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79S30798 E
By: Chisum, Eissler, Branch, H.B. No. 1
Howard of Fort Bend, Hartnett
Substitute the following for H.B. No. 1:
By: Keffer of Eastland C.S.H.B. No. 1
A BILL TO BE ENTITLED
AN ACT
relating to public school finance and property tax rate
compression; making an appropriation.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
ARTICLE 1. PUBLIC SCHOOL FINANCE AND PROPERTY TAX RATE COMPRESSION
SECTION 1.01. Section 41.093, Education Code, is amended by
amending Subsection (a) and adding Subsection (b-1) to read as
follows:
(a) Subject to Subsection (b-1), the [The] cost of each
credit is an amount equal to the greater of:
(1) the amount of the district's maintenance and
operations tax revenue per student in weighted average daily
attendance for the school year for which the contract is executed;
or
(2) the amount of the statewide district average of
maintenance and operations tax revenue per student in weighted
average daily attendance for the school year preceding the school
year for which the contract is executed.
(b-1) The commissioner shall exclude maintenance and
operations tax revenue resulting from amounts by which maintenance
and operations tax rates exceed $1.33 on the $100 valuation of
taxable property in computing the amounts described by Subsections
(a)(1) and (2) and determining the cost of an attendance credit.
SECTION 1.02. Subchapter E, Chapter 42, Education Code, is
amended by adding Sections 42.2516 and 42.261 to read as follows:
Sec. 42.2516. ADDITIONAL STATE AID FOR TAX REDUCTION. (a)
Subject to Subsection (e), but notwithstanding any other provision
of this title, a school district is entitled to the amount of state
revenue necessary to maintain state and local revenue per student
in weighted average daily attendance in the amount equal to the
greater of:
(1) the amount of state and local revenue per student
in weighted average daily attendance for the maintenance and
operation of the district to which the district would have been
entitled for the 2006-2007 school year under this chapter, as it
existed on January 1, 2006, or, if the district would have been
subject to Chapter 41, as that chapter existed on January 1, 2006,
the amount to which the district would have been entitled under that
chapter, based on the funding elements in effect for the 2005-2006
school year, if the district imposed a maintenance and operations
tax at the rate adopted by the district for the 2005 tax year; or
(2) the amount of state and local revenue per student
in weighted average daily attendance for the maintenance and
operation of the district to which the district would have been
entitled for the 2006-2007 school year under this chapter, as it
existed on January 1, 2006, or, if the district would have been
subject to Chapter 41, as that chapter existed on January 1, 2006,
the amount to which the district would have been entitled under that
chapter, based on the funding elements in effect for the 2005-2006
school year, if the district imposed a maintenance and operations
tax at the rate equal to the rate described by Section 26.08(i) or
(k)(1), Tax Code, as applicable, for the 2006 tax year.
(b) In determining the amount to which a district would be
entitled under Subsection (a), the commissioner shall include:
(1) any amounts described by Rider 69, page III-19,
Chapter 1369, Acts of the 79th Legislature, Regular Session, 2005
(the General Appropriations Act);
(2) for a school district that received additional
revenue for the 2005-2006 school year as a result of an agreement
under Subchapter E, Chapter 41, the amount of that additional
revenue, which is the amount by which the total maintenance and
operations revenue available to the district exceeded the total
maintenance and operations revenue that would have been available
to the district if the district had not entered into the agreement
and had imposed a maintenance and operations tax at the rate of
$1.50 on the $100 valuation of taxable property;
(3) any amount necessary to reflect an adjustment made
by the commissioner under Section 42.005;
(4) any amount necessary to reflect an adjustment made
by the commissioner under Section 42.2521; and
(5) any amount necessary to reflect an adjustment made
by the commissioner under Section 42.2531.
(c) The amount of revenue to which a school district is
entitled because of the technology allotment under Section 32.005
is not included in making a determination under Subsection (a).
(d) For purposes of determining the amount of revenue to
which a school district is entitled under this section, the
commissioner shall use the average tax collection rate for the
district for the 2003, 2004, and 2005 tax years.
(e) If a school district adopts a maintenance and operations
tax rate that is below the rate equal to 88.67 percent of the
maintenance and operations tax rate adopted by the district for the
2005 tax year, the commissioner shall reduce the district's
entitlement under this section in proportion to the amount by which
the adopted rate is less than the rate equal to 88.67 percent of the
rate adopted by the district for the 2005 tax year.
(f) A school district that is required to take action under
Chapter 41 to reduce its wealth per student to the equalized wealth
level and that is entitled to state revenue under this section may
receive that revenue through an adjustment against the total amount
of attendance credits required to be purchased under Subchapter D,
Chapter 41, or the total number of nonresident students required to
be educated under Subchapter E, Chapter 41, as determined by the
commissioner.
(g) If a school district imposes a maintenance and
operations tax at a rate greater than the rate equal to 88.67
percent of the maintenance and operations tax rate adopted by the
district for the 2005 tax year, the commissioner may not reduce the
amount to which the district is entitled under this section on the
basis of the additional revenue collected by the district.
(h) The commissioner may adopt rules necessary to
administer this section.
(i) The commissioner shall determine the amount of state
funds to which a school district is entitled under this section. The
commissioner's determination is final and may not be appealed.
Sec. 42.261. CERTAIN FUNDS APPROPRIATED FOR PURPOSE OF TAX
REDUCTION. (a) Funds appropriated by the legislature for a tax
year for the purpose of reducing a school district's maintenance
and operations tax rate and providing state aid under Section
42.2516:
(1) are not excess funds for purposes of Section
42.2517;
(2) are not available for purposes of Section 42.2521
or 42.2522;
(3) may not be used for purposes of Chapter 46; and
(4) may not be provided by the commissioner to a school
district for a purpose other than reduction of the district's
maintenance and operations tax rate.
(b) The commissioner may adopt rules necessary to
administer this section.
SECTION 1.03. Section 42.302, Education Code, is amended by
adding Subsection (f) to read as follows:
(f) If a school district imposes a maintenance and
operations tax at a rate greater than the rate equal to 88.67
percent of the maintenance and operations tax rate adopted by the
district for the 2005 tax year, the district is entitled to receive
an allotment under this section on the basis of that greater tax
effort.
SECTION 1.04. Section 21.402(a), Education Code, is amended
to read as follows:
(a) Except as provided by Subsection (d), (e), or (f), a
school district must pay each classroom teacher, full-time
librarian, full-time counselor certified under Subchapter B, or
full-time school nurse not less than the minimum monthly salary,
based on the employee's level of experience, determined by the
following formula:
MS = SF x FS
where:
"MS" is the minimum monthly salary;
"SF" is the applicable salary factor specified by Subsection
(c); and
"FS" is the amount, as determined by the commissioner under
Subsection (b), of state and local funds per weighted student,
including funds provided under Section 42.2516, available to a
district eligible to receive state assistance under Section 42.302
with a maintenance and operations [an enrichment] tax rate of $1.33
on the $100 valuation of taxable property[, as defined by Section
42.302, equal to the maximum rate authorized under Section
42.303], except that the amount of state and local funds per
weighted student does not include the amount attributable to the
increase in the guaranteed level made by Chapter 1187 [H.B. No.
3343], Acts of the 77th Legislature, Regular Session, 2001.
SECTION 1.05. Section 30.003, Education Code, is amended by
adding Subsection (f-1) to read as follows:
(f-1) The commissioner shall determine the total amount
that the Texas School for the Blind and Visually Impaired and the
Texas School for the Deaf would have received from school districts
in accordance with this section if __.B. No. ____, Acts of the 79th
Legislature, 3rd Called Session, 2006, had not reduced the
districts' share of the cost of providing education services. That
amount, minus any amount the schools do receive from school
districts, shall be set aside as a separate account in the
foundation school fund and appropriated to those schools for
educational purposes.
SECTION 1.06. Section 26.08, Tax Code, is amended by
amending Subsections (i) and (k) and adding Subsections (n), (o),
(p), and (q) to read as follows:
(i) For purposes of this section, the effective maintenance
and operations [rollback] tax rate of a school district is [the sum
of:
[(1)] the tax rate that, applied to the current total
value for the district, would impose taxes in an amount that, when
added to state funds that would be distributed to the district under
Chapter 42, Education Code, for the school year beginning in the
current tax year using that tax rate, would provide the same amount
of state funds distributed under Chapter 42 and maintenance and
operations taxes of the district per student in weighted average
daily attendance for that school year that would have been
available to the district in the preceding year if the funding
elements for Chapters 41 and 42, Education Code, for the current
year had been in effect for the preceding year[;
[(2) the rate of $0.06 per $100 of taxable value; and
[(3) the district's current debt rate].
(k) For purposes of this section, for the [2003, 2004,
2005,] 2006, 2007, or 2008 tax year, for a school district that is
entitled to state funds under Sections 1581.1015(d), (e), and (f)
[Section 4(a-1), (a-2), (a-3), (a-4), (a-5), or (a-6), Article
3.50-9], Insurance Code, the effective maintenance and operations
[rollback] tax rate of the district is the sum of:
(1) the tax rate that, applied to the current total
value for the district, would impose taxes in an amount that, when
added to state funds that would be distributed to the district under
Chapter 42, Education Code, for the school year beginning in the
current tax year using that tax rate, would provide the same amount
of state funds distributed under Chapter 42 and maintenance and
operations taxes of the district per student in weighted average
daily attendance for that school year that would have been
available to the district in the preceding year if the funding
elements for Chapters 41 and 42, Education Code, for the current
year had been in effect for the preceding year; and
(2) the tax rate that, applied to the current total
value for the district, would impose taxes in the amount that, when
added to state funds that would be distributed to the district under
Chapter 42, Education Code, for the school year beginning in the
current tax year using that tax rate, permits the district to comply
with Section 1581.052 [3, Article 3.50-9], Insurance Code[;
[(3) the rate of $0.06 per $100 of taxable value; and
[(4) the district's current debt rate].
(n) For purposes of this section, the rollback tax rate of a
school district whose maintenance and operations tax rate for the
2005 tax year was less than $1.50 per $100 of taxable value is:
(1) for the 2006 tax year, the sum of:
(A) the lesser of the following tax rates:
(i) the rate of $1.36 per $100 of taxable
value; or
(ii) the sum of the following tax rates:
(a) the effective maintenance and
operations tax rate of the district as computed under Subsection
(i) or (k), as applicable; and
(b) the rate of $0.06 per $100 of
taxable value; and
(B) the district's current debt rate; and
(2) for the 2007 and subsequent tax years, the
following tax rate, as applicable:
(A) if in the 2006 or any subsequent tax year the
district adopted a maintenance and operations tax rate of at least
$1.36 per $100 of taxable value, the sum of:
(i) the lesser of the following tax rates:
(a) the highest maintenance and
operations tax rate adopted by the district in any of those years;
or
(b) the sum of the following tax
rates:
(1) the effective maintenance
and operations tax rate of the district as computed under
Subsection (i) or (k), as applicable; and
(2) the rate of $0.06 per $100 of
taxable value; and
(ii) the district's current debt rate; or
(B) if in the 2006 and each subsequent tax year
the district adopted a maintenance and operations tax rate of less
than $1.36 per $100 of taxable value, the sum of:
(i) the lesser of the following tax rates:
(a) the rate of $1.36 per $100 of
taxable value; or
(b) the sum of the following tax
rates:
(1) the effective maintenance
and operations tax rate of the district as computed under
Subsection (i) or (k), as applicable; and
(2) the rate of $0.06 per $100 of
taxable value; and
(ii) the district's current debt rate.
(o) For purposes of this section, the rollback tax rate of a
school district whose maintenance and operations tax rate for the
2005 tax year was $1.50 per $100 of taxable value is:
(1) for the 2006 tax year, the sum of:
(A) $1.36 per $100 of taxable value; and
(B) the district's current debt rate; and
(2) for the 2007 and subsequent tax years, the sum of:
(A) the lesser of the following tax rates:
(i) the highest maintenance and operations
tax rate adopted by the district in the 2006 or any subsequent tax
year; or
(ii) the sum of the following tax rates:
(a) the effective maintenance and
operations tax rate of the district as computed under Subsection
(i) or (k), as applicable; and
(b) the rate of $0.06 per $100 of
taxable value; and
(B) the district's current debt rate.
(p) For purposes of this section, the rollback tax rate of a
school district permitted by special law on April 1, 2006, to impose
a maintenance and operations tax at a rate greater than $1.50 per
$100 of taxable value is:
(1) for the 2006 tax year, the sum of:
(A) the rate that is equal to 88.67 percent of the
maintenance and operations tax rate adopted by the district for the
2005 tax year;
(B) the rate of $0.03 per $100 of taxable value;
and
(C) the district's current debt rate; and
(2) for the 2007 and subsequent tax years, the sum of:
(A) the lesser of the following tax rates:
(i) the highest maintenance and operations
tax rate adopted by the district in the 2006 or any subsequent tax
year; or
(ii) the sum of the following tax rates:
(a) the effective maintenance and
operations tax rate of the district as computed under Subsection
(i) or (k), as applicable; and
(b) the rate of $0.06 per $100 of
taxable value; and
(B) the district's current debt rate.
(q) Notwithstanding Section 45.003, Education Code, or any
other law, a school district described by Subsection (p) may not
adopt a maintenance and operations tax rate that exceeds the sum of
the tax rate described by Subsection (p)(1)(A) and $0.17 per $100 of
taxable value.
SECTION 1.07. Section 31.01, Tax Code, is amended by adding
Subsection (k) to read as follows:
(k) In addition to the information specified by Subsection
(c), a tax bill for school district taxes or the separate statement
accompanying a tax bill for school district taxes shall include
information regarding the amount by which the property owner's
school district tax bill was reduced as a result of __.B. No. ____,
Acts of the 79th Legislature, 3rd Called Session, 2006. The
commissioner of education, with any necessary assistance from the
Legislative Budget Board, may adopt rules necessary to implement
this subsection. This subsection expires January 1, 2007.
SECTION 1.08. Section 311.013, Tax Code, is amended by
adding Subsection (n) to read as follows:
(n) This subsection applies only to a school district whose
taxable value computed under Section 403.302(d), Government Code,
is reduced in accordance with Subdivision (5) of that subsection.
In addition to the amount otherwise required to be paid into the tax
increment fund, the district shall pay into the fund an amount equal
to the amount by which the amount of taxes the district would have
been required to pay into the fund in the current year if the
district levied taxes at the rate the district levied in 2005
exceeds the amount the district is otherwise required to pay into
the fund in the year of the reduction, not to exceed the amount the
school district realizes from the reduction in the school
district's taxable value under Section 403.302(d)(5), Government
Code.
SECTION 1.09. Section 403.302, Government Code, is amended
by amending Subsections (d) and (i) and adding Subsection (d-1) to
read as follows:
(d) For the purposes of this section, "taxable value" means
the market value of all taxable property less:
(1) the total dollar amount of any residence homestead
exemptions lawfully granted under Section 11.13(b) or (c), Tax
Code, in the year that is the subject of the study for each school
district;
(2) one-half of the total dollar amount of any
residence homestead exemptions granted under Section 11.13(n), Tax
Code, in the year that is the subject of the study for each school
district;
(3) the total dollar amount of any exemptions granted
before May 31, 1993, within a reinvestment zone under agreements
authorized by Chapter 312, Tax Code;
(4) subject to Subsection (e), the total dollar amount
of any captured appraised value of property that:
(A) is within a reinvestment zone created on or
before May 31, 1999, or is proposed to be included within the
boundaries of a reinvestment zone as the boundaries of the zone and
the proposed portion of tax increment paid into the tax increment
fund by a school district are described in a written notification
provided by the municipality or the board of directors of the zone
to the governing bodies of the other taxing units in the manner
provided by Section 311.003(e), Tax Code, before May 31, 1999, and
within the boundaries of the zone as those boundaries existed on
September 1, 1999, including subsequent improvements to the
property regardless of when made;
(B) generates taxes paid into a tax increment
fund created under Chapter 311, Tax Code, under a reinvestment zone
financing plan approved under Section 311.011(d), Tax Code, on or
before September 1, 1999; and
(C) is eligible for tax increment financing under
Chapter 311, Tax Code;
(5) for a school district for which a deduction from
taxable value is made under Subdivision (4), an amount equal to the
taxable value required to generate revenue when taxed at the school
district's current tax rate in an amount that, when added to the
taxes of the district paid into a tax increment fund as described by
Subdivision (4)(B), is equal to the total amount of taxes the
district would have paid into the tax increment fund if the district
levied taxes at the rate the district levied in 2005;
(6) the total dollar amount of any exemptions granted
under Section 11.251, Tax Code;
(7) [(6)] the difference between the comptroller's
estimate of the market value and the productivity value of land that
qualifies for appraisal on the basis of its productive capacity,
except that the productivity value estimated by the comptroller may
not exceed the fair market value of the land;
(8) [(7)] the portion of the appraised value of
residence homesteads of individuals who receive a tax limitation
under Section 11.26, Tax Code, on which school district taxes are
not imposed in the year that is the subject of the study, calculated
as if the residence homesteads were appraised at the full value
required by law;
(9) [(8)] a portion of the market value of property
not otherwise fully taxable by the district at market value because
of:
(A) action required by statute or the
constitution of this state that, if the tax rate adopted by the
district is applied to it, produces an amount equal to the
difference between the tax that the district would have imposed on
the property if the property were fully taxable at market value and
the tax that the district is actually authorized to impose on the
property, if this subsection does not otherwise require that
portion to be deducted; or
(B) action taken by the district under Subchapter
B or C, Chapter 313, Tax Code;
(10) [(9)] the market value of all tangible personal
property, other than manufactured homes, owned by a family or
individual and not held or used for the production of income;
(11) [(10)] the appraised value of property the
collection of delinquent taxes on which is deferred under Section
33.06, Tax Code;
(12) [(11)] the portion of the appraised value of
property the collection of delinquent taxes on which is deferred
under Section 33.065, Tax Code; and
(13) [(12)] the amount by which the market value of a
residence homestead to which Section 23.23, Tax Code, applies
exceeds the appraised value of that property as calculated under
that section.
(d-1) For a school district for which in the 2005 tax year a
deduction from taxable value is made under Subsection (d)(4), the
comptroller shall certify to the commissioner of education a final
taxable value for the 2005 tax year, calculated as if the reduction
in the school district's ad valorem tax rate and the method of
calculating the amount of the deduction from taxable value under
Subsection (d)(5) required by __.B. No. ____, Acts of the 79th
Legislature, 3rd Called Session, 2006, took effect September 1,
2005. This subsection expires September 1, 2007.
(i) If the comptroller determines in the annual study that
the market value of property in a school district as determined by
the appraisal district that appraises property for the school
district, less the total of the amounts and values listed in
Subsection (d) as determined by that appraisal district, is valid,
the comptroller, in determining the taxable value of property in
the school district under Subsection (d), shall for purposes of
Subsection (d)(13) [(d)(12)] subtract from the market value as
determined by the appraisal district of residence homesteads to
which Section 23.23, Tax Code, applies the amount by which that
amount exceeds the appraised value of those properties as
calculated by the appraisal district under Section 23.23, Tax Code.
If the comptroller determines in the annual study that the market
value of property in a school district as determined by the
appraisal district that appraises property for the school district,
less the total of the amounts and values listed in Subsection (d) as
determined by that appraisal district, is not valid, the
comptroller, in determining the taxable value of property in the
school district under Subsection (d), shall for purposes of
Subsection (d)(13) [(d)(12)] subtract from the market value as
estimated by the comptroller of residence homesteads to which
Section 23.23, Tax Code, applies the amount by which that amount
exceeds the appraised value of those properties as calculated by
the appraisal district under Section 23.23, Tax Code.
ARTICLE 2. APPROPRIATION
SECTION 2.01. There is appropriated to the Texas Education
Agency for distribution to the school districts of this state in
accordance with Chapters 41 and 42, Education Code, as amended by
this Act, the amount of $2,385,800,000 in fiscal year 2007 from any
funds in the State Treasury not otherwise appropriated.
SECTION 2.02. Rider 97 following the appropriations to the
Texas Education Agency in Chapter 1369, Acts of the 79th
Legislature, Regular Session, 2005 (the General Appropriations
Act), as amended by Chapter 2, Acts of the 79th Legislature, 1st
Called Session, 2005, is repealed.
ARTICLE 3. APPLICATION AND EFFECTIVE DATE
SECTION 3.01. This Act applies beginning with the 2006-2007
school year.
SECTION 3.02. 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 on the 91st day after the last day of
the legislative session.