84R668 GCB-D
By: Aycock H.B. No. 654
A BILL TO BE ENTITLED
AN ACT
relating to public school finance and the formation of school
finance districts.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle I, Title 2, Education Code, is amended
by adding Chapter 42A to read as follows:
CHAPTER 42A. PUBLIC SCHOOL FINANCE SYSTEM
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 42A.001. STATE POLICY. (a) It is the policy of this
state that the provision of public education is a state
responsibility and that a thorough and efficient system be provided
and substantially financed through state revenue sources so that
each student enrolled in the public school system shall have access
to programs and services that are appropriate to the student's
educational needs and that are substantially equal to those
available to any similar student, notwithstanding varying local
economic factors.
(b) The public school finance system of this state shall
adhere to a standard of neutrality that provides for substantially
equal access to similar revenue per student at similar tax effort,
considering all state and local tax revenues of districts after
acknowledging all legitimate student and district cost
differences.
Sec. 42A.002. PUBLIC SCHOOL FINANCE SYSTEM. (a) The public
school finance system consists of state funding as provided by
Subchapter C and local funding as provided by Subchapter D, with
each source of funding distributed on the basis of weighted average
daily attendance, as determined under Section 42A.102.
(b) Additional amounts of funding are made available
through the public school finance system for specified purposes as
provided by law.
Sec. 42A.003. STUDENT ELIGIBILITY. (a) A student is
entitled to the benefits of the public school finance system if, on
September 1 of the school year, the student:
(1) is 5 years of age or older and under 21 years of age
and has not graduated from high school, or is at least 21 years of
age and under 26 years of age and has been admitted by a school
district to complete the requirements for a high school diploma; or
(2) is at least 19 years of age and under 26 years of
age and is enrolled in an adult high school diploma and industry
certification charter school pilot program under Section 29.259.
(b) A student to whom Subsection (a) does not apply is
entitled to the benefits of the public school finance system if the
student is enrolled in a prekindergarten class under Section
29.153.
(c) A child may be enrolled in the first grade if the child
is at least six years of age at the beginning of the school year of
the district or has been enrolled in the first grade or has
completed kindergarten in the public schools in another state
before transferring to a public school in this state.
(d) Notwithstanding Subsection (a), a student younger than
five years of age is entitled to the benefits of the public school
finance system if:
(1) the student performs satisfactorily on the
assessment instrument administered under Section 39.023(a) to
students in the third grade; and
(2) the district has adopted a policy for admitting
students younger than five years of age.
Sec. 42A.004. AVERAGE DAILY ATTENDANCE. (a) In this
chapter, average daily attendance is:
(1) the quotient of the sum of attendance for each day
of the minimum number of days of instruction as described under
Section 25.081(a) divided by the minimum number of days of
instruction;
(2) for a district that operates under a flexible year
program under Section 29.0821, the quotient of the sum of
attendance for each actual day of instruction as permitted by
Section 29.0821(b)(1) divided by the number of actual days of
instruction as permitted by Section 29.0821(b)(1); or
(3) for a district that operates under a flexible
school day program under Section 29.0822, the average daily
attendance as calculated by the commissioner in accordance with
Section 29.0822(d).
(b) For purposes of this chapter, the average daily
attendance of a school district that experiences a decline of two
percent or more in average daily attendance is considered to be:
(1) the actual average daily attendance of the
preceding school year, if the decline is the result of the closing
or reduction in personnel of a military base; or
(2) subject to Subsection (e), an average daily
attendance not to exceed 98 percent of the actual average daily
attendance of the preceding school year, if the decline is not the
result of the closing or reduction in personnel of a military base.
(c) The commissioner shall adjust the average daily
attendance of a school district that has a significant percentage
of students who are migratory children as defined by 20 U.S.C.
Section 6399.
(d) The commissioner may adjust the average daily
attendance of a school district in which a disaster, flood, extreme
weather condition, fuel curtailment, or other calamity has a
significant effect on the district's attendance.
(e) For each school year, the commissioner shall adjust the
average daily attendance of school districts that are considered to
have an adjusted average daily attendance under Subsection (b)(2)
so that:
(1) all districts are considered to have the same
percentage of the preceding year's actual average daily attendance;
and
(2) the total cost to the state does not exceed the
amount specifically appropriated for that year for purposes of
Subsection (b)(2).
(f) An open-enrollment charter school is not entitled to an
adjustment under Subsection (b)(2).
(g) If a student may receive course credit toward the
student's high school academic requirements and toward the
student's higher education academic requirements for a single
course, including a course provided under Section 28.009 by a
public institution of higher education, the time during which the
student attends the course shall be counted as part of the minimum
number of instructional hours required for a student to be
considered a full-time student in average daily attendance for
purposes of this section.
Sec. 42A.005. AVERAGE DAILY ATTENDANCE FOR DISTRICTS IN
DISASTER AREA. (a) From funds specifically appropriated for the
purpose or other funds available to the commissioner for that
purpose, the commissioner shall adjust the average daily attendance
of a school district all or part of which is located in an area
declared a disaster area by the governor under Chapter 418,
Government Code, if the district experiences a decline in average
daily attendance that is reasonably attributable to the impact of
the disaster.
(b) The adjustment must be sufficient to ensure that the
district receives funding comparable to the funding that the
district would have received if the decline in average daily
attendance reasonably attributable to the impact of the disaster
had not occurred.
(c) The commissioner shall make the adjustment required by
this section for the two-year period following the date of the
governor's initial proclamation or executive order declaring the
state of disaster.
(d) Section 42A.004(b)(2) does not apply to a district that
receives an adjustment under this section.
(e) A district that receives an adjustment under this
section may not receive any additional adjustment under Section
42A.004(d) for the decline in average daily attendance on which the
adjustment under this section is based.
(f) For purposes of this title, a district's adjusted
average daily attendance under this section is considered to be the
district's average daily attendance as determined under Section
42A.004.
Sec. 42A.006. REFERENCES TO FOUNDATION SCHOOL PROGRAM. A
reference in law to the Foundation School Program means the public
school finance system under this chapter.
SUBCHAPTER B. PERMISSIBLE WEALTH LEVEL AND SCHOOL FINANCE
DISTRICTS
Sec. 42A.051. DEFINITIONS. In this subchapter:
(1) "Wealth per weighted student" means the taxable
value of property, as determined under Subchapter M, Chapter 403,
Government Code, divided by the number of students in weighted
average daily attendance.
(2) "Weighted average daily attendance" means the
number of students in total weighted average daily attendance in a
school district as determined under Section 42A.102 and as adjusted
under Subchapter C, if applicable.
Sec. 42A.052. PERMISSIBLE RANGE OF WEALTH. (a) Using the
most current information available, the commissioner shall
determine the statewide average total property tax rate imposed by
school districts in this state, the statewide average wealth per
weighted student of school districts in this state, and the tax
revenue per weighted student that would result from imposing the
average tax rate against the average wealth per weighted student.
(b) A school district's wealth per weighted student is
required to be:
(1) at least the wealth that, at the average tax rate
determined under Subsection (a), would result in revenue per
weighted student that is $300 less than the amount of revenue per
weighted student determined by the commissioner under Subsection
(a); and
(2) not more than the wealth that, at the average tax
rate determined under Subsection (a), would result in revenue per
weighted student that is $300 more than the amount of revenue per
weighted student determined by the commissioner under Subsection
(a).
(c) The commissioner shall notify each school district
determined to have a wealth per weighted student that is not within
the permissible range of wealth under this section. The
commissioner shall also publish the permissible range of wealth on
the agency's Internet website.
(d) The commissioner shall revise the determination of
permissible wealth level and provide the notification required by
this section every 10 years.
Sec. 42A.053. CREATION OF SCHOOL FINANCE DISTRICT. (a) If
the wealth per weighted student of a school district is not within
the permissible range under Section 42A.052, the district must form
a school finance district with one or more other school districts in
accordance with this subchapter or be subject to consolidation by
the commissioner under Section 42A.062.
(b) The board of trustees of each school district proposing
to form a school finance district must execute an agreement to
conduct an election on the creation of the district for the purpose
of consolidating the tax bases of the component school districts.
(c) The boards of trustees may not proceed with the election
unless the proposed agreement is approved by the commissioner as
provided by Section 42A.054.
(d) The agreement must provide that:
(1) each component school district will receive from
the maintenance tax revenue of the school finance district an equal
amount of money per student in weighted average daily attendance;
and
(2) the school finance district will assume all the
indebtedness of the component school districts.
Sec. 42A.054. APPROVAL BY COMMISSIONER. The commissioner
shall approve a proposed school finance district agreement if:
(1) the board of trustees of each component school
district has approved the proposed school finance district; and
(2) the proposed school finance district's wealth per
weighted student will be within the permissible range under Section
42A.052.
Sec. 42A.055. ELECTION REQUIRED. (a) An agreement under
this subchapter must provide for the ordering of an election to be
held on the same date in each component school district. The
election must be held on a Tuesday or Saturday, and Section 41.001,
Election Code, does not apply to the election.
(b) The ballot shall be printed to permit voting for or
against the proposition: "Creation of a school finance district
composed of the consolidated territory for taxing purposes of
_________________________ school districts, and authorizing the
levy, assessment, and collection of annual ad valorem taxes for the
maintenance of the public free schools within that territory at a
rate not to exceed $_________ on the $100 valuation of taxable
property; and further to create a consolidated tax base for the
repayment of all bonded indebtedness issued by the joint board of
the school finance district or previously issued by the component
school districts and to authorize the joint board of the school
finance district to levy, pledge, and collect ad valorem taxes at a
rate sufficient to pay the principal of and interest on those
bonds."
(c) The rate of the tax for maintenance of the public free
schools to be included in the proposition shall be provided by the
agreement among the component school districts.
(d) The proposition is approved only if the proposition
receives a favorable vote of the majority of the votes cast within
each component school district.
Sec. 42A.056. STATUS OF SCHOOL FINANCE DISTRICT. (a) A
school finance district is a school district established for the
limited purpose of exercising the taxing power authorized by
Section 3, Article VII, Texas Constitution, and distributing the
revenue to its component school districts as provided by this
chapter.
(b) A school finance district may issue bonds as provided by
Chapter 45.
(c) A school finance district is subject to any provision of
law applicable to a school district that relates to imposition of
taxes, issuance of bonds, collection and distribution of tax
revenue, or the determination of a school district's entitlement to
funding under this chapter.
Sec. 42A.057. GOVERNANCE. (a) A school finance district is
governed by the boards of trustees of the component school
districts acting jointly.
(b) Any action taken by the joint board must receive a
favorable vote of a majority of each component school district's
board of trustees.
Sec. 42A.058. MAINTENANCE AND BOND TAXES. (a) The joint
board shall levy a maintenance tax for the benefit of the component
school districts not later than September 1 of each year or as soon
thereafter as practicable.
(b) The joint board shall levy a bond tax if necessary to pay
principal and interest on bonds issued by the joint board or to pay
indebtedness of component school districts assumed by the school
finance district.
(c) Each component school district shall bear a share of the
costs of assessing and collecting taxes in proportion to the
component school district's share of weighted average daily
attendance in the school finance district.
(d) A component school district may not levy maintenance or
bond taxes.
(e) A school finance district is entitled to assistance with
payment of existing debt under Subchapter B, Chapter 46.
Sec. 42A.059. DISSOLUTION OF SCHOOL FINANCE DISTRICT. (a)
A school finance district formed under this subchapter exists for
10 years after the date the district was created. On the expiration
of the 10-year period, a school finance district is dissolved.
(b) Each component school district that remains, after the
commissioner's revision of the permissible range of wealth, subject
to the requirement to form a school finance district under Section
42A.053(a) shall form a new school finance district or seek
continuation of the former school finance district, as provided by
Section 42A.060.
Sec. 42A.060. CONTINUED MEMBERSHIP IN SCHOOL FINANCE
DISTRICT. (a) A school district shall form a new school finance
district in the manner provided by this subchapter or continue an
existing school finance district if the school district continues
to have a wealth per weighted student that is not within the most
recently determined permissible range of wealth.
(b) The board of trustees of each component school district
that seeks to continue an existing school finance district shall
seek the commissioner's approval to continue the school finance
district for another 10-year period.
(c) The commissioner shall approve the continuation of a
school finance district for a succeeding 10-year period if:
(1) the board of trustees of each component school
district petitions the commissioner for the continuation of the
school finance district; and
(2) the school finance district's wealth per weighted
student is within the most recently determined permissible range of
wealth.
(d) An existing school finance district that obtains the
commissioner's approval for a succeeding 10-year period is not
required to obtain renewed voter approval.
Sec. 42A.061. OPTIONAL FORMATION OR CONTINUATION OF SCHOOL
FINANCE DISTRICT. The board of trustees of a school district not
required to form or continue a school finance district under this
subchapter may elect to do so by satisfying the requirements for
formation or continuation provided by this subchapter.
Sec. 42A.062. CONSOLIDATION BY COMMISSIONER. (a) A school
district required to form a school finance district under Section
42A.053 is subject to consolidation under this section if the
district has not, before the date specified by the commissioner:
(1) agreed to be a member of a school finance district;
(2) obtained approval of the commissioner as required
by Section 42A.053; and
(3) received the approval of the voters in each
component school district regarding the formation of the school
finance district and the imposition of taxes.
(b) The commissioner shall order the consolidation of a
school district described by Subsection (a) with one or more other
school districts. The commissioner shall consolidate school
districts so that the projected wealth per weighted student of the
consolidated school district is within the permissible range of
wealth.
Sec. 42A.063. GOVERNANCE OF CONSOLIDATED DISTRICT. (a)
Until the initial trustees elected as provided by Subsection (b)
have qualified and taken office, a district consolidated under
Section 42A.062 is governed by a transitional board of trustees
consisting of the board of trustees of the district having the
greatest student membership on the last day of the school year
preceding the consolidation plus one member of the board of
trustees of each other consolidating district selected by that
board.
(b) The transitional board of trustees shall divide the
consolidated district into nine single-member trustee districts in
accordance with the procedures provided by Section 11.052. The
transitional board shall order an election for the initial board of
trustees to be held on the first May uniform election date after the
effective date of a consolidation order.
(c) Members of the board of trustees of a consolidated
district serve staggered terms of office for four years.
(d) Section 13.156 applies to districts consolidated under
this subchapter.
Sec. 42A.064. FUND BALANCES OF CONSOLIDATED DISTRICT. Fund
balances of a school district consolidated under Section 42A.062
may be used only for the benefit of the schools within the district
that generated the funds.
Sec. 42A.065. EMPLOYMENT CONTRACTS OF CONSOLIDATED
DISTRICT. A consolidated district created under Section 42A.062
shall honor an employment contract entered into by a consolidating
district.
Sec. 42A.066. COMMISSIONER TO APPROVE SUBSEQUENT BOUNDARY
CHANGES. A school district that is involved in an action under this
chapter that results in boundary changes to the district or in the
consolidation of tax bases into a school finance district is
subject to consolidation, detachment, or annexation under Chapter
13 only if the commissioner certifies that the change under Chapter
13 will not result in a district with a wealth per weighted student
that is not within the permissible range of wealth.
Sec. 42A.067. HOMESTEAD EXEMPTIONS. (a) The governing
board of a school district that results from consolidation under
this chapter, including consolidation of tax bases into a school
finance district, for the tax year in which the consolidation
occurs may determine whether to adopt a homestead exemption
provided by Section 11.13, Tax Code, and may set the amount of the
exemption, if adopted, at any time before the governing board
adopts a tax rate for that tax year. This section applies only to an
exemption that the governing board of a school district is
authorized to adopt or change in amount under Section 11.13, Tax
Code.
(b) This section prevails over any inconsistent provision
of Section 11.13, Tax Code, or other law.
Sec. 42A.068. TAX ABATEMENTS. (a) A tax abatement
agreement executed by a school district that is involved in
consolidation under this chapter is not affected and applies to the
taxation of the property covered by the agreement as if executed by
the district within which the property is included.
(b) The commissioner shall determine the wealth per
weighted student of a school district under this chapter as if any
tax abatement agreement executed by a school district on or after
May 31, 1993, had not been executed.
Sec. 42A.069. TAX INCREMENT OBLIGATIONS. The payment of
tax increments under Chapter 311, Tax Code, is not affected by the
consolidation of territory or tax bases under this chapter. In each
tax year a school district paying a tax increment from taxes on
property over which the district has assumed taxing power is
entitled to retain the same percentage of the tax increment from
that property that the district in which the property was located
before the consolidation could have retained for the respective tax
year.
Sec. 42A.070. REQUIRED NUMBER OF SCHOOL FINANCE DISTRICTS.
In approving the formation or continuation of school finance
districts under this subchapter, the commissioner shall ensure the
formation of not fewer than 30 school finance districts in the
state.
SUBCHAPTER C. STATE FUNDING
Sec. 42A.101. STATE FUNDS. (a) Each biennium, the
legislature shall set by appropriation the amount of state funds to
be distributed each school year for public education in accordance
with this chapter.
(b) The amount appropriated shall be distributed to school
districts on the basis of each district's total weighted average
daily attendance, as computed under this subchapter, with each
district entitled to receive the same amount of state funds per
student in weighted average daily attendance.
(c) Distributions shall be made in accordance with the
payment schedule adopted under Section 42A.204.
Sec. 42A.102. DETERMINATION OF WEIGHTED AVERAGE DAILY
ATTENDANCE. (a) The total weighted average daily attendance of a
school district is the sum of the weighted average daily attendance
for each educational program for which a student multiplier is
provided under Subsection (b), as determined by the formula:
EPWADA = S X SM X CEI
where:
"EPWADA" is the weighted average daily attendance for the
educational program;
"S" is the number of students in average daily attendance,
number of full-time equivalent students, or number of students
enrolled, as appropriate, in the educational program for which the
computation is made;
"SM" is the student multiplier for the educational program,
as provided by Subsection (b); and
"CEI" is 50 percent of the cost of education index adjustment
for the school district adopted by the foundation school fund
budget committee to reflect the geographic variation in known
resource costs and costs of education due to factors beyond the
control of the school district contained in Chapter 203, Title 19,
Texas Administrative Code, as that chapter existed on January 1,
1997.
(b) The student multipliers are:
(1) 1.0 for a student in average daily attendance, not
including time the student spends each day in a special education
program in an instructional arrangement other than mainstream or in
a career and technology education program;
(2) 1.1 for a student in a special education program in
a mainstream instructional arrangement;
(3) 5.0 for a full-time equivalent student in a
special education program in a homebound instructional
arrangement;
(4) 3.0 for a full-time equivalent student in a
special education program in a hospital class instructional
arrangement;
(5) 5.0 for a full-time equivalent student in a
special education program in a speech therapy instructional
arrangement;
(6) 3.0 for a full-time equivalent student in a
special education program in a resource room instructional
arrangement;
(7) 3.0 for a full-time equivalent student in a
special education program in a self-contained, mild and moderate,
regular campus instructional arrangement;
(8) 3.0 for a full-time equivalent student in a
special education program in a self-contained, severe, regular
campus instructional arrangement;
(9) 2.7 for a full-time equivalent student in a
special education program in an off-home campus instructional
arrangement;
(10) 1.7 for a full-time equivalent student in a
special education program in a nonpublic day school;
(11) 2.3 for a full-time equivalent student in a
special education program vocational adjustment class;
(12) 4.0 for a student in a special education program
who resides in a care and treatment facility, other than a state
supported living center, whose parent or guardian does not reside
in the district, and who receives educational services from the
district campus;
(13) 2.8 for a student in a special education program
who resides in a state supported living center;
(14) 0.2 for a student who is educationally
disadvantaged or who is a student who does not have a disability and
resides in a residential placement facility in a district in which
the student's parent or guardian does not reside;
(15) 2.41 for a full-time equivalent student who is in
a remedial and support program under Section 29.081 because the
student is pregnant;
(16) 0.1 for a student who is in a bilingual education
or special language program under Subchapter B, Chapter 29;
(17) 1.35 for a full-time equivalent student in an
approved career and technology education program in grades nine
through 12 or in a career and technology education program for
students with disabilities in grades seven through 12;
(18) 0.12 for a student in a program for gifted and
talented students that the district certifies to the commissioner
as complying with Subchapter D, Chapter 29; and
(19) except as provided by Section 42A.256, 0.1 for a
student in average daily attendance who is using a public education
grant under Subchapter G, Chapter 29, to attend school in a district
other than the district in which the student resides.
(c) In this section:
(1) "Career and technology education program" means a
program under Subchapter F, Chapter 29.
(2) "Full-time equivalent student" means 30 hours of
contact a week between a student and program personnel.
(3) "Special education program" means a program under
Subchapter A, Chapter 29.
Sec. 42A.103. SMALL AND MID-SIZED DISTRICT ADJUSTMENT. (a)
The adjusted weighted average daily attendance of certain small and
mid-sized districts is computed in accordance with this section.
In this section:
(1) "AWADA" is the adjusted weighted average daily
attendance;
(2) "ADA" is the number of students in average daily
attendance in the district; and
(3) "WADA" is the total number of students in weighted
average daily attendance determined under Section 42A.102.
(b) The adjusted weighted average daily attendance of a
school district that contains at least 300 square miles and has not
more than 1,600 students in average daily attendance is determined
by the formula:
AWADA = (1 + ((1,600 - ADA) X .0004)) X WADA
(c) The adjusted weighted average daily attendance of a
school district that contains less than 300 square miles and has not
more than 1,600 students in average daily attendance is determined
by the formula:
AWADA = (1 + ((1,600 - ADA) X .00025)) X WADA
(d) The adjusted weighted average daily attendance of a
school district that offers a kindergarten through grade 12 program
and has less than 5,000 students in average daily attendance is
determined by the formula, of the following formulas, that results
in the greatest weighted average daily attendance:
(1) the formula in Subsection (b) or (c) for which the
district is eligible; or
(2) AWADA = (1 + ((5,000 - ADA) X .000025)) X WADA
(e) A school district's adjusted weighted average daily
attendance computed under this section is used in determining the
amount of funding to which the district is entitled under this
chapter on the basis of weighted average daily attendance.
Sec. 42A.104. SPARSITY ADJUSTMENT. Notwithstanding
Sections 42A.102 and 42A.103, the weighted average daily attendance
of a school district that has fewer than 130 students in average
daily attendance is 130 students in weighted average daily
attendance if the district offers a kindergarten through grade 12
program and has preceding or current year's average daily
attendance of at least 90 students or is 30 miles or more by bus
route from the nearest high school district. The weighted average
daily attendance of a district offering a kindergarten through
grade 8 program whose preceding or current year's average daily
attendance was at least 50 students or that is 30 miles or more by
bus route from the nearest high school district is 75 students in
weighted average daily attendance. A weighted average daily
attendance of 60 students shall be used if a district offers a
kindergarten through grade 6 program and has preceding or current
year's average daily attendance of at least 40 students or is 30
miles or more by bus route from the nearest high school district.
SUBCHAPTER D. LOCAL FUNDING
Sec. 42A.151. DEPOSIT WITH COMPTROLLER; DISTRIBUTION OF
SCHOOL FINANCE DISTRICT LOCAL FUNDS. (a) Each school finance
district shall submit to the comptroller the local tax revenue
collected by the school finance district. The comptroller shall
hold the money for the school finance district in a numbered account
outside the treasury for distribution to the component school
districts as provided by this section.
(b) For each school year, the comptroller shall determine
the total amount available for distribution from a school finance
district's account to the component school districts.
(c) In accordance with the payment schedule adopted under
Section 42A.204, the comptroller shall distribute the amount
determined under Subsection (b) to the component school districts
on the basis of the total weighted average daily attendance of each
school district, with each school district in the school finance
district receiving the same amount of local funding per student in
total weighted average daily attendance.
(d) The commissioner shall certify the total weighted
average daily attendance of each school district for purposes of
this section.
Sec. 42A.152. SCHOOL DISTRICT LOCAL FUNDS. A school
district that is not a member of a school finance district shall
retain control and possession of all local tax revenue, subject to
other law applicable to public education funds.
SUBCHAPTER E. ADMINISTRATION
Sec. 42A.201. ADMINISTRATION BY COMMISSIONER. The
commissioner, in accordance with the rules of the State Board of
Education, shall take such action and require such reports
consistent with this chapter as may be necessary to implement and
administer the public school finance system.
Sec. 42A.202. PUBLIC EDUCATION INFORMATION MANAGEMENT
SYSTEM (PEIMS). (a) Each school district shall participate in the
Public Education Information Management System (PEIMS) and shall
provide through that system information required for the
administration of this chapter and of other appropriate provisions
of this code.
(b) The commissioner by rule shall require each school
district and open-enrollment charter school to report through the
Public Education Information Management System information
regarding the number of students enrolled in the district or school
who are identified as having dyslexia. The agency shall maintain
the information provided in accordance with this subsection.
(c) Each school district shall use a uniform accounting
system adopted by the commissioner for the data required to be
reported for the Public Education Information Management System.
(d) Annually, the commissioner shall review the Public
Education Information Management System and shall repeal or amend
rules that require school districts to provide information through
the Public Education Information Management System that is not
necessary. In reviewing and revising the Public Education
Information Management System, the commissioner shall develop
rules to ensure that the system:
(1) provides useful, accurate, and timely information
on student demographics and academic performance, personnel, and
school district finances;
(2) contains only the data necessary for the
legislature and the agency to perform their legally authorized
functions in overseeing the public education system; and
(3) does not contain any information related to
instructional methods, except as provided by Section 29.066 or
required by federal law.
(e) The commissioner's rules must ensure that the Public
Education Information Management System links student performance
data to other related information for purposes of efficient and
effective allocation of scarce school resources, to the extent
practicable using existing agency resources and appropriations.
Sec. 42A.203. ESTIMATE REQUIRED. (a) Not later than
October 1 of each even-numbered year, the agency shall submit to the
legislature an estimate of the student enrollment and a projection
of the weighted average daily attendance of each school district
for the following biennium.
(b) The agency shall update the information provided to the
legislature under Subsection (a) not later than March 1 of each
odd-numbered year.
Sec. 42A.204. PAYMENT SCHEDULE. In coordination with the
comptroller and the Legislative Budget Board, the commissioner by
rule shall determine a schedule for payment of funds under this
chapter.
Sec. 42A.205. RECOVERY OF OVERALLOCATED FUNDS. (a) If a
school district has received an overallocation of funds, the agency
shall, by withholding from subsequent allocations of funds for the
current or subsequent school year or by requesting and obtaining a
refund, recover from the district an amount equal to the
overallocation.
(b) Notwithstanding Subsection (a), the agency may recover
an overallocation of funds over a period not to exceed the
subsequent five school years if the commissioner determines that
the overallocation was the result of exceptional circumstances
reasonably caused by statutory changes to this chapter or Chapter
46 and related reporting requirements.
(c) If a district fails to comply with a request for a refund
under Subsection (a), the agency shall certify to the comptroller
that the amount constitutes a debt for purposes of Section 403.055,
Government Code. The agency shall provide to the comptroller the
amount of the overallocation and any other information required by
the comptroller. The comptroller may certify the amount of the debt
to the attorney general for collection.
(d) Any amounts recovered under this section shall be
deposited to the credit of the available school fund.
Sec. 42A.206. FALSIFICATION OF RECORDS; REPORT. When, in
the opinion of the agency's director of school audits, audits or
reviews of accounting, enrollment, or other records of a school
district reveal deliberate falsification of the records, or
violation of the provisions of this chapter, through which the
district's share of funds allocated under the authority of this
chapter would be, or has been, illegally increased, the director
shall promptly and fully report the fact to the State Board of
Education, the state auditor, and the appropriate county attorney,
district attorney, or criminal district attorney.
SUBCHAPTER F. CONDITIONS APPLICABLE TO FUNDING BASED ON STUDENT
MULTIPLIERS
Sec. 42A.251. SPECIAL EDUCATION PROGRAMS. (a) For funding
purposes, the number of contact hours credited per day for each
student in the off-home campus instructional arrangement may not
exceed the contact hours credited per day for the multidistrict
class instructional arrangement in the 1992-1993 school year.
(b) For funding purposes, the number of contact hours
credited per day for each student in the resource room;
self-contained, mild and moderate; and self-contained, severe,
instructional arrangements may not exceed the average of the
statewide total contact hours credited per day for those three
instructional arrangements in the 1992-1993 school year.
(c) The State Board of Education by rule shall prescribe the
qualifications an instructional arrangement must meet in order to
be funded as a particular instructional arrangement under this
chapter. In prescribing the qualifications that a mainstream
instructional arrangement must meet, the board shall establish
requirements that students with disabilities and their teachers
receive the direct, indirect, and support services that are
necessary to enrich the regular classroom and enable student
success.
(d) Funds received by a school district as a result of the
district's weighted average daily attendance of students described
by Sections 42A.102(b)(2)-(13), other than an indirect cost
allowance established under State Board of Education rule, must be
used in the special education program under Subchapter A, Chapter
29.
(e) The agency shall encourage the placement of students in
special education programs, including students in residential
instructional arrangements, in the least restrictive environment
appropriate for their educational needs.
(f) The State Board of Education shall adopt rules and
procedures governing contracts for residential placement of
special education students. The legislature shall provide by
appropriation for the state's share of the costs of those
placements.
(g) A school district that provides an extended year program
required by federal law for special education students who may
regress is entitled to receive funds in an amount equal to 75
percent, or a lesser percentage determined by the commissioner, of
the amount of state funds provided per student in weighted average
daily attendance under Section 42A.101(b) for each full-time
equivalent student in average daily attendance, multiplied by the
amount designated for the student's instructional arrangement
under Section 42A.102(b) for each day the program is provided
divided by the number of days in the minimum school year. The total
amount of state funding for extended year services under this
subsection may not exceed $10 million per year. A school district
may use funds received under this subsection only in providing an
extended year program.
(h) From the total amount of funds appropriated for weighted
average daily attendance of students described by Sections
42A.102(b)(2)-(13), the commissioner shall withhold an amount
specified in the General Appropriations Act and distribute that
amount to school districts for programs under Section 29.014. The
program established under that section is required only in school
districts in which the program is financed by funds distributed
under this subsection and any other funds available for the
program. After deducting the amount withheld under this subsection
from the total amount appropriated for weighted average daily
attendance of students described by Sections 42A.102(b)(2)-(13),
the commissioner shall reduce each district's allocation
proportionately.
Sec. 42A.252. COMPENSATORY EDUCATION PROGRAMS. (a) In
this section, "compensatory education funds" means funds received
by a school district as a result of the district's weighted average
daily attendance of students described by Sections 42A.102(b)(14)
and (15).
(b) For purposes of Section 42A.102(b)(14), the number of
educationally disadvantaged students is determined:
(1) by averaging the best six months' enrollment in the
national school lunch program of free or reduced-price lunches for
the preceding school year; or
(2) in the manner provided by commissioner rule, if no
campus in the district participated in the national school lunch
program of free or reduced-price lunches during the preceding
school year.
(c) Compensatory education funds, other than an indirect
cost allowance established under State Board of Education rule,
which may not exceed 48 percent, shall be used to fund supplemental
programs and services designed to eliminate any disparity in
performance on assessment instruments administered under
Subchapter B, Chapter 39, or disparity in the rates of high school
completion between students at risk of dropping out of school, as
defined by Section 29.081, and all other students. Specifically,
the funds may be used to meet the costs of providing a compensatory,
intensive, or accelerated instruction program under Section 29.081
or a disciplinary alternative education program established under
Section 37.008, to pay the costs associated with placing students
in a juvenile justice alternative education program established
under Section 37.011, or to support a program eligible under Title I
of the Elementary and Secondary Education Act of 1965, as provided
by Pub. L. No. 103-382 and its subsequent amendments, and by
federal regulations implementing that Act, at a campus at which at
least 40 percent of the students are educationally disadvantaged.
In meeting the costs of providing a compensatory, intensive, or
accelerated instruction program under Section 29.081, compensatory
education funds shall be used for costs supplementary to the
regular education program, such as costs for program and student
evaluation, instructional materials and equipment and other
supplies required for quality instruction, supplemental staff
expenses, salary for teachers of at-risk students, smaller class
size, and individualized instruction. A home-rule school district
or an open-enrollment charter school must use compensatory
education funds for a purpose authorized in this subsection but is
not otherwise subject to Subchapter C, Chapter 29. For purposes of
this subsection, a program specifically designed to serve students
at risk of dropping out of school, as defined by Section 29.081, is
considered to be a program supplemental to the regular education
program, and a district may use compensatory education funds for
such a program.
(d) Notwithstanding Subsection (c), compensatory education
funds may be used to fund in proportion to the percentage of
students served by the program that meet the criteria in Section
29.081(d) or (g):
(1) an accelerated reading instruction program under
Section 28.006(g); or
(2) a program for treatment of students who have
dyslexia or a related disorder as required by Section 38.003.
(e) Notwithstanding Subsection (c), compensatory education
funds may be used to fund a district's mentoring services program
under Section 29.089.
(f) The agency shall evaluate the effectiveness of
accelerated instruction and support programs provided under
Section 29.081 for students at risk of dropping out of school.
(g) The State Board of Education, with the assistance of the
comptroller, shall develop and implement by rule reporting and
auditing systems for district and campus expenditures of
compensatory education funds to ensure that compensatory education
funds are spent only to supplement the regular education program as
required by Subsection (c). The reporting requirements shall be
managed electronically to minimize local administrative costs. A
district shall submit the report required by this subsection not
later than the 150th day after the last day permissible for
resubmission of information required under Section 42A.202.
(h) The commissioner shall develop a system to identify
school districts that are at high risk of having used compensatory
education funds other than in compliance with Subsection (c) or of
having inadequately reported compensatory education expenditures.
If a review of the report submitted under Subsection (g), using the
risk-based system, indicates that a district is not at high risk of
having misused compensatory education funds or of having
inadequately reported compensatory education expenditures, the
district may not be required to perform a local audit of
compensatory education expenditures and is not subject to on-site
monitoring under this section.
(i) If a review of the report submitted under Subsection
(g), using the risk-based system, indicates that a district is at
high risk of having misused compensatory education funds, the
commissioner shall notify the district of that determination. The
district must respond to the commissioner not later than the 30th
day after the date the commissioner notifies the district of the
commissioner's determination. If the district's response does not
change the commissioner's determination that the district is at
high risk of having misused compensatory education funds or if the
district does not respond in a timely manner, the commissioner
shall:
(1) require the district to conduct a local audit of
compensatory education expenditures for the current or preceding
school year;
(2) order agency staff to conduct on-site monitoring
of the district's compensatory education expenditures; or
(3) both require a local audit and order on-site
monitoring.
(j) If a review of the report submitted under Subsection
(g), using the risk-based system, indicates that a district is at
high risk of having inadequately reported compensatory education
expenditures, the commissioner may require agency staff to assist
the district in following the proper reporting methods or amending
a district or campus improvement plan under Subchapter F, Chapter
11. If the district does not take appropriate corrective action
before the 45th day after the date the agency staff notifies the
district of the action the district is expected to take, the
commissioner may:
(1) require the district to conduct a local audit of
the district's compensatory education expenditures; or
(2) order agency staff to conduct on-site monitoring
of the district's compensatory education expenditures.
(k) The commissioner, in the year following a local audit of
compensatory education expenditures, shall withhold from a
district's payment of funds under Section 42A.204 an amount equal
to the amount of compensatory education funds the agency determines
were not used in compliance with Subsection (c). The commissioner
shall release to a district funds withheld under this subsection
when the district provides to the commissioner a detailed plan to
spend those funds in compliance with Subsection (c).
(l) The commissioner shall grant a one-year exemption from
the requirements of Subsections (g)-(k) to a school district in
which the group of students who have failed to perform
satisfactorily in the preceding school year on an assessment
instrument required under Section 39.023(a), (c), or (l)
subsequently performs on those assessment instruments at a level
that meets or exceeds a level prescribed by commissioner rule. Each
year the commissioner, based on the most recent information
available, shall determine if a school district is entitled to an
exemption for the following school year and notify the district of
that determination.
Sec. 42A.253. BILINGUAL EDUCATION OR SPECIAL LANGUAGE
PROGRAMS. (a) Funds received by a school district as a result of
the district's weighted average daily attendance of students
described by Section 42A.102(b)(16), other than an indirect cost
allowance established under State Board of Education rule, must be
used in providing bilingual education or special language programs
under Subchapter B, Chapter 29, and must be accounted for under
existing agency reporting and auditing procedures.
(b) Funds described by Subsection (a) may be used only for
program and student evaluation, instructional materials and
equipment, staff development, supplemental staff expenses, salary
supplements for teachers, and other supplies required for quality
instruction and smaller class size.
Sec. 42A.254. CAREER AND TECHNOLOGY EDUCATION. (a) Funds
received by a school district as a result of the district's weighted
average daily attendance of students described by Section
42A.102(b)(17), other than an indirect cost allowance established
under State Board of Education rule, must be used in providing
career and technology education programs in grades nine through 12
or career and technology education programs for students with
disabilities in grades seven through 12 under Sections 29.182,
29.183, and 29.184.
(b) The commissioner shall conduct a cost-benefit
comparison between career and technology education programs and
mathematics and science programs.
(c) Out of the total amount of funds appropriated for
weighted average daily attendance of students described by Section
42A.102(b)(17), the commissioner shall set aside an amount
specified in the General Appropriations Act, which may not exceed
an amount equal to one percent of the total amount appropriated, to
support regional career and technology education planning. After
deducting the amount set aside under this subsection from the total
amount appropriated, the commissioner shall reduce each district's
allocation proportionately.
Sec. 42A.255. GIFTED AND TALENTED STUDENT PROGRAMS. (a)
Funds received by a school district as a result of the district's
weighted average daily attendance of students described by Section
42A.102(b)(18), other than the amount that represents the program's
share of general administrative costs, must be used in providing
programs for gifted and talented students under Subchapter D,
Chapter 29, including programs sanctioned by International
Baccalaureate and Advanced Placement, or in developing programs for
gifted and talented students. Each district must account for the
expenditure of state funds as provided by rule of the State Board of
Education. If by the end of the 12th month after receiving funds
under this chapter for gifted and talented student programs for
developing a program a district has failed to implement a program,
the district must refund the funds received for gifted and talented
student programs to the agency within 30 days.
(b) Not more than five percent of a district's students in
average daily attendance are eligible for funding under this
chapter for attendance in a gifted and talented student program.
(c) After each district has received allocated funds for
this program, the State Board of Education may use up to $500,000 of
the funds allocated under this chapter for programs such as
MATHCOUNTS, Future Problem Solving, Odyssey of the Mind, and
Academic Decathlon, as long as these funds are used to train
personnel and provide program services. To be eligible for funding
under this subsection, a program must be determined by the State
Board of Education to provide services that are effective and
consistent with the state plan for gifted and talented education.
Sec. 42A.256. PUBLIC EDUCATION GRANTS. The total number of
students for whom a student multiplier is applied under Section
42A.102(b)(19) for a district may not exceed the number by which the
number of students using public education grants to attend school
in the district exceeds the number of students who reside in the
district and use public education grants to attend school in
another district.
Sec. 42A.257. APPLICABILITY OF CONDITIONS TO SCHOOL
DISTRICTS NOT INCLUDED IN SCHOOL FINANCE DISTRICT. The conditions
prescribed by this subchapter apply to local tax revenue retained
by a school district in the same manner that the conditions apply to
state and local money distributed under this chapter.
SECTION 2. Section 12.106(a), Education Code, as effective
September 1, 2017, is amended to read as follows:
(a) A charter holder is entitled to receive for the
open-enrollment charter school funding under Chapter 42A [42] equal
to the amount of state funding per student in weighted average daily
attendance provided under that chapter to [, excluding enrichment
funding under Section 42.302(a), to which the charter holder would
be entitled for the school under Chapter 42 if the school were] a
school district [without a tier one local share for purposes of
Section 42.253].
SECTION 3. Section 45.003(d), Education Code, is amended to
read as follows:
(d) A proposition submitted to authorize the levy of
maintenance taxes must include the question of whether the
governing board or commissioners court may levy, assess, and
collect annual ad valorem taxes for the further maintenance of
public schools, at a rate not to exceed the rate stated in the
proposition. [For any year, the maintenance tax rate per $100 of
taxable value adopted by the district may not exceed the rate equal
to the sum of $0.17 and the product of the state compression
percentage, as determined under Section 42.2516, multiplied by
$1.50.]
SECTION 4. The following provisions of the Education Code
are repealed:
(1) Sections 12.106(a-1) and (a-2);
(2) Chapter 41;
(3) Chapter 42; and
(4) Sections 45.003(e) and (f).
SECTION 5. (a) As soon as practicable and not later than
October 1, 2015, the commissioner of education, as required by
Section 42A.052, Education Code, as added by this Act, shall:
(1) make the initial determination of permissible
range of wealth; and
(2) notify each school district with a wealth per
weighted student that is not within the permissible range of
wealth.
(b) Each school district proposing to form a school finance
district must submit the proposed agreement to the commissioner of
education for approval not later than April 1, 2016.
(c) The commissioner of education shall approve or
disapprove each proposed agreement not later than May 1, 2016.
(d) An election for voter approval of each proposed
agreement approved by the commissioner of education must occur not
later than December 1, 2016.
(e) Not later than May 1, 2017, the commissioner of
education, as required by Section 42A.062, Education Code, as added
by this Act, shall order the consolidation of each school district
with a wealth per weighted student not within the permissible range
of wealth that failed to obtain voter approval of the formation of a
school finance district.
(f) Notwithstanding any other provision of this section,
the commissioner of education may modify the dates specified in
this section or provide for additional deadlines as necessary to
ensure that the system of public school funding provided by this Act
is fully implemented beginning with the 2017 tax year and the
2017-2018 school year.
SECTION 6. An obligation or entitlement of a school
district in connection with state funding for the 2016-2017 or an
earlier school year under Chapters 41 and 42, Education Code, as
those chapters existed before repeal by this Act, is not affected by
this Act, and the prior law is continued in effect for that purpose.
SECTION 7. (a) Subject to Subsection (b) of this section,
this Act applies beginning with the 2017-2018 school year.
(b) Section 42A.058, Education Code, as added by this Act,
applies beginning with the 2017 tax year.
SECTION 8. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2015.