H.B. No. 3
 
 
 
 
AN ACT
  relating to public school finance and public education; creating a
  criminal offense; authorizing the imposition of a fee.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
  ARTICLE 1. PUBLIC SCHOOL FINANCE
         SECTION 1.001.  Subchapter D, Chapter 11, Education Code, is
  amended by adding Section 11.184 to read as follows:
         Sec. 11.184.  EFFICIENCY AUDIT. (a) For purposes of this
  section, "efficiency audit" means an investigation of the
  operations of a school district to examine fiscal management,
  efficiency, and utilization of resources.
         (b)  Except as provided by Subsection (b-1), the board of
  trustees of a school district shall conduct an efficiency audit
  before seeking voter approval to adopt a tax rate for the
  maintenance and operations of the district at an election held for
  that purpose and may not hold the election without complying with
  this section.
         (b-1)  The board of trustees 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, may hold an election
  to seek voter approval to adopt a maintenance and operations tax
  rate during the two-year period following the date of the
  declaration without conducting an efficiency audit otherwise
  required under this section.
         (c)  A school district must pay for the costs associated with
  an efficiency audit required under this section.
         (d)  The board of trustees of a school district must select
  an auditor to conduct an efficiency audit under this section not
  later than four months before the date on which the district
  proposes to hold an election to adopt a maintenance and operations
  tax rate.
         (e)  The board of trustees of a school district may select
  for purposes of Subsection (d) the auditor that conducts the
  district's annual audit under Section 44.008 and may include the
  efficiency audit as part of the district's annual audit.
         (f)  The Legislative Budget Board shall establish guidelines
  identifying the scope and areas of investigation of an efficiency
  audit, including identification of resources being used
  effectively and efficiently and identification of cost savings or
  reallocations. The Legislative Budget Board may consult with the
  agency to identify areas in which school districts in this state
  have a demonstrated history of effectively utilizing resources to
  improve student achievement and achieve cost savings. The auditor
  selected by the board of trustees of a school district must follow
  the guidelines established by the Legislative Budget Board under
  this subsection.
         (g)  An auditor selected by the board of trustees of a school
  district must maintain independence from the district and complete
  the efficiency audit not later than three months after the date the
  auditor was selected.
         (h)  Before an election at which a school district seeks
  voter approval to adopt a tax rate the board of trustees of the
  school district must hold an open meeting to discuss the results of
  the efficiency audit conducted under this section. Not later than
  30 days before the date of the election, the results of an
  efficiency audit conducted under this section must be posted on the
  school district's Internet website.
         (i)  A school district shall provide all documents, records,
  and personnel requested by the auditor as needed to conduct the
  audit in an efficient manner.
         SECTION 1.002.  Section 12.106, Education Code, is amended
  by amending Subsections (a), (a-1), and (a-2) and adding
  Subsections (a-3) and (a-4) 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 adjustment under Section 48.052, the
  funding under Sections 48.101, 48.110, 48.111, and 48.112, 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), the amount of the allotment under
  Section 48.102 is based solely on the basic allotment to which the
  charter holder is entitled and does not include any amount based on
  the allotment under Section 48.101[:
               [(1)     adjustments under Sections 42.102, 42.104, and
  42.105 are based on the average adjustment for the state; and
               [(2)     the adjustment under 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-2)  In addition to the funding provided by Subsection (a),
  a charter holder is entitled to receive for the open-enrollment
  charter school an allotment per student in average daily attendance
  in an amount equal to the difference between:
               (1)  the product of:
                     (A)  the quotient of:
                           (i)  the total amount of funding provided to
  eligible school districts under Section 48.101(b) or (c); and
                           (ii)  the total number of students in
  average daily attendance in school districts that receive an
  allotment under Section 48.101(b) or (c); and
                     (B)  the sum of one and the quotient of:
                           (i)  the total number of students in average
  daily attendance in school districts that receive an allotment
  under Section 48.101(b) or (c); and
                           (ii)  the total number of students in
  average daily attendance in school districts statewide; and
               (2)  $125.
         (a-3)  In addition to the funding provided by Subsections
  [Subsection] (a) and (a-2), a charter holder is entitled to receive
  for the open-enrollment charter school enrichment funding under
  Section 48.202 [42.302] based on the state average tax effort.
         (a-4)  In addition to the funding provided by Subsections
  (a), (a-2), and (a-3), a charter holder is entitled to receive
  funding for the open-enrollment charter school under Sections
  48.110 and 48.112 and Subchapter D, Chapter 48, if the charter
  holder would be entitled to the funding if the school were a school
  district.
         SECTION 1.003.  Section 13.054(f), Education Code, is
  amended to read as follows:
         (f)  For five years beginning with the school year in which
  the annexation occurs, a school district shall receive additional
  funding under this subsection or Subsection (h). The amount of
  funding shall be determined by multiplying the lesser of the
  enlarged district's local fund assignment computed under Section
  48.256 [42.252] or the enlarged district's total cost of tier one by
  a fraction, the numerator of which is the number of students
  residing in the territory annexed to the receiving district
  preceding the date of the annexation and the denominator of which is
  the number of students residing in the district as enlarged on the
  date of the annexation, and dividing the resulting product by the
  state compression percentage, as determined under Section 48.255.
         SECTION 1.004.  (a) Effective September 1, 2019, Section
  25.084(b), Education Code, is amended to read as follows:
         (b)  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].
         (b)  Effective September 1, 2020, 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 48.0051 if the
  district meets the criteria for receiving the incentive under that
  section.
         SECTION 1.005.  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 1.006.  Section 44.004, Education Code, is amended
  by amending Subsections (c), (e), and (i) and adding Subsection
  (c-2) to read as follows:
         (c)  The notice of public meeting to discuss and adopt the
  budget and the proposed tax rate may not be smaller than one-quarter
  page of a standard-size or a tabloid-size newspaper, and the
  headline on the notice must be in 18-point or larger type. Subject
  to Subsection (d), the notice must:
               (1)  contain a statement in the following form:
  "NOTICE OF PUBLIC MEETING TO DISCUSS BUDGET AND PROPOSED TAX RATE
         "The (name of school district) will hold a public meeting at
  (time, date, year) in (name of room, building, physical location,
  city, state). The purpose of this meeting is to discuss the school
  district's budget that will determine the tax rate that will be
  adopted. Public participation in the discussion is invited." The
  statement of the purpose of the meeting must be in bold type. In
  reduced type, the notice must state: "The tax rate that is
  ultimately adopted at this meeting or at a separate meeting at a
  later date may not exceed the proposed rate shown below unless the
  district publishes a revised notice containing the same information
  and comparisons set out below and holds another public meeting to
  discuss the revised notice.";
               (2)  contain a section entitled "Comparison of Proposed
  Budget with Last Year's Budget," which must show the difference,
  expressed as a percent increase or decrease, as applicable, in the
  amounts budgeted for the preceding fiscal year and the amount
  budgeted for the fiscal year that begins in the current tax year for
  each of the following:
                     (A)  maintenance and operations;
                     (B)  debt service; and
                     (C)  total expenditures;
               (3)  contain a section entitled "Total Appraised Value
  and Total Taxable Value," which must show the total appraised value
  and the total taxable value of all property and the total appraised
  value and the total taxable value of new property taxable by the
  district in the preceding tax year and the current tax year as
  calculated under Section 26.04, Tax Code;
               (4)  contain a statement of the total amount of the
  outstanding and unpaid bonded indebtedness of the school district;
               (5)  contain a section entitled "Comparison of Proposed
  Rates with Last Year's Rates," which must:
                     (A)  show in rows the tax rates described by
  Subparagraphs (i)-(iii), expressed as amounts per $100 valuation of
  property, for columns entitled "Maintenance & Operations,"
  "Interest & Sinking Fund," and "Total," which is the sum of
  "Maintenance & Operations" and "Interest & Sinking Fund":
                           (i)  the school district's "Last Year's
  Rate";
                           (ii)  the "Rate to Maintain Same Level of
  Maintenance & Operations Revenue & Pay Debt Service," which:
                                 (a)  in the case of "Maintenance &
  Operations," is the tax rate that, when applied to the current
  taxable value for the district, as certified by the chief appraiser
  under Section 26.01, Tax Code, and as adjusted to reflect changes
  made by the chief appraiser as of the time the notice is prepared,
  would impose taxes in an amount that, when added to state funds to
  be distributed to the district under Chapter 48 [42], would provide
  the same amount of maintenance and operations taxes and state funds
  distributed under Chapter 48 [42] per student in average daily
  attendance for the applicable school year that was available to the
  district in the preceding school year; and
                                 (b)  in the case of "Interest & Sinking
  Fund," is the tax rate that, when applied to the current taxable
  value for the district, as certified by the chief appraiser under
  Section 26.01, Tax Code, and as adjusted to reflect changes made by
  the chief appraiser as of the time the notice is prepared, and when
  multiplied by the district's anticipated collection rate, would
  impose taxes in an amount that, when added to state funds to be
  distributed to the district under Chapter 46 and any excess taxes
  collected to service the district's debt during the preceding tax
  year but not used for that purpose during that year, would provide
  the amount required to service the district's debt; and
                           (iii)  the "Proposed Rate";
                     (B)  contain fourth and fifth columns aligned with
  the columns required by Paragraph (A) that show, for each row
  required by Paragraph (A):
                           (i)  the "Local Revenue per Student," which
  is computed by multiplying the district's total taxable value of
  property, as certified by the chief appraiser for the applicable
  school year under Section 26.01, Tax Code, and as adjusted to
  reflect changes made by the chief appraiser as of the time the
  notice is prepared, by the total tax rate, and dividing the product
  by the number of students in average daily attendance in the
  district for the applicable school year; and
                           (ii)  the "State Revenue per Student," which
  is computed by determining the amount of state aid received or to be
  received by the district under Chapters [42,] 43, [and] 46, and 48
  and dividing that amount by the number of students in average daily
  attendance in the district for the applicable school year; and
                     (C)  contain an asterisk after each calculation
  for "Interest & Sinking Fund" and a footnote to the section that, in
  reduced type, states "The Interest & Sinking Fund tax revenue is
  used to pay for bonded indebtedness on construction, equipment, or
  both. The bonds, and the tax rate necessary to pay those bonds, were
  approved by the voters of this district.";
               (6)  contain a section entitled "Comparison of Proposed
  Levy with Last Year's Levy on Average Residence," which must:
                     (A)  show in rows the information described by
  Subparagraphs (i)-(iv), rounded to the nearest dollar, for columns
  entitled "Last Year" and "This Year":
                           (i)  "Average Market Value of Residences,"
  determined using the same group of residences for each year;
                           (ii)  "Average Taxable Value of Residences,"
  determined after taking into account the limitation on the
  appraised value of residences under Section 23.23, Tax Code, and
  after subtracting all homestead exemptions applicable in each year,
  other than exemptions available only to disabled persons or persons
  65 years of age or older or their surviving spouses, and using the
  same group of residences for each year;
                           (iii)  "Last Year's Rate Versus Proposed
  Rate per $100 Value"; and
                           (iv)  "Taxes Due on Average Residence,"
  determined using the same group of residences for each year; and
                     (B)  contain the following information: "Increase
  (Decrease) in Taxes" expressed in dollars and cents, which is
  computed by subtracting the "Taxes Due on Average Residence" for
  the preceding tax year from the "Taxes Due on Average Residence" for
  the current tax year;
               (7)  contain the following statement in bold print:
  "Under state law, the dollar amount of school taxes imposed on the
  residence of a person 65 years of age or older or of the surviving
  spouse of such a person, if the surviving spouse was 55 years of age
  or older when the person died, may not be increased above the amount
  paid in the first year after the person turned 65, regardless of
  changes in tax rate or property value.";
               (8)  contain the following statement in bold print:
  "Notice of Voter-Approval [Rollback] Rate: The highest tax rate the
  district can adopt before requiring voter approval at an election
  is (the school district voter-approval [rollback] rate determined
  under Section 26.08, Tax Code). This election will be automatically
  held if the district adopts a rate in excess of the voter-approval
  [rollback] rate of (the school district voter-approval [rollback]
  rate)."; and
               (9)  contain a section entitled "Fund Balances," which
  must include the estimated amount of interest and sinking fund
  balances and the estimated amount of maintenance and operation or
  general fund balances remaining at the end of the current fiscal
  year that are not encumbered with or by corresponding debt
  obligation, less estimated funds necessary for the operation of the
  district before the receipt of the first payment under Chapter 48
  [42] in the succeeding school year.
         (c-2)  The notice described by Subsection (c) must include a
  statement that a school district may not increase the district's
  maintenance and operations tax rate to create a surplus in
  maintenance and operations tax revenue for the purpose of paying
  the district's debt service.
         (e)  A person who owns taxable property in a school district
  is entitled to an injunction restraining the collection of taxes by
  the district if the district has not complied with the requirements
  of Subsections (b), (c), (c-1), (c-2), and (d), and, if applicable,
  Subsection (i), and the failure to comply was not in good faith. An
  action to enjoin the collection of taxes must be filed before the
  date the [school] district delivers substantially all of its tax
  bills.
         (i)  A school district that uses a certified estimate, as
  authorized by Subsection (h), may adopt a budget at the public
  meeting designated in the notice prepared using the estimate, but
  the district may not adopt a tax rate before the district receives
  the certified appraisal roll for the district required by Section
  26.01(a), Tax Code. After receipt of the certified appraisal roll,
  the district must publish a revised notice and hold another public
  meeting before the district may adopt a tax rate that exceeds:
               (1)  the rate proposed in the notice prepared using the
  estimate; or
               (2)  the district's voter-approval [rollback] rate
  determined under Section 26.08, Tax Code, using the certified
  appraisal roll.
         SECTION 1.007.  Subchapter A, Chapter 45, Education Code, is
  amended by adding Section 45.0021 to read as follows:
         Sec. 45.0021.  RESTRICTION ON MAINTENANCE TAX LEVY. (a) A
  school district may not increase the rate of the district's
  maintenance taxes described by Section 45.002 to create a surplus
  in maintenance tax revenue for the purpose of paying the district's
  debt service.
         (b)  A person who owns taxable property in a school district
  is entitled to an injunction restraining the collection of taxes by
  the district if the district adopts a maintenance tax rate in
  violation of Subsection (a). An action to enjoin the collection of
  taxes must be filed before the date the district delivers
  substantially all of the district's tax bills.
         SECTION 1.008.  Section 45.003, Education Code, is amended
  by adding Subsections (b-1) and (d-1) and amending Subsections (d)
  and (f) to read as follows:
         (b-1)  The ballot proposition under Subsection (b) must
  include the following statement: "THIS IS A PROPERTY TAX INCREASE."
         (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 $0.17 and the product of the state compression
  percentage, as determined under Section 48.255 [42.2516],
  multiplied by $1.00 [$1.50].
         (d-1)  Except as otherwise provided by this subsection or
  Section 26.08(a-1), Tax Code, if the voter-approval tax rate of a
  school district under Section 26.08(n), Tax Code, excluding the
  district's current debt rate under Section 26.08(n)(1)(C), Tax
  Code, for the 2019 tax year is equal to or exceeds $0.97 per $100 of
  taxable value, the district may not adopt a maintenance and
  operations tax rate for the 2019 tax year that exceeds the
  district's voter-approval rate, excluding the district's current
  debt rate under Section 26.08(n)(1)(C), Tax Code.  A school
  district that, before January 1, 2019, adopted a strategic plan
  through action taken by the board of trustees in a public meeting
  that proposed a maintenance and operations tax rate for the 2019 tax
  year that exceeds the rate permitted under this subsection may,
  subject to voter approval, adopt the rate proposed in the plan minus
  the amount by which the district is required to reduce the
  district's enrichment tax rate under Section 48.202(f). This
  subsection expires September 1, 2020.
         (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 66.67 percent [the state
  compression percentage, as determined under Section 42.2516,]
  multiplied by the rate of the maintenance tax levied by the district
  for the 2005 tax year, minus the amount by which $1.00 exceeds the
  product of the state compression percentage, as determined under
  Section 48.255, multiplied by $1.00.
         SECTION 1.009.  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) A school district's tier one maintenance and operations tax
  rate is the number of cents levied by the district 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.
         (a-1)  This subsection applies to a school district with a
  tier one maintenance and operations tax rate for the 2018-2019
  school year that was less than $1.00 per $100 of taxable value. For
  purposes of determining a school district's tier one maintenance
  and operations tax rate under Subsection (a) for the 2019-2020
  school year, the state compression percentage, as determined under
  Section 48.255, is applied to the number of cents levied by the
  district for the 2018-2019 school year for maintenance and
  operations that does not exceed $1.00. This subsection expires
  September 1, 2020.
         (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 maximum tax rate
  described by Subsection (a); and
               (2)  any cents of additional maintenance and operations
  tax effort that exceeds the sum of the maximum tax rate described by
  Subsection (a) and the maximum number of cents permitted under
  Subdivision (1).
         (c)  For a district to which Section 45.003(f) applies, any
  cents of maintenance and operations tax effort that exceeds the
  maximum rate permitted under Section 45.003(d) are not included in
  the district's tier one maintenance and operations tax rate under
  Subsection (a) or the district's enrichment tax rate under
  Subsection (b), and the district is not entitled to the guaranteed
  yield amount of state funds under Section 48.202 for those cents of
  tax effort.
         (d)  For a district to which Section 26.08(a-1), Tax Code,
  applies, the amount by which the district's maintenance tax rate
  exceeds the district's voter-approval tax rate, excluding the
  district's current debt rate under Section 26.08(n)(1)(C), Tax
  Code, for the preceding year is not considered in determining a
  district's tier one maintenance and operations tax rate under
  Subsection (a) or the district's enrichment tax rate under
  Subsection (b) for the current tax year.
         (e)  For the 2019 tax year, Section 48.202(f) applies to a
  district's maintenance and operations tax rate after adjusting the
  district's rate in accordance with this section.  This subsection
  expires September 1, 2020.
         SECTION 1.010.  Subtitle I, Title 2, Education Code, is
  amended by adding Chapter 47 to read as follows:
  CHAPTER 47. TAX REDUCTION AND EXCELLENCE IN EDUCATION FUND
         Sec. 47.001.  DEFINITION. In this chapter, "fund" means the
  tax reduction and excellence in education fund.
         Sec. 47.002.  FUND ESTABLISHED. (a)  The tax reduction and
  excellence in education fund is a special fund in the state treasury
  outside the general revenue fund.
         (b)  The fund consists of:
               (1)  money appropriated by the legislature for deposit
  to the credit of the fund;
               (2)  gifts to the state for the purposes of the fund;
  and
               (3)  money directed by law for deposit to the credit of
  the fund.
         Sec. 47.003.  USES OF FUND. Except as otherwise provided by
  this chapter, money in the fund may be appropriated only:
               (1)  to pay the cost of tier one allotments under
  Chapter 48; or
               (2)  for the purpose of reducing school district
  maintenance and operations ad valorem tax rates.
         Sec. 47.004.  DEPOSIT OF CERTAIN MONEY DEDICATED FOR SCHOOL
  DISTRICT AD VALOREM TAX RATE REDUCTION. (a)  The comptroller shall
  deposit to the credit of the fund money that Section 49-g, Article
  III, Texas Constitution, dedicates to the purpose of reducing
  school district maintenance and operations ad valorem tax rates.
         (b)  Money deposited to the fund under this section may be
  appropriated from the fund only for the purpose described by
  Section 47.003(2).
         Sec. 47.005.  CERTAIN MONEY DISTRIBUTED TO AVAILABLE SCHOOL
  FUND. (a)  Of the money distributed to the available school fund
  each year under Section 5(g), Article VII, Texas Constitution, the
  amount that exceeds the first $300 million is considered part of the
  tax reduction and excellence in education fund.
         (b)  Money considered part of the fund as described by
  Subsection (a) may be appropriated only to pay the cost of tier one
  allotments under Chapter 48.
         Sec. 47.006.  DEPOSIT OF MONEY BASED ON CERTAIN SALES AND USE
  TAX COLLECTIONS. (a)  The comptroller shall deposit to the credit
  of the fund on or before the fifth business day after the end of each
  month an amount of general revenue equal to the amount of state
  sales and use tax revenue collected by marketplace providers on
  sales of taxable items made through the marketplace under Section
  151.0242, Tax Code, and remitted to this state during the preceding
  month, less any amount of that revenue the comptroller estimates
  would have been collected and remitted if Section 151.0242 were not
  law.
         (b)  Money deposited to the fund under this section may be
  appropriated from the fund only for the purpose described by
  Section 47.003(2).
         SECTION 1.011.  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 1.012.  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 1.013.  Sections 42.001, 42.002, 42.003, 42.004, and
  42.005, 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, and 48.005, 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 and 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 half-day program or
  a full-day program under Section 29.153(c), 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.
         (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.]
         SECTION 1.014.  Effective September 1, 2020, Subchapter A,
  Chapter 48, Education Code, as added by this Act, is amended by
  adding Section 48.0051 to read as follows:
         Sec. 48.0051.  INCENTIVE FOR ADDITIONAL INSTRUCTIONAL DAYS.
  (a) Subject to Subsection (a-1), the commissioner shall adjust the
  average daily attendance of a school district or open-enrollment
  charter school under Section 48.005 in the manner provided by
  Subsection (b) if the district or school:
               (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.
         (a-1)  A school district entitled to an incentive under this
  section and funding for a campus under Section 48.252 may receive
  only the incentive or funding for the campus, as applicable, that
  would result in the greater amount of funding.
         (b)  For a school district or open-enrollment charter school
  described by Subsection (a), the commissioner shall increase the
  average daily attendance of the district or school under Section
  48.005 by the amount that results from the quotient of the sum of
  attendance by students described by Subsection (a)(2) for each of
  the 30 additional instructional days of half-day instruction that
  are provided divided by 180.
         (c)  The commissioner may provide the incentive under this
  section to a school district or open-enrollment charter school that
  intended, but due to circumstances beyond the district's or
  school's control, including the occurrence of a natural disaster
  affecting the district or school, 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 or
  school described by this subsection.
         (d)  This section does not prohibit a school district from
  providing the minimum number of minutes of operational and
  instructional time required under Section 25.081 and commissioner
  rules adopted under that section over fewer than 180 days of
  instruction.
         (e)  The agency shall assist school districts and
  open-enrollment charter schools in qualifying for the incentive
  under this section.
         (f)  A school district or open-enrollment charter school may
  use funding attributable to the incentive provided under this
  section to pay costs associated with providing academic instruction
  in a voluntary summer program for students enrolled in the district
  or school.
         (g)  The commissioner shall adopt rules necessary for the
  implementation of this section.
         SECTION 1.015.  Sections 42.0051 and 42.0052, Education
  Code, are transferred to Subchapter A, Chapter 48, Education Code,
  as added by this Act, redesignated as Sections 48.006 and 48.007,
  Education Code, and amended to read as follows:
         Sec. 48.006  [42.0051].  AVERAGE DAILY ATTENDANCE FOR
  DISTRICTS IN DISASTER AREA. (a) The [From funds specifically
  appropriated for the purpose or other funds available to the
  commissioner for that purpose, the] commissioner may [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 may [shall] make the adjustment under
  [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 1.016.  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 1.017.  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).
         [(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 (5) [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
               (5)  [. 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].
         (d)  Not later than January 1, 2020, the commissioner shall
  adopt rules requiring the Public Education Information Management
  System (PEIMS) to include pregnancy as a reason a student withdraws
  from or otherwise no longer attends public school.
         SECTION 1.018.  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 1.019.  Subchapter A, Chapter 48, Education Code, as
  added by this Act, is amended by adding Sections 48.011 and 48.012
  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.
         (a-1)  The commissioner may modify dates relating to the
  adoption of a school district's maintenance and operations tax rate
  and, if applicable, an election required for the district to adopt
  that rate as necessary to implement the changes made by H.B. 3, 86th
  Legislature, Regular Session, 2019.
         (b)  Before making an adjustment under Subsection (a) or
  (a-1), the commissioner shall notify and must receive approval from
  the Legislative Budget Board and the office of the governor.
         (c)  If the commissioner makes an adjustment under
  Subsection (a), the commissioner must provide to the legislature an
  explanation regarding the changes necessary to resolve the
  unintended consequences.
         (d)  Beginning with the 2021-2022 school year, the
  commissioner may not make an adjustment under Subsection (a) or
  (a-1).
         (e)  This section expires September 1, 2023.
         Sec. 48.012.  STUDY ON GEOGRAPHIC EDUCATION COST VARIATIONS
  AND TRANSPORTATION COSTS. (a)  The agency shall enter into a
  memorandum of understanding with a public institution of higher
  education to conduct a study on:
               (1)  geographic variations in known resource costs and
  costs of education due to factors beyond the control of school
  districts; and
               (2)  school district transportation costs.
         (b)  The study must include a review of cost drivers for
  school districts.
         (c)  Not later than December 1, 2020, the agency shall submit
  to the legislature a report on the results of the study.
         (d)  This section expires September 1, 2021.
         SECTION 1.020.  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 1.021.  Sections 42.101 and 42.105, Education Code,
  are transferred to Subchapter B, Chapter 48, Education Code, as
  added by this Act, redesignated as Sections 48.051 and 48.052,
  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 $6,160 [$4,765] or the amount that results
  from the following formula:
  A = $6,160 [$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)  During any school year for which the maximum amount of
  the basic allotment provided under Subsection (a) or (b) is greater
  than the maximum amount provided for the preceding school year, a
  school district must use at least 30 percent of the amount, if the
  amount is greater than zero, that equals the product of the average
  daily attendance of the district multiplied by the amount of the
  difference between the district's funding under this chapter per
  student in average daily attendance for the current school year and
  the preceding school year to provide compensation increases to
  full-time district employees other than administrators as follows:
               (1)  75 percent must be used to increase the
  compensation paid to classroom teachers, full-time librarians,
  full-time school counselors certified under Subchapter B, Chapter
  21, and full-time school nurses, prioritizing differentiated
  compensation for classroom teachers with more than five years of
  experience; and
               (2)  25 percent may be used as determined by the
  district to increase compensation paid to full-time district
  employees [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)].
         (d)  In this section, "compensation" includes benefits such
  as insurance premiums.
         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.
         SECTION 1.022.  Subchapter B, Chapter 48, Education Code, as
  added by this Act, is amended by adding Section 48.053 to read as
  follows:
         Sec. 48.053.  ALLOTMENT FOR CERTAIN SPECIAL-PURPOSE SCHOOL
  DISTRICTS.  (a)  This section applies only to a special-purpose
  school district established under Section 11.351 that is operated
  by a general academic teaching institution, as that term is defined
  by Section 61.003.
         (b)  For each student who resides in this state and is
  enrolled in the district, a school district to which this section
  applies is entitled to funding under this chapter as if the district
  had no tier one local share for purposes of Section 48.256.
         (c)  A school district to which this section applies may
  decline to receive funding under Subsection (b).
         (d)  A school district that receives funding under
  Subsection (b) for a school year may not charge tuition or fees to
  students enrolled in the district who are residents of this state
  for that school year, other than fees authorized under Section
  11.158.
         SECTION 1.023.  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 1.024.  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 in average daily attendance;
               (2)  "ADA" is the number of students in average daily
  attendance for which the district is entitled to an allotment under
  Section 48.051; and
               (3)  "BA" is the basic allotment determined under
  Section 48.051.
         (b)  A school district that has fewer 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 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), if the district is
  eligible for that formula; or
               (2)  AA = ((5,000 - ADA) X .000025) X BA.
         (d)  Instead of the allotment under Subsection (b) or (c)(1),
  a school district that has fewer than 300 students in average daily
  attendance and is the only school district located in and operating
  in a county is entitled to an annual allotment for each student in
  average daily attendance based on the following formula:
  AA = ((1,600 - ADA) X .00047) X BA
         SECTION 1.025.  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, or, if applicable, the sum
  of the basic allotment and the allotment under Section 48.101 to
  which the district is entitled, multiplied by 1.15 [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, or, if applicable, the sum of the
  basic allotment and the allotment under Section 48.101 to which the
  district is entitled, 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)  At least 55 percent of the funds [Funds] allocated under
  this section[, other than an indirect cost allotment established
  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, if applicable, the sum of the
  basic allotment and the allotment under Section 48.101 to which the
  district is entitled [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.
         SECTION 1.026.  Subchapter C, Chapter 48, Education Code, as
  added by this Act, is amended by adding Section 48.1021 to read as
  follows:
         Sec. 48.1021.  SPECIAL EDUCATION ALLOTMENT ADVISORY
  COMMITTEE. (a)  The commissioner shall establish an advisory
  committee to develop and make recommendations regarding methods of
  financing special education under the public school finance system.
         (b)  The advisory committee consists of the following
  members appointed by the commissioner:
               (1)  a parent of a student eligible to participate in a
  school district's special education program under Section 29.003;
               (2)  a director of a school district's special
  education program under Subchapter A, Chapter 29;
               (3)  a teacher certified in special education;
               (4)  a diagnostician;
               (5)  a licensed specialist in school psychology;
               (6)  a provider who provides related services, as
  described by Section 29.002(2);
               (7)  a superintendent of a school district;
               (8)  a member of a school district's board of trustees;
               (9)  a representative of a disability advocacy
  organization;
               (10)  a member of the special education continuing
  advisory committee under Section 29.006;
               (11)  a teacher certified in general education;
               (12)  a student eligible to participate in a school
  district's special education program under Section 29.003;
               (13)  a representative of a regional education service
  center; and
               (14)  a school district official who handles business
  and finance matters for the district.
         (c)  Not later than May 1, 2020, the advisory committee, with
  assistance from the Legislative Budget Board, shall submit to the
  lieutenant governor, the speaker of the house of representatives,
  and the standing legislative committees with primary jurisdiction
  over public education a report on methods of financing special
  education under the public school finance system. The report must
  include:
               (1)  a description of the current funding methods;
               (2)  an analysis of the possible implementation of a
  method of financing special education based on the services and
  supports each student receives instead of instructional
  arrangement;
               (3)  data on current special education expenditures
  from a representative sample of school districts; and
               (4)  recommendations for improvements to the current
  funding methods or for the implementation of new funding methods.
         (d)  This section expires September 1, 2021.
         SECTION 1.027.  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 basic allotment multiplied by 0.1 or a
  greater amount provided by appropriation.
         (b)  A school district is entitled to an allotment under
  Subsection (a) only for a student who:
               (1)  is receiving services for dyslexia or a related
  disorder in accordance with:
                     (A)  an individualized education program
  developed for the student under Section 29.005; or
                     (B)  a plan developed for the student under
  Section 504, Rehabilitation Act of 1973 (29 U.S.C. Section 794);
               (2)  is receiving instruction that:
                     (A)  meets applicable dyslexia program criteria
  established by the State Board of Education; and
                     (B)  is provided by a person with specific
  training in providing that instruction; or
               (3)  is permitted, on the basis of having dyslexia or a
  related disorder, to use modifications in the classroom or
  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.
         (d)  A school district may use an amount not to exceed 20
  percent of the allotment provided for a qualifying student under
  this section to contract with a private provider to provide
  supplemental academic services to the student that are recommended
  under the student's program or plan described by Subsection (b). A
  student may not be excused from school to receive supplemental
  academic services provided under this subsection.
         SECTION 1.028.  Section 42.152, Education Code, is
  transferred to Subchapter C, Chapter 48, Education Code, as added
  by this Act, redesignated as Section 48.104, 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 or, if the student is educationally
  disadvantaged, 0.275.  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 is educationally disadvantaged and
  resides in an economically disadvantaged census block group 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
  group under Subsection (d).
         (c)  For purposes of the allotment under Subsection (b), the
  commissioner shall establish an index for economically
  disadvantaged census block groups in the state that provides
  criteria for determining which census block groups are economically
  disadvantaged and categorizes economically disadvantaged census
  block groups in five tiers according to relative severity of
  economic disadvantage. In determining the severity of economic
  disadvantage in a census block group, 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
  group, a school district is entitled to an annual allotment equal to
  the basic allotment multiplied by 0.225 for each student who is
  educationally disadvantaged and resides in that census block group
  [For purposes of this 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; or
               [(2)  in the manner provided by commissioner rule].
         (f) [(b-1)]  A student receiving a full-time virtual
  education through the state virtual school network may be included
  in determining the number of [educationally disadvantaged]
  students who are educationally disadvantaged and reside in an
  economically disadvantaged census block group under Subsection (b)
  or (e), as applicable, 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.
         (g)  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.
         (h)  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.
         (i)  On a schedule determined by the commissioner, each
  school district shall report to the agency the census block group in
  which each student enrolled in the district who is educationally
  disadvantaged resides.  The agency shall provide to school
  districts a resource for use in determining the census block group
  in which a student resides.
         (j)  The commissioner shall adopt rules for the method of
  determining the number of students who qualify for an allotment
  under this section at a campus that participates in the Community
  Eligibility Provision administered by the United States Department
  of Agriculture, as provided by the Healthy, Hunger-Free Kids Act of
  2010 (Pub. L. No. 111-296).
         (j-1)  In addition to other purposes for which funds
  allocated under this section may be used, those funds may also be
  used to:
               (1)  provide child-care services or assistance with
  child-care expenses for students at risk of dropping out of school,
  as described by Section 29.081(d)(5); or
               (2)  pay the costs associated with services provided
  through a life skills program in accordance with Sections
  29.085(b)(1) and (3)-(7).
         (k)  At least 55 percent of the funds [(c) Funds] allocated
  under this section must [shall] be used to:
               (1)  fund supplemental programs and services designed
  to eliminate any disparity in performance on assessment instruments
  administered under Subchapter B, Chapter 39, or disparity in the
  rates of high school completion between:
                     (A)  students who are educationally disadvantaged
  and students who are not educationally disadvantaged; and
                     (B)  students at risk of dropping out of school,
  as defined by Section 29.081, and all other students; or
               (2)  [. Specifically, the funds, other than an indirect
  cost allotment established under State Board of Education rule,
  which may not exceed 45 percent, may be used to meet the costs of
  providing a compensatory, intensive, or accelerated instruction
  program under Section 29.081 or a disciplinary alternative
  education program established under Section 37.008, to pay the
  costs associated with placing students in a juvenile justice
  alternative education program established under Section 37.011, or
  to] support a program eligible under Title I of the Elementary and
  Secondary Education Act of 1965, as provided by Pub. L. No. 103-382
  and its subsequent amendments, and by federal regulations
  implementing that Act[, at a campus at which at least 40 percent of
  the students are educationally disadvantaged].
         (l)  The commissioner shall adopt rules regarding the use of
  funds described by Subsection (k). The rules:
               (1)  must:
                     (A)  permit a school district to use those funds
  for programs and services that reflect the needs of students at each
  campus in the district; and
                     (B)  provide for streamlined reporting on the use
  of those funds; and
               (2)  may not prohibit the use of those funds for any
  purpose for which the use of those funds was authorized under former
  Section 42.152 as that section existed on September 1, 2018.
         (m)  The State Board of Education shall adopt rules requiring
  a report on the use of funds under Subsection (k) as part of the
  annual audit under Section 44.008 and shall develop minimum
  requirements for that report.
         (n)  The commissioner annually shall review each report
  required under Subsection (m) for the preceding school year and:
               (1)  identify each school district that was not in
  compliance with Subsection (k) during that school year; and
               (2)  provide each district identified under
  Subdivision (1) a reasonable opportunity to comply with Subsection
  (k).
         (o)  [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
  determination under Subsection (n) that a school district was not
  in compliance with Subsection (k) for the 2021-2022 school year or a
  subsequent school year [local audit of compensatory education
  expenditures], shall withhold from the [a] district's foundation
  school fund payment an amount equal to the amount of compensatory
  education funds the commissioner [agency] determines were not used
  in compliance with Subsection (k) [(c)]. The commissioner shall
  release to a district funds withheld under this subsection when the
  district provides to the commissioner a detailed plan to spend
  those funds in compliance with Subsection (k) [(c)]. In determining
  whether a school district is subject to the withholding of funding
  required under this subsection, the commissioner may consider the
  district's average use of funds for the three preceding school
  years.
         [(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.]
         SECTION 1.029.  Subchapter C, Chapter 48, Education Code, as
  added by this Act, is amended by adding Section 48.1041 to read as
  follows:
         Sec. 48.1041.  COMPENSATORY EDUCATION ALLOTMENT ADVISORY
  COMMITTEE. (a)  The commissioner shall establish an advisory
  committee to advise the agency in adopting rules for the
  compensatory education allotment under Section 48.104, including:
               (1)  rules establishing the economic criteria
  described by Section 48.104(c)(5);
               (2)  rules detailing the method to count students who
  qualify for the allotment in:
                     (A)  a dropout recovery school or program; or
                     (B)  a residential treatment facility;
               (3)  methods for properly counting students who are
  homeless within the meaning of "homeless children and youths" under
  42 U.S.C. Section 11434a; and
               (4)  rules to determine the appropriate weight by which
  to adjust the basic allotment in determining the compensatory
  allotment for students described by Subdivision (3).
         (b)  The advisory committee consists of members appointed by
  the commissioner, including:
               (1)  school district superintendents and chief
  financial officers;
               (2)  classroom teachers;
               (3)  representatives of school districts located in an
  area other than an urban area, as designated by the United States
  Census Bureau;
               (4)  at least one representative of an open-enrollment
  charter school;
               (5)  demographers;
               (6)  experts on census data;
               (7)  public school finance experts; and
               (8)  appropriate employees of the agency.
         (c)  Members of the advisory committee serve at the pleasure
  of the commissioner.
         (d)  A member of the advisory committee is not entitled to
  receive compensation for service on the committee or reimbursement
  for expenses incurred in performing official duties as a member of
  the committee.
         (e)  Chapter 2110, Government Code, does not apply to the
  advisory committee.
         (f)  Not less than once every two years, the advisory
  committee shall review census and student data and provide
  recommendations to the agency regarding any suggested changes to
  the rules adopted for the compensatory education allotment under
  Section 48.104.
         SECTION 1.030.  Sections 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
  48.105, 48.106, and 48.107, Education Code, and amended to read as
  follows:
         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 if the student is in a bilingual education program using a dual
  language immersion/two-way program model.
         (b)  At least 55 percent of the funds [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,
  incremental costs associated with providing smaller class sizes,
  and other supplies required for quality instruction [and smaller
  class size].
         (c)  The State Board of Education shall adopt rules requiring
  a report on the use of funds under Subsection (b) as part of the
  annual audit under Section 44.008 and shall develop minimum
  requirements for that report.
         (d)  The commissioner annually shall review each report
  required under Subsection (c) for the preceding school year and:
               (1)  identify each school district that was not in
  compliance with Subsection (b) during that school year; and
               (2)  provide each district identified under
  Subdivision (1) a reasonable opportunity to comply with Subsection
  (b).
         (e)  The commissioner, in the year following a determination
  under Subsection (d) that a school district was not in compliance
  with Subsection (b) for the 2021-2022 school year or a subsequent
  school year, shall withhold from the district's foundation school
  fund payment an amount equal to the amount of bilingual education or
  special language funds the commissioner determines were not used in
  compliance with Subsection (b). 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 (b). In determining whether a school
  district is subject to the withholding of funding required under
  this subsection, the commissioner may consider the district's
  average use of funds for the three preceding school years.
         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 7 [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 for each of the following in which [, if] the
  student is enrolled:
                     (A)  [in] two or more advanced career and
  technology education classes for a total of three or more credits;
                     (B)  a campus designated as a P-TECH school under
  Section 29.556; or
                     (C)  a campus that is a member of the New Tech
  Network and that focuses on project-based learning and work-based
  education.
         (b)  In this section:
               (1)  "Career and technology education class" and
  "career and technology education program" include [a] technology
  applications courses [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)  At least 55 percent of the funds [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 7 [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 1.031.  Subchapter C, Chapter 48, Education Code, as
  added by this Act, is amended by adding Sections 48.108, 48.110,
  48.1101, 48.111, 48.112, and 48.114 to read as follows:
         Sec. 48.108.  EARLY EDUCATION 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 basic allotment multiplied by 0.1 if the student is:
               (1)  educationally disadvantaged; or
               (2)  a student of limited English proficiency, as
  defined by Section 29.052, and is in a bilingual education or
  special language program under Subchapter B, Chapter 29.
         (b)  Funds allocated under this section must be used to fund
  programs and services designed to improve student performance in
  reading and mathematics in prekindergarten through third grade,
  including programs and services designed to assist the district in
  achieving the goals set in the district's early childhood literacy
  and mathematics proficiency plans adopted under Section 11.185.
         (c)  A school district is entitled to an allotment under each
  subdivision of Subsection (a) for which a student qualifies.
         (d)  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.
         Sec. 48.110.  COLLEGE, CAREER, OR MILITARY READINESS
  OUTCOMES BONUS.  (a)  The purpose of this section is to further the
  goal set under the state's master plan for higher education
  developed under Section 61.051 for at least 60 percent of all adults
  aged 25 to 34 in this state to achieve a postsecondary degree or
  workforce credential by 2030.
         (b)  For purposes of the outcomes bonus under this section,
  the commissioner shall determine the threshold percentage as
  provided by Subsection (g) for college, career, or military
  readiness as described by Subsection (f) for each of the following
  cohorts:
               (1)  annual graduates who are educationally
  disadvantaged;
               (2)  annual graduates who are not educationally
  disadvantaged; and
               (3)  annual graduates who are enrolled in a special
  education program under Subchapter A, Chapter 29, regardless of
  whether the annual graduates are educationally disadvantaged.
         (c)  Each year, the commissioner shall determine for each
  school district the minimum number of annual graduates in each
  cohort described by Subsection (b) who would have to demonstrate
  college, career, or military readiness as described by Subsection
  (f) in order for the district to achieve a percentage of college,
  career, or military readiness for that cohort equal to the
  threshold percentage established for that cohort under Subsection
  (b).
         (d)  For each annual graduate in a cohort described by
  Subsection (b) who demonstrates college, career, or military
  readiness as described by Subsection (f) in excess of the minimum
  number of students determined for the applicable district cohort
  under Subsection (c), a school district is entitled to an annual
  outcomes bonus of:
               (1)  if the annual graduate is educationally
  disadvantaged, $5,000;
               (2)  if the annual graduate is not educationally
  disadvantaged, $3,000; and
               (3)  if the annual graduate is enrolled in a special
  education program under Subchapter A, Chapter 29, $2,000,
  regardless of whether the annual graduate is educationally
  disadvantaged.
         (e)  A school district is entitled to an outcomes bonus under
  each subdivision of Subsection (d) for which an annual graduate
  qualifies.
         (f)  For purposes of this section, an annual graduate
  demonstrates:
               (1)  college readiness if the annual graduate:
                     (A)  achieves college readiness standards used
  for accountability purposes under Chapter 39 on the ACT, the SAT, or
  an assessment instrument designated by the Texas Higher Education
  Coordinating Board under Section 51.334; and
                     (B)  during a time period established by
  commissioner rule, enrolls at a postsecondary educational
  institution;
               (2)  career readiness if the annual graduate:
                     (A)  achieves college readiness standards used
  for accountability purposes under Chapter 39 on the ACT, the SAT, or
  an assessment instrument designated by the Texas Higher Education
  Coordinating Board under Section 51.334; and
                     (B)  during a time period established by
  commissioner rule, earns an industry-accepted certificate; and
               (3)  military readiness if the annual graduate:
                     (A)  achieves a passing score set by the
  applicable military branch on the Armed Services Vocational
  Aptitude Battery; and
                     (B)  during a time period established by
  commissioner rule, enlists in the armed forces of the United
  States.
         (g)  The commissioner shall establish the threshold
  percentages under Subsection (b) using the 25th percentile of
  statewide college, career, or military readiness as described by
  Subsection (f) for the applicable cohort of annual graduates during
  the 2016-2017 school year.
         (h)  On application by a school district, the commissioner
  may allow annual graduates from the district to satisfy the
  requirement for demonstrating career readiness under Subsection
  (f)(2)(B) by successfully completing a coherent sequence of courses
  required to obtain an industry-accepted certificate.  The district
  must demonstrate in the application that the district is unable to
  provide sufficient courses or programs to enable students enrolled
  at the district to earn an industry-accepted certificate within the
  time period established by the commissioner under Subsection
  (f)(2)(B).  The commissioner by rule shall provide the criteria
  required for an application under this subsection.
         (i)  At least 55 percent of the funds allocated under this
  section must be used in grades 8 through 12 to improve college,
  career, and military readiness outcomes as described by Subsection
  (f).
         Sec. 48.1101.  STUDY ON ALTERNATIVE CAREER READINESS
  MEASURES FOR SMALL AND RURAL DISTRICTS.  (a)  The agency shall
  conduct a study on alternative career readiness measures for small
  and rural school districts to determine if annual graduates
  demonstrate career readiness under Section 48.110(f)(2)(B).
         (b)  Not later than January 1, 2021, the agency shall submit
  to the legislature a report on the results of the study and any
  recommendations for legislative or other action.
         (c)  This section expires September 1, 2021.
         Sec. 48.111.  FAST GROWTH ALLOTMENT. A school district in
  which the growth in student enrollment in the district over the
  preceding three school years is in the top quartile of student
  enrollment growth in school districts in the state for that period,
  as determined by the commissioner, is entitled to an annual
  allotment equal to the basic allotment multiplied by 0.04 for each
  student in average daily attendance.
         Sec. 48.112.  TEACHER INCENTIVE ALLOTMENT. (a) In this
  section, "rural campus" means a school campus that is:
               (1)  located in: 
                     (A)  an area that is not designated as an
  urbanized area or an urban cluster by the United States Census
  Bureau; and 
                     (B)  a school district with fewer than 5,000
  enrolled students; or
               (2)  designated as a rural campus under rules adopted
  by the commissioner.
         (b)  To ensure classroom teachers in this state have access
  to a six-figure salary, the allotment provided to a school district
  under this section offers resources to the district to increase
  teacher compensation and prioritize funding for high needs and
  rural district campuses.
         (c)  For each classroom teacher with a teacher designation
  under Section 21.3521 employed by a school district, the school
  district is entitled to an allotment equal to the following
  applicable base amount increased by the high needs and rural factor
  as determined under Subsection (d):
               (1)  $12,000, or an increased amount not to exceed
  $32,000 as determined under Subsection (d), for each master
  teacher;
               (2)  $6,000, or an increased amount not to exceed
  $18,000 as determined under Subsection (d), for each exemplary
  teacher; and
               (3)  $3,000, or an increased amount not to exceed
  $9,000 as determined under Subsection (d), for each recognized
  teacher.
         (d)  The high needs and rural factor is determined by
  multiplying the following applicable amounts by the average of the
  point value assigned to each student at a district campus under
  Subsection (e):
               (1)  $5,000 for each master teacher;
               (2)  $3,000 for each exemplary teacher; and
               (3)  $1,500 for each recognized teacher.
         (e)  Except as provided by Subsection (f), a point value for
  each student at a district campus shall be assigned as follows:
               (1)  0, for a student for whom the district does not
  receive a compensatory education allotment under Section 48.104(b)
  or (e); or
               (2)  0.5, 1.0, 2.0, 3.0, or 4.0, respectively, from
  least to most severe economic disadvantage according to the census
  block group in which the student resides, for a student for whom the
  district receives a compensatory education allotment under Section
  48.104(b) or (e).
         (f)  If the campus at which a student is enrolled is
  classified as a rural campus, a student is assigned the point value
  two tiers higher than the student's point value determined under
  Subsection (e)(1) or (2).
         (g)  A district is entitled to receive an increased allotment
  under this section in the amount necessary for reimbursement for
  any fees paid under Section 21.3521.
         (h)  The commissioner shall annually make available to the
  public a list of campuses with the projected allotment amounts per
  teacher designation at each campus.
         (i)  A district shall annually certify that:
               (1)  funds received under this section were used as
  follows:
                     (A)  at least 90 percent of each allotment
  received under Subsection (c) was used for the compensation of
  teachers employed at the campus at which the teacher for whom the
  district received the allotment is employed; and
                     (B)  any other funds received under this section
  were used for costs associated with implementing Section 21.3521,
  including efforts to support teachers in obtaining designations;
  and
               (2)  the district prioritized high needs campuses in
  the district in using funds received under this section.
         Sec. 48.114.  MENTOR PROGRAM ALLOTMENT. (a)  A school
  district that has implemented a mentoring program for classroom
  teachers who have less than two years of teaching experience under
  Section 21.458 is entitled to an allotment as determined under
  Subsection (b) to fund the mentoring program and to provide
  stipends for mentor teachers.
         (b)  The commissioner shall adopt a formula to determine the
  amount to which each district described by Subsection (a) is
  entitled.
         (c)  Funding provided to districts under this section may be
  used only for providing:
               (1)  mentor teacher stipends;
               (2)  scheduled release time for mentor teachers and the
  classroom teachers to whom they are assigned for meeting and
  engaging in mentoring activities; and
               (3)  mentoring support through providers of mentor
  training.
         SECTION 1.032.  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 1.033.  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:
                     (A)  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; or
                     (B)  is a homeless child or youth, as defined by 42
  U.S.C. Section 11434a.
               (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, or from a district
  campus to a location at which students are provided work-based
  learning under the district's career and technology program 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 of this code 
  [, 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 1.034.  Subchapter D, Chapter 48, Education Code, as
  added by this Act, is amended by adding Section 48.153 to read as
  follows:
         Sec. 48.153.  DROPOUT RECOVERY SCHOOL AND RESIDENTIAL
  PLACEMENT FACILITY ALLOTMENT.  A school district or open-enrollment
  charter school is entitled to $275 for each student in average daily
  attendance who:
               (1)  resides in a residential placement facility; or
               (2)  is at a district or school or a campus of the
  district or school that is designated as a dropout recovery school
  under Section 39.0548.
         SECTION 1.035.  Section 42.106, Education Code, is
  transferred to Subchapter D, Chapter 48, Education Code, as added
  by this Act, redesignated as Section 48.154, and amended to read as
  follows:
         Sec. 48.154 [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 1.036.  Subchapter D, Chapter 48, Education Code, as
  added by this Act, is amended by adding Sections 48.155 and 48.156
  to read as follows:
         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 student's certification
  examination under Section 29.190(a) as provided by Section
  29.190(c).
         SECTION 1.037.  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 1.038.  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 or by the quotient of the value of "DPV" as
  determined under Section 48.256(d) if that subsection applies to
  the district [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 or by the quotient of the value of
  "DPV" as determined under Section 48.256(d) if that subsection
  applies to the district [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 greater of the amount of district tax revenue
  per weighted student per cent of tax effort [that would be]
  available to a school district at the 96th percentile of wealth per
  weighted student [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 that results from multiplying 6,160, or the
  greater amount provided under Section 48.051(b), if applicable, by
  0.016 [of district tax revenue per weighted student per cent of tax
  effort 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 amount that results
  from multiplying $6,160, or the greater amount provided under
  Section 48.051(b), if applicable, by 0.008 [$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 the dollar amount guaranteed
  level of state and local funds per weighted student per cent of tax
  effort ("GL") under Subsection (a-1)(2) exceeds the dollar amount
  guaranteed level of state and local funds per weighted student per
  cent of tax effort ("GL") under Subsection (a-1)(2) for the
  preceding school year, a school district shall reduce the
  district's tax rate under Section 45.0032(b)(2) for the tax year
  that corresponds to that school year to a rate that results in the
  amount of state and local funds per weighted student per cent of tax
  effort available to the district at the dollar amount guaranteed
  level for the preceding school year. A school district is not
  entitled to the amount equal to the increase of revenue described by
  this subsection for the school year for which the district must
  reduce the district's tax rate. Unless Section 26.08(a-1), Tax
  Code, applies to the district, for a tax year in which a district
  must reduce the district's tax rate under this subsection, the
  district may not increase the district's maintenance and operations
  tax rate to a rate that exceeds the maximum maintenance and
  operations tax rate permitted under Section 45.003(d) or (f), as
  applicable, minus the reduction of tax effort required under this
  subsection. This subsection does not apply if the amount of state
  funds appropriated 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].
         (f-1)  Notwithstanding Subsection (f), for the 2019-2020
  school year, the reduction of a school district's tax rate required
  under Subsection (f) applies to the district's total enrichment tax
  rate under Section 45.0032(b) minus eight cents. This subsection
  expires September 1, 2020.
         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 1.039.  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 1.040.  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.
         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)  93 percent; or
               (2)  a lower percentage set [not established] by
  appropriation for a school year [, the commissioner 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(a)
  [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 current [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)  This subsection applies to a school district in which
  the board of trustees entered into a written agreement with a
  property owner under Section 313.027, Tax Code, for the
  implementation of a limitation on appraised value under Subchapter
  B or C, Chapter 313, Tax Code. For purposes of determining "DPV"
  under Subsection (a) for a school district to which this subsection
  applies, the commissioner shall exclude a portion of the market
  value of property not otherwise fully taxable by the district under
  Subchapter B or C, Chapter 313, Tax Code, before the expiration of
  the subchapter. The comptroller shall provide information to the
  agency necessary for this subsection. A revenue protection payment
  required as part of an agreement for a limitation on appraised value
  shall be based on the district's taxable value of property for the
  preceding tax year.
         (e)  Subsection (d) does not apply to property that was the
  subject of an application under Subchapter B or C, Chapter 313, Tax
  Code, made after May 1, 2009, that the comptroller recommended
  should be disapproved. [A school district must raise its total
  local share of the Foundation School Program to be eligible to
  receive foundation school fund payments.]
         SECTION 1.041.  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
  local share under Section 48.256 exceeds the district's entitlement
  under Section 48.266(a)(1) less the district's distribution from
  the state available school fund, 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) less the district's distribution from the state
  available school fund.
         (b)  This subsection applies only to a school district to
  which Subsection (a) applies. If a district's maintenance and
  operations tax collections from the tax rate described by Section
  45.0032(a) for the current tax year minus the required reduction in
  a district's tier one revenue level under Subsection (a) results in
  an amount that is less than the amount of the district's entitlement
  under Section 48.266(a)(1) less the district's distribution from
  the state available school fund, the agency shall adjust the amount
  of the reduction required in the district's tier one revenue level
  under Subsection (a) up to the amount of local funds necessary for
  the district's entitlement under Section 48.266(a)(1) less the
  district's distribution from the state available school fund.
         (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), (2), or (3) 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)  If 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 exceeds the amount described by Section 48.202(a-1)(2),
  the district must reduce the district's revenue in accordance with
  Chapter 49 to a level not to exceed the amount described by Section
  48.202 (a-1)(2).
         (g)  For a district to which Section 45.003(f) applies,
  revenue generated from any cents of maintenance and operations tax
  effort that exceeds the maximum rate permitted under Section
  45.003(d) is subject to the revenue limit established under
  Subsection (f).
         SECTION 1.042.  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, and
  42.260, 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, and 48.275, 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 voter-approval [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:
               (1)  defining "disaster remediation costs" for
  purposes of this section, which must include the cost to repair or
  replace vehicles or computers damaged in the disaster; and
               (2)  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.
         (c)  In addition to the funding provided under Subsection
  (b), a school district is entitled to reimbursement for the amount
  of interest included in a refund made by the district under Section
  42.43, Tax Code, in the state fiscal year ending August 31, 2018, or
  August 31, 2019.  This subsection expires September 1, 2021.
         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.
         (e)  Subject to Subsection (f), the agency may review a
  school district as necessary to determine if the district qualifies
  for each allotment received by the district under this chapter.  If
  the agency determines that a school district received an allotment
  to which the district was not entitled, the agency may establish a
  corrective action plan or withhold the applicable amount of funding
  from the district.
         (f)  The agency may not review school district expenditures
  that occurred seven or more years before the review.
         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.]
         SECTION 1.043.  Subchapter F, Chapter 48, Education Code, as
  added by this Act, is amended by adding Sections 48.277, 48.278, and
  48.279 to read as follows:
         Sec. 48.277.  FORMULA TRANSITION GRANT. (a)  A school
  district or open-enrollment charter school is entitled to receive
  an annual allotment for each student in average daily attendance in
  the amount equal to the difference, if the difference is greater
  than zero, that results from subtracting the total maintenance and
  operations revenue per student in average daily attendance for the
  current school year from the lesser of:
               (1)  103 percent of the district's or school's total
  maintenance and operations revenue per student in average daily
  attendance for the 2019-2020 school year that the district or
  school would have received under former Chapters 41 and 42, as those
  chapters existed on January 1, 2019; or
               (2)  128 percent of the statewide average amount of
  maintenance and operations revenue per student in average daily
  attendance that would have been provided for the 2019-2020 school
  year under former Chapters 41 and 42, as those chapters existed on
  January 1, 2019.
         (b)  For purposes of calculating maintenance and operations
  revenue under Subsection (a), the commissioner shall:
               (1)  for purposes of Subsections (a)(1) and (2), use
  the following applicable school year:
                     (A)  in a school year ending in an even-numbered
  year, the 2019-2020 school year; and
                     (B)  in a school year ending in an odd-numbered
  year, the 2019-2020 or 2020-2021 school year, whichever is greater;
               (2)  include all state and local funding, except for
  any funding resulting from:
                     (A)  reimbursement for disaster remediation costs
  under former Sections 41.0931 and 42.2524;
                     (B)  an adjustment for rapid decline in taxable
  value of property under former Section 42.2521; and
                     (C)  an adjustment for property value affected by
  a state of disaster under former Section 42.2523;
               (3)  adjust the calculation to reflect a reduction in
  tax effort by a school district; and
               (4)  if a school district or open-enrollment charter
  school 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 or school's
  entitlement to compensatory education funds was based for the
  school year before the school year in which the district or school
  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 or open-enrollment charter school is
  not entitled to an allotment under Subsection (a) beginning with
  the 2024-2025 school year.
         (d-1)  Subject to Subsection (d-2), a school district or
  open-enrollment charter school is entitled to receive an annual
  allotment for each student in average daily attendance in the
  amount equal to the difference, if the difference is greater than
  zero, that results from subtracting the total maintenance and
  operations revenue per student in average daily attendance for the
  current school year from the total maintenance and operations
  revenue per student in average daily attendance that would have
  been available to the district or school under former Chapters 41
  and 42, as those chapters existed on January 1, 2019.  For purposes
  of calculating a district's maintenance and operations revenue
  under this subsection, the commissioner shall:
               (1)  apply Subsection (b); and
               (2)  in calculating a district's maintenance and
  operations revenue under former Chapters 41 and 42, as those
  chapters existed on January 1, 2019, exclude any additional revenue
  the district would have received under former Sections 41.002(e)
  through (g), as those sections existed on January 1, 2019.
         (d-2)  A school district or open-enrollment charter school
  may only receive an allotment under Subsection (a) or (d-1),
  whichever is greater, but not both.
         (d-3)  Subsections (d-1) and (d-2) and this subsection
  expire September 1, 2021.
         (e)  This section expires September 1, 2025.
         Sec. 48.278.  EQUALIZED WEALTH TRANSITION GRANT. (a)  
  Subject to Subsection (b), a school district is entitled to receive
  an annual allotment in an amount equal to the amount of additional
  revenue a school district received for the 2018-2019 school year
  under former Sections 41.002(e) through (g), as those sections
  existed on January 1, 2019.
         (b)  For purposes of calculating a district's allotment
  under Subsection (a), the commissioner shall reduce the amount to
  which a district is entitled under Subsection (a) by:
               (1)  for the 2020-2021 school year, 20 percent;
               (2)  for the 2021-2022 school year, 40 percent;
               (3)  for the 2022-2023 school year, 60 percent; and
               (4)  for the 2023-2024 school year, 80 percent.
         (c)  This section expires September 1, 2024.
         Sec. 48.279.  MAINTENANCE OF STATE FINANCIAL SUPPORT FOR
  SPECIAL EDUCATION. (a) Funds appropriated for purposes of this
  section or transferred in accordance with this section are state
  funds for purposes of compliance with the requirements regarding
  maintenance of state financial support for special education under
  20 U.S.C. Section 1412(a)(18). The commissioner shall identify the
  amount of funding described by this subsection and separate that
  amount from other funding provided under this chapter.
         (b)  If the commissioner determines that the total amount of
  funding for special education for a school year that ends during the
  first state fiscal year of a state fiscal biennium is less than the
  amount required to comply with requirements regarding maintenance
  of state financial support under 20 U.S.C. Section 1412(a)(18), the
  commissioner shall use funds appropriated for the Foundation School
  Program for the second state fiscal year of that biennium to
  increase funding for special education for the first state fiscal
  year of that biennium in an amount necessary to ensure compliance
  with that provision.
         (c)  If the commissioner determines that the total amount of
  funding for special education for a school year that ends during the
  second state fiscal year of a state fiscal biennium is less than the
  amount required to comply with requirements regarding maintenance
  of state financial support under 20 U.S.C. Section 1412(a)(18), the
  commissioner shall submit to the legislature an estimate of the
  amount of funding needed to comply with that provision for that
  state fiscal year.
         (d)  If federal funds are withheld for a school year due to
  noncompliance with requirements regarding maintenance of state
  financial support under 20 U.S.C. Section 1412(a)(18), the
  commissioner shall use for that school year an amount of funds
  described by Subsection (a) equal to the amount of withheld funds in
  the same manner and for the same purposes as the withheld funds
  would have been provided.
         (e)  After the commissioner has replaced any withheld
  federal funds as provided by Subsection (d), the commissioner shall
  distribute the remaining amount, if any, of funds described by
  Subsection (a) to proportionately increase funding for the special
  education allotment under Section 48.102.
         (f)  In complying with Subsection (d), the commissioner may
  implement any program necessary to ensure the use of funds in
  accordance with that subsection.
         SECTION 1.044.  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. MISCELLANEOUS PROVISIONS
         SECTION 1.045.  Section 42.4101, Education Code, is
  transferred to Subchapter G, Chapter 48, Education Code, as added
  by this Act, redesignated as Section 48.301, Education Code, and
  amended to read as follows:
         Sec. 48.301  [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 1.046.  Subchapter G, Chapter 48, Education Code, as
  added by this Act, is amended by adding Section 48.302 to read as
  follows:
         Sec. 48.302.  SUBSIDY FOR HIGH SCHOOL EQUIVALENCY
  EXAMINATION FOR CERTAIN INDIVIDUALS. (a) In this section,
  "commission" means the Texas Workforce Commission.
         (b)  The agency shall enter into a memorandum of
  understanding with the commission for the agency to transfer to the
  commission funds specifically appropriated to the agency for the
  commission to provide to an individual who is 21 years of age or
  older a subsidy in an amount equal to the cost of taking one high
  school equivalency examination administered under Section 7.111.
         (c)  The commission shall adopt rules to implement the
  subsidy program described by Subsection (b), including rules
  regarding eligibility requirements.
         SECTION 1.047.  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 1.048.  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 1.049.  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 estimates [estimate] of enrollment and taxable property value 
  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.  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.
         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 1.050.  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 1.051.  Subchapter C, Chapter 41, Education Code, is
  transferred to Chapter 49, Education Code, as added by this Act,
  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
  dollar amount guaranteed level of [greatest level for which] funds
  [are] provided under Section 48.202(a-1)(2) [Subchapter F, Chapter
  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 1.052.  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 1.053.  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.
         [(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:
               (1)  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; or
               (2)  in one payment for the total amount required to be
  paid by the district not later than August 15 of the school year for
  which the agreement is in effect.
         (a-1)  If a school district elects to pay for credit
  purchased in the manner provided by Subsection (a)(2), the district
  must notify the commissioner not later than February 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.
         [(b)     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 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 1.054.  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 1.055.  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 1.056.  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 wealth per student that
  exceeds the equalized wealth level 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 wealth per student. The
  amount applied under this subsection may not exceed the amount
  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 1.057.  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 1.058.  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 1.059.  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