Dear old Golden Rule days – Part three
By D S Gands
Jul 22, 2003
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Senate Bill 671 passed regarding accountability and oversight of appraisal districts.  Strengthening the code for accountability and oversight of Appraisal Districts by the State Comptroller, it defines authorized requesting factions, reporting distributions, rules and governing authorities.  Passed during the Regular Session it begins with the following modifications:


SECTION 1.  Section 403.301, Government Code, is amended to read as follows: 

        Sec. 403.301.  PURPOSE.  It is the policy of this state to ensure equity among taxpayers in the burden of school district taxes and among school districts in the distribution [payment] of state financial aid for public education [to schools].  The purpose of this subchapter is to promote that policy [equity] by providing for uniformity in local property appraisal [the tax appraisal and assessment] practices and procedures and in the determination of property values for schools in order to distribute state funding equitably [of school district tax offices, for improvement in the administration and operation of school district tax offices, and for greater competence among persons appraising and assessing school districts' taxes].”

Senator Todd Staples of Tarrant County, entered a Floor Motion to Committee Substitute for House Bill 5 on July 18, 2003, and explained that districts had been levying taxes on a high appraisal and collecting state funds for school districts on the lower appraisals, which was in effect, ‘double dipping’.  The amendment was to allow for a timing exemption on a temporary basis for school districts to plan for the changes payment from the foundation school fund, and he noted the passage of Senate Bill 671.

The Bill Analysis reference in the Bill Status posting of Texas Online for July 16, 2003, on CSHB 5 reads:

“SECTION 4. Provides that the change made to Section 42.259, EducationCode, by Section 4, H.B. No. 2425, Acts of the 78th Legislature, Regular Session, 2003, effectively transferring certain payments to school districts from August of a state fiscal year to September of the following fiscal year, apply only to a payment from the foundation school fund that is made on or after January 1, 2004. Establishes that a payment to a school district from the foundation school fund that is made before that date is governed by Section 42.259, Education Code, as it existed on June 1, 2003, and the former law is continued in effect for that purpose.”

The strengthening of accountability and oversight of appraisal districts by the Comptroller is the intent of the language in Senate Bill 671, but the law apparently leaves the request for an audit to the commissioner of education or a chief appraiser.  Reports from the audits and recommendations are limited in their distribution, but as the language of the bill details, failure to comply could result in the notification of district judges by the comptroller to form a panel to oversee the implementation of the recommendations.

Complaints and concerns are pouring in from across the state regarding property valuations and taxes, including the concerns by school districts for the confusion and changes for the future. With School Finance Reform a premiere concern for the Texas Legislature and sure to be the primary concern of the second called Special Session of the 78th Texas Legislature next spring, legislation to repair the damage done by the conflicts over the state budget and the veto of appropriations considerations by the Governor regarding the comptroller funding and procedures has been a major concern in this Special Session. CSHB 5 will return to the House for consideration with the amendments and motions passed by the Senate last week.

Prior to this legislation, Senator Shapiro authored Senate Bill 2, which was to be considered by the House in correlation to House Bill 5, but never made the transition from the Senate. Lt. Gov. Dewhurst published a brazing letter on the matter referencing the House Speaker, Tom Craddick, on the change of position to consider Senate Bill 2. At the time of that announcement, Dewhurst recognized that the House had the opportunity to consider the Senate plan for School Finance Reform in Senate Joint Resolution 1, which opened by stating:

“proposing a constitutional amendment to provide financial support for public education by creating the Texas education fund, imposing a state property tax, increasing the state general sales and use tax rate, expanding the general sales and use tax base to include certain services, increasing the state motor vehicle sales and use tax rate, abolishing the school district property tax for maintenance and operations purposes, dedicating the proceeds of any state lottery to public education, authorizing a school district property tax for the purpose of educational enrichment, and repealing the restriction on the legislature's authority to limit annual increases in the appraised value of residence homesteads for ad valorem tax purposes.” 

SJR 1 died in committee in the House.  School Finance Reform remains a pending and overwhelming issue for the 78th Legislature.

Other items addressed in CSHB 5 included new teachers waiting 90 days to be enrolled in the Teacher Retirement System, opting for alternative plans for the ninety day period to avoid the confusion over paying into the Social Security plan, which most districts do not currently offer. New teachers would have the option to extend, modify or terminate that plan at the end of the 90-day waiting period.

HB 5 addresses the barrowing of funds from specific pools of money by the Comptroller, including the school fund, but limits that request to a $5M cap and a 14-day payback period. The 14-day repayment limit is essential since the interest accruing on such large sums is substantial.  In addition, fiscal notes attached during the process stated, “The impact on local governments would depend on the extent to which funds were borrowed from local government accounts in the custody of the Comptroller of Public Accounts. “

Senator Arbrister had concerns about barrowing from such funds as the ‘hurricane’ fund, especially in light of the immediate need that surfaced when Charlotte recently visited the Texas Coast.  Senator Bivins, who was a co-sponsor of the Bill, made it clear that the boards for the funds had the right to determine whether the funds could or would be loaned.

General concerns about procedures for property valuations and appraisal district procedures have prompted discussion of petitions by local residents in areas across the state to submit to the commissioner of education, forcing the issue of a request for an audit of various districts.  This tense issue continues to sizzle across Texas.

The Joint Select Committee on School Finance Reform has been meeting, in one form or another, since September 2001.  To date, no recommended plan has been developed from that committee that can satisfy a majority and remedy the challenges of this issue.  Meetings are video-audio taped and were available on the Texas Legislature Online site through July 19, 2003.

To view the tax comparisons for your area, utilize the following link available from the Comptroller’s Website, and take the time to review the increases across Texas.

Tax Rates by District/County – showing increases and % changes as recorded

To learn more about SB 671, and CSHB 5, log on to and follow the Government link to Texas Legislature Online and follow the instructions for querying on the Bill Status search.

D.S. Gands is a freelance writer living in North Texas.  The opinions of this article do not reflect the perspectives of this publication.  If you would like to see this or other articles by D.S. Gands appear in your favorite publication, ask the editor to contact regarding available reprint or syndication rights.