Part 2. TEXAS EDUCATION AGENCY
Subchapter AA. COMMISSIONER'S RULES ON SCHOOL FINANCE
The Texas Education Agency (TEA) proposes an amendment to §61.1012, concerning contracts and tuition. The proposed amendment would modify 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 the 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 proposed amendment to 19 TAC §61.1012 would incorporate new elements of the state funding system that were adopted in HB 1, 79th Texas Legislature, Third Called Session, 2006, and delineate the revised tuition calculation to reflect those changes. The proposed amendment would permit a district to continue receiving the adjustment to property values to the extent that the district is reimbursed for its tuition costs. The proposed amendment would limit the use of the adjusted property values so that a district is not reimbursed for tuition costs more than once.
The proposed amendment would also remove several expired provisions and update references to statutory citations.
Shirley Beaulieu, associate commissioner for finance/chief financial officer, has determined that for the first five-year period the amendment is in effect there will be no fiscal implications for state or local government as a result of enforcing or administering the proposed amendment.
Ms. Beaulieu has determined that for each year of the first five years the amendment is in effect the public benefit anticipated as a result of enforcing the amendment would be that tuition rates for school districts will be based on current law. There will be no effect on small businesses. There is no anticipated economic cost to persons who are required to comply with the proposed amendment.
The public comment period on the proposal begins January 25, 2008, and ends February 24, 2008. Comments on the proposal may be submitted to Cristina De La Fuente-Valadez, Policy Coordination Division, Texas Education Agency, 1701 North Congress Avenue, Austin, Texas 78701, (512) 475-1497. Comments may also be submitted electronically to rules@tea.state.tx.us or faxed to (512) 463-0028. 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, §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,
[
§42.1606,
] 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
[
utilize
] 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
[
with
] the sum
is
divided by enrollment
to determine
the amount of total state and local revenue per enrolled student.
The amount of
[
, less the
] 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
[
Interest
] and
sinking
[
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
[
and the local share of the EDA are
] 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 [
elements
] guaranteed
level
[
leave
] (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
. [
All applicable limits for DTR
apply to the calculation as specified in §105.1011 of this title
(relating to Distribution of Foundation School Fund), and GL is limited
as directed in TEC, §42.152(t).
]
(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).
[
(B)
The applicable proportions of
the entitlement are 20% in the 2000-2001 school year, 15% in the 2001-2002
school year, and 10% in the 2002-2003 school year and beyond.
]
(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
[
non-tax
] 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
[
For the 2000-2001 school year, the maximum amount
of tuition that can be applied to the property value adjustment for
school districts offering fewer than all grade levels in accordance
with TEC, §42.106, may not exceed the greater of the amount per
student computed in subsection (b)(4) of this section or the amount
per student actually paid during the 1999-2000 school year if both
districts adopt a written agreement specifying a rate that exceeds
the computation in subsection (b)(4) of this section. Tuition may
not exceed the rate paid in the 1999-2000 school year. For subsequent
years, 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 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 January 9, 2008.
TRD-200800120
Cristina De La Fuente-Valadez
Director, Policy Coordination
Texas Education Agency
Earliest possible date of adoption: February 24, 2008
For further information, please call: (512) 475-1497