Bill Text: TX SB1686 | 2013-2014 | 83rd Legislature | Introduced


Bill Title: Relating to public school finance matters, including the imposition of a state ad valorem tax for elementary and secondary school purposes and a school district ad valorem enrichment tax.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2013-04-04 - Referred to s/c on Fiscal Matters by Chair [SB1686 Detail]

Download: Texas-2013-SB1686-Introduced.html
  83R7700 SMH/KKA-D
 
  By: Duncan S.B. No. 1686
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to public school finance matters, including the imposition
  of a state ad valorem tax for elementary and secondary school
  purposes and a school district ad valorem enrichment tax.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
  ARTICLE 1.  STATE AD VALOREM TAX
         SECTION 1.01.  Chapter 45, Education Code, is amended by
  adding Subchapter K to read as follows:
  SUBCHAPTER K. STATE AD VALOREM TAX
         Sec. 45.351.  STATE AD VALOREM TAX.  (a)  As provided by
  Section 3-a, Article VII, Texas Constitution, a state ad valorem
  tax for elementary and secondary school purposes is imposed on all
  taxable property in this state.
         (b)  The tax is imposed at the rate of $1 per $100 of taxable
  value of property subject to the tax.
         (b-1)  This subsection applies only to the taxation by the
  state of property that has taxable situs in a school district that
  imposed a maintenance and operations ad valorem tax for the 2013 tax
  year at a rate less than $1 per $100 of taxable value of property
  subject to the tax. Notwithstanding Subsection (b), for the 2014
  tax year the state ad valorem tax is imposed at the rate equal to the
  sum of the maintenance and operations ad valorem tax rate of the
  district for the 2013 tax year and 20 percent of the difference
  between the rate of $1 per $100 of taxable value and the maintenance
  and operations ad valorem tax rate of the district for the 2013 tax
  year. For each of the subsequent three tax years, the state ad
  valorem tax is imposed at the rate equal to the sum of the rate for
  the preceding tax year and 20 percent of the difference between the
  rate of $1 per $100 of taxable value and the maintenance and
  operations ad valorem tax rate of the district for the 2013 tax
  year. This subsection expires January 1, 2018.
         (c)  Except as otherwise provided by law, the state shall be
  treated, for purposes of the state ad valorem tax, as a taxing unit
  under Title 1, Tax Code.
         Sec. 45.352.  APPRAISAL OF PROPERTY. (a) Property subject
  to the state ad valorem tax shall be appraised by the appraisal
  district that appraises property for taxation by the school
  district in which the property has taxable situs under Chapter 21,
  Tax Code.
         (b)  Except as otherwise provided by that title, property
  subject to the state ad valorem tax shall be appraised in the manner
  provided by Title 1, Tax Code, for the appraisal of property that is
  subject to ad valorem taxation by a school district.
         Sec. 45.353.  TAX COLLECTION. (a) The assessor and
  collector for each school district shall assess and collect, as
  applicable, state ad valorem taxes imposed on property included on
  the appraisal roll for state taxation certified to the comptroller
  and to the assessor for that school district under Section 26.01,
  Tax Code, unless the governing body of the school district
  contracts with an official, taxing unit, or political subdivision
  of this state for the assessment or collection of the ad valorem
  taxes of the district, in which event the official, taxing unit, or
  political subdivision that assesses or collects taxes for the
  school district shall also assess or collect, as applicable, the
  state ad valorem taxes.
         (b)  Each assessor or collector of state ad valorem taxes is
  entitled to be reimbursed by the comptroller for the actual costs
  incurred by the assessor or collector in assessing or collecting
  state ad valorem taxes. However, an assessor or collector is not
  entitled to be reimbursed for any amount that is greater than the
  additional incremental costs incurred in assessing or collecting
  the state ad valorem taxes.
         (c)  The comptroller shall:
               (1)  prescribe methods of accounting for and remitting
  state ad valorem taxes;
               (2)  prescribe methods for establishing an assessor's
  or collector's additional incremental costs incurred in assessing
  or collecting state ad valorem taxes;
               (3)  prescribe and furnish forms for periodic reports
  relating to state ad valorem taxes; and
               (4)  periodically examine the records of each assessor
  or collector of state ad valorem taxes to verify the accuracy of any
  reports required under this subsection.
         (d)  The comptroller may require an assessor or collector of
  state ad valorem taxes to give a bond to the state, conditioned on
  the faithful performance of the person's duties as assessor or
  collector, in the amount the comptroller considers appropriate to
  protect the state from potential losses with regard to assessment
  or collection of state ad valorem taxes.
         Sec. 45.354.  DUTIES AND POWERS OF COMPTROLLER. (a) Except
  as otherwise provided by this subchapter, a duty imposed on or power
  granted to the governing body of a taxing unit by Title 1, Tax Code,
  may, for purposes of the state ad valorem tax, be exercised by the
  comptroller. A reference to the presiding officer of a governing
  body in Title 1, Tax Code, is a reference to the comptroller for the
  purposes of the state ad valorem tax.
         (b)  The comptroller may delegate to the assessor or
  collector for a school district any function of the comptroller
  with respect to the assessment or collection of the state ad valorem
  tax and may designate a school district assessor or collector as the
  comptroller's agent for purposes of administration of assessment or
  collection of the state ad valorem tax.
         Sec. 45.355.  ADMINISTRATION AND REFUND ACCOUNTS. The
  comptroller shall deposit to the credit of the general revenue fund
  in appropriately designated accounts an amount of revenue collected
  from the state ad valorem tax to pay for the expenses of
  administering this subchapter and for the payment of tax refunds
  that may become payable.
         Sec. 45.356.  NONAPPLICABILITY OF CERTAIN OTHER TAX LAWS.
  Title 2, Tax Code, does not apply to the state ad valorem tax.
         Sec. 45.357.  TAX INCREMENT FINANCING. Except as otherwise
  provided by Section 311.0131, Tax Code, the state may not pay any
  portion of the tax increment produced by the state into the tax
  increment fund for a reinvestment zone designated under Chapter
  311, Tax Code.
         Sec. 45.358.  TAX ABATEMENT. (a)  Except as otherwise
  provided by this section, the state may not participate in tax
  abatement under Section 311.0125 or 311.013(g) or Chapter 312, Tax
  Code.
         (b)  If school district property taxes on property located in
  the taxing jurisdiction of a school district are abated under a tax
  abatement agreement entered into by the school district under
  Chapter 312, Tax Code, the terms of the agreement regarding the
  portion of the value of the property that is to be exempted from
  taxation in each year of the agreement apply to the taxation of the
  property by the state. A modification of the agreement by the
  parties to the agreement under Section 312.208, Tax Code, that
  increases the portion of the value of the property that is to be
  exempted from taxation or that extends the duration of the
  agreement does not apply to the imposition of the state ad valorem
  tax unless the modification was entered into before January 1,
  2013.
         SECTION 1.02.  Subchapter A, Chapter 6, Tax Code, is amended
  by adding Section 6.038 to read as follows:
         Sec. 6.038.  STATE PARTICIPATION. (a) The comptroller and
  the state do not participate in the election of the board of
  directors of an appraisal district, the governance or management of
  the district, or the determination of the district's finances and
  budget.
         (b)  The comptroller by rule shall establish guidelines and
  criteria under which, if the comptroller finds that generally
  accepted appraisal standards and practices were not used by the
  appraisal district appraising property subject to the state ad
  valorem tax or that the appraised values assigned to property
  subject to that tax are invalid, the comptroller may:
               (1)  withhold payment of all or part of the portion of
  the amount of the budget of the appraisal district that is allocated
  to the state until the district takes appropriate actions to remedy
  the deficiencies in appraisals found by the comptroller; or
               (2)  direct that all or any part of the portion of the
  amount of the budget of the district allocated to the state be
  applied to remedying those deficiencies.
         SECTION 1.03.  Section 6.06(d), Tax Code, is amended to read
  as follows:
         (d)  The state and each [Each] taxing unit participating in
  the district are each [is] allocated a portion of the amount of the
  budget equal to the proportion that the total dollar amount of
  property taxes imposed in the district by the state or taxing unit
  for the tax year in which the budget proposal is prepared bears to
  the sum of the total dollar amount of property taxes imposed in the
  district by the state and each participating unit for that year.
  For purposes of this subsection, only state ad valorem taxes
  imposed in a school district or portion of a school district for
  which the appraisal district appraises property for taxation are
  considered as state ad valorem taxes imposed in the district. If a
  taxing unit participates in two or more districts, only the taxes
  imposed in a district are used to calculate the unit's cost
  allocations in that district. If the number of real property
  parcels in a taxing unit is less than 5 percent of the total number
  of real property parcels in the district and the taxing unit imposes
  in excess of 25 percent of the total amount of the property taxes
  imposed in the district by all of the participating taxing units for
  a year, the unit's allocation may not exceed a percentage of the
  appraisal district's budget equal to three times the unit's
  percentage of the total number of real property parcels appraised
  by the district.
         SECTION 1.04.  Sections 11.13(b) and (c), Tax Code, are
  amended to read as follows:
         (b)  An adult is entitled to exemption from taxation by the
  state for elementary and secondary public school purposes or by a
  school district of $15,000 of the appraised value of the adult's
  residence homestead, except that $10,000 of the exemption does not
  apply to an entity operating under former Chapter 17, 18, 25, 26,
  27, or 28, Education Code, as those chapters existed on May 1, 1995,
  as permitted by Section 11.301, Education Code.
         (c)  In addition to the exemption provided by Subsection (b)
  [of this section], an adult who is disabled or is 65 years of age or
  older is entitled to an exemption from taxation by the state for
  elementary and secondary public school purposes or by a school
  district of $10,000 of the appraised value of the adult's [his]
  residence homestead.
         SECTION 1.05.  Section 11.14, Tax Code, is amended by adding
  Subsection (f) to read as follows:
         (f)  Subsection (c) does not apply to the comptroller or to
  the state ad valorem tax.
         SECTION 1.06.  The heading to Section 11.26, Tax Code, is
  amended to read as follows:
         Sec. 11.26.  LIMITATION OF SCHOOL TAXES [TAX] ON HOMESTEADS
  OF INDIVIDUALS WHO ARE ELDERLY OR DISABLED.
         SECTION 1.07.  Section 11.26, Tax Code, is amended by
  amending Subsections (a), (a-1), (b), (g), (h), (j), (k), and (o)
  and adding Subsection (g-1) to read as follows:
         (a)  The tax officials shall appraise the property to which
  this section applies and calculate taxes as on other property, but
  if the tax so calculated exceeds the limitation imposed by this
  section, the tax imposed is the amount of the tax as limited by this
  section, except as otherwise provided by this section. The state or
  a [A] school district may not increase the total annual amount of ad
  valorem tax it imposes on the residence homestead of an individual
  65 years of age or older or on the residence homestead of an
  individual who is disabled, as defined by Section 11.13, above the
  amount of the tax it imposed in the first tax year in which the
  individual qualified that residence homestead for the applicable
  exemption provided by Section 11.13(c) for an individual who is 65
  years of age or older or is disabled. If the individual qualified
  that residence homestead for the exemption after the beginning of
  that first year and the residence homestead remains eligible for
  the same exemption for the next year, and if the state or school
  district taxes imposed on the residence homestead in the next year
  are less than the amount of taxes the state or school district, as
  applicable, imposed in that first year, the state or [a] school
  district may not subsequently increase the total annual amount of
  ad valorem taxes it imposes on the residence homestead above the
  amount it imposed in the year immediately following the first year
  for which the individual qualified that residence homestead for the
  same exemption, except as provided by Subsection (b). [If the first
  tax year the individual qualified the residence homestead for the
  exemption provided by Section 11.13(c) for individuals 65 years of
  age or older was a tax year before the 1997 tax year, the amount of
  the limitation provided by this section is the amount of tax the
  school district imposed for the 1996 tax year less an amount equal
  to the amount determined by multiplying $10,000 times the tax rate
  of the school district for the 1997 tax year, plus any 1997 tax
  attributable to improvements made in 1996, other than improvements
  made to comply with governmental regulations or repairs.]
         (a-1)  If the first tax year the individual qualified the
  residence homestead for the exemption provided by Section 11.13(c)
  for individuals who are disabled or are 65 years of age or older was
  a tax year before the 2014 tax year, except as provided by
  Subsection (b):
               (1)  the amount of the limitation provided by this
  section on state taxes is the amount of tax the school district in
  which the property is located imposed for the 2013 tax year plus any
  2014 state taxes attributable to improvements made in 2013, other
  than improvements made to comply with governmental regulations or
  repairs; and
               (2)  the amount of the limitation provided by this
  section on school district taxes is the amount of tax the school
  district imposed for the 2013 tax year less the amount of state
  taxes imposed in the 2014 tax year, plus any 2014 school taxes
  attributable to improvements made in 2013, other than improvements
  made to comply with governmental regulations or repairs.
  [Notwithstanding the other provisions of this section, if in the
  2007 tax year an individual qualifies for a limitation on tax
  increases provided by this section on the individual's residence
  homestead and the first tax year the individual or the individual's
  spouse qualified for an exemption under Section 11.13(c) for the
  same homestead was the 2006 tax year, the amount of the limitation
  provided by this section on the homestead in the 2007 tax year is
  equal to the amount computed by:
               [(1)     multiplying the amount of tax the school district
  imposed on the homestead in the 2006 tax year by a fraction the
  numerator of which is the tax rate of the district for the 2007 tax
  year and the denominator of which is the tax rate of the district
  for the 2006 tax year; and
               [(2)     adding any tax imposed in the 2007 tax year
  attributable to improvements made in the 2006 tax year as provided
  by Subsection (b) to the lesser of the amount computed under
  Subdivision (1) or the amount of tax the district imposed on the
  homestead in the 2006 tax year.]
         (b)  If an individual makes improvements to the individual's
  residence homestead, other than improvements required to comply
  with governmental requirements or repairs, the state or the school
  district may increase the tax on the homestead in the first year the
  value of the homestead is increased on the appraisal roll because of
  the enhancement of value by the improvements. The amount of the tax
  increase is determined by applying the current tax rate to the
  difference in the assessed value of the homestead with the
  improvements and the assessed value it would have had without the
  improvements. A limitation imposed by this section then applies to
  the increased amount of tax until more improvements, if any, are
  made.
         (g)  Except as provided by Subsection (b), if an individual
  who receives a limitation on tax increases imposed by this section,
  including a surviving spouse who receives a limitation under
  Subsection (i), subsequently qualifies a different residence
  homestead for the same exemption under Section 11.13, the state or a
  school district may not impose ad valorem taxes on the subsequently
  qualified homestead in a year in an amount that exceeds the amount
  of taxes the state or the school district would have imposed on the
  subsequently qualified homestead in the first year in which the
  individual receives that same exemption for the subsequently
  qualified homestead had the limitation on tax increases imposed by
  this section not been in effect, multiplied by a fraction the
  numerator of which is the total amount of [school district] taxes
  imposed by the state or the school district, as applicable, on the
  former homestead in the last year in which the individual received
  that same exemption for the former homestead and the denominator of
  which is the total amount of taxes the state or the school district,
  as applicable, [taxes that] would have [been] imposed on the former
  homestead in the last year in which the individual received that
  same exemption for the former homestead had the limitation on tax
  increases imposed by this section not been in effect.
         (g-1)  Subsection (g) does not apply to a residence homestead
  to which this subsection applies. Except as provided by Subsection
  (b), if an individual who receives a limitation on tax increases
  imposed by this section in a tax year before the 2014 tax year,
  including a surviving spouse who receives a limitation under
  Subsection (i), subsequently qualifies a different residence
  homestead for an exemption under Section 11.13(c) and the first
  year in which the subsequently qualified homestead qualifies for
  the exemption is a tax year after the 2013 tax year:
               (1)  the state may not impose taxes on the subsequently
  qualified homestead in an amount that exceeds the amount of taxes
  the state would have imposed on the subsequently qualified
  homestead in the first year in which the individual receives that
  exemption for the subsequently qualified homestead had the
  limitation on tax increases imposed by this section not been in
  effect, multiplied by a fraction the numerator of which is the total
  amount of school district taxes imposed on the former homestead in
  the last year in which the individual received that exemption for
  the former homestead and the denominator of which is the total
  amount of school district taxes that would have been imposed on the
  former homestead in the last year in which the individual received
  that exemption for the former homestead had the limitations on tax
  increases imposed by this section not been in effect; and
               (2)  the school district may not impose taxes on the
  subsequently qualified homestead in an amount that exceeds the
  positive amount, if any, by which the limitation on state taxes
  calculated under Subdivision (1) exceeds the amount of state taxes
  imposed in the first year in which the subsequently qualified
  homestead receives the exemption.
         (h)  An individual who receives a limitation on tax increases
  under this section, including a surviving spouse who receives a
  limitation under Subsection (i), and who subsequently qualifies a
  different residence homestead for an exemption under Section
  11.13(c) [11.13], or an agent of the individual, is entitled to
  receive from the chief appraiser of the appraisal district in which
  the former homestead was located a written certificate providing
  the information necessary to determine whether the individual may
  qualify for that same limitation on the subsequently qualified
  homestead under Subsection (g) or (g-1) and to calculate the amount
  of taxes the state and the school district may impose on the
  subsequently qualified homestead.
         (j)  If an individual who qualifies for an exemption provided
  by Section 11.13(c) for an individual 65 years of age or older dies
  in the first year in which the individual qualified for the
  exemption and the individual first qualified for the exemption
  after the beginning of that year, except as provided by Subsection
  (k), the amount to which the surviving spouse's state or school
  district taxes are limited under Subsection (i) is the amount of
  state or school district taxes, as applicable, imposed on the
  residence homestead in that year determined as if the individual
  qualifying for the exemption had lived for the entire year.
         (k)  If in the first tax year after the year in which an
  individual dies in the circumstances described by Subsection (j)
  the amount of [school district] taxes imposed by the state or the
  school district on the residence homestead of the surviving spouse
  is less than the amount of state or school district taxes, as
  applicable, imposed in the preceding year as limited by Subsection
  (j), in a subsequent tax year the surviving spouse's state or school
  district taxes on that residence homestead are limited to the
  amount of taxes imposed by the state or the school district, as
  applicable, in that first tax year after the year in which the
  individual dies.
         (o)  Notwithstanding Subsections (a)[, (a-3),] and (b), an
  improvement to property that would otherwise constitute an
  improvement under Subsection (b) is not treated as an improvement
  under that subsection if the improvement is a replacement structure
  for a structure that was rendered uninhabitable or unusable by a
  casualty or by wind or water damage. For purposes of appraising the
  property in the tax year in which the structure would have
  constituted an improvement under Subsection (b), the replacement
  structure is considered to be an improvement under that subsection
  only if:
               (1)  the square footage of the replacement structure
  exceeds that of the replaced structure as that structure existed
  before the casualty or damage occurred; or
               (2)  the exterior of the replacement structure is of
  higher quality construction and composition than that of the
  replaced structure.
         SECTION 1.08.  Section 21.03(a), Tax Code, is amended to
  read as follows:
         (a)  If personal property that is taxable by this state or a
  taxing unit of this state is used continually outside this state,
  whether regularly or irregularly, the appraisal office shall
  allocate to this state the portion of the total market value of the
  property that fairly reflects its use in this state.
         SECTION 1.09.  Section 21.031(a), Tax Code, is amended to
  read as follows:
         (a)  If a vessel or other watercraft that is taxable by this
  state or a taxing unit of this state is used continually outside
  this state, whether regularly or irregularly, the appraisal office
  shall allocate to this state the portion of the total market value
  of the vessel or watercraft that fairly reflects its use in this
  state. The appraisal office shall not allocate to this state the
  portion of the total market value of the vessel or watercraft that
  fairly reflects its use in another state or country, in
  international waters, or beyond the Gulfward boundary of this
  state.
         SECTION 1.10.  Sections 22.28(a) and (b), Tax Code, are
  amended to read as follows:
         (a)  Except as otherwise provided by Section 22.30, the chief
  appraiser shall impose a penalty on a person who fails to timely
  file a rendition statement or property report required by this
  chapter in an amount equal to 10 percent of the total amount of
  taxes imposed on the property for that year by the state, if the
  property has taxable situs in a school district or portion of a
  school district for which the appraisal district appraises property
  for taxation, and by the other taxing units participating in the
  appraisal district.  The chief appraiser shall deliver by first
  class mail a notice of the imposition of the penalty to the
  person.  The notice may be delivered with a notice of appraised
  value provided under Section 25.19, if practicable.
         (b)  The chief appraiser shall certify to the assessor for
  the state and each other taxing unit participating in the appraisal
  district that imposes taxes on the property that a penalty imposed
  under this chapter has become final.  The assessor shall add the
  amount of the penalty to the original amount of tax imposed on the
  property and shall include that amount in the tax bill for that
  year.  The penalty becomes part of the tax on the property and is
  secured by the tax lien that attaches to the property under Section
  32.01.
         SECTION 1.11.  Sections 22.29(a) and (d), Tax Code, are
  amended to read as follows:
         (a)  The chief appraiser shall impose an additional penalty
  on the person equal to 50 percent of the total amount of taxes
  imposed on the property for the tax year of the statement or report
  by the state, if the property has taxable situs in a school district
  or portion of a school district for which the appraisal district
  appraises property for taxation, and by the other taxing units
  participating in the appraisal district if it is finally determined
  by a court that:
               (1)  the person filed a false statement or report with
  the intent to commit fraud or to evade the tax; or
               (2)  the person alters, destroys, or conceals any
  record, document, or thing, or presents to the chief appraiser any
  altered or fraudulent record, document, or thing, or otherwise
  engages in fraudulent conduct, for the purpose of affecting the
  course or outcome of an inspection, investigation, determination,
  or other proceeding before the appraisal district.
         (d)  The chief appraiser may retain a portion of a penalty
  collected under this section, not to exceed 20 percent of the amount
  of the penalty, to cover the chief appraiser's costs of collecting
  the penalty. The chief appraiser shall distribute the remainder of
  the penalty to the state and each other taxing unit participating in
  the appraisal district that imposes taxes on the property in
  proportion to the state's or the taxing unit's share of the total
  amount of taxes imposed on the property by the state and all other
  taxing units participating in the district used to determine the
  amount of the penalty.
         SECTION 1.12.  Section 23.23(a), Tax Code, is amended to
  read as follows:
         (a)  Notwithstanding the requirements of Section 25.18 and
  regardless of whether the appraisal office has appraised the
  property and determined the market value of the property for the tax
  year, an appraisal office may increase the appraised value of a
  residence homestead for a tax year to an amount not to exceed the
  lesser of:
               (1)  the market value of the property for the most
  recent tax year that the market value was determined by the
  appraisal office; or
               (2)  the sum of:
                     (A)  for purposes of taxation by the state, five
  percent of the appraised value of the property for the preceding tax
  year, and for purposes of taxation by any other taxing unit, 10
  percent of the appraised value of the property for the preceding tax
  year;
                     (B)  the appraised value of the property for the
  preceding tax year for purposes of taxation by the applicable
  taxing unit; and
                     (C)  the market value of all new improvements to
  the property.
         SECTION 1.13.  Section 23.46(d), Tax Code, is amended to
  read as follows:
         (d)  A tax lien attaches to the land on the date the sale or
  change of use occurs to secure payment of the additional tax and
  interest imposed by Subsection (c) [of this section] and any
  penalties incurred. The lien exists in favor of the state and all
  taxing units for which the additional tax is imposed.
         SECTION 1.14.  Sections 23.55(b) and (p), Tax Code, are
  amended to read as follows:
         (b)  A tax lien attaches to the land on the date the change of
  use occurs to secure payment of the additional tax and interest
  imposed by this section and any penalties incurred. The lien exists
  in favor of the state and all taxing units for which the additional
  tax is imposed.
         (p)  The sanctions provided by Subsection (a) do not apply to
  real property transferred to an organization described by Section
  11.181(a) if the organization converts the real property to a use
  for which the real property is eligible for an exemption under
  Section 11.181(a). This subsection does not apply to the sanctions
  provided by Subsection (a) in connection with a change in use
  described by this subsection that are due to a county or school
  district or the state unless the governing body of the county or
  school district or the comptroller, as applicable, waives the
  sanctions in the manner required by law for official action by the
  body or comptroller.
         SECTION 1.15.  Section 23.76(b), Tax Code, is amended to
  read as follows:
         (b)  A tax lien attaches to the land on the date the change of
  use occurs to secure payment of the additional tax and interest
  imposed by this section and any penalties incurred. The lien exists
  in favor of the state and all taxing units for which the additional
  tax is imposed.
         SECTION 1.16.  Section 23.86(b), Tax Code, is amended to
  read as follows:
         (b)  A tax lien attaches to the land on the date the change of
  use occurs or the deed restriction expires to secure payment of the
  additional tax and interest imposed by this section and any
  penalties incurred. The lien exists in favor of the state and all
  taxing units for which the additional tax is imposed.
         SECTION 1.17.  Section 23.96(b), Tax Code, is amended to
  read as follows:
         (b)  A tax lien attaches to the property on the date the deed
  restriction expires to secure payment of the additional tax and
  interest imposed by this section and any penalties incurred. The
  lien exists in favor of the state and all taxing units for which the
  additional tax is imposed.
         SECTION 1.18.  Section 23.9807(c), Tax Code, is amended to
  read as follows:
         (c)  A tax lien attaches to the land on the date the change of
  use occurs to secure payment of the additional tax and interest
  imposed by this section and any penalties incurred. The lien exists
  in favor of the state and all taxing units for which the additional
  tax is imposed.
         SECTION 1.19.  Section 25.19(b), Tax Code, is amended to
  read as follows:
         (b)  The chief appraiser shall separate real from personal
  property and include in the notice for each:
               (1)  a list of the taxing units other than the state in
  which the property is taxable and, if the property is appraised by
  the appraisal district for state taxation, a statement that the
  property is subject to the state tax for elementary and secondary
  public school purposes;
               (2)  the appraised value of the property in the
  preceding year;
               (3)  the taxable value of the property in the preceding
  year for:
                     (A)  each taxing unit taxing the property; and
                     (B)  state taxation for elementary and secondary
  public school purposes, if the property is appraised by the
  appraisal district for state taxation;
               (4)  the appraised value of the property for the
  current year and the kind and amount of each partial exemption, if
  any, approved for the current year;
               (5)  if the appraised value is greater than it was in
  the preceding year, the amount of tax that would be imposed on the
  property on the basis of the tax rate for each taxing unit other
  than the state for the preceding year;
               (6)  in italic typeface, the following
  statement:  "The Texas Legislature does not set the amount of your
  local taxes.  Your local property tax burden is decided by your
  locally elected officials, and all inquiries concerning your local
  taxes should be directed to those officials";
               (7)  a detailed explanation of the time and procedure
  for protesting the value;
               (8)  the date and place the appraisal review board will
  begin hearing protests; and
               (9)  a brief explanation that the governing body of
  each local taxing unit decides whether [or not] taxes on the
  property will increase and the appraisal district only determines
  the value of the property.
         SECTION 1.20.  The heading to Section 26.01, Tax Code, is
  amended to read as follows:
         Sec. 26.01.  SUBMISSION OF ROLLS TO STATE AND TAXING UNITS.
         SECTION 1.21.  Sections 26.01(a), (c), and (d), Tax Code,
  are amended to read as follows:
         (a)  By July 25, the chief appraiser shall prepare and
  certify to the assessor for each taxing unit participating in the
  appraisal district that part of the appraisal roll for the
  appraisal district that lists the property taxable by the unit. By
  that date the chief appraiser shall prepare and certify to the
  comptroller and to the assessor for each school district that
  participates in the appraisal district that part of the appraisal
  roll for the appraisal district that lists property for which the
  appraisal district appraises the property for state taxation.  The
  part certified to the comptroller and school district assessor is
  the appraisal roll for state taxes. The part certified to the
  assessor is the appraisal roll for the taxing unit. The chief
  appraiser shall consult with the assessor for each taxing unit and
  the comptroller and notify each taxing unit and the comptroller in
  writing by April 1 of the form in which the roll will be provided to
  each unit and to the comptroller.
         (c)  The chief appraiser shall prepare and certify to the
  assessor for each taxing unit and the comptroller a listing of those
  properties that [which] are taxable by that unit or the state, as
  applicable, but that [which] are under protest and therefore not
  included on the appraisal roll approved by the appraisal review
  board and certified by the chief appraiser. This listing shall
  include the appraised market value, productivity value (if
  applicable), and taxable value as determined by the appraisal
  district and shall also include the market value, taxable value,
  and productivity value (if applicable) as claimed by the property
  owner filing the protest if available. If the property owner does
  not claim a value and the appraised value of the property in the
  current year is equal to or less than its value in the preceding
  year, the listing shall include a reasonable estimate of the market
  value, taxable value, and productivity value (if applicable) that
  would be assigned to the property if the taxpayer's claim is upheld.
  If the property owner does not claim a value and the appraised value
  of the property is higher than its appraised value in the preceding
  year, the listing shall include the appraised market value,
  productivity value (if applicable) and taxable value of the
  property in the preceding year, except that if there is a reasonable
  likelihood that the appraisal review board will approve a lower
  appraised value for the property than its appraised value in the
  preceding year, the chief appraiser shall make a reasonable
  estimate of the taxable value that would be assigned to the property
  if the property owner's claim is upheld. The taxing unit shall use
  the lower value for calculations as prescribed in Sections 26.04
  and 26.041 [of this code].
         (d)  The chief appraiser shall prepare and certify to the
  assessor for each taxing unit and the comptroller a list of those
  properties of which the chief appraiser has knowledge that are
  reasonably likely to be taxable by that unit or the state, as
  applicable, but that are not included on the appraisal roll
  certified to the assessor or the comptroller under Subsection (a)
  or included on the listing certified to the assessor or the
  comptroller under Subsection (c). The chief appraiser shall
  include on the list for each property the market value, appraised
  value, and kind and amount of any partial exemptions as determined
  by the appraisal district for the preceding year and a reasonable
  estimate of the market value, appraised value, and kind and amount
  of any partial exemptions for the current year.  Until the property
  is added to the appraisal roll, the assessor for a [the] taxing unit
  shall include each property on the list in the calculations
  prescribed by Sections 26.04 and 26.041, and for that purpose shall
  use the lower market value, appraised value, or taxable value, as
  appropriate, included on or computed using the information included
  on the list for the property.
         SECTION 1.22.  Chapter 26, Tax Code, is amended by adding
  Section 26.011 to read as follows:
         Sec. 26.011.  PROVISIONS NOT APPLICABLE TO STATE TAX.
  Sections 26.04, 26.041, 26.05, 26.051, 26.06, 26.07, and 26.08 do
  not apply to the state ad valorem tax or to the comptroller.
         SECTION 1.23.  Section 26.09(c), Tax Code, is amended to
  read as follows:
         (c)  The tax is calculated by:
               (1)  subtracting from the appraised value of a property
  as shown on the appraisal roll for a taxing [the] unit or the state
  the amount of any partial exemption allowed the property owner that
  applies to appraised value to determine taxable [net appraised]
  value; and
               (2)  [multiplying the net appraised value by the
  assessment ratio to determine assessed value;
               [(3)     subtracting from the assessed value the amount of
  any partial exemption allowed the property owner to determine
  taxable value; and
               [(4)]  multiplying the taxable value by the applicable
  tax rate.
         SECTION 1.24.  Section 26.12, Tax Code, is amended by adding
  Subsection (e) to read as follows:
         (e)  For purposes of this section, the state is not a taxing
  unit.
         SECTION 1.25.  Section 26.15(c), Tax Code, is amended to
  read as follows:
         (c)  At any time, the governing body of a taxing unit, on
  motion of the assessor for the unit or of a property owner, shall
  direct by written order changes in the tax roll to correct errors in
  the mathematical computation of a tax. The assessor shall enter the
  corrections ordered by the governing body. The comptroller may
  order changes in the state tax roll to correct errors in the
  mathematical computation of the state ad valorem tax.
         SECTION 1.26.  Section 31.11(a), Tax Code, is amended to
  read as follows:
         (a)  If a taxpayer applies to the tax collector of a taxing
  unit for a refund of an overpayment or erroneous payment of taxes,
  the collector for the unit determines that the payment was
  erroneous or excessive, and the auditor for the unit or the
  comptroller in the case of the state ad valorem tax agrees with the
  collector's determination, the collector or, for state taxes, the
  comptroller shall refund the amount of the excessive or erroneous
  payment from available current tax collections or from funds
  appropriated by the unit or the state, as appropriate, for making
  refunds.  For taxes other than state taxes [However], the collector
  may not make the refund unless:
               (1)  in the case of a collector who collects taxes for
  one taxing unit, the governing body of the taxing unit also
  determines that the payment was erroneous or excessive and approves
  the refund if the amount of the refund exceeds:
                     (A)  $5,000 for a refund to be paid by a county
  with a population of two million or more; or
                     (B)  $500 for a refund to be paid by any other
  taxing unit; or
               (2)  in the case of a collector who collects taxes for
  more than one taxing unit, the governing body of the taxing unit
  that employs the collector also determines that the payment was
  erroneous or excessive and approves the refund if the amount of the
  refund exceeds:
                     (A)  $5,000 for a refund to be paid by a county
  with a population of two million or more; or
                     (B)  $2,500 for a refund to be paid by any other
  taxing unit.
         SECTION 1.27.  Sections 32.01(a) and (d), Tax Code, are
  amended to read as follows:
         (a)  On January 1 of each year, a tax lien attaches to
  property to secure the payment of all taxes, penalties, and
  interest ultimately imposed for the year by the state or a taxing
  unit on the property, whether or not the taxes are imposed in the
  year the lien attaches. The lien to secure the payment of state ad
  valorem taxes and applicable penalties and interest exists in favor
  of the state. The lien to secure the payment of taxes imposed by a
  taxing unit and applicable penalties and interest exists in favor
  of the [each] taxing unit having power to tax the property.
         (d)  The lien under this section is perfected on attachment
  and, except as provided by Section 32.03(b), perfection requires no
  further action by the state or taxing unit.
         SECTION 1.28.  Section 33.01(a), Tax Code, is amended to
  read as follows:
         (a)  A delinquent tax, including a delinquent state ad
  valorem tax, incurs a penalty of six percent of the amount of the
  tax for the first calendar month it is delinquent plus one percent
  for each additional month or portion of a month the tax remains
  unpaid prior to July 1 of the year in which it becomes delinquent.
  However, a tax delinquent on July 1 incurs a total penalty of twelve
  percent of the amount of the delinquent tax without regard to the
  number of months the tax has been delinquent. A delinquent tax
  continues to incur the penalty provided by this subsection as long
  as the tax remains unpaid, regardless of whether a judgment for the
  delinquent tax has been rendered.
         SECTION 1.29.  Subchapter A, Chapter 33, Tax Code, is
  amended by adding Section 33.12 to read as follows:
         Sec. 33.12.  COLLECTION OF DELINQUENT STATE AD VALOREM
  TAXES; PENALTY. (a) The collector for a school district has the
  same powers and duties regarding the collection of delinquent state
  ad valorem taxes imposed on property having taxable situs in the
  school district as the collector has regarding delinquent school
  district taxes on that property.
         (b)  The attorney who represents a school district to enforce
  the collection of delinquent school district taxes represents the
  state to enforce the collection of delinquent state ad valorem
  taxes imposed on property having taxable situs in the school
  district.  If the governing body of a school district contracts with
  a private attorney to enforce the collection of delinquent school
  district ad valorem taxes, the contract applies to the collection
  of delinquent state ad valorem taxes on property taxable by that
  school district without further action. The compensation of the
  private attorney for collecting delinquent state ad valorem taxes
  is equal to a percentage of the amount collected that represents the
  portion of that amount attributable to the additional penalty
  provided by Subsection (c). If the governing body of a school
  district enters into a contract with an official, taxing unit, or
  political subdivision of this state for the collection of the ad
  valorem taxes of the school district that includes the collection
  of delinquent school district taxes, the contract applies to the
  collection of delinquent state ad valorem taxes on property taxable
  by that school district without further action.
         (c)  State ad valorem taxes that remain delinquent on July 1
  of the year in which they become delinquent incur an additional
  penalty to defray costs of collection if the collection of the
  delinquent taxes is covered by a contract with a private attorney
  under Subsection (b). The amount of the penalty is the amount of
  the compensation specified in the contract.
         (d)  A tax lien attaches in favor of the state to the property
  on which the tax is imposed to secure payment of the penalty.
         (e)  The person responsible for collecting the delinquent
  state ad valorem tax shall deliver a notice of delinquency and of
  the penalty to the property owner at least 30 and not more than 60
  days before July 1.
         (f)  Sections 6.30, 33.07, and 33.08 do not apply to the
  state ad valorem tax.
         SECTION 1.30.  Sections 33.21(a) and (b), Tax Code, are
  amended to read as follows:
         (a)  A person's personal property is subject to seizure for
  the payment of a delinquent tax, penalty, and interest the person
  [he] owes the state or a taxing unit on property.
         (b)  A person's personal property is subject to seizure for
  the payment of a tax imposed by the state or other [a] taxing unit on
  the person's property before the tax becomes delinquent if:
               (1)  the collector discovers that property on which the
  tax has been or will be imposed is about to be:
                     (A)  removed from the county; or
                     (B)  sold in a liquidation sale in connection with
  the cessation of a business; and
               (2)  the collector knows of no other personal property
  in the county from which the tax may be satisfied.
         SECTION 1.31.  Section 33.23(b), Tax Code, is amended to
  read as follows:
         (b)  A bond may not be required of the state or other [a]
  taxing unit for issuance or delivery of a tax warrant, and a fee or
  court cost may not be charged for issuance or delivery of a warrant.
         SECTION 1.32.  Section 33.44(b), Tax Code, is amended to
  read as follows:
         (b)  For purposes of joining a county, citation may be served
  on the county [tax] assessor-collector. For purposes of joining
  any other taxing unit, citation may be served on the officer charged
  with collecting taxes for the unit or on the presiding officer or
  secretary of the governing body of the unit. For purposes of
  joining the state, citation shall be served on the school district
  collector who collects state ad valorem taxes on the property.
  Citation may be served by certified mail, return receipt requested.
  A person on whom service is authorized by this subsection may waive
  the issuance and service of citation in behalf of the person's [his]
  taxing unit.
         SECTION 1.33.  Section 34.04(b), Tax Code, is amended to
  read as follows:
         (b)  A copy of the petition shall be served, in the manner
  prescribed by Rule 21a, Texas Rules of Civil Procedure, [as
  amended,] or that rule's successor, on all parties to the
  underlying action not later than the 20th day before the date set
  for a hearing on the petition. If the state is a party to the
  underlying action, the copy of the petition to be served on the
  state shall be served on the school district collector who collects
  state ad valorem taxes on the subject property.  The attorney who
  represents the state to enforce the collection of delinquent state
  ad valorem taxes in the school district in which the property is
  located shall represent the state at the hearing.
         SECTION 1.34.  The heading to Chapter 41, Tax Code, is
  amended to read as follows:
  CHAPTER 41. ADMINISTRATIVE [LOCAL] REVIEW
         SECTION 1.35.  Section 41.03, Tax Code, is amended to read as
  follows:
         Sec. 41.03.  CHALLENGE BY STATE OR TAXING UNIT. (a) The
  state or another [A] taxing unit is entitled to challenge before the
  appraisal review board:
               (1)  the level of appraisals of any category of
  property in the district or in any territory in the district, but
  not the appraised value of a single taxpayer's property;
               (2)  an exclusion of property from the appraisal
  records;
               (3)  a grant in whole or in part of a partial exemption;
               (4)  a determination that land qualifies for appraisal
  as provided by Subchapter C, D, E, or H, Chapter 23; or
               (5)  failure to identify the taxing unit as one in which
  a particular property is taxable.
         (b)  If the state or other [a] taxing unit challenges a
  determination that land qualifies for appraisal under Subchapter H,
  Chapter 23, on the ground that the land is not located in an
  aesthetic management zone, critical wildlife habitat zone, or
  streamside management zone, the state or other taxing unit must
  first seek a determination letter from the director of the Texas
  Forest Service. The appraisal review board shall accept the letter
  as conclusive proof of the type, size, and location of the zone.
         SECTION 1.36.  Subchapter A, Chapter 41, Tax Code, is
  amended by adding Sections 41.031 and 41.032 to read as follows:
         Sec. 41.031.  CHALLENGE BY STATE. The state is entitled to
  challenge before the appraisal review board the exclusion of
  property from the appraisal roll for state ad valorem taxes.
         Sec. 41.032.  REPRESENTATION OF STATE.  The comptroller
  represents the state in a challenge by the state under this
  subchapter.  The comptroller may delegate that function to the
  appropriate school district assessor or collector.
         SECTION 1.37.  Section 41.06(a), Tax Code, is amended to
  read as follows:
         (a)  The secretary of the appraisal review board shall
  deliver to the comptroller on behalf of the state and to the
  presiding officer of the governing body of each taxing unit other
  than the state entitled to appear at a challenge hearing written
  notice of the date, time, and place fixed for the hearing. The
  secretary shall deliver the notice not later than the 10th day
  before the date of the hearing.
         SECTION 1.38.  Section 41.07(d), Tax Code, is amended to
  read as follows:
         (d)  The board shall deliver by certified mail a notice of
  the issuance of the order and a copy of the order to the taxing unit.
  If the order of the board excludes property from the appraisal roll
  for state ad valorem taxes, the board shall also deliver a notice of
  issuance and a copy of the order to the comptroller and the
  appropriate school district assessor in the manner prescribed by
  the comptroller.
         SECTION 1.39.  Section 41.47(d), Tax Code, is amended to
  read as follows:
         (d)  The board shall deliver by certified mail a notice of
  issuance of the order and a copy of the order to the property owner
  and the chief appraiser.  If the order of the board excludes
  property from the appraisal roll for state ad valorem taxes, the
  board shall also deliver a notice of issuance and a copy of the
  order to the comptroller and the appropriate school district
  assessor in the manner prescribed by the comptroller.
         SECTION 1.40.  Subchapter A, Chapter 42, Tax Code, is
  amended by adding Section 42.032 to read as follows:
         Sec. 42.032.  RIGHT OF APPEAL BY COMPTROLLER. (a) The
  comptroller is entitled to appeal an order of the appraisal review
  board excluding property from the appraisal roll for state ad
  valorem taxes.
         (b)  The attorney general shall represent the comptroller in
  an appeal under this section. The attorney general may delegate its
  duties under this section to a county or district attorney or may
  contract with a private attorney for the performance of those
  duties.
         SECTION 1.41.  Sections 42.06(a) and (c), Tax Code, are
  amended to read as follows:
         (a)  To exercise the party's right to appeal an order of an
  appraisal review board, a party other than a property owner must
  file written notice of appeal within 15 days after the date the
  party receives the notice required by Section 41.47 or, in the case
  of a taxing unit or the comptroller, by Section 41.07 that the order
  appealed has been issued. To exercise the right to appeal an order
  of the comptroller, a party other than a property owner must file
  written notice of appeal within 15 days after the date the party
  receives the comptroller's order. A property owner is not required
  to file a notice of appeal under this section.
         (c)  If the chief appraiser, a taxing unit, [or] a county, or
  the comptroller appeals[, the chief appraiser, if the appeal is of]
  an order of the appraisal review board, the chief appraiser [or the
  comptroller, if the appeal is of an order of the comptroller,] shall
  deliver a copy of the notice to the property owner whose property is
  involved in the appeal.  If the appeal is of an order of the
  comptroller, the comptroller shall deliver a copy of the notice to
  the property owner.  The chief appraiser or the comptroller shall
  deliver the copy of the notice within 10 days after the date the
  notice is filed.
         SECTION 1.42.  Sections 42.43(a), (b), (b-1), (c), (e), (g),
  and (h), Tax Code, are amended to read as follows:
         (a)  If the final determination of an appeal that decreases a
  property owner's tax liability occurs after the property owner has
  paid the owner's [his] taxes, the taxing unit and the comptroller,
  if the property is subject to the state ad valorem tax, shall refund
  to the property owner the difference between the amount of taxes
  paid and amount of taxes for which the property owner is liable.
         (b)  For a refund made under this section, the taxing unit or
  the comptroller shall include with the refund interest on the
  amount refunded calculated at an annual rate that is equal to the
  sum of two percent and the most recent prime rate quoted and
  published by the Federal Reserve Board as of the first day of the
  month in which the refund is made, but not more than a total of eight
  percent, calculated from the delinquency date for the taxes until
  the date the refund is made.
         (b-1)  A taxing unit or the comptroller may not send a refund
  made under this section before the earlier of:
               (1)  the 21st day after the final determination of the
  appeal; or
               (2)  the date the property owner files the form
  prescribed by Subsection (i) with the taxing unit or the
  comptroller.
         (c)  Notwithstanding Subsection (b), if a taxing unit or the
  comptroller does not make a refund, including interest, required by
  this section before the 60th day after the date the chief appraiser
  certifies a correction to the appraisal roll under Section 42.41,
  the taxing unit or the comptroller shall include with the refund
  interest on the amount refunded at an annual rate of 12 percent,
  calculated from the delinquency date for the taxes until the date
  the refund is made.  A refund is not considered made under this
  section until sent to the proper person as provided by this section.
         (e)  Except as provided by Subsection (f) or (g), a taxing
  unit or the comptroller shall send a refund made under this section
  to the property owner.
         (g)  If a form prescribed by the comptroller under Subsection
  (i) is filed with a taxing unit or the comptroller before the 21st
  day after the final determination of an appeal that requires a
  refund be made, the taxing unit or the comptroller shall send the
  refund to the person and address designated on the form.
         (h)  A separate form must be filed with a taxing unit or the
  comptroller under Subsection (g) for each appeal to which the
  property owner is a party.  A form may be revoked in a written
  revocation filed with the taxing unit or the comptroller by the
  property owner.
         SECTION 1.43.  Sections 43.01 and 43.04, Tax Code, are
  amended to read as follows:
         Sec. 43.01.  AUTHORITY TO BRING SUIT. The comptroller or a
  [A] taxing unit may sue the appraisal district that appraises
  property for the state or the unit to compel the appraisal district
  to comply with the provisions of this title, rules of the
  comptroller, or other applicable law.
         Sec. 43.04.  SUIT TO COMPEL COMPLIANCE WITH DEADLINES. The
  comptroller or the governing body of a taxing unit may sue the chief
  appraiser or members of the appraisal review board, as applicable,
  for failure to comply with the deadlines imposed by Section
  25.22(a), 26.01(a), or 41.12. If the court finds that the chief
  appraiser or appraisal review board failed to comply for good cause
  shown, the court shall enter an order fixing a reasonable deadline
  for compliance. If the court finds that the chief appraiser or
  appraisal review board failed to comply without good cause, the
  court shall enter an order requiring the chief appraiser or
  appraisal review board to comply with the deadline not later than
  the 10th day after the date the judgment is signed. In a suit
  brought under this section, the court may enter any other order the
  court considers necessary to ensure compliance with the court's
  deadline or the applicable statutory requirements. Failure to obey
  an order of the court is punishable as contempt.
         SECTION 1.44.  Chapter 311, Tax Code, is amended by adding
  Section 311.0131 to read as follows:
         Sec. 311.0131.  SCHOOL DISTRICT ANNUAL OBLIGATION TO TAX
  INCREMENT FUND; STATE PAYMENT OF PORTION OF OBLIGATION.  (a)  This
  section applies only to a reinvestment zone created before
  September 1, 1999, for which a school district enters into an
  agreement under Section 311.013(f) with the governing body of the
  municipality that created the zone to pay into the tax increment
  fund for the zone a portion of the school district's tax increment
  produced from property located in the zone.
         (b)  Notwithstanding the terms of the agreement regarding
  the portion of the school district's tax increment required to be
  paid into the fund, in each year, the portion of the school
  district's tax increment the school district is required to pay
  into the fund is the school district annual obligation for the
  school district for that year calculated under Subsection (c).
         (c)  The municipality that created the zone or the
  municipality's designee shall calculate the school district annual
  obligation for a school district by applying the applicable school
  district's tax rate for the 2012 tax year to the captured appraised
  value for the school district for the year for which the obligation
  is calculated and multiplying that amount by the percentage of the
  school district's tax increment for the year for which the
  obligation is calculated that the school district agreed to pay
  into the tax increment fund in that year under Section 311.013(f).
         (d)  The school district annual obligation for each year
  shall be apportioned between the school district and the state in
  proportion to the amount of taxes each of those entities imposes on
  the captured appraised value for the zone in that year as calculated
  under this subsection. The amount of taxes the state imposes on
  that captured appraised value is calculated by multiplying the rate
  of the state ad valorem tax rate for that year by the captured
  appraised value for the state. The amount of taxes the school
  district imposes on that captured appraised value used in making
  the apportionment is calculated by multiplying the school district
  local fund assignment tax rate for that year by the captured
  appraised value for the school district. The tax increment base for
  the state under Section 311.012 is determined as if this section
  were in effect for the year in which the reinvestment zone was
  created.
         (e)  If more than one school district imposes taxes on
  property in a reinvestment zone, the school district annual
  obligation for each school district and the portion of that
  obligation that the state is required to pay under this section
  shall be calculated separately for the portion of the property in
  the reinvestment zone located in each school district.
         (f)  The comptroller shall verify the payments to be made by
  the state under this section and shall retain from state property
  tax collections sufficient funds to make the calculated payments.
  From the retained funds, the comptroller shall pay to the school
  district or, if required by the agreement, to the municipality the
  portion of the school district annual obligation apportioned to the
  state under Subsection (c).
         (g)  On receipt of the state's portion of the school district
  annual obligation by a school district, the school district
  promptly shall pay the state's portion to the municipality. At the
  time of payment of the state's portion to the municipality, the
  school district shall pay to the municipality any unpaid balance of
  the school district's portion of the school district annual
  obligation.
         (h)  Amounts paid to a municipality under Subsections (f) and
  (g) shall be deposited to the credit of the tax increment fund on
  behalf of the school district.
         (i)  This section ceases to apply to a reinvestment zone on
  the earlier date specified by Section 311.017(a)(1) or (2) for the
  reinvestment zone. If the agreement provides that the termination
  date may be extended, the state's obligation to pay a portion of the
  school district annual obligation ceases on the date the school
  district ceases to be required to pay any tax increment produced by
  the school district into the tax increment fund for the zone.
         SECTION 1.45.  Subchapter A, Chapter 313, Tax Code, is
  amended by adding Section 313.010 to read as follows:
         Sec. 313.010.  REPORT TO LEGISLATURE.  (a)  Not later than
  December 1, 2014, the Legislative Budget Board shall submit a
  report to the legislature that includes recommended changes to this
  chapter to provide incentives and credits relating to the state ad
  valorem tax that are consistent with the purposes described by
  Section 313.003.
         (b)  This section expires January 1, 2015.
         SECTION 1.46.  Section 403.302(j), Government Code, is
  amended to read as follows:
         (j)  For purposes of Chapter 42, Education Code, the
  comptroller shall certify to the commissioner of education:
               (1)  a final value for each school district computed on
  a residence homestead exemption under Section 1-b(c), Article VIII,
  Texas Constitution, of $5,000;
               (2)  a final value for each school district computed
  on:
                     (A)  a residence homestead exemption under
  Section 1-b(c), Article VIII, Texas Constitution, of $15,000; and
                     (B)  the effect of the additional limitation on
  tax increases under Section 1-b(d), Article VIII, Texas
  Constitution, as proposed by H.J.R. No. 4, 75th Legislature,
  Regular Session, 1997; and
               (3)  a final value for each school district computed on
  the effect of the reduction of the limitation on tax increases to
  reflect any reduction in the school district tax rate as provided by
  Section 11.26(a-1), [(a-2), or (a-3),] Tax Code, as applicable.
  ARTICLE 2. PUBLIC SCHOOL FINANCE; ENRICHMENT TAX
         SECTION 2.01.  Section 11.1511(c), Education Code, is
  amended to read as follows:
         (c)  The board may:
               (1)  issue bonds and levy, pledge, assess, and collect
  an annual ad valorem tax to pay the principal and interest on the
  bonds as authorized under Sections 45.001 and 45.003;
               (2)  levy, assess, and collect an annual ad valorem tax
  for enrichment [maintenance and operation] of the district as
  authorized under Sections 45.002 and 45.003;
               (3)  employ a person to assess or collect the district's
  taxes as authorized under Section 45.231; and
               (4)  enter into contracts as authorized under this code
  or other law and delegate contractual authority to the
  superintendent as appropriate.
         SECTION 2.02.  Section 12.013(b), Education Code, is amended
  to read as follows:
         (b)  A home-rule school district is subject to:
               (1)  a provision of this title establishing a criminal
  offense;
               (2)  a provision of this title relating to limitations
  on liability; and
               (3)  a prohibition, restriction, or requirement, as
  applicable, imposed by this title or a rule adopted under this
  title, relating to:
                     (A)  the Public Education Information Management
  System (PEIMS) to the extent necessary to monitor compliance with
  this subchapter as determined by the commissioner;
                     (B)  educator certification under Chapter 21 and
  educator rights under Sections 21.407, 21.408, and 22.001;
                     (C)  criminal history records under Subchapter C,
  Chapter 22;
                     (D)  student admissions under Section 25.001;
                     (E)  school attendance under Sections 25.085,
  25.086, and 25.087;
                     (F)  inter-district or inter-county transfers of
  students under Subchapter B, Chapter 25;
                     (G)  elementary class size limits under Section
  25.112, in the case of any campus in the district that fails to
  satisfy any standard under Section 39.054(e);
                     (H)  high school graduation under Section 28.025;
                     (I)  special education programs under Subchapter
  A, Chapter 29;
                     (J)  bilingual education under Subchapter B,
  Chapter 29;
                     (K)  prekindergarten programs under Subchapter E,
  Chapter 29;
                     (L)  safety provisions relating to the
  transportation of students under Sections 34.002, 34.003, 34.004,
  and 34.008;
                     (M)  computation and distribution of state aid
  under Chapters 31, 42, and 43;
                     (N)  extracurricular activities under Section
  33.081;
                     (O)  health and safety under Chapter 38;
                     (P)  public school accountability under
  Subchapters B, C, D, E, and J, Chapter 39;
                     (Q)  [equalized wealth under Chapter 41;
                     [(R)]  a bond or other obligation or tax rate
  under Chapters 42, 43, and 45; and
                     (R) [(S)]  purchasing under Chapter 44.
         SECTION 2.03.  Section 12.029(b), Education Code, is amended
  to read as follows:
         (b)  If [Except as provided by Subchapter H, Chapter 41, if]
  two or more school districts having different status, one of which
  is home-rule school district status, consolidate into a single
  district, the petition under Section 13.003 initiating the
  consolidation must state the status for the consolidated district.
  The ballot shall be printed to permit voting for or against the
  proposition: "Consolidation of (names of school districts) into a
  single school district governed as (status of school district
  specified in the petition)."
         SECTION 2.04.  Section 12.106(a), Education Code, is amended
  to read as follows:
         (a)  A charter holder is entitled to receive for the
  open-enrollment charter school funding under Chapter 42 equal to
  [the greater of:
               [(1)     the percentage specified by Section 42.2516(i)
  multiplied by the amount of funding per student in weighted average
  daily attendance, excluding enrichment funding under Sections
  42.302(a-1)(2) and (3), as they existed on January 1, 2009, that
  would have been received for the school during the 2009-2010 school
  year under Chapter 42 as it existed on January 1, 2009, and an
  additional amount of the percentage specified by Section 42.2516(i)
  multiplied by $120 for each student in weighted average daily
  attendance; or
               [(2)]  the amount of funding per student in weighted
  average daily attendance, excluding enrichment funding under
  Section 42.302(a), to which the charter holder would be entitled
  for the school under Chapter 42 if the school were a school district
  [without a tier one local share for purposes of Section 42.253 and
  without any local revenue for purposes of Section 42.2516].
         SECTION 2.05.  Section 21.402(a), Education Code, as
  effective until September 1, 2017, is amended to read as follows:
         (a)  Except as provided by Subsection (f), a school district
  must pay each classroom teacher, full-time librarian, full-time
  counselor certified under Subchapter B, or full-time school nurse
  not less than the minimum monthly salary, based on the employee's
  level of experience in addition to other factors, as determined by
  commissioner rule, determined by the following formula:
  MS = SF x 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 2.06.  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 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 2.07.  Section 21.410(h), Education Code, is amended
  to read as follows:
         (h)  A grant a school district receives under this section is
  in addition to the [any] funding the district receives under
  Chapter 42. The commissioner shall distribute funds under this
  section with the Foundation School Program payment to which the
  district is entitled as soon as practicable after the end of the
  school year as determined by the commissioner. [A district to which
  Chapter 41 applies is entitled to the grants paid under this
  section. The commissioner shall determine the timing of the
  distribution of grants to a district that does not receive
  Foundation School Program payments.]
         SECTION 2.08.  Section 21.411(h), Education Code, is amended
  to read as follows:
         (h)  A grant a school district receives under this section is
  in addition to the [any] funding the district receives under
  Chapter 42. The commissioner shall distribute funds under this
  section with the Foundation School Program payment to which the
  district is entitled as soon as practicable after the end of the
  school year as determined by the commissioner. [A district to which
  Chapter 41 applies is entitled to the grants paid under this
  section. The commissioner shall determine the timing of the
  distribution of grants to a district that does not receive
  Foundation School Program payments.]
         SECTION 2.09.  Section 21.412(h), Education Code, is amended
  to read as follows:
         (h)  A grant a school district receives under this section is
  in addition to the [any] funding the district receives under
  Chapter 42. The commissioner shall distribute funds under this
  section with the Foundation School Program payment to which the
  district is entitled as soon as practicable after the end of the
  school year as determined by the commissioner. [A district to which
  Chapter 41 applies is entitled to the grants paid under this
  section. The commissioner shall determine the timing of the
  distribution of grants to a district that does not receive
  Foundation School Program payments.]
         SECTION 2.10.  Section 21.413(h), Education Code, is amended
  to read as follows:
         (h)  A grant a school district receives under this section is
  in addition to the [any] funding the district receives under
  Chapter 42. The commissioner shall distribute funds under this
  section with the Foundation School Program payment to which the
  district is entitled as soon as practicable after the end of the
  school year as determined by the commissioner. [A district to which
  Chapter 41 applies is entitled to the grants paid under this
  section. The commissioner shall determine the timing of the
  distribution of grants to a district that does not receive
  Foundation School Program payments.]
         SECTION 2.11.  Section 29.008(b), Education Code, is amended
  to read as follows:
         (b)  Except as provided by Subsection (c), costs of an
  approved contract for residential placement may be paid from a
  combination of federal, state, and local funds. The local share of
  the total contract cost for each student is [that portion of the
  local tax effort that exceeds] the district's local tax effort 
  [fund assignment under Section 42.252,] divided by the average
  daily attendance in the district. If the contract involves a
  private facility, the state share of the total contract cost is that
  amount remaining after subtracting the local share. If the
  contract involves a public facility, the state share is that amount
  remaining after subtracting the local share from the portion of the
  contract that involves the costs of instructional and related
  services. For purposes of this subsection, "local tax effort"
  means the total amount of money generated by taxes imposed for debt
  service and enrichment [maintenance and operation] less any amounts
  paid into a tax increment fund under Chapter 311, Tax Code.
         SECTION 2.12.  Section 29.203(b), Education Code, is amended
  to read as follows:
         (b)  A school district is entitled to the allotment provided
  by Section 42.157 for each eligible student using a public
  education grant. [If the district has a wealth per student greater
  than the guaranteed wealth level but less than the equalized wealth
  level, a school district is entitled under rules adopted by the
  commissioner to additional state aid in an amount equal to the
  difference between the cost to the district of providing services
  to a student using a public education grant and the sum of the state
  aid received because of the allotment under Section 42.157 and
  money from the available school fund attributable to the student.]
         SECTION 2.13.  Section 30.003(b), Education Code, is amended
  to read as follows:
         (b)  If the student is admitted to the school for a full-time
  program for the equivalent of two long semesters, the district's
  share of the cost is an amount equal to the sum of the dollar amount
  of enrichment [maintenance] and debt service taxes imposed by the
  district for that year divided by the district's average daily
  attendance for the preceding year and a dollar amount determined by
  the commissioner.
         SECTION 2.14.  Section 37.0061, Education Code, is amended
  to read as follows:
         Sec. 37.0061.  FUNDING FOR ALTERNATIVE EDUCATION SERVICES IN
  JUVENILE RESIDENTIAL FACILITIES. A school district that provides
  education services to pre-adjudicated and post-adjudicated
  students who are confined by court order in a juvenile residential
  facility operated by a juvenile board is entitled to count such
  students in the district's average daily attendance for purposes of
  receipt of state funds under the Foundation School Program. [If the
  district has a wealth per student greater than the guaranteed
  wealth level but less than the equalized wealth level, the district
  in which the student is enrolled on the date a court orders the
  student to be confined to a juvenile residential facility shall
  transfer to the district providing education services an amount
  equal to the difference between the average Foundation School
  Program costs per student of the district providing education
  services and the sum of the state aid and the money from the
  available school fund received by the district that is attributable
  to the student for the portion of the school year for which the
  district provides education services to the student.]
         SECTION 2.15.  Section 42.007(c), Education Code, is amended
  to read as follows:
         (c)  The funding elements must include:
               (1)  a basic allotment for the purposes of Section
  42.101 that[, when combined with the guaranteed yield component
  provided by Subchapter F,] represents the cost per student of a
  regular education program that meets all mandates of law and
  regulation;
               (2)  adjustments designed to reflect the variation in
  known resource costs and costs of education beyond the control of
  school districts;
               (3)  appropriate program cost differentials and other
  funding elements for the programs authorized under Subchapter C,
  with the program funding level expressed as dollar amounts and as
  weights applied to the adjusted basic allotment for the appropriate
  year;
               (4)  the maximum guaranteed level of qualified state
  and local funds per student for the purposes of Subchapter F;
               (5)  the enrichment [and facilities] tax rate under
  Subchapter F;
               (6)  the computation of students in weighted average
  daily attendance under Section 42.302; and
               (7)  the amount to be appropriated for the school
  facilities assistance program under Chapter 46.
         SECTION 2.16.  Section 42.009, Education Code, is amended to
  read as follows:
         Sec. 42.009.  DETERMINATION OF FUNDING LEVELS. (a)  Not
  later than July 1 of each year, the commissioner shall determine for
  each school district whether the estimated amount of state and
  local funding per student in weighted average daily attendance to
  be provided to the district under this chapter [the Foundation
  School Program for maintenance and operations] for the following
  school year is less than the amount provided to the district for the
  2010-2011 school year.  If the amount estimated to be provided is
  less, the commissioner shall certify the percentage decrease in
  funding to be provided to the district.
         (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 2.17.  Section 42.101(a), Education Code, as
  effective until September 1, 2015, is amended to read as follows:
         (a)  The basic allotment is [an amount 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 resulting amount for a district;
         ["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 2.18.  Section 42.101(a), Education Code, as
  effective September 1, 2015, 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 2.19.  Section 42.101(c-3), Education Code, is
  amended to read as follows:
         (c-3)  The regular program adjustment factor ("RPAF") is
  0.98 for the 2013-2014 and 2014-2015 school years or a greater
  amount established by appropriation, not to exceed 1.0.  This
  subsection and Subsection [Subsections] (c)[, (c-1), and (c-2)]
  expire September 1, 2015.
         SECTION 2.20.  Section 42.251(b), Education Code, is amended
  to read as follows:
         (b)  The program shall be financed by:
               (1)  ad valorem tax revenue generated by the state ad
  valorem tax under Section 3-a, Article VII, Texas Constitution [an
  equalized uniform school district effort];
               (2)  enrichment ad valorem tax revenue generated by
  local school district effort [in excess of the equalized uniform
  school district effort];
               (3)  state available school funds distributed in
  accordance with law; and
               (4)  state funds appropriated for the purposes of
  public school education and allocated to each district in an amount
  sufficient to finance the cost of each district's Foundation School
  Program not covered by other funds specified in this subsection.
         SECTION 2.21.  Section 42.25161(a), Education Code, is
  amended to read as follows:
         (a)  The commissioner shall provide South Texas Independent
  School District with the amount of state aid necessary to ensure
  that the district receives an amount of state maintenance and
  operations [and local] revenue per student in weighted average
  daily attendance that is at least [the percentage specified by
  Section 42.2516(i) of] $120 greater than the amount of state and
  local maintenance and operations revenue the district would have
  received per student in weighted average daily attendance during
  the 2009-2010 school year under this chapter, as it existed on
  January 1, 2009, at a maintenance and operations tax rate equal to
  the product of the state compression percentage for the 2009-2010
  school year, as established under former Section 42.2516, 
  multiplied by the maintenance and operations tax rate adopted by
  the district for the 2005 tax year[, provided that the district
  imposes a maintenance and operations tax at that rate].
         SECTION 2.22.  Section 42.2521(a), Education Code, is
  amended to read as follows:
         (a)  For purposes of Chapter [Chapters 41 and] 46 and this
  chapter, and to the extent money specifically authorized to be used
  under this section is available, the commissioner shall adjust the
  taxable value of property in a school district that, due to factors
  beyond the control of the board of trustees, experiences a rapid
  decline in the tax base used in calculating taxable values in excess
  of four percent of the tax base used in the preceding year.
         SECTION 2.23.  Section 42.2523(a), Education Code, is
  amended to read as follows:
         (a)  For purposes of Chapter [Chapters 41 and] 46 and this
  chapter, the commissioner shall adjust the taxable value of
  property of a school district all or part of which is located in an
  area declared a disaster area by the governor under Chapter 418,
  Government Code, as necessary to ensure that the district receives
  funding based as soon as possible on property values as affected by
  the disaster.
         SECTION 2.24.  Sections 42.2524(c) and (d), Education Code,
  are amended to read as follows:
         (c)  The commissioner may provide reimbursement under this
  section only if funds are available for that purpose [as follows:
               [(1)     reimbursement for a school district not required
  to take action under Chapter 41 may be provided] from:
               (1) [(A)]  amounts appropriated for that purpose,
  including amounts appropriated for those districts for that purpose
  to the disaster contingency fund established under Section 418.073,
  Government Code; or
               (2) [(B)]  Foundation School Program funds available
  for that purpose, based on a determination by the commissioner that
  the amount appropriated for the Foundation School Program,
  including the facilities component as provided by Chapter 46,
  exceeds the amount to which districts are entitled under this
  chapter and Chapter 46[; and
               [(2)     reimbursement for a school district required to
  take action under Chapter 41 may be provided from funds described by
  Subdivision (1)(B) if funds remain available after fully
  reimbursing each school district described by Subdivision (1) for
  its disaster remediation costs].
         (d)  If the amount of money available for purposes of
  reimbursing school districts [not required to take action under
  Chapter 41] is not sufficient to fully reimburse each district's
  disaster remediation costs, the commissioner shall reduce the
  amount of assistance provided to each of those districts
  proportionately.  [If the amount of money available for purposes of
  reimbursing school districts required to take action under Chapter
  41 is not sufficient to fully reimburse each district's disaster
  remediation costs, the commissioner shall reduce the amount of
  assistance provided to each of those districts proportionately.]
         SECTION 2.25.  Sections 42.253(a), (c), and (h), 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)].
         (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[, including a district receiving funds under Section
  42.2516,] 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 the district's full recovery of the adjustment
  made under this subsection].
         SECTION 2.26.  Sections 42.2531(a), (b), and (c), Education
  Code, are amended to read as follows:
         (a)  The commissioner may make adjustments to amounts due to
  a school district under this chapter or Chapter 46[, or to amounts
  necessary for a district to comply with the requirements of Chapter
  41,] as provided by this section.
         (b)  A school district that has a major taxpayer, as
  determined by the commissioner, that because of a protest of the
  valuation of the taxpayer's property fails to pay all or a portion
  of the ad valorem taxes due to the district may apply to the
  commissioner to have the district's taxable value of property or ad
  valorem tax collections adjusted for purposes of this chapter or
  Chapter [41 or] 46. The commissioner may make the adjustment only
  to the extent the commissioner determines that making the
  adjustment will not:
               (1)  in the fiscal year in which the adjustment is made,
  cause the amount to which school districts are entitled under this
  chapter to exceed the amount appropriated for purposes of the
  Foundation School Program for that year; and
               (2)  if the adjustment is made in the first year of a
  state fiscal biennium, cause the amount to which school districts
  are entitled under this chapter for the second year of the biennium
  to exceed the amount appropriated for purposes of the Foundation
  School Program for that year.
         (c)  The commissioner shall recover the benefit of any
  adjustment made under this section by making offsetting adjustments
  in the school district's taxable value of property or ad valorem tax
  collections for purposes of this chapter or Chapter [41 or] 46 on a
  final determination of the taxable value of property that was the
  basis of the original adjustment, or in the second school year
  following the year in which the adjustment is made, whichever is
  earlier.
         SECTION 2.27.  Section 42.257(b), Education Code, is amended
  to read as follows:
         (b)  If the district would have received a greater amount
  from the foundation school fund for the applicable school year
  using the adjusted value, the commissioner shall add the difference
  to subsequent distributions to the district from the foundation
  school fund. [An adjustment does not affect the local fund
  assignment of any other district.]
         SECTION 2.28.  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 Chapter [41 or] 46 or this
  chapter and related reporting requirements.
         SECTION 2.29.  Sections 42.259(b) and (f), Education Code,
  are amended to read as follows:
         (b)  Payments from the foundation school fund to each
  [category 1] school district shall be made as follows:
               (1)  15 percent of the yearly entitlement of the
  district shall be paid in an installment to be made on or before the
  25th day of September of a fiscal year;
               (2)  80 percent of the yearly entitlement of the
  district shall be paid in eight equal installments to be made on or
  before the 25th day of October, November, December, January, March,
  May, June, and July; and
               (3)  five percent of the yearly entitlement of the
  district shall be paid in an installment to be made on or before the
  25th day of February.
         (f)  Any [Except as provided by Subsection (c)(8) or (d)(3),
  any] previously unpaid additional funds from prior fiscal years
  owed to a district shall be paid to the district together with the
  September payment of the current fiscal year entitlement.
         SECTION 2.30.  Section 42.260(b), Education Code, is amended
  to read as follows:
         (b)  For each year, the commissioner shall certify to each
  school district or participating charter school the amount
  of  additional funds to which the district or school is entitled
  due to the increase made by Chapter 1187 (H.B. 3343) [H.B. No.
  3343], Acts of the 77th Legislature, Regular Session, 2001, to[:
               [(1)     the equalized wealth level under Section 41.002;
  or
               [(2)]  the guaranteed level of state and local funds
  per weighted student per cent of tax effort under Section 42.302.
         SECTION 2.31.  Sections 42.302(a), (a-1), (b), (c), (d), and
  (e), Education Code, are amended to read as follows:
         (a)  Each school district is guaranteed a specified amount
  per weighted student in state and local funds for each cent of tax
  effort [over that required for the district's local fund
  assignment] up to the maximum tax rate permitted under Section
  45.003 [level specified in this subchapter].  The amount of state
  support[, subject only to the maximum amount under Section 42.303,]
  is determined by the formula:
  GYA = (GL X WADA X DTR X 100) - LR
  where:
         "GYA" is the guaranteed yield amount of state funds to be
  allocated to the district;
         "GL" is the dollar amount guaranteed level of state and local
  funds per weighted student per cent of tax effort, which is an
  amount described by Subsection (a-1) or a greater amount for any
  year provided by appropriation;
         "WADA" is the number of students in weighted average daily
  attendance, which is calculated by dividing the sum of the school
  district's allotments under Subchapters B and C, less any allotment
  to the district for transportation, any allotment under Section
  42.158 or 42.160, and 50 percent of the adjustment under Section
  42.102, by the basic allotment for the applicable year;
         "DTR" is the district enrichment tax rate of the school
  district, which is determined by subtracting the amount [amounts]
  specified by Subsection (b) from the total amount of enrichment 
  [maintenance and operations] taxes collected by the school district
  for the applicable school year and dividing the difference by the
  quotient of the district's taxable value of property as determined
  under Subchapter M, Chapter 403, Government Code, or, if
  applicable, under Section 42.2521, divided by 100; and
         "LR" is the local revenue, which is determined by multiplying
  "DTR" by the quotient of the district's taxable value of property as
  determined under Subchapter M, Chapter 403, Government Code, or, if
  applicable, under Section 42.2521, divided by 100.
         (a-1)  [In this section, "wealth per student" has the meaning
  assigned by Section 41.001.]  For purposes of Subsection (a), the
  dollar amount guaranteed level of state and local funds per
  weighted student per cent of tax effort ("GL") for a school district
  is:
               (1)  the greater of the amount of district tax revenue
  per weighted student per cent of tax effort that would be available
  to the Austin Independent School District, as determined by the
  commissioner in cooperation with the Legislative Budget Board, if
  the reduction of the limitation on tax increases as provided by
  Section 11.26(a-1), [(a-2), or (a-3),] Tax Code, did not apply, or
  the amount of district tax revenue per weighted student per cent of
  tax effort used for purposes of this subdivision in the preceding
  school year, for the first six cents of [by which] the district's
  enrichment [maintenance and operations] tax rate [exceeds the rate
  equal to the product of the state compression percentage, as
  determined under Section 42.2516, multiplied by the maintenance and
  operations tax rate adopted by the district for the 2005 tax year];
  and
               (2)  $31.95, for the district's enrichment [maintenance
  and operations] tax effort that exceeds the amount of tax effort
  described by Subdivision (1).
         (b)  In computing the district enrichment tax rate of a
  school district, the total amount of enrichment [maintenance and
  operations] taxes collected by the school district does not include
  the amount of[:
               [(1)     the district's local fund assignment under
  Section 42.252; or
               [(2)]  taxes paid into a tax increment fund under
  Chapter 311, Tax Code.
         (c)  For purposes of this section, school district
  enrichment taxes for which credit is granted under Section 31.035,
  31.036, or 31.037, Tax Code, are considered taxes collected by the
  school district as if the taxes were paid when the credit for the
  taxes was granted.
         (d)  For purposes of this section, the total amount of
  enrichment [maintenance and operations] taxes collected for an
  applicable school year by a school district with alternate tax
  dates, as authorized by Section 26.135, Tax Code, is the amount of
  taxes collected on or after January 1 of the year in which the
  school year begins and not later than December 31 of the same year.
         (e)  For purposes of this section, school district
  enrichment taxes for which credit is granted under Subchapter D,
  Chapter 313, Tax Code, are considered taxes collected by the school
  district as if the taxes were paid when the credit for the taxes was
  granted.
         SECTION 2.32.  Section 43.002(b), Education Code, is amended
  to read as follows:
         (b)  Of the amounts available for transfer from the general
  revenue fund to the available school fund for the months of January
  and February of each fiscal year, no more than the amount necessary
  to enable the comptroller to distribute from the available school
  fund an amount equal to 9-1/2 percent of the estimated annual
  available school fund apportionment to [category 1] school
  districts[, as defined by Section 42.259, and 3-1/2 percent of the
  estimated annual available school fund apportionment to category 2
  school districts, as defined by Section 42.259,] may be transferred
  from the general revenue fund to the available school fund. Any
  remaining amount that would otherwise be available for transfer for
  the months of January and February shall be transferred from the
  general revenue fund to the available school fund in equal amounts
  in June and in August of the same fiscal year.
         SECTION 2.33.  Sections 44.004(c) and (c-1), Education Code,
  are amended to read as follows:
         (c)  The notice of public meeting to discuss and adopt the
  budget and the proposed tax rate may not be smaller than one-quarter
  page of a standard-size or a tabloid-size newspaper, and the
  headline on the notice must be in 18-point or larger type.  Subject
  to Subsection (d), the notice must:
               (1)  contain a statement in the following form:
  "NOTICE OF PUBLIC MEETING TO DISCUSS BUDGET AND PROPOSED TAX RATE
         "The (name of school district) will hold a public meeting at
  (time, date, year) in (name of room, building, physical location,
  city, state).  The purpose of this meeting is to discuss the school
  district's budget that will determine the tax rate that will be
  adopted.  Public participation in the discussion is invited."  The
  statement of the purpose of the meeting must be in bold type.  In
  reduced type, the notice must state:  "The tax rate that is
  ultimately adopted at this meeting or at a separate meeting at a
  later date may not exceed the proposed rate shown below unless the
  district publishes a revised notice containing the same information
  and comparisons set out below and holds another public meeting to
  discuss the revised notice.";
               (2)  contain a section entitled "Comparison of Proposed
  Budget with Last Year's Budget," which must show the difference,
  expressed as a percent increase or decrease, as applicable, in the
  amounts budgeted for the preceding fiscal year and the amount
  budgeted for the fiscal year that begins in the current tax year for
  each of the following:
                     (A)  maintenance and operations;
                     (B)  enrichment;
                     (C)  debt service; and
                     (D) [(C)]  total expenditures;
               (3)  contain a section entitled "Total Appraised Value
  and Total Taxable Value," which must show the total appraised value
  and the total taxable value of all property and the total appraised
  value and the total taxable value of new property taxable by the
  district in the preceding tax year and the current tax year as
  calculated under Section 26.04, Tax Code;
               (4)  contain a statement of the total amount of the
  outstanding and unpaid bonded indebtedness of the school district;
               (5)  contain a section entitled "Comparison of Proposed
  Rates with Last Year's Rates," which must:
                     (A)  show in rows the tax rates described by
  Subparagraphs (i)-(iii), expressed as amounts per $100 valuation of
  property, for columns entitled "Enrichment [Maintenance &
  Operations]," "Interest & Sinking Fund," and "Total," which is the
  sum of "Enrichment [Maintenance & Operations]" and "Interest &
  Sinking Fund":
                           (i)  the school district's "Last Year's
  Rate";
                           (ii)  the "Rate to Maintain Same Level of
  Enrichment [Maintenance & Operations] Revenue & Pay Debt Service,"
  which:
                                 (a)  in the case of "Enrichment
  [Maintenance & Operations]," is the tax rate that, when applied to
  the current taxable value for the district, as certified by the
  chief appraiser under Section 26.01, Tax Code, and as adjusted to
  reflect changes made by the chief appraiser as of the time the
  notice is prepared, would impose taxes in an amount that, when added
  to state funds to be distributed to the district under Subchapter F, 
  Chapter 42, would provide the same amount of enrichment
  [maintenance and operations] taxes and state funds distributed
  under Subchapter F, Chapter 42, per student in average daily
  attendance for the applicable school year that was available to the
  district in the preceding school year; and
                                 (b)  in the case of "Interest & Sinking
  Fund," is the tax rate that, when applied to the current taxable
  value for the district, as certified by the chief appraiser under
  Section 26.01, Tax Code, and as adjusted to reflect changes made by
  the chief appraiser as of the time the notice is prepared, and when
  multiplied by the district's anticipated collection rate, would
  impose taxes in an amount that, when added to state funds to be
  distributed to the district under Chapter 46 and any excess taxes
  collected to service the district's debt during the preceding tax
  year but not used for that purpose during that year, would provide
  the amount required to service the district's debt; and
                           (iii)  the "Proposed Rate";
                     (B)  contain fourth and fifth columns aligned with
  the columns required by Paragraph (A) that show, for each row
  required by Paragraph (A):
                           (i)  the "Local Enrichment Revenue per
  Student," which is computed by multiplying the district's total
  taxable value of property, as certified by the chief appraiser for
  the applicable school year under Section 26.01, Tax Code, and as
  adjusted to reflect changes made by the chief appraiser as of the
  time the notice is prepared, by the total enrichment tax rate, and
  dividing the product by the number of students in average daily
  attendance in the district for the applicable school year; and
                           (ii)  the "State Revenue per Student," which
  is computed by determining the amount of state aid received or to be
  received by the district under Chapters 42, 43, and 46 and dividing
  that amount by the number of students in average daily attendance in
  the district for the applicable school year; and
                     (C)  contain an asterisk after each calculation
  for "Interest & Sinking Fund" and a footnote to the section that, in
  reduced type, states "The Interest & Sinking Fund tax revenue is
  used to pay for bonded indebtedness on construction, equipment, or
  both.  The bonds, and the tax rate necessary to pay those bonds,
  were approved by the voters of this district.";
               (6)  contain a section entitled "Comparison of Proposed
  Levy with Last Year's Levy on Average Residence," which must:
                     (A)  show in rows the information described by
  Subparagraphs (i)-(iv), rounded to the nearest dollar, for columns
  entitled "Last Year" and "This Year":
                           (i)  "Average Market Value of Residences,"
  determined using the same group of residences for each year;
                           (ii)  "Average Taxable Value of Residences,"
  determined after taking into account the limitation on the
  appraised value of residences under Section 23.23, Tax Code, and
  after subtracting all homestead exemptions applicable in each year,
  other than exemptions available only to disabled persons or persons
  65 years of age or older or their surviving spouses, and using the
  same group of residences for each year;
                           (iii)  "Last Year's Rate Versus Proposed
  Rate per $100 Value"; and
                           (iv)  "Taxes Due on Average Residence,"
  determined using the same group of residences for each year; and
                     (B)  contain the following
  information:  "Increase (Decrease) in Taxes" expressed in dollars
  and cents, which is computed by subtracting the "Taxes Due on
  Average Residence" for the preceding tax year from the "Taxes Due on
  Average Residence" for the current tax year;
               (7)  contain the following statement in bold
  print:  "Under state law, the dollar amount of school taxes imposed
  on the residence of a person 65 years of age or older or of the
  surviving spouse of such a person, if the surviving spouse was 55
  years of age or older when the person died, may not be increased
  above the amount paid in the first year after the person turned 65,
  regardless of changes in tax rate or property value.";
               (8)  contain the following statement in bold
  print:  "Notice of Rollback Rate:  The highest tax rate the
  district can adopt before requiring voter approval at an election
  is (the school district rollback rate determined under Section
  26.08, Tax Code).  This election will be automatically held if the
  district adopts a rate in excess of the rollback rate of (the school
  district rollback rate)."; and
               (9)  contain a section entitled "Fund Balances," which
  must include the estimated amount of interest and sinking fund
  balances and the estimated amount of maintenance and operation or
  general fund balances remaining at the end of the current fiscal
  year that are not encumbered with or by corresponding debt
  obligation, less estimated funds necessary for the operation of the
  district before the receipt of the first payment under Chapter 42 in
  the succeeding school year.
         (c-1)  The notice described by Subsection (c) must state in a
  distinct row or on a separate or individual line for each of the
  following taxes:
               (1)  the proposed rate of the school district's
  enrichment [maintenance] tax described by Section 45.003, under the
  heading "Enrichment [Maintenance] Tax"; and
               (2)  if the school district has issued ad valorem tax
  bonds under Section 45.001, the proposed rate of the tax to pay for
  the bonds, under the heading "School Debt Service Tax Approved by
  Local Voters."
         SECTION 2.34.  Section 45.002, Education Code, is amended to
  read as follows:
         Sec. 45.002.  ENRICHMENT [MAINTENANCE] TAXES. (a)  The
  governing board of an independent school district, including the
  city council or commission that has jurisdiction over a municipally
  controlled independent school district, the governing board of a
  rural high school district, and the commissioners court of a
  county, on behalf of each common school district under its
  jurisdiction, may levy, assess, and collect annual ad valorem taxes
  for the purpose of providing an enriched educational program 
  [further maintenance of public schools] in the district, subject to
  Section 45.003.
         (b)  A reference in law to a school district maintenance tax
  or rate or a maintenance and operations tax or rate means an
  enrichment tax or rate authorized by this section.
         SECTION 2.35.  Section 45.003(d), Education Code, is amended
  to read as follows:
         (d)  A proposition submitted to authorize the levy of
  enrichment [maintenance] taxes must include the question of whether
  the governing board or commissioners court may levy, assess, and
  collect annual ad valorem enrichment taxes [for the further
  maintenance of public schools,] at a rate not to exceed the rate
  stated in the proposition.  For any year, the enrichment
  [maintenance] tax rate per $100 of taxable value adopted by the
  district may not exceed the rate [equal to the sum] of $0.17 [and
  the product of the state compression percentage,
  as     determined     under Section 42.2516, multiplied by $1.50].
         SECTION 2.36.  Section 45.104(a), Education Code, is amended
  to read as follows:
         (a)  The board of trustees of any school district may pledge
  its delinquent taxes levied for enrichment [maintenance] purposes
  for specific past, current, and future school years as security for
  a loan, and may evidence any such loan with negotiable notes, and
  the delinquent taxes pledged shall be applied against the principal
  and interest of the loan. Negotiable notes issued under this
  subsection must mature not more than 20 years from their date.
         SECTION 2.37.  Section 45.108(a), Education Code, is amended
  to read as follows:
         (a)  Independent or consolidated school districts may borrow
  money for the purpose of paying maintenance expenses and may
  evidence those loans with negotiable notes, except that the loans
  may not at any time exceed 75 percent of the previous year's income.
  The notes may be payable from and secured by a lien on and pledge of
  any available funds of the district, including proceeds of an
  enrichment [a maintenance] tax. The term "maintenance expenses" or
  "maintenance expenditures" as used in this section means any lawful
  expenditure of the school district other than payment of principal
  of and interest on bonds. The term includes all costs incurred in
  connection with environmental cleanup and asbestos cleanup and
  removal programs implemented by school districts or in connection
  with the maintenance, repair, rehabilitation, or replacement of
  heating, air conditioning, water, sanitation, roofing, flooring,
  electric, or other building systems of existing school properties.
  Notes issued pursuant to this section may be issued to mature in not
  more than 20 years from their date. Notes issued for a term longer
  than one year must be treated as "debt" as defined in Section
  26.012(7), Tax Code.
         SECTION 2.38.  Sections 45.109(c) and (d), Education Code,
  are amended to read as follows:
         (c)  The consideration for a contract under this section may
  be paid from any source available to the independent school
  district. If voted as provided by this section, the district may
  pledge to the payment of the contract an annual enrichment
  [maintenance] tax in an amount sufficient, without limitation, to
  provide all of the consideration. If voted and pledged, the
  enrichment [maintenance] tax shall be assessed, levied, and
  collected annually in the same manner as provided by general law
  applicable to independent school districts for other enrichment
  [maintenance] taxes.
         (d)  An enrichment [A maintenance] tax may not be pledged to
  the payment of any contract under this section or assessed, levied,
  or collected unless an election is held in the district and the
  enrichment [maintenance] tax is favorably voted by a majority of
  the qualified voters of the district voting at the election. The
  election order for an election under this subsection must include
  the polling place or places and any other matters considered
  advisable by the board of trustees.
         SECTION 2.39.  Section 45.111(b), Education Code, is amended
  to read as follows:
         (b)  The governing body of the district shall provide for the
  payment of the certificates issued under this section by
  appropriating and pledging local school funds derived from
  enrichment [maintenance] taxes levied and assessed under Section 
  [Sections] 45.002 and maintenance taxes levied and assessed under
  Section 130.122; Chapter 273, Acts of the 53rd Legislature, Regular
  Session, 1953 (Article 2784g, Vernon's Texas Civil Statutes); or
  other similar law that limits the amount of tax that may be levied
  for enrichment or maintenance purposes, as distinguished from bond
  requirements. The appropriation and pledge may be in the nature of
  a continuing irrevocable pledge to apply the first moneys collected
  annually from the tax levy to the payment of the obligations or by
  the irrevocable present levy and appropriation of the amount of the
  enrichment or maintenance tax required to meet the annual debt
  service requirements of the obligations, in which event the
  governing body shall covenant to annually set aside the amount in
  the annual tax levy, showing the same is a portion of the enrichment
  or maintenance tax. The governing body shall annually budget the
  amount required to pay the principal and interest of the
  obligations that may be scheduled to become due in any fiscal year.
  This section may not be construed as permitting the levy of an
  enrichment or [a] maintenance tax in excess of the amount approved
  by the qualified voters of the district.
         SECTION 2.40.  Section 45.156(c), Education Code, is amended
  to read as follows:
         (c)  The consideration payable by the district under a
  contract may be paid from any source available to the district. If
  voted, the district may pledge to the payment of the contract an
  annual enrichment [maintenance] tax in an amount sufficient,
  without limitation, to provide all or part of the consideration. If
  voted and pledged, the enrichment [maintenance] tax shall be
  assessed, levied, and collected annually in the same manner as
  provided by general law applicable to independent school districts
  for other enrichment [maintenance] taxes. An enrichment [A
  maintenance] tax may not be pledged to the payment of any contract
  or assessed, levied, or collected unless an election is held in the
  district, and the enrichment [maintenance] tax for that purpose is
  favorably voted by a majority of the qualified voters of the
  district. The election order for an election under this subsection
  must include the polling place or places and any other matters
  considered advisable by the board of trustees.
         SECTION 2.41.  Section 45.251(2), Education Code, is amended
  to read as follows:
               (2)  "Foundation School Program" means the program
  established under Chapters [41,] 42[,] and 46, or any successor
  program of state appropriated funding for school districts in this
  state.
         SECTION 2.42.  Section 45.261(a), Education Code, is amended
  to read as follows:
         (a)  If the commissioner orders payment from the money
  appropriated to the Foundation School Program on behalf of a school
  district [that is not required to reduce its wealth per student
  under Chapter 41], the commissioner shall direct the comptroller to
  withhold the amount paid from the first state money payable to the
  district.  [If the commissioner orders payment from the money
  appropriated to the Foundation School Program on behalf of a school
  district that is required to reduce its wealth per student under
  Chapter 41, the commissioner shall increase amounts due from the
  district under that chapter in a total amount equal to the amount of
  payments made on behalf of the district under this subchapter.]  
  Amounts withheld [or received] under this subsection shall be used
  for the Foundation School Program.
         SECTION 2.43.  Section 46.003(d), Education Code, is amended
  to read as follows:
         (d)  The amount budgeted by a district for payment of
  eligible bonds may include:
               (1)  bond taxes collected in the current school year;
               (2)  bond taxes collected in a preceding school year in
  excess of the amount necessary to pay the district's share of actual
  debt service on bonds in that year, provided that the taxes were not
  used to generate other state financial assistance for the district;
  [or]
               (3)  enrichment [maintenance and operations] taxes
  collected in the current school year or a preceding school year in
  excess of the amount eligible to be used to generate other state
  financial assistance for the district; or
               (4)  maintenance and operations taxes collected in a
  preceding school year in excess of the amount eligible to be used to
  generate other state financial assistance for the district.
         SECTION 2.44.  Section 46.004(a), Education Code, is amended
  to read as follows:
         (a)  A district may receive state assistance in connection
  with a lease-purchase agreement concerning an instructional
  facility. For purposes of this subchapter:
               (1)  taxes levied for purposes of enrichment
  [maintenance and operations] that are necessary to pay a district's
  share of the payments under a lease-purchase agreement for which
  the district receives state assistance under this subchapter are
  considered to be bond taxes; and
               (2)  payments under a lease-purchase agreement are
  considered to be payments of principal of and interest on bonds.
         SECTION 2.45.  Section 46.032(c), Education Code, is amended
  to read as follows:
         (c)  The amount budgeted by a district for payment of
  eligible bonds may include:
               (1)  bond taxes collected in the current school year;
               (2)  bond taxes collected in a preceding school year in
  excess of the amount necessary to pay the district's share of actual
  debt service on bonds in that year, provided that the taxes were not
  used to generate other state financial assistance for the district;
  [or]
               (3)  enrichment [maintenance and operations] taxes
  collected in the current school year or a preceding school year in
  excess of the amount eligible to be used to generate other state
  financial assistance for the district; or
               (4)  maintenance and operations taxes collected in a
  preceding school year in excess of the amount eligible to be used to
  generate other state financial assistance for the district.
         SECTION 2.46.  Section 78.10(g), Education Code, is amended
  to read as follows:
         (g)  For each student enrolled in the academy, the academy is
  entitled to allotments from the foundation school fund under
  Chapter 42 as if the academy were a school district [without a tier
  one local share for purposes of Section 42.253]. If in any academic
  year the amount of the allotments under this subsection exceeds the
  amount of state funds paid to the academy in the first fiscal year
  of the academy's operation, the commissioner of education shall set
  aside from the total amount of funds to which school districts are
  entitled under Section 42.253(c) an amount equal to the excess
  amount and shall distribute that amount to the academy.  After
  deducting the amount set aside and paid to the academy by the
  commissioner of education under this subsection, the commissioner
  of education shall reduce the amount to which each district is
  entitled under Section 42.253(c) in the manner described by Section
  42.253(h). A determination of the commissioner of education under
  this subsection is final and may not be appealed.
         SECTION 2.47.  Section 87.208, Education Code, is amended to
  read as follows:
         Sec. 87.208.  SEABORNE CONSERVATION CORPS. If the board of
  regents of The Texas A&M University System administers a program
  that is substantially similar to the Seaborne Conservation Corps as
  it was administered by the board during the 1998-1999 school year,
  the program is entitled, for each student enrolled, to allotments
  from the Foundation School Program under Chapter 42 as if the
  program were a school district[, except that the program has a local
  share applied that is equivalent to the local fund assignment of the
  school district in which the principal facilities of the program
  are located].
         SECTION 2.48.  Section 87.505(g), Education Code, is amended
  to read as follows:
         (g)  For each student enrolled in the academy, the academy is
  entitled to allotments from the foundation school fund under
  Chapter 42 as if the academy were a school district [without a tier
  one local share for purposes of Section 42.253]. If in any academic
  year the amount of the allotments under this subsection exceeds the
  amount of state funds paid to the academy in the first fiscal year
  of the academy's operation, the commissioner of education shall set
  aside from the total amount of funds to which school districts are
  entitled under Section 42.253(c) an amount equal to the excess
  amount and shall distribute that amount to the academy. After
  deducting the amount set aside and paid to the academy by the
  commissioner of education under this subsection, the commissioner
  of education shall reduce the amount to which each district is
  entitled under Section 42.253(c) in the manner described by Section
  42.253(h). A determination of the commissioner of education under
  this subsection is final and may not be appealed.
         SECTION 2.49.  Section 96.707(k), Education Code, is amended
  to read as follows:
         (k)  For each student enrolled in the academy, the academy is
  entitled to allotments from the Foundation School Program under
  Chapter 42 as if the academy were a school district[, except that
  the academy has a local share applied that is equivalent to the
  local fund assignment of the Beaumont Independent School District].
         SECTION 2.50.  Section 105.301(e), Education Code, is
  amended to read as follows:
         (e)  The academy is not subject to the provisions of this
  code, or to the rules of the Texas Education Agency, regulating
  public schools, except that:
               (1)  professional employees of the academy are entitled
  to the limited liability of an employee under Section 22.0511,
  22.0512, or 22.052;
               (2)  a student's attendance at the academy satisfies
  compulsory school attendance requirements; and
               (3)  for each student enrolled, the academy is entitled
  to allotments from the foundation school program under Chapter 42
  as if the academy were a school district [without a tier one local
  share for purposes of Section 42.253].
         SECTION 2.51.  Section 403.302(a), Government Code, is
  amended to read as follows:
         (a)  The comptroller shall conduct a study using comparable
  sales and generally accepted auditing and sampling techniques to
  determine the total taxable value of all property in each school
  district. The study shall determine the taxable value of all
  property and of each category of property in the district and the
  productivity value of all land that qualifies for appraisal on the
  basis of its productive capacity and for which the owner has applied
  for and received a productivity appraisal.  [The comptroller shall
  make appropriate adjustments in the study to account for actions
  taken under Chapter 41, Education Code.]
         SECTION 2.52.  Section 21.01, Tax Code, is amended to read as
  follows:
         Sec. 21.01.  REAL PROPERTY. Real property is taxable by a
  taxing unit if located in the unit on January 1[, except as provided
  by Chapter 41, Education Code].
         SECTION 2.53.  Section 21.02(a), Tax Code, is amended to
  read as follows:
         (a)  Except as provided by Subsection [Subsections (b) and]
  (e) and by Sections 21.021, 21.04, and 21.05, tangible personal
  property is taxable by a taxing unit if:
               (1)  it is located in the unit on January 1 for more
  than a temporary period;
               (2)  it normally is located in the unit, even though it
  is outside the unit on January 1, if it is outside the unit only
  temporarily;
               (3)  it normally is returned to the unit between uses
  elsewhere and is not located in any one place for more than a
  temporary period; or
               (4)  the owner resides (for property not used for
  business purposes) or maintains the owner's principal place of
  business in this state (for property used for business purposes) in
  the unit and the property is taxable in this state but does not have
  a taxable situs pursuant to Subdivisions (1) through (3) [of this
  subsection].
         SECTION 2.54.  Section 26.08(n), Tax Code, is amended to
  read as follows:
         (n)  For purposes of this section, the rollback tax rate of a
  school district [whose maintenance and operations tax rate for the
  2005 tax year was $1.50 or less per $100 of taxable value] is:
               (1)  for the 2014 [2006] tax year:
                     (A)  for a district whose maintenance and
  operations ad valorem tax rate for the 2013 tax year was at least $1
  per $100 of taxable value, the sum of the following:
                           (i)  the rate that is equal to the greater of
  $0.04 per $100 of taxable value or the difference between the
  maintenance and operations ad valorem tax rate of the district for
  the 2013 tax year and the rate of $1 per $100 of taxable value; and
                           (ii)  the district's current debt rate; and
                     (B)  for a district whose maintenance and
  operations ad valorem tax rate for the 2013 tax year was less than
  $1 per $100 of taxable value, the district's current debt rate; [,
  the sum of the rate that is equal to 88.67 percent of the
  maintenance and operations tax rate adopted by the district for the
  2005 tax year, the rate of $0.04 per $100 of taxable value, and the
  district's current debt rate; and]
               (2)  for the 2015, 2016, and 2017 [2007 and subsequent]
  tax years:
                     (A)  for a district described by Subdivision
  (1)(A), the sum of the following:
                           (i)  the rate described by Subdivision
  (1)(A)(i);
                           (ii)  the rate that is equal to the sum of
  the differences for the 2014 and each subsequent tax year between
  the adopted tax rate of the district for that year if the rate was
  approved at an election under this section and the rollback tax rate
  of the district for that year; and
                           (iii)  the district's current debt rate; and
                     (B)  for a district described by Subdivision
  (1)(B), the sum of the following:
                           (i)  the rate that is equal to the sum of the
  differences for the 2014 and each subsequent tax year between the
  adopted tax rate of the district for that year if the rate was
  approved at an election under this section and the rollback tax rate
  of the district for that year; and
                           (ii)  the district's current debt rate; and
               (3)  for the 2018 and subsequent tax years:
                     (A)  for a district described by Subdivision
  (1)(A), the sum of the following:
                           (i)  the rate described by Subdivision
  (1)(A)(i);
                           (ii)  the rate that is equal to the sum of
  the differences for the 2014 and each subsequent tax year between
  the adopted tax rate of the district for that year if the rate was
  approved at an election under this section and the rollback tax rate
  of the district for that year; and
                           (iii)  the district's current debt rate; and
                     (B)  for a district described by Subdivision
  (1)(B), the sum of the following:
                           (i)  the rate that is equal to the greater of
  $0.04 per $100 of taxable value or the sum of the differences for
  the 2014 and each subsequent tax year between the adopted tax rate
  of the district for that year if the rate was approved at an
  election under this section and the rollback tax rate of the
  district for that year; and
                           (ii)  the district's current debt rate[, the
  lesser of the following:
                     [(A)  the sum of the following:
                           [(i)     the rate per $100 of taxable value that
  is equal to the product of the state compression percentage, as
  determined under Section 42.2516, Education Code, for the current
  year and $1.50;
                           [(ii)     the rate of $0.04 per $100 of taxable
  value;
                           [(iii)     the rate that is equal to the sum of
  the differences for the 2006 and each subsequent tax year between
  the adopted tax rate of the district for that year if the rate was
  approved at an election under this section and the rollback tax rate
  of the district for that year; and
                           [(iv)  the district's current debt rate; or
                     [(B)  the sum of the following:
                           [(i)     the effective maintenance and
  operations tax rate of the district as computed under Subsection
  (i) or (k), as applicable;
                           [(ii)     the rate per $100 of taxable value
  that is equal to the product of the state compression percentage, as
  determined under Section 42.2516, Education Code, for the current
  year and $0.06; and
                           [(iii)  the district's current debt rate].
         SECTION 2.55.  Section 312.210(b), Tax Code, is amended to
  read as follows:
         (b)  A tax abatement agreement with the owner of real
  property or tangible personal property that is located in the
  reinvestment zone described by Subsection (a) and in a school
  district [that has a wealth per student that does not exceed the
  equalized wealth level] must exempt from taxation:
               (1)  the portion of the value of the property in the
  amount specified in the joint agreement among the municipality,
  county, and junior college district; and
               (2)  an amount equal to 10 percent of the maximum
  portion of the value of the property that may under Section
  312.204(a) be otherwise exempted from taxation.
  ARTICLE 3.  REPEALER; TRANSITION; EFFECTIVE DATE
         SECTION 3.01.  (a) The following provisions of the
  Education Code are repealed:
               (1)  Section 7.055(b)(34);
               (2)  Section 8.056;
               (3)  Sections 13.054(f) and (g);
               (4)  Section 29.203(g);
               (5)  Chapter 41;
               (6)  Sections 42.101(c-1) and (c-2);
               (7)  Section 42.158(e);
               (8)  Section 42.160(b);
               (9)  Section 42.2516;
               (10)  Section 42.252;
               (11)  Section 42.2523(c);
               (12)  Sections 42.2524(f) and (g);
               (13)  Section 42.253(c-1);
               (14)  Sections 42.259(a), (c), and (d);
               (15)  Section 42.261;
               (16)  Sections 42.302(a-2) and (f);
               (17)  Section 42.303; and
               (18)  Section 45.003(f).
         (b)  The following sections of Chapter 4 (S.B. 1), Acts of
  the 82nd Legislature, 1st Called Session, 2011, which are effective
  September 1, 2017, are repealed:
               (1)  Section 57.03, which amended Section 12.106(a),
  Education Code;
               (2)  Section 57.18, which amended the heading to
  Section 42.2516, Education Code;
               (3)  Section 57.19, which amended Section 42.2516(a),
  Education Code;
               (4)  Section 57.23, which amended Section 42.253(h),
  Education Code;
               (5)  Section 57.29, which amended Section 26.08(i), Tax
  Code; and
               (6)  Section 57.32, which repealed the following
  provisions:
                     (A)  Sections 41.0041, 42.25161, 42.2523(c),
  42.2524(g), 42.253(c-1), and 42.261, Education Code;
                     (B)  Sections 42.2516(b), (b-1), (b-2), (c), (d),
  (e), (f), (f-1), (f-2), (f-3), and (i), Education Code; and
                     (C)  Sections 26.08(i-1) and (j), Tax Code.
         (c)  The following provisions of the Tax Code are repealed:
               (1)  Sections 11.26(a-2) and (a-3);
               (2)  Sections 21.02(b) and (c);
               (3)  Section 25.25(k);
               (4)  Sections 26.08(i), (i-1), (j), (o), and (p); and
               (5)  Section 312.210(c).
         SECTION 3.02.  (a) Sections 45.002 and 45.003, Education
  Code, as amended by this Act, apply beginning with the 2014 tax
  year.
         (b)  The changes in law made by this Act to Sections 45.002
  and 45.003, Education Code, do not affect the authority of a school
  district to collect and use delinquent ad valorem taxes authorized
  under those sections for the 2013 or an earlier tax year.
         SECTION 3.03.  Except as otherwise provided by this Act, the
  changes in law made by this Act to the Education Code apply
  beginning with the 2014-2015 school year.
         SECTION 3.04.  The changes in law made by this Act to Chapter
  41, Tax Code, apply only to a challenge or protest under that
  chapter for which the challenge petition or notice of protest is
  filed on or after the effective date of this Act.  A challenge or
  protest for which the challenge petition or notice of protest was
  filed before the effective date of this Act is covered by the law in
  effect when the petition or notice was filed, and the former law is
  continued in effect for that purpose.
         SECTION 3.05.  The changes in law made by this Act apply to
  each tax year that begins on or after January 1, 2014. The changes
  in law do not apply to a tax year that begins before January 1, 2014,
  and the law as it existed before January 1, 2014, is continued in
  effect for purposes of taxes imposed in that tax year.
         SECTION 3.06.  This Act takes effect January 1, 2014, but
  only if the constitutional amendment proposed by the 83rd
  Legislature, Regular Session, 2013, imposing a state property tax
  for public education, authorizing the legislature to establish for
  purposes of that tax a limit on the maximum appraised value of a
  residence homestead of 105 percent of the appraised value of the
  property for the preceding tax year, prohibiting school district
  property taxes for maintenance purposes, and authorizing school
  district property taxes for educational enrichment is approved by
  the voters. If that amendment is not approved by the voters, this
  Act has no effect.
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