86R3735 GCB/CJC-F
By: White H.B. No. 1077
A BILL TO BE ENTITLED
AN ACT
relating to public school finance, supporting public education
funding through an increase in the state sales and use tax rate, and
requiring a reduction in school district maintenance and operation
ad valorem taxes; making an appropriation; increasing the rate of a
tax.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Effective September 1, 2020, Section 41.002(a),
Education Code, is amended to read as follows:
(a) A school district may not have a wealth per student that
exceeds:
(1) the wealth per student that generates the amount
of maintenance and operations tax revenue per weighted student
available to a district with maintenance and operations tax revenue
per cent of tax effort equal to the maximum amount provided per cent
under Section 42.101(a) or (b), for the district's maintenance and
operations tax effort equal to or less than the rate equal to the
sum of 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 any additional tax effort included in calculating the
district's compressed tax rate under Section 42.101(a-1);
(2) the wealth per student that generates the amount
of maintenance and operations tax revenue per weighted student
available to the Austin Independent School District, as determined
by the commissioner in cooperation with the Legislative Budget
Board, for the first six cents by which the district's maintenance
and operations tax rate exceeds the rate equal to the sum of 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 any
additional tax effort included in calculating the district's
compressed tax rate under Section 42.101(a-1), subject to Section
41.093(b-1); or
(3) the wealth per student that yields the guaranteed
level of state and local funds per weighted student in average daily
attendance per cent of tax effort as provided by Section
42.302(a-1)(2) [$319,500], for the district's maintenance and
operations tax effort that exceeds the amount of tax effort
described by Subdivision (2).
SECTION 2. Effective September 1, 2020, Section 42.101,
Education Code, is amended by amending Subsection (a) and adding
Subsections (a-3) and (a-4) to read as follows:
(a) Except as provided by Subsection (a-3), for [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 $5,140 [$4,765] or the amount that results
from the following formula:
A = $5,140 [$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-3) Beginning with the 2020-2021 school year, the
commissioner shall recompute the amount of the basic allotment
under Subsection (a) to the maximum amount possible using the funds
appropriated to the foundation school fund under Section 151.803,
Tax Code, after the additional costs under Sections 41.002(a)(3)
and 42.302, as amended by __.B. ___, Acts of the 86th Legislature,
Regular Session, 2019, are deducted, including the required
reduction in the calculation of compressed tax rates under
Subsection (a-4).
(a-4) Beginning with the 2020-2021 school year, the
commissioner shall recompute the calculation of each district's
maximum compressed tax rate under Subsections (a) and (a-1) and the
district's tax rate under Section 42.252 to be a rate that would
entitle the district to an amount of state and local funds per
weighted student in average daily attendance in the current year,
using the basic allotment under Subsection (a), equal to the amount
of state and local funds to which the district would have been
entitled under Chapter 41 and this chapter for the current school
year if the guaranteed level under Subsection (a) had remained at
$5,140.
SECTION 3. Effective September 1, 2020, Section 42.302,
Education Code, is amended by amending Subsection (a-1) and adding
Subsection (a-3) to read as follows:
(a-1) 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 by which the district's
maintenance and operations tax rate exceeds the rate equal to the
sum of 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 any additional tax effort included in calculating the
district's compressed tax rate under Section 42.101(a-1); and
(2) the quotient of the maximum basic allotment
allowed under Section 42.101(a) or (b) divided by 100 [$31.95], for
the district's maintenance and operations tax effort that exceeds
the amount of tax effort described by Subdivision (1).
(a-3) For the 2020-2021 school year, the commissioner shall
recompute the calculation of "DTR" under Subsection (a) for each
school district to be a rate that would entitle the district to an
amount of state and local funds per weighted student in average
daily attendance in the current year, using the guaranteed level of
state and local funds per cent of tax effort under Subsection
(a-1)(2), equal to the amount of state and local funds to which the
district would have been entitled under this chapter for the
current school year if the guaranteed level under Subsection
(a-1)(2) had remained at $31.95.
SECTION 4. Effective September 1, 2020, Section 45.003,
Education Code, is amended by adding Subsection (g) to read as
follows:
(g) Notwithstanding any other law, the maximum maintenance
tax rate that may be adopted under this section is reduced by the
average reduction in the tax rate under Section 42.252 resulting
from the increase in revenue provided from the funds appropriated
to the foundation school fund under Section 151.803, Tax Code.
SECTION 5. Section 151.051(b), Tax Code, is amended to read
as follows:
(b) The sales tax rate is 7.25 [6-1/4] percent of the sales
price of the taxable item sold.
SECTION 6. Subchapter M, Chapter 151, Tax Code, is amended
by adding Section 151.803 to read as follows:
Sec. 151.803. ALLOCATION OF CERTAIN REVENUE TO SCHOOL
DISTRICT PROPERTY TAX REDUCTION. Notwithstanding Section 151.801,
the comptroller shall deposit an amount of revenue equal to the
proceeds derived from the collection of taxes imposed by this
chapter attributable to the portion of the tax rate in excess of
6.25 percent of the sales price of the taxable item sold to the
credit of an account in the foundation school fund. Money credited
to the account may be appropriated only to the Texas Education
Agency for use by the commissioner of education to provide property
tax relief by increasing the basic allotment, equalized wealth
level, and guaranteed level under Chapters 41 and 42, Education
Code, and requiring the compression of property tax rates.
SECTION 7. A school district shall use the revenues derived
from the increase in the equalized wealth level in Section 41.002,
Education Code, as amended by this Act, the basic allotment under
Section 42.101(a-3), Education Code, as added by this Act, and the
guaranteed level in Section 42.302, Education Code, as amended by
this Act, to reduce the district's tax rate for maintenance and
operations for the 2020-2021 and 2021-2022 school years. The
commissioner shall adopt rules regarding the operation and
enforcement of this section.
SECTION 8. For the state fiscal year beginning September 1,
2020, all money credited to the account created under Section
151.803, Tax Code, as added by this Act, preceding or during that
year is appropriated from that account to the Texas Education
Agency to be used by the commissioner of education to increase the
basic allotment, equalized wealth level, and guaranteed level under
Chapters 41 and 42, Education Code, and require the compression of
property tax rates.
SECTION 9. The change in law made by this Act does not
affect taxes imposed before the effective date of this Act, and the
law in effect before that date is continued in effect for purposes
of the liability for and collection of those taxes.
SECTION 10. Except as otherwise provided by this Act, this
Act takes effect January 1, 2020.