HBA-LCA H.B. 2544 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 2544
By: Smith
Public Education
4/19/1999
Introduced



BACKGROUND AND PURPOSE 

In 1997, voters approved H.J.R. 4, which increased the residential property
homestead exemption for school tax purpose from $5,000 to $15,000.  To
ensure that local school district finances were not adversely affected by
this change, H.B. 4 of the 75th Texas Legislature, Regular Session, 1997,
included an annual appropriation of $520 million to offset the increased
exemption. 

The majority of school districts applied traditional school finance
formulas to the offset, with the state property wealth recalculated for the
1997-98 school year, causing school districts to receive the additional
state aid because of the reduction in property tax revenue due to the
increased exemption. However, two categories of school districts would have
experienced a net decrease in public school revenues without additional
state aid:  1) a school district with a tax rate of more than $1.50;  and
2)  a school district with property wealth of more than $210,000 per
weighted student, but which was not classified as a high-wealth district
under Chapter 41, Education Code (Equalized Wealth Level). 

Chapter 42, Education Code (Foundation School Program), specifies the
method in which state aid shall be provided to these two categories of
school districts to ensure that their homestead-related losses are offset
by additional state funding, and expires September 1, 1999.  To maintain
the current state aid adjustments for the 380 school districts that receive
this additional support, H.B. 2544 extends the expiration date of this
provision to September 1, 2001. 

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 42.2511, Subchapter E, Chapter 42, Education
Code, as follows: 

Sec. 42.2511.  New title: COMPUTATION OF STATE AID FOR 1999-2000 AND
20002001 SCHOOL YEARS; ADDITIONAL STATE AID.  (a)  Provides for the
computation of state aid for the 1999-2000 and 2000-2001, rather than
1997-1998, school years.  Deletes text of existing Subsection (a),
concerning the computation of state aid for the 1997-1998 school year.
Makes conforming and nonsubstantive changes. 

(b)  Provides that this section expires September 1, 2001.  Makes a
conforming change. 

SECTION 2.  Effective date: September 1, 1999.

SECTION 3.  Emergency clause.
  Effective date: upon passage.