TO:	Honorable Dan Huberty, Chair, House Committee on Public Education
FROM:	Ursula Parks, Director, Legislative Budget Board
IN RE:	HB3106 by Faircloth (Relating to state financial assistance for a school district to which an academically unacceptable school district is annexed.), As Introduced

The bill would provide transitional state aid for debt service to a school district receiving via consolidation another district that is subject to closure for lack of adequate performance. The transitional aid would be provided for a period of five years beginning with the first year of consolidation.  Although the specifics of the proposed calculation differ, current law contains a mechanism that provides transitional aid for maintenance and operations costs for a five-year period for a receiving district under these circumstances.
 
Consolidations resulting from lack of performance are relatively rare.  The district most immediately affected by the bill falls within the second-highest quintile of wealth per weighted student. However, districts receiving a low-performing district via the type of consolidation addressed by the bill may be in any quintile of property wealth per weighted student.  Accordingly, there is no means by which to estimate whether the proposed state aid would be concentrated among districts at lower or higher ranges of property wealth per weighted student in future years.  Because of the low frequency of consolidations that would trigger this type of aid and the likelihood of the aid being proportionally small with respect to total entitlement within the Foundation School Program, no significant impact on equalized funding requirements is anticipated under the provisions of the bill.