Enrolled Bill Summary

            House Bill 3459 relates to fiscal matters involving certain governmental educational entities funded under Article III of the General Appropriations Act. Among other provisions, the bill repeals the school finance system established by Section 45.002 and Chapters 41, 42, and 46, Education Code, effective September 1, 2004, provided that the legislature has enacted a new school finance system. It sets forth new provisions establishing limitations on compliance monitoring by the Texas Education Agency and on the reports required to be written by teachers, allowing two or more school districts to merge under a local consolidation agreement that specifies the terms and conditions of the consolidation and the governance of the resulting district, and providing for a rehearing by the commissioner of education after a hearing on a proposed teacher termination or probation. House Bill 3459 establishes a classroom supply reimbursement program to reimburse teachers who expend personal funds on classroom supplies, but makes its implementation contingent on legislative appropriations or the availability of other state or federal funds.

            House Bill 3459 moves provisions relating to the $30 per-student allotments for electronic books and technological equipment from the chapter on textbooks funded through the state textbook fund to a new section on technology allotment in the chapter on computers and related equipment, whereby the allotment may be paid from the telecommunications infrastructure fund, the available school fund, or another fund identified in the General Appropriations Act. The bill authorizes, rather than requires, the agency to maintain and expand the telecommunications capabilities of school districts and regional education service centers. The bill raises the cap on the total amount of assessments that may be deposited in the telecommunications infrastructure fund from $1.5 billion to $1.75 billion.

            House Bill 3459 amends public school district system accountability provisions and requires the commissioner to develop a process for auditing school district dropout records electronically and a risk-based system of identifying districts that are at high risk of having inaccurate records. The bill allows the use of compensatory education allotments for certain programs at campuses with lower levels of educationally disadvantaged students, and it requires electronic management of the reporting of allotment expenditures and development of a risk-based system of identifying districts at high risk of noncompliance or inadequate reporting. It provides for a temporary reduction in the total funding for compensatory education allotments and a corresponding reduction of each district's tier one allotments, and it decreases the program weight used to determine a district's career and technology education allotment.

            House Bill 3459 allows the commissioner to readjust each district's cost of education adjustment according to the availability of funds in the foundation school fund and to rank districts based on their relative increases if the amount available is insufficient to fund every district's revised adjustment; it also revises the scheduled payment date for the final annual payment from the foundation school fund to category two and three school districts. The bill requires accrued income from investments of the permanent school fund to be deposited in the available school fund in accordance with the accrual basis of accounting. It directs the commissioner to reduce the $35 guaranteed level of state and local support per student per cent of tax effort for newly eligible debt if appropriations to support newly eligible bonds are not sufficient to provide the state aid entitled to school districts. Notwithstanding any conflicting provision of the General Appropriations Act, House Bill 3459 establishes the guaranteed yield level of state and local funds per weighted student per cent of tax effort at $27.14.

            House Bill 3459 amends the Government Code to provide that an employee of the public school system is not a member of the teacher retirement system until the 91st day after the first day the person is employed. It sets forth provisions that allow a member to purchase service credits, including membership service credit for service performed during the 90-day waiting period. The bill requires the total value of eligible security used as collateral to secure a deposit of public funds of a school district to be not less than 110 percent of the amount of the deposit. House Bill 3459 amends the Insurance Code to establish open enrollment, special enrollment, and additional enrollment periods for benefits coverage for a retiree eligible under the Texas public school employees group benefits program and to prohibit the Teacher Retirement System of Texas from providing a health benefit plan that excludes in the participation network certain general hospitals located in the Texas-Louisiana border region.

            House Bill 3459 requires the state to cover part of the cost of a health care plan for an employee, surviving spouse, and surviving dependent child, as prescribed by the General Appropriations Act. The bill increases the state's contribution to the public school employees group insurance fund from 0.5 percent to 1 percent of the salary of each active employee, and it increases an employee's contribution from 0.25 percent to 0.5 percent of the employee's salary. The bill also requires each public school to make monthly contributions to the fund in an amount that is not less than 0.25 percent or greater than 0.75 percent of the salary of each active employee of the public school. The allocation of the total cost for the group insurance program is shared by the state, at not more than 55 percent, by retirees, at not less than 30 percent, and by active employees and public schools, which must pay the balance. House Bill 3459 amends the method for determining the amount of state funds that the trustee of the teacher retirement system must send to each school district, educational district, charter school, and regional education service center.

            House Bill 3459 authorizes the Texas Lottery Commission to participate in a multijurisidiction lottery game or games with one or more states or with a foreign country. The bill abolishes the Texas Veterinary Medical Diagnostic Laboratory effective September 1, 2007.

            House Bill 3459 requires the comptroller to transfer $42 million from the Texas school employees uniform group coverage trust fund to the retired school employees group insurance fund on September 1, 2003. It allows the commissioner of education to take not more than $20 million of the amounts initially appropriated to the Texas Education Agency for the purpose of the existing debt assistance program and to use that money for purposes of the instructional facilities allotment. The bill requires the comptroller to contract for a comprehensive audit of regional education service centers and to submit the report to the legislature not later than June 1, 2004.

            House Bill 3459 takes effect September 1, 2003, except for provisions relating to textbooks, technology allotments, the treatment of accrued income from investments of the permanent school fund, and the total amount that may be credited to the telecommunications infrastructure fund, which take effect June 10, 2003.