(a) If the division determines that a department complies with division standards and if the department has submitted a strategic plan under § 509.007 and the supporting information required by the division and the division determines the plan and supporting information are acceptable, the division shall prepare and submit to the comptroller vouchers for payment to the department as follows:
(1) for per capita funding, a per diem amount for each felony defendant directly supervised by the department pursuant to lawful authority;
(2) for per capita funding, a per diem amount for a period not to exceed 182 days for each defendant supervised by the department pursuant to lawful authority, other than a felony defendant; and
(3) for formula funding, an annual amount as computed by multiplying a percentage determined by the allocation formula established under Subsection (f) times the total amount provided in the General Appropriations Act for payments under this subdivision.
(a-1) Repealed by Acts 2017, 85th Leg., R.S., Ch. 346 (H.B. 1526), Sec. 3, eff. September 1, 2017.

(b) The division may use discretionary grant funds to further the purposes of this chapter by contracting for services with state agencies or nonprofit organizations. The division may also make discretionary grants to departments, municipalities, or counties for the following purposes:
(1) development and operation of pretrial and presentencing services;
(2) electronic monitoring services, surveillance supervision programs, and controlled substances testing services;
(3) research projects to evaluate the effectiveness of community corrections programs, if the research is conducted in cooperation with the Criminal Justice Policy Council;
(4) contract services for felony defendants;
(5) residential services for misdemeanor defendants who exhibit levels of risk or needs indicating a need for confinement and treatment, as described by § 509.005(b);
(6) establishment or operation of county correctional centers under Subchapter H, Chapter 351, Local Government Code, or community corrections facilities for which the division has established standards under Section 509.006;
(7) development and operation of treatment alternative to incarceration programs under § 76.017; and
(8) other purposes determined appropriate by the division and approved by the board.
(b-1) The division may award a grant to a department for the development and operation of a pretrial intervention program for defendants who are:
(1) pregnant at the time of placement into the program; or
(2) the primary caretaker of a child younger than 18 years of age.
(c) Each department, county, or municipality shall deposit all state aid received from the division in a special fund of the county treasury or municipal treasury, as appropriate, to be used solely for the provision of services, programs, and facilities under this chapter or Subchapter H, Chapter 351, Local Government Code.
(d) The division shall provide state aid to each department on a biennial basis, pursuant to the strategic plan for the biennium submitted by the department. A department with prior division approval may transfer funds from one program or function to another program or function.
(e) In establishing per diem payments authorized by Subsections (a)(1) and (a)(2), the division shall consider the amounts appropriated in the General Appropriations Act for basic supervision as sufficient to provide basic supervision in each year of the fiscal biennium.
(f) The division annually shall compute for each department for community corrections program formula funding a percentage determined by assigning equal weights to the percentage of the state’s population residing in the counties served by the department and the department’s percentage of all felony defendants in the state under direct community supervision. The division shall use the most recent information available in making computations under this subsection. The board by rule may adopt a policy limiting for all departments the percentage of benefit or loss that may be realized as a result of the operation of the formula.
(g) If the Texas Department of Criminal Justice determines that at the end of a biennium a department maintains in reserve an amount greater than six months’ basic supervision operating costs for the department, the Texas Department of Criminal Justice in the succeeding biennium may reduce the amount of per capita and formula funding provided under Subsection (a) so that in the succeeding biennium the department’s reserves do not exceed six months’ basic supervision operating costs. The Texas Department of Criminal Justice may adopt policies and standards permitting a department to maintain reserves in an amount greater than otherwise permitted by this subsection as necessary to cover emergency costs or implement new programs with the approval of the Texas Department of Criminal Justice. The Texas Department of Criminal Justice may distribute unallocated per capita or formula funds to provide supplemental funds to individual departments to further the purposes of this chapter.
(h) A community supervision and corrections department at any time may transfer to the Texas Department of Criminal Justice any unencumbered state funds held by the department. The Texas Department of Criminal Justice may distribute funds received from a community supervision and corrections department under this subsection to provide supplemental funds to individual departments to further the purposes of this chapter.