80R8943 ESH-D

By: West, Royce S.B. No. 1602

A BILL TO BE ENTITLED

AN ACT

relating to public school finance.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Subchapter D, Chapter 41, Education Code, is amended by adding Section 41.0981 to read as follows:

Sec. 41.0981. CREDIT FOR TRANSPORTATION ALLOTMENT. The total amount required under Section 41.093 for a district to purchase attendance credits under this subchapter for any school year is reduced by an amount equal to the amount of the district's transportation allotment under Section 42.155.

SECTION 2. Section 41.099(a), Education Code, is amended to read as follows:

(a) Sections [41.002(e),] 41.094 and [,] 41.097[, and 41.098] apply only to a district that:

(1) executes an agreement to purchase all attendance credits necessary to reduce the district's wealth per student to the equalized wealth level;

(2) executes an agreement to purchase attendance credits and an agreement under Subchapter E to contract for the education of nonresident students who transfer to and are educated in the district but who are not charged tuition; or

(3) executes an agreement under Subchapter E to contract for the education of nonresident students:

(A) to an extent that does not provide more than 10 percent of the reduction in wealth per student required for the district to achieve a wealth per student that is equal to or less than the equalized wealth level; and

(B) under which all revenue paid by the district to other districts, in excess of the reduction in state aid that results from counting the weighted average daily attendance of the students served in the contracting district, is required to be used for funding a consortium of at least three districts in a county with a population of less than 40,000 that is formed to support a technology initiative.

SECTION 3. Section 41.121, Education Code, is amended to read as follows:

Sec. 41.121. AGREEMENT. The board of trustees of a district with a wealth per student that exceeds the equalized wealth level may execute an agreement to educate the students of another district in a number that, when the weighted average daily attendance of the students served is added to the weighted average daily attendance of the contracting district, is sufficient, in combination with any other actions taken under this chapter, to reduce the district's wealth per student to a level that is equal to or less than the equalized wealth level. The agreement is not effective unless the commissioner certifies that the transfer of weighted average daily attendance will not result in any of the contracting districts' wealth per student being greater than the equalized wealth level and that the agreement requires an expenditure per student in weighted average daily attendance that is at least equal to the amount per student in weighted average daily attendance required under Section 41.093[, unless it is determined by the commissioner that a quality educational program can be delivered at a lesser amount. The commissioner may approve a special financial arrangement between districts if that arrangement serves the best educational interests of the state].

SECTION 4. Section 42.2516, Education Code, is amended by adding Subsection (h-1) to read as follows:

(h-1) Notwithstanding any other provision of this code, an amendment made to this chapter or Chapter 41 or 43 by ___.B. No. ___, Acts of the 80th Legislature, Regular Session, 2007, may not increase the amount of state funds to which a school district is entitled under Subsection (b).

SECTION 5. Section 42.152, Education Code, is amended by adding Subsection (s) to read as follows:

(s) If a district is required to take action under Chapter 41 to reduce its wealth per student to the equalized wealth level, the total amount required under Section 41.093 for a district to purchase attendance credits for any school year is increased by an amount equal to any reduction in state funds allocated to the district under Subsection (e), (h), (k), (n), or (o).

SECTION 6. Section 42.251(b), Education Code, is amended to read as follows:

(b) The program shall be financed by:

(1) ad valorem tax revenue generated by an equalized uniform school district effort;

(2) ad valorem tax revenue generated by local school district effort in excess of the equalized uniform school district effort; and

(3) [state available school funds distributed in accordance with law; and

[(4)] state funds appropriated for the purposes of public school education and allocated to each district in an amount sufficient to finance the cost of each district's Foundation School Program not covered by other funds specified in this subsection.

SECTION 7. Section 42.302(a), Education Code, is amended to read as follows:

(a) Each school district is guaranteed a specified amount per weighted student in state and local funds for each cent of tax effort over that required for the district's local fund assignment up to the maximum level specified in this subchapter. The amount of state support, subject only to the maximum amount under Section 42.303, is determined by the formula:

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

where:

"GYA" is the guaranteed yield amount of state funds to be allocated to the district;

"GL" is the dollar amount guaranteed level of state and local funds per weighted student per cent of tax effort, which is an amount described by Subsection (a-1) or a greater amount for any year provided by appropriation;

"WADA" is the number of students in weighted average daily attendance, which is calculated by dividing the sum of the school district's allotments under Subchapters B and C, less any allotment to the district for transportation and [,] any allotment under Section 42.158, [and 50 percent of the adjustment under Section 42.102,] by the basic allotment for the applicable year;

"DTR" is the district enrichment tax rate of the school district, which is determined by subtracting the amounts specified by Subsection (b) from the total amount of maintenance and operations taxes collected by the school district for the applicable school year and dividing the difference by the quotient of the district's taxable value of property as determined under Subchapter M, Chapter 403, Government Code, or, if applicable, under Section 42.2521, divided by 100; and

"LR" is the local revenue, which is determined by multiplying "DTR" by the quotient of the district's taxable value of property as determined under Subchapter M, Chapter 403, Government Code, or, if applicable, under Section 42.2521, divided by 100.

SECTION 8. Section 42.260(a), Education Code, is amended to read as follows:

(a) In this section, "participating charter school" means an open-enrollment charter school that participates in the uniform group coverage program established under Chapter 1579, Insurance Code [has the meaning assigned by Section 42.2514].

SECTION 9. Section 43.016, Education Code, is amended to read as follows:

Sec. 43.016. USE OF AVAILABLE SCHOOL FUND. (a) All available school funds shall be appropriated in each county for the education of its children.

(b) The amount of available school funds to which a school district is entitled may not be used to reduce other state funds to which the district is otherwise entitled.

SECTION 10. Section 1579.251(a), Insurance Code, is amended to read as follows:

(a) The state shall assist employees of participating school districts and charter schools in the purchase of group health coverage under this chapter by providing for each covered employee the amount of $900 each state fiscal year or a greater amount as provided by the General Appropriations Act. The state contribution shall be distributed through the school finance formulas under Chapters 41 and 42, Education Code, and used by school districts and charter schools as provided by Section [Sections 42.2514 and] 42.260, Education Code.

SECTION 11. Section 1581.053(b), Insurance Code, is amended to read as follows:

(b) Notwithstanding Subsection (a), amounts a district or school is required to use to pay contributions under a group health coverage plan for district or school employees under Section [42.2514 or] 42.260, Education Code, other than amounts described by Section 42.260(c)(2)(B), are not used in computing whether the district or school complies with Section 1581.052.

SECTION 12. Section 26.08(i), Tax Code, is amended to read as follows:

(i) For purposes of this section, the effective maintenance and operations tax rate of a school district is the tax rate that, applied to the current total value for the district, would impose taxes in an amount that, when added to state funds that would be distributed to the district under Chapter 42, Education Code, for the school year beginning in the current tax year using that tax rate, [including state funds that will be distributed to the district in that school year under Section 42.2516, Education Code,] would provide the same amount of state funds distributed under Chapter 42, Education Code, [including state funds distributed under Section 42.2516, Education Code,] and maintenance and operations taxes of the district per student in weighted average daily attendance for that school year that would have been available to the district in the preceding year if the funding elements for Chapters 41 and 42, Education Code, for the current year had been in effect for the preceding year. For purposes of this section, the amount of state funds distributed under Chapter 42, Education Code, includes amounts distributed under Section 42.2516, Education Code, on the basis of a maintenance and operations tax rate equal to the product of the state compression percentage, as determined under that section, and a district's adopted maintenance and operations tax rate for the 2005 tax year.

SECTION 13. (a) The following sections of the Education Code are repealed:

(1) Sections 41.002(e), (f), and (g);

(2) Section 41.098;

(3) Section 42.103(e); and

(4) Sections 42.2511, 42.2512, and 42.2514.

(b) Section 403.302(j), Government Code, is repealed.

(c) Subchapter C, Chapter 1581, Insurance Code, is repealed.

(d) Sections 26.08(k), (l), and (m), Tax Code, are repealed.

SECTION 14. This Act takes effect September 1, 2007.