By Shapleigh                                          S.B. No. 1447
         77R1081 ESH-D                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to school finance issues involving amounts withheld from
 1-3     special allotments under the Foundation School Program.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1.  Section 42.151(l), Education Code, is amended to
 1-6     read as follows:
 1-7           (l)  From the total amount of funds appropriated for special
 1-8     education under this section, the commissioner shall withhold an
 1-9     amount specified in the General Appropriations Act, and distribute
1-10     that amount to school districts for programs under Section 29.014.
1-11     The program established under that section is required only in
1-12     school districts in which the program is financed by funds
1-13     distributed under this subsection and any other funds available for
1-14     the program.  [After deducting the amount withheld under this
1-15     subsection from the total amount appropriated for special
1-16     education, the commissioner shall reduce each district's allotment
1-17     proportionately and shall allocate funds to each district
1-18     accordingly.]
1-19           SECTION 2.  Sections 42.152(e) and (h)-(t), Education Code,
1-20     are amended to read as follows:
1-21           (e)  From the total amount of funds appropriated for
1-22     allotments under this section, the commissioner shall withhold [The
1-23     commissioner may:]
1-24                 [(1)  retain a portion of] the [total] amount [allotted
 2-1     under Subsection (a)] that the commissioner considers appropriate
 2-2     to finance intensive accelerated instruction programs and study
 2-3     guides provided under Sections 39.024(b) and (c)[; and]
 2-4                 [(2)  reduce each district's tier one allotments in the
 2-5     same manner described for a reduction in allotments under Section
 2-6     42.253].
 2-7           (h)  [After deducting the amount withheld under Subsection
 2-8     (f) from the total amount appropriated for the allotment under
 2-9     Subsection (a), the commissioner shall reduce each district's tier
2-10     one allotments in the same manner described for a reduction in
2-11     allotments under Section 42.253 and shall allocate funds to each
2-12     district accordingly.]
2-13           [(i)]  From the total amount of funds appropriated for
2-14     allotments under this section, the commissioner shall, each fiscal
2-15     year, withhold $7,500,000 or a greater amount as determined in the
2-16     General Appropriations Act and distribute that amount for programs
2-17     under Subchapter A, Chapter 33.  A program established under that
2-18     subchapter is required only in school districts in which the
2-19     program is financed by funds distributed under this section or
2-20     other funds distributed by the commissioner for a program under
2-21     that subchapter.  In distributing those funds, preference shall be
2-22     given to a school district that received funds for a program under
2-23     this subsection for the preceding school year.
2-24           (i) [(j)]  The commissioner shall coordinate the funds
2-25     withheld under Subsection (h) [(i)] and any other funds available
2-26     for the program and shall distribute those funds.  To receive funds
2-27     for the program, a school district must apply to the commissioner.
 3-1     The commissioner shall give a preference to the districts that
 3-2     apply that have the highest concentration of at-risk students.  For
 3-3     each school year that a school district receives funds under this
 3-4     section, the district shall allocate an amount of local funds for
 3-5     school guidance and counseling programs that is equal to or greater
 3-6     than the amount of local funds that the school district allocated
 3-7     for that purpose during the preceding school year.
 3-8           (j) [(k)  After deducting the amount withheld under
 3-9     Subsection (i) from the total amount appropriated for the allotment
3-10     under Subsection (a), the commissioner shall reduce each district's
3-11     tier one allotments in the same manner described for a reduction in
3-12     allotments under Section 42.253.]
3-13           [(l)]  From the total amount of funds appropriated for
3-14     allotments under this section, the commissioner shall, each fiscal
3-15     year, withhold the amount of $2.5 million for transfer to the
3-16     investment capital fund under Section 7.024.
3-17           (k) [(m)]  From the total amount of funds appropriated for
3-18     allotments under this section, the commissioner may withhold an
3-19     amount not exceeding $1 million each fiscal year and distribute the
3-20     funds to school districts that incur unanticipated expenditures
3-21     resulting from a significant increase in the enrollment of students
3-22     who do not have disabilities and who reside in residential
3-23     placement facilities.
3-24           (l) [(n)  After deducting the amount withheld under
3-25     Subsection (l) from the total amount appropriated for the allotment
3-26     under Subsection (a), the commissioner shall reduce each district's
3-27     allotment under Subsection (a) proportionately and shall allocate
 4-1     funds to each district accordingly.]
 4-2           [(o)  After deducting the amount withheld under Subsection
 4-3     (m) from the total amount appropriated for the allotment under
 4-4     Subsection (a), the commissioner shall reduce each district's
 4-5     allotment under Subsection (a) proportionately.]
 4-6           [(p)]  The commissioner shall:
 4-7                 (1)  withhold, from the total amount of funds
 4-8     appropriated for allotments under this section, an amount
 4-9     sufficient to finance extended year programs under Section 29.082
4-10     not to exceed five percent of the amounts allocated under this
4-11     section; and
4-12                 (2)  give priority to applications for extended year
4-13     programs to districts with high concentrations of educationally
4-14     disadvantaged students.
4-15           (m) [(q)]  The State Board of Education, with the assistance
4-16     of the state auditor and the comptroller, shall develop and
4-17     implement by rule a reporting and auditing system for district and
4-18     campus expenditures of compensatory education funds to ensure that
4-19     compensatory education funds, other than the indirect cost
4-20     allotment, are spent only to supplement the regular program.  The
4-21     commissioner, in the year following an audit of compensatory
4-22     education expenditures, shall withhold from a district's foundation
4-23     school fund payment an amount equal to the amount of compensatory
4-24     education funds the agency determines were not used in compliance
4-25     with Subsection (c).  The commissioner shall release to a district
4-26     funds withheld under this subsection when the district provides to
4-27     the commissioner a detailed plan to spend those funds in compliance
 5-1     with Subsection (c).
 5-2           (n) [(s)]  A reduction made under this section or the General
 5-3     Appropriations Act in the allotment under this section does not
 5-4     affect the computation of students in weighted average daily
 5-5     attendance for purposes of Subchapter F.
 5-6           (o) [(t)]  For each year of a state fiscal biennium, the
 5-7     commissioner shall reduce the guaranteed level of state and local
 5-8     funds per weighted student per cent of tax effort under Section
 5-9     42.302 by an amount sufficient to reduce state costs in an amount
5-10     equal to the increase in state costs due to the application of
5-11     Subsection (n) [(s)].  The commissioner shall determine the same
5-12     reduction for each year and shall announce the determination as
5-13     soon as practicable after August 1 preceding the beginning of the
5-14     biennium.  A determination by the commissioner under this section
5-15     is final and may not be appealed.
5-16           SECTION 3.  Section 42.154(e), Education Code, is amended to
5-17     read as follows:
5-18           (e)  Out of the total statewide allotment for career and
5-19     technology education under this section, the commissioner shall set
5-20     aside an amount specified in the General Appropriations Act, which
5-21     may not exceed an amount equal to one percent of the total amount
5-22     appropriated, to support regional career and technology education
5-23     planning.  [After deducting the amount set aside under this
5-24     subsection from the total amount appropriated for career and
5-25     technology education under this section, the commissioner shall
5-26     reduce each district's tier one allotments in the same manner
5-27     described for a reduction in allotments under Section 42.253.]
 6-1           SECTION 4. Subchapter C, Chapter 42, Education Code, is
 6-2     amended by adding Sections 42.159 and 42.160 to read as follows:
 6-3           Sec. 42.159.  AMOUNTS WITHHELD FROM SPECIAL ALLOTMENTS.
 6-4     (a)  The commissioner shall:
 6-5                 (1)  compute the total amount withheld, under this
 6-6     subchapter or the General Appropriations Act, from the total amount
 6-7     of special allotments under this subchapter to which school
 6-8     districts are entitled; and
 6-9                 (2)  reduce each district's total entitlement under
6-10     this chapter by an amount determined by a method under which the
6-11     application of the same number of cents of increase in tax rate in
6-12     all districts applied to the adjusted taxable value of property of
6-13     each district results in a total levy equal to the total reduction.
6-14           (b)  For purposes of this section, the adjusted taxable value
6-15     of property of a district is:
6-16                 (1)  for a district that is not required to take action
6-17     under Chapter 41 to reduce its wealth per student to the equalized
6-18     wealth level, the district's taxable value of property as
6-19     determined under Subchapter M, Chapter 403, Government Code, or, if
6-20     applicable, under Section 42.2521; or
6-21                 (2)  for a district that is required to take action
6-22     under Chapter 41 to reduce its wealth per student to the equalized
6-23     wealth level, the amount determined by the formula:
6-24                              ADPV = WPS X WADA
6-25     where:
6-26           "ADPV" is the district's adjusted taxable value of property;
6-27           "WPS" is the equalized wealth level under Chapter 41 or, if
 7-1     applicable, the district's wealth per student determined under
 7-2     Section 41.002(e); and
 7-3           "WADA" is the district's weighted average daily attendance,
 7-4     computed as provided by Section 42.302.
 7-5           Sec. 42.160.  PAYMENT FOR REDUCTION IN TOTAL ENTITLEMENT. (a)
 7-6     A school district that is required to take action under Chapter 41
 7-7     to reduce its wealth per student to the equalized wealth level
 7-8     shall remit to the commissioner an amount equal to the total amount
 7-9     by which the district's total entitlement under this chapter is
7-10     reduced under Section 42.159.
7-11           (b)  A school district whose total entitlement under this
7-12     chapter is less than the amount by which that entitlement is
7-13     reduced under Section 42.159 shall remit to the commissioner the
7-14     amount by which the reduction exceeds the amount of the
7-15     entitlement.
7-16           (c)  The commissioner shall adopt rules to administer this
7-17     section, including rules specifying the time by which a school
7-18     district must remit funds under this section.
7-19           (d)  The commissioner may use funds received under this
7-20     section only for a purpose for which amounts are withheld under
7-21     this subchapter or the General Appropriations Act.
7-22           (e)  If a school district does not remit funds as required by
7-23     this section, the commissioner may take any action permitted by
7-24     Section 42.258.
7-25           SECTION 5.  Section 7.024(a), Education Code, is amended to
7-26     read as follows:
7-27           (a)  The investment capital fund consists of money
 8-1     transferred to the fund as provided by Section 42.152(j)
 8-2     [42.152(l)].  The agency shall administer the fund.  The purposes
 8-3     of this fund are to assist eligible public schools to implement
 8-4     practices and procedures consistent with deregulation and school
 8-5     restructuring in order to improve student achievement and to help
 8-6     schools identify and train parents and community leaders who will
 8-7     hold the school and the school district accountable for achieving
 8-8     high academic standards.
 8-9           SECTION 6.  Section 33.001, Education Code, is amended to
8-10     read as follows:
8-11           Sec. 33.001.  APPLICABILITY OF SUBCHAPTER. This subchapter
8-12     applies only to a school district that receives funds as provided
8-13     by Section 42.152(h) [42.152(i)].
8-14           SECTION 7.  Section 39.024(c), Education Code, is amended to
8-15     read as follows:
8-16           (c)  The agency shall develop study guides for the assessment
8-17     instruments administered under Sections 39.023(a) and (c).  To
8-18     assist parents in providing assistance during the period that
8-19     school is recessed for summer, each school district shall
8-20     distribute the study guides to parents of students who do not
8-21     perform satisfactorily on one or more parts of an assessment
8-22     instrument administered under this subchapter.  [The commissioner
8-23     shall retain a portion of the total amount of funds allotted under
8-24     Section 42.152(a) that the commissioner considers appropriate to
8-25     finance the development and distribution of the study guides and
8-26     shall reduce each district's allotment proportionately.]
8-27           SECTION 8.  Section 42.156(d), Education Code, is repealed.
 9-1           SECTION 9.  This Act takes effect September 1, 2001.