Chapter 61. School Districts
Subchapter AA. Commissioner's Rules on School Finance


61.1011. Additional State Aid for Tax Reduction (ASATR).

(a)  Definitions. The following terms have the following meanings when used in this section.

(1)  Annual financial report--The annual financial report that a school district is required to submit to the Texas Education Agency (TEA) under the Texas Education Code (TEC), 44.008.

(2)  Average daily attendance (ADA)--Average daily attendance as defined by the TEC, 42.005(a).

(3)  Chapter 313 tax credit aid--Additional State Aid for Ad Valorem Tax Credits Under the Texas Economic Development Act, as authorized by the TEC, 42.2515, for the purposes of reimbursing school districts for tax credits issued under the Texas Tax Code, Chapter 313.

(4)  Compressed tax rate (CTR)--

(A)  For the 2006-2007 fiscal year, the CTR is calculated by multiplying the 2005 adopted maintenance and operations (M&O) tax rate by 0.8867.

(B)  For the 2007-2008 fiscal year and each subsequent fiscal year, the CTR is calculated by multiplying the 2005 adopted M&O tax rate by the state compression percentage specified in the TEC, 42.2516(a), as that section existed for that fiscal year.

(5)  District planning estimates (DPEs)--The figures on the Summary of Finances report that reflect:

(A)  the data submitted to the TEA by school districts and by the comptroller of public accounts during a given fiscal year; and

(B)  the estimated Foundation School Program entitlements of school districts for the year and data specified in subparagraph (A) of this paragraph.

(6)  Fiscal year--The state fiscal year, which begins on September 1 of a given year and ends on August 31 of the subsequent year.

(7)  Foundation School Program (FSP)--The program established under the TEC, Chapters 41, 42, and 46, or any successor program of state-appropriated funding for school districts in this state.

(8)  General Appropriations Act (GAA)--The bill passed by the Texas Legislature that provides funding for state government.

(9)  House Bill (HB) 1 weighted average daily attendance--A calculation of weighted average daily attendance based on the TEC, Chapter 42, funding elements as they existed between September 1, 2006, and August 31, 2009, under the provisions of HB 1, 79th Texas Legislature, Third Called Session, 2005.

(10)  HB 3646 weighted average daily attendance--A calculation of weighted average daily attendance based on the TEC, Chapter 42, funding elements as they existed between September 1, 2009, and August 31, 2011, under the provisions of HB 3646, 81st Texas Legislature, 2009.

(11)  Legislative payment estimates (LPEs)--The figures on the Summary of Finances report that reflect:

(A)  the data submitted to the Texas Legislature by the TEA and the comptroller of public accounts in accordance with the TEC, 42.254, for use in establishing the FSP appropriation specified in the GAA for a given biennium; and

(B)  the FSP entitlements of school districts for each fiscal year of the biennium based on the data specified in subparagraph (A) of this paragraph.

(12)  Local maintenance and operations (M&O) tax collections--The amount of local M&O taxes collected by a school district.

(A)  Local M&O tax collections to be used in the calculation of FSP entitlements are determined as follows.

(i)  On the preliminary Summary of Finances report, local M&O tax collections are calculated according to estimates of property value growth rates provided in the GAA.

(ii)  On the near-final Summary of Finances report, the local M&O tax collections used are those estimated by the school district for the fiscal year of the Summary of Finances report and reported to the TEA in the annual tax information survey conducted by the TEA division responsible for state funding.

(iii)  On the final Summary of Finances report, the local M&O tax collections used are those reported in the school district annual financial report for the fiscal year of the Summary of Finances report.

(iv)  On the current Summary of Finances report, the local M&O tax collections used are those shown on the final Summary of Finances report or amended M&O tax collections that have been submitted and approved by the TEA chief school finance officer.

(B)  M&O tax collections used to calculate FSP entitlements are adjusted as applicable. M&O tax collections are reduced for:

(i)  payments related to a tax increment fund arrangement under the Texas Tax Code, Chapter 311; and

(ii)  amounts related to the local share of a district's Instructional Facilities Allotment for a lease-purchase agreement.

(13)  Local M&O tax collections for revenue target calculations--The local M&O tax collections used in the calculation of revenue targets in accordance with the TEC, 42.2516(b), as that section existed on September 1, 2006, to determine a school district's minimum entitlement under the TEC, Chapter 42, as that chapter existed on January 1, 2006, as described in subsection (b)(1) and (2) of this section, are determined as follows.

(A)  For Scenario 1, the local M&O tax collections used are those reflected on a school district's current Summary of Finances report for the 2005-2006 fiscal year.

(B)  For Scenario 2, local M&O tax collections are determined by multiplying the following:

(i)  the 2006-2007 M&O yield per penny, which is determined by dividing 2006-2007 M&O tax collections reported in a school district's annual financial report by the number of pennies in the 2006-2007 M&O tax rate; and

(ii)  the number of pennies in the 2005 adopted M&O tax rate.

(C)  For Scenario 3, local M&O tax collections are determined by multiplying the following:

(i)  the 2006-2007 M&O yield per penny, which is determined by dividing 2006-2007 M&O tax collections reported in a school district's annual financial report by the number of pennies in the 2006-2007 M&O tax rate; and

(ii)  the number of pennies in the effective tax rate for the 2006-2007 fiscal year, calculated under the Texas Tax Code, 26.08(i) or (k)(1), as that section existed on September 1, 2006.

(D)  No changes to the calculations of the tax collections described in this paragraph will be made after September 1, 2014.

(14)  Local M&O tax collections at the CTR for Scenario 4--

(A)  Local M&O tax collections used for Scenario 4 are determined by multiplying the following:

(i)  the yield per penny, which is determined by dividing the M&O tax collections for the fiscal year reported in a school district's annual financial report by the number of pennies in the total M&O tax rate for the fiscal year; and

(ii)  the number of pennies in the CTR for the fiscal year.

(B)  For a school district that experiences an increase in tax collections in tax year 2012 or a subsequent tax year because it meets one or more of the criteria established under the TEC, 42.2516(f-1)(1), (2), and (3), or that ceases to deposit tax collections into a tax increment fund as described in the TEC, 42.2516(f-1)(4), in tax year 2012 or a subsequent tax year, local M&O tax collections used for Scenario 4 are reduced by the amount of the increase in the M&O tax collections at the CTR that is due to the changes described in the TEC, 42.2516(f-1).

(C)  For a school district that experiences a decrease in tax collections in tax year 2012 or a subsequent tax year because it meets one or more of the criteria established under the TEC, 42.2516(f-1)(1), (2), and (3), or that begins to deposit tax collections into a tax increment fund as described in the TEC, 42.2516(f-1)(4), in tax year 2012 or a subsequent tax year, local M&O tax collections used for Scenario 4 are increased by the amount of the decrease in the M&O tax collections at the CTR that is due to the changes described in the TEC 42.2516(f-1).

(15)  Minimum salary schedule (MSS) employees--Classroom teachers, full-time nurses, full-time counselors, and full-time librarians that are subject to the MSS requirements under the TEC, 21.402.

(16)  Scenario 1, 2, or 3--A series of calculations that existed in the TEC as of January 1, 2006, that determined the amount of state and local revenue per student in weighted average daily attendance to which a school district was entitled. The scenario that produced the greatest state and local revenue per student in weighted average daily attendance served as the basis of funding to which a school district was entitled under the TEC, 42.2516(b), as that section existed on September 1, 2006.

(A)  Scenario 1 (S1)--The series of calculations that resulted in the amount of state and local revenue per student in weighted average daily attendance described in the TEC, 42.2516(b)(1)(A), as that section existed on September 1, 2006.

(B)  Scenario 2 (S2)--The series of calculations that resulted in the amount of state and local revenue per student in weighted average daily attendance described in the TEC, 42.2516(b)(1)(B), as that section existed on September 1, 2006.

(C)  Scenario 3 (S3)--The series of calculations that resulted in the amount of state and local revenue per student in weighted average daily attendance described in the TEC, 42.2516(b)(1)(C), as that section existed on September 1, 2006.

(17)  Scenario 4 (S4)--The series of calculations that results in the amount of state and local formula revenue per student in weighted average daily attendance generated at the CTR for a given fiscal year.

(18)  Settle-up--A two-step process that reconciles the difference between the FSP payments that are made to a school district or charter school during a fiscal year and the actual entitlement earned by the school district or charter school for that year.

(A)  Near-final settle-up--The year-end reconciliation process that occurs after the close of a given fiscal year. The process incorporates the final attendance data for that fiscal year that have been submitted to the Public Education Information Management System (PEIMS). The FSP funding adjustments that result from this reconciliation are reflected on the near-final Summary of Finances report for the fiscal year.

(B)  Final settle-up--The postaudit reconciliation process that occurs after the TEA's receipt of school district annual financial reports for a given fiscal year. The process incorporates the tax collection data that are reported in the annual financial reports and any other changes to funding elements that have occurred since the near-final settle-up. The FSP funding adjustments that result from this reconciliation are reflected on the final Summary of Finances report for the fiscal year.

(19)  Summary of Finances (SOF) report--The document of record for FSP allocations. The different versions of the report are as follows.

(A)  Preliminary SOF report--The version of the SOF report published during a given fiscal year for that year.

(B)  Near-final SOF report--The version of the SOF report that reflects the FSP entitlements of a school district following near-final settle-up for the given fiscal year.

(C)  Final SOF report--The version of the SOF report that reflects the FSP entitlements of a school district following final settle-up for the given fiscal year.

(D)  Current SOF report--The most recent version of the SOF report that reflects the FSP entitlements of a school district for the given fiscal year as of the current date. The report reflects any changes that have been made since the final SOF report.

(20)  Supplemental tax increment fund (TIF) aid--Aid under the TEC, 42.2514, that may be due to a school district that pays into a TIF.

(21)  Target year--The year that produces the greatest revenue per student in weighted average daily attendance in the scenarios defined by subsection (a)(16) of this section and that is thus used in calculating the minimum revenue entitlement for each fiscal year beginning with the 2006-2007 fiscal year. If the maximum target revenue per student in weighted average daily attendance is produced with S1, then 2005-2006 is the target year. If the maximum target revenue per student in weighted average daily attendance is produced with S2 or S3, then 2006-2007 is the target year.

(22)  Weighted average daily attendance (WADA)--Weighted average daily attendance as defined by the TEC, 42.302(a). The WADA used for state funding calculations is determined as follows.

(A)  During a given fiscal year, WADA is calculated using the LPEs for that year.

(B)  On the near-final SOF report, WADA is calculated using the student attendance data reported to the PEIMS for the given fiscal year.

(C)  On the final SOF report, WADA is calculated using the student attendance data for the given fiscal year that are available as of the date of the final SOF.

(b)  Additional State Aid for Tax Reduction (ASATR). A school district may be entitled to receive ASATR under the TEC, 42.2516(b). The entitlement to ASATR for a given fiscal year is determined by calculating the minimum revenue entitlement applicable to that fiscal year and comparing the minimum revenue entitlement to the total state and local formula revenue based on the CTR for that fiscal year.

(1)  Fiscal year 2006-2007. S1, S2, and S3 target revenue; S4 total state and local revenue; and ASATR are calculated as follows for the 2006-2007 fiscal year.

(A)  S1 target revenue. S1 target revenue is based on the actual state and local revenue earned by a school district for the 2005-2006 fiscal year as reflected on the current 2005-2006 SOF report. S1 target revenue is calculated as follows.

(i)  S1 revenue includes the sum of the following amounts, calculated based on the provisions of the TEC, Chapters 12, 41, and 42, as they existed on January 1, 2006:

(I)  Tier 1 state aid earned by the district in 2005-2006;

(II)  Tier 2 state aid earned by the district in 2005-2006;

(III)  the per pupil allotment as described in Rider 69, GAA, 79th Texas Legislature, 2005;

(IV)  Additional State Aid for Professional Staff Salaries earned by the district under the TEC, 42.2512, for 2005-2006;

(V)  Additional State Aid for Homestead Exemption earned by the district under the TEC, 42.2511, for 2005-2006;

(VI)  Additional State Aid for School Employee Benefits earned by the district under the TEC, 42.2514, for 2005-2006;

(VII)  any gain from a Chapter 41 partnership, which is the amount retained by the district as the result of an agreement under the TEC, 41.121. This amount is equal to the funds received by the district as the result of a 2005-2006 agreement under the TEC, 41.121, less the following amounts:

(-a-)  funds retained from the district's 2005-2006 FSP allocation due to attendance credits purchased through an agreement under the TEC, 41.121; and

(-b-)  funds due from the district to another entity based on a 2005-2006 agreement under the TEC, 41.121; and

(VIII)  M&O tax collections for the 2005-2006 fiscal year as defined by subsection (a)(13)(A) of this section.

(ii)  The sum is reduced by the amount of the recapture payments owed by the district for the 2005-2006 fiscal year to produce total state and local revenue.

(iii)  Total state and local revenue is divided by the number of WADA the district had in 2005-2006 to produce S1 target revenue per WADA.

(iv)  S1 target revenue per WADA is multiplied by the district's 2006-2007 WADA to produce S1 total target revenue.

(B)  S2 target revenue. S2 target revenue is based on the state and local revenue a school district would have been entitled to in 2006-2007 based on the provisions of the TEC, Chapters 12, 41, and 42, as they existed on January 1, 2006, and on the tax collections defined by subsection (a)(13)(B) of this section. S2 target revenue is calculated as follows.

(i)  S2 revenue includes the sum of the following amounts, calculated based on the provisions of the TEC, Chapters 12, 41, and 42, as they existed on January 1, 2006:

(I)  Tier 1 state aid the district would have received in 2006-2007;

(II)  Tier 2 state aid the district would have received in 2006-2007;

(III)  the per pupil allotment as described in Rider 69, GAA, 79th Texas Legislature, 2005;

(IV)  Additional State Aid for Professional Staff Salaries the district would have earned under the TEC, 42.2512, for 2006-2007;

(V)  Additional State Aid for Homestead Exemption the district would have earned under the TEC, 42.2511, for 2006-2007;

(VI)  Additional State Aid for School Employee Benefits the district would have earned under the TEC, 42.2514, for 2006-2007;

(VII)  any gain the district would have received from a Chapter 41 partnership, which is the amount the district would have retained as the result of an agreement under the TEC, 41.121. This amount is equal to the funds the district would have received in 2006-2007 if the 2005-2006 agreement had been maintained under the TEC, 41.121, less the following amounts:

(-a-)  funds that would have been retained from the district's 2006-2007 FSP allocation due to attendance credits purchased if the 2005-2006 agreement under the TEC, 41.121, had been maintained; and

(-b-)  funds that would have been due from the district to another entity if the 2005-2006 agreement under the TEC, 41.121, had been maintained; and

(VIII)  M&O tax collections as defined by subsection (a)(13)(B) of this section.

(ii)  The sum is reduced by the amount of the recapture obligation that would have been owed in 2006-2007 if the district would have been subject to the provisions of the TEC, Chapter 41, as that chapter existed on January 1, 2006, based on the 2005 M&O tax rate and the M&O tax collections defined by subsection (a)(13)(B) of this section to produce total state and local revenue.

(iii)  Total state and local revenue is divided by the number of WADA the district had in 2006-2007 to produce S2 target revenue per WADA.

(iv)  S2 target revenue per WADA is multiplied by the district's 2006-2007 WADA to produce S2 total target revenue.

(C)  S3 target revenue. S3 target revenue is based on the state and local revenue a school district would have been entitled to in 2006-2007 based on the provisions of the TEC, Chapters 12, 41, and 42, as they existed on January 1, 2006, and on the tax collections defined by subsection (a)(13)(C) of this section. S3 target revenue is calculated as follows.

(i)  S3 revenue includes the sum of the following amounts, calculated based on the provisions of the TEC, Chapters 12, 41, and 42, as they existed on January 1, 2006:

(I)  Tier 1 state aid the district would have received in 2006-2007;

(II)  Tier 2 state aid the district would have received in 2006-2007 based on the tax rate authorized by the Texas Tax Code, 26.08(i) or (k)(1), as that section existed on September 1, 2006;

(III)  the per pupil allotment as described in Rider 69, GAA, 79th Texas Legislature, 2005;

(IV)  Additional State Aid for Professional Staff Salaries the district would have earned under the TEC, 42.2512, for 2006-2007;

(V)  Additional State Aid for Homestead Exemption the district would have earned under the TEC, 42.2511, for 2006-2007;

(VI)  Additional State Aid for School Employee Benefits the district would have earned under the TEC, 42.2514, for 2006-2007;

(VII)  any gain the district would have received from a Chapter 41 partnership, which is the amount the district would have retained as the result of an agreement under the TEC, 41.121. This amount is equal to the funds the district would have received in 2006-2007 if the 2005-2006 agreement had been maintained under the TEC, 41.121, less the following amounts:

(-a-)  funds that would have been retained from the district's 2006-2007 FSP allocation due to attendance credits purchased if the 2005-2006 agreement under the TEC, 41.121, had been maintained; and

(-b-)  funds that would have been due from the district to another entity if the 2005-2006 agreement under the TEC, 41.121, had been maintained; and

(VIII)  M&O collections as defined by subsection (a)(13)(C) of this section.

(ii)  The sum is reduced by the amount of the recapture obligation that would have been owed in 2006-2007 if the district would have been subject to the provisions of the TEC, Chapter 41, as that chapter existed on January 1, 2006, based on the M&O tax rate resulting from the computation described in the Texas Tax Code, 26.08(i) or (k)(1), as that section existed on September 1, 2006, and the M&O tax collections defined by subsection (a)(13)(C) of this section to produce total state and local revenue.

(iii)  Total state and local revenue is divided by the number of WADA the district had in 2006-2007 to produce S3 target revenue per WADA.

(iv)  S3 target revenue per WADA is multiplied by 2006-2007 WADA to produce S3 total target revenue.

(D)  S4 total state and local revenue. S4 total state and local revenue is determined by the amount of state and local formula revenue that is generated at the CTR for 2006-2007 based on the provisions of the TEC, Chapters 12, 41, and 42, as they existed on September 1, 2006, and on the tax collections defined by subsection (a)(14) of this section. S4 total state and local revenue is calculated as follows.

(i)  S4 total state and local revenue includes the sum of the following amounts, calculated for the 2006-2007 fiscal year based on the provisions of the TEC, Chapters 12, 41, and 42, as they existed on September 1, 2006:

(I)  Tier 1 state aid;

(II)  Tier 2, Level 1, state aid, as determined under the TEC, 42.302(a-1);

(III)  the per pupil allotment as described in Rider 69, GAA, 79th Texas Legislature, 2005;

(IV)  Additional State Aid for Professional Staff Salaries earned by the district under the TEC, 42.2512;

(V)  Additional State Aid for Homestead Exemption earned by the district under the TEC, 42.2511;

(VI)  Additional State Aid for School Employee Benefits earned by the district under the TEC, 42.2514;

(VII)  any gain from a Chapter 41 partnership as defined by subsection (b)(1)(A)(i)(VII), (B)(i)(VII), or (C)(i)(VII) of this section for the applicable target year; and

(VIII)  M&O tax collections at the CTR as defined by subsection (a)(14) of this section.

(ii)  The sum is reduced by the cost of recapture based on the M&O tax collections at the CTR as defined by subsection (a)(14) of this section to produce S4 total state and local revenue.

(E)  Determining the need for ASATR funding or a reduction of excess revenue.

(i)  The need for ASATR funding is determined by comparing the revenue target to S4 total state and local revenue.

(ii)  The revenue target is calculated by adding the following:

(I)  the base target revenue, which is the greatest of S1 total target revenue as described in subsection (b)(1)(A)(iv) of this section, S2 total target revenue as described in subsection (b)(1)(B)(iv) of this section, and S3 total target revenue as described in subsection (b)(1)(C)(iv) of this section;

(II)  the Salary Allotment, which is the product of the number of MSS employees for 2006-2007 multiplied by $2,500; and

(III)  the High School Allotment, which is the product of the number of high school ADA for 2006-2007 multiplied by $275.

(iii)  If the revenue target is greater than S4 total state and local revenue, then the district is entitled to receive ASATR equal to the difference between the revenue target and S4 total state and local revenue. If S4 total state and local revenue is greater than the revenue target, then ASATR is equal to zero. For a district with an adopted M&O tax rate below the CTR, any ASATR the district is entitled to is reduced in proportion to the amount by which the adopted M&O tax rate is less than the CTR.

(iv)  If S4 total state and local revenue is greater than the revenue target, then a reduction of excess revenue is calculated by subtracting S4 total state and local revenue from the revenue target. The result will be a negative number. If the revenue target is greater than S4 total state and local revenue, the reduction of excess revenue is equal to zero.

(F)  Timeline for data changes. No changes to the calculations described in this paragraph or to the S1, S2, and S3 target revenue per WADA amounts described in subsection (b)(1)(A)(iii), (B)(iii), and (C)(iii) of this section, respectively, will be made after September 1, 2014.

(2)  Fiscal years 2007-2008 and 2008-2009. Adjusted S1, S2, and S3 target revenue; S4 total state and local revenue; and ASATR are calculated as follows for the 2007-2008 and 2008-2009 fiscal years.

(A)  Adjusted S1 target revenue. Adjusted S1 target revenue is based on the actual state and local revenue earned by the school district as reflected on the current 2005-2006 SOF report. Adjusted S1 target revenue is calculated as follows.

(i)  S1 revenue includes the sum of the amounts summed in subsection (b)(1)(A)(i) of this section.

(ii)  The sum is reduced by the amount of the recapture payments owed by the district for the 2005-2006 fiscal year to produce total state and local revenue.

(iii)  Total state and local revenue is divided by the number of WADA the district had in 2005-2006 to produce S1 target revenue per WADA.

(iv)  S1 target revenue per WADA is multiplied by 2007-2008 or 2008-2009 WADA, as applicable, to produce S1 total target revenue.

(v)  S1 total target revenue is adjusted by the following to produce adjusted S1 target revenue:

(I)  the difference between the New Instructional Facility Allotment (NIFA) that the district was entitled to receive under the TEC, 42.158, in the target year and the NIFA that the district was entitled to receive in 2007-2008 or 2008-2009, as applicable; and

(II)  for districts not subject to the provisions of the TEC, Chapter 41, the difference between the transportation allotment that the district was entitled to receive under the TEC, 42.155, in the target year and the transportation allotment that the district was entitled to receive in 2007-2008 or 2008-2009, as applicable.

(B)  Adjusted S2 target revenue. Adjusted S2 target revenue is calculated as follows.

(i)  S2 revenue includes the sum of the amounts summed in subsection (b)(1)(B)(i) of this section.

(ii)  The sum is reduced by the amount of the recapture obligation that would have been owed in 2006-2007 if the district would have been subject to the provisions of the TEC, Chapter 41, as that chapter existed on January 1, 2006, based on the 2005 M&O tax rate and the M&O tax collections defined by subsection (a)(13)(B) of this section to produce total state and local revenue.

(iii)  Total state and local revenue is divided by the number of WADA the district had in 2006-2007 to produce S2 target revenue per WADA.

(iv)  S2 target revenue per WADA is multiplied by 2007-2008 or 2008-2009 WADA, as applicable, to produce S2 total target revenue.

(v)  S2 total target revenue is adjusted by the following to produce adjusted S2 target revenue:

(I)  the difference between the NIFA that the district was entitled to receive under the TEC, 42.158, in the target year and the NIFA that the district was entitled to receive in 2007-2008 or 2008-2009, as applicable; and

(II)  for districts not subject to the provisions of the TEC, Chapter 41, the difference between the transportation allotment that the district was entitled to receive under the TEC, 42.155, in the target year and the transportation allotment that the district was entitled to receive in 2007-2008 or 2008-2009, as applicable.

(C)  Adjusted S3 target revenue. Adjusted S3 target revenue is calculated as follows.

(i)  S3 revenue includes the sum of the amounts summed in subsection (b)(1)(C)(i) of this section.

(ii)  The sum is reduced by the amount of the recapture obligation that would have been owed in 2006-2007 if the district would have been subject to the provisions of the TEC, Chapter 41, as that chapter existed on January 1, 2006, based on the M&O tax rate resulting from the computation described in the Texas Tax Code, 26.08(i) or (k)(1), as that section existed on September 1, 2006, and the M&O tax collections defined by subsection (a)(13)(C) of this section to produce total state and local revenue.

(iii)  Total state and local revenue is divided by the number of WADA the district had in 2006-2007 to produce S3 target revenue per WADA.

(iv)  S3 target revenue per WADA is multiplied by 2007-2008 or 2008-2009 WADA, as applicable, to produce S3 total target revenue.

(v)  S3 total target revenue is adjusted by the following to produce adjusted S3 target revenue:

(I)  the difference between the NIFA that the district was entitled to receive under the TEC, 42.158, in the target year and the NIFA that the district was entitled to receive in 2007-2008 or 2008-2009, as applicable; and

(II)  for districts not subject to the provisions of the TEC, Chapter 41, the difference between the transportation allotment that the district was entitled to receive under the TEC, 42.155, in the target year and the transportation allotment that the district was entitled to receive in 2007-2008 or 2008-2009, as applicable.

(D)  S4 total state and local revenue. S4 total state and local revenue is determined by the amount of state and local formula revenue that is generated at the CTR for 2007-2008 or 2008-2009, as applicable, based on the provisions of the TEC, Chapters 12, 41, and 42, as they existed on September 1, 2007, and on the tax collections defined by subsection (a)(14) of this section. S4 total state and local revenue is calculated as follows.

(i)  S4 total state and local revenue includes the sum of the following:

(I)  Tier 1 state aid;

(II)  Tier 2, Level 1, state aid, as determined under the TEC, 42.302(a-1);

(III)  the per pupil allotment as described in Rider 69, GAA, 79th Texas Legislature, 2005;

(IV)  Additional State Aid for Professional Staff Salaries earned by the district under the TEC, 42.2512;

(V)  Additional State Aid for Homestead Exemption earned by the district under the TEC, 42.2511;

(VI)  Additional State Aid for School Employee Benefits earned by the district under the TEC, 42.2514;

(VII)  any gain from a Chapter 41 partnership as defined by subsection (b)(1)(A)(i)(VII), (B)(i)(VII), or (C)(i)(VII) of this section for the applicable target year; and

(VIII)  M&O tax collections at the CTR as defined by subsection (a)(14) of this section.

(ii)  The sum is reduced by the cost of recapture based on the M&O tax collections at the CTR as defined by subsection (a)(14) of this section to produce S4 total state and local revenue.

(E)  Determining the need for ASATR funding or a reduction of excess revenue.

(i)  The need for ASATR funding is determined by comparing the revenue target to S4 total state and local revenue.

(ii)  The revenue target is calculated by adding the following:

(I)  the base target revenue, which is the greatest of adjusted S1 total target revenue as described in subsection (b)(2)(A)(v) of this section, adjusted S2 total target revenue as described in subsection (b)(2)(B)(v) of this section, and adjusted S3 total target revenue as described in subsection (b)(2)(C)(v) of this section;

(II)  the Salary Allotment, which is the product of the number of MSS employees for 2007-2008 or 2008-2009, as applicable, multiplied by $2,500;

(III)  the High School Allotment, which is the product of the number of high school ADA for 2007-2008 or 2008-2009, as applicable, multiplied by $275;

(IV)  any tuition paid adjustment, which is the difference between the tuition paid in 2007-2008 or 2008-2009, as applicable, and the tuition paid in the target year;

(V)  any other adjustment to tax collections; and

(VI)  any Texas Tax Code, Chapter 313, tax credit aid.

(iii)  If the revenue target is greater than S4 total state and local revenue, then the district is entitled to receive ASATR equal to the difference between the revenue target and S4 total state and local revenue. If S4 total state and local revenue is greater than the revenue target, then ASATR is equal to zero. For a district with an adopted M&O tax rate below the CTR, any ASATR the district is entitled to is reduced in proportion to the amount by which the adopted M&O tax rate is less than the CTR.

(iv)  If S4 total state and local revenue is greater than the revenue target, then a reduction of excess revenue is calculated by subtracting S4 total state and local revenue from the revenue target. The result will be a negative number. If the revenue target is greater than S4 total state and local revenue, the reduction of excess revenue is equal to zero.

(3)  Fiscal year 2009-2010. Adjusted S1, S2, and S3 target revenue; total HB 3646 state and local revenue; and ASATR are calculated as follows for the 2009-2010 fiscal year. Data elements and calculations are based on the provisions of the TEC, Chapters 41 and 42, as they existed on January 1, 2009, unless otherwise specified.

(A)  S1 target revenue is based on the state and local revenue a school district would have been entitled to in 2009-2010 based on the provisions of the TEC, Chapters 12, 41, and 42, as they existed on January 1, 2009. Adjusted S1 target revenue is calculated as follows.

(i)  S1 target revenue per WADA as described in subsection (b)(1)(A)(iii) of this section is multiplied by the number of 2009-2010 HB 1 WADA to produce S1 target revenue.

(ii)  S1 target revenue is adjusted by the following to produce adjusted S1 target revenue:

(I)  the difference between the NIFA that the district was entitled to receive under the TEC, 42.158, in 2005-2006 and the NIFA that the district was entitled to receive in 2009-2010; and

(II)  the difference between the transportation allotment that the district was entitled to receive under the TEC, 42.155, in 2005-2006 and the transportation allotment that the district was entitled to receive in 2009-2010.

(B)  S2 target revenue is based on the state and local revenue a school district would have been entitled to in 2009-2010 based on the provisions of the TEC, Chapters 12, 41, and 42, as they existed on January 1, 2009. Adjusted S2 target revenue is calculated as follows.

(i)  S2 target revenue per WADA as described in subsection (b)(1)(B)(iii) of this section is multiplied by the number of 2009-2010 HB 1 WADA to produce S2 target revenue.

(ii)  S2 target revenue is adjusted by the following to produce adjusted S2 target revenue:

(I)  the difference between the NIFA that the district was entitled to receive under the TEC, 42.158, in 2006-2007 and the NIFA that the district was entitled to receive in 2009-2010; and

(II)  the difference between the transportation allotment that the district was entitled to receive under the TEC, 42.155, in 2006-2007 and the transportation allotment that the district was entitled to receive in 2009-2010.

(C)  S3 target revenue is based on the state and local revenue a school district would have been entitled to in 2009-2010 based on the provisions of the TEC, Chapters 12, 41, and 42, as they existed on January 1, 2009. Adjusted S3 target revenue is calculated as follows.

(i)  S3 target revenue per WADA as described in subsection (b)(1)(C)(iii) of this section is multiplied by the number of 2009-2010 HB 1 WADA to produce S3 target revenue.

(ii)  S3 target revenue is adjusted by the following to produce adjusted S3 target revenue:

(I)  the difference between the NIFA that the district was entitled to receive under the TEC, 42.158, in 2006-2007 and the NIFA that the district was entitled to receive in 2009-2010; and

(II)  the difference between the transportation allotment that the district was entitled to receive under the TEC, 42.155, in 2006-2007 and the transportation allotment that the district was entitled to receive in 2009-2010.

(D)  Adjusted HB 1 target revenue for 2009-2010 is calculated by adding the following:

(i)  the maximum adjusted target revenue, which is the greatest of adjusted S1 target revenue as described in subsection (b)(3)(A)(ii) of this section, adjusted S2 target revenue as described in subsection (b)(3)(B)(ii) of this section, and adjusted S3 target revenue as described in subsection (b)(3)(C)(ii) of this section;

(ii)  the Salary Allotment, which is the product of the number of MSS employees for 2009-2010 multiplied by $2,500;

(iii)  the High School Allotment, which is the product of the number of high school ADA for 2009-2010 multiplied by $275; and

(iv)  any tuition paid adjustment, which is the difference between the tuition paid in 2009-2010 and the tuition paid in the target year.

(E)  Adjusted HB 1 revenue per HB 1 WADA is calculated by dividing adjusted HB 1 target revenue by 2009-2010 HB 1 WADA.

(F)  HB 3646 base target revenue is calculated by multiplying adjusted HB 1 revenue per HB 1 WADA by 2009-2010 HB 3646 WADA.

(G)  HB 3646 adjusted target revenue is calculated by adding the amount of the funds received by the district in 2008-2009 for the Educator Salary Increase as authorized by Rider 86, GAA, 80th Texas Legislature, 2007, to HB 3646 base target revenue.

(H)  Minimum revenue hold harmless is calculated by multiplying 2009-2010 HB 3646 WADA by $120 and adding HB 3646 adjusted target revenue to that amount.

(I)  Maximum revenue is calculated by multiplying 2009-2010 HB 3646 WADA by $350 and adding HB 3646 adjusted target revenue to that amount.

(J)  Total HB 3646 state and local revenue is calculated by adding 2009-2010 Tier 1 state aid and 2009-2010 M&O tax collections at the CTR and then subtracting from that sum 2009-2010 recapture at the CTR.

(K)  The need for ASATR funding or the reduction of excess revenue is determined as follows.

(i)  If minimum revenue hold harmless is greater than total HB 3646 state and local revenue, then the district is entitled to receive ASATR equal to the difference. If total HB 3646 state and local revenue is greater than minimum revenue hold harmless, then ASATR is equal to zero. For a district with an adopted M&O tax rate below the CTR, any ASATR the district is entitled to is reduced in proportion to the amount by which the adopted M&O tax rate is less than the CTR.

(ii)  If total HB 3646 state and local revenue is greater than maximum revenue, then a reduction of excess revenue is calculated by subtracting total HB 3646 state and local revenue from maximum revenue. The result will be a negative number. If maximum revenue is greater than total HB 3646 state and local revenue, the reduction of excess revenue is equal to zero.

(L)  2009-2010 revenue at the CTR is the sum of total HB 3646 state and local revenue, any ASATR the district is entitled to for 2009-2010, and any reduction of excess revenue the district is subject to for 2009-2010.

(M)  2009-2010 revenue per WADA at the CTR is calculated by dividing 2009-2010 revenue at the CTR by 2009-2010 HB 3646 WADA.

(N)  No changes to the calculations described in this paragraph will be made after September 1, 2014.

(4)  Fiscal year 2010-2011. Minimum revenue; adjusted minimum revenue; state and local revenue (S4); and ASATR are calculated as follows for the 2010-2011 fiscal year.

(A)  2010-2011 minimum revenue is calculated as follows.

(i)  2009-2010 adjusted HB 1 revenue per HB 1 WADA as described in subsection (b)(3)(E) of this section is multiplied by 2010-2011 WADA to produce base target revenue.

(ii)  The following are added to base target revenue to produce 2010-2011 minimum revenue:

(I)  the 2010-2011 minimum increase, which is calculated by multiplying 2010-2011 WADA by $120;

(II)  the amount of any supplemental TIF aid; and

(III)  any tuition paid adjustment, which is the difference between the tuition paid in 2009-2010 and that paid in 2010-2011.

(B)  2010-2011 adjusted minimum revenue is calculated by adding the following to 2010-2011 minimum revenue:

(i)  the amount of any Chapter 313 tax credit aid;

(ii)  the amount of the funds received by the district in 2008-2009 for the Educator Salary Increase as authorized by Rider 86, GAA, 80th Texas Legislature, 2007;

(iii)  the difference between the NIFA that the district was entitled to receive under the TEC, 42.158, in 2009-2010 and the NIFA that the district was entitled to receive in 2010-2011; and

(iv)  for districts not subject to the provisions of the TEC, Chapter 41, the difference between the transportation allotment that the district was entitled to receive under the TEC, 42.155, in 2009-2010 and the transportation allotment that the district was entitled to receive in 2010-2011.

(C)  2010-2011 state and local revenue (S4) is calculated by adding 2010-2011 Tier 1 state aid and 2010-2011 M&O collections at the CTR and then subtracting from that sum 2010-2011 recapture at the CTR.

(D)  2010-2011 maximum revenue is calculated by adding the following:

(i)  the product of 2010-2011 WADA multiplied by 2009-2010 revenue per WADA at the CTR as described in subsection (b)(3)(M) of this section; and

(ii)  the product of 2010-2011 WADA multiplied by $350.

(E)  The need for ASATR funding or the reduction of excess revenue is determined as follows.

(i)  If 2010-2011 adjusted minimum revenue is greater than 2010-2011 state and local revenue, then the district is entitled to receive ASATR equal to the difference. If 2010-2011 state and local revenue is greater than 2010-2011 adjusted minimum revenue, then ASATR is equal to zero. For a district with an adopted M&O tax rate below the CTR, any ASATR the district is entitled to is reduced in proportion to the amount by which the adopted M&O tax rate is less than the CTR.

(ii)  If 2010-2011 state and local revenue is greater than 2010-2011 maximum revenue, then a reduction of excess revenue is calculated by subtracting 2010-2011 state and local revenue from 2010-2011 maximum revenue. The result will be a negative number. If 2010-2011 maximum revenue is greater than 2010-2011 state and local revenue, the reduction of excess revenue is equal to zero.

(I)  If the school district receives state funding based on its CTR, the funding will be reduced by the amount of excess revenue.

(II)  If the school district is subject to the recapture provisions of the TEC, Chapter 41, then its cost of recapture will be increased by the amount of excess revenue.

(F)  2010-2011 revenue at the CTR is the sum of 2010-2011 state and local revenue, any ASATR the district is entitled to for 2010-2011, and any reduction of excess revenue the district is subject to for 2010-2011.

(G)  2010-2011 revenue per WADA at the CTR is calculated by dividing 2010-2011 revenue at the CTR by 2010-2011 WADA.

(5)  Fiscal year 2011-2012 and subsequent fiscal years. Minimum revenue; adjusted minimum revenue; state and local revenue (S4); and ASATR are calculated as follows for the 2011-2012 fiscal year and each subsequent fiscal year.

(A)  Minimum revenue for the applicable year is calculated as follows.

(i)  2009-2010 adjusted HB 1 revenue per HB 1 WADA as described in subsection (b)(3)(E) of this section is multiplied by the number of WADA for the applicable year and then by the multiplier specified in the TEC, 42.2516(i), to establish base target revenue.

(ii)  Base target revenue is added to the minimum increase, which is the product of the number of WADA for the applicable year multiplied by $120 and then by the multiplier specified in the TEC, 42.2516(i).

(iii)  The sum is adjusted by the difference between the tuition paid in 2009-2010 and that paid in the applicable year.

(B)  Adjusted minimum revenue for the applicable year is calculated as follows.

(i)  Minimum revenue for the applicable year is added to the product of the amount of funds received by the district in 2008-2009 for the Educator Salary Increase as authorized by Rider 86, GAA, 80th Texas Legislature, 2007, multiplied by the multiplier specified in the TEC, 42.2516(i).

(ii)  For the 2011-2012 and 2012-2013 fiscal years, the sum described by subsection (b)(5)(B)(i) of this section is adjusted by the following to produce adjusted minimum revenue:

(I)  the difference between the NIFA that the district was entitled to receive under the TEC, 42.158, in 2009-2010 and the NIFA that the district is entitled to receive in the applicable year; and

(II)  for districts not subject to the provisions of the TEC, Chapter 41, the difference between the transportation allotment that the district was entitled to receive under the TEC, 42.155, in 2009-2010 and the transportation allotment that the district is entitled to receive in the applicable year.

(iii)  For 2013-2014 and each subsequent fiscal year, the sum described by subsection (b)(5)(B)(i) of this section is adjusted by the following to produce adjusted minimum revenue:

(I)  the difference between the NIFA that the district was entitled to receive under the TEC, 42.158, in 2009-2010 and the NIFA that the district is entitled to receive in the applicable year; and

(II)  the difference between the transportation allotment that the district was entitled to receive under the TEC, 42.155, in 2009-2010 and the transportation allotment that the district is entitled to receive in the applicable year.

(C)  State and local revenue (S4) for the applicable year is calculated by adding Tier 1 state aid for that year to M&O tax collections at the CTR for that year and then subtracting from that sum recapture at the CTR for that year.

(D)  The need for ASATR funding is determined as follows.

(i)  If adjusted minimum revenue for the applicable year is greater than state and local revenue for that year, then the district is entitled to receive ASATR equal to the difference. For a district with an adopted M&O tax rate below the CTR, any ASATR the district is entitled to is reduced in proportion to the amount by which the adopted M&O tax rate is less than the CTR.

(ii)  If state and local revenue for the applicable year is greater than adjusted minimum revenue for that year, then ASATR is equal to zero.

(E)  Revenue at the CTR for the applicable year is the sum of state and local revenue (S4) for that year and any ASATR the district is entitled to for that year.

(F)  Revenue per WADA at the CTR for the applicable year is calculated by dividing revenue at the CTR for that year by the number of WADA for that year.

(c)  Recapture at the CTR used to calculate state and local revenue (S4) for 2012-2013 and subsequent years.

(1)  For a school district that experiences an increase in tax collections in tax year 2012 or a subsequent tax year because it meets one or more of the criteria established under the TEC, 42.2516(f-1)(1), (2), and (3), or that ceases to deposit tax collections into a TIF as described in the TEC, 42.2516(f-1)(4), in tax year 2012 or a subsequent year, recapture at the CTR for use in S4 for the applicable year is reduced by recalculating the recapture owed using M&O tax collections at the CTR that are decreased as described in subsection (a)(14)(B) of this section.

(2)  For a school district that experiences a decrease in tax collections in tax year 2012 or a subsequent tax year because it meets one or more of the criteria established under the TEC, 42.2516(f-1)(1), (2), and (3), or that begins to deposit tax collections into a TIF as described in the TEC, 42.2516(f-1)(4), in tax year 2012 or a subsequent year, recapture at the CTR for use in S4 for the applicable year is increased by recalculating the recapture owed using M&O tax collections at the CTR that are increased as described in subsection (a)(14)(C) of this section.

(d)  Consolidation.

(1)  If two or more school districts consolidate, a new target revenue per WADA for the consolidated district is calculated as follows.

(A)  The number of WADA for each district for the applicable year is multiplied by the district's target revenue per WADA for the applicable year.

(B)  The results are summed.

(C)  The sum is divided by the total number of WADA in the consolidated district to produce target revenue per WADA for the consolidated district.

(2)  The new target revenue per WADA applies to the computation of ASATR and any incentive aid under the TEC, 13.281, for the consolidated district.

Statutory Authority: The provisions of this 61.1011 issued under the Texas Education Code, 42.2516.

Source: The provisions of this 61.1011 adopted to be effective November 6, 2013, 38 TexReg 7708.


61.1012. Contracts and Tuition for Education Outside District.

(a)  Definitions. The following words and terms, when used in this section, 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 calculating the tuition allotment of the home district as authorized by the 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 the tuition allotment 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)  Calculated tuition limit. Beginning with the limit for the 2012-2013 school year, the calculated tuition limit is the sum of the excess maintenance and operations (M&O) revenue per enrollee and the excess debt revenue per enrollee, as calculated in paragraphs (2) and (3) of this subsection, respectively.

(2)  Excess 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 the TEC, Chapter 42, Subchapters B, C, and F, plus the state aid generated in accordance with the TEC, 42.2516(b). 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 the TEC, Chapter 46, Subchapter A, and taxes paid to a tax increment fund authorized by the Texas Tax Code, Chapter 311.

(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 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.

(3)  Excess debt revenue per enrollee. A district's excess debt revenue per enrollee is defined as interest and sinking fund taxes budgeted to be collected that surpass the taxes equalized by the IFA pursuant to the TEC, Chapter 46, Subchapter A, and the Existing Debt Allotment (EDA) pursuant to the 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 the PEIMS. The local share of the EDA is subtracted from debt taxes budgeted to be collected as reported through the PEIMS only if the district receives a payment for the state share of the EDA.

(B)  The estimate of enrollment includes transfer students.

(4)  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.

Statutory Authority: The provisions of this 61.1012 issued under the Texas Education Code, 25.039 and 42.106.

Source: The provisions of this 61.1012 adopted to be effective September 7, 2000, 25 TexReg 8641; amended to be effective March 28, 2004, 29 TexReg 2881; amended to be effective May 4, 2008, 33 TexReg 3410; amended to be effective April 22, 2012, 37 TexReg 2627.


61.1015. Property Value Adjustments Due to Taxpayer Protests.

(a)  A school district is eligible for a property value adjustment if a major taxpayer fails to pay all or a portion of its ad valorem taxes because of a protest regarding the valuation of its property.

(1)  A taxpayer is considered "major" if the amount protested contributes 5.0% or more to the tax collections of the school district.

(2)  To be eligible for the adjustment, the district must have a Maintenance and Operations (M&O) tax rate that equals or exceeds the M&O tax rate in the prior year.

(b)  The commissioner of education shall grant the adjustment at his or her discretion. If granted, the tax base of the eligible district shall be reduced by 100% of the protested value for the purpose of temporarily increasing the state aid payment to the district.

(c)  When the protest has been resolved, the district must submit the results of the settlement to the commissioner within 30 days. An appropriate form shall be supplied by the commissioner to be completed by the district documenting the results of the protest and verified by the signature of the chief appraiser.

(d)  Recovery of state aid overpayment or collection of insufficient recapture amounts due from the district as a result of the settlement shall be made by means of offsetting adjustments to current or subsequent year state aid or recapture amounts. These amounts must be repaid no later than two years after the year in which the adjustment was initially made.

Statutory Authority: The provisions of this 61.1015 issued under the Texas Education Code, 42.2531.

Source: The provisions of this 61.1015 adopted to be effective December 2, 2001, 26 TexReg 9619.


61.1018. Payment of Health Care Supplementation.

(a)  Purpose. In accordance with the Texas Education Code (TEC), Chapter 22, Subchapter D, each year the Texas Education Agency (TEA) shall distribute staff salary allotment funds to eligible entities for the purpose of making payments of health care supplementation to eligible employees, as specified by the provisions delineated in this section.

(b)  Definitions. The following words and terms, when used in this section, shall have the following meaning, unless the context clearly indicates otherwise.

(1)  Eligible entity--An eligible entity is defined as:

(A)  a school district or other educational district whose employees are members of the Teacher Retirement System of Texas (TRS);

(B)  a participating open-enrollment charter school; or

(C)  a regional education service center.

(2)  Full-time employee--An individual is employed as a full-time employee if the individual:

(A)  is a participating member of the TRS;

(B)  is employed by an eligible entity;

(C)  is not a retiree covered under the Texas Public School Retired Employees Group Benefits Act established under the Texas Insurance Code, Chapter 1575;

(D)  is not a minimum-salary-schedule employee; and

(E)  works for an eligible entity or any combination of eligible entities for 30 or more hours each week.

(3)  Minimum-salary-schedule employee--A classroom teacher, full-time librarian, full-time counselor, or full-time nurse subject to the minimum salary schedule under the TEC, 21.402.

(4)  Part-time employee--An individual is employed as a part-time employee if the individual:

(A)  is a participating member of the TRS;

(B)  is employed by an eligible entity;

(C)  is not a retiree covered under the Texas Public School Retired Employees Group Benefits Act established under the Texas Insurance Code, Chapter 1575;

(D)  is not a minimum-salary-schedule employee; and

(E)  works for an eligible entity or any combination of eligible entities for fewer than 30 hours each week.

(5)  Staff salary allotment--An allotment made up of the health care supplementation funding an eligible entity is due under the TEC, Chapter 22, Subchapter D, based on the entity's number of full-time and part-time employees.

(c)  Reporting. For each designated report month, each eligible entity must report to the TEA the number of full-time and part-time employees eligible to receive health care supplementation, as determined by the eligible entity in accordance with requirements established by the TEA in this section. The TEA may dispute, seek verification of, or conduct an investigation regarding the reported number of employees and staff at any time after receiving the report.

(d)  Eligibility. For the purposes of this section, an individual is eligible to receive health care supplementation if the individual:

(1)  is employed by an eligible entity;

(2)  is a full-time employee, as defined in subsection (b)(2) of this section, or a part-time employee, as defined in subsection (b)(4) of this section;

(3)  is not a minimum-salary-schedule employee, as defined in subsection (b)(3) of this section; and

(4)  has provided written election of whether to designate a portion of the individual's compensation to be used as health care supplementation, in accordance with the TEC, 22.105.

(e)  Funding formula. The funds for health care supplementation will comprise the staff salary allotment. Funding for the staff salary allotment is based on the number of employees who are eligible and the full- or part-time status of those employees. The staff salary allotment will be paid to the eligible entity as part of its regularly scheduled payments from the Foundation School Program (FSP). If the eligible entity is not scheduled or eligible to receive FSP payments, the staff salary allotment will be paid to the entity in a separate payment.

(1)  During the school year, the staff salary allotment will be based on the sum of:

(A)  an amount equal to the estimated number of full-time employees multiplied by $500; and

(B)  an amount equal to the estimated number of part-time employees multiplied by $250.

(2)  The final staff salary allotment due to an eligible entity for a school year will be determined by the reports of eligible employees submitted to the division responsible for state funding during the settle-up processes as described in subsection (f) of this section.

(3)  The formula for determining the final staff salary allotment is as follows.

(A)  The data submitted by an eligible entity to the division responsible for state funding is used to calculate the entity's staff salary allotment.

(B)  Each month, the count of full-time employees is multiplied by $500/12.

(C)  Each month, the count of part-time employees is multiplied by $250/12.

(D)  The final staff salary allotment is determined by summing the monthly amounts for the full-time and part-time staff for the state fiscal year beginning September 1 and ending August 31.

(f)  Settle-up. The TEA may make adjustments to previously reported numbers and may make a corresponding increase or decrease in funds that would otherwise be remitted to an eligible entity at any time after receipt of a report. A final determination of the staff salary allotment due to an eligible entity will be based on the reports of eligible employees submitted to the TEA division responsible for state funding.

(1)  Near-final settle-up. Eligible entities must submit proposed adjustments to reports of eligible employees for a school year by August 31 of that school year for those adjustments to be reflected in the near-final settle-up reconciliation. Additional amounts owed to an eligible entity for health care supplementation will be added to the staff salary allotment due to the eligible entity in the subsequent school year. Any reductions in payments will be subtracted from the staff salary allotment due to the eligible entity in the subsequent school year until the overpayment has been recovered.

(2)  Final settle-up. Eligible entities must submit proposed adjustments to reports of eligible employees for a school year by March 31 of the following school year for those adjustments to be reflected in the final settle-up reconciliation. Additional amounts owed to an eligible entity for health care supplementation will be added to the staff salary allotment due to the eligible entity in April and subsequent months of the current school year. Any overpayments from a prior year that exceed the amount owed to an eligible entity for health care supplementation by March 31 of the following school year will be subtracted from other FSP payments owed to that eligible entity in April and subsequent months until the full amount of overpayment has been recovered. Any overpayments that cannot be subtracted from the current staff salary allotment or other FSP payments will be due and payable on request from the TEA.

(3)  Adjustments to allotment. For a period not to exceed five years after the close of a fiscal year, the TEA may adjust the amount of an eligible entity's staff salary allotment for that year as a result of review, investigation, or audit of the eligible entity's reports of eligible employees and other data related to the staff salary allotment.

Statutory Authority: The provisions of this 61.1018 issued under the Texas Education Code, 22.102.

Source: The provisions of this 61.1018 adopted to be effective January 31, 2006, 31 TexReg 490; amended to be effective March 5, 2009, 34 TexReg 1584.


61.1019. Additional State Aid for Ad Valorem Tax Credits under the Texas Economic Development Act.

(a)  General provisions. This section implements the Texas Education Code (TEC), 42.2515 (Additional State Aid for Ad Valorem Tax Credits Under Texas Economic Development Act). In accordance with the TEC, 42.2515, a school district, including a school district that is otherwise ineligible for state aid under the TEC, Chapter 42, is entitled to state aid in an amount equal to the amount of all tax credits applied against ad valorem taxes of the school district in each year that tax credits were applied pursuant to the Texas Tax Code, Chapter 313, also known as the Texas Economic Development Act. School districts eligible to receive additional state aid under the TEC, 42.2515, must apply to the commissioner of education in order to receive additional state aid equal to the qualifying ad valorem tax credits issued under the Texas Tax Code, Chapter 313, Subchapter D, subject to certain annual limitations.

(b)  Definitions. The following phrases, words, and terms, when used in this section, will have the following meanings, unless the context clearly indicates otherwise.

(1)  Eligible property--A term that has the meaning assigned in the Texas Tax Code, 313.024.

(2)  Limitation on appraised value--A term that has the meaning assigned in the Texas Tax Code, Chapter 313. A school district may limit the appraised value on a qualified property for the purposes of ad valorem taxation for a period of eight tax years, beginning with the tax year that follows the applicable two-year qualifying time period. A limitation on appraised value applies only to the maintenance and operations portion of a school district's ad valorem tax rate. For each tax year in which the limitation on appraised value is in effect, the appraised value of the qualified property that is described in the written agreement between the school district and taxpayer for school district maintenance and operations ad valorem tax may not exceed the lesser of the market value of the property or the amount to which the school district has agreed, but the limited amount must be at least the minimum amount of limitation that is set for the applicable school district category in the Texas Tax Code, Chapter 313.

(3)  Qualified property--A term that has the meaning assigned in the Texas Tax Code, 313.021(2).

(4)  Tax credit--A credit that is made to a taxpayer who has applied for and received a limitation on appraised value under the Texas Tax Code, Chapter 313, from the school district that approved the limitation in an amount equal to the amount of ad valorem taxes paid to that school district that were imposed on the portion of the appraised value of the qualified property that exceeds the amount of the limitation agreed to by the governing body of the school district under the Texas Tax Code, 313.027(a)(2), in each year in the applicable qualifying time period.

(5)  Tax year--The calendar year beginning January 1 in which the taxpayer incurred ad valorem taxes on the qualified property for which the taxpayer is entitled to a tax credit toward ad valorem taxes paid in that tax year.

(6)  Texas Economic Development Act--The Texas Tax Code, Chapter 313.

(c)  Eligibility for additional state aid.

(1)  A school district may be eligible for additional state aid under the TEC, 42.2515, only pursuant to the provisions of the TEC, 42.2515, and the Texas Tax Code, Chapter 313.

(2)  A school district must file an application on a form prescribed by the commissioner in accordance with the applicable timeline as described in subsection (i) of this section. A separate application must be made for each tax year for which additional state aid is being requested. An application, including the required supporting documentation described in subsections (d)(2) and (d)(3) of this section, as applicable, must be complete in order for the Texas Education Agency (TEA) to process it.

(3)  A school district must be in compliance with the reporting requirements set forth in 34 Texas Administrative Code Chapter 9, Subchapter F (relating to Limitation on Appraised Value and Tax Credits on Certain Qualified Property), to be eligible for additional state aid under the TEC, 42.2515.

(d)  Procedures for filing request for additional state aid for ad valorem tax credits.

(1)  Method of filing. All requests for additional state aid under the TEC, 42.2515, must be filed by mail with the TEA, 1701 North Congress Avenue, Austin, Texas 78701, in accordance with instructions on the application.

(2)  Information required for first year of tax credit. A school district's initial request for additional state aid under the TEC, 42.2515, must include:

(A)  a completed Request for Additional State Aid for Ad Valorem Tax Credit application form, including the template that comprises a component of the application showing requested and projected additional state aid for each agreement under the Texas Tax Code, Chapter 313;

(B)  a copy of the taxpayer's application to the school district for the tax credit, together with all required attachments to the application;

(C)  a copy of the school board's resolution or other proof that the school district has approved the taxpayer's application for the tax credit;

(D)  a copy of the tax bill sent to the taxpayer (showing the credit) or other proof that the school district has reimbursed the tax credit to the taxpayer; and

(E)  confirmation that, as of the date of the tax credit approval, the taxpayer has not relocated its business outside of the school district.

(3)  Information required for subsequent years of tax credit. For each year subsequent to the year in which the initial request for the tax credit was approved, the request for additional state aid under the TEC, 42.2515, must include:

(A)  a completed Request for Additional State Aid for Ad Valorem Tax Credit application form, including the template that comprises a component of the application showing requested and projected additional state aid for each agreement under the Texas Tax Code, Chapter 313;

(B)  a copy of the tax bill sent to the taxpayer (showing the credit) or other proof that the school district has reimbursed the tax credit to the taxpayer; and

(C)  confirmation that, as of the date of the tax credit approval, the taxpayer has not relocated its business outside of the school district.

(e)  Forms. The division of the TEA responsible for state funding will make available the application form, including the template, required under subsections (d)(2) and (d)(3) of this section.

(f)  Limitation of tax credit. In the fourth through the tenth years in which the agreement described in subsection (b)(2) of this section is in effect, the tax credit is limited to 50% of the total maintenance and operations and interest and sinking fund taxes imposed on the qualified property for the tax year for which the credit applies.

(g)  Determination of additional state aid. For any tax year for which additional state aid authorized by the TEC, 42.2515, is approved, additional state aid will be limited to the amount of the tax credit due to the taxpayer for a qualified property that is receiving a limitation on appraised value for that year as determined in the Texas Tax Code, 313.104.

(h)  Erroneous tax credits and recovery of state aid for erroneous tax credits. If the comptroller of public accounts or the governing body of the school district determines that an entity that received a tax credit was ineligible to have received it or received more credit than the entity should have received, the school district must provide a notification of the facts to the commissioner within 30 days of the official action. If the TEA determines that an entity that received a tax credit was ineligible to have received it or received more credit than the entity should have received, the commissioner will notify the school district within 30 days of the determination. Any overpayment of additional state aid provided to the school district based on issuance of an erroneous tax credit by the school district will be fully recovered by the TEA pursuant to the TEC, 42.258.

(i)  Timeline for submission of application requests.

(1)  For tax credits earned under the TEC, 42.2515, for taxes that became due and payable on January 31, 2009, or at any time before that date, the school district must submit its application for additional state aid for ad valorem tax credits on or before May 31, 2009.

(2)  For tax credits earned under the TEC, 42.2515, for taxes that become due and payable on January 31, 2010, or at any time after that date, the school district must submit its application for additional state aid for ad valorem tax credits on or before May 31 each year for which the tax credit is due.

(j)  Payment to the school district. On approval of a school district's application for additional state aid for ad valorem tax credits by the commissioner, the amount of the credit will be applied to the entitlement due to the school district under the Foundation School Program as follows.

(1)  State aid payments for tax credits on taxes that become due and payable after January 31, 2009, will be applied to the school district entitlement as prescribed by the TEC, 42.2516(b-2)(1). Payments for this credit will be incorporated into the payments made under the schedule prescribed by the TEC, 42.259.

(2)  State aid payments for tax credits on taxes that were due and payable on January 31, 2009, or at any time before that date will be paid on or before August 31, 2009. This paragraph expires on September 1, 2009.

Statutory Authority: The provisions of this 61.1019 issued under the Texas Education Code, 42.2515.

Source: The provisions of this 61.1019 adopted to be effective April 23, 2009, 34 TexReg 2532.


For additional information, email rules@tea.state.tx.us.