CHAPTER 42. FOUNDATION SCHOOL PROGRAM

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EDUCATION CODE

TITLE 2. PUBLIC EDUCATION

SUBTITLE I. SCHOOL FINANCE AND FISCAL MANAGEMENT

CHAPTER 42. FOUNDATION SCHOOL PROGRAM

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 42.001. STATE POLICY. (a) It is the policy of this state

that the provision of public education is a state responsibility

and that a thorough and efficient system be provided and

substantially financed through state revenue sources so that each

student enrolled in the public school system shall have access to

programs and services that are appropriate to the student's

educational needs and that are substantially equal to those

available to any similar student, notwithstanding varying local

economic factors.

(b) The public school finance system of this state shall adhere

to a standard of neutrality that provides for substantially equal

access to similar revenue per student at similar tax effort,

considering all state and local tax revenues of districts after

acknowledging all legitimate student and district cost

differences.

Added by Acts 1995, 74th Leg., ch. 260, Sec. 1, eff. May 30,

1995.

Sec. 42.002. PURPOSES OF FOUNDATION SCHOOL PROGRAM. (a) The

purposes of the Foundation School Program set forth in this

chapter are to guarantee that each school district in the state

has:

(1) adequate resources to provide each eligible student a basic

instructional program and facilities suitable to the student's

educational needs; and

(2) access to a substantially equalized program of financing in

excess of basic costs for certain services, as provided by this

chapter.

(b) The Foundation School Program consists of:

(1) two tiers that in combination provide for:

(A) sufficient financing for all school districts to provide a

basic program of education that is rated acceptable or higher

under Section 39.054 and meets other applicable legal standards;

and

(B) substantially equal access to funds to provide an enriched

program; and

(2) a facilities component as provided by Chapter 46.

Added by Acts 1995, 74th Leg., ch. 260, Sec. 1, eff. May 30,

1995. Amended by Acts 1999, 76th Leg., ch. 396, Sec. 1.09, eff.

Sept. 1, 1999.

Amended by:

Acts 2009, 81st Leg., R.S., Ch.

895, Sec. 60, eff. June 19, 2009.

Sec. 42.003. STUDENT ELIGIBILITY. (a) A student is entitled to

the benefits of the Foundation School Program if, on September 1

of the school year, the student is 5 years of age or older and

under 21 years of age and has not graduated from high school, or

is at least 21 years of age and under 26 years of age and has

been admitted by a school district to complete the requirements

for a high school diploma.

(b) A student to whom Subsection (a) does not apply is entitled

to the benefits of the Foundation School Program if the student

is enrolled in a prekindergarten class under Section 29.153.

at least six years of age at the beginning of the school year of

the district or has been enrolled in the first grade or has

completed kindergarten in the public schools in another state

before transferring to a public school in this state.

(d) Notwithstanding Subsection (a), a student younger than five

years of age is entitled to the benefits of the Foundation School

Program if:

(1) the student performs satisfactorily on the assessment

instrument administered under Section 39.023(a) to students in

the third grade; and

(2) the district has adopted a policy for admitting students

younger than five years of age.

Added by Acts 1995, 74th Leg., ch. 260, Sec. 1, eff. May 30,

1995.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

850, Sec. 5, eff. June 15, 2007.

Sec. 42.004. ADMINISTRATION OF THE PROGRAM. The commissioner,

in accordance with the rules of the State Board of Education,

shall take such action and require such reports consistent with

this chapter as may be necessary to implement and administer the

Foundation School Program.

Added by Acts 1995, 74th Leg., ch. 260, Sec. 1, eff. May 30,

1995.

Sec. 42.005. AVERAGE DAILY ATTENDANCE. (a) In this chapter,

average daily attendance is:

(1) the quotient of the sum of attendance for each day of the

minimum number of days of instruction as described under Section

25.081(a) divided by the minimum number of days of instruction;

(2) for a district that operates under a flexible year program

under Section 29.0821, the quotient of the sum of attendance for

each actual day of instruction as permitted by Section

29.0821(b)(1) divided by the number of actual days of instruction

as permitted by Section 29.0821(b)(1); or

(3) for a district that operates under a flexible school day

program under Section 29.0822, the average daily attendance as

calculated by the commissioner in accordance with Section

29.0822(d).

(a-1) Expired.

(b) A school district that experiences a decline of two percent

or more in average daily attendance shall be funded on the basis

of:

(1) the actual average daily attendance of the preceding school

year, if the decline is the result of the closing or reduction in

personnel of a military base; or

(2) subject to Subsection (e), an average daily attendance not

to exceed 98 percent of the actual average daily attendance of

the preceding school year, if the decline is not the result of

the closing or reduction in personnel of a military base.

of a school district that has a significant percentage of

students who are migratory children as defined by 20 U.S.C.

Section 6399.

(d) The commissioner may adjust the average daily attendance of

a school district in which a disaster, flood, extreme weather

condition, fuel curtailment, or other calamity has a significant

effect on the district's attendance.

(e) For each school year, the commissioner shall adjust the

average daily attendance of school districts that are entitled to

funding on the basis of an adjusted average daily attendance

under Subsection (b)(2) so that:

(1) all districts are funded on the basis of the same percentage

of the preceding year's actual average daily attendance; and

(2) the total cost to the state does not exceed the amount

specifically appropriated for that year for purposes of

Subsection (b)(2).

(f) An open-enrollment charter school is not entitled to funding

based on an adjustment under Subsection (b)(2).

Text of subsection as amended by Acts 2009, 81st Leg., R.S., Ch.

1328, Sec. 47

Text of subsection effective until September 01, 2011

(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.

Text of subsection as amended by Acts 2009, 81st Leg., R.S., Ch.

1328, Sec. 48

Text of subsection effective on September 01, 2011

(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.

Added by Acts 1995, 74th Leg., ch. 260, Sec. 1, eff. May 30,

1995. Amended by Acts 1997, 75th Leg., ch. 1071, Sec. 12, eff.

Sept. 1, 1997; Acts 2001, 77th Leg., ch. 924, Sec. 1, eff. Sept.

1, 2001; Acts 2001, 77th Leg., ch. 1156, Sec. 3, eff. Sept. 1,

2001; Acts 2003, 78th Leg., ch. 220, Sec. 2, eff. Sept. 1, 2003;

Acts 2003, 78th Leg., ch. 824, Sec. 3, eff. June 20, 2003.

Amended by:

Acts 2005, 79th Leg., Ch.

1339, Sec. 4, eff. June 18, 2005.

Acts 2006, 79th Leg., 3rd C.S., Ch.

5, Sec. 5.07, eff. May 31, 2006.

Acts 2009, 81st Leg., R.S., Ch.

1328, Sec. 47, eff. September 1, 2009.

Acts 2009, 81st Leg., R.S., Ch.

1328, Sec. 48, eff. September 1, 2011.

Sec. 42.0051. AVERAGE DAILY ATTENDANCE FOR DISTRICTS IN DISASTER

AREA. (a) From funds specifically appropriated for the purpose

or other funds available to the commissioner for that purpose,

the commissioner shall adjust the average daily attendance of a

school district all or part of which is located in an area

declared a disaster area by the governor under Chapter 418,

Government Code, if the district experiences a decline in average

daily attendance that is reasonably attributable to the impact of

the disaster.

(b) The adjustment must be sufficient to ensure that the

district receives funding comparable to the funding that the

district would have received if the decline in average daily

attendance reasonably attributable to the impact of the disaster

had not occurred.

section for the two-year period following the date of the

governor's initial proclamation or executive order declaring the

state of disaster.

(d) Section 42.005(b)(2) does not apply to a district that

receives an adjustment under this section.

(e) A district that receives an adjustment under this section

may not receive any additional adjustment under Section 42.005(d)

for the decline in average daily attendance on which the

adjustment under this section is based.

(f) For purposes of this title, a district's adjusted average

daily attendance under this section is considered to be the

district's average daily attendance as determined under Section

42.005.

Added by Acts 2009, 81st Leg., R.S., Ch.

1006, Sec. 4, eff. June 19, 2009.

Sec. 42.006. PUBLIC EDUCATION INFORMATION MANAGEMENT SYSTEM

(PEIMS). (a) Each school district shall participate in the

Public Education Information Management System (PEIMS) and shall

provide through that system information required for the

administration of this chapter and of other appropriate

provisions of this code.

(b) Each school district shall use a uniform accounting system

adopted by the commissioner for the data required to be reported

for the Public Education Information Management System.

Information Management System and shall repeal or amend rules

that require school districts to provide information through the

Public Education Information Management System that is not

necessary. In reviewing and revising the Public Education

Information Management System, the commissioner shall develop

rules to ensure that the system:

(1) provides useful, accurate, and timely information on student

demographics and academic performance, personnel, and school

district finances;

(2) contains only the data necessary for the legislature and the

agency to perform their legally authorized functions in

overseeing the public education system; and

(3) does not contain any information related to instructional

methods, except as provided by Section 29.066 or required by

federal law.

(d) The commissioner's rules must ensure that the Public

Education Information Management System links student performance

data to other related information for purposes of efficient and

effective allocation of scarce school resources, to the extent

practicable using existing agency resources and appropriations.

Added by Acts 1995, 74th Leg., ch. 260, Sec. 1, eff. May 30,

1995. Amended by Acts 2003, 78th Leg., ch. 903, Sec. 2, eff.

Sept. 1, 2003.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

1340, Sec. 7, eff. June 15, 2007.

Sec. 42.007. EQUALIZED FUNDING ELEMENTS. (a) The Legislative

Budget Board shall adopt rules, subject to appropriate notice and

opportunity for public comment, for the calculation for each year

of a biennium of the qualified funding elements, in accordance

with Subsection (c), necessary to achieve the state policy under

Section 42.001.

(b) Before each regular session of the legislature, the board

shall, as determined by the board, report the equalized funding

elements to the commissioner and the legislature.

(1) a basic allotment for the purposes of Section 42.101 that,

when combined with the guaranteed yield component provided by

Subchapter F, represents the cost per student of a regular

education program that meets all mandates of law and regulation;

(2) adjustments designed to reflect the variation in known

resource costs and costs of education beyond the control of

school districts;

(3) appropriate program cost differentials and other funding

elements for the programs authorized under Subchapter C, with the

program funding level expressed as dollar amounts and as weights

applied to the adjusted basic allotment for the appropriate year;

(4) the maximum guaranteed level of qualified state and local

funds per student for the purposes of Subchapter F;

(5) the enrichment and facilities tax rate under Subchapter F;

(6) the computation of students in weighted average daily

attendance under Section 42.302; and

(7) the amount to be appropriated for the school facilities

assistance program under Chapter 46.

(d) Repealed by Acts 2005, 79th Leg., Ch. 741, Sec. 10(b), eff.

June 17, 2005.

Added by Acts 1995, 74th Leg., ch. 260, Sec. 1, eff. May 30,

1995. Amended by Acts 1997, 75th Leg., ch. 1071, Sec. 13, eff.

Sept. 1, 1997; Acts 1999, 76th Leg., ch. 396, Sec. 1.10, eff.

Sept. 1, 1999.

Amended by:

Acts 2005, 79th Leg., Ch.

741, Sec. 2, eff. June 17, 2005.

Acts 2005, 79th Leg., Ch.

741, Sec. 10(b), eff. June 17, 2005.

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.

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.

Added by Acts 2009, 81st Leg., R.S., Ch.

1328, Sec. 49, eff. September 1, 2009.

SUBCHAPTER B. BASIC ENTITLEMENT

For expiration of Subsections (a-1) and (a-2), see Subsection

(a-2).

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 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.

(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.

Added by Acts 1995, 74th Leg., ch. 260, Sec. 1, eff. May 30,

1995. Amended by Acts 1997, 75th Leg., ch. 1071, Sec. 14, eff.

Sept. 1, 1997; Acts 1999, 76th Leg., ch. 396, Sec. 1.11, eff.

Sept. 1, 1999.

Amended by:

Acts 2006, 79th Leg., 3rd C.S., Ch.

5, Sec. 1.03, eff. May 31, 2006.

Acts 2009, 81st Leg., R.S., Ch.

1328, Sec. 50, eff. September 1, 2009.

Sec. 42.102. COST OF EDUCATION ADJUSTMENT. (a) The basic

allotment for each district is adjusted to reflect the geographic

variation in known resource costs and costs of education due to

factors beyond the control of the school district.

(b) The cost of education adjustment is the cost of education

index adjustment adopted by the foundation school fund budget

committee and contained in Chapter 203, Title 19, Texas

Administrative Code, as that chapter existed on March 26, 1997.

Sept. 1, 1997.

Added by Acts 1995, 74th Leg., ch. 260, Sec. 1, eff. May 30,

1995. Amended by Acts 1997, 75th Leg., ch. 1071, Sec. 15, 30,

eff. Sept. 1, 1997.

Sec. 42.103. SMALL AND MID-SIZED DISTRICT ADJUSTMENT. (a) The

basic allotment for certain small and mid-sized districts is

adjusted in accordance with this section. In this section:

(1) "AA" is the district's adjusted allotment per student;

(2) "ADA" is the number of students in average daily attendance

for which the district is entitled to an allotment under Section

42.101; and

(3) "ABA" is the adjusted basic allotment determined under

Section 42.102.

(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

than 300 square miles and has not more than 1,600 students in

average daily attendance is adjusted by applying the formula:

AA = (1 + ((1,600 - ADA) X .00025)) X ABA

(d) The basic allotment of a school district that offers a

kindergarten through grade 12 program and has less than 5,000

students in average daily attendance is adjusted by applying the

formula, of the following formulas, that results in the greatest

adjusted allotment:

(1) the formula in Subsection (b) or (c) for which the district

is eligible; or

(2) AA = (1 + ((5,000 - ADA) X .000025)) X ABA.

(e) Repealed by Acts 2009, 81st Leg., R.S., Ch. 1328, Sec.

105(a)(5), eff. September 1, 2009.

Added by Acts 1995, 74th Leg., ch. 260, Sec. 1, eff. May 30,

1995. Amended by Acts 2001, 77th Leg., ch. 553, Sec. 1, eff.

Sept. 1, 2001; Acts 2003, 78th Leg., ch. 1276, Sec. 6.008, eff.

Sept. 1, 2003.

Amended by:

Acts 2009, 81st Leg., R.S., Ch.

1328, Sec. 105(a)(5), eff. September 1, 2009.

Sec. 42.104. USE OF SMALL OR MID-SIZED DISTRICT ADJUSTMENT IN

CALCULATING SPECIAL ALLOTMENTS. In determining the amount of a

special allotment under Subchapter C for a district to which

Section 42.103 applies, a district's adjusted basic allotment is

considered to be the district's adjusted allotment determined

under Section 42.103.

Added by Acts 1995, 74th Leg., ch. 260, Sec. 1, eff. May 30,

1995.

Sec. 42.105. SPARSITY ADJUSTMENT. Notwithstanding Sections

42.101, 42.102, and 42.103, a school district that has fewer than

130 students in average daily attendance shall be provided an

adjusted basic allotment on the basis of 130 students in average

daily attendance if it offers a kindergarten through grade 12

program and has preceding or current year's average daily

attendance of at least 90 students or is 30 miles or more by bus

route from the nearest high school district. A district offering

a kindergarten through grade 8 program whose preceding or current

year's average daily attendance was at least 50 students or which

is 30 miles or more by bus route from the nearest high school

district shall be provided an adjusted basic allotment on the

basis of 75 students in average daily attendance. An average

daily attendance of 60 students shall be the basis of providing

the adjusted basic allotment if a district offers a kindergarten

through grade 6 program and has preceding or current year's

average daily attendance of at least 40 students or is 30 miles

or more by bus route from the nearest high school district.

Added by Acts 1995, 74th Leg., ch. 260, Sec. 1, eff. May 30,

1995.

Sec. 42.106. TUITION ALLOTMENT FOR DISTRICTS NOT OFFERING ALL

GRADE LEVELS. 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

the total amount of tuition required to be paid by the district

under Section 25.039, not to exceed the amount specified by

commissioner rule under Section 25.039(b).

Added by Acts 1999, 76th Leg., ch. 396, Sec. 1.12, eff. Sept. 1,

1999. Amended by Acts 2003, 78th Leg., ch. 1069, Sec. 2, eff.

Sept. 1, 2003.

Amended by:

Acts 2009, 81st Leg., R.S., Ch.

1328, Sec. 51, eff. September 1, 2009.

SUBCHAPTER C. SPECIAL ALLOTMENTS

Sec. 42.151. SPECIAL EDUCATION. (a) For each student in

average daily attendance in a special education program under

Subchapter A, Chapter 29, in a mainstream instructional

arrangement, a school district is entitled to an annual allotment

equal to the adjusted basic allotment multiplied by 1.1. For each

full-time equivalent student in average daily attendance in a

special education program under Subchapter A, Chapter 29, in an

instructional arrangement other than a mainstream instructional

arrangement, a district is entitled to an annual allotment equal

to the adjusted basic allotment multiplied by a weight determined

according to instructional arrangement as follows:

Homebound

5.0

Hospital class

3.0

Speech therapy

5.0

Resource room

3.0

Self-contained, mild and moderate,

regular campus

3.0

Self-contained, severe, regular campus

3.0

Off home campus

2.7

Nonpublic day school

1.7

Vocational adjustment class

2.3

(b) A special instructional arrangement for students with

disabilities residing in care and treatment facilities, other

than state schools, whose parents or guardians do not reside in

the district providing education services shall be established

under the rules of the State Board of Education. The funding

weight for this arrangement shall be 4.0 for those students who

receive their education service on a local school district

campus. A special instructional arrangement for students with

disabilities residing in state schools shall be established under

the rules of the State Board of Education with a funding weight

of 2.8.

per day for each student in the off home campus instructional

arrangement may not exceed the contact hours credited per day for

the multidistrict class instructional arrangement in the

1992-1993 school year.

(d) For funding purposes the contact hours credited per day for

each student in the resource room; self-contained, mild and

moderate; and self-contained, severe, instructional arrangements

may not exceed the average of the statewide total contact hours

credited per day for those three instructional arrangements in

the 1992-1993 school year.

(e) The State Board of Education by rule shall prescribe the

qualifications an instructional arrangement must meet in order to

be funded as a particular instructional arrangement under this

section. In prescribing the qualifications that a mainstream

instructional arrangement must meet, the board shall establish

requirements that students with disabilities and their teachers

receive the direct, indirect, and support services that are

necessary to enrich the regular classroom and enable student

success.

(f) In this section, "full-time equivalent student" means 30

hours of contact a week between a special education student and

special education program personnel.

(g) The State Board of Education shall adopt rules and

procedures governing contracts for residential placement of

special education students. The legislature shall provide by

appropriation for the state's share of the costs of those

placements.

(h) Funds allocated under this section, other than an indirect

cost allotment established under State Board of Education rule,

must be used in the special education program under Subchapter A,

Chapter 29.

(i) The agency shall encourage the placement of students in

special education programs, including students in residential

instructional arrangements, in the least restrictive environment

appropriate for their educational needs.

(j) Each year, the agency shall make and disseminate to each

school district a list of those districts that maintain for two

successive years a ratio of full-time equivalent students placed

in partially or totally self-contained classrooms to the number

of full-time equivalent students placed in resource room or

mainstream instructional arrangements that is 25 percent higher

than the statewide average ratio.

(k) A school district that provides an extended year program

required by federal law for special education students who may

regress is entitled to receive funds in an amount equal to 75

percent, or a lesser percentage determined by the commissioner,

of the adjusted basic allotment or adjusted allotment, as

applicable, for each full-time equivalent student in average

daily attendance, multiplied by the amount designated for the

student's instructional arrangement under this section, for each

day the program is provided divided by the number of days in the

minimum school year. The total amount of state funding for

extended year services under this section may not exceed $10

million per year. A school district may use funds received under

this section only in providing an extended year program.

(l) From the total amount of funds appropriated for special

education under this section, the commissioner shall withhold an

amount specified in the General Appropriations Act, and

distribute that amount to school districts for programs under

Section 29.014. The program established under that 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. After deducting the amount

withheld under this subsection from the total amount appropriated

for special education, the commissioner shall reduce each

district's allotment proportionately and shall allocate funds to

each district accordingly.

Added by Acts 1995, 74th Leg., ch. 260, Sec. 1, eff. May 30,

1995. Amended by Acts 2003, 78th Leg., ch. 545, Sec. 1, eff.

Sept. 1, 2003.

For expiration of Subsections (s), (s-1), (s-2), and (s-3), see

Subsection (s-3).

Sec. 42.152. COMPENSATORY EDUCATION ALLOTMENT. (a) For each

student who is educationally disadvantaged or who is a student

who does not have a disability and resides in a residential

placement facility in a district in which the student's parent or

legal guardian does not reside, a district is entitled to an

annual allotment equal to the adjusted basic allotment multiplied

by 0.2, and by 2.41 for each full-time equivalent student who is

in a remedial and support program under Section 29.081 because

the student is pregnant.

(b) For purposes of this section, the number of educationally

disadvantaged students is determined:

(1) by averaging the best six months' enrollment in the national

school lunch program of free or reduced-price lunches for the

preceding school year; or

(2) in the manner provided by commissioner rule, if no campus in

the district participated in the national school lunch program of

free or reduced-price lunches during the preceding school year.

supplemental programs and services designed to eliminate any

disparity in performance on assessment instruments administered

under Subchapter B, Chapter 39, or disparity in the rates of high

school completion between students at risk of dropping out of

school, as defined by Section 29.081, and all other students.

Specifically, the funds, other than an indirect cost allotment

established under State Board of Education rule, which may not

exceed 45 percent, may be used to meet the costs of providing a

compensatory, intensive, or accelerated instruction program under

Section 29.081 or 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.

(c-1) Notwithstanding Subsection (c), funds allocated under this

section may be used to fund in proportion to the percentage of

students served by the program that meet the criteria in Section

29.081(d) or (g):

(1) an accelerated reading instruction program under Section

28.006(g); or

(2) a program for treatment of students who have dyslexia or a

related disorder as required by Section 38.003.

(c-2) Notwithstanding Subsection (c), funds allocated under this

section may be used to fund a district's mentoring services

program under Section 29.089.

(d) The agency shall evaluate the effectiveness of accelerated

instruction and support programs provided under Section 29.081

for students at risk of dropping out of school.

(e) Repealed by Acts 2009, 81st Leg., R.S., Ch. 1328, Sec.

105(a)(6), eff. September 1, 2009.

(f) Repealed by Acts 2009, 81st Leg., R.S., Ch. 1328, Sec.

105(a)(6), eff. September 1, 2009.

(g) Repealed by Acts 2009, 81st Leg., R.S., Ch. 1328, Sec.

105(a)(6), eff. September 1, 2009.

(h) Repealed by Acts 2009, 81st Leg., R.S., Ch. 1328, Sec.

105(a)(6), eff. September 1, 2009.

(i) Repealed by Acts 2009, 81st Leg., R.S., Ch. 1328, Sec.

105(a)(6), eff. September 1, 2009.

(j) Repealed by Acts 2009, 81st Leg., R.S., Ch. 1328, Sec.

105(a)(6), eff. September 1, 2009.

(k) Repealed by Acts 2009, 81st Leg., R.S., Ch. 1328, Sec.

105(a)(6), eff. September 1, 2009.

(l) Repealed by Acts 2009, 81st Leg., R.S., Ch. 1328, Sec.

105(a)(6), eff. September 1, 2009.

(m) Repealed by Acts 2009, 81st Leg., R.S., Ch. 1328, Sec.

105(a)(6), eff. September 1, 2009.

(n) Repealed by Acts 2009, 81st Leg., R.S., Ch. 1328, Sec.

105(a)(6), eff. September 1, 2009.

(o) Repealed by Acts 2009, 81st Leg., R.S., Ch. 1328, Sec.

105(a)(6), eff. September 1, 2009.

(p) Repealed by Acts 2009, 81st Leg., R.S., Ch. 1328, Sec.

105(a)(6), eff. September 1, 2009.

(q) The State Board of Education, with the assistance of the

comptroller, shall develop and implement by rule reporting and

auditing systems for district and campus expenditures of

compensatory education funds to ensure that compensatory

education funds, other than the indirect cost allotment, are

spent only to supplement the regular education program as

required by Subsection (c). The reporting requirements shall be

managed electronically to minimize local administrative costs. A

district shall submit the report required by this subsection not

later than the 150th day after the last day permissible for

resubmission of information required under Section 42.006.

(q-1) The commissioner shall develop a system to identify school

districts that are at high risk of having used compensatory

education funds other than in compliance with Subsection (c) or

of having inadequately reported compensatory education

expenditures. If a review of the report submitted under

Subsection (q), using the risk-based system, indicates that a

district is not at high risk of having misused compensatory

education funds or of having inadequately reported compensatory

education expenditures, the district may not be required to

perform a local audit of compensatory education expenditures and

is not subject to on-site monitoring under this section.

(q-2) If a review of the report submitted under Subsection (q),

using the risk-based system, indicates that a district is at high

risk of having misused compensatory education funds, the

commissioner shall notify the district of that determination. The

district must respond to the commissioner not later than the 30th

day after the date the commissioner notifies the district of the

commissioner's determination. If the district's response does not

change the commissioner's determination that the district is at

high risk of having misused compensatory education funds or if

the district does not respond in a timely manner, the

commissioner shall:

(1) require the district to conduct a local audit of

compensatory education expenditures for the current or preceding

school year;

(2) order agency staff to conduct on-site monitoring of the

district's compensatory education expenditures; or

(3) both require a local audit and order on-site monitoring.

(q-3) If a review of the report submitted under Subsection (q),

using the risk-based system, indicates that a district is at high

risk of having inadequately reported compensatory education

expenditures, the commissioner may require agency staff to assist

the district in following the proper reporting methods or

amending a district or campus improvement plan under Subchapter

F, Chapter 11. If the district does not take appropriate

corrective action before the 45th day after the date the agency

staff notifies the district of the action the district is

expected to take, the commissioner may:

(1) require the district to conduct a local audit of the

district's compensatory education expenditures; or

(2) order agency staff to conduct on-site monitoring of the

district's compensatory education expenditures.

(q-4) The commissioner, in the year following a local audit of

compensatory education expenditures, shall withhold from a

district's foundation school fund payment an amount equal to the

amount of compensatory education funds the agency determines were

not used in compliance with Subsection (c). The commissioner

shall release to a district funds withheld under this subsection

when the district provides to the commissioner a detailed plan to

spend those funds in compliance with Subsection (c).

(r) The commissioner shall grant a one-year exemption from the

requirements of Subsections (q)-(q-4) to a school district in

which the group of students who have failed to perform

satisfactorily in the preceding school year on an assessment

instrument required under Section 39.023(a), (c), or (l)

subsequently performs on those assessment instruments at a level

that meets or exceeds a level prescribed by commissioner rule.

Each year the commissioner, based on the most recent information

available, shall determine if a school district is entitled to an

exemption for the following school year and notify the district

of that determination.

(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.

(t) Repealed by Acts 2009, 81st Leg., R.S., Ch. 1328, Sec.

105(a)(6), eff. September 1, 2009.

(u) Repealed by Acts 2009, 81st Leg., R.S., Ch. 1328, Sec.

105(a)(6), eff. September 1, 2009.

Added by Acts 1995, 74th Leg., ch. 260, Sec. 1, eff. May 30,

1995. Amended by Acts 1997, 75th Leg., ch. 1071, Sec. 16, eff.

Sept. 1, 1997; Acts 1999, 76th Leg., ch. 396, Sec. 1.13, eff.

Sept. 1, 1999; Acts 2001, 77th Leg., ch. 725, Sec. 11, eff. June

13, 2001; Acts 2001, 77th Leg., ch. 1156, Sec. 4, 12, eff; Sept.

1, 2001; Acts 2003, 78th Leg., ch. 201, Sec. 30, eff. Sept. 1,

2003; Acts 2003, 78th Leg., ch. 253, Sec. 1, eff. sept. 1, 2003;

Acts 2003, 78th Leg., ch. 783, Sec. 2, eff. Sept. 1, 2003; Acts

2003, 78th Leg., ch. 785, Sec. 57, eff. Sept. 1, 2003; Acts 2003,

78th Leg., ch. 903, Sec. 3, eff. Sept. 1, 2003; Acts 2003, 78th

Leg., ch. 1276, Sec. 6.009, eff. Sept. 1, 2003.

Amended by:

Acts 2005, 79th Leg., Ch.

728, Sec. 23.001(17), eff. September 1, 2005.

Acts 2007, 80th Leg., R.S., Ch.

1204, Sec. 3, eff. September 1, 2007.

Acts 2009, 81st Leg., R.S., Ch.

1328, Sec. 52, eff. September 1, 2009.

Acts 2009, 81st Leg., R.S., Ch.

1328, Sec. 53, eff. September 1, 2009.

Acts 2009, 81st Leg., R.S., Ch.

1328, Sec. 105(a)(6), eff. September 1, 2009.

Sec. 42.153. BILINGUAL EDUCATION ALLOTMENT. (a) For each

student in average daily attendance in a bilingual education or

special language program under Subchapter B, Chapter 29, a

district is entitled to an annual allotment equal to the adjusted

basic allotment multiplied by 0.1.

(b) Funds allocated under this section, other than an indirect

cost allotment established under State Board of Education rule,

must be used in providing bilingual education or special language

programs under Subchapter B, Chapter 29, and must be accounted

for under existing agency reporting and auditing procedures.

allocation may be used only for program and student evaluation,

instructional materials and equipment, staff development,

supplemental staff expenses, salary supplements for teachers, and

other supplies required for quality instruction and smaller class

size.

Added by Acts 1995, 74th Leg., ch. 260, Sec. 1, eff. May 30,

1995.

Sec. 42.154. CAREER AND TECHNOLOGY EDUCATION ALLOTMENT. (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.

(a-1) Notwithstanding any other provision of this section, the

commissioner shall develop and implement a pilot program under

which a school district is entitled to additional funding for

each student receiving career and technology instruction in grade

eight. The commissioner shall select not more than five school

districts for participation in the pilot program. In selecting

school districts for participation, the commissioner shall

consider school districts that can provide services under the

program at the least cost. For each full-time equivalent student

in grade eight in average daily attendance in an approved career

and technology education program, a school district participating

in the program under this subsection is entitled to an annual

allotment equal to the adjusted basic allotment multiplied by a

weight of 1.35. Funds allocated under this subsection, other

than an indirect cost allotment established under State Board of

Education rule, must be used in providing career and technology

programs in grade eight under Sections 29.182, 29.183, and

29.184. A school district is entitled to an allotment under this

subsection for each school year through the completion of the

2011-2012 school year. Not later than January 1, 2013, the

agency shall prepare and deliver to each member of the

legislature a report describing the effectiveness of the pilot

program described by this subsection. This subsection expires

February 1, 2013.

(b) In this section, "full-time equivalent student" means 30

hours of contact a week between a student and career and

technology education program personnel.

cost allotment established under State Board of Education rule,

must be used in providing career and technology education

programs in grades nine through 12 or career and technology

education programs for students with disabilities in grades seven

through 12 under Sections 29.182, 29.183, and 29.184.

(d) The commissioner shall conduct a cost-benefit comparison

between career and technology education programs and mathematics

and science programs.

(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 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.

Added by Acts 1995, 74th Leg., ch. 260, Sec. 1, eff. May 30,

1995. Amended by Acts 2003, 78th Leg., ch. 201, Sec. 31, eff.

Sept. 1, 2003.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

763, Sec. 5, eff. June 15, 2007.

Acts 2009, 81st Leg., R.S., Ch.

1328, Sec. 54, eff. September 1, 2009.

For expiration of this section, see Subsection (c).

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.

Added by Acts 2009, 81st Leg., R.S., Ch.

1328, Sec. 55, eff. September 1, 2009.

Sec. 42.155. TRANSPORTATION ALLOTMENT. (a) Each district or

county operating a transportation system is entitled to

allotments for transportation costs as provided by this section.

(b) As used in this section:

(1) "Regular eligible student" means a student who resides two

or more miles from the student's campus of regular attendance,

measured along the shortest route that may be traveled on public

roads, and who is not classified as a student eligible for

special education services.

(2) "Eligible special education student" means a student who is

eligible for special education services under Section 29.003 and

who would be unable to attend classes without special

transportation services.

(3) "Linear density" means the average number of regular

eligible students transported daily, divided by the approved

daily route miles traveled by the respective transportation

system.

system is entitled to an allotment based on the daily cost per

regular eligible student of operating and maintaining the regular

transportation system and the linear density of that system. In

determining the cost, the commissioner shall give consideration

to factors affecting the actual cost of providing these

transportation services in each district or county. The average

actual cost is to be computed by the commissioner and included

for consideration by the legislature in the General

Appropriations Act. The allotment per mile of approved route may

not exceed the amount set by appropriation.

(d) A district or county may apply for and on approval of the

commissioner receive an additional amount of up to 10 percent of

its regular transportation allotment to be used for the

transportation of children living within two miles of the school

they attend who would be subject to hazardous traffic conditions

if they walked to school. Each board of trustees shall provide to

the commissioner the definition of hazardous conditions

applicable to that district and shall identify the specific

hazardous areas for which the allocation is requested. A

hazardous condition exists where no walkway is provided and

children must walk along or cross a freeway or expressway, an

underpass, an overpass or a bridge, an uncontrolled major traffic

artery, an industrial or commercial area, or another comparable

condition.

(e) The commissioner may grant an amount set by appropriation

for private or commercial transportation for eligible students

from isolated areas. The need for this type of transportation

grant shall be determined on an individual basis and the amount

granted shall not exceed the actual cost. The grants may be made

only in extreme hardship cases. A grant may not be made if the

students live within two miles of an approved school bus route.

(f) The cost of transporting career and technology education

students from one campus to another inside a district or from a

sending district to another secondary public school for a career

and technology program or an area career and technology school or

to an approved post-secondary institution under a contract for

instruction approved by the agency shall be reimbursed based on

the number of actual miles traveled times the district's official

extracurricular travel per mile rate as set by the board of

trustees and approved by the agency.

(g) A school district or county that provides special

transportation services for eligible special education students

is entitled to a state allocation paid on a previous year's

cost-per-mile basis. The maximum rate per mile allowable shall be

set by appropriation based on data gathered from the first year

of each preceding biennium. Districts may use a portion of their

support allocation to pay transportation costs, if necessary. The

commissioner may grant an amount set by appropriation for private

transportation to reimburse parents or their agents for

transporting eligible special education students. The mileage

allowed shall be computed along the shortest public road from the

student's home to school and back, morning and afternoon. The

need for this type transportation shall be determined on an

individual basis and shall be approved only in extreme hardship

cases.

(h) Funds allotted under this section must be used in providing

transportation services.

(i) In the case of a district belonging to a county

transportation system, the district's transportation allotment

for purposes of determining a district's foundation school

program allocations is determined on the basis of the number of

approved daily route miles in the district multiplied by the

allotment per mile to which the county transportation system is

entitled.

(j) The Texas School for the Deaf is entitled to an allotment

under this section. The commissioner shall determine the

appropriate allotment.

(k) Notwithstanding any other provision of this section, the

commissioner may not reduce the allotment to which a district or

county is entitled under this section because the district or

county provides transportation for an eligible student to and

from a child-care facility, as defined by Section 42. 002, Human

Resources Code, or a grandparent's residence instead of the

student's residence, as authorized by Section 34.007, if the

transportation is provided within the approved routes of the

district or county for the school the student attends.

Added by Acts 1995, 74th Leg., ch. 260, Sec. 1, eff. May 30,

1995. Amended by Acts 1997, 75th Leg., ch. 1071, Sec. 17, eff.

Sept. 1, 1997; Acts 2001, 77th Leg., ch. 169, Sec. 4, eff. Sept.

1, 2001; Acts 2003, 78th Leg., ch. 201, Sec. 32, eff. Sept. 1,

2003.

Sec. 42.156. GIFTED AND TALENTED STUDENT ALLOTMENT. (a) For

each identified student a school district serves in a program for

gifted and talented students that the district certifies to the

commissioner as complying with Subchapter D, Chapter 29, a

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 .12 for

each school year or a greater amount provided by appropriation.

(b) Funds allocated under this section, other than the amount

that represents the program's share of general administrative

costs, must be used in providing programs for gifted and talented

students under Subchapter D, Chapter 29, including programs

sanctioned by International Baccalaureate and Advanced Placement,

or in developing programs for gifted and talented students. Each

district must account for the expenditure of state funds as

provided by rule of the State Board of Education. If by the end

of the 12th month after receiving an allotment for developing a

program a district has failed to implement a program, the

district must refund the amount of the allotment to the agency

within 30 days.

average daily attendance are eligible for funding under this

section.

(d) If the amount of state funds for which school districts are

eligible under this section exceeds the amount of state funds

appropriated in any year for the programs, the commissioner shall

reduce each district's tier one allotments in the same manner

described for a reduction in allotments under Section 42.253.

(e) If the total amount of funds allotted under this section

before a date set by rule of the State Board of Education is less

than the total amount appropriated for a school year, the

commissioner shall transfer the remainder to any program for

which an allotment under Section 42.152 may be used.

(f) After each district has received allotted funds for this

program, the State Board of Education may use up to $500,000 of

the funds allocated under this section for programs such as

MATHCOUNTS, Future Problem Solving, Odyssey of the Mind, and

Academic Decathlon, as long as these funds are used to train

personnel and provide program services. To be eligible for

funding under this subsection, a program must be determined by

the State Board of Education to provide services that are

effective and consistent with the state plan for gifted and

talented education.

Added by Acts 1995, 74th Leg., ch. 260, Sec. 1, eff. May 30,

1995.

Sec. 42.157. PUBLIC EDUCATION GRANT ALLOTMENT. (a) Except as

provided by Subsection (b), for each student in average daily

attendance who is using a public education grant under Subchapter

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

district in which the student resides, the district in which the

student attends school is entitled to an annual allotment equal

to the adjusted basic allotment multiplied by a weight of 0.1.

(b) The total number of allotments under this section to which a

district is entitled may not exceed the number by which the

number of students using public education grants to attend school

in the district exceeds the number of students who reside in the

district and use public education grants to attend school in

another district.

Added by Acts 1997, 75th Leg., ch. 722, Sec. 5, eff. Sept. 1,

1997.

Sec. 42.158. NEW INSTRUCTIONAL FACILITY ALLOTMENT. (a) A

school district is entitled to an additional allotment as

provided by this section for operational expenses associated with

opening a new instructional facility.

(b) For the first school year in which students attend a new

instructional facility, a school district is entitled to an

allotment of $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 $250 for each additional student in average daily

attendance at the facility.

students in average daily attendance at a facility is the

difference between the number of students in average daily

attendance in the current year at that facility and the number of

students in average daily attendance at that facility in the

preceding year.

(d) Subject to Subsection (d-1), the amount appropriated for

allotments under this section may not exceed $25 million in a

school year. If the total amount of allotments to which

districts are entitled under this section for a school year

exceeds the amount appropriated under this subsection, the

commissioner shall reduce each district's allotment under this

section in the manner provided by Section 42.253(h).

(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 $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 $250 for each student in average daily attendance.

(e) 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.

(f) The commissioner may adopt rules necessary to implement this

section.

(g) In this section, "instructional facility" has the meaning

assigned by Section 46.001.

Added by Acts 1999, 76th Leg., ch. 396, Sec. 1.14, eff. Sept. 1,

1999.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

1058, Sec. 15, eff. June 15, 2007.

Sec. 42.159. STA

State Codes and Statutes

State Codes and Statutes

State Codes and Statutes

State Codes and Statutes

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