Texas 2017 - 85th Regular

Texas Senate Bill SB2145 Compare Versions

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1	1	85R6487 CAE-F
2	2	By: Taylor of Galveston S.B. No. 2145
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the public school finance system.
8	8	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
9	9	ARTICLE 1. FOUNDATION SCHOOL PROGRAM
10	10	SECTION 1.01. The heading to Chapter 41, Education Code, is
11	11	amended to read as follows:
12	12	CHAPTER 41. FOUNDATION SCHOOL PROGRAM ADMINISTRATION [EQUALIZED
13	13	WEALTH LEVEL]
14	14	SECTION 1.02. Section 41.001, Education Code, is amended to
15	15	read as follows:
16	16	Sec. 41.001. DEFINITION [DEFINITIONS]. In this chapter,
17	17	weighted[:
18	18	[(1) "Equalized wealth level" means the wealth per
19	19	student provided by Section 41.002.
20	20	[(2) "Wealth per student" means the taxable value of
21	21	property, as determined under Subchapter M, Chapter 403, Government
22	22	Code, divided by the number of students in weighted average daily
23	23	attendance.
24	24	[(3) "Weighted] average daily attendance" has the
25	25	meaning assigned by Section 42.302.
26	26	SECTION 1.03. Section 42.004, Education Code, is
27	27	transferred to Subchapter A, Chapter 41, Education Code,
28	28	redesignated as Section 41.002, Education Code, and amended to read
29	29	as follows:
30	30	Sec. 41.002 [42.004]. ADMINISTRATION OF THE PROGRAM. (a)
31	31	The commissioner, in accordance with the rules of the State Board of
32	32	Education, shall take such action and require such reports
33	33	consistent with this chapter as may be necessary to implement and
34	34	administer the Foundation School Program.
35	35	(b) Except as provided by Subsection (c), the commissioner
36	36	may adopt rules as necessary to implement this chapter.
37	37	(c) The commissioner may not adopt any rule that allows a
38	38	district to retain state and local revenue under Sections
39	39	42.253(a)(2) and (3) in excess of the amount of the district's
40	40	entitlement under Section 42.253(a)(1).
41	41	SECTION 1.04. Section 42.003, Education Code, is
42	42	transferred to Subchapter A, Chapter 41, Education Code, and
43	43	redesignated as Section 41.003, Education Code, to read as follows:
44	44	Sec. 41.003 [42.003]. STUDENT ELIGIBILITY. (a) A student
45	45	is entitled to the benefits of the Foundation School Program if, on
46	46	September 1 of the school year, the student:
47	47	(1) is 5 years of age or older and under 21 years of age
48	48	and has not graduated from high school, or is at least 21 years of
49	49	age and under 26 years of age and has been admitted by a school
50	50	district to complete the requirements for a high school diploma; or
51	51	(2) is at least 19 years of age and under 26 years of
52	52	age and is enrolled in an adult high school diploma and industry
53	53	certification charter school pilot program under Section 29.259.
54	54	(b) A student to whom Subsection (a) does not apply is
55	55	entitled to the benefits of the Foundation School Program if the
56	56	student is enrolled in a prekindergarten class under Section 29.153
57	57	or Subchapter E-1, Chapter 29.
58	58	(c) A child may be enrolled in the first grade if the child
59	59	is at least six years of age at the beginning of the school year of
60	60	the district or has been enrolled in the first grade or has
61	61	completed kindergarten in the public schools in another state
62	62	before transferring to a public school in this state.
63	63	(d) Notwithstanding Subsection (a), a student younger than
64	64	five years of age is entitled to the benefits of the Foundation
65	65	School Program if:
66	66	(1) the student performs satisfactorily on the
67	67	assessment instrument administered under Section 39.023(a) to
68	68	students in the third grade; and
69	69	(2) the district has adopted a policy for admitting
70	70	students younger than five years of age.
71	71	SECTION 1.05. Sections 42.005, 42.0051, 42.0052, 42.006,
72	72	and 42.007, Education Code, are transferred to Subchapter A,
73	73	Chapter 41, Education Code, redesignated as Sections 41.004,
74	74	41.005, 41.006, 41.007, and 41.008, Education Code, and amended to
75	75	read as follows:
76	76	Sec. 41.004 [42.005]. AVERAGE DAILY ATTENDANCE. (a) In
77	77	this chapter, average daily attendance is:
78	78	(1) the quotient of the sum of attendance for each day
79	79	of the minimum number of days of instruction as described under
80	80	Section 25.081(a) divided by the minimum number of days of
81	81	instruction;
82	82	(2) for a district that operates under a flexible year
83	83	program under Section 29.0821, the quotient of the sum of
84	84	attendance for each actual day of instruction as permitted by
85	85	Section 29.0821(b)(1) divided by the number of actual days of
86	86	instruction as permitted by Section 29.0821(b)(1); or
87	87	(3) for a district that operates under a flexible
88	88	school day program under Section 29.0822, the average daily
89	89	attendance as calculated by the commissioner in accordance with
90	90	Sections 29.0822(d) and (d-1).
91	91	(b) A school district that experiences a decline of two
92	92	percent or more in average daily attendance shall be funded on the
93	93	basis of:
94	94	(1) the actual average daily attendance of the
95	95	preceding school year, if the decline is the result of the closing
96	96	or reduction in personnel of a military base; or
97	97	(2) [subject to Subsection (e),] an average daily
98	98	attendance not to exceed 98 percent of the actual average daily
99	99	attendance of the preceding school year, if the decline is not the
100	100	result of the closing or reduction in personnel of a military base.
101	101	(c) The commissioner shall adjust the average daily
102	102	attendance of a school district that has a significant percentage
103	103	of students who are migratory children as defined by 20 U.S.C.
104	104	Section 6399.
105	105	(d) Except as provided by Section 41.005(e), the [The]
106	106	commissioner may adjust the average daily attendance of a school
107	107	district in which a disaster, flood, extreme weather condition,
108	108	fuel curtailment, or other calamity has a significant effect on the
109	109	district's attendance.
110	110	(e) [For each school year, the commissioner shall adjust the
111	111	average daily attendance of school districts that are entitled to
112	112	funding on the basis of an adjusted average daily attendance under
113	113	Subsection (b)(2) so that:
114	114	[(1) all districts are funded on the basis of the same
115	115	percentage of the preceding year's actual average daily attendance;
116	116	and
117	117	[(2) the total cost to the state does not exceed the
118	118	amount specifically appropriated for that year for purposes of
119	119	Subsection (b)(2).
120	120	[(f)] An open-enrollment charter school is not entitled to
121	121	funding based on an adjustment under Subsection (b)(2).
122	122	(f) [(g)] If a student may receive course credit toward the
123	123	student's high school academic requirements and toward the
124	124	student's higher education academic requirements for a single
125	125	course, including a course provided under Section 28.009 by a
126	126	public institution of higher education, the time during which the
127	127	student attends the course shall be counted as part of the minimum
128	128	number of instructional hours required for a student to be
129	129	considered a full-time student in average daily attendance for
130	130	purposes of this section.
131	131	(g) [(h)] Subject to rules adopted by the commissioner
132	132	under Section 41.006(b) [42.0052(b)], time that a student
133	133	participates in an off-campus instructional program approved under
134	134	Section 41.006(a) [42.0052(a)] shall be counted as part of the
135	135	minimum number of instructional hours required for a student to be
136	136	considered a full-time student in average daily attendance for
137	137	purposes of this section.
138	138	Sec. 41.005 [42.0051]. AVERAGE DAILY ATTENDANCE FOR
139	139	DISTRICTS IN DISASTER AREA. (a) From funds specifically
140	140	appropriated for the purpose or other funds available to the
141	141	commissioner for that purpose, the commissioner shall adjust the
142	142	average daily attendance of a school district all or part of which
143	143	is located in an area declared a disaster area by the governor under
144	144	Chapter 418, Government Code, if the district experiences a decline
145	145	in average daily attendance that is reasonably attributable to the
146	146	impact of the disaster.
147	147	(b) The adjustment must be sufficient to ensure that the
148	148	district receives funding comparable to the funding that the
149	149	district would have received if the decline in average daily
150	150	attendance reasonably attributable to the impact of the disaster
151	151	had not occurred.
152	152	(c) The commissioner shall make the adjustment required by
153	153	this section for the two-year period following the date of the
154	154	governor's initial proclamation or executive order declaring the
155	155	state of disaster.
156	156	(d) Section 41.004(b)(2) [42.005(b)(2)] does not apply to a
157	157	district that receives an adjustment under this section.
158	158	(e) A district that receives an adjustment under this
159	159	section may not receive any additional adjustment under Section
160	160	41.004(d) [42.005(d)] for the decline in average daily attendance
161	161	on which the adjustment under this section is based.
162	162	(f) For purposes of this title, a district's adjusted
163	163	average daily attendance under this section is considered to be the
164	164	district's average daily attendance as determined under Section
165	165	41.004 [42.005].
166	166	Sec. 41.006 [42.0052]. OFF-CAMPUS PROGRAMS APPROVED FOR
167	167	PURPOSES OF AVERAGE DAILY ATTENDANCE. (a) The commissioner may,
168	168	based on criteria developed by the commissioner, approve
169	169	instructional programs provided off campus by an entity other than
170	170	a school district or open-enrollment charter school as a program in
171	171	which participation by a student of a district or charter school may
172	172	be counted for purposes of determining average daily attendance in
173	173	accordance with Section 41.004(g) [42.005(h)].
174	174	(b) The commissioner shall adopt by rule verification and
175	175	reporting procedures concerning time spent by students
176	176	participating in instructional programs approved under Subsection
177	177	(a).
178	178	Sec. 41.007 [42.006]. PUBLIC EDUCATION INFORMATION
179	179	MANAGEMENT SYSTEM (PEIMS). (a) Each school district shall
180	180	participate in the Public Education Information Management System
181	181	(PEIMS) and shall provide through that system information required
182	182	for the administration of this chapter and of other appropriate
183	183	provisions of this code.
184	184	(b) [(a-1)] The commissioner by rule shall require each
185	185	school district and open-enrollment charter school to report
186	186	through the Public Education Information Management System
187	187	information regarding the number of students enrolled in the
188	188	district or school who are identified as having dyslexia. The
189	189	agency shall maintain the information provided in accordance with
190	190	this subsection.
191	191	(c) [(b)] Each school district shall use a uniform
192	192	accounting system adopted by the commissioner for the data required
193	193	to be reported for the Public Education Information Management
194	194	System.
195	195	(d) [(c)] Annually, the commissioner shall review the
196	196	Public Education Information Management System and shall repeal or
197	197	amend rules that require school districts to provide information
198	198	through the Public Education Information Management System that is
199	199	not necessary. In reviewing and revising the Public Education
200	200	Information Management System, the commissioner shall develop
201	201	rules to ensure that the system:
202	202	(1) provides useful, accurate, and timely information
203	203	on student demographics and academic performance, personnel, and
204	204	school district finances;
205	205	(2) contains only the data necessary for the
206	206	legislature and the agency to perform their legally authorized
207	207	functions in overseeing the public education system; and
208	208	(3) does not contain any information related to
209	209	instructional methods, except as provided by Section 29.066 or
210	210	required by federal law.
211	211	(e) [(d)] The commissioner's rules must ensure that the
212	212	Public Education Information Management System links student
213	213	performance data to other related information for purposes of
214	214	efficient and effective allocation of scarce school resources, to
215	215	the extent practicable using existing agency resources and
216	216	appropriations.
217	217	Sec. 41.008 [42.007]. EQUALIZED FUNDING ELEMENTS. (a) The
218	218	Legislative Budget Board shall adopt rules, subject to appropriate
219	219	notice and opportunity for public comment, for the calculation for
220	220	each year of a biennium of the qualified funding elements, in
221	221	accordance with Subsection (c), necessary to achieve the state
222	222	policy under Section 42.001.
223	223	(b) Before each regular session of the legislature, the
224	224	board shall, as determined by the board, report the equalized
225	225	funding elements to the commissioner and the legislature.
226	226	(c) The funding elements must include:
227	227	(1) a basic allotment for the purposes of Section
228	228	42.101 that[, when combined with the guaranteed yield component
229	229	provided by Subchapter F,] represents the cost per student of a
230	230	regular education program that meets all mandates of law and
231	231	regulation;
232	232	(2) adjustments designed to reflect the variation in
233	233	known resource costs and costs of education beyond the control of
234	234	school districts;
235	235	(3) appropriate program cost differentials and other
236	236	funding elements for the programs authorized under Subchapter C,
237	237	Chapter 42, with the program funding level expressed as dollar
238	238	amounts and as weights applied to the adjusted [basic] allotment
239	239	for the appropriate year;
240	240	(4) [the maximum guaranteed level of qualified state
241	241	and local funds per student for the purposes of Subchapter F;
242	242	[(5) the enrichment and facilities tax rate under
243	243	Subchapter F;
244	244	[(6)] the computation of students in weighted average
245	245	daily attendance under Section 42.302; and
246	246	(5) [(7)] the amount to be appropriated for the school
247	247	facilities assistance program under Chapter 46.
248	248	SECTION 1.06. Sections 41.003 and 41.004, Education Code,
249	249	are redesignated as Sections 41.009 and 41.010, Education Code, and
250	250	amended to read as follows:
251	251	Sec. 41.009 [41.003]. OPTIONS TO ENSURE EFFICIENCY OF
252	252	FOUNDATION SCHOOL PROGRAM [ACHIEVE EQUALIZED WEALTH LEVEL]. A
253	253	district to which Section 42.254(a) applies [with a wealth per
254	254	student that exceeds the equalized wealth level] may take any
255	255	combination of the following actions to comply with the
256	256	requirements of Section 42.254 [achieve the equalized wealth
257	257	level]:
258	258	(1) consolidation with another district as provided by
259	259	Subchapter B;
260	260	(2) detachment of territory as provided by Subchapter
261	261	C;
262	262	(3) payment to the state for the efficiency of the
263	263	Foundation School Program [purchase of average daily attendance
264	264	credit] as provided by Subchapter D; or
265	265	(4) [education of nonresident students as provided by
266	266	Subchapter E; or
267	267	[(5)] tax base consolidation with another district as
268	268	provided by Subchapter F.
269	269	Sec. 41.010 [41.004]. DETERMINATION OF FUNDING LEVELS
270	270	[ANNUAL REVIEW OF PROPERTY WEALTH]. (a) Not later than July 1 of
271	271	each year, the commissioner shall determine the estimated amount of
272	272	state and local funding for each school district for the following
273	273	school year under Section 42.253.
274	274	(b) Not later than July 15 of each year, [using the estimate
275	275	of enrollment under Section 42.254,] the commissioner shall review
276	276	the estimated entitlements and local revenue [wealth per student]
277	277	of school districts in the state and shall notify:
278	278	(1) each district to which Section 42.254(a) applies
279	279	[with wealth per student exceeding the equalized wealth level];
280	280	(2) each district to which the commissioner proposes
281	281	to annex property detached from a district notified under
282	282	Subdivision (1), if necessary, under Subchapter G; and
283	283	(3) each district to which the commissioner proposes
284	284	to consolidate a district notified under Subdivision (1), if
285	285	necessary, under Subchapter H.
286	286	(c) [(b)] If, before the dates provided by this subsection,
287	287	a district notified under Subsection (b)(1) [(a)(1)] has not
288	288	successfully exercised one or more options under Section 41.009 to
289	289	comply with Section 42.254(a) [41.003 that reduce the district's
290	290	wealth per student to a level equal to or less than the equalized
291	291	wealth level], the commissioner shall order the detachment of
292	292	property from that district as provided by Subchapter G. If that
293	293	detachment will not bring the district into full compliance with
294	294	Section 42.254(a) [reduce the district's wealth per student to a
295	295	level equal to or less than the equalized wealth level], the
296	296	commissioner may not detach property under Subchapter G but shall
297	297	order the consolidation of the district with one or more other
298	298	districts as provided by Subchapter H. An agreement under Section
299	299	41.009(1) or (2) [41.003(1) or (2)] must be executed not later than
300	300	September 1 immediately following the notice under Subsection (b)
301	301	[(a)]. An election for an option under Section 41.009(3) or (4)
302	302	[41.003(3), (4), or (5)] must be ordered before September 1
303	303	immediately following the notice under Subsection (b) [(a)].
304	304	(d) [(c)] A district notified under Subsection (b) [(a)]
305	305	may not adopt a tax rate for the tax year in which the district
306	306	receives the notice until the commissioner certifies that the
307	307	district is in compliance with Section 42.254(a) [has achieved the
308	308	equalized wealth level].
309	309	(e) [(d)] A detachment and annexation or consolidation
310	310	under this chapter:
311	311	(1) is effective for Foundation School Program funding
312	312	purposes for the school year that begins in the calendar year in
313	313	which the detachment and annexation or consolidation is agreed to
314	314	or ordered; and
315	315	(2) applies to the ad valorem taxation of property
316	316	beginning with the tax year in which the agreement or order is
317	317	effective.
318	318	SECTION 1.07. Section 41.005, Education Code, is
319	319	redesignated as Section 41.011, Education Code, to read as follows:
320	320	Sec. 41.011 [41.005]. COMPTROLLER AND APPRAISAL DISTRICT
321	321	COOPERATION. The chief appraiser of each appraisal district and
322	322	the comptroller shall cooperate with the commissioner and school
323	323	districts in implementing this chapter.
324	324	SECTION 1.08. Sections 41.007, 41.008, and 41.009,
325	325	Education Code, are redesignated as Sections 41.012, 41.013, and
326	326	41.014, Education Code, and amended to read as follows:
327	327	Sec. 41.012 [41.007]. COMMISSIONER TO APPROVE SUBSEQUENT
328	328	BOUNDARY CHANGES. A school district that is involved in an action
329	329	under this chapter that results in boundary changes to the district
330	330	or in the consolidation of tax bases is subject to consolidation,
331	331	detachment, or annexation under Chapter 13 only if the commissioner
332	332	certifies that the change under Chapter 13 will not result in a
333	333	district to which Section 42.254(a) applies [with a wealth per
334	334	student that exceeds the equalized wealth level].
335	335	Sec. 41.013 [41.008]. HOMESTEAD EXEMPTIONS. (a) The
336	336	governing board of a school district that results from
337	337	consolidation under this chapter, including a consolidated taxing
338	338	district under Subchapter F, for the tax year in which the
339	339	consolidation occurs may determine whether to adopt a homestead
340	340	exemption provided by Section 11.13, Tax Code, and may set the
341	341	amount of the exemption, if adopted, at any time before the school
342	342	district adopts a tax rate for that tax year. This section applies
343	343	only to an exemption that the governing board of a school district
344	344	is authorized to adopt or change in amount under Section 11.13, Tax
345	345	Code.
346	346	(b) This section prevails over any inconsistent provision
347	347	of Section 11.13, Tax Code, or other law.
348	348	Sec. 41.014 [41.009]. TAX ABATEMENTS. (a) A tax abatement
349	349	agreement executed by a school district that is involved in
350	350	consolidation or in detachment and annexation of territory under
351	351	this chapter is not affected and applies to the taxation of the
352	352	property covered by the agreement as if executed by the district
353	353	within which the property is included.
354	354	(b) The commissioner shall determine the taxable value
355	355	[wealth per student] of a school district under this chapter as if
356	356	any tax abatement agreement executed by a school district on or
357	357	after May 31, 1993, had not been executed.
358	358	SECTION 1.09. Section 41.010, Education Code, is
359	359	redesignated as Section 41.015, Education Code, to read as follows:
360	360	Sec. 41.015 [41.010]. TAX INCREMENT OBLIGATIONS. The
361	361	payment of tax increments under Chapter 311, Tax Code, is not
362	362	affected by the consolidation of territory or tax bases or by
363	363	annexation under this chapter. In each tax year a school district
364	364	paying a tax increment from taxes on property over which the
365	365	district has assumed taxing power is entitled to retain the same
366	366	percentage of the tax increment from that property that the
367	367	district in which the property was located before the consolidation
368	368	or annexation could have retained for the respective tax year.
369	369	SECTION 1.10. Section 41.011, Education Code, is
370	370	redesignated as Section 41.016, Education Code, and amended to read
371	371	as follows:
372	372	Sec. 41.016 [41.011]. CONTINGENCY. (a) If any of the
373	373	options described by Section 41.009 [41.003] as applied to a school
374	374	district are held invalid by a final decision of a court of
375	375	competent jurisdiction, a school district is entitled to exercise
376	376	any of the remaining valid options in accordance with a schedule
377	377	approved by the commissioner.
378	378	(b) If a final order of a court of competent jurisdiction
379	379	should hold each of the options provided by Section 41.009 [41.003]
380	380	invalid, the commissioner shall act under Subchapter G or H to
381	381	achieve compliance with Section 42.254(a) [the equalized wealth
382	382	level] only after notice and hearing is afforded to each school
383	383	district affected by the order. The commissioner shall adopt a plan
384	384	that least disrupts the affected school districts. If because the
385	385	exigency to adopt a plan prevents the commissioner from giving a
386	386	reasonable time for notice and hearing, the commissioner shall
387	387	timely give notice to and hold a hearing for the affected school
388	388	districts, but in no event less than 30 days from time of notice to
389	389	the date of hearing.
390	390	(c) If a final order of a court of competent jurisdiction
391	391	should hold an option provided by Section 41.009 [41.003] invalid
392	392	and order a refund to a district of any amounts paid by a district
393	393	choosing that option, the amount shall be refunded but held in
394	394	reserve and not expended by the district until released by order of
395	395	the commissioner. The commissioner shall order the release
396	396	immediately on the commissioner's determination that, through one
397	397	of the means provided by law, the district has achieved compliance
398	398	with Section 42.254(a) [the equalized wealth level]. The amount
399	399	released shall be deducted from any state aid payable to the
400	400	district according to a schedule adopted by the commissioner.
401	401	SECTION 1.11. Section 41.012, Education Code, is
402	402	redesignated as Section 41.017, Education Code, to read as follows:
403	403	Sec. 41.017 [41.012]. DATE OF ELECTIONS. An election under
404	404	this chapter for voter approval of an agreement entered by the board
405	405	of trustees shall be held on a Tuesday or Saturday not more than 45
406	406	days after the date of the agreement. Section 41.001, Election
407	407	Code, does not apply to the election.
408	408	SECTION 1.12. Section 41.013, Education Code, is
409	409	redesignated as Section 41.018, Education Code, and amended to read
410	410	as follows:
411	411	Sec. 41.018 [41.013]. PROCEDURE. (a) Except as provided
412	412	by Subchapter G, a decision of the commissioner under this chapter
413	413	is appealable under Section 7.057.
414	414	(b) Any order of the commissioner issued under this chapter
415	415	shall be given immediate effect and may not be stayed or enjoined
416	416	pending any appeal.
417	417	(c) Chapter 2001, Government Code, does not apply to a
418	418	decision of the commissioner under this chapter.
419	419	(d) On the request of the commissioner, the secretary of
420	420	state shall publish any rules adopted under this chapter in the
421	421	Texas Register and the Texas Administrative Code.
422	422	SECTION 1.13. Section 41.031, Education Code, is amended to
423	423	read as follows:
424	424	Sec. 41.031. AGREEMENT. The governing boards of any two or
425	425	more school districts may consolidate the districts by agreement in
426	426	accordance with this subchapter to establish a consolidated
427	427	district to which Section 42.254(a) does not apply [with a wealth
428	428	per student equal to or less than the equalized wealth level]. The
429	429	agreement is not effective unless the commissioner certifies that
430	430	Section 42.254(a) does not apply to the consolidated district[,] as
431	431	a result of actions taken under this chapter[, will have a wealth
432	432	per student equal to or less than the equalized wealth level].
433	433	SECTION 1.14. Sections 41.034(a) and (c), Education Code,
434	434	are amended to read as follows:
435	435	(a) For the first and second school years after creation of
436	436	a consolidated district under this subchapter, the commissioner
437	437	shall adjust allotments to the consolidated district to the extent
438	438	necessary to preserve the effects of an adjustment under Section
439	439	42.102, 42.103, or 42.104 [42.105] to which either of the
440	440	consolidating districts would have been entitled but for the
441	441	consolidation.
442	442	(c) Four or more districts that consolidate into one
443	443	district under this subchapter within a period of one year may elect
444	444	to receive incentive aid under this section or to receive incentive
445	445	aid for not more than five years under Subchapter G, Chapter 13.
446	446	[Incentive aid under this subsection may not provide the
447	447	consolidated district with more revenue in state and local funds
448	448	than the district would receive at the equalized wealth level.]
449	449	SECTION 1.15. Section 41.061, Education Code, is amended to
450	450	read as follows:
451	451	Sec. 41.061. AGREEMENT. (a) By agreement of the governing
452	452	boards of two school districts, territory may be detached from one
453	453	of the districts and annexed to the other district if[,] after the
454	454	action Section 42.254(a) does not apply to [:
455	455	[(1)] the [wealth per student of the] district from
456	456	which territory is detached or [is equal to or less than the
457	457	equalized wealth level; and
458	458	[(2)] the [wealth per student of the] district to
459	459	which territory is annexed [is not greater than the greatest level
460	460	for which funds are provided under Subchapter F, Chapter 42].
461	461	(b) The agreement is not effective unless the commissioner
462	462	certifies that, after all actions taken under this chapter, Section
463	463	42.254(a) does not apply to [the wealth per student of] each
464	464	district involved [will be equal to or less than the applicable
465	465	level permitted by Subsection (a)].
466	466	SECTION 1.16. The heading to Subchapter D, Chapter 41,
467	467	Education Code, is amended to read as follows:
468	468	SUBCHAPTER D. PAYMENT TO STATE FOR EFFICIENCY OF FOUNDATION SCHOOL
469	469	PROGRAM [PURCHASE OF ATTENDANCE CREDIT]
470	470	SECTION 1.17. Section 41.091, Education Code, is amended to
471	471	read as follows:
472	472	Sec. 41.091. AGREEMENT. A school district to which Section
473	473	42.254(a) applies [with a wealth per student that exceeds the
474	474	equalized wealth level] may execute an agreement with the
475	475	commissioner to make payments to the state or have deductions made
476	476	to funds owed by the state to the district [purchase attendance
477	477	credits] in an amount sufficient to comply with the requirements of
478	478	Section 42.254[, in combination with any other actions taken under
479	479	this chapter, to reduce the district's wealth per student to a level
480	480	that is equal to or less than the equalized wealth level].
481	481	SECTION 1.18. Sections 41.093(a) and (c), Education Code,
482	482	are amended to read as follows:
483	483	(a) The [Subject to Subsection (b-1), the cost of each
484	484	credit is an] amount of payments made by a district or funds
485	485	withheld from a district as provided by Section 41.091 must be at
486	486	least equal to the amount by which the district's total revenue
487	487	under Sections 42.253(a)(2) and (3) exceeds the district's
488	488	entitlement under Section 42.253(a)(1) [greater of:
489	489	[(1) the amount of the district's maintenance and
490	490	operations tax revenue per student in weighted average daily
491	491	attendance for the school year for which the contract is executed;
492	492	or
493	493	[(2) the amount of the statewide district average of
494	494	maintenance and operations tax revenue per student in weighted
495	495	average daily attendance for the school year preceding the school
496	496	year for which the contract is executed].
497	497	(c) The amount of maintenance and operations tax revenue
498	498	[cost of an attendance credit] for a school district is computed
499	499	using the final tax collections of the district.
500	500	SECTION 1.19. Section 41.094(a), Education Code, is amended
501	501	to read as follows:
502	502	(a) If a [A] school district agrees to make payments to the
503	503	state under this subchapter, the payments shall be made [pay for
504	504	credits purchased] in equal monthly installments [payments] as
505	505	determined by the commissioner beginning February 15 and ending
506	506	August 15 of the school year for which the agreement is in effect.
507	507	SECTION 1.20. Section 41.095, Education Code, is amended to
508	508	read as follows:
509	509	Sec. 41.095. DURATION. An agreement under this subchapter
510	510	[section] is valid for one school year and, subject to Section
511	511	41.096, may be renewed annually.
512	512	SECTION 1.21. Section 41.096(b), Education Code, is amended
513	513	to read as follows:
514	514	(b) The ballot shall be printed to permit voting for or
515	515	against the proposition: "Authorizing the board of trustees of
516	516	________ School District to make payments to [purchase attendance
517	517	credits from] the state with local tax revenues to prevent
518	518	detachment of property within the district or consolidation of the
519	519	district by the commissioner for the efficiency of the state
520	520	education system."
521	521	SECTION 1.22. The heading to Section 41.097, Education
522	522	Code, is amended to read as follows:
523	523	Sec. 41.097. PAYMENT [CREDIT] FOR APPRAISAL COSTS.
524	524	SECTION 1.23. Section 41.097(a), Education Code, is amended
525	525	to read as follows:
526	526	(a) Using funds received from a school district [The total
527	527	amount required under Section 41.093 for a district to purchase
528	528	attendance credits] under this subchapter for any school year, the
529	529	state shall pay to the appraisal district or districts in which the
530	530	school district participates [is reduced by] an amount equal to the
531	531	product of the school district's total costs under Section 6.06,
532	532	Tax Code, for the appraisal district or districts in which it
533	533	participates multiplied by a percentage that is computed by
534	534	dividing the total amount required under Section 41.093 by the
535	535	total amount of taxes imposed by [in] the district for that year on
536	536	property in the appraisal district, less any amounts paid into a tax
537	537	increment fund under Chapter 311, Tax Code.
538	538	SECTION 1.24. Section 41.151, Education Code, is amended to
539	539	read as follows:
540	540	Sec. 41.151. AGREEMENT. The board of trustees of two or
541	541	more school districts may execute an agreement to conduct an
542	542	election on the creation of a consolidated taxing district for the
543	543	maintenance and operation of the component school districts. The
544	544	agreement is subject to approval by the commissioner. The
545	545	agreement is not effective unless the commissioner certifies that
546	546	Section 42.254(a) does not apply to the consolidated taxing
547	547	district [will have a wealth per student equal to or less than the
548	548	equalized wealth level] after all actions taken under this chapter.
549	549	SECTION 1.25. Section 41.202(a), Education Code, is amended
550	550	to read as follows:
551	551	(a) For purposes of this subchapter, the taxable value of an
552	552	individual parcel or other item of property and the total taxable
553	553	value of property in a school district resulting from the
554	554	detachment of property from or annexation of property to that
555	555	district is determined by applying the appraisal ratio for the
556	556	appropriate category of property determined under Subchapter M,
557	557	Chapter 403, Government Code, for the current [preceding] tax year
558	558	to the taxable value of the detached or annexed property determined
559	559	under Title 1, Tax Code, for the current [preceding] tax year.
560	560	SECTION 1.26. Section 41.205, Education Code, is amended to
561	561	read as follows:
562	562	Sec. 41.205. DETACHMENT OF PROPERTY. (a) The commissioner
563	563	shall detach property under this section from each school district
564	564	from which the commissioner is required under Section 41.010
565	565	[41.004] to detach property under this subchapter.
566	566	(b) The commissioner shall detach from each school district
567	567	covered by Subsection (a) one or more whole parcels or items of
568	568	property in descending order of the taxable value of each parcel or
569	569	item, beginning with the parcel or item having the greatest taxable
570	570	value, until Section 42.254(a) does not apply to the school
571	571	district [district's wealth per student is equal to or less than the
572	572	equalized wealth level, except as otherwise provided by Subsection
573	573	(c)].
574	574	(c) [If the detachment of whole parcels or items of
575	575	property, as provided by Subsection (a) would result in a
576	576	district's wealth per student that is less than the equalized
577	577	wealth level by more than $10,000, the commissioner may not detach
578	578	the last parcel or item of property and shall detach the next one or
579	579	more parcels or items of property in descending order of taxable
580	580	value that would result in the school district having a wealth per
581	581	student that is equal to or less than the equalized wealth level by
582	582	not more than $10,000.
583	583	[(d)] Notwithstanding Subsections (a) and[,] (b), [and
584	584	(c),] the commissioner may detach only a portion of a parcel or item
585	585	of property if[:
586	586	[(1) it is not possible to reduce the district's wealth
587	587	per student to a level that is equal to or less than the equalized
588	588	wealth level under this subchapter unless some or all of the parcel
589	589	or item of property is detached and the detachment of the whole
590	590	parcel or item would result in the district from which it is
591	591	detached having a wealth per student that is less than the equalized
592	592	wealth level by more than $10,000; or
593	593	[(2)] the commissioner determines that a partial
594	594	detachment of that parcel or item of property is preferable to the
595	595	detachment of one or more other parcels or items having a lower
596	596	taxable value in order to minimize the number of parcels or items of
597	597	property to be detached consistent with the purposes of this
598	598	chapter.
599	599	SECTION 1.27. Sections 41.206(a) and (c), Education Code,
600	600	are amended to read as follows:
601	601	(a) The commissioner shall annex property detached under
602	602	Section 41.205 to school districts eligible for annexation in
603	603	accordance with this section. A school district is eligible for
604	604	annexation of property to it under this subchapter only if, after
605	605	[before] any detachments or annexations are made in a year, Section
606	606	42.254(a) does not apply to the district [district's wealth per
607	607	student is less than the greatest level for which funds are provided
608	608	under Subchapter F, Chapter 42].
609	609	(c) The commissioner shall adopt rules on the detachment and
610	610	annexation of property, subject to Section 41.002(c) [annex
611	611	property detached from school districts beginning with the property
612	612	detached from the school district with the greatest wealth per
613	613	student before detachment, and continuing with the property
614	614	detached from each other school district in descending order of the
615	615	district's wealth per student before detachment].
616	616	SECTION 1.28. Section 41.211, Education Code, is amended to
617	617	read as follows:
618	618	Sec. 41.211. STUDENT ATTENDANCE. A student who is a
619	619	resident of real property detached from a school district may
620	620	choose to attend school in that district or in the district to which
621	621	the property is annexed. For purposes of determining average daily
622	622	attendance under Section 41.004 [42.005], the student shall be
623	623	counted in the district [to which the property is annexed. If the
624	624	student chooses to attend school in the district from which the
625	625	property is detached, the state shall withhold any foundation
626	626	school funds from the district to which the property is annexed and
627	627	shall allocate to the district] in which the student attends [is
628	628	attending] school [those funds and the amount of funds equal to the
629	629	difference between the state funds the district is receiving for
630	630	the student and the district's cost in educating the student].
631	631	SECTION 1.29. Section 41.251, Education Code, is amended to
632	632	read as follows:
633	633	Sec. 41.251. COMMISSIONER ORDER. If the commissioner is
634	634	required under Section 41.010 [41.004] to order the consolidation
635	635	of districts, the consolidation is governed by this subchapter.
636	636	The commissioner's order shall be effective on a date determined by
637	637	the commissioner, but not later than the earliest practicable date
638	638	after November 8.
639	639	SECTION 1.30. Sections 41.252 and 41.257, Education Code,
640	640	are amended to read as follows:
641	641	Sec. 41.252. SELECTION CRITERIA. (a) The commissioner
642	642	shall adopt rules for the selection of [In selecting] the districts
643	643	to be consolidated with a district to which Section 42.254(a)
644	644	applies [that has a property wealth greater than the equalized
645	645	wealth level, the commissioner shall select one or more districts
646	646	with a wealth per student that, when consolidated, will result in a
647	647	consolidated district with a wealth per student equal to or less
648	648	than the equalized wealth level. In achieving that result, the
649	649	commissioner shall give priority to school districts in the
650	650	following order:
651	651	[(1) first, to the contiguous district that has the
652	652	lowest wealth per student and is located in the same county;
653	653	[(2) second, to the district that has the lowest
654	654	wealth per student and is located in the same county;
655	655	[(3) third, to a contiguous district with a property
656	656	wealth below the equalized wealth level that has requested the
657	657	commissioner that it be considered in a consolidation plan;
658	658	[(4) fourth, to include as few districts as possible
659	659	that fall below the equalized wealth level within the consolidation
660	660	order that have not requested the commissioner to be included;
661	661	[(5) fifth, to the district that has the lowest wealth
662	662	per student and is located in the same regional education service
663	663	center area; and
664	664	[(6) sixth, to a district that has a tax rate similar
665	665	to that of the district that has a property wealth greater than the
666	666	equalized wealth level].
667	667	(b) The rules adopted by the commissioner under Subsection
668	668	(a):
669	669	(1) may not result in [select] a district to which
670	670	Section 42.254(a) applies; and
671	671	(2) must be in compliance with Section 41.002(c) [that
672	672	has been created as a result of consolidation by agreement under
673	673	Subchapter B to be consolidated under this subchapter with a
674	674	district that has a property wealth greater than the equalized
675	675	wealth level].
676	676	Sec. 41.257. APPLICATION OF SMALL AND SPARSE ADJUSTMENTS
677	677	AND TRANSPORTATION ALLOTMENT. The budget of the consolidated
678	678	district must apply the benefit of the adjustment or allotment to
679	679	the schools of the consolidating district to which Section 42.103,
680	680	42.104 [42.105], or 42.201 [42.155] would have applied in the event
681	681	that the consolidated district still qualifies as a small or sparse
682	682	district.
683	683	SECTION 1.31. Chapter 41, Education Code, is amended by
684	684	adding Subchapter I and adding a subchapter heading to read as
685	685	follows:
686	686	SUBCHAPTER I. RULES FOR DISTRICT COST ADJUSTMENTS
687	687	SECTION 1.32. Section 42.102(b), Education Code, is
688	688	transferred to Subchapter I, Chapter 41, Education Code, as added
689	689	by this Act, redesignated as Section 41.301, Education Code, and
690	690	amended to read as follows:
691	691	Sec. 41.301. COST OF EDUCATION INDEX ADJUSTMENT. (a) [(b)]
692	692	The commissioner shall determine the revised cost of education
693	693	adjustment for each school district. In determining the revised
694	694	cost of education adjustment, the commissioner shall use [is] the
695	695	cost of education index adjustment adopted by the foundation school
696	696	fund budget committee and contained in Chapter 203, Title 19, Texas
697	697	Administrative Code, as that chapter existed on March 26, 1997,
698	698	adjusted in the manner provided by Section 203.25, Title 19, Texas
699	699	Administrative Code.
700	700	(b) The commissioner shall determine the adjusted allotment
701	701	for each school district under Section 42.102 by multiplying the
702	702	value of the cost of education adjustment for the school district by
703	703	the basic allotment determined under Section 42.101.
704	704	SECTION 1.33. Section 42.105, Education Code, is
705	705	transferred to Subchapter I, Chapter 41, Education Code, as added
706	706	by this Act, redesignated as Section 41.302, Education Code, and
707	707	amended to read as follows:
708	708	Sec. 41.302 [42.105]. SPARSITY ADJUSTMENT. (a)
709	709	Notwithstanding Sections 42.101, 42.102, and 42.103, a school
710	710	district that has fewer than 130 students in average daily
711	711	attendance shall be provided an adjusted [basic] allotment on the
712	712	basis of 130 students in average daily attendance if it offers a
713	713	kindergarten through grade 12 program and has preceding or current
714	714	year's average daily attendance of at least 90 students or is 30
715	715	miles or more by bus route from the nearest high school district. A
716	716	district offering a kindergarten through grade 8 program whose
717	717	preceding or current year's average daily attendance was at least
718	718	50 students or which is 30 miles or more by bus route from the
719	719	nearest high school district shall be provided an adjusted [basic]
720	720	allotment on the basis of 75 students in average daily attendance.
721	721	An average daily attendance of 60 students shall be the basis of
722	722	providing the adjusted [basic] allotment if a district offers a
723	723	kindergarten through grade 6 program and has preceding or current
724	724	year's average daily attendance of at least 40 students or is 30
725	725	miles or more by bus route from the nearest high school district.
726	726	(b) Subsection (c) applies only to a school district that:
727	727	(1) does not offer each grade level from kindergarten
728	728	through grade 12 and whose prospective or former students generally
729	729	attend school in a state that borders this state for the grade
730	730	levels the district does not offer;
731	731	(2) serves both students residing in this state and
732	732	students residing in a state that borders this state who are
733	733	subsequently eligible for in-state tuition rates at institutions of
734	734	higher education in either state regardless of the state in which
735	735	the students reside; and
736	736	(3) shares students with an out-of-state district that
737	737	does not offer competing instructional services.
738	738	(c) Notwithstanding Subsection (a) or Sections 42.101,
739	739	42.102, and 42.103, a school district to which this subsection
740	740	applies, as provided by Subsection (b), that has fewer than 130
741	741	students in average daily attendance shall be provided an adjusted
742	742	[basic] allotment on the basis of 130 students in average daily
743	743	attendance if it offers a kindergarten through grade four program
744	744	and has preceding or current year's average daily attendance of at
745	745	least 75 students or is 30 miles or more by bus route from the
746	746	nearest high school district.
747	747	SECTION 1.34. Chapter 41, Education Code, is amended by
748	748	adding Subchapter J and adding a subchapter heading to read as
749	749	follows:
750	750	SUBCHAPTER J. RULES FOR SPECIAL PROGRAMS AND ALLOTMENTS
751	751	SECTION 1.35. Sections 42.151(c), (d), (e), (g), (h), (i),
752	752	and (k), Education Code, are transferred to Subchapter J, Chapter
753	753	41, Education Code, as added by this Act, redesignated as Section
754	754	41.351, Education Code, and amended to read as follows:
755	755	Sec. 41.351. RULES FOR SPECIAL EDUCATION ALLOTMENT. (a)
756	756	This section applies to Section 42.151.
757	757	(b) [(c)] For funding purposes, the number of contact hours
758	758	credited per day for each student in the off home campus
759	759	instructional arrangement may not exceed the contact hours credited
760	760	per day for the multidistrict class instructional arrangement in
761	761	the 1992-1993 school year.
762	762	(c) [(d)] For funding purposes the contact hours credited
763	763	per day for each student in the resource room; self-contained, mild
764	764	and moderate; and self-contained, severe, instructional
765	765	arrangements may not exceed the average of the statewide total
766	766	contact hours credited per day for those three instructional
767	767	arrangements in the 1992-1993 school year.
768	768	(d) [(e)] The State Board of Education by rule shall
769	769	prescribe the qualifications an instructional arrangement must
770	770	meet in order to be funded as a particular instructional
771	771	arrangement under Section 42.151 [this section]. In prescribing
772	772	the qualifications that a mainstream instructional arrangement
773	773	must meet, the board shall establish requirements that students
774	774	with disabilities and their teachers receive the direct, indirect,
775	775	and support services that are necessary to enrich the regular
776	776	classroom and enable student success.
777	777	(e) [(g)] The State Board of Education shall adopt rules and
778	778	procedures governing contracts for residential placement of
779	779	special education students. The legislature shall provide by
780	780	appropriation for the state's share of the costs of those
781	781	placements.
782	782	(f) [(h)] Funds allocated under Section 42.151 [this
783	783	section], other than an indirect cost allotment established under
784	784	State Board of Education rule, must be used in the special education
785	785	program under Subchapter A, Chapter 29.
786	786	(g) [(i)] The agency shall encourage the placement of
787	787	students in special education programs, including students in
788	788	residential instructional arrangements, in the least restrictive
789	789	environment appropriate for their educational needs.
790	790	(h) [(k)] A school district that provides an extended year
791	791	program required by federal law for special education students who
792	792	may regress is entitled to receive funds in an amount equal to 75
793	793	percent, or a lesser percentage determined by the commissioner, of
794	794	the adjusted [basic] allotment resulting from Section 42.102 or
795	795	42.103, as applicable, or adjusted allotment, as applicable, for
796	796	each full-time equivalent student in average daily attendance,
797	797	multiplied by the amount designated for the student's instructional
798	798	arrangement under this section, for each day the program is
799	799	provided divided by the number of days in the minimum school year.
800	800	The total amount of state funding for extended year services under
801	801	this section may not exceed $10 million per year. A school district
802	802	may use funds received under this subsection [section] only in
803	803	providing an extended year program.
804	804	SECTION 1.36. Sections 42.152(c), (c-1), (c-2), (d), (q),
805	805	(q-1), (q-2), (q-3), (q-4), and (r), Education Code, are
806	806	transferred to Subchapter J, Chapter 41, Education Code, as added
807	807	by this Act, redesignated as Section 41.352, Education Code, and
808	808	amended to read as follows:
809	809	Sec. 41.352. RULES FOR COMPENSATORY EDUCATION ALLOTMENT.
810	810	(a) This section applies to Section 42.152.
811	811	(b) [(c)] Funds allocated under Section 42.152 [this
812	812	section] shall be used to fund supplemental programs and services
813	813	designed to eliminate any disparity in performance on assessment
814	814	instruments administered under Subchapter B, Chapter 39, or
815	815	disparity in the rates of high school completion between students
816	816	at risk of dropping out of school, as defined by Section 29.081, and
817	817	all other students. Specifically, the funds, other than an
818	818	indirect cost allotment established under State Board of Education
819	819	rule, which may not exceed 45 percent, may be used to meet the costs
820	820	of providing a compensatory, intensive, or accelerated instruction
821	821	program under Section 29.081 or a disciplinary alternative
822	822	education program established under Section 37.008, to pay the
823	823	costs associated with placing students in a juvenile justice
824	824	alternative education program established under Section 37.011, or
825	825	to support a program eligible under Title I of the Elementary and
826	826	Secondary Education Act of 1965, as provided by Pub. L. No. 103-382
827	827	and its subsequent amendments, and by federal regulations
828	828	implementing that Act, at a campus at which at least 40 percent of
829	829	the students are educationally disadvantaged. In meeting the costs
830	830	of providing a compensatory, intensive, or accelerated instruction
831	831	program under Section 29.081, a district's compensatory education
832	832	allotment shall be used for costs supplementary to the regular
833	833	education program, such as costs for program and student
834	834	evaluation, instructional materials and equipment and other
835	835	supplies required for quality instruction, supplemental staff
836	836	expenses, salary for teachers of at-risk students, smaller class
837	837	size, and individualized instruction. A home-rule school district
838	838	or an open-enrollment charter school must use funds allocated under
839	839	Section 42.152 [Subsection (a)] for a purpose authorized in this
840	840	subsection but is not otherwise subject to Subchapter C, Chapter
841	841	29. For purposes of this subsection, a program specifically
842	842	designed to serve students at risk of dropping out of school, as
843	843	defined by Section 29.081, is considered to be a program
844	844	supplemental to the regular education program, and a district may
845	845	use its compensatory education allotment for such a program.
846	846	(c) [(c-1)] Notwithstanding Subsection (b) [(c)], funds
847	847	allocated under Section 42.152 [this section] may be used to fund in
848	848	proportion to the percentage of students served by the program that
849	849	meet the criteria in Section 29.081(d) or (g):
850	850	(1) an accelerated reading instruction program under
851	851	Section 28.006(g); or
852	852	(2) a program for treatment of students who have
853	853	dyslexia or a related disorder as required by Section 38.003.
854	854	(d) [(c-2)] Notwithstanding Subsection (b) [(c)], funds
855	855	allocated under Section 42.152 [this section] may be used to fund a
856	856	district's mentoring services program under Section 29.089.
857	857	(e) [(d)] The agency shall evaluate the effectiveness of
858	858	accelerated instruction and support programs provided under
859	859	Section 29.081 for students at risk of dropping out of school.
860	860	(f) [(q)] The State Board of Education, with the assistance
861	861	of the comptroller, shall develop and implement by rule reporting
862	862	and auditing systems for district and campus expenditures of
863	863	compensatory education funds to ensure that compensatory education
864	864	funds, other than the indirect cost allotment, are spent only to
865	865	supplement the regular education program as required by Subsection
866	866	(b) [(c)]. The reporting requirements shall be managed
867	867	electronically to minimize local administrative costs. A district
868	868	shall submit the report required by this subsection not later than
869	869	the 150th day after the last day permissible for resubmission of
870	870	information required under Section 41.007 [42.006].
871	871	(g) [(q-1)] The commissioner shall develop a system to
872	872	identify school districts that are at high risk of having used
873	873	compensatory education funds other than in compliance with
874	874	Subsection (b) [(c)] or of having inadequately reported
875	875	compensatory education expenditures. If a review of the report
876	876	submitted under Subsection (f) [(q)], using the risk-based system,
877	877	indicates that a district is not at high risk of having misused
878	878	compensatory education funds or of having inadequately reported
879	879	compensatory education expenditures, the district may not be
880	880	required to perform a local audit of compensatory education
881	881	expenditures and is not subject to on-site monitoring under this
882	882	section.
883	883	(h) [(q-2)] If a review of the report submitted under
884	884	Subsection (f) [(q)], using the risk-based system, indicates that a
885	885	district is at high risk of having misused compensatory education
886	886	funds, the commissioner shall notify the district of that
887	887	determination. The district must respond to the commissioner not
888	888	later than the 30th day after the date the commissioner notifies the
889	889	district of the commissioner's determination. If the district's
890	890	response does not change the commissioner's determination that the
891	891	district is at high risk of having misused compensatory education
892	892	funds or if the district does not respond in a timely manner, the
893	893	commissioner shall:
894	894	(1) require the district to conduct a local audit of
895	895	compensatory education expenditures for the current or preceding
896	896	school year;
897	897	(2) order agency staff to conduct on-site monitoring
898	898	of the district's compensatory education expenditures; or
899	899	(3) both require a local audit and order on-site
900	900	monitoring.
901	901	(i) [(q-3)] If a review of the report submitted under
902	902	Subsection (f) [(q)], using the risk-based system, indicates that a
903	903	district is at high risk of having inadequately reported
904	904	compensatory education expenditures, the commissioner may require
905	905	agency staff to assist the district in following the proper
906	906	reporting methods or amending a district or campus improvement plan
907	907	under Subchapter F, Chapter 11. If the district does not take
908	908	appropriate corrective action before the 45th day after the date
909	909	the agency staff notifies the district of the action the district is
910	910	expected to take, the commissioner may:
911	911	(1) require the district to conduct a local audit of
912	912	the district's compensatory education expenditures; or
913	913	(2) order agency staff to conduct on-site monitoring
914	914	of the district's compensatory education expenditures.
915	915	(j) [(q-4)] The commissioner, in the year following a local
916	916	audit of compensatory education expenditures, shall withhold from a
917	917	district's foundation school fund payment an amount equal to the
918	918	amount of compensatory education funds the agency determines were
919	919	not used in compliance with Subsection (b) [(c)]. The commissioner
920	920	shall release to a district funds withheld under this subsection
921	921	when the district provides to the commissioner a detailed plan to
922	922	spend those funds in compliance with Subsection (b) [(c)].
923	923	(k) [(r)] The commissioner shall grant a one-year exemption
924	924	from the requirements of Subsections (f)-(j) [(q)-(q-4)] to a
925	925	school district in which the group of students who have failed to
926	926	perform satisfactorily in the preceding school year on an
927	927	assessment instrument required under Section 39.023(a), (c), or (l)
928	928	subsequently performs on those assessment instruments at a level
929	929	that meets or exceeds a level prescribed by commissioner rule. Each
930	930	year the commissioner, based on the most recent information
931	931	available, shall determine if a school district is entitled to an
932	932	exemption for the following school year and notify the district of
933	933	that determination.
934	934	SECTION 1.37. Sections 42.153(b) and (c), Education Code,
935	935	are transferred to Subchapter J, Chapter 41, Education Code, as
936	936	added by this Act, redesignated as Section 41.353, Education Code,
937	937	and amended to read as follows:
938	938	Sec. 41.353. RULES FOR BILINGUAL EDUCATION ALLOTMENT. (a)
939	939	This section applies to Section 42.153.
940	940	(b) Funds allocated under Section 42.153 [this section],
941	941	other than an indirect cost allotment established under State Board
942	942	of Education rule, must be used in providing bilingual education or
943	943	special language programs under Subchapter B, Chapter 29, and must
944	944	be accounted for under existing agency reporting and auditing
945	945	procedures.
946	946	(c) A district's bilingual education or special language
947	947	allocation may be used only for program and student evaluation,
948	948	instructional materials and equipment, staff development,
949	949	supplemental staff expenses, salary supplements for teachers, and
950	950	other supplies required for quality instruction and smaller class
951	951	size.
952	952	SECTION 1.38. Sections 42.154(c) and (d), Education Code,
953	953	are transferred to Subchapter J, Chapter 41, Education Code, as
954	954	added by this Act, redesignated as Section 41.354, Education Code,
955	955	and amended to read as follows:
956	956	Sec. 41.354. RULES FOR CAREER AND TECHNOLOGY EDUCATION
957	957	ALLOTMENT. (a) This section applies to Section 42.154.
958	958	(b) [(c)] Funds allocated under Section 42.154 [this
959	959	section], other than an indirect cost allotment established under
960	960	State Board of Education rule, must be used in providing career and
961	961	technology education programs in grades nine through 12 or career
962	962	and technology education programs for students with disabilities in
963	963	grades seven through 12 under Sections 29.182, 29.183, and 29.184.
964	964	(c) [(d)] The commissioner shall conduct a cost-benefit
965	965	comparison between career and technology education programs and
966	966	mathematics and science programs.
967	967	SECTION 1.39. Chapter 41, Education Code, is amended by
968	968	adding Subchapter K and adding a subchapter heading to read as
969	969	follows:
970	970	SUBCHAPTER K. RULES FOR TRANSPORTATION FUNDING
971	971	SECTION 1.40. Sections 42.155(d), (e), (f), (g), (h), (i),
972	972	(k), and (l), Education Code, are transferred to Subchapter K,
973	973	Chapter 41, Education Code, as added by this Act, redesignated as
974	974	Section 41.401, Education Code, and amended to read as follows:
975	975	Sec. 41.401. RULES FOR TRANSPORTATION ALLOTMENT. (a) This
976	976	section applies to Section 42.201.
977	977	(b) [(d)] A district or county may apply for and on approval
978	978	of the commissioner receive an additional amount of up to 10 percent
979	979	of its regular transportation allotment to be used for the
980	980	transportation of children living within two miles of the school
981	981	they attend who would be subject to hazardous traffic conditions if
982	982	they walked to school. Each board of trustees shall provide to the
983	983	commissioner the definition of hazardous conditions applicable to
984	984	that district and shall identify the specific hazardous areas for
985	985	which the allocation is requested. A hazardous condition exists
986	986	where no walkway is provided and children must walk along or cross a
987	987	freeway or expressway, an underpass, an overpass or a bridge, an
988	988	uncontrolled major traffic artery, an industrial or commercial
989	989	area, or another comparable condition.
990	990	(c) [(e)] The commissioner may grant an amount set by
991	991	appropriation for private or commercial transportation for
992	992	eligible students from isolated areas. The need for this type of
993	993	transportation grant shall be determined on an individual basis and
994	994	the amount granted shall not exceed the actual cost. The grants may
995	995	be made only in extreme hardship cases. A grant may not be made if
996	996	the students live within two miles of an approved school bus route.
997	997	(d) [(f)] The cost of transporting career and technology
998	998	education students from one campus to another inside a district or
999	999	from a sending district to another secondary public school for a
1000	1000	career and technology program or an area career and technology
1001	1001	school or to an approved post-secondary institution under a
1002	1002	contract for instruction approved by the agency shall be reimbursed
1003	1003	based on the number of actual miles traveled times the district's
1004	1004	official extracurricular travel per mile rate as set by the board of
1005	1005	trustees and approved by the agency.
1006	1006	(e) [(g)] A school district or county that provides special
1007	1007	transportation services for eligible special education students is
1008	1008	entitled to a state allocation paid on a previous year's
1009	1009	cost-per-mile basis. The maximum rate per mile allowable shall be
1010	1010	set by appropriation based on data gathered from the first year of
1011	1011	each preceding biennium. Districts may use a portion of their
1012	1012	support allocation to pay transportation costs, if necessary. The
1013	1013	commissioner may grant an amount set by appropriation for private
1014	1014	transportation to reimburse parents or their agents for
1015	1015	transporting eligible special education students. The mileage
1016	1016	allowed shall be computed along the shortest public road from the
1017	1017	student's home to school and back, morning and afternoon. The need
1018	1018	for this type transportation shall be determined on an individual
1019	1019	basis and shall be approved only in extreme hardship cases.
1020	1020	(f) [(h)] Funds allotted under Section 42.201 or this
1021	1021	section must be used in providing transportation services.
1022	1022	(g) [(i)] In the case of a district belonging to a county
1023	1023	transportation system, the district's transportation allotment for
1024	1024	purposes of determining a district's foundation school program
1025	1025	allocations is determined on the basis of the number of approved
1026	1026	daily route miles in the district multiplied by the allotment per
1027	1027	mile to which the county transportation system is entitled.
1028	1028	(h) [(k)] Notwithstanding any other provision of Section
1029	1029	42.201 or this section, the commissioner may not reduce the
1030	1030	allotment to which a district or county is entitled under Section
1031	1031	42.201 [this section] because the district or county provides
1032	1032	transportation for an eligible student to and from a child-care
1033	1033	facility, as defined by Section 42.002, Human Resources Code, or a
1034	1034	grandparent's residence instead of the student's residence, as
1035	1035	authorized by Section 34.007, if the transportation is provided
1036	1036	within the approved routes of the district or county for the school
1037	1037	the student attends.
1038	1038	(i) [(l)] A school district may, with the funds allotted
1039	1039	under Section 42.201 or this section, provide a bus pass or card for
1040	1040	another transportation system to each student who is eligible to
1041	1041	use the regular transportation system of the district but for whom
1042	1042	the regular transportation system of the district is not a feasible
1043	1043	method of providing transportation. The commissioner by rule shall
1044	1044	provide procedures for a school district to provide bus passes or
1045	1045	cards to students under this subsection.
1046	1046	SECTION 1.41. Chapter 41, Education Code, is amended by
1047	1047	adding Subchapter L and adding a subchapter heading to read as
1048	1048	follows:
1049	1049	SUBCHAPTER L. RULES FOR FINANCING FOUNDATION SCHOOL PROGRAM
1050	1050	SECTION 1.42. Sections 42.2514 and 42.2515, Education Code,
1051	1051	are transferred to Subchapter L, Chapter 41, Education Code, as
1052	1052	added by this Act, redesignated as Sections 41.451 and 41.452,
1053	1053	Education Code, and amended to read as follows:
1054	1054	Sec. 41.451 [42.2514]. ADDITIONAL STATE AID FOR TAX
1055	1055	INCREMENT FINANCING PAYMENTS. For each school year, a school
1056	1056	district's entitlement under Section 42.253(a)(1) [district,
1057	1057	including a school district that is otherwise ineligible for state
1058	1058	aid under this chapter,] is increased by [entitled to state aid in]
1059	1059	an amount equal to the amount the district is required to pay into
1060	1060	the tax increment fund for a reinvestment zone under Section
1061	1061	311.013(n), Tax Code.
1062	1062	Sec. 41.452 [42.2515]. ADDITIONAL STATE AID FOR AD VALOREM
1063	1063	TAX CREDITS UNDER TEXAS ECONOMIC DEVELOPMENT ACT. (a) For each
1064	1064	school year, a school district's entitlement under Section
1065	1065	42.253(a)(1) [district, including a school district that] is
1066	1066	increased by [otherwise ineligible for state aid under this
1067	1067	chapter, is entitled to state aid in] an amount equal to the amount
1068	1068	of all tax credits credited against ad valorem taxes of the district
1069	1069	in that year under former Subchapter D, Chapter 313, Tax Code.
1070	1070	(b) The commissioner may adopt rules to implement and
1071	1071	administer this section.
1072	1072	SECTION 1.43. Section 42.2524, Education Code, as effective
1073	1073	September 1, 2017, is transferred to Subchapter L, Chapter 41,
1074	1074	Education Code, as added by this Act, redesignated as Section
1075	1075	41.453, Education Code, and amended to read as follows:
1076	1076	Sec. 41.453 [42.2524]. REIMBURSEMENT FOR DISASTER
1077	1077	REMEDIATION COSTS. (a) This section applies only to a school
1078	1078	district all or part of which is located in an area declared a
1079	1079	disaster area by the governor under Chapter 418, Government Code,
1080	1080	and that incurs disaster remediation costs as a result of the
1081	1081	disaster.
1082	1082	(b) During the two-year period following the date of the
1083	1083	governor's initial proclamation or executive order declaring a
1084	1084	state of disaster, a district may apply to the commissioner for
1085	1085	reimbursement of disaster remediation costs that the district pays
1086	1086	during that period and does not anticipate recovering through
1087	1087	insurance proceeds, federal disaster relief payments, or another
1088	1088	similar source of reimbursement.
1089	1089	(c) [The commissioner may provide reimbursement under this
1090	1090	section only if funds are available for that purpose as follows:
1091	1091	[(1) reimbursement for a school district not required
1092	1092	to take action under Chapter 41 may be provided from:
1093	1093	[(A) amounts appropriated for that purpose,
1094	1094	including amounts appropriated for those districts for that purpose
1095	1095	to the disaster contingency fund established under Section 418.073,
1096	1096	Government Code; or
1097	1097	[(B) Foundation School Program funds available
1098	1098	for that purpose, based on a determination by the commissioner that
1099	1099	the amount appropriated for the Foundation School Program,
1100	1100	including the facilities component as provided by Chapter 46,
1101	1101	exceeds the amount to which districts are entitled under this
1102	1102	chapter and Chapter 46; and
1103	1103	[(2) reimbursement for a school district required to
1104	1104	take action under Chapter 41 may be provided from funds described by
1105	1105	Subdivision (1)(B) if funds remain available after fully
1106	1106	reimbursing each school district described by Subdivision (1) for
1107	1107	its disaster remediation costs.
1108	1108	[(d) If the amount of money available for purposes of
1109	1109	reimbursing school districts not required to take action under
1110	1110	Chapter 41 is not sufficient to fully reimburse each district's
1111	1111	disaster remediation costs, the commissioner shall reduce the
1112	1112	amount of assistance provided to each of those
1113	1113	districts proportionately. If the amount of money available for
1114	1114	purposes of reimbursing school districts required to take action
1115	1115	under Chapter 41 is not sufficient to fully reimburse each
1116	1116	district's disaster remediation costs, the commissioner shall
1117	1117	reduce the amount of assistance provided to each of those districts
1118	1118	proportionately.
1119	1119	[(e)] A district seeking reimbursement under this section
1120	1120	must provide the commissioner with adequate documentation of the
1121	1121	costs for which the district seeks reimbursement.
1122	1122	(d) [(f) A district required to take action under Chapter
1123	1123	41:
1124	1124	[(1) may, at its discretion, receive assistance
1125	1125	provided under this section either as a payment of state aid under
1126	1126	this chapter or as a reduction in the total amount required to be
1127	1127	paid by the district for attendance credits under Section 41.093;
1128	1128	and
1129	1129	[(2) may not obtain reimbursement under this section
1130	1130	for the payment of any disaster remediation costs that resulted in a
1131	1131	reduction under Section 41.0931 of the district's cost of
1132	1132	attendance credits.
1133	1133	[(h)] The commissioner shall adopt rules necessary to
1134	1134	implement this section, including rules defining "disaster
1135	1135	remediation costs" for purposes of this section and specifying the
1136	1136	type of documentation required under Subsection (c) [(e)].
1137	1137	(e) [(i)] Notwithstanding any other provision of this
1138	1138	section, the commissioner may permit a district to use amounts
1139	1139	provided to a district under this section to pay the costs of
1140	1140	replacing a facility instead of repairing the facility. The
1141	1141	commissioner shall ensure that a district that elects to replace a
1142	1142	facility does not receive an amount under this section that exceeds
1143	1143	the lesser of:
1144	1144	(1) the amount that would be provided to the district
1145	1145	if the facility were repaired; or
1146	1146	(2) the amount necessary to replace the facility.
1147	1147	(f) [(j)] This section does not require the commissioner to
1148	1148	provide any requested reimbursement. A decision of the
1149	1149	commissioner regarding reimbursement is final and may not be
1150	1150	appealed.
1151	1151	(g) Payments under this section are considered part of a
1152	1152	school district's entitlement under Section 42.253(a)(1).
1153	1153	SECTION 1.44. Sections 42.2525, 42.2526, and 42.2527,
1154	1154	Education Code, are transferred to Subchapter L, Chapter 41,
1155	1155	Education Code, as added by this Act, and redesignated as Sections
1156	1156	41.454, 41.455, and 41.456, Education Code, to read as follows:
1157	1157	Sec. 41.454 [42.2525]. ADJUSTMENTS FOR CERTAIN DISTRICTS
1158	1158	RECEIVING FEDERAL IMPACT AID. The commissioner is granted the
1159	1159	authority to ensure that school districts receiving federal impact
1160	1160	aid due to the presence of a military installation or significant
1161	1161	concentrations of military students do not receive more than an
1162	1162	eight percent reduction should the federal government reduce
1163	1163	appropriations to those schools.
1164	1164	Sec. 41.455 [42.2526]. ADJUSTMENT FOR DISTRICT OPERATING
1165	1165	PILOT PROGRAM. (a) This section applies only to a school district
1166	1166	operating a pilot program authorized by Section 28.0255.
1167	1167	(b) Beginning with the first school year that follows the
1168	1168	first school year in which students receive high school diplomas
1169	1169	under the pilot program authorized by Section 28.0255 and
1170	1170	continuing for every subsequent school year that the district
1171	1171	operates the pilot program, the commissioner shall provide funding
1172	1172	for the district's prekindergarten program under Section 29.153 on
1173	1173	a full-day basis for a number of prekindergarten students equal to
1174	1174	twice the number of students who received a high school diploma
1175	1175	under the pilot program authorized by Section 28.0255 during the
1176	1176	preceding school year.
1177	1177	(c) This section expires September 1, 2023.
1178	1178	Sec. 41.456 [42.2527]. ADJUSTMENT FOR CERTAIN DISTRICTS
1179	1179	WITH EARLY HIGH SCHOOL GRADUATION PROGRAMS. (a) As a pilot program
1180	1180	to enable the state to evaluate the benefit of providing additional
1181	1181	funding at the prekindergarten level for low-income students, the
1182	1182	commissioner shall provide prekindergarten funding in accordance
1183	1183	with this section to a school district located in a county that
1184	1184	borders the United Mexican States and the Gulf of Mexico.
1185	1185	(b) The commissioner shall provide funding for a school
1186	1186	district's prekindergarten program on a half-day basis for a number
1187	1187	of low-income prekindergarten students equal to twice the number of
1188	1188	students who received, as a result of participation in an early high
1189	1189	school graduation program operated by the district, a high school
1190	1190	diploma from the district during the preceding school year after
1191	1191	three years of secondary school attendance.
1192	1192	(c) The commissioner may adopt rules necessary to implement
1193	1193	this section.
1194	1194	(d) This section expires September 1, 2023.
1195	1195	SECTION 1.45. Section 42.2528, Education Code, is
1196	1196	transferred to Subchapter L, Chapter 41, Education Code, as added
1197	1197	by this Act, redesignated as Section 41.457, Education Code, and
1198	1198	amended to read as follows:
1199	1199	Sec. 41.457 [42.2528]. EXCESS FUNDS FOR VIDEO SURVEILLANCE
1200	1200	OF SPECIAL EDUCATION SETTINGS. (a) Notwithstanding any other
1201	1201	provision of law, if the commissioner determines that the amount
1202	1202	appropriated for the purposes of the Foundation School Program
1203	1203	exceeds the amount to which school districts are entitled under
1204	1204	Chapter 42 [this chapter], the commissioner by rule shall establish
1205	1205	a grant program through which excess funds are awarded as grants for
1206	1206	the purchase of video equipment, or for the reimbursement of costs
1207	1207	for previously purchased video equipment, used for monitoring
1208	1208	special education classrooms or other special education settings
1209	1209	required under Section 29.022.
1210	1210	(b) In awarding grants under this section, the commissioner
1211	1211	shall give highest priority to districts with maintenance and
1212	1212	operations tax rates at the greatest rates permitted by law. The
1213	1213	commissioner shall also give priority to:
1214	1214	(1) districts with the [maintenance and operations tax
1215	1215	rates at least equal to the state maximum compressed tax rate, as
1216	1216	defined by Section 42.101(a), and] lowest amounts of maintenance
1217	1217	and operations tax revenue per weighted student; and
1218	1218	(2) districts with debt service tax rates near or
1219	1219	equal to the greatest rates permitted by law.
1220	1220	(c) The commissioner may adopt rules to implement and
1221	1221	administer this section.
1222	1222	SECTION 1.46. Sections 42.253(d), (g), (i), (j), and (k),
1223	1223	Education Code, are transferred to Subchapter L, Chapter 41,
1224	1224	Education Code, as added by this Act, redesignated as Section
1225	1225	41.458, Education Code, and amended to read as follows:
1226	1226	Sec. 41.458. RULES FOR DISTRIBUTION OF FOUNDATION SCHOOL
1227	1227	FUND. (a) This section applies to Section 42.253.
1228	1228	(b) [(d)] The commissioner shall approve warrants to each
1229	1229	school district equaling the amount of its entitlement except as
1230	1230	provided by this section. Warrants for all money expended
1231	1231	according to Chapter 42 and this chapter shall be approved and
1232	1232	transmitted to treasurers or depositories of school districts in
1233	1233	the same manner that warrants for state payments are transmitted.
1234	1234	The total amount of the warrants issued under this section may not
1235	1235	exceed the total amount appropriated for Foundation School Program
1236	1236	purposes for that fiscal year.
1237	1237	(c) [(g)] If a school district demonstrates to the
1238	1238	satisfaction of the commissioner that the estimate of the
1239	1239	district's tax rate, student enrollment, tax collections, or
1240	1240	taxable value of property used in determining the amount of state
1241	1241	funds to which the district is entitled are so inaccurate as to
1242	1242	result in undue financial hardship to the district, the
1243	1243	commissioner may adjust funding to that district in that school
1244	1244	year to the extent that funds are available for that year.
1245	1245	(e) [(i)] Not later than March 1 each year, the commissioner
1246	1246	shall determine the actual amount of state funds to which each
1247	1247	school district is entitled under the allocation formulas in this
1248	1248	chapter and Chapter 42 for the current school year and shall compare
1249	1249	that amount with the amount of the warrants issued to each district
1250	1250	for that year. If the amount of the warrants differs from the
1251	1251	amount to which a district is entitled because of variations in the
1252	1252	district's tax rate, student enrollment, tax collections, or
1253	1253	taxable value of property, the commissioner shall adjust the
1254	1254	district's entitlement for the next fiscal year accordingly.
1255	1255	(f) [(j)] The legislature may appropriate funds necessary
1256	1256	for increases under Subsection (e) [(i)] from funds that the
1257	1257	comptroller, at any time during the fiscal year, finds are
1258	1258	available.
1259	1259	(g) [(k)] The commissioner shall compute for each school
1260	1260	district the total amount by which the district's allocation of
1261	1261	state funds is increased or reduced under Subsection (e) [(i)] and
1262	1262	shall certify that amount to the district.
1263	1263	SECTION 1.47. Section 42.253(h), Education Code, as
1264	1264	effective September 1, 2017, is transferred to Subchapter L,
1265	1265	Chapter 41, Education Code, as added by this Act, redesignated as
1266	1266	Section 41.458(d), Education Code, and amended to read as follows:
1267	1267	(d) [(h)] If the amount appropriated for the Foundation
1268	1268	School Program for the second year of a state fiscal biennium is
1269	1269	less than the amount to which school districts and open-enrollment
1270	1270	charter schools are entitled for that year, the commissioner shall
1271	1271	certify the amount of the difference to the Legislative Budget
1272	1272	Board not later than January 1 of the second year of the state
1273	1273	fiscal biennium. The Legislative Budget Board shall propose to the
1274	1274	legislature that the certified amount be transferred to the
1275	1275	foundation school fund from the economic stabilization fund and
1276	1276	appropriated for the purpose of increases in allocations under this
1277	1277	subsection. If the legislature fails during the regular session to
1278	1278	enact the proposed transfer and appropriation and there are not
1279	1279	funds available under Subsection (f) [(j)], the commissioner shall
1280	1280	adjust the total amounts due to each school district and
1281	1281	open-enrollment charter school under Chapter 42 and this chapter
1282	1282	and the total amounts necessary for each school district to comply
1283	1283	with the requirements of Section 42.254(a) [Chapter 41] by an
1284	1284	amount determined by applying to each district and school the same
1285	1285	percentage adjustment to the total amount of state and local
1286	1286	revenue due to the district or school under this chapter and Chapter
1287	1287	42 [41] so that the total amount of the adjustment to all districts
1288	1288	and schools results in an amount equal to the total adjustment
1289	1289	necessary. The following fiscal year:
1290	1290	(1) a district's or school's entitlement under Section
1291	1291	42.253 [this section] is increased by an amount equal to the
1292	1292	adjustment made under this subsection; and
1293	1293	(2) the amount necessary for a district to comply with
1294	1294	the requirements of Section 42.254(a) [Chapter 41] is reduced by an
1295	1295	amount necessary to ensure a district's full recovery of the
1296	1296	adjustment made under this subsection.
1297	1297	SECTION 1.48. Subchapter L, Chapter 41, Education Code, as
1298	1298	added by this Act, is amended by adding Sections 41.459, 41.460, and
1299	1299	41.461 to read as follows:
1300	1300	Sec. 41.459. DELINQUENT MAINTENANCE AND OPERATIONS TAX
1301	1301	COLLECTION. (a) If the collection of delinquent maintenance and
1302	1302	operations taxes of a district not previously required to take
1303	1303	action under Section 41.009 results in the district being subject
1304	1304	to Section 42.254(a) only for the year in which the delinquent taxes
1305	1305	are collected, the commissioner shall permit the district to take
1306	1306	action under this section in lieu of taking action under Section
1307	1307	41.009.
1308	1308	(b) The district shall deposit the amount by which the
1309	1309	district's revenue under Sections 42.253(a)(2) and (3) exceeds the
1310	1310	district's entitlement under Section 42.253(a)(1) into a separate
1311	1311	account that may be used only as provided by this section.
1312	1312	(c) For the school year following the year the deposit was
1313	1313	made as provided by Subsection (b), the commissioner shall reduce
1314	1314	the amount of state aid to which the district is entitled under this
1315	1315	chapter and Chapter 42 by an amount equal to the excess revenue in
1316	1316	the separate account and the district may withdraw the money from
1317	1317	the account to replace the reduction in state aid.
1318	1318	(d) If the amount of state aid to which the district is
1319	1319	entitled under this chapter and Chapter 42 is less than the amount
1320	1320	in the separate account, the difference must remain in the separate
1321	1321	account and the commissioner will again reduce the district's state
1322	1322	aid in the subsequent school year.
1323	1323	(e) If money remains in the separate account after three
1324	1324	school years, the remaining money in the account is considered part
1325	1325	of the district's revenue under Sections 42.253(a)(2) and (3) and
1326	1326	the district is subject to Section 42.254(a).
1327	1327	(f) If at any time money remains in the separate account and
1328	1328	the commissioner makes a determination under Section 41.010 that
1329	1329	the district is subject to Section 42.254(a), the remaining money
1330	1330	in the separate account must be included in determining:
1331	1331	(1) the amount the district is required to pay under
1332	1332	Section 41.009(3); or
1333	1333	(2) whether the district has taken sufficient action
1334	1334	under Section 41.009(1), (2), or (4).
1335	1335	Sec. 41.460. FAILURE TO COLLECT DELINQUENT MAINTENANCE AND
1336	1336	OPERATIONS TAXES. (a) If a district fails to collect a delinquent
1337	1337	maintenance and operations tax owed to the district for two years
1338	1338	after the year in which the tax is initially due, the collection of
1339	1339	the delinquent tax reverts to the state.
1340	1340	(b) The comptroller shall collect the delinquent
1341	1341	maintenance and operations tax on behalf of the district, with
1342	1342	penalties and interest owed, at the earliest opportunity.
1343	1343	(c) The attorney general shall assist the comptroller in the
1344	1344	collection of delinquent maintenance and operations taxes.
1345	1345	(d) If the attorney general cannot successfully collect the
1346	1346	delinquent maintenance and operations tax, penalties, and interest
1347	1347	in the first year in which the obligation reverts to the state, the
1348	1348	comptroller may contract with private attorneys for collection in
1349	1349	subsequent years, subject to the terms and limitations that apply
1350	1350	to a school district contracting with private attorneys for that
1351	1351	purpose.
1352	1352	(e) All taxes, penalties, and fees collected under this
1353	1353	section are included in the district's collections under Section
1354	1354	42.253(a)(3) in the year in which they are collected.
1355	1355	Sec. 41.461. ESTIMATES REQUIRED. (a) Not later than
1356	1356	October 1 of each even-numbered year:
1357	1357	(1) the agency shall submit to the legislature an
1358	1358	estimate of the tax rate and student enrollment of each school
1359	1359	district for the following biennium; and
1360	1360	(2) the comptroller shall submit to the legislature an
1361	1361	estimate of the total taxable value of all property in the state as
1362	1362	determined under Subchapter M, Chapter 403, Government Code, for
1363	1363	the following biennium.
1364	1364	(b) The agency and the comptroller shall update the
1365	1365	information provided to the legislature under Subsection (a) not
1366	1366	later than March 1 of each odd-numbered year.
1367	1367	SECTION 1.49. Section 42.255, Education Code, is
1368	1368	transferred to Subchapter L, Chapter 41, Education Code, as added
1369	1369	by this Act, redesignated as Section 41.462, Education Code, and
1370	1370	amended to read as follows:
1371	1371	Sec. 41.462 [42.255]. FALSIFICATION OF RECORDS; REPORT.
1372	1372	When, in the opinion of the agency's director of school audits,
1373	1373	audits or reviews of accounting, enrollment, or other records of a
1374	1374	school district reveal deliberate falsification of the records, or
1375	1375	violation of the provisions of this chapter or Chapter 42, through
1376	1376	which the district's share of state funds allocated under the
1377	1377	authority of this chapter and Chapter 42 would be, or has been,
1378	1378	illegally increased, the director shall promptly and fully report
1379	1379	the fact to the State Board of Education, the state auditor, and the
1380	1380	appropriate county attorney, district attorney, or criminal
1381	1381	district attorney.
1382	1382	SECTION 1.50. Section 42.259(g), Education Code, is
1383	1383	transferred to Subchapter L, Chapter 41, Education Code, as added
1384	1384	by this Act, redesignated as Section 41.463, Education Code, and
1385	1385	amended to read as follows:
1386	1386	Sec. 41.463. FOUNDATION SCHOOL FUND TRANSFERS. (a) The
1387	1387	commissioner shall adopt rules regarding the timing of payments
1388	1388	from the foundation school fund to each school district and
1389	1389	open-enrollment charter school.
1390	1390	(b) [(g)] The commissioner shall make all annual Foundation
1391	1391	School Program payments under this section for purposes described
1392	1392	by Sections 45.252(a)(1) and (2) before the deadline established
1393	1393	under Section 45.263(b) for payment of debt service on bonds.
1394	1394	Notwithstanding any other provision of this section, the
1395	1395	commissioner may make Foundation School Program payments under this
1396	1396	section after the deadline established under Section 45.263(b) only
1397	1397	if the commissioner has not received notice under Section 45.258
1398	1398	concerning a district's failure or inability to pay matured
1399	1399	principal or interest on bonds.
1400	1400	SECTION 1.51. Chapter 41, Education Code, is amended by
1401	1401	adding Subchapter M and adding a subchapter heading to read as
1402	1402	follows:
1403	1403	SUBCHAPTER M. SCHOOL FACILITIES INVENTORY AND STANDARDS
1404	1404	SECTION 1.52. Section 42.352, Education Code, is
1405	1405	transferred to Subchapter M, Chapter 41, Education Code, as added
1406	1406	by this Act, and redesignated as Section 41.501, Education Code, to
1407	1407	read as follows:
1408	1408	Sec. 41.501 [42.352]. STANDARDS. The State Board of
1409	1409	Education shall establish standards for adequacy of school
1410	1410	facilities. The standards shall include requirements related to
1411	1411	space, educational adequacy, and construction quality. All
1412	1412	facilities constructed after September 1, 1992, must meet the
1413	1413	standards in order to be financed with state or local tax funds.
1414	1414	SECTION 1.53. Section 42.002(b), Education Code, is amended
1415	1415	to read as follows:
1416	1416	(b) The Foundation School Program consists of:
1417	1417	(1) [two tiers that in combination provide for:
1418	1418	[(A)] sufficient financing to provide [for] all
1419	1419	school districts with the resources to provide a basic program of
1420	1420	education that is rated acceptable or higher under Section 39.054
1421	1421	and meets other applicable legal standards[;] and to provide all
1422	1422	school districts with
1423	1423	[(B)] substantially equal access to funds to
1424	1424	provide an enriched program; and
1425	1425	(2) a facilities component as provided by Chapter 46.
1426	1426	SECTION 1.54. The heading to Subchapter B, Chapter 42,
1427	1427	Education Code, is amended to read as follows:
1428	1428	SUBCHAPTER B. REGULAR PROGRAM [BASIC] ENTITLEMENT
1429	1429	SECTION 1.55. Sections 42.101(a) and (c), Education Code,
1430	1430	are amended to read as follows:
1431	1431	(a) For each student in average daily attendance, not
1432	1432	including the time students spend each day in special education
1433	1433	programs in an instructional arrangement other than mainstream or
1434	1434	career and technology education programs, for which an additional
1435	1435	allotment is made under Subchapter C, a district is entitled to a
1436	1436	basic [an] allotment equal to $______ , subject to adjustments
1437	1437	under Sections 42.102, 42.103, and 42.104 [the lesser of $4,765 or
1438	1438	the amount that results from the following formula:
1439	1439	[A = $4,765 X (DCR/MCR)
1440	1440	[where:
1441	1441	["A" is the allotment to which a district is entitled;
1442	1442	["DCR" is the district's compressed tax rate, which is the
1443	1443	product of the state compression percentage, as determined under
1444	1444	Section 42.2516, multiplied by the maintenance and operations tax
1445	1445	rate adopted by the district for the 2005 tax year; and
1446	1446	["MCR" is the state maximum compressed tax rate, which is the
1447	1447	product of the state compression percentage, as determined under
1448	1448	Section 42.2516, multiplied by $1.50].
1449	1449	(c) The basic allotment is multiplied by the cost of
1450	1450	education index under Section 42.102 and, if applicable, adjusted
1451	1451	by the small district adjustment under Section 42.103 to calculate
1452	1452	a district's adjusted allotment for purposes of the regular program
1453	1453	entitlement under this chapter and the special program allotments
1454	1454	under Subchapter C [This subsection applies to a school district
1455	1455	for which the compressed tax rate ("DCR") is determined in
1456	1456	accordance with Subsection (a-1). Any reduction in the district's
1457	1457	adopted maintenance and operations tax rate is applied to the
1458	1458	following components of the district's tax rate in the order
1459	1459	specified:
1460	1460	[(1) tax effort described by Section 42.302(a-1)(2);
1461	1461	[(2) tax effort described by Section 42.302(a-1)(1);
1462	1462	and
1463	1463	[(3) tax effort included in the determination of the
1464	1464	district's compressed tax rate ("DCR") under Subsection (a-1)].
1465	1465	SECTION 1.56. Section 42.102(a), Education Code, is amended
1466	1466	to read as follows:
1467	1467	(a) The basic allotment for each district is multiplied by
1468	1468	the revised cost of education adjustment determined under Section
1469	1469	41.301 [adjusted] to reflect the geographic variation in known
1470	1470	resource costs and costs of education due to factors beyond the
1471	1471	control of the school district.
1472	1472	SECTION 1.57. Section 42.103, Education Code, is amended to
1473	1473	read as follows:
1474	1474	Sec. 42.103. SMALL [AND MID-SIZED] DISTRICT ADJUSTMENT.
1475	1475	(a) The small district adjustment is intended to account for the
1476	1476	increased per student cost of education in districts with fewer
1477	1477	than 5,000 students.
1478	1478	(b) The basic allotment for certain small [and mid-sized]
1479	1479	districts is adjusted in accordance with this section. In this
1480	1480	section:
1481	1481	(1) "AA" is the district's adjusted allotment per
1482	1482	student;
1483	1483	(2) "ADA" is the number of students in average daily
1484	1484	attendance for which the district is entitled to an allotment under
1485	1485	Section 42.101; and
1486	1486	(3) "ABA" is the adjusted basic allotment determined
1487	1487	under Section 42.102.
1488	1488	(c) [(b)] The basic allotment of a school district that
1489	1489	[contains at least 300 square miles and] has not more than 5,000
1490	1490	[1,600] students in average daily attendance is adjusted by
1491	1491	applying the following formula that results in the greatest
1492	1492	adjusted allotment:
1493	1493	(1) AA = (1 + ((1,600 - ADA) X .0004)) X ABA;
1494	1494	[(c) The basic allotment of a school district that contains
1495	1495	less than 300 square miles and has not more than 1,600 students in
1496	1496	average daily attendance is adjusted by applying the formula:
1497	1497	[AA = (1 + ((1,600 - ADA) X .00025)) X ABA
1498	1498	[(d) The basic allotment of a school district that offers a
1499	1499	kindergarten through grade 12 program and has less than 5,000
1500	1500	students in average daily attendance is adjusted by applying the
1501	1501	formula, of the following formulas, that results in the greatest
1502	1502	adjusted allotment:
1503	1503	[(1) the formula in Subsection (b) or (c) for which the
1504	1504	district is eligible;] or
1505	1505	(2) AA = (1 + ((5,000 - ADA) X .000025)) X ABA.
1506	1506	SECTION 1.58. Subchapter B, Chapter 42, Education Code, is
1507	1507	amended by adding a new Section 42.104 to read as follows:
1508	1508	Sec. 42.104. SPARSITY ADJUSTMENT. Notwithstanding
1509	1509	Sections 42.101, 42.102, and 42.103, a school district that has
1510	1510	fewer than 130 students in average daily attendance shall be
1511	1511	provided an adjusted allotment under the applicable provisions of
1512	1512	Section 41.302.
1513	1513	SECTION 1.59. Section 42.151(a), Education Code, is amended
1514	1514	to read as follows:
1515	1515	(a) For each student in average daily attendance in a
1516	1516	special education program under Subchapter A, Chapter 29, in a
1517	1517	mainstream instructional arrangement, a school district is
1518	1518	entitled to an annual allotment equal to the adjusted [basic]
1519	1519	allotment multiplied by 1.1. For each full-time equivalent student
1520	1520	in average daily attendance in a special education program under
1521	1521	Subchapter A, Chapter 29, in an instructional arrangement other
1522	1522	than a mainstream instructional arrangement, a district is entitled
1523	1523	to an annual allotment equal to the adjusted [basic] allotment
1524	1524	multiplied by a weight determined according to instructional
1525	1525	arrangement as follows:
1526	1526	Homebound5.0
1527	1527	Hospital class3.0
1528	1528	Speech therapy5.0
1529	1529	Resource room3.0
1530	1530	Self-contained, mild and moderate,
1531	1531	regular campus3.0
1532	1532	Self-contained, severe, regular campus3.0
1533	1533	Off home campus2.7
1534	1534	Nonpublic day school1.7
1535	1535	Vocational adjustment class2.3
1536	1536	SECTION 1.60. Section 42.151(f), Education Code, is
1537	1537	redesignated as Section 42.151(c), Education Code, to read as
1538	1538	follows:
1539	1539	(c) [(f)] In this section, "full-time equivalent student"
1540	1540	means 30 hours of contact a week between a special education student
1541	1541	and special education program personnel.
1542	1542	SECTION 1.61. Section 42.152(a), Education Code, is amended
1543	1543	to read as follows:
1544	1544	(a) For each student who is educationally disadvantaged or
1545	1545	who is a student who does not have a disability and resides in a
1546	1546	residential placement facility in a district in which the student's
1547	1547	parent or legal guardian does not reside, a district is entitled to
1548	1548	an annual allotment equal to the adjusted [basic] allotment
1549	1549	multiplied by 0.2, and by 2.41 for each full-time equivalent
1550	1550	student who is in a remedial and support program under Section
1551	1551	29.081 because the student is pregnant.
1552	1552	SECTION 1.62. Section 42.152(b-1), Education Code, is
1553	1553	redesignated as Section 42.152(c), Education Code, to read as
1554	1554	follows:
1555	1555	(c) [(b-1)] A student receiving a full-time virtual
1556	1556	education through the state virtual school network may be included
1557	1557	in determining the number of educationally disadvantaged students
1558	1558	under Subsection (b) if the school district submits to the
1559	1559	commissioner a plan detailing the enhanced services that will be
1560	1560	provided to the student and the commissioner approves the plan.
1561	1561	SECTION 1.63. Section 42.153(a), Education Code, is amended
1562	1562	to read as follows:
1563	1563	(a) For each student in average daily attendance in a
1564	1564	bilingual education or special language program under Subchapter B,
1565	1565	Chapter 29, a district is entitled to an annual allotment equal to
1566	1566	the adjusted [basic] allotment multiplied by 0.1.
1567	1567	SECTION 1.64. Section 42.154(a), Education Code, is amended
1568	1568	to read as follows:
1569	1569	(a) For each full-time equivalent student in average daily
1570	1570	attendance in an approved career and technology education program
1571	1571	in grades nine through 12 or in career and technology education
1572	1572	programs for students with disabilities in grades seven through 12,
1573	1573	a district is entitled to:
1574	1574	(1) an annual allotment equal to the adjusted [basic]
1575	1575	allotment multiplied by a weight of 1.35; and
1576	1576	(2) $50, if the student is enrolled in:
1577	1577	(A) two or more advanced career and technology
1578	1578	education classes for a total of three or more credits; or
1579	1579	(B) an advanced course as part of a tech-prep
1580	1580	program under Subchapter T, Chapter 61.
1581	1581	SECTION 1.65. Chapter 42, Education Code, is amended by
1582	1582	adding Subchapter D and adding a subchapter heading to read as
1583	1583	follows:
1584	1584	SUBCHAPTER D. TRANSPORTATION ALLOTMENT
1585	1585	SECTION 1.66. Sections 42.155(a), (b), (c), and (j),
1586	1586	Education Code, are transferred to Subchapter D, Chapter 42,
1587	1587	Education Code, as added by this Act, redesignated as Section
1588	1588	42.201, Education Code, and amended to read as follows:
1589	1589	Sec. 42.201. TRANSPORTATION ALLOTMENT. (a) Each district
1590	1590	or county operating a transportation system is entitled to
1591	1591	allotments for transportation costs as provided by this section.
1592	1592	(b) As used in this section:
1593	1593	(1) "Regular eligible student" means a student who
1594	1594	resides two or more miles from the student's campus of regular
1595	1595	attendance, measured along the shortest route that may be traveled
1596	1596	on public roads, and who is not classified as a student eligible for
1597	1597	special education services.
1598	1598	(2) "Eligible special education student" means a
1599	1599	student who is eligible for special education services under
1600	1600	Section 29.003 and who would be unable to attend classes without
1601	1601	special transportation services.
1602	1602	(3) "Linear density" means the average number of
1603	1603	regular eligible students transported daily, divided by the
1604	1604	approved daily route miles traveled by the respective
1605	1605	transportation system.
1606	1606	(c) Each district or county operating a regular
1607	1607	transportation system is entitled to an allotment based on the
1608	1608	daily cost per regular eligible student of operating and
1609	1609	maintaining the regular transportation system and the linear
1610	1610	density of that system. In determining the cost, the commissioner
1611	1611	shall give consideration to factors affecting the actual cost of
1612	1612	providing these transportation services in each district or county.
1613	1613	The average actual cost is to be computed by the commissioner and
1614	1614	included for consideration by the legislature in the General
1615	1615	Appropriations Act. The allotment per mile of approved route may
1616	1616	not exceed the amount set by appropriation.
1617	1617	(d) [(j)] The Texas School for the Deaf is entitled to an
1618	1618	allotment under this section. The commissioner shall determine the
1619	1619	appropriate allotment.
1620	1620	SECTION 1.67. Section 42.251, Education Code, is amended to
1621	1621	read as follows:
1622	1622	Sec. 42.251. FINANCING; GENERAL RULE. (a) A school
1623	1623	district's Foundation School Program maintenance and operations
1624	1624	cost is the [The] sum of:
1625	1625	(1) the district's effective tax rate, as provided
1626	1626	under Section 42.2511, multiplied by the sum of the regular program
1627	1627	entitlement to which the district is entitled [basic allotment]
1628	1628	under Subchapter B and the sum of the special allotments under
1629	1629	Subchapter C to which the district is entitled, computed in
1630	1630	accordance with this chapter; and
1631	1631	(2) the transportation allotment under Subchapter D[,
1632	1632	constitute the tier one allotments].
1633	1633	(b) The sum of the Foundation School Program maintenance and
1634	1634	operations costs for all accredited school districts in this state
1635	1635	constitutes [tier one allotments and the guaranteed yield
1636	1636	allotments under Subchapter F, computed in accordance with this
1637	1637	chapter, constitute] the total maintenance and operations cost of
1638	1638	the Foundation School Program.
1639	1639	(c) [(b)] The program shall be financed by:
1640	1640	(1) state available school funds distributed in
1641	1641	accordance with law [ad valorem tax revenue generated by an
1642	1642	equalized uniform school district effort];
1643	1643	(2) ad valorem tax revenue generated by local school
1644	1644	district effort [in excess of the equalized uniform school district
1645	1645	effort]; and
1646	1646	(3) [state available school funds distributed in
1647	1647	accordance with law; and
1648	1648	[(4)] state funds appropriated for the purposes of
1649	1649	public school education and allocated to each district in an amount
1650	1650	sufficient to finance the maintenance and operations cost of each
1651	1651	district's Foundation School Program not covered by other funds
1652	1652	specified in this subsection.
1653	1653	SECTION 1.68. Subchapter E, Chapter 42, Education Code, is
1654	1654	amended by adding Section 42.2511 to read as follows:
1655	1655	Sec. 42.2511. EFFECTIVE TAX RATE. (a) A district's
1656	1656	effective tax rate is the district's adopted maintenance and
1657	1657	operations tax rate per $100 of taxable value multiplied by the
1658	1658	ratio of the district's appraised value of property for maintenance
1659	1659	and operations tax purposes to the taxable value of property in the
1660	1660	school district for the current tax year determined under
1661	1661	Subchapter M, Chapter 403, Government Code.
1662	1662	(b) The effective tax rate for an open-enrollment charter
1663	1663	school under Chapter 12 is the state average effective tax rate.
1664	1664	SECTION 1.69. The heading to Section 42.252, Education
1665	1665	Code, is amended to read as follows:
1666	1666	Sec. 42.252. LOCAL SHARE OF PROGRAM COST [(TIER ONE)].
1667	1667	SECTION 1.70. Section 42.252(a), Education Code, is amended
1668	1668	to read as follows:
1669	1669	(a) Each school district's share of the maintenance and
1670	1670	operations cost of the Foundation School Program is the sum of the
1671	1671	district's distribution from the state available school fund and
1672	1672	the district's maintenance and operations tax collections for the
1673	1673	current year [determined by the following formula:
1674	1674	[LFA = TR X DPV
1675	1675	[where:
1676	1676	["LFA" is the school district's local share;
1677	1677	["TR" is a tax rate which for each hundred dollars of
1678	1678	valuation is an effective tax rate of the amount equal to the
1679	1679	product of the state compression percentage, as determined under
1680	1680	Section 42.2516, multiplied by the lesser of:
1681	1681	[(1) $1.50; or
1682	1682	[(2) the maintenance and operations tax rate adopted
1683	1683	by the district for the 2005 tax year; and
1684	1684	["DPV" is the taxable value of property in the school
1685	1685	district for the preceding tax year determined under Subchapter M,
1686	1686	Chapter 403, Government Code].
1687	1687	SECTION 1.71. Sections 42.253(a) and (c), Education Code,
1688	1688	are amended to read as follows:
1689	1689	(a) For each school year the commissioner shall determine:
1690	1690	(1) the amount of money to which a school district is
1691	1691	entitled under Subchapters B, [and] C, and D;
1692	1692	(2) [the amount of money to which a school district is
1693	1693	entitled under Subchapter F;
1694	1694	[(3)] the amount of money allocated to the district
1695	1695	from the available school fund; and
1696	1696	(3) [(4) the amount of each district's tier one local
1697	1697	share under Section 42.252; and
1698	1698	[(5)] the amount of each district's maintenance and
1699	1699	operations tax collections [tier two local share under Section
1700	1700	42.302].
1701	1701	(c) Each school district is entitled to an amount equal to
1702	1702	the difference for that district between Subsection [the sum of
1703	1703	Subsections] (a)(1) [and (a)(2)] and the sum of Subsections (a)(2)
1704	1704	and (a)(3)[, (a)(4), and (a)(5)].
1705	1705	SECTION 1.72. Section 42.254, Education Code, is amended to
1706	1706	read as follows:
1707	1707	Sec. 42.254. OPTIONS TO ENSURE EFFICIENCY OF FOUNDATION
1708	1708	SCHOOL PROGRAM [ESTIMATES REQUIRED]. (a) If a school district's
1709	1709	total revenue under Sections 42.253(a)(2) and (3) exceeds the
1710	1710	district's entitlement under Section 42.253(a)(1), a district may
1711	1711	choose to exercise one or more options under Subchapter B, C, D, or
1712	1712	E, Chapter 41, to eliminate all excess revenue. If the district
1713	1713	fails to elect an option, the commissioner shall exercise an option
1714	1714	under Subchapter F or G, Chapter 41, to reduce the district's
1715	1715	anticipated revenue by an amount sufficient to eliminate any excess
1716	1716	revenue [Not later than October 1 of each even-numbered year:
1717	1717	[(1) the agency shall submit to the legislature an
1718	1718	estimate of the tax rate and student enrollment of each school
1719	1719	district for the following biennium; and
1720	1720	[(2) the comptroller shall submit to the legislature
1721	1721	an estimate of the total taxable value of all property in the state
1722	1722	as determined under Subchapter M, Chapter 403, Government Code, for
1723	1723	the following biennium].
1724	1724	(b) The total amount to be remitted to the state by a
1725	1725	district under Subchapter D, Chapter 41, must at least equal the
1726	1726	amount by which the district's total revenue under Sections
1727	1727	42.253(a)(2) and (3) exceeds the district's entitlement under
1728	1728	Section 42.253(a)(1) [The agency and the comptroller shall update
1729	1729	the information provided to the legislature under Subsection (a)
1730	1730	not later than March 1 of each odd-numbered year].
1731	1731	(c) If a district subject to this section chooses another
1732	1732	option to achieve the efficiency of the system under Chapter 41 or
1733	1733	the commissioner takes action under Subchapter F or G, Chapter 41,
1734	1734	any district involved may not have a resulting amount of total
1735	1735	revenue under Sections 42.253(a)(2) and (3) that exceeds the
1736	1736	district's entitlement under Section 42.253(a)(1).
1737	1737	SECTION 1.73. The heading to Section 42.258, Education
1738	1738	Code, is amended to read as follows:
1739	1739	Sec. 42.258. RECOVERY OF OVERALLOCATED FUNDS OR
1740	1740	INSUFFICIENT PAYMENTS.
1741	1741	SECTION 1.74. Section 42.258(a), Education Code, is amended
1742	1742	to read as follows:
1743	1743	(a) If a school district has received an overallocation of
1744	1744	state funds or has failed to make sufficient payments to the state
1745	1745	under Section 42.254, the agency shall, by withholding from
1746	1746	subsequent allocations of state funds or increasing the amount of
1747	1747	payments owed for the current or subsequent school year or by
1748	1748	requesting and obtaining a refund, recover from the district an
1749	1749	amount equal to the overallocation or insufficient payments.
1750	1750	SECTION 1.75. The heading to Subchapter F, Chapter 42,
1751	1751	Education Code, is amended to read as follows:
1752	1752	SUBCHAPTER F. CALCULATION OF WEIGHTED AVERAGE DAILY ATTENDANCE
1753	1753	[GUARANTEED YIELD PROGRAM]
1754	1754	SECTION 1.76. Section 42.301, Education Code, is amended to
1755	1755	read as follows:
1756	1756	Sec. 42.301. PURPOSE. The purpose of the calculation of
1757	1757	weighted students under this subchapter is to provide a method of
1758	1758	comparison of student funding under [the guaranteed yield component
1759	1759	of] the Foundation School Program. By accounting for the state
1760	1760	recognized and funded uncontrollable cost differences in educating
1761	1761	students, the use of weighted students in funding comparisons
1762	1762	reflects the state policy under Section 42.001. Weighted students
1763	1763	are not used in the determination of funding for school districts
1764	1764	[is to provide each school district with the opportunity to provide
1765	1765	the basic program and to supplement that program at a level of its
1766	1766	own choice. An allotment under this subchapter may be used for any
1767	1767	legal purpose other than capital outlay or debt service].
1768	1768	SECTION 1.77. The heading to Section 42.302, Education
1769	1769	Code, is amended to read as follows:
1770	1770	Sec. 42.302. CALCULATION OF WEIGHTED STUDENTS [ALLOTMENT].
1771	1771	SECTION 1.78. Section 42.302(a), Education Code, is amended
1772	1772	to read as follows:
1773	1773	(a) For comparing student funding under Section 42.301,
1774	1774	[Each school district is guaranteed a specified amount per weighted
1775	1775	student in state and local funds for each cent of tax effort over
1776	1776	that required for the district's local fund assignment up to the
1777	1777	maximum level specified in this subchapter. The amount of state
1778	1778	support, subject only to the maximum amount under Section 42.303,
1779	1779	is determined by the formula:
1780	1780	[GYA = (GL X WADA X DTR X 100) - LR
1781	1781	[where:
1782	1782	["GYA" is the guaranteed yield amount of state funds to be
1783	1783	allocated to the district;
1784	1784	["GL" is the dollar amount guaranteed level of state and
1785	1785	local funds per weighted student per cent of tax effort, which is an
1786	1786	amount described by Subsection (a-1) or a greater amount for any
1787	1787	year provided by appropriation;
1788	1788	["WADA" is] the number of students in weighted average daily
1789	1789	attendance[, which] is calculated by dividing the sum of the school
1790	1790	district's allotments under Subchapters B and C[, less any
1791	1791	allotment to the district for transportation, any allotment under
1792	1792	Section 42.158 or 42.160, and 50 percent of the adjustment under
1793	1793	Section 42.102,] by the basic allotment for the applicable year[;
1794	1794	["DTR" is the district enrichment tax rate of the school
1795	1795	district, which is determined by subtracting the amounts specified
1796	1796	by Subsection (b) from the total amount of maintenance and
1797	1797	operations taxes collected by the school district for the
1798	1798	applicable school year and dividing the difference by the quotient
1799	1799	of the district's taxable value of property as determined under
1800	1800	Subchapter M, Chapter 403, Government Code, or, if applicable,
1801	1801	under Section 42.2521, divided by 100; and
1802	1802	["LR" is the local revenue, which is determined by
1803	1803	multiplying "DTR" by the quotient of the district's taxable value
1804	1804	of property as determined under Subchapter M, Chapter 403,
1805	1805	Government Code, or, if applicable, under Section 42.2521, divided
1806	1806	by 100].
1807	1807	SECTION 1.79. The following provisions of the Education
1808	1808	Code are repealed:
1809	1809	(1) Section 41.002, as effective immediately before
1810	1810	the effective date of this Act;
1811	1811	(2) Sections 41.0031 and 41.0041;
1812	1812	(3) Section 41.006, as effective immediately before
1813	1813	the effective date of this Act;
1814	1814	(4) Section 41.092;
1815	1815	(5) Section 41.093(b-1);
1816	1816	(6) Section 41.0931;
1817	1817	(7) Section 41.097(b);
1818	1818	(8) Sections 41.098 and 41.099;
1819	1819	(9) Subchapter E, Chapter 41, as effective immediately
1820	1820	before the effective date of this Act;
1821	1821	(10) Section 41.157(d);
1822	1822	(11) Section 41.159(b);
1823	1823	(12) Sections 41.206(d), (e), (f), (g), (h), (i), (j),
1824	1824	and (k);
1825	1825	(13) Sections 41.207, 41.208, 41.209, and 41.210;
1826	1826	(14) Section 41.252(c);
1827	1827	(15) Section 42.009;
1828	1828	(16) Sections 42.101(a-1) and (a-2);
1829	1829	(17) Section 42.104, as effective immediately before
1830	1830	the effective date of this Act;
1831	1831	(18) Section 42.106;
1832	1832	(19) Section 42.151(l);
1833	1833	(20) Section 42.154(e);
1834	1834	(21) the heading to Section 42.155;
1835	1835	(22) Sections 42.1541, 42.156, 42.157, 42.158,
1836	1836	42.160, 42.2513, 42.2516, 42.2517, and 42.2518;
1837	1837	(23) Sections 42.252(a-1), (b), (c), and (d);
1838	1838	(24) Sections 42.2521, 42.2522, and 42.2523;
1839	1839	(25) Section 42.253(b);
1840	1840	(26) Sections 42.2531 and 42.257;
1841	1841	(27) Sections 42.258(a-1) and (b);
1842	1842	(28) Sections 42.259(a), (b), (c), (d), (e), and (f);
1843	1843	(29) Sections 42.2591, 42.260, and 42.262;
1844	1844	(30) Sections 42.302(a-1), (a-2), (b), (c), (d), (e),
1845	1845	and (f); and
1846	1846	(31) Sections 42.303, 42.304, and 42.4101.
1847	1847	SECTION 1.80. Any rule adopted by the commissioner of
1848	1848	education under Chapter 41 or 42, Education Code, before the
1849	1849	effective date of this Act continues to apply to Chapter 41 or 42,
1850	1850	Education Code, as amended by this Act, if Chapter 41 or 42,
1851	1851	Education Code, as amended by this Act, includes a section that is
1852	1852	substantially the same as a section of Chapter 41 or 42, Education
1853	1853	Code, that existed before the effective date of this Act.
1854	1854	ARTICLE 2. CONFORMING AMENDMENTS
1855	1855	[[[to be added at a later date]]]
1856	1856	ARTICLE 3. EFFECTIVE DATE
1857	1857	SECTION 3.01. This Act takes effect September 1, 2017