By:  Haley                                            S.B. No. 1111
                                 A BILL TO BE ENTITLED
                                        AN ACT
    1-1  relating to the consolidation of independent school districts.
    1-2        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-3        SECTION 1.  Subsection (a), Section 19.051, Education Code,
    1-4  is amended to read as follows:
    1-5        (a)  By the procedure described in this subchapter, any of
    1-6  the following groups of school districts may consolidate into a
    1-7  single school district:
    1-8              (1)  two or more <contiguous> independent school
    1-9  districts;
   1-10              (2)  two or more <contiguous> common school districts;
   1-11  or
   1-12              (3)  one or more independent school districts and one
   1-13  or more common school districts <constituting as a whole one
   1-14  continuous territory>.
   1-15        SECTION 2.  Subchapter C, Chapter 19, Education Code, is
   1-16  amended by adding Section 19.060 to read as follows:
   1-17        Sec. 19.060.  REGIONAL EDUCATION SERVICE CENTER
   1-18  ADMINISTRATIVE CONSOLIDATION PLAN.  (a)  The board of each regional
   1-19  education service center shall  adopt an administrative
   1-20  consolidation plan for the school districts in the area served by
   1-21  the service center.  The plan must contain recommendations
   1-22  concerning the consolidation of the school districts'
   1-23  administrative and support functions that would allow the school
   1-24  districts to reduce costs, operate more efficiently, and improve
    2-1  educational quality.
    2-2        (b)  In developing its plan, each service center shall meet
    2-3  with representatives from each school district in the area.
    2-4        (c)  Each service center's plan must provide for all school
    2-5  districts that are assigned to a single county in the 1992-1993
    2-6  Texas School Directory published by the Central Education Agency to
    2-7  consolidate administrative and support functions to the extent
    2-8  recommended by the plan.  The plan may recommend that a school
    2-9  district that is not assigned to a single county consolidate
   2-10  administrative and support functions with one or more other
   2-11  specified school districts.
   2-12        (d)  Among the administrative and support functions a plan
   2-13  may recommend for school districts to consolidate are central
   2-14  administrative, transportation, food service, purchasing, and
   2-15  payroll functions.
   2-16        (e)  After developing a plan as provided by this section,
   2-17  each service center shall provide the plan to each school district
   2-18  in the area for implementation.  A school district is not required
   2-19  to implement any recommendation made in the plan.
   2-20        (f)  A service center may modify or revise a plan made under
   2-21  this section, including, after the 1994-1995 school year, changing
   2-22  the assignments of school districts provided under Subsection (c)
   2-23  of this section.
   2-24        SECTION 3.  Section 23.991, Education Code, is amended to
   2-25  read as follows:
   2-26        Sec. 23.991.  Incentive Aid.  (a)  Independent school
   2-27  districts created after August 22, 1963, through consolidation may
    3-1  qualify for incentive aid payments by the State of Texas.
    3-2        (b)  In addition to incentive aid payments authorized under
    3-3  Subsection (a) of this section, the commissioner of education may
    3-4  authorize payments for planning and consolidating administrative
    3-5  and support functions at the regional or subregional level.
    3-6        (c)  No<; provided, however, no> school district may receive
    3-7  <such> payments under this subchapter for a period of more than 10
    3-8  years.
    3-9        (d)  The <Such> incentive aid payments shall be made only
   3-10  upon application to the Texas Education Agency and in compliance
   3-11  with the terms and conditions contained in this subchapter
   3-12  <section>.
   3-13        SECTION 4.  Section 23.992, Education Code, is amended by
   3-14  adding Subsection (c) to read as follows:
   3-15        (c)  This section applies only to incentive aid payments
   3-16  under Section 23.991(a) of this code.
   3-17        SECTION 5.  Section 23.995, Education Code, is amended to
   3-18  read as follows:
   3-19        Sec. 23.995.  Payments Reduced.  (a)  The incentive aid
   3-20  payments shall be reduced in direct proportion to any reduction in
   3-21  the annual average daily attendance of the reorganized school
   3-22  district for the preceding year.
   3-23        (b)  Subsection (a) of this section applies only to incentive
   3-24  aid payments under Section 23.991(a) of this code.
   3-25        SECTION 6.  Section 23.996, Education Code, is amended to
   3-26  read as follows:
   3-27        Sec. 23.996.  Consolidation Defined.  "Consolidation" for
    4-1  purposes of this subchapter shall mean and have application to
    4-2  creation of new districts by election under school district
    4-3  consolidation laws and/or by enlargement of existing districts by
    4-4  annexation thereto of other entire <contiguous district or>
    4-5  districts, other than dormant districts, under annexation laws, and
    4-6  where the district consolidated by election or enlarged by
    4-7  annexation under such laws results as an independent school
    4-8  district.
    4-9        SECTION 7.  Section 23.997, Education Code, is amended to
   4-10  read as follows:
   4-11        Sec. 23.997.  Conditions Precedent to Payment.  As a
   4-12  condition precedent to receiving incentive aid payments under
   4-13  Section 23.991(a) of this code:
   4-14              (1)  the geographical limits of the proposed
   4-15  consolidated district shall be submitted to the Texas Education
   4-16  Agency for approval and the geographical limits so approved shall
   4-17  be set forth in the petition for any consolidation election; and
   4-18              (2)  the consolidation of the school districts shall
   4-19  result in the formation of an independent school district.
   4-20        SECTION 8.  Section 16.103, Education Code, is amended by
   4-21  adding Subsection (d) to read as follows:
   4-22        (d)  From the total amount of funds appropriated for the
   4-23  small district adjustment under this section, the commissioner of
   4-24  education shall withhold an amount necessary for incentive aid
   4-25  payments made under Section 23.991(b) of this code, but not to
   4-26  exceed $7,500,000 during the 1994-1995 biennium or a higher amount
   4-27  set by appropriation.  After deducting the amount withheld under
    5-1  this subsection from the total amount appropriated for the small
    5-2  district adjustment, the commissioner of education shall reduce
    5-3  each district's entitlement proportionately and shall allocate
    5-4  funds to each district accordingly.
    5-5        SECTION 9.  Sections 23.993, 23.994, and 23.999, Education
    5-6  Code, are repealed.
    5-7        SECTION 10.  From the total amount of funds appropriated for
    5-8  the Foundation School Program, the commissioner of education shall
    5-9  withhold an amount not to exceed $2,500,000 during the 1994-1995
   5-10  biennium, or a higher amount set by appropriation, for revision of
   5-11  Bulletin 679, accounting procedures and related training.  After
   5-12  deducting the amount withheld under this section from the total
   5-13  amount appropriated for the Foundation School Program, the
   5-14  commissioner of education shall reduce each district's entitlement
   5-15  proportionately and shall allocate funds to each district
   5-16  accordingly.
   5-17        SECTION 11.  The State Board of Education shall conduct a
   5-18  study of rural high school districts and shall report the results
   5-19  of the study to the 74th Legislature not later than February 1,
   5-20  1995.  The report must include:
   5-21              (1)  a description of the status of rural high school
   5-22  districts;
   5-23              (2)  recommendations for criteria for the creation of
   5-24  rural high school districts to ensure that the districts provide a
   5-25  high school education of high quality; and
   5-26              (3)  recommendations for statutory changes needed to
   5-27  encourage or require the creation of rural high school districts or
    6-1  to improve the operation of the districts.
    6-2        SECTION 12.  (a)  Each regional education service center
    6-3  shall complete the administrative consolidation plan as provided by
    6-4  Section 19.060, Education Code, as added by this Act, for
    6-5  implementation at the beginning of the 1994-1995 school year.
    6-6        (b)  Not later than January 1, 1995, each service center
    6-7  shall report to the commissioner of education on the service
    6-8  center's recommendations for consolidation of administrative and
    6-9  support functions of school districts under Section 19.060,
   6-10  Education Code, as added by this Act.  The report must:
   6-11              (1)  identify the proposals recommended under the
   6-12  service center's plan;
   6-13              (2)  identify the proposals school districts have
   6-14  agreed to implement and those that school districts do not want to
   6-15  implement;
   6-16              (3)  offer recommendations for consolidation of
   6-17  administrative and support functions of school districts that could
   6-18  be implemented on a statewide basis and that would allow school
   6-19  districts to reduce costs, operate more efficiently, and improve
   6-20  educational quality; and
   6-21              (4)  identify any school district that does not intend
   6-22  to implement the recommendations in the plan.
   6-23        (c)  Not later than February 1, 1995, the commissioner of
   6-24  education shall prepare a summary of the service centers' reports
   6-25  under Subsection (b) of this section and present that summary to
   6-26  the legislature.
   6-27        SECTION 13.  Sections 1 through 9 of this Act apply beginning
    7-1  with the 1993-1994 school year.
    7-2        SECTION 14.  The importance of this legislation and the
    7-3  crowded condition of the calendars in both houses create an
    7-4  emergency and an imperative public necessity that the
    7-5  constitutional rule requiring bills to be read on three several
    7-6  days in each house be suspended, and this rule is hereby suspended,
    7-7  and that this Act take effect and be in force from and after its
    7-8  passage, and it is so enacted.