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  H.B. No. 3646
 
 
 
 
AN ACT
  relating to public school finance and programs.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 1.001(b), Education Code, is amended to
  read as follows:
         (b)  Except as provided by Chapter 18, Chapter 19, Subchapter
  A of[,] Chapter 29, [or] Subchapter E of[,] Chapter 30, or Chapter
  30A, this code does not apply to students, facilities, or programs
  under the jurisdiction of the Department of Aging and Disability
  Services, the Department of State Health Services, the Health and
  Human Services Commission, the Texas Youth Commission, the Texas
  Department of Criminal Justice, a Job Corps program operated by or
  under contract with the United States Department of Labor, or any
  juvenile probation agency.
         SECTION 2.  Section 7.024(a), Education Code, is amended to
  read as follows:
         (a)  The investment capital fund consists of money
  appropriated for purposes of [transferred to] the fund [as provided
  by Section 42.152(l)]. The agency shall administer the fund. The
  purposes of this fund are to assist eligible public schools to
  implement practices and procedures consistent with deregulation
  and school restructuring in order to improve student achievement
  and to help schools identify and train parents and community
  leaders who will hold the school and the school district
  accountable for achieving high academic standards.
         SECTION 3.  Section 8.051(d), Education Code, is amended to
  read as follows:
         (d)  Each regional education service center shall maintain
  core services for purchase by school districts and campuses. The
  core services are:
               (1)  training and assistance in:
                     (A)  teaching each subject area assessed under
  Section 39.023; and
                     (B)  providing instruction in personal financial
  literacy as required under Section 28.0021;
               (2)  training and assistance in providing each program
  that qualifies for a funding allotment under Section 42.151,
  42.152, 42.153, or 42.156;
               (3)  assistance specifically designed for a school
  district rated academically unacceptable under Section 39.072(a)
  or a campus whose performance is considered unacceptable based on
  the indicators adopted under Section 39.051;
               (4)  training and assistance to teachers,
  administrators, members of district boards of trustees, and members
  of site-based decision-making committees;
               (5)  assistance specifically designed for a school
  district that is considered out of compliance with state or federal
  special education requirements, based on the agency's most recent
  compliance review of the district's special education programs; and
               (6)  assistance in complying with state laws and rules.
         SECTION 4.  Section 11.168, Education Code, is amended to
  read as follows:
         Sec. 11.168.  USE OF DISTRICT RESOURCES PROHIBITED FOR
  CERTAIN PURPOSES. Except as provided by Section 45.109 (a-1) and
  (a-2), the [The] board of trustees of a school district may not
  enter into an agreement authorizing the use of school district
  employees, property, or resources for the provision of materials or
  labor for the design, construction, or renovation of improvements
  to real property not owned or leased by the district.
         SECTION 5.  Section 12.106, Education Code, is amended by
  amending Subsection (a) and adding Subsections (a-1) and (a-2) to
  read as follows:
         (a)  A charter holder is entitled to receive for the
  open-enrollment charter school funding under Chapter 42 equal to
  the greater of:
               (1)  the amount of funding per student in weighted
  average daily attendance, excluding enrichment funding under
  Sections 42.302(a-1)(2) and (3), as they existed on January 1,
  2009, that would have been received for the school during the
  2009-2010 school year under Chapter 42 as it existed on January 1,
  2009, and an additional amount of $120 for each student in weighted
  average daily attendance; or
               (2)  the amount of funding per student in weighted
  average daily attendance, excluding enrichment funding under
  Section 42.302(a), to which the charter holder would be entitled
  for the school under Chapter 42 [as] if the school were a school
  district without a tier one local share for purposes of Section
  42.253 and without any local revenue [("LR")] for purposes of
  Section 42.2516 [42.302].
         (a-1)  In determining funding for an open-enrollment charter
  school under Subsection (a), adjustments under Sections 42.102,
  42.103, 42.104, and 42.105 [and the district enrichment tax rate
  ("DTR") under Section 42.302] are based on the average adjustment
  [and average district enrichment tax rate] for the state.
         (a-2)  In addition to the funding provided by Subsection (a),
  a charter holder is entitled to receive for the open-enrollment
  charter school enrichment funding under Section 42.302 based on the
  state average tax effort.
         SECTION 6.  Subchapter D, Chapter 12, Education Code, is
  amended by adding Section 12.1331 to read as follows:
         Sec. 12.1331.  WAGE INCREASE FOR CERTAIN PROFESSIONAL STAFF.
  (a) This section applies to a charter holder that on January 1,
  2009, operated an open-enrollment charter school.
         (b)  Beginning with the 2009-2010 school year, each charter
  holder shall increase the monthly salary of each classroom teacher,
  full-time speech pathologist, full-time librarian, full-time
  counselor, and full-time school nurse employed by the charter
  holder at an open-enrollment charter school by the greater of:
               (1)  $80; or
               (2)  the maximum uniform amount that, when combined
  with any resulting increases in the amount of contributions made by
  the charter holder for social security coverage for the specified
  employees or by the charter holder on behalf of the specified
  employees under Section 825.405, Government Code, may be provided
  using an amount equal to the product of $60 multiplied by the number
  of students in weighted average daily attendance in the school
  during the 2009-2010 school year.
         (c)  A payment under Subsection (b) is in addition to wages
  the charter holder would otherwise pay the employee during the
  school year.
         SECTION 7.  Section 19.007, Education Code, is amended by
  adding Subsection (g) to read as follows:
         (g)  In addition to other amounts received by the district
  under this section, the district is entitled to state aid in the
  amount necessary to fund the salary increases required by Section
  19.009(d-2).
         SECTION 8.  Section 19.009, Education Code, is amended by
  adding Subsections (d-2) and (d-3) to read as follows:
         (d-2)  Beginning with the 2009-2010 school year, the
  district shall increase the monthly salary of each classroom
  teacher, full-time speech pathologist, full-time librarian,
  full-time counselor certified under Subchapter B, Chapter 21, and
  full-time school nurse employed by the district by the greater of:
               (1)  $80; or
               (2)  the maximum uniform amount that, when combined
  with any resulting increases in the amount of contributions made by
  the district for social security coverage for the specified
  employees or by the district on behalf of the specified employees
  under Section 825.405, Government Code, may be provided using an
  amount equal to the product of $60 multiplied by the number of
  students in weighted average daily attendance in the district
  during the 2009-2010 school year.
         (d-3)  A payment under Subsection (d-2) is in addition to
  salary the district would otherwise pay the employees during the
  school year.
         SECTION 9.  Section 21.402, Education Code, is amended by
  amending Subsections (a), (d), and (g) and adding Subsections
  (c-1), (c-2), and (c-3) to read as follows:
         (a)  Except as provided by Subsection (d), (e), or (f), a
  school district must pay each classroom teacher, full-time
  librarian, full-time counselor certified under Subchapter B, or
  full-time school nurse not less than the minimum monthly salary,
  based on the employee's level of experience in addition to other
  factors, as determined by commissioner rule, determined by the
  following formula:
  MS = SF x FS
  where:
         "MS" is the minimum monthly salary;
         "SF" is the applicable salary factor specified by Subsection
  (c); and
         "FS" is the amount, as determined by the commissioner under
  Subsection (b), of state and local funds per weighted student,
  including funds provided under Section 42.2516 [42.2516(b)(1)(B),
  but not funds provided under Section 42.2516(b)(1)(A), (b)(1)(C),
  (b)(2), or (b)(3)], available to a district eligible to receive
  state assistance under Section 42.302 with a maintenance and
  operations tax rate per $100 of taxable value equal to the product
  of the state compression percentage, as determined under Section
  42.2516, multiplied by $1.50, except that the amount of state and
  local funds per weighted student does not include the amount
  attributable to the increase in the guaranteed level made by
  Chapter 1187, Acts of the 77th Legislature, Regular Session, 2001.
         (c-1)  Notwithstanding Subsection (a), for the 2009-2010 and
  2010-2011 school years, each school district shall increase the
  monthly salary of each classroom teacher, full-time speech
  pathologist, full-time librarian, full-time counselor certified
  under Subchapter B, and full-time school nurse by the greater of:
               (1)  $80; or
               (2)  the maximum uniform amount that, when combined
  with any resulting increases in the amount of contributions made by
  the district for social security coverage for the specified
  employees or by the district on behalf of the specified employees
  under Section 825.405, Government Code, may be provided using an
  amount equal to the product of $60 multiplied by the number of
  students in weighted average daily attendance in the school during
  the 2009-2010 school year.
         (c-2)  An increase in salary under Subsection (c-1) does not
  include:
               (1)  any amount an employee would have received for the
  2009-2010 or 2010-2011 school year, as applicable, under the
  district's salary schedule for the 2008-2009 school year, if that
  schedule had been in effect for the 2009-2010 or 2010-2011 school
  year, including any local supplement and any money representing a
  career ladder supplement the employee would have received in the
  2009-2010 or 2010-2011 school year; or
               (2)  any part of the salary to which an employee is
  entitled under Subsection (a).
         (c-3)  Subsections (c-1) and (c-2) and this subsection
  expire September 1, 2011.
         (d)  A classroom teacher, full-time speech pathologist,
  full-time librarian, full-time counselor certified under
  Subchapter B, or full-time school nurse employed by a school
  district in the 2010-2011 [2006-2007] school year is, as long as the
  employee is employed by the same district, entitled to a salary that
  is at least equal to the salary the employee received for the
  2010-2011 [2006-2007] school year.
         (g)  The commissioner may adopt rules to govern the
  application of this section, including rules that:
               (1)  require the payment of a minimum salary under this
  section to a person employed in more than one capacity for which a
  minimum salary is provided and whose combined employment in those
  capacities constitutes full-time employment; and
               (2)  specify the credentials a person must hold to be
  considered a speech pathologist or school nurse under this section.
         SECTION 10.  Section 21.415(a), Education Code, is amended
  to read as follows:
         (a)  A school district shall provide in employment contracts
  that qualifying employees may receive an incentive payment under an
  awards program established under Subchapter [N or] O if the
  district participates in the program.
         SECTION 11.  Sections 21.703(a) and (d), Education Code, are
  amended to read as follows:
         (a)  Each state fiscal year, the commissioner shall deposit
  an amount determined by the General Appropriations Act [the sum of
  $1,000 multiplied by the number of classroom teachers in this
  state] to the credit of the educator excellence fund in the general
  revenue fund.  Each state fiscal year, the agency shall use[:
               [(1)     not more than $100 million of the funds in the
  educator excellence fund to provide grant awards under the awards
  for student achievement program established under Subchapter N; and
               [(2)  any remaining] funds in the educator excellence
  fund to provide a qualifying school district a grant in an amount
  determined by:
               (1) [(A)]  dividing the amount of [remaining] money
  available for distribution in the educator excellence fund by the
  total number of students in average daily attendance in qualifying
  districts for that fiscal year; and
               (2) [(B)]  multiplying the amount determined under
  Subdivision (1) [Paragraph (A)] by the number of students in
  average daily attendance in the district.
         (d)  Notwithstanding Subsection (a) [or (b)], the agency may
  use funds in the educator excellence fund as necessary to conduct or
  contract with another entity to conduct the evaluation required
  under Section 21.706.  This subsection expires June 1, 2011.
         SECTION 12.  Section 21.704, Education Code, is amended by
  adding Subsection (c-1) to read as follows:
         (c-1)  A local awards plan must provide for teachers and
  principals eligible to receive awards under the plan to be notified
  of the specific criteria and any formulas on which the awards will
  be based before the beginning of the period on which the awards will
  be based.
         SECTION 13.  Section 21.705, Education Code, is amended to
  read as follows:
         Sec. 21.705.  AWARD PAYMENTS. A school district must use at
  least 60 percent of grant funds awarded to the district under this
  subchapter to directly award classroom teachers and principals who
  effectively improve student achievement as determined by
  meaningful, objective measures.  The remaining funds must be used
  only to:
               (1)  provide teacher induction and mentoring support,
  including stipends to effective mentors or teacher coaches;
               (2)  provide stipends to classroom teachers who are
  certified in a subject that is designated by the commissioner as
  commonly experiencing a critical shortage of teachers;
               (3)  provide stipends to classroom teachers who are
  certified under Subchapter B in the main subject area in which they
  teach;
               (4)  provide stipends to recruit and retain classroom
  teachers and principals with proven records of success for
  improving student performance who are assigned to campuses at which
  the district has experienced difficulty assigning or retaining
  teachers;
               (5)  [provide stipends to classroom teachers who hold
  postgraduate degrees;
               [(6)     provide awards to principals who effectively
  increase student performance as determined by objective measures;
               [(7)]  provide awards to other campus employees who
  demonstrate excellence; [or]
               (6) [(8)]  implement the components of a Teacher
  Advancement Program (TAP), including:
                     (A)  an instructionally focused accountability
  system; and
                     (B)  the adjustment of teaching schedules to
  permit ongoing applied professional growth; or
               (7)  provide funding for previously developed
  incentive programs.
         SECTION 14.  Section 21.706(a), Education Code, is amended
  to read as follows:
         (a)  Using funds from the educator excellence fund created
  under Section 21.703, the agency shall conduct or contract with
  another entity to conduct a comprehensive evaluation of the [awards
  for student achievement program established under Subchapter N and
  the educator excellence awards] program [established under this
  subchapter].  The evaluation must include:
               (1)  a descriptive analysis of the design and
  implementation of the [awards for student achievement program and
  the educator excellence awards] program at participating campuses
  or school districts, including detailed descriptions of the models
  and approaches used by the campuses or districts in distributing
  incentive awards to classroom teachers;
               (2)  detailed information regarding the distribution
  of incentive awards to classroom teachers under the [awards for
  student achievement program and the educator excellence awards]
  program, including the measurements used by the campuses or
  districts in determining the amounts of incentive awards to
  distribute to classroom teachers;
               (3)  a comprehensive, quantitative analysis of the
  impact of the [awards for student achievement program and the
  educator excellence awards] program at participating campuses or
  districts, including the impact of the various incentive award
  distribution models used by the campuses or districts on key
  outcomes in the program [programs]; and
               (4)  a summary of the approaches used by participating
  campuses or districts in distributing grant funds that are not
  specifically designated for distribution as incentive awards for
  classroom teachers and an assessment of whether those funds are
  used effectively by the participating campuses or districts.
         SECTION 15.  Section 28.009, Education Code, is amended by
  adding Subsection (a-2) to read as follows:
         (a-2)  A school district is not required to pay a student's
  tuition or other associated costs for taking a course under this
  section. This subsection expires September 1, 2011.
         SECTION 16.  Subchapter A, Chapter 29, Education Code, is
  amended by adding Section 29.018 to read as follows:
         Sec. 29.018.  SPECIAL EDUCATION GRANT. (a) From funds
  appropriated for the purposes of this section, federal funds, or
  any other funds available, the commissioner shall make grants
  available to school districts to assist districts in covering the
  cost of educating students with disabilities.
         (b)  A school district is eligible to apply for a grant under
  this section if:
               (1)  the district does not receive sufficient funds,
  including state funds provided under Section 42.151 and federal
  funds, for a student with disabilities to pay for the special
  education services provided to the student; or
               (2)  the district does not receive sufficient funds,
  including state funds provided under Section 42.151 and federal
  funds, for all students with disabilities in the district to pay for
  the special education services provided to the students.
         (c)  A school district that applies for a grant under this
  section must provide the commissioner with a report comparing the
  state and federal funds received by the district for students with
  disabilities and the expenses incurred by the district in providing
  special education services to students with disabilities.
         (d)  Expenses that may be included by a school district in
  applying for a grant under this section include the cost of training
  personnel to provide special education services to a student with
  disabilities.
         (e)  A school district that receives a grant under this
  section must educate students with disabilities in the least
  restrictive environment that is appropriate to meet the student's
  educational needs.
         (f)  The commissioner shall adopt rules as necessary to
  administer this section.
         SECTION 17.  Section 29.082, Education Code, is amended by
  adding Subsection (h) to read as follows:
         (h)  The commissioner shall give priority to applications
  for extended year programs to districts with high concentrations of
  educationally disadvantaged students.
         SECTION 18.  Section 29.0822, Education Code, is amended by
  amending Subsections (a), (c), and (d) and adding Subsection (e) to
  read as follows:
         (a)  Notwithstanding Section 25.081 or 25.082, a school
  district may apply to the commissioner to provide a flexible school
  day program for students [in grades nine through 12] who:
               (1)  have dropped out of school or are at risk of
  dropping out of school as defined by Section 29.081; [or]
               (2)  attend a campus that is implementing an innovative
  redesign of the campus or an early college high school under a plan
  approved by the commissioner; or
               (3)  as a result of attendance requirements under
  Section 25.092, will be denied credit for one or more classes in
  which the students have been enrolled.
         (c)  Except in the case of a course designed for a student
  described by Subsection (a)(3), a [A] course offered in a program
  under this section must provide for at least the same number of
  instructional hours as required for a course offered in a program
  that meets the required minimum number of instructional days under
  Section 25.081 and the required length of school day under Section
  25.082.
         (d)  The commissioner may adopt rules for the administration
  of this section, including rules establishing application
  requirements. The commissioner shall calculate average daily
  attendance for students served under this section. The
  commissioner shall allow accumulations of hours of instruction for
  students whose schedule would not otherwise allow full state
  funding. Funding under this subsection shall be determined based
  on the number of instructional days in the school district calendar
  and a seven-hour school day, but attendance may be cumulated over a
  school year, including any summer or vacation session. The
  attendance of students who accumulate less than the number of
  attendance hours required under this subsection shall be
  proportionately reduced for funding purposes. The commissioner
  may:
               (1)  set maximum funding amounts for an individual
  course under this section; and
               (2)  limit funding for the attendance of a student
  described by Subsection (a)(3) in a course under this section to
  funding only for the attendance necessary for the student to earn
  class credit that, as a result of attendance requirements under
  Section 25.092, the student would not otherwise be able to receive
  without retaking the class.
         (e)  A student described by Subsection (a)(3) may enroll in a
  course in a program under this section offered during the school
  year or during the period in which school is recessed for the summer
  to enable the student to earn class credit that, as a result of
  attendance requirements under Section 25.092, the student would not
  otherwise be able to receive without retaking the class.
         SECTION 19.  Section 29.085, Education Code, is amended by
  adding Subsection (e) to read as follows:
         (e)  From funds appropriated for the purpose, the
  commissioner shall distribute funds for programs under this
  section. In distributing those funds, the commissioner shall give
  preference to school districts that received funds for a program
  under this section for the preceding school year and then to the
  districts that have the highest concentration of students who are
  pregnant or who are parents. To receive funds for a program under
  this section, a school district must apply to the commissioner. A
  program established under this section is required only in school
  districts in which the program is financed by funds distributed
  under this subsection and any other funds available for the
  program.
         SECTION 20.  Section 29.097(g), Education Code, is amended
  to read as follows:
         (g)  For purposes of Subsection (f)(2), a school district is
  encouraged to use funds allocated under Section 42.160
  [42.2516(b)(3)].
         SECTION 21.  Section 29.098(h), Education Code, is amended
  to read as follows:
         (h)  For purposes of Subsection (g)(2), a school district is
  encouraged to use funds allocated under Section 42.160
  [42.2516(b)(3)].
         SECTION 22.  Section 29.190, Education Code, is amended by
  amending Subsections (a) and (c) and adding Subsection (e) to read
  as follows:
         (a)  A student is entitled to a subsidy under this section
  if:
               (1)  the student:
                     (A) [(1)]  successfully completes the career and
  technology program of a school district in which the student
  receives training and instruction for employment in a current or
  emerging high-demand, high-wage, high-skill [certain trade or]
  occupation, as determined under Subsection (e); or
                     (B)  is enrolled in a special education program
  under Subchapter A;
               (2)  the student passes a certification examination to
  qualify for a license or certificate for the [trade or] occupation;
  and
               (3)  the student submits to the district a written
  application in the form, time, and manner required by the district
  for the district to subsidize the cost of an examination described
  by Subdivision (2) [demonstrates financial need].
         (c)  On approval by the commissioner, the agency shall pay
  each school district [eligible student] an amount equal to the cost
  paid by the district or student for the certification examination.
  To obtain reimbursement for a subsidy paid under this section, a
  district [student] must:
               (1)  pay the fee for the examination or pay the student
  the amount of the fee paid by the student for the examination; and
               (2)  submit to the commissioner a written application
  on a form prescribed by the commissioner stating [demonstrating
  financial need and] the amount of the fee paid under Subdivision (1)
  [by the student] for the certification examination.
         (e)  The commissioner, in collaboration with the
  commissioner of higher education and the Texas Workforce
  Commission, shall determine as necessary the occupations that
  qualify for purposes of this section.
         SECTION 23.  Section 29.915, Education Code, is amended by
  amending Subsection (d) and adding Subsection (f) to read as
  follows:
         (d)  The agency shall develop an application and selection
  process for selecting school districts to participate in the
  program. The agency may select not more than 100 [25] school
  districts to participate in the program.
         (f)  Not later than January 1, 2011, the agency shall provide
  each member of the legislature with a report relating to the
  implementation and effectiveness of the program. This subsection
  expires February 1, 2011.
         SECTION 24.  Section 29.918(a), Education Code, is amended
  to read as follows:
         (a)  Notwithstanding Section 39.114 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
  [42.2516(b)(3)] 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.
         SECTION 25.  Section 29.919(e), Education Code, is amended
  to read as follows:
         (e)  As a condition of receiving a state grant, a campus must
  contribute additional funding for activities provided at the campus
  through the program, in an amount equal to at least $100 each school
  year for each student in an eligible grade level served through the
  program. The additional funding required by this subsection may
  consist of local funds, private funds, or state funds other than
  grant funds provided under this section. For program activities
  provided at the high school level, the high school allotment
  provided under Section 42.160 [42.2516(b)(3)] may be used to meet
  the additional funding requirement prescribed by this subsection.
         SECTION 26.  Section 30A.002, Education Code, is amended by
  amending Subsection (b) and adding Subsection (c) to read as
  follows:
         (b)  A student is eligible to enroll full-time in courses
  provided through the state virtual school network only if[:
               [(1)]  the student was enrolled in a public school in
  this state in the preceding school year.
         (c)  Notwithstanding Subsection (a)(3) or (b), a student is
  eligible to enroll in one or more courses provided through the state
  virtual school network or enroll full-time in courses provided
  through the network if[; or
               [(2)]  the student:
               (1) [(A)]  is a dependent of a member of the United
  States military;
               (2) [(B)]  was previously enrolled in high school in
  this state; and
               (3) [(C)]  does not reside in this state due to a
  military deployment or transfer.
         SECTION 27.  Section 30A.004, Education Code, is amended by
  adding Subsection (b-1) to read as follows:
         (b-1)  Requirements imposed by or under this chapter do not
  apply to a virtual course provided by a school district only to
  district students if the course is not provided as part of the state
  virtual school network.
         SECTION 28.  Subchapter A, Chapter 30A, Education Code, is
  amended by adding Section 30A.006 to read as follows:
         Sec. 30A.006.  AUTHORIZATION FOR CERTAIN ELECTRONIC COURSES
  AND PROGRAMS. (a) An electronic course or program that was offered
  or could have been offered during the 2008-2009 school year under
  Section 29.909, as that section existed on January 1, 2009, may be
  offered during a subsequent school year through the state virtual
  school network.
         (b)  The commissioner may by rule modify any provision of
  this chapter necessary to provide for the transition of an
  electronic course or program from the authority to operate under
  former Section 29.909 to the authority to operate under this
  chapter.
         SECTION 29.  Section 30A.101(b), Education Code, is amended
  to read as follows:
         (b)  An open-enrollment charter school campus is eligible to
  act as a provider school under this chapter only if the campus
  [school] is rated recognized or higher under Section 39.072, except
  that a campus may act as a provider school to students receiving
  educational services under the supervision of a juvenile probation
  department, the Texas Youth Commission, or the Texas Department of
  Criminal Justice if the campus is rated academically acceptable or
  higher. A campus [and] may serve as a provider school only:
               (1)  to a student within the school district in which
  the campus [school] is located or within its service area,
  whichever is smaller; or
               (2)  to another student in the state:
                     (A)  through an agreement with the school district
  in which the student resides; or
                     (B)  if the student receives educational services
  under the supervision of a juvenile probation department, the Texas
  Youth Commission, or the Texas Department of Criminal Justice,
  through an agreement with the applicable agency [administering
  authority under Section 30A.153].
         SECTION 30.  Section 30A.104, Education Code, is amended to
  read as follows:
         Sec. 30A.104.  COURSE ELIGIBILITY IN GENERAL. A course
  offered through the state virtual school network must:
               (1)  be in a specific subject that is part of the
  required curriculum under Section 28.002(a);
               (2)  be aligned with the essential knowledge and skills
  identified under Section 28.002(c) for a grade level at or above
  grade level three; and
               (3)  be the equivalent in instructional rigor and scope
  to a course that is provided in a traditional classroom setting
  during:
                     (A)  a semester of 90 instructional days; and
                     (B)  a school day that meets the minimum length of
  a school day required under Section 25.082.
         SECTION 31.  Sections 30A.105(c) and (d), Education Code,
  are amended to read as follows:
         (c)  The agency shall [A school district, open-enrollment
  charter school, or public or private institution of higher
  education that submits an electronic course to the administering
  authority for approval must] pay [a fee in an amount established by
  the commissioner as sufficient to recover] the reasonable costs of
  [to the administering authority in] evaluating and approving
  electronic courses. If funds available to the agency for that
  purpose are insufficient to pay the costs of evaluating and
  approving all electronic courses submitted for evaluation and
  approval, the agency shall give priority to paying the costs of
  evaluating and approving the following courses:
               (1)  courses that satisfy high school graduation
  requirements;
               (2)  courses that would likely benefit a student in
  obtaining admission to a postsecondary institution;
               (3)  courses, including dual credit courses, that allow
  a student to earn college credit or other advanced credit;
               (4)  courses in subject areas most likely to be highly
  beneficial to students receiving educational services under the
  supervision of a juvenile probation department, the Texas Youth
  Commission, or the Texas Department of Criminal Justice; and
               (5)  courses in subject areas designated by the
  commissioner as commonly experiencing a shortage of teachers.
         (d)  If the agency determines that the costs of evaluating
  and approving a submitted electronic course will not be paid by the
  agency due to a shortage of funds available for that purpose, the
  [The administering authority shall waive the fee required by
  Subsection (c) if a] school district, open-enrollment charter
  school, or public or private institution of higher education that
  submitted the [applies for approval of an electronic] course for
  evaluation and approval may pay the costs in order to ensure that
  evaluation of the course occurs [that was developed independently
  by the district, school, or institution. For purposes of this
  subsection, an electronic course is developed independently by a
  district, school, or institution if a district, school, or
  institution employee is responsible for developing substantially
  each aspect of the course, including:
               [(1)     determining the curriculum elements to be
  included in the course;
               [(2)     selecting any instructional materials for the
  course;
               [(3)     determining the manner in which instruction is to
  be delivered;
               [(4)     creating a lesson plan or similar description of
  the instructional aspects of the course;
               [(5)     determining any special projects or assignments a
  student in the course must complete; and
               [(6)     determining the manner in which a student's
  progress in the course will be measured].
         SECTION 32.  Subchapter C, Chapter 30A, Education Code, is
  amended by adding Section 30A.1051 to read as follows:
         Sec. 30A.1051.  ELECTRONIC COURSE PORTABILITY. A student
  who transfers from one educational setting to another after
  beginning enrollment in an electronic course is entitled to
  continue enrollment in the course.
         SECTION 33.  Section 30A.107(a), Education Code, is amended
  to read as follows:
         (a)  A provider school district or school may offer
  electronic courses to:
               (1)  students who reside in this state; and
               (2)  students who reside outside this state and who
  meet the eligibility requirements under Section 30A.002(c)
  [30A.002(b)].
         SECTION 34.  Section 30A.109, Education Code, is amended to
  read as follows:
         Sec. 30A.109.  COMPULSORY ATTENDANCE. The commissioner by
  rule shall adopt procedures for reporting and verifying the
  attendance of a student enrolled in an electronic course provided
  through the state virtual school network. The rules may modify the
  application of Sections 25.085, 25.086, and 25.087 for a student
  enrolled in an electronic course but must require participation in
  an educational program equivalent to the requirements prescribed by
  those sections.
         SECTION 35.  Section 30A.111, Education Code, is amended to
  read as follows:
         Sec. 30A.111.  TEACHER AND INSTRUCTOR QUALIFICATIONS. (a)
  Each teacher of an electronic course offered by a school district or
  open-enrollment charter school through the state virtual school
  network must:
               (1)  be certified under Subchapter B, Chapter 21, to
  teach that course and grade level; and
               (2)  successfully complete the appropriate
  professional development course provided under Section 30A.112(a)
  or 30A.1121 before teaching an electronic course offered through
  the network.
         (b)  The commissioner by rule shall establish procedures for
  verifying successful completion by a teacher of the appropriate
  professional development course required by Subsection (a)(2).
         (c)  The commissioner by rule shall establish qualifications
  and professional development requirements applicable to college
  instructors providing instruction in dual credit courses through
  the state virtual school network that allow a student to earn high
  school credit and college credit or other credit.
         SECTION 36.  Subchapter C, Chapter 30A, Education Code, is
  amended by adding Section 30A.1121 to read as follows:
         Sec. 30A.1121.  ALTERNATIVE EDUCATOR PROFESSIONAL
  DEVELOPMENT. (a) Subject to Subsection (b), a school district or
  open-enrollment charter school may provide professional
  development courses to teachers seeking to become authorized to
  teach electronic courses provided through the state virtual school
  network. A district or school may provide a professional
  development course that is approved under Subsection (b) to any
  interested teacher, regardless of whether the teacher is employed
  by the district or school.
         (b)  The agency shall review each professional development
  course sought to be provided by a school district or
  open-enrollment charter school under Subsection (a) to determine if
  the course meets the quality standards established under Section
  30A.113. If a course meets those standards, the district or school
  may provide the course for purposes of enabling a teacher to comply
  with Section 30A.111(a)(2).
         SECTION 37.  Section 30A.151, Education Code, is amended by
  adding Subsection (f) to read as follows:
         (f)  For a full-time electronic course program offered
  through the state virtual school network for a grade level at or
  above grade level three but not above grade level eight, a school
  district or open-enrollment charter school is entitled to receive
  federal, state, and local funding for a student enrolled in the
  program in an amount equal to the funding the district or school
  would otherwise receive for a student enrolled in the district or
  school. The district or school may calculate the average daily
  attendance of a student enrolled in the program based on:
               (1)  hours of contact with the student;
               (2)  the student's successful completion of a course;
  or
               (3)  a method approved by the commissioner.
         SECTION 38.  Section 30A.155, Education Code, is amended by
  amending Subsections (a), (c), and (d) and adding Subsections (a-1)
  and (c-1) to read as follows:
         (a)  A school district or open-enrollment charter school may
  charge a fee for enrollment in an electronic course provided
  through the state virtual school network to a student who resides in
  this state and:
               (1)  is enrolled in a school district or
  open-enrollment charter school as a full-time student; and
               (2)  is enrolled in a course load greater than that
  normally taken by students in the equivalent grade level in other
  school districts or open-enrollment charter schools[; and
               [(3)     does not qualify for accelerated student funding
  under Section 30A.154].
         (a-1)  A school district or open-enrollment charter school
  may charge a fee for enrollment in an electronic course provided
  through the state virtual school network during the summer.
         (c)  The amount of a fee charged a student under Subsection
  (a), (a-1), or (b) for each electronic course in which the student
  enrolls through the state virtual school network may not exceed the
  lesser of:
               (1)  the cost of providing the course; or
               (2)  $400.
         (c-1)  A school district or open-enrollment charter school
  that is not the provider school district or school may charge a
  student enrolled in the district or school a nominal fee, not to
  exceed the amount specified by the commissioner, if the student
  enrolls in an electronic course provided through the state virtual
  school network that exceeds the course load normally taken by
  students in the equivalent grade level. A juvenile probation
  department or state agency may charge a comparable fee to a student
  under the supervision of the department or agency.
         (d)  Except as provided by this section [Subsection (a) or
  (b)], the state virtual school network may not charge a fee to
  students for electronic courses provided through the network.
         SECTION 39.  Section 33.002(a), Education Code, is amended
  to read as follows:
         (a)  From funds appropriated for the purpose or other funds
  that may be used for the purpose, the commissioner shall distribute
  funds for programs under this subchapter. In distributing those
  funds, the commissioner shall give preference to a school district
  that received funds under this subsection for the preceding school
  year and then to the districts that have the highest concentration
  of students at risk of dropping out of school, as described by
  Section 29.081. To receive funds for the program, a school district
  must apply to the commissioner. For each school year that a school
  district receives funds under this subsection, the district shall
  allocate an amount of local funds for school guidance and
  counseling programs that is equal to or greater than the amount of
  local funds that the school district allocated for that purpose
  during the preceding school year. This section applies only to a
  school district that receives funds as provided by this subsection
  [Section 42.152(i)].
         SECTION 40.  Sections 39.024(c) and (d), Education Code, are
  amended to read as follows:
         (c)  Using funds appropriated for purposes of this
  subsection, the [The] agency shall develop study guides for the
  assessment instruments administered under Sections 39.023(a) and
  (c). To assist parents in providing assistance during the period
  that school is recessed for summer, each school district shall
  distribute the study guides to parents of students who do not
  perform satisfactorily on one or more parts of an assessment
  instrument administered under this subchapter.
         (d)  Using funds appropriated for purposes of this
  subsection, the [The] agency shall develop and make available
  teacher training materials and other teacher training resources to
  assist teachers in enabling students of limited English proficiency
  to meet state performance expectations. The teacher training
  resources shall be designed to support intensive, individualized,
  and accelerated instructional programs developed by school
  districts for students of limited English proficiency.
         SECTION 41.  Section 39.031, Education Code, is amended to
  read as follows:
         Sec. 39.031.  COST. [(a)] The cost of preparing,
  administering, or grading the assessment instruments and [shall be
  paid from the funds allotted under Section 42.152, and each
  district shall bear the cost in the same manner described for a
  reduction in allotments under Section 42.253. If a district does
  not receive an allotment under Section 42.152, the commissioner
  shall subtract the cost from the district's other foundation school
  fund allotments.
         [(b)  The cost of] releasing the question and answer keys
  under Section 39.023(e) shall be paid from amounts appropriated to
  the agency.
         SECTION 42.  The heading to Section 39.114, Education Code,
  is amended to read as follows:
         Sec. 39.114.  USE OF HIGH SCHOOL ALLOTMENT.
         SECTION 43.  Sections 39.114(a) and (b), Education Code, are
  amended to read as follows:
         (a)  Except as provided by Subsection (b), a school district
  or campus must use funds allocated under Section 42.160
  [42.2516(b)(3)] to:
               (1)  implement or administer a college readiness
  program that provides academic support and instruction to prepare
  underachieving students for entrance into an institution of higher
  education;
               (2)  implement or administer a program that encourages
  students to pursue advanced academic opportunities, including
  early college high school programs and dual credit, advanced
  placement, and international baccalaureate courses;
               (3)  implement or administer a program that provides
  opportunities for students to take academically rigorous course
  work, including four years of mathematics and four years of science
  at the high school level;
               (4)  implement or administer a program, including
  online course support and professional development, that aligns the
  curriculum for grades six through 12 with postsecondary curriculum
  and expectations; or
               (5)  implement or administer other high school
  completion and success initiatives in grades six through 12
  approved by the commissioner.
         (b)  A school district may use funds allocated under Section
  42.160 [42.2516(b)(3)] on any instructional program in grades six
  through 12 other than an athletic program if:
               (1)  the district is recognized as exceptional by the
  commissioner under the academic accountability indicator adopted
  under Section 39.051(b)(13); and
               (2)  the district's completion rates for grades nine
  through 12 meet or exceed completion rate standards required by the
  commissioner to achieve a rating of exemplary under Section 39.072.
         SECTION 44.  Section 41.002(a), Education Code, is amended
  to read as follows:
         (a)  A school district may not have a wealth per student that
  exceeds:
               (1)  the wealth per student that generates the amount
  of maintenance and operations tax revenue per weighted student
  available to a district with maintenance and operations tax revenue
  per cent of tax effort equal to the maximum amount provided per cent
  under Section 42.101 [at the 88th percentile in wealth per
  student], for the district's maintenance and operations tax effort
  equal to or less than the rate equal to the product of the state
  compression percentage, as determined under Section 42.2516,
  multiplied by the maintenance and operations tax rate adopted by
  the district for the 2005 tax year;
               (2)  the wealth per student that generates the amount
  of maintenance and operations tax revenue per weighted student
  available to the Austin Independent School District, as determined
  by the commissioner in cooperation with the Legislative Budget
  Board, for the first six cents by which the district's maintenance
  and operations tax rate exceeds the rate equal to the 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, subject to Section 41.093(b-1);
  or
               (3)  $319,500, for the district's maintenance and
  operations tax effort that exceeds the first six cents by which the
  district's maintenance and operations tax effort exceeds the rate
  equal to the product of the state compression percentage, as
  determined under Section 42.2516, multiplied by the maintenance and
  operations tax rate adopted by the district for the 2005 tax year.
         SECTION 45.  Section 41.093(b-1), Education Code, is amended
  to read as follows:
         (b-1)  If the guaranteed level of state and local funds per
  weighted student per cent of tax effort under Section
  42.302(a-1)(1) [42.302(a-1)(2)] for which state funds are
  appropriated for a school year is an amount at least equal to the
  amount of revenue per weighted student per cent of tax effort
  available to the Austin Independent School District, as determined
  by the commissioner in cooperation with the Legislative Budget
  Board, the commissioner, in computing the amounts described by
  Subsections (a)(1) and (2) and determining the cost of an
  attendance credit, shall exclude maintenance and operations tax
  revenue resulting from the first six cents by which a district's
  maintenance and operations tax rate exceeds the rate equal to the
  product of the state compression percentage, as determined under
  Section 42.2516, multiplied by the maintenance and operations tax
  rate adopted by the district for the 2005 tax year.
         SECTION 46.  Section 41.121, Education Code, is amended to
  read as follows:
         Sec. 41.121.  AGREEMENT. (a) The board of trustees of a
  district with a wealth per student that exceeds the equalized
  wealth level may execute an agreement to educate the students of
  another district in a number that, when the weighted average daily
  attendance of the students served is added to the weighted average
  daily attendance of the contracting district, is sufficient, 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. The agreement is not
  effective unless the commissioner certifies that the transfer of
  weighted average daily attendance will not result in any of the
  contracting districts' wealth per student being greater than the
  equalized wealth level and that the agreement requires an
  expenditure per student in weighted average daily attendance that
  is at least equal to the amount per student in weighted average
  daily attendance required under Section 41.093[, unless it is
  determined by the commissioner that a quality educational program
  can be delivered at a lesser amount. The commissioner may approve a
  special financial arrangement between districts if that
  arrangement serves the best educational interests of the state].
         (b)  Notwithstanding the amendment of this section by H.B.
  No. 3646, Acts of the 81st Legislature, Regular Session, 2009, the
  commissioner may provide for the continuation of an agreement in
  existence during the 2008-2009 school year under the authority of
  this section, as it existed on May 1, 2009, and implementing rules
  as they existed on May 1, 2009, if the commissioner determines that
  the agreement benefits the education of students in the districts
  subject to the agreement. This subsection expires September 1,
  2011.
         SECTION 47.  Section 42.005(g), Education Code, is amended
  to read as follows:
         (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.
         SECTION 48.  Effective September 1, 2011, Section 42.005(g),
  Education Code, is amended to read as follows:
         (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, 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.
         SECTION 49.  Subchapter A, Chapter 42, Education Code, is
  amended by adding Section 42.008 to read as follows:
         Sec. 42.008.  LIMITATION ON REVENUE INCREASES. (a)
  Notwithstanding any other provision of this title, a school
  district is not entitled in any school year to receive an amount of
  state and local maintenance and operations revenue per student in
  weighted average daily attendance that exceeds by more than $350
  the amount of state and local maintenance and operations revenue
  per student in weighted average daily attendance received by the
  district during the preceding school year.
         (a-1)  Subsection (a) applies beginning with the 2010-2011
  school year. For the 2009-2010 school year, a school district is
  not entitled to receive an amount of state and local maintenance and
  operations revenue per student in weighted average daily attendance
  that exceeds by more than $350 the amount of state and local
  maintenance and operations revenue per student in weighted average
  daily attendance that the district would have received during that
  year under Chapter 41 and this chapter, as those chapters existed on
  January 1, 2009, at a maintenance and operations tax rate equal to
  the product of the state compression percentage for that year, as
  determined under Section 42.2516, multiplied by the maintenance and
  operations tax rate adopted by the district for the 2005 tax year.
  This subsection expires September 1, 2010.
         (b)  Enrichment revenue to which a school district is
  entitled under Section 42.302 is not included for purposes of
  determining the limitation imposed by this section.
         (c)  The commissioner shall make adjustments to amounts due
  to a school district under this chapter or amounts required for a
  district to comply with Chapter 41 as necessary to comply with the
  limitation imposed by this section.
         (d)  A determination by the commissioner under this section
  is final and may not be appealed.
         SECTION 50.  Section 42.101, Education Code, is amended to
  read as follows:
         Sec. 42.101.  BASIC ALLOTMENT. (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 an allotment [in an amount]
  equal to the lesser of $4,765 or the amount that results from the
  following formula:
  A = $4,765 X (DCR/MCR)
  where:
         "A" is the allotment to which a district is entitled;
         "DCR" is the district's compressed tax rate, which is the
  product of the state compression percentage, as determined under
  Section 42.2516, multiplied by the maintenance and operations tax
  rate adopted by the district for the 2005 tax year; and
         "MCR" is the state maximum compressed tax rate, which is the
  product of the state compression percentage, as determined under
  Section 42.2516, multiplied by $1.50 [product of the amount per
  student per cent of tax effort available to a district at the
  percentile in wealth per student specified by Section
  42.302(a-1)(1), multiplied by 86].
         (a-1)  Subsection (a) applies beginning with the 2013-2014
  school year. For the 2009-2010 through 2012-2013 school years,
  Subsection (a) applies, except each reference to $4,765 in that
  subsection is replaced with an amount equal to the greater of:
               (1)  $4,765; or
               (2)  the amount equal to the product of .0165 and the
  average statewide property value per weighted student.
         (a-2)  Subsection (a-1) and this subsection expire September
  1, 2013.
         (b)  A greater amount for any school year may be provided by
  appropriation.
         SECTION 51.  Section 42.106, Education Code, is amended to
  read as follows:
         Sec. 42.106.  TUITION ALLOTMENT [ADJUSTED PROPERTY VALUE]
  FOR DISTRICTS NOT OFFERING ALL GRADE LEVELS. A [For purposes of
  this chapter, the taxable value of property of a] school district
  that contracts for students residing in the district to be educated
  in another district under Section 25.039(a) is entitled to receive
  an allotment equal to [adjusted by applying the formula:
  [ADPV = DPV - (TN/.015)
  [where:
         ["ADPV" is the district's adjusted taxable value of property;
         ["DPV" is the taxable value of property in the district for
  the preceding tax year determined under Subchapter M, Chapter 403,
  Government Code; and
         ["TN" is] the total amount of tuition required to be paid by
  the district under Section 25.039 [for the school year for which the
  adjustment is made], not to exceed the amount specified by
  commissioner rule under Section 25.039(b).
         SECTION 52.  Section 42.152(c), Education Code, is amended
  to read as follows:
         (c)  Funds allocated under this section shall be used to fund
  supplemental programs and services designed to eliminate any
  disparity in performance on assessment instruments administered
  under Subchapter B, Chapter 39, or disparity in the rates of high
  school completion between students at risk of dropping out of
  school, as defined by Section 29.081, and all other students.
  Specifically, the funds, other than an indirect cost allotment
  established under State Board of Education rule, which may not
  exceed 45 [15] percent, may be used to meet the costs of providing a
  compensatory, intensive, or accelerated instruction program under
  Section 29.081 or an alternative education program established
  under Section 37.008 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 Subsection (a) for a purpose authorized
  in this subsection but is not otherwise subject to Subchapter C,
  Chapter 29. Notwithstanding any other provisions of this section:
               (1)  to ensure that a sufficient amount of the funds
  allotted under this section are available to supplement
  instructional programs and services, no more than 18 percent of the
  funds allotted under this section may be used to fund disciplinary
  alternative education programs established under Section 37.008;
               (2)  the commissioner may waive the limitations of
  Subdivision (1) upon an annual petition, by a district's board and a
  district's site-based decision making committee, presenting the
  reason for the need to spend supplemental compensatory education
  funds on disciplinary alternative education programs under Section
  37.008, provided that:
                     (A)  the district in its petition reports the
  number of students in each grade level, by demographic subgroup,
  not making satisfactory progress under the state's assessment
  system; and
                     (B)  the commissioner makes the waiver request
  information available annually to the public on the agency's
  website; and
               (3)  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.
         SECTION 53.  Section 42.152, Education Code, is amended by
  adding Subsections (s), (s-1), (s-2), and (s-3) to read as follows:
         (s)  In addition to the allotment provided under Subsection
  (a), a school district is entitled to an annual allotment equal to
  $650:
               (1)  for each student in average daily attendance who
  has a parent or guardian who is serving on active duty in a combat
  zone as a member of the armed forces of the United States; and
               (2)  for each student in average daily attendance who:
                     (A)  has a parent or guardian serving on active
  duty as a member of the armed forces of the United States; and
                     (B)  has transferred to a campus in the district
  during the school year as a result of a change in residence because
  of an action taken under the Defense Base Closure and Realignment
  Act of 1990 (10 U.S.C. Section 2687).
         (s-1)  Notwithstanding any other provision of this section,
  a school district may use funds allotted to the district under
  Subsection (s) only to provide supplemental programs and services
  described by Subsection (c) or Subsection (f) for students
  described by Subsection (s) who are enrolled in the district.
         (s-2)  The commissioner may provide allotments under
  Subsection (s) only if funds are specifically appropriated for that
  purpose or the commissioner determines that the amount appropriated
  for purposes of the Foundation School Program exceeds the amount to
  which school districts are entitled under this chapter and the
  excess funds may be used for that purpose. The amount appropriated
  for allotments under Subsection (s) may not exceed $9.9 million in a
  school year. If the total amount of allotments to which districts
  are entitled under Subsection (s) for a school year exceeds the
  amount appropriated or otherwise available for allotments under
  that subsection, the commissioner shall reduce each district's
  allotment under that subsection proportionately.
         (s-3)  Subsections (s), (s-1), (s-2), and this subsection
  expire September 1, 2013.
         SECTION 54.  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 55.  Subchapter C, Chapter 42, Education Code, is
  amended by adding Section 42.1541 to read as follows:
         Sec. 42.1541.  INDIRECT COST ALLOTMENTS. (a) The State
  Board of Education shall by rule increase the indirect cost
  allotments established under Sections 42.151(h), 42.152(c),
  42.153(b), and 42.154(a-1) and (c) and in effect for the 2008-2009
  school year as necessary to reflect the increased percentage of
  total maintenance and operations funding represented by the basic
  allotment under Section 42.101 as a result of amendment of that
  section by H.B. No. 3646, Acts of the 81st Legislature, Regular
  Session, 2009.
         (b)  The board shall take the action required by Subsection
  (a) not later than the date that permits the increased indirect cost
  allotments to apply beginning with the 2009-2010 school year.
         (c)  This section expires September 1, 2010.
         SECTION 56.  Subchapter C, Chapter 42, Education Code, is
  amended by adding Sections 42.159 and 42.160 to read as follows:
         Sec. 42.159.  STATE VIRTUAL SCHOOL NETWORK ALLOTMENTS. (a)
  In this section:
               (1)  "Electronic course" means a course that is a
  semester in length.
               (2)  "Normal course load" means the number of classes
  or credit hours generally required to be taken by a student to
  generate the full amount of funding provided under this chapter for
  a student in average daily attendance, as determined by the
  commissioner.
               (3)  "State virtual school network" means the system
  established under Chapter 30A.
         (b)  For each student who successfully completes an
  electronic course that satisfies a curriculum requirement for
  graduation adopted under Section 28.025 and is provided through the
  state virtual school network as part of a normal course load:
               (1)  the school district or open-enrollment charter
  school that provided the course is entitled to an allotment of $400;
  and
               (2)  the school district or open-enrollment charter
  school in which the student is enrolled is entitled to an allotment
  of $80 to reimburse the district or school for associated
  administrative costs.
         (c)  A juvenile probation department or state agency is
  entitled to receive state funding comparable to the funding
  described by Subsection (b)(2) for students under the supervision
  of the department or agency.
         (d)  For each student who successfully completes an
  electronic course that satisfies a curriculum requirement for
  graduation adopted under Section 28.025, is provided through the
  state virtual school network, and exceeds a normal course load,
  including an electronic course offered during the summer, the
  school district or open-enrollment charter school that provided the
  course may be entitled to an allotment in an amount determined by
  the commissioner based on the amount of funds appropriated for
  purposes of this subsection.
         (e)  The commissioner may set aside an amount not to exceed
  50 percent of the total funds appropriated for allotments under
  Subsection (d) and use that amount to pay the costs of providing
  through the state virtual school network electronic courses through
  which students may recover academic credit for courses in which the
  students were previously unsuccessful. The commissioner may
  reserve a portion of the set-aside amount for payment of the costs
  of providing electronic courses described by this subsection to
  students in alternative education settings. For purposes of this
  subsection, students in alternative education settings include
  students in disciplinary alternative education programs under
  Section 37.008, students in juvenile justice alternative education
  programs under Section 37.011, and students under the supervision
  of a juvenile probation department, the Texas Youth Commission, or
  the Texas Department of Criminal Justice.
         (f)  The commissioner may not provide partial funding under
  this section to a school district or open-enrollment charter school
  under Subsection (b) or (d) on the basis of a student who
  successfully completes one or more modules of an electronic course
  but does not successfully complete the entire course.
         (g)  Amounts received by a school district or
  open-enrollment charter school under this section are in addition
  to any amounts to which the district or school is entitled to
  receive or retain under Chapter 12 or 41 or this chapter and are not
  subject to reduction under any provision of those chapters.
         (h)  The commissioner shall adopt rules necessary to
  implement this section. The rules must include provisions:
               (1)  requiring a school district or open-enrollment
  charter school that receives funding for an electronic course under
  Subsection (d) to reduce the amount of any fee charged for the
  course in accordance with Section 30A.155 by an amount equal to the
  amount of funding provided under Subsection (d);
               (2)  prohibiting a school district or open-enrollment
  charter school that receives funding for an electronic course under
  Subsection (d) from charging a fee for the course in accordance with
  Section 30A.155 that is higher than would otherwise be charged; and
               (3)  addressing division and distribution of the
  allotment described by Subsection (b)(2) in circumstances in which
  a student transfers from one school district, school, or other
  educational setting to another after beginning enrollment in an
  electronic course.
         Sec. 42.160.  HIGH SCHOOL ALLOTMENT. (a) A school district
  is entitled to an annual allotment of $275 for each student in
  average daily attendance in grades 9 through 12 in the district.
         (b)  A school district that is required to take action under
  Chapter 41 to reduce its wealth per student to the equalized wealth
  level is entitled to a credit, in the amount of the allotments to
  which the district is entitled under this section, against the
  total amount required under Section 41.093 for the district to
  purchase attendance credits. A school district that is otherwise
  ineligible for state aid under this chapter is entitled to receive
  allotments under this section.
         (c)  An open-enrollment charter school is entitled to an
  allotment under this section in the same manner as a school
  district.
         (d)  The commissioner shall adopt rules to administer this
  section, including rules related to the permissible use of funds
  allocated under this section to an open-enrollment charter school.
         SECTION 57.  Section 42.2516, Education Code, is amended to
  read as follows:
         Sec. 42.2516.  ADDITIONAL STATE AID FOR TAX REDUCTION. (a)
  In this section, "state compression percentage" means the
  percentage, as determined by the commissioner, of a school
  district's adopted maintenance and operations tax rate for the 2005
  tax year that serves as the basis for state funding for tax rate
  reduction under this section. The commissioner shall determine the
  state compression percentage for each school year based on the
  percentage by which a district is able to reduce the district's
  maintenance and operations tax rate for that year, as compared to
  the district's adopted maintenance and operations tax rate for the
  2005 tax year, as a result of state funds appropriated for
  distribution under this section for that year from the property tax
  relief fund established under Section 403.109, Government Code, or
  from another funding source available for school district property
  tax relief.
         (b)  Notwithstanding any other provision of this title, a
  school district that imposes a maintenance and operations tax at a
  rate at least equal to the product of the state compression
  percentage multiplied by the maintenance and operations tax rate
  adopted by the district for the 2005 tax year is entitled to at
  least the amount of state revenue necessary to provide the district
  with the sum of:
               (1)  as calculated under Subsection (e), the amount of
  state and local revenue per student in weighted average daily
  attendance for maintenance and operations that the district would
  have received during the 2009-2010 school year under Chapter 41 and
  this chapter, as those chapters existed on January 1, 2009, at a
  maintenance and operations tax rate equal to the product of the
  state compression percentage for that year multiplied by the
  maintenance and operations tax rate adopted by the district for the
  2005 tax year;
               (2)  an amount equal to the product of $120 multiplied
  by the number of students in weighted average daily attendance in
  the district;
               (3)  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, in the current tax year; and
               (4)  any amount to which the district is entitled under
  Section 42.106.
         [(a-1)     Subsection (a) applies beginning with the state
  fiscal year ending August 31, 2009. For the state fiscal year
  ending August 31, 2007, the state compression percentage is 88.67
  percent. For the state fiscal year ending August 31, 2008, the
  state compression percentage is 66.67 percent. This subsection
  expires September 1, 2009.
         [(b)     Subject to Subsections (b-1), (b-2), (f-1), (g), and
  (h), but notwithstanding any other provision of this title, a
  school district is entitled to state revenue necessary to provide
  the district with the sum of:
               [(1)     the amount of state revenue necessary to maintain
  state and local revenue per student in weighted average daily
  attendance in the amount equal to the greater of:
                     [(A)     the amount of state and local revenue per
  student in weighted average daily attendance for the maintenance
  and operations of the district available to the district for the
  2005-2006 school year;
                     [(B)     the amount of state and local revenue per
  student in weighted average daily attendance for the maintenance
  and operations of the district to which the district would have been
  entitled for the 2006-2007 school year under this chapter, as it
  existed on January 1, 2006, or, if the district would have been
  subject to Chapter 41, as that chapter existed on January 1, 2006,
  the amount to which the district would have been entitled under that
  chapter, based on the funding elements in effect for the 2005-2006
  school year, if the district imposed a maintenance and operations
  tax at the rate adopted by the district for the 2005 tax year; or
                     [(C)     the amount of state and local revenue per
  student in weighted average daily attendance for the maintenance
  and operations of the district to which the district would have been
  entitled for the 2006-2007 school year under this chapter, as it
  existed on January 1, 2006, or, if the district would have been
  subject to Chapter 41, as that chapter existed on January 1, 2006,
  the amount to which the district would have been entitled under that
  chapter, based on the funding elements in effect for the 2005-2006
  school year, if the district imposed a maintenance and operations
  tax at the rate equal to the rate described by Section 26.08(i) or
  (k)(1), Tax Code, as applicable, for the 2006 tax year;
               [(2)     an amount equal to the product of $2,500
  multiplied by the number of classroom teachers, full-time
  librarians, full-time counselors certified under Subchapter B,
  Chapter 21, and full-time school nurses employed by the district
  and entitled to a minimum salary under Section 21.402; and
               [(3)     an amount equal to the product of $275 multiplied
  by the number of students in average daily attendance in grades nine
  through 12 in the district.]
         (b-1)  The amount determined for a school district under
  Subsection (b) is increased or reduced as follows:
               (1)  if for any school year the district is entitled to
  a greater allotment under Section 42.155 or 42.158 or more
  additional state aid under Section 42.2515 than the allotment or
  additional state aid to which the district was entitled under
  Section 42.155, 42.158, or 42.2515, as applicable, [that section]
  for the 2009-2010 school year [on which the district's entitlement
  under Subsection (b) is based], the district's entitlement under
  Subsection (b) is increased by an amount equal to the difference
  between the amount to which the district is entitled under Section
  42.155, 42.158, or 42.2515, as applicable, for that school year and
  the amount to which the district was entitled under the applicable
  [that] section for the 2009-2010 school year[:
                     [(A)     the 2005-2006 school year, if the amount
  determined for the district under Subsection (b) is determined
  under Subsection (b)(1)(A); or
                     [(B)     the 2006-2007 school year, if the amount
  determined for the district under Subsection (b) is determined
  under Subsection (b)(1)(B) or (C)]; and
               (2)  if for any school year the district is not entitled
  to an allotment under Section 42.155 or 42.158 or additional state
  aid under Section 42.2515 or is entitled to a lesser allotment or
  less additional state aid under the applicable [that] section than
  the allotment or additional state aid to which the district was
  entitled under the applicable [that] section for the 2009-2010
  school year [on which the district's entitlement under Subsection
  (b) is based], the district's entitlement under Subsection (b) is
  reduced by an amount equal to the difference between the amount to
  which the district was entitled under Section 42.155, 42.158, or
  42.2515, as applicable, for the 2009-2010 [2005-2006 or 2006-2007]
  school year[, as appropriate based on whether the district's
  entitlement under Subsection (b) is determined under Subsection
  (b)(1)(A), (B), or (C),] and the amount to which the district is
  entitled under the applicable section [Section 42.158] for the
  current school year.
         [(b-2)     The amount determined for a school district under
  Subsection (b) is increased or reduced as follows:
               [(1)     if for any school year the district is entitled to
  a greater allotment under Section 42.155 or greater additional
  state aid under Section 42.2515 than the allotment or additional
  state aid to which the district was entitled under Section 42.155 or
  42.2515, as applicable, for the school year on which the district's
  entitlement under Subsection (b) is based, the district's
  entitlement under Subsection (b) is increased by an amount equal to
  the difference between the amount to which the district is entitled
  under Section 42.155 or 42.2515, as applicable, for that school
  year and the amount to which the district was entitled under the
  applicable section, as applicable for:
                     [(A)     the 2005-2006 school year, if the amount
  determined for the district under Subsection (b) is determined
  under Subsection (b)(1)(A); or
                     [(B)     the 2006-2007 school year, if the amount
  determined for the district under Subsection (b) is determined
  under Subsection (b)(1)(B) or (C); and
               [(2)     if for any school year the district is not
  entitled to an allotment under Section 42.155 or additional state
  aid under Section 42.2515 or is entitled to a lesser allotment or
  less additional state aid under the applicable section than the
  allotment or additional state aid to which the district was
  entitled under the applicable section for the school year on which
  the district's entitlement under Subsection (b) is based, the
  district's entitlement under Subsection (b) is reduced by an amount
  equal to the difference between the amount to which the district was
  entitled under Section 42.155 or 42.2515, as applicable, for the
  2005-2006 or 2006-2007 school year, as appropriate based on whether
  the district's entitlement under Subsection (b) is determined under
  Subsection (b)(1)(A), (B), or (C), and the amount to which the
  district is entitled under the applicable section for the current
  school year.]
         (c)  Enrichment revenue to which a school district is
  entitled under Section 42.302 is not included for purposes of
  determining the amount to which a district is entitled under this
  section. [In determining the amount to which a district is entitled
  under Subsection (b)(1), the commissioner shall include:
               [(1)     any amounts described by Rider 69, page III-19,
  Chapter 1369, Acts of the 79th Legislature, Regular Session, 2005
  (the General Appropriations Act);
               [(2)     for a school district that received additional
  revenue for the 2005-2006 school year as a result of an agreement
  under Subchapter E, Chapter 41:
                     [(A)     if the amount of state revenue to which the
  district is entitled under Subsection (b) is computed based on the
  amount described by Subsection (b)(1)(A), the amount of that
  additional revenue retained by the district for the 2005-2006
  school year, which is the amount by which the total maintenance and
  operations revenue available to the district for that school year
  exceeded the total maintenance and operations revenue that would
  have been available to the district for that school year if the
  district had not entered into the agreement, less any amount the
  district paid to another entity under the agreement; or
                     [(B)     if the amount of state revenue to which the
  district is entitled under Subsection (b) is computed based on the
  amount described by Subsection (b)(1)(B) or (C), the amount of the
  additional revenue that would have been retained by the district
  for the 2006-2007 school year if the district had entered into the
  agreement on the same terms as under the agreement for the 2005-2006
  school year, which is the amount by which the total maintenance and
  operations revenue that would have been available to the district
  for the 2006-2007 school year if the district had entered into the
  agreement exceeds the total maintenance and operations revenue that
  would have been available to the district for that school year if
  the district had not entered into the agreement and had imposed a
  maintenance and operations tax at the rate of $1.50 on the $100
  valuation of taxable property, less any amount the district would
  have paid to another entity under the agreement;
               [(3)     any amount necessary to reflect an adjustment
  made by the commissioner under Section 42.005;
               [(4)     any amount necessary to reflect an adjustment
  made by the commissioner under Section 42.2521; and
               [(5)     any amount necessary to reflect an adjustment
  made by the commissioner under Section 42.2531.]
         (d)  In determining the amount to which a district is
  entitled under Subsection (b)(1), the commissioner shall:
               (1)  include any amounts received by the district
  during the 2008-2009 school year under Rider 86, page III-23,
  Chapter 1428 (H.B. 1), Acts of the 80th Legislature, Regular
  Session, 2007 (the General Appropriations Act); and
               (2)  for a school district that paid tuition under
  Section 25.039 during the 2008-2009 school year, reduce the amount
  to which the district is entitled by the amount of tuition paid
  during that school year. [If, for the 2006-2007 or a subsequent
  school year, a school district enters into an agreement under
  Subchapter E, Chapter 41, the commissioner shall reduce the amount
  of state revenue to which the district is entitled under Subsection
  (b) for that school year by an amount equal to any additional
  revenue for that school year that the district receives and retains
  as a result of that agreement, which is the amount by which the
  total maintenance and operations revenue available to the district
  exceeds the total maintenance and operations revenue that would
  have been available to the district if the district had not entered
  into the agreement and had imposed a maintenance and operations tax
  at the maximum rate permitted under Section 45.003(d), less any
  amount the district pays to another entity under the agreement.]
         (e)  For purposes of determining the total amount of state
  and local revenue to which a district is entitled under Subsection
  (b)(1), the commissioner shall determine the amount of state and
  local revenue per student in weighted average daily attendance to
  which the district would have been entitled during the 2009-2010
  school year under Chapter 41 and this chapter, as they existed on
  January 1, 2009, and multiply that amount by the number of students
  in weighted average daily attendance as determined in accordance
  with the changes to Chapter 41 and this chapter, including the
  repeal of former Section 42.103(e), made by H.B. No. 3646, Acts of
  the 81st Legislature, Regular Session, 2009. [The amount of revenue
  to which a school district is entitled because of the technology
  allotment under Section 32.005 is not included in making a
  determination under Subsection (b)(1).]
         (f)  A school district that is required to take action under
  Chapter 41 to reduce its wealth per student to the equalized wealth
  level and that is entitled to state revenue under this section may
  receive that revenue through an adjustment against the total amount
  of attendance credits required to be purchased under Subchapter D,
  Chapter 41, or the total number of nonresident students required to
  be educated under Subchapter E, Chapter 41, as determined by the
  commissioner. [For purposes of determining the amount of revenue to
  which a school district is entitled under this section, the
  commissioner shall use the average tax collection rate for the
  district for the 2003, 2004, and 2005 tax years.]
         (f-1)  The commissioner shall, in accordance with rules
  adopted by the commissioner, adjust the amount of a school
  district's local revenue derived from maintenance and operations
  tax collections, as calculated for purposes of determining the
  amount of state revenue to which the district is entitled under this
  section, if the district, for the 2010 [2007] tax year or a
  subsequent tax year:
               (1)  adopts an exemption under Section 11.13(n), Tax
  Code, that was not in effect for the 2009 [2005 or 2006] tax year, or
  eliminates an exemption under Section 11.13(n), Tax Code,  that was
  in effect for the 2009 [2005 or 2006] tax year;
               (2)  adopts an exemption under Section 11.13(n), Tax
  Code, at a greater or lesser percentage than the percentage in
  effect for the district for the 2009 [2005 or 2006] tax year;
               (3)  grants an exemption under an agreement authorized
  by Chapter 312, Tax Code, that was not in effect for the 2009 [2005
  or 2006] tax year, or ceases to grant an exemption authorized by
  that chapter that was in effect for the 2009 [2005 or 2006] tax
  year; or
               (4)  agrees to deposit taxes into a tax increment fund
  created under Chapter 311, Tax Code, under a reinvestment zone
  financing plan that was not in effect for the 2009 [2005 or 2006]
  tax year, or ceases depositing taxes into a tax increment fund
  created under that chapter under a reinvestment zone financing plan
  that was in effect for the 2009 [2005 or 2006] tax year.
         (f-2)  The rules adopted by the commissioner under
  Subsection (f-1) must:
               (1)  require the commissioner to determine, as if this
  section did not exist, the effect under Chapter 41 and this chapter
  of a school district's action described by Subsection (f-1)(1),
  (2), (3), or (4) on the total state revenue to which the district
  would be entitled or the cost to the district of purchasing
  sufficient attendance credits to reduce the district's wealth per
  student to the equalized wealth level; and
               (2)  require an increase or reduction in the amount of
  state revenue to which a school district is entitled under
  Subsection (b) that is substantially equivalent to any change in
  total state revenue or the cost of purchasing attendance credits
  that would apply to the district if this section did not exist.
         (f-3)  An adjustment made by the commissioner under the rules
  adopted under Subsection (f-1) is final and may not be appealed.
         (g)  The commissioner may adopt rules necessary to implement
  this section. [If a school district adopts a maintenance and
  operations tax rate that is below the rate equal to the product of
  the state compression percentage multiplied by the maintenance and
  operations tax rate adopted by the district for the 2005 tax year,
  the commissioner shall reduce the district's entitlement under this
  section in proportion to the amount by which the adopted rate is
  less than the rate equal to the product of the state compression
  percentage multiplied by the rate adopted by the district for the
  2005 tax year.]
         (h)  A determination by the commissioner under this section
  is final and may not be appealed. [Notwithstanding any other
  provision of this title, if the amount of state and local revenue
  per student in weighted average daily attendance for the
  maintenance and operations of the district available to the
  district in a school year as a result of increases to the equalized
  wealth level under Section 41.002, the basic allotment under
  Section 42.101, and the guaranteed level under Section 42.302 made
  by H.B. No. 1, Acts of the 79th Legislature, 3rd Called Session,
  2006, exceeds the amount to which a district is entitled under
  Subsection (b) for that school year, the commissioner must:
               [(1)     reduce the amount of state aid provided to the
  district for that school year by an amount equal to the excess
  revenue, as determined by the commissioner; or
               [(2)     for a district with a wealth per student greater
  than the applicable amount described by Section 41.002(a), require
  the district to purchase a number of attendance credits for that
  school year at a cost equal to the amount of excess revenue, as
  determined by the commissioner.
         [(i)     A school district that is required to take action under
  Chapter 41 to reduce its wealth per student to the equalized wealth
  level and that is entitled to state revenue under this section may
  receive that revenue through an adjustment against the total amount
  of attendance credits required to be purchased under Subchapter D,
  Chapter 41, or the total number of nonresident students required to
  be educated under Subchapter E, Chapter 41, as determined by the
  commissioner.
         [(j)     If a school district reduces its maintenance and
  operations tax rate by an amount less than the rate equal to the
  product of the difference between the state compression percentage
  for the preceding year and the state compression percentage for the
  year of the reduction, multiplied by the maintenance and operations
  tax rate adopted by the district for the 2005 tax year, the
  commissioner may not reduce the amount to which the district is
  entitled under this section on the basis of the additional revenue
  collected by the district.
         [(k)     The commissioner may adopt rules necessary to
  administer this section.
         [(l)     A determination by the commissioner under this section
  is final and may not be appealed.]
         SECTION 58.  Subchapter E, Chapter 42, Education Code, is
  amended by adding Section 42.25161 to read as follows:
         Sec. 42.25161.  ADDITIONAL STATE AID FOR SOUTH TEXAS
  INDEPENDENT SCHOOL DISTRICT. (a) The commissioner shall provide
  South Texas Independent School District with the amount of state
  aid necessary to ensure that the district receives an amount of
  state and local revenue per student in weighted average daily
  attendance that is at least $120 greater than the amount the
  district would have received per student in weighted average daily
  attendance during the 2009-2010 school year under this chapter, as
  it existed on January 1, 2009, at a maintenance and operations tax
  rate equal to the product of the state compression percentage
  multiplied by the maintenance and operations tax rate adopted by
  the district for the 2005 tax year, provided that the district
  imposes a maintenance and operations tax at that rate.
         (b)  The commissioner may adopt rules necessary to implement
  this section.
         (c)  A determination by the commissioner under this section
  is final and may not be appealed.
         SECTION 59.  Section 42.252(a), Education Code, is amended
  to read as follows:
         (a)  Each school district's share of the Foundation School
  Program is 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 [$0.86]; 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 60.  Section 42.253, Education Code, is amended by
  adding Subsection (c-1) to read as follows:
         (c-1)  The amounts to be paid under Section 42.2516(b)(3)
  shall be paid at the same time as other state revenue is paid to the
  district. Payments shall be based on amounts paid under Section
  42.2516(b)(3) for the preceding year. Any deficiency shall be paid
  to the district at the same time the final amount to be paid to the
  district is determined, and any overpayment shall be deducted from
  the payments the district would otherwise receive in the following
  year.
         SECTION 61.  Section 42.259, Education Code, is amended by
  adding Subsection (g) to read as follows:
         (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 62.  Section 42.260(a), Education Code, is amended
  to read as follows:
         (a)  In this section, "participating charter school" means
  an open-enrollment charter school that participates in the uniform
  group coverage program established under Chapter 1579, Insurance
  Code [has the meaning assigned by Section 42.2514].
         SECTION 63.  Sections 42.302(a), (a-1), and (a-2), Education
  Code, are 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, 42.159, 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.
         (a-1)  In this section, "wealth per student" has the meaning
  assigned by Section 41.001. For purposes of Subsection (a), the
  dollar amount guaranteed level of state and local funds per
  weighted student per cent of tax effort ("GL") for a school district
  is:
               (1)  the greater of [the amount of district tax revenue
  per weighted student per cent of tax effort available to a district
  at the 88th percentile in wealth per student, as determined by the
  commissioner in cooperation with the Legislative Budget Board, for
  the district's maintenance and operations tax effort equal to or
  less than the rate equal to the product of the state compression
  percentage, as determined under Section 42.2516, multiplied by the
  maintenance and operations tax rate adopted by the district for the
  2005 tax year;
               [(2)]  the amount of district tax revenue per weighted
  student per cent of tax effort that would be available to the Austin
  Independent School District, as determined by the commissioner in
  cooperation with the Legislative Budget Board, if the reduction of
  the limitation on tax increases as provided by Section 11.26(a-1),
  (a-2), or (a-3), Tax Code, did not apply, or the amount of district
  tax revenue per weighted student per cent of tax effort used for
  purposes of this subdivision in the preceding school year, for the
  first six cents by which the district's maintenance and operations
  tax rate exceeds the rate equal to the product of the state
  compression percentage, as determined under Section 42.2516 [and
  notwithstanding the limitation on district enrichment tax rate
  ("DTR") under Section 42.303], multiplied by the maintenance and
  operations tax rate adopted by the district for the 2005 tax year;
  and
               (2) [(3)]  $31.95, for the district's maintenance and
  operations tax effort that exceeds the amount of tax effort
  described by Subdivision (1) [(2)].
         (a-2)  The limitation on district enrichment tax rate
  ("DTR") under Section 42.303 does not apply to the district's
  maintenance and operations tax effort described by Subsection
  (a-1)(1) [(a-1)(2)].
         SECTION 64.  Section 42.303, Education Code, is amended to
  read as follows:
         Sec. 42.303.  LIMITATION ON ENRICHMENT TAX RATE. The
  district enrichment tax rate ("DTR") under Section 42.302 may not
  exceed the amount per $100 of valuation by which the maximum rate
  permitted under Section 45.003 exceeds the rate used to determine
  the district's local share under Section 42.252 [of $0.86], or a
  greater amount for any year provided by appropriation.
         SECTION 65.  Chapter 42, Education Code, is amended by
  adding Subchapter I to read as follows:
  SUBCHAPTER I. COMPREHENSIVE REVIEW OF PUBLIC SCHOOL FINANCE
  WEIGHTS, ALLOTMENTS, AND ADJUSTMENTS
         Sec. 42.451.  SELECT COMMITTEE ON PUBLIC SCHOOL FINANCE
  WEIGHTS, ALLOTMENTS, AND ADJUSTMENTS. (a) The Select Committee on
  Public School Finance Weights, Allotments, and Adjustments is
  established to conduct a comprehensive review of weights,
  allotments, and adjustments under the public school finance system,
  including all current weights, allotments, and adjustments
  provided under this chapter and any additional weights, allotments,
  and adjustments recommended by the committee.
         (b)  The committee is composed of 15 members appointed as
  follows:
               (1)  four members of the senate, appointed by the
  lieutenant governor;
               (2)  four members of the house of representatives,
  appointed by the speaker of the house of representatives;
               (3)  the commissioner of education;
               (4)  one person currently employed at a primary or
  secondary school in this state and one representative of the
  business community, each appointed by the lieutenant governor;
               (5)  one person currently employed at a primary or
  secondary school in this state and one representative of the
  business community, each appointed by the speaker of the house of
  representatives; and
               (6)  one person currently employed at a primary or
  secondary school in this state and one representative from the
  business community, appointed by the governor.
         (c)  The governor, lieutenant governor, and speaker of the
  house of representatives shall make the appointments required by
  Subsection (b) in a timely fashion to permit the committee to comply
  with Section 42.452(a).
         Sec. 42.452.  COMMITTEE MEETINGS. (a) Not later than
  October 1, 2009, the committee shall hold an organizational
  meeting.
         (b)  The lieutenant governor and speaker of the house of
  representatives shall each appoint a committee member to serve as
  co-chair.
         (c)  Committee meetings shall be held at the call of the
  co-chairs.
         Sec. 42.453.  COMPENSATION AND REIMBURSEMENT. (a) A member
  of the committee is entitled to reimbursement for actual and
  necessary expenses incurred in performing committee duties.
         (b)  A legislative member of the committee is entitled to
  reimbursement from the appropriate fund of the house of the
  legislature in which the member serves.
         (c)  A member other than a legislative member is entitled to
  reimbursement from funds appropriated to the committee.
         Sec. 42.454.  COMMITTEE STAFF. (a) The co-chairs of the
  committee may appoint a committee director and staff to support the
  work of the committee.
         (b)  The director and staff members are employees of the
  Texas Legislative Council and shall be paid from funds appropriated
  to the council for the committee's operations.
         (c)  The committee may contract with one or more consultants
  if necessary to enable the committee to perform its duties under
  this subchapter.
         Sec. 42.455.  CONDUCT OF REVIEW. (a) The committee shall
  conduct public hearings throughout the state and solicit testimony
  about the weights, allotments, and adjustments under the finance
  system from parents of public school children and other interested
  persons. At least one public hearing must be held at a public
  school during a time that public school students are able to attend
  the hearing.
         (b)  The commissioner shall ensure that the committee has
  access to any documentation and agency personnel the committee
  requests.
         (c)  The Legislative Budget Board, the Texas Education
  Agency, the comptroller, the state auditor, and any other state
  agency, official, or personnel shall cooperate with the committee
  in carrying out its duties under this subchapter.
         (d)  The committee may coordinate the review under this
  subchapter with any other legislative study, as appropriate. To
  the extent the review duplicates the study of funding elements
  otherwise required by Section 42.007, the review replaces that
  study.
         Sec. 42.4551.  ADDITIONAL DUTIES. (a) The committee shall
  also review and identify specific short term goals that will assist
  the state in meeting the objectives and goals of public education.
  The review under this section shall include recommendations
  regarding:
               (1)  methods to close the achievement gap and define
  and measure readiness for college and the workforce;
               (2)  revisions to the public accountability system; and
               (3)  methods for promoting efficient and effective
  support structures for public schools.
         (b)  The commissioner of higher education serves as an ex
  officio member of the committee for purposes of this section.
         Sec. 42.456.  REPORT. (a) Not later than December 1, 2010,
  the committee shall provide a report that:
               (1)  states the findings of the review conducted under
  this subchapter; and
               (2)  includes any recommendations for statutory
  changes.
         (b)  The report must be approved by a majority of the
  committee members. A member who disagrees with any part of the
  report may attach a dissenting statement to the report.
         Sec. 42.457.  EXPIRATION. This subchapter expires January
  11, 2011.
         SECTION 66.  Section 44.004, Education Code, is amended by
  amending Subsection (h) and adding Subsection (j) to read as
  follows:
         (h)  Notwithstanding any other provision of this section, a
  school district with a fiscal year beginning July 1 may use the
  certified estimate of the taxable value of district property
  required by Section 26.01(e) [26.01(d)], Tax Code, in preparing the
  notice required by this section if the district does not receive on
  or before June 7 the certified appraisal roll for the district
  required by Section 26.01(a), Tax Code.
         (j)  Notwithstanding Subsections (g), (h), and (i), a school
  district may adopt a budget after the district adopts a tax rate for
  the tax year in which the fiscal year covered by the budget begins
  if the district elects to adopt a tax rate before receiving the
  certified appraisal roll for the district as provided by Section
  26.05(g), Tax Code. If a school district elects to adopt a tax rate
  before adopting a budget, the district must publish notice and hold
  a meeting for the purpose of discussing the proposed tax rate as
  provided by this section. Following adoption of the tax rate, the
  district must publish notice and hold another public meeting before
  the district may adopt a budget. The comptroller shall prescribe
  the language and format to be used in the notices. The school
  district may use the certified estimate of taxable value in
  preparing a notice under this subsection.
         SECTION 67.  Subchapter Z, Chapter 44, Education Code, is
  amended by adding Section 44.908 to read as follows:
         Sec. 44.908.  EXPENDITURE OF LOCAL FUNDS. (a) A school
  district shall adopt a policy governing the expenditure of local
  funds from vending machines, rentals, gate receipts, or other local
  sources of revenue over which the district has direct control.
         (b)  A policy under this section must:
               (1)  require discretionary expenditures of local funds
  to be related to the district's educational purpose and provide a
  commensurate benefit to the district or its students; and
               (2)  meet the standards of Section 52, Article III,
  Texas Constitution, regarding expenditure of public funds.
         SECTION 68.  Section 45.052, Education Code, is amended to
  read as follows:
         Sec. 45.052.  GUARANTEE. (a) On approval by the
  commissioner, bonds issued under Subchapter A, including refunding
  bonds, are guaranteed by the corpus and income of the permanent
  school fund.
         (b)  Notwithstanding any amendment of this subchapter or
  other law, the guarantee under this subchapter of school district
  bonds remains in effect until the date those bonds mature or are
  defeased in accordance with state law.
         SECTION 68A.  Sections 45.053(a), (b), and (c), Education
  Code, are amended to read as follows:
         (a)  Except as provided by Subsection (d), the commissioner
  may not approve bonds for guarantee under this subchapter if the
  approval would result in the total amount of outstanding guaranteed
  bonds under this subchapter exceeding an amount equal to 2-1/2
  times the cost value of the permanent school fund, as estimated by
  the board and certified by the state auditor.
         (b)  Each year, the state auditor shall analyze the status of
  guaranteed bonds under this subchapter as compared to the cost
  value of the permanent school fund.  Based on that analysis, the
  state auditor shall certify whether the amount of bonds guaranteed
  under this subchapter is within the limit prescribed by this
  section.
         (c)  The commissioner shall prepare and the board shall adopt
  an annual report on the status of the guaranteed bond program under
  this subchapter.
         SECTION 69.  Subchapter C, Chapter 45, Education Code, is
  amended by adding Section 45.0531 to read as follows:
         Sec. 45.0531.  ADDITIONAL LIMITATION: RESERVATION OF
  PERCENTAGE OF PERMANENT SCHOOL FUND VALUE. (a) In addition to the
  limitation on the approval of bonds for guarantee under Section
  45.053, the board by rule may establish a percentage of the cost
  value of the permanent school fund to be reserved from use in
  guaranteeing bonds under this subchapter.
         (b)  If the board has reserved a portion of the permanent
  school fund under Subsection (a), each year, the state auditor
  shall analyze the status of the reserved portion compared to the
  cost value of the permanent school fund.  Based on that analysis,
  the state auditor shall certify whether the portion of the
  permanent school fund reserved from use in guaranteeing bonds under
  this subchapter satisfies the reserve percentage established.
         (c)  If the board has reserved a portion of the permanent
  school fund under Subsection (a), the board shall at least annually
  consider whether to change the reserve percentage established to
  ensure that the reserve percentage allows compliance with federal
  law and regulations and serves to enable bonds guaranteed under
  this subchapter to receive the highest available credit rating, as
  determined by the board.
         (d)  This section may not be construed in a manner that
  impairs, limits, or removes the guarantee of bonds that have been
  approved by the commissioner.
         SECTION 70.  Section 45.055, Education Code, is amended to
  read as follows:
         Sec. 45.055.  APPLICATION FOR GUARANTEE. (a) A school
  district seeking [the] guarantee of eligible bonds under this
  subchapter shall apply to the commissioner using a form adopted by
  the commissioner for the purpose. The commissioner may adopt a
  single form on which a district seeking guarantee or credit
  enhancement of eligible bonds may apply simultaneously first for
  guarantee under this subchapter and then, if that guarantee is
  rejected, for credit enhancement under Subchapter I.
         (b)  An [The] application under Subsection (a) must include:
               (1)  the name of the school district and the principal
  amount of the bonds to be issued;
               (2)  the name and address of the district's paying agent
  for those bonds; and
               (3)  the maturity schedule, estimated interest rate,
  and date of the bonds.
         (c)  An [The] application under Subsection (a) must be
  accompanied by a fee set by rule of the board in an amount designed
  to cover the costs of administering the programs to provide the
  guarantee or credit enhancement of eligible bonds [program].
         SECTION 71.  Subsection (b), Section 45.056, Education Code,
  is amended to read as follows:
         (b)  If following the investigation the commissioner is
  satisfied that the school district's bonds should be guaranteed
  under this subchapter or provided credit enhancement under
  Subchapter I, as applicable, the commissioner shall endorse the
  bonds.
         SECTION 72.  Section 45.061, Education Code, is amended by
  adding Subsections (c) and (d) to read as follows:
         (c)  The commissioner may order a school district to set an
  ad valorem tax rate capable of producing an amount of revenue
  sufficient to enable the district to:
               (1)  provide reimbursement under this section; and
               (2)  pay the principal of and interest on district
  bonds as the principal and interest become due.
         (d)  If a school district fails to comply with the
  commissioner's order under Subsection (c), the commissioner may
  impose any sanction on the district authorized to be imposed on a
  district under Subchapter G, Chapter 39, including appointment of a
  board of managers or annexation to another district, regardless of
  the district's accreditation status or the duration of a particular
  accreditation status.
         SECTION 73.  Subsection (a), Section 45.062, Education Code,
  is amended to read as follows:
         (a)  If a total of two or more payments [from the permanent
  school fund] are made under this subchapter or Subchapter I on the
  [guaranteed] bonds of a school district and the commissioner
  determines that the school district is acting in bad faith under the
  guarantee program under this subchapter or the credit enhancement
  program under Subchapter I, the commissioner may request the
  attorney general to institute appropriate legal action to compel
  the school district and its officers, agents, and employees to
  comply with the duties required of them by law in regard to the
  bonds.
         SECTION 74.  Section 45.109, Education Code, is amended by
  adding Subsections (a-1) and (a-2) to read as follows:
         (a-1)  An independent school district and an institution of
  higher education, as defined by Section 61.003, located wholly or
  partially in the boundaries of the county in which the district is
  located may contract for the district to contribute district
  resources to pay a portion of the costs of the design or
  construction of an instructional facility or a stadium or other
  athletic facilities owned by or under the control of the
  institution of higher education. A district may contribute
  district resources under this subsection only if the district and
  the institution of higher education enter into a written agreement
  authorizing the district to use that facility.
         (a-2)  One or more independent school districts and an
  institution of higher education, as defined by Section 61.003, may
  contract for the district to contribute district resources to pay a
  portion of the costs of the design, improvement, or construction of
  an instructional facility owned by or under the control of the
  institution of higher education. A district may contribute
  district resources under this subsection only if the district and
  the institution of higher education enter into a written agreement
  authorizing the district to use that facility, including
  authorizing the enrollment of district students in courses offered
  at that facility.
         SECTION 75.  Chapter 45, Education Code, is amended by
  adding Subchapters I and J to read as follows:
  SUBCHAPTER I. INTERCEPT PROGRAM TO PROVIDE CREDIT ENHANCEMENT FOR
  BONDS
         Sec. 45.251.  DEFINITIONS. In this subchapter:
               (1)  "Board" means the State Board of Education.
               (2)  "Foundation School Program" means the program
  established under Chapters 41, 42, and 46, or any successor program
  of state appropriated funding for school districts in this state.
               (3)  "Paying agent" means the financial institution
  that is designated by a school district as the district's agent for
  the payment of the principal of and interest on bonds for which
  credit enhancement is provided under this subchapter.
         Sec. 45.252.  INTERCEPT CREDIT ENHANCEMENT PROGRAM. (a) If
  a school district's application for guarantee of district bonds by
  the corpus and income of the permanent school fund as provided by
  Subchapter C is rejected, the district may apply under this
  subchapter for credit enhancement of bonds described by Section
  45.054 by money appropriated for the Foundation School Program,
  other than money that is appropriated to school districts
  specifically:
               (1)  as required under the Texas Constitution; or
               (2)  for assistance in paying debt service.
         (b)  The same school district bonds may not benefit under
  both Subchapter C and this subchapter.
         (c)  Notwithstanding any amendment of this subchapter or
  other law, the credit enhancement provided under this subchapter
  for school district bonds remains in effect until the date those
  bonds mature or are defeased in accordance with state law.
         Sec. 45.253.  LIMITATION ON INTERCEPT CREDIT ENHANCEMENT.
  (a) In each month of each fiscal year, the commissioner shall
  determine the amount of funds available to make payments under this
  subchapter from the Foundation School Program through the end of
  the fiscal year and the amounts due under this code to public
  schools from the Foundation School Program through the end of the
  fiscal year. The commissioner may revise a determination under
  this subsection during the fiscal year as appropriate.
         (b)  The commissioner may not endorse particular bonds for
  credit enhancement under this subchapter until the commissioner
  has:
               (1)  made the determinations required under Subsection
  (a); and
               (2)  determined that the endorsement will not cause the
  projected debt service coming due during the remainder of the
  fiscal year for bonds provided credit enhancement under this
  subchapter to exceed the lesser of:
                     (A)  one-half of the amount of funds due to public
  schools from the Foundation School Program for the remainder of the
  fiscal year; or
                     (B)  one-half of the amount of funds anticipated
  to be on hand in the Foundation School Program to make payments for
  the remainder of the fiscal year.
         (c)  The commissioner may not endorse particular bonds for
  credit enhancement under this subchapter unless the commissioner
  has determined that the maximum annual debt service on the bonds
  during any state fiscal year will not exceed the lesser of:
               (1)  one-half of the amount of funds due to public
  schools from the Foundation School Program for the current fiscal
  year; or
               (2)  one-half of the amount of funds anticipated to be
  on hand in the Foundation School Program to make payments for the
  current fiscal year.
         Sec. 45.254.  ELIGIBILITY. To be eligible for approval by
  the commissioner for credit enhancement under this subchapter:
               (1)  bonds must be issued in the manner provided by
  Section 45.054; and
               (2)  payments of all of the principal of the bonds must
  be scheduled during the first six months of the state fiscal year.
         Sec. 45.2541.  INTERCEPT OF FOUNDATION SCHOOL PROGRAM
  APPROPRIATIONS AS CREDIT ENHANCEMENT. (a) Money appropriated for
  the Foundation School Program that may be used for the purpose under
  this subchapter and under any other law, rule, or regulation shall
  be used to provide credit enhancement for eligible bonds as
  provided by this subchapter, the General Appropriations Act, and
  board rule if using the permanent school fund to guarantee
  particular bonds would result in:
               (1)  a total amount of outstanding bonds guaranteed by
  the permanent school fund exceeding the amount authorized under:
                     (A)  Section 45.053; or
                     (B)  federal law or regulations; or
               (2)  the use of a portion of the cost value of the
  permanent school fund reserved under Section 45.0531, as determined
  by the board.
         (b)  If Foundation School Program appropriations are not
  sufficient in any year to pay principal or interest that becomes due
  on bonds for which credit enhancement is provided under this
  subchapter, the payment shall be made from the following year's
  Foundation School Program appropriations that may be used for the
  purpose under this subchapter before those appropriations are used
  for any other Foundation School Program purpose.
         Sec. 45.255.  APPLICATION FOR CREDIT ENHANCEMENT. (a) A
  school district seeking credit enhancement of eligible bonds under
  this subchapter shall apply to the commissioner using a form
  adopted by the commissioner for the purpose. The commissioner may
  adopt a single form on which a district seeking guarantee or credit
  enhancement of eligible bonds may apply simultaneously first for a
  guarantee under Subchapter C and then, if that guarantee is
  rejected, for credit enhancement under this subchapter.
         (b)  An application under Subsection (a) must:
               (1)  include the information required by Section
  45.055(b); and
               (2)  be accompanied by a fee set by board rule in an
  amount designed to cover the costs of administering the programs to
  provide the guarantee or credit enhancement of eligible bonds.
         Sec. 45.256.  INVESTIGATION. (a) Following receipt of an
  application under Section 45.255, the commissioner shall conduct an
  investigation of the applicant school district as provided for an
  investigation under Section 45.056(a).
         (b)  If following the investigation under Subsection (a) the
  commissioner is satisfied that the school district's bonds should
  be guaranteed under Subchapter C or provided credit enhancement
  under this subchapter, as applicable, the commissioner shall
  endorse the bonds.
         Sec. 45.257.  CREDIT ENHANCEMENT ENDORSEMENT. (a) The
  commissioner shall endorse bonds approved for credit enhancement
  under this subchapter in substantially the same manner provided
  under Section 45.057 for endorsing bonds approved under Subchapter
  C.
         (b)  The credit enhancement is not effective unless the
  attorney general approves the bonds under Section 45.005.
         Sec. 45.258.  NOTICE OF FAILURE OR INABILITY TO PAY.
  Immediately following a determination that a school district will
  be or is unable to pay maturing or matured principal or interest on
  a bond for which credit enhancement is provided under this
  subchapter, but not later than the 10th day before maturity date,
  the school district shall notify the commissioner.
         Sec. 45.259.  PAYMENT FROM INTERCEPTED FUNDS.
  (a)  Immediately following receipt of notice under Section 45.258,
  the commissioner shall instruct the comptroller to transfer to the
  district's paying agent from appropriations to the Foundation
  School Program that may be used for the purpose under Section 45.252
  and other law the amount necessary to pay the maturing or matured
  principal or interest.
         (b)  Immediately following receipt of the funds for payment
  of the principal or interest, the paying agent shall pay the amount
  due.
         (c)  The procedures prescribed by Subsections (a) and (b)
  apply to each payment of principal or interest on bonds as the
  payment becomes due until the bonds mature or are defeased in
  accordance with state law.
         (d)  If money appropriated for the Foundation School Program
  is used for purposes of this subchapter and as a result there is
  insufficient money to fully fund the Foundation School Program, the
  commissioner shall, to the extent necessary, reduce each school
  district's foundation school fund allocations, other than any
  portion appropriated from the available school fund, in the same
  manner provided by Section 42.253(h) for a case in which school
  district entitlements exceed the amount appropriated. The
  following fiscal year, a district's entitlement under Section
  42.253 is increased by an amount equal to the reduction under this
  subsection.
         (e)  A payment made under this section by the state on behalf
  of a school district of funds the district owes on bonds for which
  credit enhancement is provided under this subchapter creates a
  repayment obligation of the district to the state regardless of the
  maturity date of, or any payment of interest on, the bonds.
         (f)  This section does not create a debt of the state under
  the Texas Constitution or, except to the extent provided by this
  subchapter, create a payment obligation.
         Sec. 45.260.  BONDS NOT ACCELERATED ON FAILURE TO PAY. If a
  school district fails to pay principal or interest on a bond for
  which credit enhancement is provided under this subchapter when the
  amount matures, other amounts not yet mature are not accelerated
  and do not become due by virtue of the district's failure to pay
  amounts matured.
         Sec. 45.261.  REIMBURSEMENT OF FOUNDATION SCHOOL PROGRAM.
  (a) If the commissioner orders payment from the money appropriated
  to the Foundation School Program on behalf of a school district that
  is not required to reduce its wealth per student under Chapter 41,
  the commissioner shall direct the comptroller to withhold the
  amount paid from the first state money payable to the district. If
  the commissioner orders payment from the money appropriated to the
  Foundation School Program on behalf of a school district that is
  required to reduce its wealth per student under Chapter 41, the
  commissioner shall increase amounts due from the district under
  that chapter in a total amount equal to the amount of payments made
  on behalf of the district under this subchapter. Amounts withheld
  or received under this subsection shall be used for the Foundation
  School Program.
         (b)  In accordance with commissioner rules, the commissioner
  may authorize reimbursement of the Foundation School Program in a
  manner other than that provided by this section.
         (c)  The commissioner may order a school district to set an
  ad valorem tax rate capable of producing an amount of revenue
  sufficient to enable the district to:
               (1)  provide reimbursement under this section; and
               (2)  pay the remaining principal of and interest on the
  bonds as the principal and interest become due.
         (d)  If a school district fails to comply with the
  commissioner's order under Subsection (c), the commissioner may
  impose any sanction on the district authorized to be imposed on a
  district under Subchapter G, Chapter 39, including appointment of a
  board of managers or annexation to another district, regardless of
  the district's accreditation status or the duration of a particular
  accreditation status.
         (e)  Any part of a school district's tax rate attributable to
  producing revenue for purposes of Subsection (c)(1) is considered
  part of the district's:
               (1)  current debt rate for purposes of computing a
  rollback tax rate under Section 26.08, Tax Code; and
               (2)  interest and sinking fund tax rate.
         (f)  On reimbursement by a school district as required by
  this section, the commissioner shall pay to the district any amount
  withheld under this section.
         Sec. 45.262.  REPEATED FAILURE TO PAY. (a) If a total of two
  or more payments are made under Subchapter C or this subchapter on
  the bonds of a school district and the commissioner determines that
  the district is acting in bad faith under the guarantee program
  under Subchapter C or the credit enhancement program under this
  subchapter, the commissioner may request the attorney general to
  institute appropriate legal action to compel the district and the
  district's officers, agents, and employees to comply with the
  duties required of them by law in regard to the bonds.
         (b)  Jurisdiction of proceedings under this section is in
  district court in Travis County.
         Sec. 45.263.  RULES. (a) The commissioner shall adopt rules
  necessary for the administration of the bond credit enhancement
  program under this subchapter.
         (b)  In adopting rules under Subsection (a), the
  commissioner shall establish an annual deadline by which a school
  district must pay the debt service on bonds for which credit
  enhancement is provided under this subchapter. The deadline
  established may not be later than the 10th day before the date
  specified under Section 42.259 for payment to school districts of
  the final Foundation School Program installment for a state fiscal
  year.
  SUBCHAPTER J. OPEN-ENROLLMENT CHARTER SCHOOL FACILITIES CREDIT
  ENHANCEMENT PROGRAM
         Sec. 45.301.  DEFINITIONS. In this subchapter:
               (1)  "Charter holder" has the meaning assigned by
  Section 12.1012.
               (2)  "Program" means the open-enrollment charter
  school facilities credit enhancement program established under
  this subchapter.
         Sec. 45.302.  ESTABLISHMENT OF PROGRAM. (a) The
  commissioner by rule may establish an open-enrollment charter
  school facilities credit enhancement program to assist charter
  holders in obtaining financing for the purchase, repair, or
  renovation of real property, including improvements to real
  property, for facilities of open-enrollment charter schools.
         (b)  The commissioner may adopt a structure and procedures
  for the program that are substantially similar to the structure and
  procedures for the credit enhancement program for school district
  bonds under Subchapter I.
         Sec. 45.303.  LIMITATION ON PARTICIPATION; MINIMUM
  REQUIREMENTS FOR DEBT SERVICE RESERVE. In adopting rules under
  Section 45.302, the commissioner may:
               (1)  limit participation in the program to charter
  holders who hold charters for open-enrollment charter schools that
  meet standards established by the commissioner, including
  standards for financial stability, compliance with applicable
  state and federal program requirements, and student academic
  performance; and
               (2)  impose minimum requirements for a debt service
  reserve to secure repayment of obligations for which credit
  enhancement is provided under this subchapter.
         Sec. 45.304.  ALLOCATION OF PORTION OF FOUNDATION SCHOOL
  PROGRAM FUNDS FOR CREDIT ENHANCEMENT. (a) The commissioner may
  allocate not more than one percent of the amount appropriated for
  the Foundation School Program for purposes of the program under
  this subchapter.
         (b)  The funds allocated under this section may not be
  considered available for purposes of any other credit enhancement
  program.
         (c)  Only those Foundation School Program funds allocated
  under this section may be committed to the program under this
  subchapter.
         Sec. 45.305.  PRIVATE MATCHING FUNDS REQUIRED; USE OF OTHER
  STATE FUNDS. (a) The commissioner may not implement the program
  unless private funds in an amount at least equal to the amount of
  state funds allocated under Section 45.304 are obligated to the
  program for at least the first 10 years of the term of obligations
  for which credit enhancement is provided under the program.
         (b)  The commissioner may use state funds allocated under
  Section 45.304 to pay any amount due for credit enhancement under
  the program and, subject to the terms of the applicable private
  credit obligation agreement, provide for payment of private funds
  to the Foundation School Program in an amount equal to at least
  one-half of the amount of the state funds paid. The commissioner
  may also use any other state funds available for the purpose to make
  payments under this subchapter or to reimburse the Foundation
  School Program for payments made under this subchapter from
  Foundation School Program funds.
         Sec. 45.306.  REPAYMENT; LIEN. (a) If a charter holder on
  behalf of which the state makes a payment under the program does not
  immediately repay the Foundation School Program the amount of the
  payment, the commissioner shall withhold any funds due from the
  state to the charter holder as necessary to recover the total amount
  of state and private funds paid on behalf of the charter holder
  under the program.
         (b)  If a charter holder is for any reason, including
  revocation or surrender of a charter or bankruptcy, unable to repay
  any amount due under this subchapter, any loss of funds shall be
  shared equally between the Foundation School Program and the person
  providing the private funds obligated for credit enhancement under
  this subchapter.
         (c)  A charter holder for which credit enhancement is
  provided under this subchapter to purchase, repair, or renovate
  real property for open-enrollment charter school facilities must
  agree to execute a lien on that real property in a form prescribed
  by the commissioner and approved by the attorney general to secure
  repayment of all amounts due to the state from the charter holder,
  including reimbursement of any private funds paid on behalf of an
  open-enrollment charter school under this subchapter.
         (d)  A lien under this section must be filed in the real
  property records of each county in which the real property is
  located. A lien under this section has priority over any other
  claim against the real property except a lien granted to the holders
  of obligations issued to finance the acquisition of the real
  property and any security interest or lien existing before credit
  enhancement is provided under this subchapter.
         (e)  The commissioner shall notify a charter holder of any
  amount determined to be due to the state, including federal funds.
  If the full amount due to the state has not been repaid or recovered
  by the commissioner from other funds due to the charter holder
  within the current and subsequent school year, the commissioner may
  request the attorney general to file an action to foreclose on a
  lien under this section. Funds recovered from foreclosure of a lien
  under this section shall be credited first to any security interest
  or lien with priority over the lien under this section, then to the
  charter holder's obligation under this section, and then to any
  other program to which the funds are due.
         (f)  Venue for a suit under this section is in Travis County.
         Sec. 45.307.  STATUS OF PROGRAM. (a) The program is
  separate from and does not create any claim to the credit
  enhancement program for school district bonds under Subchapter I.
         (b)  This subchapter does not create a debt of the state
  under the Texas Constitution or, except to the extent provided by
  this subchapter, create a payment obligation.
         Sec. 45.308.  RULES. If the commissioner establishes a
  program under this subchapter, the commissioner shall adopt rules
  to administer the program.
         SECTION 76.  Section 46.033, Education Code, is amended to
  read as follows:
         Sec. 46.033.  ELIGIBLE BONDS.  Bonds, including bonds
  issued under Section 45.006, are eligible to be paid with state and
  local funds under this subchapter if:
               (1)  the district made payments on the bonds during the
  final [2006-2007] school year of the preceding state fiscal
  biennium or taxes levied to pay the principal of and interest on the
  bonds were included in the district's audited debt service
  collections for that school year; and
               (2)  the district does not receive state assistance
  under Subchapter A for payment of the principal and interest on the
  bonds.
         SECTION 77.  Section 46.034(c), Education Code, is amended
  to read as follows:
         (c)  If the amount required to pay the principal of and
  interest on eligible bonds in a school year is less than the amount
  of payments made by the district on the bonds during the final
  [2006-2007] school year of the preceding state fiscal biennium or
  the district's audited debt service collections for that school
  year, the district may not receive aid in excess of the amount that,
  when added to the district's local revenue for the school year,
  equals the amount required to pay the principal of and interest on
  the bonds.
         SECTION 78.  Section 3.005, Election Code, is amended by
  amending Subsection (a) and adding Subsection (d) to read as
  follows:
         (a)  Except as provided by Subsections [Subsection] (c) and
  (d), an election ordered by an authority of a political subdivision
  shall be ordered not later than the 62nd day before election day.
         (d)  An election under Section 26.08, Tax Code, to ratify a
  tax rate adopted by the governing body of a school district under
  Section 26.05(g) of that code shall be ordered not later than the
  30th day before election day.
         SECTION 79.  Section 4.008, Election Code, is amended to
  read as follows:
         Sec. 4.008.  NOTICE TO COUNTY CLERK. (a) Except as provided
  by Subsection (b), the [The] governing body of a political
  subdivision, other than a county, that orders an election shall
  deliver notice of the election to the county clerk of each county in
  which the political subdivision is located not later than the 60th
  day before election day.
         (b)  The governing body of a school district that orders an
  election under Section 26.08, Tax Code, to ratify an ad valorem tax
  rate adopted by the governing body under Section 26.05(g) of that
  code shall deliver notice of the election to the county clerk of
  each county in which the school district is located not later than
  the 30th day before election day.
         SECTION 80.  Sections 403.302(d), (i), and (j), Government
  Code, are amended to read as follows:
         (d)  For the purposes of this section, "taxable value" means
  the market value of all taxable property less:
               (1)  the total dollar amount of any residence homestead
  exemptions lawfully granted under Section 11.13(b) or (c), Tax
  Code, in the year that is the subject of the study for each school
  district;
               (2)  one-half of the total dollar amount of any
  residence homestead exemptions granted under Section 11.13(n), Tax
  Code, in the year that is the subject of the study for each school
  district;
               (3)  the total dollar amount of any exemptions granted
  before May 31, 1993, within a reinvestment zone under agreements
  authorized by Chapter 312, Tax Code;
               (4)  subject to Subsection (e), the total dollar amount
  of any captured appraised value of property that:
                     (A)  is within a reinvestment zone created on or
  before May 31, 1999, or is proposed to be included within the
  boundaries of a reinvestment zone as the boundaries of the zone and
  the proposed portion of tax increment paid into the tax increment
  fund by a school district are described in a written notification
  provided by the municipality or the board of directors of the zone
  to the governing bodies of the other taxing units in the manner
  provided by Section 311.003(e), Tax Code, before May 31, 1999, and
  within the boundaries of the zone as those boundaries existed on
  September 1, 1999, including subsequent improvements to the
  property regardless of when made;
                     (B)  generates taxes paid into a tax increment
  fund created under Chapter 311, Tax Code, under a reinvestment zone
  financing plan approved under Section 311.011(d), Tax Code, on or
  before September 1, 1999; and
                     (C)  is eligible for tax increment financing under
  Chapter 311, Tax Code;
               (5)  [for a school district for which a deduction from
  taxable value is made under Subdivision (4), an amount equal to the
  taxable value required to generate revenue when taxed at the school
  district's current tax rate in an amount that, when added to the
  taxes of the district paid into a tax increment fund as described by
  Subdivision (4)(B), is equal to the total amount of taxes the
  district would have paid into the tax increment fund if the district
  levied taxes at the rate the district levied in 2005;
               [(6)]  the total dollar amount of any captured
  appraised value of property that:
                     (A)  is within a reinvestment zone:
                           (i)  created on or before December 31, 2008,
  by a municipality with a population of less than 18,000; and
                           (ii)  the project plan for which includes
  the alteration, remodeling, repair, or reconstruction of a
  structure that is included on the National Register of Historic
  Places and requires that a portion of the tax increment of the zone
  be used for the improvement or construction of related facilities
  or for affordable housing;
                     (B)  generates school district taxes that are paid
  into a tax increment fund created under Chapter 311, Tax Code; and
                     (C)  is eligible for tax increment financing under
  Chapter 311, Tax Code;
               (6) [(7)]  the total dollar amount of any exemptions
  granted under Section 11.251 or 11.253, Tax Code;
               (7) [(8)]  the difference between the comptroller's
  estimate of the market value and the productivity value of land that
  qualifies for appraisal on the basis of its productive capacity,
  except that the productivity value estimated by the comptroller may
  not exceed the fair market value of the land;
               (8) [(9)]  the portion of the appraised value of
  residence homesteads of individuals who receive a tax limitation
  under Section 11.26, Tax Code, on which school district taxes are
  not imposed in the year that is the subject of the study, calculated
  as if the residence homesteads were appraised at the full value
  required by law;
               (9) [(10)]  a portion of the market value of property
  not otherwise fully taxable by the district at market value because
  of:
                     (A)  action required by statute or the
  constitution of this state that, if the tax rate adopted by the
  district is applied to it, produces an amount equal to the
  difference between the tax that the district would have imposed on
  the property if the property were fully taxable at market value and
  the tax that the district is actually authorized to impose on the
  property, if this subsection does not otherwise require that
  portion to be deducted; or
                     (B)  action taken by the district under Subchapter
  B or C, Chapter 313, Tax Code;
               (10) [(11)]  the market value of all tangible personal
  property, other than manufactured homes, owned by a family or
  individual and not held or used for the production of income;
               (11) [(12)]  the appraised value of property the
  collection of delinquent taxes on which is deferred under Section
  33.06, Tax Code;
               (12) [(13)]  the portion of the appraised value of
  property the collection of delinquent taxes on which is deferred
  under Section 33.065, Tax Code; and
               (13) [(14)]  the amount by which the market value of a
  residence homestead to which Section 23.23, Tax Code, applies
  exceeds the appraised value of that property as calculated under
  that section.
         (i)  If the comptroller determines in the annual study that
  the market value of property in a school district as determined by
  the appraisal district that appraises property for the school
  district, less the total of the amounts and values listed in
  Subsection (d) as determined by that appraisal district, is valid,
  the comptroller, in determining the taxable value of property in
  the school district under Subsection (d), shall for purposes of
  Subsection (d)(13) [(d)(14)] subtract from the market value as
  determined by the appraisal district of residence homesteads to
  which Section 23.23, Tax Code, applies the amount by which that
  amount exceeds the appraised value of those properties as
  calculated by the appraisal district under Section 23.23, Tax Code.
  If the comptroller determines in the annual study that the market
  value of property in a school district as determined by the
  appraisal district that appraises property for the school district,
  less the total of the amounts and values listed in Subsection (d) as
  determined by that appraisal district, is not valid, the
  comptroller, in determining the taxable value of property in the
  school district under Subsection (d), shall for purposes of
  Subsection (d)(13) [(d)(14)] subtract from the market value as
  estimated by the comptroller of residence homesteads to which
  Section 23.23, Tax Code, applies the amount by which that amount
  exceeds the appraised value of those properties as calculated by
  the appraisal district under Section 23.23, Tax Code.
         (j)  For purposes of Chapter 42 [Section 42.2511], Education
  Code, the comptroller shall certify to the commissioner of
  education:
               (1)  a final value for each school district computed on
  a residence homestead exemption under Section 1-b(c), Article VIII,
  Texas Constitution, of $5,000;
               (2)  a final value for each school district computed
  on:
                     (A)  a residence homestead exemption under
  Section 1-b(c), Article VIII, Texas Constitution, of $15,000; and
                     (B)  the effect of the additional limitation on
  tax increases under Section 1-b(d), Article VIII, Texas
  Constitution, as proposed by H.J.R. No. 4, 75th Legislature,
  Regular Session, 1997; and
               (3)  a final value for each school district computed on
  the effect of the reduction of the limitation on tax increases to
  reflect any reduction in the school district tax rate as provided by
  Section 11.26(a-1), (a-2), or (a-3), Tax Code, as applicable.
         SECTION 81.  Section 822.201(b), Government Code, is amended
  to read as follows:
         (b)  "Salary and wages" as used in Subsection (a) means:
               (1)  normal periodic payments of money for service the
  right to which accrues on a regular basis in proportion to the
  service performed;
               (2)  amounts by which the member's salary is reduced
  under a salary reduction agreement authorized by Chapter 610;
               (3)  amounts that would otherwise qualify as salary and
  wages under Subdivision (1) but are not received directly by the
  member pursuant to a good faith, voluntary written salary reduction
  agreement in order to finance payments to a deferred compensation
  or tax sheltered annuity program specifically authorized by state
  law or to finance benefit options under a cafeteria plan qualifying
  under Section 125 of the Internal Revenue Code of 1986, if:
                     (A)  the program or benefit options are made
  available to all employees of the employer; and
                     (B)  the benefit options in the cafeteria plan are
  limited to one or more options that provide deferred compensation,
  group health and disability insurance, group term life insurance,
  dependent care assistance programs, or group legal services plans;
               (4)  performance pay awarded to an employee by a school
  district as part of a total compensation plan approved by the board
  of trustees of the district and meeting the requirements of
  Subsection (e);
               (5)  the benefit replacement pay a person earns under
  Subchapter H, Chapter 659, except as provided by Subsection (c);
               (6)  stipends paid to teachers in accordance with
  Section 21.410, 21.411, 21.412, or 21.413, Education Code;
               (7)  amounts by which the member's salary is reduced or
  that are deducted from the member's salary as authorized by
  Subchapter J, Chapter 659;
               (8)  a merit salary increase made under Section 51.962,
  Education Code;
               (9)  amounts received under the relevant parts of the
  [awards for student achievement program under Subchapter N, Chapter
  21, Education Code, the] educator excellence awards program under
  Subchapter O, Chapter 21, Education Code, or a mentoring program
  under Section 21.458, Education Code, that authorize [authorized]
  compensation for service; and
               (10)  salary amounts designated as health care
  supplementation by an employee under Subchapter D, Chapter 22,
  Education Code.
         SECTION 82.  Sections 825.405(a) and (b), Government Code,
  are amended to read as follows:
         (a)  For members entitled to the minimum salary for certain
  school personnel under Section 21.402, Education Code, and for
  members who would have been entitled to the minimum salary for
  certain school personnel under former Section 16.056, Education
  Code, as that section existed on January 1, 1995, the employing
  district shall pay the state's contribution on the portion of the
  member's salary that exceeds the statutory minimum salary [or
  former statutory minimum, as applicable].
         (b)  For purposes of this section:
               (1)  [,] the statutory minimum salary for certain
  school personnel under Section 21.402, Education Code, is the
  salary provided by that section [Section 21.402 or the former
  Sections 16.056 and 16.058, Education Code,] multiplied by the cost
  of education adjustment applicable under Section 42.102, Education
  Code, to the district in which the member is employed; and
               (2)  the statutory minimum salary for members who would
  have been entitled to the minimum salary for certain school
  personnel under former Section 16.056, Education Code, as that
  section existed on January 1, 1995, is a minimum salary computed in
  the same manner as the minimum salary for certain school personnel
  under Section 21.402, Education Code, multiplied by the cost of
  education adjustment applicable under Section 42.102, Education
  Code, to the district in which the member is employed.
         SECTION 83.  Section 1579.251(a), Insurance Code, is amended
  to read as follows:
         (a)  The state shall assist employees of participating
  school districts and charter schools in the purchase of group
  health coverage under this chapter by providing for each covered
  employee the amount of $900 each state fiscal year or a greater
  amount as provided by the General Appropriations Act. The state
  contribution shall be distributed through the school finance
  formulas under Chapters 41 and 42, Education Code, and used by
  school districts and charter schools as provided by Section
  [Sections 42.2514 and] 42.260, Education Code.
         SECTION 84.  Section 1581.053(b), Insurance Code, is amended
  to read as follows:
         (b)  Notwithstanding Subsection (a), amounts a district or
  school is required to use to pay contributions under a group health
  coverage plan for district or school employees under Section
  [42.2514 or] 42.260, Education Code, other than amounts described
  by Section 42.260(c)(2)(B), are not used in computing whether the
  district or school complies with Section 1581.052.
         SECTION 85.  Section 26.01(e), Tax Code, is amended to read
  as follows:
         (e)  Except as provided by Subsection (f), not later than
  April 30 [by June 7], the chief appraiser shall prepare and certify
  to the assessor for each county, municipality, and school district
  participating in the appraisal district an estimate of the taxable
  value of property in that taxing unit.  The chief appraiser shall
  assist each county, municipality, and school district in
  determining values of property in that taxing unit for the taxing
  unit's budgetary purposes.
         SECTION 86.  Section 26.05, Tax Code, is amended by adding
  Subsection (g) to read as follows:
         (g)  Notwithstanding Subsection (a), the governing body of a
  school district that elects to adopt a tax rate before the adoption
  of a budget for the fiscal year that begins in the current tax year
  may adopt a tax rate for the current tax year before receipt of the
  certified appraisal roll for the school district if the chief
  appraiser of the appraisal district in which the school district
  participates has certified to the assessor for the school district
  an estimate of the taxable value of property in the school district
  as provided by Section 26.01(e). If a school district adopts a tax
  rate under this subsection, the effective tax rate and the rollback
  tax rate of the district shall be calculated based on the certified
  estimate of taxable value.
         SECTION 87.  (a) Section 26.08, Tax Code, is amended by
  adding Subsection (p) to read as follows:
         (p)  Notwithstanding Subsections (i), (n), and (o), if for
  the preceding tax year a school district adopted a maintenance and
  operations tax rate that was less than the district's effective
  maintenance and operations tax rate for that preceding tax year,
  the rollback tax rate of the district for the current tax year is
  calculated as if the district adopted a maintenance and operations
  tax rate for the preceding tax year that was equal to the district's
  effective maintenance and operations tax rate for that preceding
  tax year.
         (b)  Subsection (a), Section 45.001, Education Code, is
  amended to read as follows:
         (a)  The governing board of an independent school district,
  including the city council or commission that has jurisdiction over
  a municipally controlled independent school district, the
  governing board of a rural high school district, and the
  commissioners court of a county, on behalf of each common school
  district under its jurisdiction, may:
               (1)  issue bonds for:
                     (A)  the construction, acquisition, and equipment
  of school buildings in the district;
                     (B)  the acquisition of property or the
  refinancing of property financed under a contract entered under
  Subchapter A, Chapter 271, Local Government Code, regardless of
  whether payment obligations under the contract are due in the
  current year or a future year;
                     (C)  the purchase of the necessary sites for
  school buildings; and
                     (D)  the purchase of new school buses; and
               (2)  may levy, pledge, assess, and collect annual ad
  valorem taxes sufficient to pay the principal of and interest on the
  bonds as or before the principal and interest become due, subject to
  Section 45.003.
         (c)  The change in law made by this section applies to the ad
  valorem tax rate of a school district beginning with the 2009 tax
  year, except as provided by Subsection (d) of this section.
         (d)  If the governing body of a school district adopted an ad
  valorem tax rate for the school district for the 2009 tax year
  before the effective date of this section, the change in law made by
  this section applies to the ad valorem tax rate of that school
  district beginning with the 2010 tax year, and the law in effect
  when the tax rate was adopted applies to the 2009 tax year with
  respect to that school district.
         (e)  This section takes effect immediately if this Act
  receives a vote of two-thirds of all the members elected to each
  house, as provided by Section 39, Article III, Texas Constitution.
  If this Act does not receive the vote necessary for immediate
  effect, this section takes effect September 1, 2009.
         SECTION 88.  Section 31.06(a), Tax Code, is amended to read
  as follows:
         (a)  Except as provided by Section 31.061, taxes are payable
  only as provided by this section. A [in currency of the United
  States. However, a] collector shall [may] accept United States
  currency or a check or money order in payment of taxes[,] and shall
  [may] accept payment by credit card or electronic funds transfer.
  [A collector and a person may enter into an agreement under which
  the person pays taxes by electronic funds transfer. The agreement
  must:
               [(1)  be in writing;
               [(2)  be signed by the collector and the person; and
         [(3)     specify the means or format of payment by electronic
  funds transfer.]
         SECTION 89.  Section 311.013(n), Tax Code, is amended to
  read as follows:
         (n)  This subsection applies only to a school district whose
  taxable value computed under Section 403.302(d), Government Code,
  is reduced in accordance with Subdivision (4) [(5)] of that
  subsection. In addition to the amount otherwise required to be paid
  into the tax increment fund, the district shall pay into the fund an
  amount equal to the amount by which the amount of taxes the district
  would have been required to pay into the fund in the current year if
  the district levied taxes at the rate the district levied in 2005
  exceeds the amount the district is otherwise required to pay into
  the fund in the year of the reduction[, not to exceed the amount the
  school district realizes from the reduction in the school
  district's taxable value under Section 403.302(d)(5), Government
  Code].
         SECTION 90.  (a) Section 5, Chapter 259 (H.B. 323), Acts of
  the 80th Legislature, Regular Session, 2007, is repealed.
         (b)  Section 547.701(e), Transportation Code, as added by
  Chapter 259 (H.B. 323), Acts of the 80th Legislature, Regular
  Session, 2007, takes effect September 1, 2009.
         (c)  Section 547.701, Transportation Code, is amended by
  adding Subsection (f) to read as follows:
         (f)  A school district is required to comply with Subsection
  (e) only to the extent that the Texas Education Agency pays or
  commits to pay the district for expenses incurred in complying with
  that subsection. The Texas Education Agency may make grants of
  appropriated money for the purpose of paying school districts under
  this subsection.
         SECTION 91.  (a) The commissioner of education, in
  collaboration with the commissioner of higher education, shall
  conduct a study of dual credit programs and courses. The study must
  focus on the costs to the state, school district, community
  college, and student.
         (b)  The commissioner of education, in collaboration with
  the commissioner of higher education, shall, based on the results
  of the study, make recommendations to the 82nd Legislature on how to
  provide all students with the opportunity to earn 12 semester
  credit hours of college credit before graduating from high school,
  how to ensure efficient use of state resources regarding dual
  credit programs and courses, and how to promote the ability of
  students to access quality dual credit courses.
         (c)  The study required by this section may be consolidated
  with any other appropriate study regarding dual credit programs and
  courses.
         SECTION 92.  The Texas Education Agency shall evaluate
  whether providers of different types of electronic courses offered
  through the state virtual school network established under Chapter
  30A, Education Code, should receive varying amounts of state
  funding based on the type of course provided. Not later than
  January 1, 2011, the agency shall submit a report of its findings
  and recommendations to the legislature.
         SECTION 93.  The Texas Education Agency shall investigate
  the feasibility of making language acquisition courses available
  through the state virtual school network by obtaining state
  subscriptions or pursuing other possible means of access. Not
  later than January 1, 2011, the agency shall submit a report of its
  findings to the legislature. If the agency determines that it is
  feasible to make language acquisition courses available through the
  network, the report must include recommended mechanisms for
  ensuring progress towards language proficiency of students
  enrolled in those courses.
         SECTION 94.  (a)  The Texas Education Agency shall
  investigate the feasibility of creating one or more series of
  courses to be provided through the state virtual school network
  that focus on the educational needs of students in alternative
  education settings, including students in disciplinary alternative
  education programs under Section 37.008, Education Code, students
  in juvenile justice alternative education programs under Section
  37.011, Education Code, and students under the supervision of a
  juvenile probation department, the Texas Youth Commission, or the
  Texas Department of Criminal Justice. The series of courses to be
  investigated must include a series that would constitute a
  full-time educational program, a series that would offer only
  supplemental courses, and a series that would offer courses through
  which students could recover academic credit for courses in which
  the students were previously unsuccessful.
         (b)  Not later than January 1, 2011, the agency shall submit
  a report of its findings to the legislature.
         SECTION 95.  (a) Notwithstanding any other provision of
  this Act, Sections 12.1331, 19.007(g), 19.009(d-2), and
  21.402(c-1), Education Code, as added by this Act, are expressly
  contingent on a determination by the commissioner of education that
  payment of wage and salary increases and associated benefits
  required by or associated with those sections are allowable uses of
  federal funds received by school districts and open-enrollment
  charter schools under the American Recovery and Reinvestment Act of
  2009 (Pub. L. No. 111-5) and appropriated as part of the Foundation
  School Program. The commissioner may not make a determination
  under this subsection until the state's application to spend funds
  under the American Recovery and Reinvestment Act of 2009 has been
  approved by the United States government. The commissioner shall
  promptly notify school districts and open-enrollment charter
  schools of that determination. A determination by the commissioner
  under this subsection is final and may not be appealed.
         (b)  A school district or open-enrollment charter school may
  enter into an employment contract or agreement that is contingent
  on a determination of the commissioner of education under
  Subsection (a) of this section.
         (c)  The commissioner of education by rule may determine the
  applicable minimum salary schedule for use by school districts
  during the 2010-2011 state fiscal biennium following a
  determination under Subsection (a) of this section. If the
  commissioner determines that federal funds received by school
  districts and open-enrollment charter schools under the American
  Recovery and Reinvestment Act of 2009 may not be used for purposes
  of Sections 12.1331, 19.007(g), 19.009(d-2), and 21.402(c-1),
  Education Code, as added by this Act, those amendments have no
  effect in determining the salary required to be paid to an employee
  of a school district, including the Windham School District, or
  open-enrollment charter school.
         SECTION 96.  (a) The commissioner of education shall
  determine the percentage of entitlement in the foundation school
  program or other program that represents the use of education
  stabilization funds received under the American Recovery and
  Reinvestment Act of 2009 (Pub. L. No. 111-5). In order to receive
  that percentage of total funds available to a school district or
  open-enrollment charter school under the foundation school program
  or other program, a district or school may be required to apply to
  the commissioner using an application developed by the
  commissioner. The commissioner may require an applicant to make
  assurances as to the use and monitoring of funds applied for or
  other requirements, consistent with the American Recovery and
  Reinvestment Act of 2009 (Pub. L. No. 111-5).
         (b)  If any of the funds received by the state under the
  American Recovery and Reinvestment Act of 2009 (Pub. L. No. 111-5)
  that were appropriated for the purpose of funding the foundation
  school program or other program are determined to be unavailable
  temporarily or permanently for that purpose, the commissioner shall
  reduce the total amount of funds to which a district or school is
  entitled under Chapters 41 and 42, Education Code, or other
  programs proportional to the percentage determined under
  Subsection (a) of this section.  A reduction in funding under this
  subsection does not increase the entitlement of a district or
  school in any subsequent year.
         (c)  This section applies to funding provided under Chapters
  41 and 42, Education Code, as amended by this Act, for the 2009-2010
  and 2010-2011 school years. A decision by the commissioner under
  this section is final and may not be appealed.
         SECTION 97.  For purposes of interpreting and implementing
  Section 825.406, Government Code, the Teacher Retirement System of
  Texas may not consider salaries of personnel paid in whole or in
  part from education stabilization funds distributed to school
  districts under the American Recovery and Reinvestment Act of 2009
  (Pub. L. No. 111-5) as being paid from federal funds.
         SECTION 98.  The commissioner of education shall provide
  school districts with the maximum flexibility permitted under
  federal law in the administration of education stabilization funds
  distributed under the American Recovery and Reinvestment Act of
  2009 (Pub. L. No. 111-5).
         SECTION 99.  Section 21.402(c-1), Education Code, as added
  by this Act, is not intended to require an increase in the second
  year of the biennium beginning September 1, 2009.
         SECTION 100.  Section 42.2516(b)(3), Education Code, as
  amended by this Act, applies as if that subdivision were in effect
  in the state fiscal year beginning September 1, 2006, and any
  amounts due a district under that subdivision for the state fiscal
  years beginning September 1, 2006, September 1, 2007, and September
  1, 2008, shall be paid to the district in the state fiscal year
  beginning September 1, 2009, at the time payments are made to the
  district under Section 42.259(f), Education Code.
         SECTION 101.  Section 44.004, Education Code, Sections 3.005
  and 4.008, Election Code, and Sections 26.01 and 26.05, Tax Code, as
  amended by this Act, apply only to ad valorem taxes imposed for a
  tax year beginning on or after the effective date of this Act.
         SECTION 102.  To the extent of any conflict, this Act
  prevails over S.B. No. 1969, Acts of the 81st Legislature, Regular
  Session, 2009.
         SECTION 103.  Section 29.018, Education Code, as added by
  this Act, does not make an appropriation. A provision in that
  section that creates a new governmental program, creates a new
  entitlement, or imposes a new duty on a governmental entity is not
  mandatory during a fiscal period for which the legislature has not
  made specific appropriation to implement that provision.
         SECTION 104.  Section 44.908, Education Code, as added by
  this Act, applies to any expenditure of campus discretionary funds
  that occurs on or after September 1, 2009, regardless of the date on
  which the funds were raised.
         SECTION 105.  (a) The following provisions of the Education
  Code are repealed:
               (1)  Subchapter N, Chapter 21;
               (2)  Sections 21.704(b) and 29.909;
               (3)  Subsection (d), Section 30A.151;
               (4)  Sections 30A.153 and 30A.154;
               (5)  Sections 39.024(e), 39.114(c), and 42.103(e);
               (6)  Sections 42.152(e), (f), (g), (h), (i), (j), (k),
  (l), (m), (n), (o), (p), (t), and (u); and
               (7)  Sections 42.2511, 42.2512, and 42.2514.
         (b)  Subchapter C, Chapter 1581, Insurance Code, is
  repealed.
         (c)  Section 2, Chapter 1191 (H.B. 828), Acts of the 80th
  Legislature, Regular Session, 2007, is repealed.
         (d)  Section 3, Chapter 1337 (S.B. 1788), Acts of the 80th
  Legislature, Regular Session, 2007, is repealed.
         (e)  Section 40, Chapter 1504 (H.B. 6), Acts of the 77th
  Legislature, Regular Session, 2001, is repealed.
         SECTION 106.  Except as otherwise provided by this Act, this
  Act takes effect September 1, 2009.
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
 
         I certify that H.B. No. 3646 was passed by the House on May
  12, 2009, by the following vote:  Yeas 144, Nays 2, 1 present, not
  voting; that the House refused to concur in Senate amendments to
  H.B. No. 3646 on May 29, 2009, and requested the appointment of a
  conference committee to consider the differences between the two
  houses; that the House adopted the conference committee report on
  H.B. No. 3646 on May 31, 2009, by the following vote:  Yeas 146,
  Nays 0, 1 present, not voting; and that the House adopted H.C.R. No.
  290 authorizing certain corrections in H.B. No. 3646 on June 1,
  2009, by the following vote:  Yeas 145, Nays 0, 1 present, not
  voting.
 
  ______________________________
  Chief Clerk of the House   
 
         I certify that H.B. No. 3646 was passed by the Senate, with
  amendments, on May 26, 2009, 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; that
  the Senate adopted the conference committee report on H.B. No. 3646
  on June 1, 2009, by the following vote:  Yeas 31, Nays 0; and that
  the Senate adopted H.C.R. No. 290 authorizing certain corrections
  in H.B. No. 3646 on June 1, 2009, by the following vote:  Yeas 31,
  Nays 0.
 
  ______________________________
  Secretary of the Senate   
  APPROVED: __________________
                  Date       
   
           __________________
                Governor