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By:  Shapiro                                                      S.B. No. 2  

	(In the Senate - Filed July 21, 2005; July 21, 2005, read 

first time and referred to Committee on Education; July 21, 2005, 

reported favorably by the following vote:  Yeas 6, Nays 0; 

July 21, 2005, sent to printer.)



A BILL TO BE ENTITLED
AN ACT
relating to public education and public school finance matters; imposing criminal penalties. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
ARTICLE 1. PUBLIC SCHOOL FINANCE
PART A. EDUCATION FUNDING AND SCHOOL PROPERTY TAX RELIEF
SECTION 1A.01. Subsections (a) and (e), Section 41.002, Education Code, are amended to read as follows: (a) A school district may not have a wealth per student that exceeds $339,000 [$305,000]. (e) Notwithstanding Subsection (a), and except as provided by Subsection (g), in accordance with a determination of the commissioner, the wealth per student that a school district may have after exercising an option under Section 41.003(2) or (3) may not be less than the amount needed to maintain state and local revenue in an amount equal to state and local revenue per weighted student for maintenance and operation of the district for the 1992-1993 school year less the district's current year distribution per weighted student from the available school fund, other than amounts distributed under Chapter 31, if the district imposes an effective tax rate for maintenance and operation of the district equal to the greater of the district's current tax rate or the maximum maintenance tax rate permitted under Section 45.003 [$1.50 on the $100 valuation of taxable property]. SECTION 1A.02. Subsection (d), Section 41.157, Education Code, is amended to read as follows: (d) Notwithstanding Section 45.003, the consolidated taxing district may levy, assess, and collect a maintenance tax for the benefit of the component districts at a rate that exceeds the maximum maintenance tax rate permitted under Section 45.003 [$1.50 per $100 valuation of taxable property] to the extent necessary to pay contracted obligations on the lease purchase of permanent improvements to real property entered into on or before May 12, 1993. The proposition to impose taxes at the necessary rate must be submitted to the voters in the manner provided by Section 45.003. SECTION 1A.03. Subsection (a), Section 42.005, Education Code, is amended to read as follows: (a) In this chapter, average daily attendance is: (1) the quotient of the sum of attendance for each day of the minimum number of days of instruction as described under Section 25.081(a) divided by the minimum number of days of instruction; [or] (2) for a district that operates under a flexible year program under Section 29.0821, the quotient of the sum of attendance for each actual day of instruction as permitted by Section 29.0821(b)(1) divided by the number of actual days of instruction as permitted by Section 29.0821(b)(1); or (3) for a district that operates under a flexible school day program under Section 29.0822, the quotient of the sum of attendance for each full-time equivalent day of instruction divided by the minimum number of days of instruction as described under Section 25.081(a). SECTION 1A.04. Subchapter A, Chapter 42, Education Code, is amended by adding Section 42.008 to read as follows: Sec. 42.008. REPORT ON EDUCATION SPENDING. Before each regular session of the legislature, the Legislative Budget Board shall submit to the commissioner and the legislature a report that includes: (1) a description of the amount of all spending on primary and secondary education in this state, disaggregated by federal, state, and local spending and spending by private entities; and (2) an analysis of the state's portion of spending. SECTION 1A.05. Section 42.2512, Education Code, is amended by adding Subsection (a-1) to read as follows: (a-1) In addition to any amounts to which a school district is entitled under Section 42.2541, a school district, including a school district that is otherwise ineligible for state aid under this chapter, is entitled to state aid in an amount, as determined by the commissioner, equal to the product of the following amount, as applicable, multiplied by the number of classroom teachers, full-time librarians, full-time counselors certified under Subchapter B, Chapter 21, and full-time school nurses employed by the district and entitled to a minimum salary under Section 21.402: (1) $1,500; or (2) $2,000, if H.B. No. 3, Acts of the 79th Legislature, 2nd Called Session, 2005, takes effect immediately. SECTION 1A.06. Subsection (a), Section 42.252, Education Code, is amended to read as follows: (a) Each school district's share of the Foundation School Program is determined by the following formula:
LFA = TR X DPV
where: "LFA" is the school district's local share; "TR" is a tax rate which for each hundred dollars of valuation is an effective tax rate of $0.76 [$0.86]; and "DPV" is the taxable value of property in the school district for the preceding tax year determined under Subchapter M, Chapter 403, Government Code. SECTION 1A.07. Section 42.253, Education Code, is amended by adding Subsection (e-2) to read as follows: (e-2) For the 2005-2006 school year, the limit authorized by Subsection (e) is reduced by $0.35. This subsection expires September 1, 2006. SECTION 1A.08. Subchapter E, Chapter 42, Education Code, is amended by adding Sections 42.2541 and 42.2542 to read as follows: Sec. 42.2541. ADDITIONAL TRANSITIONAL AID. (a) In this section, "weighted average daily attendance" has the meaning assigned by Section 42.302. (b) Notwithstanding Section 42.253, a school district is entitled to the amount of state revenue necessary to maintain state and local revenue in an amount equal to the sum of: (1) the amount of state and local revenue per student in weighted average daily attendance for maintenance and operation of the district that would have been available to the district if the funding elements under Chapters 41 and 42, including any amounts the district would have received under Rider 82, page III-23, Chapter 1330, Acts of the 78th Legislature, Regular Session, 2003 (the General Appropriations Act), in effect during the 2004-2005 school year, were in effect for the current school year; and (2) an amount equal to $37 per weighted student in average daily attendance. (c) The commissioner may increase the amount to which a school district is entitled under Subsection (b) as the commissioner determines necessary. (d) The commissioner shall determine the amount of state funds to which a school district is entitled under this section, including the amount per student in weighted average daily attendance, and shall make that determination available to the Legislative Budget Board. The commissioner's determination is final and may not be appealed. Sec. 42.2542. TEMPORARY LIMITATIONS ON AID. (a) Notwithstanding any other provision of this subtitle, for the 2005-2006 school year, the commissioner shall withhold from a school district the amount of state funds necessary to ensure that the district does not receive an amount of state and local revenue per student in weighted average daily attendance that is greater than 103 percent of the amount to which the district is entitled under Section 42.2541(b)(1). (b) The commissioner shall determine the amount of state funds required to be withheld under this section. The commissioner's determination is final and may not be appealed. (c) This section expires September 1, 2006. SECTION 1A.09. Subchapter E, Chapter 42, Education Code, is amended by adding Section 42.261 to read as follows: Sec. 42.261. USE OF CERTAIN REVENUE FOR ENHANCED SUPPORT STAFF COMPENSATION. (a) Beginning with the 2005-2006 school year, a school district must use state and local maintenance and operations revenue to provide enhanced compensation to district support staff. (b) The commissioner shall adopt rules necessary to implement this section. The rules must ensure compensation provided to district support staff described by Section 22.008 is increased by the amounts specified by that section. SECTION 1A.10. Section 42.302, Education Code, is amended by amending Subsection (a) and adding Subsection (a-1) to read as follows: (a) Each school district is guaranteed a specified amount per weighted student in state and local funds for each cent of tax effort over that required for the district's local fund assignment up to the maximum level specified in this subchapter. The amount of state support, subject only to the maximum amount under Section 42.303, is determined by the formula:
GYA = (GL X WADA X DTR X 100) - LR
where: "GYA" is the guaranteed yield amount of state funds to be allocated to the district; "GL" is the dollar amount guaranteed level of state and local funds per weighted student per cent of tax effort, which is the amount of district tax revenue per weighted student, per cent of tax effort available to a school district at the 90th percentile in wealth per student, as determined by the commissioner [$27.14] or a greater amount for any year provided by appropriation; "WADA" is the number of students in weighted average daily attendance, which is calculated by dividing the sum of the school district's allotments under Subchapters B and C, less any allotment to the district for transportation, any allotment under Section 42.158, and 50 percent of the adjustment under Section 42.102, by the basic allotment for the applicable year; "DTR" is the district [enrichment] tax rate of the school district, which is determined by subtracting the amounts specified by Subsection (b) from the total amount of maintenance and operations taxes collected by the school district for the applicable school year and dividing the difference by the quotient of the district's taxable value of property as determined under Subchapter M, Chapter 403, Government Code, or, if applicable, under Section 42.2521, divided by 100; and "LR" is the local revenue, which is determined by multiplying "DTR" by the quotient of the district's taxable value of property as determined under Subchapter M, Chapter 403, Government Code, or, if applicable, under Section 42.2521, divided by 100. (a-1) In this section, "wealth per student" means a school district's taxable value of property as determined under Subchapter M, Chapter 403, Government Code, divided by the number of students in weighted average daily attendance in the district. SECTION 1A.11. Section 42.303, Education Code, is amended to read as follows: Sec. 42.303. LIMITATION ON [ENRICHMENT] TAX RATE. The district [enrichment] tax rate ("DTR") under Section 42.302 may not exceed $0.39 [$0.64] per $100 of valuation, or a greater amount for any year provided by appropriation. SECTION 1A.12. Section 45.003, Education Code, is amended by amending Subsection (d) and adding Subsections (e) and (f) to read as follows: (d) A proposition submitted to authorize the levy of maintenance taxes must include the question of whether the governing board or commissioners court may levy, assess, and collect annual ad valorem taxes for the further maintenance of public schools, at a rate not to exceed the rate, which may be not more than $1.15 [$1.50] on the $100 valuation of taxable property in the district, stated in the proposition. (e) An election held before January 1, 2005, authorizing a maintenance tax at a rate of at least $1.15 on the $100 valuation of taxable property in the district is sufficient to authorize a rate of $1.15 or less for the 2005 tax year. An election held before January 1, 2006, authorizing a maintenance tax at a rate of at least $1.10 on the $100 valuation of taxable property in the district is sufficient to authorize a rate of $1.10 or less for the 2006 tax year or a subsequent tax year. (f) Notwithstanding Subsections (d) and (e) if a school district's maintenance and operations tax rate for the 2004 tax year exceeded a rate of $1.50 for each $100 of taxable value of property, the district is entitled to impose an ad valorem tax under this section: (1) without authorization at an election held for that purpose; and (2) at a rate not to exceed the sum of: (A) the rate authorized under this section; and (B) a rate equal to the amount by which the district's maintenance and operations tax rate for the 2004 tax year exceeded a rate of $1.50 for each $100 of taxable value of property. SECTION 1A.13. Subsections (b) and (f), Section 45.006, Education Code, are amended to read as follows: (b) Notwithstanding Section 45.003, a school district may levy, assess, and collect maintenance taxes at a rate that exceeds the maximum maintenance tax rate permitted under Section 45.003 [$1.50 per $100 valuation of taxable property] if: (1) additional ad valorem taxes are necessary to pay a debt of the district that: (A) resulted from the rendition of a judgment against the district before May 1, 1995; (B) is greater than $5 million; (C) decreases a property owner's ad valorem tax liability; (D) requires the district to refund to the property owner the difference between the amount of taxes paid by the property owner and the amount of taxes for which the property owner is liable; and (E) is payable according to the judgment in more than one of the district's fiscal years; and (2) the additional taxes are approved by the voters of the district at an election held for that purpose. (f) The governing body of a school district that adopts a tax rate that exceeds the maximum maintenance tax rate permitted under Section 45.003 [$1.50 per $100 valuation of taxable property] may set the amount of the exemption from taxation authorized by Section 11.13(n), Tax Code, at any time before the date the governing body adopts the district's tax rate for the tax year in which the election approving the additional taxes is held. SECTION 1A.14. Section 403.302, Government Code, is amended by adding Subsection (c-1) to read as follows: (c-1) This subsection applies only to a school district whose central administrative office is located in a county with a population of 9,000 or less and a total area of more than 6,000 square miles. If after conducting the annual study for a tax year the comptroller determines that the local value for a school district is not valid, the comptroller shall adjust the taxable value determined under Subsections (a) and (b) as follows: (1) for each category of property sampled and tested by the comptroller in the school district, the comptroller shall use the weighted mean appraisal ratio determined by the study, unless the ratio is more than four percentage points lower than the weighted mean appraisal ratio determined by the comptroller for that category of property in the immediately preceding study, in which case the comptroller shall use the weighted mean appraisal ratio determined in the immediately preceding study minus four percentage points; (2) the comptroller shall use the category weighted mean appraisal ratios as adjusted under Subdivision (1) to establish a value estimate for each category of property sampled and tested by the comptroller in the school district; and (3) the value estimates established under Subdivision (2), together with the local tax roll value for any categories not sampled and tested by the comptroller, less total deductions determined by the comptroller, determines the taxable value for the school district.
PART B. EDUCATION FUNDING AND EQUALIZATION
SECTION 1B.01. Subsection (b), Section 42.002, Education Code, is amended to read as follows: (b) The Foundation School Program consists of: (1) a basic program, as provided by this chapter, that provides for [two tiers that in combination provide for: [(A)] sufficient financing for all school districts to provide a basic program of education that is rated academically acceptable or higher under Section 39.072 and meets other applicable legal standards; [and] (2) an enrichment program, as provided by Subchapter F, that includes a guaranteed yield component to provide [(B)] substantially equal access to funds to provide an enriched program; and (3) [(2)] a facilities component as provided by Chapter 46. SECTION 1B.02. Section 42.007, Education Code, is amended by amending Subsection (c) and adding Subsection (e) to read as follows: (c) The funding elements must include: (1) an accreditation [a basic] allotment for the purposes of Section 42.101 that[, when combined with the guaranteed yield component provided by Subchapter F,] represents the cost per student of a regular education program that meets all mandates of law and regulation; (2) adjustments designed to reflect the variation in known resource costs and costs of education beyond the control of school districts; (3) appropriate program cost differentials and other funding elements for the programs authorized under Subchapter C, with the program funding level expressed as dollar amounts and as weights applied to the adjusted accreditation [basic] allotment for the appropriate year; (4) the maximum guaranteed level of qualified state and local funds per student for the purposes of the enrichment program under Subchapter F; (5) the enrichment [and facilities] tax rate under Subchapter F; (6) the computation of students in weighted average daily attendance under Section 42.302; and (7) the amount to be appropriated for the school facilities assistance program under Chapter 46. (e) The board shall contract for a comprehensive study of the funding elements. The board shall report the results of the study to the commissioner and the legislature not later than December 1, 2006. This subsection expires January 1, 2007. SECTION 1B.03. The heading to Subchapter B, Chapter 42, Education Code, is amended to read as follows:
SUBCHAPTER B. BASIC PROGRAM [ENTITLEMENT]
SECTION 1B.04. Section 42.101, Education Code, is amended to read as follows: Sec. 42.101. ACCREDITATION [BASIC] ALLOTMENT. For each student in average daily attendance, not including the time students spend each day in special education programs in an instructional arrangement other than mainstream or career and technology education programs, for which an additional allotment is made under Subchapter C, a district is entitled to an accreditation allotment of $4,300 [$2,537]. A greater amount for any school year may be provided by appropriation. SECTION 1B.05. Section 42.102, Education Code, is amended to read as follows: Sec. 42.102. COST OF EDUCATION ADJUSTMENT. (a) The accreditation [basic] allotment for each district is adjusted to reflect the geographic variation in known resource costs and costs of education due to factors beyond the control of the school district. The amount of the adjustment is 71 percent of the total amount that would result from application of the cost of education index adopted under this section, or a greater amount for any year provided by appropriation. (a-1) Notwithstanding any other provision of this section, the initial amount of the cost of education index adjustment is a percent determined by the Legislative Budget Board that would result in a total amount of funds delivered under this section that does not exceed the total amount of funds delivered using the application of the cost of education index as it existed on January 1, 2005. (a-2) The Legislative Budget Board shall annually increase the initial adjustment percentage determined under Subsection (a) so that the percentage: (1) increases at the same rate of growth as the implementation of the small and mid-sized district adjustments described by Sections 42.103(c-1) and (d-1); and (2) does not exceed 71 percent. (b) Except as provided by Subsection (c), the [The] cost of education adjustment is determined using the average of the three most recent index recomputations and adjustments adopted by the Legislative Budget Board under Subsection (d) [cost of education index adjustment adopted by the foundation school fund budget committee and contained in Chapter 203, Title 19, Texas Administrative Code, as that chapter existed on March 26, 1997]. (b-1) Except as provided by Subsection (c), the cost of education index to be used in determining the cost of education adjustment for the following school years is determined by the following formulas: (1) for the 2006-2007 school year: CEI = (TFE + (7 x PCEI))/8 (2) for the 2007-2008 school year: CEI = ((2 x TFE) + (6 x PCEI))/8 (3) for the 2008-2009 school year: CEI = ((2 x TFE) + (5 x PCEI) + LBBA)/8 (4) for the 2009-2010 school year: CEI = ((2 x TFE) + (4 x PCEI) + (2 x LBBA))/8 (5) for the 2010-2011 school year: CEI = ((2 x TFE) + (3 x PCEI) + (3 x LBBB))/8; (6) for the 2011-2012 school year: CEI = ((2 x TFE) + (2 x PCEI) + (4 x LBBB))/8; (7) for the 2012-2013 school year: CEI = ((2 x TFE) + PCEI + (5 x LBBC))/8; and (8) for the 2013-2014 school year: CEI = ((2 x TFE) + (6 x LBBC))/8 where: "CEI" is the index to be used; "TFE" is the teacher fixed effects index in the 2004 report commissioned by the Joint Select Committee on Public School Finance of the 78th Legislature; "PCEI" is the index applied during the 2005-2006 school year; "LBBA" is the index adopted by the Legislative Budget Board in accordance with Subsection (d) for the state fiscal biennium beginning September 1, 2007; "LBBB" is the index adopted by the Legislative Budget Board in accordance with Subsection (d) for the state fiscal biennium beginning September 1, 2009; and "LBBC" is the index adopted by the Legislative Budget Board in accordance with Subsection (d) for the state fiscal biennium beginning September 1, 2011. (c) If the adjustment provided by this section for a school year is less than the adjustment to which a school district would have been entitled using the index applied during the 2005-2006 school year, the district's adjustment shall be computed using the index applied during the 2005-2006 school year. (c-1) The application of the cost of education index under this section may not result in a greater difference between the highest adjustment and the lowest adjustment than the difference that existed between the highest and lowest adjustments under Chapter 203, Title 19, Texas Administrative Code, as that chapter existed on January 1, 2005. The Legislative Budget Board shall increase the amount of the lowest adjustment to satisfy this subsection. (d) The Legislative Budget Board shall: (1) conduct a study each biennium and recompute the cost of education index; and (2) adopt adjustments as the board determines are necessary to ensure that the cost of education index reflects current variations in known resource costs and costs of education, including costs related to social security, due to factors beyond the control of a school district. (d-1) All information relating to the computation and adoption of the cost of education index under this section, including underlying data, assumptions, and computations used in the development of the index, is public information. (e) A school district may appeal a determination of the Legislative Budget Board under Subsection (d) and request a contested case hearing before an administrative law judge of the State Office of Administrative Hearings. A district must pay the cost of an appeal under this section. An appeal must be limited to the computation and application of data under this section and may not include an appeal of the methodology used to compute the teacher fixed effects index. (f) Subsection (b) applies beginning with the 2014-2015 school year. Subsections (a-1), (a-2), (b-1), and this subsection expire September 1, 2015. (g) Beginning with the 2007-2008 school year, the amount of .062 (6.2 percent) is added to the adjustment provided for under Subsections (b), (b-1), (c), and (d) for any school district that pays taxes under 26 U.S.C. Section 3111(a), and its subsequent amendments, for employees covered by the social security retirement program, if the district covers all employees and did so prior to January 1, 2005. (h) Beginning with the 2007-2008 school year, the amount of .031 (3.1 percent) is added to the adjustment provided for under Subsections (b), (b-1), and (c) for any school district that pays taxes under 26 U.S.C. Section 3111(a), and its subsequent amendments, for employees covered by the social security retirement program, if the district covers at least 25 percent of its employees and did so prior to January 1, 2005. (i) The commissioner may adopt rules necessary for the implementation of this section. SECTION 1B.06. Section 42.103, Education Code, is amended by amending Subsections (a), (c), and (d) and adding Subsections (c-1), (c-2), (d-1), and (f) to read as follows: (a) The accreditation [basic] allotment for certain small and mid-sized districts is adjusted in accordance with this section. In this section: (1) "SA" ["AA"] is the district's size-adjusted accreditation [adjusted] allotment per student; (2) "ADA" is the number of students in average daily attendance for which the district is entitled to an allotment under Section 42.101; and (3) "AA" ["ABA"] is the adjusted accreditation [basic] allotment determined under Section 42.102. (c) The accreditation [basic] allotment of a school district that [contains less than 300 square miles and] has not more than 1,600 students in average daily attendance is adjusted by applying the following formula, or the formula under Subsection (d) if that results in a greater allotment:
SA = (1 + ((1,600 - ADA) X .0004)) X AA
[AA = (1 + ((1,600 - ADA) X .00025)) X ABA]
(c-1) Notwithstanding Subsection (c), the accreditation allotment of a school district that has not more than 1,600 students in average daily attendance is adjusted for the following school years by applying the following formulas, or the appropriate formula under Subsection (d-1) if that results in a greater allotment: (1) for the 2006-2007 school year: SA = (1 + ((1,600 - ADA) X .00026)) X AA (2) for the 2007-2008 school year: SA = (1 + ((1,600 - ADA) X .00028)) X AA (3) for the 2008-2009 school year: SA = (1 + ((1,600 - ADA) X .0003)) X AA (4) for the 2009-2010 school year: SA = (1 + ((1,600 - ADA) X .00032)) X AA; (5) for the 2010-2011 school year: SA = (1 + ((1,600 - ADA) X .00034)) X AA; (6) for the 2011-2012 school year: SA = (1 + ((1,600 - ADA) X .00036)) X AA; and (7) for the 2012-2013 school year: SA = (1 + ((1,600 - ADA) X .00038)) X AA (c-2) Notwithstanding Subsection (c-1), for the 2006-2007, 2007-2008, 2008-2009, 2009-2010, 2010-2011, 2011-2012, or 2012-2013 school year, the accreditation allotment of a school district that contains at least 300 square miles and has not more than 1,600 students in average daily attendance is adjusted by applying the following formula, or the appropriate formula under Subsection (d-1) if that results in a greater allotment:
SA = (1 + ((1,600 - ADA) X .0004)) X AA
(d) The accreditation [basic] allotment of a school district that offers a kindergarten through grade 12 program and has less than 5,000 students in average daily attendance is adjusted by applying the formula, of the following formulas, that results in the greatest adjusted allotment: (1) the formula in Subsection [(b) or] (c) [for which the district is eligible]; or (2) SA = (1 + ((5,000 - ADA) X .00004)) X AA
[AA = (1 + ((5,000 - ADA) X .000025)) X ABA].
(d-1) Notwithstanding Subsection (d), the accreditation allotment of a school district that offers a kindergarten through grade 12 program and has less than 5,000 students in average daily attendance is adjusted for the following school years by applying the following formulas, or the formula under Subsection (c) if that results in a greater allotment: (1) for the 2006-2007 school year: SA = (1 + ((5,000 - ADA) X .000026)) X AA (2) for the 2007-2008 school year: SA = (1 + ((5,000 - ADA) X .000028)) X AA (3) for the 2008-2009 school year: SA = (1 + ((5,000 - ADA) X .00003)) X AA (4) for the 2009-2010 school year: SA = (1 + ((5,000 - ADA) X .000032)) X AA; (5) for the 2010-2011 school year: SA = (1 + ((5,000 - ADA) X .000034)) X AA; (6) for the 2011-2012 school year: SA = (1 + ((5,000 - ADA) X .000036)) X AA; and (7) for the 2012-2013 school year: SA = (1 + ((5,000 - ADA) X .000038)) X AA (f) Subsections (c) and (d) apply beginning with the 2013-2014 school year. Subsections (c-1), (c-2), and (d-1) and this subsection expire September 1, 2014. SECTION 1B.07. Sections 42.104, 42.105, and 42.106, Education Code, are amended to read as follows: Sec. 42.104. USE OF SMALL OR MID-SIZED DISTRICT ADJUSTMENT IN CALCULATING SPECIAL ALLOTMENTS. In determining the amount of a special allotment under Subchapter C for a district to which Section 42.103 applies, a district's adjusted accreditation [basic] allotment is considered to be the district's adjusted accreditation allotment determined under Section 42.103. Sec. 42.105. SPARSITY ADJUSTMENT. Notwithstanding Sections 42.101, 42.102, and 42.103, a school district that has fewer than 130 students in average daily attendance shall be provided an adjusted accreditation [basic] allotment on the basis of 130 students in average daily attendance if it offers a kindergarten through grade 12 program and has preceding or current year's average daily attendance of at least 90 students or is 30 miles or more by bus route from the nearest high school district. A district offering a kindergarten through grade 8 program whose preceding or current year's average daily attendance was at least 50 students or which is 30 miles or more by bus route from the nearest high school district shall be provided an adjusted accreditation [basic] allotment on the basis of 75 students in average daily attendance. An average daily attendance of 60 students shall be the basis of providing the adjusted accreditation [basic] allotment if a district offers a kindergarten through grade 6 program and has preceding or current year's average daily attendance of at least 40 students or is 30 miles or more by bus route from the nearest high school district. Sec. 42.106. ADJUSTED PROPERTY VALUE FOR DISTRICTS NOT OFFERING ALL GRADE LEVELS. For purposes of this chapter, the taxable value of property of a school district that contracts for students residing in the district to be educated in another district under Section 25.039(a) is adjusted by applying the formula:
ADPV = DPV - (TN/MTR) [(TN/.015)]
where: "ADPV" is the district's adjusted taxable value of property; "DPV" is the taxable value of property in the district for the preceding tax year determined under Subchapter M, Chapter 403, Government Code; [and] "TN" is the total amount of tuition required to be paid by the district under Section 25.039 for the school year for which the adjustment is made, not to exceed the amount specified by commissioner rule under Section 25.039(b); and "MTR" is the maximum maintenance tax rate permitted under Section 45.003, expressed as a rate to be applied to the total valuation of taxable property. SECTION 1B.08. Subsections (a), (b), (e), (g), and (k), Section 42.151, Education Code, are amended to read as follows: (a) For each student in average daily attendance in a special education program under Subchapter A, Chapter 29, in a mainstream instructional arrangement, a school district is entitled to an annual allotment equal to the adjusted accreditation [basic] allotment multiplied by 1.1. For each full-time equivalent student in average daily attendance in a special education program under Subchapter A, Chapter 29, in an instructional arrangement other than a mainstream instructional arrangement, a district is entitled to an annual allotment equal to the adjusted accreditation [basic] allotment multiplied by a weight determined according to instructional arrangement as follows: Homebound 5.0 Hospital class 3.0 Speech therapy 5.0 Resource room 3.0 Self-contained, mild and moderate, regular campus 3.0 Self-contained, severe, regular campus 3.0 Off home campus 2.7 Nonpublic day school 1.7 Vocational adjustment class 2.3 (b) A special instructional arrangement for students with disabilities residing in care and treatment facilities, other than state schools, whose parents or guardians do not reside in the district providing education services shall be established under the rules of the commissioner [State Board of Education]. The funding weight for this arrangement shall be 4.0 for those students who receive their education service on a local school district campus. A special instructional arrangement for students with disabilities residing in state schools shall be established under the rules of the commissioner [State Board of Education] with a funding weight of 2.8. (e) The commissioner [State Board of Education] by rule shall prescribe the qualifications an instructional arrangement must meet in order to be funded as a particular instructional arrangement under this section. In prescribing the qualifications that a mainstream instructional arrangement must meet, the commissioner [board] shall establish requirements that students with disabilities and their teachers receive the direct, indirect, and support services that are necessary to enrich the regular classroom and enable student success. (g) The commissioner [State Board of Education] shall adopt rules and procedures governing contracts for residential placement of special education students. The legislature shall provide by appropriation for the state's share of the costs of those placements. (k) A school district that provides an extended year program required by federal law for special education students who may regress is entitled to receive funds in an amount equal to 75 percent, or a lesser percentage determined by the commissioner, of the adjusted accreditation [basic] allotment [or adjusted allotment, as applicable,] for each full-time equivalent student in average daily attendance, multiplied by the amount designated for the student's instructional arrangement under this section, for each day the program is provided divided by the number of days in the minimum school year. The total amount of state funding for extended year services under this section may not exceed $10 million per year. A school district may use funds received under this section only in providing an extended year program. SECTION 1B.09. Subsections (a), (e), (h), and (k), Section 42.152, Education Code, are amended to read as follows: (a) For each student who is educationally disadvantaged or who is a student who does not have a disability and resides in a residential placement facility in a district in which the student's parent or legal guardian does not reside, a district is entitled to an annual allotment equal to the adjusted accreditation [basic] allotment multiplied by 0.2, and by 2.41 for each full-time equivalent student who is in a remedial and support program under Section 29.081 because the student is pregnant. (e) The commissioner may: (1) retain a portion of the total amount allotted under Subsection (a) that the commissioner considers appropriate to finance [intensive accelerated instruction programs and] study guides provided under Section 39.024(c) [Sections 39.024(b) and (c)]; and (2) reduce each district's basic program [tier one] allotments in the same manner described for a reduction in allotments under Section 42.253. (h) After deducting the amount withheld under Subsection (f) from the total amount appropriated for the allotment under Subsection (a), the commissioner shall reduce each district's basic program [tier one] allotments in the same manner described for a reduction in allotments under Section 42.253 and shall allocate funds to each district accordingly. (k) After deducting the amount withheld under Subsection (i) from the total amount appropriated for the allotment under Subsection (a), the commissioner shall reduce each district's basic program [tier one] allotments in the same manner described for a reduction in allotments under Section 42.253. SECTION 1B.10. Section 42.153, Education Code, is amended by amending Subsection (a) and adding Subsections (a-1) and (d) to read as follows: (a) Except as provided by Subsection (a-1), for [For] each student in average daily attendance in a bilingual education or special language program under Subchapter B, Chapter 29, a district is entitled to an annual allotment equal to the adjusted accreditation [basic] allotment multiplied by 0.1. (a-1) This subsection applies only to funding for students who have been enrolled in a bilingual education or special language program for less than three years. The commissioner by rule shall determine a method for determining whether a student has been enrolled in a program for less than three years. For each student in average daily attendance in a bilingual education or special language program under Subchapter B, Chapter 29, who has been enrolled in the program for less than three years, a district is entitled to an annual allotment equal to the adjusted accreditation allotment multiplied by a weight according to the grade level to which the student is assigned, as follows: Prekindergarten-Grade 2 0.12 Grades 3-5 0.18 Grades 6-8 0.24 Grades 9-12 0.3 (d) A district is not entitled to an allotment under this section for a student who meets the criteria for transferring out of the district's bilingual education or special language program but continues participating in the program under Section 29.056(i). SECTION 1B.11. Subsections (a) and (e), Section 42.154, Education Code, are amended to read as follows: (a) For each full-time equivalent student in average daily attendance in an approved career and technology education program in grades nine through 12 or in career and technology education programs for students with disabilities in grades seven through 12, a district is entitled to an annual allotment equal to the adjusted accreditation [basic] allotment multiplied by a weight of 1.35. (e) Out of the total statewide allotment for career and technology education under this section, the commissioner shall set aside an amount specified in the General Appropriations Act, which may not exceed an amount equal to one percent of the total amount appropriated, to support regional career and technology education planning. After deducting the amount set aside under this subsection from the total amount appropriated for career and technology education under this section, the commissioner shall reduce each district's basic program [tier one] allotments in the same manner described for a reduction in allotments under Section 42.253. SECTION 1B.12. Section 42.155, Education Code, is amended by amending Subsection (c) and adding Subsection (c-1) to read as follows: (c) Each district or county operating a regular transportation system is entitled to an allotment based on the daily cost per regular eligible student of operating and maintaining the regular transportation system and the linear density of that system. In determining the cost, the commissioner shall give consideration to factors affecting the actual cost of providing these transportation services in each district or county. The average actual cost is to be computed by the commissioner and included for consideration by the legislature in the General Appropriations Act. (c-1) The allotment per mile of approved route under Subsection (c) is computed as follows: Linear Density Grouping Allocation Per Mile of Approved Route 2.40 and above .........$ 1.42 1.65 to 2.40 ..........1.28 1.15 to 1.65 ..........1.11 .90 to 1.15 ...........97 .65 to .90 ...........88 The allocation per mile of approved route for the bottom linear density groupings of up to .40 through .65 shall be moved into the next linear density group of up to .90 [may not exceed the amount set by appropriation]. SECTION 1B.13. Subsections (a) and (d), Section 42.156, Education Code, are amended to read as follows: (a) For each identified student a school district serves in a program for gifted and talented students that the district certifies to the commissioner as complying with Subchapter D, Chapter 29, a district is entitled to an annual allotment equal to the district's adjusted accreditation [basic] allotment as determined under Section 42.102 or Section 42.103, as applicable, multiplied by .12 for each school year or a greater amount provided by appropriation. (d) If the amount of state funds for which school districts are eligible under this section exceeds the amount of state funds appropriated in any year for the programs, the commissioner shall reduce each district's basic program [tier one] allotments in the same manner described for a reduction in allotments under Section 42.253. SECTION 1B.14. Subsection (a), Section 42.157, Education Code, is amended to read as follows: (a) Except as provided by Subsection (b), for each student in average daily attendance who is using a public education grant under Subchapter G, Chapter 29, to attend school in a district other than the district in which the student resides, the district in which the student attends school is entitled to an annual allotment equal to the adjusted accreditation [basic] allotment multiplied by a weight of 0.1. SECTION 1B.15. Section 42.158, Education Code, is amended by amending Subsections (b), (d), and (g) and adding Subsection (b-1) to read as follows: (b) For the first school year in which students attend a new instructional facility, a school district other than a fast growth school district is entitled to an allotment of $250 for each student in average daily attendance at the facility. For the second and third school years [year] in which students attend that instructional facility, the [a school] district is entitled to an allotment of $250 for each additional student in average daily attendance at the facility. (b-1) For the first school year in which students attend a new instructional facility, a fast growth school district is entitled to an allotment of $500 for each student in average daily attendance at the facility. For the second and third school years in which students attend that instructional facility, the district is entitled to an allotment of $500 for each additional student in average daily attendance at the facility. (d) The amount appropriated for allotments under this section may not exceed $50 [$25] million in a school year. If the total amount of allotments to which districts are entitled under this section for a school year exceeds the amount appropriated for allotments under this section, the commissioner shall reduce each district's allotment under this section in the manner provided by Section 42.253(h). (g) In this section: (1) "Fast growth school district" means a school district that during the preceding five school years has experienced an increase in enrollment of: (A) greater than 10 percent; or (B) more than 3,500 students. (2) "Instructional [, "instructional] facility" has the meaning assigned by Section 46.001. SECTION 1B.16. Section 42.251, Education Code, is amended to read as follows: Sec. 42.251. FINANCING; GENERAL RULE. (a) The sum of the accreditation [basic] allotment under Subchapter B and the special allotments under Subchapter C, computed in accordance with this chapter, constitute the basic program [tier one] allotments. The sum of the basic program [tier one] allotments and the enrichment program [guaranteed yield] allotments under Subchapter F, computed in accordance with this chapter, constitute the total cost of the Foundation School Program. (b) The program shall be financed by: (1) ad valorem tax revenue generated by an equalized uniform school district effort; (2) ad valorem tax revenue generated by local school district effort for an enrichment program in accordance with Subchapter F in excess of the equalized uniform school district effort; (3) state available school funds distributed in accordance with law; and (4) state funds appropriated for the purposes of public school education and allocated to each district in an amount sufficient to finance the cost of each district's Foundation School Program not covered by other funds specified in this subsection. SECTION 1B.17. Subsection (a), Section 42.2512, Education Code, is amended to read as follows: (a) In addition to any amounts to which a school district is entitled under Section 42.2541, a [A school] district [, including a school district that is otherwise ineligible for state aid under this chapter,] is entitled to state aid in an amount, as determined by the commissioner, equal to the [difference, if any, between: [(1) an amount equal to the] product of the following amount, as applicable, [$3,000] multiplied by the number of classroom teachers, full-time librarians, full-time counselors certified under Subchapter B, Chapter 21, and full-time school nurses employed by the district and entitled to a minimum salary under Section 21.402: (1) $3,000; or (2) $3,500, if H.B. No. 3, Acts of the 79th Legislature, 2nd Called Session, 2005, takes effect immediately [; and [(2) an amount equal to 80 percent of the amount of additional funds to which the district is entitled due to the increases made by S.B. No. 4, Acts of the 76th Legislature, Regular Session, 1999, to: [(A) the equalized wealth level under Section 41.002; [(B) the basic allotment under Section 42.101; and [(C) the guaranteed level of state and local funds per weighted student per cent of tax effort under Section 42.302]. SECTION 1B.18. Subsection (a), Section 42.2515, Education Code, is amended to read as follows: (a) For each school year, a school district[, including a school district that is otherwise ineligible for state aid under this chapter,] is entitled to state aid in an amount equal to the amount of all tax credits credited against ad valorem taxes of the district in that year under Subchapter D, Chapter 313, Tax Code. SECTION 1B.19. The heading to Section 42.252, Education Code, is amended to read as follows: Sec. 42.252. LOCAL SHARE OF BASIC PROGRAM COST [(TIER ONE)]. SECTION 1B.20. Subsection (a), Section 42.252, Education Code, is amended to read as follows: (a) Each school district's share of the basic program under the Foundation School Program is determined by the following formula:
LFA = TR X DPV
where: "LFA" is the school district's local share; "TR" is a tax rate which for each hundred dollars of valuation is an adopted [effective] tax rate of $1.10 [$0.86]; and "DPV" is the taxable value of property in the school district for the preceding tax year determined under Subchapter M, Chapter 403, Government Code. SECTION 1B.21. Subsection (a), Section 42.2521, Education Code, is amended to read as follows: (a) For purposes of Chapter [Chapters 41 and] 46 and this chapter, and to the extent money specifically authorized to be used under this section is available, the commissioner shall adjust the taxable value of property in a school district that, due to factors beyond the control of the board of trustees, experiences a rapid decline in the tax base used in calculating taxable values in excess of four percent of the tax base used in the preceding year. SECTION 1B.22. Section 42.253, Education Code, is amended by amending Subsections (a), (g), (h), and (i) and adding Subsections (c-1), (e-2), and (m) to read as follows: (a) For each school year the commissioner shall determine: (1) the amount of money to which a school district is entitled under Subchapters B and C; (2) the amount of money to which a school district is entitled under Subchapter F; (3) the amount of money allocated to the district from the available school fund; (4) the amount of each district's basic program [tier one] local share under Section 42.252; and (5) the amount of each district's enrichment program [tier two] local revenue [share] under Section 42.302. (c-1) Notwithstanding any other provision of this chapter, with the approval of the commissioner, a school district in which the number of students in average daily attendance increases as a result of enrolling students pursuant to an agreement to provide education services in cooperation with a public charter district is entitled to receive state revenue for the additional students in an amount not less than the district's total state and local revenue per student, including revenue from accreditation allotments and an enrichment program under Subchapter F, calculated on the basis of the district's average daily attendance prior to the enrollment of the additional students. (e-2) For the 2006-2007 school year, the limit authorized by Subsection (e) is an amount equal to the sum of the rate described by Section 42.252 and the rate described by Section 42.303(c)(1). This subsection expires September 1, 2007. (g) If a school district demonstrates to the satisfaction of the commissioner that the estimate of the district's tax rate, student enrollment, or taxable value of property used in determining the amount of state funds to which the district is entitled are so inaccurate as to result in undue financial hardship to the district, the commissioner may adjust funding to that district in that school year to the extent that funds are available for that year[, including funds in the reserve account. Funds in the reserve account may not be used under this subsection until any reserve funds have been used for purposes of Subsection (f)]. (h) If the total amount appropriated for a year for the Foundation School Program is less than the amount of money to which school districts are entitled for that year [legislature fails during the regular session to enact the transfer and appropriation proposed under Subsection (f) and there are not funds available under Subsection (j)], the commissioner shall reduce the total amount of state funds allocated to each district from any source by an amount determined by a method under which the application of the same number of cents of increase in enrichment tax rate in all districts applied to the taxable value of property of each district, as determined under Subchapter M, Chapter 403, Government Code, together with any state aid generated by those taxes, results in a total amount of levy and aid equal to the total reduction. The following fiscal year, a district's entitlement under this section is increased by an amount equal to the reduction made under this subsection. (i) Not later than March 1 each year, the commissioner shall determine the actual amount of state funds to which each school district is entitled under [the allocation formulas in] this chapter for the current school year and shall compare that amount with the amount of the warrants issued to each district for that year. If the amount of the warrants differs from the amount to which a district is entitled because of variations in the district's tax rate, student enrollment, or taxable value of property, the commissioner shall adjust the district's entitlement for the next fiscal year accordingly. (m) Payments from the foundation school fund to each school district shall be made as follows: (1) 15 percent of the yearly entitlement of the district shall be paid in an installment to be made on or before the 25th day of September of a fiscal year; (2) 80 percent of the yearly entitlement of the district shall be paid in eight equal installments to be made on or before the 25th day of October, November, December, January, March, May, June, and July; and (3) five percent of the yearly entitlement of the district shall be paid in an installment to be made after the fifth day of September and not later than the 10th day of September of the calendar year following the calendar year of the payment made under Subdivision (1). SECTION 1B.23. Subsections (a), (b), and (c), Section 42.2531, Education Code, are amended to read as follows: (a) The commissioner may make adjustments to amounts due to a school district under this chapter or Chapter 46, [or to amounts necessary for a district to comply with the requirements of Chapter 41,] as provided by this section. (b) A school district that has a major taxpayer, as determined by the commissioner, that because of a protest of the valuation of the taxpayer's property fails to pay all or a portion of the ad valorem taxes due to the district may apply to the commissioner to have the district's taxable value of property or ad valorem tax collections adjusted for purposes of this chapter or Chapter [41 or] 46. The commissioner may make the adjustment only to the extent the commissioner determines that making the adjustment will not: (1) in the fiscal year in which the adjustment is made, cause the amount to which school districts are entitled under this chapter to exceed the amount appropriated for purposes of the Foundation School Program for that year; and (2) if the adjustment is made in the first year of a state fiscal biennium, cause the amount to which school districts are entitled under this chapter for the second year of the biennium to exceed the amount appropriated for purposes of the Foundation School Program for that year. (c) The commissioner shall recover the benefit of any adjustment made under this section by making offsetting adjustments in the school district's taxable value of property or ad valorem tax collections for purposes of this chapter or Chapter [41 or] 46 on a final determination of the taxable value of property that was the basis of the original adjustment, or in the second school year following the year in which the adjustment is made, whichever is earlier. SECTION 1B.24. Subchapter E, Chapter 42, Education Code, is amended by adding Sections 42.2541 and 42.2542 to read as follows: Sec. 42.2541. ADDITIONAL TRANSITIONAL AID. (a) In this section, "weighted average daily attendance" has the meaning assigned by Section 42.302. (b) Notwithstanding Section 42.253, a school district is entitled to the amount of state revenue necessary to maintain state and local revenue in an amount equal to the sum of: (1) the amount of state and local revenue per student in weighted average daily attendance for maintenance and operation of the district that the district received for the 2005-2006 school year; and (2) an amount equal to $98 per weighted student in average daily attendance. (c) The commissioner may increase the amount to which a school district is entitled under Subsection (b) as the commissioner determines necessary. (d) The commissioner shall: (1) compute and publish the amount of state and local revenue per student in weighted average daily attendance to which a district is entitled under Subsection (b) for the 2006-2007 school year; and (2) use that amount per student in weighted average daily attendance in determining the amount to which a district is entitled under this section in subsequent school years. (e) The commissioner shall determine the amount of state funds to which a school district is entitled under this section, including the amount per student in weighted average daily attendance, and shall make that determination available to the Legislative Budget Board. The commissioner's determination is final and may not be appealed. Sec. 42.2542. TEMPORARY LIMITATIONS ON AID. (a) Notwithstanding any other provision of this subtitle, the commissioner shall withhold from a school district the amount of state funds necessary to ensure that the district does not receive an amount of state and local revenue per student in weighted average daily attendance that is greater than the following percentage of the amount to which the district is entitled under Section 42.2541(b)(1): (1) 108 percent for the 2006-2007 school year; (2) 116 percent for the 2007-2008 school year; and (3) 124 percent for the 2008-2009 school year. (b) The commissioner shall determine the amount of state funds required to be withheld under this section. The commissioner's determination is final and may not be appealed. (c) Any amount to which a school district is entitled under Subchapter F is not included in determining the amount that a district may receive under this section. (d) This section expires September 1, 2009. SECTION 1B.25. Chapter 42, Education Code, is amended by adding Subchapter F to read as follows:
SUBCHAPTER F. ENRICHMENT PROGRAM
Sec. 42.301. PURPOSE. The purpose of the enrichment program is to provide each school district with the opportunity to supplement the basic program at a level of its own choice. An allotment under this subchapter may be used for any legal purpose other than capital outlay or debt service. Sec. 42.302. ALLOTMENT. (a) In this section, "wealth per student" means a school district's taxable value of property as determined under Subchapter M, Chapter 403, Government Code, divided by the number of students in weighted average daily attendance in the district. (b) Each school district is guaranteed a specified amount per student in state and local funds for each cent of enrichment tax effort up to the maximum level specified in this subchapter. The amount of state support is determined by the formula:
EGYA = (EGL X WADA X DETR X 100) - LR
where: "EGYA" is the guaranteed yield amount of state enrichment funds to be allocated to the district; "EGL" is the dollar amount guaranteed level of state and local funds per student per cent of tax effort, which is the amount of district enrichment tax revenue per cent of tax effort available to a school district at the 98th percentile in wealth per student, as determined by the commissioner; "WADA" is the number of students in weighted average daily attendance, which is computed by dividing the sum of the school district's allotments under Subchapters B and C, less any allotment to the district for transportation, any allotment to the district under Section 42.158, and 50 percent of the adjustment under Section 42.102, by the accreditation allotment for the applicable year; "DETR" is the district enrichment tax rate of the school district, which is determined by dividing the total amount of enrichment taxes collected by the school district for the applicable school year by the district's taxable value of property for the preceding year as determined under Subchapter M, Chapter 403, Government Code, divided by 100; and "LR" is the local revenue, which is determined by multiplying "DETR" by the quotient of the district's taxable value of property for the preceding year as determined under Subchapter M, Chapter 403, Government Code. (c) The percentile in wealth per student described by Subsection (b) for purposes of determining the dollar amount guaranteed level of state and local funds per student per cent of tax effort ("EGL") applies beginning with the 2014-2015 school year. For the 2006-2007 through 2013-2014 school years, EGL is determined as follows: (1) for the 2006-2007 school year, EGL is determined using the 92nd percentile in wealth per student; (2) for the 2007-2008 school year, EGL is determined using the 92nd percentile in wealth per student; (3) for the 2008-2009 school year, EGL is determined using the 93rd percentile in wealth per student; (4) for the 2009-2010 school year, EGL is determined using the 93rd percentile in wealth per student; (5) for the 2010-2011 school year, EGL is determined using the 94th percentile in wealth per student; (6) for the 2011-2012 school year, EGL is determined using the 95th percentile in wealth per student; (7) for the 2012-2013 school year, EGL is determined using the 96th percentile in wealth per student; and (8) for the 2013-2014 school year, EGL is determined using the 97th percentile in wealth per student. (d) This subsection and Subsection (c) expire September 1, 2013. Sec. 42.303. ENRICHMENT TAX. (a) Subject to Section 42.304, the board of trustees of a school district may impose an annual ad valorem tax for the further maintenance of the public schools in the district. (b) The district enrichment tax rate may not exceed $0.15 for each $100 of taxable value of property. (c) Notwithstanding Subsection (b) but subject to Section 42.306: (1) for the 2006 tax year, the district enrichment tax rate may not exceed $0.05 for each $100 of taxable value of property; and (2) for the 2007 and 2008 tax years, the district enrichment tax rate may not exceed $0.10 for each $100 of taxable value of property. (d) This subsection and Subsection (c) expire January 1, 2009. Sec. 42.304. ENRICHMENT TAX ELECTION. (a) Except as provided by Section 42.306, a school district may not impose an enrichment tax under Section 42.303 unless authorized by a majority of the qualified voters of the district voting at an election held for that purpose. (b) A proposition submitted to authorize the imposition of an enrichment tax must include the question of whether the board of trustees may impose annual ad valorem taxes for the further enrichment of public schools at a rate not to exceed the rate stated in the proposition. (c) A district may tax at a rate below the rate authorized in an election under this section and does not need additional authority to increase the rate up to the rate authorized in the election. Sec. 42.305. COMPUTATION OF ENRICHMENT AID FOR DISTRICT ON MILITARY RESERVATION OR AT STATE SCHOOL. The amount to which a school district is entitled under this subchapter in a school district located on a federal military installation or at Moody State School is computed using the average district enrichment tax rate and property value per student of school districts in the county, as determined by the commissioner. Sec. 42.306. ENRICHMENT TAX AVAILABLE TO CERTAIN DISTRICTS WITHOUT ELECTION. (a) To the extent consistent with Subsection (b), if a school district's maintenance and operations tax rate for the 2004 tax year exceeded a rate of $1.50 for each $100 of taxable value of property, the district is entitled to impose an ad valorem tax under Section 42.303 without holding an election under Section 42.304. (b) The enrichment tax authorized by this section may not exceed a rate equal to the lesser of: (1) $0.15 for each $100 of taxable value of property; or (2) a rate equal to the amount by which the district's maintenance and operations tax rate for the 2004 tax year exceeded a rate of $1.50 for each $100 of taxable value of property. (c) The portion of an enrichment tax imposed by a school district under this section that exceeds the rate permitted by Subsection (b) is subject to voter approval under Section 42.304. (d) The portion of an enrichment tax imposed by a school district under this section that exceeds the rate permitted by Subsection (b) is subject to the limits of Section 42.303(c). This subsection expires January 1, 2009. SECTION 1B.26. Chapter 42, Education Code, is amended by adding Subchapter I to read as follows:
SUBCHAPTER I. ADDITIONAL EQUALIZATION
Sec. 42.401. DISTRICTS SUBJECT TO ADDITIONAL EQUALIZATION. (a) Except as provided by Subsection (b), a school district in which the district's local share under Section 42.252 exceeds the district's basic program allotments under Section 42.251 shall be consolidated by the commissioner under Subchapter H, Chapter 41. (b) As an alternative to consolidation under Subchapter H, Chapter 41, a school district described by Subsection (a) may elect to purchase average daily attendance credit in the manner provided by Subchapter D, Chapter 41. SECTION 1B.27. The heading to Chapter 41, Education Code, is amended to read as follows: CHAPTER 41. EQUALIZATION ACTIONS [EQUALIZED WEALTH LEVEL] SECTION 1B.28. Section 41.004, Education Code, is amended to read as follows: Sec. 41.004. ANNUAL REVIEW OF EQUALIZATION [PROPERTY WEALTH]. (a) Not later than July 15 of each year, using the estimate of enrollment under Section 42.254, the commissioner shall review the local share and basic program allotments [wealth per student] of each school district [districts] in the state and shall notify: (1) each district subject to commissioner action under Section 42.401 [with wealth per student exceeding the equalized wealth level]; and (2) [each district to which the commissioner proposes to annex property detached from a district notified under Subdivision (1), if necessary, under Subchapter G; and [(3)] each district to which the commissioner proposes to consolidate a district notified under Subdivision (1), if necessary, under Subchapter H. (b) If, before the dates provided by this subsection, a district notified under Subsection (a)(1) has not purchased average daily attendance credit as provided by Subchapter D [successfully exercised one or more options under Section 41.003 that reduce the district's wealth per student to a level equal to or less than the equalized wealth level], the commissioner [shall order the detachment of property from that district as provided by Subchapter G. If that detachment will not reduce the district's wealth per student to a level equal to or less than the equalized wealth level, the commissioner may not detach property under Subchapter G but] shall order the consolidation of the district with one or more other districts as provided by Subchapter H. [An agreement under Section 41.003(1) or (2) must be executed not later than September 1 immediately following the notice under Subsection (a).] An election to authorize the purchase of average daily attendance credit as provided by Subchapter D [for an option under Section 41.003(3), (4), or (5)] must be ordered before September 1 immediately following the notice under Subsection (a). (c) A district notified under Subsection (a) may not adopt a tax rate for the tax year in which the district receives the notice until the commissioner certifies that the district has entered into an agreement under Subchapter D to purchase average daily attendance credit [achieved the equalized wealth level]. (d) A [detachment and annexation or] consolidation under this chapter: (1) is effective for Foundation School Program funding purposes for the school year that begins in the calendar year in which the [detachment and annexation or] consolidation is [agreed to or] ordered; and (2) applies to the ad valorem taxation of property beginning with the tax year in which the [agreement or] order is effective. SECTION 1B.29. Subsection (a), Section 41.006, Education Code, is amended to read as follows: (a) The commissioner may adopt rules necessary for the implementation of this chapter. The rules may provide for the commissioner to make necessary adjustments to the provisions of Chapter 42, including providing for the commissioner to make an adjustment in the funding element established by Section 42.302, at the earliest date practicable, to the amount the commissioner believes, taking into consideration options exercised by school districts under Section 42.401 [this chapter] and estimates of student enrollments, will match appropriation levels. SECTION 1B.30. Subsection (a), Section 41.008, Education Code, is amended to read as follows: (a) The governing board of a school district that results from consolidation under this chapter[, including a consolidated taxing district under Subchapter F,] for the tax year in which the consolidation occurs may determine whether to adopt a homestead exemption provided by Section 11.13, Tax Code, and may set the amount of the exemption, if adopted, at any time before the school district adopts a tax rate for that tax year. This section applies only to an exemption that the governing board of a school district is authorized to adopt or change in amount under Section 11.13, Tax Code. SECTION 1B.31. Subsection (a), Section 41.009, Education Code, is amended to read as follows: (a) A tax abatement agreement executed by a school district that is involved in consolidation [or in detachment and annexation of territory] under this chapter is not affected and applies to the taxation of the property covered by the agreement as if executed by the district within which the property is included. SECTION 1B.32. Section 41.010, Education Code, is amended to read as follows: Sec. 41.010. TAX INCREMENT OBLIGATIONS. The payment of tax increments under Chapter 311, Tax Code, is not affected by the consolidation of territory [or tax bases or by annexation] under this chapter. In each tax year a school district paying a tax increment from taxes on property over which the district has assumed taxing power is entitled to retain the same percentage of the tax increment from that property that the district in which the property was located before the consolidation [or annexation] could have retained for the respective tax year. SECTION 1B.33. Subsection (a), Section 41.013, Education Code, is amended to read as follows: (a) A [Except as provided by Subchapter G, a] decision of the commissioner under this chapter is appealable under Section 7.057. SECTION 1B.34. Section 41.091, Education Code, is amended to read as follows: Sec. 41.091. AGREEMENT. A school district subject to Section 42.401 [with a wealth per student that exceeds the equalized wealth level] may execute an agreement with the commissioner to purchase attendance credits in an amount equal to the difference between the district's local share under Section 42.252 and the district's basic program allotments under Section 42.251 [sufficient, in combination with any other actions taken under this chapter, to reduce the district's wealth per student to a level that is equal to or less than the equalized wealth level]. SECTION 1B.35. Subsection (a), Section 41.093, Education Code, is amended to read as follows: (a) The cost of each credit is an amount equal to the greater of: (1) the amount of the district's maintenance and operations tax revenue per student in [weighted] average daily attendance for the school year for which the contract is executed; or (2) the amount of the statewide district average of maintenance and operations tax revenue per student in [weighted] average daily attendance for the school year preceding the school year for which the contract is executed. SECTION 1B.36. Section 41.251, Education Code, is amended to read as follows: Sec. 41.251. COMMISSIONER ORDER. If the commissioner is required under Section 42.401 [41.004] to order the consolidation of districts, the consolidation is governed by this subchapter. The commissioner's order shall be effective on a date determined by the commissioner, but not later than the earliest practicable date after November 8. SECTION 1B.37. Section 41.252, Education Code, is amended by amending Subsections (a) and (c) and adding Subsection (d) to read as follows: (a) In selecting the districts to be consolidated with a district subject to Section 42.401 [that has a property wealth greater than the equalized wealth level], the commissioner shall select one or more districts with a local share under Section 42.252 [wealth per student] that, when consolidated, will result in a consolidated district that is not subject to Section 42.401 [with a wealth per student equal to or less than the equalized wealth level]. In achieving that result, the commissioner shall give priority to school districts in the following order: (1) first, to the contiguous district that has the lowest local share percentage [wealth per student] and is located in the same county; (2) second, to the district that has the lowest local share percentage [wealth per student] and is located in the same county; (3) third, to a contiguous district not subject to Section 42.401 [with a property wealth below the equalized wealth level] that has requested the commissioner to consider [that] it for inclusion [be considered] in a consolidation plan; (4) fourth, to include as few districts as possible that are not subject to Section 42.401 and [fall below the equalized wealth level within the consolidation order that] have not requested the commissioner to be included in a consolidation plan; (5) fifth, to the district that has the lowest local share percentage [wealth per student] and is located in the same regional education service center area; and (6) sixth, to a district that has a tax rate similar to that of the district subject to Section 42.401 [that has a property wealth greater than the equalized wealth level]. (c) In applying the selection criteria specified by Subsection (a), if more than two districts are to be consolidated, the commissioner shall select the third and each subsequent district to be consolidated by treating the district subject to Section 42.401 [that has a property wealth greater than the equalized wealth level] and the district or districts previously selected for consolidation as one district. (d) In this section, "local share percentage" means a percentage determined by dividing a school district's local share under Section 42.252 by the district's basic program allotment under Section 42.251. SECTION 1B.38. This part applies beginning with the 2006-2007 school year, except that Subsection (h), Section 42.253, Education Code, as amended in this part, applies beginning with the 2005-2006 school year.
PART C. SCHOOL FACILITIES
SECTION 1C.01. Subchapter C, Chapter 45, Education Code, is amended by adding Section 45.0561 to read as follows: Sec. 45.0561. PRIORITY FOR CERTAIN BONDS. (a) In determining which bonds to approve for guarantee under this subchapter, the commissioner shall give priority to a school district that has had bonds refunded and defeased under Subchapter D, Chapter 46. (b) The commissioner may adopt rules to administer this section. SECTION 1C.02. Section 46.006, Education Code, is amended by adding Subsection (c-1) and amending Subsection (d) to read as follows: (c-1) A district's wealth per student is reduced by 25 percent for purposes of this section if the district has had significant student enrollment growth that, as determined by the commissioner, is substantially related to the enrollment of children of military personnel transferred to a military base near the district following the closure or realignment of another military base under the Defense Base Closure and Realignment Act of 1990 (10 U.S.C. Section 2687). The reduction is in addition to any reduction under Subsection (a), (b), or (c) and is computed before the district's wealth per student is reduced under those subsections, if applicable. (d) The commissioner shall adjust the rankings after making the reductions in wealth per student required by Subsections (a), (b), [and] (c), and (c-1). SECTION 1C.03. Section 46.008, Education Code, is amended to read as follows: Sec. 46.008. STANDARDS. (a) The commissioner shall establish standards for adequacy of school facilities. The standards must include requirements related to space, educational adequacy, and construction quality. All new facilities constructed after September 1, 1998, must meet the standards to be eligible to be financed with state or local tax funds. (b) To be eligible to be financed with state or local tax funds, any portable, modular building capable of being relocated that is purchased or leased after September 1, 2005, for use as a school facility, regardless of whether the building is an industrialized building as defined by Section 1202.003, Occupations Code, must be inspected as provided by Subchapter E, Chapter 1202, Occupations Code, to ensure compliance with the mandatory building codes or approved designs, plans, and specifications. SECTION 1C.04. Subchapter A, Chapter 46, Education Code, is amended by adding Section 46.014 to read as follows: Sec. 46.014. STUDY REGARDING INSTRUCTIONAL FACILITIES. (a) The comptroller in cooperation with the agency shall study: (1) existing instructional facilities in this state; and (2) the projected need for instructional facilities in the next 10 to 20 years. (b) The study of instructional facilities must include an examination of the following objectives and any other objectives determined appropriate by the comptroller and the agency: (1) a determination as to which of the following needs of school districts in this state relating to instructional facilities are the most pressing: (A) the need for new instructional facilities; (B) the need for repairs to existing instructional facilities; (C) the need for renovations of existing instructional facilities; and (D) other needs relating to instructional facilities; (2) an estimate of the total cost of necessary construction, repair, or renovation of instructional facilities in the next 10 to 20 years; (3) a determination of the number of school districts and campuses that have student populations that exceed the maximum capacity of the districts' or campuses' classrooms, cafeterias, or gymnasiums, including if appropriate a determination of: (A) the number of portable buildings in use by each school district and campus; (B) the square footage of instructional facility space per student; and (C) the number of instructional facilities that are serving a number of students that exceeds the maximum capacity of the facility; and (4) a determination of the extent to which instructional facilities in this state are energy and water use efficient. (c) In projecting the need for instructional facilities in the next 10 to 20 years, the study must determine the facilities that will need to be constructed, repaired, or renovated in this state. The study may include: (1) projections as to the date new instructional facilities will be needed or the date existing instructional facilities will need to be repaired or renovated; (2) information relating to the date of construction or age of existing instructional facilities; and (3) information relating to the dates of the most recent major renovations of existing instructional facilities. (d) The comptroller and the agency shall determine the appropriate methodology for use in conducting the study required by this section. (e) Not later than December 1, 2006, the comptroller and the agency shall submit to the legislature a report based on the study required by this section. This section expires January 15, 2007. SECTION 1C.05. Section 46.033, Education Code, is amended to read as follows: Sec. 46.033. ELIGIBLE BONDS. Bonds, including bonds issued under Section 45.006, are eligible to be paid with state and local funds under this subchapter if: (1) the district made payments on the bonds during the 2004-2005 [2002-2003] school year or taxes levied to pay the principal of and interest on the bonds were included in the district's audited debt service collections for that school year; and (2) the district does not receive state assistance under Subchapter A for payment of the principal and interest on the bonds. SECTION 1C.06. Subsection (c), Section 46.034, Education Code, is amended to read as follows: (c) If the amount required to pay the principal of and interest on eligible bonds in a school year is less than the amount of payments made by the district on the bonds during the 2004-2005 [2002-2003] school year or the district's audited debt service collections for that school year, the district may not receive aid in excess of the amount that, when added to the district's local revenue for the school year, equals the amount required to pay the principal of and interest on the bonds. SECTION 1C.07. Chapter 46, Education Code, is amended by adding Subchapter D to read as follows:
SUBCHAPTER D. REFUNDING TO INCREASE PERMANENT SCHOOL FUND CAPACITY
Sec. 46.091. DEFINITIONS. In this subchapter: (1) "Allocated revenue" means that portion of state assistance under Subchapter A or B equal to the scheduled debt service payments in effect immediately before the refunding of eligible bonds being refunded under this subchapter. (2) "Authority" means the Texas Public Finance Authority. (3) "Authority obligation" means any type of revenue obligation, including a bond, note, certificate, or other instrument issued under this subchapter. The term includes an obligation issued to refund an obligation issued under this subchapter. (4) "Credit agreement" has the meaning assigned by Section 1371.001, Government Code. (5) "Obligation administrative expenses" means expenses incurred in administering authority obligations, including: (A) administrative expenses incurred by the commissioner or the authority relating to the administration of this subchapter; and (B) fees for: (i) paying agents, trustees, and attorneys; (ii) other professional services necessary to ensure compliance with applicable state or federal law; and (iii) a school district with eligible bonds refunded under this subchapter, professional service expenses in an amount approved by the commissioner. Sec. 46.092. ISSUANCE OF AUTHORITY OBLIGATIONS. (a) If the commissioner determines that it is feasible to refund eligible school district bonds as provided by this subchapter, the commissioner may request that the authority issue authority obligations necessary to accomplish the refunding. On request of the commissioner, the authority shall issue authority obligations, in accordance with Title 9, Government Code, in an amount sufficient to: (1) refund eligible bonds; (2) pay all obligation administrative expenses; (3) pay the costs of issuing the authority obligations; (4) pay the costs of any credit agreement; and (5) provide any reserve funds. (b) Authority obligations and any related credit agreements must be secured by allocated revenue. (c) The commissioner's request for the issuance of authority obligations must state: (1) the maximum principal amount of bonds to be refunded under this subchapter; (2) the maximum term of bonds to be refunded; and (3) the amount of state assistance under Subchapter A or B to support the payment of the bonds to be refunded. (d) To best achieve the economic goals of this subchapter and accomplish the borrowing at the lowest practicable cost, the authority may determine: (1) the method of sale of authority obligations; (2) the type and form of obligation; (3) the maximum interest rates and other terms of authority obligations; and (4) the need for related credit agreements. (e) The authority shall certify to the commissioner that each series of authority obligations issued under this subchapter will result in an aggregate present value savings. (f) Section 46.007 does not apply to the issuance of authority obligations under this subchapter. Sec. 46.093. ELIGIBILITY OF BONDS FOR REFUNDING. School district bonds are eligible for refunding under this subchapter if: (1) the district receives state assistance for payment of the bonds under Subchapter A or B; and (2) the principal and interest of the bonds are guaranteed by the permanent school fund under Subchapter C, Chapter 45. Sec. 46.094. IDENTIFICATION OF ELIGIBLE BONDS; NOTICE TO SCHOOL DISTRICTS. (a) If the commissioner determines that it is feasible to refund eligible school district bonds as provided by this subchapter, the commissioner shall periodically identify which outstanding school bonds are eligible for refunding under this subchapter. The commissioner shall notify the school districts issuing the bonds that: (1) the bonds are subject to being refunded and defeased through the issuance of authority obligations; and (2) a school district whose bonds are refunded under this subchapter is entitled to priority in the allocation of resulting increases in the capacity of the permanent school fund to guarantee school district bonds under Subchapter C, Chapter 45, as provided by Section 45.0561. (b) The district may elect to direct the commissioner to include any of the district's eligible bonds for consideration for refunding under this subchapter. If the district does not elect to direct the commissioner to include the district's bonds for consideration for refunding within the time prescribed by this subsection, the bonds may not be refunded under this subchapter. (c) Notice under Subsection (a) must: (1) identify the bonds the commissioner proposes to refund under this subchapter; (2) state that the school district may elect to direct the commissioner to include any of the district's bonds for consideration for refunding; and (3) advise the district of: (A) the effect of electing to have the bonds considered for refunding; and (B) the effect of not electing to have the bonds considered for refunding. Sec. 46.095. AGREEMENT BETWEEN COMMISSIONER AND AUTHORITY. (a) To permit the authority to pledge allocated revenue to the payment of authority obligations, the commissioner shall enter into an agreement with the authority under which: (1) the commissioner, acting on behalf of each school district whose bonds are being refunded under this subchapter, may pledge the allocated revenue to secure the payment of the principal of and interest and premium on authority obligations; and (2) each school year, the commissioner shall allocate and distribute to the authority allocated revenue equal to the scheduled debt service payments for that year on the bonds being refunded. (b) An agreement under this section must state that the funding for allocated revenue is subject to legislative appropriation. A distribution to the authority under the agreement is considered to be a distribution for purposes of Section 46.009. If the commissioner determines that the amount appropriated for any year for allocated revenue is insufficient, the commissioner may act under Section 46.009(b) to ensure the sufficiency of allocated revenue. Sec. 46.096. USE OF PROCEEDS OF AUTHORITY OBLIGATIONS. (a) The authority shall use the proceeds of authority obligations, less the cost of issuing those obligations and the cost of administrative expenses incurred by the commissioner or the authority relating to the administration of this subchapter, to refund and defease eligible bonds as requested by the commissioner. To accomplish the refunding and defeasance: (1) the commissioner, on behalf of the school districts issuing the bonds, may: (A) exercise any reserved right of optional redemption; and (B) issue any required notice of redemption and defeasance; and (2) the authority, on behalf of the districts issuing the bonds, may enter into escrow agreements and purchase escrow securities as provided by Chapter 1207, Government Code, with the same effect under that chapter as if the authority were the issuer of the bonds being refunded and defeased. (b) The authority shall provide to a school district whose bonds are refunded under this subchapter appropriate documentation showing that the bonds have been refunded and defeased. Sec. 46.097. PAYMENT OF OBLIGATION ADMINISTRATIVE EXPENSES. After paying the current debt service on authority obligations, the authority may use allocated revenue to pay obligation administrative expenses. Sec. 46.098. DISTRIBUTION OF ALLOCATED REVENUE IN EXCESS OF DISTRICT'S ENTITLEMENT TO STATE ASSISTANCE. (a) If the commissioner allocates and distributes to the authority allocated revenue for a school district's bonds refunded under this subchapter in an amount in excess of the state assistance to which the district is entitled in connection with all of the district's bonds, the district shall reimburse the commissioner in the amount of the excess. (b) If a school district elects not to reimburse the commissioner in the amount of excess state assistance as required under Subsection (a), the commissioner shall direct the comptroller to withhold the amount of the excess from the succeeding payment of state assistance payable to the school district and credit the amount to the account or accounts from which the excess payment was made. (c) A school may reimburse the commissioner under this section from any lawfully available source. Sec. 46.099. REFUNDING OF AUTHORITY OBLIGATIONS. The authority may issue authority obligations to refund any previously issued authority obligations if the authority by resolution determines that the issuance of refunding obligations will result in the lowest practicable borrowing cost to the state and school districts with outstanding eligible bonds. Sec. 46.100. AUTHORITY OBLIGATIONS NOT A PLEDGE OF STATE'S CREDIT. (a) Authority obligations and any related credit agreements are not: (1) a debt of the state, a state agency, or a political subdivision of the state; or (2) a pledge of the faith and credit or taxing power of the state, a state agency, or a political subdivision of the state. (b) Authority obligations and any related credit agreements are payable solely from allocated revenue pledged to the payment of those obligations. (c) Subject to the limitations of Subsection (a), as long as authority obligations are outstanding, the state may not: (1) take any action to limit or restrict the authority's responsibility to pay the authority obligations; or (2) in any way impair the rights and remedies of the owners of authority obligations. (d) The reallocation of allocated revenue to secure authority obligations to refund school district bonds is: (1) consistent with the original authorization, allocation, and application of state assistance under Subchapter A or B; (2) in furtherance of any covenants, agreements, or undertakings by school districts or the commissioner to cause allocated revenue to be credited to debt service funds for school district bonds; and (3) consistent with all statutory and regulatory dedications and restrictions on the allocated revenue.
ARTICLE 2. EDUCATION EXCELLENCE
PART A. EDUCATION EMPLOYEES
SECTION 2A.01. Section 11.201, Education Code, is amended by adding Subsection (e) to read as follows: (e) A superintendent may not receive any financial benefit for personal services performed by the superintendent for any business entity that conducts business with or solicits business from the school district. Any financial benefit received by the superintendent for performing personal services for any other entity must be approved by the board of trustees on a case-by-case basis in an open meeting. SECTION 2A.02. Subchapter E, Chapter 11, Education Code, is amended by adding Section 11.203 to read as follows: Sec. 11.203. SCHOOL LEADERSHIP PILOT PROGRAM FOR PRINCIPALS. (a) The agency shall develop and operate a school leadership pilot program for principals in accordance with this section. (b) The agency shall operate the program in cooperation with a nonprofit corporation that has substantial experience in developing best practices to improve leadership skills, student achievement, student graduation rates, and teacher retention. (c) The agency shall consult appropriate departments at institutions of higher education to develop program course work that focuses on management and business training. (d) A principal or a person interested in becoming a principal may apply for participation in the program, in a form and manner determined by the commissioner. (e) A principal of a campus rated academically unacceptable, as well as any person employed to replace that principal, shall participate in the program and complete the program requirements not later than a date determined by the commissioner. (f) To pay the costs of administering the program, the commissioner shall retain a portion of the total amount of funds allotted under the Foundation School Program that the commissioner considers appropriate to finance activities under this section and shall reduce the total amount of state funds allocated to each district from any source in the same manner described for a reduction in allotments under Section 42.253. (g) To implement and administer the program, the commissioner may accept grants, gifts, and donations from public and private entities. (h) The commissioner may adopt rules necessary to administer this section. (i) This section expires September 1, 2010. SECTION 2A.03. Subsection (a), Section 21.003, Education Code, is amended to read as follows: (a) A person may not be employed as a teacher, teacher intern or teacher trainee, librarian, educational aide, administrator, educational diagnostician, or counselor by a school district unless the person holds an appropriate certificate or permit issued as provided by Subchapter B. SECTION 2A.04. Section 21.045, Education Code, is amended by amending Subsections (a) and (b) and adding Subsection (e) to read as follows: (a) The board shall propose rules establishing standards to govern the approval and continuing accountability of all educator preparation programs based on information that is disaggregated with respect to sex and ethnicity and that includes: (1) results of the certification examinations prescribed under Section 21.048(a); [and] (2) performance based on the appraisal system for beginning teachers adopted by the board; (3) performance of students taught by beginning teachers, as determined on the basis of annual individual student growth in achievement, as measured under Section 39.034, and any other factor considered appropriate by the board; and (4) retention rates of beginning teachers in the profession. (b) Each educator preparation program shall submit data elements as required by the board for an annual performance report to ensure access and equity. At a minimum, the annual report must contain the performance data from Subsection (a), other than the data required for purposes of Subsection (a)(3), and the following information, disaggregated by sex and ethnicity: (1) the number of candidates who apply; (2) the number of candidates admitted; (3) the number of candidates retained; (4) the number of candidates completing the program; (5) the number of candidates employed in the profession after completing the program; and (6) the number of candidates retained in the profession. (e) The agency shall annually submit student performance data to the board for purposes of Subsection (a)(3). The agency shall provide the data to the board in a manner that protects the names of individual students and otherwise complies with the confidentiality requirements prescribed by Section 39.030. SECTION 2A.05. Subsection (a), Section 21.104, Education Code, is amended to read as follows: (a) A teacher employed under a probationary contract may be discharged at any time for: (1) good cause as determined by the board of trustees; or (2) a financial exigency that requires a reduction in personnel[, good cause being the failure to meet the accepted standards of conduct for the profession as generally recognized and applied in similarly situated school districts in this state]. SECTION 2A.06. Subchapter C, Chapter 21, Education Code, is amended by adding Section 21.1041 to read as follows: Sec. 21.1041. HEARING FOR CERTAIN DISCHARGES UNDER PROBATIONARY CONTRACT. (a) If the board of trustees proposes to discharge a teacher under Section 21.104(a)(2), the board shall give written notice of the proposed action to the teacher. (b) If the teacher desires a hearing after receiving notice of the proposed discharge, the teacher shall notify the board of trustees in writing, not later than the 15th day after the date the teacher receives the notice of the proposed action. The board shall provide for a hearing to be held not later than the 15th day after the date the board receives the request for a hearing unless the parties agree in writing to a different date. The hearing must be closed unless the teacher requests an open hearing. The hearing must be conducted in accordance with rules adopted by the board. At the hearing, the teacher may: (1) be represented by a representative of the teacher's choice; (2) hear the evidence supporting the reason for the discharge; (3) cross-examine adverse witnesses; and (4) present evidence. (c) After a hearing held under Subsection (b), the board of trustees shall: (1) take the appropriate action to discharge the teacher or allow the teacher to complete the probationary contract term; and (2) notify the teacher in writing of its decision not later than the 15th day after the date of the hearing. (d) If the teacher does not request a hearing under Subsection (b), the board of trustees shall take the appropriate action to discharge the teacher and shall notify the teacher in writing of that action not later than the 30th day after the date the notice of proposed discharge for a financial exigency that requires a reduction in personnel was sent to the teacher. SECTION 2A.07. Subchapter E, Chapter 21, Education Code, is amended by adding Section 21.2111 to read as follows: Sec. 21.2111. HEARING FOR CERTAIN DISCHARGES UNDER TERM CONTRACT. (a) If the board of trustees proposes to discharge a teacher under Section 21.211(a)(2), the board shall give written notice of the proposed action to the teacher. (b) If the teacher desires a hearing after receiving notice of the proposed discharge, the teacher shall notify the board of trustees in writing, not later than the 15th day after the date the teacher receives the notice of the proposed action. The board shall provide for a hearing to be held not later than the 15th day after the date the board receives the request for a hearing unless the parties agree in writing to a different date. The hearing must be closed unless the teacher requests an open hearing. The hearing must be conducted in accordance with rules adopted by the board. At the hearing, the teacher may: (1) be represented by a representative of the teacher's choice; (2) hear the evidence supporting the reason for the discharge; (3) cross-examine adverse witnesses; and (4) present evidence. (c) After the hearing, the board of trustees shall: (1) take the appropriate action to discharge the teacher or allow the teacher to complete the current contract term; and (2) notify the teacher in writing of its decision not later than the 15th day after the date of the hearing. (d) If the teacher does not request a hearing under Subsection (b), the board of trustees shall take the appropriate action to discharge the teacher and shall notify the teacher in writing of that action not later than the 30th day after the date the notice of proposed discharge for a financial exigency that requires a reduction in personnel was sent to the teacher. SECTION 2A.08. Section 21.251, Education Code, is amended to read as follows: Sec. 21.251. APPLICABILITY. (a) This subchapter applies if a teacher requests a hearing after receiving notice of the proposed decision to: (1) terminate the teacher's continuing contract at any time; (2) except as provided by Subsection (b)(3), terminate the teacher's probationary or term contract before the end of the contract period; or (3) suspend the teacher without pay. (b) This subchapter does not apply to: (1) a decision to terminate a teacher's employment at the end of a probationary contract; [or] (2) a decision not to renew a teacher's term contract, unless the board of trustees of the employing district has decided to use the process prescribed by this subchapter for that purpose; or (3) a decision to terminate a teacher's probationary contract or term contract before the end of the contract period for a financial exigency that requires a reduction in personnel. SECTION 2A.09. Subsection (a), Section 21.301, Education Code, is amended to read as follows: (a) Not later than the 20th day after the date the board of trustees or board subcommittee announces its decision under Section 21.259, [or] the board advises the teacher of its decision not to renew the teacher's contract under Section 21.208, or the board advises the teacher of its decision to terminate the teacher's probationary contract under Section 21.1041(c) or (d) or term contract under Section 21.2111(c) or (d), the teacher may appeal the decision by filing a petition for review with the commissioner. SECTION 2A.10. Subsection (a), Section 21.303, Education Code, is amended to read as follows: (a) If the board of trustees decided not to renew a teacher's term contract or decided to terminate a teacher's probationary contract under Section 21.1041(c) or (d) or term contract under Section 21.2111(c) or (d), the commissioner may not substitute the commissioner's judgment for that of the board of trustees unless the decision was arbitrary, capricious, or unlawful or is not supported by substantial evidence. SECTION 2A.11. Section 21.402, Education Code, is amended by amending Subsections (a), (c), and (d) and adding Subsections (a-1), (a-2), (c-1), (c-2), and (d-1) to read as follows: (a) Except as provided by Subsection (a-1), (a-2), (d), (e), or (f), a school district must pay each classroom teacher, full-time librarian, full-time counselor certified under Subchapter B, or full-time school nurse not less than the minimum monthly salary, based on the employee's level of experience, determined by the following formula:
MS = SF x AA [FS]
where: "MS" is the minimum monthly salary; "SF" is the applicable salary factor specified by Subsection (c); and "AA" is the accreditation allotment under Section 42.101 ["FS" is the amount, as determined by the commissioner under Subsection (b), of state and local funds per weighted student available to a district eligible to receive state assistance under Section 42.302 with an enrichment tax rate, as defined by Section 42.302, equal to the maximum rate authorized under Section 42.303, except that the amount of state and local funds per weighted student does not include the amount attributable to the increase in the guaranteed level made by H.B. No. 3343, Acts of the 77th Legislature, Regular Session, 2001]. (a-1) A school district is not required to pay the minimum salary determined under Subsection (a) to an educator who receives a service retirement annuity under Chapter 824, Government Code. (a-2) A school district is not required to pay the minimum salary determined under Subsection (a) to an educator who does not hold a lifetime or standard certificate and who holds a probationary, temporary, or emergency educator certificate. (c) The salary factors per step are as follows: Years Experience 0 1 2 Salary Factor .6451 [.5656] .6584 [.5790] .6719 [.5924] Years Experience 3 4 5 Salary Factor .6851 [.6058] .7133 [.6340] .7414 [.6623] Years Experience 6 7 8 Salary Factor .7695 [.6906] .7958 [.7168] .8205 [.7416] Years Experience 9 10 11 Salary Factor .8440 [.7651] .8658 [.7872] .8870 [.8082] Years Experience 12 13 14 Salary Factor .9067 [.8281] .9251 [.8467] .9430 [.8645] Years Experience 15 16 17 Salary Factor .9595 [.8811] .9753 [.8970] .9902 [.9119] Years Experience 18 19 20 and over Salary Factor 1.004 [.9260] 1.018 [.9394] 1.030 [.9520] (c-1) Notwithstanding Subsection (a), for the 2006-2007 school year, a classroom teacher, full-time librarian, full-time counselor certified under Subchapter B, or full-time school nurse is entitled to a monthly salary that is at least equal to the sum of: (1) the monthly salary the employee received for the 2004-2005 school year, including any local supplement and any money representing a career ladder supplement the employee would have received in the 2005-2006 school year; and (2) $350. (c-2) Subsections (c) and (c-1) apply beginning with the 2006–2007 school year, but only if H.B. No. 3, Acts of the 79th Legislature, 2nd Called Session, 2005, takes effect immediately. As necessary, for the 2005-2006 and 2006-2007 school years, the commissioner shall compute salary factors under Subsection (c) and amounts under Subsection (c-1)(2) to reflect the following monthly salary increases, relative to the preceding school year, for those employees: (1) for the 2005-2006 school year: (A) if H.B. No. 3, Acts of the 79th Legislature, 2nd Called Session, 2005, does not take effect immediately, $150; and (B) if H.B. No. 3, Acts of the 79th Legislature, 2nd Called Session, 2005, takes effect immediately, $200; and (2) for the 2006-2007 school year, $150. (d) A classroom teacher, full-time librarian, full-time counselor certified under Subchapter B, or full-time school nurse employed by a school district in the 2006-2007 [2000-2001] school year is, as long as the employee is employed by the same district, entitled to a salary that is at least equal to the salary the employee received for the 2006-2007 [2000-2001] school year. (d-1) A classroom teacher, full-time librarian, full-time counselor certified under Subchapter B, or full-time nurse may elect to receive a portion of the person's annual salary as health care supplementation as provided by Chapter 1580, Insurance Code. SECTION 2A.12. Subchapter J, Chapter 21, Education Code, is amended by adding Section 21.458 to read as follows: Sec. 21.458. MENTORS. (a) Each school district may assign a mentor teacher to each classroom teacher who has less than two years of teaching experience if the mentor: (1) teaches in the same school; (2) to the extent practicable, teaches the same subject or grade level, as applicable; and (3) meets the qualifications prescribed by commissioner rules adopted under Subsection (b). (b) The commissioner shall adopt rules necessary to administer this section, including rules concerning the duties and qualifications of a teacher who serves as a mentor. The rules concerning qualifications must require that to serve as a mentor a teacher must: (1) complete a research-based mentor and induction training program approved by the commissioner; (2) complete a mentor training program provided by the district; and (3) have at least three complete years of teaching experience with a proven record of assisting students, as a whole, in achieving growth in performance. (c) The commissioner shall develop proposed rules under Subsection (b) by negotiated rulemaking as provided by Chapter 2008, Government Code. (d) From the funds appropriated to the agency for purposes of this section, the commissioner shall adopt rules and provide funding to school districts that assign mentor teachers under this section. Funding provided to districts under this subsection may be used only for providing: (1) mentor teacher stipends; (2) scheduled time for mentor teachers to provide mentoring to assigned classroom teachers; and (3) mentoring support through providers of mentor training. (e) In adopting rules under Subsection (d), the commissioner shall rely on research-based mentoring programs that, through external evaluation, have demonstrated success. (f) If insufficient funds are appropriated to the agency for purposes of this section, in providing funding under this section the commissioner shall give preference to a school district: (1) that has an unsatisfactory teacher retention rate; (2) that has an unsatisfactory high school graduation rate; (3) that has an unsatisfactory dropout rate; or (4) in which a high percentage of district students perform unsatisfactorily on assessment instruments administered under Section 39.023. (g) The commissioner shall annually evaluate the effectiveness of school district mentor programs established under this section. The evaluation must consider: (1) the performance of students in districts that assign mentor teachers under this section on assessment instruments administered under Section 39.023; (2) the districts' high school graduation rates; and (3) the districts' teacher attrition rates. SECTION 2A.13. Chapter 21, Education Code, is amended by adding Subchapter N to read as follows:
SUBCHAPTER N. EDUCATOR EXCELLENCE INCENTIVE PROGRAM
Sec. 21.651. EDUCATOR EXCELLENCE INCENTIVE PROGRAM. (a) The commissioner shall establish an educator excellence incentive program under which school districts, in accordance with locally developed plans approved by the commissioner, provide incentive payments to employees whose students demonstrate successful annual individual student growth in achievement. (b) From funds appropriated for the purpose of this subchapter, the commissioner shall award incentive payments to each school district with a local incentive plan approved by the commissioner. The commissioner shall distribute the incentive payments each year to a qualifying school district on the basis of the district's actual average daily attendance for the preceding school year. The total amount of incentive payments made to school districts from funds appropriated for the incentive program under this subchapter may not exceed $100 million each fiscal year. (b-1) The commissioner may not award incentive payments to school districts under this subchapter before the 2006-2007 school year. This subsection expires September 1, 2007. (c) Except as provided by Subsections (d) and (e), each year a school district shall use funds received by the district under this subchapter to provide campus-based incentive payments in accordance with this subchapter. (d) A school district with an enrollment of less than 1,600 may use all of the funds received under this subchapter to provide stipends under Subsection (e). (e) A school district may use an amount not to exceed 50 percent of the funds received under this subchapter to provide stipends to: (1) teachers who are certified in a curriculum subject area in which the district is experiencing a shortage of qualified teachers, as determined by the commissioner; (2) teachers who serve as mentors in accordance with Section 21.458; (3) teachers who are assigned, during the first three years of the assignment, to a campus that is difficult to staff, according to standards established by the board of trustees of the district, including a rural or academically unacceptable campus; and (4) teachers who are certified by the National Board for Professional Teaching Standards or who are seeking that certification. (f) The commissioner shall adopt rules necessary to implement this subchapter. In adopting rules, the commissioner shall: (1) include criteria and guidelines for evaluating local incentive plans; and (2) encourage local flexibility in designing local incentive plans that promote student achievement. (g) The commissioner shall annually evaluate the effectiveness of the educator excellence incentive program for improving student performance on at-risk campuses established under this section. The evaluation must consider: (1) the performance of students in districts and participating campuses under this section on assessment instruments administered under Section 39.023; (2) the districts' and participating campuses' high school graduation and completion rates; and (3) the districts' and participating campuses' teacher attrition rates. Sec. 21.652. MINIMUM CRITERIA FOR LOCAL INCENTIVE PLANS. (a) A school district shall develop a local incentive plan for rewarding successful annual individual student growth in achievement in the district and submit the plan to the commissioner for approval. (b) A local incentive plan must be designed to reward campuses. (c) The primary criteria for making incentive payments to employees under a local incentive plan must be based on objective measures of student achievement, including a measure of annual individual student growth in achievement under Section 39.034, and the plan must provide for incentive payments to be awarded on the basis of high achievement, incremental growth in achievement, or both. A local incentive plan may also consider other indicators of employee performance, such as teacher evaluations conducted by principals or parents. (d) A local incentive plan must: (1) be developed through a process that includes participation of classroom teachers in the school district; and (2) be approved by the district-level planning and decision-making committee. (e) The campus-level planning and decision-making committee shall determine the appropriate distribution of funds received by a campus under this subchapter. Sec. 21.653. EMPLOYMENT CONTRACTS. (a) A school district shall provide in employment contracts that qualifying employees may receive an incentive payment under the local incentive plan. (b) The school district shall indicate that any incentive payment distributed is considered a bonus for performance and not an entitlement as part of an employee's salary. Sec. 21.654. DECISION REGARDING INCENTIVE PAYMENTS. A decision in providing an incentive payment under a local incentive plan approved under this subchapter is final and may not be appealed. SECTION 2A.14. Subchapter A, Chapter 22, Education Code, is amended by adding Section 22.008 to read as follows: Sec. 22.008. WAGE INCREASE FOR SUPPORT STAFF. (a) A school district each school year shall pay each full-time district employee, other than an administrator or an employee subject to the minimum salary schedule under Section 21.402, an amount at least equal to $1,000. (b) A school district each school year shall pay each part-time district employee, other than an administrator, an amount at least equal to $500. (c) A school district employee entitled to a wage increase under this section may elect to receive a portion of the person's annual wages as health care supplementation as provided by Chapter 1580, Insurance Code. (d) A payment under this section is in addition to wages the district would otherwise pay the employee during the school year. SECTION 2A.15. Subchapter A, Chapter 29, Education Code, is amended by adding Section 29.019 to read as follows: Sec. 29.019. SPEECH-LANGUAGE INSTRUCTION: ASSISTANTS. (a) This section applies to an assistant who: (1) has at least three years of experience in speech therapy, as determined by the State Board of Examiners for Speech-Language Pathology and Audiology; and (2) is supervised by a licensed speech-language pathologist. (b) An assistant described by Subsection (a) may attend, as related services personnel, a student admission, review, and dismissal committee meeting if the meeting involves a student for whom the assistant provides services. If an assistant attends a meeting as provided by this section, the supervising speech-language pathologist is not required to attend the meeting, except as provided by Subsection (c). (c) A supervising speech-language pathologist must attend a committee meeting under Subsection (b): (1) if the purpose of the committee meeting is to develop a student's initial individualized education program under Section 29.005; or (2) if the purpose of the committee meeting is to consider the student's dismissal, unless the supervising speech-language pathologist has submitted the pathologist's recommendation in writing on or before the date of the meeting. (d) This section: (1) does not create, increase, decrease, or otherwise affect a supervising speech-language pathologist's liability for actions taken by an assistant; and (2) is not a waiver of a school district's sovereign immunity. SECTION 2A.16. Effective September 1, 2006, Subchapter D, Chapter 54, Education Code, is amended by adding Section 54.220 to read as follows: Sec. 54.220. CHILDREN OF CLASSROOM TEACHERS. (a) In this section: (1) "Child" means a child of any age, including an adult child. The term includes an adopted child. (2) "Classroom teacher" has the meaning assigned by Section 5.001. (b) For purposes of this section, a person is another person's child if the other person is the person's natural or adoptive parent, managing or possessory conservator, or legal guardian. (c) The governing board of an institution of higher education shall exempt from the payment of tuition or from the payment of required fees for an academic year an eligible undergraduate student who is a child of an eligible classroom teacher and is designated by the classroom teacher to receive the exemption. (d) A classroom teacher is eligible to designate the teacher's child to receive an exemption under this section for an academic year if, at the beginning of the academic year, the teacher is employed full-time as a classroom teacher by a school district in this state and maintains that employment throughout the school year that corresponds to the academic year. (e) An undergraduate student is eligible for an exemption for an academic year under this section only if the student is a resident of this state for purposes of Subchapter B or is otherwise entitled to pay tuition and fees at the rate provided for residents of this state. A student who receives an exemption for an initial academic period is eligible for an exemption for a subsequent academic period only if the student has earned an overall grade point average of at least 2.5 on a four-point scale or the equivalent on course work previously attempted at institutions of higher education. (f) On the completion of a classroom teacher's 15th year of service, the teacher earns either an exemption from the payment of tuition or an exemption from the payment of required fees for one academic year for the benefit of one child. For each year of service that exceeds 15 years, the classroom teacher earns an additional tuition exemption or an additional fee exemption for one academic year for the benefit of one child. The classroom teacher may elect the type of exemption the child may receive under this section at the time the teacher designates the child to receive the exemption. The exemption earned by a classroom teacher for one year of service may be used for the benefit of only one child. Years of service as a classroom teacher are not required to be consecutive. A classroom teacher may not designate a child to receive an exemption under this section for an academic year unless the teacher's most recent five years of service were in this state. (g) A classroom teacher with at least 19 years of service may elect to use any earned but unused exemptions toward the payment of both the tuition and the required fees of one child during an academic year or to use the unused exemptions toward the payment of the tuition or the required fees, or both tuition and fees as permitted by the number of unclaimed exemptions, of more than one child during an academic year. Two classroom teachers may aggregate years of service to earn one or more exemptions for the benefit of one or more of their children in common, but each classroom teacher must maintain eligibility under Subsection (d) during the academic period for which the exemption is used. (h) If an undergraduate student fails to meet any eligibility requirement of Subsection (e) for an academic period, the student may not receive an exemption under this section for that academic period. An undergraduate student may become eligible to receive the exemption in a subsequent academic period of the same academic year if the student reestablishes eligibility before that period begins. (i) If a classroom teacher whose child receives an exemption earned by the teacher under this section does not remain employed as required by Subsection (d), the student may not receive an exemption for a subsequent academic period of the same academic year under this section until the next academic period that begins after the classroom teacher reestablishes eligibility under Subsection (d). (j) An institution of higher education may require an undergraduate student to pay prorated tuition or required fees, as applicable, for an academic period if the student's eligibility for the exemption under Subsection (e) or the teacher's eligibility for the exemption under Subsection (d) is lost during that period. (k) An undergraduate student is not eligible to receive an exemption under this section if the person: (1) subject to Subsection (l), has previously received an exemption under this section for four academic years at any institution or institutions of higher education; or (2) has received a baccalaureate degree. (l) An undergraduate student who, for any reason other than a loss of relevant eligibility of the student or the classroom teacher, fails to use an exemption from the payment of tuition or an exemption from the payment of required fees in one or more academic periods in the academic year for which the student is designated to receive the exemption may carry forward and use that exemption in an academic period of substantially similar length in a subsequent academic year. The student may use only one exemption for each academic period under this subsection unless the use of more than one exemption is permitted under Subsection (g). (m) The Texas Higher Education Coordinating Board shall adopt: (1) rules prescribing procedures by which a classroom teacher may designate a child to receive an exemption under this section, including rules relating to the determination of a student's eligibility for an exemption or a classroom teacher's eligibility to designate a child to receive an exemption; (2) rules to allow an otherwise eligible student to receive an exemption under this section if the student is unable to satisfy the grade point average requirement of Subsection (e) solely as a result of a hardship or other good cause; and (3) a uniform application form for an exemption under this section. (n) The legislature shall account in the General Appropriations Act for the exemptions authorized by this section in a manner that provides a corresponding increase in the general revenue funds appropriated to the institution granting an exemption. (o) Notwithstanding any other provision of this section, only the following undergraduate students who meet the eligibility requirements of Subsection (e) are eligible to receive an exemption under this section: (1) in the 2006-2007 academic year, a student who has completed less than 30 semester credit hours at any institution of higher education; (2) in the 2007-2008 academic year, a student who has completed less than 60 semester credit hours at any institution of higher education; and (3) in the 2008-2009 academic year, a student who has completed less than 90 semester credit hours at any institution of higher education. (p) This subsection and Subsection (o) expire September 1, 2009. SECTION 2A.17. Subsection (e), Section 11.201, Education Code, as added by this Act, applies only to a contract between a superintendent of a school district and a business entity that is entered into on or after September 1, 2005. A contract between a superintendent of a school district and a business entity that is entered into before September 1, 2005, is governed by the law in effect on the date the contract is entered into, and the former law is continued in effect for that purpose. SECTION 2A.18. (a) As soon as possible after September 1, 2005, the State Board for Educator Certification shall review the rules adopted under Section 21.044, Education Code, relating to educator training requirements and revise those rules as necessary to ensure that the training requirements are sufficient to produce educators capable of: (1) satisfying the increased standards for highly qualified educators prescribed by the No Child Left Behind Act of 2001 (Pub. L. No. 107-110); (2) complying with certification standards in this state; and (3) teaching students in a manner that results in the highest level of student performance. (b) In conducting the review required by Subsection (a) of this section, the State Board for Educator Certification shall give specific attention to the degree to which educator training requirements prepare educators to serve students of limited English proficiency and students with learning disabilities. SECTION 2A.19. Sections 21.104, 21.251, 21.301, and 21.303, Education Code, as amended by this Act, and Sections 21.1041 and 21.2111, Education Code, as added by this Act, apply only to a discharge under a probationary or term contract for which written notice of the proposed discharge is given to a teacher on or after September 1, 2005. A discharge under a probationary or term contract for which written notice of the proposed discharge is given to a teacher before September 1, 2005, is governed by the law in effect when the notice is given, and the former law is continued in effect for that purpose. SECTION 2A.20. Subsection (a-1), Section 21.402, Education Code, as added by this Act, does not apply to the salary of an educator employed under a contract entered into before the effective date of this Act. SECTION 2A.21. Subsection (a-2), Section 21.402, Education Code, as added by this Act, does not apply to the salary of an educator employed under a contract entered into before the effective date of this Act. SECTION 2A.22. The Texas Higher Education Coordinating Board shall adopt rules and forms for the administration of Section 54.220, Education Code, as added by this Act, not later than January 1, 2006.
PART B. ADMINISTRATIVE EFFICIENCY
SECTION 2B.01. Subchapter A, Chapter 7, Education Code, is amended by adding Section 7.008 to read as follows: Sec. 7.008. ELECTRONIC STUDENT RECORDS SYSTEM. (a) In this section, "institution of higher education" has the meaning assigned by Section 61.003. (b) Each school district, open-enrollment charter school, and institution of higher education shall participate in an electronic student records system that satisfies standards approved by the commissioner of education and the commissioner of higher education. (c) The electronic student records system must permit an authorized state, district, or school official or an authorized representative of an institution of higher education to electronically transfer and retrieve student information generally found in student transcripts, including information concerning a student's course or grade completion and assessment instrument results, to and from an educational institution in which the student is enrolled. (d) The commissioner of education or the commissioner of higher education may solicit and accept grant funds to maintain the electronic student records system and to make the system available to school districts, open-enrollment charter schools, and institutions of higher education. (e) A private or independent institution of higher education, as defined by Section 61.003, may participate in the electronic student records system under this section. If a private or independent institution of higher education elects to participate, the institution must provide the funding to participate in the system. (f) Any person involved in the transfer and retrieval of student information under this section is subject to any state or federal law governing the release of or providing access to any confidential information to the same extent as the educational institution from which the data is collected. A person may not release or distribute the data to any other person in a form that contains confidential information. (g) The electronic student records system shall be implemented not later than the beginning of the 2006-2007 school year. This subsection expires September 1, 2007. SECTION 2B.02. Subchapter A, Chapter 7, Education Code, is amended by adding Section 7.011 to read as follows: Sec. 7.011. STATEWIDE FUNDS MANAGEMENT INFORMATION SYSTEM FOR AT-RISK STUDENT SERVICES. (a) In this section, "student at risk of dropping out of school" has the meaning described by Section 29.081. (b) The agency shall develop a management information system for funds awarded and allocated to school districts and open-enrollment charter schools for the purpose of providing services to students at risk of dropping out of school. (c) The funds management information system must produce complete, accurate, and timely reports for agency officials and policy makers. The reports must provide information on funding for services for students at risk of dropping out of school, statewide and aggregated by school district, including the following information: (1) the amount of an award; (2) the beginning and ending period of a grant or award; (3) expenditures related to an award; and (4) any amount of an award that was not distributed because of a school district's failure to use awarded funds to provide needed services during the funding period. (d) The commissioner shall adopt rules as necessary to administer this section. The rules adopted under this subsection must ensure that: (1) the funds management information system includes: (A) the information described by Subsection (c) for all funding sources for services described by Section 29.092 for students at risk of dropping out of school, excluding funding information relating to a compensatory, intensive, or accelerated instruction program under Section 29.081, a disciplinary alternative education program established under Section 37.008, or a program eligible under Title I of the Elementary and Secondary Education Act of 1965, as provided by Pub. L. No. 103-382; and (B) all state funds and federal pass-through funds targeting students at risk of dropping out of school; (2) the system is compatible with and is regularly reconciled with the agency's central accounting system; and (3) aggregate funding information is readily available to agency personnel and policy makers, including aggregate funding information relating to a compensatory, intensive, or accelerated instruction program under Section 29.081, a disciplinary alternative education program established under Section 37.008, or a program eligible under Title I of the Elementary and Secondary Education Act of 1965, as provided by Pub. L. No. 103-382. SECTION 2B.03. Subchapter B, Chapter 7, Education Code, is amended by adding Section 7.033 to read as follows: Sec. 7.033. QUALITY MANAGEMENT CERTIFICATION PROGRAM. (a) The commissioner by rule shall adopt a quality management certification program to encourage school districts and open-enrollment charter schools to obtain International Organization for Standardization ISO 9000 quality management certification. (b) The commissioner by rule shall identify areas of compliance in which the quality management certification program would enhance performance, including: (1) compliance with federal law and regulations; (2) financial accountability, including compliance with grant requirements; and (3) data integrity for purposes of: (A) the Public Education Information Management System (PEIMS); and (B) accountability under Chapter 39. (c) For each school district or open-enrollment charter school that obtains International Organization for Standardization ISO 9000 series quality management program certification, the commissioner by rule shall require specific performance measures that relate to improvement in: (1) student performance; (2) administrative efficiency; (3) business processes; and (4) integration and use of educational technology. (d) For purposes of compliance monitoring, discretionary grant administration, and reporting to the Public Education Information Management System (PEIMS) and under the Education Flexibility Partnership Act of 1999 (20 U.S.C. Section 5891a et seq.), the commissioner by rule shall develop a method for recognizing a school district or open-enrollment charter school that receives and maintains International Organization for Standardization ISO 9000 quality management certification. SECTION 2B.04. Subchapter A, Chapter 11, Education Code, is amended by adding Section 11.003 to read as follows: Sec. 11.003. ADMINISTRATIVE EFFICIENCY. (a) Not later than December 1, 2005, the commissioner shall evaluate the feasibility of including a uniform indicator under Section 39.202(b) that measures effective administrative management through the use of cooperative shared service arrangements. If the commissioner determines that the adoption of a uniform indicator described by this subsection is feasible, the commissioner by rule shall include the indicator in the financial accountability rating system under Subchapter I, Chapter 39, for school districts beginning with the 2006-2007 school year. This subsection expires September 1, 2007. (b) Each regional education service center shall: (1) notify each school district served by the center regarding the opportunities available through the center for cooperative shared service arrangements within the center's service area; and (2) evaluate the need for cooperative shared service arrangements within the center's service area and consider expanding center-sponsored cooperative shared service arrangements. (c) Each regional education service center shall assist a school district board of trustees in entering into an agreement with another district or political subdivision, a regional education service center, or an institution of higher education as defined by Section 61.003, for a cooperative shared service arrangement regarding administrative services, including transportation, food service, purchasing, and payroll functions. (d) The commissioner may require a district or an open-enrollment charter school to enter into an agreement for a cooperative shared service arrangement if the commissioner determines that the financial management performance of the district or school is unsatisfactory. SECTION 2B.05. Subchapter D, Chapter 11, Education Code, is amended by adding Section 11.169 to read as follows: Sec. 11.169. CERTIFICATION FOR QUALITY MANAGEMENT STANDARDS. Each school district may apply for International Organization for Standardization ISO 9000 certification for quality management standards and apply for renewal of that certification, as applicable. SECTION 2B.06. Subchapter A, Chapter 28, Education Code, is amended by adding Section 28.0022 to read as follows: Sec. 28.0022. CURRICULUM MANAGEMENT ASSISTANCE. (a) The commissioner shall identify available curriculum management materials recommended by school districts that may be used to assist school districts in: (1) understanding the depth and complexity of the essential knowledge and skills identified under Section 28.002(c) for each subject in the foundation curriculum under Section 28.002(a)(1); and (2) based on learning standards: (A) developing model instructional plans and diagnostic tools; (B) aligning curriculum objectives to district instructional resources; and (C) differentiating instruction in recognition of the needs of individual students. (b) Unless otherwise prohibited by law, the commissioner may use federal funds to implement this section. (c) Not later than January 1, 2007, the commissioner shall prepare and submit to the legislature a report that describes in detail: (1) the curriculum management materials identified under Subsection (a); (2) the costs associated with making the materials available to school districts; and (3) the manner in which technological applications may be used to make the materials available and allow school districts to use the materials. (d) Subsection (c) and this subsection expire January 31, 2007. SECTION 2B.07. Subchapter C, Chapter 29, Education Code, is amended by adding Sections 29.092, 29.093, and 29.094 to read as follows: Sec. 29.092. CONSOLIDATED FUNDING FOR PROGRAMS AND SERVICES FOR STUDENTS AT RISK OF DROPPING OUT OF SCHOOL. (a) In this section, "student at risk of dropping out of school" has the meaning described by Section 29.081. (b) To enable school districts and open-enrollment charter schools to provide supplemental programs and services for the benefit of students at risk of dropping out of school, the commissioner each school year shall award funds to a school district or open-enrollment charter school in accordance with a streamlined and simplified grant process developed by the commissioner. To the extent practicable, the grant process developed by the commissioner under this subsection must comply with Subchapter E, Chapter 7. (c) The commissioner shall consolidate funding from the following currently funded programs and types of services, excluding early childhood care and education programs and accelerated reading or mathematics initiatives under Section 28.006, 28.007, or 28.0211: (1) an optional extended year program under Section 29.082; (2) a basic skills program for high school students under Section 29.086; (3) a summer school program of instruction for students of limited English proficiency; and (4) a grant for pregnancy-related services, including a pregnancy, education, and parenting program. (d) The commissioner may redistribute the funding of programs described under Subsection (c) as necessary to accomplish the purpose of improving the achievement of students at risk of dropping out of school. (e) A school district or open-enrollment charter school that receives an award of funds under this section may use the funds to provide academic and support services to students at risk of dropping out of school, including: (1) services designed to provide intensive academic instruction to increase student success and high school completion; (2) services designed to provide intensive academic instruction for and reduce the dropout rate of students at risk of dropping out of school; (3) after-school academic and support services; (4) intensive instruction for preschool and school-age students of limited English proficiency; (5) any academic or support services for pregnant or parenting students, including basic instruction and health and life skills training and support for pregnant or parenting students; (6) community-based services designed to address the needs of students at risk of dropping out of school; (7) programs or services designed to promote the involvement of parents of students at risk of dropping out of school; and (8) services or programs promoting school and community collaboration to restructure schools for the successful achievement of all students, especially students at risk of dropping out of school. (f) The agency shall make available research-based guidance to districts and open-enrollment charter schools to enable successful implementation of the academic and support services described by Subsection (e) that assist students at risk of dropping out of school to succeed in school. (g) Not later than November 1 of each year, a school district or open-enrollment charter school may submit an application for funding for programs or services under this section. The school district or open-enrollment charter school must include an assessment of needs for students at risk of dropping out of school, a comprehensive plan for providing services for those students based on the agency's research-based implementation guidance provided under Subsection (f), and a report of all sources of funding for providing services for those students. The commissioner shall distribute an award of funds in the form of a block grant not later than March 15 of each year. Sec. 29.093. COST-OUTCOME ANALYSIS. (a) The agency and the Legislative Budget Board shall jointly develop a request for proposals for a qualified third party to conduct a comprehensive cost-outcome analysis of federal and state funding for programs targeting students at risk of dropping out of school, as described by Section 29.081, and the impact of those programs on student achievement outcomes. In order to be qualified under this section, a party must at a minimum have experience in educational program evaluation and statistical analysis of public education data. (b) The cost-outcome methodology developed by the contractor under this section is subject to joint review and approval by the agency and the Legislative Budget Board. The cost-outcome analysis at a minimum must consist of the following components: (1) a methodology for assessing the cost-effectiveness of individual school districts and open-enrollment charter schools in providing services to students at risk of dropping out of school; (2) performance measures that can be used to assess the effectiveness of school districts and open-enrollment charter schools in administering academic and social service programs for students at risk of dropping out of school; (3) a methodology for evaluating best practices in providing effective services for students at risk of dropping out of school; (4) a statistical methodology for: (A) controlling for differences among individual school districts and open-enrollment charter schools that are not related to funding streams included in the cost-outcome analysis; and (B) disaggregating data by peer groups; (5) a methodology for computing the relative impact of funding sources on student achievement outcomes; and (6) a methodology for reporting disaggregated results for students at risk of dropping out of school. (c) The agency and the Legislative Budget Board shall: (1) not later than December 1 of each year: (A) report findings from the cost-outcome analysis to the lieutenant governor, the speaker of the house of representatives, and the presiding officer of the standing committee of each house of the legislature with primary jurisdiction over public education, including data related to the feasibility of constructing a cost-effectiveness measure for school districts and open-enrollment charter schools; (B) make recommendations for the potential use of the data, including the best methods to disseminate the information to parents and school districts and open-enrollment charter schools; and (C) make the report and recommendations described by Paragraphs (A) and (B) available to the public; and (2) during the 2006-2007 school year, develop a plan to implement the cost-outcome methodology to assess the effectiveness of school districts and open-enrollment charter schools in providing services during the 2007-2008 school year to students at risk of dropping out of school. (d) During the state fiscal biennium beginning September 1, 2005, the commissioner shall retain an amount not to exceed $500,000 from the total amount of funds allotted under the Foundation School Program to finance the comprehensive cost-outcome analysis and shall reduce the total amount of state funds allocated to each district from any source in the same manner described for a reduction in allotments under Section 42.253. (e) This section expires September 1, 2010. Sec. 29.094. TEMPORARY PROVISION: COMMISSIONER'S COST-OUTCOME ANALYSIS. (a) The commissioner shall adopt a cost-outcome analysis methodology for use in assessing the effectiveness of school districts and open-enrollment charter schools in providing services for students at risk of dropping out of school, as described by Section 29.081. The commissioner shall use the adopted methodology until the commissioner determines that an alternate methodology approved by the agency and the Legislative Budget Board under Section 29.093(b) more accurately portrays the cost-effectiveness of the analyzed services. (b) The methodology adopted by the commissioner must include the following components: (1) a composite performance measure that combines key indicators of student performance, disaggregated for students at risk of dropping out of school; (2) a format for reporting all state, federal, local, and private sources of funding and total expenditures for supplemental services for students at risk of dropping out of school, reported by school district, by open-enrollment charter school, and statewide; and (3) a system for scoring and ranking school districts and open-enrollment charter schools, including criteria for establishing school district and open-enrollment charter school peer groups for comparison purposes. (c) Based on the cost-outcome analysis methodology, the commissioner shall use the ranking system under Subsection (b)(3) to determine annually the level at which school districts and open-enrollment charter schools are cost-effective in serving students at risk of dropping out of school. (d) Not later than December 1 of each year, the commissioner shall: (1) report the methodology and the results of the cost-outcome analysis to the lieutenant governor, the speaker of the house of representatives, and the presiding officer of the standing committee of each house of the legislature with primary jurisdiction over public education; and (2) make the report under Subdivision (1) available to the public. (e) This section expires on the earlier of the approval of a cost-outcome methodology by the agency and the Legislative Budget Board under Section 29.093(b) or September 1, 2010. SECTION 2B.08. Subchapter A, Chapter 44, Education Code, is amended by adding Section 44.011 to read as follows: Sec. 44.011. EXPENDITURES FOR DIRECT INSTRUCTIONAL ACTIVITIES. (a) A school district shall allocate at least 65 percent of the district's total revenue to fund direct instructional activities in the district. (a-1) Subsection (a) applies beginning with the 2009-2010 school year. For the 2006-2007, 2007-2008, and 2008-2009 school years, a school district shall allocate the following percentages of the district's total revenue to fund direct instructional activities in the district: (1) for the 2006-2007 school year, at least 50 percent; (2) for the 2007-2008 school year, at least 55 percent; and (3) for the 2008-2009 school year, at least 60 percent. (a-2) Subsection (a-1) and this subsection expire August 1, 2009. (b) For purposes of this section, expenditures for direct instructional activities: (1) include expenditures directly related to classroom instruction for courses in the foundation curriculum described by Section 28.002(a)(1) and subject to assessment under Subchapter B, Chapter 39; and (2) do not include expenditures directly related to programs and services that are provided at the district's discretion. (c) The commissioner may adopt rules for purposes of this section in a manner consistent with Subsection (b) and Section 44.0071. SECTION 2B.09. Not later than January 1, 2007, the Texas Education Agency shall adopt a five-year plan to renovate the Public Education Information Management System (PEIMS) to provide for efficient and effective information storage and retrieval for the purposes of allocating scarce school resources. The renovation must include a redesign of the records layout.
PART C. ACCOUNTABILITY
SECTION 2C.01. Subchapter A, Chapter 7, Education Code, is amended by adding Section 7.007 to read as follows: Sec. 7.007. PUBLIC ACCESS TO PEIMS DATA. (a) The commissioner by rule shall adopt procedures to make available, through the agency Internet website, all financial information provided by school districts and campuses through the Public Education Information Management System (PEIMS), including campus-level expenditure information. (b) In adopting rules under this section, the commissioner shall provide a summarized format for reporting financial information on the agency Internet website. SECTION 2C.02. Subsection (j), Section 28.006, Education Code, is amended to read as follows: (j) No more than 15 percent of the funds certified by the commissioner under Subsection (i) may be spent on indirect costs. The commissioner shall evaluate the programs that fail to meet the standard of performance under Section 39.051(b)(10) [39.051(b)(7)] and may implement sanctions under Subchapter G, Chapter 39. The commissioner may audit the expenditures of funds appropriated for purposes of this section. The use of the funds appropriated for purposes of this section shall be verified as part of the district audit under Section 44.008. SECTION 2C.03. Effective September 1, 2006, Subchapter B, Chapter 28, Education Code, is amended by adding Section 28.027 to read as follows: Sec. 28.027. FUNDING FOR COLLEGE ENTRANCE ASSESSMENTS. (a) The agency shall pay for any student who chooses to take, on one occasion, an assessment instrument that is currently accepted by colleges and universities for use in determining admissions. The agency shall reduce the amount the agency pays for a student to take the assessment instrument by the amount of any discount or fee waiver offered by the vendor of the assessment instrument to which the student is entitled. The agency shall pay the fee for the administration of the assessment instrument directly to the vendor of the assessment instrument: (1) from funds appropriated for the purpose; or (2) if funds are not appropriated for the purpose, from funds allotted under the Foundation School Program, and the commissioner shall reduce the total amount of state funds allocated to each district from any source in the same manner described for a reduction in allotments under Section 42.253. (b) The agency shall ensure that vendors are not paid under Subsection (a) for the administration of an assessment instrument to a student to whom the assessment instrument is not actually administered. The agency may comply with this subsection by any reasonable means, including by creating a refund system under which a vendor returns any payment made for a student who registered for the administration of an assessment instrument but did not appear for the administration. (c) The agency shall select and approve vendors of the specific assessment instruments for which funding is provided under this section. (d) The agency shall compile the results of any assessment instrument for which funding is provided under this section and make the results available to the public in a manner that does not identify individual students. SECTION 2C.04. Subsections (b) and (d), Section 29.053, Education Code, are amended to read as follows: (b) Within the first five [four] weeks following the first day of school, the language proficiency assessment committee established under Section 29.063 shall determine and report to the board of trustees of the district the number of students of limited English proficiency on each campus and shall classify each student according to the language in which the student possesses primary proficiency. The board shall report that information to the agency before November 1 each year. (d) Each district that is required to offer bilingual education and special language programs under this section shall offer the following for students of limited English proficiency: (1) bilingual education in prekindergarten at campuses that offer prekindergarten classes; (2) bilingual education in kindergarten through the elementary grades; (3) [(2)] bilingual education, instruction in English as a second language, or other transitional language instruction approved by the agency in post-elementary grades through grade 8; and (4) [(3)] instruction in English as a second language in grades 9 through 12. SECTION 2C.05. Section 29.056, Education Code, is amended by amending Subsections (a), (d), and (g) and adding Subsections (g-1) and (i) to read as follows: (a) The agency shall establish standardized criteria for the identification, assessment, and classification of students of limited English proficiency eligible for entry into the program or exit from the program. The student's parent must approve a student's entry into the program[, exit from the program,] or placement in the program. A school district must inform a student's parent of a student's exit from the program. The school district or parent may appeal the decision under Section 29.064. The criteria for identification, assessment, and classification may include: (1) results of a home language survey conducted within four weeks of each student's enrollment to determine the language normally used in the home and the language normally used by the student, conducted in English and the home language, signed by the student's parents if the student is in kindergarten through grade 8 or by the student if the student is in grades 9 through 12, and kept in the student's permanent folder by the language proficiency assessment committee; (2) the results of an agency-approved English language proficiency test administered to all students identified through the home survey as normally speaking a language other than English to determine the level of English language proficiency, with students in kindergarten or grade 1 being administered an oral English proficiency test and students in grades 2 through 12 being administered an oral English proficiency test and, if the oral English proficiency test demonstrates proficiency, a written English proficiency test; and (3) the results of an agency-approved proficiency test in the primary language administered to all students identified under Subdivision (2) as being of limited English proficiency to determine the level of primary language proficiency, with students in kindergarten or grade 1 being administered an oral primary language proficiency test and students in grades 2 through 12 being administered an oral and written primary language proficiency test. (d) Not later than the 20th [10th] day after the date of the student's classification as a student of limited English proficiency, the language proficiency assessment committee shall give written notice of the classification to the student's parent. The notice must be in English and the parent's primary language. The parents of students eligible to participate in the required bilingual education program shall be informed of the benefits of the bilingual education or special language program and that it is an integral part of the school program. (g) A district may transfer a student of limited English proficiency out of a bilingual education or special language program if the student is able to participate equally in a regular all-English instructional program as determined by: (1) agency-approved tests administered at the end of each school year to determine the extent to which the student has developed oral and written language proficiency and specific language skills in [both the student's primary language and] English; (2) an achievement score at or above the 40th percentile in the reading and language arts sections of an English standardized test approved by the agency; or [and] (3) agency-approved [other indications of a student's overall progress, including] criterion-referenced tests and the results of a [test scores,] subjective teacher evaluation[, and parental evaluation]. (g-1) A school district may transfer a student of limited English proficiency who is eligible for special education services under Subchapter A out of a bilingual education or special language program and into a special education program if the language proficiency assessment committee and the student's admission, review, and dismissal committee agree that the student has a learning disability and would be better served in a special education program. The student's admission, review, and dismissal committee must document that the student has a learning disability that cannot be addressed effectively in a bilingual education or special language program and that the student's learning disability is not due to the student's limited English proficiency. The commissioner by rule shall adopt criteria for a school district to use in transferring a student under this subsection. (i) On approval of the student's parent, a school district may allow a student of limited English proficiency who meets the criteria for being transferred out of a bilingual education or special language program to continue participating in the program. SECTION 2C.06. Subchapter B, Chapter 29, Education Code, is amended by adding Section 29.0561 to read as follows: Sec. 29.0561. EVALUATION OF TRANSFERRED STUDENTS; REENROLLMENT. (a) The language proficiency assessment committee shall reevaluate a student who is transferred out of a bilingual education or special language program under Section 29.056(g) if the student earns a failing grade in a subject in the foundation curriculum under Section 28.002(a)(1) during any grading period in the first two school years after the student is transferred to determine whether the student should be reenrolled in a bilingual education or special language program. (b) During the first two school years after a student is transferred out of a bilingual education or special language program under Section 29.056(g), the language proficiency assessment committee shall review the student's performance and consider: (1) the total amount of time the student was enrolled in a bilingual education or special language program; (2) the student's grades each grading period in each subject in the foundation curriculum under Section 28.002(a)(1); (3) the student's performance on each assessment instrument administered under Section 39.023(a) or (c); (4) the number of credits the student has earned toward high school graduation, if applicable; and (5) any disciplinary actions taken against the student under Subchapter A, Chapter 37. (c) After an evaluation under this section, the language proficiency assessment committee may require intensive instruction for the student or reenroll the student in a bilingual education or special language program. SECTION 2C.07. Subchapter C, Chapter 29, Education Code, is amended by adding Section 29.0822 to read as follows: Sec. 29.0822. OPTIONAL FLEXIBLE SCHOOL DAY PROGRAM. (a) Notwithstanding Section 25.081 or 25.082, a school district may provide a flexible school day program for students in grades 9 through 12 who have dropped out of school or who are at risk of dropping out of school. (b) To enable a school district to provide a program under this section that meets the needs of students described by Subsection (a), a school district may: (1) provide flexibility in the number of hours each day a student attends; (2) provide flexibility in the number of days each week a student attends; or (3) allow a student to enroll in less or more than a full course load. (c) A course offered in a program under this section must provide for at least the same number of instructional hours as required for a course offered in a program that meets the required minimum number of instructional days under Section 25.081 and the required length of school day under Section 25.082. (d) The commissioner shall compute average daily attendance for students served under this section for purposes of determining state funding. In computing average daily attendance for purposes of this section, a student may accumulate hours of instruction. Funding under this subsection is determined based on the number of instructional days provided in the district calendar and a seven-hour school day. Hours of attendance under this subsection may be accumulated over the school year, including any summer or vacation sessions, to determine average daily attendance. The attendance of a student who accumulates less than the number of attendance hours required under this subsection shall be proportionately reduced for funding purposes. The commissioner may set a maximum funding amount for an individual course under this section. (e) The commissioner may adopt rules for the administration of this section. SECTION 2C.08. Effective September 1, 2006, Subchapter D, Chapter 29, Education Code, is amended by adding Section 29.124 to read as follows: Sec. 29.124. PERFORMANCE STANDARDS; STATE FUNDING. (a) The commissioner shall adopt the performance standards developed by the agency under the pilot project required by Rider 52, page III-17, Chapter 1330, Acts of the 78th Legislature, Regular Session, 2003 (the General Appropriations Act), for assessing the performance in English language arts, mathematics, science, and social studies of students in a program for gifted and talented students. The commissioner may adopt performance standards for assessing the performance in other subjects or at other grade levels of students in a program for gifted and talented students. The commissioner shall establish the minimum level of student performance necessary to comply with the performance standards and may periodically raise the minimum level as the commissioner determines necessary. (b) A school district is not required to use the performance standards adopted under Subsection (a). (c) From funds appropriated for that purpose, for each student who meets the minimum level of performance on the performance standards adopted under Subsection (a), a school district is entitled to $100. A school district must use funds received under this subsection in providing a program for gifted and talented students under this subchapter. The amount appropriated for any fiscal year for purposes of this subsection may not exceed $6 million. (d) The commissioner may adopt rules necessary to administer this section. (e) From the funds appropriated under this section, the commissioner may designate an amount necessary to fund the agency's administrative costs of implementing this section. SECTION 2C.09. Subchapter Z, Chapter 29, Education Code, is amended by adding Section 29.913 to read as follows: Sec. 29.913. "EDUCATION. GO GET IT" WEEK. (a) To educate middle school, junior high school, and high school students about the importance of higher education, each school district and each open-enrollment charter school offering those grades shall designate one week during the school year as "Education. Go Get It" Week. (b) During the designated week, each middle school, junior high school, and high school shall provide students with comprehensive grade-appropriate information regarding the pursuit of higher education. The information provided must include information regarding: (1) higher education options available to students; (2) standard admission requirements for institutions of higher education, including: (A) overall high school grade point average; (B) required curriculum; and (C) scores necessary on generally recognized tests or assessments used in admissions determinations, including the Scholastic Assessment Test and the American College Test; (3) automatic admission of certain students to general academic teaching institutions as provided by Section 51.803; and (4) financial aid availability and requirements, including the financial aid information provided by counselors under Section 33.007(b). (c) In addition to the information provided under Subsection (b), each middle school, junior high school, and high school shall provide to the students during the designated week at least one public speaker to promote the importance of higher education. SECTION 2C.10. Section 37.008, Education Code, is amended by adding Subsection (n) to read as follows: (n) For purposes of accountability under Chapter 39, a student placed in a disciplinary alternative education program is reported as if the student were enrolled at the student's assigned campus in the student's regularly assigned education program, including a special education program. SECTION 2C.11. Section 39.022, Education Code, is amended to read as follows: Sec. 39.022. ASSESSMENT PROGRAM. (a) The State Board of Education by rule shall create and implement a statewide assessment program that is knowledge- and skills-based to ensure school accountability for student achievement that achieves the goals provided under Section 4.002. After adopting rules under this section, the State Board of Education shall consider the importance of maintaining stability in the statewide assessment program when adopting any subsequent modification of the rules. (b) The commissioner by rule shall provide for the administration of assessment instruments under this subchapter. SECTION 2C.12. Section 39.023, Education Code, is amended by amending Subsections (a) through (e), (i), (j), (l), (m), and (n) and adding Subsections (a-1) and (b-1) to read as follows: (a) The agency shall adopt or develop appropriate criterion-referenced assessment instruments designed to assess essential knowledge and skills in reading, writing, mathematics, social studies, and science. Except as otherwise provided by this subchapter, all [All] students[, except students assessed under Subsection (b) or (l) or exempted under Section 39.027,] shall be assessed in: (1) mathematics, annually in grades three through seven without the aid of technology and in grades eight through 11 with the aid of technology on any assessment instruments that include algebra; (2) reading, annually in grades three through nine; (3) writing, including spelling and grammar, in grades four and seven; (4) English language arts, in grades [grade] 10 and 11; (5) social studies, in grades eight, [and] 10, and 11; (6) science, in grades five, eight, [and] 10, and 11; and (7) any other subject and grade required by federal law. (a-1) An assessment instrument under this section may include questions that test a broader range of knowledge and skills or that are at a higher difficulty level for the purpose of differentiating student achievement. A student may not be required to answer a question described by this subsection correctly to perform satisfactorily on the assessment instrument or to be promoted to the next grade level. To ensure a valid bank of questions for use each year, the agency is not required to release a question that is developed for purposes of this subsection until after the fifth school year the question is used on an assessment instrument administered under this section. (b) The agency shall develop or adopt appropriate criterion-referenced assessment instruments to be administered to each student in a special education program under Subchapter A, Chapter 29, who receives modified instruction in the essential knowledge and skills identified under Section 28.002 for the assessed subject but for whom an assessment instrument adopted under Subsection (a), even with allowable accommodations [modifications], would not provide an appropriate measure of student achievement, as determined by the student's admission, review, and dismissal committee. The assessment instruments required under this subsection must assess essential knowledge and skills [and growth] in the subjects of reading, mathematics, and writing and any other subject required by federal law. A student's admission, review, and dismissal committee shall determine whether any allowable accommodation [modification] is necessary in administering to the student an assessment instrument required under this subsection or whether an alternate assessment instrument must be used to measure alternate academic achievement standards. A student's admission, review, and dismissal committee shall determine the high school graduation assessment requirements for a student in a special education program under Subchapter A, Chapter 29, and may use local alternative assessment instruments if multiple testing opportunities are not available for a student. To the extent practicable, the [The] assessment instruments required under this subsection shall be administered on the same schedule as the assessment instruments administered under Subsection (a). The commissioner shall adopt rules to implement this subsection. (b-1) The agency shall adopt or develop appropriate criterion-referenced instruments as required by federal law designed to measure alternate academic achievement standards for students in a special education program under Subchapter A, Chapter 29, with the most significant cognitive disabilities. (c) The [agency shall also adopt] secondary exit-level assessment instruments designed to be administered to students in grade 11 under Subsection (a) must [to] assess essential knowledge and skills in mathematics, English language arts, social studies, and science. The mathematics section must include at least Algebra I and geometry with the aid of technology. The English language arts section must include at least English III and must include the assessment of essential knowledge and skills in writing. The social studies section must include early American and United States history. The science section must include at least biology and integrated chemistry and physics. The assessment instruments must be designed to assess a student's mastery of minimum skills necessary for high school graduation and readiness to enroll in an institution of higher education. [If a student is in a special education program under Subchapter A, Chapter 29, the student's admission, review, and dismissal committee shall determine whether any allowable modification is necessary in administering to the student an assessment instrument required under this subsection or whether the student should be exempted under Section 39.027(a)(2). The State Board of Education shall administer the assessment instruments. The State Board of Education shall adopt a schedule for the administration of secondary exit-level assessment instruments.] Each student who did not perform satisfactorily on any secondary exit-level assessment instrument when initially tested shall be given multiple opportunities to retake that assessment instrument. A student who performs at or above a level established by the Texas Higher Education Coordinating Board on the secondary exit-level assessment instruments is exempt from the requirements of Section 51.306. (d) The commissioner may participate in multistate efforts to develop voluntary standardized end-of-course assessment instruments. The commissioner by rule may require a school district to administer an end-of-course assessment instrument developed through the multistate efforts. The admission, review, and dismissal committee of a student in a special education program under Subchapter A, Chapter 29, shall determine whether any allowable accommodation [modification] is necessary in administering to the student an end-of-course assessment instrument or whether the student should be exempted [under Section 39.027(a)(2)]. (e) Under rules adopted by the State Board of Education, [every other year,] the agency shall release the questions and answer keys to each assessment instrument administered under Subsection (a), (b), (c), (d), or (l) or Section 39.027 on or after August 1 after the second anniversary of the date [after the last time] the instrument was [is] administered [for that school year]. To ensure a valid bank of questions for use each year, the agency is not required to release a question that is being field-tested and was not used to compute the student's score on the instrument. The agency shall also release, under board rule, each question that is no longer being field-tested and that was not used to compute a student's score. (i) The provisions of this section, except Subsection (d), are subject to modification by rules adopted under Section 39.022. Each assessment instrument adopted or developed under this section [those rules and each assessment instrument required under Subsection (d)] must be reliable and valid and must meet any applicable federal requirements for measurement of student progress. (j) The commissioner shall develop a standardized end-of-course assessment instrument for Algebra I. The commissioner by rule may require a school district to administer an end-of-course assessment instrument in Algebra I. The admission, review, and dismissal committee of a student in a special education program under Subchapter A, Chapter 29, shall determine whether any allowable accommodation [modification] is necessary in administering to the student an end-of-course assessment instrument or whether the student should be exempted [under Section 39.027(a)(2)]. (l) The agency [State Board of Education] shall adopt or develop a Spanish version [rules for the administration] of the assessment instruments adopted under Subsection (a) for [in Spanish to] students in grades three through six who are of limited English proficiency, as defined by Section 29.052, whose primary language is Spanish, and who are not otherwise exempt from the administration of an assessment instrument under Section 39.027 [39.027(a)(3) or (4)]. Each student of limited English proficiency whose primary language is Spanish, other than a student to whom Subsection (b) or (b-1) applies, may be assessed using assessment instruments in Spanish under this subsection for up to three years or assessment instruments in English under Subsection (a). The language proficiency assessment committee established under Section 29.063 shall determine which students are administered assessment instruments in Spanish under this subsection. (m) The commissioner by rule shall develop procedures under which the language proficiency assessment committee established under Section 29.063 shall determine which students in grades three through 10 are exempt from the administration of the assessment instruments under Section 39.027 [39.027(a)(3) and (4)]. The rules adopted under this subsection shall ensure that the language proficiency assessment committee provides that the exempted students are administered the assessment instruments under Subsections (a) and (c) at the earliest practical date. As necessary to comply with federal requirements, the commissioner by rule shall develop procedures under which a student who is exempt from the administration of an assessment instrument under Section 39.027 is administered a linguistically accommodated assessment instrument. (n) This subsection applies only to a student who is determined to have dyslexia or a related disorder and who is an individual with a disability under 29 U.S.C. Section 705(20) [and its subsequent amendments]. The agency shall adopt or develop appropriate [criterion-referenced] assessment administration procedures, including accommodations for a [instruments designed to assess the ability of and to be administered to each] student to whom this subsection applies. The [for whom the assessment instruments adopted under Subsection (a), even with allowable modifications, would not provide an appropriate measure of student achievement, as determined by the] committee established by the board of trustees of the district to determine the placement of students with dyslexia or related disorders[. The committee] shall determine whether the [any] allowable accommodations are [modification is] necessary in administering to a student an assessment instrument required under this section [subsection. The assessment instruments required under this subsection shall be administered on the same schedule as the assessment instruments administered under Subsection (a)]. SECTION 2C.13. Subsections (a) and (c), Section 39.024, Education Code, are amended to read as follows: (a) Except as otherwise provided by this subsection, the State Board of Education shall determine the level of performance considered to be satisfactory on the assessment instruments administered under Section 39.023. The commissioner by rule [admission, review, and dismissal committee of a student being assessed under Section 39.023(b)] shall determine the level of performance considered to be satisfactory on the assessment instruments administered under Section 39.023(b) or (b-1) [to that student] in accordance with applicable federal requirements [criteria established by agency rule]. (c) The agency shall develop study guides for the assessment instruments administered under Sections 39.023(a) and (l) [(c)]. To assist parents in providing assistance during the period that school is recessed for summer, each school district shall distribute the study guides to parents of students who do not perform satisfactorily on one or more parts of the [an] assessment instrument [administered under this subchapter]. SECTION 2C.14. Subsection (a), Section 39.025, Education Code, is amended to read as follows: (a) A student may not receive a high school diploma until the student has performed satisfactorily on the secondary exit-level assessment instruments for English language arts, mathematics, social studies, and science administered under Section 39.023(a) [39.023(c)]. This subsection does not require a student to demonstrate readiness to enroll in an institution of higher education. SECTION 2C.15. Effective September 1, 2006, Subchapter B, Chapter 39, Education Code, is amended by adding Section 39.0261 to read as follows: Sec. 39.0261. COLLEGE PREPARATION ASSESSMENTS. (a) In addition to the assessment instruments otherwise authorized or required by this subchapter, a school district may administer to students in any grade an established, valid, reliable, and nationally normed college preparation assessment instrument. (b) The agency shall: (1) select and approve vendors of the specific assessment instruments administered under this section; and (2) subject to the restrictions of Subsection (c), pay all fees associated with the administration of the assessment instrument: (A) from funds appropriated for the purpose; or (B) if funds are not appropriated for the purpose, from funds allotted under the Foundation School Program, and the commissioner shall reduce the total amount of state funds allocated to each district from any source in the same manner described for a reduction in allotments under Section 42.253. (c) The agency may pay only for the administration of the assessment instrument at two different grade levels in each district each year. (d) A vendor that administers an assessment instrument for a district under this section shall report the results of the assessment instrument to the agency. SECTION 2C.16. Subsections (a), (e), and (g), Section 39.027, Education Code, are amended to read as follows: (a) A student in grades three through 10 may be exempted from the administration of an assessment instrument under: (1) [Section 39.023(a) or (b) if the student is eligible for a special education program under Section 29.003 and the student's individualized education program does not include instruction in the essential knowledge and skills under Section 28.002 at any grade level; [(2) Section 39.023(c) or (d) if the student is eligible for a special education program under Section 29.003 and: [(A) the student's individualized education program does not include instruction in the essential knowledge and skills under Section 28.002 at any grade level; or [(B) the assessment instrument, even with allowable modifications, would not provide an appropriate measure of the student's achievement as determined by the student's admission, review, and dismissal committee; [(3)] Section 39.023(a), (b), (b-1), or (l) for a period of up to one year after initial enrollment in a school in the United States if the student is of limited English proficiency, as defined by Section 29.052, and has not demonstrated proficiency in English as determined by the assessment system under Subsection (e); or (2) [(4)] Section 39.023(a), (b), (b-1), or (l) for a period of up to two years in addition to the exemption period authorized by Subdivision (1) [(3)] if the student has received an exemption under Subdivision (1) [(3)] and: (A) is a recent unschooled immigrant; or (B) is in a grade for which no assessment instrument in the primary language of the student is available. (e) As provided by applicable federal requirements, the [The] commissioner shall develop an assessment system that shall be used for evaluating the academic progress toward attaining academic language proficiency in English, including reading proficiency in English, of all students of limited English proficiency, as defined by Section 29.052. A student who has demonstrated the designated level of [is exempt from the administration of an assessment instrument under Subsection (a)(3) or (4) who achieves] reading proficiency in English as determined by the assessment system developed under this subsection is not eligible for an exemption under Subsection (a)(1) or (2). [shall be administered the assessment instruments described by Sections 39.023(a) and (c). The performance under the assessment system developed under this subsection of students to whom Subsection (a)(3) or (4) applies shall be included in the academic excellence indicator system under Section 39.051, the performance report under Section 39.053, and the comprehensive annual report under Section 39.182.] (g) For purposes of this section, "recent unschooled immigrant" means an immigrant who initially enrolled in a school in the United States not more than 12 months before the date of the administration of an assessment instrument under Section 39.023 [39.023(a) or (l)] and who, as a result of inadequate schooling outside of the United States, lacks the necessary foundation in the essential knowledge and skills of the curriculum prescribed under Section 28.002 as determined by the language proficiency assessment committee established under Section 29.063. For purposes of this subsection and to the extent authorized by federal law, a child's prior enrollment in a school in the United States shall be determined on the basis of documents and records required under Section 25.002(a). SECTION 2C.17. Subchapter B, Chapter 39, Education Code, is amended by adding Sections 39.034 and 39.035 to read as follows: Sec. 39.034. MEASURE OF INDIVIDUAL STUDENT GROWTH ON ASSESSMENT INSTRUMENTS. (a) The commissioner shall determine a method by which the agency may measure individual student growth in achievement from one school year to the next on an assessment instrument required under this subchapter. (b) The agency shall report to each school district the comparisons made under Subsection (a). Each school district shall provide the comparisons to each teacher for all students who were: (1) assessed on an assessment instrument; and (2) taught by that teacher in the subject for which the assessment instrument was administered. (c) The school a student attends shall provide a record of the comparison made under this section and provided to the school under Subsection (b) in a written notice to the student's parents. (d) To the extent practicable, the agency shall combine the report of the comparisons required under this section with the report of the student's performance on assessment instruments administered under Section 39.023. (e) The commissioner shall implement this section not later than September 1, 2006. This subsection expires January 1, 2008. Sec. 39.035. CRIMINAL PENALTY RELATED TO ADMINISTRATION OF ASSESSMENT INSTRUMENT. (a) An administrator, teacher, other employee, contractor, or volunteer of a school district or public charter district commits an offense if, for the primary purpose of influencing the results of an assessment instrument administered under this subchapter, the person intentionally: (1) discriminates in school admissions based on a student's academic ability in a manner that is not otherwise permitted by law; (2) refers a student to a special education program under Subchapter A, Chapter 29, or a bilingual or special language program under Subchapter B, Chapter 29, for the purpose of gaining an exemption for the student from the administration of the assessment instrument; (3) requires or encourages a student to be absent from a school campus during the day on which the assessment instrument is administered at the campus; (4) tampers with the assessment instrument or related materials to alter the results of the assessment instrument; or (5) engages in any other action designed to alter the accuracy of the results of the assessment instrument. (b) An offense under this section is a Class A misdemeanor. (c) An offense under Subsection (a)(4) is in addition to any offense under Section 37.10(c)(2), Penal Code, arising from the same action. SECTION 2C.18. Subsection (b), Section 39.051, Education Code, as amended by Chapters 433 and 805, Acts of the 78th Legislature, Regular Session, 2003, is reenacted and amended to read as follows: (b) Performance on the indicators adopted under this section shall be compared to state-established standards. The degree of change from one school year to the next in performance on each indicator adopted under this section shall also be considered. The indicators must be based on information that is disaggregated by race, ethnicity, gender, and socioeconomic status and must include: (1) the results of assessment instruments required under Sections 39.023(a), (c), and (l), aggregated by grade level and subject area; (2) dropout rates, including dropout rates and district completion rates for grade levels 9 through 12, computed in accordance with standards and definitions adopted by the National Center for Education Statistics of the United States Department of Education; (3) high school graduation rates, computed in accordance with standards and definitions adopted in compliance with the [federal] No Child Left Behind Act of 2001 (Pub. L. No. 107-110); (4) student attendance rates; (5) the percentage of graduating students who attain scores on the secondary exit-level assessment instruments required under Subchapter B that are equivalent to a passing score on the assessment [test] instrument required under Section 51.3062 [51.306]; (6) the percentage of graduating students who meet the course requirements established for the recommended high school program by State Board of Education rule; (7) the results of the Scholastic Assessment Test (SAT), the American College Test (ACT), articulated postsecondary degree programs described by Section 61.852, and certified workforce training programs described by Chapter 311, Labor Code; (8) student growth in achievement, as measured under Section 39.034, aggregated by grade level and subject area; (9) the number and percentage of students at risk of dropping out of school, the number and percentage of those students who are administered each assessment instrument required under Section 39.023, the number and percentage of those students who perform satisfactorily on the assessment instruments, and the results of those students, grouped by number and percentage, on the assessment instruments, disaggregated by subject area and grade level; (10) the number and percentage of students, aggregated by grade level, provided accelerated instruction under Section 28.0211(c), the results of assessments administered under that section, the percentage of students promoted through the grade placement committee process under Section 28.0211, the subject of the assessment instrument on which each student failed to perform satisfactorily, and the performance of those students in the school year following that promotion on the assessment instruments required under Section 39.023; (11) [(9)] for students who have failed to perform satisfactorily on an assessment instrument required under Section 39.023(a) or (c), the numerical progress of those students grouped by number and percentage on subsequent assessment instruments required under those sections, aggregated by grade level and subject area; (12) [(10)] the percentage of students exempted, by exemption category, from the assessment program generally applicable under this chapter; [and] (13) [(11)] the percentage of students of limited English proficiency exempted from the administration of an assessment instrument under Sections 39.027(a)(3) and (4); (14) the percentage of students in a special education program under Subchapter A, Chapter 29, assessed through assessment instruments developed or adopted under Section 39.023(b); (15) for students of limited English proficiency, as defined by Section 29.052, a measure of progress toward English language proficiency, as determined by the commissioner, including the student's performance after transferring out of a bilingual education program or instruction in English as a second language; and (16) the performance of non-educationally disadvantaged students on an assessment instrument required under Sections 39.023(a), (b), (c), and (l) and high school dropout and completion rates. SECTION 2C.19. Subsection (b), Section 39.052, Education Code, is amended to read as follows: (b) The report card shall include the following information: (1) where applicable, the academic excellence indicators adopted under Sections 39.051(b)(1) through (15) and specifically including the indicators adopted under Sections 39.051(b)(9) and (10) [(9)]; (2) average class size by grade level and subject; (3) the administrative and instructional costs per student, computed in a manner consistent with Section 44.0071; and (4) the district's instructional expenditures ratio and instructional employees ratio computed under Section 44.0071, and the statewide average of those ratios, as determined by the commissioner. SECTION 2C.20. Subsection (a), Section 39.053, Education Code, is amended to read as follows: (a) Each board of trustees shall publish an annual report describing the educational performance of the district and of each campus in the district that includes uniform student performance and descriptive information as determined under rules adopted by the commissioner. The annual report must also include: (1) campus performance objectives established under Section 11.253 and the progress of each campus toward those objectives, which shall be available to the public; (2) the academic performance rating for the district and each campus in the district as provided under Section 39.072 [39.072(a) and the performance rating of each campus in the district as provided under Section 39.072(c)]; (3) the district's current special education compliance status with the agency; (4) a statement of the number, rate, and type of violent or criminal incidents that occurred on each district campus, to the extent permitted under the Family Educational Rights and Privacy Act of 1974 (20 U.S.C. Section 1232g); (5) information concerning school violence prevention and violence intervention policies and procedures that the district is using to protect students; [and] (6) the findings that result from evaluations conducted under the Safe and Drug-Free Schools and Communities Act of 1994 (20 U.S.C. Section 7101 et seq.) [and its subsequent amendments]; [and] (7) information received under Section 51.403(e) for each high school campus in the district, presented in a form determined by the commissioner; and (8) evidence that the district currently holds International Organization for Standardization ISO 9000 certification for quality management standards or a statement that the district does not hold that certification. SECTION 2C.21. Section 39.055, Education Code, is amended to read as follows: Sec. 39.055. [ANNUAL] AUDIT OF DROPOUT RECORDS; REPORT. (a) The commissioner shall develop a process for auditing school district dropout records electronically. The commissioner shall also develop a system and standards for review of the audit or use systems already available at the agency. The system must be designed to identify districts that are at high risk of having inaccurate dropout records and that, as a result, may be subject to a special accreditation investigation under Section 39.075 [require on-site monitoring of dropout records. If the electronic audit of a district's dropout records indicates that a district is not at high risk of having inaccurate dropout records, the district may not be subject to on-site monitoring under this subsection. If the risk-based system indicates that a district is at high risk of having inaccurate dropout records, the district is entitled to an opportunity to respond to the commissioner's determination before on-site monitoring may be conducted. The district must respond not later than the 30th day after the date the commissioner notifies the district of the commissioner's determination. If the district's response does not change the commissioner's determination that the district is at high risk of having inaccurate dropout records or if the district does not respond in a timely manner, the commissioner shall order agency staff to conduct on-site monitoring of the district's dropout records]. (b) [(e)] The commissioner shall notify the superintendent [board of trustees] of a school district of any objection the commissioner has to the district's dropout data, any violation of sound accounting practices or of a law or rule revealed by the data, or any recommendation by the commissioner concerning the data. If the data reflect that a penal law has been violated, the commissioner shall notify the county attorney, district attorney, or criminal district attorney, as appropriate, and the attorney general. The commissioner is entitled to access to all district records the commissioner considers necessary or appropriate for the review, analysis, or approval of district dropout data. SECTION 2C.22. Sections 39.071 and 39.072, Education Code, are amended to read as follows: Sec. 39.071. ACCREDITATION. (a) Accreditation of a school district is determined in accordance with this section [subchapter]. (b) Each year, the commissioner shall determine the accreditation status of each school district. In determining accreditation status, the commissioner: (1) shall evaluate and consider the performance of the district under: (A) the academic accountability system under Section 39.072; and (B) the financial accountability system under Subchapter I; (2) shall evaluate and consider: (A) the results of any special accreditation investigation under Section 39.075; and (B) the district's current special education monitoring or compliance status with the agency; and (3) may consider: (A) the district's compliance with statutory requirements and requirements imposed by rule of the commissioner or State Board of Education under specific statutory authority that relate to: (i) reporting data through the Public Education Information Management System (PEIMS) or other reports required by state or federal law or court order; (ii) the high school graduation requirements under Section 28.025; or (iii) an item listed under Sections 7.056(e)(3)(C)-(I) that applies to the district; (B) the effectiveness of the district's programs for special populations; and (C) the effectiveness of the district's career and technology program. (c) Based on a school district's performance under Subsection (b), the commissioner shall: (1) assign a district an accreditation status of: (A) accredited; (B) accredited-warned; or (C) accredited-probation; or (2) revoke the accreditation of the district and order closure of the district under Section 39.1332. (d) The commissioner shall notify a school district that receives an accreditation status of accredited-warned or accredited-probation that the performance of the district is below a standard required under this section. The commissioner shall require the district to notify the parents of students enrolled in the district and property owners in the district of the district's accreditation status and the implications of that accreditation status. (e) A school district that is not accredited may not receive funds from the agency or hold itself out as operating a public school of this state. (f) This chapter may not be construed to invalidate a diploma awarded, course credit earned, or grade promotion granted by a school district before the commissioner revoked the district's accreditation. Sec. 39.072. ACADEMIC ACCOUNTABILITY SYSTEM [ACCREDITATION STANDARDS]. (a) The commissioner [State Board of Education] shall adopt rules for assigning [to evaluate the performance of school districts and to assign] to each school district and campus a performance rating as follows: (1) exemplary (meets or exceeds state exemplary standards); (2) recognized (meets or exceeds required improvement or [and] within 10 percent of state exemplary standards); (3) academically acceptable (below the exemplary and recognized standards but exceeds the academically unacceptable standards); or (4) academically unacceptable (below the state clearly unacceptable performance standard and does not meet required improvement). (b) The academic excellence indicators adopted under Section 39.051(b) [Sections 39.051(b)(1) through (7) and the district's current special education compliance status with the agency] shall be the main considerations of the agency in the rating of a school [the] district or campus under this section. [Additional criteria in the rules may include consideration of: [(1) compliance with statutory requirements and requirements imposed by rule of the State Board of Education under specific statutory authority that relate to: [(A) reporting data through the Public Education Information Management System (PEIMS); [(B) the high school graduation requirements under Section 28.025; or [(C) an item listed in Sections 7.056(e)(3)(C)-(I) that applies to the district; [(2) the effectiveness of the district's programs for special populations; and [(3) the effectiveness of the district's career and technology programs.] (c) The agency shall evaluate [against state standards] and [shall], not later than August 1 of each year, report the performance of each school [campus in a] district and campus. [each open-enrollment charter school on the basis of the campus's performance on the indicators adopted under Sections 39.051(b)(1) through (7). Consideration of the effectiveness of district programs under Subsection (b)(2) or (3) must be based on data collected through the Public Education Information Management System for purposes of accountability under this chapter and include the results of assessments required under Section 39.023.] (d) The agency shall annually review the performance of each school district and campus and determine if a change in the academic performance rating of the district or campus is warranted. Notwithstanding any other provision of this code, the commissioner shall determine how the indicators adopted under Section 39.051(b) may be used to determine academic performance ratings and to select districts and campuses for acknowledgment. (e) Each annual review shall include an analysis of the indicators under Section 39.051(b) to determine district and campus performance in relation to: (1) state standards established for each indicator; (2) required improvement as defined under Section 39.051(c); and (3) comparable improvement as determined under Section 39.051(c). (f) The academic performance rating of a school district may be raised or lowered based on the district's performance or may be lowered based on the unacceptable performance of one or more campuses in the district. The academic performance rating of a school district may also be lowered based on a determination that data provided to the agency by the district that is necessary for conducting an annual review under this section is unreliable. (g) The commissioner shall notify a school district if the performance of the district or a campus in the district is below a standard required under this section. The commissioner shall require the school district to notify the parents of students who are enrolled in the district and property owners in the district of the academic performance rating and the implications of that rating. (h) Notwithstanding any other provision of this code, for purposes of determining the performance of a school district or open-enrollment charter school under this chapter, including the academic performance rating [accreditation status] of the district or school, a student attending a campus that is a [confined by court order in a residential program or] facility operated by or under contract with the Texas Youth Commission, a pre-adjudication secure detention facility or a post-adjudication secure correctional facility that is registered with the Texas Juvenile Probation Commission, or a residential facility is not considered to be a student of the school district or open-enrollment charter school serving the student [in which the program or facility is physically located]. The performance of a student who attends such a campus [student] on an assessment instrument or other academic excellence indicator adopted under Section 39.051 shall be determined and[,] reported, but may not be used to determine the rating of the school district or open-enrollment charter school unless the campus is the only campus operated by the district or school [and considered separately from the performance of students attending a school of the district in which the program or facility is physically located]. SECTION 2C.23. Subchapter D, Chapter 39, Education Code, is amended by adding Section 39.0722 to read as follows: Sec. 39.0722. MEASURE OF POSTSECONDARY PREPARATION. (a) In addition to school district performance ratings under Section 39.072, the commissioner shall annually rate districts according to the degree to which the districts prepare students for postsecondary success, including student performance on the applicable indicators under Sections 39.051(b) and 39.0721. The commissioner shall consult with the P-16 Council established under Section 61.077 when adopting criteria under this section. (b) The commissioner may adopt rules as necessary to administer this section. SECTION 2C.24. Subsection (e), Section 39.073, Education Code, is amended to read as follows: (e) In determining a district's accreditation rating, the agency shall consider: (1) the district's current special education compliance status with the agency; [and] (2) the progress of students who have failed to perform satisfactorily in the preceding school year on an assessment instrument required under Section 39.023(a) [39.023(a), (c),] or (l); and (3) the district's current certification status under the International Organization for Standardization ISO 9000 series quality management program certification as described by Section 7.033. SECTION 2C.25. Subsection (a), Section 39.075, Education Code, is amended to read as follows: (a) The commissioner may [shall] authorize special accreditation investigations to be conducted: (1) when excessive numbers of absences of students eligible to be tested on state assessment instruments are determined; (2) when excessive numbers of allowable exemptions from the required state assessment instrument are determined; (3) in response to complaints submitted to the agency with respect to alleged violations of civil rights or other requirements imposed on the state by federal law or court order; (4) in response to established monitoring or compliance reviews of the district's financial accounting practices and state and federal program requirements; (5) when extraordinary numbers of student placements in alternative education programs, other than placements under Sections 37.006 and 37.007, are determined; (6) in response to an allegation involving a conflict between members of the board of trustees or between the board and the district administration if it appears that the conflict involves a violation of a role or duty of the board members or the administration clearly defined by this code; (7) when excessive numbers of students in special education programs under Subchapter A, Chapter 29, are assessed through assessment instruments developed or adopted under Section 39.023(b); [or] (8) in response to questions concerning a program, including special education, required by federal law or for which the district receives federal funds; (9) when an annual review indicates the academically unacceptable performance under Section 39.072 of one or more campuses in a district, except that the resulting investigation is limited to those campuses; (10) in response to concerns regarding the integrity of data submitted to the agency; (11) in response to allegations of a violation of student assessment procedures for assessment instruments adopted under Section 39.023; or (12) as the commissioner otherwise determines necessary. SECTION 2C.26. Subsection (c), Section 39.075, Education Code, as amended by Chapters 396 and 931, Acts of the 77th Legislature, Regular Session, 1999, is reenacted and amended to read as follows: (c) Based on the results of a special accreditation investigation, the commissioner may: (1) take appropriate action under Subchapter G; (2) raise or lower the district's accreditation status [rating]; or (3) take action under both Subdivisions (1) and (2). SECTION 2C.27. Section 39.076, Education Code, is amended by amending Subsection (a) and adding Subsections (a-1), (a-2), (a-3), and (c) to read as follows: (a) The agency shall adopt written procedures for conducting [on-site] investigations under this subchapter. The agency shall make the procedures available to the complainant, the alleged violator, and the public. Agency staff must be trained in the procedures and must follow the procedures in conducting the investigation. (a-1) An investigation conducted under this subchapter may be an on-site, desk, or data-based investigation as determined by the commissioner. (a-2) If conducting an on-site investigation, the investigators may obtain information from administrators, teachers, or parents of students enrolled in the school district. The commissioner shall adopt rules for: (1) obtaining information from parents and using that information in the investigator's report; and (2) obtaining information from teachers in a manner that prevents a campus or district from screening the information. (a-3) The agency may give written notice of any impending on-site investigation to the superintendent and the board of trustees of a school district. (c) The investigators conducting an on-site investigation shall report the results of the investigation orally and in writing to the board of trustees of the district and, as appropriate, to campus administrators, and shall make recommendations concerning any necessary improvements or sources of aid, such as regional education service centers. SECTION 2C.28. Subchapter D, Chapter 39, Education Code, is amended by adding Sections 39.077 and 39.078 to read as follows: Sec. 39.077. FINALITY OF DECISION BY COMMISSIONER. (a) A school district or open-enrollment charter school that wishes to challenge a decision to assign or lower an accreditation status, an academic performance rating, or a financial accountability rating must petition for an informal review as provided by Section 7.0571. (b) A final decision by the commissioner to assign or lower an accreditation status, an academic performance rating, or a financial accountability rating following a review under Section 7.0571 is final and may not be appealed. Sec. 39.078. RULES. (a) The commissioner may adopt rules as necessary to administer this subchapter. (b) Unless a provision of this code clearly specifies otherwise, any rule adopted under Subsection (a) must apply accreditation requirements and academic performance ratings under this subchapter to: (1) an open-enrollment charter school in the same manner as the requirements and ratings are applied to a school district; and (2) a campus operated by an open-enrollment charter school in the same manner as the requirements and ratings are applied to a campus operated by a school district. SECTION 2C.29. Subchapter F, Chapter 39, Education Code, is amended by adding Section 39.113 to read as follows: Sec. 39.113. STATE INCENTIVE PROGRAM FOR IMPROVING STUDENT PERFORMANCE ON AT-RISK CAMPUSES. (a) The commissioner shall adopt rules to create an incentive award system for annual growth in student achievement. A school that achieves incremental growth in student achievement, as described in Subsection (b), is eligible for an award if the school: (1) has a student population of at least 65 percent educationally disadvantaged students; (2) achieves an accreditation performance rating of academically acceptable or better; and (3) demonstrates superior growth in the academic performance of educationally disadvantaged students. (b) The commissioner by rule shall adopt performance criteria to measure annual growth in student academic performance. The commissioner shall consider the following criteria, as applicable: (1) annual growth in student achievement that contributes to closing performance gaps among various populations of students; (2) improvements in student scores on the assessment instruments required under Section 39.023; (3) growth in high school completion rates; (4) improvement in student scores on college advanced placement tests; and (5) any other factor that contributes to student achievement. (c) From funds appropriated for the purposes of this section, the commissioner shall award grants to campuses that meet performance criteria adopted under Subsection (b). The commissioner shall allocate awards to campuses not later than December 1 of each year, based on growth in student achievement as measured for the preceding two school years. (c-1) The commissioner shall award grants under this section beginning September 1, 2006. This subsection expires January 1, 2007. (d) At least 75 percent of an award under this section must be used for additional teacher compensation at the campus level. The commissioner by rule shall provide for allocating awards under this subsection, including providing individual awards of at least $3,000 for each teacher at a campus receiving an award under this subsection. (e) Grants from funds appropriated for the award program may not exceed $50 million each year except as expressly authorized by the General Appropriations Act or other law. (f) A determination of the commissioner under this section is final and may not be appealed. (g) The commissioner shall annually evaluate the effectiveness of the state incentive program for improving student performance on at-risk campuses established under this section. The evaluation must consider: (1) the performance of students in districts under this section on assessment instruments administered under Section 39.023; (2) the districts' high school graduation and completion rates; and (3) the districts' teacher attrition rates. SECTION 2C.30. Section 39.131, Education Code, is amended to read as follows: Sec. 39.131. SANCTIONS FOR DISTRICTS. (a) If a school district does not satisfy the accreditation criteria under Section 39.071, the academic performance standards under Section 39.072, or any financial accountability standard as determined by commissioner rule, the commissioner shall take any of the following actions[, listed in order of severity,] to the extent the commissioner determines necessary: (1) issue public notice of the deficiency to the board of trustees; (2) order a hearing conducted by the board of trustees of the district for the purpose of notifying the public of the unacceptable performance, the improvements in performance expected by the agency, and the sanctions that may be imposed under this section if the performance does not improve; (3) order the preparation of a student achievement improvement plan that addresses each academic excellence indicator for which the district's performance is unacceptable, the submission of the plan to the commissioner for approval, and implementation of the plan; (4) order a hearing to be held before the commissioner or the commissioner's designee at which the president of the board of trustees of the district and the superintendent shall appear and explain the district's low performance, lack of improvement, and plans for improvement; (5) arrange an on-site investigation of the district; (6) appoint an agency monitor to participate in and report to the agency on the activities of the board of trustees or the superintendent; (7) appoint a conservator to oversee the operations of the district; (8) appoint a management team to direct the operations of the district in areas of unacceptable performance or require the district to obtain certain services under a contract with another person; (9) if a district has a current accreditation status of accredited-warned or accredited-probation, is [been] rated [as] academically unacceptable, or fails to satisfy financial accountability standards as determined by commissioner rule [for a period of one year or more], appoint a board of managers to exercise the powers and duties of the board of trustees; (10) if for two consecutive school years, including the current school year, a district has received an accreditation status of accredited-warned or accredited-probation, has been rated academically unacceptable, or has failed to satisfy financial accountability standards as determined by commissioner rule, revoke the district's accreditation and [been rated as academically unacceptable for a period of two years or more]: (A) order closure of the district and annex the district to one or more adjoining districts under Section 13.054; or (B) in the case of a home-rule school district or open-enrollment charter school, order closure of all programs operated under the district's or school's charter; or (11) if a district has been rated [as] academically unacceptable for [a period of] two consecutive school years, including the current school year, [or more] due to the district's dropout rates, impose sanctions designed to improve high school completion rates, including: (A) ordering the development of a dropout prevention plan for approval by the commissioner; (B) restructuring the district or appropriate school campuses to improve identification of and service to students who are at risk of dropping out of school, as defined by Section 29.081; (C) ordering lower student-to-counselor ratios on school campuses with high dropout rates; and (D) ordering the use of any other intervention strategy effective in reducing dropout rates, including mentor programs and flexible class scheduling. (b) This subsection applies regardless of whether a district has satisfied the accreditation criteria. If for two consecutive school years, including the current school year, [a period of one year or more] a district has had a conservator or management team assigned, the commissioner may appoint a board of managers, a majority of whom must be residents of the district, to exercise the powers and duties of the board of trustees. SECTION 2C.31. Section 39.132, Education Code, is amended to read as follows: Sec. 39.132. SANCTIONS FOR ACADEMICALLY UNACCEPTABLE CAMPUSES. (a) If a campus performance is below any standard under Section 39.072 [39.073(b)], the campus is considered an academically unacceptable [a low-performing] campus. The commissioner may permit the campus to participate in an innovative redesign of the campus to improve campus performance or shall [may] take any of the other following actions[, listed in order of severity], to the extent the commissioner determines necessary: (1) issue public notice of the deficiency to the board of trustees; (2) order a hearing conducted by the board of trustees at the campus for the purpose of: (A) notifying the public of the unacceptable performance, the improvements in performance expected by the agency, and the sanctions that may be imposed under this section if the performance does not improve within a designated period of time; and (B) soliciting public comment on the initial steps being taken to improve performance; (3) [order the preparation of a report regarding the parental involvement program at the campus and a plan describing strategies for improving parental involvement at the campus; [(4) order the preparation of a report regarding the effectiveness of the district- and campus-level planning and decision-making committees established under Subchapter F, Chapter 11, and a plan describing strategies for improving the effectiveness of those committees; [(5)] order the preparation of a student achievement improvement plan that addresses each academic excellence indicator for which the campus's performance is unacceptable, the submission of the plan to the commissioner for approval, and implementation of the plan; (4) [(6)] order a hearing to be held before the commissioner or the commissioner's designee at which the president of the board of trustees, the superintendent, and the campus principal shall appear and explain the campus's low performance, lack of improvement, and plans for improvement; or (5) [(7)] appoint a special campus intervention team to: (A) conduct a comprehensive on-site evaluation of the campus to determine the cause for the campus's low performance and lack of progress; (B) recommend actions, including reallocation of resources and technical assistance, changes in school procedures or operations, staff development for instructional and administrative staff, intervention for individual administrators or teachers, waivers from state statute or rule, or other actions the team considers appropriate; (C) assist in the development of a campus plan for student achievement; and (D) assist the commissioner in monitoring the progress of the campus in implementing the campus plan for improvement of student achievement[; or [(8) if a campus has been a low-performing campus for a period of one year or more, appoint a board of managers composed of residents of the district to exercise the powers and duties of the board of trustees of the district in relation to the campus]. (a-1) Notwithstanding Subsection (a), if a campus has been identified as academically unacceptable under this section or the campus is rated academically acceptable for the current school year but would be rated as academically unacceptable if performance standards to be used for the following school year were applied to the current school year, the commissioner shall select and assign a technical assistance team to assist the campus in executing a school improvement plan and any other school improvement strategies the commissioner determines appropriate. The commissioner shall select and assign the technical assistance team not later than: (1) October 1 after identifying the campus as academically unacceptable or otherwise subject to this subsection; or (2) the 30th day after the date the campus is provided notice that the campus's appeal of its performance rating has been denied. (a-2) A technical assistance team assigned under Subsection (a-1) to a campus that is academically unacceptable shall conduct a comprehensive on-site evaluation of the campus to determine the cause for the campus's low performance and lack of progress. The team shall have wide latitude to determine what factors to assess and how to do the assessment. Some factors to be considered are: (1) an assessment of the staff to determine the percentage of certified teachers who are teaching in their field, the number of teachers with less than three years of experience, and teacher turnover rates; (2) compliance with the appropriate class size rules and number of class size waivers received; (3) an assessment of the quality, quantity, and appropriateness of instructional materials, including the availability of technology-based instructional materials; (4) a report on the parental involvement strategies and the effectiveness of such strategies; (5) an assessment of the extent and quality of the mentoring program provided for new teachers on that campus; (6) an assessment of the type and quality of the professional development provided to the staff; (7) a demographic analysis of the student population, including student demographics, at-risk populations, and special education percentages; (8) a report of disciplinary incidents and school safety information; (9) financial and accounting practices; and (10) an assessment of appropriateness of the curriculum and teaching strategies. (a-3) Upon completion of the evaluation the assistance team will recommend actions, including any necessary reallocation of resources and/or additional funds taken from funds to be set aside by the agency to assist campuses in meeting the standards specified in the intervention plan, technical assistance, changes in school procedures or operations, staff development for instructional and administrative staff, intervention for individual administrators or teachers, waivers from state statute or rule, or other actions the team considers appropriate. (a-4) The commissioner may determine when a technical assistance team's services are no longer needed at a campus under this section. If a campus is considered an academically unacceptable campus under Subsection (a) for the subsequent school year after the campus is reconstituted under this section, the commissioner shall pursue alternative management under Section 39.1321. (b) Notwithstanding Subsection (a), if [If] a campus has been identified as academically unacceptable [a low-performing campus] for three [a period of two] consecutive school years, including the current school year [or more], the commissioner shall order the reconstitution of [closure of the district or charter program on the campus or reconstitute] the campus and assign a special campus intervention team. In reconstituting the campus, a special campus intervention team shall assist the campus in: (1) developing a school improvement plan; (2) obtaining approval of the plan from the commissioner; and (3) executing the plan on approval by the commissioner. (c) The special campus intervention team shall decide [be assembled for the purpose of deciding] which educators may be retained at that campus. A principal who has been employed by the campus in that capacity during the three-year period described by Subsection (b) may not be retained at that campus. A teacher of a subject assessed by an assessment instrument under Section 39.023 may be retained only if the special campus intervention team determines that a pattern exists of significant academic growth by students taught by the teacher. If an educator is not retained, the educator may be assigned to another position in the district. (d) In developing and executing a school improvement plan under Subsection (b), the special campus intervention team shall: (1) assist the campus in implementing research-based practices for curriculum development and classroom instruction, including bilingual education and special education programs, if appropriate, and financial management; and (2) provide technical assistance based on scientifically based research, including data analysis, academic deficiency identification, intervention implementation, and budget analysis, to strengthen and improve the instructional program at the campus. (e) A special campus intervention team assembled under Subsection (b): (1) shall continue to work with a campus until: (A) the campus is rated academically acceptable for a two-year period; or (B) the campus is rated academically acceptable for a one-year period and the commissioner determines that the campus is operating and will continue to operate in a manner that improves student achievement; and (2) may continually update the school improvement plan, with approval from the commissioner, to meet the needs of the campus. (f) Notwithstanding any other provision of this subchapter, if the commissioner determines that an intervention under Subsection (b) or Section 39.1321 cannot reasonably be expected to achieve timely improvement at a campus that has been identified as academically unacceptable for three consecutive school years, including the current school year, the commissioner may order the closure of the campus. (g) For the 2005-2006 school year, the commissioner shall assign a technical assistance team to a campus under Subsection (a-1) on the basis of academic performance ratings for the 2004-2005 school year. The commissioner may impose a sanction on a campus under Subsection (b) or (f) on the basis of academic performance ratings for the 2003-2004 and 2004-2005 school years. This subsection expires September 1, 2007. (h) If a campus is considered an academically unacceptable campus under Subsection (a) for the subsequent school year after the campus is reconstituted under Subsection (b), the commissioner shall pursue alternative management under Section 39.1321. SECTION 2C.32. Subchapter G, Chapter 39, Education Code, is amended by adding Sections 39.1321 and 39.1322 to read as follows: Sec. 39.1321. MANAGEMENT OF CERTAIN ACADEMICALLY UNACCEPTABLE CAMPUSES. (a) Except as provided by Section 39.132(f), a campus is subject to this section if the campus has been identified as academically unacceptable under Section 39.132(a) for the subsequent school year after the campus is reconstituted under Section 39.132(b). (b) The commissioner shall solicit proposals from qualified entities to assume management of a campus subject to this section. (c) If the commissioner determines that the basis for identifying a campus as academically unacceptable is limited to a specific condition that may be remedied with targeted technical assistance, the commissioner may: (1) provide the campus a one-year waiver under this section; and (2) require the district to contract for the appropriate technical assistance. (d) The commissioner may annually solicit proposals under this section for the management of a campus subject to this section. The commissioner shall notify a qualified entity that has been approved as a provider under this section. The district must execute a contract with an approved provider and relinquish control of the campus before January 1 of the school year. (e) To qualify for consideration as a managing entity under this section, the entity must submit a proposal that provides information relating to the entity's management and leadership team that will participate in management of the campus under consideration, including information relating to individuals that have: (1) documented success in whole school interventions that increased the educational and performance levels of students in academically unacceptable campuses; (2) a proven record of effectiveness with programs assisting low-performing students; (3) a proven ability to apply scientifically based research to school intervention strategies; (4) a proven record of financial ability to perform under the management contract; and (5) any other experience or qualifications the commissioner determines necessary. (e-1) In selecting a managing entity under this section, the commissioner shall give preference to an entity that: (1) meets any qualifications under this section; and (2) has documented success in educating students from similar demographic groups and with similar educational needs as the students who attend the campus that is to be operated by a managing entity under this section. (f) The school district may negotiate the term of a management contract for not more than five years with an option to renew the contract. The management contract must include a provision describing the district's responsibilities in supporting the operation of the campus. The commissioner shall approve the contract before the contract is executed and, as appropriate, may require the district, as a term of the contract, to support the campus in the same manner as the district was required to support the campus before the execution of the management contract. (g) A management contract under this section shall include provisions approved by the commissioner that require the managing entity to demonstrate improvement in campus performance, including negotiated performance measures. The performance measures must be consistent with the priorities of this chapter. The commissioner shall evaluate a managing entity's performance on the first and second anniversaries of the date of the management contract. If the evaluation fails to demonstrate improvement as negotiated under the contract by the first anniversary of the date of the management contract, the district may terminate the management contract, with the commissioner's consent, for nonperformance or breach of contract and select another provider from an approved list provided by the commissioner. If the evaluation fails to demonstrate significant improvement, as determined by the commissioner, by the second anniversary of the date of the management contract, the district shall terminate the management contract and select another provider from an approved list provided by the commissioner or resume operation of the campus if approved by the commissioner. If the commissioner approves the district's operation of the campus, the commissioner shall assign a technical assistance team to assist the campus. (h) Notwithstanding any other provision of this code, the funding for a campus operated by a managing entity must be equivalent to the funding of the other campuses in the district on a per student basis so that the managing entity receives the same funding the campus would otherwise have received. (i) Each campus operated by a managing entity under this section is subject to this chapter in the same manner as any other campus in the district. (j) The commissioner may adopt rules necessary to implement this section. (k) With respect to the management of a campus under this section: (1) a managing entity is considered to be a governmental body for purposes of Chapters 551 and 552, Government Code; and (2) any requirement in Chapter 551 or 552, Government Code, that applies to a school district or the board of trustees of a school district applies to a managing entity. Sec. 39.1322. REVIEW OF SANCTIONS FOR CAMPUSES SERVING RESIDENTIAL FACILITIES. (a) A school district or public charter district may petition the commissioner to review an academically unacceptable rating assigned to a campus if the campus predominantly served students residing in a residential facility during the rating period. (b) If the commissioner determines that the basis for identifying the campus as academically unacceptable was limited to a condition that was not related to the educational purpose of the residential facility, the commissioner may take any of the following actions as the commissioner determines appropriate: (1) change, modify, or suspend the academically unacceptable rating; or (2) impose any sanction otherwise authorized under Section 39.131 or 39.132. (c) The commissioner may consider a factor other than a factor used to assign a rating in evaluating a campus under this section. The commissioner may assign a special campus intervention team under Section 39.132(a)(5) at the expense of the school district or public charter district as provided by Section 39.134 to develop a long-term intervention plan to improve services for students. (d) On a determination that a campus subject to this section is appropriately meeting the educational needs of its students, the commissioner may waive revocation of a public charter district under Section 11A.107(b) for a period not to exceed two years. A waiver under this subsection may be extended for additional two-year periods based on subsequent evaluations of the campus. (e) This section does not limit the commissioner's ability to sanction a public charter district for the performance of a campus subject to this section under Section 11A.107(a) or any other law. (f) A decision by the commissioner under this section is final and may not be appealed. SECTION 2C.33. Section 39.133, Education Code, is amended to read as follows: Sec. 39.133. ANNUAL REVIEW. (a) The commissioner shall review annually the performance of a district or campus subject to a sanction under this subchapter to determine the appropriate actions to be implemented under this subchapter. The determination shall take into account the number, severity, and duration of the problems identified [commissioner must review at least annually the performance of a district for which the accreditation rating has been lowered due to unacceptable student performance and may not raise the rating until the district has demonstrated improved student performance]. If the review reveals a lack of improvement, the commissioner shall increase the level of state intervention and sanction unless the commissioner finds good cause for maintaining the current status. (b) The commissioner shall review at least annually the performance of a school district for which the academic performance rating has been lowered due to unacceptable student performance and may not raise the rating until the district has demonstrated improved student performance. SECTION 2C.34. Subchapter G, Chapter 39, Education Code, is amended by adding Sections 39.1331, 39.1332, and 39.1333 to read as follows: Sec. 39.1331. ACQUISITION OF PROFESSIONAL SERVICES. In addition to other sanctions authorized under Sections 39.131 and 39.132, the commissioner may order a school district or campus to acquire professional services at the expense of the district or campus to address the applicable financial, assessment, data quality, program, or governance deficiency. The commissioner's order may require the district or campus to: (1) select an external auditor, data quality expert, professional authorized to monitor district assessment instrument administration, or curriculum or program expert; or (2) provide for the appropriate training of district staff or board of trustees members in the case of a district, or campus staff, in the case of a campus. Sec. 39.1332. CLOSURE OF SCHOOL DISTRICT OR CAMPUS. (a) The commissioner may revoke the accreditation of a school district and order the closure of the district or a campus, as appropriate, under the following circumstances: (1) the commissioner is authorized to close the district or campus under Section 39.131(a)(10) or 39.132(f); (2) the commissioner determines that the district is insolvent and unable to complete the school year; or (3) the commissioner determines that the district has ceased operations for 11 or more instructional days during the current or most recent scheduled school year without the commissioner's authorization. (b) The commissioner shall issue an order of closure under this section that includes provisions necessary for the continuation of the education of students enrolled in the district or campus, including annexation to one or more adjoining districts as provided by Section 13.054. An order of closure may: (1) establish an effective date for accreditation revocation and closure that is not later than the first anniversary of the date of the order; (2) provide for an interim board of managers to exercise the duties of the board of trustees of the district as designated by the commissioner; (3) require enrollment or student services to be provided by another district as necessary to allow students enrolled in the closed district to complete a school year, and make adjustments in the state and federal funding to which the district would otherwise be entitled as determined by the commissioner; and (4) require the preservation, transfer, or surrender of all student records and other records required for an audit of any state and federal funding provided to the district. (c) A person who intentionally destroys, conceals, or tampers with a record that is required to be preserved, transferred, or surrendered under Subsection (b)(4) commits an offense punishable under Section 37.10(c)(2), Penal Code. (d) A board of managers exercising authority under Subsection (b)(2) may exercise the authority of the board of trustees with regard to financial management of the district and personnel actions. The board of managers is not required to be composed of residents of the district. (e) An open-enrollment charter school ordered closed under this section is not entitled to a separate hearing concerning the revocation or nonrenewal of the charter under Section 12.116. Sec. 39.1333. FINALITY OF DECISION BY COMMISSIONER. (a) A school district or open-enrollment charter school that wishes to challenge a decision to impose a sanction under this subchapter, including a decision to close a district, school, or campus under Section 39.1332, must petition for an informal review as provided by Section 7.0571. (b) A final decision by the commissioner to impose a sanction under this subchapter, including a decision to close a school district or a campus under Section 39.1332, following a review under Section 7.0571 is final and may not be appealed. (c) A school district may not collaterally contest an academic performance rating or other accreditation standard as part of the review of a sanction under this subchapter if a review opportunity has already been provided for the academic performance rating. SECTION 2C.35. Section 39.134, Education Code, is amended to read as follows: Sec. 39.134. COSTS PAID BY DISTRICT. The costs of providing a monitor, conservator, management team, [or] special campus intervention team, technical assistance team, managing entity under Section 39.1321, or service provider under Section 39.1331 shall be paid by the district. If the district fails or refuses to pay the costs in a timely manner, the commissioner may: (1) pay the costs using amounts withheld from any funds to which the district is otherwise entitled; or (2) recover the amount of the costs in the manner provided for recovery of an overallocation of state funds under Section 42.258. SECTION 2C.36. Subchapter G, Chapter 39, Education Code, is amended by adding Section 39.1371 to read as follows: Sec. 39.1371. INTERVENTION OPERATIONS. (a) The agency is responsible for managing an intervention of a campus subject to sanctions under this subchapter. (b) The agency shall: (1) monitor the progress of technical assistance teams and special campus intervention teams appointed by the commissioner under this subchapter; and (2) supervise the activities of the management entities under Section 39.1321. (c) The agency shall: (1) establish by rule and publish school improvement objectives; (2) advocate for the increased use of research-based effective practices; and (3) coordinate campus improvement activities of the agency and regional education service centers. (d) The commissioner may contract for services under this section. SECTION 2C.37. Subsection (a), Section 39.182, Education Code, as amended by S.B. No. 42, Acts of the 79th Legislature, 2005, is amended to read as follows: (a) Not later than December 1 of each year, the agency shall prepare and deliver to the governor, the lieutenant governor, the speaker of the house of representatives, each member of the legislature, the Legislative Budget Board, and the clerks of the standing committees of the senate and house of representatives with primary jurisdiction over the public school system a comprehensive report covering the preceding school year and containing: (1) an evaluation of the achievements of the state educational program in relation to the statutory goals for the public education system under Section 4.002; (2) an evaluation of the status of education in the state as reflected by the academic excellence indicators adopted under Section 39.051; (3) a summary compilation of overall student performance on academic skills assessment instruments required by Section 39.023 with the number and percentage of students exempted from the administration of those instruments and the basis of the exemptions, aggregated by grade level, subject area, campus, and district, with appropriate interpretations and analysis, and disaggregated by race, ethnicity, gender, and socioeconomic status; (4) a summary compilation of overall performance of students placed in a disciplinary alternative education program established under Section 37.008 on academic skills assessment instruments required by Section 39.023 with the number of those students exempted from the administration of those instruments and the basis of the exemptions, aggregated by district, grade level, and subject area, with appropriate interpretations and analysis, and disaggregated by race, ethnicity, gender, and socioeconomic status; (5) a summary compilation of the progress [overall performance] of students at risk of dropping out of school, as defined by Section 29.081(d), including information described by the academic excellence indicators under Sections 39.051(b)(8)-(11), provided statewide and aggregated by district, on academic skills assessment instruments required by Section 39.023 and any other assessment instrument required by the commissioner [with the number of those students exempted from the administration of those instruments and the basis of the exemptions, aggregated by district, grade level, and subject area], with appropriate interpretations and analysis, and disaggregated by race, ethnicity, gender, and socioeconomic status; (6) an evaluation of the correlation between student grades and student performance on academic skills assessment instruments required by Section 39.023; (7) a statement of the dropout rate of students in grade levels 7 through 12, expressed in the aggregate and by grade level, and a statement of the completion rates of students for grade levels 9 through 12; (8) a statement of: (A) the completion rate of students who enter grade level 9 and graduate not more than four years later; (B) the completion rate of students who enter grade level 9 and graduate, including students who require more than four years to graduate; (C) the completion rate of students who enter grade level 9 and not more than four years later receive a high school equivalency certificate; (D) the completion rate of students who enter grade level 9 and receive a high school equivalency certificate, including students who require more than four years to receive a certificate; and (E) the number and percentage of all students who have not been accounted for under Paragraph (A), (B), (C), or (D); (9) a statement of the projected cross-sectional and longitudinal dropout rates for grade levels 9 through 12 for the next five years, assuming no state action is taken to reduce the dropout rate; (10) a description of a systematic, measurable plan for reducing the projected cross-sectional and longitudinal dropout rates to five percent or less for the 1997-1998 school year; (11) a summary of the information required by Section 29.083 regarding grade level retention of students and information concerning: (A) the number and percentage of students retained; and (B) the performance of retained students on assessment instruments required under Section 39.023(a); (12) information, aggregated by district type and disaggregated by race, ethnicity, gender, and socioeconomic status, on: (A) the number of students placed in a disciplinary alternative education program established under Section 37.008; (B) the average length of a student's placement in a disciplinary alternative education program established under Section 37.008; (C) the academic performance of students on assessment instruments required under Section 39.023(a) during the year preceding and during the year following placement in a disciplinary alternative education program; and (D) the dropout rates of students who have been placed in a disciplinary alternative education program established under Section 37.008; (13) a list of each school district or campus that does not satisfy performance standards, with an explanation of the actions taken by the commissioner to improve student performance in the district or campus and an evaluation of the results of those actions; (14) an evaluation of the status of the curriculum taught in public schools, with recommendations for legislative changes necessary to improve or modify the curriculum required by Section 28.002; (15) a description of all funds received by and each activity and expenditure of the agency; (16) a summary and analysis of the instructional expenditures ratios and instructional employees ratios of school districts computed under Section 44.0071; (17) a summary of the effect of deregulation, including exemptions and waivers granted under Section 7.056 or 39.112; (18) a statement of the total number and length of reports that school districts and school district employees must submit to the agency, identifying which reports are required by federal statute or rule, state statute, or agency rule, and a summary of the agency's efforts to reduce overall reporting requirements; (19) a list of each school district that is not in compliance with state special education requirements, including: (A) the period for which the district has not been in compliance; (B) the manner in which the agency considered the district's failure to comply in determining the district's accreditation status; and (C) an explanation of the actions taken by the commissioner to ensure compliance and an evaluation of the results of those actions; (20) an evaluation of public charter districts, including: (A) the academic performance of students enrolled in public charter districts, disaggregated by race, ethnicity, gender, and socioeconomic status; (B) the costs of instruction, administration, and transportation incurred by public charter districts; and (C) other issues, as determined by the commissioner [a comparison of the performance of open-enrollment charter schools and school districts on the academic excellence indicators specified in Section 39.051(b) and accountability measures adopted under Section 39.051(g), with a separately aggregated comparison of the performance of open-enrollment charter schools predominantly serving students at risk of dropping out of school, as defined by Section 29.081(d), with the performance of school districts]; (21) a summary of the information required by Section 38.0141 regarding student health and physical activity from each school district; and (22) any additional information considered important by the commissioner or the State Board of Education. SECTION 2C.38. Subsection (a), Section 39.202, Education Code, is amended to read as follows: (a) The commissioner shall, in consultation with the comptroller, develop and implement a financial accountability rating system for school districts in this state that distinguishes among districts' varying levels of financial performance. SECTION 2C.39. Section 39.182, Education Code, is amended by adding Subsections (b-1) and (b-2) to read as follows: (b-1) The report must include an assessment of the impact of the performance-based grant system developed under Subchapter E, Chapter 7, on student academic performance, including: (1) an analysis of performance and spending information relating to grants administered by the agency; and (2) recommendations on any statutory changes needed for the agency to more effectively administer grant programs, including recommendations on whether to eliminate or modify inefficient grant programs, expand effective grant programs, or consolidate similar grant programs to maximize the effectiveness and efficiencies of those programs. (b-2) Subsection (b-1) applies beginning January 1, 2009. This subsection expires February 1, 2009. SECTION 2C.40. Subchapter I, Chapter 39, Education Code, is amended by adding Section 39.205 to read as follows: Sec. 39.205. REPORT TO LEGISLATURE. (a) Not later than September 1, 2006, the agency shall submit a report to the legislature on the status of the financial accountability system that recommends to the legislature methods for linking school district financial management performance and academic performance. (b) This section expires September 2, 2006. SECTION 2C.41. Subchapter A, Chapter 44, Education Code, is amended by adding Section 44.0073 to read as follows: Sec. 44.0073. INSTRUCTIONAL COSTS. (a) For purposes of this section: (1) "Direct instructional costs" includes a school district's expenses related to instruction, instructional resources and media services, curriculum development, instructional staff development, instructional leadership, school leadership, and evaluation and counseling services. (2) "Indirect instructional costs" includes: (A) a school district's expenses related to social work services, health services, student transportation, food services, facility maintenance and operations, security and monitoring services, and data processing services; and (B) payments to another district under the public education grant program under Subchapter G, Chapter 29, payments to another district that is a member of a shared services arrangement, payments to a fiscal agent, and payments under Section 37.012 to a juvenile justice alternative education program. (b) For purposes of school district financial accountability, the agency shall identify each district's direct and indirect instructional costs for the preceding fiscal year and make that information available to the public on the agency's Internet website.
PART D. INSTRUCTIONAL MATERIALS
SECTION 2D.01. Subdivision (28), Subsection (b), Section 7.055, Education Code, is amended to read as follows: (28) The commissioner shall perform duties relating to the funding, adoption, and purchase of instructional materials [textbooks] under Chapter 31. SECTION 2D.02. Subsection (f), Section 7.056, Education Code, is amended to read as follows: (f) A school district or campus that is required to develop and implement a student achievement improvement plan under Section 39.131 or 39.132 may receive an exemption or waiver under this section from any law or rule other than: (1) a prohibition on conduct that constitutes a criminal offense; (2) a requirement imposed by federal law or rule; (3) a requirement, restriction, or prohibition imposed by state law or rule relating to: (A) public school accountability as provided by Subchapters B, C, D, and G, Chapter 39; or (B) educator rights and benefits under Subchapters A, C, D, E, F, G, and I, Chapter 21, or under Subchapter A, Chapter 22; or (4) [textbook] selection of instructional materials under Chapter 31. SECTION 2D.03. Subdivision (23), Subsection (c), Section 7.102, Education Code, is amended to read as follows: (23) The board shall adopt and purchase or license instructional materials [textbooks] as provided by Chapter 31 and adopt rules required by that chapter. SECTION 2D.04. Subsections (a) and (c), Section 7.108, Education Code, are amended to read as follows: (a) A person interested in selling bonds of any type, [or] a publisher, or any other person engaged in manufacturing, shipping, selling, or advertising instructional materials [textbooks] or otherwise connected with the instructional material [textbook] business commits an offense if the person makes or authorizes a political contribution to or takes part in, directly or indirectly, the campaign of any person seeking election to or serving on the board. (c) In this section: (1) "Instructional material" and "publisher" have the meanings assigned by Section 31.002. (2) "Political contribution" has the meaning assigned by Section 251.001, Election Code. [(2) "Textbook" has the meaning assigned by Section 31.002.] SECTION 2D.05. The heading to Section 7.112, Education Code, is amended to read as follows: Sec. 7.112. REPRESENTATION OF [TEXTBOOK] PUBLISHER OF INSTRUCTIONAL MATERIALS BY FORMER MEMBER OF BOARD. SECTION 2D.06. Subsection (a), Section 7.112, Education Code, is amended to read as follows: (a) A former member of the State Board of Education who is employed by or otherwise receives compensation from a [textbook] publisher of instructional materials may not, before the second anniversary of the date on which the person last served as a member of the State Board of Education: (1) confer with a member of the board of trustees of a school district concerning instructional materials [a textbook] published by that [textbook] publisher; or (2) appear at a meeting of the board of trustees on behalf of the [textbook] publisher. SECTION 2D.07. Subdivision (2), Subsection (c), Section 7.112, Education Code, is amended to read as follows: (2) "Instructional material" and "publisher" ["Publisher" and "textbook"] have the meanings assigned by Section 31.002. SECTION 2D.08. Subsection (b), Section 11.158, Education Code, is amended to read as follows: (b) The board may not charge fees for: (1) instructional materials [textbooks], workbooks, laboratory supplies, or other supplies necessary for participation in any instructional course except as authorized under this code; (2) field trips required as a part of a basic education program or course; (3) any specific form of dress necessary for any required educational program or diplomas; (4) the payment of instructional costs for necessary school personnel employed in any course or educational program required for graduation; (5) library materials [books] required to be used for any educational course or program, other than fines for lost, damaged, or overdue materials [books]; (6) admission to any activity the student is required to attend as a prerequisite to graduation; (7) admission to or examination in any required educational course or program; or (8) lockers. SECTION 2D.09. Subsection (a), Section 11.164, Education Code, is amended to read as follows: (a) The board of trustees of each school district shall limit redundant requests for information and the number and length of written reports that a classroom teacher is required to prepare. A classroom teacher may not be required to prepare any written information other than: (1) any report concerning the health, safety, or welfare of a student; (2) a report of a student's grade on an assignment or examination; (3) a report of a student's academic progress in a class or course; (4) a report of a student's grades at the end of each grade reporting period; (5) a [textbook] report on instructional materials; (6) a unit or weekly lesson plan that outlines, in a brief and general manner, the information to be presented during each period at the secondary level or in each subject or topic at the elementary level; (7) an attendance report; (8) any report required for accreditation review; (9) any information required by a school district that relates to a complaint, grievance, or actual or potential litigation and that requires the classroom teacher's involvement; or (10) any information specifically required by law, rule, or regulation. SECTION 2D.10. Subsection (e), Section 19.007, Education Code, is amended to read as follows: (e) The district may participate in the instructional materials [textbook] program under Chapter 31. SECTION 2D.11. Subsections (a) and (c), Section 26.006, Education Code, are amended to read as follows: (a) A parent is entitled to: (1) review all teaching materials, instructional materials [textbooks], and other teaching aids used in the classroom of the parent's child; and (2) review each test administered to the parent's child after the test is administered. (c) A student's parent is entitled to request that the school district or open-enrollment charter school the student attends allow the student to take home any instructional materials [textbook] used by the student. Subject to the availability of the instructional materials [a textbook], the district or school shall honor the request. A student who takes home instructional materials [a textbook] must return the instructional materials [textbook] to school at the beginning of the next school day if requested to do so by the student's teacher. In this subsection, "instructional material" ["textbook"] has the meaning assigned by Section 31.002. SECTION 2D.12. Subsections (c) and (h), Section 28.002, Education Code, are amended to read as follows: (c) The State Board of Education, with the direct participation of educators, parents, business and industry representatives, and employers shall by rule identify the essential knowledge and skills of each subject of the required curriculum that all students should be able to demonstrate and that will be used in evaluating instructional materials [textbooks] under Chapter 31 and addressed on the assessment instruments required under Subchapter B, Chapter 39. As a condition of accreditation, the board shall require each district to provide instruction in the essential knowledge and skills at appropriate grade levels. (h) The State Board of Education and each school district shall foster the continuation of the tradition of teaching United States and Texas history and the free enterprise system in regular subject matter, [and] in social studies, economics, and reading courses, and in the adoption of instructional materials [textbooks]. A primary purpose of the public school curriculum is to prepare thoughtful, active citizens who understand the importance of patriotism and can function productively in a free enterprise society with appreciation for the basic democratic values of our state and national heritage. SECTION 2D.13. The heading to Chapter 31, Education Code, is amended to read as follows:
CHAPTER 31. INSTRUCTIONAL MATERIALS [TEXTBOOKS]
SECTION 2D.14. Section 31.001, Education Code, is amended to read as follows: Sec. 31.001. FREE INSTRUCTIONAL MATERIALS [TEXTBOOKS]. Instructional materials [Textbooks] selected for use in the public schools shall be furnished without cost to the students attending those schools. SECTION 2D.15. Section 31.002, Education Code, is amended to read as follows: Sec. 31.002. DEFINITIONS. In this chapter: (1) "Instructional material" ["Electronic textbook"] means a medium or a combination of media for conveying information to a student. The term includes a book, supplementary materials, a combination of a book, workbook, supplementary materials, computer software, [interactive videodisc,] magnetic media, DVD, CD-ROM, computer courseware, on-line services, or an electronic medium, or other means of conveying information to the student or otherwise contributing to the learning process through electronic means. (2) "Publisher" means a person who prepares, manufactures, or distributes instructional materials for sale or distribution to public schools. The term includes an on-line service or a developer or distributor of [an] electronic instructional materials [textbook]. (3) "State-adopted" means adopted by the State Board of Education under Section 31.024 ["Textbook" means a book, a system of instructional materials, or a combination of a book and supplementary instructional materials that conveys information to the student or otherwise contributes to the learning process, or an electronic textbook]. (4) "Technological equipment" means hardware, a device, or equipment necessary for: (A) instructional use in the classroom, including to gain access to or enhance the use of [an] electronic instructional materials [textbook]; or (B) professional use by a classroom teacher. SECTION 2D.16. Section 31.003, Education Code, is amended to read as follows: Sec. 31.003. RULES. The State Board of Education may adopt rules, consistent with this chapter, for the adoption, requisition, distribution, care, use, and disposal of instructional materials [textbooks]. SECTION 2D.17. Subchapter B, Chapter 31, Education Code, is amended by amending Section 31.021 as amended by S.B. No. 151, Acts of the 79th Legislature, Regular Session, 2005, and Sections 31.022, 31.023, 31.024, and 31.026 through 31.030 and adding Sections 31.0211, 31.0212, 31.0221, 31.032, and 31.033 to read as follows: Sec. 31.021. STATE INSTRUCTIONAL MATERIALS [TEXTBOOK] FUND. (a) The state instructional materials [textbook] fund consists of: (1) an amount set aside by the State Board of Education from the available school fund, computed in accordance with this section; and (2) [all funds accruing from the state's sale of disused textbooks; and [(3)] all amounts lawfully paid into the fund from any other source. (b) The State Board of Education shall annually set aside out of the available school fund of the state an amount sufficient for the instructional materials allotment to provide [board,] school districts[,] and open-enrollment charter schools with the funds required to purchase and distribute the necessary state-adopted instructional materials [textbooks] for the use of the students of this state for the following school year. The board shall determine the amount of the available school fund to set aside for the state instructional materials [textbook] fund based on the amount of the allotment under Section 31.0211 and on reports of maximum attendance and anticipated enrollment growth submitted under Section 31.103[: [(1) a report by the commissioner issued on July 1 or, if that date is a Saturday or Sunday, on the following Monday, stating the amount of unobligated money in the fund; [(2) the commissioner's estimate, based on textbooks selected under Section 31.101 and on attendance reports submitted under Section 31.103 by school districts and open-enrollment charter schools, of the amount of funds, in addition to funds reported under Subdivision (1), that will be necessary for purchase and distribution of textbooks for the following school year; and [(3) any amount the board determines should be set aside for emergency purposes caused by unexpected increases in attendance]. (c) This subsection applies only if the pilot project established under Section 54.2161 is implemented, and expires August 15, 2009. In addition to the amount set aside under Subsection (b), the State Board of Education shall annually set aside out of the available school fund an amount sufficient for each school district with one or more students entitled to free textbooks under the pilot project established under Section 54.2161 to pay the costs of those textbooks as required by Section 31.031 for the following school year. The board shall determine the amount of the available school fund to set aside for the state textbook fund for purposes of this subsection based on the commissioner's estimate of the amount that will be necessary to pay the costs of textbooks as required under Section 31.031. (d) Money transferred to the state instructional materials [textbook] fund remains in the fund until spent and does not lapse to the state at the end of the fiscal year. [(e) All necessary expenses incurred under this chapter shall be paid from the state textbook fund on invoices approved by the commissioner.] Sec. 31.0211. INSTRUCTIONAL MATERIALS ALLOTMENT. (a) For the maximum attendance and anticipated enrollment growth reported under Section 31.103 in a school year, a school district is entitled to an annual allotment of $70 for each student or a greater amount provided by appropriation, to be paid from the state instructional materials fund. The commissioner may determine for each district the amount of anticipated enrollment growth for which an allotment is provided under this subsection. (b) Funds allotted under this section may be used only to purchase: (1) state-adopted instructional materials; or (2) instructional materials authorized by commissioner waiver. (c) This section applies beginning with the 2007-2008 school year. This subsection expires September 1, 2008. Sec. 31.0212. INSTRUCTIONAL MATERIALS ALLOTMENT FOR JUVENILE JUSTICE ALTERNATIVE EDUCATION PROGRAMS. (a) Notwithstanding any other provision of this chapter, a juvenile justice alternative education program operating under Section 37.011 is entitled to receive an instructional materials allotment under Section 31.0211 to be used in purchasing state-adopted instructional materials as if the program were a school district or open-enrollment charter school. (b) The State Board of Education, in coordination with the Texas Juvenile Probation Commission, shall adopt rules as necessary to administer this section. (c) Notwithstanding Section 31.0211(c), a juvenile justice alternative education program operating under Section 37.011 is entitled to the annual allotment described by Section 31.0211(a) beginning with the 2005-2006 school year. This subsection expires September 1, 2008. Sec. 31.022. INSTRUCTIONAL MATERIALS [TEXTBOOK] REVIEW AND ADOPTION CYCLE. (a) The State Board of Education shall adopt a review and adoption cycle for instructional materials [textbooks] for elementary grade levels, including prekindergarten, and secondary grade levels, for each subject in the required curriculum under Section 28.002. (b) The board shall organize the cycle for subjects in the foundation curriculum so that not more than one-sixth of the instructional materials [textbooks] for subjects in the foundation curriculum are reviewed each year. The board shall adopt rules to provide for a full and complete investigation of instructional materials [textbooks] for each subject in the foundation curriculum at least every six years. The adoption of instructional materials [textbooks] for a subject in the foundation curriculum may be extended beyond the six-year period only if the content of instructional materials [textbooks] for a subject is sufficiently current. (c) The board shall adopt rules to provide for a full and complete investigation of instructional materials [textbooks] for each subject in the enrichment curriculum on a cycle the board considers appropriate, but not less than every eight years. (d) At least 24 months before the beginning of the school year for which instructional materials [textbooks] for a particular subject and grade level will be purchased under the review and adoption cycle adopted by the board, the board shall publish notice of the review and adoption cycle for those instructional materials [textbooks]. (e) In organizing the cycle for review and adoption of instructional materials, the board shall: (1) generally align the cycle with the schedule for any revision of the essential knowledge and skills under Section 28.002 of the subjects and grade levels addressed by the instructional materials; (2) seek advice from the Legislative Budget Board and the governor's office of budget, planning, and policy before approving and publishing any notice or amendment of the cycle; (3) review and consider expected average costs of the instructional materials that will be adopted and the amount of the instructional materials allotment to ensure that the amount of the instructional materials that will be adopted over a two-year period may be purchased within the amount of the instructional material allotment for that same period; and (4) follow any directive provided in the General Appropriations Act regarding the organization of the cycle. (f) In addition to organizing a review and adoption cycle, the board by rule shall allow an instructional material to be submitted, reviewed, and adopted at a time when the subject or grade level is not scheduled in the cycle to be considered for at least two years, in conformance with the procedures for adoption of other state-adopted instructional materials. The board shall place each instructional material submitted under this subsection and adopted under Section 31.024 on an applicable list under Section 31.023. Sec. 31.0221. CORRECTION OF FACTUAL ERRORS. (a) To promote efficiency in the correction of factual errors during the instructional materials review and adoption process, the State Board of Education shall: (1) to the extent practicable, conduct the review of instructional materials using page proofs or other appropriate draft versions of the instructional materials; and (2) require the publisher to provide instructional materials, including page proofs, draft versions, or sample instructional materials, directly to state instructional materials review panel members in a timely manner before the members meet to conduct a complete and formal review of the materials. (b) During the instructional materials review and adoption process, the publisher of instructional materials proposed for adoption in this state shall promptly correct any factual errors discovered in the instructional materials. For purposes of this section, a factual error includes an objectively verifiable mistake, including an incorrect reference to a date, place, or person, an incorrect computational process or result, or similar incorrect provisions. A factual error does not include a difference in professional opinion, conclusion, emphasis, or perspective expressed in instructional materials. (c) If the State Board of Education determines that an instructional material proposed for adoption may contain a factual error, the State Board of Education may appoint a panel of experts and scholars to evaluate the material for any factual error. (d) The board shall adopt rules authorizing the imposition of an administrative penalty in the manner provided by Section 31.151 against a publisher who knowingly violates Subsection (b). In setting the amount of any penalty to be imposed under this subsection, the board shall consider the stage of the instructional materials review and adoption process at which the violation occurs and set progressively higher penalties for violations that occur later in the process. Sec. 31.023. [TEXTBOOK] LISTS OF STATE-ADOPTED INSTRUCTIONAL MATERIALS. (a) For each subject and grade level, the State Board of Education shall adopt two lists of instructional materials [textbooks]. The conforming list includes each state-adopted instructional material [textbook] submitted for the subject and grade level that meets applicable physical specifications adopted by the State Board of Education and contains material covering each element of the essential knowledge and skills of the subject and grade level as determined by the State Board of Education under Section 28.002 and adopted under Section 31.024. The nonconforming list includes each state-adopted instructional material [textbook] submitted for the subject and grade level that: (1) meets applicable physical specifications adopted by the State Board of Education; (2) contains material covering at least half, but not all, of the elements of the essential knowledge and skills of the subject and grade level; and (3) is adopted under Section 31.024. (b) Each state-adopted instructional material [textbook] on a conforming or nonconforming list must be free from factual errors. Sec. 31.024. ADOPTION BY STATE BOARD OF EDUCATION. (a) By majority vote, the State Board of Education shall: (1) place each submitted instructional material [textbook] on a conforming or nonconforming list; or (2) reject an instructional material [a textbook] submitted for placement on a conforming or nonconforming list. (b) Not later than December 1 of the year preceding the school year for which the state-adopted instructional materials [textbooks] for a particular subject and grade level will be purchased under the cycle adopted by the board under Section 31.022, the board shall make available [provide] the lists of state-adopted instructional materials, including instructional materials under Section 31.022(f) [adopted textbooks] to each school district. Each nonconforming list must include: (1) the reasons an adopted instructional material [textbook] is not eligible for the conforming list; and (2) a list of the essential knowledge and skills contained in an adopted instructional material on the nonconforming list. Sec. 31.026. CONTRACT; PRICE. (a) The commissioner, with the assistance of the Department of Information Resources, the State Board of Education, and the office of the attorney general, shall develop model contracts that may be used by school districts and open-enrollment charter schools [State Board of Education shall execute a contract: [(1)] for the purchase or licensing of instructional materials under this chapter [each adopted textbook other than an electronic textbook; and [(2) for the purchase or licensing of each adopted electronic textbook]. (b) A contract must require the publisher to provide all of the instructional materials [the number of textbooks] required by school districts in this state for the term of the contract[, which must coincide with the board's adoption cycle]. (c) As applicable, a contract must provide for the purchase or licensing of instructional materials [a textbook] at a specific price, which may not exceed the lowest price paid by any other state or any school or school district. The price must be fixed for the term of the contract. The price may decrease if the lowest price paid by another state or another school or school district decreases during the term of the contract. Sec. 31.027. INFORMATION TO SCHOOL DISTRICTS; SAMPLE COPIES. (a) A publisher shall provide each school district and open-enrollment charter school with information that fully describes each of the publisher's state-adopted instructional materials [adopted textbooks]. On request of a school district, a publisher shall provide a sample copy of a state-adopted instructional material [an adopted textbook]. (b) A publisher shall provide at least two sample copies of each state-adopted instructional material [adopted textbook] to be maintained for at least two years at each regional education service center or an alternate location designated by the applicable service center. Sec. 31.028. SPECIAL INSTRUCTIONAL MATERIALS [TEXTBOOKS]. (a) The State Board of Education may make available [purchase] special instructional materials [textbooks] for the education of blind and visually impaired students in public schools. In addition, from funds appropriated for the purpose, for a teacher who is blind or visually impaired, the board shall provide a teacher's edition in Braille or large type, as requested by the teacher, for each printed state-adopted instructional material [textbook] the teacher uses in the instruction of students. The teacher edition must be available at the same time the student instructional materials [textbooks] become available. (b) The publisher of a printed state-adopted instructional material [an adopted textbook] shall provide the agency with computerized [textbook] files for the production of Braille instructional materials [textbooks] or other versions of instructional materials [textbooks] to be used by students with disabilities, on request of the State Board of Education. A publisher shall arrange the computerized [textbook] files in one of several optional formats specified by the State Board of Education. (c) The board may also enter into agreements providing for the acceptance, requisition, and distribution of special instructional materials [textbooks and instructional aids] pursuant to 20 U.S.C. Section 101 et seq. for use by students enrolled in: (1) public schools; or (2) private nonprofit schools, if state funds, other than for administrative costs, are not involved. (c-1) The board shall require electronic instructional materials included on the conforming list and nonconforming list under Section 31.023 to comply with the standards established under Section 508, Rehabilitation Act of 1973 (29 U.S.C. Section 794d), if the materials are for use by students enrolled in: (1) public schools; or (2) private nonprofit schools, if state funds, other than for administrative costs, are not involved. (d) In this section: (1) "Blind or visually impaired student" includes any student whose visual acuity is impaired to the extent that the student is unable to read the text [print] in state-adopted instructional materials [a regularly adopted textbook] used in the student's class. (2) "Special instructional materials" [textbook"] means instructional materials [a textbook] in Braille, large type, audiotape, accessible web page, accessible DVD/CD-ROM, or any other medium or any apparatus that conveys information to a student or otherwise contributes to the learning process. Sec. 31.029. BILINGUAL INSTRUCTIONAL MATERIALS [TEXTBOOKS]. The board shall adopt instructional materials [purchase or otherwise acquire textbooks] for use in bilingual education classes. Sec. 31.030. USED INSTRUCTIONAL MATERIALS [TEXTBOOKS]. The State Board of Education shall adopt rules to ensure that used instructional materials [textbooks] sold to school districts and open-enrollment charter schools are not sample copies that contain factual errors. The rules may provide for the imposition of an administrative penalty in accordance with Section 31.151 against a seller of used instructional materials [textbooks] who knowingly violates this section. Sec. 31.032. SUBSCRIPTION-BASED ELECTRONIC INSTRUCTIONAL MATERIALS. The publisher of a state-adopted electronic instructional material may offer the material to school districts and open-enrollment charter schools on a subscription basis. Sec. 31.033. UPDATES. The publisher of a state-adopted instructional material may update the instructional material, and a school district or open-enrollment charter school may purchase the update. The State Board of Education by rule shall provide for an expedited review process to determine the extent to which updated instructional material aligns with the essential knowledge and skills and does not contain factual errors. SECTION 2D.18. Section 31.101, Education Code, is amended to read as follows: Sec. 31.101. SELECTION AND PURCHASE OF INSTRUCTIONAL MATERIALS [TEXTBOOKS] BY SCHOOL DISTRICTS. (a) Each year, during any [a] period established by the State Board of Education, the board of trustees of each school district and the governing body of each open-enrollment charter school shall: (1) [for a subject in the foundation curriculum,] notify the State Board of Education of the state-adopted instructional materials [textbooks] selected by the board of trustees or governing body for the following school year from among the instructional materials [textbooks] on the appropriate conforming or nonconforming list; and [or] (2) provide an accounting of the expenditure of its instructional materials allotment during that period [for a subject in the enrichment curriculum: [(A) notify the State Board of Education of each textbook selected by the board of trustees or governing body for the following school year from among the textbooks on the appropriate conforming or nonconforming list; or [(B) notify the State Board of Education that the board of trustees or governing body has selected a textbook that is not on the conforming or nonconforming list]. (b) The board of trustees of each [If a] school district or the governing body of each open-enrollment charter school shall use the instructional materials allotment to purchase instructional materials selected by the board of trustees or the governing body [selects a textbook] for a [particular] subject in the required [enrichment] curriculum [and grade level that is not on the conforming or nonconforming list, the state shall pay to the district or school an amount equal to the lesser of: [(1) 70 percent of the cost to the district of the textbook, multiplied by the number of textbooks the district or school needs for that subject and grade level; or [(2) 70 percent of the limitation established under Section 31.025 for a textbook for that subject and grade level, multiplied by the number of textbooks the district or school needs for that subject and grade level]. (c) A school district or open-enrollment charter school may purchase an instructional material under Subsection (b) only if the instructional material is purchased not later than the beginning of the second school year that begins after the adoption of the conforming or nonconforming list that includes the instructional material. This subsection does not apply to: (1) instructional materials under Section 31.022(f); (2) the purchase of replacement instructional materials due to loss or damage; or (3) the purchase of additional instructional materials needed because of enrollment growth [that selects a textbook that is not on the conforming or nonconforming list: [(1) is responsible for the portion of the cost of the textbook that is not paid by the state under Subsection (b); and [(2) may use funds received from the state under Subsection (b) only for purchasing the textbook for which the funds were received]. [(d) For a textbook that is not on the conforming or nonconforming list, a school district or open-enrollment charter school must use the textbook for the period of the review and adoption cycle the State Board of Education has established for the subject and grade level for which the textbook is used.] SECTION 2D.19. Section 31.102, Education Code, is amended to read as follows: Sec. 31.102. TITLE AND CUSTODY. (a) Except as provided by this subsection, each instructional material [Each textbook] purchased by the state as provided by this chapter is the property of this state. Beginning with the 2007-2008 school year, each instructional material purchased through the instructional materials allotment by a school district or open-enrollment charter school is the property of the district or charter school. (b) Subsection (a) applies to an electronic instructional material [textbook] only to the extent of any applicable licensing agreement. (c) The board of trustees of a school district or the governing body of an open-enrollment charter school is the legal custodian of instructional materials [textbooks] purchased as provided by this chapter for or by the district or school. The board of trustees or governing body shall distribute instructional materials [textbooks] to students in the manner that the board or governing body determines is most effective and economical. (d) An open-enrollment charter school may not transfer instructional materials unless the transfer is approved by the commissioner. The commissioner may not approve such a transfer unless the transfer is to another public school of this state. SECTION 2D.20. Section 31.103, Education Code, is amended to read as follows: Sec. 31.103. INSTRUCTIONAL MATERIALS [TEXTBOOK] REQUISITIONS. (a) Not later than the seventh day after the first school day in April, each principal shall report the maximum attendance for the school to the superintendent. Not later than April 25, the superintendent of a school district or the chief operating officer of an open-enrollment charter school shall report to the commissioner the district's or school's maximum attendance and anticipated enrollment growth [to the commissioner]. (b) [A requisition for textbooks for the following school year shall be based on the maximum attendance reports under Subsection (a), plus an additional 10 percent, except as otherwise provided.] A school district or open-enrollment charter school shall make a requisition for instructional materials [a textbook] on the conforming or nonconforming list [through the commissioner] to the instructional materials [state] depository designated by the publisher or as provided by State Board of Education rule, as applicable, not later than June 1 of each year. The designated instructional materials [state] depository or, if the publisher [or manufacturer] does not have a designated instructional materials [textbook] depository in this state under Section 31.151(a)(6)(B), the publisher [or manufacturer] shall fill a requisition approved by the agency at any other time in the case of an emergency. [As made necessary by available funds, the commissioner shall reduce the additional percentage of attendance for which a district or school may requisition textbooks. The commissioner may, on application of a district or school that is experiencing high enrollment growth, increase the additional percentage of attendance for which the district or school may requisition textbooks.] (c) In making a requisition under this section, a school district or open-enrollment charter school may requisition instructional materials [textbooks] on the conforming or nonconforming list for grades above or below the grade level in which a student is enrolled[, except that the total quantity of textbooks requisitioned under this section may not exceed the limit prescribed by Subsection (b)]. SECTION 2D.21. Sections 31.104, 31.105, and 31.106, Education Code, are amended to read as follows: Sec. 31.104. DISTRIBUTION AND HANDLING. (a) The board of trustees of a school district or the governing body of an open-enrollment charter school may delegate to an employee the authority to requisition, purchase, distribute, and manage the inventory of instructional materials [textbooks] in a manner consistent with this chapter and rules adopted under this chapter. (b) A school district or open-enrollment charter school may order replacements for instructional materials [textbooks] that have been lost or damaged directly from: (1) the instructional materials [textbook] depository; or (2) the [textbook] publisher of the instructional materials [or manufacturer] if the [textbook] publisher [or manufacturer] does not have a designated instructional materials [textbook] depository in this state under Section 31.151(a)(6)(B). (c) Each instructional material [textbook] must state that the instructional material [textbook] is the property of or is licensed to this state, school district, or charter school, as appropriate. Each instructional material [textbook], other than an electronic instructional material [textbook], must be covered by the student under the direction of the teacher. A student must return all instructional materials [textbooks] to the teacher at the end of the school year or when the student withdraws from school. (d) Each student, or the student's parent or guardian, is responsible for each instructional material [textbook] not returned by the student. A student who fails to return all instructional materials [textbooks] forfeits the right to free instructional materials [textbooks] until each instructional material [textbook] previously issued but not returned is paid for by the student, parent, or guardian. As provided by policy of the board of trustees or governing body, a school district or open-enrollment charter school may waive or reduce the payment requirement if the student is from a low-income family. The district or school shall allow the student to use instructional materials [textbooks] at school during each school day. If an instructional material [a textbook] is not returned or paid for, the district or school may withhold the student's records. A district or school may not, under this subsection, prevent a student from graduating, participating in a graduation ceremony, or receiving a diploma. (e) The board of trustees of a school district may not require an employee of the district to pay for an instructional material [a textbook] or instructional technology that is stolen, misplaced, or not returned by a student. Sec. 31.105. SALE OF INSTRUCTIONAL MATERIALS [TEXTBOOKS]. The board of trustees of a school district or governing body of an open-enrollment charter school may sell instructional materials [textbooks], other than electronic instructional materials [textbooks], to a student or another school [at the state contract price]. The district shall use [send] money received from the sale of instructional materials in accordance with uses prescribed by Section 31.0211 [textbooks to the commissioner as required by the commissioner. The commissioner shall deposit the money in the state textbook fund]. Sec. 31.106. USE OF LOCAL FUNDS. In addition to any instructional materials [textbook] selected under this chapter, a school district or open-enrollment charter school may use local funds to purchase any instructional materials [textbooks]. SECTION 2D.22. The heading to Section 31.151, Education Code, is amended to read as follows: Sec. 31.151. DUTIES OF PUBLISHERS [AND MANUFACTURERS]. SECTION 2D.23. Subsection (a), (b), and (d), Section 31.151, Education Code, are amended to read as follows: (a) A publisher [or manufacturer] of instructional materials [textbooks]: (1) shall furnish any instructional material [textbook] the publisher [or manufacturer] offers in this state[,] at a price that does not exceed the lowest price at which the publisher offers that instructional material [textbook] for adoption or sale to any state, public school, or school district in the United States; (2) shall automatically reduce the price of an instructional material [a textbook] sold for use in a school district or open-enrollment charter school to the extent that the price is reduced elsewhere in the United States; (3) shall provide any instructional material [textbook] or ancillary item free of charge in this state to the same extent that the publisher [or manufacturer] provides the instructional material [textbook] or ancillary item free of charge to any state, public school, or school district in the United States; (4) shall guarantee that each copy of an instructional material [a textbook] sold in this state is at least equal in quality to copies of that instructional material [textbook] sold elsewhere in the United States and is free from factual error; (5) may not become associated or connected with, directly or indirectly, any combination in restraint of trade in instructional materials [textbooks] or enter into any understanding or combination to control prices or restrict competition in the sale of instructional materials [textbooks] for use in this state; (6) shall: (A) maintain a depository in this state or arrange with a depository in this state to receive and fill orders for instructional materials [textbooks], other than electronic instructional materials or electronic instructional material [on-line textbooks or on-line textbook] components, consistent with State Board of Education rules; or (B) deliver instructional materials [textbooks] to a school district or open-enrollment charter school without a delivery charge to the school district, open-enrollment charter school, or state, if: (i) the publisher [or manufacturer] does not maintain or arrange with a depository in this state under Paragraph (A) and the publisher's instructional materials [or manufacturer's textbooks] and related products are warehoused or otherwise stored less than 300 miles from a border of this state; or (ii) the instructional materials [textbooks] are electronic instructional materials or electronic instructional material [on-line textbooks or on-line textbook] components; (7) shall, at the time an order for instructional materials [textbooks] is acknowledged, provide to school districts or open-enrollment charter schools an accurate shipping date for instructional materials [textbooks] that are back-ordered; (8) shall guarantee delivery of instructional materials [textbooks] at least 10 business days before the opening day of school of the year for which the instructional materials [textbooks] are ordered if the instructional materials [textbooks] are ordered by a date specified in the sales contract; and (9) shall submit to the State Board of Education an affidavit certifying any instructional material [textbook] the publisher [or manufacturer] offers in this state to be free of factual errors at the time the publisher executes the contract required by Section 31.026. (b) The State Board of Education may impose a reasonable administrative penalty against a publisher [or manufacturer] who knowingly violates Subsection (a). The board shall provide for a hearing to be held to determine whether a penalty is to be imposed and, if so, the amount of the penalty. The board shall base the amount of the penalty on: (1) the seriousness of the violation; (2) any history of a previous violation; (3) the amount necessary to deter a future violation; (4) any effort to correct the violation; and (5) any other matter justice requires. (d) A penalty collected under this section shall be deposited to the credit of the state instructional materials [textbook] fund. SECTION 2D.24. The heading to Section 31.152, Education Code, is amended to read as follows: Sec. 31.152. ACCEPTING REBATE ON INSTRUCTIONAL MATERIALS [TEXTBOOKS]. SECTION 2D.25. Subsections (a), (b), and (d), Section 31.152, Education Code, are amended to read as follows: (a) A school trustee, administrator, or teacher commits an offense if that person receives any commission or rebate on any instructional materials [textbooks] used in the schools with which the person is associated as a trustee, administrator, or teacher. (b) A school trustee, administrator, or teacher commits an offense if the person accepts a gift, favor, or service that: (1) is given to the person or the person's school; (2) might reasonably tend to influence a trustee, administrator, or teacher in the selection of instructional materials [a textbook]; and (3) could not be lawfully purchased with funds from the state instructional materials [textbook] fund. (d) In this section, "gift, favor, or service" does not include: (1) staff development, in-service, or teacher training; or (2) instructional materials[,] such as maps or worksheets[, that convey information to the student or otherwise contribute to the learning process]. SECTION 2D.26. The heading to Section 31.153, Education Code, is amended to read as follows: Sec. 31.153. VIOLATION OF FREE INSTRUCTIONAL MATERIALS [TEXTBOOK] LAW. SECTION 2D.27. Subsection (a), Section 31.153, Education Code, is amended to read as follows: (a) A person commits an offense if the person knowingly violates any law providing for the purchase or distribution of free instructional materials [textbooks] for the public schools. SECTION 2D.28. Subchapter E, Chapter 31, Education Code, is amended to read as follows:
SUBCHAPTER E. DISPOSITION OF INSTRUCTIONAL MATERIALS [TEXTBOOKS]
Sec. 31.201. DISPOSITION OF INSTRUCTIONAL MATERIALS [TEXTBOOKS]. (a) The commissioner, with the approval of the State Board of Education, may provide for the disposition of: (1) instructional materials [textbooks], other than electronic instructional materials [textbooks], that are no longer in acceptable condition to be used for instructional purposes; or (2) discontinued instructional materials [textbooks], other than electronic instructional materials [textbooks]. (b) The commissioner, as provided by rules adopted by the State Board of Education, shall make available on request copies of discontinued instructional materials [textbooks], other than electronic instructional materials [textbooks], for use in libraries maintained in municipal and county jails and facilities of the institutional division of the Texas Department of Criminal Justice and other state agencies. (c) The State Board of Education shall adopt rules under which a school district or open-enrollment charter school may donate discontinued instructional materials [textbooks], other than electronic instructional materials [textbooks], to a student, to an adult education program, or to a nonprofit organization. SECTION 2D.29. The heading to Section 32.005, Education Code, is amended to read as follows: Sec. 32.005. INSTRUCTIONAL MATERIALS AND TECHNOLOGY ALLOTMENT. SECTION 2D.30. Subsection (a) and (b), Section 32.005, Education Code, are amended to read as follows: (a) For each student in average daily attendance in a school year, a [Each] school district or open-enrollment charter school is entitled to an allotment of $30 [for each student in average daily attendance] or a greater [different] amount for any year provided by appropriation, to be used as provided by Subsection (b). (b) An allotment under this section may be used [only] to: (1) provide for the purchase by school districts of systems or components of: (A) wireless electronic mobile computing devices or other technology devices that convey instruction; (B) productivity hardware or software, including writing, computation, presentation, and communication tools; (C) electronic learning software aligned with the essential skills and knowledge adopted by the State Board of Education under Section 28.002; (D) library and other research tools; (E) electronic assessment tools; (F) electronic learning tools to improve communications among students, teachers, school administrators, parents, and the community; (G) classroom and school management systems; and (H) portable electronic instructional material devices capable of supporting instructional material for each subject in the foundation and enrichment curriculum [electronic textbooks or technological equipment that contributes to student learning]; [and] (2) provide professional development for educational personnel responsible for direct instruction to integrate the tools and solutions described by Subdivision (1); and (3) acquire additional infrastructure and technologies necessary to support and enhance the tools and solutions described by Subdivision (1) [pay for training educational personnel directly involved in student learning in the appropriate use of electronic textbooks and for providing for access to technological equipment for instructional use]. SECTION 2D.31. Section 32.156, Education Code, as added by Chapter 1216, Acts of the 78th Legislature, Regular Session, 2003, is amended to read as follows: Sec. 32.156. ON-LINE INSTRUCTIONAL MATERIALS [TEXTBOOKS]. (a) The agency may develop and adopt strategies for making instructional materials [textbooks] available through the portal or through other means in an electronic format as an alternative or supplement to traditional instructional materials [textbooks]. (b) In developing and adopting strategies under this section, the agency shall seek to achieve a system under which a student may, in addition to [a] traditional instructional materials [textbook], be provided with secure Internet access to each instructional material [textbook] used by the student. SECTION 2D.32. Subsection (b), Section 32.161, Education Code, is amended to read as follows: (b) To the extent possible considering other statutory requirements, the commissioner and agency shall encourage the use of instructional materials [textbook] funds under Section 31.021 and technology allotment funds under Section 32.005 [31.021(b)(2)] in a manner that facilitates the development and use of the portal. SECTION 2D.33. Section 31.0221, Education Code, as added by this part, applies only to instructional materials submitted for review by the State Board of Education on or after the effective date of this Act. Instructional materials submitted for review before the effective date of this Act are governed by the law in effect when the instructional materials were submitted for review, and the former law is continued in effect for that purpose. SECTION 2D.34. (a) This section applies to an instructional material, as that term is defined by Section 31.002, Education Code, as amended by this part, including an electronic instructional material, adopted by the State Board of Education before January 1, 2005. (b) A contract for the purchase or licensing of an instructional material described by Subsection (a) of this section continues in effect as a state contract for the contract term, and the former law is continued in effect for that purpose.
PART E. DUAL LANGUAGE EDUCATION
SECTION 2E.01. Subchapter B, Chapter 21, Education Code, is amended by adding Sections 21.0485 and 21.0486 to read as follows: Sec. 21.0485. DUAL LANGUAGE EDUCATION TEACHER CERTIFICATION. (a) To ensure that there are teachers with special training to work with other teachers and with students in a dual language education program, the board shall establish a dual language education teaching certificate. (b) The board shall propose rules establishing the training requirements, including the minimum academic qualifications, a person must accomplish to obtain a certificate under this section. (c) The board shall propose rules establishing the requirements for a teacher who receives training in a foreign country to obtain a certificate under this section. Sec. 21.0486. MASTER LANGUAGE TEACHER CERTIFICATION. (a) To ensure that there are teachers with special training to work with other teachers and with students in order to improve student performance in English and other languages, the board shall establish: (1) a master language teacher certificate to teach bilingual education, dual language instruction, or English as a second language at elementary school grade levels; (2) a master language teacher certificate to teach bilingual education, dual language instruction, or English as a second language at middle school grade levels; and (3) a master language teacher certificate to teach dual language instruction at high school grade levels. (b) The board shall issue the appropriate master language teacher certificate to each eligible person. (c) To be eligible for a master language teacher certificate, a person must: (1) hold a teaching certificate issued under this subchapter; (2) have at least three years of experience teaching bilingual education, dual language instruction, or English as a second language; (3) satisfactorily complete a knowledge-based course of instruction on second language acquisition and the science of teaching children language that includes training in language instruction and professional peer mentoring techniques that, through scientific testing, have been proven effective; (4) perform satisfactorily on the appropriate master language certification examination prescribed by the board; and (5) satisfy any other requirements prescribed by the board. SECTION 2E.02. Subsection (b), Section 21.050, Education Code, is amended to read as follows: (b) The board may not require more than 18 semester credit hours of education courses at the baccalaureate level for the granting of a teaching certificate. The board shall provide for a minimum number of semester credit hours of internship to be included in the hours needed for certification. The board may propose rules requiring additional credit hours for certification in bilingual education, dual language instruction, English as a second language, early childhood education, or special education. SECTION 2E.03. Section 21.054, Education Code, is amended by adding Subsection (c) to read as follows: (c) Rules proposed under Subsection (a) must permit an educator to fulfill continuing education requirements by acquiring conversational skills in one or more languages other than English and academic language development in the subject area for which the educator provides instruction. The rules must permit educators to obtain language instruction through a variety of methods, including attendance at workshops offered by qualified entities and enrollment on a noncredit basis in courses offered by public or private colleges and universities. SECTION 2E.04. Subchapter B, Chapter 21, Education Code, is amended by adding Section 21.060 to read as follows: Sec. 21.060. NOTICE OF EDUCATIONAL AIDE TUITION EXEMPTION. On issuing an educator certificate to an educational aide or renewing such a certificate, the board shall notify the person to whom the certificate is issued of the existence of the educational aide exemption under Section 54.214. SECTION 2E.05. Section 28.0051, Education Code, is amended by adding Subsection (d) to read as follows: (d) The State Board for Educator Certification shall provide for the issuance of teaching certificates appropriate for dual language instruction to teachers who: (1) possess a speaking, reading, and writing language ability in a language other than English in which a dual language immersion program is offered; and (2) meet the general requirements of Subchapter B, Chapter 21. SECTION 2E.06. Subchapter A, Chapter 28, Education Code, is amended by adding Section 28.0052 to read as follows: Sec. 28.0052. DUAL LANGUAGE EDUCATION PILOT PROJECT. (a) The commissioner shall establish a pilot project in school districts selected by the commissioner under which the agency examines dual language education programs and the effect of those programs on a student's ability to graduate from high school. (b) In selecting school districts under Subsection (a), the commissioner shall: (1) select districts that: (A) will commit to at least a three-year dual language education program; and (B) demonstrate a substantially equal enrollment of students with limited English proficiency and students whose primary language is English or, if a district does not have a sufficient number of limited English proficiency students to meet the equal enrollment standard, include the enrollment of students with limited English proficiency, students whose primary language is English, and bilingual students; and (2) give preference to a district that: (A) demonstrates the potential for expanding the program through middle school; and (B) will implement the program at the kindergarten level. (c) The commissioner by rule shall require a district to limit activities of the dual language education program during the first year of the program to planning activities, including: (1) hiring and training teachers and ensuring teacher certification; (2) establishing parental and community support for the program; and (3) acquiring adequate learning materials in both program languages. (d) From amounts appropriated for the purpose, the commissioner shall award grants to school districts that participate in the program. A grant under this section must be in an amount sufficient to pay the costs to the district of participating in the program, as determined by the commissioner. A determination of the commissioner under this subsection is final and may not be appealed. (e) A school district that applies for the expansion of an existing dual language education program is eligible for a grant under Subsection (d). (f) A school district may use a grant awarded under Subsection (d) for: (1) classroom materials; (2) tuition and textbook expenses for students seeking teacher certification under Section 21.0485; and (3) other necessary costs of operating the program, as approved by the commissioner. (g) The agency shall report to the legislature describing the agency's activities under the pilot project, the effect of the project on grade-level completion, and the recommendations arising from the project. The agency shall submit an interim report under this subsection not later than January 1, 2009, and a final report not later than January 1, 2011. (h) This section expires August 1, 2011. SECTION 2E.07. Not later than January 1, 2006, the State Board for Educator Certification shall propose rules: (1) establishing requirements and prescribing an examination for master language teacher certification as required by Section 21.0486, Education Code, as added by this Act; (2) establishing requirements and prescribing an examination for dual language instruction teacher certification as required by Subsection (b), Section 21.050, Education Code, as amended by this Act, and Subsection (d), Section 28.0051, Education Code, as added by this Act; and (3) permitting an educator to fulfill continuing education requirements by acquiring conversational skill in a language other than English as required by Subsection (c), Section 21.054, Education Code, as added by this Act.
PART F. STATE AND REGIONAL GOVERNANCE
SECTION 2F.01. Section 7.004, Education Code, is amended to read as follows: Sec. 7.004. SUNSET PROVISION. (a) The Texas Education Agency is subject to Chapter 325, Government Code (Texas Sunset Act). Unless continued in existence as provided by that chapter, the agency is abolished September 1, 2017 [2005]. (b) A review conducted under Chapter 325, Government Code (Texas Sunset Act), in accordance with this section must include a review of the regional education service centers under Chapter 8. SECTION 2F.02. Subchapter A, Chapter 7, Education Code, is amended by adding Section 7.010 to read as follows: Sec. 7.010. BEST PRACTICES. (a) Using existing funds and other resources available for the purpose, the agency and the regional education service centers shall solicit and collect from exemplary or recognized school districts and open-enrollment charter schools, as rated under Section 39.072, best practices information and shall disseminate that information. The agency and the regional education service centers shall enter into a memorandum of understanding that establishes the respective duties of the agency and the regional education service centers in soliciting, collecting, and disseminating the best practices information. (b) The best practices information may include: (1) information concerning available programs, products, and policies that have been successfully adopted or developed and used by school districts or open-enrollment charter schools; (2) specific examples of successful best practices; and (3) resources available to assist school districts and open-enrollment charter schools in complying with applicable state or federal education laws. (c) The best practices information must include information collected by the agency or a regional education service center concerning the effective use of online courses, including: (1) methods for using online courses to provide curriculum solutions; (2) information to assist school districts and open-enrollment charter schools in investigating the quality of online courses; and (3) a list of funding sources available for various types of online courses. (d) The agency and the regional education service centers are not required to evaluate and may not endorse the best practices information collected under this section. (e) The agency and the regional education service centers shall develop incentives for school districts and open-enrollment charter schools to implement best practices. SECTION 2F.03. Subchapter B, Chapter 7, Education Code, is amended by adding Section 7.0211 to read as follows: Sec. 7.0211. GIFTS, GRANTS, OR DONATIONS. The agency may receive gifts, grants, or donations from any public or private source to perform any educational function the agency is authorized to perform by law. SECTION 2F.04. Section 7.027, Education Code, as added by Chapter 201, Acts of the 78th Legislature, Regular Session, 2003, is redesignated as Section 7.028, Education Code, and amended to read as follows: Sec. 7.028 [7.027]. LIMITATION ON COMPLIANCE MONITORING. (a) Except as provided by Section 29.001(5), 29.010(a), [39.074,] or 39.075, the agency may monitor compliance with requirements applicable to a process or program provided by a school district, campus, program, or school granted charters under Chapter 12, including the process described by Subchapter F, Chapter 11, or a program described by Subchapter B, C, D, E, F, H, or I, Chapter 29, Subchapter A, Chapter 37, or Section 38.003, and the use of funds provided for such a program under Subchapter C, Chapter 42, only as necessary to ensure: (1) compliance with federal law and regulations; (2) financial accountability, including compliance with grant requirements; and (3) data integrity for purposes of: (A) the Public Education Information Management System (PEIMS); and (B) accountability under Chapter 39. (b) The board of trustees of a school district or the governing body of an open-enrollment charter school has primary responsibility for ensuring that the district or school complies with all applicable requirements of state educational programs. SECTION 2F.05. Subchapter B, Chapter 7, Education Code, is amended by adding Section 7.033 to read as follows: Sec. 7.033. COMPREHENSIVE MONITORING SYSTEM. To the extent permissible under Section 7.028, the agency shall develop and implement a comprehensive, integrated monitoring system for monitoring school district and charter school overall performance under and compliance with federal and state education laws. The system must incorporate performance and compliance information collected by various agency divisions for each school district and charter school, including information relating to: (1) data integrity; (2) the performance of district or school programs; (3) financial accountability; (4) academic accountability; (5) previous history of compliance; (6) complaints issues; and (7) governance issues. SECTION 2F.06. Subsection (a) and (d), Section 7.057, Education Code, are amended to read as follows: (a) Except as provided by Subsection (e) or Section 7.0571, a person may appeal in writing to the commissioner if the person is aggrieved by: (1) the school laws of this state; or (2) actions or decisions of any school district board of trustees that violate: (A) the school laws of this state; or (B) a provision of a written employment contract between the school district and a school district employee, if a violation causes or would cause monetary harm to the employee. (d) Except as provided by Section 7.0571, a [A] person aggrieved by an action of the agency or decision of the commissioner may appeal to a district court in Travis County. An appeal must be made by serving the commissioner with citation issued and served in the manner provided by law for civil suits. The petition must state the action or decision from which the appeal is taken. At trial, the court shall determine all issues of law and fact, except as provided by Section 33.081(g). SECTION 2F.07. Subchapter C, Chapter 7, Education Code, is amended by adding Section 7.0571 to read as follows: Sec. 7.0571. INFORMAL REVIEW BY COMMISSIONER. (a) The commissioner shall adopt rules under which a school district, open-enrollment charter school, or other person that wishes to challenge an agency decision made under Chapter 39, 41, 42, or 46 must petition the commissioner for an informal review by the commissioner of the decision. (b) The commissioner may limit a review under this section to a written submission of any issue identified by the commissioner. (c) A final decision under this section is final and may not be appealed under Section 7.057 or any other law. SECTION 2F.08. Chapter 7, Education Code, is amended by adding Subchapter E to read as follows:
SUBCHAPTER E. PERFORMANCE-BASED GRANT SYSTEM
Sec. 7.151. PERFORMANCE-BASED GRANT SYSTEM. (a) The agency shall implement a comprehensive performance-based grant system to collect and report grant performance and spending information and to use that information in making future grants. (b) The grant system must: (1) connect grant activities and funding to student academic performance; and (2) provide for efficient grant application and reporting procedures for grant programs administered by the agency. Sec. 7.152. GRANT PROGRAM PROCEDURES. The agency shall ensure that: (1) the mission, purpose, and objectives of each agency grant program support student academic performance or another public education mission, objective, or goal specified under Sections 4.001 and 4.002; (2) each agency grant program coordinates with other grant programs administered by the agency; (3) grant programs with similar objectives have common performance measures; and (4) the most efficient methods for coordinating grant objectives, grant activities, academic performance measures, and funding are used in the agency's grant application and reporting systems. Sec. 7.153. GRANT ELIGIBILITY NOTIFICATION. The agency may use existing data to identify and notify an eligible school district or charter school of the opportunity to apply for a state-funded discretionary grant. Sec. 7.154. APPLICATION FOR STATE-FUNDED FORMULA GRANTS. The agency shall develop one or more consolidated applications to be used by school districts and charter schools in applying for any state-funded formula grant administered by the agency. Sec. 7.155. AVAILABILITY OF GRANT INFORMATION. The agency shall ensure that information relating to the grant system is available to the legislature and the public. Sec. 7.156. BEST PRACTICES GRANT INFORMATION. (a) The agency, in coordination with regional education service centers, shall use data relating to grant programs, including grant spending and performance information, to identify successful grant programs. Based on the identification of successful grant programs, each regional education service center shall provide information concerning those programs to the school districts in the service center's region. (b) This section applies beginning with the 2009-2010 school year. This subsection expires June 1, 2010. Sec. 7.157. DEVELOPMENT OF GRANT SYSTEM. (a) In developing the performance-based grant system, the agency shall: (1) identify each area of data collected for grant programs and the method in which the agency collects the data; (2) determine whether grant data that a school district or charter school is required to collect is useful and supports: (A) a grant program's objectives; and (B) the goals for academic performance and accountability or another public education mission, objective, or goal; (3) determine whether grant data is analyzed and disseminated efficiently; and (4) review the agency's policies, procedures, and reporting requirements relating to grant programs administered by the agency to simplify and make more efficient the grant application, award, and reporting processes for school districts and charter schools. (b) This section expires June 1, 2010. Sec. 7.158. GRANT ADMINISTRATION DURING CERTAIN SCHOOL YEARS; STATUS REPORT. (a) Not later than January 1, 2007, the agency shall provide the legislature with a status report concerning the agency's development of the grant system. The report may suggest any statutory changes needed to facilitate a full transition to a performance-based grant system. (b) Beginning with the 2009-2010 school year, the agency shall make the performance-based grant system fully available to school districts and charter schools. (c) This section expires June 1, 2010. SECTION 2F.09. Subchapter A, Chapter 8, Education Code, is amended by adding Section 8.0031 to read as follows: Sec. 8.0031. TRAINING FOR MEMBERS OF BOARD OF DIRECTORS. (a) The commissioner shall adopt rules prescribing training for members of regional education service center boards of directors. The training curriculum may include: (1) an overview of this code and any rules adopted under this code; (2) a review of recent state and federal education legislation, rules, and regulations; (3) a review of the powers and duties of a regional education service center board of directors; and (4) a review of any statewide or regional strategic planning applicable to regional education service centers. (b) A member of a regional education service center board of directors must complete any training required by commissioner rule. SECTION 2F.10. Subsections (b), (c), and (d), Section 8.051, Education Code, are amended to read as follows: (b) Each regional education service center shall annually develop and submit to the commissioner for approval a plan for improvement. Each plan must include the purposes and description of the services the center will provide to: (1) campuses rated academically unacceptable [identified as low-performing based on the indicators adopted] under Section 39.072 [39.051]; (2) the lowest-performing campuses in the region; and (3) other campuses. (c) Each regional education service center shall provide services that enable school districts to operate more efficiently and economically, including collecting and disseminating: (1) best practices information as provided by Section 7.010; and (2) information concerning successful grant programs to school districts as provided by Section 7.156. (d) Each regional education service center shall maintain core services for purchase by school districts and campuses. The core services are: (1) training and assistance in teaching each subject area assessed under Section 39.023; (2) training and assistance in providing each program that qualifies for a funding allotment under Section 42.151, 42.152, 42.153, or 42.156; (3) assistance specifically designed for a school district or campus rated academically unacceptable under Section 39.072 [39.072(a) or a campus whose performance is considered unacceptable based on the indicators adopted under Section 39.051]; (4) training and assistance to teachers, administrators, members of district boards of trustees, and members of site-based decision-making committees; (5) assistance specifically designed for a school district that is considered out of compliance with state or federal special education requirements, based on the agency's most recent compliance review of the district's special education programs; and (6) assistance in complying with state laws and rules. SECTION 2F.11. Subchapter A, Chapter 29, Education Code, is amended by adding Sections 29.0162 and 29.0163 to read as follows: Sec. 29.0162. INFORMATION REGARDING SPECIAL EDUCATION DUE PROCESS HEARINGS. (a) The agency shall make available to a parent, student, school district, attorney, or other interested person, and shall place on the agency's Internet website, comprehensive, easily understood information concerning the special education due process hearing process. (b) The information described by Subsection (a) must include: (1) a description of the steps in the due process hearing process; (2) the text of any applicable administrative, procedural, or evidentiary rule; (3) a description of any notice requirements; (4) an explanation of options for alternative dispute resolution, including mediation; (5) an explanation of a resolution session; (6) answers to frequently asked questions; and (7) other sources of information, including electronic sources of information, such as special education case law available on the Internet. Sec. 29.0163. COLLECTION AND ANALYSIS OF INFORMATION CONCERNING SPECIAL EDUCATION HEARING OFFICERS. (a) The agency shall collect and at least biennially analyze any information, including complaint information, relating to the performance of a special education hearing officer for use in assessing: (1) the effectiveness of the due process hearing process; and (2) the performance of a special education hearing officer. (b) The agency shall use the information described by Subsection (a) in determining whether to renew a contract with a special education hearing officer. SECTION 2F.12. Section 61.076, Education Code, is amended by adding Subsections (c) and (d) to read as follows: (c) On or before January 1, 2007, the P-16 council shall: (1) review existing school district programs that provide high school students with the opportunity to enroll in advanced academic courses offered through dual credit and concurrent enrollment programs, including reviewing courses currently approved by districts and offered by institutions of higher education for dual and concurrent enrollment credit; (2) review the high school curriculum required for the recommended high school program under Section 28.025 and study the feasibility of offering a revised curriculum that would provide graduating high school students with at least 12 hours of advanced academic courses or college level coursework offered through dual credit and concurrent enrollment programs provided under agreements between high schools and institutions of higher education; and (3) prepare and deliver a report based on the review and study to the governor, the lieutenant governor, the speaker of the house of representatives, and the presiding officer of the standing committee of each house of the legislature with primary jurisdiction over public education. (d) Subsection (c) and this subsection expire January 2, 2007.
PART G. SCHOOL DISCIPLINE
SECTION 2G.01. Chapter 26, Education Code, is amended by adding Section 26.0083 to read as follows: Sec. 26.0083. RIGHT TO PROMPT NOTICE OF DISCIPLINARY ACTION. (a) A parent is entitled to notice from a school district or open-enrollment charter school as provided by this section if the parent's child is removed from class under Section 37.006 for placement in a disciplinary alternative education program or under Section 37.007 for expulsion or placement in a juvenile justice alternative education program. A school district or open-enrollment charter school shall make a good faith effort to provide the notice required by this subsection on the same day the parent's child is removed from class. If the district or school fails to provide the notice on that day, the district or school shall provide or mail the notice not later than 5 p.m. on the first business day after the day the student is removed from class. (b) A noncustodial parent who has requested notice of disciplinary actions as provided by Section 37.0091 is entitled to notice under Subsection (a). SECTION 2G.02. Section 37.008, Education Code, is amended by amending Subsections (m) and (m-1) and adding Subsection (n) to read as follows: (m) Notwithstanding Section 7.028, the [The] commissioner shall adopt rules necessary to evaluate through an annual monitoring process [annually] the performance of each district's disciplinary alternative education program established under this subchapter. The monitoring process [evaluation] required by this section may be electronic and shall be based on indicators defined by the commissioner, but must include student performance on assessment instruments required under Section [Sections] 39.023(a) and at least one indicator that measures student academic progress [and (c)]. Academically, the mission of disciplinary alternative education programs shall be to enable students to perform at grade level. (m-1) The agency shall integrate the monitoring process developed under Subsection (m) with the monitoring the agency is authorized to conduct under Section 7.028(a). The commissioner may require [shall develop a process for evaluating] a school district to contract at the district's expense in the manner provided by Section 39.134 with a public or private service provider for services determined by the commissioner to be necessary to: (1) improve student performance; (2) improve disciplinary alternative education program effectiveness; and (3) [electronically. The commissioner shall also develop a system and standards for review of the evaluation or use systems already available at the agency. The system must be designed to identify districts that are at high risk of having inaccurate disciplinary alternative education program data or of failing to] comply with disciplinary alternative education program state and federal requirements. (n) [The commissioner shall notify the board of trustees of a district of any objection the commissioner has to the district's disciplinary alternative education program data or of a violation of a law or rule revealed by the data, including any violation of disciplinary alternative education program requirements, or of any recommendation by the commissioner concerning the data. If the data reflect that a penal law has been violated, the commissioner shall notify the county attorney, district attorney, or criminal district attorney, as appropriate, and the attorney general.] The commissioner is entitled to access to all district records the commissioner considers necessary or appropriate for the review, analysis, or approval of disciplinary alternative education program data. SECTION 2G.03. Subsections (b) and (c), Section 37.020, Education Code, are amended to read as follows: (b) For each placement in a disciplinary alternative education program established under Section 37.008, the district shall report: (1) information identifying the student, including the student's race, sex, and date of birth, that will enable the agency to compare placement data with information collected through other reports; (2) information indicating whether the student was enrolled in a special education program under Subchapter A, Chapter 29, at the time of the placement; (3) information indicating whether the placement was based on: (A) conduct violating the student code of conduct adopted under Section 37.001; (B) conduct for which a student may be removed from class under Section 37.002(b); (C) conduct for which placement in a disciplinary alternative education program is required by Section 37.006; or (D) conduct occurring while a student was enrolled in another district and for which placement in a disciplinary alternative education program is permitted by Section 37.008(j); (4) [(3)] the number of full or partial days the student was assigned to the program and the number of full or partial days the student attended the program; and (5) [(4)] the number of placements that were inconsistent with the guidelines included in the student code of conduct under Section 37.001(a)(5). (c) For each expulsion under Section 37.007, the district shall report: (1) information identifying the student, including the student's race, sex, and date of birth, that will enable the agency to compare placement data with information collected through other reports; (2) information indicating whether the student was enrolled in a special education program under Subchapter A, Chapter 29, at the time of the expulsion; (3) information indicating whether the expulsion was based on: (A) conduct for which expulsion is required under Section 37.007, including information specifically indicating whether a student was expelled on the basis of Section 37.007(e); or (B) conduct for which expulsion is permitted under Section 37.007; (4) [(3)] the number of full or partial days the student was expelled; (5) [(4)] information indicating whether: (A) the student was placed in a juvenile justice alternative education program under Section 37.011; (B) the student was placed in a disciplinary alternative education program; or (C) the student was not placed in a juvenile justice or other disciplinary alternative education program; and (6) [(5)] the number of expulsions that were inconsistent with the guidelines included in the student code of conduct under Section 37.001(a)(5).
PART H. CRIMINAL HISTORY RECORDS INFORMATION
SECTION 2H.01. Subchapter B, Chapter 21, Education Code, is amended by adding Section 21.0401 to read as follows: Sec. 21.0401. COLLECTION OF FINGERPRINTS REQUIRED. The board shall obtain a complete set of fingerprints from: (1) each applicant for a certificate issued under this subchapter; (2) each applicant for or holder of a teaching permit issued under this subchapter; and (3) each person described by Section 11A.153 or Section 21.0032 for whom the board has received information from a public charter district. SECTION 2H.02. Subsection (c), Section 21.041, Education Code, is amended to read as follows: (c) The board shall propose rules [a rule] adopting fees [a fee] for: (1) the issuance and maintenance of each [an] educator certificate that is adequate to cover the cost of administration of this subchapter, including any amount necessary to cover the cost of obtaining fingerprints under Section 21.0401 or conducting a national criminal background review and investigation under Sections 21.0032 and 22.082; and (2) the cost of obtaining fingerprints from or conducting a national criminal background review of a holder of a teaching permit issued under this subchapter. SECTION 2H.03. Section 22.082, Education Code, is amended to read as follows: Sec. 22.082. ACCESS TO CRIMINAL HISTORY RECORDS BY STATE BOARD FOR EDUCATOR CERTIFICATION. (a) The State Board for Educator Certification shall obtain from any law enforcement or criminal justice agency all state and national criminal history record information that relates to: (1) an applicant for or holder of a certificate or permit issued under Subchapter B, Chapter 21; or (2) a person described by Section 11A.153 or 21.0032. (b) The board shall require each applicant, holder, and person described by Subsection (a)(2) to pay any costs to the board related to obtaining criminal history record information related to the person under this section. SECTION 2H.04. Section 411.090, Government Code, is amended to read as follows: Sec. 411.090. ACCESS TO CRIMINAL HISTORY RECORD INFORMATION AND FINGERPRINTS: STATE BOARD FOR EDUCATOR CERTIFICATION. (a) The State Board for Educator Certification is entitled to obtain from the department any criminal history record information maintained by the department about: (1) a person who has applied or expressed to the board an intention to apply [to the board] for a certificate or permit under Subchapter B, Chapter 21, Education Code; or (2) a person described by Section 11A.153 or 21.0032, Education Code. (b) Criminal history record information obtained by the board under Subsection (a): (1) may be used for any purpose related to the issuance, denial, suspension, or cancellation of a certificate or permit under Subchapter B, Chapter 21, Education Code, or for any purpose authorized by Section 11A.153 or 21.0032, Education Code [issued by the board]; and (2) may not be released to any person except on court order or with the consent of the subject of the criminal history record information [applicant for a certificate; and [(3) shall be destroyed by the board after the information is used for the authorized purposes]. (c) The board may keep on file with the department all fingerprints obtained by the board under Section 21.0401, Education Code. The department shall notify the board of the arrest of any person who has fingerprints on file with the department pursuant to that section. (d) On receipt of notice from the department of an arrest of a person described by Section 11A.153 or 21.0032, Education Code, the board shall notify the public charter district affected.
PART I. HEALTH COVERAGE OR COMPENSATION SUPPLEMENTATION
SECTION 2I.01. Chapter 1580, Insurance Code, is reenacted and amended to read as follows:
CHAPTER 1580. ACTIVE EMPLOYEE HEALTH COVERAGE
OR COMPENSATION SUPPLEMENTATION
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 1580.001. DEFINITIONS. In this chapter: (1) "Cafeteria plan" means a plan as defined and authorized by Section 125, Internal Revenue Code of 1986, and its subsequent amendments. (2) "Employee" means a participating member of the Teacher Retirement System of Texas who: (A) is employed by a school district, other educational district whose employees are members of the Teacher Retirement System of Texas, participating charter school, or regional education service center; and (B) is not a retiree covered under the program established under Chapter 1575. (3) "Participating charter school" means an open-enrollment charter school established under Subchapter D, Chapter 12, Education Code, that participates in the program established under Chapter 1579. (4) "Regional education service center" means a regional education service center established under Chapter 8, Education Code. (5) "Trustee" means the Teacher Retirement System of Texas. Sec. 1580.002. AUTHORITY TO ADOPT RULES; OTHER AUTHORITY. (a) The trustee may adopt rules to implement this chapter. (b) The trustee may enter into interagency contracts with any agency of this state for the purpose of assistance in implementing this chapter.
SUBCHAPTER B. DESIGNATION OF COMPENSATION AS HEALTH CARE
SUPPLEMENTATION [DISTRIBUTION OF STATE FUNDS BY TRUSTEE]
Sec. 1580.051. DESIGNATION OF COMPENSATION AS HEALTH CARE SUPPLEMENTATION. (a) As provided by Section 21.402 or 22.008, Education Code, and subject to Section 1580.102, an employee of a [DISTRIBUTION BY TRUSTEE. Each year, the trustee shall deliver to each] school district, [including a school district that is ineligible for state aid under Chapter 42, Education Code, each] other educational district that is a member of the Teacher Retirement System of Texas, [each] participating charter school, or [and each] regional education service center may elect to designate a portion of the employee's compensation to be used as health care supplementation under this chapter. The amount designated under this section may not exceed the amount permitted under applicable federal law. (b) Notwithstanding Subsection (a), an administrator, as defined by the trustee, employed by a school district, another educational district, a participating charter school, or a regional education service center is not eligible to elect to designate a portion of the person's compensation to be used as health care supplementation under this chapter [state funds in an amount, as determined by the trustee, equal to the product of the number of active employees employed by the district, school, or service center multiplied by $1,000 or a greater amount as provided by the General Appropriations Act for purposes of this chapter]. [Sec. 1580.052. EQUAL INSTALLMENTS. The trustee shall distribute funds under this chapter in equal monthly installments.] Sec. 1580.053. FUNDS HELD IN TRUST. All funds received by a school district, other educational district, participating charter school, or regional education service center under this chapter are held in trust for the benefit of the active employees on whose behalf the district, school, or service center received the funds. [Sec. 1580.054. RECOVERY OF DISTRIBUTIONS. The trustee is entitled to recover from a school district, other educational district, participating charter school, or regional education service center any amount distributed under this chapter to which the district, school, or service center was not entitled. [Sec. 1580.055. DETERMINATION OF TRUSTEE FINAL. A determination by the trustee under this subchapter is final and may not be appealed.]
SUBCHAPTER C. EMPLOYEE ELECTION
Sec. 1580.101. WRITTEN ELECTION REQUIRED. (a) Each school year, an active employee must elect in writing whether to designate a portion of the employee's compensation to be used as health care supplementation under this chapter. (b) This section does not apply to an employee to whom Section 1580.102 applies. Sec. 1580.1011. EMPLOYEE COVERED BY CAFETERIA PLAN. (a) To elect to designate a portion of the employee's compensation to be used as health care supplementation under this chapter, [If] an active employee must be [is] covered by a cafeteria plan of a school district, other educational district, participating charter school, or regional education service center. The employee must[, the state contribution under this chapter shall be deposited in the cafeteria plan, and the employee may] elect among the options provided by the cafeteria plan. (b) A cafeteria plan receiving funds designated as health care supplementation [state contributions] under this chapter may include a medical savings account option and must include, at a minimum, the following options: (1) a health care reimbursement account; (2) a benefit or coverage other than that provided under Chapter 1579, or any employee coverage or dependent coverage available under Chapter 1579 but not otherwise fully funded by the state or the employer contributions, any of which must be a "qualified benefit" under Section 125, Internal Revenue Code of 1986, and its subsequent amendments; or (3) [an option for the employee to receive the state contribution as supplemental compensation; or [(4)] an option to divide the funds between [state contribution among two or more of] the other options provided under this subsection. Sec. 1580.102. EMPLOYEE NOT COVERED BY CAFETERIA PLAN. If an active employee is not covered by a cafeteria plan of a school district, other educational district, participating charter school, or regional education service center, the employee is not eligible to elect to designate a portion of the employee's compensation to be used as health care supplementation under this chapter [state contribution under this chapter shall be paid to the active employee as supplemental compensation]. [Sec. 1580.103. SUPPLEMENTAL COMPENSATION. Supplemental compensation under this subchapter must be in addition to the rate of compensation that: [(1) the school district, other educational district, participating charter school, or regional education service center paid the employee in the preceding school year; or [(2) the district, school, or service center would have paid the employee in the preceding school year if the employee had been employed by the district, school, or service center in the same capacity in the preceding school year.] Sec. 1580.104. TIME FOR ELECTION. For each state fiscal year, an election under this subchapter must be made before the later of: (1) August 1 of the preceding state fiscal year; or (2) the 31st day after the date the employee is hired. Sec. 1580.105. WRITTEN EXPLANATION; ELECTION FORM. (a) The trustee shall prescribe and distribute to each school district, other educational district, participating charter school, and regional education service center: (1) a model explanation written in English and Spanish of the options active employees may elect under this section and the effect of electing each option; and (2) an election form to be completed by active employees. (b) Each state fiscal year, a school district, other educational district, participating charter school, or regional education service center shall prepare and distribute to each active employee a written explanation in English and Spanish, as appropriate, of the options the employee may elect under this section. The explanation must be based on the model explanation prepared by the trustee under Subsection (a) and must reflect all available health coverage options available to the employee. The explanation must be distributed to an employee before the later of: (1) July 1 of the preceding state fiscal year; or (2) the fifth day after the date the employee is hired. (c) The written explanation under Subsection (b) must be accompanied by a copy of the election form prescribed under Subsection (a)(2). [Sec. 1580.106. RETURN OF UNENCUMBERED FUNDS. Any unencumbered funds that are returned to the school district from accounts established under Section 1580.101 may be used only to provide employee compensation, benefits, or both.]
SUBCHAPTER D. MEDICAL SAVINGS ACCOUNT
Sec. 1580.151. DEFINITION. In this subchapter, "qualified health care expense" means an expense paid by an employee for medical care, as defined by Section 213(d), Internal Revenue Code of 1986, and its subsequent amendments, for the employee or the employee's dependents, as defined by Section 152, Internal Revenue Code of 1986, and its subsequent amendments. Sec. 1580.152. RULES. The trustee, by rule, shall specify the requirements for a medical savings account established under this chapter. Sec. 1580.153. QUALIFICATION OF ACCOUNT. (a) The trustee shall request in writing a ruling or opinion from the Internal Revenue Service as to whether the medical savings accounts established under this chapter and the state rules governing those accounts qualify the accounts for appropriate federal tax exemptions. (b) Based on the response of the Internal Revenue Service under Subsection (a), the trustee shall: (1) modify the rules, plans, and procedures adopted under this section as necessary to ensure the qualification of those accounts for appropriate federal tax exemptions; and (2) certify the information regarding federal tax qualifications to the comptroller. Sec. 1580.154. EMPLOYEE ELECTION. An employee who elects under Section 1580.101 to have state funds distributed under this chapter placed in a medical savings account may use the money in that account only for a qualified health care expense.
PART J. SCHOOL SAFETY
SECTION 2J.01. Chapter 33, Education Code, is amended by adding Subchapter F to read as follows:
SUBCHAPTER F. SAFETY REGULATIONS FOR CERTAIN EXTRACURRICULAR ACTIVITIES
Sec. 33.201. APPLICABILITY. This subchapter applies to each public school in this state and to any other school in this state subject to University Interscholastic League regulations. Sec. 33.202. SAFETY TRAINING REQUIRED. (a) The commissioner by rule shall develop and adopt a safety training program as provided by this section. In developing the program, the commissioner may use materials available from the American Red Cross or another appropriate entity. (b) The following persons must satisfactorily complete the safety training program: (1) a coach, trainer, or sponsor for an extracurricular athletic activity; (2) except as provided by Subsection (f), a physician who is employed by a school or school district or who volunteers to assist with an extracurricular athletic activity; and (3) a director responsible for a school marching band. (c) The safety training program must include: (1) certification of participants by the American Red Cross, the American Heart Association, or a similar organization or the University Interscholastic League, as determined by the commissioner; (2) annual training in: (A) emergency action planning; (B) cardiopulmonary resuscitation if the person is not required to obtain certification under Section 33.086; (C) communicating effectively with 9-1-1 emergency service operators and other emergency personnel; and (D) recognizing symptoms of potentially catastrophic injuries, including head and neck injuries, concussions, injuries related to second impact syndrome, asthma attacks, heatstroke, cardiac arrest, and injuries requiring use of a defibrillator; and (3) at least once each school year, a safety drill that incorporates the training described by Subdivision (2) and simulates various injuries described by Subdivision (2)(D). (d) A student participating in an extracurricular athletic activity must receive training related to: (1) recognizing the symptoms of injuries described by Subsection (c)(2)(D); and (2) the risks of using supplements designed or marketed to enhance athletic performance. (e) The safety training program and the training under Subsection (d) may each be conducted by a school or school district or by an organization described by Subsection (c)(1). (f) A physician who is employed by a school or school district or who volunteers to assist with an extracurricular athletic activity is exempt from the requirements of Subsection (b) if the physician attends a continuing medical education course that specifically addresses emergency medicine for athletic team physicians. Sec. 33.2021. COMPLETION OF UNIVERSITY INTERSCHOLASTIC LEAGUE MEDICAL HISTORY FORM. (a) Each student participating in an extracurricular athletic activity must complete the University Interscholastic League forms entitled "Preparticipation Physical Evaluation--Medical History" and "Acknowledgment of Rules." Each form must be signed by both the student and the student's parent or guardian. (b) Each form described by Subsection (a) must clearly state that failure to accurately and truthfully answer all questions on a form required by statute or by the University Interscholastic League as a condition for participation in an extracurricular athletic activity subjects a signer of the form to penalties determined by the University Interscholastic League. (c) The "Preparticipation Physical Evaluation--Medical History" form described by Subsection (a) must contain the following statement: "An individual answering in the affirmative to any question relating to a possible cardiovascular health issue, as identified on the form, should be restricted from further participation until the individual is examined by the individual's primary care physician. Ultimately, the individual may need to be evaluated by a cardiologist and/or undergo cardiac testing (including an echocardiogram and/or other heart-related examination) based on the assessment by the primary care physician." Sec. 33.203. CERTAIN UNSAFE ATHLETIC ACTIVITIES PROHIBITED. A coach, trainer, or sponsor for an extracurricular athletic activity may not encourage or permit a student participating in the activity to engage in any unreasonably dangerous athletic technique that unnecessarily endangers the health of a student, including using a helmet or any other sports equipment as a weapon. Sec. 33.204. CERTAIN SAFETY PRECAUTIONS REQUIRED. (a) A coach, trainer, or sponsor for an extracurricular athletic activity shall at each athletic practice or competition ensure that: (1) each student participating in the activity is adequately hydrated; (2) any prescribed asthma medication for a student participating in the activity is readily available to the student; (3) emergency lanes providing access to the practice or competition area are open and clear; and (4) heatstroke prevention materials are readily available. (b) If a student participating in an extracurricular athletic activity, including a practice or competition, is rendered unconscious during the activity, the student may not: (1) return to the practice or competition during which the student was rendered unconscious; or (2) continue to participate in any extracurricular athletic activity until the student receives written authorization from a physician. Sec. 33.205. COMPLIANCE; ENFORCEMENT. (a) On request, a school shall make available to the public proof of compliance for each person enrolled in, employed by, or volunteering for the school who is required to receive safety training described by Section 33.202. (b) The superintendent of a school district or the director of a school subject to this subchapter shall maintain complete and accurate records of the district's or school's compliance with Section 33.202. (c) A school campus that is determined by the school's superintendent or director to not be in compliance with Section 33.202, 33.203, or 33.204 shall discontinue all extracurricular athletic activities offered by the school campus, including all practices and competitions, until the superintendent or director determines that the school campus is in compliance. Sec. 33.206. CONTACT INFORMATION. (a) The commissioner shall maintain an existing telephone number and an electronic mail address to allow a person to report a violation of this subchapter. (b) Each school that offers an extracurricular athletic activity shall prominently display at the administrative offices of the school the telephone number and electronic mail address maintained under Subsection (a). Sec. 33.207. NOTICE REQUIRED. (a) A school that offers an extracurricular athletic activity shall provide to each student participating in an extracurricular athletic activity and to the student's parent or guardian a copy of the text of Sections 33.201-33.206 and a copy of the University Interscholastic League's parent information manual. (b) A document required to be provided under this section may be provided in an electronic format unless otherwise requested by a student, parent, or guardian. Sec. 33.208. INCORPORATION OF SAFETY REGULATIONS. The University Interscholastic League shall incorporate the provisions of Sections 33.203-33.206 into the league's constitution and contest rules. Sec. 33.209. LIABILITY. The requirements of this subchapter are not considered ministerial acts for purposes of immunity from liability under Section 22.0511. SECTION 2J.02. Subchapter D, Chapter 33, Education Code, is amended by adding Section 33.087 to read as follows: Sec. 33.087. REPORT CONCERNING AUTOMATED EXTERNAL DEFIBRILLATORS. (a) Using existing funds and other resources available for the purpose, the agency and the University Interscholastic League shall jointly investigate the availability of federal, state, local, and private funds for purchasing automated external defibrillators, as defined by Section 779.001, Health and Safety Code, for use by University Interscholastic League member schools, and the possibility of receiving a bulk discount on such purchases. (b) The agency and the University Interscholastic League shall submit a report describing the findings of the investigation to the legislature not later than June 1, 2006. (c) This section expires July 1, 2006. SECTION 2J.03. Subchapter D, Chapter 37, Education Code, is amended by adding Section 37.108 to read as follows: Sec. 37.108. MULTIHAZARD EMERGENCY OPERATIONS PLAN; SECURITY AUDIT. (a) Each school district shall adopt and implement a multihazard emergency operations plan for use in district schools. The plan must address mitigation, preparedness, response, and recovery as recommended by the United States Department of Homeland Security. The plan must provide for: (1) district employee training in responding to an emergency; (2) mandatory school drills to prepare district students and employees for responding to an emergency; (3) measures to ensure coordination with local emergency management agencies, law enforcement, and fire departments in the event of an emergency; and (4) the implementation of a security audit as required by Subsection (b). (b) At least once every three years, a school district shall conduct a security audit of the district's facilities. To the extent possible, a district shall follow security audit procedures developed by the Texas School Safety Center or a comparable public or private entity. (c) A school district shall report the results of the security audit conducted under Subsection (b) to the district's board of trustees. SECTION 2J.04. Subsection (a), Section 37.203, Education Code, is amended to read as follows: (a) The center is advised [governed] by a board of directors composed of: (1) the attorney general, or the attorney general's designee; (2) the commissioner, or the commissioner's designee; (3) the executive director of the Texas Juvenile Probation Commission, or the executive director's designee; (4) the executive director of the Texas Youth Commission, or the executive director's designee; (5) the commissioner of the Texas Department of Mental Health and Mental Retardation, or the commissioner's designee; and (6) the following members appointed by the governor with the advice and consent of the senate: (A) a juvenile court judge; (B) a member of a school district's board of trustees; (C) an administrator of a public primary school; (D) an administrator of a public secondary school; (E) a member of the state parent-teacher association; (F) a teacher from a public primary or secondary school; (G) a public school superintendent who is a member of the Texas Association of School Administrators; (H) a school district police officer or a peace officer whose primary duty consists of working in a public school; and (I) two members of the public. SECTION 2J.05. Section 37.205, Education Code, is amended to read as follows: Sec. 37.205. SAFETY TRAINING PROGRAMS. The center shall conduct for school districts a safety training program that includes: (1) development of a positive school environment and proactive safety measures designed to address local concerns; (2) school safety courses for law enforcement officials, with a focus on school district police officers and school resource officers; (3) discussion of school safety issues with parents and community members; and (4) assistance in developing a multihazard emergency operations plan for adoption under Section 37.108 [specialized training for the staff of alternative education programs and juvenile justice alternative education programs]. SECTION 2J.06. Subchapter G, Chapter 37, Education Code, is amended by adding Section 37.2051 to read as follows: Sec. 37.2051. SECURITY CRITERIA FOR INSTRUCTIONAL FACILITIES. The center shall develop security criteria that school districts may consider in the design of instructional facilities. SECTION 2J.07. Section 37.208, Education Code, is amended to read as follows: Sec. 37.208. ON-SITE ASSISTANCE. On request of a school district, the center may [shall] provide on-site technical assistance to the district for: (1) school safety and security audits; and (2) school safety and security information and presentations. SECTION 2J.08. Subsection (b), Section 37.215, Education Code, is amended to read as follows: (b) The center [board] shall biannually prepare a budget request [for the center] for submission to the legislature. SECTION 2J.09. Subchapter A, Chapter 46, Education Code, is amended by adding Section 46.0081 to read as follows: Sec. 46.0081. SECURITY CRITERIA IN DESIGN OF INSTRUCTIONAL FACILITIES. A school district that constructs a new instructional facility or conducts a major renovation of an existing instructional facility using funds allotted to the district under this subchapter shall consider, in the design of the instructional facility, security criteria developed by the Texas School Safety Center under Section 37.2051. SECTION 2J.10. Sections 37.206 and 37.213, Education Code, are repealed. SECTION 2J.11. (a) Not later than December 1, 2005, the Texas School Safety Center shall: (1) develop a school safety program that includes assistance to school districts in developing a multihazard emergency operations plan as required by Section 37.205, Education Code, as amended by this Act; and (2) develop security criteria for the construction and renovation of school district instructional facilities as required by Section 37.2051, Education Code, as added by this Act. (b) Not later than March 1, 2006, each school district shall adopt a multihazard emergency operations plan as required by Section 37.108, Education Code, as added by this Act.
PART K. SCHOOL DISTRICT OPERATIONS
SECTION 2K.01. Subsection (e), Section 7.056, Education Code, as amended by S.B. No. 658, Acts of the 79th Legislature, Regular Session, 2005, is amended to read as follows: (e) Except as provided by Subsection (f), a school campus or district may not receive an exemption or waiver under this section from: (1) a prohibition on conduct that constitutes a criminal offense; (2) a requirement imposed by federal law or rule, including a requirement for special education or bilingual education programs; or (3) a requirement, restriction, or prohibition relating to: (A) essential knowledge or skills under Section 28.002 or minimum graduation requirements under Section 28.025; (B) public school accountability as provided by Subchapters B, C, D, and G, Chapter 39; (C) extracurricular activities under Section 33.0812 or participation in a University Interscholastic League area, regional, or state competition under Section 33.082; (D) health and safety under Chapter 38; (E) purchasing under Subchapter B, Chapter 44; (F) elementary school class size limits, except as provided by Section 25.112; (G) removal of a disruptive student from the classroom under Subchapter A, Chapter 37; (H) at-risk programs under Subchapter C, Chapter 29; (I) prekindergarten programs under Subchapter E, Chapter 29; (J) educator rights and benefits under Subchapters A, C, D, E, F, G, and I, Chapter 21, or under Subchapter A, Chapter 22; (K) special education programs under Subchapter A, Chapter 29; [or] (L) bilingual education programs under Subchapter B, Chapter 29; or (M) the requirements for the first and last day of instruction under Section 25.0811, except as provided by that section. SECTION 2K.02. The heading to Section 25.0811, Education Code, is amended to read as follows: Sec. 25.0811. FIRST AND LAST DAY OF INSTRUCTION. SECTION 2K.03. Subsection (a), Section 25.0811, Education Code, is amended to read as follows: [(a)] A school district shall [may not] begin instruction for students for a school year on the first Tuesday after Labor Day. The school year must end not later than June 7 unless: (1) the district operates a year-round system under Section 25.084; or (2) the commissioner grants a waiver to extend the school year at a campus as the result of a disaster, flood, extreme weather condition, fuel curtailment, or other calamity that caused a closure of the campus for a significant period [before the week in which August 21 falls. For purposes of this subsection, Sunday is considered the first day of the week]. SECTION 2K.04. This part applies beginning with the 2006-2007 school year.
PART L. SAFETY OR LAP BELTS IN SCHOOL BUSES
SECTION 2L.01. Chapter 34, Education Code, is amended by adding Section 34.012 to read as follows: Sec. 34.012. FUNDING FOR SAFETY OR LAP BELTS. (a) A person may offer to donate safety or lap belts or money for the purchase of safety or lap belts for a school district's school buses. (b) The board of trustees of a school district shall consider any offer made by a person under Subsection (a). The board of trustees may accept or decline the offer after adequate consideration. (c) The board of trustees may acknowledge a person who donates safety or lap belts or money for the purchase of safety or lap belts for a school bus under this section by displaying a small, discreet sign on the side or back of the bus recognizing the person who made the donation. The sign may not serve as an advertisement for the person who made the donation.
ARTICLE 4. CHARTER SCHOOLS
SECTION 4.01. (a) Effective August 1, 2006, Subchapter D, Chapter 12, Education Code, is repealed. (b) Except as provided by Section 11A.1041, Education Code, as added by this Act, each open-enrollment charter school operating or holding a charter to operate on August 1, 2006, shall be dissolved in accordance with Subchapter J, Chapter 11A, Education Code, as added by this Act. SECTION 4.02. Subtitle C, Title 2, Education Code, is amended by adding Chapter 11A to read as follows:
CHAPTER 11A. PUBLIC CHARTER DISTRICTS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 11A.001. DEFINITIONS. In this chapter: (1) "Charter holder" means the entity to which a charter is granted under this chapter. (2) "Governing body of a charter holder" means the board of directors, board of trustees, or other governing body of a charter holder. (3) "Governing body of a public charter district" means the board of directors, board of trustees, or other governing body of a public charter district. The term includes the governing body of a charter holder if that body acts as the governing body of the public charter district. (4) "Management company" means a person, other than a charter holder, who provides management services for a public charter district. (5) "Management services" means services related to the management or operation of a public charter district, including: (A) planning, operating, supervising, and evaluating the public charter district's educational programs, services, and facilities; (B) making recommendations to the governing body of the public charter district relating to the selection of school personnel; (C) managing the public charter district's day-to-day operations as its administrative manager; (D) preparing and submitting to the governing body of the public charter district a proposed budget; (E) recommending policies to be adopted by the governing body of the public charter district, developing appropriate procedures to implement policies adopted by the governing body of the public charter district, and overseeing the implementation of adopted policies; and (F) providing leadership for the attainment of student performance at the public charter district based on the indicators adopted under Section 39.051 or by the governing body of the public charter district. (6) "Officer of a public charter district" means: (A) the principal, director, or other chief operating officer of a public charter district or campus; or (B) a person charged with managing the finances of a public charter district. Sec. 11A.002. AUTHORIZATION. (a) In accordance with this chapter, the State Board of Education may grant a charter on the application of an eligible entity for a public charter district to operate in a facility of a commercial or nonprofit entity, an eligible entity, or a school district, including a home-rule school district. In this subsection, "eligible entity" means: (1) an institution of higher education as defined under Section 61.003; (2) a private or independent institution of higher education as defined under Section 61.003; (3) an organization that is exempt from federal income taxation under Section 501(a), Internal Revenue Code of 1986, as an organization described by Section 501(c)(3) of that code; or (4) a governmental entity in this state. (b) The State Board of Education may grant a charter for a public charter district only to an applicant that meets all financial, governing, and operational standards adopted by the commissioner under this chapter. (c) The State Board of Education may not grant more than a total of 215 charters for public charter districts. (d) An educator employed by a school district before the effective date of a charter for a public charter district operated at a school district facility may not be transferred to or employed by the public charter district over the educator's objection. Sec. 11A.003. AUTHORITY UNDER CHARTER. A public charter district: (1) shall provide instruction to and assess a number of students at a number of elementary or secondary grade levels, as provided by the charter, sufficient to permit the agency to assign an accountability rating under Chapter 39; (2) is governed under the governing structure required by this chapter and described by the charter; (3) retains authority to operate under the charter contingent on satisfactory student performance as provided by the charter in accordance with Section 11A.103; and (4) does not have authority to impose taxes. Sec. 11A.004. STATUS. A public charter district or campus is part of the public school system of this state. Sec. 11A.005. IMMUNITY FROM LIABILITY. In matters related to operation of a public charter district, a public charter district is immune from liability to the same extent as a school district, and its employees and volunteers are immune from liability to the same extent as school district employees and volunteers. Except as provided by Section 11A.154, a member of the governing body of a public charter district or of a charter holder is immune from liability to the same extent as a school district trustee. Sec. 11A.006. REFERENCE TO OPEN-ENROLLMENT CHARTER SCHOOL. A reference in law to an open-enrollment charter school means a public charter district or public charter campus, as applicable.
[Sections 11A.007-11A.050 reserved for expansion]
SUBCHAPTER B. APPLICABILITY OF CERTAIN LAWS
Sec. 11A.051. GENERAL APPLICABILITY OF LAWS, RULES, AND ORDINANCES TO PUBLIC CHARTER DISTRICT. (a) Except as provided by Subsection (b) or (c), a public charter district is subject to federal and state laws and rules governing public schools and to municipal zoning ordinances governing public schools. (b) A public charter district is subject to this code and rules adopted under this code only to the extent the applicability to a public charter district of a provision of this code or a rule adopted under this code is specifically provided. (c) Notwithstanding Subsection (a), a campus of a public charter district located in whole or in part in a municipality with a population of 20,000 or less is not subject to a municipal zoning ordinance governing public schools. Sec. 11A.052. APPLICABILITY OF TITLE. (a) A public charter district has the powers granted to schools under this title. (b) A public charter district is subject to: (1) a provision of this title establishing a criminal offense; and (2) a prohibition, restriction, or requirement, as applicable, imposed by this title or a rule adopted under this title, relating to: (A) the Public Education Information Management System (PEIMS) under Section 42.006; (B) reporting an educator's misconduct under Section 21.006; (C) criminal history records under Subchapter C, Chapter 22; (D) reading instruments and accelerated reading instruction programs under Section 28.006; (E) satisfactory performance on assessment instruments and to accelerated instruction under Section 28.0211; (F) intensive programs of instruction under Section 28.0213; (G) high school graduation under Section 28.025; (H) special education programs under Subchapter A, Chapter 29, including a requirement that special education teachers obtain appropriate certification; (I) bilingual education under Subchapter B, Chapter 29, including a requirement that bilingual education teachers obtain appropriate certification; (J) prekindergarten programs under Subchapter E, Chapter 29; (K) extracurricular activities under Section 33.081; (L) discipline management practices or behavior management techniques under Section 37.0021; (M) health and safety under Chapter 38; and (N) public school accountability under Subchapters B, C, D, G, and I, Chapter 39. (c) A public charter district is entitled to the same level of services provided to school districts by regional education service centers. The commissioner shall adopt rules that provide for the representation of public charter districts on the boards of directors of regional education service centers. (d) The commissioner may by rule permit a public charter district to voluntarily participate in any state program available to school districts, including a purchasing program, if the public charter district complies with all terms of the program. Sec. 11A.053. APPLICABILITY OF OPEN MEETINGS AND PUBLIC INFORMATION LAWS. (a) With respect to the operation of a public charter district, the governing body of a charter holder and the governing body of a public charter district are considered to be governmental bodies for purposes of Chapters 551 and 552, Government Code. (b) With respect to the operation of a public charter district, any requirement in Chapter 551 or 552, Government Code, that applies to a school district, the board of trustees of a school district, or public school students applies to a public charter district, the governing body of a charter holder, the governing body of a public charter district, or students in attendance at a public charter district campus. Sec. 11A.054. APPLICABILITY OF LAWS RELATING TO LOCAL GOVERNMENT RECORDS. (a) With respect to the operation of a public charter district, a public charter district is considered to be a local government for purposes of Subtitle C, Title 6, Local Government Code, and Subchapter J, Chapter 441, Government Code. (b) Records of a public charter district, a charter holder, or a management company that relate to a public charter district are government records for all purposes under state law. (c) Any requirement in Subtitle C, Title 6, Local Government Code, or Subchapter J, Chapter 441, Government Code, that applies to a school district, the board of trustees of a school district, or an officer or employee of a school district applies to a public charter district or management company, the governing body of a charter holder, the governing body of a public charter district, or an officer or employee of a public charter district or management company except that the records of a public charter district or management company that ceases to operate shall be transferred in the manner prescribed by Subsection (d). (d) The records of a public charter district or management company that ceases to operate shall be transferred in the manner specified by the commissioner to a custodian designated by the commissioner. The commissioner may designate any appropriate entity to serve as custodian, including the agency, a regional education service center, or a school district. In designating a custodian, the commissioner shall ensure that the transferred records, including student and personnel records, are transferred to a custodian capable of: (1) maintaining the records; (2) making the records readily accessible to students, parents, former school employees, and other persons entitled to access; and (3) complying with applicable state or federal law restricting access to the records. (e) If the charter holder of a public charter district that ceases to operate or an officer or employee of the district or a management company refuses to transfer school records in the manner specified by the commissioner under Subsection (d), the commissioner may ask the attorney general to petition a court for recovery of the records. If the court grants the petition, the court shall award attorney's fees and court costs to the state. (f) A record described by this section is a public school record for purposes of Section 37.10(c)(2), Penal Code. Sec. 11A.055. APPLICABILITY OF LAWS RELATING TO PUBLIC PURCHASING AND CONTRACTING. (a) This section applies to a public charter district unless the district's charter otherwise describes procedures for purchasing and contracting and the procedures are approved by the State Board of Education. (b) A public charter district is considered to be: (1) a governmental entity for purposes of: (A) Subchapter D, Chapter 2252, Government Code; and (B) Subchapter B, Chapter 271, Local Government Code; (2) a political subdivision for purposes of Subchapter A, Chapter 2254, Government Code; and (3) a local government for purposes of Sections 2256.009-2256.016, Government Code. (c) To the extent consistent with this section, a requirement in a law listed in this section that applies to a school district or the board of trustees of a school district applies to a public charter district, the governing body of a charter holder, or the governing body of a public charter district. Sec. 11A.056. APPLICABILITY OF LAWS RELATING TO CONFLICT OF INTEREST. (a) A member of the governing body of a charter holder, a member of the governing body of a public charter district, or an officer of a public charter district is considered to be a local public official for purposes of Chapter 171, Local Government Code. For purposes of that chapter: (1) a member of the governing body of a charter holder or a member of the governing body or officer of a public charter district is considered to have a substantial interest in a business entity if a person related to the member or officer in the third degree by consanguinity or affinity, as determined under Chapter 573, Government Code, has a substantial interest in the business entity under Section 171.002, Local Government Code; and (2) a teacher at a public charter district may serve as a member of the governing body of the charter holder or the governing body of the public charter district if the teachers serving on the governing body: (A) do not constitute a quorum of the governing body or any committee of the governing body; and (B) comply with the requirements of Sections 171.003-171.007, Local Government Code. (b) To the extent consistent with this section, a requirement of a law listed in this section that applies to a school district or the board of trustees of a school district applies to a public charter district, the governing body of a charter holder, or the governing body of a public charter district. (c) An employee who is not a teacher may serve as a member of the governing body of a charter holder or the governing body of a public charter district if: (1) the charter holder operating the public charter district where the individual is employed and serves as a member of the governing body operated an open-enrollment charter school under Subchapter D, Chapter 12, on August 31, 2005; (2) the individual was employed by the charter holder and serving as a member of the governing body on August 31, 2005, in compliance with former Section 12.1054; and (3) the individual had been continuously so employed and serving since a date on or before January 1, 2005. (d) If under Subsection (c) an individual continues to be employed and serve as a member of the governing body, the individual may not participate in any deliberation or voting on the appointment, reappointment, confirmation of the appointment or reappointment, employment, reemployment, change in the status, compensation, or dismissal of the individual if that action applies only to the individual and is not taken regarding a bona fide class or category of employees. In addition, the individual may not hear, consider, or act on any grievance or complaint concerning the individual or a matter with which the individual has dealt in the individual's capacity as an employee. Sec. 11A.057. APPLICABILITY OF NEPOTISM LAWS. (a) A public charter district, including the governing body of a public charter district and any district employee with final authority to hire a district employee, is subject to a prohibition, restriction, or requirement, as applicable, imposed by state law or by a rule adopted under state law, relating to nepotism under Chapter 573, Government Code. (b) Notwithstanding Subsection (a), a member of the governing body of a charter holder or public charter district may not be related in the third degree by consanguinity or affinity, as determined under Chapter 573, Government Code, to another member of the governing body of the charter holder or public charter district. (c) This section does not apply to an appointment, confirmation of an appointment, or vote for an appointment or confirmation of an appointment of an individual to a position if: (1) the charter holder operating the public charter district where the individual is employed or serves as a member of the governing body operated an open-enrollment charter school under Subchapter D, Chapter 12, on August 31, 2005; (2) the individual was employed or serving in the position on August 31, 2005, in compliance with former Section 12.1055; and (3) the individual has been continuously employed or serving since a date on or before January 1, 2005. (d) If, under Subsection (c), an individual continues to be employed or serve in a position, the public official to whom the individual is related in a prohibited degree may not participate in any deliberation or voting on the appointment, reappointment, confirmation of the appointment or reappointment, employment, reemployment, change in status, compensation, or dismissal of the individual if that action applies only to the individual and is not taken regarding a bona fide class or category of employees.
[Sections 11A.058-11A.100 reserved for expansion]
SUBCHAPTER C. CHARTER ISSUANCE AND ADMINISTRATION
Sec. 11A.101. APPLICATION. (a) The State Board of Education shall adopt: (1) an application form and a procedure that must be used to apply for a charter for a public charter district; and (2) criteria to use in selecting a program for which to grant a charter. (b) The application form must provide for including the information required under Section 11A.103 to be contained in a charter. (c) The State Board of Education may approve or deny an application based on criteria it adopts and on financial, governing, and operational standards adopted by the commissioner under this chapter. The criteria the board adopts must include: (1) criteria relating to improving student performance and encouraging innovative programs; and (2) criteria relating to the educational benefit for students residing in the geographic area to be served by the proposed public charter district, as compared to any significant financial difficulty that a loss in enrollment may have on any school district whose enrollment is likely to be affected by the public charter district. (d) A public charter district may not begin operating under this chapter unless the commissioner has certified that the applicant has acceptable administrative and accounting systems and procedures in place for the operation of the proposed public charter district. Sec. 11A.102. NOTIFICATION OF CHARTER APPLICATION. The commissioner by rule shall adopt a procedure for providing notice to each member of the legislature that represents the geographic area to be served by the proposed public charter district, as determined by the commissioner, on receipt by the State Board of Education of an application for a charter for a public charter district under Section 11A.101. Sec. 11A.103. CONTENT. (a) Each charter granted under this chapter must: (1) describe the educational program to be offered, which must include the required curriculum as provided by Section 28.002; (2) establish educational goals, which must include acceptable student performance as determined under Chapter 39; (3) specify the grade levels to be offered, which must be sufficient to permit the agency to assign an accountability rating under Chapter 39; (4) describe the facilities to be used; (5) describe the geographical area served by the program, which may not be statewide; and (6) specify any type of enrollment criteria to be used. (b) A charter holder of a public charter district shall consider including in the district's charter a requirement that the district develop and administer personal graduation plans under Section 28.0212. (c) The terms of a charter may not include plans for future increases in student enrollment, grades levels, campuses, or geographical area, except that: (1) the charter may contain a plan for adding grade levels as necessary to comply with Section 11A.253(c) or (d); and (2) the commissioner may approve such an increase in a charter revision request under Section 11A.106. Sec. 11A.104. FORM. A charter for a public charter district shall be in the form of a license issued by the State Board of Education to the charter holder. Sec. 11A.1041. GRANT OF CHARTER REQUIRED FOR CERTAIN ENTITIES. (a) Notwithstanding Section 11A.101, the commissioner shall immediately grant a charter under this chapter to the following entities on or before August 1, 2006: (1) an eligible entity holding a charter granted before September 1, 2002, under Subchapter D, Chapter 12, as that subchapter existed on January 1, 2005, if: (A) for fiscal years 2004 and 2005, the entity had total assets that exceeded total liabilities, as determined by the entity's annual audit report under Section 44.008; (B) at least 25 percent of all students enrolled at the entity's open-enrollment charter school and administered an assessment instrument under Section 39.023(a), (c), or (l) performed satisfactorily on the assessment instrument in mathematics, as determined by the school's assessment instrument results for the 2005-2006 school year; and (C) at least 25 percent of all students enrolled at the entity's open-enrollment charter school and administered an assessment instrument under Section 39.023(a), (c), or (l) performed satisfactorily on the assessment instrument in reading or English language arts, as applicable, as determined by the school's assessment instrument results for the 2005-2006 school year; (2) a governmental entity holding a charter under Subchapter D, Chapter 12, as that subchapter existed on January 1, 2005; (3) an eligible entity holding a charter under Subchapter D, Chapter 12, as that subchapter existed on January 1, 2005, if at least 85 percent of students enrolled in the school reside in a residential facility; and (4) an eligible entity granted a charter on or after September 1, 2002, under Subchapter D, Chapter 12, as that subchapter existed on January 1, 2005. (b) Assessment instrument results for fewer than five students are not considered for purposes of Subsection (a)(1)(B) or (C). (c) The commissioner shall determine which entities are eligible for a charter under this section as soon as practicable. (d) The content and terms of a charter granted to an eligible entity under this section must be the same as those under which the entity operated under Subchapter D, Chapter 12, as that subchapter existed on January 1, 2005, except that where the terms conflict with this chapter, this chapter prevails. (e) An eligible entity holding multiple charters prior to January 1, 2005, may not combine those charters into one charter for a public charter district but must retain each of those charters which count towards the limit imposed under Section 11A.002(c). (f) Section 11A.157 does not apply to an entity granted a charter under this section. (g) A decision of the commissioner under this section is not subject to a hearing or an appeal to a district court. (h) This section expires January 1, 2008. Sec. 11A.1042. DETERMINATION OF ACCEPTABLE PERFORMANCE. (a) For purposes of Section 11A.1041(a), the commissioner shall compute the percentage of students who performed satisfactorily on an assessment instrument in a manner consistent with this section. (b) The commissioner may only consider the performance of a student who was enrolled as of the date for reporting enrollment for the fall semester under the Public Education Information Management System (PEIMS). (c) In computing performance under this section, the commissioner must: (1) add the results for third through 11th grade assessment instruments in English and third through sixth grade assessment instruments in Spanish across grade levels tested at all campuses operated by the charter holder and evaluate those results for all students; (2) combine the results for third through ninth grade assessment instruments in reading and 10th and 11th grade assessment instruments in English language arts and evaluate those results as a single subject; and (3) separately determine student performance for reading and mathematics as a percentage equal to the sum of students who performed satisfactorily on the specific subject area assessment instrument in all grade levels tested at all campuses operated by the charter holder divided by the number of students who took the specific subject area assessment instrument in grade levels tested at all campuses operated by the charter holder. (d) To the extent consistent with this section, the commissioner shall use the methodology used to compute passing rates for reading and mathematics assessment instruments for purposes of determining accountability ratings under Chapter 39 for the 2004-2005 school year as provided by 19 T.A.C. Section 97.1002. (e) This section expires January 1, 2008. Sec. 11A.105. CHARTER GRANTED. Each charter the State Board of Education grants for a public charter district must: (1) satisfy this chapter; and (2) include the information that is required under Section 11A.103 consistent with the information provided in the application and any modification the board requires. Sec. 11A.106. REVISION. (a) A revision of a charter of a public charter district may be made only with the approval of the commissioner. (b) Not more than once each year, a public charter district may request approval to revise the maximum student enrollment described by the district's charter. (c) The commissioner may not approve a charter revision that increases a public charter district's enrollment, increases the grade levels offered, increases the number of campuses, or changes the boundaries of the geographic area served by the program unless the commissioner determines that: (1) the public charter district has operated one or more campuses for at least three school years; (2) each campus operated by the public charter district has been rated at least academically acceptable under Subchapter D, Chapter 39, for each of its most recent three years of operation; (3) each campus operated by the public charter district has achieved performance levels that are at least five percentage points above the applicable accountability standard for academically acceptable performance on statewide assessments under Subchapter D, Chapter 39, as determined by the commissioner, for all tested subjects for each of its most recent two years of operation; (4) the public charter district has been rated superior, above standard, standard, or the equivalent, under the financial accountability system under Subchapter I, Chapter 39; (5) during the three years preceding the proposed charter revision, the public charter district and its campuses have not been subject to an intervention or sanction under Subchapter D, Chapter 39, including an intervention or sanction related to: (A) the quality of data or reports required by state or federal law or court order; (B) high school graduation requirements under Section 28.025; or (C) the effectiveness of programs for special student populations; and (6) the charter revision is in the best interest of students of this state. (d) In making a determination under Subsection (c)(6), the commissioner shall review all available information relating to the charter holder, including the charter holder's: (1) academic and financial performance; (2) history of compliance with applicable laws; (3) staffing, financial, and organizational data; and (4) any other information regarding the charter holder's capacity to successfully implement the requested charter revision. (e) The commissioner may not approve a charter revision that proposes an increase in: (1) a public charter district's enrollment, unless the charter holder adopts a business plan for implementing the enrollment increase that includes components identified by the commissioner; or (2) the grade levels offered by a public charter district, unless the charter holder adopts an educational plan for the additional grade levels that includes components identified by the commissioner. (f) The commissioner may approve a charter revision authorizing a public charter district to serve students in a geographical area that is not contiguous with the existing boundaries of the district, but may not approve a statewide geographical boundary. Sec. 11A.107. BASIS FOR MODIFICATION, PLACEMENT ON PROBATION, OR REVOCATION. (a) The commissioner may modify, place on probation, or revoke the charter of a public charter district if the commissioner determines under Section 11A.108 that the charter holder: (1) committed a material violation of the charter; (2) failed to satisfy generally accepted accounting standards of fiscal management; (3) failed to protect the health, safety, welfare, or best interests of the students enrolled at the public charter district; or (4) failed to comply with this chapter or another applicable law or rule. (b) The commissioner shall revoke the charter of a public charter district without a hearing if: (1) in two consecutive years, the public charter district: (A) is rated academically unacceptable under Subchapter D, Chapter 39; or (B) is rated financially unacceptable by the commissioner under Subchapter I, Chapter 39; or (2) all campuses operated by the public charter district have been ordered closed under Section 39.131(a) or 39.132(b). (c) A revocation under Subsection (b)(1) is effective on January 1 following the school year in which the public charter district received a second unacceptable rating. Sec. 11A.108. PROCEDURE FOR MODIFICATION, PLACEMENT ON PROBATION, OR REVOCATION. (a) The commissioner shall adopt a procedure to be used for modifying, placing on probation, or revoking the charter of a public charter district under Section 11A.107(a). (b) The procedure adopted under Subsection (a) must provide an opportunity for a hearing to the charter holder. Sec. 11A.109. APPEAL OF MODIFICATION, PLACEMENT ON PROBATION, OR REVOCATION. A charter holder may appeal a modification, placement on probation, or revocation under this subchapter only in the manner provided by the applicable procedures adopted by the commissioner under Section 11A.108. The charter holder may not otherwise appeal to the commissioner and may not appeal to a district court. Sec. 11A.110. EFFECT OF REVOCATION OR SURRENDER OF CHARTER. If the commissioner revokes a charter of a public charter district, if a district is ordered closed under Chapter 39, or if a public charter district surrenders its charter, the district may not: (1) continue to operate under this chapter; or (2) receive state funds under this chapter.
[Sections 11A.111-11A.150 reserved for expansion]
SUBCHAPTER D. POWERS AND DUTIES OF GOVERNING BODIES OF
CHARTER HOLDERS, PUBLIC CHARTER DISTRICTS, AND MANAGEMENT COMPANIES
Sec. 11A.151. RESPONSIBILITY FOR PUBLIC CHARTER DISTRICT. The governing body of a charter holder is responsible for the management, operation, and accountability of the public charter district, regardless of whether the governing body delegates the governing body's powers and duties to another person. Sec. 11A.152. COMPOSITION OF GOVERNING BODY OF CHARTER HOLDER. The governing body of a charter holder must be composed of at least five members. Sec. 11A.153. RESTRICTIONS ON SERVING AS MEMBER OF GOVERNING BODY OF CHARTER HOLDER OR PUBLIC CHARTER DISTRICT OR AS OFFICER OR EMPLOYEE. (a) Except as provided by Subsection (b), a person may not serve as a member of the governing body of a charter holder, as a member of the governing body of a public charter district, or as an officer or employee of a public charter district if the person: (1) has been convicted of a felony or a misdemeanor involving moral turpitude; (2) has been convicted of an offense listed in Section 37.007(a); (3) has been convicted of an offense listed in Article 62.01(5), Code of Criminal Procedure; or (4) has a substantial interest in a management company. (b) A person who has been convicted of an offense described by Subsection (a)(1), (2), or (3) may serve as a member of the governing body of a charter holder, as a member of the governing body of a public charter district, or as an officer or employee of a public charter district if the commissioner determines that the person is fit to serve in that capacity. In making a determination under this subsection, the commissioner shall consider: (1) the factors described by Section 53.022, Occupations Code, for determining the extent to which a conviction relates to an occupation; (2) the factors described by Section 53.023, Occupations Code, for determining the fitness of a person to perform the duties and discharge the responsibilities of an occupation; and (3) other appropriate factors, as determined by the commissioner. (c) For purposes of Subsection (a)(4), a person has a substantial interest in a management company if the person or a relative within the third degree by consanguinity or affinity, as determined under Chapter 573, Government Code: (1) has a controlling interest in the company; (2) owns more than 10 percent of the voting interest in the company; (3) owns more than $25,000 of the fair market value of the company; (4) has a direct or indirect participating interest by shares, stock, or otherwise, regardless of whether voting rights are included, in more than 10 percent of the profits, proceeds, or capital gains of the company; (5) is a member of the board of directors or other governing body of the company; (6) serves as an elected officer of the company; or (7) is an employee of the company. Sec. 11A.154. LIABILITY OF MEMBERS OF GOVERNING BODY OF CHARTER HOLDER. (a) Notwithstanding the Texas Non-Profit Corporation Act (Article 1396-1.01 et seq., Vernon's Texas Civil Statutes), Chapter 22, Business Organizations Code, or other law, on request of the commissioner, the attorney general shall bring suit against a member of the governing body of a charter holder for breach of a fiduciary duty by the member, including misapplication of public funds. (b) The attorney general may bring suit under Subsection (a) for: (1) damages; (2) injunctive relief; or (3) any other equitable remedy determined to be appropriate by the court. (c) This section is cumulative of all other remedies. Sec. 11A.155. TRAINING FOR MEMBERS OF GOVERNING BODY OF CHARTER HOLDER. (a) The commissioner shall adopt rules prescribing training for members of governing bodies of charter holders. (b) The rules adopted under Subsection (a) may: (1) specify the minimum amount and frequency of the training; (2) require the training to be provided by: (A) the agency and regional education service centers; (B) entities other than the agency and service centers, subject to approval by the commissioner; or (C) both the agency, service centers, and other entities; and (3) require training to be provided concerning: (A) basic school law, including school finance; (B) health and safety issues; (C) accountability requirements related to the use of public funds; and (D) other requirements relating to accountability to the public, such as open meetings requirements under Chapter 551, Government Code, and public information requirements under Chapter 552, Government Code. Sec. 11A.156. BYLAWS; ANNUAL REPORT. (a) A charter holder shall file with the State Board of Education a copy of its articles of incorporation and bylaws, or comparable documents if the charter holder does not have articles of incorporation or bylaws, within the period and in the manner prescribed by the board. (b) Each public charter district shall file annually with the State Board of Education the following information in a form prescribed by the board: (1) the name, address, and telephone number of each officer and member of the governing body of the charter holder; and (2) the amount of annual compensation the public charter district pays to each officer and member of the governing body. Sec. 11A.157. QUARTERLY FINANCIAL REPORTS REQUIRED. During a public charter district's first year of operation, the charter holder shall submit quarterly financial reports to the commissioner. The commissioner by rule shall determine the form and content of the financial reports under this section. Sec. 11A.158. PEIMS INFORMATION. The governing body of a public charter district shall comply with Section 42.006. Sec. 11A.159. LIABILITY OF MANAGEMENT COMPANY. (a) A management company that provides management services to a public charter district is liable for damages incurred by the state or a school district as a result of the failure of the company to comply with its contractual or other legal obligation to provide services to the district. (b) On request of the commissioner, the attorney general may bring suit on behalf of the state against a management company liable under Subsection (a) for: (1) damages, including any state funding received by the company and any consequential damages suffered by the state; (2) injunctive relief; or (3) any other equitable remedy determined to be appropriate by the court. (c) This section is cumulative of all other remedies and does not affect: (1) the liability of a management company to the charter holder; or (2) the liability of a charter holder, a member of the governing body of a charter holder, or a member of the governing body of a public charter district to the state. Sec. 11A.160. LOANS FROM MANAGEMENT COMPANY PROHIBITED. (a) The charter holder or the governing body of a public charter district may not accept a loan from a management company that has a contract to provide management services to: (1) the district; or (2) another public charter district that operates under a charter granted to the charter holder. (b) A charter holder or the governing body of a public charter district that accepts a loan from a management company may not enter into a contract with that management company to provide management services to the district. Sec. 11A.161. CONTRACT FOR MANAGEMENT SERVICES. Any contract, including a contract renewal, between a public charter district and a management company proposing to provide management services to the district must require the management company to maintain all records related to the management services separately from any other records of the management company. Sec. 11A.162. CERTAIN MANAGEMENT SERVICES CONTRACTS PROHIBITED. The commissioner may prohibit, deny renewal of, suspend, or revoke a contract between a public charter district and a management company providing management services to the district if the commissioner determines that the management company has: (1) failed to provide educational or related services in compliance with the company's contractual or other legal obligation to any public charter district in this state or to any other similar entity in another state; (2) failed to protect the health, safety, or welfare of the students enrolled at a public charter district served by the company; (3) violated this chapter or a rule adopted under this chapter; or (4) otherwise failed to comply with any contractual or other legal obligation to provide services to the district.
[Sections 11A.163-11A.200 reserved for expansion]
SUBCHAPTER E. FUNDING AND FINANCIAL OPERATIONS
Sec. 11A.201. STATE FUNDING. (a) To the extent consistent with Subsection (c), a charter holder is entitled to receive for the public charter district funding under Chapter 42 as if the public charter district were a school district without a local share for purposes of Section 42.253 and without any local revenue ("LR") for purposes of Section 42.302. In determining funding for a public charter district, adjustments under Sections 42.102, 42.103, and 42.105 and the district enrichment tax rate ("DTR") under Section 42.302 are based on the average adjustment and average district enrichment tax rate for the state. (a-1) Notwithstanding Subsection (a), an entity granted a charter under Section 11A.1041 is entitled to receive funding for each student in weighted average daily attendance in an amount equal to the greater of the amount determined under Subsection (a) or the amount to which the entity was entitled for the 2003-2004 or 2004-2005 school year, as determined by the commissioner. A determination of the commissioner under this subsection is final and not subject to appeal. This subsection expires September 1, 2013. (b) To the extent consistent with Subsection (c), a public charter district is entitled to funds that are available to school districts from the agency or the commissioner in the form of grants or other discretionary funding unless the statute authorizing the funding explicitly provides that a public charter district is not entitled to the funding. (c) A charter holder is entitled to receive for a public charter district funding under this section only if the holder: (1) provides information for the Public Education Information Management System (PEIMS) as required by this chapter; (2) submits to the commissioner appropriate fiscal and financial records as required by this chapter and the commissioner; and (3) receives an annual unqualified opinion in the standard report filed pursuant to Section 11A.210. (d) The commissioner shall suspend the funding of a charter holder that fails to comply with Subsection (c) until the commissioner determines that the charter holder is in compliance or has cured any noncompliance and has adopted adequate procedures to prevent future noncompliance. (e) The commissioner may adopt rules to provide and account for state funding of public charter districts under this section. A rule adopted under this section may be similar to a provision of this code that is not similar to Section 11A.052(b) if the commissioner determines that the rule is related to financing of public charter districts and is necessary or prudent to provide or account for state funds. Sec. 11A.2011. ADDITIONAL STATE AID FOR CERTAIN STAFF SALARIES. (a) This section applies only to a charter holder that on January 1, 2005: (1) operated an open-enrollment charter school under former Subchapter D, Chapter 12; and (2) participated in the program under Chapter 1579, Insurance Code. (b) In addition to any amounts to which a charter holder is entitled under this chapter, a charter holder is entitled to state aid in an amount, as determined by the commissioner, equal to the sum of: (1) the product of $1,000 multiplied by the number of the following employees employed by the charter holder at a public charter district: (A) classroom teachers, full-time librarians, and full-time counselors certified under Subchapter B, Chapter 21; and (B) full-time school nurses appropriately licensed under Chapter 301, Occupations Code; (2) the product of $500 multiplied by the number of full-time public charter district employees, other than administrators or employees described by Subdivision (1); and (3) the product of $250 multiplied by the number of part-time public charter district employees. Sec. 11A.202. INSTRUCTIONAL FACILITIES ALLOTMENTS. (a) In this section, "instructional facility" has the meaning assigned by Section 46.001. (b) A charter holder is initially eligible for instructional facilities allotments in accordance with this section if: (1) any campus of a public charter district for which the charter holder has been granted a license has for two consecutive school years been rated exemplary or recognized under Subchapter D, Chapter 39, or has performed at a comparable level, as determined by the commissioner for purposes of this section; and (2) on the most recent audit of the financial operations of the district conducted pursuant to Section 11A.210, the district has satisfied generally accepted accounting standards of fiscal management as evidenced by an unqualified opinion in the standard report issued and filed pursuant to Section 11A.210. (c) Once a public charter district satisfies the initial eligibility requirements under Subsection (b) and receives an allotment under this section, the district continues to remain eligible until the district receives an accountability rating of unacceptable under Subchapter D, Chapter 39, at which point the district is again subject to the eligibility requirements of Subsection (b). (d) The commissioner annually shall review the eligibility of a public charter district campus for purposes of this section. (e) Except as otherwise provided by this section, a charter holder is entitled to an annual allotment in an amount determined by the commissioner, not to exceed $1,000 or a different amount provided by appropriation, for each student in average daily attendance during the preceding year at a campus of a public charter district for which the charter holder has been granted a charter that is eligible for an allotment under this section. (f) A charter holder who receives funds under this section may use the funds only to: (1) purchase real property on which to construct an instructional facility for a public charter district campus for which the funds were paid under Subsection (e); (2) purchase, lease, construct, expand, or renovate instructional facilities for a public charter district campus for which the funds were paid under Subsection (e); (3) pay debt service in connection with instructional facilities purchased or improved for a campus of the public charter district that meets the requirements under Subsection (b); or (4) maintain and operate public charter district instructional facilities. (g) A decision of the commissioner under Subsection (e) is final and may not be appealed. (h) The commissioner shall by rule establish procedures to ensure that funds a charter holder claims to be using for purposes of Subsection (f)(3) are used only for that purpose. Sec. 11A.203. STATUS AND USE OF FUNDS. (a) Funds received under Section 11A.201 or 11A.202 by a charter holder: (1) are considered to be public funds for all purposes under state law; (2) are held in trust by the charter holder for the benefit of this state and the students of the public charter district; (3) may be used only for a purpose for which a school may use local funds under Section 45.105(c) in the case of funds received under Section 11A.201, and may be used only for a purpose specified under Section 11A.202(f) in the case of funds received under Section 11A.202; and (4) pending their use, must be deposited into a bank, as defined by Section 45.201, with which the charter holder has entered into a depository contract under Section 11A.204. (b) Funds deposited under Subsection (a)(4) may be directly deposited into an account controlled by a bond trustee acting for the charter holder pursuant to a bond indenture agreement requiring direct deposit. (c) The commissioner shall adopt rules for identifying public funds in accordance with Subsection (a). (d) The commissioner may bring an action in district court in Travis County for injunctive or other relief to enforce this section. In identifying public funds held by a charter holder, the court shall use the criteria adopted by the commissioner under Subsection (c). Except as otherwise provided by this subsection, the court shall enter any order under this subsection concerning public funds held by the charter holder necessary to best serve the interests of the students of a public charter district. In the case of a public charter district that has ceased to operate, the court shall enter any order under this subsection concerning public funds held by the charter holder necessary to best serve the interests of this state. Sec. 11A.204. DEPOSITORY CONTRACT; BOND. (a) Each bank selected as a school depository and the charter holder shall enter into a depository contract, bond, or other necessary instrument setting forth the duties and agreements pertaining to the depository, in a form and with the content prescribed by the State Board of Education. (b) The depository bank shall attach to the contract and file with the charter holder a bond in an initial amount equal to the estimated highest daily balance, determined by the charter holder, of all deposits that the charter holder will have in the depository during the term of the contract, less any applicable Federal Deposit Insurance Corporation insurance. The bond must be payable to the charter holder and must be signed by the depository bank and by a surety company authorized to engage in business in this state. The depository bank shall increase the amount of the bond if the charter holder determines the increase is necessary to adequately protect the funds of the charter holder deposited with the depository bank. (c) The bond shall be conditioned on: (1) the faithful performance of all duties and obligations imposed by law on the depository; (2) the payment on presentation of all checks or drafts on order of the charter holder, in accordance with its orders entered by the charter holder according to law; (3) the payment on demand of any demand deposit in the depository; (4) the payment, after the expiration of the period of notice required, of any time deposit in the depository; (5) the faithful keeping of school funds by the depository and the accounting for the funds according to law; and (6) the faithful paying over to the successor depository all balances remaining in the accounts. (d) The bond and the surety on the bond must be approved by the charter holder. A premium on the depository bond may not be paid out of charter holder funds related to operation of the public charter district. (e) The charter holder shall file a copy of the depository contract and bond with the agency. (f) Instead of the bond required under Subsection (b), the depository bank may deposit or pledge, with the charter holder or with a trustee designated by the charter holder, approved securities, as defined by Section 45.201, in an amount sufficient to adequately protect the funds of the charter holder deposited with the depository bank. A depository bank may give a bond and deposit or pledge approved securities in an aggregate amount sufficient to adequately protect the funds of the charter holder deposited with the depository bank. The charter holder shall periodically designate the amount of approved securities or the aggregate amount of the bond and approved securities necessary to adequately protect the charter holder. The charter holder may not designate an amount less than the balance of charter holder funds on deposit with the depository bank from day to day, less any applicable Federal Deposit Insurance Corporation insurance. The depository bank may substitute approved securities on obtaining the approval of the charter holder. For purposes of this subsection, the approved securities are valued at their market value. Sec. 11A.205. EFFECT OF ACCEPTING STATE FUNDING. A charter holder who accepts state funds under Section 11A.201 or 11A.202 agrees to be subject to all requirements, prohibitions, and sanctions authorized under this chapter. Sec. 11A.206. PROPERTY PURCHASED OR LEASED WITH STATE FUNDS. (a) Property purchased or leased with funds received by a charter holder under Section 11A.201 or 11A.202: (1) is considered to be public property for all purposes under state law; (2) is held in trust by the charter holder for the benefit of this state and the students of the public charter district; and (3) may be used only for a purpose for which a school district may use school district property. (b) The commissioner shall: (1) take possession and assume control of the property described by Subsection (a) of a public charter district that ceases to operate; and (2) supervise the disposition of the property in accordance with law. (c) This section does not affect the priority of a security interest in or lien on property established by a creditor in compliance with law if the security interest or lien arose in connection with the sale or lease of the property to the charter holder. (d) The commissioner shall adopt rules for identifying public property in accordance with Subsection (a). (e) The commissioner may bring an action in district court in Travis County for injunctive or other relief to enforce this section. In identifying public property held by a charter holder, the court shall use the criteria adopted by the commissioner under Subsection (d). Except as otherwise provided by this subsection, the court shall enter any order under this subsection concerning public property held by the charter holder necessary to best serve the interests of the students of a public charter district. In the case of a public charter district that has ceased to operate, the court shall enter any order under this subsection concerning public property held by the charter holder necessary to best serve the interests of this state. The court may order title to real or personal public property held by the charter holder transferred to a trust established for the purpose of managing the property or may make other disposition of the property necessary to best serve the interests of this state. Sec. 11A.207. USE OF MUNICIPAL FUNDS FOR PUBLIC CHARTER DISTRICT LAND OR FACILITIES. A municipality to which a charter is granted under this chapter may borrow funds, issue obligations, or otherwise spend its funds to acquire land or acquire, construct, expand, or renovate school buildings or facilities and related improvements for its public charter district within the city limits of the municipality in the same manner the municipality is authorized to borrow funds, issue obligations, or otherwise spend its funds in connection with any other public works project. Sec. 11A.208. TEXTBOOK FUNDING. A public charter district is entitled to funding for textbooks under Chapter 31 and is subject to that chapter as if the public charter district were a school district. Sec. 11A.209. ANNUAL BUDGET. The governing body of a public charter district shall annually adopt a budget for the district. Sec. 11A.210. ANNUAL AUDIT. The governing body of a public charter district shall conduct an annual audit in a manner that complies with Section 44.008.
[Sections 11A.211-11A.250 reserved for expansion]
SUBCHAPTER F. OPERATION OF PUBLIC SCHOOL CHARTER DISTRICT
Sec. 11A.251. ADMISSION POLICY. (a) A public charter district may not discriminate in admission policy on the basis of sex, national origin, ethnicity, religion, disability, or academic, artistic, or athletic ability or the district the child would otherwise attend in accordance with this code. (b) A public charter district admission policy may provide for the exclusion of a student who has a documented history of a criminal offense, a juvenile court adjudication, or discipline problems under Subchapter A, Chapter 37. Sec. 11A.252. ADMISSION OF STUDENTS. (a) For admission to a public charter district campus, the governing body of the district shall: (1) require the applicant to complete and submit an application not later than a reasonable deadline the district establishes; and (2) on receipt of more acceptable applications for admission under this section than available positions in the school: (A) fill the available positions by lottery; or (B) subject to Subsection (b), fill the available positions in the order in which applications received before the application deadline were received. (b) A public charter district may fill applications for admission under Subsection (a)(2)(B) only if the district published a notice of the opportunity to apply for admission to the district. A notice published under this subsection must: (1) state the application deadline; and (2) be published in a newspaper of general circulation in the community in which the district campus is located not later than the seventh day before the application deadline. (c) A public charter district may exempt an applicant from the requirements of Subsection (a)(2) if the applicant is: (1) the child or grandchild of a member of the governing body of the charter holder at the time the district's charter was first granted; (2) the child of an employee of the district or the charter holder; or (3) a sibling of a student who is enrolled in the district. Sec. 11A.253. STUDENT ENROLLMENT. (a) Except as provided by Subsection (b) or as otherwise determined impracticable by the commissioner, during a public charter district's first year of operation, the district must have a student enrollment of at least 100 and not more than 500 at any time during the school year. (b) A public charter district may have a student enrollment of less than 100 if approved by the commissioner. (c) Not later than a public charter district's third year of operation, at least 25 percent of the district's students must be enrolled in one or more grade levels for which assessment instruments are administered under Section 39.023(a). (d) The commissioner may grant a waiver from the requirements of Subsection (c) for a public charter district that opens a campus serving prekindergarten or kindergarten students and agrees to: (1) add at least one higher grade level class each school year after opening the campus; and (2) until the campus complies with Subsection (c), adopt accountability measures to assess the performance of the students not assessed under Section 39.023(a). (e) The commissioner may grant a waiver from the requirements of Subsection (c) for a public charter district that was operating an open-enrollment charter school campus on January 1, 2005, serving prekindergarten, kindergarten, and first, second, and third grade students if the public charter district: (1) adopts one or more nationally norm-referenced assessment instruments approved by the commissioner; (2) administers the assessment instruments to its second grade students at intervals and in the manner specified by commissioner rule; and (3) meets the applicable standards for student performance on the assessment instruments, as determined by commissioner rule. (f) The commissioner shall adopt rules necessary to implement this section. Sec. 11A.254. TUITION AND FEES RESTRICTED. (a) A public charter district may not charge tuition to an eligible student who applies for admission to the district under this chapter. (b) The governing body of a public charter district may require a student to pay any fee that the board of trustees of a school district may charge under Section 11.158(a). The governing body may not require a student to pay a fee that the board of trustees of a school district may not charge under Section 11.158(b). Sec. 11A.255. TRANSPORTATION. A public charter district shall provide transportation to each student attending the school to the same extent a school district is required by law to provide transportation to district students. Sec. 11A.256. REMOVAL OF STUDENTS TO DISCIPLINARY ALTERNATIVE EDUCATION PROGRAM; EXPULSION OF STUDENTS. (a) The governing body of a public charter district shall adopt a code of conduct for the district or for each campus in the district. (b) The code of conduct must include: (1) standards for student behavior, including the types of prohibited behaviors and the possible consequences of misbehavior; and (2) the district's due process procedures regarding expulsion of a student. (c) A final decision of the governing body of a public charter district regarding action taken under the code of conduct may not be appealed. (d) A public charter district may not expel a student for a reason that is not authorized by Section 37.007 or specified in the district's code of conduct as conduct that may result in expulsion. (e) Section 37.002 does not apply to a public charter district except to the extent specified by the governing body of the public charter district in the district's code of conduct.
[Sections 11A.257-11A.300 reserved for expansion]
SUBCHAPTER G. PUBLIC CHARTER DISTRICT EMPLOYEES
Sec. 11A.301. MINIMUM TEACHER QUALIFICATIONS. (a) Except as otherwise required by this section or chapter, a person employed as a teacher by a public charter district must hold a high school diploma. (b) To the extent required by federal law, including 20 U.S.C. 7801(11), a person employed as a teacher by a public charter district must hold a baccalaureate degree. Sec. 11A.302. NOTICE OF PROFESSIONAL EMPLOYEE QUALIFICATIONS. (a) Each public charter district shall provide to the parent or guardian of each student enrolled at a campus in the district written notice of the qualifications of each professional employee, including each teacher, employed at the campus. (b) The notice must include: (1) any professional or educational degree held by the employee; (2) a statement of any certification under Subchapter B, Chapter 21, held by the employee; and (3) any relevant experience of the employee. Sec. 11A.303. COLLECTION OF FINGERPRINTS REQUIRED. The governing body of a public charter district shall obtain a complete set of fingerprints from each person described by Section 21.0032(a). Sec. 11A.304. CRIMINAL HISTORY AND DISCIPLINARY HISTORY OF CERTAIN APPLICANTS. A public charter district must comply with Section 21.0032 before employing or otherwise securing the services of a person as a teacher, teacher intern or trainee, librarian, educational aide, administrator, or counselor, regardless of whether the applicant is certified under Subchapter B, Chapter 21. Sec. 11A.305. MEMBERSHIP IN TEACHER RETIREMENT SYSTEM OF TEXAS. (a) An employee of a public charter district who qualifies for membership in the Teacher Retirement System of Texas shall be covered under the system to the same extent a qualified employee of a school district is covered. (b) For each employee of a public charter district covered under the system, the public charter district is responsible for making any contribution that otherwise would be the legal responsibility of a school district, and the state is responsible for making contributions to the same extent it would be legally responsible if the employee were a school district employee. Sec. 11A.306. WAGE INCREASE FOR CERTAIN PROFESSIONAL STAFF. (a) This section applies only to a charter holder that on January 1, 2005: (1) operated an open-enrollment charter school under former Subchapter D, Chapter 12; and (2) participated in the program under Chapter 1579, Insurance Code. (b) Using state funds received by the charter holder for that purpose under Section 11A.2011, a charter holder each school year shall pay the following employees employed by the charter holder at a public charter district an amount at least equal to: (1) $1,000 for: (A) classroom teachers, full-time librarians, and full-time counselors certified under Subchapter B, Chapter 21; and (B) full-time school nurses appropriately licensed under Chapter 301, Occupations Code; (2) $500 for full-time public charter district employees, other than administrators or employees described by Subdivision (1); and (3) $250 for part-time public charter district employees. (c) A payment under this section is in addition to wages the charter holder would otherwise pay the employee during the school year.
[Sections 11A.307-11A.350 reserved for expansion]
SUBCHAPTER H. POWERS AND DUTIES OF COMMISSIONER
Sec. 11A.351. AUDIT. (a) To the extent consistent with this section, the commissioner may audit the records of: (1) a public charter district or campus; (2) a charter holder; and (3) a management company. (b) An audit under Subsection (a) must be limited to matters directly related to the management or operation of a public charter district, including any financial, student, and administrative records. (c) Unless the commissioner has specific cause to conduct an additional audit, the commissioner may not conduct more than one on-site audit of a public charter district under this section during any fiscal year, including any audit of financial, student, and administrative records. For purposes of this subsection, an audit of a charter holder or management company associated with a public charter district is not considered an audit of the district. Sec. 11A.352. SUBPOENA. (a) The commissioner may issue a subpoena to compel the attendance and testimony of a witness or the production of materials relevant to an audit or investigation under this chapter. (b) A subpoena may be issued throughout the state and may be served by any person designated by the commissioner. (c) If a person fails to comply with a subpoena issued under this section, the commissioner, acting through the attorney general, may file suit to enforce the subpoena in a district court in Travis County or in the county in which the audit or investigation is conducted. The court shall order compliance with the subpoena if the court finds that good cause exists to issue the subpoena. (d) This section expires September 1, 2007. Sec. 11A.353. SANCTIONS. (a) The commissioner shall take any of the actions described by Subsection (b) or by Section 39.131(a), to the extent the commissioner determines necessary, if a public charter district, as determined by a report issued under Section 39.076(b): (1) commits a material violation of the district's charter; (2) fails to satisfy generally accepted accounting standards of fiscal management; or (3) fails to comply with this chapter or another applicable rule or law. (b) The commissioner may temporarily withhold funding, suspend the authority of a public charter district to operate, or take any other reasonable action the commissioner determines necessary to protect the health, safety, or welfare of students enrolled at a district campus based on evidence that conditions at the district campus present a danger to the health, safety, or welfare of the students. (c) After the commissioner acts under Subsection (b), the public charter district may not receive funding and may not resume operating until a determination is made that: (1) despite initial evidence, the conditions at the district campus do not present a danger of material harm to the health, safety, or welfare of students; or (2) the conditions at the district campus that presented a danger of material harm to the health, safety, or welfare of students have been corrected. (d) Not later than the third business day after the date the commissioner acts under Subsection (b), the commissioner shall provide the charter holder an opportunity for a hearing. This subsection does not apply to an action taken by the commissioner under Chapter 39. (e) Immediately after a hearing under Subsection (d), the commissioner must cease the action under Subsection (b) or initiate action under Section 11A.108. Sec. 11A.3531. SUPERVISION OF ADMINISTRATION OF CERTAIN ASSESSMENT INSTRUMENTS. (a) Using funds appropriated for the Foundation School Program, the commissioner shall reduce the total amount of state funds allocated to each district from any source in the same manner described for a reduction in allotments under Section 42.253 and adopt and implement a program for supervising the administration of assessment instruments under Section 39.023 during the 2005-2006 school year at an open-enrollment charter school, other than a school operated by an entity described by Section 11A.1041(a)(2), (3), or (4), at which less than 25 percent of all students enrolled at the school and administered an assessment instrument under Section 39.023(a), (c), or (l) performed satisfactorily on: (1) the assessment instrument in mathematics, as determined by the school's assessment instrument results for the 2004-2005 school year; or (2) the assessment instrument in reading or English language arts, as applicable, as determined by the school's assessment instrument results for the 2004-2005 school year. (b) The program adopted under Subsection (a) must be designed to: (1) ensure that the location at which an assessment instrument is administered is secure and under the supervision of persons who do not have any interest in the results of the assessment instrument; and (2) provide direct supervision of: (A) the transportation of the assessment instrument materials to and from the location at which the instrument is administered; and (B) the administration of the assessment instrument to students. (c) The commissioner may adopt rules necessary to administer this section and may take any action that the commissioner determines necessary to ensure the integrity of the results of an assessment instrument administered at an open-enrollment charter school described by Subsection (a). (d) After deducting the amount withheld under Subsection (a) from the total amount appropriated for the Foundation School Program, the commissioner shall reduce the total amount of state funds allocated to each district from any source in the same manner described for a reduction in allotments under Section 42.253. (e) An open-enrollment charter school's failure to fully cooperate with the commissioner under this section is sufficient grounds for revocation of the district's charter, as determined by the commissioner. (f) This section expires September 1, 2006. Sec. 11A.354. CONSULTATION WITH CHARTER HOLDERS. The commissioner shall periodically consult with representatives of charter holders regarding the duties and mission of the agency relating to the operation of public charter districts. The commissioner shall determine the frequency of the consultations. Sec. 11A.355. EFFECT ON COMMISSIONER'S AUTHORITY. Nothing in this chapter may be construed to limit the commissioner's authority under Chapter 39. Sec. 11A.356. RULES. The commissioner may adopt rules for the administration of this chapter.
[Sections 11A.357-11A.400 reserved for expansion]
SUBCHAPTER I. BLUE RIBBON CHARTER CAMPUS PILOT PROGRAM
Sec. 11A.401. AUTHORIZATION. (a) In this section, "eligible entity" means an organization that is exempt from taxation under Section 501(a), Internal Revenue Code of 1986, as an organization described by Section 501(c)(3) of that code. (b) In accordance with this subchapter, the commissioner may authorize not more than three charter holders to grant a charter to an eligible entity to operate a blue ribbon charter campus if: (1) the charter holder proposes to grant the blue ribbon charter to replicate a distinctive education program; (2) the charter holder has demonstrated the ability to replicate the education program; (3) the education program has been implemented by the charter holder for at least seven school years; and (4) the charter school in which the charter holder has implemented the program has been rated recognized or exemplary under Section 39.072 for at least five school years, including the two school years preceding the proposed issuance of the blue ribbon charter. (b-1) An eligible entity that assumed operation of an existing charter school program during the seven years preceding the proposed authorization under Subsection (b) may be authorized to grant a blue ribbon charter under Subsection (b) if: (1) the performance level of the program at a campus before and after the entity assumed operation of the program meets the qualifications described by Subsection (b); and (2) the entity has met the qualifications described by Subsection (b) since assuming operation of the program. (c) A charter holder may grant a blue ribbon charter only to an applicant that meets any financial, governing, and operational standards adopted by the commissioner under this subchapter. (d) A charter holder may grant not more than two blue ribbon charters under this subchapter. Sec. 11A.402. APPLICABILITY OF CERTAIN LAWS. (a) A blue ribbon charter campus is considered a public charter district campus for purposes of state and federal law. (b) A blue ribbon charter granted under this subchapter is not considered for purposes of the limit on the number of public charter districts imposed by Section 11A.002. Sec. 11A.403. RELATIONSHIP BETWEEN CHARTER HOLDER AND BLUE RIBBON CHARTER CAMPUS. (a) The governing body of the public charter district authorizing a blue ribbon charter is responsible for the management and operation of the campus operated under a blue ribbon charter. A blue ribbon charter campus is subject to the rules and policies of the governing body of the charter holder that granted the blue ribbon charter. (b) For purposes of academic and financial accountability and all other purposes under this chapter and Chapter 39, a blue ribbon charter campus is considered a campus of the public charter district operated by the charter holder that granted the blue ribbon charter. (c) A charter holder is entitled to receive funding for a blue ribbon charter campus as if the blue ribbon charter campus were a campus of the public charter district operated by the charter holder. Sec. 11A.404. APPLICATION FOR AUTHORIZATION. (a) The commissioner by rule shall adopt an application form and procedures for a charter holder to apply for authorization to grant a blue ribbon charter to an eligible entity under this subchapter. (b) The application must specify: (1) the criteria that will be used to grant blue ribbon charters; (2) procedures for governance and management of campuses operating under a blue ribbon charter; and (3) the performance standard by which continuation of a blue ribbon charter will be determined. (c) A determination by the commissioner regarding an application under this section is final and may not be appealed. Sec. 11A.405. REVOCATION OF AUTHORIZATION. (a) The commissioner may revoke a charter holder's authorization to grant a blue ribbon charter or operate a campus granted a blue ribbon charter if the commissioner determines that the purposes of this subchapter are not being satisfied. (b) On revocation of a charter holder's authority under this section, the charter holder shall: (1) operate a campus granted a blue ribbon charter as a standard campus of the charter holder under this chapter; or (2) close the campus effective at the end of the school year in which the commissioner revokes the authorization. Sec. 11A.406. CONTENT. (a) Each blue ribbon charter granted under this subchapter must: (1) describe the educational program to be offered, which may be a general or specialized education program; (2) provide that continuation of the charter is contingent on satisfactory student performance under Subchapter B, Chapter 39, and on compliance with other applicable accountability provisions under Chapter 39; (3) specify any basis, in addition to a basis specified by this subchapter, on which the charter may be placed on probation or revoked; (4) prohibit discrimination in admission on the basis of national origin, ethnicity, race, religion, or disability; (5) describe the governing structure of the blue ribbon charter campus; (6) specify any procedure or requirement, in addition to those under Chapter 38, that the campus will follow to ensure the health and safety of students and employees; and (7) describe the manner in which the campus and charter holder granting the blue ribbon charter will comply with financial and operational requirements, including requirements related to the Public Education Information Management System (PEIMS) under Section 11A.158 and the audit requirements under Section 11A.210. (b) A charter holder may reserve the right to approve contracts, governance alterations, personnel decisions, and other matters affecting the operation of the blue ribbon charter campus. (c) A blue ribbon charter must specify the basis and procedure to be used by the charter holder for placing the blue ribbon charter campus on probation or revoking the charter, which must include an opportunity for an informal review of the blue ribbon charter campus and governing body of the campus by the charter holder. A charter holder's decision to place on probation or revoke a blue ribbon charter is final and may not be appealed. Sec. 11A.407. FORM. A blue ribbon charter issued under this subchapter must be in the form and substance of a written contract signed by the president or equivalent officer of the governing body of the charter holder granting the blue ribbon charter and the president or equivalent officer of the governing body of the eligible entity to which the blue ribbon charter is granted. Sec. 11A.408. REVISION. A blue ribbon charter granted under this subchapter may be revised with the approval of the charter holder that granted the charter.
[Sections 11A.409-11A.450 reserved for expansion]
SUBCHAPTER J. RECEIVERSHIP FOR CERTAIN OPEN-ENROLLMENT CHARTER SCHOOLS
Sec. 11A.451. DEFINITIONS. In this subchapter: (1) "Assets" means: (A) public funds, as determined under Section 12.107, as that section existed on January 1, 2005; and (B) public property, as determined under Section 12.128, as that section existed on January 1, 2005. (2) "Records" means government records, as determined under Section 12.1052, as that section existed on January 1, 2005. Sec. 11A.452. APPLICABILITY. The commissioner shall appoint a receiver under this subchapter for each open-enrollment charter school that on June 1, 2005, was operating under a charter issued under Subchapter D, Chapter 12, as that subchapter existed on January 1, 2005, and: (1) is not authorized to operate as a public charter district under this chapter; or (2) elects not to operate as a public charter district under this chapter. Sec. 11A.453. APPOINTMENT OF RECEIVER; BOND REQUIRED. (a) The commissioner shall appoint a receiver to protect the assets and direct the dissolution of open-enrollment charter schools subject to this subchapter. (b) The receiver shall execute a bond in an amount set by the commissioner to ensure the proper performance of the receiver's duties. (c) Until discharged by the commissioner, the receiver shall perform the duties that the commissioner directs to preserve the assets and direct the dissolution of the open-enrollment charter school under this subchapter. Sec. 11A.454. POWERS AND DUTIES OF RECEIVER. (a) After appointment and execution of bond under Section 11A.453, the receiver shall take possession of: (1) assets and records in the possession of the open-enrollment charter school specified by the commissioner; and (2) any Foundation School Program funds and any other public funds received by the school's charter holder. (b) On request of the receiver, the attorney general shall file a suit for attachment, garnishment, or involuntary bankruptcy and take any other action necessary for the dissolution of an open-enrollment charter school under this subchapter. (c) If the charter holder of an open-enrollment charter school or an officer or employee of such a school refuses to transfer school assets or records to a receiver under this subsection, the receiver may ask the attorney general to petition a court for recovery of the assets or records. If the court grants the petition, the court shall award attorney's fees and court costs to the state. (d) A record described by this section is a public school record for purposes of Section 37.10(c)(2), Penal Code. Sec. 11A.455. DISPOSITION OF ASSETS. (a) A receiver shall wind up the affairs of an open-enrollment charter school and, except as provided by Subsection (b), reduce its assets to cash for the purpose of discharging all existing liabilities and obligations of the school. In winding up the affairs of a school, the receiver shall cooperate in any bankruptcy proceeding affecting the school. The receiver shall distribute any remaining balance to the commissioner. (b) A receiver shall offer free of charge any equipment and supplies of an open-enrollment charter school dissolved under this subchapter to school districts, giving priority to districts based on the percentage of the charter school's students that reside in the districts. (c) The commissioner shall use money in the foundation school fund and money received under this section to pay the costs described by Section 11A.458 and discharge liabilities and obligations of open-enrollment charter schools under this subchapter. The commissioner shall deposit any remaining balance in the foundation school fund. Sec. 11A.456. DISPOSITION OF RECORDS. (a) The records of an open-enrollment charter school subject to this subchapter shall be transferred in the manner specified by the commissioner to a custodian designated by the commissioner. The commissioner may designate any appropriate entity to serve as custodian of records, including the agency, a regional education service center, or a school district. In designating a custodian, the commissioner shall ensure that the transferred records, including student and personnel records, are transferred to a custodian capable of: (1) maintaining the records; (2) making the records readily accessible to students, parents, former school employees, and other persons entitled to access; and (3) complying with applicable state or federal law restricting access to the records. (b) The commissioner is entitled to access to any records transferred to a custodian under this section as the commissioner determines necessary for auditing, investigative, or monitoring purposes. Sec. 11A.457. LIABILITY. A receiver is not personally liable for actions taken by the receiver under this subchapter. Sec. 11A.458. COSTS OF RECEIVERSHIP. The commissioner may authorize reimbursement of reasonable costs related to the receivership, including: (1) payment of fees to the receiver for the receiver's services; and (2) payment of fees to attorneys, accountants, or any other person that provides goods or services necessary to the operation of the receivership. Sec. 11A.459. EXEMPTION FROM COMPETITIVE BIDDING. The competitive bidding requirements of this code and the contracting requirements of Chapter 2155, Government Code, do not apply to the appointment of a receiver, attorney, accountant, or other person appointed under this subchapter. SECTION 4.03. Subchapter D, Chapter 12, Education Code, is amended by adding Section 12.1058 to read as follows: Sec. 12.1058. APPLICABILITY OF PUBLIC CHARTER DISTRICT PROVISIONS. (a) An open-enrollment charter school is subject to Sections 11A.201, 11A.204, 11A.205, 11A.206, 11A.210, 11A.303, 11A.304, 11A.352, 21.0032, and 21.058. (b) The commissioner may bring an action for injunctive or other relief as provided by Section 11A.203(d) to enforce Section 12.107. (c) For purposes of this section, a reference in a law described by this section to a public charter district means an open-enrollment charter school. SECTION 4.04. Sections 12.152 and 12.156, Education Code, are amended to read as follows: Sec. 12.152. AUTHORIZATION. [(a)] In accordance with this subchapter and Chapter 11A [Subchapter D], the State Board of Education may grant a charter on the application of a public senior college or university for a public [an open-enrollment] charter district [school] to operate on the campus of the public senior college or university or in the same county in which the campus of the public senior college or university is located. Sec. 12.156. APPLICABILITY OF CERTAIN PROVISIONS. (a) Except as otherwise provided by this subchapter, Chapter 11A [Subchapter D] applies to a college or university charter school as though the college or university charter school were granted a charter under that chapter [subchapter]. (b) A charter granted under this subchapter is not considered for purposes of the limit on the number of public [open-enrollment] charter districts [schools] imposed by Section 11A.002 [12.101(b)]. (c) A college or university charter school is not subject to a prohibition, restriction, or requirement relating to: (1) open meetings and public information under Section 11A.053; (2) maintenance of records under Section 11A.054; (3) purchasing and contracting under Section 11A.055; (4) conflict of interest under Section 11A.056; (5) nepotism under Section 11A.057; (6) composition of governing body under Section 11A.152; (7) restrictions on serving as a member of a governing body or as an officer or employee under Section 11A.153; (8) liability of members of governing body under Section 11A.154; (9) training for members of governing body under Section 11A.155; (10) bylaws and annual reports under Section 11A.156; (11) quarterly financial reports under Section 11A.157; and (12) depository bond and security requirements under Section 11A.204. (d) A college or university charter school and the governing body of the school are subject to regulations and procedures that govern a public senior college or university relating to open meetings, records retention, purchasing, contracting, conflicts of interest, and nepotism. SECTION 4.05. Section 5.001, Education Code, is amended by adding Subdivision (5-a) and amending Subdivision (6) to read as follows: (5-a) "Public charter campus" means a campus operated by a public charter district. (6) "Public charter district [Open-enrollment charter school]" means a public school authorized by [that has been granted] a charter under Chapter 11A [Subchapter D, Chapter 12]. SECTION 4.06. Section 7.003, Education Code, is amended to read as follows: Sec. 7.003. LIMITATION ON AUTHORITY. An educational function not specifically delegated to the agency or the board under this code is reserved to and shall be performed by school districts or [open-enrollment] charter schools. SECTION 4.07. Subsection (b), Section 7.028, Education Code, as renumbered by H.B. No. 2018, Acts of the 79th Legislature, Regular Session, 2005, effective September 1, 2005, is amended to read as follows: (b) The board of trustees of a school district or the governing body of a public charter district [an open-enrollment charter school] has primary responsibility for ensuring that the district [or school] complies with all applicable requirements of state educational programs. SECTION 4.08. Subdivision (17), Subsection (b), Section 7.055, Education Code, is amended to read as follows: (17) The commissioner shall distribute funds to public charter districts [open-enrollment charter schools] as required under Chapter 11A [Subchapter D, Chapter 12]. SECTION 4.09. Subdivision (9), Subsection (c), Section 7.102, Education Code, is amended to read as follows: (9) The board may grant a charter for a public charter district [an open-enrollment charter or approve a charter revision] as provided by Chapter 11A [Subchapter D, Chapter 12]. SECTION 4.10. Section 12.002, Education Code, is amended to read as follows: Sec. 12.002. CLASSES OF CHARTER. The classes of charter under this chapter are: (1) a home-rule school district charter as provided by Subchapter B; (2) a campus or campus program charter as provided by Subchapter C; or (3) a college or university [an open-enrollment] charter as provided by Subchapter E [D]. SECTION 4.11. Subchapter A, Chapter 21, Education Code, is amended by adding Section 21.0032 to read as follows: Sec. 21.0032. CLEARANCE REQUIRED FOR CERTAIN PUBLIC CHARTER DISTRICT PERSONNEL; APPEAL. (a) A person may not be employed by or serve as a teacher, teacher intern or teacher trainee, librarian, educational aide, administrator, educational diagnostician, or counselor for a public charter district unless the person has been cleared by the State Board for Educator Certification following a national criminal history record review and investigation under this section. (b) Before or immediately after employing or securing the services of a person described by Subsection (a), a public charter district shall send to the State Board for Educator Certification the person's fingerprints and social security number. The person may be employed or serve pending action by the board. (c) The State Board for Educator Certification shall review and investigate the person's national criminal history record information, educator certification discipline history in any state, and other information in the same manner as a review or investigation conducted regarding an initial application for educator certification. If the board finds the person would not be eligible for educator certification, the board shall notify the public charter district in writing that the person may not be employed or serve in a capacity described by Subsection (a). (d) On receipt of written notice under Subsection (c), a public charter district may not employ or permit the person to serve unless the person timely submits a written appeal under this section. The State Board for Educator Certification shall conduct an appeal under this subsection in the same manner as an appeal regarding the denial of an initial application for educator certification. SECTION 4.12. Subsections (b) and (c), Section 21.058, Education Code, are amended to read as follows: (b) Notwithstanding Section 21.041(b)(7), not later than the fifth day after the date the board receives notice under Article 42.018, Code of Criminal Procedure, of the conviction of a person described by Section 21.0032 or who holds a certificate under this subchapter, the board shall: (1) revoke the certificate or clearance held by the person; and (2) provide to the person and to any school district or public charter district [open-enrollment charter school] employing the person at the time of revocation written notice of: (A) the revocation; and (B) the basis for the revocation. (c) A school district or public charter district [open-enrollment charter school] that receives notice under Subsection (b) of the revocation of a certificate issued under this subchapter shall: (1) immediately remove the person whose certificate has been revoked from campus or from an administrative office, as applicable, to prevent the person from having any contact with a student; and (2) as soon as practicable, terminate the employment of the person in accordance with the person's contract and with this subchapter. SECTION 4.13. Subsections (b), (c), and (d), Section 22.083, Education Code, are amended to read as follows: (b) A public charter district may [An open-enrollment charter school shall] obtain from the Department of Public Safety [any law enforcement or criminal justice agency] all criminal history record information that relates to: (1) a person whom the district [school] intends to employ in any capacity; or (2) a person who has indicated, in writing, an intention to serve as a volunteer with the district [school]. (c) A school district, public charter district [open-enrollment charter school], private school, regional education service center, or shared services arrangement may obtain from a federal or state [any] law enforcement or criminal justice agency all criminal history record information that relates to: (1) a volunteer or employee of the district, school, service center, or shared services arrangement; or (2) an employee of or applicant for employment by a person that contracts with the district, school, service center, or shared services arrangement to provide services, if: (A) the employee or applicant has or will have continuing duties related to the contracted services; and (B) the duties are or will be performed on school property or at another location where students are regularly present. (d) The superintendent of a district or the director of a public charter district [an open-enrollment charter school], private school, regional education service center, or shared services arrangement shall promptly notify the State Board for Educator Certification in writing if the person obtains or has knowledge of information showing that an applicant for or holder of a certificate issued under Subchapter B, Chapter 21, has a reported criminal history. SECTION 4.14. Section 22.084, Education Code, is amended to read as follows: Sec. 22.084. ACCESS TO CRIMINAL HISTORY RECORDS OF SCHOOL BUS DRIVERS, BUS MONITORS, AND BUS AIDES. (a) Except as provided by Subsections (c) and (d), a school district, public charter district [open-enrollment charter school], private school, regional education service center, or shared services arrangement that contracts with a person for transportation services shall obtain from the Department of Public Safety [any law enforcement or criminal justice agency] all criminal history record information that relates to: (1) a person employed by the person as a bus driver; or (2) a person the person intends to employ as a bus driver. (b) Except as provided by Subsections (c) and (d), a person that contracts with a school district, public charter district [open-enrollment charter school], private school, regional education service center, or shared services arrangement to provide transportation services shall submit to the district, school, service center, or shared services arrangement the name and other identification data required to obtain criminal history record information of each person described by Subsection (a). If the district, school, service center, or shared services arrangement obtains information that a person described by Subsection (a) has been convicted of a felony or a misdemeanor involving moral turpitude, the district, school, service center, or shared services arrangement shall inform the chief personnel officer of the person with whom the district, school, service center, or shared services arrangement has contracted, and the person may not employ that person to drive a bus on which students are transported without the permission of the board of trustees of the district or service center, the governing body of the public charter district [open-enrollment charter school], or the chief executive officer of the private school or shared services arrangement. (c) A commercial transportation company that contracts with a school district, public charter district [open-enrollment charter school], private school, regional education service center, or shared services arrangement to provide transportation services may obtain from a federal or state [any] law enforcement or criminal justice agency all criminal history record information that relates to: (1) a person employed by the commercial transportation company as a bus driver, bus monitor, or bus aide; or (2) a person the commercial transportation company intends to employ as a bus driver, bus monitor, or bus aide. (d) If the commercial transportation company obtains information that a person employed or to be employed by the company has been convicted of a felony or a misdemeanor involving moral turpitude, the company may not employ that person to drive or to serve as a bus monitor or bus aide on a bus on which students are transported without the permission of the board of trustees of the district or service center, the governing body of the public charter district [open-enrollment charter school], or the chief executive officer of the private school or shared services arrangement. Subsections (a) and (b) do not apply if information is obtained as provided by Subsection (c). SECTION 4.15. Section 22.085, Education Code, is amended to read as follows: Sec. 22.085. DISCHARGE OF EMPLOYEES CONVICTED OF OFFENSES. A school district, public charter district [open-enrollment charter school], private school, regional education service center, or shared services arrangement may discharge an employee if the district or school obtains information of the employee's conviction of a felony or of a misdemeanor involving moral turpitude that the employee did not disclose to the State Board for Educator Certification or the district, school, service center, or shared services arrangement. An employee discharged under this section is considered to have been discharged for misconduct for purposes of Section 207.044, Labor Code. SECTION 4.16. Section 22.086, Education Code, is amended to read as follows: Sec. 22.086. LIABILITY FOR REPORTING OFFENSES. The State Board for Educator Certification, a school district, a public charter district [an open-enrollment charter school], a private school, a regional education service center, a shared services arrangement, or an employee of the board, district, school, service center, or shared services arrangement is not civilly or criminally liable for making a report required under this subchapter. SECTION 4.161. Section 25.087, Education Code, is amended by amending Subsection (b) and adding Subsection (c) to read as follows: (b) A school district shall excuse a student from attending school for: (1) the following purposes, including travel for those purposes: (A) [purpose of] observing religious holy days; (B) appearing at a governmental office to complete paperwork required in connection with the student's application for United States citizenship or to take part in a naturalization oath ceremony; (C) attending an appointment with the student's probation officer; (D) attending an adoption proceeding involving the student; or (E) attending a required court appearance; or (2) a[, including traveling for that purpose. A school district shall excuse a student for] temporary absence resulting from health care professionals if that student commences classes or returns to school on the same day of the appointment. (c) A student whose absence is excused under Subsection (b) [this subsection] may not be penalized for that absence and shall be counted as if the student attended school for purposes of calculating the average daily attendance of students in the school district. A student whose absence is excused under Subsection (b) [this subsection] shall be allowed a reasonable time to make up school work missed on those days. If the student satisfactorily completes the school work, the day of absence shall be counted as a day of compulsory attendance. SECTION 4.17. Section 25.088, Education Code, is amended to read as follows: Sec. 25.088. SCHOOL ATTENDANCE OFFICER. The school attendance officer may be selected by: (1) the county school trustees of any county; (2) the board of trustees of any school district or the boards of trustees of two or more school districts jointly; or (3) the governing body of a public charter district [an open-enrollment charter school]. SECTION 4.18. Subsection (a), Section 25.089, Education Code, is amended to read as follows: (a) An attendance officer may be compensated from the funds of the county, independent school district, or public charter district [open-enrollment charter school], as applicable. SECTION 4.19. Subsection (b), Section 25.090, Education Code, is amended to read as follows: (b) If the governing body of a public charter district [an open-enrollment charter school] has not selected an attendance officer for a district campus, the duties of attendance officer shall be performed by the peace officers of the county in which the campus [school] is located. SECTION 4.20. Subsections (d) and (e), Section 25.093, Education Code, are amended to read as follows: (d) A fine collected under this section shall be deposited as follows: (1) one-half shall be deposited to the credit of the operating fund of, as applicable: (A) the school district in which the child attends school; (B) the public charter district [open-enrollment charter school] the child attends; or (C) the juvenile justice alternative education program that the child has been ordered to attend; and (2) one-half shall be deposited to the credit of: (A) the general fund of the county, if the complaint is filed in the justice court or the constitutional county court; or (B) the general fund of the municipality, if the complaint is filed in municipal court. (e) At the trial of any person charged with violating this section, the attendance records of the child may be presented in court by any authorized employee of the school district or public charter district [open-enrollment charter school], as applicable. SECTION 4.21. Subsections (a) and (b), Section 25.095, Education Code, are amended to read as follows: (a) A school district or public charter district [open-enrollment charter school] shall notify a student's parent in writing at the beginning of the school year that if the student is absent from school on 10 or more days or parts of days within a six-month period in the same school year or on three or more days or parts of days within a four-week period: (1) the student's parent is subject to prosecution under Section 25.093; and (2) the student is subject to prosecution under Section 25.094 or to referral to a juvenile court in a county with a population of less than 100,000 for conduct that violates that section. (b) A school district or public charter district shall notify a student's parent if the student has been absent from school, without excuse under Section 25.087, on three days or parts of days within a four-week period. The notice must: (1) inform the parent that: (A) it is the parent's duty to monitor the student's school attendance and require the student to attend school; and (B) the parent is subject to prosecution under Section 25.093; and (2) request a conference between school officials and the parent to discuss the absences. SECTION 4.22. Subsection (a), Section 25.0951, Education Code, as amended by H.B. No. 1575, Acts of the 79th Legislature, Regular Session, 2005, effective September 1, 2005, and Subsection (b), Section 25.0951, Education Code, are amended to read as follows: (a) If a student fails to attend school without excuse on 10 or more days or parts of days within a six-month period in the same school year, a school district or public charter district shall within seven school days of the student's last absence: (1) file a complaint against the student or the student's parent or both in a county, justice, or municipal court for an offense under Section 25.093 or 25.094, as appropriate, or refer the student to a juvenile court in a county with a population of less than 100,000 for conduct that violates Section 25.094; or (2) refer the student to a juvenile court for conduct indicating a need for supervision under Section 51.03(b)(2), Family Code. (b) If a student fails to attend school without excuse on three or more days or parts of days within a four-week period but does not fail to attend school for the time described by Subsection (a), the school district or public charter district may: (1) file a complaint against the student or the student's parent or both in a county, justice, or municipal court for an offense under Section 25.093 or 25.094, as appropriate, or refer the student to a juvenile court in a county with a population of less than 100,000 for conduct that violates Section 25.094; or (2) refer the student to a juvenile court for conduct indicating a need for supervision under Section 51.03(b)(2), Family Code. SECTION 4.23. Subsection (c), Section 26.006, Education Code, is amended to read as follows: (c) A student's parent is entitled to request that the school district or public charter district [open-enrollment charter school] the student attends allow the student to take home any textbook used by the student. Subject to the availability of a textbook, the school district or public charter district [or school] shall honor the request. A student who takes home a textbook must return the textbook to school at the beginning of the next school day if requested to do so by the student's teacher. In this subsection, "textbook" has the meaning assigned by Section 31.002. SECTION 4.24. Subsections (a), (c), (d), and (e), Section 26.0085, Education Code, are amended to read as follows: (a) A school district or public charter district [open-enrollment charter school] that seeks to withhold information from a parent who has requested public information relating to the parent's child under Chapter 552, Government Code, and that files suit as described by Section 552.324, Government Code, to challenge a decision by the attorney general issued under Subchapter G, Chapter 552, Government Code, must bring the suit not later than the 30th calendar day after the date the school district or public charter district [open-enrollment charter school] receives the decision of the attorney general being challenged. (c) Notwithstanding any other law, a school district or public charter district [open-enrollment charter school] may not appeal the decision of a court in a suit filed under Subsection (a). This subsection does not affect the right of a parent to appeal the decision. (d) If the school district or public charter district [open-enrollment charter school] does not bring suit within the period established by Subsection (a), the school district or public charter district [open-enrollment charter school] shall comply with the decision of the attorney general. (e) A school district or public charter district [open-enrollment charter school] that receives a request from a parent for public information relating to the parent's child shall comply with Chapter 552, Government Code. If an earlier deadline for bringing suit is established under Chapter 552, Government Code, Subsection (a) does not apply. This section does not affect the earlier deadline for purposes of Section 552.353(b)(3), Government Code, [532.353(b)(3)] for a suit brought by an officer for public information. SECTION 4.25. Subsection (j), Section 28.0211, Education Code, is amended to read as follows: (j) A school district [or open-enrollment charter school] shall provide students required to attend accelerated programs under this section with transportation to those programs if the programs occur outside of regular school hours. SECTION 4.26. Subsection (f), Section 29.010, Education Code, is amended to read as follows: (f) This section does not create an obligation for or impose a requirement on a school district [or open-enrollment charter school] that is not also created or imposed under another state law or a federal law. SECTION 4.27. Subsections (a) and (c), Section 29.012, Education Code, are amended to read as follows: (a) Except as provided by Subsection (b)(2), not later than the third day after the date a person 22 years of age or younger is placed in a residential facility, the residential facility shall: (1) if the person is three years of age or older, notify the school district in which the facility is located, unless the facility is a public charter district [an open-enrollment charter school]; or (2) if the person is younger than three years of age, notify a local early intervention program in the area in which the facility is located. (c) For purposes of enrollment in a school, a person who resides in a residential facility is considered a resident of the school district or geographical area served by the public charter district campus [open-enrollment charter school] in which the facility is located. SECTION 4.28. Subsections (c), (d), and (e), Section 29.062, Education Code, are amended to read as follows: (c) Not later than the 30th day after the date of an on-site monitoring inspection, the agency shall report its findings to the school district [or open-enrollment charter school] and to the division of accreditation. (d) The agency shall notify a school district [or open-enrollment charter school] found in noncompliance in writing, not later than the 30th day after the date of the on-site monitoring. The district [or open-enrollment charter school] shall take immediate corrective action. (e) If a school district [or open-enrollment charter school] fails to satisfy appropriate standards adopted by the commissioner for purposes of Subsection (a), the agency shall apply sanctions, which may include the removal of accreditation, loss of foundation school funds, or both. SECTION 4.29. Subsections (a), (b), (b-1), (c), (e), (k), and (l), Section 29.087, Education Code, are amended to read as follows: (a) The agency shall develop a process by which a school district or public charter district [open-enrollment charter school] may apply to the commissioner for authority to operate a program to prepare eligible students to take a high school equivalency examination. (b) Any school district or public charter district [open-enrollment charter school] may apply for authorization to operate a program under this section. As part of the application process, the commissioner shall require a school district or public charter district [or school] to provide information regarding the operation of any similar program during the preceding five years. (b-1) A school district or public charter district [open-enrollment charter school] authorized by the commissioner on or before August 31, 2003, to operate a program under this section may continue to operate that program in accordance with this section. (c) A school district or public charter district [open-enrollment charter school] may not increase enrollment of students in a program authorized by this section by more than five percent of the number of students enrolled in the similar program operated by the school district or public charter district [or school] during the 2000-2001 school year. (e) A school district or public charter district [open-enrollment charter school] shall inform each student who has completed a program authorized by this section of the time and place at which the student may take the high school equivalency examination. Notwithstanding any provision of this section, a student may not take the high school equivalency examination except as authorized by Section 7.111. (k) The board of trustees of a school district or the governing body [board] of a public charter district [an open-enrollment charter school] shall: (1) hold a public hearing concerning the proposed application of the school district or public charter district [or school] before applying to operate a program authorized by this section; and (2) subsequently hold a public hearing annually to review the performance of the program. (l) The commissioner may revoke a school district's or public charter district's [open-enrollment charter school's] authorization under this section after consideration of relevant factors, including performance of students participating in the school district's or public charter district's [or school's] program on assessment instruments required under Chapter 39, the percentage of students participating in the school district's or public charter district's [or school's] program who complete the program and perform successfully on the high school equivalency examination, and other criteria adopted by the commissioner. A decision by the commissioner under this subsection is final and may not be appealed. SECTION 4.30. Subsections (a) through (d), (i), and (j), Section 29.155, Education Code, are amended to read as follows: (a) From amounts appropriated for the purposes of this section, the commissioner may make grants to school districts and public charter districts [open-enrollment charter schools] to implement or expand kindergarten and prekindergarten programs by: (1) operating an existing half-day kindergarten or prekindergarten program on a full-day basis; or (2) implementing a prekindergarten program at a campus that does not have a prekindergarten program. (b) A school district or public charter district [open-enrollment charter school] may use funds received under this section to employ teachers and other personnel for a kindergarten or prekindergarten program and acquire curriculum materials or equipment, including computers, for use in kindergarten and prekindergarten programs. (c) To be eligible for a grant under this section, a school district or public charter district [open-enrollment charter school] must apply to the commissioner in the manner and within the time prescribed by the commissioner. (d) In awarding grants under this section, the commissioner shall give priority to districts and public charter districts [open-enrollment charter schools] in which the level of performance of students on the assessment instruments administered under Section 39.023 to students in grade three is substantially below the average level of performance on those assessment instruments for all school districts in the state. (i) In carrying out the purposes of Subsection (g), a school district or public charter district [open-enrollment charter school] may use funds granted to the school district or public charter district [or school] under this section [subsection] in contracting with another entity, including a private entity. (j) If a school district or public charter district [open-enrollment charter school] returns to the commissioner funds granted under this section, the commissioner may grant those funds to another entity, including a private entity, for the purposes of Subsection (g). SECTION 4.31. Subsection (b), Section 29.905, Education Code, is amended to read as follows: (b) The agency shall make the program available to a school on the request of the board of trustees of [or] the school district of which the school is a part, or if the school is a public charter district [an open-enrollment charter school], on the request of the governing body of the public charter district [school]. SECTION 4.32. Subsection (b), Section 31.021, Education Code, is amended to read as follows: (b) The State Board of Education shall annually set aside out of the available school fund of the state an amount sufficient for the board and[,] school districts[, and open-enrollment charter schools] to purchase and distribute the necessary textbooks for the use of the students of this state for the following school year. The board shall determine the amount of the available school fund to set aside for the state textbook fund based on: (1) a report by the commissioner issued on July 1 or, if that date is a Saturday or Sunday, on the following Monday, stating the amount of unobligated money in the fund; (2) the commissioner's estimate, based on textbooks selected under Section 31.101 and on attendance reports submitted under Section 31.103 by school districts [and open-enrollment charter schools], of the amount of funds, in addition to funds reported under Subdivision (1), that will be necessary for purchase and distribution of textbooks for the following school year; and (3) any amount the board determines should be set aside for emergency purposes caused by unexpected increases in attendance. SECTION 4.33. Subsection (a), Section 31.027, Education Code, is amended to read as follows: (a) A publisher shall provide each school district [and open-enrollment charter school] with information that fully describes each of the publisher's adopted textbooks. On request of a school district, a publisher shall provide a sample copy of an adopted textbook. SECTION 4.34. Section 31.030, Education Code, is amended to read as follows: Sec. 31.030. USED TEXTBOOKS. The State Board of Education shall adopt rules to ensure that used textbooks sold to school districts [and open-enrollment charter schools] are not sample copies that contain factual errors. The rules may provide for the imposition of an administrative penalty in accordance with Section 31.151 against a seller of used textbooks who knowingly violates this section. SECTION 4.35. Section 31.101, Education Code, is amended to read as follows: Sec. 31.101. SELECTION AND PURCHASE OF TEXTBOOKS BY SCHOOL DISTRICTS. (a) Each year, during a period established by the State Board of Education, the board of trustees of each school district [and the governing body of each open-enrollment charter school] shall: (1) for a subject in the foundation curriculum, notify the State Board of Education of the textbooks selected by the board of trustees [or governing body] for the following school year from among the textbooks on the appropriate conforming or nonconforming list; or (2) for a subject in the enrichment curriculum: (A) notify the State Board of Education of each textbook selected by the board of trustees [or governing body] for the following school year from among the textbooks on the appropriate conforming or nonconforming list; or (B) notify the State Board of Education that the board of trustees [or governing body] has selected a textbook that is not on the conforming or nonconforming list. (b) If a school district [or open-enrollment charter school] selects a textbook for a particular subject in the enrichment curriculum and grade level that is not on the conforming or nonconforming list, the state shall pay to the district [or school] an amount equal to the lesser of: (1) 70 percent of the cost to the district of the textbook, multiplied by the number of textbooks the district [or school] needs for that subject and grade level; or (2) 70 percent of the limitation established under Section 31.025 for a textbook for that subject and grade level, multiplied by the number of textbooks the district [or school] needs for that subject and grade level. (c) A school district [or open-enrollment charter school] that selects a textbook that is not on the conforming or nonconforming list: (1) is responsible for the portion of the cost of the textbook that is not paid by the state under Subsection (b); and (2) may use funds received from the state under Subsection (b) only for purchasing the textbook for which the funds were received. (d) For a textbook that is not on the conforming or nonconforming list, a school district [or open-enrollment charter school] must use the textbook for the period of the review and adoption cycle the State Board of Education has established for the subject and grade level for which the textbook is used. SECTION 4.36. Subsection (c), Section 31.102, Education Code, is amended to read as follows: (c) The board of trustees of a school district [or the governing body of an open-enrollment charter school] is the legal custodian of textbooks purchased as provided by this chapter for the district [or school]. The board of trustees shall distribute textbooks to students in the manner that the board [or governing body] determines is most effective and economical. SECTION 4.37. Section 31.103, Education Code, is amended to read as follows: Sec. 31.103. TEXTBOOK REQUISITIONS. (a) Not later than the seventh day after the first school day in April, each principal shall report the maximum attendance for the school to the superintendent. Not later than April 25, the superintendent of a school district [or the chief operating officer of an open-enrollment charter school] shall report the district's [or school's] maximum attendance to the commissioner. (b) A requisition for textbooks for the following school year shall be based on the maximum attendance reports under Subsection (a), plus an additional 10 percent, except as otherwise provided. A school district [or open-enrollment charter school] shall make a requisition for a textbook on the conforming or nonconforming list through the commissioner to the state depository designated by the publisher or as provided by State Board of Education rule, as applicable, not later than June 1 of each year. The designated state depository or, if the publisher or manufacturer does not have a designated textbook depository in this state under Section 31.151(a)(6)(B), the publisher or manufacturer shall fill a requisition approved by the agency at any other time in the case of an emergency. As made necessary by available funds, the commissioner shall reduce the additional percentage of attendance for which a district [or school] may requisition textbooks. The commissioner may, on application of a district [or school] that is experiencing high enrollment growth, increase the additional percentage of attendance for which the district [or school] may requisition textbooks. (c) In making a requisition under this section, a school district [or open-enrollment charter school] may requisition textbooks on the conforming or nonconforming list for grades above the grade level in which a student is enrolled, except that the total quantity of textbooks requisitioned under this section may not exceed the limit prescribed by Subsection (b). SECTION 4.38. Subsections (a), (b), and (d), Section 31.104, Education Code, are amended to read as follows: (a) The board of trustees of a school district [or the governing body of an open-enrollment charter school] may delegate to an employee the authority to requisition, distribute, and manage the inventory of textbooks in a manner consistent with this chapter and rules adopted under this chapter. (b) A school district [or open-enrollment charter school] may order replacements for textbooks that have been lost or damaged directly from: (1) the textbook depository; or (2) the textbook publisher or manufacturer if the textbook publisher or manufacturer does not have a designated textbook depository in this state under Section 31.151(a)(6)(B). (d) Each student, or the student's parent or guardian, is responsible for each textbook not returned by the student. A student who fails to return all textbooks forfeits the right to free textbooks until each textbook previously issued but not returned is paid for by the student, parent, or guardian. As provided by policy of the board of trustees [or governing body], a school district [or open-enrollment charter school] may waive or reduce the payment requirement if the student is from a low-income family. The district [or school] shall allow the student to use textbooks at school during each school day. If a textbook is not returned or paid for, the district [or school] may withhold the student's records. A district [or school] may not, under this subsection, prevent a student from graduating, participating in a graduation ceremony, or receiving a diploma. SECTION 4.39. Section 31.105, Education Code, is amended to read as follows: Sec. 31.105. SALE OF TEXTBOOKS. The board of trustees of a school district [or governing body of an open-enrollment charter school] may sell textbooks, other than electronic textbooks, to a student or another school at the state contract price. The district shall send money from the sale of textbooks to the commissioner as required by the commissioner. The commissioner shall deposit the money in the state textbook fund. SECTION 4.40. Section 31.106, Education Code, is amended to read as follows: Sec. 31.106. USE OF LOCAL FUNDS. In addition to any textbook selected under this chapter, a school district [or open-enrollment charter school] may use local funds to purchase any textbooks. SECTION 4.41. Subsection (a), Section 31.151, Education Code, is amended to read as follows: (a) A publisher or manufacturer of textbooks: (1) shall furnish any textbook the publisher or manufacturer offers in this state, at a price that does not exceed the lowest price at which the publisher offers that textbook for adoption or sale to any state, public school, or school district in the United States; (2) shall automatically reduce the price of a textbook sold for use in a school district [or open-enrollment charter school] to the extent that the price is reduced elsewhere in the United States; (3) shall provide any textbook or ancillary item free of charge in this state to the same extent that the publisher or manufacturer provides the textbook or ancillary item free of charge to any state, public school, or school district in the United States; (4) shall guarantee that each copy of a textbook sold in this state is at least equal in quality to copies of that textbook sold elsewhere in the United States and is free from factual error; (5) may not become associated or connected with, directly or indirectly, any combination in restraint of trade in textbooks or enter into any understanding or combination to control prices or restrict competition in the sale of textbooks for use in this state; (6) shall: (A) maintain a depository in this state or arrange with a depository in this state to receive and fill orders for textbooks, other than on-line textbooks or on-line textbook components, consistent with State Board of Education rules; or (B) deliver textbooks to a school district [or open-enrollment charter school] without a delivery charge to the school district[, open-enrollment charter school,] or state, if: (i) the publisher or manufacturer does not maintain or arrange with a depository in this state under Paragraph (A) and the publisher's or manufacturer's textbooks and related products are warehoused or otherwise stored less than 300 miles from a border of this state; or (ii) the textbooks are on-line textbooks or on-line textbook components; (7) shall, at the time an order for textbooks is acknowledged, provide to school districts [or open-enrollment charter schools] an accurate shipping date for textbooks that are back-ordered; (8) shall guarantee delivery of textbooks at least 10 business days before the opening day of school of the year for which the textbooks are ordered if the textbooks are ordered by a date specified in the sales contract; and (9) shall submit to the State Board of Education an affidavit certifying any textbook the publisher or manufacturer offers in this state to be free of factual errors at the time the publisher executes the contract required by Section 31.026. SECTION 4.42. Subsection (c), Section 31.201, Education Code, is amended to read as follows: (c) The State Board of Education shall adopt rules under which a school district [or open-enrollment charter school] may donate discontinued textbooks, other than electronic textbooks, to a student, to an adult education program, or to a nonprofit organization. SECTION 4.43. Subchapter C, Chapter 32, Education Code, is amended by adding Section 32.1011 to read as follows: Sec. 32.1011. APPLICABILITY TO PUBLIC CHARTER DISTRICTS. This subchapter applies to a public charter district as if the public charter district were a school district. SECTION 4.44. Section 32.102, Education Code, is amended to read as follows: Sec. 32.102. AUTHORITY. (a) As provided by this subchapter, a school district [or open-enrollment charter school] may transfer to a student enrolled in the district [or school]: (1) any data processing equipment donated to the district [or school], including equipment donated by: (A) a private donor; or (B) a state eleemosynary institution or a state agency under Section 2175.128, Government Code; (2) any equipment purchased by the district [or school], to the extent consistent with Section 32.105; and (3) any surplus or salvage equipment owned by the district [or school]. (b) A school district [or open-enrollment charter school] may accept: (1) donations of data processing equipment for transfer under this subchapter; and (2) any gifts, grants, or donations of money or services to purchase, refurbish, or repair data processing equipment under this subchapter. SECTION 4.45. Section 32.103, Education Code, is amended to read as follows: Sec. 32.103. ELIGIBILITY; PREFERENCE. (a) A student is eligible to receive data processing equipment under this subchapter only if the student does not otherwise have home access to data processing equipment, as determined by the student's school district [or open-enrollment charter school]. (b) In transferring data processing equipment to students, a school district [or open-enrollment charter school] shall give preference to educationally disadvantaged students. SECTION 4.46. Section 32.104, Education Code, is amended to read as follows: Sec. 32.104. REQUIREMENTS FOR TRANSFER. Before transferring data processing equipment to a student, a school district [or open-enrollment charter school] must: (1) adopt rules governing transfers under this subchapter, including provisions for technical assistance to the student by the district [or school]; (2) determine that the transfer serves a public purpose and benefits the district [or school]; and (3) remove from the equipment any offensive, confidential, or proprietary information, as determined by the district [or school]. SECTION 4.47. Section 32.105, Education Code, is amended to read as follows: Sec. 32.105. EXPENDITURE OF PUBLIC FUNDS. A school district [or open-enrollment charter school] may spend public funds to: (1) purchase, refurbish, or repair any data processing equipment transferred to a student under this subchapter; and (2) store, transport, or transfer data processing equipment under this subchapter. SECTION 4.48. Section 32.106, Education Code, is amended to read as follows: Sec. 32.106. RETURN OF EQUIPMENT. (a) Except as provided by Subsection (b), a student who receives data processing equipment from a school district [or open-enrollment charter school] under this subchapter shall return the equipment to the district [or school] not later than the earliest of: (1) five years after the date the student receives the equipment; (2) the date the student graduates; (3) the date the student transfers to another school district [or open-enrollment charter school]; or (4) the date the student withdraws from school. (b) Subsection (a) does not apply if, at the time the student is required to return the data processing equipment under that subsection, the district [or school] determines that the equipment has no marketable value. SECTION 4.49. Section 33.007, Education Code, is amended to read as follows: Sec. 33.007. COUNSELING REGARDING HIGHER EDUCATION. (a) Each counselor at an elementary, middle, or junior high school, including a public charter district [an open-enrollment charter school] offering those grades, shall advise students and their parents or guardians regarding the importance of higher education, coursework designed to prepare students for higher education, and financial aid availability and requirements. (b) During the first school year a student is enrolled in a high school or at the high school level in a public charter district [an open-enrollment charter school], and again during a student's senior year, a counselor shall provide information about higher education to the student and the student's parent or guardian. The information must include information regarding: (1) the importance of higher education; (2) the advantages of completing the recommended or advanced high school program adopted under Section 28.025(a); (3) the disadvantages of taking courses to prepare for a high school equivalency examination relative to the benefits of taking courses leading to a high school diploma; (4) financial aid eligibility; (5) instruction on how to apply for federal financial aid; (6) the center for financial aid information established under Section 61.0776; (7) the automatic admission of certain students to general academic teaching institutions as provided by Section 51.803; and (8) the eligibility and academic performance requirements for the TEXAS Grant as provided by Subchapter M, Chapter 56[, as added by Chapter 1590, Acts of the 76th Legislature, Regular Session, 1999]. SECTION 4.50. Section 33.901, Education Code, is amended to read as follows: Sec. 33.901. BREAKFAST PROGRAMS. If at least 10 percent of the students enrolled in one or more schools in a school district or enrolled in a public charter district campus [an open-enrollment charter school] are eligible for free or reduced-price breakfasts under the national school breakfast program provided for by the Child Nutrition Act of 1966 (42 U.S.C. Section 1773), the governing body of the district or the public charter district [open-enrollment charter school] shall participate in the program and make the benefits of the program available to all eligible students in the schools or campus [school]. SECTION 4.51. Subsection (e), Section 37.007, Education Code, is amended to read as follows: (e) In accordance with 20 U.S.C. Section 7151, a local educational agency, including a school district, home-rule school district, or public charter district [open-enrollment charter school], shall expel a student who brings a firearm, as defined by 18 U.S.C. Section 921, to school. The student must be expelled from the student's regular campus for a period of at least one year, except that: (1) the superintendent or other chief administrative officer of the school district or of the other local educational agency, as defined by 20 U.S.C. Section 7801, may modify the length of the expulsion in the case of an individual student; (2) the district or other local educational agency shall provide educational services to an expelled student in a disciplinary alternative education program as provided by Section 37.008 if the student is younger than 10 years of age on the date of expulsion; and (3) the district or other local educational agency may provide educational services to an expelled student who is 10 years of age or older in a disciplinary alternative education program as provided in Section 37.008. SECTION 4.52. Subsection (j), Section 37.008, Education Code, as amended by H.B. No. 603, Acts of the 79th Legislature, Regular Session, 2005, is amended to read as follows: (j) If a student placed in a disciplinary alternative education program enrolls in another school district before the expiration of the period of placement, the board of trustees of the district requiring the placement shall provide to the district in which the student enrolls, at the same time other records of the student are provided, a copy of the placement order. The district in which the student enrolls shall inform each educator who will have responsibility for, or will be under the direction and supervision of an educator who will have responsibility for, the instruction of the student of the contents of the placement order. Each educator shall keep the information received under this subsection confidential from any person not entitled to the information under this subsection, except that the educator may share the information with the student's parent or guardian as provided for by state or federal law. The district in which the student enrolls may continue the disciplinary alternative education program placement under the terms of the order or may allow the student to attend regular classes without completing the period of placement. A school district may take any action permitted by this subsection if: (1) the student was placed in a disciplinary alternative education program by a public charter district [an open-enrollment charter school] under Section 11A.256 [12.131] and the public charter district [school] provides to the school district a copy of the placement order; or (2) the student was placed in a disciplinary alternative education program by a school district in another state and: (A) the out-of-state district provides to the school district a copy of the placement order; and (B) the grounds for the placement by the out-of-state district are grounds for placement in the school district in which the student is enrolling. SECTION 4.53. Subdivision (2), Subsection (a), Section 37.022, Education Code, as renumbered by H.B. No. 2018, Acts of the 79th Legislature, Regular Session, 2005, effective September 1, 2005, is amended to read as follows: (2) "District or school" includes an independent school district, a home-rule school district, a campus or campus program charter holder, or a public charter district [an open-enrollment charter school]. SECTION 4.54. Subsection (a), Section 39.131, Education Code, is amended to read as follows: (a) If a district does not satisfy the accreditation criteria, the commissioner shall take any of the following actions, listed in order of severity, to the extent the commissioner determines necessary: (1) issue public notice of the deficiency to the board of trustees; (2) order a hearing conducted by the board of trustees of the district for the purpose of notifying the public of the unacceptable performance, the improvements in performance expected by the agency, and the sanctions that may be imposed under this section if the performance does not improve; (3) order the preparation of a student achievement improvement plan that addresses each academic excellence indicator for which the district's performance is unacceptable, the submission of the plan to the commissioner for approval, and implementation of the plan; (4) order a hearing to be held before the commissioner or the commissioner's designee at which the president of the board of trustees of the district and the superintendent shall appear and explain the district's low performance, lack of improvement, and plans for improvement; (5) arrange an on-site investigation of the district; (6) appoint an agency monitor to participate in and report to the agency on the activities of the board of trustees or the superintendent; (7) appoint a conservator to oversee the operations of the district; (8) appoint a management team to direct the operations of the district in areas of unacceptable performance or require the district to obtain certain services under a contract with another person; (9) if a district has been rated as academically unacceptable for a period of one year or more, appoint a board of managers to exercise the powers and duties of the board of trustees; (10) if a district has been rated as academically unacceptable for a period of two years or more: (A) annex the district to one or more adjoining districts under Section 13.054; or (B) in the case of a home-rule school district or public charter district [open-enrollment charter school], order closure of all programs operated under the district's [or school's] charter; or (11) if a district has been rated as academically unacceptable for a period of two years or more due to the district's dropout rates, impose sanctions designed to improve high school completion rates, including: (A) ordering the development of a dropout prevention plan for approval by the commissioner; (B) restructuring the district or appropriate school campuses to improve identification of and service to students who are at risk of dropping out of school, as defined by Section 29.081; (C) ordering lower student-to-counselor ratios on school campuses with high dropout rates; and (D) ordering the use of any other intervention strategy effective in reducing dropout rates, including mentor programs and flexible class scheduling. SECTION 4.55. Subsection (a), Section 39.182, Education Code, as amended by S.B. No. 42, Acts of the 79th Legislature, Regular Session, 2005, is amended to read as follows: (a) Not later than December 1 of each year, the agency shall prepare and deliver to the governor, the lieutenant governor, the speaker of the house of representatives, each member of the legislature, the Legislative Budget Board, and the clerks of the standing committees of the senate and house of representatives with primary jurisdiction over the public school system a comprehensive report covering the preceding school year and containing: (1) an evaluation of the achievements of the state educational program in relation to the statutory goals for the public education system under Section 4.002; (2) an evaluation of the status of education in the state as reflected by the academic excellence indicators adopted under Section 39.051; (3) a summary compilation of overall student performance on academic skills assessment instruments required by Section 39.023 with the number and percentage of students exempted from the administration of those instruments and the basis of the exemptions, aggregated by grade level, subject area, campus, and district, with appropriate interpretations and analysis, and disaggregated by race, ethnicity, gender, and socioeconomic status; (4) a summary compilation of overall performance of students placed in a disciplinary alternative education program established under Section 37.008 on academic skills assessment instruments required by Section 39.023 with the number of those students exempted from the administration of those instruments and the basis of the exemptions, aggregated by district, grade level, and subject area, with appropriate interpretations and analysis, and disaggregated by race, ethnicity, gender, and socioeconomic status; (5) a summary compilation of overall performance of students at risk of dropping out of school, as defined by Section 29.081(d), on academic skills assessment instruments required by Section 39.023 with the number of those students exempted from the administration of those instruments and the basis of the exemptions, aggregated by district, grade level, and subject area, with appropriate interpretations and analysis, and disaggregated by race, ethnicity, gender, and socioeconomic status; (6) an evaluation of the correlation between student grades and student performance on academic skills assessment instruments required by Section 39.023; (7) a statement of the dropout rate of students in grade levels 7 through 12, expressed in the aggregate and by grade level, and a statement of the completion rates of students for grade levels 9 through 12; (8) a statement of: (A) the completion rate of students who enter grade level 9 and graduate not more than four years later; (B) the completion rate of students who enter grade level 9 and graduate, including students who require more than four years to graduate; (C) the completion rate of students who enter grade level 9 and not more than four years later receive a high school equivalency certificate; (D) the completion rate of students who enter grade level 9 and receive a high school equivalency certificate, including students who require more than four years to receive a certificate; and (E) the number and percentage of all students who have not been accounted for under Paragraph (A), (B), (C), or (D); (9) a statement of the projected cross-sectional and longitudinal dropout rates for grade levels 9 through 12 for the next five years, assuming no state action is taken to reduce the dropout rate; (10) a description of a systematic, measurable plan for reducing the projected cross-sectional and longitudinal dropout rates to five percent or less for the 1997-1998 school year; (11) a summary of the information required by Section 29.083 regarding grade level retention of students and information concerning: (A) the number and percentage of students retained; and (B) the performance of retained students on assessment instruments required under Section 39.023(a); (12) information, aggregated by district type and disaggregated by race, ethnicity, gender, and socioeconomic status, on: (A) the number of students placed in a disciplinary alternative education program established under Section 37.008; (B) the average length of a student's placement in a disciplinary alternative education program established under Section 37.008; (C) the academic performance of students on assessment instruments required under Section 39.023(a) during the year preceding and during the year following placement in a disciplinary alternative education program; and (D) the dropout rates of students who have been placed in a disciplinary alternative education program established under Section 37.008; (13) a list of each school district or campus that does not satisfy performance standards, with an explanation of the actions taken by the commissioner to improve student performance in the district or campus and an evaluation of the results of those actions; (14) an evaluation of the status of the curriculum taught in public schools, with recommendations for legislative changes necessary to improve or modify the curriculum required by Section 28.002; (15) a description of all funds received by and each activity and expenditure of the agency; (16) a summary and analysis of the instructional expenditures ratios and instructional employees ratios of school districts computed under Section 44.0071; (17) a summary of the effect of deregulation, including exemptions and waivers granted under Section 7.056 or 39.112; (18) a statement of the total number and length of reports that school districts and school district employees must submit to the agency, identifying which reports are required by federal statute or rule, state statute, or agency rule, and a summary of the agency's efforts to reduce overall reporting requirements; (19) a list of each school district that is not in compliance with state special education requirements, including: (A) the period for which the district has not been in compliance; (B) the manner in which the agency considered the district's failure to comply in determining the district's accreditation status; and (C) an explanation of the actions taken by the commissioner to ensure compliance and an evaluation of the results of those actions; (20) a comparison of the performance of public charter districts [open-enrollment charter schools] and school districts on the academic excellence indicators specified in Section 39.051(b) and accountability measures adopted under Section 39.051(g), with a separately aggregated comparison of the performance of public charter districts [open-enrollment charter schools] predominantly serving students at risk of dropping out of school, as defined by Section 29.081(d), with the performance of school districts; (21) a summary of the information required by Section 38.0141 regarding student health and physical activity from each school district; and (22) any additional information considered important by the commissioner or the State Board of Education. SECTION 4.56. Subsection (f), Section 42.005, Education Code, is amended to read as follows: (f) A public charter district [An open-enrollment charter school] is not entitled to funding based on an adjustment under Subsection (b)(2). SECTION 4.57. Subsection (c), Section 42.152, Education Code, is amended to read as follows: (c) Funds allocated under this section shall be used to fund supplemental programs and services designed to eliminate any disparity in performance on assessment instruments administered under Subchapter B, Chapter 39, or disparity in the rates of high school completion between students at risk of dropping out of school, as defined by Section 29.081, and all other students. Specifically, the funds, other than an indirect cost allotment established under State Board of Education rule, which may not exceed 15 percent, may be used to meet the costs of providing a compensatory, intensive, or accelerated instruction program under Section 29.081 or an alternative education program established under Section 37.008 or to support a program eligible under Title I of the Elementary and Secondary Education Act of 1965, as provided by Pub. L. No. 103-382 and its subsequent amendments, and by federal regulations implementing that Act, at a campus at which at least 40 percent of the students are educationally disadvantaged. In meeting the costs of providing a compensatory, intensive, or accelerated instruction program under Section 29.081, a district's compensatory education allotment shall be used for costs supplementary to the regular education program, such as costs for program and student evaluation, instructional materials and equipment and other supplies required for quality instruction, supplemental staff expenses, salary for teachers of at-risk students, smaller class size, and individualized instruction. A home-rule school district or a public charter district [an open-enrollment charter school] must use funds allocated under Subsection (a) for a purpose authorized in this subsection but is not otherwise subject to Subchapter C, Chapter 29. Notwithstanding any other provisions of this section: (1) to ensure that a sufficient amount of the funds allotted under this section are available to supplement instructional programs and services, no more than 18 percent of the funds allotted under this section may be used to fund disciplinary alternative education programs established under Section 37.008; (2) the commissioner may waive the limitations of Subdivision (1) upon an annual petition, by a district's board and a district's site-based decision making committee, presenting the reason for the need to spend supplemental compensatory education funds on disciplinary alternative education programs under Section 37.008, provided that: (A) the district in its petition reports the number of students in each grade level, by demographic subgroup, not making satisfactory progress under the state's assessment system; and (B) the commissioner makes the waiver request information available annually to the public on the agency's website; and (3) for purposes of this subsection, a program specifically designed to serve students at risk of dropping out of school, as defined by Section 29.081, is considered to be a program supplemental to the regular education program, and a district may use its compensatory education allotment for such a program. SECTION 4.58. Subsection (a), Section 44.008, Education Code, is amended to read as follows: (a) The board of school trustees of each school district shall have its school district fiscal accounts audited annually at district expense by a certified or public accountant holding a permit from the Texas State Board of Public Accountancy. Except as determined impracticable by the commissioner, the accountant must have completed at least one peer-reviewed audit of a school district, governmental entity, quasi-governmental entity, or nonprofit corporation and received an unqualified opinion from the peer review. The audit must be completed following the close of each fiscal year. SECTION 4.59. Section 46.012, Education Code, is amended to read as follows: Sec. 46.012. APPLICABILITY TO PUBLIC CHARTER DISTRICTS [OPEN-ENROLLMENT CHARTER SCHOOLS]. A public charter district [An open-enrollment charter school] is not entitled to an allotment under this subchapter. SECTION 4.60. Section 46.036, Education Code, is amended to read as follows: Sec. 46.036. APPLICABILITY TO PUBLIC CHARTER DISTRICTS [OPEN-ENROLLMENT CHARTER SCHOOLS]. A public charter district [An open-enrollment charter school] is not entitled to an allotment under this subchapter. SECTION 4.61. Subdivision (10), Section 53.02, Education Code, as renumbered by H.B. No. 2701, Acts of the 79th Legislature, Regular Session, 2005, effective September 1, 2005, is amended to read as follows: (10) "Authorized charter school" means a public charter district [an open-enrollment charter school] that holds a charter granted under Chapter 11A [Subchapter D, Chapter 12]. SECTION 4.62. The heading to Section 53.351, Education Code, is amended to read as follows: Sec. 53.351. BONDS FOR AUTHORIZED [OPEN ENROLLMENT] CHARTER SCHOOL FACILITIES. SECTION 4.63. Subsections (a), (c), (d), (f), and (g), Section 53.351, Education Code, are amended to read as follows: (a) The Texas Public Finance Authority shall establish a nonprofit corporation to issue revenue bonds on behalf of authorized [open-enrollment] charter schools for the acquisition, construction, repair, or renovation of educational facilities of those schools. (c) The corporation has all powers granted under the Texas Non-Profit Corporation Act (Article 1396-1.01 et seq., Vernon's Texas Civil Statutes) for the purpose of aiding authorized [open-enrollment] charter schools in providing educational facilities. The corporation may make expenditures from the fund described by Subsection (e) and may solicit and accept grants for deposit into the fund. In addition, Sections 53.131, 53.15, 53.31, 53.32, 53.331, 53.34, 53.35, 53.36(a), and 53.37-53.42 apply to and govern the corporation and its procedures and bonds. (d) The corporation shall adopt rules governing the issuance of bonds on behalf of an authorized [open-enrollment] charter school. (f) A revenue bond issued under this section is not a debt of the state or any state agency, political corporation, or political subdivision of the state and is not a pledge of the faith and credit of any of these entities. A revenue bond is payable solely from the revenue of the authorized [open-enrollment] charter school on whose behalf the bond is issued. A revenue bond issued under this section must contain on its face a statement to the effect that: (1) neither the state nor a state agency, political corporation, or political subdivision of the state is obligated to pay the principal of or interest on the bond; and (2) neither the faith and credit nor the taxing power of the state or any state agency, political corporation, or political subdivision of the state is pledged to the payment of the principal of or interest on the bond. (g) An educational facility financed in whole or in part under this section is exempt from taxation if the facility: (1) is owned by an authorized [open-enrollment] charter school; (2) is held for the exclusive benefit of the school; and (3) is held for the exclusive use of the students, faculty, and staff members of the school. SECTION 4.64. Subsection (c), Section 411.097, Government Code, is amended to read as follows: (c) A public charter district [An open-enrollment charter school] is entitled to obtain from the department criminal history record information maintained by the department that relates to a person who: (1) is a member of the governing body of the public charter district [school], as defined by Section 11A.001 [12.1012], Education Code; or (2) has agreed to serve as a member of the governing body of the public charter district [school]. SECTION 4.65. Subsections (a) and (b), Section 2175.128, Government Code, are amended to read as follows: (a) If a disposition of a state agency's surplus or salvage data processing equipment is not made under Section 2175.125 or 2175.184, the state agency shall transfer the equipment to: (1) a school district or public charter district [open-enrollment charter school] in this state under Subchapter C, Chapter 32, Education Code; (2) an assistance organization specified by the school district or public charter district; or (3) the Texas Department of Criminal Justice. (b) If a disposition of the surplus or salvage data processing equipment of a state eleemosynary institution or an institution or agency of higher education is not made under other law, the institution or agency shall transfer the equipment to: (1) a school district or public charter district [open-enrollment charter school] in this state under Subchapter C, Chapter 32, Education Code; (2) an assistance organization specified by the school district or public charter district; or (3) the Texas Department of Criminal Justice. SECTION 4.66. Subsection (a), Section 2306.630, Government Code, is amended to read as follows: (a) Subject to Subsection (b), the following entities may apply to receive a grant for an eligible project under this subchapter: (1) a private, nonprofit, tax-exempt organization listed in Section 501(c)(3), Internal Revenue Code of 1986 (26 U.S.C. Section 501(c)(3)); (2) a public agency that operates a community-based youth employment training program; (3) a community housing development organization certified by the state; (4) an educational facility approved by the Texas Youth Commission; (5) a corps-based community service organization; (6) a public charter district [an open-enrollment charter school] approved by the State Board of Education [Texas Education Agency]; or (7) another entity authorized by board rule. SECTION 4.67. Subdivision (6), Section 1575.002, Insurance Code, is amended to read as follows: (6) "Public school" means: (A) a school district; (B) another educational district whose employees are members of the Teacher Retirement System of Texas; (C) a regional education service center established under Chapter 8, Education Code; or (D) a public charter district [an open-enrollment charter school] established under Chapter 11A [Subchapter D, Chapter 12], Education Code. SECTION 4.68. Subdivision (3), Section 1579.002, Insurance Code, is amended to read as follows: (3) "Charter school" means a public charter district [an open-enrollment charter school] established under Chapter 11A [Subchapter D, Chapter 12], Education Code. SECTION 4.69. Section 140.005, Local Government Code, is amended to read as follows: Sec. 140.005. ANNUAL FINANCIAL STATEMENT OF SCHOOL, ROAD, OR OTHER DISTRICT. The governing body of a school district, public charter district [open-enrollment charter school], junior college district, or a district or authority organized under Article III, Section 52, or Article XVI, Section 59, of the Texas Constitution, shall prepare an annual financial statement showing for each fund subject to the authority of the governing body during the fiscal year: (1) the total receipts of the fund, itemized by source of revenue, including taxes, assessments, service charges, grants of state money, gifts, or other general sources from which funds are derived; (2) the total disbursements of the fund, itemized by the nature of the expenditure; and (3) the balance in the fund at the close of the fiscal year. SECTION 4.70. Subsection (c), Section 140.006, Local Government Code, is amended to read as follows: (c) The presiding officer of a school district shall submit a financial statement prepared under Section 140.005 to a daily, weekly, or biweekly newspaper published within the boundaries of the district. If a daily, weekly, or biweekly newspaper is not published within the boundaries of the school district, the financial statement shall be published in the manner provided by Subsections (a) and (b). The financial statement of a public charter district [an open-enrollment charter school] shall be made available in the manner provided by Chapter 552, Government Code. SECTION 4.71. Subdivision (2), Section 375.303, Local Government Code, is amended to read as follows: (2) "Eligible project" means a program authorized by Section 379A.051 and a project as defined by Sections 2(11) and 4B(a)(2), Development Corporation Act of 1979 (Article 5190.6, Vernon's Texas Civil Statutes). Notwithstanding this definition, seeking a charter for or operating a public charter district [an open-enrollment charter school] authorized by Chapter 11A [Subchapter D, Chapter 12], Education Code, is [shall] not [be] an eligible project. SECTION 4.72. Subsections (b) and (c), Section 375.308, Local Government Code, are amended to read as follows: (b) An authority may not: (1) issue bonds or notes without the prior approval of the governing body of the municipality that created the authority; (2) seek a charter for or operate, within the boundaries of the authority, a public charter district [an open-enrollment charter school] authorized by Chapter 11A [Subchapter D, Chapter 12], Education Code; or (3) levy ad valorem property taxes. (c) A municipality may not seek a charter for or operate a public charter district [an open-enrollment charter school] authorized by Chapter 11A [Subchapter D, Chapter 12], Education Code, within the boundaries of the authority. SECTION 4.73. Subdivision (15), Section 541.201, Transportation Code, is amended to read as follows: (15) "School activity bus" means a bus designed to accommodate more than 15 passengers, including the operator, that is owned, operated, rented, or leased by a school district, county school, public charter district [open-enrollment charter school], regional education service center, or shared services arrangement and that is used to transport public school students on a school-related activity trip, other than on routes to and from school. The term does not include a chartered bus, a bus operated by a mass transit authority, or a school bus. SECTION 4.74. Subdivision (9), Section 57.042, Utilities Code, is amended to read as follows: (9) "Public school" means a public elementary or secondary school, including a public charter district [an open-enrollment charter school], a home-rule school district school, and a school with a campus or campus program charter. SECTION 4.75. Subdivision (2), Section 4, Chapter 22, Acts of the 57th Legislature, 3rd Called Session, 1962 (Article 6228a-5, Vernon's Texas Civil Statutes), is amended to read as follows: (2) "Educational institution" means a school district or a public charter district [an open-enrollment charter school]. SECTION 4.76. The following laws are repealed: (1) Section 12.106, Education Code; and (2) Section 40, Chapter 1504, Acts of the 77th Legislature, Regular Session, 2001. SECTION 4.77. Notwithstanding the repeal of Sections 12.107 and 12.128, Education Code, by this Act, those sections continue to apply to state funds and property received or purchased by an open-enrollment charter school before September 1, 2006. SECTION 4.78. The changes in law made by Sections 4.04 through 4.78 of this article apply beginning August 1, 2006, except that Sections 4.11, 4.12, 4.59, and 4.77 apply beginning September 1, 2005.
ARTICLE 5. CONFORMING AMENDMENTS
PART A. CONFORMING AMENDMENTS EFFECTIVE
SEPTEMBER 1, 2005
SECTION 5A.01. Subsection (c), Section 22.004, Education Code, is amended to read as follows: (c) The cost of the coverage provided under the program described by Subsection (a) shall be paid by the state, the district, and the employees in the manner provided by Chapter 1579 [Article 3.50-7], Insurance Code. The cost of coverage provided under a plan adopted under Subsection (b) shall be shared by the employees and the district using the contributions by the state described by Subchapter F, Chapter 1579 [Section 9, Article 3.50-7], Insurance Code, or by Chapter 1580 [Article 3.50-8], Insurance Code. SECTION 5A.02. Subsection (c), Section 822.201, Government Code, is amended to read as follows: (c) Excluded from salary and wages are: (1) expense payments; (2) allowances; (3) payments for unused vacation or sick leave; (4) maintenance or other nonmonetary compensation; (5) fringe benefits; (6) deferred compensation other than as provided by Subsection (b)(3); (7) compensation that is not made pursuant to a valid employment agreement; (8) payments received by an employee in a school year that exceed $5,000 for teaching a driver education and traffic safety course that is conducted outside regular classroom hours; (9) the benefit replacement pay a person earns as a result of a payment made under Subchapter B or C, Chapter 661; (10) compensation designated [contributions to a health reimbursement arrangement account received] by an employee as health care supplementation under Chapter 1580 [Article 3.50-8], Insurance Code, subject to the following limits: (A) $1,000, for an employee entitled to the minimum salary under Section 21.402, Education Code; (B) $1,000, for a full-time support staff employee entitled to a wage increase under Section 22.008(a), Education Code; and (C) $500, for a part-time support staff employee entitled to a wage increase under Section 22.008(b), Education Code; and (11) any compensation not described by Subsection (b). SECTION 5A.03. This part applies beginning with the 2005-2006 school year.
PART B. CONFORMING AMENDMENTS
RELATED TO EDUCATION FUNDING AND EQUALIZATION
SECTION 5B.01. Subdivision (34), Subsection (b), Section 7.055, Education Code, is amended to read as follows: (34) The commissioner shall perform duties in connection with equalization actions [the equalized wealth level] under Chapter 41. SECTION 5B.02. Subsection (b), Section 12.013, Education Code, is amended to read as follows: (b) A home-rule school district is subject to: (1) a provision of this title establishing a criminal offense; (2) a provision of this title relating to limitations on liability; and (3) a prohibition, restriction, or requirement, as applicable, imposed by this title or a rule adopted under this title, relating to: (A) the Public Education Information Management System (PEIMS) to the extent necessary to monitor compliance with this subchapter as determined by the commissioner; (B) educator certification under Chapter 21 and educator rights under Sections 21.407, 21.408, and 22.001; (C) criminal history records under Subchapter C, Chapter 22; (D) student admissions under Section 25.001; (E) school attendance under Sections 25.085, 25.086, and 25.087; (F) inter-district or inter-county transfers of students under Subchapter B, Chapter 25; (G) elementary class size limits under Section 25.112, in the case of any campus in the district that is considered academically unacceptable [low-performing] under Section 39.132; (H) high school graduation under Section 28.025; (I) special education programs under Subchapter A, Chapter 29; (J) bilingual education under Subchapter B, Chapter 29; (K) prekindergarten programs under Subchapter E, Chapter 29; (L) safety provisions relating to the transportation of students under Sections 34.002, 34.003, 34.004, and 34.008; (M) computation and distribution of state aid under Chapters 31, 42, and 43; (N) extracurricular activities under Section 33.081; (O) health and safety under Chapter 38; (P) public school accountability under Subchapters B, C, D, and G, Chapter 39; (Q) equalization [equalized wealth] under Section 42.401 [Chapter 41]; (R) a bond or other obligation or tax rate under Chapters 42, 43, and 45; and (S) purchasing under Chapter 44. SECTION 5B.03. Subsection (h), Section 21.410, Education Code, is amended to read as follows: (h) A grant a school district receives under this section is in addition to any funding the district receives under Chapter 42. The commissioner shall distribute funds under this section with the Foundation School Program payment to which the district is entitled as soon as practicable after the end of the school year as determined by the commissioner. A district to which Section 42.401 [Chapter 41] applies is entitled to the grants paid under this section. The commissioner shall determine the timing of the distribution of grants to a district that does not receive Foundation School Program payments. SECTION 5B.04. Subsection (h), Section 21.411, Education Code, is amended to read as follows: (h) A grant a school district receives under this section is in addition to any funding the district receives under Chapter 42. The commissioner shall distribute funds under this section with the Foundation School Program payment to which the district is entitled as soon as practicable after the end of the school year as determined by the commissioner. A district to which Section 42.401 [Chapter 41] applies is entitled to the grants paid under this section. The commissioner shall determine the timing of the distribution of grants to a district that does not receive Foundation School Program payments. SECTION 5B.05. Subsection (h), Section 21.412, Education Code, is amended to read as follows: (h) A grant a school district receives under this section is in addition to any funding the district receives under Chapter 42. The commissioner shall distribute funds under this section with the Foundation School Program payment to which the district is entitled as soon as practicable after the end of the school year as determined by the commissioner. A district to which Section 42.401 [Chapter 41] applies is entitled to the grants paid under this section. The commissioner shall determine the timing of the distribution of grants to a district that does not receive Foundation School Program payments. SECTION 5B.06. Subsection (h), Section 21.413, Education Code, as added by Section 2, Chapter 430, Acts of the 78th Legislature, Regular Session, 2003, is amended to read as follows: (h) A grant a school district receives under this section is in addition to any funding the district receives under Chapter 42. The commissioner shall distribute funds under this section with the Foundation School Program payment to which the district is entitled as soon as practicable after the end of the school year as determined by the commissioner. A district to which Section 42.401 [Chapter 41] applies is entitled to the grants paid under this section. The commissioner shall determine the timing of the distribution of grants to a district that does not receive Foundation School Program payments. SECTION 5B.07. Subsection (b), Section 21.453, Education Code, is amended to read as follows: (b) The commissioner may allocate funds from the account to regional education service centers to provide staff development resources to school districts that: (1) are rated academically unacceptable; (2) have one or more campuses rated academically unacceptable [as low-performing]; or (3) are otherwise in need of assistance as indicated by the academic performance of students, as determined by the commissioner. SECTION 5B.08. Subsection (d), Section 29.014, Education Code, is amended to read as follows: (d) The accreditation [basic] allotment for a student enrolled in a district to which this section applies is adjusted by: (1) the cost of education adjustment under Section 42.102 for the school district in which the district is geographically located; and (2) the weight for a homebound student under Section 42.151(a). SECTION 5B.09. Subsection (j), Section 29.087, Education Code, is amended to read as follows: (j) For purposes of funding under Chapters [41,] 42[,] and 46, a student attending a program authorized by this section may be counted in attendance only for the actual number of hours each school day the student attends the program, in accordance with Sections 25.081 and 25.082. SECTION 5B.10. Subsection (a), Section 29.202, Education Code, is amended to read as follows: (a) A student is eligible to receive a public education grant or to attend another public school in the district in which the student resides under this subchapter if the student is assigned to attend a public school campus: (1) at which 50 percent or more of the students did not perform satisfactorily on an assessment instrument administered under Section 39.023(a) or (c) in any two of the preceding three years; or (2) that was, at any time in the preceding three years, considered academically unacceptable [low-performing] under Section 39.132. SECTION 5B.11. Subsection (b), Section 29.203, Education Code, is amended to read as follows: (b) A school district is entitled to the allotment provided by Section 42.157 for each eligible student using a public education grant. [If the district has a wealth per student greater than the guaranteed wealth level but less than the equalized wealth level, a school district is entitled under rules adopted by the commissioner to additional state aid in an amount equal to the difference between the cost to the district of providing services to a student using a public education grant and the sum of the state aid received because of the allotment under Section 42.157 and money from the available school fund attributable to the student.] SECTION 5B.12. Section 30.003, Education Code, is amended by adding Subsection (f-1) to read as follows: (f-1) The commissioner shall determine the total amount that the Texas School for the Blind and Visually Impaired and the Texas School for the Deaf would have received from school districts pursuant to this section if S.B. No. 2, Acts of the 79th Legislature, 2nd Called Session, 2005, had not reduced the districts' share of the cost of providing education services. That amount, minus any amount the schools do receive from school districts, shall be set apart as a separate account in the foundation school fund and appropriated to those schools for educational purposes. SECTION 5B.13. Section 37.0061, Education Code, is amended to read as follows: Sec. 37.0061. FUNDING FOR ALTERNATIVE EDUCATION SERVICES IN JUVENILE RESIDENTIAL FACILITIES. A school district that provides education services to pre-adjudicated and post-adjudicated students who are confined by court order in a juvenile residential facility operated by a juvenile board is entitled to count such students in the district's average daily attendance for purposes of receipt of state funds under the Foundation School Program. [If the district has a wealth per student greater than the guaranteed wealth level but less than the equalized wealth level, the district in which the student is enrolled on the date a court orders the student to be confined to a juvenile residential facility shall transfer to the district providing education services an amount equal to the difference between the average Foundation School Program costs per student of the district providing education services and the sum of the state aid and the money from the available school fund received by the district that is attributable to the student for the portion of the school year for which the district provides education services to the student.] SECTION 5B.14. Section 87.208, Education Code, is amended to read as follows: Sec. 87.208. SEABORNE CONSERVATION CORPS. If the board of regents of The Texas A&M University System administers a program that is substantially similar to the Seaborne Conservation Corps as it was administered by the board during the 1998-1999 school year, the program is entitled, for each student enrolled, to allotments from the Foundation School Program under Chapter 42 as if the program were a school district, except that: (1) the program has a local share applied that is equivalent to the local fund assignment of the school district in which the principal facilities of the program are located; and (2) the district enrichment tax rate under Section 42.302 is the average district enrichment tax rate for the state. SECTION 5B.15. Subsection (k), Section 96.707, Education Code, is amended to read as follows: (k) For each student enrolled in the academy, the academy is entitled to allotments from the Foundation School Program under Chapter 42 as if the academy were a school district, except that: (1) the academy has a local share applied that is equivalent to the local fund assignment of the Beaumont Independent School District; and (2) the district enrichment tax rate under Section 42.302 is the average district enrichment tax rate for the state. SECTION 5B.16. Subsection (e), Section 105.301, Education Code, is amended to read as follows: (e) The academy is not subject to the provisions of this code, or to the rules of the Texas Education Agency, regulating public schools, except that: (1) professional employees of the academy are entitled to the limited liability of an employee under Section 22.0511, 22.0512, or 22.052; (2) a student's attendance at the academy satisfies compulsory school attendance requirements; [and] (3) for each student enrolled, the academy is entitled to allotments from the foundation school program under Chapter 42 as if the academy were a school district without a basic program [tier one] local share for purposes of Section 42.253; and (4) in determining funding for the academy: (A) the adjustment under Section 42.102 is the adjustment of the school district in which the principal facilities of the academy are located; and (B) the district enrichment tax rate under Section 42.302 is the average district enrichment tax rate for the state. SECTION 5B.17. Subsection (f), Section 317.005, Government Code, is amended to read as follows: (f) The governor or board may adopt an order under this section withholding or transferring any portion of the total amount appropriated to finance the foundation school program for a fiscal year. The governor or board may not adopt such an order if it would result in an allocation of money between particular programs or statutory allotments under the foundation school program contrary to the statutory proration formula provided by Section 42.253(h), Education Code. The governor or board may transfer an amount to the total amount appropriated to finance the foundation school program for a fiscal year and may increase the accreditation [basic] allotment. The governor or board may adjust allocations of amounts between particular programs or statutory allotments under the foundation school program only for the purpose of conforming the allocations to actual pupil enrollments or attendance. SECTION 5B.18. Subsection (c), Section 2175.304, Government Code, is amended to read as follows: (c) The procedures established under Subsection (b) must give preference to transferring the property directly to a public school or school district or to an assistance organization designated by the school district before disposing of the property in another manner. If more than one public school or school district or assistance organization seeks to acquire the same property on substantially the same terms, the system, institution, or agency shall give preference to a public school that is considered academically unacceptable under Section 39.132, Education Code, [low-performing by the commissioner of education] or to a school district that has a relatively low [taxable] wealth per student, as determined by the commissioner of education [that entitles the district to an allotment of state funds under Subchapter F, Chapter 42, Education Code], or to the assistance organization designated by such a school district. SECTION 5B.19. Subsection (a), Section 1579.251, Insurance Code, is amended to read as follows: (a) The state shall assist employees of participating school districts and charter schools in the purchase of group health coverage under this chapter by providing for each covered employee the amount of $900 each state fiscal year or a greater amount as provided by the General Appropriations Act. The state contribution shall be distributed through the school finance formulas under Chapter [Chapters 41 and] 42, Education Code, in a manner the commissioner of education determines appropriate [and used by school districts and charter schools as provided by Sections 42.2514 and 42.260, Education Code]. SECTION 5B.20. Subsection (c), Section 302.006, Labor Code, is amended to read as follows: (c) To be eligible to receive a scholarship awarded under this section, a person must: (1) be employed in a child-care facility, as defined by Section 42.002, Human Resources Code; (2) intend to obtain a credential, certificate, or degree specified in Subsection (b); (3) agree to work for at least 18 additional months in a child-care facility, as defined by Section 42.002, Human Resources Code, that accepts federal Child Care Development Fund subsidies and that, at the time the person begins to fulfill the work requirement imposed by this subdivision, is located: (A) within the attendance zone of a public school campus considered academically unacceptable [low-performing] under Section 39.132, Education Code; or (B) in an economically disadvantaged community, as determined by the commission; and (4) satisfy any other requirements adopted by the commission. SECTION 5B.21. Subsection (b), Section 6.02, Tax Code, is amended to read as follows: (b) A taxing unit that has boundaries extending into two or more counties may choose to participate in only one of the appraisal districts. In that event, the boundaries of the district chosen extend outside the county to the extent of the unit's boundaries. To be effective, the choice must be approved by resolution of the board of directors of the district chosen. [The choice of a school district to participate in a single appraisal district does not apply to property annexed to the school district under Subchapter C or G, Chapter 41, Education Code, unless: [(1) the school district taxes property other than property annexed to the district under Subchapter C or G, Chapter 41, Education Code, in the same county as the annexed property; or [(2) the annexed property is contiguous to property in the school district other than property annexed to the district under Subchapter C or G, Chapter 41, Education Code.] SECTION 5B.22. Subsection (a), Section 21.02, Tax Code, is amended to read as follows: (a) Except as provided by [Subsection (b) and] Sections 21.021, 21.04, and 21.05, tangible personal property is taxable by a taxing unit if: (1) it is located in the unit on January 1 for more than a temporary period; (2) it normally is located in the unit, even though it is outside the unit on January 1, if it is outside the unit only temporarily; (3) it normally is returned to the unit between uses elsewhere and is not located in any one place for more than a temporary period; or (4) the owner resides (for property not used for business purposes) or maintains the owner's [his] principal place of business in this state (for property used for business purposes) in the unit and the property is taxable in this state but does not have a taxable situs pursuant to Subdivisions (1) through (3) [of this section]. SECTION 5B.23. Subsection (d), Section 39.901, Utilities Code, is amended to read as follows: (d) Not later than May 1 of each year, subject to Section 39.903(b), the commission shall transfer from the system benefit fund to the foundation school fund the amount determined by the Texas Education Agency under Subsection (b) to the extent that funds are available. Amounts transferred from the system benefit fund under this section may be appropriated only for the support of the Foundation School Program and are available, in addition to any amounts allocated by the General Appropriations Act, to finance actions under Section [41.002(b) or] 42.2521, Education Code. SECTION 5B.24. This part applies beginning with the 2006-2007 school year.
ARTICLE 6. PROPERTY TAX COLLECTIONS
SECTION 6.01. Subsection (a), Section 31.05, Tax Code, is amended to read as follows: (a) The governing body of a taxing unit [that collects its own taxes] may adopt the discounts provided by Subsection (b) or Subsection (c) [of this section], or both, in the manner required by law for official action by the body. The discounts, if adopted, apply only to that taxing unit's taxes [for a taxing unit for which the adopting taxing unit collects taxes if the governing body of the other unit, in the manner required by law for official action by the body, adopts the discounts or approves of their application to its taxes by the collecting unit]. If a taxing unit adopts both discounts under Subsections (b) and (c) [of this section], the discounts adopted under Subsection (b) apply unless the [unit mails its] tax bills for the unit are mailed after September 30, in which case only the discounts under Subsection (c) apply. A taxing unit that collects taxes for another taxing unit that adopts the discounts may prepare and mail separate tax bills on behalf of the adopting taxing unit and may charge an additional fee for preparing and mailing the separate tax bills and for collecting the taxes imposed by the adopting taxing unit. If under an intergovernmental contract a county assessor-collector collects taxes for a taxing unit that adopts the discounts, the county assessor-collector may terminate the contract if the county has adopted a discount policy that is different from the discount policy adopted by the adopting taxing unit. SECTION 6.02. (a) Section 31.05, Tax Code, as amended by this article, applies to the adoption of a discount by a taxing unit beginning with the 2005 tax year, except as provided by Subsection (b) of this section. (b) If a taxing unit's tax bills for the 2005 tax year are mailed before the effective date of this article, Section 31.05, Tax Code, as amended by this article, applies to the adoption of a discount by the taxing unit beginning with the 2006 tax year, and the law in effect when the tax bills were mailed applies to the 2005 tax year with respect to that taxing unit.
ARTICLE 7. ABOLISHMENT OF STATE BOARD FOR EDUCATOR CERTIFICATION; TRANSFER OF POWERS AND DUTIES
SECTION 7.01. Subsection (a), Section 21.0031, Education Code, is amended to read as follows: (a) An employee's probationary, continuing, or term contract under this chapter is void if the employee: (1) does not hold a certificate or permit issued under Subchapter B [by the State Board for Educator Certification]; or (2) fails to fulfill the requirements necessary to extend the employee's temporary or emergency certificate or permit. SECTION 7.02. Subsections (a) through (e), Section 21.004, Education Code, are amended to read as follows: (a) To the extent that funds are available, the agency[, the State Board for Educator Certification,] and the Texas Higher Education Coordinating Board shall develop and implement programs to identify talented students and recruit those students and persons, including high school and undergraduate students, mid-career and retired professionals, honorably discharged and retired military personnel, and members of underrepresented gender and ethnic groups, into the teaching profession. (b) From available funds, the agency[, the State Board for Educator Certification,] and the Texas Higher Education Coordinating Board shall develop and distribute materials that emphasize the importance of the teaching profession and inform individuals about state-funded loan forgiveness and tuition assistance programs. (c) The commissioner, in cooperation with the commissioner of higher education [and the executive director of the State Board for Educator Certification], shall annually identify the need for teachers in specific subject areas and geographic regions and among underrepresented groups. The commissioner shall give priority to developing and implementing recruitment programs to address those needs from the agency's discretionary funds. (d) The agency[, the State Board for Educator Certification,] and the Texas Higher Education Coordinating Board shall encourage the business community to cooperate with local schools to develop recruiting programs designed to attract and retain capable teachers, including programs to provide summer employment opportunities for teachers. (e) The agency[, the State Board for Educator Certification,] and the Texas Higher Education Coordinating Board shall encourage major education associations to cooperate in developing a long-range program promoting teaching as a career and to assist in identifying local activities and resources that may be used to promote the teaching profession. SECTION 7.03. Section 21.006, Education Code, is amended by amending Subsections (a), (b), (c), (e), (f), and (g) and adding Subsection (h) to read as follows: (a) In this section: (1) "Abuse"[, "abuse"] has the meaning assigned by Section 261.001, Family Code, and includes any sexual conduct involving an educator and a student or minor. (2) "Board" means the Educators' Professional Practices Board. (b) In addition to the reporting requirement under Section 261.101, Family Code, the superintendent or director of a school district, regional education service center, or shared services arrangement shall notify the commissioner [State Board for Educator Certification] if the superintendent or director has reasonable cause to believe that: (1) an educator employed by or seeking employment by the district, service center, or shared services arrangement has a criminal record; (2) an educator's employment at the district, service center, or shared services arrangement was terminated based on a determination that the educator: (A) abused or otherwise committed an unlawful act with a student or minor; (B) possessed, transferred, sold, or distributed a controlled substance, as defined by Chapter 481, Health and Safety Code, or by 21 U.S.C. Section 801 et seq.[, and its subsequent amendments]; (C) illegally transferred, appropriated, or expended funds or other property of the district, service center, or shared services arrangement; (D) attempted by fraudulent or unauthorized means to obtain or alter a professional certificate or license for the purpose of promotion or additional compensation; or (E) committed a criminal offense or any part of a criminal offense on school property or at a school-sponsored event; or (3) the educator resigned and reasonable evidence supports a recommendation by the superintendent or director to terminate the educator based on a determination that the educator engaged in misconduct described by Subdivision (2). (c) The superintendent or director must notify the commissioner [State Board for Educator Certification] by filing a report with the commissioner [board] not later than the seventh day after the date the superintendent or director first learns about an alleged incident of misconduct described by Subsection (b). The report must be: (1) in writing; and (2) in a form prescribed by the board. (e) A superintendent or director who in good faith and while acting in an official capacity files a report with the commissioner [State Board for Educator Certification] under this section is immune from civil or criminal liability that might otherwise be incurred or imposed. (f) The board, acting on a recommendation of the commissioner, [State Board for Educator Certification] shall determine whether to impose sanctions against a superintendent or director who fails to file a report in violation of Subsection (c). (g) The commissioner [State Board for Educator Certification] shall propose rules as necessary to implement this section. (h) The commissioner shall forward a report received under this section to the board for use as the commissioner determines appropriate in the execution of the board's duties. SECTION 7.035. Subchapter A, Chapter 21, Education Code, is amended by adding Section 21.007 to read as follows: Sec. 21.007. RECOMMENDATION TO SANCTION. The commissioner shall determine whether to recommend a sanction against an educator to the board under this chapter. The board shall make a final determination regarding the imposition of a sanction under this chapter. SECTION 7.04. Sections 21.031 and 21.032, Education Code, are amended to read as follows: Sec. 21.031. PURPOSE. (a) The Educators' Professional Practices [State] Board [for Educator Certification] is established in the agency to [recognize public school educators as professionals and to grant educators the authority to govern the standards of their profession. The board shall] regulate and oversee [all aspects of] the [certification, continuing education, and] standards of conduct of public school educators. (b) The commissioner shall adopt rules governing the certification of educators and continuing education for educators. In adopting [In proposing] rules under this subchapter, the commissioner [board] shall ensure that all candidates for certification or renewal of certification demonstrate the knowledge and skills necessary to improve the performance of the diverse student population of this state. Sec. 21.032. DEFINITION. In this subchapter, "board" means the Educators' Professional Practices [State] Board [for Educator Certification]. SECTION 7.05. The heading to Section 21.033, Education Code, is amended to read as follows: Sec. 21.033. EDUCATORS' PROFESSIONAL PRACTICES [STATE] BOARD [FOR EDUCATOR CERTIFICATION]. SECTION 7.06. Section 21.033, Education Code, is amended by amending Subsection (a) and adding Subsections (a-1), (d), (e), and (f) to read as follows: (a) The board [State Board for Educator Certification] is composed of 11 [14] members[. The commissioner of education shall appoint an employee of the agency to represent the commissioner as a nonvoting member. The commissioner of higher education shall appoint an employee of the Texas Higher Education Coordinating Board to represent the commissioner as a nonvoting member. The governor shall appoint a dean of a college of education in this state as a nonvoting member. The remaining 11 members are] appointed by the commissioner [governor with the advice and consent of the senate,] as follows: (1) six [four] members must be classroom teachers, appointed as provided by Subsection (a-1) [employed in public schools]; (2) not more than two members of the board may [must] be [public] school administrators; and (3) a number of other members consistent with this subsection who the commissioner determines are qualified [one member must be a public school counselor; and [(4) four members must be citizens, three of whom are not and have not, in the five years preceding appointment, been employed by a public school district or by an educator preparation program in an institution of higher education and one of whom is not and has not been employed by a public school district or by an educator preparation program in an institution of higher education]. (a-1) In appointing a board member under Subsection (a)(1), the commissioner shall request a list of qualified candidates from each of the four statewide professional educator associations in this state with the largest membership of classroom teachers and shall make appointments from the candidates listed. Not later than the 30th day after the date on which the association receives notice of the commissioner's request for candidate nominations, the association shall submit a list of six candidates for membership on the board. If the commissioner does not receive nominations for at least 12 candidates the commissioner may appoint classroom teachers not nominated by an association. (d) The commissioner shall designate a member of the board as the presiding officer of the board to serve in that capacity at the pleasure of the commissioner. (e) The agency shall provide administrative services for the board as necessary. (f) A reference in law to the State Board for Educator Certification means the Educators' Professional Practices Board. SECTION 7.07. Section 21.034, Education Code, is amended to read as follows: Sec. 21.034. TERMS; VACANCY. (a) The board members [appointed by the governor] hold office for staggered terms of six years with the terms of one-third, or as near to one-third as possible, of the members expiring on February 1 of each odd–numbered year. [A member appointed by the commissioner of education or the commissioner of higher education serves at the will of the appointing commissioner.] (b) In the event of a vacancy during a term of a member [appointed by the governor], the commissioner [governor] shall appoint a replacement who meets the qualifications of the vacated office to fill the unexpired portion of the term. (c) A vacancy arises if a member [appointed by the governor] no longer qualifies for the office to which the member was appointed, as determined by the commissioner. SECTION 7.075. Subsection (a), Section 21.035, Education Code, is amended to read as follows: [(a)] The board is subject to Chapter 325, Government Code (Texas Sunset Act). Unless continued in existence as provided by that chapter, the board is abolished and this subchapter expires on the date prescribed by Section 7.004 for abolishment of the agency [September 1, 2005]. SECTION 7.08. Subchapter B, Chapter 21, Education Code, is amended by adding Section 21.0391 to read as follows: Sec. 21.0391. ADVISORY COMMITTEE. (a) The commissioner shall appoint an advisory committee composed of holders of each class of educator certificate and stakeholders as required under Chapter 2008, Government Code. (b) The advisory committee shall recommend educator certification standards and educator preparation program standards under Sections 21.044 and 21.045, and propose related rules to the commissioner through negotiated rulemaking under Chapter 2008, Government Code. For purposes of that chapter, the advisory committee is considered to be the negotiated rulemaking committee described by Section 2008.054. (c) The commissioner may not finally adopt or amend a rule subject to this section unless the State Board of Education has failed to reject the rule or amendment by an affirmative vote of two-thirds of its members. A vote under this subsection may be conducted by mail ballot, provided that the State Board of Education has at least 30 days' written notice of the proposed final rule adoption. (d) Members of the advisory committee serve at the will of the commissioner. SECTION 7.09. Sections 21.041, 21.044, and 21.045, Education Code, are amended to read as follows: Sec. 21.041. RULES; FEES. (a) The board may adopt rules as necessary for its own procedures. (a-1) The board shall adopt rules that provide for the adoption and amendment of an educator's code of ethics. (b) The commissioner [board] shall adopt [propose] rules that: (1) provide for the issuance and renewal of educator certificates [regulation of educators and the general administration of this subchapter] in a manner consistent with this subchapter; (2) specify the classes of educator certificates to be issued, including emergency certificates; (3) specify the period for which each class of educator certificate is valid; (4) specify the requirements for the issuance and renewal of an educator certificate; (5) provide for the issuance of an educator certificate to a person who holds a similar certificate issued by another state or foreign country, subject to Section 21.052; (6) provide for special or restricted certification of educators, including certification of instructors of American Sign Language; (7) provide for disciplinary proceedings, including the suspension or revocation of an educator certificate, as provided by Chapter 2001, Government Code; (8) [provide for the adoption, amendment, and enforcement of an educator's code of ethics; [(9)] provide for continuing education requirements; [and] (9) [(10)] provide for certification of persons performing appraisals under Subchapter H; and (10) provide for the regulation of educators in a manner consistent with this subchapter. (c) The commissioner by rule [board] shall set [propose a rule adopting] a fee for the issuance and maintenance of an educator certificate that is adequate to cover the cost of administration of this subchapter, including costs related to the operation of the board. Sec. 21.044. EDUCATOR PREPARATION. The commissioner [board] shall adopt [propose] rules establishing the training requirements a person must accomplish to obtain a certificate, enter an internship, or enter an induction-year program. The commissioner [board] shall specify the minimum academic qualifications required for a certificate. Sec. 21.045. ACCOUNTABILITY SYSTEM FOR EDUCATOR PREPARATION PROGRAMS. (a) The commissioner [board] shall adopt [propose] rules establishing standards to govern the approval and continuing accountability of all educator preparation programs based on information that is disaggregated with respect to sex and ethnicity and that includes: (1) results of the certification examinations prescribed under Section 21.048(a); and (2) performance based on the appraisal system for beginning teachers adopted by the commissioner [board]. (b) Each educator preparation program shall submit data elements as required by the commissioner [board] for an annual performance report to ensure access and equity. At a minimum, the annual report must contain the performance data from Subsection (a) and the following information, disaggregated by sex and ethnicity: (1) the number of candidates who apply; (2) the number of candidates admitted; (3) the number of candidates retained; (4) the number of candidates completing the program; (5) the number of candidates employed in the profession after completing the program; and (6) the number of candidates retained in the profession. (c) The commissioner [board] shall adopt [propose] rules establishing performance standards for the Accountability System for Educator Preparation for accrediting educator preparation programs. At a minimum, performance standards must be based on Subsection (a). The commissioner [board] shall adopt [propose] rules for the sanction of educator preparation programs and shall annually review the accreditation status of each educator preparation program. (d) The commissioner [executive director of the board] shall appoint an oversight team of educators to make recommendations and provide assistance to educator preparation programs that do not meet accreditation standards. If, after one year, an educator preparation program has not fulfilled the recommendations of the oversight team, the commissioner [executive director] shall appoint a person to administer and manage the operations of the program. If the program does not improve after two years, the commissioner [board] shall revoke the approval of the program to prepare educators for state certification. SECTION 7.10. Subsections (c) and (d), Section 21.046, Education Code, are amended to read as follows: (c) Because an effective principal is essential to school improvement, the commissioner [board] shall ensure that: (1) each candidate for certification as a principal is of the highest caliber; and (2) multi-level screening processes, validated comprehensive assessment programs, and flexible internships with successful mentors exist to determine whether a candidate for certification as a principal possesses the essential knowledge, skills, and leadership capabilities necessary for success. (d) In creating the qualifications for certification as a principal, the commissioner [board] shall consider the knowledge, skills, and proficiencies for principals as developed by relevant national organizations and the State Board of Education. SECTION 7.11. Subsection (a), Section 21.048, Education Code, is amended to read as follows: (a) The commissioner [board] shall adopt [propose] rules prescribing comprehensive examinations for each class of certificate issued by the board. SECTION 7.12. Sections 21.0481, 21.0482, 21.0483, 21.0484, and 21.049, Education Code, are amended to read as follows: Sec. 21.0481. MASTER READING TEACHER CERTIFICATION. (a) To ensure that there are teachers with special training to work with other teachers and with students in order to improve student reading performance, the commissioner [board] shall establish a master reading teacher certificate. (b) The board shall issue a master reading teacher certificate to each eligible person. (c) To be eligible for a master reading teacher certificate, a person must: (1) hold a reading specialist certificate issued under this subchapter and satisfactorily complete a course of instruction as prescribed under Subdivision (2)(B); or (2) hold a teaching certificate issued under this subchapter and: (A) have at least three years of teaching experience; (B) satisfactorily complete a knowledge-based and skills-based course of instruction on the science of teaching children to read that includes training in: (i) effective reading instruction techniques, including effective techniques for students whose primary language is a language other than English; (ii) identification of dyslexia and related reading disorders and effective reading instruction techniques for students with those disorders; and (iii) effective professional peer mentoring techniques; (C) perform satisfactorily on the master reading teacher certification examination prescribed by the commissioner [board]; and (D) satisfy any other requirements prescribed by the commissioner [board]. Sec. 21.0482. MASTER MATHEMATICS TEACHER CERTIFICATION. (a) To ensure that there are teachers with special training to work with other teachers and with students in order to improve student mathematics performance, the commissioner [board] shall establish: (1) a master mathematics teacher certificate to teach mathematics at elementary school grade levels; (2) a master mathematics teacher certificate to teach mathematics at middle school grade levels; and (3) a master mathematics teacher certificate to teach mathematics at high school grade levels. (b) The board shall issue the appropriate master mathematics teacher certificate to each eligible person. (c) To be eligible for a master mathematics teacher certificate, a person must: (1) hold a teaching certificate issued under this subchapter; (2) have at least three years of teaching experience; (3) satisfactorily complete a knowledge-based course of instruction on the science of teaching children mathematics that includes training in mathematics instruction and professional peer mentoring techniques that, through scientific testing, have been proven effective; (4) perform satisfactorily on the appropriate master mathematics teacher certification examination prescribed by the commissioner [board]; and (5) satisfy any other requirements prescribed by the commissioner [board]. (d) The course of instruction prescribed under Subsection (c)(3) shall be developed by the commissioner [board] in consultation with mathematics and science faculty members at institutions of higher education. Sec. 21.0483. MASTER TECHNOLOGY TEACHER CERTIFICATION. (a) To ensure that there are teachers with special training to work with other teachers and with students in order to increase the use of technology in each classroom, the commissioner [board] shall establish a master technology teacher certificate. (b) The board shall issue a master technology teacher certificate to each eligible person. (c) To be eligible for a master technology teacher certificate, a person must: (1) hold a technology applications or Technology Education certificate issued under this subchapter, satisfactorily complete the course of instruction prescribed under Subdivision (2)(B), and satisfactorily perform on the examination prescribed under Subdivision (2)(C); or (2) hold a teaching certificate issued under this subchapter and: (A) have at least three years of teaching experience; (B) satisfactorily complete a knowledge-based and skills-based course of instruction on interdisciplinary technology applications and the science of teaching technology that includes training in: (i) effective technology instruction techniques, including applications designed to meet the educational needs of students with disabilities; (ii) classroom teaching methodology that engages student learning through the integration of technology; (iii) digital learning competencies, including Internet research, graphics, animation, website mastering, and video technologies; (iv) curriculum models designed to prepare teachers to facilitate an active student learning environment; and (v) effective professional peer mentoring techniques; (C) satisfactorily perform on an examination developed in cooperation with the Telecommunications Infrastructure Fund Board and administered at the conclusion of the course of instruction prescribed under Paragraph (B); and (D) satisfy any other requirements prescribed by the commissioner [board]. (d) The commissioner [board] may provide technology applications training courses under Subsection (c)(2)(B) in cooperation with: (1) regional education service centers; and (2) other public or private entities, including any state council on technology. Sec. 21.0484. MASTER SCIENCE TEACHER CERTIFICATION. (a) To ensure that there are teachers with special training to work with other teachers and with students in order to improve student science performance, the commissioner [board] shall establish: (1) a master science teacher certificate to teach science at elementary school grade levels; (2) a master science teacher certificate to teach science at middle school grade levels; and (3) a master science teacher certificate to teach science at high school grade levels. (b) The board shall issue the appropriate master science teacher certificate to each eligible person. (c) To be eligible for a master science teacher certificate, a person must: (1) hold a teaching certificate issued under this subchapter; (2) have at least three years of teaching experience; (3) satisfactorily complete a knowledge-based course of instruction on the science of teaching children science that includes training in science instruction and professional peer mentoring techniques that, through scientific testing, have been proven effective; (4) perform satisfactorily on the appropriate master science teacher certification examination prescribed by the commissioner [board]; and (5) satisfy any other requirements prescribed by the commissioner [board]. (d) The course of instruction prescribed under Subsection (c)(3) shall be developed by the commissioner [board] in consultation with science faculty members at institutions of higher education. Sec. 21.049. ALTERNATIVE CERTIFICATION. (a) To provide a continuing additional source of qualified educators, the commissioner [board] shall adopt [propose] rules providing for educator certification programs as an alternative to traditional educator preparation programs. The rules may not provide that a person may be certified under this section only if there is a demonstrated shortage of educators in a school district or subject area. (b) The commissioner [board] may not require a person employed as a teacher in a disciplinary [an] alternative education program under Section 37.008 or a juvenile justice alternative education program under Section 37.011 for at least three years to complete an alternative educator certification program adopted under this section before taking the appropriate certification examination. SECTION 7.13. Subsections (a) and (b), Section 21.050, Education Code, are amended to read as follows: (a) A person who applies for a teaching certificate for which commissioner [board] rules require a bachelor's degree must possess a bachelor's degree received with an academic major or interdisciplinary academic major, including reading, other than education, that is related to the curriculum as prescribed under Subchapter A, Chapter 28. (b) The commissioner [board] may not require more than 18 semester credit hours of education courses at the baccalaureate level for the granting of a teaching certificate. The commissioner [board] shall provide for a minimum number of semester credit hours of internship to be included in the hours needed for certification. The commissioner [board] may adopt [propose] rules requiring additional credit hours for certification in bilingual education, English as a second language, early childhood education, or special education. SECTION 7.14. Section 21.051, Education Code, is amended to read as follows: Sec. 21.051. OPTIONS FOR FIELD EXPERIENCE AND INTERNSHIPS. The commissioner [board] shall adopt [propose] rules providing flexible options for persons for any field experience or internship required for certification. SECTION 7.15. Subsection (a), Section 21.054, Education Code, is amended to read as follows: (a) The commissioner [board] shall adopt [propose] rules establishing a process for identifying continuing education courses and programs that fulfill educators' continuing education requirements. SECTION 7.16. Section 21.056, Education Code, is amended to read as follows: Sec. 21.056. ADDITIONAL CERTIFICATION. The commissioner [board] by rule shall provide for a certified educator to qualify for additional certification to teach at a grade level or in a subject area not covered by the educator's certificate upon satisfactory completion of an examination or other assessment of the educator's qualification. SECTION 7.17. Subsection (d), Section 21.057, Education Code, is amended to read as follows: (d) For purposes of this section, "inappropriately certified or uncertified teacher": (1) includes: (A) an individual serving on an emergency certificate issued under Section 21.041(b)(2); or (B) an individual who does not hold any certificate or permit issued under this chapter and is not employed as specified by Subdivision (2)(E); and (2) does not include an individual: (A) who is a certified teacher assigned to teach a class or classes outside his or her area of certification, as determined by rules adopted [proposed] by the commissioner [board] in specifying the certificate required for each assignment; (B) serving on a certificate issued due to a hearing impairment under Section 21.048; (C) serving on a certificate issued pursuant to enrollment in an approved alternative certification program under Section 21.049; (D) certified by another state or country and serving on a certificate issued under Section 21.052; (E) serving on a school district teaching permit issued under Section 21.055; or (F) employed under a waiver granted by the commissioner pursuant to Section 7.056. SECTION 7.18. Subsection (d), Section 21.058, Education Code, is amended to read as follows: (d) A person whose certificate is revoked under Subsection (b) may reapply for a certificate in accordance with commissioner [board] rules. SECTION 7.19. Subsection (c), Section 21.105, Education Code, is amended to read as follows: (c) On written complaint by the employing district and recommendation by the commissioner, the Educators' Professional Practices [State] Board [for Educator Certification] may impose sanctions against a teacher employed under a probationary contract who: (1) resigns; (2) fails without good cause to comply with Subsection (a) or (b); and (3) fails to perform the contract. SECTION 7.20. Subsection (c), Section 21.160, Education Code, is amended to read as follows: (c) On written complaint by the employing district and recommendation by the commissioner, the Educators' Professional Practices [State] Board [for Educator Certification] may impose sanctions against a teacher who is employed under a continuing contract that obligates the district to employ the person for the following school year and who: (1) resigns; (2) fails without good cause to comply with Subsection (a) or (b); and (3) fails to perform the contract. SECTION 7.21. Subsection (c), Section 21.210, Education Code, is amended to read as follows: (c) On written complaint by the employing district and recommendation by the commissioner, the Educators' Professional Practices [State] Board [for Educator Certification] may impose sanctions against a teacher who is employed under a term contract that obligates the district to employ the person for the following school year and who: (1) resigns; (2) fails without good cause to comply with Subsection (a) or (b); and (3) fails to perform the contract. SECTION 7.22. Section 21.503, Education Code, is amended to read as follows: Sec. 21.503. ELIGIBILITY. A person is eligible for the program if the person: (1) has served in the armed forces of the United States; (2) is honorably discharged, retired, or released from active duty on or after October 1, 1990, after at least six years of continuous active duty service immediately before the discharge, retirement, or release; (3) has received a baccalaureate or advanced degree from a public or private institution of higher education accredited by a regional accrediting agency or group that is recognized by a nationally recognized accreditation board; and (4) satisfies any other criteria for selection [jointly] prescribed by the agency [and the State Board for Educator Certification]. SECTION 7.23. Subsection (b), Section 21.504, Education Code, is amended to read as follows: (b) The agency [and the State Board for Educator Certification] shall distribute the applications and information regarding the program. SECTION 7.24. Subsection (c), Section 21.510, Education Code, is amended to read as follows: (c) For purposes of this section, a participant in the program is not considered to be in violation of an agreement under Section 21.508 during any period in which the participant: (1) is pursuing a full-time course of study related to the field of teaching at a public or private institution of higher education approved by the agency [State Board for Educator Certification]; (2) is serving on active duty as a member of the armed forces of the United States; (3) is temporarily totally disabled for a period not to exceed three years as established by sworn affidavit of a qualified physician; (4) is unable to secure employment for a period not to exceed one year because of care required by a disabled spouse; (5) is seeking and unable to find full-time employment as a teacher in a public elementary or secondary school for a single period not to exceed 27 months; or (6) satisfies the provisions of any additional reimbursement exception adopted by the agency. SECTION 7.25. Sections 21.551, 21.552, and 21.553, Education Code, are amended to read as follows: Sec. 21.551. PURPOSES. The purposes of the alternative certification Teach for Texas Pilot Program are to: (1) attract to the teaching profession persons who have expressed interest in teaching and to support the certification of those persons as teachers; (2) recognize the importance of the certification process governed by the commissioner [State Board for Educator Certification] under Subchapter B, which requires verification of competence in subject area and professional knowledge and skills; (3) encourage the creation and expansion of educator preparation programs that recognize the knowledge and skills gained through previous educational and work-related experiences and that are delivered in a manner that recognizes individual circumstances, including the need to remain employed full-time while enrolled in the Teach for Texas Pilot Program; and (4) provide annual stipends to postbaccalaureate teacher certification candidates. Sec. 21.552. PROGRAM ESTABLISHED. The commissioner [State Board for Educator Certification] by rule shall establish the Teach for Texas Pilot Program consistent with the purposes provided by Section 21.551. Sec. 21.553. FINANCIAL INCENTIVES. (a) The pilot program must offer to participants financial incentives, including tuition assistance and loan forgiveness. In offering a financial incentive, the commissioner [State Board for Educator Certification] shall: (1) require a contract between each participant who accepts a financial incentive and the agency [State Board for Educator Certification] under which the participant is obligated to teach in a public school in this state for a stated period after certification; (2) provide financial incentives in proportion to the length of the period the participant is obligated by contract to teach after certification; and (3) give special financial incentives to a participant who agrees in the contract to teach in an underserved area. (b) Financial incentives may be paid only from funds appropriated specifically for that purpose and from gifts, grants, and donations solicited or accepted by the commissioner [State Board for Educator Certification] for that purpose. (c) The commissioner [State Board for Educator Certification] shall adopt [propose] rules establishing criteria for awarding financial incentives under this section, including criteria for awarding financial incentives if there are more participants than funds available to provide the financial incentives. SECTION 7.26. Subsection (b), Section 21.604, Education Code, is amended to read as follows: (b) The agency [and the State Board for Educator Certification] shall distribute the applications and information regarding the program. SECTION 7.27. Subsection (c), Section 21.609, Education Code, is amended to read as follows: (c) For purposes of this section, a participant in the program is not considered to be in violation of an agreement under Section 21.607 during any period in which the participant: (1) is pursuing a full-time course of study related to the field of teaching at an institution of higher education approved by the agency [State Board for Educator Certification]; (2) is serving on active duty as a member of the armed forces of the United States; (3) is temporarily totally disabled for a period not to exceed three years as established by affidavit of a qualified physician; (4) is unable to secure employment for a period not to exceed one year because of care required by a disabled spouse; (5) is seeking and unable to find full-time employment as a teacher in a public elementary or secondary school for a single period not to exceed 27 months; or (6) satisfies the provisions of any additional reimbursement exception adopted by the agency. SECTION 7.28. Subsection (b), Section 22.0512, Education Code, is amended to read as follows: (b) In this section, "disciplinary proceeding" means: (1) an action brought by the school district employing a professional employee of a school district to discharge or suspend the employee or terminate or not renew the employee's term contract; or (2) an action brought by the Educators' Professional Practices [State] Board [for Educator Certification] to enforce the educator's code of ethics adopted under Section 21.041(a-1) [21.041(b)(8)]. SECTION 7.29. Section 22.082, Education Code, is amended to read as follows: Sec. 22.082. ACCESS TO CRIMINAL HISTORY RECORDS BY STATE EDUCATION AUTHORITIES [BOARD FOR EDUCATOR CERTIFICATION]. (a) The agency [State Board for Educator Certification] shall obtain from any law enforcement or criminal justice agency all criminal history record information that relates to an applicant for or holder of a certificate issued under Subchapter B, Chapter 21. (b) The Educators' Professional Practices Board may obtain from any law enforcement or criminal justice agency all criminal history record information that relates to a holder of a certificate issued under Subchapter B, Chapter 21. SECTION 7.30. Subsection (d), Section 22.083, Education Code, is amended to read as follows: (d) The superintendent of a district or the director of an open-enrollment charter school, private school, regional education service center, or shared services arrangement shall promptly notify the Educators' Professional Practices [State] Board [for Educator Certification] in writing if the person obtains or has knowledge of information showing that an applicant for or holder of a certificate issued under Subchapter B, Chapter 21, has a reported criminal history. The board shall notify the commissioner of the reported criminal history. SECTION 7.31. Sections 22.085 and 22.086, Education Code, are amended to read as follows: Sec. 22.085. DISCHARGE OF EMPLOYEES CONVICTED OF OFFENSES. A school district, open-enrollment charter school, private school, regional education service center, or shared services arrangement may discharge an employee if the district or school obtains information of the employee's conviction of a felony or of a misdemeanor involving moral turpitude that the employee did not disclose to the agency [State Board for Educator Certification] or the district, school, service center, or shared services arrangement. An employee discharged under this section is considered to have been discharged for misconduct for purposes of Section 207.044, Labor Code. Sec. 22.086. LIABILITY FOR REPORTING OFFENSES. The agency, the Educators' Professional Practices [State] Board [for Educator Certification], a school district, an open-enrollment charter school, a private school, a regional education service center, a shared services arrangement, or an employee of the agency, board, district, school, service center, or shared services arrangement is not civilly or criminally liable for making a report required under this subchapter. SECTION 7.32. Subsections (a), (b), (c) and (e), Section 29.061, Education Code, are amended to read as follows: (a) The commissioner [State Board for Educator Certification] shall provide for the issuance of teaching certificates appropriate for bilingual education instruction to teachers who possess a speaking, reading, and writing ability in a language other than English in which bilingual education programs are offered and who meet the general requirements of Chapter 21. The commissioner [board] shall also provide for the issuance of teaching certificates appropriate for teaching English as a second language. The commissioner [board] may issue emergency endorsements in bilingual education and in teaching English as a second language. (b) A teacher assigned to a bilingual education program must be appropriately certified under Subchapter B, Chapter 21, for bilingual education [by the board]. (c) A teacher assigned to an English as a second language or other special language program must be appropriately certified under Subchapter B, Chapter 21, for English as a second language [by the board]. (e) The agency [State Board for Educator Certification] and the Texas Higher Education Coordinating Board shall develop a comprehensive plan for meeting the teacher supply needs created by the programs outlined in this subchapter. SECTION 7.33. Subsections (b) and (c), Section 33.002, Education Code, are amended to read as follows: (b) A school district with 500 or more students enrolled in elementary school grades shall employ a counselor certified under the rules of the commissioner [State Board for Educator Certification] for each elementary school in the district. A school district shall employ at least one counselor for every 500 elementary school students in the district. (c) A school district with fewer than 500 students enrolled in elementary school grades shall provide guidance and counseling services to elementary school students by: (1) employing a part-time counselor certified under the rules of the commissioner [State Board for Educator Certification]; (2) employing a part-time teacher certified as a counselor under the rules of the commissioner [State Board for Educator Certification]; or (3) entering into a shared services arrangement agreement with one or more school districts to share a counselor certified under the rules of the commissioner [State Board for Educator Certification]. SECTION 7.34. Subsection (g), Section 37.007, Education Code, as amended by H. B. No. 603, Acts of the 79th Legislature, Regular Session, 2005, effective September 1, 2005, is amended to read as follows: (g) In addition to any notice required under Article 15.27, Code of Criminal Procedure, a school district shall inform each educator who has responsibility for, or is under the direction and supervision of an educator who has responsibility for, the instruction of a student who has engaged in any violation listed in this section of the student's misconduct. Each educator shall keep the information received under this subsection confidential from any person not entitled to the information under this subsection, except that the educator may share the information with the student's parent or guardian as provided for by state or federal law. The Educators' Professional Practices [State] Board on recommendation of the commissioner [for Educator Certification] may revoke or suspend the certification of an educator who intentionally violates this subsection. SECTION 7.35. Section 61.0514, Education Code, is amended to read as follows: Sec. 61.0514. INTEGRATED COURSEWORK. The board, with the cooperation and advice of the commissioner of education [State Board for Educator Certification], shall adopt educator preparation coursework guidelines that promote, to the greatest extent practicable, the integration of subject matter knowledge with classroom teaching strategies and techniques in order to maximize the effectiveness and efficiency of coursework required for certification under Subchapter B, Chapter 21. SECTION 7.36. Section 61.077, Education Code, as amended by Chapters 61, 818, and 820, Acts of the 78th Legislature, Regular Session, 2003, is reenacted and amended to read as follows: Sec. 61.077. P-16 COUNCIL. (a) The P-16 Council shall advise the Texas Higher Education Coordinating Board and the State Board of Education in coordinating postsecondary career and technology activities, career and technology teacher education programs offered or proposed to be offered in the colleges and universities of this state, and other relevant matters, including those listed in Section 61.076. (b) The council is composed of the commissioner of education, the commissioner of higher education, and the executive director of the Texas Workforce Commission[, and the executive director of the State Board for Educator Certification]. Existing members of the council may appoint additional members as the members consider necessary. The position of presiding officer rotates among the members of the council in the order the members are listed in this subsection, with each member serving as the presiding officer for one two-year term. (c) The council shall meet at least once each calendar quarter and may hold other meetings as necessary at the call of the presiding officer. Each member of the council or the member's designee shall make a report of the council's activities at least twice annually to the governing body of the member's agency or, in the case of the commissioner of education, to the State Board of Education. (d) The purposes of this council shall include the following: (1) to advise the two boards on the coordination of postsecondary career and technology education and the articulation between postsecondary career and technology education and secondary career and technology education; (2) to facilitate the transfer of responsibilities for the administration of postsecondary career and technology education from the State Board of Education to the board in accordance with Section 111(a)(I) of the Carl D. Perkins Vocational Education Act, Public Law 98-524; (3) to cooperate with the commissioner of higher education and the State Board of Education, when it acts as the State Board for Career and Technology Education, on the following: (A) the transfer of federal funds to the board for allotment to eligible public postsecondary institutions of higher education; (B) the career and technology education funding for projects and institutions as determined by the board when the State Board for Career and Technology Education is required by federal law to endorse such determinations; (C) the development and updating of the state plan for career and technology education and the evaluation of programs, services, and activities of postsecondary career and technology education and such amendments to the state plan for career and technology education as may relate to postsecondary education; (D) other matters related to postsecondary career and technology education; and (E) the coordination of curricula, instructional programs, research, and other functions as appropriate, including areas listed in Section 61.076, school-to-work and school-to-college transition programs, and professional development activities; (4) to advise the Texas Workforce Investment Council on educational policy issues related to workforce preparation; and (5) to examine and make recommendations regarding the alignment of secondary and postsecondary education: (A) curricula; and (B) testing and assessment. (e) Subsection (d)(5) does not require the council to establish curriculum or testing or assessment standards. SECTION 7.37. Subsection (a), Section 1001.254, Education Code, is amended to read as follows: (a) A temporary driver education instructor license may be issued authorizing a person to teach or provide classroom driver education training if the person: (1) has completed the educational requirements prescribed by Section 1001.253(d)(1); (2) holds a Texas teaching certificate with an effective date before February 1, 1986; (3) meets all license requirements, other than successful completion of the examination required under rules adopted by the commissioner [State Board for Educator Certification] to revalidate the teaching certificate; and (4) demonstrates, in a manner prescribed by the commissioner, the intention to comply with the examination requirement at the first available opportunity. SECTION 7.38. Subsection (a), Article 15.27, Code of Criminal Procedure, is amended to read as follows: (a) A law enforcement agency that arrests any person or refers a child to the office or official designated by the juvenile board who the agency believes is enrolled as a student in a public primary or secondary school, for an offense listed in Subsection (h), shall attempt to ascertain whether the person is so enrolled. If the law enforcement agency ascertains that the individual is enrolled as a student in a public primary or secondary school, the agency shall orally notify the superintendent or a person designated by the superintendent in the school district in which the student is enrolled of that arrest or referral within 24 hours after the arrest or referral is made, or on the next school day. If the law enforcement agency cannot ascertain whether the individual is enrolled as a student, the agency shall orally notify the superintendent or a person designated by the superintendent in the school district in which the student is believed to be enrolled of that arrest or detention within 24 hours after the arrest or detention, or on the next school day. If the individual is a student, the superintendent shall promptly notify all instructional and support personnel who have responsibility for supervision of the student. All personnel shall keep the information received in this subsection confidential. The Educators' Professional Practices [State] Board [for Educator Certification] may revoke or suspend the certification of personnel who intentionally violate this subsection. Within seven days after the date the oral notice is given, the law enforcement agency shall mail written notification, marked "PERSONAL and CONFIDENTIAL" on the mailing envelope, to the superintendent or the person designated by the superintendent. Both the oral and written notice shall contain sufficient details of the arrest or referral and the acts allegedly committed by the student to enable the superintendent or the superintendent's designee to determine whether there is a reasonable belief that the student has engaged in conduct defined as a felony offense by the Penal Code. The information contained in the notice may be considered by the superintendent or the superintendent's designee in making such a determination. SECTION 7.39. Subsection (b), Article 42.018, Code of Criminal Procedure, is amended to read as follows: (b) Not later than the fifth day after the date a person who holds a certificate issued under Subchapter B, Chapter 21, Education Code, is convicted or granted deferred adjudication on the basis of an offense, the clerk of the court in which the conviction or deferred adjudication is entered shall provide to the Texas Education Agency and the Educators' Professional Practices [State] Board [for Educator Certification] written notice of the person's conviction or deferred adjudication, including the offense on which the conviction or deferred adjudication was based. SECTION 7.40. Section 411.090, Government Code, is amended to read as follows: Sec. 411.090. ACCESS TO CRIMINAL HISTORY RECORD INFORMATION: STATE EDUCATIONAL AUTHORITIES [BOARD FOR EDUCATOR CERTIFICATION]. (a) The Texas Education Agency [State Board for Educator Certification] is entitled to obtain from the department any criminal history record information maintained by the department about a person who has applied to the commissioner [board] for a certificate or holds a certificate under Subchapter B, Chapter 21, Education Code. (b) Criminal history record information obtained by the agency [board] under Subsection (a): (1) may be used for any purpose related to the issuance or[,] denial[, suspension, or cancellation] of a certificate issued under Subchapter B, Chapter 21, Education Code [by the board]; (2) may be provided to the Educators' Professional Practices Board to be used for any purpose related to the suspension or revocation of a certificate issued under Subchapter B, Chapter 21, Education Code; (3) may not be released to any other person except on court order or with the consent of the applicant for a certificate; and (4) [(3)] shall be destroyed by the agency [board] after the information is used for the authorized purposes. (c) The Educators' Professional Practices Board is entitled to obtain from the department any criminal history record information maintained by the department about a person who holds a certificate issued under Subchapter B, Chapter 21, Education Code. (d) Criminal history record information obtained by the board under Subsection (c): (1) may be used for any purpose related to the suspension or revocation of a certificate issued under Subchapter B, Chapter 21, Education Code; (2) may be provided to the Texas Education Agency to be used for any purpose related to the issuance or denial of a certificate under Subchapter B, Chapter 21, Education Code; (3) may not be released to any other person except on court order or with the consent of the holder of the certificate; and (4) shall be destroyed by the board after the information is used for the authorized purposes. SECTION 7.41. Subsection (d), Section 411.097, Government Code, is amended to read as follows: (d) Criminal history record information obtained by a school district, charter school, private school, service center, commercial transportation company, or shared services arrangement under Subsection (a), (b), or (c) may not be released or disclosed to any person, other than the individual who is the subject of the information, the Texas Education Agency, the Educators' Professional Practices [State] Board [for Educator Certification], or the chief personnel officer of the transportation company, if the information is obtained under Subsection (a)(2). SECTION 7.42. Subsection (a), Section 654.011, Government Code, is amended to read as follows: (a) The position classification plan and the salary rates and provisions in the General Appropriations Act apply to all hourly, part-time, temporary, and regular, full-time salaried employments in the state departments, agencies, or judicial entities specified in the articles of the General Appropriations Act that appropriate money to: (1) general government agencies; (2) health and human services agencies; (3) the judiciary, except for judges, district attorneys, and assistant district attorneys; (4) public safety and criminal justice agencies; (5) natural resources agencies; (6) business and economic development agencies; (7) regulatory agencies; and (8) agencies of public education, but only the Texas Education Agency, the Texas School for the Blind and Visually Impaired, [the State Board for Educator Certification,] the Telecommunications Infrastructure Fund, and the Texas School for the Deaf. SECTION 7.43. Subdivision (7), Section 821.001, Government Code, is amended to read as follows: (7) "Employer" means any agents or agencies in the state responsible for public education, including the governing board of any school district created under the laws of this state, any county school board, the board of trustees, the board of regents of any college or university, or any other legally constituted board or agency of any public school, but excluding the State Board of Education and[,] the Texas Education Agency[, and the State Board for Educator Certification]. SECTION 7.44. Section 821.103, Government Code, is amended to read as follows: Sec. 821.103. CANCELLATION OF TEACHER CERTIFICATE. (a) After receiving notice from the board of trustees of an offense under Section 821.101 and after complying with Chapter 2001 and rules adopted by the Educators' Professional Practices [State] Board [for Educator Certification], the board [State Board for Educator Certification] may cancel the teacher certificate of a person if the board [State Board for Educator Certification] determines that the person committed the offense. (b) The Educators' Professional Practices [executive director of the State] Board [for Educator Certification] may enter into an agreed sanction. (c) A criminal prosecution of an offender under Section 821.101 is not a prerequisite to action by the Educators' Professional Practices [State] Board [for Educator Certification or its executive director]. SECTION 7.45. Subsection (a), Section 2054.352, Government Code, is reenacted and amended to conform to Chapters 553, 1216, and 1275, Acts of the 78th Legislature, Regular Session, 2003, and further amended to read as follows: (a) The following licensing entities shall participate in the system established under Section 2054.353[, as added by Chapter 353, Acts of the 77th Legislature, Regular Session, 2001]: (1) State Board of Barber Examiners; (2) Texas Board of Chiropractic Examiners; (3) Texas Cosmetology Commission; (4) Court Reporters Certification Board; (5) State Board of Dental Examiners; (6) Texas Funeral Service Commission; (7) Texas Board of Professional Land Surveying; (8) Texas State Board of Medical Examiners; (9) Board of Nurse Examiners; (10) Texas Optometry Board; (11) Texas Structural Pest Control Board; (12) Texas State Board of Pharmacy; (13) Executive Council of Physical Therapy and Occupational Therapy Examiners; (14) Texas State Board of Plumbing Examiners; (15) Texas State Board of Podiatric Medical Examiners; (16) Board of Tax Professional Examiners; (17) Polygraph Examiners Board; (18) Texas State Board of Examiners of Psychologists; (19) State Board of Veterinary Medical Examiners; (20) Texas Real Estate Commission; (21) Texas Appraiser Licensing and Certification Board; (22) Texas Department of Licensing and Regulation; (23) [(24)] Texas State Board of Public Accountancy; (24) Texas Education Agency; (25) Educators' Professional Practices [State] Board [for Educator Certification]; (26) Texas Board of Professional Engineers; (27) Texas Department of Health; (28) Texas Board of Architectural Examiners; (29) Texas Racing Commission; (30) Commission on Law Enforcement Officer Standards and Education; and (31) Texas Commission on Private Security. SECTION 7.46. Subsection (c), Section 2165.104, Government Code, is amended to read as follows: (c) To the extent possible without sacrificing critical public or client services, the commission may not allocate usable office space, as defined by the commission, to a state agency under Article I, II, V, VI, VII, or VIII of the General Appropriations Act or to the Texas Higher Education Coordinating Board, the Texas Education Agency, the Educators' Professional Practices [State] Board [for Educator Certification], the Telecommunications Infrastructure Fund Board, or the Office of Court Administration of the Texas Judicial System in an amount that exceeds an average of 135 square feet per agency employee for each agency site. To the extent that any of those agencies allocates its own usable office space, as defined by the commission, the agency shall allocate the space to achieve the required ratio. This subsection does not apply to: (1) an agency site at which there are so few employees that it is not practical to apply this subsection to that site, as determined by the commission; and (2) an agency site at which it is not practical to apply this subsection because of the site's type of space or use of space, as determined by the commission. SECTION 7.47. Subsection (b), Section 504.002, Occupations Code, is amended to read as follows: (b) This chapter does not apply to an activity or service of a person who: (1) is employed as a counselor by a federal institution and is providing chemical dependency counseling within the scope of the person's employment; (2) except as provided by Section 504.057, is a student, intern, or trainee pursuing a supervised course of study in counseling at a regionally accredited institution of higher education or training institution, if the person: (A) is designated as a "counselor intern"; and (B) is engaging in the activity or providing the service as part of the course of study; (3) is not a resident of this state, if the person: (A) engages in the activity or provides the service in this state for not more than 30 days during any year; and (B) is authorized to engage in the activity or provide the service under the law of the state of the person's residence; (4) is a licensed physician, psychologist, professional counselor, or social worker; (5) is a religious leader of a congregation providing pastoral chemical dependency counseling within the scope of the person's duties; (6) is working for or providing counseling with a program exempt under Subchapter C, Chapter 464, Health and Safety Code; or (7) is a school counselor certified under Subchapter B, Chapter 21, Education Code [by the State Board for Educator Certification]. SECTION 7.48. Subsections (b) and (c), Section 21.035, and Sections 21.039, 21.040, and 21.042, Education Code, are repealed. SECTION 7.49. (a) The State Board for Educator Certification is abolished, and all powers, duties, personnel, property, assets, and obligations of the board are transferred to the Educators' Professional Practices Board and the Texas Education Agency, as determined appropriate by the commissioner of education. The validity of a prior action of the State Board for Educator Certification is not affected by the abolishment and any pending activities of the State Board for Educator Certification shall be deemed to have continued without interruption or material change. (b) The powers and duties of the Educators' Professional Practices Board, as created by this Act, shall continue to be exercised by the State Board for Educator Certification until the initial appointees of the Educators' Professional Practices Board assume their offices, which may not be later than January 1, 2006. (c) All rules of the State Board for Educator Certification relating to a transferred power or duty remain in effect as rules of the Educators' Professional Practices Board or commissioner of education, as appropriate, until amended or repealed by the board or commissioner. (d) A contested case, rulemaking procedure, program, test, fee, contract, review, evaluation, sanction, act, or decision of the State Board for Educator Certification that is pending, completed, or in effect on the effective date of this Act shall be deemed that of the commissioner of education or the Educators' Professional Practices Board to the extent authorized by Subchapter B, Chapter 21, Education Code, as amended by this Act, or other law, until and unless a change is expressly made by the commissioner or the board, as appropriate. (e) As soon as practicable after the effective date of this article and not later than November 1, 2005, the commissioner of education shall make initial appointments to the Educators' Professional Practices Board. In making the initial appointments, the commissioner shall designate four members to serve terms expiring February 1, 2007, four members to serve terms expiring February 1, 2009, and three members to serve terms expiring February 1, 2011. (f) A person who holds a certificate issued under Subchapter B, Chapter 21, Education Code, as it existed on January 1, 2005, may continue to practice under that certificate until the certificate is renewed or replaced under Subchapter B, Chapter 21, Education Code, as amended by this Act. (g) The code of ethics adopted under Subchapter B, Chapter 21, Education Code, as amended by this Act, by the State Board for Educator Certification and in effect on the effective date of this article remains in effect until superseded by rules of the Educators' Professional Practices Board.
ARTICLE 8. REPEALER; TRANSITION; EFFECTIVE DATE
SECTION 8.01. (a) Effective September 1, 2005, the following laws are repealed: (1) Sections 1, 2, 3, and 57, Chapter 201, Acts of the 78th Legislature, Regular Session, 2003; (2) Chapter 313, Acts of the 78th Legislature, Regular Session, 2003; (3) Section 1.01, Chapter 366, Acts of the 78th Legislature, Regular Session, 2003; and (4) Sections 7.006, 8.010, Subsection (h), Section 29.056, Subsection (g), Section 37.004, Subsections (b), (c), and (f), Section 39.027, Subsection (d), Section 39.051, Section 39.073, Section 39.074, and Subsection (e-1), Section 42.253, Education Code. (b) Effective September 1, 2006, Subsections (b) and (c), Section 25.0811, Education Code, are repealed. SECTION 8.02. Effective September 1, 2006, the following laws are repealed: (1) the following provisions of the Education Code: (A) Subchapters B, C, E, F, and G, Chapter 41; (B) Subchapter F, Chapter 42, as it existed on November 1, 2005; (C) Subsection (b), Section 21.402, Subsections (c) and (g), Section 29.203, Sections 31.025, 31.1031, 41.001, 41.002, 41.003, 41.0031, 41.007, Subsection (b), Section 41.009, Sections 41.011, 41.092, 41.099, Subsection (b), Section 41.252, Subsections (b) and (e), Section 42.103, and Sections 42.2514, 42.2517, 42.259, 42.260, and 42.4101; and (D) Subsection (a-1), Section 42.2512, and Section 42.2541, as added by Part A, Article 1, of this Act; (2) the following provisions of the Insurance Code: (A) Subsection (b), Section 1581.053; and (B) Subchapter C, Chapter 1581; and (3) Subsection (g), Sections 6.02, Subsection (m), Section 6.03, Subsection (b), Section 21.02, and Subsection (k), Section 25.25, Tax Code. SECTION 8.03. A school district maintenance tax rate imposed under Sections 45.002 and 45.003, Education Code, before September 1, 2005, is void. SECTION 8.04. (a) Except as provided by Subsection (b) of this section, if two or more sections of this Act amend the same provision of law, the sections of the Act should be harmonized, if possible, so that effect may be given to each section. (b) If a section of this Act repeals a provision of Chapter 12, Education Code, that section prevails over a section of this Act that amends the same provision. SECTION 8.05. A change in law made by this Act relating to a school district maintenance tax or enrichment tax under Chapter 41 or Chapter 42, Education Code, prevails over any similar provision of H.B. No. 3, Acts of the 79th Legislature, 2nd Called Session, 2005. SECTION 8.06. Except as otherwise specifically provided by this Act, this Act applies beginning with the 2005-2006 school year. SECTION 8.07. Except as otherwise specifically provided by this Act, this Act takes effect September 1, 2005, but only if H.B. No. 3, Acts of the 79th Legislature, 2nd Called Session, 2005, becomes law. If H.B. No. 3 does not become law, this Act has no effect.
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