86R10360 MEW/KJE/CJC/TSR-F
	By: Huberty	H.B. No. 3

	A BILL TO BE ENTITLED
	AN ACT
	relating to public school finance and public education.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	ARTICLE 1. PUBLIC SCHOOL FINANCE
	SECTION 1.001.  Section 12.106, Education Code, is amended
	by amending Subsections (a) and (a-1) and adding Subsection (a-3)
	to read as follows:
	(a)  A charter holder is entitled to receive for the
	open-enrollment charter school funding under Chapter 48 [42] equal
	to the amount of funding per student in weighted average daily
	attendance, excluding the allotment under Section 48.101 and
	enrichment funding under Section 48.202(a) [42.302(a)], to which
	the charter holder would be entitled for the school under Chapter 48
	[42] if the school were a school district without a tier one local
	share for purposes of Section 48.266 [42.253].
	(a-1)  In determining funding for an open-enrollment charter
	school under Subsection (a):
	(1)  the adjustment [adjustments] under Section 48.052
	is [Sections 42.102, 42.104, and 42.105 are] based on the average
	adjustment for the state; and
	(2)  the charter holder is entitled to an [the]
	adjustment under former Section 42.103 [is] based on the average
	adjustment for the state that would have been provided under that
	section as it existed on January 1, 2018.
	(a-3)  In addition to the funding provided by Subsections (a)
	and (a-2), a charter holder is entitled to receive funding for the
	open-enrollment charter school under Subchapter D, Chapter 48, if
	the charter holder would be entitled to the funding if the school
	were a school district.
	SECTION 1.002.  Section 25.084, Education Code, is amended
	by amending Subsection (b) and adding Subsection (c) to read as
	follows:
	(b)  Except as provided by Subsection (c), the [The]
	operation of schools year-round by a district does not affect the
	amount of state funds to which the district is entitled under
	Chapter 48 [42].
	(c)  A district that adopts a year-round system under this
	section may receive the incentive aid under Section 25.0841 if the
	district meets the criteria for receiving the incentive under that
	section.
	SECTION 1.003.  Subchapter C, Chapter 25, Education Code, is
	amended by adding Section 25.0841 to read as follows:
	Sec. 25.0841.  INCENTIVE FOR ADDITIONAL INSTRUCTIONAL DAYS.
	(a) The commissioner shall adjust the average daily attendance of a
	school district under Section 48.005 in the manner provided by
	Subsection (b) if the district:
	(1)  provides the minimum number of minutes of
	operational and instructional time required under Section 25.081
	and commissioner rules adopted under that section over at least 180
	days of instruction; and
	(2)  offers an additional 30 days of half-day
	instruction for students enrolled in prekindergarten through fifth
	grade.
	(b)  For a school district described by Subsection (a), the
	commissioner shall increase the average daily attendance of the
	district under Section 48.005 by the amount that results from the
	quotient of the sum of attendance for each of the 30 additional
	instructional days of half-day instruction that are provided
	divided by 30.
	(c)  The commissioner may provide the incentive under this
	section to a school district that intended, but due to
	circumstances beyond the district's control, including the
	occurrence of a natural disaster affecting the district, was unable
	to meet the requirement for instruction under Section 25.081 plus
	an additional 30 days of half-day instruction. The commissioner
	may proportionately reduce the incentive provided to a district
	described by this subsection.
	(d)  The commissioner shall adopt rules necessary for the
	implementation of this section.
	SECTION 1.004.  Section 30.003, Education Code, is amended
	by amending Subsection (f-1) and adding Subsection (f-2) to read as
	follows:
	(f-1)  The commissioner shall determine the total amount
	that the Texas School for the Blind and Visually Impaired and the
	Texas School for the Deaf would have received from school districts
	in accordance with this section if the following provisions had not
	reduced the districts' share of the cost of providing education
	services:
	(1)  H.B. No. 1, Acts of the 79th Legislature, 3rd
	Called Session, 2006;
	(2)  Section 45.0032; and
	(3)  Section 48.255.
	(f-2)  The amount determined under Subsection (f-1), [had
	not reduced the districts' share of the cost of providing education
	services. That amount,] minus any amount the schools do receive
	from school districts, shall be set aside as a separate account in
	the foundation school fund and appropriated to those schools for
	educational purposes.
	SECTION 1.005.  Sections 45.003(d) and (f), Education Code,
	are amended to read as follows:
	(d)  A proposition submitted to authorize the levy of
	maintenance taxes must include the question of whether the
	governing board or commissioners court may levy, assess, and
	collect annual ad valorem taxes for the further maintenance of
	public schools, at a rate not to exceed the rate stated in the
	proposition. For any year, the maintenance tax rate per $100 of
	taxable value adopted by the district may not exceed the rate equal
	to the sum of:
	(1)  $0.17; and
	(2)  the product of the state compression percentage,
	as determined under Section 48.255 [42.2516], multiplied by $1.00
	[$1.50].
	(f)  Notwithstanding any other law, a district that levied a
	maintenance tax for the 2005 tax year at a rate greater than $1.50
	per $100 of taxable value in the district as permitted by special
	law may not levy a maintenance tax at a rate that exceeds the rate
	per $100 of taxable value that is equal to the sum of:
	(1)  $0.17; and
	(2)  the product of the state compression percentage,
	as determined under Section 48.255 [42.2516], multiplied by the
	product of 66.67 percent multiplied by the rate of the maintenance
	tax levied by the district for the 2005 tax year.
	SECTION 1.006.  Subchapter A, Chapter 45, Education Code, is
	amended by adding Section 45.0032 to read as follows:
	Sec. 45.0032.  COMPONENTS OF MAINTENANCE AND OPERATIONS TAX.
	(a)  Except as provided by Section 45.003(f), a school district's
	tier one maintenance and operations tax rate is the portion of the
	district's total tax rate for maintenance and operations that does
	not exceed the product of the state compression percentage, as
	determined under Section 48.255, multiplied by $1.00.
	(b)  A district's enrichment tax rate consists of:
	(1)  any cents of additional maintenance and operations
	tax effort, not to exceed eight cents over the tax rate described by
	Subsection (a); and
	(2)  any cents of additional maintenance and operations
	tax effort available to a district that exceeds the tax rate
	described by Subsection (a) and Subdivision (1).
	(c)  For a district to which Section 45.003(f) applies, the
	reference to a value of $1.00 under Subsection (a) is replaced with
	the value equal to the product of 66.67 percent multiplied by the
	maintenance and operations tax rate adopted by the district for the
	2005 tax year.
	(d)  Notwithstanding the provisions of this section, a
	school district with maintenance and operations taxes at the tax
	rate described by Section 48.202(a-1)(2) for the 2018-2019 school
	year, that, after applying Subsection (a) to the district's tax
	rate, does not comply with Subsection (b), is entitled to:
	(1)  for the 2019-2020 school year, the dollar amount
	guaranteed level of state and local funds per weighted student per
	cent of tax effort at the tax rate described by Section
	48.202(a-1)(2); and
	(2)  for the 2020-2021 school year and each subsequent
	school year, the dollar amount guaranteed level of state and local
	funds per weighted student per cent of tax effort at the tax rate
	described by Section 48.202(a-1)(1) for one cent of tax effort at
	the tax rate described under Subdivision (1) until the district
	complies with Subsection (b).
	SECTION 1.007.  Subtitle I, Title 2, Education Code, is
	amended by adding Chapter 48, and a heading is added to that chapter
	to read as follows:
	CHAPTER 48. FOUNDATION SCHOOL PROGRAM
	SECTION 1.008.  Chapter 48, Education Code, as added by this
	Act, is amended by adding Subchapter A, and a heading is added to
	that subchapter to read as follows:
	SUBCHAPTER A. GENERAL PROVISIONS
	SECTION 1.009.  Sections 42.001, 42.002, 42.003, 42.004,
	42.005, 42.0051, and 42.0052, Education Code, are transferred to
	Subchapter A, Chapter 48, Education Code, as added by this Act,
	redesignated as Sections 48.001, 48.002, 48.003, 48.004, 48.005,
	48.006, and 48.007, Education Code, and amended to read as follows:
	Sec. 48.001 [42.001].  STATE POLICY. (a) It is the policy
	of this state that the provision of public education is a state
	responsibility and that a thorough and efficient system be provided
	and substantially financed through state revenue sources so that
	each student enrolled in the public school system shall have access
	to programs and services that are appropriate to the student's
	educational needs and that are substantially equal to those
	available to any similar student, notwithstanding varying local
	economic factors.
	(b)  The public school finance system of this state shall
	adhere to a standard of neutrality that provides for substantially
	equal access to similar revenue per student at similar tax effort,
	considering all state and local tax revenues of districts after
	acknowledging all legitimate student and district cost
	differences.
	Sec. 48.002  [42.002].  PURPOSES OF FOUNDATION SCHOOL
	PROGRAM. (a) The purposes of the Foundation School Program set
	forth in this chapter are to guarantee that each school district in
	the state has:
	(1)  adequate resources to provide each eligible
	student a basic instructional program and facilities suitable to
	the student's educational needs; and
	(2)  access to a substantially equalized program of
	financing in excess of basic costs for certain services, as
	provided by this chapter.
	(b)  The Foundation School Program consists of:
	(1)  two tiers that in combination provide for:
	(A)  sufficient financing for all school
	districts to provide a basic program of education that is rated
	acceptable or higher under Section 39.054 and meets other
	applicable legal standards; and
	(B)  substantially equal access to funds to
	provide an enriched program; and
	(2)  a facilities component as provided by Chapter 46.
	Sec. 48.003  [42.003].  STUDENT ELIGIBILITY. (a)  A
	student is entitled to the benefits of the Foundation School
	Program if, on September 1 of the school year, the student:
	(1)  is 5 years of age or older and under 21 years of age
	and has not graduated from high school, or is at least 21 years of
	age and under 26 years of age and has been admitted by a school
	district to complete the requirements for a high school diploma; or
	(2)  is at least 19 years of age and under 26 years of
	age and is enrolled in an adult high school diploma and industry
	certification charter school pilot program under Section 29.259.
	(b)  A student to whom Subsection (a) does not apply is
	entitled to the benefits of the Foundation School Program if the
	student is enrolled in a prekindergarten class under Section 29.153
	or Subchapter E-1, Chapter 29.
	(c)  A child may be enrolled in the first grade if the child
	is at least six years of age at the beginning of the school year of
	the district or has been enrolled in the first grade or has
	completed kindergarten in the public schools in another state
	before transferring to a public school in this state.
	(d)  Notwithstanding Subsection (a), a student younger than
	five years of age is entitled to the benefits of the Foundation
	School Program if:
	(1)  the student performs satisfactorily on the
	assessment instrument administered under Section 39.023(a) to
	students in the third grade; and
	(2)  the district has adopted a policy for admitting
	students younger than five years of age.
	Sec. 48.004  [42.004].  ADMINISTRATION OF THE PROGRAM. The
	commissioner[, in accordance with the rules of the State Board of
	Education,] shall adopt rules [take such action and require such
	reports consistent with this chapter] as [may be] necessary to
	implement and administer the Foundation School Program.
	Sec. 48.005  [42.005].  AVERAGE DAILY ATTENDANCE. (a)  In
	this chapter, average daily attendance is:
	(1)  the quotient of the sum of attendance for each day
	of the minimum number of days of instruction as described under
	Section 25.081(a) divided by the minimum number of days of
	instruction;
	(2)  for a district that operates under a flexible year
	program under Section 29.0821, the quotient of the sum of
	attendance for each actual day of instruction as permitted by
	Section 29.0821(b)(1) divided by the number of actual days of
	instruction as permitted by Section 29.0821(b)(1);
	(3)  for a district that operates under a flexible
	school day program under Section 29.0822, the average daily
	attendance as calculated by the commissioner in accordance with
	Sections 29.0822(d) and (d-1); or
	(4)  for a district that operates a full-day program
	under Section 29.153(c) or a half-day program, one-half of the
	average daily attendance calculated under Subdivision (1).
	(b)  A school district that experiences a decline of two
	percent or more in average daily attendance shall be funded on the
	basis of:
	(1)  the actual average daily attendance of the
	preceding school year, if the decline is the result of the closing
	or reduction in personnel of a military base; or
	(2)  subject to Subsection (e), an average daily
	attendance not to exceed 98 percent of the actual average daily
	attendance of the preceding school year, if the decline is not the
	result of the closing or reduction in personnel of a military base.
	(c)  The commissioner shall adjust the average daily
	attendance of a school district that has a significant percentage
	of students who are migratory children as defined by 20 U.S.C.
	Section 6399.
	(c-1)  The commissioner shall adjust the average daily
	attendance of a school district that qualifies for the incentive
	for additional instructional days under Section 25.0841 in the
	manner provided by that section.
	(d)  The commissioner may adjust the average daily
	attendance of a school district in which a disaster, flood, extreme
	weather condition, fuel curtailment, or other calamity has a
	significant effect on the district's attendance.
	(e)  For each school year, the commissioner shall adjust the
	average daily attendance of school districts that are entitled to
	funding on the basis of an adjusted average daily attendance under
	Subsection (b)(2) so that:
	(1)  all districts are funded on the basis of the same
	percentage of the preceding year's actual average daily attendance;
	and
	(2)  the total cost to the state does not exceed the
	amount specifically appropriated for that year for purposes of
	Subsection (b)(2).
	(f)  An open-enrollment charter school is not entitled to
	funding based on an adjustment under Subsection (b)(2).
	(g)  If a student may receive course credit toward the
	student's high school academic requirements and toward the
	student's higher education academic requirements for a single
	course, including a course provided under Section 28.009 by a
	public institution of higher education, the time during which the
	student attends the course shall be counted as part of the minimum
	number of instructional hours required for a student to be
	considered a full-time student in average daily attendance for
	purposes of this section.
	(g-1)  The commissioner shall adopt rules to calculate
	average daily attendance for students participating in a blended
	learning program in which classroom instruction is supplemented
	with applied workforce learning opportunities, including
	participation of students in internships, externships, and
	apprenticeships.
	(h)  Subject to rules adopted by the commissioner under
	Section 48.007(b) [42.0052(b)], time that a student participates in
	an off-campus instructional program approved under Section
	48.007(a) [42.0052(a)] shall be counted as part of the minimum
	number of instructional hours required for a student to be
	considered a full-time student in average daily attendance for
	purposes of this section.
	(i)  A district or a charter school operating under Chapter
	12 that operates a prekindergarten program is eligible to receive
	one-half of average daily attendance under Subsection (a) if the
	district's or charter school's prekindergarten program provides at
	least 32,400 minutes of instructional time to students.
	(j)  A district or charter school is eligible to earn full
	average daily attendance under Subsection (a) if the district or
	school provides at least 43,200 minutes of instructional time to
	students enrolled in:
	(1)  a dropout recovery school or program operating
	under Section 12.1141(c) or Section 39.0548;
	(2)  an alternative education program operating under
	Section 37.008;
	(3)  a school program located at a day treatment
	facility, residential treatment facility, psychiatric hospital, or
	medical hospital;
	(4)  a school program offered at a correctional
	facility; or
	(5)  a school operating under Section 29.259.
	(k)  A charter school operating under a charter granted under
	Chapter 12 before January 1, 2015, is eligible to earn full average
	daily attendance under Subsection (a), as that subsection existed
	immediately before January 1, 2015, for:
	(1)  all campuses of the charter school operating
	before January 1, 2015; and
	(2)  any campus or site expansion approved on or after
	January 1, 2015, provided that the charter school received an
	academic accountability performance rating of C or higher, and the
	campus or site expansion is approved by the commissioner.
	(l)  A school district campus or charter school described by
	Subsection (j) may operate more than one program and be eligible for
	full average daily attendance for each program if the programs
	operated by the district campus or charter school satisfy all
	applicable state and federal requirements.
	(m)  The commissioner shall adopt rules necessary to
	implement this section, including rules that:
	(1)  establish the minimum amount of instructional time
	per day that allows a school district or charter school to be
	eligible for full average daily attendance, which may differ based
	on the instructional program offered by the district or charter
	school;
	(2)  establish the requirements necessary for a school
	district or charter school to be eligible for one-half of average
	daily attendance, which may differ based on the instructional
	program offered by the district or charter school; and
	(3)  proportionally reduce the average daily
	attendance for a school district if any campus or instructional
	program in the district provides fewer than the required minimum
	minutes of instruction to students.
	[(n)     To assist school districts in implementing this
	section as amended by H.B. 2442, Acts of the 85th Legislature,
	Regular Session, 2017, or similar legislation, the commissioner may
	waive a requirement of this section or adopt rules to implement this
	section.     This subsection expires at the end of the 2018-2019
	school year.]
	Sec. 48.006  [42.0051].  AVERAGE DAILY ATTENDANCE FOR
	DISTRICTS IN DISASTER AREA. (a) From funds specifically
	appropriated for the purpose or other funds available to the
	commissioner for that purpose, the commissioner shall adjust the
	average daily attendance of a school district all or part of which
	is located in an area declared a disaster area by the governor under
	Chapter 418, Government Code, if the district experiences a decline
	in average daily attendance that is reasonably attributable to the
	impact of the disaster.
	(b)  The adjustment must be sufficient to ensure that the
	district receives funding comparable to the funding that the
	district would have received if the decline in average daily
	attendance reasonably attributable to the impact of the disaster
	had not occurred.
	(c)  The commissioner shall make the adjustment required by
	this section for the two-year period following the date of the
	governor's initial proclamation or executive order declaring the
	state of disaster.
	(d)  Section 48.005(b)(2) [42.005(b)(2)] does not apply to a
	district that receives an adjustment under this section.
	(e)  A district that receives an adjustment under this
	section may not receive any additional adjustment under Section
	48.005(d) [42.005(d)] for the decline in average daily attendance
	on which the adjustment under this section is based.
	(f)  For purposes of this title, a district's adjusted
	average daily attendance under this section is considered to be the
	district's average daily attendance as determined under Section
	48.005 [42.005].
	Sec. 48.007  [42.0052].  OFF-CAMPUS PROGRAMS APPROVED FOR
	PURPOSES OF AVERAGE DAILY ATTENDANCE. (a)  The commissioner may,
	based on criteria developed by the commissioner, approve
	instructional programs provided off campus by an entity other than
	a school district or open-enrollment charter school as a program in
	which participation by a student of a district or charter school may
	be counted for purposes of determining average daily attendance in
	accordance with Section 48.005(h) [42.005(h)].
	(b)  The commissioner shall adopt by rule verification and
	reporting procedures concerning time spent by students
	participating in instructional programs approved under Subsection
	(a).
	SECTION 1.010.  Sections 42.006(a), (b), (c), and (d),
	Education Code, are transferred to Subchapter A, Chapter 48,
	Education Code, as added by this Act, redesignated as Section
	48.008, Education Code, and amended to read as follows:
	Sec. 48.008.  PUBLIC EDUCATION INFORMATION MANAGEMENT
	SYSTEM (PEIMS). (a) Each school district shall participate in the
	Public Education Information Management System (PEIMS) and shall
	provide through that system information required for the
	administration of this chapter and of other appropriate provisions
	of this code.
	(b)  Each school district shall use a uniform accounting
	system adopted by the commissioner for the data required to be
	reported for the Public Education Information Management System.
	(c)  Annually, the commissioner shall review the Public
	Education Information Management System and shall repeal or amend
	rules that require school districts to provide information through
	the Public Education Information Management System that is not
	necessary. In reviewing and revising the Public Education
	Information Management System, the commissioner shall develop
	rules to ensure that the system:
	(1)  provides useful, accurate, and timely information
	on student demographics and academic performance, personnel, and
	school district finances;
	(2)  contains only the data necessary for the
	legislature and the agency to perform their legally authorized
	functions in overseeing the public education system; and
	(3)  does not contain any information related to
	instructional methods, except as provided by Section 29.066 or
	required by federal law.
	(d)  The commissioner's rules must ensure that the Public
	Education Information Management System links student performance
	data to other related information for purposes of efficient and
	effective allocation of scarce school resources, to the extent
	practicable using existing agency resources and appropriations.
	SECTION 1.011.  Sections 42.006(a-1), (a-3), and (a-4),
	Education Code, Section 42.006(a-2), Education Code, as added by
	Chapter 550 (S.B. 490), Acts of the 85th Legislature, Regular
	Session, 2017, and Section 42.006(a-2), as added by Chapter 916
	(S.B. 1404), Acts of the 85th Legislature, Regular Session, 2017,
	are transferred to Subchapter A, Chapter 48, Education Code, as
	added by this Act, redesignated as Section 48.009, Education Code,
	and amended to read as follows:
	Sec. 48.009.  REQUIRED PEIMS REPORTING. (a)  In this
	section, "full-time equivalent school counselor" means 40 hours of
	counseling services a week.
	(b) [(a-1)]  The commissioner by rule shall require each
	school district and open-enrollment charter school to report
	through the Public Education Information Management System
	information regarding:
	(1)  the number of students enrolled in the district or
	school who are identified as having dyslexia;
	(2)  [. The agency shall maintain the information
	provided in accordance with this subsection.
	[(a-2)     The commissioner by rule shall require each school
	district and open-enrollment charter school to report through the
	Public Education Information Management System information
	regarding] the availability of school counselors, including [at
	each campus. The commissioner's rules shall require a district or
	school to report] the number of full-time equivalent school
	counselors, [providing counseling services] at each [a] campus;
	(3)  [. For purposes of this subsection, "full-time
	equivalent school counselor" means 40 hours of counseling services
	a week. The agency shall maintain the information provided in
	accordance with this subsection.
	[(a-2)     The commissioner by rule shall require each school
	district and open-enrollment charter school to report through the
	Public Education Information Management System information for
	each campus of the district or school regarding:
	[(1)] the availability of expanded learning
	opportunities as described by Section 33.252 at each campus; [and]
	(4) [(2)]  the number of students participating in each
	of the categories of expanded learning opportunities listed under
	Section 33.252(b) at each campus;
	(5)  [.
	[(a-3)     The commissioner by rule shall require each school
	district and open-enrollment charter school to annually report
	through the Public Education Information Management System
	information regarding] the total number of students, other than
	students described by Subdivision (6) [Subsection (a-4)], enrolled
	in the district or school with whom the district or school, as
	applicable, used intervention strategies, as that term is defined
	by Section 26.004, at any time during the year for which the report
	is made; and
	(6)  [. The agency shall maintain the information
	provided in accordance with this subsection.
	[(a-4)     The commissioner by rule shall require each school
	district and open-enrollment charter school to annually report
	through the Public Education Information Management System
	information regarding] the total number of students enrolled in the
	district or school to whom the district or school provided aids,
	accommodations, or services under Section 504, Rehabilitation Act
	of 1973 (29 U.S.C. Section 794), at any time during the year for
	which the report is made.
	(c)  The agency shall maintain the information provided in
	accordance with this section [subsection].
	SECTION 1.012.  Section 42.009, Education Code, is
	transferred to Subchapter A, Chapter 48, Education Code, as added
	by this Act, redesignated as Section 48.010, Education Code, and
	amended to read as follows:
	Sec. 48.010  [42.009].  DETERMINATION OF FUNDING LEVELS.
	(a)  Not later than July 1 of each year, the commissioner shall
	determine for each school district whether the estimated amount of
	state and local funding per student in weighted average daily
	attendance to be provided to the district under the Foundation
	School Program for maintenance and operations for the following
	school year is less than the amount provided to the district for the
	2010-2011 school year.  If the amount estimated to be provided is
	less, the commissioner shall certify the percentage decrease in
	funding to be provided to the district.
	(b)  In making the determinations regarding funding levels
	required by Subsection (a), the commissioner shall:
	(1)  make adjustments as necessary to reflect changes
	in a school district's maintenance and operations tax rate;
	(2)  for a district required to [take action under
	Chapter 41 to] reduce its local revenue level under Section 48.257
	[wealth per student to the equalized wealth level], base the
	determinations on the district's net funding levels after deducting
	any amounts required to be expended by the district to comply with
	Chapter 49 [41]; and
	(3)  determine a district's weighted average daily
	attendance in accordance with this chapter as it existed on January
	1, 2011.
	SECTION 1.013.  Subchapter A, Chapter 48, Education Code, as
	added by this Act, is amended by adding Section 48.011 to read as
	follows:
	Sec. 48.011.  COMMISSIONER AUTHORITY TO RESOLVE UNINTENDED
	CONSEQUENCES FROM SCHOOL FINANCE FORMULAS. (a) Subject to
	Subsections (b) and (d), the commissioner may adjust a school
	district's funding entitlement under this chapter if the funding
	formulas used to determine the district's entitlement result in an
	unanticipated loss or gain for a district.
	(b)  Before making an adjustment under Subsection (a), the
	commissioner shall notify the office of the governor and the
	Legislative Budget Board. If, not later than the 30th day after the
	date the office of the governor and the Legislative Budget Board
	receive notice under this subsection, the commissioner does not
	receive disapproval from either of the entities, the commissioner
	may make the adjustment.
	(c)  Each biennium in which the commissioner makes an
	adjustment under Subsection (a), the commissioner must provide to
	the district an explanation regarding the changes necessary to
	resolve the unintended consequences.
	(d)  Beginning with the 2023-2024 school year, the
	commissioner may not make an adjustment under Subsection (a).
	(e)  This section expires September 1, 2025.
	SECTION 1.014.  Chapter 48, Education Code, as added by this
	Act, is amended by adding Subchapter B, and a heading is added to
	that subchapter to read as follows:
	SUBCHAPTER B. BASIC ENTITLEMENT
	SECTION 1.015.  Sections 42.101, 42.105, and 42.106,
	Education Code, are transferred to Subchapter B, Chapter 48,
	Education Code, as added by this Act, redesignated as Sections
	48.051, 48.052, and 48.053, Education Code, and amended to read as
	follows:
	Sec. 48.051  [42.101].  BASIC ALLOTMENT. (a) For each
	student in average daily attendance, not including the time
	students spend each day in special education programs in an
	instructional arrangement other than mainstream or career and
	technology education programs, for which an additional allotment is
	made under Subchapter C, a district is entitled to an allotment
	equal to the lesser of $6,030 [$4,765] or the amount that results
	from the following formula:
	A = $6,030 [$4,765] X TR/MCR [(DCR/MCR)]
	where:
	"A" is the allotment to which a district is entitled;
	"TR" ["DCR"] is the district's tier one maintenance and
	operations [compressed] tax rate, as provided by Section 45.0032[,
	which is the product of the state compression percentage, as
	determined under Section 42.2516, multiplied by the maintenance and
	operations tax rate adopted by the district for the 2005 tax year];
	and
	"MCR" is the state maximum compressed tax rate, which is the
	product of the state compression percentage, as determined under
	Section 48.255 [42.2516], multiplied by $1.00 [$1.50].
	[(a-1)     Notwithstanding Subsection (a), for a school
	district that adopted a maintenance and operations tax rate for the
	2005 tax year below the maximum rate permitted by law for that year,
	the district's compressed tax rate ("DCR") includes the portion of
	the district's current maintenance and operations tax rate in
	excess of the first six cents above the district's compressed tax
	rate, as defined by Subsection (a), until the district's compressed
	tax rate computed in accordance with this subsection is equal to the
	state maximum compressed tax rate ("MCR").]
	(b)  A greater amount for any school year may be provided by
	appropriation.
	[(c)     This subsection applies to a school district for which
	the compressed tax rate ("DCR") is determined in accordance with
	Subsection (a-1). Any reduction in the district's adopted
	maintenance and operations tax rate is applied to the following
	components of the district's tax rate in the order specified:
	[(1)  tax effort described by Section 42.302(a-1)(2);
	[(2)     tax effort described by Section 42.302(a-1)(1);
	and
	[(3)     tax effort included in the determination of the
	district's compressed tax rate ("DCR") under Subsection (a-1).]
	Sec. 48.052 [42.105].  SPARSITY ADJUSTMENT. (a)
	Notwithstanding Section 48.051 [Sections 42.101, 42.102, and
	42.103], a school district that has fewer than 130 students in
	average daily attendance shall be provided a [an adjusted] basic
	allotment on the basis of 130 students in average daily attendance
	if it offers a kindergarten through grade 12 program and has
	preceding or current year's average daily attendance of at least 90
	students or is 30 miles or more by bus route from the nearest high
	school district. A district offering a kindergarten through grade 8
	program whose preceding or current year's average daily attendance
	was at least 50 students or which is 30 miles or more by bus route
	from the nearest high school district shall be provided a [an
	adjusted] basic allotment on the basis of 75 students in average
	daily attendance. An average daily attendance of 60 students shall
	be the basis of providing the [adjusted] basic allotment if a
	district offers a kindergarten through grade 6 program and has
	preceding or current year's average daily attendance of at least 40
	students or is 30 miles or more by bus route from the nearest high
	school district.
	(b)  Subsection (c) applies only to a school district that:
	(1)  does not offer each grade level from kindergarten
	through grade 12 and whose prospective or former students generally
	attend school in a state that borders this state for the grade
	levels the district does not offer;
	(2)  serves both students residing in this state and
	students residing in a state that borders this state who are
	subsequently eligible for in-state tuition rates at institutions of
	higher education in either state regardless of the state in which
	the students reside; and
	(3)  shares students with an out-of-state district that
	does not offer competing instructional services.
	(c)  Notwithstanding Subsection (a) or Section 48.051
	[Sections 42.101, 42.102, and 42.103], a school district to which
	this subsection applies, as provided by Subsection (b), that has
	fewer than 130 students in average daily attendance shall be
	provided a [an adjusted] basic allotment on the basis of 130
	students in average daily attendance if it offers a kindergarten
	through grade four program and has preceding or current year's
	average daily attendance of at least 75 students or is 30 miles or
	more by bus route from the nearest high school district.
	Sec. 48.053 [42.106].  TUITION ALLOTMENT FOR DISTRICTS NOT
	OFFERING ALL GRADE LEVELS. A school district that contracts for
	students residing in the district to be educated in another
	district under Section 25.039(a) is entitled to receive an
	allotment equal to the total amount of tuition required to be paid
	by the district under Section 25.039, not to exceed the amount
	specified by commissioner rule under Section 25.039(b).
	SECTION 1.016.  Chapter 48, Education Code, as added by this
	Act, is amended by adding Subchapter C, and a heading is added to
	that subchapter to read as follows:
	SUBCHAPTER C. STUDENT-BASED ALLOTMENTS
	SECTION 1.017.  Subchapter C, Chapter 48, Education Code, as
	added by this Act, is amended by adding Section 48.101 to read as
	follows:
	Sec. 48.101.  SMALL AND MID-SIZED DISTRICT ALLOTMENT.  (a)
	Small and mid-sized districts are entitled to an annual allotment
	in accordance with this section.  In this section:
	(1)  "AA" is the district's annual allotment per
	student;
	(2)  "ADA" is the number of students in average daily
	attendance for which the district is entitled to an allotment under
	Section 48.051;
	(3)  "BA" is the basic allotment determined under
	Section 48.051; and
	(4)  "SS" is the small-sized district allotment
	determined under Subsection (b).
	(b)  A school district that has more than 450 but not more
	than 1,600 students in average daily attendance is entitled to an
	annual allotment for each student in average daily attendance based
	on the following formula:
	AA = ((1,600 - ADA) X .0004) X BA
	(c)  A school district that has not more than 450 students in
	average daily attendance is entitled to an annual allotment for
	each student in average daily attendance based on the following
	formula:
	AA = (1 + ((450 - ADA) X .00015)) X SS
	(d)  A school district that offers a kindergarten through
	grade 12 program and has less than 5,000 students in average daily
	attendance is entitled to an annual allotment for each student in
	average daily attendance based on the formula, of the following
	formulas, that results in the greatest annual allotment:
	(1)  the formula in Subsection (b) or (c) for which the
	district is eligible; or
	(2)  AA = ((5,000 - ADA) X .000025) X BA.
	SECTION 1.018.  Section 42.151, Education Code, is
	transferred to Subchapter C, Chapter 48, Education Code, as added
	by this Act, redesignated as Section 48.102, Education Code, and
	amended to read as follows:
	Sec. 48.102 [42.151].  SPECIAL EDUCATION. (a) For each
	student in average daily attendance in a special education program
	under Subchapter A, Chapter 29, in a mainstream instructional
	arrangement, a school district is entitled to an annual allotment
	equal to the [adjusted] basic allotment multiplied by 1.1. For each
	full-time equivalent student in average daily attendance in a
	special education program under Subchapter A, Chapter 29, in an
	instructional arrangement other than a mainstream instructional
	arrangement, a district is entitled to an annual allotment equal to
	the [adjusted] basic allotment multiplied by a weight determined
	according to instructional arrangement as follows:
	Homebound5.0
	Hospital class3.0
	Speech therapy5.0
	Resource room3.0
	Self-contained, mild and moderate,
	regular campus3.0
	Self-contained, severe, regular campus3.0
	Off home campus2.7
	Nonpublic day school1.7
	Vocational adjustment class2.3
	(b)  A special instructional arrangement for students with
	disabilities residing in care and treatment facilities, other than
	state schools, whose parents or guardians do not reside in the
	district providing education services shall be established by
	commissioner rule [under the rules of the State Board of
	Education]. The funding weight for this arrangement shall be 4.0
	for those students who receive their education service on a local
	school district campus. A special instructional arrangement for
	students with disabilities residing in state schools shall be
	established by commissioner rule [under the rules of the State
	Board of Education] with a funding weight of 2.8.
	(c)  For funding purposes, the number of contact hours
	credited per day for each student in the off home campus
	instructional arrangement may not exceed the contact hours credited
	per day for the multidistrict class instructional arrangement in
	the 1992-1993 school year.
	(d)  For funding purposes the contact hours credited per day
	for each student in the resource room; self-contained, mild and
	moderate; and self-contained, severe, instructional arrangements
	may not exceed the average of the statewide total contact hours
	credited per day for those three instructional arrangements in the
	1992-1993 school year.
	(e)  The commissioner [State Board of Education] by rule
	shall prescribe the qualifications an instructional arrangement
	must meet in order to be funded as a particular instructional
	arrangement under this section. In prescribing the qualifications
	that a mainstream instructional arrangement must meet, the
	commissioner [board] shall establish requirements that students
	with disabilities and their teachers receive the direct, indirect,
	and support services that are necessary to enrich the regular
	classroom and enable student success.
	(f)  In this section, "full-time equivalent student" means
	30 hours of contact a week between a special education student and
	special education program personnel.
	(g)  The commissioner [State Board of Education] shall adopt
	rules and procedures governing contracts for residential placement
	of special education students. The legislature shall provide by
	appropriation for the state's share of the costs of those
	placements.
	(h)  Funds allocated under this section, other than an
	indirect cost allotment established by commissioner [under State
	Board of Education] rule, must be used in the special education
	program under Subchapter A, Chapter 29.
	(i)  The agency shall encourage the placement of students in
	special education programs, including students in residential
	instructional arrangements, in the least restrictive environment
	appropriate for their educational needs.
	(j) [(k)]  A school district that provides an extended year
	program required by federal law for special education students who
	may regress is entitled to receive funds in an amount equal to 75
	percent, or a lesser percentage determined by the commissioner, of
	the [adjusted] basic allotment [or adjusted allotment, as
	applicable,] for each full-time equivalent student in average daily
	attendance, multiplied by the amount designated for the student's
	instructional arrangement under this section, for each day the
	program is provided divided by the number of days in the minimum
	school year. The total amount of state funding for extended year
	services under this section may not exceed $10 million per year. A
	school district may use funds received under this section only in
	providing an extended year program.
	(k) [(l)]  From the total amount of funds appropriated for
	special education under this section, the commissioner shall
	withhold an amount specified in the General Appropriations Act, and
	distribute that amount to school districts for programs under
	Section 29.014. The program established under that section is
	required only in school districts in which the program is financed
	by funds distributed under this subsection and any other funds
	available for the program. After deducting the amount withheld
	under this subsection from the total amount appropriated for
	special education, the commissioner shall reduce each district's
	allotment proportionately and shall allocate funds to each district
	accordingly.
	(l)  The commissioner by rule shall increase the indirect
	cost allotment established under Subsection (h) and in effect for
	the 2010-2011 school year in proportion to the average percentage
	reduction in total state and local maintenance and operations
	revenue provided under former Chapter 42 for the 2011-2012 school
	year as a result of S.B. Nos. 1 and 2, Acts of the 82nd Legislature,
	1st Called Session, 2011.
	(m)  If the commissioner determines that the total amount of
	funding under this section for any school year is less than the
	amount required under 20 U.S.C. Section 1412(a)(18), the
	commissioner shall increase the total amount of funding under this
	section for that school year as necessary to comply with that
	provision. If the amount of funding available for purposes of this
	section is insufficient to fully fund the amount determined
	necessary under this subsection, the commissioner shall reduce
	other funding provided under this chapter in the manner provided by
	Section 48.266(f) to achieve the necessary amount of funding under
	this subsection.
	SECTION 1.019.  Subchapter C, Chapter 48, Education Code, as
	added by this Act, is amended by adding Section 48.103 to read as
	follows:
	Sec. 48.103.  ALLOTMENT FOR STUDENT WITH DYSLEXIA OR RELATED
	DISORDER. (a) Subject to Subsection (b), for each student that a
	school district serves who has been identified as having dyslexia
	or a related disorder, the district is entitled to an annual
	allotment equal to the district's basic allotment multiplied by 0.1
	or a greater amount provided by appropriation.
	(b)  A school district is entitled to the allotment under
	Subsection (a) only for a student who:
	(1)  is receiving instruction that:
	(A)  meets applicable dyslexia program criteria
	established by the agency; and
	(B)  is provided by a person with specific
	training in providing that instruction; or
	(2)  has received the instruction described by
	Subdivision (1) and is permitted, on the basis of having dyslexia or
	a related disorder, to use modifications in the classroom and
	accommodations in the administration of assessment instruments
	under Section 39.023.
	(c)  A school district may receive funding for a student
	under this section and Section 48.102 if the student satisfies the
	requirements of both sections.
	SECTION 1.020.  Sections 42.152, 42.153, 42.154, and 42.157,
	Education Code, are transferred to Subchapter C, Chapter 48,
	Education Code, as added by this Act, redesignated as Sections
	48.104, 48.105, 48.106, and 48.107, Education Code, and amended to
	read as follows:
	Sec. 48.104 [42.152].  COMPENSATORY EDUCATION ALLOTMENT.
	(a)  For each student who [is educationally disadvantaged or who is
	a student who] does not have a disability and resides in a
	residential placement facility in a district in which the student's
	parent or legal guardian does not reside, a district is entitled to
	an annual allotment equal to the [adjusted] basic allotment
	multiplied by 0.2.  For[, and by 2.41 for] each full-time equivalent
	student who is in a remedial and support program under Section
	29.081 because the student is pregnant, a district is entitled to an
	annual allotment equal to the basic allotment multiplied by 2.41.
	(b)  For each student who resides in an economically
	disadvantaged census block as determined by the commissioner under
	Subsection (c), a district is entitled to an annual allotment equal
	to the basic allotment multiplied by the weight assigned to the
	student's census block under Subsection (d).
	(c)  For purposes of the allotment under Subsection (b), the
	commissioner shall establish an index for economically
	disadvantaged census blocks in the state that provides criteria for
	determining which census blocks are economically disadvantaged and
	categorizes economically disadvantaged census blocks in five tiers
	according to relative severity of economic disadvantage. In
	determining the severity of economic disadvantage in a census
	block, the commissioner shall consider:
	(1)  the median household income;
	(2)  the average educational attainment of the
	population;
	(3)  the percentage of single-parent households;
	(4)  the rate of homeownership; and
	(5)  other economic criteria the commissioner
	determines likely to disadvantage a student's preparedness and
	ability to learn.
	(d)  The weights assigned to the five tiers of the index
	established under Subsection (c) are, from least to most severe
	economic disadvantage, 0.225, 0.2375, 0.25, 0.2625, and 0.275.
	(e)  If insufficient data is available for any school year to
	evaluate the level of economic disadvantage in a census block, a
	school district is entitled to an annual allotment equal to the
	basic allotment multiplied by 0.2 for each student who resides in
	that census block and is educationally disadvantaged. For purposes
	of this subsection [section], the number of educationally
	disadvantaged students is determined:
	(1)  by averaging the best six months' numbers of
	students eligible for enrollment in the national school lunch
	program of free or reduced-price lunches for the preceding school
	year who resided in that census block; or
	(2)  in the manner provided by commissioner rule.
	(f)  For a student who qualifies for an allotment under
	multiple provisions of this section, the school district is
	entitled to an allotment for the student under the provision that
	would result in the greatest amount of funding.
	(g) [(b-1)]  A student receiving a full-time virtual
	education through the state virtual school network may be included
	in determining the number of students residing in an economically
	disadvantaged census block under Subsection (b) or the number of
	educationally disadvantaged students under Subsection (e) [(b)] if
	the school district submits to the commissioner a plan detailing
	the enhanced services that will be provided to the student and the
	commissioner approves the plan.
	(h)  Not later than March 1 of each year, the commissioner
	shall:
	(1)  review and, if necessary, update the index
	established under Subsection (c) to be used for the following
	school year, based on the most recent estimates published by the
	United States Census Bureau; and
	(2)  notify each school district of any changes to the
	index.
	(i)  The state demographer, the Department of Agriculture,
	and any other state agency with relevant information shall assist
	the commissioner in performing the commissioner's duties under this
	section.
	[(c)     Funds allocated under this section shall be used to
	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 students at risk of dropping out of
	school, as defined by Section 29.081, and all other students.
	Specifically, the funds, other than an indirect cost allotment
	established under State Board of Education rule, which may not
	exceed 45 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.   In meeting the costs of providing a
	compensatory, intensive, or accelerated instruction program under
	Section 29.081, a district's compensatory education allotment
	shall be used for costs supplementary to the regular education
	program, such as costs for program and student evaluation,
	instructional materials and equipment and other supplies required
	for quality instruction, supplemental staff expenses, salary for
	teachers of at-risk students, smaller class size, and
	individualized instruction.     A home-rule school district or an
	open-enrollment charter school must use funds allocated under
	Subsection (a) for a purpose authorized in this subsection but is
	not otherwise subject to Subchapter C, Chapter 29.   For purposes of
	this subsection, a program specifically designed to serve students
	at risk of dropping out of school, as defined by Section 29.081, is
	considered to be a program supplemental to the regular education
	program, and a district may use its compensatory education
	allotment for such a program.
	[(c-1)     Notwithstanding Subsection (c), funds allocated
	under this section may be used to fund in proportion to the
	percentage of students served by the program that meet the criteria
	in Section 29.081(d) or (g):
	[(1)     an accelerated reading instruction program under
	Section 28.006(g); or
	[(2)     a program for treatment of students who have
	dyslexia or a related disorder as required by Section 38.003.
	[(c-2)     Notwithstanding Subsection (c), funds allocated
	under this section may be used to fund a district's mentoring
	services program under Section 29.089.
	[(d)     The agency shall evaluate the effectiveness of
	accelerated instruction and support programs provided under
	Section 29.081 for students at risk of dropping out of school.
	[(q)     The State Board of Education, with the assistance of
	the comptroller, shall develop and implement by rule reporting and
	auditing systems for district and campus expenditures of
	compensatory education funds to ensure that compensatory education
	funds, other than the indirect cost allotment, are spent only to
	supplement the regular education program as required by Subsection
	(c). The reporting requirements shall be managed electronically to
	minimize local administrative costs. A district shall submit the
	report required by this subsection not later than the 150th day
	after the last day permissible for resubmission of information
	required under Section 42.006.
	[(q-1)     The commissioner shall develop a system to identify
	school districts that are at high risk of having used compensatory
	education funds other than in compliance with Subsection (c) or of
	having inadequately reported compensatory education expenditures.
	If a review of the report submitted under Subsection (q), using the
	risk-based system, indicates that a district is not at high risk of
	having misused compensatory education funds or of having
	inadequately reported compensatory education expenditures, the
	district may not be required to perform a local audit of
	compensatory education expenditures and is not subject to on-site
	monitoring under this section.
	[(q-2)     If a review of the report submitted under Subsection
	(q), using the risk-based system, indicates that a district is at
	high risk of having misused compensatory education funds, the
	commissioner shall notify the district of that determination. The
	district must respond to the commissioner not later than the 30th
	day after the date the commissioner notifies the district of the
	commissioner's determination. If the district's response does not
	change the commissioner's determination that the district is at
	high risk of having misused compensatory education funds or if the
	district does not respond in a timely manner, the commissioner
	shall:
	[(1)     require the district to conduct a local audit of
	compensatory education expenditures for the current or preceding
	school year;
	[(2)     order agency staff to conduct on-site monitoring
	of the district's compensatory education expenditures; or
	[(3)     both require a local audit and order on-site
	monitoring.
	[(q-3)     If a review of the report submitted under Subsection
	(q), using the risk-based system, indicates that a district is at
	high risk of having inadequately reported compensatory education
	expenditures, the commissioner may require agency staff to assist
	the district in following the proper reporting methods or amending
	a district or campus improvement plan under Subchapter F, Chapter
	11. If the district does not take appropriate corrective action
	before the 45th day after the date the agency staff notifies the
	district of the action the district is expected to take, the
	commissioner may:
	[(1)     require the district to conduct a local audit of
	the district's compensatory education expenditures; or
	[(2)     order agency staff to conduct on-site monitoring
	of the district's compensatory education expenditures.
	[(q-4)     The commissioner, in the year following a local audit
	of compensatory education expenditures, shall withhold from a
	district's foundation school fund payment an amount equal to the
	amount of compensatory education funds the agency determines were
	not used in compliance with Subsection (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 (c).
	[(r)     The commissioner shall grant a one-year exemption from
	the requirements of Subsections (q)-(q-4) to a school district in
	which the group of students who have failed to perform
	satisfactorily in the preceding school year on an assessment
	instrument required under Section 39.023(a), (c), or (l)
	subsequently performs on those assessment instruments at a level
	that meets or exceeds a level prescribed by commissioner rule. Each
	year the commissioner, based on the most recent information
	available, shall determine if a school district is entitled to an
	exemption for the following school year and notify the district of
	that determination.]
	Sec. 48.105 [42.153].  BILINGUAL EDUCATION ALLOTMENT.
	[(a)] For each student in average daily attendance in a bilingual
	education or special language program under Subchapter B, Chapter
	29, a district is entitled to an annual allotment equal to the
	[adjusted] basic allotment multiplied by:
	(1)  for a student of limited English proficiency, as
	defined by Section 29.052:
	(A)  0.1; or
	(B)  0.15 if the student is in a bilingual
	education program using a dual language immersion/one-way or
	two-way program model; and
	(2)  for a student not described by Subdivision (1),
	0.05.
	[(b)     Funds allocated under this section, other than an
	indirect cost allotment established under State Board of Education
	rule, 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, and
	other supplies required for quality instruction and smaller class
	size.]
	Sec. 48.106  [42.154].  CAREER AND TECHNOLOGY EDUCATION
	ALLOTMENT. (a)  For each full-time equivalent student in average
	daily attendance in an approved career and technology education
	program in grades 6 [nine] through 12 [or in career and technology
	education programs for students with disabilities in grades seven
	through 12], a district is entitled to:
	(1)  an annual allotment equal to the [adjusted] basic
	allotment multiplied by a weight of 1.35; and
	(2)  $50, if the student is enrolled in two or more
	advanced career and technology education classes for a total of
	three or more credits.
	(b)  In this section:
	(1)  "Career and technology education class" and
	"career and technology education program" mean a class or program
	that aligns with requirements for career and technical education
	under the Strengthening Career and Technical Education for the 21st
	Century Act (Pub. L. No. 115-224). The terms include a technology
	applications course [on cybersecurity adopted or selected by the
	State Board of Education under Section 28.025(c-10)].
	(2)  "Full-time equivalent student" means 30 hours of
	contact a week between a student and career and technology
	education program personnel.
	[(c)     Funds allocated under this section, other than an
	indirect cost allotment established under State Board of Education
	rule, must be used in providing career and technology education
	programs in grades nine through 12 or career and technology
	education programs for students with disabilities in grades seven
	through 12 under Sections 29.182, 29.183, and 29.184.
	[(d)     The commissioner shall conduct a cost-benefit
	comparison between career and technology education programs and
	mathematics and science programs.
	[(e)     Out of the total statewide allotment for career and
	technology education under this section, the commissioner shall set
	aside an amount specified in the General Appropriations Act, which
	may not exceed an amount equal to one percent of the total amount
	appropriated, to support regional career and technology education
	planning. After deducting the amount set aside under this
	subsection from the total amount appropriated for career and
	technology education under this section, the commissioner shall
	reduce each district's tier one allotments in the same manner
	described for a reduction in allotments under Section 42.253.]
	Sec. 48.107  [42.157].  PUBLIC EDUCATION GRANT ALLOTMENT.
	(a) Except as provided by Subsection (b), for each student in
	average daily attendance who is using a public education grant
	under Subchapter G, Chapter 29, to attend school in a district other
	than the district in which the student resides, the district in
	which the student attends school is entitled to an annual allotment
	equal to the [adjusted] basic allotment multiplied by a weight of
	0.1.
	(b)  The total number of allotments under this section to
	which a district is entitled may not exceed the number by which the
	number of students using public education grants to attend school
	in the district exceeds the number of students who reside in the
	district and use public education grants to attend school in
	another district.
	SECTION 1.021.  Subchapter C, Chapter 48, Education Code, as
	added by this Act, is amended by adding Section 48.108 to read as
	follows:
	Sec. 48.108.  EARLY READING ALLOTMENT. (a)  For each student
	in average daily attendance in kindergarten through third grade, a
	school district is entitled to an annual allotment equal to the
	district's basic allotment multiplied by 0.1 if the student is:
	(1)  educationally disadvantaged; or
	(2)  in a bilingual education or special language
	program under Subchapter B, Chapter 29.
	(b)  A school district is entitled to an allotment under each
	subdivision of Subsection (a) for which a student qualifies.
	(c)  A school district may receive funding for a student
	under this section and under Sections 48.104 and 48.105, as
	applicable, if the student satisfies the requirements of each
	applicable section.
	SECTION 1.022.  Chapter 48, Education Code, as added by this
	Act, is amended by adding Subchapter D, and a heading is added to
	that subchapter to read as follows:
	SUBCHAPTER D. ADDITIONAL FUNDING
	SECTION 1.023.  Sections 42.155 and 42.158, Education Code,
	are transferred to Subchapter D, Chapter 48, Education Code, as
	added by this Act, redesignated as Sections 48.151 and 48.152,
	Education Code, and amended to read as follows:
	Sec. 48.151  [42.155].  TRANSPORTATION ALLOTMENT. (a) Each
	district or county operating a transportation system is entitled to
	allotments for transportation costs as provided by this section.
	(b)  As used in this section:
	(1)  "Regular eligible student" means a student who
	resides two or more miles from the student's campus of regular
	attendance, measured along the shortest route that may be traveled
	on public roads, and who is not classified as a student eligible for
	special education services.
	(2)  "Eligible special education student" means a
	student who is eligible for special education services under
	Section 29.003 and who would be unable to attend classes without
	special transportation services.
	[(3)     "Linear density" means the average number of
	regular eligible students transported daily, divided by the
	approved daily route miles traveled by the respective
	transportation system.]
	(c)  Each district or county operating a regular
	transportation system is entitled to an allotment based on a rate
	per mile [the daily cost] per regular eligible student set [of
	operating and maintaining the regular transportation system and the
	linear density of that system. In determining the cost, the
	commissioner shall give consideration to factors affecting the
	actual cost of providing these transportation services in each
	district or county. The average actual cost is to be computed by the
	commissioner and included for consideration] by the legislature in
	the General Appropriations Act. [The allotment per mile of approved
	route may not exceed the amount set by appropriation.]
	(d)  A district or county may apply for and on approval of the
	commissioner receive an additional amount of up to 10 percent of its
	regular transportation allotment to be used for the transportation
	of children living within two miles of the school they attend who
	would be subject to hazardous traffic conditions or a high risk of
	violence if they walked to school.
	(d-1)  For purposes of Subsection (d), each board of trustees
	shall provide to the commissioner an explanation of the hazardous
	traffic conditions or areas presenting a high risk of violence
	applicable to that district and shall identify the specific
	hazardous or high-risk areas for which the allocation is
	requested.  A hazardous traffic condition exists where no walkway
	is provided and children must walk along or cross a freeway or
	expressway, an underpass, an overpass or a bridge, an uncontrolled
	major traffic artery, an industrial or commercial area, or another
	comparable condition.  An area presents a high risk of violence if
	law enforcement records indicate a high incidence of violent crimes
	in the area.  Each board of trustees requesting funds for an area
	presenting a high risk of violence must, in addition to the
	explanation required by this subsection, provide the commissioner
	with consolidated law enforcement records that document violent
	crimes identified by reporting agencies within the relevant
	jurisdiction.
	(d-2)  A district or county may use all or part of any funds
	received under Subsection (d) to support community walking
	transportation programs, including walking school bus programs,
	provided that the district or county requires each supported
	program to submit a financial report to the district or county each
	semester that covers services provided by the program for the
	benefit of the district or county.  The commissioner shall adopt
	rules governing the transportation allotment as necessary to permit
	a district or county to receive funds under Subsection (d) that may
	be used to support innovative school safety projects, including
	community walking transportation programs as provided by this
	subsection and any other appropriate safety project, including
	rules defining an approved walking route mile that may be used as
	necessary in implementing this subsection.
	(e)  The commissioner may grant an amount set by
	appropriation for private or commercial transportation for
	eligible students from isolated areas. The need for this type of
	transportation grant shall be determined on an individual basis and
	the amount granted shall not exceed the actual cost. The grants may
	be made only in extreme hardship cases. A grant may not be made if
	the students live within two miles of an approved school bus route.
	(f)  The cost of transporting career and technology
	education students from one campus to another inside a district or
	from a sending district to another secondary public school for a
	career and technology program or an area career and technology
	school or to an approved post-secondary institution under a
	contract for instruction approved by the agency shall be reimbursed
	based on the number of actual miles traveled times the district's
	official extracurricular travel per mile rate as set by the board of
	trustees and approved by the agency.
	(g)  A school district or county that provides special
	transportation services for eligible special education students is
	entitled to a state allocation paid on a previous year's
	cost-per-mile basis.  The [maximum] rate per mile allowable shall
	be set by appropriation based on data gathered from the first year
	of each preceding biennium. Districts may use a portion of their
	support allocation to pay transportation costs, if necessary.  The
	commissioner may grant an amount set by appropriation for private
	transportation to reimburse parents or their agents for
	transporting eligible special education students. The mileage
	allowed shall be computed along the shortest public road from the
	student's home to school and back, morning and afternoon.  The need
	for this type transportation shall be determined on an individual
	basis and shall be approved only in extreme hardship cases.
	(h)  Funds allotted under this section must be used in
	providing transportation services.
	(i)  In the case of a district belonging to a county
	transportation system, the district's transportation allotment for
	purposes of determining a district's foundation school program
	allocations is determined on the basis of the number of approved
	daily route miles in the district [multiplied by the allotment per
	mile to which the county transportation system is entitled].
	(j)  The Texas School for the Deaf is entitled to an
	allotment under this section. The commissioner shall determine the
	appropriate allotment.
	(k)  Notwithstanding any other provision of this section,
	the commissioner may not reduce the allotment to which a district or
	county is entitled under this section because the district or
	county provides transportation for an eligible student to and from
	a child-care facility, as defined by Section 42.002, Human
	Resources Code, or a grandparent's residence instead of the
	student's residence, as authorized by Section 34.007[, if the
	transportation is provided within the approved routes of the
	district or county for the school the student attends].
	(l)  A school district may, with the funds allotted under
	this section, provide a bus pass or card for another transportation
	system to each student who is eligible to use the regular
	transportation system of the district but for whom the regular
	transportation system of the district is not a feasible method of
	providing transportation. The commissioner by rule shall provide
	procedures for a school district to provide bus passes or cards to
	students under this subsection.
	(m)  A school district shall be reimbursed on a per-mile
	basis for the cost of transporting a dual credit student to another
	campus in the district, a campus in another district, or a
	postsecondary educational institution for purposes of attending
	the course, if the course is not available at the student's campus.
	Sec. 48.152  [42.158].  NEW INSTRUCTIONAL FACILITY
	ALLOTMENT. (a) In this section:
	(1)  "Instructional facility" has the meaning assigned
	by Section 46.001.
	(2)  "New instructional facility" includes:
	(A)  a newly constructed instructional facility;
	(B)  a repurposed instructional facility; and
	(C)  a leased facility operating for the first
	time as an instructional facility with a minimum lease term of not
	less than 10 years.
	(b)  A school district is entitled to an additional allotment
	as provided by this section for operational expenses associated
	with opening a new instructional facility.
	(c) [(a-1)]  A school district entitled to an allotment
	under this section may use funds from the district's allotment to
	renovate an existing instructional facility to serve as a dedicated
	cybersecurity computer laboratory.
	(d) [(b)]  For the first school year in which students attend
	a new instructional facility, a school district is entitled to an
	allotment of $1,000 for each student in average daily attendance at
	the facility.  For the second school year in which students attend
	that instructional facility, a school district is entitled to an
	allotment of $1,000 for each additional student in average daily
	attendance at the facility.
	(e) [(c)]  For purposes of this section, the number of
	additional students in average daily attendance at a facility is
	the difference between the number of students in average daily
	attendance in the current year at that facility and the number of
	students in average daily attendance at that facility in the
	preceding year.
	(f)  The [(d)  Subject to Subsection (d-1), the] amount
	appropriated for allotments under this section may not exceed $100
	[$25] million in a school year.  If the total amount of allotments
	to which districts are entitled under this section for a school year
	exceeds the amount appropriated under this subsection, the
	commissioner shall reduce each district's allotment under this
	section in the manner provided by Section 48.266(f) [42.253(h)].
	[(d-1)     In addition to the appropriation amount described by
	Subsection (d), the amount of $1 million may be appropriated each
	school year to supplement the allotment to which a school district
	is entitled under this section that may be provided using the
	appropriation amount described by Subsection (d).     The
	commissioner shall first apply the funds appropriated under this
	subsection to prevent any reduction under Subsection (d) in the
	allotment for attendance at an eligible high school instructional
	facility, subject to the maximum amount of $1,000 for each student
	in average daily attendance.     Any funds remaining after preventing
	all reductions in amounts due for high school instructional
	facilities may be applied proportionally to all other eligible
	instructional facilities, subject to the maximum amount of $1,000
	for each student in average daily attendance.
	[(e)     A school district that is required to take action under
	Chapter 41 to reduce its wealth per student to the equalized wealth
	level is entitled to a credit, in the amount of the allotments to
	which the district is entitled under this section, against the
	total amount required under Section 41.093 for the district to
	purchase attendance credits. A school district that is otherwise
	ineligible for state aid under this chapter is entitled to receive
	allotments under this section.
	[(f)     The commissioner may adopt rules necessary to
	implement this section.
	[(g)  In this section:
	[(1)     "Instructional facility" has the meaning
	assigned by Section 46.001.
	[(2)  "New instructional facility" includes:
	[(A)  a newly constructed instructional facility;
	[(B)  a repurposed instructional facility; and
	[(C)     a leased facility operating for the first
	time as an instructional facility with a minimum lease term of not
	less than 10 years.]
	SECTION 1.024.  Subchapter D, Chapter 48, Education Code, as
	added by this Act, is amended by adding Sections 48.153, 48.154,
	48.155, 48.156, and 48.157 to read as follows:
	Sec. 48.153.  EDUCATOR SALARY TRANSITION ALLOTMENT FOR
	MINIMUM SALARY INCREASE. (a) A school district to which Section
	21.402 applies for the 2019-2020 school year is entitled to receive
	an annual allotment as determined by the following formula:
	A = 1.5 X S - ((CYM&O - BYM&O) X ADA)
	where:
	"A" is the allotment a district receives for purposes of
	paying the increased costs associated with the minimum salary
	schedule under Section 21.402 beginning with the 2019-2020 school
	year;
	"S" is the total amount of additional costs a district would
	be required to pay for salary and benefits for employees subject to
	the minimum salary schedule in the 2017-2018 school year if the
	minimum salary schedule for the 2019-2020 school year applied to
	those employees;
	"CYM&O" is the amount of a district's maintenance and
	operations entitlement under this chapter per student in average
	daily attendance for the current school year;
	"BYM&O" is the amount of a district's maintenance and
	operations entitlement under this chapter per student in average
	daily attendance for the 2018-2019 school year; and
	"ADA" is the average daily attendance for a district for the
	current school year.
	(b)  For purposes of calculating the formula in Subsection
	(a), the commissioner shall:
	(1)  if the value of "A" results in a negative number,
	use zero for the value of "A";
	(2)  include in the calculation of an employee's salary
	and benefits an additional 4.2 percent of the amount that the
	employee is entitled to receive under the minimum salary schedule
	in effect for the 2019-2020 school year for the increased costs of
	Medicare and other payroll benefits;
	(3)  exclude 50 percent of the following amounts to
	which a district is entitled in the calculation of a district's
	maintenance and operations entitlement:
	(A)  the early reading allotment under Section
	48.108;
	(B)  the educator effectiveness allotment under
	Section 48.154; and
	(C)  amounts received as educator effectiveness
	fee reimbursement under Section 48.157;
	(4)  adjust the calculation under Subsection (a) to
	reflect:
	(A)  a reduction in tax effort by a district;
	(B)  property value adjustments due to a disaster;
	(C)  any additional state aid due to disaster
	remediation; and
	(D)  the sparsity adjustment under Section
	48.052;
	(5)  exclude funding provided to a district for the
	2018-2019 school year under former Sections 41.002(e)-(g) and
	former Subchapter H, Chapter 42;
	(6)  if a school district receives a waiver relating to
	eligibility requirements for the national free or reduced-price
	lunch program under 42 U.S.C. Section 1751 et seq., use the number
	of educationally disadvantaged students on which the district's
	entitlement to compensatory education funds was based for the
	school year before the school year in which the district received
	the waiver, adjusted for estimated enrollment growth; and
	(7)  include increased state contributions made under
	Section 825.405, Government Code, for the current school year as
	compared to the 2018-2019 school year.
	(c)  A decision by the commissioner under this section is
	final and may not be appealed.
	Sec. 48.154.  EDUCATOR EFFECTIVENESS ALLOTMENT. (a) In this
	section, "classroom teacher" has the meaning assigned by Section
	21.751.
	(b)  For each classroom teacher with a teacher designation
	under Subchapter P, Chapter 21, employed by a school district, the
	school district is entitled to an allotment equal to:
	A = B + (SCE X DM)
	where:
	"A" is the allotment provided to a school district per
	classroom teacher who holds a teacher designation;
	"B" is the applicable base amount for a classroom teacher
	provided under Subsection (c);
	"SCE" is the state compensatory education factor determined
	under Subsection (d); and
	"DM" is the applicable designation multiplier for a classroom
	teacher under Subsection (e).
	(c)  The base amount for each classroom teacher with a
	teacher designation is as follows:
	(1)  $3,000 for each recognized teacher;
	(2)  $6,000 for each exemplary teacher; and
	(3)  $12,000 for each master teacher.
	(d)  The state compensatory education factor is the amount
	equal to:
	(1)  the sum of the individual student disadvantage
	index tier values divided by the total student population of the
	campus at which the teacher for which the allotment is being
	calculated is employed, where the individual student disadvantage
	index tier values are determined as follows:
	(A)  for a student not assigned a weight for the
	compensatory education allotment under Section 48.104(b), 0;
	(B)  for a student assigned the smallest weight
	for the compensatory education allotment under Section 48.104(b),
	0.5;
	(C)  for a student assigned the second smallest
	weight for the compensatory education allotment under Section
	48.104(b), 1.0;
	(D)  for a student assigned the third smallest
	weight for the compensatory education allotment under Section
	48.104(b), 2.0;
	(E)  for a student assigned the second greatest
	weight for the compensatory education allotment under Section
	48.104(b), 3.0; and
	(F)  for a student assigned the greatest weight
	under Section 48.104(b), 4.0; or
	(2)  if the school district qualifies as a rural school
	district based on criteria adopted by the commissioner, the value
	that is the lesser of:
	(A)  4.0; or
	(B)  the value that results from Subdivision (1)
	plus 2.0.
	(e)  The designation multiplier is as follows for the
	applicable teacher designation:
	(1)  $1,500 for recognized;
	(2)  $3,000 for exemplary; and
	(3)  $5,000 for master.
	(f)  A district's allotment under Subsection (b) for a
	classroom teacher may not be greater than $32,000.
	(g)  A school district is not eligible for an allotment under
	Subsection (b) for a classroom teacher whose designation has
	expired or been revoked.
	(h)  The commissioner shall provide in an easily readable
	format a list of campuses with the potential allotment amounts that
	would be available for teachers with designations employed at the
	campus.
	(i)  A district shall annually certify that all funds
	received under this section were used for:
	(1)  educator compensation;
	(2)  costs associated with implementing Subchapter P,
	Chapter 21; or
	(3)  professional development for educators.
	(j)  The commissioner shall provide funding under this
	section for teacher designations made on the basis of a classroom
	teacher's performance during the 2018-2019 school year if the
	district:
	(1)  receives approval from the commissioner during the
	2019-2020 school year for the district's local teacher designation
	system; and
	(2)  provides compensation to a classroom teacher for
	the 2019-2020 school year based on the teacher's qualifying
	performance for a designation.
	(j-1)  Subsection (j) and this subsection expire September
	1, 2020.
	Sec. 48.155.  COLLEGE PREPARATION ASSESSMENT REIMBURSEMENT.
	A school district is entitled to reimbursement for the amount of
	fees paid by the district for the administration of an assessment
	instrument under Section 39.0261(a)(3).
	Sec. 48.156.  CERTIFICATION EXAMINATION REIMBURSEMENT. A
	school district is entitled to reimbursement for the amount of a
	subsidy paid by the district for a certification examination under
	Section 29.190(a) as provided by Section 29.190(c).
	Sec. 48.157.  EDUCATOR EFFECTIVENESS FEE REIMBURSEMENT. (a)
	A school district is entitled to reimbursement for any fee paid
	under Subchapter P, Chapter 21, or membership fees paid to the
	National Board for Professional Standards for the purpose of
	Section 21.753(b).
	(b)  The commissioner shall provide reimbursement under this
	section for fees relating to teacher designations made on the basis
	of a classroom teacher's performance during the 2018-2019 school
	year if the district:
	(1)  receives approval from the commissioner during the
	2019-2020 school year for the district's local teacher designation
	system; and
	(2)  provides compensation to a classroom teacher for
	the 2019-2020 school year based on the teacher's qualifying
	performance for a designation.
	(b-1)  Subsection (b) and this subsection expire September
	1, 2020.
	SECTION 1.025.  Chapter 48, Education Code, as added by this
	Act, is amended by adding Subchapter E, and a heading is added to
	that subchapter to read as follows:
	SUBCHAPTER E. TIER TWO ENTITLEMENT
	SECTION 1.026.  Sections 42.301, 42.302, 42.303, and 42.304,
	Education Code, are transferred to Subchapter E, Chapter 48,
	Education Code, as added by this Act, redesignated as Sections
	48.201, 48.202, 48.203, and 48.204, Education Code, and amended to
	read as follows:
	Sec. 48.201  [42.301].  PURPOSE. The purpose of the tier
	two [guaranteed yield] component of the Foundation School Program
	is to provide each school district with the opportunity to provide
	the basic program and to supplement that program at a level of its
	own choice. An allotment under this subchapter may be used for any
	legal purpose other than capital outlay or debt service.
	Sec. 48.202  [42.302]. TIER TWO ALLOTMENT. (a) Each school
	district is guaranteed a specified amount per weighted student in
	state and local funds for each cent of tax effort over that required
	for the district's local fund assignment up to the maximum level
	specified in this subchapter. The amount of state support, subject
	only to the maximum amount under Section 48.203 [42.303], is
	determined by the formula:
	GYA = (GL X WADA X DTR X 100) - LR
	where:
	"GYA" is the guaranteed yield amount of state funds to be
	allocated to the district;
	"GL" is the dollar amount guaranteed level of state and local
	funds per weighted student per cent of tax effort, which is an
	amount described by Subsection (a-1) or a greater amount for any
	year provided by appropriation;
	"WADA" is the number of students in weighted average daily
	attendance, which is calculated by dividing the sum of the school
	district's allotments under Subchapters B and C[, less any
	allotment to the district for transportation, any allotment under
	Section 42.158 or 42.160, and 50 percent of the adjustment under
	Section 42.102,] by the basic allotment for the applicable year;
	"DTR" is the district enrichment tax rate of the school
	district, which is determined by subtracting the amounts specified
	by Subsection (b) from the total amount of maintenance and
	operations taxes collected by the school district for the
	applicable school year and dividing the difference by the quotient
	of the district's taxable value of property as determined under
	Subchapter M, Chapter 403, Government Code, or, if applicable,
	under Section 48.258 [42.2521], divided by 100; and
	"LR" is the local revenue, which is determined by multiplying
	"DTR" by the quotient of the district's taxable value of property as
	determined under Subchapter M, Chapter 403, Government Code, or, if
	applicable, under Section 48.258 [42.2521], divided by 100.
	(a-1)  For purposes of Subsection (a), the dollar amount
	guaranteed level of state and local funds per weighted student per
	cent of tax effort ("GL") for a school district is:
	(1)  the product of [greater of] the amount of district
	tax revenue per weighted student per cent of tax effort [that would
	be] available to a [the Austin Independent School District, as
	determined by the commissioner in cooperation with the Legislative
	Budget Board, if the reduction of the limitation on tax increases as
	provided by Section 11.26(a-1), (a-2), or (a-3), Tax Code, did not
	apply, or the amount of] district with maintenance and operations
	tax revenue per weighted student per cent of tax effort equal to the
	maximum amount provided per cent under Section 48.051(a) or (b)
	multiplied by 160 percent [used for purposes of this subdivision in
	the preceding school year], for the first eight [six] cents by which
	the district's maintenance and operations tax rate exceeds the
	district's tier one tax rate [equal to the sum of the product of the
	state compression percentage, as determined under Section 42.2516,
	multiplied by the maintenance and operations tax rate adopted by
	the district for the 2005 tax year and any additional tax effort
	included in calculating the district's compressed tax rate under
	Section 42.101(a-1)]; and
	(2)  subject to Subsection (f), the product of the
	amount of district tax revenue per weighted student per cent of tax
	effort available to a district with maintenance and operations tax
	revenue per weighted student per cent of tax effort equal to the
	maximum amount provided per cent under Section 48.051(a) or (b)
	multiplied by 80 percent [$31.95], for the district's maintenance
	and operations tax effort that exceeds the amount of tax effort
	described by Subdivision (1).
	(a-2)  The limitation on district enrichment tax rate
	("DTR") under Section 48.203 [42.303] does not apply to the
	district's maintenance and operations tax effort described by
	Subsection (a-1)(1).
	(b)  In computing the district enrichment tax rate of a
	school district, the total amount of maintenance and operations
	taxes collected by the school district does not include the amount
	of:
	(1)  the district's local fund assignment under Section
	48.256 [42.252]; or
	(2)  taxes paid into a tax increment fund under Chapter
	311, Tax Code.
	(c)  For purposes of this section, school district taxes for
	which credit is granted under Section 31.035, 31.036, or 31.037,
	Tax Code, are considered taxes collected by the school district as
	if the taxes were paid when the credit for the taxes was granted.
	(d)  For purposes of this section, the total amount of
	maintenance and operations taxes collected for an applicable school
	year by a school district with alternate tax dates, as authorized by
	Section 26.135, Tax Code, is the amount of taxes collected on or
	after January 1 of the year in which the school year begins and not
	later than December 31 of the same year.
	(e)  For purposes of this section, school district taxes for
	which credit is granted under former Subchapter D, Chapter 313, Tax
	Code, are considered taxes collected by the school district as if
	the taxes were paid when the credit for the taxes was granted.
	(f)  For a school year in which a school district's dollar
	amount guaranteed level of state and local funds under Subsection
	(a-1)(2) results in a greater amount of district tax revenue per
	weighted student per cent of tax effort than for the preceding
	school year, the school district shall reduce the district's tax
	rate under Section 45.0032(b)(2) for that tax year to a rate that
	results in the amount of district tax revenue per weighted student
	per cent of tax effort available to the district for the preceding
	year. A school district is not entitled to the amount equal to the
	increase of district tax revenue described under this section
	during the tax year in which the district must reduce the district's
	tax rate. This subsection does not apply if the amount of state
	funds for a school year specifically excludes the amount necessary
	to provide the dollar amount guaranteed level of state and local
	funds per weighted student per cent of tax effort under Subsection
	(a-1)(2) [If a school district imposes a maintenance and operations
	tax at a rate greater than the rate equal to the product of the state
	compression percentage, as determined under Section 42.2516,
	multiplied by the maintenance and operations tax rate adopted by
	the district for the 2005 tax year, the district is entitled to
	receive an allotment under this section on the basis of that greater
	tax effort].
	Sec. 48.203 [42.303].  LIMITATION ON ENRICHMENT TAX RATE.
	The district enrichment tax rate ("DTR") under Section 48.202
	[42.302] may not exceed the amount per $100 of valuation by which
	the maximum rate permitted under Section 45.003 exceeds the rate
	used to determine the district's local share under Section 48.256
	[42.252], or a greater amount for any year provided by
	appropriation.
	Sec. 48.204 [42.304].  COMPUTATION OF AID FOR DISTRICT ON
	MILITARY RESERVATION OR AT STATE SCHOOL. State assistance under
	this subchapter for a school district located on a federal military
	installation or at Moody State School is computed using the average
	tax rate and property value per student of school districts in the
	county, as determined by the commissioner.
	SECTION 1.027.  Chapter 48, Education Code, as added by this
	Act, is amended by adding Subchapter F, and a heading is added to
	that subchapter to read as follows:
	SUBCHAPTER F. FINANCING THE PROGRAM
	SECTION 1.028.  Sections 42.251, 42.2511, 42.2514, 42.2515,
	42.2516, and 42.252, Education Code, are transferred to Subchapter
	F, Chapter 48, Education Code, as added by this Act, redesignated as
	Sections 48.251, 48.252, 48.253, 48.254, 48.255, and 48.256,
	Education Code, and amended to read as follows:
	Sec. 48.251 [42.251].  FINANCING; GENERAL RULE. (a) The
	cost of the Foundation School Program for a school district is the
	total sum of:
	(1)  the sum of the tier one allotments and other
	funding as follows:
	(A)  the basic allotment under Subchapter B;
	(B)  [and] the student-based [special] allotments
	under Subchapter C; and
	(C)  the additional funding under Subchapter D;
	and
	(2)  [, computed in accordance with this chapter,
	constitute the tier one allotments. The sum of the tier one
	allotments and] the tier two allotment [guaranteed yield
	allotments] under Subchapter E.
	(b)  The sum of the Foundation School Program maintenance and
	operations costs for all accredited school districts in this state
	constitutes [F, computed in accordance with this chapter,
	constitute] the total maintenance and operations cost of the
	Foundation School Program.
	(c) [(b)]  The program shall be financed by:
	(1)  state available school funds distributed in
	accordance with the law [ad valorem tax revenue generated by an
	equalized uniform school district effort];
	(2)  ad valorem tax revenue generated by local school
	district effort [in excess of the equalized uniform school district
	effort]; and
	(3)  [state available school funds distributed in
	accordance with law; and
	[(4)]  state funds appropriated for the purposes of
	public school education and allocated to each district in an amount
	sufficient to finance the cost of each district's Foundation School
	Program not covered by other funds specified in this subsection.
	Sec. 48.252 [42.2511].  SCHOOL DISTRICT ENTITLEMENT FOR
	CERTAIN STUDENTS. (a) This section applies only to:
	(1)  a school district and an open-enrollment charter
	school that enter into a contract to operate a district campus as
	provided by Section 11.174; and
	(2)  a charter granted by a school district for a
	program operated by an entity that has entered into a contract under
	Section 11.174, provided that the district does not appoint a
	majority of the governing body of the charter holder.
	(b)  Notwithstanding any other provision of this chapter or
	Chapter 49 [41], a school district subject to this section is
	entitled to receive for each student in average daily attendance at
	the campus described by Subsection (a) an amount equivalent to the
	difference, if the difference results in increased funding,
	between:
	(1)  the amount described by Section 12.106; and
	(2)  the amount to which the district would be entitled
	under this chapter.
	(c)  The commissioner shall adopt rules as necessary to
	administer this section.
	Sec. 48.253 [42.2514].  ADDITIONAL STATE AID FOR TAX
	INCREMENT FINANCING PAYMENTS. (a) For each school year, a school
	district[, including a school district that is otherwise ineligible
	for state aid under this chapter,] is entitled to state aid in an
	amount equal to the amount the district is required to pay into the
	tax increment fund for a reinvestment zone under Section
	311.013(n), Tax Code.
	(b)  A school district shall provide to the agency any
	agreements, amendments to agreements, or other information
	required by the agency to implement this section.
	(c)  This section does not apply to an amount a district is
	required to pay for an obligation refinanced or renewed after
	September 1, 2019.
	Sec. 48.254 [42.2515].  ADDITIONAL STATE AID FOR AD VALOREM
	TAX CREDITS UNDER TEXAS ECONOMIC DEVELOPMENT ACT. [(a)] For each
	school year, a school district, including a school district that is
	otherwise ineligible for state aid under this chapter, is entitled
	to state aid in an amount equal to the amount of all tax credits
	credited against ad valorem taxes of the district in that year under
	former Subchapter D, Chapter 313, Tax Code.
	[(b)     The commissioner may adopt rules to implement and
	administer this section.]
	Sec. 48.255 [42.2516].  STATE COMPRESSION PERCENTAGE. (a)
	In this title, "state compression percentage" means the percentage
	of the rate of $1.00 per $100 valuation of taxable property at which
	a school district must levy a [district's adopted] maintenance and
	operations tax to receive the full amount of the tier one allotment
	to which the district is entitled under this chapter.
	(b)  The [tax rate for the 2005 tax year that serves as the
	basis for state funding. If the] state compression percentage is:
	(1)  96 percent; or
	(2)  a lower percentage set [not established] by
	appropriation for a school year.
	(c)  The[, the] commissioner may adopt rules as necessary to
	implement this section. [shall determine the state compression
	percentage for each school year based on the percentage by which a
	district is able to reduce the district's maintenance and
	operations tax rate for that year, as compared to the district's
	adopted maintenance and operations tax rate for the 2005 tax year,
	as a result of state funds appropriated for that year from the
	property tax relief fund established under Section 403.109,
	Government Code, or from another funding source available for
	school district property tax relief.
	[(g)     The commissioner may adopt rules necessary to
	implement this section.
	[(h)     A determination by the commissioner under this section
	is final and may not be appealed.]
	Sec. 48.256 [42.252].  LOCAL SHARE OF PROGRAM COST (TIER
	ONE). (a) Each school district's share of the Foundation School
	Program is determined by the following formula:
	LFA = TR X DPV
	where:
	"LFA" is the school district's local share;
	"TR" is the school district's adopted tier one maintenance
	and operations [a] tax rate, as described by Section 45.0032(c)
	[which] for each hundred dollars of valuation [is an effective tax
	rate of the amount equal to the product of the state compression
	percentage, as determined under Section 42.2516, multiplied by the
	lesser of:
	[(1)  $1.50; or
	[(2)     the maintenance and operations tax rate adopted
	by the district for the 2005 tax year]; and
	"DPV" is the taxable value of property in the school district
	for the preceding tax year determined under Subchapter M, Chapter
	403, Government Code.
	[(a-1)     Notwithstanding Subsection (a), for a school
	district that adopted a maintenance and operations tax rate for the
	2005 tax year below the maximum rate permitted by law for that year,
	the district's tax rate ("TR") includes the tax effort included in
	calculating the district's compressed tax rate under Section
	42.101(a-1).]
	(b)  The commissioner shall adjust the values reported by [in
	the official report of] the comptroller [as required by Section
	5.09(a), Tax Code,] to reflect reductions in taxable value of
	property resulting from natural or economic disaster [after January
	1] in the year in which the valuations are determined. The decision
	of the commissioner is final. An adjustment does not affect the
	local fund assignment of any other school district.
	(c)  Appeals of district values shall be held pursuant to
	Section 403.303, Government Code.
	(d)  A school district must raise its total local share of
	the Foundation School Program to be eligible to receive foundation
	school fund payments.
	SECTION 1.029.  Subchapter F, Chapter 48, Education Code, as
	added by this Act, is amended by adding Section 48.257 to read as
	follows:
	Sec. 48.257.  LOCAL REVENUE LEVEL IN EXCESS OF ENTITLEMENT.
	(a) Subject to Subsection (b), if a school district's tier one
	revenue level, which is the sum of the district's tier one local
	share under Section 48.256 and distribution from the state
	available school fund, exceeds the district's entitlement under
	Section 48.266(a)(1), the district must reduce the district's tier
	one revenue level in accordance with Chapter 49 to a level not to
	exceed the district's entitlement under Section 48.266(a)(1).
	(b)  This subsection applies only to a school district to
	which Subsection (a) applies. If the sum of a district's
	maintenance and operations tax collections for the current tax year
	minus the district's tier one revenue level under Subsection (a) is
	less than the amount of the district's entitlement under Section
	48.266(a)(1), the agency shall adjust the amount of the district's
	tier one revenue level under Subsection (a) to ensure that the
	district retains the amount of local funds necessary for the
	district's entitlement under Section 48.266(a)(1).
	(c)  For purposes of Subsection (a), state aid to which a
	district is entitled under this chapter that is not described by
	Section 48.266(a)(1) or (2) may offset the amount by which a
	district must reduce the district's tier one revenue level under
	Subsection (a). Any amount of state aid used as an offset under this
	subsection shall reduce the amount of state aid to which the
	district is entitled.
	(d)  Except as provided by Subsection (e), a school district
	is entitled to retain the total amount of the district's tier two
	local share described by Section 48.266(a)(5)(A).
	(e)  In any school year for which the amount of state funds
	appropriated specifically excludes the amount necessary to provide
	the dollar amount guaranteed level of state and local funds per
	weighted student per cent of tax effort under Section
	48.202(a-1)(1), a district may only retain the amount of the
	district's tier two local share described by Section
	48.266(a)(5)(A) equal to the amount of revenue that would be
	generated based on the amount appropriated for the dollar amount
	guaranteed level of state and local funds.
	(f)  The amount of a school district's tier two local share
	described by Section 48.266(a)(5)(B) to which a district is
	entitled may not exceed the amount described by Section
	48.202(a-1)(2).
	SECTION 1.030.  Sections 41.002(e), (f), and (g), Education
	Code, are transferred to Section 48.257, Education Code, as added
	by this Act, redesignated as Sections 48.257(g), (h), and (i),
	Education Code, and amended to read as follows:
	(g) [(e)]  Notwithstanding Subsections [Subsection] (a),
	(d), and (f), and except as provided by Subsection (i) [(g)], in
	accordance with a determination of the commissioner, the local
	revenue level [wealth per student] that a school district may have
	after exercising an option under Section 49.002(2) [41.003(2)] or
	(3) may not be less than the amount needed to maintain state and
	local revenue in an amount equal to state and local revenue per
	weighted student for maintenance and operation of the district for
	the 1992-1993 school year less the district's current year
	distribution per weighted student from the available school fund,
	other than amounts distributed under Chapter 31, if the district
	imposes an effective tax rate for maintenance and operation of the
	district equal to the greater of the district's current tax rate or
	$1.50 on the $100 valuation of taxable property.
	(h) [(f)]  For purposes of Subsection (g) [(e)], a school
	district's effective tax rate is determined by dividing the total
	amount of taxes collected by the district for the applicable school
	year less any amounts paid into a tax increment fund under Chapter
	311, Tax Code, by the quotient of the district's taxable value of
	property, as determined under Subchapter M, Chapter 403, Government
	Code, divided by 100.
	(i) [(g)]  The local revenue level [wealth per student] that
	a district may have under Subsection (g) [(e)] is adjusted as
	follows:
	ALRL [AWPS] = LRL [WPS] X (((ERL [EWL]/280,000 - 1) X DTR/1.17) + 1)
	where:
	"ALRL" ["AWPS"] is the district's local revenue level
	[wealth per student];
	"LRL" ["WPS"] is the district's local revenue level
	[wealth per student] determined under Subsection (g) [(e)];
	"ERL" ["EWL"] is the local revenue level under this
	section to which a district is entitled [equalized wealth level];
	and
	"DTR" is the district's adopted maintenance and
	operations tax rate for the current school year.
	SECTION 1.031.  Section 48.257, Education Code, as added by
	this Act, is amended by adding Subsections (j) and (j-1) to read as
	follows:
	(j)  Notwithstanding any other provision of this section,
	the local revenue level that a school district may have under
	Subsections (g)-(i) is reduced by the following amounts:
	(1)  for the 2020-2021 school year, an amount equal to
	20 percent of the difference between the local revenue level for the
	district calculated under Subsections (g)-(i) and the local revenue
	level permitted under Subsections (a), (d), and (f);
	(2)  for the 2021-2022 school year, an amount equal to
	40 percent of the difference between the local revenue level for the
	district calculated under Subsections (g)-(i) and the local revenue
	level permitted under Subsections (a), (d), and (f);
	(3)  for the 2022-2023 school year, an amount equal to
	60 percent of the difference between the local revenue level for the
	district calculated under Subsections (g)-(i) and the local revenue
	level permitted under Subsections (a), (d), and (f); and
	(4)  for the 2023-2024 school year, an amount equal to
	80 percent of the difference between the local revenue level for the
	district calculated under Subsections (g)-(i) and the local revenue
	level permitted under Subsections (a), (d), and (f).
	(j-1)  Subsection (j) and this subsection expire September
	1, 2024.
	SECTION 1.032.  Sections 42.2521, 42.2522, 42.2523,
	42.2524, 42.2525, 42.2526, 42.2527, 42.2528, 42.253, 42.2531,
	42.2532, 42.254, 42.255, 42.257, 42.258, 42.259, 42.2591, 42.260,
	and 42.262, Education Code, are transferred to Subchapter F,
	Chapter 48, Education Code, as added by this Act, redesignated as
	Sections 48.258, 48.259, 48.260, 48.261, 48.262, 48.263, 48.264,
	48.265, 48.266, 48.267, 48.268, 48.269, 48.270, 48.271, 48.272,
	48.273, 48.274, 48.275, and 48.276, Education Code, and amended to
	read as follows:
	Sec. 48.258 [42.2521].  ADJUSTMENT FOR RAPID DECLINE IN
	TAXABLE VALUE OF PROPERTY. (a) For purposes of Chapters [41 and]
	46 and 49 and this chapter, and to the extent money specifically
	authorized to be used under this section is available, the
	commissioner shall adjust the taxable value of property in a school
	district that, due to factors beyond the control of the board of
	trustees, experiences a rapid decline in the tax base used in
	calculating taxable values in excess of four percent of the tax base
	used in the preceding year.
	(b)  To the extent that a sufficient amount of money is not
	available to fund all adjustments under this section, the
	commissioner shall reduce adjustments in the manner provided by
	Section 48.266(f) [42.253(h)] so that the total amount of
	adjustments equals the amount of money available to fund the
	adjustments.
	(c)  A decision of the commissioner under this section is
	final and may not be appealed.
	Sec. 48.259 [42.2522].  ADJUSTMENT FOR OPTIONAL HOMESTEAD
	EXEMPTION. (a) In any school year, the commissioner may not
	provide funding under this chapter or Chapter 46 based on a school
	district's taxable value of property computed in accordance with
	Section 403.302(d)(2), Government Code, unless:
	(1)  funds are specifically appropriated for purposes
	of this section; or
	(2)  the commissioner determines that the total amount
	of state funds appropriated for purposes of the Foundation School
	Program for the school year exceeds the amount of state funds
	distributed to school districts in accordance with Section 48.266
	[42.253] based on the taxable values of property in school
	districts computed in accordance with Section 403.302(d),
	Government Code, without any deduction for residence homestead
	exemptions granted under Section 11.13(n), Tax Code.
	(b)  In making a determination under Subsection (a)(2), the
	commissioner shall:
	(1)  notwithstanding Section 48.266(b) [42.253(b)],
	reduce the entitlement under this chapter of a school district
	whose final taxable value of property is higher than the estimate
	under Section 48.269 [42.254] and make payments to school districts
	accordingly; and
	(2)  give priority to school districts that, due to
	factors beyond the control of the board of trustees, experience a
	rapid decline in the tax base used in calculating taxable values in
	excess of four percent of the tax base used in the preceding year.
	(c)  In the first year of a state fiscal biennium, before
	providing funding as provided by Subsection (a)(2), the
	commissioner shall ensure that sufficient appropriated funds for
	purposes of the Foundation School Program are available for the
	second year of the biennium, including funds to be used for purposes
	of Section 48.258 [42.2521].
	(d)  If the commissioner determines that the amount of funds
	available under Subsection (a)(1) or (2) does not at least equal the
	total amount of state funding to which districts would be entitled
	if state funding under this chapter were based on the taxable values
	of property in school districts computed in accordance with Section
	403.302(d)(2), Government Code, the commissioner may, to the extent
	necessary, provide state funding based on a uniform lesser fraction
	of the deduction under Section 403.302(d)(2), Government Code.
	(e)  The commissioner shall notify school districts as soon
	as practicable as to the availability of funds under this section.
	For purposes of computing a ratification [rollback] tax rate under
	Section 26.08, Tax Code, a district shall adjust the district's tax
	rate limit to reflect assistance received under this section.
	Sec. 48.260 [42.2523].  ADJUSTMENT FOR PROPERTY VALUE
	AFFECTED BY STATE OF DISASTER. (a) For purposes of Chapters [41
	and] 46 and 49 and this chapter, the commissioner shall adjust the
	taxable value of property of a school district all or part of which
	is located in an area declared a disaster area by the governor under
	Chapter 418, Government Code, as necessary to ensure that the
	district receives funding based as soon as possible on property
	values as affected by the disaster.
	(b)  The commissioner may fund adjustments under this
	section using funds specifically appropriated for the purpose or
	other funds available to the commissioner for that purpose.
	(c) [(d)]  A decision of the commissioner under this section
	is final and may not be appealed.
	Sec. 48.261 [42.2524].  REIMBURSEMENT FOR DISASTER
	REMEDIATION COSTS. (a) This section applies only to a school
	district all or part of which is located in an area declared a
	disaster area by the governor under Chapter 418, Government Code,
	and that incurs disaster remediation costs as a result of the
	disaster.
	(b)  During the two-year period following the date of the
	governor's initial proclamation or executive order declaring a
	state of disaster, a district may apply to the commissioner for
	reimbursement of disaster remediation costs that the district pays
	during that period and does not anticipate recovering through
	insurance proceeds, federal disaster relief payments, or another
	similar source of reimbursement.
	(c)  The commissioner may provide reimbursement under this
	section only if funds are available for that purpose from [as
	follows]:
	(1)  [reimbursement for a school district not required
	to take action under Chapter 41 may be provided from:
	[(A)]  amounts appropriated for that purpose,
	including amounts appropriated for school [those] districts for
	that purpose to the disaster contingency fund established under
	Section 418.073, Government Code; or
	(2) [(B)]  Foundation School Program funds available
	for that purpose, based on a determination by the commissioner that
	the amount appropriated for the Foundation School Program,
	including the facilities component as provided by Chapter 46,
	exceeds the amount to which districts are entitled under this
	chapter and Chapter 46[; and
	[(2)     reimbursement for a school district required to
	take action under Chapter 41 may be provided from funds described by
	Subdivision (1)(B) if funds remain available after fully
	reimbursing each school district described by Subdivision (1) for
	its disaster remediation costs].
	(d)  [If the amount of money available for purposes of
	reimbursing school districts not required to take action under
	Chapter 41 is not sufficient to fully reimburse each district's
	disaster remediation costs, the commissioner shall reduce the
	amount of assistance provided to each of those districts
	proportionately. If the amount of money available for purposes of
	reimbursing school districts required to take action under Chapter
	41 is not sufficient to fully reimburse each district's disaster
	remediation costs, the commissioner shall reduce the amount of
	assistance provided to each of those districts proportionately.
	[(e)]  A district seeking reimbursement under this section
	must provide the commissioner with adequate documentation of the
	costs for which the district seeks reimbursement.
	(e)  [(f)     A district required to take action under Chapter
	41:
	[(1)     may, at its discretion, receive assistance
	provided under this section either as a payment of state aid under
	this chapter or as a reduction in the total amount required to be
	paid by the district for attendance credits under Section 41.093;
	and
	[(2)     may not obtain reimbursement under this section
	for the payment of any disaster remediation costs that resulted in a
	reduction under Section 41.0931 of the district's cost of
	attendance credits.
	[(h)]  The commissioner shall adopt rules necessary to
	implement this section, including rules defining "disaster
	remediation costs" for purposes of this section and specifying the
	type of documentation required under Subsection (d) [(e)].
	(f) [(i)]  Notwithstanding any other provision of this
	section, the commissioner may permit a district to use amounts
	provided to a district under this section to pay the costs of
	replacing a facility instead of repairing the facility. The
	commissioner shall ensure that a district that elects to replace a
	facility does not receive an amount under this section that exceeds
	the lesser of:
	(1)  the amount that would be provided to the district
	if the facility were repaired; or
	(2)  the amount necessary to replace the facility.
	(g) [(j)]  This section does not require the commissioner to
	provide any requested reimbursement. A decision of the
	commissioner regarding reimbursement is final and may not be
	appealed.
	Sec. 48.262 [42.2525].  ADJUSTMENTS FOR CERTAIN DISTRICTS
	RECEIVING FEDERAL IMPACT AID. The commissioner is granted the
	authority to ensure that school districts receiving federal impact
	aid due to the presence of a military installation or significant
	concentrations of military students do not receive more than an
	eight percent reduction should the federal government reduce
	appropriations to those schools.
	Sec. 48.263 [42.2526].  ADJUSTMENT FOR DISTRICT OPERATING
	PILOT PROGRAM. (a) This section applies only to a school district
	operating a pilot program authorized by Section 28.0255.
	(b)  Beginning with the first school year that follows the
	first school year in which students receive high school diplomas
	under the pilot program authorized by Section 28.0255 and
	continuing for every subsequent school year that the district
	operates the pilot program, the commissioner shall provide funding
	for the district's prekindergarten program under Section 29.153 on
	a full-day basis for a number of prekindergarten students equal to
	twice the number of students who received a high school diploma
	under the pilot program authorized by Section 28.0255 during the
	preceding school year.
	(c)  This section expires September 1, 2023.
	Sec. 48.264 [42.2527].  ADJUSTMENT FOR CERTAIN DISTRICTS
	WITH EARLY HIGH SCHOOL GRADUATION PROGRAMS. (a) As a pilot program
	to enable the state to evaluate the benefit of providing additional
	funding at the prekindergarten level for low-income students, the
	commissioner shall provide prekindergarten funding in accordance
	with this section to a school district located in a county that
	borders the United Mexican States and the Gulf of Mexico.
	(b)  The commissioner shall provide funding for a school
	district's prekindergarten program on a half-day basis for a number
	of low-income prekindergarten students equal to twice the number of
	students who received, as a result of participation in an early high
	school graduation program operated by the district, a high school
	diploma from the district during the preceding school year after
	three years of secondary school attendance.
	(c)  The commissioner may adopt rules necessary to implement
	this section.
	(d)  This section expires September 1, 2023.
	Sec. 48.265 [42.2528].  EXCESS FUNDS FOR VIDEO SURVEILLANCE
	OF SPECIAL EDUCATION SETTINGS. (a) Notwithstanding any other
	provision of law, if the commissioner determines that the amount
	appropriated for the purposes of the Foundation School Program
	exceeds the amount to which school districts are entitled under
	this chapter, the commissioner by rule shall establish a grant
	program through which excess funds are awarded as grants for the
	purchase of video equipment, or for the reimbursement of costs for
	previously purchased video equipment, used for monitoring special
	education classrooms or other special education settings required
	under Section 29.022.
	(b)  In awarding grants under this section, the commissioner
	shall give highest priority to districts with maintenance and
	operations tax rates at the greatest rates permitted by law. The
	commissioner shall also give priority to:
	(1)  districts with maintenance and operations tax
	rates at least equal to the state maximum compressed tax rate, as
	defined by Section 48.051(a) [42.101(a)], and lowest amounts of
	maintenance and operations tax revenue per weighted student; and
	(2)  districts with debt service tax rates near or
	equal to the greatest rates permitted by law.
	(c)  The commissioner may adopt rules to implement and
	administer this section.
	Sec. 48.266 [42.253].  DISTRIBUTION OF FOUNDATION SCHOOL
	FUND. (a) For each school year the commissioner shall determine:
	(1)  the amount of money to which a school district is
	entitled under Subchapters B, [and] C, and D;
	(2)  the amount of money to which a school district is
	entitled under Subchapter E [F];
	(3)  the amount of money allocated to the district from
	the available school fund;
	(4)  the amount of each district's tier one local share
	under Section 48.256 [42.252]; and
	(5)  the amount of each district's tier two local share
	under Section 48.202 for:
	(A)  the district's maintenance and operations
	tax effort described by Section 48.202(a-1)(1); and
	(B)  the district's maintenance and operations
	tax effort described by Section 48.202(a-1)(2) [42.302].
	(b)  Except as provided by this subsection, the commissioner
	shall base the determinations under Subsection (a) on the estimates
	provided to the legislature under Section 48.269 [42.254], or, if
	the General Appropriations Act provides estimates for that purpose,
	on the estimates provided under that Act, for each school district
	for each school year. The commissioner shall reduce the
	entitlement of each district that has a final taxable value of
	property for the second year of a state fiscal biennium that is
	higher than the estimate under Section 48.269 [42.254] or the
	General Appropriations Act, as applicable. A reduction under this
	subsection may not reduce the district's entitlement below the
	amount to which it is entitled at its actual taxable value of
	property.
	(c)  Each school district is entitled to an amount equal to
	the difference for that district between the sum of Subsections
	(a)(1) and (a)(2) and the sum of Subsections (a)(3), (a)(4), and
	(a)(5).
	(d)  The commissioner shall approve warrants to each school
	district equaling the amount of its entitlement except as provided
	by this section. Warrants for all money expended according to this
	chapter shall be approved and transmitted to treasurers or
	depositories of school districts in the same manner that warrants
	for state payments are transmitted. The total amount of the
	warrants issued under this section may not exceed the total amount
	appropriated for Foundation School Program purposes for that fiscal
	year.
	(e) [(g)]  If a school district demonstrates to the
	satisfaction of the commissioner that the estimate of the
	district's tax rate, student enrollment, or taxable value of
	property used in determining the amount of state funds to which the
	district is entitled are so inaccurate as to result in undue
	financial hardship to the district, the commissioner may adjust
	funding to that district in that school year to the extent that
	funds are available for that year.
	(f) [(h)]  If the amount appropriated for the Foundation
	School Program for the second year of a state fiscal biennium is
	less than the amount to which school districts and open-enrollment
	charter schools are entitled for that year, the commissioner shall
	certify the amount of the difference to the Legislative Budget
	Board not later than January 1 of the second year of the state
	fiscal biennium.  The Legislative Budget Board shall propose to the
	legislature that the certified amount be transferred to the
	foundation school fund from the economic stabilization fund and
	appropriated for the purpose of increases in allocations under this
	subsection.  If the legislature fails during the regular session to
	enact the proposed transfer and appropriation and there are not
	funds available under Subsection (h) [(j)], the commissioner shall
	adjust the total amounts due to each school district and
	open-enrollment charter school under this chapter and the total
	amounts necessary for each school district to comply with the
	requirements of Chapter 49 [41] by an amount determined by applying
	to each district and school the same percentage adjustment to the
	total amount of state and local revenue due to the district or
	school under this chapter and Chapter 49 [41] so that the total
	amount of the adjustment to all districts and schools results in an
	amount equal to the total adjustment necessary.  The following
	fiscal year:
	(1)  a district's or school's entitlement under this
	section is increased by an amount equal to the adjustment  made
	under this subsection; and
	(2)  the amount necessary for a district to comply with
	the requirements of Chapter 49 [41] is reduced by an amount
	necessary to ensure a district's full recovery of the adjustment
	made under this subsection.
	(g) [(i)]  Not later than March 1 each year, the commissioner
	shall determine the actual amount of state funds to which each
	school district is entitled under the allocation formulas in this
	chapter for the current school year and shall compare that amount
	with the amount of the warrants issued to each district for that
	year. If the amount of the warrants differs from the amount to
	which a district is entitled because of variations in the
	district's tax rate, student enrollment, or taxable value of
	property, the commissioner shall adjust the district's entitlement
	for the next fiscal year accordingly.
	(h) [(j)]  The legislature may appropriate funds necessary
	for increases under Subsection (g) [(i)] from funds that the
	comptroller, at any time during the fiscal year, finds are
	available.
	(i) [(k)]  The commissioner shall compute for each school
	district the total amount by which the district's allocation of
	state funds is increased or reduced under Subsection (g) [(i)] and
	shall certify that amount to the district.
	Sec. 48.267  [42.2531].  ADJUSTMENT BY COMMISSIONER. (a)
	The commissioner may make adjustments to amounts due to a school
	district under this chapter or Chapter 46, or to amounts necessary
	for a district to comply with the requirements of Chapter 49 [41],
	as provided by this section.
	(b)  A school district that has a major taxpayer, as
	determined by the commissioner, that because of a protest of the
	valuation of the taxpayer's property fails to pay all or a portion
	of the ad valorem taxes due to the district may apply to the
	commissioner to have the district's taxable value of property or ad
	valorem tax collections adjusted for purposes of this chapter or
	Chapter [41 or] 46 or 49. The commissioner may make the adjustment
	only to the extent the commissioner determines that making the
	adjustment will not:
	(1)  in the fiscal year in which the adjustment is made,
	cause the amount to which school districts are entitled under this
	chapter to exceed the amount appropriated for purposes of the
	Foundation School Program for that year; and
	(2)  if the adjustment is made in the first year of a
	state fiscal biennium, cause the amount to which school districts
	are entitled under this chapter for the second year of the biennium
	to exceed the amount appropriated for purposes of the Foundation
	School Program for that year.
	(c)  The commissioner shall recover the benefit of any
	adjustment made under this section by making offsetting adjustments
	in the school district's taxable value of property or ad valorem tax
	collections for purposes of this chapter or Chapter [41 or] 46 or 49
	on a final determination of the taxable value of property that was
	the basis of the original adjustment, or in the second school year
	following the year in which the adjustment is made, whichever is
	earlier.
	(d)  This section does not require the commissioner to make
	any requested adjustment. A determination by the commissioner
	under this section is final and may not be appealed.
	Sec. 48.268  [42.2532].  ADJUSTMENT FOR RESOLUTION OF
	DISPUTE OR ERROR RESULTING IN TAXATION OF SAME PROPERTY BY MULTIPLE
	SCHOOL DISTRICTS.  The commissioner shall adjust the amounts due to
	a school district under this chapter and Chapter 46 as necessary to
	account for the resolution of a dispute or error involving the
	district and another district by an agreement between the districts
	entered into under Section 31.112(c), Tax Code, or by a final order
	of the supreme court entered under Section 72.010, Local Government
	Code.
	Sec. 48.269  [42.254].  ESTIMATES REQUIRED. (a) Not later
	than October 1 of each even-numbered year:
	(1)  the agency shall submit to the legislature an
	estimate of the tax rate and student enrollment of each school
	district for the following biennium; and
	(2)  the comptroller shall submit to the legislature an
	estimate of the total taxable value of all property in the state as
	determined under Subchapter M, Chapter 403, Government Code, for
	the following biennium.
	(b)  The agency and the comptroller shall update the
	information provided to the legislature under Subsection (a) not
	later than March 1 of each odd-numbered year.
	Sec. 48.270  [42.255].  FALSIFICATION OF RECORDS; REPORT.
	When, in the opinion of the agency's director of school audits,
	audits or reviews of accounting, enrollment, or other records of a
	school district reveal deliberate falsification of the records, or
	violation of the provisions of this chapter, through which the
	district's share of state funds allocated under the authority of
	this chapter would be, or has been, illegally increased, the
	director shall promptly and fully report the fact to the State Board
	of Education, the state auditor, and the appropriate county
	attorney, district attorney, or criminal district attorney.
	Sec. 48.271  [42.257].  EFFECT OF APPRAISAL APPEAL. (a) If
	the final determination of an appeal under Chapter 42, Tax Code,
	results in a reduction in the taxable value of property that exceeds
	five percent of the total taxable value of property in the school
	district for the same tax year determined under Subchapter M,
	Chapter 403, Government Code, the commissioner shall request the
	comptroller to adjust its taxable property value findings for that
	year consistent with the final determination of the appraisal
	appeal.
	(b)  If the district would have received a greater amount
	from the foundation school fund for the applicable school year
	using the adjusted value, the commissioner shall add the difference
	to subsequent distributions to the district from the foundation
	school fund. An adjustment does not affect the local fund
	assignment of any other district.
	Sec. 48.272  [42.258].  RECOVERY OF OVERALLOCATED FUNDS.
	(a)  If a school district has received an overallocation of state
	funds, the agency shall, by withholding from subsequent allocations
	of state funds for the current or subsequent school year or by
	requesting and obtaining a refund, recover from the district an
	amount equal to the overallocation.
	(b) [(a-1)]  Notwithstanding Subsection (a), the agency may
	recover an overallocation of state funds over a period not to exceed
	the subsequent five school years if the commissioner determines
	that the overallocation was the result of exceptional circumstances
	reasonably caused by statutory changes to Chapter [41 or] 46 or 49
	or this chapter and related reporting requirements.
	(c) [(b)]  If a district fails to comply with a request for a
	refund under Subsection (a), the agency shall certify to the
	comptroller that the amount constitutes a debt for purposes of
	Section 403.055, Government Code. The agency shall provide to the
	comptroller the amount of the overallocation and any other
	information required by the comptroller. The comptroller may
	certify the amount of the debt to the attorney general for
	collection.
	(d) [(c)]  Any amounts recovered under this section shall be
	deposited in the foundation school fund.
	Sec. 48.273  [42.259].  FOUNDATION SCHOOL FUND TRANSFERS.
	(a) In this section:
	(1)  "Category 1 school district" means a school
	district having a wealth per student of less than one-half of the
	statewide average wealth per student.
	(2)  "Category 2 school district" means a school
	district having a wealth per student of at least one-half of the
	statewide average wealth per student but not more than the
	statewide average wealth per student.
	(3)  "Category 3 school district" means a school
	district having a wealth per student of more than the statewide
	average wealth per student.
	(4)  "Wealth per student" means the taxable property
	values reported by the comptroller to the commissioner under
	Section 48.256 [42.252] divided by the number of students in
	average daily attendance.
	(b)  Payments from the foundation school fund to each
	category 1 school district shall be made as follows:
	(1)  15 percent of the yearly entitlement of the
	district shall be paid in an installment to be made on or before the
	25th day of September of a fiscal year;
	(2)  80 percent of the yearly entitlement of the
	district shall be paid in eight equal installments to be made on or
	before the 25th day of October, November, December, January, March,
	May, June, and July; and
	(3)  five percent of the yearly entitlement of the
	district shall be paid in an installment to be made on or before the
	25th day of February.
	(c)  Payments from the foundation school fund to each
	category 2 school district shall be made as follows:
	(1)  22 percent of the yearly entitlement of the
	district shall be paid in an installment to be made on or before the
	25th day of September of a fiscal year;
	(2)  18 percent of the yearly entitlement of the
	district shall be paid in an installment to be made on or before the
	25th day of October;
	(3)  9.5 percent of the yearly entitlement of the
	district shall be paid in an installment to be made on or before the
	25th day of November;
	(4)  7.5 percent of the yearly entitlement of the
	district shall be paid in an installment to be made on or before the
	25th day of April;
	(5)  five percent of the yearly entitlement of the
	district shall be paid in an installment to be made on or before the
	25th day of May;
	(6)  10 percent of the yearly entitlement of the
	district shall be paid in an installment to be made on or before the
	25th day of June;
	(7)  13 percent of the yearly entitlement of the
	district shall be paid in an installment to be made on or before the
	25th day of July; and
	(8)  15 percent of the yearly entitlement of the
	district shall be paid in an installment to be made on or before the
	25th day of August.
	(d)  Payments from the foundation school fund to each
	category 3 school district shall be made as follows:
	(1)  45 percent of the yearly entitlement of the
	district shall be paid in an installment to be made on or before the
	25th day of September of a fiscal year;
	(2)  35 percent of the yearly entitlement of the
	district shall be paid in an installment to be made on or before the
	25th day of October; and
	(3)  20 percent of the yearly entitlement of the
	district shall be paid in an installment to be made on or before the
	25th day of August.
	(e)  The amount of any installment required by this section
	may be modified to provide a school district with the proper amount
	to which the district may be entitled by law and to correct errors
	in the allocation or distribution of funds. If an installment under
	this section is required to be equal to other installments, the
	amount of other installments may be adjusted to provide for that
	equality. A payment under this section is not invalid because it is
	not equal to other installments.
	(f)  Previously unpaid additional funds from prior fiscal
	years owed to a district shall be paid to the district together with
	the September payment of the current fiscal year entitlement.
	(g)  The commissioner shall make all annual Foundation
	School Program payments under this section for purposes described
	by Sections 45.252(a)(1) and (2) before the deadline established
	under Section 45.263(b) for payment of debt service on
	bonds.  Notwithstanding any other provision of this section, the
	commissioner may make Foundation School Program payments under this
	section after the deadline established under Section 45.263(b) only
	if the commissioner has not received notice under Section 45.258
	concerning a district's failure or inability to pay matured
	principal or interest on bonds.
	Sec. 48.274  [42.2591].  FOUNDATION SCHOOL FUND TRANSFERS
	TO CERTAIN CHARTER SCHOOLS. (a)  On the request of an
	open-enrollment charter school, the commissioner shall compare the
	student enrollment of the open-enrollment charter school for the
	current school year to the student enrollment of the school during
	the preceding school year.  If the number of students enrolled at
	the open-enrollment charter school for the current school year has
	increased by 10 percent or more from the number of students enrolled
	during the preceding school year, the open-enrollment charter
	school may request that payments from the foundation school fund to
	the school for the following school year and each subsequent school
	year, subject to Subsection (b), be made according to the schedule
	provided under Subsection (c).
	(b)  An open-enrollment charter school that qualifies to
	receive funding as provided by this section is entitled to receive
	funding in that manner for three school years.  On the expiration
	of that period, the commissioner shall determine the eligibility of
	the open-enrollment charter school to continue receiving payments
	from the foundation school fund under this section for an
	additional three school years.  Subsequently, the open-enrollment
	charter school must reestablish eligibility in the manner provided
	by this subsection every three school years.
	(c)  Payments from the foundation school fund to an
	open-enrollment charter school under this section shall be made as
	follows:
	(1)  22 percent of the yearly entitlement of the school
	shall be paid in an installment to be made on or before the 25th day
	of September of a fiscal year;
	(2)  18 percent of the yearly entitlement of the school
	shall be paid in an installment to be made on or before the 25th day
	of October;
	(3)  9.5 percent of the yearly entitlement of the
	school shall be paid in an installment to be made on or before the
	25th day of November;
	(4)  four percent of the yearly entitlement of the
	school shall be paid in an installment to be made on or before the
	25th day of December;
	(5)  four percent of the yearly entitlement of the
	school shall be paid in an installment to be made on or before the
	25th day of January;
	(6)  four percent of the yearly entitlement of the
	school shall be paid in an installment to be made on or before the
	25th day of February;
	(7)  four percent of the yearly entitlement of the
	school shall be paid in an installment to be made on or before the
	25th day of March;
	(8)  7.5 percent of the yearly entitlement of the
	school shall be paid in an installment to be made on or before the
	25th day of April;
	(9)  five percent of the yearly entitlement of the
	school shall be paid in an installment to be made on or before the
	25th day of May;
	(10)  seven percent of the yearly entitlement of the
	school shall be paid in an installment to be made on or before the
	25th day of June;
	(11)  seven percent of the yearly entitlement of the
	school shall be paid in an installment to be made on or before the
	25th day of July; and
	(12)  eight percent of the yearly entitlement of the
	school shall be paid in an installment to be made on or before the
	25th day of August.
	(d)  The amount of any installment required by this section
	may be modified to provide an open-enrollment charter school with
	the proper amount to which the school may be entitled by law and to
	correct errors in the allocation or distribution of funds.
	(e)  Previously unpaid additional funds from prior fiscal
	years owed to an open-enrollment charter school shall be paid to the
	school together with the September payment of the current fiscal
	year entitlement.
	Sec. 48.275  [42.260].  USE OF CERTAIN FUNDS. (a) In this
	section, "participating charter school" means an open-enrollment
	charter school that participates in the uniform group coverage
	program established under Chapter 1579, Insurance Code.
	(b)  The amount of additional funds to which each school
	district or participating charter school is entitled due to the
	increases in formula funding made by H.B. No. 3343, Acts of the 77th
	Legislature, Regular Session, 2001, and any subsequent legislation
	amending the provisions amended by that Act that increase formula
	funding under Chapter 49 [41] and this chapter to school districts
	and charter schools is available for purposes of Subsection (c).
	(c)  Notwithstanding any other provision of this code, a
	school district or participating charter school may use the sum of
	the following amounts of funds only to pay contributions under a
	group health coverage plan for district or school employees:
	(1)  the amount determined by multiplying the amount of
	$900 or the amount specified in the General Appropriations Act for
	that year for purposes of the state contribution under Section
	1579.251, Insurance Code, by the number of district or school
	employees who participate in a group health coverage plan provided
	by or through the district or school; and
	(2)  the difference between the amount necessary for
	the district or school to comply with Section 1581.052, Insurance
	Code, for the school year and the amount the district or school is
	required to use to provide health coverage under Section 1581.051,
	Insurance Code, for that year.
	(d)  A determination by the commissioner under this section
	is final and may not be appealed.
	[(e)     The commissioner may adopt rules to implement this
	section.]
	Sec. 48.276  [42.262].  TAX RATE CONVERSION FUND. (a) Each
	fiscal year, the commissioner shall identify amounts appropriated
	in the General Appropriations Act from the Foundation School
	Fund[,] to be deposited in the tax rate conversion fund in the
	general revenue fund. [The amount identified by the commissioner
	shall be sufficient to provide additional state aid to school
	districts to which the compressed tax rate modified under Section
	42.101(a-1) applies, in excess of the level of state aid to which
	the district would have been entitled had Section 42.101(a-1) not
	taken effect.]
	(b)  For the purposes of state aid payments to school
	districts under this chapter, the tax rate conversion fund shall be
	considered to be used in the same manner as the foundation school
	fund.
	SECTION 1.033.  Subchapter F, Chapter 48, Education Code, as
	added by this Act, is amended by adding Section 48.277 to read as
	follows:
	Sec. 48.277.  FORMULA TRANSITION GRANT. (a) Subject to
	Subsection (b), a school district is entitled to receive an annual
	allotment in the amount equal to the difference, if the difference
	is greater than zero, that results from subtracting the total
	maintenance and operations tax revenue per student in weighted
	average daily attendance for the school year for the current school
	year from the lesser of:
	(1)  the district's total maintenance and operations
	tax revenue per student in weighted average daily attendance for
	the 2018-2019 school year; or
	(2)  125 percent of the statewide average amount of
	maintenance and operations funding per student in weighted average
	daily attendance for the 2018-2019 school year.
	(b)  For purposes of calculating maintenance and operations
	funding under Subsection (a), the commissioner shall:
	(1)  include all state and federal funding, except for
	any funding provided under this section or former Subchapter H,
	Chapter 42;
	(2)  reduce the amounts calculated under Subsections
	(a)(1) and (2) by:
	(A)  for the 2020-2021 school year, 10 percent;
	and
	(B)  for the 2021-2022 school year, 20 percent;
	(3)  adjust the calculation to reflect a reduction in
	tax effort by a school district; and
	(4)  if a school district receives a waiver relating to
	eligibility requirements for the national free or reduced-price
	lunch program under 42 U.S.C. Section 1751 et seq., use the numbers
	of educationally disadvantaged students on which the district's
	entitlement to compensatory education funds was based for the
	school year before the school year in which the district received
	the waiver, adjusted for estimated enrollment growth.
	(c)  A decision by the commissioner under this section is
	final and may not be appealed.
	(d)  A school district is not entitled to an allotment under
	this section beginning with the 2022-2023 school year.
	(e)  This section expires September 1, 2024.
	SECTION 1.034.  Chapter 48, Education Code, as added by this
	Act, is amended by adding Subchapter G, and a heading is added to
	that subchapter to read as follows:
	SUBCHAPTER G. SCHOOL FACILITIES INVENTORY AND STANDARDS
	SECTION 1.035.  Sections 42.352 and 42.4101, Education Code,
	are transferred to Subchapter G, Chapter 48, Education Code, as
	added by this Act, redesignated as Sections 48.301 and 48.302,
	Education Code, and amended to read as follows:
	Sec. 48.301  [42.352]. FACILITIES STANDARDS. The State
	Board of Education shall establish standards for adequacy of school
	facilities. The standards shall include requirements related to
	space, educational adequacy, and construction quality. All
	facilities constructed after September 1, 1992, must meet the
	standards in order to be financed with state or local tax funds.
	Sec. 48.302  [42.4101].  ADDITIONAL ASSISTANCE FOR
	DISTRICTS WITH STUDENTS USING PUBLIC EDUCATION GRANTS. (a) A
	district is entitled to additional assistance under this section as
	provided by Section 29.203(c).
	(b)  The amount of additional assistance under this section
	is computed by subtracting the number of students residing in the
	district and using public education grants to attend school in
	another district for the year in which the assistance is granted
	from the number of students using public education grants to attend
	school in the district for that year and multiplying the difference
	by $266.
	[(c)     If a district to which this section applies is entitled
	to the maximum amount of assistance under Section 42.406, the
	maximum is increased by the amount of additional assistance to
	which the district is entitled under this section.]
	SECTION 1.036.  Subtitle I, Title 2, Education Code, is
	amended by adding Chapter 49, and a heading is added to that chapter
	to read as follows:
	CHAPTER 49. OPTIONS FOR LOCAL REVENUE LEVELS IN EXCESS OF
	ENTITLEMENT
	SECTION 1.037.  Chapter 49, Education Code, as added by this
	Act, is amended by adding Subchapter A, and a heading is added to
	that subchapter to read as follows:
	SUBCHAPTER A. GENERAL PROVISIONS
	SECTION 1.038.  Sections 41.001, 41.003, 41.0031, 41.004,
	41.005, 41.006, 41.007, 41.008, 41.009, 41.010, 41.011, 41.012, and
	41.013, Education Code, are transferred to Subchapter A, Chapter
	49, Education Code, as added by this Act, redesignated as Sections
	49.001, 49.002, 49.003, 49.004, 49.005, 49.006, 49.007, 49.008,
	49.009, 49.010, 49.011, 49.012, and 49.013, Education Code, and
	amended to read as follows:
	Sec. 49.001  [41.001].  DEFINITIONS. In this chapter:
	(1)  "Local revenue [Equalized wealth] level in excess
	of entitlement" means local revenue levels that exceed the levels
	[the wealth per student] provided by Section 48.257 [41.002].
	(2)  ["Wealth per student" means the taxable value of
	property, as determined under Subchapter M, Chapter 403, Government
	Code, divided by the number of students in weighted average daily
	attendance.
	[(3)]  "Weighted average daily attendance" has the
	meaning assigned by Section 48.202 [42.302].
	Sec. 49.002  [41.003].  OPTIONS TO REDUCE LOCAL REVENUE
	[ACHIEVE EQUALIZED WEALTH] LEVEL. A district with a local revenue
	level in excess of entitlement [wealth per student that exceeds the
	equalized wealth level] may take any combination of the following
	actions to reduce the district's revenue level [achieve the
	equalized wealth level]:
	(1)  consolidation with another district as provided by
	Subchapter B;
	(2)  detachment of territory as provided by Subchapter
	C;
	(3)  purchase of average daily attendance credit as
	provided by Subchapter D;
	(4)  education of nonresident students as provided by
	Subchapter E; or
	(5)  tax base consolidation with another district as
	provided by Subchapter F.
	Sec. 49.003  [41.0031].  INCLUSION OF ATTENDANCE CREDIT
	[CREDITS] AND NONRESIDENTS IN WEIGHTED AVERAGE DAILY ATTENDANCE.
	In determining whether a school district has a local revenue
	[wealth per student less than or equal to the equalized wealth]
	level in excess of entitlement, the commissioner shall use:
	(1)  the district's final weighted average daily
	attendance; and
	(2)  the amount [number] of attendance credit [credits]
	a district purchases under Subchapter D or the number of
	nonresident students a district educates under Subchapter E for a
	school year.
	Sec. 49.004  [41.004].  ANNUAL REVIEW OF LOCAL REVENUES
	[PROPERTY WEALTH]. (a) Not later than July 15 of each year, using
	the estimate of enrollment under Section 48.269 [42.254], the
	commissioner shall review the local revenue level [wealth per
	student] of school districts in the state and shall notify:
	(1)  each district with a local revenue level in excess
	of entitlement [wealth per student exceeding the equalized wealth
	level];
	(2)  each district to which the commissioner proposes
	to annex property detached from a district notified under
	Subdivision (1), if necessary, under Subchapter G; and
	(3)  each district to which the commissioner proposes
	to consolidate a district notified under Subdivision (1), if
	necessary, under Subchapter H.
	(b)  If, before the dates provided by this subsection, a
	district notified under Subsection (a)(1) has not successfully
	exercised one or more options under Section 49.002 [41.003] that
	reduce the district's local revenue level [wealth per student] to a
	level equal to or less than the [equalized wealth] level
	established under Section 48.257, the commissioner shall order the
	detachment of property from that district as provided by Subchapter
	G. If that detachment will not reduce the district's local revenue
	level [wealth per student] to a level equal to or less than the
	[equalized wealth] level established under Section 48.257, the
	commissioner may not detach property under Subchapter G but shall
	order the consolidation of the district with one or more other
	districts as provided by Subchapter H. An agreement under Section
	49.002(1) [41.003(1)] or (2) must be executed not later than
	September 1 immediately following the notice under Subsection (a).
	An election for an option under Section 49.002(3) [41.003(3)], (4),
	or (5) must be ordered before September 1 immediately following the
	notice under Subsection (a).
	(c)  A district notified under Subsection (a) may not adopt a
	tax rate for the tax year in which the district receives the notice
	until the commissioner certifies that the district has reduced the
	district's local revenue level in excess of entitlement to the
	[achieved the equalized wealth] level established under Section
	48.257.
	(d)  A detachment and annexation or consolidation under this
	chapter:
	(1)  is effective for Foundation School Program funding
	purposes for the school year that begins in the calendar year in
	which the detachment and annexation or consolidation is agreed to
	or ordered; and
	(2)  applies to the ad valorem taxation of property
	beginning with the tax year in which the agreement or order is
	effective.
	Sec. 49.005  [41.005].  COMPTROLLER AND APPRAISAL DISTRICT
	COOPERATION. The chief appraiser of each appraisal district and
	the comptroller shall cooperate with the commissioner and school
	districts in implementing this chapter.
	Sec. 49.006  [41.006].  RULES. (a) The commissioner may
	adopt rules necessary for the implementation of this chapter. The
	rules may provide for the commissioner to make necessary
	adjustments to the provisions of Chapter 48 [42], including
	providing for the commissioner to make an adjustment in the funding
	element established by Section 48.202 [42.302], at the earliest
	date practicable, to the amount the commissioner believes, taking
	into consideration options exercised by school districts under this
	chapter and estimates of student enrollments, will match
	appropriation levels.
	(b)  As necessary for the effective and efficient
	administration of this chapter, the commissioner may modify
	effective dates and time periods for actions described by this
	chapter.
	Sec. 49.007  [41.007].  COMMISSIONER TO APPROVE SUBSEQUENT
	BOUNDARY CHANGES. A school district that is involved in an action
	under this chapter that results in boundary changes to the district
	or in the consolidation of tax bases is subject to consolidation,
	detachment, or annexation under Chapter 13 only if the commissioner
	certifies that the change under Chapter 13 will not result in a
	district with a local revenue [wealth per student that exceeds the
	equalized wealth] level in excess of entitlement.
	Sec. 49.008  [41.008].  HOMESTEAD EXEMPTIONS. (a) The
	governing board of a school district that results from
	consolidation under this chapter, including a consolidated taxing
	district under Subchapter F, for the tax year in which the
	consolidation occurs may determine whether to adopt a homestead
	exemption provided by Section 11.13, Tax Code, and may set the
	amount of the exemption, if adopted, at any time before the school
	district adopts a tax rate for that tax year. This section applies
	only to an exemption that the governing board of a school district
	is authorized to adopt or change in amount under Section 11.13, Tax
	Code.
	(b)  This section prevails over any inconsistent provision
	of Section 11.13, Tax Code, or other law.
	Sec. 49.009 [41.009].  TAX ABATEMENTS. (a) A tax abatement
	agreement executed by a school district that is involved in
	consolidation or in detachment and annexation of territory under
	this chapter is not affected and applies to the taxation of the
	property covered by the agreement as if executed by the district
	within which the property is included.
	(b)  The commissioner shall determine the local revenue
	[wealth per student] of a school district under this chapter as if
	any tax abatement agreement executed by a school district on or
	after May 31, 1993, had not been executed.
	Sec. 49.010 [41.010].  TAX INCREMENT OBLIGATIONS. (a) The
	payment of tax increments under Chapter 311, Tax Code, is not
	affected by the consolidation of territory or tax bases or by
	annexation under this chapter. In each tax year a school district
	paying a tax increment from taxes on property over which the
	district has assumed taxing power is entitled to retain the same
	percentage of the tax increment from that property that the
	district in which the property was located before the consolidation
	or annexation could have retained for the respective tax year.
	(b)  This section does not apply to the payment of tax
	increments for an obligation refinanced or renewed after September
	1, 2019.
	Sec. 49.011 [41.011].  CONTINGENCY. (a) If any of the
	options described by Section 49.002 [41.003] as applied to a school
	district are held invalid by a final decision of a court of
	competent jurisdiction, a school district is entitled to exercise
	any of the remaining valid options in accordance with a schedule
	approved by the commissioner.
	(b)  If a final order of a court of competent jurisdiction
	should hold each of the options provided by Section 49.002 [41.003]
	invalid, the commissioner shall act under Subchapter G or H to
	reduce the local revenue [achieve the equalized wealth] level in
	excess of entitlement only after notice and hearing is afforded to
	each school district affected by the order. The commissioner shall
	adopt a plan that least disrupts the affected school districts. If
	because the exigency to adopt a plan prevents the commissioner from
	giving a reasonable time for notice and hearing, the commissioner
	shall timely give notice to and hold a hearing for the affected
	school districts, but in no event less than 30 days from time of
	notice to the date of hearing.
	(c)  If a final order of a court of competent jurisdiction
	should hold an option provided by Section 49.002 [41.003] invalid
	and order a refund to a district of any amounts paid by a district
	choosing that option, the amount shall be refunded but held in
	reserve and not expended by the district until released by order of
	the commissioner. The commissioner shall order the release
	immediately on the commissioner's determination that, through one
	of the means provided by law, the district has reduced the
	district's local revenue level in excess of entitlement to the
	[achieved the equalized wealth] level established under Section
	48.257. The amount released shall be deducted from any state aid
	payable to the district according to a schedule adopted by the
	commissioner.
	Sec. 49.012 [41.012].  DATE OF ELECTIONS. An election under
	this chapter for voter approval of an agreement entered by the board
	of trustees shall be held on a Tuesday or Saturday not more than 45
	days after the date of the agreement. Section 41.001, Election
	Code, does not apply to the election.
	Sec. 49.013 [41.013].  PROCEDURE. (a) Except as provided
	by Subchapter G, a decision of the commissioner under this chapter
	is appealable under Section 7.057.
	(b)  Any order of the commissioner issued under this chapter
	shall be given immediate effect and may not be stayed or enjoined
	pending any appeal.
	(c)  Chapter 2001, Government Code, does not apply to a
	decision of the commissioner under this chapter.
	(d)  On the request of the commissioner, the secretary of
	state shall publish any rules adopted under this chapter in the
	Texas Register and the Texas Administrative Code.
	SECTION 1.039.  Subchapter B, Chapter 41, Education Code, is
	transferred to Chapter 49, Education Code, as added by this Act,
	redesignated as Subchapter B, Chapter 49, Education Code, and
	amended to read as follows:
	SUBCHAPTER B. CONSOLIDATION BY AGREEMENT
	Sec. 49.051 [41.031].  AGREEMENT. The governing boards of
	any two or more school districts may consolidate the districts by
	agreement in accordance with this subchapter to establish a
	consolidated district with a local revenue level [wealth per
	student] equal to or less than the [equalized wealth] level
	established under Section 48.257. The agreement is not effective
	unless the commissioner certifies that the consolidated district,
	as a result of actions taken under this chapter, will have a local
	revenue level [wealth per student] equal to or less than the
	[equalized wealth] level established under Section 48.257.
	Sec. 49.052 [41.032].  GOVERNING LAW. Except to the extent
	modified by the terms of the agreement, the consolidated district
	is governed by the applicable provisions of Subchapter D, Chapter
	13, other than a provision requiring consolidating districts to be
	contiguous. The agreement may not be inconsistent with the
	requirements of this subchapter.
	Sec. 49.053 [41.033].  GOVERNANCE PLAN. (a) The agreement
	among the consolidating districts may include a governance plan
	designed to preserve community-based and site-based decision
	making within the consolidated district, including the delegation
	of specific powers of the governing board of the district other than
	the power to levy taxes, including a provision authorized by
	Section 13.158(b).
	(b)  The governance plan may provide for a transitional board
	of trustees during the first year after consolidation, but
	beginning with the next year the board of trustees must be elected
	from within the boundaries of the consolidated district. If the
	consolidating districts elect trustees from single-member
	districts, the consolidated district must adopt a plan to elect its
	board of trustees from single-member districts.
	Sec. 49.054 [41.034].  INCENTIVE AID. (a) For the first and
	second school years after creation of a consolidated district under
	this subchapter, the commissioner shall adjust allotments to the
	consolidated district to the extent necessary to preserve the
	effects of an adjustment under Section 48.052 [42.102, 42.103, or
	42.105] to which either of the consolidating districts would have
	been entitled but for the consolidation.
	(b)  Except as provided by Subsection (c), a district
	receiving incentive aid payments under this section is not entitled
	to incentive aid under Subchapter G, Chapter 13.
	(c)  Four or more districts that consolidate into one
	district under this subchapter within a period of one year may elect
	to receive incentive aid under this section or to receive incentive
	aid for not more than five years under Subchapter G, Chapter 13.
	Incentive aid under this subsection may not provide the
	consolidated district with more revenue in state and local funds
	than the district would receive at the [equalized wealth] level
	established under Section 48.257.
	SECTION 1.040.  Subchapter C, Chapter 41, Education Code, is
	transferred to Chapter 49, Education Code, redesignated as
	Subchapter C, Chapter 49, Education Code, and amended to read as
	follows:
	SUBCHAPTER C. DETACHMENT AND ANNEXATION BY AGREEMENT
	Sec. 49.101 [41.061].  AGREEMENT. (a) By agreement of the
	governing boards of two school districts, territory may be detached
	from one of the districts and annexed to the other district if,
	after the action:
	(1)  the local revenue level [wealth per student] of
	the district from which territory is detached is equal to or less
	than the [equalized wealth] level established under Section 48.257;
	and
	(2)  the local revenue level [wealth per student] of
	the district to which territory is annexed is not greater than the
	greatest level for which funds are provided under Subchapter E [F],
	Chapter 48 [42].
	(b)  The agreement is not effective unless the commissioner
	certifies that, after all actions taken under this chapter, the
	local revenue level [wealth per student] of each district involved
	will be equal to or less than the applicable level permitted by
	Subsection (a).
	Sec. 49.102 [41.062].  GOVERNING LAW. Except to the extent
	of any conflict with this chapter and except for any requirement
	that detached property must be annexed to a school district that is
	contiguous to the detached territory, the annexation and detachment
	is governed by Chapter 13.
	Sec. 49.103 [41.063].  ALLOCATION OF APPRAISED VALUE OF
	DIVIDED UNIT. If portions of a parcel or other item of property are
	located in different school districts as a result of a detachment
	and annexation under this subchapter, the parcel or other item of
	property shall be appraised for taxation as a unit, and the
	agreement shall allocate the taxable value of the property between
	the districts.
	Sec. 49.104 [41.064].  ALLOCATION OF INDEBTEDNESS. The
	annexation agreement may allocate to the receiving district any
	portion of the indebtedness of the district from which the
	territory is detached, and the receiving district assumes and is
	liable for the allocated indebtedness.
	Sec. 49.105 [41.065].  NOTICE. As soon as practicable after
	the agreement is executed, the districts involved shall notify each
	affected property owner and the appraisal district in which the
	affected property is located.
	SECTION 1.041.  Chapter 49, Education Code, as added by this
	Act, is amended by adding Subchapter D, and a heading is added to
	that subchapter to read as follows:
	SUBCHAPTER D. PURCHASE OF ATTENDANCE CREDIT
	SECTION 1.042.  Sections 41.091, 41.092, 41.093, 41.094,
	41.095, 41.096, 41.097, and 41.099, Education Code, are transferred
	to Subchapter D, Chapter 49, Education Code, as added by this Act,
	redesignated as Sections 49.151, 49.152, 49.153, 49.154, 49.155,
	49.156, 49.157, and 49.158, Education Code, and amended to read as
	follows:
	Sec. 49.151 [41.091].  AGREEMENT. A school district with a
	local revenue [wealth per student that exceeds the equalized
	wealth] level in excess of entitlement may execute an agreement
	with the commissioner to purchase attendance credit [credits] in an
	amount sufficient, in combination with any other actions taken
	under this chapter, to reduce the district's local revenue level
	[wealth per student] to a level that is equal to or less than the
	[equalized wealth] level established under Section 48.257.
	Sec. 49.152 [41.092].  CREDIT. The amount of [(a) For each]
	credit purchased decreases the dollar amount of a district's local
	revenue level[, the weighted average daily attendance of the
	purchasing school district is increased by one student in weighted
	average daily attendance] for purposes of determining whether the
	district exceeds the [equalized wealth] level established under
	Section 48.257.
	[(b)     A credit is not used in determining a school district's
	scholastic population, average daily attendance, or weighted
	average daily attendance for purposes of Chapter 42 or 43.]
	Sec. 49.153 [41.093].  COST. (a) The total [Subject to
	Subsection (b-1), the] cost of [each] credit is the [an] amount
	[equal to the greater of:
	[(1)  the amount] of the district's maintenance and
	operations tax revenue that exceeds the level established under
	Section 48.257 [per student in weighted average daily attendance
	for the school year for which the contract is executed; or
	[(2)     the amount of the statewide district average of
	maintenance and operations tax revenue per student in weighted
	average daily attendance for the school year preceding the school
	year for which the contract is executed].
	(b)  For purposes of this section, a school district's
	maintenance and operations tax revenue does not include any amounts
	paid into a tax increment fund under Chapter 311, Tax Code. This
	subsection does not apply to any amounts paid into a tax increment
	fund for an obligation refinanced or renewed after September 1,
	2019.
	[(b-1)     If the guaranteed level of state and local funds per
	weighted student per cent of tax effort under Section
	42.302(a-1)(1) for which state funds are appropriated for a school
	year is an amount at least equal to the amount of revenue per
	weighted student per cent of tax effort available to the Austin
	Independent School District, as determined by the commissioner in
	cooperation with the Legislative Budget Board, the commissioner, in
	computing the amounts described by Subsections (a)(1) and (2) and
	determining the cost of an attendance credit, shall exclude
	maintenance and operations tax revenue resulting from the tax rate
	described by Section 41.002(a)(2).]
	(c)  The cost of [an] attendance credit for a school district
	is computed using the final tax collections of the district.
	Sec. 49.154 [41.094].  PAYMENT. (a) A school district
	shall pay for credit [credits] purchased in equal monthly payments
	as determined by the commissioner beginning February 15 and ending
	August 15 of the school year for which the agreement is in effect.
	(b)  Receipts shall be deposited in the state treasury and
	may be used only for foundation school program purposes.
	Sec. 49.155 [41.095].  DURATION. An agreement under this
	section is valid for one school year and, subject to Section 49.156
	[41.096], may be renewed annually.
	Sec. 49.156 [41.096].  VOTER APPROVAL. (a) After first
	executing an agreement under this section, the board of trustees
	shall order and conduct an election, in the manner provided by
	Sections 13.003(d)-(g), to obtain voter approval of the agreement.
	(b)  The ballot shall be printed to permit voting for or
	against the proposition: "Authorizing the board of trustees of
	________ School District to purchase attendance credit [credits]
	from the state with local tax revenues."
	(c)  The proposition is approved if the proposition receives
	a favorable vote of a majority of the votes cast. If the
	proposition is approved, the agreement executed by the board is
	ratified, and the board has continuing authority to execute
	agreements under this subchapter on behalf of the district without
	further voter approval.
	Sec. 49.157 [41.097].  CREDIT FOR APPRAISAL COSTS. (a) The
	total amount required under Section 49.153 [41.093] for a district
	to purchase attendance credit [credits] under this subchapter for
	any school year is reduced by an amount equal to the product of the
	district's total costs under Section 6.06, Tax Code, for the
	appraisal district or districts in which it participates multiplied
	by a percentage that is computed by dividing the total amount
	required under Section 49.153 [41.093] by the total amount of taxes
	imposed in the district for that year less any amounts paid into a
	tax increment fund under Chapter 311, Tax Code, subject to
	Subsection (b).
	(b)  Amounts paid for an obligation refinanced or renewed
	after September 1, 2019, are not included for purposes of
	calculating amounts paid into a tax increment fund under Chapter
	311, Tax Code, under Subsection (a) [A school district is entitled
	to a reduction under Subsection (a) beginning with the 1996-1997
	school year. For that school year, the reduction to which a
	district is entitled is the sum of the amounts computed under
	Subsection (a) for the 1993-1994, 1994-1995, 1995-1996, and
	1996-1997 school years. If that amount exceeds the total amount
	required under Section 41.093 for the 1996-1997 school year, the
	difference is carried forward and the total amount required under
	Section 41.093 is reduced each subsequent school year until the
	total amount of the credit has been applied to such reductions].
	Sec. 49.158 [41.099].  LIMITATION. (a) Sections 48.257(g),
	49.154, and 49.157 [41.002(e), 41.094, 41.097, and 41.098] apply
	only to a district that:
	(1)  executes an agreement to purchase [all] attendance
	credit [credits] necessary to reduce the district's local revenue
	[wealth per student to the equalized wealth] level to the level
	established under Section 48.257;
	(2)  executes an agreement to purchase attendance
	credit [credits] and an agreement under Subchapter E to contract
	for the education of nonresident students who transfer to and are
	educated in the district but who are not charged tuition; or
	(3)  executes an agreement under Subchapter E to
	contract for the education of nonresident students:
	(A)  to an extent that does not provide more than
	10 percent of the reduction in local revenue [wealth per student]
	required for the district to achieve a local revenue level [wealth
	per student] that is equal to or less than the [equalized wealth]
	level established under Section 48.257; and
	(B)  under which all revenue paid by the district
	to other districts, in excess of the reduction in state aid that
	results from counting the weighted average daily attendance of the
	students served in the contracting district, is required to be used
	for funding a consortium of at least three districts in a county
	with a population of less than 40,000 that is formed to support a
	technology initiative.
	(b)  A district that executes an agreement under Subsection
	(a)(3) must pay full market value for any good or service the
	district obtains through the consortium.
	SECTION 1.043.  Effective September 1, 2024, Section
	49.158(a), Education Code, as redesignated by this Act, is amended
	to read as follows:
	(a)  Sections 49.154 and 49.157 [41.002(e), 41.094, 41.097,
	and 41.098] apply only to a district that:
	(1)  executes an agreement to purchase [all] attendance
	credit [credits] necessary to reduce the district's local revenue
	[wealth per student to the equalized wealth] level to the level
	established under Section 48.257;
	(2)  executes an agreement to purchase attendance
	credit [credits] and an agreement under Subchapter E to contract
	for the education of nonresident students who transfer to and are
	educated in the district but who are not charged tuition; or
	(3)  executes an agreement under Subchapter E to
	contract for the education of nonresident students:
	(A)  to an extent that does not provide more than
	10 percent of the reduction in local revenue [wealth per student]
	required for the district to achieve a local revenue level [wealth
	per student] that is equal to or less than the [equalized wealth]
	level established under Section 48.257; and
	(B)  under which all revenue paid by the district
	to other districts, in excess of the reduction in state aid that
	results from counting the weighted average daily attendance of the
	students served in the contracting district, is required to be used
	for funding a consortium of at least three districts in a county
	with a population of less than 40,000 that is formed to support a
	technology initiative.
	SECTION 1.044.  Chapter 49, Education Code, as added by this
	Act, is amended by adding Subchapter E, and a heading is added to
	that subchapter to read as follows:
	SUBCHAPTER E. EDUCATION OF NONRESIDENT STUDENTS
	SECTION 1.045.  Sections 41.121, 41.122, and 41.123,
	Education Code, are transferred to Subchapter E, Chapter 49,
	Education Code, as added by this Act, redesignated as Sections
	49.201, 49.202, and 49.203, Education Code, and amended to read as
	follows:
	Sec. 49.201 [41.121].  AGREEMENT. [(a)] The board of
	trustees of a district with a local revenue [wealth per student that
	exceeds the equalized wealth] level in excess of entitlement may
	execute an agreement to educate the students of another district in
	a number that, when the weighted average daily attendance of the
	students served is added to the weighted average daily attendance
	of the contracting district, is sufficient, in combination with any
	other actions taken under this chapter, to reduce the district's
	local revenue level [wealth per student] to a level that is equal to
	or less than the [equalized wealth] level established under Section
	48.257.  The agreement is not effective unless the commissioner
	certifies that the transfer of weighted average daily attendance
	will not result in any of the contracting districts' local revenue
	level [wealth per student] being greater than the [equalized
	wealth] level established under Section 48.257 and that the
	agreement requires an expenditure per student in weighted average
	daily attendance that is at least equal to the amount per student in
	weighted average daily attendance required under Section 49.153
	[41.093].
	Sec. 49.202 [41.122].  VOTER APPROVAL. (a) After first
	executing an agreement under this subchapter other than an
	agreement under Section 49.205 [41.125], the board of trustees of
	the district that will be educating nonresident students shall
	order and conduct an election, in the manner provided by Sections
	13.003(d)-(g), to obtain voter approval of the agreement.
	(b)  The ballot shall be printed to permit voting for or
	against the proposition: "Authorizing the board of trustees of
	________ School District to educate students of other school
	districts with local tax revenues."
	(c)  The proposition is approved if the proposition receives
	a favorable vote of a majority of the votes cast. If the
	proposition is approved, the agreement executed by the board is
	ratified, and the board has continuing authority to execute
	agreements under this subchapter on behalf of the district without
	further voter approval.
	Sec. 49.203 [41.123].  WADA COUNT. For purposes of Chapter
	48 [42], students served under an agreement under this subchapter
	are counted only in the weighted average daily attendance of the
	district providing the services, except that students served under
	an agreement authorized by Section 49.205 [41.125] are counted in a
	manner determined by the commissioner.
	SECTION 1.046.  Section 41.124, Education Code, as amended
	by Chapters 581 (S.B. 810) and 705 (H.B. 3526), Acts of the 85th
	Legislature, Regular Session, 2017, is transferred to Subchapter E,
	Chapter 49, Education Code, as added by this Act, redesignated as
	Section 49.204, Education Code, and reenacted and amended to read
	as follows:
	Sec. 49.204 [41.124].  TRANSFERS. (a) The board of
	trustees of a school district with a local revenue [wealth per
	student that exceeds the equalized wealth] level in excess of
	entitlement may reduce the district's local revenue level [wealth
	per student] by serving nonresident students who transfer to the
	district and are educated by the district but who are not charged
	tuition. A district that exercises the option under this
	subsection is not required to execute an agreement with the school
	district in which a transferring student resides and must certify
	to the commissioner that the district has not charged or received
	tuition for the transferring students.
	(b)  A school district with a local revenue [wealth per
	student that exceeds the equalized wealth] level in excess of
	entitlement that pays tuition to another school district for the
	education of students that reside in the district may apply the
	amount of tuition paid toward the cost of the option chosen by the
	district to reduce its local revenue level [wealth per student].
	The amount applied under this subsection may not exceed the amount
	of maintenance and operations tax revenue for one student in
	weighted average daily attendance in [determined under Section
	41.093 as the cost of an attendance credit for] the district. The
	commissioner may require any reports necessary to document the
	tuition payments.
	(c)  A school district that receives tuition for a student
	from a school district with a local revenue [wealth per student that
	exceeds the equalized wealth] level in excess of entitlement may
	not claim attendance for that student for purposes of Chapters [42
	and] 46 and 48 and the instructional materials and technology
	allotment under Section 31.0211.
	SECTION 1.047.  Section 41.125, Education Code, is
	transferred to Subchapter E, Chapter 49, Education Code, as added
	by this Act, redesignated as Section 49.205, Education Code, and
	amended to read as follows:
	Sec. 49.205 [41.125].  CAREER AND TECHNOLOGY EDUCATION
	PROGRAMS. (a) The board of trustees of a school district with a
	local revenue [wealth per student that exceeds the equalized
	wealth] level in excess of entitlement may reduce the district's
	local revenue level [wealth per student] by executing an agreement
	to provide students of one or more other districts with career and
	technology education through a program designated as an area
	program for career and technology education.
	(b)  The agreement is not effective unless the commissioner
	certifies that:
	(1)  implementation of the agreement will not result in
	any of the affected districts' local revenue level [wealth per
	student] being greater than the [equalized wealth] level
	established under Section 48.257; and
	(2)  the agreement requires the district with a local
	revenue [wealth per student that exceeds the equalized wealth]
	level in excess of entitlement to make expenditures benefiting
	students from other districts in an amount at least equal to the
	amount that would be required for the district to purchase [the
	number of] attendance credit [credits] under Subchapter D
	necessary, in combination with any other actions taken under this
	chapter other than an action under this section, to reduce the
	district's local revenue level [wealth per student] to a level that
	is equal to or less than the [equalized wealth] level established
	under Section 48.257.
	SECTION 1.048.  Subchapter F, Chapter 41, Education Code, is
	transferred to Chapter 49, Education Code, as added by this Act,
	redesignated as Subchapter F, Chapter 49, Education Code, and
	amended to read as follows:
	SUBCHAPTER F. TAX BASE CONSOLIDATION
	Sec. 49.251 [41.151].  AGREEMENT. The board of trustees of
	two or more school districts may execute an agreement to conduct an
	election on the creation of a consolidated taxing district for the
	maintenance and operation of the component school districts. The
	agreement is subject to approval by the commissioner. The
	agreement is not effective unless the commissioner certifies that
	the consolidated taxing district will have a local revenue level
	[wealth per student] equal to or less than the [equalized wealth]
	level established under Section 48.257 after all actions taken
	under this chapter.
	Sec. 49.252 [41.152].  DATE OF ELECTION. Any agreement
	under this subchapter must provide for the ordering of an election
	to be held on the same date in each district.
	Sec. 49.253 [41.153].  PROPOSITION. (a) The ballot shall
	be printed to permit voting for or against the proposition:
	"Creation of a consolidated taxing district composed of the
	territory of _________________________ school districts, and
	authorizing the levy, assessment, and collection of annual ad
	valorem taxes for the maintenance of the public free schools within
	that taxing district at a rate not to exceed $_________ on the $100
	valuation of taxable property."
	(b)  The rate to be included in the proposition shall be
	provided by the agreement among the districts but may not exceed the
	maximum rate provided by law for independent school districts.
	Sec. 49.254 [41.154].  APPROVAL. The proposition is
	approved only if the proposition receives a favorable vote of the
	majority of the votes cast within each participating school
	district.
	Sec. 49.255 [41.155].  CONSOLIDATED TAXING DISTRICT. A
	consolidated taxing district is a school district established for
	the limited purpose of exercising the taxing power authorized by
	Section 3, Article VII, Texas Constitution, and distributing the
	revenue to its component school districts.
	Sec. 49.256 [41.156].  GOVERNANCE. (a) The consolidated
	taxing district is governed by the boards of the component school
	districts acting jointly.
	(b)  Any action taken by the joint board must receive a
	favorable vote of a majority of each component district's board of
	trustees.
	Sec. 49.257 [41.157].  MAINTENANCE TAX. (a) The joint
	board shall levy a maintenance tax for the benefit of the component
	school districts not later than September 1 of each year or as soon
	thereafter as practicable.
	(b)  Each component district shall bear a share of the costs
	of assessing and collecting taxes in proportion to the component
	district's share of weighted average daily attendance in the
	consolidated taxing district.
	(c)  A component district may not levy an ad valorem tax for
	the maintenance and operation of the schools.
	(d)  Notwithstanding Section 45.003, the consolidated taxing
	district may levy, assess, and collect a maintenance tax for the
	benefit of the component districts at a rate that exceeds $1.50 per
	$100 valuation of taxable property to the extent necessary to pay
	contracted obligations on the lease purchase of permanent
	improvements to real property entered into on or before May 12,
	1993. The proposition to impose taxes at the necessary rate must be
	submitted to the voters in the manner provided by Section 45.003.
	Sec. 49.258 [41.158].  REVENUE DISTRIBUTION. The
	consolidated taxing district shall distribute maintenance tax
	revenue to the component districts on the basis of the number of
	students in weighted average daily attendance in the component
	districts.
	Sec. 49.259 [41.159].  TAXES OF COMPONENT DISTRICTS. (a)
	The governing board of a component school district of a
	consolidated taxing district that has consolidated for maintenance
	and operation purposes only may issue bonds and levy, pledge, and
	collect ad valorem taxes within that component district sufficient
	to pay the principal of and interest on those bonds as provided by
	Chapter 45.
	(b)  A component district levying an ad valorem tax under
	this section or Section 49.260(b)(1) [41.160(b)(1)] is entitled to
	the guaranteed yield provided by Subchapter E [F], Chapter 48 [42],
	for that portion of its tax rate that, when added to the maintenance
	tax levied by the consolidated taxing unit, does not exceed the
	limitation provided by Section 48.203 [42.303].
	Sec. 49.260 [41.160].  OPTIONAL TOTAL TAX BASE
	CONSOLIDATION. (a) An agreement executed under Section 49.251
	[41.151] may provide for total tax base consolidation instead of
	consolidation for maintenance and operation purposes only.
	(b)  Under an agreement providing for total tax base
	consolidation:
	(1)  the component districts may not levy maintenance
	or bond taxes, except to the extent necessary to retire bonds and
	other obligations issued before the effective date of the
	consolidation;
	(2)  the joint board may issue bonds and levy, pledge,
	and collect ad valorem taxes sufficient to pay the principal of and
	interest on those bonds, and issue refunding bonds, as provided by
	Chapter 45 for independent school districts; and
	(3)  to the end of the ballot proposition required
	under Section 49.253(a) [41.153(a)] shall be added ", and further
	to create a consolidated tax base for the repayment of all bonded
	indebtedness issued by the joint board of the taxing district after
	the effective date of the consolidation and to authorize the joint
	board to levy, pledge, and collect ad valorem taxes at a rate
	sufficient to pay the principal of and interest on those bonds."
	(c)  Under an agreement providing for total tax base
	consolidation:
	(1)  the component districts may provide for the
	consolidated taxing district to assume all of the indebtedness of
	all component districts; and
	(2)  to the end of the ballot proposition required by
	Section 49.253(a) [41.153(a)] shall be added ", and further to
	create a consolidated tax base for the repayment of all bonded
	indebtedness issued by the joint board of the taxing district or
	previously issued by the component school districts and to
	authorize the joint board to levy, pledge, and collect ad valorem
	taxes at a rate sufficient to pay the principal of and interest on
	those bonds."
	SECTION 1.049.  Subchapter G, Chapter 41, Education Code, is
	transferred to Chapter 49, Education Code, as added by this Act,
	redesignated as Subchapter G, Chapter 49, Education Code, and
	amended to read as follows:
	SUBCHAPTER G. DETACHMENT AND ANNEXATION BY COMMISSIONER
	Sec. 49.301  [41.201].  DEFINITION. In this subchapter,
	"mineral property" means a real property mineral interest that has
	been severed from the surface estate by a mineral lease creating a
	determinable fee or by a conveyance that creates an interest
	taxable separately from the surface estate. A mineral property
	includes each royalty interest, working interest, or other
	undivided interest in the mineral property.
	Sec. 49.302  [41.202].  DETERMINATION OF TAXABLE VALUE. (a)
	For purposes of this subchapter, the taxable value of an individual
	parcel or other item of property and the total taxable value of
	property in a school district resulting from the detachment of
	property from or annexation of property to that district is
	determined by applying the appraisal ratio for the appropriate
	category of property determined under Subchapter M, Chapter 403,
	Government Code, for the preceding tax year to the taxable value of
	the detached or annexed property determined under Title 1, Tax
	Code, for the preceding tax year.
	(b)  For purposes of this subchapter, the taxable value of
	all or a portion of a parcel or item of real property includes the
	taxable value of personal property having taxable situs at the same
	location as the real property.
	Sec. 49.303  [41.203].  PROPERTY SUBJECT TO DETACHMENT AND
	ANNEXATION. (a) Only the following property may be detached and
	annexed under this subchapter:
	(1)  a mineral property;
	(2)  real property used in the operation of a public
	utility, including a pipeline, pipeline gathering system, or
	railroad or other rail system; and
	(3)  real property used primarily for industrial or
	other commercial purposes, other than property used primarily for
	agriculture or for residential purposes.
	(b)  If a final judgment of a court determines that a mineral
	interest may not be annexed and detached as provided by this
	subchapter without an attendant annexation and detachment of the
	surface estate or any other interest in the same land, the
	detachment and annexation of a mineral interest under this
	subchapter includes the surface estate and each other interest in
	the land covered by the mineral interest.
	Sec. 49.304  [41.204].  TAXATION OF PERSONAL PROPERTY.
	Personal property having a taxable situs at the same location as
	real property detached and annexed under this subchapter is taxable
	by the school district to which the real property is annexed.
	Sec. 49.305  [41.205].  DETACHMENT OF PROPERTY. (a) The
	commissioner shall detach property under this section from each
	school district from which the commissioner is required under
	Section 49.004 [41.004] to detach property under this subchapter.
	(b)  The commissioner shall detach from each school district
	covered by Subsection (a) one or more whole parcels or items of
	property in descending order of the taxable value of each parcel or
	item, beginning with the parcel or item having the greatest taxable
	value, until the school district's local revenue level [wealth per
	student] is equal to or less than the [equalized wealth] level
	established under Section 48.257, except as otherwise provided by
	Subsection (c).
	(c)  If the detachment of whole parcels or items of property
	[,] as provided by Subsection (a) would result in a district's local
	revenue level [wealth per student] that is less than the [equalized
	wealth] level established under Section 48.257 by more than the
	product of $10,000 multiplied by weighted average daily attendance,
	the commissioner may not detach the last parcel or item of property
	and shall detach the next one or more parcels or items of property
	in descending order of taxable value that would result in the school
	district having a local revenue level [wealth per student] that is
	equal to or less than the [equalized wealth] level established
	under Section 48.257 by not more than the product of $10,000
	multiplied by weighted average daily attendance.
	(d)  Notwithstanding Subsections (a), (b), and (c), the
	commissioner may detach only a portion of a parcel or item of
	property if:
	(1)  it is not possible under this subchapter to reduce
	the district's local revenue level [wealth per student] to a level
	that is equal to or less than the [equalized wealth] level
	established under Section 48.257 [this subchapter] unless some or
	all of the parcel or item of property is detached and the detachment
	of the whole parcel or item would result in the district from which
	it is detached having a local revenue level [wealth per student]
	that is less than the [equalized wealth] level established under
	Section 48.257 by more than the product of $10,000 multiplied by
	weighted average daily attendance; or
	(2)  the commissioner determines that a partial
	detachment of that parcel or item of property is preferable to the
	detachment of one or more other parcels or items having a lower
	taxable value in order to minimize the number of parcels or items of
	property to be detached consistent with the purposes of this
	chapter.
	Sec. 49.306  [41.206].  ANNEXATION OF PROPERTY. (a) The
	commissioner shall annex property detached under Section 49.305
	[41.205] to school districts eligible for annexation in accordance
	with this section. A school district is eligible for annexation of
	property to it under this subchapter only if, before any
	detachments or annexations are made in a year, the district's
	taxable value of property does not exceed the value necessary to
	generate maintenance and operations tax revenue in the amount equal
	to the district's entitlement under Section 48.202(a-1)(2) [wealth
	per student is less than the greatest level for which funds are
	provided under Subchapter F, Chapter 42].
	(b)  Property may be annexed to a school district without
	regard to whether the property is contiguous to other property in
	that district.
	(c)  The commissioner shall annex property detached from
	school districts beginning with the property detached from the
	school district with the greatest local revenue level in excess of
	entitlement [wealth per student] before detachment, and continuing
	with the property detached from each other school district in
	descending order of the district's local revenue level in excess of
	entitlement [wealth per student] before detachment.
	(d)  The commissioner shall annex the parcels or items of
	property detached from a school district to other school districts
	that are eligible for annexation of property in descending order of
	the taxable value of each parcel or item according to the following
	priorities:
	(1)  first, to the eligible school districts assigned
	to the same county as the school district from which the property is
	detached whose total adopted tax rate for the preceding tax year
	does not exceed by more than $0.15 the total tax rate adopted for
	that year by the school district from which the property is
	detached;
	(2)  second, to the eligible school districts served by
	the same regional education service center as the district from
	which the property is detached whose total adopted tax rate for the
	preceding tax year does not exceed by more than $0.10 the total tax
	rate adopted for that year by the school district from which the
	property is detached; and
	(3)  third, to other eligible school districts whose
	total adopted tax rate for the preceding tax year does not exceed by
	more than $0.05 the total tax rate adopted for that year by the
	school district from which the property is detached.
	(e)  If the districts identified by Subsection (d) for a
	school district are insufficient to annex all the property detached
	from the school district, the commissioner shall increase, for
	purposes of this section, all the maximum difference in tax rates
	allowed under Subsection (d) in increments of $0.01 until the
	districts are identified that are sufficient to annex all the
	property detached from the district.
	(f)  If only one school district is eligible to annex
	property detached from a school district within a priority group
	established by Subsections (d) and (e), the commissioner shall
	annex property to that district until it reaches the taxable value
	of property necessary to generate maintenance and operations tax
	revenue in the amount equal to the district's entitlement under
	Section 48.202(a-1)(2) [a wealth per student equal as nearly as
	possible to the greatest level for which funds are provided under
	Subchapter F, Chapter 42], by annexing whole parcels or items of
	property. Any remaining detached property shall be annexed to
	eligible school districts in the next priority group as provided by
	this section.
	(g)  If more than one school district is eligible to annex
	property detached from a school district within a priority group
	established by Subsections (d) and (e), the commissioner shall
	first annex property to the district within the priority group to
	which could be annexed the most taxable value of property without
	increasing the district's taxable value of property to an amount
	that exceeds the amount necessary to generate maintenance and
	operations tax revenue in the amount equal to the district's
	entitlement under Section 48.202(a-1)(2) [its wealth per student
	above the greatest level for which funds are provided under
	Subchapter F, Chapter 42], until that district reaches a taxable
	value of property necessary to generate maintenance and operations
	tax revenue in the amount equal to the district's entitlement under
	Section 48.202(a-1)(2) [wealth per student equal as nearly as
	possible to the greatest level for which funds are provided under
	Subchapter F, Chapter 42], by annexing whole parcels or items of
	property. Then any additional detached property shall be annexed
	in the same manner to other eligible school districts in the same
	priority group in descending order of capacity to receive taxable
	value of annexed property without increasing the district's taxable
	value of property to an amount that exceeds the amount necessary to
	generate maintenance and operations tax revenue in the amount equal
	to the district's entitlement under Section 48.202(a-1)(2) [wealth
	per student above the greatest level for which funds are provided
	under Subchapter F, Chapter 42]. If every school district in a
	priority group reaches a taxable value of property necessary to
	generate maintenance and operations tax revenue in the amount equal
	to the district's entitlement under Section 48.202(a-1)(2) [wealth
	per student equal to the greatest level for which funds are provided
	under Subchapter F, Chapter 42], as nearly as possible, the
	remaining detached property shall be annexed to school districts in
	the next priority group in the manner provided by this section.
	(h)  For purposes of this section, a portion of a parcel or
	item of property detached in that subdivided form from a school
	district is treated as a whole parcel or item of property.
	(i)  The commissioner may order the annexation of a portion
	of a parcel or item of property, including a portion of property
	treated as a whole parcel or item under Subsection (h), if:
	(1)  the annexation of the whole parcel or item would
	result in the district eligible to receive it in the appropriate
	priority order provided by this section having a local revenue
	level [wealth per student] greater than the amount by which the
	product of $10,000 multiplied by weighted average daily attendance
	exceeds the taxable value of property necessary to generate
	maintenance and operations tax revenue in the amount equal to the
	district's entitlement under Section 48.202(a-1)(2) [more than the
	greatest level for which funds are provided under Subchapter F,
	Chapter 42]; or
	(2)  the commissioner determines that annexation of
	portions of the parcel or item would reduce disparities in district
	taxable values of property necessary to generate maintenance and
	operations tax revenue in the amount equal to a district's
	entitlement under Section 48.202(a-1)(2) [wealth per student] more
	efficiently than would be possible if the parcel or item were
	annexed as a whole.
	(j)  The commissioner may modify the priorities established
	by this section as the commissioner considers reasonable to
	minimize or reduce the number of school districts to which the
	property detached from a school district is annexed, to minimize or
	reduce the geographic dispersal of property in a school district,
	to minimize or reduce disparities in school district taxable values
	of property necessary to generate maintenance and operations tax
	revenue in the amount equal to a district's entitlement under
	Section 48.202(a-1)(2) [wealth per student] that would otherwise
	result, or to minimize or reduce any administrative burden or
	expense.
	(k)  For purposes of this section, a school district is
	assigned to a county if the school district is assigned to that
	county in the 1992-1993 Texas School Directory published by the
	Central Education Agency.
	Sec. 49.307  [41.207].  LIMITATIONS ON DETACHMENT AND
	ANNEXATION. The commissioner may detach and annex property under
	this subchapter only if:
	(1)  the property is not exempt from ad valorem
	taxation under Section 11.20 or 11.21, Tax Code; and
	(2)  the property does not contain a building or
	structure owned by the United States, this state, or a political
	subdivision of this state that is exempt from ad valorem taxation
	under law.
	Sec. 49.308  [41.208].  ORDERS AND NOTICE. (a) The
	commissioner shall order any detachments and annexations of
	property under this subchapter not later than November 8 of each
	year.
	(b)  As soon as practicable after issuing the order under
	Subsection (a), the commissioner shall notify each affected school
	district and the appraisal district in which the affected property
	is located of the determination.
	Sec. 49.309  [41.209].  TREATMENT OF SUBDIVIDED PROPERTY.
	(a) If the commissioner orders the detachment or annexation of a
	portion of a parcel or item of property under this subchapter, the
	order shall specify the portion of the taxable value of the property
	to be detached or annexed and may, but need not, describe the
	specific area of the parcel or item to be detached or annexed.
	(b)  If an order for the detachment or annexation of a
	portion of a parcel or item of property does not describe the
	specific area of the parcel or item to be detached or annexed, the
	commissioner, as soon as practicable after issuing the order, shall
	determine the specific area to be detached or annexed and shall
	certify that determination to the appraisal district for the county
	in which the property is located.
	(c)  If portions of a parcel or item of property are located
	in two or more school districts as the result of a detachment or
	annexation, the parcel or item shall be appraised for taxation as a
	unit, and the commissioner shall determine the portion of the
	taxable value of the property that is located in each of those
	school districts based on the square footage of the property, or any
	other reasonable method adopted by the commissioner.
	Sec. 49.310  [41.210].  DUTIES OF CHIEF APPRAISER. (a) The
	chief appraiser of each appraisal district shall cooperate with the
	commissioner in administering this subchapter. The commissioner
	may require the chief appraiser to submit any reports or provide any
	information available to the chief appraiser in the form and at the
	times required by the commissioner.
	(b)  As soon as practicable after the detachment and
	annexation of property, the chief appraiser of the appraisal
	district in which the property is located shall send a written
	notice of the detachment and annexation to the owner of any property
	taxable in a different school district as a result of the detachment
	and annexation.  The notice must include the name of the school
	district by which the property is taxable after the detachment and
	annexation.
	(c)  The commissioner may reimburse an appraisal district
	for any costs incurred in administering this subchapter and may
	condition the reimbursement or the amount of the reimbursement on
	the timely submission of reports or information required by the
	commissioner or the satisfactory performance of any other action
	required or requested by the commissioner.
	Sec. 49.311  [41.211].  STUDENT ATTENDANCE. A student who
	is a resident of real property detached from a school district may
	choose to attend school in that district or in the district to which
	the property is annexed. For purposes of determining average daily
	attendance under Section 48.005 [42.005], the student shall be
	counted in the district to which the property is annexed. If the
	student chooses to attend school in the district from which the
	property is detached, the state shall withhold any foundation
	school funds from the district to which the property is annexed and
	shall allocate to the district in which the student is attending
	school those funds and the amount of funds equal to the difference
	between the state funds the district is receiving for the student
	and the district's cost in educating the student.
	Sec. 49.312  [41.212].  BOND TAXES. Property detached from
	a school district is released from the obligation for any tax to pay
	principal and interest on bonds authorized by the district before
	detachment. The property is subject to any tax to pay principal or
	interest on bonds authorized by the district to which the property
	is annexed whether authorized before or after annexation.
	Sec. 49.313  [41.213].  DETERMINATION BY COMMISSIONER
	FINAL. A decision or determination of the commissioner under this
	subchapter is final and not appealable.
	SECTION 1.050.  Subchapter H, Chapter 41, Education Code, is
	transferred to Chapter 49, Education Code, as added by this Act,
	redesignated as Subchapter H, Chapter 49, Education Code, and
	amended to read as follows:
	SUBCHAPTER H. CONSOLIDATION BY COMMISSIONER
	Sec. 49.351  [41.251].  COMMISSIONER ORDER. If the
	commissioner is required under Section 49.004 [41.004] to order the
	consolidation of districts, the consolidation is governed by this
	subchapter. The commissioner's order shall be effective on a date
	determined by the commissioner, but not later than the earliest
	practicable date after November 8.
	Sec. 49.352  [41.252].  SELECTION CRITERIA. (a) In
	selecting the districts to be consolidated with a district that has
	taxable values of property in an amount that exceeds the local
	revenue level established under Section 48.257 [a property wealth
	greater than the equalized wealth level], the commissioner shall
	select one or more districts [with a wealth per student] that, when
	consolidated, will result in a consolidated district with a local
	revenue level [wealth per student] equal to or less than the
	[equalized wealth] level established under Section 48.257. In
	achieving that result, the commissioner shall give priority to
	school districts in the following order:
	(1)  first, to the contiguous district that has the
	lowest local revenue level [wealth per student] and is located in
	the same county;
	(2)  second, to the district that has the lowest local
	revenue level [wealth per student] and is located in the same
	county;
	(3)  third, to a contiguous district with a local
	revenue level [property wealth] below the [equalized wealth] level
	established under Section 48.257 that has requested the
	commissioner that it be considered in a consolidation plan;
	(4)  fourth, to include as few districts as possible
	that have the lowest local revenue levels below the [fall below the
	equalized wealth] level established under Section 48.257 within the
	consolidation order that have not requested the commissioner to be
	included;
	(5)  fifth, to the district that has the lowest local
	revenue level [wealth per student] and is located in the same
	regional education service center area; and
	(6)  sixth, to a district that has a tax rate similar to
	that of the district that has a local revenue level [property
	wealth] greater than the [equalized wealth] level established under
	Section 48.257.
	(b)  The commissioner may not select a district that has been
	created as a result of consolidation by agreement under Subchapter
	B to be consolidated under this subchapter with a district that has
	a local revenue level [property wealth] greater than the [equalized
	wealth] level established under Section 48.257.
	(c)  In applying the selection criteria specified by
	Subsection (a), if more than two districts are to be consolidated,
	the commissioner shall select the third and each subsequent
	district to be consolidated by treating the district that has a
	local revenue level [property wealth] greater than the [equalized
	wealth] level established under Section 48.257 and the district or
	districts previously selected for consolidation as one district.
	Sec. 49.353  [41.253].  GOVERNANCE. (a) Until the initial
	trustees elected as provided by Subsection (b) have qualified and
	taken office, a district consolidated under this subchapter is
	governed by a transitional board of trustees consisting of the
	board of trustees of the district having the greatest student
	membership on the last day of the school year preceding the
	consolidation plus one member of the board of trustees of each other
	consolidating district selected by that board.
	(b)  The transitional board of trustees shall divide the
	consolidated district into nine single-member trustee districts in
	accordance with the procedures provided by Section 11.052.  The
	transitional board shall order an election for the initial board of
	trustees to be held on the first May uniform election date after the
	effective date of a consolidation order.
	(c)  Members of the board of trustees of a consolidated
	district serve staggered terms of office for four years.
	(d)  Section 13.156 applies to districts consolidated under
	this subchapter.
	Sec. 49.354  [41.254].  DISSOLUTION OF CONSOLIDATED
	DISTRICT. (a) If the legislature abolishes ad valorem taxes for
	public school maintenance and operations and adopts another method
	of funding public education, the board of trustees of a
	consolidated district created under this subchapter may dissolve
	the consolidated district, provided that the dissolution is
	approved by a majority of those voters residing within the district
	participating in an election called for the purpose of approving
	the dissolution of the consolidated school district.
	(b)  If a consolidated district is dissolved, each of the
	former districts is restored as a separate district and is
	classified as an independent district.
	(c)  Title to real property of the consolidated district is
	allocated to the restored district in which the property is
	located. Title to proportionate shares of the fund balances and
	personal property of the consolidated district, as determined by
	Subsection (e), are allocated to each restored district.
	(d)  Each of the restored districts assumes and is liable
	for:
	(1)  indebtedness of the consolidated district that
	relates to real property allocated to the district; and
	(2)  a proportionate share, as determined by Subsection
	(e), of indebtedness of the consolidated district that does not
	relate to real property.
	(e)  A restored district's proportionate share of fund
	balances, personal property, or indebtedness is equal to the
	proportion that the number of students in average daily attendance
	in the restored district bears to the number of students in average
	daily attendance in the consolidated district.
	Sec. 49.355  [41.255].  FUND BALANCES. Fund balances of a
	school district consolidated under this subchapter may be used only
	for the benefit of the schools within the district that generated
	the funds.
	Sec. 49.356  [41.256].  EMPLOYMENT CONTRACTS. A
	consolidated district created under this subchapter shall honor an
	employment contract entered into by a consolidating district.
	Sec. 49.357  [41.257].  APPLICATION OF [SMALL AND] SPARSE
	ADJUSTMENT [ADJUSTMENTS] AND SMALL AND TRANSPORTATION ALLOTMENTS
	[ALLOTMENT]. The budget of the consolidated district must apply
	the benefit of the adjustment or allotment to the schools of the
	consolidating district to which Section 48.052 [42.103], 48.101
	[42.105], or 48.151 [42.155] would have applied in the event that
	the consolidated district still qualifies as a small or sparse
	district.
	SECTION 1.051.  The heading to Subchapter A, Chapter 316,
	Government Code, is amended to read as follows:
	SUBCHAPTER A. LIMIT ON GROWTH OF APPROPRIATIONS; DETERMINATIONS
	REGARDING PUBLIC SCHOOL FINANCE
	SECTION 1.052.  Section 316.002(a), Government Code, is
	amended to read as follows:
	(a)  Before the Legislative Budget Board submits the budget
	as prescribed by Section 322.008(c), the board shall:
	(1)  establish for purposes of Section 316.001:
	(A) [(1)]  the estimated rate of growth of the
	state's economy from the current biennium to the next biennium;
	(B) [(2)]  the level of appropriations for the
	current biennium from state tax revenues not dedicated by the
	constitution; and
	(C) [(3)]  the amount of state tax revenues not
	dedicated by the constitution that could be appropriated for the
	next biennium within the limit established by the estimated rate of
	growth of the state's economy; and
	(2)  determine for purposes of the Foundation School
	Program under Chapter 48, Education Code:
	(A)  the estimated state share of the program for
	the next biennium, including the instructional materials and
	technology allotment under Section 31.0211, Education Code, and
	excluding any anticipated federal funding;
	(B)  the estimated reduction in the state share of
	the program from the current biennium to the next biennium
	attributable to the rate of growth of the taxable value of property
	in the state for the next biennium, based on the estimates submitted
	under Section 48.269, Education Code;
	(C)  the cost per cent of reducing the state
	compression percentage under Section 48.255, Education Code, for
	the next biennium; and
	(D)  a recommended state compression percentage
	under Section 48.255, Education Code, for the next biennium, based
	on the determinations made under Subdivision (1) and Paragraphs
	(A), (B), and (C).
	SECTION  1.053.  Section 316.007(a), Government Code, is
	amended to read as follows:
	(a)  The Legislative Budget Board shall include in its budget
	recommendations:
	(1)  the proposed limit of appropriations from state
	tax revenues not dedicated by the constitution; and
	(2)  the recommended state compression percentage
	under Section 48.255, Education Code.
	SECTION 1.054.  Section 322.008(b), Government Code, is
	amended to read as follows:
	(b)  The general appropriations bill may include for
	purposes of information the funding elements computed by the
	Legislative Budget Board under Section 316.002(a)(2) [42.007,
	Education Code, excluding the values for each school district
	calculated under Section 42.007(c)(2), Education Code. If the
	funding elements are included, the funding elements under Section
	42.007(c)(3), Education Code, shall be reported in dollar amounts
	per pupil].
	SECTION 1.055.  Sections 825.405(a), (b), (e), and (f),
	Government Code, are amended to read as follows:
	(a)  An employing school district or an open-enrollment
	charter school, as applicable, shall pay the state's contribution
	on the portion of a member's salary that exceeds the statutory
	minimum salary for [For] members:
	(1)  entitled to the minimum salary for certain school
	personnel under Section 21.402, Education Code;
	(2)  [, and for members] who would have been entitled to
	the minimum salary for certain school personnel under former
	Section 16.056, Education Code, as that section existed on January
	1, 1995; and
	(3)  who would be entitled to the minimum salary for
	certain school personnel under Section 21.402, Education Code, if
	the member was employed by a school district subject to that section
	instead of being employed by:
	(A)  an open-enrollment charter school; or
	(B)  a school district that has adopted a local
	innovation plan under Chapter 12A, Education Code, that exempts the
	district's employees from the minimum salary schedule under that
	section[, the employing district shall pay the state's contribution
	on the portion of the member's salary that exceeds the statutory
	minimum salary].
	(b)  For purposes of this section,[:
	[(1)]  the statutory minimum salary for a member
	described by:
	(1)  Subsection (a)(1) [certain school personnel under
	Section 21.402, Education Code,] is the salary provided by Section
	21.402, Education Code [that section multiplied by the cost of
	education adjustment applicable under Section 42.102, Education
	Code, to the district in which the member is employed]; [and]
	(2)  Subsection (a)(2) [the statutory minimum salary
	for members who would have been entitled to the minimum salary for
	certain school personnel under former Section 16.056, Education
	Code, as that section existed on January 1, 1995,] is a minimum
	salary computed in the same manner as the minimum salary for certain
	school personnel under Section 21.402, Education Code; and
	(3)  Subsection (a)(3) is the minimum salary the member
	would have been entitled to if the member was subject to Section
	21.402, Education Code[, multiplied by the cost of education
	adjustment applicable under Section 42.102, Education Code, to the
	district in which the member is employed].
	(e)  After the end of each school year, the retirement system
	shall certify to the commissioner of education:
	(1)  the names of any employers [employing districts]
	that have failed to remit, within the period required by Section
	825.408, all contributions required under this section for the
	school year; and
	(2)  the amounts of the unpaid contributions.
	(f)  If the commissioner of education receives a
	certification under Subsection (e), the commissioner shall direct
	the comptroller of public accounts to withhold the amount
	certified, plus interest computed at the rate and in the manner
	provided by Section 825.408, from the first state money payable to
	the employer [school district].  The amount withheld shall be
	deposited to the credit of the appropriate accounts of the
	retirement system.
	SECTION 1.056.  Section 26.08, Tax Code, is amended by
	amending Subsections (a), (b), (d), (g), (i), and (n) and adding
	Subsections (a-1) and (n-1) to read as follows:
	(a)  If the governing body of a school district adopts a tax
	rate that exceeds the district's ratification [rollback] tax rate,
	the registered voters of the district at an election held for that
	purpose must determine whether to approve the adopted tax rate.
	(a-1)  When increased expenditure of money by a school
	district is necessary to respond to a disaster, including a
	tornado, hurricane, flood, or other calamity, but not including a
	drought, that has impacted a school district and the governor has
	requested federal disaster assistance for the area in which the
	school district is located, an election is not required under this
	section to approve the tax rate adopted by the governing body for
	the year following the year in which the disaster occurs. A tax
	rate adopted under this subsection applies only in the year for
	which the rate is adopted. If a district adopts a tax rate under
	this subsection, the amount by which that rate exceeds the
	district's ratification tax rate for that tax year may not be
	considered when calculating the district's ratification tax rate
	for the tax year following the year in which the district adopts the
	rate.
	(b)  The governing body shall order that the election be held
	in the school district on the next uniform election [a] date
	prescribed by [not less than 30 or more than 90 days after the day on
	which it adopted the tax rate.] Section 41.001, Election Code, that
	occurs after the date of the election order and that allows
	sufficient time to comply with the requirements of other law [does
	not apply to the election unless a date specified by that section
	falls within the time permitted by this section].  At the election,
	the ballots shall be prepared to permit voting for or against the
	proposition:  "Ratifying [Approving] the ad valorem tax rate of ___
	(insert adopted tax rate) [$_____ per $100 valuation] in (name of
	school district) for the current year, a rate that will result in an
	increase of _____ (insert percentage increase in maintenance and
	operations tax revenue under the adopted tax rate as compared to
	maintenance and operations tax revenue in the preceding tax year)
	percent in maintenance and operations tax revenue for the district
	for the current year as compared to the preceding year, which is an
	additional $____ (insert dollar amount of increase in maintenance
	and operations tax revenue under the adopted tax rate as compared to
	maintenance and operations tax revenue in the preceding tax year)
	[is $_____ higher per $100 valuation than the school district
	rollback tax rate, for the purpose of (description of purpose of
	increase)]."  [The ballot proposition must include the adopted tax
	rate and the difference between that rate and the rollback tax rate
	in the appropriate places.]
	(d)  If the proposition is not approved as provided by
	Subsection (c), the governing body may not adopt a tax rate for the
	school district for the current year that exceeds the school
	district's ratification [rollback] tax rate.
	(g)  In a school district that received distributions from an
	equalization tax imposed under former Chapter 18, Education Code,
	the effective rate of that tax as of the date of the county unit
	system's abolition is added to the district's ratification
	[rollback] tax rate.
	(i)  For purposes of this section, "tier one maintenance and
	operations tax rate" and "enrichment tax rate" have the meanings
	assigned by Section 45.0032, Education Code [the effective
	maintenance and operations tax rate of a school district is the tax
	rate that, applied to the current total value for the district,
	would impose taxes in an amount that, when added to state funds that
	would be distributed to the district under Chapter 42, Education
	Code, for the school year beginning in the current tax year using
	that tax rate, would provide the same amount of state funds
	distributed under Chapter 42, Education Code, and maintenance and
	operations taxes of the district per student in weighted average
	daily attendance for that school year that would have been
	available to the district in the preceding year if the funding
	elements for Chapters 41 and 42, Education Code, for the current
	year had been in effect for the preceding year].
	(n)  For purposes of this section, the ratification
	[rollback] tax rate of a school district [whose maintenance and
	operations tax rate for the 2005 tax year was $1.50 or less per $100
	of taxable value] is:
	(1)  for the 2019 [2006] tax year, the sum of the
	following:
	(A)  the rate that is equal to 96 [88.67] percent
	of the district's tier one maintenance and operations tax rate
	[adopted by the district] for the 2018 [2005] tax year;
	(B)  [,] the district's enrichment tax rate for
	the 2018 tax year, less the amount by which the district is required
	to reduce the district's enrichment tax rate under Section
	48.202(f), Education Code, in the 2019 tax year; [of $0.04 per $100
	of taxable value,] and
	(C)  the district's current debt rate; and
	(2)  for the 2020 [2007] and subsequent tax years, the
	sum [lesser] of the following:
	(A)  [the sum of the following:
	[(i)]  the rate per $100 of taxable value
	that is equal to the product of the state compression percentage, as
	determined under Section 48.255 [42.2516], Education Code, for the
	current year and $1.00 [$1.50];
	(B)  the district's enrichment tax rate for the
	2018 tax year, less the rate by which the district is required to
	reduce the district's enrichment tax rate under Section 48.202(f),
	Education Code, in the current tax year [(ii)     the rate of $0.04 per
	$100 of taxable value];
	(C)  the greater of:
	(i)  the rate of $0.05 per $100 of taxable
	value, less the district's enrichment tax rate for the preceding
	tax year; or
	(ii)  zero;
	(D) [(iii)]  the rate that is equal to the sum of
	the differences for the 2019 [2006] and each subsequent tax year
	between the adopted tax rate of the district for that year if the
	rate was approved at an election under this section and the
	ratification [rollback] tax rate of the district for that year; and
	(E) [(iv)]  the district's current debt rate[; or
	[(B)  the sum of the following:
	[(i)     the effective maintenance and
	operations tax rate of the district as computed under Subsection
	(i) or (k), as applicable;
	[(ii)     the rate per $100 of taxable value
	that is equal to the product of the state compression percentage, as
	determined under Section 42.2516, Education Code, for the current
	year and $0.06; and
	[(iii)  the district's current debt rate].
	(n-1)  This section applies only to a school district that,
	for the 2018 tax year, adopted a maintenance and operations tax rate
	equal to the sum of the district's tier one maintenance and
	operations tax rate and the rate of $0.04 per $100 of taxable value.
	For the 2020 tax year, the district shall substitute "$0.04" for
	"$0.05" in Subsection (n)(2)(C)(i) if the governing body of the
	district does not adopt by unanimous vote for that tax year a
	maintenance and operations tax rate at least equal to the sum of the
	district's tier one maintenance and operations tax rate and the
	rate of $0.05 per $100 of taxable value.
	ARTICLE 2.  PUBLIC EDUCATION
	SECTION 2.001.  Subchapter C, Chapter 7, Education Code, is
	amended by adding Section 7.070 to read as follows:
	Sec. 7.070.  COORDINATION OF DATA COLLECTION. The
	commissioner may enter into agreements with appropriate entities as
	necessary to provide for the collection of data regarding college,
	career, and military readiness of public school students, including
	data maintained by:
	(1)  governmental agencies of the United States, this
	state, or another state;
	(2)  political subdivisions of this state or another
	state;
	(3)  public or private institutions of higher
	education; and
	(4)  relevant private organizations.
	SECTION 2.002.  Subchapter D, Chapter 11, Education Code, is
	amended by adding Section 11.185 to read as follows:
	Sec. 11.185.  EARLY CHILDHOOD LITERACY PLAN. (a)  The board
	of trustees of each school district shall adopt an early childhood
	literacy plan that sets specific annual goals for the following
	five school years to reach quantifiable goals for performance on
	the third grade reading assessment instrument administered under
	Section 39.023.
	(b)  The plan adopted under Subsection (a) must:
	(1)  identify annual goals for students in each group
	evaluated under the closing the gaps domain under Section
	39.053(c)(3);
	(2)  include annual goals for aggregate student growth
	on an assessment determined by the board of trustees;
	(3)  provide for targeted professional development for
	classroom teachers in kindergarten or first, second, or third grade
	who are assigned to campuses that the board of trustees identifies
	as not meeting the plan's goals;
	(4)  assign at least one district-level administrator
	or employee of the regional education service center for the
	district's region to:
	(A)  coordinate implementation of the plan; and
	(B)  submit an annual report to the board of
	trustees on the district's progress toward the goals set under the
	plan; and
	(5)  be reviewed annually by the board of trustees at a
	public meeting.
	(c)  The plan adopted under Subsection (a) may set separate
	goals for students in a bilingual education or special language
	program under Subchapter B, Chapter 29.
	(d)  The professional development provided to classroom
	teachers under Subsection (b)(3) must, as appropriate, consider the
	unique needs of students in a bilingual education or special
	language program under Subchapter B, Chapter 29.
	(e)  The commissioner may adopt rules as necessary to
	implement this section.
	SECTION 2.003.  Section 12.104(b), Education Code, as
	amended by Chapters 324 (S.B. 1488), 522 (S.B. 179), and 735 (S.B.
	1153), Acts of the 85th Legislature, Regular Session, 2017, is
	reenacted and amended to read as follows:
	(b)  An open-enrollment charter school is subject to:
	(1)  a provision of this title establishing a criminal
	offense; and
	(2)  a prohibition, restriction, or requirement, as
	applicable, imposed by this title or a rule adopted under this
	title, relating to:
	(A)  the Public Education Information Management
	System (PEIMS) to the extent necessary to monitor compliance with
	this subchapter as determined by the commissioner;
	(B)  criminal history records under Subchapter C,
	Chapter 22;
	(C)  reading instruments and accelerated reading
	instruction programs under Section 28.006;
	(D)  accelerated instruction under Section
	28.0211;
	(E)  high school graduation requirements under
	Section 28.025;
	(F)  special education programs under Subchapter
	A, Chapter 29;
	(G)  bilingual education under Subchapter B,
	Chapter 29;
	(H)  prekindergarten programs under Subchapter E
	or E-1, Chapter 29;
	(I)  extracurricular activities under Section
	33.081;
	(J)  discipline management practices or behavior
	management techniques under Section 37.0021;
	(K)  health and safety under Chapter 38;
	(L)  public school accountability under
	Subchapters B, C, D, F, G, and J, Chapter 39, and Chapter 39A;
	(M)  the requirement under Section 21.006 to
	report an educator's misconduct;
	(N)  intensive programs of instruction under
	Section 28.0213;
	(O)  the right of a school employee to report a
	crime, as provided by Section 37.148; [and]
	(P)  bullying prevention policies and procedures
	under Section 37.0832;
	(Q)  the right of a school under Section 37.0052
	to place a student who has engaged in certain bullying behavior in a
	disciplinary alternative education program or to expel the student;
	[and]
	(R)  the right under Section 37.0151 to report to
	local law enforcement certain conduct constituting assault or
	harassment;
	(S) [(P)]  a parent's right to information
	regarding the provision of assistance for learning difficulties to
	the parent's child as provided by Sections 26.004(b)(11) and
	26.0081(c) and (d); and
	(T)  the early childhood literacy plan under
	Section 11.185.
	SECTION 2.004.  Subchapter B, Chapter 21, Education Code, is
	amended by adding Sections 21.063 and 21.064 to read as follows:
	Sec. 21.063.  TEACHER DESIGNATIONS ON CERTIFICATE. (a)  The
	board shall place the appropriate designation issued to a teacher
	under Subchapter P on the teacher's certificate as soon as
	practicable after being notified by the agency of the issuance of
	the designation.
	(b)  The board shall remove a designation under Subchapter P
	from a teacher's certificate on:
	(1)  expiration of the designation, unless the agency
	notifies the board that the designation has been renewed; or
	(2)  revocation of the designation under Section
	21.755(d).
	Sec. 21.064.  LEGACY MASTER TEACHER CERTIFICATIONS. (a)
	The board shall recognize a master teacher certificate issued under
	former Section 21.0481, 21.0482, 21.0483, or 21.0484 until the
	certificate expires. The board shall note a designation of
	"legacy" on the certificate.
	(b)  A master teacher certificate described by Subsection
	(a) is not eligible for funding under the educator effectiveness
	allotment under Section 48.154.
	SECTION 2.005.  Sections 21.351(a) and (c), Education Code,
	are amended to read as follows:
	(a)  The commissioner shall adopt a recommended appraisal
	process and criteria on which to appraise the performance of
	teachers. The criteria must be based on observable, job-related
	behavior, including:
	(1)  a teacher's [teachers'] implementation of
	discipline management procedures; and
	(2)  the performance of a teacher's [teachers']
	students.
	(c)  Under the recommended appraisal process, an appraiser
	must be the teacher's supervisor or a person approved by the board
	of trustees. An appraiser who is a classroom teacher may not
	appraise the performance of another classroom teacher who teaches
	at the same school campus at which the appraiser teaches, unless it
	is impractical because of the number of campuses or unless the
	appraiser is in a supervisory role or is the chair of a department
	or grade level whose job description includes classroom observation
	responsibilities.
	SECTION 2.006.  Section 21.355(d), Education Code, is
	amended to read as follows:
	(d)  A school district or open-enrollment charter school
	shall [may] give the agency information regarding the performance
	of a teacher or administrator, including a document evaluating the
	performance of a teacher or administrator currently or previously
	employed by the district or school for purposes of an investigation
	conducted by the agency.
	SECTION 2.007.  Section 21.402, Education Code, is amended
	by amending Subsections (a) and (c-1) and adding Subsections (c-2),
	(c-3), and (c-4) to read as follows:
	(a)  Except as provided by Subsection (e-1) [or (f)], a
	school district must pay each [classroom teacher,] full-time
	librarian, full-time school counselor certified under Subchapter
	B, or full-time school nurse not less than the minimum monthly
	salary, based on the employee's level of experience in addition to
	other factors, as determined by commissioner rule, determined by
	the following formula:
	MS = SF x FS
	where:
	"MS" is the minimum monthly salary;
	"SF" is the applicable salary factor specified by Subsection
	(c); and
	"FS" is the amount, as determined by the commissioner under
	Subsection (b), of the basic allotment as provided by Section
	48.051(a) or (b) [42.101(a) or (b)] for a school district with a
	maintenance and operations tax rate at least equal to the state
	maximum compressed tax rate, as defined by Section 48.051
	[42.101(a)].
	(c-1)  Notwithstanding Subsections (a) and (b), each school
	district shall pay a monthly salary to each [classroom teacher,
	full-time speech pathologist,] full-time librarian, full-time
	school counselor certified under Subchapter B, and full-time school
	nurse that is at least equal to the following monthly salary or the
	monthly salary determined by the commissioner under Subsections (a)
	and (b), whichever is greater:
	Years of Monthly
	Experience Salary
	0 2,732
	1 2,791
	2 2,849
	3 2,908
	4 3,032
	5 3,156
	6 3,280
	7 3,395
	8 3,504
	9 3,607
	10 3,704
	11 3,796
	12 3,884
	13 3,965
	14 4,043
	15 4,116
	16 4,186
	17 4,251
	18 4,313
	19 4,372
	20 & Over 4,427
	(c-2)  Except as provided by Subsection (c-4), a school
	district must pay each fully certified classroom teacher not less
	than the following monthly salary, based on the teacher's level of
	experience in addition to other factors, as determined by
	commissioner rule:
	Years of Monthly
	Experience Salary
	0 3,300
	1 3,700
	2 4,050
	3 4,350
	4 4,600
	5 4,800
	6 4,950
	7 5,050
	8 5,125
	9 5,175
	10 5,200
	11 5,226
	12 5,250
	13 5,275
	14 5,300
	15 5,310
	16 5,320
	17 5,330
	18 5,340
	19 5,350
	20 & Over 5,360
	(c-3)  For purposes of Subsection (c-2), a "fully certified
	classroom teacher" means a classroom teacher who holds a
	certificate issued under Subchapter B but does not include:
	(1)  a person who holds an emergency certificate issued
	under Section 21.041(b)(2);
	(2)  a person who holds a certificate issued pursuant
	to enrollment in an approved alternative certification program
	under Section 21.049 but who has not completed all program and other
	certification requirements;
	(3)  a person who holds a school district teaching
	permit issued under Section 21.055; or
	(4)  a person employed under a waiver granted by the
	commissioner under Section 7.056.
	(c-4)  The board of trustees of a school district may adopt a
	minimum salary schedule based on performance tiers, as determined
	by teacher appraisal and performance criteria under Sections 21.351
	and 21.352, instead of years of experience.  A minimum salary
	schedule adopted under this subsection:
	(1)  is not required to have a salary factor based on
	minimum years of experience for a performance tier;
	(2)  must include:
	(A)  a minimum salary for each performance tier;
	and
	(B)  at least one performance tier with a minimum
	salary of not less than the minimum salary under the salary schedule
	specified by Subsection (c-2) for a classroom teacher with 20 or
	more years of experience; and
	(3)  may not set a minimum salary at an amount that is
	less than the minimum salary under the salary schedule specified by
	Subsection (c-2) for a classroom teacher with zero years of
	experience.
	SECTION 2.008.  Chapter 21, Education Code, is amended by
	adding Subchapter P to read as follows:
	SUBCHAPTER P.  RECOGNIZED, EXEMPLARY, AND MASTER TEACHER
	DESIGNATIONS
	Sec. 21.751.  DEFINITION. In this subchapter, "classroom
	teacher" includes an individual who:
	(1)  is a teacher of record who teaches at least half
	the average number of students for a teaching assignment at the
	school campus at which the teacher is employed; and
	(2)  satisfies the amount of teaching time requirement
	in the definition of a classroom teacher under Section 5.001 by
	providing educator leadership, including collaborating with,
	mentoring, or supporting other teachers.
	Sec. 21.752.  RECOGNIZED, EXEMPLARY, AND MASTER TEACHER
	DESIGNATIONS.  (a)  To recognize the performance of teachers in this
	state, the commissioner shall:
	(1)  establish an approval process for school districts
	and open-enrollment charter schools to designate a teacher as a
	recognized, exemplary, or master teacher and include the
	designation on the teacher's teaching certificate;
	(2)  develop and provide technical assistance for
	school districts and open-enrollment charter schools in making
	teacher designations, including:
	(A)  methods to involve staff in locally
	developing the process for designating teachers under this
	subchapter; and
	(B)  assistance focusing on problems faced by
	rural school districts; and
	(3)  subject to Subsection (b), authorize school
	districts and open-enrollment charter schools to make teacher
	designations for a five-year period, provided that the district's
	teacher designation system meets the requirements under Section
	21.754.
	(b)  The commissioner shall use an institution of higher
	education to verify that the appraisals of a representative sample
	of classroom teachers meet the requirements for teacher
	designations under this subchapter. Verification may include
	on-site classroom observations or observations by video or audio
	recording of classroom sessions.
	Sec. 21.753.  ELIGIBILITY CRITERIA FOR TEACHER DESIGNATION.
	(a)  To be eligible for a teacher designation under this subchapter,
	a classroom teacher must:
	(1)  hold an eligible teaching certificate issued under
	Subchapter B; and
	(2)  satisfy any additional requirements adopted by the
	school district or open-enrollment charter school at which the
	teacher is employed.
	(b)  A school district or open-enrollment charter school may
	designate a classroom teacher as recognized if the classroom
	teacher:
	(1)  holds a National Board Certification issued by the
	National Board for Professional Teaching Standards; and
	(2)  meets the other requirements of this section.
	(c)  Except as provided by Subsection (d), the commissioner
	may approve a school district or open-enrollment charter school to
	designate a teacher under this subchapter if the district's or
	school's designation system under Section 21.754 determines that
	among teachers in the state in similar teaching assignments, the
	teacher is:
	(1)  for a recognized teacher, in the top 33 percent in
	teaching performance;
	(2)  for an exemplary teacher, in the top 20 percent in
	teaching performance; or
	(3)  for a master teacher, in the top 5 percent of
	teaching performance.
	(d)  The commissioner may raise the percentages required
	under Subsection (c) to ensure consistency of teacher performance
	standards over multiple school years as statewide performance
	improves, including for the purpose of teacher designation
	renewals.
	Sec. 21.754.  DISTRICT TEACHER DESIGNATION SYSTEMS. (a)  A
	district's teacher designation system must incorporate:
	(1)  an educator appraisal system that complies with
	Section 21.351 or 21.352, including incorporating student
	performance, which may be measured by student performance over
	multiple school years;
	(2)  student perception surveys for the third grade
	level and higher;
	(3)  educator leadership, including collaborating
	with, mentoring, or supporting other teachers;
	(4)  reliable observation-based appraisal components,
	including the use of independent observers and processes to ensure
	inter-rater reliability of observers; and
	(5)  reliable underlying student assessments used to
	evaluate student performance, including test security protocols
	and defined testing windows.
	(a-1)  A school district's or open-enrollment charter
	school's teacher designation system is not required to incorporate
	the surveys required under Subsection (a)(2) until the 2022-2023
	school year. This subsection expires September 1, 2023.
	(b)  The commissioner may not authorize a school district or
	open-enrollment charter school to make teacher designations under
	this subchapter until the district's teacher designation system has
	evaluated classroom teachers in compliance with Subsection (a)(4).
	(c)  The commissioner may develop an auditing process for
	district teacher designation systems to maintain quality and ensure
	compliance. The commissioner may, as necessary:
	(1)  revoke the commissioner's approval of a district's
	designation system;
	(2)  require modifications to a district's designation
	system to retain the commissioner's approval;
	(3)  suspend eligibility for funding for a district's
	noncompliance with an audit; or
	(4)  recover funds under Section 48.272 from a district
	that has a designation system that is out of compliance or for which
	the commissioner's approval has been revoked.
	(d)  The commissioner may adopt necessary reporting
	processes and timelines for the auditing process under Subsection
	(c).
	Sec. 21.755.  VALIDITY AND EXPIRATION OF TEACHER
	DESIGNATION. (a)  A teacher designation under this subchapter:
	(1)  is valid until the teacher designation expires
	regardless of whether the teacher:
	(A)  changes teaching assignment;
	(B)  transfers school campuses; or
	(C)  is employed by another school district or
	open-enrollment charter school; and
	(2)  expires at the end of the school year during which
	the fifth anniversary of the date on which the teacher receives the
	designation occurs.
	(b)  A teacher has no vested property right in a teacher
	designation assigned to the teacher under this subchapter.
	(c)  A teacher designation issued under this subchapter is
	void on the determination that the designation was issued
	improperly.  Subchapters C through H, Chapter 2001, Government
	Code, do not apply to the voiding of a teacher designation under
	this subsection.
	(d)  The State Board for Educator Certification may revoke or
	suspend a certificate holder's teacher designation issued under
	this subchapter.
	Sec. 21.756.  MULTIPLE DESIGNATIONS PROHIBITED. A teacher
	may receive only one teacher designation under this subchapter at
	any time. If a teacher qualifies for:
	(1)  both a recognized and exemplary teacher
	designation, the teacher receives the exemplary designation; and
	(2)  either a recognized or exemplary designation and a
	master designation, the teacher receives a master designation.
	Sec. 21.757.  INFORMATION RELATING TO TEACHER AND STUDENT
	PERFORMANCE. (a) The agency, or an entity the agency contracts
	with to implement this subchapter, may access information required
	to verify an eligibility determination under this subchapter,
	including information from the school district or open-enrollment
	charter school at which the teacher is or was employed relating to
	the performance of the teacher's current or previous students.
	(b)  The agency shall collect information necessary to
	implement this subchapter, which may include student performance
	information for a sample of students across the state and
	information regarding educator appraisals.
	(c)  A school district or open-enrollment charter school
	shall provide any information required under this subchapter.
	(d)  Information otherwise confidential remains
	confidential and is not subject to Chapter 552, Government Code.
	Sec. 21.758.  FEES. (a) The commissioner may adopt fees for
	the authorization of school districts and open-enrollment charter
	schools to make teacher designations under this subchapter.
	(b)  A fee adopted by the agency under this subchapter is not
	subject to Sections 2001.0045 and 2001.0221, Government Code.
	Sec. 21.759.  STUDENT PERFORMANCE STUDY. (a) The
	commissioner shall periodically conduct a study using an external
	organization to determine the impact of the teacher designations
	issued under this subchapter on student performance.
	(b)  The commissioner shall make recommendations as
	necessary to the governor and the legislature to improve the
	quality of and impact on student performance of teacher
	designations issued under this subchapter.
	Sec. 21.760.  ADVISORY COMMITTEE OR PANEL. (a)  The
	commissioner may appoint a committee or panel to advise, make
	recommendations, or make determinations relating to any duties
	assigned to the commissioner under this subchapter.
	(b)  A committee or panel appointed under this section is not
	subject to Chapter 2110, Government Code.
	Sec. 21.761.  RULES; FINALITY OF DECISIONS. (a) The
	commissioner may adopt rules to implement this subchapter.
	(b)  A decision made by the commissioner under this
	subchapter is final and may not be appealed.
	SECTION 2.009.  Section 25.085, Education Code, is amended
	by adding Subsection (i) to read as follows:
	(i)  Notwithstanding any other provision of this section, a
	student enrolled in a school district is not required to attend
	school for any additional instructional days described by Section
	25.0841.
	SECTION 2.010.  Section 25.112, Education Code, is amended
	by adding Subsection (g) to read as follows:
	(g)  The limit in Subsection (a) does not apply to a class
	taught by a teacher who has been issued a recognized, exemplary, or
	master teacher designation under Subchapter P, Chapter 21.
	SECTION 2.011.  Section 28.006, Education Code, is amended
	by amending Subsections (b), (c), (d), (f), and (i) and adding
	Subsections (b-1), (c-2), (c-3), and (l) to read as follows:
	(b)  The commissioner shall adopt a list of reading
	instruments that a school district may use to diagnose student
	reading development and comprehension.  For use in diagnosing the
	reading development and comprehension of kindergarten students,
	the commissioner shall adopt a [include on the commissioner's list
	at least two] multidimensional assessment tool that includes
	[tools.   A multidimensional assessment tool on the commissioner's
	list must either include] a reading instrument and tests [test] at
	least three developmental skills, including literacy[, or test at
	least two developmental skills, other than literacy, and be
	administered in conjunction with a separate reading instrument that
	is on a list adopted under this subsection].  A multidimensional
	assessment tool administered as provided by this subsection is
	considered to be a reading instrument for purposes of this section.
	A district-level committee established under Subchapter F, Chapter
	11, may adopt a list of reading instruments for use in the district
	in a grade level other than kindergarten in addition to the reading
	instruments on the commissioner's list.  Each reading instrument
	adopted by the commissioner or a district-level committee must be
	based on scientific research concerning reading skills development
	and reading comprehension.  A list of reading instruments adopted
	under this subsection must provide for diagnosing the reading
	development and comprehension of students participating in a
	program under Subchapter B, Chapter 29.
	(b-1)  The commissioner may approve an alternative reading
	instrument for use in diagnosing the reading development and
	comprehension of kindergarten students that complies with the
	requirements under Subsection (b).
	(c)  Each school district shall administer, at the
	[kindergarten and] first and second grade levels, a reading
	instrument on the list adopted by the commissioner or by the
	district-level committee.  The district shall administer the
	reading instrument in accordance with the commissioner's
	recommendations under Subsection (a)(1).
	(c-2)  Each school district shall administer at the
	kindergarten level a reading instrument adopted by the commissioner
	under Subsection (b) or approved by the commissioner under
	Subsection (b-1).  The district shall administer the reading
	instrument in accordance with the commissioner's recommendations
	under Subsection (a)(1).
	(c-3)  The commissioner by rule shall determine the
	performance on the reading instrument adopted under Subsection (b)
	that indicates kindergarten readiness.
	(d)  The superintendent of each school district shall:
	(1)  report to the commissioner and the board of
	trustees of the district the results of the reading instruments;
	(2)  not later than the 30th day after the date on which
	a reading instrument was administered report, in writing, to a
	student's parent or guardian the student's results on the [reading]
	instrument; and
	(3)  using the school readiness certification system
	provided to the school district in accordance with Section
	29.161(e), report electronically each student's raw score on the
	reading instrument to the agency for use in the school readiness
	certification system.
	(f)  This section may be implemented only if funds are
	appropriated for administering the reading instruments or if the
	reading instrument to be administered is provided to school
	districts at no cost to the districts.  Funds, other than local
	funds, may be used to pay the cost of administering a reading
	instrument only if the instrument is on the list adopted by the
	commissioner.
	(i)  The commissioner shall certify, not later than July 1 of
	each school year or as soon as practicable thereafter, whether
	sufficient funds have been appropriated statewide for the purposes
	of this section or whether the applicable reading instruments have
	been provided to school districts at no cost to the districts.  A
	determination by the commissioner is final and may not be appealed.
	For purposes of certification, the commissioner may not consider
	Foundation School Program funds.
	(l)  The commissioner may adopt rules as necessary to
	implement this section. Section 2001.0045, Government Code, does
	not apply to rules adopted under this subsection.
	SECTION 2.012.  Subchapter D, Chapter 29, Education Code, is
	amended by adding Section 29.124 to read as follows:
	Sec. 29.124.  CERTIFICATION REQUIRED. (a)  Each school
	district shall annually certify to the commissioner that the
	district has established a program for gifted and talented students
	as required by this subchapter.
	(b)  If the commissioner determines that a school district
	has failed to comply with Subsection (a) for a school year, the
	commissioner shall reduce the total amount of funding to which the
	district is entitled under Chapter 48 for that school year by an
	amount equal to the basic allotment multiplied by the product of:
	(1)  0.12; and
	(2)  an amount equal to five percent of the students in
	average daily attendance in the district.
	(c)  The commissioner may restore to a school district all or
	part of the funding withheld from the district's entitlement under
	Subsection (b) if during the school year the district complies with
	Subsection (a).
	SECTION 2.013.  Section 29.153, Education Code, is amended
	by amending Subsections (c) and (d) and adding Subsections (c-1),
	(d-1), and (d-2) to read as follows:
	(c)  A prekindergarten class under this section may [shall]
	be operated on a half-day basis for children under four years of age
	and shall be operated on a full-day basis for children who are at
	least four years of age.  A district is not required to provide
	transportation for a prekindergarten class, but transportation, if
	provided, is included for funding purposes as part of the regular
	transportation system.
	(c-1)  A prekindergarten class under this section for
	children who are least four years of age must comply with the
	program standards required for high quality prekindergarten
	programs under Subchapter E-1.
	(d)  Subject to Subsections (d-1) and (d-2), on [On]
	application of a district, the commissioner may exempt a district
	from the application of all or any part of this section, including
	all or any part of Subchapter E-1 for a prekindergarten class
	described by Subsection (c-1), if the commissioner determines that:
	(1)  the district would be required to construct
	classroom facilities in order to provide prekindergarten classes;
	or
	(2)  implementing any part of this section would result
	in fewer eligible children being enrolled in a prekindergarten
	class under this section.
	(d-1)  A district may not receive an exemption under
	Subsection (d) unless the district has solicited and considered at
	a public meeting proposals for partnerships with public or private
	entities regarding prekindergarten classes required under this
	section. A decision of the board of trustees regarding a
	partnership described by this subsection is final.
	(d-2)  An exemption under Subsection (d) may not be granted
	for a period longer than three school years and may be renewed only
	once.
	SECTION 2.014.  Section 29.1531(a), Education Code, is
	amended to read as follows:
	(a)  A school district may offer on a tuition basis or use
	district funds to provide:
	(1)  an additional half-day of prekindergarten classes
	to children who are eligible for classes under Section 29.153 and
	are under four years of age; and
	(2)  half-day and full-day prekindergarten classes to
	children not eligible for classes under Section 29.153.
	SECTION 2.015.  Section 29.1532(c), Education Code, is
	amended to read as follows:
	(c)  A school district that offers prekindergarten classes,
	including a high quality prekindergarten program class under
	Subchapter E-1, shall include the following information in the
	district's Public Education Information Management System (PEIMS)
	report:
	(1)  demographic information, as determined by the
	commissioner, on students enrolled in district and campus
	prekindergarten classes, including the number of students who are
	eligible for classes under Section 29.153;
	(2)  the numbers of half-day and full-day
	prekindergarten classes offered by the district and campus;
	(3)  the number of half-day prekindergarten classes for
	which the district has received an exemption from full-day
	operation under Section 29.153(d);
	(4)  the sources of funding for the prekindergarten
	classes;
	(5)  [(4)]  the class size and ratio of instructional
	staff to students for each prekindergarten program class offered by
	the district and campus;
	(6)  [(5)]  if the district elects to administer an
	assessment instrument under Section 29.169 to students enrolled in
	district and campus prekindergarten program classes, a description
	and the results of each type of assessment instrument; and
	(7)  [(6)]  curricula used in the district's
	prekindergarten program classes.
	SECTION 2.016.  Section 29.1543, Education Code, is amended
	to read as follows:
	Sec. 29.1543.  EARLY EDUCATION REPORTS. The agency shall
	produce and make available to the public on the agency's Internet
	website annual district and campus-level reports containing
	information from the previous school year on early education in
	school districts and open-enrollment charter schools. A report
	under this section must contain:
	(1)  the information required by Section 29.1532(c) to
	be reported through the Public Education Information Management
	System (PEIMS);
	(2)  a description of the diagnostic reading
	instruments administered in accordance with Section 28.006(c) or
	(c-2);
	(3)  the number of students who were administered a
	diagnostic reading instrument administered in accordance with
	Section 28.006(c) or (c-2);
	(4)  the number of students whose scores from a
	diagnostic reading instrument administered in accordance with
	Section 28.006(c) or (c-2) indicate reading proficiency; [and]
	(5)  the number of kindergarten students who were
	enrolled in a prekindergarten program in the previous school year
	in the same district or school as the district or school in which
	the student attends kindergarten;
	(6)  the number and percentage of students who perform
	satisfactorily on the third grade reading or mathematics assessment
	instrument administered under Section 39.023, disaggregated by
	whether the student was eligible for free prekindergarten under
	Section 29.153;
	(7)  the number of students described by Subdivision
	(6) who attended kindergarten in the district, disaggregated by:
	(A)  whether the student met the kindergarten
	readiness standard on the reading instrument adopted under Section
	28.006;
	(B)  whether the student attended prekindergarten
	in the district; and
	(C)  the type of prekindergarten the student
	attended, if applicable; and
	(8)  the information described by Subdivisions (6) and
	(7) disaggregated by whether the student is educationally
	disadvantaged.
	SECTION 2.017.  Section 29.162, Education Code, is amended
	to read as follows:
	Sec. 29.162.  RULES [DETERMINATION OF FULL-DAY AND
	HALF-DAY]. (a) The commissioner may adopt rules for this
	subchapter, including rules establishing full-day and half-day
	minutes of operation requirements as provided by Section 25.081.
	(b)  Section 2001.0045, Government Code, does not apply to
	rules adopted under this section.
	SECTION 2.018.  The heading to Subchapter E-1, Chapter 29,
	Education Code, is amended to read as follows:
	SUBCHAPTER E-1. HIGH QUALITY PREKINDERGARTEN [GRANT] PROGRAM
	REQUIREMENTS
	SECTION 2.019.  Section 29.164, Education Code, is amended
	to read as follows:
	Sec. 29.164.  DEFINITION. In this subchapter, "program"
	means a high quality prekindergarten [grant] program required under
	Section 29.153(c-1) to be provided free of tuition or fees in
	accordance with this subchapter.
	SECTION 2.020.  Section 29.167(a), Education Code, is
	amended to read as follows:
	(a)  A school district shall select and implement a
	curriculum for a prekindergarten [grant] program [under this
	subchapter] that:
	(1)  includes the prekindergarten guidelines
	established by the agency;
	(2)  measures the progress of students in meeting the
	recommended learning outcomes; and
	(3)  does not use national curriculum standards
	developed by the Common Core State Standards Initiative.
	SECTION 2.021.  Section 29.170(a), Education Code, is
	amended to read as follows:
	(a)  The commissioner shall evaluate the use and
	effectiveness of prekindergarten funding [provided under this
	subchapter] in improving student learning. The commissioner shall
	identify effective instruction strategies implemented by school
	districts under this subchapter.
	SECTION 2.022.  Section 29.171(a), Education Code, is
	amended to read as follows:
	(a)  A school district that offers a prekindergarten
	[participating in the grant] program under this subchapter may
	enter into a contract with an eligible private provider to provide
	services or equipment for the program.
	SECTION 2.023.  Section 29.172, Education Code, is amended
	to read as follows:
	Sec. 29.172.  RULES. (a) The commissioner may adopt rules
	necessary to implement this subchapter.
	(b)  Section 2001.0045, Government Code, does not apply to
	rules adopted under this section.
	SECTION 2.024.  Section 29.190(a), Education Code, is
	amended to read as follows:
	(a)  A student is entitled to a subsidy under this section
	if:
	(1)  the student:
	(A)  successfully completes the career and
	technology program of a school district in which the student
	receives training and instruction for employment; or
	(B)  is enrolled in a special education program
	under Subchapter A; and
	(2)  the student passes a certification examination to
	qualify for a license or certificate that is an industry
	certification for purposes of Section 39.053(c)(1)(B)(v).
	SECTION 2.025.  Subchapter Z, Chapter 29, Education Code, is
	amended by adding Sections 29.924 and 29.925 to read as follows:
	Sec. 29.924.  BLENDED LEARNING GRANT PROGRAM. (a) In this
	section, "blended learning" means an instructional delivery method
	that combines classroom and online instruction.
	(b)  From funds appropriated or available for purposes of
	this section, the commissioner shall establish a grant program to
	assist school districts in developing and implementing effective
	blended learning models. In awarding grants under the program, the
	commissioner shall give priority to school districts that have the
	highest enrollment of students who are educationally
	disadvantaged.
	(c)  A school district that receives a grant under this
	section must:
	(1)  develop a plan to implement a blended learning
	model that meets the requirements under Subsection (d);
	(2)  provide training to educators on effective blended
	learning practices using a program approved by the commissioner for
	that purpose;
	(3)  after completion of the training under Subdivision
	(2):
	(A)  certify to the agency that the blended
	learning model has been implemented; and
	(B)  immediately following the fourth school year
	of implementation, submit to the agency a report on student
	outcomes under the blended learning model; and
	(4)  provide any other information to the agency as
	necessary for the implementation of this section.
	(d)  A plan to implement a blended learning model developed
	under Subsection (c) must:
	(1)  during the first year require implementation of
	the model across an entire grade level at a campus and permit
	subsequent expansion of the model to additional grade levels at the
	campus or, if the campus has achieved full implementation of the
	model across all grade levels, to additional campuses in a manner
	that provides students a consistent learning experience;
	(2)  require classroom teachers to personalize
	instruction for all students in a grade level using the blended
	learning model, including by:
	(A)  using curricula and assessments that allow
	each student to progress at the student's pace based on
	demonstrated proficiency;
	(B)  providing learning opportunities that give
	students, in collaboration with the teacher, control over the time,
	place, path, and pace of the student's learning; and
	(C)  allocating a certain amount of instructional
	preparation time to collaborating with students and developing
	blended learning lesson plans and activities driven by individual
	student needs;
	(3)  provide educators with professional development
	opportunities regarding blended learning; and
	(4)  require the use of a proficiency-based assessment
	to inform instruction and provide classroom teachers with relevant
	information regarding strengths and gaps in a student's learning
	and proficiency in the essential knowledge and skills.
	(e)  Funds awarded under the grant program may be used only
	to implement a program under this section and satisfy the
	requirements under Subsection (c).
	(f)  A school district may receive a grant under this section
	for not more than four consecutive school years.
	(g)  The commissioner shall adopt rules as necessary to
	implement this section, including rules establishing an
	application and selection process for awarding grants under this
	section and a list of programs that may be used for training under
	Subsection (c)(2). In adopting rules under this subsection, the
	commissioner may not impose any requirements on a school district's
	plan to implement a blended learning model not listed under
	Subsection (d).
	(h)  A decision of the commissioner under this section is
	final and may not be appealed.
	Sec. 29.925.  ENHANCEMENT SERVICES GRANT PROGRAM. (a)  In
	this section:
	(1)  "Committee" means an admission, review, and
	dismissal committee or a team established for a student under
	Section 504, Rehabilitation Act of 1973 (29 U.S.C. Section 794).
	(2)  "Parent" means a resident of this state who is a
	natural or adoptive parent, managing or possessory conservator,
	legal guardian, custodian, or other person with legal authority to
	act on behalf of a child.
	(3)  "Program" means the grant program established
	under this section.
	(4)  "Program participant" means a student and a parent
	of a student who has been accepted into the program.
	(b)  From funds appropriated or available for the purpose,
	including federal funding, the commissioner shall establish and
	administer a grant program to provide funding to school districts
	for eligible students to obtain enhancement services that:
	(1)  supplement the student's public education;
	(2)  promote and improve the student's overall academic
	performance; and
	(3)  exceed the level of services that the student's
	committee has determined to be necessary for the student to receive
	a free appropriate public education.
	(c)  A student is eligible to participate in the program if:
	(1)  the student is enrolled in a school district and
	was enrolled in that district during the entire preceding school
	year;
	(2)  the student has one or more of the following
	disabilities:
	(A)  dyslexia;
	(B)  autism;
	(C)  speech disability; or
	(D)  learning disability; and
	(3)  for one or more disabilities listed in Subdivision
	(2):
	(A)  an individualized education program has been
	developed for the student under Section 29.005; or
	(B)  the student is covered by Section 504,
	Rehabilitation Act of 1973 (29 U.S.C. Section 794).
	(d)  On or before the date established by commissioner rule,
	each school district annually shall provide information regarding
	the program to a parent of each student enrolled in the district who
	may be eligible to participate in the program.
	(e)  On or before the date established by commissioner rule,
	a parent of an eligible student may apply on behalf of the student
	to the agency for participation in the program for the school year
	for which the application is made. The school district in which the
	student is enrolled shall assist the parent in making the
	application.
	(f)  In accepting students into the program, the
	commissioner shall:
	(1)  give priority to students who are educationally
	disadvantaged; and
	(2)  to the greatest extent possible, ensure that the
	accepted students reflect the diversity of the state.
	(g)  Funds received under the program may be used only for
	the following services or goods provided to a program participant
	by an education service provider or vendor of educational products
	approved by the commissioner under Subsection (j):
	(1)  costs of transportation for the student to receive
	educational support services;
	(2)  the cost of instructional materials, as that term
	is defined by Section 31.002;
	(3)  fees for educational therapies or support services
	provided by a practitioner or provider; and
	(4)  costs of assistive technology.
	(h)  The parent of a student participating in the program, in
	consultation with the student's committee, shall select the
	services or goods allowed under Subsection (g) to be provided to the
	student under the program and the appropriate education service
	provider or vendor of educational products to provide those
	services or goods.  On the parent's selection, the school district
	at which the parent's student is enrolled shall contract with the
	selected education service provider or vendor of educational
	products to provide the selected services or goods to the student.
	(i)  An education service provider or vendor of educational
	products may not solicit or provide incentives to any program
	participant to select the provider or vendor to provide services or
	goods using money distributed under the program.
	(j)  An education service provider or vendor of educational
	products must apply to and be approved by the commissioner to
	receive money distributed under the program.  To be eligible for
	approval, an education service provider or vendor of educational
	products must:
	(1)  have operated for at least three consecutive
	years, including at least one year in this state;
	(2)  provide to the commissioner:
	(A)  a current financial audit from a certified
	public accountant;
	(B)  documentation indicating that the provider
	or vendor has completed a national criminal history record
	information review within a period established by commissioner
	rule; and
	(C)  a list of any national or state licenses,
	certifications, or credentials possessed by the provider or vendor;
	and
	(3)  agree not to use the national curriculum standards
	developed by the Common Core State Standards Initiative.
	(k)  A parent of a student participating in the program, a
	member of the student's committee, or an education service provider
	or vendor of educational products may appeal the commissioner's
	rejection of an application submitted under Subsection (j) in
	accordance with rules established by the commissioner.
	(l)  At least once each semester, an education service
	provider or vendor of educational products selected to provide
	services or goods to a student participating in the program shall
	meet with the student's parent and the members of the student's
	committee at a time and place determined by the school district to
	discuss the student's progress and to evaluate the continued use of
	the provider or vendor.
	(m)  The commissioner annually shall review each approved
	education service provider or vendor of educational products and,
	as appropriate, renew or revoke that approval.
	(n)  A student's participation in the program does not affect
	the student's rights or a school district's obligations with
	respect to the student under the Individuals with Disabilities
	Education Act (20 U.S.C. Section 1400 et seq.); Section 504,
	Rehabilitation Act of 1973 (29 U.S.C. Section 794); or the
	Americans with Disabilities Act of 1990 (42 U.S.C. Section 12101 et
	seq.).
	(o)  Each school district in which a participating student is
	enrolled shall submit an annual report to the agency on the use of
	grant funds awarded under this section.
	(o-1)  Not later than December 30, 2020, the agency shall
	review the performance of the program and submit to the legislature
	a report on the agency's conclusions.  In conducting the review, the
	agency shall solicit input from program participants and
	participating school districts.  This subsection expires September
	1, 2021.
	(p)  The commissioner shall adopt rules as necessary to
	implement this section.
	SECTION 2.026.  Sections 39.0261(a), (e), and (f), Education
	Code, are amended to read as follows:
	(a)  In addition to the assessment instruments otherwise
	authorized or required by this subchapter:
	(1)  each school year and at state cost, a school
	district may administer to students in the spring of the eighth
	grade an established, valid, reliable, and nationally
	norm-referenced preliminary college preparation assessment
	instrument for the purpose of diagnosing the academic strengths and
	deficiencies of students before entrance into high school;
	(2)  each school year and at state cost, a school
	district may administer to students in the 10th grade an
	established, valid, reliable, and nationally norm-referenced
	preliminary college preparation assessment instrument for the
	purpose of measuring a student's progress toward readiness for
	college and the workplace; and
	(3)  high school students in the spring of the 11th
	grade or during the 12th grade may select and take once, at state
	cost:
	(A)  [,] one of the valid, reliable, and
	nationally norm-referenced assessment instruments used by colleges
	and universities as part of their undergraduate admissions
	processes; or
	(B)  the assessment instrument designated by the
	Texas Higher Education Coordinating Board under Section 51.334.
	(e)  Subsection (a)(3) does not prohibit a high school
	student [in the spring of the 11th grade or during the 12th grade]
	from selecting and taking, at the student's own expense, an
	assessment instrument described by that subdivision [one of the
	valid, reliable, and nationally norm-referenced assessment
	instruments used by colleges and universities as part of their
	undergraduate admissions processes more than once].
	(f)  The provisions of this section regarding assessment
	instruments administered under Subsection (a)(1) or (2) apply only
	if the legislature appropriates funds for those purposes [of this
	section].
	SECTION 2.027.  Section 39.306(a), Education Code, is
	amended to read as follows:
	(a)  Each board of trustees shall publish an annual report
	describing the educational performance of the district and of each
	campus in the district that includes uniform student performance
	and descriptive information as determined under rules adopted by
	the commissioner. The annual report must also include:
	(1)  campus performance objectives established under
	Section 11.253 and the progress of each campus toward those
	objectives, which shall be available to the public;
	(2)  information indicating the district's
	accreditation status and identifying each district campus awarded a
	distinction designation under Subchapter G or considered an
	unacceptable campus under Chapter 39A;
	(3)  the district's current special education
	compliance status with the agency;
	(4)  a statement of the number, rate, and type of
	violent or criminal incidents that occurred on each district
	campus, to the extent permitted under the Family Educational Rights
	and Privacy Act of 1974 (20 U.S.C. Section 1232g);
	(5)  information concerning school violence prevention
	and violence intervention policies and procedures that the district
	is using to protect students;
	(6)  the findings that result from evaluations
	conducted under the Safe and Drug-Free Schools and Communities Act
	of 1994 (20 U.S.C. Section 7101 et seq.); [and]
	(7)  information received under Section 51.403(e) for
	each high school campus in the district, presented in a form
	determined by the commissioner; and
	(8)  the progress of the district and each campus in the
	district toward meeting three- and five-year goals developed by the
	district to achieve the state's public education goals under
	Section 39.335(a)(1).
	SECTION 2.028.  Subchapter K, Chapter 39, Education Code, is
	amended by adding Section 39.335 to read as follows:
	Sec. 39.335.  EDUCATIONAL PROGRESS REPORT. (a) Not later
	than December 1 of each year, the agency shall produce a report on
	progress in the preceding school year toward meeting the state's
	public education goals. The report must:
	(1)  include:
	(A)  the percentage of students who performed
	satisfactorily on an assessment instrument administered under
	Section 39.023;
	(B)  the percentage of students who graduated high
	school without the need for remediation, based on meeting college,
	career, or military readiness standards under Section
	39.053(c)(1)(B); and
	(C)  any other information indicating progress
	toward increasing the percentage of students described by
	Paragraphs (A) and (B); and
	(2)  be disaggregated by:
	(A)  each student group evaluated under the
	closing the gaps domain under Section 39.053(c)(3);
	(B)  school district or open-enrollment charter
	school; and
	(C)  high school campus.
	(b)  The agency may provide the report under Subsection (a)
	in writing or post the report on the agency's Internet website. The
	report may be combined with any other report produced by the agency.
	ARTICLE 3. REPEALER
	SECTION 3.001.  (a) The following provisions of the
	Education Code are repealed:
	(1)  Section 21.0481;
	(2)  Section 21.0482;
	(3)  Section 21.0483;
	(4)  Section 21.0484;
	(5)  Section 21.357;
	(6)  Sections 21.402(f) and (h);
	(7)  Section 21.410;
	(8)  Section 21.411;
	(9)  Section 21.412;
	(10)  Section 21.413;
	(11)  Sections 28.006(d-1) and (e);
	(12)  Section 29.097;
	(13)  Section 29.098;
	(14)  Section 29.165;
	(15)  Section 29.166;
	(16)  Section 39.233;
	(17)  Section 39.234;
	(18)  the headings to Chapters 41 and 42;
	(19)  the heading to Subchapter A, Chapter 41;
	(20)  the heading to Section 41.002;
	(21)  Sections 41.002(a) and (b);
	(22)  Section 41.0041;
	(23)  the heading to Subchapter D, Chapter 41;
	(24)  Section 41.0931;
	(25)  Section 41.098;
	(26)  the heading to Subchapter E, Chapter 41;
	(27)  the heading to Subchapter A, Chapter 42;
	(28)  the heading to Section 42.006;
	(29)  Section 42.007;
	(30)  the heading to Subchapter B, Chapter 42;
	(31)  Section 42.102;
	(32)  Section 42.103;
	(33)  Section 42.104;
	(34)  the heading to Subchapter C, Chapter 42;
	(35)  Section 42.1541;
	(36)  Section 42.156;
	(37)  Section 42.160;
	(38)  the heading to Subchapter E, Chapter 42;
	(39)  Section 42.2513;
	(40)  Section 42.2517;
	(41)  Section 42.2518; and
	(42)  the headings to Subchapters F and G, Chapter 42.
	(b)  Effective September 1, 2024, Sections 48.257(g), (h),
	and (i), Education Code, as transferred, redesignated, and amended
	by this Act, are repealed.
	(c)  Sections 26.08(o) and (p), Tax Code, are repealed.
	ARTICLE 4. TRANSITION
	SECTION 4.001.  The State Board for Educator Certification
	may not issue a new or renew a master teacher certificate issued
	under Section 21.0481, 21.0482, 21.0483, or 21.0484, Education
	Code, on or after the effective date of this Act.
	SECTION 4.002.  (a) Except as provided by Subsection (b) of
	this section, Article 2 of this Act applies beginning with the
	2019-2020 school year.
	(b)  Section 28.006, Education Code, as amended by this Act,
	applies beginning with the 2020-2021 school year.
	SECTION 4.003.  Section 26.08, Tax Code, as amended by this
	Act, applies beginning with the 2019 tax year.
	SECTION 4.004.  To the extent of any conflict, this Act
	prevails over another Act of the 86th Legislature, Regular Session,
	2019, relating to nonsubstantive additions to and corrections in
	enacted codes.
	ARTICLE 5. EFFECTIVE DATE
	SECTION 5.001.  (a) Except as provided by Subsection (b) of
	this section, this Act takes effect September 1, 2019.
	(b)  Section 48.106(b), Education Code, as transferred,
	redesignated, and amended by this Act, takes effect September 1,
	2020.