By: Huberty H.B. No. 21

A BILL TO BE ENTITLED

AN ACT

relating to the public school finance system.

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

SECTION 1. Section 11.158(a), Education Code, is amended to read as follows:

(a) The board of trustees of an independent school district may require payment of:

(1) a fee for materials used in any program in which the resultant product in excess of minimum requirements becomes, at the student's option, the personal property of the student, if the fee does not exceed the cost of materials;

(2) membership dues in student organizations or clubs and admission fees or charges for attending extracurricular activities, if membership or attendance is voluntary;

(3) a security deposit for the return of materials, supplies, or equipment;

(4) a fee for personal physical education and athletic equipment and apparel, although any student may provide the student's own equipment or apparel if it meets reasonable requirements and standards relating to health and safety established by the board;

(5) a fee for items of personal use or products that a student may purchase at the student's option, such as student publications, class rings, annuals, and graduation announcements;

(6) a fee specifically permitted by any other statute;

(7) a fee for an authorized voluntary student health and accident benefit plan;

(8) a reasonable fee, not to exceed the actual annual maintenance cost, for the use of musical instruments and uniforms owned or rented by the district;

(9) a fee for items of personal apparel that become the property of the student and that are used in extracurricular activities;

(10) a parking fee or a fee for an identification card;

(11) a fee for a driver training course, not to exceed the actual district cost per student in the program for the current school year;

(12) a fee for a course offered for credit that requires the use of facilities not available on the school premises or the employment of an educator who is not part of the school's regular staff, if participation in the course is at the student's option;

(13) a fee for a course offered during summer school, except that the board may charge a fee for a course required for graduation only if the course is also offered without a fee during the regular school year;

(14) a reasonable fee for transportation of a student who lives within two miles of the school the student attends to and from that school[, except that the board may not charge a fee for transportation for which the school district receives funds under Section 42.155(d)]; or

(15) a reasonable fee, not to exceed $50, for costs associated with an educational program offered outside of regular school hours through which a student who was absent from class receives instruction voluntarily for the purpose of making up the missed instruction and meeting the level of attendance required under Section 25.092[; or

[(16) if the district does not receive any funds under Section 42.155 and does not participate in a county transportation system for which an allotment is provided under Section 42.155(i), a reasonable fee for the transportation of a student to and from the school the student attends].

SECTION 2. Section 29.153(c), Education Code, is amended to read as follows:

(c) A prekindergarten class under this section shall be operated on a half-day basis. A district is not required to provide transportation for a prekindergarten class[, but transportation, if provided, is included for funding purposes as part of the regular transportation system].

SECTION 3. Sections 29.918(a) and (b), Education Code, are amended to read as follows:

(a) Notwithstanding Section [39.234 or] 42.152, a school district or open-enrollment charter school with a high dropout rate, as determined by the commissioner, must submit a plan to the commissioner describing the manner in which the district or charter school intends to use the compensatory education allotment under Section 42.152 [and the high school allotment under Section 42.160] for developing and implementing research-based strategies for dropout prevention. The district or charter school shall submit the plan not later than December 1 of each school year preceding the school year in which the district or charter school will receive the compensatory education allotment [or high school allotment] to which the plan applies.

(b) A school district or open-enrollment charter school to which this section applies may not spend or obligate more than 25 percent of the district's or charter school's compensatory education allotment [or high school allotment] unless the commissioner approves the plan submitted under Subsection (a). The commissioner shall complete an initial review of the district's or charter school's plan not later than March 1 of the school year preceding the school year in which the district or charter school will receive the compensatory education allotment [or high school allotment] to which the plan applies.

SECTION 4. Subchapter C, Chapter 30, Education Code, is amended by adding Section 30.0561 to read as follows:

Sec. 30.0561. TRANSPORTATION ALLOTMENT. The Texas School for the Deaf is entitled to a transportation allotment paid from the foundation school fund. The commissioner shall determine the appropriate allotment.

SECTION 5. Section 30.087(c), Education Code, is amended to read as follows:

(c) A school district may receive an allotment paid from the foundation school fund for transportation of students participating in a regional day school program, as determined by the commissioner [in the same manner as an allotment for the transportation of other special education students].

SECTION 6. Section 34.007, Education Code, is amended by adding Subsection (c) to read as follows:

(c) A county transportation system is not entitled to receive funding for transportation costs directly from the state. Funding for a county transportation system is provided by each school district participating in the county transportation system in accordance with the terms of the interlocal contract under Chapter 791, Government Code, under which the county provides transportation services for the participating districts.

SECTION 7. Section 39.0233(a), Education Code, is amended to read as follows:

(a) The agency, in coordination with the Texas Higher Education Coordinating Board, shall adopt a series of questions to be included in an end-of-course assessment instrument administered under Section 39.023(c) to be used for purposes of Section 51.3062. The questions adopted under this subsection must be developed in a manner consistent with any college readiness standards adopted under Section [Sections 39.233 and] 51.3062.

SECTION 8. Section 41.099(a), Education Code, is amended to read as follows:

(a) Sections [41.002(e),] 41.094, 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 9. Section 41.257, Education Code, is amended to read as follows:

Sec. 41.257. APPLICATION OF SMALL AND SPARSE ADJUSTMENTS [AND TRANSPORTATION ALLOTMENT]. The budget of the consolidated district must apply the benefit of the adjustment or allotment to the schools of the consolidating district to which Section 42.103 or[,] 42.105[, or 42.155] would have applied in the event that the consolidated district still qualifies as a small or sparse district.

SECTION 10. Section 42.006(a-1), Education Code, is amended to read as follows:

(a-1) The commissioner by rule shall require each school district and open-enrollment charter school to report through the Public Education Information Management System information regarding the number of students enrolled in the district or school who are identified as having dyslexia or related disorders. The agency shall maintain the information provided in accordance with this subsection.

SECTION 11. Section 42.151(h), Education Code, is amended to read as follows:

(h) Funds allocated under this section, other than an indirect cost allotment established under State Board of Education rule or amounts made available for the transportation of special education students, must be used in the special education program under Subchapter A, Chapter 29.

SECTION 12. Section 42.154(c), Education Code, is amended to read as follows:

(c) Funds allocated under this section, other than an indirect cost allotment established under State Board of Education rule or amounts made available for the transportation of career and technology education students, must be used in providing career and technology education programs in grades nine through 12 or career and technology education programs for students with disabilities in grades seven through 12 under Sections 29.182, 29.183, and 29.184.

SECTION 13. Section 42.1541(a), Education Code, is amended to read as follows:

(a) For the 2017-2018 and subsequent school years, the [The] State Board of Education shall by rule revise [increase] the indirect cost allotments established under Sections 42.151(h), 42.152(c), 42.153(b), and 42.154(c) [42.154(a-1) and (c)] and in effect for the 2016-2017 [2010-2011] school year to reflect any increase in the percentage of total maintenance and operations funding represented by the basic allotment [in proportion to the average percentage reduction in total state and local maintenance and operations revenue provided under this chapter for the 2011-2012 school year] as a result of [S.B. Nos. 1 and 2,] Acts of the 85th [82nd] Legislature, Regular [1st Called] Session, 2017 [2011].

SECTION 14. Subchapter C, Chapter 42, Education Code, is amended by adding Section 42.1561 to read as follows:

Sec. 42.1561. ALLOTMENT FOR STUDENT WITH DYSLEXIA OR RELATED DISORDER. (a) Subject to Subsection (b), for each student that a school district serves who has been identified as having dyslexia or a related disorder, the district is entitled to an annual allotment equal to the district's adjusted basic allotment as determined under Section 42.102 or Section 42.103, as applicable, multiplied by 0.1 for each school year or a greater amount provided by appropriation.

(b) A school district is entitled to the allotment under Subsection (a) only for a student who:

(1) is receiving instruction that:

(A) meets applicable dyslexia program criteria established by the agency; and

(B) is provided by a person with specific training in providing that instruction; or

(2) has received the instruction described by Subdivision (1) and is permitted, on the basis of having dyslexia or a related disorder, to use modifications in the classroom and accommodations in the administration of assessment instruments under Section 39.023.

(c) Funds allotted under this section must be used in providing services to students with dyslexia or related disorders.

(d) A school district may receive funding for a student under this section and Section 42.151 if the student satisfies the requirements of both sections.

(e) Not more than five percent of a district's students in average daily attendance are eligible for funding under this section.

SECTION 15. 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, any allotment] under Section 42.158 [or 42.160,] 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 16. Chapter 42, Education Code, is amended by adding Subchapter H to read as follows:

SUBCHAPTER H. FINANCIAL HARDSHIP TRANSITION PROGRAM

Sec. 42.451. FINANCIAL HARDSHIP GRANTS. (a) From amounts appropriated for this subchapter, the commissioner may administer a grant program that provides grants to eligible school districts that have suffered financial hardship.

(b) A district seeking a grant under this subchapter must apply to the commissioner in the manner and within the time prescribed by the commissioner. A district may only submit one application each year.

(c) In awarding grants under this subchapter, the commissioner shall give priority to districts experiencing financial hardship as provided by Section 42.453.

(d) Funding provided to a district under this subchapter is in addition to all other funding provided under Chapter 41 and this chapter.

(e) The commissioner may obtain additional information as needed from a district or other state or local agency to make determinations in awarding grants under this subchapter.

Sec. 42.452. ELIGIBILITY. (a) A school district is eligible to receive a grant under this subchapter if the commissioner determines that the amount of the district's state and local maintenance and operations revenue per student in weighted average daily attendance for the school year for which the district applies for a grant is less than the amount of the district's state and local maintenance and operations revenue per student in weighted average daily attendance for the 2016-2017 school year.

(b) For purposes of making the determinations required by Subsection (a), the commissioner shall:

(1) use the greater of a district's adopted maintenance and operations tax rate for the 2016 tax year or the tax year for which the district applies for a grant;

(2) if a district has a compressed tax rate, as defined by Section 42.101, of less than $1, include all additional tax effort available to the district in calculating its compressed tax rate under Section 42.101(a-1) for the 2016-2017 school year and the school year for which the district applies for a grant;

(3) exclude any decrease in property value attributable to a reduction in value under Chapter 313, Tax Code, or to any other reduction in value for which a district is held harmless; and

(4) for the school year for which the district applies for a grant, include any funds received by the district under Chapter 41 or this chapter that offset a loss in revenue, including:

(A) a reduction in the total amount required to be paid by a district for attendance credits under Section 41.0931; or

(B) an adjustment under Subchapter E.

(c) Based on the determinations made under Subsection (a), the commissioner shall calculate a district's loss of revenue per student in weighted average daily attendance and the percentage decline in funding between the 2016-2017 school year and the school year for which the district applies for a grant.

Sec. 42.453. PRIORITY FOR GRANTS. (a) The commissioner shall award grants by giving priority to school districts in the following order:

(1) first, to districts for which the loss of revenue is the result of the loss of state aid that would have been provided under former Section 42.2516, as that section existed on January 1, 2017;

(2) second, to districts for which the loss of revenue is a result of the changes made by _.B. No. ___, Acts of the 85th Legislature, Regular Session, 2017; and

(3) third, to districts for which the loss of revenue is the result of other financial hardships described in the district's grant application.

(b) The commissioner shall rank each district's grant application according to the highest priority applicable to the district.

(c) In each priority category, the commissioner shall rank the application of the district with the greatest percentage decline in revenue first and the application of the district with the smallest percentage decline last.

Sec. 42.454. AWARD OF GRANTS; AMOUNT. (a) The commissioner shall award grants to school districts based on the priority category provided under Section 42.453 and the district's ranking in the priority category.

(b) Subject to Sections 42.455 and 42.456, the commissioner shall award each district a grant in an amount equal to the difference between the district's state and local maintenance and operations revenue per student in weighted average daily attendance for the 2016-2017 school year and the school year for which the grant is awarded, multiplied by the number of students in weighted average daily attendance during the school year for which the grant is awarded.

Sec. 42.455. LIMITATION ON GRANT AMOUNT. A school district may not receive a grant that exceeds the lesser of:

(1) the amount determined under Section 42.454(b); or

(2) the amount that would increase the district's revenue per student in weighted average daily attendance to an amount that is equal to 125 percent of the average state and local maintenance and operations revenue per student in weighted average daily attendance for the 2016-2017 school year.

Sec. 42.456. FUNDING LIMIT. (a) The amount appropriated for grants under this subchapter may not exceed $100 million in a school year. If the total amount of grants awarded for a school year exceeds the amount appropriated for purposes of this subchapter, the commissioner shall reduce each school district's grant proportionally.

(b) Notwithstanding Section 42.455, a district may not receive a grant under this subchapter for a school year in an amount that is greater than 10 percent of the total amount of funds available under this subchapter for that year.

Sec. 42.457. RULES. The commissioner may adopt rules as necessary to administer this subchapter, including rules establishing eligibility criteria for a school district to receive a grant.

Sec. 42.458. DETERMINATION FINAL. A determination by the commissioner under this subchapter is final and may not be appealed.

Sec. 42.459. EXPIRATION. This subchapter expires September 1, 2019.

SECTION 17. The following provisions of the Education Code are repealed:

(1) Section 29.097(g);

(2) Section 29.098(e);

(3) Section 34.002(c);

(4) Section 39.233;

(5) Section 39.234;

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

(7) Section 42.1541(c);

(8) Section 42.155;

(9) Section 42.160; and

(10) Section 42.2513.

SECTION 18. This Act takes effect September 1, 2017.