77R10476 BDH-D                           
         By Dunnam, Smith, Olivo, Hardcastle, Dutton,             H.B. No. 6
            et al.
         Substitute the following for H.B. No. 6:
         By Oliveira                                          C.S.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. Subchapter D, Chapter 12, Education Code, is
 1-5     amended by adding Sections 12.1012-12.1015 to read as follows:
 1-6           Sec. 12.1012.  DEFINITIONS. In this subchapter:
 1-7                 (1)  "Charter holder" means the entity to which a
 1-8     charter is granted under this subchapter.
 1-9                 (2)  "Governing body of a charter holder" means the
1-10     board of directors, board of trustees, or other governing body of a
1-11     charter holder.
1-12                 (3)  "Governing body of an open-enrollment charter
1-13     school" means the board of directors, board of trustees, or other
1-14     governing body of an open-enrollment charter school.  The term
1-15     includes the governing body of a charter holder if that body acts
1-16     as the governing body of the open-enrollment charter school.
1-17                 (4)  "Management company" means a person, other than a
1-18     charter holder, who provides management services for an
1-19     open-enrollment charter school.
1-20                 (5)  "Management services" means services related to
1-21     the management or operation of an open-enrollment charter school,
1-22     including:
1-23                       (A)  planning, operating, supervising, and
1-24     evaluating the school's educational programs, services, and
 2-1     facilities;
 2-2                       (B)  making recommendations to the governing body
 2-3     of the school relating to the selection of school personnel;
 2-4                       (C)  managing the school's day-to-day operations
 2-5     as its administrative manager;
 2-6                       (D)  preparing and submitting to the governing
 2-7     body of the school a proposed budget;
 2-8                       (E)  recommending policies to be adopted by the
 2-9     governing body of the school, developing appropriate procedures to
2-10     implement policies adopted by the governing body of the school, and
2-11     overseeing the implementation of adopted policies; and
2-12                       (F)  providing leadership for the attainment of
2-13     student performance at the school based on the indicators adopted
2-14     under Section 39.051 or by the governing body of the school.
2-15                 (6)  "Officer of an open-enrollment charter school"
2-16     means:
2-17                       (A)  the principal, director, or other chief
2-18     operating officer of an open-enrollment charter school;
2-19                       (B)  an assistant principal or assistant director
2-20     of an open-enrollment charter school; or
2-21                       (C)  a person charged with managing the finances
2-22     of an open-enrollment charter school.
2-23           Sec. 12.1013.  DELEGATION BY STATE BOARD OF EDUCATION. (a)
2-24     The State Board of Education may delegate to the commissioner any
2-25     power or duty of the board under this subchapter, other than the
2-26     power to grant, deny, modify, place on probation, deny renewal of,
2-27     or revoke a charter for an open-enrollment charter school.
 3-1           (b)  The commissioner may conduct hearings on any issue as to
 3-2     which a hearing is authorized under this subchapter.
 3-3           Sec. 12.1014.  MINIMUM STUDENT ENROLLMENT. (a)  The State
 3-4     Board of Education may not grant a charter to or renew the charter
 3-5     of an open-enrollment charter school unless the board determines
 3-6     that the school will have and maintain an enrollment of at least 50
 3-7     students, except that a school may have an enrollment of not fewer
 3-8     than 20 students if the board specifically finds that the nature of
 3-9     the school requires an enrollment of fewer than 50 students.
3-10           (b)  The State Board of Education may revoke an
3-11     open-enrollment charter school's charter if, for a period
3-12     prescribed by board rule, the school's enrollment is lower than the
3-13     number of students authorized under Subsection (a).
3-14           Sec. 12.1015.  MORATORIUM ON NEW CHARTERS.  (a)
3-15     Notwithstanding Sections 12.101 and 12.1011, the State Board of
3-16     Education may not issue a charter for an open-enrollment charter
3-17     school after August 31, 2001.
3-18           (b)  This section expires September 1, 2003.
3-19           SECTION 2.  Section 12.103, Education Code, is amended to
3-20     read as follows:
3-21           Sec. 12.103.  GENERAL APPLICABILITY OF LAWS AND RULES TO
3-22     OPEN-ENROLLMENT CHARTER SCHOOL. (a)  Except as provided by
3-23     Subsection (b) or (c), an [An] open-enrollment charter school is
3-24     subject to federal and state laws and rules governing public
3-25     schools or public school districts, including state laws listed in
3-26     Sections 12.1051 and 12.1053.
3-27           (b)  An [except that an] open-enrollment charter school is
 4-1     subject to this code and rules adopted under this code only to the
 4-2     extent the applicability to an open-enrollment charter school of a
 4-3     provision of this code or a rule adopted under this code is
 4-4     specifically provided.
 4-5           (c)  An open-enrollment charter school is not subject to a
 4-6     state law or rule governing public school districts if the
 4-7     commissioner determines it is impracticable or inefficient to apply
 4-8     the law or rule to open-enrollment charter schools.
 4-9           SECTION 3. Section 12.104, Education Code, is amended by
4-10     amending Subsection (b) and adding Subsections (c) and (d) to read
4-11     as follows:
4-12           (b)  An open-enrollment charter school is subject to:
4-13                 (1)  a provision of this title establishing a criminal
4-14     offense; and
4-15                 (2)  a prohibition, restriction, or requirement, as
4-16     applicable, imposed by this title or a rule adopted under this
4-17     title, relating to:
4-18                       (A)  the Public Education Information Management
4-19     System (PEIMS) to the extent necessary to monitor compliance with
4-20     this subchapter as determined by the commissioner;
4-21                       (B)  criminal history records under Subchapter C,
4-22     Chapter 22;
4-23                       (C)  reading instruments and accelerated reading
4-24     instruction programs under Section 28.006;
4-25                       (D)  satisfactory performance on assessment
4-26     instruments and to accelerated instruction under Section 28.0211;
4-27                       (E)  high school graduation under Section 28.025;
 5-1                       (F)  special education programs under Subchapter
 5-2     A, Chapter 29;
 5-3                       (G)  bilingual education under Subchapter B,
 5-4     Chapter 29;
 5-5                       (H)  prekindergarten programs under Subchapter E,
 5-6     Chapter 29;
 5-7                       (I)  extracurricular activities under Section
 5-8     33.081;
 5-9                       (J)  health and safety under Chapter 38; [and]
5-10                       (K)  public school accountability under
5-11     Subchapters B, C, D, and G, Chapter 39; and
5-12                       (L)  purchasing and contracting under Subchapter
5-13     B, Chapter 44.
5-14           (c)  To the extent the commissioner determines is necessary
5-15     or advisable to provide and account for state funding of
5-16     open-enrollment charter schools under Section 12.106, the
5-17     commissioner may adopt rules applying provisions of this code other
5-18     than those listed in Subsection (b) to open-enrollment charter
5-19     schools.
5-20           (d)  An open-enrollment charter school is subject to the
5-21     requirement relating to the length of the school day under Section
5-22     25.082 unless the commissioner grants the open-enrollment charter
5-23     school a waiver from that requirement under Section 12.1041.
5-24           SECTION 4.  Subchapter D, Chapter 12, Education Code, is
5-25     amended by adding Section 12.1041 to read as follows:
5-26           Sec. 12.1041.  WAIVER OF REQUIREMENT RELATING TO LENGTH OF
5-27     SCHOOL DAY. (a)  An open-enrollment charter school that, for
 6-1     purposes of Section 12.104(d), is seeking a waiver of the
 6-2     requirement relating to the length of the school day under Section
 6-3     25.082 must submit a written application to the commissioner not
 6-4     later than the 31st day before the date the open-enrollment charter
 6-5     school intends to provide a  shorter school day.  The application
 6-6     must include a statement of achievement objectives of the
 6-7     open-enrollment charter school and the inhibition imposed on those
 6-8     objectives by the requirement.
 6-9           (b)  Subject to Subsection (c), the commissioner may not deny
6-10     an application for a waiver under this section submitted by an
6-11     open-enrollment charter school rated as academically acceptable or
6-12     higher under Chapter 39 for each of the preceding three school
6-13     years.
6-14           (c)  The commissioner may not grant a waiver under this
6-15     section if, as determined by the commissioner, a purpose of the
6-16     waiver application is to support any athletic or artistic activity.
6-17           (d)  If the commissioner objects to the application for the
6-18     waiver, not later than the 30th day after the date the commissioner
6-19     receives the application the commissioner must notify the
6-20     open-enrollment charter school in writing that the application is
6-21     denied.  If the commissioner does not notify the school of a denial
6-22     within that period, the application is considered approved.
6-23           (e)  A waiver granted under this section is effective for the
6-24     period stated in the application, which may not exceed three years.
6-25     An open-enrollment charter school for which the requirement under
6-26     Section 25.082 is waived under this section for a period of three
6-27     years may receive an exemption from that requirement at the end of
 7-1     that period if the school has fulfilled the achievement objectives
 7-2     stated in the application.  The exemption remains in effect until
 7-3     the commissioner determines that achievement levels of the school
 7-4     have declined.
 7-5           SECTION 5.  Subchapter D, Chapter 12, Education Code, is
 7-6     amended by amending Section 12.105 and adding Sections
 7-7     12.1051-12.1055 to read as follows:
 7-8           Sec. 12.105.  STATUS.  [(a)]  An open-enrollment charter
 7-9     school is part of the public school system of this state.
7-10           Sec. 12.1051.  APPLICABILITY OF OPEN MEETINGS AND PUBLIC
7-11     INFORMATION LAWS. (a) [(b)]  The governing body of a charter holder
7-12     and the governing body of an open-enrollment charter [the] school
7-13     are [is] considered to be [a] governmental bodies [body] for
7-14     purposes of Chapters 551 and 552, Government Code.
7-15           (b)  Any requirement in Chapter 551 or 552, Government Code,
7-16     that applies [those chapters relating] to a school district, the
7-17     board of trustees of a school district [school board], or public
7-18     school students [children] applies to an open-enrollment charter
7-19     school, the governing body of a charter holder, the governing body
7-20     of an open-enrollment charter school, or students [and to children]
7-21     attending an open-enrollment charter school.
7-22           Sec. 12.1052.  APPLICABILITY OF LAWS RELATING TO LOCAL
7-23     GOVERNMENT RECORDS.  (a)  An open-enrollment charter school is
7-24     considered to be a local government for purposes of Subtitle C,
7-25     Title 6, Local Government Code, and Subchapter J, Chapter 441,
7-26     Government Code.
7-27           (b)  Records of an open-enrollment charter school and records
 8-1     of a charter holder that relate to an open-enrollment charter
 8-2     school are government records for all purposes under state law.
 8-3           (c)  Any requirement in Subtitle C, Title 6, Local Government
 8-4     Code, or Subchapter J, Chapter 441, Government Code, that applies
 8-5     to a school district, the board of trustees of a school district,
 8-6     or an officer or employee of a school district applies to an
 8-7     open-enrollment charter school, the governing body of a charter
 8-8     holder, the governing body of an open-enrollment charter school, or
 8-9     an officer or employee of an open-enrollment charter school except
8-10     that the records of an open-enrollment charter school that ceases
8-11     to operate shall be transferred in the manner prescribed by
8-12     Subsection (d).
8-13           (d)  The records of an open-enrollment charter school that
8-14     ceases to operate shall be transferred in the manner specified by
8-15     the commissioner to a custodian designated by the commissioner.
8-16     The commissioner may designate any appropriate entity to serve as
8-17     custodian, including the agency, a regional education service
8-18     center, or a school district. In designating a custodian, the
8-19     commissioner shall ensure that the transferred records, including
8-20     student and personnel records, are transferred to a custodian
8-21     capable of:
8-22                 (1)  maintaining the records;
8-23                 (2)  making the records readily accessible to students,
8-24     parents, former school employees, and other persons entitled to
8-25     access; and
8-26                 (3)  complying with applicable state or federal law
8-27     restricting access to the records.
 9-1           (e)  If the charter holder of an open-enrollment charter
 9-2     school that ceases to operate or an officer or employee of such a
 9-3     school refuses to transfer school records in the manner specified
 9-4     by the commissioner under Subsection (d), the commissioner may ask
 9-5     the attorney general to petition a court for recovery of the
 9-6     records.  If the court grants the petition, the court shall award
 9-7     attorney's fees and court costs to the state.
 9-8           Sec. 12.1053.  APPLICABILITY OF LAWS RELATING TO PUBLIC
 9-9     PURCHASING AND CONTRACTING. (a)  An open-enrollment charter school
9-10     is considered to be:
9-11                 (1)  a governmental entity for purposes of:
9-12                       (A)  Subchapter D, Chapter 2252, Government Code;
9-13     and
9-14                       (B)  Subchapter B, Chapter 271, Local Government
9-15     Code;
9-16                 (2)  a political subdivision for purposes of Subchapter
9-17     A, Chapter 2254, Government Code; and
9-18                 (3)  a local government for purposes of Sections
9-19     2256.009-2256.016, Government Code.
9-20           (b)  A member of the governing body of a charter holder, a
9-21     member of the governing body of an open-enrollment charter school,
9-22     or an officer of an open-enrollment charter school is considered to
9-23     be a local public official for purposes of Chapter 171, Local
9-24     Government Code. For purposes of that chapter:
9-25                 (1)  a member of the governing body of a charter holder
9-26     or a member of the governing body or officer of an open-enrollment
9-27     charter school is considered to have a substantial interest in a
 10-1    business entity if a person related to the member or officer in the
 10-2    third degree by consanguinity or affinity, as determined under
 10-3    Chapter 573, Government Code, has a substantial interest in the
 10-4    business entity under Section 171.002, Local Government Code; and
 10-5                (2)  a member of the governing body or officer of a
 10-6    charter school rated as academically acceptable or higher under
 10-7    Chapter 39 for each of the preceding three school years, or a
 10-8    member of the governing body of the charter holder of such a
 10-9    school, is not subject to the restrictions of Section 171.009,
10-10    Local Government Code.
10-11          (c)  A requirement in a law listed in this section that
10-12    applies to a school district or the board of trustees of a school
10-13    district applies to an open-enrollment charter school, the
10-14    governing body of a charter holder, or the governing body of an
10-15    open-enrollment charter school.
10-16          Sec. 12.1054.  IMMUNITY FROM LIABILITY.  An open-enrollment
10-17    charter [(c)  The] school is immune from liability to the same
10-18    extent as a school district, and its employees and volunteers are
10-19    immune from liability to the same extent as school district
10-20    employees and volunteers.
10-21          Sec. 12.1055.  MEMBERSHIP IN TEACHER RETIREMENT SYSTEM OF
10-22    TEXAS. (a) [(d)]  An employee of an open-enrollment charter school
10-23    or management company who qualifies for membership in the Teacher
10-24    Retirement System of Texas shall be covered under the system to the
10-25    same extent a qualified employee of a school district is covered.
10-26          (b)  For each employee of the school or company covered under
10-27    the system, the charter holder or company [school] is responsible
 11-1    for making any contribution that otherwise would be the legal
 11-2    responsibility of the school district, and the state is responsible
 11-3    for making contributions to the same extent it would be legally
 11-4    responsible if the employee were a school district employee.
 11-5          SECTION 6. Sections 12.106-12.108, Education Code, are
 11-6    amended to read as follows:
 11-7          Sec. 12.106.  STATE FUNDING. (a)  A charter holder is
 11-8    entitled to receive for the open-enrollment charter school funding
 11-9    under Chapter 42 as if the school were a school district without a
11-10    tier one local share for purposes of Section 42.253 and without any
11-11    local revenue ("LR") for purposes of Section 42.302.  In
11-12    determining funding for an open-enrollment charter school,
11-13    adjustments under Sections 42.102, 42.103, 42.104, and 42.105 and
11-14    the district enrichment tax rate ("DTR") under Section 42.302 are
11-15    based on the average adjustment and average district enrichment tax
11-16    rate for the state.
11-17          (b)  Funds received by a charter holder under this section
11-18    after September 1, 2001:
11-19                (1)  are considered to be public funds for all purposes
11-20    under state law;
11-21                (2)  are held in trust by the charter holder for the
11-22    benefit of the students of the open-enrollment charter school;
11-23                (3)  may be used only for a purpose for which a school
11-24    district may use local school funds under Section 45.105(c); and
11-25                (4)  pending their use, must be deposited into a bank,
11-26    as defined by Section 45.201, as amended by Chapter 344, Acts of
11-27    the 76th Legislature, Regular Session, 1999, with which the charter
 12-1    holder has entered into a depository contract.
 12-2          (c)  A charter holder shall deliver to the agency a copy of
 12-3    the depository contract between the charter holder and a bank into
 12-4    which state funds are deposited. [An open-enrollment charter school
 12-5    is entitled to the distribution from the available school fund for
 12-6    a student attending the open-enrollment charter school to which the
 12-7    district in which the student resides would be entitled.]
 12-8          [(b)  A student attending an open-enrollment charter school
 12-9    who is eligible under Section 42.003 is entitled to the benefits of
12-10    the Foundation School Program under Chapter 42.  The commissioner
12-11    shall distribute from the foundation school fund to each school an
12-12    amount equal to the cost of a Foundation School Program provided by
12-13    the program for which the charter is granted as determined under
12-14    Section 42.251, including the transportation allotment under
12-15    Section 42.155, for the student that the district in which the
12-16    student resides would be entitled to, less an amount equal to the
12-17    sum of the school's tuition receipts under Section 12.107 plus the
12-18    school's distribution from the available school fund.]
12-19          Sec. 12.107.  EFFECT OF ACCEPTING STATE FUNDING. (a)  A
12-20    charter holder who accepts state funds under Section 12.106 after
12-21    the effective date of a provision of this subchapter agrees to be
12-22    subject to that provision, regardless of the date on which the
12-23    charter holder's charter was granted.
12-24          (b)  A charter holder who accepts state funds under Section
12-25    12.106 after September 1, 2001, agrees to accept all liability
12-26    under this subchapter for any funds accepted under that section
12-27    before September 1, 2001.  This subsection does not create
 13-1    liability for charter holder conduct occurring before September 1,
 13-2    2001. [LOCAL FUNDING.  (a)  Except as provided by Subsection (b),
 13-3    an open-enrollment charter school is entitled to receive tuition
 13-4    from the school district in which a student attending the school
 13-5    resides in an amount equal to the quotient of the tax revenue
 13-6    collected by the school district for maintenance and operations for
 13-7    the school year for which tuition is being paid divided by the sum
 13-8    of the number of students enrolled in the district as reported in
 13-9    the Public Education Information Management System (PEIMS),
13-10    including the number of students for whom the district is required
13-11    to pay tuition.]
13-12          [(b)  The tuition to be paid under Subsection (a) by a school
13-13    district with a wealth per student that exceeds the equalized
13-14    wealth level under Chapter 41 shall be based on the district's tax
13-15    revenue after the district has acted to achieve the equalized
13-16    wealth level under Chapter 41.]
13-17          Sec. 12.108.  TUITION AND FEES RESTRICTED.   (a)  An [Except
13-18    as provided by Section 12.106, an] open-enrollment charter school
13-19    may not charge tuition to an eligible student who applies under
13-20    Section 12.117.
13-21          (b)  The governing body of an open-enrollment charter school
13-22    may require a student to pay any fee that the board of trustees of
13-23    a school district may charge under Section 11.158(a).  The
13-24    governing body may not require a student to pay a fee that the
13-25    board of trustees of a school district may not charge under Section
13-26    11.158(b).
13-27          SECTION 7.  Sections 12.110(a)-(c), Education Code, are
 14-1    amended to read as follows:
 14-2          (a)  The State Board of Education shall adopt:
 14-3                (1)  an application form and a procedure that must be
 14-4    used to apply for a charter for an open-enrollment charter school
 14-5    or a renewal of a charter; and
 14-6                (2)  criteria to use in selecting a program for which
 14-7    to grant a charter.
 14-8          (b)  The application form for a charter or renewal of a
 14-9    charter must provide for including:
14-10                (1)  the information required under Section 12.111 to
14-11    be contained in a charter;
14-12                (2)  a description of the program to be provided during
14-13    a typical school day that includes the number of hours each day the
14-14    program will operate; and
14-15                (3)  a description of the types of instructional
14-16    approaches to be used.
14-17          (c)  As part of the application procedure for a charter for a
14-18    new open-enrollment charter school, the board may require a
14-19    petition supporting the [a] charter [for a school] signed by a
14-20    specified number of parents or guardians of school-age children
14-21    residing in the area in which a school is proposed or may hold a
14-22    public hearing to determine parental support for the school.
14-23          SECTION 8.  Section 12.111, Education Code, is amended to
14-24    read as follows:
14-25          Sec. 12.111.  CONTENT.  Each charter granted under this
14-26    subchapter must:
14-27                (1)  describe the educational program to be offered,
 15-1    which must include the required curriculum as provided by Section
 15-2    28.002;
 15-3                (2)  specify the period for which the charter or any
 15-4    charter renewal is valid;
 15-5                (3)  provide that continuation or renewal of the
 15-6    charter is contingent on acceptable student performance on
 15-7    assessment instruments adopted under Subchapter B, Chapter 39, and
 15-8    on compliance with any accountability provision specified by the
 15-9    charter, by a deadline or at intervals specified by the charter;
15-10                (4)  establish the level of student performance that is
15-11    considered acceptable for purposes of Subdivision (3);
15-12                (5)  specify any basis, in addition to a basis
15-13    specified by this subchapter, on which the charter may be placed on
15-14    probation or revoked or on which renewal of the charter may be
15-15    denied;
15-16                (6)  prohibit discrimination in admission policy on the
15-17    basis of sex, national origin, ethnicity, religion, disability,
15-18    academic, artistic, or athletic ability, or the district the child
15-19    would otherwise attend in accordance with this code, although the
15-20    charter may provide for the exclusion of a student who has a
15-21    documented history of a criminal offense, a juvenile court
15-22    adjudication, or discipline problems under Subchapter A, Chapter
15-23    37;
15-24                (7)  specify the grade levels to be offered;
15-25                (8)  describe the governing structure of the program,
15-26    including:
15-27                      (A)  the officer positions designated;
 16-1                      (B)  the manner in which officers are selected
 16-2    and removed from office;
 16-3                      (C)  the manner in which members of the governing
 16-4    body of the school are selected and removed from office;
 16-5                      (D)  the manner in which vacancies on that [the]
 16-6    governing body [board] are filled;
 16-7                      (E)  the term for which members of that [the]
 16-8    governing body serve; and
 16-9                      (F)  whether the terms are to be staggered;
16-10                (9)  specify the powers or duties of the governing body
16-11    of the school that the governing body may delegate to an officer;
16-12                (10)  specify the manner in which the school will
16-13    distribute to parents information related to the qualifications of
16-14    each [to be met by] professional employee [employees] of the
16-15    program, including any professional or educational degree held by
16-16    each employee, a statement of any certification under Subchapter B,
16-17    Chapter 21, held by each employee, and any relevant experience of
16-18    each employee;
16-19                (11) [(10)]  describe the process by which the person
16-20    providing the program will adopt an annual budget;
16-21                (12) [(11)]  describe the manner in which an annual
16-22    audit of the financial and programmatic operations of the program
16-23    is to be conducted, including the manner in which the person
16-24    providing the program will provide information necessary for the
16-25    school district in which the program is located to participate, as
16-26    required by this code or by State Board of Education rule, in the
16-27    Public Education Information Management System (PEIMS);
 17-1                (13) [(12)]  describe the facilities to be used;
 17-2                (14) [(13)]  describe the geographical area served by
 17-3    the program; and
 17-4                (15) [(14)]  specify any type of enrollment criteria to
 17-5    be used.
 17-6          SECTION 9. Section 12.113, Education Code, is amended to read
 17-7    as follows:
 17-8          Sec. 12.113. CHARTER GRANTED. (a) Each charter the State
 17-9    Board of Education grants for an open-enrollment charter school
17-10    must:
17-11                (1)  satisfy this subchapter; and
17-12                (2)  include the information that is required under
17-13    Section 12.111 consistent with the information provided in the
17-14    application and any modification the board requires.
17-15          (b)  The grant of a charter under this subchapter does not
17-16    create an entitlement to a renewal of a charter on the same terms
17-17    as it was originally issued.
17-18          SECTION 10. Section 12.114, Education Code, is amended to
17-19    read as follows:
17-20          Sec. 12.114.  REVISION.  (a)  A revision of a charter of an
17-21    open-enrollment charter school may be made only with the approval
17-22    of the State Board of Education.
17-23          (b)  A charter holder must comply with Subsection (c) to
17-24    obtain approval of a revision of the charter for an open-enrollment
17-25    charter school if the revision authorizes the school to:
17-26                (1)  expand to additional campuses or sites beyond the
17-27    campuses or sites stated in the charter;
 18-1                (2)  increase grade levels beyond the levels stated in
 18-2    the charter; or
 18-3                (3)  increase enrollment beyond the maximum enrollment
 18-4    stated in the charter.
 18-5          (c)  For approval of a revision described by Subsection (b):
 18-6                (1)  a charter holder must submit an application for
 18-7    approval in a form approved by the State Board of Education; and
 18-8                (2)  the State Board of Education must interview
 18-9    appropriate school representatives in connection with the
18-10    application and take all other action necessary to thoroughly
18-11    review the application.
18-12          (d)  Notwithstanding any other provision of this section, the
18-13    State Board of Education may not approve a revision of the charter
18-14    of an open-enrollment charter school not rated as academically
18-15    acceptable or higher under Chapter 39 for each of the preceding
18-16    three school years that contains a revision described by Subsection
18-17    (b)(1).  This subsection expires September 1, 2003.
18-18          SECTION 11. Section 12.115(a), Education Code, is amended to
18-19    read as follows:
18-20          (a)  The State Board of Education may modify, place on
18-21    probation, revoke, or deny renewal of the charter of an
18-22    open-enrollment charter school if the board determines that the
18-23    charter holder [person operating the school]:
18-24                (1)  committed a material violation of the charter,
18-25    including failure to satisfy accountability provisions prescribed
18-26    by the charter;
18-27                (2)  failed to satisfy generally accepted accounting
 19-1    standards of fiscal management;
 19-2                (3)  failed to protect the health, safety, or welfare
 19-3    of the students enrolled at the school; or
 19-4                (4) [(3)]  failed to comply with this subchapter or
 19-5    another applicable law or rule.
 19-6          SECTION 12. Section 12.116, Education Code, is amended by
 19-7    amending Subsection (b) and adding Subsection (c) to read as
 19-8    follows:
 19-9          (b)  The procedure adopted under Subsection (a) must provide
19-10    an opportunity for a hearing to the charter holder [person
19-11    operating the open-enrollment charter school] and to parents and
19-12    guardians of students in the school.  A hearing under this
19-13    subsection must be held at the facility at which the program is
19-14    operated.
19-15          (c)  Chapter 2001, Government Code, does not apply to a
19-16    hearing that is related to a modification, placement on probation,
19-17    revocation, or denial of renewal under this subchapter.
19-18          SECTION 13. Subchapter D, Chapter 12, Education Code, is
19-19    amended by adding Sections 12.1161 and 12.1162 to read as follows:
19-20          Sec. 12.1161.  EFFECT OF REVOCATION, DENIAL OF RENEWAL, OR
19-21    SURRENDER OF CHARTER. (a)  Except as provided by Subsection (b), if
19-22    the State Board of Education revokes or denies the renewal of a
19-23    charter of an open-enrollment charter school, or if an
19-24    open-enrollment charter school surrenders its charter, the school
19-25    may not:
19-26                (1)  continue to operate under this subchapter; or
19-27                (2)  receive state funds under this subchapter.
 20-1          (b)  An open-enrollment charter school may continue to
 20-2    operate and receive state funds under this subchapter for the
 20-3    remainder of a school year if the board denies renewal of the
 20-4    school's charter before the completion of that school year.
 20-5          Sec. 12.1162.  EMERGENCY SUSPENSION.  (a)  The commissioner
 20-6    may temporarily withhold funding, suspend the authority of an
 20-7    open-enrollment charter school to operate, or take any other
 20-8    reasonable action the commissioner determines necessary to protect
 20-9    the health, safety, or welfare of the students enrolled at the
20-10    school based on evidence that conditions at the school present a
20-11    danger to the health, safety, or welfare of students.
20-12          (b)  After the commissioner imposes a suspension under this
20-13    section, the open-enrollment charter school may not receive funding
20-14    and may not resume operating until a determination is made by the
20-15    commissioner or the State Board of Education that:
20-16                (1)  despite initial evidence, the conditions at the
20-17    school do not present a danger to the health, safety, or welfare of
20-18    students; or
20-19                (2)  the conditions at the school that presented a
20-20    danger to the health, safety, or welfare of students have been
20-21    corrected.
20-22          (c)  Not later than the third business day after the date the
20-23    commissioner imposes a suspension under this section, the
20-24    commissioner shall provide an opportunity for a hearing to the
20-25    holder of the charter of the open-enrollment charter school.
20-26          (d)  If the commissioner does not lift the suspension imposed
20-27    under this section, the State Board of Education shall consider the
 21-1    suspension at the first regularly scheduled meeting of the board
 21-2    that occurs after the date the suspension is imposed.  At that
 21-3    meeting the board must lift the suspension or take action under
 21-4    Section 12.116.
 21-5          (e)  Chapter 2001, Government Code, does not apply to a
 21-6    suspension under this section.
 21-7          SECTION 14.  Section 12.117, Education Code, is amended to
 21-8    read as follows:
 21-9          Sec. 12.117.  [APPLICATION FOR] ADMISSION.  For admission to
21-10    an open-enrollment charter school, the governing body of [person
21-11    operating] the school shall:
21-12                (1)  [may] require the applicant to complete and submit
21-13    an application not later than a reasonable deadline the school
21-14    establishes; and
21-15                (2)  on receipt of more acceptable applications for
21-16    admission under this section than available positions in the
21-17    school, fill the available positions by lottery.
21-18          SECTION 15.  Section 12.118, Education Code, is amended by
21-19    amending Subsections (a) and (c) and adding Subsections (d) and (e)
21-20    to read as follows:
21-21          (a)  The State Board of Education [board] shall designate an
21-22    impartial organization with experience in evaluating school choice
21-23    programs to conduct an annual evaluation of open-enrollment charter
21-24    schools.
21-25          (c)  The evaluation of open-enrollment charter schools must
21-26    also include an evaluation of:
21-27                (1)  the costs of instruction, administration, and
 22-1    transportation incurred by open-enrollment charter schools; [and]
 22-2                (2)  whether school district or school campus employees
 22-3    are informing students at risk of dropping out of school of the
 22-4    opportunity to attend an open-enrollment charter school  for the
 22-5    purpose of enabling the district or campus to avoid responsibility
 22-6    for those students; and
 22-7                (3)  the effect of open-enrollment charter schools on
 22-8    school districts and on teachers, students, and parents in those
 22-9    districts.
22-10          (d)  The evaluation of an open-enrollment charter school that
22-11    assists students in earning a high school diploma or high school
22-12    equivalency certificate  must also include an evaluation of:
22-13                (1)  the quality of the educational program offered;
22-14                (2)  the number of hours each school day the
22-15    educational program is provided to a student;
22-16                (3)  class size and the student/teacher ratio;
22-17                (4)  student success in earning a high school diploma;
22-18    and
22-19                (5)  student success in earning a high school
22-20    equivalency  certificate.
22-21          (e)  For purposes of this section, "student at risk of
22-22    dropping out of school" has the meaning assigned by Section 29.081.
22-23          SECTION 16.  Subchapter D, Chapter 12, Education Code, is
22-24    amended by adding Sections 12.1181 and 12.1182 to read as follows:
22-25          Sec. 12.1181.  STUDY OF CHARTER SCHOOL INNOVATION.  (a)  The
22-26    agency shall study the instructional methods of open-enrollment
22-27    charter schools to determine:
 23-1                (1)  the extent to which those schools are using
 23-2    innovative educational concepts; and
 23-3                (2)  whether any innovative educational concepts used
 23-4    by those schools have resulted in improvements in:
 23-5                      (A)  students' performance on assessment
 23-6    instruments administered under Subchapter B, Chapter 39;
 23-7                      (B)  student attendance; or
 23-8                      (C)  students' grades.
 23-9          (b)  The agency shall include the results of the study
23-10    conducted under this section in the report required under Section
23-11    39.182 that is due not later than December 1, 2002.
23-12          (c)  This section expires January 31, 2003.
23-13          Sec. 12.1182.  STUDY OF PROCEDURES FOR OBTAINING INFORMATION
23-14    FROM CHARTER SCHOOLS. (a)  The agency shall study the procedures by
23-15    which the agency obtains information regarding the performance of
23-16    open-enrollment charter schools, including information regarding
23-17    the number of students attending those schools and the performance
23-18    of those students and schools under the accountability system
23-19    established by Subchapters B, C, D, and G, Chapter 39.
23-20          (b)  In conducting the study, the agency shall:
23-21                (1)  focus on the extent to which the existing
23-22    procedures for obtaining information results in current data that
23-23    is sufficient to permit effective and timely oversight of
23-24    open-enrollment charter schools;
23-25                (2)  solicit comments and suggestions from persons
23-26    involved or otherwise interested in the operation of
23-27    open-enrollment charter schools; and
 24-1                (3)  develop recommendations for modifications in the
 24-2    procedures for obtaining information, including any recommendations
 24-3    requiring legislative action, that would improve the agency's
 24-4    ability to obtain current information regarding open-enrollment
 24-5    charter schools.
 24-6          (c)  The agency shall include the results of the study
 24-7    conducted under this section and the agency's recommendations
 24-8    resulting from the study in the report required under Section
 24-9    39.182 that is due not later than December 1, 2002.
24-10          (d)  This section expires January 1, 2003.
24-11          SECTION 17.  Section 12.119(a), Education Code, is amended to
24-12    read as follows:
24-13          (a)  A charter holder [The entity to which a charter is
24-14    granted for an open-enrollment charter school] shall file with the
24-15    State Board of Education a copy of its articles of incorporation
24-16    and bylaws, or [a] comparable documents [document] if the charter
24-17    holder [entity] does not have articles of incorporation or bylaws,
24-18    within the period and in the manner prescribed by the board.
24-19          SECTION 18.  Section 12.120, Education Code, is amended to
24-20    read as follows:
24-21          Sec. 12.120.  RESTRICTIONS [LIMITATION] ON SERVING AS MEMBER
24-22    OF GOVERNING BODY OF CHARTER HOLDER, OFFICER, OR EMPLOYEE.  (a)  A
24-23    person may not serve as a member of the governing body of a charter
24-24    holder or as an officer or employee of an open-enrollment charter
24-25    school if:
24-26                (1)  the person [who] has been convicted of a felony or
24-27    a misdemeanor involving moral turpitude; or
 25-1                (2)  the person or the person's spouse has a
 25-2    substantial interest in a management company.
 25-3          (b)  For purposes of Subsection (a)(2), a person has a
 25-4    substantial interest in a management company if the person:
 25-5                (1)  has a controlling interest in the company;
 25-6                (2)  owns more than 10 percent of the voting interest
 25-7    in the company;
 25-8                (3)  owns more than $25,000 of the fair market value of
 25-9    the company;
25-10                (4)  has a direct or indirect participating interest by
25-11    shares, stock, or otherwise, regardless of whether voting rights
25-12    are included, in more than 10 percent of the profits, proceeds, or
25-13    capital gains of the company;
25-14                (5)  is a member of the board of directors or other
25-15    governing body of the company;
25-16                (6)  serves as an elected officer of the company; or
25-17                (7)  is an employee of the company [may not serve as an
25-18    officer or member of the governing body of an open-enrollment
25-19    charter school].
25-20          SECTION 19.  Subchapter D, Chapter 12, Education Code, is
25-21    amended by adding Sections 12.121-12.1281 to read as follows:
25-22          Sec. 12.121.  GENERAL POWERS AND DUTIES OF GOVERNING BODY OF
25-23    SCHOOL.  (a)  The governing body of an open-enrollment charter
25-24    school as a body corporate shall:
25-25                (1)  govern and oversee the management of the school,
25-26    including the use of state funds received under Section 12.106;
25-27                (2)  if the governing body determines that contracting
 26-1    with a management company for the management of the school is
 26-2    necessary and desirable, enter into a contract for management
 26-3    services, subject to Section 12.125;
 26-4                (3)  select, determine the compensation of, evaluate
 26-5    the performance of, and, if necessary, terminate the employment of
 26-6    the principal, director, or other chief operating officer of the
 26-7    school;
 26-8                (4)  approve the employment, compensation, promotion,
 26-9    demotion, or termination of employment of other professional
26-10    employees of the school;
26-11                (5)  adopt and amend a budget for each school year and
26-12    ensure that funds received under Section 12.106 are spent only as
26-13    provided for in the budget;
26-14                (6)  ensure that the school complies with Subchapters
26-15    A, B, and E, Chapter 29; and
26-16                (7)  select textbooks for the school as required by
26-17    Section 31.101.
26-18          (b)  Except as provided by Section 12.111(9), the governing
26-19    body of an open-enrollment charter school may not delegate the
26-20    governing body's powers and duties under this subchapter to another
26-21    person.
26-22          (c)  The governing body of an open-enrollment charter school
26-23    shall provide for appeals to the governing body or its designee
26-24    concerning student disciplinary matters in which a student in a
26-25    school district would be entitled to appeal to the board of
26-26    trustees or its designee under Chapter 37.
26-27          Sec. 12.122.  LIABILITY OF MEMBERS OF GOVERNING BODY OF
 27-1    CHARTER HOLDER AND MEMBER OF GOVERNING BODY OF SCHOOL. (a)
 27-2    Notwithstanding the Texas Non-Profit Corporation Act (Article
 27-3    1396-1.01 et seq., Vernon's Texas Civil Statutes) or other law, a
 27-4    member of the governing body of a charter holder or a member of the
 27-5    governing body of an open-enrollment charter school is personally
 27-6    liable for:
 27-7                (1)  a misapplication of state funds received by the
 27-8    charter holder under Section 12.106, including any use of the funds
 27-9    that results in an improper personal benefit for the member; and
27-10                (2)  a misapplication of property purchased or leased
27-11    with state funds received by the charter holder under Section
27-12    12.106, including any use of the property that results in an
27-13    improper personal benefit for the member.
27-14          (b)  If a charter holder receives state funds under Section
27-15    12.106 after September 1, 2001, a member of the governing body of
27-16    the charter holder or a member of the governing body of the school
27-17    who serves in that capacity after September 1, 2001, accepts the
27-18    liability imposed by Subsection (a) as to any state funds accepted
27-19    under Section 12.106 during the person's service on the governing
27-20    body.
27-21          (c)  In approving or agreeing to the use of state funds, a
27-22    member of the governing body of a charter holder or a member of the
27-23    governing body of an open-enrollment charter school is not liable
27-24    under this section if the member relied in good faith on the advice
27-25    of legal counsel that the use was authorized under Section
27-26    12.106(b)(3).
27-27          (d)  A person held liable under this section is entitled to
 28-1    contribution from any other person who knowingly accepted or
 28-2    received funds in violation of this chapter, in proportion to the
 28-3    amount of funds accepted or received by that person.
 28-4          Sec. 12.123.  TRAINING FOR MEMBERS OF GOVERNING BODY OF
 28-5    SCHOOL AND OFFICERS. (a)  The State Board of Education shall adopt
 28-6    rules prescribing training for:
 28-7                (1)  members of governing bodies of open-enrollment
 28-8    charter schools; and
 28-9                (2)  officers of open-enrollment charter schools.
28-10          (b)  The rules adopted under Subsection (a) must:
28-11                (1)  specify the minimum amount and frequency of the
28-12    training;
28-13                (2)  require the training to be provided by:
28-14                      (A)  the agency and regional education service
28-15    centers;
28-16                      (B)  entities other than the agency and service
28-17    centers, subject to approval by the board; or
28-18                      (C)  both the agency, service centers, and other
28-19    entities;
28-20                (3)  require training to be provided concerning:
28-21                      (A)  basic school law, including school finance;
28-22                      (B)  health and safety issues;
28-23                      (C)  accountability requirements related to the
28-24    use of public funds; and
28-25                      (D)  other requirements relating to
28-26    accountability to the public, such as open meetings requirements
28-27    under Chapter 551, Government Code, and public information
 29-1    requirements under Chapter 552, Government Code; and
 29-2                (4)  require reporting to the agency to permit the
 29-3    agency to monitor compliance with this section.
 29-4          (c)  A person described by Subsection (a) must complete the
 29-5    minimum training required by rules adopted under Subsection (a).
 29-6          (d)  If a person described by Subsection (a) does not
 29-7    complete the minimum training, the State Board of Education shall
 29-8    direct the charter holder to remove the person failing to complete
 29-9    the training or terminate that person's employment.  If the person
29-10    is not removed or the person's employment is not terminated, the
29-11    board shall place on probation or revoke the school's charter as
29-12    provided by Sections 12.115 and 12.116.
29-13          Sec. 12.124.  LOANS FROM MANAGEMENT COMPANY PROHIBITED.  (a)
29-14    The charter holder or the governing body of an open-enrollment
29-15    charter school may not accept a loan from a management company that
29-16    has a contract to provide management services to:
29-17                (1)  that charter school; or
29-18                (2)  another charter school that operates under a
29-19    charter granted to the charter holder.
29-20          (b)  A charter holder or the governing body of an
29-21    open-enrollment charter school that accepts a loan from a
29-22    management company may not enter into a contract with that
29-23    management company to provide management services to the school.
29-24          Sec. 12.125.  APPROVAL OF MANAGEMENT CONTRACT.  (a)  An
29-25    open-enrollment charter school shall submit to the commissioner for
29-26    approval any proposed contract, including a contract renewal,
29-27    between the school and a management company proposing to provide
 30-1    management services to the school.  The contract may not take
 30-2    effect until approved by the commissioner.
 30-3          (b)  The commissioner shall adopt criteria to use in
 30-4    determining whether to approve a contract submitted under this
 30-5    section. The criteria must require a management company to
 30-6    demonstrate that the company:
 30-7                (1)  possesses substantial experience and expertise
 30-8    relevant to providing management services in an educational
 30-9    setting;
30-10                (2)  has a reliable record of providing management
30-11    services in an educational setting, without:
30-12                      (A)  a previous denial of approval, denial of
30-13    renewal, suspension, or revocation of a contract under Subsection
30-14    (d), provided that the contract was held by a management company
30-15    managed in whole or in part by the company; or
30-16                      (B)  unjustified failures to provide services in
30-17    compliance with a contractual or other legal obligation to any
30-18    open-enrollment charter school in this state or to any other
30-19    similar school in another state;
30-20                (3)  has the personnel, financial assets, and other
30-21    resources necessary to enable the company to provide high-quality,
30-22    reliable management services to an open-enrollment charter school;
30-23    and
30-24                (4)  does not employ a person the commissioner finds to
30-25    have engaged in conduct described by Subsection (d).
30-26          (c)  As provided by Section 12.107, if a charter holder
30-27    receives state funds under Section 12.106 after September 1, 2001,
 31-1    a contract to provide management services to an open-enrollment
 31-2    charter school for the 2001-2002 or a later school year that was
 31-3    executed before September 1, 2001, has no effect for the 2001-2002
 31-4    or a later school year unless the contract is approved as provided
 31-5    by this section.
 31-6          (d)  The commissioner may deny approval of, deny renewal of,
 31-7    suspend, or revoke a contract if the management company:
 31-8                (1)  fails to provide educational or related services
 31-9    in compliance with the company's contractual or other legal
31-10    obligation to any open-enrollment charter school in this state or
31-11    to any other similar school in another state;
31-12                (2)  fails to protect the health, safety, or welfare of
31-13    the students enrolled at an open-enrollment charter school served
31-14    by the company, as determined by the commissioner;
31-15                (3)  violates this subchapter or a rule adopted under
31-16    this subchapter;
31-17                (4)  engages in conduct that could result in action
31-18    under Sections 12.115 and 12.116;
31-19                (5)  refuses, after reasonable notice, to meet
31-20    reasonable health and safety requirements within the company's
31-21    control and made known to the company by a federal or state agency
31-22    or by a political subdivision of this state; or
31-23                (6)  compromises a charter school's eligibility under
31-24    Section 12.101(a)(3).
31-25          (e)  The commissioner shall adopt rules to administer this
31-26    section.
31-27          (f)  A management contract approved by the commissioner under
 32-1    this section is not assignable.
 32-2          Sec. 12.126.  LIABILITY OF MANAGEMENT COMPANY.  (a)  A
 32-3    management company that provides management services to an
 32-4    open-enrollment charter school is liable for damages incurred by
 32-5    the state or an affected school district as a result of the failure
 32-6    of the company to comply with its contractual or other legal
 32-7    obligation to provide services to the school.
 32-8          (b)  On request of the State Board of Education, the attorney
 32-9    general may bring suit on behalf of the state or any affected
32-10    school district against a management company liable under
32-11    Subsection (a) for:
32-12                (1)  damages, including any state funding received by
32-13    the company and any consequential damages suffered by the state or
32-14    affected school district;
32-15                (2)  injunctive relief; or
32-16                (3)  any other equitable remedy determined to be
32-17    appropriate by the court.
32-18          (c)  With the approval of the attorney general, an affected
32-19    school district may participate in a suit brought by the attorney
32-20    general under Subsection (b).  An affected school district is not
32-21    entitled to bring suit on its own behalf against a management
32-22    company liable under Subsection (a).
32-23          (d)  This section is cumulative of all other remedies and
32-24    does not affect:
32-25                (1)  the liability of a management company to the
32-26    charter holder; or
32-27                (2)  the liability of a charter holder, a member of the
 33-1    governing body of a charter holder, or a member of the governing
 33-2    body of an open-enrollment charter school to the state.
 33-3          Sec. 12.127.  PROPERTY PURCHASED OR LEASED WITH STATE FUNDS.
 33-4    (a)  Property purchased or leased with funds received by a charter
 33-5    holder under Section 12.106 after September 1, 2001:
 33-6                (1)  is considered to be public property for all
 33-7    purposes under state law;
 33-8                (2)  is held in trust by the charter holder for the
 33-9    benefit of the students of the open-enrollment charter school; and
33-10                (3)  may be used only for a purpose for which a school
33-11    district may use school district property.
33-12          (b)  If at least 50 percent of the funds used by a charter
33-13    holder to purchase real property are funds received under Section
33-14    12.106 before September 1, 2001, the property is considered to be
33-15    public property to the extent it was purchased with those funds.
33-16          (c)  The commissioner shall:
33-17                (1)  take possession and assume control of the property
33-18    described by Subsection (a)  of an open-enrollment charter school
33-19    that ceases to operate; and
33-20                (2)  supervise the disposition of the property in
33-21    accordance with law.
33-22          (d)  The commissioner may adopt rules necessary to administer
33-23    this section.
33-24          (e)  This section does not affect a security interest in or
33-25    lien on property established by a creditor in compliance with law
33-26    if the security interest or lien arose in connection with the sale
33-27    or lease of the property to the charter holder.
 34-1          Sec. 12.128.  MINIMUM TEACHER QUALIFICATIONS.  (a)  A person
 34-2    employed as a teacher by an open-enrollment charter school must
 34-3    hold a high school diploma or high school equivalency certificate.
 34-4          (b)  Unless otherwise approved by the commissioner, a person
 34-5    employed as a teacher by an open-enrollment charter school and
 34-6    assigned to teach a subject in the foundation curriculum under
 34-7    Section 28.002(a)(1) must hold:
 34-8                (1)  a bachelor's or more advanced degree from an
 34-9    institution of higher education; or
34-10                (2)  a teaching certificate from an institution
34-11    equivalent to an institution of higher education that offers
34-12    recognized teaching certification.
34-13          Sec. 12.1281.  EXCEPTION TO MINIMUM TEACHER QUALIFICATIONS.
34-14    (a)  Notwithstanding Section 12.128(b), a person employed as a
34-15    teacher by an open-enrollment charter school during the 2000-2001
34-16    school year is not required to hold a bachelor's or more advanced
34-17    degree for employment as a teacher by an open-enrollment charter
34-18    school to teach a subject in the foundation curriculum under
34-19    Section 28.002(a)(1) if:
34-20                (1)  the person is employed under a contract that
34-21    guarantees the person the right to remain employed for the
34-22    2001-2002 or a later school year;
34-23                (2)  the person holds a high school diploma or high
34-24    school equivalency certificate;
34-25                (3)  not later than January 1, 2002, the person enrolls
34-26    in an institution of higher education in a program under which the
34-27    person will obtain a bachelor's degree not later than June 30,
 35-1    2007;
 35-2                (4)  the person makes satisfactory progress in the
 35-3    program described by Subdivision (3); and
 35-4                (5)  the person obtains a bachelor's degree not later
 35-5    than June 30, 2007.
 35-6          (b)  This section expires July 1, 2007.
 35-7          SECTION 20. Section 22.083, Education Code, is amended to
 35-8    read as follows:
 35-9          Sec. 22.083.  ACCESS TO CRIMINAL HISTORY RECORDS BY LOCAL AND
35-10    REGIONAL EDUCATION AUTHORITIES.  (a)  A school district,
35-11    [open-enrollment charter school,] private school, regional
35-12    education service center, or shared services arrangement may obtain
35-13    from any law enforcement or criminal justice agency all criminal
35-14    history record information that relates to a person:
35-15                (1)  whom the district, school, service center, or
35-16    shared services arrangement intends to employ in any capacity; or
35-17                (2)  who has indicated, in writing, an intention to
35-18    serve as a volunteer with the district, school, service center, or
35-19    shared services arrangement.
35-20          (b)  An open-enrollment charter school shall obtain from any
35-21    law enforcement or criminal justice agency all criminal history
35-22    record information that relates to:
35-23                (1)  a person whom the school intends to employ in a
35-24    capacity described by Section 21.003(a) and who does not hold a
35-25    certificate issued under Subchapter B, Chapter 21; and
35-26                (2)  a person who serves as or agrees to serve as a
35-27    member of the governing body of the school.
 36-1          (c)  An open-enrollment charter school may obtain from any
 36-2    law enforcement or criminal justice agency all criminal history
 36-3    record information that relates to a person:
 36-4                (1)  whom the school intends to employ in a capacity
 36-5    other than a capacity described by Section 21.003(a); or
 36-6                (2)  who has indicated, in writing, an intention to
 36-7    serve as a volunteer with the school.
 36-8          (d)  A school district, open-enrollment charter school,
 36-9    private school, regional education service center, or shared
36-10    services arrangement may obtain from any law enforcement or
36-11    criminal justice agency all criminal history record information
36-12    that relates to:
36-13                (1)  a volunteer or employee of the district, school,
36-14    service center, or shared services arrangement; or
36-15                (2)  an employee of or applicant for employment by a
36-16    person that contracts with the district, school, service center, or
36-17    shared services arrangement to provide services, if:
36-18                      (A)  the employee or applicant has or will have
36-19    continuing  duties related to the contracted services; and
36-20                      (B)  the duties are or will be performed on
36-21    school property or at another location where students are regularly
36-22    present.
36-23          (e) [(c)]  The superintendent of a district or the director
36-24    of an open-enrollment charter school, private school, regional
36-25    education service center, or shared services arrangement shall
36-26    promptly notify the State Board for Educator Certification in
36-27    writing if the person obtains or has knowledge of information
 37-1    showing that an applicant for or holder of a certificate issued
 37-2    under Subchapter B, Chapter 21, has a reported criminal history.
 37-3          SECTION 21.  Section 39.075(a), Education Code, is amended to
 37-4    read as follows:
 37-5          (a)  The commissioner shall authorize special accreditation
 37-6    investigations to be conducted under the following circumstances:
 37-7                (1)  when excessive numbers of absences of students
 37-8    eligible to be tested on state assessment instruments are
 37-9    determined;
37-10                (2)  when excessive numbers of allowable exemptions
37-11    from the required state assessment are determined;
37-12                (3)  in response to complaints submitted to the agency
37-13    with respect to alleged violations of civil rights or other
37-14    requirements imposed on the state by federal law or court order;
37-15                (4)  in response to established compliance reviews of
37-16    the district's financial accounting practices and state and federal
37-17    program requirements;
37-18                (5)  when extraordinary numbers of student placements
37-19    in alternative education programs, other than placements under
37-20    Sections 37.006 and 37.007, are determined; [or]
37-21                (6)  in response to an allegation involving a conflict
37-22    between members of the board of trustees or between the board and
37-23    the district administration if it appears that the conflict
37-24    involves a violation of a role or duty of the board members or the
37-25    administration clearly defined by this code; or
37-26                (7)  in response to an allegation that school district
37-27    or school campus employees are informing students at risk of
 38-1    dropping out of school, as defined by Section 29.081, of the
 38-2    opportunity to attend an open-enrollment charter school  for the
 38-3    purpose of enabling the district or campus to avoid responsibility
 38-4    for those students.
 38-5          SECTION 22.  Section 411.097, Government Code, is amended by
 38-6    amending Subsections (c) and (d) and adding Subsection (e) to read
 38-7    as follows:
 38-8          (c)  An open-enrollment charter school is entitled to obtain
 38-9    from the department criminal history record information maintained
38-10    by the department that the school is required to obtain under
38-11    Subchapter C, Chapter 22, Education Code, that relates to a person
38-12    who:
38-13                (1)  is a member of the governing body of the school,
38-14    as defined by Section 12.1012, Education Code; or
38-15                (2)  has agreed to serve as a member of the governing
38-16    body of the school.
38-17          (d)  Criminal history record information obtained by a school
38-18    district, charter school, private school, service center,
38-19    commercial transportation company, or shared services arrangement
38-20    under Subsection (a), [or] (b), or (c) may not be released or
38-21    disclosed to any person, other than the individual who is the
38-22    subject of the information, the Texas Education Agency, the State
38-23    Board for Educator Certification, or the chief personnel officer of
38-24    the transportation company, if the information is obtained under
38-25    Subsection (a)(2).
38-26          (e) [(d)]  If a regional education service center or
38-27    commercial transportation company that receives criminal history
 39-1    record information from the department under this section requests
 39-2    the information by providing to the department a list, including
 39-3    the name, date of birth, and any other personal descriptive
 39-4    information required by the department for each person, through
 39-5    electronic means, magnetic tape, or disk, as specified by the
 39-6    department, the department may not charge the service center or
 39-7    commercial transportation company more than the lesser of:
 39-8                (1)  the department's cost for providing the
 39-9    information; or
39-10                (2)  the amount prescribed by another law.
39-11          SECTION 23.  Section 140.005, Local Government Code, is
39-12    amended to read as follows:
39-13          Sec. 140.005.  ANNUAL FINANCIAL STATEMENT OF SCHOOL, ROAD, OR
39-14    OTHER DISTRICT.  The governing body of a school district,
39-15    open-enrollment charter school, junior college district, or a
39-16    district or authority organized under Article III, Section 52, or
39-17    Article XVI, Section 59, of the Texas Constitution, shall prepare
39-18    an annual financial statement showing for each fund subject to the
39-19    authority of the governing body during the fiscal year:
39-20                (1)  the total receipts of the fund, itemized by source
39-21    of revenue, including taxes, assessments, service charges, grants
39-22    of state money, gifts, or other general sources from which funds
39-23    are derived;
39-24                (2)  the total disbursements of the fund, itemized by
39-25    the nature of the expenditure; and
39-26                (3)  the balance in the fund at the close of the fiscal
39-27    year.
 40-1          SECTION 24.  Sections 140.006(c) and (d), Local Government
 40-2    Code, are amended to read as follows:
 40-3          (c)  The presiding officer of a school district or
 40-4    open-enrollment charter school shall submit a financial statement
 40-5    prepared under Section 140.005 to a daily, weekly, or biweekly
 40-6    newspaper published within the boundaries of the district or the
 40-7    geographical area served by the charter school.  If a daily,
 40-8    weekly, or biweekly newspaper is not published within the
 40-9    boundaries of the school district, the financial statement shall be
40-10    published in the manner provided by Subsections (a) and (b).  If a
40-11    daily, weekly, or biweekly newspaper is not published within the
40-12    area served by the charter school, the financial statement shall be
40-13    published in a newspaper that has general circulation in the area
40-14    served by the charter school.
40-15          (d)  A statement shall be published not later than two months
40-16    after the date the fiscal year ends, except that a school
40-17    district's or charter school's statement shall be published not
40-18    later than the 120th day after the date the fiscal year ends and in
40-19    accordance with the accounting method required by the Texas
40-20    [Central] Education Agency.
40-21          SECTION 25.  (a)  The Texas Education Agency shall
40-22    investigate existing open-enrollment charter schools to determine
40-23    if any of those schools are operating in a manner that effectively
40-24    requires students to possess special artistic, athletic, or other
40-25    abilities, the consideration of which in admissions policies is
40-26    prohibited under Section 12.111, Education Code, as amended by this
40-27    Act.
 41-1          (b)  Not later than January 1, 2002, the Texas Education
 41-2    Agency shall report any violations to the State Board of Education,
 41-3    and that board shall take appropriate action.
 41-4          SECTION 26.  Not later than January 1, 2002, the State Board
 41-5    of Education shall adopt rules relating to training for the members
 41-6    of governing bodies and officers of open-enrollment charter
 41-7    schools, as required by Section 12.123, Education Code, as added by
 41-8    this Act.
 41-9          SECTION 27.  Not later than November 1, 2001, the
41-10    commissioner of education shall adopt the criteria concerning
41-11    approval of open-enrollment charter school management contracts as
41-12    required under Section 12.125(b), Education Code, as added by this
41-13    Act.
41-14          SECTION 28.  (a)  Beginning September 1, 2001, an
41-15    open-enrollment charter school shall obtain, in compliance with
41-16    Section 22.083, Education Code, as amended by this Act, criminal
41-17    history record information relating to:
41-18                (1)  each prospective employee whom the school intends
41-19    to employ in a capacity described by Section 21.003(a), Education
41-20    Code, and who does not hold a certificate issued under Subchapter
41-21    B, Chapter 21, Education Code; and
41-22                (2)  each person who agrees to serve as a member of the
41-23    governing body of the school.
41-24          (b)  Not later than January 1, 2002, an open-enrollment
41-25    charter school shall obtain, in compliance with Section 22.083,
41-26    Education Code, as amended by this Act, all criminal history record
41-27    information that relates to:
 42-1                (1)  a person whom the school initially employed in a
 42-2    capacity described by Section 21.003(a), Education Code, on or
 42-3    before September 1, 2001, other than a person:
 42-4                      (A)  who holds a certificate issued under
 42-5    Subchapter B, Chapter 21, Education Code;
 42-6                      (B)  whom the school will not employ after
 42-7    January 1, 2002; or
 42-8                      (C)  as to whom the school obtained criminal
 42-9    history record information under Section 22.083, Education Code, at
42-10    the time of the person's initial employment or subsequent to the
42-11    initial employment; and
42-12                (2)  a person who serves as a member of the governing
42-13    body of the school other than a person:
42-14                      (A)  who holds a certificate issued under
42-15    Subchapter B, Chapter 21, Education Code; or
42-16                      (B)  who will not be serving on the governing
42-17    body after January 1, 2002.
42-18          SECTION 29.  Not later than September 1, 2002, an
42-19    open-enrollment charter school in existence on September 1, 2001,
42-20    shall fulfill the requirements of Sections 203.025, 203.026, and
42-21    203.041, Local Government Code.
42-22          SECTION 30.  (a)  The change in law made by Sections 12.106
42-23    and 12.107, Education Code, as amended by this Act, apply beginning
42-24    with the 2003-2004 school year.
42-25          (b)  The change in law made by Section 12.114, Education
42-26    Code, as amended by this Act, applies to a revision proposed by an
42-27    open-enrollment charter school that has not been approved by the
 43-1    State Board of Education before September 1, 2001, regardless of
 43-2    the date on which the school proposed the revision.
 43-3          (c)  The change in law made by Section 12.126, Education
 43-4    Code, as added by this Act, applies only to a cause of action that
 43-5    accrues on or after September 1, 2001.  A cause of action that
 43-6    accrued before September 1, 2001, is governed by the law in effect
 43-7    at the time the cause of action accrued, and that law is continued
 43-8    in effect for that purpose.
 43-9          SECTION 31.  This Act takes effect September 1, 2001.