81(R) HB 3646 - Engrossed version

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	By: Hochberg, Eissler, Aycock, Pitts,	H.B. No. 3646
	Patrick, et al.

A BILL TO BE ENTITLED

AN ACT

relating to public school finance.

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

SECTION 1. Section 7.024(a), Education Code, is amended to

read as follows:

(a) The investment capital fund consists of money

appropriated for purposes of [~~transferred to~~] the fund [~~as provided~~

~~by Section 42.152(l)~~]. The agency shall administer the fund. The

purposes of this fund are to assist eligible public schools to

implement practices and procedures consistent with deregulation

and school restructuring in order to improve student achievement

and to help schools identify and train parents and community

leaders who will hold the school and the school district

accountable for achieving high academic standards.

SECTION 2. Sections 7.062(a) and (c), Education Code, are

amended to read as follows:

(a) In this section, "wealth per student" means a school

district's taxable value of property for the current tax year as

determined under Subchapter M, Chapter 403, Government Code, [~~or,~~

~~if applicable, Section 42.2521,~~] divided by the district's average

daily attendance as determined under Section 42.005.

commissioner certifies that the amount appropriated for a state

fiscal year for purposes of Subchapters A and B, Chapter 46, exceeds

the amount to which school districts are entitled under those

subchapters for that year, the commissioner shall use the excess

funds, in an amount not to exceed $20 million in any state fiscal

year, for the purpose of making grants under this section. The use

of excess funds under this subsection has priority over any

provision of Chapter 42 that permits or directs the use of excess

foundation school program funds, including Sections 42.2517,

[~~42.2521,~~] 42.2522, and 42.2531. The commissioner is required to

use excess funds as provided by this subsection only if the

commissioner is not required to reduce the total amount of state

funds allocated to school districts under Section 42.253(h).

SECTION 3. Section 12.106, Education Code, is amended by

amending Subsection (a) and adding Subsections (a-1) and (a-2) to

read as follows:

(a) A charter holder is entitled to receive for the

open-enrollment charter school funding under Chapter 42 equal to

the greater of:

(1) the amount of funding per student in weighted

average daily attendance, excluding enrichment funding under

Sections 42.302(a-1)(2) and (3), as they existed on January 1,

2009, received for the school during the 2008-2009 school year and

an additional amount of $100 for each student in weighted average

daily attendance; or

(2) the amount of funding per student in weighted

average daily attendance, excluding enrichment funding under

Section 42.302(a), to which the charter holder would be entitled

for the school under Chapter 42 [as] if the school were a school

district without a tier one local share for purposes of Section

42.253 and without any local revenue [~~("LR")~~] for purposes of

Section 42.2516 [~~42.302~~].

(a-1) In determining funding for an open-enrollment charter

school under Subsection (a)(2), adjustments under Sections 42.102,

42.103, 42.104, and 42.105 [~~and the district enrichment tax rate~~

~~("DTR") under Section 42.302~~] are based on the average adjustment

[~~and average district enrichment tax rate~~] for the state.

(a-2) In addition to the funding provided by Subsection (a),

a charter holder is entitled to receive for the open-enrollment

charter school enrichment funding under Section 42.302(a) based on

the state average tax effort.

SECTION 4. Subchapter D, Chapter 12, Education Code, is

amended by adding Section 12.1331 to read as follows:

Sec. 12.1331. WAGE INCREASE FOR CERTAIN PROFESSIONAL STAFF.

(a) This section applies to a charter holder that on January 1,

2009, operated an open-enrollment charter school.

(b) Beginning with the 2009-2010 school year, each charter

holder shall increase the monthly salary of each classroom teacher,

full-time speech pathologist, full-time librarian, full-time

counselor, and full-time school nurse employed by the charter

holder at an open-enrollment charter school by the greater of:

(1) $80; or

(2) the maximum uniform amount that, when combined

with any resulting increases in the amount of contributions made by

the charter holder for social security coverage for the specified

employees or by the charter holder on behalf of the specified

employees under Section 825.405, Government Code, may be provided

using 50 percent of any additional funding received by the charter

holder as a result of changes made by H.B. No. 3646, Acts of the 81st

Legislature, Regular Session, 2009, to Chapters 41 and 42 over the

funding the charter holder would have received under Chapter 42, as

it existed on January 1, 2009, as determined by the commissioner.

the charter holder would otherwise pay the employee during the

school year.

SECTION 5. Effective September 1, 2009, Section 21.402,

Education Code, is amended by amending Subsections (a), (d), and

(g) and adding Subsections (c-1), (c-2), (c-3), and (c-4) to read as

follows:

(a) Except as provided by Subsection (d), (e), or (f), a

school district must pay each classroom teacher, full-time

librarian, full-time counselor certified under Subchapter B, or

full-time school nurse not less than the minimum monthly salary,

based on the employee's level of experience in addition to other

factors, as determined by commissioner rule, determined by the

following formula:

MS = SF x FS

where:

"MS" is the minimum monthly salary;

"SF" is the applicable salary factor specified by Subsection

(c); and

"FS" is the amount, as determined by the commissioner under

Subsection (b), of state and local funds per weighted student,

including funds provided under Section 42.2516 [~~42.2516(b)(1)(B),~~

~~but not funds provided under Section 42.2516(b)(1)(A), (b)(1)(C),~~

~~(b)(2), or (b)(3)~~], available to a district eligible to receive

state assistance under Section 42.302 with a maintenance and

operations tax rate per $100 of taxable value equal to the product

of the state compression percentage, as determined under Section

42.2516, multiplied by $1.50, except that the amount of state and

local funds per weighted student does not include the amount

attributable to the increase in the guaranteed level made by

Chapter 1187, Acts of the 77th Legislature, Regular Session, 2001.

(c-1) Notwithstanding Subsection (a), for the 2009-2010 and

2010-2011 school years, each school district shall increase the

monthly salary of each classroom teacher, full-time speech

pathologist, full-time librarian, full-time counselor certified

under Subchapter B, and full-time school nurse by the greater of:

(1) $80; or

(2) the maximum uniform amount that, when combined

with any resulting increases in the amount of contributions made by

the district for social security coverage for the specified

employees or by the district on behalf of the specified employees

under Section 825.405, Government Code, may be provided using 50

percent of any additional funding received by the district as a

result of changes made by H.B. No. 3646, Acts of the 81st

Legislature, Regular Session, 2009, to Chapters 41 and 42 over the

funding to which the district would have been entitled under

Chapters 41 and 42, as those chapters existed on January 1, 2009, at

the maintenance and operations tax rate equal to the rate adopted by

the district for the 2008-2009 school year, as determined by the

commissioner.

(c-2) An increase in salary under Subsection (c-1) does not

include:

(1) any amount an employee would have received for the

2009-2010 or 2010-2011 school year, as applicable, under the

district's salary schedule for the 2008-2009 school year, if that

schedule had been in effect for the 2009-2010 or 2010-2011 school

year, including any local supplement and any money representing a

career ladder supplement the employee would have received in the

2009-2010 or 2010-2011 school year; or

(2) any part of the salary to which an employee is

entitled under Subsection (a).

(c-3) Subsections (c-1) and (c-2) and this subsection

expire September 1, 2011.

(c-4) Notwithstanding any other provision of this section,

the salary factor for purposes of this section for an employee with

21 or more years of experience is 1.0217.

(d) A classroom teacher, full-time speech pathologist,

full-time librarian, full-time counselor certified under

Subchapter B, or full-time school nurse employed by a school

district in the 2010-2011 [~~2006-2007~~] school year is, as long as the

employee is employed by the same district, entitled to a salary that

is at least equal to the salary the employee received for the

2010-2011 [~~2006-2007~~] school year.

(g) The commissioner may adopt rules to govern the

application of this section, including rules that:

(1) require the payment of a minimum salary under this

section to a person employed in more than one capacity for which a

minimum salary is provided and whose combined employment in those

capacities constitutes full-time employment; and

(2) specify the credentials a person must hold to be

considered a speech pathologist or school nurse under this section.

SECTION 6. Effective September 1, 2010, Section 21.402,

Education Code, is amended by adding Subsection (c-4) to read as

follows:

(c-4) Notwithstanding any other provision of this section,

the salary factors per step for purposes of this section for an

employee with 21 or more years of experience are as follows:

Years Experience

22 and over

Salary Factor

1.0217

1.0344

SECTION 7. Effective September 1, 2011, Section 21.402,

Education Code, is amended by adding Subsection (c-4) to read as

follows:

(c-4) Notwithstanding any other provision of this section,

the salary factors per step for purposes of this section for an

employee with 21 or more years of experience are as follows:

Years Experience

23 and over

Salary Factor

1.0217

1.0344

1.0471

SECTION 8. Effective September 1, 2012, Section 21.402,

Education Code, is amended by adding Subsection (c-4) to read as

follows:

(c-4) Notwithstanding any other provision of this section,

the salary factors per step for purposes of this section for an

employee with 21 or more years of experience are as follows:

Years Experience

Salary Factor

1.0217

1.0344

1.0471

Years Experience

24 and over

Salary Factor

1.0598

SECTION 9. Effective September 1, 2013, Section 21.402,

Education Code, is amended by adding Subsection (c-4) to read as

follows:

(c-4) Notwithstanding any other provision of this section,

the salary factors per step for purposes of this section for an

employee with 21 or more years of experience are as follows:

Years Experience

Salary Factor

1.0217

1.0344

1.0471

Years Experience

25 and over

Salary Factor

1.0598

1.0725

SECTION 10. Effective September 1, 2014, Section 21.402,

Education Code, is amended by adding Subsection (c-4) to read as

follows:

(c-4) Notwithstanding any other provision of this section,

the salary factors per step for purposes of this section for an

employee with 21 or more years of experience are as follows:

Years Experience

Salary Factor

1.0217

1.0344

1.0471

Years Experience

26 and over

Salary Factor

1.0598

1.0725

1.0852

SECTION 11. Effective September 1, 2015, Section 21.402,

Education Code, is amended by adding Subsection (c-4) to read as

follows:

(c-4) Notwithstanding any other provision of this section,

the salary factors per step for purposes of this section for an

employee with 21 or more years of experience are as follows:

Years Experience

Salary Factor

1.0217

1.0344

1.0471

Years Experience

Salary Factor

1.0598

1.0725

1.0852

Years Experience

27 and over

Salary Factor

1.0979

SECTION 12. Effective September 1, 2016, Section 21.402,

Education Code, is amended by adding Subsection (c-4) to read as

follows:

(c-4) Notwithstanding any other provision of this section,

the salary factors per step for purposes of this section for an

employee with 21 or more years of experience are as follows:

Years Experience

Salary Factor

1.0217

1.0344

1.0471

Years Experience

Salary Factor

1.0598

1.0725

1.0852

Years Experience

28 and over

Salary Factor

1.0979

1.1106

SECTION 13. Effective September 1, 2017, Section 21.402,

Education Code, is amended by adding Subsection (c-4) to read as

follows:

(c-4) Notwithstanding any other provision of this section,

the salary factors per step for purposes of this section for an

employee with 21 or more years of experience are as follows:

Years Experience

Salary Factor

1.0217

1.0344

1.0471

Years Experience

Salary Factor

1.0598

1.0725

1.0852

Years Experience

29 and over

Salary Factor

1.0979

1.1106

1.1233

SECTION 14. Effective September 1, 2018, Section 21.402,

Education Code, is amended by adding Subsection (c-4) to read as

follows:

(c-4) Notwithstanding any other provision of this section,

the salary factors per step for purposes of this section for an

employee with 21 or more years of experience are as follows:

Years Experience

Salary Factor

1.0217

1.0344

1.0471

Years Experience

Salary Factor

1.0598

1.0725

1.0852

Years Experience

Salary Factor

1.0979

1.1106

1.1233

Years Experience

30 and over

Salary Factor

1.1360

SECTION 15. Effective September 1, 2019, Section 21.402,

Education Code, is amended by adding Subsection (c-4) to read as

follows:

(c-4) Notwithstanding any other provision of this section,

the salary factors per step for purposes of this section for an

employee with 21 or more years of experience are as follows:

Years Experience

Salary Factor

1.0217

1.0344

1.0471

Years Experience

Salary Factor

1.0598

1.0725

1.0852

Years Experience

Salary Factor

1.0979

1.1106

1.1233

Years Experience

31 and over

Salary Factor

1.1360

1.1487

SECTION 16. Effective September 1, 2020, Section 21.402,

Education Code, is amended by adding Subsection (c-4) to read as

follows:

(c-4) Notwithstanding any other provision of this section,

the salary factors per step for purposes of this section for an

employee with 21 or more years of experience are as follows:

Years Experience

Salary Factor

1.0217

1.0344

1.0471

Years Experience

Salary Factor

1.0598

1.0725

1.0852

Years Experience

Salary Factor

1.0979

1.1106

1.1233

Years Experience

32 and over

Salary Factor

1.1360

1.1487

1.1614

SECTION 17. Effective September 1, 2021, Section 21.402,

Education Code, is amended by adding Subsection (c-4) to read as

follows:

(c-4) Notwithstanding any other provision of this section,

the salary factors per step for purposes of this section for an

employee with 21 or more years of experience are as follows:

Years Experience

Salary Factor

1.0217

1.0344

1.0471

Years Experience

Salary Factor

1.0598

1.0725

1.0852

Years Experience

Salary Factor

1.0979

1.1106

1.1233

Years Experience

Salary Factor

1.1360

1.1487

1.1614

Years Experience

33 and over

Salary Factor

1.1741

SECTION 18. Effective September 1, 2022, Section 21.402,

Education Code, is amended by adding Subsection (c-4) to read as

follows:

(c-4) Notwithstanding any other provision of this section,

the salary factors per step for purposes of this section for an

employee with 21 or more years of experience are as follows:

Years Experience

Salary Factor

1.0217

1.0344

1.0471

Years Experience

Salary Factor

1.0598

1.0725

1.0852

Years Experience

Salary Factor

1.0979

1.1106

1.1233

Years Experience

Salary Factor

1.1360

1.1487

1.1614

Years Experience

34 and over

Salary Factor

1.1741

1.1868

SECTION 19. Effective September 1, 2023, Section 21.402,

Education Code, is amended by adding Subsection (c-4) to read as

follows:

(c-4) Notwithstanding any other provision of this section,

the salary factors per step for purposes of this section for an

employee with 21 or more years of experience are as follows:

Years Experience

Salary Factor

1.0217

1.0344

1.0471

Years Experience

Salary Factor

1.0598

1.0725

1.0852

Years Experience

Salary Factor

1.0979

1.1106

1.1233

Years Experience

Salary Factor

1.1360

1.1487

1.1614

Years Experience

35 and over

Salary Factor

1.1741

1.1868

1.1995

SECTION 20. Effective September 1, 2009, Section 21.403(a),

Education Code, is amended to read as follows:

(a) A teacher, librarian, counselor, or nurse shall advance

one step on the minimum salary schedule under Section 21.402 for

each year of experience as a teacher, librarian, counselor, or

nurse until step 21 [20] is reached.

SECTION 21. Effective September 1, 2010, Section 21.403(a),

Education Code, is amended to read as follows:

(a) A teacher, librarian, counselor, or nurse shall advance

one step on the minimum salary schedule under Section 21.402 for

each year of experience as a teacher, librarian, counselor, or

nurse until step 22 [20] is reached.

SECTION 22. Effective September 1, 2011, Section 21.403(a),

Education Code, is amended to read as follows:

(a) A teacher, librarian, counselor, or nurse shall advance

one step on the minimum salary schedule under Section 21.402 for

each year of experience as a teacher, librarian, counselor, or

nurse until step 23 [20] is reached.

SECTION 23. Effective September 1, 2012, Section 21.403(a),

Education Code, is amended to read as follows:

(a) A teacher, librarian, counselor, or nurse shall advance

one step on the minimum salary schedule under Section 21.402 for

each year of experience as a teacher, librarian, counselor, or

nurse until step 24 [20] is reached.

SECTION 24. Effective September 1, 2013, Section 21.403(a),

Education Code, is amended to read as follows:

(a) A teacher, librarian, counselor, or nurse shall advance

one step on the minimum salary schedule under Section 21.402 for

each year of experience as a teacher, librarian, counselor, or

nurse until step 25 [20] is reached.

SECTION 25. Effective September 1, 2014, Section 21.403(a),

Education Code, is amended to read as follows:

(a) A teacher, librarian, counselor, or nurse shall advance

one step on the minimum salary schedule under Section 21.402 for

each year of experience as a teacher, librarian, counselor, or

nurse until step 26 [20] is reached.

SECTION 26. Effective September 1, 2015, Section 21.403(a),

Education Code, is amended to read as follows:

(a) A teacher, librarian, counselor, or nurse shall advance

one step on the minimum salary schedule under Section 21.402 for

each year of experience as a teacher, librarian, counselor, or

nurse until step 27 [20] is reached.

SECTION 27. Effective September 1, 2016, Section 21.403(a),

Education Code, is amended to read as follows:

(a) A teacher, librarian, counselor, or nurse shall advance

one step on the minimum salary schedule under Section 21.402 for

each year of experience as a teacher, librarian, counselor, or

nurse until step 28 [20] is reached.

SECTION 28. Effective September 1, 2017, Section 21.403(a),

Education Code, is amended to read as follows:

(a) A teacher, librarian, counselor, or nurse shall advance

one step on the minimum salary schedule under Section 21.402 for

each year of experience as a teacher, librarian, counselor, or

nurse until step 29 [20] is reached.

SECTION 29. Effective September 1, 2018, Section 21.403(a),

Education Code, is amended to read as follows:

(a) A teacher, librarian, counselor, or nurse shall advance

one step on the minimum salary schedule under Section 21.402 for

each year of experience as a teacher, librarian, counselor, or

nurse until step 30 [20] is reached.

SECTION 30. Effective September 1, 2019, Section 21.403(a),

Education Code, is amended to read as follows:

(a) A teacher, librarian, counselor, or nurse shall advance

one step on the minimum salary schedule under Section 21.402 for

each year of experience as a teacher, librarian, counselor, or

nurse until step 31 [20] is reached.

SECTION 31. Effective September 1, 2020, Section 21.403(a),

Education Code, is amended to read as follows:

(a) A teacher, librarian, counselor, or nurse shall advance

one step on the minimum salary schedule under Section 21.402 for

each year of experience as a teacher, librarian, counselor, or

nurse until step 32 [20] is reached.

SECTION 32. Effective September 1, 2021, Section 21.403(a),

Education Code, is amended to read as follows:

(a) A teacher, librarian, counselor, or nurse shall advance

one step on the minimum salary schedule under Section 21.402 for

each year of experience as a teacher, librarian, counselor, or

nurse until step 33 [20] is reached.

SECTION 33. Effective September 1, 2022, Section 21.403(a),

Education Code, is amended to read as follows:

(a) A teacher, librarian, counselor, or nurse shall advance

one step on the minimum salary schedule under Section 21.402 for

each year of experience as a teacher, librarian, counselor, or

nurse until step 34 [20] is reached.

SECTION 34. Effective September 1, 2023, Section 21.403(a),

Education Code, is amended to read as follows:

(a) A teacher, librarian, counselor, or nurse shall advance

one step on the minimum salary schedule under Section 21.402 for

each year of experience as a teacher, librarian, counselor, or

nurse until step 35 [20] is reached.

SECTION 35. Section 21.415(a), Education Code, is amended

to read as follows:

(a) A school district shall provide in employment contracts

that qualifying employees may receive an incentive payment under an

awards program established under Subchapter [~~N or~~] O if the

district participates in the program.

SECTION 36. Sections 21.703(a) and (d), Education Code, are

amended to read as follows:

(a) Each state fiscal year, the commissioner shall deposit

an amount determined by the General Appropriations Act [~~the sum of~~

~~$1,000 multiplied by the number of classroom teachers in this~~

~~state~~] to the credit of the educator excellence fund in the general

revenue fund. Each state fiscal year, the agency shall use[:

[~~(1)~~ ~~not more than $100 million of the funds in the~~

~~educator excellence fund to provide grant awards under the awards~~

~~for student achievement program established under Subchapter N; and~~

[~~(2) any remaining~~] funds in the educator excellence

fund to provide a qualifying school district a grant in an amount

determined by:

(1) [~~(A)~~] dividing the amount of [~~remaining~~] money

available for distribution in the educator excellence fund by the

total number of students in weighted average daily attendance in

qualifying districts for that fiscal year; and

(2) [~~(B)~~] multiplying the amount determined under

Subdivision (1) [~~Paragraph (A)~~] by the number of students in

weighted average daily attendance in the district.

(d) Notwithstanding Subsection (a) [~~or (b)~~], the agency may

use funds in the educator excellence fund as necessary to conduct or

contract with another entity to conduct the evaluation required

under Section 21.706. This subsection expires June 1, 2011.

SECTION 37. Section 21.704, Education Code, is amended by

adding Subsection (c-1) to read as follows:

(c-1) A local awards plan must provide for teachers and

principals eligible to receive awards under the plan to be notified

of the specific criteria and any formulas on which the awards will

be based before the beginning of the period on which the awards will

be based.

SECTION 38. Section 21.705, Education Code, is amended to

read as follows:

Sec. 21.705. AWARD PAYMENTS. A school district must use at

least 30 [60] percent of grant funds awarded to the district under

this subchapter to directly award classroom teachers who

effectively improve student achievement as determined by

meaningful, objective measures. The remaining funds must be used

only to:

(1) recruit and retain highly qualified teachers and

principals for campuses serving a disproportionately high number of

economically disadvantaged students or students of limited English

proficiency, as defined by Section 29.052;

(2) recruit and retain teachers certified under

Subchapter B in mathematics, science, special education, bilingual

education, or English as a second language;

(3) provide teacher induction and mentoring support;

(4) provide funding for previously developed

incentive programs [~~provide stipends to effective mentors or~~

~~teacher coaches;~~

[~~(2)~~ ~~provide stipends to classroom teachers who are~~

~~certified in a subject that is designated by the commissioner as~~

~~commonly experiencing a critical shortage of teachers;~~

[~~(3)~~ ~~provide stipends to classroom teachers who are~~

~~certified under Subchapter B in the main subject area in which they~~

~~teach;~~

[~~(4)~~ ~~provide stipends to classroom teachers with~~

~~proven records of success for improving student performance who are~~

~~assigned to campuses at which the district has experienced~~

~~difficulty assigning or retaining teachers;~~

[~~(5)~~ ~~provide stipends to classroom teachers who hold~~

~~postgraduate degrees;~~

[~~(6)~~ ~~provide awards to principals who effectively~~

~~increase student performance as determined by objective measures;~~

[~~(7)~~ ~~provide awards to other campus employees who~~

~~demonstrate excellence; or~~

[~~(8)~~ ~~implement the components of a Teacher Advancement~~

~~Program (TAP), including:~~

[~~(A)~~ ~~an instructionally focused accountability~~

~~system; and~~

[~~(B)~~ ~~the adjustment of teaching schedules to~~

~~permit ongoing applied professional growth~~].

SECTION 39. Section 21.706(a), Education Code, is amended

to read as follows:

(a) Using funds from the educator excellence fund created

under Section 21.703, the agency shall conduct or contract with

another entity to conduct a comprehensive evaluation of the [~~awards~~

~~for student achievement program established under Subchapter N and~~

~~the educator excellence awards~~] program [~~established under this~~

~~subchapter~~]. The evaluation must include:

(1) a descriptive analysis of the design and

implementation of the [~~awards for student achievement program and~~

~~the educator excellence awards~~] program at participating campuses

or school districts, including detailed descriptions of the models

and approaches used by the campuses or districts in distributing

incentive awards to classroom teachers;

(2) detailed information regarding the distribution

of incentive awards to classroom teachers under the [~~awards for~~

~~student achievement program and the educator excellence awards~~]

program, including the measurements used by the campuses or

districts in determining the amounts of incentive awards to

distribute to classroom teachers;

(3) a comprehensive, quantitative analysis of the

impact of the [~~awards for student achievement program and the~~

~~educator excellence awards~~] program at participating campuses or

districts, including the impact of the various incentive award

distribution models used by the campuses or districts on key

outcomes in the program [~~programs~~]; and

(4) a summary of the approaches used by participating

campuses or districts in distributing grant funds that are not

specifically designated for distribution as incentive awards for

classroom teachers and an assessment of whether those funds are

used effectively by the participating campuses or districts.

SECTION 40. Section 21.707, Education Code, is amended to

read as follows:

Sec. 21.707. RULES. The commissioner shall adopt rules

necessary to administer this subchapter. The rules may not

establish additional criteria for local awards plans other than

those established by this subchapter, except as necessary to

provide financial accountability for the grants.

SECTION 41. Subchapter A, Chapter 29, Education Code, is

amended by adding Section 29.018 to read as follows:

Sec. 29.018. SPECIAL EDUCATION GRANT. (a) From funds

appropriated for the purposes of this section, federal funds, or

any other funds available, the commissioner shall make grants

available to school districts to assist districts in covering the

cost of educating students with disabilities.

(b) A school district is eligible to apply for a grant under

this section if:

(1) the district does not receive sufficient funds,

including state funds provided under Section 42.151 and federal

funds, for a student with disabilities to pay for the special

education services provided to the student; or

(2) the district does not receive sufficient funds,

including state funds provided under Section 42.151 and federal

funds, for all students with disabilities in the district to pay for

the special education services provided to the students.

section must provide the commissioner with a report comparing the

state and federal funds received by the district for students with

disabilities and the expenses incurred by the district in providing

special education services to students with disabilities.

(d) Expenses that may be included by a school district in

applying for a grant under this section include the cost of training

personnel to provide special education services to a student with

disabilities.

(e) A school district that receives a grant under this

section must educate students with disabilities in the least

restrictive environment that is appropriate to meet the student's

educational needs.

(f) The commissioner shall adopt rules as necessary to

administer this section.

SECTION 42. Section 29.082, Education Code, is amended by

adding Subsection (h) to read as follows:

(h) The commissioner shall give priority to applications

for extended year programs to districts with high concentrations of

educationally disadvantaged students.

SECTION 43. Section 29.0822, Education Code, is amended by

amending Subsections (a), (c), and (d) and adding Subsection (e) to

read as follows:

(a) Notwithstanding Section 25.081 or 25.082, a school

district may apply to the commissioner to provide a flexible school

day program for students [~~in grades nine through 12~~] who:

(1) have dropped out of school or are at risk of

dropping out of school as defined by Section 29.081; [or]

(2) attend a campus that is implementing an innovative

redesign of the campus or an early college high school under a plan

approved by the commissioner; or

(3) as a result of attendance requirements under

Section 25.092, will be denied credit for one or more classes in

which the students have been enrolled.

described by Subsection (a)(3), a [A] course offered in a program

under this section must provide for at least the same number of

instructional hours as required for a course offered in a program

that meets the required minimum number of instructional days under

Section 25.081 and the required length of school day under Section

25.082.

(d) The commissioner may adopt rules for the administration

of this section, including rules establishing application

requirements. The commissioner shall calculate average daily

attendance for students served under this section. The

commissioner shall allow accumulations of hours of instruction for

students whose schedule would not otherwise allow full state

funding. Funding under this subsection shall be determined based

on the number of instructional days in the school district calendar

and a seven-hour school day, but attendance may be cumulated over a

school year, including any summer or vacation session. The

attendance of students who accumulate less than the number of

attendance hours required under this subsection shall be

proportionately reduced for funding purposes. The commissioner

may:

(1) set maximum funding amounts for an individual

course under this section; and

(2) limit funding for the attendance of a student

described by Subsection (a)(3) in a course under this section to

funding only for the attendance necessary for the student to earn

class credit that, as a result of attendance requirements under

Section 25.092, the student would not otherwise be able to receive

without retaking the class.

(e) A student described by Subsection (a)(3) may enroll in a

course in a program under this section offered during the school

year or during the period in which school is recessed for the summer

to enable the student to earn class credit that, as a result of

attendance requirements under Section 25.092, the student would not

otherwise be able to receive without retaking the class.

SECTION 44. Section 29.085, Education Code, is amended by

adding Subsection (e) to read as follows:

(e) From funds appropriated for the purpose, the

commissioner shall distribute funds for programs under this

section. In distributing those funds, the commissioner shall give

preference to school districts that received funds for a program

under this section for the preceding school year and then to the

districts that have the highest concentration of students who are

pregnant or who are parents. To receive funds for a program under

this section, a school district must apply to the commissioner. A

program established under this section is required only in school

districts in which the program is financed by funds distributed

under this subsection and any other funds available for the

program.

SECTION 45. Section 29.097(g), Education Code, is amended

to read as follows:

(g) For purposes of Subsection (f)(2), a school district is

encouraged to use funds allocated under Section 42.160

[~~42.2516(b)(3)~~].

SECTION 46. Section 29.098(h), Education Code, is amended

to read as follows:

(h) For purposes of Subsection (g)(2), a school district is

encouraged to use funds allocated under Section 42.160

[~~42.2516(b)(3)~~].

SECTION 47. Section 29.918(a), Education Code, is amended

to read as follows:

(a) Notwithstanding Section [~~39.114 or~~] 42.152 or 42.160, a

school district or open-enrollment charter school with a high

dropout rate, as determined by the commissioner, must submit a plan

to the commissioner describing the manner in which the district or

charter school intends to use the compensatory education allotment

under Section 42.152 and the high school allotment under Section

42.160 [~~42.2516(b)(3)~~] for developing and implementing

research-based strategies for dropout prevention. The district or

charter school shall submit the plan not later than December 1 of

each school year preceding the school year in which the district or

charter school will receive the compensatory education allotment or

high school allotment to which the plan applies.

SECTION 48. Section 29.919(e), Education Code, is amended

to read as follows:

(e) As a condition of receiving a state grant, a campus must

contribute additional funding for activities provided at the campus

through the program, in an amount equal to at least $100 each school

year for each student in an eligible grade level served through the

program. The additional funding required by this subsection may

consist of local funds, private funds, or state funds other than

grant funds provided under this section. For program activities

provided at the high school level, the high school allotment

provided under Section 42.160 [~~42.2516(b)(3)~~] may be used to meet

the additional funding requirement prescribed by this subsection.

SECTION 49. Section 33.002(a), Education Code, is amended

to read as follows:

(a) From funds appropriated for the purpose or other funds

that may be used for the purpose, the commissioner shall distribute

funds for programs under this subchapter. In distributing those

funds, the commissioner shall give preference to a school district

that received funds under this subsection for the preceding school

year and then to the districts that have the highest concentration

of students at risk of dropping out of school, as described by

Section 29.081. To receive funds for the program, a school district

must apply to the commissioner. For each school year that a school

district receives funds under this subsection, the district shall

allocate an amount of local funds for school guidance and

counseling programs that is equal to or greater than the amount of

local funds that the school district allocated for that purpose

during the preceding school year. This section applies only to a

school district that receives funds as provided by this subsection

[~~Section 42.152(i)~~].

SECTION 50. Sections 39.024(c) and (d), Education Code, are

amended to read as follows:

subsection, the [~~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) Using funds appropriated for purposes of this

subsection, the [~~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.

SECTION 51. Section 39.031, Education Code, is amended to

read as follows:

Sec. 39.031. COST. [~~(a)~~] The cost of preparing,

administering, or grading the assessment instruments and [~~shall be~~

~~paid from the funds allotted under Section 42.152, and each~~

~~district shall bear the cost in the same manner described for a~~

~~reduction in allotments under Section 42.253. If a district does~~

~~not receive an allotment under Section 42.152, the commissioner~~

~~shall subtract the cost from the district's other foundation school~~

~~fund allotments.~~

[~~(b) The cost of~~] releasing the question and answer keys

under Section 39.023(e) shall be paid from amounts appropriated to

the agency.

SECTION 52. The heading to Section 39.114, Education Code,

is amended to read as follows:

Sec. 39.114. USE OF HIGH SCHOOL ALLOTMENT.

SECTION 53. Sections 39.114(a) and (b), Education Code, are

amended to read as follows:

(a) Except as provided by Subsection (b), a school district

or campus must use funds allocated under Section 42.160

[~~42.2516(b)(3)~~] to:

(1) implement or administer a college readiness

program that provides academic support and instruction to prepare

underachieving students for entrance into an institution of higher

education;

(2) implement or administer a program that encourages

students to pursue advanced academic opportunities, including

early college high school programs and dual credit, advanced

placement, and international baccalaureate courses;

(3) implement or administer a program that provides

opportunities for students to take academically rigorous course

work, including four years of mathematics and four years of science

at the high school level;

(4) implement or administer a program, including

online course support and professional development, that aligns the

curriculum for grades six through 12 with postsecondary curriculum

and expectations; or

(5) implement or administer other high school

completion and success initiatives in grades six through 12

approved by the commissioner.

(b) A school district may use funds allocated under Section

42.160 [~~42.2516(b)(3)~~] on any instructional program in grades six

through 12 other than an athletic program if:

(1) the 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 rating of exemplary under Section 39.072.

SECTION 54. Section 41.001, Education Code, is amended to

read as follows:

Sec. 41.001. DEFINITIONS. In this chapter:

(1) "Effective tax rate" has the meaning assigned by

Section 42.010.

(2) "Equalized wealth level" means the wealth per

student provided by Section 41.002.

(3) [~~(2)~~] "Wealth per student" means the taxable value

of property, as determined under Subchapter M, Chapter 403,

Government Code, divided by the number of students in weighted

average daily attendance.

(4) [~~(3)~~] "Weighted average daily attendance" has the

meaning assigned by Section 42.302.

SECTION 55. Subchapter A, Chapter 41, Education Code, is

amended by adding Sections 41.0011 and 41.0012 to read as follows:

Sec. 41.0011. REFERENCES TO TAXABLE VALUE OF DISTRICT

PROPERTY. A reference in this chapter to the taxable value of

property in a district, as determined under Subchapter M, Chapter

403, Government Code, refers to the value for the current year

unless otherwise specified.

Sec. 41.0012. MODIFICATION FOR DISTRICTS WITH SPECIAL LAW

TAXING AUTHORITY. (a) This section applies only to a school

district that imposed a maintenance and operations tax for the 2005

tax year at a rate greater than $1.50 per $100 of taxable value, as

permitted by special law.

(b) For any district to which this section applies, the

commissioner shall implement any provision of this chapter that

refers to a maintenance and operations tax rate equal to the lesser

of $1 or a district's effective rate less six cents, or that makes a

substantially similar reference, as if the provision referred to a

rate equal to the lesser of:

(1) the rate equal to the product of the state

compression percentage multiplied by the maintenance and

operations tax rate adopted by the district for the 2005 tax year;

(2) a district's effective maintenance and operations

tax rate less six cents.

SECTION 56. Section 41.002(a), Education Code, is amended

to read as follows:

(a) A school district may not have a wealth per student that

exceeds:

(1) the wealth per student that generates the amount

of maintenance and operations tax revenue per weighted student

available to a district described by Section 42.101(b) [~~at the 88th~~

~~percentile in wealth per student~~], for the district's maintenance

and operations tax effort equal to or less than an effective tax

rate of the lesser of $1.00 or the rate that is six cents less than

the district's effective maintenance and operations tax rate [~~the~~

~~rate equal to the product of the state compression percentage, as~~

~~determined under Section 42.2516, multiplied by the maintenance and~~

~~operations tax rate adopted by the district for the 2005 tax year~~];

(2) the wealth per student that generates the amount

of maintenance and operations tax revenue per weighted student per

cent of tax effort available to a district under Section 42.302 for

each cent of a district's tax rate other than the last six cents of

that rate [~~the Austin Independent School District, as determined by~~

~~the commissioner in cooperation with the Legislative Budget Board~~],

for [~~the first six cents by which~~] the district's maintenance and

operations tax effort that [~~rate~~] exceeds the tax effort described

by Subdivision (1) [~~rate equal to the product of the state~~

~~compression percentage, as determined under Section 42.2516,~~

~~multiplied by the maintenance and operations tax rate adopted by~~

~~the district for the 2005 tax year, subject to Section 41.093(b-1);~~

[~~(3)~~ ~~$319,500, for the district's maintenance and~~

~~operations tax effort that exceeds the first six cents by which the~~

~~district's maintenance and operations tax effort exceeds the rate~~

~~equal to the product of the state compression percentage, as~~

~~determined under Section 42.2516, multiplied by the maintenance and~~

~~operations tax rate adopted by the district for the 2005 tax year~~].

SECTION 57. Section 41.002(e), Education Code, is amended

to read as follows:

(e) Notwithstanding Subsection (a), [~~and except as provided~~

~~by Subsection (g),~~] in accordance with a determination of the

commissioner, the wealth per student that a school district may

have after exercising an option under Section 41.003(2) or (3) may

not be less than the amount needed to maintain state and local

revenue in an amount equal to state and local revenue per weighted

student for maintenance and operation of the district for the

1992-1993 school year less the district's current year distribution

per weighted student from the available school fund, other than

amounts distributed under Chapter 31, if the district imposes an

effective tax rate for maintenance and operation of the district

equal to the greater of the district's current tax rate or $1.50 on

the $100 valuation of taxable property.

SECTION 58. Subchapter A, Chapter 41, Education Code, is

amended by adding Section 41.0032 to read as follows:

Sec. 41.0032. TOLLING OF ACTION TO ACHIEVE EQUALIZED WEALTH

LEVEL. (a) Notwithstanding any other provision of this chapter, if

a school district would otherwise be required by this chapter to

take action to achieve the equalized wealth level for the first time

for the 2009-2010 or a later school year, the district is not

required to take that action until the following school year.

(b) For purposes of this section, a district is not required

to take action to achieve the equalized wealth level until the cost

to the district to purchase attendance credits under Subchapter D

exceeds the amount to which the district is entitled under Section

42.2516.

section as necessary to provide for a district described by this

section a one-year tolling of the deadlines specified in this

chapter.

SECTION 59. Section 41.093(b-1), Education Code, is amended

to read as follows:

(b-1) If the guaranteed level of state and local funds per

weighted student per cent of tax effort under Section 42.302(g)

[~~42.302(a-1)(2)~~] for which state funds are appropriated for a

school year is an amount at least equal to the amount of revenue per

weighted student per cent of tax effort available to the Austin

Independent School District, as determined by the commissioner in

cooperation with the Legislative Budget Board, the commissioner, in

computing the amounts described by Subsections (a)(1) and (2) and

determining the cost of an attendance credit, shall exclude

maintenance and operations tax revenue resulting from the last

[~~first~~] six cents of [~~by which~~] a district's effective maintenance

and operations tax rate, provided that the district adopts a

maintenance and operations tax rate for that school year at a rate

at least equal to the greater of the rate adopted by the district

for the 2008-2009 school year or the rate equal to the product of

the state compression percentage multiplied by the maintenance and

operations tax rate adopted by the district for the 2005 tax year.

If the district adopts a maintenance and operations tax at a rate

lower than the greater of those rates, the commissioner shall

exclude maintenance and operations tax revenue resulting from the

first six cents by which the district's effective maintenance and

operations tax rate exceeds the rate equal to the product of the

state compression percentage[~~, as determined under Section~~

~~42.2516,~~] multiplied by the maintenance and operations tax rate

adopted by the district for the 2005 tax year.

SECTION 60. Section 41.121, Education Code, is amended to

read as follows:

Sec. 41.121. AGREEMENT. The board of trustees of a district

with a wealth per student that exceeds the equalized wealth level

may execute an agreement to educate the students of another

district in a number that, when the weighted average daily

attendance of the students served is added to the weighted average

daily attendance of the contracting district, is sufficient, in

combination with any other actions taken under this chapter, to

reduce the district's wealth per student to a level that is equal to

or less than the equalized wealth level. The agreement is not

effective unless the commissioner certifies that the transfer of

weighted average daily attendance will not result in any of the

contracting districts' wealth per student being greater than the

equalized wealth level and that the agreement requires an

expenditure per student in weighted average daily attendance that

is at least equal to the amount per student in weighted average

daily attendance required under Section 41.093[~~, unless it is~~

~~determined by the commissioner that a quality educational program~~

~~can be delivered at a lesser amount. The commissioner may approve a~~

~~special financial arrangement between districts if that~~

~~arrangement serves the best educational interests of the state~~].

SECTION 61. Subchapter A, Chapter 42, Education Code, is

amended by adding Sections 42.009, 42.010, and 42.011 to read as

follows:

Sec. 42.009. REFERENCES TO TAXABLE VALUE OF DISTRICT

PROPERTY. A reference in this chapter to the taxable value of

property in a district, as determined under Subchapter M, Chapter

403, Government Code, refers to the value for the current year.

Sec. 42.010. EFFECTIVE TAX RATE. For purposes of this

chapter, a school district's effective tax rate means the rate

determined by dividing the total amount of taxes collected by the

district for the applicable school year less any amounts paid into a

tax increment fund under Chapter 311, Tax Code, by the quotient of

the district's taxable value of property, as determined under

Subchapter M, Chapter 403, Government Code, divided by 100.

Sec. 42.011. MODIFICATION FOR DISTRICTS WITH SPECIAL LAW

TAXING AUTHORITY. (a) This section applies only to a school

district that imposed a maintenance and operations tax for the 2005

tax year at a rate greater than $1.50 per $100 of taxable value, as

permitted by special law.

(b) For any district to which this section applies, the

commissioner shall implement any provision of this chapter that

refers to a maintenance and operations tax rate equal to the lesser

of $1 or a district's effective rate less six cents, or that makes a

substantially similar reference, as if the provision referred to a

rate equal to the lesser of:

(1) the rate equal to the product of the state

compression percentage multiplied by the maintenance and

operations tax rate adopted by the district for the 2005 tax year;

(2) a district's effective maintenance and operations

tax rate less six cents.

SECTION 62. Section 42.101, Education Code, is amended to

read as follows:

Sec. 42.101. BASIC ALLOTMENT. (a) For each student in

average daily attendance, not including the time students spend

each day in special education programs in an instructional

arrangement other than mainstream or career and technology

education programs, for which an additional allotment is made under

Subchapter C, a district is entitled to an allotment in an amount

equal to the product of the amount per student per cent of tax

effort available to a district described by Subsection (b) [~~at the~~

~~percentile in wealth per student specified by Section~~

~~42.302(a-1)(1)~~], multiplied by the lesser of:

(1) the number of cents that is six cents less than the

number of cents in the district's effective maintenance and

operations tax rate; or

(2) 100 [~~86. A greater amount for any school year may~~

~~be provided by appropriation~~].

(b) For purposes of Subsection (a), the commissioner shall

determine the amount per cent of tax effort available to a district

with a taxable value of property equal to the product of the

statewide average taxable value of property per weighted student

multiplied by 0.0001723, or a higher value as specified in the

General Appropriations Act.

SECTION 63. Section 42.106, Education Code, is amended to

read as follows:

Sec. 42.106. TUITION ALLOTMENT [~~ADJUSTED PROPERTY VALUE~~]

FOR DISTRICTS NOT OFFERING ALL GRADE LEVELS. A [~~For purposes of~~

~~this chapter, the taxable value of property of a~~] school district

that contracts for students residing in the district to be educated

in another district under Section 25.039(a) is entitled to receive

an allotment equal to [~~adjusted by applying the formula:~~

[~~ADPV = DPV - (TN/.015)~~

[~~where:~~

[~~"ADPV" is the district's adjusted taxable value of property;~~

[~~"DPV" is the taxable value of property in the district for~~

~~the preceding tax year determined under Subchapter M, Chapter 403,~~

~~Government Code; and~~

[~~"TN" is~~] the total amount of tuition required to be paid by

the district under Section 25.039 [~~for the school year for which the~~

~~adjustment is made~~], not to exceed the amount specified by

commissioner rule under Section 25.039(b).

SECTION 64. Section 42.152(c), Education Code, is amended

to read as follows:

supplemental programs and services designed to eliminate any

disparity in performance on assessment instruments administered

under Subchapter B, Chapter 39, or disparity in the rates of high

school completion between students at risk of dropping out of

school, as defined by Section 29.081, and all other students.

Specifically, the funds, other than an indirect cost allotment

established under State Board of Education rule, which may not

exceed 45 [15] percent, may be used to meet the costs of providing a

compensatory, intensive, or accelerated instruction program under

Section 29.081 or an alternative education program established

under Section 37.008 or to support a program eligible under Title I

of the Elementary and Secondary Education Act of 1965, as provided

by Pub. L. No. 103-382 and its subsequent amendments, and by federal

regulations implementing that Act, at a campus at which at least 40

percent of the students are educationally disadvantaged. In

meeting the costs of providing a compensatory, intensive, or

accelerated instruction program under Section 29.081, a district's

compensatory education allotment shall be used for costs

supplementary to the regular education program, such as costs for

program and student evaluation, instructional materials and

equipment and other supplies required for quality instruction,

supplemental staff expenses, salary for teachers of at-risk

students, smaller class size, and individualized instruction. A

home-rule school district or an open-enrollment charter school must

use funds allocated under Subsection (a) for a purpose authorized

in this subsection but is not otherwise subject to Subchapter C,

Chapter 29. Notwithstanding any other provisions of this section:

(1) to ensure that a sufficient amount of the funds

allotted under this section are available to supplement

instructional programs and services, no more than 18 percent of the

funds allotted under this section may be used to fund disciplinary

alternative education programs established under Section 37.008;

(2) the commissioner may waive the limitations of

Subdivision (1) upon an annual petition, by a district's board and a

district's site-based decision making committee, presenting the

reason for the need to spend supplemental compensatory education

funds on disciplinary alternative education programs under Section

37.008, provided that:

(A) the district in its petition reports the

number of students in each grade level, by demographic subgroup,

not making satisfactory progress under the state's assessment

system; and

(B) the commissioner makes the waiver request

information available annually to the public on the agency's

website; and

(3) for purposes of this subsection, a program

specifically designed to serve students at risk of dropping out of

school, as defined by Section 29.081, is considered to be a program

supplemental to the regular education program, and a district may

use its compensatory education allotment for such a program.

SECTION 65. Subchapter C, Chapter 42, Education Code, is

amended by adding Section 42.1541 to read as follows:

Sec. 42.1541. INDIRECT COST ALLOTMENTS. (a) The State

Board of Education shall by rule increase the indirect cost

allotments established under Sections 42.151(h), 42.152(c),

42.153(b), and 42.154(a-1) and (c) and in effect for the 2008-2009

school year as necessary to reflect the increased percentage of

total maintenance and operations funding represented by the basic

allotment under Section 42.101 as a result of amendment of that

section by H.B. No. 3646, Acts of the 81st Legislature, Regular

Session, 2009.

(b) The board shall take the action required by Subsection

(a) not later than the date that permits the increased indirect cost

allotments to apply beginning with the 2009-2010 school year.

SECTION 66. Section 42.152, Education Code, is amended by

adding Subsections (s), (s-1), (s-2), (s-3), (s-4), and (s-5) to

read as follows:

(s) In addition to the allotment provided under Subsection

(a), a school district is entitled to an annual allotment equal to

$650:

(1) for each student in average daily attendance who

has a parent or guardian who is serving on active duty in a combat

zone as a member of the armed forces of the United States; and

(2) for each student in average daily attendance who:

(A) has a parent or guardian serving on active

duty as a member of the armed forces of the United States; and

(B) has transferred to a campus in the district

during the school year as a result of a change in residence because

of an action taken under the Defense Base Closure and Realignment

Act of 1990 (10 U.S.C. Section 2687).

(s-1) Notwithstanding any other provision of this section,

a school district may use funds allotted to the district under

Subsection (s) only to provide supplemental programs and services

described by Subsection (c) or Subsection (f) for students

described by Subsection (s) who are enrolled in the district.

(s-2) The amount appropriated for allotments under

Subsection (s) may not exceed $9.9 million in a school year. If the

total amount of allotments to which districts are entitled under

Subsection (s) for a school year exceeds the amount appropriated

for allotments under that subsection, the commissioner shall reduce

each district's allotment under that subsection proportionately.

(s-3) Notwithstanding any other provision of this chapter,

payments for allotments under Subsection (s) are made as

adjustments under Section 42.253(i). If the commissioner

determines that the amount appropriated for purposes of the

Foundation School Program exceeds the amount to which school

districts are entitled under this chapter, the commissioner shall

fund the adjustment for the allotments under Subsection (s) from

the excess funds.

(s-4) If the commissioner determines that the amount by

which the funds appropriated for purposes of the Foundation School

Program exceeds the amount to which school districts are entitled

under this chapter is not sufficient to provide for the allotments

under Subsection (s) as limited by Subsection (s-1), the

commissioner shall reduce the number by which the statewide average

taxable value of property per weighted student is multiplied for

purposes of Section 42.101(b) by the amount necessary to provide

the remaining funds. The commissioner shall include amount of the

reduction in the adjustments under Section 42.253(i) in the next

school year.

(s-5) Subsections (s), (s-1), (s-2), (s-3), (s-4), and this

subsection expire September 1, 2013.

SECTION 67. Subchapter C, Chapter 42, Education Code, is

amended by adding Section 42.160 to read as follows:

Sec. 42.160. HIGH SCHOOL ALLOTMENT. (a) A school district

is entitled to an annual allotment in an amount determined by the

commissioner under Subsection (a-1) for each student in weighted

average daily attendance in grades 9 through 12 in the district.

For purposes of this subsection, the number of students in weighted

average daily attendance is calculated by multiplying the number of

students in average daily attendance in grades 9 through 12 in the

district by the ratio for the district of the number of students in

weighted average daily attendance to the number of students in

average daily attendance.

(a-1) The commissioner shall determine the amount of the

allotment provided under Subsection (a) so that the total state

cost of funding the allotment equals the total state cost of funding

the allotment that would have resulted if the allotment were

provided in the amount of $275 for each student in average daily

attendance in grades 9 through 12 in the district.

(b) A school district that is required to take action under

Chapter 41 to reduce its wealth per student to the equalized wealth

level is entitled to a credit, in the amount of the allotment to

which the district is entitled under this section, against the

total amount required under Section 41.093 for the district to

purchase attendance credits. A school district that is otherwise

ineligible for state aid under this chapter is entitled to receive

allotments under this section.

SECTION 68. Subchapter E, Chapter 42, Education Code, is

amended by adding Section 42.25151 to read as follows:

Sec. 42.25151. ADJUSTMENT FOR SUPPLEMENTAL PAYMENTS

ASSOCIATED WITH AGREEMENTS UNDER TEXAS ECONOMIC DEVELOPMENT ACT.

(a) In this section, "supplemental payment" means a payment or

other benefit, other than a revenue protection payment authorized

by Section 313.027(f)(1), Tax Code, provided in connection with an

agreement between a property owner and a school district under

Chapter 313, Tax Code, by or on behalf of the property owner to:

(1) the district; or

(2) a foundation or other entity created to benefit

the district or the district's students.

(b) Notwithstanding Section 42.2516, the commissioner shall

for any school year, subject to Subsection (b-1):

(1) reduce the amounts due to a school district under

this chapter by an amount equal to the value of any supplemental

payment received during that school year by the district or a

foundation or other entity created to benefit the district or the

district's students; or

(2) increase the amounts necessary for a school

district to comply with the requirements of Chapter 41 by an amount

equal to the value of any supplemental payments received during

that school year by the district or a foundation or other entity

created to benefit the district or the district's students.

(b-1) Each school year, a school district is entitled to

retain a total benefit from supplemental payments not to exceed the

amounts authorized in Sections 313.027(i) and (j), Tax Code.

(1) report each supplemental payment through the

Public Education Information Management System (PEIMS); and

(2) clearly identify each supplemental payment in the

district's adopted budget and in the annual report required by

Section 44.007.

(d) The commissioner, in consultation with the comptroller,

as appropriate, may adopt rules necessary to implement this

section.

(e) This section does not apply to supplemental payments

made in connection with an agreement entered into before September

1, 2009.

SECTION 69. Section 42.2516, Education Code, is amended by

amending Subsections (a), (a-1), (b), (b-1), (b-2), (c), (e), (f),

(f-1), and (g) and adding Subsections (a-2), (b-3), (b-4), (e-1),

(h-1), and (m) to read as follows:

(a) In this section, "state compression percentage" means

the percentage, as determined by the commissioner in consultation

with the Legislative Budget Board, of a school district's adopted

maintenance and operations tax rate for the 2005 tax year that

serves as the basis for state funding for tax rate reduction under

this section. The commissioner, in consultation with the

Legislative Budget Board, shall determine the state compression

percentage for each school year based on the percentage by which a

district is able to reduce the district's maintenance and

operations tax rate for that year, as compared to the district's

adopted maintenance and operations tax rate for the 2005 tax year,

as a result of state funds appropriated for distribution under this

section for that year from the property tax relief fund established

under Section 403.109, Government Code, or from another funding

source available for school district property tax relief.

(a-1) For the state fiscal year ending August 31, 2009, the

state compression percentage is 66.67 percent. For each subsequent

state fiscal year, the state compression percentage is the lesser

of:

(1) the percentage determined in accordance with

Subsection (a); or

(2) the state compression percentage for the preceding

state fiscal year.

(a-2) Not later than March 1 of each year, the commissioner

shall:

(1) inform school districts of the state compression

percentage for the following school year; and

(2) post the state compression percentage for the

following school year on the agency's website. [~~Subsection (a)~~

~~applies beginning with the state fiscal year ending August 31,~~

~~2009.~~ ~~For the state fiscal year ending August 31, 2007, the state~~

~~compression percentage is 88.67 percent.~~ ~~For the state fiscal year~~

~~ending August 31, 2008, the state compression percentage is 66.67~~

~~percent.~~ ~~This subsection expires September 1, 2009.~~]

(b) Subject to Subsections (b-1), (b-2), (b-3), (b-4),

(f-1), (g), and (h-1) [~~(h)~~] but notwithstanding any other provision

of this title, a school district is entitled to state revenue

necessary to provide the district with [~~the sum of~~]:

(1) the amount of state revenue necessary to maintain

state and local revenue per student in weighted average daily

attendance in the amount at least equal to [~~the greater of:~~

[~~(A)~~] the amount of state and local revenue per

student in weighted average daily attendance for the maintenance

and operations of the district available to the district for the

2008-2009 [~~2005-2006~~] school year for the district's maintenance

and operations tax rate equal to the product of the state

compression percentage multiplied by the maintenance and

operations tax rate adopted by the district for the 2005 tax year;

and

(2) an amount equal to the difference, if any, between

the amount of maintenance and operations revenue the district is

required to pay into the tax increment fund for a reinvestment zone

under Section 311.013(n), Tax Code, meeting the criteria under

Section 403.302(d)(4), Government Code, in the current tax year and

the amount of maintenance and operations revenue collected by the

district in the reinvestment zone at the district's compressed tax

rate[;

[~~(B)~~ ~~the amount of state and local revenue per~~

~~student in weighted average daily attendance for the maintenance~~

~~and operations of the district to which the district would have been~~

~~entitled for the 2006-2007 school year under this chapter, as it~~

~~existed on January 1, 2006, or, if the district would have been~~

~~subject to Chapter 41, as that chapter existed on January 1, 2006,~~

~~the amount to which the district would have been entitled under that~~

~~chapter, based on the funding elements in effect for the 2005-2006~~

~~school year, if the district imposed a maintenance and operations~~

~~tax at the rate adopted by the district for the 2005 tax year; or~~

[~~(C)~~ ~~the amount of state and local revenue per~~