85R6487 CAE-F     By: Taylor of Galveston S.B. No. 2145       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.  FOUNDATION SCHOOL PROGRAM          SECTION 1.01.  The heading to Chapter 41, Education Code, is   amended to read as follows:   CHAPTER 41. FOUNDATION SCHOOL PROGRAM ADMINISTRATION [EQUALIZED   WEALTH LEVEL]          SECTION 1.02.  Section 41.001, Education Code, is amended to   read as follows:          Sec. 41.001.  DEFINITION [DEFINITIONS]. In this chapter,   weighted[:                [(1)     "Equalized wealth level" means the wealth per   student provided by Section 41.002.                [(2)     "Wealth per student" means the taxable value of   property, as determined under Subchapter M, Chapter 403, Government   Code, divided by the number of students in weighted average daily   attendance.                [(3)  "Weighted] average daily attendance" has the   meaning assigned by Section 42.302.          SECTION 1.03.  Section 42.004, Education Code, is   transferred to Subchapter A, Chapter 41, Education Code,   redesignated as Section 41.002, Education Code, and amended to read   as follows:          Sec. 41.002 [42.004].  ADMINISTRATION OF THE PROGRAM. (a)   The commissioner, in accordance with the rules of the State Board of   Education, shall take such action and require such reports   consistent with this chapter as may be necessary to implement and   administer the Foundation School Program.          (b)  Except as provided by Subsection (c), the commissioner   may adopt rules as necessary to implement this chapter.          (c)  The commissioner may not adopt any rule that allows a   district to retain state and local revenue under Sections   42.253(a)(2) and (3) in excess of the amount of the district's   entitlement under Section 42.253(a)(1).          SECTION 1.04.  Section 42.003, Education Code, is   transferred to Subchapter A, Chapter 41, Education Code, and   redesignated as Section 41.003, Education Code, to read as follows:          Sec. 41.003 [42.003].  STUDENT ELIGIBILITY. (a) A student   is entitled to the benefits of the Foundation School Program if, on   September 1 of the school year, the student:                (1)  is 5 years of age or older and under 21 years of age   and has not graduated from high school, or is at least 21 years of   age and under 26 years of age and has been admitted by a school   district to complete the requirements for a high school diploma; or                (2)  is at least 19 years of age and under 26 years of   age and is enrolled in an adult high school diploma and industry   certification charter school pilot program under Section 29.259.          (b)  A student to whom Subsection (a) does not apply is   entitled to the benefits of the Foundation School Program if the   student is enrolled in a prekindergarten class under Section 29.153   or Subchapter E-1, Chapter 29.          (c)  A child may be enrolled in the first grade if the child   is at least six years of age at the beginning of the school year of   the district or has been enrolled in the first grade or has   completed kindergarten in the public schools in another state   before transferring to a public school in this state.          (d)  Notwithstanding Subsection (a), a student younger than   five years of age is entitled to the benefits of the Foundation   School Program if:                (1)  the student performs satisfactorily on the   assessment instrument administered under Section 39.023(a) to   students in the third grade; and                (2)  the district has adopted a policy for admitting   students younger than five years of age.          SECTION 1.05.  Sections 42.005, 42.0051, 42.0052, 42.006,   and 42.007, Education Code, are transferred to Subchapter A,   Chapter 41, Education Code, redesignated as Sections 41.004,   41.005, 41.006, 41.007, and 41.008, Education Code, and amended to   read as follows:          Sec. 41.004 [42.005].  AVERAGE DAILY ATTENDANCE. (a) In   this chapter, average daily attendance is:                (1)  the quotient of the sum of attendance for each day   of the minimum number of days of instruction as described under   Section 25.081(a) divided by the minimum number of days of   instruction;                (2)  for a district that operates under a flexible year   program under Section 29.0821, the quotient of the sum of   attendance for each actual day of instruction as permitted by   Section 29.0821(b)(1) divided by the number of actual days of   instruction as permitted by Section 29.0821(b)(1); or                (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).          (b)  A school district that experiences a decline of two   percent or more in average daily attendance shall be funded on the   basis of:                (1)  the actual average daily attendance of the   preceding school year, if the decline is the result of the closing   or reduction in personnel of a military base; or                (2)  [subject to Subsection (e),] an average daily   attendance not to exceed 98 percent of the actual average daily   attendance of the preceding school year, if the decline is not the   result of the closing or reduction in personnel of a military base.          (c)  The commissioner shall adjust the average daily   attendance of a school district that has a significant percentage   of students who are migratory children as defined by 20 U.S.C.   Section 6399.          (d)  Except as provided by Section 41.005(e), the [The]   commissioner may adjust the average daily attendance of a school   district in which a disaster, flood, extreme weather condition,   fuel curtailment, or other calamity has a significant effect on the   district's attendance.          (e)  [For each school year, the commissioner shall adjust the   average daily attendance of school districts that are entitled to   funding on the basis of an adjusted average daily attendance under   Subsection (b)(2) so that:                [(1)     all districts are funded on the basis of the same   percentage of the preceding year's actual average daily attendance;   and                [(2)     the total cost to the state does not exceed the   amount specifically appropriated for that year for purposes of   Subsection (b)(2).          [(f)]  An open-enrollment charter school is not entitled to   funding based on an adjustment under Subsection (b)(2).          (f) [(g)]  If a student may receive course credit toward the   student's high school academic requirements and toward the   student's higher education academic requirements for a single   course, including a course provided under Section 28.009 by a   public institution of higher education, the time during which the   student attends the course shall be counted as part of the minimum   number of instructional hours required for a student to be   considered a full-time student in average daily attendance for   purposes of this section.          (g) [(h)]  Subject to rules adopted by the commissioner   under Section 41.006(b) [42.0052(b)], time that a student   participates in an off-campus instructional program approved under   Section 41.006(a) [42.0052(a)] shall be counted as part of the   minimum number of instructional hours required for a student to be   considered a full-time student in average daily attendance for   purposes of this section.          Sec. 41.005 [42.0051].  AVERAGE DAILY ATTENDANCE FOR   DISTRICTS IN DISASTER AREA. (a) From funds specifically   appropriated for the purpose or other funds available to the   commissioner for that purpose, the commissioner shall adjust the   average daily attendance of a school district all or part of which   is located in an area declared a disaster area by the governor under   Chapter 418, Government Code, if the district experiences a decline   in average daily attendance that is reasonably attributable to the   impact of the disaster.          (b)  The adjustment must be sufficient to ensure that the   district receives funding comparable to the funding that the   district would have received if the decline in average daily   attendance reasonably attributable to the impact of the disaster   had not occurred.          (c)  The commissioner shall make the adjustment required by   this section for the two-year period following the date of the   governor's initial proclamation or executive order declaring the   state of disaster.          (d)  Section 41.004(b)(2) [42.005(b)(2)] does not apply to a   district that receives an adjustment under this section.          (e)  A district that receives an adjustment under this   section may not receive any additional adjustment under Section   41.004(d) [42.005(d)] for the decline in average daily attendance   on which the adjustment under this section is based.          (f)  For purposes of this title, a district's adjusted   average daily attendance under this section is considered to be the   district's average daily attendance as determined under Section   41.004 [42.005].          Sec. 41.006 [42.0052].  OFF-CAMPUS PROGRAMS APPROVED FOR   PURPOSES OF AVERAGE DAILY ATTENDANCE. (a) The commissioner may,   based on criteria developed by the commissioner, approve   instructional programs provided off campus by an entity other than   a school district or open-enrollment charter school as a program in   which participation by a student of a district or charter school may   be counted for purposes of determining average daily attendance in   accordance with Section 41.004(g) [42.005(h)].          (b)  The commissioner shall adopt by rule verification and   reporting procedures concerning time spent by students   participating in instructional programs approved under Subsection   (a).          Sec. 41.007 [42.006].  PUBLIC EDUCATION INFORMATION   MANAGEMENT SYSTEM (PEIMS). (a) Each school district shall   participate in the Public Education Information Management System   (PEIMS) and shall provide through that system information required   for the administration of this chapter and of other appropriate   provisions of this code.          (b) [(a-1)]  The commissioner by rule shall require each   school district and open-enrollment charter school to report   through the Public Education Information Management System   information regarding the number of students enrolled in the   district or school who are identified as having dyslexia.  The   agency shall maintain the information provided in accordance with   this subsection.          (c) [(b)]  Each school district shall use a uniform   accounting system adopted by the commissioner for the data required   to be reported for the Public Education Information Management   System.          (d) [(c)]  Annually, the commissioner shall review the   Public Education Information Management System and shall repeal or   amend rules that require school districts to provide information   through the Public Education Information Management System that is   not necessary.  In reviewing and revising the Public Education   Information Management System, the commissioner shall develop   rules to ensure that the system:                (1)  provides useful, accurate, and timely information   on student demographics and academic performance, personnel, and   school district finances;                (2)  contains only the data necessary for the   legislature and the agency to perform their legally authorized   functions in overseeing the public education system; and                (3)  does not contain any information related to   instructional methods, except as provided by Section 29.066 or   required by federal law.          (e) [(d)]  The commissioner's rules must ensure that the   Public Education Information Management System links student   performance data to other related information for purposes of   efficient and effective allocation of scarce school resources, to   the extent practicable using existing agency resources and   appropriations.          Sec. 41.008 [42.007].  EQUALIZED FUNDING ELEMENTS. (a) The   Legislative Budget Board shall adopt rules, subject to appropriate   notice and opportunity for public comment, for the calculation for   each year of a biennium of the qualified funding elements, in   accordance with Subsection (c), necessary to achieve the state   policy under Section 42.001.          (b)  Before each regular session of the legislature, the   board shall, as determined by the board, report the equalized   funding elements to the commissioner and the legislature.          (c)  The funding elements must include:                (1)  a basic allotment for the purposes of Section   42.101 that[, when combined with the guaranteed yield component   provided by Subchapter F,] represents the cost per student of a   regular education program that meets all mandates of law and   regulation;                (2)  adjustments designed to reflect the variation in   known resource costs and costs of education beyond the control of   school districts;                (3)  appropriate program cost differentials and other   funding elements for the programs authorized under Subchapter C,   Chapter 42, with the program funding level expressed as dollar   amounts and as weights applied to the adjusted [basic] allotment   for the appropriate year;                (4)  [the maximum guaranteed level of qualified state   and local funds per student for the purposes of Subchapter F;                [(5)     the enrichment and facilities tax rate under   Subchapter F;                [(6)]  the computation of students in weighted average   daily attendance under Section 42.302; and                (5) [(7)]  the amount to be appropriated for the school   facilities assistance program under Chapter 46.          SECTION 1.06.  Sections 41.003 and 41.004, Education Code,   are redesignated as Sections 41.009 and 41.010, Education Code, and   amended to read as follows:          Sec. 41.009 [41.003].  OPTIONS TO ENSURE EFFICIENCY OF   FOUNDATION SCHOOL PROGRAM [ACHIEVE EQUALIZED WEALTH LEVEL]. A   district to which Section 42.254(a) applies [with a wealth per   student that exceeds the equalized wealth level] may take any   combination of the following actions to comply with the   requirements of Section 42.254 [achieve the equalized wealth   level]:                (1)  consolidation with another district as provided by   Subchapter B;                (2)  detachment of territory as provided by Subchapter   C;                (3)  payment to the state for the efficiency of the   Foundation School Program [purchase of average daily attendance   credit] as provided by Subchapter D; or                (4)  [education of nonresident students as provided by   Subchapter E; or                [(5)]  tax base consolidation with another district as   provided by Subchapter F.          Sec. 41.010 [41.004].  DETERMINATION OF FUNDING LEVELS    [ANNUAL REVIEW OF PROPERTY WEALTH]. (a) Not later than July 1 of   each year, the commissioner shall determine the estimated amount of   state and local funding for each school district for the following   school year under Section 42.253.          (b)  Not later than July 15 of each year, [using the estimate   of enrollment under Section 42.254,] the commissioner shall review   the estimated entitlements and local revenue [wealth per student]   of school districts in the state and shall notify:                (1)  each district to which Section 42.254(a) applies   [with wealth per student exceeding the equalized wealth level];                (2)  each district to which the commissioner proposes   to annex property detached from a district notified under   Subdivision (1), if necessary, under Subchapter G; and                (3)  each district to which the commissioner proposes   to consolidate a district notified under Subdivision (1), if   necessary, under Subchapter H.          (c) [(b)]  If, before the dates provided by this subsection,   a district notified under Subsection (b)(1) [(a)(1)] has not   successfully exercised one or more options under Section 41.009 to   comply with Section 42.254(a) [41.003 that reduce the district's   wealth per student to a level equal to or less than the equalized   wealth level], the commissioner shall order the detachment of   property from that district as provided by Subchapter G. If that   detachment will not bring the district into full compliance with   Section 42.254(a) [reduce the district's wealth per student to a   level equal to or less than the equalized wealth level], the   commissioner may not detach property under Subchapter G but shall   order the consolidation of the district with one or more other   districts as provided by Subchapter H. An agreement under Section   41.009(1) or (2) [41.003(1) or (2)] must be executed not later than   September 1 immediately following the notice under Subsection (b)   [(a)]. An election for an option under Section 41.009(3) or (4)   [41.003(3), (4), or (5)] must be ordered before September 1   immediately following the notice under Subsection (b) [(a)].          (d) [(c)]  A district notified under Subsection (b) [(a)]   may not adopt a tax rate for the tax year in which the district   receives the notice until the commissioner certifies that the   district is in compliance with Section 42.254(a) [has achieved the   equalized wealth level].          (e) [(d)]  A detachment and annexation or consolidation   under this chapter:                (1)  is effective for Foundation School Program funding   purposes for the school year that begins in the calendar year in   which the detachment and annexation or consolidation is agreed to   or ordered; and                (2)  applies to the ad valorem taxation of property   beginning with the tax year in which the agreement or order is   effective.          SECTION 1.07.  Section 41.005, Education Code, is   redesignated as Section 41.011, Education Code, to read as follows:          Sec. 41.011 [41.005].  COMPTROLLER AND APPRAISAL DISTRICT   COOPERATION. The chief appraiser of each appraisal district and   the comptroller shall cooperate with the commissioner and school   districts in implementing this chapter.          SECTION 1.08.  Sections 41.007, 41.008, and 41.009,   Education Code, are redesignated as Sections 41.012, 41.013, and   41.014, Education Code, and amended to read as follows:          Sec. 41.012 [41.007].  COMMISSIONER TO APPROVE SUBSEQUENT   BOUNDARY CHANGES. A school district that is involved in an action   under this chapter that results in boundary changes to the district   or in the consolidation of tax bases is subject to consolidation,   detachment, or annexation under Chapter 13 only if the commissioner   certifies that the change under Chapter 13 will not result in a   district to which Section 42.254(a) applies [with a wealth per   student that exceeds the equalized wealth level].          Sec. 41.013 [41.008].  HOMESTEAD EXEMPTIONS. (a) The   governing board of a school district that results from   consolidation under this chapter, including a consolidated taxing   district under Subchapter F, for the tax year in which the   consolidation occurs may determine whether to adopt a homestead   exemption provided by Section 11.13, Tax Code, and may set the   amount of the exemption, if adopted, at any time before the school   district adopts a tax rate for that tax year. This section applies   only to an exemption that the governing board of a school district   is authorized to adopt or change in amount under Section 11.13, Tax   Code.          (b)  This section prevails over any inconsistent provision   of Section 11.13, Tax Code, or other law.          Sec. 41.014 [41.009].  TAX ABATEMENTS. (a) A tax abatement   agreement executed by a school district that is involved in   consolidation or in detachment and annexation of territory under   this chapter is not affected and applies to the taxation of the   property covered by the agreement as if executed by the district   within which the property is included.          (b)  The commissioner shall determine the taxable value   [wealth per student] of a school district under this chapter as if   any tax abatement agreement executed by a school district on or   after May 31, 1993, had not been executed.          SECTION 1.09.  Section 41.010, Education Code, is   redesignated as Section 41.015, Education Code, to read as follows:          Sec. 41.015 [41.010].  TAX INCREMENT OBLIGATIONS. The   payment of tax increments under Chapter 311, Tax Code, is not   affected by the consolidation of territory or tax bases or by   annexation under this chapter. In each tax year a school district   paying a tax increment from taxes on property over which the   district has assumed taxing power is entitled to retain the same   percentage of the tax increment from that property that the   district in which the property was located before the consolidation   or annexation could have retained for the respective tax year.          SECTION 1.10.  Section 41.011, Education Code, is   redesignated as Section 41.016, Education Code, and amended to read   as follows:          Sec. 41.016 [41.011].  CONTINGENCY. (a) If any of the   options described by Section 41.009 [41.003] as applied to a school   district are held invalid by a final decision of a court of   competent jurisdiction, a school district is entitled to exercise   any of the remaining valid options in accordance with a schedule   approved by the commissioner.          (b)  If a final order of a court of competent jurisdiction   should hold each of the options provided by Section 41.009 [41.003]   invalid, the commissioner shall act under Subchapter G or H to   achieve compliance with Section 42.254(a) [the equalized wealth   level] only after notice and hearing is afforded to each school   district affected by the order. The commissioner shall adopt a plan   that least disrupts the affected school districts. If because the   exigency to adopt a plan prevents the commissioner from giving a   reasonable time for notice and hearing, the commissioner shall   timely give notice to and hold a hearing for the affected school   districts, but in no event less than 30 days from time of notice to   the date of hearing.          (c)  If a final order of a court of competent jurisdiction   should hold an option provided by Section 41.009 [41.003] invalid   and order a refund to a district of any amounts paid by a district   choosing that option, the amount shall be refunded but held in   reserve and not expended by the district until released by order of   the commissioner. The commissioner shall order the release   immediately on the commissioner's determination that, through one   of the means provided by law, the district has achieved compliance   with Section 42.254(a) [the equalized wealth level]. The amount   released shall be deducted from any state aid payable to the   district according to a schedule adopted by the commissioner.          SECTION 1.11.  Section 41.012, Education Code, is   redesignated as Section 41.017, Education Code, to read as follows:          Sec. 41.017 [41.012].  DATE OF ELECTIONS. An election under   this chapter for voter approval of an agreement entered by the board   of trustees shall be held on a Tuesday or Saturday not more than 45   days after the date of the agreement. Section 41.001, Election   Code, does not apply to the election.          SECTION 1.12.  Section 41.013, Education Code, is   redesignated as Section 41.018, Education Code, and amended to read   as follows:          Sec. 41.018 [41.013].  PROCEDURE. (a) Except as provided   by Subchapter G, a decision of the commissioner under this chapter   is appealable under Section 7.057.          (b)  Any order of the commissioner issued under this chapter   shall be given immediate effect and may not be stayed or enjoined   pending any appeal.          (c)  Chapter 2001, Government Code, does not apply to a   decision of the commissioner under this chapter.          (d)  On the request of the commissioner, the secretary of   state shall publish any rules adopted under this chapter in the   Texas Register and the Texas Administrative Code.          SECTION 1.13.  Section 41.031, Education Code, is amended to   read as follows:          Sec. 41.031.  AGREEMENT. The governing boards of any two or   more school districts may consolidate the districts by agreement in   accordance with this subchapter to establish a consolidated   district to which Section 42.254(a) does not apply [with a wealth   per student equal to or less than the equalized wealth level]. The   agreement is not effective unless the commissioner certifies that   Section 42.254(a) does not apply to the consolidated district[,] as   a result of actions taken under this chapter[, will have a wealth   per student equal to or less than the equalized wealth level].          SECTION 1.14.  Sections 41.034(a) and (c), Education Code,   are amended to read as follows:          (a)  For the first and second school years after creation of   a consolidated district under this subchapter, the commissioner   shall adjust allotments to the consolidated district to the extent   necessary to preserve the effects of an adjustment under Section   42.102, 42.103, or 42.104 [42.105] to which either of the   consolidating districts would have been entitled but for the   consolidation.          (c)  Four or more districts that consolidate into one   district under this subchapter within a period of one year may elect   to receive incentive aid under this section or to receive incentive   aid for not more than five years under Subchapter G, Chapter 13.   [Incentive aid under this subsection may not provide the   consolidated district with more revenue in state and local funds   than the district would receive at the equalized wealth level.]          SECTION 1.15.  Section 41.061, Education Code, is amended to   read as follows:          Sec. 41.061.  AGREEMENT. (a) By agreement of the governing   boards of two school districts, territory may be detached from one   of the districts and annexed to the other district if[,] after the   action Section 42.254(a) does not apply to [:                [(1)]  the [wealth per student of the] district from   which territory is detached or [is equal to or less than the   equalized wealth level; and                [(2)]  the [wealth per student of the] district to   which territory is annexed [is not greater than the greatest level   for which funds are provided under Subchapter F, Chapter 42].          (b)  The agreement is not effective unless the commissioner   certifies that, after all actions taken under this chapter, Section   42.254(a) does not apply to [the wealth per student of] each   district involved [will be equal to or less than the applicable   level permitted by Subsection (a)].          SECTION 1.16.  The heading to Subchapter D, Chapter 41,   Education Code, is amended to read as follows:   SUBCHAPTER D. PAYMENT TO STATE FOR EFFICIENCY OF FOUNDATION SCHOOL   PROGRAM [PURCHASE OF ATTENDANCE CREDIT]          SECTION 1.17.  Section 41.091, Education Code, is amended to   read as follows:          Sec. 41.091.  AGREEMENT. A school district to which Section   42.254(a) applies [with a wealth per student that exceeds the   equalized wealth level] may execute an agreement with the   commissioner to make payments to the state or have deductions made   to funds owed by the state to the district [purchase attendance   credits] in an amount sufficient to comply with the requirements of   Section 42.254[, in combination with any other actions taken under   this chapter, to reduce the district's wealth per student to a level   that is equal to or less than the equalized wealth level].          SECTION 1.18.  Sections 41.093(a) and (c), Education Code,   are amended to read as follows:          (a)  The [Subject to Subsection (b-1), the cost of each   credit is an] amount of payments made by a district or funds   withheld from a district as provided by Section 41.091 must be at   least equal to the amount by which the district's total revenue   under Sections 42.253(a)(2) and (3) exceeds the district's   entitlement under Section 42.253(a)(1) [greater of:                [(1)     the amount of the district's maintenance and   operations tax revenue per student in weighted average daily   attendance for the school year for which the contract is executed;   or                [(2)     the amount of the statewide district average of   maintenance and operations tax revenue per student in weighted   average daily attendance for the school year preceding the school   year for which the contract is executed].          (c)  The amount of maintenance and operations tax revenue   [cost of an attendance credit] for a school district is computed   using the final tax collections of the district.          SECTION 1.19.  Section 41.094(a), Education Code, is amended   to read as follows:          (a)  If a [A] school district agrees to make payments to the   state under this subchapter, the payments shall be made [pay for   credits purchased] in equal monthly installments [payments] as   determined by the commissioner beginning February 15 and ending   August 15 of the school year for which the agreement is in effect.          SECTION 1.20.  Section 41.095, Education Code, is amended to   read as follows:          Sec. 41.095.  DURATION. An agreement under this subchapter   [section] is valid for one school year and, subject to Section   41.096, may be renewed annually.          SECTION 1.21.  Section 41.096(b), Education Code, is amended   to read as follows:          (b)  The ballot shall be printed to permit voting for or   against the proposition: "Authorizing the board of trustees of   ________ School District to make payments to [purchase attendance   credits from] the state with local tax revenues to prevent   detachment of property within the district or consolidation of the   district by the commissioner for the efficiency of the state   education system."          SECTION 1.22.  The heading to Section 41.097, Education   Code, is amended to read as follows:          Sec. 41.097.  PAYMENT [CREDIT] FOR APPRAISAL COSTS.          SECTION 1.23.  Section 41.097(a), Education Code, is amended   to read as follows:          (a)  Using funds received from a school district [The total   amount required under Section 41.093 for a district to purchase   attendance credits] under this subchapter for any school year, the   state shall pay to the appraisal district or districts in which the   school district participates [is reduced by] an amount equal to the   product of the school district's total costs under Section 6.06,   Tax Code, for the appraisal district or districts in which it   participates multiplied by a percentage that is computed by   dividing the total amount required under Section 41.093 by the   total amount of taxes imposed by [in] the district for that year on   property in the appraisal district, less any amounts paid into a tax   increment fund under Chapter 311, Tax Code.          SECTION 1.24.  Section 41.151, Education Code, is amended to   read as follows:          Sec. 41.151.  AGREEMENT. The board of trustees of two or   more school districts may execute an agreement to conduct an   election on the creation of a consolidated taxing district for the   maintenance and operation of the component school districts. The   agreement is subject to approval by the commissioner. The   agreement is not effective unless the commissioner certifies that   Section 42.254(a) does not apply to the consolidated taxing   district [will have a wealth per student equal to or less than the   equalized wealth level] after all actions taken under this chapter.          SECTION 1.25.  Section 41.202(a), Education Code, is amended   to read as follows:          (a)  For purposes of this subchapter, the taxable value of an   individual parcel or other item of property and the total taxable   value of property in a school district resulting from the   detachment of property from or annexation of property to that   district is determined by applying the appraisal ratio for the   appropriate category of property determined under Subchapter M,   Chapter 403, Government Code, for the current [preceding] tax year   to the taxable value of the detached or annexed property determined   under Title 1, Tax Code, for the current [preceding] tax year.          SECTION 1.26.  Section 41.205, Education Code, is amended to   read as follows:          Sec. 41.205.  DETACHMENT OF PROPERTY. (a) The commissioner   shall detach property under this section from each school district   from which the commissioner is required under Section 41.010   [41.004] to detach property under this subchapter.          (b)  The commissioner shall detach from each school district   covered by Subsection (a) one or more whole parcels or items of   property in descending order of the taxable value of each parcel or   item, beginning with the parcel or item having the greatest taxable   value, until Section 42.254(a) does not apply to the school   district [district's wealth per student is equal to or less than the   equalized wealth level, except as otherwise provided by Subsection   (c)].          (c)  [If the detachment of whole parcels or items of   property, as provided by Subsection (a) would result in a   district's wealth per student that is less than the equalized   wealth level by more than $10,000, 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 wealth per   student that is equal to or less than the equalized wealth level by   not more than $10,000.          [(d)]  Notwithstanding Subsections (a) and[,] (b), [and   (c),] the commissioner may detach only a portion of a parcel or item   of property if[:                [(1)     it is not possible to reduce the district's wealth   per student to a level that is equal to or less than the equalized   wealth level under this subchapter unless some or all of the parcel   or item of property is detached and the detachment of the whole   parcel or item would result in the district from which it is   detached having a wealth per student that is less than the equalized   wealth level by more than $10,000; 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 1.27.  Sections 41.206(a) and (c), Education Code,   are amended to read as follows:          (a)  The commissioner shall annex property detached under   Section 41.205 to school districts eligible for annexation in   accordance with this section. A school district is eligible for   annexation of property to it under this subchapter only if, after   [before] any detachments or annexations are made in a year, Section   42.254(a) does not apply to the district [district's wealth per   student is less than the greatest level for which funds are provided   under Subchapter F, Chapter 42].          (c)  The commissioner shall adopt rules on the detachment and   annexation of property, subject to Section 41.002(c) [annex   property detached from school districts beginning with the property   detached from the school district with the greatest wealth per   student before detachment, and continuing with the property   detached from each other school district in descending order of the   district's wealth per student before detachment].          SECTION 1.28.  Section 41.211, Education Code, is amended to   read as follows:          Sec. 41.211.  STUDENT ATTENDANCE. A student who is a   resident of real property detached from a school district may   choose to attend school in that district or in the district to which   the property is annexed. For purposes of determining average daily   attendance under Section 41.004 [42.005], the student shall be   counted in the district [to which the property is annexed. If the   student chooses to attend school in the district from which the   property is detached, the state shall withhold any foundation   school funds from the district to which the property is annexed and   shall allocate to the district] in which the student attends [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 1.29.  Section 41.251, Education Code, is amended to   read as follows:          Sec. 41.251.  COMMISSIONER ORDER. If the commissioner is   required under Section 41.010 [41.004] to order the consolidation   of districts, the consolidation is governed by this subchapter.   The commissioner's order shall be effective on a date determined by   the commissioner, but not later than the earliest practicable date   after November 8.          SECTION 1.30.  Sections 41.252 and 41.257, Education Code,   are amended to read as follows:          Sec. 41.252.  SELECTION CRITERIA. (a) The commissioner   shall adopt rules for the selection of [In selecting] the districts   to be consolidated with a district to which Section 42.254(a)   applies [that has a property wealth greater than the equalized   wealth level, the commissioner shall select one or more districts   with a wealth per student that, when consolidated, will result in a   consolidated district with a wealth per student equal to or less   than the equalized wealth level. In achieving that result, the   commissioner shall give priority to school districts in the   following order:                [(1)     first, to the contiguous district that has the   lowest wealth per student and is located in the same county;                [(2)     second, to the district that has the lowest   wealth per student and is located in the same county;                [(3)     third, to a contiguous district with a property   wealth below the equalized wealth level that has requested the   commissioner that it be considered in a consolidation plan;                [(4)     fourth, to include as few districts as possible   that fall below the equalized wealth level within the consolidation   order that have not requested the commissioner to be included;                [(5)     fifth, to the district that has the lowest wealth   per student and is located in the same regional education service   center area; and                [(6)     sixth, to a district that has a tax rate similar   to that of the district that has a property wealth greater than the   equalized wealth level].          (b)  The rules adopted by the commissioner under Subsection   (a):                (1)  may not result in [select] a district to which   Section 42.254(a) applies; and                (2)  must be in compliance with Section 41.002(c) [that   has been created as a result of consolidation by agreement under   Subchapter B to be consolidated under this subchapter with a   district that has a property wealth greater than the equalized   wealth level].          Sec. 41.257.  APPLICATION OF SMALL AND SPARSE ADJUSTMENTS   AND TRANSPORTATION ALLOTMENT. The budget of the consolidated   district must apply the benefit of the adjustment or allotment to   the schools of the consolidating district to which Section 42.103,   42.104 [42.105], or 42.201 [42.155] would have applied in the event   that the consolidated district still qualifies as a small or sparse   district.          SECTION 1.31.  Chapter 41, Education Code, is amended by   adding Subchapter I and adding a subchapter heading to read as   follows:   SUBCHAPTER I. RULES FOR DISTRICT COST ADJUSTMENTS          SECTION 1.32.  Section 42.102(b), Education Code, is   transferred to Subchapter I, Chapter 41, Education Code, as added   by this Act, redesignated as Section 41.301, Education Code, and   amended to read as follows:          Sec. 41.301.  COST OF EDUCATION INDEX ADJUSTMENT. (a) [(b)]   The commissioner shall determine the revised cost of education   adjustment for each school district. In determining the revised   cost of education adjustment, the commissioner shall use [is] the   cost of education index adjustment adopted by the foundation school   fund budget committee and contained in Chapter 203, Title 19, Texas   Administrative Code, as that chapter existed on March 26, 1997,   adjusted in the manner provided by Section 203.25, Title 19, Texas   Administrative Code.          (b)  The commissioner shall determine the adjusted allotment   for each school district under Section 42.102 by multiplying the   value of the cost of education adjustment for the school district by   the basic allotment determined under Section 42.101.          SECTION 1.33.  Section 42.105, Education Code, is   transferred to Subchapter I, Chapter 41, Education Code, as added   by this Act, redesignated as Section 41.302, Education Code, and   amended to read as follows:          Sec. 41.302 [42.105].  SPARSITY ADJUSTMENT. (a)   Notwithstanding Sections 42.101, 42.102, and 42.103, a school   district that has fewer than 130 students in average daily   attendance shall be provided an adjusted [basic] allotment on the   basis of 130 students in average daily attendance if it offers a   kindergarten through grade 12 program and has preceding or current   year's average daily attendance of at least 90 students or is 30   miles or more by bus route from the nearest high school district. A   district offering a kindergarten through grade 8 program whose   preceding or current year's average daily attendance was at least   50 students or which is 30 miles or more by bus route from the   nearest high school district shall be provided an adjusted [basic]   allotment on the basis of 75 students in average daily attendance.   An average daily attendance of 60 students shall be the basis of   providing the adjusted [basic] allotment if a district offers a   kindergarten through grade 6 program and has preceding or current   year's average daily attendance of at least 40 students or is 30   miles or more by bus route from the nearest high school district.          (b)  Subsection (c) applies only to a school district that:                (1)  does not offer each grade level from kindergarten   through grade 12 and whose prospective or former students generally   attend school in a state that borders this state for the grade   levels the district does not offer;                (2)  serves both students residing in this state and   students residing in a state that borders this state who are   subsequently eligible for in-state tuition rates at institutions of   higher education in either state regardless of the state in which   the students reside; and                (3)  shares students with an out-of-state district that   does not offer competing instructional services.          (c)  Notwithstanding Subsection (a) or Sections 42.101,   42.102, and 42.103, a school district to which this subsection   applies, as provided by Subsection (b), that has fewer than 130   students in average daily attendance shall be provided an adjusted   [basic] allotment on the basis of 130 students in average daily   attendance if it offers a kindergarten through grade four program   and has preceding or current year's average daily attendance of at   least 75 students or is 30 miles or more by bus route from the   nearest high school district.          SECTION 1.34.  Chapter 41, Education Code, is amended by   adding Subchapter J and adding a subchapter heading to read as   follows:   SUBCHAPTER J. RULES FOR SPECIAL PROGRAMS AND ALLOTMENTS          SECTION 1.35.  Sections 42.151(c), (d), (e), (g), (h), (i),   and (k), Education Code, are transferred to Subchapter J, Chapter   41, Education Code, as added by this Act, redesignated as Section   41.351, Education Code, and amended to read as follows:          Sec. 41.351.  RULES FOR SPECIAL EDUCATION ALLOTMENT. (a)   This section applies to Section 42.151.          (b) [(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.          (c) [(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.          (d) [(e)]  The State Board of Education by rule shall   prescribe the qualifications an instructional arrangement must   meet in order to be funded as a particular instructional   arrangement under Section 42.151 [this section]. In prescribing   the qualifications that a mainstream instructional arrangement   must meet, the board shall establish requirements that students   with disabilities and their teachers receive the direct, indirect,   and support services that are necessary to enrich the regular   classroom and enable student success.          (e) [(g)]  The State Board of Education shall adopt rules and   procedures governing contracts for residential placement of   special education students. The legislature shall provide by   appropriation for the state's share of the costs of those   placements.          (f) [(h)]  Funds allocated under Section 42.151 [this   section], other than an indirect cost allotment established under   State Board of Education rule, must be used in the special education   program under Subchapter A, Chapter 29.          (g) [(i)]  The agency shall encourage the placement of   students in special education programs, including students in   residential instructional arrangements, in the least restrictive   environment appropriate for their educational needs.          (h) [(k)]  A school district that provides an extended year   program required by federal law for special education students who   may regress is entitled to receive funds in an amount equal to 75   percent, or a lesser percentage determined by the commissioner, of   the adjusted [basic] allotment resulting from Section 42.102 or   42.103, as applicable, or adjusted allotment, as applicable, for   each full-time equivalent student in average daily attendance,   multiplied by the amount designated for the student's instructional   arrangement under this section, for each day the program is   provided divided by the number of days in the minimum school year.   The total amount of state funding for extended year services under   this section may not exceed $10 million per year. A school district   may use funds received under this subsection [section] only in   providing an extended year program.          SECTION 1.36.  Sections 42.152(c), (c-1), (c-2), (d), (q),   (q-1), (q-2), (q-3), (q-4), and (r), Education Code, are   transferred to Subchapter J, Chapter 41, Education Code, as added   by this Act, redesignated as Section 41.352, Education Code, and   amended to read as follows:          Sec. 41.352.  RULES FOR COMPENSATORY EDUCATION ALLOTMENT.   (a) This section applies to Section 42.152.          (b) [(c)]  Funds allocated under Section 42.152 [this   section] shall be used to fund supplemental programs and services   designed to eliminate any disparity in performance on assessment   instruments administered under Subchapter B, Chapter 39, or   disparity in the rates of high school completion between students   at risk of dropping out of school, as defined by Section 29.081, and   all other students. Specifically, the funds, other than an   indirect cost allotment established under State Board of Education   rule, which may not exceed 45 percent, may be used to meet the costs   of providing a compensatory, intensive, or accelerated instruction   program under Section 29.081 or a disciplinary alternative   education program established under Section 37.008, to pay the   costs associated with placing students in a juvenile justice   alternative education program established under Section 37.011, or   to support a program eligible under Title I of the Elementary and   Secondary Education Act of 1965, as provided by Pub. L. No. 103-382   and its subsequent amendments, and by federal regulations   implementing that Act, at a campus at which at least 40 percent of   the students are educationally disadvantaged. In meeting the costs   of providing a compensatory, intensive, or accelerated instruction   program under Section 29.081, a district's compensatory education   allotment shall be used for costs supplementary to the regular   education program, such as costs for program and student   evaluation, instructional materials and equipment and other   supplies required for quality instruction, supplemental staff   expenses, salary for teachers of at-risk students, smaller class   size, and individualized instruction. A home-rule school district   or an open-enrollment charter school must use funds allocated under   Section 42.152 [Subsection (a)] for a purpose authorized in this   subsection but is not otherwise subject to Subchapter C, Chapter   29. For purposes of this subsection, a program specifically   designed to serve students at risk of dropping out of school, as   defined by Section 29.081, is considered to be a program   supplemental to the regular education program, and a district may   use its compensatory education allotment for such a program.          (c) [(c-1)]  Notwithstanding Subsection (b) [(c)], funds   allocated under Section 42.152 [this section] may be used to fund in   proportion to the percentage of students served by the program that   meet the criteria in Section 29.081(d) or (g):                (1)  an accelerated reading instruction program under   Section 28.006(g); or                (2)  a program for treatment of students who have   dyslexia or a related disorder as required by Section 38.003.          (d) [(c-2)]  Notwithstanding Subsection (b) [(c)], funds   allocated under Section 42.152 [this section] may be used to fund a   district's mentoring services program under Section 29.089.          (e) [(d)]  The agency shall evaluate the effectiveness of   accelerated instruction and support programs provided under   Section 29.081 for students at risk of dropping out of school.          (f) [(q)]  The State Board of Education, with the assistance   of the comptroller, shall develop and implement by rule reporting   and auditing systems for district and campus expenditures of   compensatory education funds to ensure that compensatory education   funds, other than the indirect cost allotment, are spent only to   supplement the regular education program as required by Subsection   (b) [(c)]. The reporting requirements shall be managed   electronically to minimize local administrative costs. A district   shall submit the report required by this subsection not later than   the 150th day after the last day permissible for resubmission of   information required under Section 41.007 [42.006].          (g) [(q-1)]  The commissioner shall develop a system to   identify school districts that are at high risk of having used   compensatory education funds other than in compliance with   Subsection (b) [(c)] or of having inadequately reported   compensatory education expenditures. If a review of the report   submitted under Subsection (f) [(q)], using the risk-based system,   indicates that a district is not at high risk of having misused   compensatory education funds or of having inadequately reported   compensatory education expenditures, the district may not be   required to perform a local audit of compensatory education   expenditures and is not subject to on-site monitoring under this   section.          (h) [(q-2)]  If a review of the report submitted under   Subsection (f) [(q)], using the risk-based system, indicates that a   district is at high risk of having misused compensatory education   funds, the commissioner shall notify the district of that   determination. The district must respond to the commissioner not   later than the 30th day after the date the commissioner notifies the   district of the commissioner's determination. If the district's   response does not change the commissioner's determination that the   district is at high risk of having misused compensatory education   funds or if the district does not respond in a timely manner, the   commissioner shall:                (1)  require the district to conduct a local audit of   compensatory education expenditures for the current or preceding   school year;                (2)  order agency staff to conduct on-site monitoring   of the district's compensatory education expenditures; or                (3)  both require a local audit and order on-site   monitoring.          (i) [(q-3)]  If a review of the report submitted under   Subsection (f) [(q)], using the risk-based system, indicates that a   district is at high risk of having inadequately reported   compensatory education expenditures, the commissioner may require   agency staff to assist the district in following the proper   reporting methods or amending a district or campus improvement plan   under Subchapter F, Chapter 11. If the district does not take   appropriate corrective action before the 45th day after the date   the agency staff notifies the district of the action the district is   expected to take, the commissioner may:                (1)  require the district to conduct a local audit of   the district's compensatory education expenditures; or                (2)  order agency staff to conduct on-site monitoring   of the district's compensatory education expenditures.          (j) [(q-4)]  The commissioner, in the year following a local   audit of compensatory education expenditures, shall withhold from a   district's foundation school fund payment an amount equal to the   amount of compensatory education funds the agency determines were   not used in compliance with Subsection (b) [(c)]. The commissioner   shall release to a district funds withheld under this subsection   when the district provides to the commissioner a detailed plan to   spend those funds in compliance with Subsection (b) [(c)].          (k) [(r)]  The commissioner shall grant a one-year exemption   from the requirements of Subsections (f)-(j) [(q)-(q-4)] to a   school district in which the group of students who have failed to   perform satisfactorily in the preceding school year on an   assessment instrument required under Section 39.023(a), (c), or (l)   subsequently performs on those assessment instruments at a level   that meets or exceeds a level prescribed by commissioner rule. Each   year the commissioner, based on the most recent information   available, shall determine if a school district is entitled to an   exemption for the following school year and notify the district of   that determination.          SECTION 1.37.  Sections 42.153(b) and (c), Education Code,   are transferred to Subchapter J, Chapter 41, Education Code, as   added by this Act, redesignated as Section 41.353, Education Code,   and amended to read as follows:          Sec. 41.353.  RULES FOR BILINGUAL EDUCATION ALLOTMENT. (a)   This section applies to Section 42.153.          (b)  Funds allocated under Section 42.153 [this section],   other than an indirect cost allotment established under State Board   of Education rule, must be used in providing bilingual education or   special language programs under Subchapter B, Chapter 29, and must   be accounted for under existing agency reporting and auditing   procedures.          (c)  A district's bilingual education or special language   allocation may be used only for program and student evaluation,   instructional materials and equipment, staff development,   supplemental staff expenses, salary supplements for teachers, and   other supplies required for quality instruction and smaller class   size.          SECTION 1.38.  Sections 42.154(c) and (d), Education Code,   are transferred to Subchapter J, Chapter 41, Education Code, as   added by this Act, redesignated as Section 41.354, Education Code,   and amended to read as follows:          Sec. 41.354.  RULES FOR CAREER AND TECHNOLOGY EDUCATION   ALLOTMENT. (a) This section applies to Section 42.154.          (b) [(c)]  Funds allocated under Section 42.154 [this   section], other than an indirect cost allotment established under   State Board of Education rule, must be used in providing career and   technology education programs in grades nine through 12 or career   and technology education programs for students with disabilities in   grades seven through 12 under Sections 29.182, 29.183, and 29.184.          (c) [(d)]  The commissioner shall conduct a cost-benefit   comparison between career and technology education programs and   mathematics and science programs.          SECTION 1.39.  Chapter 41, Education Code, is amended by   adding Subchapter K and adding a subchapter heading to read as   follows:   SUBCHAPTER K. RULES FOR TRANSPORTATION FUNDING          SECTION 1.40.  Sections 42.155(d), (e), (f), (g), (h), (i),   (k), and (l), Education Code, are transferred to Subchapter K,   Chapter 41, Education Code, as added by this Act, redesignated as   Section 41.401, Education Code, and amended to read as follows:          Sec. 41.401.  RULES FOR TRANSPORTATION ALLOTMENT. (a) This   section applies to Section 42.201.          (b) [(d)]  A district or county may apply for and on approval   of the commissioner receive an additional amount of up to 10 percent   of its regular transportation allotment to be used for the   transportation of children living within two miles of the school   they attend who would be subject to hazardous traffic conditions if   they walked to school. Each board of trustees shall provide to the   commissioner the definition of hazardous conditions applicable to   that district and shall identify the specific hazardous areas for   which the allocation is requested. A hazardous condition exists   where no walkway is provided and children must walk along or cross a   freeway or expressway, an underpass, an overpass or a bridge, an   uncontrolled major traffic artery, an industrial or commercial   area, or another comparable condition.          (c) [(e)]  The commissioner may grant an amount set by   appropriation for private or commercial transportation for   eligible students from isolated areas. The need for this type of   transportation grant shall be determined on an individual basis and   the amount granted shall not exceed the actual cost. The grants may   be made only in extreme hardship cases. A grant may not be made if   the students live within two miles of an approved school bus route.          (d) [(f)]  The cost of transporting career and technology   education students from one campus to another inside a district or   from a sending district to another secondary public school for a   career and technology program or an area career and technology   school or to an approved post-secondary institution under a   contract for instruction approved by the agency shall be reimbursed   based on the number of actual miles traveled times the district's   official extracurricular travel per mile rate as set by the board of   trustees and approved by the agency.          (e) [(g)]  A school district or county that provides special   transportation services for eligible special education students is   entitled to a state allocation paid on a previous year's   cost-per-mile basis. The maximum rate per mile allowable shall be   set by appropriation based on data gathered from the first year of   each preceding biennium. Districts may use a portion of their   support allocation to pay transportation costs, if necessary. The   commissioner may grant an amount set by appropriation for private   transportation to reimburse parents or their agents for   transporting eligible special education students. The mileage   allowed shall be computed along the shortest public road from the   student's home to school and back, morning and afternoon. The need   for this type transportation shall be determined on an individual   basis and shall be approved only in extreme hardship cases.          (f) [(h)]  Funds allotted under Section 42.201 or this   section must be used in providing transportation services.          (g) [(i)]  In the case of a district belonging to a county   transportation system, the district's transportation allotment for   purposes of determining a district's foundation school program   allocations is determined on the basis of the number of approved   daily route miles in the district multiplied by the allotment per   mile to which the county transportation system is entitled.          (h) [(k)]  Notwithstanding any other provision of Section   42.201 or this section, the commissioner may not reduce the   allotment to which a district or county is entitled under Section   42.201 [this section] because the district or county provides   transportation for an eligible student to and from a child-care   facility, as defined by Section 42.002, Human Resources Code, or a   grandparent's residence instead of the student's residence, as   authorized by Section 34.007, if the transportation is provided   within the approved routes of the district or county for the school   the student attends.          (i) [(l)]  A school district may, with the funds allotted   under Section 42.201 or this section, provide a bus pass or card for   another transportation system to each student who is eligible to   use the regular transportation system of the district but for whom   the regular transportation system of the district is not a feasible   method of providing transportation. The commissioner by rule shall   provide procedures for a school district to provide bus passes or   cards to students under this subsection.          SECTION 1.41.  Chapter 41, Education Code, is amended by   adding Subchapter L and adding a subchapter heading to read as   follows:   SUBCHAPTER L.  RULES FOR FINANCING FOUNDATION SCHOOL PROGRAM          SECTION 1.42.  Sections 42.2514 and 42.2515, Education Code,   are transferred to Subchapter L, Chapter 41, Education Code, as   added by this Act, redesignated as Sections 41.451 and 41.452,   Education Code, and amended to read as follows:          Sec. 41.451 [42.2514].  ADDITIONAL STATE AID FOR TAX   INCREMENT FINANCING PAYMENTS.  For each school year, a school   district's entitlement under Section 42.253(a)(1) [district,   including a school district that is otherwise ineligible for state   aid under this chapter,] is increased by [entitled to state aid in]   an amount equal to the amount the district is required to pay into   the tax increment fund for a reinvestment zone under Section   311.013(n), Tax Code.          Sec. 41.452 [42.2515].  ADDITIONAL STATE AID FOR AD VALOREM   TAX CREDITS UNDER TEXAS ECONOMIC DEVELOPMENT ACT. (a) For each   school year, a school district's entitlement under Section   42.253(a)(1) [district, including a school district that] is   increased by [otherwise ineligible for state aid under this   chapter, is entitled to state aid in] an amount equal to the amount   of all tax credits credited against ad valorem taxes of the district   in that year under former Subchapter D, Chapter 313, Tax Code.          (b)  The commissioner may adopt rules to implement and   administer this section.          SECTION 1.43.  Section 42.2524, Education Code, as effective   September 1, 2017, is transferred to Subchapter L, Chapter 41,   Education Code, as added by this Act, redesignated as Section   41.453, Education Code, and amended to read as follows:          Sec. 41.453 [42.2524].  REIMBURSEMENT FOR DISASTER   REMEDIATION COSTS. (a) This section applies only to a school   district all or part of which is located in an area declared a   disaster area by the governor under Chapter 418, Government Code,   and that incurs disaster remediation costs as a result of the   disaster.          (b)  During the two-year period following the date of the   governor's initial proclamation or executive order declaring a   state of disaster, a district may apply to the commissioner for   reimbursement of disaster remediation costs that the district pays   during that period and does not anticipate recovering through   insurance proceeds, federal disaster relief payments, or another   similar source of reimbursement.          (c)  [The commissioner may provide reimbursement under this   section only if funds are available for that purpose as follows:                [(1)     reimbursement for a school district not required   to take action under Chapter 41 may be provided from:                      [(A)     amounts appropriated for that purpose,   including amounts appropriated for those districts for that purpose   to the disaster contingency fund established under Section 418.073,   Government Code; or                      [(B)     Foundation School Program funds available   for that purpose, based on a determination by the commissioner that   the amount appropriated for the Foundation School Program,   including the facilities component as provided by Chapter 46,   exceeds the amount to which districts are entitled under this   chapter and Chapter 46; and                [(2)     reimbursement for a school district required to   take action under Chapter 41 may be provided from funds described by   Subdivision (1)(B) if funds remain available after fully   reimbursing each school district described by Subdivision (1) for   its disaster remediation costs.          [(d)     If the amount of money available for purposes of   reimbursing school districts not required to take action under   Chapter 41 is not sufficient to fully reimburse each district's   disaster remediation costs, the commissioner shall reduce the   amount of assistance provided to each of those   districts     proportionately.     If the amount of money available for   purposes of reimbursing school districts required to take action   under Chapter 41 is not sufficient to fully reimburse each   district's disaster remediation costs, the commissioner shall   reduce the amount of assistance provided to each of those districts   proportionately.          [(e)]  A district seeking reimbursement under this section   must provide the commissioner with adequate documentation of the   costs for which the district seeks reimbursement.          (d) [(f)     A district required to take action under Chapter   41:                [(1)     may, at its discretion, receive assistance   provided under this section either as a payment of state aid under   this chapter or as a reduction in the total amount required to be   paid by the district for attendance credits under Section 41.093;   and                [(2)     may not obtain reimbursement under this section   for the payment of any disaster remediation costs that resulted in a   reduction under Section 41.0931 of the district's cost of   attendance credits.          [(h)]  The commissioner shall adopt rules necessary to   implement this section, including rules defining "disaster   remediation costs" for purposes of this section and specifying the   type of documentation required under Subsection (c) [(e)].          (e) [(i)]  Notwithstanding any other provision of this   section, the commissioner may permit a district to use amounts   provided to a district under this section to pay the costs of   replacing a facility instead of repairing the facility.  The   commissioner shall ensure that a district that elects to replace a   facility does not receive an amount under this section that exceeds   the lesser of:                (1)  the amount that would be provided to the district   if the facility were repaired; or                (2)  the amount necessary to replace the facility.          (f) [(j)]  This section does not require the commissioner to   provide any requested reimbursement.  A decision of the   commissioner regarding reimbursement is final and may not be   appealed.          (g)  Payments under this section are considered part of a   school district's entitlement under Section 42.253(a)(1).          SECTION 1.44.  Sections 42.2525, 42.2526, and 42.2527,   Education Code, are transferred to Subchapter L, Chapter 41,   Education Code, as added by this Act, and redesignated as Sections   41.454, 41.455, and 41.456, Education Code, to read as follows:          Sec. 41.454 [42.2525].  ADJUSTMENTS FOR CERTAIN DISTRICTS   RECEIVING FEDERAL IMPACT AID.  The commissioner is granted the   authority to ensure that school districts receiving federal impact   aid due to the presence of a military installation or significant   concentrations of military students do not receive more than an   eight percent reduction should the federal government reduce   appropriations to those schools.          Sec. 41.455 [42.2526].  ADJUSTMENT FOR DISTRICT OPERATING   PILOT PROGRAM. (a) This section applies only to a school district   operating a pilot program authorized by Section 28.0255.          (b)  Beginning with the first school year that follows the   first school year in which students receive high school diplomas   under the pilot program authorized by Section 28.0255 and   continuing for every subsequent school year that the district   operates the pilot program, the commissioner shall provide funding   for the district's prekindergarten program under Section 29.153 on   a full-day basis for a number of prekindergarten students equal to   twice the number of students who received a high school diploma   under the pilot program authorized by Section 28.0255 during the   preceding school year.          (c)  This section expires September 1, 2023.          Sec. 41.456 [42.2527].  ADJUSTMENT FOR CERTAIN DISTRICTS   WITH EARLY HIGH SCHOOL GRADUATION PROGRAMS. (a) As a pilot program   to enable the state to evaluate the benefit of providing additional   funding at the prekindergarten level for low-income students, the   commissioner shall provide prekindergarten funding in accordance   with this section to a school district located in a county that   borders the United Mexican States and the Gulf of Mexico.          (b)  The commissioner shall provide funding for a school   district's prekindergarten program on a half-day basis for a number   of low-income prekindergarten students equal to twice the number of   students who received, as a result of participation in an early high   school graduation program operated by the district, a high school   diploma from the district during the preceding school year after   three years of secondary school attendance.          (c)  The commissioner may adopt rules necessary to implement   this section.          (d)  This section expires September 1, 2023.          SECTION 1.45.  Section 42.2528, Education Code, is   transferred to Subchapter L, Chapter 41, Education Code, as added   by this Act, redesignated as Section 41.457, Education Code, and   amended to read as follows:          Sec. 41.457 [42.2528].  EXCESS FUNDS FOR VIDEO SURVEILLANCE   OF SPECIAL EDUCATION SETTINGS. (a)  Notwithstanding any other   provision of law, if the commissioner determines that the amount   appropriated for the purposes of the Foundation School Program   exceeds the amount to which school districts are entitled under   Chapter 42 [this chapter], the commissioner by rule shall establish   a grant program through which excess funds are awarded as grants for   the purchase of video equipment, or for the reimbursement of costs   for previously purchased video equipment, used for monitoring   special education classrooms or other special education settings   required under Section 29.022.          (b)  In awarding grants under this section, the commissioner   shall give highest priority to districts with maintenance and   operations tax rates at the greatest rates permitted by law.  The   commissioner shall also give priority to:                (1)  districts with the [maintenance and operations tax   rates at least equal to the state maximum compressed tax rate, as   defined by Section 42.101(a), and] lowest amounts of maintenance   and operations tax revenue per weighted student; and                (2)  districts with debt service tax rates near or   equal to the greatest rates permitted by law.          (c)  The commissioner may adopt rules to implement and   administer this section.          SECTION 1.46.  Sections 42.253(d), (g), (i), (j), and (k),   Education Code, are transferred to Subchapter L, Chapter 41,   Education Code, as added by this Act, redesignated as Section   41.458, Education Code, and amended to read as follows:          Sec. 41.458.  RULES FOR DISTRIBUTION OF FOUNDATION SCHOOL   FUND. (a) This section applies to Section 42.253.          (b) [(d)]  The commissioner shall approve warrants to each   school district equaling the amount of its entitlement except as   provided by this section. Warrants for all money expended   according to Chapter 42 and this chapter shall be approved and   transmitted to treasurers or depositories of school districts in   the same manner that warrants for state payments are transmitted.   The total amount of the warrants issued under this section may not   exceed the total amount appropriated for Foundation School Program   purposes for that fiscal year.          (c) [(g)]  If a school district demonstrates to the   satisfaction of the commissioner that the estimate of the   district's tax rate, student enrollment, tax collections, or   taxable value of property used in determining the amount of state   funds to which the district is entitled are so inaccurate as to   result in undue financial hardship to the district, the   commissioner may adjust funding to that district in that school   year to the extent that funds are available for that year.          (e) [(i)]  Not later than March 1 each year, the commissioner   shall determine the actual amount of state funds to which each   school district is entitled under the allocation formulas in this   chapter and Chapter 42 for the current school year and shall compare   that amount with the amount of the warrants issued to each district   for that year. If the amount of the warrants differs from the   amount to which a district is entitled because of variations in the   district's tax rate, student enrollment, tax collections, or   taxable value of property, the commissioner shall adjust the   district's entitlement for the next fiscal year accordingly.          (f) [(j)]  The legislature may appropriate funds necessary   for increases under Subsection (e) [(i)] from funds that the   comptroller, at any time during the fiscal year, finds are   available.          (g) [(k)]  The commissioner shall compute for each school   district the total amount by which the district's allocation of   state funds is increased or reduced under Subsection (e) [(i)] and   shall certify that amount to the district.          SECTION 1.47.  Section 42.253(h), Education Code, as   effective September 1, 2017, is transferred to Subchapter L,   Chapter 41, Education Code, as added by this Act, redesignated as   Section 41.458(d), Education Code, and amended to read as follows:          (d) [(h)]  If the amount appropriated for the Foundation   School Program for the second year of a state fiscal biennium is   less than the amount to which school districts and open-enrollment   charter schools are entitled for that year, the commissioner shall   certify the amount of the difference to the Legislative Budget   Board not later than January 1 of the second year of the state   fiscal biennium. The Legislative Budget Board shall propose to the   legislature that the certified amount be transferred to the   foundation school fund from the economic stabilization fund and   appropriated for the purpose of increases in allocations under this   subsection. If the legislature fails during the regular session to   enact the proposed transfer and appropriation and there are not   funds available under Subsection (f) [(j)], the commissioner shall   adjust the total amounts due to each school district and   open-enrollment charter school under Chapter 42 and this chapter   and the total amounts necessary for each school district to comply   with the requirements of Section 42.254(a) [Chapter 41] by an   amount determined by applying to each district and school the same   percentage adjustment to the total amount of state and local   revenue due to the district or school under this chapter and Chapter   42 [41] so that the total amount of the adjustment to all districts   and schools results in an amount equal to the total adjustment   necessary. The following fiscal year:                (1)  a district's or school's entitlement under Section   42.253 [this section] is increased by an amount equal to the   adjustment  made under this subsection; and                (2)  the amount necessary for a district to comply with   the requirements of Section 42.254(a) [Chapter 41] is reduced by an   amount necessary to ensure a district's full recovery of the   adjustment made under this subsection.          SECTION 1.48.  Subchapter L, Chapter 41, Education Code, as   added by this Act, is amended by adding Sections 41.459, 41.460, and   41.461 to read as follows:          Sec. 41.459.  DELINQUENT MAINTENANCE AND OPERATIONS TAX   COLLECTION.  (a) If the collection of delinquent maintenance and   operations taxes of a district not previously required to take   action under Section 41.009 results in the district being subject   to Section 42.254(a) only for the year in which the delinquent taxes   are collected, the commissioner shall permit the district to take   action under this section in lieu of taking action under Section   41.009.          (b)  The district shall deposit the amount by which the   district's revenue under Sections 42.253(a)(2) and (3) exceeds the   district's entitlement under Section 42.253(a)(1) into a separate   account that may be used only as provided by this section.          (c)  For the school year following the year the deposit was   made as provided by Subsection (b), the commissioner shall reduce   the amount of state aid to which the district is entitled under this   chapter and Chapter 42 by an amount equal to the excess revenue in   the separate account and the district may withdraw the money from   the account to replace the reduction in state aid.          (d)  If the amount of state aid to which the district is   entitled under this chapter and Chapter 42 is less than the amount   in the separate account, the difference must remain in the separate   account and the commissioner will again reduce the district's state   aid in the subsequent school year.          (e)  If money remains in the separate account after three   school years, the remaining money in the account is considered part   of the district's revenue under Sections 42.253(a)(2) and (3) and   the district is subject to Section 42.254(a).          (f)  If at any time money remains in the separate account and   the commissioner makes a determination under Section 41.010 that   the district is subject to Section 42.254(a), the remaining money   in the separate account must be included in determining:                (1)  the amount the district is required to pay under   Section 41.009(3); or                (2)  whether the district has taken sufficient action   under Section 41.009(1), (2), or (4).          Sec. 41.460.  FAILURE TO COLLECT DELINQUENT MAINTENANCE AND   OPERATIONS TAXES. (a) If a district fails to collect a delinquent   maintenance and operations tax owed to the district for two years   after the year in which the tax is initially due, the collection of   the delinquent tax reverts to the state.          (b)  The comptroller shall collect the delinquent   maintenance and operations tax on behalf of the district, with   penalties and interest owed, at the earliest opportunity.          (c)  The attorney general shall assist the comptroller in the   collection of delinquent maintenance and operations taxes.          (d)  If the attorney general cannot successfully collect the   delinquent maintenance and operations tax, penalties, and interest   in the first year in which the obligation reverts to the state, the   comptroller may contract with private attorneys for collection in   subsequent years, subject to the terms and limitations that apply   to a school district contracting with private attorneys for that   purpose.          (e)  All taxes, penalties, and fees collected under this   section are included in the district's collections under Section   42.253(a)(3) in the year in which they are collected.          Sec. 41.461.  ESTIMATES REQUIRED. (a) Not later than   October 1 of each even-numbered year:                (1)  the agency shall submit to the legislature an   estimate of the tax rate and student enrollment of each school   district for the following biennium; and                (2)  the comptroller shall submit to the legislature an   estimate of the total taxable value of all property in the state as   determined under Subchapter M, Chapter 403, Government Code, for   the following biennium.          (b)  The agency and the comptroller shall update the   information provided to the legislature under Subsection (a) not   later than March 1 of each odd-numbered year.          SECTION 1.49.  Section 42.255, Education Code, is   transferred to Subchapter L, Chapter 41, Education Code, as added   by this Act, redesignated as Section 41.462, Education Code, and   amended to read as follows:          Sec. 41.462 [42.255].  FALSIFICATION OF RECORDS; REPORT.   When, in the opinion of the agency's director of school audits,   audits or reviews of accounting, enrollment, or other records of a   school district reveal deliberate falsification of the records, or   violation of the provisions of this chapter or Chapter 42, through   which the district's share of state funds allocated under the   authority of this chapter and Chapter 42 would be, or has been,   illegally increased, the director shall promptly and fully report   the fact to the State Board of Education, the state auditor, and the   appropriate county attorney, district attorney, or criminal   district attorney.          SECTION 1.50.  Section 42.259(g), Education Code, is   transferred to Subchapter L, Chapter 41, Education Code, as added   by this Act, redesignated as Section 41.463, Education Code, and   amended to read as follows:          Sec. 41.463.  FOUNDATION SCHOOL FUND TRANSFERS. (a) The   commissioner shall adopt rules regarding the timing of payments   from the foundation school fund to each school district and   open-enrollment charter school.          (b) [(g)]  The commissioner shall make all annual Foundation   School Program payments under this section for purposes described   by Sections 45.252(a)(1) and (2) before the deadline established   under Section 45.263(b) for payment of debt service on bonds.     Notwithstanding any other provision of this section, the   commissioner may make Foundation School Program payments under this   section after the deadline established under Section 45.263(b) only   if the commissioner has not received notice under Section 45.258   concerning a district's failure or inability to pay matured   principal or interest on bonds.          SECTION 1.51.  Chapter 41, Education Code, is amended by   adding Subchapter M and adding a subchapter heading to read as   follows:   SUBCHAPTER M. SCHOOL FACILITIES INVENTORY AND STANDARDS          SECTION 1.52.  Section 42.352, Education Code, is   transferred to Subchapter M, Chapter 41, Education Code, as added   by this Act, and redesignated as Section 41.501, Education Code, to   read as follows:          Sec. 41.501 [42.352].  STANDARDS. The State Board of   Education shall establish standards for adequacy of school   facilities. The standards shall include requirements related to   space, educational adequacy, and construction quality. All   facilities constructed after September 1, 1992, must meet the   standards in order to be financed with state or local tax funds.          SECTION 1.53.  Section 42.002(b), Education Code, is amended   to read as follows:          (b)  The Foundation School Program consists of:                (1)  [two tiers that in combination provide for:                      [(A)]  sufficient financing to provide [for] all   school districts with the resources to provide a basic program of   education that is rated acceptable or higher under Section 39.054   and meets other applicable legal standards[;] and to provide all   school districts with                      [(B)]  substantially equal access to funds to   provide an enriched program; and                (2)  a facilities component as provided by Chapter 46.          SECTION 1.54.  The heading to Subchapter B, Chapter 42,   Education Code, is amended to read as follows:   SUBCHAPTER B. REGULAR PROGRAM [BASIC] ENTITLEMENT          SECTION 1.55.  Sections 42.101(a) and (c), Education Code,   are amended to read as follows:          (a)  For each student in average daily attendance, not   including the time students spend each day in special education   programs in an instructional arrangement other than mainstream or   career and technology education programs, for which an additional   allotment is made under Subchapter C, a district is entitled to a   basic [an] allotment equal to $______ , subject to adjustments   under Sections 42.102, 42.103, and 42.104 [the lesser of $4,765 or   the amount that results from the following formula:   [A = $4,765 X (DCR/MCR)   [where:          ["A" is the allotment to which a district is entitled;          ["DCR" is the district's compressed tax rate, which is the   product of the state compression percentage, as determined under   Section 42.2516, multiplied by the maintenance and operations tax   rate adopted by the district for the 2005 tax year; and          ["MCR" is the state maximum compressed tax rate, which is the   product of the state compression percentage, as determined under   Section 42.2516, multiplied by $1.50].          (c)  The basic allotment is multiplied by the cost of   education index under Section 42.102 and, if applicable, adjusted   by the small district adjustment under Section 42.103 to calculate   a district's adjusted allotment for purposes of the regular program   entitlement under this chapter and the special program allotments   under Subchapter C  [This subsection applies to a school district   for which the compressed tax rate ("DCR") is determined in   accordance with Subsection (a-1).   Any reduction in the district's   adopted maintenance and operations tax rate is applied to the   following components of the district's tax rate in the order   specified:                [(1)  tax effort described by Section 42.302(a-1)(2);                [(2)     tax effort described by Section 42.302(a-1)(1);   and                [(3)     tax effort included in the determination of the   district's compressed tax rate ("DCR") under Subsection (a-1)].          SECTION 1.56.  Section 42.102(a), Education Code, is amended   to read as follows:          (a)  The basic allotment for each district is multiplied by   the revised cost of education adjustment determined under Section   41.301 [adjusted] to reflect the geographic variation in known   resource costs and costs of education due to factors beyond the   control of the school district.          SECTION 1.57.  Section 42.103, Education Code, is amended to   read as follows:          Sec. 42.103.  SMALL [AND MID-SIZED] DISTRICT ADJUSTMENT.   (a) The small district adjustment is intended to account for the   increased per student cost of education in districts with fewer   than 5,000 students.          (b)  The basic allotment for certain small [and mid-sized]   districts is adjusted in accordance with this section. In this   section:                (1)  "AA" is the district's adjusted allotment per   student;                (2)  "ADA" is the number of students in average daily   attendance for which the district is entitled to an allotment under   Section 42.101; and                (3)  "ABA" is the adjusted basic allotment determined   under Section 42.102.          (c) [(b)]  The basic allotment of a school district that   [contains at least 300 square miles and] has not more than 5,000   [1,600] students in average daily attendance is adjusted by   applying the following formula that results in the greatest   adjusted allotment:   (1) AA = (1 + ((1,600 - ADA) X .0004)) X ABA;          [(c)     The basic allotment of a school district that contains   less than 300 square miles and has not more than 1,600 students in   average daily attendance is adjusted by applying the formula:   [AA = (1 + ((1,600 - ADA) X .00025)) X ABA          [(d)     The basic allotment of a school district that offers a   kindergarten through grade 12 program and has less than 5,000   students in average daily attendance is adjusted by applying the   formula, of the following formulas, that results in the greatest   adjusted allotment:                [(1)     the formula in Subsection (b) or (c) for which the   district is eligible;] or                (2)  AA = (1 + ((5,000 - ADA) X .000025)) X ABA.          SECTION 1.58.  Subchapter B, Chapter 42, Education Code, is   amended by adding a new Section 42.104 to read as follows:          Sec. 42.104.  SPARSITY ADJUSTMENT. Notwithstanding   Sections 42.101, 42.102, and 42.103, a school district that has   fewer than 130 students in average daily attendance shall be   provided an adjusted allotment under the applicable provisions of   Section 41.302.          SECTION 1.59.  Section 42.151(a), Education Code, is amended   to read as follows:          (a)  For each student in average daily attendance in a   special education program under Subchapter A, Chapter 29, in a   mainstream instructional arrangement, a school district is   entitled to an annual allotment equal to the adjusted [basic]   allotment multiplied by 1.1. For each full-time equivalent student   in average daily attendance in a special education program under   Subchapter A, Chapter 29, in an instructional arrangement other   than a mainstream instructional arrangement, a district is entitled   to an annual allotment equal to the adjusted [basic] allotment   multiplied by a weight determined according to instructional   arrangement as follows:                      Homebound5.0                      Hospital class3.0                      Speech therapy5.0                      Resource room3.0                      Self-contained, mild and moderate,                      regular campus3.0                      Self-contained, severe, regular campus3.0                      Off home campus2.7                      Nonpublic day school1.7                      Vocational adjustment class2.3          SECTION 1.60.  Section 42.151(f), Education Code, is   redesignated as Section 42.151(c), Education Code, to read as   follows:          (c) [(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.          SECTION 1.61.  Section 42.152(a), Education Code, is amended   to read as follows:          (a)  For each student who is educationally disadvantaged or   who is a student who does not have a disability and resides in a   residential placement facility in a district in which the student's   parent or legal guardian does not reside, a district is entitled to   an annual allotment equal to the adjusted [basic] allotment   multiplied by 0.2, and by 2.41 for each full-time equivalent   student who is in a remedial and support program under Section   29.081 because the student is pregnant.          SECTION 1.62.  Section 42.152(b-1), Education Code, is   redesignated as Section 42.152(c), Education Code, to read as   follows:          (c) [(b-1)]  A student receiving a full-time virtual   education through the state virtual school network may be included   in determining the number of educationally disadvantaged students   under Subsection (b) if the school district submits to the   commissioner a plan detailing the enhanced services that will be   provided to the student and the commissioner approves the plan.          SECTION 1.63.  Section 42.153(a), Education Code, is amended   to read as follows:          (a)  For each student in average daily attendance in a   bilingual education or special language program under Subchapter B,   Chapter 29, a district is entitled to an annual allotment equal to   the adjusted [basic] allotment multiplied by 0.1.          SECTION 1.64.  Section 42.154(a), Education Code, is amended   to read as follows:          (a)  For each full-time equivalent student in average daily   attendance in an approved career and technology education program   in grades nine through 12 or in career and technology education   programs for students with disabilities in grades seven through 12,   a district is entitled to:                (1)  an annual allotment equal to the adjusted [basic]   allotment multiplied by a weight of 1.35; and                (2)  $50, if the student is enrolled in:                      (A)  two or more advanced career and technology   education classes for a total of three or more credits; or                      (B)  an advanced course as part of a tech-prep   program under Subchapter T, Chapter 61.          SECTION 1.65.  Chapter 42, Education Code, is amended by   adding Subchapter D and adding a subchapter heading to read as   follows:   SUBCHAPTER D. TRANSPORTATION ALLOTMENT          SECTION 1.66.  Sections 42.155(a), (b), (c), and (j),   Education Code, are transferred to Subchapter D, Chapter 42,   Education Code, as added by this Act, redesignated as Section   42.201, Education Code, and amended to read as follows:          Sec. 42.201.  TRANSPORTATION ALLOTMENT. (a) Each district   or county operating a transportation system is entitled to   allotments for transportation costs as provided by this section.          (b)  As used in this section:                (1)  "Regular eligible student" means a student who   resides two or more miles from the student's campus of regular   attendance, measured along the shortest route that may be traveled   on public roads, and who is not classified as a student eligible for   special education services.                (2)  "Eligible special education student" means a   student who is eligible for special education services under   Section 29.003 and who would be unable to attend classes without   special transportation services.                (3)  "Linear density" means the average number of   regular eligible students transported daily, divided by the   approved daily route miles traveled by the respective   transportation system.          (c)  Each district or county operating a regular   transportation system is entitled to an allotment based on the   daily cost per regular eligible student of operating and   maintaining the regular transportation system and the linear   density of that system. In determining the cost, the commissioner   shall give consideration to factors affecting the actual cost of   providing these transportation services in each district or county.   The average actual cost is to be computed by the commissioner and   included for consideration by the legislature in the General   Appropriations Act. The allotment per mile of approved route may   not exceed the amount set by appropriation.          (d) [(j)]  The Texas School for the Deaf is entitled to an   allotment under this section. The commissioner shall determine the   appropriate allotment.          SECTION 1.67.  Section 42.251, Education Code, is amended to   read as follows:          Sec. 42.251.  FINANCING; GENERAL RULE. (a) A school   district's Foundation School Program maintenance and operations   cost is the [The] sum of:                (1)  the district's effective tax rate, as provided   under Section 42.2511, multiplied by the sum of the regular program   entitlement to which the district is entitled [basic allotment]   under Subchapter B and the sum of the special allotments under   Subchapter C to which the district is entitled, computed in   accordance with this chapter; and                (2)  the transportation allotment under Subchapter D[,   constitute the tier one allotments].          (b)  The sum of the Foundation School Program maintenance and   operations costs for all accredited school districts in this state   constitutes [tier one allotments and the guaranteed yield   allotments under Subchapter F, computed in accordance with this   chapter, constitute] the total maintenance and operations cost of   the Foundation School Program.          (c) [(b)]  The program shall be financed by:                (1)  state available school funds distributed in   accordance with law  [ad valorem tax revenue generated by an   equalized uniform school district effort];                (2)  ad valorem tax revenue generated by local school   district effort [in excess of the equalized uniform school district   effort]; and                (3)  [state available school funds distributed in   accordance with law; and                [(4)]  state funds appropriated for the purposes of   public school education and allocated to each district in an amount   sufficient to finance the maintenance and operations cost of each   district's Foundation School Program not covered by other funds   specified in this subsection.          SECTION 1.68.  Subchapter E, Chapter 42, Education Code, is   amended by adding Section 42.2511 to read as follows:          Sec. 42.2511.  EFFECTIVE TAX RATE. (a) A district's   effective tax rate is the district's adopted maintenance and   operations tax rate per $100 of taxable value multiplied by the   ratio of the district's appraised value of property for maintenance   and operations tax purposes to the taxable value of property in the   school district for the current tax year determined under   Subchapter M, Chapter 403, Government Code.          (b)  The effective tax rate for an open-enrollment charter   school under Chapter 12 is the state average effective tax rate.          SECTION 1.69.  The heading to Section 42.252, Education   Code, is amended to read as follows:          Sec. 42.252.  LOCAL SHARE OF PROGRAM COST [(TIER ONE)].          SECTION 1.70.  Section 42.252(a), Education Code, is amended   to read as follows:          (a)  Each school district's share of the maintenance and   operations cost of the Foundation School Program is the sum of the   district's distribution from the state available school fund and   the district's maintenance and operations tax collections for the   current year [determined by the following formula:   [LFA = TR X DPV   [where:          ["LFA" is the school district's local share;          ["TR" is a tax rate which for each hundred dollars of   valuation is an effective tax rate of the amount equal to the   product of the state compression percentage, as determined under   Section 42.2516, multiplied by the lesser of:                [(1)  $1.50; or                [(2)     the maintenance and operations tax rate adopted   by the district for the 2005 tax year; and          ["DPV" is the taxable value of property in the school   district for the preceding tax year determined under Subchapter M,   Chapter 403, Government Code].          SECTION 1.71.  Sections 42.253(a) and (c), Education Code,   are amended to read as follows:          (a)  For each school year the commissioner shall determine:                (1)  the amount of money to which a school district is   entitled under Subchapters B, [and] C, and D;                (2)  [the amount of money to which a school district is   entitled under Subchapter F;                [(3)]  the amount of money allocated to the district   from the available school fund; and                (3) [(4)     the amount of each district's tier one local   share under Section 42.252; and                [(5)]  the amount of each district's maintenance and   operations tax collections [tier two local share under Section   42.302].          (c)  Each school district is entitled to an amount equal to   the difference for that district between Subsection [the sum of   Subsections] (a)(1) [and (a)(2)] and the sum of Subsections (a)(2)   and (a)(3)[, (a)(4), and (a)(5)].          SECTION 1.72.  Section 42.254, Education Code, is amended to   read as follows:          Sec. 42.254.  OPTIONS TO ENSURE EFFICIENCY OF FOUNDATION   SCHOOL PROGRAM [ESTIMATES REQUIRED]. (a) If a school district's   total revenue under Sections 42.253(a)(2) and (3) exceeds the   district's entitlement under Section 42.253(a)(1), a district may   choose to exercise one or more options under Subchapter B, C, D, or   E, Chapter 41, to eliminate all excess revenue. If the district   fails to elect an option, the commissioner shall exercise an option   under Subchapter F or G, Chapter 41, to reduce the district's   anticipated revenue by an amount sufficient to eliminate any excess   revenue [Not later than October 1 of each even-numbered year:                [(1)     the agency shall submit to the legislature an   estimate of the tax rate and student enrollment of each school   district for the following biennium; and                [(2)     the comptroller shall submit to the legislature   an estimate of the total taxable value of all property in the state   as determined under Subchapter M, Chapter 403, Government Code, for   the following biennium].          (b)  The total amount to be remitted to the state by a   district under Subchapter D, Chapter 41, must at least equal the   amount by which the district's total revenue under Sections   42.253(a)(2) and (3) exceeds the district's entitlement under   Section 42.253(a)(1) [The agency and the comptroller shall update   the information provided to the legislature under Subsection (a)   not later than March 1 of each odd-numbered year].          (c)  If a district subject to this section chooses another   option to achieve the efficiency of the system under Chapter 41 or   the commissioner takes action under Subchapter F or G, Chapter 41,   any district involved may not have a resulting amount of total   revenue under Sections 42.253(a)(2) and (3) that exceeds the   district's entitlement under Section 42.253(a)(1).          SECTION 1.73.  The heading to Section 42.258, Education   Code, is amended to read as follows:          Sec. 42.258.  RECOVERY OF OVERALLOCATED FUNDS OR   INSUFFICIENT PAYMENTS.          SECTION 1.74.  Section 42.258(a), Education Code, is amended   to read as follows:          (a)  If a school district has received an overallocation of   state funds or has failed to make sufficient payments to the state   under Section 42.254, the agency shall, by withholding from   subsequent allocations of state funds or increasing the amount of   payments owed for the current or subsequent school year or by   requesting and obtaining a refund, recover from the district an   amount equal to the overallocation or insufficient payments.          SECTION 1.75.  The heading to Subchapter F, Chapter 42,   Education Code, is amended to read as follows:   SUBCHAPTER F. CALCULATION OF WEIGHTED AVERAGE DAILY ATTENDANCE   [GUARANTEED YIELD PROGRAM]          SECTION 1.76.  Section 42.301, Education Code, is amended to   read as follows:          Sec. 42.301.  PURPOSE. The purpose of the calculation of   weighted students under this subchapter is to provide a method of   comparison of student funding under [the guaranteed yield component   of] the Foundation School Program. By accounting for the state   recognized and funded uncontrollable cost differences in educating   students, the use of weighted students in funding comparisons   reflects the state policy under Section 42.001. Weighted students   are not used in the determination of funding for school districts   [is to provide each school district with the opportunity to provide   the basic program and to supplement that program at a level of its   own choice. An allotment under this subchapter may be used for any   legal purpose other than capital outlay or debt service].          SECTION 1.77.  The heading to Section 42.302, Education   Code, is amended to read as follows:          Sec. 42.302.  CALCULATION OF WEIGHTED STUDENTS [ALLOTMENT].          SECTION 1.78.  Section 42.302(a), Education Code, is amended   to read as follows:          (a)  For comparing student funding under Section 42.301,   [Each school district is guaranteed a specified amount per weighted   student in state and local funds for each cent of tax effort over   that required for the district's local fund assignment up to the   maximum level specified in this subchapter.     The amount of state   support, subject only to the maximum amount under Section 42.303,   is determined by the formula:   [GYA = (GL X WADA X DTR X 100) - LR   [where:          ["GYA" is the guaranteed yield amount of state funds to be   allocated to the district;          ["GL" is the dollar amount guaranteed level of state and   local funds per weighted student per cent of tax effort, which is an   amount described by Subsection (a-1) or a greater amount for any   year provided by appropriation;          ["WADA" is] the number of students in weighted average daily   attendance[, which] is calculated by dividing the sum of the school   district's allotments under Subchapters B and C[, less any   allotment to the district for transportation, any allotment under   Section 42.158 or 42.160, and 50 percent of the adjustment under   Section 42.102,] by the basic allotment for the applicable year[;          ["DTR" is the district enrichment tax rate of the school   district, which is determined by subtracting the amounts specified   by Subsection (b) from the total amount of maintenance and   operations taxes collected by the school district for the   applicable school year and dividing the difference by the quotient   of the district's taxable value of property as determined under   Subchapter M, Chapter 403, Government Code, or, if applicable,   under Section 42.2521, divided by 100; and          ["LR" is the local revenue, which is determined by   multiplying "DTR" by the quotient of the district's taxable value   of property as determined under Subchapter M, Chapter 403,   Government Code, or, if applicable, under Section 42.2521, divided   by 100].          SECTION 1.79.  The following provisions of the Education   Code are repealed:                (1)  Section 41.002, as effective immediately before   the effective date of this Act;                (2)  Sections 41.0031 and 41.0041;                (3)  Section 41.006, as effective immediately before   the effective date of this Act;                (4)  Section 41.092;                (5)  Section 41.093(b-1);                (6)  Section 41.0931;                (7)  Section 41.097(b);                (8)  Sections 41.098 and 41.099;                (9)  Subchapter E, Chapter 41, as effective immediately   before the effective date of this Act;                (10)  Section 41.157(d);                (11)  Section 41.159(b);                (12)  Sections 41.206(d), (e), (f), (g), (h), (i), (j),   and (k);                (13)  Sections 41.207, 41.208, 41.209, and 41.210;                (14)  Section 41.252(c);                (15)  Section 42.009;                (16)  Sections 42.101(a-1) and (a-2);                (17)  Section 42.104, as effective immediately before   the effective date of this Act;                (18)  Section 42.106;                (19)  Section 42.151(l);                (20)  Section 42.154(e);                (21)  the heading to Section 42.155;                (22)  Sections 42.1541, 42.156, 42.157, 42.158,   42.160, 42.2513, 42.2516, 42.2517, and 42.2518;                (23)  Sections 42.252(a-1), (b), (c), and (d);                (24)  Sections 42.2521, 42.2522, and 42.2523;                (25)  Section 42.253(b);                (26)  Sections 42.2531 and 42.257;                (27)  Sections 42.258(a-1) and (b);                (28)  Sections 42.259(a), (b), (c), (d), (e), and (f);                (29)  Sections 42.2591, 42.260, and 42.262;                (30)  Sections 42.302(a-1), (a-2), (b), (c), (d), (e),   and (f); and                (31)  Sections 42.303, 42.304, and 42.4101.          SECTION 1.80.  Any rule adopted by the commissioner of   education under Chapter 41 or 42, Education Code, before the   effective date of this Act continues to apply to Chapter 41 or 42,   Education Code, as amended by this Act, if Chapter 41 or 42,   Education Code, as amended by this Act, includes a section that is   substantially the same as a section of Chapter 41 or 42, Education   Code, that existed before the effective date of this Act.   ARTICLE 2. CONFORMING AMENDMENTS     [[[to be added at a later date]]]   ARTICLE 3. EFFECTIVE DATE          SECTION 3.01.  This Act takes effect September 1, 2017