EA KEY GENERAL
EXAS
AUSTIN ~~.TJZXAES
March 9, 1964
Hon. J. W. Edaar Oninion No. C-224
Commissioner of Educati,on *
Texas Education Agency Re: Incentive aid payments to
Austin, Texas resulting consolidated in-
dependent school districts
under Article 2815-4 of
Vernon's Civil Statutes and
Dear Dr. Edgar: related questions.
We are in receipt of your request
. . for opinion
._ wherein
you asK several questlons concerning the incentive ale payments
to be given independent school districts created through con-
solidati,on. The original statute was codified as Article 2815-3
of Vernon's Civil Statutes; however, Article 2815-4, a 1963 en-
actment, is the most recent and will be cited herein as the
incentive aid payment statute. Article 2815-4 represents a re-
enactment of Article 2815-3 except for the change in Section 1B
to reduce the average daily attendance requirement from one thou-
sand to seven hundred and fifty. We shall proceed to answer your
questions in order of their submission.
Situation I
'Recently a County School Board (Oran e) has
annexed a common school district (Bancroft7 to an
adjoining independent school district (West Orange)
under Article 2922a. The resulting enlarged dis-
trict (West Orange) is an independent school dis-
trict (Art. 2922b) has in excess of 1000 scholastics
in A.D.A. and has made timely application for incen-
tive aid payments.
"The independent school district before the an-
nexation was a budget excess district by some $67,-
000. This means it was not eligible for nor will it
receive Foundation Program payments in the 1963-64
school year. The independent school district as en-
larged by the annexation will still be a budget ex-
cess school district by approximately $36,800 when
the costs of the Foundation Programs in the two dis-
tricts existing prior to the annexation are combined
and compared with total Foundation Program receipts
(local fund assignments and State per capita payments)
of the two districts.
-1088-
Hon. J. W. Edgar, page 2 (C-224)
"The former common school district is a Founda-
tion Program district. According to its Fund Appli-
cation for Foundation Program funds, it is eligible
for $30,400 in this 1963-64 year. This eligibility
for $30,400 will be paid within 1963-64. Any incen-
tive aid payments to the resulting independent school
district, if any, would begin in 1964-65 and continue
ordinarily for nine consecutive years.
“As heretofore pointed out, the resulting en-
larged independent school district will not be eligi-
ble for Foundation Program Assistance (see Section 1,
Par. A) in 1964-65, Further, it has applied for an-
nual incentive aid payments and expects same on the
grounds that the difference between the sum which the
new district would realize from Foundation Program
funds (a zero amount) and the sums of the Foundation
Program funds which would have been paid to the dis-
tricts in 1964-65 had there been no annexation (a
rough guess $30,000 plus) is the latter figure.
"Query: Ma,yincentive aid payments be legally
made by this Agency to a resulting independent school
district that is budget excess or budget balance;
that is, where not eligible for Foundation Program
funds as enlarged by annexation or consolidation?t1
Section l.A of Article 2815-4 states as follows:
“A. The amount of Incentive Aid Payments shall
not exceed the difference between the sum of the
Foundation Program Pavments which would have been
paid to the several districts included in the newly
organized district had there been no consolidation,
and the amount of Foundation Program Assistance for
which the new district aualifies." (Emphasis added).
The grant of incentive aid payments made pursuant to
Article 2815-4 is premised on the fact that the resulting con-
solidated district qualifies for Foundation Program Payments
under Articles 2922-11 et seq. If the new consolidated district
is “budget excess” or sbudget balance,” or during the term it be-
comes "budget excess" or "budget balance" then it receives no
Foundation Program Payments and may not receive zany incentive aid
payments. Your first question is therefore answered in the nega-
tive.
-1089-
Hon. J. W. Edgar, page 3 (C-224)
Situation II
"A common school district '(Kempner)operates
a school in its district for 1962-63; thus it has
never become dormant. It does not operate a school
for 1963-64.;it transferred all its scholastics for
1963-64 to an adjoining independent school district
(Lampasas). By an election held under Article 2806,
the common district was consolidated to said inde-
pendent school district in January, 1964. Thus, the
common school district did not operate itself a
school for 1963-64--all scholastics being transferred
out #
"The resulting independent school district (which
is not a budget excess district) has applied for in-
centive aid payments as may acarue as a result of the
consolidation of the districts.
"Query: (a) Where a school district was not
operating a school in 1963-64 and therefore was not
receiving Foundation Program funds at.the time of its
consolidation with an independent school district, is
the resulting consolidated district eligible for in-
centive aid payments under Article 2815-31
@I(b) If (a) is answered in the affirmative:
Should the incentive aid payments be based on the
Foundation Program status of the districts for 1963-64
and computed as though the common school district was
operating a school prior to January, 1964; or be based
on the Foundation Program status of the two districts
for 1962-63 when both operated Foundation Program Aid
schools?
"In this second situation we are inclined to the
opinion that an incentive aid payment is legally war-
ranted, but we would appreciate assistance as to what
year should be used for its computation."
In answer to your Question (a) we advise you that the
resulting school district is eligible for incentive aid payments.
Even though the consolidated district must qualify for Foundation
Program Payments under the answer given in Situation I, all of
the districts need not have necessarily received payments prior
to consolidation. This question is therefore answered in the af-
firmative.
-1090-
Hon. J. W. Edgar, page 4 (C-224)
Article 2815-4 does not cover the situation wherein
one of the districts, now consolidated with another, was not
an operating district the year immediately preceding consolida-
tion. We interpret Section 1.1 to mean that the year immedi-
ately preceding consolidation is the one to which the Texas
Education Agency should look in ascertaining the Foundation Pro-
gram Payments made to a former school district. It follows that
in your Situation II, although the common school district was
not operating the year preceding consolidation (19631, this is
the year that governs the Foundation Program status.
Situation III
"There is at least one county where develop-
ments are contemplated and initiated to annex and/or
consolidate adjoining districts, as time and circum-
stances permit, thereby to reduce the several dis-
tricts in the county to one or two large financially
strong districts.
"Query: Where two or more districts have been
consolidated or annexed to become a resulting inde-
pendent school district which has been determined
eligible for certain incentive aid payments, then
later in the same year or in a subsequent year a sec-
ond consolidation is perfected involving the origi-
nally enlarged district, would legally there be an
obligation to meet two separate series of Incentive
Aid payments as a result of the two consolidations?
"Stated another way and assuming an annual (10
years) incentive aid payments of $10,000 has been
determined for the independent school district re-
sulting from the first consolidation, and an annual
incentive aid payment of $5,000 has been determined
for the independent school district resul ting from
the second consolidation, would the last resulting
independent school district legally be entitled to
receive annually two incentive aid payments until the
ten years in each case expires?"
Section 1 of Article 2815-4 provides as follows:
"Section 1. From the effective date of this Act
independent school districts hereafter created through
consolidation may qualify for Incentive Aid Payments
by the State of Texas; provide~~t~o~r, no school
district mav receive such naym a Deriod of more
than ten (10) vears. Such Incentive Aid Payments shall
-1091-
Hon. J. W. Edgar, page 5 (c-224)
be made only upon application to the Texas Ed.uca-
tion Agency and in compliance with the terms and
co;zoi;ionscontained in this Act.” (Emphasis
.
This section provides that no school district may re-
ceive such payments for a period of more than tentyears. At
the time a district is consolidated the Texas Education Agency
should determine the incentive aid payments to which that par-
ticular district may be entitled by virtue of the provisions of
Article 2815-b. If at a subsequent time that district partipates
in a consolidation with another district, the independent school
district before consolidation ceases to exist. Since incentive
aid payments cannot be made to a non-existent school district,
you are advised that the Texas Education Agency should ascertain
the incentive aid payments to which the resulting independent
school district may be entitled. Under this reasoning any inde-
pendent school district may be entitled to only one series of
incentive aid payments, the period not to exceed ten years from
the date of the last consolidation. The question posed in Situ-
ation III is therefore answered in the negative.
SUMMARY
Under Article 2815-k of Vernon’s Civil Statutes
incentive aid payments may not be made by the Texas
Education Agency to a resulting independent school
district that is budget excess or budget balance, as
the district is ineligible for Foundation Program
Payments.
Where a resulting independent school district Is
comprised in part of a former school district not re-
ceiving Foundation Program Payments at the time of
consolidation, the resulting school district may still
receive incentive aid payments. These payments should
be based on the Foundation Program status of the re-
spective districts participating in the consolidation
for the year immediately preceding consolidation.
A resulting independent school district may be
entitled to only one series of incentive aid payments,
-1092-
Hon. J. W. Edgar, page 6 (C-224)
the period not to exceed ten years from the date
of the last consolidation.
Yours very truly,
WAGGONER CARR
Attorney General n
,
-"Fred D. Ward
Assistant Attorney General
APPROVED:
'OPINION COMMITTEE
'W.'V;~GeEpert, Chairman
Ivan WI1 lams
Jerry Brock
Paul Phy
APPROVED FOR THE ATTORNEY GENERAL
BY: Howard W.,Mays
-1093-