By: Huberty, et al. H.B. No. 21
(Senate Sponsor - Taylor of Galveston)
(In the Senate - Received from the House August 8, 2017;
August 8, 2017, read first time and referred to Committee on
Education; August 11, 2017, reported adversely, with favorable
Committee Substitute by the following vote: Yeas 9, Nays 1;
August 11, 2017, sent to printer.)
Click here to see the committee vote
COMMITTEE SUBSTITUTE FOR H.B. No. 21 By: Taylor of Galveston
A BILL TO BE ENTITLED
AN ACT
relating to the public school finance system.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Effective September 1, 2018, Section 12.106,
Education Code, is amended by amending Subsection (a-1) and adding
Subsections (d) and (e) to read as follows:
(a-1) In determining funding for an open-enrollment charter
school under Subsection (a):
(1) [,] adjustments under Sections 42.102, [42.103,]
42.104, and 42.105 are based on the average adjustment for the
state; and
(2) the adjustment under Section 42.103 is based on
the average adjustment for the state that would have been provided
under that section as it existed on January 1, 2018.
(d) Subject to Subsection (e), in addition to other amounts
provided by this section, a charter holder is entitled to receive,
for the open-enrollment charter school, funding per student in
average daily attendance in an amount equal to the guaranteed level
of state and local funds per student per cent of tax effort under
Section 46.032(a) multiplied by the lesser of:
(1) the state average interest and sinking fund tax
rate imposed by school districts for the current year; or
(2) a rate that would result in a total amount to which
charter schools are entitled under this subsection for the current
year equal to $60 million.
(e) A charter holder is entitled to receive funding under
Subsection (d) only if the most recent overall performance rating
assigned to the open-enrollment charter school under Subchapter C,
Chapter 39, reflects at least acceptable performance.
SECTION 2. Effective September 1, 2023, Sections 42.103(b)
and (d), Education Code, are amended to read as follows:
(b) The basic allotment of a school district that [contains
at least 300 square miles and] has not more than 1,600 students in
average daily attendance is adjusted by applying the formula:
AA = (1 + ((1,600 - ADA) X .0004)) X ABA
(d) The basic allotment of a school district that offers a
kindergarten through grade 12 program and has less than 5,000
students in average daily attendance is adjusted by applying the
formula, of the following formulas, that results in the greatest
adjusted allotment:
(1) the formula in Subsection (b), if [or (c) for
which] the district is eligible for that formula; or
(2) AA = (1 + ((5,000 - ADA) X .000025)) X ABA.
SECTION 3. Effective September 1, 2018, Section 42.103(c),
Education Code, is amended to read as follows:
(c) The basic allotment of a school district that contains
less than 300 square miles and has not more than 1,600 students in
average daily attendance is adjusted by applying the following
formulas [formula]:
(1) for the fiscal year beginning September 1, 2018:
AA = (1 + ((1,600 - ADA) X .000275 [.00025])) X ABA
;
(2) for the fiscal year beginning September 1, 2019:
AA = (1 + ((1,600 - ADA) X .00030)) X ABA
;
(3) for the fiscal year beginning September 1, 2020:
AA = (1 + ((1,600 - ADA) X .000325)) X ABA
;
(4) for the fiscal year beginning September 1, 2021:
AA = (1 + ((1,600 - ADA) X .00035)) X ABA
; and
(5) for the fiscal year beginning September 1, 2022:
AA = (1 + ((1,600 - ADA) X .000375)) X ABA
SECTION 4. Chapter 42, Education Code, is amended by adding
Subchapter H to read as follows:
SUBCHAPTER H. FINANCIAL HARDSHIP TRANSITION PROGRAM
Sec. 42.451. FINANCIAL HARDSHIP GRANTS. (a) From amounts
appropriated for this subchapter, the commissioner may administer a
grant program that provides grants to school districts to defray
financial hardships resulting from changes made to Chapter 41 and
this chapter that apply after the 2016-2017 school year.
(b) The commissioner shall award grants under this
subchapter to districts as provided by Section 42.452.
(c) Except as provided by Subsection (d), funding provided
to a district under this subchapter is in addition to all other
funding provided under Chapter 41 and this chapter.
(d) A district is not eligible for funding under this
subchapter for a school year if the district receives for that
school year an adjustment of the district's taxable value of
property under Section 42.2521. A district may decline an
adjustment under Section 42.2521 to maintain eligibility for
funding under this subchapter.
(e) The commissioner may obtain additional information as
needed from a district or other state or local agency to make
determinations in awarding grants under this subchapter.
Sec. 42.452. AWARD OF GRANTS; AMOUNT. (a) The
commissioner shall award grants to school districts based on the
following formula:
HG = (PL-CL) X (TR) X (TAHG/TEHG)
where:
"HG" is the amount of a district's hardship grant;
"PL" is the amount of funding under previous law to which a
district would be entitled under Chapter 41 and this chapter as
those chapters existed on January 1, 2017, determined using current
school year data for the district;
"CL" is the amount of current law funding under Chapter 41 and
this chapter to which a district is entitled;
"TR" is a district's maintenance and operations tax rate, as
specified by the comptroller's most recent certified report;
"TAHG" is the total funding available for grants under
Section 42.456 for a school year; and
"TEHG" is the sum of the combined amounts for all districts
calculated by applying the formula (PL-CL) X (TR) for each
district.
(b) A school district's hardship grant awarded under this
subchapter for a school year may not exceed the lesser of:
(1) the amount equal to 10 percent of the total amount
of funds available for grants under this subchapter for that school
year; or
(2) the amount by which "PL" exceeds "CL" for that
district for that school year.
(c) For purposes of calculating the formula under
Subsection (a), the commissioner shall:
(1) in determining the values of "PL" and "CL" for a
school district, exclude the amount of revenue received by the
district as a result of Section 13.054 or an administrative rule
related to that section;
(2) if the value of (PL-CL) for a school district
results in a negative number, use zero for the value of (PL-CL);
(3) if a school district's maintenance and operations
tax rate ("TR") is greater than $1, use $1 for the value of "TR";
(4) use a maintenance and operations tax rate ("TR")
of $1 for each open-enrollment charter school, each special-purpose
school district established under Subchapter H, Chapter 11, and the
South Texas Independent School District; and
(5) if (TAHG/TEHG) equals a value greater than one,
use a value of one for (TAHG/TEHG).
(d) If funds remain available under this subchapter for a
school year after determining initial grant amounts under
Subsection (a), as adjusted to reflect the limits imposed by
Subsection (b), the commissioner shall reapply the formula as
necessary to award all available funds.
(e) If the commissioner reapplies the formula in accordance
with Subsection (d), a school district that was ineligible under
Section 42.455 for a grant during the initial application of the
formula for that school year is eligible to receive a grant as a
result of the formula reapplication.
Sec. 42.453. ELIGIBILITY OF OPEN-ENROLLMENT CHARTER
SCHOOL. An open-enrollment charter school is eligible for a grant
under this subchapter in the same manner as a school district.
Sec. 42.454. REGIONAL EDUCATION SERVICE CENTERS AND COUNTY
DEPARTMENTS OF EDUCATION NOT ELIGIBLE. A regional education
service center or a county department of education is not eligible
for a grant under this subchapter.
Sec. 42.455. CERTAIN SCHOOL DISTRICTS NOT ELIGIBLE. Except
as provided by Section 42.452(e), a school district is not eligible
for a grant under this subchapter if for the 2015-2016 school year
the district's expenditures per student in weighted average daily
attendance, excluding bond debt service payments, capital outlays,
and facilities acquisition and construction costs, exceeded an
amount that is equal to 120 percent of the state average amount for
that school year of expenditures per student in weighted average
daily attendance, excluding bond debt service payments, capital
outlays, and facilities acquisition and construction costs, as
those amounts are determined by the commissioner.
Sec. 42.456. FUNDING LIMIT. The amount of grants awarded by
the commissioner under this subchapter may not exceed $100 million
for the 2017-2018 school year or $50 million for the 2018-2019
school year.
Sec. 42.457. NO ADJUSTMENT BASED ON REVISED DATA. The
commissioner may not adjust the amount of a school district's grant
under this subchapter based on revisions to the district's data
received after a grant has been awarded.
Sec. 42.458. RULES. The commissioner may adopt rules as
necessary to administer this subchapter.
Sec. 42.459. DETERMINATION FINAL. A determination by the
commissioner under this subchapter is final and may not be
appealed.
Sec. 42.460. EXPIRATION. This subchapter expires September
1, 2019.
SECTION 5. Effective September 1, 2018, Section 46.032(a),
Education Code, is amended to read as follows:
(a) Each school district is guaranteed a specified amount
per student in state and local funds for each cent of tax effort to
pay the principal of and interest on eligible bonds. The amount of
state support, subject only to the maximum amount under Section
46.034, is determined by the formula:
EDA = (EDGL X ADA X EDTR X 100) - (EDTR X (DPV/100))
where:
"EDA" is the amount of state funds to be allocated to the
district for assistance with existing debt;
"EDGL" is the dollar amount guaranteed level of state and
local funds per student per cent of tax effort, which is the lesser
of:
(1) $40 [$35] or a greater amount for any year provided
by appropriation; or
(2) the amount that would result in a total additional
amount of state funds under this subchapter for the current year
equal to $60 million in excess of the state funds to which school
districts would have been entitled under this section if the
guaranteed level amount were $35;
"ADA" is the number of students in average daily attendance,
as determined under Section 42.005, in the district;
"EDTR" is the existing debt tax rate of the district, which is
determined by dividing the amount budgeted by the district for
payment of eligible bonds by the quotient of the district's taxable
value of property as determined under Subchapter M, Chapter 403,
Government Code, or, if applicable, under Section 42.2521, divided
by 100; and
"DPV" is the district's taxable value of property as
determined under Subchapter M, Chapter 403, Government Code, or, if
applicable, under Section 42.2521.
SECTION 6. (a) The amount of $311,000,000 of the
unencumbered appropriations from the general revenue fund for the
state fiscal biennium ending August 31, 2019, made by S.B. 1, Acts
of the 85th Legislature, Regular Session, 2017 (the General
Appropriations Act), to the Health and Human Services Commission is
transferred to the Texas Education Agency to be used by the agency
during that state fiscal biennium as follows:
(1) $150,000,000 is allocated to fund financial
hardship grants under Subchapter H, Chapter 42, Education Code, as
added by this Act;
(2) $60,000,000 is allocated to fund payments to
open-enrollment charter schools under Section 12.106(d), Education
Code, as added by this Act;
(3) $60,000,000 is allocated for the existing debt
allotment under Section 46.032, Education Code, as amended by this
Act; and
(4) $41,000,000 is allocated for the small-sized
district adjustment under Section 42.103, Education Code, as
amended by this Act.
(b) The Health and Human Services Commission shall identify
the strategies and objectives out of which the transfer under
Subsection (a) of this section is to be made.
(c) Notwithstanding the sum-certain appropriations
specified in Rider 3, Chapter 605 (S.B. 1), Acts of the 85th
Legislature, Regular Session, 2017 (the General Appropriations
Act), to the bill pattern of the appropriations to the Texas
Education Agency, the Legislative Budget Board shall determine the
sum-certain appropriation to the Foundation School Program for each
year of the state fiscal biennium beginning September 1, 2017,
based on the amount specified in that rider, the other provisions of
the General Appropriations Act, and other law, including the
provisions of this Act.
SECTION 7. Effective September 1, 2023, Section 42.103(c),
Education Code, is repealed.
SECTION 8. Except as otherwise provided by this Act:
(1) this Act takes effect September 1, 2017, if this
Act receives a vote of two-thirds of all the members elected to each
house, as provided by Section 39, Article III, Texas Constitution;
and
(2) if this Act does not receive the vote necessary for
effect on that date, this Act takes effect on the 91st day after the
last day of the legislative session.
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