HOUSE BILL 3
TEXAS SCHOOL FINANCE

Funding Increases On Average - $635 per ADA

Supports Teachers and Rewards Teacher Excellence

Teacher Incentive funding

30% of a district’s budget increase must go to increases in compensation & 75% of this total must go to teachers, librarians, counselors, and nurses, with priority given to veteran classroom teachers (greater than 5 years experience)

goal of a six-figure salary for teachers who prioritize teaching in high needs areas and rural district campuses

Funding ranges from $3,000-$32,000 per teacher per year, using new Compensatory Education spectrum system

Increased Minimum Salary Schedule

This increases the minimum salary schedule (MSS) by $5.5K-$9K per creditable year of service (CYS)

Teacher Retirement System (TRS) contributions from the state for all who are subject to the MSS will be increased, reducing the amount LEAs fund out of their own budgets

Teacher Mentor Allotment Program

Districts must meet certain quality requirements when implementing their mentoring programs

Mentors must work with new teachers immediately after they start and for their first two years as teachers

Mentors must be trained, must cover specific topic areas with their mentees, and must have designated time to provide training to the new teachers whom they are mentoring

Do Not Hire Registry

TEA is required to create a new Do Not Hire Registry and place individuals on the Registry

Had a State Board for Educator Certification (SBEC) certificate previously revoked for abusing a student or minor, or soliciting / engaging in an inappropriate relationship with a student or minor

Were found by the Commissioner to be a non-certified person who abused a student or minor, or solicited / engaged in an inappropriate relationship with a student or minor

Were found to be ineligible due to having certain criminal history

All public schools must investigate and report suspected abuse or solicitation of a student or minor regardless of a resignation. Schools must also terminate, or otherwise not hire, anyone listed on the registry

Increases Funding and Equity

New Compensatory Education Spectrum

Comp Ed funding is provided for students who are educationally disadvantaged (i.e. eligible for free and reduced-priced lunch)

Formula for Comp Ed increases from 0.20 to a range of 0.225-0.275 per student based on the census block group of the student’s home address

Requires TEA to establish an Advisory Committee on the Comp Ed Spectrum approach

Requires TEA to enact rules for tiering criteria

Current year values equalizing Tier One

Equal treatment of ASF funding

Support for High-Needs Schools

Establishes a Drop Out Recovery and Residential Facility Allotment

Adds $275 per student in ADA in a drop out recovery school or residential facility

Cost of Education Index

Repeals the Cost of Education Index (CEI), so districts no longer receive funding based on a decades old metric

Requires TEA to study geographic variations in resource costs and cost of education, including transportation

Switch To Current Year Values

Utilizes current tax year property values (vs. prior tax year property values) for the local share calculation

This change effectively rolls the “lag money” that previously resulted in varying amounts of revenue available to districts above or below formula entitlement into the basic allotment to equally benefit all districts

This change almost completely eliminates the impact of property wealth on a district’s Tier One budget, so that Tier One is funded entirely based on formula determinations of student need and district characteristics

Fast Growth Allotment and NIFA

Adds a Fast Growth Allotment of 0.04 for each student in ADA to support rapidly growing districts

The top 25% of districts by enrollment growth over three years are designated as “Fast Growth” and are eligible for the allotment

Open-enrollment charter schools are not eligible

Final methodology subject to TEA rulemaking

Increases the New Instructional Facility Allotment (NIFA) maximum annual appropriation from $25 million to $100 million

This increase aligns with the increase to the per student multiplier (from $250 to $1,000) that occurred in 2017

Gifted and Talented Allotment

Removes the Gifted & Talented (GT) Allotment as a discrete, stand-alone Tier One allotment

The GT Allotment funding amount was reallocated into the basic allotment

Requires school districts and open-enrollment charter schools to continue to provide GT programs

A district shall adopt a policy regarding the use of funds to support the program

Requires each district to annually certify to the Commissioner that the district has established a program for gifted and talented students

If Commissioner determines a district has failed to comply, TEA shall reduce funding in an amount equal to the basic allotment multiplied by 0.12 and 5% of the students in ADA

Transportation Funding Changes

Amends statute for transportation from linear density to a simple $1.00 per mile reimbursement (set at $1.00 per mile in the General Appropriations Act)

Previously, transportation funding was not provided to Chapter 41 districts. Now, transportation funding is equally available to all districts.

Certain new transportation options have become eligible fo

Homeless students (regardless of distance to campus)

Work-based learning site transportation under a district’s CTE program

Dual credit students (to a local college or a neighboring district)

Small and Mid-sized District Allotment

Recapture No Longer Impacts District Entitlement

Recapture is now local revenue in excess of entitlement instead of on a wealth per WADA basis

Districts are now guaranteed that recapture will not reduce revenue below their entitlement level

Early Agreement Credit on recapture has been repealed

Recapture for school year 2019-20 is reduced from $3.55 billion to $1.95 billion (45%)

Other Changes To Equalize Funding

Establishes an Equalized Wealth Transition Grant

The grant establishes a 5-year glide path off of the 1992-1993 Chapter 41 hold harmless (repealed by HB 3)

The grant establishes a 5-year glide path off of the 1992-1993 Chapter 41 hold harmless (repealed by HB 3)

In prior law, only Chapter 41 districts received the ASF on top of their Tier One entitlement

Disaster Aid, when appropriated, applies equally to recapture and non- recapture districts

Disaster aid for facility repair now includes vehicles and computer equipment

Repeals the Staff Allotment and redirects the funding to the basic allotment

Formula Transition Grants

School districts and open-enrollment charter schools are entitled to receive the lesser of 103% of the M&O funding they would have received under old law, or 128% of the state average M&O funding under old law

For school years ending in odd years (SY 2020-21, SY 2022-23, and SY 2024-25) school districts and charter schools receive the better of SY 2019-20 or SY 2020- 21 under old law

Except for a small number of districts that received the 1992/93 hold harmless, no districts or open-enrollment charter schools lose funding relative to old law during SY 2019-20 or SY 2020-21

The formula transition grant expires after five years (SY 2023-24)

Focuses on Learning and Improving Student Outcomes

Early Education Allotment

Funds must be used to support implementing early literacy and mathematics proficiency plans that lead to improved third grade proficiency

In grades K-3

Who is educationally disadvantaged or Limited English Proficient (LEP)

A student who is both educationally disadvantaged and limited English proficiency generates a funding weight of 0.20

Full day Pre-K and K-3 reading support

Requires high-quality program requirements of all prekindergarten classrooms in Texas

Requires consideration of partnerships with quality child care providers before issuing bonds for new classrooms

To support districts who may need time to reach the quality requirements, a waiver is available

District must demonstrate they sought a public-private partnership

Waivers last up to three years and may only be renewed once

Early Literacy and Mathematics Proficiency

Requires boards of school districts and open-enrollment charter schools to adopt literacy and mathematics proficiency plans and post on their website

Boards must set specific annual reading and mathematics performance goals for each campus for five years

Goals are adopted for all students and for disaggregated student groups

School boards must monitor progress toward those goals at least once annually

Plans must be posted online

Improving Reading Outcomes

HB 3 amends statute to include multiple reading initiatives

Requires districts and charters to provide a phonics curriculum using systematic direct instruction in grades K-3

Requires each teacher and principal in grades K-3 to attend reading academies by 2020-2021

Requires districts to certify to the TEA that the district:

Prioritizes placing highly-effective teachers in K-2 and

Has integrated reading instruments to support Pre-K to grade 3 students

Requires TEA to:

Provide technical assistance

Monitor implementation and report to the legislature

Establish a Reading Standards Advisory Board

Preparing New Teachers

To earn a certificate to teach Pre-K to grade 6, a candidate must demonstrate proficiency in the science of teaching reading on a certification examination by January 1, 2021

Language comprehension

Background Knowledge

Facts, concepts, etc.

Vocabulary

Breadth, precision, links etc.

Language Structure

Syntax, semantics, etc.

Verbal Reasoning

Inference, metaphor etc.

Literacy Knowledge

Print concepts, genres, etc.

Word comprehension

Sight Recognition

of familiar words

Decoding

Alphabet, sound correspondence

Phonological Awareness

Syllables, phonemes etc.

Improved Reading Diagnostic Instruments

HB 3 amends statute regarding the use of kindergarten readiness reading diagnostics

Requires the Commissioner to adopt a multi-dimensional assessment tool that includes a reading instrument

Requires the Commissioner to establish a common kindergarten readiness standard to ensure alignment across the state

Districts must communicate the result of this diagnostic to parents within 60 calendar days

Dyslexia funding

School districts and open-enrollment charter schools now receive a weight of 0.10 multiplied against the Basic Allotment for each student that has been identified as having Dyslexia or a related disorder

Dual Language

Expands the Bilingual Education Allotment to increase student support for literacy in English and other languages

Includes incentivized funding for dual language

two-way program models

0.15 for LEP students

0.05 for native English speaking students

Incentivizes districts to integrate English learners and native English speakers into dual language programs

Requires TEA to develop tools to assist school districts and charters to implement these programs

College, Career, and Military Readiness Plans

Requires boards of school districts and open-enrollment charter schools to adopt college, career and military readiness plans and post on their website

Boards must set specific annual college, career and military readiness performance goals for each campus for five years

Goals are adopted for all students, and for disaggregated student groups

Boards must monitor progress towards the goals at least annually

Plans must be posted online

Outcomes Bonus and CTE Funding Expansion

Establishes a CCMR Outcomes Bonus paid for each annual graduate above a certain threshold percentage. Requires Commissioner to adopt rules

Economically Disadvantaged: $5,000 for each CCMR graduate (Likely to be above the first 13% of eco-dis graduates)

Non-Economically Disadvantaged: $3,000 for each CCMR graduate (Likely to be above the first 25% of non eco-dis graduates)

Special Education: In addition to the above, $2,000 for each CCMR graduate enrolled in special education

CTE funding expansion

Adds Technology Applications to funding weight – including all computer science

Extends to CTE & Tech Apps courses offered in grade 7

New funding to support the P-TECH and New Tech HS models

Adds a reimbursement to districts to offer one free college & one free industry entrance exam per student before they graduate

Reimbursement for one HS student for SAT/ACT/TSIA

Reimbursement for one HS student for any of the 220 approved Industry Based
Credentials (IBC)

Requires every student to fill out a FAFSA to graduate (Allows for opt-out)

Establishes a FAFSA advisory board to advise on policy and implementation

Removes High School Allotment

Previous funding for the HS Allotment has been redirected to the basic allotment

Increased SPED support

Increased Resources, Planning and Training

Increases Special Education weight from 1.1 to 1.15 for students served in a mainstream setting

Authorizes a district to pay compensation incentives to teachers that complete autism training at a regional Education Service Center (ESC)

Requires the Commissioner to establish a Special Education Advisory Committee to make recommendations regarding financing special education

Committee report due by May 1, 2020 which includes an analysis of moving towards funding services rather than instructional arrangement

New Dyslexia Allotment and CCMR Funding

Additional funding is provided to support students with Dyslexia

School districts and charter schools will now receive a weight of 0.10 multiplied against the Basic Allotment for each student that has been identified as having dyslexia or a related disorder

Students may qualify for both SPED and Dyslexia Allotments

Establishes CCMR outcomes bonus funds for each special education student who graduates college, career, or military ready

In addition to other CCMR outcomes bonuses for which the student may help the district earn funding, every student who receives special education and graduates CCMR entitles a district to $2,000

Expanding Learning Opportunities

Additional Instructional Days

funding support for school systems that want to add instructional days (beyond the minimum 180 days) to one or more of their elementary school calendars:

For grades Pre-K to grade 5

Half-day ADA funding for up to an additional 30 days of instruction (i.e. days 181 to 210)

Campuses receive the greater of the funding under district/charter partnerships (SB 1882, 85th Regular Session) or additional instructional days - not both

Not subject to compulsory attendance

takes effect for the 2020-21 school year

Summer CTE Grant Program:

Establishes a grant program for career and technology courses during the summer

Commissioner may collaborate with a private entity for this program

Blended learning Grant Program

Establishes a blended learning grant program that prioritizes LEAs with the highest enrollment of educationally disadvantaged students

To receive a grant, a school must:

Develop a blended learning plan

Provide training to teachers/personnel on effective blended learning practices

Certify to TEA the implementation of the blended learning model

Provide a report on outcomes of blended learning model (after 4th year)

A school may receive a grant for no more than four consecutive years.

Math Innovation Zones blended learning program qualifies

Subsidizes High School Equivalency Exams

Requires TEA to enter into a MOU with the Texas Workforce Commission to fund a subsidy for persons 21 years of age and older to take high school equivalency exams

Reduces and Reforms Property Taxes and Recapture

Tax rates drop an average of 8 cents in year one

Tax rates continue to decline as property values grow
more than 2.5%

Additional board local discretion

Recapture cut from $3.6B to $2.0B in year one

Max M&O Tax Rates Drop From $1.17 To $1.068

New Requirements for Local Tax Increases

Effective January 1, 2020, Efficiency Audits must take place before a district seeks voter approval for increasing tax rates. LBB establishes the guidelines for the audit. Districts must select the auditor at least four months before the scheduled tax increase election date;

New statutory language clarifies that a school district may not increase the M&O tax rate in order to create a surplus for the purpose of paying the district’s debt service. (i.e. no more “swap and drops” or “tax swaps”)

Tax Ratification Elections (TREs) must happen on uniform election days

Bond election notices must include “THIS IS A PROPERTY TAX INCREASE” language

Supports Teachers and Rewards Teacher Excellence

Increases Funding and Equity

Focuses on Learning and Improving Student Outcomes

Reduces and Reforms Property Taxes and Recapture

Supporters

Parents

Teachers

Texas Home School Coalition Association

Texas Parent PAC

Association of Texas Professional Educators (ATPE)

Texas State Teachers Association

Texas Association of School Boards

Texas Commission on Public School Finance

Texas Association Of School Administrators

Texas Education Agency

School District Employees

Opponents

lawmakers favoring district control of educator salaries

Bills Passed

House Bill 3 (HB 3) Implementation: K-2 Diagnostics

House Bill 3 (HB 3) Implementation: Financial Aid Application

House Bill 3 (HB 3) Implementation: Transportation Funding

House Bill 3 (HB 3) Implementation: Additional Days School Year

House Bill 3 (HB 3) Implementation: Reading Advisory Committee

House Bill 3 (HB 3) Implementation: Blended Learning Grant Program

House Bill 3 (HB 3) Implementation: Teacher Incentive Allotment

House Bill 3 (HB 3) Implementation: Teacher Appraisal Survey

House Bill 3 (HB 3) Implementation: Update on Changes to the Bilingual Education Allotment

House Bill 3 (HB 3) Implementation: Reading Practices

House Bill 3 (HB 3) Implementation of the Special Education and Dyslexia Allotment and Senate Bill 2075 Monitoring

House Bill 3 (HB 3) Implementation: Gifted/Talented Education Certification and Funding

House Bill 3 (HB 3) Implementation: Charter School Funding

House Bill 3 (HB 3) Implementation: College, Career, or Military Readiness CTE, Incentives for High School Models, and High School Equivalency

House Bill (HB 3) Implementation: Small and Mid-sized District Allotmen

House Bill 3 (HB 3) Implementation: Changes to Reporting Requirements and Creation of the Registry of Persons Ineligible to Work in Public Schools

Updates to Program Intent Codes

House Bill 3 (HB 3) Implementation: College, Career, or Military Readiness Sections

House Bill 3 (HB 3) Implementation: Current year values

Recapture Formula Changes and Reductions Under House Bill 3 (HB 3)

House Bill 3 Pre-K

House Bill 3 (HB3) Implementation: State Compensatory Education (SCE) Allotment and the SCE Advisory Committee

TEA Information Resources on House Bill (HB) 3

Minimum Salary Schedule Increase pursuant to House Bill 3 (HB3)

House Bill 3 (HB3) Implementation: Salary Increases

House Bill 3 (HB3) Implementation: Tax rate compression