Shaheen’s bill repealing recapture

The text as introduced · 3,445 words

89R3131 MM-D

By: Shaheen
H.B. No. 2079

A BILL TO BE ENTITLED

AN ACT

relating to repeal of provisions requiring a school district to

reduce its local revenue level in excess of entitlement.

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, 43, and 48;

(N) extracurricular activities under Section

33.081;

(O) health and safety under Chapter 38;

(P) the provisions of Subchapter A, Chapter 39;

(Q) public school accountability and special

investigations under Subchapters A, B, C, D, and J, Chapter 39, and

Chapter 39A;

(R) [ options for local revenue levels in excess

of entitlement under Chapter 49;

[ (S) ] a bond or other obligation or tax rate

under Chapters 43, 45, and 48;

(S) [ (T) ] purchasing under Chapter 44; and

(T) [ (U) ] parental options to retain a student

under Section 28.02124.

SECTION 2. Section 12.029(b), Education Code, is amended to

read as follows:

(b) If [ Except as provided by Subchapter H, Chapter 49, 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 13.054(i), Education Code, is amended to

read as follows:

(i) The funding provided under Subsection (f), (g), or (h)

is in addition to other funding the district receives through other

provisions of this code, including funding the district receives

under Chapter [ Chapters ] 48 [ and 49 ].

SECTION 4. Section 25.081(f), Education Code, is amended to

read as follows:

(f) The commissioner may proportionally reduce the amount

of funding a district receives under Chapter 46 or [ , ] 48[ , or 49 ]

and the average daily attendance calculation for the district if

the district operates on a calendar that provides fewer minutes of

operation than required under Subsection (a).

SECTION 5. Section 29.087(j), Education Code, is amended to

read as follows:

(j) For purposes of funding under Chapters 46 and [ , ] 48,

[ and 49, ] a student attending a program authorized by this section

may be counted in attendance only for the actual number of hours

each school day the student attends the program, in accordance with

Section 25.081.

SECTION 6. Section 29.203(b), Education Code, is amended to

read as follows:

(b) A school district is entitled to the allotment provided

by Section 48.107 for each eligible student using a public

education grant. [ If the district has a local revenue level greater

than the guaranteed local revenue level but less than the level

established under Section 48.257, 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 48.107 and money from the available school fund

attributable to the student. ]

SECTION 7. 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 local revenue level greater than the guaranteed

local revenue level but less than the level established under

Section 48.257, 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 8. Section 45.251(2), Education Code, is amended to

read as follows:

(2) "Foundation School Program" means the program

established under Chapters 46 and [ , ] 48, [ and 49, ] or any successor

program of state appropriated funding for school districts in this

state.

SECTION 9. 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 local revenue level

under Section 48.257 ], 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 48 [ required to reduce its local revenue level under

Section 48.257 ], the commissioner shall order [ increase amounts due

from ] the district to remit to the commissioner an [ under Chapter 49

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 10. Section 48.010(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 reduce its local

revenue level under Section 48.257, 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 49; and

[ (3) ] determine a district's weighted average daily

attendance in accordance with this chapter as it existed on January

1, 2011.

SECTION 11. Section 48.252(b), Education Code, is amended

to read as follows:

(b) Notwithstanding any other provision of this chapter [ or

Chapter 49 ], a school district subject to this section is entitled

to receive for each student in average daily attendance at the

campus or program described by Subsection (a) an amount equivalent

to the difference, if the difference results in increased funding,

between:

(1) the amount described by Section 12.106; and

(2) the amount to which the district would be entitled

under this chapter.

SECTION 12. Sections 48.2543(a) and (a-1), Education Code,

are amended to read as follows:

(a) For the 2022-2023 school year, a school district is

entitled to additional state aid to the extent that state and local

revenue under this chapter and former Chapter 49 is less than the

state and local revenue that would have been available to the

district under this chapter and former Chapter 49 as those chapters

existed on September 1, 2021, if any increase in the residence

homestead exemption under Section 1-b(c), Article VIII, Texas

Constitution, as proposed by the 87th Legislature, 3rd Called

Session, 2021, had not occurred.

(a-1) Beginning with the 2023-2024 school year, a school

district is entitled to additional state aid to the extent that

state and local revenue under this chapter [ and Chapter 49 ] is less

than the state and local revenue that would have been available to

the district under this chapter [ and Chapter 49 ] as it [ those

chapters ] existed on September 1, 2022, if any increase in a

residence homestead exemption under Section 1-b(c), Article VIII,

Texas Constitution, and any additional limitation on tax increases

under Section 1-b(d) of that article as proposed by the 88th

Legislature, 2nd Called Session, 2023, had not occurred.

SECTION 13. Sections 48.2553(d) and (e), Education Code,

are amended to read as follows:

(d) Any additional tax effort by a school district

authorized under this section is not:

(1) eligible for funding under Subchapter B, C, or D;

or

(2) eligible for the guaranteed yield amount of state

funds under Section 48.202[ ; or

[ (3) subject to the limit on local revenue under

Section 48.257 ].

(e) The commissioner shall reduce state aid [ or adjust the

limit on local revenue under Section 48.257 ] in an amount equal to

the amount of revenue generated by a school district's tax effort

that is not in compliance with this section or Section 48.2551.

SECTION 14. Section 48.258(a), Education Code, is amended

to read as follows:

(a) For purposes of Chapter [ 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.

SECTION 15. Section 48.260(a), Education Code, is amended

to read as follows:

(a) For purposes of Chapter [ Chapters ] 46 [ and 49 ] 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 16. Section 48.266(f), Education Code, is amended

to read as follows:

(f) 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 (h), 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

49 ] 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 49 ] 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 49 is reduced by an amount

necessary to ensure a district's full recovery of the adjustment

made under this subsection ].

SECTION 17. Sections 48.267(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

49, ] 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 46 [ or 49 ]. 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 46 [ or 49 ] 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 48.272(b), Education Code, is amended

to read as follows:

(b) 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 46 , [ or 49 or ]

this chapter , or former Chapter 49 and related reporting

requirements.

SECTION 19. Section 48.2721, Education Code, is amended to

read as follows:

Sec. 48.2721. RECOVERY OF FUNDS FROM EXCESSIVE

TAXATION. The commissioner shall reduce state aid [ or adjust the

limit on local revenue under Section 48.257 ] in an amount equal to

the amount of revenue generated by a school district's tax effort

that is not in compliance with Section 45.003 or this chapter.

SECTION 20. Section 48.275(b), Education Code, is amended

to read as follows:

(b) The amount of additional funds to which each school

district or participating charter school is entitled due to the

increases in formula funding made by Chapter 1187 ( H.B. [ No. ]

3343 ) , Acts of the 77th Legislature, Regular Session, 2001, and any

subsequent legislation amending the provisions amended by that Act

that increase formula funding under [ Chapter 49 and ] this chapter

to school districts and charter schools is available for purposes

of Subsection (c).

SECTION 21. Section 48.283, Education Code, is amended to

read as follows:

Sec. 48.283. ADDITIONAL STATE AID FOR CERTAIN DISTRICTS

IMPACTED BY COMPRESSION. A school district that received an

adjustment under former Section 48.257(b) for the 2022-2023 school

year is entitled to additional state aid for each school year in an

amount equal to the amount of that adjustment for the 2022-2023

school year less the difference, if the difference is greater than

zero, between:

(1) the amount to which the district is entitled under

this chapter for the current school year; and

(2) the amount to which the district would be entitled

under this chapter for the current school year if the district's

maximum compressed tax rate had not been reduced under Section

48.2555, as added by S.B. 2, Acts of the 88th Legislature, 2nd

Called Session, 2023.

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 49, Education Code. ]

SECTION 23. Section 1579.251(a), Insurance Code, is amended

to read as follows:

(a) The state shall assist employees of participating

school districts and charter schools in the purchase of group

health coverage under this chapter by providing for each covered

employee the amount of $900 each state fiscal year or a greater

amount as provided by the General Appropriations Act. The state

contribution shall be distributed through the school finance

formulas under Chapter [ Chapters ] 48 [ and 49 ], Education Code, and

used by school districts and charter schools as provided by Section

48.275, Education Code.

SECTION 24. 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 49, Education Code ].

SECTION 25. 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 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 local revenue level that does not exceed the

level established under Section 48.257, Education Code, ] 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 provisions are repealed:

(1) Section 7.055(b)(34), Education Code;

(2) Sections 8.056 and 48.257, Education Code;

(3) Section 29.203(g), Education Code;

(4) Chapter 49, Education Code; and

(5) Sections 21.02(b) and (c) and 25.25(k), Tax Code.

SECTION 28. This Act takes effect September 1, 2025.