By Dunnam, Smith, Olivo, Hardcastle, Dutton,             H.B. No. 6
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to open-enrollment charter schools.
 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-4           SECTION 1. Section 8.002, Education Code, is amended to read
 1-5     as follows:
 1-6           Sec. 8.002.  PURPOSE. Regional education service centers
 1-7     shall:
 1-8                 (1)  assist school districts and open-enrollment
 1-9     charter schools in improving student performance in each region of
1-10     the system;
1-11                 (2)  enable school districts and open-enrollment
1-12     charter schools to operate more efficiently and economically; and
1-13                 (3)  implement initiatives assigned by the legislature
1-14     or the commissioner.
1-15           SECTION 2. Section 8.003(b), Education Code, is amended to
1-16     read as follows:
1-17           (b)  The commissioner shall adopt rules to provide for the
1-18     local selection, appointment, and continuity of membership of
1-19     regional education service center boards of directors.  The rules
1-20     must provide that if 500 or more students residing within the
1-21     service center region attend open-enrollment charter schools, the
1-22     commissioner shall appoint a representative of an open-enrollment
1-23     charter school located within the region to serve on the board of
1-24     directors.
1-25           SECTION 3. Sections 8.051, 8.053, and 8.054, Education Code,
 2-1     are amended to read as follows:
 2-2           Sec. 8.051.  CORE SERVICES AND SERVICES TO IMPROVE
 2-3     PERFORMANCE. (a)  Each regional education service center shall use
 2-4     funds distributed to the center under Section 8.121 to develop,
 2-5     maintain, and deliver services identified under this section to
 2-6     improve student, [and] school district, and open-enrollment charter
 2-7     school performance.
 2-8           (b)  Each regional education service center shall annually
 2-9     develop and submit to the commissioner for approval a plan for
2-10     improvement.  Each plan must include the purposes and description
2-11     of the services the center will provide to:
2-12                 (1)  campuses identified as low-performing based on the
2-13     indicators adopted under Section 39.051, including campuses of
2-14     open-enrollment charter schools;
2-15                 (2)  the lowest-performing campuses in the region,
2-16     including campuses of open-enrollment charter schools; and
2-17                 (3)  other campuses, including campuses of
2-18     open-enrollment charter schools.
2-19           (c)  Each regional education service center shall provide
2-20     services that enable school districts and open-enrollment charter
2-21     schools to operate more efficiently and economically.
2-22           (d)  Each regional education service center shall maintain
2-23     core services for purchase by school districts, [and] campuses, and
2-24     open-enrollment charter schools and campuses of those schools.  The
2-25     core services are:
2-26                 (1)  training and assistance in teaching each subject
2-27     area assessed under Section 39.023;
 3-1                 (2)  training and assistance in providing each program
 3-2     that qualifies for a funding allotment under Section 42.151,
 3-3     42.152, 42.153, or 42.156;
 3-4                 (3)  assistance specifically designed for a school
 3-5     district rated academically unacceptable under Section 39.072(a) or
 3-6     a campus or open-enrollment charter school whose performance is
 3-7     considered unacceptable based on the indicators adopted under
 3-8     Section 39.051;
 3-9                 (4)  training and assistance to:
3-10                       (A)  teachers;
3-11                       (B)[,]  administrators of school districts,
3-12     campuses, and open-enrollment charter schools;
3-13                       (C)[,]  members of district boards of trustees
3-14     and of  governing bodies of open-enrollment charter schools;[,] and
3-15                       (D)  members of site-based decision-making
3-16     committees;
3-17                 (5)  assistance specifically designed for a school
3-18     district that is considered out of compliance with state or federal
3-19     special education requirements, based on the agency's most recent
3-20     compliance review of the district's special education programs; and
3-21                 (6)  assistance in complying with state laws and rules.
3-22           Sec. 8.053.  ADDITIONAL SERVICES. In addition to the services
3-23     provided under Section 8.051 and the initiatives implemented under
3-24     Section 8.052, a regional education service center may:
3-25                 (1)  offer any service requested and purchased by any
3-26     school district, [or] campus, or open-enrollment charter school in
3-27     the state; and
 4-1                 (2)  contract with a public or private entity for
 4-2     services under this subchapter, including the provision of
 4-3     continuing education courses and programs for educators.
 4-4           Sec. 8.054.  PROHIBITION ON REGULATORY FUNCTION. A regional
 4-5     education service center may not perform a regulatory function
 4-6     regarding a school district or open-enrollment charter school. This
 4-7     section does not prohibit a regional education service center from
 4-8     offering training or other assistance to a school district or
 4-9     open-enrollment charter school in complying with a state or federal
4-10     law, rule, or regulation.
4-11           SECTION 4. Section 8.101, Education Code, is amended to read
4-12     as follows:
4-13           Sec. 8.101.  PERFORMANCE STANDARDS AND INDICATORS. The
4-14     commissioner shall establish performance standards and indicators
4-15     for regional education service centers that measure the achievement
4-16     of the objectives in Section 8.002, including performance standards
4-17     and indicators that evaluate the assistance provided to
4-18     open-enrollment charter schools.  Performance standards and
4-19     indicators must include the following:
4-20                 (1)  student performance in districts and
4-21     open-enrollment charter schools served;
4-22                 (2)  district and open-enrollment charter school
4-23     effectiveness and efficiency in districts and open-enrollment
4-24     charter schools served resulting from technical assistance and
4-25     program support;
4-26                 (3)  direct services provided or regionally shared
4-27     services arranged by the service center which produce more
 5-1     economical and efficient school operations;
 5-2                 (4)  direct services provided or regionally shared
 5-3     services arranged by the service center which provide for
 5-4     assistance in core services; and
 5-5                 (5)  grants received for implementation of state
 5-6     initiatives and the results achieved by the service center under
 5-7     the terms of the grant contract.
 5-8           SECTION 5. Subchapter A, Chapter 12, Education Code, is
 5-9     amended by amending Section 12.001 and adding Section 12.0011 to
5-10     read as follows:
5-11           Sec. 12.001.  PURPOSES OF CHAPTER. (a)  The purposes of this
5-12     chapter are to:
5-13                 (1)  improve student learning;
5-14                 (2)  increase the choice of learning opportunities
5-15     within the public school system;
5-16                 (3)  create professional opportunities that will
5-17     attract new teachers to the public school system;
5-18                 (4)  establish a new form of accountability for public
5-19     schools; and
5-20                 (5)  encourage different and innovative learning
5-21     methods.
5-22           (b)  This chapter shall be applied in a manner that ensures
5-23     the fiscal and academic accountability of persons holding charters
5-24     issued under this chapter.  This chapter may not be applied in a
5-25     manner that unduly regulates the instructional methods or
5-26     pedagogical innovations of charter schools.
5-27           Sec. 12.0011.  ALTERNATIVE METHOD OF OPERATION. As an
 6-1     alternative to operating in the manner generally provided by this
 6-2     title, an independent school district, a school campus, or an
 6-3     educational program may choose to operate under a charter in
 6-4     accordance with this chapter.
 6-5           SECTION 6. Subchapter D, Chapter 12, Education Code, is
 6-6     amended by adding Sections 12.1012-12.1015 to read as follows:
 6-7           Sec. 12.1012.  DEFINITIONS. In this subchapter:
 6-8                 (1)  "Charter holder" means the entity to which a
 6-9     charter is granted under this subchapter.
6-10                 (2)  "Governing body of a charter holder" means the
6-11     board of directors, board of trustees, or other governing body of a
6-12     charter holder.
6-13                 (3)  "Governing body of an open-enrollment charter
6-14     school" means the board of directors, board of trustees, or other
6-15     governing body of an open-enrollment charter school.  The term
6-16     includes the governing body of a charter holder if that body acts
6-17     as the governing body of the open-enrollment charter school.
6-18                 (4)  "Management company" means a person, other than a
6-19     charter holder, who provides management services for an
6-20     open-enrollment charter school.
6-21                 (5)  "Management services" means services related to
6-22     the management or operation of an open-enrollment charter school,
6-23     including:
6-24                       (A)  planning, operating, supervising, and
6-25     evaluating the school's educational programs, services, and
6-26     facilities;
6-27                       (B)  making recommendations to the governing body
 7-1     of the school relating to the selection of school personnel;
 7-2                       (C)  managing the school's day-to-day operations
 7-3     as its administrative manager;
 7-4                       (D)  preparing and submitting to the governing
 7-5     body of the school a proposed budget;
 7-6                       (E)  recommending policies to be adopted by the
 7-7     governing body of the school, developing appropriate procedures to
 7-8     implement policies adopted by the governing body of the school, and
 7-9     overseeing the implementation of adopted policies; and
7-10                       (F)  providing leadership for the attainment of
7-11     student performance at the school based on the indicators adopted
7-12     under Section 39.051 or by the governing body of the school.
7-13                 (6)  "Officer of an open-enrollment charter school"
7-14     means:
7-15                       (A)  the principal, director, or other chief
7-16     operating officer of an open-enrollment charter school;
7-17                       (B)  an assistant principal or assistant director
7-18     of an open-enrollment charter school; or
7-19                       (C)  a person charged with managing the finances
7-20     of an open-enrollment charter school.
7-21           Sec. 12.1013.  DELEGATION BY STATE BOARD OF EDUCATION. (a)
7-22     The State Board of Education may delegate to the commissioner any
7-23     power or duty of the board under this subchapter, other than the
7-24     power to grant, deny, modify, place on probation, deny renewal of,
7-25     or revoke a charter for an open-enrollment charter school.
7-26           (b)  The commissioner may conduct hearings on any issue as to
7-27     which a hearing is authorized under this subchapter.
 8-1           Sec. 12.1014.  MINIMUM STUDENT ENROLLMENT. (a)  The State
 8-2     Board of Education may not grant a charter to or renew the charter
 8-3     of an open-enrollment charter school unless the board determines
 8-4     that the school will have and maintain an enrollment of at least 50
 8-5     students, except that a school may have an enrollment of not fewer
 8-6     than 20 students if the board specifically finds that the nature of
 8-7     the school requires an enrollment of fewer than 50 students.
 8-8           (b)  The State Board of Education may revoke an
 8-9     open-enrollment charter school's charter if, for a period
8-10     prescribed by board rule, the school's enrollment is lower than the
8-11     number of students authorized under Subsection (a).
8-12           Sec. 12.1015.  MORATORIUM ON NEW CHARTERS.  (a)
8-13     Notwithstanding Sections 12.101 and 12.1011, the State Board of
8-14     Education may not issue a charter for an open-enrollment charter
8-15     school after August 31, 2001.
8-16           (b)  This section expires September 1, 2003.
8-17           SECTION 7.  Section 12.103, Education Code, is amended to
8-18     read as follows:
8-19           Sec. 12.103.  GENERAL APPLICABILITY OF LAWS AND RULES TO
8-20     OPEN-ENROLLMENT CHARTER SCHOOL. (a)  Except as provided by
8-21     Subsection (b) or (c), an [An] open-enrollment charter school is
8-22     subject to federal and state laws and rules governing public
8-23     schools or public school districts, including state laws listed in
8-24     Sections 12.1051 and 12.1053.
8-25           (b)  An [except that an] open-enrollment charter school is
8-26     subject to this code and rules adopted under this code only to the
8-27     extent the applicability to an open-enrollment charter school of a
 9-1     provision of this code or a rule adopted under this code is
 9-2     specifically provided.
 9-3           (c)  An open-enrollment charter school is not subject to a
 9-4     state law or rule governing public school districts if the
 9-5     commissioner determines it is impracticable or inefficient to apply
 9-6     the law or rule to open-enrollment charter schools.
 9-7           SECTION 8. Section 12.104, Education Code, is amended by
 9-8     amending Subsection (b) and adding Subsections (c) and (d) to read
 9-9     as follows:
9-10           (b)  An open-enrollment charter school is subject to:
9-11                 (1)  a provision of this title establishing a criminal
9-12     offense; and
9-13                 (2)  a prohibition, restriction, or requirement, as
9-14     applicable, imposed by this title or a rule adopted under this
9-15     title, relating to:
9-16                       (A)  the Public Education Information Management
9-17     System (PEIMS) to the extent necessary to monitor compliance with
9-18     this subchapter as determined by the commissioner;
9-19                       (B)  criminal history records under Subchapter C,
9-20     Chapter 22;
9-21                       (C)  reading instruments and accelerated reading
9-22     instruction programs under Section 28.006;
9-23                       (D)  satisfactory performance on assessment
9-24     instruments and to accelerated instruction under Section 28.0211;
9-25                       (E)  high school graduation under Section 28.025;
9-26                       (F)  special education programs under Subchapter
9-27     A, Chapter 29;
 10-1                      (G)  bilingual education under Subchapter B,
 10-2    Chapter 29;
 10-3                      (H)  prekindergarten programs under Subchapter E,
 10-4    Chapter 29;
 10-5                      (I)  extracurricular activities under Section
 10-6    33.081;
 10-7                      (J)  health and safety under Chapter 38; [and]
 10-8                      (K)  public school accountability under
 10-9    Subchapters B, C, D, and G, Chapter 39; and
10-10                      (L)  purchasing and contracting under Subchapter
10-11    B, Chapter 44.
10-12          (c)  To the extent the commissioner determines is necessary
10-13    or advisable to provide and account for state funding of
10-14    open-enrollment charter schools under Section 12.106, the
10-15    commissioner may adopt rules applying provisions of this code other
10-16    than those listed in Subsection (b) to open-enrollment charter
10-17    schools.
10-18          (d)  An open-enrollment charter school is subject to the
10-19    requirement relating to the length of the school day under Section
10-20    25.082 unless the commissioner grants the open-enrollment charter
10-21    school a waiver from that requirement under Section 12.1041.
10-22          SECTION 9.  Subchapter D, Chapter 12, Education Code, is
10-23    amended by adding Section 12.1041 to read as follows:
10-24          Sec. 12.1041.  WAIVER OF REQUIREMENT RELATING TO LENGTH OF
10-25    SCHOOL DAY. (a)  An open-enrollment charter school that, for
10-26    purposes of Section 12.104(d), is seeking a waiver of the
10-27    requirement relating to the length of the school day under Section
 11-1    25.082 must submit a written application to the commissioner not
 11-2    later than the 31st day before the date the open-enrollment charter
 11-3    school intends to provide a  shorter school day.  The application
 11-4    must include a statement of achievement objectives of the
 11-5    open-enrollment charter school and the inhibition imposed on those
 11-6    objectives by the requirement.
 11-7          (b)  Subject to Subsection (c), the commissioner may not deny
 11-8    an application for a waiver under this section submitted by an
 11-9    open-enrollment charter school rated as academically acceptable or
11-10    higher under Chapter 39 for each of the preceding three school
11-11    years.
11-12          (c)  The commissioner may not grant a waiver under this
11-13    section if, as determined by the commissioner, a purpose of the
11-14    waiver application is to support any athletic or artistic activity.
11-15          (d)  If the commissioner objects to the application for the
11-16    waiver, not later than the 30th day after the date the commissioner
11-17    receives the application the commissioner must notify the
11-18    open-enrollment charter school in writing that the application is
11-19    denied.  If the commissioner does not notify the school of a denial
11-20    within that period, the application is considered approved.
11-21          (e)  A waiver granted under this section is effective for the
11-22    period stated in the application, which may not exceed three years.
11-23    An open-enrollment charter school for which the requirement under
11-24    Section 25.082 is waived under this section for a period of three
11-25    years may receive an exemption from that requirement at the end of
11-26    that period if the school has fulfilled the achievement objectives
11-27    stated in the application.  The exemption remains in effect until
 12-1    the commissioner determines that achievement levels of the school
 12-2    have declined.
 12-3          SECTION 10.  Subchapter D, Chapter 12, Education Code, is
 12-4    amended by amending Section 12.105 and adding Sections
 12-5    12.1051-12.1055 to read as follows:
 12-6          Sec. 12.105.  STATUS.  [(a)]  An open-enrollment charter
 12-7    school is part of the public school system of this state.
 12-8          Sec. 12.1051.  APPLICABILITY OF OPEN MEETINGS AND PUBLIC
 12-9    INFORMATION LAWS. (a) [(b)]  The governing body of a charter holder
12-10    and the governing body of an open-enrollment charter [the] school
12-11    are [is] considered to be [a] governmental bodies [body] for
12-12    purposes of Chapters 551 and 552, Government Code.
12-13          (b)  Any requirement in Chapter 551 or 552, Government Code,
12-14    that applies [those chapters relating] to a school district, the
12-15    board of trustees of a school district [school board], or public
12-16    school students [children] applies to an open-enrollment charter
12-17    school, the governing body of a charter holder, the governing body
12-18    of an open-enrollment charter school, or students [and to children]
12-19    attending an open-enrollment charter school.
12-20          Sec. 12.1052.  APPLICABILITY OF LAWS RELATING TO LOCAL
12-21    GOVERNMENT RECORDS.  (a)  An open-enrollment charter school is
12-22    considered to be a local government for purposes of Subtitle C,
12-23    Title 6, Local Government Code, and Subchapter J, Chapter 441,
12-24    Government Code.
12-25          (b)  Records of an open-enrollment charter school and records
12-26    of a charter holder that relate to an open-enrollment charter
12-27    school are government records for all purposes under state law.
 13-1          (c)  Any requirement in Subtitle C, Title 6, Local Government
 13-2    Code, or Subchapter J, Chapter 441, Government Code, that applies
 13-3    to a school district, the board of trustees of a school district,
 13-4    or an officer or employee of a school district applies to an
 13-5    open-enrollment charter school, the governing body of a charter
 13-6    holder, the governing body of an open-enrollment charter school, or
 13-7    an officer or employee of an open-enrollment charter school except
 13-8    that the records of an open-enrollment charter school that ceases
 13-9    to operate shall be transferred in the manner prescribed by
13-10    Subsection (d).
13-11          (d)  The records of an open-enrollment charter school that
13-12    ceases to operate shall be transferred in the manner specified by
13-13    the commissioner to a custodian designated by the commissioner.
13-14    The commissioner may designate any appropriate entity to serve as
13-15    custodian, including the agency, a regional education service
13-16    center, or a school district. In designating a custodian, the
13-17    commissioner shall ensure that the transferred records, including
13-18    student and personnel records, are transferred to a custodian
13-19    capable of:
13-20                (1)  maintaining the records;
13-21                (2)  making the records readily accessible to students,
13-22    parents, former school employees, and other persons entitled to
13-23    access; and
13-24                (3)  complying with applicable state or federal law
13-25    restricting access to the records.
13-26          (e)  If the charter holder of an open-enrollment charter
13-27    school that ceases to operate or an officer or employee of such a
 14-1    school refuses to transfer school records in the manner specified
 14-2    by the commissioner under Subsection (d), the commissioner may ask
 14-3    the attorney general to petition a court for recovery of the
 14-4    records.  If the court grants the petition, the court shall award
 14-5    attorney's fees and court costs to the state.
 14-6          Sec. 12.1053.  APPLICABILITY OF LAWS RELATING TO PUBLIC
 14-7    PURCHASING AND CONTRACTING. (a)  An open-enrollment charter school
 14-8    is considered to be:
 14-9                (1)  a governmental entity for purposes of:
14-10                      (A)  Subchapter D, Chapter 2252, Government Code;
14-11    and
14-12                      (B)  Subchapter B, Chapter 271, Local Government
14-13    Code;
14-14                (2)  a political subdivision for purposes of Subchapter
14-15    A, Chapter 2254, Government Code; and
14-16                (3)  a local government for purposes of Sections
14-17    2256.009-2256.016, Government Code.
14-18          (b)  A member of the governing body of a charter holder, a
14-19    member of the governing body of an open-enrollment charter school,
14-20    or an officer of an open-enrollment charter school is considered to
14-21    be a local public official for purposes of Chapter 171, Local
14-22    Government Code. For purposes of that chapter:
14-23                (1)  a member of the governing body of a charter holder
14-24    or a member of the governing body or officer of an open-enrollment
14-25    charter school is considered to have a substantial interest in a
14-26    business entity if a person related to the member or officer in the
14-27    third degree by consanguinity or affinity, as determined under
 15-1    Chapter 573, Government Code, has a substantial interest in the
 15-2    business entity under Section 171.002, Local Government Code; and
 15-3                (2)  a member of the governing body or officer of a
 15-4    charter school rated as academically acceptable or higher under
 15-5    Chapter 39 for each of the preceding three school years, or a
 15-6    member of the governing body of the charter holder of such a
 15-7    school, is not subject to the restrictions of Section 171.009,
 15-8    Local Government Code.
 15-9          (c)  A requirement in a law listed in this section that
15-10    applies to a school district or the board of trustees of a school
15-11    district applies to an open-enrollment charter school, the
15-12    governing body of a charter holder, or the governing body of an
15-13    open-enrollment charter school.
15-14          Sec. 12.1054.  IMMUNITY FROM LIABILITY.  An open-enrollment
15-15    charter [(c)  The] school is immune from liability to the same
15-16    extent as a school district, and its employees and volunteers are
15-17    immune from liability to the same extent as school district
15-18    employees and volunteers.
15-19          Sec. 12.1055.  MEMBERSHIP IN TEACHER RETIREMENT SYSTEM OF
15-20    TEXAS. (a) [(d)]  An employee of an open-enrollment charter school
15-21    or management company who qualifies for membership in the Teacher
15-22    Retirement System of Texas shall be covered under the system to the
15-23    same extent a qualified employee of a school district is covered.
15-24          (b)  For each employee of the school or company covered under
15-25    the system, the charter holder or company [school] is responsible
15-26    for making any contribution that otherwise would be the legal
15-27    responsibility of the school district, and the state is responsible
 16-1    for making contributions to the same extent it would be legally
 16-2    responsible if the employee were a school district employee.
 16-3          SECTION 11. Sections 12.106-12.108, Education Code, are
 16-4    amended to read as follows:
 16-5          Sec. 12.106.  STATE FUNDING. (a)  A charter holder is
 16-6    entitled to receive for the open-enrollment charter school funding
 16-7    under Chapter 42 as if the school were a school district without a
 16-8    tier one local share for purposes of Section 42.253 and without any
 16-9    local revenue ("LR") for purposes of Section 42.302.  In
16-10    determining funding for an open-enrollment charter school,
16-11    adjustments under Sections 42.102, 42.103, 42.104, and 42.105 and
16-12    the district enrichment tax rate ("DTR") under Section 42.302 are
16-13    based on the average adjustment and average district enrichment tax
16-14    rate for the state.
16-15          (b)  An open-enrollment charter school is entitled to funds
16-16    that are available to school districts from the agency or the
16-17    commissioner in the form of grants or other discretionary funding
16-18    unless the statute authorizing the funding explicitly provides that
16-19    open-enrollment charter schools are not entitled to the funding.
16-20          (c)  Funds received by a charter holder under this section
16-21    after September 1, 2001:
16-22                (1)  are considered to be public funds for all purposes
16-23    under state law;
16-24                (2)  are held in trust by the charter holder for the
16-25    benefit of the students of the open-enrollment charter school;
16-26                (3)  may be used only for a purpose for which a school
16-27    district may use local school funds under Section 45.105(c); and
 17-1                (4)  pending their use, must be deposited into a bank,
 17-2    as defined by Section 45.201, as amended by Chapter 344, Acts of
 17-3    the 76th Legislature, Regular Session, 1999, with which the charter
 17-4    holder has entered into a depository contract.
 17-5          (d)  A charter holder shall deliver to the agency a copy of
 17-6    the depository contract between the charter holder and a bank into
 17-7    which state funds are deposited. [An open-enrollment charter school
 17-8    is entitled to the distribution from the available school fund for
 17-9    a student attending the open-enrollment charter school to which the
17-10    district in which the student resides would be entitled.]
17-11          [(b)  A student attending an open-enrollment charter school
17-12    who is eligible under Section 42.003 is entitled to the benefits of
17-13    the Foundation School Program under Chapter 42.  The commissioner
17-14    shall distribute from the foundation school fund to each school an
17-15    amount equal to the cost of a Foundation School Program provided by
17-16    the program for which the charter is granted as determined under
17-17    Section 42.251, including the transportation allotment under
17-18    Section 42.155, for the student that the district in which the
17-19    student resides would be entitled to, less an amount equal to the
17-20    sum of the school's tuition receipts under Section 12.107 plus the
17-21    school's distribution from the available school fund.]
17-22          Sec. 12.107.  EFFECT OF ACCEPTING STATE FUNDING. (a)  A
17-23    charter holder who accepts state funds under Section 12.106 after
17-24    the effective date of a provision of this subchapter agrees to be
17-25    subject to that provision, regardless of the date on which the
17-26    charter holder's charter was granted.
17-27          (b)  A charter holder who accepts state funds under Section
 18-1    12.106 after September 1, 2001, agrees to accept all liability
 18-2    under this subchapter for any funds accepted under that section
 18-3    before September 1, 2001.  This subsection does not create
 18-4    liability for charter holder conduct occurring before September 1,
 18-5    2001. [LOCAL FUNDING.  (a)  Except as provided by Subsection (b),
 18-6    an open-enrollment charter school is entitled to receive tuition
 18-7    from the school district in which a student attending the school
 18-8    resides in an amount equal to the quotient of the tax revenue
 18-9    collected by the school district for maintenance and operations for
18-10    the school year for which tuition is being paid divided by the sum
18-11    of the number of students enrolled in the district as reported in
18-12    the Public Education Information Management System (PEIMS),
18-13    including the number of students for whom the district is required
18-14    to pay tuition.]
18-15          [(b)  The tuition to be paid under Subsection (a) by a school
18-16    district with a wealth per student that exceeds the equalized
18-17    wealth level under Chapter 41 shall be based on the district's tax
18-18    revenue after the district has acted to achieve the equalized
18-19    wealth level under Chapter 41.]
18-20          Sec. 12.108.  TUITION AND FEES RESTRICTED.   (a)  An [Except
18-21    as provided by Section 12.106, an] open-enrollment charter school
18-22    may not charge tuition to an eligible student who applies under
18-23    Section 12.117.
18-24          (b)  The governing body of an open-enrollment charter school
18-25    may require a student to pay any fee that the board of trustees of
18-26    a school district may charge under Section 11.158(a).  The
18-27    governing body may not require a student to pay a fee that the
 19-1    board of trustees of a school district may not charge under Section
 19-2    11.158(b).
 19-3          SECTION 12.  Sections 12.110(a)-(c), Education Code, are
 19-4    amended to read as follows:
 19-5          (a)  The State Board of Education shall adopt:
 19-6                (1)  an application form and a procedure that must be
 19-7    used to apply for a charter for an open-enrollment charter school
 19-8    or a renewal of a charter; and
 19-9                (2)  criteria to use in selecting a program for which
19-10    to grant a charter.
19-11          (b)  The application form for a charter or renewal of a
19-12    charter must provide for including:
19-13                (1)  the information required under Section 12.111 to
19-14    be contained in a charter;
19-15                (2)  a description of the program to be provided during
19-16    a typical school day that includes the number of hours each day the
19-17    program will operate; and
19-18                (3)  a description of the types of instructional
19-19    approaches to be used.
19-20          (c)  As part of the application procedure for a charter for a
19-21    new open-enrollment charter school, the board may require a
19-22    petition supporting the [a] charter [for a school] signed by a
19-23    specified number of parents or guardians of school-age children
19-24    residing in the area in which a school is proposed or may hold a
19-25    public hearing to determine parental support for the school.
19-26          SECTION 13.  Section 12.111, Education Code, is amended to
19-27    read as follows:
 20-1          Sec. 12.111.  CONTENT.  Each charter granted under this
 20-2    subchapter must:
 20-3                (1)  describe the educational program to be offered,
 20-4    which must include the required curriculum as provided by Section
 20-5    28.002;
 20-6                (2)  specify the period for which the charter or any
 20-7    charter renewal is valid;
 20-8                (3)  provide that continuation or renewal of the
 20-9    charter is contingent on acceptable student performance on
20-10    assessment instruments adopted under Subchapter B, Chapter 39, and
20-11    on compliance with any accountability provision specified by the
20-12    charter, by a deadline or at intervals specified by the charter;
20-13                (4)  establish the level of student performance that is
20-14    considered acceptable for purposes of Subdivision (3);
20-15                (5)  specify any basis, in addition to a basis
20-16    specified by this subchapter, on which the charter may be placed on
20-17    probation or revoked or on which renewal of the charter may be
20-18    denied;
20-19                (6)  prohibit discrimination in admission policy on the
20-20    basis of sex, national origin, ethnicity, religion, disability,
20-21    academic, artistic, or athletic ability, or the district the child
20-22    would otherwise attend in accordance with this code, although the
20-23    charter may provide for the exclusion of a student who has a
20-24    documented history of a criminal offense, a juvenile court
20-25    adjudication, or discipline problems under Subchapter A, Chapter
20-26    37;
20-27                (7)  specify the grade levels to be offered;
 21-1                (8)  describe the governing structure of the program,
 21-2    including:
 21-3                      (A)  the officer positions designated;
 21-4                      (B)  the manner in which officers are selected
 21-5    and removed from office;
 21-6                      (C)  the manner in which members of the governing
 21-7    body of the school are selected and removed from office;
 21-8                      (D)  the manner in which vacancies on that [the]
 21-9    governing body [board] are filled;
21-10                      (E)  the term for which members of that [the]
21-11    governing body serve; and
21-12                      (F)  whether the terms are to be staggered;
21-13                (9)  specify the powers or duties of the governing body
21-14    of the school that the governing body may delegate to an officer;
21-15                (10)  specify the manner in which the school will
21-16    distribute to parents information related to the qualifications of
21-17    each [to be met by] professional employee [employees] of the
21-18    program, including any professional or educational degree held by
21-19    each employee, a statement of any certification under Subchapter B,
21-20    Chapter 21, held by each employee, and any relevant experience of
21-21    each employee;
21-22                (11) [(10)]  describe the process by which the person
21-23    providing the program will adopt an annual budget;
21-24                (12) [(11)]  describe the manner in which an annual
21-25    audit of the financial and programmatic operations of the program
21-26    is to be conducted, including the manner in which the person
21-27    providing the program will provide information necessary for the
 22-1    school district in which the program is located to participate, as
 22-2    required by this code or by State Board of Education rule, in the
 22-3    Public Education Information Management System (PEIMS);
 22-4                (13) [(12)]  describe the facilities to be used;
 22-5                (14) [(13)]  describe the geographical area served by
 22-6    the program; and
 22-7                (15) [(14)]  specify any type of enrollment criteria to
 22-8    be used.
 22-9          SECTION 14. Section 12.113, Education Code, is amended to
22-10    read as follows:
22-11          Sec. 12.113. CHARTER GRANTED. (a) Each charter the State
22-12    Board of Education grants for an open-enrollment charter school
22-13    must:
22-14                (1)  satisfy this subchapter; and
22-15                (2)  include the information that is required under
22-16    Section 12.111 consistent with the information provided in the
22-17    application and any modification the board requires.
22-18          (b)  The grant of a charter under this subchapter does not
22-19    create an entitlement to a renewal of a charter on the same terms
22-20    as it was originally issued.
22-21          SECTION 15. Section 12.114, Education Code, is amended to
22-22    read as follows:
22-23          Sec. 12.114.  REVISION.  (a)  A revision of a charter of an
22-24    open-enrollment charter school may be made only with the approval
22-25    of the State Board of Education.
22-26          (b)  A charter holder must comply with Subsection (c) to
22-27    obtain approval of a revision of the charter for an open-enrollment
 23-1    charter school if the revision authorizes the school to:
 23-2                (1)  expand to additional campuses or sites beyond the
 23-3    campuses or sites stated in the charter;
 23-4                (2)  increase grade levels beyond the levels stated in
 23-5    the charter; or
 23-6                (3)  increase enrollment beyond the maximum enrollment
 23-7    stated in the charter.
 23-8          (c)  For approval of a revision described by Subsection (b):
 23-9                (1)  a charter holder must submit an application for
23-10    approval in a form approved by the State Board of Education; and
23-11                (2)  the State Board of Education must interview
23-12    appropriate school representatives in connection with the
23-13    application and take all other action necessary to thoroughly
23-14    review the application.
23-15          (d)  Notwithstanding any other provision of this section, the
23-16    State Board of Education may not approve a revision of the charter
23-17    of an open-enrollment charter school not rated as academically
23-18    acceptable or higher under Chapter 39 for each of the preceding
23-19    three school years that contains a revision described by Subsection
23-20    (b)(1).  This subsection expires September 1, 2003.
23-21          SECTION 16. Section 12.115(a), Education Code, is amended to
23-22    read as follows:
23-23          (a)  The State Board of Education may modify, place on
23-24    probation, revoke, or deny renewal of the charter of an
23-25    open-enrollment charter school if the board determines that the
23-26    charter holder [person operating the school]:
23-27                (1)  committed a material violation of the charter,
 24-1    including failure to satisfy accountability provisions prescribed
 24-2    by the charter;
 24-3                (2)  failed to satisfy generally accepted accounting
 24-4    standards of fiscal management;
 24-5                (3)  failed to protect the health, safety, or welfare
 24-6    of the students enrolled at the school; or
 24-7                (4) [(3)]  failed to comply with this subchapter or
 24-8    another applicable law or rule.
 24-9          SECTION 17. Section 12.116, Education Code, is amended by
24-10    amending Subsection (b) and adding Subsection (c) to read as
24-11    follows:
24-12          (b)  The procedure adopted under Subsection (a) must provide
24-13    an opportunity for a hearing to the charter holder [person
24-14    operating the open-enrollment charter school] and to parents and
24-15    guardians of students in the school.  A hearing under this
24-16    subsection must be held at the facility at which the program is
24-17    operated.
24-18          (c)  Chapter 2001, Government Code, does not apply to a
24-19    hearing that is related to a modification, placement on probation,
24-20    revocation, or denial of renewal under this subchapter.
24-21          SECTION 18. Subchapter D, Chapter 12, Education Code, is
24-22    amended by adding Sections 12.1161 and 12.1162 to read as follows:
24-23          Sec. 12.1161.  EFFECT OF REVOCATION, DENIAL OF RENEWAL, OR
24-24    SURRENDER OF CHARTER. (a)  Except as provided by Subsection (b), if
24-25    the State Board of Education revokes or denies the renewal of a
24-26    charter of an open-enrollment charter school, or if an
24-27    open-enrollment charter school surrenders its charter, the school
 25-1    may not:
 25-2                (1)  continue to operate under this subchapter; or
 25-3                (2)  receive state funds under this subchapter.
 25-4          (b)  An open-enrollment charter school may continue to
 25-5    operate and receive state funds under this subchapter for the
 25-6    remainder of a school year if the board denies renewal of the
 25-7    school's charter before the completion of that school year.
 25-8          Sec. 12.1162.  EMERGENCY SUSPENSION.  (a)  The commissioner
 25-9    may temporarily withhold funding, suspend the authority of an
25-10    open-enrollment charter school to operate, or take any other
25-11    reasonable action the commissioner determines necessary to protect
25-12    the health, safety, or welfare of the students enrolled at the
25-13    school based on evidence that conditions at the school present a
25-14    danger to the health, safety, or welfare of students.
25-15          (b)  After the commissioner imposes a suspension under this
25-16    section, the open-enrollment charter school may not receive funding
25-17    and may not resume operating until a determination is made by the
25-18    commissioner or the State Board of Education that:
25-19                (1)  despite initial evidence, the conditions at the
25-20    school do not present a danger to the health, safety, or welfare of
25-21    students; or
25-22                (2)  the conditions at the school that presented a
25-23    danger to the health, safety, or welfare of students have been
25-24    corrected.
25-25          (c)  Not later than the third business day after the date the
25-26    commissioner imposes a suspension under this section, the
25-27    commissioner shall provide an opportunity for a hearing to the
 26-1    holder of the charter of the open-enrollment charter school.
 26-2          (d)  If the commissioner does not lift the suspension imposed
 26-3    under this section, the State Board of Education shall consider the
 26-4    suspension at the first regularly scheduled meeting of the board
 26-5    that occurs after the date the suspension is imposed.  At that
 26-6    meeting the board must lift the suspension or take action under
 26-7    Section 12.116.
 26-8          (e)  Chapter 2001, Government Code, does not apply to a
 26-9    suspension under this section.
26-10          SECTION 19.  Section 12.117, Education Code, is amended to
26-11    read as follows:
26-12          Sec. 12.117.  [APPLICATION FOR] ADMISSION.  (a)  For
26-13    admission to an open-enrollment charter school, the governing body
26-14    of [person operating] the school shall:
26-15                (1)  [may] require the applicant to complete and submit
26-16    an application not later than a reasonable deadline the school
26-17    establishes; and
26-18                (2)  on receipt of more acceptable applications for
26-19    admission under this section than available positions in the
26-20    school:
26-21                      (A)  fill the available positions by lottery; or
26-22                      (B)  subject to Subsection (b), fill the
26-23    available positions in the order in which applications received
26-24    before the application deadline were received. 
26-25          (b)  An open-enrollment charter school may fill applications
26-26    for admission under Subsection (a)(2)(B) only if the school
26-27    published a notice of the opportunity to apply for admission to the
 27-1    school.  A notice published under this subsection must:
 27-2                (1)  state the application deadline; and
 27-3                (2)  be published in a newspaper of general circulation
 27-4    in the community in which the school is located not later than the
 27-5    seventh day before the application deadline.
 27-6          SECTION 20.  Section 12.118, Education Code, is amended by
 27-7    amending Subsections (a) and (c) and adding Subsections (d) and (e)
 27-8    to read as follows:
 27-9          (a)  The State Board of Education [board] shall designate an
27-10    impartial organization with experience in evaluating school choice
27-11    programs to conduct an annual evaluation of open-enrollment charter
27-12    schools.
27-13          (c)  The evaluation of open-enrollment charter schools must
27-14    also include an evaluation of:
27-15                (1)  the costs of instruction, administration, and
27-16    transportation incurred by open-enrollment charter schools; [and]
27-17                (2)  whether school district or school campus employees
27-18    are informing students at risk of dropping out of school of the
27-19    opportunity to attend an open-enrollment charter school  for the
27-20    purpose of enabling the district or campus to avoid responsibility
27-21    for those students; and
27-22                (3)  the effect of open-enrollment charter schools on
27-23    school districts and on teachers, students, and parents in those
27-24    districts.
27-25          (d)  The evaluation of an open-enrollment charter school that
27-26    assists students in earning a high school diploma or high school
27-27    equivalency certificate  must also include an evaluation of:
 28-1                (1)  the quality of the educational program offered;
 28-2                (2)  the number of hours each school day the
 28-3    educational program is provided to a student;
 28-4                (3)  class size and the student/teacher ratio;
 28-5                (4)  student success in earning a high school diploma;
 28-6    and
 28-7                (5)  student success in earning a high school
 28-8    equivalency  certificate.
 28-9          (e)  For purposes of this section, "student at risk of
28-10    dropping out of school" has the meaning assigned by Section 29.081.
28-11          SECTION 21.  Subchapter D, Chapter 12, Education Code, is
28-12    amended by adding Sections 12.1181 and 12.1182 to read as follows:
28-13          Sec. 12.1181.  STUDY OF CHARTER SCHOOL INNOVATION.  (a)  The
28-14    agency shall study the instructional methods of open-enrollment
28-15    charter schools to determine:
28-16                (1)  the extent to which those schools are using
28-17    innovative educational concepts; and
28-18                (2)  whether any innovative educational concepts used
28-19    by those schools have resulted in improvements in:
28-20                      (A)  students' performance on assessment
28-21    instruments administered under Subchapter B, Chapter 39;
28-22                      (B)  student attendance; or
28-23                      (C)  students' grades.
28-24          (b)  The agency shall include the results of the study
28-25    conducted under this section in the report required under Section
28-26    39.182 that is due not later than December 1, 2002.
28-27          (c)  This section expires January 31, 2003.
 29-1          Sec. 12.1182.  STUDY OF PROCEDURES FOR OBTAINING INFORMATION
 29-2    FROM CHARTER SCHOOLS. (a)  The agency shall study the procedures by
 29-3    which the agency obtains information regarding the performance of
 29-4    open-enrollment charter schools, including information regarding
 29-5    the number of students attending those schools and the performance
 29-6    of those students and schools under the accountability system
 29-7    established by Subchapters B, C, D, and G, Chapter 39.
 29-8          (b)  In conducting the study, the agency shall:
 29-9                (1)  focus on the extent to which the existing
29-10    procedures for obtaining information results in current data that
29-11    is sufficient to permit effective and timely oversight of
29-12    open-enrollment charter schools;
29-13                (2)  solicit comments and suggestions from persons
29-14    involved or otherwise interested in the operation of
29-15    open-enrollment charter schools; and
29-16                (3)  develop recommendations for modifications in the
29-17    procedures for obtaining information, including any recommendations
29-18    requiring legislative action, that would improve the agency's
29-19    ability to obtain current information regarding open-enrollment
29-20    charter schools.
29-21          (c)  The agency shall include the results of the study
29-22    conducted under this section and the agency's recommendations
29-23    resulting from the study in the report required under Section
29-24    39.182 that is due not later than December 1, 2002.
29-25          (d)  This section expires January 1, 2003.
29-26          SECTION 22.  Section 12.119(a), Education Code, is amended to
29-27    read as follows:
 30-1          (a)  A charter holder [The entity to which a charter is
 30-2    granted for an open-enrollment charter school] shall file with the
 30-3    State Board of Education a copy of its articles of incorporation
 30-4    and bylaws, or [a] comparable documents [document] if the charter
 30-5    holder [entity] does not have articles of incorporation or bylaws,
 30-6    within the period and in the manner prescribed by the board.
 30-7          SECTION 23.  Section 12.120, Education Code, is amended to
 30-8    read as follows:
 30-9          Sec. 12.120.  RESTRICTIONS [LIMITATION] ON SERVING AS MEMBER
30-10    OF GOVERNING BODY OF CHARTER HOLDER, OFFICER, OR EMPLOYEE.  (a)  A
30-11    person may not serve as a member of the governing body of a charter
30-12    holder or as an officer or employee of an open-enrollment charter
30-13    school if:
30-14                (1)  the person [who] has been convicted of a felony or
30-15    a misdemeanor involving moral turpitude; or
30-16                (2)  the person or the person's spouse has a
30-17    substantial interest in a management company.
30-18          (b)  For purposes of Subsection (a)(2), a person has a
30-19    substantial interest in a management company if the person:
30-20                (1)  has a controlling interest in the company;
30-21                (2)  owns more than 10 percent of the voting interest
30-22    in the company;
30-23                (3)  owns more than $25,000 of the fair market value of
30-24    the company;
30-25                (4)  has a direct or indirect participating interest by
30-26    shares, stock, or otherwise, regardless of whether voting rights
30-27    are included, in more than 10 percent of the profits, proceeds, or
 31-1    capital gains of the company;
 31-2                (5)  is a member of the board of directors or other
 31-3    governing body of the company;
 31-4                (6)  serves as an elected officer of the company; or
 31-5                (7)  is an employee of the company [may not serve as an
 31-6    officer or member of the governing body of an open-enrollment
 31-7    charter school].
 31-8          SECTION 24.  Subchapter D, Chapter 12, Education Code, is
 31-9    amended by adding Sections 12.121-12.1281 to read as follows:
31-10          Sec. 12.121.  GENERAL POWERS AND DUTIES OF GOVERNING BODY OF
31-11    SCHOOL.  (a)  The governing body of an open-enrollment charter
31-12    school as a body corporate shall:
31-13                (1)  govern and oversee the management of the school,
31-14    including the use of state funds received under Section 12.106;
31-15                (2)  if the governing body determines that contracting
31-16    with a management company for the management of the school is
31-17    necessary and desirable, enter into a contract for management
31-18    services, subject to Section 12.125;
31-19                (3)  select, determine the compensation of, evaluate
31-20    the performance of, and, if necessary, terminate the employment of
31-21    the principal, director, or other chief operating officer of the
31-22    school;
31-23                (4)  approve the employment, compensation, promotion,
31-24    demotion, or termination of employment of other professional
31-25    employees of the school;
31-26                (5)  adopt and amend a budget for each school year and
31-27    ensure that funds received under Section 12.106 are spent only as
 32-1    provided for in the budget;
 32-2                (6)  ensure that the school complies with Subchapters
 32-3    A, B, and E, Chapter 29; and
 32-4                (7)  select textbooks for the school as required by
 32-5    Section 31.101.
 32-6          (b)  Except as provided by Section 12.111(9), the governing
 32-7    body of an open-enrollment charter school may not delegate the
 32-8    governing body's powers and duties under this subchapter to another
 32-9    person.
32-10          (c)  The governing body of an open-enrollment charter school
32-11    shall provide for appeals to the governing body or its designee
32-12    concerning student expulsions.
32-13          Sec. 12.122.  LIABILITY OF MEMBERS OF GOVERNING BODY OF
32-14    CHARTER HOLDER AND MEMBER OF GOVERNING BODY OF SCHOOL. (a)
32-15    Notwithstanding the Texas Non-Profit Corporation Act (Article
32-16    1396-1.01 et seq., Vernon's Texas Civil Statutes) or other law, a
32-17    member of the governing body of a charter holder or a member of the
32-18    governing body of an open-enrollment charter school is personally
32-19    liable for:
32-20                (1)  a misapplication of state funds received by the
32-21    charter holder under Section 12.106, including any use of the funds
32-22    that results in an improper personal benefit for the member; and
32-23                (2)  a misapplication of property purchased or leased
32-24    with state funds received by the charter holder under Section
32-25    12.106, including any use of the property that results in an
32-26    improper personal benefit for the member.
32-27          (b)  If a charter holder receives state funds under Section
 33-1    12.106 after September 1, 2001, a member of the governing body of
 33-2    the charter holder or a member of the governing body of the school
 33-3    who serves in that capacity after September 1, 2001, accepts the
 33-4    liability imposed by Subsection (a) as to any state funds accepted
 33-5    under Section 12.106 during the person's service on the governing
 33-6    body.
 33-7          (c)  In approving or agreeing to the use of state funds, a
 33-8    member of the governing body of a charter holder or a member of the
 33-9    governing body of an open-enrollment charter school is not liable
33-10    under this section if the member relied in good faith on the advice
33-11    of legal counsel that the use was authorized under Section
33-12    12.106(c)(3).
33-13          (d)  A person held liable under this section is entitled to
33-14    contribution from any other person who knowingly accepted or
33-15    received funds in violation of this chapter, in proportion to the
33-16    amount of funds accepted or received by that person.
33-17          Sec. 12.123.  TRAINING FOR MEMBERS OF GOVERNING BODY OF
33-18    SCHOOL AND OFFICERS. (a)  The State Board of Education shall adopt
33-19    rules prescribing training for:
33-20                (1)  members of governing bodies of open-enrollment
33-21    charter schools; and
33-22                (2)  officers of open-enrollment charter schools.
33-23          (b)  The rules adopted under Subsection (a) must:
33-24                (1)  specify the minimum amount and frequency of the
33-25    training;
33-26                (2)  require the training to be provided by:
33-27                      (A)  the agency and regional education service
 34-1    centers;
 34-2                      (B)  entities other than the agency and service
 34-3    centers, subject to approval by the board; or
 34-4                      (C)  both the agency, service centers, and other
 34-5    entities;
 34-6                (3)  require training to be provided concerning:
 34-7                      (A)  basic school law, including school finance;
 34-8                      (B)  health and safety issues;
 34-9                      (C)  accountability requirements related to the
34-10    use of public funds; and
34-11                      (D)  other requirements relating to
34-12    accountability to the public, such as open meetings requirements
34-13    under Chapter 551, Government Code, and public information
34-14    requirements under Chapter 552, Government Code; and
34-15                (4)  require reporting to the agency to permit the
34-16    agency to monitor compliance with this section.
34-17          (c)  A person described by Subsection (a) must complete the
34-18    minimum training required by rules adopted under Subsection (a).
34-19          (d)  If a person described by Subsection (a) does not
34-20    complete the minimum training, the State Board of Education shall
34-21    direct the charter holder to remove the person failing to complete
34-22    the training or terminate that person's employment.  If the person
34-23    is not removed or the person's employment is not terminated, the
34-24    board shall place on probation or revoke the school's charter as
34-25    provided by Sections 12.115 and 12.116.
34-26          Sec. 12.124.  LOANS FROM MANAGEMENT COMPANY PROHIBITED.  (a)
34-27    The charter holder or the governing body of an open-enrollment
 35-1    charter school may not accept a loan from a management company that
 35-2    has a contract to provide management services to:
 35-3                (1)  that charter school; or
 35-4                (2)  another charter school that operates under a
 35-5    charter granted to the charter holder.
 35-6          (b)  A charter holder or the governing body of an
 35-7    open-enrollment charter school that accepts a loan from a
 35-8    management company may not enter into a contract with that
 35-9    management company to provide management services to the school.
35-10          Sec. 12.125.  APPROVAL OF MANAGEMENT CONTRACT.  (a)  An
35-11    open-enrollment charter school shall submit to the commissioner for
35-12    approval any proposed contract, including a contract renewal,
35-13    between the school and a management company proposing to provide
35-14    management services to the school.  The contract may not take
35-15    effect until approved by the commissioner.
35-16          (b)  The commissioner shall adopt criteria to use in
35-17    determining whether to approve a contract submitted under this
35-18    section. The criteria must require a management company to
35-19    demonstrate that the company:
35-20                (1)  possesses substantial experience and expertise
35-21    relevant to providing management services in an educational
35-22    setting;
35-23                (2)  has a reliable record of providing management
35-24    services in an educational setting, without:
35-25                      (A)  a previous denial of approval, denial of
35-26    renewal, suspension, or revocation of a contract under Subsection
35-27    (d), provided that the contract was held by a management company
 36-1    managed in whole or in part by the company; or
 36-2                      (B)  unjustified failures to provide services in
 36-3    compliance with a contractual or other legal obligation to any
 36-4    open-enrollment charter school in this state or to any other
 36-5    similar school in another state;
 36-6                (3)  has the personnel, financial assets, and other
 36-7    resources necessary to enable the company to provide high-quality,
 36-8    reliable management services to an open-enrollment charter school;
 36-9    and
36-10                (4)  does not employ a person the commissioner finds to
36-11    have engaged in conduct described by Subsection (d).
36-12          (c)  As provided by Section 12.107, if a charter holder
36-13    receives state funds under Section 12.106 after September 1, 2001,
36-14    a contract to provide management services to an open-enrollment
36-15    charter school for the 2001-2002 or a later school year that was
36-16    executed before September 1, 2001, has no effect for the 2001-2002
36-17    or a later school year unless the contract is approved as provided
36-18    by this section.
36-19          (d)  The commissioner may deny approval of, deny renewal of,
36-20    suspend, or revoke a contract if the management company:
36-21                (1)  fails to provide educational or related services
36-22    in compliance with the company's contractual or other legal
36-23    obligation to any open-enrollment charter school in this state or
36-24    to any other similar school in another state;
36-25                (2)  fails to protect the health, safety, or welfare of
36-26    the students enrolled at an open-enrollment charter school served
36-27    by the company, as determined by the commissioner;
 37-1                (3)  violates this subchapter or a rule adopted under
 37-2    this subchapter;
 37-3                (4)  engages in conduct that could result in action
 37-4    under Sections 12.115 and 12.116;
 37-5                (5)  refuses, after reasonable notice, to meet
 37-6    reasonable health and safety requirements within the company's
 37-7    control and made known to the company by a federal or state agency
 37-8    or by a political subdivision of this state; or
 37-9                (6)  compromises a charter school's eligibility under
37-10    Section 12.101(a)(3).
37-11          (e)  The commissioner shall adopt rules to administer this
37-12    section.
37-13          (f)  A management contract approved by the commissioner under
37-14    this section is not assignable.
37-15          Sec. 12.126.  LIABILITY OF MANAGEMENT COMPANY.  (a)  A
37-16    management company that provides management services to an
37-17    open-enrollment charter school is liable for damages incurred by
37-18    the state or an affected school district as a result of the failure
37-19    of the company to comply with its contractual or other legal
37-20    obligation to provide services to the school.
37-21          (b)  On request of the State Board of Education, the attorney
37-22    general may bring suit on behalf of the state or any affected
37-23    school district against a management company liable under
37-24    Subsection (a) for:
37-25                (1)  damages, including any state funding received by
37-26    the company and any consequential damages suffered by the state or
37-27    affected school district;
 38-1                (2)  injunctive relief; or
 38-2                (3)  any other equitable remedy determined to be
 38-3    appropriate by the court.
 38-4          (c)  With the approval of the attorney general, an affected
 38-5    school district may participate in a suit brought by the attorney
 38-6    general under Subsection (b).  An affected school district is not
 38-7    entitled to bring suit on its own behalf against a management
 38-8    company liable under Subsection (a).
 38-9          (d)  This section is cumulative of all other remedies and
38-10    does not affect:
38-11                (1)  the liability of a management company to the
38-12    charter holder; or
38-13                (2)  the liability of a charter holder, a member of the
38-14    governing body of a charter holder, or a member of the governing
38-15    body of an open-enrollment charter school to the state.
38-16          Sec. 12.127.  PROPERTY PURCHASED OR LEASED WITH STATE FUNDS.
38-17    (a)  Property purchased or leased with funds received by a charter
38-18    holder under Section 12.106 after September 1, 2001:
38-19                (1)  is considered to be public property for all
38-20    purposes under state law;
38-21                (2)  is held in trust by the charter holder for the
38-22    benefit of the students of the open-enrollment charter school; and
38-23                (3)  may be used only for a purpose for which a school
38-24    district may use school district property.
38-25          (b)  If at least 50 percent of the funds used by a charter
38-26    holder to purchase real property are funds received under Section
38-27    12.106 before September 1, 2001, the property is considered to be
 39-1    public property to the extent it was purchased with those funds.
 39-2          (c)  The commissioner shall:
 39-3                (1)  take possession and assume control of the property
 39-4    described by Subsection (a)  of an open-enrollment charter school
 39-5    that ceases to operate; and
 39-6                (2)  supervise the disposition of the property in
 39-7    accordance with law.
 39-8          (d)  The commissioner may adopt rules necessary to administer
 39-9    this section.
39-10          (e)  This section does not affect a security interest in or
39-11    lien on property established by a creditor in compliance with law
39-12    if the security interest or lien arose in connection with the sale
39-13    or lease of the property to the charter holder.
39-14          Sec. 12.128.  MINIMUM TEACHER QUALIFICATIONS.  (a)  A person
39-15    employed as a teacher by an open-enrollment charter school must
39-16    hold a high school diploma or high school equivalency certificate.
39-17          (b)  Unless otherwise approved by the commissioner, a person
39-18    employed as a teacher by an open-enrollment charter school and
39-19    assigned to teach a subject in the foundation curriculum under
39-20    Section 28.002(a)(1) must hold:
39-21                (1)  a bachelor's or more advanced degree from an
39-22    institution of higher education; or
39-23                (2)  a teaching certificate from an institution
39-24    equivalent to an institution of higher education that offers
39-25    recognized teaching certification.
39-26          Sec. 12.1281.  EXCEPTION TO MINIMUM TEACHER QUALIFICATIONS.
39-27    (a)  Notwithstanding Section 12.128(b), a person employed as a
 40-1    teacher by an open-enrollment charter school during the 2000-2001
 40-2    school year is not required to hold a bachelor's or more advanced
 40-3    degree for employment as a teacher by an open-enrollment charter
 40-4    school to teach a subject in the foundation curriculum under
 40-5    Section 28.002(a)(1) if:
 40-6                (1)  the person is employed under a contract that
 40-7    guarantees the person the right to remain employed for the
 40-8    2001-2002 or a later school year;
 40-9                (2)  the person holds a high school diploma or high
40-10    school equivalency certificate;
40-11                (3)  not later than January 1, 2002, the person enrolls
40-12    in an institution of higher education in a program under which the
40-13    person will obtain a bachelor's degree not later than June 30,
40-14    2007;
40-15                (4)  the person makes satisfactory progress in the
40-16    program described by Subdivision (3); and
40-17                (5)  the person obtains a bachelor's degree not later
40-18    than June 30, 2007.
40-19          (b)  This section expires July 1, 2007.
40-20          SECTION 25. Section 22.083, Education Code, is amended to
40-21    read as follows:
40-22          Sec. 22.083.  ACCESS TO CRIMINAL HISTORY RECORDS BY LOCAL AND
40-23    REGIONAL EDUCATION AUTHORITIES.  (a)  A school district,
40-24    [open-enrollment charter school,] private school, regional
40-25    education service center, or shared services arrangement may obtain
40-26    from any law enforcement or criminal justice agency all criminal
40-27    history record information that relates to a person:
 41-1                (1)  whom the district, school, service center, or
 41-2    shared services arrangement intends to employ in any capacity; or
 41-3                (2)  who has indicated, in writing, an intention to
 41-4    serve as a volunteer with the district, school, service center, or
 41-5    shared services arrangement.
 41-6          (b)  An open-enrollment charter school shall obtain from any
 41-7    law enforcement or criminal justice agency all criminal history
 41-8    record information that relates to:
 41-9                (1)  a person whom the school intends to employ in a
41-10    capacity described by Section 21.003(a) and who does not hold a
41-11    certificate issued under Subchapter B, Chapter 21; and
41-12                (2)  a person who serves as or agrees to serve as a
41-13    member of the governing body of the school.
41-14          (c)  An open-enrollment charter school may obtain from any
41-15    law enforcement or criminal justice agency all criminal history
41-16    record information that relates to a person:
41-17                (1)  whom the school intends to employ in a capacity
41-18    other than a capacity described by Section 21.003(a); or
41-19                (2)  who has indicated, in writing, an intention to
41-20    serve as a volunteer with the school.
41-21          (d)  A school district, open-enrollment charter school,
41-22    private school, regional education service center, or shared
41-23    services arrangement may obtain from any law enforcement or
41-24    criminal justice agency all criminal history record information
41-25    that relates to:
41-26                (1)  a volunteer or employee of the district, school,
41-27    service center, or shared services arrangement; or
 42-1                (2)  an employee of or applicant for employment by a
 42-2    person that contracts with the district, school, service center, or
 42-3    shared services arrangement to provide services, if:
 42-4                      (A)  the employee or applicant has or will have
 42-5    continuing  duties related to the contracted services; and
 42-6                      (B)  the duties are or will be performed on
 42-7    school property or at another location where students are regularly
 42-8    present.
 42-9          (e) [(c)]  The superintendent of a district or the director
42-10    of an open-enrollment charter school, private school, regional
42-11    education service center, or shared services arrangement shall
42-12    promptly notify the State Board for Educator Certification in
42-13    writing if the person obtains or has knowledge of information
42-14    showing that an applicant for or holder of a certificate issued
42-15    under Subchapter B, Chapter 21, has a reported criminal history.
42-16          SECTION 26.  Section 25.088, Education Code, is amended to
42-17    read as follows:
42-18          Sec. 25.088.  SCHOOL ATTENDANCE OFFICER. The school
42-19    attendance officer may be selected by:
42-20                (1)  the county school trustees of any county; [or]
42-21                (2)  the board of trustees of any school district or
42-22    the boards of trustees of two or more school districts jointly; or
42-23                (3)  the governing body of an open-enrollment charter
42-24    school.
42-25          SECTION 27.  Section 25.089(a), Education Code, is amended to
42-26    read as follows:
42-27          (a)  An attendance officer may be compensated from the funds
 43-1    of the county, [or the] independent school district, or
 43-2    open-enrollment charter school, as applicable.
 43-3          SECTION 28.  Section 25.090, Education Code, is amended to
 43-4    read as follows:
 43-5          Sec. 25.090.  ATTENDANCE OFFICER NOT SELECTED. (a)  In those
 43-6    counties and independent school districts where an attendance
 43-7    officer has not been selected, the duties of attendance officer
 43-8    shall be performed by the school superintendents and peace officers
 43-9    of the counties and districts.
43-10          (b)  If the governing body of an open-enrollment charter
43-11    school has not selected an attendance officer, the duties of
43-12    attendance officer shall be performed by the peace officers of the
43-13    county in which the school is located.
43-14          (c)  Additional compensation may not be paid for [the]
43-15    services performed under this section.
43-16          SECTION 29.  Sections 25.093(f) and (g), Education Code, are
43-17    amended to read as follows:
43-18          (f)  A fine collected under this section shall be deposited
43-19    as follows:
43-20                (1)  one-half shall be deposited to the credit of the
43-21    operating fund of, as applicable:
43-22                      (A)  the school district in which the child
43-23    attends school;
43-24                      (B)  the open-enrollment charter school the child
43-25    attends; or
43-26                      (C)  [of] the juvenile justice alternative
43-27    education program that the child has been ordered to attend[, as
 44-1    applicable]; and
 44-2                (2)  one-half shall be deposited to the credit of:
 44-3                      (A)  the general fund of the county, if the
 44-4    complaint is filed in the county court or justice court; or
 44-5                      (B)  the general fund of the municipality, if the
 44-6    complaint is filed in municipal court.
 44-7          (g)  At the trial of any person charged with violating this
 44-8    section, the attendance records of the child may be presented in
 44-9    court by any authorized employee of the school district or
44-10    open-enrollment charter school, as applicable.
44-11          SECTION 30.  Section 25.095(a), Education Code, is amended to
44-12    read as follows:
44-13          (a)  A school district or open-enrollment charter school
44-14    shall notify a student's parent in writing if, in a six-month
44-15    period, the student has been absent without an excuse five times
44-16    for any part of the day.  The notice must state that if the student
44-17    is absent without an excuse for 10 or more days or parts of days in
44-18    a six-month period:
44-19                (1)  the student's parent is subject to prosecution
44-20    under Section 25.093; and
44-21                (2)  the student is subject to prosecution under
44-22    Section 25.094.
44-23          SECTION 31.  Section 39.075(a), Education Code, is amended to
44-24    read as follows:
44-25          (a)  The commissioner shall authorize special accreditation
44-26    investigations to be conducted under the following circumstances:
44-27                (1)  when excessive numbers of absences of students
 45-1    eligible to be tested on state assessment instruments are
 45-2    determined;
 45-3                (2)  when excessive numbers of allowable exemptions
 45-4    from the required state assessment are determined;
 45-5                (3)  in response to complaints submitted to the agency
 45-6    with respect to alleged violations of civil rights or other
 45-7    requirements imposed on the state by federal law or court order;
 45-8                (4)  in response to established compliance reviews of
 45-9    the district's financial accounting practices and state and federal
45-10    program requirements;
45-11                (5)  when extraordinary numbers of student placements
45-12    in alternative education programs, other than placements under
45-13    Sections 37.006 and 37.007, are determined; [or]
45-14                (6)  in response to an allegation involving a conflict
45-15    between members of the board of trustees or between the board and
45-16    the district administration if it appears that the conflict
45-17    involves a violation of a role or duty of the board members or the
45-18    administration clearly defined by this code; or
45-19                (7)  in response to an allegation that school district
45-20    or school campus employees are informing students at risk of
45-21    dropping out of school, as defined by Section 29.081, of the
45-22    opportunity to attend an open-enrollment charter school  for the
45-23    purpose of enabling the district or campus to avoid responsibility
45-24    for those students.
45-25          SECTION 32.  Subchapter A, Chapter 46, Education Code, is
45-26    amended by adding Section 46.012 to read as follows:
45-27          Sec. 46.012.  APPLICABILITY TO OPEN-ENROLLMENT CHARTER
 46-1    SCHOOLS. An open-enrollment charter school is not entitled to an
 46-2    allotment under this subchapter.
 46-3          SECTION 33.  Subchapter B, Chapter 46, Education Code, is
 46-4    amended by adding Section 46.036 to read as follows:
 46-5          Sec. 46.036.  APPLICABILITY TO OPEN-ENROLLMENT CHARTER
 46-6    SCHOOLS. An open-enrollment charter school is not entitled to an
 46-7    allotment under this subchapter.
 46-8          SECTION 34.  Section 411.097, Government Code, is amended by
 46-9    amending Subsections (c) and (d) and adding Subsection (e) to read
46-10    as follows:
46-11          (c)  An open-enrollment charter school is entitled to obtain
46-12    from the department criminal history record information maintained
46-13    by the department that the school is required to obtain under
46-14    Subchapter C, Chapter 22, Education Code, that relates to a person
46-15    who:
46-16                (1)  is a member of the governing body of the school,
46-17    as defined by Section 12.1012, Education Code; or
46-18                (2)  has agreed to serve as a member of the governing
46-19    body of the school.
46-20          (d)  Criminal history record information obtained by a school
46-21    district, charter school, private school, service center,
46-22    commercial transportation company, or shared services arrangement
46-23    under Subsection (a), [or] (b), or (c) may not be released or
46-24    disclosed to any person, other than the individual who is the
46-25    subject of the information, the Texas Education Agency, the State
46-26    Board for Educator Certification, or the chief personnel officer of
46-27    the transportation company, if the information is obtained under
 47-1    Subsection (a)(2).
 47-2          (e) [(d)]  If a regional education service center or
 47-3    commercial transportation company that receives criminal history
 47-4    record information from the department under this section requests
 47-5    the information by providing to the department a list, including
 47-6    the name, date of birth, and any other personal descriptive
 47-7    information required by the department for each person, through
 47-8    electronic means, magnetic tape, or disk, as specified by the
 47-9    department, the department may not charge the service center or
47-10    commercial transportation company more than the lesser of:
47-11                (1)  the department's cost for providing the
47-12    information; or
47-13                (2)  the amount prescribed by another law.
47-14          SECTION 35.  Section 140.005, Local Government Code, is
47-15    amended to read as follows:
47-16          Sec. 140.005.  ANNUAL FINANCIAL STATEMENT OF SCHOOL, ROAD, OR
47-17    OTHER DISTRICT.  The governing body of a school district,
47-18    open-enrollment charter school, junior college district, or a
47-19    district or authority organized under Article III, Section 52, or
47-20    Article XVI, Section 59, of the Texas Constitution, shall prepare
47-21    an annual financial statement showing for each fund subject to the
47-22    authority of the governing body during the fiscal year:
47-23                (1)  the total receipts of the fund, itemized by source
47-24    of revenue, including taxes, assessments, service charges, grants
47-25    of state money, gifts, or other general sources from which funds
47-26    are derived;
47-27                (2)  the total disbursements of the fund, itemized by
 48-1    the nature of the expenditure; and
 48-2                (3)  the balance in the fund at the close of the fiscal
 48-3    year.
 48-4          SECTION 36.  Sections 140.006(c) and (d), Local Government
 48-5    Code, are amended to read as follows:
 48-6          (c)  The presiding officer of a school district or
 48-7    open-enrollment charter school shall submit a financial statement
 48-8    prepared under Section 140.005 to a daily, weekly, or biweekly
 48-9    newspaper published within the boundaries of the district or the
48-10    geographical area served by the charter school.  If a daily,
48-11    weekly, or biweekly newspaper is not published within the
48-12    boundaries of the school district, the financial statement shall be
48-13    published in the manner provided by Subsections (a) and (b).  If a
48-14    daily, weekly, or biweekly newspaper is not published within the
48-15    area served by the charter school, the financial statement shall be
48-16    published in a newspaper that has general circulation in the area
48-17    served by the charter school.
48-18          (d)  A statement shall be published not later than two months
48-19    after the date the fiscal year ends, except that a school
48-20    district's or charter school's statement shall be published not
48-21    later than the 120th day after the date the fiscal year ends and in
48-22    accordance with the accounting method required by the Texas
48-23    [Central] Education Agency.
48-24          SECTION 37.  (a)  The Texas Education Agency shall
48-25    investigate existing open-enrollment charter schools to determine
48-26    if any of those schools are operating in a manner that effectively
48-27    requires students to possess special artistic, athletic, or other
 49-1    abilities, the consideration of which in admissions policies is
 49-2    prohibited under Section 12.111, Education Code, as amended by this
 49-3    Act.
 49-4          (b)  Not later than January 1, 2002, the Texas Education
 49-5    Agency shall report any violations to the State Board of Education,
 49-6    and that board shall take appropriate action.
 49-7          SECTION 38.  Not later than January 1, 2002, the State Board
 49-8    of Education shall adopt rules relating to training for the members
 49-9    of governing bodies and officers of open-enrollment charter
49-10    schools, as required by Section 12.123, Education Code, as added by
49-11    this Act.
49-12          SECTION 39.  Not later than November 1, 2001, the
49-13    commissioner of education shall adopt the criteria concerning
49-14    approval of open-enrollment charter school management contracts as
49-15    required under Section 12.125(b), Education Code, as added by this
49-16    Act.
49-17          SECTION 40.  (a)  Beginning September 1, 2001, an
49-18    open-enrollment charter school shall obtain, in compliance with
49-19    Section 22.083, Education Code, as amended by this Act, criminal
49-20    history record information relating to:
49-21                (1)  each prospective employee whom the school intends
49-22    to employ in a capacity described by Section 21.003(a), Education
49-23    Code, and who does not hold a certificate issued under Subchapter
49-24    B, Chapter 21, Education Code; and
49-25                (2)  each person who agrees to serve as a member of the
49-26    governing body of the school.
49-27          (b)  Not later than January 1, 2002, an open-enrollment
 50-1    charter school shall obtain, in compliance with Section 22.083,
 50-2    Education Code, as amended by this Act, all criminal history record
 50-3    information that relates to:
 50-4                (1)  a person whom the school initially employed in a
 50-5    capacity described by Section 21.003(a), Education Code, on or
 50-6    before September 1, 2001, other than a person:
 50-7                      (A)  who holds a certificate issued under
 50-8    Subchapter B, Chapter 21, Education Code;
 50-9                      (B)  whom the school will not employ after
50-10    January 1, 2002; or
50-11                      (C)  as to whom the school obtained criminal
50-12    history record information under Section 22.083, Education Code, at
50-13    the time of the person's initial employment or subsequent to the
50-14    initial employment; and
50-15                (2)  a person who serves as a member of the governing
50-16    body of the school other than a person:
50-17                      (A)  who holds a certificate issued under
50-18    Subchapter B, Chapter 21, Education Code; or
50-19                      (B)  who will not be serving on the governing
50-20    body after January 1, 2002.
50-21          SECTION 41.  Not later than September 1, 2002, an
50-22    open-enrollment charter school in existence on September 1, 2001,
50-23    shall fulfill the requirements of Sections 203.025, 203.026, and
50-24    203.041, Local Government Code.
50-25          SECTION 42.  (a)  The change in law made by Sections 12.106
50-26    and 12.107, Education Code, as amended by this Act, apply beginning
50-27    with the 2003-2004 school year.
 51-1          (b)  The change in law made by Section 12.114, Education
 51-2    Code, as amended by this Act, applies to a revision proposed by an
 51-3    open-enrollment charter school that has not been approved by the
 51-4    State Board of Education before September 1, 2001, regardless of
 51-5    the date on which the school proposed the revision.
 51-6          (c)  The change in law made by Section 12.126, Education
 51-7    Code, as added by this Act, applies only to a cause of action that
 51-8    accrues on or after September 1, 2001.  A cause of action that
 51-9    accrued before September 1, 2001, is governed by the law in effect
51-10    at the time the cause of action accrued, and that law is continued
51-11    in effect for that purpose.
51-12          SECTION 43.  This Act takes effect September 1, 2001.