By: Menéndez, et al.	S.B. No. 37

	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. BASIC ALLOTMENT
	SECTION 1.01.  Section 48.051, Education Code, is amended by
	amending Subsection (a) and adding Subsection (a-1) to read as
	follows:
	(a)  Subject to adjustment under Subsection (a-1), for [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 $7,365 [$6,160] or the amount that results
	from the following formula:
	A = $7,365 [$6,160] X TR/MCR
	where:
	"A" is the allotment to which a district is entitled;
	"TR" is the district's tier one maintenance and operations
	tax rate, as provided by Section 45.0032; and
	"MCR" is the district's maximum compressed tax rate, as
	determined under Section 48.2551.
	(a-1)  Beginning with the 2024-2025 school year, the basic
	allotment provided to a district under Subsection (a) or (b) is
	adjusted annually to increase the allotment by the amount that
	results from applying the inflation rate, as determined by the
	comptroller on the basis of changes in the Consumer Price Index for
	All Urban Consumers published by the Bureau of Labor Statistics of
	the United States Department of Labor, to the allotment for the
	preceding school year.
	SECTION 1.02.  Section 48.202(a-1), Education Code, is
	amended to read as follows:
	(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 available to a school
	district at the 96th percentile of wealth per weighted student or
	the amount that results from multiplying 7,365 [6,160], or the
	greater amount provided under Section 48.051(a-1) or (b)
	[48.051(b)], if applicable, by 0.016, for the first eight cents by
	which the district's maintenance and operations tax rate exceeds
	the district's tier one tax rate; and
	(2)  subject to Subsection (f), the amount that results from
	multiplying $7,365 [$6,160], or the greater amount provided under
	Section 48.051(a-1) or (b) [48.051(b)], if applicable, by 0.008,
	for the district's maintenance and operations tax effort that
	exceeds the amount of tax effort described by Subdivision (1).
	ARTICLE 2. ENROLLMENT-BASED FUNDING
	SECTION 2.01.  Section 48.005, Education Code, is amended to
	read as follows:
	Sec. 48.005.  AVERAGE ENROLLMENT [DAILY ATTENDANCE]. (a)
	In this chapter, average enrollment [daily attendance] is:
	(1)  the average number of students enrolled in the
	school district during a school year [quotient of the sum of
	attendance for each day of the minimum number of days of instruction
	as described under Section 25.081(a) divided by the minimum number
	of days of instruction;
	[(2)  for a district that operates under a flexible
	year program under Section 29.0821, the quotient of the sum of
	attendance for each actual day of instruction as permitted by
	Section 29.0821(b)(1) divided by the number of actual days of
	instruction as permitted by Section 29.0821(b)(1);
	[(3)  for a district that operates under a flexible
	school day program under Section 29.0822, the average daily
	attendance as calculated by the commissioner in accordance with
	Sections 29.0822(d) and (d-1)]; or
	(2) [(4)]  for a district that operates a half-day
	program or a full-day program under Section 29.153(c), one-half of
	the average enrollment [daily attendance] calculated under
	Subdivision (1).
	(b)  A school district that experiences a decline of two
	percent or more in average enrollment [daily attendance] shall be
	funded on the basis of:
	(1)  the actual average enrollment [daily attendance]
	of the preceding school year, if the decline is the result of the
	closing or reduction in personnel of a military base; or
	(2)  subject to Subsection (e), an average enrollment
	[daily attendance] not to exceed 98 percent of the actual average
	enrollment [daily attendance] of the preceding school year, if the
	decline is not the result of the closing or reduction in personnel
	of a military base.
	(c)  The commissioner shall adjust the average enrollment
	[daily attendance] of a school district that has a significant
	percentage of students who are migratory children as defined by 20
	U.S.C. Section 6399.
	(d)  The commissioner may adjust the average enrollment
	[daily attendance] of a school district in which a disaster, flood,
	extreme weather condition, fuel curtailment, or other calamity has
	a significant effect on the district's enrollment [attendance]. In
	addition to providing the adjustment for the amount of
	instructional days during the semester in which the calamity first
	occurred, an adjustment under this section may only be provided
	based on a particular calamity for an additional amount of
	instructional days equivalent to one school year. The commissioner
	may divide the adjustment between two consecutive school years.
	(e)  For each school year, the commissioner shall adjust the
	average enrollment [daily attendance] of school districts that are
	entitled to funding on the basis of an adjusted average enrollment
	[daily attendance] under Subsection (b)(2) so that:
	(1)  all districts are funded on the basis of the same
	percentage of the preceding year's actual average enrollment [daily
	attendance]; and
	(2)  the total cost to the state does not exceed the
	amount specifically appropriated for that year for purposes of
	Subsection (b)(2).
	(f)  An open-enrollment charter school is not entitled to
	funding based on an adjustment under Subsection (b)(2).
	(g)  If a student may receive course credit toward the
	student's high school academic requirements and toward the
	student's higher education academic requirements for a single
	course, including a course provided under Section 28.009 by a
	public institution of higher education, the time during which the
	student attends the course shall be counted as part of the minimum
	number of instructional hours required for a student to be
	considered a full-time student in average enrollment [daily
	attendance] for purposes of this section.
	[(g-1)  The commissioner shall adopt rules to calculate
	average daily attendance for students participating in a blended
	learning program in which classroom instruction is supplemented
	with applied workforce learning opportunities, including
	participation of students in internships, externships, and
	apprenticeships.]
	(h)  Time [Subject to rules adopted by the commissioner under
	Section 48.007(b), time] that a student participates in an
	off-campus instructional program provided by an entity other than a
	school district or open-enrollment charter school and approved by
	the commissioner in accordance with commissioner rule [under
	Section 48.007(a)] shall be counted as part of the minimum number of
	instructional hours required for a student to be considered a
	full-time student in average enrollment [daily attendance] for
	purposes of this section.
	(i)  A district or a charter school operating under Chapter
	12 that operates a prekindergarten program is eligible to receive
	one-half of average enrollment [daily attendance] under Subsection
	(a) if the district's or charter school's prekindergarten program
	provides at least 32,400 minutes of instructional time to students.
	(j)  A district or charter school is eligible to earn full
	average enrollment [daily attendance] under Subsection (a) if the
	district or school provides at least 43,200 minutes of
	instructional time to students enrolled in:
	(1)  a dropout recovery school or program operating
	under Section 12.1141(c) or Section 39.0548;
	(2)  an alternative education program operating under
	Section 37.008;
	(3)  a school program located at a day treatment
	facility, residential treatment facility, psychiatric hospital, or
	medical hospital;
	(4)  a school program offered at a correctional
	facility; or
	(5)  a school operating under Subchapter G, Chapter 12.
	(k)  A charter school operating under a charter granted under
	Chapter 12 before January 1, 2015, is eligible to earn full average
	enrollment [daily attendance] under Subsection (a), as that
	subsection existed immediately before January 1, 2015, for:
	(1)  all campuses of the charter school operating
	before January 1, 2015; and
	(2)  any campus or site expansion approved on or after
	January 1, 2015, provided that the charter school received an
	academic accountability performance rating of C or higher, and the
	campus or site expansion is approved by the commissioner.
	(l)  A school district campus or charter school described by
	Subsection (j) may operate more than one program and be eligible for
	full average enrollment [daily attendance] for each program if the
	programs operated by the district campus or charter school satisfy
	all applicable state and federal requirements.
	(m)  The commissioner shall adopt rules necessary to
	implement this section, including rules that:
	(1)  determine the method to calculate the average
	number of students enrolled in a school district during a school
	year;
	(2)  establish the minimum amount of instructional time
	per day that allows a school district or charter school to be
	eligible for full average enrollment [daily attendance], which may
	differ based on the instructional program offered by the district
	or charter school;
	(3) [(2)]  establish the requirements necessary for a
	school district or charter school to be eligible for one-half of
	average enrollment [daily attendance], which may differ based on
	the instructional program offered by the district or charter
	school;
	(4) [(3)]  proportionally reduce the average
	enrollment [daily attendance] for a school district if any campus
	or instructional program in the district provides fewer than the
	required minimum minutes of instruction to students; and
	(5) [(4)]  allow a grade or course repeated under
	Section 28.02124 to qualify for average enrollment [daily
	attendance] even if the student previously passed or earned credit
	for the grade or course, if the grade or course would otherwise be
	eligible.
	(n)  To assist school districts in implementing this section
	as amended by H.B. 2442, [Acts of the] 85th Legislature, Regular
	Session, 2017, the commissioner may waive a requirement of this
	section or adopt rules to implement this section.
	SECTION 2.02.  Section 7.062(a), Education Code, is amended
	to read as follows:
	(a)  In this section, "wealth per student" means a school
	district's taxable value of property as determined under Subchapter
	M, Chapter 403, Government Code, or, if applicable, Section 48.258,
	divided by the district's average enrollment [daily attendance] as
	determined under Section 48.005.
	SECTION 2.03.  Section 11.052(f), Education Code, is amended
	to read as follows:
	(f)  If single-member trustee districts are adopted or
	approved as provided by this section, the board shall divide the
	school district into the appropriate number of trustee districts,
	based on the number of members of the board that are to be elected
	from single-member trustee districts, and shall number each trustee
	district. The trustee districts must be compact and contiguous and
	must be as nearly as practicable of equal population. In a district
	with 150,000 or more students in average enrollment [daily
	attendance], the boundary of a trustee district may not cross a
	county election precinct boundary except at a point at which the
	boundary of the school district crosses the county election
	precinct boundary. Trustee districts must be drawn not later than
	the 90th day before the date of the first election of trustees from
	those districts.
	SECTION 2.04.  Sections 12.106(a), (a-2), and (d), Education
	Code, are amended to read as follows:
	(a)  A charter holder is entitled to receive for the
	open-enrollment charter school funding under Chapter 48 equal to
	the amount of funding per student in weighted average enrollment
	[daily attendance], excluding the adjustment under Section 48.052,
	the funding under Sections 48.101, 48.110, 48.111, and 48.112, and
	enrichment funding under Section 48.202(a), to which the charter
	holder would be entitled for the school under Chapter 48 if the
	school were a school district without a tier one local share for
	purposes of Section 48.266.
	(a-2)  In addition to the funding provided by Subsection (a),
	a charter holder is entitled to receive for the open-enrollment
	charter school an allotment per student in average enrollment
	[daily attendance] in an amount equal to the difference between:
	(1)  the product of:
	(A)  the quotient of:
	(i)  the total amount of funding provided to
	eligible school districts under Section 48.101(b) or (c); and
	(ii)  the total number of students in
	average enrollment [daily attendance] in school districts that
	receive an allotment under Section 48.101(b) or (c); and
	(B)  the sum of one and the quotient of:
	(i)  the total number of students in average
	enrollment [daily attendance] in school districts that receive an
	allotment under Section 48.101(b) or (c); and
	(ii)  the total number of students in
	average enrollment [daily attendance] in school districts
	statewide; and
	(2)  $125.
	(d)  Subject to Subsection (e), in addition to other amounts
	provided by this section, a charter holder is entitled to receive,
	for the open-enrollment charter school, funding per student in
	average enrollment [daily attendance] in an amount equal to the
	guaranteed level of state and local funds per student per cent of
	tax effort under Section 46.032(a) multiplied by the lesser of:
	(1)  the state average interest and sinking fund tax
	rate imposed by school districts for the current year; or
	(2)  a rate that would result in a total amount to which
	charter schools are entitled under this subsection for the current
	year equal to $60 million.
	SECTION 2.05.  Sections 12.263(a), (b), and (c), Education
	Code, are amended to read as follows:
	(a)  Except as otherwise provided by this section, funding
	for an adult education program operated under a charter granted
	under this subchapter is an amount per participant through the
	Foundation School Program equal to the amount of state funding per
	student in weighted average enrollment [daily attendance] that
	would be allocated under the Foundation School Program for the
	student's attendance at an open-enrollment charter school in
	accordance with Section 12.106.
	(b)  For purposes of determining the average enrollment
	[daily attendance] of an adult education program operated under a
	charter granted under this subchapter, a student is considered to
	be in average enrollment [daily attendance, with a 100 percent
	attendance rate,] for:
	(1)  all of the instructional days of the school year,
	if the student is enrolled for at least 75 percent of the school
	year;
	(2)  half of the instructional days of the school year,
	if the student is enrolled for at least 50 percent but less than 75
	percent of the school year;
	(3)  a quarter of the instructional days of the school
	year, if the student is enrolled for at least 25 percent but less
	than 50 percent of the school year; or
	(4)  one-tenth of the instructional days of the school
	year, if the student is enrolled for at least 10 percent but less
	than 25 percent of the school year.
	(c)  A student enrolled in an adult education program
	operated under a charter granted under this subchapter for less
	than 10 percent of a school year may not be counted toward the adult
	education program's average enrollment [daily attendance] for that
	school year.
	SECTION 2.06.  Section 13.051(c), Education Code, is amended
	to read as follows:
	(c)  Territory that does not have residents may be detached
	from a school district and annexed to another school district if:
	(1)  the total taxable value of the property in the
	territory according to the most recent certified appraisal roll for
	each school district is not greater than:
	(A)  five percent of the district's taxable value
	of all property in that district as determined under Subchapter M,
	Chapter 403, Government Code; and
	(B)  $5,000 property value per student in average
	enrollment [daily attendance] as determined under Section 48.005;
	and
	(2)  the school district from which the property will
	be detached does not own any real property located in the territory.
	SECTION 2.07.  Section 13.102, Education Code, is amended to
	read as follows:
	Sec. 13.102.  MINIMUM AREA AND ENROLLMENT [ATTENDANCE]
	REQUIREMENTS. A new district may not be created with an area of
	less than nine square miles or fewer than 8,000 students in average
	enrollment [daily attendance], and a district may not be reduced to
	an area of less than nine square miles or fewer than 8,000 students
	in average enrollment [daily attendance].
	SECTION 2.08.  Section 13.283, Education Code, is amended to
	read as follows:
	Sec. 13.283.  PAYMENTS REDUCED. The incentive aid payments
	shall be reduced in direct proportion to any reduction in the
	average enrollment [daily attendance] as determined under Section
	48.005 of the reorganized school district for the preceding year.
	SECTION 2.09.  Section 19.009(d-2), Education Code, is
	amended to read as follows:
	(d-2)  Beginning with the 2009-2010 school year, the
	district shall increase the monthly salary of each classroom
	teacher, full-time speech pathologist, full-time librarian,
	full-time school counselor certified under Subchapter B, Chapter
	21, and full-time school nurse employed by the district by the
	greater of:
	(1)  $80; or
	(2)  the maximum uniform amount that, when combined
	with any resulting increases in the amount of contributions made by
	the district for social security coverage for the specified
	employees or by the district on behalf of the specified employees
	under Section 825.405, Government Code, may be provided using an
	amount equal to the product of $60 multiplied by the number of
	students in weighted average enrollment [daily attendance] in the
	district during the 2009-2010 school year.
	SECTION 2.10.  Section 25.038, Education Code, is amended to
	read as follows:
	Sec. 25.038.  TUITION FEE FOR TRANSFER STUDENTS. The
	receiving school district may charge a tuition fee to the extent
	that the district's actual expenditure per student in average
	enrollment [daily attendance], as determined by its board of
	trustees, exceeds the sum the district benefits from state aid
	sources as provided by Section 25.037. However, unless a tuition
	fee is prescribed and set out in a transfer agreement before its
	execution by the parties, an increase in tuition charge may not be
	made for the year of that transfer that exceeds the tuition charge,
	if any, of the preceding school year.
	SECTION 2.11.  Section 25.045(c), Education Code, is amended
	to read as follows:
	(c)  A student who transfers to another school district under
	this section may not be charged tuition. The student is included in
	the average enrollment [daily attendance] of the district in which
	the student attends school.
	SECTION 2.12.  Sections 25.081(e) and (f), Education Code,
	are amended to read as follows:
	(e)  A school district or education program is exempt from
	the minimum minutes of operation requirement if the district's or
	program's average enrollment [daily attendance] is calculated
	under Section 48.005(j).
	(f)  The commissioner may proportionally reduce the amount
	of funding a district receives under Chapter 46, 48, or 49 and the
	average enrollment [daily attendance] calculation for the district
	if the district operates on a calendar that provides fewer minutes
	of operation than required under Subsection (a).
	SECTION 2.13.  Section 25.087(d), Education Code, is amended
	to read as follows:
	(d)  A student whose absence is excused under Subsection (b),
	(b-1), (b-2), (b-4), (b-5), (b-7), (b-8), or (c) may not be
	penalized for that absence and shall be counted as if the student
	attended school for purposes of funding under Chapter 48
	[calculating the average daily attendance of students in the school
	district]. A student whose absence is excused under Subsection (b),
	(b-1), (b-2), (b-4), (b-5), (b-7), (b-8), or (c) shall be allowed a
	reasonable time to make up school work missed on those days. If the
	student satisfactorily completes the school work, the day of
	absence shall be counted as a day of compulsory attendance.
	SECTION 2.14.  Section 25.111, Education Code, is amended to
	read as follows:
	Sec. 25.111.  STUDENT/TEACHER RATIOS. Except as provided by
	Section 25.112, each school district must employ a sufficient
	number of teachers certified under Subchapter B, Chapter 21, to
	maintain an average ratio of not less than one teacher for each 20
	students in average enrollment [daily attendance].
	SECTION 2.15.  Sections 25.112(a) and (b), Education Code,
	are amended to read as follows:
	(a)  Except as otherwise authorized by this section, a school
	district may not enroll more than 22 students in a prekindergarten,
	kindergarten, first, second, third, or fourth grade class. That
	limitation does not apply during:
	(1)  any 12-week period of the school year selected by
	the district, in the case of a district whose average enrollment
	[daily attendance] is adjusted under Section 48.005(c); or
	(2)  the last 12 weeks of any school year in the case of
	any other district.
	(b)  Not later than the 30th day after the first day of the
	12-week period for which a district whose average enrollment [daily
	attendance] is adjusted under Section 48.005(c) is claiming an
	exemption under Subsection (a), the district shall notify the
	commissioner in writing that the district is claiming an exemption
	for the period stated in the notice.
	SECTION 2.16.  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. 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 48.256, divided by the average enrollment [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 2.17.  Section 29.014(b), Education Code, is amended
	to read as follows:
	(b)  A school district to which this section applies may
	operate an extended year program for a period not to exceed 45 days.
	[The district's average daily attendance shall be computed for the
	regular school year plus the extended year.]
	SECTION 2.18.  Section 29.081(f), Education Code, is amended
	to read as follows:
	(f)  The commissioner shall include a student who
	successfully completes a course offered through a program under
	Subsection (e) in the computation of the district's or school's
	average enrollment [daily attendance] for funding purposes. [For a
	student who successfully completes a remote course offered through
	the program, the commissioner shall include the student in the
	computation of the district's or school's average daily attendance
	with an attendance rate equal to:
	[(1)  the district's or school's average attendance
	rate for students successfully completing a course offered in
	person under the program; or
	[(2)  if the district or school does not offer courses
	in person under the program, the statewide average attendance rate
	for students successfully completing a course offered in person
	under a program under Subsection (e).]
	SECTION 2.19.  Section 29.0822(d), Education Code, is
	amended to read as follows:
	(d)  The commissioner may adopt rules for the administration
	of this section, including rules establishing application
	requirements. [Subject to Subsection (d-1), the commissioner shall
	calculate average daily attendance for students served under this
	section. The commissioner shall allow accumulations of hours of
	instruction for students whose schedule would not otherwise allow
	full state funding. Funding under this subsection shall be
	determined based on the number of instructional days in the school
	district calendar and a seven-hour school day, but attendance may
	be cumulated over a school year, including any summer or vacation
	session. The attendance of students who accumulate less than the
	number of attendance hours required under this subsection shall be
	proportionately reduced for funding purposes. The commissioner
	may:
	[(1)  set maximum funding amounts for an individual
	course under this section; and
	[(2)  limit funding for the attendance of a student
	described by Subsection (a)(3) in a course under this section to
	funding only for the attendance necessary for the student to earn
	class credit that, as a result of attendance requirements under
	Section 25.092, the student would not otherwise be able to receive
	without retaking the class.]
	SECTION 2.20.  Section 29.184(b), Education Code, is amended
	to read as follows:
	(b)  A student who attends career and technology classes at
	another school under a contract authorized by Subsection (a) is
	included in the average enrollment [daily attendance] of the
	district in which the student is regularly enrolled.
	SECTION 2.21.  Sections 29.203(a) and (c), Education Code,
	are amended to read as follows:
	(a)  A student who under this subchapter uses a public
	education grant to attend a public school in a school district other
	than the district in which the student resides is included in the
	average enrollment [daily attendance] of the district in which the
	student attends school.
	(c)  A school district is entitled to additional facilities
	assistance under Section 48.301 if the district agrees to:
	(1)  accept a number of students using public education
	grants that is at least one percent of the district's average
	enrollment [daily attendance] for the preceding school year; and
	(2)  provide services to each student until the student
	either voluntarily decides to attend a school in a different
	district or graduates from high school.
	SECTION 2.22.  Section 29.403(b), Education Code, is amended
	to read as follows:
	(b)  A student who is enrolled in a program under this
	subchapter is included in determining the average enrollment [daily
	attendance] under Section 48.005 of the partnering school district.
	SECTION 2.23.  Section 29.457(a), Education Code, is amended
	to read as follows:
	(a)  In addition to other funding to which a school district
	is entitled under this code, each district in which alleged
	offender residents attend school is entitled to an annual allotment
	of $5,100 for each resident in average enrollment [daily
	attendance] or a different amount for any year provided by
	appropriation.
	SECTION 2.24.  Section 29.912(c), Education Code, is amended
	to read as follows:
	(c)  The program must enable an eligible school district that
	has fewer than 1,600 students in average enrollment [daily
	attendance] to partner with at least one other school district
	located within a distance of 100 miles to offer a broader array of
	robust college and career pathways. Each partnership must:
	(1)  offer college and career pathways that align with
	regional labor market projections for high-wage, high-demand
	careers; and
	(2)  be managed by a coordinating entity that:
	(A)  has or will have at the time students are
	served under the partnership the capacity to effectively coordinate
	the partnership;
	(B)  has entered into a performance agreement
	approved by the board of trustees of each partnering school
	district that confers on the coordinating entity the same authority
	with respect to pathways offered under the partnership provided to
	an entity that contracts to operate a district campus under Section
	11.174;
	(C)  is an eligible entity as defined by Section
	12.101(a); and
	(D)  has on the entity's governing board as either
	voting or ex officio members, or has on an advisory body,
	representatives of each partnering school district and members of
	regional higher education and workforce organizations.
	SECTION 2.25.  Section 30.003(b), Education Code, is amended
	to read as follows:
	(b)  If the student is admitted to the school for a full-time
	program for the equivalent of two long semesters, the district's
	share of the cost is an amount equal to the dollar amount of
	maintenance and debt service taxes imposed by the district for that
	year divided by the district's average enrollment [daily
	attendance] for the preceding year.
	SECTION 2.26.  Section 30.102(a), Education Code, is amended
	to read as follows:
	(a)  The Texas Juvenile Justice Department is entitled to
	receive the state available school fund apportionment based on the
	average enrollment [daily attendance] in the department's
	educational programs of students who are at least three years of age
	and not older than 21 years of age.
	SECTION 2.27.  Section 30A.151(f), Education Code, is
	amended to read as follows:
	(f)  For a full-time electronic course program offered
	through the state virtual school network for a grade level at or
	above grade level three but not above grade level eight, a school
	district or open-enrollment charter school is entitled to receive
	federal, state, and local funding for a student enrolled in the
	program in an amount equal to the funding the district or school
	would otherwise receive for a student enrolled in the district or
	school. [The district or school may calculate the average daily
	attendance of a student enrolled in the program based on:
	[(1) hours of contact with the student;
	[(2) the student's successful completion of a course;
	or
	[(3) a method approved by the commissioner.]
	SECTION 2.28.  Section 33.157, Education Code, is amended to
	read as follows:
	Sec. 33.157.  PARTICIPATION IN PROGRAM. An elementary or
	secondary school receiving funding under Section 33.156 shall
	participate in a local Communities In Schools program if the number
	of students enrolled in the school who are at risk of dropping out
	of school is equal to at least 10 percent of the number of students
	in average enrollment [daily attendance] at the school, as
	determined by the agency.
	SECTION 2.29.  Section 37.0061, Education Code, is amended
	to read as follows:
	Sec. 37.0061.  FUNDING FOR ALTERNATIVE EDUCATION SERVICES IN
	JUVENILE RESIDENTIAL FACILITIES. A school district that provides
	education services to pre-adjudicated and post-adjudicated
	students who are confined by court order in a juvenile residential
	facility operated by a juvenile board is entitled to count such
	students in the district's average enrollment [daily attendance]
	for purposes of receipt of state funds under the Foundation School
	Program. If the district has a local revenue level greater than the
	guaranteed local revenue level but less than the level established
	under Section 48.257, the district in which the student is enrolled
	on the date a court orders the student to be confined to a juvenile
	residential facility shall transfer to the district providing
	education services an amount equal to the difference between the
	average Foundation School Program costs per student of the district
	providing education services and the sum of the state aid and the
	money from the available school fund received by the district that
	is attributable to the student for the portion of the school year
	for which the district provides education services to the student.
	SECTION 2.30.  Section 37.008(f), Education Code, is amended
	to read as follows:
	(f)  A student removed to a disciplinary alternative
	education program is counted in computing the average enrollment
	[daily attendance] of students in the district [for the student's
	time in actual attendance in the program].
	SECTION 2.31.  Section 37.011(a-4), Education Code, is
	amended to read as follows:
	(a-4)  A school district located in a county considered to be
	a county with a population of 125,000 or less under Subsection (a-3)
	shall provide educational services to a student who is expelled
	from school under this chapter. The district is entitled to count
	the student in the district's average enrollment [daily attendance]
	for purposes of receipt of state funds under the Foundation School
	Program. An educational placement under this section may include:
	(1)  the district's disciplinary alternative education
	program; or
	(2)  a contracted placement with:
	(A)  another school district;
	(B)  an open-enrollment charter school;
	(C)  an institution of higher education;
	(D)  an adult literacy council; or
	(E)  a community organization that can provide an
	educational program that allows the student to complete the credits
	required for high school graduation.
	SECTION 2.32.  Sections 39.027(c) and (f), Education Code,
	are amended to read as follows:
	(c)  The commissioner shall develop and adopt a process for
	reviewing the exemption process of a school district or shared
	services arrangement that gives an exemption under Subsection
	(a)(1) as follows:
	(1)  to more than five percent of the students in the
	special education program, in the case of a district or shared
	services arrangement with an average enrollment [daily attendance]
	of at least 1,600;
	(2)  to more than 10 percent of the students in the
	special education program, in the case of a district or shared
	services arrangement with an average enrollment [daily attendance]
	of at least 190 and not more than 1,599; or
	(3)  to the greater of more than 10 percent of the
	students in the special education program or to at least five
	students in the special education program, in the case of a district
	or shared services arrangement with an average enrollment [daily
	attendance] of not more than 189.
	(f)  In this section, "average enrollment [daily
	attendance]" is computed in the manner provided by Section 48.005.
	SECTION 2.33.  Section 39.053(g-1), Education Code, is
	amended to read as follows:
	(g-1)  In computing dropout and completion rates such as high
	school graduation rates under Subsection (c)(1)(B)(ix), the
	commissioner shall exclude:
	(1)  students who are ordered by a court to attend a
	high school equivalency certificate program but who have not yet
	earned a high school equivalency certificate;
	(2)  students who were previously reported to the state
	as dropouts, including a student who is reported as a dropout,
	reenrolls, and drops out again, regardless of the number of times of
	reenrollment and dropping out;
	(3)  students in attendance who are not in membership
	for purposes of average enrollment [daily attendance];
	(4)  students whose initial enrollment in a school in
	the United States in grades 7 through 12 was as an unschooled asylee
	or refugee as defined by Section 39.027(a-1);
	(5)  students who are detained at a county
	pre-adjudication or post-adjudication juvenile detention facility
	and:
	(A)  in the district exclusively as a function of
	having been detained at the facility but are otherwise not students
	of the district in which the facility is located; or
	(B)  provided services by an open-enrollment
	charter school exclusively as the result of having been detained at
	the facility;
	(6)  students who are incarcerated in state jails and
	federal penitentiaries as adults and as persons certified to stand
	trial as adults; and
	(7)  students who have suffered a condition, injury, or
	illness that requires substantial medical care and leaves the
	student:
	(A)  unable to attend school; and
	(B)  assigned to a medical or residential
	treatment facility.
	SECTION 2.34.  Section 39.262(a), Education Code, is amended
	to read as follows:
	(a)  The governor may present a financial award to the
	schools or districts that the commissioner determines have
	demonstrated the highest levels of sustained success or the
	greatest improvement in achieving the education goals. For each
	student in average enrollment [daily attendance], each of those
	schools or districts is entitled to an amount set for the award for
	which the school or district is selected by the commissioner,
	subject to any limitation set by the commissioner on the total
	amount that may be awarded to a school or district.
	SECTION 2.35.  Section 43.001(c), Education Code, is amended
	to read as follows:
	(c)  The term "scholastic population" in Subsection (b) or
	any other law governing the apportionment, distribution, and
	transfer of the available school fund means all students of school
	age [enrolled] in average enrollment [daily attendance] the
	preceding school year in the public elementary and high school
	grades of school districts within or under the jurisdiction of a
	county of this state.
	SECTION 2.36.  Section 44.004(c), Education Code, is amended
	to read as follows:
	(c)  The notice of public meeting to discuss and adopt the
	budget and the proposed tax rate may not be smaller than one-quarter
	page of a standard-size or a tabloid-size newspaper, and the
	headline on the notice must be in 18-point or larger type. Subject
	to Subsection (d), the notice must:
	(1)  contain a statement in the following form:
	"NOTICE OF PUBLIC MEETING TO DISCUSS BUDGET AND PROPOSED TAX RATE
	"The (name of school district) will hold a public meeting at
	(time, date, year) in (name of room, building, physical location,
	city, state). The purpose of this meeting is to discuss the school
	district's budget that will determine the tax rate that will be
	adopted. Public participation in the discussion is invited." The
	statement of the purpose of the meeting must be in bold type. In
	reduced type, the notice must state: "The tax rate that is
	ultimately adopted at this meeting or at a separate meeting at a
	later date may not exceed the proposed rate shown below unless the
	district publishes a revised notice containing the same information
	and comparisons set out below and holds another public meeting to
	discuss the revised notice." In addition, in reduced type, the
	notice must state: "Visit Texas.gov/PropertyTaxes to find a link to
	your local property tax database on which you can easily access
	information regarding your property taxes, including information
	about proposed tax rates and scheduled public hearings of each
	entity that taxes your property.";
	(2)  contain a section entitled "Comparison of Proposed
	Budget with Last Year's Budget," which must show the difference,
	expressed as a percent increase or decrease, as applicable, in the
	amounts budgeted for the preceding fiscal year and the amount
	budgeted for the fiscal year that begins in the current tax year for
	each of the following:
	(A)  maintenance and operations;
	(B)  debt service; and
	(C)  total expenditures;
	(3)  contain a section entitled "Total Appraised Value
	and Total Taxable Value," which must show the total appraised value
	and the total taxable value of all property and the total appraised
	value and the total taxable value of new property taxable by the
	district in the preceding tax year and the current tax year as
	calculated under Section 26.04, Tax Code;
	(4)  contain a statement of the total amount of the
	outstanding and unpaid bonded indebtedness of the school district;
	(5)  contain a section entitled "Comparison of Proposed
	Rates with Last Year's Rates," which must:
	(A)  show in rows the tax rates described by
	Subparagraphs (i)-(iii), expressed as amounts per $100 valuation of
	property, for columns entitled "Maintenance & Operations,"
	"Interest & Sinking Fund," and "Total," which is the sum of
	"Maintenance & Operations" and "Interest & Sinking Fund":
	(i)  the school district's "Last Year's
	Rate";
	(ii)  the "Rate to Maintain Same Level of
	Maintenance & Operations Revenue & Pay Debt Service," which:
	(a)  in the case of "Maintenance &
	Operations," is the tax rate that, when applied to the current
	taxable value for the district, as certified by the chief appraiser
	under Section 26.01, Tax Code, and as adjusted to reflect changes
	made by the chief appraiser as of the time the notice is prepared,
	would impose taxes in an amount that, when added to state funds to
	be distributed to the district under Chapter 48, would provide the
	same amount of maintenance and operations taxes and state funds
	distributed under Chapter 48 per student in average enrollment
	[daily attendance] for the applicable school year that was
	available to the district in the preceding school year; and
	(b)  in the case of "Interest & Sinking
	Fund," is the tax rate that, when applied to the current taxable
	value for the district, as certified by the chief appraiser under
	Section 26.01, Tax Code, and as adjusted to reflect changes made by
	the chief appraiser as of the time the notice is prepared, and when
	multiplied by the district's anticipated collection rate, would
	impose taxes in an amount that, when added to state funds to be
	distributed to the district under Chapter 46 and any excess taxes
	collected to service the district's debt during the preceding tax
	year but not used for that purpose during that year, would provide
	the amount required to service the district's debt; and
	(iii)  the "Proposed Rate";
	(B)  contain fourth and fifth columns aligned with
	the columns required by Paragraph (A) that show, for each row
	required by Paragraph (A):
	(i)  the "Local Revenue per Student," which
	is computed by multiplying the district's total taxable value of
	property, as certified by the chief appraiser for the applicable
	school year under Section 26.01, Tax Code, and as adjusted to
	reflect changes made by the chief appraiser as of the time the
	notice is prepared, by the total tax rate, and dividing the product
	by the number of students in average enrollment [daily attendance]
	in the district for the applicable school year; and
	(ii)  the "State Revenue per Student," which
	is computed by determining the amount of state aid received or to be
	received by the district under Chapters 43, 46, and 48 and dividing
	that amount by the number of students in average enrollment [daily
	attendance] in the district for the applicable school year; and
	(C)  contain an asterisk after each calculation
	for "Interest & Sinking Fund" and a footnote to the section that, in
	reduced type, states "The Interest & Sinking Fund tax revenue is
	used to pay for bonded indebtedness on construction, equipment, or
	both. The bonds, and the tax rate necessary to pay those bonds, were
	approved by the voters of this district.";
	(6)  contain a section entitled "Comparison of Proposed
	Levy with Last Year's Levy on Average Residence," which must:
	(A)  show in rows the information described by
	Subparagraphs (i)-(iv), rounded to the nearest dollar, for columns
	entitled "Last Year" and "This Year":
	(i)  "Average Market Value of Residences,"
	determined using the same group of residences for each year;
	(ii)  "Average Taxable Value of Residences,"
	determined after taking into account the limitation on the
	appraised value of residences under Section 23.23, Tax Code, and
	after subtracting all homestead exemptions applicable in each year,
	other than exemptions available only to disabled persons or persons
	65 years of age or older or their surviving spouses, and using the
	same group of residences for each year;
	(iii)  "Last Year's Rate Versus Proposed
	Rate per $100 Value"; and
	(iv)  "Taxes Due on Average Residence,"
	determined using the same group of residences for each year; and
	(B)  contain the following information: "Increase
	(Decrease) in Taxes" expressed in dollars and cents, which is
	computed by subtracting the "Taxes Due on Average Residence" for
	the preceding tax year from the "Taxes Due on Average Residence" for
	the current tax year;
	(7)  contain the following statement in bold print:
	"Under state law, the dollar amount of school taxes imposed on the
	residence of a person 65 years of age or older or of the surviving
	spouse of such a person, if the surviving spouse was 55 years of age
	or older when the person died, may not be increased above the amount
	paid in the first year after the person turned 65, regardless of
	changes in tax rate or property value.";
	(8)  contain the following statement in bold print:
	"Notice of Voter-Approval Rate: The highest tax rate the district
	can adopt before requiring voter approval at an election is (the
	school district voter-approval rate determined under Section
	26.08, Tax Code). This election will be automatically held if the
	district adopts a rate in excess of the voter-approval rate of (the
	school district voter-approval rate)."; and
	(9)  contain a section entitled "Fund Balances," which
	must include the estimated amount of interest and sinking fund
	balances and the estimated amount of maintenance and operation or
	general fund balances remaining at the end of the current fiscal
	year that are not encumbered with or by corresponding debt
	obligation, less estimated funds necessary for the operation of the
	district before the receipt of the first payment under Chapter 48 in
	the succeeding school year.
	SECTION 2.37.  Sections 45.0011(a), (d), and (e), Education
	Code, are amended to read as follows:
	(a)  This section applies only to an independent school
	district that, at the time of the issuance of obligations and
	execution of credit agreements under this section, has:
	(1)  at least 2,000 students in average enrollment
	[daily attendance]; or
	(2)  a combined aggregate principal amount of at least
	$50 million of outstanding bonds and voted but unissued bonds.
	(d)  A district may not issue bonds to which this section
	applies in an amount greater than the greater of:
	(1)  25 percent of the sum of:
	(A)  the aggregate principal amount of all
	district debt payable from ad valorem taxes that is outstanding at
	the time the bonds are issued; and
	(B)  the aggregate principal amount of all bonds
	payable from ad valorem taxes that have been authorized but not
	issued;
	(2)  $25 million, in a district that has at least 3,500
	but not more than 15,000 students in average enrollment [daily
	attendance]; or
	(3)  $50 million, in a district that has more than
	15,000 students in average enrollment [daily attendance].
	(e)  In this section, average enrollment [daily attendance]
	is determined in the manner provided by Section 48.005.
	SECTION 2.38.  Section 45.006(a), Education Code, is amended
	to read as follows:
	(a)  This section applies only to a school district that:
	(1)  has an average enrollment [daily attendance] of
	less than 10,000; and
	(2)  is located in whole or part in a municipality with
	a population of less than 25,000 that is located in a county with a
	population of 200,000 or more bordering another county with a
	population of 2.8 million or more.
	SECTION 2.39.  Section 45.105(d), Education Code, is amended
	to read as follows:
	(d)  An independent school district that has in its limits a
	municipality with a population of 150,000 or more or that contains
	at least 170 square miles, has $850 million or more assessed value
	of taxable property on the most recent approved tax roll and has a
	growth in average enrollment [daily attendance] of 11 percent or
	more for each of the preceding five years as determined by the
	agency may, in buying school sites or additions to school sites and
	in building school buildings, issue and deliver negotiable or
	nonnegotiable notes representing all or part of the cost to the
	school district of the land or building. The district may secure
	the notes by a vendor's lien or deed of trust lien against the land
	or building. By resolution or order of the governing body made at
	or before the delivery of the notes, the district may set aside and
	appropriate as a trust fund, and the sole and only fund, for the
	payment of the principal of and interest on the notes that part of
	the local school funds, levied and collected by the school district
	in that year or subsequent years, as the governing body determines.
	The aggregate amount of local school funds set aside in or for any
	subsequent year for the retirement of the notes may not exceed, in
	any one subsequent year, 10 percent of the local school funds
	collected during that year. The district may issue the notes only
	if approved by majority vote of the qualified voters voting in an
	election conducted in the manner provided by Section 45.003 for
	approval of bonds.
	SECTION 2.40.  Section 46.003(a), Education Code, is amended
	to read as follows:
	(a)  For each year, except as provided by Sections 46.005 and
	46.006, a school district is guaranteed a specified amount per
	student in state and local funds for each cent of tax effort, up to
	the maximum rate under Subsection (b), to pay the principal of and
	interest on eligible bonds issued to construct, acquire, renovate,
	or improve an instructional facility. The amount of state support
	is determined by the formula:
	FYA = (FYL X AE [ADA] X BTR X 100) - (BTR X (DPV/100))
	where:
	"FYA" is the guaranteed facilities yield amount of state
	funds allocated to the district for the year;
	"FYL" is the dollar amount guaranteed level of state and
	local funds per student per cent of tax effort, which is $35 or a
	greater amount for any year provided by appropriation;
	"AE" ["ADA"] is the greater of the number of students in
	average enrollment [daily attendance], as determined under Section
	48.005, in the district or 400;
	"BTR" is the district's bond tax rate for the current year,
	which is determined by dividing the amount budgeted by the district
	for payment of eligible bonds by the quotient of the district's
	taxable value of property as determined under Subchapter M, Chapter
	403, Government Code, or, if applicable, Section 48.258, divided by
	100; and
	"DPV" is the district's taxable value of property as
	determined under Subchapter M, Chapter 403, Government Code, or, if
	applicable, Section 48.258.
	SECTION 2.41.  Section 46.005, Education Code, is amended to
	read as follows:
	Sec. 46.005.  LIMITATION ON GUARANTEED AMOUNT. The
	guaranteed amount of state and local funds for a new project that a
	district may be awarded in any state fiscal biennium under Section
	46.003 for a school district may not exceed the lesser of:
	(1)  the amount the actual debt service payments the
	district makes in the biennium in which the bonds are issued; or
	(2)  the greater of:
	(A)  $100,000; or
	(B)  the product of the number of students in
	average enrollment [daily attendance] in the district multiplied by
	$250.
	SECTION 2.42.  Section 46.006(g), Education Code, is amended
	to read as follows:
	(g)  In this section, "wealth per student" means a school
	district's taxable value of property as determined under Subchapter
	M, Chapter 403, Government Code, or, if applicable, Section 48.258,
	divided by the district's average enrollment [daily attendance] as
	determined under Section 48.005.
	SECTION 2.43.  Section 46.032(a), Education Code, is amended
	to read as follows:
	(a)  Each school district is guaranteed a specified amount
	per student in state and local funds for each cent of tax effort to
	pay the principal of and interest on eligible bonds. The amount of
	state support, subject only to the maximum amount under Section
	46.034, is determined by the formula:
	EDA = (EDGL X AE [ADA] X EDTR X 100) - (EDTR X (DPV/100))
	where:
	"EDA" is the amount of state funds to be allocated to the
	district for assistance with existing debt;
	"EDGL" is the dollar amount guaranteed level of state and
	local funds per student per cent of tax effort, which is the lesser
	of:
	(1)  $40 or a greater amount for any year provided by
	appropriation; or
	(2)  the amount that would result in a total additional
	amount of state funds under this subchapter for the current year
	equal to $60 million in excess of the state funds to which school
	districts would have been entitled under this section if the
	guaranteed level amount were $35;
	"AE" ["ADA"] is the number of students in average enrollment
	[daily attendance], as determined under Section 48.005, in the
	district;
	"EDTR" is the existing debt tax rate of the district, which is
	determined by dividing the amount budgeted by the district for
	payment of eligible bonds by the quotient of the district's taxable
	value of property as determined under Subchapter M, Chapter 403,
	Government Code, or, if applicable, under Section 48.258, divided
	by 100; and
	"DPV" is the district's taxable value of property as
	determined under Subchapter M, Chapter 403, Government Code, or, if
	applicable, under Section 48.258.
	SECTION 44.  Sections 48.0051(a) and (b), Education Code,
	are amended to read as follows:
	(a)  The [Subject to Subsection (a-1), the] commissioner
	shall adjust the average enrollment [daily attendance] of a school
	district or open-enrollment charter school under Section 48.005 in
	the manner provided by Subsection (b) if the district or school:
	(1)  provides the minimum number of minutes of
	operational and instructional time required under Section 25.081
	and commissioner rules adopted under that section over at least 180
	days of instruction; and
	(2)  offers an additional 30 days of half-day
	instruction for students enrolled in prekindergarten through fifth
	grade.
	(b)  For a school district or open-enrollment charter school
	described by Subsection (a), the commissioner shall increase the
	average enrollment [daily attendance] of the district or school
	under Section 48.005 by the amount equal to one-sixth [that results
	from the quotient] of the enrollment [sum of attendance] by
	students described by Subsection (a)(2) in [for each of] the 30
	additional instructional days of half-day instruction [that are
	provided divided by 180].
	SECTION 2.45.  Section 48.006, Education Code, is amended to
	read as follows:
	Sec. 48.006.  AVERAGE ENROLLMENT [DAILY ATTENDANCE] FOR
	DISTRICTS IN DISASTER AREA. (a) The commissioner may adjust the
	average enrollment [daily attendance] of a school district all or
	part of which is located in an area declared a disaster area by the
	governor under Chapter 418, Government Code, if the district
	experiences a decline in average enrollment [daily attendance] that
	is reasonably attributable to the impact of the disaster.
	(b)  The adjustment must be sufficient to ensure that the
	district receives funding comparable to the funding that the
	district would have received if the decline in average enrollment
	[daily attendance] reasonably attributable to the impact of the
	disaster had not occurred.
	(c)  The commissioner may make the adjustment under this
	section for the two-year period following the date of the
	governor's initial proclamation or executive order declaring the
	state of disaster.
	(d)  Section 48.005(b)(2) does not apply to a district that
	receives an adjustment under this section.
	(e)  A district that receives an adjustment under this
	section may not receive any additional adjustment under Section
	48.005(d) for the decline in average enrollment [daily attendance]
	on which the adjustment under this section is based.
	(f)  For purposes of this title, a district's adjusted
	average enrollment [daily attendance] under this section is
	considered to be the district's average enrollment [daily
	attendance] as determined under Section 48.005.
	SECTION 2.46.  Sections 48.010(a) and (b), Education Code,
	are amended to read as follows:
	(a)  Not later than July 1 of each year, the commissioner
	shall determine for each school district whether the estimated
	amount of state and local funding per student in weighted average
	enrollment [daily attendance] to be provided to the district under
	the Foundation School Program for maintenance and operations for
	the following school year is less than the amount provided to the
	district for the 2010-2011 school year. If the amount estimated to
	be provided is less, the commissioner shall certify the percentage
	decrease in funding to be provided to the district.
	(b)  In making the determinations regarding funding levels
	required by Subsection (a), the commissioner shall:
	(1)  make adjustments as necessary to reflect changes
	in a school district's maintenance and operations tax rate;
	(2)  for a district required to reduce its local
	revenue level under Section 48.257, base the determinations on the
	district's net funding levels after deducting any amounts required
	to be expended by the district to comply with Chapter 49; and
	(3)  determine a district's weighted average enrollment
	[daily attendance] in accordance with this chapter as it existed on
	January 1, 2011.
	SECTION 2.47.  Sections 48.051(a) and (c), Education Code,
	are amended to read as follows:
	(a)  For each student in average enrollment [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 $7,365
	[$6,160] or the amount that results from the following formula:
	A = $7,365 [$6,160] X TR/MCR
	where:
	"A" is the allotment to which a district is entitled;
	"TR" is the district's tier one maintenance and operations
	tax rate, as provided by Section 45.0032; and
	"MCR" is the district's maximum compressed tax rate, as
	determined under Section 48.2551.
	(c)  During any school year for which the maximum amount of
	the basic allotment provided under Subsection (a) or (b) is greater
	than the maximum amount provided for the preceding school year, a
	school district must use at least 30 percent of the amount, if the
	amount is greater than zero, that equals the product of the average
	enrollment [daily attendance] of the district multiplied by the
	amount of the difference between the district's funding under this
	chapter per student in average enrollment [daily attendance] for
	the current school year and the preceding school year to provide
	compensation increases to full-time district employees other than
	administrators as follows:
	(1)  75 percent must be used to increase the
	compensation paid to classroom teachers, full-time librarians,
	full-time school counselors certified under Subchapter B, Chapter
	21, and full-time school nurses, prioritizing differentiated
	compensation for classroom teachers with more than five years of
	experience; and
	(2)  25 percent may be used as determined by the
	district to increase compensation paid to full-time district
	employees.
	SECTION 2.48.  Sections 48.052(a) and (c), Education Code,
	are amended to read as follows:
	(a)  Notwithstanding Section 48.051, a school district that
	has fewer than 130 students in average enrollment [daily
	attendance] shall be provided a basic allotment on the basis of 130
	students in average enrollment [daily attendance] if it offers a
	kindergarten through grade 12 program and has preceding or current
	year's average enrollment [daily attendance] of at least 90
	students or is 30 miles or more by bus route from the nearest high
	school district. A district offering a kindergarten through grade 8
	program whose preceding or current year's average enrollment [daily
	attendance] was at least 50 students or which is 30 miles or more by
	bus route from the nearest high school district shall be provided a
	basic allotment on the basis of 75 students in average enrollment
	[daily attendance]. An average enrollment [daily attendance] of 60
	students shall be the basis of providing the basic allotment if a
	district offers a kindergarten through grade 6 program and has
	preceding or current year's average enrollment [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 Section 48.051, a
	school district to which this subsection applies, as provided by
	Subsection (b), that has fewer than 130 students in average
	enrollment [daily attendance] shall be provided a basic allotment
	on the basis of 130 students in average enrollment [daily
	attendance] if it offers a kindergarten through grade four program
	and has preceding or current year's average enrollment [daily
	attendance] of at least 75 students or is 30 miles or more by bus
	route from the nearest high school district.
	SECTION 2.49.  Section 48.101, Education Code, is amended to
	read as follows:
	Sec. 48.101.  SMALL AND MID-SIZED DISTRICT ALLOTMENT. (a)
	Small and mid-sized districts are entitled to an annual allotment
	in accordance with this section. In this section:
	(1)  "AA" is the district's annual allotment per
	student in average enrollment [daily attendance];
	(2)  "AE" ["ADA"] is the number of students in average
	enrollment [daily attendance] for which the district is entitled to
	an allotment under Section 48.051; and
	(3)  "BA" is the basic allotment determined under
	Section 48.051.
	(b)  A school district that has fewer than 1,600 students in
	average enrollment [daily attendance] is entitled to an annual
	allotment for each student in average enrollment [daily attendance]
	based on the following formula:
	AA = ((1,600 - AE [ADA]) X .0004) X BA
	(c)  A school district that offers a kindergarten through
	grade 12 program and has less than 5,000 students in average
	enrollment [daily attendance] is entitled to an annual allotment
	for each student in average enrollment [daily attendance] based on
	the formula, of the following formulas, that results in the
	greatest annual allotment:
	(1)  the formula in Subsection (b), if the district is
	eligible for that formula; or
	(2)  AA = ((5,000 - AE [ADA]) X .000025) X BA.
	(d)  Instead of the allotment under Subsection (b) or (c)(1),
	a school district that has fewer than 300 students in average
	enrollment [daily attendance] and is the only school district
	located in and operating in a county is entitled to an annual
	allotment for each student in average enrollment [daily attendance]
	based on the following formula:
	AA = ((1,600 - AE [ADA]) X .00047) X BA
	SECTION 2.50.  Sections 48.102(a) and (j), Education Code,
	are amended to read as follows:
	(a)  For each student in average enrollment [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 basic
	allotment, or, if applicable, the sum of the basic allotment and the
	allotment under Section 48.101 to which the district is entitled,
	multiplied by 1.15. For each full-time equivalent student in
	average enrollment [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 basic
	allotment, or, if applicable, the sum of the basic allotment and the
	allotment under Section 48.101 to which the district is entitled,
	multiplied by a weight determined according to instructional
	arrangement as follows:
	Homebound5.0
	Hospital class3.0
	Speech therapy5.0
	Resource room3.0
	Self-contained, mild and moderate,
	regular campus3.0
	Self-contained, severe,
	regular campus3.0
	Off home campus2.7
	Nonpublic day school1.7
	Vocational adjustment class2.3
	(j)  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 basic allotment, or, if applicable, the sum of the basic
	allotment and the allotment under Section 48.101 to which the
	district is entitled for each full-time equivalent student in
	average enrollment [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.
	SECTION 2.51.  Section 48.105(a), Education Code, is amended
	to read as follows:
	(a)  For each student in average enrollment [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 basic allotment multiplied by:
	(1)  for an emergent bilingual student, as defined by
	Section 29.052:
	(A)  0.1; or
	(B)  0.15 if the student is in a bilingual
	education program using a dual language immersion/one-way or
	two-way program model; and
	(2)  for a student not described by Subdivision (1),
	0.05 if the student is in a bilingual education program using a dual
	language immersion/two-way program model.
	SECTION 2.52.  Sections 48.106(a) and (a-1), Education Code,
	are amended to read as follows:
	(a)  For each full-time equivalent student in average
	enrollment [daily attendance] in an approved career and technology
	education program in grades 7 through 12, a district is entitled to
	an annual allotment equal to the basic allotment, or, if
	applicable, the sum of the basic allotment and the allotment under
	Section 48.101 to which the district is entitled, multiplied by:
	(1)  1.1 for a full-time equivalent student in career
	and technology education courses not in an approved program of
	study;
	(2)  1.28 for a full-time equivalent student in levels
	one and two career and technology education courses in an approved
	program of study, as identified by the agency; and
	(3)  1.47 for a full-time equivalent student in levels
	three and four career and technology education courses in an
	approved program of study, as identified by the agency.
	(a-1)  In addition to the amounts under Subsection (a), for
	each student in average enrollment [daily attendance], a district
	is entitled to $50 for each of the following in which the student is
	enrolled:
	(1)  a campus designated as a P-TECH school under
	Section 29.556; or
	(2)  a campus that is a member of the New Tech Network
	and that focuses on project-based learning and work-based
	education.
	SECTION 2.53.  Section 48.107(a), Education Code, is amended
	to read as follows:
	(a)  Except as provided by Subsection (b), for each student
	in average enrollment [daily attendance] who is using a public
	education grant under Subchapter G, Chapter 29, to attend school in
	a district other than the district in which the student resides, the
	district in which the student attends school is entitled to an
	annual allotment equal to the basic allotment multiplied by a
	weight of 0.1.
	SECTION 2.54.  Section 48.108(a), Education Code, is amended
	to read as follows:
	(a)  For each student in average enrollment [daily
	attendance] in kindergarten through third grade, a school district
	is entitled to an annual allotment equal to the basic allotment
	multiplied by 0.1 if the student is:
	(1)  educationally disadvantaged; or
	(2)  an emergent bilingual student, as defined by
	Section 29.052, and is in a bilingual education or special language
	program under Subchapter B, Chapter 29.
	SECTION 2.55.  Section 48.109(c), Education Code, is amended
	to read as follows:
	(c)  Not more than five percent of a district's students in
	average enrollment [daily attendance] are eligible for funding
	under this section.
	SECTION 2.56.  Section 48.115(a), Education Code, is amended
	to read as follows:
	(a)  Except as provided by Subsection (a-1), a school
	district is entitled to an annual allotment equal to the sum of the
	following amounts or a greater amount provided by appropriation:
	(1)  $10 for each student in average enrollment [daily
	attendance], plus $1 for each student in average enrollment [daily
	attendance] per every $50 by which the district's maximum basic
	allotment under Section 48.051 exceeds $7,365 [$6,160], prorated as
	necessary; and
	(2)  $15,000 per campus.
	SECTION 2.57.  Section 48.118(a), Education Code, is amended
	to read as follows:
	(a)  For each full-time equivalent student in average
	enrollment [daily attendance] in grades 9 through 12 in a college or
	career pathway offered through a partnership under the Rural
	Pathway Excellence Partnership (R-PEP) program under Section
	29.912, a school district is entitled to an allotment equal to the
	basic allotment, or, if applicable, the sum of the basic allotment
	and the allotment under Section 48.101 to which the district is
	entitled, multiplied by:
	(1)  1.15 if the student is educationally
	disadvantaged; or
	(2)  1.11 if the student is not educationally
	disadvantaged.
	SECTION 2.58.  Sections 48.152(d) and (e), Education Code,
	are amended to read as follows:
	(d)  For the first school year in which students attend a new
	instructional facility, a school district is entitled to an
	allotment of $1,000 for each student in average enrollment [daily
	attendance] at the facility. For the second school year in which
	students attend that instructional facility, a school district is
	entitled to an allotment of $1,000 for each additional student in
	average enrollment [daily attendance] at the facility.
	(e)  For purposes of this section, the number of additional
	students in average enrollment [daily attendance] at a facility is
	the difference between the number of students in average enrollment
	[daily attendance] in the current year at that facility and the
	number of students in average enrollment [daily attendance] at that
	facility in the preceding year.
	SECTION 2.59.  Section 48.153, Education Code, is amended to
	read as follows:
	Sec. 48.153.  DROPOUT RECOVERY SCHOOL AND RESIDENTIAL
	PLACEMENT FACILITY ALLOTMENT. A school district or open-enrollment
	charter school is entitled to $275 for each student in average
	enrollment [daily attendance] who:
	(1)  resides in a residential placement facility; or
	(2)  is at a district or school or a campus of the
	district or school that is designated as a dropout recovery school
	under Section 39.0548.
	SECTION 2.60.  Section 48.202(a), Education Code, is amended
	to read as follows:
	(a)  Each school district is guaranteed a specified amount
	per weighted student in state and local funds for each cent of tax
	effort over that required for the district's local fund assignment
	up to the maximum level specified in this subchapter. The amount of
	state support, subject only to the maximum amount under Section
	48.203, is determined by the formula:
	GYA = (GL X WAE [WADA] X DTR X 100) - LR
	where:
	"GYA" is the guaranteed yield amount of state funds to be
	allocated to the district;
	"GL" is the dollar amount guaranteed level of state and local
	funds per weighted student per cent of tax effort, which is an
	amount described by Subsection (a-1) or a greater amount for any
	year provided by appropriation;
	"WAE" ["WADA"] is the number of students in weighted average
	enrollment [daily attendance], which is calculated by dividing the
	sum of the school district's allotments under Subchapters B and C by
	the basic allotment for the applicable year;
	"DTR" is the district enrichment tax rate of the school
	district, which is determined by subtracting the amounts specified
	by Subsection (b) from the total amount of maintenance and
	operations taxes collected by the school district for the
	applicable school year and dividing the difference by the quotient
	of the district's taxable value of property as determined under
	Subchapter M, Chapter 403, Government Code, or, if applicable,
	under Section 48.258 or by the quotient of the value of "DPV" as
	determined under Section 48.256(d) if that subsection applies to
	the district, divided by 100; and
	"LR" is the local revenue, which is determined by multiplying
	"DTR" by the quotient of the district's taxable value of property as
	determined under Subchapter M, Chapter 403, Government Code, or, if
	applicable, under Section 48.258 or by the quotient of the value of
	"DPV" as determined under Section 48.256(d) if that subsection
	applies to the district, divided by 100.
	SECTION 2.61.  Section 48.252(b), Education Code, is amended
	to read as follows:
	(b)  Notwithstanding any other provision of this chapter or
	Chapter 49, a school district subject to this section is entitled to
	receive for each student in average enrollment [daily attendance]
	at the campus or program described by Subsection (a) an amount
	equivalent to the difference, if the difference results in
	increased funding, between:
	(1)  the amount described by Section 12.106; and
	(2)  the amount to which the district would be entitled
	under this chapter.
	SECTION 2.62.  Section 48.2642(a), Education Code, is
	amended to read as follows:
	(a)  Notwithstanding any other provision of this chapter,
	the commissioner shall count toward a school district's or
	open-enrollment charter school's average enrollment [daily
	attendance] under Section 48.005 each student who graduates early
	from high school in the district or school under the Texas First
	Early High School Completion Program established under Section
	28.0253 for the period in which the student is enrolled at an
	eligible institution using state credit awarded under the Texas
	First Scholarship Program established under Subchapter K-1,
	Chapter 56, based on a 100 percent attendance rate.
	SECTION 2.63.  Section 48.273(a)(4), Education Code, is
	amended to read as follows:
	(4)  "Wealth per student" means the taxable property
	values reported by the comptroller to the commissioner under
	Section 48.256 divided by the number of students in average
	enrollment [daily attendance].
	SECTION 2.64.  Section 48.277(a), Education Code, is amended
	to read as follows:
	(a)  A school district or open-enrollment charter school is
	entitled to receive an annual allotment for each student in average
	enrollment [daily attendance] in the amount equal to the
	difference, if the difference is greater than zero, that results
	from subtracting the total maintenance and operations revenue per
	student in average enrollment [daily attendance] for the current
	school year from the lesser of:
	(1)  103 percent of the district's or school's total
	maintenance and operations revenue per student in average
	enrollment [daily attendance] for the 2019-2020 school year that
	the district or school would have received under former Chapters 41
	and 42, as those chapters existed on January 1, 2019; or
	(2)  128 percent of the statewide average amount of
	maintenance and operations revenue per student in average
	enrollment [daily attendance] that would have been provided for the
	2019-2020 school year under former Chapters 41 and 42, as those
	chapters existed on January 1, 2019.
	SECTION 2.65.  Section 49.001(2), Education Code, is amended
	to read as follows:
	(2)  "Weighted average enrollment [daily attendance]"
	has the meaning assigned by Section 48.202.
	SECTION 2.66.  Section 49.002, Education Code, is amended to
	read as follows:
	Sec. 49.002.  OPTIONS TO REDUCE LOCAL REVENUE LEVEL. A
	district with a local revenue level in excess of entitlement may
	take any combination of the following actions to reduce the
	district's revenue level:
	(1)  consolidation with another district as provided by
	Subchapter B;
	(2)  detachment of territory as provided by Subchapter
	C;
	(3)  purchase of average enrollment [daily attendance]
	credit as provided by Subchapter D;
	(4)  education of nonresident students as provided by
	Subchapter E; or
	(5)  tax base consolidation with another district as
	provided by Subchapter F.
	SECTION 2.67.  Section 49.003, Education Code, is amended to
	read as follows:
	Sec. 49.003.  INCLUSION OF ATTENDANCE CREDIT AND
	NONRESIDENTS IN WEIGHTED AVERAGE ENROLLMENT [DAILY ATTENDANCE]. In
	determining whether a school district has a local revenue level in
	excess of entitlement, the commissioner shall use:
	(1)  the district's final weighted average enrollment
	[daily attendance]; and
	(2)  the amount of attendance credit a district
	purchases under Subchapter D or the number of nonresident students
	a district educates under Subchapter E for a school year.
	SECTION 2.68.  Section 49.158(a), Education Code, is amended
	to read as follows:
	(a)  Sections 49.154 and 49.157 apply only to a district
	that:
	(1)  executes an agreement to purchase attendance
	credit necessary to reduce the district's local revenue level to
	the level established under Section 48.257;
	(2)  executes an agreement to purchase attendance
	credit and an agreement under Subchapter E to contract for the
	education of nonresident students who transfer to and are educated
	in the district but who are not charged tuition; or
	(3)  executes an agreement under Subchapter E to
	contract for the education of nonresident students:
	(A)  to an extent that does not provide more than
	10 percent of the reduction in local revenue required for the
	district to achieve a local revenue level that is equal to or less
	than the level established under Section 48.257; and
	(B)  under which all revenue paid by the district
	to other districts, in excess of the reduction in state aid that
	results from counting the weighted average enrollment [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 2.69.  Section 49.201, Education Code, is amended to
	read as follows:
	Sec. 49.201.  AGREEMENT. The board of trustees of a
	district with a local revenue level in excess of entitlement may
	execute an agreement to educate the students of another district in
	a number that, when the weighted average enrollment [daily
	attendance] of the students served is added to the weighted average
	enrollment [daily attendance] of the contracting district, is
	sufficient, in combination with any other actions taken under this
	chapter, to reduce the district's local revenue level to a level
	that is equal to or less than the level established under Section
	48.257. The agreement is not effective unless the commissioner
	certifies that the transfer of weighted average enrollment [daily
	attendance] will not result in any of the contracting districts'
	local revenue level being greater than the level established under
	Section 48.257 and that the agreement requires an expenditure per
	student in weighted average enrollment [daily attendance] that is
	at least equal to the amount per student in weighted average
	enrollment [daily attendance] required under Section 49.153.
	SECTION 2.70.  Section 49.203, Education Code, is amended to
	read as follows:
	Sec. 49.203.  WEIGHTED AVERAGE ENROLLMENT [WADA] COUNT. For
	purposes of Chapter 48, students served under an agreement under
	this subchapter are counted only in the weighted average enrollment
	[daily attendance] of the district providing the services, except
	that students served under an agreement authorized by Section
	49.205 are counted in a manner determined by the commissioner.
	SECTION 2.71.  Section 49.257(b), Education Code, is amended
	to read as follows:
	(b)  Each component district shall bear a share of the costs
	of assessing and collecting taxes in proportion to the component
	district's share of weighted average enrollment [daily attendance]
	in the consolidated taxing district.
	SECTION 2.72.  Section 49.258, Education Code, is amended to
	read as follows:
	Sec. 49.258.  REVENUE DISTRIBUTION. The consolidated taxing
	district shall distribute maintenance tax revenue to the component
	districts on the basis of the number of students in weighted average
	enrollment [daily attendance] in the component districts.
	SECTION 2.73.  Sections 49.305(c) and (d), Education Code,
	are amended to read as follows:
	(c)  If the detachment of whole parcels or items of property
	as provided by Subsection (a) would result in a district's local
	revenue level that is less than the level established under Section
	48.257 by more than the product of $10,000 multiplied by weighted
	average enrollment [daily attendance], the commissioner may not
	detach the last parcel or item of property and shall detach the next
	one or more parcels or items of property in descending order of
	taxable value that would result in the school district having a
	local revenue level that is equal to or less than the level
	established under Section 48.257 by not more than the product of
	$10,000 multiplied by weighted average enrollment [daily
	attendance].
	(d)  Notwithstanding Subsections (a), (b), and (c), the
	commissioner may detach only a portion of a parcel or item of
	property if:
	(1)  it is not possible under this subchapter to reduce
	the district's local revenue level to a level that is equal to or
	less than the level established under Section 48.257 unless some or
	all of the parcel or item of property is detached and the detachment
	of the whole parcel or item would result in the district from which
	it is detached having a local revenue level that is less than the
	level established under Section 48.257 by more than the product of
	$10,000 multiplied by weighted average enrollment [daily
	attendance]; or
	(2)  the commissioner determines that a partial
	detachment of that parcel or item of property is preferable to the
	detachment of one or more other parcels or items having a lower
	taxable value in order to minimize the number of parcels or items of
	property to be detached consistent with the purposes of this
	chapter.
	SECTION 2.74.  Section 49.306(i), Education Code, is amended
	to read as follows:
	(i)  The commissioner may order the annexation of a portion
	of a parcel or item of property, including a portion of property
	treated as a whole parcel or item under Subsection (h), if:
	(1)  the annexation of the whole parcel or item would
	result in the district eligible to receive it in the appropriate
	priority order provided by this section having a local revenue
	level greater than the amount by which the product of $10,000
	multiplied by weighted average enrollment [daily attendance]
	exceeds the taxable value of property necessary to generate
	maintenance and operations tax revenue in the amount equal to the
	district's entitlement under Section 48.202(a-1)(2); or
	(2)  the commissioner determines that annexation of
	portions of the parcel or item would reduce disparities in district
	taxable values of property necessary to generate maintenance and
	operations tax revenue in the amount equal to a district's
	entitlement under Section 48.202(a-1)(2) more efficiently than
	would be possible if the parcel or item were annexed as a whole.
	SECTION 2.75.  Section 49.311, Education Code, is amended to
	read as follows:
	Sec. 49.311.  STUDENT ATTENDANCE. A student who is a
	resident of real property detached from a school district may
	choose to attend school in that district or in the district to which
	the property is annexed. For purposes of determining average
	enrollment [daily attendance] under Section 48.005, the student
	shall be counted in the district to which the property is annexed.
	If the student chooses to attend school in the district from which
	the property is detached, the state shall withhold any foundation
	school funds from the district to which the property is annexed and
	shall allocate to the district in which the student is attending
	school those funds and the amount of funds equal to the difference
	between the state funds the district is receiving for the student
	and the district's cost in educating the student.
	SECTION 2.76.  Section 49.354(e), Education Code, is amended
	to read as follows:
	(e)  A restored district's proportionate share of fund
	balances, personal property, or indebtedness is equal to the
	proportion that the number of students in average enrollment [daily
	attendance] in the restored district bears to the number of
	students in average enrollment [daily attendance] in the
	consolidated district.
	SECTION 2.77.  Section 403.104(d), Government Code, is
	amended to read as follows:
	(d)  The proportionate share of an independent school
	district is determined by multiplying the total amount of the
	payment available for distribution to school districts by the ratio
	that the average number of [daily attendance for] students who
	reside in the county and are enrolled in [who attend] that school
	district bears to the average number of [daily attendance for] all
	students who reside in the county and are enrolled in [who attend]
	any independent school district. However, if there are fewer than
	10 independent school districts located in whole or part in the
	county and if an independent school district would receive under
	this formula less than 10 percent of the total payment available for
	distribution to independent school districts, the school
	district's share shall be increased to 10 percent of the total
	payment and the shares of the school districts that would receive
	more than 10 percent under the formula shall be reduced
	proportionately, but not to an amount less than 10 percent of the
	total payment. [Each independent school district shall develop a
	reasonable method for determining the average daily attendance for
	students who reside in the county and who attend the school
	district.]
	SECTION 2.78.  Section 1371.001(4), Government Code, is
	amended to read as follows:
	(4)  "Issuer" means:
	(A)  a home-rule municipality that:
	(i)  adopted its charter under Section 5,
	Article XI, Texas Constitution;
	(ii)  has a population of 50,000 or more; and
	(iii)  has outstanding long-term
	indebtedness that is rated by a nationally recognized rating agency
	for municipal securities in one of the four highest rating
	categories for a long-term obligation;
	(B)  a conservation and reclamation district
	created and organized as a river authority under Section 52,
	Article III, or Section 59, Article XVI, Texas Constitution;
	(C)  a joint powers agency organized and operating
	under Chapter 163, Utilities Code;
	(D)  a metropolitan rapid transit authority,
	regional transportation authority, or coordinated county
	transportation authority created, organized, or operating under
	Chapter 451, 452, or 460, Transportation Code;
	(E)  a conservation and reclamation district
	organized or operating as a navigation district under Section 52,
	Article III, or Section 59, Article XVI, Texas Constitution;
	(F)  a district organized or operating under
	Section 59, Article XVI, Texas Constitution, that has all or part of
	two or more municipalities within its boundaries;
	(G)  a state agency, including a state institution
	of higher education;
	(H)  a hospital authority created or operating
	under Chapter 262 or 264, Health and Safety Code, in a county that:
	(i)  has a population of more than 3.3
	million; or
	(ii)  is included, in whole or in part, in a
	standard metropolitan statistical area of this state that includes
	a county with a population of more than 2.5 million;
	(I)  a hospital district in a county that has a
	population of more than 2.5 million;
	(J)  a nonprofit corporation organized to
	exercise the powers of a higher education loan authority under
	Section 53B.47(e), Education Code;
	(K)  a county:
	(i)  that has a population of more than 3.3
	million; or
	(ii)  that, on the date of issuance of
	obligations under this chapter, has authorized, outstanding, or any
	combination of authorized and outstanding, indebtedness of at least
	$100 million secured by and payable from the county's ad valorem
	taxes and the authorized long-term indebtedness of which is rated
	by a nationally recognized rating agency of securities issued by
	local governments in one of the four highest rating categories for a
	long-term obligation;
	(L)  an independent school district that has an
	average enrollment [daily attendance] of 50,000 or more as
	determined under Section 48.005, Education Code;
	(M)  a municipality or county operating under
	Chapter 334, Local Government Code;
	(N)  a district created under Chapter 335, Local
	Government Code;
	(O)  a junior college district that has a total
	headcount enrollment of 40,000 or more based on enrollment in the
	most recent regular semester; or
	(P)  an issuer, as defined by Section 1201.002,
	that has:
	(i)  a principal amount of at least $100
	million in outstanding long-term indebtedness, in long-term
	indebtedness proposed to be issued, or in a combination of
	outstanding or proposed long-term indebtedness; and
	(ii)  some amount of long-term indebtedness
	outstanding or proposed to be issued that is rated in one of the
	four highest rating categories for long-term debt instruments by a
	nationally recognized rating agency for municipal securities,
	without regard to the effect of any credit agreement or other form
	of credit enhancement entered into in connection with the
	obligation.
	SECTION 2.79.  Section 1431.001(3), Government Code, is
	amended to read as follows:
	(3)  "Eligible school district" means an independent
	school district that has an average enrollment [daily attendance]
	of 190,000 or more as determined under Section 48.005, Education
	Code.
	SECTION 2.80.  Section 325.011(a), Local Government Code, is
	amended to read as follows:
	(a)  The district is governed by a board of directors
	composed of five members, with two directors appointed by the
	commissioners court of the county, two directors appointed by the
	governing body of the municipality having the largest population in
	the county, and one director appointed by the governing body of the
	school district with the largest number of students in average
	enrollment [daily attendance] in the county. The board shall
	manage the district and administer this chapter.
	SECTION 2.81.  Section 313.027(i), Tax Code, is amended to
	read as follows:
	(i)  A person and the school district may not enter into an
	agreement under which the person agrees to provide supplemental
	payments to a school district or any other entity on behalf of a
	school district in an amount that exceeds an amount equal to the
	greater of $100 per student per year in average enrollment [daily
	attendance], as defined by Section 48.005, Education Code, or
	$50,000 per year, or for a period that exceeds the period beginning
	with the period described by Section 313.021(4) and ending December
	31 of the third tax year after the date the person's eligibility for
	a limitation under this chapter expires. This limit does not apply
	to amounts described by Subsection (f)(1) or (2).
	SECTION 2.82.  Section 1, Article 2688d, Vernon's Texas
	Civil Statutes, is amended to read as follows:
	Section 1. In all counties of the State where, according to
	the preceding annual statistical report of the schools said county
	has not more than four (4) school districts, with one (1) of such
	districts comprising more than half of the county and having more
	than two thousand (2,000) pupils in average enrollment [daily
	attendance] in the one (1) district alone, and such district having
	an assessed valuation of more than Twenty Million Dollars
	($20,000,000) and where there is only one (1) common school
	district in such county with an average enrollment [daily
	attendance] of less than sixteen (16), the office of county
	superintendent is hereby abolished, to be effective at the end of
	the term of the incumbent county superintendent, as is now provided
	by law.
	SECTION 2.83.  The following provisions of the Education
	Code are repealed:
	(1)  Section 29.0822(d-1); and
	(2)  Section 48.007.
	ARTICLE 3. SERVICE-BASED INTENSITY FUNDING FORMULA FOR SPECIAL
	EDUCATION
	SECTION 3.01.  Effective September 1, 2024, Section 48.102,
	Education Code, is amended to read as follows:
	Sec. 48.102.  SPECIAL EDUCATION.  (a) For each student in
	average daily attendance in a special education program under
	Subchapter A, Chapter 29, [in a mainstream instructional
	arrangement,] a school district is entitled to an annual allotment
	equal to the basic allotment, or, if applicable, the sum of the
	basic allotment and the allotment under Section 48.101 to which the
	district is entitled, multiplied by a weight in an amount set by the
	legislature in the General Appropriations Act for the highest tier
	of intensity of service for which the student qualifies [1.15].
	(a-1)  Notwithstanding Subsection (a), for the 2024-2025 and
	2025-2026 school years, the amount of an allotment under this
	section shall be determined in accordance with Section 48.1023.
	This subsection expires September 1, 2026. [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 basic allotment, or, if applicable, the sum of the basic
	allotment and the allotment under Section 48.101 to which the
	district is entitled, multiplied by a weight determined according
	to instructional arrangement as follows:
	[Homebound             5.0
	[Hospital class             3.0
	[Speech therapy             5.0
	[Resource room             3.0
	[Self-contained, mild and moderate, regular campus
	3.0
	[Self-contained, severe, regular campus             3.0
	[Off home campus             2.7
	[Nonpublic day school             1.7
	[Vocational adjustment class             2.3]
	(b)  The commissioner by rule shall define seven tiers of
	intensity of service for use in determining funding under this
	section. The commissioner must include one tier specifically
	addressing students receiving special education services in
	residential placement [A special instructional arrangement for
	students with disabilities residing in care and treatment
	facilities, other than state schools, whose parents or guardians do
	not reside in the district providing education services shall be
	established by commissioner rule.  The funding weight for this
	arrangement shall be 4.0 for those students who receive their
	education service on a local school district campus.  A special
	instructional arrangement for students with disabilities residing
	in state schools shall be established by commissioner rule with a
	funding weight of 2.8].
	(c)  [For funding purposes, the number of contact hours
	credited per day for each student in the off home campus
	instructional arrangement may not exceed the contact hours credited
	per day for the multidistrict class instructional arrangement in
	the 1992-1993 school year.
	[(d)  For funding purposes the contact hours credited per day
	for each student in the resource room;  self-contained, mild and
	moderate; and self-contained, severe, instructional arrangements
	may not exceed the average of the statewide total contact hours
	credited per day for those three instructional arrangements in the
	1992-1993 school year.
	[(e)  The commissioner by rule shall prescribe the
	qualifications an instructional arrangement must meet in order to
	be funded as a particular instructional arrangement under this
	section.  In prescribing the qualifications that a mainstream
	instructional arrangement must meet, the commissioner shall
	establish requirements that students with disabilities and their
	teachers receive the direct, indirect, and support services that
	are necessary to enrich the regular classroom and enable student
	success.
	[(f)  In this section, "full-time equivalent student" means
	30 hours of contact a week between a special education student and
	special education program personnel.
	[(g)]  The commissioner shall adopt rules and procedures
	governing contracts for residential and day program placement of
	[special education] students receiving special education
	services.
	(d)  [The legislature shall provide by appropriation for the
	state's share of the costs of those placements.
	[(h)]  At least 55 percent of the funds allocated under this
	section must be used in the special education program under
	Subchapter A, Chapter 29.
	(e) [(i)]  The agency shall ensure [encourage] the placement
	of students in special education programs, including students in
	residential placement [instructional arrangements], in the least
	restrictive environment appropriate for their educational needs.
	(f) [(j)]  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 basic allotment, or, if applicable, the sum of the basic
	allotment and the allotment under Section 48.101 to which the
	district is entitled for each [full-time equivalent] student in
	average daily attendance, multiplied by the amount designated for
	the highest tier of intensity of service for which the student
	qualifies [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.
	(g) [(k)]  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.
	(h)  Not later than December 1 of each even-numbered year,
	the commissioner shall submit to the Legislative Budget Board, for
	purposes of the allotment under this section, proposed weights for
	the tiers of intensity of service for the next state fiscal
	biennium.
	SECTION 3.02.  Effective September 1, 2024, Subchapter C,
	Chapter 48, Education Code, is amended by adding Section 48.1021 to
	read as follows:
	Sec. 48.1021.  SPECIAL EDUCATION SERVICE GROUP ALLOTMENT.
	(a) For each six-week period in which a student in a special
	education program under Subchapter A, Chapter 29, receives eligible
	special education services, a school district is entitled to an
	allotment in an amount set by the legislature in the General
	Appropriations Act for the service group for which the student is
	eligible.
	(a-1)  Notwithstanding Subsection (a), for the 2024-2025 and
	2025-2026 school years, the amount of an allotment under this
	section shall be determined in accordance with Section 48.1023.
	This subsection expires September 1, 2026.
	(b)  The commissioner by rule shall establish four service
	groups for use in determining funding under this section. In
	establishing the groups, the commissioner must consider the level
	of services, equipment, and technology required to meet the needs
	of students receiving special education services.
	(c)  A school district is entitled to receive an allotment
	under this section for each service group for which a student is
	eligible.
	(d)  A school district is entitled to the full amount of an
	allotment under this section for a student receiving eligible
	special education services during any part of a six-week period.
	(e)  At least 55 percent of the funds allocated under this
	section must be used for a special education program under
	Subchapter A, Chapter 29.
	(f)  Not later than December 1 of each even-numbered year,
	the commissioner shall submit to the Legislative Budget Board, for
	purposes of the allotment under this section, proposed amounts of
	funding for the service groups for the next state fiscal biennium.
	SECTION 3.03.  Subchapter C, Chapter 48, Education Code, is
	amended by adding Sections 48.1022 and 48.1023 to read as follows:
	Sec. 48.1022.  SPECIAL EDUCATION FULL INDIVIDUAL AND INITIAL
	EVALUATION. For each student for whom a school district conducts a
	full individual and initial evaluation under Section 29.004 or 20
	U.S.C. Section 1414(a)(1), the district is entitled to an allotment
	of $500 or a greater amount provided by appropriation.
	Sec. 48.1023.  SPECIAL EDUCATION TRANSITION FUNDING.
	(a)  For the 2024-2025 and 2025-2026 school years, the commissioner
	may adjust weights or amounts provided under Section 48.102 or
	48.1021 as necessary to ensure compliance with requirements
	regarding maintenance of state financial support under 20 U.S.C.
	Section 1412(a)(18) and maintenance of local financial support
	under applicable federal law.
	(b)  For the 2024-2025 and 2025-2026 school years, the
	commissioner shall determine the formulas through which school
	districts receive funding under Sections 48.102 and 48.1021. In
	determining the formulas, the commissioner may combine the methods
	of funding under those sections with the method of funding provided
	by Section 48.102, as it existed on January 1, 2023.
	(c)  For the 2026-2027 school year, the commissioner may
	adjust the weights or amounts set by the legislature in the General
	Appropriations Act for purposes of Section 48.102 or 48.1021.
	Before making an adjustment under this subsection, the commissioner
	shall notify and must receive approval from the Legislative Budget
	Board.
	(d)  Notwithstanding any other provision of this section,
	the sum of funding provided under Sections 48.102 and 48.1021 for
	the 2024-2025 or for the 2025-2026 school year as adjusted under
	this section may not exceed the sum of:
	(1)  funding that would have been provided under
	Section 48.102, as it existed on January 1, 2023; and
	(2)  the amount set by the legislature in the
	General Appropriations Act.
	(e)  Each school district and open-enrollment charter school
	shall report to the agency information necessary to implement this
	section.
	(f)  The agency shall provide technical assistance to school
	districts and open-enrollment charter schools to ensure a
	successful transition in funding formulas for special education.
	(g)  This section expires September 1, 2028.
	SECTION 3.04.  Section 48.103(c), Education Code, is amended
	to read as follows:
	(c)  A school district may receive funding for a student
	under each provision of this section, [and] Section 48.102, and
	Section 48.1021 for which [if] the student qualifies [satisfies the
	requirements of both sections].
	SECTION 3.05.  Section 48.279(e), Education Code, is amended
	to read as follows:
	(e)  After the commissioner has replaced any withheld
	federal funds as provided by Subsection (d), the commissioner shall
	distribute the remaining amount, if any, of funds described by
	Subsection (a) to proportionately increase funding for the special
	education allotment under Section 48.102 and the special education
	service group allotment under Section 48.1021.
	ARTICLE 4. SCHOOL SAFETY ALLOTMENT
	SECTION 4.01.  Section 48.115(a), Education Code, is amended
	to read as follows:
	Sec. 48.115. SCHOOL SAFETY ALLOTMENT. (a) Except as
	provided by Subsection (a-1), a school district is entitled to an
	annual allotment equal to the sum of the following amounts or a
	greater amount provided by appropriation:
	(1) $100 [$10] for each enrolled student [in average daily
	attendance, plus $1 for each student in average daily attendance
	per every $50 by which the district's maximum basic allotment under
	Section 48.051 exceeds $6,160, prorated as necessary]; and
	(2) $15,000 per campus.
	ARTICLE 5. MENTAL HEALTH ALLOTMENT
	SECTION 5.01.  Section 48.115(b), Education Code, is amended
	to read as follows:
	(b)  Funds allocated under this section must be used to
	improve school safety and security, including costs associated
	with:
	(1)  securing school facilities, including:
	(A)  improvements to school
	infrastructure;
	(B)  the use or installation of
	physical barriers; and
	(C)  the purchase and maintenance of:
	(i)  security cameras or
	other security equipment; and
	(ii)  technology, including
	communications systems or devices, that
	facilitates communication and information sharing
	between students, school personnel, and first
	responders in an emergency;
	(2)  providing security for the district,
	including:
	(A)  employing school district peace
	officers, private security officers, and school
	marshals; and
	(B)  collaborating with local law
	enforcement agencies, such as entering into a
	memorandum of understanding for the assignment of
	school resource officers to schools in the district;
	and
	(3)  school safety and security training and
	planning, including:
	(A)  active shooter and emergency
	response training;
	(B)  prevention and treatment programs
	relating to addressing adverse childhood experiences;
	and
	(C)  the prevention, identification,
	and management of emergencies and threats, using
	evidence-based, effective prevention practices and
	including the establishment of [:
	(i)  providing licensed
	counselors, social workers, and individuals
	trained in restorative discipline and restorative
	justice practices;
	(ii)  providing mental
	health personnel and support;
	(iii)  providing behavioral
	health services;
	(iv)  establishing] threat
	reporting systems; and
	(v)  developing and
	implementing programs focused on restorative
	justice practices, culturally relevant
	instruction, and providing mental health support;
	and
	(4)  providing programs related to suicide
	prevention, intervention, and postvention].
	SECTION 5.02.  Subchapter C, Chapter 48, Education Code, is
	amended by adding Section 48.117 to read as follows:
	Sec. 48.117.  MENTAL HEALTH ALLOTMENT. (a) A school
	district is entitled to an annual allotment of $100,000 or a greater
	amount provided by appropriation to support mental health services
	at the district.
	(b)  In addition to the allotment under Subsection (a), a
	school district that receives an allotment under Section 48.101 or
	at which more than 50 percent of enrolled students are
	educationally disadvantaged is entitled to an allotment for each
	student enrolled in the district in an amount provided by
	appropriation.
	(c)  Funds allocated under this section:
	(1)  must be used to develop or enhance a comprehensive
	school mental health system that, through the implementation of
	programs, practices, and procedures in accordance with Section
	38.351, provides a tiered array of supports and services in the
	educational setting that contribute to:
	(A)  a positive school climate;
	(B)  the development of skills related to managing emotions,
	establishing and maintaining positive relationships, and
	responsible decision-making;
	(C)  the learning and well-being of students with or at risk
	of mental health or substance use conditions;
	(D)  family and community engagement;
	(E)  reduced exclusionary discipline practices; and
	(F)  staff wellness; and
	(2)  may be used to pay for costs associated with:
	(A)  the salary of school personnel responsible for
	planning, coordinating, delivering, or monitoring supports and
	services described by Subdivision (1);
	(B)  training school personnel regarding effective practices
	and district and campus procedures to support student mental
	health;
	(C)  a contract-based collaborative effort or partnership
	with one or more local community programs, agencies, or providers;
	and
	(D)  developing and implementing programs focused on
	restorative justice practices.
	(d)  Funds allocated for purposes of this section may not be
	used to supplant any other funds that may be provided for the same
	purpose.
	(e)  Not later than June 1 of each year and in accordance with
	commissioner rule, each school district shall submit to the
	commissioner information regarding the outcomes and expenditures
	related to funds allocated to the district under this section.
	(f)  Not later than September 1 of each year, the
	commissioner shall publish a report regarding the use of funds
	allocated under this section during the preceding school year,
	including information regarding the programs, personnel, and
	resources implemented, employed, or purchased by school districts
	using the funds and other purposes for which the funds were used.
	ARTICLE 6. PAID PARENTAL LEAVE ALLOTMENT
	SECTION 6.01.  Subchapter A, Chapter 22, Education Code, is
	amended by adding Section 22.0035 to read as follows:
	Sec. 22.0035.  PAID PARENTAL LEAVE POLICY. (a) Each school
	district or open-enrollment charter school shall adopt a paid
	parental leave policy under which a full-time employee of the
	district or school is entitled to paid parental leave following
	the:
	(1)  birth of a child;
	(2)  birth of a child by the employee's spouse;
	(3)  birth of a child by a gestational surrogate;
	or
	(4)  adoption of a child.
	(b)  A paid parental leave policy described by Subsection
	(a):
	(1)  must provide:
	(A)  eight consecutive weeks of paid
	parental leave for an employee who is the primary
	caregiver of the child; or
	(B)  four consecutive weeks of paid
	parental leave for an employee who is the spouse of the
	primary caregiver of the child;
	(2)  must require that:
	(A)  an employee be employed on a
	full-time basis by the school district or
	open-enrollment charter school for at least 12 months
	before becoming eligible for paid parental leave;
	(B)  an employee's eligibility for paid
	parental leave expires on the six-month anniversary of
	the date of the child's birth or placement with the
	employee; and
	(C)  an employee who has been granted
	paid parental leave under the policy take the leave
	concurrently with leave for which the employee is
	eligible under the federal Family and Medical Leave Act
	of 1993 (29 U.S.C. Section 2601 et seq.); and
	(3)  may not require an employee to first use all
	available and applicable paid vacation and sick leave before
	taking paid parental leave under the policy.
	(c)  Not later than November 1 of each even-numbered year,
	the agency shall prepare and submit to the legislature a report on
	paid parental leave provided under a policy required by this
	section. The report must include:
	(1)  the number of employees who took paid
	parental leave under a policy required by this section during
	the preceding two years, disaggregated by school district and
	open-enrollment charter school;
	(2)  the costs of providing paid parental leave
	under a policy required by this section during the preceding
	two years;
	(3)  projections regarding future participation
	in and costs of paid parental leave provided under a policy
	required by this section; and
	(4)  any recommendations for legislative or other
	action.
	SECTION 6.02.  Subchapter D, Chapter 48, Education Code, is
	amended by adding Section 48.158 to read as follows:
	Sec. 48.158.  HEALTHY FAMILIES ALLOTMENT. For each employee
	who received paid parental leave under a policy required by Section
	22.0035 during the preceding school year, a school district is
	entitled to an annual allotment equal to the amount of the
	employee's compensation for the period for which the employee
	received paid parental leave under that policy.
	SECTION 6.03.  As soon as practicable after the effective
	date of this Act and not later than September 1, 2024, the board of
	trustees of a school district or the governing body of an
	open-enrollment charter school shall adopt the paid parental leave
	policy required by Section 22.0035, Education Code, as added by
	this Act.
	ARTICLE 7. UNIVERSAL PRE-KINDERGARTEN
	SECTION 7.01.  Sections 29.153(a-1), (b), (c), (d), and (f),
	Education Code, are amended to read as follows:
	(a-1)  A district shall offer prekindergarten classes to any
	child [if the district identifies 15 or more children] who is [are
	eligible under Subsection (b) and are] at least four years of age.
	A school district may offer prekindergarten classes if the district
	identifies 15 or more [eligible] children who are eligible under
	Subsection (b)(1) [at least three years of age]. A district may not
	charge tuition for a prekindergarten class offered under this
	section.
	(b)  A child is eligible for enrollment in a prekindergarten
	class under this section if the child is:
	(1)  at least three years of age and:
	(A) [(1)]  is unable to speak and
	comprehend the English language;
	(B) [(2)]  is educationally
	disadvantaged;
	(C) [(3)]  is homeless, regardless of
	the residence of the child, of either parent of the
	child, or of the child's guardian or other person having
	lawful control of the child;
	(D) [(4)]  is the child of an active
	duty member of the armed forces of the United States,
	including the state military forces or a reserve
	component of the armed forces, who is ordered to active
	duty by proper authority;
	(E) [(5)]  is the child of a member of
	the armed forces of the United States, including the
	state military forces or a reserve component of the
	armed forces, who was injured or killed while serving on
	active duty;
	(F) [(6)]  is or ever has been in:
	(i) [(A)] the
	conservatorship of the Department of Family and
	Protective Services following an adversary
	hearing held as provided by Section 262.201,
	Family Code; or
	(ii) [(B)] foster care in
	another state or territory, if the child resides
	in this state; or
	(G) [(7)] is the child of a person
	eligible for the Star of Texas Award as:
	(i) [(A)]  a peace
	officer under Section 3106.002, Government
	Code;
	(ii) [(B)]  a firefighter
	under Section 3106.003, Government Code; or
	(iii) [(C)]  an emergency
	medical first responder under Section 3106.004,
	Government Code; or
	(2)  at least four years of age.
	(c)  A prekindergarten class under this section [may be
	operated on a half-day basis for children under four years of age
	and] shall be operated on a full-day basis [for children who are at
	least four years of age]. A district is not required to provide
	transportation for a prekindergarten class, but transportation, if
	provided, is included for funding purposes as part of the regular
	transportation system.
	(d)  Subject to Subsections (d-1) and (d-2), on application
	of a district, the commissioner shall exempt a district from the
	application of all or any part of this section, including all or any
	part of Subchapter E-1 for a prekindergarten class described by
	Subsection (c-1), if the commissioner determines that[:
	[(1)]  the district would be required to construct
	classroom facilities in order to provide prekindergarten
	classes[; or
	[(2)  implementing any part of this section would
	result in fewer eligible children being enrolled in a
	prekindergarten class under this section].
	(f)  A child who is eligible for enrollment in a
	prekindergarten class under Subsection (b)(1)(D) or (E) [(b)(4) or
	(5)] remains eligible for enrollment if the child's parent leaves
	the armed forces, or is no longer on active duty, after the child
	begins a prekindergarten class.
	SECTION 7.02.  Section 29.1531(a), Education Code, is
	amended to read as follows:
	(a)  A school district may offer on a tuition basis or use
	district funds to provide[:
	[(1)  an additional half-day of prekindergarten
	classes to children who are eligible for classes under
	Section 29.153 and are under four years of age; and
	[(2)]  half-day and full-day prekindergarten
	classes to children not eligible for classes under Section
	29.153.
	SECTION 7.03.  Section 29.1532(c), Education Code, is
	amended to read as follows:
	(c)  A school district that offers prekindergarten classes
	shall include the following information in the district's Public
	Education Information Management System (PEIMS) report:
	(1)  demographic information, as determined by
	the commissioner, on students enrolled in district and campus
	prekindergarten classes, including the number of students
	who are eligible for classes under Sections 29.153(b)(1) and
	(f) [Section 29.153];
	(2)  the numbers of half-day and full-day
	prekindergarten classes offered by the district and campus;
	(3)  the number of half-day prekindergarten
	classes for which the district has received an exemption from
	full-day operation under Section 29.153(d);
	(4)  the sources of funding for the
	prekindergarten classes;
	(5)  the class size and ratio of instructional
	staff to students for each prekindergarten program class
	offered by the district and campus;
	(6)  if the district elects to administer an
	assessment instrument under Section 29.169 to students
	enrolled in district and campus prekindergarten program
	classes, a description and the results of each type of
	assessment instrument; and
	(7)  curricula used in the district's
	prekindergarten program classes.
	ARTICLE 8. EFFECTIVE DATE
	SECTION 8.01.  This Act takes effect immediately if it
	receives a vote of two-thirds of all the members elected to each
	house, as provided by Section 39, Article III, Texas Constitution.
	If this Act does not receive the vote necessary for immediate
	effect, this Act takes effect February 1, 2024.
	SECTION 8.02.  This Act applies beginning with the 2024-2025
	school year.