Texas Administrative Code Title 19

Education: As effective August 6, 2010

Chapter 62

§62.1001: Authority of Trustees; Duration of Agreements

(a) Trustees of independent school districts may not delegate their authority to enter into agreements necessary to achieve the purposes of the Texas Education Code, Chapter 41. Nor may the trustees authorize any exclusive franchises on the right to negotiate on behalf of the district.

(b) Consolidations under the Texas Education Code, Chapter 41, Subchapter B; detachments and annexations under Subchapter C; and tax base consolidations under Subchapter F are permanent in duration and districts may not enter into agreements that purport to limit the duration of the agreement. Nor may the parties create by agreement any right to cancel the agreement.

Comments

Source Note: The provisions of this §62.1001 adopted to be effective September 13, 1993, 18 TexReg 5743; amended to be effective May 7, 2003, 28 TexReg 3720

§62.1011: Election Duties of Board of Trustees

For the purposes of an election ordered under the Texas Education Code, Chapter 41, the board of trustees that orders the election shall perform any applicable duty assigned to the county judge or to the county commissioners court under the Texas Education Code, Chapter 13.

Comments

Source Note: The provisions of this §62.1011 adopted to be effective September 13, 1993, 18 TexReg 5743; amended to be effective May 7, 2003, 28 TexReg 3720

§62.1031: Date of Agreement for Purposes of Determining Election Date

For the purposes of the Texas Education Code, §41.012, the date of an agreement entered by the board of trustees of a school district under the Texas Education Code, Chapter 41, Subchapter E or F, is the date that the agreement is certified by the commissioner of education.

Comments

Source Note: The provisions of this §62.1031 adopted to be effective September 13, 1993, 18 TexReg 5743; amended to be effective May 7, 2003, 28 TexReg 3720

§62.1041: Weighted Students in Average Daily Attendance for Purposes of Tax Rate Rollback

In determining the number of weighted students in average daily attendance for the purposes of tax rate rollback calculations under the Texas Tax Code, §26.08, the number calculated under the Texas Education Code, §42.302, is adjusted:

(1) as provided by the Texas Education Code, §41.123, by adding the number of weighted students in average daily attendance attributed to the district through a contract to educate nonresident students under the Texas Education Code, Chapter 41, Subchapter E; and

(2) by adding the number of weighted students in average daily attendance attributed to the district through the purchase of attendance credits under the Texas Education Code, Chapter 41, Subchapter D.

Comments

Source Note: The provisions of this §62.1041 adopted to be effective September 13, 1993, 18 TexReg 5743; amended to be effective May 7, 2003, 28 TexReg 3720

§62.1051: Definition of Parcel Detached and Annexed by Commissioner

For the purposes of implementing the Texas Education Code, Chapter 41, Subchapter G, a parcel shall be defined as one or more separately described items of real property, together with the improvements and personal property located on the property, that have the same taxable situs or that are:

(1) contiguous to each other;

(2) used as a unit or subject to the same predominant use; and

(3) located within the boundaries of a single school district.

Comments

Source Note: The provisions of this §62.1051 adopted to be effective September 13, 1993, 18 TexReg 5743; amended to be effective May 7, 2003, 28 TexReg 3720

§62.1061: Election of Trustees of District Consolidated by Commissioner

The election date under the Texas Education Code, §41.253(b), is modified to be the first May uniform election date after the effective date of a consolidation order under the Texas Education Code, Chapter 41.

Comments

Source Note: The provisions of this §62.1061 adopted to be effective September 13, 1993, 18 TexReg 5743; amended to be effective May 7, 2003, 28 TexReg 3720

§62.1071: Administration of Wealth Equalization

(a) Identification. Identification of districts subject to the wealth equalization provisions of the Texas Education Code (TEC), Chapter 41, is based on estimates of weighted average daily attendance (WADA) available in July of each year. WADA is projected in accordance with TEC, Chapter 42, Subchapter F, and derived from student counts adopted by the legislature in the appropriation process under the provisions of TEC, §42.254.

(b) Alternative calculation of wealth per WADA. Districts subject to recapture in accordance with TEC, Chapter 41, may utilize an alternative method to calculate a wealth per weighted student for the purpose of determining the amount needed to equalize wealth.

(1) The optional alternative method will enable a qualifying district to retain a wealth per weighted student (WADA) after exercising an option pursuant to TEC, §41.003(2) or (3), that would achieve a Maintenance and Operations (M&O) revenue (state and local) level equal to the M&O revenue per WADA for the 1999-2000 school year, less the current year per capita distribution from the available school fund, other than amounts distributed under TEC, Chapter 31, for the technology allotment.

(2) The optional alternative method will compute M&O revenue (state and local) in the 1999-2000 school year and in the applicable year, excluding recapture amounts, any Public Education Grant and New Instructional Facilities Allotment state aid pursuant to TEC, §42.157 and §42.158.

(3) The optional alternative method will utilize a measure of WADA in the 1999-2000 school year and in the applicable year that excludes resident students that were not educated in the eligible district.

(4) The optional alternative method pertains only to districts that did not offer all grades from kindergarten to Grade 12 in the 1999-2000 school year and are imposing a current effective M&O tax rate equal to or greater than their 1999-2000 M&O tax rate.

(5) The commissioner of education will notify districts that qualify for the optional alternative method of calculating wealth per WADA for the purpose of determining the amount owed to equalize wealth when they are notified of their TEC, Chapter 41, status by July 15 of each year. The commissioner will also provide appropriate worksheets so that eligible districts can determine the financial impact of adopting the optional alternative method.

(6) Districts must inform the commissioner by September 1 of each applicable year of their decision whether to adopt the optional alternative method for calculating wealth per WADA for determining recapture costs. They must also complete and return to the Texas Education Agency (TEA) division responsible for state funding the worksheets provided by the commissioner and submit evidence that they will maintain or exceed their 1999-2000 M&O tax effort by letter attesting to their proposed tax rate, tax levy, and estimated M&O tax collections for the applicable year.

(7) The optional alternative method is in effect for the 2001-2002, 2002-2003, and 2003-2004 school years. This subsection, issued under TEC, §41.0021, 77th Texas Legislature, 2001, expires September 1, 2004.

(c) Actions to equalize wealth. The commissioner may require specific actions to ensure that the wealth of a district subject to the provisions of TEC, Chapter 41, is properly equalized.

(1) Districts subject to the provisions of TEC, Chapter 41, may consolidate with another district in accordance with TEC, Subchapter B (Option 1), detach territory in accordance with TEC, Subchapter C (Option 2), or consolidate tax bases with another district in accordance with TEC, Subchapter F (Option 5). These actions are not subject to change once approved by the commissioner and executed by the participants. The commissioner may require the exercise of other options in addition to options 1, 2, or 5 to ensure that wealth will be properly equalized.

(2) A student who transfers to and is educated tuition-free by a district subject to the provisions of TEC, Chapter 41, may be counted as WADA for the purpose of wealth equalization. No agreement with the home district is required, but the district must provide the commissioner with a written statement certifying that no tuition or other benefit has been received in exchange for the student's education. The number of transferring students is converted to a WADA count by multiplying it by the district's current WADA-to-enrollment ratio.

(3) A student who transfers as a Public Education Grant (PEG) student pursuant to TEC, Chapter 29, Subchapter G, to a district subject to the provisions of TEC, Chapter 41, may be counted under subsection (c)(2) of this section as WADA by the receiving district for the purposes of wealth equalization. No contract with the home district is required. The sending district may not count the student for state aid purposes.

(4) Regardless of any applicable credits, a district identified as subject to the provisions of TEC, Chapter 41, must exercise one or more of the available options to reduce wealth to ensure that wealth will be properly equalized.

(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. 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) 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) 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) 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) 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) 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) 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) 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.

(12) For those districts authorized to retain a tax base per student greater than the equalized wealth level as provided by TEC, §41.002(e), in the 2003-2004 school year, the resulting tax base per weighted student that the district is allowed to retain shall be the greater of two amounts. The first amount shall be the tax base per weighted student necessary to produce the M&O tax revenue per weighted student to which the district had access in 1992-1993 after the 1992-1993 M&O tax revenue is reduced by the 2003-2004 distributions from the available school fund. The second amount shall be the tax base per weighted student necessary to produce the M&O tax revenue per weighted student to which the district had access in 1992-1993, less the amount of tax base per student that would be necessary in 2003-2004 to produce the 2003-2004 distribution from the available school fund at a tax rate of $1.50. In the 2004-2005 and subsequent school years, the amount of tax base per weighted student that a district is allowed to retain under TEC, §41.002(e), shall be the tax base per weighted student necessary to produce the M&O tax revenue per weighted student to which the district had access in 1992-1993, less the amount of tax base per student that would be necessary in the current school year to produce the current year's distribution from the available school fund at a tax rate of $1.50.

(e) Administrative requirements. Districts taking action to equalize wealth must abide by all fiscal, procedural, and administrative requirements.

(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 and Option 3 contracts not incorporating efficiency credits or early agreement credits must be postmarked by November 15. 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.

(f) Noncompliance. Noncompliance with the requirements of wealth equalization is determined by the commissioner and may result in corrective action, including detachment and annexation or consolidation in accordance with TEC, Chapter 41, Subchapters G or H, by the commissioner.

(1) Refusal by a district subject to the provisions of TEC, Chapter 41, to declare an intent to exercise an option to equalize wealth, to take action to equalize wealth, or to comply with the terms of a contractual agreement will result in corrective action by the commissioner in accordance with TEC, Chapter 41, Subchapters G and H, to consolidate or to detach and annex property. Any such action taken after November 8 of a school year will take effect in the subsequent school year.

(2) Noncompliance with requirements other than those listed in subsection (f)(1) of this section may result in loss of an efficiency credit for Option 4, the early agreement credit for Option 3, or in a financial audit.

(g) Excellence exemption. An excellence exemption pursuant to the provisions of TEC, §39.112, does not apply to options for or requirements of wealth equalization.

(h) Property value decline. If a district subject to the provisions of wealth equalization experiences a property value decline, exceeding 4.0%, from the prior tax year and funds made available by the legislature to compensate for such a decline are insufficient, the district's taxable value for the prior tax year will be adjusted so that the allocation of the shortfall is shared among all districts participating in this appropriation in accordance with TEC, §42.252. The adjustment will be sufficient to exhaust the district's share of the amount appropriated.

(1) The cost of recognizing the applicable property value decline is computed as the difference in the cost of equalizing wealth using the property value for the prior tax year and the cost of equalizing wealth using the property value for the current tax year using the same (current year) tax collection amount. This difference is then adjusted for the percent of decline not recognized in accordance with TEC, §42.252.

(2) If the cost of recognizing the applicable amount of property value decline exceeds the amount appropriated, each district with a decline in value will have its value adjusted in proportion to its share of the total property value decline.