Floor Packet Page No. 24
      Amend CSHB 4 as follows:
      Beginning on page 21, strike lines 20-27 through page 22,
lines 1-10, and substitute the following:
      "(b)<(c)>  (1)  Funds allocated under this chapter for
compensatory education programs <section>, other than an indirect
cost allotment established under rules adopted by the commissioner
<State Board of Education>, which may not exceed 15 percent, must
be used only in providing compensatory education and accelerated
instruction programs under 29.081 and may only be expended to
improve and enhance programs and services funded under the regular
education program.
            (2)  A district's compensatory education allotment may
only be used for costs supplementary to the regular program:
program and student evaluation, instructional materials and
equipment, supplemental staff expenses, salary supplements for
teachers, other supplies required for quality instruction, smaller
class size, and individualized instruction.
            (3)  A <, and the> district must account for the
expenditure of <state> funds allocated under this chapter for
compensatory education programs by program and by campus under
existing agency reporting and auditing procedures for the 1997-1998
school year.
            (4)  During the 1997-1998 school year, the
commissioner, with the assistance of the state auditor and the
comptroller of public accounts, shall develop and implement by rule
in the 1998 - 1999 school year an annual reporting and auditing
system of district and campus compensatory education funds, to
ensure that compensatory education funds, other than the indirect
cost allotment, are expended only to supplement the regular
program.
            (5)  The commissioner, in the year following an audit,
shall withhold from a district's foundation school fund payment an
amount equal to the amount of funds determined by agency audit not
to have been used to supplement the regular program. The
commissioner shall release such funds to a district when it has
provided a detailed plan to expend those funds appropriately
according to this subsection.  <Funds allocated under this section,
other than the indirect cost allotment, shall only be expended to
improve and enhance programs and services funded under the regular
program.>
            (6)  A home-rule school district or an open-enrollment
charter school must use funds allocated under this chapter for
compensatory education programs <Subsection (a)> to provide
compensatory education services but is not otherwise subject to
Subchapter C, Chapter 29."