Hinojosa Bill Puts School Surplus Diversions On Property Tax Bills

The text as introduced · 1,379 words

By: Hinojosa
H.B. No. 5419

A BILL TO BE ENTITLED

AN ACT

relating to eliminating inefficiencies in the organization,

operation, powers, regulations, and management of the Texas

Education Agency to prioritize the provision of funding directly to

public schools.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 7.004, Education Code, is amended by

amending Subsection (a) and adding Subsection (c) to read as

follows:

(a) The Texas Education Agency is subject to Chapter 325,

Government Code (Texas Sunset Act). Unless continued in existence

as provided by that chapter, the agency is abolished September 1,

2027 [ 2029 ].

(c) In this subsection, "contract" includes an amendment,

modification, renewal, extension, a purchase order, or an

interagency contract and includes a contract that was paid with

federal funds or funds not appropriated by the General

Appropriations Act. The Sunset Advisory Commission, with the

assistance of the State Auditor's Office, shall evaluate the

efficiency and effectiveness of the organization, operation,

powers, regulations, and management of the agency, including growth

in full-time equivalent staff at the agency and growth in grant

programs and grant conditions that result in hiring of additional

staff at public schools. The evaluation shall include a review of

each contract that was entered into by the agency since 2016 and

that equals or exceeds $100,000, with a review of contracting

procedures used by the agency and total cost of all contracts for

each program area or activity. The review also shall include, if

the contract is for a good or service used in public schools, an

annualized cost of each contract, annual number of students,

educators, or other users directly using a good or service under

each contract, the annualized cost per user under each contract,

and the amount of any implementation costs to public schools. In

addition to its report required under Chapter 325, Government Code,

the commission shall present to the 90th Legislature a report on its

evaluation and recommendations under this subsection. This

subsection expires September 1, 2027.

SECTION 2. Subchapter B, Chapter 7, Education Code, is

amended by adding Sections 7.041 and 7.042 to read as follows:

Sec. 7.041. STATE POLICY: PRIORITIZE PUBLIC SCHOOLS. (a)

It is the policy of this state that the agency shall be efficient in

its operations and that state funds be prioritized for the direct

support and maintenance of the public schools.

(b) Notwithstanding any other law, the agency may not:

(1) set aside or encumber funds, including a federal

block grant, that otherwise could go directly to public schools for

purposes of Subsection (c);

(2) enlarge, or request legislation to enlarge, the

agency's scope; or

(3) increase the number of full-time equivalent

employees beyond the level authorized by the 88th Legislature.

(c) It is the policy of this state that funds for education

that are not obligated by constitution or statute be prioritized as

follows:

(1) attaining and maintaining pay for classroom

teachers of at least the national average, with an adjustment

upwards for pay that is competitive with professionals in the

region who have similar levels of education and skill;

(2) providing an increase to the school safety

allotment sufficient to meet the needs of public schools and to

cover the costs and requirements of statutes and rules regarding

school safety; and

(3) providing funding for public schools sufficient to

meet the needs of students with disabilities and to cover the costs

and requirements of statutes and rules regarding special education.

(d) It is the policy of the state that when, due to school

districts' property value growth, increase in attendance credits

under Chapter 49, or change in student enrollment or attendance,

state appropriations of general revenue to the Foundation School

Program maintenance and operations funds for a year are supplanted

as surplus, the agency identify the amount of that general revenue

surplus and submit a request to the office of the governor and the

Legislative Budget Board for an appropriation or budget execution

authority under Chapter 317, Government Code, to provide the

general revenue surplus back to the Foundation School Program for

the priorities under Subsection (c). If in any year an

appropriation or budget execution authority does not provide the

surplus to the Foundation School Program or to school district

property tax relief, the next tax bill under Section 31.01, Tax

Code, shall inform each taxpayer of the diversion of the Foundation

School Program surplus.

Sec. 7.042. ZERO-BASED BUDGET REQUIRED FOR TEXAS EDUCATION

AGENCY OPERATIONS; CONTENTS. (a) In this section, "agency

operations budget" means the budget for agency administration and

operations. The term does not include any state aid or allotment

under this code that is received by school districts or

open-enrollment charter schools or, under Section 48.308, by the

higher education coordinating board.

(b) In addition to the required annual budget under Section

7.055, the commissioner shall prepare, in plain language and an

easily readable and understandable format, a zero-based agency

operations budget every tenth fiscal year that contains:

(1) a description of the discrete activities the

agency conducts or performs with:

(A) a justification for each activity by

reference to the state constitution, statute, or rule; and

(B) an external evaluation of the effectiveness

and efficiency of the agency's policies, management, fiscal

affairs, and operations in relation to each activity;

(2) for each activity identified under Subdivision

(1):

(A) a quantitative estimate of any adverse

effects that may reasonably be expected to result if the activity

were discontinued, with a description of the methods by which the

adverse effects were estimated;

(B) an itemized account of expenditures required

to maintain the activity at any minimum level of service required by

law, with a concise statement of the quantity and quality of service

required at that minimum level; and

(C) an itemized account of expenditures required

to maintain the activity at the current level of service, with a

concise statement of the quantity and quality of service provided

at that level;

(3) a ranking of activities identified under

Subdivision (1) that illustrates the relative importance of each

activity to the overall goals and purposes of the agency at current

service levels; and

(4) recommendations to the legislative budget board

and office of the governor regarding whether the agency should

continue funding each activity identified under Subdivision (1)

and, if so, at what level.

(c) The commissioner shall file a copy of the zero-based

budget with the legislative budget board and the office of the

governor on or before the date the proposed annual budget is filed,

and the zero-based budget shall be posted on the agency's Internet

website.

SECTION 3. Section 7.055(c), Education Code, is amended to

read as follows:

(c) The budget the commissioner adopts under Subsection (b)

for operating the Foundation School Program must be in accordance

with legislative appropriations and provide minimal funds for the

administration and operation of the agency and any other necessary

expense required by statute . The budget must designate any expense

of operating the agency or operating a program for which the board

has responsibility that is paid from the Foundation School Program.

The budget must designate program expenses that may be paid out of

the foundation school fund, other state funds, fees, federal funds,

or funds earned under interagency contract. Before adopting the

budget, the commissioner must submit the budget to the board for

review and, after receiving any comments of the board, present the

operating budget to the governor and the Legislative Budget Board.

The commissioner shall provide appropriate information on proposed

budget expenditures to the comptroller to assure that all payments

are paid from the appropriate funds in a timely and efficient

manner.

SECTION 4. Section 322.017, Government Code, is amended to

add Subsection (b-1) to read as follows:

(b-1) The board shall review and analyze the effectiveness

and efficiency of the policies, management, fiscal affairs, and

operations of the Texas Education Agency and report its findings by

September 1, 2026, for consideration in connection with the

legislative appropriations process. This subsection expires

September 1, 2027.

SECTION 5. (a) The commissioner of education shall prepare

an initial zero-based budget as described by Section 7.042,

Education Code, as added by this Act, for the fiscal year beginning

September 1, 2026.

SECTION 6. This Act takes effect September 1, 2025.