Texas 2017 - 85th 1st C.S.

Texas House Bill HB355 Compare Versions

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1	1	85S10559 CAE-F
2	2	By: White H.B. No. 355
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,
43	43	redesignated as Section 41.003, Education Code, and amended to read
44	44	as follows:
45	45	Sec. 41.003 [42.003]. STUDENT ELIGIBILITY. (a) A student
46	46	is entitled to the benefits of the Foundation School Program if, on
47	47	September 1 of the school year, the student:
48	48	(1) is 5 years of age or older and under 21 years of age
49	49	and has not graduated from high school, or is at least 21 years of
50	50	age and under 26 years of age and has been admitted by a school
51	51	district to complete the requirements for a high school diploma; or
52	52	(2) is at least 19 years of age and under 26 years of
53	53	age and is enrolled in an adult high school diploma and industry
54	54	certification charter school pilot program under Section 29.259.
55	55	(b) A student to whom Subsection (a) does not apply is
56	56	entitled to the benefits of the Foundation School Program if the
57	57	student is enrolled in a prekindergarten class under Section 29.153
58	58	or Subchapter E-1, Chapter 29. Notwithstanding any other provision
59	59	of this title, the commissioner may provide a school district with
60	60	full-day funding under the Foundation School Program for certain
61	61	groups of prekindergarten students in accordance with rules adopted
62	62	by the commissioner.
63	63	(c) A child may be enrolled in the first grade if the child
64	64	is at least six years of age at the beginning of the school year of
65	65	the district or has been enrolled in the first grade or has
66	66	completed kindergarten in the public schools in another state
67	67	before transferring to a public school in this state.
68	68	(d) Notwithstanding Subsection (a), a student younger than
69	69	five years of age is entitled to the benefits of the Foundation
70	70	School Program if:
71	71	(1) the student performs satisfactorily on the
72	72	assessment instrument administered under Section 39.023(a) to
73	73	students in the third grade; and
74	74	(2) the district has adopted a policy for admitting
75	75	students younger than five years of age.
76	76	SECTION 1.05. Section 42.005, Education Code, as amended by
77	77	H.B. 2442 and S.B. 2084, Acts of the 85th Legislature, Regular
78	78	Session, 2017, is transferred to Subchapter A, Chapter 41,
79	79	Education Code, redesignated as Section 41.004, Education Code, and
80	80	amended to read as follows:
81	81	Sec. 41.004 [42.005]. AVERAGE DAILY ATTENDANCE. (a) In
82	82	this chapter, average daily attendance is:
83	83	(1) the quotient of the sum of attendance for each day
84	84	of the minimum number of days of instruction as described under
85	85	Section 25.081(a) divided by the minimum number of days of
86	86	instruction;
87	87	(2) for a district that operates under a flexible year
88	88	program under Section 29.0821, the quotient of the sum of
89	89	attendance for each actual day of instruction as permitted by
90	90	Section 29.0821(b)(1) divided by the number of actual days of
91	91	instruction as permitted by Section 29.0821(b)(1);
92	92	(3) for a district that operates under a flexible
93	93	school day program under Section 29.0822, the average daily
94	94	attendance as calculated by the commissioner in accordance with
95	95	Sections 29.0822(d) and (d-1); or
96	96	(4) for a district that operates a half-day program,
97	97	one-half of the average daily attendance calculated under
98	98	Subdivision (1).
99	99	(b) A school district that experiences a decline of two
100	100	percent or more in average daily attendance shall be funded on the
101	101	basis of:
102	102	(1) the actual average daily attendance of the
103	103	preceding school year, if the decline is the result of the closing
104	104	or reduction in personnel of a military base; or
105	105	(2) [subject to Subsection (e),] an average daily
106	106	attendance not to exceed 98 percent of the actual average daily
107	107	attendance of the preceding school year, if the decline is not the
108	108	result of the closing or reduction in personnel of a military base.
109	109	(c) The commissioner shall adjust the average daily
110	110	attendance of a school district that has a significant percentage
111	111	of students who are migratory children as defined by 20 U.S.C.
112	112	Section 6399.
113	113	(d) Except as provided by Section 41.005(e), the [The]
114	114	commissioner may adjust the average daily attendance of a school
115	115	district in which a disaster, flood, extreme weather condition,
116	116	fuel curtailment, or other calamity has a significant effect on the
117	117	district's attendance.
118	118	(e) [For each school year, the commissioner shall adjust the
119	119	average daily attendance of school districts that are entitled to
120	120	funding on the basis of an adjusted average daily attendance under
121	121	Subsection (b)(2) so that:
122	122	[(1) all districts are funded on the basis of the same
123	123	percentage of the preceding year's actual average daily attendance;
124	124	and
125	125	[(2) the total cost to the state does not exceed the
126	126	amount specifically appropriated for that year for purposes of
127	127	Subsection (b)(2).
128	128	[(f)] An open-enrollment charter school is not entitled to
129	129	funding based on an adjustment under Subsection (b)(2).
130	130	(f) [(g)] If a student may receive course credit toward the
131	131	student's high school academic requirements and toward the
132	132	student's higher education academic requirements for a single
133	133	course, including a course provided under Section 28.009 by a
134	134	public institution of higher education, the time during which the
135	135	student attends the course shall be counted as part of the minimum
136	136	number of instructional hours required for a student to be
137	137	considered a full-time student in average daily attendance for
138	138	purposes of this section.
139	139	(g) [(g-1)] The commissioner shall adopt rules to calculate
140	140	average daily attendance for students participating in a blended
141	141	learning program in which classroom instruction is supplemented
142	142	with applied workforce learning opportunities, including
143	143	participation of students in internships, externships, and
144	144	apprenticeships.
145	145	(h) Subject to rules adopted by the commissioner under
146	146	Section 41.006(b) [42.0052(b)], time that a student participates in
147	147	an off-campus instructional program approved under Section
148	148	41.006(a) [42.0052(a)] shall be counted as part of the minimum
149	149	number of instructional hours required for a student to be
150	150	considered a full-time student in average daily attendance for
151	151	purposes of this section.
152	152	(i) A district or a charter school operating under Chapter
153	153	12 that operates a prekindergarten program is eligible to receive
154	154	one-half of average daily attendance under Subsection (a) if the
155	155	district's or charter school's prekindergarten program provides at
156	156	least 32,400 minutes of instructional time to students.
157	157	(j) A district or charter school is eligible to earn full
158	158	average daily attendance under Subsection (a) if the district or
159	159	school provides at least 43,200 minutes of instructional time to
160	160	students enrolled in:
161	161	(1) a dropout recovery school or program operating
162	162	under Section 12.1141(c) or Section 39.0548;
163	163	(2) an alternative education program operating under
164	164	Section 37.008;
165	165	(3) a school program located at a day treatment
166	166	facility, residential treatment facility, psychiatric hospital, or
167	167	medical hospital;
168	168	(4) a school program offered at a correctional
169	169	facility; or
170	170	(5) a school operating under Section 29.259.
171	171	(k) A charter school operating under a charter granted under
172	172	Chapter 12 before January 1, 2015, is eligible to earn full average
173	173	daily attendance under Subsection (a), as that subsection existed
174	174	immediately before January 1, 2015, for:
175	175	(1) all campuses of the charter school operating
176	176	before January 1, 2015; and
177	177	(2) any campus or site expansion approved on or after
178	178	January 1, 2015, provided that the charter school received an
179	179	academic accountability performance rating of C or higher, and the
180	180	campus or site expansion is approved by the commissioner.
181	181	(l) A school district campus or charter school described by
182	182	Subsection (j) may operate more than one program and be eligible for
183	183	full average daily attendance for each program if the programs
184	184	operated by the district campus or charter school satisfy all
185	185	applicable state and federal requirements.
186	186	(m) The commissioner shall adopt rules necessary to
187	187	implement this section, including rules that:
188	188	(1) establish the minimum amount of instructional time
189	189	per day that allows a school district or charter school to be
190	190	eligible for full average daily attendance, which may differ based
191	191	on the instructional program offered by the district or charter
192	192	school;
193	193	(2) establish the requirements necessary for a school
194	194	district or charter school to be eligible for one-half of average
195	195	daily attendance, which may differ based on the instructional
196	196	program offered by the district or charter school; and
197	197	(3) proportionally reduce the average daily
198	198	attendance for a school district if any campus or instructional
199	199	program in the district provides fewer than the required minimum
200	200	minutes of instruction to students.
201	201	(n) To assist school districts in implementing this section
202	202	as amended by H.B. 2442, Acts of the 85th Legislature, Regular
203	203	Session, 2017, or similar legislation, the commissioner may waive a
204	204	requirement of this section or adopt rules to implement this
205	205	section. This subsection expires at the end of the 2018-2019 school
206	206	year.
207	207	SECTION 1.06. Sections 42.0051 and 42.0052, Education Code,
208	208	are transferred to Subchapter A, Chapter 41, Education Code,
209	209	redesignated as Sections 41.005 and 41.006, Education Code, and
210	210	amended to read as follows:
211	211	Sec. 41.005 [42.0051]. AVERAGE DAILY ATTENDANCE FOR
212	212	DISTRICTS IN DISASTER AREA. (a) From funds specifically
213	213	appropriated for the purpose or other funds available to the
214	214	commissioner for that purpose, the commissioner shall adjust the
215	215	average daily attendance of a school district all or part of which
216	216	is located in an area declared a disaster area by the governor under
217	217	Chapter 418, Government Code, if the district experiences a decline
218	218	in average daily attendance that is reasonably attributable to the
219	219	impact of the disaster.
220	220	(b) The adjustment must be sufficient to ensure that the
221	221	district receives funding comparable to the funding that the
222	222	district would have received if the decline in average daily
223	223	attendance reasonably attributable to the impact of the disaster
224	224	had not occurred.
225	225	(c) The commissioner shall make the adjustment required by
226	226	this section for the two-year period following the date of the
227	227	governor's initial proclamation or executive order declaring the
228	228	state of disaster.
229	229	(d) Section 41.004(b)(2) [42.005(b)(2)] does not apply to a
230	230	district that receives an adjustment under this section.
231	231	(e) A district that receives an adjustment under this
232	232	section may not receive any additional adjustment under Section
233	233	41.004(d) [42.005(d)] for the decline in average daily attendance
234	234	on which the adjustment under this section is based.
235	235	(f) For purposes of this title, a district's adjusted
236	236	average daily attendance under this section is considered to be the
237	237	district's average daily attendance as determined under Section
238	238	41.004 [42.005].
239	239	Sec. 41.006 [42.0052]. OFF-CAMPUS PROGRAMS APPROVED FOR
240	240	PURPOSES OF AVERAGE DAILY ATTENDANCE. (a) The commissioner may,
241	241	based on criteria developed by the commissioner, approve
242	242	instructional programs provided off campus by an entity other than
243	243	a school district or open-enrollment charter school as a program in
244	244	which participation by a student of a district or charter school may
245	245	be counted for purposes of determining average daily attendance in
246	246	accordance with Section 41.004(h) [42.005(h)].
247	247	(b) The commissioner shall adopt by rule verification and
248	248	reporting procedures concerning time spent by students
249	249	participating in instructional programs approved under Subsection
250	250	(a).
251	251	SECTION 1.07. Section 42.006, Education Code, as amended by
252	252	S.B. 490, S.B. 1153, and S.B. 1404, Acts of the 85th Legislature,
253	253	Regular Session, 2017, is transferred to Subchapter A, Chapter 41,
254	254	Education Code, redesignated as Section 41.007, Education Code, and
255	255	amended to read as follows:
256	256	Sec. 41.007 [42.006]. PUBLIC EDUCATION INFORMATION
257	257	MANAGEMENT SYSTEM (PEIMS). (a) Each school district shall
258	258	participate in the Public Education Information Management System
259	259	(PEIMS) and shall provide through that system information required
260	260	for the administration of this chapter and of other appropriate
261	261	provisions of this code.
262	262	(b) [(a-1)] The commissioner by rule shall require each
263	263	school district and open-enrollment charter school to report
264	264	through the Public Education Information Management System
265	265	information regarding the number of students enrolled in the
266	266	district or school who are identified as having dyslexia. The
267	267	agency shall maintain the information provided in accordance with
268	268	this subsection.
269	269	(c) [(a-2)] The commissioner by rule shall require each
270	270	school district and open-enrollment charter school to report
271	271	through the Public Education Information Management System
272	272	information regarding the availability of school counselors at each
273	273	campus. The commissioner's rules shall require a district or
274	274	school to report the number of full-time equivalent school
275	275	counselors providing counseling services at a campus. For purposes
276	276	of this subsection, "full-time equivalent school counselor" means
277	277	40 hours of counseling services a week. The agency shall maintain
278	278	the information provided in accordance with this subsection.
279	279	(d) [(a-3)] The commissioner by rule shall require each
280	280	school district and open-enrollment charter school to annually
281	281	report through the Public Education Information Management System
282	282	information regarding the total number of students, other than
283	283	students described by Subsection (e) [(a-4)], enrolled in the
284	284	district or school with whom the district or school, as applicable,
285	285	used intervention strategies, as that term is defined by Section
286	286	26.004, at any time during the year for which the report is made.
287	287	The agency shall maintain the information provided in accordance
288	288	with this subsection.
289	289	(e) [(a-4)] The commissioner by rule shall require each
290	290	school district and open-enrollment charter school to annually
291	291	report through the Public Education Information Management System
292	292	information regarding the total number of students enrolled in the
293	293	district or school to whom the district or school provided aids,
294	294	accommodations, or services under Section 504, Rehabilitation Act
295	295	of 1973 (29 U.S.C. Section 794), at any time during the year for
296	296	which the report is made. The agency shall maintain the information
297	297	provided in accordance with this subsection.
298	298	(f) [(a-2)] The commissioner by rule shall require each
299	299	school district and open-enrollment charter school to report
300	300	through the Public Education Information Management System
301	301	information for each campus of the district or school regarding:
302	302	(1) the availability of expanded learning
303	303	opportunities as described by Section 33.252; and
304	304	(2) the number of students participating in each of
305	305	the categories of expanded learning opportunities listed under
306	306	Section 33.252(b).
307	307	(g) [(b)] Each school district shall use a uniform
308	308	accounting system adopted by the commissioner for the data required
309	309	to be reported for the Public Education Information Management
310	310	System.
311	311	(h) [(c)] Annually, the commissioner shall review the
312	312	Public Education Information Management System and shall repeal or
313	313	amend rules that require school districts to provide information
314	314	through the Public Education Information Management System that is
315	315	not necessary. In reviewing and revising the Public Education
316	316	Information Management System, the commissioner shall develop
317	317	rules to ensure that the system:
318	318	(1) provides useful, accurate, and timely information
319	319	on student demographics and academic performance, personnel, and
320	320	school district finances;
321	321	(2) contains only the data necessary for the
322	322	legislature and the agency to perform their legally authorized
323	323	functions in overseeing the public education system; and
324	324	(3) does not contain any information related to
325	325	instructional methods, except as provided by Section 29.066 or
326	326	required by federal law.
327	327	(i) [(d)] The commissioner's rules must ensure that the
328	328	Public Education Information Management System links student
329	329	performance data to other related information for purposes of
330	330	efficient and effective allocation of scarce school resources, to
331	331	the extent practicable using existing agency resources and
332	332	appropriations.
333	333	SECTION 1.08. Section 42.007, Education Code, is
334	334	transferred to Subchapter A, Chapter 41, Education Code,
335	335	redesignated as Section 41.008, Education Code, and amended to read
336	336	as follows:
337	337	Sec. 41.008 [42.007]. EQUALIZED FUNDING ELEMENTS. (a) The
338	338	Legislative Budget Board shall adopt rules, subject to appropriate
339	339	notice and opportunity for public comment, for the calculation for
340	340	each year of a biennium of the qualified funding elements, in
341	341	accordance with Subsection (c), necessary to achieve the state
342	342	policy under Section 42.001.
343	343	(b) Before each regular session of the legislature, the
344	344	board shall, as determined by the board, report the equalized
345	345	funding elements to the commissioner and the legislature.
346	346	(c) The funding elements must include:
347	347	(1) a basic allotment for the purposes of Section
348	348	42.101 that[, when combined with the guaranteed yield component
349	349	provided by Subchapter F,] represents the cost per student of a
350	350	regular education program that meets all mandates of law and
351	351	regulation;
352	352	(2) adjustments designed to reflect the variation in
353	353	known resource costs and costs of education beyond the control of
354	354	school districts;
355	355	(3) appropriate program cost differentials and other
356	356	funding elements for the programs authorized under Subchapter C,
357	357	Chapter 42, with the program funding level expressed as dollar
358	358	amounts and as weights applied to the adjusted [basic] allotment
359	359	for the appropriate year;
360	360	(4) [the maximum guaranteed level of qualified state
361	361	and local funds per student for the purposes of Subchapter F;
362	362	[(5) the enrichment and facilities tax rate under
363	363	Subchapter F;
364	364	[(6)] the computation of students in weighted average
365	365	daily attendance under Section 42.302; and
366	366	(5) [(7)] the amount to be appropriated for the school
367	367	facilities assistance program under Chapter 46.
368	368	SECTION 1.09. Sections 41.003 and 41.004, Education Code,
369	369	are redesignated as Sections 41.009 and 41.010, Education Code, and
370	370	amended to read as follows:
371	371	Sec. 41.009 [41.003]. OPTIONS TO ENSURE EFFICIENCY OF
372	372	FOUNDATION SCHOOL PROGRAM [ACHIEVE EQUALIZED WEALTH LEVEL]. A
373	373	district to which Section 42.254(a) applies [with a wealth per
374	374	student that exceeds the equalized wealth level] may take any
375	375	combination of the following actions to comply with the
376	376	requirements of Section 42.254 [achieve the equalized wealth
377	377	level]:
378	378	(1) consolidation with another district as provided by
379	379	Subchapter B;
380	380	(2) detachment of territory as provided by Subchapter
381	381	C;
382	382	(3) payment to the state for the efficiency of the
383	383	Foundation School Program [purchase of average daily attendance
384	384	credit] as provided by Subchapter D; or
385	385	(4) [education of nonresident students as provided by
386	386	Subchapter E; or
387	387	[(5)] tax base consolidation with another district as
388	388	provided by Subchapter F.
389	389	Sec. 41.010 [41.004]. DETERMINATION OF FUNDING LEVELS
390	390	[ANNUAL REVIEW OF PROPERTY WEALTH]. (a) Not later than July 1 of
391	391	each year, the commissioner shall determine the estimated amount of
392	392	state and local funding for each school district for the following
393	393	school year under Section 42.253.
394	394	(b) Not later than July 15 of each year, [using the estimate
395	395	of enrollment under Section 42.254,] the commissioner shall review
396	396	the estimated entitlements and local revenue [wealth per student]
397	397	of school districts in the state and shall notify:
398	398	(1) each district to which Section 42.254(a) applies
399	399	[with wealth per student exceeding the equalized wealth level];
400	400	(2) each district to which the commissioner proposes
401	401	to annex property detached from a district notified under
402	402	Subdivision (1), if necessary, under Subchapter G; and
403	403	(3) each district to which the commissioner proposes
404	404	to consolidate a district notified under Subdivision (1), if
405	405	necessary, under Subchapter H.
406	406	(c) [(b)] If, before the dates provided by this subsection,
407	407	a district notified under Subsection (b)(1) [(a)(1)] has not
408	408	successfully exercised one or more options under Section 41.009 to
409	409	comply with Section 42.254(a) [41.003 that reduce the district's
410	410	wealth per student to a level equal to or less than the equalized
411	411	wealth level], the commissioner shall order the detachment of
412	412	property from that district as provided by Subchapter G. If that
413	413	detachment will not bring the district into full compliance with
414	414	Section 42.254(a) [reduce the district's wealth per student to a
415	415	level equal to or less than the equalized wealth level], the
416	416	commissioner may not detach property under Subchapter G but shall
417	417	order the consolidation of the district with one or more other
418	418	districts as provided by Subchapter H. An agreement under Section
419	419	41.009(1) or (2) [41.003(1) or (2)] must be executed not later than
420	420	September 1 immediately following the notice under Subsection (b)
421	421	[(a)]. An election for an option under Section 41.009(3) or (4)
422	422	[41.003(3), (4), or (5)] must be ordered before September 1
423	423	immediately following the notice under Subsection (b) [(a)].
424	424	(d) [(c)] A district notified under Subsection (b) [(a)]
425	425	may not adopt a tax rate for the tax year in which the district
426	426	receives the notice until the commissioner certifies that the
427	427	district is in compliance with Section 42.254(a) [has achieved the
428	428	equalized wealth level].
429	429	(e) [(d)] A detachment and annexation or consolidation
430	430	under this chapter:
431	431	(1) is effective for Foundation School Program funding
432	432	purposes for the school year that begins in the calendar year in
433	433	which the detachment and annexation or consolidation is agreed to
434	434	or ordered; and
435	435	(2) applies to the ad valorem taxation of property
436	436	beginning with the tax year in which the agreement or order is
437	437	effective.
438	438	SECTION 1.10. Section 41.005, Education Code, is
439	439	redesignated as Section 41.011, Education Code, to read as follows:
440	440	Sec. 41.011 [41.005]. COMPTROLLER AND APPRAISAL DISTRICT
441	441	COOPERATION. The chief appraiser of each appraisal district and
442	442	the comptroller shall cooperate with the commissioner and school
443	443	districts in implementing this chapter.
444	444	SECTION 1.11. Sections 41.007, 41.008, and 41.009,
445	445	Education Code, are redesignated as Sections 41.012, 41.013, and
446	446	41.014, Education Code, and amended to read as follows:
447	447	Sec. 41.012 [41.007]. COMMISSIONER TO APPROVE SUBSEQUENT
448	448	BOUNDARY CHANGES. A school district that is involved in an action
449	449	under this chapter that results in boundary changes to the district
450	450	or in the consolidation of tax bases is subject to consolidation,
451	451	detachment, or annexation under Chapter 13 only if the commissioner
452	452	certifies that the change under Chapter 13 will not result in a
453	453	district to which Section 42.254(a) applies [with a wealth per
454	454	student that exceeds the equalized wealth level].
455	455	Sec. 41.013 [41.008]. HOMESTEAD EXEMPTIONS. (a) The
456	456	governing board of a school district that results from
457	457	consolidation under this chapter, including a consolidated taxing
458	458	district under Subchapter F, for the tax year in which the
459	459	consolidation occurs may determine whether to adopt a homestead
460	460	exemption provided by Section 11.13, Tax Code, and may set the
461	461	amount of the exemption, if adopted, at any time before the school
462	462	district adopts a tax rate for that tax year. This section applies
463	463	only to an exemption that the governing board of a school district
464	464	is authorized to adopt or change in amount under Section 11.13, Tax
465	465	Code.
466	466	(b) This section prevails over any inconsistent provision
467	467	of Section 11.13, Tax Code, or other law.
468	468	Sec. 41.014 [41.009]. TAX ABATEMENTS. (a) A tax abatement
469	469	agreement executed by a school district that is involved in
470	470	consolidation or in detachment and annexation of territory under
471	471	this chapter is not affected and applies to the taxation of the
472	472	property covered by the agreement as if executed by the district
473	473	within which the property is included.
474	474	(b) The commissioner shall determine the taxable value
475	475	[wealth per student] of a school district under this chapter as if
476	476	any tax abatement agreement executed by a school district on or
477	477	after May 31, 1993, had not been executed.
478	478	SECTION 1.12. Section 41.010, Education Code, is
479	479	redesignated as Section 41.015, Education Code, to read as follows:
480	480	Sec. 41.015 [41.010]. TAX INCREMENT OBLIGATIONS. The
481	481	payment of tax increments under Chapter 311, Tax Code, is not
482	482	affected by the consolidation of territory or tax bases or by
483	483	annexation under this chapter. In each tax year a school district
484	484	paying a tax increment from taxes on property over which the
485	485	district has assumed taxing power is entitled to retain the same
486	486	percentage of the tax increment from that property that the
487	487	district in which the property was located before the consolidation
488	488	or annexation could have retained for the respective tax year.
489	489	SECTION 1.13. Section 41.011, Education Code, is
490	490	redesignated as Section 41.016, Education Code, and amended to read
491	491	as follows:
492	492	Sec. 41.016 [41.011]. CONTINGENCY. (a) If any of the
493	493	options described by Section 41.009 [41.003] as applied to a school
494	494	district are held invalid by a final decision of a court of
495	495	competent jurisdiction, a school district is entitled to exercise
496	496	any of the remaining valid options in accordance with a schedule
497	497	approved by the commissioner.
498	498	(b) If a final order of a court of competent jurisdiction
499	499	should hold each of the options provided by Section 41.009 [41.003]
500	500	invalid, the commissioner shall act under Subchapter G or H to
501	501	achieve compliance with Section 42.254(a) [the equalized wealth
502	502	level] only after notice and hearing is afforded to each school
503	503	district affected by the order. The commissioner shall adopt a plan
504	504	that least disrupts the affected school districts. If because the
505	505	exigency to adopt a plan prevents the commissioner from giving a
506	506	reasonable time for notice and hearing, the commissioner shall
507	507	timely give notice to and hold a hearing for the affected school
508	508	districts, but in no event less than 30 days from time of notice to
509	509	the date of hearing.
510	510	(c) If a final order of a court of competent jurisdiction
511	511	should hold an option provided by Section 41.009 [41.003] invalid
512	512	and order a refund to a district of any amounts paid by a district
513	513	choosing that option, the amount shall be refunded but held in
514	514	reserve and not expended by the district until released by order of
515	515	the commissioner. The commissioner shall order the release
516	516	immediately on the commissioner's determination that, through one
517	517	of the means provided by law, the district has achieved compliance
518	518	with Section 42.254(a) [the equalized wealth level]. The amount
519	519	released shall be deducted from any state aid payable to the
520	520	district according to a schedule adopted by the commissioner.
521	521	SECTION 1.14. Section 41.012, Education Code, is
522	522	redesignated as Section 41.017, Education Code, to read as follows:
523	523	Sec. 41.017 [41.012]. DATE OF ELECTIONS. An election under
524	524	this chapter for voter approval of an agreement entered by the board
525	525	of trustees shall be held on a Tuesday or Saturday not more than 45
526	526	days after the date of the agreement. Section 41.001, Election
527	527	Code, does not apply to the election.
528	528	SECTION 1.15. Section 41.013, Education Code, is
529	529	redesignated as Section 41.018, Education Code, to read as follows:
530	530	Sec. 41.018 [41.013]. PROCEDURE. (a) Except as provided
531	531	by Subchapter G, a decision of the commissioner under this chapter
532	532	is appealable under Section 7.057.
533	533	(b) Any order of the commissioner issued under this chapter
534	534	shall be given immediate effect and may not be stayed or enjoined
535	535	pending any appeal.
536	536	(c) Chapter 2001, Government Code, does not apply to a
537	537	decision of the commissioner under this chapter.
538	538	(d) On the request of the commissioner, the secretary of
539	539	state shall publish any rules adopted under this chapter in the
540	540	Texas Register and the Texas Administrative Code.
541	541	SECTION 1.16. Section 41.031, Education Code, is amended to
542	542	read as follows:
543	543	Sec. 41.031. AGREEMENT. The governing boards of any two or
544	544	more school districts may consolidate the districts by agreement in
545	545	accordance with this subchapter to establish a consolidated
546	546	district to which Section 42.254(a) does not apply [with a wealth
547	547	per student equal to or less than the equalized wealth level]. The
548	548	agreement is not effective unless the commissioner certifies that
549	549	Section 42.254(a) does not apply to the consolidated district[,] as
550	550	a result of actions taken under this chapter[, will have a wealth
551	551	per student equal to or less than the equalized wealth level].
552	552	SECTION 1.17. Sections 41.034(a) and (c), Education Code,
553	553	are amended to read as follows:
554	554	(a) For the first and second school years after creation of
555	555	a consolidated district under this subchapter, the commissioner
556	556	shall adjust allotments to the consolidated district to the extent
557	557	necessary to preserve the effects of an adjustment under Section
558	558	42.102, 42.103, or 42.104 [42.105] to which either of the
559	559	consolidating districts would have been entitled but for the
560	560	consolidation.
561	561	(c) Four or more districts that consolidate into one
562	562	district under this subchapter within a period of one year may elect
563	563	to receive incentive aid under this section or to receive incentive
564	564	aid for not more than five years under Subchapter G, Chapter 13.
565	565	[Incentive aid under this subsection may not provide the
566	566	consolidated district with more revenue in state and local funds
567	567	than the district would receive at the equalized wealth level.]
568	568	SECTION 1.18. Section 41.061, Education Code, is amended to
569	569	read as follows:
570	570	Sec. 41.061. AGREEMENT. (a) By agreement of the governing
571	571	boards of two school districts, territory may be detached from one
572	572	of the districts and annexed to the other district if[,] after the
573	573	action Section 42.254(a) does not apply to [:
574	574	[(1)] the [wealth per student of the] district from
575	575	which territory is detached or [is equal to or less than the
576	576	equalized wealth level; and
577	577	[(2)] the [wealth per student of the] district to
578	578	which territory is annexed [is not greater than the greatest level
579	579	for which funds are provided under Subchapter F, Chapter 42].
580	580	(b) The agreement is not effective unless the commissioner
581	581	certifies that, after all actions taken under this chapter, Section
582	582	42.254(a) does not apply to [the wealth per student of] each
583	583	district involved [will be equal to or less than the applicable
584	584	level permitted by Subsection (a)].
585	585	SECTION 1.19. The heading to Subchapter D, Chapter 41,
586	586	Education Code, is amended to read as follows:
587	587	SUBCHAPTER D. PAYMENT TO STATE FOR EFFICIENCY OF FOUNDATION SCHOOL
588	588	PROGRAM [PURCHASE OF ATTENDANCE CREDIT]
589	589	SECTION 1.20. Section 41.091, Education Code, is amended to
590	590	read as follows:
591	591	Sec. 41.091. AGREEMENT. A school district to which Section
592	592	42.254(a) applies [with a wealth per student that exceeds the
593	593	equalized wealth level] may execute an agreement with the
594	594	commissioner to make payments to the state or have deductions made
595	595	to funds owed by the state to the district [purchase attendance
596	596	credits] in an amount sufficient to comply with the requirements of
597	597	Section 42.254[, in combination with any other actions taken under
598	598	this chapter, to reduce the district's wealth per student to a level
599	599	that is equal to or less than the equalized wealth level].
600	600	SECTION 1.21. Sections 41.093(a) and (c), Education Code,
601	601	are amended to read as follows:
602	602	(a) The [Subject to Subsection (b-1), the cost of each
603	603	credit is an] amount of payments made by a district or funds
604	604	withheld from a district as provided by Section 41.091 must be at
605	605	least equal to the amount by which the district's total revenue
606	606	under Sections 42.253(a)(2) and (3) exceeds the district's
607	607	entitlement under Section 42.253(a)(1) [greater of:
608	608	[(1) the amount of the district's maintenance and
609	609	operations tax revenue per student in weighted average daily
610	610	attendance for the school year for which the contract is executed;
611	611	or
612	612	[(2) the amount of the statewide district average of
613	613	maintenance and operations tax revenue per student in weighted
614	614	average daily attendance for the school year preceding the school
615	615	year for which the contract is executed].
616	616	(c) The amount of maintenance and operations tax revenue
617	617	[cost of an attendance credit] for a school district is computed
618	618	using the final tax collections of the district.
619	619	SECTION 1.22. Section 41.094(a), Education Code, is amended
620	620	to read as follows:
621	621	(a) If a [A] school district agrees to make payments to the
622	622	state under this subchapter, the payments shall be made [pay for
623	623	credits purchased] in equal monthly installments [payments] as
624	624	determined by the commissioner beginning February 15 and ending
625	625	August 15 of the school year for which the agreement is in effect.
626	626	SECTION 1.23. Section 41.095, Education Code, is amended to
627	627	read as follows:
628	628	Sec. 41.095. DURATION. An agreement under this subchapter
629	629	[section] is valid for one school year and, subject to Section
630	630	41.096, may be renewed annually.
631	631	SECTION 1.24. Section 41.096(b), Education Code, is amended
632	632	to read as follows:
633	633	(b) The ballot shall be printed to permit voting for or
634	634	against the proposition: "Authorizing the board of trustees of
635	635	________ School District to make payments to [purchase attendance
636	636	credits from] the state with local tax revenues to prevent
637	637	detachment of property within the district or consolidation of the
638	638	district by the commissioner for the efficiency of the state
639	639	education system."
640	640	SECTION 1.25. The heading to Section 41.097, Education
641	641	Code, is amended to read as follows:
642	642	Sec. 41.097. PAYMENT [CREDIT] FOR APPRAISAL COSTS.
643	643	SECTION 1.26. Section 41.097(a), Education Code, is amended
644	644	to read as follows:
645	645	(a) Using funds received from a school district [The total
646	646	amount required under Section 41.093 for a district to purchase
647	647	attendance credits] under this subchapter for any school year, the
648	648	state shall pay to the appraisal district or districts in which the
649	649	school district participates [is reduced by] an amount equal to the
650	650	product of the school district's total costs under Section 6.06,
651	651	Tax Code, for the appraisal district or districts in which it
652	652	participates multiplied by a percentage that is computed by
653	653	dividing the total amount required under Section 41.093 by the
654	654	total amount of taxes imposed by [in] the district for that year on
655	655	property in the appraisal district, less any amounts paid into a tax
656	656	increment fund under Chapter 311, Tax Code.
657	657	SECTION 1.27. Section 41.151, Education Code, is amended to
658	658	read as follows:
659	659	Sec. 41.151. AGREEMENT. The board of trustees of two or
660	660	more school districts may execute an agreement to conduct an
661	661	election on the creation of a consolidated taxing district for the
662	662	maintenance and operation of the component school districts. The
663	663	agreement is subject to approval by the commissioner. The
664	664	agreement is not effective unless the commissioner certifies that
665	665	Section 42.254(a) does not apply to the consolidated taxing
666	666	district [will have a wealth per student equal to or less than the
667	667	equalized wealth level] after all actions taken under this chapter.
668	668	SECTION 1.28. Section 41.202(a), Education Code, is amended
669	669	to read as follows:
670	670	(a) For purposes of this subchapter, the taxable value of an
671	671	individual parcel or other item of property and the total taxable
672	672	value of property in a school district resulting from the
673	673	detachment of property from or annexation of property to that
674	674	district is determined by applying the appraisal ratio for the
675	675	appropriate category of property determined under Subchapter M,
676	676	Chapter 403, Government Code, for the current [preceding] tax year
677	677	to the taxable value of the detached or annexed property determined
678	678	under Title 1, Tax Code, for the current [preceding] tax year.
679	679	SECTION 1.29. Section 41.205, Education Code, is amended to
680	680	read as follows:
681	681	Sec. 41.205. DETACHMENT OF PROPERTY. (a) The commissioner
682	682	shall detach property under this section from each school district
683	683	from which the commissioner is required under Section 41.010
684	684	[41.004] to detach property under this subchapter.
685	685	(b) The commissioner shall detach from each school district
686	686	covered by Subsection (a) one or more whole parcels or items of
687	687	property in descending order of the taxable value of each parcel or
688	688	item, beginning with the parcel or item having the greatest taxable
689	689	value, until Section 42.254(a) does not apply to the school
690	690	district [district's wealth per student is equal to or less than the
691	691	equalized wealth level, except as otherwise provided by Subsection
692	692	(c)].
693	693	(c) [If the detachment of whole parcels or items of
694	694	property, as provided by Subsection (a) would result in a
695	695	district's wealth per student that is less than the equalized
696	696	wealth level by more than $10,000, the commissioner may not detach
697	697	the last parcel or item of property and shall detach the next one or
698	698	more parcels or items of property in descending order of taxable
699	699	value that would result in the school district having a wealth per
700	700	student that is equal to or less than the equalized wealth level by
701	701	not more than $10,000.
702	702	[(d)] Notwithstanding Subsections (a) and[,] (b), [and
703	703	(c),] the commissioner may detach only a portion of a parcel or item
704	704	of property if[:
705	705	[(1) it is not possible to reduce the district's wealth
706	706	per student to a level that is equal to or less than the equalized
707	707	wealth level under this subchapter unless some or all of the parcel
708	708	or item of property is detached and the detachment of the whole
709	709	parcel or item would result in the district from which it is
710	710	detached having a wealth per student that is less than the equalized
711	711	wealth level by more than $10,000; or
712	712	[(2)] the commissioner determines that a partial
713	713	detachment of that parcel or item of property is preferable to the
714	714	detachment of one or more other parcels or items having a lower
715	715	taxable value in order to minimize the number of parcels or items of
716	716	property to be detached consistent with the purposes of this
717	717	chapter.
718	718	SECTION 1.30. Sections 41.206(a) and (c), Education Code,
719	719	are amended to read as follows:
720	720	(a) The commissioner shall annex property detached under
721	721	Section 41.205 to school districts eligible for annexation in
722	722	accordance with this section. A school district is eligible for
723	723	annexation of property to it under this subchapter only if, after
724	724	[before] any detachments or annexations are made in a year, Section
725	725	42.254(a) does not apply to the district [district's wealth per
726	726	student is less than the greatest level for which funds are provided
727	727	under Subchapter F, Chapter 42].
728	728	(c) The commissioner shall adopt rules on the detachment and
729	729	annexation of property, subject to Section 41.002(c) [annex
730	730	property detached from school districts beginning with the property
731	731	detached from the school district with the greatest wealth per
732	732	student before detachment, and continuing with the property
733	733	detached from each other school district in descending order of the
734	734	district's wealth per student before detachment].
735	735	SECTION 1.31. Section 41.211, Education Code, is amended to
736	736	read as follows:
737	737	Sec. 41.211. STUDENT ATTENDANCE. A student who is a
738	738	resident of real property detached from a school district may
739	739	choose to attend school in that district or in the district to which
740	740	the property is annexed. For purposes of determining average daily
741	741	attendance under Section 41.004 [42.005], the student shall be
742	742	counted in the district [to which the property is annexed. If the
743	743	student chooses to attend school in the district from which the
744	744	property is detached, the state shall withhold any foundation
745	745	school funds from the district to which the property is annexed and
746	746	shall allocate to the district] in which the student attends [is
747	747	attending] school [those funds and the amount of funds equal to the
748	748	difference between the state funds the district is receiving for
749	749	the student and the district's cost in educating the student].
750	750	SECTION 1.32. Section 41.251, Education Code, is amended to
751	751	read as follows:
752	752	Sec. 41.251. COMMISSIONER ORDER. If the commissioner is
753	753	required under Section 41.010 [41.004] to order the consolidation
754	754	of districts, the consolidation is governed by this subchapter.
755	755	The commissioner's order shall be effective on a date determined by
756	756	the commissioner, but not later than the earliest practicable date
757	757	after November 8.
758	758	SECTION 1.33. Sections 41.252 and 41.257, Education Code,
759	759	are amended to read as follows:
760	760	Sec. 41.252. SELECTION CRITERIA. (a) The commissioner
761	761	shall adopt rules for the selection of [In selecting] the districts
762	762	to be consolidated with a district to which Section 42.254(a)
763	763	applies [that has a property wealth greater than the equalized
764	764	wealth level, the commissioner shall select one or more districts
765	765	with a wealth per student that, when consolidated, will result in a
766	766	consolidated district with a wealth per student equal to or less
767	767	than the equalized wealth level. In achieving that result, the
768	768	commissioner shall give priority to school districts in the
769	769	following order:
770	770	[(1) first, to the contiguous district that has the
771	771	lowest wealth per student and is located in the same county;
772	772	[(2) second, to the district that has the lowest
773	773	wealth per student and is located in the same county;
774	774	[(3) third, to a contiguous district with a property
775	775	wealth below the equalized wealth level that has requested the
776	776	commissioner that it be considered in a consolidation plan;
777	777	[(4) fourth, to include as few districts as possible
778	778	that fall below the equalized wealth level within the consolidation
779	779	order that have not requested the commissioner to be included;
780	780	[(5) fifth, to the district that has the lowest wealth
781	781	per student and is located in the same regional education service
782	782	center area; and
783	783	[(6) sixth, to a district that has a tax rate similar
784	784	to that of the district that has a property wealth greater than the
785	785	equalized wealth level].
786	786	(b) The rules adopted by the commissioner under Subsection
787	787	(a):
788	788	(1) may not result in [select] a district to which
789	789	Section 42.254(a) applies; and
790	790	(2) must be in compliance with Section 41.002(c) [that
791	791	has been created as a result of consolidation by agreement under
792	792	Subchapter B to be consolidated under this subchapter with a
793	793	district that has a property wealth greater than the equalized
794	794	wealth level].
795	795	Sec. 41.257. APPLICATION OF SMALL AND SPARSE ADJUSTMENTS
796	796	AND TRANSPORTATION ALLOTMENT. The budget of the consolidated
797	797	district must apply the benefit of the adjustment or allotment to
798	798	the schools of the consolidating district to which Section 42.103,
799	799	42.104 [42.105], or 42.201 [42.155] would have applied in the event
800	800	that the consolidated district still qualifies as a small or sparse
801	801	district.
802	802	SECTION 1.34. Chapter 41, Education Code, is amended by
803	803	adding Subchapter I and adding a subchapter heading to read as
804	804	follows:
805	805	SUBCHAPTER I. RULES FOR DISTRICT COST ADJUSTMENTS
806	806	SECTION 1.35. Section 42.102(b), Education Code, is
807	807	transferred to Subchapter I, Chapter 41, Education Code, as added
808	808	by this Act, redesignated as Section 41.301, Education Code, and
809	809	amended to read as follows:
810	810	Sec. 41.301. COST OF EDUCATION INDEX ADJUSTMENT. (a) [(b)]
811	811	The commissioner shall determine the revised cost of education
812	812	adjustment for each school district. In determining the revised
813	813	cost of education adjustment, the commissioner shall use [is] the
814	814	cost of education index adjustment adopted by the foundation school
815	815	fund budget committee and contained in Chapter 203, Title 19, Texas
816	816	Administrative Code, as that chapter existed on March 26, 1997,
817	817	adjusted in the manner provided by Section 203.25, Title 19, Texas
818	818	Administrative Code.
819	819	(b) The commissioner shall determine the adjusted allotment
820	820	for each school district under Section 42.102 by multiplying the
821	821	value of the cost of education adjustment for the school district by
822	822	the basic allotment determined under Section 42.101.
823	823	SECTION 1.36. Section 42.105, Education Code, is
824	824	transferred to Subchapter I, Chapter 41, Education Code, as added
825	825	by this Act, redesignated as Section 41.302, Education Code, and
826	826	amended to read as follows:
827	827	Sec. 41.302 [42.105]. SPARSITY ADJUSTMENT. (a)
828	828	Notwithstanding Sections 42.101, 42.102, and 42.103, a school
829	829	district that has fewer than 130 students in average daily
830	830	attendance shall be provided an adjusted [basic] allotment on the
831	831	basis of 130 students in average daily attendance if it offers a
832	832	kindergarten through grade 12 program and has preceding or current
833	833	year's average daily attendance of at least 90 students or is 30
834	834	miles or more by bus route from the nearest high school district. A
835	835	district offering a kindergarten through grade 8 program whose
836	836	preceding or current year's average daily attendance was at least
837	837	50 students or which is 30 miles or more by bus route from the
838	838	nearest high school district shall be provided an adjusted [basic]
839	839	allotment on the basis of 75 students in average daily attendance.
840	840	An average daily attendance of 60 students shall be the basis of
841	841	providing the adjusted [basic] allotment if a district offers a
842	842	kindergarten through grade 6 program and has preceding or current
843	843	year's average daily attendance of at least 40 students or is 30
844	844	miles or more by bus route from the nearest high school district.
845	845	(b) Subsection (c) applies only to a school district that:
846	846	(1) does not offer each grade level from kindergarten
847	847	through grade 12 and whose prospective or former students generally
848	848	attend school in a state that borders this state for the grade
849	849	levels the district does not offer;
850	850	(2) serves both students residing in this state and
851	851	students residing in a state that borders this state who are
852	852	subsequently eligible for in-state tuition rates at institutions of
853	853	higher education in either state regardless of the state in which
854	854	the students reside; and
855	855	(3) shares students with an out-of-state district that
856	856	does not offer competing instructional services.
857	857	(c) Notwithstanding Subsection (a) or Sections 42.101,
858	858	42.102, and 42.103, a school district to which this subsection
859	859	applies, as provided by Subsection (b), that has fewer than 130
860	860	students in average daily attendance shall be provided an adjusted
861	861	[basic] allotment on the basis of 130 students in average daily
862	862	attendance if it offers a kindergarten through grade four program
863	863	and has preceding or current year's average daily attendance of at
864	864	least 75 students or is 30 miles or more by bus route from the
865	865	nearest high school district.
866	866	SECTION 1.37. Chapter 41, Education Code, is amended by
867	867	adding Subchapter J and adding a subchapter heading to read as
868	868	follows:
869	869	SUBCHAPTER J. RULES FOR SPECIAL PROGRAMS AND ALLOTMENTS
870	870	SECTION 1.38. Sections 42.151(c), (d), (e), (g), (h), (i),
871	871	and (k), Education Code, are transferred to Subchapter J, Chapter
872	872	41, Education Code, as added by this Act, redesignated as Section
873	873	41.351, Education Code, and amended to read as follows:
874	874	Sec. 41.351. RULES FOR SPECIAL EDUCATION ALLOTMENT. (a)
875	875	This section applies to Section 42.151.
876	876	(b) [(c)] For funding purposes, the number of contact hours
877	877	credited per day for each student in the off home campus
878	878	instructional arrangement may not exceed the contact hours credited
879	879	per day for the multidistrict class instructional arrangement in
880	880	the 1992-1993 school year.
881	881	(c) [(d)] For funding purposes the contact hours credited
882	882	per day for each student in the resource room; self-contained, mild
883	883	and moderate; and self-contained, severe, instructional
884	884	arrangements may not exceed the average of the statewide total
885	885	contact hours credited per day for those three instructional
886	886	arrangements in the 1992-1993 school year.
887	887	(d) [(e)] The State Board of Education by rule shall
888	888	prescribe the qualifications an instructional arrangement must
889	889	meet in order to be funded as a particular instructional
890	890	arrangement under Section 42.151 [this section]. In prescribing
891	891	the qualifications that a mainstream instructional arrangement
892	892	must meet, the board shall establish requirements that students
893	893	with disabilities and their teachers receive the direct, indirect,
894	894	and support services that are necessary to enrich the regular
895	895	classroom and enable student success.
896	896	(e) [(g)] The State Board of Education shall adopt rules and
897	897	procedures governing contracts for residential placement of
898	898	special education students. The legislature shall provide by
899	899	appropriation for the state's share of the costs of those
900	900	placements.
901	901	(f) [(h)] Funds allocated under Section 42.151 [this
902	902	section], other than an indirect cost allotment established under
903	903	State Board of Education rule, must be used in the special education
904	904	program under Subchapter A, Chapter 29.
905	905	(g) [(i)] The agency shall encourage the placement of
906	906	students in special education programs, including students in
907	907	residential instructional arrangements, in the least restrictive
908	908	environment appropriate for their educational needs.
909	909	(h) [(k)] A school district that provides an extended year
910	910	program required by federal law for special education students who
911	911	may regress is entitled to receive funds in an amount equal to 75
912	912	percent, or a lesser percentage determined by the commissioner, of
913	913	the adjusted [basic] allotment resulting from Section 42.102 or
914	914	42.103, as applicable, or adjusted allotment, as applicable, for
915	915	each full-time equivalent student in average daily attendance,
916	916	multiplied by the amount designated for the student's instructional
917	917	arrangement under this section, for each day the program is
918	918	provided divided by the number of days in the minimum school year.
919	919	The total amount of state funding for extended year services under
920	920	this section may not exceed $10 million per year. A school district
921	921	may use funds received under this subsection [section] only in
922	922	providing an extended year program.
923	923	SECTION 1.39. Sections 42.152(c), (c-1), (c-2), (d), (q),
924	924	(q-1), (q-2), (q-3), (q-4), and (r), Education Code, are
925	925	transferred to Subchapter J, Chapter 41, Education Code, as added
926	926	by this Act, redesignated as Section 41.352, Education Code, and
927	927	amended to read as follows:
928	928	Sec. 41.352. RULES FOR COMPENSATORY EDUCATION ALLOTMENT.
929	929	(a) This section applies to Section 42.152.
930	930	(b) [(c)] Funds allocated under Section 42.152 [this
931	931	section] shall be used to fund supplemental programs and services
932	932	designed to eliminate any disparity in performance on assessment
933	933	instruments administered under Subchapter B, Chapter 39, or
934	934	disparity in the rates of high school completion between students
935	935	at risk of dropping out of school, as defined by Section 29.081, and
936	936	all other students. Specifically, the funds, other than an
937	937	indirect cost allotment established under State Board of Education
938	938	rule, which may not exceed 45 percent, may be used to meet the costs
939	939	of providing a compensatory, intensive, or accelerated instruction
940	940	program under Section 29.081 or a disciplinary alternative
941	941	education program established under Section 37.008, to pay the
942	942	costs associated with placing students in a juvenile justice
943	943	alternative education program established under Section 37.011, or
944	944	to support a program eligible under Title I of the Elementary and
945	945	Secondary Education Act of 1965, as provided by Pub. L. No. 103-382
946	946	and its subsequent amendments, and by federal regulations
947	947	implementing that Act, at a campus at which at least 40 percent of
948	948	the students are educationally disadvantaged. In meeting the costs
949	949	of providing a compensatory, intensive, or accelerated instruction
950	950	program under Section 29.081, a district's compensatory education
951	951	allotment shall be used for costs supplementary to the regular
952	952	education program, such as costs for program and student
953	953	evaluation, instructional materials and equipment and other
954	954	supplies required for quality instruction, supplemental staff
955	955	expenses, salary for teachers of at-risk students, smaller class
956	956	size, and individualized instruction. A home-rule school district
957	957	or an open-enrollment charter school must use funds allocated under
958	958	Section 42.152 [Subsection (a)] for a purpose authorized in this
959	959	subsection but is not otherwise subject to Subchapter C, Chapter
960	960	29. For purposes of this subsection, a program specifically
961	961	designed to serve students at risk of dropping out of school, as
962	962	defined by Section 29.081, is considered to be a program
963	963	supplemental to the regular education program, and a district may
964	964	use its compensatory education allotment for such a program.
965	965	(c) [(c-1)] Notwithstanding Subsection (b) [(c)], funds
966	966	allocated under Section 42.152 [this section] may be used to fund in
967	967	proportion to the percentage of students served by the program that
968	968	meet the criteria in Section 29.081(d) or (g):
969	969	(1) an accelerated reading instruction program under
970	970	Section 28.006(g); or
971	971	(2) a program for treatment of students who have
972	972	dyslexia or a related disorder as required by Section 38.003.
973	973	(d) [(c-2)] Notwithstanding Subsection (b) [(c)], funds
974	974	allocated under Section 42.152 [this section] may be used to fund a
975	975	district's mentoring services program under Section 29.089.
976	976	(e) [(d)] The agency shall evaluate the effectiveness of
977	977	accelerated instruction and support programs provided under
978	978	Section 29.081 for students at risk of dropping out of school.
979	979	(f) [(q)] The State Board of Education, with the assistance
980	980	of the comptroller, shall develop and implement by rule reporting
981	981	and auditing systems for district and campus expenditures of
982	982	compensatory education funds to ensure that compensatory education
983	983	funds, other than the indirect cost allotment, are spent only to
984	984	supplement the regular education program as required by Subsection
985	985	(b) [(c)]. The reporting requirements shall be managed
986	986	electronically to minimize local administrative costs. A district
987	987	shall submit the report required by this subsection not later than
988	988	the 150th day after the last day permissible for resubmission of
989	989	information required under Section 41.007 [42.006].
990	990	(g) [(q-1)] The commissioner shall develop a system to
991	991	identify school districts that are at high risk of having used
992	992	compensatory education funds other than in compliance with
993	993	Subsection (b) [(c)] or of having inadequately reported
994	994	compensatory education expenditures. If a review of the report
995	995	submitted under Subsection (f) [(q)], using the risk-based system,
996	996	indicates that a district is not at high risk of having misused
997	997	compensatory education funds or of having inadequately reported
998	998	compensatory education expenditures, the district may not be
999	999	required to perform a local audit of compensatory education
1000	1000	expenditures and is not subject to on-site monitoring under this
1001	1001	section.
1002	1002	(h) [(q-2)] If a review of the report submitted under
1003	1003	Subsection (f) [(q)], using the risk-based system, indicates that a
1004	1004	district is at high risk of having misused compensatory education
1005	1005	funds, the commissioner shall notify the district of that
1006	1006	determination. The district must respond to the commissioner not
1007	1007	later than the 30th day after the date the commissioner notifies the
1008	1008	district of the commissioner's determination. If the district's
1009	1009	response does not change the commissioner's determination that the
1010	1010	district is at high risk of having misused compensatory education
1011	1011	funds or if the district does not respond in a timely manner, the
1012	1012	commissioner shall:
1013	1013	(1) require the district to conduct a local audit of
1014	1014	compensatory education expenditures for the current or preceding
1015	1015	school year;
1016	1016	(2) order agency staff to conduct on-site monitoring
1017	1017	of the district's compensatory education expenditures; or
1018	1018	(3) both require a local audit and order on-site
1019	1019	monitoring.
1020	1020	(i) [(q-3)] If a review of the report submitted under
1021	1021	Subsection (f) [(q)], using the risk-based system, indicates that a
1022	1022	district is at high risk of having inadequately reported
1023	1023	compensatory education expenditures, the commissioner may require
1024	1024	agency staff to assist the district in following the proper
1025	1025	reporting methods or amending a district or campus improvement plan
1026	1026	under Subchapter F, Chapter 11. If the district does not take
1027	1027	appropriate corrective action before the 45th day after the date
1028	1028	the agency staff notifies the district of the action the district is
1029	1029	expected to take, the commissioner may:
1030	1030	(1) require the district to conduct a local audit of
1031	1031	the district's compensatory education expenditures; or
1032	1032	(2) order agency staff to conduct on-site monitoring
1033	1033	of the district's compensatory education expenditures.
1034	1034	(j) [(q-4)] The commissioner, in the year following a local
1035	1035	audit of compensatory education expenditures, shall withhold from a
1036	1036	district's foundation school fund payment an amount equal to the
1037	1037	amount of compensatory education funds the agency determines were
1038	1038	not used in compliance with Subsection (b) [(c)]. The commissioner
1039	1039	shall release to a district funds withheld under this subsection
1040	1040	when the district provides to the commissioner a detailed plan to
1041	1041	spend those funds in compliance with Subsection (b) [(c)].
1042	1042	(k) [(r)] The commissioner shall grant a one-year exemption
1043	1043	from the requirements of Subsections (f)-(j) [(q)-(q-4)] to a
1044	1044	school district in which the group of students who have failed to
1045	1045	perform satisfactorily in the preceding school year on an
1046	1046	assessment instrument required under Section 39.023(a), (c), or (l)
1047	1047	subsequently performs on those assessment instruments at a level
1048	1048	that meets or exceeds a level prescribed by commissioner rule. Each
1049	1049	year the commissioner, based on the most recent information
1050	1050	available, shall determine if a school district is entitled to an
1051	1051	exemption for the following school year and notify the district of
1052	1052	that determination.
1053	1053	SECTION 1.40. Sections 42.153(b) and (c), Education Code,
1054	1054	are transferred to Subchapter J, Chapter 41, Education Code, as
1055	1055	added by this Act, redesignated as Section 41.353, Education Code,
1056	1056	and amended to read as follows:
1057	1057	Sec. 41.353. RULES FOR BILINGUAL EDUCATION ALLOTMENT. (a)
1058	1058	This section applies to Section 42.153.
1059	1059	(b) Funds allocated under Section 42.153 [this section],
1060	1060	other than an indirect cost allotment established under State Board
1061	1061	of Education rule, must be used in providing bilingual education or
1062	1062	special language programs under Subchapter B, Chapter 29, and must
1063	1063	be accounted for under existing agency reporting and auditing
1064	1064	procedures.
1065	1065	(c) A district's bilingual education or special language
1066	1066	allocation may be used only for program and student evaluation,
1067	1067	instructional materials and equipment, staff development,
1068	1068	supplemental staff expenses, salary supplements for teachers, and
1069	1069	other supplies required for quality instruction and smaller class
1070	1070	size.
1071	1071	SECTION 1.41. Sections 42.154(c) and (d), Education Code,
1072	1072	are transferred to Subchapter J, Chapter 41, Education Code, as
1073	1073	added by this Act, redesignated as Section 41.354, Education Code,
1074	1074	and amended to read as follows:
1075	1075	Sec. 41.354. RULES FOR CAREER AND TECHNOLOGY EDUCATION
1076	1076	ALLOTMENT. (a) This section applies to Section 42.154.
1077	1077	(b) [(c)] Funds allocated under Section 42.154 [this
1078	1078	section], other than an indirect cost allotment established under
1079	1079	State Board of Education rule, must be used in providing career and
1080	1080	technology education programs in grades nine through 12 or career
1081	1081	and technology education programs for students with disabilities in
1082	1082	grades seven through 12 under Sections 29.182, 29.183, and 29.184.
1083	1083	(c) [(d)] The commissioner shall conduct a cost-benefit
1084	1084	comparison between career and technology education programs and
1085	1085	mathematics and science programs.
1086	1086	SECTION 1.42. Chapter 41, Education Code, is amended by
1087	1087	adding Subchapter K and adding a subchapter heading to read as
1088	1088	follows:
1089	1089	SUBCHAPTER K. RULES FOR TRANSPORTATION FUNDING
1090	1090	SECTION 1.43. Subchapter K, Chapter 41, Education Code, as
1091	1091	added by this Act, is amended by adding Section 41.401 to read as
1092	1092	follows:
1093	1093	Sec. 41.401. RULES FOR TRANSPORTATION ALLOTMENT. (a) This
1094	1094	section applies to Section 42.201.
1095	1095	SECTION 1.44. Sections 42.155(d), (d-1), and (d-2),
1096	1096	Education Code, as effective September 1, 2017, are transferred to
1097	1097	Section 41.401, Education Code, as added by this Act, redesignated
1098	1098	as Sections 41.401(b), (c), and (d), Education Code, and amended to
1099	1099	read as follows:
1100	1100	(b) [(d)] A district or county may apply for and on approval
1101	1101	of the commissioner receive an additional amount of up to 10 percent
1102	1102	of its regular transportation allotment to be used for the
1103	1103	transportation of children living within two miles of the school
1104	1104	they attend who would be subject to hazardous traffic conditions or
1105	1105	a high risk of violence if they walked to school.
1106	1106	(c) [(d-1)] For purposes of Subsection (d), each board of
1107	1107	trustees shall provide to the commissioner an explanation of the
1108	1108	hazardous traffic conditions or areas presenting a high risk of
1109	1109	violence applicable to that district and shall identify the
1110	1110	specific hazardous or high-risk areas for which the allocation is
1111	1111	requested. A hazardous traffic condition exists where no walkway
1112	1112	is provided and children must walk along or cross a freeway or
1113	1113	expressway, an underpass, an overpass or a bridge, an uncontrolled
1114	1114	major traffic artery, an industrial or commercial area, or another
1115	1115	comparable condition. An area presents a high risk of violence if
1116	1116	law enforcement records indicate a high incidence of violent crimes
1117	1117	in the area. Each board of trustees requesting funds for an area
1118	1118	presenting a high risk of violence must, in addition to the
1119	1119	explanation required by this subsection, provide the commissioner
1120	1120	with consolidated law enforcement records that document violent
1121	1121	crimes identified by reporting agencies within the relevant
1122	1122	jurisdiction.
1123	1123	(d) [(d-2)] A district or county may use all or part of any
1124	1124	funds received under Subsection (b) [(d)] to support community
1125	1125	walking transportation programs, including walking school bus
1126	1126	programs, provided that the district or county requires each
1127	1127	supported program to submit a financial report to the district or
1128	1128	county each semester that covers services provided by the program
1129	1129	for the benefit of the district or county. The commissioner shall
1130	1130	adopt rules governing the transportation allotment as necessary to
1131	1131	permit a district or county to receive funds under Subsection (b)
1132	1132	[(d)] that may be used to support innovative school safety
1133	1133	projects, including community walking transportation programs as
1134	1134	provided by this subsection and any other appropriate safety
1135	1135	project, including rules defining an approved walking route mile
1136	1136	that may be used as necessary in implementing this subsection.
1137	1137	SECTION 1.45. Sections 42.155(e), (f), (g), (h), (i), (k),
1138	1138	and (l), Education Code, are transferred to Section 41.401,
1139	1139	Education Code, as added by this Act, and amended to read as
1140	1140	follows:
1141	1141	(e) The commissioner may grant an amount set by
1142	1142	appropriation for private or commercial transportation for
1143	1143	eligible students from isolated areas. The need for this type of
1144	1144	transportation grant shall be determined on an individual basis and
1145	1145	the amount granted shall not exceed the actual cost. The grants may
1146	1146	be made only in extreme hardship cases. A grant may not be made if
1147	1147	the students live within two miles of an approved school bus route.
1148	1148	(f) The cost of transporting career and technology
1149	1149	education students from one campus to another inside a district or
1150	1150	from a sending district to another secondary public school for a
1151	1151	career and technology program or an area career and technology
1152	1152	school or to an approved post-secondary institution under a
1153	1153	contract for instruction approved by the agency shall be reimbursed
1154	1154	based on the number of actual miles traveled times the district's
1155	1155	official extracurricular travel per mile rate as set by the board of
1156	1156	trustees and approved by the agency.
1157	1157	(g) A school district or county that provides special
1158	1158	transportation services for eligible special education students is
1159	1159	entitled to a state allocation paid on a previous year's
1160	1160	cost-per-mile basis. The maximum rate per mile allowable shall be
1161	1161	set by appropriation based on data gathered from the first year of
1162	1162	each preceding biennium. Districts may use a portion of their
1163	1163	support allocation to pay transportation costs, if necessary. The
1164	1164	commissioner may grant an amount set by appropriation for private
1165	1165	transportation to reimburse parents or their agents for
1166	1166	transporting eligible special education students. The mileage
1167	1167	allowed shall be computed along the shortest public road from the
1168	1168	student's home to school and back, morning and afternoon. The need
1169	1169	for this type transportation shall be determined on an individual
1170	1170	basis and shall be approved only in extreme hardship cases.
1171	1171	(h) Funds allotted under Section 42.201 or this section must
1172	1172	be used in providing transportation services.
1173	1173	(i) In the case of a district belonging to a county
1174	1174	transportation system, the district's transportation allotment for
1175	1175	purposes of determining a district's foundation school program
1176	1176	allocations is determined on the basis of the number of approved
1177	1177	daily route miles in the district multiplied by the allotment per
1178	1178	mile to which the county transportation system is entitled.
1179	1179	(k) Notwithstanding any other provision of Section 42.201
1180	1180	or this section, the commissioner may not reduce the allotment to
1181	1181	which a district or county is entitled under Section 42.201 [this
1182	1182	section] because the district or county provides transportation for
1183	1183	an eligible student to and from a child-care facility, as defined by
1184	1184	Section 42.002, Human Resources Code, or a grandparent's residence
1185	1185	instead of the student's residence, as authorized by Section
1186	1186	34.007, if the transportation is provided within the approved
1187	1187	routes of the district or county for the school the student attends.
1188	1188	(l) A school district may, with the funds allotted under
1189	1189	Section 42.201 or this section, provide a bus pass or card for
1190	1190	another transportation system to each student who is eligible to
1191	1191	use the regular transportation system of the district but for whom
1192	1192	the regular transportation system of the district is not a feasible
1193	1193	method of providing transportation. The commissioner by rule shall
1194	1194	provide procedures for a school district to provide bus passes or
1195	1195	cards to students under this subsection.
1196	1196	SECTION 1.46. Chapter 41, Education Code, is amended by
1197	1197	adding Subchapter L and adding a subchapter heading to read as
1198	1198	follows:
1199	1199	SUBCHAPTER L. RULES FOR FINANCING FOUNDATION SCHOOL PROGRAM
1200	1200	SECTION 1.47. Sections 42.2514 and 42.2515, Education Code,
1201	1201	are transferred to Subchapter L, Chapter 41, Education Code, as
1202	1202	added by this Act, redesignated as Sections 41.451 and 41.452,
1203	1203	Education Code, and amended to read as follows:
1204	1204	Sec. 41.451 [42.2514]. ADDITIONAL STATE AID FOR TAX
1205	1205	INCREMENT FINANCING PAYMENTS. For each school year, a school
1206	1206	district's entitlement under Section 42.253(a)(1) [district,
1207	1207	including a school district that is otherwise ineligible for state
1208	1208	aid under this chapter,] is increased by [entitled to state aid in]
1209	1209	an amount equal to the amount the district is required to pay into
1210	1210	the tax increment fund for a reinvestment zone under Section
1211	1211	311.013(n), Tax Code.
1212	1212	Sec. 41.452 [42.2515]. ADDITIONAL STATE AID FOR AD VALOREM
1213	1213	TAX CREDITS UNDER TEXAS ECONOMIC DEVELOPMENT ACT. (a) For each
1214	1214	school year, a school district's entitlement under Section
1215	1215	42.253(a)(1) [district, including a school district that] is
1216	1216	increased by [otherwise ineligible for state aid under this
1217	1217	chapter, is entitled to state aid in] an amount equal to the amount
1218	1218	of all tax credits credited against ad valorem taxes of the district
1219	1219	in that year under former Subchapter D, Chapter 313, Tax Code.
1220	1220	(b) The commissioner may adopt rules to implement and
1221	1221	administer this section.
1222	1222	SECTION 1.48. Section 42.2524, Education Code, as effective
1223	1223	September 1, 2017, is transferred to Subchapter L, Chapter 41,
1224	1224	Education Code, as added by this Act, redesignated as Section
1225	1225	41.453, Education Code, and amended to read as follows:
1226	1226	Sec. 41.453 [42.2524]. REIMBURSEMENT FOR DISASTER
1227	1227	REMEDIATION COSTS. (a) This section applies only to a school
1228	1228	district all or part of which is located in an area declared a
1229	1229	disaster area by the governor under Chapter 418, Government Code,
1230	1230	and that incurs disaster remediation costs as a result of the
1231	1231	disaster.
1232	1232	(b) During the two-year period following the date of the
1233	1233	governor's initial proclamation or executive order declaring a
1234	1234	state of disaster, a district may apply to the commissioner for
1235	1235	reimbursement of disaster remediation costs that the district pays
1236	1236	during that period and does not anticipate recovering through
1237	1237	insurance proceeds, federal disaster relief payments, or another
1238	1238	similar source of reimbursement.
1239	1239	(c) [The commissioner may provide reimbursement under this
1240	1240	section only if funds are available for that purpose as follows:
1241	1241	[(1) reimbursement for a school district not required
1242	1242	to take action under Chapter 41 may be provided from:
1243	1243	[(A) amounts appropriated for that purpose,
1244	1244	including amounts appropriated for those districts for that purpose
1245	1245	to the disaster contingency fund established under Section 418.073,
1246	1246	Government Code; or
1247	1247	[(B) Foundation School Program funds available
1248	1248	for that purpose, based on a determination by the commissioner that
1249	1249	the amount appropriated for the Foundation School Program,
1250	1250	including the facilities component as provided by Chapter 46,
1251	1251	exceeds the amount to which districts are entitled under this
1252	1252	chapter and Chapter 46; and
1253	1253	[(2) reimbursement for a school district required to
1254	1254	take action under Chapter 41 may be provided from funds described by
1255	1255	Subdivision (1)(B) if funds remain available after fully
1256	1256	reimbursing each school district described by Subdivision (1) for
1257	1257	its disaster remediation costs.
1258	1258	[(d) If the amount of money available for purposes of
1259	1259	reimbursing school districts not required to take action under
1260	1260	Chapter 41 is not sufficient to fully reimburse each district's
1261	1261	disaster remediation costs, the commissioner shall reduce the
1262	1262	amount of assistance provided to each of those
1263	1263	districts proportionately. If the amount of money available for
1264	1264	purposes of reimbursing school districts required to take action
1265	1265	under Chapter 41 is not sufficient to fully reimburse each
1266	1266	district's disaster remediation costs, the commissioner shall
1267	1267	reduce the amount of assistance provided to each of those districts
1268	1268	proportionately.
1269	1269	[(e)] A district seeking reimbursement under this section
1270	1270	must provide the commissioner with adequate documentation of the
1271	1271	costs for which the district seeks reimbursement.
1272	1272	(d) [(f) A district required to take action under Chapter
1273	1273	41:
1274	1274	[(1) may, at its discretion, receive assistance
1275	1275	provided under this section either as a payment of state aid under
1276	1276	this chapter or as a reduction in the total amount required to be
1277	1277	paid by the district for attendance credits under Section 41.093;
1278	1278	and
1279	1279	[(2) may not obtain reimbursement under this section
1280	1280	for the payment of any disaster remediation costs that resulted in a
1281	1281	reduction under Section 41.0931 of the district's cost of
1282	1282	attendance credits.
1283	1283	[(h)] The commissioner shall adopt rules necessary to
1284	1284	implement this section, including rules defining "disaster
1285	1285	remediation costs" for purposes of this section and specifying the
1286	1286	type of documentation required under Subsection (c) [(e)].
1287	1287	(e) [(i)] Notwithstanding any other provision of this
1288	1288	section, the commissioner may permit a district to use amounts
1289	1289	provided to a district under this section to pay the costs of
1290	1290	replacing a facility instead of repairing the facility. The
1291	1291	commissioner shall ensure that a district that elects to replace a
1292	1292	facility does not receive an amount under this section that exceeds
1293	1293	the lesser of:
1294	1294	(1) the amount that would be provided to the district
1295	1295	if the facility were repaired; or
1296	1296	(2) the amount necessary to replace the facility.
1297	1297	(f) [(j)] This section does not require the commissioner to
1298	1298	provide any requested reimbursement. A decision of the
1299	1299	commissioner regarding reimbursement is final and may not be
1300	1300	appealed.
1301	1301	(g) Payments under this section are considered part of a
1302	1302	school district's entitlement under Section 42.253(a)(1).
1303	1303	SECTION 1.49. Sections 42.2525, 42.2526, and 42.2527,
1304	1304	Education Code, are transferred to Subchapter L, Chapter 41,
1305	1305	Education Code, as added by this Act, and redesignated as Sections
1306	1306	41.454, 41.455, and 41.456, Education Code, to read as follows:
1307	1307	Sec. 41.454 [42.2525]. ADJUSTMENTS FOR CERTAIN DISTRICTS
1308	1308	RECEIVING FEDERAL IMPACT AID. The commissioner is granted the
1309	1309	authority to ensure that school districts receiving federal impact
1310	1310	aid due to the presence of a military installation or significant
1311	1311	concentrations of military students do not receive more than an
1312	1312	eight percent reduction should the federal government reduce
1313	1313	appropriations to those schools.
1314	1314	Sec. 41.455 [42.2526]. ADJUSTMENT FOR DISTRICT OPERATING
1315	1315	PILOT PROGRAM. (a) This section applies only to a school district
1316	1316	operating a pilot program authorized by Section 28.0255.
1317	1317	(b) Beginning with the first school year that follows the
1318	1318	first school year in which students receive high school diplomas
1319	1319	under the pilot program authorized by Section 28.0255 and
1320	1320	continuing for every subsequent school year that the district
1321	1321	operates the pilot program, the commissioner shall provide funding
1322	1322	for the district's prekindergarten program under Section 29.153 on
1323	1323	a full-day basis for a number of prekindergarten students equal to
1324	1324	twice the number of students who received a high school diploma
1325	1325	under the pilot program authorized by Section 28.0255 during the
1326	1326	preceding school year.
1327	1327	(c) This section expires September 1, 2023.
1328	1328	Sec. 41.456 [42.2527]. ADJUSTMENT FOR CERTAIN DISTRICTS
1329	1329	WITH EARLY HIGH SCHOOL GRADUATION PROGRAMS. (a) As a pilot program
1330	1330	to enable the state to evaluate the benefit of providing additional
1331	1331	funding at the prekindergarten level for low-income students, the
1332	1332	commissioner shall provide prekindergarten funding in accordance
1333	1333	with this section to a school district located in a county that
1334	1334	borders the United Mexican States and the Gulf of Mexico.
1335	1335	(b) The commissioner shall provide funding for a school
1336	1336	district's prekindergarten program on a half-day basis for a number
1337	1337	of low-income prekindergarten students equal to twice the number of
1338	1338	students who received, as a result of participation in an early high
1339	1339	school graduation program operated by the district, a high school
1340	1340	diploma from the district during the preceding school year after
1341	1341	three years of secondary school attendance.
1342	1342	(c) The commissioner may adopt rules necessary to implement
1343	1343	this section.
1344	1344	(d) This section expires September 1, 2023.
1345	1345	SECTION 1.50. Section 42.2528, Education Code, is
1346	1346	transferred to Subchapter L, Chapter 41, Education Code, as added
1347	1347	by this Act, redesignated as Section 41.457, Education Code, and
1348	1348	amended to read as follows:
1349	1349	Sec. 41.457 [42.2528]. EXCESS FUNDS FOR VIDEO SURVEILLANCE
1350	1350	OF SPECIAL EDUCATION SETTINGS. (a) Notwithstanding any other
1351	1351	provision of law, if the commissioner determines that the amount
1352	1352	appropriated for the purposes of the Foundation School Program
1353	1353	exceeds the amount to which school districts are entitled under
1354	1354	Chapter 42 [this chapter], the commissioner by rule shall establish
1355	1355	a grant program through which excess funds are awarded as grants for
1356	1356	the purchase of video equipment, or for the reimbursement of costs
1357	1357	for previously purchased video equipment, used for monitoring
1358	1358	special education classrooms or other special education settings
1359	1359	required under Section 29.022.
1360	1360	(b) In awarding grants under this section, the commissioner
1361	1361	shall give highest priority to districts with maintenance and
1362	1362	operations tax rates at the greatest rates permitted by law. The
1363	1363	commissioner shall also give priority to:
1364	1364	(1) districts with the [maintenance and operations tax
1365	1365	rates at least equal to the state maximum compressed tax rate, as
1366	1366	defined by Section 42.101(a), and] lowest amounts of maintenance
1367	1367	and operations tax revenue per weighted student; and
1368	1368	(2) districts with debt service tax rates near or
1369	1369	equal to the greatest rates permitted by law.
1370	1370	(c) The commissioner may adopt rules to implement and
1371	1371	administer this section.
1372	1372	SECTION 1.51. Sections 42.253(d), (g), (i), (j), and (k),
1373	1373	Education Code, are transferred to Subchapter L, Chapter 41,
1374	1374	Education Code, as added by this Act, redesignated as Section
1375	1375	41.458, Education Code, and amended to read as follows:
1376	1376	Sec. 41.458. RULES FOR DISTRIBUTION OF FOUNDATION SCHOOL
1377	1377	FUND. (a) This section applies to Section 42.253.
1378	1378	(b) [(d)] The commissioner shall approve warrants to each
1379	1379	school district equaling the amount of its entitlement except as
1380	1380	provided by this section. Warrants for all money expended
1381	1381	according to Chapter 42 and this chapter shall be approved and
1382	1382	transmitted to treasurers or depositories of school districts in
1383	1383	the same manner that warrants for state payments are transmitted.
1384	1384	The total amount of the warrants issued under this section may not
1385	1385	exceed the total amount appropriated for Foundation School Program
1386	1386	purposes for that fiscal year.
1387	1387	(c) [(g)] If a school district demonstrates to the
1388	1388	satisfaction of the commissioner that the estimate of the
1389	1389	district's tax rate, student enrollment, tax collections, or
1390	1390	taxable value of property used in determining the amount of state
1391	1391	funds to which the district is entitled are so inaccurate as to
1392	1392	result in undue financial hardship to the district, the
1393	1393	commissioner may adjust funding to that district in that school
1394	1394	year to the extent that funds are available for that year.
1395	1395	(e) [(i)] Not later than March 1 each year, the commissioner
1396	1396	shall determine the actual amount of state funds to which each
1397	1397	school district is entitled under the allocation formulas in this
1398	1398	chapter and Chapter 42 for the current school year and shall compare
1399	1399	that amount with the amount of the warrants issued to each district
1400	1400	for that year. If the amount of the warrants differs from the
1401	1401	amount to which a district is entitled because of variations in the
1402	1402	district's tax rate, student enrollment, tax collections, or
1403	1403	taxable value of property, the commissioner shall adjust the
1404	1404	district's entitlement for the next fiscal year accordingly.
1405	1405	(f) [(j)] The legislature may appropriate funds necessary
1406	1406	for increases under Subsection (e) [(i)] from funds that the
1407	1407	comptroller, at any time during the fiscal year, finds are
1408	1408	available.
1409	1409	(g) [(k)] The commissioner shall compute for each school
1410	1410	district the total amount by which the district's allocation of
1411	1411	state funds is increased or reduced under Subsection (e) [(i)] and
1412	1412	shall certify that amount to the district.
1413	1413	SECTION 1.52. Section 42.253(h), Education Code, as
1414	1414	effective September 1, 2017, is transferred to Subchapter L,
1415	1415	Chapter 41, Education Code, as added by this Act, redesignated as
1416	1416	Section 41.458(d), Education Code, and amended to read as follows:
1417	1417	(d) [(h)] If the amount appropriated for the Foundation
1418	1418	School Program for the second year of a state fiscal biennium is
1419	1419	less than the amount to which school districts and open-enrollment
1420	1420	charter schools are entitled for that year, the commissioner shall
1421	1421	certify the amount of the difference to the Legislative Budget
1422	1422	Board not later than January 1 of the second year of the state
1423	1423	fiscal biennium. The Legislative Budget Board shall propose to the
1424	1424	legislature that the certified amount be transferred to the
1425	1425	foundation school fund from the economic stabilization fund and
1426	1426	appropriated for the purpose of increases in allocations under this
1427	1427	subsection. If the legislature fails during the regular session to
1428	1428	enact the proposed transfer and appropriation and there are not
1429	1429	funds available under Subsection (f) [(j)], the commissioner shall
1430	1430	adjust the total amounts due to each school district and
1431	1431	open-enrollment charter school under Chapter 42 and this chapter
1432	1432	and the total amounts necessary for each school district to comply
1433	1433	with the requirements of Section 42.254(a) [Chapter 41] by an
1434	1434	amount determined by applying to each district and school the same
1435	1435	percentage adjustment to the total amount of state and local
1436	1436	revenue due to the district or school under this chapter and Chapter
1437	1437	42 [41] so that the total amount of the adjustment to all districts
1438	1438	and schools results in an amount equal to the total adjustment
1439	1439	necessary. The following fiscal year:
1440	1440	(1) a district's or school's entitlement under Section
1441	1441	42.253 [this section] is increased by an amount equal to the
1442	1442	adjustment made under this subsection; and
1443	1443	(2) the amount necessary for a district to comply with
1444	1444	the requirements of Section 42.254(a) [Chapter 41] is reduced by an
1445	1445	amount necessary to ensure a district's full recovery of the
1446	1446	adjustment made under this subsection.
1447	1447	SECTION 1.53. Subchapter L, Chapter 41, Education Code, as
1448	1448	added by this Act, is amended by adding Sections 41.459, 41.460, and
1449	1449	41.461 to read as follows:
1450	1450	Sec. 41.459. DELINQUENT MAINTENANCE AND OPERATIONS TAX
1451	1451	COLLECTION. (a) If the collection of delinquent maintenance and
1452	1452	operations taxes of a district not previously required to take
1453	1453	action under Section 41.009 results in the district being subject
1454	1454	to Section 42.254(a) only for the year in which the delinquent taxes
1455	1455	are collected, the commissioner shall permit the district to take
1456	1456	action under this section in lieu of taking action under Section
1457	1457	41.009.
1458	1458	(b) The district shall deposit the amount by which the
1459	1459	district's revenue under Sections 42.253(a)(2) and (3) exceeds the
1460	1460	district's entitlement under Section 42.253(a)(1) into a separate
1461	1461	account that may be used only as provided by this section.
1462	1462	(c) For the school year following the year the deposit was
1463	1463	made as provided by Subsection (b), the commissioner shall reduce
1464	1464	the amount of state aid to which the district is entitled under this
1465	1465	chapter and Chapter 42 by an amount equal to the excess revenue in
1466	1466	the separate account and the district may withdraw the money from
1467	1467	the account to replace the reduction in state aid.
1468	1468	(d) If the amount of state aid to which the district is
1469	1469	entitled under this chapter and Chapter 42 is less than the amount
1470	1470	in the separate account, the difference must remain in the separate
1471	1471	account and the commissioner will again reduce the district's state
1472	1472	aid in the subsequent school year.
1473	1473	(e) If money remains in the separate account after three
1474	1474	school years, the remaining money in the account is considered part
1475	1475	of the district's revenue under Sections 42.253(a)(2) and (3) and
1476	1476	the district is subject to Section 42.254(a).
1477	1477	(f) If at any time money remains in the separate account and
1478	1478	the commissioner makes a determination under Section 41.010 that
1479	1479	the district is subject to Section 42.254(a), the remaining money
1480	1480	in the separate account must be included in determining:
1481	1481	(1) the amount the district is required to pay under
1482	1482	Section 41.009(3); or
1483	1483	(2) whether the district has taken sufficient action
1484	1484	under Section 41.009(1), (2), or (4).
1485	1485	Sec. 41.460. FAILURE TO COLLECT DELINQUENT MAINTENANCE AND
1486	1486	OPERATIONS TAXES. (a) If a district fails to collect a delinquent
1487	1487	maintenance and operations tax owed to the district for two years
1488	1488	after the year in which the tax is initially due, the collection of
1489	1489	the delinquent tax reverts to the state.
1490	1490	(b) The comptroller shall collect the delinquent
1491	1491	maintenance and operations tax on behalf of the district, with
1492	1492	penalties and interest owed, at the earliest opportunity.
1493	1493	(c) The attorney general shall assist the comptroller in the
1494	1494	collection of delinquent maintenance and operations taxes.
1495	1495	(d) If the attorney general cannot successfully collect the
1496	1496	delinquent maintenance and operations tax, penalties, and interest
1497	1497	in the first year in which the obligation reverts to the state, the
1498	1498	comptroller may contract with private attorneys for collection in
1499	1499	subsequent years, subject to the terms and limitations that apply
1500	1500	to a school district contracting with private attorneys for that
1501	1501	purpose.
1502	1502	(e) All taxes, penalties, and fees collected under this
1503	1503	section are included in the district's collections under Section
1504	1504	42.253(a)(3) in the year in which they are collected.
1505	1505	Sec. 41.461. ESTIMATES REQUIRED. (a) Not later than
1506	1506	October 1 of each even-numbered year:
1507	1507	(1) the agency shall submit to the legislature an
1508	1508	estimate of the tax rate and student enrollment of each school
1509	1509	district for the following biennium; and
1510	1510	(2) the comptroller shall submit to the legislature an
1511	1511	estimate of the total taxable value of all property in the state as
1512	1512	determined under Subchapter M, Chapter 403, Government Code, for
1513	1513	the following biennium.
1514	1514	(b) The agency and the comptroller shall update the
1515	1515	information provided to the legislature under Subsection (a) not
1516	1516	later than March 1 of each odd-numbered year.
1517	1517	SECTION 1.54. Section 42.255, Education Code, is
1518	1518	transferred to Subchapter L, Chapter 41, Education Code, as added
1519	1519	by this Act, redesignated as Section 41.462, Education Code, and
1520	1520	amended to read as follows:
1521	1521	Sec. 41.462 [42.255]. FALSIFICATION OF RECORDS; REPORT.
1522	1522	When, in the opinion of the agency's director of school audits,
1523	1523	audits or reviews of accounting, enrollment, or other records of a
1524	1524	school district reveal deliberate falsification of the records, or
1525	1525	violation of the provisions of this chapter or Chapter 42, through
1526	1526	which the district's share of state funds allocated under the
1527	1527	authority of this chapter and Chapter 42 would be, or has been,
1528	1528	illegally increased, the director shall promptly and fully report
1529	1529	the fact to the State Board of Education, the state auditor, and the
1530	1530	appropriate county attorney, district attorney, or criminal
1531	1531	district attorney.
1532	1532	SECTION 1.55. Section 42.259(g), Education Code, is
1533	1533	transferred to Subchapter L, Chapter 41, Education Code, as added
1534	1534	by this Act, redesignated as Section 41.463, Education Code, and
1535	1535	amended to read as follows:
1536	1536	Sec. 41.463. FOUNDATION SCHOOL FUND TRANSFERS. (a) The
1537	1537	commissioner shall adopt rules regarding the timing of payments
1538	1538	from the foundation school fund to each school district and
1539	1539	open-enrollment charter school.
1540	1540	(b) [(g)] The commissioner shall make all annual Foundation
1541	1541	School Program payments under this section for purposes described
1542	1542	by Sections 45.252(a)(1) and (2) before the deadline established
1543	1543	under Section 45.263(b) for payment of debt service on bonds.
1544	1544	Notwithstanding any other provision of this section, the
1545	1545	commissioner may make Foundation School Program payments under this
1546	1546	section after the deadline established under Section 45.263(b) only
1547	1547	if the commissioner has not received notice under Section 45.258
1548	1548	concerning a district's failure or inability to pay matured
1549	1549	principal or interest on bonds.
1550	1550	SECTION 1.56. Chapter 41, Education Code, is amended by
1551	1551	adding Subchapter M and adding a subchapter heading to read as
1552	1552	follows:
1553	1553	SUBCHAPTER M. SCHOOL FACILITIES INVENTORY AND STANDARDS
1554	1554	SECTION 1.57. Section 42.352, Education Code, is
1555	1555	transferred to Subchapter M, Chapter 41, Education Code, as added
1556	1556	by this Act, and redesignated as Section 41.501, Education Code, to
1557	1557	read as follows:
1558	1558	Sec. 41.501 [42.352]. STANDARDS. The State Board of
1559	1559	Education shall establish standards for adequacy of school
1560	1560	facilities. The standards shall include requirements related to
1561	1561	space, educational adequacy, and construction quality. All
1562	1562	facilities constructed after September 1, 1992, must meet the
1563	1563	standards in order to be financed with state or local tax funds.
1564	1564	SECTION 1.58. Section 42.002(b), Education Code, is amended
1565	1565	to read as follows:
1566	1566	(b) The Foundation School Program consists of:
1567	1567	(1) [two tiers that in combination provide for:
1568	1568	[(A)] sufficient financing to provide [for] all
1569	1569	school districts with the resources to provide a basic program of
1570	1570	education that is rated acceptable or higher under Section 39.054
1571	1571	and meets other applicable legal standards[;] and to provide all
1572	1572	school districts with
1573	1573	[(B)] substantially equal access to funds to
1574	1574	provide an enriched program; and
1575	1575	(2) a facilities component as provided by Chapter 46.
1576	1576	SECTION 1.59. The heading to Subchapter B, Chapter 42,
1577	1577	Education Code, is amended to read as follows:
1578	1578	SUBCHAPTER B. REGULAR PROGRAM [BASIC] ENTITLEMENT
1579	1579	SECTION 1.60. Section 42.101, Education Code, is amended by
1580	1580	amending Subsections (a) and (c) and adding Subsection (d) to read
1581	1581	as follows:
1582	1582	(a) For each student in average daily attendance, not
1583	1583	including the time students spend each day in special education
1584	1584	programs in an instructional arrangement other than mainstream or
1585	1585	career and technology education programs, for which an additional
1586	1586	allotment is made under Subchapter C, a district is entitled to a
1587	1587	basic [an] allotment equal to $______ , subject to adjustments
1588	1588	under Sections 42.102, 42.103, and 42.104 [the lesser of $4,765 or
1589	1589	the amount that results from the following formula:
1590	1590	[A = $4,765 X (DCR/MCR)
1591	1591	[where:
1592	1592	["A" is the allotment to which a district is entitled;
1593	1593	["DCR" is the district's compressed tax rate, which is the
1594	1594	product of the state compression percentage, as determined under
1595	1595	Section 42.2516, multiplied by the maintenance and operations tax
1596	1596	rate adopted by the district for the 2005 tax year; and
1597	1597	["MCR" is the state maximum compressed tax rate, which is the
1598	1598	product of the state compression percentage, as determined under
1599	1599	Section 42.2516, multiplied by $1.50].
1600	1600	(c) The basic allotment is multiplied by the cost of
1601	1601	education index under Section 42.102 and, if applicable, adjusted
1602	1602	by the small district adjustment under Section 42.103 to calculate
1603	1603	a district's adjusted allotment for purposes of the regular program
1604	1604	entitlement under this chapter and the special program allotments
1605	1605	under Subchapter C [This subsection applies to a school district
1606	1606	for which the compressed tax rate ("DCR") is determined in
1607	1607	accordance with Subsection (a-1). Any reduction in the district's
1608	1608	adopted maintenance and operations tax rate is applied to the
1609	1609	following components of the district's tax rate in the order
1610	1610	specified:
1611	1611	[(1) tax effort described by Section 42.302(a-1)(2);
1612	1612	[(2) tax effort described by Section 42.302(a-1)(1);
1613	1613	and
1614	1614	[(3) tax effort included in the determination of the
1615	1615	district's compressed tax rate ("DCR") under Subsection (a-1)].
1616	1616	(d) Not later than December 1 of each even-numbered year,
1617	1617	the Legislative Budget Board shall submit to the lieutenant
1618	1618	governor and the speaker of the house of representatives a
1619	1619	recommendation for the amount of the basic allotment to be provided
1620	1620	to a district under Subsection (a) or (b), including the amount that
1621	1621	results from applying the inflation rate, as determined by the
1622	1622	comptroller on the basis of changes in the United States Bureau of
1623	1623	Labor Statistics Consumer Price Index for All Urban Consumers, to
1624	1624	the allotment for the preceding school year. The Legislative
1625	1625	Budget Board shall consider student enrollment growth in developing
1626	1626	the recommendation.
1627	1627	SECTION 1.61. Section 42.102(a), Education Code, is amended
1628	1628	to read as follows:
1629	1629	(a) The basic allotment for each district is multiplied by
1630	1630	the revised cost of education adjustment determined under Section
1631	1631	41.301 [adjusted] to reflect the geographic variation in known
1632	1632	resource costs and costs of education due to factors beyond the
1633	1633	control of the school district.
1634	1634	SECTION 1.62. Section 42.103, Education Code, is amended to
1635	1635	read as follows:
1636	1636	Sec. 42.103. SMALL [AND MID-SIZED] DISTRICT ADJUSTMENT.
1637	1637	(a) The small district adjustment is intended to account for the
1638	1638	increased per student cost of education in districts with fewer
1639	1639	than 5,000 students.
1640	1640	(b) The basic allotment for certain small [and mid-sized]
1641	1641	districts is adjusted in accordance with this section. In this
1642	1642	section:
1643	1643	(1) "AA" is the district's adjusted allotment per
1644	1644	student;
1645	1645	(2) "ADA" is the number of students in average daily
1646	1646	attendance for which the district is entitled to an allotment under
1647	1647	Section 42.101; and
1648	1648	(3) "ABA" is the adjusted basic allotment determined
1649	1649	under Section 42.102.
1650	1650	(c) [(b)] The basic allotment of a school district that
1651	1651	[contains at least 300 square miles and] has not more than 5,000
1652	1652	[1,600] students in average daily attendance is adjusted by
1653	1653	applying the following formula that results in the greatest
1654	1654	adjusted allotment:
1655	1655	(1) AA = (1 + ((1,600 - ADA) X .0004)) X ABA;
1656	1656	[(c) The basic allotment of a school district that contains
1657	1657	less than 300 square miles and has not more than 1,600 students in
1658	1658	average daily attendance is adjusted by applying the formula:
1659	1659	[AA = (1 + ((1,600 - ADA) X .00025)) X ABA
1660	1660	[(d) The basic allotment of a school district that offers a
1661	1661	kindergarten through grade 12 program and has less than 5,000
1662	1662	students in average daily attendance is adjusted by applying the
1663	1663	formula, of the following formulas, that results in the greatest
1664	1664	adjusted allotment:
1665	1665	[(1) the formula in Subsection (b) or (c) for which the
1666	1666	district is eligible;] or
1667	1667	(2) AA = (1 + ((5,000 - ADA) X .000025)) X ABA.
1668	1668	SECTION 1.63. Subchapter B, Chapter 42, Education Code, is
1669	1669	amended by adding new Sections 42.104 and 42.105 to read as follows:
1670	1670	Sec. 42.104. SPARSITY ADJUSTMENT. Notwithstanding
1671	1671	Sections 42.101, 42.102, and 42.103, a school district that has
1672	1672	fewer than 130 students in average daily attendance shall be
1673	1673	provided an adjusted allotment under the applicable provisions of
1674	1674	Section 41.302.
1675	1675	Sec. 42.105. USE OF FUNDS PROVIDED FOR CERTAIN STUDENTS.
1676	1676	(a) Notwithstanding any other provision of this title, any funding
1677	1677	received by a school district for a student enrolled in 12th grade
1678	1678	may be used by the district to provide:
1679	1679	(1) apprentice programs;
1680	1680	(2) early college preparatory programs; and
1681	1681	(3) programs that provide direct savings for
1682	1682	prekindergarten and early elementary grades.
1683	1683	(b) The commissioner may adopt rules as necessary to
1684	1684	implement this section.
1685	1685	SECTION 1.64. Section 42.151(a), Education Code, is amended
1686	1686	to read as follows:
1687	1687	(a) For each student in average daily attendance in a
1688	1688	special education program under Subchapter A, Chapter 29, in a
1689	1689	mainstream instructional arrangement, a school district is
1690	1690	entitled to an annual allotment equal to the adjusted [basic]
1691	1691	allotment multiplied by 1.1. For each full-time equivalent student
1692	1692	in average daily attendance in a special education program under
1693	1693	Subchapter A, Chapter 29, in an instructional arrangement other
1694	1694	than a mainstream instructional arrangement, a district is entitled
1695	1695	to an annual allotment equal to the adjusted [basic] allotment
1696	1696	multiplied by a weight determined according to instructional
1697	1697	arrangement as follows:
1698	1698	Homebound5.0
1699	1699	Hospital class3.0
1700	1700	Speech therapy5.0
1701	1701	Resource room3.0
1702	1702	Self-contained, mild and moderate,
1703	1703	regular campus3.0
1704	1704	Self-contained, severe, regular campus3.0
1705	1705	Off home campus2.7
1706	1706	Nonpublic day school1.7
1707	1707	Vocational adjustment class2.3
1708	1708	SECTION 1.65. Section 42.151(f), Education Code, is
1709	1709	redesignated as Section 42.151(c), Education Code, to read as
1710	1710	follows:
1711	1711	(c) [(f)] In this section, "full-time equivalent student"
1712	1712	means 30 hours of contact a week between a special education student
1713	1713	and special education program personnel.
1714	1714	SECTION 1.66. Section 42.152(a), Education Code, is amended
1715	1715	to read as follows:
1716	1716	(a) For each student who is educationally disadvantaged or
1717	1717	who is a student who does not have a disability and resides in a
1718	1718	residential placement facility in a district in which the student's
1719	1719	parent or legal guardian does not reside, a district is entitled to
1720	1720	an annual allotment equal to the adjusted [basic] allotment
1721	1721	multiplied by 0.2, and by 2.41 for each full-time equivalent
1722	1722	student who is in a remedial and support program under Section
1723	1723	29.081 because the student is pregnant.
1724	1724	SECTION 1.67. Section 42.152(b-1), Education Code, is
1725	1725	redesignated as Section 42.152(c), Education Code, to read as
1726	1726	follows:
1727	1727	(c) [(b-1)] A student receiving a full-time virtual
1728	1728	education through the state virtual school network may be included
1729	1729	in determining the number of educationally disadvantaged students
1730	1730	under Subsection (b) if the school district submits to the
1731	1731	commissioner a plan detailing the enhanced services that will be
1732	1732	provided to the student and the commissioner approves the plan.
1733	1733	SECTION 1.68. Section 42.153(a), Education Code, is amended
1734	1734	to read as follows:
1735	1735	(a) For each student in average daily attendance in a
1736	1736	bilingual education or special language program under Subchapter B,
1737	1737	Chapter 29, a district is entitled to an annual allotment equal to
1738	1738	the adjusted [basic] allotment multiplied by 0.1.
1739	1739	SECTION 1.69. Section 42.154(a), Education Code, as
1740	1740	effective September 1, 2017, is amended to read as follows:
1741	1741	(a) For each full-time equivalent student in average daily
1742	1742	attendance in an approved career and technology education program
1743	1743	in grades nine through 12 or in career and technology education
1744	1744	programs for students with disabilities in grades seven through 12,
1745	1745	a district is entitled to:
1746	1746	(1) an annual allotment equal to the adjusted [basic]
1747	1747	allotment multiplied by a weight of 1.35; and
1748	1748	(2) $50, if the student is enrolled in two or more
1749	1749	advanced career and technology education classes for a total of
1750	1750	three or more credits.
1751	1751	SECTION 1.70. Chapter 42, Education Code, is amended by
1752	1752	adding Subchapter D and adding a subchapter heading to read as
1753	1753	follows:
1754	1754	SUBCHAPTER D. TRANSPORTATION ALLOTMENT
1755	1755	SECTION 1.71. Sections 42.155(a), (b), (c), and (j),
1756	1756	Education Code, are transferred to Subchapter D, Chapter 42,
1757	1757	Education Code, as added by this Act, redesignated as Section
1758	1758	42.201, Education Code, and amended to read as follows:
1759	1759	Sec. 42.201. TRANSPORTATION ALLOTMENT. (a) Each district
1760	1760	or county operating a transportation system is entitled to
1761	1761	allotments for transportation costs as provided by this section.
1762	1762	(b) As used in this section:
1763	1763	(1) "Regular eligible student" means a student who
1764	1764	resides two or more miles from the student's campus of regular
1765	1765	attendance, measured along the shortest route that may be traveled
1766	1766	on public roads, and who is not classified as a student eligible for
1767	1767	special education services.
1768	1768	(2) "Eligible special education student" means a
1769	1769	student who is eligible for special education services under
1770	1770	Section 29.003 and who would be unable to attend classes without
1771	1771	special transportation services.
1772	1772	(3) "Linear density" means the average number of
1773	1773	regular eligible students transported daily, divided by the
1774	1774	approved daily route miles traveled by the respective
1775	1775	transportation system.
1776	1776	(c) Each district or county operating a regular
1777	1777	transportation system is entitled to an allotment based on the
1778	1778	daily cost per regular eligible student of operating and
1779	1779	maintaining the regular transportation system and the linear
1780	1780	density of that system. In determining the cost, the commissioner
1781	1781	shall give consideration to factors affecting the actual cost of
1782	1782	providing these transportation services in each district or county.
1783	1783	The average actual cost is to be computed by the commissioner and
1784	1784	included for consideration by the legislature in the General
1785	1785	Appropriations Act. The allotment per mile of approved route may
1786	1786	not exceed the amount set by appropriation.
1787	1787	(d) [(j)] The Texas School for the Deaf is entitled to an
1788	1788	allotment under this section. The commissioner shall determine the
1789	1789	appropriate allotment.
1790	1790	SECTION 1.72. Section 42.251, Education Code, is amended to
1791	1791	read as follows:
1792	1792	Sec. 42.251. FINANCING; GENERAL RULE. (a) A school
1793	1793	district's Foundation School Program maintenance and operations
1794	1794	cost is the [The] sum of:
1795	1795	(1) the district's effective tax rate, as provided
1796	1796	under Section 42.2512, multiplied by the sum of the regular program
1797	1797	entitlement to which the district is entitled [basic allotment]
1798	1798	under Subchapter B and the sum of the special allotments under
1799	1799	Subchapter C to which the district is entitled, computed in
1800	1800	accordance with this chapter; and
1801	1801	(2) the transportation allotment under Subchapter D[,
1802	1802	constitute the tier one allotments].
1803	1803	(b) The sum of the Foundation School Program maintenance and
1804	1804	operations costs for all accredited school districts in this state
1805	1805	constitutes [tier one allotments and the guaranteed yield
1806	1806	allotments under Subchapter F, computed in accordance with this
1807	1807	chapter, constitute] the total maintenance and operations cost of
1808	1808	the Foundation School Program.
1809	1809	(c) [(b)] The program shall be financed by:
1810	1810	(1) state available school funds distributed in
1811	1811	accordance with law [ad valorem tax revenue generated by an
1812	1812	equalized uniform school district effort];
1813	1813	(2) ad valorem tax revenue generated by local school
1814	1814	district effort [in excess of the equalized uniform school district
1815	1815	effort]; and
1816	1816	(3) [state available school funds distributed in
1817	1817	accordance with law; and
1818	1818	[(4)] state funds appropriated for the purposes of
1819	1819	public school education and allocated to each district in an amount
1820	1820	sufficient to finance the maintenance and operations cost of each
1821	1821	district's Foundation School Program not covered by other funds
1822	1822	specified in this subsection.
1823	1823	SECTION 1.73. Subchapter E, Chapter 42, Education Code, is
1824	1824	amended by adding Section 42.2512 to read as follows:
1825	1825	Sec. 42.2512. EFFECTIVE TAX RATE. (a) A district's
1826	1826	effective tax rate is the district's adopted maintenance and
1827	1827	operations tax rate per $100 of taxable value multiplied by the
1828	1828	ratio of the district's appraised value of property for maintenance
1829	1829	and operations tax purposes to the taxable value of property in the
1830	1830	school district for the current tax year determined under
1831	1831	Subchapter M, Chapter 403, Government Code.
1832	1832	(b) The effective tax rate for an open-enrollment charter
1833	1833	school under Chapter 12 is the state average effective tax rate.
1834	1834	SECTION 1.74. The heading to Section 42.252, Education
1835	1835	Code, is amended to read as follows:
1836	1836	Sec. 42.252. LOCAL SHARE OF PROGRAM COST [(TIER ONE)].
1837	1837	SECTION 1.75. Section 42.252(a), Education Code, is amended
1838	1838	to read as follows:
1839	1839	(a) Each school district's share of the maintenance and
1840	1840	operations cost of the Foundation School Program is the sum of the
1841	1841	district's distribution from the state available school fund and
1842	1842	the district's maintenance and operations tax collections for the
1843	1843	current year [determined by the following formula:
1844	1844	[LFA = TR X DPV
1845	1845	[where:
1846	1846	["LFA" is the school district's local share;
1847	1847	["TR" is a tax rate which for each hundred dollars of
1848	1848	valuation is an effective tax rate of the amount equal to the
1849	1849	product of the state compression percentage, as determined under
1850	1850	Section 42.2516, multiplied by the lesser of:
1851	1851	[(1) $1.50; or
1852	1852	[(2) the maintenance and operations tax rate adopted
1853	1853	by the district for the 2005 tax year; and
1854	1854	["DPV" is the taxable value of property in the school
1855	1855	district for the preceding tax year determined under Subchapter M,
1856	1856	Chapter 403, Government Code].
1857	1857	SECTION 1.76. Sections 42.253(a) and (c), Education Code,
1858	1858	are amended to read as follows:
1859	1859	(a) For each school year the commissioner shall determine:
1860	1860	(1) the amount of money to which a school district is
1861	1861	entitled under Subchapters B, [and] C, and D;
1862	1862	(2) [the amount of money to which a school district is
1863	1863	entitled under Subchapter F;
1864	1864	[(3)] the amount of money allocated to the district
1865	1865	from the available school fund; and
1866	1866	(3) [(4) the amount of each district's tier one local
1867	1867	share under Section 42.252; and
1868	1868	[(5)] the amount of each district's maintenance and
1869	1869	operations tax collections [tier two local share under Section
1870	1870	42.302].
1871	1871	(c) Each school district is entitled to an amount equal to
1872	1872	the difference for that district between Subsection [the sum of
1873	1873	Subsections] (a)(1) [and (a)(2)] and the sum of Subsections (a)(2)
1874	1874	and (a)(3)[, (a)(4), and (a)(5)].
1875	1875	SECTION 1.77. Section 42.254, Education Code, is amended to
1876	1876	read as follows:
1877	1877	Sec. 42.254. OPTIONS TO ENSURE EFFICIENCY OF FOUNDATION
1878	1878	SCHOOL PROGRAM [ESTIMATES REQUIRED]. (a) If a school district's
1879	1879	total revenue under Sections 42.253(a)(2) and (3) exceeds the
1880	1880	district's entitlement under Section 42.253(a)(1), a district may
1881	1881	choose to exercise one or more options under Subchapter B, C, D, or
1882	1882	E, Chapter 41, to eliminate all excess revenue. If the district
1883	1883	fails to elect an option, the commissioner shall exercise an option
1884	1884	under Subchapter F or G, Chapter 41, to reduce the district's
1885	1885	anticipated revenue by an amount sufficient to eliminate any excess
1886	1886	revenue [Not later than October 1 of each even-numbered year:
1887	1887	[(1) the agency shall submit to the legislature an
1888	1888	estimate of the tax rate and student enrollment of each school
1889	1889	district for the following biennium; and
1890	1890	[(2) the comptroller shall submit to the legislature
1891	1891	an estimate of the total taxable value of all property in the state
1892	1892	as determined under Subchapter M, Chapter 403, Government Code, for
1893	1893	the following biennium].
1894	1894	(b) The total amount to be remitted to the state by a
1895	1895	district under Subchapter D, Chapter 41, must at least equal the
1896	1896	amount by which the district's total revenue under Sections
1897	1897	42.253(a)(2) and (3) exceeds the district's entitlement under
1898	1898	Section 42.253(a)(1) [The agency and the comptroller shall update
1899	1899	the information provided to the legislature under Subsection (a)
1900	1900	not later than March 1 of each odd-numbered year].
1901	1901	(c) If a district subject to this section chooses another
1902	1902	option to achieve the efficiency of the system under Chapter 41 or
1903	1903	the commissioner takes action under Subchapter F or G, Chapter 41,
1904	1904	any district involved may not have a resulting amount of total
1905	1905	revenue under Sections 42.253(a)(2) and (3) that exceeds the
1906	1906	district's entitlement under Section 42.253(a)(1).
1907	1907	SECTION 1.78. The heading to Section 42.258, Education
1908	1908	Code, is amended to read as follows:
1909	1909	Sec. 42.258. RECOVERY OF OVERALLOCATED FUNDS OR
1910	1910	INSUFFICIENT PAYMENTS.
1911	1911	SECTION 1.79. Section 42.258(a), Education Code, is amended
1912	1912	to read as follows:
1913	1913	(a) If a school district has received an overallocation of
1914	1914	state funds or has failed to make sufficient payments to the state
1915	1915	under Section 42.254, the agency shall, by withholding from
1916	1916	subsequent allocations of state funds or increasing the amount of
1917	1917	payments owed for the current or subsequent school year or by
1918	1918	requesting and obtaining a refund, recover from the district an
1919	1919	amount equal to the overallocation or insufficient payments.
1920	1920	SECTION 1.80. The heading to Subchapter F, Chapter 42,
1921	1921	Education Code, is amended to read as follows:
1922	1922	SUBCHAPTER F. CALCULATION OF WEIGHTED AVERAGE DAILY ATTENDANCE
1923	1923	[GUARANTEED YIELD PROGRAM]
1924	1924	SECTION 1.81. Section 42.301, Education Code, is amended to
1925	1925	read as follows:
1926	1926	Sec. 42.301. PURPOSE. The purpose of the calculation of
1927	1927	weighted students under this subchapter is to provide a method of
1928	1928	comparison of student funding under [the guaranteed yield component
1929	1929	of] the Foundation School Program. By accounting for the state
1930	1930	recognized and funded uncontrollable cost differences in educating
1931	1931	students, the use of weighted students in funding comparisons
1932	1932	reflects the state policy under Section 42.001. Weighted students
1933	1933	are not used in the determination of funding for school districts
1934	1934	[is to provide each school district with the opportunity to provide
1935	1935	the basic program and to supplement that program at a level of its
1936	1936	own choice. An allotment under this subchapter may be used for any
1937	1937	legal purpose other than capital outlay or debt service].
1938	1938	SECTION 1.82. The heading to Section 42.302, Education
1939	1939	Code, is amended to read as follows:
1940	1940	Sec. 42.302. CALCULATION OF WEIGHTED STUDENTS [ALLOTMENT].
1941	1941	SECTION 1.83. Section 42.302(a), Education Code, is amended
1942	1942	to read as follows:
1943	1943	(a) For comparing student funding under Section 42.301,
1944	1944	[Each school district is guaranteed a specified amount per weighted
1945	1945	student in state and local funds for each cent of tax effort over
1946	1946	that required for the district's local fund assignment up to the
1947	1947	maximum level specified in this subchapter. The amount of state
1948	1948	support, subject only to the maximum amount under Section 42.303,
1949	1949	is determined by the formula:
1950	1950	[GYA = (GL X WADA X DTR X 100) - LR
1951	1951	[where:
1952	1952	["GYA" is the guaranteed yield amount of state funds to be
1953	1953	allocated to the district;
1954	1954	["GL" is the dollar amount guaranteed level of state and
1955	1955	local funds per weighted student per cent of tax effort, which is an
1956	1956	amount described by Subsection (a-1) or a greater amount for any
1957	1957	year provided by appropriation;
1958	1958	["WADA" is] the number of students in weighted average daily
1959	1959	attendance[, which] is calculated by dividing the sum of the school
1960	1960	district's allotments under Subchapters B and C[, less any
1961	1961	allotment to the district for transportation, any allotment under
1962	1962	Section 42.158 or 42.160, and 50 percent of the adjustment under
1963	1963	Section 42.102,] by the basic allotment for the applicable year[;
1964	1964	["DTR" is the district enrichment tax rate of the school
1965	1965	district, which is determined by subtracting the amounts specified
1966	1966	by Subsection (b) from the total amount of maintenance and
1967	1967	operations taxes collected by the school district for the
1968	1968	applicable school year and dividing the difference by the quotient
1969	1969	of the district's taxable value of property as determined under
1970	1970	Subchapter M, Chapter 403, Government Code, or, if applicable,
1971	1971	under Section 42.2521, divided by 100; and
1972	1972	["LR" is the local revenue, which is determined by
1973	1973	multiplying "DTR" by the quotient of the district's taxable value
1974	1974	of property as determined under Subchapter M, Chapter 403,
1975	1975	Government Code, or, if applicable, under Section 42.2521, divided
1976	1976	by 100].
1977	1977	SECTION 1.84. The following provisions of the Education
1978	1978	Code are repealed:
1979	1979	(1) Section 41.002, as effective immediately before
1980	1980	the effective date of this Act;
1981	1981	(2) Sections 41.0031 and 41.0041;
1982	1982	(3) Section 41.006, as effective immediately before
1983	1983	the effective date of this Act;
1984	1984	(4) Section 41.092;
1985	1985	(5) Section 41.093(b-1);
1986	1986	(6) Section 41.0931;
1987	1987	(7) Section 41.097(b);
1988	1988	(8) Sections 41.098 and 41.099;
1989	1989	(9) Subchapter E, Chapter 41, as effective immediately
1990	1990	before the effective date of this Act;
1991	1991	(10) Section 41.157(d);
1992	1992	(11) Section 41.159(b);
1993	1993	(12) Sections 41.206(d), (e), (f), (g), (h), (i), (j),
1994	1994	and (k);
1995	1995	(13) Sections 41.207, 41.208, 41.209, and 41.210;
1996	1996	(14) Section 41.252(c);
1997	1997	(15) Section 42.009;
1998	1998	(16) Sections 42.101(a-1) and (a-2);
1999	1999	(17) Section 42.104, as effective immediately before
2000	2000	the effective date of this Act;
2001	2001	(18) Section 42.106;
2002	2002	(19) Section 42.151(l);
2003	2003	(20) Section 42.154(e);
2004	2004	(21) the heading to Section 42.155;
2005	2005	(22) Sections 42.1541, 42.156, 42.157, 42.158,
2006	2006	42.160, 42.2513, 42.2516, 42.2517, and 42.2518;
2007	2007	(23) Sections 42.252(a-1), (b), (c), and (d);
2008	2008	(24) Sections 42.2521, 42.2522, and 42.2523;
2009	2009	(25) Section 42.253(b);
2010	2010	(26) Sections 42.2531, 42.2532, and 42.257;
2011	2011	(27) Sections 42.258(a-1) and (b);
2012	2012	(28) Sections 42.259(a), (b), (c), (d), (e), and (f);
2013	2013	(29) Sections 42.2591, 42.260, and 42.262;
2014	2014	(30) Sections 42.302(a-1), (a-2), (b), (c), (d), (e),
2015	2015	and (f); and
2016	2016	(31) Sections 42.303, 42.304, and 42.4101.
2017	2017	SECTION 1.85. Any rule adopted by the commissioner of
2018	2018	education under Chapter 41 or 42, Education Code, before the
2019	2019	effective date of this Act continues to apply to Chapter 41 or 42,
2020	2020	Education Code, as amended by this Act, if Chapter 41 or 42,
2021	2021	Education Code, as amended by this Act, includes a section that is
2022	2022	substantially the same as a section of Chapter 41 or 42, Education
2023	2023	Code, that existed before the effective date of this Act.
2024	2024	ARTICLE 2. CONFORMING AMENDMENTS
2025	2025	[[[to be added at a later date]]]
2026	2026	ARTICLE 3. EFFECTIVE DATE
2027	2027	SECTION 3.01. This Act takes effect September 1, 2018.