Can the State Board of Education deduct a school district's debt to the state schools from its available school fund?

Plain-English summary

A school district whose student attends one of the two state schools, the Texas School for the Blind and Visually Impaired or the Texas School for the Deaf, has to share the cost of educating that student. Education Code section 21.507 set up the mechanism: the commissioner of education works out the district's share and deducts it from the district's foundation school program payments. In 1993 the State Board of Education adopted a new rule (19 T.A.C. section 89.239(c)(3)) saying that if the agency could not make the required deduction from a district's foundation school program payments, it would instead deduct from the district's available school fund payments. A district attorney asked the Attorney General whether the board had authority to enact that rule.

The Attorney General concluded it did not. An agency can adopt only rules authorized by and consistent with its governing statute. Section 21.507 expressly authorized deductions from foundation school program payments and said nothing about the available school fund, and the office would not imply a power to reach that fund. The office stressed the difference between the two funds: the foundation school program is a creature of statute (Education Code chapter 16), while the available school fund is a creature of the Texas Constitution (article VII, section 5(a)). Had the legislature meant to let the board order mandatory deductions from the available school fund, the office said, it would have said so expressly. So the rule was inconsistent with section 21.507 and imposed burdens on districts beyond what the statute allowed, and it exceeded the board's rule-making authority under section 21.507(f). Because the rule failed on statutory-authority grounds, the office expressly did not reach the separate question of whether deducting from the available school fund would violate article VII, section 5(a) of the constitution.

Currency note

This opinion was issued in 1994. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

The opinion itself flagged that the 73rd Legislature had voted to repeal many Education Code chapters, including chapters 15 and 21, effective September 1, 1995. The statutory scheme it construed (the old section 21.507 and the chapter 15/16 fund structure) was reorganized by later Education Code recodifications, so the specific section numbers here no longer track current law. Read this page for how the office analyzed an agency's rule-making limits, not for the current rules on state-school cost sharing.

What the opinion meant for those who asked

For the State Board of Education and the Texas Education Agency: The opinion held that section 21.507(f) did not authorize the board to adopt a rule deducting a district's state-school debt from available school fund payments. The office acknowledged the agency's practical difficulty in collecting from districts that receive no foundation school program payments, but said that concern could not expand the board's statutory authority.

For school districts: The opinion concluded the rule imposed a burden beyond the statute. Section 21.507 authorized the commissioner to deduct a district's share only from foundation school program payments; the office read the statute as not reaching the district's available school fund payments.

For the district attorney who asked, on the constitutional question: The office expressly declined to decide whether deducting from the available school fund would violate article VII, section 5(a) of the Texas Constitution. Because it resolved the matter on statutory-authority grounds, it did not reach that constitutional issue, and it also did not address whether some other statute might authorize the rule.

Common questions

Can the State Board of Education take a district's debt to the state schools out of the available school fund?
Under this opinion, no. The office concluded that section 21.507 of the Education Code authorized deductions only from foundation school program payments, and that the board's rule reaching the available school fund exceeded its authority under section 21.507(f).

Why did the source of the fund matter?
The opinion drew a line between the two funds. The foundation school program is created by statute (chapter 16), while the available school fund is created by the Texas Constitution (article VII, section 5(a)). The office reasoned that if the legislature had wanted to let the board order mandatory deductions from a constitutionally created fund, it would have said so in plain terms rather than leaving it to be implied.

Did the Attorney General decide the rule was unconstitutional?
No. The office expressly declined to reach whether the deduction would violate article VII, section 5(a). It resolved the question on statutory grounds (the rule exceeded the board's authority), so it did not need to address the constitutional argument the requestor raised.

What courts did the opinion rely on?
It cited two Texas court of appeals decisions for the general rule that an agency can adopt only rules consistent with its statute and may not add burdens the statute does not impose: Texas Fire & Casualty Co. v. Harris County Bail Bond Board (Houston [14th District], 1984) and Hollywood Calling v. Public Utility Commission (Austin, 1991).

Background and statutory framework

Education Code section 21.507 required a school district responsible for a student enrolled at the Texas School for the Blind and Visually Impaired or the Texas School for the Deaf to share the cost of that student's education. Subsection (d) directed the commissioner of education, after determining a district's share, to deduct that amount from the foundation school program funds payable to the district, in proportion to the entitlement being paid at the time, and to remit the deducted amount to the appropriate state school. Subsection (f) authorized the State Board of Education to adopt rules to implement the section. Section 11.063(b), as amended in 1993, set out the funding sources for the state schools.

Acting under that rule-making authority, the board had adopted 19 T.A.C. section 89.239(c). Subparts (1) and (2) handled the information-reporting timeline and provided that the agency would make deductions from a district's regularly scheduled foundation school program payments. The 1993 addition, subpart (3), went further: it directed that when the agency could not make the required deduction from foundation school program payments, it would deduct from the district's available school fund payments. Although the rule's second sentence appeared to give districts a choice between paying directly or authorizing the deduction, the office read it together with the first sentence as making the deduction effectively mandatory.

The office applied the settled administrative-law rule that an agency can adopt only those rules authorized by and consistent with its statute, and may not impose burdens, conditions, or restrictions beyond the statute (Texas Fire & Cas. Co. v. Harris County Bail Bond Bd., 684 S.W.2d 177 (Tex. App.-Houston [14th Dist.] 1984, writ ref'd n.r.e.); Hollywood Calling v. Public Util. Comm'n of Texas, 805 S.W.2d 618 (Tex. App.-Austin 1991, no writ)). Section 21.507 expressly reached only foundation school program payments. The office contrasted the statutory foundation school program (Education Code chapter 16) with the constitutionally established available school fund (Tex. Const. art. VII, § 5(a); Education Code chapter 15) and declined to imply a power to deduct from the constitutional fund. It pointed as well to Education Code section 15.12(a) and section 20.48 on the appropriation and expenditure of school funds. Concluding the rule was both inconsistent with section 21.507 and an excess burden on districts, the office held that 19 T.A.C. section 89.239(c)(3) exceeded the board's authority under section 21.507(f). It did not reach the constitutional question and did not address whether any other statute authorized the rule.

Citations

Constitutional and statutory provisions discussed:

• Tex. Const. art. VII, § 5(a) (permanent school fund and available school fund)
• Education Code § 21.507 (cost sharing for students at the state schools; subsections (a), (d), (f))
• Education Code § 11.063(b) (funding sources for the state schools; as amended by Acts 1993, 73d Leg., ch. 383)
• Education Code § 15.12(a) (appropriation of available public school funds)
• Education Code § 20.48 (expenditures by public free schools)
• Education Code ch. 15 (permanent and available school fund administration); ch. 16 (foundation school program)
• 19 T.A.C. § 89.239(c) (subparts (1), (2), and the challenged subpart (3))

Cases discussed:

• Texas Fire & Cas. Co. v. Harris County Bail Bond Bd., 684 S.W.2d 177 (Tex. App.-Houston [14th Dist.] 1984, writ ref'd n.r.e.)
• Hollywood Calling v. Public Util. Comm'n of Texas, 805 S.W.2d 618 (Tex. App.-Austin 1991, no writ)

Register and legislation referenced: Texas Education Agency rule adoptions at 18 Tex. Reg. 1996 (March 30, 1993) and 18 Tex. Reg. 3094 (May 14, 1993); Acts 1993, 73d Leg., ch. 383 (amending § 11.063(b)); Acts 1993, 73d Leg., ch. 347, § 8.33(2) (repealing Education Code chapters including 15 and 21, effective September 1, 1995).

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/dan-morales/dm-0281
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1994/dm0281.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain — the linked PDF is authoritative.

Office of the Attorney General
State of Texas

DAN MORALES
ATTORNEY GENERAL

January 10, 1994

Honorable Barry L. Macha
Criminal District Attorney
900 Seventh Street
Wichita Falls, Texas 76301-2482

Opinion No. DM-281

Re: Whether the State Board of Education is authorized to enact a regulation providing for the deduction of a school district's debt to the Texas School for the Blind and Visually Impaired and the Texas School for the Deaf from available school fund payments to the school district (RQ-585)

Dear Mr. Macha:

You ask whether the State Board of Education (the "board") is authorized to enact a regulation providing for the deduction of a school district's debt to the Texas School for the Blind and Visually Impaired and the Texas School for the Deaf (the "state schools") from available school fund payments to the school district. You state that in May 1993, the board enacted the following regulation, to be codified as section 89.239(c)(3) of title 19 of the Texas Administrative Code:

Beginning with the 1993-1994 school year, if the agency cannot make the deductions required by this section from a district's foundation school program payments, the deductions shall be made from the available school fund payments to the district. A district shall indicate whether it will make a direct payment or authorize the [Texas Education Agency] to deduct the appropriate amount from the available school fund payment.

See Texas Education Agency, 18 Tex. Reg. 3094 (May 14, 1993). Although the second sentence of the regulation suggests that a district will be given the choice between making a direct payment or authorizing the Texas Education Agency ("TEA") to deduct the appropriate amount from the district's available school fund payment, we believe that when the second sentence is read in conjunction with the first sentence of the regulation,[Footnote 1] it is clear that the deductions from the available school fund payments are mandatory rather than voluntary.[Footnote 2]

You believe that this regulation violates article VII, section 5(a) of the Texas Constitution which creates the permanent school fund and the available school fund, and provides that the

available school fund shall be applied annually to the support of the public free schools. Except as provided by this section, no law shall ever be enacted appropriating any part of the permanent or available school fund to any other purpose whatever. . . . and the available school fund herein provided shall be distributed to the several counties according to their scholastic population and applied in such manner as may be provided by law.

See also Educ. Code § 15.12(a) ("All available public school funds of Texas shall be appropriated in each county for the education of its children."), 20.48 (governing expenditures by public free schools).[Footnote 3] Because we conclude that the new regulation exceeds the board's statutory rule-making authority, we do not reach the question whether the deduction of funds owed to the state schools from available school fund payments runs afoul of article VII, section 5(a). The reasons for our conclusion follow.

Generally, an administrative agency can adopt only those rules that are authorized by and consistent with its statutory authority. Texas Fire & Cas. Co. v. Harris County Bail Bond Bd., 684 S.W.2d 177, 178 (Tex. App.-Houston [14th Dist.] 1984, writ ref'd n.r.e.). An administrative agency may not adopt rules which impose additional burdens, conditions, or restrictions in excess of or inconsistent with those statutory provisions. Id.; Hollywood Calling v. Public Util. Comm'n of Texas, 805 S.W.2d 618, 620 (Tex. App.-Austin 1991, no writ).

Section 21.507 of the Education Code requires that "[f]or each student enrolled in [the state schools], the school district that is responsible for providing appropriate special education services to the student shall share the cost of the student's education as provided by this section." Educ. Code § 21.507(a); see also id. § 11.063(b) (as amended by Acts 1993, 73d Leg., ch. 383 (eff. Sept. 1, 1993)) (setting forth funding sources for the state schools). Subsection (d) of section 21.507 provides as follows:

Each school district and state institution shall provide to the commissioner of education the necessary information to determine the district's share under this section. . . . After determining the amount of a district's share for all students for which the district is responsible, the commissioner shall deduct that amount from the payments of foundation school funds payable to the district. Each deduction shall be in the same percentage of the total amount of the district's share as the percentage of the total foundation school fund entitlement being paid to the district at the time of the deduction, except that the amount of any deduction may be modified to make necessary adjustments or to correct errors. The commissioner shall provide for remitting the amount deducted to the appropriate school at the same time at which the remaining funds are distributed to the school district. [Emphasis added.]

Subsection (f) gives the board the authority to adopt rules to implement this section.

Pursuant to this rule-making authority, the board has adopted section 89.239(c) of title 19 of the Texas Administrative Code. Subparts (1) and (2) predate subpart (3). Subpart (1) requires school districts and the state schools to submit information to the TEA necessary to determine the school districts' share of costs within thirty days of a student's enrollment at one of the state schools. 19 T.A.C. § 89.239(c)(1) (as amended by 18 Tex. Reg. 3094). Subpart (2) provides that the "TEA will make deductions from the school district's regularly scheduled foundation school program fund payments" and will make payments to the state schools according to an established schedule. Id. § 89.239(c)(2) (emphasis added).

Unlike preexisting subpart (2) which authorizes the TEA to deduct funds from foundation school fund payments, new subpart (3) authorizes the TEA to deduct funds from available school fund payments. Apparently, the board relies solely upon subsection (f) of section 21.507 of the Education Code as the source of its rule-making authority. See Texas Education Agency, 18 Tex. Reg. 1996, 1997 (March 30, 1993); id. at 3094 (May 14, 1993).[Footnote 4] Section 21.507 of the Education Code expressly authorizes the commissioner of education to deduct funds from foundation school fund payments. It makes no mention of deductions from available school fund payments, and we do not believe that the authority to make mandatory deductions from payments from that fund may be implied from the statute. Whereas the foundation school program is a creature of statute, see Educ. Code ch. 16 (establishing the foundation school program), the available school fund is a creature of the constitution, see Tex. Const. art. VII, § 5(a); see also Educ. Code ch. 15 (providing for the administration of the permanent school fund and the available school fund). Given this fact, we believe that if the legislature had intended to authorize the board to provide for mandatory deductions from available school fund payments, it would have provided so expressly. For this reason, we conclude that the new regulation is inconsistent with section 21.507 of the Education Code. See Hollywood Calling, 805 S.W.2d at 620; Texas Fire & Cas. Co., 684 S.W.2d at 178.

Furthermore, we believe that the regulation imposes additional burdens on school districts in excess of those imposed by that statutory provision. See Hollywood Calling, 805 S.W.2d at 620; Texas Fire & Cas. Co., 684 S.W.2d at 178. While section 21.507 of the Education Code provides for deductions from schools' foundation school fund payments, the regulation imposes mandatory deductions from an additional funding source, the available school fund. Although we appreciate the difficulty TEA may have collecting funds for the state schools from school districts which do not receive foundation school fund payments and acknowledge the importance of collecting these funds, we can only conclude that section 89.239(c)(3) of title 19 of the Texas Administrative Code exceeds the board's rule-making authority under section 21.507(f) of the Education Code.[Footnote 5]

SUMMARY

The State Board of Education is not authorized by section 21.507(f) of the Education Code to enact a regulation providing for the mandatory deduction of a school district's debt to the Texas School for the Blind and Visually Impaired and the Texas School for the Deaf from available school fund payments to the school district.

DAN MORALES
Attorney General of Texas

Footnote 1: 19 T.A.C. § 89.239(c)(3) ("deductions shall be made from the available school fund payments to the district")(emphasis added).

Footnote 2: We believe that the deductions are, in essence, mandatory, because the regulation would authorize the TEA to deduct the funds from a school district's available school fund payment if the school district fails to make an election or elects to make a direct payment and then fails to do so. The election set forth in the second sentence of the regulation is illusory.

Footnote 3: The 73rd Legislature adopted legislation that repeals many chapters of the Education Code, including chapters 15 and 21, effective September 1, 1995. See Acts 1993, 73d Leg., ch. 347, § 8.33(2).

Footnote 4: The amendment is adopted under the Texas Education Code, § 21.507(f), which authorizes the State Board of Education (SBOE) to adopt rules as necessary to implement statutory requirements concerning support of students referred to the Texas School for the Blind and Visually Impaired or the Texas School for the Deaf. Texas Education Agency, 18 Tex. Reg. 3094 (May 14, 1993).

Footnote 5: We do not address whether the regulation is authorized by some other statutory source of rule-making authority.