80R1661 SLO-D

By: Guillen H.B. No. 3607

A BILL TO BE ENTITLED

AN ACT

relating to the financing of school district instructional facilities and assistance with the payment of a school district's existing debt.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Subsection (c), Section 42.007, Education Code, is amended to read as follows:

(c) The funding elements must include:

(1) a basic allotment for the purposes of Section 42.101 that, when combined with the guaranteed yield component provided by Subchapter F, represents the cost per student of a regular education program that meets all mandates of law and regulation;

(2) adjustments designed to reflect the variation in known resource costs and costs of education beyond the control of school districts;

(3) appropriate program cost differentials and other funding elements for the programs authorized under Subchapter C, with the program funding level expressed as dollar amounts and as weights applied to the adjusted basic allotment for the appropriate year;

(4) the maximum guaranteed level of qualified state and local funds per student for the purposes of Subchapter F;

(5) the enrichment and facilities tax rate under Subchapter F;

(6) the computation of students in weighted average daily attendance under Section 42.302; and

(7) the amount to be appropriated for the school facilities assistance program under Chapter 46, including a specific amount not less than the amount designated in Section 46.003(a) that is at least sufficient to provide the financing of facilities under Subchapter A, Chapter 46, in districts that have a wealth per student, as defined by Section 46.006(g), that is less than the statewide average wealth per student.

SECTION 2. Section 42.251, Education Code, is amended to read as follows:

Sec. 42.251. FINANCING; GENERAL RULE. (a) The sum of the basic allotment under Subchapter B and the special allotments under Subchapter C, computed in accordance with this chapter, constitute the tier one allotments. The sum of the tier one allotments and the guaranteed yield allotments under Subchapter F, computed in accordance with this chapter, and the instructional facilities allotment under Subchapter A, Chapter 46, constitute the total cost of the Foundation School Program.

(b) The program shall be financed by:

(1) ad valorem tax revenue generated by an equalized uniform school district effort;

(2) ad valorem tax revenue generated by local school district effort in excess of the equalized uniform school district effort;

(3) ad valorem tax revenue generated by local school district effort for the purpose of funding instructional facilities under Subchapter A, Chapter 46;

(4) state available school funds distributed in accordance with law; and

(5) [(4)] state funds appropriated for the purposes of public school education and allocated to each district in an amount sufficient to finance the cost of each district's Foundation School Program not covered by other funds specified in this subsection.

SECTION 3. Subsections (a), (b), and (c), Section 42.253, Education Code, are amended to read as follows:

(a) For each school year the commissioner shall determine:

(1) the amount of money to which a school district is entitled under Subchapters B and C;

(2) the amount of money to which a school district is entitled under Subchapter F;

(3) the amount of money to which a school district is entitled under Subchapter A, Chapter 46;

(4) the amount of money allocated to the district from the available school fund;

(5) [(4)] the amount of each district's tier one local share under Section 42.252; [and]

(6) [(5)] the amount of each district's tier two local share under Section 42.302; and

(7) the amount of each district's local share of the instructional facilities allotment under Subchapter A, Chapter 46.

(b) Except as provided by this subsection, the commissioner shall base the determinations under Subsection (a) on the estimates provided to the legislature under Section 42.254, 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. The commissioner shall reduce the entitlement 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 42.254 or the General Appropriations Act, as applicable. 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. The commissioner shall base determinations for the instructional facilities allotment on the procedures specified in Subchapter A, Chapter 46.

(c) Each school district is entitled to an amount equal to the difference for that district between the sum of Subsections (a)(1), [and] (a)(2), and (a)(3) and the sum of Subsections [(a)(3),] (a)(4), [and] (a)(5), (a)(6), and (a)(7).

SECTION 4. Section 46.003, Education Code, is amended by amending Subsections (a) and (h) and adding Subsection (i) to read as follows:

(a) For each year, except as provided by Sections 46.005 and 46.006, a school district is guaranteed a specified amount per student in state and local funds for each cent of tax effort, up to the maximum rate under Subsection (b), to pay the principal of and interest on eligible bonds issued to construct, acquire, renovate, or improve an instructional facility. The total amount of state support provided each biennium to assist with payment of bonds for which a school district has not previously received state assistance under this subchapter must equal at least $300 million or a higher amount provided by appropriation. The amount of state support for a school district is determined by the formula:

FYA = (FYL X ADA X BTR X 100) - (BTR X (DPV/100))

where:

"FYA" is the guaranteed facilities yield amount of state funds allocated to the district for the year;

"FYL" is the dollar amount guaranteed level of state and local funds per student per cent of tax effort, which is $35 or a greater amount for any year provided by appropriation;

"ADA" is the greater of the number of students in average daily attendance, as determined under Section 42.005, in the district or 400;

"BTR" is the district's bond tax rate for the current year, which is determined by dividing the amount budgeted by the district for payment of eligible bonds by the quotient of the district's taxable value of property as determined under Subchapter M, Chapter 403, Government Code, or, if applicable, Section 42.2521, divided by 100; and

"DPV" is the district's taxable value of property as determined under Subchapter M, Chapter 403, Government Code, or, if applicable, Section 42.2521.

(h) To receive state assistance under this subchapter, a school district must apply to the commissioner in accordance with rules adopted by the commissioner before issuing bonds that will be paid with state assistance. Until the bonds are fully paid, [or] the instructional facility is sold, or the school district becomes eligible to receive assistance with payment of the bonds under Subchapter B:

(1) a school district is entitled to continue receiving state assistance under this subchapter without reapplying to the commissioner; and

(2) the guaranteed level of state and local funds per student per cent of tax effort applicable to the bonds may not be reduced below the level provided for the year in which the bonds were issued.

(i) Notwithstanding any other provision of this chapter, the commissioner shall ensure that a school district that becomes eligible for state assistance under Subchapter B with payment of bonds for which the district initially received state assistance under this subchapter continues to receive state assistance under this subchapter as necessary to result in a total guaranteed level of state and local funds per student per cent of tax effort equal to the level provided under this subchapter for the year in which the bonds were issued.

SECTION 5. Section 46.033, Education Code, is amended to read as follows:

Sec. 46.033. ELIGIBLE BONDS. Bonds, including bonds issued under Section 45.006, are eligible to be paid with state and local funds under this subchapter if:

(1) the district made payments on the bonds during the final [2004–2005] school year of the preceding state fiscal biennium;

(2) [or] taxes levied to pay the principal of and interest on the bonds were included in the district's audited debt service collections for that school year; or [and]

(3) [(2)] the district received [does not receive] state assistance under Subchapter A for payment of [the] principal and interest on [the] bonds during the final school year of the preceding state fiscal biennium.

SECTION 6. Subsection (c), Section 46.034, Education Code, is amended to read as follows:

(c) 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 [2004-2005] 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, the district may not receive 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 7. 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, 2007.