81R8420 CAS-D

By: Heflin H.B. No. 2617

A BILL TO BE ENTITLED

AN ACT

relating to state financial assistance for maintenance, repair, or renovation of school district instructional facilities.

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

SECTION 1. Subtitle I, Title 2, Education Code, is amended by adding Chapter 47 to read as follows:

CHAPTER 47. STATE FINANCIAL ASSISTANCE FOR MAINTENANCE, REPAIR, OR

RENOVATION OF INSTRUCTIONAL FACILITIES

Sec. 47.001. DEFINITIONS. (a) In this subchapter:

(1) "Average daily attendance" is the average daily attendance as determined under Section 42.005.

(2) "Guaranteed wealth level" means a wealth per student determined under Subsection (b).

(3) "Instructional facility" has the meaning assigned by Section 46.001.

(4) "Wealth per student" has the meaning assigned by Section 46.006(g).

(b) The guaranteed wealth level is determined by the formula:

GWL = (GL X 10,000) X (SWADA/SADA)

where:

"GWL" is the guaranteed wealth level;

"GL" is the dollar amount guaranteed level of state and local funds per weighted student per cent of tax effort, as provided by Section 42.302(a-1)(1);

"SWADA" is the total weighted average daily attendance, determined in the manner provided by Section 42.302, for all school districts in the state; and

"SADA" is the total average daily attendance for all school districts in the state.

Sec. 47.002. DISTRICT ELIGIBILITY. A school district is eligible for state assistance under this subchapter if the district has a wealth per student that is less than $185,000.

Sec. 47.003. AMOUNT OF STATE ASSISTANCE. Except as provided by Section 47.004, the amount of state assistance to which a school district is entitled for an eligible project is determined by the formula:

SA = (1 - (WPS/GWL)) X PC

where:

"SA" is the amount of state assistance;

"WPS" is the district's wealth per student;

"GWL" is the guaranteed wealth level; and

"PC" is the total cost of the project, excluding financing costs.

Sec. 47.004. SUPPLEMENTAL STATE ASSISTANCE FOR SMALL DISTRICTS. (a) In addition to the amount determined under Section 47.003, a school district is entitled to supplemental state assistance under this subchapter if the district's average daily attendance is less than the product of the quotient of the total average daily attendance for all school districts in the state divided by the total weighted average daily attendance, as determined under Section 42.302, for all school districts in the state, multiplied by 2,500.

(b) The amount of supplemental state assistance to which a school district is entitled is the lesser of the amounts determined by the formulas:

SSA = PC - SA - (.002 X DPV X PC/500,000)

where:

"SSA" is the amount of supplemental state assistance;

"SA" is the amount of state assistance determined under Section 47.003;

"DPV" is the district's taxable value of property as provided under Section 46.003; and

"PC" is the total cost of the project; or

SSA = PC - SA - (0.15 X PC)

where:

"SSA" is the amount of supplemental state assistance;

"SA" is the amount of state assistance determined under Section 47.003; and

"PC" is the total cost of the project.

(c) If the lesser of the amounts determined under Subsection (b) is less than zero, the district is not entitled to supplemental state assistance under this section.

Sec. 47.005. PROJECT ELIGIBILITY AND APPROVAL. (a) A project must be construction to maintain, repair, or renovate an instructional facility to be eligible for state assistance under this subchapter.

(b) A school district is entitled to state assistance under this subchapter for only one project in a state fiscal biennium.

(c) To receive state assistance under this subchapter, a school district must submit to the commissioner a proposal that contains the information required by commissioner rule by the date established by commissioner rule. The rule must require a district to provide:

(1) information concerning the proposed cost of the project;

(2) a description of the nature of the maintenance, repair, or renovation construction proposed; and

(3) any other information the commissioner determines necessary.

(d) The commissioner shall review each proposal and approve each proposal that meets the requirements of this subchapter and commissioner rule.

(e) If the amount of state assistance under this subchapter for an approved project is insufficient to enable a school district complete the project as proposed, the district may modify the project to reduce the cost of the project and may resubmit the proposal.

Sec. 47.006. LIMITATION ON ASSISTANCE. (a) The cost of a project for which a district may receive assistance under this subchapter may not exceed the greater of:

(1) $500,000; or

(2) the product of the number of students in average daily attendance in the district multiplied by $266.

(b) For purposes of Sections 47.003 and 47.004, a project that has a cost that exceeds the limit prescribed by Subsection (a) is treated as if the cost equals the applicable limit.

Sec. 47.007. SHORTAGE OF APPROPRIATED FUNDS. (a) If the total amount appropriated for a state fiscal biennium for purposes of this subchapter is less than the amount of money to which school districts applying for state assistance for eligible projects are entitled for the biennium, the commissioner shall, in accordance with commissioner rule, give priority in awarding available state assistance to a district if the district:

(1) has not received assistance under Subchapter A, Chapter 46;

(2) would be required, without state assistance, to impose ad valorem taxes at a rate that exceeds $0.14 per $100 of valuation of taxable property in the district to pay the principal of and interest on bonds to finance the eligible project;

(3) is not considered to be a fast-growth district under criteria established under commissioner rule; and

(4) has proposed a construction project that will extend the use of an instructional facility and promote the safety and welfare of students and district employees.

(b) The commissioner shall award the full amount of state assistance to which a school district is entitled under this subchapter, except that the commissioner may award less than the full amount to the last district for which any funds are available.

(c) Any amount appropriated for the first year of a fiscal biennium that is not awarded to a school district may be used to provide assistance under this subchapter in the following fiscal year.

Sec. 47.008. USE OF EXCESS APPROPRIATED FUNDS. If the total state assistance necessary for approved projects in a state fiscal biennium is less than the amount appropriated for that biennium, the commissioner may use the excess amount for any purpose under the Foundation School Program.

Sec. 47.009. PAYMENT OF STATE ASSISTANCE. (a) The commissioner shall approve warrants to a school district that receives state assistance under this subchapter as necessary to permit the district to meet contractual obligations as construction for maintenance, repair, or renovation progresses.

(b) If the commissioner determines that a school district has altered a project in a manner that reduces the cost of the project below the cost stated in the proposal, the commissioner shall recompute the amount of state assistance to which the district is entitled under this subchapter based on the reduced project cost and approve warrants to the district accordingly.

Sec. 47.010. RULES. The commissioner shall adopt rules as necessary to administer this chapter.

SECTION 2. Section 42.002(b), Education Code, is amended to read as follows:

(b) The Foundation School Program consists of:

(1) two tiers that in combination provide for:

(A) sufficient financing for all school districts to provide a basic program of education that is rated academically acceptable or higher under Section 39.072 and meets other applicable legal standards; and

(B) substantially equal access to funds to provide an enriched program; and

(2) a facilities component as provided by Chapters [Chapter] 46 and 47.

SECTION 3. Section 42.007(c), 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 programs [program] under Chapters [Chapter] 46 and 47.

SECTION 4. Section 42.2521(a), Education Code, is amended to read as follows:

(a) For purposes of Chapters 41, [and] 46, and 47 and this chapter, and to the extent money specifically authorized to be used under this section is available, the commissioner shall adjust the taxable value of property in a school district that, due to factors beyond the control of the board of trustees, experiences a rapid decline in the tax base used in calculating taxable values in excess of four percent of the tax base used in the preceding year.

SECTION 5. Section 42.261(a), Education Code, is amended to read as follows:

(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 or 47; 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.

SECTION 6. Section 44.004(c), Education Code, is amended to read as follows:

(c) The notice of public meeting to discuss and adopt the budget and the proposed tax rate may not be smaller than one-quarter page of a standard-size or a tabloid-size newspaper, and the headline on the notice must be in 18-point or larger type. Subject to Subsection (d), the notice must:

(1) contain a statement in the following form:

"NOTICE OF PUBLIC MEETING TO DISCUSS BUDGET AND PROPOSED TAX RATE

"The (name of school district) will hold a public meeting at (time, date, year) in (name of room, building, physical location, city, state). The purpose of this meeting is to discuss the school district's budget that will determine the tax rate that will be adopted. Public participation in the discussion is invited." The statement of the purpose of the meeting must be in bold type. In reduced type, the notice must state: "The tax rate that is ultimately adopted at this meeting or at a separate meeting at a later date may not exceed the proposed rate shown below unless the district publishes a revised notice containing the same information and comparisons set out below and holds another public meeting to discuss the revised notice.";

(2) contain a section entitled "Comparison of Proposed Budget with Last Year's Budget," which must show the difference, expressed as a percent increase or decrease, as applicable, in the amounts budgeted for the preceding fiscal year and the amount budgeted for the fiscal year that begins in the current tax year for each of the following:

(A) maintenance and operations;

(B) debt service; and

(C) total expenditures;

(3) contain a section entitled "Total Appraised Value and Total Taxable Value," which must show the total appraised value and the total taxable value of all property and the total appraised value and the total taxable value of new property taxable by the district in the preceding tax year and the current tax year as calculated under Section 26.04, Tax Code;

(4) contain a statement of the total amount of the outstanding and unpaid bonded indebtedness of the school district;

(5) contain a section entitled "Comparison of Proposed Rates with Last Year's Rates," which must:

(A) show in rows the tax rates described by Subparagraphs (i)-(iii), expressed as amounts per $100 valuation of property, for columns entitled "Maintenance & Operations," "Interest & Sinking Fund," and "Total," which is the sum of "Maintenance & Operations" and "Interest & Sinking Fund":

(i) the school district's "Last Year's Rate";

(ii) the "Rate to Maintain Same Level of Maintenance & Operations Revenue & Pay Debt Service," which:

(a) in the case of "Maintenance & Operations," is the tax rate that, when applied to the current taxable value for the district, as certified by the chief appraiser under Section 26.01, Tax Code, and as adjusted to reflect changes made by the chief appraiser as of the time the notice is prepared, would impose taxes in an amount that, when added to state funds to be distributed to the district under Chapter 42, would provide the same amount of maintenance and operations taxes and state funds distributed under Chapter 42 per student in average daily attendance for the applicable school year that was available to the district in the preceding school year; and

(b) in the case of "Interest & Sinking Fund," is the tax rate that, when applied to the current taxable value for the district, as certified by the chief appraiser under Section 26.01, Tax Code, and as adjusted to reflect changes made by the chief appraiser as of the time the notice is prepared, and when multiplied by the district's anticipated collection rate, would impose taxes in an amount that, when added to state funds to be distributed to the district under Chapter 46 or 47 and any excess taxes collected to service the district's debt during the preceding tax year but not used for that purpose during that year, would provide the amount required to service the district's debt; and

(iii) the "Proposed Rate";

(B) contain fourth and fifth columns aligned with the columns required by Paragraph (A) that show, for each row required by Paragraph (A):

(i) the "Local Revenue per Student," which is computed by multiplying the district's total taxable value of property, as certified by the chief appraiser for the applicable school year under Section 26.01, Tax Code, and as adjusted to reflect changes made by the chief appraiser as of the time the notice is prepared, by the total tax rate, and dividing the product by the number of students in average daily attendance in the district for the applicable school year; and

(ii) the "State Revenue per Student," which is computed by determining the amount of state aid received or to be received by the district under Chapters 42, 43, [and] 46, and 47 and dividing that amount by the number of students in average daily attendance in the district for the applicable school year; and

(C) contain an asterisk after each calculation for "Interest & Sinking Fund" and a footnote to the section that, in reduced type, states "The Interest & Sinking Fund tax revenue is used to pay for bonded indebtedness on construction, equipment, or both. The bonds, and the tax rate necessary to pay those bonds, were approved by the voters of this district.";

(6) contain a section entitled "Comparison of Proposed Levy with Last Year's Levy on Average Residence," which must:

(A) show in rows the information described by Subparagraphs (i)-(iv), rounded to the nearest dollar, for columns entitled "Last Year" and "This Year":

(i) "Average Market Value of Residences," determined using the same group of residences for each year;

(ii) "Average Taxable Value of Residences," determined after taking into account the limitation on the appraised value of residences under Section 23.23, Tax Code, and after subtracting all homestead exemptions applicable in each year, other than exemptions available only to disabled persons or persons 65 years of age or older or their surviving spouses, and using the same group of residences for each year;

(iii) "Last Year's Rate Versus Proposed Rate per $100 Value"; and

(iv) "Taxes Due on Average Residence," determined using the same group of residences for each year; and

(B) contain the following information: "Increase (Decrease) in Taxes" expressed in dollars and cents, which is computed by subtracting the "Taxes Due on Average Residence" for the preceding tax year from the "Taxes Due on Average Residence" for the current tax year;

(7) contain the following statement in bold print: "Under state law, the dollar amount of school taxes imposed on the residence of a person 65 years of age or older or of the surviving spouse of such a person, if the surviving spouse was 55 years of age or older when the person died, may not be increased above the amount paid in the first year after the person turned 65, regardless of changes in tax rate or property value.";

(8) contain the following statement in bold print: "Notice of Rollback Rate: The highest tax rate the district can adopt before requiring voter approval at an election is (the school district rollback rate determined under Section 26.08, Tax Code). This election will be automatically held if the district adopts a rate in excess of the rollback rate of (the school district rollback rate)."; and

(9) contain a section entitled "Fund Balances," which must include the estimated amount of interest and sinking fund balances and the estimated amount of maintenance and operation or general fund balances remaining at the end of the current fiscal year that are not encumbered with or by corresponding debt obligation, less estimated funds necessary for the operation of the district before the receipt of the first payment under Chapter 42 in the succeeding school year.

SECTION 7. This Act takes effect September 1, 2009.