes imposed
by this chapter on the sale, storage, or use of sporting goods that are
not required to be deposited to the credit of the Texas education fund
under Section 25, Article VIII, Texas Constitution, must be credited to
the Parks and Wildlife Department and deposited as specified in the Parks
and Wildlife Code, rather than deposited according to certain conditions.
Prohibits the comptroller from crediting in excess of $32 million in
sporting goods tax revenue annually to the Parks and Wildlife Department.
SECTION 4.06. Amends Section 152.122, Tax Code, to require the
comptroller to deposit the funds received under Section 152.121 that are
not required to be deposited to the credit of the Texas education fund
under Section 26, Article VIII, Texas Constitution to the credit of the
general revenue fund, rather than depositing the funds according to
certain standards.
SECTION 4.07. Amends Subtitle C, Title 3, Tax Code, by adding Chapter
328, as follows:
CHAPTER 328. USE OF REVENUE FROM EXPANDED TAX BASE
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 328.001. Defines "expanded tax base," "expanded tax base index," and
"local taxing entity."
Sec. 328.002. COMPUTATION OF EXPANDED TAX BASE INDEX. (a) Requires the
comptroller, not later than June 1, 2004, to compute an expanded tax base
index for each local taxing entity.
(b) Requires the comptroller to establish each expanded tax base index
using generally accepted statistical techniques and any relevant
information available to the comptroller.
(c) Requires the comptroller to notify each local taxing entity of the
entity's expanded tax base index.
(d) Authorizes the comptroller to recompute a local taxing entity's
expanded tax base index if the comptroller determines that additional
information is available to produce a more accurate computation.
(e) Provides that except for mandamus to compute the expanded tax base
index, a determination under this section is not subject to appeal.
[Reserves Sections 328.003-328.050 for expansion.]
SUBCHAPTER B. USE OF EXPANDED TAX BASE REVENUE BY
ENTITY THAT IMPOSES AD VALOREM TAX
Sec. 328.051. APPLICATION OF SUBCHAPTER. Provides that this subchapter
applies to a local taxing entity that imposes an ad valorem tax,
regardless of whether the entity imposes the sales and use tax for the
entity's own benefit or for the benefit of another person such as an
industrial development corporation.
Sec. 328.052. USE TO REDUCE AD VALOREM TAXES. (a) Requires a local
taxing entity to use the revenue from the expanded tax base to reduce the
entity's property taxes unless the voters of the local taxing entity
approve the use of the revenue for a different purpose under Section
328.053.
(b) Provides that this section applies regardless of whether the entity
imposes the tax for the entity's own benefit or for the benefit of another
person such as an industrial development corporation.
Sec. 328.053. ELECTION FOR USE OF EXPANDED TAX BASE REVENUE. (a)
Authorizes the governing body of a local taxing entity to hold an election
on May 1, 2004, on the question of the use of revenue from the entity's
expanded tax base.
(b) Authorizes the governing body, if the local entity imposes the tax
for the entity's own benefit and for the benefit of another person such as
an industrial development corporation, to also hold an election on May 1,
2004, on the question of the use of the revenue from the other person's
expanded tax base.
(c) Requires the order calling the election under Subsection (a) to allow
the voters of the local taxing entity to vote on whether the expanded tax
base revenue is required to be used to reduce the entity's property taxes
or to provide additional revenue for the entity that can be used for any
general purpose of the entity. Requires the order calling the election
under Subsection (b), if the entity also imposes the tax for the benefit
of another person such as an industrial development corporation, to allow
the voters of the entity to vote on whether the expanded tax base revenue
is required to be used to reduce the entity's property taxes or to provide
additional revenue for the person for whom the entity collects the tax
that can be used for any general purpose of that person.
(d) Authorizes the governing body, in addition to the purposes described
by Subsection (c), to authorize a vote on the additional options of using
the revenue to perform certain tasks.
(e) Requires the ballot or ballots at the election or elections held
under this section to be printed to permit voting in separate propositions
on the purposes described by Subsection (c) or in three or more separate
propositions if necessary to vote on the purposes described by Subsections
(c) and (d). Requires the ballots at the election or elections, if the
governing body authorizes a vote on using the revenue for a combination of
purposes, to specify an amount or percentage of the amount of revenue that
must be used for each purpose. Provides that a voter, regardless of the
number of propositions on the ballot or ballots, may be allowed to vote in
favor of only one proposition on each ballot. Prohibits a voter from
being allowed to vote against any proposition.
Sec. 328.054. ELECTION RESULTS. (a) Authorizes the entity or person for
whom the entity imposes the tax, if the local taxing entity calls one or
more elections under Section 328.053, to use the revenue from the expanded
tax base only for the purpose or combination of purposes expressed in the
proposition that receives a majority of the votes cast in the applicable
election.
(b) Requires the governing body, if a proposition does not receive a
majority of the votes cast in the election, to call another election to
vote on the two propositions that received the highest and second-highest
number of votes in the election or that tie for the highest number of
votes. Requires the governing body, if more than two propositions tie for
the highest number of votes in the election or two or more propositions
tie for the second-highest number of votes, to draw lots to determine
which two propositions are to be voted on in the subsequent election.
(c) Requires the governing body, not later than the fifth day after the
date the final canvass of the original election is completed, to order the
subsequent election under Subsection (b). Requires the subsequent
election to be held not earlier than the 20th or later than the 30th day
after the date the final canvass of the original election is completed.
Authorizes a subsequent election, however, to be held after the 30th but
not later than the 45th day after the date the final canvass of the
original election is completed if the later date is necessary to meet
certain conditions.
(d) Authorizes the local taxing entity or person for whom the entity
imposes the tax to use the revenue from the expanded tax base only for the
purpose or combination of purposes expressed in the proposition that
receives a majority of the votes cast in the subsequent election, as
appropriate.
Sec. 328.055. REVENUE RECEIVED BEFORE USE DETERMINED. Requires the
entity or person, if, before the date the use of the revenue from the
expanded tax base is finally determined under this subchapter, a local
taxing entity receives a distribution of the share of taxes for the
benefit of the entity or for a person for whom the entity imposes the tax
and the distribution includes revenue from the expanded tax base, to
deposit the expanded tax base revenue in a special account and prohibits
the use of that money for any purpose until the approved use is finally
determined.
Sec. 328.056. USE TO REDUCE PROPERTY TAXES. Provides that if the local
taxing entity does not call an election under this subchapter or if the
voters of the entity vote to use all or part of the expanded tax base
revenue to reduce property taxes, that portion of the expanded tax base is
considered to be an "additional sales and use tax" for purposes of Title
1.
[Reserves Sections 328.057-328.100 for expansion.]
SUBCHAPTER C. EXPANDED TAX BASE FOR LOCAL TAXING ENTITY
THAT DOES NOT IMPOSE AD VALOREM TAX
Sec. 328.101. APPLICATION OF SUBCHAPTER. Provides that this subchapter
applies to a local taxing entity that imposes a sales and use tax for the
entity's benefit and that does not impose an ad valorem tax.
Sec. 328.102. USE TO REDUCE SALES AND USE TAX RATE. Requires a local
taxing entity to use the revenue from the expanded tax base to reduce the
rate at which the entity imposes its sales and use tax unless the voters
of the local taxing entity approve the use of the revenue for a different
purpose under Section 328.103.
Sec. 328.103. ELECTION FOR USE OF EXPANDED TAX BASE REVENUE. (a)
Authorizes the governing body of a local taxing entity to hold an election
on May 1, 2004, on the question of the use of revenue from the entity's
expanded tax base.
(b) Requires the order calling the election under this section to allow
the voters of the local taxing entity to vote on whether the expanded tax
base revenue is required to be used to perform certain tasks.
(c) Authorizes the governing body, in addition to the purposes described
by Subsection (b), to authorize a vote on the additional options of using
the revenue to perform certain tasks.
(d) Requires the ballot at the election held under this section to be
printed to permit voting in separate propositions on the purposes
described by Subsection (b) or in three or more separate propositions if
necessary to vote on the purposes described by Subsections (b) and (c).
Requires the ballot at an election, if the governing body authorizes a
vote on using the revenue for a combination of purposes, to specify an
amount or percentage of the amount of revenue that must be used for each
purpose. Provides that a voter, regardless of the number of propositions
on the ballot, may be allowed to vote in favor of only one proposition on
the ballot. Prohibits a voter from being allowed to vote against any
proposition.
Sec. 328.104. ELECTION RESULTS. (a) Authorizes the entity, if the local
taxing entity calls an election under Section 328.103, to use the revenue
from the expanded tax base only for the purpose or combination of purposes
expressed in the proposition that receives a majority of the votes cast in
the election.
(b) Requires the governing body, if a proposition does not receive a
majority of the votes cast in the election, to call another election to
vote on the two propositions that received the highest and second-highest
number of votes in the election or that tie for the highest number of
votes. Requires the governing body, if more than two propositions tie for
the highest number of votes in the election or two or more propositions
tie for the second-highest number of votes, to draw lots to determine
which two propositions are to be voted on in the subsequent election.
(c) Requires the governing body, not later than the fifth day after the
date the final canvass of the original election is completed, to order the
subsequent election under Subsection (b). Requires the subsequent
election to be held not earlier than the 20th or later than the 30th day
after the date the final canvass of the original election is completed.
Authorizes a subsequent election, however, to be held after the 30th but
not later than the 45th day after the date the final canvass of the
original election is completed if the later date is necessary for certain
reasons.
(d) Authorizes the local taxing entity to use the revenue from the
expanded tax base only for the purpose or combination of purposes
expressed in the proposition that receives a majority of the votes cast in
the subsequent election, as appropriate.
Sec. 328.105. TAX RATE ADJUSTMENT. (a) Requires each local taxing
entity, effective July 1, 2004, to reduce the rate at which the entity
imposes its sales and use tax by a percentage equal to the entity's
expanded tax base index.
(b) Requires the entity, if the local taxing entity calls an election
under Section 328.103 and the voters of the entity vote to use all or part
of the expanded tax base revenue for a purpose other than to reduce the
rate at which the entity imposes its sales and use tax, to increase by an
appropriate percentage, as determined by the comptroller, the entity's tax
rate as reduced under Subsection (a). Provides that the increase in the
tax rate takes effect October 1, 2004, unless the comptroller determines
that this effective date does not allow the comptroller sufficient time to
take any necessary action. Provides that if the comptroller makes this
determination, the increase takes effect on January 1, 2005.
(c) Provides that in addition to the reduction required by Subsection
(a), if the local taxing entity is imposing the sales and use tax at the
maximum level allowed by law, the maximum tax rate is also reduced
accordingly. Provides that if the tax rate is later increased under
Subsection (b), the maximum tax rate is also increased accordingly.
(d) Provides that if the local taxing entity is not imposing the sales
and use tax at the maximum level allowed by law, the maximum tax rate at
which the entity may impose the sales and use tax is automatically reduced
by a percentage equal to the entity's expanded tax base index. Provides
that if the tax rate is later increased under Subsection (b), the maximum
tax rate is also increased accordingly. Requires the comptroller to
compute the amount of the reduction or increase required by this
subsection and notify the taxing entity of the new maximum rate.
SECTION 4.08. Provides that except as otherwise provided by this Act,
this article takes effect July 1, 2004.
ARTICLE 5. RESIDENTIAL TENANT'S PROPERTY TAX RELIEF
SECTION 5.01. Amends Title 1, Tax Code, by adding Chapter 61, as follows:
CHAPTER 61. PROPERTY TAX RELIEF FOR RESIDENTIAL TENANTS
Sec. 61.001. PURPOSE. Provides that the purpose of this chapter is to
ensure that residential rental tenants receive direct and immediate
benefit from reductions in local school district ad valorem taxes until
the benefit of that tax relief is fully reflected in rental rates through
free market competition and that every residential landlord gives a
monthly rent credit or rebate, at the landlord's option, to each tenant
who is renting a residential dwelling unit in this state during 2005,
2006, and 2007.
Sec. 61.002. DEFINITIONS. Defines "landlord," "lease," "multifamily
rental dwelling property," "rent," "rental dwelling unit," and "tenant."
Sec. 61.003. APPLICABILITY. (a) Provides that this chapter applies only
to a rental dwelling unit or multifamily rental dwelling property that is
subject to ad valorem taxation by a school district.
(b) Provides that this chapter does not apply to a temporary residential
tenancy created by a contract of sale under which the buyer is entitled to
occupy the property before closing or the seller is entitled to occupy the
property after closing for a term of not more than 90 days.
Sec. 61.004. CREDIT OR REBATE TO TENANT OF LANDLORD'S PROPERTY TAX
SAVINGS. Requires a landlord to provide each of the landlord's tenants
with a monthly credit or rebate on the tenant's rent to reflect a portion
of the landlord's school district ad valorem tax savings for 2004, 2005,
and 2006.
Sec. 61.005. NOTICE BY CHIEF APPRAISERS. (a) Requires the chief
appraiser of each appraisal district, on or before October 1, 2004, or as
soon as practicable after that date, to send to all residential property
owners a notice describing the requirements of this chapter. Requires the
notice to contain language substantially similar to a specific format.
(b) Authorizes the notice required under Subsection (a) to be sent to
property owners as part of another communication sent by the appraisal
district under Section 31.01 and provides that the notice is not required
to be sent to property owners as a separate communication.
(c) Requires each appraisal district, in November and December 2004, to
place at least one advertisement monthly in a newspaper of general
circulation in the county for which the appraisal district is established.
Requires the advertisement to be in 14-point or larger type and contain
language substantially similar to the language prescribed by Subsection
(a).
Sec. 61.006. TECHNICAL ASSISTANCE BY COMPTROLLER. (a) Requires the
comptroller, not later than September 1, 2004, to develop materials in
plain language to assist landlords in complying with this chapter.
Requires the materials to be printed in both English and Spanish and
requires copies to be sent to each appraisal district on or before
September 15, 2004. Requires a copy of the materials to be provided
without cost to any property owner on request.
(b) Requires the comptroller to provide necessary technical assistance to
appraisal districts and landlords in complying with this chapter.
Sec. 61.007. TAX SAVINGS CALCULATIONS BY LANDLORDS. (a) Requires a
landlord, for each year to which this chapter applies, to determine the
monthly school district ad valorem tax savings payable to the landlord's
tenants according to certain criteria.
(b) Requires the amount of the rent credit or rebate under Subsection (a)
to be calculated on a per-dwelling-unit basis and not on a per-tenant
basis.
(c) Provides that if the amount of the rent credit or rebate calculated
under Subsection (a) is less than zero, the rent credit or rebate is zero.
Sec. 61.008. DATE OF REQUIRED CREDIT OR REBATE. (a) Requires a
landlord, if a landlord gives a monthly credit to a tenant under this
chapter, to give the credit on the due date for each month's rent.
(b) Requires the landlord, if a landlord pays a monthly rent rebate to
the tenant, to pay the rebate not later than the 10th day after the date
the tenant pays the entire rent due for the month. Provides that a
landlord is presumed to have timely paid a rebate if the rebate is placed
in the United States mail and postmarked on or before that date.
(c) Provides that if the tenant's rent is payable weekly, the amount of
the weekly credit or rebate is equal to 1/52 of the credit or rebate for
the entire year.
Sec. 61.009. LANDLORD'S NOTICE TO TENANTS. (a) Requires the landlord,
in connection with each lease agreement for a rental dwelling unit entered
into before January 1, 2005, that has not terminated or expired as of that
date, to provide a notice to each tenant on or before January 5, 2005, in
boldface, 14-point or larger type, that substantially states certain
information.
(b) Requires the notice required by Subsection (a) to be translated and
printed in English and Spanish. Requires a notice provided by a landlord
under this section to be provided in both languages if the rental dwelling
unit is located in a county in which the Hispanic population exceeds 25
percent of the total population of that county according to the most
recent federal census information available.
Sec. 61.010. CREDIT OR REBATE FOR MULTIPLE TENANTS. Provides that if two
or more tenants are on a lease for the same rental dwelling unit, the
credit or rebate under this chapter must be provided jointly to all
tenants renting the dwelling.
Sec. 61.011. PENALTIES. (a) Provides that a landlord who fails to
comply with this chapter is liable to the affected tenant for a civil
penalty of $100 and treble the amount of any required rent credit or
rebate that was not provided to the tenant.
(b) Provides that in a suit involving the payment of a rent credit or
rebate, the prevailing party is entitled to recover reasonable attorney's
fees from the nonprevailing party.
Sec. 61.012. TAX APPRAISALS. Prohibits a chief appraiser or an appraisal
district, in tax years 2004-2007, from considering a reduction of school
district ad valorem taxes attributable to this chapter in any
determination of the appraised value of a rental dwelling unit, real
property containing a rental dwelling unit, or a multifamily rental
dwelling property.
Sec. 61.013. COMPTROLLER STUDY. (a) Requires the comptroller to issue a
preliminary report not later than March 1, 2006, if sufficient data is
available, and to issue a final report not later than December 1, 2007, to
the governor, the lieutenant governor, and the speaker of the house of
representatives on the implementation, administration, and effect of this
chapter, including findings regarding certain information.
(b) Requires the comptroller, in preparing the report, to consider the
need to recommend alternative methods for providing school district ad
valorem tax relief to persons who rent their homes.
Sec. 61.014. EXPIRATION. Provides that this chapter expires January 1,
2008.
SECTION 5.02. Amends Chapter 1, Tax Code, by adding Section 1.16 to
provide that the expiration of Chapter 61 does not affect the liability
of a landlord or other person for any amount arising under Chapter 61
before the expiration, and to provide that the law governing that
liability remains in effect notwithstanding the expiration for purposes of
enforcing or satisfying the liability.
SECTION 5.03. Provides that Chapter 61, Tax Code, as added by this
article, takes effect January 1, 2004, and applies only to a tax year that
begins on or after that date.
ARTICLE 6. CONTINGENT EFFECT
SECTION 6.01. Provides that this Act takes effect only if the
constitutional amendment proposed by ____.J.R. No. ____, 78th Legislature,
Regular Session, 2003, is approved by the voters. Provides that if that
proposed constitutional amendment is not approved by the voters, this Act
has no effect.