By: Huberty H.B. No. 21       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 11.158(a), Education Code, is amended to   read as follows:          (a)  The board of trustees of an independent school district   may require payment of:                (1)  a fee for materials used in any program in which   the resultant product in excess of minimum requirements becomes, at   the student's option, the personal property of the student, if the   fee does not exceed the cost of materials;                (2)  membership dues in student organizations or clubs   and admission fees or charges for attending extracurricular   activities, if membership or attendance is voluntary;                (3)  a security deposit for the return of materials,   supplies, or equipment;                (4)  a fee for personal physical education and athletic   equipment and apparel, although any student may provide the   student's own equipment or apparel if it meets reasonable   requirements and standards relating to health and safety   established by the board;                (5)  a fee for items of personal use or products that a   student may purchase at the student's option, such as student   publications, class rings, annuals, and graduation announcements;                (6)  a fee specifically permitted by any other statute;                (7)  a fee for an authorized voluntary student health   and accident benefit plan;                (8)  a reasonable fee, not to exceed the actual annual   maintenance cost, for the use of musical instruments and uniforms   owned or rented by the district;                (9)  a fee for items of personal apparel that become the   property of the student and that are used in extracurricular   activities;                (10)  a parking fee or a fee for an identification card;                (11)  a fee for a driver training course, not to exceed   the actual district cost per student in the program for the current   school year;                (12)  a fee for a course offered for credit that   requires the use of facilities not available on the school premises   or the employment of an educator who is not part of the school's   regular staff, if participation in the course is at the student's   option;                (13)  a fee for a course offered during summer school,   except that the board may charge a fee for a course required for   graduation only if the course is also offered without a fee during   the regular school year;                (14)  a reasonable fee for transportation of a student   who lives within two miles of the school the student attends to and   from that school[, except that the board may not charge a fee for   transportation for which the school district receives funds under   Section 42.155(d)]; or                (15)  a reasonable fee, not to exceed $50, for costs   associated with an educational program offered outside of regular   school hours through which a student who was absent from class   receives instruction voluntarily for the purpose of making up the   missed instruction and meeting the level of attendance required   under Section 25.092[; or                [(16)     if the district does not receive any funds under   Section 42.155 and does not participate in a county transportation   system for which an allotment is provided under Section 42.155(i),   a reasonable fee for the transportation of a student to and from the   school the student attends].          SECTION 2.  Section 29.153(c), Education Code, is amended to   read as follows:          (c)  A prekindergarten class under this section shall be   operated on a half-day basis. A district is not required to provide   transportation for a prekindergarten class[, but transportation,   if provided, is included for funding purposes as part of the regular   transportation system].          SECTION 3.  Sections 29.918(a) and (b), Education Code, are   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.          (b)  A school district or open-enrollment charter school to   which this section applies may not spend or obligate more than 25   percent of the district's or charter school's compensatory   education allotment [or high school allotment] unless the   commissioner approves the plan submitted under Subsection   (a).  The commissioner shall complete an initial review of the   district's or charter school's plan not later than March 1 of the   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 4.  Subchapter C, Chapter 30, Education Code, is   amended by adding Section 30.0561 to read as follows:          Sec. 30.0561.  TRANSPORTATION ALLOTMENT. The Texas School   for the Deaf is entitled to a transportation allotment paid from the   foundation school fund. The commissioner shall determine the   appropriate allotment.          SECTION 5.  Section 30.087(c), Education Code, is amended to   read as follows:          (c)  A school district may receive an allotment paid from the   foundation school fund for transportation of students   participating in a regional day school program, as determined by   the commissioner [in the same manner as an allotment for the   transportation of other special education students].          SECTION 6.  Section 34.007, Education Code, is amended by   adding Subsection (c) to read as follows:          (c)  A county transportation system is not entitled to   receive funding for transportation costs directly from the state.     Funding for a county transportation system is provided by each   school district participating in the county transportation system   in accordance with the terms of the interlocal contract under   Chapter 791, Government Code, under which the county provides   transportation services for the participating districts.          SECTION 7.  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 Section 51.3062.     The questions adopted under this subsection must be developed in a   manner consistent with any college readiness standards adopted   under Section [Sections 39.233 and] 51.3062.          SECTION 8.  Section 41.099(a), Education Code, is amended to   read as follows:          (a)  Sections [41.002(e),] 41.094, 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 9.  Section 41.257, Education Code, is amended to   read as follows:          Sec. 41.257.  APPLICATION OF SMALL AND SPARSE ADJUSTMENTS   [AND TRANSPORTATION ALLOTMENT]. The budget of the consolidated   district must apply the benefit of the adjustment or allotment to   the schools of the consolidating district to which Section 42.103   or[,] 42.105[, or 42.155] would have applied in the event that the   consolidated district still qualifies as a small or sparse   district.          SECTION 10.  Section 42.006(a-1), Education Code, is amended   to read as follows:          (a-1)  The commissioner by rule shall require each school   district and open-enrollment charter school to report through the   Public Education Information Management System information   regarding the number of students enrolled in the district or school   who are identified as having dyslexia or related disorders. The   agency shall maintain the information provided in accordance with   this subsection.          SECTION 11.  Section 42.151(h), Education Code, is amended   to read as follows:          (h)  Funds allocated under this section, other than an   indirect cost allotment established under State Board of Education   rule or amounts made available for the transportation of special   education students, must be used in the special education program   under Subchapter A, Chapter 29.          SECTION 12.  Section 42.154(c), Education Code, is amended   to read as follows:          (c)  Funds allocated under this section, other than an   indirect cost allotment established under State Board of Education   rule or amounts made available for the transportation of career and   technology education students, must be used in providing career and   technology education programs in grades nine through 12 or career   and technology education programs for students with disabilities in   grades seven through 12 under Sections 29.182, 29.183, and 29.184.          SECTION 13.  Section 42.1541(a), Education Code, is amended   to read as follows:          (a)  For the 2017-2018 and subsequent school years, the [The]   State Board of Education shall by rule revise [increase] the   indirect cost allotments established under Sections 42.151(h),   42.152(c), 42.153(b), and 42.154(c) [42.154(a-1) and (c)] and in   effect for the 2016-2017 [2010-2011] school year to reflect any   increase in the percentage of total maintenance and operations   funding represented by the basic allotment [in proportion to the   average percentage reduction in total state and local maintenance   and operations revenue provided under this chapter for the   2011-2012 school year] as a result of [S.B. Nos. 1 and 2,] Acts of   the 85th [82nd] Legislature, Regular [1st Called] Session, 2017    [2011].          SECTION 14.  Subchapter C, Chapter 42, Education Code, is   amended by adding Section 42.1561 to read as follows:          Sec. 42.1561.  ALLOTMENT FOR STUDENT WITH DYSLEXIA OR   RELATED DISORDER. (a) Subject to Subsection (b), for each student   that a school district serves who has been identified as having   dyslexia or a related disorder, the district is entitled to an   annual allotment equal to the district's adjusted basic allotment   as determined under Section 42.102 or Section 42.103, as   applicable, multiplied by 0.1 for each school year or a greater   amount provided by appropriation.          (b)  A school district is entitled to the allotment under   Subsection (a) only for a student who:                (1)  is receiving instruction that:                      (A)  meets applicable dyslexia program criteria   established by the agency; and                      (B)  is provided by a person with specific   training in providing that instruction; or                (2)  has received the instruction described by   Subdivision (1) and is permitted, on the basis of having dyslexia or   a related disorder, to use modifications in the classroom and   accommodations in the administration of assessment instruments   under Section 39.023.          (c)  Funds allotted under this section must be used in   providing services to students with dyslexia or related disorders.          (d)  A school district may receive funding for a student   under this section and Section 42.151 if the student satisfies the   requirements of both sections.          (e)  Not more than five percent of a district's students in   average daily attendance are eligible for funding under this   section.          SECTION 15.  Section 42.302(a), Education Code, is 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.          SECTION 16.  Chapter 42, Education Code, is amended by   adding Subchapter H to read as follows:   SUBCHAPTER H. FINANCIAL HARDSHIP TRANSITION PROGRAM          Sec. 42.451.  FINANCIAL HARDSHIP GRANTS. (a) From amounts   appropriated for this subchapter, the commissioner may administer a   grant program that provides grants to eligible school districts   that have suffered financial hardship.          (b)  A district seeking a grant under this subchapter must   apply to the commissioner in the manner and within the time   prescribed by the commissioner. A district may only submit one   application each year.          (c)  In awarding grants under this subchapter, the   commissioner shall give priority to districts experiencing   financial hardship as provided by Section 42.453.          (d)  Funding provided to a district under this subchapter is   in addition to all other funding provided under Chapter 41 and this   chapter.          (e)  The commissioner may obtain additional information as   needed from a district or other state or local agency to make   determinations in awarding grants under this subchapter.          Sec. 42.452.  ELIGIBILITY. (a) A school district is   eligible to receive a grant under this subchapter if the   commissioner determines that the amount of the district's state and   local maintenance and operations revenue per student in weighted   average daily attendance for the school year for which the district   applies for a grant is less than the amount of the district's state   and local maintenance and operations revenue per student in   weighted average daily attendance for the 2016-2017 school year.          (b)  For purposes of making the determinations required by   Subsection (a), the commissioner shall:                (1)  use the greater of a district's adopted   maintenance and operations tax rate for the 2016 tax year or the tax   year for which the district applies for a grant;                (2)  if a district has a compressed tax rate, as defined   by Section 42.101, of less than $1, include all additional tax   effort available to the district in calculating its compressed tax   rate under Section 42.101(a-1) for the 2016-2017 school year and   the school year for which the district applies for a grant;                (3)  exclude any decrease in property value   attributable to a reduction in value under Chapter 313, Tax Code, or   to any other reduction in value for which a district is held   harmless; and                (4)  for the school year for which the district applies   for a grant, include any funds received by the district under   Chapter 41 or this chapter that offset a loss in revenue, including:                      (A)  a reduction in the total amount required to   be paid by a district for attendance credits under Section 41.0931;   or                      (B)  an adjustment under Subchapter E.          (c)  Based on the determinations made under Subsection (a),   the commissioner shall calculate a district's loss of revenue per   student in weighted average daily attendance and the percentage   decline in funding between the 2016-2017 school year and the school   year for which the district applies for a grant.          Sec. 42.453.  PRIORITY FOR GRANTS. (a) The commissioner   shall award grants by giving priority to school districts in the   following order:                (1)  first, to districts for which the loss of revenue   is the result of the loss of state aid that would have been provided   under former Section 42.2516, as that section existed on January 1,   2017;                (2)  second, to districts for which the loss of revenue   is a result of the changes made by _.B. No. ___, Acts of the 85th   Legislature, Regular Session, 2017; and                (3)  third, to districts for which the loss of revenue   is the result of other financial hardships described in the   district's grant application.          (b)  The commissioner shall rank each district's grant   application according to the highest priority applicable to the   district.          (c)  In each priority category, the commissioner shall rank   the application of the district with the greatest percentage   decline in revenue first and the application of the district with   the smallest percentage decline last.          Sec. 42.454.  AWARD OF GRANTS; AMOUNT. (a)  The commissioner   shall award grants to school districts based on the priority   category provided under Section 42.453 and the district's ranking   in the priority category.          (b)  Subject to Sections 42.455 and 42.456, the commissioner   shall award each district a grant in an amount equal to the   difference between the district's state and local maintenance and   operations revenue per student in weighted average daily attendance   for the 2016-2017 school year and the school year for which the   grant is awarded, multiplied by the number of students in weighted   average daily attendance during the school year for which the grant   is awarded.          Sec. 42.455.  LIMITATION ON GRANT AMOUNT. A school district   may not receive a grant that exceeds the lesser of:                (1)  the amount determined under Section 42.454(b); or                (2)  the amount that would increase the district's   revenue per student in weighted average daily attendance to an   amount that is equal to   125 percent of the average state and local   maintenance and operations revenue per student in weighted average   daily attendance for the 2016-2017 school year.          Sec. 42.456.  FUNDING LIMIT. (a) The amount appropriated   for grants under this subchapter may not exceed $100 million in a   school year. If the total amount of grants awarded for a school   year exceeds the amount appropriated for purposes of this   subchapter, the commissioner shall reduce each school district's   grant proportionally.          (b)  Notwithstanding Section 42.455, a district may not   receive a grant under this subchapter for a school year in an amount   that is greater than 10 percent of the total amount of funds   available under this subchapter for that year.          Sec. 42.457.  RULES. The commissioner may adopt rules as   necessary to administer this subchapter, including rules   establishing eligibility criteria for a school district to receive   a grant.          Sec. 42.458.  DETERMINATION FINAL. A determination by the   commissioner under this subchapter is final and may not be   appealed.          Sec. 42.459.  EXPIRATION. This subchapter expires September   1, 2019.          SECTION 17.  The following provisions of the Education Code   are repealed:                (1)  Section 29.097(g);                (2)  Section 29.098(e);                (3)  Section 34.002(c);                (4)  Section 39.233;                (5)  Section 39.234;                (6)  Sections 41.002(e), (f), and (g);                (7)  Section 42.1541(c);                (8)  Section 42.155;                (9)  Section 42.160; and                (10)  Section 42.2513.          SECTION 18.  This Act takes effect September 1, 2017.