HB 2

relating to public education and public school finance.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
ARTICLE 1.  CHANGES RELATED TO PUBLIC EDUCATION AND PUBLIC SCHOOL
SECTION 1.01.  Section 12.106, Education Code, is amended by
amending Subsections (a), (a-2), (d), (e), and (f) and adding
Subsection (e-1) to read as follows:
(a)  A charter holder is entitled to receive for the
open-enrollment charter school funding under Chapter 48 equal to
the amount of funding per student in weighted average daily
attendance to which the charter holder would be entitled for the
school under that chapter if the school were a school district
without a tier one local share for purposes of Section 48.266,
(1)  the adjustment under Section 48.052;
(2)  [,] the funding under Sections 48.101 and [,
48.110,] 48.111; [, and 48.112,] and
(3)  enrichment funding under Section 48.202(a) [, to
which the charter holder would be entitled for the school under
Chapter 48 if the school were a school district without a tier one
local share for purposes of Section 48.266].
(a-2)  In addition to the funding provided by Subsection (a),
a charter holder is entitled to receive for the open-enrollment
charter school an allotment per student in average daily attendance
in an amount equal to the difference between:
(i)  the total amount of funding provided to
eligible school districts under Section 48.101(b) or (c); and
(ii)  the total number of students in
average daily attendance in school districts that receive an
allotment under Section 48.101(b) or (c); and
(B)  the sum of one and the quotient of:
(i)  the total number of students in average
daily attendance in school districts that receive an allotment
under Section 48.101(b) or (c); and
(ii)  the total number of students in
average daily attendance in school districts statewide; and
(d)  Subject to Subsections [Subsection] (e) and (e-1), in
addition to other amounts provided by this section, a charter
holder is entitled to receive, for the open-enrollment charter
school, an annual allotment [funding] per student in average daily
attendance in an amount equal to the basic allotment provided under
Section 48.051 for the applicable school year [guaranteed level of
state and local funds per student per cent of tax effort under
Section 46.032(a)] multiplied by 0.07 [the lesser of:
[(1)  the state average interest and sinking fund tax
rate imposed by school districts for the current year; or
[(2)  a rate that would result in a total amount to
which charter schools are entitled under this subsection for the
current year equal to $60 million].
(e)  A charter holder is entitled to receive funding under
Subsection (d) for an open-enrollment charter school only if:
(1)  the most recent overall performance ratings
[rating] assigned to the open-enrollment charter school under
Subchapters [Subchapter] C and D, Chapter 39, reflect [reflects] at
(2)  for an open-enrollment charter school that has not
been assigned performance ratings under both Subchapters C and D,
Chapter 39, the most recent overall performance rating assigned to
the school under either of those subchapters reflects at least
(3)  the[.  This subsection does not apply to a] charter
holder [that] operates a school program located at a day treatment
facility, residential treatment facility, psychiatric hospital, or
(e-1)  A charter holder is entitled to receive funding under
Subsection (d) for an open-enrollment charter school only if the
governing body of the school annually certifies in writing to the
agency that no administrator, officer, or employee of the school
and no member of the governing body of the school or its charter
holder derives any personal financial benefit from a real estate
(f)  Funds received by a charter holder under Subsection (d)
(1)  to lease an instructional facility;
(2)  to pay property taxes imposed on an instructional
(3)  to pay debt service on bonds issued for a purpose
for which a school district is authorized to issue bonds under
Section 45.001(a)(1) or to pay for a purchase for which a school
district is authorized to issue bonds under that section [to
finance an instructional facility]; or
(4)  for any other purpose related to the purchase,
lease, sale, acquisition, or maintenance of an instructional
SECTION 1.02.  Section 12.156(a), Education Code, is amended
(a)  Except as otherwise provided by this subchapter,
Subchapter D, including Section 12.106(d), applies to a college or
university charter school or junior college charter school as
though the college or university charter school or junior college
charter school, as applicable, were granted a charter under that
SECTION 1.03.  Section 21.3521, Education Code, is amended
by amending Subsections (a), (c), and (e) and adding Subsections
(d-1), (d-2), and (d-3) to read as follows:
(a)  Subject to Subsection (b), a school district or
open-enrollment charter school may designate a classroom teacher as
a master, exemplary, [or] recognized, or acknowledged teacher for a
five-year period based on the results from single year or multiyear
appraisals that comply with Section 21.351 or 21.352.
(c)  Notwithstanding performance standards established
under Subsection (b), a classroom teacher that holds a National
Board Certification issued by the National Board for Professional
Teaching Standards may be designated as nationally board certified
(d-1)  Each school year, the commissioner shall, using
criteria developed by the commissioner, designate as enhanced
teacher incentive allotment schools school districts and
open-enrollment charter schools that implement comprehensive
school evaluation and support systems.  The criteria developed by
the commissioner must require a district or school to:
(1)  for principals and assistant principals,
(A)  a strategic evaluations system aligned with
the district's or school's teacher designation system; and
(B)  a compensation system based on performance;
(2)  ensure that under the school district's or
open-enrollment charter school's teacher designation system
substantially all classroom teachers, regardless of the grade level
or subject area to which the teacher is assigned, are eligible to
earn a designation under Subsection (a);
(3)  implement for all instructional staff a
compensation plan based on performance that:
(A)  uses a salary schedule that is based on
differentiation among instructional staff appraisals as permitted
(B)  does not include across-the-board salary
increases for instructional staff except for periodic changes to
the district's or school's salary schedule to adjust for
(4)  implement a locally designed plan to place highly
effective teachers at high needs campuses and in accordance with
(d-2)  The commissioner may remove a school district's or
open-enrollment charter school's designation under Subsection
(d-1) if the commissioner determines the district or school no
longer meets the criteria for the designation.
(d-3)  Not later than September 1 of each year, the
commissioner shall post on the agency's Internet website a list of
the school districts and open-enrollment charter schools
designated as enhanced teacher incentive allotment schools under
(e)  The agency shall develop and provide technical
assistance for school districts and open-enrollment charter
schools that request assistance in implementing a local optional
teacher designation system, including:
(1)  providing assistance in prioritizing high needs
(2)  providing examples or models of local optional
teacher designation systems to reduce the time required for a
district or school to implement a teacher designation system;
(3)  establishing partnerships between districts and
schools that request assistance and districts and schools that have
implemented a teacher designation system;
(4)  applying the performance and validity standards
established by the commissioner under Subsection (b);
(5)  providing centralized support for the analysis of
the results of assessment instruments administered to district or
(6)  facilitating effective communication on and
promotion of local optional teacher designation systems.
SECTION 1.04.  Subchapter H, Chapter 21, Education Code, is
amended by adding Section 21.3522 to read as follows:
Sec. 21.3522.  LOCAL OPTIONAL TEACHER DESIGNATION SYSTEM
GRANT PROGRAM.  (a)  From money appropriated or otherwise available
for the purpose, the agency shall establish and administer a grant
program to provide money and technical assistance to:
(1)  expand and support ongoing implementation of local
optional teacher designation systems under Section 21.3521;
(2)  increase the number of classroom teachers eligible
for a designation under that section; and
(3)  increase the salaries paid to classroom teachers
employed by school districts or open-enrollment charter schools
that have established or are seeking to establish a designation
(b)  A grant awarded under this section must:
(1)  meet the needs of individual school districts or
open-enrollment charter schools; and
(2)  enable regional leadership capacity.
(c)  The commissioner may adopt rules as necessary to
SECTION 1.05.  Subchapter C, Chapter 25, Education Code, is
amended by adding Section 25.0816 to read as follows:
Sec. 25.0816.  ADDITIONAL DAYS SCHOOL YEAR PLANNING GRANT
PROGRAM.  (a) From money appropriated or otherwise available for
the purpose, the agency shall establish and administer a grant
program to provide funding and technical assistance to school
districts and open-enrollment charter schools to plan the school
year and adjust operations as necessary to qualify for the
incentive funding under Section 48.0051.
(b)  In awarding grants under the program, the agency shall
prioritize school districts and open-enrollment charter schools
that seek to maximize incentive funding under Section 48.0051.
(c)  The agency may solicit and accept gifts, grants, and
donations for purposes of this section.
SECTION 1.06.  Section 28.0211(a-1), Education Code, is
(a-1)  Each time a student fails to perform satisfactorily on
an assessment instrument administered under Section 39.023(a) or
(l) in the third, fourth, fifth, sixth, seventh, or eighth grade or
an end-of-course assessment instrument administered under Section
39.023(c), other than an assessment instrument developed or adopted
based on alternative academic achievement standards, the school
district in which the student attends school shall provide to the
student accelerated instruction in the applicable subject area
during the subsequent summer or school year and, subject to
Subsections (a-7) and (a-8), either:
(1)  allow the student to be assigned a classroom
teacher who has earned a designation [is certified as a master,
exemplary, or recognized teacher] under Section 21.3521 for the
subsequent school year in the applicable subject area; or
(2)  provide the student supplemental instruction
SECTION 1.07.  Section 29.153, Education Code, is amended by
adding Subsections (b-1) and (h) to read as follows:
(b-1)  Notwithstanding Subsection (b), any child who is at
least three years of age is eligible for enrollment in a
prekindergarten class under this section if:
(1)  the class is provided through a partnership
between a school district or open-enrollment charter school and a
community-based child-care provider described by Subsection (g);
(2)  the child receives subsidized child-care services
provided through the child-care services program administered by
the Texas Workforce Commission.
(h)  Notwithstanding any other law, a facility or location at
which prekindergarten classes are provided by a school district or
open-enrollment charter school in partnership with a private entity
(1)  must comply with any municipal ordinance
applicable to the operation of a private prekindergarten program;
(2)  may not be required to comply with any municipal
ordinance applicable to the operation of a prekindergarten program
by a school district or open-enrollment charter school.
SECTION 1.08.  Sections 29.934(b) and (d), Education Code,
are amended to read as follows:
(b)  To apply to be designated as a resource campus under
this section, the campus must have received an overall performance
rating under Section 39.054 of D or F, or an overall performance
rating under Section 39.054(a-4)(1) or 39.0546 of "Not Rated," for
three [four] years over a 10-year period of time.
(d)  To be designated as a resource campus, the campus must:
(1)  implement a targeted improvement plan as described
by Chapter 39A and establish a school community partnership team;
(2)  adopt an accelerated campus excellence turnaround
plan as provided by Section 39A.105(b) [except that a classroom
teacher who satisfies the requirements for demonstrated
instructional effectiveness under Section 39A.105(b)(3) must also
hold a current designation assigned under Section 21.3521];
(3)  be in a school district that has adopted an
approved local optional teacher designation system under Section
(4)  satisfy certain staff criteria by:
(A)  requiring a principal or teacher employed at
the campus before the designation to apply for a position to
(B)  for a subject in the foundation curriculum
(i)  employing only teachers who have at
least two [three] years of teaching experience; and
(ii)  ensuring that at least 50 percent of
teachers hold a current designation assigned under Section 21.3521;
(C)  employing at least one school counselor for
(D)  employing at least one appropriately
licensed professional to assist with the social and emotional needs
of students and staff, who must be a:
(i)  family and community liaison;
(iii)  specialist in school psychology; or
(5)  implement a positive behavior program as provided
(6)  implement a family engagement plan as described by
(7)  develop and implement a plan to use high quality
(8)  if the campus is an elementary or middle school
campus, operate the campus for a school year that qualifies for
funding under Section 48.0051; and
(9)  annually submit to the commissioner data and
information required by the commissioner to assess fidelity of
SECTION 1.09.  Effective September 1, 2028, Section 29.934,
Education Code, is amended by amending Subsection (b) and adding
Subsection (b-1) to read as follows:
(b)  To apply to be designated as a resource campus under
this section, the campus must have received an overall performance
rating under Section 39.054 of D or F, or an overall performance
rating under Section 39.054(a-4)(1) of "Not Rated," for three
[four] years over a 10-year period of time.
(b-1)  Notwithstanding Subsection (b), a campus may apply to
be designated as a resource campus under this section if the campus
received an overall performance rating under Section 39.054 of D or
F, or an overall performance rating under Section 39.054(a-4)(1) or
former Section 39.0546 of "Not Rated," for three years over a
10-year period of time.  This subsection expires September 1, 2033.
SECTION 1.10.  Subchapter Z, Chapter 29, Education Code, is
amended by adding Sections 29.939 and 29.940 to read as follows:
Sec. 29.939.  HIGH SCHOOL ADVISING PROGRAM.  (a)  The agency
shall establish a high school advising program through which
participating school districts and open-enrollment charter schools
provide college or career advising supports to students, either by
hiring employees or contracting with service providers.
(b)  A school district or open-enrollment charter school
participating in the program must have at least one partnership
(1)  if the district or school provides college
advisors, a public institution of higher education to support
students to transition successfully from high school graduation to
college enrollment, persistence, and completion; and
(2)  if the district or school provides career
(A)  a vocational program at a public institution
(c)  An advisor under the program must be trained in:
(1)  practices relating to college advising to serve as
(2)  practices relating to career advising to serve as
(d)  A full-time equivalent advisor under the program may not
have a caseload of more than 200 students and must prioritize
students in grade levels 11 and 12.
(e)  The commissioner may adopt rules as necessary to
implement this section.  In adopting rules, the commissioner shall
consult with the Texas Workforce Commission and the Texas Higher
Sec. 29.940.  FEDERAL GRANT ADMINISTRATION.  For a federal
grant program under which the agency oversees and administers
services to nonpublic schools, the agency shall follow federal
disposition rules and procedures to dispose of equipment or
supplies that are unused or no longer needed and were previously
allocated to nonpublic schools participating in the grant program.
SECTION 1.11.  Section 45.105, Education Code, is amended by
amending Subsection (c) and adding Subsection (c-2) to read as
(c)  Local school funds from district taxes, tuition fees of
students not entitled to a free education, other local sources, and
state funds not designated for a specific purpose may be used for
the purposes listed for state and county available funds and for
purchasing appliances and supplies, paying insurance premiums,
paying janitors and other employees, buying school sites, buying,
building, repairing, and renting school buildings, including
acquiring school buildings and sites by leasing through annual
payments with an ultimate option to purchase, providing advising
support as described by Section 48.0035, and educating students as
described by Subsection (c-2), and, except as provided by
Subsection (c-1), for other purposes necessary in the conduct of
the public schools determined by the board of trustees.  The
accounts and vouchers for county districts must be approved by the
county superintendent.  If the state available school fund in any
municipality or district is sufficient to maintain the schools in
any year for at least eight months and leave a surplus, the surplus
may be spent for the purposes listed in this subsection.
(c-2)  A school district may use funding described by
Subsection (c) to educate a student who has graduated from high
school but is enrolled in the district in a program through which
the student may earn dual credit, including the Pathways in
Technology Early College High School (P-TECH) program under
Subchapter N, Chapter 29, and the Rural Pathway Excellence
Partnership (R-PEP) program under Section 29.912.
SECTION 1.12.  Subchapter A, Chapter 48, Education Code, is
amended by adding Section 48.0035 to read as follows:
Sec. 48.0035.  USE OF FUNDING FOR CERTAIN PURPOSES.  A school
district may use funding to which the district is entitled under
this chapter to provide district graduates, during the first two
years after high school graduation, advising support toward the
successful completion of a certificate or degree program at a
public institution of higher education or a postsecondary
SECTION 1.13.  Section 48.005, Education Code, is amended by
amending Subsections (a), (b), (e), and (f) and adding Subsection
(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
(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);
(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
Sections 29.0822(d) and (d-1); or
(4)  except as provided by Subsection (a-1), for a
district that operates a half-day program or a full-day program
under Section 29.153(c), one-half of the average daily attendance
calculated under Subdivision (1).
(a-1)  Average daily attendance is calculated under
Subsection (a)(1) for students:
(1)  enrolled in a half-day program or full-day program
under Section 29.153(c) provided by an eligible private provider
(A)  that is operated under a contract entered
into by the district with an entity under Section 11.174 or an
eligible private provider under Section 29.171; or
(B)  of an open-enrollment charter school that is
operated by an entity governed by a management contract approved by
(b)  A school district that experiences a decline of more
than five [two] percent [or more] in average daily attendance shall
[(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 of 95 [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
(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) [(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;
(2)  the total cost to the state does not exceed $50
million, or a greater amount provided by appropriation [the amount
specifically appropriated for that year for purposes of Subsection
(f)  An open-enrollment charter school is not entitled to
funding based on an adjustment under Subsection (b) [(b)(2)].
SECTION 1.14.  Section 48.0051, Education Code, is amended
by amending Subsections (a), (b), and (d) and adding Subsection
(a)  The [Subject to Subsection (a-1), the] commissioner
shall adjust the average daily attendance of a school district or
open-enrollment charter school under Section 48.005 in the manner
provided by Subsection (b) if the district or school:
(1)  provides the minimum number of minutes of
operational and instructional time required under Section 25.081
and commissioner rules adopted under that section over at least 175
(2)  offers an additional 30 days of half-day
instruction for students enrolled in prekindergarten through
(b)  Subject to Subsection (b-1), for [For] a school district
or open-enrollment charter school described by Subsection (a), the
commissioner shall increase the average daily attendance of the
district or school under Section 48.005 by the amount that results
from the quotient of the sum of attendance by students described by
Subsection (a)(2) for each of the 30 additional instructional days
of half-day instruction that are provided divided by 175 [180].
(b-1)  For a school district or open-enrollment charter
school described by Subsection (a) that provides at least 200 full
days of instruction to students described by Subsection (a)(2), the
commissioner shall increase the amount computed for the district or
school under Subsection (b) by 50 percent.
(d)  This section does not prohibit a school district from
providing the minimum number of minutes of operational and
instructional time required under Section 25.081 and commissioner
rules adopted under that section over fewer than 175 [180] days of
SECTION 1.15.  Subchapter A, Chapter 48, Education Code, is
amended by adding Section 48.014 to read as follows:
Sec. 48.014.  NOTICE FOR SCHOOL DISTRICTS REGARDING RECOURSE
FOR INVALID PROPERTY VALUES.  (a)  This section applies only to a
school district located in an appraisal district in which the
comptroller has certified the preliminary findings of the school
district property value study under Section 403.302(g), Government
Code, and determined that a school district located in the
appraisal district has an invalid local value, regardless of
whether the district meets the definition of an eligible school
district under Section 403.3011, Government Code.
(b)  For each school district to which this section applies
and as soon as practicable after the comptroller has certified the
preliminary findings of the school district property value study
under Section 403.302(g), Government Code, the commissioner shall
provide notice to the board of trustees of the district that
includes information regarding the impact or possible impact of a
final certification of an invalid local value on the district's
(1)  an estimate of the effect on the district's
(2)  any right of recourse available to the district.
(c)  Each school district shall annually report to the agency
contact information for the members of the district's board of
trustees for purposes of receiving the notice under this section.
(d)  The commissioner shall coordinate with the comptroller
to provide copies of the notice under this section to the board of
directors of each applicable appraisal district.
SECTION 1.16.  Sections 48.051(a), (c), and (c-1), Education
Code, are amended to read as follows:
(a)  For each student in average daily attendance, not
including the time students spend each day in career and technology
education programs or in special education programs in a setting
[an instructional arrangement] other than a general education
setting [mainstream or career and technology education programs],
for which an additional allotment is made under Subchapter C, a
school district is entitled to an allotment equal to the lesser of
$6,380 [$6,160] or the amount that results from the following
"A" is the allotment to which a district is entitled;
"TR" is the district's tier one maintenance and operations
tax rate, as provided by Section 45.0032; and
"MCR" is the district's maximum compressed tax rate, as
determined under Section 48.2551.
(c)  During any school year for which the maximum amount of
the basic allotment provided under Subsection (a) or (b) is greater
than the maximum amount provided for the preceding school year, a
school district must use at least 40 [30] percent of the amount, if
the amount is greater than zero, that equals the product of the
average daily attendance of the district multiplied by the amount
of the difference between the district's funding under this chapter
per student in average daily attendance for the current school year
and the preceding school year to provide compensation increases to
full-time district employees other than administrators as follows:
(1)  75 percent must be used to increase the
compensation paid to classroom teachers, full-time librarians,
full-time school counselors certified under Subchapter B, Chapter
21, and full-time school nurses, prioritizing differentiated
compensation for classroom teachers with more than five years of
(2)  25 percent may be used as determined by the
district to increase compensation paid to full-time district
(c-1)  A school district employee who received a salary
increase under Subsection (c) [from a school district for the
2019-2020 school year] is, as long as the employee remains employed
by the same district and the district is receiving at least the same
amount of funding as the amount of funding the district received for
the [2019-2020] school year in which the requirement under
Subsection (c) applied, entitled to salary that is at least equal to
the salary the employee received for the preceding [2019-2020]
school year.  This subsection does not apply if:
(1)  the board of trustees of the school district at
which the employee is employed:
(A) [(1)]  complies with Sections 21.4021,
21.4022, and 21.4032 in reducing the employee's salary; and
(B) [(2)]  has adopted a resolution declaring a
financial exigency for the district under Section 44.011; or
(2)  the school district evaluates the employee's
performance and the employee's performance rating is lower than the
employee's performance rating during the school year in which the
requirement under Subsection (c) applied.
SECTION 1.17.  Section 48.101, Education Code, is amended to
Sec. 48.101.  SMALL AND MID-SIZED DISTRICT ALLOTMENT.  (a)
Small and mid-sized districts are entitled to an annual allotment
in accordance with this section.  In this section:
(1)  "AA" is the district's annual allotment per
student in average daily attendance;
(2)  "ADA" is the number of students in average daily
attendance for which the district is entitled to an allotment under
Section 48.051, other than students in average daily attendance who
do not reside in the district and are enrolled in a full-time
(3)  "BA" is the basic allotment determined under
(b)  A school district that has fewer than 1,600 students in
average daily attendance is entitled to an annual allotment for
each student in average daily attendance based on the following
AA = ((1,600 - ADA) X .00062 [.0004]) X BA
(c)  A school district that offers a kindergarten through
grade 12 program and has less than 5,000 students in average daily
attendance is entitled to an annual allotment for each student in
average daily attendance based on the formula, of the following
formulas, that results in the greatest annual allotment:
(1)  the formula in Subsection (b), if the district is
(2)  AA = ((5,000 - ADA) X .000035 [.000025]) X BA.
(d)  Instead of the allotment under Subsection (b) or (c)(1),
a school district that has fewer than 300 students in average daily
attendance and is the only school district located in and operating
in a county is entitled to an annual allotment for each student in
average daily attendance based on the following formula:
AA = ((1,600 - ADA) X .00065 [.00047]) X BA
SECTION 1.18.  Sections 48.104(a), (d), and (e), Education
Code, are amended to read as follows:
(a)  For each 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 basic allotment
multiplied by 0.2 or, if the student is educationally
disadvantaged, 0.28 [0.275].  For each full-time equivalent student
who is in a remedial and support program under Section 29.081
because the student is pregnant, a district is entitled to an annual
allotment equal to the basic allotment multiplied by 2.41.
(d)  The weights assigned to the five tiers of the index
established under Subsection (c) are, from least to most severe
economic disadvantage, 0.23 [0.225], 0.2425 [0.2375], 0.255
[0.25], 0.2675 [0.2625], and 0.28 [0.275].
(e)  If insufficient data is available for any school year to
evaluate the level of economic disadvantage in a census block
group, a school district is entitled to an annual allotment equal to
the basic allotment multiplied by 0.23 [0.225] for each student who
is educationally disadvantaged and resides in that census block
SECTION 1.19.  Section 48.112, Education Code, is amended by
amending Subsections (c), (d), and (i) and adding Subsection (g-1)
(c)  For each classroom teacher with a teacher designation
under Section 21.3521 employed by a school district, the school
district is entitled to an allotment equal to the following
applicable base amount increased by the high needs and rural factor
as determined under Subsection (d):
(1)  $12,000, or an increased amount not to exceed
$36,000 [$32,000] as determined under Subsection (d), for each
(2)  $9,000 [$6,000], or an increased amount not to
exceed $25,000 [$18,000] as determined under Subsection (d), for
(3)  $5,000 [$3,000], or an increased amount not to
exceed $15,000 [$9,000] as determined under Subsection (d), for
(4)  $3,000, or an increased amount not to exceed
$9,000 as determined under Subsection (d), for each:
(B)  nationally board certified teacher.
(d)  The high needs and rural factor is determined by
multiplying the following applicable amounts by the average of the
point value assigned to each student at a district campus under
(1)  $6,000 [$5,000] for each master teacher;
(2)  $4,000 [$3,000] for each exemplary teacher; [and]
(3)  $2,500 [$1,500] for each recognized teacher; and
(B)  nationally board certified teacher.
(g-1)  For a district that is designated as an enhanced
teacher incentive allotment school under Section 21.3521(d-1), the
commissioner shall increase the amount to which the district is
entitled under this section by multiplying that amount by 1.1.
(i)  A district shall annually certify that:
(1)  funds received under this section were used as
(A)  at least 90 percent of each allotment
received under Subsection (c) was used for the compensation of
teachers employed at the campus at which the teacher for whom the
district received the allotment is employed; [and]
(B)  for a district whose allotment was increased
under Subsection (g-1), the amount by which the allotment was
increased under that subsection was used to meet the criteria to
maintain a designation as an enhanced teacher incentive allotment
school under Section 21.3521(d-1); and
(C)  any other funds received under this section
were used for costs associated with implementing Section 21.3521,
including efforts to support teachers in obtaining designations;
(2)  the district prioritized high needs campuses in
the district in using funds received under this section.
SECTION 1.20.  Subchapter C, Chapter 48, Education Code, is
amended by adding Section 48.116 to read as follows:
Sec. 48.116.  FINE ARTS ALLOTMENT.  (a)  For each student in
average daily attendance enrolled in a fine arts education course
approved by the agency under Subsection (b) in grades 6 through 12,
a school district is entitled to an annual allotment equal to:
(1)  if the student is not educationally disadvantaged,
the basic allotment, or, if applicable, the sum of the basic
allotment and the allotment under Section 48.101 to which the
district is entitled, multiplied by 0.008; or
(2) if the student is educationally disadvantaged, the
amount determined under Subdivision (1) multiplied by two.
(b)  The agency shall approve fine arts education courses
that qualify for the allotment provided under this section.  The
approved courses must include fine arts education courses that:
(1)  are authorized by the State Board of Education,
including music, art, theater, and dance;
(2)  provide students with the knowledge and skills
necessary for success in the fine arts; and
(3)  require a student in full-time attendance to
receive not less than 225 minutes of fine arts instruction per week.
(c)  The agency shall annually publish a list of fine arts
education courses approved under Subsection (b).
(d)  The total amount of allotments provided under this
section for a school year may not exceed $15 million.
(e)  The agency may proportionally reduce each school
district's allotment under this section if the amount appropriated
for purposes of this section is insufficient to pay for all
allotments to which districts are entitled under this section.
SECTION 1.21.  Subchapter D, Chapter 48, Education Code, is
amended by adding Section 48.162 to read as follows:
Sec. 48.162.  HIGH SCHOOL ADVISING ALLOTMENT.  (a)  Subject
to Subsections (b) and (c), for each full-time equivalent advisor
or contracted service provider under the high school advising
program established under Section 29.939, a school district is
(b)  The number of advisors for whom a school district may
receive an allotment under this section may not exceed the quotient
of, rounded up to the nearest whole number:
(1)  the number of students enrolled in the district in
(c)  Beginning with the fifth school year for which a school
district receives an allotment under this section, the commissioner
shall reduce the district's allotment by 20 percent for each school
year unless the district's performance under Section 48.110 for the
(1)  exceeded the average of the district's performance
under that section for the two school years preceding that school
(2)  was in the top 25 percent of statewide performance
(3)  established that at least 40 percent of the
district's educationally disadvantaged annual graduates
demonstrated college, career, or military readiness as described by
SECTION 1.22.  Section 48.202(a-1), Education Code, is
(a-1)  For purposes of Subsection (a), the dollar amount
guaranteed level of state and local funds per weighted student per
cent of tax effort ("GL") for a school district is:
(1)  the greater of the amount of district tax revenue
per weighted student per cent of tax effort available to a school
district at the 96th percentile of wealth per weighted student or
the amount that results from multiplying the maximum amount of the
basic allotment provided under Section 48.051 for the applicable
school year [6,160], or the greater amount provided under Section
48.051(b), if applicable, by 0.016, for the first eight cents by
which the district's maintenance and operations tax rate exceeds
the district's tier one tax rate; and
(2)  subject to Subsection (f), the amount that results
from multiplying the maximum amount of the basic allotment provided
under Section 48.051 for the applicable school year [$6,160], or
the greater amount provided under Section 48.051(b), if applicable,
by 0.008, for the district's maintenance and operations tax effort
that exceeds the amount of tax effort described by Subdivision (1).
SECTION 1.23.  Section 48.2543, Education Code, is amended
Sec. 48.2543.  ADDITIONAL STATE AID FOR CERTAIN DISTRICTS
[HOMESTEAD EXEMPTION].  [(a)  For the 2022-2023 school year, a
school district is entitled to additional state aid to the extent
that state and local revenue under this chapter and Chapter 49 is
less than the state and local revenue that would have been available
to the district under this chapter and Chapter 49 as those chapters
existed on September 1, 2021, if any increase in the residence
homestead exemption under Section 1-b(c), Article VIII, Texas
Constitution, as proposed by the 87th Legislature, 3rd Called
Session, 2021, had not occurred.
[(a-1)]  Beginning with the 2025-2026 [2023-2024] school
year, a school district is entitled to additional state aid to the
extent that state and local revenue under this chapter, other than
former Section 48.2543(a), and Chapter 49 is less than the state and
local revenue that would have been available to the district under
this chapter and Chapter 49 as those chapters existed on September
1, 2022, if each of the following had not occurred:
(1)  an [any] increase in a residence homestead
exemption under Section 1-b(c), Article VIII, Texas Constitution,
and any additional limitation on tax increases under Section 1-b(d)
of that article as proposed by the 88th Legislature, 2nd Called
(2)  a reduction of the amount of the limitation on tax
increases provided by Section 11.26(a-10), Tax Code; and
(3)  a reduction in the district's maximum compressed
tax rate under Section 48.2555, as added by Chapter 1 (S.B. 2), Acts
of the 88th Legislature, 2nd Called Session, 2023 [, had not
[(b)  The lesser of the school district's currently adopted
maintenance and operations tax rate or the adopted maintenance and
[(1)  the 2021 tax year is used for the purpose of
determining additional state aid under Subsection (a); and
[(2)  the 2022 tax year is used for the purpose of
determining additional state aid under Subsection (a-1).]
SECTION 1.24.  Section 48.257, Education Code, is amended by
adding Subsection (b-1) to read as follows:
(b-1)  If for any school year a school district receives an
adjustment under Subsection (b) and, after that adjustment, is no
longer subject to Subsection (a), the district is entitled to
additional state aid for that school year in an amount equal to the
(1)  the difference, if the difference is greater than
(A)  the amount to which the district is entitled
under Subchapters B, C, and D less the district's distribution from
the available school fund for that school year; and
(B)  the district's tier one maintenance and
operations tax collections for that school year; or
(2)  the sum of the district's allotments under
Sections 48.0051, 48.110, and 48.112 for that school year.
SECTION 1.25.  Section 48.266, Education Code, is amended by
amending Subsection (b) and adding Subsection (b-1) to read as
(b)  Except as provided by this subsection and subject to
Subsection (b-1), the commissioner shall base the determinations
under Subsection (a) on the estimates provided to the legislature
under Section 48.269, or, if the General Appropriations Act
provides estimates for that purpose, on the estimates provided
under that Act, for each school district for each school year.  The
commissioner shall reduce the entitlement of each district that has
a final taxable value of property for the second year of a state
fiscal biennium that is higher than the estimate under Section
48.269 or the General Appropriations Act, as applicable.  A
reduction under this subsection may not reduce the district's
entitlement below the amount to which it is entitled at its actual
(b-1)  Periodically throughout the school year, the
commissioner shall adjust the determinations made under Subsection
(a) to reflect current school year estimates of a district's
enrollment and average daily attendance, as determined by the
SECTION 1.26.  Section 48.283, Education Code, is amended to
Sec. 48.283.  ADDITIONAL STATE AID FOR CERTAIN DISTRICTS
IMPACTED BY COMPRESSION.  (a)  For the 2023-2024 and 2024-2025
school years, a [A] school district that received an adjustment
under Section 48.257(b) for the 2022-2023 school year is entitled
to additional state aid [for each school year] in an amount equal to
[the amount of that adjustment for the 2022-2023 school year less]
the difference, if the difference is greater than zero, between:
(1)  [the amount to which the district is entitled
under this chapter for the current school year; and
[(2)]  the amount of state and local revenue that would
have been available to [which] the district [would be entitled]
under this chapter and Chapter 49 for the 2023-2024 or 2024-2025
[current] school year, as applicable, if the district's maximum
compressed tax rate had not been reduced under Section 48.2555, as
added by S.B. 2, Acts of the 88th Legislature, 2nd Called Session,
(2)  the amount of state and local revenue available to
the district under this chapter and Chapter 49 for the 2023-2024 or
2024-2025 school year, as applicable.
(b)  This section expires January 1, 2026.
SECTION 1.27.  Subchapter F, Chapter 48, Education Code, is
amended by adding Sections 48.2711 and 48.284 to read as follows:
Sec. 48.2711.  ADJUSTMENT FOR LOSS OF REVENUE DUE TO USE OF
STATE VALUE.  (a)  This section applies only to a school district:
(1)  for which the state value for the district's
taxable value of property is used under Section 403.302(c),
(2)  in which the district's board of trustees adopts a
resolution during the school year recognizing the need for an
(b)  For each school district to which this section applies,
the agency shall determine whether the district's entitlement under
this chapter for a school year is greater if the district's taxable
(2)  the state value as determined by the comptroller
under Sections 403.302(a) and (b), Government Code.
(c)  If the agency determines under Subsection (b) that the
school district's entitlement is greater for the applicable school
year using the local value for the district's taxable value of
property, the commissioner shall increase state aid or adjust the
limit on local revenue under Section 48.257 for the district for
that school year in an amount equal to:
(1)  for the first school year in which this subsection
applies to the district, the difference between the amounts
determined under Subsection (b);
(2)  for the second consecutive school year in which
this subsection applies to the district, 70 percent of the
difference between the amounts determined under Subsection (b); and
(3)  for the third consecutive school year in which
this subsection applies to the district, 40 percent of the
difference between the amounts determined under Subsection (b).
(d)  A school district may not receive an adjustment under
this section for more than three consecutive school years unless
the legislature specifically appropriates money for the purpose of
making adjustments under this section for the fourth or a
subsequent consecutive school year.
(e)  For purposes of determining the number of consecutive
school years for which this section applies to a school district,
the commissioner may not consider a school year before the
(f)  A school year in which the comptroller determines a
school district's local value to be valid under Section 403.302(c),
Government Code, that occurs after the district receives an
adjustment under this section is not included in calculating
consecutive school years under Subsection (c) or (d) and is not
considered a break in consecutive school years, except as provided
(g)  A school district may not receive an adjustment under
this section for a school year in which the district is determined
to be an eligible school district, as defined by Section 403.3011,
Government Code.  A school year in which the district is not
eligible for an adjustment under this subsection is included in
calculating consecutive school years under Subsections (c) and (d).
(h)  Except as provided by Subsection (d), a school district
that receives an adjustment under this section for three
consecutive school years is not eligible to receive an adjustment
under this section in the subsequent school year but may be again
eligible for the adjustment following two consecutive school years
for which the local value is used for the district's taxable value
of property under Section 403.302(c), Government Code.
(i)  The total amount of adjustments made under this section
for a school year may not exceed $60 million.
(j)  If the total amount of adjustments for which school
districts are eligible under this section for a school year exceeds
the limit under Subsection (i), the commissioner shall prioritize
school districts experiencing the greatest percentage reduction in
funding, as determined based on the difference between the amounts
determined under Subsection (b).
(k)  A determination made by the commissioner under this
section is final and may not be appealed.
Sec. 48.284.  ADDITIONAL STATE AID FOR REGIONAL INSURANCE
COST DIFFERENTIALS.  (a) This section applies to a school district
or open-enrollment charter school that owns or leases real property
located in an area served by a regional education service center for
Region 1, 2, 3, 4, or 5, as those regions existed on September 1,
(b)  A school district or open-enrollment charter school to
which this section applies is entitled to additional state aid for
each school year equal to $55, or a greater amount provided by
appropriation, per student in average daily attendance for the
increased cost incurred by the district or school for expenses
related to maintaining property and casualty insurance.
SECTION 1.28.  Sections 12.106(a-4) and 48.2542, Education
SECTION 1.29.  Immediately following the effective date of
this Act, a school district or open-enrollment charter school shall
redesignate a teacher who holds a designation made under Section
21.3521, Education Code, before the effective date of this Act, to
reflect the teacher's designation under Section 21.3521, Education
Code, as amended by this article.  Funding provided to a school
district under Section 48.112, Education Code, as amended by this
article, for a teacher who held a designation made under Section
21.3521, Education Code, as that section existed immediately before
the effective date of this Act, shall be increased to reflect the
teacher's redesignation under Section 21.3521, Education Code, as
SECTION 1.30.  Not later than September 1, 2026, the
commissioner of education shall post on the Texas Education
Agency's Internet website the initial list of enhanced teacher
incentive allotment schools required by Section 21.3521(d-3),
Education Code, as added by this article.
ARTICLE 2.  TEACHER PREPARATION AND CHANGES RELATED TO EMPLOYEES
SECTION 2.01.  Section 12A.004(a), Education Code, is
(a)  A local innovation plan may not provide for the
exemption of a district designated as a district of innovation from
the following provisions of this title:
(1)  a state or federal requirement applicable to an
open-enrollment charter school operating under Subchapter D,
(2)  Subchapters A, C, D, and E, Chapter 11, except that
a district may be exempt from Sections 11.1511(b)(5) and (14) and
(3)  the employment of uncertified classroom teachers
(4)  parental notification requirements under Section
(5)  state curriculum and graduation requirements
(6) [(4)]  academic and financial accountability and
sanctions under Chapters 39 and 39A.
SECTION 2.02.  Section 19.007(g), Education Code, is amended
(g)  In addition to other amounts received by the district
under this section, the district is entitled to:
(1)  state aid in the amount necessary to fund the
salary increases required by Section 19.009(d-2); and
(2)  the preparing and retaining educators through
preservice partnership program allotment under Section 48.157.
SECTION 2.03.  Section 21.001, Education Code, is amended by
adding Subdivision (3-b) to read as follows:
(3-b)  "Teacher of record" means a person employed by a
school district who teaches the majority of the instructional day
in an academic instructional setting and is responsible for
evaluating student achievement and assigning grades.
SECTION 2.04.  Subchapter A, Chapter 21, Education Code, is
amended by adding Section 21.0032 to read as follows:
Sec. 21.0032.  EMPLOYMENT OF UNCERTIFIED CLASSROOM
TEACHERS.  (a)  A school district may not employ as a classroom
teacher for a course in the foundation curriculum under Section
28.002 a person who does not hold an appropriate certificate or
permit issued by the State Board for Educator Certification under
(b)  Notwithstanding Subsection (a), for the 2026-2027