81R10286 KKA-D

By: Paxton H.B. No. 2563

A BILL TO BE ENTITLED

AN ACT

relating to determination of and notification regarding the state compression percentage under the public school finance system and the elimination of property taxes for school district maintenance and operations.

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

SECTION 1. Section 42.2516, Education Code, is amended by amending Subsections (a) and (a-1) and adding Subsection (a-2) to read as follows:

(a) In this section, "state compression percentage" means the percentage, as determined by the commissioner in consultation with the Legislative Budget Board, of a school district's adopted maintenance and operations tax rate for the 2005 tax year that serves as the basis for state funding for tax rate reduction under this section. The commissioner, in consultation with the Legislative Budget Board, shall determine the state compression percentage for each school year based on the percentage by which a district is able to reduce the district's maintenance and operations tax rate for that year, as compared to the district's adopted maintenance and operations tax rate for the 2005 tax year, as a result of state funds appropriated for distribution under this section for that year from the property tax relief fund established under Section 403.109, Government Code, or from another funding source available for school district property tax relief.

(a-1) For the state fiscal year ending August 31, 2009, the state compression percentage is 66.67 percent. For each subsequent state fiscal year, the state compression percentage is the lesser of:

(1) the percentage determined in accordance with Subsection (a); or

(2) the state compression percentage for the preceding state fiscal year.

(a-2) Not later than March 1 of each year, the commissioner shall:

(1) inform school districts of the state compression percentage for the following school year; and

(2) post the state compression percentage for the following school year on the agency's website. [Subsection (a) applies beginning with the state fiscal year ending August 31, 2009. For the state fiscal year ending August 31, 2007, the state compression percentage is 88.67 percent. For the state fiscal year ending August 31, 2008, the state compression percentage is 66.67 percent. This subsection expires September 1, 2009.]

SECTION 2. Section 45.002, Education Code, is amended to read as follows:

Sec. 45.002. MAINTENANCE TAXES. (a) The governing board of an independent school district, including the city council or commission that has jurisdiction over a municipally controlled independent school district, the governing board of a rural high school district, and the commissioners court of a county, on behalf of each common school district under its jurisdiction, may levy, assess, and collect annual ad valorem taxes for the further maintenance of public schools in the district, subject to Section 45.003.

(b) Notwithstanding Section 45.003(d) or (f) or Section 26.08, Tax Code, an entity listed in Subsection (a) may, during the five-year period beginning with the year in which the state compression percentage, as specified under Section 42.2516, is zero, impose an annual ad valorem tax for the maintenance of public schools at a rate not to exceed $0.17. After that period, notwithstanding Subsection (a), Section 45.003(d) or (f), or any other provision of this code, annual ad valorem taxes for the maintenance of public schools may not be levied, assessed, or collected by an entity listed in Subsection (a). This subsection does not affect the authority of an entity listed in Subsection (a) to levy, assess, and collect annual ad valorem taxes authorized under Section 45.001 to pay the principal and interest on bonds.

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, 2009.