1-1     By:  Bivins                                           S.B. No. 1873

 1-2           (In the Senate - Filed March 14, 1997; March 24, 1997, read

 1-3     first time and referred to Committee on Finance; May 5, 1997,

 1-4     reported favorably by the following vote:  Yeas 10, Nays 0;

 1-5     May 5, 1997, sent to printer.)

 1-6                            A BILL TO BE ENTITLED

 1-7                                   AN ACT

 1-8     relating to public school finance, including the abolition of the

 1-9     foundation school fund budget committee.

1-10           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

1-11           SECTION 1.  The foundation school fund budget committee is

1-12     abolished, and Section 42.256, Education Code, is repealed.

1-13           SECTION 2.  Section 42.007, Education Code, is amended to

1-14     read as follows:

1-15           Sec. 42.007.  EQUALIZED FUNDING ELEMENTS.  (a)  The

1-16     Legislative Budget Board shall compute [adopt rules, subject to

1-17     appropriate notice and opportunity for public comment, for the

1-18     calculation] for each year of a biennium [of] the qualified funding

1-19     elements, in accordance with Subsection (c), [under Section

1-20     42.256(e)] necessary to achieve the state policy under Section

1-21     42.001.

1-22           (b)  Before [Not later than October 1 preceding] each regular

1-23     session of the legislature, the board shall report the equalized

1-24     funding elements to [the foundation school fund budget committee,]

1-25     the commissioner[,] and the legislature.

1-26           (c)  The funding elements may include:

1-27                 (1)  a basic allotment for the purposes of Section

1-28     42.101 that, when combined with the guaranteed yield component

1-29     provided by Subchapter F, represents the cost per student of a

1-30     regular education program that meets all mandates of law and

1-31     regulation;

1-32                 (2)  adjustments designed to reflect the variation in

1-33     known resource costs and costs of education beyond the control of

1-34     school districts;

1-35                 (3)  appropriate program cost differentials and other

1-36     funding elements for the programs authorized under Subchapter C,

1-37     with the program funding level expressed as dollar amounts and as

1-38     weights applied to the adjusted basic allotment for the appropriate

1-39     year;

1-40                 (4)  the maximum guaranteed level of qualified state

1-41     and local funds per student for the purposes of Subchapter F;

1-42                 (5)  the enrichment and facilities tax rate under

1-43     Subchapter F;

1-44                 (6)  the calculation of students in weighted average

1-45     daily attendance under Section 42.302; and

1-46                 (7)  the amount to be appropriated for the school

1-47     facilities assistance program under Subchapter H.

1-48           (d)  The board may conduct a study on the funding elements

1-49     each biennium, as appropriate.

1-50           SECTION 3.  Section 13.285, Education Code, is amended to

1-51     read as follows:

1-52           Sec. 13.285.  COST.  The cost of incentive aid payments

1-53     authorized by this subchapter shall be paid from the foundation

1-54     school fund.  [The costs shall be considered and included by the

1-55     foundation school fund budget committee in estimating the funds

1-56     needed for purposes of the Foundation School Program.]

1-57           SECTION 4.  Subsection (b), Section 19.007, Education Code,

1-58     is amended to read as follows:

1-59           (b)  The costs for persons eligible under Section 19.005

1-60     shall be paid from the foundation school fund.  [Those costs shall

1-61     be considered annually by the foundation school fund budget

1-62     committee and included in estimating the funds needed for purposes

1-63     of the Foundation School Program.]

1-64           SECTION 5.  Subsection (c), Section 29.256, Education Code,

 2-1     is amended to read as follows:

 2-2           (c)  The cost to the state shall be paid from the foundation

 2-3     school fund.  [The foundation school fund budget committee shall

 2-4     consider that cost in estimating the funds needed for Foundation

 2-5     School Program purposes.]

 2-6           SECTION 6.  Subsection (a), Section 29.257, Education Code,

 2-7     is amended to read as follows:

 2-8           (a)  The legislature may appropriate money from the

 2-9     foundation school fund to the agency for developing and

2-10     implementing community education projects. [The foundation school

2-11     fund budget committee shall consider the cost of community

2-12     education development projects in estimating the money needed for

2-13     foundation school fund purposes.]  The agency shall actively seek

2-14     gifts, grants, or other donations for purposes related to community

2-15     education development projects, unless the acceptance is prohibited

2-16     by other law.  Money received under this subsection shall be

2-17     deposited in the account established under Subsection (b) and may

2-18     be appropriated only for the purpose for which the money was given.

2-19           SECTION 7.  Section 41.006, Education Code, is amended to

2-20     read as follows:

2-21           Sec. 41.006.  MODIFICATION OF EFFECTIVE DATES AND TIME

2-22     PERIODS [RULES].  [(a)  The commissioner may adopt rules necessary

2-23     for the implementation of this chapter.  The rules may provide for

2-24     the commissioner to make necessary adjustments to the provisions of

2-25     Chapter 42, including providing for the commissioner, with the

2-26     approval of the foundation school fund budget committee, to make an

2-27     adjustment in the funding element established by Section 42.302, at

2-28     the earliest date practicable, to the amount the commissioner

2-29     believes, taking into consideration options exercised by school

2-30     districts under this chapter and estimates of student enrollments,

2-31     will match appropriation levels.]

2-32           [(b)]  As necessary for the effective and efficient

2-33     administration of this chapter, the commissioner may modify

2-34     effective dates and time periods for actions described by this

2-35     chapter.

2-36           SECTION 8.  Subsection (a), Section 42.005, Education Code,

2-37     is amended to read as follows:

2-38           (a)  In this chapter, average daily attendance is the

2-39     quotient of the sum of attendance for each day of the minimum

2-40     number of days of instruction as described under Section 25.081(a)

2-41     [and for each day approved by the commissioner for an extended year

2-42     program under Section 29.082] divided by the minimum number of days

2-43     of instruction.

2-44           SECTION 9.  Section 42.101, Education Code, is amended to

2-45     read as follows:

2-46           Sec. 42.101.  BASIC ALLOTMENT.  For each student in average

2-47     daily attendance, not including the time students spend each day in

2-48     special education programs in an instructional arrangement other

2-49     than mainstream or career and technology education programs, for

2-50     which an additional allotment is made under Subchapter C, a

2-51     district is entitled to an allotment of $2,387 [or a greater amount

2-52     adopted by the foundation school fund budget committee under

2-53     Section 42.256].  A greater amount for any school year may be

2-54     provided by appropriation.

2-55           SECTION 10.  Subsection (b), Section 42.102, Education Code,

2-56     is amended to read as follows:

2-57           (b)  The Legislative Budget Board [foundation school fund

2-58     budget committee] shall determine the cost of education adjustment

2-59     under Section 42.007 [42.256].

2-60           SECTION 11.  Subsection (c), Section 42.155, Education Code,

2-61     is amended to read as follows:

2-62           (c)  Each district or county operating a regular

2-63     transportation system is entitled to an allotment based on the

2-64     daily cost per regular eligible student of operating and

2-65     maintaining the regular transportation system and the linear

2-66     density of that system.  In determining the cost, the commissioner

2-67     shall give consideration to factors affecting the actual cost of

2-68     providing these transportation services in each district or county.

2-69     The average actual cost is to be computed by the commissioner and

 3-1     included for consideration by [the foundation school fund budget

 3-2     committee and] the legislature in the General Appropriations Act.

 3-3     The allotment per mile of approved route may not exceed the amount

 3-4     set by appropriation.

 3-5           SECTION 12.  Subsection (e), Section 42.252, Education Code,

 3-6     is amended to read as follows:

 3-7           (e)  The commissioner shall hear appeals from school

 3-8     districts that have experienced a rapid decline in tax base used in

 3-9     calculating the local fund assignment, exceeding four percent of

3-10     the preceding year, that is beyond the control of the board of

3-11     trustees of the district.  The commissioner, to the extent

3-12     appropriations for that purpose are available, may adjust the

3-13     district's taxable values for local fund assignment purposes for

3-14     such losses in value exceeding four percent and thereby adjust the

3-15     local fund assignment to reflect the local current year taxable

3-16     value.  The decision of the commissioner is final.  An adjustment

3-17     does not affect the local fund assignment of any other school

3-18     district.  This subsection applies to determinations by the

3-19     commissioner in identifying districts with wealth per student

3-20     exceeding the equalized wealth level pursuant to Section 41.004.

3-21           SECTION 13.  Subsections (b), and (f), Section 42.253,

3-22     Education Code, are amended to read as follows:

3-23           (b)  Except as provided by this subsection, the commissioner

3-24     shall base the determinations under Subsection (a) on the estimates

3-25     provided to the legislature under Section 42.254, or, if the

3-26     General Appropriations Act provides estimates for that purpose, on

3-27     the estimates provided under that Act, for each school district for

3-28     each school year.  The commissioner shall reduce the entitlement of

3-29     each district that has a final taxable value of property for the

3-30     second year of a state fiscal biennium that is higher than the

3-31     estimate under Section 42.254 or the General Appropriations Act, as

3-32     applicable.  A reduction under this subsection may not reduce the

3-33     district's entitlement below the amount to which it is entitled at

3-34     its actual taxable value of property.  The sum of the reductions

3-35     under this subsection may not be greater than the amount necessary

3-36     to fully fund the entitlement of each district.

3-37           (f)  Amounts transferred to the reserve account under

3-38     Subsection (e) shall be used in the succeeding fiscal year to

3-39     finance increases in allocations to school districts under

3-40     Subsection (i).  If the amount in the reserve account is less than

3-41     the amount of the increases under Subsection (i) for the second

3-42     year of a state fiscal biennium, the commissioner shall certify the

3-43     amount of the difference to the Legislative Budget Board

3-44     [foundation school fund budget committee] not later than January 1

3-45     of the second year of the state fiscal biennium.  The Legislative

3-46     Budget Board [committee] shall propose to the legislature that the

3-47     certified amount be transferred to the foundation school fund from

3-48     the economic stabilization fund and appropriated for the purpose of

3-49     increases in allocations under Subsection (h).

3-50           SECTION 14.  Section 42.254, Education Code, is amended by

3-51     amending Subsection (a) and adding Subsection (c) to read as

3-52     follows:

3-53           (a)  Not later than October 1 of each even-numbered year:

3-54                 (1)  the agency shall submit to [the foundation school

3-55     fund budget committee and] the legislature an estimate of the tax

3-56     rate and student enrollment of each school district for the

3-57     following biennium; and

3-58                 (2)  the comptroller shall submit to [the foundation

3-59     school fund budget committee and] the legislature an estimate of

3-60     the total taxable value of all property in the state as determined

3-61     under Subchapter M, Chapter 403, Government Code, for the following

3-62     biennium.

3-63           (c)  Not later than September 1 of each year, each school

3-64     district shall submit to the Legislative Budget Board an estimate

3-65     of the district's:

3-66                 (1)  tax rate that will be in effect for the following

3-67     fiscal year; and

3-68                 (2)  student enrollment for the following school year.

3-69           SECTION 15.  Subsection (a), Section 42.302, Education Code,

 4-1     is amended to read as follows:

 4-2           (a)  Each school district is guaranteed a specified amount

 4-3     per weighted student in state and local funds for each cent of tax

 4-4     effort over that required for the district's local fund assignment

 4-5     up to the maximum level specified in this subchapter.  The amount

 4-6     of state support, subject only to the maximum amount under Section

 4-7     42.303, is determined by the formula:

 4-8                     GYA = (GL X WADA X DTR X 100) - LR

 4-9     where:

4-10           "GYA" is the guaranteed yield amount of state funds to be

4-11     allocated to the district;

4-12           "GL" is the dollar amount guaranteed level of state and local

4-13     funds per weighted student per cent of tax effort, which is $21

4-14     [$20.55] or a greater amount for any year provided by

4-15     appropriation[, or a greater amount adopted by the foundation

4-16     school fund budget committee under Section 42.256(d)];

4-17           "WADA" is the number of students in weighted average daily

4-18     attendance, which is calculated by dividing the sum of the school

4-19     district's allotments under Subchapters B and C, less any allotment

4-20     to the district for transportation and 50 percent of the adjustment

4-21     under Section 42.102, by the basic allotment for the applicable

4-22     year;

4-23           "DTR" is the district enrichment and facilities tax rate of

4-24     the school district, which is determined by subtracting the amounts

4-25     specified by Subsection (b) from the total amount of taxes

4-26     collected by the school district for the applicable school year and

4-27     dividing the difference by the quotient of the district's taxable

4-28     value of property as determined under Subchapter M, Chapter 403,

4-29     Government Code, divided by 100; and

4-30           "LR" is the local revenue, which is determined by multiplying

4-31     "DTR" by the quotient of the district's taxable value of property

4-32     as determined under Subchapter M, Chapter 403, Government Code,

4-33     divided by 100.

4-34           SECTION 16.  Section 42.303, Education Code, is amended to

4-35     read as follows:

4-36           Sec. 42.303.  LIMITATION ON ENRICHMENT AND FACILITIES TAX

4-37     RATE. The district enrichment and facilities tax rate ("DTR") under

4-38     Section 42.302 may not exceed $0.64 per $100 of valuation, or a

4-39     greater amount for any year provided by appropriation [adopted by

4-40     the foundation school fund budget committee under Section

4-41     42.256(d)].

4-42           SECTION 17.  Subsection (b), Section 74.066, Education Code,

4-43     is amended to read as follows:

4-44           (b)  State funds for the support of the special school and

4-45     the Moody State School shall be paid from the foundation school

4-46     fund [and shall be considered by the Foundation School Fund Budget

4-47     Committee in estimating the funds needed for Foundation School

4-48     Program purposes].

4-49           SECTION 18.  Subsection (a), Section 316.002, Government

4-50     Code, is amended to read as follows:

4-51           (a)  Before the Legislative Budget Board submits the budget

4-52     as prescribed by Section 322.008(c) [322.008(b)], the board shall

4-53     establish:

4-54                 (1)  the estimated rate of growth of the state's

4-55     economy from the current biennium to the next biennium;

4-56                 (2)  the level of appropriations for the current

4-57     biennium from state tax revenues not dedicated by the constitution;

4-58     and

4-59                 (3)  the amount of state tax revenues not dedicated by

4-60     the constitution that could be appropriated for the next biennium

4-61     within the limit established by the estimated rate of growth of the

4-62     state's economy.

4-63           SECTION 19.  Subsection (b), Section 322.008, Government

4-64     Code, is amended to read as follows:

4-65           (b)  The [Not later than the 1994-1995 school year, the]

4-66     general appropriations bill may [shall] include for purposes of

4-67     information the funding elements computed [adopted] by the

4-68     Legislative Budget Board [foundation school fund budget committee]

4-69     under Section 42.007 [16.256(e)], Education Code, excluding the

 5-1     values for each school district calculated under Section

 5-2     42.007(c)(2), Education Code [Subdivision (2) of that subsection].

 5-3     If the funding elements are included, the [The] funding elements

 5-4     under Section 42.007(c)(3) [16.256(e)(3)], Education Code, shall be

 5-5     reported in dollar amounts per pupil.

 5-6           SECTION 20.  Subsection (d), Section 56.208, Education Code,

 5-7     is repealed.

 5-8           SECTION 21.  This Act takes effect September 1, 1997.

 5-9           SECTION 22.  The importance of this legislation and the

5-10     crowded condition of the calendars in both houses create an

5-11     emergency and an imperative public necessity that the

5-12     constitutional rule requiring bills to be read on three several

5-13     days in each house be suspended, and this rule is hereby suspended.

5-14                                  * * * * *