TITLE: Relating to supporting public education funding through an increase in the state sales and use tax rate and requiring a reduction in school district maintenance and operation ad valorem taxes; making an appropriation; increasing the rate of a tax.

SUMMARY: Relating to supporting public education funding through an increase in the state sales and use tax rate and requiring a reduction in school district maintenance and operation ad valorem taxes; making an appropriation; increasing the rate of a tax.

FULL TEXT:
AN ACT relating to supporting public education funding through an increase in the state sales and use tax rate and requiring a reduction in school district maintenance and operation ad valorem taxes; making an appropriation; increasing the rate of a tax. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: SECTION 1. Section 151.051(b), Tax Code, is amended to read as follows: (b) The sales tax rate is 7.25 [6-1/4] percent of the sales price of the taxable item sold. SECTION 2. Subchapter M, Chapter 151, Tax Code, is amended by adding Section 151.803 to read as follows: Sec. 151.803. ALLOCATION OF CERTAIN REVENUE TO SCHOOL DISTRICT PROPERTY TAX REDUCTION. Notwithstanding Section 151.801, the comptroller shall deposit an amount of revenue equal to the proceeds derived from the collection of taxes imposed by this chapter attributable to the portion of the tax rate in excess of 6.25 percent of the sales price of the taxable item sold to the credit of an account in the general revenue fund. Money credited to the account may be appropriated only to the Texas Education Agency for use by the commissioner of education to provide property tax relief by reducing the state compression percentage under Section 42.2516, Education Code. SECTION 3. For the state fiscal year beginning September 1, 2018, all money credited to the account created under Section 151.803, Tax Code, as added by this Act, preceding or during that year is appropriated from that account to the Texas Education Agency to be used by the commissioner of education to reduce the state compression percentage, as defined by Section 42.2516(a), Education Code, to the lowest percentage possible for the 2018-2019 school year. SECTION 4. The change in law made by this Act does not affect taxes imposed before the effective date of this Act, and the law in effect before that date is continued in effect for purposes of the liability for and collection of those taxes. SECTION 5. This Act takes effect January 1, 2018.