86R1547 MEW-F
By: RodrÃguez S.B. No. 136
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. Sections 29.918(a) and (b), Education Code, are
amended to read as follows:
(a) Notwithstanding Section [39.234 or] 42.152, a school
district or open-enrollment charter school with a high dropout
rate, as determined by the commissioner, must submit a plan to the
commissioner describing the manner in which the district or charter
school intends to use the compensatory education allotment under
Section 42.152 [and the high school allotment under Section 42.160]
for developing and implementing research-based strategies for
dropout prevention. The district or charter school shall submit
the plan not later than December 1 of each school year preceding the
school year in which the district or charter school will receive the
compensatory education allotment [or high school allotment] to
which the plan applies.
(b) A school district or open-enrollment charter school to
which this section applies may not spend or obligate more than 25
percent of the district's or charter school's compensatory
education allotment [or high school allotment] unless the
commissioner approves the plan submitted under Subsection (a). The
commissioner shall complete an initial review of the district's or
charter school's plan not later than March 1 of the school year
preceding the school year in which the district or charter school
will receive the compensatory education allotment [or high school
allotment] to which the plan applies.
SECTION 2. Section 39.0233(a), Education Code, is amended
to read as follows:
(a) The agency, in coordination with the Texas Higher
Education Coordinating Board, shall adopt a series of questions to
be included in an end-of-course assessment instrument administered
under Section 39.023(c) to be used for purposes of Subchapter F-1,
Chapter 51. The questions adopted under this subsection must be
developed in a manner consistent with any college readiness
standards adopted under [Section 39.233 and] Subchapter F-1,
Chapter 51.
SECTION 3. Section 41.002(a), Education Code, is amended to
read as follows:
(a) A school district may not have a wealth per student that
exceeds:
(1) the wealth per student that generates the amount
of maintenance and operations tax revenue per weighted student
available to a district with maintenance and operations tax revenue
per cent of tax effort equal to the maximum amount provided per cent
under Section 42.101(a) or (b), for the district's maintenance and
operations tax effort equal to or less than the rate equal to the
sum of the product of the state compression percentage, as
determined under Section 42.2516, multiplied by the maintenance and
operations tax rate adopted by the district for the 2005 tax year
and any additional tax effort included in calculating the
district's compressed tax rate under Section 42.101(a-1);
(2) the greater of the wealth per student that
generates the amount of maintenance and operations tax revenue per
weighted student available to the Austin Independent School
District or a district at the 95th percentile in wealth per student,
as determined by the commissioner in cooperation with the
Legislative Budget Board, for the first six cents by which the
district's maintenance and operations tax rate exceeds the rate
equal to the sum of the product of the state compression percentage,
as determined under Section 42.2516, multiplied by the maintenance
and operations tax rate adopted by the district for the 2005 tax
year and any additional tax effort included in calculating the
district's compressed tax rate under Section 42.101(a-1), subject
to Section 41.093(b-1); or
(3) the wealth per student specified under Subdivision
(1) [$319,500], for the district's maintenance and operations tax
effort that exceeds the amount of tax effort described by
Subdivision (2).
SECTION 4. Effective September 1, 2020, Section 41.002(a),
Education Code, is amended to read as follows:
(a) A school district may not have a wealth per student that
exceeds:
(1) the wealth per student that generates the amount
of maintenance and operations tax revenue per weighted student
available to a district with maintenance and operations tax revenue
per cent of tax effort equal to the maximum amount provided per cent
under Section 42.101(a), (a-3), or (b), for the district's
maintenance and operations tax effort equal to or less than the rate
equal to the sum of the product of the state compression percentage,
as determined under Section 42.2516, multiplied by the maintenance
and operations tax rate adopted by the district for the 2005 tax
year and any additional tax effort included in calculating the
district's compressed tax rate under Section 42.101(a-1);
(2) the greater of the wealth per student that
generates the amount of maintenance and operations tax revenue per
weighted student available to the Austin Independent School
District or a district at the 95th percentile in wealth per student,
as determined by the commissioner in cooperation with the
Legislative Budget Board, for the first six cents by which the
district's maintenance and operations tax rate exceeds the rate
equal to the sum of the product of the state compression percentage,
as determined under Section 42.2516, multiplied by the maintenance
and operations tax rate adopted by the district for the 2005 tax
year and any additional tax effort included in calculating the
district's compressed tax rate under Section 42.101(a-1), subject
to Section 41.093(b-1); or
(3) the wealth per student specified under Subdivision
(1) [$319,500], for the district's maintenance and operations tax
effort that exceeds the amount of tax effort described by
Subdivision (2).
SECTION 5. Section 41.093(b-1), Education Code, is amended
to read as follows:
(b-1) If the guaranteed level of state and local funds per
weighted student per cent of tax effort under Section
42.302(a-1)(1) for which state funds are appropriated for a school
year is an amount at least equal to the greater of the amount of
revenue per weighted student per cent of tax effort available to the
Austin Independent School District or the amount available to a
district at the 95th percentile in wealth per student, as
determined by the commissioner in cooperation with the Legislative
Budget Board, the commissioner, in computing the amounts described
by Subsections (a)(1) and (2) and determining the cost of an
attendance credit, shall exclude maintenance and operations tax
revenue resulting from the tax rate described by Section
41.002(a)(2).
SECTION 6. Section 41.099(a), Education Code, is amended to
read as follows:
(a) Section [Sections 41.002(e),] 41.094 applies [, 41.097,
and 41.098 apply] only to a district that:
(1) executes an agreement to purchase all attendance
credits necessary to reduce the district's wealth per student to
the equalized wealth level;
(2) executes an agreement to purchase attendance
credits and an agreement under Subchapter E to contract for the
education of nonresident students who transfer to and are educated
in the district but who are not charged tuition; or
(3) executes an agreement under Subchapter E to
contract for the education of nonresident students:
(A) to an extent that does not provide more than
10 percent of the reduction in wealth per student required for the
district to achieve a wealth per student that is equal to or less
than the equalized wealth level; and
(B) under which all revenue paid by the district
to other districts, in excess of the reduction in state aid that
results from counting the weighted average daily attendance of the
students served in the contracting district, is required to be used
for funding a consortium of at least three districts in a county
with a population of less than 40,000 that is formed to support a
technology initiative.
SECTION 7. Subchapter A, Chapter 42, Education Code, is
amended by adding Sections 42.010 and 42.011 to read as follows:
Sec. 42.010. COMPREHENSIVE REVIEW OF PUBLIC SCHOOL FINANCE
WEIGHTS, ALLOTMENTS, AND ADJUSTMENTS. (a) The agency shall
conduct a comprehensive review of weights, allotments, and
adjustments under the public school finance system, including all
current weights, allotments, and adjustments provided under this
chapter and any additional weights, allotments, and adjustments
that the agency determines may be appropriate. The review must
determine the effectiveness of existing weights, allotments, and
adjustments in fulfilling the mission of the public education
system stated in Section 4.001(a) and furthering the state policy
stated in Section 42.001. At a minimum, the review must determine
how closely and appropriately each of the following elements
reflects and provides financing for costs beyond the control of
school districts:
(1) adjustments for costs related to the geographic
variation in known resource costs and costs of education,
controlling for the impact of unequalized wealth and hold-harmless
provisions, and properly reflecting the impact of high
concentrations of poverty on the compensation that school districts
must pay to attract and retain teachers of comparable or
appropriate quality;
(2) adjustments for costs related to the size and
diseconomies of scale of school districts;
(3) adjustments for costs related to the varying
instructional needs and characteristics of students and the extent
to which the adjustments provide each student with access to
programs and services that are appropriate to the student's
educational needs;
(4) other factors, in addition to economic status,
that correlate to student at-risk status and the need for
compensatory education, and the degree to which those factors
correspond to additional educational costs; and
(5) the manner in which the cost adjustments are
applied to and affect the overall school finance system.
(b) The review of the adjustments described in Subsection
(a)(1) must:
(1) address all uncontrollable costs that can
reasonably be quantified;
(2) consider the qualifications, experience, and
turnover rate of personnel and the impact of those factors on
student achievement in considering the adequacy and comparability
of salaries;
(3) properly address the impact of factors that have a
large impact on certain types of school districts, such as extreme
isolation, regardless of general state impact;
(4) include only factors for which a rational economic
argument can be made;
(5) be carefully constructed to make sure that a cost
factor does not significantly affect more than one variable; and
(6) not be artificially adjusted to meet predetermined
outcomes and must not use arbitrary limits.
(c) In determining whether any additional weights,
allotments, and adjustments are appropriate under the public school
finance system, as required by Subsection (a), the agency shall
include consideration of an additional weight for educational
services provided to students in prekindergarten on a half-day
basis and on a full-day basis.
(d) The agency may contract with one or more consultants if
necessary to enable the agency to perform its duties under this
section.
(e) The Legislative Budget Board, the comptroller, the
state auditor, and any other state agency, official, or personnel
shall cooperate with the agency in carrying out its duties under
this section.
(f) Not later than December 1, 2020, the agency shall
provide a report that:
(1) states the findings of the review conducted under
this section; and
(2) includes recommendations for updated weights,
allotments, and adjustments and any other statutory changes
considered appropriate by the agency.
(g) This section expires January 1, 2021.
Sec. 42.011. STUDY OF LEGISLATION ON SCHOOL FUNDING. (a)
After each legislative session, the commissioner shall conduct a
study assessing the manner in which any statute enacted or amended
during that legislative session affects the equalized wealth level
of a school district under Chapter 41 or the foundation school
program under this chapter and whether the standard of neutrality
described under Section 42.001(b) is maintained.
(b) The study under this section must:
(1) include an analysis of the effects of legislation
on each school district in the state; and
(2) indicate how a school district compares to other
districts with respect to:
(A) property wealth per weighted student;
(B) revenue per weighted student;
(C) tax effort; and
(D) revenue per cent of tax effort.
(c) The commissioner shall issue a report on the study's
findings to the governor, the lieutenant governor, the speaker of
the house of representatives, and the legislature. The
commissioner shall make the report available to the public on the
agency's Internet website.
SECTION 8. Section 42.101(a), Education Code, is amended to
read as follows:
(a) For each student in average daily attendance, not
including the time students spend each day in special education
programs in an instructional arrangement other than mainstream or
career and technology education programs, for which an additional
allotment is made under Subchapter C, a district is entitled to an
allotment equal to the lesser of $5,440 [$4,765] or the amount that
results from the following formula:
A = $5,440 [$4,765] X (DCR/MCR)
where:
"A" is the allotment to which a district is entitled;
"DCR" is the district's compressed tax rate, which is the
product of the state compression percentage, as determined under
Section 42.2516, multiplied by the maintenance and operations tax
rate adopted by the district for the 2005 tax year; and
"MCR" is the state maximum compressed tax rate, which is the
product of the state compression percentage, as determined under
Section 42.2516, multiplied by $1.50.
SECTION 9. Effective September 1, 2020, Section 42.101,
Education Code, is amended by amending Subsection (a) and adding
Subsection (a-3) to read as follows:
(a) Subject to adjustment under Subsection (a-3), for [For]
each student in average daily attendance, not including the time
students spend each day in special education programs in an
instructional arrangement other than mainstream or career and
technology education programs, for which an additional allotment is
made under Subchapter C, a district is entitled to an allotment
equal to the lesser of $5,840 [$4,765] or the amount that results
from the following formula:
A = $5,840 [$4,765] X (DCR/MCR)
where:
"A" is the allotment to which a district is entitled;
"DCR" is the district's compressed tax rate, which is the
product of the state compression percentage, as determined under
Section 42.2516, multiplied by the maintenance and operations tax
rate adopted by the district for the 2005 tax year; and
"MCR" is the state maximum compressed tax rate, which is the
product of the state compression percentage, as determined under
Section 42.2516, multiplied by $1.50.
(a-3) Beginning with the 2021-2022 school year, the basic
allotment provided to a district under Subsection (a) or (b) is
adjusted annually to increase the allotment by the greater of:
(1) one percent of the amount of the allotment for the
preceding school year; or
(2) the amount that results from applying the
inflation rate, as determined by the comptroller on the basis of
changes in the Consumer Price Index for All Urban Consumers
published by the Bureau of Labor Statistics of the United States
Department of Labor, to the allotment for the preceding school
year.
SECTION 10. Sections 42.152(a) and (c), Education Code, are
amended to read as follows:
(a) For each 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 legal guardian does not reside, a district is entitled to
an annual allotment equal to the adjusted basic allotment
multiplied by 0.25 [0.2], and by 2.41 for each full-time equivalent
student who is in a compensatory, intensive, or accelerated
[remedial and support] program under Section 29.081 because the
student is pregnant.
(c) Funds allocated under this section 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, other than an indirect cost allotment
established under State Board of Education rule, which may not
exceed 25 [45] percent, 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, a district's compensatory education allotment
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 funds allocated under
Subsection (a) 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 its compensatory education
allotment for such a program.
SECTION 11. Sections 42.153(a) and (b), Education Code, are
amended to read as follows:
(a) For each student in average daily attendance in a
bilingual education or special language program under Subchapter B,
Chapter 29, a district is entitled to an annual allotment equal to
the adjusted basic allotment multiplied by 0.25 [0.1].
(b) Funds allocated under this section, other than an
indirect cost allotment established under State Board of Education
rule, which may not exceed 25 percent, 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.
SECTION 12. Section 42.251(b), Education Code, is amended
to read as follows:
(b) The program shall be financed by:
(1) ad valorem tax revenue generated by an equalized
uniform school district effort;
(2) ad valorem tax revenue generated by local school
district effort in excess of the equalized uniform school district
effort; and
(3) [state available school funds distributed in
accordance with law; and
[(4)] state funds appropriated for the purposes of
public school education and allocated to each district in an amount
sufficient to finance the cost of each district's Foundation School
Program not covered by other funds specified in this subsection.
SECTION 13. Sections 42.253(a) and (c), Education Code, are
amended to read as follows:
(a) For each school year the commissioner shall determine:
(1) the amount of money to which a school district is
entitled under Subchapters B and C;
(2) the amount of money to which a school district is
entitled under Subchapter F;
(3) [the amount of money allocated to the district
from the available school fund;
[(4)] the amount of each district's tier one local
share under Section 42.252; and
(4) [(5)] the amount of each district's tier two local
share under Section 42.302.
(c) Each school district is entitled to an amount equal to
the difference for that district between the sum of Subsections
(a)(1) and (a)(2) and the sum of Subsections (a)(3) and [,] (a)(4)[,
and (a)(5)].
SECTION 14. Sections 42.302(a) and (a-1), Education Code,
are amended to read as follows:
(a) Each school district is guaranteed a specified amount
per weighted student in state and local funds for each cent of tax
effort over that required for the district's local fund assignment
up to the maximum level specified in this subchapter. The amount
of state support, subject only to the maximum amount under Section
42.303, is determined by the formula:
GYA = (GL X WADA X DTR X 100) - LR
where:
"GYA" is the guaranteed yield amount of state funds to be
allocated to the district;
"GL" is the dollar amount guaranteed level of state and local
funds per weighted student per cent of tax effort, which is an
amount described by Subsection (a-1) or a greater amount for any
year provided by appropriation;
"WADA" is the number of students in weighted average daily
attendance, which is calculated by dividing the sum of the school
district's allotments under Subchapters B and C, less any allotment
to the district for transportation, any allotment under Section
42.158 [or 42.160], and 50 percent of the adjustment under Section
42.102, by the basic allotment for the applicable year;
"DTR" is the district enrichment tax rate of the school
district, which is determined by subtracting the amounts specified
by Subsection (b) from the total amount of maintenance and
operations taxes collected by the school district for the
applicable school year and dividing the difference 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
"LR" is the local revenue, which is determined by multiplying
"DTR" 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.
(a-1) For purposes of Subsection (a), the dollar amount
guaranteed level of state and local funds per weighted student per
cent of tax effort ("GL") for a school district is:
(1) the greater of the amount of district tax revenue
per weighted student per cent of tax effort that would be available
to the Austin Independent School District or the amount that would
be available to a district at the 95th percentile in wealth per
student, as determined by the commissioner in cooperation with the
Legislative Budget Board, if the reduction of the limitation on tax
increases as provided by Section 11.26(a-1), (a-2), or (a-3), Tax
Code, did not apply, [or the amount of district tax revenue per
weighted student per cent of tax effort used for purposes of this
subdivision in the preceding school year,] for the first six cents
by which the district's maintenance and operations tax rate exceeds
the rate equal to the sum of the product of the state compression
percentage, as determined under Section 42.2516, multiplied by the
maintenance and operations tax rate adopted by the district for the
2005 tax year and any additional tax effort included in calculating
the district's compressed tax rate under Section 42.101(a-1); and
(2) the amount of district tax revenue per weighted
student per cent of tax effort available to a district with
maintenance and operations tax revenue per cent of tax effort equal
to the maximum amount provided per cent under Section 42.101(a) or
(b) [$31.95], for the district's maintenance and operations tax
effort that exceeds the amount of tax effort described by
Subdivision (1).
SECTION 15. Effective September 1, 2020, Section
42.302(a-1), Education Code, is amended to read as follows:
(a-1) For purposes of Subsection (a), the dollar amount
guaranteed level of state and local funds per weighted student per
cent of tax effort ("GL") for a school district is:
(1) the greater of the amount of district tax revenue
per weighted student per cent of tax effort that would be available
to the Austin Independent School District or the amount that would
be available to a district at the 95th percentile in wealth per
student, as determined by the commissioner in cooperation with the
Legislative Budget Board, if the reduction of the limitation on tax
increases as provided by Section 11.26(a-1), (a-2), or (a-3), Tax
Code, did not apply, [or the amount of district tax revenue per
weighted student per cent of tax effort used for purposes of this
subdivision in the preceding school year,] for the first six cents
by which the district's maintenance and operations tax rate exceeds
the rate equal to the sum of the product of the state compression
percentage, as determined under Section 42.2516, multiplied by the
maintenance and operations tax rate adopted by the district for the
2005 tax year and any additional tax effort included in calculating
the district's compressed tax rate under Section 42.101(a-1); and
(2) the amount of district tax revenue per weighted
student per cent of tax effort available to a district with
maintenance and operations tax revenue per cent of tax effort equal
to the maximum amount provided per cent under Section 42.101(a),
(a-3), or (b) [$31.95], for the district's maintenance and
operations tax effort that exceeds the amount of tax effort
described by Subdivision (1).
SECTION 16. Section 43.001, Education Code, is amended by
amending Subsection (c) and adding Subsection (c-1) to read as
follows:
(c) The term "scholastic population" in Subsection (b) or
any other law governing the apportionment, distribution, and
transfer of the available school fund means all students of school
age enrolled in weighted average daily attendance the preceding
school year in the public elementary and high school grades of
school districts within or under the jurisdiction of a county of
this state.
(c-1) The amount provided to a school district as a result
of the annual apportionment of the available school fund in
accordance with Subsection (b) is in addition to amounts to which
the district is entitled under Chapter 42.
SECTION 17. Section 45.259(d), Education Code, is amended
to read as follows:
(d) If money appropriated for the Foundation School Program
is used for purposes of this subchapter and as a result there is
insufficient money to fully fund the Foundation School Program, the
commissioner shall, to the extent necessary, reduce each school
district's foundation school fund allocations[, other than any
portion appropriated from the available school fund,] in the same
manner provided by Section 42.253(h) for a case in which school
district entitlements exceed the amount appropriated. The
following fiscal year, a district's entitlement under Section
42.253 is increased by an amount equal to the reduction under this
subsection.
SECTION 18. The following provisions of the Education Code
are repealed:
(1) Section 29.097(g);
(2) Section 29.098(e);
(3) Subchapter G, Chapter 29;
(4) Section 39.233;
(5) Section 39.234;
(6) Sections 41.002(e), (f), and (g);
(7) Section 41.097;
(8) Section 41.098;
(9) Section 42.157;
(10) Section 42.160; and
(11) Section 42.4101.
SECTION 19. Except as otherwise provided by this Act, this
Act takes effect September 1, 2019.