EA KEY GENERAL 

EXAS 

AUSTIN ~~.TJZXAES 

March 9, 1964 

Hon. J. W. Edaar 

Commissioner of Educati,on 

Texas Education Agency 

Austin, Texas 

Oninion No. C-224 

* 

Re: Incentive aid payments to 

resulting consolidated independent 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 consolidati,on. The original statute was codified as Article 2815-3 

of Vernon's Civil Statutes; however, Article 2815-4, a 1963 enactment, is the most recent and will be cited herein as the 

incentive aid payment statute. Article 2815-4 represents a reenactment of Article 2815-3 except for the change in Section 1B 

to reduce the average daily attendance requirement from one thousand 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 (Bancroft 7 to an 

adjoining independent school district (West Orange) 

under Article 2922a. The resulting enlarged district (West Orange) is an independent school district (Art. 2922b) has in excess of 1000 scholastics 

in A.D.A. and has made timely application for incentive aid payments. 

"The independent school district before the annexation 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 enlarged by the annexation will still be a budget excess school district by approximately $36,800 when 

the costs of the Foundation Programs in the two districts 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 Foundation Program district. According to its Fund Application 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 incentive 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 enlarged independent school district will not be eligible for Foundation Program Assistance (see Section 1, 

Par. A) in 1964-65, Further, it has applied for annual 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 districts in 1964-65 had there been no annexation (a 

rough guess $30,000 plus) is the latter figure. 

"Query: Ma,y incentive 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 consolidated district qualifies for Foundation Program Payments 

under Articles 2922-11 

s 

et seq. If the new consolidated district 

is “budget excess” or budget balance,” or during the term it becomes "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 negative. 

-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 independent 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 incentive 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 incentive 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 warranted, 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 affirmative. 

-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 consolidation. We interpret Section 1.1 to mean that the year immediately preceding consolidation is the one to which the Texas 

Education Agency should look in ascertaining the Foundation Program 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 developments are contemplated and initiated to annex and/or 

consolidate adjoining districts, as time and circumstances permit, thereby to reduce the several districts 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 independent school district which has been determined 

eligible for certain incentive aid payments, then 

later in the same year or in a subsequent year a second consolidation is perfected involving the originally 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 resulting 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 ma v 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.ucation Agency and in compliance with the terms and 

co;zoi;ions contained in this Act.” (Emphasis 

. 

This section provides that no school district may receive such payments for a period of more than tent years. At 

the time a district is consolidated the Texas Education Agency 

should determine the incentive aid payments to which that particular 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 independent 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 Situation 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 receiving 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 respective 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-