By Palmer                                             H.B. No. 3043
         76R8153 JSA-D                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to establishing a scholarship program and prekindergarten
 1-3     program to be funded from revenues of the state lottery.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1.  Section 466.355(b), Government Code, is amended
 1-6     to read as follows:
 1-7           (b)  Money in the state lottery account may be used only for
 1-8     the following purposes and shall be distributed as follows:
 1-9                 (1)  the payment of prizes to the holders of winning
1-10     tickets;
1-11                 (2)  the payment of costs incurred in the operation and
1-12     administration of the lottery, including any fees received by a
1-13     lottery operator, provided that the costs incurred in a fiscal
1-14     biennium may not exceed an amount equal to 12 percent of the gross
1-15     revenue accruing from the sale of tickets in that biennium;
1-16                 (3)  the establishment of a pooled bond fund, lottery
1-17     prize reserve fund, unclaimed prize fund, and prize payment
1-18     account; and
1-19                 (4)  the balance, after creation of a reserve
1-20     sufficient to pay the amounts needed or estimated to be needed
1-21     under Subdivisions (1) through (3), to be transferred to the hope
1-22     education account [foundation school fund], on or before the 15th
1-23     day of each month.
1-24           SECTION 2.  Subchapter G, Chapter 403, Government Code, is
 2-1     amended by adding Section 403.105 to read as follows:
 2-2           Sec. 403.105.  HOPE EDUCATION ACCOUNT.  (a)  the hope
 2-3     education account is an account in the general revenue fund.
 2-4           (b)  The comptroller shall distribute one-half of the revenue
 2-5     deposited to the credit of the hope education account to each
 2-6     school district in this state that provides general elementary
 2-7     education in the territory of the school district.  Each qualified
 2-8     school district is entitled to an amount that is in proportion to
 2-9     the district's share of the average daily attendance of students in
2-10     the first and second grades of all qualified districts in the
2-11     preceding school year, as determined by the commissioner of
2-12     education.  A school district shall use the money received by the
2-13     district under this subsection to fund the district's
2-14     prekindergarden program established under Section 29.1531,
2-15     Education Code.
2-16           (c)  The comptroller shall transfer one-half of the revenue
2-17     deposited to the credit of the hope education account to the Texas
2-18     Higher Education Coordinating Board to fund scholarships under
2-19     Subchapter M, Chapter 56, Education Code.
2-20           (d)  The comptroller shall transfer the money deposited to
2-21     the hope education account not less than monthly in the amounts
2-22     provided by Subsections (b) and (c).
2-23           SECTION 3.  The section heading to Section 29.153, Education
2-24     Code, is amended to read as follows:
2-25           Sec. 29.153.  PREKINDERGARTEN FOR CERTAIN ELIGIBLE CHILDREN.
2-26           SECTION 4.  Subchapter E, Chapter 29, Education Code, is
2-27     amended by adding Section 29.1531 to read as follows:
 3-1           Sec. 29.1531.  PREKINDERGARTEN FUNDED BY LOTTERY PROCEEDS.
 3-2     (a)  Subject to the receipt of lottery proceeds under Subsection
 3-3     (b), a school district shall administer a supplemental
 3-4     prekindergarten program for children who are at least four years of
 3-5     age and who are not eligible to enroll in prekindergarten classes
 3-6     under Section 29.153.
 3-7           (b)  A school district shall fund a supplemental
 3-8     prekindergarten program exclusively with lottery proceeds received
 3-9     by the district from the hope education account under Section
3-10     403.105, Government Code.  A school district is not required by
3-11     this section to provide prekindergarten classes to any child who is
3-12     not selected to participate in the program under Subsection (c).
3-13           (c)  A school district shall develop and implement procedures
3-14     for selecting children to participate in the program.  The
3-15     procedures must include:
3-16                 (1)  an annual determination of the number of positions
3-17     available in the program for the subsequent school year, based on
3-18     the amount of funding available for the program;
3-19                 (2)  a process for notifying the population in the
3-20     district with children who may participate in the program; and
3-21                 (3)  use of a random selection process to select
3-22     children to participate in the program if the number of children
3-23     applying to participate exceeds the number of positions available.
3-24           (d)  A school district may operate prekindergarten classes
3-25     under this section jointly with prekindergarten classes operated
3-26     under Section 29.153.
3-27           SECTION 5.  Chapter 56, Education Code, is amended by adding
 4-1     Subchapter M to read as follows:
 4-2                SUBCHAPTER M. TEXAS HOPE SCHOLARSHIP PROGRAM
 4-3           Sec. 56.301.  DEFINITION.  In this subchapter, "coordinating
 4-4     board" means the Texas Higher Education Coordinating Board.
 4-5           Sec. 56.302.  PROGRAM NAME; PURPOSE.  (a)  The student
 4-6     financial assistance program authorized by this subchapter is known
 4-7     as the Texas Hope Scholarship Program, and an individual grant
 4-8     awarded under this subchapter is known as a hope scholarship.
 4-9           (b)  The purpose of the program is to provide a grant of
4-10     money for tuition and required fees to assist a qualified person to
4-11     enter a public or private institution of higher education and to
4-12     continue receiving assistance while the person achieves and
4-13     maintains excellent academic performance.
4-14           Sec. 56.303.  ELIGIBLE PERSON.  (a)  To be eligible for a
4-15     hope scholarship, a person must:
4-16                 (1)  be a Texas resident as defined by coordinating
4-17     board rules;
4-18                 (2)  enroll as a full-time or part-time student in an
4-19     institution of higher education, as defined by Section 61.003 or
4-20     approved under Section 61.222, not later than the end of the
4-21     academic year immediately following the school year in which the
4-22     person graduates from high school;
4-23                 (3)  have graduated from a public high school or
4-24     accredited private high school in this state with a cumulative
4-25     grade average that is equal to or greater than the equivalent of 85
4-26     on a scale of 100;
4-27                 (4)  meet any reasonable attendance and disciplinary
 5-1     standards established by the coordinating board;
 5-2                 (5)  have applied for any available financial
 5-3     assistance; and
 5-4                 (6)  have complied with any other administrative
 5-5     requirements adopted by the coordinating board under this
 5-6     subchapter.
 5-7           (b)  A hope scholarship is available only to a person
 5-8     enrolled in an undergraduate degree or certificate program. A
 5-9     person may not receive a hope scholarship if the person has been
5-10     granted a baccalaureate degree.
5-11           (c)  A person may not receive a hope scholarship for more
5-12     than 140 semester hours or the equivalent.
5-13           (d)  A person is not eligible to receive a hope scholarship
5-14     if the person has been convicted of a felony, a crime involving
5-15     moral turpitude, or an offense under Chapter 481, Health and Safety
5-16     Code, or under the law of any other jurisdiction involving a
5-17     controlled substance as defined by Chapter 481, Health and Safety
5-18     Code, unless the person has met the other applicable eligibility
5-19     requirements under this subchapter and has:
5-20                 (1)  received a certificate of discharge by the Texas
5-21     Department of Criminal Justice or a correctional facility or
5-22     completed a period of probation ordered by a court, and at least
5-23     two years have elapsed from the date of the receipt or completion;
5-24     or
5-25                 (2)  been pardoned, had the record of the offense
5-26     expunged from the person's record, or otherwise been released from
5-27     the resulting ineligibility to receive a hope scholarship.
 6-1           Sec. 56.304.  ALLOCATION OF SCHOLARSHIPS; SELECTION OF
 6-2     FRESHMAN RECIPIENTS.  (a)  Each year, the coordinating board shall
 6-3     estimate:
 6-4                 (1)  the total amount to be transferred to the board
 6-5     during the next academic year from the hope education account under
 6-6     Section 403.105(c), Government Code, and any amount previously
 6-7     transferred to the board that will be available for scholarships in
 6-8     that academic year; and
 6-9                 (2)  the portion of the amount estimated under
6-10     Subdivision (1) that will be necessary to fund the hope
6-11     scholarships of persons already attending institutions of higher
6-12     education who will be entitled to hope scholarships during the next
6-13     academic year under Section 56.305.
6-14           (b)  After making the estimates required by Subsection (a),
6-15     the board shall determine the number of hope scholarships that will
6-16     be available to be awarded to incoming freshman students for the
6-17     next academic year, based on the amount estimated under Subsection
6-18     (a)(1) less the amount estimated under Subsection (a)(2).
6-19           (c)  The coordinating board shall allocate the total number
6-20     of scholarships available to be awarded to incoming freshman
6-21     students in the next academic year among the school districts in
6-22     this state in proportion to the average daily attendance of
6-23     students in the 11th and 12th grades in each of those school
6-24     districts in the preceding school year, as determined by the
6-25     commissioner of education.  The board shall award the scholarships
6-26     allocated to each school district to eligible applicants who
6-27     graduate from a public high school or accredited private high
 7-1     school located in the school district.  If the number of eligible
 7-2     applicants from a school district exceeds the number of
 7-3     scholarships allocated to the district, the board shall determine
 7-4     which of those eligible applicants receive a scholarship through a
 7-5     random selection process.  If the number of eligible applicants
 7-6     from a school district is less than the number of scholarships
 7-7     allocated to the district, the amount of the unused scholarships is
 7-8     treated as an amount received from the hope education fund in the
 7-9     following academic year.
7-10           (d)  In the first three years in which the coordinating board
7-11     awards scholarships under this subchapter, notwithstanding
7-12     Subsection (b), the board may not use more than half of the amount
7-13     the board estimates for the next academic year under Subsection
7-14     (a)(1) to fund hope scholarships for incoming freshman students
7-15     under Subsection (c).
7-16           Sec. 56.305.  RETENTION OF SCHOLARSHIP; ACADEMIC EXCELLENCE
7-17     REQUIREMENTS.  A person who receives a hope scholarship as an
7-18     incoming freshman under Section 56.304 is entitled to receive a
7-19     hope scholarship in a subsequent semester or summer session if the
7-20     person is eligible for a scholarship under Section 56.303 and:
7-21                 (1)  has a cumulative grade point average of at least
7-22     3.0 on a four-point scale or the equivalent for all courses
7-23     attempted at an institution or institutions described by Section
7-24     56.303(a)(2); and
7-25                 (2)  maintains satisfactory progress in the person's
7-26     degree or certification program as determined by the coordinating
7-27     board.
 8-1           Sec. 56.306.  PAYMENT OF SCHOLARSHIP.  (a)  On receipt of a
 8-2     person's hope scholarship application and an enrollment report from
 8-3     the institution of higher education enrolling the person providing
 8-4     the coordinating board with the information the board requires to
 8-5     determine the person's eligibility, the board shall determine
 8-6     whether the person is eligible for a scholarship and, if the person
 8-7     is selected to receive a scholarship, shall distribute the amount
 8-8     of the scholarship for the person to the institution of higher
 8-9     education or directly to the person as determined by the board.
8-10           (b)  The amount of a hope scholarship is $1,500 for each
8-11     semester or summer session.
8-12           Sec. 56.307.  RULES; DISTRIBUTION OF INFORMATION.  (a) The
8-13     coordinating board shall adopt rules to administer this subchapter.
8-14           (b)  The coordinating board shall distribute to each
8-15     institution of higher education and to each school district
8-16     information describing the Texas Hope Scholarship Program and how a
8-17     student may qualify and apply for a hope scholarship.
8-18           SECTION 6.  (a)  This Act takes effect September 1, 1999.
8-19           (b)  Each school district required to establish a
8-20     prekindergarten program under Section 29.1531, Education Code, as
8-21     added by this Act, shall establish the program not later than the
8-22     2000-2001 school year.
8-23           (c)  The Texas Higher Education Coordinating Board shall
8-24     award scholarships under the Texas Hope Scholarship Program
8-25     beginning with the 2000 fall semester.
8-26           SECTION 7.  The importance of this legislation and the
8-27     crowded condition of the calendars in both houses create an
 9-1     emergency and an imperative public necessity that the
 9-2     constitutional rule requiring bills to be read on three several
 9-3     days in each house be suspended, and this rule is hereby suspended.