By Sadler                                             H.B. No. 2879
         Substitute the following for H.B. No. 2879:
         By Hochberg                                       C.S.H.B. No. 2879
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to public school finance.
 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-4           SECTION 1.  Subchapter A, Chapter 41, Education Code, is
 1-5     amended by adding Section 41.0021 to read as follows:
 1-6           Sec. 41.0021.  WEALTH PER STUDENT IN CERTAIN DISTRICTS NOT
 1-7     SERVING ALL GRADES. (a)  Notwithstanding Section 41.002, for the
 1-8     2001-2002, 2002-2003, and 2003-2004 school years, a school district
 1-9     that in the 1999-2000 school year did not offer each grade level
1-10     from kindergarten through 12 may elect to have its wealth per
1-11     student determined under this section.
1-12            (b)  In accordance with a determination of the commissioner,
1-13     the wealth per student that a school district to which this section
1-14     applies may have after exercising an option under Section 41.003(2)
1-15     or (3) is the amount needed to maintain state and local revenue in
1-16     an amount equal to state and local revenue per weighted student for
1-17     maintenance and operation of the district for the 1999-2000 school
1-18     year less the district's current year distribution per weighted
1-19     student from the available school fund, other than amounts
1-20     distributed under Chapter 31, if the district imposes an effective
1-21     tax rate for maintenance and operation of the district equal to the
1-22     district's tax rate for maintenance and operation for the 1999-2000
1-23     school year.  For purposes of this subsection, a district's
1-24     effective tax rate is determined as provided by Section 41.002(f).
 2-1           (c)  The commissioner shall:
 2-2                 (1)  compute the wealth per student levels under this
 2-3     section using weighted average daily attendance as defined by
 2-4     Section 42.302;
 2-5                 (2)  notify each school district that is eligible to
 2-6     have its wealth per student computed under this section; and
 2-7                 (3)  establish a date by which a district must elect to
 2-8     have its wealth per student computed under this section.
 2-9           (d)  A school district that elects to have its wealth per
2-10     student computed under this section:
2-11                 (1)  is not entitled to state aid to achieve the
2-12     funding levels permitted by Subsection (b);
2-13                 (2)  is not subject to a limitation on tuition under
2-14     Section 25.039;
2-15                 (3)  is not eligible for credit for tuition payments
2-16     under Section 41.124(b); and
2-17                 (4)  is not eligible for an adjustment to the
2-18     district's taxable value of property under Section 42.106.
2-19           (e)  This section expires September 1, 2004.
2-20           SECTION 2. Section 42.2512, Education Code, is amended to
2-21     read as follows:
2-22           Sec. 42.2512.  ADDITIONAL STATE AID FOR PROFESSIONAL STAFF
2-23     SALARIES. (a)  This section applies only to a school district that
2-24     received state aid under this section for the 1999-2000 and
2-25     2000-2001 school years.
2-26           (b)  A school district to which this section applies,
2-27     including a school district that is otherwise ineligible for state
 3-1     aid under this chapter, is entitled to state aid in an amount, as
 3-2     determined by the commissioner, equal to the difference, if any,
 3-3     between:
 3-4                 (1)  the sum of:
 3-5                       (A)  an amount equal to the product of $3,000
 3-6     multiplied by the number of classroom teachers, full-time
 3-7     librarians, full-time counselors certified under Subchapter B,
 3-8     Chapter 21, and full-time school nurses employed by the district
 3-9     and entitled to a minimum salary under Section 21.402; and
3-10                       (B)  the amount of additional salary cost the
3-11     district experiences that results from the increase made by H.B.
3-12     No. 2879, Acts of the 77th Legislature, Regular Session, 2001, to
3-13     the guaranteed level of state and local funds per weighted student
3-14     per cent of tax effort under Section 42.302; and
3-15                 (2)  the sum of:
3-16                       (A)  an amount equal to 80 percent of the amount
3-17     of additional funds to which the district is entitled due to the
3-18     increases made by S.B. No. 4, Acts of the 76th Legislature, Regular
3-19     Session, 1999, to:
3-20                             (i) [(A)]  the equalized wealth level under
3-21     Section 41.002;
3-22                             (ii) [(B)]  the basic allotment under
3-23     Section 42.101; and
3-24                             (iii) [(C)]  the guaranteed level of state
3-25     and local funds per weighted student per cent of tax effort under
3-26     Section 42.302; and
3-27                       (B)  an amount equal to 80 percent of the amount
 4-1     of additional funds to which the district is entitled due to the
 4-2     increase made by H.B. No. 2879, Acts of the 77th Legislature,
 4-3     Regular Session, 2001, to the guaranteed level of state and local
 4-4     funds per weighted student per cent of tax effort under Section
 4-5     42.302.
 4-6           (c) [(b)]  A determination by the commissioner under this
 4-7     section is final and may not be appealed.
 4-8           (d) [(c)]  The commissioner may adopt rules to implement this
 4-9     section.
4-10           SECTION 3. Effective September 1, 2001, Section 42.302(a),
4-11     Education Code, is amended to read as follows:
4-12           (a)  Each school district is guaranteed a specified amount
4-13     per weighted student in state and local funds for each cent of tax
4-14     effort over that required for the district's local fund assignment
4-15     up to the maximum level specified in this subchapter.  The amount
4-16     of state support, subject only to the maximum amount under Section
4-17     42.303, is determined by the formula:
4-18                     GYA = (GL X WADA X DTR X 100) - LR
4-19     where:
4-20           "GYA" is the guaranteed yield amount of state funds to be
4-21     allocated to the district;
4-22           "GL" is the dollar amount guaranteed level of state and local
4-23     funds per weighted student per cent of tax effort, which is $25.96
4-24     [$24.99] or a greater amount for any year provided by
4-25     appropriation;
4-26           "WADA" is the number of students in weighted average daily
4-27     attendance, which is calculated by dividing the sum of the school
 5-1     district's allotments under Subchapters B and C, less any allotment
 5-2     to the district for transportation, any allotment under Section
 5-3     42.158, and 50 percent of the adjustment under Section 42.102, by
 5-4     the basic allotment for the applicable year;
 5-5           "DTR" is the district enrichment tax rate of the school
 5-6     district, which is determined by subtracting the amounts specified
 5-7     by Subsection (b) from the total amount of maintenance and
 5-8     operations taxes collected by the school district for the
 5-9     applicable school year and dividing the difference by the quotient
5-10     of the district's taxable value of property as determined under
5-11     Subchapter M, Chapter 403, Government Code, or, if applicable,
5-12     under Section 42.2521, divided by 100; and
5-13           "LR" is the local revenue, which is determined by multiplying
5-14     "DTR" by the quotient of the district's taxable value of property
5-15     as determined under Subchapter M, Chapter 403, Government Code, or,
5-16     if applicable, under Section 42.2521, divided by 100.
5-17           SECTION 4. Effective September 1, 2002, Section 42.302(a),
5-18     Education Code, is amended to read as follows:
5-19           (a)  Each school district is guaranteed a specified amount
5-20     per weighted student in state and local funds for each cent of tax
5-21     effort over that required for the district's local fund assignment
5-22     up to the maximum level specified in this subchapter.  The amount
5-23     of state support, subject only to the maximum amount under Section
5-24     42.303, is determined by the formula:
5-25                     GYA = (GL X WADA X DTR X 100) - LR
5-26     where:
5-27           "GYA" is the guaranteed yield amount of state funds to be
 6-1     allocated to the district;
 6-2           "GL" is the dollar amount guaranteed level of state and local
 6-3     funds per weighted student per cent of tax effort, which is $27.30
 6-4     [$24.99] or a greater amount for any year provided by
 6-5     appropriation;
 6-6           "WADA" is the number of students in weighted average daily
 6-7     attendance, which is calculated by dividing the sum of the school
 6-8     district's allotments under Subchapters B and C, less any allotment
 6-9     to the district for transportation, any allotment under Section
6-10     42.158, and 50 percent of the adjustment under Section 42.102, by
6-11     the basic allotment for the applicable year;
6-12           "DTR" is the district enrichment tax rate of the school
6-13     district, which is determined by subtracting the amounts specified
6-14     by Subsection (b) from the total amount of maintenance and
6-15     operations taxes collected by the school district for the
6-16     applicable school year and dividing the difference by the quotient
6-17     of the district's taxable value of property as determined under
6-18     Subchapter M, Chapter 403, Government Code, or, if applicable,
6-19     under Section 42.2521, divided by 100; and
6-20           "LR" is the local revenue, which is determined by multiplying
6-21     "DTR" by the quotient of the district's taxable value of property
6-22     as determined under Subchapter M, Chapter 403, Government Code, or,
6-23     if applicable, under Section 42.2521, divided by 100.
6-24           SECTION 5.  Section 46.003, Education Code, is amended by
6-25     amending Subsections (a) and (d)-(g) and adding Subsection (h) to
6-26     read as follows:
6-27           (a)  For each year, except as provided by Sections 46.005 and
 7-1     46.006, a school district is guaranteed a specified amount per
 7-2     student in state and local funds for each cent of tax effort, up to
 7-3     the maximum rate under Subsection (b), to pay the principal of and
 7-4     interest on eligible bonds issued to construct, acquire, renovate,
 7-5     or improve an instructional facility.  The amount of state support
 7-6     is determined by the formula:
 7-7              FYA = (FYL X ADA X BTR X 100) - (BTR X (DPV/100))
 7-8     where:
 7-9           "FYA" is the guaranteed facilities yield amount of state
7-10     funds allocated to the district for the year;
7-11           "FYL" is the dollar amount guaranteed level of state and
7-12     local funds per student per cent of tax effort, which is:
7-13                 (1)  $35 or a greater amount for any year provided by
7-14     appropriation for eligible bonds for which the district first
7-15     received state assistance under this subchapter before September 1,
7-16     2001; and
7-17                 (2)  $25 or a greater amount for any year provided by
7-18     appropriation for eligible bonds for which the district first
7-19     received state assistance under this subchapter on or after
7-20     September 1, 2001;
7-21           "ADA" is the greater of the number of students in average
7-22     daily attendance, as determined under Section 42.005, in the
7-23     district or 400;
7-24           "BTR" is the district's bond tax rate for the current year,
7-25     which is determined by dividing the amount [of taxes] budgeted [to
7-26     be collected] by the district for payment of eligible bonds by the
7-27     quotient of the district's taxable value of property as determined
 8-1     under Subchapter M, Chapter 403, Government Code, or, if
 8-2     applicable, Section 42.2521, divided by 100; and
 8-3           "DPV" is the district's taxable value of property as
 8-4     determined under Subchapter M, Chapter 403, Government Code, or, if
 8-5     applicable, Section 42.2521.
 8-6           (d)  The amount budgeted by a district for payment of
 8-7     eligible bonds may include:
 8-8                 (1)  bond taxes collected in the current school year;
 8-9                 (2)  bond taxes collected in a preceding school year in
8-10     excess of the amount necessary to pay the district's share of
8-11     actual debt service on bonds in that year, provided that the taxes
8-12     were not used to generate other state financial assistance for the
8-13     district; or
8-14                 (3)  maintenance and operations taxes collected in the
8-15     current school year or a preceding school year in excess of the
8-16     amount eligible to be used to generate other state financial
8-17     assistance for the district.
8-18           (e)  Bonds are eligible to be paid with state and local funds
8-19     under this section if:
8-20                 (1)  taxes to pay the principal of and interest on the
8-21     bonds were first levied in the 1997-1998 school year or a later
8-22     school year; and
8-23                 (2)  the bonds do not have a weighted average maturity
8-24     of less than eight years.
8-25           (f) [(e)]  A district may use state funds received under this
8-26     section only to pay the principal of and interest on the bonds for
8-27     which the district received the funds.
 9-1           (g) [(f)]  The board of trustees and voters of a school
 9-2     district shall determine district needs concerning construction,
 9-3     acquisition, renovation, or improvement of instructional
 9-4     facilities.
 9-5           (h) [(g)]  To receive state assistance under this subchapter,
 9-6     a school district must apply to the commissioner in accordance with
 9-7     rules adopted by the commissioner before issuing bonds that will be
 9-8     paid with state assistance.  Until the bonds are fully paid or the
 9-9     instructional facility is sold:
9-10                 (1)  a school district is entitled to continue
9-11     receiving state assistance without reapplying to the commissioner;
9-12     and
9-13                 (2)  the guaranteed level of state and local funds per
9-14     student per cent of tax effort applicable to the bonds may not be
9-15     reduced below the level provided for the year in which the bonds
9-16     were issued.
9-17           SECTION 6.  Subchapter A, Chapter 46, Education Code, is
9-18     amended by adding Section 46.012 to read as follows:
9-19           Sec. 46.012.  MULTIPLE ALLOTMENTS PROHIBITED. A school
9-20     district is not entitled to state assistance under this subchapter
9-21     based on taxes with respect to which the district receives state
9-22     assistance under Subchapter F, Chapter 42.
9-23           SECTION 7.  Section 46.032, Education Code, is amended by
9-24     amending Subsection (a) and adding Subsection (c) to read as
9-25     follows:
9-26           (a)  Each school district is guaranteed a specified amount
9-27     per student in state and local funds for each cent of tax effort to
 10-1    pay the principal of and interest on eligible bonds.  The amount of
 10-2    state support, subject only to the maximum amount under Section
 10-3    46.034, is determined by the formula:
 10-4           EDA = (EDGL X ADA X EDTR X 100) - (EDTR X (DPV/100))
 10-5    where:
 10-6          "EDA" is the amount of state funds to be allocated to the
 10-7    district for assistance with existing debt;
 10-8          "EDGL" is the dollar amount guaranteed level of state and
 10-9    local funds per student per cent of tax effort, which is $35 or a
10-10    greater amount for any year provided by appropriation;
10-11          "ADA" is the number of students in average daily attendance,
10-12    as determined under Section 42.005, in the district;
10-13          "EDTR" is the existing debt tax rate of the district, which
10-14    is determined by dividing the amount [of taxes] budgeted [to be
10-15    collected] by the district for payment of eligible bonds by the
10-16    quotient of the district's taxable value of property as determined
10-17    under Subchapter M, Chapter 403, Government Code, or, if
10-18    applicable, under Section 42.2521, divided by 100; and
10-19          "DPV" is the district's taxable value of property as
10-20    determined under Subchapter M, Chapter 403, Government Code, or, if
10-21    applicable, under Section 42.2521.
10-22          (c)  The amount budgeted by a district for payment of
10-23    eligible bonds may include:
10-24                (1)  bond taxes collected in the current school year;
10-25                (2)  bond taxes collected in a preceding school year in
10-26    excess of the amount necessary to pay the district's share of
10-27    actual debt service on bonds in that year, provided that the taxes
 11-1    were not used to generate other state financial assistance for the
 11-2    district; or
 11-3                (3)  maintenance and operations taxes collected in the
 11-4    current school year or a preceding school year in excess of the
 11-5    amount eligible to be used to generate other state financial
 11-6    assistance for the district.
 11-7          SECTION 8.  Section 46.033, Education Code, is amended to
 11-8    read as follows:
 11-9          Sec. 46.033.  ELIGIBLE BONDS. Bonds, including bonds issued
11-10    under Section 45.006, are eligible to be paid with state and local
11-11    funds under this subchapter if:
11-12                (1)  the district made payments on the bonds during the
11-13    1998-1999 school year or taxes levied to pay the principal of and
11-14    interest on the bonds were included in the district's audited debt
11-15    service collections for that [the 1998-1999] school year; and
11-16                (2)  the district does not receive state assistance
11-17    under Subchapter A for payment of the principal and interest on the
11-18    bonds.
11-19          SECTION 9.  Sections 46.034(a) and (c), Education Code, are
11-20    amended to read as follows:
11-21          (a)  The existing debt tax rate ("EDTR") under Section 46.032
11-22    may not exceed $0.29 [$0.12] per $100 of valuation, or a greater
11-23    amount for any year provided by appropriation.
11-24          (c)  If the amount required to pay the principal of and
11-25    interest on eligible bonds in a school year is less than the amount
11-26    of payments made by the district on the bonds during the 1998-1999
11-27    school year or the district's audited debt service collections for
 12-1    that [the 1998-1999] school year, the district may not receive aid
 12-2    in excess of the amount that, when added to the district's local
 12-3    revenue for the school year, equals the amount required to pay the
 12-4    principal of and interest on the bonds.
 12-5          SECTION 10.  Subchapter B, Chapter 46, Education Code, is
 12-6    amended by adding Section 46.036 to read as follows:
 12-7          Sec. 46.036.  MULTIPLE ALLOTMENTS PROHIBITED. A school
 12-8    district is not entitled to state assistance under this subchapter
 12-9    based on taxes with respect to which the district receives state
12-10    assistance under Subchapter F, Chapter 42.
12-11          SECTION 11.  Sections 42.152(t) and 46.034(d), Education
12-12    Code, are repealed.
12-13          SECTION 12.  Except as otherwise provided by this Act, this
12-14    Act takes effect September 1, 2001.