85R19558 MEW-F     By: Huberty, Zerwas, Turner, H.B. No. 21       King of Hemphill, Dutton, et al.     Substitute the following for H.B. No. 21:     By:  Huberty C.S.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 42.101(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   settings, [or] career and technology education programs, or   technology applications courses approved for high school credit,   for which an additional allotment is made under Subchapter C, a   district is entitled to an allotment equal to the lesser of $4,765   or the amount that results from the following formula:   A = $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 12.  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 13.  Section 42.153(a), Education Code, is 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 0.11 [0.1].          SECTION 14.  The heading to Section 42.154, Education Code,   is amended to read as follows:          Sec. 42.154.  CAREER AND TECHNOLOGY EDUCATION AND TECHNOLOGY   APPLICATIONS ALLOTMENT.          SECTION 15.  Sections 42.154(a), (b), (c), and (e),   Education Code, are amended to read as follows:          (a)  For each full-time equivalent student in average daily   attendance in an approved career and technology education program   in grades eight [nine] through 12, in a technology applications   course approved for high school credit, or in career and technology   education programs for students with disabilities in grades seven   through 12, a district is entitled to:                (1)  an annual allotment equal to the adjusted basic   allotment multiplied by a weight of 1.35; and                (2)  $50, if the student is enrolled in:                      (A)  two or more advanced career and technology   education classes for a total of three or more credits; or                      (B)  an advanced course as part of a tech-prep   program under Subchapter T, Chapter 61.          (b)  In this section, "full-time equivalent student" means   30 hours of contact a week between a student and career and   technology education program or technology applications personnel.          (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 eight [nine] through 12,   technology applications courses approved for high school credit, or   career and technology education programs for students with   disabilities in grades seven through 12 under Sections 29.182,   29.183, and 29.184.          (e)  Out of the total statewide allotment [for career and   technology education] under this section, the commissioner shall   set aside an amount specified in the General Appropriations Act,   which may not exceed an amount equal to one percent of the total   amount appropriated, to support regional career and technology   education planning. After deducting the amount set aside under   this subsection from the total amount appropriated for career and   technology education and technology applications under this   section, the commissioner shall reduce each district's tier one   allotments in the same manner described for a reduction in   allotments under Section 42.253.          SECTION 16.  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 17.  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 18.  Section 42.2518(a), Education Code, as   effective September 1, 2017, is amended to read as follows:          (a)  Beginning with the 2017-2018 school year, a school   district is entitled to additional state aid to the extent that   state and local revenue under this chapter and Chapter 41 is less   than the state and local revenue that would have been available to   the district under Chapter 41 and this chapter as those chapters   existed on September 1, 2015, excluding any state aid or adjustment   in wealth per student that would have been provided under former   Section 41.002(e)-(g), 42.155, 42.160, 42.2513, or 42.2516, if the   increase in the residence homestead exemption under Section 1-b(c),   Article VIII, Texas Constitution, and the additional limitation on   tax increases under Section 1-b(d) of that article as proposed by   S.J.R. 1, 84th Legislature, Regular Session, 2015, had not   occurred.          SECTION 19.  Sections 42.259(c), (d), and (f), Education   Code, are amended to read as follows:          (c)  Payments from the foundation school fund to each   category 2 school district shall be made as follows:                (1)  22 percent of the yearly entitlement of the   district shall be paid in an installment to be made on or before the   25th day of September of a fiscal year;                (2)  18 percent of the yearly entitlement of the   district shall be paid in an installment to be made on or before the   25th day of October;                (3)  9.5 percent of the yearly entitlement of the   district shall be paid in an installment to be made on or before the   25th day of November;                (4)  7.5 percent of the yearly entitlement of the   district shall be paid in an installment to be made on or before the   25th day of April;                (5)  five percent of the yearly entitlement of the   district shall be paid in an installment to be made on or before the   25th day of May;                (6)  10 percent of the yearly entitlement of the   district shall be paid in an installment to be made on or before the   25th day of June;                (7)  13 percent of the yearly entitlement of the   district shall be paid in an installment to be made on or before the   25th day of July; and                (8)  15 percent of the yearly entitlement of the   district shall be paid in an installment to be made after the 5th   day of September and not later than the 10th day of September of the   calendar year following the calendar year of the payment made under   Subdivision (1) [on or before the 25th day of August].          (d)  Payments from the foundation school fund to each   category 3 school district shall be made as follows:                (1)  45 percent of the yearly entitlement of the   district shall be paid in an installment to be made on or before the   25th day of September of a fiscal year;                (2)  35 percent of the yearly entitlement of the   district shall be paid in an installment to be made on or before the   25th day of October; and                (3)  20 percent of the yearly entitlement of the   district shall be paid in an installment to be made after the 5th   day of September and not later than the 10th day of September of the   calendar year following the calendar year of the payment made under   Subdivision (1) [on or before the 25th day of August].          (f)  Except as provided by Subsection (c)(8) or (d)(3),   previously [Previously] unpaid additional funds from prior fiscal   years owed to a district shall be paid to the district together with   the September payment of the current fiscal year entitlement.          SECTION 20.  Sections 42.2591(c) and (e), Education Code,   are amended to read as follows:          (c)  Payments from the foundation school fund to an   open-enrollment charter school under this section shall be made as   follows:                (1)  22 percent of the yearly entitlement of the school   shall be paid in an installment to be made on or before the 25th day   of September of a fiscal year;                (2)  18 percent of the yearly entitlement of the school   shall be paid in an installment to be made on or before the 25th day   of October;                (3)  9.5 percent of the yearly entitlement of the   school shall be paid in an installment to be made on or before the   25th day of November;                (4)  four percent of the yearly entitlement of the   school shall be paid in an installment to be made on or before the   25th day of December;                (5)  four percent of the yearly entitlement of the   school shall be paid in an installment to be made on or before the   25th day of January;                (6)  four percent of the yearly entitlement of the   school shall be paid in an installment to be made on or before the   25th day of February;                (7)  four percent of the yearly entitlement of the   school shall be paid in an installment to be made on or before the   25th day of March;                (8)  7.5 percent of the yearly entitlement of the   school shall be paid in an installment to be made on or before the   25th day of April;                (9)  five percent of the yearly entitlement of the   school shall be paid in an installment to be made on or before the   25th day of May;                (10)  seven percent of the yearly entitlement of the   school shall be paid in an installment to be made on or before the   25th day of June;                (11)  seven percent of the yearly entitlement of the   school shall be paid in an installment to be made on or before the   25th day of July; and                (12)  eight percent of the yearly entitlement of the   school shall be paid in an installment to be made after the 5th day   of September and not later than the 10th day of September of the   calendar year following the calendar year of the payment made under   Subdivision (1) [on or before the 25th day of August].          (e)  Except as provided by Subsection (c)(12), previously   [Previously] unpaid additional funds from prior fiscal years owed   to an open-enrollment charter school shall be paid to the school   together with the September payment of the current fiscal year   entitlement.          SECTION 21.  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 22.  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 school districts to defray   financial hardships resulting from changes made to Chapter 41 and   this chapter that apply after the 2016-2017 school year.          (b)  The commissioner shall award grants under this   subchapter to districts as provided by Section 42.452.          (c)  Funding provided to a district under this subchapter is   in addition to all other funding provided under Chapter 41 and this   chapter.          (d)  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.  AWARD OF GRANTS; AMOUNT. (a) The commissioner   shall award grants to school districts based on the following   formula:   HG = (PL-CL) X (TR) X (TAHG/TEHG)   where:          "HG" is the amount of a district's hardship grant;          "PL" is the amount of funding under previous law to which a   district would be entitled under Chapter 41 and this chapter as   those chapters existed on January 1, 2017, determined using current   school year data for the district;          "CL" is the amount of current law funding under Chapter 41 and   this chapter to which a district is entitled;          "TR" is a district's maintenance and operations tax rate, as   specified by the comptroller's most recent certified report;          "TAHG" is the total funding available for grants under   Section 42.455 for a school year; and          "TEHG" is the sum of the combined amounts for all districts   calculated by applying the formula (PL-CL) X (TR) for each   district.          (b)  A school district's hardship grant awarded under this   subchapter for a school year may not exceed the lesser of:                (1)  the amount equal to 10 percent of the total amount   of funds available for grants under this subchapter for that school   year; or                (2)  the amount by which "PL" exceeds "CL" for that   district for that school year.          (c)  For purposes of calculating the formula under   Subsection (a), the commissioner shall:                (1)  if the value of (PL-CL) for a school district   results in a negative number, use zero for the value of (PL-CL);                (2)  use a maintenance and operations tax rate ("TR")   of $1 for each open-enrollment charter school, each special-purpose   school district established under Subchapter H, Chapter 11, and the   South Texas Independent School District; and                (3)  if (TAHG/TEHG) equals a value greater than one,   use a value of one for (TAHG/TEHG).          (d)  If funds remain available under this subchapter for a   school year after determining initial grant amounts under   Subsection (a), as adjusted to reflect the limits imposed by   Subsection (b), the commissioner shall reapply the formula as   necessary to award all available funds.          Sec. 42.453.  ELIGIBILITY OF OPEN-ENROLLMENT CHARTER   SCHOOL.  An open-enrollment charter school is eligible for a grant   under this subchapter in the same manner as a school district.          Sec. 42.454.  REGIONAL EDUCATION SERVICE CENTERS AND COUNTY   DEPARTMENTS OF EDUCATION NOT ELIGIBLE. A regional education   service center or a county department of education is not eligible   for a grant under this subchapter.          Sec. 42.455.  FUNDING LIMIT. The amount of grants awarded by   the commissioner under this subchapter may not exceed $125 million,   or a greater amount provided by appropriation, for the 2017-2018   school year or $75 million, or a greater amount provided by   appropriation, for the 2018-2019 school year.          Sec. 42.456.  NO ADJUSTMENT BASED ON REVISED DATA. The   commissioner may not adjust the amount of a school district's grant   under this subchapter based on revisions to the district's data   received after a grant has been awarded.          Sec. 42.457.  RULES. The commissioner may adopt rules as   necessary to administer this subchapter.          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 23.  Section 466.355(c), Government Code, as   repealed by Chapter 431 (S.B. 559), Acts of the 83rd Legislature,   Regular Session, 2013, and amended by Chapter 1410 (S.B. 758), Acts   of the 83rd Legislature, Regular Session, 2013, is reenacted and   amended to read as follows:          (c)  The [Each August the] comptroller shall:                (1)  estimate the amount to be transferred to the   foundation school fund on or before September 15; and                (2)  notwithstanding Subsection (b)(4), transfer the   amount estimated in Subdivision (1) to the foundation school fund   before [August] installment payments are made under Section   42.259(c)(8) or (d)(3) [42.259], Education Code.          SECTION 24.  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 25.  The changes made by this Act to Sections 42.259   and 42.2591, Education Code, apply only to a payment from the   foundation school fund that is made on or after September 1, 2018.     A payment to a school district from the foundation school fund that   is made before that date is governed by Sections 42.259 and 42.2591,   Education Code, as those sections existed before amendment by this   Act, and the former law is continued in effect for that purpose.          SECTION 26.  This Act takes effect September 1, 2017.