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HB 2 and PEIMS guide

What changes under HB 2 intensity of service funding

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The short version

House Bill 2 (Article 4) and Senate Bill 568, passed in the 89th Regular Session, changed how Texas funds special education. The state is moving from a system based on instructional arrangement or setting to a service intensity model, so that a student's documented needs drive funding, not where services happen.

What replaces instructional arrangements

  • Tiers of intensity. The law sets eight tiers, including one for speech therapy only and one for residential placement. The commissioner's rule, 19 TAC §89.1121 (effective Oct 4, 2026), describes all eight, and TEA develops the domain criteria and point bands.
  • Service groups. Add-on funding for known cost drivers, on top of the tier. The law calls for at least four; the rule sets five (19 TAC §89.1121(i)).
  • Minutes in a special education setting. A new data element: the average minutes per instructional day a student spends in a special education classroom or setting. TEA uses it to calculate the regular program offset.

Where a rating comes from

Under 19 TAC §89.1121, a student is reported for the highest tier they meet, based on the services and supports documented in the IEP as determined by the ARD committee. TEA's guidance adds: if a service isn't documented in the IEP as required for FAPE, that rating can't be chosen. When the person rating is unsure between two ratings, TEA says to choose the lower one.

Services themselves stay ARD committee decisions, documented in the IEP. The funding data follows what the committee decided.

Key dates

  • 2026–27: a transition year. Districts report both the old instructional arrangement codes and the new intensity data. TEA says each district will receive at least what it would have under the prior system this year only.
  • 2027–28 and after: funding is based only on the new service intensity system.

Questions TEA answers

TEA takes funding questions at spedfunding@tea.texas.gov, and PEIMS questions through a TIMS ticket or TSDSCustomerSupport@tea.texas.gov.

Sources

19 TAC §89.1121, adopted 51 TexReg 6705 (Sept. 25, 2026), effective Oct. 4, 2026.

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Demos use made-up students. Please don't send student information.