83R4607 GCB-F
	By: Lucio	S.B. No. 712

	A BILL TO BE ENTITLED
	AN ACT
	relating to the financing of school district facilities and
	property tax relief for school district debt; providing for reduced
	property tax rates.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  The heading to Chapter 46, Education Code, is
	amended to read as follows:
	CHAPTER 46. ASSISTANCE WITH SCHOOL [INSTRUCTIONAL] FACILITIES AND
	PROPERTY TAX RELIEF FOR [PAYMENT OF] EXISTING DEBT
	SECTION 2.  The heading to Subchapter A, Chapter 46,
	Education Code, is amended to read as follows:
	SUBCHAPTER A.  INITIAL INSTRUCTIONAL FACILITIES ALLOTMENT
	SECTION 3.  The heading to Section 46.003, Education Code,
	is amended to read as follows:
	Sec. 46.003.  INITIAL SCHOOL FACILITIES ALLOTMENT.
	SECTION 4.  Sections 46.003(a), (d), (e), and (h), Education
	Code, are amended to read as follows:
	(a)  In the second year of the state fiscal biennium in which
	the bonds are issued [For each year], except as provided by Section
	[Sections] 46.005 [and 46.006], a school district is guaranteed a
	specified amount per student in state and local funds for each cent
	of tax effort, up to the maximum rate under Subsection (b), to pay
	the principal of and interest on eligible bonds issued to
	construct, acquire, renovate, or improve an instructional
	facility. The amount of state support is determined by the formula:
	FYA = (FYL X ADA X BTR X 100) - (BTR X (DPV/100))
	where:
	"FYA" is the guaranteed facilities yield amount of state
	funds allocated to the district for the year;
	"FYL" is the dollar amount guaranteed level of state and
	local funds per student per cent of tax effort, which is the amount
	of district tax revenue per student in average daily attendance per
	cent of tax effort available to a district at the ____ percentile in
	wealth per student in average daily attendance, as determined by
	the commissioner in cooperation with the Legislative Budget Board,
	[$35] or a greater amount for any year provided by appropriation;
	"ADA" is the greater of the number of students in average
	daily attendance, as determined under Section 42.005, in the
	district or 400;
	"BTR" is the district's bond tax rate for the current year,
	which is determined by dividing the amount budgeted by the district
	for payment of eligible bonds by the quotient of the district's
	taxable value of property as determined under Subchapter M, Chapter
	403, Government Code, or, if applicable, Section 42.2521, divided
	by 100; and
	"DPV" is the district's taxable value of property as
	determined under Subchapter M, Chapter 403, Government Code, or, if
	applicable, Section 42.2521.
	(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)  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)  penalty and interest on delinquent taxes, interest
	on bond tax revenue, and any other available local revenue received
	in the current school year or a preceding school year, provided that
	the revenue was not used to generate other state financial
	assistance for the district.
	(e)  Bonds are eligible to be paid with state and local funds
	under this section if[:
	[(1)     taxes to pay the principal of and interest on the
	bonds were first levied in the 1997-1998 school year or a later
	school year; and
	[(2)]  the bonds do not have a weighted average
	maturity of less than eight years.
	(h)  To receive state assistance under this subchapter, a
	school district must certify [apply] to the commissioner, in
	accordance with rules adopted by the commissioner, the amount of
	the payment due on the [before issuing] bonds that will be paid with
	state assistance that year. [Until the bonds are fully paid or the
	instructional facility is sold:
	[(1)     a school district is entitled to continue
	receiving state assistance without reapplying to the commissioner;
	and
	[(2)     the guaranteed level of state and local funds per
	student per cent of tax effort applicable to the bonds may not be
	reduced below the level provided for the year in which the bonds
	were issued.]
	SECTION 5.  Section 46.005, Education Code, is amended to
	read as follows:
	Sec. 46.005.  LIMITATION ON GUARANTEED AMOUNT. (a)  The
	guaranteed amount of state and local funds to which a school
	district is entitled [for a new project that a district may be
	awarded in any state fiscal biennium] under Section 46.003 [for a
	school district] may not exceed the lesser of:
	(1)  the amount of [the] actual debt service payments
	the district makes in the biennium in which the bonds are issued; or
	(2)  the greater of:
	(A)  $___________ [$100,000]; or
	(B)  the product of the number of students in
	average daily attendance in the district multiplied by $________
	[$250].
	(b)  A school district may not receive state assistance for a
	project under this subchapter for more than one year. After that
	year, the district is entitled to state assistance for that project
	only as provided by Subchapter B.
	SECTION 6.  The heading to Section 46.009, Education Code,
	is amended to read as follows:
	Sec. 46.009.  PAYMENT OF INITIAL SCHOOL FACILITIES
	ALLOTMENTS.
	SECTION 7.  Section 46.009, Education Code, is amended by
	amending Subsection (b) and adding Subsection (b-1) to read as
	follows:
	(b)  The total amount of money to which a district is
	entitled under this subchapter is a portion of the total amount of
	the district's entitlement under this chapter and is not a separate
	item subject to specific appropriation. If the amount available
	[appropriated] for purposes of this subchapter for a year is less
	than the total amount determined under Subsection (a) for that
	year, the commissioner shall[:
	[(1)]  transfer from the Foundation School Program to
	the instructional facilities program the amount by which the total
	amount determined under Subsection (a) exceeds the amount
	available.
	(b-1)  If as a result of the transfer made under Subsection
	(b) there are insufficient funds in the Foundation School Program
	to pay for the program as required under Section 42.253, the
	commissioner shall [appropriated; and
	[(2)]  reduce each district's foundation school fund
	allocations for that year and increase each district's foundation
	school fund allocations for the following year in the manner
	provided by Section 42.253(h).
	SECTION 8.  Section 46.0111(a)(2), Education Code, is
	amended to read as follows:
	(2)  "State's share" means an amount equal to the
	district's net proceeds from the recovery multiplied by a
	percentage determined by dividing the amount of state assistance
	under this chapter [subchapter] used to pay the principal of and
	interest on bonds issued in connection with the instructional
	facility that is the subject of the action by the total amount of
	principal and interest paid on the bonds as of the date of the
	judgment or settlement.
	SECTION 9.  Sections 46.0111(b) and (d), Education Code, are
	amended to read as follows:
	(b)  A school district that brings an action for recovery of
	damages for the defective design, construction, renovation, or
	improvement of an instructional facility financed by bonds for
	which the district receives state assistance under this chapter
	[subchapter] shall provide the commissioner with written notice of
	the action.
	(d)  A school district shall use the net proceeds from an
	action brought by the district for the defective design,
	construction, renovation, or improvement of an instructional
	facility financed by bonds for which the district receives state
	assistance under this chapter [subchapter] to repair the defective
	design, construction, renovation, or improvement of the
	instructional facility on which the action is brought or to replace
	the facility.  Section 46.008 applies to the repair.
	SECTION 10.  The heading to Subchapter B, Chapter 46,
	Education Code, is amended to read as follows:
	SUBCHAPTER B.  [ASSISTANCE WITH PAYMENT OF EXISTING] DEBT TAX
	RELIEF
	SECTION 11.  The heading to Section 46.032, Education Code,
	is amended to read as follows:
	Sec. 46.032.  DEBT TAX RELIEF ALLOTMENT.
	SECTION 12.  Section 46.032, Education Code, is amended by
	amending Subsections (a) and (c) and adding Subsections (a-1),
	(a-2), and (d) to read as follows:
	(a)  Each school district is guaranteed a specified amount
	per student in state and local funds for each cent of tax effort to
	pay the principal of and interest on eligible bonds. The amount of
	state support, subject only to the maximum amount under Section
	46.034, is determined by the formula:
	DTRA [EDA] = (EDGL X ADA X EDTR X 100) - (EDTR X (DPV/100))
	where:
	"DTRA" ["EDA"] is the amount of state funds to be allocated to
	the district for reduction of the [assistance with] existing debt
	tax rate;
	"EDGL" is the dollar amount guaranteed level of state and
	local funds per student per cent of tax effort, which is the
	greatest of the amount of district tax revenue per student in
	average daily attendance per cent of tax effort available to a
	district at the ____ percentile in wealth per student in average
	daily attendance, as determined by the commissioner in cooperation
	with the Legislative Budget Board, the amount of district tax
	revenue per student per cent of tax effort used for purposes of this
	subchapter in the preceding year, [$35] or a specified [greater]
	amount for any year provided by appropriation;
	"ADA" is the greater of the number of students in average
	daily attendance, as determined under Section 42.005, in the
	district or 400;
	"EDTR" is the existing debt tax rate of the district, which is
	determined by dividing the amount budgeted by the district for
	payment of eligible bonds 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
	"DPV" is the district's taxable value of property as
	determined under Subchapter M, Chapter 403, Government Code, or, if
	applicable, under Section 42.2521.
	(a-1)  The percentile in wealth per student described by
	Subsection (a) for purposes of determining the dollar amount
	guaranteed level of state and local funds ("EDGL") applies
	beginning with the 2018-2019 school year. For the 2013-2014
	through 2017-2018 school years, "EDGL" is determined as follows:
	(1)  for the 2013-2014 school year, "EDGL" is $35;
	(2)  for the 2014-2015 school year, "EDGL" is
	determined under Subsection (a) using the ____ percentile in wealth
	per student;
	(3)  for the 2015-2016 school year, "EDGL" is
	determined under Subsection (a) using the ____ percentile in wealth
	per student;
	(4)  for the 2016-2017 school year, "EDGL" is
	determined under Subsection (a) using the ____ percentile in wealth
	per student; and
	(5)  for the 2017-2018 school year, "EDGL" is
	determined under Subsection (a) using the ____ percentile in wealth
	per student.
	(a-2)  Subsection (a-1) and this subsection expire September
	1, 2018.
	(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)  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)  penalty and interest on delinquent taxes, interest
	on bond tax revenue, and any other available local revenue received
	in the current school year or a preceding school year, provided that
	the revenue was not used to generate other state financial
	assistance for the district.
	(d)  A school district shall reduce the tax rate levied by
	the district for payment of eligible bonds by a percentage
	established by the commissioner to account for an increase in the
	yield guaranteed under Subsection (a) or an increase in the yield
	produced by a higher yield under this subchapter over the yield
	received by the district before the bonds became eligible for
	assistance under this subchapter.
	SECTION 13.  Section 46.033, Education Code, is amended to
	read as follows:
	Sec. 46.033.  ELIGIBLE BONDS. Bonds, including bonds issued
	under Section 45.006, are eligible to be paid with state and local
	funds under this subchapter if during the final school year of the
	preceding state fiscal biennium:
	(1)  the district:
	(A)  made payments on the bonds;
	(B)  [during the final school year of the
	preceding state fiscal biennium or taxes] levied taxes to pay the
	principal of and interest on the bonds that were included in the
	district's audited debt service collections; or
	(C)  received [for that school year; and (2)   the
	district does not receive] state assistance under Subchapter A for
	payment of [the] principal of and interest on [the] bonds; and
	(2)  the district certifies to the commissioner in
	accordance with rules adopted by the commissioner the amount of
	payments due on the bonds in each year of the subsequent state
	fiscal biennium.
	SECTION 14.  Section 46.034, Education Code, is amended by
	amending Subsections (a) and (c) and adding Subsection (d) to read
	as follows:
	(a)  The existing debt tax rate ("EDTR") under Section 46.032
	may not exceed $_____ [$0.29] per $100 of valuation, or a greater
	amount for any year provided by appropriation.
	(c)  Except as provided by Subsection (d), if [If] the amount
	required to pay the principal of and interest on eligible bonds in a
	school year is less than the amount of payments made by the district
	on the bonds during the final school year of the preceding state
	fiscal biennium or the district's audited debt service collections
	for that school year, the district may not receive aid in excess of
	the amount that, when added to the district's local revenue for the
	school year, equals the amount required to pay the principal of and
	interest on the bonds.
	(d)  A school district is entitled to state assistance under
	this subchapter based on the district's tax rate for the current
	school year if the district demonstrates to the commissioner's
	satisfaction that the district must construct, acquire, renovate,
	or improve one or more instructional facilities to serve the
	children of military personnel transferred to a military
	installation in or near the district under the Defense Base Closure
	and Realignment Act of 1990 (10 U.S.C. Section 2687).
	SECTION 15.  The heading to Subchapter C, Chapter 46,
	Education Code, is amended to read as follows:
	SUBCHAPTER C.  FINANCING AND REFINANCING
	SECTION 16.  Subchapter C, Chapter 46, Education Code, is
	amended by adding Section 46.051 to read as follows:
	Sec. 46.051.  DETERMINATION BY COMMISSIONER OF GUARANTEED
	YIELDS AND PERCENTAGE REDUCTION OF DISTRICT DEBT TAX RATES. (a)
	Before the beginning of each school year, the commissioner, in
	cooperation with the Legislative Budget Board, shall estimate the
	guaranteed yields under Subchapters A and B.
	(b)  As required under Section 46.032(d), the commissioner
	shall determine the percentage by which a district is required to
	reduce the district's debt tax rate to account for an increase in
	the guaranteed yield over the preceding year.
	SECTION 17.  Section 46.061, Education Code, is amended to
	read as follows:
	Sec. 46.061.  AUTHORITY OF COMMISSIONER OVER [STATE
	ASSISTANCE FOR] REFINANCING. [(a)] The commissioner by rule may
	provide for the payment of state assistance under this chapter to
	refinance school district debt. A refinancing may not increase the
	cost to the state of providing the assistance.
	[(b)     The commissioner may allocate state assistance
	provided for a refinancing to Subchapter A, Subchapter B, or both,
	as appropriate.]
	SECTION 18.  The following sections of the Education Code
	are repealed:
	(1)  Section 46.006;
	(2)  Section 46.011; and
	(3)  Sections 46.034(b) and (b-1).
	SECTION 19.  This Act takes effect September 1, 2013.