(a) In this section, “program” means the Rural Pathway Excellence Partnership (R-PEP) program.
(b) The commissioner shall establish and administer the Rural Pathway Excellence Partnership (R-PEP) program to incentivize and support multidistrict, cross-sector, rural college and career pathway partnerships that expand opportunities for underserved students to succeed in school and life while promoting economic development in rural areas.

(b-1) The commissioner shall ensure that agency employees assigned to administer the program have experience with or training in the procedures relating to a school district contracting to partner to operate a district campus under § 11.174.
(c) The program must enable an eligible school district that has fewer than 1,600 students in average daily attendance to partner with at least one other school district located within a distance of 100 miles to offer a broader array of robust college and career pathways. Each partnership must:
(1) offer college and career pathways that align with regional labor market projections for high-wage, high-demand careers; and
(2) be managed by a coordinating entity that:
(A) has or will have at the time students are served under the partnership the capacity to effectively coordinate the partnership;
(B) has entered into a performance agreement approved by the board of trustees of each partnering school district that confers on the coordinating entity the same authority with respect to pathways offered under the partnership provided to an entity that contracts to operate a district campus under § 11.174;
(C) is an eligible entity as defined by § 12.101(a); and
(D) has on the entity’s governing board as either voting or ex officio members, or has on an advisory body, representatives of each partnering school district and members of regional higher education and workforce organizations.
(d) The performance agreement described by Subsection (c)(2)(B) must:
(1) include ambitious and measurable performance goals and progress measures tied to current college, career, and military readiness outcomes and longitudinal postsecondary completion and employment-related outcomes;
(2) allocate responsibilities for accessing and managing progress and outcome information and annually publish that information on the Internet website of each partnering district and the coordinating entity;
(3) authorize the coordinating entity to optimize the value of each college and career pathway offered through the partnership by:
(A) determining scheduling;
(B) adding or removing a pathway;
(C) selecting and assigning pathway-specific personnel;
(D) developing and exercising final approval of pathway budgets, which must include at least 80 percent of the state and local funding to which each partnering school district is entitled under Sections 48.106, 48.110, and 48.118; and
(E) determining any other matter critical to the efficacy of the pathways; and
(4) provide that any eligible student enrolled in a partnering school district may participate in a college or career pathway offered through the partnership.
(e) An employee of a coordinating entity that manages a partnership under the program is eligible for membership in and benefits from the Teacher Retirement System of Texas if the employee would be eligible for membership and benefits by holding a similar position at a partnering school district. An employee is eligible for membership under this subsection if a partnership would be authorized to participate in the program, as determined by the commissioner, but for the maximum expenditure established in § 48.118(f).
(f) A student enrolled in a college or career pathway offered through a partnership under the program is not considered for accountability purposes under Chapter 39 to have dropped out of high school or failed to complete the curriculum requirements for high school graduation until the sixth anniversary of the student’s first day in high school.
(g) A school district proposing to enter into a performance agreement under this section shall notify the commissioner of the district’s intent to enter into the agreement. The commissioner shall establish procedures for a district to notify the commissioner, including establishing the period within which notification is required before the school year in which the proposed agreement would take effect, and to provide any additional information required by the commissioner.
(h) In authorizing partnerships to participate in the program, the commissioner shall give priority to partnerships in which participating districts contract with a coordinating entity that has at least two years’ experience or employs an executive officer with at least two years’ experience managing college and career pathways under a performance contract.
(i) Not later than the 60th day after the date the commissioner receives notification of a proposed agreement and all other information required by the commissioner, the commissioner shall notify the school districts whether the proposed performance agreement is approved and the partnering districts are authorized for participation in the program.
(j) The commissioner shall make grants available for use by a coordinating entity for a two-year period to assist with costs associated with the planning, development, establishment, or expansion, as applicable, of partnerships under the program using a portion of state funds allocated under § 48.118 as well as money appropriated for that purpose, federal funds, and any other funds available. The commissioner may award a grant only to a coordinating entity that has entered into a performance agreement approved under Subsection (i) or, if in the planning stage, has entered into a memorandum of understanding to enter into a performance agreement, unless the source of funds does not permit a grant to the coordinating entity, in which case the grant shall be made to a participating school district acting as fiscal agent. Eligible use of grant funds shall include planning, development, establishment, or expansion of partnerships under the program. The commissioner may use not more than 15 percent of the money allocated for the grants to cover the cost of administering grants awarded under the program and to provide technical assistance and support to partnerships under the program.
(k) The commissioner shall adopt rules as necessary to implement this section, including rules establishing:
(1) requirements of a performance agreement between participating districts and the coordinating entity;
(2) the period during which a partnership under the program may operate after receiving commissioner approval and before a renewal of commissioner authorization is required; and
(3) performance standards for a renewal of commissioner authorization to participate in the program.
(l) This section does not prohibit an agreement between a school district and another entity for the provision of services at a district campus.
(m) The commissioner may accept gifts, grants, and donations from any source, including private and nonprofit organizations, for the program. A private or nonprofit organization that contributes to the program may receive an award under § 7.113.