HBA-JEK, CCH H.B. 1084 77(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 1084
By: Hochberg
Public Education
4/10/2001
Introduced



BACKGROUND AND PURPOSE 

The cost of education index (CEI) is the mechanism that the Texas Education
Agency uses to determine each school district's state aid to reflect the
geographic variation in known resource costs and costs of education beyond
the control of the school district.  Under current law, the foundation
school fund budget committee has adopted the CEI as it was contained in the
Texas Administrative Code on March 26, 1997. The rules governing the
formula used for the CEI have not been updated since 1991.  House Bill 1084
provides that the commissioner of education adopt the CEI based on a
statistical analysis conducted independently from the Texas Education
Agency and the Legislative Budget Board every five years.  

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that rulemaking
authority is expressly delegated to the commissioner of education in
SECTION 1 (Section 42.102, Education Code) of this bill. 

ANALYSIS

House Bill 1084 amends the Education Code to provide that the cost of
education adjustment is the cost of education index adjustment adopted by
the commissioner of education (commissioner), rather than the school fund
budget committee.  The bill provides that the commissioner will notify each
school district no later than July 15, 2001, of its cost of education index
adjustment for the 2001-2002 school year.   

H.B. 1084 requires the adjustment to be based on a statistical analysis
conducted by an organization independent from the Texas Education Agency
(TEA) and the Legislative Budget Board (LBB).  The bill requires the
analysis to be designed to isolate the independent effects of
uncontrollable factors on the compensation that school districts must pay,
including teachers' salaries and other benefits, but excluding state-paid
benefits and at a minimum to include variations in the characteristics of
teachers, teachers' working environments, and the economic and social
conditions of the communities in which teachers reside. In accordance with
a determination of the commissioner, the bill prohibits a school district's
cost of education index adjustment from being less than its cost of the
adjustment for the 2000-2001 school year. The bill requires the cost of
education index adjustment for each school district for the 2001-2002
school year to be used for the 2002-2003, 2003-2004, 2004-2005, and
2005-2006 school years.  

H.B. 1084 requires the commissioner, no later than January 1, 2004, and
each five years thereafter, to execute a contract with an organization
independent from TEA and LBB to conduct a study of variation in known
resource costs and costs of education beyond the control of a school
district and to make recommendations to the commissioner as to methods of
adjusting funding to reflect variation in resource costs and costs of
education and to review and adopt the funding adjustments.  If the
recommended funding adjustments are not adopted, the existing cost of
education index adjustment is required to continue to be used.  The bill
authorizes the commissioner to adopt rules necessary for the implementation
of these provisions. 

The bill provides that weighted average daily attendance (WADA) is
calculated by dividing the sum of the school district's allotments
determined under the basic and special allotments, less any allotment to
the  district for transportation and any allotment under law governing a
new instructional facility allotment by the basic allotment for the
applicable year.  The bill removes the provision that  50 percent of the
cost of education adjustment is subtracted from the sum of the school
district's allotments. 

EFFECTIVE DATE

On passage, or if the Act does not receive the necessary vote, the Act
takes effect September 1, 2001.