By Armbrister                                         S.B. No. 1387
         77R7777 ESH-D                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to the treatment under the public school finance system of
 1-3     declining student enrollment.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1. Section 42.001, Education Code, is amended by
 1-6     adding Subsection (c) to read as follows:
 1-7           (c)  It is the policy of this state to recognize that a
 1-8     district that experiences a decline in student enrollment from one
 1-9     school year to the next does not necessarily experience a
1-10     corresponding decline in costs, as some costs are fixed and cannot
1-11     be reduced, while others represent contractual obligations a
1-12     district must meet.  This state also recognizes that declining
1-13     enrollment may require the board of trustees to choose between
1-14     raising district ad valorem taxes or cutting educational programs,
1-15     either of which may be detrimental to the district and its students
1-16     and residents.  In accordance with this policy, the average daily
1-17     attendance or the weighted average daily attendance of a school
1-18     district that experiences a decline in student enrollment shall be
1-19     adjusted as provided by Section 42.005 or 42.2523, as applicable.
1-20           SECTION 2. Section 42.005, Education Code, is amended by
1-21     amending Subsections (b)-(d) and adding Subsection (e) to read as
1-22     follows:
1-23           (b)  The commissioner shall adjust the average daily
1-24     attendance of a [A] school district that experiences a decline [of
 2-1     two percent or more] in average daily attendance to [as a result of
 2-2     the closing or reduction in personnel of a military base shall be
 2-3     funded on the basis of] the actual average daily attendance of the
 2-4     preceding school year.
 2-5           (c)  Subsection (b) does not apply to a school district that
 2-6     is required to take action under Chapter 41 to reduce its wealth
 2-7     per student to the equalized wealth level.
 2-8           (d)  The commissioner shall adjust the average daily
 2-9     attendance of a school district that has a significant percentage
2-10     of students who are migratory children as defined by 20 U.S.C.
2-11     Section 6399.
2-12           (e) [(d)]  The commissioner may adjust the average daily
2-13     attendance of a school district in which a disaster, flood, extreme
2-14     weather condition, fuel curtailment, or other calamity has a
2-15     significant effect on the district's attendance.
2-16           SECTION 3. Subchapter E, Chapter 42, Education Code, is
2-17     amended by adding Section 42.2523 to read as follows:
2-18           Sec. 42.2523.  ADJUSTMENT FOR DECLINE IN WEIGHTED AVERAGE
2-19     DAILY ATTENDANCE. (a)  For purposes of this chapter and Chapter 41,
2-20     the commissioner shall adjust the weighted average daily attendance
2-21     of a school district that experiences a decline in weighted average
2-22     daily attendance to the actual weighted average daily attendance of
2-23     the preceding school year.
2-24           (b)  The commissioner may not adjust both the weighted
2-25     average daily attendance of a school district under this section
2-26     and the average daily attendance of the district under Section
2-27     42.005, but shall use the adjustment that produces the greater
 3-1     amount of state aid for the district.
 3-2           (c)  In this section, "weighted average daily attendance" has
 3-3     the meaning assigned by Section 42.302.
 3-4           SECTION 4. Sections 25.112(a) and (b), Education Code, are
 3-5     amended to read as follows:
 3-6           (a)  Except as otherwise authorized by this section, a school
 3-7     district may not enroll more than 22 students in a kindergarten,
 3-8     first, second, third, or fourth grade class.  That limitation does
 3-9     not apply during:
3-10                 (1)  any 12-week period of the school year selected by
3-11     the district, in the case of a district whose average daily
3-12     attendance is adjusted under Section 42.005(d) [42.005(c)]; or
3-13                 (2)  the last 12 weeks of any school year in the case
3-14     of any other district.
3-15           (b)  Not later than the 30th day after the first day of the
3-16     12-week period for which a district whose average daily attendance
3-17     is adjusted under Section 42.005(d) [42.005(c)] is claiming an
3-18     exemption under Subsection (a), the district shall notify the
3-19     commissioner in writing that the district is claiming an exemption
3-20     for the period stated in the notice.
3-21            SECTION 5. This Act takes effect September 1, 2001.