Bill Text: TX SB2607 | 2023-2024 | 88th Legislature | Introduced

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Bill Title: Relating to the use of tax collections in determining certain state and local responsibilities for school funding.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (N/A - Dead) 2023-04-17 - Referred to Education [SB2607 Detail]

Download: Texas-2023-SB2607-Introduced.html

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2023S0364-1 04/11/23
By: Hinojosa S.B. No. 2607

A BILL TO BE ENTITLED
AN ACT
relating to the use of tax collections in determining certain state
and local responsibilities for school funding.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 46.003(a), Education Code, is amended to
read as follows:
(a) For each year, except as provided by 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) - BTRC [(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 $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 48.005, 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 48.258, divided by
100; and
"BTRC" is the collections at BTR tax rate ["DPV" is the
district's taxable value of property as determined under Subchapter
M, Chapter 403, Government Code, or, if applicable, Section
48.258].
SECTION 2. Section 46.032(a), Education Code, is amended 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:
EDA = (EDGL X ADA X EDTR X 100) - EDTRC [(EDTR X (DPV/100))]
where:
"EDA" is the amount of state funds to be allocated to the
district for assistance with existing debt;
"EDGL" is the dollar amount guaranteed level of state and
local funds per student per cent of tax effort, which is the lesser
of:
(1) $40 or a greater amount for any year provided by
appropriation; or
(2) the amount that would result in a total additional
amount of state funds under this subchapter for the current year
equal to $60 million in excess of the state funds to which school
districts would have been entitled under this section if the
guaranteed level amount were $35;
"ADA" is the number of students in average daily attendance,
as determined under Section 48.005, in the district;
"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 48.258, divided
by 100; and
"EDTRC" is the collections at the EDTR tax rate ["DPV" is the
district's taxable value of property as determined under Subchapter
M, Chapter 403, Government Code, or, if applicable, under Section
48.258].
SECTION 3. Section 48.202(a), Education Code, is amended to
read as follows:
(a) Each school district is guaranteed a specified amount
per weighted student in state and local funds for each cent of tax
effort over that required for the district's local fund assignment
up to the maximum level specified in this subchapter. The amount of
state support, subject only to the maximum amount under Section
48.203, 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 by the basic
allotment for the applicable year;
"DTR" is the district enrichment tax rate of the school
district, which is determined by subtracting the amounts specified
by Subsection (b) from the total amount of 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 48.258 or by the quotient of the value of "DPV" as
determined under Section 48.256(d) if that subsection applies to
the district, divided by 100; and
"LR" is the local revenue, which is the collections at the DTR
tax rate [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
48.258 or by the quotient of the value of "DPV" as determined under
Section 48.256(d) if that subsection applies to the district,
divided by 100].
SECTION 4. Section 48.256, Education Code, is amended to
read as follows:
Sec. 48.256. LOCAL SHARE OF PROGRAM COST (TIER ONE). (a)
Each school district's share of the Foundation School Program is
the district's maintenance and operations tax collections for the
current year at [determined by the following formula:
LFA = TR X DPV
[where:
["LFA" is the school district's local share;
["TR" is] the school district's adopted tier one maintenance
and operations tax rate, as described by Section 45.0032(a) for
each hundred dollars of valuation[; and
["DPV" is the taxable value of property in the school
district for the current tax year determined under Subchapter M,
Chapter 403, Government Code].
(b) The commissioner shall adjust the collections [values
reported by the comptroller] to reflect reductions [in taxable
value of property] resulting from natural or economic disaster in
the year in which the taxes are due [valuations are determined].
The decision of the commissioner is final. An adjustment does not
affect the local fund assignment of any other school district.
[(c) Appeals of district values shall be held pursuant to
Section 403.303, Government Code.
[(d) This subsection applies to a school district in which
the board of trustees entered into a written agreement with a
property owner under Section 313.027, Tax Code, for the
implementation of a limitation on appraised value under Subchapter
B or C, Chapter 313, Tax Code. For purposes of determining "DPV"
under Subsection (a) for a school district to which this subsection
applies, the commissioner shall exclude a portion of the market
value of property not otherwise fully taxable by the district under
Subchapter B or C, Chapter 313, Tax Code, before the expiration of
the subchapter. The comptroller shall provide information to the
agency necessary for this subsection. A revenue protection payment
required as part of an agreement for a limitation on appraised value
shall be based on the district's taxable value of property for the
preceding tax year.
[(e) Subsection (d) does not apply to property that was the
subject of an application under Subchapter B or C, Chapter 313, Tax
Code, made after May 1, 2009, that the comptroller recommended
should be disapproved.]
SECTION 5. Section 48.266, Education Code, is amended by
amending Subsections (a) and (e), 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, C, and D;
(2) the amount of money to which a school district is
entitled under Subchapter E;
(3) the amount of money allocated to the district from
the available school fund;
(4) the amount of each district's collections of the
district's tier one local share under Section 48.256; and
(5) the amount of each district's collections of the
district's tier two local share under Section 48.202 for:
(A) the district's maintenance and operations
tax effort described by Section 48.202(a-1)(1); and
(B) the district's maintenance and operations
tax effort described by Section 48.202(a-1)(2).
(e) If a school district demonstrates to the satisfaction of
the commissioner that the estimate of the district's tax rate,
collections, student enrollment, or taxable value of property used
in determining the amount of state funds to which the district is
entitled are so inaccurate as to result in undue financial hardship
to the district, the commissioner may adjust funding to that
district in that school year to the extent that funds are available
for that year.
SECTION 6. Section 48.258, Education Code, is amended to
read as follows:
Sec. 48.258. FAILURE TO COLLECT DELINQUENT MAINTENANCE AND
OPERATIONS TAXES. (a) The commissioner shall calculate an
ongoing five-year average collection ratio for the state and for
each district. The state average collection ratio is calculated by
dividing the total maintenance and operations collections for the
current year's taxes for all districts by the sum for all districts
of the product of the district's tax rate times the district's
taxable value of property for that year. The district collection
ratio is calculated by dividing the total maintenance and
operations collections for current and delinquent taxes, including
penalties and interest, by the product of the district's tax rate
times the district's taxable value of property for that year.
(b) If a district has a five-year average collection ratio
that is below the state average collection ratio, the amount of the
district's entitlement under this chapter is reduced by a
percentage equal to the difference between the statewide average
collection ratio and the district's average collection ratio.
(c) All taxes, penalties, and fees collected under this
section are included in the district's collections under Section
48.256 in the year in which they are collected.
(d) The comptroller may contract with private attorneys for
the collection of maintenance and operations taxes delinquent for
more than five years, subject to the terms and limitations that
apply to a school district contracting with private attorneys for
that purpose. [ADJUSTMENT FOR RAPID DECLINE IN TAXABLE VALUE OF
PROPERTY. (a) For purposes of Chapters 46 and 49 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.
[(b) To the extent that a sufficient amount of money is not
available to fund all adjustments under this section, the
commissioner shall reduce adjustments in the manner provided by
Section 48.266(f) so that the total amount of adjustments equals
the amount of money available to fund the adjustments.
[(c) A decision of the commissioner under this section is
final and may not be appealed.]
SECTION 7. Section 48.259, Education Code, is amended to
read as follows:
Sec. 48.259. DELINQUENT MAINTENANCE AND OPERATIONS TAX
COLLECTION. (a) If the collection of delinquent maintenance and
operations taxes of a district not previously required to take
action under Chapter 49 results in the district being subject to
Chapter 49 only for the year in which the delinquent taxes are
collected, the commissioner shall permit the district to take
action under this section in lieu of taking action under Chapter 49.
(b) The district shall deposit the amount of the district's
excess revenue under Section 48.257 into a separate account that
may be used only as provided by this section.
(c) For the school year following the year the deposit was
made as provided by Subsection (b), the commissioner shall reduce
the amount of state aid to which the district is entitled under this
chapter by an amount equal to the excess revenue in the separate
account and the district may withdraw the money from the account to
replace the reduction in state aid.
(d) If the amount of state aid to which the district is
entitled under this chapter is less than the amount in the separate
account, the difference must remain in the separate account and the
commissioner will again reduce the district's state aid in the
subsequent school year.
(e) If money remains in the separate account after three
school years, the remaining money in the account is considered part
of the district's excess revenue under Section 48.257.
(f) If at any time money remains in the separate account and
the commissioner makes a determination that the district is subject
to Chapter 49, the remaining money in the separate account must be
included in determining:
(1) the amount the district is required to pay under
Section 48.257; or
(2) whether the district has taken sufficient action
under Chapter 49. [ADJUSTMENT FOR OPTIONAL HOMESTEAD EXEMPTION.
(a) In any school year, the commissioner may not provide funding
under this chapter or Chapter 46 based on a school district's
taxable value of property computed in accordance with Section
403.302(d)(2), Government Code, unless:
[(1) funds are specifically appropriated for purposes
of this section; or
[(2) the commissioner determines that the total amount
of state funds appropriated for purposes of the Foundation School
Program for the school year exceeds the amount of state funds
distributed to school districts in accordance with Section 48.266
based on the taxable values of property in school districts
computed in accordance with Section 403.302(d), Government Code,
without any deduction for residence homestead exemptions granted
under Section 11.13(n), Tax Code.
[(b) In making a determination under Subsection (a)(2), the
commissioner shall:
[(1) notwithstanding Section 48.266(b), reduce the
entitlement under this chapter of a school district whose final
taxable value of property is higher than the estimate under Section
48.269 and make payments to school districts accordingly; and
[(2) give priority to school districts that, due to
factors beyond the control of the board of trustees, experience 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.
[(c) In the first year of a state fiscal biennium, before
providing funding as provided by Subsection (a)(2), the
commissioner shall ensure that sufficient appropriated funds for
purposes of the Foundation School Program are available for the
second year of the biennium, including funds to be used for purposes
of Section 48.258.
[(d) If the commissioner determines that the amount of funds
available under Subsection (a)(1) or (2) does not at least equal the
total amount of state funding to which districts would be entitled
if state funding under this chapter were based on the taxable values
of property in school districts computed in accordance with Section
403.302(d)(2), Government Code, the commissioner may, to the extent
necessary, provide state funding based on a uniform lesser fraction
of the deduction under Section 403.302(d)(2), Government Code.
[(e) The commissioner shall notify school districts as soon
as practicable as to the availability of funds under this section.
For purposes of computing a voter-approval tax rate under Section
26.08, Tax Code, a district shall adjust the district's tax rate
limit to reflect assistance received under this section.]
SECTION 8. Section 48.260(a), Education Code, is amended to
read as follows:
(a) For purposes of Chapters 46 and 49 and this chapter, the
commissioner shall adjust the collections [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 collections [property values]
as affected by the disaster.
SECTION 9. Section 48.257(b), Education Code, is repealed.
SECTION 10. This Act takes effect immediately if it
receives a vote of two-thirds of all the members elected to each
house, as provided by Section 39, Article III, Texas Constitution.
If this Act does not receive the vote necessary for immediate
effect, this Act takes effect September 1, 2023.