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.