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H.B. No. 3459
AN ACT
relating to fiscal matters involving certain governmental
educational entities, including public school finance, program
compliance monitoring by the Texas Education Agency, amounts
withheld from and the use of compensatory education allotments, the
public school technology allotment, the accounting for the
permanent school fund, employee benefits provided by certain
educational entities, the uses of the telecommunications
infrastructure fund, and participation in a multijurisdictional
lottery game.
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are repealed: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.
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), 29.010(a), 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 B, C, D, E, F, H, or I, Chapter 29,
Subchapter A, Chapter 37, 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 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 11.151, Education Code, is amended by
adding Subsection (e) to read as follows:
(e) A school district may request the assistance of the
attorney general on any legal matter. The district must pay any
costs associated with the assistance.
SECTION 6. Section 11.164, Education Code, is amended to
read as follows:
Sec. 11.164. RESTRICTING WRITTEN INFORMATION [REPORTS].
(a) The [On an annual basis, the] board of trustees of each school
district shall limit redundant requests for information and[, after
soliciting recommendations from each campus-level committee and
the district-level committee, consider] the number and length of
written reports that a classroom teacher is [employees of the
district are] required to prepare. A classroom teacher may not be
required to prepare any written information other than:
(1) any report concerning the health, safety, or
welfare of a student;
(2) a report of a student's grade on an assignment or
examination;
(3) a report of a student's academic progress in a
class or course;
(4) a report of a student's grades at the end of each
grade reporting period;
(5) a textbook report;
(6) a unit or weekly lesson plan that outlines, in a
brief and general manner, the information to be presented during
each period at the secondary level or in each subject or topic at
the elementary level;
(7) an attendance report;
(8) any report required for accreditation review;
(9) any information required by a school district that
relates to a complaint, grievance, or actual or potential
litigation and that requires the classroom teacher's involvement;
or
(10) any information specifically required by law,
rule, or regulation.
(b) The board of trustees shall review paperwork
requirements imposed on classroom teachers and shall transfer to
existing noninstructional staff a reporting task that can
reasonably be accomplished by that staff.
(c) This section does not preclude a school district from
collecting essential information, in addition to information
specified under Subsection (a), from a classroom teacher on
agreement between the classroom teacher and the district.
SECTION 7. Section 13.005(a), Education Code, is amended to
read as follows:
(a) Except as provided by this section or by a local
consolidation agreement under Section 13.158, the annexation of all
or part of the territory of one district to another is effective on
the first July 1 that is more than 30 days after the date of the
order or ordinance accomplishing the annexation or of the
declaration of the results of an election at which the transfer is
approved.
SECTION 8. Section 13.152, Education Code, is amended to
read as follows:
Sec. 13.152. RESOLUTION OR PETITION. Consolidation is
initiated in each district proposed to be consolidated by either a
resolution adopted by the board of trustees of the [each] district
or a petition requesting an election on the question that is signed
by the required number of registered voters of the district [each of
the districts proposed to be consolidated]. Each district is not
required to use the same method to initiate consolidation.
SECTION 9. Section 13.153, Education Code, is amended by
amending Subsection (b) and adding Subsection (c) to read as
follows:
(b) If no local consolidation agreement is submitted under
Section 13.158, the [The] ballot in the election shall be printed to
permit voting for or against the proposition: "Consolidation of
(name of school districts) into a single school district."
(c) If a local consolidation agreement is submitted under
Section 13.158, the ballot in the election shall be printed to
permit voting for or against the proposition: "Consolidation of
(name of school districts) into a single school district under a
local consolidation agreement."
SECTION 10. Sections 13.155(b) and (c), Education Code, are
amended to read as follows:
(b) Except as provided by Subsection (c) or by a local
consolidation agreement under Section 13.158, the board of trustees
of the school district having the greatest membership on the last
day of the school year preceding the consolidation serves as the
board of trustees of the consolidated district until the next
regular election of trustees, at which time the consolidated
district shall elect a board of trustees.
(c) Except as provided by a local consolidation agreement
under Section 13.158, if [If] the membership on the last day of the
school year preceding the consolidation in the district with the
largest membership is more than five times that of the other
district or districts consolidating with it, the trustees of the
district with the largest membership continue to serve for the
terms for which they have been elected and only the vacancies, as
they occur, are filled from the consolidated district.
SECTION 11. Subchapter D, Chapter 13, Education Code, is
amended by adding Sections 13.158 and 13.159 to read as follows:
Sec. 13.158. LOCAL CONSOLIDATION AGREEMENT. (a) Before
issuing an order for an election under Section 13.153, the boards of
trustees of the districts to be consolidated may draft a local
consolidation agreement to be submitted to the registered voters in
each district. An agreement must set out the composition and method
of election of the consolidated board of trustees. The identical
agreement must be submitted to the registered voters of each
district.
(b) A local consolidation agreement may provide the
following:
(1) an effective date that is not more than one year
after the date of the consolidation election;
(2) a schedule to elect the board of trustees of the
consolidated district before or after the effective date of
consolidation;
(3) that the consolidated district educate particular
grades within the boundaries of a district being consolidated;
(4) that the consolidated district maintain a specific
campus in operation;
(5) that if the votes cast in some districts, but not
all districts, show a majority voting in favor of the
consolidation, the districts receiving a favorable vote may
consolidate;
(6) that a majority of the votes cast in each district
must be in favor of consolidation for there to be a consolidation;
or
(7) any other provision consistent with state and
federal law.
(c) Not later than 30 days before a consolidation election
is held, the boards of trustees of the districts to be consolidated
may amend the local consolidation agreement. After a successful
election to consolidate, the local consolidation agreement may not
be amended for five years following the effective date of
consolidation, unless a shorter period is set out in the agreement.
After that time, the agreement may be amended only by unanimous vote
of the board of trustees of the district.
(d) The commissioner may waive a requirement under this
section or Section 13.159 on application of the boards of trustees
of all districts proposed for consolidation.
Sec. 13.159. PUBLIC INSPECTION AND HEARING. (a) A local
consolidation agreement under Section 13.158 must be made available
for public inspection during regular business hours at the central
administration building of each district for at least 25 days
before the consolidation election.
(b) Each district shall hold a public hearing to allow
interested persons to present comments related to the local
consolidation agreement. If the agreement is amended following a
public hearing, before the consolidation election each district
shall hold another public hearing to consider the amendment.
(c) Each district shall provide notice of each public
hearing to the public.
SECTION 12. Section 21.253, Education Code, is amended to
read as follows:
Sec. 21.253. REQUEST FOR HEARING. (a) A teacher must file
a written request for a hearing under this subchapter with the
commissioner not later than the 15th day after the date the teacher
receives written notice of the proposed action. The teacher must
provide the district with a copy of the request and must provide the
commissioner with a copy of the notice.
(b) The parties may agree in writing to extend by not more
than 10 days the deadline for requesting a hearing.
SECTION 13. Sections 21.254(c), (d), and (e), Education
Code, are amended to read as follows:
(c) If a hearing examiner is not selected by the parties to a
pending case under Subsection (e), the [The] commissioner shall
assign a hearing examiner to the [a pending] case not earlier than
the sixth business day and not later than the 10th business day
after the date on which the commissioner receives the request for a
hearing. When a hearing examiner has been assigned to a case, the
commissioner shall immediately notify the parties.
(d) The parties may agree to reject a hearing examiner for
any reason and either [Either] party is entitled to reject the
assigned hearing examiner for cause. A rejection must be in writing
and filed with the commissioner not later than the third day after
the date of notification of the hearing examiner's assignment. If
the parties agree to reject the hearing examiner or if the
commissioner determines that one [the] party has good cause to
reject the hearing examiner, the commissioner shall assign another
hearing examiner as provided by Subsection (b). If neither party
makes a timely rejection, the assignment is final.
(e) After the teacher receives the notice of the proposed
action, the parties by agreement may select a hearing examiner from
the list maintained by the commissioner under Subsection (a) or a
person who is not certified to serve as a hearing examiner. A
person who is not a certified hearing examiner may be selected only
if the person is [under this subsection must be] licensed to
practice law in this state. If the parties agree on a hearing
examiner, the parties shall, before the date the commissioner is
permitted to assign a hearing examiner, notify the commissioner in
writing of the agreement, including [before the teacher files a
request for hearing under Section 21.253, the request shall
include] the name of the hearing examiner selected. [If the parties
agree on a hearing examiner after the teacher files the request for
hearing, the teacher shall promptly notify the commissioner in
writing of the name of the hearing examiner.]
SECTION 14. Sections 21.257(a) and (c), Education Code, are
amended to read as follows:
(a) Not later than the 60th [45th] day after the date on
which the commissioner receives a teacher's written request for a
hearing, the hearing examiner shall complete the hearing and make a
written recommendation that:
(1) includes proposed findings of fact and conclusions
of law; and
(2) may include a proposal for granting relief.
(c) The parties may agree in writing to extend by not more
than 45 days [waive] the right to a recommendation by the date
prescribed by Subsection (a). A hearing under this section may not
be held on a Saturday, Sunday, or a state or federal holiday, unless
all parties agree.
SECTION 15. Subchapter G, Chapter 21, Education Code, is
amended by adding Section 21.3041 to read as follows:
Sec. 21.3041. REHEARING BY COMMISSIONER. (a) Not later
than the 20th day after the date the party or the party's
representative receives notice of the commissioner's decision
under Section 21.304, the party may file a request for rehearing.
(b) A request for rehearing is not required for a party to
appeal the commissioner's decision under Section 21.307.
(c) A request for rehearing is denied by operation of law if
the commissioner does not issue an order before the 45th day after
the date the party or the party's representative receives notice of
the commissioner's decision.
SECTION 16. Section 21.307(b), Education Code, is amended
to read as follows:
(b) An appeal under this section must be perfected not later
than the 30th day after:
(1) the date the party or the party's representative
receives [received] notice of the commissioner's decision or the
date on which the decision of the board of trustees is [was]
affirmed by operation of law if the commissioner fails [failed] to
issue a decision within the required period; or
(2) if a request for rehearing is filed under Section
21.3041, the date on which the request is denied by order of the
commissioner or by operation of law under Section 21.3041(c). [A
motion for rehearing is not required for the party to appeal.]
SECTION 17. 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 18. Subchapter A, Chapter 29, Education Code, is
amended by adding Section 29.0161 to read as follows:
Sec. 29.0161. CONTRACT WITH STATE OFFICE OF ADMINISTRATIVE
HEARINGS FOR SPECIAL EDUCATION DUE PROCESS HEARINGS. Not later
than December 1, 2003, the agency and the State Office of
Administrative Hearings shall jointly determine whether it would be
cost-effective for the agency to enter an interagency contract with
the office under which the office would conduct all or part of the
agency's special education due process hearings under 20 U.S.C.
Section 1415 and its subsequent amendments.
SECTION 19. 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
academic excellence indicators adopted under Section 39.051(a),
including the results of assessment instruments. 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 purposes 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 20. 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 21. 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 22. 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 $30 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 23. Section 32.033(a), Education Code, is amended
to read as follows:
(a) The agency, in coordination with institutions of higher
education and other public or private entities, may [shall]
maintain and expand, as needed, the telecommunications
capabilities of school districts and regional education service
centers. The agency shall design and implement a
telecommunications system for distance learning throughout the
state.
SECTION 24. Section 34.007(b), Education Code, is amended
to read as follows:
(b) In establishing and operating the transportation
system, the county or school district board:
(1) shall employ school bus drivers certified in
accordance with standards and qualifications adopted by the
Department of Public Safety; and
(2) may allow a parent to designate one of the
following locations [a child care facility, as defined by Section
42.002, Human Resources Code,] instead of the child's residence as
the regular location for purposes of obtaining transportation under
the system to and from the child's school, if the location is on an
approved route:
(A) a child-care facility, as defined by Section
42.002, Human Resources Code; or
(B) the residence of a grandparent of the child.
SECTION 25. 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 26. Section 39.051(f), Education Code, is amended
to read as follows:
(f) The [Beginning with the 2002-2003 school year, the]
indicator under Subsection (b)(1) must include the results of
assessment instruments required under Section 39.023(b). [Those
results may not be aggregated by grade level or subject area.]
SECTION 27. Sections 39.055(a) and (e), Education Code, are
amended to read as follows:
(a) The commissioner shall develop a process for auditing
school district dropout records electronically. The commissioner
shall also develop a system and standards for review of the audit or
use systems already available at the agency. The system must be
designed to identify districts that are at high risk of having
inaccurate dropout records and that, as a result, require on-site
monitoring of dropout records. If the electronic audit of a
district's dropout records indicates that a district is not at high
risk of having inaccurate dropout records, the district may not be
subject to on-site monitoring under this subsection. If the
risk-based system indicates that a district is at high risk of
having inaccurate dropout records, the district is entitled to an
opportunity to respond to the commissioner's determination before
on-site monitoring may be conducted. The district must respond not
later than the 30th day after the date the commissioner notifies the
district of the commissioner's determination. If the district's
response does not change the commissioner's determination that the
district is at high risk of having inaccurate dropout records or if
the district does not respond in a timely manner, the commissioner
shall order agency staff to conduct on-site monitoring of the
[board of trustees of each school district shall have the]
district's dropout records [audited annually at district expense by
a public accountant or certified public accountant who:
[(1) is certified or registered, as appropriate, and
licensed under Chapter 901, Occupations Code;
[(2) has successfully completed training provided by
the agency in auditing school dropout records; and
[(3) is not an employee of the district].
(e) [The agency shall review each report of an audit of
dropout records.] The commissioner shall notify the board of
trustees of a school district of any objection the commissioner has
to the district's dropout data [report], any violation of sound
accounting practices or of a law or rule revealed by the data
[report], or any recommendation by the commissioner concerning the
data [report]. If the data reflect [report reflects] that a penal
law has been violated, the commissioner shall notify the county
attorney, district attorney, or criminal district attorney, as
appropriate, and the attorney general. The commissioner is
entitled to access to all district records the commissioner
considers necessary or appropriate for the review, analysis, or
approval of district dropout data [a report].
SECTION 28. (a) 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 school year [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, 2004.
(b) This section prevails over any other Act of the 78th
Legislature, Regular Session, 2003, amending Section 41.0021(a) or
(e), Education Code.
SECTION 29. Section 41.033, Education Code, is amended to
read as follows:
Sec. 41.033. GOVERNANCE PLAN. (a) The agreement among the
consolidating districts may include a governance plan designed to
preserve community-based and site-based decision making within the
consolidated district, including the delegation of specific powers
of the governing board of the district other than the power to levy
taxes, including a provision authorized by Section 13.158(b).
(b) The governance plan may provide for a transitional board
of trustees during the first year after consolidation, but
beginning with the next year the board of trustees must be elected
from within the boundaries of the consolidated district [from
single member districts drawn in accordance with the procedures
provided by Section 11.052]. If the consolidating districts elect
trustees from single-member districts, the consolidated district
must adopt a plan to elect its board of trustees from single-member
districts.
SECTION 30. Section 42.152, Education Code, is amended by
amending Subsections (c), (q), and (r) and adding Subsections
(q-1)-(q-4), (u), and (v) to read as follows:
(c) Funds allocated under this section shall be used [only]
to fund supplemental programs and services designed to eliminate
any disparity in performance on assessment instruments
administered under Subchapter B, Chapter 39, or disparity in the
rates of high school completion between students at risk of
dropping out of school, as defined by Section 29.081, and all other
students. Specifically, the funds, other than an indirect cost
allotment established under State Board of Education rule, which
may not exceed 15 percent, may be used [only] to meet the costs of
providing a compensatory, intensive, or accelerated instruction
program under Section 29.081 or an alternative education program
established under Section 37.008 or to support a program eligible
under Title I of the Elementary and Secondary Education Act of 1965,
as provided by Pub. L. No. 103-382 and its subsequent amendments,
and by federal regulations implementing that Act, at a campus at
which at least 40 [50] percent of the students are educationally
disadvantaged. In meeting the costs of providing a compensatory,
intensive, or accelerated instruction program under Section
29.081, a district's compensatory education allotment shall [may]
be used [only] for costs supplementary to the regular education
program, such as costs for program and student evaluation,
instructional materials and equipment and other supplies required
for quality instruction, supplemental staff expenses, salary for
teachers of at-risk students, smaller class size, and
individualized instruction. A home-rule school district or an
open-enrollment charter school must use funds allocated under
Subsection (a) for a purpose authorized in this subsection but is
not otherwise subject to Subchapter C, Chapter 29. Notwithstanding
any other provisions of this section:
(1) to ensure that a sufficient amount of the funds
allotted under this section are available to supplement
instructional programs and services, no more than 18 percent of the
funds allotted under this section may be used to fund disciplinary
alternative education programs established under Section 37.008;
[and]
(2) the commissioner may waive the limitations of
Subdivision (1) upon an annual petition, by a district's board and a
district's site-based decision making committee, presenting the
reason for the need to spend supplemental compensatory education
funds on disciplinary alternative education programs under Section
37.008, provided that:
(A) the[. The] district [shall] in its petition
reports [report] the number of students in each grade level, by
demographic subgroup, not making satisfactory progress under the
state's assessment system; and
(B) the[. The] commissioner makes the [will make
this] waiver request information available annually to the public
on the agency's website; and
(3) for purposes of this subsection, a program
specifically designed to serve students at risk of dropping out of
school, as defined by Section 29.081, is considered to be a program
supplemental to the regular education program, and a district may
use its compensatory education allotment for such a program.
(q) The State Board of Education, with the assistance of the
state auditor and the comptroller, shall develop and implement by
rule [a] reporting and auditing systems [system] for district and
campus expenditures of compensatory education funds to ensure that
compensatory education funds, other than the indirect cost
allotment, are spent only to supplement the regular education
program as required by Subsection (c). The reporting requirements
shall be managed electronically to minimize local administrative
costs. A district shall submit the report required by this
subsection not later than the 150th day after the last day
permissible for resubmission of information required under Section
42.006.
(q-1) The commissioner shall develop a system to identify
school districts that are at high risk of having used compensatory
education funds other than in compliance with Subsection (c) or of
having inadequately reported compensatory education expenditures.
If a review of the report submitted under Subsection (q), using the
risk-based system, indicates that a district is not at high risk of
having misused compensatory education funds or of having
inadequately reported compensatory education expenditures, the
district may not be required to perform a local audit of
compensatory education expenditures and is not subject to on-site
monitoring under this section.
(q-2) If a review of the report submitted under Subsection
(q), using the risk-based system, indicates that a district is at
high risk of having misused compensatory education funds, the
commissioner shall notify the district of that determination. The
district must respond to the commissioner not later than the 30th
day after the date the commissioner notifies the district of the
commissioner's determination. If the district's response does not
change the commissioner's determination that the district is at
high risk of having misused compensatory education funds or if the
district does not respond in a timely manner, the commissioner
shall:
(1) require the district to conduct a local audit of
compensatory education expenditures for the current or preceding
school year;
(2) order agency staff to conduct on-site monitoring
of the district's compensatory education expenditures; or
(3) both require a local audit and order on-site
monitoring.
(q-3) If a review of the report submitted under Subsection
(q), using the risk-based system, indicates that a district is at
high risk of having inadequately reported compensatory education
expenditures, the commissioner may require agency staff to assist
the district in following the proper reporting methods or amending
a district or campus improvement plan under Subchapter F, Chapter
11. If the district does not take appropriate corrective action
before the 45th day after the date the agency staff notifies the
district of the action the district is expected to take, the
commissioner may:
(1) require the district to conduct a local audit of
the district's compensatory education expenditures; or
(2) order agency staff to conduct on-site monitoring
of the district's compensatory education expenditures.
(q-4) The commissioner, in the year following a local [an]
audit of compensatory education expenditures, shall withhold from a
district's foundation school fund payment an amount equal to the
amount of compensatory education funds the agency determines were
not used in compliance with Subsection (c). The commissioner shall
release to a district funds withheld under this subsection when the
district provides to the commissioner a detailed plan to spend
those funds in compliance with Subsection (c).
(r) The commissioner shall grant a one-year exemption from
the requirements of Subsections (q)-(q-4) [Subsection (g)] to a
school district in which the group of students who have failed to
perform satisfactorily in the preceding school year on an
assessment instrument required under Section 39.023(a), (c), or (l)
subsequently performs on those assessment instruments at a level
that meets or exceeds a level prescribed by commissioner rule. Each
year the commissioner, based on the most recent information
available, shall determine if a school district is entitled to an
exemption for the following school year and notify the district of
that determination.
(u) For the 2003-2004 and 2004-2005 school years,
notwithstanding the allotments and reductions otherwise required
or permitted by this section or Section 39.031, the legislature may
in the General Appropriations Act reduce the total amount of
funding for the compensatory education allotment by not more than
the sum of all of the changes, made to programs funded through
deductions to the compensatory education allotment to which a
district is otherwise entitled under Subsection (a), under H.B. No.
1, Acts of the 78th Legislature, Regular Session, 2003. After
deducting the amount of a reduction made as provided by this
subsection from the total amount computed for the allotment under
Subsection (a), the commissioner shall:
(1) reduce each district's tier one allotments in the
same manner described for a reduction in allotments under Section
42.253; and
(2) allocate funds to each district accordingly.
(v) This subsection and Subsection (u) expire on September
1, 2005.
SECTION 31. Section 42.154(a), Education Code, is amended
to read as follows:
(a) For each full-time equivalent student in average daily
attendance in an approved career and technology education program
in grades nine through 12 or in career and technology education
programs for students with disabilities in grades seven through 12,
a district is entitled to an annual allotment equal to the adjusted
basic allotment multiplied by a weight of 1.35 [1.37].
SECTION 32. Section 42.155(k), Education Code, is amended
to read as follows:
(k) Notwithstanding any other provision of this section,
the commissioner may not reduce the allotment to which a district or
county is entitled under this section because the district or
county provides transportation for an eligible student to and from
a child-care facility, as defined by Section 42.002, Human
Resources Code, or a grandparent's residence instead of the
student's residence, as authorized by Section 34.007, if the
transportation is provided within the approved routes of the
district or county for the school the student attends.
SECTION 33. 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 34. 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 35. Sections 42.259(c), (d), and (f), Education
Code, are amended to read as follows:
(c) Payments from the foundation school fund to each
category 2 school district shall be made as follows:
(1) 22 percent of the yearly entitlement of the
district shall be paid in an installment to be made on or before the
25th day of September of a fiscal year;
(2) 18 percent of the yearly entitlement of the
district shall be paid in an installment to be made on or before the
25th day of October;
(3) 9.5 percent of the yearly entitlement of the
district shall be paid in an installment to be made on or before the
25th day of November;
(4) 7.5 percent of the yearly entitlement of the
district shall be paid in an installment to be made on or before the
25th day of April;
(5) five percent of the yearly entitlement of the
district shall be paid in an installment to be made on or before the
25th day of May;
(6) 10 percent of the yearly entitlement of the
district shall be paid in an installment to be made on or before the
25th day of June;
(7) 13 percent of the yearly entitlement of the
district shall be paid in an installment to be made on or before the
25th day of July; and
(8) 15 percent of the yearly entitlement of the
district shall be paid in an installment to be made after the fifth
day of September and not later than the 10th day of September of the
calendar year following the calendar year of the payment made under
Subdivision (1) [on or before the 25th day of August].
(d) Payments from the foundation school fund to each
category 3 school district shall be made as follows:
(1) 45 percent of the yearly entitlement of the
district shall be paid in an installment to be made on or before the
25th day of September of a fiscal year;
(2) 35 percent of the yearly entitlement of the
district shall be paid in an installment to be made on or before the
25th day of October; and
(3) 20 percent of the yearly entitlement of the
district shall be paid in an installment to be made after the fifth
day of September and not later than the 10th day of September of the
calendar year following the calendar year of the payment made under
Subdivision (1) [on or before the 25th day of August].
(f) Except as provided by Subsection (c)(8) or (d)(3), any
[Any] previously unpaid additional funds from prior years owed to a
district shall be paid to the district together with the September
payment of the current year entitlement.
SECTION 36. 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 37. 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 38. Section 44.031(a), Education Code, is amended
to read as follows:
(a) Except as provided by this subchapter, all school
district contracts, except contracts for the purchase of produce or
vehicle fuel, valued at $25,000 or more in the aggregate for each
12-month period shall be made by the method, of the following
methods, that provides the best value for the district:
(1) competitive bidding;
(2) competitive sealed proposals;
(3) a request for proposals, for services other than
construction services;
(4) a catalogue purchase as provided by Subchapter B,
Chapter 2157, Government Code;
(5) an interlocal contract;
(6) a design/build contract;
(7) a contract to construct, rehabilitate, alter, or
repair facilities that involves using a construction manager;
(8) a job order contract for the minor construction,
repair, rehabilitation, or alteration of a facility; [or]
(9) the reverse auction procedure as defined by
Section 2155.062(d), Government Code; or
(10) the formation of a political subdivision
corporation under Section 304.001, Local Government Code.
SECTION 39. Section 45.201(4), Education Code, is amended
to read as follows:
(4) "Approved securities" means:
(A) bonds of this state or any agency or
political subdivision of this state;
(B) all evidences of indebtedness legally issued
by the board of trustees of the depositing school district;
(C) all debt securities that are a direct
obligation of the treasury of the United States;
(D) other obligations, including [all debt
securities, except] reducing principal balance securities, the
principal and interest of which are unconditionally guaranteed or
insured by, or backed [in the event of default] by the full faith
and credit of, this state or the United States or their respective
agencies and instrumentalities; and
(E) those securities provided for by Article 842,
Revised Statutes, and Section 1, Chapter 160, General Laws, Acts of
the 43rd Legislature, 1933 (Article 842a, Vernon's Texas Civil
Statutes).
SECTION 40. 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 41. 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 42. 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 43. Section 822.001, Government Code, is amended by
adding Subsections (c), (d), (e), and (f) to read as follows:
(c) Membership in the retirement system begins on the 91st
day after the first day a person is employed.
(d) A person who is reemployed after withdrawing
contributions for previous service credit begins membership on the
91st day after the first day the person is reemployed.
(e) Notwithstanding any other provision of law, a member may
establish credit only as provided by Section 823.406 for service
performed during the 90-day waiting period provided by Subsection
(c) or (d).
(f) Subsections (c), (d), and (e) and this subsection expire
September 1, 2005.
SECTION 44. Section 823.002, Government Code, is amended to
read as follows:
Sec. 823.002. SERVICE CREDITABLE IN A YEAR. (a) The board
of trustees by rule shall determine how much service in any year is
equivalent to one year of service credit, but in no case may all of a
person's service in one school year be creditable as more than one
year of service. Service that has been credited by the retirement
system on annual statements for a period of five or more years may
not be deleted or corrected because of an error in crediting unless
the error concerns three or more years of service credit or was
caused by fraud.
(b) The rules adopted by the board of trustees under
Subsection (a) must provide that the 90-day waiting periods
described by Sections 822.001(c) and (d) be applied with regard to
contributions during a member's first year of service under either
of those subsections in a manner that, to the greatest extent
possible, minimizes the cost to the retirement system. This
subsection expires September 1, 2005.
SECTION 45. Subchapter E, Chapter 823, Government Code, is
amended by adding Section 823.406 to read as follows:
Sec. 823.406. CREDIT PURCHASE OPTION FOR CERTAIN SERVICE.
(a) A member may establish membership service credit under this
section only for service performed during a 90-day waiting period
to become a member after beginning employment.
(b) A member may establish service credit under this section
by depositing with the retirement system, for each month of service
credit, the actuarial present value, at the time of deposit, of the
additional standard retirement annuity benefits that would be
attributable to the purchase of the service credit under this
section, based on rates and tables recommended by the retirement
system's actuary and adopted by the board of trustees.
(c) After a member makes the deposits required by this
section, the retirement system shall grant the member one month of
equivalent membership service credit for each month of credit
approved.
(d) The retirement system shall deposit the amount of the
actuarial present value of the service credit purchased in the
member's individual account in the employees saving account.
(e) The board of trustees may adopt rules to administer this
section.
SECTION 46. Section 2257.022, Government Code, is amended
to read as follows:
Sec. 2257.022. AMOUNT OF COLLATERAL. (a) Except as
provided by Subsection (b), the [The] total value of eligible
security to secure a deposit of public funds must be in an amount
not less than the amount of the deposit of public funds:
(1) increased by the amount of any accrued interest;
and
(2) reduced to the extent that the United States or an
instrumentality of the United States insures the deposit.
(b) The total value of eligible security described by
Section 45.201(4)(D), Education Code, to secure a deposit of public
funds of a school district must be in an amount not less than 110
percent of the amount of the deposit as determined under Subsection
(a). The total market value of the eligible security must be
reported at least once each month to the school district.
(c) The value of a surety bond is its face value.
(d) [(c)] The value of an investment security is its market
value.
SECTION 47. Section 1575.002, Insurance Code, as effective
June 1, 2003, is amended to conform to Section 3.03, Chapter 1187,
Acts of the 77th Legislature, Regular Session, 2001, and to conform
more closely to the source law from which the section was derived,
and further amended to read as follows:
Sec. 1575.002. GENERAL DEFINITIONS. In this chapter:
(1) "Active employee" means a contributing member of
the Teacher Retirement System of Texas [an employee as defined by
Section 821.001, Government Code,] who:
(A) is employed by a public school [a member of
the system]; and
(B) is not entitled to coverage under a plan
provided under Chapter 1551 or 1601.
(2) ["Board of trustees" means the board of trustees
of the Teacher Retirement System of Texas.
[(3)] "Carrier" means an insurance company or hospital
service corporation authorized by the department under this code or
another insurance law of this state to provide any of the insurance
coverages, benefits, or services provided by this chapter.
(3) [(4)] "Fund" means the retired [Texas public]
school employees group insurance fund.
(4) [(5)] "Group program" means the Texas Public
School Employees Group Insurance Program authorized by this
chapter.
(5) [(6)] "Health benefit plan" means a group
insurance policy, contract, or certificate, medical or hospital
service agreement, membership or subscription contract, salary
continuation plan, or similar group arrangement to provide health
care services or to pay or reimburse expenses of health care
services.
(6) "Public school" means:
(A) a school district;
(B) another educational district whose employees
are members of the Teacher Retirement System of Texas;
(C) a regional education service center
established under Chapter 8, Education Code; or
(D) an open-enrollment charter school
established under Subchapter D, Chapter 12, Education Code.
(7) "Trustee" ["System"] means the Teacher Retirement
System of Texas.
SECTION 48. Section 1575.004, Insurance Code, as effective
June 1, 2003, is amended to read as follows:
Sec. 1575.004. DEFINITION OF RETIREE. In this chapter,
"retiree" means:
(1) an individual not eligible for coverage under a
plan provided under Chapter 1551 or 1601 who:
(A) is at least 65 years of age and has taken a
service retirement under the Teacher Retirement System of Texas
[system] with at least 10 years of service credit in the system for
actual service in public schools in this state; or
(B) has taken a service retirement under the
Teacher Retirement System of Texas and who has at least 10 years of
service credit for actual public service in the public schools in
this state or has at least five years of service credit for actual
public service in the public schools in this state and has five
years of military service credited in the Teacher Retirement System
of Texas, and the sum of the individual's age and amount of service
credit earned for service in the public schools of this state equals
or exceeds the number 80 [and
[(B) is not eligible for coverage under a plan
provided under Chapter 1551 or 1601]; or
(2) an individual who:
(A) has taken a disability retirement under the
Teacher Retirement System of Texas [system]; and
(B) is entitled to receive monthly benefits from
the Teacher Retirement System of Texas [system].
SECTION 49. (a) Section 1575.153, Insurance Code, as
effective June 1, 2003, is amended to conform to Section 3.10,
Chapter 1187, Acts of the 77th Legislature, Regular Session, 2001,
and further amended to read as follows:
Sec. 1575.153. [AUTOMATIC] BASIC COVERAGE. A retiree [or
active employee of a participating school district] who applies for
coverage during an enrollment period may not be denied coverage in a
basic plan provided under this chapter unless the trustee [board of
trustees] finds under Subchapter K that the retiree [individual]
defrauded or attempted to defraud the group program.
(b) Section 3.10, Chapter 1187, Acts of the 77th
Legislature, Regular Session, 2001, is repealed.
SECTION 50. Subchapter D, Chapter 1575, Insurance Code, as
effective June 1, 2003, is amended by adding Sections 1575.161,
1575.162, and 1575.163 to read as follows:
Sec. 1575.161. OPEN ENROLLMENT; ADDITIONAL ENROLLMENT
PERIODS. (a) A retiree eligible for coverage under the group
program may select any coverage provided under this chapter for
which the person is otherwise eligible:
(1) on the date that the person retires; and
(2) during any open enrollment periods for retirees
set by the trustee by rule.
(b) In addition to the enrollment periods authorized under
Subsection (a), a retiree who:
(1) is enrolled in the group program as of August 31,
2004, and who is 65 years of age or older on that date may select
coverage as described by Subsections (c) and (d) on September 1,
2004; or
(2) enrolls in the group program on or after
September 1, 2004, and who is 65 years of age or older on or after
that date may select coverage as described in Subsections (c) and
(d) on the date that the retiree is 65 years of age.
(c) If a retiree described by Subsection (b) is not covered
by the Medicare program, the retiree may enroll in the next-higher
coverage tier under the group program and may add dependent
coverage in that same coverage tier.
(d) If a retiree described by Subsection (b) is covered by
the Medicare program, the retiree may enroll in any coverage tier
under the group program and may add dependent coverage in that same
coverage tier.
(e) This section does not affect the right of a retiree
enrolled in a coverage tier under the group program to select a
lower level of coverage at any time.
Sec. 1575.162. SPECIAL ENROLLMENTS. This chapter does not
limit the ability of an individual to enroll in the group program if
the individual:
(1) experiences a special enrollment event as provided
by the Health Insurance Portability and Accountability Act of 1996
(Pub. L. No. 104-191, 110 Stat. 1936 (1996)), as amended; and
(2) is otherwise eligible to enroll in the group
program.
Sec. 1575.163. LIMITATIONS. The Teacher Retirement System
of Texas, as trustee, may not contract for or provide a health
benefit plan that excludes from participation in the network a
general hospital that:
(1) is located in within the geographical service area
or areas of the health coverage plan that includes a county that:
(A) has a population of at least 100,000 and not
more than 175,000; and
(B) is located in the Texas-Louisiana border
region, as that term is defined in Section 2056.002(e), Government
Code; and
(2) agrees to provide medical and health care services
under the plan subject to the same terms and conditions as other
hospital providers under the plan.
SECTION 51. Section 1575.201, Insurance Code, as effective
June 1, 2003, is amended to read as follows:
Sec. 1575.201. ADDITIONAL STATE CONTRIBUTIONS; CERTAIN
CONTRIBUTIONS. (a) The state through the trustee [system] shall
contribute from money in the fund:
(1) the total cost of the basic plan covering each
participating retiree; and
(2) for each participating dependent, surviving
spouse, and surviving dependent child, the amount prescribed by the
General Appropriations Act to cover part of the cost of the basic
plan covering the dependent, surviving spouse, and surviving
dependent child.
(b) The trustee shall collect the amount of premium required
for basic coverage under the group program that exceeds the amount
contributed by the state for those individuals described by
Subsection (a)(2).
SECTION 52. Section 1575.202(a), Insurance Code, is amended
to read as follows:
(a) Each state fiscal year, the state shall contribute to
the fund an amount equal to one [0.5] percent of the salary of each
active employee.
SECTION 53. 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 54. Section 1575.204, Insurance Code, as effective
June 1, 2003, is amended to read as follows:
Sec. 1575.204. PUBLIC SCHOOL CONTRIBUTION [RATIO OF STATE
AND ACTIVE EMPLOYEE CONTRIBUTIONS]. Each state fiscal year, each
public school shall contribute to the fund the amount prescribed by
the General Appropriations Act, which may not be less than 0.25
percent or greater than 0.75 percent of the salary of each active
employee of the public school. The public school shall make the
contributions on a monthly basis and as otherwise prescribed by the
trustee [If the amount of state and active employee contributions
to the fund is raised by the legislature above the percentages
provided by Sections 1575.202 and 1575.203 to provide adequate
funding for the group program, the ratio between the state's
contribution and the active employees' contributions must be
maintained at two to one].
SECTION 55. Subchapter E, Chapter 1575, Insurance Code, as
effective June 1, 2003, is amended by adding Sections 1575.211 and
1575.212 to read as follows:
Sec. 1575.211. COST SHARING. (a) The total costs for the
operation of the group program shall be shared among the state, the
public schools, the active employees, and the retirees in the
manner prescribed by the General Appropriations Act.
(b) In determining the allocation of total costs under this
section, the state shall pay not more than 55 percent of the total
costs, retirees shall pay at least 30 percent of the total costs,
and the balance shall be paid by active employees and public
schools.
Sec. 1575.212. PAYMENT BY RETIREES; RANGES. (a) The
trustee by rule shall establish ranges for payment of the share of
total costs allocated under Section 1575.211 to retirees, with
different levels for:
(1) retirees who are not eligible to participate in
Part A of the Medicare program;
(2) retirees who are eligible for participation but
are not participating in Part A of the Medicare program; and
(3) retirees who are eligible for participation in the
Medicare program and are participating in Part A of the Medicare
program.
(b) In establishing ranges for payment of the share of total
costs allocated under Section 1575.211 to retirees, the trustee may
consider the years of service credit accrued by a retiree and may
reward those retirees with more years of service credit.
SECTION 56. Subchapter E, Chapter 3, Insurance Code, is
amended by adding Article 3.50-7A to read as follows:
Art. 3.50-7A. LIMITATIONS APPLICABLE TO TEXAS SCHOOL
EMPLOYEES UNIFORM GROUP COVERAGE PROGRAM. (a) This article
applies only to the uniform group coverage program established
under Article 3.50-7 of this code. A term used in this article has
the meaning assigned by Section 2, Article 3.50-7, of this code.
(b) The Teacher Retirement System of Texas, as trustee, may
not contract for or provide a health coverage plan that excludes
from participation in the network a general hospital that:
(1) is located in within the geographical service area
or areas of the health coverage plan that includes a county that:
(A) has a population of at least 100,000 and not
more than 175,000; and
(B) is located in the Texas-Louisiana border
region, as that term is defined in Section 2056.002(e), Government
Code; and
(2) agrees to provide medical and health care services
under the plan subject to the same terms and conditions as other
hospital providers under the plan.
SECTION 57. Section 2, Article 3.50-8, Insurance Code, is
amended by amending Subsection (a) and adding Subsections (a-1),
(e), (f), and (g) 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 full-time active
employees employed by the district, school, or service center,
other than in the capacity of professional staff, multiplied by
$500 [$1,000] or a greater amount as provided by the General
Appropriations Act for purposes of this article; and
(2) the product of the number of part-time active
employees employed by the district, school, or service center,
other than in the capacity of professional staff, multiplied by
$250 or a greater amount as provided by the General Appropriations
Act for purposes of this article.
(a-1) Notwithstanding any other provision of this article
or other law, on or after September 1, 2005, 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 the product of the number of
active employees employed by the district, school, or service
center multiplied by $1,000 or a greater amount as provided by the
General Appropriations Act for purposes of this article.
(e) A member of the professional staff of a district,
charter school, or service center described by Subsection (a) of
this section is not eligible to receive state funds under
Subsection (a) of this section.
(f) For purposes of this section, a member of the
professional staff of a district, charter school, or service center
described by Subsection (a) of this section has the meaning defined
by rule by the trustee.
(g) An employee is not eligible to receive a state
contribution under this article until the 90th day after the date
the employee is employed by an entity described by Section 1(2)(A)
of this article.
SECTION 58. Section 304.001(a), Local Government Code, is
amended to read as follows:
(a) In this chapter, "political subdivision" means a
county, municipality, school district, hospital district, or any
other political subdivision receiving electric service from an
entity that has implemented customer choice as defined in Section
31.002, Utilities Code.
SECTION 59. Section 57.046, Utilities Code, is amended by
amending Subsection (a) and adding Subsections (c) and (d) 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).
(d) In addition to the purposes for which the qualifying
entities account may be used, the board may use money in the account
to award grants to the Health and Human Services Commission for
technology initiatives of the commission.
SECTION 60. Sections 57.048(c) and (d), Utilities Code, are
amended to read as follows:
(c) The total amount deposited to the credit of the fund,
excluding interest and loan repayments, may not exceed $1.75 [$1.5]
billion. Not later than August 31 of each year, the comptroller
shall determine the total amount, excluding interest and loan
repayments, that has been deposited to the credit of the fund during
that fiscal year and the preceding fiscal years. If the comptroller
determines that a total of $1.5 [$1.2] billion or more, excluding
interest and loan repayments, has been deposited to the credit of
the fund, the comptroller shall impose the assessment during the
next fiscal year at a rate that the comptroller estimates is
sufficient to produce the amount necessary to result in the deposit
in the fund of a total of not more than $1.75 [$1.5] billion,
excluding interest and loan repayments.
(d) The comptroller may not collect the assessment during a
fiscal year if the comptroller determines after the yearly review
that the total amount deposited to the credit of the fund during
that fiscal year and the preceding fiscal years is $1.74 [$1.49]
billion or more, excluding interest and loan repayments, and it is
not possible to impose the assessment during the next fiscal year at
a practical rate without collecting more than a total of $1.75
[$1.5] billion, excluding interest and loan repayments.
SECTION 61. The following laws are repealed:
(1) Sections 39.055(b), (c), and (d) and 53.47(k),
Education Code;
(2) Section 823.401(h), Government Code; and
(3) Section 1575.154, Insurance Code, as effective
June 1, 2003.
SECTION 62. 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 63. (a) The comptroller shall contract with a
consultant for a comprehensive audit of regional education service
centers in this state. The audit must include:
(1) a detailed analysis of all services provided by
regional education service centers that identifies, for each
service provided:
(A) the percentage of school districts receiving
the service;
(B) the costs to the regional education service
centers of providing the service;
(C) the charges imposed on school districts by
the regional education service centers for providing the service;
and
(D) the difference between the amount determined
under Paragraph (B) of this subdivision and the amount determined
under Paragraph (C) of this subdivision;
(2) an evaluation of whether any services provided by
a regional education service center could be provided at a lower
cost by an alternative service provider, as determined based on a
survey of potential alternative service providers;
(3) an analysis of the governance structures of
regional education service centers;
(4) a review of the financial condition of regional
education service centers and their current funding sources to
determine the adequacy of state appropriations to regional
education service centers and whether those appropriations should
continue to be made;
(5) a review of the number and geographic distribution
of regional education service centers;
(6) a review of the institutional structure of
regional education service centers, with consideration of whether a
separate system of Texas Education Agency field offices would be
appropriate or whether any regional education service center
functions should be transferred to Texas Education Agency
facilities; and
(7) an analysis of the support functions of regional
education service centers to determine whether support
requirements could be decreased through business processes or
application redesigns.
(b) Costs of the audit required by Subsection (a) of this
section shall be paid using amounts appropriated for the fiscal
biennium ending August 31, 2005, to regional education service
centers or to the Texas Education Agency for the costs of services
provided by regional education service centers, not to exceed a
total amount of $750,000.
(c) Not later than June 1, 2004, the comptroller shall
submit a report to the legislature concerning the results of the
audit required by Subsection (a) of this section.
SECTION 64. Section 11.164, Education Code, as amended by
this Act, applies beginning with the 2003-2004 school year.
SECTION 65. The changes in law made by this Act to
Subsection (a), Section 13.005, Education Code, Subsections (b) and
(c), Section 13.155, Education Code, and Section 41.033, Education
Code, apply only to a school district consolidation with an
effective date on or after the effective date of this Act. A school
district consolidation with an effective date before the effective
date of this Act is covered by the law in effect on the effective
date of the district's consolidation, and the former law is
continued in effect for that purpose.
SECTION 66. Subchapter F, Chapter 21, Education Code, as
amended by this Act, applies only to a hearing before a hearing
examiner under that subchapter for which a teacher makes a written
request on or after September 1, 2003. A hearing under Subchapter
F, Chapter 21, Education Code, for which a teacher made a written
request before September 1, 2003, is governed by the law in effect
on the date the teacher requests the hearing, and the former law is
continued in effect for that purpose.
SECTION 67. (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 68. Notwithstanding any conflicting provision of
H.B. No. 1, Acts of the 78th Legislature, Regular Session, 2003, the
guaranteed level of state and local funds per weighted student per
cent of tax effort is $27.14. This section does not affect a school
district's entitlement to any additional revenue under H.B. No. 1,
Acts of the 78th Legislature, Regular Session, 2003.
SECTION 69. Of the amounts appropriated by H.B. No. 1, Acts
of the 78th Legislature, Regular Session, 2003, to the Texas
Education Agency under Strategy A.1.2, FSP - Equalized Facilities,
for purposes of the existing debt assistance program under
Subchapter B, Chapter 46, Education Code, the commissioner of
education may, in the fiscal year ending August 31, 2005, use an
amount not to exceed $20 million for purposes of the instructional
facilities allotment under Subchapter A, Chapter 46, Education
Code.
SECTION 70. 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 71. Notwithstanding Section 39.182, Education
Code:
(1) the Texas Education Agency is not required to
prepare and deliver a report under that section before December 1,
2003, that covers the 2002-2003 school year; and
(2) as determined by the commissioner of education,
the report required to be delivered not later than December 1, 2004,
by the Texas Education Agency under that section may include
information from the 2002-2003 school year.
SECTION 72. Section 42.152(c), Education Code, as amended
by this Act, applies to the use of compensatory education funds
allotted under Chapter 42, Education Code, for any school year,
including a school year before September 1, 2003.
SECTION 73. Section 822.001, Government Code, as amended by
this Act, and Section 823.406, Government Code, as added by this
Act, apply only to a person who is first employed on or after the
effective date of this Act and to a former employee who has
withdrawn retirement contributions under Section 822.003,
Government Code, and is reemployed on or after the effective date of
this Act.
SECTION 74. The requirements of Subsection (b), Section
823.002, Government Code, as added by this Act, apply to persons
whose employment begins on or after the effective date of this Act.
The board of trustees of the Teacher Retirement System of Texas
shall adopt rules implementing the requirements of that subsection
as soon as practicable after the effective date of this Act.
SECTION 75. 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 76. Notwithstanding Article 3.50-8, Insurance
Code, the state shall pay the state contribution for active
employee health coverage or supplemental compensation authorized
under Section 2, Article 3.50-8, Insurance Code, for the last month
of state fiscal year 2005 not earlier than the first day of the
first month of state fiscal year 2006.
SECTION 77. (a) Except as otherwise provided by this Act,
this Act takes effect September 1, 2003.
(b) Sections 20, 22, 36, 37, 59, and 60 of this Act take
effect immediately if this Act 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, Sections 20, 22, 36, 37, 59,
and 60 of this Act take effect September 1, 2003.
SECTION 78. Chapter 466, Government Code, is amended by
adding Subchapter J to read as follows:
SUBCHAPTER J. PARTICIPATION IN MULTIJURISDICTION
LOTTERY GAME
Sec. 466.451. MULTIJURISDICTION AGREEMENT AUTHORIZED. The
commission may enter into a written agreement with the appropriate
officials of one or more other states or other jurisdictions,
including foreign countries, to participate in the operation,
marketing, and promotion of a multijurisdiction lottery game or
games. The commission may adopt rules relating to a
multijurisdiction lottery game or games.
Sec. 466.452. REVENUE FROM MULTIJURISDICTION LOTTERY. (a)
Except as provided by this section, revenue received from the sale
of tickets in this state for a multijurisdiction lottery game is
subject to Subchapter H.
(b) The commission may deposit a portion of the revenue
received from the sale of multijurisdiction lottery game tickets in
this state into a fund shared with other parties to an agreement
under this subchapter for the payment of prizes awarded in
multijurisdiction lottery games in which the commission
participates. The commission may retain that revenue in the fund
for as long as necessary to pay prizes claimed during the period
designated for claiming a prize in the multijurisdiction lottery
game.
Sec. 466.453. PAYMENT OF COSTS AUTHORIZED. The commission
may share in the payment of costs associated with participating in
multijurisdiction lottery games.
SECTION 79. (a) As soon as practicable after the effective
date of this Act, the Texas Lottery Commission shall adopt the rules
necessary to implement multijurisdiction lottery games in
accordance with Subchapter J, Chapter 466, Government Code, as
added by this Act.
(b) The Texas Lottery Commission may adopt an emergency rule
under Subsection (a) of this section without prior notice or
hearing, or with any abbreviated notice and hearing as the
commission finds practicable, for the implementation of the change
in law made by Subchapter J, for multijurisdiction lottery games,
Chapter 466, Government Code. Section 2001.034, Government Code,
does not apply to an emergency rule adopted under this section.
(c) Notwithstanding any law to the contrary, including any
law enacted during the 78th Legislature, Regular Session, 2003, to
promptly implement Subchapter J, Chapter 466, Government Code, as
added by this Act, a contract for the acquisition or provision of
facilities, supplies, equipment, materials, or services related to
the initial operation of multijurisdiction lottery games under
these subchapters is not subject to:
(1) Subtitle D, Title 10, Government Code;
(2) Section 466.101, Government Code;
(3) Chapter 2161, Government Code; or
(4) any competitive bidding requirements or contract
requirements provided by any other law or by rules of the Texas
Lottery Commission.
______________________________ ______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 3459 was passed by the House on May
10, 2003, by the following vote: Yeas 131, Nays 0, 1 present, not
voting; that the House refused to concur in Senate amendments to
H.B. No. 3459 on May 29, 2003, and requested the appointment of a
conference committee to consider the differences between the two
houses; and that the House adopted the conference committee report
on H.B. No. 3459 on June 1, 2003, by the following vote: Yeas 105,
Nays 38, 2 present, not voting; and that the House adopted H.C.R.
No. 302 authorizing certain corrections in H.B. No. 3459 on June 2,
2003, by a non-record vote.
______________________________
Chief Clerk of the House
I certify that H.B. No. 3459 was passed by the Senate, with
amendments, on May 27, 2003, by the following vote: Yeas 29, Nays
2; at the request of the House, the Senate appointed a conference
committee to consider the differences between the two houses; and
that the Senate adopted the conference committee report on H.B. No.
3459 on June 1, 2003, by the following vote: Yeas 22, Nays 8; and
that the Senate adopted H.C.R. No. 302 authorizing certain
corrections in H.B. No. 3459 on June 2, 2003, by a viva-voce vote.
______________________________
Secretary of the Senate
APPROVED: __________________
Date
__________________
Governor