86R1285 GCB-D
 
  By: Paxton S.B. No. 689
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the repeal of provisions requiring school districts to
  reduce their wealth per student to the equalized wealth level.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  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);
                     (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, and J, Chapter 39, and Chapter 39A;
                     (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.  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 3.  Section 13.054(i), Education Code, is amended to
  read as follows:
         (i)  The funding provided under Subsection (f), (g), or (h)
  is in addition to other funding the district receives through other
  provisions of this code, including funding the district receives
  under Chapter [Chapters 41 and] 42.
         SECTION 4.  Section 21.410(h), Education Code, is amended to
  read as follows:
         (h)  A grant a school district receives under this section is
  in addition to any funding the district receives under Chapter 42.
  The commissioner shall distribute funds under this section with the
  Foundation School Program payment to which the district is entitled
  as soon as practicable after the end of the school year as
  determined by the commissioner. [A district to which Chapter 41
  applies is entitled to the grants paid under this section.] The
  commissioner shall determine the timing of the distribution of
  grants to a district that does not receive Foundation School
  Program payments.
         SECTION 5.  Section 21.411(h), Education Code, is amended to
  read as follows:
         (h)  A grant a school district receives under this section is
  in addition to any funding the district receives under Chapter 42.
  The commissioner shall distribute funds under this section with the
  Foundation School Program payment to which the district is entitled
  as soon as practicable after the end of the school year as
  determined by the commissioner. [A district to which Chapter 41
  applies is entitled to the grants paid under this section.] The
  commissioner shall determine the timing of the distribution of
  grants to a district that does not receive Foundation School
  Program payments.
         SECTION 6.  Section 21.412(h), Education Code, is amended to
  read as follows:
         (h)  A grant a school district receives under this section is
  in addition to any funding the district receives under Chapter 42.
  The commissioner shall distribute funds under this section with the
  Foundation School Program payment to which the district is entitled
  as soon as practicable after the end of the school year as
  determined by the commissioner. [A district to which Chapter 41
  applies is entitled to the grants paid under this section.] The
  commissioner shall determine the timing of the distribution of
  grants to a district that does not receive Foundation School
  Program payments.
         SECTION 7.  Section 21.413(h), Education Code, is amended to
  read as follows:
         (h)  A grant a school district receives under this section is
  in addition to any funding the district receives under Chapter 42.
  The commissioner shall distribute funds under this section with the
  Foundation School Program payment to which the district is entitled
  as soon as practicable after the end of the school year as
  determined by the commissioner. [A district to which Chapter 41
  applies is entitled to the grants paid under this section.] The
  commissioner shall determine the timing of the distribution of
  grants to a district that does not receive Foundation School
  Program payments.
         SECTION 8.  Section 25.081(f), Education Code, as added by
  Chapter 851 (H.B. 2442), Acts of the 85th Legislature, Regular
  Session, 2017, is amended to read as follows:
         (f)  The commissioner may proportionally reduce the amount
  of funding a district receives under Chapter [41,] 42[,] or 46 and
  the average daily attendance calculation for the district if the
  district operates on a calendar that provides fewer minutes of
  operation than required under Subsection (a).
         SECTION 9.  Section 29.087(j), Education Code, is amended to
  read as follows:
         (j)  For purposes of funding under Chapters [41,] 42[,] and
  46, a student attending a program authorized by this section may be
  counted in attendance only for the actual number of hours each
  school day the student attends the program, in accordance with
  Section 25.081.
         SECTION 10.  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 11.  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 12.  Section 42.009(b), Education Code, is amended
  to read as follows:
         (b)  In making the determinations regarding funding levels
  required by Subsection (a), the commissioner shall:
               (1)  make adjustments as necessary to reflect changes
  in a school district's maintenance and operations tax rate; and
               (2)  [for a district required to take action under
  Chapter 41 to reduce its wealth per student to the equalized wealth
  level, base the determinations on the district's net funding levels
  after deducting any amounts required to be expended by the district
  to comply with Chapter 41; and
               [(3)]  determine a district's weighted average daily
  attendance in accordance with this chapter as it existed on January
  1, 2011.
         SECTION 13.  Section 42.158(e), Education Code, is amended
  to read as follows:
         (e)  [A school district that is required to take action under
  Chapter 41 to reduce its wealth per student to the equalized wealth
  level is entitled to a credit, in the amount of the allotments to
  which the district is entitled under this section, against the
  total amount required under Section 41.093 for the district to
  purchase attendance credits.] A school district that is otherwise
  ineligible for state aid under this chapter is entitled to receive
  allotments under this section.
         SECTION 14.  Section 42.160(b), Education Code, is amended
  to read as follows:
         (b)  [A school district that is required to take action under
  Chapter 41 to reduce its wealth per student to the equalized wealth
  level is entitled to a credit, in the amount of the allotments to
  which the district is entitled under this section, against the
  total amount required under Section 41.093 for the district to
  purchase attendance credits.]  A school district that is otherwise
  ineligible for state aid under this chapter is entitled to receive
  allotments under this section.
         SECTION 15.  Section 42.2511(b), Education Code, is amended
  to read as follows:
         (b)  Notwithstanding any other provision of this chapter [or
  Chapter 41], a school district subject to this section is entitled
  to receive for each student in average daily attendance at the
  campus described by Subsection (a) an amount equivalent to the
  difference, if the difference results in increased funding,
  between:
               (1)  the amount described by Section 12.106; and
               (2)  the amount to which the district would be entitled
  under this chapter.
         SECTION 16.  Section 42.2518(a), Education Code, is amended
  to read as follows:
         (a)  Beginning with the 2017-2018 school year, a school
  district is entitled to additional state aid to the extent that
  state and local revenue under this chapter [and Chapter 41] is less
  than the state and local revenue that would have been available to
  the district under [Chapter 41 and] this chapter as it [those
  chapters] existed on September 1, 2015, excluding any state aid
  that would have been provided under former Section 42.2516, if the
  increase in the residence homestead exemption under Section 1-b(c),
  Article VIII, Texas Constitution, and the additional limitation on
  tax increases under Section 1-b(d) of that article as proposed by
  S.J.R. 1, 84th Legislature, Regular Session, 2015, had not
  occurred.
         SECTION 17.  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 18.  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 19.  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 20.  Section 42.253(h), Education Code, is amended
  to read as follows:
         (h)  If the amount appropriated for the Foundation School
  Program for the second year of a state fiscal biennium is less than
  the amount to which school districts and open-enrollment charter
  schools are entitled for that year, the commissioner shall certify
  the amount of the difference to the Legislative Budget Board not
  later than January 1 of the second year of the state fiscal
  biennium. The Legislative Budget Board shall propose to the
  legislature that the certified amount be transferred to the
  foundation school fund from the economic stabilization fund and
  appropriated for the purpose of increases in allocations under this
  subsection. If the legislature fails during the regular session to
  enact the proposed transfer and appropriation and there are not
  funds available under Subsection (j), the commissioner shall adjust
  the total amounts due to each school district and open-enrollment
  charter school under this chapter [and the total amounts necessary
  for each school district to comply with the requirements of Chapter
  41] by an amount determined by applying to each district and school
  the same percentage adjustment to the total amount of state and
  local revenue due to the district or school under this chapter [and
  Chapter 41] so that the total amount of the adjustment to all
  districts and schools results in an amount equal to the total
  adjustment necessary. The following fiscal year,[:
               [(1)]  a district's or school's entitlement under this
  section is increased by an amount equal to the adjustment  made
  under this subsection[; and
               [(2)     the amount necessary for a district to comply
  with the requirements of Chapter 41 is reduced by an amount
  necessary to ensure a district's full recovery of the adjustment
  made under this subsection].
         SECTION 21.  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 22.  Section 42.258(a-1), Education Code, is amended
  to read as follows:
         (a-1)  Notwithstanding Subsection (a), the agency may
  recover an overallocation of state funds over a period not to exceed
  the subsequent five school years if the commissioner determines
  that the overallocation was the result of exceptional circumstances
  reasonably caused by statutory changes to former Chapter 41,
  Chapter [or] 46, or this chapter and related reporting
  requirements.
         SECTION 23.  Section 42.260(b), Education Code, is amended
  to read as follows:
         (b)  The amount of additional funds to which each school
  district or participating charter school is entitled due to the
  increases in formula funding made by Chapter 1187 (H.B. No. 3343),
  Acts of the 77th Legislature, Regular Session, 2001, and any
  subsequent legislation amending the provisions amended by that Act
  that increase formula funding under [Chapter 41 and] this chapter
  to school districts and charter schools is available for purposes
  of Subsection (c).
         SECTION 24.  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 25.  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 not entitled to state assistance under Chapter 42 
  [required to reduce its wealth per student under Chapter 41], the
  commissioner shall order [increase amounts due from] the district
  to remit to the commissioner an [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 26.  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 27.  Section 1579.251(a), Insurance Code, is amended
  to read as follows:
         (a)  The state shall assist employees of participating
  school districts and charter schools in the purchase of group
  health coverage under this chapter by providing for each covered
  employee the amount of $900 each state fiscal year or a greater
  amount as provided by the General Appropriations Act. The state
  contribution shall be distributed through the school finance
  formulas under Chapter [Chapters 41 and] 42, Education Code, and
  used by school districts and charter schools as provided by Section
  42.260, Education Code.
         SECTION 28.  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 29.  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 30.  Section 26.08(i), Tax Code, is amended to read
  as follows:
         (i)  For purposes of this section, the effective maintenance
  and operations tax rate of a school district is the tax rate that,
  applied to the current total value for the district, would impose
  taxes in an amount that, when added to state funds that would be
  distributed to the district under Chapter 42, Education Code, for
  the school year beginning in the current tax year using that tax
  rate, would provide the same amount of state funds distributed
  under Chapter 42, Education Code, and maintenance and operations
  taxes of the district per student in weighted average daily
  attendance for that school year that would have been available to
  the district in the preceding year if the funding elements for
  Chapter [Chapters 41 and] 42, Education Code, for the current year
  had been in effect for the preceding year.
         SECTION 31.  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.
         SECTION 32.  The following laws are repealed:
               (1)  Chapter 41, Education Code;
               (2)  Sections 7.055(b)(34), 8.056, 29.203(g), and
  42.2524(f), Education Code; and
               (3)  Sections 21.02(b) and (c), 25.25(k), and
  312.210(c), Tax Code.
         SECTION 33.  This Act takes effect September 1, 2019.