Bill Text: TX SB40 | 2017 | 85th Legislature 1st Special Session | Introduced


Bill Title: Relating to the public school finance system.

Spectrum: Partisan Bill (Democrat 7-0)

Status: (Introduced) 2017-07-14 - Filed [SB40 Detail]

Download: Texas-2017-SB40-Introduced.html
  85S10372 MEW-F
 
  By: Rodríguez, et al. S.B. No. 40
 
 
 
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 29.918(a), Education Code, is 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.
         SECTION 2.  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 Subchapter F-1,
  Chapter 51. The questions adopted under this subsection must be
  developed in a manner consistent with any college readiness
  standards adopted under [Section 39.233 and] Subchapter F-1,
  Chapter 51.
         SECTION 3.  Section 41.002(a), Education Code, is amended to
  read as follows:
         (a)  A school district may not have a wealth per student that
  exceeds:
               (1)  the wealth per student that generates the amount
  of maintenance and operations tax revenue per weighted student
  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) or (b), for the district's maintenance and
  operations tax effort equal to or less than 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);
               (2)  the greater of the wealth per student that
  generates the amount of maintenance and operations tax revenue per
  weighted student available to the Austin Independent School
  District or a district at the 95th percentile in wealth per student,
  as determined by the commissioner in cooperation with the
  Legislative Budget Board, 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), subject
  to Section 41.093(b-1); or
               (3)  the wealth per student specified under Subdivision
  (1) [$319,500], for the district's maintenance and operations tax
  effort that exceeds the amount of tax effort described by
  Subdivision (2).
         SECTION 4.  Effective September 1, 2018, Section 41.002(a),
  Education Code, is amended to read as follows:
         (a)  A school district may not have a wealth per student that
  exceeds:
               (1)  the wealth per student that generates the amount
  of maintenance and operations tax revenue per weighted student
  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), for the district's
  maintenance and operations tax effort equal to or less than 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);
               (2)  the greater of the wealth per student that
  generates the amount of maintenance and operations tax revenue per
  weighted student available to the Austin Independent School
  District or a district at the 95th percentile in wealth per student,
  as determined by the commissioner in cooperation with the
  Legislative Budget Board, 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), subject
  to Section 41.093(b-1); or
               (3)  the wealth per student specified under Subdivision
  (1) [$319,500], for the district's maintenance and operations tax
  effort that exceeds the amount of tax effort described by
  Subdivision (2).
         SECTION 5.  Section 41.093(b-1), Education Code, is amended
  to read as follows:
         (b-1)  If the guaranteed level of state and local funds per
  weighted student per cent of tax effort under Section
  42.302(a-1)(1) for which state funds are appropriated for a school
  year is an amount at least equal to the greater of the amount of
  revenue per weighted student per cent of tax effort available to the
  Austin Independent School District or the amount available to a
  district at the 95th percentile in wealth per student, as
  determined by the commissioner in cooperation with the Legislative
  Budget Board, the commissioner, in computing the amounts described
  by Subsections (a)(1) and (2) and determining the cost of an
  attendance credit, shall exclude maintenance and operations tax
  revenue resulting from the tax rate described by Section
  41.002(a)(2).
         SECTION 6.  Section 41.099(a), Education Code, is amended to
  read as follows:
         (a)  Section [Sections 41.002(e),] 41.094 applies [, 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 7.  Subchapter A, Chapter 42, Education Code, is
  amended by adding Sections 42.010 and 42.011 to read as follows:
         Sec. 42.010.  COMPREHENSIVE REVIEW OF PUBLIC SCHOOL FINANCE
  WEIGHTS, ALLOTMENTS, AND ADJUSTMENTS. (a) The agency shall
  conduct a comprehensive review of weights, allotments, and
  adjustments under the public school finance system, including all
  current weights, allotments, and adjustments provided under this
  chapter and any additional weights, allotments, and adjustments
  that the agency determines may be appropriate.  The review must
  determine the effectiveness of existing weights, allotments, and
  adjustments in fulfilling the mission of the public education
  system stated in Section 4.001(a) and furthering the state policy
  stated in Section 42.001. At a minimum, the review must determine
  how closely and appropriately each of the following elements
  reflects and provides financing for costs beyond the control of
  school districts:
               (1)  adjustments for costs related to the geographic
  variation in known resource costs and costs of education,
  controlling for the impact of unequalized wealth and hold-harmless
  provisions, and properly reflecting the impact of high
  concentrations of poverty on the compensation that school districts
  must pay to attract and retain teachers of comparable or
  appropriate quality;
               (2)  adjustments for costs related to the size and
  diseconomies of scale of school districts;
               (3)  adjustments for costs related to the varying
  instructional needs and characteristics of students and the extent
  to which the adjustments provide each student with access to
  programs and services that are appropriate to the student's
  educational needs;
               (4)  other factors, in addition to economic status,
  that correlate to student at-risk status and the need for
  compensatory education, and the degree to which those factors
  correspond to additional educational costs; and
               (5)  the manner in which the cost adjustments are
  applied to and affect the overall school finance system.
         (b)  The review of the adjustments described in Subsection
  (a)(1) must:
               (1)  address all uncontrollable costs that can
  reasonably be quantified;
               (2)  consider the qualifications, experience, and
  turnover rate of personnel and the impact of those factors on
  student achievement in considering the adequacy and comparability
  of salaries;
               (3)  properly address the impact of factors that have a
  large impact on certain types of school districts, such as extreme
  isolation, regardless of general state impact;
               (4)  include only factors for which a rational economic
  argument can be made;
               (5)  be carefully constructed to make sure that a cost
  factor does not significantly affect more than one variable; and
               (6)  not be artificially adjusted to meet predetermined
  outcomes and must not use arbitrary limits.
         (c)  In determining whether any additional weights,
  allotments, and adjustments are appropriate under the public school
  finance system, as required by Subsection (a), the agency shall
  include consideration of an additional weight for educational
  services provided to students in prekindergarten on a half-day
  basis and on a full-day basis.
         (d)  The agency may contract with one or more consultants if
  necessary to enable the agency to perform its duties under this
  section.
         (e)  The Legislative Budget Board, the comptroller, the
  state auditor, and any other state agency, official, or personnel
  shall cooperate with the agency in carrying out its duties under
  this section.
         (f)  Not later than December 1, 2018, the agency shall
  provide a report that:
               (1)  states the findings of the review conducted under
  this section; and
               (2)  includes recommendations for updated weights,
  allotments, and adjustments and any other statutory changes
  considered appropriate by the agency.
         (g)  This section expires January 1, 2019.
         Sec. 42.011.  STUDY OF LEGISLATION ON SCHOOL FUNDING. (a)
  After each legislative session, the commissioner shall conduct a
  study assessing the manner in which any statute enacted or amended
  during that legislative session affects the equalized wealth level
  of a school district under Chapter 41 or the Foundation School
  Program under this chapter and whether the standard of neutrality
  described under Section 42.001(b) is maintained.
         (b)  The study under this section must:
               (1)  include an analysis of the effects of legislation
  on each school district in the state; and
               (2)  indicate how a school district compares to other
  districts with respect to:
                     (A)  property wealth per weighted student;
                     (B)  revenue per weighted student;
                     (C)  tax effort; and
                     (D)  revenue per cent of tax effort.
         (c)  The commissioner shall issue a report on the study's
  findings to the governor, the lieutenant governor, the speaker of
  the house of representatives, and the legislature.  The
  commissioner shall make the report available to the public on the
  agency's Internet website.
         SECTION 8.  Section 42.101(a), Education Code, is amended to
  read as follows:
         (a)  For each student in average daily attendance, not
  including the time students spend each day in special education
  programs in an instructional arrangement other than mainstream or
  career and technology education programs, for which an additional
  allotment is made under Subchapter C, a district is entitled to an
  allotment equal to the lesser of $5,440 [$4,765] or the amount that
  results from the following formula:
  A = $5,440 [$4,765] X (DCR/MCR)
  where:
         "A" is the allotment to which a district is entitled;
         "DCR" is the district's compressed tax rate, which is 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
         "MCR" is the state maximum compressed tax rate, which is the
  product of the state compression percentage, as determined under
  Section 42.2516, multiplied by $1.50.
         SECTION 9.  Effective September 1, 2018, Section 42.101,
  Education Code, is amended by amending Subsection (a) and adding
  Subsection (a-3) to read as follows:
         (a)  Subject to adjustment under Subsection (a-3), for [For]
  each student in average daily attendance, not including the time
  students spend each day in special education programs in an
  instructional arrangement other than mainstream or career and
  technology education programs, for which an additional allotment is
  made under Subchapter C, a district is entitled to an allotment
  equal to the lesser of $5,840 [$4,765] or the amount that results
  from the following formula:
  A = $5,840 [$4,765] X (DCR/MCR)
  where:
         "A" is the allotment to which a district is entitled;
         "DCR" is the district's compressed tax rate, which is 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
         "MCR" is the state maximum compressed tax rate, which is the
  product of the state compression percentage, as determined under
  Section 42.2516, multiplied by $1.50.
         (a-3)  Beginning with the 2019-2020 school year, the basic
  allotment provided to a district under Subsection (a) or (b) is
  adjusted annually to increase the allotment by the greater of:
               (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
  changes in the United States Bureau of Labor Statistics Consumer
  Price Index for All Urban Consumers, to the allotment for the
  preceding school year.
         SECTION 10.  Sections 42.152(a) and (c), Education Code, are
  amended to read as follows:
         (a)  For each student who is educationally disadvantaged or
  who is a student who does not have a disability and resides in a
  residential placement facility in a district in which the student's
  parent or legal guardian does not reside, a district is entitled to
  an annual allotment equal to the adjusted basic allotment
  multiplied by 0.25 [0.2], and by 2.41 for each full-time equivalent
  student who is in a compensatory, intensive, or accelerated 
  [remedial and support] program under Section 29.081 because the
  student is pregnant.
         (c)  Funds allocated under this section shall be used to fund
  supplemental programs and services designed to eliminate any
  disparity in performance on assessment instruments administered
  under Subchapter B, Chapter 39, or disparity in the rates of high
  school completion between students at risk of dropping out of
  school, as defined by Section 29.081, and all other students.  
  Specifically, the funds, other than an indirect cost allotment
  established under State Board of Education rule, which may not
  exceed 25 [45] percent, may be used to meet the costs of providing a
  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
  campus at which at least 40 percent of the students are
  educationally disadvantaged.  In meeting the costs of providing a
  compensatory, intensive, or accelerated instruction program under
  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,
  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
  open-enrollment charter school must use funds allocated under
  Subsection (a) for a purpose authorized in this subsection but is
  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
  considered to be a program supplemental to the regular education
  program, and a district may use its compensatory education
  allotment for such a program.
         SECTION 11.  Sections 42.153(a) and (b), Education Code, are
  amended to read as follows:
         (a)  For each student in average daily attendance in a
  bilingual education or special language program under Subchapter B,
  Chapter 29, a district is entitled to an annual allotment equal to
  the adjusted basic allotment multiplied by 0.25 [0.1].
         (b)  Funds allocated under this section, other than an
  indirect cost allotment established under State Board of Education
  rule, which may not exceed 25 percent, must be used in providing
  bilingual education or special language programs under Subchapter
  B, Chapter 29, and must be accounted for under existing agency
  reporting and auditing procedures.
         SECTION 12.  Section 42.251(b), Education Code, is amended
  to read as follows:
         (b)  The program shall be financed by:
               (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
               (3)  [state available school funds distributed in
  accordance with law; and
               [(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 13.  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
  from the available school fund;
               [(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)[,
  and (a)(5)].
         SECTION 14.  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
  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) 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 15.  Effective September 1, 2018, Section
  42.302(a-1), Education Code, is amended to read as follows:
         (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
  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 16.  Section 43.001, Education Code, is amended by
  amending Subsection (c) and adding Subsection (c-1) to read as
  follows:
         (c)  The term "scholastic population" in Subsection (b) or
  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.
         (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. 
         SECTION 17.  Section 45.259(d), Education Code, is amended
  to read as follows:
         (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 18.  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 19.  Except as otherwise provided by this Act:
               (1)  this Act takes effect September 1, 2017, if this
  Act receives a vote of two-thirds of all the members elected to each
  house, as provided by Section 39, Article III, Texas Constitution;
  and
               (2)  if this Act does not receive the vote necessary for
  effect on that date, this Act takes effect on the 91st day after the
  last day of the legislative session.
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