1-1 By: Dunnam, et al. (Senate Sponsor - Bivins) H.B. No. 6
1-2 (In the Senate - Received from the House April 9, 2001;
1-3 April 9, 2001, read first time and referred to Committee on
1-4 Education; May 11, 2001, reported adversely, with favorable
1-5 Committee Substitute by the following vote: Yeas 6, Nays 0;
1-6 May 11, 2001, sent to printer.)
1-7 COMMITTEE SUBSTITUTE FOR H.B. No. 6 By: Bivins
1-8 A BILL TO BE ENTITLED
1-9 AN ACT
1-10 relating to open-enrollment charter schools.
1-11 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-12 SECTION 1. Section 12.104, Education Code, is amended by
1-13 adding Subsection (c) to read as follows:
1-14 (c) An open-enrollment charter school is subject to a
1-15 prohibition, restriction, or requirement, as applicable, imposed by
1-16 state law or by a rule adopted under state law, relating to:
1-17 (1) nepotism under Chapter 573, Government Code; or
1-18 (2) conflict of interest under Chapter 171, Local
1-19 Government Code, except that an employee of an open-enrollment
1-20 charter school may serve as a member of the governing body of the
1-21 entity that is granted a charter under this subchapter or the
1-22 governing body of the school if the employees do not constitute a
1-23 quorum of the governing body or any committee of the governing
1-24 body.
1-25 SECTION 2. Subchapter D, Chapter 12, Education Code, is
1-26 amended by adding Sections 12.1071 and 12.121-12.124 to read as
1-27 follows:
1-28 Sec. 12.1071. STATUS AND USE OF FUNDS. (a) Funds received
1-29 under Section 12.106 or 12.107 after September 1, 2001, by an
1-30 entity to which a charter for an open-enrollment charter school is
1-31 granted:
1-32 (1) are considered to be public funds for all purposes
1-33 under state law;
1-34 (2) are held in trust by the entity for the benefit of
1-35 the students of the open-enrollment charter school;
1-36 (3) may be used only for a purpose for which a school
1-37 may use local funds under Section 45.105(c); and
1-38 (4) pending their use, must be deposited into a bank,
1-39 as defined by Section 45.201, with which the entity has entered
1-40 into a depository contract.
1-41 (b) An entity to which a charter for an open-enrollment
1-42 charter school is granted shall deliver to the agency a copy of the
1-43 depository contract between the entity and any bank into which
1-44 state funds are deposited.
1-45 Sec. 12.121. SANCTIONS BY COMMISSIONER. (a) The
1-46 commissioner shall take any of the actions described by Subsection
1-47 (b) or by Section 39.131(a), to the extent the commissioner
1-48 determines necessary, if an open-enrollment charter school:
1-49 (1) commits a material violation of the school's
1-50 charter;
1-51 (2) fails to satisfy generally accepted accounting
1-52 standards of fiscal management; or
1-53 (3) fails to comply with this subchapter or another
1-54 applicable rule or law, as determined by a report issued under
1-55 Section 39.076(b).
1-56 (b) The commissioner may temporarily withhold funding,
1-57 suspend the authority of an open-enrollment charter school to
1-58 operate, or take any other reasonable action the commissioner
1-59 determines necessary to prevent material harm to the health,
1-60 safety, or welfare of students at the school.
1-61 (c) After the commissioner acts under Subsection (b), the
1-62 open-enrollment charter school may not receive funding and may not
1-63 resume operating until a determination is made that:
1-64 (1) despite initial evidence, the conditions at the
2-1 school do not present a danger of material harm to the health,
2-2 safety, or welfare of students; or
2-3 (2) the conditions at the school that presented a
2-4 danger of material harm to the health, safety, or welfare of
2-5 students have been corrected.
2-6 (d) Not later than the third business day after the date the
2-7 commissioner acts under Subsection (b), the commissioner shall
2-8 provide the person granted the charter for the open-enrollment
2-9 charter school an opportunity for a hearing.
2-10 (e) Immediately after a hearing under Subsection (d), the
2-11 commissioner must cease the action under Subsection (b) or initiate
2-12 action under Section 12.116.
2-13 (f) The commissioner shall adopt rules implementing this
2-14 section. Chapter 2001, Government Code, does not apply to a
2-15 hearing under this section.
2-16 Sec. 12.122. AUDIT BY COMMISSIONER. (a) To the extent
2-17 consistent with Subsection (b), the commissioner may audit the
2-18 records of:
2-19 (1) an open-enrollment charter school;
2-20 (2) an entity to which a charter for an
2-21 open-enrollment charter school is granted; and
2-22 (3) a company that contracts with an open-enrollment
2-23 charter school to provide management services, as determined by the
2-24 commissioner.
2-25 (b) An audit under Subsection (a) must be limited to
2-26 matters directly related to the management or operation of an
2-27 open-enrollment charter school, including any financial and
2-28 administrative records.
2-29 Sec. 12.123. CONTRACT FOR MANAGEMENT SERVICES. (a) In this
2-30 section:
2-31 (1) "Management company" means a person who provides
2-32 management services for an open-enrollment charter school.
2-33 (2) "Management services" means services related to
2-34 the management or operation of an open-enrollment charter school.
2-35 (b) Any contract, including a contract renewal, between an
2-36 open-enrollment charter school and a management company proposing
2-37 to provide management services to the school must require the
2-38 management company to maintain all records related to the
2-39 management services separately from any other records of the
2-40 management company.
2-41 Sec. 12.124. GOVERNOR'S COMMISSION ON OPEN-ENROLLMENT CHARTER
2-42 SCHOOLS. (a) The Governor's Commission on Open-Enrollment Charter
2-43 Schools consists of:
2-44 (1) two members of the house of representatives,
2-45 appointed by the speaker of the house of representatives;
2-46 (2) two members of the senate, appointed by the
2-47 lieutenant governor;
2-48 (3) two members of the public, appointed by the
2-49 governor; and
2-50 (4) the commissioner.
2-51 (b) The commission shall prepare a report on the performance
2-52 of open-enrollment charter schools. The report must include:
2-53 (1) a review of the following issues related to
2-54 open-enrollment charter schools:
2-55 (A) student performance;
2-56 (B) financial issues, including financial
2-57 practices, funding sources, and costs related to opening a school;
2-58 (C) school facilities;
2-59 (D) governance; and
2-60 (E) applicable regulations; and
2-61 (2) the commission's recommendations on the continued
2-62 operation of open-enrollment charter schools, including any
2-63 recommended reporting requirements and other regulations necessary
2-64 to improve student performance and increase accountability in the
2-65 use of public funds.
2-66 (c) Not later than November 1, 2002, the commissioner shall
2-67 submit the report to the governor, the lieutenant governor, the
2-68 speaker of the house of representatives, the Legislative Budget
2-69 Board, and the clerk of each standing committee of the house of
3-1 representatives and the senate with primary jurisdiction over
3-2 public schools.
3-3 (d) This section expires January 1, 2003.
3-4 SECTION 3. Chapter 12, Education Code, is amended by adding
3-5 Subchapter E to read as follows:
3-6 SUBCHAPTER E. GOVERNMENTAL ENTITY CHARTER SCHOOLS
3-7 Sec. 12.151. DEFINITIONS. In this subchapter:
3-8 (1) "Governing board" means:
3-9 (A) the body charged with policy direction of a
3-10 public senior college or university; or
3-11 (B) the governing body of a municipality or
3-12 county.
3-13 (2) "Public senior college or university" has the
3-14 meaning assigned by Section 61.003.
3-15 Sec. 12.152. AUTHORIZATION. In accordance with this
3-16 subchapter, a governing board may grant a charter on application of
3-17 an organization that is exempt from taxation under Section
3-18 501(c)(3), Internal Revenue Code of 1986, for a governmental entity
3-19 charter school to operate in a facility of:
3-20 (1) a public senior college or university;
3-21 (2) a commercial or nonprofit entity; or
3-22 (3) a school district, including a home-rule school
3-23 district.
3-24 Sec. 12.153. APPLICABILITY OF CERTAIN PROVISIONS. Sections
3-25 12.101(c) and (d), 12.102-12.109, 12.111, 12.117, and 12.121-12.123
3-26 apply to a governmental entity charter school as though the
3-27 governmental entity charter school were an open-enrollment charter
3-28 school. Sections 12.110, 12.113-12.116, 12.118, and 12.119 apply to
3-29 a governmental entity charter school as though the governmental
3-30 entity charter school were an open-enrollment charter school,
3-31 except the governing board granting the charter shall assume the
3-32 powers and duties assigned to the State Board of Education under
3-33 those sections.
3-34 Sec. 12.154. FORM OF CHARTER. A charter for a governmental
3-35 entity charter school must be in the form of a written contract
3-36 signed by the presiding officer of the governing board and the
3-37 chief operating officer of the school.
3-38 Sec. 12.155. CERTAIN FUNDING. (a) Except as provided by
3-39 Section 12.156, to cover the costs of administration and
3-40 supervision under this subchapter, a public senior college or
3-41 university or municipality or county is entitled to three percent
3-42 of the state funding that is received under Section 12.106 by each
3-43 school to which the college or university or municipality or county
3-44 has granted a charter under this subchapter.
3-45 (b) The commissioner shall adopt rules as necessary to
3-46 administer this section.
3-47 Sec. 12.156. SUPERVISION OF GOVERNMENTAL ENTITY CHARTER
3-48 SCHOOLS. (a) Except as provided by Subsection (b), a governing
3-49 board that grants a charter under this subchapter to a governmental
3-50 entity charter school shall supervise the school and ensure
3-51 compliance with this subchapter in a manner approved by the
3-52 commissioner and the State Board of Education.
3-53 (b) A governing board that grants a charter under this
3-54 subchapter to a governmental entity charter school may enter into a
3-55 written agreement with the commissioner providing that the
3-56 commissioner must supervise the school and ensure compliance with
3-57 this subchapter. On signing a written agreement under this
3-58 subsection, the commissioner is entitled to receive any funds under
3-59 Section 12.155 that the public senior college or university or
3-60 municipality or county would otherwise receive for costs related to
3-61 supervising the school and ensuring the school's compliance with
3-62 this subchapter.
3-63 Sec. 12.157. AUTHORITY TO GRANT CHARTER. Notwithstanding
3-64 Section 12.101, a charter for an open-enrollment charter school may
3-65 only be issued under this subchapter. This section expires
3-66 September 1, 2003.
3-67 SECTION 4. Sections 39.131(a) and (d), Education Code, are
3-68 amended to read as follows:
3-69 (a) If a district does not satisfy the accreditation
4-1 criteria, the commissioner shall take any of the following actions,
4-2 listed in order of severity, to the extent the commissioner
4-3 determines necessary:
4-4 (1) issue public notice of the deficiency to the board
4-5 of trustees;
4-6 (2) order a hearing conducted by the board of trustees
4-7 of the district for the purpose of notifying the public of the
4-8 unacceptable performance, the improvements in performance expected
4-9 by the agency, and the sanctions that may be imposed under this
4-10 section if the performance does not improve;
4-11 (3) order the preparation of a student achievement
4-12 improvement plan that addresses each academic excellence indicator
4-13 for which the district's performance is unacceptable, the
4-14 submission of the plan to the commissioner for approval, and
4-15 implementation of the plan;
4-16 (4) order a hearing to be held before the commissioner
4-17 or the commissioner's designee at which the president of the board
4-18 of trustees of the district and the superintendent shall appear and
4-19 explain the district's low performance, lack of improvement, and
4-20 plans for improvement;
4-21 (5) arrange an on-site investigation of the district;
4-22 (6) appoint an agency monitor to participate in and
4-23 report to the agency on the activities of the board of trustees or
4-24 the superintendent;
4-25 (7) appoint a master to oversee the operations of the
4-26 district;
4-27 (8) appoint a management team to direct the operations
4-28 of the district in areas of unacceptable performance or require the
4-29 district to obtain certain services under a contract with another
4-30 person;
4-31 (9) if a district has been rated as academically
4-32 unacceptable for a period of one year or more, appoint a board of
4-33 managers [composed of residents of the district] to exercise the
4-34 powers and duties of the board of trustees; or
4-35 (10) if a district has been rated as academically
4-36 unacceptable for a period of two years or more:
4-37 (A)[,] annex the district to one or more
4-38 adjoining districts under Section 13.054; or
4-39 (B) in the case of a home-rule school district
4-40 or open-enrollment charter school, order closure of all programs
4-41 operated under the district's or school's [request the State Board
4-42 of Education to revoke the district's home-rule school district]
4-43 charter.
4-44 (d) The costs of providing a monitor, master, management
4-45 team, or special campus intervention team shall be paid by the
4-46 district. If the district fails or refuses to pay the costs in a
4-47 timely manner, the commissioner may:
4-48 (1) pay the costs using amounts withheld from any
4-49 funds to which the district is otherwise entitled; or
4-50 (2) recover the amount of the costs in the manner
4-51 provided for recovery of an overallocation of state funds under
4-52 Section 42.258.
4-53 SECTION 5. Subchapter C, Chapter 53, Education Code, is
4-54 amended by adding Section 53.351 to read as follows:
4-55 Sec. 53.351. BONDS FOR OPEN-ENROLLMENT CHARTER SCHOOL
4-56 FACILITIES. (a) The Texas Public Finance Authority shall
4-57 establish a nonprofit corporation to issue revenue bonds on behalf
4-58 of authorized open-enrollment charter schools for the acquisition,
4-59 construction, repair, or renovation of educational facilities of
4-60 those schools.
4-61 (b) The Texas Public Finance Authority shall appoint the
4-62 directors of the corporation in consultation with the commissioner
4-63 of education. Directors serve without compensation but are
4-64 entitled to reimbursement for travel expenses incurred in attending
4-65 board meetings. The board shall meet at least once a year.
4-66 (c) The corporation has all powers granted under the Texas
4-67 Non-Profit Corporation Act (Article 1396-1.01 et seq., Vernon's
4-68 Texas Civil Statutes) for the purpose of aiding authorized
4-69 open-enrollment charter schools in providing educational
5-1 facilities. In addition, Sections 53.131, 53.15, 53.31, 53.32,
5-2 53.331, 53.34, 53.35, 53.36(a), and 53.37-53.42 apply to and
5-3 govern the corporation and its procedures and bonds.
5-4 (d) The corporation shall adopt rules governing the issuance
5-5 of bonds on behalf of an authorized open-enrollment charter school.
5-6 (e) The comptroller shall establish a fund dedicated to the
5-7 credit enhancement of bonds issued under this section. The fund
5-8 may receive donations. The obligation of the fund is limited to an
5-9 amount equal to the balance of the fund.
5-10 (f) A revenue bond issued under this section is not a debt
5-11 of the state or any state agency, political corporation, or
5-12 political subdivision of the state and is not a pledge of the faith
5-13 and credit of any of these entities. A revenue bond is payable
5-14 solely from the revenue of the authorized open-enrollment charter
5-15 school on whose behalf the bond is issued. A revenue bond issued
5-16 under this section must contain on its face a statement to the
5-17 effect that:
5-18 (1) neither the state nor a state agency, political
5-19 corporation, or political subdivision of the state is obligated to
5-20 pay the principal of or interest on the bond; and
5-21 (2) neither the faith and credit nor the taxing power
5-22 of the state or any state agency, political corporation, or
5-23 political subdivision of the state is pledged to the payment of the
5-24 principal of or interest on the bond.
5-25 SECTION 6. (a) Section 12.1011, Education Code, is repealed.
5-26 (b) A charter for an open-enrollment charter school granted
5-27 under the authority of Section 12.1011, Education Code, as that
5-28 section existed before repeal by this Act, is considered to have
5-29 been granted under the authority of Section 12.101, Education Code.
5-30 SECTION 7. This Act prevails over any conflicting Act of the
5-31 77th Legislature, Regular Session, 2001, that amends or repeals a
5-32 provision of Title 2, Education Code, as amended by this Act,
5-33 regardless of the relative dates of enactment.
5-34 SECTION 8. This Act takes effect September 1, 2001.
5-35 * * * * *