78R2771 ESH-D

By:  Truitt                                                       H.B. No. 717



A BILL TO BE ENTITLED

AN ACT

relating to the cost of education adjustment.                                 
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Section 42.102, Education Code, is amended by 
amending Subsection (b) and adding Subsections (c)-(f) to read as 
follows:
	(b)  The commissioner shall determine the cost of education 
adjustment for each school district based on a statistical analysis 
conducted by an organization independent from the agency and the 
Legislative Budget Board that:
		(1)  isolates the independent effects of 
uncontrollable factors on the compensation that school districts 
must pay, including teachers' salaries, benefits paid under Article 
3.50-7, Insurance Code, and other benefits, but excluding benefits 
paid by the state; and
		(2)  includes variations, determined using the average 
value for the preceding three years for uncontrollable cost 
factors, in the characteristics of teachers, teachers' working 
environments, and the economic and social conditions of the 
communities in which teachers reside [is the cost of education 
index adjustment adopted by the foundation school fund budget 
committee and contained in Chapter 203, Title 19, Texas 
Administrative Code, as that chapter existed on March 26, 1997].
	(c)  Not later than July 15 of each year, the commissioner 
shall notify each school district of the district's cost of 
education adjustment for the following school year.
	(d)  Notwithstanding Subsection (c) and except as provided 
by Subsection (e), a school district's cost of education adjustment 
may not be less than the sum of:
		(1)  80 percent of the district's cost of education 
adjustment for the 2002-2003 school year; and
		(2)  20 percent of the district's cost of education 
adjustment determined under Subsection (b).
	(e)  To the extent that money specifically authorized to be 
used under this section is available, the commissioner shall adjust 
the amount of state aid to which each district is entitled by 
application of this section so that no district receives less than 
the amount to which the district would be entitled using the 
district's cost of education adjustment for the 2002-2003 school 
year.
	(f)  The commissioner shall use the cost of education 
adjustment determined under Subsection (b) for the 2003-2004, 
2004-2005, and 2005-2006 school years.  Not later than January 1, 
2005, and each four years thereafter, the commissioner shall 
contract with an organization independent from the agency and the 
Legislative Budget Board to conduct an analysis of variations in 
known resource costs and costs of education beyond the control of a 
school district and to make recommendations to the commissioner as 
to methods of adjusting funding under this chapter to reflect 
variations in resource costs and costs of education.  The analysis 
must include the factors specified by Subsections (b)(1) and (2). 
The commissioner shall review the recommendations and determine 
cost of education adjustments as provided by Subsection (b).
	SECTION 2.  Effective September 1, 2004, Section 42.102(d), 
Education Code, as added by Section 1 of this Act, is amended to 
read as follows:
	(d)  Notwithstanding Subsection (c) and except as provided 
by Subsection (e), a school district's cost of education adjustment 
may not be less than the sum of:
		(1)  50 percent of the district's cost of education 
adjustment for the 2002-2003 school year; and
		(2)  50 percent of the district's cost of education 
adjustment determined under Subsection (b).
	SECTION 3.  Effective September 1, 2005, Section 42.102(d), 
Education Code, as added by Section 1 of this Act, is amended to 
read as follows:
	(d)  Notwithstanding Subsection (c) and except as provided 
by Subsection (e), a school district's cost of education adjustment 
may not be less than the sum of:
		(1)  20 percent of the district's cost of education 
adjustment for the 2002-2003 school year; and
		(2)  80 percent of the district's cost of education 
adjustment determined under Subsection (b).
	SECTION 4.  Section 42.302(a), Education Code, is amended to 
read as follows:
	(a)  Each school district is guaranteed a specified amount 
per weighted student in state and local funds for each cent of tax 
effort over that required for the district's local fund assignment 
up to the maximum level specified in this subchapter.  The amount of 
state support, subject only to the maximum amount under Section 
42.303, is determined by the formula:

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

where:                                                                        
	"GYA" is the guaranteed yield amount of state funds to be 
allocated to the district;
	"GL" is the dollar amount guaranteed level of state and local 
funds per weighted student per cent of tax effort, which is $27.14 
or a greater amount for any year provided by appropriation;
	"WADA" is the number of students in weighted average daily 
attendance, which is calculated by dividing the sum of the school 
district's allotments under Subchapters B and C, less any allotment 
to the district for transportation and[,] any allotment under 
Section 42.158, [and 50 percent of the adjustment under Section 
42.102,] by the basic allotment for the applicable year;
	"DTR" is the district enrichment tax rate of the school 
district, which is determined by subtracting the amounts specified 
by Subsection (b) from the total amount of maintenance and 
operations taxes collected by the school district for the 
applicable school year and dividing the difference by the quotient 
of the district's taxable value of property as determined under 
Subchapter M, Chapter 403, Government Code, or, if applicable, 
under Section 42.2521, divided by 100; and
	"LR" is the local revenue, which is determined by multiplying 
"DTR" by the quotient of the district's taxable value of property as 
determined under Subchapter M, Chapter 403, Government Code, or, if 
applicable, under Section 42.2521, divided by 100.
	SECTION 5.  Effective September 1, 2006, Section 42.102(d), 
Education Code, as added by Section 1 of this Act, is repealed.
	SECTION 6.  Sections 42.102 and 42.302, Education Code, as 
amended by this Act, apply to the computation of funding under 
Chapter 42, Education Code, beginning September 1, 2003.
	SECTION 7.  As soon as practicable after the effective date 
of this Act, the commissioner of education shall contract with an 
organization independent from the Texas Education Agency and the 
Legislative Budget Board to conduct the analysis required by 
Section 42.102(b), Education Code, as amended by this Act.
	SECTION 8.  Except as otherwise provided by this Act, this 
Act takes effect immediately if it receives a vote of two-thirds of 
all the members elected to each house, as provided by Section 39, 
Article III, Texas Constitution.  If this Act does not receive the 
vote necessary for immediate effect, except as otherwise provided 
by this Act, this Act takes effect September 1, 2003.