BILL ANALYSIS C.S.S.B. 407 By: Montford (Junell) 04-28-95 Committee Report (Substituted) BACKGROUND In past years, state appropriations have not always been sufficient to give school districts the amount actually due them under statutory school-finance formulas. These shortages caused mid-year revision of how much funding districts would receive from the state. Funds were cut on a pro rata basis, and the cuts became known as proration. S.B. 7, passed during the 73rd Legislature, eliminated proration and now requires the state commissioner of education to issue a warrant for each district's entitlement based on the district tax rate for the final year of the preceding biennium. State aid is now based on projected student counts and property values contained in a computer model run by the Legislative Budget Board, with the most recent model indicating that the state will owe school districts $305 million for the 1994-1995 school year. The state has historically paid the enrollment and start-up costs for new community college campuses. New campuses are anticipated at Collin County Community College, North Harris Community College, Blinn College, and Tarrant County Junior College. Last session, the McAllen Extension of Texas State Technical College was converted to the South Texas Community College. Enrollment at South Texas Community College has quadrupled the original projection. Other emergency needs include a low fund levels in the governor's Disaster Contingency Account, increased commitments to the Texas Youth Commission and costs for investigation of the Texas Commission on Alcohol and Drug Abuse incurred by the Department of Public Safety. Medicaid premiums appropriated to the Texas Department of Health have exceeded the actual caseload and costs experienced. PURPOSE C.S.S.B. 407 provides emergency appropriations to the Central Education Agency for payments to school districts for the 1994-1995 school year, the Texas Higher Education Coordinating Board for specific costs at certain campuses, the governor's Disaster Contingency Account, the Texas Youth Commission for care and confinement of juvenile offenders and Department of Public Safety for costs associated with the investigation of the Texas Commission on Alcohol and Drug Abuse. C.S.S.B. 407 also reduces the appropriation for the Texas Department of Health by $8,250,000 for the fiscal year ending August 31, 1995. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency or institution. SECTION BY SECTION ANALYSIS SECTION 1. (a) Authorizes school districts whose adjustments of state funds to which each school district is entitled for the 1994-1995 school year would result in an increase in the next fiscal year, on determination pursuant to Section 16.254(i), Education Code, to receive payment of all or, on a pro rata basis, part of the increase during the current fiscal year, to the extent that appropriations provided by this section allow. (b) Requires the remainder of appropriations that exceed the total of increased entitlements determined pursuant to Section 16.254(i), Education Code, and payable during the current fiscal year pursuant to Subsection (a), to be paid to all school districts on a pro rata basis on or before July 25, 1995, as an advance on payments otherwise due on September 25, 1995. (c) Provides that $305 million is appropriated from the general revenue fund to the Central Education Agency for the payments authorized by this section for the current fiscal year. SECTION 2. (a) Provides that $13,744,133 is appropriated from the fund to the Texas Higher Education Agency Coordinating Board (coordinating board) to fund enrollment and start-up costs at new campuses at certain colleges. (b) Provides that unexpended balances at the end of fiscal year 1995 of an amount appropriated by this section are reappropriated for the same purposes in the 1996-1997 biennium. SECTION 3. Provides that $2,312,050 are appropriated from the general revenue fund to the coordinating board to fund specific costs at South Texas Community College. SECTION 4. (a) Reduces the appropriation to the Texas Department of Health for the fiscal year ending August 31, 1995, by $8,250,000. (b) Out of that amount, the Comptroller shall transfer (1) $4,000,000 to the Disaster Contingency Account for appropriate use by the governor, (2) $4,000,000 to the Texas Youth Commission for confinement and care of juvenile offenders with the exception that no more than $2,300,000 may be used without the approval of the governor, and (3) $250,000 to the Department of Public Safety for paying expenses associate with the investigation of the Texas Commission on Alcohol and Drug Abuse. SECTION 5. Emergency clause. Effective date upon passage. COMPARISON OF ORIGINAL TO SUBSTITUTE Original provided $740,000 to Tarleton State University and $1,449,405 to Southwest Texas State University for repair of buildings and structures damaged by hailstorms. Original provided $87,000 to University of Texas San Antonio for repair to buildings of damage caused by fire. Original provided $70,000 to Texas Cosmetology Commission to pay costs. Substitute reduces appropriation to Texas Department of Health for fiscal year ending August 31, 1995, in the amount of $8,250,000 and authorizes the Comptroller to transfer from that sum: 1) $4,000,000 to the Disaster Contingency Account, 2) $4,000,000 to the Texas Youth Commission, except that the commission may not expend $2,300,000 without the approval of the governor, 3) $250,000 to the Department of Public Safety for expenses associated with the investigation of the Texas Commission on Alcohol and Drug Abuse. SUMMARY OF COMMITTEE ACTION S.B. 407 was considered before the full committee on April 26, 1995, in a public hearing. The following testified on S.B. 407: Dick Strader, Executive Director of the Cosmetology Commission, Sergio Shearer, Commissioner on the Cosmetology Commission, Don Brown, Deputy Commissioner with the Higher Education Coordinating Board, Dr. John Anthony, President of the Collin County Community College District. No one testified for or against S.B. 407. Representative Junell moved to draft a committee substitute for S.B. 407, and without objection the motion prevailed. Without objection the Chair left S.B. 407 pending. On April 28, 1995, the full committee reconsidered S.B. 407 in a formal meeting. The Chairman laid out a committee substitute to S.B. 407, and the substitute was adopted without objection. Representative Harris moved that the substitute be reported favorably. The motion prevailed by a record vote of 17 Ayes, 0 Nays, O PNV, 10 Absent.