TITLE 19. EDUCATION

PART 2. TEXAS EDUCATION AGENCY

CHAPTER 61. SCHOOL DISTRICTS

SUBCHAPTER AA. COMMISSIONER'S RULES ON SCHOOL FINANCE

The Texas Education Agency (TEA) proposes an amendment to §61.1010, concerning additional state aid for school districts that contract to partner to operate a district campus. The proposed amendment would update the list of exclusions to align the rule with statute and changes made by House Bill (HB) 2, 89th Texas Legislature, Regular Session, 2025, and reorder the list for clarity.

BACKGROUND INFORMATION AND JUSTIFICATION: Section 61.1010 provides an entitlement through the Foundation School Program for school districts that enter contracts to partner to operate a district campus under Texas Education Code (TEC), §11.174 and §11.174(b).

The proposed amendment would add the sparsity adjustment under TEC, §48.052, to the list of exclusions under subsection (e) because HB 2593, 84th Texas Legislature, Regular Session, 2015, stated that the adjustment only applies to school districts with very small student populations.

HB 2, 89th Texas Legislature, Regular Session, 2025, removed the New Tech Network from TEC, §48.106. The proposed amendment to §61.1010(e)(1) would remove the reference to the New Tech Network to align with the bill.

HB 2, 89th Texas Legislature, Regular Session, 2025, recodified and transferred the School Safety Allotment from TEC, §48.115 (Subchapter C), to TEC, §48.160 (Subchapter D). The proposed amendment would remove the School Safety Allotment from §61.1010(e)(5) because §61.1010(c)(1)(B) does not include TEC, §48.160, allotments.

HB 2, 89th Texas Legislature, Regular Session, 2025, repealed TEC, §48.114, which includes the Mentor Safety Allotment, effective September 1, 2026. The proposed amendment would remove the Mentor Safety Allotment from §61.1010(e)(4) to align the rule with the bill.

The proposed amendment would also reorder the list to match the numerical order of the authority that supports each exclusion.

FISCAL IMPACT: Amy Copeland, associate commissioner for school finance and chief school finance officer, has determined that for the first five-year period the proposal is in effect, there are no additional costs to state or local government, including school districts and open-enrollment charter schools, required to comply with the proposal.

LOCAL EMPLOYMENT IMPACT: The proposal has no effect on local economy; therefore, no local employment impact statement is required under Texas Government Code, §2001.022.

SMALL BUSINESS, MICROBUSINESS, AND RURAL COMMUNITY IMPACT: The proposal has no direct adverse economic impact for small businesses, microbusinesses, or rural communities; therefore, no regulatory flexibility analysis, specified in Texas Government Code, §2006.002, is required.

COST INCREASE TO REGULATED PERSONS: The proposal does not impose a cost on regulated persons, another state agency, a special district, or a local government and, therefore, is not subject to Texas Government Code, §2001.0045.

TAKINGS IMPACT ASSESSMENT: The proposal does not impose a burden on private real property and, therefore, does not constitute a taking under Texas Government Code, §2007.043.

It would not create or eliminate a government program; would not require the creation of new employee positions or elimination of existing employee positions; would not require an increase or decrease in future legislative appropriations to the agency; would not require an increase or decrease in fees paid to the agency; would not create a new regulation; would not expand or repeal an existing regulation; would not increase or decrease the number of individuals subject to its applicability; and would not positively or adversely affect the state's economy.

PUBLIC BENEFIT AND COST TO PERSONS: Ms. Copeland has determined that for each year of the first five years the proposal is in effect, the public benefit anticipated as a result of enforcing the proposal would be ensuring the rule aligns with statute. There is no anticipated economic cost to persons who are required to comply with the proposal.

DATA AND REPORTING IMPACT: The proposal would have no data and reporting impact.

PRINCIPAL AND CLASSROOM TEACHER PAPERWORK REQUIREMENTS: TEA has determined that the proposal would not require a written report or other paperwork to be completed by a principal or classroom teacher.

PUBLIC COMMENTS: TEA requests public comments on the proposal, including, per Texas Government Code, §2001.024(a)(8), information related to the cost, benefit, or effect of the proposed rule and any applicable data, research, or analysis, from any person required to comply with the proposed rule or any other interested person. The public comment period on the proposal begins August 21, 2026, and ends September 21, 2026. A request for a public hearing on the proposal submitted under the Administrative Procedure Act must be received by the commissioner of education not more than 14 calendar days after notice of the proposal has been published in the Texas Register on August 21, 2026. A form for submitting public comments is available on the TEA website at https://tea.texas.gov/About_TEA/Laws_and_Rules/Commissioner_Rules_(TAC)/Proposed_Commissioner_of_Education_Rules/.

STATUTORY AUTHORITY. The amendment is proposed under TEC, §29.934, as amended by HB 2, 89th Texas Legislature, Regular Session, 2025, which enables a local education agency to apply for a campus to become designated as a resource campus if the campus has received an overall performance rating of D, F, or an overall performance rating of "Not Rated" for three years over a 10-year period of time; TEC, §48.052, which provides additional funding to school districts with very low student populations; TEC, §48.102, as amended by Senate Bill (SB) 568 and HB 2, 89th Texas Legislature, Regular Session, 2025, which provides school systems with an annual allotment for special education; TEC, §48.106, as amended by HB 2 and HB 120, 89th Texas Legislature, Regular Session, 2025, which provides school systems with an annual allotment for career and technology education; TEC, §48.160, as transferred, redesignated, and amended by HB 2, HB 121, and SB 260, 89th Texas Legislature, Regular Session, 2025, which provides school systems with an annual allotment for school safety purposes; TEC, §48.252, which authorizes the commissioner of education to adopt rules necessary for the implementation of an entitlement for school districts that enter into a contract to operate a district campus under TEC, §11.174 or §11.157(b), or school districts that operate a resource campus under TEC, §29.934; and HB 2, 89th Texas Legislature, Regular Session, 2025, which repeals TEC, §48.114, effective September 1, 2026. TEC, §48.114, provides school systems with an annual allotment for a mentoring program for classroom teachers.

CROSS REFERENCE TO STATUTE. The amendment implements TEC, §29.934, as amended by HB 2, 89th Texas Legislature, Regular Session, 2025; §48.052; §48.102, as amended by SB 568 and HB 2, 89th Texas Legislature, Regular Session, 2025; §48.106, as amended by HB 2 and HB 120, 89th Texas Legislature, Regular Session, 2025; §48.160, as transferred, redesignated, and amended by HB 2, HB 121, and SB 260, 89th Texas Legislature, Regular Session, 2025; and §48.252; and HB 2, 89th Texas Legislature, Regular Session, 2025, which repeals TEC, §48.114, effective September 1, 2026.

§61.1010. Additional State Aid for School Districts that Contract to Partner to Operate a District Campus.

(a) General provisions. This section implements Texas Education Code (TEC), §48.252 (School District Entitlement for Certain Students), which provides for additional funding for a school district that has entered into a contract to partner to operate a district campus under TEC, §11.174; a school district that has entered into a contract with a partner to jointly operate a campus or campus program under TEC, §11.157(b); or a school district that operates a resource campus as provided by TEC, §29.934.

(b) Definitions. The following words and terms, when used in this section, shall have the following meanings.

(1) Contracted campus--A campus for which the board of trustees of a school district has contracted to partner to operate a campus under TEC, §11.174 or §11.157(b).

(2) Contracted campus program--A program on a campus operated by a charter school under TEC, Chapter 12, Subchapter D, for which the board of trustees of a school district has contracted to jointly operate the program under TEC, §11.157(b).

(3) Resource campus--A campus designated by the commissioner of education to operate as a campus under TEC, §29.934.

(1) In the fall of each school year, as part of the settle-up process for the preceding school year, the Texas Education Agency (TEA) will use the attendance reported through the Texas Student Data System Public Education Information Management System (TSDS PEIMS) summer data submission, as well as campus-level data regarding the number of students eligible for compensatory education funding under TEC, §48.104, from the TSDS PEIMS fall submission, to calculate the following for a contracted campus, contracted campus program, or resource campus:

(A) the entitlement for each student in average daily attendance at the contracted campus, contracted campus program, or resource campus, as if the campus, contracted campus program, or resource campus were a charter school under TEC, §12.106, using the state average basic allotment as defined under TEC, §12.106(a-1), and state average tax effort for enrichment funding as defined by TEC, §12.106(a-2);

(B) the entitlement for each student in average daily attendance at the contracted campus, contracted campus program, or resource campus under TEC, Chapter 48, Subchapters B, C, and E, as adjusted by subsection (d) of this section, using the district's basic allotment and enrichment tax effort without a local share component for those entitlements; and

(C) any positive difference that results from subtracting the amount calculated under subparagraph (B) of this paragraph from the amount calculated under subparagraph (A) of this paragraph, which shall be added to the district's Foundation School Fund Allotment.

(2) Campus program attendance must be reported on a separate track to receive funding.

(d) Estimates. School districts will be provided with estimated funding during a school year for eligible contracted campuses, contracted campus programs, or resource campuses based on the prior year's attendance data using the same methodology used in subsection (c)(1) of this section to calculate the entitlement. The final entitlement will be based on data from the current school year as provided for in subsection (c)(1) of this section. Any difference from the estimated entitlement will be addressed as part of the Foundation School Program settle-up process according to the provisions of TEC, §48.272.

(e) Exclusions. For purposes of the calculation in subsection (c) of this section, the following allotments shall be excluded from the entitlement:

(1) the Sparsity Adjustment under TEC, §48.052;

(2) [~~(1)~~] the Career and Technology Education Allotment under TEC, §48.106(a-1), for students enrolled in P-TECH [~~or New Tech Network~~] campuses;

(3) [~~(2)~~] the College, Career, or Military Readiness Outcomes Bonus under TEC, §48.110;

~~[(3) the Teacher Incentive Allotment under TEC, §48.112;]~~

~~[(4) the Mentor Program Allotment under TEC, §48.114;]~~

~~[(5) the School Safety Allotment under TEC, §48.115; and]~~

(4) [~~(6)~~] the Fast Growth Allotment under TEC, §48.111; and [.]

(5) the Teacher Incentive Allotment under TEC, §48.112.

(f) Funding for instructional facilities for charter schools. For [~~Effective September 1, 2018, for~~] purposes of the calculation in subsection (c)(1)(A) of this section, any funding to which the contracted campus, contracted campus program, or resource campus would be entitled under TEC, §12.106(d), will be included in the calculation.

(g) Recovery of funds. If a contract is found to be out of compliance with TEC, §11.157 or §11.174, or §97.1075 of this title (relating to Contracting to Partner to Operate a Campus under Texas Education Code, §11.174), TEA will eliminate any funding provided for that campus, contracted campus program, or resource campus under TEC, §48.252, and recover any funds overallocated under the provisions of TEC, §48.272.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on August 10, 2026.

TRD-202603360

Cristina De La Fuente-Valadez

Director, Rulemaking

Texas Education Agency

Earliest possible date of adoption: September 20, 2026

For further information, please call: (512) 475-1497

CHAPTER 74. CURRICULUM REQUIREMENTS

SUBCHAPTER BB. COMMISSIONER'S RULES CONCERNING HIGH SCHOOL GRADUATION

19 TAC §74.1025, §74.1027

The Texas Education Agency (TEA) proposes amendments to §74.1025 and §74.1027, concerning high school graduation. The proposed amendments would eliminate expiration provisions in alignment with statute.

BACKGROUND INFORMATION AND JUSTIFICATION: Texas Education Code (TEC), §28.0258, requires each school district and open-enrollment charter school to establish an individual graduation committee for each 11th or 12th grade student who fails to perform satisfactorily on not more than two end-of-course (EOC) assessments. Statute requires the commissioner of education to adopt rules to establish alternative individual graduation committee members and a timeline for decisions by individual graduation committees. The provisions of TEC, §28.0258, were initially set to expire September 1, 2017. Senate Bill (SB) 463, 85th Texas Legislature, Regular Session, 2017, extended the expiration date to September 1, 2019, and added TEC, §28.02541.

TEC, §28.02541, allows certain former students--those who entered high school prior to the 2011-2012 school year and completed all curriculum requirements but did not perform satisfactorily on the required assessments--to qualify for a high school diploma. Before 2011, these students were required to perform satisfactorily on exit-level Texas Assessment of Knowledge and Skills (TAKS) assessments in English language arts, mathematics, science, and social studies. Earlier cohorts were subject to prior exit-level assessments, including the Texas Assessment of Academic Skills (TAAS) and the Texas Educational Assessment of Minimum Skills (TEAMS). Statute requires the commissioner to adopt rules to administer TEC, §28.02541. The provisions of TEC, §28.02541, were initially set to expire September 1, 2019.

SB 213, 86th Texas Legislature, Regular Session, 2019, subsequently extended the expiration dates for both TEC, §28.0258 and §28.02541, to September 1, 2023. In 2021, House Bill (HB) 1603, 87th Texas Legislature, Regular Session, removed the expiration dates from both statutes, making the provisions of TEC, §28.0258 and §28.02541, permanent.

Section 74.1025 establishes the procedures for determining whether a student may qualify to graduate and receive a high school diploma based on an individual graduation committee (IGC) decision under TEC, §28.0258.

Section 74.1027 establishes the procedures for determining whether a student may qualify to graduate and receive a high school diploma under TEC, §28.02541.

The proposed amendments would remove the expiration dates from §74.1025 and §74.1027 to align with HB 1603, 87th Texas Legislature, Regular Session, 2021.

In addition, obsolete references to the 2014-2015 and 2017-2018 school years would be removed.

FISCAL IMPACT: Monica Martinez, associate commissioner for standards and programs, has determined that for the first five-year period the proposal is in effect, there are no additional costs to state or local government, including school districts and open-enrollment charter schools, required to comply with the proposal.

LOCAL EMPLOYMENT IMPACT: The proposal has no effect on local economy; therefore, no local employment impact statement is required under Texas Government Code, §2001.022.

TAKINGS IMPACT ASSESSMENT: The proposal does not impose a burden on private real property and, therefore, does not constitute a taking under Texas Government Code, §2007.043.

GOVERNMENT GROWTH IMPACT: TEA staff prepared a Government Growth Impact Statement assessment for this proposed rulemaking. During the first five years the proposed rulemaking would be in effect, it would not create or eliminate a government program; would not require the creation of new employee positions or elimination of existing employee positions; would not require an increase or decrease in future legislative appropriations to the agency; would not require an increase or decrease in fees paid to the agency; would not create a new regulation; would not expand, limit, or repeal an existing regulation; would not increase or decrease the number of individuals subject to its applicability; and would not positively or adversely affect the state's economy.

PUBLIC BENEFIT AND COST TO PERSONS: Ms. Martinez has determined that for each year of the first five years the proposal is in effect, the public benefit anticipated as a result of enforcing the proposal would be providing additional flexibility for students and former students who are seeking to graduate but have not met all assessment requirements. There is no anticipated economic cost to persons who are required to comply with the proposal.

DATA AND REPORTING IMPACT: The proposal would have no data and reporting impact.

PRINCIPAL AND CLASSROOM TEACHER PAPERWORK REQUIREMENTS: TEA has determined that the proposal would not require a written report or other paperwork to be completed by a principal or classroom teacher.

STATUTORY AUTHORITY. The amendments are proposed under TEC, §28.02541, which requires the commissioner of education to establish a procedure to determine whether certain students who entered Grade 9 before the 2011-2012 school year may qualify to graduate and receive a high school diploma; TEC, §28.0258, which requires each school district and open-enrollment charter school to establish an IGC for certain students who failed to perform satisfactorily on not more than two EOC assessments. This section requires the commissioner to adopt rules as necessary to implement the IGC requirement; and TEC, §28.0259, which requires the commissioner of education to adopt rules as necessary to implement the requirement for school districts to report through the Public Education Information Management System (PEIMS) the number of district students each school year for which an individual graduation committee.

CROSS REFERENCE TO STATUTE. The amendments implement TEC, §§28.02541, 28.0258, and 28.0259.

§74.1025. Individual Graduation Committee Review.

(a) In [~~Effective beginning with the 2014-2015 school year, in~~] accordance with [~~the~~] Texas Education Code (TEC), §28.0258; [,] §101.3022 of this title (relating to Assessment Requirements for Graduation); [,] and the course requirements in Chapter 74, Subchapter B, of this title (relating to Graduation Requirements), a school district or an open-enrollment charter school may award a high school diploma to a student who has taken but failed to achieve the end-of-course (EOC) assessment graduation requirements for no more than two courses if the student has qualified to graduate by means of an individual graduation committee.

(b) A school district or an open-enrollment charter school shall establish an individual graduation committee at the end of or after a student's 11th grade year to determine whether the student may qualify to graduate. A student may not qualify to graduate as a result of an individual graduation committee decision before the student's 12th grade year.

(c) A school district or an open-enrollment charter school may not establish an initial individual graduation committee for eligible students after June 10 or before the start of the next school year. Once the individual graduation committee has been established, it is the original individual graduation committee for that student.

(d) In order for a student to be included as a graduate in the school district's or charter school's graduation data in the school year in which the student meets the requirements provided by law to graduate under individual graduation committee provisions, an individual graduation committee must make a decision to award a diploma no later than August 31 immediately following that school year. A student who graduates as a result of an individual graduation committee decision after August 31 shall be reported in the subsequent year's graduation data.

(e) If a student leaves a school district after an original individual graduation committee has been established and before that original individual graduation committee awards a high school diploma to the student, any other district that later enrolls the student shall request information from the student's original individual graduation committee of record and shall implement the original individual graduation committee recommendations to the extent possible.

(f) The individual graduation committee shall consist of the following:

(1) the principal or principal's designee;

(2) for each EOC assessment instrument on which the student failed to perform satisfactorily, the teacher of the course;

(3) the department chair or lead teacher supervising the teacher described by paragraph (2) of this subsection; and

(4) as applicable:

(A) the student's parent or person standing in parental relation to the student;

(B) a designated advocate if the person described by subparagraph (A) of this paragraph is unable to serve; or

(g) In the event that the teacher identified in subsection (f)(2) of this section is unavailable, the principal shall designate as an alternate member of the committee a teacher certified in the subject of the EOC assessment on which the student failed to perform satisfactorily and who is most familiar with the student's performance in that subject area.

(h) In the event that the individual identified in subsection (f)(3) of this section is unavailable, the principal shall designate as an alternate member of the committee an experienced teacher certified in the subject of the EOC assessment on which the student failed to perform satisfactorily and who is familiar with the content of and instructional practices for the applicable course.

(i) In the event that the student's parent or person standing in parental relation to the student is unavailable to participate in the individual graduation committee, the principal shall designate an advocate with knowledge of the student to serve as an alternate member of the committee.

(j) Each school district and open-enrollment charter school shall report through the Texas Student Data System Public Education Information Management System (TSDS PEIMS) the following:

(1) the number of students each school year for which an individual graduation committee is established; and

(2) the number of students each school year who are awarded a diploma based on the decision of an individual graduation committee.

(k) A district shall maintain documentation to support the decision of the individual graduation committee to award or not award a student a high school diploma.

(l) This section only applies to a student classified by the school district or open-enrollment charter school as an 11th or 12th grade student in the 2014-2015 school year or thereafter.

[(m) Provisions of this section expire September 1, 2023. A student may graduate by means of an individual graduation committee if the student has qualified for an individual graduation committee under the TEC, §28.0258, and the individual graduation committee convened prior to September 1, 2023.]

(m) [~~(n)~~] A student receiving special education services is not subject to the individual graduation committee requirements in [~~the~~] TEC, §28.0258, or the provisions of this section. As provided in §89.1070 of this title (relating to Graduation Requirements) and §101.3023 of this title (relating to Participation and Graduation Assessment Requirements for Students Receiving Special Education Services), a student's admission, review, and dismissal [~~(ARD)~~] committee determines whether a student is required to achieve satisfactory performance on an EOC assessment to graduate.

§74.1027. Diplomas for Certain Individuals Who Entered Grade 9 Before 2011-2012 School Year.

(a) In [~~Effective beginning with the 2017-2018 school year, in~~] accordance with [~~the~~] Texas Education Code (TEC), §28.02541, a school district or an open-enrollment charter school may award a high school diploma to an individual who:

(1) entered Grade 9 before the 2011-2012 school year;

(2) successfully completed the curriculum requirements for high school graduation applicable to the individual when the individual entered Grade 9;

(3) has not performed satisfactorily on an assessment instrument or a part of an assessment instrument required for high school graduation, including an alternate assessment instrument offered under TEC, §39.025(c-2);

(4) has been administered at least three times the required subject-areas test(s), including an alternate assessment as specified in paragraph (3) of this subsection, for which the individual has not performed satisfactorily on the exit-level assessment instrument applicable to the individual when the individual entered Grade 9; and

(5) meets the alternative requirements for graduation in accordance with subsection (c) of this section or the local alternative requirements approved by the board of trustees in accordance with subsection (d) of this section.

(b) The school district or open-enrollment charter school in which the individual is enrolled or was last enrolled shall determine whether the individual may qualify to graduate and receive a high school diploma on the basis of the alternative requirements for graduation.

(c) The alternative requirements for graduation shall permit an individual to qualify to graduate and receive a high school diploma if the individual:

(1) has met the performance standard on an alternate assessment as specified in §101.4003 of this title (relating to Texas Assessment of Knowledge and Skills Exit-Level Alternate Assessments);

(2) has performed satisfactorily on the applicable subject-area test of a state-approved high school equivalency examination in accordance with §89.43(a)(4) of this title (relating to Eligibility for a Texas Certificate of High School Equivalency);

(3) provides evidence of attainment of a Texas Education Agency-approved industry-recognized postsecondary license or certification;

(4) provides evidence of current active duty service in the armed forces or a DD Form 214 indicating honorable or general discharge from the armed forces; or

(5) has successfully completed college-level coursework and earned college credit.

(d) With approval by the school district board of trustees, a school district may develop recommendations for local alternative requirements if the requirements would allow an individual to demonstrate proficiency in the content related to an examination for which the individual has not performed satisfactorily.

(e) A decision regarding whether the individual qualifies to graduate and receive a high school diploma is final and may not be appealed.

(f) The school district or open-enrollment charter school shall maintain documentation to support the decision to award or not award an individual a high school diploma.

~~[(g) Provisions of this section expire September 1, 2023.]~~