1-1                                   AN ACT

 1-2     relating to public school choice.

 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-4           SECTION 1.  Subchapter D, Chapter 12, Education Code, is

 1-5     amended by adding Section 12.1011 to read as follows:

 1-6           Sec. 12.1011.  PUBLIC EDUCATION GRANT CHARTERS.  (a)  In

 1-7     addition to the other charters authorized under this subchapter, in

 1-8     accordance with this subchapter the State Board of Education may

 1-9     grant:

1-10                 (1)  not more than 100 charters for open-enrollment

1-11     charter schools that adopt an express policy providing for the

1-12     admission of students eligible for a public education grant under

1-13     Subchapter G, Chapter 29; and

1-14                 (2)  additional charters for open-enrollment charter

1-15     schools for which at least 75 percent of the prospective student

1-16     population, as specified in the proposed charter, will be students

1-17     who have dropped out of school or are at risk of dropping out of

1-18     school as defined by Section 29.081.

1-19           (b)  An open-enrollment charter school granted a charter

1-20     under this section may serve students who are not eligible for a

1-21     public education grant under Subchapter G, Chapter 29, but a school

1-22     granted a charter under Subsection (a)(2) must maintain, as a

1-23     condition of its charter, the required percentage of students.

1-24           SECTION 2.  Sections 29.202 and 29.203, Education Code, are

 2-1     amended to read as follows:

 2-2           Sec. 29.202.  ELIGIBILITY.  (a)  A student is eligible to

 2-3     receive a public education grant or to attend another public school

 2-4     in the district in which the student resides under this subchapter

 2-5     if the student is assigned to attend a public school campus:

 2-6                 (1)  at which 50 percent or more of the students did

 2-7     not perform satisfactorily on an assessment instrument administered

 2-8     under Section 39.023(a) or (b) in any two of the [in the] preceding

 2-9     three years; or

2-10                 (2)  that was, at any time in the preceding three

2-11     years, identified as low-performing by the commissioner under

2-12     Subchapter D, Chapter 39.

2-13           (b)  After a student has used a public education grant to

2-14     attend a school in a district other than the district in which the

2-15     student resides:

2-16                 (1)  the student does not become ineligible for the

2-17     grant if the school on which the student's initial eligibility is

2-18     based no longer meets the criteria under Subsection (a); and

2-19                 (2)  the student becomes ineligible for the grant if

2-20     the student is assigned to attend a school that does not meet the

2-21     criteria under Subsection (a).

2-22           Sec. 29.203.  FINANCING.  (a)  A student [eligible under

2-23     Section 25.001 to attend school in a school district but] who under

2-24     this subchapter uses a public education grant to attend [attends] a

2-25     public school in a school [another] district other than the

2-26     district in which the student resides is included in the average

2-27     daily attendance of the district in which the student [resides.

 3-1     The district in which the student]  attends school [shall report

 3-2     the student's attendance to the district in which the student

 3-3     resides in accordance with rules adopted by the commissioner].

 3-4           (b)  A school district is entitled to the allotment provided

 3-5     by Section 42.157 for each eligible student using a public

 3-6     education grant.  If the district has a wealth per student greater

 3-7     than the guaranteed wealth level but less than the equalized wealth

 3-8     level, a school district is entitled under rules adopted by the

 3-9     commissioner to additional state aid in an amount equal to the

3-10     difference between the cost to the district of providing services

3-11     to a student using a public education grant and the sum of the

3-12     state aid received because of the allotment under Section 42.157

3-13     and money from the available school fund attributable to the

3-14     student.

3-15           (c)  A school district is entitled to additional facilities

3-16     assistance under Section 42.4101 if the district agrees to:

3-17                 (1)  accept a number of students using public education

3-18     grants that is at least one percent of the district's average daily

3-19     attendance for the preceding school year; and

3-20                 (2)  provide services to each student until the student

3-21     either voluntarily decides to attend a school in a different

3-22     district or graduates from high school.

3-23           (d)  [A student's public education grant is the total state

3-24     and local funding per student for the school district in which the

3-25     student resides.  Total funding from state and local sources

3-26     includes  special allotments under Subchapter C, Chapter 42, but

3-27     does not include small district, sparsity, and cost of education

 4-1     adjustments and allotments for technology and transportation.  A

 4-2     student's public education grant is the entitlement of the student,

 4-3     under the supervision of the student's parent, guardian, or

 4-4     custodian, is not an entitlement of any school district, and is

 4-5     paid to a school district solely as a means of administrative

 4-6     convenience.]

 4-7           [(c)]  A school district chosen by a student's parent under

 4-8     Section 29.201 is entitled to accept or reject the application for

 4-9     the student to attend school in that district but may not use

4-10     criteria that discriminate on the basis of a student's race,

4-11     ethnicity, academic achievement, athletic abilities, language

4-12     proficiency, sex, or socioeconomic status.  A school district that

4-13     has more acceptable applicants for attendance under this subchapter

4-14     than available positions must give priority to students at risk of

4-15     dropping out of school as defined by Section 29.081 and must fill

4-16     the available positions by lottery.  However, to achieve continuity

4-17     in education, a school district may give preference over at-risk

4-18     students to enrolled students and to the siblings of enrolled

4-19     students residing in the same household or other children residing

4-20     in the same household as enrolled students for the convenience of

4-21     parents, guardians, or custodians of those children.

4-22           (e) [(d)]  A school district chosen by a student's parent

4-23     under Section 29.201 may not charge the student tuition [in

4-24     addition to the public education grant or charge tuition that is

4-25     greater than the district's average expenditure per student.  The

4-26     school district in which the student resides is entitled to the

4-27     remainder, if any, of the student's public education grant funds].

 5-1           (f) [(e)]  The school district in which a student resides

 5-2     shall provide each student attending a school in another district

 5-3     under this subchapter transportation free of charge to and from the

 5-4     school the student would otherwise attend.

 5-5           (g)  In this section:

 5-6                 (1)  "Equalized wealth level" has the meaning assigned

 5-7     by Section 41.001.

 5-8                 (2)  "Guaranteed wealth level" means a wealth per

 5-9     student equal to the dollar amount guaranteed level of state and

5-10     local funds per weighted student per cent of tax effort, as

5-11     provided by Section 42.302, multiplied by 10,000.

5-12                 (3)  "Wealth per student" has the meaning assigned by

5-13     Section 41.001.

5-14           SECTION 3.  Subchapter G, Chapter 29, Education Code, is

5-15     amended by adding Section 29.204 to read as follows:

5-16           Sec. 29.204.  NOTIFICATION.  (a)  Not later than January 1 of

5-17     each year the commissioner shall, based on the most recent

5-18     information available, provide notice to each school district in

5-19     which a campus described by Section 29.202 is located that:

5-20                 (1)  identifies each campus in the district that meets

5-21     the description in Section 29.202; and

5-22                 (2)  informs the district that the district must comply

5-23     with Subsection (b).

5-24           (b)  Not later than February 1 of each year, a school

5-25     district shall notify the parent of each student in the district

5-26     assigned to attend a campus described by Section 29.202 that the

5-27     student is eligible for a public education grant.  The notice must

 6-1     contain a clear, concise explanation of the public education grant

 6-2     program and of the manner in which the parent may obtain further

 6-3     information about the program.

 6-4           SECTION 4.  Subchapter G, Chapter 29, Education Code, is

 6-5     amended by adding Section 29.205 to read as follows:

 6-6           Sec. 29.205.  CONTRACT AUTHORITY.  The board of trustees of a

 6-7     school district may contract under Section 11.157 for the provision

 6-8     of educational services to a district student eligible to receive a

 6-9     public education grant under Section 29.202.

6-10           SECTION 5.  Subchapter C, Chapter 42, Education Code, is

6-11     amended by adding Section 42.157 to read as follows:

6-12           Sec. 42.157.  PUBLIC EDUCATION GRANT ALLOTMENT.  (a)  Except

6-13     as provided by Subsection (b), for each student in average daily

6-14     attendance who is using a public education grant under Subchapter

6-15     G, Chapter 29, to attend school in a district other than the

6-16     district in which the student resides, the district in which the

6-17     student attends school is entitled to an annual allotment equal to

6-18     the adjusted basic allotment multiplied by a weight of 0.1.

6-19           (b)  The total number of allotments under this section to

6-20     which a district is entitled may not exceed the number by which the

6-21     number of students using public education grants to attend school

6-22     in the district exceeds the number of students who reside in the

6-23     district and use public education grants to attend school in

6-24     another district.

6-25           SECTION 6.  Subchapter H, Chapter 42, Education Code, is

6-26     amended by adding Section 42.4101 to read as follows:

6-27           Sec. 42.4101.  ADDITIONAL ASSISTANCE FOR DISTRICTS WITH

 7-1     STUDENTS USING PUBLIC EDUCATION GRANTS.  (a)  A district is

 7-2     entitled to additional assistance under this section as provided by

 7-3     Section 29.203(c).

 7-4           (b)  The amount of additional assistance under this section

 7-5     is computed by subtracting the number of students residing in the

 7-6     district and using public education grants to attend school in

 7-7     another district for the year in which the assistance is granted

 7-8     from the number of students using public education grants to attend

 7-9     school in the district for that year and multiplying the difference

7-10     by $266.

7-11           (c)  If a district to which this section applies is entitled

7-12     to the maximum amount of assistance under Section 42.406, the

7-13     maximum is increased by the amount of additional assistance to

7-14     which the district is entitled under this section.

7-15           SECTION 7.  This Act applies beginning with the 1997-1998

7-16     school year.

7-17           SECTION 8.  The importance of this legislation and the

7-18     crowded condition of the calendars in both houses create an

7-19     emergency and an imperative public necessity that the

7-20     constitutional rule requiring bills to be read on three several

7-21     days in each house be suspended, and this rule is hereby suspended,

7-22     and that this Act take effect and be in force from and after its

7-23     passage, and it is so enacted.

         _______________________________     _______________________________

             President of the Senate              Speaker of the House

               I certify that H.B. No. 318 was passed by the House on May 8,

         1997, by the following vote:  Yeas 125, Nays 0, 1 present, not

         voting; that the House refused to concur in Senate amendments to

         H.B. No. 318 on May 28, 1997, and requested the appointment of a

         conference committee to consider the differences between the two

         houses; and that the House adopted the conference committee report

         on H.B. No. 318 on May 31, 1997, by the following vote:  Yeas 98,

         Nays 42, 1 present, not voting.

                                             _______________________________

                                                 Chief Clerk of the House

               I certify that H.B. No. 318 was passed by the Senate, with

         amendments, on May 26, 1997, by the following vote:  Yeas 31, Nays

         0; at the request of the House, the Senate appointed a conference

         committee to consider the differences between the two houses; and

         that the Senate adopted the conference committee report on H.B. No.

         318 on May 31, 1997, by the following vote:  Yeas 22, Nays 7.

                                             _______________________________

                                                 Secretary of the Senate

         APPROVED:  _____________________

                            Date

                    _____________________

                          Governor