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By: Pitts, McCall H.B. No. 3459
A BILL TO BE ENTITLED
AN ACT
relating to fiscal matters involving certain governmental
educational entities, including public school finance, program
compliance monitoring by the Texas Education Agency, funding for
regional education service centers, amounts withheld from
compensatory education allotments, the public school technology
allotment, the accounting for the permanent school fund, refunding
of certain student loan bonds, funding for the higher education
fund, health insurance coverage provided by certain educational
entities, the uses of the telecommunications infrastructure fund,
and the regulation of driver education schools.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. The following provisions of the Education Code
are repealed:
(1) Chapters 41, 42, and 46; and
(2) Section 45.002.
SECTION 2. Chapter 4, Education Code, is amended by adding
Section 4.003 to read as follows:
Sec. 4.003. STATE RESPONSIBILITY FOR PROVISION OF PUBLIC
EDUCATION. (a) It is the policy of this state that the provision of
public education is a state responsibility and that a thorough and
efficient system be provided and substantially financed through
state revenue sources so that each student enrolled in the public
school system shall have access to programs and services that are
appropriate to the student's educational needs and that are
substantially equal to those available to any similar student,
notwithstanding varying local economic factors.
(b) The public school finance system of this state shall
adhere to a standard of neutrality that provides for substantially
equal access to similar revenue per student at similar tax effort,
considering all state and local tax revenues of districts after
acknowledging all legitimate student and district cost
differences.
(c) It is the policy of this state that not later than
September 1, 2007, the legislature shall provide state funding in
an amount that constitutes at least 50 percent of the cost of
maintaining and operating the public school system.
SECTION 3. Sections 1 and 2 of this Act take effect
September 1, 2004, but only if, before that date:
(1) the legislature has enacted a school finance
system to replace the system established by Chapters 41, 42, 45, and
46, Education Code;
(2) the Act enacting a school finance system in
compliance with Subdivision (1) of this section affirmatively
states that the system is a comprehensive school finance system for
the entire state; and
(3) the school finance system enacted in compliance
with Subdivision (1) of this section has become law.
SECTION 4. Subchapter B, Chapter 7, Education Code, is
amended by adding Section 7.027 to read as follows:
Sec. 7.027. LIMITATION ON COMPLIANCE MONITORING. (a)
Except as provided by Section 29.001(5), 39.074, or 39.075, the
agency may monitor compliance with requirements applicable to a
process or program provided by a school district, campus, program,
or school granted charters under Chapter 12, including the process
described by Subchapter F, Chapter 11, or a program described by
Subchapter A, B, C, D, E, F, H, or I, Chapter 29, or Section 38.003,
and the use of funds provided for such a program under Subchapter C,
Chapter 42, only as necessary to ensure:
(1) compliance with state and federal law and
regulations;
(2) financial accountability, including compliance
with grant requirements; and
(3) data integrity for purposes of:
(A) the Public Education Information Management
System (PEIMS); and
(B) accountability under Chapter 39.
(b) The board of trustees of a school district or the
governing body of an open-enrollment charter school has primary
responsibility for ensuring that the district or school complies
with all applicable requirements of state educational programs.
SECTION 5. Section 8.051(d), Education Code, is amended to
read as follows:
(d) Each regional education service center may [shall]
maintain core services for purchase by school districts and
campuses. The core services are:
(1) training and assistance in teaching each subject
area assessed under Section 39.023;
(2) training and assistance in providing each program
that qualifies for a funding allotment under Section 42.151,
42.152, 42.153, or 42.156;
(3) assistance specifically designed for a school
district rated academically unacceptable under Section 39.072(a)
or a campus whose performance is considered unacceptable based on
the indicators adopted under Section 39.051;
(4) training and assistance to teachers,
administrators, members of district boards of trustees, and members
of site-based decision-making committees;
(5) assistance specifically designed for a school
district that is considered out of compliance with state or federal
special education requirements, based on the agency's most recent
compliance review of the district's special education programs; and
(6) assistance in complying with state laws and rules.
SECTION 6. Subchapter I, Chapter 21, Education Code, is
amended by adding Section 21.413 to read as follows:
Sec. 21.413. CLASSROOM SUPPLY REIMBURSEMENT PROGRAM. (a)
The commissioner shall establish a reimbursement program under
which the commissioner provides funds to a school district for the
purpose of reimbursing classroom teachers in the district who
expend personal funds on classroom supplies. A school district
must match any funds provided to the district under the
reimbursement program with local funds to be used for the same
purpose.
(b) The commissioner shall adopt rules for the local
allocation of funds provided to a school district under the
reimbursement program. A school district shall allow each
classroom teacher in the district who is reimbursed under the
reimbursement program to use the funds in the teacher's discretion,
except that the funds must be used for the benefit of the district's
students. A school district may not use funds received under the
reimbursement program to replace local funds used by the district
for the same purpose.
(c) The commissioner shall identify state and federal funds
available for use under the reimbursement program, including funds
subject to the Education Flexibility Partnership Act of 1999 (20
U.S.C. Section 5891a et seq.), and its subsequent amendments, as
well as consolidated administrative funds.
(d) The commissioner shall establish the reimbursement
program for implementation beginning not later than the 2005-2006
school year. The commissioner may implement the reimbursement
program only if funds are specifically appropriated by the
legislature for the program or if the commissioner identifies
available funds, other than general revenue funds, that may be used
for the program.
SECTION 7. Section 29.001, Education Code, is amended to
read as follows:
Sec. 29.001. STATEWIDE PLAN. The agency shall develop, and
modify as necessary, a statewide design, consistent with federal
law, for the delivery of services to children with disabilities in
this state that includes rules for the administration and funding
of the special education program so that a free appropriate public
education is available to all of those children between the ages of
three and 21. The statewide design shall include the provision of
services primarily through school districts and shared services
arrangements, supplemented by regional education service centers.
The agency shall also develop and implement a statewide plan with
programmatic content that includes procedures designed to:
(1) ensure state compliance with requirements for
supplemental federal funding for all state-administered programs
involving the delivery of instructional or related services to
students with disabilities;
(2) facilitate interagency coordination when other
state agencies are involved in the delivery of instructional or
related services to students with disabilities;
(3) periodically assess statewide personnel needs in
all areas of specialization related to special education and pursue
strategies to meet those needs through a consortium of
representatives from regional education service centers, local
education agencies, and institutions of higher education and
through other available alternatives;
(4) ensure that regional education service centers
throughout the state maintain a regional support function, which
may include direct service delivery and a component designed to
facilitate the placement of students with disabilities who cannot
be appropriately served in their resident districts;
(5) allow the agency to effectively monitor and
periodically conduct site visits of all school districts [to ensure
that rules adopted under this section are applied in a consistent
and uniform manner,] to ensure that districts are complying with
federal law and regulations and those state laws and rules
necessary to carry out federal and state law and regulations
relating to special education [,] and to ensure that annual
statistical reports filed by the districts and not otherwise
available through the Public Education Information Management
System under Section 42.006, are accurate and complete;
(6) ensure that appropriately trained personnel are
involved in the diagnostic and evaluative procedures operating in
all districts and that those personnel routinely serve on district
admissions, review, and dismissal committees;
(7) ensure that an individualized education program
for each student with a disability is properly developed,
implemented, and maintained in the least restrictive environment
that is appropriate to meet the student's educational needs;
(8) ensure that, when appropriate, each student with a
disability is provided an opportunity to participate in career and
technology and physical education classes, in addition to
participating in regular or special classes;
(9) ensure that each student with a disability is
provided necessary related services; and
(10) ensure that an individual assigned to act as a
surrogate parent for a child with a disability, as provided by 20
U.S.C. Section 1415(b) and its subsequent amendments, is required
to:
(A) complete a training program that complies
with minimum standards established by agency rule;
(B) visit the child and the child's school;
(C) consult with persons involved in the child's
education, including teachers, caseworkers, court-appointed
volunteers, guardians ad litem, attorneys ad litem, foster parents,
and caretakers;
(D) review the child's educational records;
(E) attend meetings of the child's admission,
review, and dismissal committee;
(F) exercise independent judgment in pursuing
the child's interests; and
(G) exercise the child's due process rights under
applicable state and federal law.
SECTION 8. Sections 29.010(a) and (c), Education Code, are
amended to read as follows:
(a) The agency shall adopt and implement a comprehensive
system for monitoring school district compliance with federal and
state law and regulations and state requirements necessary to carry
out federal laws and regulations relating to special education.
The monitoring system must provide for ongoing analysis of district
special education data and of complaints filed with the agency
concerning special education services and for inspections of school
districts at district facilities. The agency shall use the
information obtained through analysis of district data and from the
complaints management system to determine the appropriate schedule
for and extent of the inspection.
(c) The agency shall develop and implement a system of
sanctions for school districts whose most recent monitoring visit
shows a failure to comply with major requirements of the
Individuals with Disabilities Education Act (20 U.S.C. Section 1400
et seq.), federal law or regulations, or state [statutes, or
agency] requirements necessary to carry out federal law or
regulations [or state law] relating to special education.
SECTION 9. Sections 29.062(a) and (e), Education Code, are
amended to read as follows:
(a) The legislature recognizes that compliance with this
subchapter is an imperative public necessity. Therefore, in
accordance with the policy of the state, the agency shall evaluate
the effectiveness of programs under this subchapter based on the
results of assessment instruments, including those required under
Subchapter B, Chapter 39. The agency may combine evaluations under
this section with federal accountability measures concerning
students of limited English proficiency [monitor compliance with
state rules by inspecting each school district and open-enrollment
charter school on-site at least every three years].
(e) If a school district or open-enrollment charter school
fails to satisfy appropriate standards adopted by the commissioner
for purpose of Subsection (a) [or refuses to comply after proper
notification], the agency shall apply sanctions, which may include
the removal of accreditation, loss of foundation school funds, or
both.
SECTION 10. Section 31.021(b), Education Code, is amended
to read as follows:
(b) The State Board of Education shall annually set aside
out of the available school fund of the state an amount sufficient
for the board, school districts, and open-enrollment charter
schools to purchase and distribute the necessary textbooks for the
use of the students of this state for the following school year.
The board shall determine the amount of the available school fund to
set aside for the state textbook fund based on:
(1) a report by the commissioner issued on July 1 or,
if that date is a Saturday or Sunday, on the following Monday,
stating the amount of unobligated money in the fund;
(2) [a requirement to provide an allotment to be
distributed to each district equal to $30 per student in average
daily attendance, or a greater amount for any year provided by
appropriation, to be used only to:
[(A) provide for the purchase by school districts
of electronic textbooks or technological equipment that
contributes to student learning; and
[(B) pay for training educational personnel
directly involved in student learning in the appropriate use of
electronic textbooks and for providing for access to technological
equipment for instructional use;
[(3)] the commissioner's estimate, based on textbooks
selected under Section 31.101 and on attendance reports submitted
under Section 31.103 by school districts and open-enrollment
charter schools, of the amount of funds, in addition to funds
reported under Subdivision (1), that will be necessary for purchase
and distribution of textbooks for the following school year; and
(3) [(4)] any amount the board determines should be
set aside for emergency purposes caused by unexpected increases in
attendance.
SECTION 11. Section 31.103(b), Education Code, is amended
to read as follows:
(b) A requisition for textbooks for the following school
year shall be based on the maximum attendance reports under
Subsection (a), plus an additional 10 percent, except as otherwise
provided. A school district or open-enrollment charter school
shall make a requisition for a textbook on the conforming or
nonconforming list through the commissioner to the state depository
designated by the publisher or as provided by State Board of
Education rule, as applicable, not later than June 1 of each year.
The designated state depository or, if the publisher or
manufacturer does not have a designated textbook depository in this
state under Section 31.151(a)(6)(B), the publisher or manufacturer
shall fill a requisition approved by the agency at any other time in
the case of an emergency. As made necessary by available funds, the
commissioner shall reduce the additional percentage of attendance
for which a district or school may requisition textbooks. The
commissioner may, on application of a district or school that is
experiencing high enrollment growth, increase the additional
percentage of attendance for which the district or school may
requisition textbooks.
SECTION 12. Subchapter A, Chapter 32, Education Code, is
amended by adding Section 32.005 to read as follows:
Sec. 32.005. TECHNOLOGY ALLOTMENT. (a) Each school
district is entitled to an allotment of $35 for each student in
average daily attendance or a different amount for any year
provided by appropriation.
(b) An allotment under this section may be used only to:
(1) provide for the purchase by school districts of
electronic textbooks or technological equipment that contributes
to student learning; and
(2) pay for training educational personnel directly
involved in student learning in the appropriate use of electronic
textbooks and for providing for access to technological equipment
for instructional use.
(c) The allotment under this section may be paid from:
(1) the telecommunications infrastructure fund under
Subchapter C, Chapter 57, Utilities Code;
(2) the available school fund; or
(3) any other fund that may be used for that purpose
and that is identified in the General Appropriations Act as the
source of payment of the allotment.
SECTION 13. Section 39.023(e), Education Code, is amended
to read as follows:
(e) Under rules adopted by the State Board of Education,
every other year, the agency shall release the questions and answer
keys to each assessment instrument administered under Subsection
(a), (b), (c), (d), or (l) after the last time the instrument is
administered for that [a] school year. To ensure a valid bank of
questions for use each year, the agency is not required to release a
question that is being field-tested and was not used to compute the
student's score on the instrument. The agency shall also release,
under board rule, each question that is no longer being
field-tested and that was not used to compute a student's score.
SECTION 14. Section 39.031(a), Education Code, is amended
to read as follows:
(a) The cost of preparing, administering, or grading the
assessment instruments shall be paid from foundation school fund
allotments other than [the] funds allotted under Section 42.152,
and each district shall bear the cost in the same manner described
for a reduction in allotments under Section 42.253. [If a district
does not receive an allotment under Section 42.152, the
commissioner shall subtract the cost from the district's other
foundation school fund allotments.]
SECTION 15. Sections 41.0021(a) and (e), Education Code,
are amended to read as follows:
(a) Notwithstanding Section 41.002, for the [2001-2002,
2002-2003, and] 2003-2004 and 2004-2005 school years, a school
district that in the 1999-2000 school year did not offer each grade
level from kindergarten through 12 may elect to have its wealth per
student determined under this section.
(e) This section expires September 1, 2005 [2004].
SECTION 16. Sections 42.152(i)-(l), (n), and (p), Education
Code, are amended to read as follows:
(i) From the total amount of funds appropriated for
allotments under this section, the commissioner may [shall], each
fiscal year, withhold an [$7,500,000 or a greater] amount as
determined in the General Appropriations Act and distribute that
amount for programs under Subchapter A, Chapter 33. A program
established under that subchapter is required only in school
districts in which the program is financed by funds distributed
under this subsection [section] or other funds distributed by the
commissioner for a program under that subchapter. In distributing
those funds, preference shall be given to a school district that
received funds for a program under this subsection for the
preceding school year.
(j) The commissioner shall coordinate any [the] funds
withheld under Subsection (i) and any other funds available for the
program and [shall] distribute those funds. To receive available
funds for the program, a school district must apply to the
commissioner. In distributing any funds under this subsection, the
[The] commissioner shall give a preference to the districts that
apply that have the highest concentration of at-risk students. For
each school year that a school district receives funds under this
subsection [section], the district shall allocate an amount of
local funds for school guidance and counseling programs that is
equal to or greater than the amount of local funds that the school
district allocated for that purpose during the preceding school
year.
(k) After deducting any [the] amount withheld under
Subsection (i) from the total amount appropriated for the allotment
under Subsection (a), the commissioner shall reduce each district's
tier one allotments in the same manner described for a reduction in
allotments under Section 42.253.
(l) From the total amount of funds appropriated for
allotments under this section, the commissioner may [shall], each
fiscal year, withhold an [the] amount not more than [of] $2.5
million for transfer to the investment capital fund under Section
7.024.
(n) After deducting any [the] amount withheld under
Subsection (l) from the total amount appropriated for the allotment
under Subsection (a), the commissioner shall reduce each district's
allotment under Subsection (a) proportionately and shall allocate
funds to each district accordingly.
(p) The commissioner may [shall:
[(1)] withhold, from the total amount of funds
appropriated for allotments under this section, an amount not to
exceed five percent of the amounts allocated under this section and
distribute that amount for [sufficient to finance] extended year
programs under Section 29.082. In distributing any funds under
this subsection, the commissioner shall [not to exceed five percent
of the amounts allocated under this section; and
[(2)] give priority to applications for extended year
programs to districts with high concentrations of educationally
disadvantaged students.
SECTION 17. Subchapter E, Chapter 42, Education Code, is
amended by adding Section 42.2516 to read as follows:
Sec. 42.2516. ADDITIONAL AID FOR 2003-2004 AND 2004-2005
SCHOOL YEARS. (a) For the 2003-2004 and 2004-2005 school years, in
addition to any other state aid to which a school district is
entitled under this chapter, a district is entitled to an amount
equal to the product of the number of students in average daily
attendance in the district multiplied by $150.
(b) A school district that is otherwise ineligible for state
aid under this chapter is entitled to state aid under this section.
A school district that is required to take action under Chapter 41
to reduce its wealth per student to the equalized wealth level is
entitled to:
(1) a credit, in the amount of the state aid to which
the district is entitled under this section, against the total
amount required under Section 41.093 for the district to purchase
attendance credits; and
(2) if the amount of state aid to which the district is
entitled under this section exceeds the total amount required under
Section 41.093 for the district to purchase sufficient attendance
credits to reduce its wealth per student to the equalized wealth
level, state aid in an amount equal to the difference between the
state aid to which the district is entitled under this section and
the credit applied under Subdivision (1).
(c) In addition to any aid established by Subsection (a),
for the 2003-2004 and 2004-2005 school years, a school district
with less than 5,000 students in average daily attendance and a
wealth per student that does not exceed the equalized wealth level
under Section 41.002 is also entitled to additional funding
determined as follows: Multiply 0.65 times the amount calculated
when $150 times the district's average daily attendance is
subtracted from $112 times the district's weighted average daily
attendance.
(d) This subsection applies only to a current employee of a
school district who is entitled to the minimum salary under Section
21.402, who was employed by that district during the 2002-2003
school year, and who received funds under Article 3.50-8, Insurance
Code, during the 2002-2003 school year. For the 2003-2004 school
year, a school district shall ensure that each employee to whom this
subsection applies and who is employed by the district receives the
difference, if any, between $1,000 and the amount per employee that
the district receives under other law for purposes of Article
3.50-8, Insurance Code, for employees to whom this subsection
applies. A district employee may not bring a cause of action
against a district under this subsection on the basis of the amount
paid to the employee under this subsection if the employee's total
salary for the 2003-2004 school year, including amounts paid for
purposes of Article 3.50-8, Insurance Code, is equal to or greater
than the employee's base salary for the 2002-2003 school year,
including any career ladder supplement, plus any money paid to or
used on behalf of the employee under Article 3.50-8, Insurance
Code.
(e) This section expires September 1, 2005.
SECTION 18. Subchapter E, Chapter 42, Education Code, is
amended by adding Section 42.2517 to read as follows:
Sec. 42.2517. EXCESS FUNDS FOR COST OF EDUCATION
ADJUSTMENT. (a) If the commissioner determines that the amount
appropriated for purposes of the Foundation School Program exceeds
the amount to which school districts are entitled under this
chapter, the commissioner may:
(1) adjust each district's cost of education
adjustment under Section 42.102 to reflect current uncontrollable
variations in the cost of education, particularly the cost of
providing salaries and benefits to classroom teachers; and
(2) provide funding under this chapter based on the
cost of education index adjusted under Subdivision (1).
(b) If the amount available under Subsection (a) is not
sufficient to provide funding based on the cost of education index
adjusted under Subsection (a)(1), the commissioner shall rank
districts by the increase in the cost of education adjustment
applicable to each district under this section and shall provide
funding under this section to districts in descending order of the
amount of increase in the cost of education adjustment applicable
to districts under this section, beginning with the district that
has the greatest increase in the cost of education adjustment,
until no funds are available for purposes of this section.
SECTION 19. Section 42.253(b), Education Code, is amended
to read as follows:
(b) Except as provided by this subsection, the commissioner
shall base the determinations under Subsection (a) on the estimates
provided to the legislature under Section 42.254, or, if the
General Appropriations Act provides estimates for that purpose, on
the estimates provided under that Act, for each school district for
each school year. The commissioner shall reduce the entitlement of
each district that has a final taxable value of property for the
second year of a state fiscal biennium that is higher than the
estimate under Section 42.254 or the General Appropriations Act, as
applicable. A reduction under this subsection may not reduce the
district's entitlement below the amount to which it is entitled at
its actual taxable value of property. [The sum of the reductions
under this subsection may not be greater than the amount necessary
to fully fund the entitlement of each district.]
SECTION 20. Section 42.259, Education Code, is amended by
adding Subsection (g) to read as follows:
(g) Notwithstanding Subsections (c)(8) and (d)(3), the
payment from the foundation school fund to a category 2 school
district or category 3 school district for August 2005 shall be made
after September 5, 2005, but not later than September 10, 2005.
This subsection expires September 15, 2005.
SECTION 21. Section 43.001(b), Education Code, is amended
to read as follows:
(b) The available school fund, which shall be apportioned
annually to each county according to its scholastic population,
consists of:
(1) the interest and dividends arising from any
securities or funds belonging to the permanent school fund, as
determined in accordance with the accrual basis of accounting;
(2) all interest derivable from the proceeds of the
sale of land set apart for the permanent school fund;
(3) all money derived from the lease of land belonging
to the permanent school fund;
(4) one-fourth of all revenue derived from all state
occupation taxes, exclusive of delinquencies and cost of
collection;
(5) one-fourth of revenue derived from state gasoline
and special fuels excise taxes as provided by law; and
(6) all other appropriations to the available school
fund made by the legislature for public school purposes.
SECTION 22. Chapter 43, Education Code, is amended by
adding Section 43.020 to read as follows:
Sec. 43.020. TREATMENT OF ACCRUED INCOME. All interest and
dividends accruing from the investments of the permanent school
fund shall be deposited to the credit of the available school fund
in accordance with the accrual basis of accounting. Funds
recognized under this section are considered part of the available
school fund and may be appropriated as provided by Section 5,
Article VII, Texas Constitution.
SECTION 23. Section 46.033, Education Code, is amended to
read as follows:
Sec. 46.033. ELIGIBLE BONDS. Bonds, including bonds issued
under Section 45.006, are eligible to be paid with state and local
funds under this subchapter if:
(1) the district made payments on the bonds during the
2002-2003 [2000-2001] school year or taxes levied to pay the
principal of and interest on the bonds were included in the
district's audited debt service collections for that school year;
and
(2) the district does not receive state assistance
under Subchapter A for payment of the principal and interest on the
bonds.
SECTION 24. Section 46.034, Education Code, is amended by
amending Subsection (c) and adding Subsections (d) and (e) to read
as follows:
(c) If the amount required to pay the principal of and
interest on eligible bonds in a school year is less than the amount
of payments made by the district on the bonds during the 2002-2003
[2000-2001] school year or the district's audited debt service
collections for that school year, the district may not receive aid
in excess of the amount that, when added to the district's local
revenue for the school year, equals the amount required to pay the
principal of and interest on the bonds.
(d) Notwithstanding any other provision of this chapter, if
the appropriation to support newly eligible bonds for the 2003-2004
school year and the 2004-2005 school year is not sufficient to
provide the state aid that school districts are entitled to under
Section 46.032, the commissioner is directed to reduce the $35
guaranteed level of state and local support per student per cent of
tax effort for newly eligible debt only to the level necessary to
fund the sum of the allotments within the appropriated amount. The
guaranteed level for eligible debt through the 2000-2001 school
year is not affected by this adjustment. The commissioner shall
make this determination as soon as practicable, prior to the
beginning of the school year. The decision of the commissioner is
final and may not be appealed.
(e) Subsection (d) and this subsection expire September 1,
2005.
SECTION 25. Section 53.47(a)(6), Education Code, is amended
to read as follows:
(6) "Qualified nonprofit corporation" means a
nonprofit corporation:
(A)(i) that issued bonds on or after January 1,
1990, and before January 1, 2001, that qualified as qualified
student loan bonds under Section 144(b), Internal Revenue Code of
1986, as amended; or
(ii) that issues bonds the proceeds of
which are used to refund bonds issued on or after January 1, 1990,
and before January 1, 2001, that qualified as qualified student
loan bonds under Section 144(b), Internal Revenue Code of 1986, as
amended; or
(B) that the office of the governor, in
consultation with the state student loan guaranty agency or any
other public or private entity the office of the governor considers
appropriate, has determined meets a need for student loan financing
that existing qualified nonprofit corporations cannot meet, which
determination may include information provided by the nonprofit
corporation's plan for doing business that should include
documented limitations in:
(i) the geographic coverage of existing
qualified nonprofit corporations in the nonprofit corporation's
proposed area of service;
(ii) the willingness of existing qualified
nonprofit corporations to serve the eligible lenders in the
proposed area of service; and
(iii) the ability of existing qualified
nonprofit corporations to serve the eligible lenders in the
proposed area of service.
SECTION 26. Section 53.47, Education Code, is amended by
adding Subsection (l) to read as follows:
(l) The governing body of a city by ordinance or resolution
may authorize the incorporation of a nonprofit corporation under
this chapter to act on behalf of the city as its duly constituted
instrumentality for the purpose of exercising the powers set forth
in this subsection. On approval by the city, the nonprofit
corporation is authorized to issue its revenue bonds and to loan the
proceeds of the bonds to an entity that has assumed the outstanding
bond obligations of a nonprofit corporation, such loan being for
the limited purpose of refunding the outstanding bonds. In issuing
the bonds, the nonprofit corporation is considered to be acting on
behalf of the city by which it was created. The bonds to be refunded
must have been originally issued as "qualified scholarship funding
bonds," as defined by Section 150(d)(2), Internal Revenue Code of
1986, as amended, by a nonprofit corporation that was acting
pursuant to Subsection (f) and that subsequently made the election
permitted under Section 150(d)(3), Internal Revenue Code of 1986,
as amended. Any refunding bonds shall be solely the obligation of
the nonprofit corporation and shall not be or constitute a debt or
obligation of the city. The ordinance or resolution of the city
authorizing the incorporation of the corporation must approve the
articles of incorporation and any amendments to the articles of
incorporation. On dissolution of the corporation, title to all
property owned by the corporation shall be vested in and become the
property of the city. A corporation may be incorporated under this
chapter by filing its articles of incorporation with the secretary
of state in the manner prescribed for the incorporation of
nonprofit corporations under the Texas Non-Profit Corporation Act
(Article 1396-1.01 et seq., Vernon's Texas Civil Statutes). On
filing of the articles of incorporation, the secretary of state
shall issue a certificate of incorporation showing that the
corporation is incorporated under this chapter. Except to the
extent provided by this section, Sections 53.131, 53.14, 53.15,
53.31, 53.32, 53.35(a), and 53.39 apply to and govern such
corporation and its procedures and bonds. In addition to the
specific powers granted under this subsection, the corporation
shall have all powers granted under the Texas Non-Profit
Corporation Act (Article 1396-1.01 et seq., Vernon's Texas Civil
Statutes) that are necessary, incidental, or subordinate in
carrying out the purposes authorized in this subsection.
SECTION 27. Section 62.025, Education Code, is amended by
amending Subsection (a) and adding Subsections (g) and (h) to read
as follows:
(a) Except as provided by Subsection (g), not [Not] later
than November 1 of each state fiscal year, the comptroller shall
deposit the first $50 million that comes to the state at the
beginning of each state fiscal year and that is not dedicated by
other law as follows:
(1) except as provided by Subsections (d) and (e), an
amount equal to the portion of the total return on all investment
assets of the higher education fund in the preceding state fiscal
year computed by multiplying that total return by the percentage of
the total return on all investment assets of the permanent fund for
tobacco education and enforcement that constitutes available
earnings as determined by the comptroller under Section 403.1068,
Government Code, in that year must be deposited to the credit of the
Texas excellence fund established under Subchapter C; and
(2) the remaining amount must be deposited to the
credit of the higher education fund.
(g) The comptroller may not make the deposit required by
Subsection (a)(2) in a fiscal year if:
(1) as of October 1 of that year, the comptroller
estimates that the anticipated state revenue for the following
biennium is less than the estimated revenue for the current
biennium; or
(2) the legislature determines in the General
Appropriations Act that the deposit should not be made because of
the state's fiscal condition.
(h) The comptroller shall make the deposit required by
Subsection (a)(1) to the Texas excellence fund not later than
November 1 of each fiscal year even if a deposit is not made to the
higher education fund under Subsection (a)(2).
SECTION 28. Subchapter I, Chapter 88, Education Code, is
amended by adding Sections 88.703 and 88.704 to read as follows:
Sec. 88.703. SUNSET PROVISION. The Texas Veterinary
Medical Diagnostic Laboratory is subject to Chapter 325, Government
Code (Texas Sunset Act). Unless continued in existence as provided
by that chapter, the laboratory is abolished and this subchapter
expires September 1, 2007.
Sec. 88.704. FEES. The Texas Veterinary Medical Diagnostic
Laboratory may charge and collect fees for goods and services the
laboratory provides to any person, including a governmental entity.
SECTION 29. Section 264.756(a), Family Code, is amended to
read as follows:
(a) The department shall develop and implement an equitable
formula for the funding of local Communities In Schools programs.
[The formula may provide for the reduction of funds annually
contributed by the state to a local program by an amount not more
than 50 percent of the amount contributed by the state for the first
year of the program.] The formula must consider the financial
resources of individual communities and school districts. [Savings
accomplished through the implementation of the formula may be used
to extend services to counties and municipalities currently not
served by a local program or to extend services to counties and
municipalities currently served by an existing local program.]
SECTION 30. Effective September 1, 2003, Section
1575.203(a), Insurance Code, as effective June 1, 2003, is amended
to read as follows:
(a) Each state fiscal year, each active employee shall, as a
condition of employment, contribute to the fund an amount equal to
0.5 [0.25] percent of the employee's salary.
SECTION 31. Effective September 1, 2004, Section
1575.203(a), Insurance Code, as effective June 1, 2003, is amended
to read as follows:
(a) Each state fiscal year, each active employee shall, as a
condition of employment, contribute to the fund an amount equal to
0.75 [0.25] percent of the employee's salary.
SECTION 32. Section 1601.104(c), Insurance Code, as
effective June 1, 2003, is amended to read as follows:
(c) Automatic coverage as described under this section
begins on the 90th day after the employee's first date of
employment.
SECTION 33. Subchapter E, Chapter 1601, Insurance Code, as
effective June 1, 2003, is amended by adding Section 1601.2071 to
read as follows:
Sec. 1601.2071. NEW EMPLOYEE WAITING PERIOD. A system may
not contribute an amount to the cost of coverage under this chapter
to an employee before the 90th day after the employee's first date
of employment.
SECTION 34. Section 2, Article 3.50-8, Insurance Code, is
amended by amending Subsections (a) and (c) and adding Subsection
(e) to read as follows:
(a) Each year, the trustee shall deliver to each school
district, including a school district that is ineligible for state
aid under Chapter 42, Education Code, each other educational
district that is a member of the Teacher Retirement System of Texas,
each participating charter school, and each regional education
service center state funds in an amount, as determined by the
trustee, equal to:
(1) the product of the number of active full-time
professional employees, other than administrative professional
employees, employed by the district, school, or service center
multiplied by $550 [$1,000] or a greater amount as provided by the
General Appropriations Act for purposes of this article;
(2) the product of the number of active full-time
educational support employees employed by the district, school, or
service center multiplied by $300 or a greater amount as provided by
the General Appropriations Act for purposes of this article; and
(3) the product of the number of active part-time
employees employed by the district, school, or service center
multiplied by $200 or a greater amount as provided by the General
Appropriations Act for purposes of this article.
(c) The trustee shall distribute funds under this article in
equal monthly installments. The monthly installments are payable
during the first week of the month following the month in which the
active employees were employed. The trustee is entitled to recover
from a school district, other educational district, participating
charter school, or regional education service center any amount
distributed under this article to which the district, school, or
service center was not entitled.
(e) In this section:
(1) "Full-time active employee" and "part-time active
employee" have the meanings assigned by trustee rules.
(2) "Professional employee" means a teacher, nurse,
counselor, librarian, or other employee required to be certified or
licensed as described by Section 21.003, Education Code.
SECTION 35. Article 3.50-8, Insurance Code, is amended by
adding Section 2A to read as follows:
Sec. 2A. WAITING PERIOD. An employee is not eligible for
health coverage or compensation supplementation under this article
until the 90th day after the date the employee is employed by a
school district, other educational district, participating charter
school, or regional education service center.
SECTION 36. Section 57.046, Utilities Code, is amended by
amending Subsection (a) and adding Subsection (c) to read as
follows:
(a) The board shall use money in the public schools account
to:
(1) to the extent directed in the General
Appropriations Act, fund the technology allotment under Section
32.005, Education Code; and
(2) award grants and loans in accordance with this
subchapter to fund:
(A) [(1)] equipment for public schools,
including computers, printers, computer labs, and video equipment;
and
(B) [(2)] intracampus and intercampus wiring to
enable those public schools to use the equipment.
(c) Section 57.047(d) does not apply to the use of money in
the public schools account for the purpose specified by Subsection
(a)(1).
SECTION 37. (a) Notwithstanding any other provision of
law, the commissioner of education may contract for the performance
of or delegate all or part of the duties assigned to the
commissioner or the Texas Education Agency under the Texas Driver
and Traffic Safety Education Act (Article 4413(29c), Vernon's Texas
Civil Statutes) and Section 29.902, Education Code, to a private or
public entity in accordance with this section.
(b) The commissioner shall enter into a written agreement
that describes the responsibilities of the commissioner and agency
and the entity to which a function is delegated or contracted.
(c) Any rule of the commissioner enacted under the Texas
Driver and Traffic Safety Education Act remains in effect after a
delegation or contract authorized under this section until amended
by the commissioner. Any investigation, sanction, fine, or
administrative or judicial proceeding in progress on the date of
delegation or effective date of a contract shall continue in effect
without regard to the delegation or contract. Any fees due under
the Texas Driver and Traffic Safety Education Act shall be
deposited to the credit of the Texas Education Agency and used to
support activities of the agency and to pay reasonable expenses of
the entity to which a function is delegated or contracted under this
section.
(d) An entity to which authority under the Texas Driver and
Traffic Safety Education Act or Section 29.902, Education Code, is
delegated is considered a state agency for purposes of immunity.
(e) The commissioner may make rules to implement this
section. A reference in other law to the commissioner of education
or the Texas Education Agency with regard to duties or actions under
the Texas Driver and Traffic Safety Education Act or Section
29.902, Education Code, shall mean an entity delegated or
contracted a function by the commissioner to the extent necessary
to implement the delegation or contract.
SECTION 38. (a) Sections 8.051(a), 8.121, and 53.47(k),
Education Code, are repealed.
(b) Section 1575.204, Insurance Code, as effective June 1,
2003, is repealed.
SECTION 39. Effective September 1, 2003, the comptroller of
public accounts shall transfer $42 million from the Texas school
employees uniform group coverage trust fund established under
Section 8, Article 3.50-7, Insurance Code, to the retired school
employees group insurance fund described by Subchapter G, Chapter
1575, Insurance Code, as effective June 1, 2003, to compensate the
retired school employees group insurance fund for money transferred
from that fund under Section 4.01, Chapter 1187, Acts of the 77th
Legislature, Regular Session, 2001.
SECTION 40. (a) The repeal by Section 1 of this Act of
Section 45.002, Education Code, does not impair any obligation
created by the issuance or execution of any lawful agreement or
evidence of indebtedness before September 1, 2004, that matures
after that date and that is payable from the levy and collection of
a maintenance tax under that section or another law, and an
independent school district may, on and after September 1, 2004,
levy, assess, and collect a maintenance tax, at a rate not greater
than the rate required to pay such obligations but only for so long
as those obligations remain outstanding and unpaid.
(b) Notwithstanding the repeal by Section 1 of this Act of
Chapters 41, 42, and 46, Education Code, and Section 45.002,
Education Code, a school district that, before September 1, 2004,
issues bonds, notes, or other evidences of indebtedness under
Chapter 45, Education Code, or other applicable law or enters into a
lease-purchase agreement under Subchapter A, Chapter 271, Local
Government Code, may continue, before, on, and after September 1,
2004, to receive state assistance with respect to such payments to
the same extent the district would have been entitled to receive the
assistance under Chapter 42 or 46, Education Code, as those
chapters existed before repeal by this Act, and the former law is
continued in effect for that purpose. The commissioner of
education may adopt rules to implement this subsection.
(c) The repeal by Section 1 of this Act of Chapters 41, 42,
and 46, Education Code, and Section 45.002, Education Code, does
not limit, modify, or eliminate the authority of a school district
to:
(1) issue or execute bonds, public securities, or
other obligations under Chapter 45, Education Code, or other law,
either before, on, or after September 1, 2004; or
(2) levy, assess, and collect, before, on, or after
September 1, 2004, ad valorem taxes at the full rate and in the full
amount authorized by Section 45.002, Education Code, and necessary
to pay the bonds, public securities, or other obligations when due
and payable.
(d) Before September 1, 2004, the commissioner of education
may not refuse to grant assistance to a school district under
Chapter 42 or 46, Education Code, in connection with public
securities, lease-purchase agreements, credit agreements, or other
obligations, including those described by Subchapter A, Chapter
271, Local Government Code, on the basis that the district's
authority to levy a maintenance tax is repealed effective September
1, 2004.
SECTION 41. The commissioner of education shall adopt rules
and establish the classroom supply reimbursement program as
required by Section 21.413, Education Code, as added by this Act,
not later than August 1, 2005.
SECTION 42. The change in law made by this Act to Section 2,
Article 3.50-8, Insurance Code, applies to a monthly installment to
be paid on or after September 1, 2003.
SECTION 43. 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, this Act takes effect
September 1, 2003, except as otherwise provided by this Act.