TITLE 19. EDUCATION

PART 1. TEXAS HIGHER EDUCATION COORDINATING BOARD

CHAPTER 4. RULES APPLYING TO ALL PUBLIC INSTITUTIONS OF HIGHER EDUCATION IN TEXAS

SUBCHAPTER B. TRANSFER OF CREDIT, CORE CURRICULUM AND FIELD OF STUDY CURRICULA

The Texas Higher Education Coordinating Board (Coordinating Board) proposes amendment to Texas Administrative Code, Title 19, Part 1, Chapter 4, Subchapter B, §4.22, and new §4.41, concerning Transfer of Credit, Core Curriculum and Field of Study Curricula. Specifically, the amendment and new section will implement the transfer reporting requirements outlined in Senate Bill 3039, 89th Texas Legislature, Regular Session.

Texas Education Code, §51.4033, authorizes the Coordinating Board to adopt rules related to transfer reporting for public institutions of higher education in Texas.

Rule 4.22, Authority, amends authority for the subchapter.

Rule 4.41, Requirements and Procedures for Transfer Reporting, is created to implement transfer reporting requirements established during the 89th Texas legislative session. The new rule specifies the data reporting required of institutions and the surveying required of the Coordinating Board.

Elizabeth Mayer, Assistant Commissioner for Academic and Health Affairs, has determined that for each of the first five years the sections are in effect there would be no fiscal implications for state or local governments as a result of enforcing or administering the rules. There are no estimated reductions in costs to the state and to local governments as a result of enforcing or administering the rule. There are no estimated losses or increases in revenue to the state or to local governments as a result of enforcing or administering the rule.

There is no impact on small businesses, micro businesses, and rural communities. There is no anticipated impact on local employment.

Elizabeth Mayer, Assistant Commissioner for Academic and Health Affairs, has also determined that for each year of the first five years the section is in effect, the public benefit anticipated as a result of administering the sections will be streamlined reporting requirements to provide data and recommendations regarding the transferability of credit between public institutions of higher education. There are no anticipated economic costs to persons who are required to comply with the sections as proposed.

Government Growth Impact Statement

(1) the rules will not create or eliminate a government program;

(2) implementation of the rules will not require the creation or elimination of employee positions;

(3) implementation of the rules will not require an increase or decrease in future legislative appropriations to the agency;

(4) the rules will not require an increase or decrease in fees paid to the agency;

(5) the rules will create a new rule;

(6) the rules will not limit an existing rule;

(7) the rules will not change the number of individuals subject to the rule; and

(8) the rules will not affect this state's economy.

Comments on the proposed rule or information related to the cost, benefit, or effect of the proposed rule, including any applicable data, research or analysis, may be submitted to Elizabeth Mayer, Assistant Commissioner for Academic and Health Affairs, P.O. Box 12788, Austin, Texas 78711-2788, or via email at AHAComments@highered.texas.gov. Comments will be accepted for 30 days following publication of the proposal in the Texas Register.

The amendment and new section are proposed under Texas Education Code, Section 51.4033, which provides the Coordinating Board with the authority to adopt rules related to transfer reporting for public institutions of higher education in Texas.

The proposed amendment and new section affects Texas Education Code, Section 51.4033.

§4.22. Authority.

The Board is authorized to adopt rules related to the Core Curricula, Field of Study Curricula, and a transfer dispute resolution process under Texas Education Code, §§51.315, 61.052, 61.821 - 61.828, 61.832, and 61.834. The Board is authorized to adopt rules regarding required reporting related to transfer and denial of credit under Texas Education Code, §51.4033 and §51.4035.

§4.41. Requirements and Procedures for Transfer Reporting.

(a) Not later than May 1 of each year, each general academic teaching institution shall submit to the Board for the preceding academic year:

(1) Each course in the Lower-Division Academic Course Guide Manual (ACGM) for which a transfer student was not granted academic credit at the receiving institution or academic credit toward the student's declared major, if applicable.

(2) For each course as described in paragraph (1) of this subsection, the institution shall include:

(A) the institution that awarded the credit;

(B) the course name;

(D) the common course number; and

(E) the reason academic credit was not granted.

(3) The Board shall limit duplication of CBM reporting for institutions to submit the requirements of subsection (a) of this section.

(b) Not later than May 1 of each even-numbered year, the Board shall conduct a survey of public institutions of higher education to collect the following information:

(1) A description of the institution's efforts related to improving transfer pathways including:

(A) faculty collaboration;

(B) targeted program enhancements;

(D) development and maintenance of transfer-related website content;

(E) targeted financial aid and scholarships;

(F) student success and retention programs; and

(G) degree program alignment and curriculum coordination.

(2) Identification of existing barriers and emerging issues affecting transfer students at the institution.

(3) The number and outcome of each credit denial dispute received and completed through the institution's dispute resolution process as required by Texas Education Code, §61.826.

(4) An assessment of the institution's progress toward its goals to increase the number, success, and persistence of public junior college transfer students.

(5) Not later than May 1 of each odd-numbered year, the Board shall provide an opportunity for institutions to update any information provided in the same survey during the preceding year.

(c) The Board shall prescribe a uniform reporting template and electronic submission process for the requirements of subsections (a) and (b) of this section to ensure comparability across institutions.

(d) Not later than December 1 of each even-numbered year, the Board shall prepare and submit to the Governor, Legislative Budget Board, House Appropriations Committee, and Senate Finance Committee a statewide evaluation of transfer student success. The evaluation shall include:

(1) An analysis of institutional transfer reporting and performance data, including but not limited to:

(A) application and admission rates;

(B) financial aid awarded;

(D) baccalaureate graduation rates of transfer students, disaggregated by program of enrollment or completion at public junior colleges and receiving institutions.

(2) An analysis of institutional practices to support the academic success of transfer students.

(3) Recommendations for legislative or administrative actions to advance the goals identified in the state's higher education strategic plan.

(e) Not later than February 1 of each year, in accordance with Texas Education Code, §51.4035, the Board shall provide the following information to each institution:

(1) the five majors or degree or certificate programs offered by the institution with the highest number of courses for which academic credit is denied or not applied toward the major or program; and

(2) the five courses for each major or degree or certificate program for which academic credit is most frequently denied because the credit is not applicable toward the major or program.

(f) This section applies to reporting due on or after May 1, 2026.

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 February 11, 2026.

TRD-202600591

Douglas Brock

General Counsel

Texas Higher Education Coordinating Board

Earliest possible date of adoption: March 29, 2026

For further information, please call: (512) 427-6182

PART 2. TEXAS EDUCATION AGENCY

CHAPTER 61. SCHOOL DISTRICTS

SUBCHAPTER A. BOARD OF TRUSTEES RELATIONSHIP

19 TAC §61.4

The State Board of Education (SBOE) proposes new §61.4, concerning school district boards of trustees. The proposed new rule would reflect changes made by Senate Bill (SB) 204, 89th Texas Legislature, Regular Session, 2025, to the SBOE's duty to provide training courses for independent school district trustees.

BACKGROUND INFORMATION AND JUSTIFICATION: Texas Education Code (TEC), §11.159, Member Training and Orientation, requires the SBOE to provide a training course for school board trustees. Chapter 61, School Districts, Subchapter A, Board of Trustees Relationship, most recently amended effective August 25, 2025, addresses this statutory requirement. School board trustee training under current SBOE rule includes a local school district orientation session; a basic orientation to the TEC; an annual team-building session with the local school board and the superintendent; additional hours of continuing education based on identified needs; training on evaluating student academic performance; training on identifying and reporting potential victims of sexual abuse, human trafficking, and other maltreatment of children; and training on school safety.

In November 2025, the Committee on School Initiatives discussed both an outline of the parental rights training curriculum and the new rule regarding the training. The committee also held a public hearing regarding the training curriculum.

The proposed new rule would establish the purpose of the training, specify the timeline and number of hours required for training based on a board member's length of service, and require that school districts maintain verification of training completion for each school board member.

The SBOE approved the proposed new section for first reading and filing authorization at its January 30, 2026 meeting.

FISCAL IMPACT: Steve Lecholop, deputy commissioner for governance, has determined that 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.

The proposed rulemaking 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 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: Mr. Lecholop 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 to describe the requirements for a new parental rights training for school district trustees established by TEC, §11.159(b-2), as added by SB 204, 89th Texas Legislature, Regular Session, 2025. 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 or 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: The SBOE 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 February 27, 2026, and ends at 5:00 p.m. on March 30, 2026. The SBOE will take registered oral and written comments on the proposal at the appropriate committee meeting in April 2026 in accordance with the SBOE board operating policies and procedures. 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 February 27, 2026.

STATUTORY AUTHORITY. The new section is proposed under Texas Education Code (TEC), §11.159(b-2), as added by Senate Bill 204, 89th Texas Legislature, Regular Session, 2025, which obligates the State Board of Education (SBOE) to require trustees to complete training on parental rights. The statute also requires the SBOE, with assistance from the Texas Education Agency, to develop the curriculum and materials for the training by April 1, 2026.

CROSS REFERENCE TO STATUTE. The new section implements Texas Education Code, §11.159(b-2), as added by Senate Bill 204, 89th Texas Legislature, Regular Session, 2025.

§61.4. Parental Rights Training for School Board Members.

(a) The continuing education required under Texas Education Code (TEC), §11.159(b-2), applies to each member of an independent school district board of trustees.

(b) Each trustee of an independent school district shall complete the training on parental rights developed by the State Board of Education (SBOE).

(1) The purpose of the training is to ensure that each trustee:

(A) understands the constitutional and statutory foundations of parental rights;

(B) recognizes the trustee's duty to parents and children as beneficiaries of the public education trust;

(C) governs in a manner that recognizes a parent's right to direct the upbringing, education, health, and moral training of their child; and

(D) ensures district policies, procedures, and practices comply with all applicable federal and state parental rights laws.

(2) A candidate for school board may complete the training up to one year before he or she is elected or appointed. A newly elected or appointed school board member who did not complete this training in the year preceding election or appointment must complete the training within 120 calendar days after election or appointment.

(3) The training requirement shall be fulfilled by completing the online course developed by the SBOE and provided by the Texas Education Agency.

(4) The continuing education shall be completed annually.

(A) In a board member's first year of service, the training shall be at least five hours in length.

(B) In subsequent years of service, the training shall be at least three hours in length.

(C) In the event of a break in service, a trustee's first year upon reappointment or reelection shall be considered the first year of service for purposes of the training requirements under this section.

(5) Each school district shall maintain verification of completion for each trustee.

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 February 13, 2026.

TRD-202600666

Cristina De La Fuente-Valadez

Director, Rulemaking

Texas Education Agency

Earliest possible date of adoption: March 29, 2026

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

CHAPTER 74. CURRICULUM REQUIREMENTS

SUBCHAPTER A. REQUIRED CURRICULUM

19 TAC §74.3

The State Board of Education (SBOE) proposes an amendment to §74.3, concerning the required secondary curriculum. The proposed amendment would update the list of high school courses for personal financial literacy and economics that are required to be offered to students to align with the requirements of House Bill (HB) 27, 89th Texas Legislature, Regular Session, 2025.

BACKGROUND INFORMATION AND JUSTIFICATION: In accordance with statutory requirements that the SBOE establish curriculum and graduation requirements, the SBOE has identified high school courses that school districts must offer. For social studies, §74.3 requires school districts to offer United States History Studies Since 1877, World History Studies, United States Government, World Geography Studies, Personal Financial Literacy, Economics with Emphasis on the Free Enterprise System and Its Benefits, and Personal Financial Literacy and Economics.

The 89th Texas Legislature passed HB 27 in 2025, requiring students to successfully complete a one-half credit personal financial literacy course instead of the option to complete either a one-half credit economics course or a one-half credit course in economics and personal financial literacy to satisfy the economics requirement under the Foundation High School Program. The bill changed the current one-half credit economics course to a one-credit course and permits students to select the third social studies credit required for graduation from economics, world geography, or world history. The bill also added new Texas Education Code, §28.025(b-24), requiring the SBOE to allow a student to comply with the personal financial literacy requirement by successfully completing an advanced placement course.

The proposed amendment would update the required secondary social studies course offerings in §74.3 to align with the requirements of HB 27.

The SBOE approved the proposed amendment for first reading and filing authorization at its January 30, 2026 meeting.

FISCAL IMPACT: Monica Martinez, associate commissioner for standards and programs, has determined that 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: Texas Education Agency (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 limit an existing regulation by eliminating a course from the list of high school courses for social studies that are required to be offered to students.

The proposed rulemaking 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. 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 to ensure the course titles in the required curriculum align with titles in the Texas Essential Knowledge and Skills. 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 or 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 amendment is proposed under Texas Education Code (TEC), §7.102(c)(4), which requires the State Board of Education (SBOE) to establish curriculum and graduation requirements; TEC, §28.002(a), which identifies the subjects of the required curriculum; and TEC, §28.025(b-1), which requires the SBOE to determine by rule specific courses for graduation under the foundation high school program.

CROSS REFERENCE TO STATUTE. The amendment implements Texas Education Code, §§7.102(c)(4), 28.002(a), and 28.025(b-1).

§74.3. Description of a Required Secondary Curriculum.

(a) (No change.)

(b) Secondary Grades 9-12.

(1) (No change.)

(2) A school district must offer courses listed in subparagraphs (A)-(J) of this paragraph, unless selection from a list of courses is specified, and maintain evidence that students have the opportunity to take these courses:

(A) - (C) (No change.)

(D) social studies--[United States History Studies Since 1877, World History Studies, United States Government, World Geography Studies, Personal Financial Literacy, Economics with Emphasis on the Free Enterprise System and Its Benefits, and Personal Financial Literacy and Economics;]

(i) United States History Studies Since 1877, United States Government, and Personal Financial Literacy; and

(ii) at least two additional social studies courses selected from Economics with Emphasis on the Free Enterprise System and Its Benefits, World Geography Studies, World History Studies, advanced level economics, world geography, world history, and personal financial literacy courses offered as dual credit as referenced in §74.11(i) of this title (relating to High School Graduation Requirements) or a course selected from §74.12(b)(4)(E) of this title (relating to Foundation High School Program);

(E) - (J) (No change.)

(3) The following requirements may be reduced to one by the commissioner of education upon application of a school district with a total high school enrollment of less than 500 students:

(A) the requirement to offer two additional science courses; and

(B) the requirement to offer two additional social studies courses [~~both Economics with Emphasis on the Free Enterprise System and Its Benefits and Personal Financial Literacy and Economics~~] .

(4) - (5) (No change.)

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 February 13, 2026.

TRD-202600667

Cristina De La Fuente-Valadez

Director, Rulemaking

Texas Education Agency

Earliest possible date of adoption: March 29, 2026

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

19 TAC §74.4

The State Board of Education (SBOE) proposes the repeal of §74.4, concerning English Language Proficiency Standards (ELPS). The proposed repeal would remove the ELPS for Kindergarten-Grade 12 that will be superseded by 19 TAC §120.20, English Language Proficiency Standards, Kindergarten-Grade 3, Adopted 2024, and §120.21, English Language Proficiency Standards, Grades 4-12, Adopted 2024, beginning with the 2026-2027 school year.

BACKGROUND INFORMATION AND JUSTIFICATION: In 1998, standards for English as a second language (ESL) for students in Kindergarten-Grade 12 were adopted as part of 19 TAC Chapter 128, Texas Essential Knowledge and Skills for Spanish Language Arts and Reading and English as a Second Language. In a subsequent Title III monitoring visit, the U.S. Department of Education (USDE) indicated that there was insufficient evidence demonstrating that the ESL standards outlined in 19 TAC Chapter 128 were aligned to state academic content and achievement standards in mathematics, as required by the No Child Left Behind Act (NCLB), §2113(b)(2). In November 2007, the SBOE adopted the ELPS as part of 19 TAC Chapter 74, Curriculum Requirements, to comply with NCLB requirements. The adopted ELPS in §74.4 clarified that state standards in English language acquisition must be implemented as an integral part of the instruction in each foundation and enrichment subject. Additionally, English language proficiency levels of beginning, intermediate, advanced, and advanced high in the domains of listening, speaking, reading, and writing were established as part of the ELPS, as required by NCLB. The superseded second language acquisition standards in 19 TAC Chapter 128 were also repealed in September 2008 during the process of revising the Texas Essential Knowledge and Skills (TEKS) in 19 TAC Chapters 110 and 128.

The SBOE began review and revision of the ELPS in 2019, in accordance with the SBOE's approved TEKS and instructional materials review schedule. Applications to serve on ELPS review work groups were posted on the Texas Education Agency (TEA) website in December 2018, and TEA distributed a survey to collect information from educators regarding the current ELPS. Work groups were convened in March, May, August, September, and October 2019. In September 2019, the USDE indicated that Texas only partially met the requirements of the Elementary and Secondary Education Act of 1965, as amended by the Every Student Succeeds Act, and requested additional evidence that the ELPS are aligned to the state's academic content standards and contain language proficiency expectations needed for emergent bilingual students to demonstrate achievement of the state academic standards appropriate to each grade level/grade band in at least reading language arts, mathematics, and science.

In response to feedback from work group members and the USDE, TEA staff convened a panel of experts in second language acquisition from Texas institutions of higher education to complete an analysis of the work group recommendations and current research on English language acquisition. Based on the panel's findings and direction from the SBOE, TEA executed personal services contracts with the panel members and a representative of an education service center to prepare a draft of revisions to the ELPS. Text of the draft ELPS completed by the expert panel was presented to the SBOE at the June 2023 SBOE meeting.

Applications to serve on the 2023-2024 ELPS review work groups were collected by TEA from June 2023 through January 2024. TEA staff provided SBOE members with applications for approval to serve on ELPS work groups in July, September, and December 2023 and January 2024. ELPS review work groups were convened in August, September, and November 2023 and March 2024 with the charge of reviewing and revising the expert panel's draft. In April 2024, the SBOE held a discussion item on the proposed new ELPS, and in May and June 2024, TEA convened a final work group to complete the recommendations for the new ELPS.

In September 2024, the SBOE adopted new ELPS for implementation in the 2026-2027 school year to ensure the standards are current and comply with federal requirements. The proposed repeal would remove the ELPS in §74.4 that will be superseded by the new ELPS in 19 TAC §120.20 and §120.21 beginning with the 2026-2027 school year.

The SBOE approved the proposed repeal for first reading and filing authorization at its January 30, 2026 meeting.

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.

The proposed rulemaking 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 limit 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 to repeal the ELPS for Kindergarten-Grade 12 that will be superseded by 19 TAC §120.20 and §120.21 beginning with the 2026-2027 school year to avoid confusion. 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 or 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 repeal is proposed under Texas Education Code (TEC), §7.102(c)(4), which requires the State Board of Education (SBOE) to establish curriculum and graduation requirements; TEC, §28.002(a), which identifies the subjects of the required curriculum; and TEC, §29.051, which establishes bilingual education and special language programs in public schools and provides supplemental financial assistance to help school districts meet the extra costs of the programs.

CROSS REFERENCE TO STATUTE. The repeal implements Texas Education Code, §§7.102(c)(4), 28.002(a), and 29.051.

§74.4. English Language Proficiency Standards.

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 February 13, 2026.

TRD-202600668

Cristina De La Fuente-Valadez

Director, Rulemaking

Texas Education Agency

Earliest possible date of adoption: March 29, 2026

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

SUBCHAPTER B. GRADUATION REQUIREMENTS

19 TAC §74.11, §74.12

The State Board of Education (SBOE) proposes amendments to §74.11 and §74.12, concerning the foundation high school program. The proposed amendments would update high school graduation requirements to align with House Bill (HB) 27, 89th Texas Legislature, Regular Session, 2025, related to personal financial literacy, and Senate Bill (SB) 2314, 89th Texas Legislature, Regular Session, 2025, related to the Texas Higher Education Coordinating Board (THECB) direct admission program.

BACKGROUND INFORMATION AND JUSTIFICATION: The 89th Texas Legislature, Regular Session, 2025, passed HB 27, requiring students to successfully complete a one-half credit personal financial literacy course instead of the option to complete either a one-half credit economics course or a one-half credit course in economics and personal financial literacy to satisfy the economics requirement under the Foundation High School Program. The bill changed the current one-half credit economics course to a one-credit course and permits students to select the third social studies credit required for graduation from economics, world geography, or world history. The bill also added new Texas Education Code (TEC), §28.025(b-24), requiring the SBOE to allow a student to comply with the personal financial literacy requirement by successfully completing an advanced placement (AP) course.

The 89th Texas Legislature, Regular Session, 2025, also passed SB 2314, amending the state graduation requirements in TEC, §28.025(c), to require students to elect whether to allow the THECB to share the student's data and education records, as necessary, with institutions of higher education to allow the student to participate in the direct admission program established by THECB.

The proposed amendments would update the high school graduation requirements to align with HB 27 and SB 2314. The proposed amendments would also add language to clarify that students may satisfy a social studies graduation requirement with a comparable AP or IB social studies course selected from 19 TAC Chapter 113 or an advanced level course offered as a dual credit course that does not count toward another credit required for graduation.

The SBOE approved the proposed amendments for first reading and filing authorization at its January 30, 2026 meeting.

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: Texas Education Agency (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 expand an existing regulation by adding the requirement that students must elect whether to allow the THECB to share their academic data and education records with institutions of higher education for the direct admission program established by THECB.

The proposed rulemaking 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 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 to create an additional option for students to satisfy high school graduation requirements for social studies and would support students to receive more immediate information regarding college admissions to make the college planning process easier. 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 or 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 Texas Education Code (TEC), §7.102(c)(4), which requires the State Board of Education (SBOE) to establish curriculum and graduation requirements; TEC, §28.025(a), which requires the SBOE to determine by rule the curriculum requirements for the foundation high school program that are consistent with the required curriculum and requires the SBOE to designate specific courses that are required for the foundation high school program; TEC, §28.025(b-1)(3), which requires the SBOE to require that the curriculum requirements for the foundation high school program include a requirement that students successfully complete at least one-half credit in personal financial literacy; TEC, §28.025(b-24), as added by House Bill 27, 89th Texas Legislature, Regular Session, 2025, which requires the SBOE to allow a student to comply with the curriculum requirement for a one-half credit in personal financial literacy by successfully completing an advanced placement (AP) course designated by the SBOE as containing substantively similar and rigorous academic content; TEC, §28.025(c)(1), which permits a student to graduate and receive a diploma only if the student successfully completes the curriculum requirements identified by the SBOE under TEC, §28.025(a), and complies with TEC, §§28.0256, 28.0257, and 39.025; and TEC, §28.0257, as added by Senate Bill 2314, 89th Texas Legislature, Regular Session, 2025, which requires a student to elect whether to opt in to allowing the Texas Higher Education Coordinating Board (THECB) to share the student's data and education records, as necessary, with institutions of higher education to allow the student to participate in the direct admissions program established by THECB.

CROSS REFERENCE TO STATUTE. The amendments implement Texas Education Code, §§7.102(c)(4); 28.025(a); (b-1)(3); (b-24), as added by House Bill 27, 89th Texas Legislature, Regular Session, 2025; and (c)(1); and 28.0257, as amended by Senate Bill 2314, 89th Texas Legislature, Regular Session, 2025.

§74.11. High School Graduation Requirements.

(a) To receive a high school diploma, a student entering Grade 9 in the 2014-2015 school year and thereafter must complete the following:

(1) in accordance with subsection (d) of this section, requirements of the Foundation High School Program specified in §74.12 of this title (relating to Foundation High School Program);

(2) testing requirements for graduation as specified in Chapter 101 of this title (relating to Assessment); and

(3) demonstrated proficiency, in Grade 8 or higher, as determined by the district in which the student is enrolled, in delivering clear verbal messages; choosing effective nonverbal behaviors; listening for desired results; applying valid critical-thinking and problem-solving processes; and identifying, analyzing, developing, and evaluating communication skills needed for professional and social success in interpersonal situations, group interactions, and personal and professional presentations.

(b) Beginning with students enrolled in Grade 12 during the 2021-2022 school year, each student in Grade 12 must complete and submit a free application for federal student aid (FAFSA) or a Texas application for state financial aid (TASFA) before graduating from high school.

(1) A student may graduate under the Foundation High School Program without completing a financial aid application if:

(A) the student's parent or other person standing in parental relation submits a signed form, approved by the Texas Education Agency (TEA), indicating that the parent or other person declines to complete and submit the application or authorizes the student to decline to complete and submit the financial aid application;

(B) the student signs and submits the form described by paragraph (1) of this subsection on the student's own behalf if the student is 18 years of age or older or has been emancipated under Texas Family Code, Chapter 31; or

(C) a school counselor authorizes the student to decline to complete and submit the financial aid application for good cause, as determined by the school counselor.

(2) A school counselor may not indicate that a student has not complied with this subsection if the school district or open-enrollment charter school fails to provide the form described by paragraph (1)(A) of this subsection to the student or the student's parent or guardian.

(c) Beginning with students enrolled in Grade 9 during the 2026-2027 school year, before graduating high school, a student must elect whether or not to allow the Texas Higher Education Coordinating Board (THECB) to share the student's data and education records, as necessary, with institutions of higher education to allow the student to participate in the direct admission program established by the THECB pursuant to TEC, §61.0511(b)(2). A student satisfies this requirement if:

(1) the student provides documentation that the student has established a profile on the My Texas Future website and elected to participate in the direct admission program;

(2) the student's parent or guardian submits a signed form authorizing the student to decline to complete and submit information necessary to participate in the program;

(3) the student is 18 years or older or has had the disabilities of minority removed and signs and submits a form declining to complete and submit information necessary to participate in the program; or

(4) a school counselor authorizes the student in writing to decline to complete and submit the information necessary to participate in the program.

(d) [~~(c)~~] A school district shall clearly indicate the distinguished level of achievement under the Foundation High School Program, an endorsement, and a performance acknowledgment on the transcript or academic achievement record (AAR) of a student who satisfies the applicable requirements.

(e) [~~(d)~~] A student entering Grade 9 in the 2014-2015 school year and thereafter shall enroll in the courses necessary to complete the curriculum requirements for the Foundation High School Program specified in §74.12 of this title and the curriculum requirements for at least one endorsement specified in §74.13 of this title (relating to Endorsements).

(f) [~~(e)~~] A student may graduate under the Foundation High School Program without earning an endorsement if, after the student's sophomore year:

(1) the student and the student's parent or person standing in parental relation to the student are advised by a school counselor of the specific benefits of graduating from high school with one or more endorsements; and

(2) the student's parent or person standing in parental relation to the student files with a school counselor written permission, on a form adopted by [~~the~~] TEA, allowing the student to graduate under the Foundation High School Program without earning an endorsement.

(g) [~~(f)~~] A student may earn a distinguished level of achievement by successfully completing the curriculum requirements for the Foundation High School Program and the curriculum requirements for at least one endorsement required by the Texas Education Code (TEC), §28.025(b-15), including four credits in science and four credits in mathematics to include Algebra II.

(h) [~~(g)~~] An out-of-state or out-of-country transfer student (including foreign exchange students) or a transfer student from a Texas nonpublic school is eligible to receive a Texas diploma but must complete all requirements of this section to satisfy state graduation requirements. Any course credit required in this section that is not completed by the student before he or she enrolls in a Texas school district may be satisfied through the provisions of §74.23 of this title (relating to Correspondence Courses and Distance Learning) and §74.24 of this title (relating to Credit by Examination) or by completing the course or courses according to the provisions of §74.26 of this title (relating to Award of Credit).

(i) [~~(h)~~] Elective credits may be selected from the following:

(1) high school courses not required for graduation that are listed in the following chapters of this title:

(A) Chapter 110 of this title (relating to Texas Essential Knowledge and Skills for English Language Arts and Reading);

(B) Chapter 111 of this title (relating to Texas Essential Knowledge and Skills for Mathematics);

(D) Chapter 113 of this title (relating to Texas Essential Knowledge and Skills for Social Studies);

(E) Chapter 114 of this title (relating to Texas Essential Knowledge and Skills for Languages Other Than English);

(F) Chapter 115 of this title (relating to Texas Essential Knowledge and Skills for Health Education);

(G) Chapter 116 of this title (relating to Texas Essential Knowledge and Skills for Physical Education);

(H) Chapter 117 of this title (relating to Texas Essential Knowledge and Skills for Fine Arts); and

(I) Chapter 127 of this title (relating to Texas Essential Knowledge and Skills for Career Development and Career and Technical Education);

~~[(J) Chapter 130 of this title (relating to Texas Essential Knowledge and Skills for Career and Technical Education);]~~

(2) state-approved innovative courses as specified in §74.27 of this title (relating to Innovative Courses and Programs);

(3) Junior Reserve Officer Training Corps (JROTC)--one to four credits;

(4) Driver Education--one-half credit; and

(5) College preparatory English language arts or mathematics courses developed and offered pursuant to the TEC, §28.014.

(j) [~~(i)~~] Courses offered for dual credit at or in conjunction with an institution of higher education that provide advanced academic instruction beyond, or in greater depth than, the essential knowledge and skills for the equivalent high school course required for graduation may satisfy graduation requirements, including requirements for required courses, advanced courses, and courses for elective credit as well as requirements for endorsements.

(k) [~~(j)~~] A student may not be enrolled in a course that has a required prerequisite unless:

(1) the student has successfully completed the prerequisite course(s);

(2) the student has demonstrated equivalent knowledge as determined by the school district; or

(3) the student was already enrolled in the course in an out-of-state, an out-of-country, or a Texas nonpublic school and transferred to a Texas public school prior to successfully completing the course.

(l) [~~(k)~~] A district may exempt a student from a specific career and technical education (CTE) course prerequisite for a CTE course that satisfies a mathematics or science credit if the district determines the student is not using the course to complete a CTE program of study.

(m) [~~(l)~~] A district may award credit for a course a student completed without meeting the prerequisites if the student completed the course in an out-of-state, an out-of-country, or a Texas nonpublic school where there was not a prerequisite.

(n) [~~(m)~~] A district shall allow a student who successfully completes AP Computer Science A or IB Computer Science Higher Level to satisfy both one advanced mathematics requirement and one languages other than English requirement for graduation.

(o) [~~(n)~~] Each school district shall annually report to [~~the~~] TEA the names of the locally developed courses, programs, institutions of higher education, and internships in which the district's students have enrolled as authorized by the TEC, §28.002(g-1). [~~The~~] TEA shall make available information provided under this subsection to other districts. If a district chooses, it may submit any locally developed course for approval under §74.27 of this title as an innovative course.

(p) [~~(o)~~] Each school district shall annually report to [~~the~~] TEA the names of cybersecurity courses approved by the board of trustees for credit and the institutions of higher education in which the district's students have enrolled as authorized by the TEC, §28.002(g-3). [~~The~~] TEA shall make available information provided under this subsection to other districts. If a district chooses, it may submit any locally developed course for approval under §74.27 of this title as an innovative course.

(q) [~~(p)~~] A school district shall permit a student to comply with the curriculum requirements under the Foundation High School Program by successfully completing appropriate courses in the core curriculum of an institution of higher education (IHE). A student who has completed the core curriculum of an IHE in accordance with TEC, §61.822, as certified by the IHE in accordance with §4.28 of this title (relating to Core Curriculum):

(1) is considered to have earned an endorsement by successfully completing the appropriate courses for that endorsement;

(2) is considered to have earned a distinguished level of achievement under the Foundation High School Program; and

(3) is entitled to receive a high school diploma.

§74.12. Foundation High School Program.

(a) Credits. A student must earn at least 22 credits to complete the Foundation High School Program.

(b) Core courses. A student must demonstrate proficiency in the following.

(1) English language arts--four credits. Two of the credits must consist of English I and II. (Students with limited English proficiency who are at the beginning or intermediate level of English language proficiency, as defined by §74.4(d) of this title (relating to English Language Proficiency Standards), may satisfy the English I and English II graduation requirements by successfully completing English I for Speakers of Other Languages and English II for Speakers of Other Languages.) A third credit must consist of English III, a comparable Advanced Placement (AP) English language arts course that does not count toward another credit required for graduation, or a comparable International Baccalaureate (IB) English language arts course that meets all the requirements in §110.33 of this title (relating to English Language Arts and Reading, English III (One Credit), Beginning with School Year 2009-2010). A fourth credit may be selected from one full credit or a combination of two half credits from two different courses, subject to prerequisite requirements, from the following courses:

(A) English IV;

(B) Independent Study in English;

(D) Creative Writing;

(E) Research and Technical Writing;

(F) Humanities;

(G) Public Speaking III;

(H) Communication Applications, which must be combined with another half credit from the other courses listed in subparagraphs (A)-(G) and (I)-(S) of this paragraph;

(I) Oral Interpretation III;

(J) Debate III;

(K) Independent Study in Speech;

(L) Independent Study in Journalism;

(M) Advanced Broadcast Journalism III;

(N) Advanced Journalism: Newspaper III;

(O) Advanced Journalism: Yearbook III;

(P) a comparable Advanced Placement (AP) English language arts course that does not count toward another credit required for graduation;

(Q) a comparable International Baccalaureate (IB) English language arts course that meets all the requirements in §110.34 of this title (relating to English Language Arts and Reading, English IV (One Credit), Beginning with School Year 2009-2010);

(R) after the successful completion of English I, II, and III, a locally developed English language arts course or other activity, including an apprenticeship or training hours needed to obtain an industry-recognized credential or certificate that is developed pursuant to the Texas Education Code (TEC), §28.002(g-1);

(S) Business English; and

(T) a college preparatory English language arts course that is developed pursuant to the TEC, §28.014.

(2) Mathematics--three credits. Two of the credits must consist of Algebra I and Geometry.

(A) The additional credit may be selected from one full credit or a combination of two half credits from two different courses, subject to prerequisite requirements, from the following courses or a credit selected from the courses listed in subparagraph (B) of this paragraph:

(i) Mathematical Models with Applications;

(ii) Mathematical Applications in Agriculture, Food, and Natural Resources;

(iii) Digital Electronics;

(iv) Financial Mathematics;

(v) Applied Mathematics for Technical Professionals;

(vi) Accounting II;

(vii) Manufacturing Engineering Technology II; and

(viii) Robotics II.

(B) The additional credit may be selected from one full credit or a combination of two half credits from two different courses, subject to prerequisite requirements, from the following courses:

(i) Algebra II;

(ii) Precalculus;

(iii) Advanced Quantitative Reasoning;

(iv) Independent Study in Mathematics;

(v) Discrete Mathematics for Problem Solving;

(vi) Algebraic Reasoning;

(vii) Statistics;

(viii) a comparable AP mathematics course that does not count toward another credit required for graduation;

(ix) AP Computer Science A;

(x) IB Computer Science Higher Level;

(xi) Engineering Mathematics;

(xii) Statistics and Business Decision Making;

(xiii) Mathematics for Medical Professionals;

(xiv) Discrete Mathematics for Computer Science;

(xv) pursuant to the TEC, §28.025(b-5), after the successful completion of Algebra II, a mathematics course endorsed by an institution of higher education as a course for which the institution would award course credit or as a prerequisite for a course for which the institution would award course credit. The Texas Education Agency (TEA) shall maintain a current list of courses offered under this clause; and

(xvi) after the successful completion of Algebra I and Geometry, a locally developed mathematics course or other activity, including an apprenticeship or training hours needed to obtain an industry-recognized credential or certificate that is developed pursuant to the TEC, §28.002(g-1).

(C) One credit of a two-credit IB mathematics course selected from Chapter 111 of this title (relating to Texas Essential Knowledge and Skills for Mathematics) may satisfy the additional mathematics credit.

(3) Science--three credits. One credit must consist of Biology or a comparable AP or IB biology course.

(A) One credit must be selected from the following laboratory-based courses:

(i) Integrated Physics and Chemistry;

(ii) Chemistry;

(iii) Physics;

(iv) Physics for Engineering; and

(v) a comparable AP or IB chemistry or physics course that does not count toward another credit required for graduation.

(B) The additional credit may be selected from one full credit or a combination of two half credits from two different courses, subject to prerequisite requirements, from the following laboratory-based courses:

(i) Chemistry;

(ii) Physics;

(iii) Aquatic Science;

(iv) Astronomy;

(v) Earth Systems Science;

(vi) Environmental Systems;

(vii) Specialized Topics in Science;

(viii) a comparable AP science course that does not count toward another credit required for graduation;

(ix) Advanced Animal Science;

(x) Advanced Plant and Soil Science;

(xi) Anatomy and Physiology;

(xii) Medical Microbiology;

(xiii) Pathophysiology;

(xiv) Food Science;

(xv) Forensic Science;

(xvi) Biotechnology I;

(xvii) Biotechnology II;

(xviii) Physics for Engineering;

(xix) Scientific Research and Design;

(xx) Engineering Design and Problem Solving;

(xxi) Engineering Science;

(xxii) pursuant to the TEC, §28.025(b-5), after the successful completion of physics, a science course endorsed by an institution of higher education as a course for which the institution would award course credit or as a prerequisite for a course for which the institution would award course credit. The TEA shall maintain a current list of courses offered under this clause;

(xxiii) a locally developed science course or other activity, including an apprenticeship or training hours needed to obtain an industry-recognized credential or certificate that is developed pursuant to the TEC, §28.002(g-1); and

(xxiv) one credit of a two-credit IB science course selected from Chapter 112 of this title (relating to Texas Essential Knowledge and Skills for Science).

(4) Social studies--three credits.

(A) One credit must consist of United States History Studies Since 1877.

(B) One-half credit must consist of United States Government.

(i) Personal Financial Literacy; or

~~[(i) Economics with Emphasis on the Free Enterprise System and Its Benefits; or]~~

(ii) AP Business with Personal Finance.

~~[(ii) Personal Financial Literacy/Economics.]~~

(D) One credit must be selected from the following:

(i) World History Studies;

(ii) World Geography Studies; [or]

(iii) Economics with Emphasis on the Free Enterprise System and Its Benefits; or

(iv) [~~(iii)~~] a comparable AP or IB world history or world geography course that does not count toward another credit required for graduation.

(E) A comparable AP or IB social studies course selected from Chapter 113 of this title (relating to Texas Essential Knowledge and Skills for Social Studies) or an advanced level course offered as dual credit as referenced in §74.11(i) of this title (relating to High School Graduation Requirements) that does not count toward another credit required for graduation may satisfy a credit identified in subparagraphs (A), (B), (C), or (D) of this paragraph.

(5) Languages other than English (LOTE)--two credits.

(A) The credits may be selected from the following:

(i) any two levels in the same language, including comparable AP or IB language courses that do not count toward another credit required for graduation; or

(ii) two credits in computer programming languages, including computer coding, to be selected from Computer Science I, II, and III, AP Computer Science Principles, AP Computer Science A, IB Computer Science Standard Level, and IB Computer Science Higher Level.

(B) A single two-credit IB LOTE course may only satisfy one LOTE requirement.

(C) If a student, in completing the first credit of LOTE, demonstrates that the student is unlikely to be able to complete the second credit, the student may substitute another appropriate course as follows:

(i) Special Topics in Language and Culture;

(ii) World History Studies or World Geography Studies for a student who is not required to complete both by the local district;

(iii) another credit selected from Chapter 114 of this title (relating to Texas Essential Knowledge and Skills for Languages Other Than English); or

(iv) computer programming languages, including computer coding.

(D) The determination regarding a student's ability to complete the second credit of LOTE must be agreed to by:

(i) the teacher of the first LOTE credit course or another LOTE teacher designated by the school district, the principal or designee, and the student's parent or person standing in parental relation;

(ii) the student's admission, review, and dismissal (ARD) committee if the student receives special education services under the TEC, Chapter 29, Subchapter A; or

(iii) the committee established for the student under Section 504, Rehabilitation Act of 1973 (29 United States Code, Section 794) if the student does not receive special education services under the TEC, Chapter 29, Subchapter A, but is covered by the Rehabilitation Act of 1973.

(E) A student, who due to a disability, is unable to complete two credits in the same language in a language other than English, may substitute a combination of two credits that are not being used to satisfy another specific graduation requirement selected from English language arts, mathematics, science, or social studies or two credits in career and technical education for the LOTE credit requirements. The determination regarding a student's ability to complete the LOTE credit requirements will be made by:

(i) the student's ARD committee if the student receives special education services under the TEC, Chapter 29, Subchapter A; or

(ii) the committee established for the student under Section 504, Rehabilitation Act of 1973 (29 United States Code, Section 794) if the student does not receive special education services under the TEC, Chapter 29, Subchapter A, but is covered by the Rehabilitation Act of 1973.

(F) A student who successfully completes a dual language immersion/two-way or dual language immersion/one-way program in accordance with §89.1210(d)(3) and (4) of this title (relating to Program Content and Design), §89.1227 of this title (relating to Minimum Requirements for Dual Language Immersion Program Model), and §89.1228 of this title (relating to Two-Way Dual Language Immersion Program Model Implementation) at an elementary school may satisfy one credit of the two credits required in a language other than English.

(i) To successfully complete a dual language immersion program, a student must:

(I) have participated in a dual language immersion program for at least five consecutive school years;

(II) achieve high levels of academic competence as demonstrated by performance of meets or masters grade level on both the mathematics and reading State of Texas Assessments of Academic Readiness (STAAR®) in English or Spanish, as applicable, in at least one grade level; and

(III) achieve proficiency in both English and a language other than English as demonstrated by scores of proficient or higher in the reading and speaking domains on language proficiency or achievement tests in both languages.

(ii) The second credit of a language other than English must be in the same language as the successfully completed dual language immersion program.

(G) A student who successfully completes a course in American Sign Language while in elementary school may satisfy one credit of the two credits required in a language other than English.

(6) Physical education--one credit.

(A) The required credit may be selected from one full credit or a combination of two half credits from two different courses from the following courses:

(i) Lifetime Fitness and Wellness Pursuits;

(ii) Lifetime Recreation and Outdoor Pursuits; and

(iii) Skill-Based Lifetime Activities.

(B) In accordance with local district policy, the required credit may be earned through completion of any Texas essential knowledge and skills-based course that meets the requirement in subparagraph (E) of this paragraph for 100 minutes of moderate to vigorous physical activity per five-day school week and that is not being used to satisfy another specific graduation requirement.

(C) In accordance with local district policy, credit for any of the courses listed in subparagraph (A) of this paragraph may be earned through participation in the following activities:

(i) Athletics;

(ii) Junior Reserve Officer Training Corps (JROTC); and

(iii) appropriate private or commercially sponsored physical activity programs conducted on or off campus. The district must apply to the commissioner of education for approval of such programs, which may be substituted for state graduation credit in physical education. Such approval may be granted under the following conditions.

(I) Olympic-level participation and/or competition includes a minimum of 15 hours per week of highly intensive, professional, supervised training. The training facility, instructors, and the activities involved in the program must be certified by the superintendent to be of exceptional quality. Students qualifying and participating at this level may be dismissed from school one hour per day. Students dismissed may not miss any class other than physical education.

(II) Private or commercially sponsored physical activities include those certified by the superintendent to be of high quality and well supervised by appropriately trained instructors. Student participation of at least five hours per week must be required. Students certified to participate at this level may not be dismissed from any part of the regular school day.

(D) In accordance with local district policy, up to one credit for any one of the courses listed in subparagraph (A) of this paragraph may be earned through participation in any of the following activities:

(i) Drill Team;

(ii) Marching Band; and

(iii) Cheerleading.

(E) All substitution activities allowed in subparagraphs (B)-(D) of this paragraph must include at least 100 minutes per five-day school week of moderate to vigorous physical activity.

(F) Credit may not be earned more than once for the courses identified in subparagraph (A)(i) and (iii) of this paragraph. Credit may not be earned more than twice for the course identified in subparagraph (A)(ii) of this paragraph. No more than four substitution credits may be earned through any combination of substitutions allowed in subparagraphs (B)-(D) of this paragraph.

(G) A student who is unable to participate in physical activity due to disability or illness may substitute an academic elective credit (English language arts, mathematics, science, or social studies) or a course that is offered for credit as provided by the TEC, §28.002(g-1), for the physical education credit requirement. The determination regarding a student's ability to participate in physical activity will be made by:

(i) the student's ARD committee if the student receives special education services under the TEC, Chapter 29, Subchapter A;

(iii) a committee established by the school district of persons with appropriate knowledge regarding the student if each of the committees described by clauses (i) and (ii) of this subparagraph is inapplicable. This committee shall follow the same procedures required of an ARD or a Section 504 committee.

(7) Fine arts--one credit.

(A) The credit may be selected from the following courses subject to prerequisite requirements:

(i) Art, Level I, II, III, or IV;

(ii) Dance, Level I, II, III, or IV;

(iii) Music, Level I, II, III, or IV;

(iv) Music Studies;

(v) Theatre, Level I, II, III, or IV;

(vi) Musical Theatre, Level I, II, III, or IV;

(vii) Technical Theatre, Level I, II, III, or IV;

(viii) IB Film Standard or Higher Level;

(ix) Floral Design;

(x) Digital Art and Animation; and

(xi) 3-D Modeling and Animation.

(B) In accordance with local district policy, credit may be earned through participation in a community-based fine arts program not provided by the school district in which the student is enrolled. The district must apply to the commissioner of education for approval of such programs, which may be substituted for state graduation credit in fine arts. Approval may be granted if the fine arts program provides instruction in the essential knowledge and skills identified for a fine arts course as defined by Chapter 117, Subchapter C, of this title (relating to High School, Adopted 2013).

(c) Elective courses--five credits. The credits must be selected from the list of courses specified in §74.11(g) or (h) of this title (relating to High School Graduation Requirements) or from a locally developed course or activity developed pursuant to the TEC, §28.002(g-1), for which a student may receive credit and that does not satisfy a specific course requirement.

(d) Substitutions. No substitutions are allowed in the Foundation High School Program, except as specified in this chapter.

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 February 13, 2026.

TRD-202600669

Cristina De La Fuente-Valadez

Director, Rulemaking

Texas Education Agency

Earliest possible date of adoption: March 29, 2026

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

19 TAC §74.14

The State Board of Education (SBOE) proposes an amendment to §74.14, concerning performance acknowledgments. The proposed amendment would update the minimum score required for a performance acknowledgement on the SAT, align language related to ACT with language related to SAT, and add the Classic Learning Test® and PSAT 10 to appropriate performance acknowledgments.

BACKGROUND INFORMATION AND JUSTIFICATION: The SBOE adopted rules in 19 TAC Chapter 74, Subchapter B, to implement the Foundation High School Program effective July 8, 2014. In April 2018, the SBOE adopted an amendment to update the number of subject tests on the ACT Aspire™ examination that are required to earn a performance acknowledgement and to update the qualifying score on the SAT® exam to a single composite score of 1310. The Committee on Instruction was recently made aware that the amended language that was adopted in 2018 for SAT and ACT is inconsistent.

The proposed amendment would correct the inconsistency in references to SAT and ACT and would add the Classic Learning Test® to appropriate performance acknowledgments.

The proposed amendment would also add the PSAT 10 to the list of performance acknowledgements and change the minimum score required to earn a performance acknowledgment for the SAT from 1350 to 1340.

The SBOE approved the proposed amendment for first reading and filing authorization at its January 30, 2026 meeting.

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: Texas Education Agency (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 expand an existing regulation by permitting students to earn a performance acknowledgment related to the Classic Learning Test® and the PSAT 10.

The proposed rulemaking 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 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 to permit students to earn a performance acknowledgment related to the Classic Learning Test® and the PSAT 10 and to clarify that students may earn a performance acknowledgment for achieving at least a minimum score of 29 on the ACT Aspire™ examination or the ACT PreACT® examination. The proposal would also align the minimum scores required to earn a performance acknowledgment for the ACT and SAT by changing the required score for SAT from 1350 to 1340 in accordance with the ACT/SAT concordance table produced by the College Board and ACT. 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 or 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 amendment is proposed under Texas Education Code (TEC), §7.102(c)(4), which requires the State Board of Education (SBOE) to establish curriculum and graduation requirements; and TEC, §28.025(c-5), which requires the SBOE to adopt rules permitting a student to earn a performance acknowledgment on the student's transcript for outstanding performance in a dual credit course; in bilingualism and biliteracy; on a college advanced placement test or international baccalaureate examination; on an established, valid, reliable, and nationally norm-referenced preliminary college preparation assessment instrument used to measure a student's progress toward readiness for college and the workplace; on an established, valid, reliable, and nationally norm-referenced assessment instrument used by colleges and universities as part of their undergraduate admissions process; or for earning a state recognized or nationally or internationally recognized business or industry certification or license.

CROSS REFERENCE TO STATUTE. The amendment implements Texas Education Code, §7.102(c)(4) and §28.025(c-5).

§74.14. Performance Acknowledgments.

(a) A student may earn a performance acknowledgment on the student's transcript for outstanding performance in a dual credit course by successfully completing:

(1) at least 12 hours of college academic courses, including those taken for dual credit as part of the Texas core curriculum, and advanced technical credit courses, including locally articulated courses, with a grade of the equivalent of 3.0 or higher on a scale of 4.0; or

(2) an associate degree while in high school.

(b) A student may earn a performance acknowledgment on the student's transcript for outstanding performance in bilingualism and biliteracy as follows.

(1) A student may earn a performance acknowledgment by demonstrating proficiency in accordance with local school district grading policy in two or more languages by:

(A) completing all English language arts requirements and maintaining a minimum grade point average (GPA) of the equivalent of 80 on a scale of 100; and

(B) satisfying one of the following:

(i) completion of a minimum of three credits in the same language in a language other than English with a minimum GPA of the equivalent of 80 on a scale of 100; or

(ii) demonstrated proficiency in the Texas Essential Knowledge and Skills for Level IV or higher in a language other than English with a minimum GPA of the equivalent of 80 on a scale of 100; or

(iii) completion of at least three credits in foundation subject area courses in a language other than English with a minimum GPA of 80 on a scale of 100; or

(iv) demonstrated proficiency in one or more languages other than English through one of the following methods:

(I) a score of 3 or higher on a College Board Advanced Placement examination for a language other than English; or

(II) a score of 4 or higher on an International Baccalaureate examination for a higher-level languages other than English course; or

(III) performance on a national assessment of language proficiency in a language other than English of at least Intermediate High or its equivalent.

(2) In addition to meeting the requirements of paragraph (1) of this subsection, to earn a performance acknowledgment in bilingualism and biliteracy, an emergent bilingual student must also have:

(A) participated in and met the exit criteria for a bilingual or English as a second language (ESL) program; and

(B) scored at the Advanced High level on the Texas English Language Proficiency Assessment System (TELPAS).

(c) A student may earn a performance acknowledgment on the student's transcript for outstanding performance on a College Board Advanced Placement test or International Baccalaureate examination by earning:

(1) a score of 3 or above on a College Board Advanced Placement examination; or

(2) a score of 4 or above on an International Baccalaureate examination.

(d) A student may earn a performance acknowledgment on the student's transcript for outstanding performance on an established, valid, reliable, and nationally norm-referenced preliminary college preparation assessment instrument used to measure a student's progress toward readiness for college and the workplace or on an established valid, reliable, and nationally norm-referenced assessment instrument used by colleges and universities as part of their undergraduate admissions process by:

(1) earning a score on the Preliminary SAT/National Merit Scholarship Qualifying Test (PSAT/NMSQT®) or PSAT 10 that qualifies the student for recognition as a commended scholar or higher by the National Merit Scholarship Corporation or as an awardee of the National Recognition Programs of the College Board;

(2) earning a composite score of at least 442 on the ACT Aspire™ examination;

(3) earning a composite score of at least 29 on the ACT PreACT® examination;

(4) earning a total score of at least 101 on the Classic Learning Test® (CLT) 10;

(5) [~~(4)~~] earning a total score of at least 1340 [~~1350~~] on the SAT®; [or]

(6) [~~(5)~~] earning a composite score of at least 29 on the ACT® examination [~~of 29~~] (excluding the writing subscore); or[.]

(7) earning a total score of at least 96 on the CLT.

(e) A student may earn a performance acknowledgment on the student's transcript for earning a state-recognized or nationally or internationally recognized business or industry certification or license as follows.

(1) A student may earn a performance acknowledgment with:

(A) performance on an examination or series of examinations sufficient to obtain a nationally or internationally recognized business or industry certification; or

(B) performance on an examination sufficient to obtain a government-required credential to practice a profession.

(2) Nationally or internationally recognized business or industry certification shall be defined as an industry-validated credential that complies with knowledge and skills standards promulgated by a nationally or internationally recognized business, industry, professional, or government entity representing a particular profession or occupation that is issued by or endorsed by:

(A) a national or international business, industry, or professional organization;

(B) a state agency or other government entity; or

(3) Certifications or licensures for performance acknowledgements shall:

(A) be age appropriate for high school students;

(B) represent a student's substantial course of study and/or end-of-program knowledge and skills;

(C) include an industry-recognized examination or series of examinations, an industry-validated skill test, or demonstrated proficiency through documented, supervised field experience; and

(D) represent substantial knowledge and multiple skills needed for successful entry into a high-skill occupation.

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 February 13, 2026.

TRD-202600670

Cristina De La Fuente-Valadez

Director, Rulemaking

Texas Education Agency

Earliest possible date of adoption: March 29, 2026

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

SUBCHAPTER C. OTHER PROVISIONS

19 TAC §74.27

The State Board of Education (SBOE) proposes an amendment to §74.27, concerning innovative courses and programs. The proposed amendment would update the process for review and approval of proposed innovative courses and sunset of existing courses and would update requirements for implementation of approved innovative courses.

BACKGROUND INFORMATION AND JUSTIFICATION: After the SBOE adopted new rules concerning graduation requirements, the previously approved experimental courses were phased out as of August 31, 1998. Following the adoption of the Texas Essential Knowledge and Skills (TEKS), school districts now submit requests for innovative course approval for courses that do not have TEKS. The process outlined in §74.27 provides authority for the SBOE to approve innovative courses. Each year, the Texas Education Agency (TEA) provides the opportunity for school districts and other entities to submit applications for proposed innovative courses. TEA staff works with applicants to fine tune their applications, which are then submitted to the SBOE Committee on Instruction for consideration.

At the June 2023 meeting, the Committee on Instruction discussed an amendment to §74.27 to add a provision for the sunset of innovative courses that meet certain criteria. The board approved for first reading and filing authorization the proposed amendment to §74.27 at its August-September 2023 meeting. At the November 2023 SBOE meeting, the board approved for second reading and final adoption the proposed amendment to §74.27, which included as a criteria for consideration for sunset a provision that a course must have been approved for at least three years and meet at least one additional criteria. When TEA staff filed the rule as adopted with the Texas Register, the filing did not include the provision that a course must have been approved for at least three years and meet at least one additional criteria to be considered for sunset. The amendment became effective February 18, 2024. In order to correct the error made by TEA, the board adopted an additional amendment effective November 10, 2024.

At the September 2025 meeting, the Committee on Instruction discussed the innovative course approval process and asked TEA staff to prepare a possible amendment to the rule for the committee to consider. At the November 2025 SBOE meeting, a proposed amendment to §74.27 was presented for first reading and filing authorization to the Committee on Instruction and recommended for SBOE approval. Due to a procedural error, the item was not approved by the SBOE at its general meeting.

The proposed amendment would set more specific criteria for a course to be considered by the board as an innovative course; establish new timelines for SBOE action related to innovative courses; clarify requirements related to instructional materials for innovative courses; and adjust requirements for implementation of approved innovative courses.

The SBOE approved the proposed amendment for first reading and filing authorization at its January 30, 2026 meeting.

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 expand an existing regulation by setting more specific criteria for a course to be considered by the board as an innovative course, establishing new timelines for SBOE action related to innovative courses, and further clarifying other components of the rule.

The proposed rulemaking 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 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 to update the process for review and approval of proposed innovative courses and sunset of existing courses and to update requirements for implementation of approved innovative courses. 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 or 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 amendment is proposed under Texas Education Code, §28.002(f), which authorizes local school districts to offer courses in addition to those in the required curriculum for local credit and requires the State Board of Education to be flexible in approving a course for credit for high school graduation.

CROSS REFERENCE TO STATUTE. The amendment implements Texas Education Code, §28.002(f).

§74.27. Innovative Courses and Programs.

(a) A school district may offer innovative courses to enable students to master knowledge, skills, and competencies not included in the essential knowledge and skills of the required curriculum. After the State Board of Education (SBOE) approves an application for a new course or a renewal, a district shall obtain local board approval prior to offering the course.

(1) The SBOE [~~State Board of Education (SBOE)~~] may approve discipline-based courses in the foundation or enrichment curriculum and courses that do not fall within any of the subject areas listed in the foundation and enrichment curricula when the applying school district or organization demonstrates at least one of the following: [~~that the proposed course is academically rigorous and addresses documented student needs.~~]

(A) is academically rigorous and addresses documented student needs;

(B) applies to a specialized group of students such as students with disabilities or gifted/talented students;

(D) a need is identified in an emerging career and technical education (CTE) field or related to a regional program of study for a course that does not already exist as a Texas Essential Knowledge and Skills (TEKS)-based course.

(2) The SBOE shall take action related to innovative courses on the following timelines.

(A) An application window shall be made available every two years for new courses.

(B) For existing courses, at the appropriate three-year or four-year mark as described by paragraph (8) of this subsection, the SBOE shall:

(i) invite the applicant to submit updates to be considered as part of a renewal;

(ii) set the course for expiration; or

(iii) initiate a process for the course to become a TEKS-based course.

(C) Notice of an upcoming application opportunity shall be published on the SBOE website at least six months in advance of the start of the application window.

(D) Applications for new courses and renewals shall be posted on the Texas Education Agency (TEA) website for public comment at least 30 days prior to SBOE action.

(E) Applications for new courses and renewals shall be approved not later than the January SBOE meeting for implementation of a course in the subsequent school year.

(3) [~~(2)~~] Applications shall not be approved if the proposed course significantly duplicates the content of a TEKS-based [~~Texas Essential Knowledge and Skills (TEKS)-based~~] course or can reasonably be taught within an existing TEKS-based course.

(4) [~~(3)~~] To request approval from the SBOE, the applying school district or organization must submit a request for approval, including the following information, within the window designated by the SBOE [~~at least six months before planned implementation that includes~~]:

(A) a description of the course and its essential knowledge and skills;

(B) the rationale and justification for the request in terms of student need;

~~[(D) a description of activities, major resources, and materials to be used;]~~

(D) [~~(E)~~] the methods of evaluating student outcomes;

(E) [~~(F)~~] the qualifications of the teacher;

(F) [~~(G)~~] any training required in order to teach the course and any associated costs;

(G) [~~(H)~~] the amount of credit requested; and

(H) [~~(I)~~] a copy of or electronic access to any teacher resources and student-facing instructional materials required to teach [~~recommended instructional resources for~~] the course.

(5) [~~(4)~~] To request approval for a career and technical education innovative course, the applying school district or organization must submit with its request for approval evidence that the course is aligned with state and/or regional labor market data.

(6) [~~(5)~~] To request approval of a new innovative course, the applying school district or organization must submit with its request for approval evidence that the course has been successfully piloted in its entirety in at least one school in the state of Texas.

(7) [~~(6)~~] The requirements of paragraphs (4)(C) [~~(3)(C)~~] and (6) [~~(5)~~] of this subsection do not apply to the consideration of a course developed to support a program of study in career and technical education.

(8) [~~(7)~~] Newly approved innovative courses shall be approved for a period of three years, and courses approved for renewal shall be approved for a period of four [~~five~~] years.

(9) [~~(8)~~] Following SBOE approval, with [~~With~~] the approval of the local board of trustees, a school district may offer, without changes or deletions to the approved standards and instructional materials [~~content~~] , any state-approved innovative course.

(10) [~~(9)~~] TEA [~~Texas Education Agency~~] shall review all approved innovative courses once every year [~~two years~~] and provide for consideration for sunset a list of innovative courses that have been approved as an innovative course for at least three years and meet at least one of the following criteria:

(A) zero enrollment for the previous two years;

(B) average enrollment of less than 100 students statewide for the previous three years;

(C) student enrollment at an average of fewer than 20 districts or charter schools statewide for the previous three years;

(D) duplicative of another innovative or TEKS-based course; or

(E) approved for implementation as a TEKS-based course.

(b) An ethnic studies course that has been approved by the SBOE as an innovative course shall be considered by the SBOE at a subsequent meeting for inclusion in the TEKS.

(1) Only comprehensive ethnic studies courses in Native American studies, Latino studies, African American studies, and/or Asian Pacific Islander studies, inclusive of history, government, economics, civic engagement, culture, and science and technology, shall be considered by the SBOE.

(2) The chair of the Committee on Instruction, in accordance with SBOE Operating Rule 2.5(b), shall collaborate with the board chair to place the item on the next available Committee on Instruction agenda following SBOE approval of the innovative course.

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 February 13, 2026.

TRD-202600671

Cristina De La Fuente-Valadez

Director, Rulemaking

Texas Education Agency

Earliest possible date of adoption: March 29, 2026

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

CHAPTER 109. BUDGETING, ACCOUNTING, AND AUDITING

The State Board of Education (SBOE) proposes the repeal of §109.25 and amendments to §109.51 and §109.52, concerning budgeting, accounting, and auditing. The proposed repeal would remove §109.25, whose statutory authority, Texas Education Code (TEC), §48.104(j-1), (k), (l), (m), (n), and (o), was removed by House Bill (HB) 2, 89th Texas Legislature, Regular Session, 2025. The proposed amendments would align language in Subchapter D with TEC, §45.208, which no longer requires depository contracts to be submitted to the Texas Education Agency (TEA).

BACKGROUND INFORMATION AND JUSTIFICATION: Section 109.25 requires each school district and charter school to report financial information relating to the expenditure of the state compensatory education allotment under the Foundation School Program to TEA. HB 2, 89th Texas Legislature, Regular Session, 2025, repealed the SBOE's authority to direct how the state compensatory education allotment funds are spent and how the funds are reported to TEA. Therefore, the proposed repeal of §109.25 is necessary to implement HB 2.

Section 109.52 establishes the requirement that each school district select at least one bank as a depository and enter into a depository contract with the bank, providing the completed contract to TEA. Section 109.52 also establishes the requirement that a district provide a completed surety bond form to TEA if the depository bank uses a surety bond to secure district deposits. The section includes the depository contract form and surety bond form with the content prescribed by the SBOE. Senate Bill 1376, 86th Texas Legislature, 2019, repealed the requirement for districts to submit certain depository information to TEA. Therefore, §109.52 would be amended to remove filing requirements.

Section 109.51 would be amended to make non-substantive changes to align with language in §109.52.

The SBOE approved the proposed revisions for first reading and filing authorization at its January 30, 2026 meeting.

FISCAL IMPACT: Amy Copeland, associate commissioner for school finance, has determined that 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 repeal an existing regulation to remove a rule whose statutory authority has been removed. The proposed rulemaking would also limit an existing regulation to remove the requirement that school districts file certain documents with TEA.

The proposed rulemaking 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 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 to remove an outdated rule and clarify that the requirements and eligibility criteria for school districts and charter schools regarding the execution and management of depository contracts. This clarification promotes transparency, ensures compliance with statutory provisions, and supports sound financial practices in safeguarding public funds. 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 or 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.

SUBCHAPTER B. TEXAS EDUCATION AGENCY AUDIT FUNCTIONS

19 TAC §109.25

STATUTORY AUTHORITY. The repeal is proposed under House Bill 2, Section 7.24, 89th Texas Legislature, Regular Session, 2025, which amended Texas Education Code, §48.104, to repeal the authority of the State Board of Education to direct how the state compensatory education allotments funds are spent and how the expenditures are reported to the Texas Education Agency.

CROSS REFERENCE TO STATUTE. The repeal implements House Bill 2, Section 7.24, 89th Texas Legislature, Regular Session, 2025.

§109.25. State Compensatory Education Program Reporting and Auditing System.

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 February 13, 2026.

TRD-202600673

Cristina De La Fuente-Valadez

Director, Rulemaking

Texas Education Agency

Earliest possible date of adoption: March 29, 2026

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

SUBCHAPTER D. UNIFORM BANK BID OR REQUEST FOR PROPOSAL AND DEPOSITORY CONTRACT

19 TAC §109.51, §109.52

STATUTORY AUTHORITY. The amendments are proposed under Texas Education Code, §45.208, which requires that a school district use the depository contract prescribed by the State Board of Education and that the depository bank secure the highest daily amount of cash in the bank using a bond or other surety agreements.

CROSS REFERENCE TO STATUTE. The amendments implement Texas Education Code, §45.208.

§109.51. Uniform Depository Bank Bid or Proposal Form.

(a) At least 60 days before the end of the current depository contract, each school district must decide to use either competitive bidding or a request for proposals to choose a new depository.

(b) At least 30 days before the end of the current depository contract, the district must mail the uniform blank form for the selected process to each bank located in the district. The district must use either the uniform bid form specified in subsection (c) of this section or the uniform proposal form specified in subsection (d) of this section. The district may add other terms to the uniform bid or proposal form if the added terms do not unfairly restrict competition between banks as stated in [~~the~~] Texas Education Code, §45.206(b). The district must maintain [~~keep~~] the selected bid or proposal form [~~in the district~~] and make it available to the Texas Education Agency upon request.

Figure: 19 TAC §109.51(c) (No change.)

(d) This subsection provides the uniform proposal blank form, entitled "Proposal Form for Depository Services."

Figure: 19 TAC §109.51(d) (No change.)

§109.52. Uniform Depository Bank Contract and Surety Bond Forms.

(a) Each school district must use the uniform depository contract form as provided in subsection (b) of this section. The district must complete the form [~~and file it electronically with the Texas Education Agency (TEA)~~] as specified in [~~the~~] Texas Education Code (TEC), §45.208, and in accordance with filing instructions provided on the Texas Education Agency (TEA) [~~TEA~~] website. The district must maintain the selected bid or proposal form and make it available to TEA upon request.

(b) This subsection provides the uniform depository contract form, entitled "Depository Contract for Funds of Independent School Districts under the Texas Education Code, Chapter 45, Subchapter G, School District Depositories."

Figure: 19 TAC §109.52(b) (No change.)

(c) If a district's depository elects a surety bond to secure the district's deposit amounts less any applicable Federal Deposit Insurance Corporation insurance, the depository must complete the surety bond form provided in subsection (d) of this section, attach it to the contract, and file it with the district. The district must maintain [~~file~~] a copy of the contract and the surety bond form [~~with the TEA~~] as specified in [~~the~~] TEC, §45.208, and in accordance with filing instructions provided on the TEA website. The district must maintain a copy of the contract and the surety bond form and make it available to TEA upon request.

(d) This subsection provides the uniform surety bond form, entitled "Texas School Depository Surety Bond Form."

Figure: 19 TAC §109.52(d) (No change.)

(e) If [~~the~~] TEA receives a contract form and determines that it is incomplete, [~~the~~] TEA will notify the district.

(f) A district that has no current depository contract in force and filed with [~~the~~] TEA will receive its warrants from [~~the~~] TEA by US mail.

(g) For depository contract filing requirements for charter schools, refer to §100.1063 [~~§100.1043~~] of this title (relating to Status and Use of State Funds; Depository Contract).

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 February 13, 2026.

TRD-202600674

Cristina De La Fuente-Valadez

Director, Rulemaking

Texas Education Agency

Earliest possible date of adoption: March 29, 2026

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

SUBCHAPTER C. ADOPTIONS BY REFERENCE

19 TAC §109.41

The State Board of Education (SBOE) proposes an amendment to §109.41, concerning financial accounting guidelines. The proposed amendment would adopt by reference the updated Financial Accountability System Resource Guide (FASRG), which includes annual updates and removes information related to the compensatory education allotment to align with House Bill (HB) 2, 89th Texas Legislature, Regular Session, 2025.

BACKGROUND INFORMATION AND JUSTIFICATION: The FASRG describes the rules of financial accounting for school districts, charter schools, and education service centers and is adopted by reference under §109.41. Revisions to the FASRG would align the content with current governmental accounting and auditing standards, remove obsolete requirements, and remove descriptions and discussions of best practices and other non-mandatory elements.

Requirements for financial accounting and reporting are derived from generally accepted accounting principles (GAAP). School districts and charter schools are required to adhere to GAAP. Legal and contractual considerations typical of the government environment are reflected in the fund structure basis of accounting.

An important function of governmental accounting systems is to enable administrators to assure and report on compliance with finance-related legal provisions. This assurance and reporting process means that the accounting system and its terminology, fund structure, and procedures must be adapted to satisfy finance-related legal requirements. However, the basic financial statements of school districts and charter schools should be prepared in conformity with GAAP.

School district and governmental charter school accounting systems shall use the accounting code structure presented in the Account Code Structure section of Module 1 of the FASRG and nonprofit charter school accounting systems shall use the accounting code structure presented in the Accounting Code Structure section of Module 2 of the FASRG. Funds shall be classified and identified on required financial statements by the same code number and terminology provided in the Account Code section of Module 1 FAR Appendices for school districts and governmental charter schools and Module 3 of the FASRG for nonprofit charter schools.

State law provides authority for both the SBOE and the commissioner to adopt rules on financial accounting. To accomplish this, the SBOE and the commissioner each adopt the FASRG by reference under separate rules. The SBOE adopts the FASRG by reference under §109.41, and the commissioner adopts the FASRG by reference under §109.5001.

The following changes would be made to FASRG Modules 1 through 6.

Module 1, Financial Accounting and Reporting (FAR) and FAR Appendices

Module 1 aligns with current governmental accounting standards. Proposed Module 1 would include the following changes. Updates would be made to accounting codes and accounting guidance, including the removal of several program intent codes related to state compensatory education, and previous guidance would be clarified, including additional information on shared services arrangements. School districts and charter schools would be required to maintain proper budgeting and financial accounting and reporting systems. In addition, school districts would be required to establish principles and policies to ensure uniformity in accounting in conformity with GAAP established by the Governmental Accounting Standards Board (GASB).

Module 2, Special Supplement - Charter Schools

Module 2 aligns with current financial accounting reporting standards. Proposed Module 2 would include the following changes. Updates would be made to accounting codes and accounting guidance, and previous guidance would be clarified. The proposed module would establish financial and accounting requirements for Texas public charter schools to ensure uniformity in accounting in conformity with GAAP. The proposed module would also include current guidance that complements the American Institute of Certified Public Accountants (AICPA) Audit and Accounting Guide, State and Local Governments and supplements the Government Auditing Standards of the United States Government Accountability Office (GAO). These requirements facilitate preparation of financial statements that conform to GAAP established by the Financial Accounting Standards Board (FASB).

Module 3, Special Supplement - Non-profit Charter Schools Chart of Accounts

Module 3 aligns with current financial accounting standards. Proposed Module 3 would include the following changes. Updates would be made to accounting codes and accounting guidance, including the removal of several program intent codes related to state compensatory education, and previous guidance would be clarified. Charter schools would be required to maintain proper budgeting and financial accounting and reporting systems that are in conformity with Texas Education Data Standards in the Texas Student Data Systems Public Education Information Management System. In addition, charter schools would be required to establish principles and policies to ensure uniformity in accounting in conformity with GAAP established by the FASB. The proposed module would also include current auditing guidance that complements the AICPA Audit and Accounting Guide, State and Local Governments and supplements the Government Auditing Standards of the United States GAO. These requirements facilitate preparation of financial statements that conform to GAAP established by the FASB.

Module 4, Auditing

Module 4 aligns with current auditing standards. Proposed Module 4 would include the following changes. Updates would be made to accounting codes and accounting guidance, and previous guidance would be clarified. The proposed module would establish auditing requirements for Texas public school districts and charter schools and include current requirements from TEC, §44.008, as well as Code of Federal Regulations, Title 2, Part 200, Subpart F, Audit Requirements, that implement the federal Single Audit Act. The proposed module would also include current auditing guidance that complements the AICPA Audit and Accounting Guide, State and Local Governments and supplements the Government Auditing Standards of the United States GAO. These requirements facilitate preparation of financial statements that conform to GAAP established by the GASB.

Module 5, Purchasing

Module 5 aligns with current purchasing laws and standards. Proposed Module 5 would include the following changes. Updates would be made to purchasing guidance that has changed from previous legislation, including an increase in the purchasing threshold from $50,000 to $100,000 for procurement requirements. Purchasing rules that needed additional explanation would be clarified. School districts and charter schools would be required to establish procurement policies and procedures that align with their unique operating environment and ensure compliance with relevant statutes and policies.

Module 6, Compensatory Education, Guidelines, Financial Treatment, and an Auditing and Reporting System

Module 6, which provides information to assist school districts and charter schools with using the state compensatory education allotment, would be deleted because HB 2, 89th Texas Legislature, Regular Session, 2025, repealed TEC, §48.104(j-1) and (k)-(o), which set requirements for using the allotment.

The FASRG is posted on the Texas Education Agency (TEA) website at https://tea.texas.gov/finance-and-grants/financial-accountability/financial-accountability-system-resource-guide.

The SBOE approved the proposed amendment for first reading and filing authorization at its January 30, 2026 meeting.

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 expand and limit an existing regulation. The proposal would amend requirements and provide updated governmental accounting and auditing standards. In some instances, the proposed changes would add information, and in some instances, information would be removed.

The proposed rulemaking 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 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 to ensure that the provisions of the FASRG align with current governmental accounting and auditing standards for school districts and charter schools. 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 or 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 amendment is proposed under Texas Education Code (TEC), §7.102(c)(32), which requires the State Board of Education (SBOE) to adopt rules concerning school district budgets and audits of school district fiscal accounts as required under TEC, Chapter 44, Subchapter A; TEC, §44.001(a), which requires the commissioner to establish advisory guidelines relating to the fiscal management of a school district. TEC, §44.001(b), requires the commissioner to report annually to the SBOE the status of school district fiscal management as reflected by the advisory guidelines and by statutory requirements; TEC, §44.007(a), which requires the board of trustees of each school district to adopt and install a standard school fiscal accounting system that conforms with generally accepted accounting principles. TEC, §44.007(b), requires the accounting system to meet at least the minimum requirements prescribed by the commissioner, subject to review and comment by the state auditor. TEC, §44.007(c), requires a record to be kept of all revenues realized and of all expenditures made during the fiscal year for which a budget is adopted. A report of the revenues and expenditures for the preceding fiscal year is required to be filed with the agency on or before the date set by the SBOE. TEC, §44.007(d), requires each district, as part of the report required by TEC, §44.007, to include management, cost accounting, and financial information in a format prescribed by the SBOE in a manner sufficient to enable the board to monitor the funding process and determine educational system costs by district, campus, and program; and TEC, §44.008(b), which requires the independent audit to meet at least the minimum requirements and be in the format prescribed by the SBOE, subject to review and comment by the state auditor. The audit must include an audit of the accuracy of the fiscal information provided by the district through the Public Education Information Management System.

CROSS REFERENCE TO STATUTE. The amendment implements Texas Education Code, §§7.102(c)(32); 44.001(a) and (b); 44.007(a)-(d); and 44.008(b).

§109.41. Financial Accountability System Resource Guide.

The rules for financial accounting are described in the official Texas Education Agency (TEA) publication Financial Accountability System Resource Guide, Version 20 [19], which is adopted by this reference as the agency's official rule. A copy is available on the TEA website with information related to financial compliance.

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 February 13, 2026.

TRD-202600672

Cristina De La Fuente-Valadez

Director, Rulemaking

Texas Education Agency

Earliest possible date of adoption: March 29, 2026

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

SUBCHAPTER EE. COMMISSIONER'S RULES CONCERNING FINANCIAL ACCOUNTING GUIDELINES

19 TAC §109.5001

The Texas Education Agency (TEA) proposes an amendment to §109.5001, concerning financial accounting guidelines. The proposed amendment would adopt by reference the Financial Accountability System Resource Guide (FASRG), Version 20, which would include annual updates and remove information related to the compensatory education allotment to align with House Bill (HB) 2, 89th Texas Legislature, Regular Session, 2025.

BACKGROUND INFORMATION AND JUSTIFICATION: The FASRG describes the rules of financial accounting for school districts, charter schools, and education service centers and is adopted by reference under §109.5001. Revisions to the FASRG would align the content with current governmental accounting and auditing standards, remove obsolete requirements, and remove descriptions and discussions of best practices and other non-mandatory elements.

School district and governmental charter school accounting systems shall use the accounting code structure presented in the Account Code Structure section of Module 1 of the FASRG, and nonprofit charter school accounting systems shall use the accounting code structure presented in the Accounting Code Structure section of Module 2 of the FASRG. Funds shall be classified and identified on required financial statements by the same code number and terminology provided in the Account Code section of Module 1 FAR Appendices for school districts and governmental charter schools and Module 3 of the FASRG for nonprofit charter schools.

The FASRG, Version 20, contains six modules on the following topics: Module 1, Financial Accounting and Reporting (FAR) and FAR Appendices; Module 2, Special Supplement - Charter Schools; Module 3, Special Supplement - Non-profit Charter Schools Chart of Accounts; Module 4, Auditing; Module 5, Purchasing; and Module 6, Compensatory Education, Guidelines, Financial Treatment, and an Auditing and Reporting System.

State law provides authority for both the State Board of Education (SBOE) and the commissioner to adopt rules on financial accounting. To accomplish this, the SBOE and the commissioner each adopt the FASRG by reference under separate rules. The SBOE adopts the FASRG by reference under 19 TAC §109.41, and the commissioner adopts the FASRG by reference under §109.5001.

The following changes would be made to FASRG Modules 1-6.

Module 1, Financial Accounting and Reporting (FAR) and FAR Appendices

Module 2, Special Supplement - Charter Schools

Module 3, Special Supplement - Non-profit Charter Schools Chart of Accounts

Module 3 aligns with current financial accounting standards. Proposed Module 3 would include the following changes. Updates would be made to accounting codes and accounting guidance, including the removal of several program intent codes related to state compensatory education, and previous guidance would be clarified. Charter schools would be required to maintain proper budgeting and financial accounting and reporting systems that are in conformity with Texas Education Data Standards in the Texas Student Data System Public Education Information Management System. In addition, charter schools would be required to establish principles and policies to ensure uniformity in accounting in conformity with GAAP established by the FASB. The proposed module would also include current auditing guidance that complements the AICPA Audit and Accounting Guide, State and Local Governments and supplements the Government Auditing Standards of the United States GAO. These requirements facilitate preparation of financial statements that conform to GAAP established by the FASB.

Module 4, Auditing

Module 5, Purchasing

Module 6, Compensatory Education, Guidelines, Financial Treatment, and an Auditing and Reporting System

The FASRG is posted on the TEA website at https://tea.texas.gov/finance-and-grants/financial-accountability/financial-accountability-system-resource-guide.

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.

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 expand and limit an existing regulation. The proposal would amend requirements and provide updated governmental accounting and auditing standards. In some instances, the proposed changes would add information, and in some instances, information would be removed.

The proposed rulemaking 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 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 to ensure that the provisions of the FASRG align with current governmental accounting and auditing standards for school districts and charter schools. 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 February 27, 2026, and ends March 30, 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 February 27, 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 Texas Education Code (TEC), §7.055(b)(32), which requires the commissioner of education to perform duties in connection with the public school accountability system as prescribed by TEC, Chapters 39 and 39A; TEC, §44.001(a), which requires the commissioner to establish advisory guidelines relating to the fiscal management of a school district; TEC, §44.001(b), which requires the commissioner to report annually to the State Board of Education (SBOE) the status of school district fiscal management as reflected by the advisory guidelines and by statutory requirements; TEC, §44.007(a), which requires the board of trustees of each school district to adopt and install a standard school fiscal accounting system that conforms with generally accepted accounting principles; TEC, §44.007(b), which requires the accounting system to meet at least the minimum requirements prescribed by the commissioner, subject to review and comment by the state auditor; TEC, §44.007(c), which requires a record to be kept of all revenues realized and of all expenditures made during the fiscal year for which a budget is adopted. A report of the revenues and expenditures for the preceding fiscal year is required to be filed with the agency on or before the date set by the SBOE; TEC, §44.007(d), which requires each district, as part of the report required by TEC, §44.007, to include management, cost accounting, and financial information in a format prescribed by the SBOE in a manner sufficient to enable the board to monitor the funding process and determine educational system costs by district, campus, and program; and TEC, §44.008(b), which requires the independent audit to meet at least the minimum requirements and be in the format prescribed by the SBOE, subject to review and comment by the state auditor. The audit must include an audit of the accuracy of the fiscal information provided by the district through the Texas Student Data System Public Education Information Management System.

CROSS REFERENCE TO STATUTE. The amendment implements Texas Education Code, §§7.055(b)(32); 44.001(a) and (b); 44.007(a)-(d); and 44.008(b).

§109.5001. Financial Accountability System Resource Guide.

The rules for financial accounting are described in the official Texas Education Agency (TEA) publication Financial Accountability System Resource Guide, Version 20 [19] , which is adopted by this reference as the agency's official rule. A copy is available on the TEA website with information related to financial compliance.

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 February 13, 2026.

TRD-202600675

Cristina De La Fuente-Valadez

Director, Rulemaking

Texas Education Agency

Earliest possible date of adoption: March 29, 2026

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