Ïã¸ÛÁùºÏ²Ê¿ª½±½á¹û2023

,Ìýwas amended by House Bill 1525 of the 87th Legislature, 2021 and become effective September 1, 2021. A school district may not levy or increase the school district's Maintenance and Operations (M&O) taxes at a rate intended to create a surplus in maintenance tax revenue for the purpose of paying the district's debt service.

The Ïã¸ÛÁùºÏ²Ê¿ª½±½á¹û2023 shall develop a method to identify school districts that may have adopted a M&O tax rate in violation of TECÌý§45.0021(a), which includes review of multiple years of data.

Identification and Compliance

Ïã¸ÛÁùºÏ²Ê¿ª½±½á¹û2023 is in the process of developing a method to identify school districts that may be in violation of TEC §45.0021. Which includes looking at:

• Annual financial audit disclosures
• PEIMS submissions including codes 8911 Operating Transfers OutÌýfrom the general fund toÌý7915 Operating Transfers InÌýin the debt service fundÌý
• Historical tax rate analysis of an increase to the M&O tax rate with a corresponding decrease to the I&S tax rate in the same year.
• Insufficient I&S fund balance amount to cover the debt service payment.

Ïã¸ÛÁùºÏ²Ê¿ª½±½á¹û2023 will notify each school district that has been identified as possibly being in violation of TEC §45.0021. The school district will have the opportunity to explain their Interest and Sinking Fund (I&S) tax rate and their budget preparation methodology.

School districts that have been identified as having adopted a M&O tax rate in violation of TECÌý§45.0021(a):

1. Will need to comply with the tax rate rule no later than three years after it has been ordered to comply.
2. Ïã¸ÛÁùºÏ²Ê¿ª½±½á¹û2023 will assist the school district in developing a corrective action plan that, to the extent feasible, does not result in a net increase in the district's total tax rate.

The school districts that have been identified as having adopted a M&O tax rate in violation of TECÌý§45.0021(a) will be posted on this webpage later this year.

Presentations

Ïã¸ÛÁùºÏ²Ê¿ª½±½á¹û2023 Update on School District Tax Compliance - February 2023

Rules And Related Attorney General Opinions

• , as amended by House Bill 3, 86th Legislature 2019
• , as amended by House Bill 1525, 87th Legislature 2021
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