(a) Student eligibility. To be considered educationally disadvantaged in order to be counted to generate the compensatory education allotment pursuant to Texas Education Code (TEC), §48.104, a student must meet the income requirements for eligibility under the National School Lunch Program (NSLP), authorized by 42 United States Code, §§1751, et seq. School districts and open-enrollment charter schools may use the following approved methods for the purpose of receiving the compensatory education allotment pursuant to TEC, §48.104:
  (1) parent certification, where the parent or guardian asserts meeting the income requirements for eligibility under this subsection;
  (2) direct certification, where the process by which eligible children are certified for free meals without the need for a household application based on household participation in one or more federal assistance programs; or
  (3) direct verification, where public records are used to verify a student's eligibility for free or reduced-price meals when verification of student eligibility is required.
(b) Student eligibility under the alternative method. In order to calculate the formula transition grant pursuant to TEC, §48.277, and §61.1011 of this title (relating to Formula Transition Grant), for purposes of calculating the compensatory education allotment under TEC, §42.152, as that section existed prior to House Bill 3, 86th Texas Legislature, 2019, school districts and open-enrollment charter schools with one or more campuses not participating in the NSLP may derive an eligible student count by an alternative method.
  (1) To be considered educationally disadvantaged in order to be counted for compensatory education funding using the alternative method, a student must meet the income requirements for eligibility under the NSLP.
  (2) The total number of eligible students is the average of the best six months' count of students in accordance with paragraph (1) of this subsection. For school districts and open-enrollment charter schools in the first year of operation, the count is taken from the current school year. For all others, the count is from the preceding school year.
  (3) For the purposes of receiving compensatory education funding under this subsection, school districts and open-enrollment charter schools must apply and adhere to reporting procedures.
    (A) The commissioner of education will make available to school districts and open-enrollment charter schools appropriate income eligibility guidelines and application and reporting forms. The number of eligible students in accordance with paragraph (1) of this subsection will be reported on a monthly basis to the Texas Education Agency (TEA) in a manner and with a deadline specified by the commissioner.
    (B) School districts and open-enrollment charter schools must request prior approval from the commissioner to claim students receiving a full-time virtual education through the state virtual school network in their counts of educationally disadvantaged students. The request must include a plan detailing the enhanced services to be delivered to full-time state virtual school network students and submitted in a manner and with a deadline specified by the commissioner.
(c) Community Eligibility Provision (CEP). School districts and open-enrollment charter schools with one or more campuses using the CEP must still determine each student's individual eligibility status under the income guidelines for the NSLP for purposes of the compensatory education allotment.
(d) Provisions for students participating in virtual learning in the 2021-2022 school year. For the 2021-2022 school year, students identified as educationally disadvantaged and designated in the Texas Student Data System Public Education Information Management System (TSDS PEIMS) with average daily attendance (ADA) eligibility code 9, Enrolled, Not in Membership Due to Virtual Learning, will generate state compensatory education funds and applicable weight as determined by their census block group number.
(e) Recordkeeping. School districts and open-enrollment charter schools that receive compensatory education program funding pursuant to this section are responsible for obtaining the appropriate data from families of potentially eligible students, verifying that information, and retaining records.
(f) Auditing procedures. The TEA will conduct an audit of data submitted by school districts and open-enrollment charter schools that receive compensatory education program funding pursuant to this section approximately every five years or on an alternative schedule adopted at the discretion of the commissioner.
(g) Data source. The compensatory education allotment will be based on each student census block group submitted by school districts and open-enrollment charter schools in the TSDS PEIMS Fall submission. A census block group number must be submitted for every educationally disadvantaged student and each student coded with ADA eligibility code 9, except those students who are homeless, not enrolled, or otherwise ineligible for ADA or who reside in a residential facility and whose parents live outside the district.

Source Note: The provisions of this §61.1027 adopted to be effective December 2, 2001, 26 TexReg 9619; amended to be effective May 17, 2016, 41 TexReg 3478; amended to be effective July 21, 2020, 45 TexReg 4971; amended to be effective April 19, 2022, 47 TexReg 2011