81R12580 PAM/EAH-D

By: Eissler H.B. No. 3

A BILL TO BE ENTITLED

AN ACT

relating to public school accountability, curriculum, and promotion requirements.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Sections 7.056(e) and (f), Education Code, are amended to read as follows:

(e) Except as provided by Subsection (f), a school campus or district may not receive an exemption or waiver under this section from:

(1) a prohibition on conduct that constitutes a criminal offense;

(2) a requirement imposed by federal law or rule, including a requirement for special education or bilingual education programs; or

(3) a requirement, restriction, or prohibition relating to:

(A) curriculum essential knowledge or skills under Section 28.002 or high school [minimum] graduation requirements under Section 28.025;

(B) public school accountability as provided by Subchapters B, C, D, E, and J [G], Chapter 39;

(C) extracurricular activities under Section 33.081 or participation in a University Interscholastic League area, regional, or state competition under Section 33.0812;

(D) health and safety under Chapter 38;

(E) purchasing under Subchapter B, Chapter 44;

(F) elementary school class size limits, except as provided by Section 25.112;

(G) removal of a disruptive student from the classroom under Subchapter A, Chapter 37;

(H) at-risk programs under Subchapter C, Chapter 29;

(I) prekindergarten programs under Subchapter E, Chapter 29;

(J) educator rights and benefits under Subchapters A, C, D, E, F, G, and I, Chapter 21, or under Subchapter A, Chapter 22;

(K) special education programs under Subchapter A, Chapter 29;

(L) bilingual education programs under Subchapter B, Chapter 29; or

(M) the requirements for the first day of instruction under Section 25.0811.

(f) A school district or campus that is required to develop and implement a student achievement improvement plan under Section 39.101 [39.131] or 39.102 [39.132] may receive an exemption or waiver under this section from any law or rule other than:

(1) a prohibition on conduct that constitutes a criminal offense;

(2) a requirement imposed by federal law or rule;

(3) a requirement, restriction, or prohibition imposed by state law or rule relating to:

(A) public school accountability as provided by Subchapters B, C, D, E, and J [G], Chapter 39; or

(B) educator rights and benefits under Subchapters A, C, D, E, F, G, and I, Chapter 21, or under Subchapter A, Chapter 22; or

(4) textbook selection under Chapter 31.

SECTION 2. Section 7.062(e), Education Code, is amended to read as follows:

(e) The rules must:

(1) limit the amount of assistance provided through a grant to not more than:

(A) for a construction project, $200 per square foot of the science laboratory to be constructed; or

(B) for a renovation project, $100 per square foot of the science laboratory to be renovated;

(2) require a school district to demonstrate, as a condition of eligibility for a grant, that the existing district science laboratories are insufficient in number to comply with the curriculum requirements imposed for the Texas Diploma [recommended] and advanced high school programs under Section 28.025(b-1)(1); and

(3) provide for ranking school districts that apply for grants on the basis of wealth per student and giving priority in the award of grants to districts with low wealth per student.

SECTION 3. Section 12.104(b), Education Code, is amended to read as follows:

(b) An open-enrollment charter school is subject to:

(1) a provision of this title establishing a criminal offense; and

(2) a prohibition, restriction, or requirement, as applicable, imposed by this title or a rule adopted under this title, relating to:

(A) the Public Education Information Management System (PEIMS) to the extent necessary to monitor compliance with this subchapter as determined by the commissioner;

(B) criminal history records under Subchapter C, Chapter 22;

(C) reading instruments and accelerated reading instruction programs under Section 28.006;

(D) [satisfactory performance on assessment instruments and to] accelerated instruction under Section 28.0211;

(E) high school graduation requirements under Section 28.025;

(F) special education programs under Subchapter A, Chapter 29;

(G) bilingual education under Subchapter B, Chapter 29;

(H) prekindergarten programs under Subchapter E, Chapter 29;

(I) extracurricular activities under Section 33.081;

(J) discipline management practices or behavior management techniques under Section 37.0021;

(K) health and safety under Chapter 38;

(L) public school accountability under Subchapters B, C, D, E, and J [G], Chapter 39;

(M) the requirement under Section 21.006 to report an educator's misconduct; and

(N) intensive programs of instruction under Section 28.0213.

SECTION 4. Section 28.002, Education Code, is amended by adding Subsections (c-1) and (c-2) to read as follows:

(c-1) The State Board of Education shall adopt rules to allow courses offered in the foundation curriculum or the enrichment curriculum to simultaneously satisfy, to the extent practicable, more than one required credit for the standard, Texas Diploma, or advanced high school program in which the student is participating.

(c-2) The State Board of Education shall adopt rules to authorize each school district to implement a program under which students in middle or junior high school may earn credits toward high school graduation in middle or junior high school for any course determined by board rule to qualify as a high school equivalent course.

SECTION 5. Section 28.014(b), Education Code, is amended to read as follows:

(b) A student who successfully completes a course developed under this section may use the credit earned in the course toward satisfying the applicable mathematics or science curriculum requirement for the Texas Diploma [recommended] or advanced high school program under Section 28.025.

SECTION 6. The heading to Section 28.0211, Education Code, is amended to read as follows:

Sec. 28.0211. STUDENT ADVANCEMENT DETERMINATION; [SATISFACTORY] PERFORMANCE ON ASSESSMENT INSTRUMENTS [REQUIRED]; ACCELERATED INSTRUCTION.

SECTION 7. Section 28.0211, Education Code, is amended by amending Subsections (a), (b), (c), (d), (e), (f), (g), and (i) and adding Subsections (c-1), (d-1), (d-2), and (d-3) to read as follows:

(a) Not later than the first day of the school year, a school district shall determine the requirements for student advancement from one grade level to the next. In determining whether a student may be promoted to the next grade level, the district shall consider:

(1) the student's score on an assessment instrument administered under Section 39.023(a), (b), or (l);

(2) the recommendation of the student's teacher;

(3) the student's grade in each subject or course; and

(4) any other necessary information, as determined by the district. [Except as provided by Subsection (b) or (e), a student may not be promoted to:

[(1) the fourth grade program to which the student would otherwise be assigned if the student does not perform satisfactorily on the third grade reading assessment instrument under Section 39.023;

[(2) the sixth grade program to which the student would otherwise be assigned if the student does not perform satisfactorily on the fifth grade mathematics and reading assessment instruments under Section 39.023; or

[(3) the ninth grade program to which the student would otherwise be assigned if the student does not perform satisfactorily on the eighth grade mathematics and reading assessment instruments under Section 39.023.]

(b) A school district shall provide to a student who initially fails to perform satisfactorily on the third grade reading assessment instrument, the fifth grade mathematics and reading assessment instruments, or the eighth grade mathematics and reading assessment instruments under Section 39.023 an [assessment instrument specified under Subsection (a) at least two] additional opportunity [opportunities] to take the assessment instrument. [A school district may administer an alternate assessment instrument to a student who has failed an assessment instrument specified under Subsection (a) on the previous two opportunities. Notwithstanding any other provision of this section, a student may be promoted if the student performs at grade level on an alternate assessment instrument under this subsection that is appropriate for the student's grade level and approved by the commissioner.]

(c) If [Each time] a student fails to perform satisfactorily on a mathematics or reading [an] assessment instrument administered [specified] under Section 39.023(a), (b), or (l) [Subsection (a)], the school district [in which the student attends school] shall establish [provide to the student accelerated instruction in the applicable subject area, including reading instruction for a student who fails to perform satisfactorily on a reading assessment instrument. After a student fails to perform satisfactorily on an assessment instrument a second time,] a grade placement committee [shall be established] to prescribe the accelerated instruction the district shall provide to the student [before the student is administered the assessment instrument the third time]. The grade placement committee shall be composed of the principal or the principal's designee, the student's parent or guardian, and the teacher of the subject of an assessment instrument on which the student failed to perform satisfactorily. The district shall notify the parent or guardian of the time and place for convening the grade placement committee and the purpose of the committee. The accelerated instruction program provided under this subsection must be systematic and may not be based solely on assessment instrument practice skills and:

(1) for a student in a third, fifth, or eighth grade program:

(A) must provide for instruction in the applicable subject area;

(B) must be approved by the student's parent or guardian and the district; and

(C) [An accelerated instruction group administered by a school district under this section] may not have a ratio of more than 10 students for each teacher in an accelerated instruction group; or

(2) for a student in a program other than a third, fifth, or eighth grade program, be made available to the student's parent or guardian and the student's teacher in the next grade level.

(c-1) A school district shall implement an accelerated instruction program under Subsection (c) not later than the 30th day after the first day of school of the next school year. Accelerated instruction may occur outside of regular school hours, including during summer school.

(d) In addition to providing accelerated instruction to a student under Subsection (c), the district shall notify the student's parent or guardian of:

(1) the student's failure to perform satisfactorily on the assessment instrument;

(2) the accelerated instruction program to which the student is assigned; [and]

(3) the possibility that the student might be retained at the same grade level for the next school year;

(4) the information collected under Subsection (a);

(5) the areas requiring improvement to perform satisfactorily on a mathematics or reading assessment instrument specified under Section 39.023(a), (b), or (l); and

(6) any other applicable information as determined by the district.

(d-1) A school district shall make information provided to a parent or guardian under Subsections (d)(4), (5), and (6) available to the student's current teacher and the student's teacher in the next grade level.

(d-2) After considering the information specified under Subsection (a), the grade placement committee shall make a determination that the student who failed a mathematics or reading assessment instrument administered under Section 39.023(a), (b), or (l) be:

(1) retained at the same grade level for the next school year; or

(2) placed in the next grade level with accelerated instruction as provided under Subsection (c).

(d-3) A student who fails to participate in an accelerated instruction program developed under Subsection (c)(1) may not be promoted to the next grade level program to which the student would otherwise be assigned if the student does not perform satisfactorily on the applicable assessment instrument specified under Subsection (b).

(e) A [student who, after at least three attempts, fails to perform satisfactorily on an assessment instrument specified under Subsection (a) shall be retained at the same grade level for the next school year in accordance with Subsection (a). The] student's parent or guardian may [appeal the student's retention by submitting a] request that [to] the grade placement committee reconsider the committee's decision under Subsection (d-2) to retain the student [established under Subsection (c)]. The school district shall give the parent or guardian written notice of the opportunity to request reconsideration [appeal. The grade placement committee may decide in favor of a student's promotion only if the committee concludes, using standards adopted by the board of trustees, that if promoted and given accelerated instruction, the student is likely to perform at grade level]. A student may not be promoted on the basis of the grade placement committee's decision under this subsection unless that decision is unanimous. The commissioner by rule shall establish a time line for making the placement determination. This subsection does not create a property interest in promotion. The decision of the grade placement committee under this subsection is final and may not be appealed.

(f) An accelerated instruction program under Subsection (c) [A school district shall provide to a student who, after three attempts, has failed to perform satisfactorily on an assessment instrument specified under Subsection (a) accelerated instruction during the next school year as prescribed by an educational plan developed for the student by the student's grade placement committee established under Subsection (c). The district shall provide that accelerated instruction regardless of whether the student has been promoted or retained. The educational plan] must be designed to enable the student to perform at the appropriate grade level by the conclusion of the school year. During the school year, the student shall be monitored to ensure that the student is progressing in accordance with the program [plan]. The district shall administer to the student the assessment instrument for the grade level in which the student is placed at the time the district regularly administers the assessment instruments for that school year.

(g) This section does not preclude the retention at a grade level, in accordance with state law or school district policy, of a student who performs satisfactorily on an assessment instrument administered [specified] under Section 39.023 [Subsection (a)].

(i) The admission, review, and dismissal committee of a student who participates in a district's special education program under Subchapter B, Chapter 29, and who does not perform satisfactorily on a mathematics or reading [an] assessment instrument [specified under Subsection (a) and] administered under Section 39.023(a) or (b) shall determine:

(1) the manner in which the student will participate in an accelerated instruction program under this section; and

(2) whether the student will be promoted or retained under this section.

SECTION 8. Section 28.025, Education Code, is amended by amending Subsections (a), (b), (b-1), (e), and (g) and adding Subsections (b-3) and (e-1) to read as follows:

(a) The State Board of Education by rule shall determine curriculum requirements for the standard, Texas Diploma [minimum, recommended], and advanced high school programs that are consistent with the required curriculum under Section 28.002. Subject to Subsection (b-1), the State Board of Education shall designate the specific courses in the foundation curriculum required for a student participating in the standard, Texas Diploma, or advanced high school program. Except as provided by Subsection (b-1)(1)(B), the State Board of Education may not designate a specific course or a specific number of credits required for a subject in the enrichment curriculum. This subsection does not prohibit the State Board of Education from designating the total number of credits required under the enrichment curriculum for a student participating in the standard, Texas Diploma, or advanced high school program.

(b) A school district shall ensure that each student enrolls in the courses necessary to complete the curriculum requirements identified by the State Board of Education under Subsection (a) for the Texas Diploma [recommended] or advanced high school program unless the student, the student's parent or other person standing in parental relation to the student, and a school counselor or school administrator agree that the student should be permitted to take courses under the standard [minimum] high school program.

(b-1) The State Board of Education by rule shall require that:

(1) except as provided by Subsection (b-2), the curriculum requirements for the Texas Diploma [recommended] and advanced high school programs under Subsection (a) include a requirement that students successfully complete:

(A) four courses in each subject of the foundation curriculum under Section 28.002(a)(1);

(B) two courses in a language other than English under Section 28.002(a)(2)(A); and

(C) eight elective courses; [and]

(2) one or more courses offered in the required curriculum for the Texas Diploma [recommended] and advanced high school programs include a research writing component; and

(3) the curriculum requirements for the standard high school program under Subsection (a) include a requirement that students successfully complete:

(A) four courses in English language arts;

(B) three courses in mathematics;

(C) two courses in science;

(D) three courses in social studies;

(E) one additional course in either science or social studies; and

(F) nine elective courses.

(b-3) Notwithstanding Section 5.09, Chapter 5 (H.B. 1), 79th Legislature, 3rd Called Session, 2006, the curriculum requirements for the Texas Diploma and advanced high school programs under Section 28.025(b-1) apply to students entering the ninth grade beginning with the 2011-2012 school year. This subsection expires September 1, 2015.

(e) Each school district shall report the academic achievement record of students who have completed a standard, Texas Diploma [minimum, recommended], or advanced high school program on transcript forms adopted by the State Board of Education. The transcript forms adopted by the board must be designed to clearly differentiate between each of the high school programs and identify whether a student received a diploma or a certificate of coursework completion.

(e-1) A school district shall provide an endorsement of college readiness on the transcript of a student who has completed a Texas Diploma or advanced high school program and has demonstrated the performance standard for college readiness as provided by Section 39.024 on the Algebra II and English III end-of-course assessment instruments. A district shall provide an endorsement of postsecondary readiness on the transcript of a student who has completed a Texas Diploma or advanced high school program and has demonstrated the alternate performance standard as provided under Section 39.0243. The State Board of Education shall adopt rules as necessary to administer this subsection.

(g) If a student, other than a student permitted to take courses under the standard [minimum] high school program as provided by Subsection (b), is unable to complete the Texas Diploma [recommended] or advanced high school program solely because necessary courses were unavailable to the student at the appropriate times in the student's high school career as a result of course scheduling, lack of enrollment capacity, or another cause not within the student's control, the school district shall indicate that fact on the student's transcript form described by Subsection (e).

SECTION 9. Section 29.094(c), Education Code, is amended to read as follows:

(c) A campus may apply to the commissioner to participate in the pilot program. The commissioner may select for participation in the pilot program only campuses that have failed to improve student performance in reading according to standards established by the commissioner. The standards established by the commissioner for purposes of this subsection must be based on reading performance standards considered [required] for student promotion under Section 28.0211.

SECTION 10. Section 29.096(e), Education Code, is amended to read as follows:

(e) The commissioner shall establish minimum standards for a local collaborative agreement, including a requirement that the agreement must be signed by an authorized school district or open-enrollment charter school officer and an authorized representative of each of the other participating entities that is a partner in the collaboration. The program must:

(1) limit participation in the program to students authorized to participate by a parent or other person standing in parental relationship;

(2) have as a primary goal graduation from high school under at least the Texas Diploma [recommended] high school program;

(3) provide for local businesses or other employers to offer paid employment or internship opportunities and advanced career and vocational training;

(4) include an outreach component and a lead educational staff member to identify and involve eligible students and public and private entities in participating in the program;

(5) serve a population of students of which at least 50 percent are identified as students at risk of dropping out of school, as described by Section 29.081(d);

(6) allocate not more than 15 percent of grant funds and matching funds, as determined by the commissioner, to administrative expenses;

(7) include matching funds from any of the participating entities; and

(8) include any other requirements as determined by the council.

SECTION 11. Section 29.904(d), Education Code, is amended to read as follows:

(d) A plan developed under this section:

(1) must establish clear, achievable goals for increasing the percentage of the school district's graduating seniors, particularly the graduating seniors attending a high school described by Subsection (a), who enroll in an institution of higher education for the academic year following graduation;

(2) must establish an accurate method of measuring progress toward the goals established under Subdivision (1) that may include the percentage of district high school students and the percentage of students attending a district high school described by Subsection (a) who:

(A) are enrolled in a course for which a student may earn college credit, such as an advanced placement or international baccalaureate course or a course offered through concurrent enrollment in high school and at an institution of higher education;

(B) are enrolled in courses that meet the curriculum requirements for the Texas Diploma [recommended] or advanced high school program as determined under Section 28.025;

(C) have submitted a free application for federal student aid (FAFSA);

(D) are exempt under Section 51.3062(p) or (q) [51.306(l) or (m)] from administration of an assessment [a test] instrument under Section 51.3062 [51.306] or have performed successfully on an assessment [a test] instrument under Section 51.3062 [51.306];

(E) graduate from high school;

(F) graduate from an institution of higher education; and

(G) have taken college entrance examinations and the average score of those students on the examinations;

(3) must cover a period of at least five years; and

(4) may be directed at district students at any level of primary or secondary education.

SECTION 12. Section 32.252(b), Education Code, is amended to read as follows:

(b) The portal must serve as a single point of access to educational resources, access to general student assessment data, and secure access to individual student assessment data. In addition to any other purpose specified by this subchapter or any other educational purpose, the portal may be used to:

(1) alleviate inequities in access to educational resources by providing access to on-line courses;

(2) improve student academic performance by providing access to tutorial materials, instructional materials that have been shown to improve academic performance, and other interactive materials, including materials that assess an individual student's knowledge and prepare the student for the administration of a standardized assessment instrument, including an assessment instrument administered under Section 39.023;

(3) provide school districts with access to administrative software and other electronic tools designed to promote administrative efficiency and intra-district communication; or

(4) [provide secure access to student assessment data; or

[(5)] provide links to appropriate educational resources and experts available through the Internet.

SECTION 13. Section 32.258, Education Code, is amended to read as follows:

Sec. 32.258. STUDENT ASSESSMENT DATA. (a) The agency shall [may] establish a secure, interoperable system to be implemented through the portal under which:

(1) a student or the student's parent or other person standing in parental relationship can easily access the student's individual assessment data; and

(2) an authorized employee of a school district, including a district teacher, [districts] can readily access individual [student] assessment data of district students for use in developing strategies for improving student performance.

(b) The system established under Subsection (a) shall provide a means for a student or the student's parent or other person standing in parental relationship to track the student's progress on assessment instrument requirements for graduation.

(c) The agency shall establish an interoperable system to be implemented through the portal under which general student assessment data is easily accessible to the public.

(d) Student assessment data provided under this section must include student performance data on assessment instruments over multiple years, beginning with the 2007-2008 school year, including any data indicating progress in student achievement.

(e) Each [(b) In establishing the] system established under [required by] this section must permit comparisons of [, the agency shall seek to further the goal of providing school districts with access to] student performance information at the classroom, campus, district, and state levels [level].

SECTION 14. Section 33.007(b), Education Code, is amended to read as follows:

(b) During the first school year a student is enrolled in a high school or at the high school level in an open-enrollment charter school, and again during a student's senior year, a counselor shall provide information about higher education to the student and the student's parent or guardian. The information must include information regarding:

(1) the importance of higher education;

(2) the advantages of completing the Texas Diploma [recommended] or advanced high school program adopted under Section 28.025(a);

(3) the disadvantages of taking courses to prepare for a high school equivalency examination relative to the benefits of taking courses leading to a high school diploma;

(4) financial aid eligibility;

(5) instruction on how to apply for federal financial aid;

(6) the center for financial aid information established under Section 61.0776;

(7) the automatic admission of certain students to general academic teaching institutions as provided by Section 51.803;

(8) the eligibility and academic performance requirements for the TEXAS Grant as provided by Subchapter M, Chapter 56; and

(9) the availability of programs in the district under which a student may earn college credit, including advanced placement programs, dual credit programs, joint high school and college credit programs, and international baccalaureate programs.

SECTION 15. Section 39.023, Education Code, is amended by adding Subsection (a-1) and amending Subsections (c-4), (e), and (l) to read as follows:

(a-1) The agency shall develop assessment instruments required under Subsection (a) in a manner that allows, to the extent practicable:

(1) the score a student receives to provide reliable information relating to a student's college readiness performance, as defined by Section 39.024(a); and

(2) an appropriate range of performances to serve as a valid indication of growth in student achievement.

(c-4) To the extent practicable and subject to Section 39.024, the agency shall ensure that each end-of-course assessment instrument adopted under Subsection (c) is:

(1) developed in a manner that measures a student's performance under the college readiness standards established under Section 28.008; and

(2) validated by national postsecondary education experts for college readiness content and performance standards.

(e) Under rules adopted by the State Board of Education, every third year, the agency shall release the questions and answer keys to each assessment instrument administered under Subsection (a), (b), (c), (d), or (l), excluding any assessment instrument administered to a student for the purpose of retaking the assessment instrument, after the last time the instrument is administered for that school year. To ensure a valid bank of questions for use each year, the agency is not required to release a question that is being field-tested and was not used to compute the student's score on the instrument. The agency shall also release, under board rule, each question that is no longer being field-tested and that was not used to compute a student's score.

(l) The State Board of Education shall adopt rules for the administration of the assessment instruments adopted under Subsection (a) in Spanish to students in grades three through five [six] who are of limited English proficiency, as defined by Section 29.052, whose primary language is Spanish, and who are not otherwise exempt from the administration of an assessment instrument under Section 39.027(a)(3) or (4). Each student of limited English proficiency whose primary language is Spanish, other than a student to whom Subsection (b) applies, may be assessed using assessment instruments in Spanish under this subsection for up to three years or assessment instruments in English under Subsection (a). The language proficiency assessment committee established under Section 29.063 shall determine which students are administered assessment instruments in Spanish under this subsection.

SECTION 16. Section 39.0233(d), Education Code, is amended to read as follows:

(d) The questions adopted under this section may not [must] be administered in a separate section of the end-of-course assessment instrument [in which the questions are included].

SECTION 17. Subchapter B, Chapter 39, Education Code, is amended by amending Section 39.024 and adding Sections 39.0241, 39.0242, and 39.0243 to read as follows:

Sec. 39.024. MEASURES OF READINESS. (a) In this section:

(1) "College readiness" means the level of preparation a student must attain in English language arts and mathematics courses to enroll and succeed, without remediation, in an entry-level general education course for credit in that same content area at:

(A) a postsecondary educational institution that primarily offers baccalaureate degrees and primarily serves a limited geographic region; or

(B) a postsecondary educational institution that primarily offers associate's degrees or certificates or credentials other than baccalaureate or advanced degrees.

(2) "Skilled workforce and technical readiness" means the level of preparation a student must attain in Algebra I and English III courses to enroll and succeed in a workforce training, certification, or other credential program at a postsecondary educational institution that primarily offers associate's degrees or certificates or credentials other than baccalaureate or advanced degrees.

(b) The agency shall ensure that the end-of-course assessment instruments required under Section 39.023(c) are developed to be capable of, beginning with the 2011-2012 school year, measuring:

(1) skilled workforce and technical readiness for Algebra I and English III end-of-course assessment instruments; and

(2) college readiness for Algebra II and English III end-of-course assessment instruments.

(c) Before the beginning of the 2011-2012 school year, the agency shall gather data and conduct research studies to substantiate:

(1) the correlation between a certain level of performance by students on the Algebra I and English III end-of-course assessment instruments and skilled workforce and technical readiness; and

(2) the correlation between a certain level of performance by students on the Algebra II and English III end-of-course assessment instruments and college readiness.

(d) Studies under Subsection (c) must include an evaluation of any need for remediation courses to facilitate skilled workforce and technical readiness or college readiness.

(e) Based on the results of the studies conducted under Subsection (c), the commissioner of education, in conjunction with the commissioner of higher education, shall establish student performance standards for:

(1) the Algebra I and English III end-of-course assessment instruments indicating that students have attained skilled workforce and technical readiness; and

(2) the Algebra II and English III end-of-course assessment instruments indicating that students have attained college readiness.

(f) To the extent practicable, the agency shall conduct research studies similar to the studies conducted under Subsection (c)(2) for the appropriate science and social studies end-of-course assessment instruments.

(f-1) Not later than December 1, 2010, the agency shall deliver to the lieutenant governor, the speaker of the house of representatives, and the clerks of the standing committees of the senate and the house of representatives with primary jurisdiction over public education a report that includes:

(1) an analysis of the feasibility of establishing college readiness performance standards for science and social studies end-of-course assessment instruments; and

(2) if feasible, recommendations for implementing each standard.

(f-2) Subsection (f-1) and this subsection expire January 1, 2011.

(g) The agency shall continue to gather data to perform studies as provided under Subsections (c) and (f) at least once every two years.

(h) The agency shall periodically review the college readiness performance standards established under this section and compare the performance standards to performance standards established nationally and internationally for comparable assessment instruments. Following each review, the agency shall deliver to the lieutenant governor, the speaker of the house of representatives, and the clerks of the standing committees of the senate and the house of representatives with primary jurisdiction over public education a report on the results of the review indicating whether the college readiness performance standards established under this section are sufficiently rigorous to prepare students in this state to compete academically with students nationally and internationally. If the agency determines that the college readiness performance standards established under this section are not sufficiently rigorous, the agency shall recommend changes to the college readiness performance standards.

Sec. 39.0241. SATISFACTORY PERFORMANCE. (a) Except as otherwise provided by Subsection (b) [this subsection], the State Board of Education shall determine the level of performance considered to be satisfactory on the assessment instruments.

(a-1) Beginning with the 2011-2012 school year, satisfactory performance on English language arts and mathematics assessment instruments for purposes of this chapter means the performance across grade levels necessary to indicate college readiness, as defined by Section 39.024(a), except as:

(1) modified by Section 39.0242(d); or

(2) provided by Subsection (a-2)(2) or Section 39.0243.

(a-2) The State Board of Education shall establish:

(1) for the Texas Diploma and advanced high school programs, the performance standard for the Algebra II and English III end-of-course assessment instruments, as provided under Section 39.024(b)(2);

(2) for the standard high school program, the performance standard for the Algebra I and English III end-of-course assessment instruments, as provided under Section 39.024(b)(1);

(3) except as provided by Subdivision (2), the performance standard for the Algebra I and English II end-of-course assessment instruments, as determined based on studies under Section 39.0242 that correlate student performance on the Algebra I and English II end-of-course assessment instruments with student performance on the Algebra II and English III assessment instruments;

(4) the performance standard for the English I end-of-course assessment instrument, as determined based on studies under Section 39.0242 that correlate student performance on the English I end-of-course assessment instrument with student performance on the English II assessment instrument;

(5) the performance standard for the grade eight assessment instruments, as determined based on studies under Section 39.0242 that correlate student performance on the grade eight assessment instruments with student performance on the Algebra I and English I end-of-course assessment instruments in the same content area;

(6) the performance standard for the grade seven assessment instruments, as determined based on studies under Section 39.0242 that correlate student performance on the grade seven assessment instruments with student performance on the grade eight assessment instruments in the same content area;

(7) the performance standard for the grade six assessment instruments, as determined based on studies under Section 39.0242 that correlate student performance on the grade six assessment instruments with student performance on the grade seven assessment instruments in the same content area;

(8) the performance standard for the grade five assessment instruments, as determined based on studies under Section 39.0242 that correlate student performance on the grade five assessment instruments with student performance on the grade six assessment instruments in the same content area;

(9) the performance standard for the grade four assessment instruments, as determined based on studies under Section 39.0242 that correlate student performance on the grade four assessment instruments with student performance on the grade five assessment instruments in the same content area; and

(10) the performance standard for the grade three assessment instruments, as determined based on studies under Section 39.0242 that correlate student performance on the grade three assessment instruments with student performance on the grade four assessment instruments in the same content area.

(b) The admission, review, and dismissal committee of a student being assessed under Section 39.023(b) shall determine the level of performance considered to be satisfactory on the assessment instruments administered to that student in accordance with criteria established by agency rule.

(c) The agency shall develop study guides for the assessment instruments administered under Sections 39.023(a) and (c). To assist parents in providing assistance during the period that school is recessed for summer, each school district shall distribute the study guides to parents of students who do not perform satisfactorily on one or more parts of an assessment instrument administered under this subchapter.

(d) The agency shall develop and make available teacher training materials and other teacher training resources to assist teachers in enabling students of limited English proficiency to meet state performance expectations. The teacher training resources shall be designed to support intensive, individualized, and accelerated instructional programs developed by school districts for students of limited English proficiency.

(e) The commissioner shall retain a portion of the total amount of funds allotted under Section 42.152(a) that the commissioner considers appropriate to finance activities under Subsection [Subsections] (c) and may retain a portion for activities under Subsection (d) and for intensive programs of instruction for students of limited English proficiency offered by school districts and shall reduce each district's allotment proportionately.

Sec. 39.0242. SATISFACTORY PERFORMANCE: RESEARCH STUDIES AND IMPLEMENTATION OF STANDARD. (a) During the 2010-2011 school year, the agency shall collect data through:

(1) the annual administration of assessment instruments required under Section 39.023(a) in grades three through eight; and

(2) the administration to appropriate students throughout the state of an end-of-course assessment instrument field test.

(b) Before the beginning of the 2011-2012 school year, the agency shall analyze the data collected under Subsection (a) to substantiate:

(1) the correlation between satisfactory student performance on the grade three, four, five, six, or seven assessment instruments with satisfactory performance on the assessment instruments in the same content area for the next grade level;

(2) the correlation between satisfactory student performance on the grade eight assessment instruments with satisfactory performance on the Algebra I and English I end-of-course assessment instruments in the same content area;

(3) the correlation between satisfactory student performance on the English I end-of-course assessment instrument with satisfactory performance on the English II end-of-course assessment instrument;

(4) for the standard high school program, the correlation between satisfactory student performance on the English II end-of-course assessment instrument with satisfactory performance as determined under Section 39.024 on the English III end-of-course assessment instrument; and

(5) for the Texas Diploma and advanced high school programs, the correlation between satisfactory student performance on the Algebra I and English II end-of-course assessment instruments with satisfactory performance as determined under Section 39.024 on the Algebra II and English III end-of-course assessment instruments.

(c) Studies under this section must include an evaluation of any need for remediation courses to facilitate skilled workforce and technical readiness or college readiness.

(d) Based on the results of the studies conducted under this section, the State Board of Education shall establish a level of satisfactory performance that is more rigorous than the standard of satisfactory performance established before the 2011-2012 school year, but less rigorous than the level of satisfactory performance identified under the studies conducted under this section as indicating that students have attained college readiness. The State Board of Education shall incrementally increase the level of satisfactory performance during the 2012-2013 through 2016-2017 school years to the level identified under the studies conducted under this section as indicating that students have attained college readiness.

(e) Once the level of satisfactory performance has been established at the level indicating college readiness, the agency shall continue to gather data and perform studies as provided under this section at least once every two years. If the data does not support the correlation between student performance standards and college readiness, the State Board of Education shall revise the standard of performance considered to be satisfactory.

Sec. 39.0243. ALTERNATE PERFORMANCE STANDARD: POSTSECONDARY READINESS. (a) This section applies only to a student participating in a Texas Diploma or advanced high school program who is administered the Algebra II and English III end-of-course assessment instruments.

(b) Regardless of whether the student demonstrates the performance standard for college readiness as provided by Section 39.024, the student demonstrates postsecondary readiness under this section if the student earns in a curriculum course in which the student is enrolled a certificate required for employment in a high-demand, high-wage, high-skill occupation, as determined under this section.

(c) The Texas Workforce Commission shall develop, in consultation with the Texas Workforce Investment Council, a list of high-demand, high-wage, high-skill occupations in this state that have industry certifications. The Texas Workforce Commission shall provide the research and technical support for developing the list under this subsection.

(d) The Texas Workforce Investment Council shall consider the list developed under Subsection (c) and approve a list for submission to the commissioner. On approval of the list, the Texas Workforce Investment Council shall deliver the list to the commissioner.

(e) The commissioner of education, after consultation with the commissioner of higher education, shall consider the list delivered under Subsection (d) and approve a final list of high-demand, high-wage, high-skill occupations in this state that have industry certifications.

(f) The list of high-demand, high-wage, high-skill occupations in this state that have industry certifications shall be reviewed and approved under the process provided by Subsections (c) through (e) every four years.

(g) Notwithstanding any other provision of this section, a student's score on the Algebra II or English III end-of-course assessment instrument constitutes 15 percent of the student's grade in the applicable course.

SECTION 18. Section 39.025, Education Code, is amended by amending Subsections (a), (a-1), (b), (b-1), (b-2), and (f) and adding Subsections (a-2) and (c-1) to read as follows:

(a) The commissioner shall adopt rules requiring a student participating in the Texas Diploma [recommended] or advanced high school program to be administered each end-of-course assessment instrument listed in Section 39.023(c) and requiring a student participating in the standard [minimum] high school program to be administered an end-of-course assessment instrument listed in Section 39.023(c) only for Algebra I and English III and any other [a] course in which the student is enrolled and for which an end-of-course assessment instrument is administered. Except as otherwise provided by this section, a [A] student is required to perform satisfactorily on two of the three end-of-course assessment instruments [achieve,] in each subject in which the student is required to take end-of-course assessment instruments [in the foundation curriculum under Section 28.002(a)(1), a cumulative score that is at least equal to the product of the number of end-of-course assessment instruments administered to the student in that subject and 70, with each end-of-course assessment instrument scored on a scale of 100. A student must achieve a score of at least 60 on an end-of-course assessment instrument for the score to count towards the student's cumulative score]. Except as provided under Subsection (a-2), a student participating in the standard high school program must perform satisfactorily on the Algebra I and English III end-of-course assessment instruments and a student participating in the Texas Diploma or advanced high school program must perform satisfactorily on the Algebra II and English III end-of-course assessment instruments [For purposes of this subsection, a student's cumulative score is determined using the student's highest score on each end-of-course assessment instrument administered to the student]. A student may not receive a high school diploma until the student has performed satisfactorily on the end-of-course assessment instruments in the manner provided under this subsection. [This subsection does not require a student to demonstrate readiness to enroll in an institution of higher education.]

(a-1) The student's score on an end-of-course assessment instrument constitutes 15 percent of the student's grade in the course for which the assessment instrument is administered.

(a-2) The commissioner by rule shall determine a method by which a student's satisfactory performance on an advanced placement test, international baccalaureate examination, a Scholastic Assessment Test (SAT) Subject Test, or another assessment instrument determined by the commissioner to be at least as rigorous as an end-of-course assessment instrument adopted under Section 39.023(c) may be used as a factor in determining whether the student satisfies the requirements of Subsection (a)[, including the cumulative score requirement of that subsection].

(b) Each time an end-of-course assessment instrument is administered, a student who failed to perform satisfactorily [achieve a score of at least 60] on the assessment instrument shall retake the assessment instrument. Any other student may retake an end-of-course assessment instrument for any reason. A student is not required to retake a course as a condition of retaking an end-of-course assessment instrument.

(b-1) A school district shall provide each student who fails to perform satisfactorily [achieve a score of at least 70] on an end-of-course assessment instrument with accelerated instruction in the subject assessed by the assessment instrument.

(b-2) The agency, in consultation with the Texas Higher Education Coordinating Board, shall develop senior-level English language arts and mathematics accelerated instruction courses for purposes of this section. If [a school district determines that] a student does not demonstrate the performance standard for college readiness as provided by Section 39.024 on the Algebra II or English III end-of-course assessment instrument [, on completion of grade 11, is unlikely to achieve the cumulative score requirements for one or more subjects prescribed by Subsection (a) for receiving a high school diploma], the district shall offer [require] the student the opportunity to enroll in a [corresponding content-area college preparatory] course described by this subsection [for which an end-of-course assessment instrument has been adopted, if available]. A student who enrolls in a [college preparatory] course described by this subsection shall be administered an appropriate end-of-course assessment instrument [for the course, with the end-of-course assessment instrument scored on a scale of 40. A student may use the student's score on the end-of-course assessment instrument for the college preparatory course towards satisfying the cumulative score requirements] prescribed by Subsection (a).

(c-1) A school district may not administer an assessment instrument required for graduation administered under this section as this section existed before September 1, 1999. A school district may administer to a student who failed to perform satisfactorily on an assessment instrument described by this subsection an alternate assessment instrument designated by the commissioner. The commissioner shall determine the level of performance considered to be satisfactory on an alternate assessment instrument. The district may not administer to the student an assessment instrument or a part of an assessment instrument that assesses a subject that was not assessed in an assessment instrument required for graduation administered under this section as this section existed before September 1, 1999. The commissioner shall make available to districts information necessary to administer the alternate assessment instrument authorized by this subsection. The commissioner's determination regarding designation of an appropriate alternate assessment instrument under this subsection and the performance required on the assessment instrument is final and may not be appealed.

(f) The commissioner shall by rule adopt a transition plan to implement the amendments made by Chapter 1312 (S.B. No. 1031), Acts of the 80th Legislature, Regular Session, 2007, replacing general subject assessment instruments administered at the high school level with end-of-course assessment instruments [to this section and Sections 39.023(a) and (c) and 39.051(b)(5)]. The rules must provide for the end-of-course assessment instruments adopted under Section 39.023(c) to be administered beginning with students entering the ninth grade during the 2011-2012 school year. During the period under which the transition to end-of-course assessment instruments is made:

(1) for students entering a grade above the ninth grade during the 2011-2012 school year, the commissioner shall retain, administer, and use for purposes of accreditation and other campus and district accountability measures [ratings] under this chapter [Subchapter D] the assessment instruments required by Section 39.023(a) or (c), as that section existed before amendment by Chapter 1312 (S.B. No. 1031), Acts of the 80th Legislature, Regular Session, 2007; and

(2) the agency may defer releasing assessment instrument questions and answer keys as required by Section 39.023(e) to the extent necessary to develop additional assessment instruments.

SECTION 19. Section 39.027(e), Education Code, is amended to read as follows:

(e) The commissioner shall develop an assessment system that shall be used for evaluating the academic progress, including reading proficiency in English, of all students of limited English proficiency, as defined by Section 29.052. A student who is exempt from the administration of an assessment instrument under Subsection (a)(3) or (4) who achieves reading proficiency in English as determined by the assessment system developed under this subsection shall be administered the assessment instruments described by Sections 39.023(a) and (c). The performance under the assessment system developed under this subsection of students to whom Subsection (a)(3) or (4) applies shall be included in the [academic excellence] indicator systems [system] under Sections 39.053 and 39.301, as applicable [Section 39.051], the performance report under Section 39.306 [39.053], and the comprehensive annual report under Section 39.332 [39.182]. This information shall be provided in a manner that is disaggregated by the bilingual education or special language program, if any, in which the student is enrolled.

SECTION 20. Section 39.033(b), Education Code, is amended to read as follows:

(b) An agreement under this section must require the private school to:

(1) as determined appropriate by the commissioner, provide to the commissioner the information described by Sections 39.053(c) and 39.301(c); [Section 39.051(b)] and

(2) [to] maintain confidentiality in compliance with Section 39.030.

SECTION 21. Section 39.034, Education Code, is amended by amending Subsection (d) and adding Subsection (d-1) to read as follows:

(d) The agency shall determine the necessary annual improvement required each year for a student to be prepared to perform satisfactorily on, as applicable:

(1) the grade five assessment instruments;

(2) the grade eight assessment instruments; and

(3) the end-of-course assessment instruments required under this subchapter for graduation.

(d-1) The agency shall report the necessary annual improvement required under Subsection (d) to the district. Each year, the report must state whether the student fell below, met, or exceeded the necessary target for improvement.

SECTION 22. Subchapters C and D, Chapter 39, Education Code, as they existed on January 1, 2009, are repealed.

SECTION 23. Chapter 39, Education Code, is amended by adding Subchapter C to read as follows:

SUBCHAPTER C. ACCREDITATION

Sec. 39.051. ACCREDITATION STATUS. Accreditation of a school district or campus is determined in accordance with this subchapter. The commissioner by rule shall determine in accordance with this subchapter the criteria for the following accreditation statuses:

(1) accredited;

(2) accredited-warned; and

(3) accredited-probation.

Sec. 39.052. DETERMINATION OF ACCREDITATION STATUS. (a) Following the end of each school year, the commissioner shall determine the accreditation status of each school district and campus.

(b) In determining the accreditation status of a district, the commissioner:

(1) shall evaluate and consider:

(A) performance on student achievement indicators described by Section 39.053(c);

(B) performance under the financial accountability rating system developed under Subchapter D; and

(C) the district's current special education compliance status with the agency; and

(2) may evaluate and consider:

(A) the district's compliance with statutory requirements and requirements imposed by rule of the commissioner or State Board of Education under specific statutory authority that relate to:

(i) reporting data through the Public Education Information Management System (PEIMS) or other reports required by state or federal law or court order;

(ii) the high school graduation requirements under Section 28.025; or

(iii) an item listed under Sections 7.056(e)(3)(C)-(I) that applies to the district;

(B) the effectiveness of the district's programs for special populations; and

(C) the effectiveness of the district's career and technology program.

(c) In determining the accreditation status of a campus, the commissioner:

(1) shall evaluate and consider performance on student achievement indicators described by Section 39.053(c); and

(2) may evaluate and consider other factors the commissioner considers appropriate.

(d) Based on a school district's performance under Subsection (b) or a campus's performance under Subsection (c), the commissioner shall:

(1) assign each district and campus an accreditation status; or

(2) revoke the accreditation of the district or campus and order closure of the district or campus under this subchapter.

(e) A school district's accreditation status may be raised or lowered based on the district's performance or may be lowered based on the performance of one or more campuses in the district that is below a standard required under this subchapter.

(f) The commissioner shall notify a school district or campus that receives an accreditation status of accredited-warned or accredited-probation that the performance of the district or campus is below a standard required under this subchapter. The commissioner shall require the district to notify the parents of students enrolled in the district and property owners in the district of the accreditation status of the district or campus and the implications of that accreditation status.

(g) A school district that is not accredited may not receive funds from the agency or hold itself out as operating a public school of this state.

(h) This chapter may not be construed to invalidate a diploma awarded, course credit earned, or grade promotion granted by a school district before the commissioner revoked the district's accreditation.

Sec. 39.053. PERFORMANCE INDICATORS: STUDENT ACHIEVEMENT. (a) The commissioner shall adopt a set of indicators of the quality of learning and student achievement on a campus. The commissioner biennially shall review the indicators for the consideration of appropriate revisions.

(b) Performance on the student achievement indicators adopted under this section shall be compared to state-established standards. The degree of change from one school year to the next in performance on each indicator adopted under this section shall also be considered. The indicators must be based on information that is disaggregated by race, ethnicity, and socioeconomic status.

(c) Indicators of student achievement adopted under this section must include:

(1) the results of assessment instruments required under Sections 39.023(a), (b), (c), and (l), aggregated by grade level and subject area, including:

(A) the percentage of students who performed satisfactorily, as determined under the college readiness performance standards under Section 39.0241 or as determined under Section 39.0243, on the assessment instruments, aggregated by grade level and subject area; and

(B) for students who did not perform satisfactorily as described by Paragraph (A), the percentage of students who met the standard for annual improvement, as determined by the agency under Section 39.034, on assessment instruments, aggregated by grade level and subject area;

(2) dropout rates, including dropout rates and district completion rates for grade levels 9 through 12, computed in accordance with standards and definitions adopted by the National Center for Education Statistics of the United States Department of Education; and

(3) high school graduation rates, computed in accordance with standards and definitions adopted in compliance with the No Child Left Behind Act of 2001 (20 U.S.C. Section 6301 et seq.).

(d) Performance on the student achievement indicators described by Subsection (c) must be based on longitudinal student data that is disaggregated by the bilingual education or special language program, if any, in which students of limited English proficiency, as defined by Section 29.052, are or former students of limited English proficiency were enrolled. If a student described by this subsection is not or was not enrolled in specialized language instruction, the number and percentage of those students shall be provided.

(e) Performance on the student achievement indicator described by Subsection (c)(1) shall be compared to state standards, required improvement, and comparable improvement. The state standard shall be established by the commissioner. Required improvement is the progress necessary for the campus or district to meet state standards and for its students to meet college readiness performance standards as determined under Section 39.0241 or the alternate performance standard established under Section 39.0243. Comparable improvement is derived by measuring campuses and districts against a profile developed from a total state student performance database that exhibits substantial equivalence to the characteristics of students served by the campus or district, including past academic performance, socioeconomic status, ethnicity, and limited English proficiency.

(f) Annually, the commissioner shall define the state standard for the current school year for each student achievement indicator described by Subsection (c) for accreditation and shall project the state standards for each indicator for accreditation for the following two school years. The commissioner shall periodically raise the state standards for the student achievement indicator described by Subsection (c)(1)(A) for accreditation as necessary to reach the goal of achieving, by not later than the 2019-2020 school year, student performance in this state, disaggregated by race, ethnicity, and socioeconomic status, that ranks nationally in the top 10 states in terms of college readiness.

(g) In defining the required state standard for accreditation for the indicator described by Subsection (c)(2), the commissioner may not consider as a dropout a student whose failure to attend school results from:

(1) the student's expulsion under Section 37.007; and

(2) as applicable:

(A) adjudication as having engaged in delinquent conduct or conduct indicating a need for supervision, as defined by Section 51.03, Family Code; or

(B) conviction of and sentencing for an offense under the Penal Code.

(h) Each school district shall cooperate with the agency in determining whether a student is a dropout for purposes of accreditation and evaluating performance by school districts and campuses under this chapter.

(i) The commissioner by rule shall adopt accountability measures to be used in assessing the progress of students who have failed to perform satisfactorily as described by Subsection (c)(1)(A) in the preceding school year on an assessment instrument required under Section 39.023(a), (c), or (l).

Sec. 39.054. METHODS AND STANDARDS FOR EVALUATING PERFORMANCE. (a) The commissioner shall adopt rules to evaluate school district and campus performance.

(b) In evaluating performance, the commissioner shall evaluate against state standards and consider the performance of each campus in a school district and each open-enrollment charter school on the basis of the campus's or school's performance on the student achievement indicators adopted under Section 39.053(c). Any consideration of the effectiveness of district programs under Section 39.052(b)(2)(B) or (C) must be based on data collected through the Public Education Information Management System (PEIMS) for purposes of accountability under this chapter and include the results of assessment instruments required under Section 39.023.

(c) In evaluating school district and campus performance on the student achievement indicator adopted under Section 39.053(c)(1), the commissioner shall identify satisfactory performance as meeting the state standard determined by the commissioner under Section 39.053(f) for the current school year based on:

(1) student performance in the current school year; or

(2) student performance as averaged over the current school year and the preceding two school years.

(d) Each annual accreditation review under Section 39.052 shall include an analysis of the student achievement indicators adopted under Section 39.053(c) to determine school district and campus performance in relation to:

(1) standards established for each indicator;

(2) required improvement as defined under Section 39.053(e); and

(3) comparable improvement as defined by Section 39.053(e).

(e) In the computation of dropout rates under Section 39.053(c)(2), a student who is released from a juvenile pre-adjudication secure detention facility or juvenile post-adjudication secure correctional facility and fails to enroll in school or a student who leaves a residential treatment center after receiving treatment for fewer than 85 days and fails to enroll in school may not be considered to have dropped out from the school district or campus serving the facility or center unless that district or campus is the one to which the student is regularly assigned.

Sec. 39.055. STUDENT CONFINED BY COURT ORDER NOT CONSIDERED FOR ACCOUNTABILITY PURPOSES. Notwithstanding any other provision of this code, for purposes of determining the performance of a school district or campus under this chapter, including the accreditation status of a district or campus, a student confined by court order in a residential program or facility operated by or under contract with the Texas Youth Commission, the Texas Juvenile Probation Commission, a juvenile board, or any other governmental entity is not considered to be a student of the school district in which the program or facility is physically located. The performance of such a student on an assessment instrument or other student achievement indicator adopted under Section 39.053 or reporting indicator adopted under Section 39.301 shall be determined, reported, and considered separately from the performance of students attending a school of the district in which the program or facility is physically located.

Sec. 39.056. ON-SITE INVESTIGATIONS. (a) The commissioner may:

(1) direct the agency to conduct on-site investigations of a school district at any time to answer any questions concerning a program, including special education, required by federal law or for which the district receives federal funds; and

(2) as a result of the investigation, change the accreditation status of a district or campus or withdraw a distinction designation under Subchapter G.

(b) The commissioner shall determine the frequency of on-site investigations by the agency according to annual comprehensive analyses of student performance and equity in relation to the student achievement indicators adopted under Section 39.053.

(c) In making an on-site accreditation investigation, the investigators shall obtain information from administrators, teachers, and parents of students enrolled in the school district. The investigation may not be closed until information is obtained from each of those sources. The State Board of Education shall adopt rules for:

(1) obtaining information from parents and using that information in the investigator's report; and

(2) obtaining information from teachers in a manner that prevents a district or campus from screening the information.

(d) The agency shall give written notice to the superintendent and the board of trustees of a school district of any impending investigation of the district's or campus's accreditation.

(e) If an annual accreditation review under Section 39.052 indicates low performance on one or more of the indicators adopted under Section 39.053(c) of one or more campuses in a school district, the agency may conduct an on-site evaluation of those campuses only.

(f) The investigators shall report orally and in writing to the board of trustees of the school district and, as appropriate, to campus administrators and shall make recommendations concerning any necessary improvements or sources of aid such as regional education service centers.

Sec. 39.057. SPECIAL ACCREDITATION INVESTIGATIONS. (a) The commissioner shall authorize special accreditation investigations to be conducted:

(1) when excessive numbers of absences of students eligible to be tested on state assessment instruments are determined;

(2) when excessive numbers of allowable exemptions from the required state assessment instruments are determined;

(3) in response to complaints submitted to the agency with respect to alleged violations of civil rights or other requirements imposed on the state by federal law or court order;

(4) in response to established compliance reviews of the district's financial accounting practices and state and federal program requirements;

(5) when extraordinary numbers of student placements in disciplinary alternative education programs, other than placements under Sections 37.006 and 37.007, are determined;

(6) in response to an allegation involving a conflict between members of the board of trustees or between the board and the district administration if it appears that the conflict involves a violation of a role or duty of the board members or the administration clearly defined by this code;

(7) when excessive numbers of students in special education programs under Subchapter A, Chapter 29, are assessed through assessment instruments developed or adopted under Section 39.023(b);

(8) in response to an allegation regarding or an analysis using a statistical method result indicating a possible violation of an assessment instrument security procedure established under Section 39.0301, including for the purpose of investigating or auditing a school district under that section;

(9) when a significant pattern of increased student dropout rates or decreased academic performance develops as the result of the promotion of students who did not perform satisfactorily on assessment instruments administered under Section 39.023(a), (c), or (l); or

(10) as the commissioner otherwise determines necessary.

(b) If the agency's findings in an investigation under Subsection (a)(6) indicate that the board of trustees has observed a lawfully adopted policy, the agency may not substitute its judgment for that of the board.

(c) The commissioner may authorize special accreditation investigations to be conducted in response to repeated complaints submitted to the agency concerning imposition of excessive paperwork requirements on classroom teachers.

(d) Based on the results of a special accreditation investigation, the commissioner may:

(1) take appropriate action under Subchapter E;

(2) lower the school district's or campus's accreditation status; or

(3) take action under both Subdivisions (1) and (2).

(e) Regardless of whether the commissioner lowers the school district's or campus's accreditation status under Subsection (d), the commissioner may take action under Sections 39.101(a)(1) through (8) or 39.102(1) through (7) if the commissioner determines that the action is necessary to improve any area of a district's or campus's performance, including the district's financial accounting practices.

Sec. 39.058. CONDUCT OF INVESTIGATIONS. (a) The agency shall adopt written procedures for conducting on-site investigations under this subchapter. The agency shall make the procedures available to the complainant, the alleged violator, and the public. Agency staff must be trained in the procedures and must follow the procedures in conducting the investigation.

(b) After completing an investigation, the agency shall present preliminary findings to any person the agency finds has violated a law, rule, or policy. Before issuing a report with its final findings, the agency must provide a person the agency finds has violated a law, rule, or policy an opportunity for an informal review by the commissioner or a designated hearing examiner.

SECTION 24. Subchapter I, Chapter 39, Education Code, is redesignated as Subchapter D, Chapter 39, Education Code, and the sections in the redesignated subchapter, Sections 39.201, 39.202, 39.203, and 39.204, are redesignated as Sections 39.081, 39.082, 39.083, and 39.084, Education Code, respectively.

SECTION 25. Subchapter I, Chapter 39, Education Code, redesignated by this Act as Subchapter D, Chapter 39, Education Code, is amended by adding Sections 39.0821, 39.0822, and 39.0823 to read as follows:

Sec. 39.0821. COMPTROLLER REVIEW OF RESOURCE ALLOCATION PRACTICES. The comptroller shall identify school districts and campuses that use resource allocation practices that contribute to high academic achievement and cost-effective operations. In identifying districts and campuses under this section, the comptroller shall:

(1) evaluate existing academic accountability and financial data by integrating the data;

(2) rank the results of the evaluation under Subdivision (1) to identify the relative performance of districts and campuses; and

(3) identify potential areas for district and campus improvement.

Sec. 39.0822. FINANCIAL SOLVENCY REVIEW REQUIRED. (a) The agency shall develop a review process to anticipate the future financial solvency of each school district. The review process shall analyze:

(1) district revenues and expenditures for the preceding school year; and

(2) projected district revenues and expenditures for the current school year and the following five school years.

(b) In analyzing the information under Subsection (a), the review process developed must consider, for the preceding school year, the current school year, and the following five years, as appropriate:

(1) student-to-staff ratios relative to expenditures, including average staff salaries;

(2) the rate of depletion of the district general fund balance;

(3) the number of students enrolled in the district;

(4) the adopted tax rate of the district;

(5) any independent audit report prepared for the district; and

(6) actual financial data for the district for the month of September.

(c) The agency shall consult school district financial officers in developing the review process under this section.

(d) The agency shall develop a computer software template for school districts to use in submitting information to the agency for purposes of this section. Each district shall update information to the template within the period prescribed by the commissioner. The commissioner shall adopt rules under this subsection to allow a district to enter estimates of critical data into the template before the district adopts its budget. The template must:

(1) be capable of importing, to the extent practicable, data a district has previously submitted to the agency;

(2) include an entry space that allows a district to enter information explaining any irregularity in data submitted; and

(3) provide alerts for:

(A) a student-to-staff ratio that is significantly outside the norm;

(B) a rapid depletion of the district general fund balance; and

(C) a significant discrepancy between actual budget figures and projected revenues and expenditures.

(e) An alert in the template developed under Subsection (d) must be developed to notify the agency immediately on the occurrence of a condition described by Subsection (d)(3). After the agency is alerted, the agency shall immediately notify the affected school district regarding the condition triggering the alert.

Sec. 39.0823. PROJECTED DEFICIT. (a) If the review process under Section 39.0822 indicates a projected deficit for a school district general fund within the following five school years, the district shall provide the agency interim financial reports, supplemented by staff and student count data, as needed, to evaluate the district's current budget status.

(b) If the interim financial data provided under Subsection (a) substantiates the projected deficit, the school district shall develop a financial plan and submit the plan to the agency for approval. The agency may approve the plan only if the agency determines the plan will permit the district to avoid the projected insolvency.

(c) The commissioner shall assign a school district an accredited-warned status if:

(1) the district fails to submit a plan as provided by Subsection (b);

(2) the district fails to obtain approval from the agency for a plan as provided by Subsection (b);

(3) the district fails to comply with a plan approved by the agency under Subsection (b); or

(4) the agency determines in a subsequent school year, based on financial data submitted by the district, that the approved plan for the district is no longer sufficient or is not appropriately implemented.

SECTION 26. Section 39.203(b), Education Code, redesignated by this Act as Section 39.083(b), Education Code, is amended to read as follows:

(b) The annual financial management report must include:

(1) a description of the district's financial management performance based on a comparison, provided by the agency, of the district's performance on the indicators adopted under Section 39.082(b) [39.202(b)] to:

(A) state-established standards; and

(B) the district's previous performance on the indicators; [and]

(2) a description of the data submitted using the computer software template developed under Section 39.0822; and

(3) any descriptive information required by the commissioner.

SECTION 27. Subchapter G, Chapter 39, Education Code, is redesignated as Subchapter E, Chapter 39, Education Code, and the sections in the redesignated subchapter, Sections 39.131, 39.132, 39.1321, 39.1322, 39.1323, 39.1324, 39.1327, 39.133, 39.1331, 39.134, 39.135, 39.136, 39.137, and 39.138, Education Code, are redesignated as Sections 39.101, 39.102, 39.103, 39.104, 39.105, 39.106, 39.107, 39.108, 39.109, 39.110, 39.111, 39.112, 39.113, and 39.114, Education Code, respectively.

SECTION 28. The heading to Subchapter G, Chapter 39, Education Code, redesignated by this Act as Subchapter E, Chapter 39, Education Code, is amended to read as follows:

SUBCHAPTER E [G]. ACCREDITATION INTERVENTIONS AND SANCTIONS

SECTION 29. Section 39.131, Education Code, redesignated by this Act as Section 39.101, Education Code, is amended to read as follows:

Sec. 39.101 [39.131]. INTERVENTIONS AND SANCTIONS FOR DISTRICTS. (a) If a school district does not satisfy the accreditation criteria under Section 39.052 [39.071, the academic performance standards under Section 39.072,] or any financial accountability standard as determined by commissioner rule, the commissioner shall take any of the following actions to the extent the commissioner determines necessary:

(1) issue public notice of the deficiency to the board of trustees;

(2) order a hearing conducted by the board of trustees of the district for the purpose of notifying the public of the insufficient [unacceptable] performance, the improvements in performance expected by the agency, and the sanctions that may be imposed under this section if the performance does not improve;

(3) order the preparation of a student achievement improvement plan that addresses each student achievement [academic excellence] indicator under Section 39.053(c) for which the district's performance is insufficient [unacceptable], the submission of the plan to the commissioner for approval, and implementation of the plan;

(4) order a hearing to be held before the commissioner or the commissioner's designee at which the president of the board of trustees of the district and the superintendent shall appear and explain the district's low performance, lack of improvement, and plans for improvement;

(5) arrange an on-site investigation of the district;

(6) appoint an agency monitor to participate in and report to the agency on the activities of the board of trustees or the superintendent;

(7) appoint a conservator to oversee the operations of the district;

(8) appoint a management team to direct the operations of the district in areas of insufficient [unacceptable] performance or require the district to obtain certain services under a contract with another person;

(9) if a district has a current accreditation status of accredited-warned or accredited-probation, fails to satisfy any standard under Section 39.054(d) [is rated academically unacceptable], or fails to satisfy financial accountability standards as determined by commissioner rule, appoint a board of managers to exercise the powers and duties of the board of trustees;

(10) if for two consecutive school years, including the [current] school year for which performance is currently determined, a district has received an accreditation status of accredited-warned or accredited-probation, has failed to satisfy any standard under Section 39.054(d) [been rated academically unacceptable], or has failed to satisfy financial accountability standards as determined by commissioner rule, revoke the district's accreditation and:

(A) order closure of the district and annex the district to one or more adjoining districts under Section 13.054; or

(B) in the case of a home-rule school district or open-enrollment charter school, order closure of all programs operated under the district's or school's charter; or

(11) if a district has failed to satisfy any standard under Section 39.054(d) [been rated academically unacceptable] for two consecutive school years, including the [current] school year for which performance is currently determined, due to the district's dropout rates, impose sanctions designed to improve high school completion rates, including:

(A) ordering the development of a dropout prevention plan for approval by the commissioner;

(B) restructuring the district or appropriate school campuses to improve identification of and service to students who are at risk of dropping out of school, as defined by Section 29.081;

(C) ordering lower student-to-counselor ratios on school campuses with high dropout rates; and

(D) ordering the use of any other intervention strategy effective in reducing dropout rates, including mentor programs and flexible class scheduling.

(b) This subsection applies regardless of whether a district has satisfied the accreditation criteria. If for two consecutive school years, including the [current] school year for which the accreditation status is currently determined, a district has had a conservator or management team assigned, the commissioner may appoint a board of managers, a majority of whom must be residents of the district, to exercise the powers and duties of the board of trustees.

SECTION 30. Section 39.132, Education Code, redesignated by this Act as Section 39.102, Education Code, is amended to read as follows:

Sec. 39.102 [39.132]. INTERVENTIONS AND SANCTIONS FOR LOW-PERFORMING [ACADEMICALLY UNACCEPTABLE] CAMPUSES. If a campus performance is below any standard under Section 39.054(d) [39.073(b)], the campus is considered a low-performing [an academically unacceptable] campus. The commissioner may permit the campus to participate in an innovative redesign of the campus to improve campus performance or shall take any of the other following actions, to the extent the commissioner determines necessary:

(1) issue public notice of the deficiency to the board of trustees;

(2) order a hearing conducted by the board of trustees at the campus for the purpose of:

(A) notifying the public of the insufficient [unacceptable] performance, the improvements in performance expected by the agency, and the sanctions that may be imposed under this section if the performance does not improve within a designated period of time; and

(B) soliciting public comment on the initial steps being taken to improve performance;

(3) order the preparation of a report regarding the parental involvement program at the campus and a plan describing strategies for improving parental involvement at the campus;

(4) order the preparation of a report regarding the effectiveness of the district- and campus-level planning and decision-making committees established under Subchapter F, Chapter 11, and a plan describing strategies for improving the effectiveness of those committees;

(5) order the preparation of a student improvement plan that addresses each student achievement [academic excellence] indicator under Section 39.053(c) for which the campus's performance is insufficient [unacceptable], the submission of the plan to the commissioner for approval, and implementation of the plan;

(6) order a hearing to be held before the commissioner or the commissioner's designee at which the president of the board of trustees, the superintendent, and the campus principal shall appear and explain the campus's low performance, lack of improvement, and plans for improvement; or

(7) appoint a campus intervention team under Section 39.104 [39.1322].

SECTION 31. The heading to Section 39.1321, Education Code, redesignated by this Act as Section 39.103, Education Code, is amended to read as follows:

Sec. 39.103 [39.1321]. INTERVENTIONS AND SANCTIONS FOR CHARTER SCHOOLS.

SECTION 32. Sections 39.1321(a), (b), and (d), Education Code, redesignated by this Act as Section 39.103(a), (b), and (d), Education Code, are amended to read as follows:

(a) Interventions and sanctions [Sanctions] authorized under this chapter for a school district or campus apply in the same manner to an open-enrollment charter school.

(b) The commissioner shall adopt rules to implement procedures to impose any intervention or sanction provision under this chapter as those provisions relate to open-enrollment charter schools.

(d) If interventions or sanctions are imposed on an open-enrollment charter school under the procedures provided by this chapter, a charter school is not entitled to an additional hearing relating to the modification, placement on probation, revocation, or denial of renewal of a charter as provided by Subchapter D, Chapter 12.

SECTION 33. Sections 39.1322(a) and (b), Education Code, redesignated by this Act as Sections 39.104(a) and (b), Education Code, are amended to read as follows:

(a) If a campus performance satisfies performance standards under Section 39.054(d) [is rated academically acceptable] for the current school year but would not satisfy performance standards under Section 39.054(d) [be rated as academically unacceptable] if the [performance] standards to be used for the following school year were applied to the current school year, the commissioner shall select and assign a technical assistance team to assist the campus in executing a school improvement plan and any other school improvement strategies the commissioner determines appropriate. The commissioner may waive the requirement to assign a technical assistance team under this subsection if the improvement in performance standards among all student groups, including special populations, over the preceding three years indicates that the campus is likely to satisfy performance standards under Section 39.054(d) [be rated academically acceptable] in the following school year.

(b) If a campus has been identified as a low-performing campus [academically unacceptable] under Section 39.102 [39.132], the commissioner shall appoint a campus intervention team.

SECTION 34. Sections 39.1323(a), (b), (e), and (f), Education Code, redesignated by this Act as Sections 39.105(a), (b), (e), and (f), Education Code, are amended to read as follows:

(a) A campus intervention team shall:

(1) conduct a comprehensive on-site needs assessment [evaluation] of the campus as provided by Subsection (b) [to determine the cause for the campus's low performance and lack of progress];

(2) recommend appropriate actions as provided by Subsection (c)[, including reallocation of resources and technical assistance, changes in school procedures or operations, staff development for instructional and administrative staff, intervention for individual administrators or teachers, waivers from state statute or rule, or other actions the team considers appropriate];

(3) assist in the development of a school improvement plan for student achievement; and

(4) assist the commissioner in monitoring the progress of the campus in implementing the school improvement plan for improvement of student achievement.

(b) A [campus intervention team assigned under Section 39.1322 to a campus shall conduct a] comprehensive on-site needs assessment of the campus under Subsection (a) must [to] determine the causal factors resulting in the campus's low performance and lack of progress. The team shall use the following guidelines and procedures in conducting the comprehensive needs assessment of the campus:

(1) an assessment of the staff to determine the percentage of certified teachers who are teaching in their field, the number of teachers with less than three years of experience, and teacher turnover rates;

(2) compliance with the appropriate class-size rules and number of class-size waivers received;

(3) an assessment of the quality, quantity, and appropriateness of instructional materials, including the availability of technology-based instructional materials;

(4) a report on the parental involvement strategies and the effectiveness of the strategies;

(5) an assessment of the extent and quality of the mentoring program provided for new teachers on the campus;

(6) an assessment of the type and quality of the professional development provided to the staff;

(7) a demographic analysis of the student population, including student demographics, at-risk populations, and special education percentages;

(8) a report of disciplinary incidents and school safety information;

(9) financial and accounting practices;

(10) an assessment of the appropriateness of the curriculum and teaching strategies; and

(11) any other research-based data or information obtained from a data collection process that would assist the campus intervention team in:

(A) recommending an action under Subsection (c); and

(B) executing a school improvement plan under Subsection (d).

(e) A campus intervention team [appointed under Section 39.1322(b)]:

(1) shall continue to work with a campus until:

(A) the campus satisfies all performance standards under Section 39.054(d) [is rated academically acceptable] for a two-year period; or

(B) the campus satisfies all performance standards under Section 39.054(d) [is rated academically acceptable] for a one-year period and the commissioner determines that the campus is operating and will continue to operate in a manner that improves student achievement; and

(2) may continually update the school improvement plan, with approval from the commissioner, to meet the needs of the campus.

(f) Notwithstanding any other provision of this subchapter, if the commissioner determines that a campus for which an intervention is ordered under Section 39.104(b) [39.1322(b)] is not fully implementing the campus intervention team's recommendations or school improvement plan, the commissioner may order the reconstitution of the campus.

SECTION 35. The heading to Section 39.1324, Education Code, redesignated by this Act as Section 39.106, Education Code, is amended to read as follows:

Sec. 39.106 [39.1324]. MANDATORY INTERVENTIONS AND SANCTIONS.

SECTION 36. Sections 39.1324(a), (d), (e), and (f), Education Code, redesignated by this Act as Sections 39.106(a), (d), (e), and (f), Education Code, are amended to read as follows:

(a) If a campus has been identified as a low-performing campus under Section 39.102 [academically unacceptable] for two consecutive school years, including the [current] school year for which the performance is currently determined, the commissioner shall order the reconstitution of the campus and assign a campus intervention team. In reconstituting the campus, a campus intervention team shall assist the campus in:

(1) developing a school improvement plan;

(2) obtaining approval of the plan from the commissioner; and

(3) executing the plan on approval by the commissioner.

(d) Notwithstanding any other provision of this subchapter, if the commissioner determines that a campus subject to Subsection (a) is not fully implementing the school improvement plan, the commissioner may pursue alternative management of the campus under Section 39.107 [39.1327] or may order closure of the campus.

(e) If a campus is identified as a low-performing campus under Section 39.102 [considered an academically unacceptable campus] for the subsequent school year after the campus is reconstituted under this section, the commissioner shall review the progress of the campus and may order closure of the campus or pursue alternative management under Section 39.107 [39.1327].

(f) If a campus is identified as a low-performing campus under Section 39.102 [considered academically unacceptable] for two consecutive school years after the campus is reconstituted under Subsection (a), the commissioner shall order closure of the campus or pursue alternative management under Section 39.107 [39.1327].

SECTION 37. The heading to Section 39.1327, Education Code, redesignated by this Act as Section 39.107, Education Code, is amended to read as follows:

Sec. 39.107 [39.1327]. MANAGEMENT OF CERTAIN LOW-PERFORMING [ACADEMICALLY UNACCEPTABLE] CAMPUSES.

SECTION 38. Sections 39.1327(a), (b), (c), (d), (e), and (f), Education Code, redesignated by this Act as Sections 39.107(a), (b), (c), (d), (e), and (f), Education Code, are amended to read as follows:

(a) A campus may be subject to this section if the campus has been identified as a low-performing campus under Section 39.102 [academically unacceptable under Section 39.132] and the commissioner orders alternative management under Section 39.106(d) [39.1324(d)], (e), or (f).

(b) The commissioner shall solicit proposals from qualified nonprofit or for profit entities to assume management of a campus subject to this section or may appoint to assume management of a campus subject to this section a school district other than the district in which the campus is located that is located in the boundaries of the same regional education service center as the campus is located. A district appointed under this section shall assume management of a campus subject to this section in the same manner provided by this section for a qualified [nonprofit] entity or in accordance with commissioner rule.

(c) If the commissioner determines that the basis for identifying a campus as a low-performing campus [academically unacceptable] is limited to a specific condition that may be remedied with targeted technical assistance, the commissioner may:

(1) provide the campus a one-year waiver under this section; and

(2) require the district to contract for the appropriate technical assistance.

(d) The commissioner may annually solicit proposals under this section for the management of a campus subject to this section. The commissioner shall notify a qualified [nonprofit] entity that has been approved as a provider under this section. The district must execute a contract with an approved provider and relinquish control of the campus before January 1 of the school year.

(e) To qualify for consideration as a managing entity under this section, the entity must submit a proposal that provides information relating to the entity's management and leadership team that will participate in management of the campus under consideration, including information relating to individuals that have:

(1) documented success in whole school interventions that increased the educational and performance levels of students in low-performing [academically unacceptable] campuses;

(2) a proven record of effectiveness with programs assisting low-performing students;

(3) a proven ability to apply research-based school intervention strategies;

(4) a proven record of financial ability to perform under the management contract; and

(5) any other experience or qualifications the commissioner determines necessary.

(f) In selecting a managing entity under this section, the commissioner shall give preference to a qualified [nonprofit] entity that:

(1) meets any qualifications under this section; and

(2) has documented success in educating students from similar demographic groups and with similar educational needs as the students who attend the campus that is to be operated by a managing entity under this section.

SECTION 39. Section 39.133, Education Code, redesignated by this Act as Section 39.108, Education Code, is amended to read as follows:

Sec. 39.108 [39.133]. ANNUAL REVIEW. The commissioner shall review annually the performance of a district or campus subject to this subchapter to determine the appropriate actions to be implemented under this subchapter. The commissioner must review at least annually the performance of a district for which the accreditation status [rating] has been lowered due to insufficient [unacceptable] student performance and may not raise the accreditation status [rating] until the district has demonstrated improved student performance. If the review reveals a lack of improvement, the commissioner shall increase the level of state intervention and sanction unless the commissioner finds good cause for maintaining the current status.

SECTION 40. Section 39.1331, Education Code, redesignated by this Act as Section 39.109, Education Code, is amended to read as follows:

Sec. 39.109 [39.1331]. ACQUISITION OF PROFESSIONAL SERVICES. In addition to other interventions and sanctions authorized under Sections 39.101 [39.131] and 39.102 [39.132], the commissioner may order a school district or campus to acquire professional services at the expense of the district or campus to address the applicable financial, assessment, data quality, program, or governance deficiency. The commissioner's order may require the district or campus to:

(1) select an external auditor, data quality expert, professional authorized to monitor district assessment instrument administration, or curriculum or program expert; or

(2) provide for the appropriate training of district staff or board of trustees members in the case of a district, or campus staff, in the case of a campus.

SECTION 41. Section 39.134, Education Code, redesignated by this Act as Section 39.110, Education Code, is amended to read as follows:

Sec. 39.110 [39.134]. COSTS PAID BY DISTRICT. The costs of providing a monitor, conservator, management team, campus intervention team, technical assistance team, managing entity under Section 39.107 [39.1327], or service provider under Section 39.109 [39.1331] shall be paid by the district. If the district fails or refuses to pay the costs in a timely manner, the commissioner may:

(1) pay the costs using amounts withheld from any funds to which the district is otherwise entitled; or

(2) recover the amount of the costs in the manner provided for recovery of an overallocation of state funds under Section 42.258.

SECTION 42. Section 39.135(c), Education Code, redesignated by this Act as Section 39.111(c), Education Code, is amended to read as follows:

(c) A conservator or management team, if directed by the commissioner, shall prepare a plan for the implementation of action under Section 39.101(a)(9) or (10) [39.131(a)(9) or (10)]. The conservator or management team:

(1) may direct an action to be taken by the principal of a campus, the superintendent of the district, or the board of trustees of the district;

(2) may approve or disapprove any action of the principal of a campus, the superintendent of the district, or the board of trustees of the district;

(3) may not take any action concerning a district election, including ordering or canceling an election or altering the date of or the polling places for an election;

(4) may not change the number of or method of selecting the board of trustees;

(5) may not set a tax rate for the district; and

(6) may not adopt a budget for the district that provides for spending a different amount, exclusive of required debt service, from that previously adopted by the board of trustees.

SECTION 43. Subchapter K, Chapter 39, Education Code, is redesignated as Subchapter F, Chapter 39, Education Code, and the sections in the redesignated subchapter, Sections 39.301 and 39.302, are redesignated as Sections 39.151 and 39.152, Education Code.

SECTION 44. The heading to Subchapter K, Chapter 39, Education Code, redesignated by this Act as Subchapter F, Chapter 39, Education Code, is amended to read as follows:

SUBCHAPTER F [K]. PROCEDURES FOR CHALLENGE OF ACCREDITATION

STATUS, ACCOUNTABILITY DETERMINATION, INTERVENTION, [RATING] OR

SANCTION

SECTION 45. The heading to Section 39.301, Chapter 39, Education Code, redesignated by this Act as Section 39.151, Education Code, is amended to read as follows:

Sec. 39.151 [39.301]. REVIEW BY COMMISSIONER: ACCREDITATION STATUS OR ACCOUNTABILITY DETERMINATION [RATINGS].

SECTION 46. Sections 39.301(a), (b), and (e), Chapter 39, Education Code, redesignated by this Act as Sections 39.151(a), (b), and (e), Education Code, are amended to read as follows:

(a) The commissioner by rule shall provide a process for a school district or open-enrollment charter school to challenge an agency decision made under this chapter relating to an accreditation status determination or other determination made under this chapter regarding the academic or financial performance of [accountability rating that affects] the district or school.

(b) The rules under Subsection (a) must provide for the commissioner to appoint a committee to make recommendations to the commissioner on a challenge made to an agency decision relating to an accreditation status determination, academic performance determination, or financial accountability rating. The commissioner may not appoint an agency employee as a member of the committee.

(e) A school district or open-enrollment charter school may not challenge an agency decision relating to an accreditation status determination or other determination made under this chapter regarding the academic or financial performance of the district or school [accountability rating under this chapter] in another proceeding if the district or school has had an opportunity to challenge the decision under this section.

SECTION 47. Chapter 39, Education Code, is amended by adding Subchapter G to read as follows:

SUBCHAPTER G. DISTINCTION DESIGNATIONS

Sec. 39.201. CAMPUS DISTINCTION DESIGNATIONS. (a) The commissioner shall award a campus a distinction designation if the campus is ranked in the top 25 percent of campuses in the state in annual improvement in student achievement as determined under Section 39.034.

(b) In addition to the distinction designation described by Subsection (a), the commissioner shall award a campus a distinction designation if the campus demonstrates an ability to significantly diminish or eliminate performance differentials between student subpopulations. The commissioner shall adopt rules related to the distinction designation under this subsection to ensure that a campus does not artificially diminish or eliminate performance differentials through inhibiting the achievement of the highest achieving student subpopulation.

(c) In addition to the distinction designations described by Subsections (a) and (b), a campus that satisfies the criteria developed under Section 39.202 shall be awarded a distinction designation by the commissioner for the following programs or the following specific categories of performance:

(1) academic achievement;

(2) fine arts;

(3) physical education;

(4) 21st Century Workforce Development program; and

(5) second language acquisition program.

(d) A campus may not be awarded a distinction designation under this subchapter unless the campus is assigned an accreditation status of accredited under Section 39.052.

Sec. 39.202. CAMPUS DISTINCTION DESIGNATION CRITERIA; COMMITTEES. (a) The commissioner by rule shall establish:

(1) standards for considering campuses for distinction designations under Section 39.201(c); and

(2) methods for awarding distinction designations to campuses.

(b) In adopting rules under this section, the commissioner shall establish a separate committee to develop criteria for each distinction designation under Section 39.201(c).

(c) Each committee established under this section must include:

(1) individuals who practice as professionals in the content area relevant to the distinction designation, as applicable;

(2) individuals with subject matter expertise in the content area relevant to the distinction designation;

(3) educators with subject matter expertise in the content area relevant to the distinction designation; and

(4) community leaders, including leaders from the business community.

(d) For each committee, the governor, lieutenant governor, and speaker of the house of representatives may each appoint a person described by each subdivision of Subsection (c).

(e) In developing criteria for distinction designations under this section, each committee shall:

(1) identify a variety of indicators for measuring excellence; and

(2) consider categories for distinction designations, with criteria relevant to each category, based on:

(A) the level of a program, whether elementary school, middle or junior high school, or high school; and

(B) the student enrollment of a campus.

SECTION 48. Subchapter F, Chapter 39, Education Code, is redesignated as Subchapter H, Chapter 39, Education Code, and the sections in the redesignated subchapter, Sections 39.111, 39.112, 39.113, 39.114, 39.115, and 39.116, are redesignated as Sections 39.231, 39.232, 39.233, 39.234, 39.235, and 39.236, Education Code, respectively.

SECTION 49. Section 39.111, Education Code, redesignated by this Act as Section 39.231, Education Code, is amended to read as follows:

Sec. 39.231 [39.111]. RECOGNITION AND REWARDS. The State Board of Education shall develop a plan for recognizing and rewarding school [districts and] campuses that receive a distinction designation under Subchapter G and develop [are rated as exemplary or recognized and for developing] a network for sharing proven successful practices statewide and regionally. The reward may be used to provide educators with summer stipends to develop curricula based on the cited successful strategies. The educators may copyright the curricula they develop.

SECTION 50. Section 39.112, Education Code, redesignated by this Act as Section 39.232, Education Code, is amended to read as follows:

Sec. 39.232 [39.112]. DISTINCTION [EXCELLENCE] EXEMPTIONS. (a) Except as provided by Subsection (b), a school campus [or district] that holds a distinction designation under Section 39.201(a) or (c)(1) [is rated exemplary] is exempt from requirements and prohibitions imposed under this code including rules adopted under this code.

(b) A school campus [or district] is not exempt under this section from:

(1) a prohibition on conduct that constitutes a criminal offense;

(2) requirements imposed by federal law or rule, including requirements for special education or bilingual education programs; or

(3) a requirement, restriction, or prohibition relating to:

(A) curriculum essential knowledge and skills under Section 28.002 or high school [minimum] graduation requirements under Section 28.025;

(B) public school accountability as provided by Subchapters B, C, E [D], and J [G];

(C) extracurricular activities under Section 33.081;

(D) health and safety under Chapter 38;

(E) purchasing [competitive bidding] under Subchapter B, Chapter 44;

(F) elementary school class size limits, except as provided by Subsection (d) or Section 25.112;

(G) removal of a disruptive student from the classroom under Subchapter A, Chapter 37;

(H) at risk programs under Subchapter C, Chapter 29;

(I) prekindergarten programs under Subchapter E, Chapter 29;

(J) rights and benefits of school employees;

(K) special education programs under Subchapter A, Chapter 29; or

(L) bilingual education programs under Subchapter B, Chapter 29.

(c) The agency shall monitor and evaluate deregulation of a school campus [or district] under this section and Section 7.056.

(d) The commissioner may exempt a [an exemplary] school campus that receives a distinction designation under Section 39.201(a) or (c)(1) from elementary class size limits under this section if the school campus submits to the commissioner a written plan showing steps that will be taken to ensure that the exemption from the class size limits will not be harmful to the academic achievement of the students on the school campus. The commissioner shall review achievement levels annually. The exemption remains in effect until the commissioner determines that achievement levels of the campus have declined.

SECTION 51. Section 39.113(a), Education Code, redesignated by this Act as Section 39.233(a), Education Code, is amended to read as follows:

(a) The agency shall:

(1) develop standards for evaluating the success and cost-effectiveness of high school completion and success and college readiness programs implemented under Section 39.234 [39.114];

(2) provide guidance for school districts and campuses in establishing and improving high school completion and success and college readiness programs implemented under Section 39.234 [39.114]; and

(3) develop standards for selecting and methods for recognizing school districts and campuses that offer exceptional high school completion and success and college readiness programs under Section 39.234 [39.114].

SECTION 52. Section 39.114(b), Education Code, redesignated by this Act as Section 39.234(b), Education Code, is amended to read as follows:

(b) A school district may use funds allocated under Section 42.2516(b)(3) on any instructional program in grades six through 12 other than an athletic program if:

(1) the district's measure of progress toward college readiness is determined exceptional by a standard set [district is recognized as exceptional] by the commissioner [under the academic accountability indicator adopted under Section 39.051(b)(13)]; and

(2) the district's completion rates for grades nine through 12 [meet or] exceed completion rate standards required by the commissioner to achieve a status of accredited under Section 39.051 [rating of exemplary under Section 39.072].

SECTION 53. Section 39.115(a), Education Code, redesignated by this Act as Section 39.235(a), Education Code, is amended to read as follows:

(a) From funds appropriated for that purpose, the commissioner may establish a grant program under which grants are awarded to secondary campuses and school districts to support:

(1) the implementation of innovative high school improvement programs that are based on the best available research regarding high school reform, dropout prevention, and preparing students for postsecondary coursework or employment;

(2) enhancing education practices that have been demonstrated by significant evidence of effectiveness; and

(3) the alignment of grants and programs to the strategic plan adopted under Section 39.407 [39.357].

SECTION 54. Section 39.116, Education Code, redesignated by this Act as Section 39.236, Education Code, is amended to read as follows:

Sec. 39.236 [39.116]. INITIATIVE FOR RETAINING QUALITY EDUCATORS. Notwithstanding Section 39.106(b) [39.1324(b)], a school district, to assist in preventing dropouts and disruptions that may result from certain mandatory sanctions, may retain at a campus a principal who has been employed at the campus as a principal during the two-year period described by Section 39.106(a) [39.1324(a)] if the students enrolled at the campus have demonstrated a pattern of significant academic improvement.

SECTION 55. Subchapter E, Chapter 39, Education Code, is redesignated as Subchapter I, Chapter 39, Education Code, and the sections in the redesignated subchapter, Sections 39.091, 39.092, 39.093, 39.094, 39.095, and 39.096, are redesignated as Sections 39.261, 39.262, 39.263, 39.264, 39.265, and 39.266, Education Code, respectively.

SECTION 56. Section 39.093, Education Code, redesignated by this Act as Section 39.263, Education Code, is amended by amending Subsection (a) and adding Subsection (a-1) to read as follows:

(a) The criteria that the commissioner shall use to select successful schools and districts must be related to the goals in Section 4.002 and must include:

(1) for districts and campuses, consideration of performance on the student achievement [academic excellence] indicators adopted under Section 39.053(c); and

(2) for campuses, consideration of the distinction designation criteria prescribed by or developed under Subchapter G [39.051].

(a-1) For purposes of selecting schools and districts under Section 39.262(a) [39.092(a)], each school's performance shall be compared to state standards and to its previous performance.

SECTION 57. Chapter 39, Education Code, is amended by adding Subchapter J to read as follows:

SUBCHAPTER J. PARENT AND EDUCATOR REPORTS

Sec. 39.301. ADDITIONAL PERFORMANCE INDICATORS: REPORTING. (a) In addition to the indicators adopted under Section 39.053, the commissioner shall adopt indicators of the quality of learning on a campus for the purpose of preparing reports under this chapter. The commissioner biennially shall review the indicators for the consideration of appropriate revisions.

(b) Performance on the indicators adopted under this section shall be evaluated in the same manner provided for evaluation of the student achievement indicators under Section 39.053(b).

(c) Indicators for reporting purposes must include:

(1) the percentage of graduating students who meet the course requirements established for the Texas Diploma high school program by State Board of Education rule;

(2) the results of the Scholastic Assessment Test (SAT), the American College Test (ACT), articulated postsecondary degree programs described by Section 61.852, and certified workforce training programs described by Chapter 311, Labor Code;

(3) for students who have failed to perform satisfactorily, as determined under the college readiness performance standard under Section 39.0241, on an assessment instrument required under Section 39.023(a) or (c), the numerical progress of those students grouped by percentage on subsequent assessment instruments required under those sections, aggregated by grade level and subject area;

(4) the percentage of students, aggregated by grade level, provided accelerated instruction under Section 28.0211(c), the results of assessment instruments administered under that section, the percentage of students promoted through the grade placement committee process under Section 28.0211, the subject of the assessment instrument on which each student failed to perform satisfactorily, and the performance of those students in the school year following that promotion on the assessment instruments required under Section 39.023;

(5) the percentage of students exempted, by exemption category, from the assessment program generally applicable under this chapter;

(6) the percentage of students of limited English proficiency exempted from the administration of an assessment instrument under Sections 39.027(a)(3) and (4);

(7) the percentage of students in a special education program under Subchapter A, Chapter 29, assessed through assessment instruments developed or adopted under Section 39.023(b);

(8) the measure of progress toward college readiness; and

(9) the measure of progress toward dual language proficiency under Section 39.034(b), for students of limited English proficiency, as defined by Section 29.052.

(d) Performance on the indicators described by Subsections (c)(3), (4), and (9) must be based on longitudinal student data that is disaggregated by the bilingual education or special language program, if any, in which students of limited English proficiency, as defined by Section 29.052, are or former students of limited English proficiency were enrolled. If a student described by this subsection is not or was not enrolled in specialized language instruction, the number and percentage of those students shall be provided.

(e) Section 39.055 applies in determining the performance of a school district or campus on an indicator described by Subsection (c).

Sec. 39.302. REPORT TO DISTRICT: COMPARISONS FOR ANNUAL PERFORMANCE ASSESSMENT. (a) The agency shall report to each school district the comparisons of student performance made under Section 39.034.

(b) To the extent practicable, the agency shall combine the report of comparisons with the report of the student's performance on assessment instruments under Section 39.023.

Sec. 39.303. REPORT TO PARENTS. (a) The school district a student attends shall provide a record of the comparisons made under Section 39.034 and provided to the district under Section 39.302 in a written notice to the student's parent or other person standing in parental relationship.

(b) For a student who failed to perform satisfactorily as determined under the college readiness performance standard under Section 39.0241 on an assessment instrument administered under Section 39.023(a), (c), or (l), the school district shall include in the notice specific information relating to access to online educational resources at the appropriate assessment instrument content level, including educational resources described by Section 32.252(b)(2) and assessment instruments questions and answers released under Section 39.023(e).

Sec. 39.304. TEACHER REPORT CARD. Each school district shall prepare a report of the comparisons made under Section 39.034 and provided to the district under 39.302 and provide the report to each teacher for all students who:

(1) were assessed on an assessment instrument under Section 39.023; and

(2) were provided instruction by that teacher in the subject for which the assessment instrument was administered under Section 39.023.

Sec. 39.305. CAMPUS REPORT CARD. (a) The agency shall, not later than August 1 of each year, report the performance of each campus in a school district on the basis of the campus's performance on the indicators described by Section 39.053(c).

(b) Each school year, the agency shall prepare and distribute to each school district a report card for each campus. The campus report cards must be based on the most current data available disaggregated by student groups. Campus performance must be compared to previous campus and district performance, current district performance, state-established standards, and comparable campus group performance.

(c) The report card shall include the following information:

(1) where applicable, the student achievement indicators described by Section 39.053(c) and the reporting indicators described by Sections 39.301(c)(1) through (4);

(2) average class size by grade level and subject;

(3) the administrative and instructional costs per student, computed in a manner consistent with Section 44.0071; and

(4) the district's instructional expenditures ratio and instructional employees ratio computed under Section 44.0071, and the statewide average of those ratios, as determined by the commissioner.

(d) The commissioner shall adopt rules requiring dissemination of the information required under Subsection (c)(4) and appropriate class size and student performance portions of campus report cards annually to the parent of or other person standing in parental relationship to each student at the campus. On written request, the school district shall provide a copy of a campus report card to any other party.

Sec. 39.306. PERFORMANCE REPORT. (a) Each board of trustees shall publish an annual report describing the educational performance of the school district and of each campus in the district that includes uniform student performance and descriptive information as determined under rules adopted by the commissioner. The annual report must also include:

(1) campus performance objectives established under Section 11.253 and the progress of each campus toward those objectives, which shall be available to the public;

(2) information indicating the district's accreditation status and identifying each district campus awarded a distinction designation under Subchapter G or considered a low-performing campus under Section 39.102;

(3) the district's current special education compliance status with the agency;

(4) a statement of the number, rate, and type of violent or criminal incidents that occurred on each district campus, to the extent permitted under the Family Educational Rights and Privacy Act of 1974 (20 U.S.C. Section 1232g);

(5) information concerning school violence prevention and violence intervention policies and procedures that the district is using to protect students;

(6) the findings that result from evaluations conducted under the Safe and Drug-Free Schools and Communities Act of 1994 (20 U.S.C. Section 7101 et seq.); and

(7) information received under Section 51.403(e) for each high school campus in the district, presented in a form determined by the commissioner.

(b) Supplemental information to be included in the report shall be determined by the board of trustees. Performance information in the annual report on the indicators described by Sections 39.053 and 39.301 and descriptive information required by this section shall be provided by the agency.

(c) The board of trustees shall hold a hearing for public discussion of the report. The board of trustees shall give notice of the hearing to property owners in the school district and parents of and other persons standing in parental relation to a district student. The notification must include notice to a newspaper of general circulation in the district and notice to electronic media serving the district. After the hearing the report shall be widely disseminated within the district in a manner to be determined under rules adopted by the commissioner.

(d) The report must also include a comparison provided by the agency of:

(1) the performance of each campus to its previous performance and to state-established standards;

(2) the performance of each school district to its previous performance and to state-established standards; and

(3) the performance of each campus or district to comparable campus group or district performance.

(e) The report may include the following information:

(1) student information, including total enrollment, enrollment by ethnicity, socioeconomic status, and grade groupings and retention rates;

(2) financial information, including revenues and expenditures;

(3) staff information, including number and type of staff by sex, ethnicity, years of experience, and highest degree held, teacher and administrator salaries, and teacher turnover;

(4) program information, including student enrollment by program, teachers by program, and instructional operating expenditures by program; and

(5) the number of students placed in a disciplinary alternative education program under Chapter 37.

(f) The State Board of Education by rule shall authorize the combination of this report with other reports and financial statements and shall restrict the number and length of reports that school districts, district employees, and school campuses are required to prepare.

(g) The report must include a statement of the amount, if any, of the school district's unencumbered surplus fund balance as of the last day of the preceding fiscal year and the percentage of the preceding year's budget that the surplus represents.

Sec. 39.307. USES OF PERFORMANCE REPORT. The information required to be reported under Section 39.306 shall be:

(1) the subject of public hearings or meetings required under Sections 11.252, 11.253, and 39.306;

(2) a primary consideration in school district and campus planning; and

(3) a primary consideration of:

(A) the State Board of Education in the evaluation of the performance of the commissioner;

(B) the commissioner in the evaluation of the performance of the directors of the regional education service centers;

(C) the board of trustees of a school district in the evaluation of the performance of the superintendent of the district; and

(D) the superintendent in the evaluation of the performance of the district's campus principals.

Sec. 39.308. ANNUAL AUDIT OF DROPOUT RECORDS; REPORT. (a) The commissioner shall develop a process for auditing school district dropout records electronically. The commissioner shall also develop a system and standards for review of the audit or use systems already available at the agency. The system must be designed to identify districts that are at high risk of having inaccurate dropout records and that, as a result, require on-site monitoring of dropout records.

(b) If the electronic audit of a district's dropout records indicates that a district is not at high risk of having inaccurate dropout records, the district may not be subject to on-site monitoring under this section.

(c) If the risk-based system indicates that a district is at high risk of having inaccurate dropout records, the district is entitled to an opportunity to respond to the commissioner's determination before on-site monitoring may be conducted. The district must respond not later than the 30th day after the date the commissioner notifies the district of the commissioner's determination. If the district's response does not change the commissioner's determination that the district is at high risk of having inaccurate dropout records or if the district does not respond in a timely manner, the commissioner shall order agency staff to conduct on-site monitoring of the district's dropout records.

(d) The commissioner shall notify the board of trustees of a school district of any objection the commissioner has to the district's dropout data, any violation of sound accounting practices or of a law or rule revealed by the data, or any recommendation by the commissioner concerning the data. If the data reflect that a penal law has been violated, the commissioner shall notify the county attorney, district attorney, or criminal district attorney, as appropriate, and the attorney general.

(e) The commissioner is entitled to access to all district records the commissioner considers necessary or appropriate for the review, analysis, or approval of district dropout data.

SECTION 58. Subchapter H, Chapter 39, Education Code, is redesignated as Subchapter K, Chapter 39, Education Code, and the sections in the redesignated subchapter, Sections 39.181, 39.182, 39.183, 39.184, and 39.185, are redesignated as Sections 39.331, 39.332, 39.333, 39.334, and 39.335, Education Code, respectively.

SECTION 59. Section 39.182, Education Code, redesignated by this Act as Section 39.332, Education Code, is amended to read as follows:

Sec. 39.332 [39.182]. COMPREHENSIVE ANNUAL REPORT. (a) Not later than December 1 of each year, the agency shall prepare and deliver to the governor, the lieutenant governor, the speaker of the house of representatives, each member of the legislature, the Legislative Budget Board, and the clerks of the standing committees of the senate and house of representatives with primary jurisdiction over the public school system a comprehensive report covering the preceding school year and containing the information described by Subsection (b).

(b) [:] (1) The report must contain an evaluation of the achievements of the state educational program in relation to the statutory goals for the public education system under Section 4.002.[;]

(2) The report must contain an evaluation of the status of education in the state as reflected by:

(A) the student achievement [academic excellence] indicators described by [adopted under] Section 39.053 [39.051]; and

(B) the reporting indicators described by Section 39.301.

(3) The report must contain a summary compilation of overall student performance on academic skills assessment instruments required by Section 39.023 with the number and percentage of students exempted from the administration of those instruments and the basis of the exemptions, aggregated by grade level, subject area, campus, and district, with appropriate interpretations and analysis, and disaggregated by race, ethnicity, gender, and socioeconomic status.[;]

(4) The report must contain a summary compilation of overall performance of students placed in a disciplinary alternative education program established under Section 37.008 on academic skills assessment instruments required by Section 39.023 with the number of those students exempted from the administration of those instruments and the basis of the exemptions, aggregated by district, grade level, and subject area, with appropriate interpretations and analysis, and disaggregated by race, ethnicity, gender, and socioeconomic status.[;]

(5) The report must contain a summary compilation of overall performance of students at risk of dropping out of school, as defined by Section 29.081(d), on academic skills assessment instruments required by Section 39.023 with the number of those students exempted from the administration of those instruments and the basis of the exemptions, aggregated by district, grade level, and subject area, with appropriate interpretations and analysis, and disaggregated by race, ethnicity, gender, and socioeconomic status.[;]

(6) The report must contain an evaluation of the correlation between student grades and student performance on academic skills assessment instruments required by Section 39.023.[;]

(7) The report must contain a statement of the dropout rate of students in grade levels 7 through 12, expressed in the aggregate and by grade level, and a statement of the completion rates of students for grade levels 9 through 12.[;]

(8) The report must contain a statement of:

(A) the completion rate of students who enter grade level 9 and graduate not more than four years later;

(B) the completion rate of students who enter grade level 9 and graduate, including students who require more than four years to graduate;

(C) the completion rate of students who enter grade level 9 and not more than four years later receive a high school equivalency certificate;

(D) the completion rate of students who enter grade level 9 and receive a high school equivalency certificate, including students who require more than four years to receive a certificate; and

(E) the number and percentage of all students who have not been accounted for under Paragraph (A), (B), (C), or (D).[;]

(9) The report must contain a statement of the projected cross-sectional and longitudinal dropout rates for grade levels 9 through 12 for the next five years, assuming no state action is taken to reduce the dropout rate.[;]

(10) The report must contain a description of a systematic, measurable plan for reducing the projected cross-sectional and longitudinal dropout rates to five percent or less for the 1997-1998 school year.[;]

(11) The report must contain a summary of the information required by Section 29.083 regarding grade level retention of students and information concerning:

(A) the number and percentage of students retained; and

(B) the performance of retained students on assessment instruments required under Section 39.023(a).[;]

(12) The report must contain information, aggregated by district type and disaggregated by race, ethnicity, gender, and socioeconomic status, on:

(A) the number of students placed in a disciplinary alternative education program established under Section 37.008;

(B) the average length of a student's placement in a disciplinary alternative education program established under Section 37.008;

(C) the academic performance of students on assessment instruments required under Section 39.023(a) during the year preceding and during the year following placement in a disciplinary alternative education program; and

(D) the dropout rates of students who have been placed in a disciplinary alternative education program established under Section 37.008.[;]

(13) The report must contain a list of each school district or campus that does not satisfy performance standards, with an explanation of the actions taken by the commissioner to improve student performance in the district or campus and an evaluation of the results of those actions.[;]

(14) The report must contain an evaluation of the status of the curriculum taught in public schools, with recommendations for legislative changes necessary to improve or modify the curriculum required by Section 28.002.[;]

(15) The report must contain a description of all funds received by and each activity and expenditure of the agency.[;]

(16) The report must contain a summary and analysis of the instructional expenditures ratios and instructional employees ratios of school districts computed under Section 44.0071.[;]

(17) The report must contain a summary of the effect of deregulation, including exemptions and waivers granted under Section 7.056 or 39.232. [39.112;]

(18) The report must contain a statement of the total number and length of reports that school districts and school district employees must submit to the agency, identifying which reports are required by federal statute or rule, state statute, or agency rule, and a summary of the agency's efforts to reduce overall reporting requirements.[;]

(19) The report must contain a list of each school district that is not in compliance with state special education requirements, including:

(A) the period for which the district has not been in compliance;

(B) the manner in which the agency considered the district's failure to comply in determining the district's accreditation status; and

(C) an explanation of the actions taken by the commissioner to ensure compliance and an evaluation of the results of those actions.[;]

(20) The report must contain a comparison of the performance of open-enrollment charter schools and school districts on the student achievement [academic excellence] indicators described by Section 39.053(c), the reporting indicators described by Section 39.301(c), [specified in Section 39.051(b)] and the accountability measures adopted under Section 39.053(i) [39.051(g)], with a separately aggregated comparison of the performance of open-enrollment charter schools predominantly serving students at risk of dropping out of school, as described [defined] by Section 29.081(d), with the performance of school districts.[;]

(21) The report must contain a summary of the information required by Section 38.0141 regarding student health and physical activity from each school district.[;]

(22) The report must contain a summary compilation of overall student performance under the assessment system developed to evaluate the longitudinal academic progress as required by Section 39.027(e), disaggregated by bilingual education or special language program instructional model, if any.[; and]

(23) The report must contain any additional information considered important by the commissioner or the State Board of Education.

(c) [(b)] In reporting the information required by Subsection (b)(3) or (4) [(a)(3) or (4)], the agency may separately aggregate the performance data of students enrolled in a special education program under Subchapter A, Chapter 29.

(d) [(b-1)] In reporting the information required by Subsections (b)(3), (5), and (7) [(a)(3), (5), and (7)], the agency shall separately aggregate the longitudinal performance data of all students identified as students of limited English proficiency, as defined by Section 29.052, or former students of limited English proficiency, disaggregated by bilingual education or special language program instructional model, if any, in which the students are or were enrolled.

(e) [(c)] Each report must contain the most recent data available.

SECTION 60. Section 39.183, Education Code, redesignated by this Act as Section 39.333, Education Code, is amended to read as follows:

Sec. 39.333 [39.183]. REGIONAL AND DISTRICT LEVEL REPORT. The agency shall prepare and deliver to the governor, the lieutenant governor, the speaker of the house of representatives, each member of the legislature, the Legislative Budget Board, and the clerks of the standing committees of the senate and house of representatives with primary jurisdiction over the public school system a regional and district level report covering the preceding two school years and containing:

(1) a summary of school district compliance with the student/teacher ratios and class-size limitations prescribed by Sections 25.111 and 25.112, including:

(A) the number of campuses and classes at each campus granted an exception from Section 25.112; and

(B) for [the performance rating under Subchapter D of] each campus granted an exception from Section 25.112, a statement of whether the campus has been awarded a distinction designation under Subchapter G or has been identified as a low-performing campus under Section 39.102;

(2) a summary of the exemptions and waivers granted to campuses and school districts under Section 7.056 or 39.232 [39.112] and a review of the effectiveness of each campus or district following deregulation;

(3) an evaluation of the performance of the system of regional education service centers based on the indicators adopted under Section 8.101 and client satisfaction with services provided under Subchapter B, Chapter 8;

(4) an evaluation of accelerated instruction programs offered under Section 28.006, including an assessment of the quality of such programs and the performance of students enrolled in such programs; and

(5) the number of classes at each campus that are currently being taught by individuals who are not certified in the content areas of their respective classes.

SECTION 61. Section 39.185, Education Code, redesignated by this Act as Section 39.335, Education Code, is amended to read as follows:

Sec. 39.335 [39.185]. INTERIM REPORT. Not later than December 1 of each odd-numbered year, the agency shall prepare and deliver to the governor, the lieutenant governor, the speaker of the house of representatives, each member of the legislature, the Legislative Budget Board, and the clerks of the standing committees of the senate and house of representatives with primary jurisdiction over the public school system an interim report containing, for the previous school year, the information required by Section 39.333(2) [39.183(2)].

SECTION 62. Subchapter J, Chapter 39, Education Code, is redesignated as Subchapter L, Chapter 39, Education Code, and amended to read as follows:

SUBCHAPTER L [J]. NOTICE OF PERFORMANCE

Sec. 39.361 [39.251]. NOTICE IN STUDENT GRADE REPORT. The first written notice of a student's performance that a school district gives during a school year as required by Section 28.022(a)(2) must include [the following information]:

(1) a statement of whether the campus at which the student is enrolled has been awarded a distinction designation under Subchapter G or has been identified as a low-performing campus under Section 39.102 [the most recent performance rating of the campus at which the student is enrolled, as determined under Section 39.072]; and

(2) an explanation of the significance of the information provided under Subdivision (1) [a definition and explanation of each performance rating described by Section 39.072(a)].

Sec. 39.362 [39.252]. NOTICE ON DISTRICT WEBSITE. Not later than the 10th day after the first day of instruction of each school year, a school district that maintains an Internet website shall make the following information available to the public on the website:

(1) the information contained in the most recent campus report card for each campus in the district[, as determined] under Section 39.305 [39.052];

(2) the information contained in the most recent performance report for the district[, as determined] under Section 39.306 [39.053];

(3) the most recent accreditation status [performance rating] of the district[, as determined] under Section 39.052 [39.072]; and

(4) a definition and explanation of each accreditation status under [performance rating described by] Section 39.051, based on commissioner rule adopted under that section [39.072(a)].

SECTION 63. Subchapter L, Chapter 39, Education Code, is redesignated as Subchapter M, Chapter 39, Education Code, and the sections in the redesignated subchapter, Sections 39.351, 39.352, 39.353, 39.354, 39.355, 39.356, 39.357, 39.358, 39.359, 39.360, 39.361, 39.362, 39.363, 39.364, 39.365, and 39.366, are redesignated as Sections 39.401, 39.402, 39.403, 39.404, 39.405, 39.406, 39.407, 39.408, 39.409, 39.410, 39.411, 39.412, 39.413, 39.414, 39.415, and 39.416, Education Code, respectively.

SECTION 64. Section 39.353, Education Code, redesignated by this Act as Section 39.403, Education Code, is amended to read as follows:

Sec. 39.403 [39.353]. TERMS. Members of the council appointed under Section 39.402(b)(3) [39.352(b)(3)] serve terms of two years and may be reappointed for additional terms.

SECTION 65. Section 39.365(b), Education Code, redesignated by this Act as Section 39.415(b), Education Code, is amended to read as follows:

(b) Not later than March 1 and September 1 of each year, the commissioner of education shall prepare and deliver a progress report to the presiding officers of the standing committees of each house of the legislature with primary jurisdiction over public education, the Legislative Budget Board, and the Governor's Office of Policy and Planning on:

(1) the implementation of Sections 7.031, 21.4511, 21.4541, 21.462, 28.008(d-1), 28.0212(d), 29.095-29.098, 29.911, 29.917-29.919, and 39.235 [39.115] and this subchapter;

(2) the programs supported by grants approved under this subchapter; and

(3) the alignment of grants and programs to the strategic plan adopted under Section 39.407 [39.357].

SECTION 66. Section 51.3062, Education Code, is amended by adding Subsection (q-1) to read as follows:

(q-1) A student who has completed a Texas Diploma or advanced high school program as determined under Section 28.025 and demonstrated the performance standard for college readiness as provided by Section 39.024 on the Algebra II and English III end-of-course assessment instruments is exempt from the requirements of this section with respect to those content areas. The commissioner of higher education by rule shall establish the period for which an exemption under this subsection is valid.

SECTION 67. Sections 51.803(a), (b), and (d), Education Code, are amended to read as follows:

(a) Each general academic teaching institution shall admit an applicant for admission to the institution as an undergraduate student if the applicant graduated with a grade point average in the top 10 percent of the student's high school graduating class in one of the two school years preceding the academic year for which the applicant is applying for admission and:

(1) the applicant graduated from a public or private high school in this state accredited by a generally recognized accrediting organization or from a high school operated by the United States Department of Defense;

(2) the applicant:

(A) successfully completed:

(i) at a public high school, the curriculum requirements established under Section 28.025 for the Texas Diploma [recommended] or advanced high school program; or

(ii) at a high school to which Section 28.025 does not apply, a curriculum that is equivalent in content and rigor to the Texas Diploma [recommended] or advanced high school program; or

(B) satisfied ACT's College Readiness Benchmarks on the ACT assessment applicable to the applicant or earned on the SAT assessment a score of at least 1,500 out of 2,400 or the equivalent; and

(3) if the applicant graduated from a high school operated by the United States Department of Defense, the applicant is a Texas resident under Section 54.052 or is entitled to pay tuition fees at the rate provided for Texas residents under Section 54.058(d) for the term or semester to which admitted.

(b) An applicant who does not satisfy the curriculum requirements prescribed by Subsection (a)(2)(A)(i) or (ii) is considered to have satisfied those requirements if the student completed the portion of the Texas Diploma [recommended] or advanced curriculum or of the curriculum equivalent in content and rigor, as applicable, that was available to the student but was unable to complete the remainder of the curriculum solely because courses necessary to complete the remainder were unavailable to the student at the appropriate times in the student's high school career as a result of course scheduling, lack of enrollment capacity, or another cause not within the student's control.

(d) For purposes of Subsection (c)(2), a student's official transcript or diploma must, not later than the end of the student's junior year, indicate:

(1) whether the student has satisfied or is on schedule to satisfy the requirements of Subsection (a)(2)(A)(i) or (ii), as applicable; or

(2) if Subsection (b) applies to the student, whether the student has completed the portion of the Texas Diploma [recommended] or advanced curriculum or of the curriculum equivalent in content and rigor, as applicable, that was available to the student.

SECTION 68. Section 51.807, Education Code, as amended by Chapters 941 (H.B. 3826) and 1369 (H.B. 3851), Acts of the 80th Legislature, Regular Session, 2007, is reenacted and amended to read as follows:

Sec. 51.807. RULEMAKING. (a) To ensure a uniform standard for admissions under this subchapter, the Texas Higher Education Coordinating Board shall adopt rules establishing a standard method for computing a student's high school grade point average. The method established under this subsection:

(1) must:

(A) be based on a four-point scale; and

(B) assign additional weight for each honors course, advanced placement course, international baccalaureate course, or dual credit course completed by the student as the board considers appropriate, taking into consideration the academic rigor of each course completed by the student; and

(2) may result in a student having a grade point average higher than 4.0 on a four-point scale as a result of the assignment of additional weight for one or more courses completed by a student under Subdivision (1)(B).

(b) The Texas Higher Education Coordinating Board, after consulting with the Texas Education Agency, by rule shall establish standards for determining for purposes of this subchapter:

(1) whether a private high school is accredited by a generally recognized accrediting organization; and

(2) whether a person completed a high school curriculum that is equivalent in content and rigor to the curriculum requirements established under Section 28.025 for the Texas Diploma [recommended] or advanced high school program.

(c) The board may adopt other rules relating to the operation of admissions programs under this subchapter, including rules relating to the identification of eligible students.

(d) The standard method established under Subsection (a) for computing a student's high school grade point average applies to computing the grade point average of a student applying as a first-time freshman for admission to a general academic teaching institution beginning with admissions for the 2009 fall semester. This subsection expires January 1, 2010.

SECTION 69. Sections 56.203(a) and (d), Education Code, are amended to read as follows:

(a) To be eligible for an award through the Early High School Graduation Scholarship program, a person must:

(1) have graduated from a public high school in this state:

(A) in not more than 41 consecutive months and successfully completed the Texas Diploma [recommended] or advanced high school program established under Section 28.025, if the person graduated on or after September 1, 2005;

(B) in not more than 46 consecutive months, with at least 30 hours of college credit, and successfully completed the Texas Diploma [recommended] or advanced high school program established under Section 28.025, if the person graduated on or after September 1, 2005; or

(C) in not more than 36 consecutive months after successfully completing the requirements for a high school diploma, if the person graduated before September 1, 2005, regardless of whether the person successfully completed the Texas Diploma [recommended] or advanced high school program established under Section 28.025;

(2) have attended one or more public high schools in this state for the majority of time the person attended high school; and

(3) be a citizen of the United States or otherwise lawfully authorized to be present in the United States.

(d) A person who does not satisfy the curriculum requirements for the Texas Diploma [recommended] or advanced high school program as required to establish eligibility under Subsection (a)(1)(A) or (B) is considered to have satisfied those requirements if the high school from which the person graduated indicates on the person's transcript that the person was unable to complete the appropriate curriculum within the time prescribed by that subsection solely because of a reason beyond the person's control, such as lack of enrollment capacity or a shortage of qualified teachers.

SECTION 70. Section 56.204(a), Education Code, is amended to read as follows:

(a) An eligible person under the Early High School Graduation Scholarship program is entitled to a state credit to apply toward tuition or tuition and mandatory fees, as applicable, at a public or private institution of higher education in this state in the following amounts:

(1) $2,000 to apply toward tuition and mandatory fees if the person successfully completed the Texas Diploma [recommended] or advanced high school program established under Section 28.025 and graduated from high school on or after September 1, 2005, in 36 consecutive months or less and an additional $1,000 to apply toward tuition and mandatory fees if the person graduated with at least 15 hours of college credit;

(2) $500 to apply toward tuition and mandatory fees if the person successfully completed the Texas Diploma [recommended] or advanced high school program established under Section 28.025 and graduated from high school on or after September 1, 2005, in more than 36 consecutive months but not more than 41 consecutive months and an additional $1,000 to apply toward tuition and mandatory fees if the person graduated with at least 30 hours of college credit;

(3) $1,000 to apply toward tuition and mandatory fees if the person successfully completed the Texas Diploma [recommended] or advanced high school program established under Section 28.025 and graduated from high school on or after September 1, 2005, in more than 41 consecutive months but not more than 45 consecutive months with at least 30 hours of college credit; or

(4) $1,000 to apply only toward tuition if the person graduated before September 1, 2005, after successfully completing the requirements for a high school diploma in not more than 36 consecutive months.

SECTION 71. Section 56.210(b), Education Code, is amended to read as follows:

(b) The information provided under Subsection (a) must include:

(1) the number and type of high school course credits necessary to satisfy the eligibility requirements for the Early High School Graduation Scholarship program; and

(2) the appropriate order in which those high school course credits must be earned to satisfy the eligibility requirements, including course credits related to the curriculum for the Texas Diploma [recommended] or advanced high school program.

SECTION 72. Sections 56.304(a), (f), and (g), Education Code, are amended to read as follows:

(a) To be eligible initially for a TEXAS grant, a person must:

(1) be a resident of this state as determined by coordinating board rules;

(2) meet either of the following academic requirements:

(A) be a graduate of a public or accredited private high school in this state who graduated not earlier than the 1998-1999 school year and who completed the Texas Diploma [recommended] or advanced high school program [curriculum] established under Section [28.002 or] 28.025 or its equivalent; or

(B) have received an associate degree from a public or private institution of higher education not earlier than May 1, 2001;

(3) meet financial need requirements as defined by the coordinating board;

(4) be enrolled in an undergraduate degree or certificate program at an eligible institution;

(5) be enrolled as:

(A) an entering undergraduate student for at least three-fourths of a full course load for an entering undergraduate student, as determined by the coordinating board, not later than the 16th month after the date of the person's graduation from high school; or

(B) an entering student for at least three-fourths of a full course load for an undergraduate student as determined by the coordinating board, not later than the 12th month after the month the person receives an associate degree from a public or private institution of higher education;

(6) have applied for any available financial aid or assistance; and

(7) comply with any additional nonacademic requirement adopted by the coordinating board under this subchapter.

(f) The requirement in Subsection (a)(2) that a person must have completed the Texas Diploma [recommended] or advanced high school program [curriculum] does not apply to a person who:

(1) attended a public high school in a school district if that district certifies to the commissioner of education that the high school did not offer all the necessary courses for a person to complete all parts of the Texas Diploma [recommended] or advanced high school program [curriculum]; and

(2) completed all courses at the high school offered toward the completion of the Texas Diploma [recommended] or advanced high school program [curriculum].

(g) Not later than March 1 of each year, the commissioner of education shall provide to the coordinating board a list of all the public high schools that do not offer all the courses necessary to complete all parts of the Texas Diploma [recommended] or advanced high school program [curriculum] as described by Subsection (f)(1).

SECTION 73. The heading to Section 56.3041, Education Code, is amended to read as follows:

Sec. 56.3041. INITIAL ELIGIBILITY OF PERSON ON TRACK TO COMPLETE TEXAS DIPLOMA [RECOMMENDED] OR ADVANCED PROGRAM [CURRICULUM].

SECTION 74. Sections 56.3041(a) and (b), Education Code, are amended to read as follows:

(a) If at the time an eligible institution awards TEXAS grants to initial recipients for an academic year an applicant has not completed high school or the applicant's final high school transcript is not yet available to the institution, the student is considered to have satisfied the requirements of Section 56.304(a)(2)(A) if the student's available high school transcript indicates that at the time the transcript was prepared the student was on schedule to graduate from high school and to complete the Texas Diploma [recommended] or advanced high school program [curriculum] or its equivalent, as applicable to the student, in time to be eligible for a TEXAS grant for the academic year.

(b) The coordinating board or the eligible institution may require the student to forgo or repay the amount of an initial TEXAS grant awarded to the student as described by Subsection (a) if the student fails to complete the Texas Diploma [recommended] or advanced high school program [curriculum] or its equivalent after the issuance of the available high school transcript.

SECTION 75. Section 56.308(b), Education Code, is amended to read as follows:

(b) Each school district shall:

(1) notify its middle school students, junior high school students, and high school students, those students' teachers and counselors, and those students' parents of the TEXAS grant and Teach for Texas grant programs, the eligibility requirements of each program, the need for students to make informed curriculum choices to be prepared for success beyond high school, and sources of information on higher education admissions and financial aid in a manner that assists the district in implementing a strategy adopted by the district under Section 11.252(a)(4); and

(2) ensure that each student's official transcript or diploma indicates whether the student has completed or is on schedule to complete:

(A) the Texas Diploma [recommended] or advanced high school program [curriculum] required for grant eligibility under Section [28.002 or] 28.025; or

(B) for a school district covered by Section 56.304(f)(1), the required portion of the Texas Diploma [recommended] or advanced high school program [curriculum] in the manner described by Section 56.304(f)(2).

SECTION 76. Section 56.455, Education Code, is amended to read as follows:

Sec. 56.455. INITIAL ELIGIBILITY FOR LOAN. To be eligible initially for a Texas B-On-time loan, a person must:

(1) be a resident of this state under Section 54.052 or be entitled, as a child of a member of the armed forces of the United States, to pay tuition at the rate provided for residents of this state under Section 54.058;

(2) meet one of the following academic requirements:

(A) be a graduate of a public or private high school in this state who graduated not earlier than the 2002-2003 school year under the Texas Diploma [recommended] or advanced high school program established under Section 28.025(a) or its equivalent;

(B) be a graduate of a high school operated by the United States Department of Defense who:

(i) graduated from that school not earlier than the 2002-2003 school year; and

(ii) at the time of graduation from that school was a dependent child of a member of the armed forces of the United States; or

(C) have received an associate degree from an eligible institution not earlier than May 1, 2005;

(3) be enrolled for a full course load for an undergraduate student, as determined by the coordinating board, in an undergraduate degree or certificate program at an eligible institution;

(4) be eligible for federal financial aid, except that a person is not required to meet any financial need requirement applicable to a particular federal financial aid program; and

(5) comply with any additional nonacademic requirement adopted by the coordinating board under this subchapter.

SECTION 77. Section 61.792(b), Education Code, is amended to read as follows:

(b) To qualify for a scholarship under this section, a student must:

(1) have graduated with a grade point average in the top 20 percent of the student's high school graduating class;

(2) have graduated from high school with a grade point average of at least 3.5 on a four-point scale or the equivalent in mathematics and science courses offered under the Texas Diploma [recommended] or advanced high school program under Section 28.025(a); and

(3) maintain an overall grade point average of at least 3.0 on a four-point scale at the general academic teaching institution in which the student is enrolled.

SECTION 78. Section 61.852(a), Education Code, is amended to read as follows:

(a) A tech-prep program is a program of study that:

(1) combines at least two years of secondary education with at least two years of postsecondary education in a nonduplicative, sequential course of study based on the Texas Diploma [recommended] high school program adopted by the State Board of Education under Section 28.025(a);

(2) integrates academic instruction and vocational and technical instruction;

(3) uses work-based and worksite learning where available and appropriate;

(4) provides technical preparation in a career field such as engineering technology, applied science, a mechanical, industrial, or practical art or trade, agriculture, health occupations, business, or applied economics;

(5) builds student competence in mathematics, science, reading, writing, communications, economics, and workplace skills through applied, contextual academics and integrated instruction in a coherent sequence of courses;

(6) leads to an associate degree, two-year postsecondary certificate, or postsecondary two-year apprenticeship with provisions, to the extent applicable, for students to continue toward completion of a baccalaureate degree; and

(7) leads to placement in appropriate employment or to further education.

SECTION 79. Section 61.855(d), Education Code, is amended to read as follows:

(d) A tech-prep program must:

(1) be implemented under an articulation agreement between the participants in the consortium;

(2) consist of two to four years of secondary school preceding graduation and:

(A) two or more years of higher education; or

(B) two or more years of apprenticeship following secondary instruction;

(3) have a common core of required proficiency based on the Texas Diploma [recommended] high school program adopted by the State Board of Education under Section 28.025(a), with proficiencies in mathematics, science, reading, writing, communications, and technologies designed to lead to an associate's degree or postsecondary certificate in a specific career field;

(4) include the development of tech-prep program curricula for both secondary and postsecondary participants in the consortium that:

(A) meets academic standards developed by the state;

(B) links secondary schools and two-year postsecondary institutions, and, if practicable, four-year institutions of higher education through nonduplicative sequences of courses in career fields, including the investigation of opportunities for tech-prep students to enroll concurrently in secondary and postsecondary course work;

(C) uses, if appropriate and available, work-based or worksite learning in conjunction with business and all aspects of an industry; and

(D) uses educational technology and distance learning, as appropriate, to involve each consortium participant more fully in the development and operation of programs;

(5) include in-service training for teachers that:

(A) is designed to train vocational and technical teachers to effectively implement tech-prep programs;

(B) provides for joint training for teachers in the tech-prep consortium;

(C) is designed to ensure that teachers and administrators stay current with the needs, expectations, and methods of business and of all aspects of an industry;

(D) focuses on training postsecondary education faculty in the use of contextual and applied curricula and instruction; and

(E) provides training in the use and application of technology;

(6) include training programs for counselors designed to enable counselors to more effectively:

(A) provide information to students regarding tech-prep programs;

(B) support student progress in completing tech-prep programs;

(C) provide information on related employment opportunities;

(D) ensure that tech-prep students are placed in appropriate employment; and

(E) stay current with the needs, expectations, and methods of business and of all aspects of an industry;

(7) provide equal access to the full range of tech-prep programs for individuals who are members of special populations, including by the development of tech-prep program services appropriate to the needs of special populations; and

(8) provide for preparatory services that assist participants in tech-prep programs.

SECTION 80. Chapter 61, Education Code, is amended by adding Subchapter T-1 to read as follows:

SUBCHAPTER T-1. CAREER AND TECHNICAL EDUCATION

Sec. 61.861. DEVELOPMENT OF MATHEMATICS AND SCIENCE COURSES FOR HIGH-DEMAND OCCUPATIONS. (a) The commissioner of higher education, in consultation with the comptroller and the Texas Workforce Commission, may award a grant in an amount not to exceed $1 million to an institution of higher education to develop advanced mathematics and science courses to prepare high school students for employment in a high-demand occupation. The commissioner of higher education, the comptroller, and the Texas Workforce Commission shall jointly determine what is considered a high-demand occupation for purposes of this subchapter.

(b) An institution of higher education shall work in partnership with at least one independent school district and a business entity in developing a course for purposes of this section.

(c) A course developed for purposes of this section must:

(1) provide content that enables a student to develop the relevant and critical skills needed to be prepared for employment or additional training in a high-demand occupation;

(2) incorporate college and career readiness skills as part of the curriculum;

(3) be offered for dual credit; and

(4) satisfy a mathematics or science requirement under the Texas Diploma or advanced high school program as determined under Section 28.025.

(d) An institution of higher education shall periodically review and revise the curriculum for a course developed for purposes of this section to accommodate changes in industry standards for the high-demand occupation.

Sec. 61.862. GRANT APPLICATION CRITERIA. The commissioner of higher education, in consultation with the comptroller and the Texas Workforce Commission, shall establish application criteria for a grant under this subchapter and in making an award, shall give priority to courses that:

(1) will prepare students for high-demand, high-wage, and high-skill occupations;

(2) may be transferred as college credit to multiple institutions of higher education; and

(3) are developed as part of a sequence of courses that includes statewide availability of the instructional materials and training for the courses at a nominal cost to public educational institutions in this state.

Sec. 61.863. USE OF FUNDS. An institution of higher education may use funds awarded under this section to develop, in connection with a course described by Subsection (a):

(1) curriculum;

(2) assessments; or

(3) instructional materials, including technology-based supplemental materials.

Sec. 61.864. REVIEW OF COURSES. Courses developed for which a grant is awarded under this subchapter shall be reviewed by the commissioner of higher education, in consultation with the comptroller and the Texas Workforce Commission, once every four years to determine whether the course:

(1) is being used by public educational institutions in this state; and

(2) prepares high school students with the skills necessary for employment in the high-demand occupation.

Sec. 61.865. MATCHING CONTRIBUTION REQUIRED. An institution of higher education awarded a grant under this subchapter must obtain from one or more business entities in the industry for which students taking courses developed under Section 61.861 are training, in a total amount equal to the amount of the state grant:

(1) gifts, grants, or donations of funds; or

(2) contributions of property that may be used in providing the courses.

Sec. 61.866. LIMITATION ON TOTAL AMOUNT OF GRANTS. In any state fiscal biennium, the total amount of grants awarded under this subchapter may not exceed $10 million.

Sec. 61.867. FUNDING OF GRANTS. The commissioner of higher education shall administer this section using available appropriations and gifts, grants, and donations made for the purposes of this subchapter.

SECTION 81. Sections 39.034(e), (f), and (g), Education Code, are repealed.

SECTION 82. A reference in law to the minimum high school program means the basic high school program. A reference in law to the recommended high school program means the Texas Diploma high school program.

SECTION 83. This Act applies beginning with the 2009-2010 school year.

SECTION 84. This Act takes effect immediately if it receives a vote of two-thirds of all the members elected to each house, as provided by Section 39, Article III, Texas Constitution. If this Act does not receive the vote necessary for immediate effect, this Act takes effect September 1, 2009.