HBA-MPM H.B. 1682 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 1682
By: Uher
Public Education
3/25/1999
Introduced



BACKGROUND AND PURPOSE 

In 1950, federal legislation gave school districts (districts) the option
to participate in the Social Security retirement program.  Until 1983,
districts that opted to participate also had the option to withdraw from
the program if they held an election among affected employees and gave a
two-year withdrawal notice.  The Social Security Amendments Act of 1983
prohibited districts from leaving the system in the future, and prevented
those that had already posted notice from completing the notice period and
withdrawing from the system. 

Fourteen districts in Texas cover all employees under Social Security,
while another 34 provide coverage from some or all nonprofessional
employees.  The costs associated with participation in the program can be
substantial, especially for a district covering professional employees,
which must offer higher salaries to offset the required employee
contribution.  

H.B. 1682 reduces the amount paid to the commissioner of education or to
another district by districts participating in the Social Security system,
and also reduces the local share of the Foundation School Program by an
amount equal to the taxes paid by a district into the Social Security
system. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that rulemaking
authority is expressly delegated to the commissioner of education in
SECTION 2 (Section 42.252, Education Code), of this bill. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Subchapter A, Chapter 41, Education Code, by adding
Section 41.014, as follows: 

Sec. 41.014.  REDUCTION FOR SOCIAL SECURITY TAXES.  Authorizes a school
district (district) that participates in the Social Security system to
reduce the amount paid to the commissioner of education (commissioner)
under Subchapter D (Purchase of Attendance Credit) or to another district
under Subchapter E (Contract for Education of Nonresident Student) by an
amount equivalent to the taxes paid under 26 U.S.C., Section 3111(a) (Rate
of Tax, Old-Age, Survivors, and Disability Insurance), and its subsequent
amendments,  in the preceding calendar year.  Requires the district to
report payment of those taxes in the time and manner prescribed by rule of
the commissioner. 

SECTION 2.  Amends Section 42.252, Education Code, by adding Subsection
(f), as follows: 

(f)  Specifies that the local share of the Foundation School Program of a
district that participates in the Social Security system is reduced by an
amount equivalent to the taxes paid by the district under 26 U.S.C.,
Section 3111(a), and its subsequent amendments in the preceding calendar
year.  Requires the district to report payment of those taxes in the time
and manner prescribed by rule of the commissioner.  Makes this section
inapplicable to a district with a wealth per student, as defined in Section
41.004 (Annual Review of Property Wealth), Education Code, that exceeds the
equalized wealth level under Section 41.002 (Equalized Wealth Level),
Education Code. 
 
SECTION 3.  Makes this Act applicable beginning with the 1999-2000 school
year. 

SECTION 4.Emergency clause.
  Effective date: upon passage.