By Sadler                                             H.B. No. 3343
         77R9310 PB-D                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to the creation, operation, and funding of a statewide
 1-3     group benefits program for employees and retirees of school
 1-4     districts.
 1-5           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-6                    ARTICLE 1.  GROUP BENEFITS PROGRAM  
 1-7           SECTION 1.01. Subchapter E, Chapter 3, Insurance Code, is
 1-8     amended by adding Article 3.50-7 to read as follows:
 1-9           Art. 3.50-7.  TEXAS SCHOOL EMPLOYEES UNIFORM GROUP BENEFITS
1-10     ACT
1-11           Sec. 1.  SHORT TITLE.   This article may be cited as the
1-12     Texas School Employees Uniform Group Benefits Act.
1-13           Sec. 2.  DEFINITIONS. In this article:
1-14                 (1)  "Administering firm" means any entity designated
1-15     by the trustee to administer any coverages, services, benefits, or
1-16     requirements under this article and the trustee's rules adopted
1-17     under this article.
1-18                 (2)  "Basic coverage" means the program of group
1-19     coverages determined by the trustee in which each full-time
1-20     employee and retiree participates automatically unless
1-21     participation is specifically waived.
1-22                 (3)  "Cafeteria plan" means a plan as defined and
1-23     authorized by Section 125, Internal Revenue Code of 1986 (26 U.S.C.
1-24     Section 125), and its subsequent amendments.
 2-1                 (4)  "Employee" means a participating member of the
 2-2     Teacher Retirement System of Texas who is employed by a
 2-3     participating school district and who is not covered by a group
 2-4     insurance program under the Texas Employees Uniform Group Insurance
 2-5     Benefits Act (Article 3.50-2, Vernon's Texas Insurance Code) or the
 2-6     Texas State College and University Employees Uniform Insurance
 2-7     Benefits Act (Article 3.50-3, Vernon's Texas Insurance Code).  The
 2-8     term does not include an individual performing personal services
 2-9     for a school district as an independent contractor.
2-10                 (5)  "Health benefit plan" means any group policy or
2-11     contract, medical, dental, or hospital service agreement,
2-12     membership or subscription contract, salary continuation plan,
2-13     health maintenance organization agreement, preferred provider
2-14     arrangement, or any similar group arrangement or any combination of
2-15     those policies, plans, contracts, agreements, or arrangements that
2-16     provides for, pays for, or reimburses expenses for health care
2-17     services.
2-18                 (6)  "Retiree" means a person who:
2-19                       (A)  has retired under the Teacher Retirement
2-20     System of Texas with at least 10 years of credit for service in
2-21     public schools of this state or has retired under the Teacher
2-22     Retirement System of Texas for disability and is entitled to
2-23     receive an annuity from the system based on the person's service;
2-24     and
2-25                       (B)  is not eligible to participate in the group
2-26     insurance program provided under the Texas Employees Uniform Group
2-27     Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
 3-1     Code) or the Texas State College and University Employees Uniform
 3-2     Insurance Benefits Act (Article 3.50-3, Vernon's Texas Insurance
 3-3     Code).
 3-4                 (7)  "Trustee" means the Teacher Retirement System of
 3-5     Texas.
 3-6           Sec. 3.  ADMINISTRATION. (a)  The Teacher Retirement System
 3-7     of Texas, as trustee, shall implement and administer the statewide
 3-8     uniform group benefits program described by this article.
 3-9           (b)  The trustee may hire and compensate employees.
3-10           (c)  The trustee may, on a competitive bid basis, contract
3-11     with a qualified, experienced firm of group benefit plan
3-12     specialists or an administering firm who will act for the trustee
3-13     in the capacity of independent administrators and managers of the
3-14     program authorized under this article. The independent
3-15     administrator selected by the trustee shall assist the trustee to
3-16     ensure the proper administration of this article and the coverages,
3-17     services, and benefits provided for or authorized by this article
3-18     and shall be paid by the trustee.
3-19           (d)  The trustee may enter into interagency contracts with
3-20     any agency of the state, including the Employees Retirement System
3-21     of Texas, for the purpose of assistance in implementing the program
3-22     provided by this article.
3-23           (e)  The trustee has the powers with regard to the program
3-24     described by this article that the Employees Retirement System of
3-25     Texas has in administering the Texas Employees Uniform Group
3-26     Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
3-27     Code), including the power to adjudicate claims, expel participants
 4-1     from the program for cause, and adopt rules to administer this
 4-2     article.
 4-3           Sec. 4.  PARTICIPATION IN PROGRAM. (a)  Each school district
 4-4     is required to participate in the program.
 4-5           (b)  Each full-time employee or retiree of a school district
 4-6     is automatically covered by the basic coverage for employees or
 4-7     retirees, as applicable, unless the employee or retiree
 4-8     specifically waives coverage or unless the employee or retiree is
 4-9     expelled from the program.
4-10           (c)  Each part-time employee of a participating school
4-11     district is eligible to participate in the program provided by this
4-12     article on application in the manner provided by the trustee,
4-13     unless the employee has been expelled from the program. A
4-14     participating school district shall notify each of its part-time
4-15     employees of the employee's eligibility for participation in the
4-16     program.
4-17           Sec. 5.  GROUP COVERAGES. (a)  The trustee shall establish
4-18     plans of group coverages for employees and retirees of school
4-19     districts and their dependents. The coverages shall be comparable
4-20     in scope and, to the greatest extent possible, in cost to the
4-21     coverages provided under the Texas Employees Uniform Group
4-22     Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
4-23     Code) and may include group life coverages, health benefit plans,
4-24     accidental death and dismemberment coverages, coverages against
4-25     short-term or long-term loss of salary, and other coverages
4-26     considered advisable by the trustee.  Comparable plans of each type
4-27     of coverage established must be offered to employees and retirees
 5-1     of all school districts.
 5-2           (b)  The trustee by rule may define the basic coverage in
 5-3     which each full-time employee or retiree participates unless
 5-4     specifically waived.  Basic coverage must include a health benefit
 5-5     plan.  The trustee by rule may define optional coverage, which may
 5-6     include coverage for dependents, and voluntary coverage.
 5-7           (c)  The trustee may provide a cafeteria plan for employees
 5-8     of school districts.
 5-9           (d)  The trustee may determine that plans of coverages be
5-10     provided directly from the fund described by Section 7 of this
5-11     article rather than through the purchase of coverage.  Any
5-12     self-funded plan of coverages is exempt from any other provision of
5-13     this code unless the law specifically applies to the plan or to
5-14     this article.
5-15           Sec. 6.  PAYMENT OF CONTRIBUTIONS. (a)  The state shall pay
5-16     from the fund established under Section 7 of this article, for each
5-17     employee and retiree covered by the program, an amount equal to the
5-18     amount the state contributes for participants in the program
5-19     provided under the Texas Employees Uniform Group Insurance Benefits
5-20     Act (Article 3.50-2, Vernon's Texas Insurance Code).
5-21           (b)  Each employee and retiree covered by the program shall
5-22     pay that portion of the cost of coverage selected by the employee
5-23     or retiree that exceeds the amount of state contributions.
5-24           Sec. 7.  FUND. (a)  The Texas school employees uniform group
5-25     benefits trust fund is established as a trust fund with the
5-26     comptroller. The fund is composed of tax revenue dedicated to the
5-27     fund and any amounts appropriated by the legislature for
 6-1     contingency reserves, administrative expenses, or other expenses.
 6-2     The trustee may use amounts in the fund only to provide group
 6-3     coverages under this article and to pay the expenses of
 6-4     administering the program.
 6-5           (b)  The trustee may invest assets of the fund in the manner
 6-6     provided by Section 67(a)(3), Article XVI, Texas Constitution.
 6-7           SECTION 1.02. Article 3.50-4, Insurance Code, is amended by
 6-8     adding Section 3A to read as follows:
 6-9           Sec. 3A.  TERMINATION OF PROGRAM AND TRANSFER OF PROPERTY.
6-10     (a) The trustee shall transfer from the program established under
6-11     this article all coverages provided under the program and all
6-12     records relating to the program to the group benefits program
6-13     established under Article 3.50-7 of this code not later than the
6-14     date on which the program of coverages provided under Article
6-15     3.50-7 of this code is implemented.
6-16           (b)  The comptroller shall transfer from the program
6-17     established under this article all assets and liabilities of that
6-18     program to the group benefits program established under Article
6-19     3.50-7 of this code not later than the date on which the program of
6-20     coverages provided under Article 3.50-7 of this code is
6-21     implemented.
6-22           (c)  On the transfer of property described by this section,
6-23     the program provided by this article is terminated.
6-24           SECTION 1.03. Article 3.51, Insurance Code, is amended by
6-25     adding Section 3 to read as follows:
6-26           Sec. 3. Notwithstanding any other provision of this article,
6-27     a common or independent school district or any other agency or
 7-1     subdivision of the public school system of this state may not
 7-2     procure insurance contracts under this article and may not renew an
 7-3     insurance contract procured under this article after the date on
 7-4     which the program of coverages provided under Article 3.50-7 of
 7-5     this code is implemented.
 7-6           SECTION 1.04. Article 26.036, Insurance Code, is amended by
 7-7     adding Subsection (c) to read as follows:
 7-8           (c)  An independent school district may not participate in
 7-9     the small employer market under this article and may not renew an
7-10     insurance contract obtained in accordance with this article after
7-11     the date on which the program of coverages provided under Article
7-12     3.50-7 of this code is implemented.
7-13           SECTION 1.05. Section 22.004, Education Code, is amended by
7-14     adding Subsection (h) to read as follows:
7-15           (h)  Notwithstanding any other provision of this section, a
7-16     district may not make group health coverage  available to its
7-17     employees under this section after the date on which the program of
7-18     coverages provided under Article 3.50-7, Insurance Code, is
7-19     implemented.  A district is required to begin participating in the
7-20     program provided under Article 3.50-7, Insurance Code, on the later
7-21     of:
7-22                 (1)  the first day of the first school year beginning
7-23     after the date of implementation of Article 3.50-7, Insurance Code;
7-24     or
7-25                 (2)  the date on which the district's contract for
7-26     group health insurance coverage expires.
7-27         ARTICLE 2.  PROGRAM FUNDING THROUGH CERTAIN DEDICATED TAXES
 8-1           SECTION 2.01. Section 151.051(b), Tax Code, is amended to
 8-2     read as follows:
 8-3           (b)  The sales tax rate is 7-1/4 [6 1/4] percent of the sales
 8-4     price of the taxable item sold.
 8-5           SECTION 2.02. Section 151.801, Tax Code, is amended by
 8-6     amending Subsection (a)  and adding Subsection (f) to read as
 8-7     follows:
 8-8           (a)  Except for the amounts allocated under Subsections (b),
 8-9     [and] (c), and (f), all proceeds from the collection of the taxes
8-10     imposed by this chapter shall be deposited to the credit of the
8-11     general revenue fund.
8-12           (f)  Subject to Subsection (b), all proceeds from the tax
8-13     imposed by this chapter above the rate of 6-1/4 percent of the
8-14     sales price of the taxable item sold shall be deposited to the
8-15     credit of the fund described in Section 7, Article 3.50-7,
8-16     Insurance Code.
8-17           SECTION 2.03. Section 156.052, Tax Code, is amended to read
8-18     as follows:
8-19           Sec. 156.052.  RATE OF TAX. The rate of the tax imposed by
8-20     this chapter is seven [six] percent of the price paid for a room in
8-21     a hotel.
8-22           SECTION 2.04. Section 156.251, Tax Code, is amended by
8-23     amending Subsection (a)  and adding Subsection (b) to read as
8-24     follows:
8-25           (a)  Except as provided by Subsection (b), the [The] revenue
8-26     from the tax imposed by this chapter shall be deposited in the
8-27     state treasury to the credit of the general revenue fund.
 9-1           (b)  The revenue from the tax imposed by this chapter above
 9-2     the rate of six percent of the price paid for a room in a hotel
 9-3     shall be deposited to the credit of the fund described in Section
 9-4     7, Article 3.50-7, Insurance Code.
 9-5           SECTION 2.05. Section 171.002(a), Tax Code, is amended to
 9-6     read as follows:
 9-7           (a)  The rates of the franchise tax are:
 9-8                 (1)  0.25 percent per year of privilege period of net
 9-9     taxable capital; and
9-10                 (2)  5.5 [4.5]  percent of net taxable earned surplus.
9-11           SECTION 2.06. Section 171.401, Tax Code, is amended to read
9-12     as follows:
9-13           Sec. 171.401.  REVENUE DEPOSITED IN GENERAL REVENUE FUND. (a)
9-14     Except as provided by Subsection (b), the [The] revenue from the
9-15     tax imposed by this chapter on corporations shall be deposited to
9-16     the credit of the general revenue fund.
9-17           (b)  The revenue from the tax imposed by this chapter at a
9-18     rate above 4.5 percent of net taxable earned surplus shall be
9-19     deposited to the credit of the fund described in Section 7, Article
9-20     3.50-7, Insurance Code.
9-21           SECTION 2.07. (a)  If this Act receives a vote of two-thirds
9-22     of all the members elected to each house, as provided by Section
9-23     39, Article III, Texas Constitution, Sections 2.01-2.06 of this Act
9-24     take effect July 1, 2001.
9-25           (b)  If this Act does not receive the vote necessary for
9-26     immediate effect:
9-27                 (1)  Sections 2.01 and 2.02 of this Act take effect
 10-1    October 1, 2001; and
 10-2                (2)  Sections 2.03-2.06 of this Act take effect
 10-3    September 1, 2001.
 10-4             ARTICLE 3.  PROGRAM FUNDING THROUGH PROPERTY TAX
 10-5          SECTION 3.01. Section 42.253, Education Code, is amended by
 10-6    amending Subsections (f)-(l) and adding Subsection (m) to read as
 10-7    follows:
 10-8          (f)  For the first school year in which a school district
 10-9    levies a tax under Section 45.003(f), the rate authorized under
10-10    Subsection (e) is reduced by an amount equal to the portion of the
10-11    district's maintenance and operations tax rate for the final year
10-12    of the preceding biennium necessary for the district to pay for its
10-13    expenditures for that year, if any, for group health coverage for
10-14    district employees.  The commissioner may adopt rules necessary to
10-15    administer this subsection.  A decision of the commissioner under
10-16    this subsection is final and may not be appealed.
10-17          (g)  Amounts transferred to the reserve account under
10-18    Subsection (e) shall be used in the succeeding fiscal year to
10-19    finance increases in allocations to school districts under
10-20    Subsection (j) [(i)].  If the amount in the reserve account is less
10-21    than the amount of the increases under Subsection (j) [(i)] for the
10-22    second year of a state fiscal biennium, the commissioner shall
10-23    certify the amount of the difference to the Legislative Budget
10-24    Board not later than January 1 of the second year of the state
10-25    fiscal biennium.  The Legislative Budget Board shall propose to the
10-26    legislature that the certified amount be transferred to the
10-27    foundation school fund from the economic stabilization fund and
 11-1    appropriated for the purpose of increases in allocations under
 11-2    Subsection (i) [(h)].
 11-3          (h) [(g)]  If a school district demonstrates to the
 11-4    satisfaction of the commissioner that the estimate of the
 11-5    district's tax rate, student enrollment, or taxable value of
 11-6    property used in determining the amount of state funds to which the
 11-7    district is entitled are so inaccurate as to result in undue
 11-8    financial hardship to the district, the commissioner may adjust
 11-9    funding to that district in that school year to the extent that
11-10    funds are available for that year, including funds in the reserve
11-11    account.  Funds in the reserve account may not be used under this
11-12    subsection until any reserve funds have been used for purposes of
11-13    Subsection (g) [(f)].
11-14          (i) [(h)]  If the legislature fails during the regular
11-15    session to enact the transfer and appropriation proposed under
11-16    Subsection (g) [(f)] and there are not funds available under
11-17    Subsection (k) [(j)], the commissioner shall reduce the total
11-18    amount of state funds allocated to each district by an amount
11-19    determined by a method under which the application of the same
11-20    number of cents of increase in tax rate in all districts applied to
11-21    the taxable value of property of each district, as determined under
11-22    Subchapter M, Chapter 403, Government Code, results in a total levy
11-23    equal to the total reduction.  The following fiscal year, a
11-24    district's entitlement under this section is increased by an amount
11-25    equal to the reduction made under this subsection.
11-26          (j) [(i)]  Not later than March 1 each year, the commissioner
11-27    shall determine the actual amount of state funds to which each
 12-1    school district is entitled under the allocation formulas in this
 12-2    chapter for the current school year and shall compare that amount
 12-3    with the amount of the warrants issued to each district for that
 12-4    year.  If the amount of the warrants differs from the amount to
 12-5    which a district is entitled because of variations in the
 12-6    district's tax rate, student enrollment, or taxable value of
 12-7    property, the commissioner shall adjust the district's entitlement
 12-8    for the next fiscal year accordingly.
 12-9          (k) [(j)]  The legislature may appropriate funds necessary
12-10    for increases under Subsection (j) [(i)] from funds that the
12-11    comptroller, at any time during the fiscal year, finds are
12-12    available.
12-13          (l) [(k)]  The commissioner shall compute for each school
12-14    district the total amount by which the district's allocation of
12-15    state funds is increased or reduced under Subsection (j) [(i)] and
12-16    shall certify that amount to the district.
12-17          (m) [(l)]  In this section, the number of students in
12-18    weighted average daily attendance is calculated in the manner
12-19    provided by Section 42.302.
12-20          SECTION 3.02. Section 42.302(b), Education Code, is amended
12-21    to read as follows:
12-22          (b)  In computing the district enrichment tax rate of a
12-23    school district, the total amount of maintenance and operations
12-24    taxes collected by the school district does not include the amount
12-25    of:
12-26                (1)  the district's local fund assignment under Section
12-27    42.252; [or]
 13-1                (2)  taxes levied under Section 45.003(f); or
 13-2                (3)  taxes paid into a tax increment fund under Chapter
 13-3    311, Tax Code.
 13-4          SECTION 3.03. Section 45.003, Education Code, is amended by
 13-5    amending Subsection (d) and adding Subsections (f)-(h) to read as
 13-6    follows:
 13-7          (d)  Except as provided by Subsection (f), a [A] proposition
 13-8    submitted to authorize the levy of maintenance taxes must include
 13-9    the question of whether the governing board or commissioners court
13-10    may levy, assess, and collect annual ad valorem taxes for the
13-11    further maintenance of public schools, at a rate not to exceed the
13-12    rate, which may be not more than $1.50 on the $100 valuation of
13-13    taxable property in the district, stated in the proposition.
13-14          (f)  In addition to a proposition submitted under Subsection
13-15    (d), a proposition may be submitted to authorize the levy of
13-16    maintenance taxes that includes the question of whether the
13-17    governing board or commissioners court may levy, assess, and
13-18    collect annual ad valorem taxes for the specific purpose of
13-19    receiving state equalization aid to permit the district or county
13-20    to participate in the Texas school employees group benefits program
13-21    under Article 3.50-7, Insurance Code, at:
13-22                (1)  a rate not to exceed the rate stated in the
13-23    proposition; or
13-24                (2)  a rate sufficient to permit the district to
13-25    participate in the Texas school employees group benefits program.
13-26          (g)  On the ballot containing a proposition submitted under
13-27    Subsection (f), immediately following the proposition the ballot
 14-1    shall state: "This tax, if approved, would result in a (net
 14-2    decrease or net increase) of ($___) on the $100 valuation of
 14-3    taxable property in the (district or county)."  For a district that
 14-4    levies a tax for which state aid will not be provided under Section
 14-5    42.253(f) at a rate that is greater than the tax rate under Section
 14-6    45.0031 for the following school year, the amount of a net decrease
 14-7    to be stated is the difference between the portion of the district
 14-8    tax rate for which state aid will not be provided under Section
 14-9    42.253(f) and the tax rate under Section 45.0031.  The amount of a
14-10    net increase to be stated is:
14-11                (1)  for a district that levies a tax for which state
14-12    aid will not be provided under Section 42.253(f) at a rate that is
14-13    less than the tax rate under Section 45.0031 for the following
14-14    school year, the difference between the tax rate under Section
14-15    45.0031 and the portion of the district tax rate for which state
14-16    aid will not be provided under Section 42.253(f); or
14-17                (2)  for a district that does not levy a tax for which
14-18    state aid will not be provided under Section 42.253(f), the tax
14-19    rate under Section 45.0031 for the following school year.
14-20          (h)  The limitation on the tax rate under Subsection (d) does
14-21    not apply to the combined rate of taxes imposed as a result of an
14-22    election under Subsection (d) and an election under Subsection (f).
14-23          SECTION 3.04. Subchapter A, Chapter 45, Education Code, is
14-24    amended by adding Sections 45.0031 and 45.0032 to read as follows:
14-25          Sec. 45.0031.  TAX RATE FOR PARTICIPATION IN GROUP BENEFIT
14-26    PLANS. (a)  The legislature in the General Appropriations Act shall
14-27    set for each year of the state fiscal biennium the effective tax
 15-1    rate, expressed as a number of cents on the $100 valuation of
 15-2    taxable property, that school districts must levy under Section
 15-3    45.003(f) to receive state equalization aid to permit the districts
 15-4    to participate in the Texas school employees group benefits program
 15-5    under Article 3.50-7, Insurance Code.  An effective tax rate under
 15-6    this subsection must be based on the estimates required under
 15-7    Section 42.254(a)(2) of the taxable value of property of school
 15-8    districts participating in the Texas school employees group
 15-9    benefits program.  The employees of a district that levies the
15-10    required effective tax rate and remits the required revenue as
15-11    provided by Section 45.0032 are eligible to participate in the
15-12    program and are entitled to receive the primary health plan
15-13    coverage under the Texas school employees group benefits program
15-14    without any further expenditure by the district.
15-15          (b)  Each year, the comptroller shall certify to each
15-16    participating school district in writing:
15-17                (1)  the effective tax rate set under Subsection (a);
15-18                (2)  the amount of revenue the district must provide to
15-19    participate in the Texas school employees group benefits program,
15-20    which is determined by multiplying the effective tax rate set under
15-21    Subsection (a)  by the quotient of the district's taxable value of
15-22    property for the preceding tax year, as determined under Subchapter
15-23    M, Chapter 403, Government Code, or, if applicable, under Section
15-24    42.2521, divided by 100; and
15-25                (3)  as determined by the board of trustees of the
15-26    Teacher Retirement System of Texas, the actual cost per full-time
15-27    employee, expressed as a monthly premium, for coverage under the
 16-1    group coverage plans established under Article 3.50-7, Insurance
 16-2    Code.
 16-3          (c)  Each school district that will levy taxes under Section
 16-4    45.003(f) shall determine the nominal rate the district must levy
 16-5    to collect the amount of revenue certified under Subsection (b)(2).
 16-6    In determining a nominal rate under this subsection, a school
 16-7    district shall use the district's anticipated collection rate
 16-8    certified to the district under Section 26.04(b), Tax Code.
 16-9          Sec. 45.0032.  REMITTANCE OF REVENUE FOR PARTICIPATION IN
16-10    GROUP HEALTH PROGRAM. (a)  A school district that levies a tax
16-11    under Section 45.003(f) to permit the district to participate in
16-12    the Texas school employees group benefits program under Article
16-13    3.50-7, Insurance Code, shall, in the time and manner prescribed by
16-14    comptroller rule, remit to the comptroller for deposit in the
16-15    school employees uniform group benefits trust fund the amount of
16-16    revenue certified to the district under Section 45.0031(b)(2).
16-17          (b)  If the revenue received from a tax levied under Section
16-18    45.003(f) is less than the amount of revenue certified to the
16-19    school district under Section 45.0031(b)(2), or if the district
16-20    does not levy a tax under Section 45.003(f), the district shall
16-21    remit other revenue sufficient to comply with Subsection (a).  If
16-22    the revenue received from a tax levied under Section 45.003(f) is
16-23    greater than the amount of revenue certified to the district under
16-24    Section 45.0031(b)(2), the district shall:
16-25                (1)  deposit or invest the excess funds in accordance
16-26    with law; and
16-27                (2)  use the excess funds and the interest or earnings
 17-1    on the excess funds to comply with the district's obligation under
 17-2    this section in the subsequent fiscal year.
 17-3          (c)  If a school district fails to comply with Subsection
 17-4    (a), the comptroller or commissioner, as appropriate, may:
 17-5                (1)  reduce the district's aid under Chapter 42 for the
 17-6    current or a subsequent school year;
 17-7                (2)  take any action permitted by Section 42.258 for
 17-8    recovery of an overallocation of state funds distributed under
 17-9    Chapter 42; or
17-10                (3)  if the district is required to take action under
17-11    Chapter 41 to reduce its wealth per student to the equalized wealth
17-12    level, adjust the district's wealth per student in the amount
17-13    necessary to require the district to purchase attendance credits
17-14    under Subchapter D, Chapter 41, costing an amount equal to the
17-15    amount of revenue the district fails to remit under Subsection (a).
17-16          (d)  The comptroller shall deposit all revenue received under
17-17    this section in the school employees uniform group benefits trust
17-18    fund under Article 3.50-7, Insurance Code.
17-19          SECTION 3.05. Section 26.08, Tax Code, is amended by adding
17-20    Subsection (k) to read as follows:
17-21          (k)  For the first tax year in which a school district levies
17-22    a tax under Section 45.003(f), Education Code, the rollback rate
17-23    for the district under Subsection (i) is reduced by an amount equal
17-24    to the portion of the district maintenance and operations tax rate
17-25    for which state aid will not be provided under Section 42.253(f),
17-26    Education Code.
17-27          SECTION 3.06. Section 43.008, Education Code, is repealed.
 18-1          SECTION 3.07. This article takes effect only if the
 18-2    constitutional amendment proposed by the 77th Legislature, Regular
 18-3    Session, 2001, relating to the provision of group benefits for
 18-4    active and retired school employees and distributions from the
 18-5    permanent school fund is approved by the voters.  If the proposed
 18-6    constitutional amendment is not approved by the voters, this
 18-7    article has no effect.
 18-8           ARTICLE 4.  PROGRAM FUNDING THROUGH MOTOR FUEL TAXES
 18-9          SECTION 4.01. Section 153.102, Tax Code, is amended to read
18-10    as follows:
18-11          Sec. 153.102.  TAX RATES. (a)  The gasoline tax rate is 25
18-12    [20] cents for each gross or volumetric gallon or fractional part
18-13    sold or used in this state except as provided by Subsection (b).
18-14          (b)  The gasoline tax rate for gasoline sold to a transit
18-15    company for exclusive use in its transit carrier vehicles under an
18-16    exemption certificate promulgated by the comptroller is 24 [19]
18-17    cents for each gallon.
18-18          SECTION 4.02. Section 153.202, Tax Code, is amended to read
18-19    as follows:
18-20          Sec. 153.202.  TAX RATES. (a)  The diesel fuel tax rate is 25
18-21    [20] cents for each gross or volumetric gallon or fractional part
18-22    sold or used in this state except as provided by Subsection (b).
18-23          (b)  The diesel fuel tax rate for diesel fuel sold by a
18-24    permitted supplier to a transit company for exclusive use in its
18-25    transit vehicles under an exemption certificate issued by the
18-26    comptroller is 24.5 [19.5] cents for each gallon.
18-27          SECTION 4.03. Section 153.301(b), Tax Code, is amended to
 19-1    read as follows:
 19-2          (b)  The liquefied gas tax rate is 20 [15] cents a gallon.
 19-3          SECTION 4.04. Sections 153.305(a) and (c), Tax Code, are
 19-4    amended to read as follows:
 19-5          (a)  A user of liquefied gas for the propulsion of a motor
 19-6    vehicle on the public highways of Texas shall pay in advance
 19-7    annually on each motor vehicle owned, operated, and licensed in
 19-8    Texas by him, a tax based on the registered gross weight and
 19-9    mileage driven the previous year in the following schedule:
19-10                         Less Than   5,000 to    10,000 to     15,000
19-11                           5,000       9,999      14,999       miles
19-12                           miles       miles       miles      and over
19-13    Class A:  Less than
19-14     4,000 pounds     $ 40 [$ 30] $ 80 [$ 60] $ 120 [$ 90] $ 160 [$120]
19-15    Class B:  4,000 to
19-16     10,000 pounds      56   [42]  112   [84]   168  [126]   224  [168]
19-17    Class C:  10,001 to
19-18     15,000 pounds      64   [48]  128   [96]   192  [144]   256  [192]
19-19    Class D:  15,001 to
19-20     27,500 pounds     112   [84]  224  [168]   336  [252]   448  [336]
19-21    Class E:  27,501 to
19-22     43,500 pounds     168  [126]  336  [252]   504  [378]   672  [504]
19-23    Class F:  43,501
19-24     pounds and over   248  [186]  496  [372]   744  [558]   992  [744]
19-25          (c)  The following special use liquefied gas tax decal and
19-26    tax shall be required for the types of vehicles described below:
 20-1    Class T:  Transit carrier vehicles operated by a
 20-2              transit company ............................. $592 [$444]
 20-3          SECTION 4.05. Subchapter F, Chapter 153, Tax Code, is amended
 20-4    by adding Section 153.506 to read as follows:
 20-5          Sec. 153.506.  ALLOCATION OF REVENUE FROM CERTAIN TAX
 20-6    INCREASES.  Notwithstanding any other provision of this subchapter,
 20-7    the net revenue derived from an increase in the rate of a tax
 20-8    imposed under this chapter over the rate of the tax on January 1,
 20-9    2001, shall be used for the sole purpose of funding group benefits
20-10    for employees and retirees of school districts under Article
20-11    3.50-7, Insurance Code.
20-12          SECTION 4.06. (a)  Except as provided by Subsection (b), this
20-13    article takes effect September 1, 2001, and applies  to a taxable
20-14    sale or use of motor fuel under Chapter 153, Tax Code, on or after
20-15    that date.  The taxable sale or use of motor fuel before the
20-16    effective date of this article is governed by the law in effect at
20-17    the time of the transaction, and that law is continued in effect
20-18    for the enforcement and collection of those taxes.
20-19          (b)  Section 4.05 of this article takes effect January 1,
20-20    2002, but only if the constitutional amendment proposed by the 77th
20-21    Legislature, Regular Session, 2001, dedicating increases in the
20-22    rate of a motor fuel tax to fund group benefits for employees of
20-23    school districts takes effect.  If the proposed constitutional
20-24    amendment is not approved, this article has no effect.
20-25                  ARTICLE 5.  TRANSITION; EFFECTIVE DATE
20-26          SECTION 5.01. Except as expressly provided by this Act, this
20-27    Act takes effect September 1, 2001.
 21-1          SECTION 5.02. The Teacher Retirement System of Texas shall
 21-2    adopt rules as necessary to implement Article 3.50-7, Insurance
 21-3    Code, as added by this Act, not later than December 31, 2001.
 21-4          SECTION 5.03. (a)  During the 2001-2002 school year, the
 21-5    Teacher Retirement System of Texas shall develop the plan or plans
 21-6    to be implemented and administered under Article 3.50-7, Insurance
 21-7    Code, as added by this Act.  The system may employ persons as
 21-8    necessary to implement this subsection.
 21-9          (b)  The Teacher Retirement System of Texas shall enroll
21-10    persons in the program provided under Article 3.50-7, Insurance
21-11    Code, as added by this Act, beginning with the 2002-2003 school
21-12    year, but not later than September 1, 2002.