The bill would amend Section 39.053(g-4) of the Education Code to exclude students from the computation of dropout and completion rates if the student received interventions from the district as described in Section 26.004.

The bill would amend Section 48.110(f) of the Education Code by counting students who earn an associate's degree while attending high school or during a time period established by the Commissioner for purposes of calculating the college, career, and military readiness outcomes bonus (CCMR).

The bill would amend the Career and Technology Education Allotment by changing to base it on the sum of Basic Allotment and the Small and Mid-Sized Allotment. The bill would alter the weighted formula for the Career and Technology Education Allotment by creating three weights based on whether the course taken is in an approved program of study for the Career and Technology Education allotment.

This bill would alter the weighted formula and the criteria to receive the Fast Growth Allotment found in Section 48.111 of the Education Code. The Fast Growth Allotment would be based on the number of enrolled students added over six years over 250 rather than average daily attendance for qualifying districts. The allotment would be based on 0.3 multiplied by the Basic Allotment for each enrolled student over 250 students in fiscal year 2022; the weight would increase to 0.348 in fiscal year 2023, and 0.35 in subsequent years.

The Fast Growth Allotment would be capped at $270 million in fiscal year 2022, $310 million in fiscal year 2023, $315 million in fiscal year 2024, and $320 million in subsequent years.

The bill would provide for districts which received the Fast Growth Allotment in fiscal year 2020, but who were not entitled to the allotment in fiscal year 2022 to receive the amount they were entitled to in fiscal year 2020. This portion of the Fast Growth Allotment would be limited to $40 million, and districts would receive a prorated allotment if the allotments under this Section exceeded that amount.

The bill would amend the section 48.257(c) of the Education Code, allowing districts to net state aid received against recapture.

The bill would provide for a reduction in recapture, in the amount of the Teacher Incentive Allotment under Section 48.112, for any district to which Section 48.257(b) applies. An adjustment under this Section would not be included in calculating a districts revenue under Section 48.277of the Education Code.

The bill would amend Subchapter F, Chapter 48, Education Code by adding sections 48.281 and 48.282. Section 48.281 would authorize the commissioner to make adjustments to districts' entitlements under Chapter 48, as necessary to ensure compliance with federal maintenance of effort (MOE) and maintenance of equity (MOQ) under the Coronavirus Response and Relief Supplemental Appropriations Act 2021.

Section 48.282 would require school districts to reserve a percentage of the state and local funds made available to the district through the Foundation School Fund. The percentage would be set by appropriation and would be applied to the amount of funding received by the district under the American Rescue Plan (ARP) Act of 2021.

The Commissioner would be authorized to waive some spending requirements under Chapter 48, if a district can provide a plan to accelerate all students who are not grade level by school year 2023-2024.

The bill would amend subchapter A, Chapter 49 of the Education Code by adding Section 49.0041. Any district that did not receive formal notification of excess local revenue status under 49.004(a) of the Education Code, but would have otherwise been subject to local revenue in excess of entitlement provisions, would have that excess local revenue added to any amount subject to recapture in the following school year for the applicable district.

The bill would put a cap of $400 million on the Formula Transition Grant.

The bill would require the Texas Education Agency (TEA) to transfer funds to the Texas Workforce Commission to operate the High School Equivalency subsidy program.

The bill would repeal Sections 25.038, 25.039(b) and (c) and Section 48.154 which authorize certain school districts to charge tuition to transfer students and allow for FSP reimbursement for tuition paid by the district from which the students transfer.

This analysis assumes that the bill would result in a total state cost for the Foundation School Program of $137,368,216 for fiscal year 2022 and $127,155,364 for fiscal year 2023, increasing to $162,584,163 in fiscal year 2026, primarily related to changes the bill would make in Career and Technology Education Allotment, the adjustment to recapture for Teacher Incentive Allotment, and the Fast Growth Allotment.

TEA estimates requiring districts to pay any applicable recapture costs in the subsequent year if a district was not notified under Section 49.004(a) of the Education Code would result in a savings to the state of $2.7 million per year.

Section 18 of the bill would expand the opportunities for a district subject to recapture to net its recapture payment against state aid. Based on information provided by TEA, this would have the impact of reducing recapture revenue by $109,270,924 in fiscal year 2022, $127,686,496 in fiscal year 2023, and there would be a corresponding savings to the Foundation School Fund No. 193 of the same amount to account for the decrease in recapture.

To meet Maintenance of Effort (MOE) and Maintenance of Equity (MOQ) under the Coronavirus Response and Relief Supplemental Appropriations Act 2021, districts would require increased funding but TEA assumes that a separate appropriation would be made to fund federal MOE and MOQ and that this provision will not have a fiscal impact on the FSP. Therefore, these provisions of this bill will not result in any additional amount of funding required to meet federal MOE and MOQ requirements which are imposed by the federal statutes, over and above any amount the legislature would be assumed to deliver to districts in order to comply under current law.

TEA anticipates an administrative cost of three Financial Analyst III FTE. TEA estimates the combined salary for the FTEs to be $233,586 per fiscal year, related benefits to be $97,466 per fiscal year, and other operating expenses related to the FTEs to be $18,000 in fiscal year 2022 and $6,000 per year in subsequent years. 

The Workforce Commission indicates a cost of $750,000 per year to pay for the High School Equivalency subsidy program.

The bill would repeal Sections 25.038, 25.039(b) and (c) and Section 48.154 which would save $1.7 million annually.