80R5921 JRJ-D
 
  By: Shapiro, Janek S.B. No. 4
 
 
 
   
 
 
A BILL TO BE ENTITLED
AN ACT
relating to open-enrollment charter schools and the creation of
public charter districts.
       BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
       SECTION 1.  (a) Effective August 1, 2008, 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Chapter 12, Education Code, is repealed.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, 2008, shall be
dissolved in accordance with Subchapter J, Chapter 11A, Education
Code, as added by this Act.
       SECTION 2.  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 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.
       (e)  Chapter 26 applies to a public charter district and a
parent of a student enrolled in the public charter district in the
same manner as a school district or parent of a student enrolled in
the school district.  In this subsection, "parent" has the meaning
assigned by Section 26.002.
       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;
                   (B)  Subchapter A, Chapter 2254, Government Code;
and
                   (C)  Subchapter B, Chapter 271, Local Government
Code; and
             (2)  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, 2007;
             (2)  the individual was employed by the charter holder
and serving as a member of the governing body on August 31, 2007, in
compliance with former Section 12.1054;
             (3)  the individual had been continuously so employed
and serving since a date on or before January 1, 2007; and
             (4)  the charter holder meets or exceeds the fiscal and
academic standards described by Section 11A.1041(a)(1) for the
preceding school year, as determined by the commissioner.
       (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, 2007;
             (2)  the individual was employed or serving in the
position on August 31, 2007, in compliance with former Section
12.1055;
             (3)  the individual has been continuously employed or
serving since a date on or before January 1, 2007; and
             (4)  the charter holder meets or exceeds the fiscal and
academic standards described by Section 11A.1041(a)(1) for the
preceding school year, as determined by the commissioner.
       (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, grade 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, 2008:
             (1)  an eligible entity, other than an eligible entity
described by Subdivision (2) or (3), holding a charter granted
before September 1, 2002, under Subchapter D, Chapter 12, as that
subchapter existed on January 1, 2007, if:
                   (A)  for fiscal year 2006, 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 2006-2007 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 2006-2007 school year;
             (2)  a governmental entity holding a charter under
Subchapter D, Chapter 12, as that subchapter existed on January 1,
2007;
             (3)  an eligible entity holding a charter under
Subchapter D, Chapter 12, as that subchapter existed on January 1,
2007, 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, 2007.
       (b)  For purposes of Subsection (a)(1)(A), an entity that
fails to submit an audit report under Section 44.008 for fiscal year
2006 before September 1, 2007, is considered for fiscal year 2006 to
have total liabilities that exceed total assets, unless the
commissioner determines that unusual circumstances contributed to
the failure to submit a report and allows submission after
September 1, 2007.
       (c)  Assessment instrument results for fewer than five
students are not considered for purposes of Subsection (a)(1)(B) or
(C).
       (d)  The commissioner shall determine which entities are
eligible for a charter under this section as soon as practicable.
       (e)  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, 2007, except that where the terms
conflict with this chapter, this chapter prevails.
       (f)  An eligible entity holding multiple charters before
January 1, 2007, may not combine those charters into one charter for
a public charter district but must retain each of those charters.  
Each charter retained under this subsection counts towards the
limit imposed under Section 11A.002(c).
       (g)  Section 11A.157 does not apply to an entity granted a
charter under this section.
       (h)  A decision of the commissioner under this section is not
subject to an appeal to a district court.
       (i)  This section expires January 1, 2010.
       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 2006-2007 school year.
       (e)  This section expires January 1, 2010.
       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)  the public charter district is not rated
accredited-warned or accredited-probation under Subchapter D,
Chapter 39;
             (3)  each campus operated by the charter holder of 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;
             (4)  no campus operated by the public charter district
has been identified as needing technical assistance under Section
39.1322 for its most recent two years of operation;
             (5)  the public charter district has been rated
superior, above standard, standard, or the equivalent, under the
financial accountability system under Subchapter I, Chapter 39;
             (6)  during the three years preceding the proposed
charter revision, the public charter district and its campuses have
not been subject to a stage 2 or higher intervention or similarly
severe intervention, as determined by the commissioner, or sanction
under Subchapter G, 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
             (7)  the charter revision is in the best interest of
students of this state.
       (d)  In making a determination under Subsection (c)(7), 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)  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 or
receives an accreditation status of accredited-warned or
accredited-probation 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
39.1324(d), (e), or (f).
       (c)  A revocation under Subsection (b)(1) is effective on
January 1 following the date on 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. 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
62.001(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 commissioner 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 commissioner.
       (b)  Each public charter district shall file annually with
the commissioner the following information in a form prescribed by
the commissioner:
             (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 42.252 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 2005-2006 or
2006-2007 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,
2014.
       (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, including grants and
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 audit 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 a provision listed in 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.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)  each campus of a public charter district for which
the charter holder has been granted a charter has for the two
preceding school years been rated recognized or exemplary under
Subchapter D, Chapter 39; 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 audit 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
academically unacceptable under Subchapter D, Chapter 39, for one
or more campuses, 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 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 for a public charter district 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.  TEXTBOOKS; FUNDING FOR TECHNOLOGY. A public
charter district is entitled to textbooks under Chapter 31 and
funding for technology under Subchapter A, Chapter 32, and is
subject to those provisions as if the public charter district were a
school district.
       Sec. 11A.209.  ANNUAL BUDGET. The governing body of a
charter holder shall annually adopt a budget for the district.
       Sec. 11A.210.  ANNUAL AUDIT. The governing body of a charter
holder 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 CHARTER DISTRICT
       Sec. 11A.251.  ADMISSION POLICY. (a) Except as provided by
this section, 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.
       (c)  A public charter district admission policy may require a
student to demonstrate artistic ability if the school specializes
in performing arts.
       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;
             (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; and
             (3)  be made available on the public charter district's
Internet website, if available.
       (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.
       (d)  A public charter district that specializes in one or
more performing arts may require an applicant to audition for
admission to the school.
       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 Sections 39.023(a), (c), and
(l).
       (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, 2007, 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:
             (1)  low academic performance; or
             (2)  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.
       Sec. 11A.257.  IMPROVED LEARNING ENVIRONMENT. A public
charter district may, if the district determines that the rule
would improve the learning environment at a district campus, adopt
a rule that:
             (1)  requires students at a district campus to wear
school uniforms; or
             (2)  establishes a same-sex campus or classroom.
[Sections 11A.258-11A.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. Section 6319, 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.  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.304.  WAGE INCREASE FOR CERTAIN PROFESSIONAL STAFF.  
(a)  This section applies to a charter holder that on January 1,
2006, operated an open-enrollment charter school.
       (b)  Each school year, using state funds received by the
charter holder for that purpose under Subsection (e), a charter
holder that participated in the program under Chapter 1579,
Insurance Code, for the 2005-2006 school year shall provide
employees of the charter holder, other than administrators,
compensation in the form of annual salaries, incentives, or other
compensation determined appropriate by the charter holder that
results in an average compensation increase for classroom teachers,
full-time librarians, full-time counselors, and full-time school
nurses who are employed by the charter holder and who would be
entitled to a minimum salary under Section 21.402 if employed by a
school district, in an amount at least equal to $2,500.
       (c)  Using state funds received by the charter holder for
that purpose under Subsection (f), a charter holder that
participated in the program under Chapter 1579, Insurance Code, for
the 2005-2006 school year shall provide employees of the charter
holder, other than administrators, compensation in the form of
annual salaries, incentives, or other compensation determined
appropriate by the charter holder that results in average
compensation increases as follows:
             (1)  for full-time employees other than employees who
would be entitled to a minimum salary under Section 21.402 if
employed by a school district, an average increase at least equal to
$500; and
             (2)  for part-time employees, an average increase at
least equal to $250.
       (d)  Each school year, using state funds received by the
charter holder for that purpose under Subsection (g), a charter
holder that did not participate in the program under Chapter 1579,
Insurance Code, for the 2005-2006 school year shall provide
employees of the charter holder, other than administrators,
compensation in the form of annual salaries, incentives, or other
compensation determined appropriate by the charter holder that
results in an average compensation increase for classroom teachers,
full-time librarians, full-time counselors, and full-time school
nurses who are employed by the charter holder and who would be
entitled to a minimum salary under Section 21.402 if employed by a
school district, in an amount at least equal to $2,000.
       (e)  Each school year, in addition to any amounts to which a
charter holder is entitled under this chapter, a charter holder
that participated in the program under Chapter 1579, Insurance
Code, for the 2005-2006 school year is entitled to state aid in an
amount, as determined by the commissioner, equal to the product of
$2,500 multiplied by the number of classroom teachers, full-time
librarians, full-time counselors, and full-time school nurses
employed by the charter holder at a public charter district campus.
       (f)  In addition to any amounts to which a charter holder is
entitled under this chapter, a charter holder that participated in
the program under Chapter 1579, Insurance Code, for the 2005-2006
school year is entitled to state aid in an amount, as determined by
the commissioner, equal to the sum of:
             (1)  the product of $500 multiplied by the number of
full-time employees other than employees who would be entitled to a
minimum salary under Section 21.402 if employed by a school
district; and
             (2)  the product of $250 multiplied by the number of
part-time employees.
       (g)  Each school year, in addition to any amounts to which a
charter holder is entitled under this chapter, a charter holder
that did not participate in the program under Chapter 1579,
Insurance Code, for the 2005-2006 school year is entitled to state
aid in an amount, as determined by the commissioner, equal to the
product of $2,000 multiplied by the number of classroom teachers,
full-time librarians, full-time counselors, and full-time school
nurses employed by the charter holder at a public charter district
campus.
       (h)  A payment under this section is in addition to wages the
charter holder would otherwise pay the employee during the school
year.
[Sections 11A.305-11A.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, 2009.
       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.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 limits 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.  DEFINITIONS. In this subchapter:
             (1)  "Blue ribbon charter campus" and "campus" mean the
public school formed when an eligible entity is granted a blue
ribbon charter under this subchapter.
             (2)  "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.
       Sec. 11A.402.  AUTHORIZATION. (a)  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 Subchapter D, Chapter 39, for at least five school years.
       (b)  A charter holder that assumed operation of an existing
charter school program during the seven years preceding the
proposed authorization under Subsection (a) may be authorized to
grant a blue ribbon charter under Subsection (a) if:
             (1)  the performance level of the program at a campus
before and after the charter holder assumed operation of the
program meets the qualifications described by Subsection (a); and
             (2)  the charter holder has met the qualifications
described by Subsection (a) since assuming operation of the
program.
       (c)  A charter holder may grant a blue ribbon charter only to
an eligible entity 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.403.  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.404.  RELATIONSHIP BETWEEN CHARTER HOLDER AND BLUE
RIBBON CHARTER CAMPUS. (a) The governing body of the charter
holder 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.405.  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.406.  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.407.  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.408.  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.409.  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.410-11A.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, 2007; and
                   (B)  public property, as determined under Section
12.128, as that section existed on January 1, 2007.
             (2)  "Records" means government records, as determined
under Section 12.1052, as that section existed on January 1, 2007.
       Sec. 11A.452.  APPLICABILITY. The commissioner shall
appoint a receiver under this subchapter for each open-enrollment
charter school that on April 1, 2007, was operating under a charter
issued under Subchapter D, Chapter 12, as that subchapter existed
on January 1, 2007, 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 3.  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, and 11A.210.
       (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.  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 a 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 a governing body under
Section 11A.154;
             (9)  training for members of a 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 5.  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 6.  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 7.  Section 7.009(b), Education Code, is amended to
read as follows:
       (b)  The agency shall solicit and collect from the
Legislative Budget Board, centers for education research
established under Section 1.005, and exemplary or recognized school
districts, campuses, and public charter districts [open-enrollment
charter schools], as rated under Section 39.072, examples of best
practices relating to instruction, public school finance, resource
allocation, and business practices, including best practices
relating to curriculum, scope and sequence, compensation and
incentive systems, bilingual education and special language
programs, compensatory education programs, and the effective use of
instructional technology, including online courses.
       SECTION 8.  Sections 7.010(b) and (d), Education Code, are
amended to read as follows:
       (b)  Each school district, public charter 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.
       (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, public charter districts [open-enrollment
charter schools], and institutions of higher education.
       SECTION 9.  Section 7.028(b), Education Code, 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 10.  Section 7.055(b)(17), 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 11.  Section 7.102(c)(9), 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 12.  Section 11.003(e), Education Code, is amended
to read as follows:
       (e)  The commissioner may require a public charter district
[an open-enrollment charter school] to enter into a cooperative
shared services arrangement for administrative services if the
commissioner determines, after an audit conducted under Section
11A.351 [12.1163], that such a cooperative shared services
arrangement would promote the efficient operation of the district
[school].
       SECTION 13.  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 14.  Sections 21.058(b) and (c), 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
who holds a certificate under this subchapter, the board shall:
             (1)  revoke the certificate 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 15.  Section 21.652(b), Education Code, is amended
to read as follows:
       (b)  In adopting rules under this section, the commissioner
shall include rules governing eligibility for and participation by
a public charter district [an open-enrollment charter school] in
the program.
       SECTION 16.  Section 21.702(c), Education Code, is amended
to read as follows:
       (c)  In adopting rules under this section, the commissioner
shall include rules governing eligibility for and participation by
a public charter district [an open-enrollment charter school] in
the program.
       SECTION 17.  Sections 22.083(b) and (c), Education Code, are
amended to read as follows:
       (b)  A public charter district [An open-enrollment charter
school] shall obtain from 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 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.
       SECTION 18.  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 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 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 19.  Section 22.101(3), Education Code, is amended
to read as follows:
             (3)  "Participating charter school" means a public
charter district [an open-enrollment charter school] established
under Chapter 11A [Subchapter D, Chapter 12,] that participates in
the program established under Chapter 1579, Insurance Code.
       SECTION 20.  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 21.  Section 25.089(a), 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 22.  Section 25.090(b), 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 23.  Sections 25.093(d) and (e), 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 24.  Sections 25.095(a) and (b), 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 25.  Sections 25.0951(a) and (b), 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 26.  Sections 26.0085(a), (c), (d), and (e),
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 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
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 27.  Section 28.0211(j), 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 28.  Section 29.010(f), 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 29.  Sections 29.012(a) and (c), 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 30.  Sections 29.062(c), (d), and (e), 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 31.  Sections 29.087(a), (b), (b-1), (c), (e), (k),
and (l), 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 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 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 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
district's [or school's] program on assessment instruments required
under Chapter 39, the percentage of students participating in the
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 32.  Sections 29.155(a), (b), (c), (d), (i), and
(j), 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 school 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 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 33.  Section 29.905(b), 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 district [school].
       SECTION 34.  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 35.  Sections 32.102, 32.103, 32.104, 32.105, and
32.106, Education Code, are 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.
       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.
       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].
       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.
       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 36.  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 37.  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 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 38.  Section 37.007(e), 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 39.  Section 37.008(j), Education Code, 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 40.  Section 37.022(a)(2), Education Code, 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 41.  Section 39.072(c), Education Code, is amended
to read as follows:
       (c)  The agency shall evaluate against state standards and
shall, not later than August 1 of each year, report the performance
of each campus in a district and each public charter district
[open-enrollment charter school] on the basis of the campus's
performance on the indicators adopted under Sections 39.051(b)(1)
through (8). 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.
       SECTION 42.  Sections 39.114(c) and (d), Education Code, are
amended to read as follows:
       (c)  A public charter district [An open-enrollment charter
school] is entitled to an allotment under this section in the same
manner as a school district.
       (d)  The commissioner shall adopt rules to administer this
section, including rules related to the permissible use of funds
allocated under this section to a public charter district [an
open-enrollment charter school].
       SECTION 43.  Section 39.131(a), Education Code, is amended
to read as follows:
       (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 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 rated
academically unacceptable, or fails to satisfy financial
accountability standards as determined by commissioner rule,
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:
                   (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
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 academically
unacceptable for two consecutive school years, including the
current school year, 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 44.  Section 39.1321, Education Code, is amended to
read as follows:
       Sec. 39.1321.  SANCTIONS FOR PUBLIC CHARTER DISTRICTS 
[CHARTER SCHOOLS]. (a)  Sanctions authorized under this chapter
for a school district or campus apply in the same manner to a public
charter district [an open-enrollment charter school].
       (b)  The commissioner shall adopt rules to implement
procedures to impose any sanction provision under this chapter as
those provisions relate to public charter districts
[open-enrollment charter schools].
       (c)  In adopting rules under this section, the commissioner
shall require that the charter of a public charter district [an
open-enrollment charter school]:
             (1)  be automatically revoked if the district [charter
school] is ordered closed under this chapter; and
             (2)  be automatically modified to remove authorization
for an individual campus if the campus is ordered closed under this
chapter.
       (d)  If sanctions are imposed on a public charter district
[an open-enrollment charter school] under the procedures provided
by this chapter, the district [a charter school] is not entitled to
an additional hearing relating to the modification, placement on
probation, revocation, or denial of renewal of a charter as
provided by Chapter 11A [Subchapter D, Chapter 12].
       SECTION 45.  Section 39.182(a), Education Code, 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 46.  Sections 39.301(a), (c), and (e), Education
Code, are amended to read as follows:
       (a)  The commissioner by rule shall provide a process for a
school district or public charter district [open-enrollment
charter school] to challenge an agency decision made under this
chapter relating to an academic or financial accountability rating
that affects the district [or school].
       (c)  The commissioner may limit a challenge under this
section to a written submission of any issue identified by the
school district or public charter district [open-enrollment
charter school] challenging the agency decision.
       (e)  A school district or public charter district
[open-enrollment charter school] may not challenge an agency
decision relating to an academic or financial accountability rating
under this chapter in another proceeding if the district [or
school] has had an opportunity to challenge the decision under this
section.
       SECTION 47.  Section 39.302(a), Education Code, is amended
to read as follows:
       (a)  A school district or public charter district
[open-enrollment charter school] that intends to challenge a
decision by the commissioner under this chapter to close the
district or a district campus [or the charter school] or to pursue
alternative management of a district campus [or the charter school]
must appeal the decision under the procedures provided for a
contested case under Chapter 2001, Government Code.
       SECTION 48.  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 49.  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 50.  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 51.  Sections 53.351(a), (c), (d), (f), and (g),
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 52.  Section 411.097(c), 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 53.  Sections 2175.128(a) and (b), 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 54.  Section 2306.630(a), 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 55.  Section 1575.002(6), 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 56.  Section 1579.002(3), 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 57.  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 58.  Section 140.006(c), 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 59.  Section 375.303(2), 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 60.  Sections 375.308(b) and (c), 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 61.  Section 541.201(15), 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 62.  Section 57.042(9), 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 63.  Section 4(2), 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 64.  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 65.  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 August 1, 2008.
       SECTION 66.  (a)  The changes in law made by Sections 1,
4-63, and 65 of this Act apply beginning August 1, 2008.
       (b)  The changes in law made by Sections 2, 3, and 64 of this
Act apply beginning on the effective date of this Act.
       SECTION 67.  This Act takes effect immediately if it
receives a vote of two-thirds of all the members elected to each
house, as provided by Section 39, Article III, Texas Constitution.  
If this Act does not receive the vote necessary for immediate
effect, this Act takes effect September 1, 2007.