By: Huberty, et al. H.B. No. 21 (Senate Sponsor - Taylor of Galveston) (In the Senate - Received from the House April 24, 2017; May 9, 2017, read first time and referred to Committee on Education; May 16, 2017, reported adversely, with favorable Committee Substitute by the following vote: Yeas 8, Nays 2, 1 present not voting; May 16, 2017, sent to printer.)Click here to see the committee vote COMMITTEE SUBSTITUTE FOR H.B. No. 21 By: Taylor of Galveston A BILL TO BE ENTITLED AN ACT relating to the funding of primary and secondary education. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: SECTION 1. Section 7.055(b), Education Code, is amended by adding Subdivision (42) to read as follows: (42) The commissioner may accept a gift, donation, or other contribution on behalf of the public school system or agency and, unless otherwise specified by the donor, may use the contribution for the benefit of the public school system or agency in the manner the commissioner determines appropriate. SECTION 2. Section 7.062(c), Education Code, is amended to read as follows: (c) Except as otherwise provided by this subsection, if the commissioner certifies that the amount appropriated for a state fiscal year for purposes of Subchapters A and B, Chapter 46, exceeds the amount to which school districts are entitled under those subchapters for that year, the commissioner shall use the excess funds, in an amount not to exceed $20 million in any state fiscal year, for the purpose of making grants under this section. The use of excess funds under this subsection has priority over any provision of Chapter 42 that permits or directs the use of excess foundation school program funds, including Sections [42.2517,] 42.2521, 42.2522, and 42.2531. The commissioner is required to use excess funds as provided by this subsection only if the commissioner is not required to reduce the total amount of state funds allocated to school districts under Section 42.253(h). SECTION 3. Section 11.158(a), Education Code, is amended to read as follows: (a) The board of trustees of an independent school district may require payment of: (1) a fee for materials used in any program in which the resultant product in excess of minimum requirements becomes, at the student's option, the personal property of the student, if the fee does not exceed the cost of materials; (2) membership dues in student organizations or clubs and admission fees or charges for attending extracurricular activities, if membership or attendance is voluntary; (3) a security deposit for the return of materials, supplies, or equipment; (4) a fee for personal physical education and athletic equipment and apparel, although any student may provide the student's own equipment or apparel if it meets reasonable requirements and standards relating to health and safety established by the board; (5) a fee for items of personal use or products that a student may purchase at the student's option, such as student publications, class rings, annuals, and graduation announcements; (6) a fee specifically permitted by any other statute; (7) a fee for an authorized voluntary student health and accident benefit plan; (8) a reasonable fee, not to exceed the actual annual maintenance cost, for the use of musical instruments and uniforms owned or rented by the district; (9) a fee for items of personal apparel that become the property of the student and that are used in extracurricular activities; (10) a parking fee or a fee for an identification card; (11) a fee for a driver training course, not to exceed the actual district cost per student in the program for the current school year; (12) a fee for a course offered for credit that requires the use of facilities not available on the school premises or the employment of an educator who is not part of the school's regular staff, if participation in the course is at the student's option; (13) a fee for a course offered during summer school, except that the board may charge a fee for a course required for graduation only if the course is also offered without a fee during the regular school year; (14) a reasonable fee for transportation of a student who lives within two miles of the school the student attends to and from that school[, except that the board may not charge a fee for transportation for which the school district receives funds under Section 42.155(d)]; or (15) a reasonable fee, not to exceed $50, for costs associated with an educational program offered outside of regular school hours through which a student who was absent from class receives instruction voluntarily for the purpose of making up the missed instruction and meeting the level of attendance required under Section 25.092[; or [(16) if the district does not receive any funds under Section 42.155 and does not participate in a county transportation system for which an allotment is provided under Section 42.155(i), a reasonable fee for the transportation of a student to and from the school the student attends]. SECTION 4. Effective September 1, 2018, Section 12.106(a-1), Education Code, is amended to read as follows: (a-1) In determining funding for an open-enrollment charter school under Subsection (a): (1) [,] adjustments under Sections 42.102, [42.103,] 42.104, and 42.105 are based on the average adjustment for the state; and (2) the adjustment under Section 42.103 is based on the average adjustment for the state that would have been provided under that section as it existed on January 1, 2018. SECTION 5. Section 29.153(c), Education Code, is amended to read as follows: (c) A prekindergarten class under this section shall be operated on a half-day basis. A district is not required to provide transportation for a prekindergarten class[, but transportation, if provided, is included for funding purposes as part of the regular transportation system]. SECTION 6. Subchapter F, Chapter 29, Education Code, is amended by adding Section 29.194 to read as follows: Sec. 29.194. STUDY ON CAREER AND TECHNOLOGY EDUCATION COURSES. (a) The commissioner shall conduct a study regarding: (1) providing career and technology education courses during the summer, including: (A) the feasibility of providing those courses; (B) the potential demand for those courses; (C) any funding considerations associated with providing those courses; and (D) any other matter the commissioner determines appropriate; and (2) the feasibility of extending career and technology education programs to students enrolled below the eighth grade level and providing funding for those programs. (b) Not later than December 1, 2018, the commissioner shall submit to the governor and the members of the legislature a report on the results of the study and any recommendations for legislative or other action. (c) The provisions of this section apply only if the commissioner receives sufficient money to pay for the study and report from gifts, donations, or other contributions that may be used for that purpose. (d) This section expires September 1, 2019. SECTION 7. Chapter 29, Education Code, is amended by adding Subchapter J to read as follows: SUBCHAPTER J. EDUCATION SAVINGS ACCOUNT PROGRAM Sec. 29.351. DEFINITIONS. In this subchapter: (1) "Account" means an education savings account established under the program. (2) "Child with a disability" means a child who is: (A) eligible to participate in a school district's special education program under Section 29.003; or (B) covered by Section 504, Rehabilitation Act of 1973 (29 U.S.C. Section 794). (3) "Curriculum" means a complete course of study for a particular content area or grade level. (4) "Financial institution" means a bank, credit union, savings bank, or savings and loan association organized under the laws of this state, the laws of another state, or federal law that has its main office or a branch office in this state. The term does not include any institution the deposits of which are not insured by the Federal Deposit Insurance Corporation or the National Credit Union Administration. (5) "Institution of higher education" and "private or independent institution of higher education" have the meanings assigned by Section 61.003. (6) "Parent" means a resident of this state who is a natural or adoptive parent, managing or possessory conservator, legal guardian, custodian, or other person with legal authority to act on behalf of a child. (7) "Program" means the education savings account program established under this subchapter. (8) "Program participant" means a child and a parent of a child enrolled in the program. Sec. 29.352. PURPOSES. The purposes of the education savings account program are to: (1) improve public schools and overall academic performance; (2) promote efficiency; (3) promote and preserve the liberties and rights of the people; and (4) increase parental options. Sec. 29.353. ESTABLISHMENT OF PROGRAM. (a) The comptroller shall establish and administer an education savings account program to provide funding for certain education-related expenses of eligible children. (b) The comptroller, with cooperation from the agency, shall ensure that information about the program is readily available to the public through various sources, including the comptroller's and the agency's respective Internet websites. The information made available through the comptroller's Internet website must include a notice that: (1) states that a private school is not subject to laws regarding the provision of educational services in the same manner as a public school, and a child with a disability attending a private school may not receive the services a child with a disability attending a public school is entitled to receive under federal and state law; and (2) provides information regarding rights to which a child with a disability is entitled under federal and state law if the child attends a public school, including: (A) rights provided under the Individuals with Disabilities Education Act (20 U.S.C. Section 1400 et seq.), including: (i) an individualized education program; (ii) educational services provided in the least restrictive environment; (iii) instruction from certified teachers; (iv) due process hearings to ensure proper and full implementation of an individualized education program; (v) transition and planning services; and (vi) supplementary aids and services; (B) rights provided under Subchapter A; and (C) other rights provided under federal or state law. Sec. 29.3531. EDUCATION SAVINGS ACCOUNT PROGRAM FUND. (a) The education savings account program fund is an account in the general revenue fund to be administered by the comptroller. (b) The fund is composed of: (1) general revenue transferred to the fund; (2) money appropriated to the fund; (3) gifts, grants, and donations received under Section 29.371; and (4) any other money available for purposes of the program. (c) Money in the fund may be appropriated only to the comptroller for purposes of making payments to program participants and administering the program under this subchapter. Sec. 29.354. ELIGIBLE CHILD. (a) A child is eligible to participate in the program if the child: (1) is a child with a disability; (2) is eligible to attend a public school under Section 25.001; and (3) was enrolled in a public school in this state during the entire preceding academic year. (b) A child who establishes eligibility under this section may participate in the program until the earliest of the following dates: (1) the date that is three months after the date on which the child graduates from high school; (2) the date on which the child is no longer eligible to attend a public school under Section 25.001; (3) the date on which the child enrolls in a public school, including an open-enrollment charter school; or (4) the date on which the child is declared ineligible for the program by the comptroller under this subchapter. (c) Notwithstanding Subsection (b), the comptroller shall establish guidelines for, in the least disruptive manner possible: (1) a child participating in the program to cease participation and enroll in a public school, including an open-enrollment charter school; and (2) a child who previously participated in the program and subsequently enrolled in a public school, including an open-enrollment charter school, to resume participation in the program. Sec. 29.355. ENROLLMENT IN PROGRAM. (a) A parent of an eligible child may enroll the child in the program for the following school year. (b) The comptroller shall by rule create an enrollment form for the program and make the enrollment form readily available to interested parents through various sources, including the comptroller's Internet website. An enrollment form for the program must be submitted to the comptroller electronically. (c) The comptroller shall post on the comptroller's Internet website and provide to each parent who submits an enrollment form a publication that describes the operation of the program, including: (1) expenses allowed under the program under Section 29.357; (2) expense reporting requirements; and (3) a description of the responsibilities of program participants and the duties of the comptroller under this subchapter. (d) The comptroller shall provide to each parent who submits an enrollment form a written copy of the notice described by Section 29.353(b). Before the parent may receive funding under the program, the parent must sign and return the notice to the comptroller. Sec. 29.356. PARTICIPATION IN PROGRAM. (a) To receive funding under the program, a parent of an eligible child must agree to: (1) spend funds received through the program only for expenses allowed under Section 29.357; (2) notify the comptroller if the child enrolls in a public school, including an open-enrollment charter school, not later than the 30th day after the date of enrollment; and (3) inform the comptroller if the child graduates from high school. (b) The parent of a child participating in the program is the trustee of the child's account. (c) The comptroller shall provide annually to each program participant the publication provided under Section 29.355(c). Sec. 29.357. APPROVED EDUCATION-RELATED EXPENSES. (a) Funds received under the program may be used only for the following expenses incurred by a program participant: (1) tuition and fees: (A) at a private school accredited by an organization that is recognized by the Texas Private School Accreditation Commission; (B) at an institution of higher education or a private or independent institution of higher education; or (C) for an online educational course or program; (2) the purchase of textbooks or other instructional materials required by a school, institution, course, or program described by Subdivision (1) in which the child is enrolled; (3) fees for classes or other educational services provided by a public school, if the classes or services do not qualify the child to be included in the school's average daily attendance; (4) fees for services provided by a private tutor or teaching service; (5) costs of transportation to and from school, not to exceed $500 per year; (6) fees for educational therapies or services provided by a practitioner or provider; (7) costs of computer hardware and software and other technological devices prescribed by a physician to facilitate a child's education, not to exceed in any year 10 percent of the total amount paid to the program participant's account that year; (8) fees for a nationally norm-referenced achievement test or examination, an assessment instrument adopted by the agency under Section 39.023, an advanced placement test or similar examination, or any examination related to college or university admission; (9) fees for the management of the participant's account charged by a financial institution; and (10) costs of breakfast or lunch provided to a child during the school day by a private school. (b) Expenses allowed under Subsection (a) do not include expenses for: (1) consumable supplies, including paper, pens, pencils, folders, and notebooks; (2) food, other than breakfast or lunch as authorized under Subsection (a)(10); or (3) before-school or after-school child care and child care during school holidays and vacations. (c) An education service provider or vendor of educational products must provide a program participant with a receipt for each expense allowed under Subsection (a) charged by the provider or vendor to the participant. (d) The content, subject to Section 29.364(c), or religious nature of a product or service may not be considered in determining whether a payment for the product or service is an expense allowed under Subsection (a). (e) A finding that a program participant used funds distributed under the program to pay for an expense not allowed under Subsection (a) does not affect the validity of any payment made by the participant for an expense that is allowed under that subsection. Sec. 29.358. AMOUNT OF PAYMENT; FINANCING. (a) A parent of an eligible child shall receive each year that the child participates in the program a payment from the state to the child's account in an amount that is equal to 90 percent of the state average maintenance and operations expenditures per student for the preceding state fiscal year. (b) In addition to any funding the district receives under Chapter 42, for each child participating in the program, the school district the child would otherwise attend is entitled to receive for the first year in which the child participates in the program an amount equal to five percent of the state average maintenance and operations expenditures per student for the preceding state fiscal year. (c) For the first year a child participates in the program, the child is included in the weighted average daily attendance of the school district the child would otherwise attend for purposes of determining the district's equalized wealth level under Chapter 41. (d) Any funds remaining in a child's account at the end of a fiscal year are carried forward to the next fiscal year unless another provision of this subchapter mandates the closure of the account. (e) The parent of a child participating in the program may make payments for the expenses of educational programs, services, and products not covered by funds in the child's account. (f) A payment under Subsection (a) may not be financed using federal funds or money appropriated from the permanent school fund or the available school fund. Sec. 29.359. ADMINISTRATION OF ACCOUNTS. (a) The comptroller may contract with one or more financial institutions to establish and manage an account for each child participating in the program. A program participant must be able to access the participant's account by using an online or electronic transfer payment service. (b) The comptroller shall make quarterly payments to each program participant's account in equal amounts, with the first payment for each school year made on September 1 and the remaining payments made on or before the 15th day of November, February, and May. (c) The comptroller may deduct an amount from each quarterly payment to a program participant's account to cover the comptroller's cost of administering the program. The amount deducted may not exceed five percent of the payment. (d) Not later than 30 days after the end of each fiscal year, the comptroller shall reconcile payments made to and from all accounts under the program. (e) On the date on which a child who participated in the program is no longer eligible to participate in the program under Section 29.354(b), the child's account is closed and any remaining funds are returned to the state for deposit in the education savings account program fund. (f) The comptroller may contract with a private entity to administer all or any part of the program. Sec. 29.360. RANDOM AUDITING OF ACCOUNTS. (a) The comptroller shall contract with a private entity to randomly audit accounts as necessary to ensure compliance with applicable law and the requirements of the program. (b) In auditing an account, the comptroller or private entity may require that a program participant provide further information and documentation regarding any payment from the participant's account. (c) The private entity shall report to the comptroller any violation of this subchapter or other relevant law found by the entity during an audit conducted under this section. Sec. 29.361. SUSPENSION OF ACCOUNT. (a) The comptroller shall suspend the account of a program participant who fails to comply with applicable law or a requirement of the program, including a requirement under Section 29.356(a), or who substantially misuses funds received under the program. (b) On suspension of an account under Subsection (a), the comptroller shall notify the program participant in writing that the account has been suspended and that no further payments may be made from the account. The notification must specify the grounds for the suspension and state that the participant has 10 business days to respond and take any corrective action required by the comptroller. (c) On the expiration of the 10-day period under Subsection (b), the comptroller shall: (1) order permanent closure of the suspended account and declare the program participant ineligible for the program; (2) order temporary reinstatement of the account, conditioned on the performance of a specified action by the participant; or (3) order full reinstatement of the account. (d) The comptroller may recover funds distributed under the program that were used for expenses not allowed under Section 29.357(a) from the program participant or the entity that received the funds if the participant's account is suspended or closed under this section. Sec. 29.362. TUITION AND FEES; REFUND PROHIBITED. (a) An education service provider may not charge a child participating in the program an amount greater than the standard amount charged for that service by the provider. (b) An education service provider or a vendor of educational products receiving funds distributed under the program may not in any manner rebate, refund, or credit to or share with a program participant, or any person on behalf of a participant, any program funds paid or owed by the participant to the provider or vendor. Sec. 29.363. REFERRAL TO ATTORNEY GENERAL. (a) If the comptroller obtains evidence of fraudulent use of an account, the comptroller may refer the case to the attorney general for investigation. (b) With the consent of the appropriate local county or district attorney, the attorney general has concurrent jurisdiction with the consenting local prosecutor to prosecute an offense referred to the attorney general under Subsection (a). Sec. 29.364. PROVIDER ACCOUNTABILITY. (a) To receive funds distributed under the program, a private school must be accredited by an organization that is recognized by the Texas Private School Accreditation Commission. (b) A practitioner or provider who provides educational therapies or services must be licensed or accredited by a regional or national accrediting organization to receive funds distributed under the program. (c) A private tutor, teaching service, or online educational course or program provider must apply to and be approved by the commissioner to receive funds distributed under the program. (d) To be eligible for approval under Subsection (c), a private tutor or each employee of a teaching service who intends to provide educational services to a program participant must: (1) be a teacher who: (A) is certified under Subchapter B, Chapter 21; (B) holds a National Board Certification issued by the National Board for Professional Teaching Standards; or (C) has experience teaching at an institution of higher education or private or independent institution of higher education; and (2) either: (A) complete a national criminal history record information review; or (B) provide to the commissioner documentation indicating that the tutor or employee, as applicable, has completed a national criminal history record information review within a period established by commissioner rule. (e) The commissioner shall review the national criminal history record information or documentation for each private tutor or teaching service who submits an application under Subsection (c). The tutor or teaching service must provide the commissioner with any information requested by the commissioner to enable the commissioner to complete the review. (f) The commissioner shall maintain and provide to the comptroller a list of private tutors, teaching services, and online educational courses or program providers approved to receive funds distributed under the program. The comptroller shall post the list on the comptroller's Internet website. (g) A private tutor, teaching service, or online educational course or program provider may appeal to the comptroller the commissioner's rejection of an application submitted under Subsection (c). (h) The commissioner may adopt rules necessary to exercise the commissioner's powers and duties under this section. Sec. 29.365. PROGRAM PARTICIPANT, PROVIDER, AND VENDOR AUTONOMY. (a) An education service provider or vendor of educational products that receives funds distributed under the program is not an agent of the state or federal government. (b) Except as provided by this subchapter, the comptroller, the commissioner, the agency, the State Board of Education, any other state agency, or any school district may not: (1) regulate the educational program of an education service provider or vendor of educational products that receives funds distributed under the program; or (2) exercise control or supervision over a program participant or an education service provider or vendor of educational products that receives funds distributed under the program. (c) The program does not expand the regulatory authority of the state or any school district to impose any additional regulation on an education service provider or vendor of educational products except those reasonably necessary to enforce the program as provided by this subchapter. (d) A private school may not be required to modify the school's creed, practices, admissions policies, curriculum, performance standards, or assessments to receive funds distributed under the program. (e) A private school voluntarily selected by a parent for the parent's child to attend, with or without governmental assistance, may not be required to comply with any state law or rule governing the applicable educational program that was not in effect on January 1, 2017. (f) In any proceeding challenging a rule adopted by a state agency or officer under this subchapter, the agency or officer has the burden of proof to establish that the rule: (1) is necessary to implement or enforce the program as provided by this subchapter; and (2) does not impose an undue burden on a program participant or an education service provider or vendor of educational products that receives or seeks to receive funds distributed under the program. Sec. 29.366. STUDENT RECORDS AND INFORMATION. (a) On request by the parent of a child participating in the program, the school district or open-enrollment charter school that the child would otherwise attend shall provide a copy of the child's school records possessed by the district or school, if any, to the child's parent or, if applicable, the private school the child attends. (b) The agency shall provide to the comptroller any information available to the agency requested by the comptroller regarding a child who participates or seeks to participate in the program. The comptroller may not retain information provided under this subsection beyond the period necessary to determine: (1) a child's eligibility to participate in the program; or (2) the amount of a payment to a program participant's account under Section 29.358. Sec. 29.367. REPORTING NUMBER OF PARTICIPANTS. (a) Not later than October 1 of each year, the comptroller shall notify the commissioner and the Legislative Budget Board of the number of eligible children likely to participate in the program, disaggregated by the school district or open-enrollment charter school the eligible children would otherwise attend. (b) Not later than March 1 of each year, the comptroller shall provide final information to the commissioner and the Legislative Budget Board regarding the number of children participating in the program, disaggregated in the same manner as the initial information under Subsection (a). Sec. 29.368. ANNUAL SURVEY. The comptroller may conduct an annual parental satisfaction survey that asks each parent of a child participating in the program to express: (1) the parent's overall level of satisfaction with the program; and (2) the parent's opinion on specified topics and issues relevant to the effectiveness of the program. Sec. 29.369. PARENT REVIEW COMMITTEE. (a) A parent review committee is established to assist the comptroller, at the comptroller's request, in: (1) determining whether certain expenses are allowed under Section 29.357; and (2) reviewing an appeal of the commissioner's decision to reject an application of a private tutor, teaching service, or online educational course or program provider for approval under Section 29.364 to receive funds distributed under the program. (b) The committee consists of the comptroller, or a representative designated by the comptroller, and eight members appointed by the comptroller. Each appointed member must be a parent of a child participating in the program. In making appointments to the committee, the comptroller shall ensure that parents from at least four counties are included. (c) An appointed member of the committee serves a one-year term at the pleasure of the comptroller and may be reappointed. (d) The comptroller or the representative designated by the comptroller, as applicable, is the chair of the committee and may vote on a matter before the committee only if there is a tie. Sec. 29.370. RULES. The comptroller shall: (1) adopt rules as necessary to implement this subchapter, including: (A) rules regarding expense reporting requirements for program participants; and (B) rules for implementing this subchapter in a manner that ensures compliance with federal law regarding confidentiality of student educational information, including the Family Educational Rights and Privacy Act of 1974 (20 U.S.C. Section 1232g); and (2) coordinate as necessary to: (A) calculate annually the savings to the state from the implementation of the program; and (B) prevent fraud in financial transactions under the program, including by adopting measures to permit anonymous fraud reporting by telephone hotline or online communication. Sec. 29.371. GIFTS, GRANTS, AND DONATIONS. The comptroller may solicit and accept gifts, grants, and donations from any public or private source for any expenses related to the administration of the program, including the initial implementation of the program. Sec. 29.372. DYSLEXIA ALLOTMENT SET-ASIDE. (a) Each year, for each child participating in the program, the agency shall set aside a percentage of the state average maintenance and operations expenditures per student for the preceding state fiscal year in an amount equal to: (1) for the first year the child participates in the program, five percent; and (2) in each subsequent year the child participates in the program, 10 percent. (b) The amounts set aside under Subsection (a) may be used only for purposes of funding the special allotment for students with dyslexia or a related disorder under Section 42.1561. SECTION 8. Sections 29.918(a) and (b), Education Code, are amended to read as follows: (a) Notwithstanding Section [39.234 or] 42.152, a school district or open-enrollment charter school with a high dropout rate, as determined by the commissioner, must submit a plan to the commissioner describing the manner in which the district or charter school intends to use the compensatory education allotment under Section 42.152 [and the high school allotment under Section 42.160] for developing and implementing research-based strategies for dropout prevention. The district or charter school shall submit the plan not later than December 1 of each school year preceding the school year in which the district or charter school will receive the compensatory education allotment [or high school allotment] to which the plan applies. (b) A school district or open-enrollment charter school to which this section applies may not spend or obligate more than 25 percent of the district's or charter school's compensatory education allotment [or high school allotment] unless the commissioner approves the plan submitted under Subsection (a). The commissioner shall complete an initial review of the district's or charter school's plan not later than March 1 of the school year preceding the school year in which the district or charter school will receive the compensatory education allotment [or high school allotment] to which the plan applies. SECTION 9. Subchapter C, Chapter 30, Education Code, is amended by adding Section 30.0561 to read as follows: Sec. 30.0561. TRANSPORTATION ALLOTMENT. The Texas School for the Deaf is entitled to a transportation allotment paid from the foundation school fund. The commissioner shall determine the appropriate allotment. SECTION 10. Section 30.087(c), Education Code, is amended to read as follows: (c) A school district may receive an allotment paid from the foundation school fund for transportation of students participating in a regional day school program, as determined by the commissioner [in the same manner as an allotment for the transportation of other special education students]. SECTION 11. Section 34.002(c), Education Code, is amended to read as follows: (c) The commissioner shall reduce the basic allotment provided under Section 42.101 for each student in average daily attendance by $125 for a [A] school district that fails or refuses to meet the safety standards for school buses established under this section [is ineligible to share in the transportation allotment under Section 42.155] until the first anniversary of the date the district begins complying with the safety standards. SECTION 12. Section 34.007, Education Code, is amended by adding Subsection (c) to read as follows: (c) A county transportation system is not entitled to receive funding for transportation costs directly from the state. Funding for a county transportation system is provided by each school district participating in the county transportation system in accordance with the terms of the interlocal contract under Chapter 791, Government Code, under which the county provides transportation services for the participating districts. SECTION 13. Section 39.0233(a), Education Code, is amended to read as follows: (a) The agency, in coordination with the Texas Higher Education Coordinating Board, shall adopt a series of questions to be included in an end-of-course assessment instrument administered under Section 39.023(c) to be used for purposes of Section 51.3062. The questions adopted under this subsection must be developed in a manner consistent with any college readiness standards adopted under Section [Sections 39.233 and] 51.3062. SECTION 14. Section 41.099(a), Education Code, is amended to read as follows: (a) Sections [41.002(e),] 41.094, 41.097, and 41.098 apply only to a district that: (1) executes an agreement to purchase all attendance credits necessary to reduce the district's wealth per student to the equalized wealth level; (2) executes an agreement to purchase attendance credits and an agreement under Subchapter E to contract for the education of nonresident students who transfer to and are educated in the district but who are not charged tuition; or (3) executes an agreement under Subchapter E to contract for the education of nonresident students: (A) to an extent that does not provide more than 10 percent of the reduction in wealth per student required for the district to achieve a wealth per student that is equal to or less than the equalized wealth level; and (B) under which all revenue paid by the district to other districts, in excess of the reduction in state aid that results from counting the weighted average daily attendance of the students served in the contracting district, is required to be used for funding a consortium of at least three districts in a county with a population of less than 40,000 that is formed to support a technology initiative. SECTION 15. Section 41.257, Education Code, is amended to read as follows: Sec. 41.257. APPLICATION OF SMALL AND SPARSE ADJUSTMENTS [AND TRANSPORTATION ALLOTMENT]. The budget of the consolidated district must apply the benefit of the adjustment or allotment to the schools of the consolidating district to which Section 42.103 or[,] 42.105[, or 42.155] would have applied in the event that the consolidated district still qualifies as a small or sparse district. SECTION 16. Section 42.006(a-1), Education Code, is amended to read as follows: (a-1) The commissioner by rule shall require each school district and open-enrollment charter school to report through the Public Education Information Management System information regarding the number of students enrolled in the district or school who are identified as having dyslexia or related disorders. The agency shall maintain the information provided in accordance with this subsection. SECTION 17. Section 42.101(a), Education Code, is amended to read as follows: (a) For each student in average daily attendance, not including the time students spend each day in special education programs in an instructional arrangement other than mainstream settings, [or] career and technology education programs, or technology applications courses approved for high school credit, for which an additional allotment is made under Subchapter C, a district is entitled to an allotment equal to the lesser of $5,140 [$4,765] or the amount that results from the following formula: A = $5,140 [$4,765] X (DCR/MCR) where: "A" is the allotment to which a district is entitled; "DCR" is the district's compressed tax rate, which is the product of the state compression percentage, as determined under Section 42.2516, multiplied by the maintenance and operations tax rate adopted by the district for the 2005 tax year; and "MCR" is the state maximum compressed tax rate, which is the product of the state compression percentage, as determined under Section 42.2516, multiplied by $1.50. SECTION 18. Section 42.102, Education Code, is amended by adding Subsection (c) to read as follows: (c) Based on a statistical analysis conducted by the Legislative Budget Board to determine for each school district the current geographic variation in known resource costs and costs of education due to factors beyond the control of the district, the commissioner shall update the cost of education index used for purposes of this section during the 2016-2017 school year. The commissioner periodically may request more current statistical analysis from the Legislative Budget Board and further update as needed the cost of education index. SECTION 19. Effective September 1, 2023, Sections 42.103(b) and (d), Education Code, are amended to read as follows: (b) The basic allotment of a school district that [contains at least 300 square miles and] has not more than 1,600 students in average daily attendance is adjusted by applying the formula: AA = (1 + ((1,600 - ADA) X .0004)) X ABA (d) The basic allotment of a school district that offers a kindergarten through grade 12 program and has less than 5,000 students in average daily attendance is adjusted by applying the formula, of the following formulas, that results in the greatest adjusted allotment: (1) the formula in Subsection (b), if [or (c) for which] the district is eligible for that formula; or (2) AA = (1 + ((5,000 - ADA) X .000025)) X ABA. SECTION 20. Effective September 1, 2018, Section 42.103(c), Education Code, is amended to read as follows: (c) The basic allotment of a school district that contains less than 300 square miles and has not more than 1,600 students in average daily attendance is adjusted by applying the following formulas [formula]: (1) for the fiscal year beginning September 1, 2018: AA = (1 + ((1,600 - ADA) X .000275 [.00025])) X ABA ; (2) for the fiscal year beginning September 1, 2019: AA = (1 + ((1,600 - ADA) X .00030)) X ABA ; (3) for the fiscal year beginning September 1, 2020: AA = (1 + ((1,600 - ADA) X .000325)) X ABA ; (4) for the fiscal year beginning September 1, 2021: AA = (1 + ((1,600 - ADA) X .00035)) X ABA ; and (5) for the fiscal year beginning September 1, 2022: AA = (1 + ((1,600 - ADA) X .000375)) X ABA SECTION 21. Subchapter B, Chapter 42, Education Code, is amended by adding Section 42.1041 to read as follows: Sec. 42.1041. INELIGIBILITY FOR SMALL OR MID-SIZED DISTRICT ADJUSTMENT OR SPARSITY ADJUSTMENT. (a) This section applies only to a school district that: (1) borders the Red River; and (2) has a student enrollment of less than 90, with more than 50 percent of the enrollment consisting of students who have transferred from another school district. (b) Notwithstanding Section 42.103, 42.104, or 42.105, a school district to which this section applies is ineligible for an adjustment under Section 42.103 or 42.105 for any school year during which the district: (1) issues bonds for the construction of a new instructional facility on property more than five miles from a property that before the issuance of the bonds was owned by the district and was the location of an instructional facility for the previous five years; or (2) makes payments on bonds described by Subdivision (1). SECTION 22. Subchapter B, Chapter 42, Education Code, is amended by adding Section 42.107 to read as follows: Sec. 42.107. SPECIAL-PURPOSE SCHOOL DISTRICTS OPERATED BY GENERAL ACADEMIC TEACHING INSTITUTIONS. (a) In each fiscal year of the biennium, the commissioner shall allocate funding from the foundation school program to each special-purpose school district established under Section 11.351 that is operated by a general academic teaching institution as defined by Section 61.003, in an amount equivalent to the basic allotment in Section 42.101(a) multiplied by the number of full-time equivalent students who are enrolled in the school district and who reside in this state. (b) In allocating funding to special-purpose school districts under this section, the commissioner shall use a payment schedule consistent with the payment schedule adopted for open-enrollment charter schools. (c) A special-purpose school district that receives state funding for a resident student under this section may not charge tuition or fees to that student for the academic term for which state funding is received, other than fees permitted under Section 11.158. (d) A special-purpose school district may elect not to receive state funding under this section. SECTION 23. Section 42.151(h), Education Code, is amended to read as follows: (h) Funds allocated under this section, other than an indirect cost allotment established under State Board of Education rule or amounts made available for the transportation of special education students, must be used in the special education program under Subchapter A, Chapter 29. SECTION 24. Section 42.153(a), Education Code, is amended to read as follows: (a) For each student in average daily attendance in a bilingual education or special language program under Subchapter B, Chapter 29, a district is entitled to an annual allotment equal to the adjusted basic allotment multiplied by 0.11 [0.1]. SECTION 25. The heading to Section 42.154, Education Code, is amended to read as follows: Sec. 42.154. CAREER AND TECHNOLOGY EDUCATION AND TECHNOLOGY APPLICATIONS ALLOTMENT. SECTION 26. Sections 42.154(a), (b), (c), and (e), Education Code, are amended to read as follows: (a) For each full-time equivalent student in average daily attendance in an approved career and technology education program in grades eight [nine] through 12, in a technology applications course approved for high school credit, or in career and technology education programs for students with disabilities in grades seven through 12, a district is entitled to: (1) an annual allotment equal to the adjusted basic allotment multiplied by a weight of 1.35; and (2) $50, if the student is enrolled in: (A) two or more advanced career and technology education classes for a total of three or more credits; or (B) an advanced course as part of a tech-prep program under Subchapter T, Chapter 61. (b) In this section, "full-time equivalent student" means 30 hours of contact a week between a student and career and technology education program or technology applications personnel. (c) Funds allocated under this section, other than an indirect cost allotment established under State Board of Education rule or amounts made available for the transportation of career and technology education students, must be used in providing career and technology education programs in grades eight [nine] through 12, technology applications courses approved for high school credit, or career and technology education programs for students with disabilities in grades seven through 12 under Sections 29.182, 29.183, and 29.184. (e) Out of the total statewide allotment [for career and technology education] under this section, the commissioner shall set aside an amount specified in the General Appropriations Act, which may not exceed an amount equal to one percent of the total amount appropriated, to support regional career and technology education planning. After deducting the amount set aside under this subsection from the total amount appropriated for career and technology education and technology applications under this section, the commissioner shall reduce each district's tier one allotments in the same manner described for a reduction in allotments under Section 42.253. SECTION 27. Section 42.1541(a), Education Code, is amended to read as follows: (a) For the 2017-2018 and subsequent school years, the [The] State Board of Education shall by rule revise [increase] the indirect cost allotments established under Sections 42.151(h), 42.152(c), 42.153(b), and 42.154(c) [42.154(a-1) and (c)] and in effect for the 2016-2017 [2010-2011] school year to reflect any increase in the percentage of total maintenance and operations funding represented by the basic allotment [in proportion to the average percentage reduction in total state and local maintenance and operations revenue provided under this chapter for the 2011-2012 school year] as a result of [S.B. Nos. 1 and 2,] Acts of the 85th [82nd] Legislature, Regular [1st Called] Session, 2017 [2011]. SECTION 28. Subchapter C, Chapter 42, Education Code, is amended by adding Section 42.1561 to read as follows: Sec. 42.1561. ALLOTMENT FOR STUDENT WITH DYSLEXIA OR RELATED DISORDER. (a) Subject to Subsection (b), for each student that a school district serves who has been identified as having dyslexia or a related disorder, the district is entitled to an annual allotment equal to the district's adjusted basic allotment as determined under Section 42.102 or Section 42.103, as applicable, multiplied by 0.1 for each school year or a greater amount provided by appropriation. (b) A school district is entitled to the allotment under Subsection (a) only for a student who: (1) is receiving instruction that: (A) meets applicable dyslexia program criteria established by the agency; and (B) is provided by a person with specific training in providing that instruction; or (2) has received the instruction described by Subdivision (1) and is permitted, on the basis of having dyslexia or a related disorder, to use modifications in the classroom and accommodations in the administration of assessment instruments under Section 39.023. (c) Funds allotted under this section must be used in providing services to students with dyslexia or related disorders. (d) A school district may receive funding for a student under this section and Section 42.151 if the student satisfies the requirements of both sections. (e) Not more than five percent of a district's students in average daily attendance are eligible for funding under this section. SECTION 29. Sections 42.158(b), (d-1), and (g), Education Code, are amended to read as follows: (b) For the first school year in which students attend a new instructional facility, a school district is entitled to an allotment of $1,000 [$250] for each student in average daily attendance at the facility. For the second school year in which students attend that instructional facility, a school district is entitled to an allotment of $1,000 [$250] for each additional student in average daily attendance at the facility. (d-1) In addition to the appropriation amount described by Subsection (d), the amount of $1 million may be appropriated each school year to supplement the allotment to which a school district is entitled under this section that may be provided using the appropriation amount described by Subsection (d). The commissioner shall first apply the funds appropriated under this subsection to prevent any reduction under Subsection (d) in the allotment for attendance at an eligible high school instructional facility, subject to the maximum amount of $1,000 [$250] for each student in average daily attendance. Any funds remaining after preventing all reductions in amounts due for high school instructional facilities may be applied proportionally to all other eligible instructional facilities, subject to the maximum amount of $1,000 [$250] for each student in average daily attendance. (g) In this section: (1) "Instructional[, "instructional] facility" has the meaning assigned by Section 46.001. (2) "New instructional facility" includes: (A) a newly constructed instructional facility; (B) a repurposed instructional facility; and (C) a leased facility operating for the first time as an instructional facility with a minimum lease term of not less than 10 years. SECTION 30. Section 42.2518(a), Education Code, as effective September 1, 2017, is amended to read as follows: (a) Beginning with the 2017-2018 school year, a school district is entitled to additional state aid to the extent that state and local revenue under this chapter and Chapter 41 is less than the state and local revenue that would have been available to the district under Chapter 41 and this chapter as those chapters existed on September 1, 2015, excluding any state aid or adjustment in wealth per student that would have been provided under former Section 41.002(e)-(g), 42.155, 42.160, 42.2513, or 42.2516, if the increase in the residence homestead exemption under Section 1-b(c), Article VIII, Texas Constitution, and the additional limitation on tax increases under Section 1-b(d) of that article as proposed by S.J.R. 1, 84th Legislature, Regular Session, 2015, had not occurred. SECTION 31. Section 42.253, Education Code, is amended by adding Subsection (b-1) to read as follows: (b-1) Notwithstanding Subsection (b), the commissioner shall adjust enrollment estimates and entitlement for each school district for each school year based on information provided by the comptroller under Section 29.367. This subsection expires September 1, 2021. SECTION 32. Subchapter E, Chapter 42, Education Code, is amended by adding Section 42.2541 to read as follows: Sec. 42.2541. ESTIMATED PROJECTIONS. (a) In this section, "equivalent equalized wealth level" means an equalized wealth level for a state fiscal biennium that results in approximately the same number of school districts that are required to take action under Chapter 41 to reduce wealth as the number of school districts that were required to take that action during the preceding state fiscal biennium. (b) Not later than November 1 of each even-numbered year, the agency shall: (1) submit to the legislature a projection for an equivalent equalized wealth level for the following biennium based on the agency's estimate of: (A) student enrollment under Section 42.254(a)(1); (B) the comptroller's estimate of any increase in total taxable value of all property in the state under Section 42.254(a)(2); (C) the number of school districts offering a local optional residence homestead exemption under Section 11.13(n), Tax Code; (D) the number of school districts adopting a tax rate below the maximum tier one tax rate determined under Section 42.252; (E) the projected amount of maintenance and operations tax revenue per student in weighted average daily attendance of the Austin Independent School District; and (F) the number of school districts adopting a maintenance and operations tax rate of $1.17; and (2) provide projections for the equalized funding elements under Section 42.007 for the following biennium as necessary to achieve the equivalent equalized wealth level projected under Subdivision (1). SECTION 33. Section 42.302(a), Education Code, is amended to read as follows: (a) Each school district is guaranteed a specified amount per weighted student in state and local funds for each cent of tax effort over that required for the district's local fund assignment up to the maximum level specified in this subchapter. The amount of state support, subject only to the maximum amount under Section 42.303, is determined by the formula: GYA = (GL X WADA X DTR X 100) - LR where: "GYA" is the guaranteed yield amount of state funds to be allocated to the district; "GL" is the dollar amount guaranteed level of state and local funds per weighted student per cent of tax effort, which is an amount described by Subsection (a-1) or a greater amount for any year provided by appropriation; "WADA" is the number of students in weighted average daily attendance, which is calculated by dividing the sum of the school district's allotments under Subchapters B and C, less any allotment [to the district for transportation, any allotment] under Section 42.158 [or 42.160,] and 50 percent of the adjustment under Section 42.102, by the basic allotment for the applicable year; "DTR" is the district enrichment tax rate of the school district, which is determined by subtracting the amounts specified by Subsection (b) from the total amount of maintenance and operations taxes collected by the school district for the applicable school year and dividing the difference by the quotient of the district's taxable value of property as determined under Subchapter M, Chapter 403, Government Code, or, if applicable, under Section 42.2521, divided by 100; and "LR" is the local revenue, which is determined by multiplying "DTR" by the quotient of the district's taxable value of property as determined under Subchapter M, Chapter 403, Government Code, or, if applicable, under Section 42.2521, divided by 100. SECTION 34. Chapter 42, Education Code, is amended by adding Subchapter H to read as follows: SUBCHAPTER H. FINANCIAL HARDSHIP TRANSITION PROGRAM Sec. 42.451. FINANCIAL HARDSHIP GRANTS. (a) From amounts appropriated for this subchapter, the commissioner may administer a grant program that provides grants to school districts to defray financial hardships resulting from changes made to Chapter 41 and this chapter that apply after the 2016-2017 school year. (b) The commissioner shall award grants under this subchapter to districts as provided by Section 42.452. (c) Except as provided by Subsection (d), funding provided to a district under this subchapter is in addition to all other funding provided under Chapter 41 and this chapter. (d) A district is not eligible for funding under this subchapter for a school year if the district receives for that school year an adjustment of the district's taxable value of property under Section 42.2521. A district may decline an adjustment under Section 42.2521 to maintain eligibility for funding under this subchapter. (e) The commissioner may obtain additional information as needed from a district or other state or local agency to make determinations in awarding grants under this subchapter. Sec. 42.452. AWARD OF GRANTS; AMOUNT. (a) The commissioner shall award grants to school districts based on the following formula: HG = (PL-CL) X (TR) X (TAHG/TEHG) where: "HG" is the amount of a district's hardship grant; "PL" is the amount of funding under previous law to which a district would be entitled under Chapter 41 and this chapter as those chapters existed on January 1, 2017, determined using current school year data for the district; "CL" is the amount of current law funding under Chapter 41 and this chapter to which a district is entitled; "TR" is a district's maintenance and operations tax rate, as specified by the comptroller's most recent certified report; "TAHG" is the total funding available for grants under Section 42.456 for a school year; and "TEHG" is the sum of the combined amounts for all districts calculated by applying the formula (PL-CL) X (TR) for each district. (b) A school district's hardship grant awarded under this subchapter for a school year may not exceed the lesser of: (1) the amount equal to 10 percent of the total amount of funds available for grants under this subchapter for that school year; or (2) the amount by which "PL" exceeds "CL" for that district for that school year. (c) For purposes of calculating the formula under Subsection (a), the commissioner shall: (1) if the value of (PL-CL) for a school district results in a negative number, use zero for the value of (PL-CL); (2) if a school district's maintenance and operations tax rate ("TR") is greater than $1, use $1 for the value of "TR"; (3) use a maintenance and operations tax rate ("TR") of $1 for each open-enrollment charter school, each special-purpose school district established under Subchapter H, Chapter 11, and the South Texas Independent School District; and (4) if (TAHG/TEHG) equals a value greater than one, use a value of one for (TAHG/TEHG). (d) If funds remain available under this subchapter for a school year after determining initial grant amounts under Subsection (a), as adjusted to reflect the limits imposed by Subsection (b), the commissioner shall reapply the formula as necessary to award all available funds. Sec. 42.453. ELIGIBILITY OF OPEN-ENROLLMENT CHARTER SCHOOL. An open-enrollment charter school is eligible for a grant under this subchapter in the same manner as a school district. Sec. 42.454. REGIONAL EDUCATION SERVICE CENTERS AND COUNTY DEPARTMENTS OF EDUCATION NOT ELIGIBLE. A regional education service center or a county department of education is not eligible for a grant under this subchapter. Sec. 42.455. CERTAIN SCHOOL DISTRICTS NOT ELIGIBLE. A school district is not eligible for a grant under this subchapter if for the 2015-2016 school year the district's expenditures per student in average daily attendance, excluding bond debt service payments, capital outlays, and facilities acquisition and construction costs, exceeded an amount that is equal to 110 percent of the state average amount for that school year of expenditures per student in average daily attendance, excluding bond debt service payments, capital outlays, and facilities acquisition and construction costs, as those amounts are determined by the commissioner. Sec. 42.456. FUNDING LIMIT. The amount of grants awarded by the commissioner under this subchapter may not exceed $125 million for the 2017-2018 school year or $34 million for the 2018-2019 school year. Sec. 42.457. NO ADJUSTMENT BASED ON REVISED DATA. The commissioner may not adjust the amount of a school district's grant under this subchapter based on revisions to the district's data received after a grant has been awarded. Sec. 42.458. RULES. The commissioner may adopt rules as necessary to administer this subchapter. Sec. 42.459. DETERMINATION FINAL. A determination by the commissioner under this subchapter is final and may not be appealed. Sec. 42.460. EXPIRATION. This subchapter expires September 1, 2019. SECTION 35. Section 411.0901, Government Code, is amended by adding Subsection (a-1) to read as follows: (a-1) The Texas Education Agency is entitled to obtain criminal history record information maintained by the department about a person who is a private tutor or an employee of a teaching service who intends to provide educational services to a child participating in the program established under Subchapter J, Chapter 29, Education Code, and is seeking approval to receive funds distributed under that program. SECTION 36. (a) Effective September 1, 2017, the following provisions of the Education Code are repealed: (1) Section 29.097(g); (2) Section 29.098(e); (3) Section 39.233; (4) Section 39.234; (5) Sections 41.002(e), (f), and (g); (6) Section 42.1541(c); (7) Section 42.155; (8) Section 42.160; (9) Section 42.2513; and (10) Section 42.2517. (b) Effective September 1, 2023, Section 42.103(c), Education Code, is repealed. SECTION 37. (a) The constitutionality and other validity under the state or federal constitution of all or any part of Subchapter J, Chapter 29, Education Code, as added by this Act, may be determined in an action for declaratory judgment in a district court in Travis County under Chapter 37, Civil Practice and Remedies Code, except that this section does not authorize an award of attorney's fees against this state and Section 37.009, Civil Practice and Remedies Code, does not apply to an action filed under this section. (b) An appeal of a declaratory judgment or order, however characterized, of a district court, including an appeal of the judgment of an appellate court, holding or otherwise determining that all or any part of Subchapter J, Chapter 29, Education Code, as added by this Act, is constitutional or unconstitutional, or otherwise valid or invalid, under the state or federal constitution is an accelerated appeal. (c) If the judgment or order is interlocutory, an interlocutory appeal may be taken from the judgment or order and is an accelerated appeal. (d) A district court in Travis County may grant or deny a temporary or otherwise interlocutory injunction or a permanent injunction on the grounds of the constitutionality or unconstitutionality, or other validity or invalidity, under the state or federal constitution of all or any part of Subchapter J, Chapter 29, Education Code, as added by this Act. (e) There is a direct appeal to the Texas Supreme Court from an order, however characterized, of a trial court granting or denying a temporary or otherwise interlocutory injunction or a permanent injunction on the grounds of the constitutionality or unconstitutionality, or other validity or invalidity, under the state or federal constitution of all or any part of Subchapter J, Chapter 29, Education Code, as added by this Act. (f) The direct appeal is an accelerated appeal. (g) This section exercises the authority granted by Section 3-b, Article V, Texas Constitution. (h) The filing of a direct appeal under this section will automatically stay any temporary or otherwise interlocutory injunction or permanent injunction granted in accordance with this section pending final determination by the Texas Supreme Court, unless the supreme court makes specific findings that the applicant seeking such injunctive relief has pleaded and proved that: (1) the applicant has a probable right to the relief it seeks on final hearing; and (2) the applicant will suffer a probable injury that is imminent and irreparable, and that the applicant has no other adequate legal remedy. (i) An appeal under this section, including an interlocutory, accelerated, or direct appeal, is governed, as applicable, by the Texas Rules of Appellate Procedure, including Rules 25.1(d)(6), 26.1(b), 28.1, 28.3, 32.1(g), 37.3(a)(1), 38.6(a) and (b), 40.1(b), and 49.4. SECTION 38. A school district that is entitled under Section 42.158, Education Code, to receive funding in the 2017-2018 school year for the second year of student attendance at a new instructional facility is entitled for that year to the amount provided for the second year of student attendance as a result of the changes in law made by this Act. SECTION 39. Not later than March 1, 2019, the Texas Education Agency shall conduct a review of technology applications and career and technology courses for grades 9 through 12 and provide recommendations to the State Board of Education for eliminating duplicative courses while ensuring certifications are aligned with the rigor of each individual course. SECTION 40. Subchapter J, Chapter 29, and Section 42.253(b-1), Education Code, as added by this Act, and Section 411.0901(a-1), Government Code, as added by this Act, apply beginning with the 2018-2019 school year. SECTION 41. The commissioner of education is required to implement this Act only if the legislature appropriates money specifically for that purpose. If the legislature does not appropriate money specifically for that purpose, the commissioner of education may, but is not required to, implement this Act using other appropriations available for the purpose. SECTION 42. Except as otherwise provided by this Act, this Act takes effect September 1, 2017. * * * * *