78R4750 KSD-D
By: West S.B. No. 754
A BILL TO BE ENTITLED
AN ACT
relating to the creation of higher education enhancement districts;
authorizing a sales and use tax or a property tax.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Title 3, Education Code, is amended by adding
Subtitle I to read as follows:
SUBTITLE I. HIGHER EDUCATION DISTRICTS
CHAPTER 159. HIGHER EDUCATION ENHANCEMENT DISTRICTS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 159.001. DEFINITIONS. In this chapter:
(1) "Coordinating board" means the Texas Higher
Education Coordinating Board.
(2) "District" means a higher education enhancement
district created under this chapter.
(3) "Regional university" means:
(A) a general academic teaching institution as
defined by Section 61.003, other than Texas A&M University and The
University of Texas at Austin; or
(B) a system center of a general academic
teaching institution that by statute is authorized to operate as a
general academic teaching institution after reaching specified
student enrollment goals.
(4) "Service territory" means a geographical area
established by the coordinating board under Section 159.003 in
which a district may be created under this chapter.
Sec. 159.002. PURPOSE. The purpose of this chapter is to
enable a regional university and the community served by the
university, through the creation of a higher education enhancement
district, to elect to provide local funding to supplement endowment
and scholarship funds at the university and to otherwise enhance
the quality of education provided by the university.
Sec. 159.003. ESTABLISHMENT OF SERVICE TERRITORIES. (a)
Except as provided by Subsection (b) or (c), the coordinating board
shall establish a service territory for each regional university.
(b) The coordinating board shall establish a single service
territory for two or more regional universities located in the same
county. The service territory established under this subsection
must include the entire county in which the universities are
located.
(c) The coordinating board may establish a single service
territory for two or more regional universities located in adjacent
counties if the coordinating board determines, based on the
criteria described in Subsection (d), that the universities serve
primarily the same areas.
(d) In establishing a service territory under this section,
the coordinating board shall attempt to include areas:
(1) that are in closest geographic proximity to the
university or universities;
(2) that are primarily served by the university or
universities; and
(3) that will most benefit from the improvements and
services that would be provided by a district.
(e) A service territory created under this section may not
contain territory that is contained within another service
territory.
(f) Except as provided by Subsection (b), a service
territory may consist of whole counties or portions of counties.
(g) Before establishing a service territory under this
section, the coordinating board shall hold, after notice published
in one or more newspapers having general circulation in the
counties in which the service territory may be established, at
least one public hearing at which any interested person may appear
and offer testimony.
Sec. 159.004. DISTRICT AUTHORIZATION. A higher education
enhancement district may be created, operated, and financed as
provided by this chapter.
Sec. 159.005. PERFORMANCE REVIEW BY COORDINATING BOARD.
The coordinating board shall conduct a performance review of each
district created under this chapter every five years.
[Sections 159.006-159.050 reserved for expansion]
SUBCHAPTER B. CREATION OF DISTRICT
Sec. 159.051. CREATION OF DISTRICT. (a) A district may be
created under this subchapter to include all of or any portion of a
service territory.
(b) Only one district may be created in each service
territory. The district must include the campus of each regional
university located in the service territory.
Sec. 159.052. REQUEST FOR HEARING ON CREATION OF DISTRICT.
(a) Before a district may be created in a service territory that
includes only one regional university, the president of the
regional university located in the service territory or a person
designated by the president must submit to the coordinating board a
written request that the coordinating board hold a public hearing
on the creation of the district.
(b) Before a district may be created in a service territory
that includes more than one regional university, the presidents of
the universities or their designees must jointly submit to the
coordinating board a written request that the coordinating board
hold a public hearing on the creation of the district. A district
may not be created in the service territory without the agreement of
each regional university in the territory.
(c) A request under this section must include a description
of the proposed district and state whether the district would
impose a sales and use tax or a property tax.
Sec. 159.053. HEARING; NOTICE. (a) On receipt of a written
request for a hearing under Section 159.052, the coordinating board
shall hold a public hearing on the request in each county having
territory located in the proposed district.
(b) The coordinating board shall give notice of the hearing
by publishing notice at least twice in one or more newspapers having
general circulation in the county. The notice must be published
before the 30th day before the date set for the hearing. The notice
may not be smaller than one-quarter page of a standard-size
newspaper and the headline on the notice must be in 18-point or
larger type.
(c) The notice must include:
(1) the date, time, and location of the hearing;
(2) a statement of the general purpose and effect of
creating a district in the service territory;
(3) a map of the proposed district or a description of
the boundaries or territory of the proposed district sufficient to
provide a person with reasonable notice that the person's property
may be included in the proposed district; and
(4) a statement that all interested persons may appear
and offer testimony for or against the creation of a district.
Sec. 159.054. COORDINATING BOARD FINDINGS. If, after
holding a hearing in each county having territory located in the
proposed district, the coordinating board finds that it is in the
best interest of the voters of those counties to provide the voters
with an opportunity to authorize the creation of a district and the
imposition of a sales and use tax or a property tax, as requested
under Section 159.052, the coordinating board shall submit its
findings to the county judge of each county located in the proposed
district in the form of a petition described by Section 159.055.
Sec. 159.055. CONTENTS OF PETITION. (a) The petition
prescribed by Section 159.054 must:
(1) state that the district is to be created and
operate under this chapter if approved by the voters;
(2) state the name of the proposed district;
(3) contain the proposed district's boundaries as
designated by metes and bounds or other sufficient legal
description;
(4) show that none of the territory in the proposed
district is included in another higher education enhancement
district;
(5) state that permanent supervisors will be elected;
(6) state the names of five temporary supervisors from
different geographic regions of the proposed district that the
commissioners court must appoint under Section 159.061; and
(7) state whether the district will impose a sales and
use tax or a property tax to be voted on at the creation election.
(b) To be eligible to be named in the petition as a temporary
supervisor, a person must be:
(1) a resident of the proposed district; and
(2) a qualified voter.
Sec. 159.056. FILING OF PETITION; HEARING; ORDERING
ELECTION. (a) If the petition is in proper form, the county judge
shall:
(1) accept the petition; and
(2) file the petition with the county clerk.
(b) At the next regular or special session of the
commissioners court held after the petition is filed with the
county clerk, the commissioners court shall set a place, date, and
time for the hearing to consider the petition.
(c) The county clerk shall issue a notice of the hearing in
accordance with Chapter 551, Government Code.
(d) At the time and place set for the hearing, the
commissioners court shall consider the petition. If the
commissioners court finds that the petition is in proper form and
contains the information required by Section 159.055, the court
shall grant the petition at the conclusion of the hearing.
(e) If a petition is granted, subject to Subsection (f) the
commissioners court shall order an election in the portion of the
proposed district located in that county to confirm the district's
creation and to authorize the imposition of a sales and use tax or a
property tax at a rate not to exceed the limits provided by law. The
election shall be held on the next uniform election date in November
that occurs at least 90 days after the date the election is ordered.
(f) If the proposed district will contain territory in more
than one county, the commissioners courts may not order an election
until the commissioners court of each county in which the district
will be located has granted the petition.
Sec. 159.057. ELECTION ORDER. The order calling the
election must state the nature of the election, including the
proposition that is to appear on the ballot.
Sec. 159.058. BALLOT PROPOSITION. The ballot for the
election shall be printed to permit voting for or against the
proposition: "The creation of the ____________ (name of regional
university or universities) Higher Education Enhancement District
and the adoption of a _________ (local sales and use tax or property
tax, as applicable) for the district at a rate not to exceed the
limits provided by law."
Sec. 159.059. ELECTION RESULTS; CREATION OF DISTRICT. (a)
The commissioners court of each county in which the election is held
is the canvassing authority for the election in that county. The
canvass shall be conducted in the manner provided by law for a local
canvass.
(b) If the election is held in one county, the commissioners
court of that county shall declare the proposition to have been
approved and enter an order creating the district if a majority of
the votes cast in the election favor creation of the district. If a
majority of the votes cast do not favor creation of the district,
the commissioners court shall declare the proposition to create the
district to have been defeated.
(c) If the election is held in more than one county, the
commissioners court of each county, on receiving the returns of the
election, shall canvass the returns and certify the results of the
election in that county to the commissioners court of the county in
which the election is held having the greatest population. On
receipt of the returns of all the counties, the commissioners court
of the county with the greatest population shall conduct a final
canvass of the returns and shall certify the final results of the
election. The commissioners court of that county shall declare the
proposition to have been approved and enter an order creating the
district if a majority of the votes cast in the election in the
entire area in which the election is held favor the creation of the
district. If a majority of the votes cast in the election in the
entire area do not favor creation of the district, the
commissioners court shall declare the proposition to create the
district to have been defeated.
(d) As soon as practicable, the commissioners court
ordering creation of a district shall notify the comptroller of the
results of the election in the manner specified by the comptroller.
Sec. 159.060. RESTRICTION ON SUBSEQUENT ELECTION. If the
proposition to create the district is defeated, another election on
the question of creating a district in the same service territory
may not be held before the first anniversary of the election.
Sec. 159.061. TEMPORARY SUPERVISORS. (a) The
commissioners court that enters an order creating a district shall
appoint those persons named as temporary supervisors in the
petition as the temporary supervisors of the district on the date
the commissioners court enters the order creating the district.
(b) The temporary supervisors serve as supervisors of the
district until a majority of the initial supervisors take office.
(c) A vacancy in the office of temporary supervisor shall be
filled by appointment by the remaining temporary supervisors.
[Sections 159.062-159.100 reserved for expansion]
SUBCHAPTER C. BOARD OF SUPERVISORS
Sec. 159.101. BOARD OF SUPERVISORS. (a) The district is
governed by a board of five supervisors.
(b) The supervisors shall be elected at the uniform election
date in May of each year and serve staggered terms of two years.
Sec. 159.102. INITIAL SUPERVISORS' ELECTION. (a) The
initial supervisors shall be elected at large at an election held on
the next uniform election date in May that is at least 60 days after
the date the district is created.
(b) The initial supervisors shall draw lots to determine
which two initial supervisors serve one-year terms and which three
initial supervisors serve two-year terms.
(c) After the district confirms the initial supervisors,
the district may establish single-member election districts within
the district from which supervisors may be elected in subsequent
elections.
Sec. 159.103. QUALIFICATIONS FOR OFFICE. To be eligible to
be a candidate for or to serve as a supervisor, a person must be:
(1) a resident of the district; and
(2) a qualified voter.
Sec. 159.104. BOARD VACANCY. A vacancy in the office of a
supervisor shall be filled for the unexpired term by appointment by
the remaining supervisors.
[Sections 159.105-159.150 reserved for expansion]
SUBCHAPTER D. CHANGE IN BOUNDARIES
Sec. 159.151. EXPANSION OF DISTRICT TERRITORY. Any portion
of the service territory not already included in the district may be
added to the district in any manner in which territory may be added
to a junior college district under Subchapter D, Chapter 130.
[Sections 159.152-159.200 reserved for expansion]
SUBCHAPTER E. SALES AND USE TAX
Sec. 159.201. COUNTY SALES AND USE TAX ACT APPLICABLE. (a)
Except as provided by Subsection (b) or as inconsistent with this
chapter, Chapter 323, Tax Code, applies to a sales and use tax
authorized by this chapter in the same manner as that chapter
applies to the tax authorized by that chapter.
(b) Sections 323.101(b), (c), (d), and (e), Tax Code, do not
apply to a sales and use tax authorized by this chapter.
Sec. 159.202. IMPOSITION OF SALES AND USE TAX. If the tax
is approved by the voters at the election authorizing the creation
of the district, the district may impose a sales and use tax as
provided by this subchapter.
Sec. 159.203. SALES AND USE TAX RATE; LIMITATIONS ON RATE.
(a) For the first four quarters for which the tax is to be imposed,
and for each subsequent year, the board of supervisors shall set the
rate of the district's sales and use tax at a rate the board
considers appropriate for the purposes of the district, not to
exceed any of the following:
(1) one-half of one percent of taxable receipts;
(2) the rate that, if applied to the total taxable
receipts in the territory constituting the district for the most
recent four calendar quarters for which information is available,
would generate $30 million in taxes for each regional university in
the district; or
(3) the rate that, if applied to the total taxable
receipts for the most recent four calendar quarters for which
information is available, would generate $60 in taxes for each
semester credit hour used by the Legislative Budget Board under
Section 61.059 for the most recent biennium to establish the base
level of appropriations funding for the regional university or
universities for which the district is created.
(b) If in any year for which the board of supervisors sets a
tax rate the tax imposed by the district generates a total amount of
tax revenue in excess of the amount of taxes specified in Subsection
(a)(2) or (3) for that year, in setting the rate of the district's
sales and use tax for the second year following that year, the tax
rate limitations computed under Subsections (a)(2) and (3) are
reduced by the rate that, when added to the total taxable receipts
used in the computations under Subsections (a)(2) and (3), would
generate an amount of total taxes equal to the excess amount of tax
revenue generated.
(c) The tax rate set by the board must be in increments of
not less than one-eighth of one percent.
(d) On request, the comptroller shall provide the board of
supervisors with the information the board requires to comply with
this section.
Sec. 159.204. EFFECTIVE DATE OF SALES AND USE TAX. (a) The
tax takes effect on the first day of the first calendar quarter
occurring after the expiration of the first complete calendar
quarter occurring after the date on which the comptroller receives
a notice of the results of the election creating the district.
(b) If the comptroller determines that an effective date
provided by Subsection (a) will occur before the comptroller can
reasonably take the action required to begin collecting the tax,
the comptroller may postpone the effective date until the first day
of the next calendar quarter.
Sec. 159.205. EFFECT OF ADOPTION OF TAX ON OTHER LAW. If
another law imposes a limit on the combined rate of sales tax
imposed by political subdivisions of the state having territory at
any location in the district, the total limit provided by that law
is increased by one-half of one percent in the territory of the
district.
[Sections 159.206-159.250 reserved for expansion]
SUBCHAPTER F. PROPERTY TAXES
Sec. 159.251. IMPOSITION OF PROPERTY TAX. If the tax is
approved by the voters at the election authorizing the creation of
the district, the district may impose and collect a property tax as
provided by this subchapter.
Sec. 159.252. PROPERTY TAX RATE; LIMITATIONS. (a) The
board of supervisors shall annually set the rate of the district's
property tax at a rate the board considers appropriate for the
purposes of the district, not to exceed the rate that, if applied to
the taxable property in the district, would generate the lesser of:
(1) $30 million in taxes for each regional university
in the district; or
(2) $60 in taxes for each semester credit hour used by
the Legislative Budget Board under Section 61.059 for the most
recent biennium to establish the base level of appropriations
funding for the regional university or universities for which the
district is created.
(b) If the total amount of taxes collected in a calendar
year exceeds the amount of taxes specified in Subsection (a)(1) or
(2) for the preceding year, the amounts used under Subsections
(a)(1) and (2) to compute the maximum tax rate for the next tax year
shall be reduced by the amount of the excess taxes collected.
Sec. 159.253. PROPERTY TAX ASSESSOR-COLLECTOR. The
district may employ a person to assess or collect taxes for the
district or may contract with another governmental entity as
provided by other law for the assessment or collection of the
district's taxes.
[Sections 159.254–159.300 reserved for expansion]
SUBCHAPTER G. GENERAL TAX PROVISIONS
Sec. 159.301. USE OF TAX REVENUE. (a) The board of
supervisors of the district shall retain the portion of the revenue
from a tax imposed by the district under this chapter necessary to
cover the district's expenses as provided by the district's budget,
and shall deliver the remaining tax revenue to the regional
university or universities for which the district is created. If
the district includes more than one regional university, the board
of supervisors of the district shall apportion that tax revenue
among the universities in proportion to the number of semester
credit hours used by the Legislative Budget Board under Section
61.059 for the most recent biennium to establish the base level of
appropriations funding for each university.
(b) Each regional university shall use revenue received
under Subsection (a) as follows:
(1) one-third of the revenue shall be used to provide
scholarships to students who reside in the district;
(2) one-third of the revenue shall be deposited in one
or more of the university's endowment funds to support educational
or research activities of the university; and
(3) one-third of the revenue shall be used by the
university for any purposes approved by the university's governing
board, other than funding the university's endowments or providing
scholarships.
[Sections 159.302-159.350 reserved for expansion]
SUBCHAPTER H. HIGHER EDUCATION ENHANCEMENT FUND
Sec. 159.351. NATURE AND PURPOSE OF FUND. (a) The higher
education enhancement fund is a special fund in the state treasury
outside the general revenue fund.
(b) The money in the higher education enhancement fund may
be used only to provide grants under this subchapter.
Sec. 159.352. ADMINISTRATION. The coordinating board
administers the higher education enhancement fund and shall adopt
rules for the administration of the fund and this subchapter.
Sec. 159.353. GRANTS. (a) The coordinating board shall
award grants from the higher education enhancement fund to regional
universities to cover all or part of the initial costs of creating a
higher education enhancement district under this chapter.
(b) The amount of a grant may not exceed $2,500.
(c) The coordinating board shall establish criteria for the
award of a grant under this section.
Sec. 159.354. SOURCE OF FUNDS. (a) The coordinating board
may solicit and accept gifts and grants from any public or private
source for the purposes of this subchapter.
(b) The legislature may appropriate money for the purposes
of this subchapter.
SECTION 2. The Texas Higher Education Coordinating Board
shall establish service territories for regional universities as
required by Section 159.003, Education Code, as added by this Act,
and shall adopt initial rules for the administration of the higher
education enhancement fund as required by Section 159.352,
Education Code, as added by this Act, as soon as practicable after
the effective date of this Act. The coordinating board may adopt
those initial rules in the manner provided by law for emergency
rules.
SECTION 3. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2003.