PEG Letter 2001

Action Required

November 12, 2001


Enclosed is a list of schools identified under the Public Education Grant (PEG) Program, authorized under Texas Education Code, Chapter 29, Subchapter G, 29.201 - 29.205, and a description of the methodology used to identify the schools on the list. This list, effective for the 2002–03 school year, identifies campuses at which 50 percent or more of the students did not pass TAAS in any two of the preceding three years or were rated Low-performing in any of the preceding three years under the statewide accountability system.

Under the Public Education Grant interdistrict transfer provision, a parent of a student enrolled in any of the campuses listed may make application to attend a campus in any other school district for the 2002–03 school year. A school district chosen by a student's parent under this statute is entitled to accept or reject the application for the student to attend school in that district but may not use criteria that discriminate on the basis of a student's race, ethnicity, academic achievement, athletic abilities, language proficiency, sex, or socioeconomic status. Alternatively, a district may accept interdistrict transfers under Section 25.036 of the Texas Education Code. Civil Action 5281 may also limit the ability of districts to accept students to the extent the minority or majority of a school's population, based on ADA, changes by more than one percent.

Requirements related to the PEG program concerning the identification criteria, student eligibility, effective dates, notification dates, and funding allotments, are shown below:

Requirement Explanation
Allotment For interdistrict transfers, the district educating the child receives an additional weight of 0.1; supplemental funding if costs exceed state aid benefit; limited to net students educated on PEG
Continued Student Eligibility for Interdistrict Transfer Student eligibility for PEG transfers is based on assignment to attend a PEG campus in the district of residence. Student eligibility expires upon any of the following three conditions:
  • Completion of all grades on the campus upon which eligibility was originally based
  • Removal of the campus from the PEG list
  • Assignment of the student to a campus that is not on the PEG list as a result of redrawn attendance boundaries or the student moves into a different attendance area

A student can continue to be treated as PEG eligible after expiration of eligibility only if the student has not yet completed all grades on the campus to which the student transferred during the eligibility period.

Effective Date of PEG Transfers 2002–03 school year
Interdistrict Transfers  may be refused or accepted by district receiving the transfer request
Intradistrict Transfers  explicitly permitted, although no additional funding is allotted for this type of transfer
Parent Notification Requirement  February 1, 2002
School Identification Criteria  TAAS passing rate < 50% in two of the three preceding years OR rated Low-performing in any of the three preceding years
Transfer Restriction  student may only transfer from a PEG school to a non-PEG school
Tuition Prohibition  Tuition may not be charged to the student's parents/guardian or to the school district of residence.


Notification of eligibility must be provided by February 1, 2002 to each parent of a student in the district assigned to attend a school on the enclosed 2002–03 PEG list. All parental notifications must occur through letters to each student's family. The notice must contain a clear, concise explanation of the Public Education Grant Program and how the parent may obtain further information about pursuing a transfer.

Because of the manner in which funding takes place using a weight of 0.1, no separate worksheet will be needed to calculate the PEG amount. The district providing educational services to the student will report attendance as it would for any other student. The worksheet for calculation of state aid, which can be found on the TEA web site ( under the school finance topic, has been modified to include the PEG funding weight. There are no special accounting requirements or limitations on the use of PEG-related funds. Rules governing access to supplemental funding for districts with property wealth per weighted student above the guaranteed level in TEC 42.302 have been adopted and can be found in 19 TAC 61.1011. Bear in mind that a district is eligible to receive PEG weighted funding only to the extent the number of students accepted on the basis of a PEG exceeds the number of resident students who are educated in other districts on a PEG.

Questions concerning the list and the methodology used to identify schools should be directed to the Division of Performance Reporting at (512) 463-9704. Questions regarding the implementation of the program should be directed to the Division of State Funding at (512) 463-9238.

Ron McMichael, Deputy Commissioner
Finance and Accountability


The PEG List

MS Word Versions of this letter and enclosure and the list are available for download.


Other letters and correspondence can be found on the TEA Correspondence page.