HBA-MPM H.B. 1568 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 1568 By: Keffer Public Education 4/19/1999 Introduced BACKGROUND AND PURPOSE Current law gives the commissioner of education (commissioner) authority to determine property losses for independent school districts (ISDs) under Chapter 41 (Equalized Wealth Level), Education Code. For all other ISDs, the commissioner has the ability to determine property value losses if they are more than four percent. The comptroller of public accounts has recently released numbers which indicate that $154 million will be lost as a result of declining oil prices, $60 million of which will be in West Texas. Property value losses affect ISDs' budgets in all matters, such as salaries, employee benefits, programs, curriculum, and facilities. Additionally, students may leave these ISDs because their parents lose jobs, which is a concern because the state allocates dollars to ISDs based on the number of students enrolled per district. H.B. 1568 eliminates the four percent cap, thus allowing the commissioner to determine losses and total losses for ISDs other than those under Chapter 41 that lose property value for Tier I and Tier II purposes, respectively (Tier I is the base-level support that all but certain schools receive, and Tier II is the level of the foundation program that the state supports based on an ISD's tax effect over and above Tier I). RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 42.252(e), Education Code, to require the commissioner of education (commissioner) to adjust the DPV of a school district that experiences a decline from the preceding year in its taxable value used to calculate its local fund assignment by the amount of the decline. Provides that this adjustment may be paid only from funds appropriated for that purpose, and that the adjustment does not affect the local fund assignment of any other district. Applies this subsection to determinations by the commissioner in identifying districts with wealth per student exceeding the equalized wealth level under Section 41.004 (Annual Review of Property Wealth), Education Code. Deletes existing text requiring the commissioner to hear appeals from districts that have experienced a rapid decline in tax base and authorizing the commissioner to adjust the district's taxable values for local fund assignment purposes. Further deletes the specification that the commissioner's decision is final. Makes nonsubstantive changes. "DPV" is defined in Section 42.252 (Local Share of Program Cost (Tier One)), Education Code, as the taxable value of property in the district for the preceding tax year determined under Subchapter M (Study of School District Property Values, Comptroller of Public Accounts), Government Code. SECTION 2. Amends Section 42.302, Education Code, by adding subsection (e), as follows: (e) Requires the commissioner, in determining a district's "DTR" and "LR," to adjust by the amount of the decline the taxable value of a district that experiences a decline from the preceding year in its taxable value of property determined under Subchapter M, Chapter 403 (Study of School District Property Values, Comptroller of Public Accounts), Government Code. Specifies that this adjustment may be paid only from funds appropriate for that purpose, and the adjustment does not affect the GYA of any other district. "DTR" is defined in Section 42.302 (Allotment), Education Code, as the district enrichment and facilities tax rate of the district, which is determined by subtracting the amount specified by Subsection (b) (regarding exceptions to the computation of the "DTR") from the total amount of taxes collected by the district for the applicable school year, dividing the difference by the quotient of the district's taxable value of property as determined under Subchapter M, Chapter 403, Government Code. "LR" is defined in this section as 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, and "GYA" is defined as the guaranteed yield amount of state funds to be allocated to the district. SECTION 3. Effective date: September 1, 1999. SECTION 4. Emergency clause.