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A BILL TO BE ENTITLED
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AN ACT
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relating to requiring the use of a public school's excess funds for |
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certain purposes. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter A, Chapter 44, Education Code, is |
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amended by adding Section 44.013 to read as follows: |
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Sec. 44.013. USE OF EXCESS FUNDS REQUIRED. (a) In this |
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section: |
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(1) "Cash on hand" includes cash equivalents and money |
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invested in short-term investments. |
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(2) "Operating expenses" means total general fund |
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expenditures less any capital outlay. |
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(b) Each school district and open-enrollment charter school |
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shall annually review the district's or school's fund balances to |
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determine the amount of excess funds held by the district or school |
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as described by Subsection (c). |
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(c) For purposes of this section, a school district or |
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open-enrollment charter school has excess funds if: |
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(1) for a district, the total amount of the district's |
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cash on hand or unobligated funds exceeds the district's operating |
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expenses for a period of 110 days; or |
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(2) for a school, the total amount of the school's cash |
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on hand or net assets exceeds the school's operating expenses for a |
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period of 80 days. |
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(d) Not later than the end of the fiscal year following a |
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determination made under Subsection (b), each school district or |
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open-enrollment charter school shall use the amount of excess funds |
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identified under that subsection, if any, to, as applicable: |
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(1) pay down debt obligations; |
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(2) lower the district's maintenance and operations |
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tax rate; |
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(3) provide employee compensation, subject to |
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Subsection (e); or |
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(4) pay costs of deferred maintenance. |
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(e) Funding provided for employee compensation under |
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Subsection (d)(3) must be used to implement a new compensation |
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program or supplement an existing compensation program and may not |
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be used to supplant funding for an existing compensation program. |
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(f) Subject to Subsection (g), for any period of the fiscal |
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year following a determination made under Subsection (b) in which |
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the school district or open-enrollment charter school has excess |
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funds, the district or school may not: |
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(1) for a district, issue a bond or hold an election |
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seeking voter approval to issue a bond under Subchapter A, Chapter |
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45; or |
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(2) for a school: |
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(A) receive funding under Section 12.106(d); or |
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(B) apply for bonds issued under Chapter 53 for |
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the school to be guaranteed by the permanent school fund under |
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Chapter 45, as provided by Section 12.135. |
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(g) The restrictions under Subsection (f) do not apply to a |
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school district or open-enrollment charter school that posts on the |
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district's or school's Internet website an explanation of how the |
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district's or school's excess funds identified under Subsection (b) |
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will be spent in accordance with Subsection (d). |
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(h) If the commissioner determines that a school district or |
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open-enrollment charter school has failed to comply with this |
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section, the commissioner shall, as applicable, increase the |
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district's local share under Section 48.256 or reduce the school's |
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entitlement under Section 12.106 by an amount equal to the amount of |
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the district's or school's excess funds not spent as required under |
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Subsection (d). |
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(i) This section does not apply to: |
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(1) a special-purpose school district established |
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under Section 11.351 that is operated by an institution of higher |
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education, as that term is defined by Section 61.003; |
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(2) an open-enrollment charter school operated under a |
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charter granted to a governmental entity; or |
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(3) a charter school granted a charter under |
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Subchapter E, Chapter 12. |
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(j) The commissioner may adopt rules as necessary to |
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implement this section. |
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SECTION 2. Section 12.106, Education Code, is amended by |
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adding Subsection (k) to read as follows: |
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(k) The commissioner shall reduce the amount of funding to |
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which a charter holder is entitled for an open-enrollment charter |
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school under this section as provided by Section 44.013(h). |
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SECTION 3. Section 48.256, Education Code, is amended by |
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adding Subsection (f) to read as follows: |
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(f) The commissioner shall increase a school district's |
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local share under this section as provided by Section 44.013(h). |
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SECTION 4. Section 48.277, Education Code, is amended by |
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amending Subsection (e) and adding Subsection (f) to read as |
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follows: |
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(e) The commissioner shall reduce a school district's or |
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open-enrollment charter school's allotment under this section as |
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necessary to comply with Section 44.013(h). |
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(f) This section expires September 1, 2025. |
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SECTION 5. Section 48.278, Education Code, is amended by |
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adding Subsection (b-1) to read as follows: |
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(b-1) The commissioner shall reduce a school district's |
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allotment under this section as necessary to comply with Section |
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44.013(h). |
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SECTION 6. This Act takes effect September 1, 2021. |