Fiscal Year	Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2022	($156,767,342)
2023	($176,444,733)
2024	($160,516,810)
2025	($214,853,423)
2026	($234,185,895)

Fiscal Year	Probable Savings/(Cost) from General Revenue Fund 1	Probable Savings/(Cost) from Foundation School Fund 193	Probable Revenue Gain/(Loss) from Recapture Payments Atten Crdts 8905
2022	($894,862)	($155,872,480)	($109,270,924)
2023	($959,883)	($175,484,850)	($124,898,420)
2024	($856,351)	($159,660,459)	($118,399,026)
2025	($856,351)	($213,997,072)	($113,883,325)
2026	($856,351)	($233,329,544)	($108,905,401)

The bill would amend Section 39.053(g-4) of the Education Code to exclude students from the computation of dropout and completion rates if the student received interventions from the district as described in Section 26.004.

The bill would amend Section 48.110(f) of the Education Code by counting students who earn an associate's degree while attending high school or during a time period established by the Commissioner for purposes of calculating the college, career, and military readiness outcomes bonus (CCMR).

The bill would amend the Career and Technology Education Allotment by changing to base it on the sum of Basic Allotment and the Small and Mid-Sized Allotment. The bill would alter the weighted formula for the Career and Technology Education Allotment by creating three weights based on whether the course taken is in an approved program of study for the Career and Technology Education allotment.

This bill would alter the weighted formula and the criteria to receive the Fast Growth Allotment found in Section 48.111 of the Education Code. The Fast Growth Allotment would be based on the number of enrolled students added over three years over 50 rather than average daily attendance for qualifying districts. The allotment would be based on 0.72 multiplied by the Basic Allotment for each enrolled student over 50 students in fiscal year 2022; the weight would increase to 0.84 in fiscal year 2023, 0.85 in fiscal year 2024, and 0.86 in subsequent years.

The Fast Growth Allotment would be capped at $270 million in fiscal year 2022, $310 million in fiscal year 2023, $315 million in fiscal year 2024, and $320 million in subsequent years.

The bill would provide for districts which received the Fast Growth Allotment in fiscal year 2020, but who were not entitled to the allotment in fiscal year 2022 to receive the amount they were entitled to in fiscal year 2020. This portion of the Fast Growth Allotment would be limited to $40 million, and districts would receive a prorated allotment if the allotments under this Section exceeded that amount.

The bill would amend the section 48.257(c) of the Education Code, allowing districts to net state aid received against recapture.

The bill would provide for a reduction in recapture, in the amount of the Teacher Incentive Allotment under Section 48.112, for any district to which Section 48.257(b) applies. An adjustment under this Section would not be included in calculating a districts revenue under Section 48.277of the Education Code.

The bill would amend subchapter A, Chapter 49 of the Education Code by adding Section 49.0041. Any district that did not receive formal notification of excess local revenue status under 49.004(a) of the Education Code, but would have otherwise been subject to local revenue in excess of entitlement provisions, would have that excess local revenue added to any amount subject to recapture in the following school year for the applicable district.

Based on information provided by the Texas Education Agency and their Foundation School Program model, the bill would result in a total state cost for the Foundation School Program of $155,872,480 for fiscal year 2022 and $175,484,850 for fiscal year 2023, increasing to $233,329,544 in fiscal year 2026, primarily related to changes the bill would make in Career and Technology Education Allotment, the adjustment to recapture for Teacher Incentive Allotment, and the Fast Growth Allotment.

TEA estimates requiring districts to pay any applicable recapture costs in the subsequent year if a district was not notified under Section 49.004(a) of the Education Code would result in a savings to the state of $2,788,076 per year.

Section 18 of the bill would expand the opportunities for a district subject to recapture to net its recapture payment against state aid. Based on information provided by TEA, this would have the impact of reducing recapture revenue by $109,270,924 in fiscal year 2022, $127,686,496 in fiscal year 2023, and there would be a corresponding cost to the Foundation School Fund No. 193 of the same amount to account for the decrease in recapture.

TEA anticipates an administrative cost of one Financial Analyst III FTE. TEA estimates the salary for the FTE to be $77,862 per fiscal year, related benefits to be $26,489 per fiscal year, and other operating expenses related to the FTE to be $6,000 in fiscal year 2022 and $2,000 per year in subsequent years. TEA anticipates IT costs of $34,511 in fiscal year 2022 and $103,532 in fiscal year 2023 to implement the provisions of the bill.

The Workforce Commission indicates a cost of $750,000 per year to pay for the High School Equivalency subsidy program.

LEGISLATIVE BUDGET BOARD
Austin, Texas

FISCAL NOTE, 87TH LEGISLATIVE REGULAR SESSION
Revision 1

April 13, 2021

TO:	Honorable Harold V. Dutton, Jr., Chair, House Committee on Public Education

FROM:	Jerry McGinty, Director, Legislative Budget Board

IN RE:	HB1525 by Huberty (Relating to the public school finance system.), Committee Report 1st House, Substituted

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