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.