82R2271 ALL/GCB-D
	By: White	H.B. No. 3367

	A BILL TO BE ENTITLED
	AN ACT
	relating to the repeal of the laws authorizing the imposition of ad
	valorem taxes, the rates and expansion of the applicability of
	state and local sales and use taxes, the distribution of sales and
	use tax revenue to entities formerly imposing ad valorem taxes, and
	the replacement of ad valorem tax revenue in relation to financing
	public schools.
	ARTICLE 1. PROPERTY TAXES
	SECTION 1.01.  Title 1, Tax Code, is repealed.
	SECTION 1.02.  Notwithstanding any other law, this state or
	a political subdivision of this state may not impose an ad valorem
	tax.
	SECTION 1.03.  The change in law made by this article does
	not affect tax liability accruing before the effective date of this
	Act. That liability continues in effect as if this article had not
	been enacted, and the former law is continued in effect for the
	collection of taxes due and for civil and criminal enforcement of
	the liability for those taxes.
	ARTICLE 2.  SALES AND USE TAX PROVISIONS
	SECTION 2.01.  Subchapter A, Chapter 151, Tax Code, is
	amended by adding Section 151.0037 to read as follows:
	Sec. 151.0037.  "ELECTIVE COSMETIC PROCEDURE". (a) In this
	chapter, "elective cosmetic procedure" means any medical procedure
	performed on a person that is directed at improving the person's
	appearance and does not meaningfully promote the proper function of
	the body or prevent or treat an illness or disease.
	(b)  "Elective cosmetic procedure" includes cosmetic
	surgery, hair transplants, cosmetic injections, cosmetic soft
	tissue fillers, dermabrasion and chemical peels, laser hair
	removal, laser skin resurfacing, laser treatment of leg veins,
	sclerotherapy, and cosmetic dentistry.
	(c)  "Elective cosmetic procedure" does not include
	reconstructive surgery or dentistry, including any surgery or
	dentistry performed on an abnormal structure caused by or related
	to a congenital defect, developmental abnormality, injury, trauma,
	infection, tumor, or disease or performed to improve the
	structure's function or to give the structure a more normal
	appearance.
	SECTION 2.02.  Section 151.00394(b), Tax Code, is amended to
	read as follows:
	(b)  "Internet access service" does not include and the
	exemption under Section 151.325 does not apply to any other taxable
	service described by [listed in] Section 151.0101(a), unless the
	taxable service is provided in conjunction with and is merely
	incidental to the provision of Internet access service.
	SECTION 2.03.  Subchapter A, Chapter 151, Tax Code, is
	amended by adding Section 151.0041 to read as follows:
	Sec. 151.0041.  "MEDICAL OR DENTAL SERVICE". (a) "Medical
	or dental service" means medical or dental treatment or care
	provided by or under the supervision of a licensed physician or
	dentist, as applicable, that promotes the proper function of the
	body or prevents, treats, or detects an illness or disease.
	(b)  "Medical or dental service" does not include an elective
	cosmetic procedure.
	SECTION 2.04.  Section 151.0101(a), Tax Code, is amended to
	read as follows:
	(a)  "Taxable services" means the performance of any
	services other than services by employees as described by Section
	151.057 and medical or dental services. The term includes both
	services defined under this chapter and those not defined[:
	[(1)  amusement services;
	[(2)  cable television services;
	[(3)  personal services;
	[(4)  motor vehicle parking and storage services;
	[(5)     the repair, remodeling, maintenance, and
	restoration of tangible personal property, except:
	[(A)  aircraft;
	[(B)  a ship, boat, or other vessel, other than:
	[(i)     a taxable boat or motor as defined by
	Section 160.001;
	[(ii)  a sports fishing boat; or
	[(iii)  any other vessel used for pleasure;
	[(C)     the repair, maintenance, and restoration of
	a motor vehicle; and
	[(D)     the repair, maintenance, creation, and
	restoration of a computer program, including its development and
	modification, not sold by the person performing the repair,
	maintenance, creation, or restoration service;
	[(6)  telecommunications services;
	[(7)  credit reporting services;
	[(8)  debt collection services;
	[(9)  insurance services;
	[(10)  information services;
	[(11)  real property services;
	[(12)  data processing services;
	[(13)  real property repair and remodeling;
	[(14)  security services;
	[(15)  telephone answering services;
	[(16)  Internet access service; and
	[(17)     a sale by a transmission and distribution
	utility, as defined in Section 31.002, Utilities Code, of
	transmission or delivery of service directly to an electricity
	end-use customer whose consumption of electricity is subject to
	taxation under this chapter].
	SECTION 2.05.  Section 151.051(b), Tax Code, is amended to
	read as follows:
	(b)  The sales tax rate is __ [6-1/4] percent of the sales
	price of the taxable item sold.
	SECTION 2.06.  Section 151.325(b), Tax Code, is amended to
	read as follows:
	(b)  The exemption provided by this section applies without
	regard to:
	(1)  whether the Internet access service is bundled
	with another service, including any other taxable service described
	by [listed in] Section 151.0101(a); or
	(2)  the billing period used by the service provider.
	SECTION 2.07.  Section 151.350(d), Tax Code, is amended to
	read as follows:
	(d)  In this section, "restore" means:
	(1)  launder, clean, repair, treat, or apply protective
	chemicals to an item, to the extent the service is a personal
	service as defined in Section 151.0045; and
	(2)  repair, restore, or remodel, to the extent the
	service is described as a taxable service by Section 151.0101(a),
	including[:
	[(A)]  a real property repair or remodeling
	service as defined in Section 151.0047[; or
	[(B)     defined as a taxable service in Section
	151.0101(a)(5)].
	SECTION 2.08.  Subchapter M, Chapter 151, Tax Code, is
	amended by adding Section 151.802 to read as follows:
	Sec. 151.802.  DISPOSITION OF PROCEEDS FROM INCREASED RATE
	AND EXPANDED TAX BASE. (a) All proceeds, other than the proceeds
	allocated under Section 151.801(b), from the collection of the
	taxes imposed by this chapter from the increase in the rate of the
	tax effective January 1, 2012, the imposition of the tax on a
	taxable item not subject to the tax before January 1, 2012, and the
	amounts previously authorized to be deducted from taxable sales by
	Section 151.432 before the repeal of that section effective January
	1, 2012, shall be distributed as provided by this section.
	(b)  The comptroller shall distribute to the foundation
	school fund an amount sufficient to provide each school district
	with the money allotted to the district by Chapter 42, Education
	Code, to be paid in the manner provided by that chapter.
	(c)  The chief financial officer of each entity, other than a
	school district, that imposed an ad valorem tax in 2011 shall send
	an affidavit to the comptroller stating the amount of revenue
	generated by the tax for that year. The chief financial officer of
	a school district shall send an affidavit to the comptroller
	stating the amount of principal and interest payments due by the
	school on bonded indebtedness in 2011 for bonds for which the
	district's ad valorem taxes are pledged. The comptroller by rule
	shall provide for the form of the affidavit and specify any
	information that must accompany the submission of the affidavit.
	The chief financial officer shall submit the affidavit in the form
	and manner provided by the comptroller not later than July 1, 2012.
	The comptroller shall accept the affidavit only if the comptroller
	determines that the amount of revenue, or the amount of principal
	and interest payments due, as applicable, stated in the affidavit
	is accurate.
	(d)  Subject to Subsection (f), the comptroller shall each
	year send to each entity for which the comptroller has accepted an
	affidavit submitted under Subsection (c) the amount of money stated
	in the affidavit as soon as possible, but not later than January 31
	of the year following the year for which the payment is made.
	(e)  Beginning with the payment for 2013 and subject to
	Subsection (f), the comptroller shall proportionately increase or
	decrease the amount of money sent to each entity under Subsection
	(d) based on the amount of the proceeds collected from the taxes
	imposed by this chapter and Chapter 163 attributable to the year for
	which the payment is made, as compared to the amount of those
	proceeds collected for 2012.
	(f)  In making distributions under Subsections (d) and (e),
	the comptroller shall take into consideration the distribution of
	money to school districts under Subsection (b) and the cash flow
	needs of the state.
	(g)  After distribution by the comptroller of all the money
	necessary to make payments under this section for a year, any
	remaining revenue attributable to that year shall be deposited to
	the credit of the general revenue fund.
	SECTION 2.09.  Sections 321.101(a) and (f), Tax Code, are
	amended to read as follows:
	(a)  A municipality may adopt or repeal a sales and use tax
	authorized by this chapter [, other than the additional municipal
	sales and use tax,] at an election in which a majority of the
	qualified voters of the municipality approve the adoption or repeal
	of the tax.
	(f)  A municipality may not adopt or increase a sales and use
	tax [or an additional sales and use tax] under this section if as a
	result of the adoption or increase of the tax the combined rate of
	all sales and use taxes imposed by the municipality and other
	political subdivisions of this state having territory in the
	municipality would exceed two percent at any location in the
	municipality.
	SECTION 2.10.  Section 321.102(a), Tax Code, is amended to
	read as follows:
	(a)  A tax imposed under this chapter or the repeal of a tax
	abolished under this chapter 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 action as required by Section
	321.405(b). [This subsection does not apply to the additional
	municipal sales and use tax.]
	SECTION 2.11.  Section 321.103, Tax Code, is amended to read
	as follows:
	Sec. 321.103.  SALES TAX.  [(a)]  In a municipality that has
	adopted the tax authorized by this chapter [Section 321.101(a)],
	there is imposed a tax on the receipts from the sale at retail of
	taxable items within the municipality at the rate of one percent and
	at the same rate on the receipts from the sale at retail within the
	municipality of gas and electricity for residential use.
	[(b)     In a municipality that has adopted the additional
	municipal sales and use tax, the tax is imposed at the rate approved
	by the voters. The rate, when the tax is adopted, must be equal to
	either one-eighth, one-fourth, three-eighths, or one-half of one
	percent. The rate may be reduced in one or more increments of
	one-eighth of one percent to a minimum of one-eighth of one percent
	or increased in one or more increments of one-eighth of one percent
	to a maximum of one-half of one percent, or the tax may be
	abolished. The rate that the municipality adopts is on the receipts
	from the sale at retail of all taxable items within the municipality
	and at the same rate on the receipts from the sale at retail within
	the municipality of gas and electricity for residential use unless
	the residential use of gas and electricity is exempted from the tax
	imposed under Section 321.101(a), in which case the residential use
	of gas and electricity is exempted under this subsection also.]
	SECTION 2.12.  Section 321.106(a), Tax Code, is amended to
	read as follows:
	(a)  Subject to an election held in accordance with Chapter
	344, Local Government Code, a municipality in which a fire control,
	prevention, and emergency medical services district is established
	shall adopt a sales and use tax in the area of the district for the
	purpose of financing the operation of the fire control, prevention,
	and emergency medical services district. The revenue from the tax
	may be used only for the purpose of financing the operation of the
	fire control, prevention, and emergency medical services district.
	The proposition for adopting a tax under this section and the
	proposition for creation of a fire control, prevention, and
	emergency medical services district shall be submitted at the same
	election. [For purposes of Section 321.101, a tax under this
	section is not an additional sales and use tax.]
	SECTION 2.13.  Section 321.108(f), Tax Code, is amended to
	read as follows:
	(f)  If, in a municipality in which a crime control and
	prevention district is composed of the whole municipality, a
	municipal sales and use tax or a municipal sales and use tax rate
	increase for the purpose of financing a crime control and
	prevention district is approved, the municipality is responsible
	for distributing to the district that portion of the municipal
	sales and use tax revenue received from the comptroller that is to
	be used for the purposes of financing the crime control and
	prevention district.  Not later than the 10th day after the date
	the municipality receives money under this section from the
	comptroller, the municipality shall make the distribution in the
	proportion that the crime control and prevention portion of the tax
	rate bears to the total sales and use tax rate of the
	municipality.  [The amounts distributed to a crime control and
	prevention district are not considered to be additional municipal
	sales and use tax revenue for the purpose of property tax reduction
	and computation of the municipal tax rate under Section 26.041.]
	SECTION 2.14.  Section 321.201(a), Tax Code, is amended to
	read as follows:
	(a)  Each retailer in a municipality that has adopted the [a]
	tax authorized by this chapter shall add the [each] sales tax
	imposed by the municipality under this chapter and by Chapter 151 to
	the sales price, and the sum of the taxes is a part of the price, a
	debt of the purchaser to the retailer until paid, and recoverable at
	law in the same manner as the purchase price. If the municipality
	imposes the tax on gas and electricity for residential use, only the
	municipal tax is added to the sales price of sales of gas and
	electricity for residential use.
	SECTION 2.15.  Subchapter C, Chapter 321, Tax Code, is
	amended by adding Section 321.2075 to read as follows:
	Sec. 321.2075.  LOCAL TAX APPLICABLE TO OTHER STATE TAXES.
	(a)  Notwithstanding any other provision of this chapter, the sales
	tax authorized by this chapter also applies to the tax imposed by
	Chapter 163.
	(b)  The exemptions provided for under Chapter 163 apply to
	the taxes authorized by this chapter.
	(c)  For purposes of administering, collecting, and
	enforcing the tax authorized under this section, a reference in
	this chapter to Chapter 151 includes Chapter 163.
	SECTION 2.16.  Sections 321.403 and 321.404, Tax Code, are
	amended to read as follows:
	Sec. 321.403.  TIME OF ELECTION.  [(a)]  An election under
	this chapter to adopt the tax authorized by this chapter [under
	Section 321.101(a)] must be held on the first succeeding uniform
	election date for which sufficient time elapses for the holding of
	an election.
	[(b)     An election on the approval of the additional sales and
	use tax must be held on the next succeeding uniform election date
	not less than 30 days after the passage of the ordinance calling the
	election.]
	Sec. 321.404.  BALLOT WORDING.  (a)  In an election to adopt
	the tax, the ballot shall be printed to provide for voting for or
	against the [applicable] proposition: "A one percent sales and use
	tax is adopted within the city." [or "The adoption of an additional
	sales and use tax within the city at the rate of ________ of one
	percent to be used to reduce the property tax rate" (one-eighth,
	one-fourth, three-eighths, or one-half to be inserted as
	appropriate).]
	(b)  In an election to repeal the tax, the ballot shall be
	printed to provide for voting for or against the [applicable]
	proposition: "The local sales and use tax within the city is
	abolished[" or "The abolition of the additional sales and use tax
	within the city]."
	[(c)     In a municipality that does not impose a property tax,
	the ballot at an election to adopt the additional municipal sales
	and use tax shall be printed to provide for voting for or against
	the following proposition: "The adoption of an additional sales
	and use tax within the city at the rate of ________ of one percent"
	(one-eighth, one-fourth, three-eighths, or one-half to be inserted
	as appropriate).]
	SECTION 2.17.  Section 321.409(a), Tax Code, is amended to
	read as follows:
	(a)  Notwithstanding any provisions of this code or other
	state law, a municipality may by a combined ballot proposition
	lower or repeal any dedicated or special purpose municipal sales
	tax [, including the additional sales tax for property tax relief,]
	and by the same proposition raise or adopt any other dedicated or
	special purpose municipal sales tax [, including the additional
	sales tax for property tax relief].
	SECTION 2.18.  Section 321.506, Tax Code, is amended to read
	as follows:
	Sec. 321.506.  USE OF TAX REVENUE BY MUNICIPALITY.  The
	[Except as provided by Section 321.507, the] money received by a
	municipality under this chapter is for the use and benefit of the
	municipality and may be used for any purpose for which the general
	funds of the municipality may be used[, except that a municipality
	may not pledge the revenue received under this chapter to the
	payment of bonds or other indebtedness].
	SECTION 2.19.  Sections 321.508(a), (b), and (f), Tax Code,
	are amended to read as follows:
	(a)  A municipality may call and hold an election on the
	issue of authorizing the municipality to pledge a percentage of the
	sales and use tax revenue received under Section 321.101(a) [or
	(b), or both,] to the payment of obligations issued to pay all or
	part of the costs of one or more sports and community venue projects
	located in the municipality.
	(b)  The ballot at the election under this section must be
	printed to permit voting for or against the proposition:
	"Authorizing the City of ______ (insert name of municipality) to
	pledge not more than ______ percent (insert percentage not to
	exceed 25 percent) of the revenue received from the[ _________
	(insert ] municipal sales and use tax [, additional municipal sales
	and use tax, or both)] previously adopted in the city to the payment
	of obligations issued to pay all or part of the costs of _________
	(insert description of each sports and community venue project)."
	(f)  Section [Sections] 321.506 does [and 321.507 do] not
	apply to taxes pledged under this section.
	SECTION 2.20.  Subchapter B, Chapter 322, Tax Code, is
	amended by adding Section 322.1065 to read as follows:
	Sec. 322.1065.  LOCAL TAX APPLICABLE TO OTHER STATE TAXES.
	(a) Notwithstanding any other provision of this chapter, the sales
	tax authorized by this chapter also applies to the tax imposed by
	Chapter 163.
	(b)  The exemptions provided for under Chapter 163 apply to
	the taxes authorized by this chapter.
	(c)  For purposes of administering, collecting, and
	enforcing the tax authorized under this section, a reference in
	this chapter to Chapter 151 includes Chapter 163.
	SECTION 2.21.  Section 323.101(e), Tax Code, is amended to
	read as follows:
	(e)  If the voters of a county approve the adoption of a sales
	and use tax at an election held on the same election date on which a
	municipality having territory in the county adopts a sales and use
	tax [or an additional sales and use tax] and as a result the
	combined rate of all sales and use taxes imposed by the county and
	other political subdivisions of this state having territory in the
	county would exceed two percent at any location in the county, the
	election to adopt a county sales and use tax has no effect.
	SECTION 2.22.  Subchapter C, Chapter 323, Tax Code, is
	amended by adding Section 323.2065 to read as follows:
	Sec. 323.2065.  LOCAL TAX APPLICABLE TO OTHER STATE TAXES.
	(a) Notwithstanding any other provision of this chapter, the sales
	tax authorized by this chapter also applies to the tax imposed by
	Chapter 163.
	(b)  The exemptions provided for under Chapter 163 apply to
	the taxes authorized by this chapter.
	(c)  For purposes of administering, collecting, and
	enforcing the tax authorized under this section, a reference in
	this chapter to Chapter 151 includes Chapter 163.
	SECTION 2.23.  Sections 323.404(a) and (b), Tax Code, are
	amended to read as follows:
	(a)  Except as provided by Subsection (b), in an election to
	adopt the tax, the ballot shall be printed to provide for voting for
	or against the proposition: "Adoption of a one-half percent county
	sales and use tax within the county [to be used to reduce the county
	property tax rate]."
	(b)  In an election in a county that includes no territory
	within the limits of a municipality, the ballot shall be printed to
	provide for voting for or against the proposition: "Adoption of a
	one percent county sales and use tax within the county [to be used
	to reduce the county property tax rate]."
	SECTION 2.24.  Section 323.505, Tax Code, is amended to read
	as follows:
	Sec. 323.505.  USE OF TAX REVENUE.  [(a)]  The money
	received by a county under this chapter is for the use and benefit
	of the county and may be used for any purpose for which the general
	funds of the county may be used [shall be used for the replacement
	of property tax revenue lost as a result of the adoption of the
	taxes authorized by this chapter. Except as provided by Subsection
	(b), the revenue in excess of the revenue used to replace those
	property taxes shall be used for the reduction of indebtedness of
	the county. After all indebtedness is paid, the excess may be used
	for any purpose for which county general revenue may be used. A
	county may not pledge anticipated revenue from this source to
	secure the payment of bonds or other indebtedness for a period
	longer than one year.
	[(b)     Revenue collected from the tax imposed under this
	chapter in each of the first three years in which the tax is imposed
	in the county in excess of the amount determined as provided by
	Section 26.041(d) for each year shall be deposited in an account to
	be called the excess sales tax revenue fund. During those three
	years, revenue deposited in the excess sales tax revenue fund may be
	used only if and to the extent that taxes or other revenues of the
	county are collected in amounts less than anticipated. After that
	period, the revenue in the fund may be used for any purpose for
	which county general revenue may be used. The fund ceases to exist
	when all revenue deposited in the fund has been spent].
	SECTION 2.25.  Subtitle C, Title 3, Tax Code, is amended by
	adding Chapter 328 to read as follows:
	CHAPTER 328. EXPANDED TAX BASE FOR POLITICAL SUBDIVISIONS
	SUBCHAPTER A. GENERAL PROVISIONS
	Sec. 328.001.  DEFINITIONS. In this chapter:
	(1)  "Expanded tax base" means the sale, use, storage,
	rental, or other consumption of a taxable item under Chapter 151
	that was not subject to the tax imposed by that chapter on December
	31, 2011, or real estate that is subject to the taxes imposed by
	Chapter 163.
	(2)  "Political subdivision" means any governmental
	entity that is authorized to impose a sales and use tax, including a
	municipality, county, transportation authority created under
	Subtitle K, Title 6, Transportation Code, crime control and
	prevention district, emergency services district, hospital
	district, library district, or municipal management or improvement
	district.
	Sec. 328.002.  CHAPTER GOVERNS. Notwithstanding any other
	law, this chapter governs the rate and computation of the sales and
	use tax of each political subdivision to which this chapter
	applies.
	[Sections 328.003-328.020 reserved for expansion]
	SUBCHAPTER B. POLITICAL SUBDIVISION THAT IMPOSED AD VALOREM TAX
	Sec. 328.021.  APPLICATION OF SUBCHAPTER. This subchapter
	applies to a political subdivision that imposed an ad valorem tax
	for the 2011 tax year and that imposed a sales and use tax on
	December 31, 2011.
	Sec. 328.022.  EXPANDED TAX BASE INDEX COMPUTATION AND
	NOTIFICATION.  (a) Not later than December 1, 2011, the comptroller
	shall compute an expanded tax base index for each political
	subdivision subject to this subchapter.
	(b)  The expanded tax base index for a political subdivision
	is computed by subtracting from one a fraction, expressed as a
	percentage and rounded down to the nearest one-eighth of one
	percent:
	(1)  the numerator of which is:
	(A)  the total amount of sales and use tax
	collected by the subdivision on the sale, use, storage, and other
	consumption of all taxable items, including sales and use tax
	imposed for the benefit of another entity, for the period beginning
	on July 1, 2010, and ending on June 30, 2011; and
	(B)  the total ad valorem taxes collected by the
	subdivision for the period beginning on January 1, 2010, and ending
	on December 31, 2010; and
	(2)  the denominator of which is the total amount of
	sales and use taxes that the comptroller estimates would have been
	collected by the subdivision on the sale, use, storage, and other
	consumption of all taxable items that will be subject to the tax
	imposed by Chapter 151 on January 1, 2012, including sales and use
	taxes imposed for the benefit of another entity and also including
	taxable items subject to the tax on December 31, 2011, and real
	estate subject to the tax imposed by Chapter 163, had those items
	been taxed for the entire period beginning on July 1, 2010, and
	ending on June 30, 2011.
	(c)  For purposes of Subsection (b)(1), the comptroller may
	estimate the amount of taxes that would have been collected by a
	political subdivision that did not collect a tax for the entire
	applicable period.
	(d)  The comptroller shall establish each expanded tax base
	index using generally accepted statistical techniques and any
	relevant information available to the comptroller.
	(e)  The comptroller shall notify a political subdivision if
	the subdivision's expanded tax base index computed under Subsection
	(b) is greater than zero. The comptroller is not required to notify
	a subdivision if the subdivision's expanded tax base index is less
	than or equal to zero.
	Sec. 328.023.  TAX RATE ADJUSTMENT. (a) Except as provided
	by Section 328.025, this section does not apply to a political
	subdivision for which the comptroller has computed an expanded tax
	base index under Section 328.022 of less than or equal to zero.
	(b)  Effective on January 1, 2012, a political subdivision
	shall reduce the rate at which the subdivision is imposing the sales
	and use tax by the percentage equal to the subdivision's expanded
	tax base index, provided that the reduced rate may not be less than:
	(1)  __________ for a municipality;
	(2)  __________ for a county; and
	(3)  __________ for another type of political
	subdivision subject to this subchapter.
	(c)  In addition to the reduction of the rate imposed by a
	political subdivision under Subsection (b), the maximum tax rate at
	which the subdivision may impose the sales and use tax is also
	automatically reduced by the same percentage, provided that the
	reduced maximum rate may not be less than the applicable rate
	prescribed by Subsection (b).
	(d)  The comptroller shall deliver to each political
	subdivision required to reduce a tax rate under this section the
	expanded tax base index on or before December 15, 2011.
	(e)  Except for mandamus to compute or recompute the expanded
	tax base, a determination under this section is not subject to
	appeal.
	Sec. 328.024.  EXPANDED TAX BASE INDEX RECOMPUTATION AND
	NOTIFICATION. Not later than August 1, 2013, the comptroller shall
	recompute the expanded tax base index for each political
	subdivision subject to this subchapter in the same manner as the
	computation under Section 328.022, taking into account at least one
	year's actual economic experience in relation to the expanded tax
	base and any other factor the comptroller determines is
	appropriate. The comptroller shall notify each subdivision of the
	subdivision's recomputed expanded tax base index.
	Sec. 328.025.  RECOMPUTED TAX RATE ADJUSTMENT. (a) This
	section does not apply to a political subdivision for which the
	comptroller has:
	(1)  computed an expanded tax base index under Section
	328.022 of less than or equal to zero; and
	(2)  recomputed an expanded tax base index under
	Section 328.024 of less than or equal to zero.
	(b)  Effective on the earlier of October 1, 2013, or the
	first day of the next calendar quarter that begins at least 30 days
	after the date the comptroller notifies a political subdivision of
	the subdivision's recomputed expanded tax base index under Section
	328.024, the subdivision shall adjust the rate at which the
	subdivision is imposing the sales and use tax and the subdivision's
	maximum tax rate as necessary to reflect the recomputed expanded
	tax base index.  The subdivision shall set the subdivision's
	adjusted rates at the rates the subdivision determines would have
	applied under Section 328.023 had the recomputed expanded tax base
	index been used in the computation under that section.
	[Sections 328.026-328.100 reserved for expansion]
	SUBCHAPTER C. POLITICAL SUBDIVISION THAT DID NOT IMPOSE AD
	VALOREM TAX
	Sec. 328.101.  APPLICATION OF SUBCHAPTER. This subchapter
	applies to a political subdivision that did not impose an ad valorem
	tax for the 2011 tax year and that imposed a sales and use tax on
	December 31, 2011.
	Sec. 328.102.  EXPANDED TAX BASE INDEX COMPUTATION AND
	NOTIFICATION.  (a) Not later than December 1, 2011, the comptroller
	shall compute an expanded tax base index for each political
	subdivision subject to this subchapter.
	(b)  The expanded tax base index for a political subdivision
	is computed by subtracting from one a fraction, expressed as a
	percentage and rounded down to the nearest one-eighth of one
	percent:
	(1)  the numerator of which is the total amount of sales
	and use tax collected by the subdivision on the sale, use, storage,
	and other consumption of all taxable items for the period beginning
	on July 1, 2010, and ending on June 30, 2011; and
	(2)  the denominator of which is the total amount of
	sales and use taxes that the comptroller estimates would have been
	collected by the subdivision on the sale, use, storage, and other
	consumption of all taxable items that will be subject to the tax
	imposed by Chapter 151 on January 1, 2012, including taxable items
	subject to the tax on December 31, 2011, and real estate subject to
	the tax imposed by Chapter 163, had those items been taxed for the
	entire period beginning on July 1, 2010, and ending on June 30,
	2011.
	(c)  For purposes of Subsection (b)(1), the comptroller may
	estimate the amount of taxes that would have been collected by a
	political subdivision that did not collect a tax for the entire
	applicable period.
	(d)  The comptroller shall establish each expanded tax base
	index using generally accepted statistical techniques and any
	relevant information available to the comptroller.
	(e)  The comptroller shall notify each political subdivision
	subject to this subchapter of the subdivision's expanded tax base
	index.
	Sec. 328.103.  TAX RATE ADJUSTMENT. (a) Effective on
	January 1, 2012, a political subdivision shall reduce the rate at
	which the subdivision is imposing the sales and use tax by the
	percentage equal to the subdivision's expanded tax base index,
	provided that the reduced rate may not be less than:
	(1)  _______________________ for a municipality;
	(2)  _______________________ for a transportation
	authority created under Subtitle K, Title 6, Transportation Code;
	(3)  _______________________ for a county; and
	(4)  _______________________ for another type of
	political subdivision subject to this subchapter.
	(b)  In addition to the reduction of the rate imposed by a
	political subdivision under Subsection (a), the maximum tax rate at
	which the subdivision may impose the sales and use tax is also
	automatically reduced by the same percentage, provided that the
	reduced maximum rate may not be less than the applicable rate
	prescribed by Subsection (a).
	(c)  The comptroller shall deliver to each political
	subdivision required to reduce a tax rate under this section the
	expanded tax base index on or before December 15, 2011.
	(d)  Except for mandamus to compute or recompute the expanded
	tax base, a determination under this section is not subject to
	appeal.
	Sec. 328.104.  EXPANDED TAX BASE INDEX RECOMPUTATION AND
	NOTIFICATION.  Not later than August 1, 2013, the comptroller shall
	recompute the expanded tax base index for each political
	subdivision subject to this subchapter in the same manner as the
	computation under Section 328.102, taking into account at least one
	year's actual economic experience in relation to the expanded tax
	base and any other factor the comptroller determines is
	appropriate. The comptroller shall notify each subdivision of the
	subdivision's recomputed expanded tax base index.
	Sec. 328.105.  RECOMPUTED TAX RATE ADJUSTMENT.  Effective on
	the earlier of October 1, 2013, or the first day of the next
	calendar quarter that begins at least 30 days after the date the
	comptroller notifies a political subdivision of the subdivision's
	recomputed expanded tax base index under Section 328.104, the
	subdivision shall adjust the rate at which the subdivision is
	imposing the sales and use tax and the subdivision's maximum tax
	rate as necessary to reflect the recomputed expanded tax base
	index.  The subdivision shall set the subdivision's adjusted rates
	at the rates the subdivision determines would have applied under
	Section 328.103 had the recomputed expanded tax base index been
	used in the computation under that section.
	SECTION 2.26.  The following provisions of the Tax Code are
	repealed:
	(1)  Section 151.305;
	(2)  Section 151.311;
	(3)  Section 151.3111;
	(4)  Section 151.319(a);
	(5)  Section 151.320;
	(6)  Section 151.333;
	(7)  Section 151.335;
	(8)  Section 151.336;
	(9)  Section 151.340;
	(10)  Section 151.351;
	(11)  Section 151.432;
	(12)  Section 321.002(a)(1);
	(13)  Section 321.004;
	(14)  Sections 321.101(b), (c), (d), and (e);
	(15)  Section 321.102(b);
	(16)  Section 321.1025;
	(17)  Section 321.206;
	(18)  Section 321.2091;
	(19)  Sections 321.401(d) and (e);
	(20)  Section 321.405(c); and
	(21)  Section 321.507.
	SECTION 2.27.  Notwithstanding any other law, beginning
	January 1, 2012, a municipality of this state may not impose an
	additional municipal sales and use tax.
	SECTION 2.28.  (a)  The receipts from the sale, use, or
	rental of and the storage, use, or consumption in this state of
	taxable services that become subject to the sales and use tax under
	Chapter 151, Tax Code, because of the change in law made by this
	article are exempt from the sales and use tax if:
	(1)  the services are used for the performance of a
	written contract entered into before the date this Act takes effect
	if the contract is not subject to change or modification by reason
	of the tax or the services are used pursuant to an obligation of a
	bid or bids submitted before the date this Act takes effect if the
	bid or bids may not be withdrawn, modified, or changed by reason of
	the tax imposed by this article; and
	(2)  notice of a contract or bid on which an exemption
	is to be claimed is given by the taxpayer to the comptroller of
	public accounts before the 61st day after the date this Act takes
	effect.
	(b)  The exemption provided by this section expires on
	December 31, 2014.
	SECTION 2.29.  (a)  There is exempted from the use tax
	imposed by Subchapter D, Chapter 151, Tax Code, the storage, use, or
	other consumption of an item of tangible personal property or real
	property or the value of the performance of a service if the item or
	service was purchased before January 1, 2012, and the item or
	service was exempt, or, had it been purchased in Texas at the same
	time would have been exempt, from the sales tax imposed by
	Subchapter C, Chapter 151, Tax Code.
	(b)  This section does not apply to an item or service
	otherwise exempted by this section after the item or service is
	subject to the sales tax imposed by Subchapter C, Chapter 151, Tax
	Code, because of a subsequent sale or lease of the item.
	SECTION 2.30.  (a)  The comptroller of public accounts shall
	begin payments under Section 151.802, Tax Code, as added by this
	article, beginning with payments for the calendar year 2012.
	(b)  The change in law made by this article does not affect
	tax liability accruing before the effective date of this Act.  That
	liability continues in effect as if this article had not been
	enacted, and the former law is continued in effect for the
	collection of taxes due and for civil and criminal enforcement of
	the liability for those taxes.
	ARTICLE 3. REAL ESTATE TRANSACTION TAX
	SECTION 3.01.  Subtitle E, Title 2, Tax Code, is amended by
	adding Chapter 163 to read as follows:
	CHAPTER 163. REAL ESTATE TRANSACTION TAX
	Sec. 163.001.  DEFINITIONS.  In this chapter:
	(1)  "Real estate" means real property, including a
	building, structure, or other improvement to real property.
	(2)  "Sale" means any of the following when done or
	performed for consideration:
	(A)  a transfer of title or possession of real
	estate; and
	(B)  the exchange, barter, lease, or rental of
	real estate.
	Sec. 163.002.  TAX IMPOSED.  (a)  A tax is imposed on each
	sale of real estate in this state.
	(b)  The tax rate is _______ percent of the sale price of the
	real estate.
	Sec. 163.003.  COLLECTION, ADMINISTRATION, AND ENFORCEMENT
	OF TAX.  The sale of real estate under this chapter shall be
	treated, for the purposes of the collection, administration, and
	enforcement of the tax under this chapter, as the sale of a taxable
	item under Chapter 151 and the applicable provisions of that
	chapter apply for these purposes.
	Sec. 163.004.  EXEMPTIONS.  A person who is exempted from the
	state sales and use tax imposed under Chapter 151 is exempt from the
	tax imposed under this chapter.
	Sec. 163.005.  REVENUE.  The revenue from the collection of
	taxes imposed under this chapter shall be deposited to the credit of
	the general revenue fund.
	SECTION 3.02.  (a)  There are exempted from the taxes
	imposed under Chapter 163, Tax Code, as added by this article, the
	receipts from the sale of real estate that is the subject of a
	written contract or bid entered into on or before March 1, 2011.
	(b)  The exemption provided by this section expires January
	1, 2014.
	ARTICLE 4.  PUBLIC SCHOOL FINANCE
	SECTION 4.01.  The heading to Section 42.002, Education
	Code, is amended to read as follows:
	Sec. 42.002.  PURPOSE [PURPOSES] OF FOUNDATION SCHOOL
	PROGRAM.
	SECTION 4.02.  Section 42.002(a), Education Code, is amended
	to read as follows:
	(a)  The purpose [purposes] of the Foundation School Program
	set forth in this chapter is [are] to guarantee that each school
	district in the state has[:
	[(1)]  adequate resources to provide each eligible
	student a basic instructional program and facilities suitable to
	the student's educational needs[; and
	[(2)     access to a substantially equalized program of
	financing in excess of basic costs for certain services, as
	provided by this chapter].
	SECTION 4.03.  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; and
	(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].
	SECTION 4.04.  Section 42.008, Education Code, is amended by
	amending Subsection (a) and adding Subsection (a-1) to read as
	follows:
	(a)  Notwithstanding any other provision of this title, a
	school district is not entitled in any school year to receive an
	amount of state [and local] maintenance and operations revenue per
	student in [weighted] average daily attendance that exceeds by more
	than $350 the amount of state [and local] maintenance and
	operations revenue per student in [weighted] average daily
	attendance received by the district during the preceding school
	year.
	(a-1)  Subsection (a) applies beginning with the 2013-2014
	school year. For the 2012-2013 school year, notwithstanding any
	other provision of this title, a school district is not entitled to
	receive a total amount of state maintenance and operations revenue
	per student in average daily attendance that exceeds by more than
	$350 the amount of state and local maintenance and operations
	revenue per student in average daily attendance received by the
	district during the 2010-2011 school year. This subsection expires
	September 1, 2013.
	SECTION 4.05.  Sections 42.101(a) and (a-1), Education Code,
	are amended to read as follows:
	(a)  For each student in average daily attendance, not
	including the time students spend each day in special education
	programs in an instructional arrangement other than mainstream or
	career and technology education programs, for which an additional
	allotment is made under Subchapter C, a district is entitled to an
	allotment [equal to the lesser] of $4,765 [or the amount that
	results from the following formula:
	[A = $4,765 X (DCR/MCR)
	where:
	["A" is the allotment to which a district is entitled;
	["DCR" is the district's compressed tax rate, which is the
	product of the state compression percentage, as determined under
	Section 42.2516, multiplied by the maintenance and operations tax
	rate adopted by the district for the 2005 tax year; and
	["MCR" is the state maximum compressed tax rate, which is the
	product of the state compression percentage, as determined under
	Section 42.2516, multiplied by $1.50].
	(a-1)  Subsection (a) applies beginning with the 2013-2014
	school year.  For the [2009-2010 through] 2012-2013 school year
	[years], Subsection (a) applies, except the [each] reference to
	$4,765 in that subsection is replaced with an amount equal to the
	greater of:
	(1)  $4,765; or
	(2)  the amount equal to the product of .0165 and the
	average statewide property value per [weighted] student.
	SECTION 4.06.  Section 42.154(e), Education Code, is amended
	to read as follows:
	(e)  Out of the total statewide allotment for career and
	technology education under this section, the commissioner shall set
	aside an amount specified in the General Appropriations Act, which
	may not exceed an amount equal to one percent of the total amount
	appropriated, to support regional career and technology education
	planning. After deducting the amount set aside under this
	subsection from the total amount appropriated for career and
	technology education under this section, the commissioner shall
	reduce each district's allotment proportionately and shall
	allocate funds to each district accordingly [tier one allotments in
	the same manner described for a reduction in allotments under
	Section 42.253].
	SECTION 4.07.  Section 42.156(d), Education Code, is amended
	to read as follows:
	(d)  If the amount of state funds for which school districts
	are eligible under this section exceeds the amount of state funds
	appropriated in any year for the programs, the commissioner shall
	reduce each district's allotment proportionately and shall
	allocate funds to each district accordingly [tier one allotments in
	the same manner described for a reduction in allotments under
	Section 42.253].
	SECTION 4.08.  Sections 42.158(d) and (g), Education Code,
	are amended to read as follows:
	(d)  Subject to Subsection (d-1), the amount appropriated
	for allotments under this section may not exceed $25 million in a
	school year.  If the total amount of allotments to which districts
	are entitled under this section for a school year exceeds the amount
	appropriated under this subsection, the commissioner shall reduce
	each district's allotment under this section proportionately [in
	the manner provided by Section 42.253(h)].
	(g)  In this section, "instructional facility" means real
	property, an improvement to real property, or a necessary fixture
	of an improvement to real property that is used predominately for
	teaching the curriculum required under Section 28.002 [has the
	meaning assigned by Section 46.001].
	SECTION 4.09.  Section 42.159(g), Education Code, is amended
	to read as follows:
	(g)  Amounts received by a school district or
	open-enrollment charter school under this section are in addition
	to any amounts to which the district or school is entitled to
	receive [or retain] under Chapter 12 [or 41] or this chapter and are
	not subject to reduction under any provision of those chapters.
	SECTION 4.10.  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, 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)]  state available school funds distributed in
	accordance with law; and
	(2) [(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 state available school [other] funds
	[specified in this subsection].
	SECTION 4.11.  Section 42.2513(a), Education Code, is
	amended to read as follows:
	(a)  A school district[, including a school district that is
	otherwise ineligible for state aid under this chapter,] is entitled
	to state aid in an amount equal to the sum of:
	(1)  the product of $500 multiplied by the number of
	full-time district employees, other than administrators or
	employees subject to the minimum salary schedule under Section
	21.402; and
	(2)  the product of $250 multiplied by the number of
	part-time district employees, other than administrators.
	SECTION 4.12.  Sections 42.2524(c) and (d), Education Code,
	are amended to read as follows:
	(c)  The commissioner may provide reimbursement under this
	section only if funds are available for that purpose [as follows:
	[(1)     reimbursement for a school district not required
	to take action under Chapter 41 may be provided] from:
	(1) [(A)]  amounts appropriated for that purpose,
	including amounts appropriated for those districts for that purpose
	to the disaster contingency fund established under Section 418.073,
	Government Code; or
	(2) [(B)]  Foundation School Program funds available
	for that purpose, based on a determination by the commissioner that
	the amount appropriated for the Foundation School Program[,
	including the facilities component as provided by Chapter 46,]
	exceeds the amount to which districts are entitled under this
	chapter [and Chapter 46; and
	[(2)     reimbursement for a school district required to
	take action under Chapter 41 may be provided from funds described by
	Subdivision (1)(B) if funds remain available after fully
	reimbursing each school district described by Subdivision (1) for
	its disaster remediation costs].
	(d)  If the amount of money available for purposes of
	reimbursing school districts [not required to take action under
	Chapter 41] is not sufficient to fully reimburse each district's
	disaster remediation costs, the commissioner shall reduce the
	amount of assistance provided to each of those districts
	proportionately.  [If the amount of money available for purposes of
	reimbursing school districts required to take action under Chapter
	41 is not sufficient to fully reimburse each district's disaster
	remediation costs, the commissioner shall reduce the amount of
	assistance provided to each of those districts proportionately.]
	SECTION 4.13. Sections 42.253(a), (b), (c), (g), (h), and
	(i), 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; and
	(2)  [the amount of money to which a school district is
	entitled under Subchapter F;
	[(3)]  the amount of money allocated to the district
	from the available school fund[;
	[(4)     the amount of each district's tier one local share
	under Section 42.252; and
	[(5)     the amount of each district's tier two local share
	under Section 42.302].
	(b)  The [Except as provided by this subsection, the]
	commissioner shall base the determinations under Subsection (a) on
	the estimate [estimates] provided to the legislature under Section
	42.254, or, if the General Appropriations Act provides an estimate
	[estimates] for that purpose, on the estimate [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.]
	(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 the sum of Subsections (a)(3), (a)(4), and
	(a)(5)].
	(g)  If a school district demonstrates to the satisfaction of
	the commissioner that the estimate of the district's [tax rate,]
	student enrollment[, or taxable value of property] used in
	determining the amount of state funds to which the district is
	entitled is [are] so inaccurate as to result in undue financial
	hardship to the district, the commissioner may adjust funding to
	that district in that school year to the extent that funds are
	available for that year.
	(h)  If the amount appropriated for the Foundation School
	Program for the second year of a state fiscal biennium is less than
	the amount to which school districts are entitled for that year, the
	commissioner shall certify the amount of the difference to the
	Legislative Budget Board not later than January 1 of the second year
	of the state fiscal biennium.  The Legislative Budget Board shall
	propose to the legislature that the certified amount be transferred
	to the foundation school fund from the economic stabilization fund
	and appropriated for the purpose of increases in allocations under
	this subsection. If the legislature fails during the regular
	session to enact the  proposed transfer and appropriation and there
	are not funds available under Subsection (j), the commissioner
	shall reduce the total amount of state funds allocated to each
	district proportionately [by an amount determined by a method under
	which the application of the same number of cents of increase in tax
	rate in all districts applied to the taxable value of property of
	each district, as determined under Subchapter M, Chapter 403,
	Government Code, results in a total levy equal to the total
	reduction].  The following fiscal year, a district's entitlement
	under this section is increased by an amount equal to the reduction
	made under this subsection.
	(i)  Not later than March 1 each year, the commissioner shall
	determine the actual amount of state funds to which each school
	district is entitled under the allocation formulas in this chapter
	for the current school year and shall compare that amount with the
	amount of the warrants issued to each district for that year. If
	the amount of the warrants differs from the amount to which a
	district is entitled because of variations in the district's [tax
	rate,] student enrollment, [or taxable value of property,] the
	commissioner shall adjust the district's entitlement for the next
	fiscal year accordingly.
	SECTION 4.14.  Section 42.254, Education Code, is amended to
	read as follows:
	Sec. 42.254.  ESTIMATE [ESTIMATES] REQUIRED.  (a)  Not later
	than October 1 of each even-numbered year,[:
	[(1)]  the agency shall submit to the legislature an
	estimate of the [tax rate and] student enrollment of each school
	district for the following biennium[; and
	[(2)     the comptroller shall submit to the legislature
	an estimate of the total taxable value of all property in the state
	as determined under Subchapter M, Chapter 403, Government Code, for
	the following biennium].
	(b)  The agency [and the comptroller] shall update the
	information provided to the legislature under Subsection (a) not
	later than March 1 of each odd-numbered year.
	SECTION 4.15.  Section 42.259(b), Education Code, is amended
	to read as follows:
	(b)  Payments from the foundation school fund to each
	[category 1] school district shall be made as follows:
	(1)  15 percent of the yearly entitlement of the
	district shall be paid in an installment to be made on or before the
	25th day of September of a fiscal year;
	(2)  80 percent of the yearly entitlement of the
	district shall be paid in eight equal installments to be made on or
	before the 25th day of October, November, December, January, March,
	May, June, and July; and
	(3)  five percent of the yearly entitlement of the
	district shall be paid in an installment to be made on or before the
	25th day of February.
	SECTION 4.16.  Section 42.352, Education Code, is amended to
	read as follows:
	Sec. 42.352.  STANDARDS. The State Board of Education shall
	establish standards for adequacy of school facilities. The
	standards shall include requirements related to space, educational
	adequacy, and construction quality. All facilities constructed
	after September 1, 1992, must meet the standards in order to be
	financed with state [or local tax] funds.
	SECTION 4.17.  Section 43.002(b), Education Code, is amended
	to read as follows:
	(b)  Of the amounts available for transfer from the general
	revenue fund to the available school fund for the months of January
	and February of each fiscal year, no more than the amount necessary
	to enable the comptroller to distribute from the available school
	fund an amount equal to 9-1/2 percent of the estimated annual
	available school fund apportionment to [category 1] school
	districts[, as defined by Section 42.259, and 3-1/2 percent of the
	estimated annual available school fund apportionment to category 2
	school districts, as defined by Section 42.259,] may be transferred
	from the general revenue fund to the available school fund. Any
	remaining amount that would otherwise be available for transfer for
	the months of January and February shall be transferred from the
	general revenue fund to the available school fund in equal amounts
	in June and in August of the same fiscal year.
	SECTION 4.18.  The heading to Section 44.004, Education
	Code, is amended to read as follows:
	Sec. 44.004.  NOTICE OF BUDGET [AND TAX RATE] MEETING;
	BUDGET ADOPTION.
	SECTION 4.19.  Sections 44.004(b), (c), and (f), Education
	Code, are amended to read as follows:
	(b)  The president shall provide for the publication of
	notice of the budget [and proposed tax rate] meeting in a daily,
	weekly, or biweekly newspaper published in the district. If no
	daily, weekly, or biweekly newspaper is published in the district,
	the president shall provide for the publication of notice in at
	least one newspaper of general circulation in the county in which
	the district's central administrative office is located.  Notice
	under this subsection shall be published not earlier than the 30th
	day or later than the 10th day before the date of the meeting
	[hearing].
	(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.
	The [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."]; and
	(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
	amount [amounts] budgeted for the preceding fiscal year and the
	amount budgeted for the subsequent 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 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
	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].
	(f)  The board of trustees, at the meeting called for that
	purpose, shall adopt a budget to cover all expenditures for the
	school district for the next succeeding fiscal year. Any resident
	[taxpayer] of the district may be present and participate in the
	meeting.
	SECTION 4.20.  The heading to Section 45.001, Education
	Code, is amended to read as follows:
	Sec. 45.001.  BONDS; [AND BOND] TAXES.
	SECTION 4.21.  Section 45.001, Education Code, is amended by
	amending Subsection (a) and adding Subsection (d) to read as
	follows:
	(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:
	(1)  issue bonds for:
	(A)  the construction, acquisition, and equipment
	of school buildings in the district;
	(B)  the acquisition of property or the
	refinancing of property financed under a contract entered under
	Subchapter A, Chapter 271, Local Government Code, regardless of
	whether payment obligations under the contract are due in the
	current year or a future year;
	(C)  the purchase of the necessary sites for
	school buildings; and
	(D)  the purchase of new school buses; and
	(2)  may [levy,] pledge state funds to be received
	under Chapters 42 and 43[, assess, and collect annual ad valorem
	taxes] sufficient to pay the principal of and interest on the bonds
	as or before the principal and interest become due[, subject to
	Section 45.003].
	(d)  Notwithstanding any other provision of this code, the
	governing body of a school district may not impose an ad valorem
	tax.
	SECTION 4.22.  Sections 45.004(b), (c), and (i), Education
	Code, are amended to read as follows:
	(b)  Each governing board or commissioners court described
	by Section 45.001 may refund or refinance all or any part of any of
	the district's outstanding bonds and matured or unmatured but
	unpaid interest on those bonds payable from state funds to be
	received under Chapters 42 and 43 [ad valorem taxes] by issuing
	refunding bonds payable from the same funds [ad valorem taxes].
	(c)  A series or issue of refunding bonds may not be issued
	unless:
	(1)  the total debt service on the refunding bonds will
	amount to less than the total debt service on the bonds being
	refunded;
	(2)  if a maximum interest rate was voted for the bonds
	being refunded, the refunding bonds do not bear interest at a rate
	higher than that maximum rate; and
	(3)  the refunding bonds are payable from the same
	funds [taxes of the same nature] as those pledged to the payment of
	the obligations being refunded.
	(i)  If the governing body or commissioners court has entered
	into an escrow or a similar agreement under Subsection (h), the
	refunded bonds are considered to be defeased and may not be included
	in or considered to be an indebtedness of the district for the
	purpose of a limitation on outstanding indebtedness [or taxation]
	or for any other purpose.
	SECTION 4.23.  Section 45.103(a), Education Code, is amended
	to read as follows:
	(a)  Any school district in need of funds to construct,
	repair, or renovate school buildings, purchase school buildings and
	school equipment, or equip school properties with necessary
	heating, water, sanitation, lunchroom, or electric facilities [or
	in need of funds with which to employ a person who has special skill
	and experience to compile taxation data and] that is financially
	unable out of available funds to construct, repair, renovate, or
	purchase school buildings, purchase school equipment, or equip
	school properties with necessary heating, water, sanitation,
	lunchroom, or electric facilities [or is unable to pay the person
	for compiling taxation data,] may, subject to this section, issue
	interest-bearing time warrants, in amounts sufficient to
	construct, purchase, equip, or improve school buildings and
	facilities [or to pay all or part of the compensation of the person
	to compile taxation data], any law to the contrary notwithstanding.
	The warrants shall mature in serial installments of not more than
	five years from their date of issue. The warrants on maturity may
	be payable out of any available funds of the school district in the
	order of their maturity dates. Any interest-bearing time warrants
	may be issued and sold by the district for not less than their face
	value, and the proceeds used to provide funds required for the
	purpose for which they are issued. The warrants shall be entitled
	to first payment out of any available funds of the district as they
	become due. Included in the purposes for which interest-bearing
	time warrants may be issued is the payment of any amounts owed by
	the school district that was incurred in carrying out any of those
	purposes.
	SECTION 4.24.  Section 45.105(c), Education Code, is amended
	to read as follows:
	(c)  Local school funds from [district taxes,] tuition fees
	of students not entitled to a free education and[,] other local
	sources[,] and state funds not designated for a specific purpose
	may be used for the purposes listed for state and county available
	funds and for purchasing appliances and supplies, paying insurance
	premiums, paying janitors and other employees, buying school sites,
	buying, building, repairing, and renting school buildings,
	including acquiring school buildings and sites by leasing through
	annual payments with an ultimate option to purchase, and for other
	purposes necessary in the conduct of the public schools determined
	by the board of trustees. The accounts and vouchers for county
	districts must be approved by the county superintendent. If the
	state available school fund in any municipality or district is
	sufficient to maintain the schools in any year for at least eight
	months and leave a surplus, the surplus may be spent for the
	purposes listed in this subsection.
	SECTION 4.25.  Section 45.108(a), Education Code, is amended
	to read as follows:
	(a)  Independent or consolidated school districts may borrow
	money for the purpose of paying maintenance expenses and may
	evidence those loans with negotiable notes, except that the loans
	may not at any time exceed 75 percent of the previous year's income.
	The notes may be payable from and secured by a lien on and pledge of
	any available funds of the district[, including proceeds of a
	maintenance tax]. The term "maintenance expenses" or "maintenance
	expenditures" as used in this section [means any lawful expenditure
	of the school district other than payment of principal of and
	interest on bonds. The term] includes all costs incurred in
	connection with environmental cleanup and asbestos cleanup and
	removal programs implemented by school districts or in connection
	with the maintenance, repair, rehabilitation, or replacement of
	heating, air conditioning, water, sanitation, roofing, flooring,
	electric, or other building systems of existing school properties.
	Notes issued pursuant to this section may be issued to mature in not
	more than 20 years from their date. [Notes issued for a term longer
	than one year must be treated as "debt" as defined in Section
	26.012(7), Tax Code.]
	SECTION 4.26.  Section 45.109(c), Education Code, is amended
	to read as follows:
	(c)  The consideration for a contract under this section may
	be paid from any source available to the independent school
	district.  [If voted as provided by this section, the district may
	pledge to the payment of the contract an annual maintenance tax in
	an amount sufficient, without limitation, to provide all of the
	consideration. If voted and pledged, the maintenance tax shall be
	assessed, levied, and collected annually in the same manner as
	provided by general law applicable to independent school districts
	for other maintenance taxes.]
	SECTION 4.27.  Section 45.156(c), Education Code, is amended
	to read as follows:
	(c)  The consideration payable by the district under a
	contract may be paid from any source available to the district. [If
	voted, the district may pledge to the payment of the contract an
	annual maintenance tax in an amount sufficient, without limitation,
	to provide all or part of the consideration. If voted and pledged,
	the maintenance tax shall be assessed, levied, and collected
	annually in the same manner as provided by general law applicable to
	independent school districts for other maintenance taxes. A
	maintenance tax may not be pledged to the payment of any contract or
	assessed, levied, or collected unless an election is held in the
	district, and the maintenance tax for that purpose is favorably
	voted by a majority of the qualified voters of the district. The
	election order for an election under this subsection must include
	the polling place or places and any other matters considered
	advisable by the board of trustees.]
	SECTION 4.28.  Section 45.251(2), Education Code, is amended
	to read as follows:
	(2)  "Foundation School Program" means the program
	established under Chapter [Chapters 41,] 42[, and 46,] or any
	successor program of state appropriated funding for school
	districts in this state.
	SECTION 4.29.  Section 45.261(a), Education Code, is amended
	to read as follows:
	(a)  If the commissioner orders payment from the money
	appropriated to the Foundation School Program on behalf of a school
	district [that is not required to reduce its wealth per student
	under Chapter 41], the commissioner shall direct the comptroller to
	withhold the amount paid from the first state money payable to the
	district.  [If the commissioner orders payment from the money
	appropriated to the Foundation School Program on behalf of a school
	district that is required to reduce its wealth per student under
	Chapter 41, the commissioner shall increase amounts due from the
	district under that chapter in a total amount equal to the amount of
	payments made on behalf of the district under this subchapter.]
	Amounts withheld [or received] under this subsection shall be used
	for the Foundation School Program.
	SECTION 4.30.  Sections 7.062(b) and (e), Education Code,
	are amended to read as follows:
	(b)  Using amounts appropriated for that purpose, the [The]
	commissioner shall establish a program to provide competitive
	grants to school districts for the purpose of constructing or
	renovating high school science laboratories.
	(e)  The rules must:
	(1)  limit the amount of assistance provided through a
	grant to not more than:
	(A)  for a construction project, $200 per square
	foot of the science laboratory to be constructed; or
	(B)  for a renovation project, $100 per square
	foot of the science laboratory to be renovated; and
	(2)  require a school district to demonstrate, as a
	condition of eligibility for a grant, that the existing district
	science laboratories are insufficient in number to comply with the
	curriculum requirements imposed for the recommended and advanced
	high school programs under Section 28.025(b-1)(1)[; and
	[(3)     provide for ranking school districts that apply
	for grants on the basis of wealth per student and giving priority in
	the award of grants to districts with low wealth per student].
	SECTION 4.31.  Sections 11.1511(b) and (c), Education Code,
	are amended to read as follows:
	(b)  The board shall:
	(1)  seek to establish working relationships with other
	public entities to make effective use of community resources and to
	serve the needs of public school students in the community;
	(2)  adopt a vision statement and comprehensive goals
	for the district and the superintendent and monitor progress toward
	those goals;
	(3)  establish performance goals for the district
	concerning:
	(A)  the academic and fiscal performance
	indicators under Subchapters C, D, and J, Chapter 39; and
	(B)  any performance indicators adopted by the
	district;
	(4)  ensure that the superintendent:
	(A)  is accountable for achieving performance
	results;
	(B)  recognizes performance accomplishments; and
	(C)  takes action as necessary to meet performance
	goals;
	(5)  adopt a policy to establish a district- and
	campus-level planning and decision-making process as required
	under Section 11.251;
	(6)  publish an annual educational performance report
	as required under Section 39.306;
	(7)  adopt an annual budget for the district as
	required under Section 44.004;
	(8)  [adopt a tax rate each fiscal year as required
	under Section 26.05, Tax Code;
	[(9)]  monitor district finances to ensure that the
	superintendent is properly maintaining the district's financial
	procedures and records;
	(9) [(10)]  ensure that district fiscal accounts are
	audited annually as required under Section 44.008;
	(10) [(11)]  publish an end-of-year financial report
	for distribution to the community;
	(11) [(12)]  conduct elections as required by law;
	(12) [(13)]  by rule, adopt a process through which
	district personnel, students or the parents or guardians of
	students, and members of the public may obtain a hearing from the
	district administrators and the board regarding a complaint;
	(13) [(14)]  make decisions relating to terminating
	the employment of district employees employed under a contract to
	which Chapter 21 applies, including terminating or not renewing an
	employment contract to which that chapter applies; and
	(14) [(15)]  carry out other powers and duties as
	provided by this code or other law.
	(c)  The board may:
	(1)  issue bonds and pledge state funds [levy, pledge,
	assess, and collect an annual ad valorem tax] to pay the principal
	and interest on the bonds as authorized under Section [Sections]
	45.001 [and 45.003];
	[(2)     levy, assess, and collect an annual ad valorem
	tax for maintenance and operation of the district as authorized
	under Sections 45.002 and 45.003;
	[(3)     employ a person to assess or collect the
	district's taxes as authorized under Section 45.231;] and
	(2) [(4)]  enter into contracts as authorized under
	this code or other law and delegate contractual authority to the
	superintendent as appropriate.
	SECTION 4.32.  Section 12.013(b), Education Code, is amended
	to read as follows:
	(b)  A home-rule school district is subject to:
	(1)  a provision of this title establishing a criminal
	offense;
	(2)  a provision of this title relating to limitations
	on liability; and
	(3)  a prohibition, restriction, or requirement, as
	applicable, imposed by this title or a rule adopted under this
	title, relating to:
	(A)  the Public Education Information Management
	System (PEIMS) to the extent necessary to monitor compliance with
	this subchapter as determined by the commissioner;
	(B)  educator certification under Chapter 21 and
	educator rights under Sections 21.407, 21.408, and 22.001;
	(C)  criminal history records under Subchapter C,
	Chapter 22;
	(D)  student admissions under Section 25.001;
	(E)  school attendance under Sections 25.085,
	25.086, and 25.087;
	(F)  inter-district or inter-county transfers of
	students under Subchapter B, Chapter 25;
	(G)  elementary class size limits under Section
	25.112, in the case of any campus in the district that fails to
	satisfy any standard under Section 39.054(d);
	(H)  high school graduation under Section 28.025;
	(I)  special education programs under Subchapter
	A, Chapter 29;
	(J)  bilingual education under Subchapter B,
	Chapter 29;
	(K)  prekindergarten programs under Subchapter E,
	Chapter 29;
	(L)  safety provisions relating to the
	transportation of students under Sections 34.002, 34.003, 34.004,
	and 34.008;
	(M)  computation and distribution of state aid
	under Chapters 31, 42, and 43;
	(N)  extracurricular activities under Section
	33.081;
	(O)  health and safety under Chapter 38;
	(P)  public school accountability under
	Subchapters B, C, D, E, and J, Chapter 39;
	(Q)  [equalized wealth under Chapter 41;
	[(R)]  a bond or other obligation [or tax rate]
	under Chapters 42, 43, and 45; and
	(R) [(S)]  purchasing under Chapter 44.
	SECTION 4.33.  Section 12.029(b), Education Code, is amended
	to read as follows:
	(b)  If [Except as provided by Subchapter H, Chapter 41, if]
	two or more school districts having different status, one of which
	is home-rule school district status, consolidate into a single
	district, the petition under Section 13.003 initiating the
	consolidation must state the status for the consolidated district.
	The ballot shall be printed to permit voting for or against the
	proposition: "Consolidation of (names of school districts) into a
	single school district governed as (status of school district
	specified in the petition)."
	SECTION 4.34.  Section 12.106(a), Education Code, is amended
	to read as follows:
	(a)  A charter holder is entitled to receive for the
	open-enrollment charter school funding under Chapter 42 equal to
	the greater of:
	(1)  the amount of funding per student in weighted
	average daily attendance, excluding enrichment funding under
	Sections 42.302(a-1)(2) and (3), as they existed on January 1,
	2009, that would have been received for the school during the
	2009-2010 school year under Chapter 42 as it existed on January 1,
	2009, and an additional amount of $120 for each student in weighted
	average daily attendance; or
	(2)  the amount of funding per student in [weighted]
	average daily attendance[, excluding enrichment funding under
	Section 42.302(a),] to which the charter holder would be entitled
	for the school under Chapter 42 if the school were a school district
	[without a tier one local share for purposes of Section 42.253 and
	without any local revenue for purposes of Section 42.2516].
	SECTION 4.35.  Sections 21.402(a) and (c), Education Code,
	are 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 in addition to other
	factors, as determined by commissioner rule, determined by the
	following formula:
	MS = SF x BA [FS]
	where:
	"MS" is the minimum monthly salary;
	"SF" is the applicable salary factor specified by Subsection
	(c); and
	"BA" ["FS"] is the amount of the basic allotment under
	Section 42.101[, 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 tax rate per $100 of taxable value equal to the
	product of the state compression percentage, as determined under
	Section 42.2516, multiplied by $1.50, 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, Acts of the 77th Legislature, Regular Session, 2001].
	(c)  The salary factors per step are as follows:
	0 1 2 3 4
	_____ [.6226] _____ [.6360] _____ [.6492] _____ [.6627] _____ [.6909]
	5 6 7 8 9
	_____ [.7192] _____ [.7474] _____ [.7737] _____ [.7985] _____ [.8220]
	10 11 12 13 14
	_____ [.8441] _____ [.8650] _____ [.8851] _____ [.9035] _____ [.9213]
	15 16 17 18 19
	_____ [.9380] _____ [.9539] _____ [.9687] _____ [.9828] _____ [.9963]
	_____ [1.009]
	SECTION 4.36.  Section 21.410(h), Education Code, is amended
	to read as follows:
	(h)  A grant a school district receives under this section is
	in addition to any funding the district receives under Chapter 42.
	The commissioner shall distribute funds under this section with the
	Foundation School Program payment to which the district is entitled
	as soon as practicable after the end of the school year as
	determined by the commissioner. [A district to which Chapter 41
	applies is entitled to the grants paid under this section.   The
	commissioner shall determine the timing of the distribution of
	grants to a district that does not receive Foundation School
	Program payments.]
	SECTION 4.37.  Section 21.411(h), Education Code, is amended
	to read as follows:
	(h)  A grant a school district receives under this section is
	in addition to any funding the district receives under Chapter 42.
	The commissioner shall distribute funds under this section with the
	Foundation School Program payment to which the district is entitled
	as soon as practicable after the end of the school year as
	determined by the commissioner. [A district to which Chapter 41
	applies is entitled to the grants paid under this section.   The
	commissioner shall determine the timing of the distribution of
	grants to a district that does not receive Foundation School
	Program payments.]
	SECTION 4.38.  Section 21.412(h), Education Code, is amended
	to read as follows:
	(h)  A grant a school district receives under this section is
	in addition to any funding the district receives under Chapter 42.
	The commissioner shall distribute funds under this section with the
	Foundation School Program payment to which the district is entitled
	as soon as practicable after the end of the school year as
	determined by the commissioner. [A district to which Chapter 41
	applies is entitled to the grants paid under this section.   The
	commissioner shall determine the timing of the distribution of
	grants to a district that does not receive Foundation School
	Program payments.]
	SECTION 4.39.  Section 21.413(h), Education Code, is amended
	to read as follows:
	(h)  A grant a school district receives under this section is
	in addition to any funding the district receives under Chapter 42.
	The commissioner shall distribute funds under this section with the
	Foundation School Program payment to which the district is entitled
	as soon as practicable after the end of the school year as
	determined by the commissioner. [A district to which Chapter 41
	applies is entitled to the grants paid under this section.   The
	commissioner shall determine the timing of the distribution of
	grants to a district that does not receive Foundation School
	Program payments.]
	SECTION 4.40.  Section 29.008(b), Education Code, is amended
	to read as follows:
	(b)  Except as provided by Subsection (c), costs of an
	approved contract for residential placement may be paid from a
	combination of federal and[,] state[, and local] funds. [The local
	share of the total contract cost for each student is that portion of
	the local tax effort that exceeds the district's local fund
	assignment under Section 42.252, divided by the average daily
	attendance in the district. If the contract involves a private
	facility, the state share of the total contract cost is that amount
	remaining after subtracting the local share. If the contract
	involves a public facility, the state share is that amount
	remaining after subtracting the local share from the portion of the
	contract that involves the costs of instructional and related
	services. For purposes of this subsection, "local tax effort"
	means the total amount of money generated by taxes imposed for debt
	service and maintenance and operation less any amounts paid into a
	tax increment fund under Chapter 311, Tax Code.]
	SECTION 4.41.  Section 29.203(b), Education Code, is amended
	to read as follows:
	(b)  A school district is entitled to the allotment provided
	by Section 42.157 for each eligible student using a public
	education grant. [If the district has a wealth per student greater
	than the guaranteed wealth level but less than the equalized wealth
	level, a school district is entitled under rules adopted by the
	commissioner to additional state aid in an amount equal to the
	difference between the cost to the district of providing services
	to a student using a public education grant and the sum of the state
	aid received because of the allotment under Section 42.157 and
	money from the available school fund attributable to the student.]
	SECTION 4.42.  Section 30.003(b), Education Code, is amended
	to read as follows:
	(b)  If the student is admitted to the school for a full-time
	program for the equivalent of two long semesters, the district's
	share of the cost is an amount equal to the dollar amount of state
	funds provided to the district under Chapters 42 and 43
	[maintenance and debt service taxes imposed by the district] for
	that year divided by the district's average daily attendance for
	the preceding year.
	SECTION 4.43.  Section 30.087(b), Education Code, is amended
	to read as follows:
	(b)  From the amount appropriated for regional day school
	programs, the commissioner shall allocate funds to each program
	based on the number of [weighted] full-time equivalent students
	served. The commissioner may consider local resources available in
	allocating funds under this subsection.
	SECTION 4.44.  Section 37.0061, Education Code, is amended
	to read as follows:
	Sec. 37.0061.  FUNDING FOR ALTERNATIVE EDUCATION SERVICES IN
	JUVENILE RESIDENTIAL FACILITIES. A school district that provides
	education services to pre-adjudicated and post-adjudicated
	students who are confined by court order in a juvenile residential
	facility operated by a juvenile board is entitled to count such
	students in the district's average daily attendance for purposes of
	receipt of state funds under the Foundation School Program. [If the
	district has a wealth per student greater than the guaranteed
	wealth level but less than the equalized wealth level, the district
	in which the student is enrolled on the date a court orders the
	student to be confined to a juvenile residential facility shall
	transfer to the district providing education services an amount
	equal to the difference between the average Foundation School
	Program costs per student of the district providing education
	services and the sum of the state aid and the money from the
	available school fund received by the district that is attributable
	to the student for the portion of the school year for which the
	district provides education services to the student.]
	SECTION 4.45.  Section 56.208(b), Education Code, is amended
	to read as follows:
	(b)  The commissioner of education shall reduce the total
	annual amount of foundation school fund payments made to a school
	district by an amount equal to [F x A, where:
	[(1)     "F" is the lesser of one or the quotient of the
	district's local share for the preceding school year under Section
	42.252 divided by the amount of money to which the district was
	entitled under Subchapters B and C, Chapter 42, for the preceding
	school year; and
	[(2)  "A" is] the amount of state tuition credits under
	this subchapter applied by institutions of higher education on
	behalf of eligible persons who graduated from the district that has
	not been used to compute a previous reduction under this
	subsection.
	SECTION 4.46.  Section 78.10(g), Education Code, is amended
	to read as follows:
	(g)  For each student enrolled in the academy, the academy is
	entitled to allotments from the foundation school fund under
	Chapter 42 as if the academy were a school district [without a tier
	one local share for purposes of Section 42.253]. If in any academic
	year the amount of the allotments under this subsection exceeds the
	amount of state funds paid to the academy in the first fiscal year
	of the academy's operation, the commissioner of education shall set
	aside from the total amount of funds to which school districts are
	entitled under Section 42.253(c) an amount equal to the excess
	amount and shall distribute that amount to the academy. After
	deducting the amount set aside and paid to the academy by the
	commissioner of education under this subsection, the commissioner
	of education shall reduce the amount to which each district is
	entitled under Section 42.253(c) in the manner described by Section
	42.253(h). A determination of the commissioner of education under
	this subsection is final and may not be appealed.
	SECTION 4.47.  Section 87.208, Education Code, is amended to
	read as follows:
	Sec. 87.208.  SEABORNE CONSERVATION CORPS. If the board of
	regents of The Texas A&M University System administers a program
	that is substantially similar to the Seaborne Conservation Corps as
	it was administered by the board during the 1998-1999 school year,
	the program is entitled, for each student enrolled, to allotments
	from the Foundation School Program under Chapter 42 as if the
	program were a school district[, except that the program has a local
	share applied that is equivalent to the local fund assignment of the
	school district in which the principal facilities of the program
	are located].
	SECTION 4.48.  Section 87.505(g), Education Code, is amended
	to read as follows:
	(g)  For each student enrolled in the academy, the academy is
	entitled to allotments from the foundation school fund under
	Chapter 42 as if the academy were a school district [without a tier
	one local share for purposes of Section 42.253]. If in any academic
	year the amount of the allotments under this subsection exceeds the
	amount of state funds paid to the academy in the first fiscal year
	of the academy's operation, the commissioner of education shall set
	aside from the total amount of funds to which school districts are
	entitled under Section 42.253(c) an amount equal to the excess
	amount and shall distribute that amount to the academy. After
	deducting the amount set aside and paid to the academy by the
	commissioner of education under this subsection, the commissioner
	of education shall reduce the amount to which each district is
	entitled under Section 42.253(c) in the manner described by Section
	42.253(h). A determination of the commissioner of education under
	this subsection is final and may not be appealed.
	SECTION 4.49.  Section 96.707(k), Education Code, is amended
	to read as follows:
	(k)  For each student enrolled in the academy, the academy is
	entitled to allotments from the Foundation School Program under
	Chapter 42 as if the academy were a school district[, except that
	the academy has a local share applied that is equivalent to the
	local fund assignment of the Beaumont Independent School District].
	SECTION 4.50.  Section 105.301(e), Education Code, is
	amended to read as follows:
	(e)  The academy is not subject to the provisions of this
	code, or to the rules of the Texas Education Agency, regulating
	public schools, except that:
	(1)  professional employees of the academy are entitled
	to the limited liability of an employee under Section 22.0511,
	22.0512, or 22.052;
	(2)  a student's attendance at the academy satisfies
	compulsory school attendance requirements; and
	(3)  for each student enrolled, the academy is entitled
	to allotments from the foundation school program under Chapter 42
	as if the academy were a school district [without a tier one local
	share for purposes of Section 42.253].
	SECTION 4.51.  Section 3.005(a), Election Code, is amended
	to read as follows:
	(a)  Except as provided by Subsection [Subsections] (c) [and
	(d)], an election ordered by an authority of a political
	subdivision shall be ordered not later than the 62nd day before
	election day.
	SECTION 4.52.  Section 4.008(a), Election Code, is amended
	to read as follows:
	(a)  The [Except as provided by Subsection (b), the]
	governing body of a political subdivision, other than a county,
	that orders an election shall deliver notice of the election to the
	county clerk and voter registrar of each county in which the
	political subdivision is located not later than the 60th day before
	election day.
	SECTION 4.53.  Section 1579.251(a), Insurance Code, is
	amended to read as follows:
	(a)  The state shall assist employees of participating
	school districts and charter schools in the purchase of group
	health coverage under this chapter by providing for each covered
	employee the amount of $900 each state fiscal year or a greater
	amount as provided by the General Appropriations Act.  The state
	contribution shall be distributed through the school finance
	formulas under Chapter [Chapters 41 and] 42, Education Code[, and
	used by school districts and charter schools as provided by
	Section     42.260, Education Code].
	SECTION 4.54.  (a) The following provisions of the
	Education Code are repealed:
	(1)  Chapter 41;
	(2)  Subchapter F, Chapter 42;
	(3)  Subchapter H, Chapter 45;
	(4)  Chapter 46; and
	(5)  Sections 7.055(b)(34), 7.062(a) and (c), 11.152,
	12.106(a-2), 13.054(f) and (g), 21.402(b), 29.203(c) and (g),
	42.001(b), 42.002(b), 42.008(b) and (c), 42.158(e), 42.160(b),
	42.2515, 42.2516, 42.25161, 42.252, 42.2521, 42.2522, 42.2523,
	42.2524(f) and (g), 42.253(c-1), 42.2531, 42.257, 42.259(a), (c),
	and (d), 42.260, 42.261, 44.004(c-1), (d), (e), (g), (h), (i), and
	(j), 45.0011, 45.002, 45.003, 45.0031, 45.006, 45.061(c) and (d),
	45.103(d), (e), and (h), 45.104, 45.105(d), (e), and (f),
	45.109(d), 45.111, 45.112, and 45.261(c), (d), and (e).
	(b)  Sections 3.005(d) and 4.008(b), Election Code, are
	repealed.
	(c)  The following provisions of the Government Code are
	repealed:
	(1)  Subchapter M, Chapter 403;
	(2)  Section 466.355(c); and
	(3)  Sections 825.405(h) and (i).
	(d)  Section 1581.053(b), Insurance Code, is repealed.
	SECTION 4.55.  This article applies beginning with the
	2012-2013 school year.
	ARTICLE 5.  EFFECTIVE DATE; CONTINGENCY
	SECTION 5.01.  This Act takes effect January 1, 2012, but
	only if the constitutional amendment proposed by the 82nd
	Legislature, Regular Session, 2011, abolishing property taxes and
	limiting the rates of state and local sales and use taxes, is
	approved by the voters. If that amendment is not approved by the
	voters, this Act has no effect.