Bill Text: TX HB285 | 2017 | 85th Legislature 1st Special Session | Introduced

Bill Title: Relating to elimination of certain property taxes for school district maintenance and operations and providing public education funding through an increase in the state sales and use tax rate.

Sponsorship: Partisan Bill (Republican 1)

Status: (Introduced - Dead) 2017-08-02 - Left pending in committee [HB285 Detail]

Download: Texas-2017-HB285-Introduced.html
  85S10628 CAE/CJC-D
 
  By: Murr H.B. No. 285
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to elimination of certain property taxes for school
  district maintenance and operations and providing public education
  funding through an increase in the state sales and use tax rate.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
  ARTICLE 1. PUBLIC SCHOOL FINANCE
         SECTION 1.01.  Section 21.402(a), Education Code, as
  effective September 1, 2017, is amended to read as follows:
         (a)  Except as provided by Subsection (e-1) or (f), a school
  district must pay each classroom teacher, full-time librarian,
  full-time school 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 FS
  where:
         "MS" is the minimum monthly salary;
         "SF" is the applicable salary factor specified by Subsection
  (c); and
         "FS" is the amount, as determined by the commissioner under
  Subsection (b), of the basic allotment as provided by Section
  42.101(a) or (b) [for a school district with a maintenance and
  operations tax rate at least equal to the state maximum compressed
  tax rate, as defined by Section 42.101(a)].
         SECTION 1.02.  Section 29.008(b), Education Code, is amended
  to read as follows:
         (b)  Except as provided by Subsection (c), costs of an
  approved contract for residential placement may be paid from a
  combination of federal and[,] state[, and local] funds. [The local
  share of the total contract cost for each student is that portion of
  the local tax effort that exceeds the district's local fund
  assignment under Section 42.252, divided by the average daily
  attendance in the district. If the contract involves a private
  facility, the state share of the total contract cost is that amount
  remaining after subtracting the local share. If the contract
  involves a public facility, the state share is that amount
  remaining after subtracting the local share from the portion of the
  contract that involves the costs of instructional and related
  services. For purposes of this subsection, "local tax effort"
  means the total amount of money generated by taxes imposed for debt
  service and maintenance and operation less any amounts paid into a
  tax increment fund under Chapter 311, Tax Code.]
         SECTION 1.03.  Sections 29.203(b) and (g), Education Code,
  are 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. A [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.
         (g)  In this section, "guaranteed[:
               [(1)     "Equalized wealth level" has the meaning assigned
  by Section 41.001.
               [(2)  "Guaranteed] wealth level" means a wealth per
  student equal to the dollar amount guaranteed level of state and
  local funds per weighted student per cent of tax effort, as provided
  by Section 42.302, multiplied by 10,000.
               [(3)     "Wealth per student" has the meaning assigned by
  Section 41.001.]
         SECTION 1.04.  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 enrichment [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 1.05.  Section 42.101(a), Education Code, is 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].
         SECTION 1.06.  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 an equalized
  uniform school district effort;
               [(2)]  ad valorem tax revenue generated by local school
  district effort as provided by Subchapter F [in excess of the
  equalized uniform school district effort];
               (2) [(3)]  state available school funds distributed in
  accordance with law; and
               (3) [(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 1.07.  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 1.08.  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 1.09.  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 from [as
  follows]:
               (1)  [reimbursement for a school district not required
  to take action under Chapter 41 may be provided from:
                     [(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 1.10.  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 1.11.  Section 42.253(h), Education Code, as
  effective September 1, 2017, 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 1.12.  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 1.13.  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 1.14.  Section 42.260(b), Education Code, as
  effective September 1, 2017, 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 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 1.15.  Sections 42.302(a), (a-1), (a-2), (b), and
  (d), 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 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 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 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)  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 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)  $31.95, for the district's enrichment [maintenance
  and operations] tax effort that exceeds the amount of tax effort
  described by Subdivision (1).
         (a-2)  The limitation on district enrichment tax rate
  ("DTR") under Section 42.303 does not apply to the district's
  [maintenance and operations] tax effort described by Subsection
  (a-1)(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.
         (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
  enrichment 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.
         SECTION 1.16.  Section 42.303, Education Code, is amended to
  read as follows:
         Sec. 42.303.  LIMITATION ON ENRICHMENT TAX RATE. The
  district enrichment tax rate ("DTR") under Section 42.302 may not
  exceed $0.17 [the amount] per $100 of valuation [by which the
  maximum rate permitted under Section 45.003 exceeds the rate used
  to determine the district's local share under Section 42.252, or a
  greater amount for any year provided by appropriation].
         SECTION 1.17.  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)  enrichment [maintenance and operations];
                     (B)  debt service; and
                     (C)  total expenditures;
               (3)  contain a section entitled "Total Appraised Value
  and Total Taxable Value," which must show the total appraised value
  and the total taxable value of all property and the total appraised
  value and the total taxable value of new property taxable by the
  district in the preceding tax year and the current tax year as
  calculated under Section 26.04, Tax Code;
               (4)  contain a statement of the total amount of the
  outstanding and unpaid bonded indebtedness of the school district;
               (5)  contain a section entitled "Comparison of Proposed
  Rates with Last Year's Rates," which must:
                     (A)  show in rows the tax rates described by
  Subparagraphs (i)-(iii), expressed as amounts per $100 valuation of
  property, for columns entitled "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 funds
  [maintenance and operations taxes and state funds distributed under
  Chapter 42] per student in average daily attendance for the
  applicable school year that was available to the district in the
  preceding school year; and
                                 (b)  in the case of "Interest & Sinking
  Fund," is the tax rate that, when applied to the current taxable
  value for the district, as certified by the chief appraiser under
  Section 26.01, Tax Code, and as adjusted to reflect changes made by
  the chief appraiser as of the time the notice is prepared, and when
  multiplied by the district's anticipated collection rate, would
  impose taxes in an amount that, when added to state funds to be
  distributed to the district under Chapter 46 and any excess taxes
  collected to service the district's debt during the preceding tax
  year but not used for that purpose during that year, would provide
  the amount required to service the district's debt; and
                           (iii)  the "Proposed Rate";
                     (B)  contain fourth and fifth columns aligned with
  the columns required by Paragraph (A) that show, for each row
  required by Paragraph (A):
                           (i)  the "Local Revenue per Student," which
  is computed by multiplying the district's total taxable value of
  property, as certified by the chief appraiser for the applicable
  school year under Section 26.01, Tax Code, and as adjusted to
  reflect changes made by the chief appraiser as of the time the
  notice is prepared, by the total tax rate, and dividing the product
  by the number of students in average daily attendance in the
  district for the applicable school year; and
                           (ii)  the "State Revenue per Student," which
  is computed by determining the amount of state aid received or to be
  received by the district under Chapters 42, 43, and 46 and dividing
  that amount by the number of students in average daily attendance in
  the district for the applicable school year; and
                     (C)  contain an asterisk after each calculation
  for "Interest & Sinking Fund" and a footnote to the section that, in
  reduced type, states "The Interest & Sinking Fund tax revenue is
  used to pay for bonded indebtedness on construction, equipment, or
  both. The bonds, and the tax rate necessary to pay those bonds,
  were approved by the voters of this district.";
               (6)  contain a section entitled "Comparison of Proposed
  Levy with Last Year's Levy on Average Residence," which must:
                     (A)  show in rows the information described by
  Subparagraphs (i)-(iv), rounded to the nearest dollar, for columns
  entitled "Last Year" and "This Year":
                           (i)  "Average Market Value of Residences,"
  determined using the same group of residences for each year;
                           (ii)  "Average Taxable Value of Residences,"
  determined after taking into account the limitation on the
  appraised value of residences under Section 23.23, Tax Code, and
  after subtracting all homestead exemptions applicable in each year,
  other than exemptions available only to disabled persons or persons
  65 years of age or older or their surviving spouses, and using the
  same group of residences for each year;
                           (iii)  "Last Year's Rate Versus Proposed
  Rate per $100 Value"; and
                           (iv)  "Taxes Due on Average Residence,"
  determined using the same group of residences for each year; and
                     (B)  contain the following information:
  "Increase (Decrease) in Taxes" expressed in dollars and cents,
  which is computed by subtracting the "Taxes Due on Average
  Residence" for the preceding tax year from the "Taxes Due on Average
  Residence" for the current tax year;
               (7)  contain the following statement in bold print:
  "Under state law, the dollar amount of school taxes imposed on the
  residence of a person 65 years of age or older or of the surviving
  spouse of such a person, if the surviving spouse was 55 years of age
  or older when the person died, may not be increased above the amount
  paid in the first year after the person turned 65, regardless of
  changes in tax rate or property value.";
               (8)  contain the following statement in bold print:
  "Notice of Rollback Rate: The highest tax rate the district can
  adopt before requiring voter approval at an election is (the school
  district rollback rate determined under Section 26.08, Tax Code).
  This election will be automatically held if the district adopts a
  rate in excess of the rollback rate of (the school district rollback
  rate)."; and
               (9)  contain a section entitled "Fund Balances," which
  must include the estimated amount of interest and sinking fund
  balances and the estimated amount of maintenance and operation or
  general fund balances remaining at the end of the current fiscal
  year that are not encumbered with or by corresponding debt
  obligation, less estimated funds necessary for the operation of the
  district before the receipt of the first payment under Chapter 42 in
  the succeeding school year.
         (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 1.18.  The heading to Subchapter A, Chapter 45,
  Education Code, is amended to read as follows:
  SUBCHAPTER A. TAX BONDS AND ENRICHMENT [MAINTENANCE] TAXES
         SECTION 1.19.  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 further
  enrichment [maintenance] of public schools in the district, subject
  to Section 45.003.
         SECTION 1.20.  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 taxes for the enrichment [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 1.21.  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 maintenance purposes for specific
  past[, current, and future] school years or levied for enrichment
  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 1.22.  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 or nonnegotiable 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 expenditures relating to notes issued to refund notes
  previously issued under this section if the refunding notes are
  coterminous with the refunded obligation. The term also 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 1.23.  Section 45.109(c), Education Code, is amended
  to read as follows:
         (c)  The consideration for a contract under this section may
  be paid from any source available to the independent school
  district. [If voted as provided by this section, the district may
  pledge to the payment of the contract an annual maintenance tax in
  an amount sufficient, without limitation, to provide all of the
  consideration. If voted and pledged, the maintenance tax shall be
  assessed, levied, and collected annually in the same manner as
  provided by general law applicable to independent school districts
  for other maintenance taxes.]
         SECTION 1.24.  Section 45.156(c), Education Code, is amended
  to read as follows:
         (c)  The consideration payable by the district under a
  contract may be paid from any source available to the district. [If
  voted, the district may pledge to the payment of the contract an
  annual maintenance tax in an amount sufficient, without limitation,
  to provide all or part of the consideration. If voted and pledged,
  the maintenance tax shall be assessed, levied, and collected
  annually in the same manner as provided by general law applicable to
  independent school districts for other maintenance taxes. A
  maintenance tax may not be pledged to the payment of any contract or
  assessed, levied, or collected unless an election is held in the
  district, and the maintenance tax for that purpose is favorably
  voted by a majority of the qualified voters of the district. The
  election order for an election under this subsection must include
  the polling place or places and any other matters considered
  advisable by the board of trustees.]
         SECTION 1.25.  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 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 1.26.  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 1.27.  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 1.28.  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 1.29.  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 1.30.  Section 26.05(b), Tax Code, is amended to
  read as follows:
         (b)  A taxing unit may not impose property taxes in any year
  until the governing body has adopted a tax rate for that year, and
  the annual tax rate must be set by ordinance, resolution, or order,
  depending on the method prescribed by law for adoption of a law by
  the governing body. The vote on the ordinance, resolution, or order
  setting the tax rate must be separate from the vote adopting the
  budget. For a taxing unit other than a school district, the vote on
  the ordinance, resolution, or order setting a tax rate that exceeds
  the effective tax rate must be a record vote, and at least 60
  percent of the members of the governing body must vote in favor of
  the ordinance, resolution, or order. For a school district, the
  vote on the ordinance, resolution, or order setting a tax rate that
  exceeds the sum of the effective [maintenance and operations] tax
  rate of the district [as determined under Section 26.08(i)] and the
  district's current debt rate must be a record vote, and at least 60
  percent of the members of the governing body must vote in favor of
  the ordinance, resolution, or order. A motion to adopt an
  ordinance, resolution, or order setting a tax rate that exceeds the
  effective tax rate must be made in the following form: "I move that
  the property tax rate be increased by the adoption of a tax rate of
  (specify tax rate), which is effectively a (insert percentage by
  which the proposed tax rate exceeds the effective tax rate) percent
  increase in the tax rate." If the ordinance, resolution, or order
  sets a tax rate that, if applied to the total taxable value, will
  impose an amount of taxes to fund maintenance and operation
  expenditures of the taxing unit that exceeds the amount of taxes
  imposed for that purpose in the preceding year, the taxing unit
  must:
               (1)  include in the ordinance, resolution, or order in
  type larger than the type used in any other portion of the document:
                     (A)  the following statement: "THIS TAX RATE WILL
  RAISE MORE TAXES FOR MAINTENANCE AND OPERATIONS THAN LAST YEAR'S
  TAX RATE."; and
                     (B)  if the tax rate exceeds the effective
  maintenance and operations rate, the following statement: "THE TAX
  RATE WILL EFFECTIVELY BE RAISED BY (INSERT PERCENTAGE BY WHICH THE
  TAX RATE EXCEEDS THE EFFECTIVE MAINTENANCE AND OPERATIONS RATE)
  PERCENT AND WILL RAISE TAXES FOR MAINTENANCE AND OPERATIONS ON A
  $100,000 HOME BY APPROXIMATELY $(Insert amount)."; and
               (2)  include on the home page of any Internet website
  operated by the unit:
                     (A)  the following statement: "(Insert name of
  unit) ADOPTED A TAX RATE THAT WILL RAISE MORE TAXES FOR MAINTENANCE
  AND OPERATIONS THAN LAST YEAR'S TAX RATE"; and
                     (B)  if the tax rate exceeds the effective
  maintenance and operations rate, the following statement: "THE TAX
  RATE WILL EFFECTIVELY BE RAISED BY (INSERT PERCENTAGE BY WHICH THE
  TAX RATE EXCEEDS THE EFFECTIVE MAINTENANCE AND OPERATIONS RATE)
  PERCENT AND WILL RAISE TAXES FOR MAINTENANCE AND OPERATIONS ON A
  $100,000 HOME BY APPROXIMATELY $(Insert amount)."
         SECTION 1.31.  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 1.32.  The following provisions are repealed:
               (1)  Section 13.054(f), Education Code;
               (2)  Chapter 41, Education Code;
               (3)  Sections 42.101(a-1) and (c), Education Code;
               (4)  Section 42.158(e), Education Code;
               (5)  Section 42.160(b), Education Code;
               (6)  Section 42.2516, Education Code, as effective
  September 1, 2017;
               (7)  Sections 42.2518 and 42.252, Education Code;
               (8)  Section 42.2524(f), Education Code;
               (9)  Section 42.2528(b), Education Code;
               (10)  Section 42.262, Education Code;
               (11)  Section 42.302(f), Education Code;
               (12)  Section 45.003(f), Education Code;
               (13)  Section 45.109(d), Education Code;
               (14)  Section 45.111(b), Education Code;
               (15)  Sections 21.02(b) and (c), Tax Code;
               (16)  Section 25.25(k), Tax Code;
               (17)  Section 26.08(i), Tax Code, as effective
  September 1, 2017;
               (18)  Sections 26.08(n), (o), and (p), Tax Code; and
               (19)  Section 312.210(c), Tax Code.
  ARTICLE 2. STATE SALES AND USE TAX INCREASE FOR PUBLIC EDUCATION
         SECTION 2.01.  Section 151.051(b), Tax Code, is amended to
  read as follows:
         (b)  The sales tax rate is 12 [6-1/4] percent of the sales
  price of the taxable item sold.
         SECTION 2.02.  Section 151.801, Tax Code, is amended by
  amending Subsection (a) and adding Subsection (b-1) to read as
  follows:
         (a)  Except for the amounts allocated under Subsections (b),
  (b-1), (c), and (c-2), all proceeds from the collection of the taxes
  imposed by this chapter shall be deposited to the credit of the
  general revenue fund.
         (b-1)  Notwithstanding any other provision of this section,
  an amount of revenue under this chapter equal to the proceeds, other
  than the proceeds allocated under Subsection (b), 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 shall be deposited to the credit of the
  foundation school fund.
         SECTION 2.03.  The changes in law made by this article do not
  affect taxes imposed before the effective date of this article, and
  the law in effect before that date is continued in effect for
  purposes of the liability for and collection of those taxes.
  ARTICLE 3. APPLICABILITY; EFFECTIVE DATE
         SECTION 3.01.  (a) Chapter 42, Education Code, as amended by
  this Act, applies beginning with the 2019-2020 school year.
         (b)  The repeal by this Act of Chapter 41, Education Code,
  does not affect the obligations of a school district under that
  chapter, as it existed before repeal by this Act, for the 2018-2019
  school year.
         SECTION 3.02.  This Act takes effect January 1, 2019.

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