HB 3 FAQ: Increases Funding and Equity

Compensatory Education:

1. How did the Compensatory Education allotment change?  
   •  HB 3 increases the Compensatory Education allotment and targets additional resources toward those students with the most need. The new funding methodology is now a tiered multiplier for those students eligible for a free and reduced lunch, based on the tier of the student’s home address census block group. Increased funding based on the census block group is on a scale of 0.225 up to 0.275.
2. What is the difference between an economically disadvantaged student and an educationally disadvantaged student?  
   •  The terms have an identical meaning. Texas Education Code (TEC) §5.001(4) defines educationally disadvantaged as “eligible to participate in the national free or reduced-price lunch program.” Therefore, when we use educationally disadvantaged student, we are saying the student qualifies for the free or reduced-price lunch program. Since students who are economically disadvantaged qualify for the free or reduced-priced lunch program the terms have the same meaning. 
3. How are students determined to be educationally disadvantaged?  
   • Guidelines for determining a student’s economically disadvantaged status can be found in the Texas Education Data Standards: http://castro.tea.state.tx.us/tsds/teds/2020A/teds-ds2.4.pdf (Pages 31-34). Once a student is determined to be educationally disadvantaged they are reported as such in the PEIMS Fall submission.
4. Do I now get Compensatory Education funding for all students based on their home address tier?  
   • No. Students must first meet the eligibility requirements for compensatory education (i.e. be classified as educationally/economically disadvantaged).
5. What if I can’t identify a student’s census block group from the tool that will be created by TEA for use this Fall?  
   • Sometimes, especially for new addresses, lookup tools will not produce results. Feel free to consult census block group maps to make the identification manually. In the event a census block group is not identified, the eligible student will be assumed into the lowest funded tier, receiving the 0.225 weight. TEA will release a tool to help identify census block groups in Fall of 2019. 
6. What address should I use for determining the census block group for a student with a P.O. Box?  
   • A P.O. Box is not a resident address therefore the district needs to obtain the address of where the student resides.
7. What address should I use for determining the census block group for a student who is Homeless?  
   • Districts do not need to report a census block group for a student who is homeless. TEA will use the address of the campus on which the student is enrolled to determine the census block group for that student.
8. What address should I use for determining the census block group for a student residing in a residential facility?  
   • There are some funding and data collection issues with regard to residential facility students that require additional review by TEA. So expect more guidance on this issue to be posted to the HB 3 Frequently Asked Question document in the coming weeks.
9. What if a block group doesn’t have a tier assigned due to insufficient census information?  
   • A small number of census block groups in Texas have insufficient data to assign a census tier. In all non-standard cases, educationally disadvantaged students will be assigned into the lowest funded tier, receiving the 0.225 weight. Note that this weight is still higher than the previous weight of 0.2. 
10. What is the methodology for funding estimates for the SCE allotment for 2019-2020 school year?    
    • TEA will initially fund the SCE allotment for 2019-2020 based on the census block group of each campus and the fall 2018 student estimates. This funding methodology produces an estimate. But this is NOT the actual payment methodology stipulated by law. This methodology is used because student enrollment information by census block group is not yet known. As a result, a reconciliation process will be required after that information is obtained.
11. What is the methodology for future funding for the SCE allotment?  
    • Beyond 2019-2020, Legislative Payment Estimate (LPE) funding estimates will be based on census block groups reported as of the prior year’s fall snapshot date for educationally disadvantaged students.
12. How do we handle Community Eligibility Provision students for Compensatory Education funding?  
    • Prior to HB 3, school districts and charter schools participating in a CEP were required to follow 19 TAC §61.1027 for an alternative reporting method. This will not change. Districts are required to collect information to determine if a student is educationally disadvantaged for determining funding for Compensatory Education.
13. Can funds be spent on students at-risk of dropping out as defined in TEC 29.081(d)?  
    • Yes. Students that meet one of the 13 criteria are eligible for the same supplemental services they received before the passage of HB 3. Additionally, the students who are designated as educationally disadvantaged can receive supplemental services paid for with Compensatory Education funds.
14. Will TEA continue to allocate expenditures coded to Program Intent Code (PIC) 99?
    • Yes. TEA will continue to allocate PIC 99 to the other programs through PEIMS after the mid-year submission. However, TEA recommends that districts and charters code as much as they can to the actual program and campus.
15. Can I continue to use State Compensatory Education Allotment funds to pay for the second half of a pre-k program?  
    • Yes, you may continue to use State Compensatory Education funds to pay for the second half of a pre-k program as long as the students meet the eligibility for use of the allotment. Additionally, HB 3 added the Early Education Allotment, which is another significant funding stream for districts and charters to use to fund the second half of a pre-k education program. The district or charter is required to offer a full day pre-k program for four-year-olds and may use other funding sources as long as the student meets the allowability for use guidelines.
16. What if my district does not meet the spending requirements for this year because of the changes that were made to state funding?
    • The district or charter will be required to make up the difference in the following year. For example: District received $100, required to spend $55 on the program, only spent $45. The following year the district would be required to spend $10 plus 55% of the new allotted amount for the year. The district or charter needs to meet the needs of its students regardless of the difficulties in budgeting.
17. Are recapture payments from school districts used to fund other functions of the state budget?
    • No.  Recaptured funds are appropriated in the General Appropriations Act as a method of finance to help pay for the Foundation School Program (FSP).  Texas Education Code, 49.154(b) states, “Receipts shall be deposited in the state treasury and may be used only for foundation school program purposes.”
18. What happens if I don’t compress my taxes in compliance with HB 3?
    • The agency, in calculating funding under the FSP, will reduce state aid or adjust recapture in an amount equal to the amount of revenue generated by a school district’s tax effort that is not in compliance with HB 3.
19. How do I…?
    • Visit the Excess Local Revenue webpage on the TEA’s website at: https://tea.texas.gov/Finance_and_Grants/State_Funding/Excess_Local_Revenue/ or contact Kim Wall at kim.wall@tea.texas.gov or (512)-463-4809.

Charter Schools:

1. Will there be any information released on how to calculate funding for charter schools?  
   • TEA has released an updated Charter Estimate of State Aid Template. 
2. Are charter schools entitled to the Small and Mid-Sized Allotment under Section 1.023?    
   • Charters receive an adjusted state average for the Small and Mid-Sized district allotment. This adjustment works differently for charters than it does for independent school districts.  See TEC 12.106(a-2) and the Charter Estimate of State Aid Template (set to be released in July) for more information.
3. Are charter schools eligible for the Fast Growth Allotment?
   • No, Charter Schools are not eligible for the Fast Growth Allotment. Texas Education Code, Section 12.106 (a) – (HB 3, Enrolled – Page 3) excludes the Fast Growth Allotment from charter school funding.
4. How will charters meet Maintenance of Effort (MOE) requirements?
   • MOE related to special education compares year over year expenditures for students with disabilities, not the size of the Tier One allotment for the charter school. Charter schools may use funds from the small and mid-sized district charter allotment to meet MOE requirements.
5. How does HB 3 change Pre-K requirements for charters?
   • The requirement for charters to offer Pre-K was not changed with HB 3. But for charters who choose and are approved to offer Pre-K, those requirements have changed. For more information, please watch the Pre-K HB 3 in 30 video at https://youtu.be/8kXCOGvrTPc.
6. How does HB 3 change charter requirements for Gifted & Talented students?
   • HB 3 does not change charter requirements for Gifted and Talented. Please watch the HB 3 in 30 video on Gifted & Talented for more information.
7. Are charters who newly exist in 2019-20 required to calculate compensation increases?
   • No, the compensation increase requirement applies to increases realized 2019-2020 over the 2018-2019 school year. Charters that did not exist in the prior year have no basis to calculate the 30%, so they are not subject to this requirement.
8. Do charters have to increase salaries up to the minimum salary?
   • No, charter schools are not subject to the minimum salary schedule.Charter schools are still required to use 30% of their funding gain for compensation increases for employees who would be subject to the minimum salary schedule if they were employed at a school district.
9. Does an educator’s certification status matter when determining TRS Payments a charter must make?
   • No. It’s any employee that fits the category, even if they aren’t certified. The four categories of employee are: classroom teacher, school librarian, school counselor, and school nurse.

Fast Growth Allotment:

1. What districts will receive the Fast Growth Allotment?  
   • The State Funding Division will publish a list of eligible districts in advance of updating the summary of finances. Preliminary estimates were released in a recent To the Administrator Addressed letter on 6/11/19 and may be found here. Additionally, rulemaking in regards to the Fast Growth Allotment is anticipated. A timeline for rules from House Bill 3 is available on TEA’s House Bill 3 webpage. 
2. If a district is on the list for the Fast Growth Allotment will it remain on the list for the biennium?    
   • House Bill 3 requires an annual recalculation of eligible districts based upon the prior 3-year average enrollment growth. 

Bilingual Education Allotment:

1. What is the difference between the terms Limited English Proficient, English Language Learner, and English Learner?
   • Texas Education Code (TEC) 29.052 refers to students who are in the process of acquiring English and have a primary language other than English as Limited English Proficient (LEP). Texas Administrative Code (TAC) Chapter 89 used the term English Language Learner (ELL) but in recent revisions updated to the term English Learner (EL) in alignment with the Every Student Succeeds Act (ESSA).
2. Did spending requirement compliance enforcement change with HB 3?
   • Compliance enforcement with state spending requirements is no different under HB 3. The agency has historically enforced corrective action plans for LEAs if they fail to meet their spending requirements over a three-year average. That agency practice is now adopted in law.

3. Can an individual simultaneously pursue a content and bilingual teacher certification? 
   Yes. Individuals may pursue an initial certification in a content area and bilingual supplemental certification concurrently.  Additionally, Individuals who are already initially certified in a content area may take and pass the necessary certification exams to add a bilingual supplemental certification through the certification by exam process.

4. Does a teacher need to be a certified bilingual teacher in order for a district to access funding under the Bilingual Education Allotment (BEA) in HB 3?
   No. BEA funding is generated by students in average daily attendance in a bilingual or ESL program, not by teachers, bilingual-certified or otherwise. However, a district that does not have certified bilingual teachers to serve limited English proficient students in a bilingual program must request an exception from the bilingual certification requirement from TEA. A district that is granted an exception must expend a minimum of 10% of its BEA funds for professional development to help remedy the teacher certification deficiency.