HBA-MPM C.S.H.B. 2358 76(R)BILL ANALYSIS Office of House Bill AnalysisC.S.H.B. 2358 By: Olivo Public Education 5/7/1999 Committee Report (Substituted) BACKGROUND AND PURPOSE There have been 168 charters granted by the State Board of Education (board) for open enrollment charter schools (charter schools), 88 of which are currently operational in Texas. The board recently adopted a resolution to encourage the creation of more charter schools. Preliminary findings suggest that charter schools are not out-performing public schools when it comes to the percentage of students who pass the Texas Assessment of Academic Skills (TAAS) test. C.S.H.B. 2358 prohibits the board from granting additional original charters, and requires the evaluation of charter schools to emphasize the performance of the charter schools' students on the TAAS test, as well as the number of students who did not re-enroll at the charter school the following year. This bill also requires the state auditor to monitor the board's oversight of charter schools. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Subchapter D, Chapter 12, Education Code, by adding Section 12.1012, as follows: Sec. 12.1012. MORATORIUM ON NEW CHARTERS. Prohibits the State Board of Education (board), notwithstanding Sections 12.101 (Authorization) and 12.1011 (Public Education Grant Charters), Education Code, from issuing a charter for an open-enrollment charter school (charter school) after the effective date of H.B. 2358, Acts of the 76th Legislature, Regular Session, 1999 (relating to open-enrollment charter schools). Provides that this section expires September 1, 2001. SECTION 2. Amends Section 12.111, Education Code, to provide that each charter granted under this subchapter must, among other things, describe the governing structure of the program, including the officer positions designated, the manner in which officers are selected, the manner in which members of the governing body are elected or appointed, the manner in which vacancies on the governing board are filled, the term for which members of the governing body serve, and whether the terms are to be staggered. SECTION 3. Amends Section 12.118, Education Code, by amending Subsection (b) and adding Subsection (d), as follows: (b) Provides that an evaluation under this section, before and after implementing the charter, as applicable, must emphasize student's scores on assessment instruments administered under Subchapter B (Assessment of Academic Skills), Chapter 39 (Public School System Accountability), Education Code, and the rate at which eligible students re-enroll in the school from year to year, as well as include consideration of certain items regarding student attendance, grades, incidents involving student discipline, socioeconomic data on students' families, and students' and parents' satisfaction with the charter school. Deletes students' scores on assessment instruments administered under Subchapter B, Chapter 39, Education Code. Makes conforming changes. (d) Requires the Texas Education Agency (agency) to conduct an evaluation under this section of each charter school, and no later than December 1, 2000, to prepare and deliver a report of the evaluation results to the governor, lieutenant governor, and each member of the legislature. Provides that this subsection expires September 1, 2001. SECTION 4. Amends Subchapter D, Chapter 12, Education code, by adding Sections 12.119, 12.120, and 12.121, as follows: Sec. 12.119. FINANCIAL AUDITS. (a) Provides that a charter school is subject to the financial audit requirements of Section 44.008 (Annual Audit; Report), Education Code. (b) Requires the state auditor to monitor the board's oversight of charter schools Sec. 12.120. BYLAWS; ANNUAL REPORT. (a) Requires the entity to which a charter is granted for a charter school to file with the board a copy of its bylaws, or a comparable document if the entity does not have bylaws, within the period and manner prescribed by the board. (b) Requires each charter school, each year within the period and in a form prescribed by the board, to file with the board certain information with respect to the charter school. (c) Requires the board, on request, to provide the information required by this section and Section 12.111, Education Code, to a member of the public. Authorizes the board to charge a reasonable fee to cover its cost in providing the information. Sec. 12.121. LIMITATION ON SERVING AS OFFICER OR EMPLOYEE. Prohibits a person who has been convicted of a felony or certain misdemeanors from serving as an officer or member of the governing body of a charter school. SECTION 5. Provides that this Act takes effect September 1, 1999, with the exceptions of SECTION 1 of this Act, which takes effect immediately. Requires each charter school for which a charter is granted before September 1, 1999, to revise its charter as necessary to comply with Section 12.111, Education Code, as amended by this Act, no later than January 1, 2000. Requires the entity to which a charter for a charter school is granted before September 1, 1999, to file a copy of its bylaws or other document as required by Section 12.120, Education Code, as added by this Act, no later than January 1, 2000. Provides that changes in law made by this Act do not affect the validity of charters issued before the effective date of a provision of this Act. SECTION 6.Emergency clause. COMPARISON OF ORIGINAL TO SUBSTITUTE C.S.H.B. 2358 differs from the original by adding new SECTIONS 1 and 2. Please see the Sectionby-Section Analysis in this document. SECTION 1 of the original, which amended Section 12.101(b), Education Code, to prohibit the State Board of Education (board) from granting an original charter, rather than a total of more than 20 charters, for an open-enrollment charter school (charter school) after the effective date of the 1999 amendment to this section, is deleted. SECTION 3 of the substitute is redesignated from SECTION 2 of the original, which amends Section 12.118, Education Code. The substitute replaces proposed Subsection (d) of the original with new text which requires the Texas Education Agency (agency) to conduct an evaluation under this section of each charter school, and no later than December 1, 2000, to prepare and deliver a report of the evaluation results to the governor, lieutenant governor, and each member of the legislature, and provides that this subsection expires September 1, 2001. Subsection (d) of the original required the agency to reimburse a charter school for the cost of an evaluation under this section if funds are appropriated for that purpose. The original also required the commissioner of education (commissioner) to reimburse each school proportionately if the funds appropriated are insufficient to cover the cost of evaluation of all schools. SECTION 4 of the substitute is redesignated from SECTION 3 of the original, however, instead of adding Sections 12.119 and 12.120, Education Code, the substitute adds Sections 12.119, 12.120, and 12.121. In proposed Section 12.119, the substitute requires the state auditor to monitor the board's oversight of charter schools, whereas, the original required the state auditor to perform financial audits of charter schools at least once during the period for which a charter or renewed charter is valid. The substitute replaces proposed Section 12.120 (Certain Contracts Prohibited), Education Code, of the original with entirely new text. Please refer to the Section-by-Section Analysis in this document for an analysis of this new section. In the original, this section prohibited a charter school from contracting for the management or operation of the school by an entity that is ineligible for a charter under Section 12.101(a) (regarding the granting of a charter on the application of an eligible entity for a charter school to operate in a facility of a commercial or nonprofit entity or a school district, including a home-rule school district), Education Code. The substitute adds entirely new Section 12.121 (Limitation on Serving as Officer or Employee), Education Code. Please see the Section-by-Section Analysis for an analysis of this new section. SECTION 4 of the original, which repealed Section 12.1011 (Public Education Grant Charters), Education Code, is removed from the substitute. The language in the original would have repealed language stating that, in addition to the other charters authorized under this subchapter, in accordance with this subchapter, the board may grant no more than 100 charters for charter schools that adopt an express policy providing for the admission of students eligible for a public education grant; and additional charters for charter schools for which at least 75 percent of the prospective student population, as specified in the proposed charter, will be students who have dropped out of school or are at risk of dropping out of school. This section further states that a charter school granted a charter under this section may serve students who are not eligible for a public education grant, but a school granted a charter must maintain, as a condition of its charter, the required percentage of students. SECTION 5 of the substitute differs from the original by making this Act effective September 1, 1999, with the exception of SECTION 1, rather than SECTIONS 1 and 4, of this Act. The substitute also requires each charter school for which a charter is granted before September 1, 1999, to revise its charter as necessary to comply with Section 12.111, Education Code, as amended by this Act, no later than January 1, 2000; and requires the entity to which a charter for a charter school is granted before September 1, 1999, to file a copy of its bylaws or other document as required by Section 12.120, Education Code, as added by this Act, no later than January 1, 2000.