Bill Text: TX HB3737 | 2017-2018 | 85th Legislature | Introduced


Bill Title: Relating to the public school finance system.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2017-04-03 - Referred to Public Education [HB3737 Detail]

Download: Texas-2017-HB3737-Introduced.html
  85R10167 KJE-F
 
  By: Hinojosa H.B. No. 3737
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the public school finance system.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
  ARTICLE 1. PUBLIC SCHOOL FINANCE
         SECTION 1.01.  Section 41.001(3), Education Code, is amended
  to read as follows:
               (3)  "Weighted average daily attendance" has the
  meaning assigned by Section 42.0053 [42.302].
         SECTION 1.02.  Section 41.002(a), Education Code, is amended
  to read as follows:
         (a)  A school district may not have a wealth per student that
  exceeds the product of the guaranteed level, as defined by Section
  42.107, multiplied by 10,000[:
               [(1)     the wealth per student that generates the amount
  of maintenance and operations tax revenue per weighted student
  available to a district with maintenance and operations tax revenue
  per cent of tax effort equal to the maximum amount provided per cent
  under Section 42.101(a) or (b), for the district's maintenance and
  operations tax effort equal to or less than the 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);
               [(2)     the wealth per student that generates the amount
  of maintenance and operations tax revenue per weighted student
  available to the Austin Independent School District, as determined
  by the commissioner in cooperation with the Legislative Budget
  Board, for the first six cents by which the district's maintenance
  and operations tax rate exceeds the 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), subject to Section
  41.093(b-1); or
               [(3)     $319,500, for the district's maintenance and
  operations tax effort that exceeds the amount of tax effort
  described by Subdivision (2)].
         SECTION 1.03.  Section 41.006(a), Education Code, is amended
  to read as follows:
         (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 42[, including providing for the commissioner to make an
  adjustment in the funding element established by Section 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].
         SECTION 1.04.  Section 41.061, Education Code, is amended to
  read as follows:
         Sec. 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 wealth per student of the district from
  which territory is detached and the wealth per student of the
  district to which territory is annexed are [is] equal to or less
  than the equalized wealth level[; and
               [(2)     the wealth per student of the district to which
  territory is annexed is not greater than the greatest level for
  which funds are provided under Subchapter F, Chapter 42].
         (b)  The agreement is not effective unless the commissioner
  certifies that, after all actions taken under this chapter, the
  wealth per student of each district involved will be equal to or
  less than the equalized wealth level [applicable level permitted by
  Subsection (a)].
         SECTION 1.05.  Section 41.093(a), Education Code, is amended
  to read as follows:
         (a)  The [Subject to Subsection (b-1), the] cost of each
  credit is an amount equal to the greater of:
               (1)  the amount of the district's maintenance and
  operations tax revenue 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.
         SECTION 1.06.  Section 41.099(a), Education Code, is amended
  to read as follows:
         (a)  Sections [41.002(e),] 41.094, 41.097, and 41.098 apply
  only to a district that:
               (1)  executes an agreement to purchase all attendance
  credits necessary to reduce the district's wealth per student to
  the equalized wealth level;
               (2)  executes an agreement to purchase attendance
  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 wealth per student required for the
  district to achieve a wealth per student that is equal to or less
  than the equalized wealth level; and
                     (B)  under which all revenue paid by the district
  to other districts, in excess of the reduction in state aid that
  results from counting the weighted average daily attendance of the
  students served in the contracting district, is required to be used
  for funding a consortium of at least three districts in a county
  with a population of less than 40,000 that is formed to support a
  technology initiative.
         SECTION 1.07.  Sections 41.206(a), (f), (g), and (i),
  Education Code, are amended to read as follows:
         (a)  The commissioner shall annex property detached under
  Section 41.205 to school districts eligible for annexation in
  accordance with this section. A school district is eligible for
  annexation of property to it under this subchapter only if, before
  any detachments or annexations are made in a year, the district's
  wealth per student is less than the equalized wealth level 
  [greatest level for which funds are provided under Subchapter F,
  Chapter 42].
         (f)  If only one school district is eligible to annex
  property detached from a school district within a priority group
  established by Subsections (d) and (e), the commissioner shall
  annex property to that district until it reaches a wealth per
  student equal as nearly as possible to the equalized wealth level 
  [greatest level for which funds are provided under Subchapter F,
  Chapter 42,] by annexing whole parcels or items of property. Any
  remaining detached property shall be annexed to eligible school
  districts in the next priority group as provided by this section.
         (g)  If more than one school district is eligible to annex
  property detached from a school district within a priority group
  established by Subsections (d) and (e), the commissioner shall
  first annex property to the district within the priority group to
  which could be annexed the most taxable value of property without
  increasing its wealth per student above the equalized wealth level 
  [greatest level for which funds are provided under Subchapter F,
  Chapter 42,] until that district reaches a wealth per student equal
  as nearly as possible to the equalized wealth level [greatest level
  for which funds are provided under Subchapter F, Chapter 42,] by
  annexing whole parcels or items of property. Then any additional
  detached property shall be annexed in the same manner to other
  eligible school districts in the same priority group in descending
  order of capacity to receive taxable value of annexed property
  without increasing the district's wealth per student above the
  equalized wealth level [greatest level for which funds are provided
  under Subchapter F, Chapter 42]. If every school district in a
  priority group reaches a wealth per student equal to the equalized
  wealth level [greatest level for which funds are provided under
  Subchapter F, Chapter 42,] as nearly as possible, the remaining
  detached property shall be annexed to school districts in the next
  priority group in the manner provided by this section.
         (i)  The commissioner may order the annexation of a portion
  of a parcel or item of property, including a portion of property
  treated as a whole parcel or item under Subsection (h), if:
               (1)  the annexation of the whole parcel or item would
  result in the district eligible to receive it in the appropriate
  priority order provided by this section having a wealth per student
  greater than $10,000 more than the equalized wealth level [greatest
  level for which funds are provided under Subchapter F, Chapter 42];
  or
               (2)  the commissioner determines that annexation of
  portions of the parcel or item would reduce disparities in district
  wealth per student more efficiently than would be possible if the
  parcel or item were annexed as a whole.
         SECTION 1.08.  Section 41.257, Education Code, is amended to
  read as follows:
         Sec. 41.257.  APPLICATION OF SMALL AND SPARSE ADJUSTMENTS
  AND TRANSPORTATION ALLOTMENT. The budget of the consolidated
  district must apply the benefit of the adjustment or allotment to
  the schools of the consolidating district to which Section 42.103,
  42.105, or 42.202 [42.155] would have applied in the event that the
  consolidated district still qualifies as a small or sparse
  district.
         SECTION 1.09.  Section 42.002, Education Code, is amended to
  read as follows:
         Sec. 42.002.  PURPOSES OF FOUNDATION SCHOOL PROGRAM. [(a)]
  The purposes of the Foundation School Program set forth in this
  chapter and Chapter 46 are to guarantee that each school district in
  the state has:
               (1)  substantially equal access to substantially
  equalized financing and adequate resources to provide each eligible
  student an [a basic] instructional program that is rated acceptable
  or higher under Section 39.054, that meets other applicable legal
  standards, and that is [and facilities] suitable to the student's
  educational needs; and
               (2)  adequate resources to provide each eligible
  student with [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 suitable to the student's
  educational needs [component as provided by Chapter 46].
         SECTION 1.10.  Section 42.005, Education Code, is amended by
  adding Subsection (a-1) to read as follows:
         (a-1)  In determining a district's average daily attendance
  for purposes other than the computation of a district's program
  student count under Section 42.101, the commissioner shall include
  the number of full-time equivalent students in:
               (1)  a special education program in an instructional
  arrangement other than mainstream; or
               (2)  a career and technology program for which a weight
  is provided under Section 42.101(c)(17).
         SECTION 1.11.  Subchapter A, Chapter 42, Education Code, is
  amended by adding Section 42.0053 to read as follows:
         Sec. 42.0053.  WEIGHTED AVERAGE DAILY ATTENDANCE. (a) In
  this chapter, "weighted average daily attendance" of a school
  district is the greater of:
               (1)  the district's cost-adjusted program student count
  as determined under Section 42.102; or
               (2)  the district's scale-adjusted program student
  count as determined under Section 42.103.
         (b)  For a district entitled to a sparsity adjustment under
  Section 42.105, that adjustment is made before making the
  determinations specified in Subsection (a).
         SECTION 1.12.  Section 42.007(c), Education Code, is amended
  to read as follows:
         (c)  The funding elements must include:
               (1)  weights designed to reflect student educational
  program costs [a basic allotment for the purposes of Section 42.101
  that, when combined with the guaranteed yield component provided by
  Subchapter F, represents the cost per student of a regular
  education program that meets all mandates of law and regulation];
               (2)  adjustments designed to reflect the variation in
  known resource costs and costs of education beyond the control of
  school districts;
               (3)  appropriate program cost differentials and other
  funding elements [for the programs authorized under Subchapter C,
  with the program funding level expressed as dollar amounts and as
  weights applied to the adjusted basic allotment for the appropriate
  year];
               (4)  the maximum guaranteed level of [qualified] state
  and local funds per student for the purposes of Section 42.107 
  [Subchapter F];
               (5)  the [enrichment and facilities] tax rate under
  Section 42.108 [Subchapter F];
               (6)  the computation of students in weighted average
  daily attendance under Section 42.0053 [42.302]; and
               (7)  the amount to be appropriated for the school
  facilities assistance program under Chapter 46.
         SECTION 1.13.  Subchapter A, Chapter 42, Education Code, is
  amended by adding Section 42.0091 to read as follows:
         Sec. 42.0091.  REPORT ON STATE FUNDING LEVELS. (a)  Not
  later than July 1 of each year, the commissioner shall:
               (1)  determine whether the estimated total amount of
  state funding provided to a school district or open-enrollment
  charter school under the Foundation School Program and from other
  state funding sources for the following school year is greater than
  or less than the total amount in state funding provided for the
  school year in which the determination is made; and
               (2)  post on the agency's Internet website a report on
  the amount and percentage of the increase or decrease in the total
  amount of state funding determined under Subdivision (1).
         (b)  The report under Subsection (a)(2) must:
               (1)  be disaggregated by funding source; and
               (2)  include a calculation of the amount and percentage
  of the increase or decrease in the total amount of state funding per
  student in average daily attendance and per student in weighted
  average daily attendance.
         SECTION 1.14.  The heading to Subchapter B, Chapter 42,
  Education Code, is amended to read as follows:
  SUBCHAPTER B. GUARANTEED YIELD [BASIC ENTITLEMENT]
         SECTION 1.15.  Section 42.101, Education Code, is amended to
  read as follows:
         Sec. 42.101.  PROGRAM STUDENT COUNT [BASIC ALLOTMENT]. (a)  
  In this section:
               (1)  "Career and technology education program" means a
  program under Subchapter F, Chapter 29.
               (2)  "Full-time equivalent student" means 30 hours of
  contact a week between a student and program personnel.
               (3)  "Special education program" means a program under
  Subchapter A, Chapter 29.
         (b)  For each school district, the number of students in each
  educational program offered by the district is weighted according
  to the formula:
  WP = S X W
  where:
         "WP" is the weighted number of students in the educational
  program;
         "S" is the number of students in average daily attendance,
  number of full-time equivalent students, or number of students
  enrolled, as appropriate, in the educational program; and
         "W" is the weight for the educational program, as provided by
  Subsection (c).
         (c)  The weights are:
               (1)  1.0 for a student in average daily attendance, not
  including time the student spends each day in a special education
  program in an instructional arrangement other than mainstream or in
  a career and technology education program;
               (2)  1.1 for a student in a special education program in
  a mainstream instructional arrangement;
               (3)  5.0 for a full-time equivalent student in a
  special education program in a homebound instructional
  arrangement;
               (4)  3.0 for a full-time equivalent student in a
  special education program in a hospital class instructional
  arrangement;
               (5)  5.0 for a full-time equivalent student in a
  special education program in a speech therapy instructional
  arrangement;
               (6)  3.0 for a full-time equivalent student in a
  special education program in a resource room instructional
  arrangement;
               (7)  3.0 for a full-time equivalent student in a
  special education program in a self-contained, mild and moderate,
  regular campus instructional arrangement;
               (8)  3.0 for a full-time equivalent student in a
  special education program in a self-contained, severe, regular
  campus instructional arrangement;
               (9)  2.7 for a full-time equivalent student in a
  special education program in an off home campus instructional
  arrangement;
               (10)  1.7 for a full-time equivalent student in a
  special education program in a nonpublic day school;
               (11)  2.3 for a full-time equivalent student in a
  special education program vocational adjustment class;
               (12)  4.0 for a student in a special education program
  who resides in a residential care and treatment facility, other
  than a state school, whose parent or guardian does not reside in the
  district and who receives educational services from a local school
  district;
               (13)  2.8 for a student in a special education program
  who resides in a state school;
               (14)  0.3 for a student at risk of dropping out of
  school, as defined by Section 29.081;
               (15)  notwithstanding Subdivision (14), 2.41 for a
  full-time equivalent student who is in a remedial and support
  program under Section 29.081 because the student is pregnant;
               (16)  0.2 for a student who is in a bilingual education
  or special language program under Subchapter B, Chapter 29;
               (17)  for a full-time equivalent student in an approved
  career and technology education program in grades 9 through 12 or in
  a career and technology program for students with disabilities in
  grades 7 through 12:
                     (A)  1.35; and
                     (B)  0.01, if the student is enrolled in:
                           (i)  two or more advanced career and
  technology education classes for a total of three or more credits;
  or
                           (ii)  an advanced course as part of a
  tech-prep program under Subchapter T, Chapter 61;
               (18)  0.12 or a greater weight as provided by
  appropriation for a student in a program for gifted and talented
  students that the district certifies to the commissioner as
  complying with Subchapter D, Chapter 29;
               (19)  except as provided by Subsection (e), 0.1 for a
  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; and
               (20)  0.05 for a student in average daily attendance in
  grades 9 through 12 in the district.
         (d)  A district's program student count is equal to the sum
  of the weighted number of students for each educational program
  offered by the district.
         (e)  The total number of weights under Subsection (c)(19) 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.
         [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 $4,765 or the amount that results from the
  following formula:
  [A = $4,765 X (DCR/MCR)
  [where:
         ["A" is the allotment to which a district is entitled;
         ["DCR" is the district's compressed tax rate, 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 42.2516, multiplied by $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").
         [(a-2)     Subsection (a-1) applies beginning with the
  2017-2018 school year.     For the 2015-2016 and 2016-2017 school
  years, the board of trustees of 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 may choose to apply
  Subsection (a-1) to the calculation of the district's compressed
  tax rate ("DCR").     A board of trustees that chooses to apply
  Subsection (a-1) must notify the commissioner of the decision in
  writing not later than September 1 of the affected school
  year.     This subsection expires September 1, 2018.
         [(b)     A greater amount for any school year may be provided by
  appropriation.
         [(c)     This subsection applies to a school district for which
  the compressed tax rate ("DCR") is determined in accordance with
  Subsection (a-1).     Any reduction in the district's adopted
  maintenance and operations tax rate is applied to the following
  components of the district's tax rate in the order specified:
               [(1)  tax effort described by Section 42.302(a-1)(2);
               [(2)     tax effort described by Section 42.302(a-1)(1);
  and
               [(3)     tax effort included in the determination of the
  district's compressed tax rate ("DCR") under Subsection (a-1).]
         SECTION 1.16.  Sections 42.102 and 42.103, Education Code,
  are amended to read as follows:
         Sec. 42.102.  COST OF EDUCATION ADJUSTMENT. (a) The program
  student count [basic allotment] for each school district is
  adjusted to reflect the geographic variation in known resource
  costs and costs of education due to factors beyond the control of
  the [school] district.
         (b)  The program student count of a school district [cost of
  education adjustment] is adjusted by applying the formula:
  CAP = [(PSC X .5) X (((CEI - 1) X .457668) + 1)] + (PSC X .5)
  where:
         "CAP" is the school district's cost-adjusted program student
  count;
         "PSC" is the district's program student count determined
  under Section 42.101; and
         "CEI" is the cost of education index calculated in accordance
  with the teacher fixed effects index methodology described by the
  2004 report to the legislature submitted by the joint select
  committee on public school finance [adjustment adopted by the
  foundation school fund budget committee and contained in Chapter
  203, Title 19, Texas Administrative Code, as that chapter existed
  on March 26, 1997].
         Sec. 42.103.  SMALL AND MID-SIZED DISTRICT ADJUSTMENT. (a)
  The program student count [basic allotment] for certain small and
  mid-sized school districts is adjusted in accordance with this
  section. In this section:
               (1)  "SAP" ["AA"] is the district's scale-adjusted
  program student count [adjusted allotment per student];
               (2)  "ADA" is the number of students in average daily
  attendance for whom [which] the district is entitled to a weight [an
  allotment] under Sections 42.101(c)(1) and (2) [Section 42.101];
  and
               (3)  "CAP" ["ABA"] is the district's cost-adjusted
  program student count [adjusted basic allotment] determined under
  Section 42.102.
         (b)  The program student count [basic allotment] of a school
  district that contains at least 300 square miles and has not more
  than 1,600 students in average daily attendance is adjusted by
  applying the formula:
  SAP [AA] = (1 + ((1,600 - ADA) X .0004)) X CAP [ABA]
         (c)  The program student count [basic allotment] of a school
  district that contains less than 300 square miles and has not more
  than 1,600 students in average daily attendance is adjusted by
  applying the formula:
  SAP [AA] = (1 + ((1,600 - ADA) X .00025)) X CAP [ABA]
         (d)  The program student count [basic allotment] of a school
  district that offers a kindergarten through grade 12 program and
  has less than 5,000 students in average daily attendance is
  adjusted by applying the formula, of the following formulas, that
  results in the greatest scale-adjusted program student count
  [adjusted allotment]:
               (1)  the formula in Subsection (b) or (c) for which the
  district is eligible; or
               (2)  SAP [AA] = (1 + ((5,000 - ADA) X .000025)) X CAP
  [ABA].
         SECTION 1.17.  Sections 42.105(a) and (c), Education Code,
  are amended to read as follows:
         (a)  Notwithstanding Sections [42.101,] 42.102[,] and
  42.103, the program student count of a school district that has
  fewer than 130 students in average daily attendance shall be
  adjusted under Sections 42.102 and 42.103 [provided an adjusted
  basic allotment] on the basis of 130 students in average daily
  attendance if the district [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. The program student
  count of a school [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 adjusted
  under Sections 42.102 and 42.103 [provided 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
  adjusting [providing] the program student count under Sections
  42.102 and 42.103 [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.
         (c)  Notwithstanding Subsection (a) or Sections [42.101,]
  42.102[,] and 42.103, the program student count of 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 adjusted under Sections 42.102 and 42.103
  [provided 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 1.18.  Sections 42.302, 42.303, and 42.304,
  Education Code, are transferred to Subchapter B, Education Code,
  redesignated as Sections 42.107, 42.108, and 42.109, Education
  Code, and amended to read as follows:
         Sec. 42.107 [42.302].  GUARANTEED YIELD [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 42.108
  [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 $56 [an
  amount described by Subsection (a-1)] or a greater amount for any
  year provided by appropriation;
         "WADA" has the meaning assigned by Section 42.0053 [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 amount [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 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 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 the Austin Independent School District, as determined by the
  commissioner in cooperation with the Legislative Budget Board, if
  the reduction of the limitation on tax increases as provided by
  Section 11.26(a-1), (a-2), or (a-3), Tax Code, did not apply, or the
  amount of district tax revenue per weighted student per cent of tax
  effort used for purposes of this subdivision in the preceding
  school year, for the first six cents by which the district's
  maintenance and operations tax rate exceeds the 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)     $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 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 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)  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 a guaranteed yield [an allotment] under this
  section on the basis of that greater tax effort.
         Sec. 42.108  [42.303].  LIMITATION ON DISTRICT [ENRICHMENT]
  TAX RATE. The district [enrichment] tax rate ("DTR") under Section
  42.107 [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
  42.252], or a greater amount for any year provided by
  appropriation.
         Sec. 42.109 [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 1.19.  Subchapter B, Chapter 42, Education Code, is
  amended by adding Section 42.110 to read as follows:
         Sec. 42.110.  MINIMUM AND MAXIMUM GAIN. (a) Notwithstanding
  any other provision of this chapter, a school district is entitled
  for the 2017-2018 and 2018-2019 school years to a minimum gain
  guarantee of additional state aid in an amount equal to the lesser
  of:
               (1)  the amount by which the district's state and local
  revenue received for the applicable school year under Chapter 41
  and this chapter is less than the state and local revenue received
  by the district under Chapter 41 and this chapter for the 2016-2017
  school year; or
               (2)  $65 per student in weighted average daily
  attendance.
         (b)  Notwithstanding any other provision of this chapter,
  the amount of state and local revenue received by a school district
  under Chapter 41 and this chapter for the 2017-2018 or 2018-2019
  school year may not exceed the sum of $250 per student in weighted
  average daily attendance for that school year and the amount of
  state and local revenue received by the district under Chapter 41
  and this chapter for the 2016-2017 school year. If a school
  district's state and local revenue would exceed that amount for the
  applicable school year, the amount of state funds to which the
  district would otherwise be entitled under this chapter shall be
  reduced proportionately to comply with the maximum amount of
  funding described by this subsection.
         (c)  The commissioner may adopt rules as necessary to
  implement this section.
         (d)  This section expires September 1, 2019.
         SECTION 1.20.  The heading to Subchapter C, Chapter 42,
  Education Code, is amended to read as follows:
  SUBCHAPTER C. CONDITIONS APPLICABLE TO FUNDING BASED ON WEIGHTS
  [SPECIAL ALLOTMENTS]
         SECTION 1.21.  Sections 42.151, 42.152, 42.153, 42.154,
  42.1541, and 42.156, Education Code, are amended to read as
  follows:
         Sec. 42.151.  SPECIAL EDUCATION. (a)  In this section,
  "special education funds" means the portion of state and local
  funds attributable to students weighted under Sections
  42.101(c)(2)-(13). [For each student in average daily attendance in
  a special education program under Subchapter A, Chapter 29, in a
  mainstream instructional arrangement, a school district is
  entitled to an annual allotment equal to the adjusted basic
  allotment multiplied by 1.1. For each full-time equivalent student
  in average daily attendance in a special education program under
  Subchapter A, Chapter 29, in an instructional arrangement other
  than a mainstream instructional arrangement, a district is entitled
  to an annual allotment equal to the adjusted basic allotment
  multiplied by a weight determined according to instructional
  arrangement as follows:
         [Homebound5.0
         [Hospital class3.0
         [Speech therapy5.0
         [Resource room3.0
         [Self-contained, mild and moderate,
         regular campus3.0
         [Self-contained, severe, regular campus3.0
         [Off home campus2.7
         [Nonpublic day school1.7
         [Vocational adjustment class2.3]
         (b)  [A special instructional arrangement for students with
  disabilities residing in care and treatment facilities, other than
  state schools, whose parents or guardians do not reside in the
  district providing education services shall be established 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 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 special education 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.
         (c) [(d)]  For funding purposes, the number of contact hours
  credited per day for each special education 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.
         (d) [(e)]  The State Board of Education by rule shall
  prescribe the qualifications a special education [an]
  instructional arrangement must meet in order to be funded as a
  particular instructional arrangement under this chapter [section].
  In prescribing the qualifications that a mainstream instructional
  arrangement must meet, the 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.
         (e) [(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 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.
         (f)  Special education funds [(h) Funds allocated under this
  section], other than an indirect cost apportionment [allotment]
  established under Section 42.1541 [State Board of Education rule],
  must be used in the special education program under Subchapter A,
  Chapter 29.
         (g) [(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.
         (h) [(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 special education funds attributable to a student in the
  applicable instructional arrangement [adjusted basic allotment or
  adjusted allotment, as applicable,] for each full-time equivalent
  student in average daily attendance[, multiplied by the amount
  designated for the student's instructional arrangement under this
  section,] for each day the program is provided divided by the number
  of days in the minimum school year. The total amount of state
  funding for extended year services under this section may not
  exceed $10 million per year. A school district may use funds
  received under this section only in providing an extended year
  program.
         [(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.]
         Sec. 42.152.  COMPENSATORY EDUCATION PROGRAMS [ALLOTMENT].
  (a)  In this section, "compensatory education funds" means the
  portion of state and local funds attributable to students weighted
  under Sections 42.101(c)(14) and (15) [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, 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].
         (b)  Compensatory education funds must [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.
         [(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
  under Subsection (b) if the school district submits to the
  commissioner a plan detailing the enhanced services that will be
  provided to the student and the commissioner approves the plan.
         [(c)  Funds allocated under this section shall] be used to
  fund supplemental programs and services designed to eliminate any
  disparity in performance on assessment instruments administered
  under Subchapter B, Chapter 39, or disparity in the rates of high
  school completion between students at risk of dropping out of
  school, as defined by Section 29.081, and all other students.  
  Specifically, the funds, other than an indirect cost apportionment 
  [allotment] established under Section 42.1541 [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[,] or to pay the costs associated with placing
  students in a juvenile justice alternative education program
  established under Section 37.011[, or to support a program eligible
  under Title I of the Elementary and Secondary Education Act of 1965,
  as provided by Pub. L. No.   103-382 and its subsequent amendments,
  and by federal regulations implementing that Act, at a campus at
  which at least 40 percent of the students are educationally
  disadvantaged].  In meeting the costs of providing a compensatory,
  intensive, or accelerated instruction program under Section
  29.081, a district's compensatory education funds must [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 compensatory education
  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 funds [allotment] for such a
  program.
         (c) [(c-1)]  Notwithstanding Subsection (b) [(c)],
  compensatory education 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.
         (d) [(c-2)]  Notwithstanding Subsection (b) [(c)],
  compensatory education funds [allocated under this section] may be
  used to fund a school district's mentoring services program under
  Section 29.089.
         (e) [(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.
         (f) [(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 those [compensatory
  education] funds, other than the indirect cost apportionment 
  [allotment], are spent only to supplement the regular education
  program as required by Subsection (b) [(c)]. The reporting
  requirements shall be managed electronically to minimize local
  administrative costs. A school 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.
         (g) [(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 (b) [(c)] or of having inadequately reported
  compensatory education expenditures. If a review of the report
  submitted under Subsection (f) [(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.
         (h) [(q-2)]  If a review of the report submitted under
  Subsection (f) [(q)], using the risk-based system, indicates that a
  school 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.
         (i) [(q-3)]  If a review of the report submitted under
  Subsection (f) [(q)], using the risk-based system, indicates that a
  school 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.
         (j) [(q-4)]  The commissioner, in the year following a local
  audit of compensatory education expenditures, shall withhold from a
  school district's foundation school fund payment an amount equal to
  the amount of compensatory education funds the agency determines
  were not used in compliance with Subsection (b) [(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
  (b) [(c)].
         (k) [(r)]  The commissioner shall grant a one-year exemption
  from the requirements of Subsections (f)-(j) [(q)-(q-4)] to a
  school district in which the group of students who have failed to
  perform satisfactorily in the preceding school year on an
  assessment instrument required under Section 39.023(a), (c), or (l)
  subsequently performs on those assessment instruments at a level
  that meets or exceeds a level prescribed by commissioner rule. Each
  year the commissioner, based on the most recent information
  available, shall determine if a school district is entitled to an
  exemption for the following school year and notify the district of
  that determination.
         Sec. 42.153.  BILINGUAL EDUCATION PROGRAMS [ALLOTMENT]. (a)
  In this section, "bilingual education funds" means the portion of
  state and local funds attributable to students weighted under
  Section 42.101(c)(16) [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 0.1].
         (b)  Bilingual education funds [Funds allocated under this
  section], other than an indirect cost apportionment [allotment]
  established under Section 42.1541 [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 school district's bilingual education funds [or
  special language allocation] may be used only for program and
  student evaluation, instructional materials and equipment, staff
  development, supplemental staff expenses, salary supplements for
  teachers, and other supplies required for quality instruction and
  smaller class size.
         Sec. 42.154.  CAREER AND TECHNOLOGY EDUCATION PROGRAMS
  [ALLOTMENT]. (a) The portion of state and local funds attributable
  to students weighted [For each full-time equivalent student in
  average daily attendance in an approved career and technology
  education program in grades nine through 12 or in career and
  technology education programs for students with disabilities in
  grades seven through 12, a district is entitled to:
               [(1)     an annual allotment equal to the adjusted basic
  allotment multiplied by a weight of 1.35; and
               [(2)  $50, if the student is enrolled in:
                     [(A)     two or more advanced career and technology
  education classes for a total of three or more credits; or
                     [(B)     an advanced course as part of a tech-prep
  program under Subchapter T, Chapter 61.
         [(b)     In this section, "full-time equivalent student" means
  30 hours of contact a week between a student and career and
  technology education program personnel.
         [(c)  Funds allocated] under Section 42.101(c)(17) [this
  section], other than an indirect cost apportionment [allotment]
  established under Section 42.1541 [State Board of Education rule],
  must be used in providing career and technology education programs
  in grades 9 [nine] through 12 or career and technology education
  programs for students with disabilities in grades 7 [seven] through
  12 under Sections 29.182, 29.183, and 29.184.
         (b) [(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. 42.1541.  INDIRECT COSTS [COST ALLOTMENTS]. (a)  The
  State Board of Education shall by rule establish [increase] the
  indirect cost apportionments described by [allotments established
  under] Sections 42.151(f) [42.151(h)], 42.152(b) [42.152(c)],
  42.153(b), and 42.154(a) at an amount and proportion not less than
  the amount and proportion resulting from the indirect cost
  allotment [42.154(a-1) and (c) and] in effect for the 2016-2017
  [2010-2011] school year [in proportion to the average percentage
  reduction in total state and local maintenance and operations
  revenue provided under this chapter for the 2011-2012 school year
  as a result of S.B. Nos. 1 and 2, Acts of the 82nd Legislature, 1st
  Called Session, 2011].
         (b)  To the extent necessary to permit the board to comply
  with this section, the limitation on the percentage of the indirect
  cost apportionment [allotment] prescribed by Section 42.152(b)
  [42.152(c)] does  not apply.
         (c)  The board shall take the action required by Subsection
  (a) not later than the date that permits the [increased] indirect
  cost apportionments [allotments] to apply beginning with the
  2017-2018 [2011-2012] school year.
         Sec. 42.156.  GIFTED AND TALENTED STUDENT PROGRAMS
  [ALLOTMENT]. (a) The portion of state and local funds attributable
  to students weighted [For each identified student a school
  district serves in a program for gifted and talented students that
  the district certifies to the commissioner as complying with
  Subchapter D, Chapter 29, a district is entitled to an annual
  allotment equal to the district's adjusted basic allotment as
  determined under Section 42.102 or Section 42.103, as applicable,
  multiplied by .12 for each school year or a greater amount provided
  by appropriation.
         [(b)  Funds allocated] under Section 42.101(c)(18) [this
  section], other than the amount that represents the program's share
  of general administrative costs, must be used in providing programs
  for gifted and talented students under Subchapter D, Chapter 29,
  including programs sanctioned by International Baccalaureate and
  Advanced Placement, or in developing programs for gifted and
  talented students. Each school district must account for the
  expenditure of state funds as provided by rule of the State Board of
  Education. If by the end of the 12th month after receiving the
  funds [an allotment] for developing a program a district has failed
  to implement a program, the district must refund the amount of the
  funds [allotment] to the agency within 30 days.
         (b) [(c)]  Not more than five percent of a school district's
  students in average daily attendance are eligible for funding under
  this chapter for attendance in a gifted and talented student
  program [section].
         (c) [(d)   If the amount of state funds for which school
  districts are eligible under this section exceeds the amount of
  state funds appropriated in any year for the programs, the
  commissioner shall reduce each district's tier one allotments in
  the same manner described for a reduction in allotments under
  Section 42.253.
         [(e)]  If the total amount of funds attributable to students
  weighted under Section 42.101(c)(18) [allotted under this section]
  before a date set by rule of the State Board of Education is less
  than the total amount appropriated for a school year, the
  commissioner shall transfer the remainder to any program for which
  compensatory education funds, as defined by [an allotment under]
  Section 42.152, may be used.
         [(f)     After each district has received allotted funds for
  this program, the State Board of Education may use up to $500,000 of
  the funds allocated under this section for programs such as
  MATHCOUNTS, Future Problem Solving, Odyssey of the Mind, and
  Academic Decathlon, as long as these funds are used to train
  personnel and provide program services. To be eligible for funding
  under this subsection, a program must be determined by the State
  Board of Education to provide services that are effective and
  consistent with the state plan for gifted and talented education.]
         SECTION 1.22.  Section 42.160, Education Code, is amended to
  read as follows:
         Sec. 42.160.  HIGH SCHOOL PROGRAMS [ALLOTMENT]. (a)  In this
  section, "high school funds" means the portion of state and local
  funds attributable to students weighted under Section
  42.101(c)(20) [A school district is entitled to an annual allotment
  of $275 for each student in average daily attendance in grades 9
  through 12 in the district].
         (b)  [A school district that is required to take action under
  Chapter 41 to reduce its wealth per student to the equalized wealth
  level is entitled to a credit, in the amount of the 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.
         [(c)]  An open-enrollment charter school is entitled to high
  school funds [an allotment under this section] in the same manner as
  a school district.
         (c) [(d)]  The commissioner shall adopt rules to administer
  this section, including rules related to the permissible use of
  high school funds by [allocated under this section to] an
  open-enrollment charter school.
         SECTION 1.23.  Chapter 42, Education Code, is amended by
  adding Subchapter D and a subchapter heading to read as follows:
  SUBCHAPTER D. EXPENSE ALLOTMENTS AND ADDITIONAL STATE AID
         SECTION 1.24.  Sections 42.158, 42.155, and 42.106,
  Education Code, are transferred to Subchapter D, Chapter 42,
  Education Code, as added by this Act, redesignated as Sections
  42.201, 42.202, and 42.203, Education Code, and amended to read as
  follows:
         Sec. 42.201 [42.158].  NEW INSTRUCTIONAL FACILITY
  ALLOTMENT. (a)  In this section, "instructional facility" has the
  meaning assigned by Section 46.001.
         (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) [(b)]  For the first school year in which students attend
  a new instructional facility, a school district is entitled to an
  allotment of $250 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 $250 for each additional student in average daily
  attendance at the facility.
         (d) [(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.
         (e) [(d)]  Subject to Subsection (f) [(d-1)], the amount
  appropriated for allotments under this section may not exceed $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 42.253(h).
         (f) [(d-1)]  In addition to the appropriation amount
  described by Subsection (e) [(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 (e)
  [(d)].  The commissioner shall first apply the funds appropriated
  under this subsection to prevent any reduction under Subsection (e)
  [(d)] in the allotment for attendance at an eligible high school
  instructional facility, subject to the maximum amount of $250 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
  $250 for each student in average daily attendance.
         (g) [(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.
         (h) [(f)]  The commissioner may adopt rules necessary to
  implement this section.
         [(g)     In this section, "instructional facility" has the
  meaning assigned by Section 46.001.]
         Sec. 42.202 [42.155].  TRANSPORTATION ALLOTMENT. (a) Each
  school district or county operating a transportation system is
  entitled to allotments for transportation costs as provided by this
  section.
         (b)  In [As used in] this section:
               (1)  "Regular eligible student" means a student who
  resides two or more miles from the student's campus of regular
  attendance, measured along the shortest route that may be traveled
  on public roads, and who is not classified as a student eligible for
  special education services.
               (2)  "Eligible special education student" means a
  student who is eligible for special education services under
  Section 29.003 and who would be unable to attend classes without
  special transportation services.
               (3)  "Linear density" means the average number of
  regular eligible students transported daily, divided by the
  approved daily route miles traveled by the respective
  transportation system.
         (c)  Each school district or county operating a regular
  transportation system is entitled to an allotment based on the
  daily cost per regular eligible student 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 school 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 if they walked to school. Each board of trustees shall
  provide to the commissioner the definition of hazardous conditions
  applicable to that district and shall identify the specific
  hazardous areas for which the allocation is requested. A hazardous
  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.
         (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 school
  district or from a sending district to another secondary public
  school for a career and technology program or an area career and
  technology school or to an approved post-secondary institution
  under a contract for instruction approved by the agency shall be
  reimbursed based on the number of actual miles traveled times the
  district's official extracurricular travel per mile rate as set by
  the board of trustees and approved by the agency.
         (g)  A school district or county that provides special
  transportation services for eligible special education students is
  entitled to a state allocation paid on a previous year's
  cost-per-mile basis. The maximum rate per mile allowable shall be
  set by appropriation based on data gathered from the first year of
  each preceding biennium. Districts may use a portion of their
  support allocation to pay transportation costs, if necessary. The
  commissioner may grant an amount set by appropriation for private
  transportation to reimburse parents or their agents for
  transporting eligible special education students. The mileage
  allowed shall be computed along the shortest public road from the
  student's home to school and back, morning and afternoon. The need
  for this type transportation shall be determined on an individual
  basis and shall be approved only in extreme hardship cases.
         (h)  Funds allotted under this section must be used in
  providing transportation services.
         (i)  In the case of a school district belonging to a county
  transportation system, the district's transportation allotment for
  purposes of determining a district's Foundation School Program 
  [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 school
  district or county is entitled under this section because the
  district or county provides transportation for an eligible student
  to and from a child-care facility, as defined by Section 42.002,
  Human Resources Code, or a grandparent's residence instead of the
  student's residence, as authorized by Section 34.007, if the
  transportation is provided within the approved routes of the
  district or county for the school the student attends.
         (l)  A school district may, with the funds allotted under
  this section, provide a bus pass or card for another transportation
  system to each student who is eligible to use the regular
  transportation system of the district but for whom the regular
  transportation system of the district is not a feasible method of
  providing transportation. The commissioner by rule shall provide
  procedures for a school district to provide bus passes or cards to
  students under this subsection.
         Sec. 42.203 [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 1.25.  Subchapter D, Chapter 42, Education Code, as
  added by this Act, is amended by adding Sections 42.204 and 42.205
  to read as follows:
         Sec. 42.204.  ALLOTMENT FOR DISTRICTS THAT PROVIDE EDUCATION
  SOLELY TO STUDENTS CONFINED TO OR EDUCATED IN HOSPITALS. (a)  A
  school district that offers a program under Section 29.014 is
  entitled to an allotment in an amount specified in the General
  Appropriations Act, adjusted by:
               (1)  the cost of education adjustment under Section
  42.102 for the school district in which the district is
  geographically located; and
               (2)  the weight for a homebound student under Section
  42.101(c)(3).
         (b)  A program established under Section 29.014 is required
  only in a school district in which the program is financed by an
  allotment under this section or by any other funds available for the
  program.
         Sec. 42.205.  ALLOTMENT FOR CERTAIN GIFTED AND TALENTED
  EDUCATION PROGRAMS. (a)  A school district that offers MATHCOUNTS,
  Future Problem Solving, Odyssey of the Mind, Academic Decathlon, or
  a similar program for gifted and talented students may receive
  additional funding in an amount determined by the commissioner.  
  The commissioner may not provide more than $500,000 each year in
  total funding under this section.
         (b)  To be eligible for funding under this section, a program
  must be determined by the State Board of Education to provide
  services that are effective and consistent with the state plan for
  gifted and talented education.
         (c)  Funds allotted under this section may be used only to
  train personnel or provide program services.
         SECTION 1.26.  Sections 42.2513, 42.2514, and 42.2515,
  Education Code, are transferred to Subchapter D, Chapter 42,
  Education Code, as added by this Act, and redesignated as Sections
  42.206, 42.207, and 42.208, Education Code, to read as follows:
         Sec. 42.206  [42.2513].  ADDITIONAL STATE AID FOR STAFF
  SALARY INCREASES. (a) 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 sum of:
               (1)  the product of $500 multiplied by the number of
  full-time district employees, other than administrators or
  employees subject to the minimum salary schedule under Section
  21.402; and
               (2)  the product of $250 multiplied by the number of
  part-time district employees, other than administrators.
         (b)  A determination by the commissioner under this section
  is final and may not be appealed.
         (c)  The commissioner may adopt rules to implement this
  section.
         Sec. 42.207  [42.2514].  ADDITIONAL STATE AID FOR TAX
  INCREMENT FINANCING PAYMENTS.  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.
         Sec. 42.208  [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.
         SECTION 1.27.  Section 42.251, Education Code, is amended to
  read as follows:
         Sec. 42.251.  FINANCING; GENERAL RULE.  (a)  The sum of [the
  basic allotment under Subchapter B and the special allotments under
  Subchapter C, computed in accordance with this chapter, constitute
  the tier one allotments.   The sum of the tier one allotments and]
  the guaranteed yield [allotments] under Section 42.107 and the
  expense allotments and additional state aid under Subchapter D [F],
  computed in accordance with this chapter, constitutes [constitute]
  the total cost of the Foundation School Program.
         (b)  The program shall be financed by:
               (1)  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;
               [(3)]  state available school funds distributed in
  accordance with law; and
               (3) [(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.
         SECTION 1.28.  Section 42.2516, Education Code, as effective
  September 1, 2017, is amended by adding Subsection (a-1) to read as
  follows:
         (a-1)  For purposes of this title, the state maximum
  compressed tax rate is the product of the state compression
  percentage multiplied by $1.50.
         SECTION 1.29.  The heading to Section 42.252, Education
  Code, is amended to read as follows:
         Sec. 42.252.  LOCAL PROPERTY VALUES [SHARE OF PROGRAM COST
  (TIER ONE)].
         SECTION 1.30.  Section 42.252(b), Education Code, is amended
  to read as follows:
         (b)  The commissioner shall adjust the values reported 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
  revenue level [fund assignment] of any other school district.
         SECTION 1.31.  Section 42.2528(b), Education Code, is
  amended to read as follows:
         (b)  In awarding grants under this section, the commissioner
  shall give highest priority to school 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 42.2516 [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.
         SECTION 1.32.  Sections 42.253(a) and (c), Education Code,
  are amended to read as follows:
         (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 D [C];
               (2)  [the amount of money to which a school district is
  entitled under Subchapter F;
               [(3)]  the amount of money allocated to the district
  from the available school fund; and
               (3) [(4)]  the amount of each district's [tier one]
  local revenue level [share] under Section 42.107 [42.252; and
               [(5)     the amount of each district's tier two local share
  under Section 42.302].
         (c)  Each school district is entitled to an amount equal to
  the difference for that district between the amount provided by
  Subsection [the sum of Subsections] (a)(1) [and (a)(2)] and the sum
  of Subsections (a)(2) and (a)(3)[, (a)(4), and (a)(5)].
         SECTION 1.33.  Section 42.257(b), Education Code, is amended
  to read as follows:
         (b)  If the school 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
  revenue level [fund assignment] of any other district.
  ARTICLE 2. CONFORMING AMENDMENTS
         SECTION 2.01.  Section 7.062(c), Education Code, is amended
  to read as follows:
         (c)  Except as otherwise provided by this subsection, if the
  commissioner certifies that the amount appropriated for a state
  fiscal year for purposes of Subchapters A and B, Chapter 46, exceeds
  the amount to which school districts are entitled under those
  subchapters for that year, the commissioner shall use the excess
  funds, in an amount not to exceed $20 million in any state fiscal
  year, for the purpose of making grants under this section. The use
  of excess funds under this subsection has priority over any
  provision of Chapter 42 that permits or directs the use of excess
  Foundation School Program [foundation school program] funds,
  including Sections [42.2517,] 42.2521, 42.2522, and 42.2531. The
  commissioner is required to use excess funds as provided by this
  subsection only if the commissioner is not required to reduce the
  total amount of state funds allocated to school districts under
  Section 42.253(h).
         SECTION 2.02.  Section 8.051(d), Education Code, is amended
  to read as follows:
         (d)  Each regional education service center shall maintain
  core services for purchase by school districts and campuses.  The
  core services are:
               (1)  training and assistance in:
                     (A)  teaching each subject area assessed under
  Section 39.023; and
                     (B)  providing instruction in personal financial
  literacy as required under Section 28.0021;
               (2)  training and assistance in providing each program
  described by Sections 42.101(c)(1)-(18) [that qualifies for a
  funding allotment under Section 42.151, 42.152, 42.153, or 42.156];
               (3)  assistance specifically designed for a school
  district or campus assigned an unacceptable performance rating
  under Section 39.054;
               (4)  training and assistance to teachers,
  administrators, members of district boards of trustees, and members
  of site-based decision-making committees;
               (5)  assistance specifically designed for a school
  district that is considered out of compliance with state or federal
  special education requirements, based on the agency's most recent
  compliance review of the district's special education programs; and
               (6)  assistance in complying with state laws and rules.
         SECTION 2.03.  Section 11.158(a), Education Code, is amended
  to read as follows:
         (a)  The board of trustees of an independent school district
  may require payment of:
               (1)  a fee for materials used in any program in which
  the resultant product in excess of minimum requirements becomes, at
  the student's option, the personal property of the student, if the
  fee does not exceed the cost of materials;
               (2)  membership dues in student organizations or clubs
  and admission fees or charges for attending extracurricular
  activities, if membership or attendance is voluntary;
               (3)  a security deposit for the return of materials,
  supplies, or equipment;
               (4)  a fee for personal physical education and athletic
  equipment and apparel, although any student may provide the
  student's own equipment or apparel if it meets reasonable
  requirements and standards relating to health and safety
  established by the board;
               (5)  a fee for items of personal use or products that a
  student may purchase at the student's option, such as student
  publications, class rings, annuals, and graduation announcements;
               (6)  a fee specifically permitted by any other statute;
               (7)  a fee for an authorized voluntary student health
  and accident benefit plan;
               (8)  a reasonable fee, not to exceed the actual annual
  maintenance cost, for the use of musical instruments and uniforms
  owned or rented by the district;
               (9)  a fee for items of personal apparel that become the
  property of the student and that are used in extracurricular
  activities;
               (10)  a parking fee or a fee for an identification card;
               (11)  a fee for a driver training course, not to exceed
  the actual district cost per student in the program for the current
  school year;
               (12)  a fee for a course offered for credit that
  requires the use of facilities not available on the school premises
  or the employment of an educator who is not part of the school's
  regular staff, if participation in the course is at the student's
  option;
               (13)  a fee for a course offered during summer school,
  except that the board may charge a fee for a course required for
  graduation only if the course is also offered without a fee during
  the regular school year;
               (14)  a reasonable fee for transportation of a student
  who lives within two miles of the school the student attends to and
  from that school, except that the board may not charge a fee for
  transportation for which the [school] district receives funds under
  Section 42.202(d) [42.155(d)];
               (15)  a reasonable fee, not to exceed $50, for costs
  associated with an educational program offered outside of regular
  school hours through which a student who was absent from class
  receives instruction voluntarily for the purpose of making up the
  missed instruction and meeting the level of attendance required
  under Section 25.092; or
               (16)  if the district does not receive any funds under
  Section 42.202 [42.155] and does not participate in a county
  transportation system for which an allotment is provided under
  Section 42.202(i) [42.155(i)], a reasonable fee for the
  transportation of a student to and from the school the student
  attends.
         SECTION 2.04.  Section 12.106(a), Education Code, as
  effective September 1, 2017, is amended to read as follows:
         (a)  A charter holder is entitled to receive for the
  open-enrollment charter school funding under Chapter 42 equal to
  the amount of funding per student in weighted average daily
  attendance[, excluding enrichment funding under Section
  42.302(a),] to which the charter holder would be entitled for the
  school under Chapter 42 if the school were a school district without
  a [tier one] local revenue level [share] for purposes of Section
  42.253.
         SECTION 2.05.  Section 12.106(a-1), Education Code, is
  amended to read as follows:
         (a-1)  In determining funding for an open-enrollment charter
  school under Subsection (a), adjustments under Sections 42.102,
  42.103, [42.104,] and 42.105 are based on the average adjustment
  for the state.
         SECTION 2.06.  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, the commissioner shall annually adjust the
  local revenue level [fund assignment] of a district to which
  territory is annexed under this section by multiplying the enlarged
  district's local revenue level [fund assignment computed under
  Section 42.252] by a fraction, the numerator of which is the number
  of students residing in the 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.
         SECTION 2.07.  Section 21.402(a), Education Code, as
  effective September 1, 2017, is amended to read as follows:
         (a)  Except as provided by Subsection (e-1) or (f), a school
  district must pay each classroom teacher, full-time librarian,
  full-time school counselor certified under Subchapter B, or
  full-time school nurse not less than the minimum monthly salary,
  based on the employee's level of experience in addition to other
  factors, as determined by commissioner rule, determined by the
  following formula:
  MS = SF x (GL x FS)
  where:
         "MS" is the minimum monthly salary;
         "SF" is the applicable salary factor specified by Subsection
  (c);
         "GL" is the guaranteed level, as defined by Section 42.107;
  and
         "FS" is the percentage [amount], as determined by the
  commissioner under Subsection (b), of the guaranteed level that in
  the 2017-2018 school year produces for each level of experience an
  amount equal to the minimum monthly salary required for that level
  of experience for the 2016-2017 school year [basic allotment as
  provided by Section 42.101(a) or (b) for a school district with a
  maintenance and operations tax rate at least equal to the state
  maximum compressed tax rate, as defined by Section 42.101(a)].
         SECTION 2.08.  Section 21.402(b), Education Code, is amended
  to read as follows:
         (b)  Not later than June 1 of each year, the commissioner
  shall determine the [basic allotment and resulting] monthly
  salaries to be paid by school districts as provided by Subsection
  (a).
         SECTION 2.09.  Section 28.0211(m-1), Education Code, is
  amended to read as follows:
         (m-1)  For purposes of certification under Subsection (m),
  the commissioner may not consider Foundation School Program funds
  except for compensatory education funds [under Section 42.152].
  This section may be implemented only if the commissioner certifies
  that sufficient funds have been appropriated during a school year
  for administering the accelerated instruction programs specified
  under this section and Section 28.0217, including teacher training
  for that purpose.
         SECTION 2.10.  Section 29.002, Education Code, is amended to
  read as follows:
         Sec. 29.002.  DEFINITION. In this subchapter, "special
  services" means:
               (1)  special education instruction, which may be
  provided by professional and supported by paraprofessional
  personnel in the regular classroom or in an instructional
  arrangement described by Sections 42.101(c)(2)-(13) [Section
  42.151]; and
               (2)  related services, which are developmental,
  corrective, supportive, or evaluative services, not instructional
  in nature, that may be required for the student to benefit from
  special education instruction and for implementation of a student's
  individualized education program.
         SECTION 2.11.  Section 29.008(b), Education Code, is amended
  to read as follows:
         (b)  Except as provided by Subsection (c), costs of an
  approved contract for residential placement may be paid from a
  combination of federal, state, and local funds, as directed by the
  commissioner. [The local share of the total contract cost for each
  student is that portion of the local tax effort that exceeds the
  district's local fund assignment under Section 42.252, divided by
  the average daily attendance in the district. If the contract
  involves a private facility, the state share of the total contract
  cost is that amount remaining after subtracting the local share. If
  the contract involves a public facility, the state share is that
  amount remaining after subtracting the local share from the portion
  of the contract that involves the costs of instructional and
  related services. For purposes of this subsection, "local tax
  effort" means the total amount of money generated by taxes imposed
  for debt service and maintenance and operation less any amounts
  paid into a tax increment fund under Chapter 311, Tax Code.]
         SECTION 2.12.  Section 29.018(b), Education Code, is amended
  to read as follows:
         (b)  A school district is eligible to apply for a grant under
  this section if:
               (1)  the district does not receive sufficient funds,
  including the state's share of special education [state] funds, as
  defined by [provided under] Section 42.151, and federal funds, for
  a student with disabilities to pay for the special education
  services provided to the student; or
               (2)  the district does not receive sufficient funds,
  including the state's share of special education [state] funds, as
  defined by [provided under] Section 42.151, and federal funds, for
  all students with disabilities in the district to pay for the
  special education services provided to the students.
         SECTION 2.13.  Section 29.081(b-2), Education Code, is
  amended to read as follows:
         (b-2)  In this subsection, "compensatory education funds"
  has the meaning assigned by Section 42.152. A district that is
  required to provide accelerated instruction under Subsection (b-1)
  shall separately budget sufficient funds, including compensatory
  education funds [under Section 42.152], for that purpose. A
  district may not budget compensatory education funds [received
  under Section 42.152] for any other purpose until the district
  adopts a budget to support additional accelerated instruction under
  Subsection (b-1).
         SECTION 2.14.  Section 29.082(a), Education Code, is amended
  to read as follows:
         (a)  A school district may set aside an amount from the
  district's compensatory education funds, as defined by [allotment
  under] Section 42.152, or may apply to the agency for funding of an
  extended year program for a period not to exceed 30 instructional
  days for students in:
               (1)  kindergarten through grade 11 who are identified
  as likely not to be promoted to the next grade level for the
  succeeding school year; or
               (2)  grade 12 who are identified as likely not to
  graduate from high school before the beginning of the succeeding
  school year.
         SECTION 2.15.  Section 29.089(b), Education Code, is amended
  to read as follows:
         (b)  The commissioner, in consultation with the governor,
  lieutenant governor, and speaker of the house of representatives,
  by rule shall determine accountability standards under this section
  for a school district providing a mentoring services program using
  compensatory education funds, as defined by [allocated under]
  Section 42.152.
         SECTION 2.16.  Section 29.097(g), Education Code, is amended
  to read as follows:
         (g)  For purposes of Subsection (f)(2), a school district is
  encouraged to use high school funds, as defined by [allocated
  under] Section 42.160.
         SECTION 2.17.  Section 29.098(e), Education Code, is amended
  to read as follows:
         (e)  For purposes of Subsection (d)(2), a school district is
  encouraged to use high school funds, as defined by [allocated
  under] Section 42.160.
         SECTION 2.18.  Section 29.203(b), Education Code, is amended
  to read as follows:
         (b)  A school district is entitled to funding attributable to
  students weighted under Section 42.101(c)(19) [the allotment
  provided by Section 42.157] for each eligible student using a
  public education grant. If the district has a wealth per student
  greater than the guaranteed wealth level but less than the
  equalized wealth level, a school district is entitled under rules
  adopted by the commissioner to additional state aid in an amount
  equal to the difference between the cost to the district of
  providing services to a student using a public education grant and
  the sum of the state's share of funds [state aid received because of
  the allotment under Section 42.157] and money from the available
  school fund attributable to the student.
         SECTION 2.19.  Section 29.203(g)(2), Education Code, is
  amended to read as follows:
               (2)  "Guaranteed wealth level" means a wealth per
  student equal to the dollar amount guaranteed level of state and
  local funds per weighted student per cent of tax effort, as provided
  by Section 42.107 [42.302], multiplied by 10,000.
         SECTION 2.20.  Sections 29.918(a) and (b), Education Code,
  are amended to read as follows:
         (a)  Notwithstanding Section 39.234 or 42.152, a school
  district or open-enrollment charter school with a high dropout
  rate, as determined by the commissioner, must submit a plan to the
  commissioner describing the manner in which the district or charter
  school intends to use [the] compensatory education funds, as
  defined by [allotment under] Section 42.152, and high school funds,
  as defined by [the high school allotment under] Section 42.160, for
  developing and implementing research-based strategies for dropout
  prevention. The district or charter school shall submit the plan
  not later than December 1 of each school year preceding the school
  year in which the district or charter school will receive the
  compensatory education funds [allotment] or high school funds
  [allotment] to which the plan applies.
         (b)  A school district or open-enrollment charter school to
  which this section applies may not spend or obligate more than 25
  percent of the district's or charter school's compensatory
  education funds [allotment] or high school funds [allotment] unless
  the commissioner approves the plan submitted under Subsection (a).  
  The commissioner shall complete an initial review of the district's
  or charter school's plan not later than March 1 of the school year
  preceding the school year in which the district or charter school
  will receive the compensatory education funds [allotment] or high
  school funds [allotment] to which the plan applies.
         SECTION 2.21.  Section 34.002(c), Education Code, is amended
  to read as follows:
         (c)  A school district that fails or refuses to meet the
  safety standards for school buses established under this section is
  ineligible to share in the transportation allotment under Section
  42.202 [42.155] until the first anniversary of the date the
  district begins complying with the safety standards.
         SECTION 2.22.  Section 39.117(f), Education Code, is amended
  to read as follows:
         (f)  In this subsection, "compensatory education funds" has
  the meaning assigned by Section 42.152. In addition to any other
  available funds, a school district may use compensatory education
  funds [provided to the district under Section 42.152] to pay the
  costs of the program. Instructional services may be provided to
  students identified under Subsection (d)(1) who are under 26 years
  of age using compensatory education funds [provided under Section
  42.152] or other Foundation School Program funds, notwithstanding
  Section 42.003.
         SECTION 2.23.  The heading to Section 39.234, Education
  Code, is amended to read as follows:
         Sec. 39.234.  USE OF HIGH SCHOOL FUNDS [ALLOTMENT].
         SECTION 2.24.  Section 39.234, Education Code, is amended by
  amending Subsections (a) and (b) and adding Subsection (c) to read
  as follows:
         (a)  In this section, "high school funds" has the meaning
  assigned by Section 42.160.
         (b)  Except as provided by Subsection (c) [(b)], a school
  district or campus must use high school funds [allocated under
  Section 42.160] to:
               (1)  implement or administer a college readiness
  program that provides academic support and instruction to prepare
  underachieving students for entrance into an institution of higher
  education;
               (2)  implement or administer a program that encourages
  students to pursue advanced academic opportunities, including
  early college high school programs and dual credit, advanced
  placement, and international baccalaureate courses;
               (3)  implement or administer a program that provides
  opportunities for students to take academically rigorous course
  work, including four years of mathematics and four years of science
  at the high school level;
               (4)  implement or administer a program, including
  online course support and professional development, that aligns the
  curriculum for grades 6 [six] through 12 with postsecondary
  curriculum and expectations; or
               (5)  implement or administer other high school
  completion and success initiatives in grades 6 [six] through 12
  approved by the commissioner.
         (c) [(b)]  A school district may use high school funds
  [allocated under Section 42.160] on any instructional program in
  grades 6 [six] through 12 other than an athletic program if:
               (1)  the district's measure of progress toward college
  readiness is determined exceptional by a standard set by the
  commissioner; and
               (2)  the district's completion rates for grades 9
  [nine] through 12 exceed completion rate standards required by the
  commissioner to achieve a status of accredited under Section
  39.051.
         SECTION 2.25.  Section 46.013, Education Code, is amended to
  read as follows:
         Sec. 46.013.  MULTIPLE ALLOTMENTS PROHIBITED. A school
  district is not entitled to state assistance under this subchapter
  based on taxes with respect to which the district receives state
  assistance under [Subchapter F,] Chapter 42.
         SECTION 2.26.  Section 46.037, Education Code, is amended to
  read as follows:
         Sec. 46.037.  MULTIPLE ALLOTMENTS PROHIBITED. A school
  district is not entitled to state assistance under this subchapter
  based on taxes with respect to which the district receives state
  assistance under [Subchapter F,] Chapter 42.
         SECTION 2.27.  Section 78.10(g), Education Code, is amended
  to read as follows:
         (g)  For each student enrolled in the academy, the academy is
  entitled to funding [allotments] from the foundation school fund
  under Chapter 42 as if the academy were a school district without a
  [tier one] local revenue level [share] for purposes of Section
  42.253. If in any academic year the amount of the allotments under
  this subsection exceeds the amount of state funds paid to the
  academy in the first fiscal year of the academy's operation, the
  commissioner of education shall set aside from the total amount of
  funds to which school districts are entitled under Section
  42.253(c) an amount equal to the excess amount and shall distribute
  that amount to the academy. After deducting the amount set aside and
  paid to the academy by the commissioner of education under this
  subsection, the commissioner of education shall reduce the amount
  to which each district is entitled under Section 42.253(c) in the
  manner described by Section 42.253(h). A determination of the
  commissioner of education under this subsection is final and may
  not be appealed.
         SECTION 2.28.  Section 79.10(f), Education Code, is amended
  to read as follows:
         (f)  For each student enrolled in the academy, the academy is
  entitled to funding [allotments] from the foundation school fund
  under Chapter 42 as if the academy were a school district without a
  [tier one] local revenue level [share] for purposes of Section
  42.253. If in any academic year the amount of the allotments under
  this subsection exceeds the amount of state funds paid to the
  academy in the first fiscal year of the academy's operation, the
  commissioner of education shall set aside from the total amount of
  funds to which school districts are entitled under Section
  42.253(c) an amount equal to the excess amount and shall distribute
  that amount to the academy. After deducting the amount set aside and
  paid to the academy by the commissioner of education under this
  subsection, the commissioner of education shall reduce the amount
  to which each district is entitled under Section 42.253(c) in the
  manner described by Section 42.253(h). A determination of the
  commissioner of education under this subsection is final and may
  not be appealed.
         SECTION 2.29.  Section 87.505(g), Education Code, is amended
  to read as follows:
         (g)  For each student enrolled in the academy, the academy is
  entitled to funding [allotments] from the foundation school fund
  under Chapter 42 as if the academy were a school district without a
  [tier one] local revenue level [share] for purposes of Section
  42.253. If in any academic year the amount of the allotments under
  this subsection exceeds the amount of state funds paid to the
  academy in the first fiscal year of the academy's operation, the
  commissioner of education shall set aside from the total amount of
  funds to which school districts are entitled under Section
  42.253(c) an amount equal to the excess amount and shall distribute
  that amount to the academy. After deducting the amount set aside and
  paid to the academy by the commissioner of education under this
  subsection, the commissioner of education shall reduce the amount
  to which each district is entitled under Section 42.253(c) in the
  manner described by Section 42.253(h). A determination of the
  commissioner of education under this subsection is final and may
  not be appealed.
         SECTION 2.30.  Section 96.707(k), Education Code, is amended
  to read as follows:
         (k)  For each student enrolled in the academy, the academy is
  entitled to funding [allotments] from the Foundation School Program
  under Chapter 42 as if the academy were a school district without a
  [tier one] local revenue level [share] for purposes of Section
  42.253.
         SECTION 2.31.  Section 105.301(e), Education Code, is
  amended to read as follows:
         (e)  The academy is not subject to the provisions of this
  code, or to the rules of the Texas Education Agency, regulating
  public schools, except that:
               (1)  professional employees of the academy are entitled
  to the limited liability of an employee under Section 22.0511,
  22.0512, or 22.052;
               (2)  a student's attendance at the academy satisfies
  compulsory school attendance requirements; and
               (3)  for each student enrolled, the academy is entitled
  to funding [allotments] from the Foundation School Program 
  [foundation school program] under Chapter 42 as if the academy were
  a school district without a [tier one] local revenue level [share]
  for purposes of Section 42.253.
         SECTION 2.32.  Section 317.005(f), Government Code, is
  amended to read as follows:
         (f)  The governor or board may adopt an order under this
  section withholding or transferring any portion of the total amount
  appropriated to finance the Foundation School Program [foundation
  school program] for a fiscal year. The governor or board may not
  adopt such an order if it would result in an allocation of money
  between particular programs or statutory allotments under the
  Foundation School Program [foundation school program] contrary to
  the statutory proration formula provided by Section 42.253(h),
  Education Code. The governor or board may transfer an amount to the
  total amount appropriated to finance the Foundation School Program 
  [foundation school program] for a fiscal year and may increase the
  guaranteed level, as defined by Section 42.107 [basic allotment].
  The governor or board may adjust allocations of amounts between
  particular programs or statutory allotments under the Foundation
  School Program [foundation school program] only for the purpose of
  conforming the allocations to actual pupil enrollments or
  attendance.
         SECTION 2.33.  Section 322.008(b), Government Code, is
  amended to read as follows:
         (b)  The general appropriations bill may include for
  purposes of information the funding elements computed by the
  Legislative Budget Board under Section 42.007, Education Code,
  excluding the values for each school district calculated under
  Section 42.007(c)(2), Education Code. [If the funding elements are
  included, the funding elements under Section 42.007(c)(3),
  Education Code, shall be reported in dollar amounts per pupil.]
         SECTION 2.34.  Section 437.117(a), Government Code, is
  amended to read as follows:
         (a)  For each student enrolled in the Texas ChalleNGe
  Academy, the department is entitled to funding [allotments] from
  the Foundation School Program under Chapter 42, Education Code, as
  if the academy were a school district without a [tier one] local
  revenue level [share] for purposes of Section 42.253, Education
  Code.
         SECTION 2.35.  Section 2175.304(c), Government Code, is
  amended to read as follows:
         (c)  The procedures established under Subsection (b) must
  give preference to transferring the property directly to a public
  school or school district or to an assistance organization
  designated by the school district before disposing of the property
  in another manner. If more than one public school or school
  district or assistance organization seeks to acquire the same
  property on substantially the same terms, the system, institution,
  or agency shall give preference to a public school that is
  considered low-performing by the commissioner of education or to a
  school district that has a taxable wealth per student that does not
  exceed the wealth per student permitted under Chapter 41 [entitles
  the district to an allotment of state funds under Subchapter F,
  Chapter 42], Education Code, or to the assistance organization
  designated by such a school district.
         SECTION 2.36.  Section 1579.251(a), Insurance Code, is
  amended to read as follows:
         (a)  The state shall assist employees of participating
  school districts and charter schools in the purchase of group
  health coverage under this chapter by providing for each covered
  employee the amount of $900 each state fiscal year or a greater
  amount as provided by the General Appropriations Act. The state
  contribution shall be distributed through the school finance
  formulas under Chapters 41 and 42, Education Code, and used by
  school districts and charter schools only to pay contributions
  under a group health coverage plan for district or school employees
  [as provided by Section 42.260, Education Code].
         SECTION 2.37.  Section 311.013(n), Tax Code, is amended to
  read as follows:
         (n)  This subsection applies only to a school district whose
  taxable value computed under Section 403.302(d), Government Code,
  is reduced in accordance with Subdivision (4) of that subsection.
  In addition to the amount otherwise required to be paid into the tax
  increment fund, the district shall pay into the fund an amount equal
  to the amount by which the amount of taxes the district would have
  been required to pay into the fund in the current year if the
  district levied taxes at the rate the district levied in 2005
  exceeds the amount the district is otherwise required to pay into
  the fund in the year of the reduction.  This additional amount may
  not exceed the amount the [school] district receives in state aid
  for the current tax year under Section 42.207 [42.2514], Education
  Code. The [school] district shall pay the additional amount after
  the district receives the state aid to which the district is
  entitled for the current tax year under Section 42.207 [42.2514],
  Education Code.
  ARTICLE 3. REPEALERS
         SECTION 3.01.  The following provisions of the Education
  Code are repealed:
               (1)  Section 12.106(a-2);
               (2)  Section 29.014(d);
               (3)  Section 29.203(c);
               (4)  Sections 41.002(e), (f), and (g);
               (5)  Section 41.093(b-1);
               (6)  Section 41.159(b);
               (7)  Section 42.104;
               (8)  Section 42.157;
               (9)  Section 42.2517;
               (10)  Section 42.2518;
               (11)  Sections 42.252(a), (a-1), and (d);
               (12)  Section 42.260;
               (13)  Section 42.262;
               (14)  Subchapter F, Chapter 42; and
               (15)  Section 42.4101.
         SECTION 3.02.  Section 1581.053(b), Insurance Code, is
  repealed.
  ARTICLE 4. EFFECTIVE DATE
         SECTION 4.01.  This Act takes effect September 1, 2017.
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