The Texas Education Agency (TEA) proposes amendments to §109.3001 and §109.3003, concerning federal fiscal compliance and reporting. The proposed amendments would modify the existing rules to reflect changes to federal statutes, regulations, non-regulatory guidance, and delegation agreements.

BACKGROUND INFORMATION AND JUSTIFICATION: Section 109.3001, Local Maintenance of Effort, outlines TEA's responsibility to monitor compliance by local educational agencies (LEAs) with Individuals with Disabilities Education Act, Part B (IDEA-B) LEA maintenance of effort (MOE) and Every Student Succeeds Act (ESSA) LEA MOE. The proposed amendment to §109.3001 would update the statutory and regulatory citations and remove the handbooks adopted as Figure: 19 TAC §109.3001(c)(1) and Figure: 19 TAC §109.3001(c)(2). TEA has determined that the handbooks do not need to be included in rule since they do not create new regulations or rules and instead provide guidance on how TEA applies existing federal statutes and regulations to determine LEA compliance.

Section 109.3003, Indirect Cost Rates, outlines TEA's responsibility to calculate and issue indirect cost rates to LEAs and education service centers. The proposed amendment would update both the rule and Figure: 19 TAC §109.3003(d) to reflect revised statutory citations and a new delegation agreement from the United States Department of Education. In addition, Figure: 19 TAC §109.3003(d) would only include information on how organizations would request and apply for an indirect cost rate. Information on how subrecipients use their indirect cost rates would be removed since that information is already outlined in existing federal regulations and nonregulatory guidance.

FISCAL IMPACT: Mike Meyer, deputy commissioner for finance, has determined that for the first five-year period the proposal is in effect there are no additional costs to state or local government, including school districts and open-enrollment charter schools, required to comply with the proposal.

LOCAL EMPLOYMENT IMPACT: The proposal has no effect on local economy; therefore, no local employment impact statement is required under Texas Government Code, §2001.022.

SMALL BUSINESS, MICROBUSINESS, AND RURAL COMMUNITY IMPACT: The proposal has no direct adverse economic impact for small businesses, microbusinesses, or rural communities; therefore, no regulatory flexibility analysis, specified in Texas Government Code, §2006.002, is required.

COST INCREASE TO REGULATED PERSONS: The proposal does not impose a cost on regulated persons, another state agency, a special district, or a local government and, therefore, is not subject to Texas Government Code, §2001.0045.

TAKINGS IMPACT ASSESSMENT: The proposal does not impose a burden on private real property and, therefore, does not constitute a taking under Texas Government Code, §2007.043.

GOVERNMENT GROWTH IMPACT: TEA staff prepared a Government Growth Impact Statement assessment for this proposed rulemaking. During the first five years the proposed rulemaking would be in effect, it would limit an existing regulation by removing requirements and information addressed by federal law and nonregulatory guidance.

The proposed rulemaking would not create or eliminate a government program; would not require the creation of new employee positions or elimination of existing employee positions; would not require an increase or decrease in future legislative appropriations to the agency; would not require an increase or decrease in fees paid to the agency; would not create a new regulation; would not expand or repeal an existing regulation; would not increase or decrease the number of individuals subject to its applicability; and would not positively or adversely affect the state's economy.

PUBLIC BENEFIT AND COST TO PERSONS: Mr. Meyer has determined that for each year of the first five years the proposal is in effect, the public benefit anticipated as a result of enforcing the proposal would be ensuring that rule language is based on current law. There is no anticipated economic cost to persons who are required to comply with the proposal.

DATA AND REPORTING IMPACT: The proposal would have no data or reporting impact.

PRINCIPAL AND CLASSROOM TEACHER PAPERWORK REQUIREMENTS: TEA has determined that the proposal would not require a written report or other paperwork to be completed by a principal or classroom teacher.

PUBLIC COMMENTS: The public comment period on the proposal begins April 2, 2021, and ends May 3, 2021. A request for a public hearing on the proposal submitted under the Administrative Procedure Act must be received by the commissioner of education not more than 14 calendar days after notice of the proposal has been published in the Texas Register on April 2, 2021. A form for submitting public comments is available on the TEA website at https://tea.texas.gov/About_TEA/Laws_and_Rules/Commissioner_Rules_(TAC)/Proposed_Commissioner_of_Education_Rules/.

STATUTORY AUTHORITY. The amendments are proposed under Texas Education Code (TEC), §7.021(b)(1), which requires the Texas Education Agency (TEA) to administer and monitor compliance with education programs required by federal or state law, including federal funding; and TEC, §7.031(a), which establishes that TEA may seek, accept, and distribute grants awarded by the federal government, subject to the limitations or conditions imposed by the terms of the grants or by other law.

CROSS REFERENCE TO STATUTE. The amendments implement Texas Education Code, §7.021(b)(1) and §7.031(a).