Texas House Bill HB3646 Latest Draft

                            H.B. No. 3646


 AN ACT
 relating to public school finance and programs.
 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 SECTION 1. Section 1.001(b), Education Code, is amended to
 read as follows:
 (b) Except as provided by Chapter 18, Chapter 19, Subchapter
 A of[,] Chapter 29, [or] Subchapter E of[,] Chapter 30, or Chapter
 30A, this code does not apply to students, facilities, or programs
 under the jurisdiction of the Department of Aging and Disability
 Services, the Department of State Health Services, the Health and
 Human Services Commission, the Texas Youth Commission, the Texas
 Department of Criminal Justice, a Job Corps program operated by or
 under contract with the United States Department of Labor, or any
 juvenile probation agency.
 SECTION 2. Section 7.024(a), Education Code, is amended to
 read as follows:
 (a) The investment capital fund consists of money
 appropriated for purposes of [transferred to] the fund [as provided
 by Section 42.152(l)]. The agency shall administer the fund. The
 purposes of this fund are to assist eligible public schools to
 implement practices and procedures consistent with deregulation
 and school restructuring in order to improve student achievement
 and to help schools identify and train parents and community
 leaders who will hold the school and the school district
 accountable for achieving high academic standards.
 SECTION 3. Section 8.051(d), Education Code, is amended to
 read as follows:
 (d) Each regional education service center shall maintain
 core services for purchase by school districts and campuses. The
 core services are:
 (1) training and assistance in:
 (A) teaching each subject area assessed under
 Section 39.023; and
 (B)  providing instruction in personal financial
 literacy as required under Section 28.0021;
 (2) training and assistance in providing each program
 that qualifies for a funding allotment under Section 42.151,
 42.152, 42.153, or 42.156;
 (3) assistance specifically designed for a school
 district rated academically unacceptable under Section 39.072(a)
 or a campus whose performance is considered unacceptable based on
 the indicators adopted under Section 39.051;
 (4) training and assistance to teachers,
 administrators, members of district boards of trustees, and members
 of site-based decision-making committees;
 (5) assistance specifically designed for a school
 district that is considered out of compliance with state or federal
 special education requirements, based on the agency's most recent
 compliance review of the district's special education programs; and
 (6) assistance in complying with state laws and rules.
 SECTION 4. Section 11.168, Education Code, is amended to
 read as follows:
 Sec. 11.168. USE OF DISTRICT RESOURCES PROHIBITED FOR
 CERTAIN PURPOSES. Except as provided by Section 45.109 (a-1) and
 (a-2), the [The] board of trustees of a school district may not
 enter into an agreement authorizing the use of school district
 employees, property, or resources for the provision of materials or
 labor for the design, construction, or renovation of improvements
 to real property not owned or leased by the district.
 SECTION 5. Section 12.106, Education Code, is amended by
 amending Subsection (a) and adding Subsections (a-1) and (a-2) to
 read as follows:
 (a) A charter holder is entitled to receive for the
 open-enrollment charter school funding under Chapter 42 equal to
 the greater of:
 (1)  the amount of funding per student in weighted
 average daily attendance, excluding enrichment funding under
 Sections 42.302(a-1)(2) and (3), as they existed on January 1,
 2009, that would have been received for the school during the
 2009-2010 school year under Chapter 42 as it existed on January 1,
 2009, and an additional amount of $120 for each student in weighted
 average daily attendance; or
 (2)  the amount of funding per student in weighted
 average daily attendance, excluding enrichment funding under
 Section 42.302(a), to which the charter holder would be entitled
 for the school under Chapter 42 [as] if the school were a school
 district without a tier one local share for purposes of Section
 42.253 and without any local revenue [("LR")] for purposes of
 Section 42.2516 [42.302].
 (a-1) In determining funding for an open-enrollment charter
 school under Subsection (a), adjustments under Sections 42.102,
 42.103, 42.104, and 42.105 [and the district enrichment tax rate
 ("DTR") under Section 42.302] are based on the average adjustment
 [and average district enrichment tax rate] for the state.
 (a-2)  In addition to the funding provided by Subsection (a),
 a charter holder is entitled to receive for the open-enrollment
 charter school enrichment funding under Section 42.302 based on the
 state average tax effort.
 SECTION 6. Subchapter D, Chapter 12, Education Code, is
 amended by adding Section 12.1331 to read as follows:
 Sec. 12.1331.  WAGE INCREASE FOR CERTAIN PROFESSIONAL STAFF.
 (a) This section applies to a charter holder that on January 1,
 2009, operated an open-enrollment charter school.
 (b)  Beginning with the 2009-2010 school year, each charter
 holder shall increase the monthly salary of each classroom teacher,
 full-time speech pathologist, full-time librarian, full-time
 counselor, and full-time school nurse employed by the charter
 holder at an open-enrollment charter school by the greater of:
 (1) $80; or
 (2)  the maximum uniform amount that, when combined
 with any resulting increases in the amount of contributions made by
 the charter holder for social security coverage for the specified
 employees or by the charter holder on behalf of the specified
 employees under Section 825.405, Government Code, may be provided
 using an amount equal to the product of $60 multiplied by the number
 of students in weighted average daily attendance in the school
 during the 2009-2010 school year.
 (c)  A payment under Subsection (b) is in addition to wages
 the charter holder would otherwise pay the employee during the
 school year.
 SECTION 7. Section 19.007, Education Code, is amended by
 adding Subsection (g) to read as follows:
 (g)  In addition to other amounts received by the district
 under this section, the district is entitled to state aid in the
 amount necessary to fund the salary increases required by Section
 19.009(d-2).
 SECTION 8. Section 19.009, Education Code, is amended by
 adding Subsections (d-2) and (d-3) to read as follows:
 (d-2)  Beginning with the 2009-2010 school year, the
 district shall increase the monthly salary of each classroom
 teacher, full-time speech pathologist, full-time librarian,
 full-time counselor certified under Subchapter B, Chapter 21, and
 full-time school nurse employed by the district by the greater of:
 (1) $80; or
 (2)  the maximum uniform amount that, when combined
 with any resulting increases in the amount of contributions made by
 the district for social security coverage for the specified
 employees or by the district on behalf of the specified employees
 under Section 825.405, Government Code, may be provided using an
 amount equal to the product of $60 multiplied by the number of
 students in weighted average daily attendance in the district
 during the 2009-2010 school year.
 (d-3)  A payment under Subsection (d-2) is in addition to
 salary the district would otherwise pay the employees during the
 school year.
 SECTION 9. Section 21.402, Education Code, is amended by
 amending Subsections (a), (d), and (g) and adding Subsections
 (c-1), (c-2), and (c-3) to read as follows:
 (a) Except as provided by Subsection (d), (e), or (f), a
 school district must pay each classroom teacher, full-time
 librarian, full-time counselor certified under Subchapter B, or
 full-time school nurse not less than the minimum monthly salary,
 based on the employee's level of experience in addition to other
 factors, as determined by commissioner rule, determined by the
 following formula:
 MS = SF x FS
 where:
 "MS" is the minimum monthly salary;
 "SF" is the applicable salary factor specified by Subsection
 (c); and
 "FS" is the amount, as determined by the commissioner under
 Subsection (b), of state and local funds per weighted student,
 including funds provided under Section 42.2516 [42.2516(b)(1)(B),
 but not funds provided under Section 42.2516(b)(1)(A), (b)(1)(C),
 (b)(2), or (b)(3)], available to a district eligible to receive
 state assistance under Section 42.302 with a maintenance and
 operations tax rate per $100 of taxable value equal to the product
 of the state compression percentage, as determined under Section
 42.2516, multiplied by $1.50, except that the amount of state and
 local funds per weighted student does not include the amount
 attributable to the increase in the guaranteed level made by
 Chapter 1187, Acts of the 77th Legislature, Regular Session, 2001.
 (c-1)  Notwithstanding Subsection (a), for the 2009-2010 and
 2010-2011 school years, each school district shall increase the
 monthly salary of each classroom teacher, full-time speech
 pathologist, full-time librarian, full-time counselor certified
 under Subchapter B, and full-time school nurse by the greater of:
 (1) $80; or
 (2)  the maximum uniform amount that, when combined
 with any resulting increases in the amount of contributions made by
 the district for social security coverage for the specified
 employees or by the district on behalf of the specified employees
 under Section 825.405, Government Code, may be provided using an
 amount equal to the product of $60 multiplied by the number of
 students in weighted average daily attendance in the school during
 the 2009-2010 school year.
 (c-2)  An increase in salary under Subsection (c-1) does not
 include:
 (1)  any amount an employee would have received for the
 2009-2010 or 2010-2011 school year, as applicable, under the
 district's salary schedule for the 2008-2009 school year, if that
 schedule had been in effect for the 2009-2010 or 2010-2011 school
 year, including any local supplement and any money representing a
 career ladder supplement the employee would have received in the
 2009-2010 or 2010-2011 school year; or
 (2)  any part of the salary to which an employee is
 entitled under Subsection (a).
 (c-3)  Subsections (c-1) and (c-2) and this subsection
 expire September 1, 2011.
 (d) A classroom teacher, full-time speech pathologist,
 full-time librarian, full-time counselor certified under
 Subchapter B, or full-time school nurse employed by a school
 district in the 2010-2011 [2006-2007] school year is, as long as the
 employee is employed by the same district, entitled to a salary that
 is at least equal to the salary the employee received for the
 2010-2011 [2006-2007] school year.
 (g) The commissioner may adopt rules to govern the
 application of this section, including rules that:
 (1) require the payment of a minimum salary under this
 section to a person employed in more than one capacity for which a
 minimum salary is provided and whose combined employment in those
 capacities constitutes full-time employment; and
 (2) specify the credentials a person must hold to be
 considered a speech pathologist or school nurse under this section.
 SECTION 10. Section 21.415(a), Education Code, is amended
 to read as follows:
 (a) A school district shall provide in employment contracts
 that qualifying employees may receive an incentive payment under an
 awards program established under Subchapter [N or] O if the
 district participates in the program.
 SECTION 11. Sections 21.703(a) and (d), Education Code, are
 amended to read as follows:
 (a) Each state fiscal year, the commissioner shall deposit
 an amount determined by the General Appropriations Act [the sum of
 $1,000 multiplied by the number of classroom teachers in this
 state] to the credit of the educator excellence fund in the general
 revenue fund. Each state fiscal year, the agency shall use[:
 [(1)     not more than $100 million of the funds in the
 educator excellence fund to provide grant awards under the awards
 for student achievement program established under Subchapter N; and
 [(2) any remaining] funds in the educator excellence
 fund to provide a qualifying school district a grant in an amount
 determined by:
 (1) [(A)] dividing the amount of [remaining] money
 available for distribution in the educator excellence fund by the
 total number of students in average daily attendance in qualifying
 districts for that fiscal year; and
 (2) [(B)] multiplying the amount determined under
 Subdivision (1) [Paragraph (A)] by the number of students in
 average daily attendance in the district.
 (d) Notwithstanding Subsection (a) [or (b)], the agency may
 use funds in the educator excellence fund as necessary to conduct or
 contract with another entity to conduct the evaluation required
 under Section 21.706. This subsection expires June 1, 2011.
 SECTION 12. Section 21.704, Education Code, is amended by
 adding Subsection (c-1) to read as follows:
 (c-1)  A local awards plan must provide for teachers and
 principals eligible to receive awards under the plan to be notified
 of the specific criteria and any formulas on which the awards will
 be based before the beginning of the period on which the awards will
 be based.
 SECTION 13. Section 21.705, Education Code, is amended to
 read as follows:
 Sec. 21.705. AWARD PAYMENTS. A school district must use at
 least 60 percent of grant funds awarded to the district under this
 subchapter to directly award classroom teachers and principals who
 effectively improve student achievement as determined by
 meaningful, objective measures. The remaining funds must be used
 only to:
 (1) provide teacher induction and mentoring support,
 including stipends to effective mentors or teacher coaches;
 (2) provide stipends to classroom teachers who are
 certified in a subject that is designated by the commissioner as
 commonly experiencing a critical shortage of teachers;
 (3) provide stipends to classroom teachers who are
 certified under Subchapter B in the main subject area in which they
 teach;
 (4) provide stipends to recruit and retain classroom
 teachers and principals with proven records of success for
 improving student performance who are assigned to campuses at which
 the district has experienced difficulty assigning or retaining
 teachers;
 (5) [provide stipends to classroom teachers who hold
 postgraduate degrees;
 [(6)     provide awards to principals who effectively
 increase student performance as determined by objective measures;
 [(7)] provide awards to other campus employees who
 demonstrate excellence; [or]
 (6) [(8)] implement the components of a Teacher
 Advancement Program (TAP), including:
 (A) an instructionally focused accountability
 system; and
 (B) the adjustment of teaching schedules to
 permit ongoing applied professional growth; or
 (7)  provide funding for previously developed
 incentive programs.
 SECTION 14. Section 21.706(a), Education Code, is amended
 to read as follows:
 (a) Using funds from the educator excellence fund created
 under Section 21.703, the agency shall conduct or contract with
 another entity to conduct a comprehensive evaluation of the [awards
 for student achievement program established under Subchapter N and
 the educator excellence awards] program [established under this
 subchapter]. The evaluation must include:
 (1) a descriptive analysis of the design and
 implementation of the [awards for student achievement program and
 the educator excellence awards] program at participating campuses
 or school districts, including detailed descriptions of the models
 and approaches used by the campuses or districts in distributing
 incentive awards to classroom teachers;
 (2) detailed information regarding the distribution
 of incentive awards to classroom teachers under the [awards for
 student achievement program and the educator excellence awards]
 program, including the measurements used by the campuses or
 districts in determining the amounts of incentive awards to
 distribute to classroom teachers;
 (3) a comprehensive, quantitative analysis of the
 impact of the [awards for student achievement program and the
 educator excellence awards] program at participating campuses or
 districts, including the impact of the various incentive award
 distribution models used by the campuses or districts on key
 outcomes in the program [programs]; and
 (4) a summary of the approaches used by participating
 campuses or districts in distributing grant funds that are not
 specifically designated for distribution as incentive awards for
 classroom teachers and an assessment of whether those funds are
 used effectively by the participating campuses or districts.
 SECTION 15. Section 28.009, Education Code, is amended by
 adding Subsection (a-2) to read as follows:
 (a-2)  A school district is not required to pay a student's
 tuition or other associated costs for taking a course under this
 section. This subsection expires September 1, 2011.
 SECTION 16. Subchapter A, Chapter 29, Education Code, is
 amended by adding Section 29.018 to read as follows:
 Sec. 29.018.  SPECIAL EDUCATION GRANT. (a) From funds
 appropriated for the purposes of this section, federal funds, or
 any other funds available, the commissioner shall make grants
 available to school districts to assist districts in covering the
 cost of educating students with disabilities.
 (b)  A school district is eligible to apply for a grant under
 this section if:
 (1)  the district does not receive sufficient funds,
 including state funds provided under Section 42.151 and federal
 funds, for a student with disabilities to pay for the special
 education services provided to the student; or
 (2)  the district does not receive sufficient funds,
 including state funds provided under Section 42.151 and federal
 funds, for all students with disabilities in the district to pay for
 the special education services provided to the students.
 (c)  A school district that applies for a grant under this
 section must provide the commissioner with a report comparing the
 state and federal funds received by the district for students with
 disabilities and the expenses incurred by the district in providing
 special education services to students with disabilities.
 (d)  Expenses that may be included by a school district in
 applying for a grant under this section include the cost of training
 personnel to provide special education services to a student with
 disabilities.
 (e)  A school district that receives a grant under this
 section must educate students with disabilities in the least
 restrictive environment that is appropriate to meet the student's
 educational needs.
 (f)  The commissioner shall adopt rules as necessary to
 administer this section.
 SECTION 17. Section 29.082, Education Code, is amended by
 adding Subsection (h) to read as follows:
 (h)  The commissioner shall give priority to applications
 for extended year programs to districts with high concentrations of
 educationally disadvantaged students.
 SECTION 18. Section 29.0822, Education Code, is amended by
 amending Subsections (a), (c), and (d) and adding Subsection (e) to
 read as follows:
 (a) Notwithstanding Section 25.081 or 25.082, a school
 district may apply to the commissioner to provide a flexible school
 day program for students [in grades nine through 12] who:
 (1) have dropped out of school or are at risk of
 dropping out of school as defined by Section 29.081; [or]
 (2) attend a campus that is implementing an innovative
 redesign of the campus or an early college high school under a plan
 approved by the commissioner; or
 (3)  as a result of attendance requirements under
 Section 25.092, will be denied credit for one or more classes in
 which the students have been enrolled.
 (c) Except in the case of a course designed for a student
 described by Subsection (a)(3), a [A] course offered in a program
 under this section must provide for at least the same number of
 instructional hours as required for a course offered in a program
 that meets the required minimum number of instructional days under
 Section 25.081 and the required length of school day under Section
 25.082.
 (d) The commissioner may adopt rules for the administration
 of this section, including rules establishing application
 requirements. The commissioner shall calculate average daily
 attendance for students served under this section. The
 commissioner shall allow accumulations of hours of instruction for
 students whose schedule would not otherwise allow full state
 funding. Funding under this subsection shall be determined based
 on the number of instructional days in the school district calendar
 and a seven-hour school day, but attendance may be cumulated over a
 school year, including any summer or vacation session. The
 attendance of students who accumulate less than the number of
 attendance hours required under this subsection shall be
 proportionately reduced for funding purposes. The commissioner
 may:
 (1) set maximum funding amounts for an individual
 course under this section; and
 (2)  limit funding for the attendance of a student
 described by Subsection (a)(3) in a course under this section to
 funding only for the attendance necessary for the student to earn
 class credit that, as a result of attendance requirements under
 Section 25.092, the student would not otherwise be able to receive
 without retaking the class.
 (e)  A student described by Subsection (a)(3) may enroll in a
 course in a program under this section offered during the school
 year or during the period in which school is recessed for the summer
 to enable the student to earn class credit that, as a result of
 attendance requirements under Section 25.092, the student would not
 otherwise be able to receive without retaking the class.
 SECTION 19. Section 29.085, Education Code, is amended by
 adding Subsection (e) to read as follows:
 (e)  From funds appropriated for the purpose, the
 commissioner shall distribute funds for programs under this
 section. In distributing those funds, the commissioner shall give
 preference to school districts that received funds for a program
 under this section for the preceding school year and then to the
 districts that have the highest concentration of students who are
 pregnant or who are parents. To receive funds for a program under
 this section, a school district must apply to the commissioner. A
 program established under this section is required only in school
 districts in which the program is financed by funds distributed
 under this subsection and any other funds available for the
 program.
 SECTION 20. Section 29.097(g), Education Code, is amended
 to read as follows:
 (g) For purposes of Subsection (f)(2), a school district is
 encouraged to use funds allocated under Section 42.160
 [42.2516(b)(3)].
 SECTION 21. Section 29.098(h), Education Code, is amended
 to read as follows:
 (h) For purposes of Subsection (g)(2), a school district is
 encouraged to use funds allocated under Section 42.160
 [42.2516(b)(3)].
 SECTION 22. Section 29.190, Education Code, is amended by
 amending Subsections (a) and (c) and adding Subsection (e) to read
 as follows:
 (a) A student is entitled to a subsidy under this section
 if:
 (1) the student:
 (A) [(1)] successfully completes the career and
 technology program of a school district in which the student
 receives training and instruction for employment in a current or
 emerging high-demand, high-wage, high-skill [certain trade or]
 occupation, as determined under Subsection (e); or
 (B)  is enrolled in a special education program
 under Subchapter A;
 (2) the student passes a certification examination to
 qualify for a license or certificate for the [trade or] occupation;
 and
 (3) the student submits to the district a written
 application in the form, time, and manner required by the district
 for the district to subsidize the cost of an examination described
 by Subdivision (2) [demonstrates financial need].
 (c) On approval by the commissioner, the agency shall pay
 each school district [eligible student] an amount equal to the cost
 paid by the district or student for the certification examination.
 To obtain reimbursement for a subsidy paid under this section, a
 district [student] must:
 (1) pay the fee for the examination or pay the student
 the amount of the fee paid by the student for the examination; and
 (2) submit to the commissioner a written application
 on a form prescribed by the commissioner stating [demonstrating
 financial need and] the amount of the fee paid under Subdivision (1)
 [by the student] for the certification examination.
 (e)  The commissioner, in collaboration with the
 commissioner of higher education and the Texas Workforce
 Commission, shall determine as necessary the occupations that
 qualify for purposes of this section.
 SECTION 23. Section 29.915, Education Code, is amended by
 amending Subsection (d) and adding Subsection (f) to read as
 follows:
 (d) The agency shall develop an application and selection
 process for selecting school districts to participate in the
 program. The agency may select not more than 100 [25] school
 districts to participate in the program.
 (f)  Not later than January 1, 2011, the agency shall provide
 each member of the legislature with a report relating to the
 implementation and effectiveness of the program. This subsection
 expires February 1, 2011.
 SECTION 24. Section 29.918(a), Education Code, is amended
 to read as follows:
 (a) Notwithstanding Section 39.114 or 42.152, a school
 district or open-enrollment charter school with a high dropout
 rate, as determined by the commissioner, must submit a plan to the
 commissioner describing the manner in which the district or charter
 school intends to use the compensatory education allotment under
 Section 42.152 and the high school allotment under Section 42.160
 [42.2516(b)(3)] for developing and implementing research-based
 strategies for dropout prevention. The district or charter school
 shall submit the plan not later than December 1 of each school year
 preceding the school year in which the district or charter school
 will receive the compensatory education allotment or high school
 allotment to which the plan applies.
 SECTION 25. Section 29.919(e), Education Code, is amended
 to read as follows:
 (e) As a condition of receiving a state grant, a campus must
 contribute additional funding for activities provided at the campus
 through the program, in an amount equal to at least $100 each school
 year for each student in an eligible grade level served through the
 program. The additional funding required by this subsection may
 consist of local funds, private funds, or state funds other than
 grant funds provided under this section. For program activities
 provided at the high school level, the high school allotment
 provided under Section 42.160 [42.2516(b)(3)] may be used to meet
 the additional funding requirement prescribed by this subsection.
 SECTION 26. Section 30A.002, Education Code, is amended by
 amending Subsection (b) and adding Subsection (c) to read as
 follows:
 (b) A student is eligible to enroll full-time in courses
 provided through the state virtual school network only if[:
 [(1)] the student was enrolled in a public school in
 this state in the preceding school year.
 (c)  Notwithstanding Subsection (a)(3) or (b), a student is
 eligible to enroll in one or more courses provided through the state
 virtual school network or enroll full-time in courses provided
 through the network if[; or
 [(2)] the student:
 (1) [(A)] is a dependent of a member of the United
 States military;
 (2) [(B)] was previously enrolled in high school in
 this state; and
 (3) [(C)] does not reside in this state due to a
 military deployment or transfer.
 SECTION 27. Section 30A.004, Education Code, is amended by
 adding Subsection (b-1) to read as follows:
 (b-1)  Requirements imposed by or under this chapter do not
 apply to a virtual course provided by a school district only to
 district students if the course is not provided as part of the state
 virtual school network.
 SECTION 28. Subchapter A, Chapter 30A, Education Code, is
 amended by adding Section 30A.006 to read as follows:
 Sec. 30A.006.  AUTHORIZATION FOR CERTAIN ELECTRONIC COURSES
 AND PROGRAMS. (a) An electronic course or program that was offered
 or could have been offered during the 2008-2009 school year under
 Section 29.909, as that section existed on January 1, 2009, may be
 offered during a subsequent school year through the state virtual
 school network.
 (b)  The commissioner may by rule modify any provision of
 this chapter necessary to provide for the transition of an
 electronic course or program from the authority to operate under
 former Section 29.909 to the authority to operate under this
 chapter.
 SECTION 29. Section 30A.101(b), Education Code, is amended
 to read as follows:
 (b) An open-enrollment charter school campus is eligible to
 act as a provider school under this chapter only if the campus
 [school] is rated recognized or higher under Section 39.072, except
 that a campus may act as a provider school to students receiving
 educational services under the supervision of a juvenile probation
 department, the Texas Youth Commission, or the Texas Department of
 Criminal Justice if the campus is rated academically acceptable or
 higher. A campus [and] may serve as a provider school only:
 (1) to a student within the school district in which
 the campus [school] is located or within its service area,
 whichever is smaller; or
 (2) to another student in the state:
 (A) through an agreement with the school district
 in which the student resides; or
 (B)  if the student receives educational services
 under the supervision of a juvenile probation department, the Texas
 Youth Commission, or the Texas Department of Criminal Justice,
 through an agreement with the applicable agency [administering
 authority under Section 30A.153].
 SECTION 30. Section 30A.104, Education Code, is amended to
 read as follows:
 Sec. 30A.104. COURSE ELIGIBILITY IN GENERAL. A course
 offered through the state virtual school network must:
 (1) be in a specific subject that is part of the
 required curriculum under Section 28.002(a);
 (2) be aligned with the essential knowledge and skills
 identified under Section 28.002(c) for a grade level at or above
 grade level three; and
 (3) be the equivalent in instructional rigor and scope
 to a course that is provided in a traditional classroom setting
 during:
 (A) a semester of 90 instructional days; and
 (B) a school day that meets the minimum length of
 a school day required under Section 25.082.
 SECTION 31. Sections 30A.105(c) and (d), Education Code,
 are amended to read as follows:
 (c) The agency shall [A school district, open-enrollment
 charter school, or public or private institution of higher
 education that submits an electronic course to the administering
 authority for approval must] pay [a fee in an amount established by
 the commissioner as sufficient to recover] the reasonable costs of
 [to the administering authority in] evaluating and approving
 electronic courses. If funds available to the agency for that
 purpose are insufficient to pay the costs of evaluating and
 approving all electronic courses submitted for evaluation and
 approval, the agency shall give priority to paying the costs of
 evaluating and approving the following courses:
 (1)  courses that satisfy high school graduation
 requirements;
 (2)  courses that would likely benefit a student in
 obtaining admission to a postsecondary institution;
 (3)  courses, including dual credit courses, that allow
 a student to earn college credit or other advanced credit;
 (4)  courses in subject areas most likely to be highly
 beneficial to students receiving educational services under the
 supervision of a juvenile probation department, the Texas Youth
 Commission, or the Texas Department of Criminal Justice; and
 (5)  courses in subject areas designated by the
 commissioner as commonly experiencing a shortage of teachers.
 (d) If the agency determines that the costs of evaluating
 and approving a submitted electronic course will not be paid by the
 agency due to a shortage of funds available for that purpose, the
 [The administering authority shall waive the fee required by
 Subsection (c) if a] school district, open-enrollment charter
 school, or public or private institution of higher education that
 submitted the [applies for approval of an electronic] course for
 evaluation and approval may pay the costs in order to ensure that
 evaluation of the course occurs [that was developed independently
 by the district, school, or institution. For purposes of this
 subsection, an electronic course is developed independently by a
 district, school, or institution if a district, school, or
 institution employee is responsible for developing substantially
 each aspect of the course, including:
 [(1)     determining the curriculum elements to be
 included in the course;
 [(2)     selecting any instructional materials for the
 course;
 [(3)     determining the manner in which instruction is to
 be delivered;
 [(4)     creating a lesson plan or similar description of
 the instructional aspects of the course;
 [(5)     determining any special projects or assignments a
 student in the course must complete; and
 [(6)     determining the manner in which a student's
 progress in the course will be measured].
 SECTION 32. Subchapter C, Chapter 30A, Education Code, is
 amended by adding Section 30A.1051 to read as follows:
 Sec. 30A.1051.  ELECTRONIC COURSE PORTABILITY. A student
 who transfers from one educational setting to another after
 beginning enrollment in an electronic course is entitled to
 continue enrollment in the course.
 SECTION 33. Section 30A.107(a), Education Code, is amended
 to read as follows:
 (a) A provider school district or school may offer
 electronic courses to:
 (1) students who reside in this state; and
 (2) students who reside outside this state and who
 meet the eligibility requirements under Section 30A.002(c)
 [30A.002(b)].
 SECTION 34. Section 30A.109, Education Code, is amended to
 read as follows:
 Sec. 30A.109. COMPULSORY ATTENDANCE. The commissioner by
 rule shall adopt procedures for reporting and verifying the
 attendance of a student enrolled in an electronic course provided
 through the state virtual school network. The rules may modify the
 application of Sections 25.085, 25.086, and 25.087 for a student
 enrolled in an electronic course but must require participation in
 an educational program equivalent to the requirements prescribed by
 those sections.
 SECTION 35. Section 30A.111, Education Code, is amended to
 read as follows:
 Sec. 30A.111. TEACHER AND INSTRUCTOR QUALIFICATIONS. (a)
 Each teacher of an electronic course offered by a school district or
 open-enrollment charter school through the state virtual school
 network must:
 (1) be certified under Subchapter B, Chapter 21, to
 teach that course and grade level; and
 (2) successfully complete the appropriate
 professional development course provided under Section 30A.112(a)
 or 30A.1121 before teaching an electronic course offered through
 the network.
 (b)  The commissioner by rule shall establish procedures for
 verifying successful completion by a teacher of the appropriate
 professional development course required by Subsection (a)(2).
 (c)  The commissioner by rule shall establish qualifications
 and professional development requirements applicable to college
 instructors providing instruction in dual credit courses through
 the state virtual school network that allow a student to earn high
 school credit and college credit or other credit.
 SECTION 36. Subchapter C, Chapter 30A, Education Code, is
 amended by adding Section 30A.1121 to read as follows:
 Sec. 30A.1121.  ALTERNATIVE EDUCATOR PROFESSIONAL
 DEVELOPMENT. (a) Subject to Subsection (b), a school district or
 open-enrollment charter school may provide professional
 development courses to teachers seeking to become authorized to
 teach electronic courses provided through the state virtual school
 network. A district or school may provide a professional
 development course that is approved under Subsection (b) to any
 interested teacher, regardless of whether the teacher is employed
 by the district or school.
 (b)  The agency shall review each professional development
 course sought to be provided by a school district or
 open-enrollment charter school under Subsection (a) to determine if
 the course meets the quality standards established under Section
 30A.113. If a course meets those standards, the district or school
 may provide the course for purposes of enabling a teacher to comply
 with Section 30A.111(a)(2).
 SECTION 37. Section 30A.151, Education Code, is amended by
 adding Subsection (f) to read as follows:
 (f)  For a full-time electronic course program offered
 through the state virtual school network for a grade level at or
 above grade level three but not above grade level eight, a school
 district or open-enrollment charter school is entitled to receive
 federal, state, and local funding for a student enrolled in the
 program in an amount equal to the funding the district or school
 would otherwise receive for a student enrolled in the district or
 school. The district or school may calculate the average daily
 attendance of a student enrolled in the program based on:
 (1) hours of contact with the student;
 (2)  the student's successful completion of a course;
 or
 (3) a method approved by the commissioner.
 SECTION 38. Section 30A.155, Education Code, is amended by
 amending Subsections (a), (c), and (d) and adding Subsections (a-1)
 and (c-1) to read as follows:
 (a) A school district or open-enrollment charter school may
 charge a fee for enrollment in an electronic course provided
 through the state virtual school network to a student who resides in
 this state and:
 (1) is enrolled in a school district or
 open-enrollment charter school as a full-time student; and
 (2) is enrolled in a course load greater than that
 normally taken by students in the equivalent grade level in other
 school districts or open-enrollment charter schools[; and
 [(3)     does not qualify for accelerated student funding
 under Section 30A.154].
 (a-1)  A school district or open-enrollment charter school
 may charge a fee for enrollment in an electronic course provided
 through the state virtual school network during the summer.
 (c) The amount of a fee charged a student under Subsection
 (a), (a-1), or (b) for each electronic course in which the student
 enrolls through the state virtual school network may not exceed the
 lesser of:
 (1) the cost of providing the course; or
 (2) $400.
 (c-1)  A school district or open-enrollment charter school
 that is not the provider school district or school may charge a
 student enrolled in the district or school a nominal fee, not to
 exceed the amount specified by the commissioner, if the student
 enrolls in an electronic course provided through the state virtual
 school network that exceeds the course load normally taken by
 students in the equivalent grade level. A juvenile probation
 department or state agency may charge a comparable fee to a student
 under the supervision of the department or agency.
 (d) Except as provided by this section [Subsection (a) or
 (b)], the state virtual school network may not charge a fee to
 students for electronic courses provided through the network.
 SECTION 39. Section 33.002(a), Education Code, is amended
 to read as follows:
 (a) From funds appropriated for the purpose or other funds
 that may be used for the purpose, the commissioner shall distribute
 funds for programs under this subchapter. In distributing those
 funds, the commissioner shall give preference to a school district
 that received funds under this subsection for the preceding school
 year and then to the districts that have the highest concentration
 of students at risk of dropping out of school, as described by
 Section 29.081. To receive funds for the program, a school district
 must apply to the commissioner. For each school year that a school
 district receives funds under this subsection, the district shall
 allocate an amount of local funds for school guidance and
 counseling programs that is equal to or greater than the amount of
 local funds that the school district allocated for that purpose
 during the preceding school year. This section applies only to a
 school district that receives funds as provided by this subsection
 [Section 42.152(i)].
 SECTION 40. Sections 39.024(c) and (d), Education Code, are
 amended to read as follows:
 (c) Using funds appropriated for purposes of this
 subsection, the [The] agency shall develop study guides for the
 assessment instruments administered under Sections 39.023(a) and
 (c). To assist parents in providing assistance during the period
 that school is recessed for summer, each school district shall
 distribute the study guides to parents of students who do not
 perform satisfactorily on one or more parts of an assessment
 instrument administered under this subchapter.
 (d) Using funds appropriated for purposes of this
 subsection, the [The] agency shall develop and make available
 teacher training materials and other teacher training resources to
 assist teachers in enabling students of limited English proficiency
 to meet state performance expectations. The teacher training
 resources shall be designed to support intensive, individualized,
 and accelerated instructional programs developed by school
 districts for students of limited English proficiency.
 SECTION 41. Section 39.031, Education Code, is amended to
 read as follows:
 Sec. 39.031. COST. [(a)] The cost of preparing,
 administering, or grading the assessment instruments and [shall be
 paid from the funds allotted under Section 42.152, and each
 district shall bear the cost in the same manner described for a
 reduction in allotments under Section 42.253. If a district does
 not receive an allotment under Section 42.152, the commissioner
 shall subtract the cost from the district's other foundation school
 fund allotments.
 [(b) The cost of] releasing the question and answer keys
 under Section 39.023(e) shall be paid from amounts appropriated to
 the agency.
 SECTION 42. The heading to Section 39.114, Education Code,
 is amended to read as follows:
 Sec. 39.114. USE OF HIGH SCHOOL ALLOTMENT.
 SECTION 43. Sections 39.114(a) and (b), Education Code, are
 amended to read as follows:
 (a) Except as provided by Subsection (b), a school district
 or campus must use funds allocated under Section 42.160
 [42.2516(b)(3)] to:
 (1) implement or administer a college readiness
 program that provides academic support and instruction to prepare
 underachieving students for entrance into an institution of higher
 education;
 (2) implement or administer a program that encourages
 students to pursue advanced academic opportunities, including
 early college high school programs and dual credit, advanced
 placement, and international baccalaureate courses;
 (3) implement or administer a program that provides
 opportunities for students to take academically rigorous course
 work, including four years of mathematics and four years of science
 at the high school level;
 (4) implement or administer a program, including
 online course support and professional development, that aligns the
 curriculum for grades six through 12 with postsecondary curriculum
 and expectations; or
 (5) implement or administer other high school
 completion and success initiatives in grades six through 12
 approved by the commissioner.
 (b) A school district may use funds allocated under Section
 42.160 [42.2516(b)(3)] on any instructional program in grades six
 through 12 other than an athletic program if:
 (1) the district is recognized as exceptional by the
 commissioner under the academic accountability indicator adopted
 under Section 39.051(b)(13); and
 (2) the district's completion rates for grades nine
 through 12 meet or exceed completion rate standards required by the
 commissioner to achieve a rating of exemplary under Section 39.072.
 SECTION 44. Section 41.002(a), Education Code, is amended
 to read as follows:
 (a) A school district may not have a wealth per student that
 exceeds:
 (1) the wealth per student that generates the amount
 of maintenance and operations tax revenue per weighted student
 available to a district with maintenance and operations tax revenue
 per cent of tax effort equal to the maximum amount provided per cent
 under Section 42.101 [at the 88th percentile in wealth per
 student], for the district's maintenance and operations tax effort
 equal to or less than the rate equal to the product of the state
 compression percentage, as determined under Section 42.2516,
 multiplied by the maintenance and operations tax rate adopted by
 the district for the 2005 tax year;
 (2) the wealth per student that generates the amount
 of maintenance and operations tax revenue per weighted student
 available to the Austin Independent School District, as determined
 by the commissioner in cooperation with the Legislative Budget
 Board, for the first six cents by which the district's maintenance
 and operations tax rate exceeds the rate equal to the product of the
 state compression percentage, as determined under Section 42.2516,
 multiplied by the maintenance and operations tax rate adopted by
 the district for the 2005 tax year, subject to Section 41.093(b-1);
 or
 (3) $319,500, for the district's maintenance and
 operations tax effort that exceeds the first six cents by which the
 district's maintenance and operations tax effort exceeds the rate
 equal to the product of the state compression percentage, as
 determined under Section 42.2516, multiplied by the maintenance and
 operations tax rate adopted by the district for the 2005 tax year.
 SECTION 45. Section 41.093(b-1), Education Code, is amended
 to read as follows:
 (b-1) If the guaranteed level of state and local funds per
 weighted student per cent of tax effort under Section
 42.302(a-1)(1) [42.302(a-1)(2)] for which state funds are
 appropriated for a school year is an amount at least equal to the
 amount of revenue per weighted student per cent of tax effort
 available to the Austin Independent School District, as determined
 by the commissioner in cooperation with the Legislative Budget
 Board, the commissioner, in computing the amounts described by
 Subsections (a)(1) and (2) and determining the cost of an
 attendance credit, shall exclude maintenance and operations tax
 revenue resulting from the first six cents by which a district's
 maintenance and operations tax rate exceeds the rate equal to the
 product of the state compression percentage, as determined under
 Section 42.2516, multiplied by the maintenance and operations tax
 rate adopted by the district for the 2005 tax year.
 SECTION 46. Section 41.121, Education Code, is amended to
 read as follows:
 Sec. 41.121. AGREEMENT. (a) The board of trustees of a
 district with a wealth per student that exceeds the equalized
 wealth level may execute an agreement to educate the students of
 another district in a number that, when the weighted average daily
 attendance of the students served is added to the weighted average
 daily attendance of the contracting district, is sufficient, in
 combination with any other actions taken under this chapter, to
 reduce the district's wealth per student to a level that is equal to
 or less than the equalized wealth level. The agreement is not
 effective unless the commissioner certifies that the transfer of
 weighted average daily attendance will not result in any of the
 contracting districts' wealth per student being greater than the
 equalized wealth level and that the agreement requires an
 expenditure per student in weighted average daily attendance that
 is at least equal to the amount per student in weighted average
 daily attendance required under Section 41.093[, unless it is
 determined by the commissioner that a quality educational program
 can be delivered at a lesser amount. The commissioner may approve a
 special financial arrangement between districts if that
 arrangement serves the best educational interests of the state].
 (b)  Notwithstanding the amendment of this section by H.B.
 No. 3646, Acts of the 81st Legislature, Regular Session, 2009, the
 commissioner may provide for the continuation of an agreement in
 existence during the 2008-2009 school year under the authority of
 this section, as it existed on May 1, 2009, and implementing rules
 as they existed on May 1, 2009, if the commissioner determines that
 the agreement benefits the education of students in the districts
 subject to the agreement. This subsection expires September 1,
 2011.
 SECTION 47. Section 42.005(g), Education Code, is amended
 to read as follows:
 (g) If a student may receive course credit toward the
 student's high school academic requirements and toward the
 student's higher education academic requirements for a single
 course, including a course provided under Section 28.009 by a
 public institution of higher education, the time during which the
 student attends the course shall be counted as part of the minimum
 number of instructional hours required for a student to be
 considered a full-time student in average daily attendance for
 purposes of this section.
 SECTION 48. Effective September 1, 2011, Section 42.005(g),
 Education Code, is amended to read as follows:
 (g) If a student may receive course credit toward the
 student's high school academic requirements and toward the
 student's higher education academic requirements for a single
 course, the time during which the student attends the course shall
 be counted as part of the minimum number of instructional hours
 required for a student to be considered a full-time student in
 average daily attendance for purposes of this section.
 SECTION 49. Subchapter A, Chapter 42, Education Code, is
 amended by adding Section 42.008 to read as follows:
 Sec. 42.008.  LIMITATION ON REVENUE INCREASES. (a)
 Notwithstanding any other provision of this title, a school
 district is not entitled in any school year to receive an amount of
 state and local maintenance and operations revenue per student in
 weighted average daily attendance that exceeds by more than $350
 the amount of state and local maintenance and operations revenue
 per student in weighted average daily attendance received by the
 district during the preceding school year.
 (a-1)  Subsection (a) applies beginning with the 2010-2011
 school year. For the 2009-2010 school year, a school district is
 not entitled to receive an amount of state and local maintenance and
 operations revenue per student in weighted average daily attendance
 that exceeds by more than $350 the amount of state and local
 maintenance and operations revenue per student in weighted average
 daily attendance that the district would have received during that
 year under Chapter 41 and this chapter, as those chapters existed on
 January 1, 2009, at a maintenance and operations tax rate equal to
 the product of the state compression percentage for that year, as
 determined under Section 42.2516, multiplied by the maintenance and
 operations tax rate adopted by the district for the 2005 tax year.
 This subsection expires September 1, 2010.
 (b)  Enrichment revenue to which a school district is
 entitled under Section 42.302 is not included for purposes of
 determining the limitation imposed by this section.
 (c)  The commissioner shall make adjustments to amounts due
 to a school district under this chapter or amounts required for a
 district to comply with Chapter 41 as necessary to comply with the
 limitation imposed by this section.
 (d)  A determination by the commissioner under this section
 is final and may not be appealed.
 SECTION 50. Section 42.101, Education Code, is amended to
 read as follows:
 Sec. 42.101. BASIC ALLOTMENT. (a) For each student in
 average daily attendance, not including the time students spend
 each day in special education programs in an instructional
 arrangement other than mainstream or career and technology
 education programs, for which an additional allotment is made under
 Subchapter C, a district is entitled to an allotment [in an amount]
 equal to the lesser of $4,765 or the amount that results from the
 following formula:
 A = $4,765 X (DCR/MCR)
 where:
 "A" is the allotment to which a district is entitled;
 "DCR" is the district's compressed tax rate, which is the
 product of the state compression percentage, as determined under
 Section 42.2516, multiplied by the maintenance and operations tax
 rate adopted by the district for the 2005 tax year; and
 "MCR" is the state maximum compressed tax rate, which is the
 product of the state compression percentage, as determined under
 Section 42.2516, multiplied by $1.50 [product of the amount per
 student per cent of tax effort available to a district at the
 percentile in wealth per student specified by Section
 42.302(a-1)(1), multiplied by 86].
 (a-1)  Subsection (a) applies beginning with the 2013-2014
 school year. For the 2009-2010 through 2012-2013 school years,
 Subsection (a) applies, except each reference to $4,765 in that
 subsection is replaced with an amount equal to the greater of:
 (1) $4,765; or
 (2)  the amount equal to the product of .0165 and the
 average statewide property value per weighted student.
 (a-2)  Subsection (a-1) and this subsection expire September
 1, 2013.
 (b) A greater amount for any school year may be provided by
 appropriation.
 SECTION 51. Section 42.106, Education Code, is amended to
 read as follows:
 Sec. 42.106. TUITION ALLOTMENT [ADJUSTED PROPERTY VALUE]
 FOR DISTRICTS NOT OFFERING ALL GRADE LEVELS. A [For purposes of
 this chapter, the taxable value of property of a] school district
 that contracts for students residing in the district to be educated
 in another district under Section 25.039(a) is entitled to receive
 an allotment equal to [adjusted by applying the formula:
 [ADPV = DPV - (TN/.015)
 [where:
 ["ADPV" is the district's adjusted taxable value of property;
 ["DPV" is the taxable value of property in the district for
 the preceding tax year determined under Subchapter M, Chapter 403,
 Government Code; and
 ["TN" is] the total amount of tuition required to be paid by
 the district under Section 25.039 [for the school year for which the
 adjustment is made], not to exceed the amount specified by
 commissioner rule under Section 25.039(b).
 SECTION 52. Section 42.152(c), Education Code, is amended
 to read as follows:
 (c) Funds allocated under this section shall be used to fund
 supplemental programs and services designed to eliminate any
 disparity in performance on assessment instruments administered
 under Subchapter B, Chapter 39, or disparity in the rates of high
 school completion between students at risk of dropping out of
 school, as defined by Section 29.081, and all other students.
 Specifically, the funds, other than an indirect cost allotment
 established under State Board of Education rule, which may not
 exceed 45 [15] percent, may be used to meet the costs of providing a
 compensatory, intensive, or accelerated instruction program under
 Section 29.081 or an alternative education program established
 under Section 37.008 or to support a program eligible under Title I
 of the Elementary and Secondary Education Act of 1965, as provided
 by Pub. L. No. 103-382 and its subsequent amendments, and by federal
 regulations implementing that Act, at a campus at which at least 40
 percent of the students are educationally disadvantaged. In
 meeting the costs of providing a compensatory, intensive, or
 accelerated instruction program under Section 29.081, a district's
 compensatory education allotment shall be used for costs
 supplementary to the regular education program, such as costs for
 program and student evaluation, instructional materials and
 equipment and other supplies required for quality instruction,
 supplemental staff expenses, salary for teachers of at-risk
 students, smaller class size, and individualized instruction. A
 home-rule school district or an open-enrollment charter school must
 use funds allocated under Subsection (a) for a purpose authorized
 in this subsection but is not otherwise subject to Subchapter C,
 Chapter 29. Notwithstanding any other provisions of this section:
 (1) to ensure that a sufficient amount of the funds
 allotted under this section are available to supplement
 instructional programs and services, no more than 18 percent of the
 funds allotted under this section may be used to fund disciplinary
 alternative education programs established under Section 37.008;
 (2) the commissioner may waive the limitations of
 Subdivision (1) upon an annual petition, by a district's board and a
 district's site-based decision making committee, presenting the
 reason for the need to spend supplemental compensatory education
 funds on disciplinary alternative education programs under Section
 37.008, provided that:
 (A) the district in its petition reports the
 number of students in each grade level, by demographic subgroup,
 not making satisfactory progress under the state's assessment
 system; and
 (B) the commissioner makes the waiver request
 information available annually to the public on the agency's
 website; and
 (3) for purposes of this subsection, a program
 specifically designed to serve students at risk of dropping out of
 school, as defined by Section 29.081, is considered to be a program
 supplemental to the regular education program, and a district may
 use its compensatory education allotment for such a program.
 SECTION 53. Section 42.152, Education Code, is amended by
 adding Subsections (s), (s-1), (s-2), and (s-3) to read as follows:
 (s)  In addition to the allotment provided under Subsection
 (a), a school district is entitled to an annual allotment equal to
 $650:
 (1)  for each student in average daily attendance who
 has a parent or guardian who is serving on active duty in a combat
 zone as a member of the armed forces of the United States; and
 (2) for each student in average daily attendance who:
 (A)  has a parent or guardian serving on active
 duty as a member of the armed forces of the United States; and
 (B)  has transferred to a campus in the district
 during the school year as a result of a change in residence because
 of an action taken under the Defense Base Closure and Realignment
 Act of 1990 (10 U.S.C. Section 2687).
 (s-1)  Notwithstanding any other provision of this section,
 a school district may use funds allotted to the district under
 Subsection (s) only to provide supplemental programs and services
 described by Subsection (c) or Subsection (f) for students
 described by Subsection (s) who are enrolled in the district.
 (s-2)  The commissioner may provide allotments under
 Subsection (s) only if funds are specifically appropriated for that
 purpose or the commissioner determines that the amount appropriated
 for purposes of the Foundation School Program exceeds the amount to
 which school districts are entitled under this chapter and the
 excess funds may be used for that purpose. The amount appropriated
 for allotments under Subsection (s) may not exceed $9.9 million in a
 school year. If the total amount of allotments to which districts
 are entitled under Subsection (s) for a school year exceeds the
 amount appropriated or otherwise available for allotments under
 that subsection, the commissioner shall reduce each district's
 allotment under that subsection proportionately.
 (s-3)  Subsections (s), (s-1), (s-2), and this subsection
 expire September 1, 2013.
 SECTION 54. Section 42.154(a), Education Code, is amended
 to read as follows:
 (a) For each full-time equivalent student in average daily
 attendance in an approved career and technology education program
 in grades nine through 12 or in career and technology education
 programs for students with disabilities in grades seven through 12,
 a district is entitled to:
 (1) an annual allotment equal to the adjusted basic
 allotment multiplied by a weight of 1.35; and
 (2) $50, if the student is enrolled in:
 (A)  two or more advanced career and technology
 education classes for a total of three or more credits; or
 (B)  an advanced course as part of a tech-prep
 program under Subchapter T, Chapter 61.
 SECTION 55. Subchapter C, Chapter 42, Education Code, is
 amended by adding Section 42.1541 to read as follows:
 Sec. 42.1541.  INDIRECT COST ALLOTMENTS. (a) The State
 Board of Education shall by rule increase the indirect cost
 allotments established under Sections 42.151(h), 42.152(c),
 42.153(b), and 42.154(a-1) and (c) and in effect for the 2008-2009
 school year as necessary to reflect the increased percentage of
 total maintenance and operations funding represented by the basic
 allotment under Section 42.101 as a result of amendment of that
 section by H.B. No. 3646, Acts of the 81st Legislature, Regular
 Session, 2009.
 (b)  The board shall take the action required by Subsection
 (a) not later than the date that permits the increased indirect cost
 allotments to apply beginning with the 2009-2010 school year.
 (c) This section expires September 1, 2010.
 SECTION 56. Subchapter C, Chapter 42, Education Code, is
 amended by adding Sections 42.159 and 42.160 to read as follows:
 Sec. 42.159.  STATE VIRTUAL SCHOOL NETWORK ALLOTMENTS. (a)
 In this section:
 (1)  "Electronic course" means a course that is a
 semester in length.
 (2)  "Normal course load" means the number of classes
 or credit hours generally required to be taken by a student to
 generate the full amount of funding provided under this chapter for
 a student in average daily attendance, as determined by the
 commissioner.
 (3)  "State virtual school network" means the system
 established under Chapter 30A.
 (b)  For each student who successfully completes an
 electronic course that satisfies a curriculum requirement for
 graduation adopted under Section 28.025 and is provided through the
 state virtual school network as part of a normal course load:
 (1)  the school district or open-enrollment charter
 school that provided the course is entitled to an allotment of $400;
 and
 (2)  the school district or open-enrollment charter
 school in which the student is enrolled is entitled to an allotment
 of $80 to reimburse the district or school for associated
 administrative costs.
 (c)  A juvenile probation department or state agency is
 entitled to receive state funding comparable to the funding
 described by Subsection (b)(2) for students under the supervision
 of the department or agency.
 (d)  For each student who successfully completes an
 electronic course that satisfies a curriculum requirement for
 graduation adopted under Section 28.025, is provided through the
 state virtual school network, and exceeds a normal course load,
 including an electronic course offered during the summer, the
 school district or open-enrollment charter school that provided the
 course may be entitled to an allotment in an amount determined by
 the commissioner based on the amount of funds appropriated for
 purposes of this subsection.
 (e)  The commissioner may set aside an amount not to exceed
 50 percent of the total funds appropriated for allotments under
 Subsection (d) and use that amount to pay the costs of providing
 through the state virtual school network electronic courses through
 which students may recover academic credit for courses in which the
 students were previously unsuccessful. The commissioner may
 reserve a portion of the set-aside amount for payment of the costs
 of providing electronic courses described by this subsection to
 students in alternative education settings. For purposes of this
 subsection, students in alternative education settings include
 students in disciplinary alternative education programs under
 Section 37.008, students in juvenile justice alternative education
 programs under Section 37.011, and students under the supervision
 of a juvenile probation department, the Texas Youth Commission, or
 the Texas Department of Criminal Justice.
 (f)  The commissioner may not provide partial funding under
 this section to a school district or open-enrollment charter school
 under Subsection (b) or (d) on the basis of a student who
 successfully completes one or more modules of an electronic course
 but does not successfully complete the entire course.
 (g)  Amounts received by a school district or
 open-enrollment charter school under this section are in addition
 to any amounts to which the district or school is entitled to
 receive or retain under Chapter 12 or 41 or this chapter and are not
 subject to reduction under any provision of those chapters.
 (h)  The commissioner shall adopt rules necessary to
 implement this section. The rules must include provisions:
 (1)  requiring a school district or open-enrollment
 charter school that receives funding for an electronic course under
 Subsection (d) to reduce the amount of any fee charged for the
 course in accordance with Section 30A.155 by an amount equal to the
 amount of funding provided under Subsection (d);
 (2)  prohibiting a school district or open-enrollment
 charter school that receives funding for an electronic course under
 Subsection (d) from charging a fee for the course in accordance with
 Section 30A.155 that is higher than would otherwise be charged; and
 (3)  addressing division and distribution of the
 allotment described by Subsection (b)(2) in circumstances in which
 a student transfers from one school district, school, or other
 educational setting to another after beginning enrollment in an
 electronic course.
 Sec. 42.160.  HIGH SCHOOL ALLOTMENT. (a) A school district
 is entitled to an annual allotment of $275 for each student in
 average daily attendance in grades 9 through 12 in the district.
 (b)  A school district that is required to take action under
 Chapter 41 to reduce its wealth per student to the equalized wealth
 level is entitled to a credit, in the amount of the allotments to
 which the district is entitled under this section, against the
 total amount required under Section 41.093 for the district to
 purchase attendance credits. A school district that is otherwise
 ineligible for state aid under this chapter is entitled to receive
 allotments under this section.
 (c)  An open-enrollment charter school is entitled to an
 allotment under this section in the same manner as a school
 district.
 (d)  The commissioner shall adopt rules to administer this
 section, including rules related to the permissible use of funds
 allocated under this section to an open-enrollment charter school.
 SECTION 57. Section 42.2516, Education Code, is amended to
 read as follows:
 Sec. 42.2516. ADDITIONAL STATE AID FOR TAX REDUCTION. (a)
 In this section, "state compression percentage" means the
 percentage, as determined by the commissioner, of a school
 district's adopted maintenance and operations tax rate for the 2005
 tax year that serves as the basis for state funding for tax rate
 reduction under this section. The commissioner shall determine the
 state compression percentage for each school year based on the
 percentage by which a district is able to reduce the district's
 maintenance and operations tax rate for that year, as compared to
 the district's adopted maintenance and operations tax rate for the
 2005 tax year, as a result of state funds appropriated for
 distribution under this section for that year from the property tax
 relief fund established under Section 403.109, Government Code, or
 from another funding source available for school district property
 tax relief.
 (b)  Notwithstanding any other provision of this title, a
 school district that imposes a maintenance and operations tax at a
 rate at least equal to the product of the state compression
 percentage multiplied by the maintenance and operations tax rate
 adopted by the district for the 2005 tax year is entitled to at
 least the amount of state revenue necessary to provide the district
 with the sum of:
 (1)  as calculated under Subsection (e), the amount of
 state and local revenue per student in weighted average daily
 attendance for maintenance and operations that the district would
 have received during the 2009-2010 school year under Chapter 41 and
 this chapter, as those chapters existed on January 1, 2009, at a
 maintenance and operations tax rate equal to the product of the
 state compression percentage for that year multiplied by the
 maintenance and operations tax rate adopted by the district for the
 2005 tax year;
 (2)  an amount equal to the product of $120 multiplied
 by the number of students in weighted average daily attendance in
 the district;
 (3)  an amount equal to the amount the district is
 required to pay into the tax increment fund for a reinvestment zone
 under Section 311.013(n), Tax Code, in the current tax year; and
 (4)  any amount to which the district is entitled under
 Section 42.106.
 [(a-1)     Subsection (a) applies beginning with the state
 fiscal year ending August 31, 2009. For the state fiscal year
 ending August 31, 2007, the state compression percentage is 88.67
 percent. For the state fiscal year ending August 31, 2008, the
 state compression percentage is 66.67 percent. This subsection
 expires September 1, 2009.
 [(b)     Subject to Subsections (b-1), (b-2), (f-1), (g), and
 (h), but notwithstanding any other provision of this title, a
 school district is entitled to state revenue necessary to provide
 the district with the sum of:
 [(1)     the amount of state revenue necessary to maintain
 state and local revenue per student in weighted average daily
 attendance in the amount equal to the greater of:
 [(A)     the amount of state and local revenue per
 student in weighted average daily attendance for the maintenance
 and operations of the district available to the district for the
 2005-2006 school year;
 [(B)     the amount of state and local revenue per
 student in weighted average daily attendance for the maintenance
 and operations of the district to which the district would have been
 entitled for the 2006-2007 school year under this chapter, as it
 existed on January 1, 2006, or, if the district would have been
 subject to Chapter 41, as that chapter existed on January 1, 2006,
 the amount to which the district would have been entitled under that
 chapter, based on the funding elements in effect for the 2005-2006
 school year, if the district imposed a maintenance and operations
 tax at the rate adopted by the district for the 2005 tax year; or
 [(C)     the amount of state and local revenue per
 student in weighted average daily attendance for the maintenance
 and operations of the district to which the district would have been
 entitled for the 2006-2007 school year under this chapter, as it
 existed on January 1, 2006, or, if the district would have been
 subject to Chapter 41, as that chapter existed on January 1, 2006,
 the amount to which the district would have been entitled under that
 chapter, based on the funding elements in effect for the 2005-2006
 school year, if the district imposed a maintenance and operations
 tax at the rate equal to the rate described by Section 26.08(i) or
 (k)(1), Tax Code, as applicable, for the 2006 tax year;
 [(2)     an amount equal to the product of $2,500
 multiplied by the number of classroom teachers, full-time
 librarians, full-time counselors certified under Subchapter B,
 Chapter 21, and full-time school nurses employed by the district
 and entitled to a minimum salary under Section 21.402; and
 [(3)     an amount equal to the product of $275 multiplied
 by the number of students in average daily attendance in grades nine
 through 12 in the district.]
 (b-1) The amount determined for a school district under
 Subsection (b) is increased or reduced as follows:
 (1) if for any school year the district is entitled to
 a greater allotment under Section 42.155 or 42.158 or more
 additional state aid under Section 42.2515 than the allotment or
 additional state aid to which the district was entitled under
 Section 42.155, 42.158, or 42.2515, as applicable, [that section]
 for the 2009-2010 school year [on which the district's entitlement
 under Subsection (b) is based], the district's entitlement under
 Subsection (b) is increased by an amount equal to the difference
 between the amount to which the district is entitled under Section
 42.155, 42.158, or 42.2515, as applicable, for that school year and
 the amount to which the district was entitled under the applicable
 [that] section for the 2009-2010 school year[:
 [(A)     the 2005-2006 school year, if the amount
 determined for the district under Subsection (b) is determined
 under Subsection (b)(1)(A); or
 [(B)     the 2006-2007 school year, if the amount
 determined for the district under Subsection (b) is determined
 under Subsection (b)(1)(B) or (C)]; and
 (2) if for any school year the district is not entitled
 to an allotment under Section 42.155 or 42.158 or additional state
 aid under Section 42.2515 or is entitled to a lesser allotment or
 less additional state aid under the applicable [that] section than
 the allotment or additional state aid to which the district was
 entitled under the applicable [that] section for the 2009-2010
 school year [on which the district's entitlement under Subsection
 (b) is based], the district's entitlement under Subsection (b) is
 reduced by an amount equal to the difference between the amount to
 which the district was entitled under Section 42.155, 42.158, or
 42.2515, as applicable, for the 2009-2010 [2005-2006 or 2006-2007]
 school year[, as appropriate based on whether the district's
 entitlement under Subsection (b) is determined under Subsection
 (b)(1)(A), (B), or (C),] and the amount to which the district is
 entitled under the applicable section [Section 42.158] for the
 current school year.
 [(b-2)     The amount determined for a school district under
 Subsection (b) is increased or reduced as follows:
 [(1)     if for any school year the district is entitled to
 a greater allotment under Section 42.155 or greater additional
 state aid under Section 42.2515 than the allotment or additional
 state aid to which the district was entitled under Section 42.155 or
 42.2515, as applicable, for the school year on which the district's
 entitlement under Subsection (b) is based, the district's
 entitlement under Subsection (b) is increased by an amount equal to
 the difference between the amount to which the district is entitled
 under Section 42.155 or 42.2515, as applicable, for that school
 year and the amount to which the district was entitled under the
 applicable section, as applicable for:
 [(A)     the 2005-2006 school year, if the amount
 determined for the district under Subsection (b) is determined
 under Subsection (b)(1)(A); or
 [(B)     the 2006-2007 school year, if the amount
 determined for the district under Subsection (b) is determined
 under Subsection (b)(1)(B) or (C); and
 [(2)     if for any school year the district is not
 entitled to an allotment under Section 42.155 or additional state
 aid under Section 42.2515 or is entitled to a lesser allotment or
 less additional state aid under the applicable section than the
 allotment or additional state aid to which the district was
 entitled under the applicable section for the school year on which
 the district's entitlement under Subsection (b) is based, the
 district's entitlement under Subsection (b) is reduced by an amount
 equal to the difference between the amount to which the district was
 entitled under Section 42.155 or 42.2515, as applicable, for the
 2005-2006 or 2006-2007 school year, as appropriate based on whether
 the district's entitlement under Subsection (b) is determined under
 Subsection (b)(1)(A), (B), or (C), and the amount to which the
 district is entitled under the applicable section for the current
 school year.]
 (c) Enrichment revenue to which a school district is
 entitled under Section 42.302 is not included for purposes of
 determining the amount to which a district is entitled under this
 section. [In determining the amount to which a district is entitled
 under Subsection (b)(1), the commissioner shall include:
 [(1)     any amounts described by Rider 69, page III-19,
 Chapter 1369, Acts of the 79th Legislature, Regular Session, 2005
 (the General Appropriations Act);
 [(2)     for a school district that received additional
 revenue for the 2005-2006 school year as a result of an agreement
 under Subchapter E, Chapter 41:
 [(A)     if the amount of state revenue to which the
 district is entitled under Subsection (b) is computed based on the
 amount described by Subsection (b)(1)(A), the amount of that
 additional revenue retained by the district for the 2005-2006
 school year, which is the amount by which the total maintenance and
 operations revenue available to the district for that school year
 exceeded the total maintenance and operations revenue that would
 have been available to the district for that school year if the
 district had not entered into the agreement, less any amount the
 district paid to another entity under the agreement; or
 [(B)     if the amount of state revenue to which the
 district is entitled under Subsection (b) is computed based on the
 amount described by Subsection (b)(1)(B) or (C), the amount of the
 additional revenue that would have been retained by the district
 for the 2006-2007 school year if the district had entered into the
 agreement on the same terms as under the agreement for the 2005-2006
 school year, which is the amount by which the total maintenance and
 operations revenue that would have been available to the district
 for the 2006-2007 school year if the district had entered into the
 agreement exceeds the total maintenance and operations revenue that
 would have been available to the district for that school year if
 the district had not entered into the agreement and had imposed a
 maintenance and operations tax at the rate of $1.50 on the $100
 valuation of taxable property, less any amount the district would
 have paid to another entity under the agreement;
 [(3)     any amount necessary to reflect an adjustment
 made by the commissioner under Section 42.005;
 [(4)     any amount necessary to reflect an adjustment
 made by the commissioner under Section 42.2521; and
 [(5)     any amount necessary to reflect an adjustment
 made by the commissioner under Section 42.2531.]
 (d) In determining the amount to which a district is
 entitled under Subsection (b)(1), the commissioner shall:
 (1)  include any amounts received by the district
 during the 2008-2009 school year under Rider 86, page III-23,
 Chapter 1428 (H.B. 1), Acts of the 80th Legislature, Regular
 Session, 2007 (the General Appropriations Act); and
 (2)  for a school district that paid tuition under
 Section 25.039 during the 2008-2009 school year, reduce the amount
 to which the district is entitled by the amount of tuition paid
 during that school year. [If, for the 2006-2007 or a subsequent
 school year, a school district enters into an agreement under
 Subchapter E, Chapter 41, the commissioner shall reduce the amount
 of state revenue to which the district is entitled under Subsection
 (b) for that school year by an amount equal to any additional
 revenue for that school year that the district receives and retains
 as a result of that agreement, which is the amount by which the
 total maintenance and operations revenue available to the district
 exceeds the total maintenance and operations revenue that would
 have been available to the district if the district had not entered
 into the agreement and had imposed a maintenance and operations tax
 at the maximum rate permitted under Section 45.003(d), less any
 amount the district pays to another entity under the agreement.]
 (e) For purposes of determining the total amount of state
 and local revenue to which a district is entitled under Subsection
 (b)(1), the commissioner shall determine the amount of state and
 local revenue per student in weighted average daily attendance to
 which the district would have been entitled during the 2009-2010
 school year under Chapter 41 and this chapter, as they existed on
 January 1, 2009, and multiply that amount by the number of students
 in weighted average daily attendance as determined in accordance
 with the changes to Chapter 41 and this chapter, including the
 repeal of former Section 42.103(e), made by H.B. No. 3646, Acts of
 the 81st Legislature, Regular Session, 2009. [The amount of revenue
 to which a school district is entitled because of the technology
 allotment under Section 32.005 is not included in making a
 determination under Subsection (b)(1).]
 (f) A school district that is required to take action under
 Chapter 41 to reduce its wealth per student to the equalized wealth
 level and that is entitled to state revenue under this section may
 receive that revenue through an adjustment against the total amount
 of attendance credits required to be purchased under Subchapter D,
 Chapter 41, or the total number of nonresident students required to
 be educated under Subchapter E, Chapter 41, as determined by the
 commissioner. [For purposes of determining the amount of revenue to
 which a school district is entitled under this section, the
 commissioner shall use the average tax collection rate for the
 district for the 2003, 2004, and 2005 tax years.]
 (f-1) The commissioner shall, in accordance with rules
 adopted by the commissioner, adjust the amount of a school
 district's local revenue derived from maintenance and operations
 tax collections, as calculated for purposes of determining the
 amount of state revenue to which the district is entitled under this
 section, if the district, for the 2010 [2007] tax year or a
 subsequent tax year:
 (1) adopts an exemption under Section 11.13(n), Tax
 Code, that was not in effect for the 2009 [2005 or 2006] tax year, or
 eliminates an exemption under Section 11.13(n), Tax Code, that was
 in effect for the 2009 [2005 or 2006] tax year;
 (2) adopts an exemption under Section 11.13(n), Tax
 Code, at a greater or lesser percentage than the percentage in
 effect for the district for the 2009 [2005 or 2006] tax year;
 (3) grants an exemption under an agreement authorized
 by Chapter 312, Tax Code, that was not in effect for the 2009 [2005
 or 2006] tax year, or ceases to grant an exemption authorized by
 that chapter that was in effect for the 2009 [2005 or 2006] tax
 year; or
 (4) agrees to deposit taxes into a tax increment fund
 created under Chapter 311, Tax Code, under a reinvestment zone
 financing plan that was not in effect for the 2009 [2005 or 2006]
 tax year, or ceases depositing taxes into a tax increment fund
 created under that chapter under a reinvestment zone financing plan
 that was in effect for the 2009 [2005 or 2006] tax year.
 (f-2) The rules adopted by the commissioner under
 Subsection (f-1) must:
 (1) require the commissioner to determine, as if this
 section did not exist, the effect under Chapter 41 and this chapter
 of a school district's action described by Subsection (f-1)(1),
 (2), (3), or (4) on the total state revenue to which the district
 would be entitled or the cost to the district of purchasing
 sufficient attendance credits to reduce the district's wealth per
 student to the equalized wealth level; and
 (2) require an increase or reduction in the amount of
 state revenue to which a school district is entitled under
 Subsection (b) that is substantially equivalent to any change in
 total state revenue or the cost of purchasing attendance credits
 that would apply to the district if this section did not exist.
 (f-3) An adjustment made by the commissioner under the rules
 adopted under Subsection (f-1) is final and may not be appealed.
 (g) The commissioner may adopt rules necessary to implement
 this section. [If a school district adopts a maintenance and
 operations tax rate that is below the rate equal to the product of
 the state compression percentage multiplied by the maintenance and
 operations tax rate adopted by the district for the 2005 tax year,
 the commissioner shall reduce the district's entitlement under this
 section in proportion to the amount by which the adopted rate is
 less than the rate equal to the product of the state compression
 percentage multiplied by the rate adopted by the district for the
 2005 tax year.]
 (h) A determination by the commissioner under this section
 is final and may not be appealed. [Notwithstanding any other
 provision of this title, if the amount of state and local revenue
 per student in weighted average daily attendance for the
 maintenance and operations of the district available to the
 district in a school year as a result of increases to the equalized
 wealth level under Section 41.002, the basic allotment under
 Section 42.101, and the guaranteed level under Section 42.302 made
 by H.B. No. 1, Acts of the 79th Legislature, 3rd Called Session,
 2006, exceeds the amount to which a district is entitled under
 Subsection (b) for that school year, the commissioner must:
 [(1)     reduce the amount of state aid provided to the
 district for that school year by an amount equal to the excess
 revenue, as determined by the commissioner; or
 [(2)     for a district with a wealth per student greater
 than the applicable amount described by Section 41.002(a), require
 the district to purchase a number of attendance credits for that
 school year at a cost equal to the amount of excess revenue, as
 determined by the commissioner.
 [(i)     A school district that is required to take action under
 Chapter 41 to reduce its wealth per student to the equalized wealth
 level and that is entitled to state revenue under this section may
 receive that revenue through an adjustment against the total amount
 of attendance credits required to be purchased under Subchapter D,
 Chapter 41, or the total number of nonresident students required to
 be educated under Subchapter E, Chapter 41, as determined by the
 commissioner.
 [(j)     If a school district reduces its maintenance and
 operations tax rate by an amount less than the rate equal to the
 product of the difference between the state compression percentage
 for the preceding year and the state compression percentage for the
 year of the reduction, multiplied by the maintenance and operations
 tax rate adopted by the district for the 2005 tax year, the
 commissioner may not reduce the amount to which the district is
 entitled under this section on the basis of the additional revenue
 collected by the district.
 [(k)     The commissioner may adopt rules necessary to
 administer this section.
 [(l)     A determination by the commissioner under this section
 is final and may not be appealed.]
 SECTION 58. Subchapter E, Chapter 42, Education Code, is
 amended by adding Section 42.25161 to read as follows:
 Sec. 42.25161.  ADDITIONAL STATE AID FOR SOUTH TEXAS
 INDEPENDENT SCHOOL DISTRICT. (a) The commissioner shall provide
 South Texas Independent School District with the amount of state
 aid necessary to ensure that the district receives an amount of
 state and local revenue per student in weighted average daily
 attendance that is at least $120 greater than the amount the
 district would have received per student in weighted average daily
 attendance during the 2009-2010 school year under this chapter, as
 it existed on January 1, 2009, at a maintenance and operations tax
 rate equal to the product of the state compression percentage
 multiplied by the maintenance and operations tax rate adopted by
 the district for the 2005 tax year, provided that the district
 imposes a maintenance and operations tax at that rate.
 (b)  The commissioner may adopt rules necessary to implement
 this section.
 (c)  A determination by the commissioner under this section
 is final and may not be appealed.
 SECTION 59. Section 42.252(a), Education Code, is amended
 to read as follows:
 (a) Each school district's share of the Foundation School
 Program is determined by the following formula:
 LFA = TR X DPV
 where:
 "LFA" is the school district's local share;
 "TR" is a tax rate which for each hundred dollars of valuation
 is an effective tax rate of the amount equal to the product of the
 state compression percentage, as determined under Section 42.2516,
 multiplied by the lesser of:
 (1) $1.50; or
 (2)  the maintenance and operations tax rate adopted by
 the district for the 2005 tax year [$0.86]; and
 "DPV" is the taxable value of property in the school district
 for the preceding tax year determined under Subchapter M, Chapter
 403, Government Code.
 SECTION 60. Section 42.253, Education Code, is amended by
 adding Subsection (c-1) to read as follows:
 (c-1)  The amounts to be paid under Section 42.2516(b)(3)
 shall be paid at the same time as other state revenue is paid to the
 district. Payments shall be based on amounts paid under Section
 42.2516(b)(3) for the preceding year. Any deficiency shall be paid
 to the district at the same time the final amount to be paid to the
 district is determined, and any overpayment shall be deducted from
 the payments the district would otherwise receive in the following
 year.
 SECTION 61. Section 42.259, Education Code, is amended by
 adding Subsection (g) to read as follows:
 (g)  The commissioner shall make all annual Foundation
 School Program payments under this section for purposes described
 by Sections 45.252(a)(1) and (2) before the deadline established
 under Section 45.263(b) for payment of debt service on bonds.
 Notwithstanding any other provision of this section, the
 commissioner may make Foundation School Program payments under this
 section after the deadline established under Section 45.263(b) only
 if the commissioner has not received notice under Section 45.258
 concerning a district's failure or inability to pay matured
 principal or interest on bonds.
 SECTION 62. Section 42.260(a), Education Code, is amended
 to read as follows:
 (a) In this section, "participating charter school" means
 an open-enrollment charter school that participates in the uniform
 group coverage program established under Chapter 1579, Insurance
 Code [has the meaning assigned by Section 42.2514].
 SECTION 63. Sections 42.302(a), (a-1), and (a-2), Education
 Code, are amended to read as follows:
 (a) Each school district is guaranteed a specified amount
 per weighted student in state and local funds for each cent of tax
 effort over that required for the district's local fund assignment
 up to the maximum level specified in this subchapter. The amount of
 state support, subject only to the maximum amount under Section
 42.303, is determined by the formula:
 GYA = (GL X WADA X DTR X 100) - LR
 where:
 "GYA" is the guaranteed yield amount of state funds to be
 allocated to the district;
 "GL" is the dollar amount guaranteed level of state and local
 funds per weighted student per cent of tax effort, which is an
 amount described by Subsection (a-1) or a greater amount for any
 year provided by appropriation;
 "WADA" is the number of students in weighted average daily
 attendance, which is calculated by dividing the sum of the school
 district's allotments under Subchapters B and C, less any allotment
 to the district for transportation, any allotment under Section
 42.158, 42.159, or 42.160, and 50 percent of the adjustment under
 Section 42.102, by the basic allotment for the applicable year;
 "DTR" is the district enrichment tax rate of the school
 district, which is determined by subtracting the amounts specified
 by Subsection (b) from the total amount of maintenance and
 operations taxes collected by the school district for the
 applicable school year and dividing the difference by the quotient
 of the district's taxable value of property as determined under
 Subchapter M, Chapter 403, Government Code, or, if applicable,
 under Section 42.2521, divided by 100; and
 "LR" is the local revenue, which is determined by multiplying
 "DTR" by the quotient of the district's taxable value of property as
 determined under Subchapter M, Chapter 403, Government Code, or, if
 applicable, under Section 42.2521, divided by 100.
 (a-1) In this section, "wealth per student" has the meaning
 assigned by Section 41.001. For purposes of Subsection (a), the
 dollar amount guaranteed level of state and local funds per
 weighted student per cent of tax effort ("GL") for a school district
 is:
 (1) the greater of [the amount of district tax revenue
 per weighted student per cent of tax effort available to a district
 at the 88th percentile in wealth per student, as determined by the
 commissioner in cooperation with the Legislative Budget Board, for
 the district's maintenance and operations tax effort equal to or
 less than the rate equal to the product of the state compression
 percentage, as determined under Section 42.2516, multiplied by the
 maintenance and operations tax rate adopted by the district for the
 2005 tax year;
 [(2)] the amount of district tax revenue per weighted
 student per cent of tax effort that would be available to the Austin
 Independent School District, as determined by the commissioner in
 cooperation with the Legislative Budget Board, if the reduction of
 the limitation on tax increases as provided by Section 11.26(a-1),
 (a-2), or (a-3), Tax Code, did not apply, or the amount of district
 tax revenue per weighted student per cent of tax effort used for
 purposes of this subdivision in the preceding school year, for the
 first six cents by which the district's maintenance and operations
 tax rate exceeds the rate equal to the product of the state
 compression percentage, as determined under Section 42.2516 [and
 notwithstanding the limitation on district enrichment tax rate
 ("DTR") under Section 42.303], multiplied by the maintenance and
 operations tax rate adopted by the district for the 2005 tax year;
 and
 (2) [(3)] $31.95, for the district's maintenance and
 operations tax effort that exceeds the amount of tax effort
 described by Subdivision (1) [(2)].
 (a-2) The limitation on district enrichment tax rate
 ("DTR") under Section 42.303 does not apply to the district's
 maintenance and operations tax effort described by Subsection
 (a-1)(1) [(a-1)(2)].
 SECTION 64. Section 42.303, Education Code, is amended to
 read as follows:
 Sec. 42.303. LIMITATION ON ENRICHMENT TAX RATE. The
 district enrichment tax rate ("DTR") under Section 42.302 may not
 exceed the amount per $100 of valuation by which the maximum rate
 permitted under Section 45.003 exceeds the rate used to determine
 the district's local share under Section 42.252 [of $0.86], or a
 greater amount for any year provided by appropriation.
 SECTION 65. Chapter 42, Education Code, is amended by
 adding Subchapter I to read as follows:
 SUBCHAPTER I. COMPREHENSIVE REVIEW OF PUBLIC SCHOOL FINANCE
 WEIGHTS, ALLOTMENTS, AND ADJUSTMENTS
 Sec. 42.451.  SELECT COMMITTEE ON PUBLIC SCHOOL FINANCE
 WEIGHTS, ALLOTMENTS, AND ADJUSTMENTS. (a) The Select Committee on
 Public School Finance Weights, Allotments, and Adjustments is
 established to conduct a comprehensive review of weights,
 allotments, and adjustments under the public school finance system,
 including all current weights, allotments, and adjustments
 provided under this chapter and any additional weights, allotments,
 and adjustments recommended by the committee.
 (b)  The committee is composed of 15 members appointed as
 follows:
 (1)  four members of the senate, appointed by the
 lieutenant governor;
 (2)  four members of the house of representatives,
 appointed by the speaker of the house of representatives;
 (3) the commissioner of education;
 (4)  one person currently employed at a primary or
 secondary school in this state and one representative of the
 business community, each appointed by the lieutenant governor;
 (5)  one person currently employed at a primary or
 secondary school in this state and one representative of the
 business community, each appointed by the speaker of the house of
 representatives; and
 (6)  one person currently employed at a primary or
 secondary school in this state and one representative from the
 business community, appointed by the governor.
 (c)  The governor, lieutenant governor, and speaker of the
 house of representatives shall make the appointments required by
 Subsection (b) in a timely fashion to permit the committee to comply
 with Section 42.452(a).
 Sec. 42.452.  COMMITTEE MEETINGS. (a) Not later than
 October 1, 2009, the committee shall hold an organizational
 meeting.
 (b)  The lieutenant governor and speaker of the house of
 representatives shall each appoint a committee member to serve as
 co-chair.
 (c)  Committee meetings shall be held at the call of the
 co-chairs.
 Sec. 42.453.  COMPENSATION AND REIMBURSEMENT. (a) A member
 of the committee is entitled to reimbursement for actual and
 necessary expenses incurred in performing committee duties.
 (b)  A legislative member of the committee is entitled to
 reimbursement from the appropriate fund of the house of the
 legislature in which the member serves.
 (c)  A member other than a legislative member is entitled to
 reimbursement from funds appropriated to the committee.
 Sec. 42.454.  COMMITTEE STAFF. (a) The co-chairs of the
 committee may appoint a committee director and staff to support the
 work of the committee.
 (b)  The director and staff members are employees of the
 Texas Legislative Council and shall be paid from funds appropriated
 to the council for the committee's operations.
 (c)  The committee may contract with one or more consultants
 if necessary to enable the committee to perform its duties under
 this subchapter.
 Sec. 42.455.  CONDUCT OF REVIEW. (a) The committee shall
 conduct public hearings throughout the state and solicit testimony
 about the weights, allotments, and adjustments under the finance
 system from parents of public school children and other interested
 persons. At least one public hearing must be held at a public
 school during a time that public school students are able to attend
 the hearing.
 (b)  The commissioner shall ensure that the committee has
 access to any documentation and agency personnel the committee
 requests.
 (c)  The Legislative Budget Board, the Texas Education
 Agency, the comptroller, the state auditor, and any other state
 agency, official, or personnel shall cooperate with the committee
 in carrying out its duties under this subchapter.
 (d)  The committee may coordinate the review under this
 subchapter with any other legislative study, as appropriate. To
 the extent the review duplicates the study of funding elements
 otherwise required by Section 42.007, the review replaces that
 study.
 Sec. 42.4551.  ADDITIONAL DUTIES. (a) The committee shall
 also review and identify specific short term goals that will assist
 the state in meeting the objectives and goals of public education.
 The review under this section shall include recommendations
 regarding:
 (1)  methods to close the achievement gap and define
 and measure readiness for college and the workforce;
 (2) revisions to the public accountability system; and
 (3)  methods for promoting efficient and effective
 support structures for public schools.
 (b)  The commissioner of higher education serves as an ex
 officio member of the committee for purposes of this section.
 Sec. 42.456.  REPORT. (a) Not later than December 1, 2010,
 the committee shall provide a report that:
 (1)  states the findings of the review conducted under
 this subchapter; and
 (2)  includes any recommendations for statutory
 changes.
 (b)  The report must be approved by a majority of the
 committee members. A member who disagrees with any part of the
 report may attach a dissenting statement to the report.
 Sec. 42.457.  EXPIRATION. This subchapter expires January
 11, 2011.
 SECTION 66. Section 44.004, Education Code, is amended by
 amending Subsection (h) and adding Subsection (j) to read as
 follows:
 (h) Notwithstanding any other provision of this section, a
 school district with a fiscal year beginning July 1 may use the
 certified estimate of the taxable value of district property
 required by Section 26.01(e) [26.01(d)], Tax Code, in preparing the
 notice required by this section if the district does not receive on
 or before June 7 the certified appraisal roll for the district
 required by Section 26.01(a), Tax Code.
 (j)  Notwithstanding Subsections (g), (h), and (i), a school
 district may adopt a budget after the district adopts a tax rate for
 the tax year in which the fiscal year covered by the budget begins
 if the district elects to adopt a tax rate before receiving the
 certified appraisal roll for the district as provided by Section
 26.05(g), Tax Code. If a school district elects to adopt a tax rate
 before adopting a budget, the district must publish notice and hold
 a meeting for the purpose of discussing the proposed tax rate as
 provided by this section. Following adoption of the tax rate, the
 district must publish notice and hold another public meeting before
 the district may adopt a budget. The comptroller shall prescribe
 the language and format to be used in the notices. The school
 district may use the certified estimate of taxable value in
 preparing a notice under this subsection.
 SECTION 67. Subchapter Z, Chapter 44, Education Code, is
 amended by adding Section 44.908 to read as follows:
 Sec. 44.908.  EXPENDITURE OF LOCAL FUNDS. (a) A school
 district shall adopt a policy governing the expenditure of local
 funds from vending machines, rentals, gate receipts, or other local
 sources of revenue over which the district has direct control.
 (b) A policy under this section must:
 (1)  require discretionary expenditures of local funds
 to be related to the district's educational purpose and provide a
 commensurate benefit to the district or its students; and
 (2)  meet the standards of Section 52, Article III,
 Texas Constitution, regarding expenditure of public funds.
 SECTION 68. Section 45.052, Education Code, is amended to
 read as follows:
 Sec. 45.052. GUARANTEE. (a) On approval by the
 commissioner, bonds issued under Subchapter A, including refunding
 bonds, are guaranteed by the corpus and income of the permanent
 school fund.
 (b)  Notwithstanding any amendment of this subchapter or
 other law, the guarantee under this subchapter of school district
 bonds remains in effect until the date those bonds mature or are
 defeased in accordance with state law.
 SECTION 68A. Sections 45.053(a), (b), and (c), Education
 Code, are amended to read as follows:
 (a) Except as provided by Subsection (d), the commissioner
 may not approve bonds for guarantee under this subchapter if the
 approval would result in the total amount of outstanding guaranteed
 bonds under this subchapter exceeding an amount equal to 2-1/2
 times the cost value of the permanent school fund, as estimated by
 the board and certified by the state auditor.
 (b) Each year, the state auditor shall analyze the status of
 guaranteed bonds under this subchapter as compared to the cost
 value of the permanent school fund. Based on that analysis, the
 state auditor shall certify whether the amount of bonds guaranteed
 under this subchapter is within the limit prescribed by this
 section.
 (c) The commissioner shall prepare and the board shall adopt
 an annual report on the status of the guaranteed bond program under
 this subchapter.
 SECTION 69. Subchapter C, Chapter 45, Education Code, is
 amended by adding Section 45.0531 to read as follows:
 Sec. 45.0531.  ADDITIONAL LIMITATION: RESERVATION OF
 PERCENTAGE OF PERMANENT SCHOOL FUND VALUE. (a) In addition to the
 limitation on the approval of bonds for guarantee under Section
 45.053, the board by rule may establish a percentage of the cost
 value of the permanent school fund to be reserved from use in
 guaranteeing bonds under this subchapter.
 (b)  If the board has reserved a portion of the permanent
 school fund under Subsection (a), each year, the state auditor
 shall analyze the status of the reserved portion compared to the
 cost value of the permanent school fund.  Based on that analysis,
 the state auditor shall certify whether the portion of the
 permanent school fund reserved from use in guaranteeing bonds under
 this subchapter satisfies the reserve percentage established.
 (c)  If the board has reserved a portion of the permanent
 school fund under Subsection (a), the board shall at least annually
 consider whether to change the reserve percentage established to
 ensure that the reserve percentage allows compliance with federal
 law and regulations and serves to enable bonds guaranteed under
 this subchapter to receive the highest available credit rating, as
 determined by the board.
 (d)  This section may not be construed in a manner that
 impairs, limits, or removes the guarantee of bonds that have been
 approved by the commissioner.
 SECTION 70. Section 45.055, Education Code, is amended to
 read as follows:
 Sec. 45.055. APPLICATION FOR GUARANTEE. (a) A school
 district seeking [the] guarantee of eligible bonds under this
 subchapter shall apply to the commissioner using a form adopted by
 the commissioner for the purpose. The commissioner may adopt a
 single form on which a district seeking guarantee or credit
 enhancement of eligible bonds may apply simultaneously first for
 guarantee under this subchapter and then, if that guarantee is
 rejected, for credit enhancement under Subchapter I.
 (b) An [The] application under Subsection (a) must include:
 (1) the name of the school district and the principal
 amount of the bonds to be issued;
 (2) the name and address of the district's paying agent
 for those bonds; and
 (3) the maturity schedule, estimated interest rate,
 and date of the bonds.
 (c) An [The] application under Subsection (a) must be
 accompanied by a fee set by rule of the board in an amount designed
 to cover the costs of administering the programs to provide the
 guarantee or credit enhancement of eligible bonds [program].
 SECTION 71. Subsection (b), Section 45.056, Education Code,
 is amended to read as follows:
 (b) If following the investigation the commissioner is
 satisfied that the school district's bonds should be guaranteed
 under this subchapter or provided credit enhancement under
 Subchapter I, as applicable, the commissioner shall endorse the
 bonds.
 SECTION 72. Section 45.061, Education Code, is amended by
 adding Subsections (c) and (d) to read as follows:
 (c)  The commissioner may order a school district to set an
 ad valorem tax rate capable of producing an amount of revenue
 sufficient to enable the district to:
 (1) provide reimbursement under this section; and
 (2)  pay the principal of and interest on district
 bonds as the principal and interest become due.
 (d)  If a school district fails to comply with the
 commissioner's order under Subsection (c), the commissioner may
 impose any sanction on the district authorized to be imposed on a
 district under Subchapter G, Chapter 39, including appointment of a
 board of managers or annexation to another district, regardless of
 the district's accreditation status or the duration of a particular
 accreditation status.
 SECTION 73. Subsection (a), Section 45.062, Education Code,
 is amended to read as follows:
 (a) If a total of two or more payments [from the permanent
 school fund] are made under this subchapter or Subchapter I on the
 [guaranteed] bonds of a school district and the commissioner
 determines that the school district is acting in bad faith under the
 guarantee program under this subchapter or the credit enhancement
 program under Subchapter I, the commissioner may request the
 attorney general to institute appropriate legal action to compel
 the school district and its officers, agents, and employees to
 comply with the duties required of them by law in regard to the
 bonds.
 SECTION 74. Section 45.109, Education Code, is amended by
 adding Subsections (a-1) and (a-2) to read as follows:
 (a-1)  An independent school district and an institution of
 higher education, as defined by Section 61.003, located wholly or
 partially in the boundaries of the county in which the district is
 located may contract for the district to contribute district
 resources to pay a portion of the costs of the design or
 construction of an instructional facility or a stadium or other
 athletic facilities owned by or under the control of the
 institution of higher education. A district may contribute
 district resources under this subsection only if the district and
 the institution of higher education enter into a written agreement
 authorizing the district to use that facility.
 (a-2)  One or more independent school districts and an
 institution of higher education, as defined by Section 61.003, may
 contract for the district to contribute district resources to pay a
 portion of the costs of the design, improvement, or construction of
 an instructional facility owned by or under the control of the
 institution of higher education. A district may contribute
 district resources under this subsection only if the district and
 the institution of higher education enter into a written agreement
 authorizing the district to use that facility, including
 authorizing the enrollment of district students in courses offered
 at that facility.
 SECTION 75. Chapter 45, Education Code, is amended by
 adding Subchapters I and J to read as follows:
 SUBCHAPTER I. INTERCEPT PROGRAM TO PROVIDE CREDIT ENHANCEMENT FOR
 BONDS
 Sec. 45.251. DEFINITIONS. In this subchapter:
 (1) "Board" means the State Board of Education.
 (2)  "Foundation School Program" means the program
 established under Chapters 41, 42, and 46, or any successor program
 of state appropriated funding for school districts in this state.
 (3)  "Paying agent" means the financial institution
 that is designated by a school district as the district's agent for
 the payment of the principal of and interest on bonds for which
 credit enhancement is provided under this subchapter.
 Sec. 45.252.  INTERCEPT CREDIT ENHANCEMENT PROGRAM. (a) If
 a school district's application for guarantee of district bonds by
 the corpus and income of the permanent school fund as provided by
 Subchapter C is rejected, the district may apply under this
 subchapter for credit enhancement of bonds described by Section
 45.054 by money appropriated for the Foundation School Program,
 other than money that is appropriated to school districts
 specifically:
 (1) as required under the Texas Constitution; or
 (2) for assistance in paying debt service.
 (b)  The same school district bonds may not benefit under
 both Subchapter C and this subchapter.
 (c)  Notwithstanding any amendment of this subchapter or
 other law, the credit enhancement provided under this subchapter
 for school district bonds remains in effect until the date those
 bonds mature or are defeased in accordance with state law.
 Sec. 45.253.  LIMITATION ON INTERCEPT CREDIT ENHANCEMENT.
 (a) In each month of each fiscal year, the commissioner shall
 determine the amount of funds available to make payments under this
 subchapter from the Foundation School Program through the end of
 the fiscal year and the amounts due under this code to public
 schools from the Foundation School Program through the end of the
 fiscal year. The commissioner may revise a determination under
 this subsection during the fiscal year as appropriate.
 (b)  The commissioner may not endorse particular bonds for
 credit enhancement under this subchapter until the commissioner
 has:
 (1)  made the determinations required under Subsection
 (a); and
 (2)  determined that the endorsement will not cause the
 projected debt service coming due during the remainder of the
 fiscal year for bonds provided credit enhancement under this
 subchapter to exceed the lesser of:
 (A)  one-half of the amount of funds due to public
 schools from the Foundation School Program for the remainder of the
 fiscal year; or
 (B)  one-half of the amount of funds anticipated
 to be on hand in the Foundation School Program to make payments for
 the remainder of the fiscal year.
 (c)  The commissioner may not endorse particular bonds for
 credit enhancement under this subchapter unless the commissioner
 has determined that the maximum annual debt service on the bonds
 during any state fiscal year will not exceed the lesser of:
 (1)  one-half of the amount of funds due to public
 schools from the Foundation School Program for the current fiscal
 year; or
 (2)  one-half of the amount of funds anticipated to be
 on hand in the Foundation School Program to make payments for the
 current fiscal year.
 Sec. 45.254.  ELIGIBILITY. To be eligible for approval by
 the commissioner for credit enhancement under this subchapter:
 (1)  bonds must be issued in the manner provided by
 Section 45.054; and
 (2)  payments of all of the principal of the bonds must
 be scheduled during the first six months of the state fiscal year.
 Sec. 45.2541.  INTERCEPT OF FOUNDATION SCHOOL PROGRAM
 APPROPRIATIONS AS CREDIT ENHANCEMENT. (a) Money appropriated for
 the Foundation School Program that may be used for the purpose under
 this subchapter and under any other law, rule, or regulation shall
 be used to provide credit enhancement for eligible bonds as
 provided by this subchapter, the General Appropriations Act, and
 board rule if using the permanent school fund to guarantee
 particular bonds would result in:
 (1)  a total amount of outstanding bonds guaranteed by
 the permanent school fund exceeding the amount authorized under:
 (A) Section 45.053; or
 (B) federal law or regulations; or
 (2)  the use of a portion of the cost value of the
 permanent school fund reserved under Section 45.0531, as determined
 by the board.
 (b)  If Foundation School Program appropriations are not
 sufficient in any year to pay principal or interest that becomes due
 on bonds for which credit enhancement is provided under this
 subchapter, the payment shall be made from the following year's
 Foundation School Program appropriations that may be used for the
 purpose under this subchapter before those appropriations are used
 for any other Foundation School Program purpose.
 Sec. 45.255.  APPLICATION FOR CREDIT ENHANCEMENT. (a) A
 school district seeking credit enhancement of eligible bonds under
 this subchapter shall apply to the commissioner using a form
 adopted by the commissioner for the purpose. The commissioner may
 adopt a single form on which a district seeking guarantee or credit
 enhancement of eligible bonds may apply simultaneously first for a
 guarantee under Subchapter C and then, if that guarantee is
 rejected, for credit enhancement under this subchapter.
 (b) An application under Subsection (a) must:
 (1)  include the information required by Section
 45.055(b); and
 (2)  be accompanied by a fee set by board rule in an
 amount designed to cover the costs of administering the programs to
 provide the guarantee or credit enhancement of eligible bonds.
 Sec. 45.256.  INVESTIGATION. (a) Following receipt of an
 application under Section 45.255, the commissioner shall conduct an
 investigation of the applicant school district as provided for an
 investigation under Section 45.056(a).
 (b)  If following the investigation under Subsection (a) the
 commissioner is satisfied that the school district's bonds should
 be guaranteed under Subchapter C or provided credit enhancement
 under this subchapter, as applicable, the commissioner shall
 endorse the bonds.
 Sec. 45.257.  CREDIT ENHANCEMENT ENDORSEMENT. (a) The
 commissioner shall endorse bonds approved for credit enhancement
 under this subchapter in substantially the same manner provided
 under Section 45.057 for endorsing bonds approved under Subchapter
 C.
 (b)  The credit enhancement is not effective unless the
 attorney general approves the bonds under Section 45.005.
 Sec. 45.258.  NOTICE OF FAILURE OR INABILITY TO PAY.
 Immediately following a determination that a school district will
 be or is unable to pay maturing or matured principal or interest on
 a bond for which credit enhancement is provided under this
 subchapter, but not later than the 10th day before maturity date,
 the school district shall notify the commissioner.
 Sec. 45.259.  PAYMENT FROM INTERCEPTED FUNDS.
 (a)  Immediately following receipt of notice under Section 45.258,
 the commissioner shall instruct the comptroller to transfer to the
 district's paying agent from appropriations to the Foundation
 School Program that may be used for the purpose under Section 45.252
 and other law the amount necessary to pay the maturing or matured
 principal or interest.
 (b)  Immediately following receipt of the funds for payment
 of the principal or interest, the paying agent shall pay the amount
 due.
 (c)  The procedures prescribed by Subsections (a) and (b)
 apply to each payment of principal or interest on bonds as the
 payment becomes due until the bonds mature or are defeased in
 accordance with state law.
 (d)  If money appropriated for the Foundation School Program
 is used for purposes of this subchapter and as a result there is
 insufficient money to fully fund the Foundation School Program, the
 commissioner shall, to the extent necessary, reduce each school
 district's foundation school fund allocations, other than any
 portion appropriated from the available school fund, in the same
 manner provided by Section 42.253(h) for a case in which school
 district entitlements exceed the amount appropriated. The
 following fiscal year, a district's entitlement under Section
 42.253 is increased by an amount equal to the reduction under this
 subsection.
 (e)  A payment made under this section by the state on behalf
 of a school district of funds the district owes on bonds for which
 credit enhancement is provided under this subchapter creates a
 repayment obligation of the district to the state regardless of the
 maturity date of, or any payment of interest on, the bonds.
 (f)  This section does not create a debt of the state under
 the Texas Constitution or, except to the extent provided by this
 subchapter, create a payment obligation.
 Sec. 45.260.  BONDS NOT ACCELERATED ON FAILURE TO PAY. If a
 school district fails to pay principal or interest on a bond for
 which credit enhancement is provided under this subchapter when the
 amount matures, other amounts not yet mature are not accelerated
 and do not become due by virtue of the district's failure to pay
 amounts matured.
 Sec. 45.261.  REIMBURSEMENT OF FOUNDATION SCHOOL PROGRAM.
 (a) If the commissioner orders payment from the money appropriated
 to the Foundation School Program on behalf of a school district that
 is not required to reduce its wealth per student under Chapter 41,
 the commissioner shall direct the comptroller to withhold the
 amount paid from the first state money payable to the district. If
 the commissioner orders payment from the money appropriated to the
 Foundation School Program on behalf of a school district that is
 required to reduce its wealth per student under Chapter 41, the
 commissioner shall increase amounts due from the district under
 that chapter in a total amount equal to the amount of payments made
 on behalf of the district under this subchapter. Amounts withheld
 or received under this subsection shall be used for the Foundation
 School Program.
 (b)  In accordance with commissioner rules, the commissioner
 may authorize reimbursement of the Foundation School Program in a
 manner other than that provided by this section.
 (c)  The commissioner may order a school district to set an
 ad valorem tax rate capable of producing an amount of revenue
 sufficient to enable the district to:
 (1) provide reimbursement under this section; and
 (2)  pay the remaining principal of and interest on the
 bonds as the principal and interest become due.
 (d)  If a school district fails to comply with the
 commissioner's order under Subsection (c), the commissioner may
 impose any sanction on the district authorized to be imposed on a
 district under Subchapter G, Chapter 39, including appointment of a
 board of managers or annexation to another district, regardless of
 the district's accreditation status or the duration of a particular
 accreditation status.
 (e)  Any part of a school district's tax rate attributable to
 producing revenue for purposes of Subsection (c)(1) is considered
 part of the district's:
 (1)  current debt rate for purposes of computing a
 rollback tax rate under Section 26.08, Tax Code; and
 (2) interest and sinking fund tax rate.
 (f)  On reimbursement by a school district as required by
 this section, the commissioner shall pay to the district any amount
 withheld under this section.
 Sec. 45.262.  REPEATED FAILURE TO PAY. (a) If a total of two
 or more payments are made under Subchapter C or this subchapter on
 the bonds of a school district and the commissioner determines that
 the district is acting in bad faith under the guarantee program
 under Subchapter C or the credit enhancement program under this
 subchapter, the commissioner may request the attorney general to
 institute appropriate legal action to compel the district and the
 district's officers, agents, and employees to comply with the
 duties required of them by law in regard to the bonds.
 (b)  Jurisdiction of proceedings under this section is in
 district court in Travis County.
 Sec. 45.263.  RULES. (a) The commissioner shall adopt rules
 necessary for the administration of the bond credit enhancement
 program under this subchapter.
 (b)  In adopting rules under Subsection (a), the
 commissioner shall establish an annual deadline by which a school
 district must pay the debt service on bonds for which credit
 enhancement is provided under this subchapter. The deadline
 established may not be later than the 10th day before the date
 specified under Section 42.259 for payment to school districts of
 the final Foundation School Program installment for a state fiscal
 year.
 SUBCHAPTER J. OPEN-ENROLLMENT CHARTER SCHOOL FACILITIES CREDIT
 ENHANCEMENT PROGRAM
 Sec. 45.301. DEFINITIONS. In this subchapter:
 (1)  "Charter holder" has the meaning assigned by
 Section 12.1012.
 (2)  "Program" means the open-enrollment charter
 school facilities credit enhancement program established under
 this subchapter.
 Sec. 45.302.  ESTABLISHMENT OF PROGRAM. (a) The
 commissioner by rule may establish an open-enrollment charter
 school facilities credit enhancement program to assist charter
 holders in obtaining financing for the purchase, repair, or
 renovation of real property, including improvements to real
 property, for facilities of open-enrollment charter schools.
 (b)  The commissioner may adopt a structure and procedures
 for the program that are substantially similar to the structure and
 procedures for the credit enhancement program for school district
 bonds under Subchapter I.
 Sec. 45.303.  LIMITATION ON PARTICIPATION; MINIMUM
 REQUIREMENTS FOR DEBT SERVICE RESERVE. In adopting rules under
 Section 45.302, the commissioner may:
 (1)  limit participation in the program to charter
 holders who hold charters for open-enrollment charter schools that
 meet standards established by the commissioner, including
 standards for financial stability, compliance with applicable
 state and federal program requirements, and student academic
 performance; and
 (2)  impose minimum requirements for a debt service
 reserve to secure repayment of obligations for which credit
 enhancement is provided under this subchapter.
 Sec. 45.304.  ALLOCATION OF PORTION OF FOUNDATION SCHOOL
 PROGRAM FUNDS FOR CREDIT ENHANCEMENT. (a) The commissioner may
 allocate not more than one percent of the amount appropriated for
 the Foundation School Program for purposes of the program under
 this subchapter.
 (b)  The funds allocated under this section may not be
 considered available for purposes of any other credit enhancement
 program.
 (c)  Only those Foundation School Program funds allocated
 under this section may be committed to the program under this
 subchapter.
 Sec. 45.305.  PRIVATE MATCHING FUNDS REQUIRED; USE OF OTHER
 STATE FUNDS. (a) The commissioner may not implement the program
 unless private funds in an amount at least equal to the amount of
 state funds allocated under Section 45.304 are obligated to the
 program for at least the first 10 years of the term of obligations
 for which credit enhancement is provided under the program.
 (b)  The commissioner may use state funds allocated under
 Section 45.304 to pay any amount due for credit enhancement under
 the program and, subject to the terms of the applicable private
 credit obligation agreement, provide for payment of private funds
 to the Foundation School Program in an amount equal to at least
 one-half of the amount of the state funds paid. The commissioner
 may also use any other state funds available for the purpose to make
 payments under this subchapter or to reimburse the Foundation
 School Program for payments made under this subchapter from
 Foundation School Program funds.
 Sec. 45.306.  REPAYMENT; LIEN. (a) If a charter holder on
 behalf of which the state makes a payment under the program does not
 immediately repay the Foundation School Program the amount of the
 payment, the commissioner shall withhold any funds due from the
 state to the charter holder as necessary to recover the total amount
 of state and private funds paid on behalf of the charter holder
 under the program.
 (b)  If a charter holder is for any reason, including
 revocation or surrender of a charter or bankruptcy, unable to repay
 any amount due under this subchapter, any loss of funds shall be
 shared equally between the Foundation School Program and the person
 providing the private funds obligated for credit enhancement under
 this subchapter.
 (c)  A charter holder for which credit enhancement is
 provided under this subchapter to purchase, repair, or renovate
 real property for open-enrollment charter school facilities must
 agree to execute a lien on that real property in a form prescribed
 by the commissioner and approved by the attorney general to secure
 repayment of all amounts due to the state from the charter holder,
 including reimbursement of any private funds paid on behalf of an
 open-enrollment charter school under this subchapter.
 (d)  A lien under this section must be filed in the real
 property records of each county in which the real property is
 located. A lien under this section has priority over any other
 claim against the real property except a lien granted to the holders
 of obligations issued to finance the acquisition of the real
 property and any security interest or lien existing before credit
 enhancement is provided under this subchapter.
 (e)  The commissioner shall notify a charter holder of any
 amount determined to be due to the state, including federal funds.
 If the full amount due to the state has not been repaid or recovered
 by the commissioner from other funds due to the charter holder
 within the current and subsequent school year, the commissioner may
 request the attorney general to file an action to foreclose on a
 lien under this section. Funds recovered from foreclosure of a lien
 under this section shall be credited first to any security interest
 or lien with priority over the lien under this section, then to the
 charter holder's obligation under this section, and then to any
 other program to which the funds are due.
 (f) Venue for a suit under this section is in Travis County.
 Sec. 45.307.  STATUS OF PROGRAM. (a) The program is
 separate from and does not create any claim to the credit
 enhancement program for school district bonds under Subchapter I.
 (b)  This subchapter does not create a debt of the state
 under the Texas Constitution or, except to the extent provided by
 this subchapter, create a payment obligation.
 Sec. 45.308.  RULES. If the commissioner establishes a
 program under this subchapter, the commissioner shall adopt rules
 to administer the program.
 SECTION 76. Section 46.033, Education Code, is amended to
 read as follows:
 Sec. 46.033. ELIGIBLE BONDS. Bonds, including bonds
 issued under Section 45.006, are eligible to be paid with state and
 local funds under this subchapter if:
 (1) the district made payments on the bonds during the
 final [2006-2007] school year of the preceding state fiscal
 biennium or taxes levied to pay the principal of and interest on the
 bonds were included in the district's audited debt service
 collections for that school year; and
 (2) the district does not receive state assistance
 under Subchapter A for payment of the principal and interest on the
 bonds.
 SECTION 77. Section 46.034(c), Education Code, is amended
 to read as follows:
 (c) If the amount required to pay the principal of and
 interest on eligible bonds in a school year is less than the amount
 of payments made by the district on the bonds during the final
 [2006-2007] school year of the preceding state fiscal biennium or
 the district's audited debt service collections for that school
 year, the district may not receive aid in excess of the amount that,
 when added to the district's local revenue for the school year,
 equals the amount required to pay the principal of and interest on
 the bonds.
 SECTION 78. Section 3.005, Election Code, is amended by
 amending Subsection (a) and adding Subsection (d) to read as
 follows:
 (a) Except as provided by Subsections [Subsection] (c) and
 (d), an election ordered by an authority of a political subdivision
 shall be ordered not later than the 62nd day before election day.
 (d)  An election under Section 26.08, Tax Code, to ratify a
 tax rate adopted by the governing body of a school district under
 Section 26.05(g) of that code shall be ordered not later than the
 30th day before election day.
 SECTION 79. Section 4.008, Election Code, is amended to
 read as follows:
 Sec. 4.008. NOTICE TO COUNTY CLERK. (a) Except as provided
 by Subsection (b), the [The] governing body of a political
 subdivision, other than a county, that orders an election shall
 deliver notice of the election to the county clerk of each county in
 which the political subdivision is located not later than the 60th
 day before election day.
 (b)  The governing body of a school district that orders an
 election under Section 26.08, Tax Code, to ratify an ad valorem tax
 rate adopted by the governing body under Section 26.05(g) of that
 code shall deliver notice of the election to the county clerk of
 each county in which the school district is located not later than
 the 30th day before election day.
 SECTION 80. Sections 403.302(d), (i), and (j), Government
 Code, are amended to read as follows:
 (d) For the purposes of this section, "taxable value" means
 the market value of all taxable property less:
 (1) the total dollar amount of any residence homestead
 exemptions lawfully granted under Section 11.13(b) or (c), Tax
 Code, in the year that is the subject of the study for each school
 district;
 (2) one-half of the total dollar amount of any
 residence homestead exemptions granted under Section 11.13(n), Tax
 Code, in the year that is the subject of the study for each school
 district;
 (3) the total dollar amount of any exemptions granted
 before May 31, 1993, within a reinvestment zone under agreements
 authorized by Chapter 312, Tax Code;
 (4) subject to Subsection (e), the total dollar amount
 of any captured appraised value of property that:
 (A) is within a reinvestment zone created on or
 before May 31, 1999, or is proposed to be included within the
 boundaries of a reinvestment zone as the boundaries of the zone and
 the proposed portion of tax increment paid into the tax increment
 fund by a school district are described in a written notification
 provided by the municipality or the board of directors of the zone
 to the governing bodies of the other taxing units in the manner
 provided by Section 311.003(e), Tax Code, before May 31, 1999, and
 within the boundaries of the zone as those boundaries existed on
 September 1, 1999, including subsequent improvements to the
 property regardless of when made;
 (B) generates taxes paid into a tax increment
 fund created under Chapter 311, Tax Code, under a reinvestment zone
 financing plan approved under Section 311.011(d), Tax Code, on or
 before September 1, 1999; and
 (C) is eligible for tax increment financing under
 Chapter 311, Tax Code;
 (5) [for a school district for which a deduction from
 taxable value is made under Subdivision (4), an amount equal to the
 taxable value required to generate revenue when taxed at the school
 district's current tax rate in an amount that, when added to the
 taxes of the district paid into a tax increment fund as described by
 Subdivision (4)(B), is equal to the total amount of taxes the
 district would have paid into the tax increment fund if the district
 levied taxes at the rate the district levied in 2005;
 [(6)] the total dollar amount of any captured
 appraised value of property that:
 (A) is within a reinvestment zone:
 (i) created on or before December 31, 2008,
 by a municipality with a population of less than 18,000; and
 (ii) the project plan for which includes
 the alteration, remodeling, repair, or reconstruction of a
 structure that is included on the National Register of Historic
 Places and requires that a portion of the tax increment of the zone
 be used for the improvement or construction of related facilities
 or for affordable housing;
 (B) generates school district taxes that are paid
 into a tax increment fund created under Chapter 311, Tax Code; and
 (C) is eligible for tax increment financing under
 Chapter 311, Tax Code;
 (6) [(7)] the total dollar amount of any exemptions
 granted under Section 11.251 or 11.253, Tax Code;
 (7) [(8)] the difference between the comptroller's
 estimate of the market value and the productivity value of land that
 qualifies for appraisal on the basis of its productive capacity,
 except that the productivity value estimated by the comptroller may
 not exceed the fair market value of the land;
 (8) [(9)] the portion of the appraised value of
 residence homesteads of individuals who receive a tax limitation
 under Section 11.26, Tax Code, on which school district taxes are
 not imposed in the year that is the subject of the study, calculated
 as if the residence homesteads were appraised at the full value
 required by law;
 (9) [(10)] a portion of the market value of property
 not otherwise fully taxable by the district at market value because
 of:
 (A) action required by statute or the
 constitution of this state that, if the tax rate adopted by the
 district is applied to it, produces an amount equal to the
 difference between the tax that the district would have imposed on
 the property if the property were fully taxable at market value and
 the tax that the district is actually authorized to impose on the
 property, if this subsection does not otherwise require that
 portion to be deducted; or
 (B) action taken by the district under Subchapter
 B or C, Chapter 313, Tax Code;
 (10) [(11)] the market value of all tangible personal
 property, other than manufactured homes, owned by a family or
 individual and not held or used for the production of income;
 (11) [(12)] the appraised value of property the
 collection of delinquent taxes on which is deferred under Section
 33.06, Tax Code;
 (12) [(13)] the portion of the appraised value of
 property the collection of delinquent taxes on which is deferred
 under Section 33.065, Tax Code; and
 (13) [(14)] the amount by which the market value of a
 residence homestead to which Section 23.23, Tax Code, applies
 exceeds the appraised value of that property as calculated under
 that section.
 (i) If the comptroller determines in the annual study that
 the market value of property in a school district as determined by
 the appraisal district that appraises property for the school
 district, less the total of the amounts and values listed in
 Subsection (d) as determined by that appraisal district, is valid,
 the comptroller, in determining the taxable value of property in
 the school district under Subsection (d), shall for purposes of
 Subsection (d)(13) [(d)(14)] subtract from the market value as
 determined by the appraisal district of residence homesteads to
 which Section 23.23, Tax Code, applies the amount by which that
 amount exceeds the appraised value of those properties as
 calculated by the appraisal district under Section 23.23, Tax Code.
 If the comptroller determines in the annual study that the market
 value of property in a school district as determined by the
 appraisal district that appraises property for the school district,
 less the total of the amounts and values listed in Subsection (d) as
 determined by that appraisal district, is not valid, the
 comptroller, in determining the taxable value of property in the
 school district under Subsection (d), shall for purposes of
 Subsection (d)(13) [(d)(14)] subtract from the market value as
 estimated by the comptroller of residence homesteads to which
 Section 23.23, Tax Code, applies the amount by which that amount
 exceeds the appraised value of those properties as calculated by
 the appraisal district under Section 23.23, Tax Code.
 (j) For purposes of Chapter 42 [Section 42.2511], Education
 Code, the comptroller shall certify to the commissioner of
 education:
 (1) a final value for each school district computed on
 a residence homestead exemption under Section 1-b(c), Article VIII,
 Texas Constitution, of $5,000;
 (2) a final value for each school district computed
 on:
 (A) a residence homestead exemption under
 Section 1-b(c), Article VIII, Texas Constitution, of $15,000; and
 (B) the effect of the additional limitation on
 tax increases under Section 1-b(d), Article VIII, Texas
 Constitution, as proposed by H.J.R. No. 4, 75th Legislature,
 Regular Session, 1997; and
 (3) a final value for each school district computed on
 the effect of the reduction of the limitation on tax increases to
 reflect any reduction in the school district tax rate as provided by
 Section 11.26(a-1), (a-2), or (a-3), Tax Code, as applicable.
 SECTION 81. Section 822.201(b), Government Code, is amended
 to read as follows:
 (b) "Salary and wages" as used in Subsection (a) means:
 (1) normal periodic payments of money for service the
 right to which accrues on a regular basis in proportion to the
 service performed;
 (2) amounts by which the member's salary is reduced
 under a salary reduction agreement authorized by Chapter 610;
 (3) amounts that would otherwise qualify as salary and
 wages under Subdivision (1) but are not received directly by the
 member pursuant to a good faith, voluntary written salary reduction
 agreement in order to finance payments to a deferred compensation
 or tax sheltered annuity program specifically authorized by state
 law or to finance benefit options under a cafeteria plan qualifying
 under Section 125 of the Internal Revenue Code of 1986, if:
 (A) the program or benefit options are made
 available to all employees of the employer; and
 (B) the benefit options in the cafeteria plan are
 limited to one or more options that provide deferred compensation,
 group health and disability insurance, group term life insurance,
 dependent care assistance programs, or group legal services plans;
 (4) performance pay awarded to an employee by a school
 district as part of a total compensation plan approved by the board
 of trustees of the district and meeting the requirements of
 Subsection (e);
 (5) the benefit replacement pay a person earns under
 Subchapter H, Chapter 659, except as provided by Subsection (c);
 (6) stipends paid to teachers in accordance with
 Section 21.410, 21.411, 21.412, or 21.413, Education Code;
 (7) amounts by which the member's salary is reduced or
 that are deducted from the member's salary as authorized by
 Subchapter J, Chapter 659;
 (8) a merit salary increase made under Section 51.962,
 Education Code;
 (9) amounts received under the relevant parts of the
 [awards for student achievement program under Subchapter N, Chapter
 21, Education Code, the] educator excellence awards program under
 Subchapter O, Chapter 21, Education Code, or a mentoring program
 under Section 21.458, Education Code, that authorize [authorized]
 compensation for service; and
 (10) salary amounts designated as health care
 supplementation by an employee under Subchapter D, Chapter 22,
 Education Code.
 SECTION 82. Sections 825.405(a) and (b), Government Code,
 are amended to read as follows:
 (a) For members entitled to the minimum salary for certain
 school personnel under Section 21.402, Education Code, and for
 members who would have been entitled to the minimum salary for
 certain school personnel under former Section 16.056, Education
 Code, as that section existed on January 1, 1995, the employing
 district shall pay the state's contribution on the portion of the
 member's salary that exceeds the statutory minimum salary [or
 former statutory minimum, as applicable].
 (b) For purposes of this section:
 (1) [,] the statutory minimum salary for certain
 school personnel under Section 21.402, Education Code, is the
 salary provided by that section [Section 21.402 or the former
 Sections 16.056 and 16.058, Education Code,] multiplied by the cost
 of education adjustment applicable under Section 42.102, Education
 Code, to the district in which the member is employed; and
 (2)  the statutory minimum salary for members who would
 have been entitled to the minimum salary for certain school
 personnel under former Section 16.056, Education Code, as that
 section existed on January 1, 1995, is a minimum salary computed in
 the same manner as the minimum salary for certain school personnel
 under Section 21.402, Education Code, multiplied by the cost of
 education adjustment applicable under Section 42.102, Education
 Code, to the district in which the member is employed.
 SECTION 83. Section 1579.251(a), Insurance Code, is amended
 to read as follows:
 (a) The state shall assist employees of participating
 school districts and charter schools in the purchase of group
 health coverage under this chapter by providing for each covered
 employee the amount of $900 each state fiscal year or a greater
 amount as provided by the General Appropriations Act. The state
 contribution shall be distributed through the school finance
 formulas under Chapters 41 and 42, Education Code, and used by
 school districts and charter schools as provided by Section
 [Sections 42.2514 and] 42.260, Education Code.
 SECTION 84. Section 1581.053(b), Insurance Code, is amended
 to read as follows:
 (b) Notwithstanding Subsection (a), amounts a district or
 school is required to use to pay contributions under a group health
 coverage plan for district or school employees under Section
 [42.2514 or] 42.260, Education Code, other than amounts described
 by Section 42.260(c)(2)(B), are not used in computing whether the
 district or school complies with Section 1581.052.
 SECTION 85. Section 26.01(e), Tax Code, is amended to read
 as follows:
 (e) Except as provided by Subsection (f), not later than
 April 30 [by June 7], the chief appraiser shall prepare and certify
 to the assessor for each county, municipality, and school district
 participating in the appraisal district an estimate of the taxable
 value of property in that taxing unit. The chief appraiser shall
 assist each county, municipality, and school district in
 determining values of property in that taxing unit for the taxing
 unit's budgetary purposes.
 SECTION 86. Section 26.05, Tax Code, is amended by adding
 Subsection (g) to read as follows:
 (g)  Notwithstanding Subsection (a), the governing body of a
 school district that elects to adopt a tax rate before the adoption
 of a budget for the fiscal year that begins in the current tax year
 may adopt a tax rate for the current tax year before receipt of the
 certified appraisal roll for the school district if the chief
 appraiser of the appraisal district in which the school district
 participates has certified to the assessor for the school district
 an estimate of the taxable value of property in the school district
 as provided by Section 26.01(e). If a school district adopts a tax
 rate under this subsection, the effective tax rate and the rollback
 tax rate of the district shall be calculated based on the certified
 estimate of taxable value.
 SECTION 87. (a) Section 26.08, Tax Code, is amended by
 adding Subsection (p) to read as follows:
 (p)  Notwithstanding Subsections (i), (n), and (o), if for
 the preceding tax year a school district adopted a maintenance and
 operations tax rate that was less than the district's effective
 maintenance and operations tax rate for that preceding tax year,
 the rollback tax rate of the district for the current tax year is
 calculated as if the district adopted a maintenance and operations
 tax rate for the preceding tax year that was equal to the district's
 effective maintenance and operations tax rate for that preceding
 tax year.
 (b) Subsection (a), Section 45.001, Education Code, is
 amended to read as follows:
 (a) The governing board of an independent school district,
 including the city council or commission that has jurisdiction over
 a municipally controlled independent school district, the
 governing board of a rural high school district, and the
 commissioners court of a county, on behalf of each common school
 district under its jurisdiction, may:
 (1) issue bonds for:
 (A) the construction, acquisition, and equipment
 of school buildings in the district;
 (B) the acquisition of property or the
 refinancing of property financed under a contract entered under
 Subchapter A, Chapter 271, Local Government Code, regardless of
 whether payment obligations under the contract are due in the
 current year or a future year;
 (C) the purchase of the necessary sites for
 school buildings; and
 (D) the purchase of new school buses; and
 (2) may levy, pledge, assess, and collect annual ad
 valorem taxes sufficient to pay the principal of and interest on the
 bonds as or before the principal and interest become due, subject to
 Section 45.003.
 (c) The change in law made by this section applies to the ad
 valorem tax rate of a school district beginning with the 2009 tax
 year, except as provided by Subsection (d) of this section.
 (d) If the governing body of a school district adopted an ad
 valorem tax rate for the school district for the 2009 tax year
 before the effective date of this section, the change in law made by
 this section applies to the ad valorem tax rate of that school
 district beginning with the 2010 tax year, and the law in effect
 when the tax rate was adopted applies to the 2009 tax year with
 respect to that school district.
 (e) This section takes effect immediately if this Act
 receives a vote of two-thirds of all the members elected to each
 house, as provided by Section 39, Article III, Texas Constitution.
 If this Act does not receive the vote necessary for immediate
 effect, this section takes effect September 1, 2009.
 SECTION 88. Section 31.06(a), Tax Code, is amended to read
 as follows:
 (a) Except as provided by Section 31.061, taxes are payable
 only as provided by this section. A [in currency of the United
 States. However, a] collector shall [may] accept United States
 currency or a check or money order in payment of taxes[,] and shall
 [may] accept payment by credit card or electronic funds transfer.
 [A collector and a person may enter into an agreement under which
 the person pays taxes by electronic funds transfer. The agreement
 must:
 [(1) be in writing;
 [(2) be signed by the collector and the person; and
 [(3)     specify the means or format of payment by electronic
 funds transfer.]
 SECTION 89. Section 311.013(n), Tax Code, is amended to
 read as follows:
 (n) This subsection applies only to a school district whose
 taxable value computed under Section 403.302(d), Government Code,
 is reduced in accordance with Subdivision (4) [(5)] of that
 subsection. In addition to the amount otherwise required to be paid
 into the tax increment fund, the district shall pay into the fund an
 amount equal to the amount by which the amount of taxes the district
 would have been required to pay into the fund in the current year if
 the district levied taxes at the rate the district levied in 2005
 exceeds the amount the district is otherwise required to pay into
 the fund in the year of the reduction[, not to exceed the amount the
 school district realizes from the reduction in the school
 district's taxable value under Section 403.302(d)(5), Government
 Code].
 SECTION 90. (a) Section 5, Chapter 259 (H.B. 323), Acts of
 the 80th Legislature, Regular Session, 2007, is repealed.
 (b) Section 547.701(e), Transportation Code, as added by
 Chapter 259 (H.B. 323), Acts of the 80th Legislature, Regular
 Session, 2007, takes effect September 1, 2009.
 (c) Section 547.701, Transportation Code, is amended by
 adding Subsection (f) to read as follows:
 (f)  A school district is required to comply with Subsection
 (e) only to the extent that the Texas Education Agency pays or
 commits to pay the district for expenses incurred in complying with
 that subsection. The Texas Education Agency may make grants of
 appropriated money for the purpose of paying school districts under
 this subsection.
 SECTION 91. (a) The commissioner of education, in
 collaboration with the commissioner of higher education, shall
 conduct a study of dual credit programs and courses. The study must
 focus on the costs to the state, school district, community
 college, and student.
 (b) The commissioner of education, in collaboration with
 the commissioner of higher education, shall, based on the results
 of the study, make recommendations to the 82nd Legislature on how to
 provide all students with the opportunity to earn 12 semester
 credit hours of college credit before graduating from high school,
 how to ensure efficient use of state resources regarding dual
 credit programs and courses, and how to promote the ability of
 students to access quality dual credit courses.
 (c) The study required by this section may be consolidated
 with any other appropriate study regarding dual credit programs and
 courses.
 SECTION 92. The Texas Education Agency shall evaluate
 whether providers of different types of electronic courses offered
 through the state virtual school network established under Chapter
 30A, Education Code, should receive varying amounts of state
 funding based on the type of course provided. Not later than
 January 1, 2011, the agency shall submit a report of its findings
 and recommendations to the legislature.
 SECTION 93. The Texas Education Agency shall investigate
 the feasibility of making language acquisition courses available
 through the state virtual school network by obtaining state
 subscriptions or pursuing other possible means of access. Not
 later than January 1, 2011, the agency shall submit a report of its
 findings to the legislature. If the agency determines that it is
 feasible to make language acquisition courses available through the
 network, the report must include recommended mechanisms for
 ensuring progress towards language proficiency of students
 enrolled in those courses.
 SECTION 94. (a) The Texas Education Agency shall
 investigate the feasibility of creating one or more series of
 courses to be provided through the state virtual school network
 that focus on the educational needs of students in alternative
 education settings, including students in disciplinary alternative
 education programs under Section 37.008, Education Code, students
 in juvenile justice alternative education programs under Section
 37.011, Education Code, and students under the supervision of a
 juvenile probation department, the Texas Youth Commission, or the
 Texas Department of Criminal Justice. The series of courses to be
 investigated must include a series that would constitute a
 full-time educational program, a series that would offer only
 supplemental courses, and a series that would offer courses through
 which students could recover academic credit for courses in which
 the students were previously unsuccessful.
 (b) Not later than January 1, 2011, the agency shall submit
 a report of its findings to the legislature.
 SECTION 95. (a) Notwithstanding any other provision of
 this Act, Sections 12.1331, 19.007(g), 19.009(d-2), and
 21.402(c-1), Education Code, as added by this Act, are expressly
 contingent on a determination by the commissioner of education that
 payment of wage and salary increases and associated benefits
 required by or associated with those sections are allowable uses of
 federal funds received by school districts and open-enrollment
 charter schools under the American Recovery and Reinvestment Act of
 2009 (Pub. L. No. 111-5) and appropriated as part of the Foundation
 School Program. The commissioner may not make a determination
 under this subsection until the state's application to spend funds
 under the American Recovery and Reinvestment Act of 2009 has been
 approved by the United States government. The commissioner shall
 promptly notify school districts and open-enrollment charter
 schools of that determination. A determination by the commissioner
 under this subsection is final and may not be appealed.
 (b) A school district or open-enrollment charter school may
 enter into an employment contract or agreement that is contingent
 on a determination of the commissioner of education under
 Subsection (a) of this section.
 (c) The commissioner of education by rule may determine the
 applicable minimum salary schedule for use by school districts
 during the 2010-2011 state fiscal biennium following a
 determination under Subsection (a) of this section. If the
 commissioner determines that federal funds received by school
 districts and open-enrollment charter schools under the American
 Recovery and Reinvestment Act of 2009 may not be used for purposes
 of Sections 12.1331, 19.007(g), 19.009(d-2), and 21.402(c-1),
 Education Code, as added by this Act, those amendments have no
 effect in determining the salary required to be paid to an employee
 of a school district, including the Windham School District, or
 open-enrollment charter school.
 SECTION 96. (a) The commissioner of education shall
 determine the percentage of entitlement in the foundation school
 program or other program that represents the use of education
 stabilization funds received under the American Recovery and
 Reinvestment Act of 2009 (Pub. L. No. 111-5). In order to receive
 that percentage of total funds available to a school district or
 open-enrollment charter school under the foundation school program
 or other program, a district or school may be required to apply to
 the commissioner using an application developed by the
 commissioner. The commissioner may require an applicant to make
 assurances as to the use and monitoring of funds applied for or
 other requirements, consistent with the American Recovery and
 Reinvestment Act of 2009 (Pub. L. No. 111-5).
 (b) If any of the funds received by the state under the
 American Recovery and Reinvestment Act of 2009 (Pub. L. No. 111-5)
 that were appropriated for the purpose of funding the foundation
 school program or other program are determined to be unavailable
 temporarily or permanently for that purpose, the commissioner shall
 reduce the total amount of funds to which a district or school is
 entitled under Chapters 41 and 42, Education Code, or other
 programs proportional to the percentage determined under
 Subsection (a) of this section. A reduction in funding under this
 subsection does not increase the entitlement of a district or
 school in any subsequent year.
 (c) This section applies to funding provided under Chapters
 41 and 42, Education Code, as amended by this Act, for the 2009-2010
 and 2010-2011 school years. A decision by the commissioner under
 this section is final and may not be appealed.
 SECTION 97. For purposes of interpreting and implementing
 Section 825.406, Government Code, the Teacher Retirement System of
 Texas may not consider salaries of personnel paid in whole or in
 part from education stabilization funds distributed to school
 districts under the American Recovery and Reinvestment Act of 2009
 (Pub. L. No. 111-5) as being paid from federal funds.
 SECTION 98. The commissioner of education shall provide
 school districts with the maximum flexibility permitted under
 federal law in the administration of education stabilization funds
 distributed under the American Recovery and Reinvestment Act of
 2009 (Pub. L. No. 111-5).
 SECTION 99. Section 21.402(c-1), Education Code, as added
 by this Act, is not intended to require an increase in the second
 year of the biennium beginning September 1, 2009.
 SECTION 100. Section 42.2516(b)(3), Education Code, as
 amended by this Act, applies as if that subdivision were in effect
 in the state fiscal year beginning September 1, 2006, and any
 amounts due a district under that subdivision for the state fiscal
 years beginning September 1, 2006, September 1, 2007, and September
 1, 2008, shall be paid to the district in the state fiscal year
 beginning September 1, 2009, at the time payments are made to the
 district under Section 42.259(f), Education Code.
 SECTION 101. Section 44.004, Education Code, Sections 3.005
 and 4.008, Election Code, and Sections 26.01 and 26.05, Tax Code, as
 amended by this Act, apply only to ad valorem taxes imposed for a
 tax year beginning on or after the effective date of this Act.
 SECTION 102. To the extent of any conflict, this Act
 prevails over S.B. No. 1969, Acts of the 81st Legislature, Regular
 Session, 2009.
 SECTION 103. Section 29.018, Education Code, as added by
 this Act, does not make an appropriation. A provision in that
 section that creates a new governmental program, creates a new
 entitlement, or imposes a new duty on a governmental entity is not
 mandatory during a fiscal period for which the legislature has not
 made specific appropriation to implement that provision.
 SECTION 104. Section 44.908, Education Code, as added by
 this Act, applies to any expenditure of campus discretionary funds
 that occurs on or after September 1, 2009, regardless of the date on
 which the funds were raised.
 SECTION 105. (a) The following provisions of the Education
 Code are repealed:
 (1) Subchapter N, Chapter 21;
 (2) Sections 21.704(b) and 29.909;
 (3) Subsection (d), Section 30A.151;
 (4) Sections 30A.153 and 30A.154;
 (5) Sections 39.024(e), 39.114(c), and 42.103(e);
 (6) Sections 42.152(e), (f), (g), (h), (i), (j), (k),
 (l), (m), (n), (o), (p), (t), and (u); and
 (7) Sections 42.2511, 42.2512, and 42.2514.
 (b) Subchapter C, Chapter 1581, Insurance Code, is
 repealed.
 (c) Section 2, Chapter 1191 (H.B. 828), Acts of the 80th
 Legislature, Regular Session, 2007, is repealed.
 (d) Section 3, Chapter 1337 (S.B. 1788), Acts of the 80th
 Legislature, Regular Session, 2007, is repealed.
 (e) Section 40, Chapter 1504 (H.B. 6), Acts of the 77th
 Legislature, Regular Session, 2001, is repealed.
 SECTION 106. Except as otherwise provided by this Act, this
 Act takes effect September 1, 2009.
 ______________________________ ______________________________
 President of the Senate Speaker of the House
 I certify that H.B. No. 3646 was passed by the House on May
 12, 2009, by the following vote: Yeas 144, Nays 2, 1 present, not
 voting; that the House refused to concur in Senate amendments to
 H.B. No. 3646 on May 29, 2009, and requested the appointment of a
 conference committee to consider the differences between the two
 houses; that the House adopted the conference committee report on
 H.B. No. 3646 on May 31, 2009, by the following vote: Yeas 146,
 Nays 0, 1 present, not voting; and that the House adopted H.C.R. No.
 290 authorizing certain corrections in H.B. No. 3646 on June 1,
 2009, by the following vote: Yeas 145, Nays 0, 1 present, not
 voting.
 ______________________________
 Chief Clerk of the House
 I certify that H.B. No. 3646 was passed by the Senate, with
 amendments, on May 26, 2009, by the following vote: Yeas 31, Nays
 0; at the request of the House, the Senate appointed a conference
 committee to consider the differences between the two houses; that
 the Senate adopted the conference committee report on H.B. No. 3646
 on June 1, 2009, by the following vote: Yeas 31, Nays 0; and that
 the Senate adopted H.C.R. No. 290 authorizing certain corrections
 in H.B. No. 3646 on June 1, 2009, by the following vote: Yeas 31,
 Nays 0.
 ______________________________
 Secretary of the Senate
 APPROVED: __________________
 Date
 __________________
 Governor