(a) In this chapter, average daily attendance is:
(1) the quotient of the sum of attendance for each day of the minimum number of days of instruction as described under § 25.081(a) divided by the minimum number of days of instruction;
(2) for a district that operates under a flexible year program under § 29.0821, the quotient of the sum of attendance for each actual day of instruction as permitted by § 29.0821(b)(1) divided by the number of actual days of instruction as permitted by § 29.0821(b)(1);
(3) for a district that operates under a flexible school day program under § 29.0822, the average daily attendance as calculated by the commissioner in accordance with Sections 29.0822(d) and (d-1); or
(4) for a district that operates a half-day program or a full-day program under § 29.153(c), one-half of the average daily attendance calculated under Subdivision (1).
(b) A school district that experiences a decline of two percent or more in average daily attendance shall be funded on the basis of:
(1) the actual average daily attendance of the preceding school year, if the decline is the result of the closing or reduction in personnel of a military base; or
(2) subject to Subsection (e), an average daily attendance not to exceed 98 percent of the actual average daily attendance of the preceding school year, if the decline is not the result of the closing or reduction in personnel of a military base.

(c) The commissioner shall adjust the average daily attendance of a school district that has a significant percentage of students who are migratory children as defined by 20 U.S.C. § 6399.
(d) The commissioner may adjust the average daily attendance of a school district in which a disaster, flood, extreme weather condition, fuel curtailment, or other calamity has a significant effect on the district’s attendance. In addition to providing the adjustment for the amount of instructional days during the semester in which the calamity first occurred, an adjustment under this section may only be provided based on a particular calamity for an additional amount of instructional days equivalent to one school year. The commissioner may divide the adjustment between two consecutive school years.
(e) For each school year, the commissioner shall adjust the average daily attendance of school districts that are entitled to funding on the basis of an adjusted average daily attendance under Subsection (b)(2) so that:
(1) all districts are funded on the basis of the same percentage of the preceding year’s actual average daily attendance; and
(2) the total cost to the state does not exceed the amount specifically appropriated for that year for purposes of Subsection (b)(2).
(f) An open-enrollment charter school is not entitled to funding based on an adjustment under Subsection (b)(2).
(g) If a student may receive course credit toward the student’s high school academic requirements and toward the student’s higher education academic requirements for a single course, including a course provided under § 28.009 by a public institution of higher education, the time during which the student attends the course shall be counted as part of the minimum number of instructional hours required for a student to be considered a full-time student in average daily attendance for purposes of this section.
(g-1) The commissioner shall adopt rules to calculate average daily attendance for students participating in a blended learning program in which classroom instruction is supplemented with applied workforce learning opportunities, including participation of students in internships, externships, and apprenticeships.
(h) Subject to rules adopted by the commissioner under § 48.007(b), time that a student participates in an off-campus instructional program approved under § 48.007(a) shall be counted as part of the minimum number of instructional hours required for a student to be considered a full-time student in average daily attendance for purposes of this section.
(i) A district or a charter school operating under Chapter 12 that operates a prekindergarten program is eligible to receive one-half of average daily attendance under Subsection (a) if the district’s or charter school’s prekindergarten program provides at least 32,400 minutes of instructional time to students.
(j) A district or charter school is eligible to earn full average daily attendance under Subsection (a) if the district or school provides at least 43,200 minutes of instructional time to students enrolled in:
(1) a dropout recovery school or program operating under § 12.1141(c) or § 39.0548;
(2) an alternative education program operating under § 37.008;
(3) a school program located at a day treatment facility, residential treatment facility, psychiatric hospital, or medical hospital;
(4) a school program offered at a correctional facility; or
(5) a school operating under Subchapter G, Chapter 12.
(k) A charter school operating under a charter granted under Chapter 12 before January 1, 2015, is eligible to earn full average daily attendance under Subsection (a), as that subsection existed immediately before January 1, 2015, for:
(1) all campuses of the charter school operating before January 1, 2015; and
(2) any campus or site expansion approved on or after January 1, 2015, provided that the charter school received an academic accountability performance rating of C or higher, and the campus or site expansion is approved by the commissioner.
(l) A school district campus or charter school described by Subsection (j) may operate more than one program and be eligible for full average daily attendance for each program if the programs operated by the district campus or charter school satisfy all applicable state and federal requirements.
(m) The commissioner shall adopt rules necessary to implement this section, including rules that:
(1) establish the minimum amount of instructional time per day that allows a school district or charter school to be eligible for full average daily attendance, which may differ based on the instructional program offered by the district or charter school;
(2) establish the requirements necessary for a school district or charter school to be eligible for one-half of average daily attendance, which may differ based on the instructional program offered by the district or charter school;
(3) proportionally reduce the average daily attendance for a school district if any campus or instructional program in the district provides fewer than the required minimum minutes of instruction to students; and
(4) allow a grade or course repeated under § 28.02124 to qualify for average daily attendance even if the student previously passed or earned credit for the grade or course, if the grade or course would otherwise be eligible.
(n) To assist school districts in implementing this section as amended by H.B. 2442, Acts of the 85th Legislature, Regular Session, 2017, the commissioner may waive a requirement of this section or adopt rules to implement this section.