By Kitchen                                            H.B. No. 2195
         77R8376 T                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to financial and operational accountability requirements
 1-3     for open-enrollment charter schools.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1. Section 12.110, Education Code, is amended to read
 1-6     as follows:
 1-7           Sec. 12.110.  APPLICATION. (a)  The State Board of Education
 1-8     shall adopt:
 1-9                 (1)  an application form and a procedure that must be
1-10     used to apply for a charter for an open-enrollment charter school;
1-11     and
1-12                 (2)  criteria to use in selecting a program for which
1-13     to grant a charter.
1-14           (b)  The application form must provide for including the
1-15     information required under Section 12.111 to be contained in a
1-16     charter.
1-17           (c)  As part of the application procedure, the board may
1-18     require a petition supporting a charter for a school signed by a
1-19     specified number of parents or guardians of school-age children
1-20     residing in the area in which a school is proposed or may hold a
1-21     public hearing to determine parental support for the school.
1-22           (d)  The board may approve or deny an application based on
1-23     criteria it adopts.  The criteria the board adopts must include:
1-24                 (1)  criteria relating to improving student performance
 2-1     and encouraging innovative programs; [and]
 2-2                 (2)  a statement from any school district whose
 2-3     enrollment is likely to be affected by the open-enrollment charter
 2-4     school, including information relating to any financial difficulty
 2-5     that a loss in enrollment may have on the district; and
 2-6                 (3)  a requirement for the charter school to prepare
 2-7     and submit to TEA documentation from applicants that demonstrates
 2-8     that:
 2-9                       (A)  charter school management staff possess an
2-10     understanding of and experience in accounting for funds and in
2-11     providing financial accountability reports that is based on
2-12     generally accepted accounting procedures and standards;
2-13                       (B)  all charter school board members and school
2-14     management staff have attended some minimum training regarding
2-15     areas from basic school laws and funding aspects to public
2-16     accountability;
2-17                       (C)  the charter school possesses the ability,
2-18     both prospective and current, to meet payrolls and other
2-19     contractual obligations;
2-20                       (D)  the charter school has a reasonable plan for
2-21     an organized shut down of operations in the event the charter
2-22     school ceases to operate as a charter school.  The closure plan
2-23     shall include, at a minimum:
2-24                             (i)  the charter school's process of
2-25     notifying its faculty, students, parents, and others involved in
2-26     the charter school that it is ceasing operations as of a specific
2-27     date; and
 3-1                             (ii)  the charter school's process of
 3-2     ensuring that all financial obligations incurred to the date it
 3-3     ceases operations have been or will be satisfied; and
 3-4                       (E)  the charter school management has a
 3-5     reasonable plan for implementation that demonstrates preparedness
 3-6     of the charter school operations before the date on which the
 3-7     charter school plans to begin operations.  The TEA shall respond to
 3-8     an implementation plan not later than the 10th day after the date a
 3-9     charter school organization submits its plan if the plan does not
3-10     adequately meet preparedness guidelines.
3-11           (e)  Each charter school organization that is approved by the
3-12     State Board of Education to operate as an open-enrollment charter
3-13     school shall submit status reports on the implementation plan not
3-14     later then the 60th day and the 30th day before the date on which
3-15     the school plans to begin operations as a charter school, and every
3-16     30th day after that date until the end of each school year.
3-17           (f)  The TEA shall conduct a compliance and readiness review
3-18     of each charter school organization that has been approved not
3-19     later than the 45th day before the date which the charter school
3-20     plans to begin operations.  The review must include an on-site
3-21     inspection and tests of financial accountability, curriculum
3-22     content, facility safety, and associated systems, including the
3-23     ability of the charter school organization to function
3-24     programmatically and financially according to accepted accounting
3-25     and curriculum content tests.
3-26           (g)  The TEA may delay enrollment of students in a charter
3-27     school if the compliance and readiness review reveals that the
 4-1     charter school organization is not prepared to meet its contractual
 4-2     obligations.  The TEA shall notify a charter school organization of
 4-3     a decision to delay enrollment.
 4-4           SECTION 2.  This Act takes effect September 1, 2001.