82R10218 SMH/KKA-D
	By: Duncan	S.B. No. 1858

	A BILL TO BE ENTITLED
	AN ACT
	relating to public school finance matters, including the imposition
	of a state ad valorem tax for elementary and secondary school
	purposes.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	ARTICLE 1.  STATE AD VALOREM TAX
	SECTION 1.01.  Chapter 45, Education Code, is amended by
	adding Subchapter K to read as follows:
	SUBCHAPTER K. STATE AD VALOREM TAX
	Sec. 45.351.  STATE AD VALOREM TAX.  (a)  As provided by
	Section 3-a, Article VII, Texas Constitution, a state ad valorem
	tax for elementary and secondary school purposes is imposed on all
	taxable property in this state.
	(b)  The tax is imposed at the rate of $1 per $100 of taxable
	value of property subject to the tax.
	(b-1)  This subsection applies only to the taxation by the
	state of property that has taxable situs in a school district that
	imposed a maintenance and operations ad valorem tax for the 2011 tax
	year at a rate less than $1 per $100 of taxable value of property
	subject to the tax. Notwithstanding Subsection (b), for the 2012
	tax year the state ad valorem tax is imposed at the rate equal to the
	sum of the maintenance and operations ad valorem tax rate of the
	district for the 2011 tax year and 20 percent of the difference
	between the rate of $1 per $100 of taxable value and the maintenance
	and operations ad valorem tax rate of the district for the 2011 tax
	year. For each of the subsequent three tax years, the state ad
	valorem tax is imposed at the rate equal to the sum of the rate for
	the preceding tax year and 20 percent of the difference between the
	rate of $1 per $100 of taxable value and the maintenance and
	operations ad valorem tax rate of the district for the 2011 tax
	year. This subsection expires January 1, 2016.
	(c)  Except as otherwise provided by law, the state shall be
	treated, for purposes of the state ad valorem tax, as a taxing unit
	under Title 1, Tax Code.
	Sec. 45.352.  APPRAISAL OF PROPERTY. (a) Property subject
	to the state ad valorem tax shall be appraised by the appraisal
	district that appraises property for taxation by the school
	district in which the property has taxable situs under Chapter 21,
	Tax Code.
	(b)  Except as otherwise provided by that title, property
	subject to the state ad valorem tax shall be appraised in the manner
	provided by Title 1, Tax Code, for the appraisal of property that is
	subject to ad valorem taxation by a school district.
	Sec. 45.353.  TAX COLLECTION. (a) The assessor and
	collector for each school district shall assess and collect, as
	applicable, state ad valorem taxes imposed on property included on
	the appraisal roll for state taxation certified to the comptroller
	and to the assessor for that school district under Section 26.01,
	Tax Code, unless the governing body of the school district
	contracts with an official, taxing unit, or political subdivision
	of this state for the assessment or collection of the ad valorem
	taxes of the district, in which event the official, taxing unit, or
	political subdivision that assesses or collects taxes for the
	school district shall also assess or collect, as applicable, the
	state ad valorem taxes.
	(b)  Each assessor or collector of state ad valorem taxes is
	entitled to be reimbursed by the comptroller for the actual costs
	incurred by the assessor or collector in assessing or collecting
	state ad valorem taxes. However, an assessor or collector is not
	entitled to be reimbursed for any amount that is greater than the
	additional incremental costs incurred in assessing or collecting
	the state ad valorem taxes.
	(c)  The comptroller shall:
	(1)  prescribe methods of accounting for and remitting
	state ad valorem taxes;
	(2)  prescribe methods for establishing an assessor's
	or collector's additional incremental costs incurred in assessing
	or collecting state ad valorem taxes;
	(3)  prescribe and furnish forms for periodic reports
	relating to state ad valorem taxes; and
	(4)  periodically examine the records of each assessor
	or collector of state ad valorem taxes to verify the accuracy of any
	reports required under this subsection.
	(d)  The comptroller may require an assessor or collector of
	state ad valorem taxes to give a bond to the state, conditioned on
	the faithful performance of the person's duties as assessor or
	collector, in the amount the comptroller considers appropriate to
	protect the state from potential losses with regard to assessment
	or collection of state ad valorem taxes.
	Sec. 45.354.  DUTIES AND POWERS OF COMPTROLLER. (a) Except
	as otherwise provided by this subchapter, a duty imposed on or power
	granted to the governing body of a taxing unit by Title 1, Tax Code,
	may, for purposes of the state ad valorem tax, be exercised by the
	comptroller. A reference to the presiding officer of a governing
	body in Title 1, Tax Code, is a reference to the comptroller for the
	purposes of the state tax.
	(b)  The comptroller may delegate to the assessor or
	collector for a school district any function of the comptroller
	with respect to the assessment or collection of the state ad valorem
	tax and may designate a school district assessor or collector as the
	comptroller's agent for purposes of administration of assessment or
	collection of the state ad valorem tax.
	Sec. 45.355.  ADMINISTRATION AND REFUND ACCOUNTS. The
	comptroller shall deposit to the credit of the general revenue fund
	in appropriately designated accounts an amount of revenue collected
	from the state ad valorem tax to pay for the expenses of
	administering this subchapter and for the payment of tax refunds
	that may become payable.
	Sec. 45.356.  NONAPPLICABILITY OF CERTAIN OTHER TAX LAWS.
	Title 2, Tax Code, does not apply to the state ad valorem tax.
	Sec. 45.357.  TAX INCREMENT FINANCING. Except as otherwise
	provided by Section 311.0131, Tax Code, the state may not pay any
	portion of the tax increment produced by the state into the tax
	increment fund for a reinvestment zone designated under Chapter
	311, Tax Code.
	Sec. 45.358.  TAX ABATEMENT. (a)  Except as otherwise
	provided by this section, the state may not participate in tax
	abatement under Section 311.0125 or 311.013(g) or Chapter 312, Tax
	Code.
	(b)  If school district property taxes on property located in
	the taxing jurisdiction of a school district are abated under a tax
	abatement agreement entered into by the school district under
	Chapter 312, Tax Code, the terms of the agreement regarding the
	portion of the value of the property that is to be exempted from
	taxation in each year of the agreement apply to the taxation of the
	property by the state. A modification of the agreement by the
	parties to the agreement under Section 312.208, Tax Code, that
	increases the portion of the value of the property that is to be
	exempted from taxation or that extends the duration of the
	agreement does not apply to the imposition of the state ad valorem
	tax unless the modification was entered into before January 1,
	2011.
	SECTION 1.02.  Subchapter A, Chapter 6, Tax Code, is amended
	by adding Section 6.038 to read as follows:
	Sec. 6.038.  STATE PARTICIPATION. (a) The comptroller and
	the state do not participate in the election of the board of
	directors of an appraisal district, the governance or management of
	the district, or the determination of the district's finances and
	budget.
	(b)  The comptroller by rule shall establish guidelines and
	criteria under which, if the comptroller finds that generally
	accepted appraisal standards and practices were not used by the
	appraisal district appraising property subject to the state ad
	valorem tax or that the appraised values assigned to property
	subject to that tax are invalid, the comptroller may:
	(1)  withhold payment of all or part of the portion of
	the amount of the budget of the appraisal district that is allocated
	to the state until the district takes appropriate actions to remedy
	the deficiencies in appraisals found by the comptroller; or
	(2)  direct that all or any part of the portion of the
	amount of the budget of the district allocated to the state be
	applied to remedying those deficiencies.
	SECTION 1.03.  Section 6.06(d), Tax Code, is amended to read
	as follows:
	(d)  The state and each [Each] taxing unit participating in
	the district are each [is] allocated a portion of the amount of the
	budget equal to the proportion that the total dollar amount of
	property taxes imposed in the district by the state or taxing unit
	for the tax year in which the budget proposal is prepared bears to
	the sum of the total dollar amount of property taxes imposed in the
	district by the state and each participating unit for that year.
	For purposes of this subsection, only state ad valorem taxes
	imposed in a school district or portion of a school district for
	which the appraisal district appraises property for taxation are
	considered as state ad valorem taxes imposed in the district. If a
	taxing unit participates in two or more districts, only the taxes
	imposed in a district are used to calculate the unit's cost
	allocations in that district. If the number of real property
	parcels in a taxing unit is less than 5 percent of the total number
	of real property parcels in the district and the taxing unit imposes
	in excess of 25 percent of the total amount of the property taxes
	imposed in the district by all of the participating taxing units for
	a year, the unit's allocation may not exceed a percentage of the
	appraisal district's budget equal to three times the unit's
	percentage of the total number of real property parcels appraised
	by the district.
	SECTION 1.04.  Sections 11.13(b) and (c), Tax Code, are
	amended to read as follows:
	(b)  An adult is entitled to exemption from taxation by the
	state for elementary and secondary public school purposes or by a
	school district of $15,000 of the appraised value of the adult's
	residence homestead, except that $10,000 of the exemption does not
	apply to an entity operating under former Chapter 17, 18, 25, 26,
	27, or 28, Education Code, as those chapters existed on May 1, 1995,
	as permitted by Section 11.301, Education Code.
	(c)  In addition to the exemption provided by Subsection (b)
	[of this section], an adult who is disabled or is 65 years of age or
	older is entitled to an exemption from taxation by the state for
	elementary and secondary public school purposes or by a school
	district of $10,000 of the appraised value of the adult's [his]
	residence homestead.
	SECTION 1.05.  Section 11.14, Tax Code, is amended by adding
	Subsection (f) to read as follows:
	(f)  Subsection (c) does not apply to the comptroller or to
	the state ad valorem tax.
	SECTION 1.06.  The heading to Section 11.26, Tax Code, is
	amended to read as follows:
	Sec. 11.26.  LIMITATION OF SCHOOL TAXES [TAX] ON HOMESTEADS
	OF ELDERLY OR DISABLED.
	SECTION 1.07.  Section 11.26, Tax Code, is amended by
	amending Subsections (a), (a-1), (b), (g), (h), (j), (k), and (o)
	and adding Subsection (g-1) to read as follows:
	(a)  The tax officials shall appraise the property to which
	this section applies and calculate taxes as on other property, but
	if the tax so calculated exceeds the limitation imposed by this
	section, the tax imposed is the amount of the tax as limited by this
	section, except as otherwise provided by this section. The state or
	a [A] school district may not increase the total annual amount of ad
	valorem tax it imposes on the residence homestead of an individual
	65 years of age or older or on the residence homestead of an
	individual who is disabled, as defined by Section 11.13, above the
	amount of the tax it imposed in the first tax year in which the
	individual qualified that residence homestead for the applicable
	exemption provided by Section 11.13(c) for an individual who is 65
	years of age or older or is disabled. If the individual qualified
	that residence homestead for the exemption after the beginning of
	that first year and the residence homestead remains eligible for
	the same exemption for the next year, and if the state or school
	district taxes imposed on the residence homestead in the next year
	are less than the amount of taxes the state or school district, as
	applicable, imposed in that first year, the state or [a] school
	district may not subsequently increase the total annual amount of
	ad valorem taxes it imposes on the residence homestead above the
	amount it imposed in the year immediately following the first year
	for which the individual qualified that residence homestead for the
	same exemption, except as provided by Subsection (b). [If the first
	tax year the individual qualified the residence homestead for the
	exemption provided by Section 11.13(c) for individuals 65 years of
	age or older was a tax year before the 1997 tax year, the amount of
	the limitation provided by this section is the amount of tax the
	school district imposed for the 1996 tax year less an amount equal
	to the amount determined by multiplying $10,000 times the tax rate
	of the school district for the 1997 tax year, plus any 1997 tax
	attributable to improvements made in 1996, other than improvements
	made to comply with governmental regulations or repairs.]
	(a-1)  If the first tax year the individual qualified the
	residence homestead for the exemption provided by Section 11.13(c)
	for individuals who are disabled or are 65 years of age or older was
	a tax year before the 2012 tax year, except as provided by
	Subsection (b):
	(1)  the amount of the limitation provided by this
	section on state taxes is the amount of tax the school district in
	which the property is located imposed for the 2011 tax year plus any
	2012 state taxes attributable to improvements made in 2011, other
	than improvements made to comply with governmental regulations or
	repairs; and
	(2)  the amount of the limitation provided by this
	section on school district taxes is the amount of tax the school
	district imposed for the 2011 tax year less the amount of state
	taxes imposed in the 2012 tax year, plus any 2012 school taxes
	attributable to improvements made in 2011, other than improvements
	made to comply with governmental regulations or repairs.
	[Notwithstanding the other provisions of this section, if in the
	2007 tax year an individual qualifies for a limitation on tax
	increases provided by this section on the individual's residence
	homestead and the first tax year the individual or the individual's
	spouse qualified for an exemption under Section 11.13(c) for the
	same homestead was the 2006 tax year, the amount of the limitation
	provided by this section on the homestead in the 2007 tax year is
	equal to the amount computed by:
	[(1)     multiplying the amount of tax the school district
	imposed on the homestead in the 2006 tax year by a fraction the
	numerator of which is the tax rate of the district for the 2007 tax
	year and the denominator of which is the tax rate of the district
	for the 2006 tax year; and
	[(2)     adding any tax imposed in the 2007 tax year
	attributable to improvements made in the 2006 tax year as provided
	by Subsection (b) to the lesser of the amount computed under
	Subdivision (1) or the amount of tax the district imposed on the
	homestead in the 2006 tax year.]
	(b)  If an individual makes improvements to the individual's
	residence homestead, other than improvements required to comply
	with governmental requirements or repairs, the state or the school
	district may increase the tax on the homestead in the first year the
	value of the homestead is increased on the appraisal roll because of
	the enhancement of value by the improvements. The amount of the tax
	increase is determined by applying the current tax rate to the
	difference in the assessed value of the homestead with the
	improvements and the assessed value it would have had without the
	improvements. A limitation imposed by this section then applies to
	the increased amount of tax until more improvements, if any, are
	made.
	(g)  Except as provided by Subsection (b), if an individual
	who receives a limitation on tax increases imposed by this section,
	including a surviving spouse who receives a limitation under
	Subsection (i), subsequently qualifies a different residence
	homestead for the same exemption under Section 11.13, the state or a
	school district may not impose ad valorem taxes on the subsequently
	qualified homestead in a year in an amount that exceeds the amount
	of taxes the state or the school district would have imposed on the
	subsequently qualified homestead in the first year in which the
	individual receives that same exemption for the subsequently
	qualified homestead had the limitation on tax increases imposed by
	this section not been in effect, multiplied by a fraction the
	numerator of which is the total amount of [school district] taxes
	imposed by the state or the school district, as applicable, on the
	former homestead in the last year in which the individual received
	that same exemption for the former homestead and the denominator of
	which is the total amount of taxes the state or the school district,
	as applicable, [taxes that] would have [been] imposed on the former
	homestead in the last year in which the individual received that
	same exemption for the former homestead had the limitation on tax
	increases imposed by this section not been in effect.
	(g-1)  Subsection (g) does not apply to a residence homestead
	to which this subsection applies. Except as provided by Subsection
	(b), if an individual who receives a limitation on tax increases
	imposed by this section in a tax year before the 2012 tax year,
	including a surviving spouse who receives a limitation under
	Subsection (i), subsequently qualifies a different residence
	homestead for an exemption under Section 11.13(c) and the first
	year in which the subsequently qualified homestead qualifies for
	the exemption is a tax year after the 2011 tax year:
	(1)  the state may not impose taxes on the subsequently
	qualified homestead in an amount that exceeds the amount of taxes
	the state would have imposed on the subsequently qualified
	homestead in the first year in which the individual receives that
	exemption for the subsequently qualified homestead had the
	limitation on tax increases imposed by this section not been in
	effect, multiplied by a fraction the numerator of which is the total
	amount of school district taxes imposed on the former homestead in
	the last year in which the individual received that exemption for
	the former homestead and the denominator of which is the total
	amount of school district taxes that would have been imposed on the
	former homestead in the last year in which the individual received
	that exemption for the former homestead had the limitations on tax
	increases imposed by this section not been in effect; and
	(2)  the school district may not impose taxes on the
	subsequently qualified homestead in an amount that exceeds the
	positive amount, if any, by which the limitation on state taxes
	calculated under Subdivision (1) exceeds the amount of state taxes
	imposed in the first year in which the subsequently qualified
	homestead receives the exemption.
	(h)  An individual who receives a limitation on tax increases
	under this section, including a surviving spouse who receives a
	limitation under Subsection (i), and who subsequently qualifies a
	different residence homestead for an exemption under Section
	11.13(c) [11.13], or an agent of the individual, is entitled to
	receive from the chief appraiser of the appraisal district in which
	the former homestead was located a written certificate providing
	the information necessary to determine whether the individual may
	qualify for that same limitation on the subsequently qualified
	homestead under Subsection (g) or (g-1) and to calculate the amount
	of taxes the state and the school district may impose on the
	subsequently qualified homestead.
	(j)  If an individual who qualifies for an exemption provided
	by Section 11.13(c) for an individual 65 years of age or older dies
	in the first year in which the individual qualified for the
	exemption and the individual first qualified for the exemption
	after the beginning of that year, except as provided by Subsection
	(k), the amount to which the surviving spouse's state or school
	district taxes are limited under Subsection (i) is the amount of
	state or school district taxes, as applicable, imposed on the
	residence homestead in that year determined as if the individual
	qualifying for the exemption had lived for the entire year.
	(k)  If in the first tax year after the year in which an
	individual dies in the circumstances described by Subsection (j)
	the amount of [school district] taxes imposed by the state or the
	school district on the residence homestead of the surviving spouse
	is less than the amount of state or school district taxes, as
	applicable, imposed in the preceding year as limited by Subsection
	(j), in a subsequent tax year the surviving spouse's state or school
	district taxes on that residence homestead are limited to the
	amount of taxes imposed by the state or the school district, as
	applicable, in that first tax year after the year in which the
	individual dies.
	(o)  Notwithstanding Subsections (a)[, (a-3),] and (b), an
	improvement to property that would otherwise constitute an
	improvement under Subsection (b) is not treated as an improvement
	under that subsection if the improvement is a replacement structure
	for a structure that was rendered uninhabitable or unusable by a
	casualty or by wind or water damage. For purposes of appraising the
	property in the tax year in which the structure would have
	constituted an improvement under Subsection (b), the replacement
	structure is considered to be an improvement under that subsection
	only if:
	(1)  the square footage of the replacement structure
	exceeds that of the replaced structure as that structure existed
	before the casualty or damage occurred; or
	(2)  the exterior of the replacement structure is of
	higher quality construction and composition than that of the
	replaced structure.
	SECTION 1.08.  Section 21.03(a), Tax Code, is amended to
	read as follows:
	(a)  If personal property that is taxable by this state or a
	taxing unit of this state is used continually outside this state,
	whether regularly or irregularly, the appraisal office shall
	allocate to this state the portion of the total market value of the
	property that fairly reflects its use in this state.
	SECTION 1.09.  Section 21.031(a), Tax Code, is amended to
	read as follows:
	(a)  If a vessel or other watercraft that is taxable by this
	state or a taxing unit of this state is used continually outside
	this state, whether regularly or irregularly, the appraisal office
	shall allocate to this state the portion of the total market value
	of the vessel or watercraft that fairly reflects its use in this
	state. The appraisal office shall not allocate to this state the
	portion of the total market value of the vessel or watercraft that
	fairly reflects its use in another state or country, in
	international waters, or beyond the Gulfward boundary of this
	state.
	SECTION 1.10.  Sections 22.28(a) and (b), Tax Code, are
	amended to read as follows:
	(a)  Except as otherwise provided by Section 22.30, the chief
	appraiser shall impose a penalty on a person who fails to timely
	file a rendition statement or property report required by this
	chapter in an amount equal to 10 percent of the total amount of
	taxes imposed on the property for that year by the state, if the
	property has taxable situs in a school district or portion of a
	school district for which the appraisal district appraises property
	for taxation, and by the other taxing units participating in the
	appraisal district.
	(b)  The chief appraiser shall certify to the assessor for
	the state and each other taxing unit participating in the appraisal
	district that imposes taxes on the property that the chief
	appraiser has imposed a penalty under this section.  The assessor
	shall add the amount of the penalty to the original amount of tax
	imposed on the property and shall include that amount in the tax
	bill for that year.  The penalty becomes part of the tax on the
	property and is secured by the tax lien that attaches to the
	property under Section 32.01.
	SECTION 1.11.  Sections 22.29(a) and (d), Tax Code, are
	amended to read as follows:
	(a)  The chief appraiser shall impose an additional penalty
	on the person equal to 50 percent of the total amount of taxes
	imposed on the property for the tax year of the statement or report
	by the state, if the property has taxable situs in a school district
	or portion of a school district for which the appraisal district
	appraises property for taxation, and by the other taxing units
	participating in the appraisal district if it is finally determined
	by a court that:
	(1)  the person filed a false statement or report with
	the intent to commit fraud or to evade the tax; or
	(2)  the person alters, destroys, or conceals any
	record, document, or thing, or presents to the chief appraiser any
	altered or fraudulent record, document, or thing, or otherwise
	engages in fraudulent conduct, for the purpose of affecting the
	course or outcome of an inspection, investigation, determination,
	or other proceeding before the appraisal district.
	(d)  The chief appraiser may retain a portion of a penalty
	collected under this section, not to exceed 20 percent of the amount
	of the penalty, to cover the chief appraiser's costs of collecting
	the penalty. The chief appraiser shall distribute the remainder of
	the penalty to the state and each other taxing unit participating in
	the appraisal district that imposes taxes on the property in
	proportion to the state's or the taxing unit's share of the total
	amount of taxes imposed on the property by the state and all other
	taxing units participating in the district used to determine the
	amount of the penalty.
	SECTION 1.12.  Section 23.23(a), Tax Code, is amended to
	read as follows:
	(a)  Notwithstanding the requirements of Section 25.18 and
	regardless of whether the appraisal office has appraised the
	property and determined the market value of the property for the tax
	year, an appraisal office may increase the appraised value of a
	residence homestead for a tax year to an amount not to exceed the
	lesser of:
	(1)  the market value of the property for the most
	recent tax year that the market value was determined by the
	appraisal office; or
	(2)  the sum of:
	(A)  for purposes of taxation by the state, five
	percent of the appraised value of the property for the preceding tax
	year, and for purposes of taxation by any other taxing unit, 10
	percent of the appraised value of the property for the preceding tax
	year;
	(B)  the appraised value of the property for the
	preceding tax year for purposes of taxation by the applicable
	taxing unit; and
	(C)  the market value of all new improvements to
	the property.
	SECTION 1.13.  Section 23.46(d), Tax Code, is amended to
	read as follows:
	(d)  A tax lien attaches to the land on the date the sale or
	change of use occurs to secure payment of the additional tax and
	interest imposed by Subsection (c) [of this section] and any
	penalties incurred. The lien exists in favor of the state and all
	taxing units for which the additional tax is imposed.
	SECTION 1.14.  Section 23.55(b), Tax Code, is amended to
	read as follows:
	(b)  A tax lien attaches to the land on the date the change of
	use occurs to secure payment of the additional tax and interest
	imposed by this section and any penalties incurred. The lien exists
	in favor of the state and all taxing units for which the additional
	tax is imposed.
	SECTION 1.15.  Section 23.76(b), Tax Code, is amended to
	read as follows:
	(b)  A tax lien attaches to the land on the date the change of
	use occurs to secure payment of the additional tax and interest
	imposed by this section and any penalties incurred. The lien exists
	in favor of the state and all taxing units for which the additional
	tax is imposed.
	SECTION 1.16.  Section 23.86(b), Tax Code, is amended to
	read as follows:
	(b)  A tax lien attaches to the land on the date the change of
	use occurs or the deed restriction expires to secure payment of the
	additional tax and interest imposed by this section and any
	penalties incurred. The lien exists in favor of the state and all
	taxing units for which the additional tax is imposed.
	SECTION 1.17.  Section 23.96(b), Tax Code, is amended to
	read as follows:
	(b)  A tax lien attaches to the property on the date the deed
	restriction expires to secure payment of the additional tax and
	interest imposed by this section and any penalties incurred. The
	lien exists in favor of the state and all taxing units for which the
	additional tax is imposed.
	SECTION 1.18.  Section 23.9807(c), Tax Code, is amended to
	read as follows:
	(c)  A tax lien attaches to the land on the date the change of
	use occurs to secure payment of the additional tax and interest
	imposed by this section and any penalties incurred. The lien exists
	in favor of the state and all taxing units for which the additional
	tax is imposed.
	SECTION 1.19.  Section 25.19(b), Tax Code, is amended to
	read as follows:
	(b)  The chief appraiser shall separate real from personal
	property and include in the notice for each:
	(1)  a list of the taxing units other than the state in
	which the property is taxable and, if the property is appraised by
	the appraisal district for state taxation, a statement that the
	property is subject to the state tax for elementary and secondary
	public school purposes;
	(2)  the appraised value of the property in the
	preceding year;
	(3)  the taxable value of the property in the preceding
	year for:
	(A)  each taxing unit taxing the property; and
	(B)  state taxation for elementary and secondary
	public school purposes, if the property is appraised by the
	appraisal district for state taxation;
	(4)  the appraised value of the property for the
	current year and the kind and amount of each partial exemption, if
	any, approved for the current year;
	(5)  if the appraised value is greater than it was in
	the preceding year, the amount of tax that would be imposed on the
	property on the basis of the tax rate for each taxing unit other
	than the state for the preceding year;
	(6)  in italic typeface, the following
	statement:  "The Texas Legislature does not set the amount of your
	local taxes.  Your local property tax burden is decided by your
	locally elected officials, and all inquiries concerning your local
	taxes should be directed to those officials";
	(7)  a detailed explanation of the time and procedure
	for protesting the value;
	(8)  the date and place the appraisal review board will
	begin hearing protests; and
	(9)  a brief explanation that the governing body of
	each local taxing unit decides whether [or not] taxes on the
	property will increase and the appraisal district only determines
	the value of the property.
	SECTION 1.20.  The heading to Section 26.01, Tax Code, is
	amended to read as follows:
	Sec. 26.01.  SUBMISSION OF ROLLS TO STATE AND TAXING UNITS.
	SECTION 1.21.  Sections 26.01(a), (c), and (d), Tax Code,
	are amended to read as follows:
	(a)  By July 25, the chief appraiser shall prepare and
	certify to the assessor for each taxing unit participating in the
	appraisal district that part of the appraisal roll for the
	appraisal district that lists the property taxable by the unit. By
	that date the chief appraiser shall prepare and certify to the
	comptroller and to the assessor for each school district that
	participates in the appraisal district that part of the appraisal
	roll for the appraisal district that lists property for which the
	appraisal district appraises the property for state taxation.  The
	part certified to the comptroller and school district assessor is
	the appraisal roll for state taxes. The part certified to the
	assessor is the appraisal roll for the taxing unit. The chief
	appraiser shall consult with the assessor for each taxing unit and
	the comptroller and notify each taxing unit and the comptroller in
	writing by April 1 of the form in which the roll will be provided to
	each unit and to the comptroller.
	(c)  The chief appraiser shall prepare and certify to the
	assessor for each taxing unit and the comptroller a listing of those
	properties that [which] are taxable by that unit or the state, as
	applicable, but that [which] are under protest and therefore not
	included on the appraisal roll approved by the appraisal review
	board and certified by the chief appraiser. This listing shall
	include the appraised market value, productivity value (if
	applicable), and taxable value as determined by the appraisal
	district and shall also include the market value, taxable value,
	and productivity value (if applicable) as claimed by the property
	owner filing the protest if available. If the property owner does
	not claim a value and the appraised value of the property in the
	current year is equal to or less than its value in the preceding
	year, the listing shall include a reasonable estimate of the market
	value, taxable value, and productivity value (if applicable) that
	would be assigned to the property if the taxpayer's claim is upheld.
	If the property owner does not claim a value and the appraised value
	of the property is higher than its appraised value in the preceding
	year, the listing shall include the appraised market value,
	productivity value (if applicable) and taxable value of the
	property in the preceding year, except that if there is a reasonable
	likelihood that the appraisal review board will approve a lower
	appraised value for the property than its appraised value in the
	preceding year, the chief appraiser shall make a reasonable
	estimate of the taxable value that would be assigned to the property
	if the property owner's claim is upheld. The taxing unit shall use
	the lower value for calculations as prescribed in Sections 26.04
	and 26.041 [of this code].
	(d)  The chief appraiser shall prepare and certify to the
	assessor for each taxing unit and the comptroller a list of those
	properties of which the chief appraiser has knowledge that are
	reasonably likely to be taxable by that unit or the state, as
	applicable, but that are not included on the appraisal roll
	certified to the assessor or the comptroller under Subsection (a)
	or included on the listing certified to the assessor or the
	comptroller under Subsection (c). The chief appraiser shall
	include on the list for each property the market value, appraised
	value, and kind and amount of any partial exemptions as determined
	by the appraisal district for the preceding year and a reasonable
	estimate of the market value, appraised value, and kind and amount
	of any partial exemptions for the current year.  Until the property
	is added to the appraisal roll, the assessor for a [the] taxing unit
	shall include each property on the list in the calculations
	prescribed by Sections 26.04 and 26.041, and for that purpose shall
	use the lower market value, appraised value, or taxable value, as
	appropriate, included on or computed using the information included
	on the list for the property.
	SECTION 1.22.  Chapter 26, Tax Code, is amended by adding
	Section 26.011 to read as follows:
	Sec. 26.011.  PROVISIONS NOT APPLICABLE TO STATE TAX.
	Sections 26.04, 26.041, 26.05, 26.051, 26.06, 26.07, and 26.08 do
	not apply to the state ad valorem tax or to the comptroller.
	SECTION 1.23.  Section 26.09(c), Tax Code, is amended to
	read as follows:
	(c)  The tax is calculated by:
	(1)  subtracting from the appraised value of a property
	as shown on the appraisal roll for a taxing [the] unit or the state
	the amount of any partial exemption allowed the property owner that
	applies to appraised value to determine taxable [net appraised]
	value; and
	(2)  [multiplying the net appraised value by the
	assessment ratio to determine assessed value;
	[(3)     subtracting from the assessed value the amount of
	any partial exemption allowed the property owner to determine
	taxable value; and
	[(4)]  multiplying the taxable value by the applicable
	tax rate.
	SECTION 1.24.  Section 26.12, Tax Code, is amended by adding
	Subsection (e) to read as follows:
	(e)  For purposes of this section, the state is not a taxing
	unit.
	SECTION 1.25.  Section 26.15(c), Tax Code, is amended to
	read as follows:
	(c)  At any time, the governing body of a taxing unit, on
	motion of the assessor for the unit or of a property owner, shall
	direct by written order changes in the tax roll to correct errors in
	the mathematical computation of a tax. The assessor shall enter the
	corrections ordered by the governing body. The comptroller may
	order changes in the state tax roll to correct errors in the
	mathematical computation of the state ad valorem tax.
	SECTION 1.26.  Section 31.11(a), Tax Code, is amended to
	read as follows:
	(a)  If a taxpayer applies to the tax collector of a taxing
	unit for a refund of an overpayment or erroneous payment of taxes,
	the collector for the unit determines that the payment was
	erroneous or excessive, and the auditor for the unit or the
	comptroller in the case of the state ad valorem tax agrees with the
	collector's determination, the collector or, for state taxes, the
	comptroller shall refund the amount of the excessive or erroneous
	payment from available current tax collections or from funds
	appropriated by the unit or the state, as appropriate, for making
	refunds.  For taxes other than state taxes [However], the collector
	may not make the refund unless:
	(1)  in the case of a collector who collects taxes for
	one taxing unit, the governing body of the taxing unit also
	determines that the payment was erroneous or excessive and approves
	the refund if the amount of the refund exceeds:
	(A)  $5,000 for a refund to be paid by a county
	with a population of two million or more; or
	(B)  $500 for a refund to be paid by any other
	taxing unit; or
	(2)  in the case of a collector who collects taxes for
	more than one taxing unit, the governing body of the taxing unit
	that employs the collector also determines that the payment was
	erroneous or excessive and approves the refund if the amount of the
	refund exceeds:
	(A)  $5,000 for a refund to be paid by a county
	with a population of two million or more; or
	(B)  $2,500 for a refund to be paid by any other
	taxing unit.
	SECTION 1.27.  Sections 32.01(a) and (d), Tax Code, are
	amended to read as follows:
	(a)  On January 1 of each year, a tax lien attaches to
	property to secure the payment of all taxes, penalties, and
	interest ultimately imposed for the year by the state or a taxing
	unit on the property, whether or not the taxes are imposed in the
	year the lien attaches. The lien to secure the payment of state ad
	valorem taxes and applicable penalties and interest exists in favor
	of the state. The lien to secure the payment of taxes imposed by a
	taxing unit and applicable penalties and interest exists in favor
	of the [each] taxing unit having power to tax the property.
	(d)  The lien under this section is perfected on attachment
	and, except as provided by Section 32.03(b), perfection requires no
	further action by the state or taxing unit.
	SECTION 1.28.  Section 33.01(a), Tax Code, is amended to
	read as follows:
	(a)  A delinquent tax, including a delinquent state ad
	valorem tax, incurs a penalty of six percent of the amount of the
	tax for the first calendar month it is delinquent plus one percent
	for each additional month or portion of a month the tax remains
	unpaid prior to July 1 of the year in which it becomes delinquent.
	However, a tax delinquent on July 1 incurs a total penalty of twelve
	percent of the amount of the delinquent tax without regard to the
	number of months the tax has been delinquent. A delinquent tax
	continues to incur the penalty provided by this subsection as long
	as the tax remains unpaid, regardless of whether a judgment for the
	delinquent tax has been rendered.
	SECTION 1.29.  Subchapter A, Chapter 33, Tax Code, is
	amended by adding Section 33.12 to read as follows:
	Sec. 33.12.  COLLECTION OF DELINQUENT STATE AD VALOREM
	TAXES; PENALTY. (a) The collector for a school district has the
	same powers and duties regarding the collection of delinquent state
	ad valorem taxes imposed on property having taxable situs in the
	school district as the collector has regarding delinquent school
	district taxes on that property.
	(b)  The attorney who represents a school district to enforce
	the collection of delinquent school district taxes represents the
	state to enforce the collection of delinquent state ad valorem
	taxes imposed on property having taxable situs in the school
	district.  If the governing body of a school district contracts with
	a private attorney to enforce the collection of delinquent school
	district ad valorem taxes, the contract applies to the collection
	of delinquent state ad valorem taxes on property taxable by that
	school district without further action. The compensation of the
	private attorney for collecting delinquent state ad valorem taxes
	is equal to a percentage of the amount collected that represents the
	portion of that amount attributable to the additional penalty
	provided by Subsection (c). If the governing body of a school
	district enters into a contract with an official, taxing unit, or
	political subdivision of this state for the collection of the ad
	valorem taxes of the school district that includes the collection
	of delinquent school district taxes, the contract applies to the
	collection of delinquent state ad valorem taxes on property taxable
	by that school district without further action.
	(c)  State ad valorem taxes that remain delinquent on July 1
	of the year in which they become delinquent incur an additional
	penalty to defray costs of collection if the collection of the
	delinquent taxes is covered by a contract with a private attorney
	under Subsection (b). The amount of the penalty is the amount of
	the compensation specified in the contract.
	(d)  A tax lien attaches in favor of the state to the property
	on which the tax is imposed to secure payment of the penalty.
	(e)  The person responsible for collecting the delinquent
	state ad valorem tax shall deliver a notice of delinquency and of
	the penalty to the property owner at least 30 and not more than 60
	days before July 1.
	(f)  Sections 6.30, 33.07, and 33.08 do not apply to the
	state ad valorem tax.
	SECTION 1.30.  Sections 33.21(a) and (b), Tax Code, are
	amended to read as follows:
	(a)  A person's personal property is subject to seizure for
	the payment of a delinquent tax, penalty, and interest the person
	[he] owes the state or a taxing unit on property.
	(b)  A person's personal property is subject to seizure for
	the payment of a tax imposed by the state or other [a] taxing unit on
	the person's property before the tax becomes delinquent if:
	(1)  the collector discovers that property on which the
	tax has been or will be imposed is about to be:
	(A)  removed from the county; or
	(B)  sold in a liquidation sale in connection with
	the cessation of a business; and
	(2)  the collector knows of no other personal property
	in the county from which the tax may be satisfied.
	SECTION 1.31.  Section 33.23(b), Tax Code, is amended to
	read as follows:
	(b)  A bond may not be required of the state or other [a]
	taxing unit for issuance or delivery of a tax warrant, and a fee or
	court cost may not be charged for issuance or delivery of a warrant.
	SECTION 1.32.  Section 33.44(b), Tax Code, is amended to
	read as follows:
	(b)  For purposes of joining a county, citation may be served
	on the county [tax] assessor-collector. For purposes of joining
	any other taxing unit, citation may be served on the officer charged
	with collecting taxes for the unit or on the presiding officer or
	secretary of the governing body of the unit. For purposes of
	joining the state, citation shall be served on the school district
	collector who collects state ad valorem taxes on the property.
	Citation may be served by certified mail, return receipt requested.
	A person on whom service is authorized by this subsection may waive
	the issuance and service of citation in behalf of the person's [his]
	taxing unit.
	SECTION 1.33.  Section 34.04(b), Tax Code, is amended to
	read as follows:
	(b)  A copy of the petition shall be served, in the manner
	prescribed by Rule 21a, Texas Rules of Civil Procedure, [as
	amended,] or that rule's successor, on all parties to the
	underlying action not later than the 20th day before the date set
	for a hearing on the petition. If the state is a party to the
	underlying action, the copy of the petition to be served on the
	state shall be served on the school district collector who collects
	state ad valorem taxes on the subject property.  The attorney who
	represents the state to enforce the collection of delinquent state
	ad valorem taxes in the school district in which the property is
	located shall represent the state at the hearing.
	SECTION 1.34.  The heading to Chapter 41, Tax Code, is
	amended to read as follows:
	CHAPTER 41. ADMINISTRATIVE [LOCAL] REVIEW
	SECTION 1.35.  Section 41.03, Tax Code, is amended to read as
	follows:
	Sec. 41.03.  CHALLENGE BY STATE OR TAXING UNIT. (a) The
	state or another [A] taxing unit is entitled to challenge before the
	appraisal review board:
	(1)  the level of appraisals of any category of
	property in the district or in any territory in the district, but
	not the appraised value of a single taxpayer's property;
	(2)  an exclusion of property from the appraisal
	records;
	(3)  a grant in whole or in part of a partial exemption;
	(4)  a determination that land qualifies for appraisal
	as provided by Subchapter C, D, E, or H, Chapter 23; or
	(5)  failure to identify the taxing unit as one in which
	a particular property is taxable.
	(b)  If the state or other [a] taxing unit challenges a
	determination that land qualifies for appraisal under Subchapter H,
	Chapter 23, on the ground that the land is not located in an
	aesthetic management zone, critical wildlife habitat zone, or
	streamside management zone, the state or other taxing unit must
	first seek a determination letter from the director of the Texas
	Forest Service. The appraisal review board shall accept the letter
	as conclusive proof of the type, size, and location of the zone.
	SECTION 1.36.  Subchapter A, Chapter 41, Tax Code, is
	amended by adding Sections 41.031 and 41.032 to read as follows:
	Sec. 41.031.  CHALLENGE BY STATE. The state is entitled to
	challenge before the appraisal review board the exclusion of
	property from the appraisal roll for state ad valorem taxes.
	Sec. 41.032.  REPRESENTATION OF STATE.  The comptroller
	represents the state in a challenge by the state under this
	subchapter.  The comptroller may delegate that function to the
	appropriate school district assessor or collector.
	SECTION 1.37.  Section 41.06(a), Tax Code, is amended to
	read as follows:
	(a)  The secretary of the appraisal review board shall
	deliver to the comptroller on behalf of the state and to the
	presiding officer of the governing body of each taxing unit other
	than the state entitled to appear at a challenge hearing written
	notice of the date, time, and place fixed for the hearing. The
	secretary shall deliver the notice not later than the 10th day
	before the date of the hearing.
	SECTION 1.38.  Section 41.07(d), Tax Code, is amended to
	read as follows:
	(d)  The board shall deliver by certified mail a notice of
	the issuance of the order and a copy of the order to the taxing unit.
	If the order of the board excludes property from the appraisal roll
	for state ad valorem taxes, the board shall also deliver a notice of
	issuance and a copy of the order to the comptroller and the
	appropriate school district assessor in the manner prescribed by
	the comptroller.
	SECTION 1.39.  Section 41.47(d), Tax Code, is amended to
	read as follows:
	(d)  The board shall deliver by certified mail a notice of
	issuance of the order and a copy of the order to the property owner
	and the chief appraiser.  If the order of the board excludes
	property from the appraisal roll for state ad valorem taxes, the
	board shall also deliver a notice of issuance and a copy of the
	order to the comptroller and the appropriate school district
	assessor in the manner prescribed by the comptroller.
	SECTION 1.40.  Subchapter A, Chapter 42, Tax Code, is
	amended by adding Section 42.032 to read as follows:
	Sec. 42.032.  RIGHT OF APPEAL BY COMPTROLLER. (a) The
	comptroller is entitled to appeal an order of the appraisal review
	board excluding property from the appraisal roll for state ad
	valorem taxes.
	(b)  The attorney general shall represent the comptroller in
	an appeal under this section. The attorney general may delegate its
	duties under this section to a county or district attorney or may
	contract with a private attorney for the performance of those
	duties.
	SECTION 1.41.  Sections 42.06(a) and (c), Tax Code, are
	amended to read as follows:
	(a)  To exercise the party's right to appeal an order of an
	appraisal review board, a party other than a property owner must
	file written notice of appeal within 15 days after the date the
	party receives the notice required by Section 41.47 or, in the case
	of a taxing unit or the comptroller, by Section 41.07 that the order
	appealed has been issued. To exercise the right to appeal an order
	of the comptroller, a party other than a property owner must file
	written notice of appeal within 15 days after the date the party
	receives the comptroller's order. A property owner is not required
	to file a notice of appeal under this section.
	(c)  If the chief appraiser, a taxing unit, [or] a county, or
	the comptroller appeals[, the chief appraiser, if the appeal is of]
	an order of the appraisal review board, the chief appraiser [or the
	comptroller, if the appeal is of an order of the comptroller,] shall
	deliver a copy of the notice to the property owner whose property is
	involved in the appeal.  If the appeal is of an order of the
	comptroller, the comptroller shall deliver a copy of the notice to
	the property owner.  The chief appraiser or the comptroller shall
	deliver the copy of the notice within 10 days after the date the
	notice is filed.
	SECTION 1.42.  Sections 42.43(a), (b), (b-1), (c), (e), (g),
	and (h), Tax Code, are amended to read as follows:
	(a)  If the final determination of an appeal that decreases a
	property owner's tax liability occurs after the property owner has
	paid the owner's [his] taxes, the taxing unit and the comptroller,
	if the property is subject to the state ad valorem tax, shall refund
	to the property owner the difference between the amount of taxes
	paid and amount of taxes for which the property owner is liable.
	(b)  For a refund made under this section because an
	exemption under Section 11.20 that was denied by the chief
	appraiser or appraisal review board is granted, the taxing unit or
	the comptroller shall include with the refund interest on the
	amount refunded calculated at an annual rate that is equal to the
	auction average rate quoted on a bank discount basis for
	three-month treasury bills issued by the United States government,
	as published by the Federal Reserve Board, for the week in which the
	taxes became delinquent, but not more than 10 percent, calculated
	from the delinquency date for the taxes until the date the refund is
	made. For any other refund made under this section, the taxing unit
	or the comptroller shall include with the refund interest on the
	amount refunded at an annual rate of eight percent, calculated from
	the delinquency date for the taxes until the date the refund is
	made.
	(b-1)  A taxing unit or the comptroller may not send a refund
	made under this section before the earlier of:
	(1)  the 21st day after the final determination of the
	appeal; or
	(2)  the date the property owner files the form
	prescribed by Subsection (i) with the taxing unit or the
	comptroller.
	(c)  Notwithstanding Subsection (b), if a taxing unit or the
	comptroller does not make a refund, including interest, required by
	this section before the 60th day after the date the chief appraiser
	certifies a correction to the appraisal roll under Section 42.41,
	the taxing unit or the comptroller shall include with the refund
	interest on the amount refunded at an annual rate of 12 percent,
	calculated from the delinquency date for the taxes until the date
	the refund is made.  A refund is not considered made under this
	section until sent to the proper person as provided by this section.
	(e)  Except as provided by Subsection (f) or (g), a taxing
	unit or the comptroller shall send a refund made under this section
	to the property owner.
	(g)  If a form prescribed by the comptroller under Subsection
	(i) is filed with a taxing unit or the comptroller before the 21st
	day after the final determination of an appeal that requires a
	refund be made, the taxing unit or the comptroller shall send the
	refund to the person and address designated on the form.
	(h)  A form filed with a taxing unit or the comptroller under
	Subsection (g) remains in effect for all subsequent refunds
	required by this section until revoked in a written revocation
	filed with the taxing unit or the comptroller by the property owner.
	SECTION 1.43.  Sections 43.01 and 43.04, Tax Code, are
	amended to read as follows:
	Sec. 43.01.  AUTHORITY TO BRING SUIT. The comptroller or a
	[A] taxing unit may sue the appraisal district that appraises
	property for the state or the unit to compel the appraisal district
	to comply with the provisions of this title, rules of the
	comptroller, or other applicable law.
	Sec. 43.04.  SUIT TO COMPEL COMPLIANCE WITH DEADLINES. The
	comptroller or the governing body of a taxing unit may sue the chief
	appraiser or members of the appraisal review board, as applicable,
	for failure to comply with the deadlines imposed by Section
	25.22(a), 26.01(a), or 41.12. If the court finds that the chief
	appraiser or appraisal review board failed to comply for good cause
	shown, the court shall enter an order fixing a reasonable deadline
	for compliance. If the court finds that the chief appraiser or
	appraisal review board failed to comply without good cause, the
	court shall enter an order requiring the chief appraiser or
	appraisal review board to comply with the deadline not later than
	the 10th day after the date the judgment is signed. In a suit
	brought under this section, the court may enter any other order the
	court considers necessary to ensure compliance with the court's
	deadline or the applicable statutory requirements. Failure to obey
	an order of the court is punishable as contempt.
	SECTION 1.44.  Chapter 311, Tax Code, is amended by adding
	Section 311.0131 to read as follows:
	Sec. 311.0131.  SCHOOL DISTRICT ANNUAL OBLIGATION TO TAX
	INCREMENT FUND; STATE PAYMENT OF PORTION OF OBLIGATION.  (a)  This
	section applies only to a reinvestment zone created before
	September 1, 1999, for which a school district enters into an
	agreement under Section 311.013(f) with the governing body of the
	municipality that created the zone to pay into the tax increment
	fund for the zone a portion of the school district's tax increment
	produced from property located in the zone.
	(b)  Notwithstanding the terms of the agreement regarding
	the portion of the school district's tax increment required to be
	paid into the fund, in each year, the portion of the school
	district's tax increment the school district is required to pay
	into the fund is the school district annual obligation for the
	school district for that year calculated under Subsection (c).
	(c)  The municipality that created the zone or its designee
	shall calculate the school district annual obligation for a school
	district by applying the applicable school district's tax rate for
	the 2010 tax year to the captured appraised value for the school
	district for the year for which the obligation is calculated and
	multiplying that amount by the percentage of the school district's
	tax increment for the year for which the obligation is calculated
	that the school district agreed to pay into the tax increment fund
	in that year under Section 311.013(f).
	(d)  The school district annual obligation for each year
	shall be apportioned between the school district and the state in
	proportion to the amount of taxes each of those entities imposes on
	the captured appraised value for the zone in that year as calculated
	under this subsection. The amount of taxes the state imposes on
	that captured appraised value is calculated by multiplying the rate
	of the state ad valorem tax rate for that year by the captured
	appraised value for the state. The amount of taxes the school
	district imposes on that captured appraised value used in making
	the apportionment is calculated by multiplying the school district
	local fund assignment tax rate for that year by the captured
	appraised value for the school district. The tax increment base for
	the state under Section 311.012 is determined as if this section
	were in effect for the year in which the reinvestment zone was
	created.
	(e)  If more than one school district imposes taxes on
	property in a reinvestment zone, the school district annual
	obligation for each school district and the portion of that
	obligation that the state is required to pay under this section
	shall be calculated separately for the portion of the property in
	the reinvestment zone located in each school district.
	(f)  The comptroller shall verify the payments to be made by
	the state under this section and shall retain from state property
	tax collections sufficient funds to make the calculated payments.
	From the retained funds, the comptroller shall pay to the school
	district or, if required by the agreement, to the municipality the
	portion of the school district annual obligation apportioned to the
	state under Subsection (c).
	(g)  On receipt of the state's portion of the school district
	annual obligation by a school district, the school district
	promptly shall pay the state's portion to the municipality. At the
	time of payment of the state's portion to the municipality, the
	school district shall pay to the municipality any unpaid balance of
	the school district's portion of the school district annual
	obligation.
	(h)  Amounts paid to a municipality under Subsections (f) and
	(g) shall be deposited to the credit of the tax increment fund on
	behalf of the school district.
	(i)  This section ceases to apply to a reinvestment zone on
	the earlier date specified by Section 311.017(a)(1) or (2) for the
	reinvestment zone. If the agreement provides that the termination
	date may be extended, the state's obligation to pay a portion of the
	school district annual obligation ceases on the date the school
	district ceases to be required to pay any tax increment produced by
	the school district into the tax increment fund for the zone.
	SECTION 1.45.  Subchapter A, Chapter 313, Tax Code, is
	amended by adding Section 313.010 to read as follows:
	Sec. 313.010.  REPORT TO LEGISLATURE.  (a)  Not later than
	December 1, 2012, the Legislative Budget Board shall submit a
	report to the legislature that includes recommended changes to this
	chapter to provide incentives and credits relating to the state ad
	valorem tax that are consistent with the purposes described by
	Section 313.003.
	(b)  This section expires January 1, 2013.
	SECTION 1.46.  Section 403.302(j), Government Code, is
	amended to read as follows:
	(j)  For purposes of Chapter 42, Education Code, the
	comptroller shall certify to the commissioner of education:
	(1)  a final value for each school district computed on
	a residence homestead exemption under Section 1-b(c), Article VIII,
	Texas Constitution, of $5,000;
	(2)  a final value for each school district computed
	on:
	(A)  a residence homestead exemption under
	Section 1-b(c), Article VIII, Texas Constitution, of $15,000; and
	(B)  the effect of the additional limitation on
	tax increases under Section 1-b(d), Article VIII, Texas
	Constitution, as proposed by H.J.R. No. 4, 75th Legislature,
	Regular Session, 1997; and
	(3)  a final value for each school district computed on
	the effect of the reduction of the limitation on tax increases to
	reflect any reduction in the school district tax rate as provided by
	Section 11.26(a-1), [(a-2), or (a-3),] Tax Code, as applicable.
	ARTICLE 2. PUBLIC SCHOOL FINANCE; ENRICHMENT TAX
	SECTION 2.01.  Section 11.1511(c), Education Code, is
	amended to read as follows:
	(c)  The board may:
	(1)  issue bonds and levy, pledge, assess, and collect
	an annual ad valorem tax to pay the principal and interest on the
	bonds as authorized under Sections 45.001 and 45.003;
	(2)  levy, assess, and collect an annual ad valorem tax
	for enrichment [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
	(4)  enter into contracts as authorized under this code
	or other law and delegate contractual authority to the
	superintendent as appropriate.
	SECTION 2.02.  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(e) [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 2.03.  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 2.04.  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 2.05.  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 2.06.  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 the [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 2.07.  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 the [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 2.08.  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 the [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 2.09.  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 the [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 2.10.  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, 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 tax effort
	[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 enrichment [maintenance and operation] less any amounts
	paid into a tax increment fund under Chapter 311, Tax Code.
	SECTION 2.11.  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 2.12.  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 sum of the dollar amount
	of enrichment [maintenance] and debt service taxes imposed by the
	district for that year divided by the district's average daily
	attendance for the preceding year and a dollar amount determined by
	the commissioner.
	SECTION 2.13.  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 2.14.  Section 42.007(c), Education Code, is amended
	to read as follows:
	(c)  The funding elements must include:
	(1)  a basic allotment for the purposes of Section
	42.101 that[, when combined with the guaranteed yield component
	provided by Subchapter F,] represents the cost per student of a
	regular education program that meets all mandates of law and
	regulation;
	(2)  adjustments designed to reflect the variation in
	known resource costs and costs of education beyond the control of
	school districts;
	(3)  appropriate program cost differentials and other
	funding elements for the programs authorized under Subchapter C,
	with the program funding level expressed as dollar amounts and as
	weights applied to the adjusted basic allotment for the appropriate
	year;
	(4)  the maximum guaranteed level of qualified state
	and local funds per student for the purposes of Subchapter F;
	(5)  the enrichment [and facilities] tax rate under
	Subchapter F;
	(6)  the computation of students in weighted average
	daily attendance under Section 42.302; and
	(7)  the amount to be appropriated for the school
	facilities assistance program under Chapter 46.
	SECTION 2.15.  Section 42.008, Education Code, is amended by
	amending Subsections (a) and (c) 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 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 2011-2012 school year. This
	subsection expires September 1, 2013.
	(c)  The commissioner shall make adjustments to amounts due
	to a school district under this chapter [or amounts required for a
	district to comply with Chapter 41] as necessary to comply with the
	limitation imposed by this section.
	SECTION 2.16.  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 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 2.17.  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 2.18.  Section 42.251(b), Education Code, is amended
	to read as follows:
	(b)  The program shall be financed by:
	(1)  ad valorem tax revenue generated by the state ad
	valorem tax under Section 3-a, Article VII, Texas Constitution [an
	equalized uniform school district effort];
	(2)  enrichment 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
	(4)  state funds appropriated for the purposes of
	public school education and allocated to each district in an amount
	sufficient to finance the cost of each district's Foundation School
	Program not covered by other funds specified in this subsection.
	SECTION 2.19.  Section 42.25161(a), Education Code, is
	amended to read as follows:
	(a)  The commissioner shall provide South Texas Independent
	School District with the amount of state aid necessary to ensure
	that the district receives an amount of state maintenance and
	operations [and local] revenue per student in weighted average
	daily attendance that is at least $120 greater than the amount of
	state and local maintenance and operations revenue the district
	would have received per student in weighted average daily
	attendance during the 2009-2010 school year under this chapter, as
	it existed on January 1, 2009, at a maintenance and operations tax
	rate equal to the product of the state compression percentage for
	the 2009-2010 school year, as established under former Section
	42.2516, multiplied by the maintenance and operations tax rate
	adopted by the district for the 2005 tax year[, provided that the
	district imposes a maintenance and operations tax at that rate].
	SECTION 2.20.  Section 42.2521(a), Education Code, is
	amended to read as follows:
	(a)  For purposes of Chapter [Chapters 41 and] 46 and this
	chapter, and to the extent money specifically authorized to be used
	under this section is available, the commissioner shall adjust the
	taxable value of property in a school district that, due to factors
	beyond the control of the board of trustees, experiences a rapid
	decline in the tax base used in calculating taxable values in excess
	of four percent of the tax base used in the preceding year.
	SECTION 2.21.  Section 42.2523(a), Education Code, is
	amended to read as follows:
	(a)  For purposes of Chapter [Chapters 41 and] 46 and this
	chapter, the commissioner shall adjust the taxable value of
	property of a school district all or part of which is located in an
	area declared a disaster area by the governor under Chapter 418,
	Government Code, as necessary to ensure that the district receives
	funding based as soon as possible on property values as affected by
	the disaster.
	SECTION 2.22.  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 2.23.  Sections 42.253(a) and (c), Education Code,
	are amended to read as follows:
	(a)  For each school year the commissioner shall determine:
	(1)  the amount of money to which a school district is
	entitled under Subchapters B and C;
	(2)  the amount of money to which a school district is
	entitled under Subchapter F;
	(3)  the amount of money allocated to the district from
	the available school fund; and
	(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.
	(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) and[,] (a)(4)[,
	and (a)(5)].
	SECTION 2.24.  Sections 42.2531(a), (b), and (c), Education
	Code, are amended to read as follows:
	(a)  The commissioner may make adjustments to amounts due to
	a school district under this chapter or Chapter 46[, or to amounts
	necessary for a district to comply with the requirements of Chapter
	41,] as provided by this section.
	(b)  A school district that has a major taxpayer, as
	determined by the commissioner, that because of a protest of the
	valuation of the taxpayer's property fails to pay all or a portion
	of the ad valorem taxes due to the district may apply to the
	commissioner to have the district's taxable value of property or ad
	valorem tax collections adjusted for purposes of this chapter or
	Chapter [41 or] 46. The commissioner may make the adjustment only
	to the extent the commissioner determines that making the
	adjustment will not:
	(1)  in the fiscal year in which the adjustment is made,
	cause the amount to which school districts are entitled under this
	chapter to exceed the amount appropriated for purposes of the
	Foundation School Program for that year; and
	(2)  if the adjustment is made in the first year of a
	state fiscal biennium, cause the amount to which school districts
	are entitled under this chapter for the second year of the biennium
	to exceed the amount appropriated for purposes of the Foundation
	School Program for that year.
	(c)  The commissioner shall recover the benefit of any
	adjustment made under this section by making offsetting adjustments
	in the school district's taxable value of property or ad valorem tax
	collections for purposes of this chapter or Chapter [41 or] 46 on a
	final determination of the taxable value of property that was the
	basis of the original adjustment, or in the second school year
	following the year in which the adjustment is made, whichever is
	earlier.
	SECTION 2.25.  Section 42.257(b), Education Code, is amended
	to read as follows:
	(b)  If the district would have received a greater amount
	from the foundation school fund for the applicable school year
	using the adjusted value, the commissioner shall add the difference
	to subsequent distributions to the district from the foundation
	school fund. [An adjustment does not affect the local fund
	assignment of any other district.]
	SECTION 2.26.  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 2.27.  Section 42.260(b), Education Code, is amended
	to read as follows:
	(b)  For each year, the commissioner shall certify to each
	school district or participating charter school the amount of[:
	[(1)     additional funds to which the district or school
	is entitled due to the increase made by H.B. No. 3343, Acts of the
	77th Legislature, Regular Session, 2001, to:
	[(A)     the equalized wealth level under Section
	41.002; or
	[(B)]  the guaranteed level of state and local
	funds per weighted student per cent of tax effort under Section
	42.302[; or
	[(2)     additional state aid to which the district or
	school is entitled under Section 42.2513].
	SECTION 2.28.  Sections 42.302(a), (a-1), (b), (c), (d), and
	(e), Education Code, are amended to read as follows:
	(a)  Each school district is guaranteed a specified amount
	per weighted student in state and local funds for each cent of tax
	effort [over that required for the district's local fund
	assignment] up to the maximum tax rate permitted under Section
	45.003 [level specified in this subchapter].  The amount of state
	support[, subject only to the maximum amount under Section 42.303,]
	is determined by the formula:
	GYA = (GL X WADA X DTR X 100) - LR
	where:
	"GYA" is the guaranteed yield amount of state funds to be
	allocated to the district;
	"GL" is the dollar amount guaranteed level of state and local
	funds per weighted student per cent of tax effort, which is an
	amount described by Subsection (a-1) or a greater amount for any
	year provided by appropriation;
	"WADA" is the number of students in weighted average daily
	attendance, which is calculated by dividing the sum of the school
	district's allotments under Subchapters B and C, less any allotment
	to the district for transportation, any allotment under Section
	42.158, 42.159, or 42.160, and 50 percent of the adjustment under
	Section 42.102, by the basic allotment for the applicable year;
	"DTR" is the district enrichment tax rate of the school
	district, which is determined by subtracting the amount [amounts]
	specified by Subsection (b) from the total amount of enrichment
	[maintenance and operations] taxes collected by the school district
	for the applicable school year and dividing the difference by the
	quotient of the district's taxable value of property as determined
	under Subchapter M, Chapter 403, Government Code, or, if
	applicable, under Section 42.2521, divided by 100; and
	"LR" is the local revenue, which is determined by multiplying
	"DTR" by the quotient of the district's taxable value of property as
	determined under Subchapter M, Chapter 403, Government Code, or, if
	applicable, under Section 42.2521, divided by 100.
	(a-1)  [In this section, "wealth per student" has the meaning
	assigned by Section 41.001.]  For purposes of Subsection (a), the
	dollar amount guaranteed level of state and local funds per
	weighted student per cent of tax effort ("GL") for a school district
	is:
	(1)  the greater of the amount of district tax revenue
	per weighted student per cent of tax effort that would be available
	to the Austin Independent School District, as determined by the
	commissioner in cooperation with the Legislative Budget Board, if
	the reduction of the limitation on tax increases as provided by
	Section 11.26(a-1), [(a-2), or (a-3),] Tax Code, did not apply, or
	the amount of district tax revenue per weighted student per cent of
	tax effort used for purposes of this subdivision in the preceding
	school year, for the first six cents of [by which] the district's
	enrichment [maintenance and operations] tax rate [exceeds the rate
	equal to 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
	(2)  $31.95, for the district's enrichment [maintenance
	and operations] tax effort that exceeds the amount of tax effort
	described by Subdivision (1).
	(b)  In computing the district enrichment tax rate of a
	school district, the total amount of enrichment [maintenance and
	operations] taxes collected by the school district does not include
	the amount of[:
	[(1)     the district's local fund assignment under
	Section 42.252; or
	[(2)]  taxes paid into a tax increment fund under
	Chapter 311, Tax Code.
	(c)  For purposes of this section, school district
	enrichment taxes for which credit is granted under Section 31.035,
	31.036, or 31.037, Tax Code, are considered taxes collected by the
	school district as if the taxes were paid when the credit for the
	taxes was granted.
	(d)  For purposes of this section, the total amount of
	enrichment [maintenance and operations] taxes collected for an
	applicable school year by a school district with alternate tax
	dates, as authorized by Section 26.135, Tax Code, is the amount of
	taxes collected on or after January 1 of the year in which the
	school year begins and not later than December 31 of the same year.
	(e)  For purposes of this section, school district
	enrichment taxes for which credit is granted under Subchapter D,
	Chapter 313, Tax Code, are considered taxes collected by the school
	district as if the taxes were paid when the credit for the taxes was
	granted.
	SECTION 2.29.  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 2.30.  Sections 44.004(c) and (c-1), Education Code,
	are amended to read as follows:
	(c)  The notice of public meeting to discuss and adopt the
	budget and the proposed tax rate may not be smaller than one-quarter
	page of a standard-size or a tabloid-size newspaper, and the
	headline on the notice must be in 18-point or larger type.  Subject
	to Subsection (d), the notice must:
	(1)  contain a statement in the following form:
	"NOTICE OF PUBLIC MEETING TO DISCUSS BUDGET AND PROPOSED TAX RATE
	"The (name of school district) will hold a public meeting at
	(time, date, year) in (name of room, building, physical location,
	city, state).  The purpose of this meeting is to discuss the school
	district's budget that will determine the tax rate that will be
	adopted.  Public participation in the discussion is invited."  The
	statement of the purpose of the meeting must be in bold type.  In
	reduced type, the notice must state:  "The tax rate that is
	ultimately adopted at this meeting or at a separate meeting at a
	later date may not exceed the proposed rate shown below unless the
	district publishes a revised notice containing the same information
	and comparisons set out below and holds another public meeting to
	discuss the revised notice.";
	(2)  contain a section entitled "Comparison of Proposed
	Budget with Last Year's Budget," which must show the difference,
	expressed as a percent increase or decrease, as applicable, in the
	amounts budgeted for the preceding fiscal year and the amount
	budgeted for the fiscal year that begins in the current tax year for
	each of the following:
	(A)  maintenance and operations;
	(B)  enrichment;
	(C)  debt service; and
	(D) [(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 "Enrichment [Maintenance &
	Operations]," "Interest & Sinking Fund," and "Total," which is the
	sum of "Enrichment [Maintenance & Operations]" and "Interest &
	Sinking Fund":
	(i)  the school district's "Last Year's
	Rate";
	(ii)  the "Rate to Maintain Same Level of
	Enrichment [Maintenance & Operations] Revenue & Pay Debt Service,"
	which:
	(a)  in the case of "Enrichment
	[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 Subchapter F,
	Chapter 42, would provide the same amount of enrichment
	[maintenance and operations] taxes and state funds distributed
	under Subchapter F, 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 Enrichment 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 enrichment 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.
	(c-1)  The notice described by Subsection (c) must state in a
	distinct row or on a separate or individual line for each of the
	following taxes:
	(1)  the proposed rate of the school district's
	enrichment [maintenance] tax described by Section 45.003, under the
	heading "Enrichment [Maintenance] Tax"; and
	(2)  if the school district has issued ad valorem tax
	bonds under Section 45.001, the proposed rate of the tax to pay for
	the bonds, under the heading "School Debt Service Tax Approved by
	Local Voters."
	SECTION 2.31.  Section 45.002, Education Code, is amended to
	read as follows:
	Sec. 45.002.  ENRICHMENT [MAINTENANCE] TAXES. The governing
	board of an independent school district, including the city council
	or commission that has jurisdiction over a municipally controlled
	independent school district, the governing board of a rural high
	school district, and the commissioners court of a county, on behalf
	of each common school district under its jurisdiction, may levy,
	assess, and collect annual ad valorem taxes for the purpose of
	providing an enriched educational program [further maintenance of
	public schools] in the district, subject to Section 45.003.
	SECTION 2.32.  Section 45.003(d), Education Code, is amended
	to read as follows:
	(d)  A proposition submitted to authorize the levy of
	enrichment [maintenance] taxes must include the question of whether
	the governing board or commissioners court may levy, assess, and
	collect annual ad valorem enrichment taxes [for the further
	maintenance of public schools,] at a rate not to exceed the rate
	stated in the proposition.  For any year, the enrichment
	[maintenance] tax rate per $100 of taxable value adopted by the
	district may not exceed the rate [equal to the sum] of $0.17 [and
	the product of the state compression percentage,
	as     determined     under Section 42.2516, multiplied by $1.50].
	SECTION 2.33.  Section 45.104(a), Education Code, is amended
	to read as follows:
	(a)  The board of trustees of any school district may pledge
	its delinquent taxes levied for enrichment [maintenance] purposes
	for specific past, current, and future school years as security for
	a loan, and may evidence any such loan with negotiable notes, and
	the delinquent taxes pledged shall be applied against the principal
	and interest of the loan. Negotiable notes issued under this
	subsection must mature not more than 20 years from their date.
	SECTION 2.34.  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 an
	enrichment [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 2.35.  Sections 45.109(c) and (d), Education Code,
	are 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 enrichment
	[maintenance] tax in an amount sufficient, without limitation, to
	provide all of the consideration. If voted and pledged, the
	enrichment [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 enrichment
	[maintenance] taxes.
	(d)  An enrichment [A maintenance] tax may not be pledged to
	the payment of any contract under this section or assessed, levied,
	or collected unless an election is held in the district and the
	enrichment [maintenance] tax is favorably voted by a majority of
	the qualified voters of the district voting at the election. 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 2.36.  Section 45.111(b), Education Code, is amended
	to read as follows:
	(b)  The governing body of the district shall provide for the
	payment of the certificates issued under this section by
	appropriating and pledging local school funds derived from
	enrichment [maintenance] taxes levied and assessed under Section
	[Sections] 45.002 and maintenance taxes levied and assessed under
	Section 130.122; Chapter 273, Acts of the 53rd Legislature,
	Regular Session, 1953 (Article 2784g, Vernon's Texas Civil
	Statutes); or other similar law that limits the amount of tax that
	may be levied for enrichment or maintenance purposes, as
	distinguished from bond requirements. The appropriation and pledge
	may be in the nature of a continuing irrevocable pledge to apply the
	first moneys collected annually from the tax levy to the payment of
	the obligations or by the irrevocable present levy and
	appropriation of the amount of the enrichment or maintenance tax
	required to meet the annual debt service requirements of the
	obligations, in which event the governing body shall covenant to
	annually set aside the amount in the annual tax levy, showing the
	same is a portion of the enrichment or maintenance tax. The
	governing body shall annually budget the amount required to pay the
	principal and interest of the obligations that may be scheduled to
	become due in any fiscal year. This section may not be construed as
	permitting the levy of an enrichment or [a] maintenance tax in
	excess of the amount approved by the qualified voters of the
	district.
	SECTION 2.37.  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 enrichment [maintenance] tax in an amount sufficient,
	without limitation, to provide all or part of the consideration. If
	voted and pledged, the enrichment [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 enrichment [maintenance] taxes. An enrichment [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 enrichment [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 2.38.  Section 45.251(2), Education Code, is amended
	to read as follows:
	(2)  "Foundation School Program" means the program
	established under Chapters [41,] 42[,] and 46, or any successor
	program of state appropriated funding for school districts in this
	state.
	SECTION 2.39.  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 2.40.  Section 46.003(d), Education Code, is amended
	to read as follows:
	(d)  The amount budgeted by a district for payment of
	eligible bonds may include:
	(1)  bond taxes collected in the current school year;
	(2)  bond taxes collected in a preceding school year in
	excess of the amount necessary to pay the district's share of actual
	debt service on bonds in that year, provided that the taxes were not
	used to generate other state financial assistance for the district;
	[or]
	(3)  enrichment [maintenance and operations] taxes
	collected in the current school year or a preceding school year in
	excess of the amount eligible to be used to generate other state
	financial assistance for the district; or
	(4)  maintenance and operations taxes collected in a
	preceding school year in excess of the amount eligible to be used to
	generate other state financial assistance for the district.
	SECTION 2.41.  Section 46.004(a), Education Code, is amended
	to read as follows:
	(a)  A district may receive state assistance in connection
	with a lease-purchase agreement concerning an instructional
	facility. For purposes of this subchapter:
	(1)  taxes levied for purposes of enrichment
	[maintenance and operations] that are necessary to pay a district's
	share of the payments under a lease-purchase agreement for which
	the district receives state assistance under this subchapter are
	considered to be bond taxes; and
	(2)  payments under a lease-purchase agreement are
	considered to be payments of principal of and interest on bonds.
	SECTION 2.42.  Section 46.032(c), Education Code, is amended
	to read as follows:
	(c)  The amount budgeted by a district for payment of
	eligible bonds may include:
	(1)  bond taxes collected in the current school year;
	(2)  bond taxes collected in a preceding school year in
	excess of the amount necessary to pay the district's share of actual
	debt service on bonds in that year, provided that the taxes were not
	used to generate other state financial assistance for the district;
	[or]
	(3)  enrichment [maintenance and operations] taxes
	collected in the current school year or a preceding school year in
	excess of the amount eligible to be used to generate other state
	financial assistance for the district; or
	(4)  maintenance and operations taxes collected in a
	preceding school year in excess of the amount eligible to be used to
	generate other state financial assistance for the district.
	SECTION 2.43.  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 2.44.  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 2.45.  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 2.46.  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 2.47.  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 2.48.  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 2.49.  Section 403.302(a), Government Code, is
	amended to read as follows:
	(a)  The comptroller shall conduct a study using comparable
	sales and generally accepted auditing and sampling techniques to
	determine the total taxable value of all property in each school
	district. The study shall determine the taxable value of all
	property and of each category of property in the district and the
	productivity value of all land that qualifies for appraisal on the
	basis of its productive capacity and for which the owner has applied
	for and received a productivity appraisal.  [The comptroller shall
	make appropriate adjustments in the study to account for actions
	taken under Chapter 41, Education Code.]
	SECTION 2.50.  Section 21.01, Tax Code, is amended to read as
	follows:
	Sec. 21.01.  REAL PROPERTY. Real property is taxable by a
	taxing unit if located in the unit on January 1[, except as provided
	by Chapter 41, Education Code].
	SECTION 2.51.  Section 21.02(a), Tax Code, is amended to
	read as follows:
	(a)  Except as provided by Subsection [Subsections (b) and]
	(e) and by Sections 21.021, 21.04, and 21.05, tangible personal
	property is taxable by a taxing unit if:
	(1)  it is located in the unit on January 1 for more
	than a temporary period;
	(2)  it normally is located in the unit, even though it
	is outside the unit on January 1, if it is outside the unit only
	temporarily;
	(3)  it normally is returned to the unit between uses
	elsewhere and is not located in any one place for more than a
	temporary period; or
	(4)  the owner resides (for property not used for
	business purposes) or maintains the owner's principal place of
	business in this state (for property used for business purposes) in
	the unit and the property is taxable in this state but does not have
	a taxable situs pursuant to Subdivisions (1) through (3) of this
	subsection.
	SECTION 2.52.  Section 26.08(n), Tax Code, is amended to
	read as follows:
	(n)  For purposes of this section, the rollback tax rate of a
	school district [whose maintenance and operations tax rate for the
	2005 tax year was $1.50 or less per $100 of taxable value] is:
	(1)  for the 2012 [2006] tax year:
	(A)  for a district whose maintenance and
	operations ad valorem tax rate for the 2011 tax year was at least $1
	per $100 of taxable value, the sum of the following:
	(i)  the rate that is equal to the greater of
	$0.04 per $100 of taxable value or the difference between the
	maintenance and operations ad valorem tax rate of the district for
	the 2011 tax year and the rate of $1 per $100 of taxable value; and
	(ii)  the district's current debt rate; and
	(B)  for a district whose maintenance and
	operations ad valorem tax rate for the 2011 tax year was less than
	$1 per $100 of taxable value, the district's current debt rate; [,
	the sum of the rate that is equal to 88.67 percent of the
	maintenance and operations tax rate adopted by the district for the
	2005 tax year, the rate of $0.04 per $100 of taxable value, and the
	district's current debt rate; and]
	(2)  for the 2013, 2014, and 2015 [2007 and subsequent]
	tax years:
	(A)  for a district described by Subdivision
	(1)(A), the sum of the following:
	(i)  the rate described by Subdivision
	(1)(A)(i);
	(ii)  the rate that is equal to the sum of
	the differences for the 2012 and each subsequent tax year between
	the adopted tax rate of the district for that year if the rate was
	approved at an election under this section and the rollback tax rate
	of the district for that year; and
	(iii)  the district's current debt rate; and
	(B)  for a district described by Subdivision
	(1)(B), the sum of the following:
	(i)  the rate that is equal to the sum of the
	differences for the 2012 and each subsequent tax year between the
	adopted tax rate of the district for that year if the rate was
	approved at an election under this section and the rollback tax rate
	of the district for that year; and
	(ii)  the district's current debt rate; and
	(3)  for the 2016 and subsequent tax years:
	(A)  for a district described by Subdivision
	(1)(A), the sum of the following:
	(i)  the rate described by Subdivision
	(1)(A)(i);
	(ii)  the rate that is equal to the sum of
	the differences for the 2012 and each subsequent tax year between
	the adopted tax rate of the district for that year if the rate was
	approved at an election under this section and the rollback tax rate
	of the district for that year; and
	(iii)  the district's current debt rate; and
	(B)  for a district described by Subdivision
	(1)(B), the sum of the following:
	(i)  the rate that is equal to the greater of
	$0.04 per $100 of taxable value or the sum of the differences for
	the 2012 and each subsequent tax year between the adopted tax rate
	of the district for that year if the rate was approved at an
	election under this section and the rollback tax rate of the
	district for that year; and
	(ii)  the district's current debt rate[, the
	lesser of the following:
	[(A)  the sum of the following:
	[(i)     the rate per $100 of taxable value that
	is equal to the product of the state compression percentage, as
	determined under Section 42.2516, Education Code, for the current
	year and $1.50;
	[(ii)     the rate of $0.04 per $100 of taxable
	value;
	[(iii)     the rate that is equal to the sum of
	the differences for the 2006 and each subsequent tax year between
	the adopted tax rate of the district for that year if the rate was
	approved at an election under this section and the rollback tax rate
	of the district for that year; and
	[(iv)  the district's current debt rate; or
	[(B)  the sum of the following:
	[(i)     the effective maintenance and
	operations tax rate of the district as computed under Subsection
	(i) or (k), as applicable;
	[(ii)     the rate per $100 of taxable value
	that is equal to the product of the state compression percentage, as
	determined under Section 42.2516, Education Code, for the current
	year and $0.06; and
	[(iii)  the district's current debt rate].
	SECTION 2.53.  Section 312.210(b), Tax Code, is amended to
	read as follows:
	(b)  A tax abatement agreement with the owner of real
	property or tangible personal property that is located in the
	reinvestment zone described by Subsection (a) and in a school
	district [that has a wealth per student that does not exceed the
	equalized wealth level] must exempt from taxation:
	(1)  the portion of the value of the property in the
	amount specified in the joint agreement among the municipality,
	county, and junior college district; and
	(2)  an amount equal to 10 percent of the maximum
	portion of the value of the property that may under Section
	312.204(a) be otherwise exempted from taxation.
	ARTICLE 3.  REPEALER; TRANSITION; EFFECTIVE DATE
	SECTION 3.01.  (a) The following provisions of the
	Education Code are repealed:
	(1)  Section 7.055(b)(34);
	(2)  Section 8.056;
	(3)  Sections 13.054(f) and (g);
	(4)  Section 21.402(b);
	(5)  Section 29.203(g);
	(6)  Chapter 41;
	(7)  Section 42.158(e);
	(8)  Section 42.160(b);
	(9)  Section 42.2516;
	(10)  Section 42.252;
	(11)  Section 42.2523(c);
	(12)  Sections 42.2524(f) and (g);
	(13)  Section 42.253(c-1);
	(14)  Sections 42.259(a), (c), and (d);
	(15)  Section 42.261;
	(16)  Sections 42.302(a-2) and (f);
	(17)  Section 42.303; and
	(18)  Section 45.003(f).
	(b)  Section 466.355(c), Government Code, is repealed.
	(c)  The following provisions of the Tax Code are repealed:
	(1)  Sections 11.26(a-2) and (a-3);
	(2)  Sections 21.02(b) and (c);
	(3)  Section 25.25(k);
	(4)  Sections 26.08(i), (i-1), (j), and (o);
	(5)  Section 26.08(p), as added by Chapter 1240 (S.B.
	2274), Acts of the 81st Legislature, Regular Session, 2009;
	(6)  Section 26.08(p), as added by Chapter 1328 (H.B.
	3646), Acts of the 81st Legislature, Regular Session, 2009; and
	(7)  Section 312.210(c).
	SECTION 3.02.  (a) Sections 45.002 and 45.003, Education
	Code, as amended by this Act, apply beginning with the 2012 tax
	year.
	(b)  The changes in law made by this Act to Sections 45.002
	and 45.003, Education Code, do not affect the authority of a school
	district to collect and use delinquent ad valorem taxes authorized
	under those sections for the 2011 or an earlier tax year.
	SECTION 3.03.  Except as otherwise provided by this Act, the
	changes in law made by this Act to the Education Code apply
	beginning with the 2012-2013 school year.
	SECTION 3.04.  The changes in law made by this Act to Chapter
	41, Tax Code, apply only to a challenge or protest under that
	chapter for which the notice is filed on or after the effective date
	of this Act.  A challenge or protest for which the notice is filed
	before the effective date of this Act is covered by the law in
	effect when the notice of protest was filed, and the former law is
	continued in effect for that purpose.
	SECTION 3.05.  The changes in law made by this Act apply to
	each tax year that begins on or after January 1, 2012. The changes
	in law do not apply to a tax year that begins before January 1, 2012,
	and the law as it existed before January 1, 2012, is continued in
	effect for purposes of taxes imposed in that tax year.
	SECTION 3.06.  This Act takes effect January 1, 2012, but
	only if the constitutional amendment proposed by the 82nd
	Legislature, Regular Session, 2011, imposing a state property tax
	for public education, authorizing the legislature to establish for
	purposes of that tax a limit on the maximum appraised value of a
	residence homestead of 105 percent of the appraised value of the
	property for the preceding tax year, prohibiting school district
	property taxes for maintenance purposes, and authorizing school
	district property taxes for educational enrichment is approved by
	the voters. If that amendment is not approved by the voters, this
	Act has no effect.