85R1245 GCB-D     By: Rinaldi H.B. No. 286       A BILL TO BE ENTITLED   AN ACT   relating to the repeal of provisions requiring school districts to   reduce their wealth per student to the equalized wealth level.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  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.  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 3.  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 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 4.  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 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 5.  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 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 6.  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 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 7.  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 8.  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 9.  Section 42.009(b), Education Code, is amended to   read as follows:          (b)  In making the determinations regarding funding levels   required by Subsection (a), the commissioner shall:                (1)  make adjustments as necessary to reflect changes   in a school district's 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 10.  Section 42.158(e), Education Code, is amended   to read as follows:          (e)  [A school district that is required to take action under   Chapter 41 to reduce its wealth per student to the equalized wealth   level is entitled to a credit, in the amount of the allotments to   which the district is entitled under this section, against the   total amount required under Section 41.093 for the district to   purchase attendance credits.] A school district that is otherwise   ineligible for state aid under this chapter is entitled to receive   allotments under this section.          SECTION 11.  Section 42.160(b), Education Code, is amended   to read as follows:          (b)  [A school district that is required to take action under   Chapter 41 to reduce its wealth per student to the equalized wealth   level is entitled to a credit, in the amount of the allotments to   which the district is entitled under this section, against the   total amount required under Section 41.093 for the district to   purchase attendance credits.]  A school district that is otherwise   ineligible for state aid under this chapter is entitled to receive   allotments under this section.          SECTION 12.  Section 42.2518(a), Education Code, as added by   Section 18, Chapter 465 (S.B. 1), Acts of the 84th Legislature,   Regular Session, 2015, is amended to read as follows:          (a)  Beginning with the 2017-2018 school year, a school   district is entitled to additional state aid to the extent that   state and local revenue under this chapter [and Chapter 41] is less   than the state and local revenue that would have been available to   the district under [Chapter 41 and] this chapter as it [those   chapters] existed on September 1, 2015, excluding any state aid   that would have been provided under former Section 42.2516, if the   increase in the residence homestead exemption under Section 1-b(c),   Article VIII, Texas Constitution, and the additional limitation on   tax increases under Section 1-b(d) of that article as proposed by   S.J.R. 1, 84th Legislature, Regular Session, 2015, had not   occurred.          SECTION 13.  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 14.  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 15.  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 16.  Section 42.253(h), Education Code, as effective   September 1, 2017, is amended to read as follows:          (h)  If the amount appropriated for the Foundation School   Program for the second year of a state fiscal biennium is less than   the amount to which school districts and open-enrollment charter   schools are entitled for that year, the commissioner shall certify   the amount of the difference to the Legislative Budget Board not   later than January 1 of the second year of the state fiscal   biennium.  The Legislative Budget Board shall propose to the   legislature that the certified amount be transferred to the   foundation school fund from the economic stabilization fund and   appropriated for the purpose of increases in allocations under this   subsection.  If the legislature fails during the regular session to   enact the proposed transfer and appropriation and there are not   funds available under Subsection (j), the commissioner shall adjust   the total amounts due to each school district and open-enrollment   charter school under this chapter [and the total amounts necessary   for each school district to comply with the requirements of Chapter   41] by an amount determined by applying to each district and school   the same percentage adjustment to the total amount of state and   local revenue due to the district or school under this chapter [and   Chapter 41] so that the total amount of the adjustment to all   districts and schools results in an amount equal to the total   adjustment necessary.  The following fiscal year[:                [(1)]  a district's or school's entitlement under this   section is increased by an amount equal to the adjustment  made   under this subsection[; and                [(2)     the amount necessary for a district to comply   with the requirements of Chapter 41 is reduced by an amount   necessary to ensure a district's full recovery of the adjustment   made under this subsection].          SECTION 17.  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 18.  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 former Chapter 41,   Chapter [or] 46, or this chapter and related reporting   requirements.          SECTION 19.  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 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 20.  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 21.  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 not entitled to state assistance under Chapter 42    [required to reduce its wealth per student under Chapter 41], the   commissioner shall order [increase amounts due from] the district   to remit to the commissioner an [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 22.  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 23.  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 24.  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 25.  Section 26.08(i), Tax Code, as effective   September 1, 2017, is amended to read as follows:          (i)  For purposes of this section, the effective maintenance   and operations tax rate of a school district is the tax rate that,   applied to the current total value for the district, would impose   taxes in an amount that, when added to state funds that would be   distributed to the district under Chapter 42, Education Code, for   the school year beginning in the current tax year using that tax   rate, would provide the same amount of state funds distributed   under Chapter 42, Education Code, and maintenance and operations   taxes of the district per student in weighted average daily   attendance for that school year that would have been available to   the district in the preceding year if the funding elements for   Chapter [Chapters 41 and] 42, Education Code, for the current year   had been in effect for the preceding year.          SECTION 26.  Section 312.210(b), Tax Code, is amended to   read as follows:          (b)  A tax abatement agreement with the owner of real   property or tangible personal property that is located in the   reinvestment zone described by Subsection (a) and in a school   district [that has a wealth per student that does not exceed the   equalized wealth level] must exempt from taxation:                (1)  the portion of the value of the property in the   amount specified in the joint agreement among the municipality,   county, and junior college district; and                (2)  an amount equal to 10 percent of the maximum   portion of the value of the property that may under Section   312.204(a) be otherwise exempted from taxation.          SECTION 27.  The following laws are repealed:                (1)  Chapter 41, Education Code;                (2)  Sections 7.055(b)(34), 8.056, 29.203(g), and   42.2524(f), Education Code; and                (3)  Sections 21.02(b) and (c), 25.25(k), and   312.210(c), Tax Code.          SECTION 28.  This Act takes effect September 1, 2017.