Texas Administrative Code
makes application to all
agreements clear and clarifies the responsibilities of each party. There will
not be an effect on small businesses. There is no anticipated economic cost
to persons who are required to comply with the proposed amendment.
Comments on the proposal may be submitted to Cristina De La Fuente-Valadez,
Accountability Reporting and Research, 1701 North Congress Avenue, Austin,
Texas 78701, (512) 463-9701. Comments may also be submitted electronically
to
rules@tea.state.tx.us
or faxed to (512)
475-3499. All requests for a public hearing on the proposed amendment submitted
under the Administrative Procedure Act must be received by the commissioner
of education not more than 15 calendar days after notice of the proposal has
been published in the
Texas Register
.
The amendment is proposed under the Texas Education Code (TEC), §41.006,
which authorizes the commissioner of education to adopt rules necessary for
the implementation of TEC, Chapter 41, Equalized Wealth Level.
The amendment implements the Texas Education Code, §41.006.
§62.1071.Administration of Wealth Equalization.
(a)-(c)
(No change.)
(d)
Costs to equalize wealth. For each year in which one or
more options to equalize wealth is exercised, the commissioner determines
the cost and the associated cycle.
(1)
Districts purchasing attendance credits from the state
in accordance with TEC, Chapter 41, Subchapter D (Option 3), may obtain a
discount in the form of an early agreement credit in accordance with TEC, §41.098.
The discount is limited to 4.0% of the computed cost of Option 3
before
any discounts are applied
or $80 multiplied by the number of WADA purchased,
whichever is less.
To qualify, the district subject to the provisions
of TEC, Chapter 41, must submit a signed Option 3 agreement to the TEA with
a postmark on or before September 1 of the applicable year.
(2)
Districts paying to educate nonresident students from a
partner district in accordance with TEC, Chapter 41, Subchapter E (Option
4), may obtain a discount in the form of an efficiency credit in accordance
with TEC, §41.121. [
Such discounts may be obtained for certain programs
approved by the commissioner and described in the wealth equalization handbook
published yearly by the commissioner.
] The discount is limited to 5.0%
of the computed cost of Option 4
before any discounts are applied
or $100 multiplied by the district's WADA for TEC, Chapter 41, whichever is
less.
Such discounts may be obtained for the following programs approved
by the commissioner.
(A)
The partner agrees to use at
least 50% of the gain from the sale of WADA for a 30-day extended year program
for all eligible kindergarten through Grade 8 students for the school year
in accordance with TEC, §29.082.
(B)
The partner agrees to use at
least 50% of the gain from the sale of WADA for enhancement of an existing
alternative education program for behavior management for all eligible students
for the school year in accordance with TEC, §37.008. The funds used must
be in excess of amounts expended for the basic operation of the program pursuant
to TEC, §37.008(g).
(C)
The partner agrees to use at
least 50% of the gain from the sale of WADA for a juvenile justice alternative
education program for the school year in accordance with TEC, §37.011.
The expenditures for this program must be used to pay for additional costs
not funded by member districts pursuant to TEC, §37.012.
(D)
The partner agrees to use at
least 50% of the gain from the sale of WADA for a combined program of at least
two of the following programs for the school year: extended year, alternative
education (enhancement of), and juvenile justice alternative education. Each
of the programs must meet the corresponding requirements described in subparagraphs
(A)-(C) of this paragraph.
(E)
The partner agrees to use at
least some portion of the gain from the sale of WADA for combined programs
plus any remaining funds for instructional technology. Any of the three following
programs apply, singly or in any combination, for the school year: extended
year, alternative education, and juvenile justice alternative education. Each
of the programs must meet the corresponding requirements described in subparagraphs
(A)-(D) of this paragraph. In addition to the funds committed to any one or
combination of the programs described in subparagraphs (A)-(D), all of the
remaining gain must be used for instructional technology.
(F)
The partner agrees to use all
of the gain from the sale of WADA for instructional technology. That technology
may involve computer networking of instruction among or between its campuses
and/or from the district or its campuses to an education service center (ESC),
other Internet service provider (ISP), or local telephone company point of
presence (teleco POP). A portion of the gain may be sent to the ESC, ISP,
or teleco POP, as long as the funds are expended for connecting such services.
A portion of the gain may be sent to the ESC for instructional technology
purposes that include the services described in clauses (i)-(iv) of this subparagraph.
If any of the gain is expended in this manner, the district subject to the
provisions of TEC, Chapter 41, may not obtain free or reduced-price instructional
technology services from the service provider. Annual charges to the district
subject to the provisions of TEC, Chapter 41, must be equal to at least the
amount paid by the partner to the service provider for the year for equivalent
services. If this option is exercised, the executive director of the entity
must sign the contract agreement. Instructional technology purposes for which
a portion of the gain may be sent to the ESC include:
(i)
the expansion and/or upgrade of networks, labs,
classroom applications, and related telecommunications systems;
(ii)
the integration of technology into the teaching/learning
process;
(iii)
the acquisition and distribution of Internet
services; or
(iv)
the implementation and/or expansion of distance
learning or other innovative programs.
(G)
The partner agrees to use at
least 50% of the gain from the sale of WADA for an innovative education program.
The gain on the sale of WADA may not be used for general capital outlay unrelated
to improving student performance. The commissioner retains full discretion
to approve or reject the proposed educational program for this purpose.
(H)
Each partner agrees to use
100% of the gain from the sale of WADA to participate in a technology consortium
in accordance with the provisions of TEC, §41.099. At least three partner
districts must be members of the consortium. The district subject to the provisions
of TEC, Chapter 41, may be a member of the consortium but must pay at market
value for all services received. Market value is determined by the consortium,
subject to review by the TEA division responsible for financial audits and
the requirements of paragraph (3) of this subsection. Partner districts must
reside, at least in part, in a county or counties with a population of less
than 40,000. The technology consortium form of Option 4 must be combined with
Option 3, the purchase of attendance credits from the state, in order to enable
the district subject to the provisions of TEC, Chapter 41, to retain its "hold
harmless" status. The gain resulting from the sale of WADA (for all partners
combined) must be limited to 10% of the cost of buying WADA of the district
subject to the provisions of TEC, Chapter 41.
(3)
To the extent that a district
subject to the provisions of TEC, Chapter 41, exercising Option 4 receives
any service or product from an entity that receives a portion of the gain
from an Option 4 arrangement, the price paid for the service or product must
be at fair market value. For the purposes of this requirement, fair market
value is defined as the price that would be paid by any other party had the
gain from the Option 4 arrangement not been applied to reduce the cost.
(4)
Each district subject to the
provisions of TEC, Chapter 41, that exercises Option 4 must disclose to the
commissioner any other contractual or financial arrangement between the district
and its partner(s) or between the district and any other entity that directly
benefits from the distribution of the gain. Any business transaction between
the district subject to the provisions of TEC, Chapter 41, and other entities
must be at a fair market price. A district subject to the provisions of TEC,
Chapter 41, must be prepared to document that any product or service it provides
as part of a financial arrangement with its partners has an open marketplace
that can establish a fair market price, for example, through previous sales
of the product or service to unrelated parties. A district subject to the
provisions of TEC, Chapter 41, may not demand or negotiate a discounted purchase
price from a partner district or other related entity for products or services
provided to the district subject to the provisions of TEC, Chapter 41, that
results in a lower price than would be paid by an unrelated party. A district
subject to the provisions of TEC, Chapter 41, may not make an Option 4 partnership
agreement subject to any separate financial agreement between the districts
that is not contained in the TEC, Chapter 41, agreement.
(5)
[
(3)
] For Options 3 and 4, the projected
cost estimate provided by the commissioner to the district by February of
the year serves as the basis for initial payments made to the state and/or
partner(s). For Option 4, payments to the partner(s) must be made between
February and August of the year but otherwise may adhere to a mutually acceptable
schedule.
(6)
[
(4)
] Unless a school district adopts
the alternative method for calculating wealth per WADA in accordance with
subsection (b) of this section, a school district subject to the provisions
of wealth equalization that pays tuition to another district to educate its
students may apply the cost of the tuition toward the cost of the option chosen
to reduce wealth. The credit amount per student cannot be greater than the
district's cost per WADA. Written documentation must be provided to the commissioner
to verify the total tuition paid and the amount per student. The maximum tuition
amount that may be charged by the receiving district and the state aid reduction
as a result of the tuition charge is described in §61.1012 of this title
(relating to Contracts and Tuition for Education Outside District).
(7)
[
(5)
] For each school district subject
to the provisions of wealth equalization, transitional state aid for professional
staff salaries is computed in accordance with §105.1012 of this title
(relating to Additional State Aid for Professional Staff Salaries). Any amount
earned by a district is deducted as a credit against the amount owed to equalize
wealth. If a credit exceeds an amount owed, the difference is paid to the
district. An initial payment will be made as soon as the TEA has estimated
an assistance amount. A final settle-up will be made during September of the
following year.
(8)
[
(6)
] Initially, the cost to equalize
wealth is projected by the commissioner based on estimates of the district's
WADA for TEC, Chapter 41, and expected tax collections. For districts exercising
Option 3 or 4, the cost estimate may be updated by the commissioner periodically
throughout the year.
(9)
[
(7)
] For Options 3 and 4, the projected
cost estimate provided by the commissioner to the district by February of
the year serves as the basis for initial payments made to the state and/or
partner(s). For Option 4, payments to the partner(s) must be made between
February and August of the year but otherwise may adhere to a mutually acceptable
schedule.
(10)
[
(8)
] For Options 3 and 4, the final
cost to equalize wealth is determined by the commissioner when audited tax
collections and data elements for the calculation of WADA for TEC, Chapter
41, are final and available, after the close of business for the school year.
The calculation of WADA for TEC, Chapter 41, incorporates final values for
WADA for TEC, Chapter 42, and, when applicable, current-year data for the
number of student transfers. The final WADA for TEC, Chapter 42, is based,
in part, on attendance data submitted at year-end through the Public Education
Information Management System (PEIMS). When applicable, student transfer data
are obtained from the PEIMS fall submission. When applicable, final values
for WADA for TEC, Chapter 42, and current-year fall PEIMS data for enrollment
are used in the WADA-to-enrollment ratio that is applied to the number of
transfers to calculate a corresponding WADA.
(11)
[
(9)
] When final costs for the fiscal
year are determined for Options 3 and 4, the payments are compared to the
final cost. Districts that have not sufficiently reduced wealth must remedy
the shortfall in accordance with the directives of the commissioner before
the end of that fiscal year. Districts that have overpaid in the process of
reducing their wealth level will receive either appropriate refunds from the
state and/or partner district(s) or credits against future costs.
(e)
Administrative requirements. Districts taking action to
equalize wealth must abide by all fiscal, procedural, and administrative requirements
[
published yearly by the commissioner in a wealth equalization handbook
including adherence to any adopted schedule and to the submission of forms
and contracts
].
(1)
Unless other definitive action (such as submission of a
contract) has already been taken by a district subject to the provisions of
TEC, Chapter 41, the district must inform the TEA in writing of intended actions
to equalize wealth. A "letter of intent" must be postmarked (or have some
other postal carrier verification of date mailed) by September 1 of the applicable
year.
(2)
Pursuant to TEC, Chapter 41, Subchapters D and E, any contract
submitted for Option 3 or 4 must be submitted to the TEA by certified mail
through the U.S. Postal Service or other common postal carrier.
(3)
Option 3 contracts must be postmarked by September 1 of
each year in order to qualify for the early agreement credit. Option 4 [
contracts
] and [
any
] Option 3 contracts not incorporating
efficiency credits or early agreement credits
[
the discount
]
must be postmarked by
November 15.
[
a date specified in a
schedule published each year by the commissioner in the wealth equalization
handbook.
]
Option 4 contracts seeking efficiency credits must be
postmarked by December 20.
(4)
All contractual arrangements must be approved yearly by
the commissioner, regardless of continuing or long-term arrangements between
contracting parties.
(5)
Contracts and forms submitted to the TEA that require signatures
must be originals.
(6)
All written correspondence pertaining to TEC, Chapter 41,
including contracts and data forms, must be sent to
the TEA division
responsible for state funding.
[
an address published yearly by
the commissioner in the wealth equalization handbook.
]
(f)-(h)
(No change.)
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of
the Secretary of State on June 24, 2002.
TRD-200203940
Cristina De La Fuente-Valadez
Manager, Policy Planning
Texas Education Agency
Earliest possible date of adoption: August 4, 2002
For further information, please call: (512) 463-9701