85R6715 CAE-D

By: Murphy H.B. No. 1059

A BILL TO BE ENTITLED

AN ACT

relating to the effective date of certain actions taken by the commissioner of education against school districts that exceed the equalized wealth level and to reattachment of property detached from a school district by the commissioner of education to achieve the equalized wealth level.

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

SECTION 1. Section 41.004, Education Code, is amended by amending Subsections (a) and (d) and adding Subsection (e) to read as follows:

(a) Not later than July 15 of each year, using the estimate of enrollment under Section 42.254, the commissioner shall review the wealth per student of school districts in the state and shall notify:

(1) each district with wealth per student exceeding the equalized wealth level;

(2) each district to which the commissioner proposes to annex property detached from a district notified under Subdivision (1), if necessary, under Subchapter G; [and]

(3) each district to which the commissioner proposes to reattach property previously detached from the district under Subchapter G; and

(4) each district to which the commissioner proposes to consolidate a district notified under Subdivision (1), if necessary, under Subchapter H.

(d) Except as provided by Subsection (e), a [A] detachment and annexation, reattachment, or consolidation under this chapter:

(1) is effective for Foundation School Program funding purposes for the school year that begins in the calendar year following the year in which the detachment and annexation, reattachment, or consolidation is [agreed to or] ordered; and

(2) applies to the ad valorem taxation of property beginning with the tax year in which the [agreement or] order is effective.

(e) A consolidation or detachment and annexation agreed to under Subchapter B or C:

(1) is effective for Foundation School Program funding purposes for the school year that begins in the calendar year in which the consolidation or detachment and annexation is agreed to; and

(2) applies to the ad valorem taxation of property beginning with the tax year in which the agreement is effective.

SECTION 2. Section 41.202(a), Education Code, is amended to read as follows:

(a) For purposes of this subchapter, the taxable value of an individual parcel or other item of property and the total taxable value of property in a school district resulting from the detachment of property from a district, [or] annexation of property to that district, or reattachment of property to a district is determined by applying the appraisal ratio for the appropriate category of property determined under Subchapter M, Chapter 403, Government Code, for the preceding tax year to the taxable value of the detached, [or] annexed, or reattached property determined under Title 1, Tax Code, for the preceding tax year.

SECTION 3. The heading to Section 41.203, Education Code, is amended to read as follows:

Sec. 41.203. PROPERTY SUBJECT TO DETACHMENT AND ANNEXATION OR REATTACHMENT.

SECTION 4. Section 41.203, Education Code, is amended by adding Subsection (a-1) to read as follows:

(a-1) Any property detached and annexed under this subchapter is subject to reattachment under Section 41.2065, regardless of whether the property continues to satisfy the limitation imposed under Subsection (a).

SECTION 5. Subchapter G, Chapter 41, Education Code, is amended by adding Section 41.2065 to read as follows:

Sec. 41.2065. REATTACHMENT OF DETACHED AND ANNEXED PROPERTY. (a) If property has been detached from a school district and annexed to another school district by the commissioner under this subchapter, the commissioner shall reattach the property to the original school district if that district's wealth per student for a subsequent school year is determined to be $10,000 or more below each equalized wealth level specified by Section 41.002 that:

(1) applies to the district's maintenance and operations tax effort; and

(2) would, if the district's wealth per student exceeded that equalized wealth level, require the district to take action to reduce the district's wealth per student under this chapter.

(b) In determining the property to be reattached under this section, the commissioner shall reattach one or more whole parcels or items of property in ascending order of the taxable value of each parcel or item, beginning with the parcel or item having the lowest taxable value, until the district reaches a wealth per student equal as nearly as possible to, but not exceeding, the lowest equalized wealth level described by Subsection (a).

(c) The commissioner shall adopt rules necessary for the reattachment of property under this section, including rules for the reattachment of only a portion of a parcel or item of property if reattachment of the entire parcel or item would increase the district's wealth per student to an amount that is more than permitted by this section.

SECTION 6. Section 41.208(a), Education Code, is amended to read as follows:

(a) The commissioner shall order any detachments, [and] annexations, and reattachments of property under this subchapter not later than November 8 of each year.

SECTION 7. Section 41.209, Education Code, is amended to read as follows:

Sec. 41.209. TREATMENT OF SUBDIVIDED PROPERTY. (a) If the commissioner orders the detachment, [or] annexation, or reattachment of a portion of a parcel or item of property under this subchapter, the order shall specify the portion of the taxable value of the property to be detached, [or] annexed, or reattached and may, but need not, describe the specific area of the parcel or item to be detached, [or] annexed, or reattached.

(b) If an order for the detachment, [or] annexation, or reattachment of a portion of a parcel or item of property does not describe the specific area of the parcel or item to be detached, [or] annexed, or reattached, the commissioner, as soon as practicable after issuing the order, shall determine the specific area to be detached, [or] annexed, or reattached and shall certify that determination to the appraisal district for the county in which the property is located.

(c) If portions of a parcel or item of property are located in two or more school districts as the result of a detachment, [or] annexation, or reattachment, the parcel or item shall be appraised for taxation as a unit, and the commissioner shall determine the portion of the taxable value of the property that is located in each of those school districts based on the square footage of the property, or any other reasonable method adopted by the commissioner.

SECTION 8. Section 41.210(b), Education Code, is amended to read as follows:

(b) As soon as practicable after the detachment and annexation or the reattachment of property, the chief appraiser of the appraisal district in which the property is located shall send a written notice of the detachment and annexation or the reattachment to the owner of any property taxable in a different school district as a result of the detachment and annexation or the reattachment. The notice must include the name of the school district by which the property is taxable after the detachment and annexation or the reattachment.

SECTION 9. Section 41.211, Education Code, is amended to read as follows:

Sec. 41.211. STUDENT ATTENDANCE. (a) A student who is a resident of real property detached from a school district may choose to attend school in that district or in the district to which the property is annexed. For purposes of determining average daily attendance under Section 42.005, the student shall be counted in the district to which the property is annexed. If the student chooses to attend school in the district from which the property is detached, the state shall withhold any foundation school funds from the district to which the property is annexed and shall allocate to the district in which the student is attending school those funds and the amount of funds equal to the difference between the state funds the district is receiving for the student and the district's cost in educating the student.

(b) A student who is a resident of real property reattached to a school district may choose to attend school in that district or in the district to which the property was previously annexed. For purposes of determining average daily attendance under Section 42.005, the student shall be counted in the district to which the property is reattached. If the student chooses to attend school in the district to which the property was previously annexed, the state shall withhold any foundation school funds from the district to which the property is reattached and shall allocate to the district in which the student is attending school those funds and the amount of funds equal to the difference between the state funds the district is receiving for the student and the district's cost in educating the student.

SECTION 10. Section 41.212, Education Code, is amended to read as follows:

Sec. 41.212. BOND TAXES. (a) Property detached from a school district is released from the obligation for any tax to pay principal and interest on bonds authorized by the district before detachment. The property is subject to any tax to pay principal or interest on bonds authorized by the district to which the property is annexed whether authorized before or after annexation.

(b) Property reattached to a school district is released from the obligation for any tax to pay principal and interest on bonds authorized by the district the property was annexed to before reattachment. The property is subject to any tax to pay principal or interest on bonds authorized by the district to which the property is reattached whether authorized before or after reattachment.

SECTION 11. This Act takes effect immediately if it receives a vote of two-thirds of all the members elected to each house, as provided by Section 39, Article III, Texas Constitution. If this Act does not receive the vote necessary for immediate effect, this Act takes effect September 1, 2017.