Proposed New 19 TAC Chapter 61, School Districts, Subchapter AA, Commissioner's Rules on School Finance, §61.1011, Additional State Aid for Tax Reduction (ASATR)
I. Statutory Citations (PDF)
II. Text of Proposed New 19 TAC Chapter 61, School Districts, Subchapter AA, Commissioner's Rules on School Finance, §61.1011, Additional State Aid for Tax Reduction (PDF)
The rule action presented in this item was filed as proposed with the Texas Register under the commissioner's rulemaking authority. This item proposes new 19 TAC Chapter 61, School Districts, Subchapter AA, Commissioner's Rules on School Finance, §61.1011, Additional State Aid for Tax Reduction (ASATR). The proposed new rule would establish in rule the definitions, assumptions, and calculations used in determining a district's ASATR.
Texas Education Code (TEC), §42.2516.
EARLIEST POSSIBLE DATE OF ADOPTION:
September 3, 2013.
PROPOSED EFFECTIVE DATE:
October 20, 2013.
BACKGROUND INFORMATION AND SIGNIFICANT ISSUES:
House Bill (HB) 1, 79th Texas Legislature, Third Called Session, 2005, added the TEC, §42.2516. The section provided for state aid known as ASATR to be delivered to certain school districts to compensate them for lowering, or compressing, their maintenance and operations (M&O) tax rates. The section also allowed the commissioner of education to adopt rules to administer the section's provisions. HB 1922, 80th Texas Legislature, 2007, amended the TEC, §42.2516, to provide for the adjustment of a district's ASATR based on its New Instructional Facility Allotment funding. HB 828, 80th Texas Legislature, 2007, amended the TEC, §42.2516, to provide for the adjustment of a district's ASATR based on its transportation allotment funding and its Additional State Aid for Ad Valorem Tax Credits Under the Texas Economic Development Act. That bill also provided for the adjustment of the tax collections used to calculate a district's ASATR based on whether the district adopted or eliminated an additional residence homestead exemption, whether the district granted an exemption under a tax abatement agreement, and whether the district deposited taxes into a tax increment fund and provided for a corresponding adjustment in the district's ASATR. In addition, HB 828 required that any rules adopted by the commissioner to administer the bill's provisions reflect the bill's requirements. HB 3646, 81st Texas Legislature, 2009, amended the TEC, §42.2516, to add minimum and maximum revenue thresholds to the ASATR calculation. Senate Bill 1, 82nd Texas Legislature, First Called Session, 2011, amended the TEC, §42.2516, to gradually reduce the amount of ASATR a district is entitled to over time until ASATR is finally eliminated altogether in 2017.
The commissioner has not previously adopted rules under the TEC, §42.2516. Proposed new 19 TAC §61.1011 would establish in rule the definitions, assumptions, and calculations currently used in determining a district's ASATR under the TEC, §42.2516. It would also propose changes in the current calculation of ASATR to incorporate transportation allotment adjustments for districts subject to the TEC, Chapter 41.
The proposed rule primarily reflects current practice in terms of the calculation of ASATR payments. In response to petitions by two school districts, the rule also reflects proposed modifications in the calculation of ASATR to include changes in the calculated transportation allotment for districts that are subject to the provisions of the TEC, Chapter 41 (the Texas Education Agency [TEA] currently applies this adjustment only for districts not subject to Chapter 41). The proposed rule would begin applying this adjustment for all school districts with the 2013-2014 school year. The application of this adjustment would have positive impacts for some districts and negative impacts for others. Overall, based on current estimates, 139 districts would gain an estimated $10.5 million and 93 districts would lose an estimated $4.6 million in the 2013-2014 school year based on implementation of the adjustment with that year, for a net estimated cost to the state of $5.9 million. Similar variation in gains and losses in school district Foundation School Program revenue could be expected in future years, depending on whether a district that received ASATR showed an increase or decrease in its transportation allotment compared to the 2009-2010 school year, although the net cost to the state is expected to decline in conjunction with the phaseout of ASATR.
The TEA has determined that there is no direct adverse economic impact for small businesses and microbusinesses; therefore, no regulatory flexibility analysis, specified in Texas Government Code, §2006.002, is required.
PUBLIC AND STUDENT BENEFIT:
The proposed new rule would provide public school districts with the definitions, assumptions, and calculations used in determining the districts' ASATR funding.
PROCEDURAL AND REPORTING IMPLICATIONS:
The proposed rule action would have no procedural or reporting implications.
LOCALLY MAINTAINED PAPERWORK REQUIREMENTS:
The proposed rule action would have no locally maintained paperwork requirements.
The public comment period on the proposal begins August 2, 2013, and ends September 3, 2013.
OTHER COMMENTS AND RELATED ISSUES:
A request for a public hearing on the proposal submitted under the Administrative Procedure Act must be received by the commissioner of education not more than 14 calendar days after notice of the proposal has been published in the Texas Register on August 2, 2013.
Staff Members Responsible:
Lisa Dawn-Fisher, Associate Commissioner, School Finance/Chief School Finance Officer
Amanda Brownson, Director, State Funding
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