Saturday, May 25, 2019

SEVENTY-FOURTH DAY --- SATURDAY, MAY 25, 2019

The house met at 9:49 a.m. and was called to order by the speaker.

The roll of the house was called and a quorum was announced present (Record 1926).

Present — Mr. Speaker(C); Allen; Allison; Anchia; Anderson; Ashby; Bailes; Beckley; Bell, C.; Bell, K.; Bernal; Biedermann; Blanco; Bohac; Bonnen; Bowers; Buckley; Bucy; Burns; Burrows; Button; Cain; Calanni; Canales; Capriglione; Clardy; Cole; Coleman; Collier; Cortez; Craddick; Cyrier; Darby; Davis, S.; Davis, Y.; Dean; Deshotel; Dominguez; Dutton; Farrar; Fierro; Flynn; Frank; Frullo; Geren; Gervin-Hawkins; Goldman; González, J.; González, M.; Goodwin; Guerra; Guillen; Gutierrez; Harless; Harris; Hefner; Hernandez; Herrero; Hinojosa; Holland; Howard; Huberty; Hunter; Israel; Johnson, J.D.; Johnson, J.E.; Kacal; King, K.; King, P.; King, T.; Klick; Krause; Kuempel; Lambert; Landgraf; Lang; Larson; Leach; Leman; Longoria; Lopez; Lozano; Lucio; Martinez; Martinez Fischer; Metcalf; Meyer; Meza; Middleton; Miller; Minjarez; Moody; Morales; Morrison; Muñoz; Murphy; Murr; Neave; Nevárez; Noble; Oliverson; Ortega; Pacheco; Paddie; Parker; Patterson; Paul; Perez; Phelan; Price; Ramos; Raney; Raymond; Reynolds; Rodriguez; Romero; Rose; Rosenthal; Sanford; Schaefer; Shaheen; Sheffield; Sherman; Shine; Smith; Smithee; Springer; Stephenson; Stickland; Stucky; Swanson; Talarico; Thierry; Thompson, E.; Thompson, S.; Tinderholt; Toth; Turner, C.; Turner, J.; VanDeaver; Vo; Walle; White; Wilson; Wray; Wu; Zedler; Zerwas; Zwiener.

Absent, Excused — Johnson, E.

The invocation was offered by Representative Dutton as follows:

To the God of the Panhandle, to the God of the Rio Grande Valley, to the God of the High Plains, to the God of the Gulf Coast, to the God of the Piney Woods, to the God of Central Texas, to the God of West Texas, to the God of rural Texas, to the God of urban Texas, to the God of the poor, to the God of the powerful, we thank you for being one God. And today, we pray that our differences serve to keep Texas one under God. Amen.

The chair recognized Representative Sherman who led the house in the pledges of allegiance to the United States and Texas flags.

LEAVES OF ABSENCE GRANTED

The following member was granted leave of absence for today because of important business in the district:

E. Johnson on motion of Muñoz.

The following member was granted leave of absence for the remainder of today because of illness in the family:

S. Davis on motion of Geren.

RULES SUSPENDED

FLOOR PRIVILEGES

Representative Geren moved to suspend Rule 5, Section 11, of the House Rules to entitle guests privileges of the floor of the house during the Fallen Heroes Memorial Ceremony.

The motion prevailed.

SB 982 - REQUEST OF SENATE GRANTED
CONFERENCE COMMITTEE APPOINTED

On motion of Representative Zerwas, the house granted the request of the senate for the appointment of a Conference Committee on SB 982.

The chair announced the appointment of the following conference committee, on the part of the house, on SB 982: Zerwas, chair; Morrison, Phelan, Nevárez, and Geren.

FALLEN HEROES MEMORIAL CEREMONY

In accordance with the provisions of HCR 173, providing for a memorial session of the house of representatives at 10 a.m. today, to pay tribute to all members of the U.S. military killed in the line of duty, the Honorable Dennis Bonnen called the house of representatives to order.

Speaker Bonnen addressed the house and guests, speaking as follows:

Governor, Lieutenant Governor, members of the Texas House and the Texas Senate, and honored guests, on behalf of the Texas House, we welcome you to your great state Capitol for today's very important ceremony. We are eternally grateful for everyone here who has worn the uniform of the United States military and to those who are here in remembrance of the Texas soldiers and the loved ones who have never come home.

Today, on the Saturday before Memorial Day, we come together to honor the legions of men and women who have fought, bled, and offered their lives on the altar of freedom for a cause far greater than themselves. It is fitting that we gather here in our great Texas Capitol under the banner of our nation's flag to immortalize the sacrifices of these heroes. This chamber has long served as a battleground for democracy and the freedoms made possible by our departed heroes. As Texans and Americans, we benefit greatly from the causes they died for. Because of their sacrifice, we're able to freely express ideas, engage in the democratic process, and enact meaningful change for our fellow Texans each day. However imperfect that process can be, we know that it is only possible because of the patriots who over the course of history have paid the ultimate sacrifice for our liberty.

Hundreds of thousands of men and women with names known only to God have laid down their lives for that cause. Their legacies are written larger on our history. And though we never met them, there is much we know to be true. We know they dreamed of long, full lives just as we all do. They had goals to meet, plans to make, and loved ones that expected to see them again. Yet despite all of that, despite a lifetime of ambition, exists a moment in time where each of them decided to put their own dreams on hold in order to serve our country. So they gathered up their most cherished hopes in life and tucked them away, only to part with them forever as God called them home. For the love of country, these heroes accepted death. In that heroic act, their patriotism was immortalized. The gifts of freedom were purchased for us, and we were asked for nothing in return.

We can never repay the debts owed to these men and women, but it should never stop us from trying. When we come to this floor to do the people's work, let us never forget to earn what these great men and women lay their lives down for and create a state and nation worthy of their sacrifice. Today we honor those that fell from the line, never knowing the void that would be left behind. Our words are of small solace to the profound loss their families have suffered, but we shoulder their burden, and we work today and every day to ensure their legacies never perish. I want to thank all of you for being here today to honor their families and their memories.

Speaker Bonnen recognized Senator Donna Campbell who offered welcoming remarks.

Technical Sergeant Gina Lavender sang the national anthem as the assemblage rose for the presentation of the colors by Marines of Weapons Company, 1st Battalion, 23rd Marine Regiment.

Representative Tinderholt led the assemblage in the pledges of allegiance to the United States and Texas flags.

Representative Flynn introduced Lieutenant Colonel Harold Bender, Texas Army National Guard, who offered the invocation as follows:

Most gracious, heavenly Father, we remember with grateful hearts those who in the day of crisis considered the price of liberty worth paying, even at the cost of their very lives. If ever there was anything worthy of commemoration, heavenly Father, it is the courage, duty, and honor of those who gave the full measure of devotion to this country and the American way of life.

For the contributions signified by the handprints that line the streets of Hollywood Boulevard, the busts that stand in the halls of fame, and the titles that hang from buildings of commerce, government, and academia pale in comparison to the significance of the contribution of the names etched in stone marking the graves of those who died in freedom's defense. For any accomplishment of any notoriety in any field of endeavor owes its achievement in some part to those who gave their lives defending our nation. For those accomplishments were achieved within the protected walls of freedom that they've built and preserved. We owe our quality of life to the prosperity, security, and peace that is found within those walls standing on the foundation of the Constitution that they defended with their lives. No finer human souls have arisen from more hallowed battlegrounds than those who have laid down their lives that their brothers might live freely.

So on this Memorial Day weekend, Father, we give you thanks for and pay tribute to those men and women who demonstrated the ultimate devotion to duty. We honor their lives, their deeds, and their deaths and resolve anew on this occasion, as citizens of a nation founded upon faith in God almighty, to stand firm in keeping the peace and preserving the freedoms that others have given their lives to win. May their example be what inspires us to devote ourselves to labor and hasten the day when all people in all stages would experience those ideals that made this a nation worth dying for: That all men are created equal and are endowed by you, their creator, with the inalienable rights of life, liberty, and the pursuit of happiness.

Father, I pray that you will bless the loved ones of those whom we honor today. Fill them with the pride that is truly justified and a comfort that can come only from you. I make these petitions in the name of the one who laid down his life for us, the one in whom one has truly found life, liberty, and peace. In Jesus' name I pray. Amen.

Representative Flynn laid out and had read HCR 172, paying tribute to the U.S. military personnel from Texas who lost their lives in the line of duty.

The Armed Forces Medley was played as members and guests rose to their respective branch's song.

Senator Campbell introduced Lieutenant Governor Dan Patrick, who addressed the house and guests, speaking as follows:

Good morning. It's always a great honor to be here. And for the families who have lost loved ones serving our country, from all of our senators, our sincerest condolences. So many Texans have died in the fight for freedom and liberty, and I was reminded of that recently when I was at Normandy at our national cemetery above the beaches. We were given a name of a soldier who had died in the battle and given a quadrant in this massive cemetery---given a quadrant, and a row number, and an exact location to find that gravestone. And as I walked my way through the cemetery and I walked by all of the tombstones, I saw so many soldiers from Texas. I finally came upon the gravestone of the name I had, and it occurred to me that that family probably never knew where their son was laid to rest. They never visited that gravesite because in those days after World War II, the average family did not have the ability or the finances to fly halfway across the world to visit where their son was laid to rest. So I took a couple of photos, and I thought that through social media there must be a descendant somewhere in Texas. And we were able to actually link up during the session with that family who knew that name and had a chance to share with them where their relative had been laid to rest.

It's a very somber moment of knowing how many people have died for us––how many young people cut off those landing crafts that day were like Senator Hinojosa who fought in Vietnam or Senator Birdwell in Iraq, Senator Bob Hall who served, Senator Pat Fallon who served, and the other members of the Texas Senate and the Texas House who have served who are not with us here today––for our freedom and our liberty. Young men and young women who put themselves on the line not knowing what their future would hold for them. Would they come back home? And so many didn't come back home from so many wars. So when you grow tired and weary on the house floor or the senate floor, when you have a bad day and your bill didn't pass, or when someone debated you on the floor and you thought it was a tough day, remember how blessed you are to have the opportunity to serve this great state. Because you're here only because––as I am and all of those before us in this great legislative body––we are here because of the men and women who literally laid down their lives to protect this country and keep our country and our world free. Remember that. It makes you realize our job is really easy, even on the toughest of days.

Lieutenant Governor Patrick introduced Governor Abbott, who addressed the house and guests, speaking as follows:

Thank you, Governor Patrick and Speaker Bonnen. It's great to be back with you again. And Senator Campbell, I want to thank you as well as Representative Flynn, for your commitment to the men and women in the United States military. I also want to thank all the members here in the legislature and especially our honored guests. To elaborate a little bit on what you were talking about, Lieutenant Governor Patrick, one thing that gives me great pride is every time when we come in here and get to see the number of men and women who are part of this legislative body stand up and be recognized for your service to the United States of America. We applaud you and thank you for your service there but also appreciate your service here. I think you all can probably appreciate as well as anybody how fitting it is that we gather today in this Capitol to remember and honor those who gave their lives for our country. You know, for the past few months, this Capitol literally has been a battleground of democracy. The people who made that democratic process possible, the people who ensured that we would even be able to come in here and fight for the ideals of freedom, are the men and women who have worn the uniform of the United States military.

We are so grateful for every man and women who has ever served, but as we commemorate Memorial Day, we particularly remember those who made the ultimate sacrifice for our country. Today, we especially recognize Texas military members killed while serving since the last legislative session. We honor their dedication, we remember their sacrifice, and we celebrate their lives. Today we remember U.S. Army Master Sergeant Jonathan Dunbar of Austin, Texas; U.S. Army Sergeant Cameron Meddock of Spearman, Texas; U.S. Army Specialist Alexander Missildine of Tyler, Texas; U.S. Army Chief Warrant Officer 2 Lee M. Smith of Arlington, Texas; and U.S. Army Specialist Allen Levi Stigler Jr. of Arlington, Texas. The legacy of these extraordinary heroes lives on. It lives on because they served for a cause far greater then themselves. It's a cause we come in this chamber to fight for, and that is the cause of liberty. We honor those who gave their all to fight for that liberty, those who went into harm's way to protect the American way, and those who never came home. They stood in the face of dangers both known and unknown and protected us from all that threatened.

And for the families of the fallen, we realize that our words are small solace for the loss that you have suffered. We want you to know how much we treasure and honor what these sons and husbands and fathers and brothers have sacrificed for us all. And speaking on behalf of all Texans, I want you to know that we will work every single day to deserve what your family has sacrificed for us. We will continue on the homeland to fight for the freedom that they died for on lands across the globe. On this day, we say thank you, and we remember those who served our country and who died for liberty. May God bless our military, and may God forever bless the United States of America.

Governor Abbott presented a flag flown over the Capitol to family members of Master Sergeant Jonathan J. Dunbar, Army (Austin), as Senator Campbell and Representative Flynn read the names of additional fallen soldiers:

Sergeant Cameron A. Meddock, Army (Spearman); Specialist Alexander W. Missildine, Army (Tyler); Chief Warrant Officer 2 Lee M. Smith, Army (Arlington); Specialist Allen L. Stigler Jr., Army (Arlington).

The assemblage observed a moment of silence broken by "Amazing Grace" sung by Technical Sergeant Gina Lavender, followed by a 21-gun salute fired by the Texas Army National Guard Salute Battery.

"Taps" was played in the gallery by Sergeant Christopher Washington and a bagpipe processional was performed by Sergeant Eric Morgan on the floor of the house chamber.

Lieutenant Colonel Harold Bender, Texas Army National Guard, pronounced the benediction.

Representative Flynn addressed the house and guests, speaking as follows:

It is a great honor to pay tribute to those brave men on this day. For many of us who have served, it is a reminder of those people that we served with that didn't return. I want to thank all the members for being here today to memorialize these brave men forever in our hearts and in our state's memory. Without the sacrifices of men like the ones we honor here today, and many before them, we would not have the freedoms that we enjoy today. So I ask that you all remember the names of these men, your former constituents, in all that you do. May God bless each of you, the United States of America, and the great State of Texas.

Speaker Bonnen thanked the attendees of the ceremony with the following closing remarks:

Speaking on behalf of those who work and serve in our state Capitol, thank you to everyone who attended today's memorial ceremony. Memorial Day is a sombering reminder of the extraordinary cost of our freedom. It is our duty as a grateful nation to recognize those who have paid that price today and every day.

HOUSE AT EASE

At 10:50 a.m., the chair announced that the house would stand at ease pending the departure of guests.

The chair called the house to order at 11:06 a.m.

RECESS

Representative Krause moved that the house recess until 4:30 p.m. today.

The motion prevailed.

The house accordingly, at 11:07 a.m., recessed until 4:30 p.m. today.

AFTERNOON SESSION

The house met at 4:31 p.m. and was called to order by the speaker.

HR 2184 - NOTICE OF INTRODUCTION

Pursuant to Rule 13, Section 9(f), of the House Rules, the chair announced the introduction of HR 2184, suspending the limitations on the conferees for SB 2.

HR 2186 - NOTICE OF INTRODUCTION

Pursuant to Rule 13, Section 9(f), of the House Rules, the chair announced the introduction of HR 2186, suspending the limitations on the conferees for HB 3.

HR 2179 - NOTICE OF INTRODUCTION

Pursuant to Rule 13, Section 9(f), of the House Rules, the chair announced the introduction of HR 2179, suspending the limitations on the conferees for SB 500.

HR 2180 - NOTICE OF INTRODUCTION

Pursuant to Rule 13, Section 9(f), of the House Rules, the chair announced the introduction of HR 2180, suspending the limitations on the conferees for HB 1.

MESSAGES FROM THE SENATE

Messages from the senate were received at this time (see the addendum to the daily journal, Messages from the Senate, Message No. 1).

LEAVE OF ABSENCE GRANTED

The following member was granted leave of absence for the remainder of today because of important business:

J.D. Johnson on motion of C. Bell.

HCR 186 - ADOPTED
(by Darby)

The following privileged resolution was laid before the house:

HCR 186

WHEREAS, HB 3371 has been adopted by the senate and the house of representatives and is being prepared for enrollment; and

WHEREAS, The bill contains a technical error that should be corrected; now, therefore, be it

RESOLVED by the 86th Legislature of the State of Texas, That the enrolling clerk of the house of representatives be instructed to make the following correction to the enrolled version of HB 3371:

In SECTION 1 of the bill, strike added Section 250.009(c)(2), Local Government Code, and substitute the following:

(2) imposes installation or operational requirements for:

(A) the battery-charged fence that are inconsistent with the standards set by the International Electrotechnical Commission as published on June 29, 2018; or

(B) an alarm system described by Subsection (b); or

HCR 186 was adopted by (Record 1927): 146 Yeas, 0 Nays, 1 Present, not voting.

Yeas — Allen; Allison; Anchia; Anderson; Ashby; Bailes; Beckley; Bell, C.; Bell, K.; Bernal; Biedermann; Blanco; Bohac; Bonnen; Bowers; Buckley; Bucy; Burns; Burrows; Button; Cain; Calanni; Canales; Capriglione; Clardy; Cole; Coleman; Collier; Cortez; Craddick; Cyrier; Darby; Davis, Y.; Dean; Deshotel; Dominguez; Dutton; Farrar; Fierro; Flynn; Frank; Frullo; Geren; Gervin-Hawkins; Goldman; González, J.; González, M.; Goodwin; Guerra; Guillen; Gutierrez; Harless; Harris; Hefner; Hernandez; Herrero; Hinojosa; Holland; Howard; Huberty; Hunter; Israel; Johnson, J.E.; Kacal; King, K.; King, P.; King, T.; Klick; Krause; Kuempel; Lambert; Landgraf; Lang; Larson; Leach; Leman; Longoria; Lopez; Lozano; Lucio; Martinez; Martinez Fischer; Metcalf; Meyer; Meza; Middleton; Miller; Minjarez; Moody; Morales; Morrison; Muñoz; Murphy; Murr; Neave; Nevárez; Noble; Oliverson; Ortega; Pacheco; Paddie; Parker; Patterson; Paul; Perez; Phelan; Price; Ramos; Raney; Raymond; Reynolds; Rodriguez; Romero; Rose; Rosenthal; Sanford; Schaefer; Shaheen; Sheffield; Sherman; Shine; Smith; Smithee; Springer; Stephenson; Stickland; Stucky; Swanson; Talarico; Thierry; Thompson, E.; Thompson, S.; Tinderholt; Toth; Turner, C.; Turner, J.; VanDeaver; Vo; Walle; White; Wilson; Wray; Wu; Zedler; Zerwas; Zwiener.

Present, not voting — Mr. Speaker(C).

Absent, Excused — Davis, S.; Johnson, E.; Johnson, J.D.

HCR 187 - ADOPTED
(by Miller)

The following privileged resolution was laid before the house:

HCR 187

WHEREAS, HB 4712 has been adopted by the house of representatives and the senate and is being prepared for enrollment; and

WHEREAS, The bill contains a technical error that should be corrected; now, therefore, be it

RESOLVED by the 86th Legislature of the State of Texas, That the enrolling clerk of the house of representatives be instructed to make the following correction:

Strike the SECTION of the bill adding Section 8334.003, Special District Local Laws Code, as added by Floor Amendment No. 1 by Creighton.

HCR 187 was adopted by (Record 1928): 146 Yeas, 0 Nays, 1 Present, not voting.

Present, not voting — Mr. Speaker(C).

Absent, Excused — Davis, S.; Johnson, E.; Johnson, J.D.

HB 2402 - CONFERENCE COMMITTEE REPORT ADOPTED

Representative Geren submitted the following conference committee report on HB 2402:

Austin, Texas, May 23, 2019

The Honorable Dan Patrick

President of the Senate

The Honorable Dennis Bonnen

Speaker of the House of Representatives

Sirs: We, your conference committee, appointed to adjust the differences between the senate and the house of representatives on HB 2402 have had the same under consideration, and beg to report it back with the recommendation that it do pass in the form and text hereto attached.

Fallon

Geren

Alvarado

Kuempel

Flores

Goldman

Hancock

T. King

Paxton

On the part of the senate

On the part of the house

HB 2402, A bill to be entitled An Act relating to the eligibility of certain events to receive funding through the Major Events Reimbursement Program.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Sections 5A(a)(4) and (5), Chapter 1507 (SB 456), Acts of the 76th Legislature, Regular Session, 1999 (Article 5190.14, Vernon's Texas Civil Statutes), are amended to read as follows:

(4) "Event" means a Super Bowl, a National Collegiate Athletic Association Final Four tournament game, the National Basketball Association All-Star Game, the X Games, the National Hockey League All-Star Game, the Major League Baseball All-Star Game, a game of the National Collegiate Athletic Association Bowl Championship Series or its successor or a National Collegiate Athletic Association Division I Football Bowl Subdivision postseason playoff or championship game, a Big 12 Football Conference Championship game, the National Collegiate Athletic Association men's or women's lacrosse championships, a World Cup Soccer game, the World Cup soccer tournament, the Major League Soccer All-Star Game, the Major League Soccer Cup, the Professional Rodeo Cowboys Association National Finals Rodeo, an Elite Rodeo Association World Championship, the United States Open Championship, the World Games, a national collegiate championship of an amateur sport sanctioned by the national governing body of the sport that is recognized by the United States Olympic Committee, an Olympic activity, including a Junior or Senior activity, training program, or feeder program sanctioned by the United States Olympic Committee's Community Olympic Development Program, the Amateur Athletic Union Junior Olympic Games, a mixed martial arts championship, a World Wrestling Entertainment WrestleMania event, the Breeders' Cup World Championships, a Formula One automobile race, the Moto Grand Prix of the United States, the National Association for Stock Car Auto Racing (NASCAR) All-Star Race, the season-ending Championship Race for the National Association for Stock Car Auto Racing (NASCAR), the Academy of Country Music Awards, the National Cutting Horse Association Triple Crown, a championship event in the National Reined Cow Horse Association (NRCHA) Championship Series, a CONVRG conference, a national political convention of the Republican National Committee or the Democratic National Committee, a presidential general election debate, or the largest event held each year at a sports entertainment venue in this state with a permanent seating capacity, including grandstand and premium seating, of not less than 125,000. The term includes any activities related to or associated with an event.

(5) "Site selection organization" means:

(A) the National Football League, the National Collegiate Athletic Association, the Big 12 Conference, the National Basketball Association, ESPN or an affiliate, the National Hockey League, Major League Baseball, the Federation Internationale de Football Association (FIFA), the International World Games Association, the National Association for Stock Car Auto Racing (NASCAR), Dorna Sports, the Amateur Athletic Union, the Professional Rodeo Cowboys Association, the Elite Rodeo Association, Major League Soccer, the United States Golf Association, or the United States Olympic Committee;

(B) the national governing body of a sport that is recognized by the United States Olympic Committee, the National Thoroughbred Racing Association, Formula One Management Limited, or the Federation Internationale de l'Automobile;

(D) the National Cutting Horse Association;

(E) the National Reined Cow Horse Association (NRCHA);

(F) Encore Live;

(G) the Republican National Committee or the Democratic National Committee;

(H) [~~(F)~~] the Ultimate Fighting Championship;

(I) World Wrestling Entertainment; or

(J) [~~(G)~~] the Commission on Presidential Debates.

SECTION 2. This Act takes effect immediately if it receives a vote of two-thirds of all the members elected to each house, as provided by Section 39, Article III, Texas Constitution. If this Act does not receive the vote necessary for immediate effect, this Act takes effect September 1, 2019.

Representative Geren moved to adopt the conference committee report on HB 2402.

The motion to adopt the conference committee report on HB 2402 prevailed by (Record 1929): 122 Yeas, 18 Nays, 1 Present, not voting.

Yeas — Allen; Allison; Anchia; Anderson; Ashby; Bailes; Beckley; Bell, C.; Bell, K.; Bernal; Biedermann; Blanco; Bonnen; Bowers; Buckley; Bucy; Burrows; Button; Calanni; Canales; Capriglione; Clardy; Cole; Coleman; Collier; Cortez; Craddick; Cyrier; Darby; Davis, Y.; Dean; Deshotel; Dominguez; Dutton; Farrar; Fierro; Flynn; Frank; Frullo; Geren; Gervin-Hawkins; Goldman; González, J.; González, M.; Goodwin; Guerra; Guillen; Gutierrez; Harless; Harris; Hefner; Hernandez; Herrero; Hinojosa; Holland; Howard; Huberty; Hunter; Israel; Johnson, J.E.; Kacal; King, K.; King, P.; King, T.; Klick; Krause; Kuempel; Lambert; Larson; Leach; Leman; Longoria; Lopez; Lozano; Lucio; Martinez; Martinez Fischer; Metcalf; Meyer; Meza; Minjarez; Moody; Morales; Morrison; Murphy; Nevárez; Noble; Ortega; Pacheco; Paddie; Parker; Perez; Phelan; Price; Ramos; Raney; Raymond; Rodriguez; Rose; Rosenthal; Sanford; Sheffield; Sherman; Shine; Smith; Smithee; Springer; Stephenson; Stucky; Talarico; Thierry; Thompson, S.; Toth; Turner, C.; Turner, J.; VanDeaver; Vo; Walle; White; Wray; Wu; Zerwas.

Nays — Bohac; Burns; Cain; Landgraf; Lang; Middleton; Miller; Muñoz; Murr; Oliverson; Patterson; Paul; Shaheen; Stickland; Swanson; Thompson, E.; Tinderholt; Wilson.

Present, not voting — Mr. Speaker(C).

Absent, Excused — Davis, S.; Johnson, E.; Johnson, J.D.

Absent — Neave; Reynolds; Romero; Schaefer; Zedler; Zwiener.

STATEMENTS OF VOTE

When Record No. 1929 was taken, I was shown voting yes. I intended to vote no.

Ashby

When Record No. 1929 was taken, I was shown voting yes. I intended to vote no.

Hefner

When Record No. 1929 was taken, I was shown voting yes. I intended to vote no.

Holland

When Record No. 1929 was taken, I was shown voting yes. I intended to vote no.

Leman

When Record No. 1929 was taken, I was in the house but away from my desk. I would have voted yes.

Neave

When Record No. 1929 was taken, I was in the house but away from my desk. I would have voted no.

Romero

When Record No. 1929 was taken, I was in the house but away from my desk. I would have voted no.

Schaefer

When Record No. 1929 was taken, I was shown voting yes. I intended to vote no.

White

When Record No. 1929 was taken, my vote failed to register. I would have voted no.

Zedler

When Record No. 1929 was taken, I was in the house but away from my desk. I would have voted yes.

Zwiener

SB 18 - CONFERENCE COMMITTEE REPORT ADOPTED

Representative Geren submitted the conference committee report on SB 18.

Representative Geren moved to adopt the conference committee report on SB 18.

The motion to adopt the conference committee report on SB 18 prevailed by (Record 1930): 106 Yeas, 37 Nays, 1 Present, not voting.

Yeas — Allen; Allison; Anderson; Ashby; Bailes; Bell, C.; Bell, K.; Biedermann; Bohac; Bonnen; Buckley; Burns; Burrows; Button; Cain; Calanni; Capriglione; Clardy; Craddick; Cyrier; Darby; Davis, Y.; Dean; Deshotel; Dutton; Farrar; Fierro; Flynn; Frank; Frullo; Geren; Goldman; Guerra; Guillen; Gutierrez; Harless; Harris; Hefner; Hernandez; Holland; Huberty; Hunter; Kacal; King, K.; King, P.; King, T.; Klick; Krause; Kuempel; Lambert; Landgraf; Lang; Larson; Leach; Leman; Longoria; Lozano; Lucio; Martinez; Metcalf; Meza; Middleton; Miller; Moody; Morrison; Murphy; Murr; Neave; Nevárez; Noble; Oliverson; Pacheco; Paddie; Parker; Patterson; Paul; Phelan; Price; Raney; Raymond; Reynolds; Romero; Sanford; Schaefer; Shaheen; Sheffield; Shine; Smith; Smithee; Springer; Stephenson; Stickland; Stucky; Swanson; Thompson, E.; Tinderholt; Toth; Turner, C.; Turner, J.; VanDeaver; White; Wilson; Wray; Wu; Zedler; Zerwas.

Nays — Anchia; Beckley; Bernal; Blanco; Bowers; Canales; Cole; Coleman; Collier; Cortez; Dominguez; Gervin-Hawkins; González, J.; González, M.; Goodwin; Herrero; Hinojosa; Howard; Israel; Lopez; Martinez Fischer; Minjarez; Morales; Muñoz; Ortega; Perez; Ramos; Rodriguez; Rose; Rosenthal; Sherman; Talarico; Thierry; Thompson, S.; Vo; Walle; Zwiener.

Present, not voting — Mr. Speaker(C).

Absent, Excused — Davis, S.; Johnson, E.; Johnson, J.D.

Absent — Bucy; Johnson, J.E.; Meyer.

STATEMENTS OF VOTE

When Record No. 1930 was taken, my vote failed to register. I would have voted no.

J.E. Johnson

When Record No. 1930 was taken, I was in the house but away from my desk. I would have voted yes.

Meyer

When Record No. 1930 was taken, I was shown voting yes. I intended to vote no.

Romero

SB 1511 - CONFERENCE COMMITTEE REPORT ADOPTED

Representative Cyrier submitted the conference committee report on SB 1511.

Representative Cyrier moved to adopt the conference committee report on SB 1511.

The motion to adopt the conference committee report on SB 1511 prevailed by (Record 1931): 144 Yeas, 0 Nays, 2 Present, not voting.

Yeas — Allen; Allison; Anchia; Anderson; Ashby; Bailes; Beckley; Bell, C.; Bell, K.; Bernal; Biedermann; Blanco; Bohac; Bonnen; Bowers; Buckley; Bucy; Burns; Burrows; Button; Cain; Calanni; Canales; Capriglione; Clardy; Cole; Coleman; Collier; Cortez; Craddick; Cyrier; Darby; Davis, Y.; Dean; Dominguez; Dutton; Farrar; Fierro; Flynn; Frank; Frullo; Geren; Gervin-Hawkins; Goldman; González, J.; González, M.; Goodwin; Guerra; Guillen; Gutierrez; Harless; Harris; Hefner; Hernandez; Herrero; Hinojosa; Holland; Howard; Huberty; Hunter; Israel; Johnson, J.E.; King, K.; King, P.; King, T.; Klick; Krause; Kuempel; Lambert; Landgraf; Lang; Larson; Leach; Leman; Longoria; Lopez; Lozano; Lucio; Martinez; Martinez Fischer; Metcalf; Meyer; Meza; Middleton; Miller; Minjarez; Moody; Morales; Morrison; Muñoz; Murphy; Murr; Neave; Nevárez; Noble; Oliverson; Ortega; Pacheco; Paddie; Parker; Patterson; Paul; Perez; Phelan; Price; Ramos; Raney; Raymond; Reynolds; Rodriguez; Romero; Rose; Rosenthal; Sanford; Schaefer; Shaheen; Sheffield; Sherman; Shine; Smith; Smithee; Springer; Stephenson; Stickland; Stucky; Swanson; Talarico; Thierry; Thompson, E.; Thompson, S.; Tinderholt; Toth; Turner, C.; Turner, J.; VanDeaver; Vo; Walle; White; Wilson; Wray; Wu; Zedler; Zerwas; Zwiener.

Present, not voting — Mr. Speaker(C); Deshotel.

Absent, Excused — Davis, S.; Johnson, E.; Johnson, J.D.

Absent — Kacal.

HB 812 - CONFERENCE COMMITTEE REPORT ADOPTED

Representative White submitted the following conference committee report on HB 812:

Austin, Texas, May 21, 2019

The Honorable Dan Patrick

President of the Senate

The Honorable Dennis Bonnen

Speaker of the House of Representatives

Sirs: We, your conference committee, appointed to adjust the differences between the senate and the house of representatives on HB 812 have had the same under consideration, and beg to report it back with the recommendation that it do pass in the form and text hereto attached.

Whitmire

White

Buckingham

Allen

Huffman

Bailes

Miles

Neave

Perry

Stephenson

On the part of the senate

On the part of the house

HB 812, A bill to be entitled An act relating to the amount of the health care services fee paid by certain inmates.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 501.063(a)(1), Government Code, is amended to read as follows:

(1) An inmate confined in a facility operated by or under contract with the department, other than a halfway house, who initiates a visit to a health care provider shall pay a health care services fee to the department in the amount of $13.55 per visit, except that an inmate may not be required to pay more than $100 during a state fiscal year [~~$100~~].

SECTION 2. Section 501.063(a)(2), Government Code, is repealed.

SECTION 3. This Act takes effect September 1, 2019.

Representative White moved to adopt the conference committee report on HB 812.

The motion to adopt the conference committee report on HB 812 prevailed by (Record 1932): 144 Yeas, 0 Nays, 1 Present, not voting.

Yeas — Allen; Allison; Anchia; Anderson; Ashby; Bailes; Beckley; Bell, C.; Bell, K.; Bernal; Biedermann; Blanco; Bohac; Bonnen; Bowers; Buckley; Bucy; Burns; Burrows; Button; Cain; Calanni; Canales; Capriglione; Clardy; Cole; Coleman; Collier; Cortez; Craddick; Cyrier; Darby; Davis, Y.; Dean; Deshotel; Dominguez; Dutton; Farrar; Fierro; Flynn; Frank; Frullo; Geren; Gervin-Hawkins; Goldman; González, J.; González, M.; Goodwin; Guerra; Guillen; Gutierrez; Harless; Harris; Hefner; Hernandez; Herrero; Hinojosa; Holland; Howard; Huberty; Hunter; Israel; Johnson, J.E.; Kacal; King, K.; King, P.; King, T.; Klick; Krause; Kuempel; Lambert; Landgraf; Lang; Larson; Leach; Leman; Longoria; Lopez; Lozano; Lucio; Martinez; Martinez Fischer; Metcalf; Meyer; Meza; Middleton; Miller; Minjarez; Morales; Morrison; Muñoz; Murphy; Murr; Neave; Nevárez; Noble; Oliverson; Ortega; Pacheco; Paddie; Parker; Patterson; Paul; Perez; Phelan; Price; Ramos; Raney; Raymond; Reynolds; Rodriguez; Romero; Rose; Rosenthal; Sanford; Shaheen; Sheffield; Sherman; Shine; Smith; Smithee; Springer; Stephenson; Stickland; Stucky; Swanson; Talarico; Thierry; Thompson, E.; Thompson, S.; Tinderholt; Toth; Turner, C.; Turner, J.; VanDeaver; Vo; Walle; White; Wilson; Wray; Wu; Zedler; Zerwas; Zwiener.

Present, not voting — Mr. Speaker(C).

Absent, Excused — Davis, S.; Johnson, E.; Johnson, J.D.

Absent — Moody; Schaefer.

STATEMENT OF VOTE

When Record No. 1932 was taken, I was in the house but away from my desk. I would have voted yes.

Schaefer

SB 568 - CONFERENCE COMMITTEE REPORT ADOPTED

Representative G. Bonnen submitted the conference committee report on SB 568.

Representative G. Bonnen moved to adopt the conference committee report on SB 568.

The motion to adopt the conference committee report on SB 568 prevailed by (Record 1933): 131 Yeas, 10 Nays, 1 Present, not voting.

Yeas — Allen; Allison; Anchia; Anderson; Ashby; Bailes; Beckley; Bell, C.; Bell, K.; Bernal; Biedermann; Blanco; Bohac; Bonnen; Bowers; Buckley; Bucy; Burns; Burrows; Button; Calanni; Canales; Capriglione; Clardy; Cole; Coleman; Collier; Cortez; Craddick; Cyrier; Darby; Dean; Deshotel; Dominguez; Dutton; Farrar; Fierro; Flynn; Frullo; Geren; Gervin-Hawkins; Goldman; González, J.; González, M.; Goodwin; Guerra; Guillen; Gutierrez; Harris; Hernandez; Herrero; Hinojosa; Holland; Howard; Huberty; Hunter; Israel; Johnson, J.E.; Kacal; King, K.; King, P.; King, T.; Klick; Kuempel; Lambert; Landgraf; Larson; Leach; Leman; Longoria; Lopez; Lozano; Lucio; Martinez; Martinez Fischer; Metcalf; Meyer; Meza; Miller; Minjarez; Moody; Morales; Morrison; Muñoz; Murphy; Nevárez; Oliverson; Ortega; Pacheco; Paddie; Parker; Paul; Perez; Phelan; Price; Ramos; Raney; Raymond; Reynolds; Rodriguez; Rose; Rosenthal; Sanford; Shaheen; Sheffield; Sherman; Shine; Smith; Smithee; Springer; Stephenson; Stickland; Stucky; Swanson; Talarico; Thierry; Thompson, E.; Thompson, S.; Tinderholt; Toth; Turner, C.; Turner, J.; VanDeaver; Vo; Walle; White; Wray; Wu; Zedler; Zerwas; Zwiener.

Nays — Cain; Frank; Harless; Hefner; Krause; Lang; Murr; Noble; Patterson; Wilson.

Present, not voting — Mr. Speaker(C).

Absent, Excused — Davis, S.; Johnson, E.; Johnson, J.D.

Absent — Davis, Y.; Middleton; Neave; Romero; Schaefer.

STATEMENTS OF VOTE

When Record No. 1933 was taken, I was in the house but away from my desk. I would have voted yes.

Y. Davis

When Record No. 1933 was taken, I was in the house but away from my desk. I would have voted yes.

Middleton

When Record No. 1933 was taken, I was in the house but away from my desk. I would have voted yes.

Neave

When Record No. 1933 was taken, I was in the house but away from my desk. I would have voted yes.

Romero

When Record No. 1933 was taken, I was in the house but away from my desk. I would have voted no.

Schaefer

When Record No. 1933 was taken, I was shown voting yes. I intended to vote no.

Zedler

HB 4749 - CONFERENCE COMMITTEE REPORT ADOPTED

Representative Schaefer submitted the following conference committee report on HB 4749:

Austin, Texas, May 24, 2019

The Honorable Dan Patrick

President of the Senate

The Honorable Dennis Bonnen

Speaker of the House of Representatives

Sirs: We, your conference committee, appointed to adjust the differences between the senate and the house of representatives on HB 4749 have had the same under consideration, and beg to report it back with the recommendation that it do pass in the form and text hereto attached.

Hughes

Schaefer

Nichols

Hefner

Rodriguez

Shaheen

Schwertner

Lang

Fallon

On the part of the senate

On the part of the house

HB 4749, A bill to be entitled An Act relating to the creation of the Rose City Municipal Utility District; granting a limited power of eminent domain; providing authority to issue bonds; providing authority to impose assessments and fees.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Subtitle F, Title 6, Special District Local Laws Code, is amended by adding Chapter 7958 to read as follows:

CHAPTER 7958. ROSE CITY MUNICIPAL UTILITY DISTRICT

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 7958.0101. DEFINITIONS. In this chapter:

(1) "Board" means the district's board of directors.

(2) "City" means the City of Tyler.

(3) "Commission" means the Texas Commission on Environmental Quality.

(4) "Director" means a board member.

(5) "District" means the Rose City Municipal Utility District.

(6) "Utility commission" means the Public Utility Commission of Texas.

Sec. 7958.0102. NATURE OF DISTRICT. The district is a municipal utility district created under Section 59, Article XVI, Texas Constitution.

Sec. 7958.0103. CONFIRMATION ELECTION REQUIRED. The initial directors appointed under Section 7958.0201 shall hold an election to confirm the creation of the district as provided by Section 49.102, Water Code.

Sec. 7958.0104. CONSENT OF MUNICIPALITY REQUIRED. The temporary directors may not hold an election under Section 7958.0103 until each municipality in whose corporate limits or extraterritorial jurisdiction the district is located has consented by ordinance or resolution to the creation of the district and to the inclusion of land in the district.

Sec. 7958.0105. FINDINGS OF PUBLIC PURPOSE AND BENEFIT. (a) The district is created to serve a public purpose and benefit.

(b) The district is created to accomplish the purposes of a municipal utility district as provided by general law and Section 59, Article XVI, Texas Constitution.

Sec. 7958.0106. INITIAL DISTRICT TERRITORY. (a) The district is initially composed of the territory described by Section 2 of the Act enacting this chapter.

(b) The boundaries and field notes contained in Section 2 of the Act enacting this chapter form a closure. A mistake made in the field notes or in copying the field notes in the legislative process does not affect the district's:

(1) organization, existence, or validity;

(2) right to issue any type of bond for the purposes for which the district is created or to pay the principal of and interest on a bond; or

(3) legality or operation.

SUBCHAPTER B. BOARD OF DIRECTORS

Sec. 7958.0201. GOVERNING BODY; TERMS. (a) The district is governed by a board of five directors appointed as follows:

(1) three directors appointed by the city; and

(2) two directors appointed by the Smith County Commissioners Court.

(b) Directors serve staggered four-year terms.

(c) The appointing entities shall appoint the initial directors not later than September 1, 2020. The initial directors appointed under Subsection (a)(1) serve a four-year term, and the directors appointed under Subsection (a)(2) serve a two-year term. This subsection expires September 1, 2023.

Sec. 7958.0202. QUALIFICATIONS OF DIRECTORS. (a) Notwithstanding any other law:

(1) an officer or employee of the city may serve as a director of the district; and

(2) a member of the governing body of the city may serve as a director of the district.

(b) A person who qualifies to serve as a director is qualified to participate in all votes pertaining to the business of the district, subject to Section 49.058, Water Code.

Sec. 7958.0203. COMPENSATION; REIMBURSEMENT. A director serves without compensation but may receive reimbursement for actual expenses reasonably and necessarily incurred while engaging in activities on behalf of the district.

SUBCHAPTER C. POWERS AND DUTIES

Sec. 7958.0301. GENERAL POWERS AND DUTIES. The district has the powers and duties necessary to accomplish the purposes for which the district is created.

Sec. 7958.0302. MUNICIPAL UTILITY DISTRICT POWERS AND DUTIES. (a) Subject to Subsection (b), the district has the powers and duties provided by the general law of this state, including Chapters 49 and 54, Water Code, applicable to municipal utility districts created under Section 59, Article XVI, Texas Constitution.

(b) The district may provide only sewer and wastewater services, including the acquisition, construction, contracting, financing, maintenance, operation, and planning of sewer and wastewater facilities or systems.

Sec. 7958.0303. COMPLIANCE WITH MUNICIPAL CONSENT ORDINANCE OR RESOLUTION. The district shall comply with all applicable requirements of any ordinance or resolution that is adopted under Section 54.016 or 54.0165, Water Code, and that consents to the creation of the district or to the inclusion of land in the district.

Sec. 7958.0304. LIMITED POWER OF EMINENT DOMAIN. The district may exercise the power of eminent domain only for the limited purpose of acquiring or constructing sewer and wastewater facilities.

Sec. 7958.0305. CONTRACTING. The district may contract with a political subdivision or private operator to operate and maintain the district's sewer and wastewater facilities.

Sec. 7958.0306. CERTIFICATE OF PUBLIC CONVENIENCE AND NECESSITY. (a) Notwithstanding Chapter 13, Water Code, the district may provide sewer and wastewater service without a certificate of convenience and necessity.

(b) Not later than the 30th day before the date the district intends to provide sewer and wastewater service, the district must notify the utility commission and each retail public utility that provides sewer and wastewater services in the district.

(c) If the district does not acquire a retail public utility that holds a certificate of public convenience and necessity for providing sewer and wastewater service in the district territory, the district shall:

(1) not later than the 30th day after the date the district begins providing sewer and wastewater service, petition the utility commission to decertify the territory inside the district of the existing certificate holder; and

(2) compensate the existing certificate holder in an amount determined by the utility commission.

Sec. 7958.0307. PROFESSIONAL SERVICES. The district may contract with a political subdivision to provide professional services for the district, including legal services related to the exercise of eminent domain.

Sec. 7958.0308. SUPERMAJORITY VOTE REQUIRED FOR CERTAIN ACTIONS. At least four board members must vote in favor of a resolution before the board may:

(1) increase rates or assessments by more than five percent;

(2) incur debt or increase the amount of debt that the district has outstanding; or

(3) order a dissolution election under Section 7958.0601.

SUBCHAPTER D. GENERAL FINANCIAL PROVISIONS

Sec. 7958.0401. ELECTIONS REGARDING BONDS. The district may issue, without an election, bonds and other obligations secured by revenue other than ad valorem taxes.

Sec. 7958.0402. PROHIBITION ON IMPOSITION OF TAXES. (a) The district may not impose an ad valorem tax for any purpose.

(b) Section 49.107, Water Code, does not apply to the district.

SUBCHAPTER E. BONDS AND OTHER OBLIGATIONS

Sec. 7958.0501. AUTHORITY TO ISSUE BONDS AND OTHER OBLIGATIONS. The district may issue bonds or other obligations payable wholly or partly from impact fees, revenue, contract payments, grants, or other district money, or any combination of those sources, to pay for any authorized district purpose.

SUBCHAPTER F. DISSOLUTION BY ELECTION

Sec. 7958.0601. DISSOLUTION ELECTION CALLED BY BOARD. The board may order an election on the question of dissolving the district and transferring the district's assets and obligations to another political subdivision of the state, if the board concludes after a public hearing held on the issue that it is in the best interest of the district's residents and of the persons served by the district for the district to dissolve.

Sec. 7958.0602. DISSOLUTION ELECTION CALLED BY PETITION. The board shall order an election on the question of dissolving the district and transferring the district's assets and obligations to another political subdivision of the state if the board receives a petition requesting an election on that question. The petition must be signed by at least 15 percent of the district's registered voters.

Sec. 7958.0603. ELECTION ORDER. An order calling an election held under this subchapter must state:

(1) the nature of the election, including the proposition that is to appear on the ballot;

(2) the date of the election;

(3) the hours during which the polls will be open; and

(4) the location of the polling places.

Sec. 7958.0604. NOTICE OF DISSOLUTION ELECTION. (a) The board shall give notice of an election ordered under this subchapter by publishing a substantial copy of the election order in a newspaper with general circulation in the district once a week for two consecutive weeks.

(b) The first publication must appear not later than the 30th day before the date set for the election.

Sec. 7958.0605. APPLICABILITY OF UNIFORM ELECTION DATES. Section 41.001, Election Code, does not apply to an election held under this subchapter.

Sec. 7958.0606. ELECTION RESULTS. (a) If a majority of the votes in an election held under this subchapter favor dissolution, the board shall order that the district be dissolved.

(b) If a majority of the votes in an election held under this subchapter do not favor dissolution, the board shall continue to administer the district, and another election on the question of dissolution may not be held before the first anniversary of the date of the most recent election held on the question of dissolving the district.

Sec. 7958.0607. TRANSFER OF ASSETS, OBLIGATIONS, AND PROVISION OF SERVICES. (a) As soon as practicable following the issuance of an order under Section 7958.0606(a), the board shall:

(1) begin the process of transferring the district's assets and obligations to one or more political subdivisions in a fair and equitable manner; and

(2) administer the property, assets, and debts of the district until all money has been disposed of and all district debts have been paid or settled.

(b) If the district provides services, the board or a receiver appointed under Section 7958.0608 shall make arrangements for the uninterrupted provision of services.

Sec. 7958.0608. RECEIVER. If the executive director of the commission determines that the board has failed to make substantial progress in transferring the district's assets and obligations to one or more political subdivisions in a fair and equitable manner, the executive director shall appoint a receiver for the district.

Sec. 7958.0609. REPORT; DISSOLUTION ORDER. (a) After the district has transferred all of the district's assets and obligations and has arranged for the continued provision of services provided by the district, if applicable, the board shall file a written report with the commission summarizing the board's actions in dissolving the district.

(b) Not later than the 10th day after the date the commission receives the report and determines that the requirements of this subchapter have been fulfilled, the commission shall enter an order dissolving the district.

SUBCHAPTER G. ANNEXATION OF LAND

Sec. 7958.0701. GENERAL ANNEXATION PROVISIONS. (a) Except as provided by this section, Subchapter J, Chapter 49, Water Code, applies to the district.

(b) In addition to the requirements of Section 49.302(b), Water Code, the petition must also be signed by a majority of registered voters in the defined area to be annexed.

Sec. 7958.0702. RETALIATION FOR ANNEXATION DISAPPROVAL PROHIBITED. (a) The disapproval of the proposed annexation of an area by the district does not affect any existing legal obligation of the district to continue to provide services in the area, including wastewater services.

(b) The district may not initiate a rate proceeding solely because of the disapproval of a proposed annexation of an area.

SECTION 2. The Rose City Municipal Utility District initially includes all the territory contained in the following area:

BEING a 21,118 acre tract of land situated in Smith County, Texas, said 21,118 acre tract being more completely described by metes and bounds as follows:

BEGINNING at the intersection of the centerline of State Highway No. 155 with State Highway 57 (West Grande Boulevard);

THENCE Easterly with the centerline of West Grande Boulevard to its intersection with F.M. 2493 (Old Jacksonville Highway);

THENCE Southwesterly with the centerline of F.M. 2493 (Old Jacksonville Highway) to its intersection with Three Lakes Parkway;

THENCE Southeasterly with the centerline of Three Lakes Parkway to its intersection with Dueling Oaks;

THENCE Easterly with the centerline of Dueling Oaks to its intersection with Hollytree Drive;

THENCE Southwesterly with the centerline of Hollytree Drive to its intersection with Maple Lane;

THENCE Southerly with the centerline of Maple Lane to its intersection with West Cumberland Road;

THENCE Easterly with the centerline of West Cumberland Road to its intersection with U.S. Highway 69 (South Broadway Ave.);

THENCE Southerly with the centerline of U.S. Highway 69 (South Broadway Ave.) to its intersection with Loop 49;

THENCE Northeasterly with the centerline of Loop 49 to its intersection with F.M. 756 (South Paluxy Drive);

THENCE Southeasterly with the centerline of F.M. 756 (South Paluxy Drive) to its intersection with F.M. 346;

THENCE Southwesterly with the centerline of F.M. 346 to its intersection with County Road 15;

THENCE Southerly with the centerline of County Road 15 to its intersection with County Road 129;

THENCE Northeasterly with the centerline of County Road 129 to its intersection with County Road 112;

THENCE with the centerline of County Road 112 to its intersection with County Road 113;

THENCE with the centerline of County Road 113 to its intersection with County Road 152;

THENCE Southwesterly with the centerline of County Road 152 to its intersection with U.S. Highway No. 69;

THENCE Southeasterly with the centerline of U.S. Highway No. 69 to its intersection with the South boundary line of Liberty Utilities (Woodmark) CCN 20679 as shown by digital map on 3-08-2019 per the Public Utility Commission of Texas website, same being on the East boundary line of the City of Bullard, Texas, Sewer CCN 20903 as shown by digital map on 3-08-2019 per the Public Utility Commission of Texas website;

THENCE Southwesterly with said East boundary line of Bullard, Texas CCN 20903 and South boundary line of Liberty Utilities (Woodmark) CCN 20679 to its intersection with Tyler and Bullard ETJ Agreement Boundary;

THENCE South 87° 24 min 9 sec West with a distance of 228.46 ft;

THENCE South 87° 15 min 49 sec West with a distance of 1,411.05 ft;

THENCE North 3° 23 min 18 sec West with a distance of 116.67 ft;

THENCE South 57° 12 min 37 sec West with a distance of 519.18 ft to its intersection with F. M. 2493;

THENCE Northwesterly with the centerline of F.M. 2493 to an ell corner in the West line of said CCN 20679;

THENCE West continuing with the West boundary line of said CCN 20679 to its intersection with the centerline of County Road 173 and being the Westerly Southwest corner of said CCN 20679;

THENCE Northerly with the centerline of County Road 173 to its intersection with the centerline of County Road 175;

THENCE Westerly with the centerline of County Road 175 to its intersection with the centerline of F.M. 346;

THENCE Westerly with the centerline of F.M. 346 to its intersection with the centerline of County Road 185 (Oak Hollow Road);

THENCE Westerly with the centerline of County Road 185 to its intersection with the centerline of County Road 178 (Old Palestine Highway);

THENCE Northeasterly with the centerline of County Road 178 (Old Palestine Highway) to its intersection with the centerline of County Road 168 (Saline Creek Road);

THENCE Northeasterly with the centerline of County Road 168 to its intersection with the centerline of County Road 178 (Jonestown Road);

THENCE North with the centerline of County Road 178 to its intersection with the centerline of County Road 192 (Old Noonday Road);

THENCE Northeasterly with the centerline of County Road 192 to its intersection with the centerline of County Road 193 (Taylor Road);

THENCE Northwesterly with the centerline of County Road 193 to its intersection with the centerline of State Highway No. 155;

THENCE Northeasterly with the centerline of State Highway No. 155 to the place of beginning containing 21,118 acres of land, plus or minus.

"This document was prepared under 22 TAC §663.21, does not reflect the results of an on the ground survey, and is not to be used to convey or establish interests in real property except those rights and interests implied or established by the creation or reconfiguration of the boundary of the political subdivision for which it was prepared."

The acreage shown were calculated from aerial photography and are an approximation only.

SECTION 3. (a) The legal notice of the intention to introduce this Act, setting forth the general substance of this Act, has been published as provided by law, and the notice and a copy of this Act have been furnished to all persons, agencies, officials, or entities to which they are required to be furnished under Section 59, Article XVI, Texas Constitution, and Chapter 313, Government Code.

(b) The governor, one of the required recipients, has submitted the notice and Act to the Texas Commission on Environmental Quality.

(c) The Texas Commission on Environmental Quality has filed its recommendations relating to this Act with the governor, the lieutenant governor, and the speaker of the house of representatives within the required time.

(d) All requirements of the constitution and laws of this state and the rules and procedures of the legislature with respect to the notice, introduction, and passage of this Act are fulfilled and accomplished.

SECTION 4. (a) Section 7958.0304, Special District Local Laws Code, as added by Section 1 of this Act, takes effect only if this Act receives a two-thirds vote of all the members elected to each house.

(b) If this Act does not receive a two-thirds vote of all the members elected to each house, Subchapter C, Chapter 7958, Special District Local Laws Code, as added by Section 1 of this Act, is amended by adding Section 7958.0304 to read as follows:

Sec. 7958.0304. NO EMINENT DOMAIN POWER. The district may not exercise the power of eminent domain.

(c) This section is not intended to be an expression of a legislative interpretation of the requirements of Section 17(c), Article I, Texas Constitution.

SECTION 5. This Act takes effect September 1, 2019.

Representative Schaefer moved to adopt the conference committee report on HB 4749.

The vote of the house was taken on the motion to adopt the conference committee report on HB 4749 and the vote was announced yeas 69, nays 70.

A verification of the vote was requested and was granted.

The roll of those voting yea and nay was again called and the verified vote resulted, as follows (Record 1934): 75 Yeas, 62 Nays, 2 Present, not voting.

Yeas — Allison; Anderson; Ashby; Bailes; Beckley; Bell, K.; Biedermann; Blanco; Bohac; Bonnen; Buckley; Bucy; Burns; Burrows; Cain; Canales; Cyrier; Darby; Dean; Deshotel; Flynn; Frank; Geren; Guillen; Harless; Harris; Hefner; Holland; Howard; Huberty; Israel; King, P.; Klick; Krause; Lang; Leach; Leman; Longoria; Lozano; Metcalf; Meyer; Middleton; Miller; Moody; Morrison; Murphy; Murr; Nevárez; Noble; Paddie; Patterson; Phelan; Ramos; Raney; Raymond; Rodriguez; Sanford; Schaefer; Shaheen; Sheffield; Shine; Smith; Smithee; Stephenson; Swanson; Talarico; Thierry; Tinderholt; Toth; VanDeaver; Walle; White; Wilson; Wray; Zedler.

Nays — Allen; Anchia; Bell, C.; Bernal; Bowers; Button; Calanni; Capriglione; Cole; Coleman; Collier; Cortez; Craddick; Davis, Y.; Dominguez; Fierro; Frullo; Gervin-Hawkins; Goldman; González, J.; González, M.; Goodwin; Guerra; Gutierrez; Hernandez; Hinojosa; Johnson, J.E.; Kacal; King, K.; King, T.; Kuempel; Lambert; Landgraf; Larson; Lopez; Martinez; Martinez Fischer; Meza; Minjarez; Morales; Muñoz; Neave; Oliverson; Ortega; Pacheco; Parker; Paul; Perez; Price; Rose; Rosenthal; Sherman; Springer; Stickland; Stucky; Thompson, E.; Thompson, S.; Turner, C.; Turner, J.; Wu; Zerwas; Zwiener.

Present, not voting — Mr. Speaker(C); Hunter.

Absent, Excused — Davis, S.; Johnson, E.; Johnson, J.D.

Absent — Clardy; Dutton; Farrar; Herrero; Lucio; Reynolds; Romero; Vo.

The chair stated that the motion to adopt the conference committee report on HB 4749 prevailed by the above vote.

LEAVES OF ABSENCE GRANTED

The following members were granted leaves of absence for the remainder of today because of important business:

Lucio on motion of Longoria.

Vo on motion of Bernal.

The following members were granted leaves of absence for the remainder of today because of family business:

Herrero on motion of Rodriguez.

Romero on motion of Neave.

SB 583 - CONFERENCE COMMITTEE REPORT ADOPTED

Representative Rose submitted the conference committee report on SB 583.

Representative Rose moved to adopt the conference committee report on SB 583.

The motion to adopt the conference committee report on SB 583 prevailed by (Record 1935): 118 Yeas, 17 Nays, 1 Present, not voting.

Yeas — Allen; Allison; Anchia; Anderson; Ashby; Bailes; Beckley; Bell, C.; Bell, K.; Bernal; Blanco; Bohac; Bonnen; Buckley; Bucy; Burns; Burrows; Button; Calanni; Canales; Capriglione; Cole; Coleman; Collier; Cortez; Craddick; Cyrier; Darby; Davis, Y.; Dominguez; Dutton; Fierro; Flynn; Frank; Frullo; Geren; Gervin-Hawkins; Goldman; González, J.; González, M.; Goodwin; Guerra; Guillen; Gutierrez; Harless; Harris; Hernandez; Hinojosa; Holland; Howard; Huberty; Israel; Johnson, J.E.; Kacal; King, K.; King, P.; King, T.; Klick; Kuempel; Lambert; Landgraf; Larson; Leach; Leman; Longoria; Lopez; Lozano; Martinez Fischer; Meyer; Meza; Miller; Minjarez; Moody; Morales; Morrison; Muñoz; Murphy; Murr; Neave; Nevárez; Noble; Ortega; Pacheco; Paddie; Parker; Paul; Perez; Phelan; Price; Ramos; Raney; Raymond; Rodriguez; Rose; Rosenthal; Sanford; Sheffield; Sherman; Shine; Smith; Smithee; Springer; Stephenson; Stucky; Talarico; Thierry; Thompson, E.; Thompson, S.; Turner, C.; Turner, J.; VanDeaver; Walle; White; Wray; Wu; Zedler; Zerwas; Zwiener.

Nays — Biedermann; Cain; Dean; Hefner; Krause; Lang; Metcalf; Middleton; Oliverson; Patterson; Schaefer; Shaheen; Stickland; Swanson; Tinderholt; Toth; Wilson.

Present, not voting — Mr. Speaker(C).

Absent, Excused — Davis, S.; Herrero; Johnson, E.; Johnson, J.D.; Lucio; Romero; Vo.

Absent — Bowers; Clardy; Deshotel; Farrar; Hunter; Martinez; Reynolds.

STATEMENTS OF VOTE

When Record No. 1935 was taken, I was shown voting yes. I intended to vote no.

Harris

When Record No. 1935 was taken, I was in the house but away from my desk. I would have voted no.

Hunter

When Record No. 1935 was taken, I was shown voting yes. I intended to vote no.

Leman

When Record No. 1935 was taken, my vote failed to register. I would have voted yes.

Martinez

When Record No. 1935 was taken, I was shown voting yes. I intended to vote no.

Paul

HB 1504 - CONFERENCE COMMITTEE REPORT ADOPTED

Representative Paddie submitted the following conference committee report on HB 1504:

Austin, Texas, May 23, 2019

The Honorable Dan Patrick

President of the Senate

The Honorable Dennis Bonnen

Speaker of the House of Representatives

Sirs: We, your conference committee, appointed to adjust the differences between the senate and the house of representatives on HB 1504 have had the same under consideration, and beg to report it back with the recommendation that it do pass in the form and text hereto attached.

Nichols

Paddie

Birdwell

Lambert

Buckingham

Nevárez

Hall

Schaefer

Toth

On the part of the senate

On the part of the house

HB 1504, A bill to be entitled An Act relating to the continuation and functions of the Texas Medical Board; authorizing a fee.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 151.004, Occupations Code, is amended to read as follows:

Sec. 151.004. APPLICATION OF SUNSET ACT. The Texas Medical Board is subject to Chapter 325, Government Code (Texas Sunset Act). Unless continued in existence as provided by that chapter, the board is abolished and this subtitle and Chapters 204, 205, 206, 601, 602, 603, and 604 expire September 1, 2031 [~~2019~~].

SECTION 2. Section 152.010, Occupations Code, is amended by amending Subsection (b) and adding Subsection (d) to read as follows:

(b) The training program must provide the person with information regarding:

(1) the law governing board operations [~~this subtitle~~];

(2) the programs, functions, rules, and budget of [~~operated by~~] the board;

(3) the scope of and limitations on the rulemaking authority [~~role and functions~~] of the board;

(4) the types of board rules, interpretations, and enforcement actions that may implicate federal antitrust law by limiting competition or impacting prices charged by persons engaged in a profession or business the board regulates, including any rule, interpretation, or enforcement action that:

(A) regulates the scope of practice of persons in a profession or business the board regulates;

(B) restricts advertising by persons in a profession or business the board regulates;

(D) restricts participation in a profession or business the board regulates [~~the rules of the board, with an emphasis on the rules that relate to disciplinary and investigatory authority~~];

(5) [~~the current budget for the board;~~

[~~(6)~~] the results of the most recent formal audit of the board;

(6) [~~(7)~~] the requirements of:

(A) laws relating to open meetings, public information, administrative procedure, and disclosure of conflicts of interest; and

(B) other laws applicable to members of the board in performing their duties; and

(7) [~~(8)~~] any applicable ethics policies adopted by the board or the Texas Ethics Commission.

(d) The executive director of the board shall create a training manual that includes the information required by Subsection (b). The executive director shall distribute a copy of the training manual annually to each board member. Each board member shall sign and submit to the executive director a statement acknowledging that the member received and has reviewed the training manual.

SECTION 3. Section 153.058(a), Occupations Code, is amended to read as follows:

(a) The board shall develop and implement a policy to encourage the use of:

(1) negotiated rulemaking procedures under Chapter 2008, Government Code, for the adoption of any rules by the board [~~rules~~]; and

(2) appropriate alternative dispute resolution procedures under Chapter 2009, Government Code, to assist in the resolution of internal and external disputes under the board's jurisdiction.

SECTION 4. Section 154.006, Occupations Code, is amended by amending Subsections (b), (g), (i), (j), and (k) and adding Subsections (b-1), (i-1), and (l) to read as follows:

(b) Except as otherwise provided by this section, a [A] profile must contain the following information on each physician:

(1) the name of each medical school attended and the dates of:

(A) graduation; or

(B) Fifth Pathway designation and completion of the Fifth Pathway Program;

(2) a description of all graduate medical education in the United States or Canada;

(3) any specialty certification held by the physician and issued by a medical licensing board that is a member of the American Board of Medical Specialties or the Bureau of Osteopathic Specialists;

(4) the number of years the physician has actively practiced medicine in:

(A) the United States or Canada; and

(B) this state;

(5) the name of each hospital in this state in which the physician has privileges;

(6) the physician's primary practice location;

(7) the type of language translating services, including translating services for a person with impairment of hearing, that the physician provides at the physician's primary practice location;

(8) whether the physician participates in the Medicaid program;

(9) a description of any conviction for a felony, a Class A or Class B misdemeanor, or a Class C misdemeanor involving moral turpitude;

(10) a description of any charges reported to the board to which the physician has pleaded no contest, for which the physician is the subject of deferred adjudication or pretrial diversion, or in which sufficient facts of guilt were found and the matter was continued by a court;

(11) a description of any disciplinary action against the physician by the board;

(12) a description of any disciplinary action against the physician by a medical licensing board of another state;

(13) a description of the final resolution taken by the board on medical malpractice claims or complaints required to be opened by the board under Section 164.201;

(14) whether the physician's patient service areas are accessible to disabled persons, as defined by federal law;

(15) a description of any formal complaint against the physician initiated and filed under Section 164.005 and the status of the complaint; and

(16) a description of any medical malpractice claim against the physician, not including a description of any offers by the physician to settle the claim, for which the physician was found liable, a jury awarded monetary damages to the claimant, and the award has been determined to be final and not subject to further appeal.

(b-1) On or after the fifth anniversary of the date a remedial plan is issued under Section 164.0015, the board may remove from the profile of the physician subject to the plan any information regarding the plan and the complaint resolved by the plan unless:

(1) the complaint was related to the delivery of health care; or

(2) more than one remedial plan has been issued to resolve complaints alleging the same violation by the physician, including a complaint not related to the delivery of health care.

(g) Except as otherwise provided by this section, the [~~The~~] board shall update the information contained in a physician's profile annually[~~, except that information provided under Subsection (i) shall be updated not later than the 10th working day after the date the formal complaint is filed or the board's order is issued~~]. The board shall adopt a form that allows a physician to update information contained in a physician's profile. The form shall be made available on the Internet and in other formats as prescribed by board rule. The board may adopt rules concerning the type and content of additional information that may be included in a physician's profile.

(i) In addition to the information required by Subsection (b) and except as otherwise provided by this section, a profile must be updated to contain the text of a formal complaint filed under Section 164.005 against the physician or of a board order related to the formal complaint not later than the 10th working day after the date the complaint is filed.

(i-1) Not later than the 10th working day after the date the board issues a final order related to a formal complaint filed under Section 164.005 against a physician, the board shall:

(1) remove from the physician's profile any record of the formal complaint or any prior disciplinary action related to the formal complaint; and

(2) update the physician's profile to contain the board's final order.

(j) Information included in a physician's profile under Subsections (b), [~~and~~] (i), and (i-1) may not include any patient identifying information.

(k) Not later than the 10th working day after the date the board dismisses [~~In the annual update of a physician's profile under Subsection (g), the board shall remove any record of~~] a formal complaint against a physician required to be included in the physician's profile under Subsection (b)(15) or (i) [~~if the complaint was dismissed more than five years before the date of the update and the complaint was dismissed~~] as baseless, unfounded, or not supported by sufficient evidence that a violation occurred, or resolves the complaint and takes no action [~~was taken~~] against the physician's license as a result of the complaint, the board shall:

(1) remove from the physician's profile any record of the formal complaint or any prior disciplinary action related to the formal complaint; and

(2) update the physician's profile to contain the board's final order dismissing or resolving the complaint.

(l) If no action is taken against a physician's license as a result of an [~~The board shall also remove any record of the~~] investigation of medical malpractice claims or complaints required to be investigated by the board under Section 164.201, the board shall, not later than the 10th working day after the date the board resolves the investigation, remove any record of the investigation from the physician's profile [~~if the investigation was resolved more than five years before the date of the update and no action was taken against the physician's license as a result of the investigation~~].

SECTION 5. Section 154.057, Occupations Code, is amended by amending Subsection (b) and adding Subsection (b-1) to read as follows:

(b) Except as provided by Subsection (b-1), the [~~The~~] board shall complete a preliminary investigation of the complaint not later than the 45th day after the date of receiving the complaint. The board shall first determine whether the physician constitutes a continuing threat to the public welfare. On completion of the preliminary investigation, the board shall determine whether to officially proceed on the complaint. If the board fails to complete the preliminary investigation in the time required by this subsection, the board's official investigation of the complaint is considered to commence on that date.

(b-1) The board, for good cause, may extend a preliminary investigation under Subsection (b) for not more than 15 days after the date required for completion under that subsection.

SECTION 6. Subchapter A, Chapter 155, Occupations Code, is amended by adding Section 155.011 to read as follows:

Sec. 155.011. EXPEDITED LICENSING PROCESS FOR CERTAIN OUT-OF-STATE APPLICANTS. The board by rule shall develop and implement an expedited licensing process for an applicant who is considered to have satisfied the examination requirements of this chapter under Section 155.0561(d).

SECTION 7. Section 155.056(a), Occupations Code, is amended to read as follows:

(a) Except as otherwise provided by Subsection (a-1) and Section 155.0561, an applicant must pass each part of an examination within three attempts.

SECTION 8. Subchapter B, Chapter 155, Occupations Code, is amended by adding Section 155.0561 to read as follows:

Sec. 155.0561. EXCEPTIONS TO EXAMINATION ATTEMPT LIMITS FOR CERTAIN OUT-OF-STATE APPLICANTS. (a) In this section:

(1) "Active practice" means the practice of medicine by a person after successful completion of a residency, fellowship, or other supervised training program.

(2) "Full license" means a license to practice medicine that is not a training license, a permit, or any other form of authority to practice medicine issued to a person while the person is completing or enrolled in a residency, fellowship, or other supervised training program.

(b) This section applies only to an applicant who:

(1) has successfully completed a graduate medical education program approved by the board;

(2) holds a full license and is in good standing as a physician in another state or Canada;

(3) does not hold and has never held a medical license subject to any restriction, disciplinary order, or probation;

(4) is not and has never been the subject of a peer review that has resulted or may result in limitation, restriction, suspension, or other adverse impact on the applicant's hospital or other medical facility privileges; and

(5) is not under investigation by any licensing or law enforcement agency.

(c) An applicant described by Subsection (b) who has held a full license and been in active practice for at least one year but less than five years and has passed within three attempts all but one part of the examination approved by the board is considered to have satisfied the examination requirements of this chapter if the applicant passed the remaining part of the examination within:

(1) one additional attempt; or

(2) three additional attempts, if the applicant is specialty board certified by a specialty board that is:

(A) a member of the American Board of Medical Specialties; or

(B) approved by the American Osteopathic Association.

(d) An applicant described by Subsection (b) who has held a full license and been in active practice for at least five years is considered to have satisfied the examination requirements of this chapter regardless of the type of examination the applicant passed or the number of attempts within which the applicant passed the examination or any part of the examination.

SECTION 9. Section 162.106, Occupations Code, is amended to read as follows:

Sec. 162.106. INSPECTIONS. (a) The board may conduct inspections [~~to enforce this subchapter, including inspections of an office site and of documents~~] of a physician's equipment and office procedures [~~practice~~] that relate to the provision of anesthesia in an outpatient setting as necessary to enforce this subchapter.

(b) The board may establish a risk-based inspection process in which the board conducts inspections based on the length of time since:

(1) the equipment and outpatient setting were last inspected; and

(2) the physician submitted to inspection.

(d) [~~(b)~~] Unless it would jeopardize an ongoing investigation, the board shall provide at least five business days' notice before conducting an on-site inspection under this section.

(e) The board shall maintain a record of the outpatient settings in which physicians provide anesthesia.

(f) A physician who provides anesthesia in an outpatient setting shall inform the board of any other physician with whom the physician shares equipment used to administer anesthesia.

(g) [~~(c)~~] This section does not require the board to make an on-site inspection of a physician's office.

SECTION 10. Section 164.0015(d), Occupations Code, is amended to read as follows:

(d) The board may not issue a remedial plan to resolve a complaint against a license holder if the license holder has [~~previously~~] entered into a remedial plan with the board in the preceding five years [~~for the resolution of a different complaint relating to this subtitle~~].

SECTION 11. Section 164.003, Occupations Code, is amended by amending Subsections (b) and (f) and adding Subsection (f-1) to read as follows:

(b) Rules adopted under this section must require that:

(1) an informal meeting in compliance with Section 2001.054, Government Code, be scheduled not later than the 180th day after the date the board's official investigation of the complaint is commenced as provided by Section 154.057(b), unless good cause is shown by the board for scheduling the informal meeting after that date;

(2) the board give notice to the license holder of the time and place of the meeting not later than the 45th day before the date the meeting is held;

(3) the complainant and the license holder be provided an opportunity to be heard;

(4) at least one of the board members or district review committee members participating in the informal meeting as a panelist be a member who represents the public;

(5) the board's legal counsel or a representative of the attorney general be present to advise the board or the board's staff; [~~and~~]

(6) a member of the board's staff be at the meeting to present to the board's representative the facts the staff reasonably believes it could prove by competent evidence or qualified witnesses at a hearing; and

(7) if the complaint includes an allegation that the license holder has violated the standard of care, the panel conducting the informal proceeding consider whether the physician was practicing complementary and alternative medicine.

(f) The notice required by Subsection (b)(2) must be accompanied by a written statement of the nature of the allegations and the information the board intends to use at the meeting. If the board does not provide the statement or information at that time, the license holder may use that failure as grounds for rescheduling the informal meeting. If the complaint includes an allegation that the license holder has violated the standard of care, the notice must include a copy of each [~~the~~] report prepared by an [~~the~~] expert physician reviewer under Section 154.0561. The license holder must provide to the board the license holder's rebuttal at least 15 business days before the date of the meeting in order for the information to be considered at the meeting.

(f-1) Before providing a report to a license holder under Subsection (f), the board must redact any identifying information of an expert physician reviewer other than the specialty of the expert physician reviewer.

SECTION 12. Sections 164.005(a) and (c), Occupations Code, are amended to read as follows:

(a) In this section, "formal complaint" means a written statement made by a credible person [~~under oath~~] that is filed and presented by a board representative charging a person with having committed an act that, if proven, could affect the legal rights or privileges of a license holder or other person under the board's jurisdiction.

(1) be [is] filed with the board's records custodian or assistant records custodian; and

(2) detail [~~details~~] the nature of the charge as required by this subtitle or other applicable law.

SECTION 13. Sections 164.006(a) and (b), Occupations Code, are amended to read as follows:

(a) Notice [~~Service of process~~] to [~~notify~~] the respondent of a hearing about the charges against the person must be served:

(1) in accordance with Chapter 2001, Government Code; and

(2) by certified mail.

(b) If notice [~~service~~] described by Subsection (a) is impossible or cannot be effected, the board shall publish once a week for two successive weeks a notice of the hearing in a newspaper published in the county of the last known place of practice in this state of the person, if known.

SECTION 14. Sections 164.007(a) and (a-1), Occupations Code, are amended to read as follows:

(a) The board by rule shall adopt procedures governing formal disposition of a contested case under Chapter 2001, Government Code. A formal hearing shall be conducted by an administrative law judge employed by the State Office of Administrative Hearings. After receiving the administrative law judge's findings of fact and conclusions of law, the board shall:

(1) dispose of the contested case by issuing a final order based on the administrative law judge's findings of fact and conclusions of law; or

(2) appeal the administrative law judge's findings of fact and conclusions of law in the manner provided by Section 164.0072.

(a-1) Notwithstanding Section 2001.058(e), Government Code, the board may not change a finding of fact or conclusion of law or vacate or modify an order of the administrative law judge. [~~The board may obtain judicial review of any finding of fact or conclusion of law issued by the administrative law judge as provided by Section 2001.058(f)(5), Government Code.~~] For each case, the board has the sole authority and discretion to determine the appropriate action or sanction. The [~~, and the~~] administrative law judge may not make any recommendation regarding the appropriate action or sanction.

SECTION 15. Subchapter A, Chapter 164, Occupations Code, is amended by adding Section 164.0072 to read as follows:

Sec. 164.0072. BOARD APPEAL OF FINDINGS OF FACT AND CONCLUSIONS OF LAW. (a) The board may, before disposing of a contested case by issuing a final order, obtain judicial review of any finding of fact or conclusion of law issued by the administrative law judge by filing suit in a Travis County district court not later than the 30th day after the date the findings of fact and conclusions of law are issued.

(b) The board shall join in a suit filed under this section the respondent in the contested case for which the board seeks to obtain judicial review.

(c) The scope of judicial review under this section is the same as the scope of judicial review provided for an appeal under Section 164.009.

(d) After the court issues a final order in a suit filed under this section, the board shall dispose of the contested case by issuing a final order based on the court's final order. The respondent may not appeal a sanction ordered by the board unless the sanction exceeds the board's published sanctions guidelines.

SECTION 16. Section 164.052(a), Occupations Code, is amended to read as follows:

(a) A physician or an applicant for a license to practice medicine commits a prohibited practice if that person:

(1) submits to the board a false or misleading statement, document, or certificate in an application for a license;

(2) presents to the board a license, certificate, or diploma that was illegally or fraudulently obtained;

(3) commits fraud or deception in taking or passing an examination;

(4) uses alcohol or drugs in an intemperate manner that, in the board's opinion, could endanger a patient's life;

(5) commits unprofessional or dishonorable conduct that is likely to deceive or defraud the public, as provided by Section 164.053, or injure the public;

(6) uses an advertising statement that is false, misleading, or deceptive;

(7) advertises professional superiority or the performance of professional service in a superior manner if that advertising is not readily subject to verification;

(8) purchases, sells, barters, or uses, or offers to purchase, sell, barter, or use, a medical degree, license, certificate, or diploma, or a transcript of a license, certificate, or diploma in or incident to an application to the board for a license to practice medicine;

(9) alters, with fraudulent intent, a medical license, certificate, or diploma, or a transcript of a medical license, certificate, or diploma;

(10) uses a medical license, certificate, or diploma, or a transcript of a medical license, certificate, or diploma that has been:

(A) fraudulently purchased or issued;

(B) counterfeited; or

(11) impersonates or acts as proxy for another person in an examination required by this subtitle for a medical license;

(12) engages in conduct that subverts or attempts to subvert an examination process required by this subtitle for a medical license;

(13) impersonates a physician or permits another to use the person's license or certificate to practice medicine in this state;

(14) directly or indirectly employs a person whose license to practice medicine has been suspended, canceled, or revoked;

(15) associates in the practice of medicine with a person:

(A) whose license to practice medicine has been suspended, canceled, or revoked; or

(B) who has been convicted of the unlawful practice of medicine in this state or elsewhere;

(16) performs or procures a criminal abortion, aids or abets in the procuring of a criminal abortion, attempts to perform or procure a criminal abortion, or attempts to aid or abet the performance or procurement of a criminal abortion;

(17) directly or indirectly aids or abets the practice of medicine by a person, partnership, association, or corporation that is not licensed to practice medicine by the board;

(18) performs an abortion on a woman who is pregnant with a viable unborn child during the third trimester of the pregnancy unless:

(A) the abortion is necessary to prevent the death of the woman;

(B) the viable unborn child has a severe, irreversible brain impairment; or

(C) the woman is diagnosed with a significant likelihood of suffering imminent severe, irreversible brain damage or imminent severe, irreversible paralysis;

(19) performs an abortion on an unemancipated minor without the written consent of the child's parent, managing conservator, or legal guardian or without a court order, as provided by Section 33.003 or 33.004, Family Code, unless the abortion is necessary due to a medical emergency, as defined by Section 171.002, Health and Safety Code;

(20) otherwise performs an abortion on an unemancipated minor in violation of Chapter 33, Family Code; [or]

(21) performs or induces or attempts to perform or induce an abortion in violation of Subchapter C, F, or G, Chapter 171, Health and Safety Code; or

(22) in complying with the procedures outlined in Sections 166.045 and 166.046, Health and Safety Code, wilfully fails to make a reasonable effort to transfer a patient to a physician who is willing to comply with a directive.

SECTION 17. Chapter 167, Occupations Code, is amended by adding Sections 167.012 and 167.013 to read as follows:

Sec. 167.012. MEMORANDUM OF UNDERSTANDING WITH BOARD. The governing board and the board shall enter into a memorandum of understanding to better coordinate services and operations of the program. The memorandum of understanding must be adopted by rule and:

(1) establish performance measures for the program, including the number of participants who successfully complete the program;

(2) include a list of services the board will provide for the program; and

(3) require that an internal audit of the program be conducted at least once every three years to ensure the program is properly documenting and referring all noncompliance to the board.

Sec. 167.013. GIFTS, GRANTS, AND DONATIONS. In addition to any fees paid to the board or money appropriated to the board for the program, the governing board may receive and accept a gift, grant, donation, or other thing of value from any source, including the United States or a private source, for the program.

SECTION 18. Section 205.057, Occupations Code, is amended by amending Subsection (b) and adding Subsection (d) to read as follows:

(b) The training program must provide the person with information regarding:

(1) the law governing acupuncture board operations [~~this chapter~~];

(2) the programs, [~~operated by the acupuncture board;~~

[~~(3)~~ ~~the role and~~] functions, rules, and budget of the acupuncture board;

(3) [~~(4)~~] the scope of and limitations on the rulemaking authority [~~rules~~] of the acupuncture board;

(4) the types of acupuncture board rules, interpretations, and enforcement actions that may implicate federal antitrust law by limiting competition or impacting prices charged by persons engaged in a profession or business the acupuncture board regulates, including any rule, interpretation, or enforcement action that:

(A) regulates the scope of practice of persons in a profession or business the acupuncture board regulates;

(B) restricts advertising by persons in a profession or business the acupuncture board regulates;

(C) affects the price of goods or services provided by persons in a profession or business the acupuncture board regulates; or

(D) restricts participation in a profession or business the acupuncture board regulates;

(5) [~~the current budget for the acupuncture board;~~

[~~(6)~~] the results of the most recent formal audit of the acupuncture board;

(6) [~~(7)~~] the requirements of:

(A) laws relating to open meetings, public information, administrative procedure, and disclosure of conflicts of interest; and

(B) other laws applicable to members of the acupuncture board in performing their duties; and

(7) [~~(8)~~] any applicable ethics policies adopted by the acupuncture board or the Texas Ethics Commission.

(d) The executive director shall create a training manual that includes the information required by Subsection (b). The executive director shall distribute a copy of the training manual annually to each acupuncture board member. Each board member shall sign and submit to the executive director a statement acknowledging that the member received and has reviewed the training manual.

SECTION 19. Subchapter E, Chapter 205, Occupations Code, is amended by adding Section 205.2025 to read as follows:

Sec. 205.2025. CRIMINAL HISTORY RECORD INFORMATION REQUIREMENT FOR LICENSE ISSUANCE. (a) The acupuncture board shall require that an applicant for a license submit a complete and legible set of fingerprints, on a form prescribed by the board, to the board or to the Department of Public Safety for the purpose of obtaining criminal history record information from the Department of Public Safety and the Federal Bureau of Investigation.

(b) The acupuncture board may not issue a license to a person who does not comply with the requirement of Subsection (a).

(c) The acupuncture board shall conduct a criminal history record information check of each applicant for a license using information:

(1) provided by the individual under this section; and

(2) made available to the board by the Department of Public Safety, the Federal Bureau of Investigation, and any other criminal justice agency under Chapter 411, Government Code.

(d) The acupuncture board may:

(1) enter into an agreement with the Department of Public Safety to administer a criminal history record information check required under this section; and

(2) authorize the Department of Public Safety to collect from each applicant the costs incurred by the Department of Public Safety in conducting the criminal history record information check.

SECTION 20. Subchapter F, Chapter 205, Occupations Code, is amended by adding Section 205.2515 to read as follows:

Sec. 205.2515. CRIMINAL HISTORY RECORD INFORMATION REQUIREMENT FOR RENEWAL. (a) An applicant for renewal of a license issued under this chapter shall submit a complete and legible set of fingerprints for purposes of performing a criminal history record information check of the applicant as provided by Section 205.2025.

(b) The acupuncture board may administratively suspend or refuse to renew the license of a person who does not comply with the requirement of Subsection (a).

(c) A license holder is not required to submit fingerprints under this section for the renewal of the license if the holder has previously submitted fingerprints under:

(1) Section 205.2025 for the initial issuance of the license; or

(2) this section as part of a prior renewal of a license.

SECTION 21. Subchapter E, Chapter 206, Occupations Code, is amended by adding Section 206.2025 to read as follows:

Sec. 206.2025. CRIMINAL HISTORY RECORD INFORMATION REQUIREMENT FOR LICENSE ISSUANCE. (a) The medical board shall require that an applicant for a license submit a complete and legible set of fingerprints, on a form prescribed by the board, to the board or to the Department of Public Safety for the purpose of obtaining criminal history record information from the Department of Public Safety and the Federal Bureau of Investigation.

(b) The medical board may not issue a license to a person who does not comply with the requirement of Subsection (a).

(c) The medical board shall conduct a criminal history record information check of each applicant for a license using information:

(1) provided by the individual under this section; and

(2) made available to the board by the Department of Public Safety, the Federal Bureau of Investigation, and any other criminal justice agency under Chapter 411, Government Code.

(d) The medical board may:

(1) enter into an agreement with the Department of Public Safety to administer a criminal history record information check required under this section; and

(2) authorize the Department of Public Safety to collect from each applicant the costs incurred by the Department of Public Safety in conducting the criminal history record information check.

SECTION 22. Section 206.203(a), Occupations Code, is amended to read as follows:

(a) Except as provided by Section 206.206, to be eligible for a license, a person must:

(1) [~~be of good moral character;~~

[~~(2)~~] have not been convicted of a felony or a crime involving moral turpitude;

(2) [~~(3)~~] not use drugs or alcohol to an extent that affects the applicant's professional competency;

(3) [~~(4)~~] not have had a license or certification revoked by a licensing agency or by a certifying professional organization; and

(4) [~~(5)~~] not have engaged in fraud or deceit in applying for a license under this chapter.

SECTION 23. Subchapter E, Chapter 206, Occupations Code, is amended by adding Section 206.2105 to read as follows:

Sec. 206.2105. CRIMINAL HISTORY RECORD INFORMATION REQUIREMENT FOR RENEWAL. (a) An applicant for renewal of a license issued under this chapter shall submit a complete and legible set of fingerprints for purposes of performing a criminal history record information check of the applicant as provided by Section 206.2025.

(b) The medical board may administratively suspend or refuse to renew the license of a person who does not comply with the requirement of Subsection (a).

(c) A license holder is not required to submit fingerprints under this section for the renewal of the license if the holder has previously submitted fingerprints under:

(1) Section 206.2025 for the initial issuance of the license; or

(2) this section as part of a prior renewal of a license.

SECTION 24. Section 601.002, Occupations Code, is amended by adding Subdivisions (10-a) and (10-b) to read as follows:

(10-a) "Radiologist" means a physician specializing in radiology certified by or board-eligible for the American Board of Radiology, the American Osteopathic Board of Radiology, the Royal College of Radiologists, or the Royal College of Physicians and Surgeons of Canada.

(10-b) "Radiologist assistant" means an advanced-level medical radiologic technologist who is certified as:

(A) a registered radiologist assistant by the American Registry of Radiologic Technologists; or

(B) a radiology practitioner assistant by the Certification Board for Radiology Practitioner Assistants.

SECTION 25. Section 601.030, Occupations Code, is amended by amending Subsection (b) and adding Subsection (d) to read as follows:

(b) The training program must provide the person with information regarding:

(1) the law governing advisory board operations;

(2) [~~this chapter and~~] the [~~advisory board's~~] programs, functions, rules, and budget of the advisory board;

(3) the scope of and limitations on the rulemaking authority of the advisory board;

(4) the types of advisory board rules, interpretations, and enforcement actions that may implicate federal antitrust law by limiting competition or impacting prices charged by persons engaged in a profession or business the advisory board regulates, including any rule, interpretation, or enforcement action that:

(A) regulates the scope of practice of persons in a profession or business the advisory board regulates;

(B) restricts advertising by persons in a profession or business the advisory board regulates;

(C) affects the price of goods or services provided by persons in a profession or business the advisory board regulates; or

(D) restricts participation in a profession or business the advisory board regulates;

(5) [~~(2)~~] the results of the most recent formal audit of the advisory board;

(6) [~~(3)~~] the requirements of:

(A) laws relating to open meetings, public information, administrative procedure, and disclosure of conflicts of interest; and

(B) other laws applicable to members of the advisory board in performing their duties; and

(7) [~~(4)~~] any applicable ethics policies adopted by the advisory board or the Texas Ethics Commission.

(d) The executive director of the medical board shall create a training manual that includes the information required by Subsection (b). The executive director shall distribute a copy of the training manual annually to each advisory board member. Each board member shall sign and submit to the executive director a statement acknowledging that the member received and has reviewed the training manual.

SECTION 26. Sections 601.102(b) and (c), Occupations Code, are amended to read as follows:

(b) The advisory board may issue to a person:

(1) a general certificate to perform radiologic procedures; [or]

(2) a limited certificate that authorizes the person to perform radiologic procedures only on specific parts of the human body; or

(3) a radiologist assistant certificate to a person who meets the requirements established under Section 601.1021.

(c) The advisory board may issue to a person a temporary general certificate, [or] a temporary limited certificate, or a temporary radiologist assistant certificate that authorizes the person to perform radiologic procedures for a period not to exceed one year.

SECTION 27. Subchapter C, Chapter 601, Occupations Code, is amended by adding Section 601.1021 to read as follows:

Sec. 601.1021. RADIOLOGIST ASSISTANT CERTIFICATE. (a) The advisory board by rule shall establish the education and training required for a person to obtain a radiologist assistant certificate.

(b) A radiologist assistant certificate holder:

(1) may perform radiologic procedures only under the supervision of a radiologist; and

(2) may not interpret images, make diagnoses, or prescribe any medication or therapy.

SECTION 28. Section 604.030, Occupations Code, is amended by amending Subsection (b) and adding Subsection (d) to read as follows:

(b) The training program must provide the person with information regarding:

(1) the law governing advisory board operations;

(2) the [~~this chapter and the advisory board's~~] programs, functions, rules, and budget of the advisory board;

(3) the scope of and limitations on the rulemaking authority of the advisory board;

(A) regulates the scope of practice of persons in a profession or business the advisory board regulates;

(B) restricts advertising by persons in a profession or business the advisory board regulates;

(C) affects the price of goods or services provided by persons in a profession or business the advisory board regulates; or

(D) restricts participation in a profession or business the advisory board regulates;

(5) [~~(2)~~] the results of the most recent formal audit of the advisory board;

(6) [~~(3)~~] the requirements of:

(A) laws relating to open meetings, public information, administrative procedure, and disclosure of conflicts of interest; and

(B) other laws applicable to members of the advisory board in performing their duties; and

(7) [~~(4)~~] any applicable ethics policies adopted by the advisory board or the Texas Ethics Commission.

SECTION 29. Sections 155.056(c) and (d), Occupations Code, are repealed.

SECTION 30. (a) Except as provided by Subsection (b) of this section, Sections 152.010, 205.057, 601.030, and 604.030, Occupations Code, as amended by this Act, apply to a member of the applicable board appointed before, on, or after the effective date of this Act.

(b) A member of a board who, before the effective date of this Act, completed the training program required by Section 152.010, 205.057, 601.030, or 604.030, Occupations Code, as the applicable law existed before the effective date of this Act, is only required to complete additional training on subjects added by this Act to the training program required by, as applicable, Section 152.010, 205.057, 601.030, or 604.030, Occupations Code, as amended by this Act. A board member described by this subsection may not vote, deliberate, or be counted as a member in attendance at a meeting of the applicable board held on or after December 1, 2019, until the member completes the additional training.

SECTION 31. Not later than March 1, 2020, the Texas Medical Board shall adopt rules necessary to implement Section 164.003(b), Occupations Code, as amended by this Act.

SECTION 32. Not later than January 1, 2020, the Texas Medical Board and the governing board of the Texas Physician Health Program by rule shall adopt the memorandum of understanding required by Section 167.012, Occupations Code, as added by this Act.

SECTION 33. Not later than September 1, 2021, the Texas State Board of Acupuncture Examiners and the Texas Medical Board shall obtain criminal history record information on each person who, on the effective date of this Act, holds a license issued under Chapter 205 or 206, Occupations Code, as applicable, and did not undergo a criminal history record information check based on the license holder's fingerprints on the initial application for the license. A board may suspend the license of a license holder who does not provide the criminal history record information as required by the board and this section.

SECTION 34. Not later than January 1, 2020, the Texas Medical Board shall approve the rules required by Section 601.1021, Occupations Code, as added by this Act.

SECTION 35. This Act takes effect September 1, 2019.

HB 1504 - STATEMENT OF LEGISLATIVE INTENT

REPRESENTATIVE ZEDLER: Mr. Paddie, thank you very much for your time. Is it the intent of HB 1504 to require the removal of a complaint from a physician's profile if the complaint was found to be baseless, unfounded, or not supported by sufficient evidence that a violation occurred or resolves the complaint and takes no action?

REPRESENTATIVE PADDIE: Mr. Zedler, that is correct. That is the intent of HB 1504. The Medical Board, within 10 days of such a determination, no matter at what point in the investigation process that determination is made, should remove that complaint from the physician's profile as maintained by the Texas Medical Board.

ZEDLER: And if that occurs, that they should also remove or send a void order to the national practitioner database?

PADDIE: It's my understanding, Mr. Zedler, that currently when that happens, current statute says that they will give that notification or, as it is properly termed, a void order. So they should absolutely continue to do what the statute requires them to do today.

REMARKS ORDERED PRINTED

Representative Zedler moved to print remarks between Representative Paddie and Representative Zedler on HB 1504.

The motion prevailed.

Representative Paddie moved to adopt the conference committee report on HB 1504.

The motion to adopt the conference committee report on HB 1504 prevailed by (Record 1936): 137 Yeas, 0 Nays, 1 Present, not voting.

Yeas — Allen; Allison; Anchia; Anderson; Ashby; Bailes; Beckley; Bell, C.; Bell, K.; Bernal; Biedermann; Blanco; Bohac; Bonnen; Buckley; Bucy; Burns; Burrows; Button; Cain; Calanni; Canales; Capriglione; Cole; Coleman; Collier; Cortez; Craddick; Cyrier; Darby; Davis, Y.; Dean; Dominguez; Dutton; Fierro; Flynn; Frank; Frullo; Geren; Gervin-Hawkins; Goldman; González, J.; González, M.; Goodwin; Guerra; Guillen; Gutierrez; Harless; Harris; Hefner; Hernandez; Hinojosa; Holland; Howard; Huberty; Hunter; Israel; Johnson, J.E.; Kacal; King, K.; King, P.; King, T.; Klick; Krause; Kuempel; Lambert; Landgraf; Lang; Larson; Leach; Leman; Longoria; Lopez; Lozano; Martinez; Martinez Fischer; Metcalf; Meyer; Meza; Middleton; Miller; Minjarez; Moody; Morales; Morrison; Muñoz; Murphy; Murr; Neave; Nevárez; Noble; Oliverson; Ortega; Pacheco; Paddie; Parker; Patterson; Paul; Perez; Phelan; Price; Ramos; Raney; Raymond; Rodriguez; Rose; Rosenthal; Sanford; Schaefer; Shaheen; Sheffield; Sherman; Shine; Smith; Smithee; Springer; Stephenson; Stickland; Stucky; Swanson; Talarico; Thierry; Thompson, E.; Thompson, S.; Tinderholt; Toth; Turner, C.; Turner, J.; VanDeaver; Walle; White; Wilson; Wray; Wu; Zedler; Zerwas; Zwiener.

Present, not voting — Mr. Speaker(C).

Absent, Excused — Davis, S.; Herrero; Johnson, E.; Johnson, J.D.; Lucio; Romero; Vo.

Absent — Bowers; Clardy; Deshotel; Farrar; Reynolds.

LEAVE OF ABSENCE GRANTED

The following member was granted leave of absence for the remainder of today because of important family business:

Clardy on motion of Ashby.

SB 355 - CONFERENCE COMMITTEE REPORT ADOPTED

Representative Klick submitted the conference committee report on SB 355.

Representative Klick moved to adopt the conference committee report on SB 355.

The motion to adopt the conference committee report on SB 355 prevailed by (Record 1937): 139 Yeas, 0 Nays, 1 Present, not voting.

Yeas — Allen; Allison; Anchia; Anderson; Ashby; Bailes; Beckley; Bell, C.; Bell, K.; Bernal; Biedermann; Blanco; Bohac; Bonnen; Bowers; Buckley; Bucy; Burns; Burrows; Button; Cain; Calanni; Canales; Capriglione; Cole; Coleman; Collier; Cortez; Craddick; Cyrier; Darby; Davis, Y.; Dean; Deshotel; Dominguez; Dutton; Fierro; Flynn; Frank; Frullo; Geren; Gervin-Hawkins; Goldman; González, J.; González, M.; Goodwin; Guerra; Guillen; Gutierrez; Harless; Harris; Hefner; Hernandez; Hinojosa; Holland; Howard; Huberty; Hunter; Israel; Johnson, J.E.; Kacal; King, K.; King, P.; King, T.; Klick; Krause; Kuempel; Lambert; Landgraf; Lang; Larson; Leach; Leman; Longoria; Lopez; Lozano; Martinez; Martinez Fischer; Metcalf; Meyer; Meza; Middleton; Miller; Minjarez; Moody; Morales; Morrison; Muñoz; Murphy; Murr; Neave; Nevárez; Noble; Oliverson; Ortega; Pacheco; Paddie; Parker; Patterson; Paul; Perez; Phelan; Price; Ramos; Raney; Raymond; Rodriguez; Rose; Rosenthal; Sanford; Schaefer; Shaheen; Sheffield; Sherman; Shine; Smith; Smithee; Springer; Stephenson; Stickland; Stucky; Swanson; Talarico; Thierry; Thompson, E.; Thompson, S.; Tinderholt; Toth; Turner, C.; Turner, J.; VanDeaver; Walle; White; Wilson; Wray; Wu; Zedler; Zerwas; Zwiener.

Present, not voting — Mr. Speaker(C).

Absent, Excused — Clardy; Davis, S.; Herrero; Johnson, E.; Johnson, J.D.; Lucio; Romero; Vo.

Absent — Farrar; Reynolds.

REMARKS ORDERED PRINTED

Representative Tinderholt moved to print all remarks on CSSB 29 on May 20.

The motion prevailed. [Please refer to the supplement to the Day 69 journal for the text of the debate on CSSB 29.]

REMARKS ORDERED PRINTED

Representative Stickland moved to print remarks between Representative Cain and Representative C. Turner on CSSB 719 on May 20.

The motion prevailed.

REMARKS ORDERED PRINTED

Representative Stickland moved to print all remarks on CSHB 2100 on April 29.

The motion prevailed. [Please refer to the supplement to the Day 54 journal for the text of the debate on CSHB 2100.]

REMARKS ORDERED PRINTED

Representative Harris moved to print the remarks on the parliamentary inquiry between Representative Tinderholt and the chair on May 24.

The motion prevailed.

BILLS AND RESOLUTIONS SIGNED BY THE SPEAKER

Notice was given at this time that the speaker had signed bills and resolutions in the presence of the house (see the addendum to the daily journal, Signed by the Speaker, Senate List Nos. 28, 29, 30, 31, and 32).

HOUSE AT EASE

At 5:45 p.m., the chair announced that the house would stand at ease.

The chair called the house to order at 7:30 p.m.

(Reynolds now present)

HR 2181 - NOTICE OF INTRODUCTION

Pursuant to Rule 13, Section 9(f), of the House Rules, the chair announced the introduction of HR 2181, suspending the limitations on the conferees for HB 700.

HR 2185 - NOTICE OF INTRODUCTION

Pursuant to Rule 13, Section 9(f), of the House Rules, the chair announced the introduction of HR 2185, suspending the limitations on the conferees for HB 4542.

HR 2187 - NOTICE OF INTRODUCTION

Pursuant to Rule 13, Section 9(f), of the House Rules, the chair announced the introduction of HR 2187, suspending the limitations on the conferees for SB 2342.

HR 2188 - NOTICE OF INTRODUCTION

Pursuant to Rule 13, Section 9(f), of the House Rules, the chair announced the introduction of HR 2188, suspending the limitations on the conferees for SB 891.

HR 2189 - NOTICE OF INTRODUCTION

Pursuant to Rule 13, Section 9(f), of the House Rules, the chair announced the introduction of HR 2189, suspending the limitations on the conferees for SB 1207.

HR 2190 - NOTICE OF INTRODUCTION

Pursuant to Rule 13, Section 9(f), of the House Rules, the chair announced the introduction of HR 2190, suspending the limitations on the conferees for SB 12.

HR 2191 - NOTICE OF INTRODUCTION

Pursuant to Rule 13, Section 9(f), of the House Rules, the chair announced the introduction of HR 2191, suspending the limitations on the conferees for HB 2327.

HR 2193 - NOTICE OF INTRODUCTION

Pursuant to Rule 13, Section 9(f), of the House Rules, the chair announced the introduction of HR 2193, suspending the limitations on the conferees for HB 3745.

HR 2184 - ADOPTED
(by Burrows)

The following privileged resolution was laid before the house:

HR 2184

BE IT RESOLVED by the House of Representatives of the State of Texas, 86th Legislature, Regular Session, 2019, That House Rule 13, Section 9(a), be suspended in part as provided by House Rule 13, Section 9(f), to enable the conference committee appointed to resolve the differences on SB 2 (ad valorem taxation; authorizing fees) to consider and take action on the following matters:

(1) House Rule 13, Section 9(a)(4), is suspended to permit the committee to add text on a matter not included in either the house or senate version of the bill by adding the following new SECTION to the bill:

SECTION 2. Chapter 1, Tax Code, is amended by adding Section 1.045 to read as follows:

Sec. 1.045. REFERENCE TO CERTAIN TERMS IN LAW. Unless the context indicates otherwise:

(1) a reference in law to a taxing unit's effective maintenance and operations rate is a reference to the taxing unit's no-new-revenue maintenance and operations rate, as defined by Chapter 26;

(2) a reference in law to a taxing unit's effective tax rate is a reference to the taxing unit's no-new-revenue tax rate, as defined by Chapter 26; and

(3) a reference in law to a taxing unit's rollback tax rate is a reference to the taxing unit's voter-approval tax rate, as defined by Chapter 26.

Explanation: The addition is necessary to ensure that references in other law to terms in Title 1 of the Tax Code that are changed in the bill are construed in accordance with the way those terms are used in the bill.

(2) House Rule 13, Section 9(a)(1), is suspended to permit the committee to amend text not in disagreement in proposed SECTION 36 of the bill, in added Section 26.04(c-1)(2), Tax Code, to read as follows:

(2) the third tax year after the tax year in which the disaster occurred.

Explanation: The change is necessary to limit the period of time during which certain taxing units may calculate the voter-approval tax rate of the taxing unit at a higher rate following certain disasters.

(3) House Rule 13, Section 9(a)(1), is suspended to permit the committee to amend text not in disagreement in proposed SECTION 36 of the bill, in amended Section 26.04(e), Tax Code, to read as follows:

(e) By August 7 or as soon thereafter as practicable, the designated officer or employee shall submit the rates to the governing body. The designated officer or employee [He] shall post prominently on the home page of the taxing unit's Internet website [~~deliver by mail to each property owner in the unit or publish in a newspaper~~] in the form prescribed by the comptroller:

(1) the no-new-revenue [~~effective~~] tax rate, the voter-approval [~~rollback~~] tax rate, and an explanation of how they were calculated;

(2) the estimated amount of interest and sinking fund balances and the estimated amount of maintenance and operation or general fund balances remaining at the end of the current fiscal year that are not encumbered with or by corresponding existing debt obligation; and

(3) a schedule of the taxing unit's debt obligations showing:

(A) the amount of principal and interest that will be paid to service the taxing unit's debts in the next year from property tax revenue, including payments of lawfully incurred contractual obligations providing security for the payment of the principal of and interest on bonds and other evidences of indebtedness issued on behalf of the taxing unit by another political subdivision and, if the taxing unit is created under Section 52, Article III, or Section 59, Article XVI, Texas Constitution, payments on debts that the taxing unit anticipates to incur in the next calendar year;

(B) the amount by which taxes imposed for debt are to be increased because of the taxing unit's anticipated collection rate; and

(C) the total of the amounts listed in Paragraphs (A)-(B), less any amount collected in excess of the previous year's anticipated collections certified as provided in Subsection (b)[;

[~~(4)~~ ~~the amount of additional sales and use tax revenue anticipated in calculations under Section 26.041;~~

[~~(5)~~ a statement that the adoption of a tax rate equal to the effective tax rate would result in an increase or decrease, as applicable, in the amount of taxes imposed by the unit as compared to last year's levy, and the amount of the increase or decrease;

[~~(6)~~ ~~in the year that a taxing unit calculates an adjustment under Subsection (i) or (j), a schedule that includes the following elements:~~

[~~(A)~~ ~~the name of the unit discontinuing the department, function, or activity;~~

[~~(B)~~ the amount of property tax revenue spent by the unit listed under Paragraph (A) to operate the discontinued department, function, or activity in the 12 months preceding the month in which the calculations required by this chapter are made; and

[~~(C)~~ the name of the unit that operates a distinct department, function, or activity in all or a majority of the territory of a taxing unit that has discontinued operating the distinct department, function, or activity; and

[~~(7)~~ ~~in the year following the year in which a taxing unit raised its rollback rate as required by Subsection (j), a schedule that includes the following elements:~~

[~~(A)~~ the amount of property tax revenue spent by the unit to operate the department, function, or activity for which the taxing unit raised the rollback rate as required by Subsection (j) for the 12 months preceding the month in which the calculations required by this chapter are made; and

[~~(B)~~ ~~the amount published by the unit in the preceding tax year under Subdivision (6)(B)~~].

Explanation: The change is necessary to remove the requirement that the designated officer or employee of a taxing unit publish certain tax information in a newspaper.

(4) House Rule 13, Section 9(a)(1), is suspended to permit the committee to amend text not in disagreement in proposed SECTION 37 of the bill, in added Section 26.041(c-1)(2), Tax Code, to read as follows:

(2) the third tax year after the tax year in which the disaster occurred.

(5) House Rule 13, Section 9(a)(4), is suspended to permit the committee to add text on a matter not included in either the house or senate version of the bill in proposed SECTION 43 of the bill by adding the following new Section 26.0443, Tax Code, to the bill:

Sec. 26.0443. TAX RATE ADJUSTMENT FOR ELIGIBLE COUNTY HOSPITAL EXPENDITURES. (a) In this section:

(1) "Eligible county hospital" means a hospital that:

(A) is:

(i) owned or leased by a county and operated in accordance with Chapter 263, Health and Safety Code; or

(ii) owned or leased jointly by a municipality and a county and operated in accordance with Chapter 265, Health and Safety Code; and

(B) is located in an area not served by a hospital district created under Sections 4 through 11, Article IX, Texas Constitution.

(2) "Eligible county hospital expenditures" for a tax year means the amount paid by a county or municipality in the period beginning on July 1 of the tax year preceding the tax year for which the tax is adopted and ending on June 30 of the tax year for which the tax is adopted to maintain and operate an eligible county hospital.

(b) If a county's or municipality's eligible county hospital expenditures exceed the amount of those expenditures for the preceding tax year, the no-new-revenue maintenance and operations rate for the county or municipality, as applicable, is increased by the lesser of the rates computed according to the following formulas:

(Current Tax Year's Eligible County Hospital Expenditures - Preceding Tax Year's Eligible County Hospital Expenditures) / (Current Total Value - New Property Value)

(Preceding Tax Year's Eligible County Hospital Expenditures x 0.08) / (Current Total Value - New Property Value)

(c) The county or municipality shall include a notice of the increase in the no-new-revenue maintenance and operations rate provided by this section, including a description and amount of eligible county hospital expenditures, in the information published under Section 26.04(e) and, as applicable, in the notice prescribed by Section 26.06 or 26.061.

Explanation: The addition is necessary to add a provision to Title 1 of the Tax Code to provide for a tax rate adjustment for eligible county hospital expenditures.

(6) House Rule 13, Section 9(a)(1), is suspended to permit the committee to amend text not in disagreement in proposed SECTION 48 of the bill, in amended Section 26.06(a), Tax Code, to read as follows:

(a) A public hearing required by Section 26.05 may not be held before the fifth [~~seventh~~] day after the date the notice of the public hearing is given. The [~~second hearing may not be held earlier than the third day after the date of the first hearing. Each~~] hearing must be on a weekday that is not a public holiday. The [~~Each~~] hearing must be held inside the boundaries of the unit in a publicly owned building or, if a suitable publicly owned building is not available, in a suitable building to which the public normally has access. At the hearing [~~hearings~~], the governing body must afford adequate opportunity for proponents and opponents of the tax increase to present their views.

Explanation: The change is necessary to prohibit holding a public hearing on certain proposed tax rates before the fifth day after the date the notice of hearing is given.

(7) House Rule 13, Section 9(a)(1), is suspended to permit the committee to amend text not in disagreement in proposed SECTION 48 of the bill, in added Sections 26.06(b-1) and (b-3), Tax Code, in the language of the statement prescribed by those subsections that describes the effect of the rejection by the voters of the proposed tax rate, to read as follows:

If a majority of the voters reject the proposed tax rate, the tax rate of the (name of taxing unit) will be the voter-approval tax rate.

Explanation: The change is necessary to provide notice of what tax rate applies to a taxing unit in a tax year if the voters reject a proposed tax rate that exceeds the voter-approval tax rate.

(8) House Rule 13, Section 9(a)(3), is suspended to permit the committee to add text on a matter not in disagreement in SECTION 48 of the bill, in added Sections 26.06(b-1), (b-2), and (b-3), Tax Code, to read as follows:

"The 86th Texas Legislature modified the manner in which the voter-approval tax rate is calculated to limit the rate of growth of property taxes in the state."

Explanation: The addition is necessary to require that the notice of a public hearing on certain proposed tax rates include a statement that the 86th Texas Legislature modified the manner in which the voter-approval tax rate is calculated.

(9) House Rule 13, Section 9(a)(1), is suspended to permit the committee to amend text not in disagreement in proposed SECTION 48 of the bill, in amended Sections 26.06(d) and (e), Tax Code, to read as follows:

(d) The governing body may vote on the proposed tax rate at the public hearing. If the governing body does not vote on the proposed tax rate at the public hearing, [~~At the public hearings~~] the governing body shall announce at the public hearing the date, time, and place of the meeting at which it will vote on the proposed tax rate. [After each hearing the governing body shall give notice of the meeting at which it will vote on the proposed tax rate and the notice shall be in the same form as prescribed by Subsections (b) and (c), except that it must state the following:

[~~"NOTICE OF TAX REVENUE INCREASE~~

["The (name of the taxing unit) conducted public hearings on (date of first hearing) and (date of second hearing) on a proposal to increase the total tax revenues of the (name of the taxing unit) from properties on the tax roll in the preceding year by (percentage by which proposed tax rate exceeds lower of rollback tax rate or effective tax rate calculated under this chapter) percent.

["The total tax revenue proposed to be raised last year at last year's tax rate of (insert tax rate for the preceding year) for each $100 of taxable value was (insert total amount of taxes imposed in the preceding year).

["The total tax revenue proposed to be raised this year at the proposed tax rate of (insert proposed tax rate) for each $100 of taxable value, excluding tax revenue to be raised from new property added to the tax roll this year, is (insert amount computed by multiplying proposed tax rate by the difference between current total value and new property value).

["The total tax revenue proposed to be raised this year at the proposed tax rate of (insert proposed tax rate) for each $100 of taxable value, including tax revenue to be raised from new property added to the tax roll this year, is (insert amount computed by multiplying proposed tax rate by current total value).

["The (governing body of the taxing unit) is scheduled to vote on the tax rate that will result in that tax increase at a public meeting to be held on (date of meeting) at (location of meeting, including mailing address) at (time of meeting).

[~~"The (governing body of the taxing unit) proposes to use the increase in total tax revenue for the purpose of (description of purpose of increase)."~~]

(e) A [~~The~~] meeting to vote on the tax increase may not be held [~~earlier than the third day or~~] later than the seventh [~~14th~~] day after the date of the [~~second~~] public hearing. The meeting must be held inside the boundaries of the taxing unit in a publicly owned building or, if a suitable publicly owned building is not available, in a suitable building to which the public normally has access. [If the governing body does not adopt a tax rate that exceeds the lower of the rollback tax rate or the effective tax rate by the 14th day, it must give a new notice under Subsection (d) before it may adopt a rate that exceeds the lower of the rollback tax rate or the effective tax rate.]

Explanation: The changes are necessary to provide the manner in which the governing body of a taxing unit must in certain circumstances provide notice of the meeting at which the governing body will adopt the taxing unit's proposed tax rate.

(10) House Rule 13, Section 9(a)(3), is suspended to permit the committee to add text on a matter not in disagreement in SECTION 49 of the bill, in added Section 26.061(b), Tax Code, to read as follows:

"The 86th Texas Legislature modified the manner in which the voter-approval tax rate is calculated to limit the rate of growth of property taxes in the state."

Explanation: The addition is necessary to require that the notice of a meeting on certain proposed tax rates include a statement that the 86th Texas Legislature modified the manner in which the voter-approval tax rate is calculated.

(11) House Rule 13, Section 9(a)(1), is suspended to permit the committee to amend text not in disagreement in proposed SECTION 57 of the bill, in added Section 26.16(d-2), Tax Code, to read as follows:

(d-2) Not later than August 7, the county assessor-collector shall post on the website the tax rate calculation forms described by Subsection (d-1)(1) for the current tax year.

Explanation: The change is necessary to give the county assessor-collector of a county more time to post certain tax rate calculation forms on the Internet.

(12) House Rule 13, Section 9(a)(3), is suspended to permit the committee to add text on a matter not in disagreement in SECTION 57 of the bill, in added Section 26.17(a), Tax Code, to read as follows:

(6) includes the following statement: "The 86th Texas Legislature modified the manner in which the voter-approval tax rate is calculated to limit the rate of growth of property taxes in the state.".

Explanation: The addition is necessary to require the chief appraiser of an appraisal district to include in a property tax database a statement that the 86th Texas Legislature modified the manner in which the voter-approval tax rate is calculated.

(13) House Rule 13, Section 9(a)(1), is suspended to permit the committee to amend text not in disagreement in proposed SECTION 58 of the bill, in amended Section 31.12(b)(2), Tax Code, to read as follows:

(2) if the refund is required by Section 26.07(g) or 26.075(k), on the date the results of the election to approve or reduce the tax rate, as applicable, are certified;

Explanation: The change is necessary to change the date on which liability for certain tax refunds arises.

(14) House Rule 13, Section 9(a)(3), is suspended to permit the committee to add text on a matter not in disagreement in SECTION 66 of the bill, in amended Section 41.66, Tax Code, to read as follows:

(j-2) An appraisal review board must schedule a hearing on a protest filed by a property owner who is 65 years of age or older, disabled, a military service member, a military veteran, or the spouse of a military service member or military veteran before scheduling a hearing on a protest filed by a designated agent of a property owner.

Explanation: The addition is necessary to require an appraisal review board to schedule a hearing on a protest filed by certain persons before those of other persons.

(15) House Rule 13, Section 9(a)(2), is suspended to permit the committee to omit text not in disagreement by omitting SECTION 68 of the senate engrossment of SB 2 and the corresponding section of the bill as the bill was amended by the house, which reads as follows:

SECTION 68. Section 45.105(e), Education Code, is amended to read as follows:

(e) The governing body of an independent school district that governs a junior college district under Subchapter B, Chapter 130, in a county with a population of more than two million may dedicate a specific percentage of the local tax levy to the use of the junior college district for facilities and equipment or for the maintenance and operating expenses of the junior college district. To be effective, the dedication must be made by the governing body on or before the date on which the governing body adopts its tax rate for a year. The amount of local tax funds derived from the percentage of the local tax levy dedicated to a junior college district from a tax levy may not exceed the amount that would be levied by five percent of the no-new-revenue [~~effective~~] tax rate for the tax year calculated as provided by Section 26.04, Tax Code, on all property taxable by the school district. All real property purchased with these funds is the property of the school district, but is subject to the exclusive control of the governing body of the junior college district for as long as the junior college district uses the property for educational purposes.

Explanation: The omission is necessary to ensure consistency of terminology used in the Education Code to describe certain tax rates.

(16) House Rule 13, Section 9(a)(4), is suspended to permit the committee to add text on a matter not included in either the house or senate version of the bill by adding the following new SECTIONS to the bill:

SECTION 76. Section 281.107(j), Health and Safety Code, is amended to read as follows:

(j) The portion of the rate of ad valorem tax that is to be levied and assessed each year by or for the district that is allocated by the district to the payment of the principal of and the interest on bonds and other obligations or the maintenance of reserves therefor in accordance with this section shall be applied as a payment on current debt in calculating the current debt rate under the applicable voter-approval tax rate [~~rollback~~] provisions of Chapter 26, Tax Code.

SECTION 77. The heading to Section 281.124, Health and Safety Code, is amended to read as follows:

Sec. 281.124. ELECTION TO APPROVE TAX RATE IN EXCESS OF VOTER-APPROVAL [~~ROLLBACK~~] TAX RATE.

Explanation: The addition is necessary to ensure consistency of terminology used in the Health and Safety Code and Title 1 of the Tax Code to describe certain tax rates.

(17) House Rule 13, Section 9(a)(3), is suspended to permit the committee to add text on a matter not in disagreement in SECTION 78 of the bill, in amended Section 281.124, Health and Safety Code, to read as follows:

(b) The board may hold an election at which the registered voters of the district may approve a tax rate for the current tax year that exceeds the district's voter-approval [~~rollback~~] tax rate for the year computed under Chapter 26, Tax Code, by a specific rate stated in dollars and cents per $100 of taxable value.

(c) An election under this section must be held at least 180 days before the date on which the district's tax rate is adopted by the board. At the election, the ballot shall be prepared to permit voting for or against the proposition: "Approving the ad valorem tax rate of $ (insert total proposed tax rate) per $100 valuation in (insert district name) for the (insert current tax year) tax year, a rate that exceeds the district's voter-approval [~~rollback~~] tax rate. The proposed ad valorem tax rate exceeds the ad valorem tax rate most recently adopted by the district by $ (insert difference between proposed and preceding year's tax rates) per $100 valuation."

Explanation: The addition is necessary to ensure consistency of terminology used in the Health and Safety Code and Title 1 of the Tax Code to describe certain tax rates.

(18) House Rule 13, Section 9(a)(4), is suspended to permit the committee to add text on a matter not included in either the house or senate version of the bill by adding the following new SECTION to the bill:

SECTION 85. Section 49.057, Water Code, is amended by amending Subsection (b) and adding Subsection (b-1) to read as follows:

(b) The board shall adopt an annual budget. The board of a developed district, as defined by Section 49.23602, shall include as an appendix to the budget the district's:

(1) audited financial statements;

(2) bond transcripts; and

(3) engineer's reports required by Section 49.106.

(b-1) All district employees are employed at the will of the district unless the district and employee execute a written employment contract.

Explanation: The addition is necessary to ensure that the board of certain special districts includes an appendix in the district's budget that includes certain information.

(19) House Rule 13, Section 9(a)(1), is suspended to permit the committee to amend text not in disagreement in proposed SECTION 105 of the bill, in the transition language, to read as follows:

SECTION 105. (a) An appraisal district established in a county with a population of 200,000 or more and each taxing unit located wholly or primarily in such an appraisal district shall comply with Sections 26.04(e-2), 26.05(d-1) and (d-2), 26.17, and 26.18, Tax Code, as added by this Act, beginning with the 2020 tax year.

(b) An appraisal district established in a county with a population of less than 200,000 and each taxing unit located wholly or primarily in such an appraisal district shall comply with Sections 26.04(e-2), 26.05(d-1) and (d-2), 26.17, and 26.18, Tax Code, as added by this Act, beginning with the 2021 tax year.

Explanation: The change is necessary to provide for the applicability and implementation of certain provisions of the Tax Code added by the bill.

(20) House Rule 13, Section 9(a)(1), is suspended to permit the committee to amend text not in disagreement in proposed SECTION 111 of the bill, in the transition language, to read as follows:

SECTION 111. Sections 41.46, 41.461, 41.47, 41.66(h), (i), and (j), and 41.67, Tax Code, as amended by this Act, and Sections 41.66(j-1), (j-2), and (p), Tax Code, as added by this Act, apply only to a protest for which the notice of protest was filed by a property owner or the designated agent of the owner with the appraisal review board established for an appraisal district on or after January 1, 2020.

Explanation: The change is necessary to provide for the implementation of certain provisions of the Tax Code added by the bill.

(21) House Rule 13, Section 9(a)(4), is suspended to permit the committee to add text on a matter not included in either the house or senate version of the bill by adding the following new SECTIONS to the bill:

SECTION 115. Section 42.081, Tax Code, as added by this Act, applies only to an appeal under Chapter 42, Tax Code, that is filed on or after January 1, 2020.

SECTION 117. Section 49.057, Water Code, as amended by this Act, applies only to a budget adopted on or after January 1, 2020.

Explanation: The changes are necessary to provide for the implementation of certain provisions of the Tax Code and Water Code added by the bill.

(22) House Rule 13, Section 9(a)(2), is suspended to permit the committee to omit text not in disagreement in SECTION 110 of the senate engrossment of SB 2 and the corresponding section of the bill as the bill was amended by the house by striking references to Sections 26.04(e-2), (e-3), and (e-4) and Sections 26.05(d-1) and (d-2), Tax Code.

Explanation: The omission is necessary to implement the changes made in SECTION 105 by the bill.

HR 2184 was adopted by (Record 1938): 116 Yeas, 19 Nays, 1 Present, not voting.

Yeas — Allen; Allison; Anchia; Anderson; Ashby; Bailes; Bell, C.; Bell, K.; Biedermann; Blanco; Bohac; Bonnen; Buckley; Bucy; Burns; Burrows; Button; Cain; Calanni; Canales; Capriglione; Coleman; Cortez; Craddick; Cyrier; Darby; Dean; Dominguez; Fierro; Flynn; Frank; Frullo; Geren; Goldman; Goodwin; Guerra; Guillen; Gutierrez; Harless; Harris; Hefner; Hinojosa; Holland; Howard; Huberty; Hunter; Israel; Johnson, J.E.; Kacal; King, K.; King, P.; King, T.; Klick; Krause; Kuempel; Lambert; Landgraf; Lang; Larson; Leach; Leman; Longoria; Lozano; Martinez; Martinez Fischer; Metcalf; Meyer; Middleton; Miller; Moody; Morrison; Muñoz; Murphy; Murr; Nevárez; Noble; Oliverson; Ortega; Pacheco; Paddie; Parker; Patterson; Paul; Phelan; Price; Raney; Raymond; Rodriguez; Rosenthal; Sanford; Schaefer; Shaheen; Sheffield; Shine; Smith; Smithee; Springer; Stephenson; Stickland; Stucky; Swanson; Talarico; Thompson, E.; Tinderholt; Toth; Turner, C.; Turner, J.; VanDeaver; Walle; White; Wilson; Wray; Wu; Zedler; Zerwas; Zwiener.

Nays — Beckley; Cole; Collier; Davis, Y.; Gervin-Hawkins; González, J.; González, M.; Hernandez; Lopez; Meza; Minjarez; Morales; Neave; Perez; Ramos; Reynolds; Sherman; Thierry; Thompson, S.

Present, not voting — Mr. Speaker(C).

Absent, Excused — Clardy; Davis, S.; Herrero; Johnson, E.; Johnson, J.D.; Lucio; Romero; Vo.

Absent — Bernal; Bowers; Deshotel; Dutton; Farrar; Rose.

STATEMENTS OF VOTE

When Record No. 1938 was taken, I was shown voting yes. I intended to vote no.

Calanni

When Record No. 1938 was taken, I was shown voting no. I intended to vote yes.

Neave

LEAVE OF ABSENCE GRANTED

The following member was granted leave of absence for the remainder of today because of important business:

Dutton on motion of K. King.

SB 2 - CONFERENCE COMMITTEE REPORT ADOPTED

Representative Burrows submitted the conference committee report on SB 2.

Representative Burrows moved to adopt the conference committee report on SB 2.

The motion to adopt the conference committee report on SB 2 prevailed by (Record 1939): 88 Yeas, 50 Nays, 0 Present, not voting.

Yeas — Mr. Speaker(C); Allison; Anderson; Ashby; Bailes; Bell, C.; Bell, K.; Biedermann; Bohac; Bonnen; Buckley; Burns; Burrows; Button; Cain; Canales; Capriglione; Craddick; Cyrier; Darby; Dean; Flynn; Frank; Frullo; Geren; Goldman; Guerra; Guillen; Harless; Harris; Hefner; Holland; Huberty; Hunter; Kacal; King, K.; King, P.; Klick; Krause; Kuempel; Lambert; Landgraf; Lang; Larson; Leach; Leman; Longoria; Lozano; Metcalf; Meyer; Middleton; Miller; Morrison; Muñoz; Murphy; Murr; Noble; Oliverson; Pacheco; Paddie; Parker; Patterson; Paul; Phelan; Price; Raney; Raymond; Sanford; Schaefer; Shaheen; Sheffield; Shine; Smith; Smithee; Springer; Stephenson; Stickland; Stucky; Swanson; Thompson, E.; Tinderholt; Toth; VanDeaver; White; Wilson; Wray; Zedler; Zerwas.

Nays — Allen; Anchia; Beckley; Blanco; Bowers; Bucy; Calanni; Cole; Coleman; Collier; Cortez; Davis, Y.; Deshotel; Dominguez; Fierro; Gervin-Hawkins; González, J.; González, M.; Goodwin; Gutierrez; Hernandez; Hinojosa; Howard; Israel; Johnson, J.E.; Lopez; Martinez; Martinez Fischer; Meza; Minjarez; Moody; Morales; Neave; Nevárez; Ortega; Perez; Ramos; Reynolds; Rodriguez; Rose; Rosenthal; Sherman; Talarico; Thierry; Thompson, S.; Turner, C.; Turner, J.; Walle; Wu; Zwiener.

Absent, Excused — Clardy; Davis, S.; Dutton; Herrero; Johnson, E.; Johnson, J.D.; Lucio; Romero; Vo.

Absent — Bernal; Farrar; King, T.

STATEMENTS OF VOTE

When Record No. 1939 was taken, I was excused because of illness in the family. I would have voted yes.

S. Davis

When Record No. 1939 was taken, I was excused because of family business. I would have voted yes.

Romero

HR 2186 - ADOPTED
(by Huberty)

The following privileged resolution was laid before the house:

HR 2186

BE IT RESOLVED by the House of Representatives of the State of Texas, 86th Legislature, Regular Session, 2019, That House Rule 13, Section 9(a), be suspended in part as provided by House Rule 13, Section 9(f), to enable the conference committee appointed to resolve the differences on HB 3 (public school finance and public education; creating a criminal offense; authorizing the imposition of a fee) to consider and take action on the following matters:

(1) House Rule 13, Section 9(a)(1), is suspended to permit the committee to amend text not in disagreement in proposed SECTION 1.004 of the bill, amending Section 25.084, Education Code, to read as follows:

SECTION 1.004. (a) Effective September 1, 2019, Section 25.084(b), Education Code, is amended to read as follows:

(b) The operation of schools year-round by a district does not affect the amount of state funds to which the district is entitled under Chapter 48 [42].

(b) Effective September 1, 2020, Section 25.084, Education Code, is amended by amending Subsection (b) and adding Subsection (c) to read as follows:

Explanation: The change is necessary to delay the implementation of certain provisions of Section 25.084, Education Code.

(2) House Rule 13, Section 9(a)(3), is suspended to permit the committee to add text on a matter not in disagreement in proposed SECTION 1.009 of the bill, in added Section 45.0032(e), Education Code, to read as follows:

(e) For the 2019 tax year, Section 48.202(f) applies to a district's maintenance and operations tax rate after adjusting the district's rate in accordance with this section. This subsection expires September 1, 2020.

Explanation: The addition is necessary to determine the application of Section 48.202(f), Education Code, to a school district's maintenance and operations tax rate for the 2019 tax year.

(3) House Rule 13, Section 9(a)(1), is suspended to permit the committee to amend text not in disagreement in proposed SECTION 1.014 of the bill, adding Section 48.0051, Education Code, to read as follows:

SECTION 1.014. Effective September 1, 2020, Subchapter A, Chapter 48, Education Code, as added by this Act, is amended by adding Section 48.0051 to read as follows:

Explanation: The change is necessary to delay the implementation of Section 48.0051, Education Code.

(4) House Rule 13, Section 9(a)(3), is suspended to permit the committee to add text on a matter not in disagreement in SECTION 1.014 of the bill, in added Section 48.0051, Education Code, to read as follows:

(f) A school district or open-enrollment charter school may use funding attributable to the incentive provided under this section to pay costs associated with providing academic instruction in a voluntary summer program for students enrolled in the district or school.

Explanation: The addition is necessary to allow school districts and open-enrollment charter schools to use certain funding to pay costs associated with certain summer programs.

(5) House Rule 13, Section 9(a)(1), is suspended to permit the committee to amend text not in disagreement in proposed SECTION 1.015 of the bill, in transferred, redesignated, and amended Sections 48.006(a) and (c), Education Code, to read as follows:

(a) The [~~From funds specifically appropriated for the purpose or other funds available to the commissioner for that purpose, the~~] commissioner may [~~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.

(c) The commissioner may [~~shall~~] make the adjustment under [~~required by~~] this section for the two-year period following the date of the governor's initial proclamation or executive order declaring the state of disaster.

Explanation: The changes are necessary to give the commissioner discretion in adjusting the average daily attendance of a school district located wholly or partly in a disaster area.

(6) House Rule 13, Section 9(a)(3), is suspended to permit the committee to add text on a matter not in disagreement in proposed SECTION 1.019 of the bill, in added Sections 48.011(a-1), (b), and (d), Education Code, to read as follows:

(a-1) The commissioner may modify dates relating to the adoption of a school district's maintenance and operations tax rate and, if applicable, an election required for the district to adopt that rate as necessary to implement the changes made by HB 3, 86th Legislature, Regular Session, 2019.

(b) Before making an adjustment under Subsection (a) or (a-1), the commissioner shall notify and must receive approval from the Legislative Budget Board and the office of the governor.

(d) Beginning with the 2021-2022 school year, the commissioner may not make an adjustment under Subsection (a) or (a-1).

Explanation: The addition is necessary to permit the commissioner to modify dates relating to a school district's maintenance and operations tax rate after receiving approval from the Legislative Budget Board and the office of the governor until the beginning of the 2021-2022 school year.

(7) House Rule 13, Section 9(a)(3), is suspended to permit the committee to add text on a matter not in disagreement in proposed SECTION 1.021 of the bill, in transferred, redesignated, and amended Section 48.051, Education Code, to read as follows:

(d) In this section, "compensation" includes benefits such as insurance premiums.

Explanation: The addition is necessary to include benefits in the definition of "compensation."

(8) House Rule 13, Section 9(a)(3), is suspended to permit the committee to add text on a matter not in disagreement in proposed SECTION 1.024 of the bill, in added Section 48.101, Education Code, to read as follows:

(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 .00047) X BA

Explanation: The addition is necessary to provide an allotment for school districts with fewer than 300 students in average daily attendance that are the only district located in and operating in a county.

(9) House Rule 13, Section 9(a)(1), is suspended to permit the committee to amend text not in disagreement in proposed SECTION 1.025 of the bill, in transferred, redesignated, and amended Section 48.102(h), Education Code, to read as follows:

(h) At least 55 percent of the funds [~~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.

Explanation: The change is necessary to require a certain percentage of funding provided by the special education allotment to be used for a special education program under Subchapter A, Chapter 29, Education Code.

(10) House Rule 13, Section 9(a)(4), is suspended to permit the committee to add text on a matter not included in either the house or senate version of the bill by adding the following new language to proposed SECTION 1.031 of the bill:

Sec. 48.1101. STUDY ON ALTERNATIVE CAREER READINESS MEASURES FOR SMALL AND RURAL DISTRICTS. (a) The agency shall conduct a study on alternative career readiness measures for small and rural school districts to determine if annual graduates demonstrate career readiness under Section 48.110(f)(2)(B).

(b) Not later than January 1, 2021, the agency shall submit to the legislature a report on the results of the study and any recommendations for legislative or other action.

Explanation: The addition is necessary to require a study on alternative career readiness measures for small and rural school districts to determine if annual graduates demonstrate career readiness.

(11) House Rule 13, Section 9(a)(3), is suspended to permit the committee to add text on a matter not in disagreement in proposed SECTION 1.031 of the bill, in added Section 48.112(g), Education Code, to read as follows:

(g) A district is entitled to receive an increased allotment under this section in the amount necessary for reimbursement for any fees paid under Section 21.3521.

Explanation: The addition is necessary to permit a school district to receive an allotment in an amount necessary for reimbursement for fees paid under Section 21.3521, Education Code.

(12) House Rule 13, Section 9(a)(3), is suspended to permit the committee to add text on a matter not in disagreement in proposed SECTION 1.038 of the bill, in transferred, redesignated, and amended Section 48.202, Education Code, to read as follows:

(f-1) Notwithstanding Subsection (f), for the 2019-2020 school year, the reduction of a school district's tax rate required under Subsection (f) applies to the district's total enrichment tax rate under Section 45.0032(b) minus eight cents. This subsection expires September 1, 2020.

Explanation: The addition is necessary to determine the portion of a school district's enrichment tax rate to which the reduction required under Section 48.202(f-1), Education Code, applies for the 2019-2020 school year.

(13) House Rule 13, Section 9(a)(3), is suspended to permit the committee to add text on a matter not in disagreement in proposed SECTION 1.040 of the bill, in transferred, redesignated and amended Section 48.256, Education Code, to read as follows:

(d) This subsection applies to a school district in which the board of trustees entered into a written agreement with a property owner under Section 313.027, Tax Code, for the implementation of a limitation on appraised value under Subchapter B or C, Chapter 313, Tax Code. For purposes of determining "DPV" under Subsection (a) for a school district to which this subsection applies, the commissioner shall exclude a portion of the market value of property not otherwise fully taxable by the district under Subchapter B or C, Chapter 313, Tax Code, before the expiration of the subchapter. The comptroller shall provide information to the agency necessary for this subsection. A revenue protection payment required as part of an agreement for a limitation on appraised value shall be based on the district's taxable value of property for the preceding tax year.

(e) Subsection (d) does not apply to property that was the subject of an application under Subchapter B or C, Chapter 313, Tax Code, made after May 1, 2009, that the comptroller recommended should be disapproved. [~~A school district must raise its total local share of the Foundation School Program to be eligible to receive foundation school fund payments.~~]

Explanation: The addition is necessary to determine "DPV" for a school district that has entered into an agreement for the implementation of a limitation on appraised value under Subchapter B or C, Chapter 313, Tax Code.

(14) House Rule 13, Section 9(a)(1), is suspended to permit the committee to amend text not in disagreement in proposed SECTION 1.041 of the bill, in added Sections 48.257(a) and (b), Education Code, to read as follows:

(a) Subject to Subsection (b), if a school district's tier one local share under Section 48.256 exceeds the district's entitlement under Section 48.266(a)(1) less the district's distribution from the state available school fund, the district must reduce the district's tier one revenue level in accordance with Chapter 49 to a level not to exceed the district's entitlement under Section 48.266(a)(1) less the district's distribution from the state available school fund.

(b) This subsection applies only to a school district to which Subsection (a) applies. If a district's maintenance and operations tax collections from the tax rate described by Section 45.0032(a) for the current tax year minus the required reduction in a district's tier one revenue level under Subsection (a) results in an amount that is less than the amount of the district's entitlement under Section 48.266(a)(1) less the district's distribution from the state available school fund, the agency shall adjust the amount of the reduction required in the district's tier one revenue level under Subsection (a) up to the amount of local funds necessary for the district's entitlement under Section 48.266(a)(1) less the district's distribution from the state available school fund.

Explanation: The change is necessary to determine the amount by which a school district is required to reduce the district's local revenue level under Section 48.257(a), Education Code, to a level not to exceed the district's entitlement less the district's distribution from the state available school fund.

(15) House Rule 13, Section 9(a)(4), is suspended to permit the committee to add text on a matter not included in either the house or senate version of the bill by adding the following new SECTION to proposed ARTICLE 1 of the bill:

SECTION 1.046. Subchapter G, Chapter 48, Education Code, as added by this Act, is amended by adding Section 48.302 to read as follows:

Sec. 48.302. SUBSIDY FOR HIGH SCHOOL EQUIVALENCY EXAMINATION FOR CERTAIN INDIVIDUALS. (a) In this section, "commission" means the Texas Workforce Commission.

(b) The agency shall enter into a memorandum of understanding with the commission for the agency to transfer to the commission funds specifically appropriated to the agency for the commission to provide to an individual who is 21 years of age or older a subsidy in an amount equal to the cost of taking one high school equivalency examination administered under Section 7.111.

(c) The commission shall adopt rules to implement the subsidy program described by Subsection (b), including rules regarding eligibility requirements.

Explanation: The addition is necessary to provide for a subsidy for certain individuals to take a high school equivalency examination.

(16) House Rule 13, Section 9(a)(4), is suspended to permit the committee to add text on a matter not included in either the house or senate version of the bill by adding proposed SECTION 1.061 to the bill, amending Section 403.302(d), Government Code, to read as follows:

SECTION 1.061. Section 403.302(d), Government Code, is amended to read as follows:

(d) For the purposes of this section, "taxable value" means the market value of all taxable property less:

(1) the total dollar amount of any residence homestead exemptions lawfully granted under Section 11.13(b) or (c), Tax Code, in the year that is the subject of the study for each school district;

(2) one-half of the total dollar amount of any residence homestead exemptions granted under Section 11.13(n), Tax Code, in the year that is the subject of the study for each school district;

(3) the total dollar amount of any exemptions granted before May 31, 1993, within a reinvestment zone under agreements authorized by Chapter 312, Tax Code;

(4) subject to Subsection (e), the total dollar amount of any captured appraised value of property that:

(A) is within a reinvestment zone created on or before May 31, 1999, or is proposed to be included within the boundaries of a reinvestment zone as the boundaries of the zone and the proposed portion of tax increment paid into the tax increment fund by a school district are described in a written notification provided by the municipality or the board of directors of the zone to the governing bodies of the other taxing units in the manner provided by former Section 311.003(e), Tax Code, before May 31, 1999, and within the boundaries of the zone as those boundaries existed on September 1, 1999, including subsequent improvements to the property regardless of when made;

(B) generates taxes paid into a tax increment fund created under Chapter 311, Tax Code, under a reinvestment zone financing plan approved under Section 311.011(d), Tax Code, on or before September 1, 1999; and

(5) the total dollar amount of any captured appraised value of property that:

(A) is within a reinvestment zone:

(i) created on or before December 31, 2008, by a municipality with a population of less than 18,000; and

(ii) the project plan for which includes the alteration, remodeling, repair, or reconstruction of a structure that is included on the National Register of Historic Places and requires that a portion of the tax increment of the zone be used for the improvement or construction of related facilities or for affordable housing;

(B) generates school district taxes that are paid into a tax increment fund created under Chapter 311, Tax Code; and

(6) the total dollar amount of any exemptions granted under Section 11.251 or 11.253, Tax Code;

(7) the difference between the comptroller's estimate of the market value and the productivity value of land that qualifies for appraisal on the basis of its productive capacity, except that the productivity value estimated by the comptroller may not exceed the fair market value of the land;

(8) the portion of the appraised value of residence homesteads of individuals who receive a tax limitation under Section 11.26, Tax Code, on which school district taxes are not imposed in the year that is the subject of the study, calculated as if the residence homesteads were appraised at the full value required by law;

(9) a portion of the market value of property not otherwise fully taxable by the district at market value because of[:

[~~(A)~~] action required by statute or the constitution of this state, other than Section 11.311, Tax Code, that, if the tax rate adopted by the district is applied to it, produces an amount equal to the difference between the tax that the district would have imposed on the property if the property were fully taxable at market value and the tax that the district is actually authorized to impose on the property, if this subsection does not otherwise require that portion to be deducted; [or

[~~(B)~~ ~~action taken by the district under Subchapter B or C, Chapter 313, Tax Code, before the expiration of the subchapter;~~]

(10) the market value of all tangible personal property, other than manufactured homes, owned by a family or individual and not held or used for the production of income;

(11) the appraised value of property the collection of delinquent taxes on which is deferred under Section 33.06, Tax Code;

(12) the portion of the appraised value of property the collection of delinquent taxes on which is deferred under Section 33.065, Tax Code; and

(13) the amount by which the market value of a residence homestead to which Section 23.23, Tax Code, applies exceeds the appraised value of that property as calculated under that section.

Explanation: The addition is necessary to remove from the definition of "taxable value" a portion of the market value of certain property.

(17) House Rule 13, Section 9(a)(4), is suspended to permit the committee to add text on a matter not included in either the house or senate version of the bill by adding proposed SECTION 1A.001 to the bill, amending Section 13.054, Education Code, to read as follows:

SECTION 1A.001. Effective September 1, 2020, Section 13.054, Education Code, is amended by amending Subsection (f) and adding Subsection (f-1) to read as follows:

(f) For five years beginning with the school year in which the annexation occurs, a school district shall receive additional funding under this subsection or Subsection (h). The amount of funding shall be determined by multiplying the lesser of the enlarged district's local fund assignment computed under Section 48.256 [~~42.252~~] or the enlarged district's total cost of tier one by a fraction, the numerator of which is the number of students residing in the territory annexed to the receiving district preceding the date of the annexation and the denominator of which is the number of students residing in the district as enlarged on the date of the annexation, and multiplying the resulting product by the quotient of the enlarged district's maximum compressed tax rate, as determined under Section 48.2551, for the current school year divided by the receiving district's maximum compressed tax rate, as determined under Section 48.2551, for the year in which the annexation occurred.

(f-1) Notwithstanding Subsection (f), for an annexation that occurred before September 1, 2019, for five years beginning with the school year in which the annexation occurs, a school district shall receive additional funding under this subsection or Subsection (h). The amount of funding shall be determined by multiplying the lesser of the enlarged district's local fund assignment computed under Section 48.256 or the enlarged district's total cost of tier one by a fraction, the numerator of which is the number of students residing in the territory annexed to the receiving district preceding the date of the annexation and the denominator of which is the number of students residing in the district as enlarged on the date of the annexation, and dividing the receiving district's maximum compressed tax rate, as determined under Section 48.2551. This subsection expires September 1, 2021.

Explanation: The addition is necessary to determine an additional amount of funding to which a district to which territory is annexed under Section 13.054, Education Code, is entitled beginning September 1, 2020.

Sec. 48.2554. STUDY ON DISTRICT PROPERTY TAX COMPRESSION. (a) The Legislative Budget Board, in conjunction with other appropriate state agencies, shall study possible methods of providing property tax relief through the reduction of school district maintenance and operations taxes. The study must evaluate:

(1) potential sources of revenue that may be used to reduce school district maintenance and operations taxes;

(2) methods of limiting increases in maintenance and operations tax revenue that adjust for enrollment growth, inflation, and other relevant factors; and

(3) for each method of providing property tax relief considered:

(A) any difference in anticipated benefits to property taxpayers based on the school district in which the taxpayer resides;

(B) the cost to the state; and

(b) Not later than September 1, 2020, the Legislative Budget Board shall submit to the governor, the lieutenant governor, and the speaker of the house of representatives a report on the results of the study and any recommendations for legislative or other action.

Explanation: The addition is necessary to require a study on methods of providing property tax relief through the reduction of school district maintenance and operations taxes.

(19) House Rule 13, Section 9(a)(4), is suspended to permit the committee to add text on a matter not included in either the house or senate version of the bill by adding proposed SECTION 2.005 to the bill, adding Section 21.048(a-2), Education Code, to read as follows:

SECTION 2.005. Section 21.048, Education Code, is amended by adding Subsection (a-2) to read as follows:

(a-2) The board shall adopt rules that provide that in order to teach any grade level from prekindergarten through grade six a person must demonstrate proficiency in the science of teaching reading on a certification examination for each class of certificate issued by the board after January 1, 2021.

Explanation: The addition is necessary to require the State Board for Educator Certification to adopt rules requiring certain teachers to demonstrate proficiency in the science of teaching reading on a certification examination.

(20) House Rule 13, Section 9(a)(4), is suspended to permit the committee to add text on a matter not included in either the house or senate version of the bill by adding proposed SECTION 2.008 to the bill, adding Section 21.3521, Education Code, to read as follows:

SECTION 2.008. Subchapter H, Chapter 21, Education Code, is amended by adding Section 21.3521 to read as follows:

Sec. 21.3521. LOCAL OPTIONAL TEACHER DESIGNATION SYSTEM. (a) Subject to Subsection (b), a school district or open-enrollment charter school may designate a certified classroom teacher as a master, exemplary, or recognized 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.

(b) The commissioner shall establish performance and validity standards for each local optional teacher designation system. The performance standards:

(1) must provide a mathematical possibility that all teachers eligible for a designation may earn the designation; and

(2) may not require a district to use an assessment instrument adopted under Section 39.023 to evaluate teacher performance.

(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 recognized.

(d) The commissioner shall:

(1) ensure that local optional teacher designation systems:

(A) meet the requirements of this section; and

(B) prioritize high needs campuses; and

(2) enter into a memorandum of understanding with Texas Tech University to monitor the quality and fairness of local optional teacher designation systems.

(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 assistance in prioritizing high needs campuses.

(f) A teacher has no vested property right in a teacher designation assigned to the teacher under this section. A teacher designation issued under this section is void in the determination that the designation was issued improperly. Subchapters C through H, Chapter 2001, Government Code, do not apply to the voiding of a teacher designation under this subsection.

(g) The agency shall periodically conduct evaluations of the effectiveness of the local optional teacher designation systems under this section and the teacher incentive allotment under Section 48.112 and report the results of the evaluations to the legislature. A school district or open-enrollment charter school that has implemented a local optional teacher designation system or received funds under the teacher incentive allotment shall participate in the evaluations.

(h) The agency shall collect information necessary to implement this section. Information otherwise confidential remains confidential and is not subject to Chapter 552, Government Code.

(i) The commissioner may adopt fees to implement this section. A fee adopted by the agency under this section is not subject to Sections 2001.0045 and 2001.0221, Government Code.

(j) The commissioner may adopt rules to implement this section. A decision made by the commissioner under this section is final and may not be appealed.

Explanation: The addition is necessary to permit school districts and open-enrollment charter schools to develop local optional teacher designation systems.

(21) House Rule 13, Section 9(a)(1), is suspended to permit the committee to amend text not in disagreement in proposed SECTION 2.011 of the bill, adding Section 25.085(i), Education Code, to read as follows:

SECTION 2.011. Effective September 1, 2020, Section 25.085, Education Code, is amended by adding Subsection (i) to read as follows:

Explanation: The change is necessary to delay the implementation of Section 25.085(i), Education Code.

(22) House Rule 13, Section 9(a)(4), is suspended to permit the committee to add text on a matter not included in either the house or senate version of the bill by adding the following new SECTION to proposed ARTICLE 2 of the bill:

SECTION 2.013. Subchapter A, Chapter 28, Education Code, is amended by adding Section 28.0062 to read as follows:

Sec. 28.0062. READING STANDARDS FOR KINDERGARTEN THROUGH THIRD GRADE. (a) Each school district and open-enrollment charter school shall:

(1) provide for the use of a phonics curriculum that uses systematic direct instruction in kindergarten through third grade to ensure all students obtain necessary early literacy skills;

(2) ensure that:

(A) not later than the 2021-2022 school year, each classroom teacher in kindergarten or first, second, or third grade and each principal at a campus with kindergarten or first, second, or third grade has attended a teacher literacy achievement academy developed under Section 21.4552; and

(B) each classroom teacher and each principal initially employed in a grade level or at a campus described by Paragraph (A) for the 2021-2022 school year or a subsequent school year has attended a teacher literacy achievement academy developed under Section 21.4552 before the teacher's or principal's first year of placement in that grade level or campus; and

(3) certify to the agency that the district or school:

(A) prioritizes placement of highly effective teachers in kindergarten through second grade; and

(B) has integrated reading instruments used to diagnose reading development and comprehension to support each student in prekindergarten through third grade.

(b) The agency shall provide assistance to school districts and open-enrollment charter schools in complying with the requirements under this section.

(1) monitor the implementation of this section; and

(2) periodically report to the legislature on the implementation of this section and the effectiveness of this section in improving educational outcomes.

(d) The commissioner shall establish an advisory board to assist the agency in fulfilling the agency's duties under this section. Chapter 2110, Government Code, does not apply to the advisory board.

(e) The commissioner may adopt rules to implement this section.

Explanation: The addition is necessary to provide reading standards for kindergarten through third grade.

(23) House Rule 13, Section 9(a)(4), is suspended to permit the committee to add text on a matter not included in either the house or senate version of the bill in proposed SECTION 4.001 of the bill by repealing Section 403.302(m), Government Code.

Explanation: The addition is necessary to repeal Section 403.302(m), Government Code, which is no longer necessary with the addition of Section 48.256(e), Education Code.

(24) House Rule 13, Section 9(a)(3), is suspended to permit the committee to add text on a matter not in disagreement in proposed SECTION 5.002 of the bill, in the transition language, to read as follows:

SECTION 5.002. Except as otherwise provided by this Act, Section 26.08, Tax Code, as amended by this Act, applies beginning with the 2019 tax year. A school district is required to calculate the district's rollback tax rate for the 2019 tax year in the manner provided by Section 26.08, Tax Code, as amended by this Act, regardless of whether the district has already calculated that rate or adopted a tax rate for the 2019 tax year before September 1, 2019.

Explanation: The addition is necessary to ensure a school district calculates the district's rollback tax rate for the 2019 tax year in accordance with Section 26.08, Tax Code, as amended by this bill.

HR 2186 was adopted by (Record 1940): 139 Yeas, 0 Nays, 1 Present, not voting.

Yeas — Allen; Allison; Anchia; Anderson; Ashby; Bailes; Beckley; Bell, C.; Bell, K.; Bernal; Biedermann; Blanco; Bohac; Bonnen; Bowers; Buckley; Bucy; Burns; Burrows; Button; Cain; Calanni; Canales; Capriglione; Cole; Coleman; Collier; Cortez; Craddick; Cyrier; Darby; Davis, Y.; Dean; Deshotel; Dominguez; Fierro; Flynn; Frank; Frullo; Geren; Gervin-Hawkins; Goldman; González, J.; González, M.; Goodwin; Guerra; Guillen; Gutierrez; Harless; Harris; Hefner; Hernandez; Hinojosa; Holland; Howard; Huberty; Hunter; Israel; Johnson, J.E.; Kacal; King, K.; King, P.; King, T.; Klick; Krause; Kuempel; Lambert; Landgraf; Lang; Larson; Leach; Leman; Longoria; Lopez; Lozano; Martinez; Martinez Fischer; Metcalf; Meyer; Meza; Middleton; Miller; Minjarez; Moody; Morales; Morrison; Muñoz; Murphy; Murr; Neave; Nevárez; Noble; Oliverson; Ortega; Pacheco; Paddie; Parker; Patterson; Paul; Perez; Phelan; Price; Ramos; Raney; Raymond; Reynolds; Rodriguez; Rose; Rosenthal; Sanford; Schaefer; Shaheen; Sheffield; Sherman; Shine; Smith; Smithee; Springer; Stephenson; Stickland; Stucky; Swanson; Talarico; Thierry; Thompson, E.; Thompson, S.; Tinderholt; Toth; Turner, C.; Turner, J.; VanDeaver; Walle; White; Wilson; Wray; Wu; Zedler; Zerwas; Zwiener.

Present, not voting — Mr. Speaker(C).

Absent, Excused — Clardy; Davis, S.; Dutton; Herrero; Johnson, E.; Johnson, J.D.; Lucio; Romero; Vo.

Absent — Farrar.

HB 3 - CONFERENCE COMMITTEE REPORT ADOPTED

Representative Huberty submitted the following conference committee report on HB 3:

Austin, Texas, May 23, 2019

The Honorable Dan Patrick

President of the Senate

The Honorable Dennis Bonnen

Speaker of the House of Representatives

Sirs: We, your conference committee, appointed to adjust the differences between the senate and the house of representatives on HB 3 have had the same under consideration, and beg to report it back with the recommendation that it do pass in the form and text hereto attached.

Taylor

Huberty

Campbell

Ashby

Nelson

Bernal

Watson

M. González

West

K. King

On the part of the senate

On the part of the house

HB 3, A bill to be entitled An Act relating to public school finance and public education; creating a criminal offense; authorizing the imposition of a fee.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

ARTICLE 1. PUBLIC SCHOOL FINANCE

SECTION 1.001. Subchapter D, Chapter 11, Education Code, is amended by adding Section 11.184 to read as follows:

Sec. 11.184. EFFICIENCY AUDIT. (a) For purposes of this section, "efficiency audit" means an investigation of the operations of a school district to examine fiscal management, efficiency, and utilization of resources.

(b) Except as provided by Subsection (b-1), the board of trustees of a school district shall conduct an efficiency audit before seeking voter approval to adopt a tax rate for the maintenance and operations of the district at an election held for that purpose and may not hold the election without complying with this section.

(b-1) The board of trustees 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, may hold an election to seek voter approval to adopt a maintenance and operations tax rate during the two-year period following the date of the declaration without conducting an efficiency audit otherwise required under this section.

(d) The board of trustees of a school district must select an auditor to conduct an efficiency audit under this section not later than four months before the date on which the district proposes to hold an election to adopt a maintenance and operations tax rate.

(e) The board of trustees of a school district may select for purposes of Subsection (d) the auditor that conducts the district's annual audit under Section 44.008 and may include the efficiency audit as part of the district's annual audit.

(f) The Legislative Budget Board shall establish guidelines identifying the scope and areas of investigation of an efficiency audit, including identification of resources being used effectively and efficiently and identification of cost savings or reallocations. The Legislative Budget Board may consult with the agency to identify areas in which school districts in this state have a demonstrated history of effectively utilizing resources to improve student achievement and achieve cost savings. The auditor selected by the board of trustees of a school district must follow the guidelines established by the Legislative Budget Board under this subsection.

(g) An auditor selected by the board of trustees of a school district must maintain independence from the district and complete the efficiency audit not later than three months after the date the auditor was selected.

(h) Before an election at which a school district seeks voter approval to adopt a tax rate the board of trustees of the school district must hold an open meeting to discuss the results of the efficiency audit conducted under this section. Not later than 30 days before the date of the election, the results of an efficiency audit conducted under this section must be posted on the school district's Internet website.

(i) A school district shall provide all documents, records, and personnel requested by the auditor as needed to conduct the audit in an efficient manner.

SECTION 1.002. Section 12.106, Education Code, is amended by amending Subsections (a), (a-1), and (a-2) and adding Subsections (a-3) and (a-4) to read as follows:

(a) A charter holder is entitled to receive for the open-enrollment charter school funding under Chapter 48 [42] equal to the amount of funding per student in weighted average daily attendance, excluding the adjustment under Section 48.052, the funding under Sections 48.101, 48.110, 48.111, and 48.112, and enrichment funding under Section 48.202(a) [~~42.302(a)~~], to which the charter holder would be entitled for the school under Chapter 48 [42] if the school were a school district without a tier one local share for purposes of Section 48.266 [~~42.253~~].

(a-1) In determining funding for an open-enrollment charter school under Subsection (a), the amount of the allotment under Section 48.102 is based solely on the basic allotment to which the charter holder is entitled and does not include any amount based on the allotment under Section 48.101[:

[~~(1)~~ ~~adjustments under Sections 42.102, 42.104, and 42.105 are based on the average adjustment for the state; and~~

[~~(2)~~ ~~the adjustment under Section 42.103 is based on the average adjustment for the state that would have been provided under that section as it existed on January 1, 2018~~].

(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:

(1) the product of:

(A) the quotient of:

(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

(2) $125.

(a-3) In addition to the funding provided by Subsections [~~Subsection~~] (a) and (a-2), a charter holder is entitled to receive for the open-enrollment charter school enrichment funding under Section 48.202 [~~42.302~~] based on the state average tax effort.

(a-4) In addition to the funding provided by Subsections (a), (a-2), and (a-3), a charter holder is entitled to receive funding for the open-enrollment charter school under Sections 48.110 and 48.112 and Subchapter D, Chapter 48, if the charter holder would be entitled to the funding if the school were a school district.

SECTION 1.003. Section 13.054(f), Education Code, is amended to read as follows:

(f) For five years beginning with the school year in which the annexation occurs, a school district shall receive additional funding under this subsection or Subsection (h). The amount of funding shall be determined by multiplying the lesser of the enlarged district's local fund assignment computed under Section 48.256 [~~42.252~~] or the enlarged district's total cost of tier one by a fraction, the numerator of which is the number of students residing in the territory annexed to the receiving district preceding the date of the annexation and the denominator of which is the number of students residing in the district as enlarged on the date of the annexation, and dividing the resulting product by the state compression percentage, as determined under Section 48.255.

SECTION 1.004. (a) Effective September 1, 2019, Section 25.084(b), Education Code, is amended to read as follows:

(b) The operation of schools year-round by a district does not affect the amount of state funds to which the district is entitled under Chapter 48 [42].

(b) Effective September 1, 2020, Section 25.084, Education Code, is amended by amending Subsection (b) and adding Subsection (c) to read as follows:

(b) Except as provided by Subsection (c), the [~~The~~] operation of schools year-round by a district does not affect the amount of state funds to which the district is entitled under Chapter 48 [42].

(c) A district that adopts a year-round system under this section may receive the incentive aid under Section 48.0051 if the district meets the criteria for receiving the incentive under that section.

SECTION 1.005. Section 30.003, Education Code, is amended by amending Subsection (f-1) and adding Subsection (f-2) to read as follows:

(f-1) The commissioner shall determine the total amount that the Texas School for the Blind and Visually Impaired and the Texas School for the Deaf would have received from school districts in accordance with this section if the following provisions had not reduced the districts' share of the cost of providing education services:

(1) HB 1, Acts of the 79th Legislature, 3rd Called Session, 2006;

(2) Section 45.0032; and

(3) Section 48.255.

(f-2) The amount determined under Subsection (f-1), [~~had not reduced the districts' share of the cost of providing education services. That amount,~~] minus any amount the schools do receive from school districts, shall be set aside as a separate account in the foundation school fund and appropriated to those schools for educational purposes.

SECTION 1.006. Section 44.004, Education Code, is amended by amending Subsections (c) and (e) and adding Subsection (c-2) to read as follows:

(c) The notice of public meeting to discuss and adopt the budget and the proposed tax rate may not be smaller than one-quarter page of a standard-size or a tabloid-size newspaper, and the headline on the notice must be in 18-point or larger type. Subject to Subsection (d), the notice must:

(1) contain a statement in the following form:

"NOTICE OF PUBLIC MEETING TO DISCUSS BUDGET AND PROPOSED TAX RATE

"The (name of school district) will hold a public meeting at (time, date, year) in (name of room, building, physical location, city, state). The purpose of this meeting is to discuss the school district's budget that will determine the tax rate that will be adopted. Public participation in the discussion is invited." The statement of the purpose of the meeting must be in bold type. In reduced type, the notice must state: "The tax rate that is ultimately adopted at this meeting or at a separate meeting at a later date may not exceed the proposed rate shown below unless the district publishes a revised notice containing the same information and comparisons set out below and holds another public meeting to discuss the revised notice.";

(2) contain a section entitled "Comparison of Proposed Budget with Last Year's Budget," which must show the difference, expressed as a percent increase or decrease, as applicable, in the amounts budgeted for the preceding fiscal year and the amount budgeted for the fiscal year that begins in the current tax year for each of the following:

(A) maintenance and operations;

(B) debt service; and

(3) contain a section entitled "Total Appraised Value and Total Taxable Value," which must show the total appraised value and the total taxable value of all property and the total appraised value and the total taxable value of new property taxable by the district in the preceding tax year and the current tax year as calculated under Section 26.04, Tax Code;

(4) contain a statement of the total amount of the outstanding and unpaid bonded indebtedness of the school district;

(5) contain a section entitled "Comparison of Proposed Rates with Last Year's Rates," which must:

(A) show in rows the tax rates described by Subparagraphs (i)-(iii), expressed as amounts per $100 valuation of property, for columns entitled "Maintenance & Operations," "Interest & Sinking Fund," and "Total," which is the sum of "Maintenance & Operations" and "Interest & Sinking Fund":

(i) the school district's "Last Year's Rate";

(ii) the "Rate to Maintain Same Level of Maintenance & Operations Revenue & Pay Debt Service," which:

(a) in the case of "Maintenance & Operations," is the tax rate that, when applied to the current taxable value for the district, as certified by the chief appraiser under Section 26.01, Tax Code, and as adjusted to reflect changes made by the chief appraiser as of the time the notice is prepared, would impose taxes in an amount that, when added to state funds to be distributed to the district under Chapter 48 [42], would provide the same amount of maintenance and operations taxes and state funds distributed under Chapter 48 [42] per student in average daily attendance for the applicable school year that was available to the district in the preceding school year; and

(b) in the case of "Interest & Sinking Fund," is the tax rate that, when applied to the current taxable value for the district, as certified by the chief appraiser under Section 26.01, Tax Code, and as adjusted to reflect changes made by the chief appraiser as of the time the notice is prepared, and when multiplied by the district's anticipated collection rate, would impose taxes in an amount that, when added to state funds to be distributed to the district under Chapter 46 and any excess taxes collected to service the district's debt during the preceding tax year but not used for that purpose during that year, would provide the amount required to service the district's debt; and

(iii) the "Proposed Rate";

(B) contain fourth and fifth columns aligned with the columns required by Paragraph (A) that show, for each row required by Paragraph (A):

(i) the "Local Revenue per Student," which is computed by multiplying the district's total taxable value of property, as certified by the chief appraiser for the applicable school year under Section 26.01, Tax Code, and as adjusted to reflect changes made by the chief appraiser as of the time the notice is prepared, by the total tax rate, and dividing the product by the number of students in average daily attendance in the district for the applicable school year; and

(ii) the "State Revenue per Student," which is computed by determining the amount of state aid received or to be received by the district under Chapters [~~42,~~] 43, [~~and~~] 46, and 48 and dividing that amount by the number of students in average daily attendance in the district for the applicable school year; and

(C) contain an asterisk after each calculation for "Interest & Sinking Fund" and a footnote to the section that, in reduced type, states "The Interest & Sinking Fund tax revenue is used to pay for bonded indebtedness on construction, equipment, or both. The bonds, and the tax rate necessary to pay those bonds, were approved by the voters of this district.";

(6) contain a section entitled "Comparison of Proposed Levy with Last Year's Levy on Average Residence," which must:

(A) show in rows the information described by Subparagraphs (i)-(iv), rounded to the nearest dollar, for columns entitled "Last Year" and "This Year":

(i) "Average Market Value of Residences," determined using the same group of residences for each year;

(ii) "Average Taxable Value of Residences," determined after taking into account the limitation on the appraised value of residences under Section 23.23, Tax Code, and after subtracting all homestead exemptions applicable in each year, other than exemptions available only to disabled persons or persons 65 years of age or older or their surviving spouses, and using the same group of residences for each year;

(iii) "Last Year's Rate Versus Proposed Rate per $100 Value"; and

(iv) "Taxes Due on Average Residence," determined using the same group of residences for each year; and

(B) contain the following information: "Increase (Decrease) in Taxes" expressed in dollars and cents, which is computed by subtracting the "Taxes Due on Average Residence" for the preceding tax year from the "Taxes Due on Average Residence" for the current tax year;

(7) contain the following statement in bold print: "Under state law, the dollar amount of school taxes imposed on the residence of a person 65 years of age or older or of the surviving spouse of such a person, if the surviving spouse was 55 years of age or older when the person died, may not be increased above the amount paid in the first year after the person turned 65, regardless of changes in tax rate or property value.";

(8) contain the following statement in bold print: "Notice of Rollback Rate: The highest tax rate the district can adopt before requiring voter approval at an election is (the school district rollback rate determined under Section 26.08, Tax Code). This election will be automatically held if the district adopts a rate in excess of the rollback rate of (the school district rollback rate)."; and

(9) contain a section entitled "Fund Balances," which must include the estimated amount of interest and sinking fund balances and the estimated amount of maintenance and operation or general fund balances remaining at the end of the current fiscal year that are not encumbered with or by corresponding debt obligation, less estimated funds necessary for the operation of the district before the receipt of the first payment under Chapter 48 [42] in the succeeding school year.

(c-2) The notice described by Subsection (c) must include a statement that a school district may not increase the district's maintenance and operations tax rate to create a surplus in maintenance and operations tax revenue for the purpose of paying the district's debt service.

(e) A person who owns taxable property in a school district is entitled to an injunction restraining the collection of taxes by the district if the district has not complied with the requirements of Subsections (b), (c), (c-1), (c-2), and (d), and, if applicable, Subsection (i), and the failure to comply was not in good faith. An action to enjoin the collection of taxes must be filed before the date the [~~school~~] district delivers substantially all of its tax bills.

SECTION 1.007. Subchapter A, Chapter 45, Education Code, is amended by adding Section 45.0021 to read as follows:

Sec. 45.0021. RESTRICTION ON MAINTENANCE TAX LEVY. (a) A school district may not increase the rate of the district's maintenance taxes described by Section 45.002 to create a surplus in maintenance tax revenue for the purpose of paying the district's debt service.

(b) A person who owns taxable property in a school district is entitled to an injunction restraining the collection of taxes by the district if the district adopts a maintenance tax rate in violation of Subsection (a). An action to enjoin the collection of taxes must be filed before the date the district delivers substantially all of the district's tax bills.

SECTION 1.008. Section 45.003, Education Code, is amended by adding Subsections (b-1) and (d-1) and amending Subsections (d) and (f) to read as follows:

(b-1) The ballot proposition under Subsection (b) must include the following statement: "THIS IS A PROPERTY TAX INCREASE."

(d) A proposition submitted to authorize the levy of maintenance taxes must include the question of whether the governing board or commissioners court may levy, assess, and collect annual ad valorem taxes for the further maintenance of public schools, at a rate not to exceed the rate stated in the proposition. For any year, the maintenance tax rate per $100 of taxable value adopted by the district may not exceed the rate equal to the sum of $0.17 and the product of the state compression percentage, as determined under Section 48.255 [~~42.2516~~], multiplied by $1.00 [~~$1.50~~].

(d-1) Except as otherwise provided by this subsection or Section 26.08(a-1), Tax Code, if the rollback tax rate of a school district under Section 26.08(n), Tax Code, for the 2019 tax year exceeds $1.04 per $100 of taxable value, the district may not adopt a maintenance and operations tax rate for the 2019 tax year that exceeds the district's rollback rate. A school district that, before January 1, 2019, adopted a strategic plan through action taken by the board of trustees in a public meeting that proposed a maintenance and operations tax rate for the 2019 tax year that exceeds the rate permitted under this subsection may, subject to voter approval, adopt the rate proposed in the plan minus the amount by which the district is required to reduce the district's enrichment tax rate under Section 48.202(f). This subsection expires September 1, 2020.

(f) Notwithstanding any other law, a district that levied a maintenance tax for the 2005 tax year at a rate greater than $1.50 per $100 of taxable value in the district as permitted by special law may not levy a maintenance tax at a rate that exceeds the rate per $100 of taxable value that is equal to the sum of:

(1) $0.17; and

(2) the product of 66.67 percent [~~the state compression percentage, as determined under Section 42.2516,~~] multiplied by the rate of the maintenance tax levied by the district for the 2005 tax year, minus the amount by which $1.00 exceeds the product of the state compression percentage, as determined under Section 48.255, multiplied by $1.00.

SECTION 1.009. Subchapter A, Chapter 45, Education Code, is amended by adding Section 45.0032 to read as follows:

Sec. 45.0032. COMPONENTS OF MAINTENANCE AND OPERATIONS TAX. (a) A school district's tier one maintenance and operations tax rate is the number of cents levied by the district for maintenance and operations that does not exceed the product of the state compression percentage, as determined under Section 48.255, multiplied by $1.00.

(a-1) This subsection applies to a school district with a tier one maintenance and operations tax rate for the 2018-2019 school year that was less than $1.00 per $100 of taxable value. For purposes of determining a school district's tier one maintenance and operations tax rate under Subsection (a) for the 2019-2020 school year, the state compression percentage, as determined under Section 48.255, is applied to the number of cents levied by the district for the 2018-2019 school year for maintenance and operations that does not exceed $1.00. This subsection expires September 1, 2020.

(b) A district's enrichment tax rate consists of:

(1) any cents of additional maintenance and operations tax effort, not to exceed eight cents over the maximum tax rate described by Subsection (a); and

(2) any cents of additional maintenance and operations tax effort that exceeds the sum of the maximum tax rate described by Subsection (a) and the maximum number of cents permitted under Subdivision (1).

(c) For a district to which Section 45.003(f) applies, any cents of maintenance and operations tax effort that exceeds the maximum rate permitted under Section 45.003(d) are not included in the district's tier one maintenance and operations tax rate under Subsection (a) or the district's enrichment tax rate under Subsection (b), and the district is not entitled to the guaranteed yield amount of state funds under Section 48.202 for those cents of tax effort.

(d) For a district to which Section 26.08(a-1), Tax Code, applies, the amount by which the district's maintenance tax rate exceeds the district's rollback tax rate for the preceding year is not considered in determining a district's tier one maintenance and operations tax rate under Subsection (a) or the district's enrichment tax rate under Subsection (b) for the current tax year.

SECTION 1.010. Subtitle I, Title 2, Education Code, is amended by adding Chapter 47 to read as follows:

CHAPTER 47. TAX REDUCTION AND EXCELLENCE IN EDUCATION FUND

Sec. 47.001. DEFINITION. In this chapter, "fund" means the tax reduction and excellence in education fund.

Sec. 47.002. FUND ESTABLISHED. (a) The tax reduction and excellence in education fund is a special fund in the state treasury outside the general revenue fund.

(b) The fund consists of:

(1) money appropriated by the legislature for deposit to the credit of the fund;

(2) gifts to the state for the purposes of the fund; and

(3) money directed by law for deposit to the credit of the fund.

Sec. 47.003. USES OF FUND. Except as otherwise provided by this chapter, money in the fund may be appropriated only:

(1) to pay the cost of tier one allotments under Chapter 48; or

(2) for the purpose of reducing school district maintenance and operations ad valorem tax rates.

Sec. 47.004. DEPOSIT OF CERTAIN MONEY DEDICATED FOR SCHOOL DISTRICT AD VALOREM TAX RATE REDUCTION. (a) The comptroller shall deposit to the credit of the fund money that Section 49-g, Article III, Texas Constitution, dedicates to the purpose of reducing school district maintenance and operations ad valorem tax rates.

(b) Money deposited to the fund under this section may be appropriated from the fund only for the purpose described by Section 47.003(2).

Sec. 47.005. CERTAIN MONEY DISTRIBUTED TO AVAILABLE SCHOOL FUND. (a) Of the money distributed to the available school fund each year under Section 5(g), Article VII, Texas Constitution, the amount that exceeds the first $300 million is considered part of the tax reduction and excellence in education fund.

(b) Money considered part of the fund as described by Subsection (a) may be appropriated only to pay the cost of tier one allotments under Chapter 48.

Sec. 47.006. DEPOSIT OF MONEY BASED ON CERTAIN SALES AND USE TAX COLLECTIONS. (a) The comptroller shall deposit to the credit of the fund on or before the fifth business day after the end of each month an amount of general revenue equal to the amount of state sales and use tax revenue collected by marketplace providers on sales of taxable items made through the marketplace under Section 151.0242, Tax Code, and remitted to this state during the preceding month, less any amount of that revenue the comptroller estimates would have been collected and remitted if Section 151.0242 were not law.

(b) Money deposited to the fund under this section may be appropriated from the fund only for the purpose described by Section 47.003(2).

SECTION 1.011. Subtitle I, Title 2, Education Code, is amended by adding Chapter 48, and a heading is added to that chapter to read as follows:

CHAPTER 48. FOUNDATION SCHOOL PROGRAM

SECTION 1.012. Chapter 48, Education Code, as added by this Act, is amended by adding Subchapter A, and a heading is added to that subchapter to read as follows:

SUBCHAPTER A. GENERAL PROVISIONS

SECTION 1.013. Sections 42.001, 42.002, 42.003, 42.004, and 42.005, Education Code, are transferred to Subchapter A, Chapter 48, Education Code, as added by this Act, redesignated as Sections 48.001, 48.002, 48.003, 48.004, and 48.005, Education Code, and amended to read as follows:

Sec. 48.001 [~~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.

Sec. 48.002 [~~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.

Sec. 48.003 [~~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:

(1) 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; or

(2) is at least 19 years of age and under 26 years of age and is enrolled in an adult high school diploma and industry certification charter school pilot program under Section 29.259.

(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 [~~or Subchapter E-1, Chapter 29~~].

(c) A child may be enrolled in the first grade if the child is 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.

Sec. 48.004 [~~42.004~~]. ADMINISTRATION OF THE PROGRAM. The commissioner[~~, in accordance with the rules of the State Board of Education,~~] shall adopt rules and take [~~such~~] action and require [~~such~~] reports consistent with this chapter as [~~may be~~] necessary to implement and administer the Foundation School Program.

Sec. 48.005 [~~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);

(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) 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).

(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.

(c) The commissioner shall adjust the average daily attendance 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).

(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.

(g-1) The commissioner shall adopt rules to calculate average daily attendance for students participating in a blended learning program in which classroom instruction is supplemented with applied workforce learning opportunities, including participation of students in internships, externships, and apprenticeships.

(h) Subject to rules adopted by the commissioner under Section 48.007(b) [~~42.0052(b)~~], time that a student participates in an off-campus instructional program approved under Section 48.007(a) [~~42.0052(a)~~] 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.

(i) A district or a charter school operating under Chapter 12 that operates a prekindergarten program is eligible to receive one-half of average daily attendance under Subsection (a) if the district's or charter school's prekindergarten program provides at least 32,400 minutes of instructional time to students.

(j) A district or charter school is eligible to earn full average daily attendance under Subsection (a) if the district or school provides at least 43,200 minutes of instructional time to students enrolled in:

(1) a dropout recovery school or program operating under Section 12.1141(c) or Section 39.0548;

(2) an alternative education program operating under Section 37.008;

(3) a school program located at a day treatment facility, residential treatment facility, psychiatric hospital, or medical hospital;

(4) a school program offered at a correctional facility; or

(5) a school operating under Section 29.259.

(k) A charter school operating under a charter granted under Chapter 12 before January 1, 2015, is eligible to earn full average daily attendance under Subsection (a), as that subsection existed immediately before January 1, 2015, for:

(1) all campuses of the charter school operating before January 1, 2015; and

(2) any campus or site expansion approved on or after January 1, 2015, provided that the charter school received an academic accountability performance rating of C or higher, and the campus or site expansion is approved by the commissioner.

(l) A school district campus or charter school described by Subsection (j) may operate more than one program and be eligible for full average daily attendance for each program if the programs operated by the district campus or charter school satisfy all applicable state and federal requirements.

(m) The commissioner shall adopt rules necessary to implement this section, including rules that:

(1) establish the minimum amount of instructional time per day that allows a school district or charter school to be eligible for full average daily attendance, which may differ based on the instructional program offered by the district or charter school;

(2) establish the requirements necessary for a school district or charter school to be eligible for one-half of average daily attendance, which may differ based on the instructional program offered by the district or charter school; and

(3) proportionally reduce the average daily attendance for a school district if any campus or instructional program in the district provides fewer than the required minimum minutes of instruction to students.

(n) To assist school districts in implementing this section as amended by HB 2442, Acts of the 85th Legislature, Regular Session, 2017, [~~or similar legislation,~~] the commissioner may waive a requirement of this section or adopt rules to implement this section. [~~This subsection expires at the end of the 2018-2019~~ ~~school year.~~]

SECTION 1.014. Effective September 1, 2020, Subchapter A, Chapter 48, Education Code, as added by this Act, is amended by adding Section 48.0051 to read as follows:

Sec. 48.0051. INCENTIVE FOR ADDITIONAL INSTRUCTIONAL DAYS. (a) 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 180 days of instruction; and

(2) offers an additional 30 days of half-day instruction for students enrolled in prekindergarten through fifth grade.

(a-1) A school district entitled to an incentive under this section and funding for a campus under Section 48.252 may receive only the incentive or funding for the campus, as applicable, that would result in the greater amount of funding.

(b) 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 180.

(c) The commissioner may provide the incentive under this section to a school district or open-enrollment charter school that intended, but due to circumstances beyond the district's or school's control, including the occurrence of a natural disaster affecting the district or school, was unable to meet the requirement for instruction under Section 25.081 plus an additional 30 days of half-day instruction. The commissioner may proportionately reduce the incentive provided to a district or school described by this subsection.

(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 180 days of instruction.

(e) The agency shall assist school districts and open-enrollment charter schools in qualifying for the incentive under this section.

(g) The commissioner shall adopt rules necessary for the implementation of this section.

SECTION 1.015. Sections 42.0051 and 42.0052, Education Code, are transferred to Subchapter A, Chapter 48, Education Code, as added by this Act, redesignated as Sections 48.006 and 48.007, Education Code, and amended to read as follows:

Sec. 48.006 [~~42.0051~~]. AVERAGE DAILY ATTENDANCE FOR DISTRICTS IN DISASTER AREA. (a) The [~~From funds specifically appropriated for the purpose or other funds available to the commissioner for that purpose, the~~] commissioner may [~~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.

(d) Section 48.005(b)(2) [~~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 48.005(d) [~~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 48.005 [~~42.005~~].

Sec. 48.007 [~~42.0052~~]. OFF-CAMPUS PROGRAMS APPROVED FOR PURPOSES OF AVERAGE DAILY ATTENDANCE. (a) The commissioner may, based on criteria developed by the commissioner, approve instructional programs provided off campus by an entity other than a school district or open-enrollment charter school as a program in which participation by a student of a district or charter school may be counted for purposes of determining average daily attendance in accordance with Section 48.005(h) [~~42.005(h)~~].

(b) The commissioner shall adopt by rule verification and reporting procedures concerning time spent by students participating in instructional programs approved under Subsection (a).

SECTION 1.016. Sections 42.006(a), (b), (c), and (d), Education Code, are transferred to Subchapter A, Chapter 48, Education Code, as added by this Act, redesignated as Section 48.008, Education Code, and amended to read as follows:

Sec. 48.008. 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.

(c) Annually, the commissioner shall review the Public Education 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.

SECTION 1.017. Sections 42.006(a-1), (a-3), and (a-4), Education Code, Section 42.006(a-2), Education Code, as added by Chapter 550 (SB 490), Acts of the 85th Legislature, Regular Session, 2017, and Section 42.006(a-2), as added by Chapter 916 (SB 1404), Acts of the 85th Legislature, Regular Session, 2017, are transferred to Subchapter A, Chapter 48, Education Code, as added by this Act, redesignated as Section 48.009, Education Code, and amended to read as follows:

Sec. 48.009. REQUIRED PEIMS REPORTING. (a) In this section, "full-time equivalent school counselor" means 40 hours of counseling services a week.

(b) [~~(a-1)~~] The commissioner by rule shall require each school district and open-enrollment charter school to report through the Public Education Information Management System information regarding:

(1) the number of students enrolled in the district or school who are identified as having dyslexia;

(2) [~~. The agency shall maintain the information provided in accordance with this subsection.~~

[~~(a-2)~~ ~~The commissioner by rule shall require each school district and open-enrollment charter school to report through the Public Education Information Management System information regarding~~] the availability of school counselors, including [~~at each campus. The commissioner's rules shall require a district or school to report~~] the number of full-time equivalent school counselors, [~~providing counseling services~~] at each [a] campus;

(3) [. For purposes of this subsection, "full-time equivalent school counselor" means 40 hours of counseling services a week. The agency shall maintain the information provided in accordance with this subsection.

[~~(a-2)~~ The commissioner by rule shall require each school district and open-enrollment charter school to report through the Public Education Information Management System information for each campus of the district or school regarding:

[~~(1)~~] the availability of expanded learning opportunities as described by Section 33.252 at each campus; [~~and~~]

(4) [~~(2)~~ ~~the number of students participating in each of the categories of expanded learning opportunities listed under Section 33.252(b).~~

[~~(a-3)~~ ~~The commissioner by rule shall require each school district and open-enrollment charter school to annually report through the Public Education Information Management System information regarding~~] the total number of students, other than students described by Subdivision (5) [~~Subsection (a-4)~~], enrolled in the district or school with whom the district or school, as applicable, used intervention strategies, as that term is defined by Section 26.004, at any time during the year for which the report is made; and

(5) [~~. The agency shall maintain the information provided in accordance with this subsection.~~

[~~(a-4)~~ ~~The commissioner by rule shall require each school district and open-enrollment charter school to annually report through the Public Education Information Management System information regarding~~] the total number of students enrolled in the district or school to whom the district or school provided aids, accommodations, or services under Section 504, Rehabilitation Act of 1973 (29 U.S.C. Section 794), at any time during the year for which the report is made.

(d) Not later than January 1, 2020, the commissioner shall adopt rules requiring the Public Education Information Management System (PEIMS) to include pregnancy as a reason a student withdraws from or otherwise no longer attends public school.

SECTION 1.018. Section 42.009, Education Code, is transferred to Subchapter A, Chapter 48, Education Code, as added by this Act, redesignated as Section 48.010, Education Code, and amended to read as follows:

Sec. 48.010 [~~42.009~~]. DETERMINATION OF FUNDING LEVELS. (a) Not later than July 1 of each year, the commissioner shall determine for each school district whether the estimated amount of state and local funding per student in weighted average daily attendance to be provided to the district under the Foundation School Program for maintenance and operations for the following school year is less than the amount provided to the district for the 2010-2011 school year. If the amount estimated to be provided is less, the commissioner shall certify the percentage decrease in funding to be provided to the district.

(b) In making the determinations regarding funding levels required by Subsection (a), the commissioner shall:

(1) make adjustments as necessary to reflect changes in a school district's maintenance and operations tax rate;

(2) for a district required to [~~take action under Chapter 41~~ to] reduce its local revenue level under Section 48.257 [~~wealth per student to the equalized wealth level~~], base the determinations on the district's net funding levels after deducting any amounts required to be expended by the district to comply with Chapter 49 [41]; and

(3) determine a district's weighted average daily attendance in accordance with this chapter as it existed on January 1, 2011.

SECTION 1.019. Subchapter A, Chapter 48, Education Code, as added by this Act, is amended by adding Sections 48.011 and 48.012 to read as follows:

Sec. 48.011. COMMISSIONER AUTHORITY TO RESOLVE UNINTENDED CONSEQUENCES FROM SCHOOL FINANCE FORMULAS. (a) Subject to Subsections (b) and (d), the commissioner may adjust a school district's funding entitlement under this chapter if the funding formulas used to determine the district's entitlement result in an unanticipated loss or gain for a district.

(b) Before making an adjustment under Subsection (a) or (a-1), the commissioner shall notify and must receive approval from the Legislative Budget Board and the office of the governor.

(c) If the commissioner makes an adjustment under Subsection (a), the commissioner must provide to the legislature an explanation regarding the changes necessary to resolve the unintended consequences.

(d) Beginning with the 2021-2022 school year, the commissioner may not make an adjustment under Subsection (a) or (a-1).

(e) This section expires September 1, 2023.

Sec. 48.012. STUDY ON GEOGRAPHIC EDUCATION COST VARIATIONS AND TRANSPORTATION COSTS. (a) The agency shall enter into a memorandum of understanding with a public institution of higher education to conduct a study on:

(1) geographic variations in known resource costs and costs of education due to factors beyond the control of school districts; and

(2) school district transportation costs.

(b) The study must include a review of cost drivers for school districts.

(d) This section expires September 1, 2021.

SECTION 1.020. Chapter 48, Education Code, as added by this Act, is amended by adding Subchapter B, and a heading is added to that subchapter to read as follows:

SUBCHAPTER B. BASIC ENTITLEMENT

SECTION 1.021. Sections 42.101 and 42.105, Education Code, are transferred to Subchapter B, Chapter 48, Education Code, as added by this Act, redesignated as Sections 48.051 and 48.052, Education Code, and amended to read as follows:

Sec. 48.051 [~~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 $6,160 [~~$4,765~~] or the amount that results from the following formula:

A = $6,160 [~~$4,765~~] X TR/MCR [~~(DCR/MCR)~~]

where:

"A" is the allotment to which a district is entitled;

"TR" [~~"DCR"~~] is the district's tier one maintenance and operations [~~compressed~~] tax rate, as provided by Section 45.0032 [~~, 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 48.255 [~~42.2516~~], multiplied by $1.00 [~~$1.50~~].

[~~(a-1)~~ Notwithstanding Subsection (a), for a school district that adopted a maintenance and operations tax rate for the 2005 tax year below the maximum rate permitted by law for that year, the district's compressed tax rate ("DCR") includes the portion of the district's current maintenance and operations tax rate in excess of the first six cents above the district's compressed tax rate, as defined by Subsection (a), until the district's compressed tax rate computed in accordance with this subsection is equal to the state maximum compressed tax rate ("MCR").]

(b) A greater amount for any school year may be provided by appropriation.

(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 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 experience; and

(2) 25 percent may be used as determined by the district to increase compensation paid to full-time district employees [This subsection applies to a school district for which the compressed tax rate ("DCR") is determined in accordance with Subsection (a-1). Any reduction in the district's adopted maintenance and operations tax rate is applied to the following components of the district's tax rate in the order specified:

[~~(1)~~ ~~tax effort described by Section 42.302(a-1)(2);~~

[~~(2)~~ ~~tax effort described by Section 42.302(a-1)(1); and~~

[~~(3)~~ ~~tax effort included in the determination of the district's compressed tax rate ("DCR") under Subsection (a-1)~~].

(d) In this section, "compensation" includes benefits such as insurance premiums.

Sec. 48.052 [~~42.105~~]. SPARSITY ADJUSTMENT. (a) Notwithstanding Section 48.051 [~~Sections 42.101, 42.102, and 42.103~~], a school district that has fewer than 130 students in average daily attendance shall be provided a [~~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 a [~~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.

(b) Subsection (c) applies only to a school district that:

(1) does not offer each grade level from kindergarten through grade 12 and whose prospective or former students generally attend school in a state that borders this state for the grade levels the district does not offer;

(2) serves both students residing in this state and students residing in a state that borders this state who are subsequently eligible for in-state tuition rates at institutions of higher education in either state regardless of the state in which the students reside; and

(3) shares students with an out-of-state district that does not offer competing instructional services.

(c) Notwithstanding Subsection (a) or Section 48.051 [~~Sections 42.101, 42.102, and 42.103~~], a school district to which this subsection applies, as provided by Subsection (b), that has fewer than 130 students in average daily attendance shall be provided a [~~an adjusted~~] basic allotment on the basis of 130 students in average daily attendance if it offers a kindergarten through grade four program and has preceding or current year's average daily attendance of at least 75 students or is 30 miles or more by bus route from the nearest high school district.

SECTION 1.022. Subchapter B, Chapter 48, Education Code, as added by this Act, is amended by adding Section 48.053 to read as follows:

Sec. 48.053. ALLOTMENT FOR CERTAIN SPECIAL-PURPOSE SCHOOL DISTRICTS. (a) This section applies only to a special-purpose school district established under Section 11.351 that is operated by a general academic teaching institution, as that term is defined by Section 61.003.

(b) For each student who resides in this state and is enrolled in the district, a school district to which this section applies is entitled to funding under this chapter as if the district had no tier one local share for purposes of Section 48.256.

(d) A school district that receives funding under Subsection (b) for a school year may not charge tuition or fees to students enrolled in the district who are residents of this state for that school year, other than fees authorized under Section 11.158.

SECTION 1.023. Chapter 48, Education Code, as added by this Act, is amended by adding Subchapter C, and a heading is added to that subchapter to read as follows:

SUBCHAPTER C. STUDENT-BASED ALLOTMENTS

SECTION 1.024. Subchapter C, Chapter 48, Education Code, as added by this Act, is amended by adding Section 48.101 to read as follows:

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; and

(3) "BA" is the basic allotment determined under Section 48.051.

(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 formula:

AA = ((1,600 - ADA) X .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 eligible for that formula; or

(2) AA = ((5,000 - ADA) X .000025) X BA.

AA = ((1,600 - ADA) X .00047) X BA

SECTION 1.025. Section 42.151, Education Code, is transferred to Subchapter C, Chapter 48, Education Code, as added by this Act, redesignated as Section 48.102, Education Code, and amended to read as follows:

Sec. 48.102 [~~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, or, if applicable, the sum of the basic allotment and the allotment under Section 48.101 to which the district is entitled, multiplied by 1.15 [~~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, or, if applicable, the sum of the basic allotment and the allotment under Section 48.101 to which the district is entitled, 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 by commissioner rule [~~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 by commissioner rule [~~under the rules of the State Board of Education~~] with a funding weight of 2.8.

(c) For funding purposes, the number of contact hours credited 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 commissioner [~~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 commissioner [~~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 commissioner [~~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.

(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) [~~(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, if applicable, the sum of the basic allotment and the allotment under Section 48.101 to which the district is entitled [~~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.

(k) [~~(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.

SECTION 1.026. Subchapter C, Chapter 48, Education Code, as added by this Act, is amended by adding Section 48.1021 to read as follows:

Sec. 48.1021. SPECIAL EDUCATION ALLOTMENT ADVISORY COMMITTEE. (a) The commissioner shall establish an advisory committee to develop and make recommendations regarding methods of financing special education under the public school finance system.

(b) The advisory committee consists of the following members appointed by the commissioner:

(1) a parent of a student eligible to participate in a school district's special education program under Section 29.003;

(2) a director of a school district's special education program under Subchapter A, Chapter 29;

(3) a teacher certified in special education;

(4) a diagnostician;

(5) a licensed specialist in school psychology;

(6) a provider who provides related services, as described by Section 29.002(2);

(7) a superintendent of a school district;

(8) a member of a school district's board of trustees;

(9) a representative of a disability advocacy organization;

(10) a member of the special education continuing advisory committee under Section 29.006;

(11) a teacher certified in general education;

(12) a student eligible to participate in a school district's special education program under Section 29.003;

(13) a representative of a regional education service center; and

(14) a school district official who handles business and finance matters for the district.

(c) Not later than May 1, 2020, the advisory committee, with assistance from the Legislative Budget Board, shall submit to the lieutenant governor, the speaker of the house of representatives, and the standing legislative committees with primary jurisdiction over public education a report on methods of financing special education under the public school finance system. The report must include:

(1) a description of the current funding methods;

(2) an analysis of the possible implementation of a method of financing special education based on the services and supports each student receives instead of instructional arrangement;

(3) data on current special education expenditures from a representative sample of school districts; and

(4) recommendations for improvements to the current funding methods or for the implementation of new funding methods.

(d) This section expires September 1, 2021.

SECTION 1.027. Subchapter C, Chapter 48, Education Code, as added by this Act, is amended by adding Section 48.103 to read as follows:

Sec. 48.103. ALLOTMENT FOR STUDENT WITH DYSLEXIA OR RELATED DISORDER. (a) Subject to Subsection (b), for each student that a school district serves who has been identified as having dyslexia or a related disorder, the district is entitled to an annual allotment equal to the basic allotment multiplied by 0.1 or a greater amount provided by appropriation.

(b) A school district is entitled to an allotment under Subsection (a) only for a student who:

(1) is receiving services for dyslexia or a related disorder in accordance with:

(A) an individualized education program developed for the student under Section 29.005; or

(B) a plan developed for the student under Section 504, Rehabilitation Act of 1973 (29 U.S.C. Section 794);

(2) is receiving instruction that:

(A) meets applicable dyslexia program criteria established by the State Board of Education; and

(B) is provided by a person with specific training in providing that instruction; or

(3) is permitted, on the basis of having dyslexia or a related disorder, to use modifications in the classroom or accommodations in the administration of assessment instruments under Section 39.023.

(c) A school district may receive funding for a student under this section and Section 48.102 if the student satisfies the requirements of both sections.

(d) A school district may use an amount not to exceed 20 percent of the allotment provided for a qualifying student under this section to contract with a private provider to provide supplemental academic services to the student that are recommended under the student's program or plan described by Subsection (b). A student may not be excused from school to receive supplemental academic services provided under this subsection.

SECTION 1.028. Section 42.152, Education Code, is transferred to Subchapter C, Chapter 48, Education Code, as added by this Act, redesignated as Section 48.104, Education Code, and amended to read as follows:

Sec. 48.104 [~~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 or, if the student is educationally disadvantaged, 0.275. For[~~, 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, a district is entitled to an annual allotment equal to the basic allotment multiplied by 2.41.

(b) For each student who is educationally disadvantaged and resides in an economically disadvantaged census block group as determined by the commissioner under Subsection (c), a district is entitled to an annual allotment equal to the basic allotment multiplied by the weight assigned to the student's census block group under Subsection (d).

(c) For purposes of the allotment under Subsection (b), the commissioner shall establish an index for economically disadvantaged census block groups in the state that provides criteria for determining which census block groups are economically disadvantaged and categorizes economically disadvantaged census block groups in five tiers according to relative severity of economic disadvantage. In determining the severity of economic disadvantage in a census block group, the commissioner shall consider:

(1) the median household income;

(2) the average educational attainment of the population;

(3) the percentage of single-parent households;

(4) the rate of homeownership; and

(5) other economic criteria the commissioner determines likely to disadvantage a student's preparedness and ability to learn.

(d) The weights assigned to the five tiers of the index established under Subsection (c) are, from least to most severe economic disadvantage, 0.225, 0.2375, 0.25, 0.2625, and 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 0.225 for each student who is educationally disadvantaged and resides in that census block group [~~For purposes of this section, the number of educationally disadvantaged students is determined:~~

[~~(1)~~ ~~by averaging the best six months' numbers of students eligible for 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~~].

(f) [~~(b-1)~~] A student receiving a full-time virtual education through the state virtual school network may be included in determining the number of [~~educationally disadvantaged~~] students who are educationally disadvantaged and reside in an economically disadvantaged census block group under Subsection (b) or (e), as applicable, if the school district submits to the commissioner a plan detailing the enhanced services that will be provided to the student and the commissioner approves the plan.

(g) Not later than March 1 of each year, the commissioner shall:

(1) review and, if necessary, update the index established under Subsection (c) to be used for the following school year, based on the most recent estimates published by the United States Census Bureau; and

(2) notify each school district of any changes to the index.

(h) The state demographer, the Department of Agriculture, and any other state agency with relevant information shall assist the commissioner in performing the commissioner's duties under this section.

(i) On a schedule determined by the commissioner, each school district shall report to the agency the census block group in which each student enrolled in the district who is educationally disadvantaged resides. The agency shall provide to school districts a resource for use in determining the census block group in which a student resides.

(j) The commissioner shall adopt rules for the method of determining the number of students who qualify for an allotment under this section at a campus that participates in the Community Eligibility Provision administered by the United States Department of Agriculture, as provided by the Healthy, Hunger-Free Kids Act of 2010 (Pub. L. No. 111-296).

(j-1) In addition to other purposes for which funds allocated under this section may be used, those funds may also be used to:

(1) provide child-care services or assistance with child-care expenses for students at risk of dropping out of school, as described by Section 29.081(d)(5); or

(2) pay the costs associated with services provided through a life skills program in accordance with Sections 29.085(b)(1) and (3)-(7).

(k) At least 55 percent of the funds [~~(c) Funds~~] allocated under this section must [~~shall~~] be used to:

(1) fund supplemental programs and services designed to eliminate any disparity in performance on assessment instruments administered under Subchapter B, Chapter 39, or disparity in the rates of high school completion between:

(A) students who are educationally disadvantaged and students who are not educationally disadvantaged; and

(B) students at risk of dropping out of school, as defined by Section 29.081, and all other students; or

(2) [~~. 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 a disciplinary alternative education program established under Section 37.008, to pay the costs associated with placing students in a juvenile justice alternative education program established under Section 37.011, 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~~].

(l) The commissioner shall adopt rules regarding the use of funds described by Subsection (k). The rules:

(1) must:

(A) permit a school district to use those funds for programs and services that reflect the needs of students at each campus in the district; and

(B) provide for streamlined reporting on the use of those funds; and

(2) may not prohibit the use of those funds for any purpose for which the use of those funds was authorized under former Section 42.152 as that section existed on September 1, 2018.

(m) The State Board of Education shall adopt rules requiring a report on the use of funds under Subsection (k) as part of the annual audit under Section 44.008 and shall develop minimum requirements for that report.

(n) The commissioner annually shall review each report required under Subsection (m) for the preceding school year and:

(1) identify each school district that was not in compliance with Subsection (k) during that school year; and

(2) provide each district identified under Subdivision (1) a reasonable opportunity to comply with Subsection (k).

(o) [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. 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.~~

[~~(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 determination under Subsection (n) that a school district was not in compliance with Subsection (k) for the 2021-2022 school year or a subsequent school year [~~local audit of compensatory education expenditures~~], shall withhold from the [a] district's foundation school fund payment an amount equal to the amount of compensatory education funds the commissioner [~~agency~~] determines were not used in compliance with Subsection (k) [~~(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 (k) [~~(c)~~]. In determining whether a school district is subject to the withholding of funding required under this subsection, the commissioner may consider the district's average use of funds for the three preceding school years.

[~~(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.]

SECTION 1.029. Subchapter C, Chapter 48, Education Code, as added by this Act, is amended by adding Section 48.1041 to read as follows:

Sec. 48.1041. COMPENSATORY EDUCATION ALLOTMENT ADVISORY COMMITTEE. (a) The commissioner shall establish an advisory committee to advise the agency in adopting rules for the compensatory education allotment under Section 48.104, including:

(1) rules establishing the economic criteria described by Section 48.104(c)(5);

(2) rules detailing the method to count students who qualify for the allotment in:

(A) a dropout recovery school or program; or

(B) a residential treatment facility;

(3) methods for properly counting students who are homeless within the meaning of "homeless children and youths" under 42 U.S.C. Section 11434a; and

(4) rules to determine the appropriate weight by which to adjust the basic allotment in determining the compensatory allotment for students described by Subdivision (3).

(b) The advisory committee consists of members appointed by the commissioner, including:

(1) school district superintendents and chief financial officers;

(2) classroom teachers;

(3) representatives of school districts located in an area other than an urban area, as designated by the United States Census Bureau;

(4) at least one representative of an open-enrollment charter school;

(5) demographers;

(6) experts on census data;

(7) public school finance experts; and

(8) appropriate employees of the agency.

(d) A member of the advisory committee is not entitled to receive compensation for service on the committee or reimbursement for expenses incurred in performing official duties as a member of the committee.

(e) Chapter 2110, Government Code, does not apply to the advisory committee.

(f) Not less than once every two years, the advisory committee shall review census and student data and provide recommendations to the agency regarding any suggested changes to the rules adopted for the compensatory education allotment under Section 48.104.

SECTION 1.030. Sections 42.153, 42.154, and 42.157, Education Code, are transferred to Subchapter C, Chapter 48, Education Code, as added by this Act, redesignated as Sections 48.105, 48.106, and 48.107, Education Code, and amended to read as follows:

Sec. 48.105 [~~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:

(1) for a student of limited English proficiency, as defined by Section 29.052:

(A) 0.1; or

(B) 0.15 if the student is in a bilingual education program using a dual language immersion/one-way or two-way program model; and

(2) for a student not described by Subdivision (1), 0.05 if the student is in a bilingual education program using a dual language immersion/two-way program model.

(b) At least 55 percent of the funds [~~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~~].

[~~(c)~~] A district's bilingual education or special language allocation may be used only for program and student evaluation, instructional materials and equipment, staff development, supplemental staff expenses, salary supplements for teachers, incremental costs associated with providing smaller class sizes, and other supplies required for quality instruction [~~and smaller class size~~].

(c) The State Board of Education shall adopt rules requiring a report on the use of funds under Subsection (b) as part of the annual audit under Section 44.008 and shall develop minimum requirements for that report.

(d) The commissioner annually shall review each report required under Subsection (c) for the preceding school year and:

(1) identify each school district that was not in compliance with Subsection (b) during that school year; and

(2) provide each district identified under Subdivision (1) a reasonable opportunity to comply with Subsection (b).

(e) The commissioner, in the year following a determination under Subsection (d) that a school district was not in compliance with Subsection (b) for the 2021-2022 school year or a subsequent school year, shall withhold from the district's foundation school fund payment an amount equal to the amount of bilingual education or special language funds the commissioner determines were not used in compliance with Subsection (b). 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 (b). In determining whether a school district is subject to the withholding of funding required under this subsection, the commissioner may consider the district's average use of funds for the three preceding school years.

Sec. 48.106 [~~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 7 [~~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 for each of the following in which [~~, if~~] the student is enrolled:

(A) [in] two or more advanced career and technology education classes for a total of three or more credits;

(B) a campus designated as a P-TECH school under Section 29.556; or

(C) a campus that is a member of the New Tech Network and that focuses on project-based learning and work-based education.

(b) In this section:

(1) "Career and technology education class" and "career and technology education program" include [a] technology applications courses [~~course on cybersecurity adopted or selected by the State Board of Education under Section 28.025(c-10)~~].

(2) "Full-time equivalent student" means 30 hours of contact a week between a student and career and technology education program personnel.

(c) At least 55 percent of the funds [~~Funds~~] allocated under this section[~~, other than an indirect cost allotment established under State Board of Education rule,~~] must be used in providing career and technology education programs in grades 7 [~~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.]

Sec. 48.107 [~~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.

SECTION 1.031. Subchapter C, Chapter 48, Education Code, as added by this Act, is amended by adding Sections 48.108, 48.110, 48.1101, 48.111, 48.112, and 48.114 to read as follows:

Sec. 48.108. EARLY EDUCATION ALLOTMENT. (a) For each student in average daily attendance in kindergarten through third grade, a school district is entitled to an annual allotment equal to the basic allotment multiplied by 0.1 if the student is:

(1) educationally disadvantaged; or

(2) a student of limited English proficiency, as defined by Section 29.052, and is in a bilingual education or special language program under Subchapter B, Chapter 29.

(b) Funds allocated under this section must be used to fund programs and services designed to improve student performance in reading and mathematics in prekindergarten through third grade, including programs and services designed to assist the district in achieving the goals set in the district's early childhood literacy and mathematics proficiency plans adopted under Section 11.185.

(c) A school district is entitled to an allotment under each subdivision of Subsection (a) for which a student qualifies.

(d) A school district may receive funding for a student under this section and under Sections 48.104 and 48.105, as applicable, if the student satisfies the requirements of each applicable section.

Sec. 48.110. COLLEGE, CAREER, OR MILITARY READINESS OUTCOMES BONUS. (a) The purpose of this section is to further the goal set under the state's master plan for higher education developed under Section 61.051 for at least 60 percent of all adults aged 25 to 34 in this state to achieve a postsecondary degree or workforce credential by 2030.

(b) For purposes of the outcomes bonus under this section, the commissioner shall determine the threshold percentage as provided by Subsection (g) for college, career, or military readiness as described by Subsection (f) for each of the following cohorts:

(1) annual graduates who are educationally disadvantaged;

(2) annual graduates who are not educationally disadvantaged; and

(3) annual graduates who are enrolled in a special education program under Subchapter A, Chapter 29, regardless of whether the annual graduates are educationally disadvantaged.

(c) Each year, the commissioner shall determine for each school district the minimum number of annual graduates in each cohort described by Subsection (b) who would have to demonstrate college, career, or military readiness as described by Subsection (f) in order for the district to achieve a percentage of college, career, or military readiness for that cohort equal to the threshold percentage established for that cohort under Subsection (b).

(d) For each annual graduate in a cohort described by Subsection (b) who demonstrates college, career, or military readiness as described by Subsection (f) in excess of the minimum number of students determined for the applicable district cohort under Subsection (c), a school district is entitled to an annual outcomes bonus of:

(1) if the annual graduate is educationally disadvantaged, $5,000;

(2) if the annual graduate is not educationally disadvantaged, $3,000; and

(3) if the annual graduate is enrolled in a special education program under Subchapter A, Chapter 29, $2,000, regardless of whether the annual graduate is educationally disadvantaged.

(e) A school district is entitled to an outcomes bonus under each subdivision of Subsection (d) for which an annual graduate qualifies.

(f) For purposes of this section, an annual graduate demonstrates:

(1) college readiness if the annual graduate:

(A) achieves college readiness standards used for accountability purposes under Chapter 39 on the ACT, the SAT, or an assessment instrument designated by the Texas Higher Education Coordinating Board under Section 51.334; and

(B) during a time period established by commissioner rule, enrolls at a postsecondary educational institution;

(2) career readiness if the annual graduate:

(B) during a time period established by commissioner rule, earns an industry-accepted certificate; and

(3) military readiness if the annual graduate:

(A) achieves a passing score set by the applicable military branch on the Armed Services Vocational Aptitude Battery; and

(B) during a time period established by commissioner rule, enlists in the armed forces of the United States.

(g) The commissioner shall establish the threshold percentages under Subsection (b) using the 25th percentile of statewide college, career, or military readiness as described by Subsection (f) for the applicable cohort of annual graduates during the 2016-2017 school year.

(h) On application by a school district, the commissioner may allow annual graduates from the district to satisfy the requirement for demonstrating career readiness under Subsection (f)(2)(B) by successfully completing a coherent sequence of courses required to obtain an industry-accepted certificate. The district must demonstrate in the application that the district is unable to provide sufficient courses or programs to enable students enrolled at the district to earn an industry-accepted certificate within the time period established by the commissioner under Subsection (f)(2)(B). The commissioner by rule shall provide the criteria required for an application under this subsection.

(i) At least 55 percent of the funds allocated under this section must be used in grades 8 through 12 to improve college, career, and military readiness outcomes as described by Subsection (f).

(b) Not later than January 1, 2021, the agency shall submit to the legislature a report on the results of the study and any recommendations for legislative or other action.

Sec. 48.111. FAST GROWTH ALLOTMENT. A school district in which the growth in student enrollment in the district over the preceding three school years is in the top quartile of student enrollment growth in school districts in the state for that period, as determined by the commissioner, is entitled to an annual allotment equal to the basic allotment multiplied by 0.04 for each student in average daily attendance.

Sec. 48.112. TEACHER INCENTIVE ALLOTMENT. (a) In this section, "rural campus" means a school campus that is:

(1) located in:

(A) an area that is not designated as an urbanized area or an urban cluster by the United States Census Bureau; and

(B) a school district with fewer than 5,000 enrolled students; or

(2) designated as a rural campus under rules adopted by the commissioner.

(b) To ensure classroom teachers in this state have access to a six-figure salary, the allotment provided to a school district under this section offers resources to the district to increase teacher compensation and prioritize funding for high needs and rural district campuses.

(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 $32,000 as determined under Subsection (d), for each master teacher;

(2) $6,000, or an increased amount not to exceed $18,000 as determined under Subsection (d), for each exemplary teacher; and

(3) $3,000, or an increased amount not to exceed $9,000 as determined under Subsection (d), for each recognized 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 Subsection (e):

(1) $5,000 for each master teacher;

(2) $3,000 for each exemplary teacher; and

(3) $1,500 for each recognized teacher.

(e) Except as provided by Subsection (f), a point value for each student at a district campus shall be assigned as follows:

(1) 0, for a student for whom the district does not receive a compensatory education allotment under Section 48.104(b) or (e); or

(2) 0.5, 1.0, 2.0, 3.0, or 4.0, respectively, from least to most severe economic disadvantage according to the census block group in which the student resides, for a student for whom the district receives a compensatory education allotment under Section 48.104(b) or (e).

(f) If the campus at which a student is enrolled is classified as a rural campus, a student is assigned the point value two tiers higher than the student's point value determined under Subsection (e)(1) or (2).

(g) A district is entitled to receive an increased allotment under this section in the amount necessary for reimbursement for any fees paid under Section 21.3521.

(h) The commissioner shall annually make available to the public a list of campuses with the projected allotment amounts per teacher designation at each campus.

(i) A district shall annually certify that:

(1) funds received under this section were used as follows:

(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) 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; and

(2) the district prioritized high needs campuses in the district in using funds received under this section.

Sec. 48.114. MENTOR PROGRAM ALLOTMENT. (a) A school district that has implemented a mentoring program for classroom teachers who have less than two years of teaching experience under Section 21.458 is entitled to an allotment as determined under Subsection (b) to fund the mentoring program and to provide stipends for mentor teachers.

(b) The commissioner shall adopt a formula to determine the amount to which each district described by Subsection (a) is entitled.

(1) mentor teacher stipends;

(2) scheduled release time for mentor teachers and the classroom teachers to whom they are assigned for meeting and engaging in mentoring activities; and

(3) mentoring support through providers of mentor training.

SECTION 1.032. Chapter 48, Education Code, as added by this Act, is amended by adding Subchapter D, and a heading is added to that subchapter to read as follows:

SUBCHAPTER D. ADDITIONAL FUNDING

SECTION 1.033. Sections 42.155 and 42.158, Education Code, are transferred to Subchapter D, Chapter 48, Education Code, as added by this Act, redesignated as Sections 48.151 and 48.152, Education Code, and amended to read as follows:

Sec. 48.151 [~~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:

(A) 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; or

(B) is a homeless child or youth, as defined by 42 U.S.C. Section 11434a.

(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.~~]

(c) Each district or county operating a regular transportation system is entitled to an allotment based on a rate per mile [~~the daily cost~~] per regular eligible student set [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 or a high risk of violence if they walked to school.

(d-1) For purposes of Subsection (d), each board of trustees shall provide to the commissioner an explanation of the hazardous traffic conditions or areas presenting a high risk of violence applicable to that district and shall identify the specific hazardous or high-risk areas for which the allocation is requested. A hazardous traffic 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. An area presents a high risk of violence if law enforcement records indicate a high incidence of violent crimes in the area. Each board of trustees requesting funds for an area presenting a high risk of violence must, in addition to the explanation required by this subsection, provide the commissioner with consolidated law enforcement records that document violent crimes identified by reporting agencies within the relevant jurisdiction.

(d-2) A district or county may use all or part of any funds received under Subsection (d) to support community walking transportation programs, including walking school bus programs, provided that the district or county requires each supported program to submit a financial report to the district or county each semester that covers services provided by the program for the benefit of the district or county. The commissioner shall adopt rules governing the transportation allotment as necessary to permit a district or county to receive funds under Subsection (d) that may be used to support innovative school safety projects, including community walking transportation programs as provided by this subsection and any other appropriate safety project, including rules defining an approved walking route mile that may be used as necessary in implementing this subsection.

(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, or from a district campus to a location at which students are provided work-based learning under the district's career and technology program 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 of this code [~~, if the transportation is provided within the approved routes of the district or county for the school the student attends~~].

(l) A school district may, with the funds allotted under this section, provide a bus pass or card for another transportation system to each student who is eligible to use the regular transportation system of the district but for whom the regular transportation system of the district is not a feasible method of providing transportation. The commissioner by rule shall provide procedures for a school district to provide bus passes or cards to students under this subsection.

(m) A school district shall be reimbursed on a per-mile basis for the cost of transporting a dual credit student to another campus in the district, a campus in another district, or a postsecondary educational institution for purposes of attending the course, if the course is not available at the student's campus.

Sec. 48.152 [~~42.158~~]. NEW INSTRUCTIONAL FACILITY ALLOTMENT. (a) In this section:

(1) "Instructional facility" has the meaning assigned by Section 46.001.

(2) "New instructional facility" includes:

(A) a newly constructed instructional facility;

(B) a repurposed instructional facility; and

(C) a leased facility operating for the first time as an instructional facility with a minimum lease term of not less than 10 years.

(b) A school district is entitled to an additional allotment as provided by this section for operational expenses associated with opening a new instructional facility.

(c) [~~(a-1)~~] A school district entitled to an allotment under this section may use funds from the district's allotment to renovate an existing instructional facility to serve as a dedicated cybersecurity computer laboratory.

(d) [~~(b)~~] For the first school year in which students attend a new instructional facility, a school district is entitled to an allotment of $1,000 for each student in average daily attendance at the facility. For the second school year in which students attend that instructional facility, a school district is entitled to an allotment of $1,000 for each additional student in average daily attendance at the facility.

(e) [~~(c)~~] For purposes of this section, the number of additional 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.

(f) The [~~(d)~~ ~~Subject to Subsection (d-1), the~~] amount appropriated for allotments under this section may not exceed $100 [~~$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 48.266(f) [~~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 $1,000 for each student in average daily attendance. Any funds remaining after preventing all reductions in amounts due for high school instructional facilities may be applied proportionally to all other eligible instructional facilities, subject to the maximum amount of $1,000 ~~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:~~

[~~(1)~~ ~~"Instructional facility" has the meaning assigned by Section 46.001.~~

[~~(2)~~ ~~"New instructional facility" includes:~~

[~~(A)~~ ~~a newly constructed instructional facility;~~

[~~(B)~~ ~~a repurposed instructional facility; and~~

[~~(C)~~ ~~a leased facility operating for the first time as an instructional facility with a minimum lease term of not less than 10 years.~~]

SECTION 1.034. Subchapter D, Chapter 48, Education Code, as added by this Act, is amended by adding Section 48.153 to read as follows:

Sec. 48.153. DROPOUT RECOVERY SCHOOL AND RESIDENTIAL PLACEMENT FACILITY ALLOTMENT. A school district or open-enrollment charter school is entitled to $275 for each student in average daily attendance who:

(1) resides in a residential placement facility; or

(2) is at a district or school or a campus of the district or school that is designated as a dropout recovery school under Section 39.0548.

SECTION 1.035. Section 42.106, Education Code, is transferred to Subchapter D, Chapter 48, Education Code, as added by this Act, redesignated as Section 48.154, and amended to read as follows:

Sec. 48.154 [~~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).

SECTION 1.036. Subchapter D, Chapter 48, Education Code, as added by this Act, is amended by adding Sections 48.155 and 48.156 to read as follows:

Sec. 48.155. COLLEGE PREPARATION ASSESSMENT REIMBURSEMENT. A school district is entitled to reimbursement for the amount of fees paid by the district for the administration of an assessment instrument under Section 39.0261(a)(3).

Sec. 48.156. CERTIFICATION EXAMINATION REIMBURSEMENT. A school district is entitled to reimbursement for the amount of a subsidy paid by the district for a student's certification examination under Section 29.190(a) as provided by Section 29.190(c).

SECTION 1.037. Chapter 48, Education Code, as added by this Act, is amended by adding Subchapter E, and a heading is added to that subchapter to read as follows:

SUBCHAPTER E. TIER TWO ENTITLEMENT

SECTION 1.038. Sections 42.301, 42.302, 42.303, and 42.304, Education Code, are transferred to Subchapter E, Chapter 48, Education Code, as added by this Act, redesignated as Sections 48.201, 48.202, 48.203, and 48.204, Education Code, and amended to read as follows:

Sec. 48.201 [~~42.301~~]. PURPOSE. The purpose of the tier two [~~guaranteed yield~~] component of the Foundation School Program is to provide each school district with the opportunity to provide the basic program and to supplement that program at a level of its own choice. An allotment under this subchapter may be used for any legal purpose other than capital outlay or debt service.

Sec. 48.202 [~~42.302~~]. TIER TWO ALLOTMENT. (a) Each school district is guaranteed a specified amount per weighted student in state and local funds for each cent of tax effort over that required for the district's local fund assignment up to the maximum level specified in this subchapter. The amount of state support, subject only to the maximum amount under Section 48.203 [~~42.303~~], is determined by the formula:

GYA = (GL X WADA X DTR X 100) - LR

where:

"GYA" is the guaranteed yield amount of state funds to be allocated to the district;

"GL" is the dollar amount guaranteed level of state and local funds per weighted student per cent of tax effort, which is an amount described by Subsection (a-1) or a greater amount for any year provided by appropriation;

"WADA" is the number of students in weighted average daily attendance, which is calculated by dividing the sum of the school district's allotments under Subchapters B and C[~~, less any allotment to the district for transportation, any allotment under Section 42.158 or 42.160, and 50 percent of the adjustment under Section 42.102,~~] by the basic allotment for the applicable year;

"DTR" is the district enrichment tax rate of the school district, which is determined by subtracting the amounts specified by Subsection (b) from the total amount of maintenance and operations taxes collected by the school district for the applicable school year and dividing the difference by the quotient of the district's taxable value of property as determined under Subchapter M, Chapter 403, Government Code, or, if applicable, under Section 48.258 [~~42.2521~~], divided by 100; and

"LR" is the local revenue, which is determined by multiplying "DTR" by the quotient of the district's taxable value of property as determined under Subchapter M, Chapter 403, Government Code, or, if applicable, under Section 48.258 [~~42.2521~~], divided by 100.

(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 [~~that would be~~] available to a school district at the 96th percentile of wealth per weighted student [the Austin Independent School District, as determined by the commissioner in cooperation with the Legislative Budget Board, if the reduction of the limitation on tax increases as provided by Section 11.26(a-1), (a-2), or (a-3), Tax Code, did not apply,] or the amount that results from multiplying 6,160, or the greater amount provided under Section 48.051(b), if applicable, by 0.016 [~~of district tax revenue per weighted student per cent of tax effort used for purposes of this subdivision in the preceding school year~~], for the first eight [~~six~~] cents by which the district's maintenance and operations tax rate exceeds the district's tier one tax rate [equal to the sum of 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 any additional tax effort included in calculating the district's compressed tax rate under Section 42.101(a-1)]; and

(2) subject to Subsection (f), the amount that results from multiplying $6,160, or the greater amount provided under Section 48.051(b), if applicable, by 0.008 [~~$31.95~~], for the district's maintenance and operations tax effort that exceeds the amount of tax effort described by Subdivision (1).

(a-2) The limitation on district enrichment tax rate ("DTR") under Section 48.203 [~~42.303~~] does not apply to the district's maintenance and operations tax effort described by Subsection (a-1)(1).

(b) In computing the district enrichment tax rate of a school district, the total amount of maintenance and operations taxes collected by the school district does not include the amount of:

(1) the district's local fund assignment under Section 48.256 [~~42.252~~]; or

(2) taxes paid into a tax increment fund under Chapter 311, Tax Code.

(c) For purposes of this section, school district taxes for which credit is granted under Section 31.035, 31.036, or 31.037, Tax Code, are considered taxes collected by the school district as if the taxes were paid when the credit for the taxes was granted.

(d) For purposes of this section, the total amount of maintenance and operations taxes collected for an applicable school year by a school district with alternate tax dates, as authorized by Section 26.135, Tax Code, is the amount of taxes collected on or after January 1 of the year in which the school year begins and not later than December 31 of the same year.

(e) For purposes of this section, school district taxes for which credit is granted under former Subchapter D, Chapter 313, Tax Code, are considered taxes collected by the school district as if the taxes were paid when the credit for the taxes was granted.

(f) For a school year in which the dollar amount guaranteed level of state and local funds per weighted student per cent of tax effort ("GL") under Subsection (a-1)(2) exceeds the dollar amount guaranteed level of state and local funds per weighted student per cent of tax effort ("GL") under Subsection (a-1)(2) for the preceding school year, a school district shall reduce the district's tax rate under Section 45.0032(b)(2) for the tax year that corresponds to that school year to a rate that results in the amount of state and local funds per weighted student per cent of tax effort available to the district at the dollar amount guaranteed level for the preceding school year. A school district is not entitled to the amount equal to the increase of revenue described by this subsection for the school year for which the district must reduce the district's tax rate. Unless Section 26.08(a-1), Tax Code, applies to the district, for a tax year in which a district must reduce the district's tax rate under this subsection, the district may not increase the district's maintenance and operations tax rate to a rate that exceeds the maximum maintenance and operations tax rate permitted under Section 45.003(d) or (f), as applicable, minus the reduction of tax effort required under this subsection. This subsection does not apply if the amount of state funds appropriated for a school year specifically excludes the amount necessary to provide the dollar amount guaranteed level of state and local funds per weighted student per cent of tax effort under Subsection (a-1)(2) [If a school district imposes a maintenance and operations tax at a rate greater than the rate equal to the product of the state compression percentage, as determined under Section 42.2516, multiplied by the maintenance and operations tax rate adopted by the district for the 2005 tax year, the district is entitled to receive an allotment under this section on the basis of that greater tax effort].

Sec. 48.203 [~~42.303~~]. LIMITATION ON ENRICHMENT TAX RATE. The district enrichment tax rate ("DTR") under Section 48.202 [~~42.302~~] may not exceed the amount per $100 of valuation by which the maximum rate permitted under Section 45.003 exceeds the rate used to determine the district's local share under Section 48.256 [~~42.252~~], or a greater amount for any year provided by appropriation.

Sec. 48.204 [~~42.304~~]. COMPUTATION OF AID FOR DISTRICT ON MILITARY RESERVATION OR AT STATE SCHOOL. State assistance under this subchapter for a school district located on a federal military installation or at Moody State School is computed using the average tax rate and property value per student of school districts in the county, as determined by the commissioner.

SECTION 1.039. Chapter 48, Education Code, as added by this Act, is amended by adding Subchapter F, and a heading is added to that subchapter to read as follows:

SUBCHAPTER F. FINANCING THE PROGRAM

SECTION 1.040. Sections 42.251, 42.2511, 42.2514, 42.2515, 42.2516, and 42.252, Education Code, are transferred to Subchapter F, Chapter 48, Education Code, as added by this Act, redesignated as Sections 48.251, 48.252, 48.253, 48.254, 48.255, and 48.256, Education Code, and amended to read as follows:

Sec. 48.251 [~~42.251~~]. FINANCING; GENERAL RULE. (a) The cost of the Foundation School Program for a school district is the total sum of:

(1) the sum of the tier one allotments and other funding as follows:

(A) the basic allotment under Subchapter B;

(B) [~~and~~] the student-based [~~special~~] allotments under Subchapter C; and

(2) [~~, computed in accordance with this chapter, constitute the tier one allotments. The sum of the tier one allotments and~~] the tier two allotment [~~guaranteed yield allotments~~] under Subchapter E.

(b) The sum of the Foundation School Program maintenance and operations costs for all accredited school districts in this state constitutes [~~F, computed in accordance with this chapter, constitute~~] the total maintenance and operations cost of the Foundation School Program.

(1) state available school funds distributed in accordance with the law [~~ad valorem tax revenue generated by an equalized uniform school district effort~~];

(2) ad valorem tax revenue generated by local school district effort [~~in excess of the equalized uniform school district effort~~]; and

(3) [~~state available school funds distributed in accordance with law; and~~

[~~(4)~~] state funds appropriated for the purposes of public school education and allocated to each district in an amount sufficient to finance the cost of each district's Foundation School Program not covered by other funds specified in this subsection.

Sec. 48.252 [~~42.2511~~]. SCHOOL DISTRICT ENTITLEMENT FOR CERTAIN STUDENTS. (a) This section applies only to:

(1) a school district and an open-enrollment charter school that enter into a contract to operate a district campus as provided by Section 11.174; and

(2) a charter granted by a school district for a program operated by an entity that has entered into a contract under Section 11.174, provided that the district does not appoint a majority of the governing body of the charter holder.

(b) Notwithstanding any other provision of this chapter or Chapter 49 [41], a school district subject to this section is entitled to receive for each student in average daily attendance at the campus described by Subsection (a) an amount equivalent to the difference, if the difference results in increased funding, between:

(1) the amount described by Section 12.106; and

(2) the amount to which the district would be entitled under this chapter.

Sec. 48.253 [~~42.2514~~]. ADDITIONAL STATE AID FOR TAX INCREMENT FINANCING PAYMENTS. (a) For each school year, a school district[~~, including a school district that is otherwise ineligible for state aid under this chapter,~~] is entitled to state aid in an amount equal to the amount the district is required to pay into the tax increment fund for a reinvestment zone under Section 311.013(n), Tax Code.

(b) A school district shall provide to the agency any agreements, amendments to agreements, or other information required by the agency to implement this section.

Sec. 48.254 [~~42.2515~~]. ADDITIONAL STATE AID FOR AD VALOREM TAX CREDITS UNDER TEXAS ECONOMIC DEVELOPMENT ACT. [~~(a)~~] For each school year, a school district, including a school district that is otherwise ineligible for state aid under this chapter, is entitled to state aid in an amount equal to the amount of all tax credits credited against ad valorem taxes of the district in that year under former Subchapter D, Chapter 313, Tax Code.

[~~(b)~~ ~~The commissioner may adopt rules to implement and administer this section.~~]

Sec. 48.255 [~~42.2516~~]. STATE COMPRESSION PERCENTAGE. (a) In this title, "state compression percentage" means the percentage of the rate of $1.00 per $100 valuation of taxable property at which a school district must levy a [~~district's adopted~~] maintenance and operations tax to receive the full amount of the tier one allotment to which the district is entitled under this chapter.

(b) The [~~tax rate for the 2005~~ ~~tax year that serves as the basis for state funding. If the~~] state compression percentage is:

(1) 93 percent; or

(2) a lower percentage set [~~not established~~] by appropriation for a school year [, the commissioner shall determine the state compression percentage for each school year based on the percentage by which a district is able to reduce the district's maintenance and operations tax rate for that year, as compared to the district's adopted maintenance and operations tax rate for the 2005 tax year, as a result of state funds appropriated for that year from the property tax relief fund established under Section 403.109, Government Code, or from another funding source available for school district property tax relief.

[~~(g)~~ ~~The commissioner may adopt rules necessary to implement this section.~~

[~~(h)~~ ~~A determination by the commissioner under this section is final and may not be appealed~~].

Sec. 48.256 [~~42.252~~]. LOCAL SHARE OF PROGRAM COST (TIER ONE). (a) Each school district's share of the Foundation School Program is determined by the following formula:

LFA = TR X DPV

where:

"LFA" is the school district's local share;

"TR" is the school district's adopted tier one maintenance and operations [a] tax rate, as described by Section 45.0032(a) [~~which~~] for each hundred dollars of valuation [~~is an effective tax rate of the amount equal to the product of the state compression percentage, as determined under Section 42.2516, multiplied by the lesser of:~~

[~~(1)~~ ~~$1.50; or~~

[~~(2)~~ ~~the maintenance and operations tax rate adopted by the district for the 2005 tax year~~]; and

"DPV" is the taxable value of property in the school district for the current [~~preceding~~] tax year determined under Subchapter M, Chapter 403, Government Code.

[~~(a-1)~~ Notwithstanding Subsection (a), for a school district that adopted a maintenance and operations tax rate for the 2005 tax year below the maximum rate permitted by law for that year, the district's tax rate ("TR") includes the tax effort included in calculating the district's compressed tax rate under Section 42.101(a-1).]

(b) The commissioner shall adjust the values reported by [~~in the official report of~~] the comptroller [~~as required by Section 5.09(a), Tax Code,~~] to reflect reductions in taxable value of property resulting from natural or economic disaster [~~after January 1~~] in the year in which the valuations are determined. The decision of the commissioner is final. An adjustment does not affect the local fund assignment of any other school district.

SECTION 1.041. Subchapter F, Chapter 48, Education Code, as added by this Act, is amended by adding Section 48.257 to read as follows:

Sec. 48.257. LOCAL REVENUE LEVEL IN EXCESS OF ENTITLEMENT. (a) Subject to Subsection (b), if a school district's tier one local share under Section 48.256 exceeds the district's entitlement under Section 48.266(a)(1) less the district's distribution from the state available school fund, the district must reduce the district's tier one revenue level in accordance with Chapter 49 to a level not to exceed the district's entitlement under Section 48.266(a)(1) less the district's distribution from the state available school fund.

(c) For purposes of Subsection (a), state aid to which a district is entitled under this chapter that is not described by Section 48.266(a)(1), (2), or (3) may offset the amount by which a district must reduce the district's tier one revenue level under Subsection (a). Any amount of state aid used as an offset under this subsection shall reduce the amount of state aid to which the district is entitled.

(d) Except as provided by Subsection (e), a school district is entitled to retain the total amount of the district's tier two local share described by Section 48.266(a)(5)(A).

(e) In any school year for which the amount of state funds appropriated specifically excludes the amount necessary to provide the dollar amount guaranteed level of state and local funds per weighted student per cent of tax effort under Section 48.202(a-1)(1), a district may only retain the amount of the district's tier two local share described by Section 48.266(a)(5)(A) equal to the amount of revenue that would be generated based on the amount appropriated for the dollar amount guaranteed level of state and local funds.

(f) If the amount of a school district's tier two local share described by Section 48.266(a)(5)(B) to which a district is entitled exceeds the amount described by Section 48.202(a-1)(2), the district must reduce the district's revenue in accordance with Chapter 49 to a level not to exceed the amount described by Section 48.202 (a-1)(2).

(g) For a district to which Section 45.003(f) applies, revenue generated from any cents of maintenance and operations tax effort that exceeds the maximum rate permitted under Section 45.003(d) is subject to the revenue limit established under Subsection (f).

SECTION 1.042. Sections 42.2521, 42.2522, 42.2523, 42.2524, 42.2525, 42.2526, 42.2527, 42.2528, 42.253, 42.2531, 42.2532, 42.254, 42.255, 42.257, 42.258, 42.259, 42.2591, and 42.260, Education Code, are transferred to Subchapter F, Chapter 48, Education Code, as added by this Act, redesignated as Sections 48.258, 48.259, 48.260, 48.261, 48.262, 48.263, 48.264, 48.265, 48.266, 48.267, 48.268, 48.269, 48.270, 48.271, 48.272, 48.273, 48.274, and 48.275, Education Code, and amended to read as follows:

Sec. 48.258 [~~42.2521~~]. ADJUSTMENT FOR RAPID DECLINE IN TAXABLE VALUE OF PROPERTY. (a) For purposes of Chapters [41 ~~and~~] 46 and 49 and this chapter, and to the extent money specifically authorized to be used under this section is available, the commissioner shall adjust the taxable value of property in a school district that, due to factors beyond the control of the board of trustees, experiences a rapid decline in the tax base used in calculating taxable values in excess of four percent of the tax base used in the preceding year.

(b) To the extent that a sufficient amount of money is not available to fund all adjustments under this section, the commissioner shall reduce adjustments in the manner provided by Section 48.266(f) [~~42.253(h)~~] so that the total amount of adjustments equals the amount of money available to fund the adjustments.

Sec. 48.259 [~~42.2522~~]. ADJUSTMENT FOR OPTIONAL HOMESTEAD EXEMPTION. (a) In any school year, the commissioner may not provide funding under this chapter or Chapter 46 based on a school district's taxable value of property computed in accordance with Section 403.302(d)(2), Government Code, unless:

(1) funds are specifically appropriated for purposes of this section; or

(2) the commissioner determines that the total amount of state funds appropriated for purposes of the Foundation School Program for the school year exceeds the amount of state funds distributed to school districts in accordance with Section 48.266 [~~42.253~~] based on the taxable values of property in school districts computed in accordance with Section 403.302(d), Government Code, without any deduction for residence homestead exemptions granted under Section 11.13(n), Tax Code.

(b) In making a determination under Subsection (a)(2), the commissioner shall:

(1) notwithstanding Section 48.266(b) [~~42.253(b)~~], reduce the entitlement under this chapter of a school district whose final taxable value of property is higher than the estimate under Section 48.269 [~~42.254~~] and make payments to school districts accordingly; and

(2) give priority to school districts that, due to factors beyond the control of the board of trustees, experience a rapid decline in the tax base used in calculating taxable values in excess of four percent of the tax base used in the preceding year.

(c) In the first year of a state fiscal biennium, before providing funding as provided by Subsection (a)(2), the commissioner shall ensure that sufficient appropriated funds for purposes of the Foundation School Program are available for the second year of the biennium, including funds to be used for purposes of Section 48.258 [~~42.2521~~].

(d) If the commissioner determines that the amount of funds available under Subsection (a)(1) or (2) does not at least equal the total amount of state funding to which districts would be entitled if state funding under this chapter were based on the taxable values of property in school districts computed in accordance with Section 403.302(d)(2), Government Code, the commissioner may, to the extent necessary, provide state funding based on a uniform lesser fraction of the deduction under Section 403.302(d)(2), Government Code.

(e) The commissioner shall notify school districts as soon as practicable as to the availability of funds under this section. For purposes of computing a rollback tax rate under Section 26.08, Tax Code, a district shall adjust the district's tax rate limit to reflect assistance received under this section.

Sec. 48.260 [~~42.2523~~]. ADJUSTMENT FOR PROPERTY VALUE AFFECTED BY STATE OF DISASTER. (a) For purposes of Chapters [41 ~~and~~] 46 and 49 and this chapter, the commissioner shall adjust the taxable value of property 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, as necessary to ensure that the district receives funding based as soon as possible on property values as affected by the disaster.

(b) The commissioner may fund adjustments under this section using funds specifically appropriated for the purpose or other funds available to the commissioner for that purpose.

Sec. 48.261 [~~42.2524~~]. REIMBURSEMENT FOR DISASTER REMEDIATION COSTS. (a) This section applies only to 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, and that incurs disaster remediation costs as a result of the disaster.

(b) During the two-year period following the date of the governor's initial proclamation or executive order declaring a state of disaster, a district may apply to the commissioner for reimbursement of disaster remediation costs that the district pays during that period and does not anticipate recovering through insurance proceeds, federal disaster relief payments, or another similar source of reimbursement.

(c) The commissioner may provide reimbursement under this section only if funds are available for that purpose from [~~as follows~~]:

(1) [~~reimbursement for a school district not required to take action under Chapter 41~~ ~~may be provided from:~~

[~~(A)~~] amounts appropriated for that purpose, including amounts appropriated for school [~~those~~] districts for that purpose to the disaster contingency fund established under Section 418.073, Government Code; or

(2) [~~(B)~~] Foundation School Program funds available for that purpose, based on a determination by the commissioner that the amount appropriated for the Foundation School Program, including the facilities component as provided by Chapter 46, exceeds the amount to which districts are entitled under this chapter and Chapter 46[~~; and~~

[~~(2)~~ ~~reimbursement for a school district required to take action under Chapter 41~~ ~~may be provided from funds described by Subdivision (1)(B) if funds remain available after fully reimbursing each school district described by Subdivision (1) for its disaster remediation costs~~].

(d) [~~If the amount of money available for purposes of reimbursing school districts not required to take action under Chapter 41~~ is not sufficient to fully reimburse each district's disaster remediation costs, the commissioner shall reduce the amount of assistance provided to each of those districts proportionately. If the amount of money available for purposes of reimbursing school districts required to take action under Chapter 41 ~~is not sufficient to fully reimburse each district's disaster remediation costs, the commissioner shall reduce the amount of assistance provided to each of those districts proportionately.~~

[~~(e)~~] A district seeking reimbursement under this section must provide the commissioner with adequate documentation of the costs for which the district seeks reimbursement.

(e) [~~(f)~~ ~~A district required to take action under Chapter 41:~~

[~~(1)~~ may, at its discretion, receive assistance provided under this section either as a payment of state aid under this chapter or as a reduction in the total amount required to be paid by the district for attendance credits under Section 41.093; and

[~~(2)~~ ~~may not obtain reimbursement under this section for the payment of any disaster remediation costs that resulted in a reduction under Section 41.0931 of the district's cost of attendance credits.~~

[~~(h)~~] The commissioner shall adopt rules necessary to implement this section, including rules:

(1) defining "disaster remediation costs" for purposes of this section, which must include the cost to repair or replace vehicles or computers damaged in the disaster; and

(2) specifying the type of documentation required under Subsection (d) [~~(e)~~].

(f) [~~(i)~~] Notwithstanding any other provision of this section, the commissioner may permit a district to use amounts provided to a district under this section to pay the costs of replacing a facility instead of repairing the facility. The commissioner shall ensure that a district that elects to replace a facility does not receive an amount under this section that exceeds the lesser of:

(1) the amount that would be provided to the district if the facility were repaired; or

(2) the amount necessary to replace the facility.

(g) [~~(j)~~] This section does not require the commissioner to provide any requested reimbursement. A decision of the commissioner regarding reimbursement is final and may not be appealed.

Sec. 48.262 [~~42.2525~~]. ADJUSTMENTS FOR CERTAIN DISTRICTS RECEIVING FEDERAL IMPACT AID. The commissioner is granted the authority to ensure that school districts receiving federal impact aid due to the presence of a military installation or significant concentrations of military students do not receive more than an eight percent reduction should the federal government reduce appropriations to those schools.

Sec. 48.263 [~~42.2526~~]. ADJUSTMENT FOR DISTRICT OPERATING PILOT PROGRAM. (a) This section applies only to a school district operating a pilot program authorized by Section 28.0255.

(b) Beginning with the first school year that follows the first school year in which students receive high school diplomas under the pilot program authorized by Section 28.0255 and continuing for every subsequent school year that the district operates the pilot program, the commissioner shall provide funding for the district's prekindergarten program under Section 29.153 on a full-day basis for a number of prekindergarten students equal to twice the number of students who received a high school diploma under the pilot program authorized by Section 28.0255 during the preceding school year.

Sec. 48.264 [~~42.2527~~]. ADJUSTMENT FOR CERTAIN DISTRICTS WITH EARLY HIGH SCHOOL GRADUATION PROGRAMS. (a) As a pilot program to enable the state to evaluate the benefit of providing additional funding at the prekindergarten level for low-income students, the commissioner shall provide prekindergarten funding in accordance with this section to a school district located in a county that borders the United Mexican States and the Gulf of Mexico.

(b) The commissioner shall provide funding for a school district's prekindergarten program on a half-day basis for a number of low-income prekindergarten students equal to twice the number of students who received, as a result of participation in an early high school graduation program operated by the district, a high school diploma from the district during the preceding school year after three years of secondary school attendance.

(d) This section expires September 1, 2023.

Sec. 48.265 [~~42.2528~~]. EXCESS FUNDS FOR VIDEO SURVEILLANCE OF SPECIAL EDUCATION SETTINGS. (a) Notwithstanding any other provision of law, if the commissioner determines that the amount appropriated for the purposes of the Foundation School Program exceeds the amount to which school districts are entitled under this chapter, the commissioner by rule shall establish a grant program through which excess funds are awarded as grants for the purchase of video equipment, or for the reimbursement of costs for previously purchased video equipment, used for monitoring special education classrooms or other special education settings required under Section 29.022.

(b) In awarding grants under this section, the commissioner shall give highest priority to districts with maintenance and operations tax rates at the greatest rates permitted by law. The commissioner shall also give priority to:

(1) districts with maintenance and operations tax rates at least equal to the state maximum compressed tax rate, as defined by Section 48.051(a) [~~42.101(a)~~], and lowest amounts of maintenance and operations tax revenue per weighted student; and

(2) districts with debt service tax rates near or equal to the greatest rates permitted by law.

Sec. 48.266 [~~42.253~~]. DISTRIBUTION OF FOUNDATION SCHOOL FUND. (a) For each school year the commissioner shall determine:

(1) the amount of money to which a school district is entitled under Subchapters B, [~~and~~] C, and D;

(2) the amount of money to which a school district is entitled under Subchapter E [F];

(3) the amount of money allocated to the district from the available school fund;

(4) the amount of each district's tier one local share under Section 48.256 [~~42.252~~]; and

(5) the amount of each district's tier two local share under Section 48.202 for:

(A) the district's maintenance and operations tax effort described by Section 48.202(a-1)(1); and

(B) the district's maintenance and operations tax effort described by Section 48.202(a-1)(2) [~~42.302~~].

(b) Except as provided by this subsection, the commissioner shall base the determinations under Subsection (a) on the estimates provided to the legislature under Section 48.269 [~~42.254~~], 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 [~~42.254~~] 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 taxable value of property.

(c) Each school district is entitled to an amount equal to the difference for that district between the sum of Subsections (a)(1) and (a)(2) and the sum of Subsections (a)(3), (a)(4), and (a)(5).

(d) The commissioner shall approve warrants to each school district equaling the amount of its entitlement except as provided by this section. Warrants for all money expended according to this chapter shall be approved and transmitted to treasurers or depositories of school districts in the same manner that warrants for state payments are transmitted. The total amount of the warrants issued under this section may not exceed the total amount appropriated for Foundation School Program purposes for that fiscal year.

(e) [~~(g)~~] If a school district demonstrates to the satisfaction of the commissioner that the estimate of the district's tax rate, student enrollment, or taxable value of property used in determining the amount of state funds to which the district is entitled are so inaccurate as to result in undue financial hardship to the district, the commissioner may adjust funding to that district in that school year to the extent that funds are available for that year.

(f) [~~(h)~~] If the amount appropriated for the Foundation School Program for the second year of a state fiscal biennium is less than the amount to which school districts and open-enrollment charter schools are entitled for that year, the commissioner shall certify the amount of the difference to the Legislative Budget Board not later than January 1 of the second year of the state fiscal biennium. The Legislative Budget Board shall propose to the legislature that the certified amount be transferred to the foundation school fund from the economic stabilization fund and appropriated for the purpose of increases in allocations under this subsection. If the legislature fails during the regular session to enact the proposed transfer and appropriation and there are not funds available under Subsection (h) [~~(j)~~], the commissioner shall adjust the total amounts due to each school district and open-enrollment charter school under this chapter and the total amounts necessary for each school district to comply with the requirements of Chapter 49 [41] by an amount determined by applying to each district and school the same percentage adjustment to the total amount of state and local revenue due to the district or school under this chapter and Chapter 49 [41] so that the total amount of the adjustment to all districts and schools results in an amount equal to the total adjustment necessary. The following fiscal year:

(1) a district's or school's entitlement under this section is increased by an amount equal to the adjustment made under this subsection; and

(2) the amount necessary for a district to comply with the requirements of Chapter 49 [41] is reduced by an amount necessary to ensure a district's full recovery of the adjustment made under this subsection.

(g) [~~(i)~~] Not later than March 1 each year, the commissioner shall determine the actual amount of state funds to which each school district is entitled under the allocation formulas in this chapter for the current school year and shall compare that amount with the amount of the warrants issued to each district for that year. If the amount of the warrants differs from the amount to which a district is entitled because of variations in the district's tax rate, student enrollment, or taxable value of property, the commissioner shall adjust the district's entitlement for the next fiscal year accordingly.

(h) [~~(j)~~] The legislature may appropriate funds necessary for increases under Subsection (g) [~~(i)~~] from funds that the comptroller, at any time during the fiscal year, finds are available.

(i) [~~(k)~~] The commissioner shall compute for each school district the total amount by which the district's allocation of state funds is increased or reduced under Subsection (g) [~~(i)~~] and shall certify that amount to the district.

Sec. 48.267 [~~42.2531~~]. ADJUSTMENT BY COMMISSIONER. (a) The commissioner may make adjustments to amounts due to a school district under this chapter or Chapter 46, or to amounts necessary for a district to comply with the requirements of Chapter 49 [41], as provided by this section.

(b) A school district that has a major taxpayer, as determined by the commissioner, that because of a protest of the valuation of the taxpayer's property fails to pay all or a portion of the ad valorem taxes due to the district may apply to the commissioner to have the district's taxable value of property or ad valorem tax collections adjusted for purposes of this chapter or Chapter [41 or] 46 or 49. The commissioner may make the adjustment only to the extent the commissioner determines that making the adjustment will not:

(1) in the fiscal year in which the adjustment is made, cause the amount to which school districts are entitled under this chapter to exceed the amount appropriated for purposes of the Foundation School Program for that year; and

(2) if the adjustment is made in the first year of a state fiscal biennium, cause the amount to which school districts are entitled under this chapter for the second year of the biennium to exceed the amount appropriated for purposes of the Foundation School Program for that year.

(c) The commissioner shall recover the benefit of any adjustment made under this section by making offsetting adjustments in the school district's taxable value of property or ad valorem tax collections for purposes of this chapter or Chapter [41 or] 46 or 49 on a final determination of the taxable value of property that was the basis of the original adjustment, or in the second school year following the year in which the adjustment is made, whichever is earlier.

(d) This section does not require the commissioner to make any requested adjustment. A determination by the commissioner under this section is final and may not be appealed.

Sec. 48.268 [~~42.2532~~]. ADJUSTMENT FOR RESOLUTION OF DISPUTE OR ERROR RESULTING IN TAXATION OF SAME PROPERTY BY MULTIPLE SCHOOL DISTRICTS. The commissioner shall adjust the amounts due to a school district under this chapter and Chapter 46 as necessary to account for the resolution of a dispute or error involving the district and another district by an agreement between the districts entered into under Section 31.112(c), Tax Code, or by a final order of the supreme court entered under Section 72.010, Local Government Code.

Sec. 48.269 [~~42.254~~]. ESTIMATES REQUIRED. (a) Not later than October 1 of each even-numbered year:

(1) the agency shall submit to the legislature an estimate of the tax rate and student enrollment of each school district for the following biennium; and

(2) the comptroller shall submit to the legislature an estimate of the total taxable value of all property in the state as determined under Subchapter M, Chapter 403, Government Code, for the following biennium.

(b) The agency and the comptroller shall update the information provided to the legislature under Subsection (a) not later than March 1 of each odd-numbered year.

Sec. 48.270 [~~42.255~~]. FALSIFICATION OF RECORDS; REPORT. When, in the opinion of the agency's director of school audits, audits or reviews of accounting, enrollment, or other records of a school district reveal deliberate falsification of the records, or violation of the provisions of this chapter, through which the district's share of state funds allocated under the authority of this chapter would be, or has been, illegally increased, the director shall promptly and fully report the fact to the State Board of Education, the state auditor, and the appropriate county attorney, district attorney, or criminal district attorney.

Sec. 48.271 [~~42.257~~]. EFFECT OF APPRAISAL APPEAL. (a) If the final determination of an appeal under Chapter 42, Tax Code, results in a reduction in the taxable value of property that exceeds five percent of the total taxable value of property in the school district for the same tax year determined under Subchapter M, Chapter 403, Government Code, the commissioner shall request the comptroller to adjust its taxable property value findings for that year consistent with the final determination of the appraisal appeal.

(b) If the district would have received a greater amount from the foundation school fund for the applicable school year using the adjusted value, the commissioner shall add the difference to subsequent distributions to the district from the foundation school fund. An adjustment does not affect the local fund assignment of any other district.

(c) In addition to the funding provided under Subsection (b), a school district is entitled to reimbursement for the amount of interest included in a refund made by the district under Section 42.43, Tax Code, in the state fiscal year ending August 31, 2018, or August 31, 2019. This subsection expires September 1, 2021.

Sec. 48.272 [~~42.258~~]. RECOVERY OF OVERALLOCATED FUNDS. (a) If a school district has received an overallocation of state funds, the agency shall, by withholding from subsequent allocations of state funds for the current or subsequent school year or by requesting and obtaining a refund, recover from the district an amount equal to the overallocation.

(b) [~~(a-1)~~] Notwithstanding Subsection (a), the agency may recover an overallocation of state funds over a period not to exceed the subsequent five school years if the commissioner determines that the overallocation was the result of exceptional circumstances reasonably caused by statutory changes to Chapter [41 or] 46 or 49 or this chapter and related reporting requirements.

(c) [~~(b)~~] If a district fails to comply with a request for a refund under Subsection (a), the agency shall certify to the comptroller that the amount constitutes a debt for purposes of Section 403.055, Government Code. The agency shall provide to the comptroller the amount of the overallocation and any other information required by the comptroller. The comptroller may certify the amount of the debt to the attorney general for collection.

(d) [~~(c)~~] Any amounts recovered under this section shall be deposited in the foundation school fund.

(e) Subject to Subsection (f), the agency may review a school district as necessary to determine if the district qualifies for each allotment received by the district under this chapter. If the agency determines that a school district received an allotment to which the district was not entitled, the agency may establish a corrective action plan or withhold the applicable amount of funding from the district.

(f) The agency may not review school district expenditures that occurred seven or more years before the review.

Sec. 48.273 [~~42.259~~]. FOUNDATION SCHOOL FUND TRANSFERS. (a) In this section:

(1) "Category 1 school district" means a school district having a wealth per student of less than one-half of the statewide average wealth per student.

(2) "Category 2 school district" means a school district having a wealth per student of at least one-half of the statewide average wealth per student but not more than the statewide average wealth per student.

(3) "Category 3 school district" means a school district having a wealth per student of more than the statewide average wealth per student.

(4) "Wealth per student" means the taxable property values reported by the comptroller to the commissioner under Section 48.256 [~~42.252~~] divided by the number of students in average daily attendance.

(b) Payments from the foundation school fund to each category 1 school district shall be made as follows:

(1) 15 percent of the yearly entitlement of the district shall be paid in an installment to be made on or before the 25th day of September of a fiscal year;

(2) 80 percent of the yearly entitlement of the district shall be paid in eight equal installments to be made on or before the 25th day of October, November, December, January, March, May, June, and July; and

(3) five percent of the yearly entitlement of the district shall be paid in an installment to be made on or before the 25th day of February.

(1) 22 percent of the yearly entitlement of the district shall be paid in an installment to be made on or before the 25th day of September of a fiscal year;

(2) 18 percent of the yearly entitlement of the district shall be paid in an installment to be made on or before the 25th day of October;

(3) 9.5 percent of the yearly entitlement of the district shall be paid in an installment to be made on or before the 25th day of November;

(4) 7.5 percent of the yearly entitlement of the district shall be paid in an installment to be made on or before the 25th day of April;

(5) five percent of the yearly entitlement of the district shall be paid in an installment to be made on or before the 25th day of May;

(6) 10 percent of the yearly entitlement of the district shall be paid in an installment to be made on or before the 25th day of June;

(7) 13 percent of the yearly entitlement of the district shall be paid in an installment to be made on or before the 25th day of July; and

(8) 15 percent of the yearly entitlement of the district shall be paid in an installment to be made on or before the 25th day of August.

(d) Payments from the foundation school fund to each category 3 school district shall be made as follows:

(1) 45 percent of the yearly entitlement of the district shall be paid in an installment to be made on or before the 25th day of September of a fiscal year;

(2) 35 percent of the yearly entitlement of the district shall be paid in an installment to be made on or before the 25th day of October; and

(3) 20 percent of the yearly entitlement of the district shall be paid in an installment to be made on or before the 25th day of August.

(e) The amount of any installment required by this section may be modified to provide a school district with the proper amount to which the district may be entitled by law and to correct errors in the allocation or distribution of funds. If an installment under this section is required to be equal to other installments, the amount of other installments may be adjusted to provide for that equality. A payment under this section is not invalid because it is not equal to other installments.

(f) Previously unpaid additional funds from prior fiscal years owed to a district shall be paid to the district together with the September payment of the current fiscal year entitlement.

(g) The commissioner shall make all annual Foundation School Program payments under this section for purposes described by Sections 45.252(a)(1) and (2) before the deadline established under Section 45.263(b) for payment of debt service on bonds. Notwithstanding any other provision of this section, the commissioner may make Foundation School Program payments under this section after the deadline established under Section 45.263(b) only if the commissioner has not received notice under Section 45.258 concerning a district's failure or inability to pay matured principal or interest on bonds.

Sec. 48.274 [~~42.2591~~]. FOUNDATION SCHOOL FUND TRANSFERS TO CERTAIN CHARTER SCHOOLS. (a) On the request of an open-enrollment charter school, the commissioner shall compare the student enrollment of the open-enrollment charter school for the current school year to the student enrollment of the school during the preceding school year. If the number of students enrolled at the open-enrollment charter school for the current school year has increased by 10 percent or more from the number of students enrolled during the preceding school year, the open-enrollment charter school may request that payments from the foundation school fund to the school for the following school year and each subsequent school year, subject to Subsection (b), be made according to the schedule provided under Subsection (c).

(b) An open-enrollment charter school that qualifies to receive funding as provided by this section is entitled to receive funding in that manner for three school years. On the expiration of that period, the commissioner shall determine the eligibility of the open-enrollment charter school to continue receiving payments from the foundation school fund under this section for an additional three school years. Subsequently, the open-enrollment charter school must reestablish eligibility in the manner provided by this subsection every three school years.

(c) Payments from the foundation school fund to an open-enrollment charter school under this section shall be made as follows:

(1) 22 percent of the yearly entitlement of the school shall be paid in an installment to be made on or before the 25th day of September of a fiscal year;

(2) 18 percent of the yearly entitlement of the school shall be paid in an installment to be made on or before the 25th day of October;

(3) 9.5 percent of the yearly entitlement of the school shall be paid in an installment to be made on or before the 25th day of November;

(4) four percent of the yearly entitlement of the school shall be paid in an installment to be made on or before the 25th day of December;

(5) four percent of the yearly entitlement of the school shall be paid in an installment to be made on or before the 25th day of January;

(6) four percent of the yearly entitlement of the school shall be paid in an installment to be made on or before the 25th day of February;

(7) four percent of the yearly entitlement of the school shall be paid in an installment to be made on or before the 25th day of March;

(8) 7.5 percent of the yearly entitlement of the school shall be paid in an installment to be made on or before the 25th day of April;

(9) five percent of the yearly entitlement of the school shall be paid in an installment to be made on or before the 25th day of May;

(10) seven percent of the yearly entitlement of the school shall be paid in an installment to be made on or before the 25th day of June;

(11) seven percent of the yearly entitlement of the school shall be paid in an installment to be made on or before the 25th day of July; and

(12) eight percent of the yearly entitlement of the school shall be paid in an installment to be made on or before the 25th day of August.

(d) The amount of any installment required by this section may be modified to provide an open-enrollment charter school with the proper amount to which the school may be entitled by law and to correct errors in the allocation or distribution of funds.

(e) Previously unpaid additional funds from prior fiscal years owed to an open-enrollment charter school shall be paid to the school together with the September payment of the current fiscal year entitlement.

Sec. 48.275 [~~42.260~~]. USE OF CERTAIN FUNDS. (a) In this section, "participating charter school" means an open-enrollment charter school that participates in the uniform group coverage program established under Chapter 1579, Insurance Code.

(b) The amount of additional funds to which each school district or participating charter school is entitled due to the increases in formula funding made by HB 3343, Acts of the 77th Legislature, Regular Session, 2001, and any subsequent legislation amending the provisions amended by that Act that increase formula funding under Chapter 49 [41] and this chapter to school districts and charter schools is available for purposes of Subsection (c).

(c) Notwithstanding any other provision of this code, a school district or participating charter school may use the sum of the following amounts of funds only to pay contributions under a group health coverage plan for district or school employees:

(1) the amount determined by multiplying the amount of $900 or the amount specified in the General Appropriations Act for that year for purposes of the state contribution under Section 1579.251, Insurance Code, by the number of district or school employees who participate in a group health coverage plan provided by or through the district or school; and

(2) the difference between the amount necessary for the district or school to comply with Section 1581.052, Insurance Code, for the school year and the amount the district or school is required to use to provide health coverage under Section 1581.051, Insurance Code, for that year.

(d) A determination by the commissioner under this section is final and may not be appealed.

[~~(e)~~ ~~The commissioner may adopt rules to implement this section.~~]

SECTION 1.043. Subchapter F, Chapter 48, Education Code, as added by this Act, is amended by adding Sections 48.277, 48.278, and 48.279 to read as follows:

Sec. 48.277. FORMULA TRANSITION GRANT. (a) A school district or open-enrollment charter school is entitled to receive an annual allotment for each student in average daily attendance in the amount equal to the difference, if the difference is greater than zero, that results from subtracting the total maintenance and operations revenue per student in average daily attendance for the current school year from the lesser of:

(1) 103 percent of the district's or school's total maintenance and operations revenue per student in average daily attendance for the 2019-2020 school year that the district or school would have received under former Chapters 41 and 42, as those chapters existed on January 1, 2019; or

(2) 128 percent of the statewide average amount of maintenance and operations revenue per student in average daily attendance that would have been provided for the 2019-2020 school year under former Chapters 41 and 42, as those chapters existed on January 1, 2019.

(b) For purposes of calculating maintenance and operations revenue under Subsection (a), the commissioner shall:

(1) for purposes of Subsections (a)(1) and (2), use the following applicable school year:

(A) in a school year ending in an even-numbered year, the 2019-2020 school year; and

(B) in a school year ending in an odd-numbered year, the 2019-2020 or 2020-2021 school year, whichever is greater;

(2) include all state and local funding, except for any funding resulting from:

(A) reimbursement for disaster remediation costs under former Sections 41.0931 and 42.2524;

(B) an adjustment for rapid decline in taxable value of property under former Section 42.2521; and

(3) adjust the calculation to reflect a reduction in tax effort by a school district; and

(4) if a school district or open-enrollment charter school receives a waiver relating to eligibility requirements for the national free or reduced-price lunch program under 42 U.S.C. Section 1751 et seq., use the numbers of educationally disadvantaged students on which the district's or school's entitlement to compensatory education funds was based for the school year before the school year in which the district or school received the waiver, adjusted for estimated enrollment growth.

(d) A school district or open-enrollment charter school is not entitled to an allotment under Subsection (a) beginning with the 2024-2025 school year.

(d-1) Subject to Subsection (d-2), a school district or open-enrollment charter school is entitled to receive an annual allotment for each student in average daily attendance in the amount equal to the difference, if the difference is greater than zero, that results from subtracting the total maintenance and operations revenue per student in average daily attendance for the current school year from the total maintenance and operations revenue per student in average daily attendance that would have been available to the district or school under former Chapters 4 and 42, as those chapters existed on January 1, 2019. For purposes of calculating a district's maintenance and operations revenue under this subsection, the commissioner shall:

(1) apply Subsection (b); and

(2) in calculating a district's maintenance and operations revenue under former Chapters 41 and 42, as those chapters existed on January 1, 2019, exclude any additional revenue the district would have received under former Sections 41.002(e) through (g), as those sections existed on January 1, 2019.

(d-2) A school district or open-enrollment charter school may only receive an allotment under Subsection (a) or (d-1), whichever is greater, but not both.

(d-3) Subsections (d-1) and (d-2) and this subsection expire September 1, 2021.

(e) This section expires September 1, 2025.

Sec. 48.278. EQUALIZED WEALTH TRANSITION GRANT. (a) Subject to Subsection (b), a school district is entitled to receive an annual allotment in an amount equal to the amount of additional revenue a school district received for the 2018-2019 school year under former Sections 41.002(e) through (g), as those sections existed on January 1, 2019.

(b) For purposes of calculating a district's allotment under Subsection (a), the commissioner shall reduce the amount to which a district is entitled under Subsection (a) by:

(1) for the 2020-2021 school year, 20 percent;

(2) for the 2021-2022 school year, 40 percent;

(3) for the 2022-2023 school year, 60 percent; and

(4) for the 2023-2024 school year, 80 percent.

Sec. 48.279. MAINTENANCE OF STATE FINANCIAL SUPPORT FOR SPECIAL EDUCATION. (a) Funds appropriated for purposes of this section or transferred in accordance with this section are state funds for purposes of compliance with the requirements regarding maintenance of state financial support for special education under 20 U.S.C. Section 1412(a)(18). The commissioner shall identify the amount of funding described by this subsection and separate that amount from other funding provided under this chapter.

(b) If the commissioner determines that the total amount of funding for special education for a school year that ends during the first state fiscal year of a state fiscal biennium is less than the amount required to comply with requirements regarding maintenance of state financial support under 20 U.S.C. Section 1412(a)(18), the commissioner shall use funds appropriated for the Foundation School Program for the second state fiscal year of that biennium to increase funding for special education for the first state fiscal year of that biennium in an amount necessary to ensure compliance with that provision.

(c) If the commissioner determines that the total amount of funding for special education for a school year that ends during the second state fiscal year of a state fiscal biennium is less than the amount required to comply with requirements regarding maintenance of state financial support under 20 U.S.C. Section 1412(a)(18), the commissioner shall submit to the legislature an estimate of the amount of funding needed to comply with that provision for that state fiscal year.

(d) If federal funds are withheld for a school year due to noncompliance with requirements regarding maintenance of state financial support under 20 U.S.C. Section 1412(a)(18), the commissioner shall use for that school year an amount of funds described by Subsection (a) equal to the amount of withheld funds in the same manner and for the same purposes as the withheld funds would have been provided.

(e) After the commissioner has replaced any withheld federal funds as provided by Subsection (d), the commissioner shall distribute the remaining amount, if any, of funds described by Subsection (a) to proportionately increase funding for the special education allotment under Section 48.102.

(f) In complying with Subsection (d), the commissioner may implement any program necessary to ensure the use of funds in accordance with that subsection.

SECTION 1.044. Chapter 48, Education Code, as added by this Act, is amended by adding Subchapter G, and a heading is added to that subchapter to read as follows:

SUBCHAPTER G. MISCELLANEOUS PROVISIONS

SECTION 1.045. Section 42.4101, Education Code, is transferred to Subchapter G, Chapter 48, Education Code, as added by this Act, redesignated as Section 48.301, Education Code, and amended to read as follows:

Sec. 48.301 [~~42.4101~~]. ADDITIONAL ASSISTANCE FOR DISTRICTS WITH STUDENTS USING PUBLIC EDUCATION GRANTS. (a) A district is entitled to additional assistance under this section as provided by Section 29.203(c).

(b) The amount of additional assistance under this section is computed by subtracting the number of students residing in the district and using public education grants to attend school in another district for the year in which the assistance is granted from the number of students using public education grants to attend school in the district for that year and multiplying the difference by $266.

[~~(c)~~ If a district to which this section applies is entitled to the maximum amount of assistance under Section 42.406, the maximum is increased by the amount of additional assistance to which the district is entitled under this section.]

SECTION 1.046. Subchapter G, Chapter 48, Education Code, as added by this Act, is amended by adding Section 48.302 to read as follows:

Sec. 48.302. SUBSIDY FOR HIGH SCHOOL EQUIVALENCY EXAMINATION FOR CERTAIN INDIVIDUALS. (a) In this section, "commission" means the Texas Workforce Commission.

(c) The commission shall adopt rules to implement the subsidy program described by Subsection (b), including rules regarding eligibility requirements.

SECTION 1.047. Subtitle I, Title 2, Education Code, is amended by adding Chapter 49, and a heading is added to that chapter to read as follows:

CHAPTER 49. OPTIONS FOR LOCAL REVENUE LEVELS IN EXCESS OF ENTITLEMENT

SECTION 1.048. Chapter 49, Education Code, as added by this Act, is amended by adding Subchapter A, and a heading is added to that subchapter to read as follows:

SUBCHAPTER A. GENERAL PROVISIONS

SECTION 1.049. Sections 41.001, 41.003, 41.0031, 41.004, 41.005, 41.006, 41.007, 41.008, 41.009, 41.010, 41.011, 41.012, and 41.013, Education Code, are transferred to Subchapter A, Chapter 49, Education Code, as added by this Act, redesignated as Sections 49.001, 49.002, 49.003, 49.004, 49.005, 49.006, 49.007, 49.008, 49.009, 49.010, 49.011, 49.012, and 49.013, Education Code, and amended to read as follows:

Sec. 49.001 [~~41.001~~]. DEFINITIONS. In this chapter:

(1) "Local revenue [~~Equalized wealth~~] level in excess of entitlement" means local revenue levels that exceed the levels [~~the wealth per student~~] provided by Section 48.257 [~~41.002~~].

(2) [~~"Wealth per student" means the taxable value of property, as determined under Subchapter M, Chapter 403, Government Code, divided by the number of students in weighted average daily attendance.~~

[~~(3)~~] "Weighted average daily attendance" has the meaning assigned by Section 48.202 [~~42.302~~].

Sec. 49.002 [~~41.003~~]. OPTIONS TO REDUCE LOCAL REVENUE [~~ACHIEVE EQUALIZED WEALTH~~] LEVEL. A district with a local revenue level in excess of entitlement [~~wealth per student that exceeds the equalized wealth level~~] may take any combination of the following actions to reduce the district's revenue level [~~achieve the equalized wealth level~~]:

(1) consolidation with another district as provided by Subchapter B;

(2) detachment of territory as provided by Subchapter C;

(3) purchase of average daily attendance credit as provided by Subchapter D;

(4) education of nonresident students as provided by Subchapter E; or

(5) tax base consolidation with another district as provided by Subchapter F.

Sec. 49.003 [~~41.0031~~]. INCLUSION OF ATTENDANCE CREDIT [~~CREDITS~~] AND NONRESIDENTS IN WEIGHTED AVERAGE DAILY ATTENDANCE. In determining whether a school district has a local revenue [~~wealth per student less than or equal to the equalized wealth~~] level in excess of entitlement, the commissioner shall use:

(1) the district's final weighted average daily attendance; and

(2) the amount [~~number~~] of attendance credit [~~credits~~] a district purchases under Subchapter D or the number of nonresident students a district educates under Subchapter E for a school year.

Sec. 49.004 [~~41.004~~]. ANNUAL REVIEW OF LOCAL REVENUES [~~PROPERTY WEALTH~~]. (a) Not later than July 15 of each year, using the estimates [~~estimate~~] of enrollment and taxable property value under Section 48.269 [~~42.254~~], the commissioner shall review the local revenue level [~~wealth per student~~] of school districts in the state and shall notify:

(1) each district with a local revenue level in excess of entitlement [~~wealth per student exceeding the equalized wealth level~~];

(2) each district to which the commissioner proposes to annex property detached from a district notified under Subdivision (1), if necessary, under Subchapter G; and

(3) each district to which the commissioner proposes to consolidate a district notified under Subdivision (1), if necessary, under Subchapter H.

(b) If, before the dates provided by this subsection, a district notified under Subsection (a)(1) has not successfully exercised one or more options under Section 49.002 [~~41.003~~] that reduce the district's local revenue level [~~wealth per student~~] to a level equal to or less than the [~~equalized wealth~~] level established under Section 48.257, the commissioner shall order the detachment of property from that district as provided by Subchapter G. If that detachment will not reduce the district's local revenue level [~~wealth per student~~] to a level equal to or less than the [~~equalized wealth~~] level established under Section 48.257, the commissioner may not detach property under Subchapter G but shall order the consolidation of the district with one or more other districts as provided by Subchapter H. An agreement under Section 49.002(1) [~~41.003(1)~~] or (2) must be executed not later than September 1 immediately following the notice under Subsection (a). An election for an option under Section 49.002(3) [~~41.003(3)~~], (4), or (5) must be ordered before September 1 immediately following the notice under Subsection (a).

(c) A district notified under Subsection (a) may not adopt a tax rate for the tax year in which the district receives the notice until the commissioner certifies that the district has reduced the district's local revenue level in excess of entitlement to the [~~achieved the equalized wealth~~] level established under Section 48.257.

(d) A detachment and annexation or consolidation under this chapter:

(1) is effective for Foundation School Program funding purposes for the school year that begins in the calendar year in which the detachment and annexation or consolidation is agreed to or ordered; and

(2) applies to the ad valorem taxation of property beginning with the tax year in which the agreement or order is effective.

Sec. 49.005 [~~41.005~~]. COMPTROLLER AND APPRAISAL DISTRICT COOPERATION. The chief appraiser of each appraisal district and the comptroller shall cooperate with the commissioner and school districts in implementing this chapter.

Sec. 49.006 [~~41.006~~]. RULES. (a) The commissioner may adopt rules necessary for the implementation of this chapter. The rules may provide for the commissioner to make necessary adjustments to the provisions of Chapter 48 [42], including providing for the commissioner to make an adjustment in the funding element established by Section 48.202 [~~42.302~~], at the earliest date practicable, to the amount the commissioner believes, taking into consideration options exercised by school districts under this chapter and estimates of student enrollments, will match appropriation levels.

(b) As necessary for the effective and efficient administration of this chapter, the commissioner may modify effective dates and time periods for actions described by this chapter.

Sec. 49.007 [~~41.007~~]. COMMISSIONER TO APPROVE SUBSEQUENT BOUNDARY CHANGES. A school district that is involved in an action under this chapter that results in boundary changes to the district or in the consolidation of tax bases is subject to consolidation, detachment, or annexation under Chapter 13 only if the commissioner certifies that the change under Chapter 13 will not result in a district with a local revenue [~~wealth per student that exceeds the equalized wealth~~] level in excess of entitlement.

Sec. 49.008 [~~41.008~~]. HOMESTEAD EXEMPTIONS. (a) The governing board of a school district that results from consolidation under this chapter, including a consolidated taxing district under Subchapter F, for the tax year in which the consolidation occurs may determine whether to adopt a homestead exemption provided by Section 11.13, Tax Code, and may set the amount of the exemption, if adopted, at any time before the school district adopts a tax rate for that tax year. This section applies only to an exemption that the governing board of a school district is authorized to adopt or change in amount under Section 11.13, Tax Code.

(b) This section prevails over any inconsistent provision of Section 11.13, Tax Code, or other law.

Sec. 49.009 [~~41.009~~]. TAX ABATEMENTS. (a) A tax abatement agreement executed by a school district that is involved in consolidation or in detachment and annexation of territory under this chapter is not affected and applies to the taxation of the property covered by the agreement as if executed by the district within which the property is included.

(b) The commissioner shall determine the local revenue [~~wealth per student~~] of a school district under this chapter as if any tax abatement agreement executed by a school district on or after May 31, 1993, had not been executed.

Sec. 49.010 [~~41.010~~]. TAX INCREMENT OBLIGATIONS. The payment of tax increments under Chapter 311, Tax Code, is not affected by the consolidation of territory or tax bases or by annexation under this chapter. In each tax year a school district paying a tax increment from taxes on property over which the district has assumed taxing power is entitled to retain the same percentage of the tax increment from that property that the district in which the property was located before the consolidation or annexation could have retained for the respective tax year.

Sec. 49.011 [~~41.011~~]. CONTINGENCY. (a) If any of the options described by Section 49.002 [~~41.003~~] as applied to a school district are held invalid by a final decision of a court of competent jurisdiction, a school district is entitled to exercise any of the remaining valid options in accordance with a schedule approved by the commissioner.

(b) If a final order of a court of competent jurisdiction should hold each of the options provided by Section 49.002 [~~41.003~~] invalid, the commissioner shall act under Subchapter G or H to reduce the local revenue [~~achieve the equalized wealth~~] level in excess of entitlement only after notice and hearing is afforded to each school district affected by the order. The commissioner shall adopt a plan that least disrupts the affected school districts. If because the exigency to adopt a plan prevents the commissioner from giving a reasonable time for notice and hearing, the commissioner shall timely give notice to and hold a hearing for the affected school districts, but in no event less than 30 days from time of notice to the date of hearing.

(c) If a final order of a court of competent jurisdiction should hold an option provided by Section 49.002 [~~41.003~~] invalid and order a refund to a district of any amounts paid by a district choosing that option, the amount shall be refunded but held in reserve and not expended by the district until released by order of the commissioner. The commissioner shall order the release immediately on the commissioner's determination that, through one of the means provided by law, the district has reduced the district's local revenue level in excess of entitlement to the [~~achieved the equalized wealth~~] level established under Section 48.257. The amount released shall be deducted from any state aid payable to the district according to a schedule adopted by the commissioner.

Sec. 49.012 [~~41.012~~]. DATE OF ELECTIONS. An election under this chapter for voter approval of an agreement entered by the board of trustees shall be held on a Tuesday or Saturday not more than 45 days after the date of the agreement. Section 41.001, Election Code, does not apply to the election.

Sec. 49.013 [~~41.013~~]. PROCEDURE. (a) Except as provided by Subchapter G, a decision of the commissioner under this chapter is appealable under Section 7.057.

(b) Any order of the commissioner issued under this chapter shall be given immediate effect and may not be stayed or enjoined pending any appeal.

(d) On the request of the commissioner, the secretary of state shall publish any rules adopted under this chapter in the Texas Register and the Texas Administrative Code.

SECTION 1.050. Subchapter B, Chapter 41, Education Code, is transferred to Chapter 49, Education Code, as added by this Act, redesignated as Subchapter B, Chapter 49, Education Code, and amended to read as follows:

SUBCHAPTER B. CONSOLIDATION BY AGREEMENT

Sec. 49.051 [~~41.031~~]. AGREEMENT. The governing boards of any two or more school districts may consolidate the districts by agreement in accordance with this subchapter to establish a consolidated district with a local revenue level [~~wealth per student~~] equal to or less than the [~~equalized wealth~~] level established under Section 48.257. The agreement is not effective unless the commissioner certifies that the consolidated district, as a result of actions taken under this chapter, will have a local revenue level [~~wealth per student~~] equal to or less than the [~~equalized wealth~~] level established under Section 48.257.

Sec. 49.052 [~~41.032~~]. GOVERNING LAW. Except to the extent modified by the terms of the agreement, the consolidated district is governed by the applicable provisions of Subchapter D, Chapter 13, other than a provision requiring consolidating districts to be contiguous. The agreement may not be inconsistent with the requirements of this subchapter.

Sec. 49.053 [~~41.033~~]. GOVERNANCE PLAN. (a) The agreement among the consolidating districts may include a governance plan designed to preserve community-based and site-based decision making within the consolidated district, including the delegation of specific powers of the governing board of the district other than the power to levy taxes, including a provision authorized by Section 13.158(b).

(b) The governance plan may provide for a transitional board of trustees during the first year after consolidation, but beginning with the next year the board of trustees must be elected from within the boundaries of the consolidated district. If the consolidating districts elect trustees from single-member districts, the consolidated district must adopt a plan to elect its board of trustees from single-member districts.

Sec. 49.054 [~~41.034~~]. INCENTIVE AID. (a) For the first and second school years after creation of a consolidated district under this subchapter, the commissioner shall adjust allotments to the consolidated district to the extent necessary to preserve the effects of an adjustment under Section 48.052 [~~42.102, 42.103, or 42.105~~] to which either of the consolidating districts would have been entitled but for the consolidation.

(b) Except as provided by Subsection (c), a district receiving incentive aid payments under this section is not entitled to incentive aid under Subchapter G, Chapter 13.

(c) Four or more districts that consolidate into one district under this subchapter within a period of one year may elect to receive incentive aid under this section or to receive incentive aid for not more than five years under Subchapter G, Chapter 13. Incentive aid under this subsection may not provide the consolidated district with more revenue in state and local funds than the district would receive at the [~~equalized wealth~~] level established under Section 48.257.

SECTION 1.051. Subchapter C, Chapter 41, Education Code, is transferred to Chapter 49, Education Code, as added by this Act, redesignated as Subchapter C, Chapter 49, Education Code, and amended to read as follows:

SUBCHAPTER C. DETACHMENT AND ANNEXATION BY AGREEMENT

Sec. 49.101 [~~41.061~~]. AGREEMENT. (a) By agreement of the governing boards of two school districts, territory may be detached from one of the districts and annexed to the other district if, after the action:

(1) the local revenue level [~~wealth per student~~] of the district from which territory is detached is equal to or less than the [~~equalized wealth~~] level established under Section 48.257; and

(2) the local revenue level [~~wealth per student~~] of the district to which territory is annexed is not greater than the dollar amount guaranteed level of [~~greatest level for which~~] funds [~~are~~] provided under Section 48.202(a-1)(2) [~~Subchapter F, Chapter 42~~].

(b) The agreement is not effective unless the commissioner certifies that, after all actions taken under this chapter, the local revenue level [~~wealth per student~~] of each district involved will be equal to or less than the applicable level permitted by Subsection (a).

Sec. 49.102 [~~41.062~~]. GOVERNING LAW. Except to the extent of any conflict with this chapter and except for any requirement that detached property must be annexed to a school district that is contiguous to the detached territory, the annexation and detachment is governed by Chapter 13.

Sec. 49.103 [~~41.063~~]. ALLOCATION OF APPRAISED VALUE OF DIVIDED UNIT. If portions of a parcel or other item of property are located in different school districts as a result of a detachment and annexation under this subchapter, the parcel or other item of property shall be appraised for taxation as a unit, and the agreement shall allocate the taxable value of the property between the districts.

Sec. 49.104 [~~41.064~~]. ALLOCATION OF INDEBTEDNESS. The annexation agreement may allocate to the receiving district any portion of the indebtedness of the district from which the territory is detached, and the receiving district assumes and is liable for the allocated indebtedness.

Sec. 49.105 [~~41.065~~]. NOTICE. As soon as practicable after the agreement is executed, the districts involved shall notify each affected property owner and the appraisal district in which the affected property is located.

SECTION 1.052. Chapter 49, Education Code, as added by this Act, is amended by adding Subchapter D, and a heading is added to that subchapter to read as follows:

SUBCHAPTER D. PURCHASE OF ATTENDANCE CREDIT

SECTION 1.053. Sections 41.091, 41.092, 41.093, 41.094, 41.095, 41.096, 41.097, and 41.099, Education Code, are transferred to Subchapter D, Chapter 49, Education Code, as added by this Act, redesignated as Sections 49.151, 49.152, 49.153, 49.154, 49.155, 49.156, 49.157, and 49.158, Education Code, and amended to read as follows:

Sec. 49.151 [~~41.091~~]. AGREEMENT. A school district with a local revenue [~~wealth per student that exceeds the equalized wealth~~] level in excess of entitlement may execute an agreement with the commissioner to purchase attendance credit [~~credits~~] in an amount sufficient, in combination with any other actions taken under this chapter, to reduce the district's local revenue level [~~wealth per student~~] to a level that is equal to or less than the [~~equalized wealth~~] level established under Section 48.257.

Sec. 49.152 [~~41.092~~]. CREDIT. The amount of [~~(a) For each~~] credit purchased decreases the dollar amount of a district's local revenue level[~~, the weighted average daily attendance of the purchasing school district is increased by one student in weighted average daily attendance~~] for purposes of determining whether the district exceeds the [~~equalized wealth~~] level established under Section 48.257.

[~~(b)~~ ~~A credit is not used in determining a school district's scholastic population, average daily attendance, or weighted average daily attendance for purposes of Chapter 42 or 43.~~]

Sec. 49.153 [~~41.093~~]. COST. (a) The total [~~Subject to Subsection (b-1), the~~] cost of [~~each~~] credit is the [an] amount [~~equal to the greater of:~~

[~~(1)~~ ~~the amount~~] of the district's maintenance and operations tax revenue that exceeds the level established under Section 48.257 [~~per student in weighted average daily attendance for the school year for which the contract is executed; or~~

[~~(2)~~ the amount of the statewide district average of maintenance and operations tax revenue per student in weighted average daily attendance for the school year preceding the school year for which the contract is executed].

(b) For purposes of this section, a school district's maintenance and operations tax revenue does not include any amounts paid into a tax increment fund under Chapter 311, Tax Code.

[~~(b-1)~~ If the guaranteed level of state and local funds per weighted student per cent of tax effort under Section 42.302(a-1)(1) for which state funds are appropriated for a school year is an amount at least equal to the amount of revenue per weighted student per cent of tax effort available to the Austin Independent School District, as determined by the commissioner in cooperation with the Legislative Budget Board, the commissioner, in computing the amounts described by Subsections (a)(1) and (2) and determining the cost of an attendance credit, shall exclude maintenance and operations tax revenue resulting from the tax rate described by Section 41.002(a)(2).]

(c) The cost of [an] attendance credit for a school district is computed using the final tax collections of the district.

Sec. 49.154 [~~41.094~~]. PAYMENT. (a) A school district shall pay for credit [~~credits~~] purchased:

(1) in equal monthly payments as determined by the commissioner beginning February 15 and ending August 15 of the school year for which the agreement is in effect; or

(2) in one payment for the total amount required to be paid by the district not later than August 15 of the school year for which the agreement is in effect.

(a-1) If a school district elects to pay for credit purchased in the manner provided by Subsection (a)(2), the district must notify the commissioner not later than February 15 of the school year for which the agreement is in effect.

(b) Receipts shall be deposited in the state treasury and may be used only for foundation school program purposes.

Sec. 49.155 [~~41.095~~]. DURATION. An agreement under this section is valid for one school year and, subject to Section 49.156 [~~41.096~~], may be renewed annually.

Sec. 49.156 [~~41.096~~]. VOTER APPROVAL. (a) After first executing an agreement under this section, the board of trustees shall order and conduct an election, in the manner provided by Sections 13.003(d)-(g), to obtain voter approval of the agreement.

(b) The ballot shall be printed to permit voting for or against the proposition: "Authorizing the board of trustees of ________ School District to purchase attendance credit [~~credits~~] from the state with local tax revenues."

(c) The proposition is approved if the proposition receives a favorable vote of a majority of the votes cast. If the proposition is approved, the agreement executed by the board is ratified, and the board has continuing authority to execute agreements under this subchapter on behalf of the district without further voter approval.

Sec. 49.157 [~~41.097~~]. CREDIT FOR APPRAISAL COSTS. [~~(a)~~] The total amount required under Section 49.153 [~~41.093~~] for a district to purchase attendance credit [~~credits~~] under this subchapter for any school year is reduced by an amount equal to the product of the district's total costs under Section 6.06, Tax Code, for the appraisal district or districts in which it participates multiplied by a percentage that is computed by dividing the total amount required under Section 49.153 [~~41.093~~] by the total amount of taxes imposed in the district for that year less any amounts paid into a tax increment fund under Chapter 311, Tax Code.

[~~(b)~~ ~~A school district is entitled to a reduction under Subsection (a) beginning with the 1996-1997 school year.~~ ~~For that school year, the reduction to which a district is entitled is the sum of the amounts computed under~~ Subsection (a) for the 1993-1994, 1994-1995, 1995-1996, and 1996-1997 school years. If that amount exceeds the total amount required under Section 41.093 for the 1996-1997 school year, the difference is carried forward and the total amount required under Section 41.093 is reduced each subsequent school year until the total amount of the credit has been applied to such reductions.]

Sec. 49.158 [~~41.099~~]. LIMITATION. (a) Sections 49.154 and 49.157 [~~41.002(e), 41.094, 41.097, and 41.098~~] apply only to a district that:

(1) executes an agreement to purchase [~~all~~] attendance credit [~~credits~~] necessary to reduce the district's local revenue [~~wealth per student to the equalized wealth~~] level to the level established under Section 48.257;

(2) executes an agreement to purchase attendance credit [~~credits~~] and an agreement under Subchapter E to contract for the education of nonresident students who transfer to and are educated in the district but who are not charged tuition; or

(3) executes an agreement under Subchapter E to contract for the education of nonresident students:

(A) to an extent that does not provide more than 10 percent of the reduction in local revenue [~~wealth per student~~] required for the district to achieve a local revenue level [~~wealth per student~~] that is equal to or less than the [~~equalized wealth~~] level established under Section 48.257; and

(B) under which all revenue paid by the district to other districts, in excess of the reduction in state aid that results from counting the weighted average daily attendance of the students served in the contracting district, is required to be used for funding a consortium of at least three districts in a county with a population of less than 40,000 that is formed to support a technology initiative.

(b) A district that executes an agreement under Subsection (a)(3) must pay full market value for any good or service the district obtains through the consortium.

SECTION 1.054. Chapter 49, Education Code, as added by this Act, is amended by adding Subchapter E, and a heading is added to that subchapter to read as follows:

SUBCHAPTER E. EDUCATION OF NONRESIDENT STUDENTS

SECTION 1.055. Sections 41.121, 41.122, and 41.123, Education Code, are transferred to Subchapter E, Chapter 49, Education Code, as added by this Act, redesignated as Sections 49.201, 49.202, and 49.203, Education Code, and amended to read as follows:

Sec. 49.201 [~~41.121~~]. AGREEMENT. [~~(a)~~] The board of trustees of a district with a local revenue [~~wealth per student that exceeds the equalized wealth~~] level in excess of entitlement may execute an agreement to educate the students of another district in a number that, when the weighted average daily attendance of the students served is added to the weighted average daily attendance of the contracting district, is sufficient, in combination with any other actions taken under this chapter, to reduce the district's local revenue level [~~wealth per student~~] to a level that is equal to or less than the [~~equalized wealth~~] level established under Section 48.257. The agreement is not effective unless the commissioner certifies that the transfer of weighted average daily attendance will not result in any of the contracting districts' local revenue level [~~wealth per student~~] being greater than the [~~equalized wealth~~] level established under Section 48.257 and that the agreement requires an expenditure per student in weighted average daily attendance that is at least equal to the amount per student in weighted average daily attendance required under Section 49.153 [~~41.093~~].

Sec. 49.202 [~~41.122~~]. VOTER APPROVAL. (a) After first executing an agreement under this subchapter other than an agreement under Section 49.205 [~~41.125~~], the board of trustees of the district that will be educating nonresident students shall order and conduct an election, in the manner provided by Sections 13.003(d)-(g), to obtain voter approval of the agreement.

(b) The ballot shall be printed to permit voting for or against the proposition: "Authorizing the board of trustees of ________ School District to educate students of other school districts with local tax revenues."

Sec. 49.203 [~~41.123~~]. WADA COUNT. For purposes of Chapter 48 [42], students served under an agreement under this subchapter are counted only in the weighted average daily attendance of the district providing the services, except that students served under an agreement authorized by Section 49.205 [~~41.125~~] are counted in a manner determined by the commissioner.

SECTION 1.056. Section 41.124, Education Code, as amended by Chapters 581 (SB 810) and 705 (HB 3526), Acts of the 85th Legislature, Regular Session, 2017, is transferred to Subchapter E, Chapter 49, Education Code, as added by this Act, redesignated as Section 49.204, Education Code, and reenacted and amended to read as follows:

Sec. 49.204 [~~41.124~~]. TRANSFERS. (a) The board of trustees of a school district with a local revenue [~~wealth per student that exceeds the equalized wealth~~] level in excess of entitlement may reduce the district's local revenue level [~~wealth per student~~] by serving nonresident students who transfer to the district and are educated by the district but who are not charged tuition. A district that exercises the option under this subsection is not required to execute an agreement with the school district in which a transferring student resides and must certify to the commissioner that the district has not charged or received tuition for the transferring students.

(b) [A school district with a wealth per student that exceeds the equalized wealth level that pays tuition to another school district for the education of students that reside in the district may apply the amount of tuition paid toward the cost of the option chosen by the district to reduce its wealth per student. The amount applied under this subsection may not exceed the amount determined under Section 41.093 ~~as the cost of an attendance credit for the district. The commissioner may require any reports necessary to document the tuition payments.~~

[~~(c)~~] A school district that receives tuition for a student from a school district with a local revenue [~~wealth per student that exceeds the equalized wealth~~] level in excess of entitlement may not claim attendance for that student for purposes of Chapters [42 ~~and~~] 46 and 48 and the instructional materials and technology allotment under Section 31.0211.

SECTION 1.057. Section 41.125, Education Code, is transferred to Subchapter E, Chapter 49, Education Code, as added by this Act, redesignated as Section 49.205, Education Code, and amended to read as follows:

Sec. 49.205 [~~41.125~~]. CAREER AND TECHNOLOGY EDUCATION PROGRAMS. (a) The board of trustees of a school district with a local revenue [~~wealth per student that exceeds the equalized wealth~~] level in excess of entitlement may reduce the district's local revenue level [~~wealth per student~~] by executing an agreement to provide students of one or more other districts with career and technology education through a program designated as an area program for career and technology education.

(b) The agreement is not effective unless the commissioner certifies that:

(1) implementation of the agreement will not result in any of the affected districts' local revenue level [~~wealth per student~~] being greater than the [~~equalized wealth~~] level established under Section 48.257; and

(2) the agreement requires the district with a local revenue [~~wealth per student that exceeds the equalized wealth~~] level in excess of entitlement to make expenditures benefiting students from other districts in an amount at least equal to the amount that would be required for the district to purchase [~~the number of~~] attendance credit [~~credits~~] under Subchapter D necessary, in combination with any other actions taken under this chapter other than an action under this section, to reduce the district's local revenue level [~~wealth per student~~] to a level that is equal to or less than the [~~equalized wealth~~] level established under Section 48.257.

SECTION 1.058. Subchapter F, Chapter 41, Education Code, is transferred to Chapter 49, Education Code, as added by this Act, redesignated as Subchapter F, Chapter 49, Education Code, and amended to read as follows:

SUBCHAPTER F. TAX BASE CONSOLIDATION

Sec. 49.251 [~~41.151~~]. AGREEMENT. The board of trustees of two or more school districts may execute an agreement to conduct an election on the creation of a consolidated taxing district for the maintenance and operation of the component school districts. The agreement is subject to approval by the commissioner. The agreement is not effective unless the commissioner certifies that the consolidated taxing district will have a local revenue level [~~wealth per student~~] equal to or less than the [~~equalized wealth~~] level established under Section 48.257 after all actions taken under this chapter.

Sec. 49.252 [~~41.152~~]. DATE OF ELECTION. Any agreement under this subchapter must provide for the ordering of an election to be held on the same date in each district.

Sec. 49.253 [~~41.153~~]. PROPOSITION. (a) The ballot shall be printed to permit voting for or against the proposition: "Creation of a consolidated taxing district composed of the territory of _________________________ school districts, and authorizing the levy, assessment, and collection of annual ad valorem taxes for the maintenance of the public free schools within that taxing district at a rate not to exceed $_________ on the $100 valuation of taxable property."

(b) The rate to be included in the proposition shall be provided by the agreement among the districts but may not exceed the maximum rate provided by law for independent school districts.

Sec. 49.254 [~~41.154~~]. APPROVAL. The proposition is approved only if the proposition receives a favorable vote of the majority of the votes cast within each participating school district.

Sec. 49.255 [~~41.155~~]. CONSOLIDATED TAXING DISTRICT. A consolidated taxing district is a school district established for the limited purpose of exercising the taxing power authorized by Section 3, Article VII, Texas Constitution, and distributing the revenue to its component school districts.

Sec. 49.256 [~~41.156~~]. GOVERNANCE. (a) The consolidated taxing district is governed by the boards of the component school districts acting jointly.

(b) Any action taken by the joint board must receive a favorable vote of a majority of each component district's board of trustees.

Sec. 49.257 [~~41.157~~]. MAINTENANCE TAX. (a) The joint board shall levy a maintenance tax for the benefit of the component school districts not later than September 1 of each year or as soon thereafter as practicable.

(b) Each component district shall bear a share of the costs of assessing and collecting taxes in proportion to the component district's share of weighted average daily attendance in the consolidated taxing district.

(d) Notwithstanding Section 45.003, the consolidated taxing district may levy, assess, and collect a maintenance tax for the benefit of the component districts at a rate that exceeds $1.50 per $100 valuation of taxable property to the extent necessary to pay contracted obligations on the lease purchase of permanent improvements to real property entered into on or before May 12, 1993. The proposition to impose taxes at the necessary rate must be submitted to the voters in the manner provided by Section 45.003.

Sec. 49.258 [~~41.158~~]. REVENUE DISTRIBUTION. The consolidated taxing district shall distribute maintenance tax revenue to the component districts on the basis of the number of students in weighted average daily attendance in the component districts.

Sec. 49.259 [~~41.159~~]. TAXES OF COMPONENT DISTRICTS. (a) The governing board of a component school district of a consolidated taxing district that has consolidated for maintenance and operation purposes only may issue bonds and levy, pledge, and collect ad valorem taxes within that component district sufficient to pay the principal of and interest on those bonds as provided by Chapter 45.

(b) A component district levying an ad valorem tax under this section or Section 49.260(b)(1) [~~41.160(b)(1)~~] is entitled to the guaranteed yield provided by Subchapter E [F], Chapter 48 [42], for that portion of its tax rate that, when added to the maintenance tax levied by the consolidated taxing unit, does not exceed the limitation provided by Section 48.203 [~~42.303~~].

Sec. 49.260 [~~41.160~~]. OPTIONAL TOTAL TAX BASE CONSOLIDATION. (a) An agreement executed under Section 49.251 [~~41.151~~] may provide for total tax base consolidation instead of consolidation for maintenance and operation purposes only.

(b) Under an agreement providing for total tax base consolidation:

(1) the component districts may not levy maintenance or bond taxes, except to the extent necessary to retire bonds and other obligations issued before the effective date of the consolidation;

(2) the joint board may issue bonds and levy, pledge, and collect ad valorem taxes sufficient to pay the principal of and interest on those bonds, and issue refunding bonds, as provided by Chapter 45 for independent school districts; and

(3) to the end of the ballot proposition required under Section 49.253(a) [~~41.153(a)~~] shall be added ", and further to create a consolidated tax base for the repayment of all bonded indebtedness issued by the joint board of the taxing district after the effective date of the consolidation and to authorize the joint board to levy, pledge, and collect ad valorem taxes at a rate sufficient to pay the principal of and interest on those bonds."

(1) the component districts may provide for the consolidated taxing district to assume all of the indebtedness of all component districts; and

(2) to the end of the ballot proposition required by Section 49.253(a) [~~41.153(a)~~] shall be added ", and further to create a consolidated tax base for the repayment of all bonded indebtedness issued by the joint board of the taxing district or previously issued by the component school districts and to authorize the joint board to levy, pledge, and collect ad valorem taxes at a rate sufficient to pay the principal of and interest on those bonds."

SECTION 1.059. Subchapter G, Chapter 41, Education Code, is transferred to Chapter 49, Education Code, as added by this Act, redesignated as Subchapter G, Chapter 49, Education Code, and amended to read as follows:

SUBCHAPTER G. DETACHMENT AND ANNEXATION BY COMMISSIONER

Sec. 49.301 [~~41.201~~]. DEFINITION. In this subchapter, "mineral property" means a real property mineral interest that has been severed from the surface estate by a mineral lease creating a determinable fee or by a conveyance that creates an interest taxable separately from the surface estate. A mineral property includes each royalty interest, working interest, or other undivided interest in the mineral property.

Sec. 49.302 [~~41.202~~]. DETERMINATION OF TAXABLE VALUE. (a) For purposes of this subchapter, the taxable value of an individual parcel or other item of property and the total taxable value of property in a school district resulting from the detachment of property from or annexation of property to that district is determined by applying the appraisal ratio for the appropriate category of property determined under Subchapter M, Chapter 403, Government Code, for the preceding tax year to the taxable value of the detached or annexed property determined under Title 1, Tax Code, for the preceding tax year.

(b) For purposes of this subchapter, the taxable value of all or a portion of a parcel or item of real property includes the taxable value of personal property having taxable situs at the same location as the real property.

Sec. 49.303 [~~41.203~~]. PROPERTY SUBJECT TO DETACHMENT AND ANNEXATION. (a) Only the following property may be detached and annexed under this subchapter:

(1) a mineral property;

(2) real property used in the operation of a public utility, including a pipeline, pipeline gathering system, or railroad or other rail system; and

(3) real property used primarily for industrial or other commercial purposes, other than property used primarily for agriculture or for residential purposes.

(b) If a final judgment of a court determines that a mineral interest may not be annexed and detached as provided by this subchapter without an attendant annexation and detachment of the surface estate or any other interest in the same land, the detachment and annexation of a mineral interest under this subchapter includes the surface estate and each other interest in the land covered by the mineral interest.

Sec. 49.304 [~~41.204~~]. TAXATION OF PERSONAL PROPERTY. Personal property having a taxable situs at the same location as real property detached and annexed under this subchapter is taxable by the school district to which the real property is annexed.

Sec. 49.305 [~~41.205~~]. DETACHMENT OF PROPERTY. (a) The commissioner shall detach property under this section from each school district from which the commissioner is required under Section 49.004 [~~41.004~~] to detach property under this subchapter.

(b) The commissioner shall detach from each school district covered by Subsection (a) one or more whole parcels or items of property in descending order of the taxable value of each parcel or item, beginning with the parcel or item having the greatest taxable value, until the school district's local revenue level [~~wealth per student~~] is equal to or less than the [~~equalized wealth~~] level established under Section 48.257, except as otherwise provided by Subsection (c).

(c) If the detachment of whole parcels or items of property [,] as provided by Subsection (a) would result in a district's local revenue level [~~wealth per student~~] that is less than the [~~equalized wealth~~] level established under Section 48.257 by more than the product of $10,000 multiplied by weighted average daily attendance, the commissioner may not detach the last parcel or item of property and shall detach the next one or more parcels or items of property in descending order of taxable value that would result in the school district having a local revenue level [~~wealth per student~~] that is equal to or less than the [~~equalized wealth~~] level established under Section 48.257 by not more than the product of $10,000 multiplied by weighted average daily attendance.

(d) Notwithstanding Subsections (a), (b), and (c), the commissioner may detach only a portion of a parcel or item of property if:

(1) it is not possible under this subchapter to reduce the district's local revenue level [~~wealth per student~~] to a level that is equal to or less than the [~~equalized wealth~~] level established under Section 48.257 [~~this subchapter~~] unless some or all of the parcel or item of property is detached and the detachment of the whole parcel or item would result in the district from which it is detached having a local revenue level [~~wealth per student~~] that is less than the [~~equalized wealth~~] level established under Section 48.257 by more than the product of $10,000 multiplied by weighted average daily attendance; or

(2) the commissioner determines that a partial detachment of that parcel or item of property is preferable to the detachment of one or more other parcels or items having a lower taxable value in order to minimize the number of parcels or items of property to be detached consistent with the purposes of this chapter.

Sec. 49.306 [~~41.206~~]. ANNEXATION OF PROPERTY. (a) The commissioner shall annex property detached under Section 49.305 [~~41.205~~] to school districts eligible for annexation in accordance with this section. A school district is eligible for annexation of property to it under this subchapter only if, before any detachments or annexations are made in a year, the district's taxable value of property does not exceed the value necessary to generate maintenance and operations tax revenue in the amount equal to the district's entitlement under Section 48.202(a-1)(2) [~~wealth per student is less than the greatest level for which funds are provided under Subchapter F, Chapter 42~~].

(b) Property may be annexed to a school district without regard to whether the property is contiguous to other property in that district.

(c) The commissioner shall annex property detached from school districts beginning with the property detached from the school district with the greatest local revenue level in excess of entitlement [~~wealth per student~~] before detachment, and continuing with the property detached from each other school district in descending order of the district's local revenue level in excess of entitlement [~~wealth per student~~] before detachment.

(d) The commissioner shall annex the parcels or items of property detached from a school district to other school districts that are eligible for annexation of property in descending order of the taxable value of each parcel or item according to the following priorities:

(1) first, to the eligible school districts assigned to the same county as the school district from which the property is detached whose total adopted tax rate for the preceding tax year does not exceed by more than $0.15 the total tax rate adopted for that year by the school district from which the property is detached;

(2) second, to the eligible school districts served by the same regional education service center as the district from which the property is detached whose total adopted tax rate for the preceding tax year does not exceed by more than $0.10 the total tax rate adopted for that year by the school district from which the property is detached; and

(3) third, to other eligible school districts whose total adopted tax rate for the preceding tax year does not exceed by more than $0.05 the total tax rate adopted for that year by the school district from which the property is detached.

(e) If the districts identified by Subsection (d) for a school district are insufficient to annex all the property detached from the school district, the commissioner shall increase, for purposes of this section, all the maximum difference in tax rates allowed under Subsection (d) in increments of $0.01 until the districts are identified that are sufficient to annex all the property detached from the district.

(f) If only one school district is eligible to annex property detached from a school district within a priority group established by Subsections (d) and (e), the commissioner shall annex property to that district until it reaches the taxable value of property necessary to generate maintenance and operations tax revenue in the amount equal to the district's entitlement under Section 48.202(a-1)(2) [~~a wealth per student equal as nearly as possible to the greatest level for which funds are provided under Subchapter F, Chapter 42~~], by annexing whole parcels or items of property. Any remaining detached property shall be annexed to eligible school districts in the next priority group as provided by this section.

(g) If more than one school district is eligible to annex property detached from a school district within a priority group established by Subsections (d) and (e), the commissioner shall first annex property to the district within the priority group to which could be annexed the most taxable value of property without increasing the district's taxable value of property to an amount that exceeds the amount necessary to generate maintenance and operations tax revenue in the amount equal to the district's entitlement under Section 48.202(a-1)(2) [~~its wealth per student above the greatest level for which funds are provided under Subchapter F, Chapter 42~~], until that district reaches a taxable value of property necessary to generate maintenance and operations tax revenue in the amount equal to the district's entitlement under Section 48.202(a-1)(2) [~~wealth per student equal as nearly as possible to the greatest level for which funds are provided under Subchapter F, Chapter 42~~], by annexing whole parcels or items of property. Then any additional detached property shall be annexed in the same manner to other eligible school districts in the same priority group in descending order of capacity to receive taxable value of annexed property without increasing the district's taxable value of property to an amount that exceeds the amount necessary to generate maintenance and operations tax revenue in the amount equal to the district's entitlement under Section 48.202(a-1)(2) [~~wealth per student above the greatest level for which funds are provided under Subchapter F, Chapter 42~~]. If every school district in a priority group reaches a taxable value of property necessary to generate maintenance and operations tax revenue in the amount equal to the district's entitlement under Section 48.202(a-1)(2) [~~wealth per student equal to the greatest level for which funds are provided under Subchapter F, Chapter 42~~], as nearly as possible, the remaining detached property shall be annexed to school districts in the next priority group in the manner provided by this section.

(h) For purposes of this section, a portion of a parcel or item of property detached in that subdivided form from a school district is treated as a whole parcel or item of property.

(i) The commissioner may order the annexation of a portion of a parcel or item of property, including a portion of property treated as a whole parcel or item under Subsection (h), if:

(1) the annexation of the whole parcel or item would result in the district eligible to receive it in the appropriate priority order provided by this section having a local revenue level [~~wealth per student~~] greater than the amount by which the product of $10,000 multiplied by weighted average daily attendance exceeds the taxable value of property necessary to generate maintenance and operations tax revenue in the amount equal to the district's entitlement under Section 48.202(a-1)(2) [~~more than the greatest level for which funds are provided under Subchapter F, Chapter 42~~]; or

(2) the commissioner determines that annexation of portions of the parcel or item would reduce disparities in district taxable values of property necessary to generate maintenance and operations tax revenue in the amount equal to a district's entitlement under Section 48.202(a-1)(2) [~~wealth per student~~] more efficiently than would be possible if the parcel or item were annexed as a whole.

(j) The commissioner may modify the priorities established by this section as the commissioner considers reasonable to minimize or reduce the number of school districts to which the property detached from a school district is annexed, to minimize or reduce the geographic dispersal of property in a school district, to minimize or reduce disparities in school district taxable values of property necessary to generate maintenance and operations tax revenue in the amount equal to a district's entitlement under Section 48.202(a-1)(2) [~~wealth per student~~] that would otherwise result, or to minimize or reduce any administrative burden or expense.

(k) For purposes of this section, a school district is assigned to a county if the school district is assigned to that county in the 1992-1993 Texas School Directory published by the Central Education Agency.

Sec. 49.307 [~~41.207~~]. LIMITATIONS ON DETACHMENT AND ANNEXATION. The commissioner may detach and annex property under this subchapter only if:

(1) the property is not exempt from ad valorem taxation under Section 11.20 or 11.21, Tax Code; and

(2) the property does not contain a building or structure owned by the United States, this state, or a political subdivision of this state that is exempt from ad valorem taxation under law.

Sec. 49.308 [~~41.208~~]. ORDERS AND NOTICE. (a) The commissioner shall order any detachments and annexations of property under this subchapter not later than November 8 of each year.

(b) As soon as practicable after issuing the order under Subsection (a), the commissioner shall notify each affected school district and the appraisal district in which the affected property is located of the determination.

Sec. 49.309 [~~41.209~~]. TREATMENT OF SUBDIVIDED PROPERTY. (a) If the commissioner orders the detachment or annexation of a portion of a parcel or item of property under this subchapter, the order shall specify the portion of the taxable value of the property to be detached or annexed and may, but need not, describe the specific area of the parcel or item to be detached or annexed.

(b) If an order for the detachment or annexation of a portion of a parcel or item of property does not describe the specific area of the parcel or item to be detached or annexed, the commissioner, as soon as practicable after issuing the order, shall determine the specific area to be detached or annexed and shall certify that determination to the appraisal district for the county in which the property is located.

(c) If portions of a parcel or item of property are located in two or more school districts as the result of a detachment or annexation, the parcel or item shall be appraised for taxation as a unit, and the commissioner shall determine the portion of the taxable value of the property that is located in each of those school districts based on the square footage of the property, or any other reasonable method adopted by the commissioner.

Sec. 49.310 [~~41.210~~]. DUTIES OF CHIEF APPRAISER. (a) The chief appraiser of each appraisal district shall cooperate with the commissioner in administering this subchapter. The commissioner may require the chief appraiser to submit any reports or provide any information available to the chief appraiser in the form and at the times required by the commissioner.

(b) As soon as practicable after the detachment and annexation of property, the chief appraiser of the appraisal district in which the property is located shall send a written notice of the detachment and annexation to the owner of any property taxable in a different school district as a result of the detachment and annexation. The notice must include the name of the school district by which the property is taxable after the detachment and annexation.

(c) The commissioner may reimburse an appraisal district for any costs incurred in administering this subchapter and may condition the reimbursement or the amount of the reimbursement on the timely submission of reports or information required by the commissioner or the satisfactory performance of any other action required or requested by the commissioner.

Sec. 49.311 [~~41.211~~]. STUDENT ATTENDANCE. A student who is a resident of real property detached from a school district may choose to attend school in that district or in the district to which the property is annexed. For purposes of determining average daily attendance under Section 48.005 [~~42.005~~], the student shall be counted in the district to which the property is annexed. If the student chooses to attend school in the district from which the property is detached, the state shall withhold any foundation school funds from the district to which the property is annexed and shall allocate to the district in which the student is attending school those funds and the amount of funds equal to the difference between the state funds the district is receiving for the student and the district's cost in educating the student.

Sec. 49.312 [~~41.212~~]. BOND TAXES. Property detached from a school district is released from the obligation for any tax to pay principal and interest on bonds authorized by the district before detachment. The property is subject to any tax to pay principal or interest on bonds authorized by the district to which the property is annexed whether authorized before or after annexation.

Sec. 49.313 [~~41.213~~]. DETERMINATION BY COMMISSIONER FINAL. A decision or determination of the commissioner under this subchapter is final and not appealable.

SECTION 1.060. Subchapter H, Chapter 41, Education Code, is transferred to Chapter 49, Education Code, as added by this Act, redesignated as Subchapter H, Chapter 49, Education Code, and amended to read as follows:

SUBCHAPTER H. CONSOLIDATION BY COMMISSIONER

Sec. 49.351 [~~41.251~~]. COMMISSIONER ORDER. If the commissioner is required under Section 49.004 [~~41.004~~] to order the consolidation of districts, the consolidation is governed by this subchapter. The commissioner's order shall be effective on a date determined by the commissioner, but not later than the earliest practicable date after November 8.

Sec. 49.352 [~~41.252~~]. SELECTION CRITERIA. (a) In selecting the districts to be consolidated with a district that has taxable values of property in an amount that exceeds the local revenue level established under Section 48.257 [~~a property wealth greater than the equalized wealth level~~], the commissioner shall select one or more districts [~~with a wealth per student~~] that, when consolidated, will result in a consolidated district with a local revenue level [~~wealth per student~~] equal to or less than the [~~equalized wealth~~] level established under Section 48.257. In achieving that result, the commissioner shall give priority to school districts in the following order:

(1) first, to the contiguous district that has the lowest local revenue level [~~wealth per student~~] and is located in the same county;

(2) second, to the district that has the lowest local revenue level [~~wealth per student~~] and is located in the same county;

(3) third, to a contiguous district with a local revenue level [~~property wealth~~] below the [~~equalized wealth~~] level established under Section 48.257 that has requested the commissioner that it be considered in a consolidation plan;

(4) fourth, to include as few districts as possible that have the lowest local revenue levels below the [~~fall below the equalized wealth~~] level established under Section 48.257 within the consolidation order that have not requested the commissioner to be included;

(5) fifth, to the district that has the lowest local revenue level [~~wealth per student~~] and is located in the same regional education service center area; and

(6) sixth, to a district that has a tax rate similar to that of the district that has a local revenue level [~~property wealth~~] greater than the [~~equalized wealth~~] level established under Section 48.257.

(b) The commissioner may not select a district that has been created as a result of consolidation by agreement under Subchapter B to be consolidated under this subchapter with a district that has a local revenue level [~~property wealth~~] greater than the [~~equalized wealth~~] level established under Section 48.257.

(c) In applying the selection criteria specified by Subsection (a), if more than two districts are to be consolidated, the commissioner shall select the third and each subsequent district to be consolidated by treating the district that has a local revenue level [~~property wealth~~] greater than the [~~equalized wealth~~] level established under Section 48.257 and the district or districts previously selected for consolidation as one district.

Sec. 49.353 [~~41.253~~]. GOVERNANCE. (a) Until the initial trustees elected as provided by Subsection (b) have qualified and taken office, a district consolidated under this subchapter is governed by a transitional board of trustees consisting of the board of trustees of the district having the greatest student membership on the last day of the school year preceding the consolidation plus one member of the board of trustees of each other consolidating district selected by that board.

(b) The transitional board of trustees shall divide the consolidated district into nine single-member trustee districts in accordance with the procedures provided by Section 11.052. The transitional board shall order an election for the initial board of trustees to be held on the first May uniform election date after the effective date of a consolidation order.

(d) Section 13.156 applies to districts consolidated under this subchapter.

Sec. 49.354 [~~41.254~~]. DISSOLUTION OF CONSOLIDATED DISTRICT. (a) If the legislature abolishes ad valorem taxes for public school maintenance and operations and adopts another method of funding public education, the board of trustees of a consolidated district created under this subchapter may dissolve the consolidated district, provided that the dissolution is approved by a majority of those voters residing within the district participating in an election called for the purpose of approving the dissolution of the consolidated school district.

(b) If a consolidated district is dissolved, each of the former districts is restored as a separate district and is classified as an independent district.

(c) Title to real property of the consolidated district is allocated to the restored district in which the property is located. Title to proportionate shares of the fund balances and personal property of the consolidated district, as determined by Subsection (e), are allocated to each restored district.

(d) Each of the restored districts assumes and is liable for:

(1) indebtedness of the consolidated district that relates to real property allocated to the district; and

(2) a proportionate share, as determined by Subsection (e), of indebtedness of the consolidated district that does not relate to real property.

(e) A restored district's proportionate share of fund balances, personal property, or indebtedness is equal to the proportion that the number of students in average daily attendance in the restored district bears to the number of students in average daily attendance in the consolidated district.

Sec. 49.355 [~~41.255~~]. FUND BALANCES. Fund balances of a school district consolidated under this subchapter may be used only for the benefit of the schools within the district that generated the funds.

Sec. 49.356 [~~41.256~~]. EMPLOYMENT CONTRACTS. A consolidated district created under this subchapter shall honor an employment contract entered into by a consolidating district.

Sec. 49.357 [~~41.257~~]. APPLICATION OF [~~SMALL AND~~] SPARSE ADJUSTMENT [~~ADJUSTMENTS~~] AND SMALL AND TRANSPORTATION ALLOTMENTS [~~ALLOTMENT~~]. The budget of the consolidated district must apply the benefit of the adjustment or allotment to the schools of the consolidating district to which Section 48.052 [~~42.103~~], 48.101 [~~42.105~~], or 48.151 [~~42.155~~] would have applied in the event that the consolidated district still qualifies as a small or sparse district.