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  By: Huberty, Zerwas, Turner, H.B. No. 21
      King of Hemphill, Dutton, et al.
 
 
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:
         SECTION 1.  Section 7.055(b), Education Code, is amended by
  adding Subdivision (42) to read as follows:
               (42)  The commissioner may accept a gift, donation, or
  other contribution on behalf of the public school system or agency
  and, unless otherwise specified by the donor, may use the
  contribution for the benefit of the public school system or agency
  in the manner the commissioner determines appropriate.
         SECTION 2.  Section 7.062(c), Education Code, is amended to
  read as follows:
         (c)  Except as otherwise provided by this subsection, if the
  commissioner certifies that the amount appropriated for a state
  fiscal year for purposes of Subchapters A and B, Chapter 46, exceeds
  the amount to which school districts are entitled under those
  subchapters for that year, the commissioner shall use the excess
  funds, in an amount not to exceed $20 million in any state fiscal
  year, for the purpose of making grants under this section. The use
  of excess funds under this subsection has priority over any
  provision of Chapter 42 that permits or directs the use of excess
  foundation school program funds, including Sections [42.2517,]
  42.2521, 42.2522, and 42.2531. The commissioner is required to use
  excess funds as provided by this subsection only if the
  commissioner is not required to reduce the total amount of state
  funds allocated to school districts under Section 42.253(h).
         SECTION 3.  Section 11.158(a), Education Code, is amended to
  read as follows:
         (a)  The board of trustees of an independent school district
  may require payment of:
               (1)  a fee for materials used in any program in which
  the resultant product in excess of minimum requirements becomes, at
  the student's option, the personal property of the student, if the
  fee does not exceed the cost of materials;
               (2)  membership dues in student organizations or clubs
  and admission fees or charges for attending extracurricular
  activities, if membership or attendance is voluntary;
               (3)  a security deposit for the return of materials,
  supplies, or equipment;
               (4)  a fee for personal physical education and athletic
  equipment and apparel, although any student may provide the
  student's own equipment or apparel if it meets reasonable
  requirements and standards relating to health and safety
  established by the board;
               (5)  a fee for items of personal use or products that a
  student may purchase at the student's option, such as student
  publications, class rings, annuals, and graduation announcements;
               (6)  a fee specifically permitted by any other statute;
               (7)  a fee for an authorized voluntary student health
  and accident benefit plan;
               (8)  a reasonable fee, not to exceed the actual annual
  maintenance cost, for the use of musical instruments and uniforms
  owned or rented by the district;
               (9)  a fee for items of personal apparel that become the
  property of the student and that are used in extracurricular
  activities;
               (10)  a parking fee or a fee for an identification card;
               (11)  a fee for a driver training course, not to exceed
  the actual district cost per student in the program for the current
  school year;
               (12)  a fee for a course offered for credit that
  requires the use of facilities not available on the school premises
  or the employment of an educator who is not part of the school's
  regular staff, if participation in the course is at the student's
  option;
               (13)  a fee for a course offered during summer school,
  except that the board may charge a fee for a course required for
  graduation only if the course is also offered without a fee during
  the regular school year;
               (14)  a reasonable fee for transportation of a student
  who lives within two miles of the school the student attends to and
  from that school[, except that the board may not charge a fee for
  transportation for which the school district receives funds under
  Section 42.155(d)]; or
               (15)  a reasonable fee, not to exceed $50, for costs
  associated with an educational program offered outside of regular
  school hours through which a student who was absent from class
  receives instruction voluntarily for the purpose of making up the
  missed instruction and meeting the level of attendance required
  under Section 25.092[; or
               [(16)     if the district does not receive any funds under
  Section 42.155 and does not participate in a county transportation
  system for which an allotment is provided under Section 42.155(i),
  a reasonable fee for the transportation of a student to and from the
  school the student attends].
         SECTION 4.  Effective September 1, 2018, Section
  12.106(a-1), Education Code, is amended to read as follows:
         (a-1)  In determining funding for an open-enrollment charter
  school under Subsection (a):
               (1)  [,] adjustments under Sections 42.102, [42.103,]
  42.104, and 42.105 are based on the average adjustment for the
  state; and
               (2)  the adjustment under Section 42.103 is based on
  the average adjustment for the state that would have been provided
  under that section as it existed on January 1, 2018.
         SECTION 5.  Section 29.153(c), Education Code, is amended to
  read as follows:
         (c)  A prekindergarten class under this section shall be
  operated on a half-day basis. A district is not required to provide
  transportation for a prekindergarten class[, but transportation,
  if provided, is included for funding purposes as part of the regular
  transportation system].
         SECTION 6.  Subchapter F, Chapter 29, Education Code, is
  amended by adding Section 29.194 to read as follows:
         Sec. 29.194.  STUDY ON CAREER AND TECHNOLOGY EDUCATION
  COURSES.  (a) The commissioner shall conduct a study regarding the
  provision of career and technology education courses during the
  summer.  The study must analyze:
               (1)  the feasibility of providing those courses during
  the summer;
               (2)  the potential demand for those courses during the
  summer;
               (3)  any funding considerations associated with
  providing those courses during the summer; and
               (4)  any other matter the commissioner determines
  appropriate.
         (a-1)  The study shall include an evaluation of the
  feasibility of extending career and technology education programs
  to students enrolled below the eighth grade level and providing
  funding for those programs.
         (b)  Not later than December 1, 2018, the commissioner shall
  submit to the governor and the members of the legislature a report
  on the results of the study and any recommendations for legislative
  or other action.
         (c)  The provisions of this section apply only if the
  commissioner receives sufficient money to pay for the study and
  report from gifts, donations, or other contributions that may be
  used for that purpose.
         (d)  This section expires September 1, 2019.
         SECTION 7.  Sections 29.918(a) and (b), Education Code, are
  amended to read as follows:
         (a)  Notwithstanding Section [39.234 or] 42.152, a school
  district or open-enrollment charter school with a high dropout
  rate, as determined by the commissioner, must submit a plan to the
  commissioner describing the manner in which the district or charter
  school intends to use the compensatory education allotment under
  Section 42.152 [and the high school allotment under Section 42.160]
  for developing and implementing research-based strategies for
  dropout prevention. The district or charter school shall submit
  the plan not later than December 1 of each school year preceding the
  school year in which the district or charter school will receive the
  compensatory education allotment [or high school allotment] to
  which the plan applies.
         (b)  A school district or open-enrollment charter school to
  which this section applies may not spend or obligate more than 25
  percent of the district's or charter school's compensatory
  education allotment [or high school allotment] unless the
  commissioner approves the plan submitted under Subsection
  (a).  The commissioner shall complete an initial review of the
  district's or charter school's plan not later than March 1 of the
  school year preceding the school year in which the district or
  charter school will receive the compensatory education allotment
  [or high school allotment] to which the plan applies.
         SECTION 8.  Subchapter C, Chapter 30, Education Code, is
  amended by adding Section 30.0561 to read as follows:
         Sec. 30.0561.  TRANSPORTATION ALLOTMENT. The Texas School
  for the Deaf is entitled to a transportation allotment paid from the
  foundation school fund. The commissioner shall determine the
  appropriate allotment.
         SECTION 9.  Section 30.087(c), Education Code, is amended to
  read as follows:
         (c)  A school district may receive an allotment paid from the
  foundation school fund for transportation of students
  participating in a regional day school program, as determined by
  the commissioner [in the same manner as an allotment for the
  transportation of other special education students].
         SECTION 10.  Section 34.002(c), Education Code, is amended
  to read as follows:
         (c)  The commissioner shall reduce the basic allotment
  provided under Section 42.101 for each student in average daily
  attendance by $125 for a [A] school district that fails or refuses
  to meet the safety standards for school buses established under
  this section [is ineligible to share in the transportation
  allotment under Section 42.155] until the first anniversary of the
  date the district begins complying with the safety standards.
         SECTION 11.  Section 34.007, Education Code, is amended by
  adding Subsection (c) to read as follows:
         (c)  A county transportation system is not entitled to
  receive funding for transportation costs directly from the state.  
  Funding for a county transportation system is provided by each
  school district participating in the county transportation system
  in accordance with the terms of the interlocal contract under
  Chapter 791, Government Code, under which the county provides
  transportation services for the participating districts.
         SECTION 12.  Section 39.0233(a), Education Code, is amended
  to read as follows:
         (a)  The agency, in coordination with the Texas Higher
  Education Coordinating Board, shall adopt a series of questions to
  be included in an end-of-course assessment instrument administered
  under Section 39.023(c) to be used for purposes of Section 51.3062.  
  The questions adopted under this subsection must be developed in a
  manner consistent with any college readiness standards adopted
  under Section [Sections 39.233 and] 51.3062.
         SECTION 13.  Section 41.099(a), Education Code, is amended
  to read as follows:
         (a)  Sections [41.002(e),] 41.094, 41.097, and 41.098 apply
  only to a district that:
               (1)  executes an agreement to purchase all attendance
  credits necessary to reduce the district's wealth per student to
  the equalized wealth level;
               (2)  executes an agreement to purchase attendance
  credits and an agreement under Subchapter E to contract for the
  education of nonresident students who transfer to and are educated
  in the district but who are not charged tuition; or
               (3)  executes an agreement under Subchapter E to
  contract for the education of nonresident students:
                     (A)  to an extent that does not provide more than
  10 percent of the reduction in wealth per student required for the
  district to achieve a wealth per student that is equal to or less
  than the equalized wealth level; and
                     (B)  under which all revenue paid by the district
  to other districts, in excess of the reduction in state aid that
  results from counting the weighted average daily attendance of the
  students served in the contracting district, is required to be used
  for funding a consortium of at least three districts in a county
  with a population of less than 40,000 that is formed to support a
  technology initiative.
         SECTION 14.  Section 41.257, Education Code, is amended to
  read as follows:
         Sec. 41.257.  APPLICATION OF SMALL AND SPARSE ADJUSTMENTS
  [AND TRANSPORTATION ALLOTMENT]. The budget of the consolidated
  district must apply the benefit of the adjustment or allotment to
  the schools of the consolidating district to which Section 42.103
  or[,] 42.105[, or 42.155] would have applied in the event that the
  consolidated district still qualifies as a small or sparse
  district.
         SECTION 15.  Section 42.006(a-1), Education Code, is amended
  to read as follows:
         (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 or related disorders. The
  agency shall maintain the information provided in accordance with
  this subsection.
         SECTION 16.  Section 42.101(a), Education Code, is 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
  settings, [or] career and technology education programs, or
  technology applications courses approved for high school credit,
  for which an additional allotment is made under Subchapter C, a
  district is entitled to an allotment equal to the lesser of $5,140 
  [$4,765] or the amount that results from the following formula:
  A = $5,140 [$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.
         SECTION 17.  Section 42.102, Education Code, is amended by
  adding Subsection (c) to read as follows:
         (c)  Based on a statistical analysis conducted by the
  Legislative Budget Board to determine for each school district the
  current geographic variation in known resource costs and costs of
  education due to factors beyond the control of the district, the
  commissioner shall update the cost of education index used for
  purposes of this section during the 2016-2017 school year.  The
  commissioner periodically may request more current statistical
  analysis from the Legislative Budget Board and further update as
  needed the cost of education index.
         SECTION 18.  (a) Effective September 1, 2023, Sections
  42.103(b) and (d), Education Code, are amended to read as follows:
         (b)  The basic allotment of a school district that [contains
  at least 300 square miles and] has not more than 1,600 students in
  average daily attendance is adjusted by applying the formula:
  AA = (1 + ((1,600 - ADA) X .0004)) 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), if [or (c) for
  which] the district is eligible for that formula; or
               (2)  AA = (1 + ((5,000 - ADA) X .000025)) X ABA.
         (b)  Effective September 1, 2023, Section 42.103(c),
  Education Code, is repealed.
         SECTION 19.  Effective September 1, 2018, Section 42.103(c),
  Education Code, is amended to read as follows:
         (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 following
  formulas [formula]:
               (1)  for the fiscal year beginning September 1, 2018:
  AA = (1 + ((1,600 - ADA) X .000275 [.00025])) X ABA
               ;
               (2)  for the fiscal year beginning September 1, 2019:
  AA = (1 + ((1,600 - ADA) X .00030)) X ABA
               ;
               (3)  for the fiscal year beginning September 1, 2020:
  AA = (1 + ((1,600 - ADA) X .000325)) X ABA
               ;
               (4)  for the fiscal year beginning September 1, 2021:
  AA = (1 + ((1,600 - ADA) X .00035)) X ABA
               ; and
               (5)  for the fiscal year beginning September 1, 2022:
  AA = (1 + ((1,600 - ADA) X .000375)) X ABA
         SECTION 20.  Subchapter B, Chapter 42, Education Code, is
  amended by adding Section 42.1041 to read as follows:
         Sec. 42.1041.  INELIGIBILITY FOR SMALL OR MID-SIZED DISTRICT
  ADJUSTMENT OR SPARSITY ADJUSTMENT.  (a)  This section applies only
  to a school district that:
               (1)  borders the Red River; and
               (2)  has a student enrollment of less than 90, with more
  than 50 percent of the enrollment consisting of students who have
  transferred from another school district.
         (b)  Notwithstanding Section 42.103, 42.104, or 42.105, a
  school district to which this section applies is ineligible for an
  adjustment under Section 42.103 or 42.105 for any school year
  during which the district:
               (1)  issues bonds for the construction of a new
  instructional facility on property more than five miles from a
  property that before the issuance of the bonds was owned by the
  district and was the location of an instructional facility for the
  previous five years; or
               (2)  makes payments on bonds described by Subdivision
  (1).
         SECTION 21.  Subchapter B, Chapter 42, Education Code, is
  amended by adding Section 42.107 to read as follows:
         Sec. 42.107.  SPECIAL-PURPOSE SCHOOL DISTRICTS OPERATED BY
  GENERAL ACADEMIC TEACHING INSTITUTIONS.  (a)  In each fiscal year of
  the biennium, the commissioner of education shall allocate funding
  from the foundation school program to each special-purpose school
  district established under Section 11.351 that is operated by a
  general academic teaching institution as defined by Section 61.003,
  in an amount equivalent to the basic allotment in Section 42.101(a)
  multiplied by the number of full-time equivalent students who are
  enrolled in the school district and who reside in this state.
         (b)  In allocating funding to special-purpose school
  districts under this section, the commissioner shall use a payment
  schedule consistent with the payment schedule adopted for
  open-enrollment charter schools.
         (c)  A special-purpose school district that receives state
  funding for a resident student under this section may not charge
  tuition or fees to that student for the academic term for which
  state funding is received, beyond fees permitted under Section
  11.158.
         (d)  A special-purpose school district may elect not to
  receive state funding under this section.
         SECTION 22.  Section 42.151(h), Education Code, is amended
  to read as follows:
         (h)  Funds allocated under this section, other than an
  indirect cost allotment established under State Board of Education
  rule or amounts made available for the transportation of special
  education students, must be used in the special education program
  under Subchapter A, Chapter 29.
         SECTION 23.  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 0.11 [0.1].
         SECTION 24.  The heading to Section 42.154, Education Code,
  is amended to read as follows:
         Sec. 42.154.  CAREER AND TECHNOLOGY EDUCATION AND TECHNOLOGY
  APPLICATIONS ALLOTMENT.
         SECTION 25.  Sections 42.154(a), (b), (c), and (e),
  Education Code, are 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 eight [nine] through 12, in a technology applications
  course approved for high school credit, or in career and technology
  education programs for students with disabilities in grades seven
  through 12, a district is entitled to:
               (1)  an annual allotment equal to the adjusted basic
  allotment multiplied by a weight of 1.35; and
               (2)  $50, if the student is enrolled in:
                     (A)  two or more advanced career and technology
  education classes for a total of three or more credits; or
                     (B)  an advanced course as part of a tech-prep
  program under Subchapter T, Chapter 61.
         (b)  In this section, "full-time equivalent student" means
  30 hours of contact a week between a student and career and
  technology education program or technology applications personnel.
         (c)  Funds allocated under this section, other than an
  indirect cost allotment established under State Board of Education
  rule or amounts made available for the transportation of career and
  technology education students, must be used in providing career and
  technology education programs in grades eight [nine] through 12,
  technology applications courses approved for high school credit, or
  career and technology education programs for students with
  disabilities in grades seven through 12 under Sections 29.182,
  29.183, and 29.184.
         (e)  Out of the total statewide allotment [for career and
  technology education] under this section, the commissioner shall
  set aside an amount specified in the General Appropriations Act,
  which may not exceed an amount equal to one percent of the total
  amount appropriated, to support regional career and technology
  education planning. After deducting the amount set aside under
  this subsection from the total amount appropriated for career and
  technology education and technology applications under this
  section, the commissioner shall reduce each district's tier one
  allotments in the same manner described for a reduction in
  allotments under Section 42.253.
         SECTION 26.  Section 42.1541(a), Education Code, is amended
  to read as follows:
         (a)  For the 2017-2018 and subsequent school years, the [The]
  State Board of Education shall by rule revise [increase] the
  indirect cost allotments established under Sections 42.151(h),
  42.152(c), 42.153(b), and 42.154(c) [42.154(a-1) and (c)] and in
  effect for the 2016-2017 [2010-2011] school year to reflect any
  increase in the percentage of total maintenance and operations
  funding represented by the basic allotment [in proportion to the
  average percentage reduction in total state and local maintenance
  and operations revenue provided under this chapter for the
  2011-2012 school year] as a result of [S.B. Nos. 1 and 2,] Acts of
  the 85th [82nd] Legislature, Regular [1st Called] Session, 2017 
  [2011].
         SECTION 27.  Subchapter C, Chapter 42, Education Code, is
  amended by adding Section 42.1561 to read as follows:
         Sec. 42.1561.  ALLOTMENT FOR STUDENT WITH DYSLEXIA OR
  RELATED DISORDER. (a) Subject to Subsection (b), for each student
  that a school district serves who has been identified as having
  dyslexia or a related disorder, the district is entitled to an
  annual allotment equal to the district's adjusted basic allotment
  as determined under Section 42.102 or Section 42.103, as
  applicable, multiplied by 0.1 for each school year or a greater
  amount provided by appropriation.
         (b)  A school district is entitled to the allotment under
  Subsection (a) only for a student who:
               (1)  is receiving instruction that:
                     (A)  meets applicable dyslexia program criteria
  established by the agency; and
                     (B)  is provided by a person with specific
  training in providing that instruction; or
               (2)  has received the instruction described by
  Subdivision (1) and is permitted, on the basis of having dyslexia or
  a related disorder, to use modifications in the classroom and
  accommodations in the administration of assessment instruments
  under Section 39.023.
         (c)  Funds allotted under this section must be used in
  providing services to students with dyslexia or related disorders.
         (d)  A school district may receive funding for a student
  under this section and Section 42.151 if the student satisfies the
  requirements of both sections.
         (e)  Not more than five percent of a district's students in
  average daily attendance are eligible for funding under this
  section.
         SECTION 28.  Sections 42.158(b), (d-1), and (g), Education
  Code, are amended to read as follows:
         (b)  For the first school year in which students attend a new
  instructional facility, a school district is entitled to an
  allotment of $1,000 [$250] for each student in average daily
  attendance at the facility. For the second school year in which
  students attend that instructional facility, a school district is
  entitled to an allotment of $1,000 [$250] for each additional
  student in average daily attendance at the facility.
         (d-1)  In addition to the appropriation amount described by
  Subsection (d), the amount of $1 million may be appropriated each
  school year to supplement the allotment to which a school district
  is entitled under this section that may be provided using the
  appropriation amount described by Subsection (d). The commissioner
  shall first apply the funds appropriated under this subsection to
  prevent any reduction under Subsection (d) in the allotment for
  attendance at an eligible high school instructional facility,
  subject to the maximum amount of $1,000 [$250] for each student in
  average daily attendance. Any funds remaining after preventing all
  reductions in amounts due for high school instructional facilities
  may be applied proportionally to all other eligible instructional
  facilities, subject to the maximum amount of $1,000 [$250] for each
  student in average daily attendance.
         (g)  In this section:
               (1)  "Instructional
  [, "instructional] facility" has
  the meaning assigned by Section 46.001.
               (2)  "New instructional facility" includes:
                     (A)  a newly constructed instructional facility;
                     (B)  a repurposed instructional facility; and
                     (C)  a leased facility operating for the first
  time as an instructional facility with a minimum lease term of not
  less than 10 years.
         SECTION 29.  Section 42.2518(a), Education Code, as
  effective September 1, 2017, is amended to read as follows:
         (a)  Beginning with the 2017-2018 school year, a school
  district is entitled to additional state aid to the extent that
  state and local revenue under this chapter and Chapter 41 is less
  than the state and local revenue that would have been available to
  the district under Chapter 41 and this chapter as those chapters
  existed on September 1, 2015, excluding any state aid or adjustment
  in wealth per student that would have been provided under former
  Section 41.002(e)-(g), 42.155, 42.160, 42.2513, or 42.2516, if the
  increase in the residence homestead exemption under Section 1-b(c),
  Article VIII, Texas Constitution, and the additional limitation on
  tax increases under Section 1-b(d) of that article as proposed by
  S.J.R. 1, 84th Legislature, Regular Session, 2015, had not
  occurred.
         SECTION 30.  Subchapter E, Chapter 42, Education Code, is
  amended by adding Section 42.2541 to read as follows:
         Sec. 42.2541.  ESTIMATED PROJECTIONS. (a)  In this section,
  "equivalent equalized wealth level" means an equalized wealth level
  for a state fiscal biennium that results in approximately the same
  number of school districts that are required to take action under
  Chapter 41 to reduce wealth as the number of school districts that
  were required to take that action during the preceding state fiscal
  biennium.
         (b)  Not later than November 1 of each even-numbered year,
  the agency shall:
               (1)  submit to the legislature a projection for an
  equivalent equalized wealth level for the following biennium based
  on the agency's estimate of:
                     (A)  student enrollment under Section
  42.254(a)(1);
                     (B)  the comptroller's estimate of any increase in
  total taxable value of all property in the state under Section
  42.254(a)(2);
                     (C)  the number of school districts offering a
  local optional residence homestead exemption under Section
  11.13(n), Tax Code;
                     (D)  the number of school districts adopting a tax
  rate below the maximum tier one tax rate determined under Section
  42.252;
                     (E)  the projected amount of maintenance and
  operations tax revenue per student in weighted average daily
  attendance of the Austin Independent School District; and
                     (F)  the number of school districts adopting a
  maintenance and operations tax rate of $1.17; and 
               (2)  provide projections for the equalized funding
  elements under Section 42.007 for the following biennium as
  necessary to achieve the equivalent equalized wealth level
  projected under Subdivision (1).
         SECTION 31.  Sections 42.259(c), (d), and (f), Education
  Code, are amended to read as follows:
         (c)  Payments from the foundation school fund to each
  category 2 school district shall be made as follows:
               (1)  22 percent of the yearly entitlement of the
  district shall be paid in an installment to be made on or before the
  25th day of September of a fiscal year;
               (2)  18 percent of the yearly entitlement of the
  district shall be paid in an installment to be made on or before the
  25th day of October;
               (3)  9.5 percent of the yearly entitlement of the
  district shall be paid in an installment to be made on or before the
  25th day of November;
               (4)  7.5 percent of the yearly entitlement of the
  district shall be paid in an installment to be made on or before the
  25th day of April;
               (5)  five percent of the yearly entitlement of the
  district shall be paid in an installment to be made on or before the
  25th day of May;
               (6)  10 percent of the yearly entitlement of the
  district shall be paid in an installment to be made on or before the
  25th day of June;
               (7)  13 percent of the yearly entitlement of the
  district shall be paid in an installment to be made on or before the
  25th day of July; and
               (8)  15 percent of the yearly entitlement of the
  district shall be paid in an installment to be made after the 5th
  day of September and not later than the 10th day of September of the
  calendar year following the calendar year of the payment made under
  Subdivision (1) [on or before the 25th day of August].
         (d)  Payments from the foundation school fund to each
  category 3 school district shall be made as follows:
               (1)  45 percent of the yearly entitlement of the
  district shall be paid in an installment to be made on or before the
  25th day of September of a fiscal year;
               (2)  35 percent of the yearly entitlement of the
  district shall be paid in an installment to be made on or before the
  25th day of October; and
               (3)  20 percent of the yearly entitlement of the
  district shall be paid in an installment to be made after the 5th
  day of September and not later than the 10th day of September of the
  calendar year following the calendar year of the payment made under
  Subdivision (1) [on or before the 25th day of August].
         (f)  Except as provided by Subsection (c)(8) or (d)(3),
  previously [Previously] unpaid additional funds from prior fiscal
  years owed to a district shall be paid to the district together with
  the September payment of the current fiscal year entitlement.
         SECTION 32.  Sections 42.2591(c) and (e), Education Code,
  are amended to read as follows:
         (c)  Payments from the foundation school fund to an
  open-enrollment charter school under this section shall be made as
  follows:
               (1)  22 percent of the yearly entitlement of the school
  shall be paid in an installment to be made on or before the 25th day
  of September of a fiscal year;
               (2)  18 percent of the yearly entitlement of the school
  shall be paid in an installment to be made on or before the 25th day
  of October;
               (3)  9.5 percent of the yearly entitlement of the
  school shall be paid in an installment to be made on or before the
  25th day of November;
               (4)  four percent of the yearly entitlement of the
  school shall be paid in an installment to be made on or before the
  25th day of December;
               (5)  four percent of the yearly entitlement of the
  school shall be paid in an installment to be made on or before the
  25th day of January;
               (6)  four percent of the yearly entitlement of the
  school shall be paid in an installment to be made on or before the
  25th day of February;
               (7)  four percent of the yearly entitlement of the
  school shall be paid in an installment to be made on or before the
  25th day of March;
               (8)  7.5 percent of the yearly entitlement of the
  school shall be paid in an installment to be made on or before the
  25th day of April;
               (9)  five percent of the yearly entitlement of the
  school shall be paid in an installment to be made on or before the
  25th day of May;
               (10)  seven percent of the yearly entitlement of the
  school shall be paid in an installment to be made on or before the
  25th day of June;
               (11)  seven percent of the yearly entitlement of the
  school shall be paid in an installment to be made on or before the
  25th day of July; and
               (12)  eight percent of the yearly entitlement of the
  school shall be paid in an installment to be made after the 5th day
  of September and not later than the 10th day of September of the
  calendar year following the calendar year of the payment made under
  Subdivision (1) [on or before the 25th day of August].
         (e)  Except as provided by Subsection (c)(12), previously
  [Previously] unpaid additional funds from prior fiscal years owed
  to an open-enrollment charter school shall be paid to the school
  together with the September payment of the current fiscal year
  entitlement.
         SECTION 33.  Section 42.302(a), Education Code, is amended
  to read as follows:
         (a)  Each school district is guaranteed a specified amount
  per weighted student in state and local funds for each cent of tax
  effort over that required for the district's local fund assignment
  up to the maximum level specified in this subchapter.  The amount
  of state support, subject only to the maximum amount under Section
  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 34.  Chapter 42, Education Code, is amended by
  adding Subchapter H to read as follows:
  SUBCHAPTER H. FINANCIAL HARDSHIP TRANSITION PROGRAM
         Sec. 42.451.  FINANCIAL HARDSHIP GRANTS. (a) From amounts
  appropriated for this subchapter, the commissioner may administer a
  grant program that provides grants to school districts to defray
  financial hardships resulting from changes made to Chapter 41 and
  this chapter that apply after the 2016-2017 school year.
         (b)  The commissioner shall award grants under this
  subchapter to districts as provided by Section 42.452.
         (c)  Funding provided to a district under this subchapter is
  in addition to all other funding provided under Chapter 41 and this
  chapter.
         (d)  The commissioner may obtain additional information as
  needed from a district or other state or local agency to make
  determinations in awarding grants under this subchapter.
         Sec. 42.452.  AWARD OF GRANTS; AMOUNT. (a) The commissioner
  shall award grants to school districts based on the following
  formula:
  HG = (PL-CL) X (TR) X (TAHG/TEHG)
  where:
         "HG" is the amount of a district's hardship grant;
         "PL" is the amount of funding under previous law to which a
  district would be entitled under Chapter 41 and this chapter as
  those chapters existed on January 1, 2017, determined using current
  school year data for the district;
         "CL" is the amount of current law funding under Chapter 41 and
  this chapter to which a district is entitled;
         "TR" is a district's maintenance and operations tax rate, as
  specified by the comptroller's most recent certified report;
         "TAHG" is the total funding available for grants under
  Section 42.455 for a school year; and
         "TEHG" is the sum of the combined amounts for all districts
  calculated by applying the formula (PL-CL) X (TR) for each
  district.
         (b)  A school district's hardship grant awarded under this
  subchapter for a school year may not exceed the lesser of:
               (1)  the amount equal to 10 percent of the total amount
  of funds available for grants under this subchapter for that school
  year; or
               (2)  the amount by which "PL" exceeds "CL" for that
  district for that school year.
         (c)  For purposes of calculating the formula under
  Subsection (a), the commissioner shall:
               (1)  if the value of (PL-CL) for a school district
  results in a negative number, use zero for the value of (PL-CL);
               (2)  use a maintenance and operations tax rate ("TR")
  of $1 for each open-enrollment charter school, each special-purpose
  school district established under Subchapter H, Chapter 11, and the
  South Texas Independent School District; and
               (3)  if (TAHG/TEHG) equals a value greater than one,
  use a value of one for (TAHG/TEHG).
         (d)  If funds remain available under this subchapter for a
  school year after determining initial grant amounts under
  Subsection (a), as adjusted to reflect the limits imposed by
  Subsection (b), the commissioner shall reapply the formula as
  necessary to award all available funds.
         Sec. 42.453.  ELIGIBILITY OF OPEN-ENROLLMENT CHARTER
  SCHOOL.  An open-enrollment charter school is eligible for a grant
  under this subchapter in the same manner as a school district.
         Sec. 42.454.  REGIONAL EDUCATION SERVICE CENTERS AND COUNTY
  DEPARTMENTS OF EDUCATION NOT ELIGIBLE. A regional education
  service center or a county department of education is not eligible
  for a grant under this subchapter.
         Sec. 42.455.  FUNDING LIMIT. The amount of grants awarded by
  the commissioner under this subchapter may not exceed $125 million
  for the 2017-2018 school year or $34 million for the 2018-2019
  school year.
         Sec. 42.456.  NO ADJUSTMENT BASED ON REVISED DATA. The
  commissioner may not adjust the amount of a school district's grant
  under this subchapter based on revisions to the district's data
  received after a grant has been awarded.
         Sec. 42.457.  RULES. The commissioner may adopt rules as
  necessary to administer this subchapter.
         Sec. 42.458.  DETERMINATION FINAL. A determination by the
  commissioner under this subchapter is final and may not be
  appealed.
         Sec. 42.459.  EXPIRATION. This subchapter expires September
  1, 2019.
         SECTION 35.  Section 466.355(c), Government Code, as
  repealed by Chapter 431 (S.B. 559), Acts of the 83rd Legislature,
  Regular Session, 2013, and amended by Chapter 1410 (S.B. 758), Acts
  of the 83rd Legislature, Regular Session, 2013, is reenacted and
  amended to read as follows:
         (c)  The [Each August the] comptroller shall:
               (1)  estimate the amount to be transferred to the
  foundation school fund on or before September 15; and
               (2)  notwithstanding Subsection (b)(4), transfer the
  amount estimated in Subdivision (1) to the foundation school fund
  before [August] installment payments are made under Section
  42.259(c)(8) or (d)(3) [42.259], Education Code.
         SECTION 36.  The following provisions of the Education Code
  are repealed:
               (1)  Section 29.097(g);
               (2)  Section 29.098(e);
               (3)  Section 39.233;
               (4)  Section 39.234;
               (5)  Sections 41.002(e), (f), and (g);
               (6)  Section 42.1541(c);
               (7)  Section 42.155;
               (8)  Section 42.160;
               (9)  Section 42.2513; and
               (10)  Section 42.2517.
         SECTION 37.  A school district that is entitled under
  Section 42.158, Education Code, to receive funding in the 2017-2018
  school year for the second year of student attendance at a new
  instructional facility is entitled for that year to the amount
  provided for the second year of student attendance as a result of
  the changes in law made by this Act.
         SECTION 38.  The changes made by this Act to Sections 42.259
  and 42.2591, Education Code, apply only to a payment from the
  foundation school fund that is made on or after September 1, 2018.  
  A payment to a school district from the foundation school fund that
  is made before that date is governed by Sections 42.259 and 42.2591,
  Education Code, as those sections existed before amendment by this
  Act, and the former law is continued in effect for that purpose.
         SECTION 39.  Not later than March 1, 2019, the Texas
  Education Agency shall conduct a review of technology applications
  and career and technology courses for grades 9 through 12 and
  provide recommendations to the State Board of Education for
  eliminating duplicative courses while ensuring certifications are
  aligned with the rigor of each individual course.
         SECTION 40.  Except as otherwise provided by this Act, this
  Act takes effect September 1, 2017.