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A BILL TO BE ENTITLED
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AN ACT
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relating to the public school finance system. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 29.918(a), Education Code, is amended to |
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read as follows: |
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(a) Notwithstanding Section [39.234 or] 42.152, a school |
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district or open-enrollment charter school with a high dropout |
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rate, as determined by the commissioner, must submit a plan to the |
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commissioner describing the manner in which the district or charter |
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school intends to use the compensatory education allotment under |
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Section 42.152 [and the high school allotment under Section 42.160] |
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for developing and implementing research-based strategies for |
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dropout prevention. The district or charter school shall submit |
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the plan not later than December 1 of each school year preceding the |
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school year in which the district or charter school will receive the |
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compensatory education allotment [or high school allotment] to |
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which the plan applies. |
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SECTION 2. Section 39.0233(a), Education Code, is amended |
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to read as follows: |
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(a) The agency, in coordination with the Texas Higher |
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Education Coordinating Board, shall adopt a series of questions to |
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be included in an end-of-course assessment instrument administered |
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under Section 39.023(c) to be used for purposes of Section 51.3062. |
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The questions adopted under this subsection must be developed in a |
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manner consistent with any college readiness standards adopted |
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under Section [Sections 39.233 and] 51.3062. |
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SECTION 3. Section 41.002(a), Education Code, is amended to |
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read as follows: |
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(a) A school district may not have a wealth per student that |
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exceeds: |
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(1) the wealth per student that generates the amount |
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of maintenance and operations tax revenue per weighted student |
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available to a district with maintenance and operations tax revenue |
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per cent of tax effort equal to the maximum amount provided per cent |
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under Section 42.101(a), (a-3), or (b), for the district's |
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maintenance and operations tax effort equal to or less than the rate |
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equal to the sum of the product of the state compression percentage, |
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as determined under Section 42.2516, multiplied by the maintenance |
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and operations tax rate adopted by the district for the 2005 tax |
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year and any additional tax effort included in calculating the |
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district's compressed tax rate under Section 42.101(a-1); |
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(2) the greater of the wealth per student that |
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generates the amount of maintenance and operations tax revenue per |
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weighted student available to the Austin Independent School |
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District or a district at the 95th percentile in wealth per student, |
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as determined by the commissioner in cooperation with the |
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Legislative Budget Board, for the first six cents by which the |
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district's maintenance and operations tax rate exceeds the rate |
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equal to the sum of the product of the state compression percentage, |
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as determined under Section 42.2516, multiplied by the maintenance |
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and operations tax rate adopted by the district for the 2005 tax |
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year and any additional tax effort included in calculating the |
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district's compressed tax rate under Section 42.101(a-1), subject |
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to Section 41.093(b-1); or |
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(3) the wealth per student specified under Subdivision |
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(1) [$319,500], for the district's maintenance and operations tax |
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effort that exceeds the amount of tax effort described by |
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Subdivision (2). |
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SECTION 4. Section 41.093(b-1), Education Code, is amended |
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to read as follows: |
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(b-1) If the guaranteed level of state and local funds per |
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weighted student per cent of tax effort under Section |
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42.302(a-1)(1) for which state funds are appropriated for a school |
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year is an amount at least equal to the greater of the amount of |
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revenue per weighted student per cent of tax effort available to the |
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Austin Independent School District or the amount available to a |
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district at the 95th percentile in wealth per student, as |
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determined by the commissioner in cooperation with the Legislative |
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Budget Board, the commissioner, in computing the amounts described |
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by Subsections (a)(1) and (2) and determining the cost of an |
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attendance credit, shall exclude maintenance and operations tax |
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revenue resulting from the tax rate described by Section |
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41.002(a)(2). |
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SECTION 5. Section 41.099(a), Education Code, is amended to |
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read as follows: |
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(a) Section [Sections 41.002(e),] 41.094 applies [, 41.097,
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and 41.098 apply] only to a district that: |
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(1) executes an agreement to purchase all attendance |
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credits necessary to reduce the district's wealth per student to |
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the equalized wealth level; |
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(2) executes an agreement to purchase attendance |
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credits and an agreement under Subchapter E to contract for the |
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education of nonresident students who transfer to and are educated |
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in the district but who are not charged tuition; or |
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(3) executes an agreement under Subchapter E to |
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contract for the education of nonresident students: |
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(A) to an extent that does not provide more than |
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10 percent of the reduction in wealth per student required for the |
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district to achieve a wealth per student that is equal to or less |
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than the equalized wealth level; and |
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(B) under which all revenue paid by the district |
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to other districts, in excess of the reduction in state aid that |
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results from counting the weighted average daily attendance of the |
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students served in the contracting district, is required to be used |
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for funding a consortium of at least three districts in a county |
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with a population of less than 40,000 that is formed to support a |
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technology initiative. |
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SECTION 6. Subchapter A, Chapter 42, Education Code, is |
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amended by adding Sections 42.010 and 42.013 to read as follows: |
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Sec. 42.010. COMPREHENSIVE REVIEW OF PUBLIC SCHOOL FINANCE |
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WEIGHTS, ALLOTMENTS, AND ADJUSTMENTS. (a) The agency shall |
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conduct a comprehensive review of weights, allotments, and |
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adjustments under the public school finance system, including all |
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current weights, allotments, and adjustments provided under this |
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chapter and any additional weights, allotments, and adjustments |
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that the agency determines may be appropriate. The review must |
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determine the effectiveness of existing weights, allotments, and |
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adjustments in fulfilling the mission of the public education |
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system stated in Section 4.001(a) and furthering the state policy |
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stated in Section 42.001. At a minimum, the review must determine |
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how closely and appropriately each of the following elements |
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reflects and provides financing for costs beyond the control of |
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school districts: |
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(1) adjustments for costs related to the geographic |
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variation in known resource costs and costs of education, |
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controlling for the impact of unequalized wealth and hold-harmless |
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provisions, and properly reflecting the impact of high |
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concentrations of poverty on the compensation that school districts |
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must pay to attract and retain teachers of comparable or |
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appropriate quality; |
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(2) adjustments for costs related to the size and |
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diseconomies of scale of school districts; |
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(3) adjustments for costs related to the varying |
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instructional needs and characteristics of students and the extent |
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to which the adjustments provide each student with access to |
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programs and services that are appropriate to the student's |
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educational needs; |
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(4) other factors, in addition to economic status, |
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that correlate to student at-risk status and the need for |
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compensatory education, and the degree to which those factors |
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correspond to additional educational costs; and |
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(5) the manner in which the cost adjustments are |
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applied to and affect the overall school finance system. |
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(b) The review of the adjustments described in Subsection |
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(a)(1) must: |
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(1) address all uncontrollable costs that can |
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reasonably be quantified; |
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(2) consider the qualifications, experience, and |
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turnover rate of personnel and the impact of those factors on |
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student achievement in considering the adequacy and comparability |
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of salaries; |
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(3) properly address the impact of factors that have a |
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large impact on certain types of school districts, such as extreme |
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isolation, regardless of general state impact; |
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(4) include only factors for which a rational economic |
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argument can be made; |
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(5) be carefully constructed to make sure that a cost |
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factor does not significantly affect more than one variable; and |
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(6) not be artificially adjusted to meet predetermined |
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outcomes and must not use arbitrary limits. |
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(c) In determining whether any additional weights, |
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allotments, and adjustments are appropriate under the public school |
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finance system, as required by Subsection (a), the agency shall |
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include consideration of an additional weight for educational |
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services provided to students in prekindergarten on a half-day |
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basis and on a full-day basis. |
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(d) The agency may contract with one or more consultants if |
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necessary to enable the agency to perform its duties under this |
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section. |
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(e) The Legislative Budget Board, the comptroller, the |
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state auditor, and any other state agency, official, or personnel |
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shall cooperate with the agency in carrying out its duties under |
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this section. |
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(f) Not later than December 1, 2018, the agency shall |
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provide a report that: |
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(1) states the findings of the review conducted under |
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this section; and |
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(2) includes recommendations for updated weights, |
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allotments, and adjustments and any other statutory changes |
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considered appropriate by the agency. |
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(g) This section expires January 1, 2019. |
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Sec. 42.013. STUDY OF LEGISLATION ON SCHOOL FUNDING. (a) |
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After each legislative session, the commissioner shall conduct a |
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study assessing the manner in which any statute enacted or amended |
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during that legislative session affects the equalized wealth level |
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of a school district under Chapter 41 or the foundation school |
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program under this chapter and whether the standard of neutrality |
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described under Section 42.001(b) is maintained. |
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(b) The study under this section must: |
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(1) include an analysis of the effects of legislation |
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on each school district in the state; and |
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(2) indicate how a school district compares to other |
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districts with respect to: |
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(A) property wealth per weighted student; |
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(B) revenue per weighted student; |
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(C) tax effort; and |
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(D) revenue per cent of tax effort. |
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(c) The commissioner shall issue a report on the study's |
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findings to the governor, the lieutenant governor, the speaker of |
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the house of representatives, and the legislature. The |
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commissioner shall make the report available to the public on the |
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agency's Internet website. |
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SECTION 7. Section 42.101(a), Education Code, is amended to |
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read as follows: |
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(a) For each student in average daily attendance, not |
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including the time students spend each day in special education |
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programs in an instructional arrangement other than mainstream or |
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career and technology education programs, for which an additional |
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allotment is made under Subchapter C, a district is entitled to an |
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allotment equal to the lesser of $5,440 [$4,765] or the amount that |
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results from the following formula: |
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A = $5,440 [$4,765] X (DCR/MCR) |
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where: |
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"A" is the allotment to which a district is entitled; |
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"DCR" is the district's compressed tax rate, which is the |
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product of the state compression percentage, as determined under |
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Section 42.2516, multiplied by the maintenance and operations tax |
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rate adopted by the district for the 2005 tax year; and |
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"MCR" is the state maximum compressed tax rate, which is the |
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product of the state compression percentage, as determined under |
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Section 42.2516, multiplied by $1.50. |
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SECTION 8. Effective September 1, 2018, Section 42.101, |
|
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Education Code, is amended by amending Subsection (a) and adding |
|
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Subsection (a-3) to read as follows: |
|
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(a) Subject to adjustment under Subsection (a-3), for [For] |
|
|
each student in average daily attendance, not including the time |
|
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students spend each day in special education programs in an |
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instructional arrangement other than mainstream or career and |
|
|
technology education programs, for which an additional allotment is |
|
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made under Subchapter C, a district is entitled to an allotment |
|
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equal to the lesser of $5,840 [$4,765] or the amount that results |
|
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from the following formula: |
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A = $5,840 [$4,765] X (DCR/MCR) |
|
|
where: |
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"A" is the allotment to which a district is entitled; |
|
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"DCR" is the district's compressed tax rate, which is the |
|
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product of the state compression percentage, as determined under |
|
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Section 42.2516, multiplied by the maintenance and operations tax |
|
|
rate adopted by the district for the 2005 tax year; and |
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"MCR" is the state maximum compressed tax rate, which is the |
|
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product of the state compression percentage, as determined under |
|
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Section 42.2516, multiplied by $1.50. |
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(a-3) Beginning with the 2019-2020 school year, the basic |
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allotment provided to a district under Subsection (a) or (b) is |
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adjusted annually to increase the allotment by the greater of: |
|
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(1) one percent of the amount of the allotment for the |
|
|
preceding school year; or |
|
|
(2) the amount that results from applying the |
|
|
inflation rate, as determined by the comptroller on the basis of |
|
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changes in the Texas Consumer Price Index, to the allotment for the |
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preceding school year. |
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SECTION 9. Sections 42.152(a) and (c), Education Code, are |
|
|
amended to read as follows: |
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(a) For each student who is educationally disadvantaged or |
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who is a student who does not have a disability and resides in a |
|
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residential placement facility in a district in which the student's |
|
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parent or legal guardian does not reside, a district is entitled to |
|
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an annual allotment equal to the adjusted basic allotment |
|
|
multiplied by 0.25 [0.2], and by 2.41 for each full-time equivalent |
|
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student who is in a compensatory, intensive, or accelerated |
|
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[remedial and support] program under Section 29.081 because the |
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student is pregnant. |
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(c) Funds allocated under this section shall be used to fund |
|
|
supplemental programs and services designed to eliminate any |
|
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disparity in performance on assessment instruments administered |
|
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under Subchapter B, Chapter 39, or disparity in the rates of high |
|
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school completion between students at risk of dropping out of |
|
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school, as defined by Section 29.081, and all other students. |
|
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Specifically, the funds, other than an indirect cost allotment |
|
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established under State Board of Education rule, which may not |
|
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exceed 25 [45] percent, may be used to meet the costs of providing a |
|
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compensatory, intensive, or accelerated instruction program under |
|
|
Section 29.081 or a disciplinary alternative education program |
|
|
established under Section 37.008, to pay the costs associated with |
|
|
placing students in a juvenile justice alternative education |
|
|
program established under Section 37.011, 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 |
|
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campus at which at least 40 percent of the students are |
|
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educationally disadvantaged. In meeting the costs of providing a |
|
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compensatory, intensive, or accelerated instruction program under |
|
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Section 29.081, a district's compensatory education allotment |
|
|
shall be used for costs supplementary to the regular education |
|
|
program, such as costs for program and student evaluation, |
|
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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 |
|
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open-enrollment charter school must use funds allocated under |
|
|
Subsection (a) for a purpose authorized in this subsection but is |
|
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not otherwise subject to Subchapter C, Chapter 29. 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 |
|
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considered to be a program supplemental to the regular education |
|
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program, and a district may use its compensatory education |
|
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allotment for such a program. |
|
|
SECTION 10. Sections 42.153(a) and (b), Education Code, are |
|
|
amended to read as follows: |
|
|
(a) For each student in average daily attendance in a |
|
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bilingual education or special language program under Subchapter B, |
|
|
Chapter 29, a district is entitled to an annual allotment equal to |
|
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the adjusted basic allotment multiplied by 0.25 [0.1]. |
|
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(b) Funds allocated under this section, other than an |
|
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indirect cost allotment established under State Board of Education |
|
|
rule, which may not exceed 25 percent, must be used in providing |
|
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bilingual education or special language programs under Subchapter |
|
|
B, Chapter 29, and must be accounted for under existing agency |
|
|
reporting and auditing procedures. |
|
|
SECTION 11. Section 42.251(b), Education Code, is amended |
|
|
to read as follows: |
|
|
(b) The program shall be financed by: |
|
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(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 |
|
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(3) [state available school funds distributed in
|
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|
accordance with law; and
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[(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 12. Sections 42.253(a) and (c), Education Code, are |
|
|
amended to read as follows: |
|
|
(a) For each school year the commissioner shall determine: |
|
|
(1) the amount of money to which a school district is |
|
|
entitled under Subchapters B and C; |
|
|
(2) the amount of money to which a school district is |
|
|
entitled under Subchapter F; |
|
|
(3) [the amount of money allocated to the district
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|
from the available school fund;
|
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|
[(4)] the amount of each district's tier one local |
|
|
share under Section 42.252; and |
|
|
(4) [(5)] the amount of each district's tier two local |
|
|
share under Section 42.302. |
|
|
(c) Each school district is entitled to an amount equal to |
|
|
the difference for that district between the sum of Subsections |
|
|
(a)(1) and (a)(2) and the sum of Subsections (a)(3) and [,] (a)(4)[,
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|
and (a)(5)]. |
|
|
SECTION 13. Sections 42.302(a) and (a-1), Education Code, |
|
|
are 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. |
|
|
(a-1) For purposes of Subsection (a), the dollar amount |
|
|
guaranteed level of state and local funds per weighted student per |
|
|
cent of tax effort ("GL") for a school district is: |
|
|
(1) the greater of the amount of district tax revenue |
|
|
per weighted student per cent of tax effort that would be available |
|
|
to the Austin Independent School District or the amount that would |
|
|
be available to a district at the 95th percentile in wealth per |
|
|
student, as determined by the commissioner in cooperation with the |
|
|
Legislative Budget Board, if the reduction of the limitation on tax |
|
|
increases as provided by Section 11.26(a-1), (a-2), or (a-3), Tax |
|
|
Code, did not apply, [or the amount of district tax revenue per
|
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|
weighted student per cent of tax effort used for purposes of this
|
|
|
subdivision in the preceding school year,] for the first six cents |
|
|
by which the district's maintenance and operations tax rate exceeds |
|
|
the rate equal to the sum of the product of the state compression |
|
|
percentage, as determined under Section 42.2516, multiplied by the |
|
|
maintenance and operations tax rate adopted by the district for the |
|
|
2005 tax year and any additional tax effort included in calculating |
|
|
the district's compressed tax rate under Section 42.101(a-1); and |
|
|
(2) the amount of district tax revenue per weighted |
|
|
student per cent of tax effort available to a district with |
|
|
maintenance and operations tax revenue per cent of tax effort equal |
|
|
to the maximum amount provided per cent under Section 42.101(a), |
|
|
(a-3), or (b) [$31.95], for the district's maintenance and |
|
|
operations tax effort that exceeds the amount of tax effort |
|
|
described by Subdivision (1). |
|
|
SECTION 14. Section 43.001, Education Code, is amended by |
|
|
amending Subsection (c) and adding Subsection (c-1) to read as |
|
|
follows: |
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(c) The term "scholastic population" in Subsection (b) or |
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|
any other law governing the apportionment, distribution, and |
|
|
transfer of the available school fund means all students of school |
|
|
age enrolled in weighted average daily attendance the preceding |
|
|
school year in the public elementary and high school grades of |
|
|
school districts within or under the jurisdiction of a county of |
|
|
this state. |
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|
(c-1) The amount provided to a school district as a result |
|
|
of the annual apportionment of the available school fund in |
|
|
accordance with Subsection (b) is in addition to amounts to which |
|
|
the district is entitled under Chapter 42. |
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|
SECTION 15. Section 45.259(d), Education Code, is amended |
|
|
to read as follows: |
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|
(d) If money appropriated for the Foundation School Program |
|
|
is used for purposes of this subchapter and as a result there is |
|
|
insufficient money to fully fund the Foundation School Program, the |
|
|
commissioner shall, to the extent necessary, reduce each school |
|
|
district's foundation school fund allocations[, other than any
|
|
|
portion appropriated from the available school fund,] in the same |
|
|
manner provided by Section 42.253(h) for a case in which school |
|
|
district entitlements exceed the amount appropriated. The |
|
|
following fiscal year, a district's entitlement under Section |
|
|
42.253 is increased by an amount equal to the reduction under this |
|
|
subsection. |
|
|
SECTION 16. The following provisions of the Education Code |
|
|
are repealed: |
|
|
(1) Section 29.097(g); |
|
|
(2) Section 29.098(e); |
|
|
(3) Subchapter G, Chapter 29; |
|
|
(4) Section 39.233; |
|
|
(5) Section 39.234; |
|
|
(6) Sections 41.002(e), (f), and (g); |
|
|
(7) Section 41.097; |
|
|
(8) Section 41.098; |
|
|
(9) Section 42.157; |
|
|
(10) Section 42.160; and |
|
|
(11) Section 42.4101. |
|
|
SECTION 17. Except as otherwise provided by this Act, this |
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|
Act takes effect September 1, 2017. |