Amend CSHB 3 (senate committee report) as follows:

(1)  In SECTION 1.024 of the bill, in transferred, redesignated, and amended Section 48.104(k), Education Code (page 17), strike lines 43 through 62 and substitute the following:

(k)  [(c)] Funds allocated under this section, other than an indirect cost allotment established by commissioner rule, which may not exceed 45 percent, must [shall] be used to:

(1)  fund supplemental programs and services designed to eliminate any disparity in performance on assessment instruments administered under Subchapter B, Chapter 39, or disparity in the rates of high school completion between:

(B)  students at risk of dropping out of school, as defined by Section 29.081, and all other students; or

(2)  [. Specifically, the funds, other than an indirect cost allotment established under State Board of Education rule, which may not exceed 45 percent, may be used to meet the costs of providing a compensatory, intensive, or accelerated instruction program under Section 29.081 or a disciplinary alternative education program established under Section 37.008, to pay the costs associated with placing students in a juvenile justice alternative education program established under Section 37.011, or to] support a program eligible under Title I of the Elementary and Secondary Education Act of 1965, as provided by Pub. L. No. 103-382 and its subsequent amendments, and by federal regulations implementing that Act[, at a campus at which at least 40 percent of the students are educationally disadvantaged].

(2)  In SECTION 1.024 of the bill, in transferred, redesignated, and amended Section 48.104, Education Code (page 19), strike lines 9 through 16 and substitute the following:

[(q-4)] The commissioner, in the year following a determination under Subsection (n) that a school district was not in compliance with Subsection (k) for the 2021-2022 school year or a subsequent school year [local audit of compensatory education expenditures], shall withhold from the [a] district's foundation school fund payment an amount equal to the amount of compensatory education funds the commissioner [agency] determines were not used in compliance with Subsection (k) [(c)]. The commissioner shall release to a district funds withheld under this subsection when the district provides to the commissioner a detailed plan to spend those funds in compliance with Subsection (k) [(c)]. In determining whether a school district is subject to the withholding of funding required under this subsection, the commissioner may consider the district's average use of funds for the three preceding school years.

(3)  In SECTION 1.025 of the bill, in transferred, redesignated, and amended Section 48.105, Education Code (page 19, line 34), strike "[(a)]" and substitute "(a)".

(4)  In SECTION 1.025 of the bill, in transferred, redesignated, and amended Section 48.105, Education Code (page 19), strike lines 47 through 58 and substitute the following:

(b)  Funds allocated under this section, other than an indirect cost allotment established under commissioner [State Board of Education] rule, which may not exceed 45 percent, must be used in providing bilingual education or special language programs under Subchapter B, Chapter 29[, and must be accounted for under existing agency reporting and auditing procedures].

[(c)] A district's bilingual education or special language allocation may be used only for program and student evaluation, instructional materials and equipment, staff development, supplemental staff expenses, salary supplements for teachers, incremental costs associated with providing smaller class sizes, and other supplies required for quality instruction [and smaller class size].