82R30876 E
	By: Ogden	S.B. No. 1581
	(Aycock)
	Substitute the following for S.B. No. 1581:  No.

	A BILL TO BE ENTITLED
1-1	AN ACT
1-2	relating to state fiscal matters, and certain administrative and
1-3	business matters, related to public and higher education.
1-4	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5	ARTICLE 1.  ADMINISTRATIVE MATTERS CONCERNING INSTITUTIONS OF
1-6	HIGHER EDUCATION
1-7	SECTION 1.01.  Section 51.003, Education Code, is amended by
1-8	amending Subsection (b) and adding Subsection (f) to read as
1-9	follows:
1-10	(b)  The funds shall either be deposited in the depository
1-11	bank or banks or invested as authorized by Chapter 2256, Government
1-12	Code (Public Funds Investment Act). Funds that are to be deposited
1-13	in the depository bank or banks must be deposited within seven days
1-14	from the date of receipt by the institution [collection].
1-15	(f)  Notwithstanding any other provision of this section,
1-16	the governing board of each institution may maintain unsecured
1-17	deposits in a foreign bank as necessary to support the
1-18	institution's operations in a foreign country. The foreign bank
1-19	must:
1-20	(1)  be licensed and supervised by a central bank;
1-21	(2)  be audited annually by an accounting firm that
1-22	follows international financial reporting standards; and
1-23	(3)  maintain a capital to total assets ratio that is
1-24	not less than the greater of four percent or the minimum tier 1
2-1	capital to total assets ratio required for depository institutions
2-2	insured by the Federal Deposit Insurance Corporation.
2-3	SECTION 1.02.  Subchapter A, Chapter 51, Education Code, is
2-4	amended by amending Section 51.005 and adding Sections 51.010,
2-5	51.011, and 51.012 to read as follows:
2-6	Sec. 51.005.  REPORTS. Each institution of higher education
2-7	[(a)     True and full accounts shall be kept by the governing board
2-8	and by the employees of the institution of all funds collected from
2-9	all sources and of all sums paid out and the persons to whom and the
2-10	purposes for which the sums are paid. The governing board] shall
2-11	prepare [annually print] a complete annual financial report as
2-12	prescribed by Section 2101.011, Government Code [of all the sums
2-13	collected, all expenditures, and all sums remaining on hand. The
2-14	report shall show the true condition of all funds as of the August
2-15	31 preceding as well as the collections and expenditures for the
2-16	preceding year.
2-17	[(b)     Reports under this section must be in a form approved
2-18	jointly by the coordinating board and the comptroller. The
2-19	accounting and classification procedures of each institution must
2-20	be consistent with uniform procedures prescribed for that purpose
2-21	by the coordinating board and the comptroller. The requirements
2-22	imposed by the coordinating board and the comptroller must be
2-23	designed to reduce paperwork and duplicative reports.
2-24	[(c)     The governing board shall furnish one copy of the
2-25	report each to the governor, comptroller of public accounts, state
2-26	auditor, Texas Higher Education Coordinating Board, Legislative
2-27	Budget Board, House Appropriations Committee, Senate Finance
3-1	Committee, and Legislative Reference Library. A copy of the report
3-2	shall be submitted to the comptroller by the deadline established
3-3	by the comptroller or the General Appropriations Act as necessary
3-4	to prepare an audited comprehensive financial report.   The
3-5	governing board shall retain five copies of the report for
3-6	distribution to legislators or other state officials on request].
3-7	Sec. 51.010.  COLLECTION OF DELINQUENT OBLIGATIONS. If
3-8	under the rules adopted by the attorney general under Chapter 2107,
3-9	Government Code, an institution of higher education is not required
3-10	to refer a delinquent obligation for collection to the attorney
3-11	general, the institution is not required to expend resources for
3-12	further collection efforts if, considering the amount, security,
3-13	likelihood of collection, expense, and available resources, the
3-14	institution determines that further collection should not be
3-15	actively pursued.
3-16	Sec. 51.011.  DISPOSITION OF SMALL CREDIT BALANCES.
3-17	(a)  This section applies to a credit balance of less than $25 held
3-18	by an institution of higher education that is presumed abandoned
3-19	under Chapter 72, Property Code.
3-20	(b)  An institution of higher education may maintain an
3-21	unclaimed money fund and transfer to that fund a credit balance to
3-22	which this section applies.  A deposit to the unclaimed money fund
3-23	does not affect the ownership of the amount deposited. The
3-24	institution shall:
3-25	(1)  adopt procedures for owners to make and receive
3-26	payments of claims against the fund; and
3-27	(2)  maintain a database that permits members of the
4-1	public to search for ownership of unclaimed funds.
4-2	(c)  The institution shall use the fund to pay the claims of
4-3	persons establishing ownership of amounts transferred to the fund
4-4	and shall hold and account for the unclaimed money fund as
4-5	educational and general funds of the institution. If the fund
4-6	balance is insufficient to pay a valid claim, the institution shall
4-7	pay the claim from the institution's other educational and general
4-8	funds.
4-9	(d)  Each fiscal year, after deducting funds sufficient to
4-10	pay anticipated expenses of and claims against the unclaimed money
4-11	fund, the institution shall use the balance of the fund as other
4-12	educational and general funds of the institution.
4-13	(e)  In consultation with institutions of higher education,
4-14	the comptroller by rule may establish minimum requirements for
4-15	notice to owners of unclaimed money deposited in the unclaimed
4-16	money fund and for charges for that notice. The rules may not
4-17	provide stricter requirements than the comptroller applies for
4-18	amounts of less than $25 in the custody of the comptroller under
4-19	Chapter 74, Property Code.
4-20	(f)  If an institution of higher education maintains an
4-21	unclaimed money fund under this section, Chapter 74, Property Code,
4-22	does not apply to a credit balance to which this section applies.
4-23	Sec. 51.012.  PAYMENTS BY ELECTRONIC FUNDS TRANSFER OR
4-24	ELECTRONIC PAY CARD. An institution of higher education may make
4-25	any payment, including a payment of salary or wages, through
4-26	electronic funds transfer or by electronic pay card.
4-27	SECTION 1.03.  Section 65.42, Education Code, is amended to
5-1	read as follows:
5-2	Sec. 65.42.  DELINQUENT ACCOUNTS; VENUE. A suit by The
5-3	University of Texas System on its own behalf or on behalf of a
5-4	component institution of The University of Texas System to recover
5-5	a delinquent loan, account, or debt owed to The University of Texas
5-6	System or a component institution of The University of Texas System
5-7	must [may] be brought in Travis County.
5-8	SECTION 1.04.  Section 1231.001, Government Code, is amended
5-9	by amending Subdivision (2) and adding Subdivision (3) to read as
5-10	follows:
5-11	(2)  "State security" means:
5-12	(A)  an obligation, including a bond, issued by:
5-13	(i)  a state agency;
5-14	(ii)  an entity that is expressly created by
5-15	statute and has statewide jurisdiction; or
5-16	(iii)  an entity issuing the obligation on
5-17	behalf of this state or on behalf of an entity described by
5-18	Subparagraph (i) or (ii);
5-19	(B)  an installment sale or lease-purchase
5-20	obligation that is issued by or on behalf of an entity described by
5-21	Paragraph (A) and that has:
5-22	(i)  a stated term of more than five years;
5-23	or
5-24	(ii)  an initial principal amount of more
5-25	than $250,000; or
5-26	(C)  an obligation, including a bond, that is
5-27	issued under Chapter 53, Education Code, at the request of or for
6-1	the benefit of an institution of higher education [as defined by
6-2	Section 61.003, Education Code,] other than a public junior
6-3	college.
6-4	(3)  "Institution of higher education" has the meaning
6-5	assigned by Section 61.003, Education Code.
6-6	SECTION 1.05.  Section 1231.041, Government Code, is amended
6-7	to read as follows:
6-8	Sec. 1231.041.  APPROVAL OF STATE SECURITY. (a)  Except as
6-9	otherwise provided by this section, an [An] entity, including a
6-10	state agency, may not issue a state security unless:
6-11	(1)  the board approves the issuance; or
6-12	(2)  the security is exempted under law, including a
6-13	board rule adopted under Section 1231.022(2).
6-14	(b)  A state security issued by an institution of higher
6-15	education, or issued at the request of or for the benefit of an
6-16	institution of higher education, is not subject to board approval
6-17	unless the general revenue of the state is pledged to the payment of
6-18	the security.
6-19	SECTION 1.06.  Section 74.001, Property Code, is amended by
6-20	adding Subsection (c) to read as follows:
6-21	(c)  This chapter does not apply to small credit balances
6-22	held by an institution of higher education in an unclaimed money
6-23	fund under Section 51.011, Education Code.
6-24	SECTION 1.07.  Section 51.923, Education Code, is amended to
6-25	read as follows:
6-26	Sec. 51.923.  QUALIFICATIONS OF CERTAIN BUSINESS ENTITIES TO
6-27	ENTER INTO CONTRACTS WITH AN INSTITUTION OF HIGHER EDUCATION.
7-1	(a)  In this section:
7-2	(1)  "Business entity" ["Corporation"] means any
7-3	entity recognized by law through which business is conducted,
7-4	including a sole proprietorship, partnership, firm, corporation,
7-5	limited liability company, holding company, joint stock company,
7-6	receivership, or trust [a corporation for profit organized under
7-7	the laws of this state or under laws other than the laws of this
7-8	state].
7-9	(2)  "Governing board" has the meaning assigned by
7-10	Section 61.003 [of this code].
7-11	(3)  "Institution of higher education" has the meaning
7-12	assigned by Section 61.003 [of this code].
7-13	(4)  "Nonprofit corporation" means any organization
7-14	exempt from federal income tax under Section 501 of the Internal
7-15	Revenue Code of 1986 that does not distribute any part of its income
7-16	to any member, director, or officer.
7-17	(b)  A nonprofit corporation is not disqualified from
7-18	entering into a contract or other transaction with an institution
7-19	of higher education even though one or more members of the governing
7-20	board of the institution of higher education also serves as a
7-21	member, [or] director, officer, or employee of the nonprofit
7-22	corporation.
7-23	(c)  A business entity [corporation] is not disqualified
7-24	from entering into a contract or other transaction with an
7-25	institution of higher education even though one or more members of
7-26	the governing board of the institution of higher education have an
7-27	interest in the business entity, subject to Subsection (d) [also
8-1	serves as a stockholder or director of the corporation provided
8-2	that no member of the governing board owns or has a beneficial
8-3	interest in more than five percent of the corporation's outstanding
8-4	capital stock and further provided that the contract or transaction
8-5	is:
8-6	[(1)     an affiliation, licensing, or sponsored research
8-7	agreement; or
8-8	[(2)     awarded by competitive bidding or competitive
8-9	sealed proposals].
8-10	(d)  An institution of higher education is not prohibited
8-11	from entering into a contract or other transaction with a business
8-12	entity in which a member of the governing board of the institution
8-13	of higher education has an interest if the interest is not a
8-14	substantial interest or, if the interest is a substantial interest,
8-15	the [described in this section if any] board member [having an
8-16	interest described in this section in the contract or transaction]
8-17	discloses that interest in a meeting held in compliance with
8-18	Chapter 551, Government Code, and refrains from voting on the
8-19	contract or transaction requiring board approval. Any such
8-20	contract or transaction requiring board approval must be approved
8-21	by an affirmative majority of the board members voting on the
8-22	contract or transaction.
8-23	(e)  For purposes of this section, a member of a governing
8-24	board has a substantial interest in a business entity if:
8-25	(1)  the member owns 10 percent or more of the voting
8-26	stock or shares of the business entity or owns either 10 percent or
8-27	more or $15,000 or more of the fair market value of the business
9-1	entity;
9-2	(2)  funds received by the member from the business
9-3	entity exceed 10 percent of the member's gross income for the
9-4	previous year;
9-5	(3)  the member is an officer of the business entity or
9-6	a member of the governing board of the business entity; or
9-7	(4)  an individual related to the member in the first
9-8	degree by consanguinity or affinity, as determined under Chapter
9-9	573, Government Code, has an interest in the business entity as
9-10	described by Subdivision (1), (2), or (3).
9-11	(f)  A violation of this section does not render an action of
9-12	the governing board voidable unless the contract or transaction
9-13	that was the subject of the action would not have been approved by
9-14	the governing board without the vote of the member who violated this
9-15	section.
9-16	SECTION 1.08.  Section 51.9335, Education Code, is amended
9-17	by amending Subsections (d) and (f) and adding Subsections (g) and
9-18	(h) to read as follows:
9-19	(d)  Subtitle D, Title 10, Government Code, and Subchapter B,
9-20	Chapter 2254, Government Code, do not apply to the acquisition of
9-21	goods and services under this section, except that an institution
9-22	of higher education must comply with any provision of those laws, or
9-23	a rule adopted under a provision of those laws, [To the extent of
9-24	any conflict, this section prevails over any other law, including
9-25	Chapters 2155, 2156, 2157, 2158, 2167, and 2170, Government Code,
9-26	except a law or rule] relating to contracting with historically
9-27	underutilized businesses or relating to the procurement of goods
10-1	and services from persons with disabilities.  An institution of
10-2	higher education may, but is not required to, acquire goods or
10-3	services as provided by Subtitle D, Title 10 [Chapters 2155, 2156,
10-4	2157, 2158, 2167, and 2170], Government Code.
10-5	(f)  This section does not apply to professional services as
10-6	defined by Section 2254.002, Government Code.  Professional
10-7	services shall be procured in accordance with Subchapter A, Chapter
10-8	2254, Government Code.
10-9	(g)  An institution of higher education may adopt rules and
10-10	procedures for the acquisition of goods or services.
10-11	(h)  In any contract for the acquisition of goods and
10-12	services to which an institution of higher education is a party, a
10-13	provision required by applicable law to be included in the contract
10-14	is considered to be a part of the executed contract without regard
10-15	to:
10-16	(1)  whether the provision appears on the face of the
10-17	contract; or
10-18	(2)  whether the contract includes any provision to the
10-19	contrary.
10-20	SECTION 1.09.  Subchapter Z, Chapter 51, Education Code, is
10-21	amended by adding Sections 51.9336 and 51.9337 to read as follows:
10-22	Sec. 51.9336.  ELECTRONIC AND DIGITAL SIGNATURES. (a)  An
10-23	institution of higher education or university system, as those
10-24	terms are defined by Section 61.003, shall determine whether, and
10-25	the extent to which, the institution or system will send and accept
10-26	electronic or digital signatures to and from other persons and
10-27	otherwise create, generate, communicate, store, process, use, and
11-1	rely on electronic or digital signatures. The institution or
11-2	system may adopt rules and procedures governing the use of
11-3	electronic or digital signatures.
11-4	(b)  To the extent of any conflict, this section prevails
11-5	over Chapter 322, Business & Commerce Code, and rules and
11-6	guidelines adopted under that chapter.
11-7	Sec. 51.9337.  INTERAGENCY CONTRACTS FOR INFORMATION
11-8	RESOURCE TECHNOLOGIES.  (a)  In this section, "institution of
11-9	higher education" and "university system" have the meanings
11-10	assigned by Section 61.003.
11-11	(b)  Section 2054.119, Government Code, does not apply to an
11-12	interagency contract for information resources technologies
11-13	between two or more institutions of higher education or between an
11-14	institution of higher education or university system and one or
11-15	more state agencies, institutions of higher education, or
11-16	university systems.
11-17	SECTION 1.10.  Section 51.966, Education Code, is amended by
11-18	amending Subsection (c) and adding Subsection (d) to read as
11-19	follows:
11-20	(c)  Section 612.002(b), Government Code, does not apply to
11-21	an institution of higher education or university system purchasing
11-22	insurance under this section.
11-23	(d)  In [As used in] this section, "governing board," [and]
11-24	"institution of higher education," and "university system" have the
11-25	meanings assigned by Section 61.003.
11-26	SECTION 1.11.  Subchapter C, Chapter 791, Government Code,
11-27	is amended by adding Section 791.035 to read as follows:
12-1	Sec. 791.035.  CONTRACTS WITH INSTITUTIONS OF HIGHER
12-2	EDUCATION OR UNIVERSITY SYSTEMS. (a)  A local government and an
12-3	institution of higher education or university system may contract
12-4	with one another to perform any governmental functions and
12-5	services. If the terms of the contract provide for payment based on
12-6	cost recovery, any law otherwise requiring competitive procurement
12-7	does not apply to the functions and services covered by the
12-8	contract.
12-9	(b)  In this section, "institution of higher education" and
12-10	"university system" have the meanings assigned by Section 61.003,
12-11	Education Code.
12-12	SECTION 1.12.  Section 2054.008, Government Code, is amended
12-13	by adding Subsection (c) to read as follows:
12-14	(c)  A university system or institution of higher education
12-15	must provide written notice to the Legislative Budget Board under
12-16	Subsection (b) only if the cost of the major information system
12-17	exceeds $1 million. In this subsection, "university system" has
12-18	the meaning assigned by Section 61.003, Education Code.
12-19	SECTION 1.13.  Subsection (n), Section 2155.078, Government
12-20	Code, is amended to read as follows:
12-21	(n)  This section does not apply to an institution [a medical
12-22	and dental unit] to which Section 51.9335, Education Code, applies
12-23	or to an institution to which Section 73.115, Education Code,
12-24	applies.
12-25	SECTION 1.14.  Subchapter Z, Chapter 51, Education Code, is
12-26	amended by adding Section 51.9611 to read as follows:
12-27	Sec. 51.9611.  PAYROLL DEDUCTIONS FOR EMPLOYEES OF
13-1	UNIVERSITY SYSTEM OR INSTITUTION OF HIGHER EDUCATION. (a)  In this
13-2	section, "institution of higher education" and "university system"
13-3	have the meanings assigned by Section 61.003.
13-4	(b)  The governing board of a university system, or of an
13-5	institution of higher education that is not a component institution
13-6	of a university system, may authorize employees of the system or
13-7	institution, as applicable, to elect a payroll deduction for any
13-8	purpose that the governing board determines serves a public purpose
13-9	and benefits employees.  The board may adopt policies and
13-10	procedures governing payroll deductions under this section.  A
13-11	payroll deduction under this section is in addition to payroll
13-12	deductions authorized by other law.
13-13	(c)  A payroll deduction under this section must be at the
13-14	written request of the employee, and the request must state the
13-15	amount to be deducted and the entity to which the deducted amount is
13-16	to be transferred. A payroll deduction is in effect until revoked
13-17	in writing by the employee, but the policies and procedures of the
13-18	system or institution, as applicable, may provide for enrollment
13-19	periods.
13-20	(d)  A university system or institution of higher education
13-21	may collect an administrative fee to cover the costs of making a
13-22	deduction.
13-23	SECTION 1.15.  Subsection (a), Section 1601.004, Insurance
13-24	Code, is amended to read as follows:
13-25	(a)  In this chapter, "dependent," with respect to an
13-26	individual eligible to participate in the uniform program under
13-27	Section 1601.101 or 1601.102, means the individual's:
14-1	(1)  spouse;
14-2	(2)  unmarried child younger than 25 years of age; and
14-3	(3)  child of any age who the system determines lives
14-4	with or has the child's care provided by the individual on a regular
14-5	basis if the child is mentally retarded or physically incapacitated
14-6	to the extent that the child is dependent on the individual for care
14-7	or support, as determined by the system, and:
14-8	(A)  if the child is at least 25 years of age, the
14-9	child's coverage under this chapter has not lapsed, and the child
14-10	was enrolled as a participant in the health benefits coverage under
14-11	the uniform program on the date of the child's 25th birthday; or
14-12	(B)  if the child is a child of an individual
14-13	eligible to participate as an employee under Section 1601.101, at
14-14	the time of the individual's initial enrollment in health benefits
14-15	coverage under the uniform program the child is at least 25 years of
14-16	age and is enrolled in comparable coverage, as determined by the
14-17	system, under the individual's previous health benefits coverage.
14-18	SECTION 1.16.  Subchapter C, Chapter 1601, Insurance Code,
14-19	is amended by adding Section 1601.111 to read as follows:
14-20	Sec. 1601.111.  PROGRAMS PROMOTING DISEASE PREVENTION,
14-21	WELLNESS, AND HEALTH.  A system may establish premium discounts,
14-22	surcharges, rebates, or a revision in otherwise applicable
14-23	copayments, coinsurance, or deductibles, or any combination of
14-24	those incentives, for an individual who participates in
14-25	system-approved programs promoting disease prevention, wellness,
14-26	and health.
14-27	SECTION 1.17.  Subsection (d), Section 1601.201, Insurance
15-1	Code, is amended to read as follows:
15-2	(d)  Subsection (c) does not prohibit a system from
15-3	contributing, from money not appropriated from the general revenue
15-4	fund, amounts in excess of the amount specified by that subsection
15-5	for:
15-6	(1)  an individual employed by the system in a position
15-7	that as a condition of employment requires the individual to be
15-8	enrolled as a student in the system in graduate level courses; or
15-9	(2)  an individual who is a tenured faculty member with
15-10	whom the system has entered into a phased retirement agreement
15-11	under which the individual will work less than 40 hours a week for a
15-12	specified period of time at the end of which the individual will
15-13	retire.
15-14	SECTION 1.18.  Subchapter C, Chapter 61, Education Code, is
15-15	amended by adding Section 61.0573 to read as follows:
15-16	Sec. 61.0573.  PROJECTS EXEMPT FROM BOARD APPROVAL. (a)  In
15-17	this section, "project" means the acquisition of improved or
15-18	unimproved real property or the construction, repair, or
15-19	rehabilitation of a building or other facility.
15-20	(b)  Board approval of a project at an institution of higher
15-21	education is not required under Section 61.0572 or 61.058 if the
15-22	institution notifies the board of the project and certifies to the
15-23	board that:
15-24	(1)  the institution meets the current published board
15-25	standards applicable to the institution for space need, usage
15-26	efficiency, deferred maintenance, and critical deferred
15-27	maintenance or the board has approved the institution's plan to
16-1	correct any deficiencies in the institution's compliance with those
16-2	applicable standards;
16-3	(2)  the project meets current published board
16-4	standards applicable to the project for cost, efficiency, and space
16-5	use;
16-6	(3)  the project is identified on the institution's
16-7	campus master plan, as submitted to the board; and
16-8	(4)  the institution has no deficiencies according to
16-9	the board's most recent facilities audit or the board has approved
16-10	the institution's plan to correct any such deficiencies.
16-11	(c)  The board's staff shall promptly review a certification
16-12	submitted under Subsection (b) and notify the institution whether
16-13	the certification is sufficient and whether the information
16-14	certified is consistent with the records of the board. If the staff
16-15	review determines that the certification is sufficient and that the
16-16	information certified is consistent with the records of the board,
16-17	the project is considered approved by the board.
16-18	(d)  This section does not apply to a project that is a new
16-19	branch campus or a new higher education center.
16-20	SECTION 1.19.  Subsection (c), Section 2166.302, Government
16-21	Code, is amended to read as follows:
16-22	(c)  Subsection (a) does not apply to a project constructed
16-23	by and for the Texas Department of Transportation or an institution
16-24	of higher education or university system. In this subsection,
16-25	"institution of higher education" and "university system" have the
16-26	meanings assigned by Section 61.003, Education Code.
16-27	SECTION 1.20.  Subsection (c-1), Section 2166.403,
17-1	Government Code, is amended to read as follows:
17-2	(c-1)  For a project constructed by and for a state
17-3	institution of higher education, the [governing body of the]
17-4	institution shall, during the planning phase of the proposed
17-5	construction for the project, verify [in an open meeting] the
17-6	economic feasibility of incorporating into the building's design
17-7	and proposed energy system alternative energy devices for space
17-8	heating and cooling functions, water heating functions, electrical
17-9	load functions, and interior lighting functions.  The [governing
17-10	body of the] institution shall determine the economic feasibility
17-11	of each function listed in this subsection by comparing the
17-12	estimated cost of providing energy for the function, based on the
17-13	use of conventional design practices and energy systems, with the
17-14	estimated cost of providing energy for the function, based on the
17-15	use of alternative energy devices, during the economic life of the
17-16	building.
17-17	SECTION 1.21.  Subsection (b), Section 2167.001, Government
17-18	Code, is amended to read as follows:
17-19	(b)  This chapter does not apply to:
17-20	(1)  radio antenna space;
17-21	(2)  residential space for a Texas Department of Mental
17-22	Health and Mental Retardation program;
17-23	(3)  residential space for a Texas Youth Commission
17-24	program;
17-25	(4)  space to be used for less than one month for
17-26	meetings, conferences, conventions, seminars, displays,
17-27	examinations, auctions, or similar purposes;
18-1	(5)  district office space for members of the
18-2	legislature;
18-3	(6)  space used by the Texas Workforce Commission;
18-4	(7)  residential property acquired by the Texas
18-5	Department of Housing and Community Affairs or the Texas State
18-6	Affordable Housing Corporation that is offered for sale or rental
18-7	to individuals and families of low or very low income or families of
18-8	moderate income;
18-9	(8)  except as provided by Section 2167.007, [classroom
18-10	and instructional] space for a university system or [an]
18-11	institution of higher education; or
18-12	(9)  space leased by the Texas Veterans Commission to
18-13	administer the veterans employment services program.
18-14	SECTION 1.22.  Section 33.06, Tax Code, is amended by adding
18-15	Subsection (g) to read as follows:
18-16	(g)  If the ownership interest of an individual entitled to a
18-17	deferral under this section is a life estate, a lien for the
18-18	deferred tax attaches to the estate of the life tenant, and not to
18-19	the remainder interest, if the owner of the remainder is an
18-20	institution of higher education that has not consented to the
18-21	deferral.  In this subsection, "institution of higher education"
18-22	has the meaning assigned by Section 61.003, Education Code.  This
18-23	subsection does not apply to a deferral for which the individual
18-24	entitled to the deferral filed the affidavit required by Subsection
18-25	(b) before September 1, 2011.
18-26	SECTION 1.23.  Section 552.123, Government Code, is amended
18-27	to read as follows:
19-1	Sec. 552.123.  EXCEPTION: NAME OF APPLICANT FOR CHIEF
19-2	EXECUTIVE OFFICER OF INSTITUTION OF HIGHER EDUCATION. The name of
19-3	an applicant for the position of chief executive officer of an
19-4	institution of higher education, and other information that would
19-5	tend to identify the applicant, is excepted from the requirements
19-6	of Section 552.021, except that the governing body of the
19-7	institution must give public notice of the name or names of the
19-8	finalists being considered for the position at least 21 days before
19-9	the date of the meeting at which final action or vote is to be taken
19-10	on the employment of the person.
19-11	SECTION 1.24.  Subsection (b), Section 95.006, Health and
19-12	Safety Code, is amended to read as follows:
19-13	(b)  The advisory committee is composed of:
19-14	(1)  the following representatives appointed by the
19-15	executive director of the office:
19-16	(A)  one representative of the office;
19-17	(B)  one representative of the Texas Education
19-18	Agency;
19-19	(C)  one representative of the Texas Pediatric
19-20	Society;
19-21	(D)  one representative of the American Diabetes
19-22	Association;
19-23	(E)  [one representative who is a member of the
19-24	board of regents of The University of Texas--Pan American;
19-25	[(F)]  one school nurse representative from an
19-26	urban school located within the boundaries of a regional education
19-27	service center;
20-1	(F) [(G)]  one parent or guardian of a child who
20-2	resides within the boundaries of a regional education service
20-3	center; and
20-4	(G) [(H)]  one person with knowledge and
20-5	experience in health care in school settings; and
20-6	(2)  the following representatives appointed by the
20-7	chairman of the council:
20-8	(A)  one representative of the council;
20-9	(B)  one representative of the Texas Medical
20-10	Association;
20-11	(C)  one school district administrator
20-12	representative from a school district located within the boundaries
20-13	of a regional education service center;
20-14	(D)  one school principal representative from a
20-15	school district located within the boundaries of a regional
20-16	education service center; and
20-17	(E)  one school nurse representative from a rural
20-18	school located within the boundaries of a regional education
20-19	service center.
20-20	SECTION 1.25.  Subsections (a) and (c), Section 2.03,
20-21	Chapter 670, Acts of the 72nd Legislature, Regular Session, 1991
20-22	(Article 4477-7j, Vernon's Texas Civil Statutes), are amended to
20-23	read as follows:
20-24	(a)  On or after the effective date of this Act, the
20-25	Commissioners Court of Gaines County shall appoint three persons,
20-26	the governing body of the city of Seminole shall appoint two
20-27	persons, and the governing body of the city of Seagraves shall
21-1	appoint two persons to serve as initial directors of the district.
21-2	The four persons appointed by the governing bodies of the cities of
21-3	Seminole and Seagraves shall represent the municipalities within
21-4	the county, and the three persons appointed by the Commissioners
21-5	Court of Gaines County shall represent the unincorporated areas of
21-6	the county. [In addition, the board of regents of The University of
21-7	Texas System shall appoint one person to serve as an ex-officio,
21-8	nonvoting director of the district.]
21-9	(c)  The Commissioners Court of Gaines County and the
21-10	governing bodies of the cities of Seminole and Seagraves shall each
21-11	appoint one initial director to serve a term expiring on May 1 of
21-12	the first year after the year in which the original appointment is
21-13	made. In addition, the Commissioners Court of Gaines County shall
21-14	appoint two initial directors and the governing bodies of the
21-15	cities of Seminole and Seagraves shall each appoint one initial
21-16	director to serve terms expiring on May 1 of the second year after
21-17	the year in which the original appointment is made. [The initial
21-18	ex-officio member serves a term expiring on May 1 of the second year
21-19	after the year in which the original appointment is made.]
21-20	Successor directors serve two-year terms.
21-21	SECTION 1.26.  Subsection (a), Section 3.01, Chapter 670,
21-22	Acts of the 72nd Legislature, Regular Session, 1991 (Article
21-23	4477-7j, Vernon's Texas Civil Statutes), is amended to read as
21-24	follows:
21-25	(a)  The district is governed by a board of directors
21-26	composed of seven voting members [and one ex-officio nonvoting
21-27	member] who are appointed as provided by this Act.  However, the
22-1	district shall change to a system of electing the voting directors
22-2	if:
22-3	(1)  the Commissioners Court of Gaines County and the
22-4	governing bodies of the cities of Seminole and Seagraves each pass a
22-5	resolution calling for the election of the directors; or
22-6	(2)  the board receives a petition signed by at least
22-7	150 registered voters of Gaines County calling for the election of
22-8	the directors.
22-9	SECTION 1.27.  Subsection (d), Section 51.403, Education
22-10	Code, is amended to read as follows:
22-11	(d)  For purposes of this subsection, "small classes" [Each
22-12	institution shall file with its governing board and the
22-13	coordinating board a small class report, excluding individual
22-14	instruction courses, indicating department, course number, title
22-15	of course, and the name of the instructor. "Small classes," for the
22-16	purpose of this report,] are undergraduate-level courses with less
22-17	than 10 registrations, and graduate-level courses with less than 5
22-18	registrations. No small classes shall be offered in any
22-19	institution except as authorized by the appropriate governing
22-20	board, within the guidelines established by the Coordinating Board.
22-21	SECTION 1.28.  Subchapter H, Chapter 51, Education Code, is
22-22	amended by adding Section 51.406 to read as follows:
22-23	Sec. 51.406.  EXPIRATION OF CERTAIN REPORTING REQUIREMENTS
22-24	APPLICABLE TO INSTITUTIONS OF HIGHER EDUCATION AND UNIVERSITY
22-25	SYSTEMS. (a)  In this section, "university system" has the meaning
22-26	assigned by Section 61.003.
22-27	(b)  To the extent that any of the following laws require
23-1	reporting by a university system or an institution of higher
23-2	education, a university system or institution of higher education
23-3	is not required to make the report on or after September 1, 2013,
23-4	unless legislation enacted by the 83rd Legislature that becomes law
23-5	expressly requires the institution or system to make the report:
23-6	(1)  Section 7.109;
23-7	(2)  Section 33.083;
23-8	(3)  Section 51.0051;
23-9	(4)  Section 59.07;
23-10	(5)  Section 130.086;
23-11	(6)  Section 325.007, Government Code;
23-12	(7)  Section 669.003, Government Code;
23-13	(8)  Section 2005.007, Government Code;
23-14	(9)  Section 2052.103, Government Code;
23-15	(10)  Section 2054.097, Government Code;
23-16	(11)  Section 2101.011, Government Code;
23-17	(12)  Section 2102.009, Government Code;
23-18	(13)  Chapter 2114, Government Code; and
23-19	(14)  Section 2205.041, Government Code.
23-20	(c)  A rule or policy of a state agency, including the Texas
23-21	Higher Education Coordinating Board, in effect on June 1, 2011,
23-22	that requires reporting by a university system or an institution of
23-23	higher education has no effect on or after September 1, 2013, unless
23-24	the rule or policy is affirmatively and formally readopted before
23-25	that date by formal administrative rule published in the Texas
23-26	Register and adopted in compliance with Chapter 2001, Government
23-27	Code.  This subsection does not apply to:
24-1	(1)  a rule or policy for which the authorizing statute
24-2	is listed in Subsection (b);
24-3	(2)  a rule or policy for which the authorizing statute
24-4	is repealed on or before September 1, 2013, by legislation enacted
24-5	by the legislature that becomes law; or
24-6	(3)  a report required under any of the following laws:
24-7	(A)  Section 51.005;
24-8	(B)  Section 51.3062;
24-9	(C)  Section 51.402;
24-10	(D)  Section 56.039;
24-11	(E)  Section 61.051(k);
24-12	(F)  Section 61.059; or
24-13	(G)  Section 62.095(b).
24-14	SECTION 1.29.  Section 51.914, Education Code, is amended to
24-15	read as follows:
24-16	Sec. 51.914.  PROTECTION OF CERTAIN INFORMATION.  (a)  In
24-17	order to protect the actual or potential value, the following
24-18	information is [shall be] confidential and is [shall] not [be]
24-19	subject to disclosure under Chapter 552, Government Code, or
24-20	otherwise:
24-21	(1)  all information relating to a product, device, or
24-22	process, the application or use of such a product, device, or
24-23	process, and all technological and scientific information
24-24	(including computer programs) developed in whole or in part at a
24-25	state institution of higher education, regardless of whether
24-26	patentable or capable of being registered under copyright or
24-27	trademark laws, that have a potential for being sold, traded, or
25-1	licensed for a fee;
25-2	(2)  any information relating to a product, device, or
25-3	process, the application or use of such product, device, or
25-4	process, and any technological and scientific information
25-5	(including computer programs) that is the proprietary information
25-6	of a person, partnership, corporation, or federal agency that has
25-7	been disclosed to an institution of higher education solely for the
25-8	purposes of a written research contract or grant that contains a
25-9	provision prohibiting the institution of higher education from
25-10	disclosing such proprietary information to third persons or
25-11	parties; or
25-12	(3)  the plans, specifications, blueprints, and
25-13	designs, including related proprietary information, of a
25-14	scientific research and development facility that is jointly
25-15	financed by the federal government and a local government or state
25-16	agency, including an institution of higher education, if the
25-17	facility is designed and built for the purposes of promoting
25-18	scientific research and development and increasing the economic
25-19	development and diversification of this state.
25-20	(b)  Information maintained by or for an institution of
25-21	higher education that would reveal the institution's plans or
25-22	negotiations for commercialization or research, or that consists of
25-23	unpublished research results or data, is not subject to Chapter
25-24	552, Government Code, unless the information has been published, is
25-25	patented, or is otherwise subject to an executed license, sponsored
25-26	research agreement, or research contract or grant.  In this
25-27	subsection, "institution of higher education" has the meaning
26-1	assigned by Section 61.003.
26-2	SECTION 1.30.  Subsection (h), Section 61.051, Education
26-3	Code, is amended to read as follows:
26-4	(h)  The board shall make continuing studies of the needs of
26-5	the state for research and designate the institutions of higher
26-6	education to perform research as needed. The board shall also
26-7	maintain an inventory of all institutional and programmatic
26-8	research activities being conducted by the various institutions,
26-9	whether state-financed or not. Once a year, on dates prescribed by
26-10	the board, each institution of higher education shall report to the
26-11	board all research conducted at that institution during the last
26-12	preceding year. The submission by an institution of the
26-13	institution's response to the National Science Foundation's annual
26-14	Higher Education Research and Development Survey satisfies the
26-15	requirements of this section. All reports required by this
26-16	subsection shall be made subject to the limitations imposed by
26-17	security regulations governing defense contracts for research.
26-18	SECTION 1.31.  Section 61.0582, Education Code, is amended
26-19	by adding Subsection (f) to read as follows:
26-20	(f)  This section does not apply to a university system that
26-21	maintains an ongoing system-wide capital improvement program
26-22	approved by the system's board of regents.
26-23	SECTION 1.32.  Section 130.152, Education Code, is amended
26-24	to read as follows:
26-25	Sec. 130.152.  CRITERIA FOR PROGRAMS FOR THE DISADVANTAGED.
26-26	A junior college may develop programs to serve persons from
26-27	backgrounds of economic or educational deprivation by submission of
27-1	a plan based on the following criteria to the Texas Higher Education
27-2	Coordinating Board[, Texas College and University System]:
27-3	(1)  an instructional program that accommodates the
27-4	different learning rates of students and compensates for prior
27-5	economic and educational deprivation;
27-6	(2)  an unrestricted admissions policy allowing the
27-7	enrollment of any person 18 years of age or older with a high school
27-8	diploma or its equivalent who can reasonably be expected to benefit
27-9	from instruction;
27-10	(3)  the assurance that all students, regardless of
27-11	their differing programs of study, will be considered, known, and
27-12	recognized as full members of the student body, provided that the
27-13	administrative officers of a junior college may deny admission to a
27-14	prospective student or attendance of an enrolled student if, in
27-15	their judgment, the person [he] would not be competent to benefit
27-16	from a program of the college, or would by the person's [his]
27-17	presence or conduct create a disruptive atmosphere within the
27-18	college not consistent with the statutory purposes of the college;
27-19	(4)  [the submission of a plan for a financial aid
27-20	program which removes to the maximum extent possible the financial
27-21	barriers to the educational aspirations of the citizens of this
27-22	state;
27-23	[(5)     an annual evaluation report based on scientific
27-24	methods and utilizing control groups wherever possible to be
27-25	submitted to the coordinating board at the end of each school year,
27-26	covering each remedial-compensatory course or program offered at
27-27	the college;
28-1	[(6)]  any other criteria consistent with the
28-2	provisions of this subchapter specified by the coordinating board;
28-3	and
28-4	(5) [(7)]  a junior college must obtain approval of the
28-5	coordinating board [Coordinating Board, Texas College and
28-6	University System,] before offering any courses under the
28-7	provisions of this Act.
28-8	SECTION 1.33.  Section 401.042, Government Code, is amended
28-9	by adding Subsection (c) to read as follows:
28-10	(c)  In consultation with public institutions of higher
28-11	education, the offices of the governor and the Legislative Budget
28-12	Board shall review the forms for higher education legislative
28-13	appropriations requests to identify opportunities to improve
28-14	efficiency, provide better transparency of funding sources,
28-15	eliminate unnecessary or duplicative requirements, and otherwise
28-16	reduce the cost or difficulty of providing information related to
28-17	appropriations requests.
28-18	SECTION 1.34.  Subchapter L, Chapter 403, Government Code,
28-19	is amended by adding Section 403.2715 to read as follows:
28-20	Sec. 403.2715.  UNIVERSITY SYSTEMS AND INSTITUTIONS OF
28-21	HIGHER EDUCATION. (a)  In this section, "institution of higher
28-22	education" and "university system" have the meanings assigned by
28-23	Section 61.003, Education Code.
28-24	(b)  Except as provided by this section, this subchapter does
28-25	not apply to a university system or institution of higher
28-26	education.
28-27	(c)  A university system or institution of higher education
29-1	shall account for all personal property as defined by the
29-2	comptroller under Section 403.272.  At all times, the property
29-3	records of a university system or institution of higher education
29-4	must accurately reflect the personal property possessed by the
29-5	system or institution.
29-6	(d)  The chief executive officer of each university system or
29-7	institution of higher education shall designate one or more
29-8	property managers. The property manager shall maintain the records
29-9	required and be the custodian of all personal property possessed by
29-10	the system or institution.
29-11	(e)  Sections 402.273(h), 403.275, and 403.278 apply to a
29-12	university system or institution of higher education.
29-13	SECTION 1.35.  Subsection (d), Section 2101.0115,
29-14	Government Code, is amended by adding Subdivision (4) to read as
29-15	follows:
29-16	(4)  "Institution of higher education" and "university
29-17	system" have the meanings assigned by Section 61.003, Education
29-18	Code.
29-19	SECTION 1.36.  Section 2101.0115, Government Code, is
29-20	amended by adding Subsection (e) to read as follows:
29-21	(e)  This section does not apply to an institution of higher
29-22	education or university system.
29-23	SECTION 1.37.  Subsection (c), Section 2254.028, Government
29-24	Code, is amended to read as follows:
29-25	(c)  Subsection (a) [(a)(3)] does not apply to a major
29-26	consulting services contract to be entered into by an institution
29-27	of higher education other than a public junior college if the
30-1	institution includes in the invitation published under Section
30-2	2254.029 a finding by the chief executive officer of the
30-3	institution that the consulting services are necessary and an
30-4	explanation of that finding.
30-5	SECTION 1.38.  Section 2254.0301, Government Code, is
30-6	amended to read as follows:
30-7	Sec. 2254.0301.  CONTRACT NOTIFICATION. (a)  A state agency
30-8	shall provide written notice to the Legislative Budget Board of a
30-9	contract for consulting services if the amount of the contract,
30-10	including an amendment, modification, renewal, or extension of the
30-11	contract, exceeds $14,000.  The notice must be on a form prescribed
30-12	by the Legislative Budget Board and filed not later than the 10th
30-13	day after the date the entity enters into the contract.
30-14	(b)  This section does not apply to a university system or
30-15	institution of higher education. In this subsection, "institution
30-16	of higher education" and "university system" have the meanings
30-17	assigned by Section 61.003, Education Code.
30-18	SECTION 1.39.  Subsection (f), Section 388.005, Health and
30-19	Safety Code, is amended to read as follows:
30-20	(f)  This section does not apply to a state agency or an
30-21	institution of higher education that the State Energy Conservation
30-22	Office determines [that], before September 1, 2007, adopted a plan
30-23	for conserving energy under which the agency or institution
30-24	established a percentage goal for reducing the consumption of
30-25	electricity.  The exemption provided by this section applies only
30-26	while the agency or institution has an energy conservation plan in
30-27	effect and only if the agency or institution submits reports on the
31-1	conservation plan each year [calendar quarter] to the governor, the
31-2	Legislative Budget Board, and the State Energy Conservation Office.
31-3	SECTION 1.40.  Section 412.053, Labor Code, is amended by
31-4	adding Subsection (c) to read as follows:
31-5	(c)  This section does not apply to an institution of higher
31-6	education or university system. In this subsection, "institution
31-7	of higher education" and "university system" have the meanings
31-8	assigned by Section 61.003, Education Code.
31-9	SECTION 1.41.  Subsection (d), Section 31.153, Natural
31-10	Resources Code, is amended to read as follows:
31-11	(d)  Each state agency, other than an institution of higher
31-12	education, annually at the time set by the division, shall furnish
31-13	the Texas Historical Commission with a photograph and information
31-14	that specifies and identifies the age of each building:
31-15	(1)  that was acquired by the agency after the date of
31-16	the preceding annual submission and that is at least 45 years old on
31-17	the date of the current submission; or
31-18	(2)  that is possessed by the agency and has become 45
31-19	years old since the date the information was previously submitted.
31-20	SECTION 1.42.  (a)  The following laws are repealed
31-21	effective September 1, 2011:
31-22	(1)  Section 51.216, Education Code;
31-23	(2)  Subsections (b) and (c), Section 51.403, Education
31-24	Code;
31-25	(3)  Section 51.4033, Education Code;
31-26	(4)  Section 61.0815, Education Code;
31-27	(5)  Section 61.086, Education Code;
32-1	(6)  Subsection (c), Section 61.087, Education Code;
32-2	(7)  Section 62.098, Education Code;
32-3	(8)  Section 1434.054, Government Code;
32-4	(9)  Section 2107.005, Government Code;
32-5	(10)  Subsection (c), Section 412.042, Labor Code; and
32-6	(11)  Subsection (c), Section 3.01, Chapter 670, Acts
32-7	of the 72nd Legislature, Regular Session, 1991 (Article 4477-7j,
32-8	Vernon's Texas Civil Statutes).
32-9	(b)  The following provisions of the Education Code are
32-10	repealed effective September 1, 2013:
32-11	(1)  Section 51.859;
32-12	(2)  Subsection (e), Section 51.917;
32-13	(3)  Subsection (d), Section 51.968;
32-14	(4)  Subsection (h), Section 54.203;
32-15	(5)  Subsection (c), Section 56.034;
32-16	(6)  Subsection (j), Section 56.079;
32-17	(7)  Subsection (c), Section 61.066;
32-18	(8)  Subsection (d), Section 63.003;
32-19	(9)  Section 63.004;
32-20	(10)  Section 63.103;
32-21	(11)  Subsection (m), Section 86.52;
32-22	(12)  Section 88.210;
32-23	(13)  Section 106.54;
32-24	(14)  Section 142.005;
32-25	(15)  Section 143.006;
32-26	(16)  Section 147.005;
32-27	(17)  Section 148.005; and
33-1	(18)  Section 153.008.
33-2	SECTION 1.43.  (a)  This section governs a conflict between
33-3	this article and any other Act of the 82nd Legislature, Regular
33-4	Session, 2011, without regard to the relative dates of enactment.
33-5	(b)  If this article and any other Act repeal the same
33-6	statute, the earlier effective date of repeal controls.
33-7	(c)  If this article amends a statute that any other Act
33-8	repeals, the repeal controls.
33-9	SECTION 1.44.  Section 51.011, Education Code, as added by
33-10	this article, applies to credit balances held by a public
33-11	institution of higher education on or after the effective date of
33-12	this article.
33-13	SECTION 1.45.  This article takes effect immediately if this
33-14	Act receives a vote of two-thirds of all the members elected to each
33-15	house, as provided by Section 39, Article III, Texas Constitution.
33-16	If this Act does not receive the vote necessary for immediate
33-17	effect, this article takes effect September 1, 2011.
33-18	ARTICLE 2.  FISCAL MATTERS CONCERNING ADVANCED PLACEMENT
33-19	SECTION 2.01.  Subsection (h), Section 28.053, Education
33-20	Code, is amended to read as follows:
33-21	(h)  The commissioner may enter into agreements with the
33-22	college board and the International Baccalaureate Organization to
33-23	pay for all examinations taken by eligible public school students.
33-24	An eligible student is a student [one] who:
33-25	(1)  takes a college advanced placement or
33-26	international baccalaureate course at a public school or who is
33-27	recommended by the student's principal or teacher to take the test;
34-1	and
34-2	(2)  demonstrates financial need as determined in
34-3	accordance with guidelines adopted by the board that are consistent
34-4	with the definition of financial need adopted by the college board
34-5	or the International Baccalaureate Organization.
34-6	ARTICLE 3.  FISCAL MATTERS CONCERNING EARLY HIGH SCHOOL GRADUATION
34-7	SECTION 3.01.  Subchapter K, Chapter 56, Education Code, is
34-8	amended by adding Section 56.2012 to read as follows:
34-9	Sec. 56.2012.  EXPIRATION OF SUBCHAPTER; ELIGIBILITY
34-10	CLOSED. (a)  This subchapter expires September 1, 2017.
34-11	(b)  Notwithstanding Section 56.203, a person may not
34-12	receive an award under this subchapter if the person graduates from
34-13	high school on or after September 1, 2011.
34-14	SECTION 3.02.  Subsection (b), Section 54.213, Education
34-15	Code, is amended to read as follows:
34-16	(b)  [Savings to the foundation school fund that occur as a
34-17	result of the Early High School Graduation Scholarship program
34-18	created in Subchapter K, Chapter 56, and that are not required for
34-19	the funding of state credits for tuition and mandatory fees under
34-20	Section 56.204 or school district credits under Section 56.2075
34-21	shall be used first to provide tuition exemptions under Section
34-22	54.212. Any of those savings remaining after providing tuition
34-23	exemptions under Section 54.212 shall be used to provide tuition
34-24	exemptions under Section 54.214.] The Texas Education Agency shall
34-25	[also] accept and make available to provide tuition exemptions
34-26	under Section 54.214 gifts, grants, and donations made to the
34-27	agency for that purpose.  The commissioner of education shall
35-1	transfer those funds to the Texas Higher Education Coordinating
35-2	Board to distribute to institutions of higher education that
35-3	provide exemptions under that section  [Payment of funds under this
35-4	subsection shall be made in the manner provided by Section 56.207
35-5	for state credits under Subchapter K, Chapter 56].
35-6	SECTION 3.03.  Section 56.210, Education Code, is repealed.
35-7	ARTICLE 4.  FISCAL MATTERS CONCERNING TUITION EXEMPTIONS
35-8	SECTION 4.01.  Subsection (c), Section 54.214, Education
35-9	Code, is amended to read as follows:
35-10	(c)  To be eligible for an exemption under this section, a
35-11	person must:
35-12	(1)  be a resident of this state;
35-13	(2)  be a school employee serving in any capacity;
35-14	(3)  for the initial term or semester for which the
35-15	person receives an exemption under this section, have worked as an
35-16	educational aide for at least one school year during the five years
35-17	preceding that term or semester;
35-18	(4)  establish financial need as determined by
35-19	coordinating board rule;
35-20	(5)  be enrolled at the institution of higher education
35-21	granting the exemption in courses required for teacher
35-22	certification in one or more subject areas determined by the Texas
35-23	Education Agency to be experiencing a critical shortage of teachers
35-24	at the public schools in this state [at the institution of higher
35-25	education granting the exemption];
35-26	(6)  maintain an acceptable grade point average as
35-27	determined by coordinating board rule; and
36-1	(7)  comply with any other requirements adopted by the
36-2	coordinating board under this section.
36-3	SECTION 4.02.  The change in law made by this article applies
36-4	beginning with tuition and fees charged for the 2011 fall semester.
36-5	Tuition and fees charged for a term or semester before the 2011 fall
36-6	semester are covered by the law in effect during the term or
36-7	semester for which the tuition and fees are charged, and the former
36-8	law is continued in effect for that purpose.
36-9	ARTICLE 5.  FISCAL MATTERS CONCERNING CERTAIN DISTRIBUTIONS TO
36-10	INSTITUTIONS OF HIGHER EDUCATION
36-11	SECTION 5.01.  Subchapter A, Chapter 63, Education Code, is
36-12	amended by adding Section 63.0035 to read as follows:
36-13	Sec. 63.0035.  PARTIAL LIQUIDATION OF INSTITUTION'S SHARE;
36-14	DISTRIBUTION OF FUND AFTER LIQUIDATION. (a)  Subject to
36-15	appropriation of the appropriate amounts, the board of regents of
36-16	The University of Texas System shall transfer to each institution
36-17	that is entitled in a state fiscal year to receive a distribution
36-18	from the permanent fund established under this subchapter a
36-19	one-time liquidation distribution for the state fiscal year ending
36-20	August 31, 2012, and, for that fiscal year and each subsequent
36-21	fiscal year, a reduced annual distribution as provided by this
36-22	section.
36-23	(b)  The board of regents of The University of Texas System,
36-24	not later than November 1, 2011, shall:
36-25	(1)  calculate the amount of each liquidation
36-26	distribution in accordance with this section; and
36-27	(2)  provide to all institutions entitled to receive a
37-1	distribution from the permanent fund established under this
37-2	subchapter written notice specifying:
37-3	(A)  the amount of the liquidation distribution to
37-4	be made to each institution in the state fiscal year ending August
37-5	31, 2012; and
37-6	(B)  the amounts of the other distributions to be
37-7	made in that fiscal year to each institution under this section from
37-8	the per capita account and the formula account described by
37-9	Subsection (c).
37-10	(c)  As soon as practicable after the beginning of the state
37-11	fiscal year ending August 31, 2012, the permanent fund shall be
37-12	segregated into two accounts, the per capita account and the
37-13	formula account. Notwithstanding any other law, distributions in
37-14	that fiscal year and in subsequent fiscal years shall be made in
37-15	accordance with this section and not in accordance with Section
37-16	63.003(a). The amount segregated into the per capita account is
37-17	equal to 70 percent of the total value of the fund at the end of the
37-18	preceding state fiscal year.  The formula account is composed of the
37-19	remaining 30 percent of that total value at the end of that
37-20	preceding fiscal year.
37-21	(d)  A liquidation distribution is an amount equal to
37-22	one-third of the institution's fractional share of the value of the
37-23	per capita account. An institution's fractional share of the per
37-24	capita account is determined by multiplying the amount segregated
37-25	into the per capita account by a fraction, the numerator of which is
37-26	one and the denominator of which is the number of institutions that
37-27	are entitled to receive a distribution from the permanent fund
38-1	established under this subchapter.
38-2	(e)  In the state fiscal year ending August 31, 2012, and in
38-3	each subsequent fiscal year, the annual amount appropriated for
38-4	distribution from the investment of the per capita account shall be
38-5	distributed in equal shares to each institution.
38-6	(e-1)  Subsection (e) does not apply to the amounts
38-7	distributed as liquidation distributions in the state fiscal year
38-8	ending August 31, 2012.
38-9	(f)  In each state fiscal year in which distributions are
38-10	made from the per capita account under Subsection (e), the amount
38-11	appropriated for distribution from the investment of the formula
38-12	account shall be distributed in equal portions with respect to each
38-13	of the following categories, with each institution receiving a
38-14	share in each category proportionate to the amount that the
38-15	institution spent in that category in the preceding state fiscal
38-16	biennium as determined by the institution's annual financial
38-17	report, compared to the total spending of all institutions listed
38-18	in Section 63.002(c) in that category in the preceding biennium:
38-19	(1)  instructional expenditures;
38-20	(2)  research expenditures; and
38-21	(3)  unsponsored charity care.
38-22	(g)  Except as otherwise provided by this section:
38-23	(1)  Section 63.003(b) applies to amounts appropriated
38-24	for distribution under Subsections (e) and (f) of this section; and
38-25	(2)  Sections 63.003(c) and (d) apply to amounts
38-26	appropriated for distribution under Subsection (f) of this section.
38-27	(h)  The comptroller in consultation with the board of
39-1	regents of The University of Texas System shall establish
39-2	procedures to implement this section. A liquidation distribution
39-3	shall be made in accordance with those procedures and in
39-4	consultation with the institutions receiving the liquidation
39-5	distribution.
39-6	(i)  Any direct costs associated with liquidation
39-7	distributions, including discounts on investment dispositions and
39-8	related expenses realized by the permanent fund, shall be deducted
39-9	in equal portions from the amounts of the liquidation
39-10	distributions. The procedures established under Subsection (h)
39-11	must provide for the minimization of any costs associated with
39-12	making the liquidation distributions considering the liquidity of
39-13	the investment assets of the fund.
39-14	(j)  Notwithstanding other provisions of this subchapter,
39-15	the amount distributed to an institution under this section as a
39-16	liquidation distribution is under the exclusive control of the
39-17	governing board of the institution and may be used by the
39-18	institution in any manner for any lawful purpose. The comptroller
39-19	shall establish procedures to ensure that a liquidation
39-20	distribution to Baylor College of Medicine is used for public
39-21	purposes consistent with a contract in effect under Section 61.092.
39-22	SECTION 5.02.  Subsection (d), Section 63.003, Education
39-23	Code, is amended to read as follows:
39-24	(d)  For the purposes of this section or Section 63.0035,
39-25	Baylor College of Medicine may receive funds [under Subsection
39-26	(a)(2)] only if the institution provides the comptroller with an
39-27	independently audited schedule of information that substantially
40-1	complies with the reporting requirements issued by the comptroller
40-2	for other eligible institutions [under Subsection (a)(2)].
40-3	Information under this subsection must be supplied not later than
40-4	the time other eligible institutions are required to submit similar
40-5	information.
40-6	ARTICLE 6.  FISCAL MATTERS CONCERNING DUAL HIGH SCHOOL AND JUNIOR
40-7	COLLEGE CREDIT
40-8	SECTION 6.01.  Subsection (c), Section 130.008, Education
40-9	Code, is amended to read as follows:
40-10	(c)  The contact hours attributable to the enrollment of a
40-11	high school student in a course offered for joint high school and
40-12	junior college credit under this section, excluding a course for
40-13	which the student attending high school may receive course credit
40-14	toward the physical education curriculum requirement under Section
40-15	28.002(a)(2)(C), shall be included in the contact hours used to
40-16	determine the junior college's proportionate share of the state
40-17	money appropriated and distributed to public junior colleges under
40-18	Sections 130.003 and 130.0031, even if the junior college waives
40-19	all or part of the tuition or fees for the student under Subsection
40-20	(b).
40-21	SECTION 6.02.  This article applies beginning with funding
40-22	for the 2011 fall semester.
40-23	ARTICLE 7.  FISCAL MATTERS CONCERNING THE STATE COMPRESSION
40-24	PERCENTAGE
40-25	SECTION 7.01.  Section 42.2516, Education Code, is amended
40-26	by adding Subsection (b-2) to read as follows:
40-27	(b-2)  If a school district adopts a maintenance and
41-1	operations tax rate that is below the rate equal to the product of
41-2	the state compression percentage multiplied by the maintenance and
41-3	operations tax rate adopted by the district for the 2005 tax year,
41-4	the commissioner shall reduce the district's entitlement under this
41-5	section in proportion to the amount by which the adopted rate is
41-6	less than the rate equal to the product of the state compression
41-7	percentage multiplied by the rate adopted by the district for the
41-8	2005 tax year. The reduction required by this subsection applies
41-9	beginning with the maintenance and operations tax rate adopted for
41-10	the 2009 tax year.
41-11	ARTICLE 8.  FISCAL MATTERS RELATING TO PUBLIC SCHOOL
41-12	FINANCE AND PREKINDERGARTEN PROGRAMS
41-13	SECTION 8.01.  Effective September 1, 2011, Section 12.106,
41-14	Education Code, is amended by amending Subsection (a) and adding
41-15	Subsection (a-3) to read as follows:
41-16	(a)  A charter holder is entitled to receive for the
41-17	open-enrollment charter school funding under Chapter 42 equal to
41-18	the greater of:
41-19	(1)  the percentage specified by Section 42.2516(i)
41-20	multiplied by the amount of funding per student in weighted average
41-21	daily attendance, excluding enrichment funding under Sections
41-22	42.302(a-1)(2) and (3), as they existed on January 1, 2009, that
41-23	would have been received for the school during the 2009-2010 school
41-24	year under Chapter 42 as it existed on January 1, 2009, and an
41-25	additional amount of the percentage specified by Section 42.2516(i)
41-26	multiplied by $120 for each student in weighted average daily
41-27	attendance; or
42-1	(2)  the amount of funding per student in weighted
42-2	average daily attendance, excluding enrichment funding under
42-3	Section 42.302(a), to which the charter holder would be entitled
42-4	for the school under Chapter 42 if the school were a school district
42-5	without a tier one local share for purposes of Section 42.253 and
42-6	without any local revenue for purposes of Section 42.2516.
42-7	(a-3)  In determining funding for an open-enrollment charter
42-8	school under Subsection (a), the commissioner shall apply the
42-9	regular program adjustment factor provided under Section 42.101 to
42-10	calculate the regular program allotment to which a charter school
42-11	is entitled.
42-12	SECTION 8.02.  Effective September 1, 2016, Subsection (a),
42-13	Section 12.106, Education Code, is amended to read as follows:
42-14	(a)  A charter holder is entitled to receive for the
42-15	open-enrollment charter school funding under Chapter 42 equal to
42-16	[the greater of:
42-17	[(1)     the amount of funding per student in weighted
42-18	average daily attendance, excluding enrichment funding under
42-19	Sections 42.302(a-1)(2) and (3), as they existed on January 1,
42-20	2009, that would have been received for the school during the
42-21	2009-2010 school year under Chapter 42 as it existed on January 1,
42-22	2009, and an additional amount of $120 for each student in weighted
42-23	average daily attendance; or
42-24	[(2)]  the amount of funding per student in weighted
42-25	average daily attendance, excluding enrichment funding under
42-26	Section 42.302(a), to which the charter holder would be entitled
42-27	for the school under Chapter 42 if the school were a school district
43-1	without a tier one local share for purposes of Section 42.253 [and
43-2	without any local revenue for purposes of Section 42.2516].
43-3	SECTION 8.03.  Effective September 1, 2011, Section 21.402,
43-4	Education Code, is amended by amending Subsections (a), (b), (c),
43-5	and (c-1) and adding Subsection (i) to read as follows:
43-6	(a)  Except as provided by Subsection (d)[, (e),] or (f), a
43-7	school district must pay each classroom teacher, full-time
43-8	librarian, full-time counselor certified under Subchapter B, or
43-9	full-time school nurse not less than the minimum monthly salary,
43-10	based on the employee's level of experience in addition to other
43-11	factors, as determined by commissioner rule, determined by the
43-12	following formula:
43-13	MS = SF x FS
43-14	where:
43-15	"MS" is the minimum monthly salary;
43-16	"SF" is the applicable salary factor specified by Subsection
43-17	(c); and
43-18	"FS" is the amount, as determined by the commissioner under
43-19	Subsection (b), of the basic allotment as provided by Section
43-20	42.101 (a) or (b) for a school district with a maintenance and
43-21	operations tax rate at least equal to the state maximum compressed
43-22	tax rate, as defined by Section 42.101 (a) [state and local funds
43-23	per weighted student, including funds provided under Section
43-24	42.2516, available to a district eligible to receive state
43-25	assistance under Section 42.302 with a maintenance and operations
43-26	tax rate per $100 of taxable value equal to the product of the state
43-27	compression percentage, as determined under Section 42.2516,
44-1	multiplied by $1.50, except that the amount of state and local funds
44-2	per weighted student does not include the amount attributable to
44-3	the increase in the guaranteed level made by Chapter 1187, Acts of
44-4	the 77th Legislature, Regular Session, 2001].
44-5	(b)  Not later than June 1 of each year, the commissioner
44-6	shall determine the basic allotment and resulting monthly salaries
44-7	to be paid by school districts as provided by Subsection (a) [amount
44-8	of state and local funds per weighted student available, for
44-9	purposes of Subsection (a), to a district described by that
44-10	subsection for the following school year].
44-11	(c)  The salary factors per step are as follows:
44-12
44-13	0 1 2 3 4
44-14
44-15	.5464 [.6226] .5582 [.6360] .5698 [.6492] .5816 [.6627] .6064 [.6909]
44-16
44-17	5 6 7 8 9
44-18
44-19	.6312 [.7192] .6560 [.7474] .6790 [.7737] .7008 [.7985] .7214 [.8220]
44-20
44-21	10 11 12 13 14
44-22
44-23	.7408 [.8441] .7592 [.8650] .7768 [.8851] .7930 [.9035] .8086 [.9213]
44-24
44-25	15 16 17 18 19
44-26
44-27	.8232 [.9380] .8372 [.9539] .8502 [.9687] .8626 [.9828] .8744 [.9963]
44-28
44-29
44-30
44-31	.8854 [1.009]
44-32	(c-1)  Notwithstanding Subsections [Subsection] (a) and
44-33	(b)[, for the 2009-2010 and 2010-2011 school years], each school
44-34	district shall pay a monthly salary to [increase the monthly salary
44-35	of] each classroom teacher, full-time speech pathologist,
44-36	full-time librarian, full-time counselor certified under
44-37	Subchapter B, and full-time school nurse that is at least equal to
45-1	the following monthly salary or the monthly salary determined by
45-2	the commissioner under Subsections (a) and (b), whichever is [by
45-3	the] greater [of]:
45-4	Years of Monthly
45-5	Experience Salary
45-6	0 2,732
45-7	1 2,791
45-8	2 2,849
45-9	3 2,908
45-10	4 3,032
45-11	5 3,156
45-12	6 3,280
45-13	7 3,395
45-14	8 3,504
45-15	9 3,607
45-16	10 3,704
45-17	11 3,796
45-18	12 3,884
45-19	13 3,965
45-20	14 4,043
45-21	15 4,116
45-22	16 4,186
45-23	17 4,251
45-24	18 4,313
45-25	19 4,372
45-26	20 & Over 4,427
45-27	[(1)  $80; or
46-1	[(2)     the maximum uniform amount that, when combined with any
46-2	resulting increases in the amount of contributions made by the
46-3	district for social security coverage for the specified employees
46-4	or by the district on behalf of the specified employees under
46-5	Section 825.405, Government Code, may be provided using an amount
46-6	equal to the product of $60 multiplied by the number of students in
46-7	weighted average daily attendance in the school during the
46-8	2009-2010 school year.]
46-9	(i)  Not later than January 1, 2013, the commissioner shall
46-10	submit to the governor, the lieutenant governor, the speaker of the
46-11	house of representatives, and the presiding officer of each
46-12	legislative standing committee with primary jurisdiction over
46-13	primary and secondary education a written report that evaluates and
46-14	provides recommendations regarding the salary schedule.  This
46-15	subsection expires September 1, 2013.
46-16	SECTION 8.031.  Effective September 1, 2016, Section 21.402,
46-17	Education Code, is amended by amending Subsection (a) and adding
46-18	Subsection (e-1) to read as follows:
46-19	(a)  Except as provided by Subsection (d), (e-1) [(e)], or
46-20	(f), a school district must pay each classroom teacher, full-time
46-21	librarian, full-time counselor certified under Subchapter B, or
46-22	full-time school nurse not less than the minimum monthly salary,
46-23	based on the employee's level of experience in addition to other
46-24	factors, as determined by commissioner rule, determined by the
46-25	following formula:
46-26	MS = SF x FS
46-27	where:
47-1	"MS" is the minimum monthly salary;
47-2	"SF" is the applicable salary factor specified by Subsection
47-3	(c); and
47-4	"FS" is the amount, as determined by the commissioner under
47-5	Subsection (b), of the basic allotment as provided by Section
47-6	42.101(a) or (b) for a school district with a maintenance and
47-7	operation tax rate at least equal to the state maximum compressed
47-8	tax rate, as defined by Section 42.101(a) [state and local funds per
47-9	weighted student, including funds provided under Section 42.2516,
47-10	available to a district eligible to receive state assistance under
47-11	Section 42.302 with a maintenance and operations tax rate per $100
47-12	of taxable value equal to the product of the state compression
47-13	percentage, as determined under Section 42.2516, multiplied by
47-14	$1.50, except that the amount of state and local funds per weighted
47-15	student does not include the amount attributable to the increase in
47-16	the guaranteed level made by Chapter 1187, Acts of the 77th
47-17	Legislature, Regular Session 2001].
47-18	(e-1)  If the minimum monthly salary determined under
47-19	Subsection (a) for a particular level of experience is less than the
47-20	minimum monthly salary for that level of experience in the
47-21	preceding year, the minimum monthly salary is the minimum monthly
47-22	salary for the preceding year.
47-23	SECTION 8.04.  Section 29.1532, Education Code, is amended
47-24	by amending Subsection (a) and adding Subsections (d) and (e) to
47-25	read as follows:
47-26	(a)  A school district's prekindergarten program shall be
47-27	designed to develop skills necessary for success in the regular
48-1	public school curriculum, including language, mathematics, [and]
48-2	social, and school readiness skills that are aligned with the Texas
48-3	Prekindergarten Guidelines approved by the commissioner.
48-4	(d)  A school district's prekindergarten program must
48-5	demonstrate effectiveness in preparing children for kindergarten
48-6	according to a school readiness certification system established by
48-7	the commissioner. The commissioner may waive participation in the
48-8	certification system for a school district whose prekindergarten
48-9	program otherwise demonstrates effectiveness in preparing students
48-10	for kindergarten.
48-11	(e)  The commissioner may adopt rules as necessary to
48-12	implement this section.
48-13	SECTION 8.05.  Section 29.154, Education Code, is amended to
48-14	read as follows:
48-15	Sec. 29.154.  EVALUATION OF PREKINDERGARTEN PROGRAMS.
48-16	(a)  The commissioner [of education, in consultation with the
48-17	commissioner of human services,] shall:
48-18	(1)  monitor and evaluate prekindergarten programs as
48-19	to their developmental appropriateness and the development of
48-20	school readiness, as aligned with the Texas Prekindergarten
48-21	Guidelines approved by the commissioner and a school readiness
48-22	certification system established by the commissioner;
48-23	(2)  [. The commissioners shall also] evaluate the
48-24	potential for coordination on a statewide basis of prekindergarten
48-25	programs with government-funded early childhood care and education
48-26	programs such as child care administered under Chapter 44, Human
48-27	Resources Code, and federal Head Start programs; and
49-1	(3)  [. That evaluation shall use recommendations
49-2	contained in the report to the 71st Legislature required by Chapter
49-3	717, Acts of the 70th Legislature, Regular Session, 1987. For the
49-4	purpose of providing cost-effective care for children during the
49-5	full workday with developmentally appropriate curriculum, the
49-6	commissioners shall investigate the use of existing child-care
49-7	program sites as prekindergarten sites. Following the evaluation
49-8	required by this section, the commissioners,] in cooperation with
49-9	school districts and other program administrators, [shall]
49-10	integrate programs, staff, and program sites for prekindergarten,
49-11	child-care, and federal Head Start programs to the greatest extent
49-12	possible.
49-13	(b)  The commissioner or an entity acting under a contract
49-14	with the commissioner shall provide technical assistance to
49-15	implement proven school readiness components to a school district
49-16	operating a prekindergarten program under this subchapter that is
49-17	not certified by the commissioner following two consecutive review
49-18	cycles. The commissioner is not required to provide assistance to a
49-19	school district under this subsection if funding is not available.
49-20	(c)  The commissioner may adopt rules as necessary to
49-21	implement this section.
49-22	SECTION 8.06.  Subsection (a), Section 41.002, Education
49-23	Code, is amended to read as follows:
49-24	(a)  A school district may not have a wealth per student that
49-25	exceeds:
49-26	(1)  the wealth per student that generates the amount
49-27	of maintenance and operations tax revenue per weighted student
50-1	available to a district with maintenance and operations tax revenue
50-2	per cent of tax effort equal to the maximum amount provided per cent
50-3	under Section 42.101(a) [42.101], for the district's maintenance
50-4	and operations tax effort equal to or less than the rate equal to
50-5	the product of the state compression percentage, as determined
50-6	under Section 42.2516, multiplied by the maintenance and operations
50-7	tax rate adopted by the district for the 2005 tax year;
50-8	(2)  the wealth per student that generates the amount
50-9	of maintenance and operations tax revenue per weighted student
50-10	available to the Austin Independent School District, as determined
50-11	by the commissioner in cooperation with the Legislative Budget
50-12	Board, for the first six cents by which the district's maintenance
50-13	and operations tax rate exceeds the rate equal to the product of the
50-14	state compression percentage, as determined under Section 42.2516,
50-15	multiplied by the maintenance and operations tax rate adopted by
50-16	the district for the 2005 tax year, subject to Section 41.093(b-1);
50-17	or
50-18	(3)  $319,500, for the district's maintenance and
50-19	operations tax effort that exceeds the first six cents by which the
50-20	district's maintenance and operations tax effort exceeds the rate
50-21	equal to the product of the state compression percentage, as
50-22	determined under Section 42.2516, multiplied by the maintenance and
50-23	operations tax rate adopted by the district for the 2005 tax year.
50-24	SECTION 8.07.  Section 42.003, Education Code, is amended by
50-25	amending Subsection (b) and adding Subsection (b-1) to read as
50-26	follows:
50-27	(b)  A student to whom Subsection (a) does not apply is
51-1	entitled to the benefits of the Foundation School Program if the
51-2	student is enrolled in a prekindergarten class under Section 29.153
51-3	that participates in a school readiness certification system
51-4	established by the commissioner or that has received a waiver from
51-5	participation under Section 29.1532(d).
51-6	(b-1)  For the 2012-2013 school year, the commissioner may
51-7	withhold from a school district an amount of the funds appropriated
51-8	to the district for allotments for prekindergarten students
51-9	enrolled in a classroom that participates in a school readiness
51-10	certification system established by the commissioner to pay the
51-11	costs of the district's participation in the school readiness
51-12	certification system.  The commissioner may also withhold an amount
51-13	of revenue to which a school district is otherwise entitled under
51-14	Section 42.2516 to ensure that each school district in this state
51-15	pays a comparable amount of the costs of participation in the
51-16	system.  This subsection expires September 1, 2013.
51-17	SECTION 8.08.  The heading to Section 42.101, Education
51-18	Code, is amended to read as follows:
51-19	Sec. 42.101.  BASIC AND REGULAR PROGRAM ALLOTMENTS
51-20	[ALLOTMENT].
51-21	SECTION 8.09.  Effective September 1, 2011, Section 42.101,
51-22	Education Code, is amended by amending Subsections (a) and (b) and
51-23	adding Subsections (c) and (c-1) to read as follows:
51-24	(a)  The basic [For each student in average daily attendance,
51-25	not including the time students spend each day in special education
51-26	programs in an instructional arrangement other than mainstream or
51-27	career and technology education programs, for which an additional
52-1	allotment is made under Subchapter C, a district is entitled to an]
52-2	allotment is an amount equal to the lesser of $4,765 or the amount
52-3	that results from the following formula:
52-4	A = $4,765 X (DCR/MCR)
52-5	where:
52-6	"A" is the resulting amount for [allotment to which] a
52-7	district [is entitled];
52-8	"DCR" is the district's compressed tax rate, which is the
52-9	product of the state compression percentage, as determined under
52-10	Section 42.2516, multiplied by the maintenance and operations tax
52-11	rate adopted by the district for the 2005 tax year; and
52-12	"MCR" is the state maximum compressed tax rate, which is the
52-13	product of the state compression percentage, as determined under
52-14	Section 42.2516, multiplied by $1.50.
52-15	(b)  A greater amount for any school year for the basic
52-16	allotment under Subsection (a) may be provided by appropriation.
52-17	(c)  A school district is entitled to a regular program
52-18	allotment equal to the amount that results from the following
52-19	formula:
52-20	RPA = ADA X AA X RPAF
52-21	where:
52-22	"RPA" is the regular program allotment to which the district
52-23	is entitled;
52-24	"ADA" is the number of students in average daily attendance
52-25	in a district, not including the time students spend each day in
52-26	special education programs in an instructional arrangement other
52-27	than mainstream or career and technology education programs, for
53-1	which an additional allotment is made under Subchapter C;
53-2	"AA" is the district's adjusted basic allotment, as
53-3	determined under Section 42.102 and, if applicable, as further
53-4	adjusted under Section 42.103; and
53-5	"RPAF" is the regular program adjustment factor, which is
53-6	1.00 or a different amount established by appropriation.
53-7	(c-1)  Notwithstanding Subsection (c), the regular program
53-8	adjustment factor ("RPAF") is 0.98 for the 2011-2012 and 2012-2013
53-9	school years. This subsection expires September 1, 2013.
53-10	SECTION 8.10.  Effective September 1, 2015, Subsection (a),
53-11	Section 42.101, Education Code, is amended to read as follows:
53-12	(a)  The basic [For each student in average daily attendance,
53-13	not including the time students spend each day in special education
53-14	programs in an instructional arrangement other than mainstream or
53-15	career and technology education programs, for which an additional
53-16	allotment is made under Subchapter C, a district is entitled to an]
53-17	allotment is an amount equal to the lesser of $4,900 [$4,765] or the
53-18	amount that results from the following formula:
53-19	A = $4,900 [$4,765] X (DCR/MCR)
53-20	where:
53-21	"A" is the resulting amount for [allotment to which] a
53-22	district [is entitled];
53-23	"DCR" is the district's compressed tax rate, which is the
53-24	product of the state compression percentage, as determined under
53-25	Section 42.2516, multiplied by the maintenance and operations tax
53-26	rate adopted by the district for the 2005 tax year; and
53-27	"MCR" is the state maximum compressed tax rate, which is the
54-1	product of the state compression percentage, as determined under
54-2	Section 42.2516, multiplied by $1.50.
54-3	SECTION 8.11.  Effective September 1, 2016, Subsection (a),
54-4	Section 42.101, Education Code, is amended to read as follows:
54-5	(a)  The basic [For each student in average daily attendance,
54-6	not including the time students spend each day in special education
54-7	programs in an instructional arrangement other than mainstream or
54-8	career and technology education programs, for which an additional
54-9	allotment is made under Subchapter C, a district is entitled to an]
54-10	allotment is an amount equal to the lesser of $5,000 [$4,765] or the
54-11	amount that results from the following formula:
54-12	A = $5,000 [$4,765] X (DCR/MCR)
54-13	where:
54-14	"A" is the resulting amount for [allotment to which] a
54-15	district [is entitled];
54-16	"DCR" is the district's compressed tax rate, which is the
54-17	product of the state compression percentage, as determined under
54-18	Section 42.2516, multiplied by the maintenance and operations tax
54-19	rate adopted by the district for the 2005 tax year; and
54-20	"MCR" is the state maximum compressed tax rate, which is the
54-21	product of the state compression percentage, as determined under
54-22	Section 42.2516, multiplied by $1.50.
54-23	SECTION 8.12.  Section 42.105, Education Code, is amended to
54-24	read as follows:
54-25	Sec. 42.105.  SPARSITY ADJUSTMENT. Notwithstanding
54-26	Sections 42.101, 42.102, and 42.103, a school district that has
54-27	fewer than 130 students in average daily attendance shall be
55-1	provided a regular program [an adjusted basic] allotment on the
55-2	basis of 130 students in average daily attendance if it offers a
55-3	kindergarten through grade 12 program and has preceding or current
55-4	year's average daily attendance of at least 90 students or is 30
55-5	miles or more by bus route from the nearest high school district. A
55-6	district offering a kindergarten through grade 8 program whose
55-7	preceding or current year's average daily attendance was at least
55-8	50 students or which is 30 miles or more by bus route from the
55-9	nearest high school district shall be provided a regular program
55-10	[an adjusted basic] allotment on the basis of 75 students in average
55-11	daily attendance. An average daily attendance of 60 students shall
55-12	be the basis of providing the regular program [adjusted basic]
55-13	allotment if a district offers a kindergarten through grade 6
55-14	program and has preceding or current year's average daily
55-15	attendance of at least 40 students or is 30 miles or more by bus
55-16	route from the nearest high school district.
55-17	SECTION 8.13.  Subsection (a), Section 42.251, Education
55-18	Code, is amended to read as follows:
55-19	(a)  The sum of the regular program [basic] allotment under
55-20	Subchapter B and the special allotments under Subchapter C,
55-21	computed in accordance with this chapter, constitute the tier one
55-22	allotments. The sum of the tier one allotments and the guaranteed
55-23	yield allotments under Subchapter F, computed in accordance with
55-24	this chapter, constitute the total cost of the Foundation School
55-25	Program.
55-26	SECTION 8.14.  Subchapter E, Chapter 42, Education Code, is
55-27	amended by adding Section 42.2514 to read as follows:
56-1	Sec. 42.2514.  ADDITIONAL STATE AID FOR TAX INCREMENT
56-2	FINANCING PAYMENTS. For each school year, a school district,
56-3	including a school district that is otherwise ineligible for state
56-4	aid under this chapter, is entitled to state aid in an amount equal
56-5	to the amount the district is required to pay into the tax increment
56-6	fund for a reinvestment zone under Section 311.013(n), Tax Code.
56-7	SECTION 8.15.  Effective September 1, 2011, Section 42.2516,
56-8	Education Code, is amended by amending Subsections (b), (d), and
56-9	(f-2) and adding Subsection (i) to read as follows:
56-10	(b)  Notwithstanding any other provision of this title, a
56-11	school district that imposes a maintenance and operations tax at a
56-12	rate at least equal to the product of the state compression
56-13	percentage multiplied by the maintenance and operations tax rate
56-14	adopted by the district for the 2005 tax year is entitled to at
56-15	least the amount of state revenue necessary to provide the district
56-16	with the sum of:
56-17	(1)  the percentage specified by Subsection (i) of the
56-18	amount, as calculated under Subsection (e), [the amount] of state
56-19	and local revenue per student in weighted average daily attendance
56-20	for maintenance and operations that the district would have
56-21	received during the 2009-2010 school year under Chapter 41 and this
56-22	chapter, as those chapters existed on January 1, 2009, at a
56-23	maintenance and operations tax rate equal to the product of the
56-24	state compression percentage for that year multiplied by the
56-25	maintenance and operations tax rate adopted by the district for the
56-26	2005 tax year;
56-27	(2)  the percentage specified by Subsection (i) of an
57-1	amount equal to the product of $120 multiplied by the number of
57-2	students in weighted average daily attendance in the district; and
57-3	(3)  [an amount equal to the amount the district is
57-4	required to pay into the tax increment fund for a reinvestment zone
57-5	under Section 311.013(n), Tax Code, in the current tax year; and
57-6	[(4)]  any amount to which the district is entitled
57-7	under Section 42.106.
57-8	(d)  In determining the amount to which a district is
57-9	entitled under Subsection (b)(1), the commissioner shall:
57-10	(1)  include the percentage specified by Subsection (i)
57-11	of any amounts received by the district during the 2008-2009 school
57-12	year under Rider 86, page III-23, Chapter 1428 (H.B. 1), Acts of the
57-13	80th Legislature, Regular Session, 2007 (the General
57-14	Appropriations Act); and
57-15	(2)  for a school district that paid tuition under
57-16	Section 25.039 during the 2008-2009 school year, reduce the amount
57-17	to which the district is entitled by the amount of tuition paid
57-18	during that school year.
57-19	(f-2)  The rules adopted by the commissioner under
57-20	Subsection (f-1) must:
57-21	(1)  require the commissioner to determine, as if this
57-22	section did not exist, the effect under Chapter 41 and this chapter
57-23	of a school district's action described by Subsection (f-1)(1),
57-24	(2), (3), or (4) on the total state revenue to which the district
57-25	would be entitled or the cost to the district of purchasing
57-26	sufficient attendance credits to reduce the district's wealth per
57-27	student to the equalized wealth level; and
58-1	(2)  require an increase or reduction in the amount of
58-2	state revenue to which a school district is entitled under
58-3	Subsection (b)(1) [(b)] that is substantially equivalent to any
58-4	change in total state revenue or the cost of purchasing attendance
58-5	credits that would apply to the district if this section did not
58-6	exist.
58-7	(i)  The percentage to be applied for purposes of Subsections
58-8	(b)(1) and (2) and Subsection (d)(1) is 93.50 percent for the
58-9	2011-2012 school year and 92.35 percent for each subsequent school
58-10	year. A different percentage for any school year may be established
58-11	by appropriation.
58-12	SECTION 8.16.  Effective September 1, 2016, the heading to
58-13	Section 42.2516, Education Code, is amended to read as follows:
58-14	Sec. 42.2516.  STATE COMPRESSION PERCENTAGE [ADDITIONAL
58-15	STATE AID FOR TAX REDUCTION].
58-16	SECTION 8.17.  Effective September 1, 2016, Subsection (a),
58-17	Section 42.2516, Education Code, is amended to read as follows:
58-18	(a)  In this title [section], "state compression percentage"
58-19	means the percentage[, as determined by the commissioner,] of a
58-20	school district's adopted maintenance and operations tax rate for
58-21	the 2005 tax year that serves as the basis for state funding [for
58-22	tax rate reduction under this section].  If the state compression
58-23	percentage is not established by appropriation for a school year,
58-24	the [The] commissioner shall determine the state compression
58-25	percentage for each school year based on the percentage by which a
58-26	district is able to reduce the district's maintenance and
58-27	operations tax rate for that year, as compared to the district's
59-1	adopted maintenance and operations tax rate for the 2005 tax year,
59-2	as a result of state funds appropriated for [distribution under
59-3	this section for] that year from the property tax relief fund
59-4	established under Section 403.109, Government Code, or from another
59-5	funding source available for school district property tax relief.
59-6	SECTION 8.18.  Effective September 1, 2011, Subsection (a),
59-7	Section 42.25161, Education Code, is amended to read as follows:
59-8	(a)  The commissioner shall provide South Texas Independent
59-9	School District with the amount of state aid necessary to ensure
59-10	that the district receives an amount of state and local revenue per
59-11	student in weighted average daily attendance that is at least the
59-12	percentage specified by Section 42.2516(i) of $120 greater than the
59-13	amount the district would have received per student in weighted
59-14	average daily attendance during the 2009-2010 school year under
59-15	this chapter, as it existed on January 1, 2009, at a maintenance and
59-16	operations tax rate equal to the product of the state compression
59-17	percentage multiplied by the maintenance and operations tax rate
59-18	adopted by the district for the 2005 tax year, provided that the
59-19	district imposes a maintenance and operations tax at that rate.
59-20	SECTION 8.19.  Subchapter E, Chapter 42, Education Code, is
59-21	amended by adding Section 42.2525 to read as follows:
59-22	Sec. 42.2525.  ADJUSTMENTS FOR CERTAIN DEPARTMENT OF DEFENSE
59-23	DISTRICTS.  The commissioner is granted the authority to ensure
59-24	that Department of Defense school districts do not receive more
59-25	than an eight percent reduction should the federal government
59-26	reduce appropriations.
59-27	SECTION 8.20.  Effective September 1, 2011, Subsection (h),
60-1	Section 42.253, Education Code, is amended to read as follows:
60-2	(h)  If the amount appropriated for the Foundation School
60-3	Program for the second year of a state fiscal biennium is less than
60-4	the amount to which school districts are entitled for that year, the
60-5	commissioner shall certify the amount of the difference to the
60-6	Legislative Budget Board not later than January 1 of the second year
60-7	of the state fiscal biennium. The Legislative Budget Board shall
60-8	propose to the legislature that the certified amount be transferred
60-9	to the foundation school fund from the economic stabilization fund
60-10	and appropriated for the purpose of increases in allocations under
60-11	this subsection. If the legislature fails during the regular
60-12	session to enact the proposed transfer and appropriation and there
60-13	are not funds available under Subsection (j), the commissioner
60-14	shall adjust [reduce] the total amounts due to each school district
60-15	under this chapter and the total amounts necessary for each school
60-16	district to comply with the requirements of Chapter 41 [amount of
60-17	state funds allocated to each district] by an amount determined by
60-18	applying to each district, including a district receiving funds
60-19	under Section 42.2516, the same percentage adjustment so that the
60-20	total amount of the adjustment to all districts [a method under
60-21	which the application of the same number of cents of increase in tax
60-22	rate in all districts applied to the taxable value of property of
60-23	each district, as determined under Subchapter M, Chapter 403,
60-24	Government Code,] results in an amount [a total levy] equal to the
60-25	total adjustment necessary [reduction]. The following fiscal year:
60-26	(1)  [,] a district's entitlement under this section is
60-27	increased by an amount equal to the adjustment [reduction] made
61-1	under this subsection; and
61-2	(2)  the amount necessary for a district to comply with
61-3	the requirements of Chapter 41 is reduced by an amount equal to the
61-4	adjustment made under this subsection.
61-5	SECTION 8.21.  Effective September 1, 2016, Subsection (h),
61-6	Section 42.253, Education Code, is amended to read as follows:
61-7	(h)  If the amount appropriated for the Foundation School
61-8	Program for the second year of a state fiscal biennium is less than
61-9	the amount to which school districts are entitled for that year, the
61-10	commissioner shall certify the amount of the difference to the
61-11	Legislative Budget Board not later than January 1 of the second year
61-12	of the state fiscal biennium. The Legislative Budget Board shall
61-13	propose to the legislature that the certified amount be transferred
61-14	to the foundation school fund from the economic stabilization fund
61-15	and appropriated for the purpose of increases in allocations under
61-16	this subsection. If the legislature fails during the regular
61-17	session to enact the proposed transfer and appropriation and there
61-18	are not funds available under Subsection (j), the commissioner
61-19	shall adjust [reduce] the total amounts due to each school district
61-20	under this chapter and the total amounts necessary for each school
61-21	district to comply with the requirements of Chapter 41 [amount of
61-22	state funds allocated to each district] by an amount determined by
61-23	applying to each district the same percentage adjustment so that
61-24	the total amount of the adjustment to all districts [a method under
61-25	which the application of the same number of cents of increase in tax
61-26	rate in all districts applied to the taxable value of property of
61-27	each district, as determined under Subchapter M, Chapter 403,
62-1	Government Code,] results in an amount [a total levy] equal to the
62-2	total adjustment necessary [reduction]. The following fiscal year:
62-3	(1)  [,] a district's entitlement under this section is
62-4	increased by an amount equal to the adjustment [reduction] made
62-5	under this subsection; and
62-6	(2)  the amount necessary for a district to comply with
62-7	the requirements of Chapter 41 is reduced by an amount equal to the
62-8	adjustment made under this subsection.
62-9	SECTION 8.22.  Subsection (b), Section 42.260, Education
62-10	Code, is amended to read as follows:
62-11	(b)  For each year, the commissioner shall certify to each
62-12	school district or participating charter school the amount of[:
62-13	[(1)]  additional funds to which the district or school
62-14	is entitled due to the increase made by H.B. No. 3343, Acts of the
62-15	77th Legislature, Regular Session, 2001, to:
62-16	(1) [(A)]  the equalized wealth level under Section
62-17	41.002; or
62-18	(2) [(B)]  the guaranteed level of state and local
62-19	funds per weighted student per cent of tax effort under Section
62-20	42.302[; or
62-21	[(2)     additional state aid to which the district or
62-22	school is entitled under Section 42.2513].
62-23	SECTION 8.23.  Section 44.004, Education Code, is amended by
62-24	adding Subsection (g-1) to read as follows:
62-25	(g-1)  If the rate calculated under Subsection
62-26	(c)(5)(A)(ii)(b) decreases after the publication of the notice
62-27	required by this section, the president is not required to publish
63-1	another notice or call another meeting to discuss and adopt the
63-2	budget and the proposed lower tax rate.
63-3	SECTION 8.24.  Subsection (a), Section 26.05, Tax Code, is
63-4	amended to read as follows:
63-5	(a)  The governing body of each taxing unit, before the later
63-6	of September 30 or the 60th day after the date the certified
63-7	appraisal roll is received by the taxing unit, shall adopt a tax
63-8	rate for the current tax year and shall notify the assessor for the
63-9	unit of the rate adopted. The tax rate consists of two components,
63-10	each of which must be approved separately. The components are:
63-11	(1)  for a taxing unit other than a school district, the
63-12	rate that, if applied to the total taxable value, will impose the
63-13	total amount published under Section 26.04(e)(3)(C), less any
63-14	amount of additional sales and use tax revenue that will be used to
63-15	pay debt service, or, for a school district, the rate calculated
63-16	[published] under Section 44.004(c)(5)(A)(ii)(b), Education Code;
63-17	and
63-18	(2)  the rate that, if applied to the total taxable
63-19	value, will impose the amount of taxes needed to fund maintenance
63-20	and operation expenditures of the unit for the next year.
63-21	SECTION 8.25.  Effective September 1, 2016, Subsection (i),
63-22	Section 26.08, Tax Code, is amended to read as follows:
63-23	(i)  For purposes of this section, the effective maintenance
63-24	and operations tax rate of a school district is the tax rate that,
63-25	applied to the current total value for the district, would impose
63-26	taxes in an amount that, when added to state funds that would be
63-27	distributed to the district under Chapter 42, Education Code, for
64-1	the school year beginning in the current tax year using that tax
64-2	rate, [including state funds that will be distributed to the
64-3	district in that school year under Section 42.2516, Education
64-4	Code,] would provide the same amount of state funds distributed
64-5	under Chapter 42, Education Code, [including state funds
64-6	distributed under Section 42.2516, Education Code,] and
64-7	maintenance and operations taxes of the district per student in
64-8	weighted average daily attendance for that school year that would
64-9	have been available to the district in the preceding year if the
64-10	funding elements for Chapters 41 and 42, Education Code, for the
64-11	current year had been in effect for the preceding year.
64-12	SECTION 8.26.  Subsection (n), Section 311.013, Tax Code, is
64-13	amended to read as follows:
64-14	(n)  This subsection applies only to a school district whose
64-15	taxable value computed under Section 403.302(d), Government Code,
64-16	is reduced in accordance with Subdivision (4) of that
64-17	subsection.  In addition to the amount otherwise required to be
64-18	paid into the tax increment fund, the district shall pay into the
64-19	fund an amount equal to the amount by which the amount of taxes the
64-20	district would have been required to pay into the fund in the
64-21	current year if the district levied taxes at the rate the district
64-22	levied in 2005 exceeds the amount the district is otherwise
64-23	required to pay into the fund in the year of the reduction. This
64-24	additional amount may not exceed the amount the school district
64-25	receives in state aid for the current tax year under Section
64-26	42.2514, Education Code. The school district shall pay the
64-27	additional amount after the district receives the state aid to
65-1	which the district is entitled for the current tax year under
65-2	Section 42.2514, Education Code.
65-3	SECTION 8.27.  Effective September 1, 2011, the following
65-4	provisions of the Education Code are repealed:
65-5	(1)  Subsections (c-2), (c-3), and (e), Section 21.402;
65-6	(2)  Section 42.008; and
65-7	(3)  Subsections (a-1) and (a-2), Section 42.101.
65-8	SECTION 8.28.  (a)  Effective September 1, 2016, the
65-9	following provisions of the Education Code are repealed:
65-10	(1)  Section 41.0041;
65-11	(2)  Subsections (b), (b-1), (b-2), (c), (d), (e), (f),
65-12	(f-1), (f-2), (f-3), and (i), Section 42.2516;
65-13	(3)  Section 42.25161;
65-14	(4)  Subsection (c), Section 42.2523;
65-15	(5)  Subsection (g), Section 42.2524;
65-16	(6)  Subsection (c-1), Section 42.253; and
65-17	(7)  Section 42.261.
65-18	(b)  Effective September 1, 2016, Subsections (i-1) and (j),
65-19	Section 26.08, Tax Code, are repealed.
65-20	SECTION 8.29.  It is the intent of the legislature, between
65-21	fiscal year 2014 and fiscal year 2017, to continue to reduce the
65-22	amount of Additional State Aid For Tax Reduction (ASATR) to which a
65-23	school district is entitled under Section 42.2516, Education Code,
65-24	and to increase the basic allotment to which a school district is
65-25	entitled under Section 42.101, Education Code.
65-26	SECTION 8.30.  Except as otherwise provided by this Act, the
65-27	changes in law made by this Act to Chapter 42, Education Code, apply
66-1	beginning with the 2011-2012 school year.
66-2	SECTION 8.31.  The change in law made by Subsection (g-1),
66-3	Section 44.004, Education Code, as added by this Act, applies
66-4	beginning with adoption of a tax rate for the 2011 tax year.
66-5	ARTICLE 9.  EFFECTIVE DATE
66-6	SECTION 9.01.  Except as otherwise provided by this Act,
66-7	this Act takes effect September 1, 2011.