Part 2. TEXAS EDUCATION AGENCY
Subchapter AA. COMMISSIONER'S RULES ON SCHOOL FINANCE
The Texas Education Agency (TEA) adopts an amendment to §61.1012, concerning contracts and tuition. The amendment is adopted with a non-substantive, technical change to the proposed text as published in the January 25, 2008, issue of the Texas Register (33 TexReg 643). The adopted amendment modifies the existing rule to reflect changes in law made by House Bill (HB) 1, 79th Texas Legislature, Third Called Session, 2006.
Through 19 TAC §61.1012, adopted to be effective September 7, 2000, the commissioner exercised rulemaking authority relating to contracts for tuition outside a school district. In accordance with Texas Education Code (TEC), §25.039 and §42.106, the current rule establishes definitions, explains tuition charges for transfer students, and describes the maximum tuition amount allowed for property value adjustment. The rule was last amended to be effective March 28, 2004, to reflect changes in statute made by HB 1619, 78th Texas Legislature, 2003. These changes modified TEC, §25.039 and §42.106, to allow a district to charge tuition at a rate higher than the rate limit established in statute, yet limited a district's tuition-related adjustments to property value to adjustments prescribed by the calculated limit.
The adopted amendment to 19 TAC §61.1012 incorporates new elements of the state funding system that were adopted in HB 1, 79th Texas Legislature, Third Called Session, 2006, and delineates the revised tuition calculation to reflect those changes. The adopted amendment permits a district to continue receiving the adjustment to property values to the extent that the district is reimbursed for its tuition costs. The adopted amendment limits the use of the adjusted property values so that a district is not reimbursed for tuition costs more than once.
The adopted amendment also removes several expired provisions and updates references to statutory citations.
A non-substantive, technical correction was made at adoption in subsection (b)(2) to lowercase the word "fund" in the phrase "interest and sinking fund." This correction is consistent with other references to the phrase in 19 TAC Chapter 61.
The TEA has determined that the adopted amendment will have no adverse economic impact for small businesses and microbusinesses; therefore, no regulatory flexibility analysis, specified in Texas Government Code, §2006.002, is required.
The public comment period on the proposal began on January 25, 2008, and ended February 24, 2008. Following is a summary of public comments and corresponding agency responses regarding the proposed amendment to 19 TAC Chapter 61, School Districts, Subchapter AA, Commissioner's Rules on School Finance, §61.1012, Contracts and Tuition for Education Outside District.
Comment. Representatives of Moak, Casey & Associates and O'Hanlon, McCollom & Demerath commented that the commissioner does not have authority to adopt the proposed amendment to 19 TAC §61.1012 under the statutory authority cited in the proposal (TEC, §25.039 and §42.106, and HB 1, Section 1.22, 79th Texas Legislature, Third Called Session, 2006).
Agency Response. The agency disagrees. First, the commissioner has explicit rulemaking authority in TEC, §25.039(b), to adopt rules regarding the calculation of the tuition charge that may be used for the adjustment of property values. The existing rule includes language that describes how the maximum tuition is used to adjust property values for the purpose of reimbursing tuition paid by districts that must pay tuition. The proposed rule amendment explains how that adjusted value will be used in the calculation of state funding subsequent to the implementation of HB 1.
Second, the commissioner was also explicitly authorized to adopt rules for the implementation of HB 1, 79th Texas Legislature, Third Called Session, 2006, in TEC, §42.2516(k). The calculation of state funding, particularly the funding due under TEC, §42.302, was affected significantly by the implementation of the bill.
Third, HB 1, Section 1.22, authorized the commissioner to "treat a reference to a tax rate of $1.50 in Chapter 41 or 42, Education Code, or in a rule implementing those chapters (emphasis added) . . . as a different tax rate consistent with the effect of reducing school district tax rates." Thus, the commissioner is authorized to treat any reference to $1.50 in Chapters 41 or 42, or in rules that implement those chapters, as a different tax rate. Section 42.106 is one of those sections authorized for adjustment in HB 1. The statute and rule both provide that districts that pay tuition will be treated differently from districts that do not. The proposed rule amendment does not change that approach.
Finally, the authors of HB 1 have expressed their intention to the agency in a letter specifically stating that the "purpose of the adjustment was to reimburse districts for tuition reasonably required by a receiving district." Further, the letter clearly states that it was not their intention to create a situation in which a district receives state funds "far in excess of any reasonable amount of tuition paid." The letter from the authors also confirms their understanding of the agency's rulemaking authority under HB 1 to make such an adjustment.
Comment. Representatives of Moak, Casey & Associates and O'Hanlon, McCollom & Demerath commented that adopting a rule at this time to impact the 2006-2007 school year is inappropriate as that school year is completed, audits have been submitted, and the agency approved tuition agreement contracts several months ago.
Agency Response. The agency disagrees. There have not been any changes to the 2006-2007 tuition limits that were posted in the spring of 2006, before the passage of HB 1. The agency is not planning to change the tuition limits for the 2006-2007 school year, but will change the way that the property value adjustment is applied. The amendment will affect only the application of the property value adjustment, not the tuition amount that can be charged. Additionally, the 2006-2007 school year remains subject to adjustment under the "settle-up" process authorized in TEC, §42.253.
Comment. Representatives of Moak, Casey & Associates and O'Hanlon, McCollom & Demerath commented that adopting a rule at this time to impact the 2007-2008 school year is inappropriate as that school year is partially completed and contracts related to tuition agreements were executed before the amendment to the rule was proposed.
Agency Response. The agency disagrees. Due to the proposed amendment, the tuition rates for 2007-2008 were maintained at 2006-2007 levels. The tuition limits for 2007-2008 will not be changed during the school year. New limits for 2008-2009 that conform to the amendment will be published in the spring of 2008.
Comment. Concerning §61.1012(c)(1)(A) and (B), representatives of Moak, Casey & Associates and O'Hanlon, McCollom & Demerath commented that the commissioner does not have the statutory authority to elect not to apply the taxable values, as adjusted by §42.106, in calculating state aid for the purposes of Chapter 42.
Agency Response. The agency disagrees. TEC, §42.106, was written before the passage of HB 1. That section did not anticipate the current school finance structure, in which there are additional tiers of enrichment beyond the school finance system that included reimbursement for tuition paid to another district. In addition, HB 1 provided rulemaking authority with regard to the calculation of funding due under TEC, §42.302, which is intrinsically linked to §42.106.
Comment. Concerning §61.1012(c)(1)(C), representatives of Moak, Casey & Associates and O'Hanlon, McCollom & Demerath commented that the subparagraph exceeds the authority provided to the commissioner by HB 1 to adjust tax rates in certain state aid calculations related to tax compression. The comment stated that HB 1, which specifies that the commissioner can treat a reference to a $1.50 tax rate as a different tax rate for the purpose of reducing school district tax rates to the state compression percentage rate, does not allow the commissioner to select any rate required to limit a school finance benefit to a school district.
Agency Response. The agency disagrees. The amended rule is specifically designed not to require districts to levy taxes in the enrichment tiers in order to be fully reimbursed for their tuition costs. It is not intended to limit any legitimate school finance benefit to a school district.
Comment. Representatives of Moak, Casey & Associates and O'Hanlon, McCollom & Demerath commented that allowing the commissioner to use the adjusted values in the calculation of state aid for taxes collected below the compressed rate (Tier II level 1) and the unadjusted values in the calculation of state aid for taxes collected above the compressed rate (Tier II levels 2 and 3) in the proposed rule will eliminate any impact of the value adjustments in 2007-2008 and after.
Agency Response. The agency disagrees. The amended rule will provide a mechanism that fully reimburses the sending school district for the tuition it pays to the receiving school district. The purpose is to ensure that districts are fully reimbursed for their tuition payments at the compressed tax rate level. The amendment is designed specifically so that school districts are not required to levy taxes above the compressed tax rate in order to be reimbursed for their tuition.
The amendment is adopted under the Texas Education Code, §25.039 and §42.106, which authorize the commissioner of education to by rule specify the amount of tuition to be paid under contract for education of students outside a district. House Bill 1, Section 1.22, 79th Texas Legislature, Third Called Session, 2006, authorizes the commissioner to adopt rules to implement that legislation.
The amendment implements the Texas Education Code, §25.039 and §42.106, and House Bill 1, Section 1.22, 79th Texas Legislature, Third Called Session, 2006.
§61.1012.Contracts and Tuition for Education Outside District.
(a) Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise.
(1) Home district--District of residence of a transferring student.
(2) Receiving district--District to which a student is transferring for the purpose of obtaining an education.
(3) Tuition--Amount charged to the home district by the receiving district to educate the transfer student.
(b) Tuition charge for transfer students. For the purposes of adjusting the property value of the home district as authorized by Texas Education Code (TEC), §42.106, the amount of tuition that may be attributed to a home district for a transfer student in payment for that student's education may not exceed an amount per enrollee calculated for each receiving district. The calculated limit applies only to tuition paid to a receiving district for the education of a student at a grade level not offered in the home district. Tuition may be set at a rate higher than the calculated limit if both districts enter a written agreement, but the calculated tuition limit will be used in the calculation of adjusted property value for the home district. The calculation will use the most currently available data in an ongoing school year to determine the limit that applies to the subsequent school year. For purposes of this section, the number of students enrolled in a district will be appropriately adjusted to account for students ineligible for the Foundation School Program funding and those eligible for half-day attendance.
(1) Excess maintenance and operations (M&O) revenue per enrollee. A district's excess M&O revenue per enrollee is defined as the sum of state aid in accordance with TEC, Chapter 42, Subchapters B, C, and F, plus the state aid generated in accordance with TEC, §42.2516(b), and any reductions to state aid made in accordance with TEC, §42.2516(g) and §42.2516(h). These state aid amounts are added to M&O tax collections, and the sum is divided by enrollment to determine the amount of total state and local revenue per enrolled student. The amount of state aid gained by the addition of one transfer student is subtracted from the total amount of state and local revenue per student to determine the revenue shortfall created by the addition of one student. M&O taxes exclude the local share of any lease purchases funded in the Instructional Facilities Allotment (IFA) as referenced in TEC, Chapter 46, Subchapter A.
(A) The data for this calculation are derived from the Public Education Information Management System (PEIMS) fall data submission (budgeted M&O tax collections and student enrollment) and the Legislative Payment Estimate (LPE) data (Foundation School Program (FSP) student counts and property value).
(B) The state aid gained by the receiving district from the addition of one transfer student is computed by the commissioner of education. The calculation assumes that the transfer student participates in the special programs at the average rate of other students in the receiving district.
(2) Excess debt revenue per enrollee. A district's excess debt revenue per enrollee is defined as interest and sinking fund (I&S) taxes budgeted to be collected that surpass the taxes equalized by the IFA pursuant to TEC, Chapter 46, Subchapter A, and the Existing Debt Allotment (EDA) pursuant to TEC, Chapter 46, Subchapter B, divided by enrollment.
(A) The local share of the IFA for bonds is subtracted from debt taxes budgeted to be collected as reported through PEIMS. The local share of the EDA is subtracted from debt taxes budgeted to be collected as reported through PEIMS only if the district receives a payment for the state share of EDA.
(B) The estimate of enrollment includes transfer students.
(3) Base tuition limit. The base tuition limit per transfer student for the receiving district is a percentage of its state and local entitlement per enrollee from both tiers of the FSP. The entitlement includes the Texas Education Agency's estimate for the current year for the total of allotments in accordance with TEC, Chapter 42, Subchapters B and C, plus the state and local shares of the guaranteed yield allotment (GYA) in accordance with TEC, Subchapter F, which includes additional state aid for tax reduction in accordance with TEC, §42.2516(b).
(A) For this purpose, the GYA is calculated as the product of the guaranteed level (GL) multiplied by weighted average daily attendance (WADA), then multiplied by district tax rate (DTR), and finally multiplied by 100 for tax effort that is described in TEC, §42.302(a-1) and (a-3), as applicable.
(B) Beginning with the 2008-2009 school year, the GL paid in accordance with TEC, §42.302(a-1)(2), is applicable to the first $.06 by which the district's M&O tax rate exceeds the rate equal to the district's 2005 adopted tax rate and the state compression rate, as determined under TEC, §42.2516(a).
(C) For the 2006-2007 and 2007-2008 school years, the GL paid in accordance with TEC, §42.302(a-1)(2), is applicable to the first $.04 by which the district's M&O tax rate exceeds the rate equal to the district's 2005 adopted tax rate and the state compression rate, as determined under TEC, §42.2516(a). This subparagraph expires September 1, 2008.
(4) Calculated tuition limit. The calculated tuition limit is the sum of the excess M&O revenue per enrollee, the excess debt revenue per enrollee, and the base tuition limit, as calculated in subsections (b)(1), (b)(2), and (b)(3) of this section, respectively.
(5) Notification and appeal process. In the spring of each school year, the commissioner will provide each district with its calculated tuition limit and a worksheet with a description of the derivation process. A district may appeal to the commissioner if it can provide evidence that the use of projected student counts from the LPE in making the calculation is so inaccurate as to result in an inappropriately low authorized tuition charge and undue financial hardship. A district that used significant nontax sources to make any of its debt service payments during the base year for the computation may appeal to the commissioner to use projections of its tax collections for the year for which the tuition limit will apply. The commissioner's decision regarding an appeal is final.
(c) Maximum tuition amount in property value adjustment. The maximum tuition amount to be used in the adjustment to property value is limited to the amount per student computed in subsection (b)(4) of this section.
(1) The adjusted property values will be applied to the calculation of state aid as described in the following subparagraphs.
(A) Beginning with the 2008-2009 school year and subsequent school years, this adjustment to property values will be made in the calculation of state aid in accordance with TEC, §42.302(a-1)(1). Unadjusted property values will be used to calculate state aid in accordance with TEC, §42.302(a-1)(2) and (a-1)(3).
(B) For the 2006-2007 and the 2007-2008 school years, this adjustment to property values will be made in the calculation of state aid in accordance with TEC, §42.302(a-3)(1). Unadjusted property values will be used to calculate state aid in accordance with TEC, §42.302(a-3)(2) and (a-1)(3). This subparagraph expires September 1, 2008.
(C) The tax rate used to calculate the adjustment to property values will be adjusted to ensure that the property value adjustment provides sufficient state aid to cover the cost of the maximum tuition amount or the actual tuition amount, whichever is lesser.
(2) The adjustment to property values of the home district may not result in an increase of revenue to the home school district that exceeds 10% of the total tuition paid to the receiving district to educate the transfer student(s).
This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on April 14, 2008.
TRD-200801924
Cristina De La Fuente-Valadez
Director, Policy Coordination
Texas Education Agency
Effective date: May 4, 2008
Proposal publication date: January 25, 2008
For further information, please call: (512) 475-1497
The Texas Education Agency (TEA) adopts the repeal of and new §61.1014, concerning school finance. The repeal and new section are adopted without changes to the proposal as published in the February 8, 2008, issue of the Texas Register (33 TexReg 1051) and will not be republished. The repealed section addressed the determination of Foundation School Program (FSP) gains for additional state aid for school employee benefits. The adopted repeal and new rule clarify and expand the description given in rule of the methods the TEA uses to determine, for each school district and open-enrollment charter school, eligibility to receive additional state aid to pay contributions under a group health insurance plan.
Through 19 TAC §61.1014, adopted to be effective December 2, 2001, the commissioner exercised rulemaking authority relating to determination of FSP gains. These funds are to be used by eligible school districts and open-enrollment charter schools that participate in a group health insurance plan. The adopted actions repeal the provisions in 19 TAC §61.1014, Determination of Foundation School Program Gains, from rule and specify the determination methods in new 19 TAC §61.1014, Additional State Aid for School Employee Benefits.
The repealed 19 TAC §61.1014, Determination of Foundation School Program Gains, described the methods the TEA used to determine, for each school district and open-enrollment charter school, the amount of gain from modifications to the school finance formulas enacted by the 77th Texas Legislature, 2001. The repealed rule also stated the times at which TEA made preliminary and final determinations of gains.
Adopted new 19 TAC §61.1014, Additional State Aid for School Employee Benefits, clarifies and expands the description of the methods the TEA uses to determine the FSP gains, as well as explicitly states the formula elements. The adopted new rule also continues to set forth that the commissioner will provide reports that illustrate the computation of estimates and make preliminary and final determinations of gains.
The TEA has determined that the adopted repeal and new section will have no adverse economic impact for small businesses and microbusinesses; therefore, no regulatory flexibility analysis, specified in Texas Government Code, §2006.002, is required.
The public comment period on the proposal began February 8, 2008, and ended March 9, 2008. No public comments were received.
The repeal is adopted under Texas Education Code, §42.2514, which authorizes the commissioner of education to adopt rules to implement additional state aid for school employee benefits; and Texas Education Code, §42.260, which authorizes the commissioner to adopt rules to implement use of certain funds due to the increase made by House Bill 3343, 77th Texas Legislature, Regular Session, 2001.
The repeal implements Texas Education Code, §42.2514 and §42.260.
This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on April 14, 2008.
TRD-200801926
Cristina De La Fuente-Valadez
Director, Policy Coordination
Texas Education Agency
Effective date: May 4, 2008
Proposal publication date: February 8, 2008
For further information, please call: (512) 475-1497
The new section is adopted under Texas Education Code, §42.2514, which authorizes the commissioner of education to adopt rules to implement additional state aid for school employee benefits; and Texas Education Code, §42.260, which authorizes the commissioner to adopt rules to implement use of certain funds due to the increase made by House Bill 3343, 77th Texas Legislature, Regular Session, 2001.
The new section implements Texas Education Code, §42.2514 and §42.260.
This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on April 14, 2008.
TRD-200801925
Cristina De La Fuente-Valadez
Director, Policy Coordination
Texas Education Agency
Effective date: May 4, 2008
Proposal publication date: February 8, 2008
For further information, please call: (512) 475-1497
The Texas Education Agency (TEA) adopts an amendment to §61.1032, concerning school facilities. The amendment is adopted without changes to the proposed text as published in the February 8, 2008, issue of the Texas Register (33 TexReg 1053) and will not be republished. The section addresses provisions relating to the instructional facilities allotment (IFA). The adopted amendment modifies the calculation of a district's wealth per student for districts affected by a defense base realignment, based on changes to statutory language, in accordance with Senate Bill (SB) 962, 80th Texas Legislature, 2007. The adopted amendment also incorporates other updates and revisions for the IFA program, such as the addition of new definitions, establishment of procedures and time limits for reporting changes, and explanations of present value savings calculations and the effects of refinancing.
Through 19 TAC §61.1032, adopted to be effective October 13, 1997, the commissioner exercised rulemaking authority relating to assistance with payment of instructional facility debt. The current provisions include procedural and other requirements that districts applying for and receiving assistance must follow, debt eligibility requirements, limitations on assistance, a description of the data sources used in making assistance determinations, and procedures for payment of assistance.
SB 962, 80th Texas Legislature, 2007, amended the Texas Education Code (TEC), §46.006, to reduce a district's wealth per student if the district must construct, acquire, or renovate instructional facilities as a result of a military base realignment. In accordance with this change, the adopted amendment to 19 TAC §61.1032 adds new language in subsection (m)(2)(D) to modify the calculation of wealth per student for districts that meet the stipulations set forth in amended TEC, §46.006.
The adopted amendment to 19 TAC §61.1032 also incorporates the following updates and revisions.
Subsection (a) is revised to modify the definition of debt service in paragraph (4) and to add new paragraph (6) to define the term "interest rate management agreement."
Subsection (b) is revised to clarify that a separate application must be completed for each debt issue or lease-purchase agreement proposed for funding.
Subsection (d) is revised to clarify debt eligibility requirements, including the addition of new language in paragraphs (6) and (7) and new paragraph (8). Paragraph (6) addresses refinancing bonded debt. Paragraph (7) specifies reporting requirements that a district must follow when it makes a change to any IFA-supported bonds or IFA-supported lease-purchase agreement. New paragraph (8) establishes a state aid penalty for failure to disclose such a change and explains how IFA eligibility is regained after it has been lost as a result of failing to report a change.
Subsection (d) also is revised to add new paragraph (9) to address refunding bonds. New paragraph (9)(C) defines present-value savings and requires a district's financial advisor to certify present-value savings. New paragraph (9)(D) explains that a conversion of the period, mode, or index used to determine the interest rate for eligible debt will not be considered a refunding of the debt. New paragraphs (9)(E) and (9)(F) explain how the refinancing of debt multiple times may affect its eligibility for IFA aid and cause it to be considered for conversion to Existing Debt Allotment eligibility.
Subsequent paragraphs in subsection (d) are renumbered and updated accordingly. Changes in the renumbered paragraphs include revisions in new paragraph (10)(B) to remove from IFA eligibility any debt service associated with a lease-purchase agreement that has been refinanced for a term of fewer than eight years. Also, new paragraph (13) addresses debt entered into through an interest rate management agreement.
Subsection (f) is revised to address potential increased IFA support.
Subsection (g) is revised to clarify how a change in debt service requirements may affect the allotment awarded.
Subsection (h) is revised by modifying paragraph (6) and adding new paragraph (7). The modification to paragraph (6) requires that adjustments to state assistance for any reason be requested within a three-year time limit. New paragraph (7) requires that a district submit an up-to-date debt service schedule after any financing activity in order for bond issues and lease-purchase agreements and their related debt service payments to remain eligible to receive IFA state assistance.
Subsection (i) is revised to establish a method for allocation of debt service between eligible and ineligible categories.
Subsection (j) is revised by modifying paragraph (1) and adding new paragraph (6). The modification to paragraph (1) explains that requests for payments and/or adjustments submitted to TEA after December 15 will be processed with the payments due for the following fiscal year. New paragraph (6) requires that adjustments to state assistance for any reason be requested within a three-year time limit.
Subsections (k), (l), and (p) are revised to incorporate technical edits.
Subsection (s) is revised to clarify supplemental filings for fixed-rate bonds.
Subsection (t) is revised to require that a district notify the commissioner of IFA-related financing activities by submitting an amended application packet. New paragraph (2) defines the materials that make up a complete amended application packet.
The TEA has determined that the adopted amendment will have no adverse economic impact for small businesses and microbusinesses; therefore, no regulatory flexibility analysis, specified in Texas Government Code, §2006.002, is required.
The public comment period on the proposal began February 8, 2008, and ended March 9, 2008. No public comments were received.
The amendment is adopted under the Texas Education Code, §46.002, which authorizes the commissioner of education to adopt rules for the administration of Texas Education Code, Chapter 46, Assistance with Instructional Facilities and Payment of Existing Debt, Subchapter A, Instructional Facilities Allotment.
The amendment implements the Texas Education Code, §46.002.
This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on April 14, 2008.
TRD-200801927
Cristina De La Fuente-Valadez
Director, Policy Coordination
Texas Education Agency
Effective date: May 4, 2008
Proposal publication date: February 8, 2008
For further information, please call: (512) 475-1497
The Texas Education Agency (TEA) adopts an amendment to §61.1035, concerning school facilities. The amendment is adopted without changes to the proposed text as published in the February 8, 2008, issue of the Texas Register (33 TexReg 1060) and will not be republished. The section addresses provisions relating to the Existing Debt Allotment (EDA). The adopted amendment modifies eligibility for the EDA based on changes to statutory language, in accordance with Senate Bill (SB) 962, 80th Texas Legislature, 2007, and House Bill (HB) 1922, 80th Texas Legislature, 2007. The adopted amendment also incorporates other revisions to the EDA program, such as requiring the reporting of bond issues and related debt service payments and the disclosing of transactions that affect EDA eligible bonds, explaining the effect of interest rate management agreements, establishing requirements for refinanced bonds, and modifying the time limit for amending data used for calculations.
Through 19 TAC §61.1035, adopted to be effective December 12, 1999, the commissioner exercised rulemaking authority relating to assistance with payment of existing debt. The current provisions include the establishment of eligibility; definition of qualifying debt service; and explanations of limits on assistance, data and payment cycles, deposits and uses of funds, and refinancing of eligible debt.
HB 1922, 80th Texas Legislature, 2007, amended the Texas Education Code (TEC), §46.033 and §46.034, relating to assistance with payment of existing debt, by updating the reference to eligibility date of bonds from 2004-2005 to 2006-2007. SB 962, 80th Texas Legislature, 2007, amended TEC, §46.034, to restrict certain limitations on assistance if a district is affected by a military base realignment. The adopted amendment to 19 TAC §61.1035 includes revisions that incorporate these statutory changes as well as other updates and revisions, as follows.
Subsection (a) is revised in paragraph (1) to specify that payment on bonds must have been made on or before August 31, 2007, to meet eligibility criteria. Paragraph (1) is also revised to add language requiring that final official statements or bond orders be reported to the state information depository in order for bond issues and their related debt service payments to be eligible to receive EDA state assistance. Technical corrections to terms are also made in subsection (a).
Subsection (b) is revised by adding new paragraphs (3) - (5). New paragraph (3) requires a district to disclose any changes in the financing of EDA-supported debt. New paragraph (4) establishes a state aid penalty for failure to disclose such changes and explains how EDA eligibility is regained after it has been lost as a result of failing to report changes. New paragraph (5) requires a district to disclose interest rate management agreement transactions and their associated credit risk ratings in the final official statement related to the bond transaction. It also establishes a state aid penalty for failure to disclose the interest rate management agreement. Additional technical corrections to terms and numbering are also made in subsection (b).
Subsection (c) is revised to modify the calculation of the existing debt tax rate for a district affected by a military base realignment.
Subsection (d) is revised by adding new paragraph (2) to explain that requests for payments or adjustments that are submitted to TEA after December 15 will be processed with the payments due for the following fiscal year. The subsequent paragraphs are renumbered accordingly. Renumbered paragraph (3)(B) changes the date by which districts must remit amounts they were overpaid to be no later than 30 days after the date they were notified of the overpayment. Renumbered paragraph (3)(C) requires that adjustments to state assistance for any reason be requested within a three-year time limit.
Subsection (f) is revised by modifying paragraph (1) to clarify the definition of refinanced debt. New paragraph (2) is added to describe penalties for failure to report required information on refinancings. Subsequent paragraphs are renumbered accordingly.
New subsection (g) is added to require that a district notify the commissioner of EDA-related financing activities by submitting an EDA correction form packet. New subsection (g) also defines the materials that make up a complete EDA correction form packet.
The TEA has determined that the adopted amendment will have no adverse economic impact for small businesses and microbusinesses; therefore, no regulatory flexibility analysis, specified in Texas Government Code, §2006.002, is required.
The public comment period on the proposal began February 8, 2008, and ended March 9, 2008. No public comments were received.
The amendment is adopted under the Texas Education Code, §46.031, which authorizes the commissioner of education to adopt rules for the administration of Texas Education Code, Chapter 46, Assistance with Instructional Facilities and Payment of Existing Debt, Subchapter B, Assistance with Payment of Existing Debt; and Texas Education Code, §46.061, which authorizes the commissioner to by rule provide for the payment of state assistance under Texas Education Code, Chapter 46, to refinance school district debt.
The amendment implements the Texas Education Code, §46.031 and §46.061.
This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on April 14, 2008.
TRD-200801928
Cristina De La Fuente-Valadez
Director, Policy Coordination
Texas Education Agency
Effective date: May 4, 2008
Proposal publication date: February 8, 2008
For further information, please call: (512) 475-1497