Enrolled Bill Summary

House Bill 21 (1st C.S.)	House Author:  Huberty et al.
Effective:  See below	Senate Sponsor:  Taylor, Larry et al.

            House Bill 21 amends the Education Code to revise the public school finance system. The bill authorizes the commissioner of education to administer a temporary financial hardship transition program that provides grants to eligible public school districts and open-enrollment charter schools to defray financial hardships resulting from changes made to recapture under Chapter 41 and the foundation school program that apply after the 2016-2017 school year. The bill sets out a formula on which the grant amounts are based and limits the total amount of grants to $100 million for the 2017-2018 school year and $50 million for the 2018-2019 school year.

            Effective September 1, 2018, House Bill 21 increases the guaranteed yield of the existing debt allotment to the lesser of $40 or the amount that would result in a $60 million increase in state aid from the level of state aid provided by a yield of $35 and provides additional state aid for instructional facilities capped at $60 million per year to certain open-enrollment charter schools that have an acceptable overall performance rating or operate a school program located at a day treatment facility, residential treatment facility, psychiatric hospital, or medical hospital.

            House Bill 21 establishes two separate temporary grant programs for districts and charter schools that provide innovative services to students with autism and dyslexia, respectively, and requires the commissioner to award grant funds beginning in the 2018-2019 school year. The bill requires the commissioner to set aside an amount not to exceed $20 million from the total amount of funds appropriated for the 2018-2019 fiscal biennium to fund grants under the autism grant program and to set aside an amount not to exceed $20 million from such appropriated funds to fund grants under the dyslexia grant program. The bill requires the commissioner to use $10 million for the autism grant program and $10 million for the dyslexia grant program for each school year in the state fiscal biennium.

            Effective September 1, 2018, House Bill 21 begins a series of five annual increases of the adjustment to the basic allotment of a district that contains less than 300 square miles and has not more than 1,600 students in average daily attendance (ADA) until, effective September 1, 2023, that adjustment is equal to the adjustment for districts with that ADA that contain at least 300 square miles.

            House Bill 21 establishes the Texas Commission on Public School Finance to develop recommendations to address issues related to the public school finance system and prepare and deliver a report to the governor and the legislature that recommends statutory changes to improve the public school finance system. The commission is abolished January 8, 2019.

            House Bill 21 transfers $311 million of the unencumbered appropriations for the 2018‑2019 state fiscal biennium made to the Health and Human Services Commission (HHSC) to the Texas Education Agency (TEA), with $150 million allocated to fund financial hardship grants, $60 million allocated to fund instructional facility payments to charter schools, $60 million allocated for the increase in the existing debt allotment; and $41 million allocated for the increase of the small-sized district adjustment. The bill also transfers $212 million of the 2018‑2019 appropriations made to HHSC to the Teacher Retirement System of Texas (TRS) to be used by TRS during the 2018-2019 state fiscal biennium to increase school districts' recruitment and retention of school teachers and provide support to participants in the Texas Public School Employees Group Insurance Program. The bill requires HHSC to identify the strategies and objectives out of which the transfers are to be made.

            House Bill 21 takes effect November 14, 2017, except as otherwise provided.