81R6460 CAS-D

By: Eissler H.B. No. 2541

A BILL TO BE ENTITLED

AN ACT

relating to the funding and operation of open-enrollment charter schools.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 12.106, Education Code, is amended by adding Subsections (d) and (e) to read as follows:

(d) A charter holder is entitled to receive funding under this section for the open-enrollment charter school only if the charter holder:

(1) provides information for the Public Education Information Management System (PEIMS) as required by this chapter or by commissioner rule;

(2) submits to the commissioner appropriate fiscal and financial records as required by this chapter or by commissioner rule; and

(3) receives an unqualified opinion in the most recent independent auditor's report of the school's finances.

(e) The commissioner shall suspend the funding of a charter holder that fails to comply with a rule adopted under Subsection (c) until the commissioner determines that the charter holder:

(1) is in compliance or has cured any noncompliance; and

(2) has adopted adequate procedures to prevent future noncompliance.

SECTION 2. Section 12.116, Education Code, is amended by adding Subsection (a-1) and amending Subsection (b) to read as follows:

(a-1) The commissioner shall revoke the charter of an open-enrollment charter school in accordance with the procedure adopted under Subsection (a) if the school is insolvent as a result of recovery of over-allocated state funds under Section 42.258(a).

(b) The commissioner shall revoke the charter of an open-enrollment charter school without a hearing if each campus operated under the school's charter has been ordered closed under Section 39.131(a)(10) or under Section 39.1324(d), (e), or (f). [The procedure adopted under Subsection (a) must provide an opportunity for a hearing to the charter holder and to parents and guardians of students in the school. A hearing under this subsection must be held at the facility at which the program is operated.]

SECTION 3. Section 39.1324(f), Education Code, is amended to read as follows:

(f) If a campus, other than an open-enrollment charter school campus, is considered academically unacceptable for two consecutive school years after the campus is reconstituted under Subsection (a), the commissioner shall order closure of the campus or pursue alternative management under Section 39.1327. If a campus of an open-enrollment charter school is considered academically unacceptable for two consecutive school years after the campus is reconstituted under Subsection (a), the commissioner shall order closure of the campus.

SECTION 4. Sections 39.202 and 39.203, Education Code, are amended to read as follows:

Sec. 39.202. DEVELOPMENT AND IMPLEMENTATION. (a) The commissioner shall, in consultation with the comptroller, develop and implement a financial accountability rating system for school districts and open-enrollment charter schools in this state that:

(1) distinguishes among school districts and open-enrollment charter schools based on levels of financial performance; and

(2) includes procedures to:

(A) provide additional transparency to public education finance; and

(B) enable the commissioner and school district and open-enrollment charter school administrators to provide meaningful financial oversight and improvement.

(b) The system must include uniform indicators adopted by the commissioner by which to measure a district's or open-enrollment charter school's financial management performance.

Sec. 39.203. REPORTING. (a) The commissioner shall develop, as part of the system, a reporting procedure under which:

(1) each school district and open-enrollment charter school is required to prepare and distribute an annual financial management report; and

(2) the public is provided an opportunity to comment on the report at a hearing.

(b) The annual financial management report must include:

(1) a description of the district's or school's financial management performance based on a comparison, provided by the agency, of the district's or school's performance on the indicators adopted under Section 39.202(b) to:

(A) state-established standards; and

(B) the district's or school's previous performance on the indicators; and

(2) any descriptive information required by the commissioner.

(c) The report may include:

(1) information concerning, if applicable, the district's or school's:

(A) financial allocations;

(B) tax collections;

(C) financial strength;

(D) operating cost management;

(E) personnel management;

(F) debt management;

(G) facility acquisition and construction management;

(H) cash management;

(I) budgetary planning;

(J) overall business management;

(K) compliance with rules; and

(L) data quality; and

(2) any other information the board of trustees determines to be necessary or useful.

(d) The board of trustees of each school district and the governing body of each open-enrollment charter school shall hold a public hearing on the report. The board shall give notice of the hearing to, as applicable, owners of real property in the district and to parents of district students or to owners of real property in the district in which the open-enrollment charter school is located and to the parents of school students. In addition to other notice required by law, notice of the hearing must be provided:

(1) to a newspaper of general circulation in the district; and

(2) through electronic mail to media serving the district.

(e) After the hearing, the report shall be disseminated in the district or in the district in which the open-enrollment charter school is located in the manner prescribed by the commissioner.

SECTION 5. Subchapter A, Chapter 46, Education Code, is amended by adding Sections 46.014 and 46.015 to read as follows:

Sec. 46.014. INSTRUCTIONAL FACILITIES ALLOTMENT FOR OPEN-ENROLLMENT CHARTER SCHOOLS. (a) In this section, "charter holder" has the meaning assigned by Section 12.1012.

(b) In accordance with this section, a charter holder is initially eligible for an instructional facilities allotment under this section for a school year for a campus of an open-enrollment charter school for which the charter holder has been granted a charter if:

(1) the campus has for the two preceding school years been rated as recognized or exemplary under Subchapter D, Chapter 39; and

(2) the charter holder has satisfied generally accepted accounting standards of fiscal management as evidenced by an unqualified opinion in the most recent independent auditor's report of the financial records of the charter holder.

(c) After an open-enrollment charter school campus has satisfied the eligibility requirement under Subsection (b)(1) and receives an allotment under this section, the campus remains eligible for an allotment unless the campus receives an accountability rating of academically acceptable or below under Subchapter D, Chapter 39, for three consecutive school years. To regain eligibility, the campus must satisfy the requirement under Subsection (b)(1).

(d) The commissioner annually shall review the eligibility of an open-enrollment charter school campus for purposes of this section.

(e) The amount of an allotment under this section is an amount established 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 school year at the open-enrollment charter school campus.

(f) A charter holder who receives funds under this section may use the funds only for an open-enrollment charter school campus for which the funds were paid under Subsection (e) and only to:

(1) purchase real property on which to construct an instructional facility for the campus;

(2) purchase, lease, construct, expand, or renovate instructional facilities for the campus;

(3) pay debt service in connection with instructional facilities purchased or improved for the campus; or

(4) maintain and operate instructional facilities for the campus.

(g) A decision of the commissioner under this section 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.

(i) Sections 12.107 and 12.1161 apply to funds allotted under this section as though the funds were received under Subchapter D, Chapter 12. Section 12.128 applies to property purchased with funds allotted under this section as though the property were purchased with funds received under Subchapter D, Chapter 12.

Sec. 46.015. ADDITIONAL ASSISTANCE FOR OPEN-ENROLLMENT CHARTER SCHOOL FACILITIES. (a) In this section, "charter holder" has the meaning assigned by Section 12.1012.

(b) This section applies only to a charter holder that is not eligible for an allotment under Section 46.014. A charter holder is eligible for an instructional facilities allotment under this section for a school year for a campus of an open-enrollment charter school for which the charter holder has been granted a charter if, as determined by the commissioner, the campus:

(1) has a current academic accountability rating of acceptable, recognized, or exemplary under Subchapter D, Chapter 39;

(2) does not have an accreditation rating of accredited-warned or accredited-probation;

(3) meets two or more additional academic requirements determined by the commissioner from among the standards specified by Section 39.0721(c);

(4) demonstrates the ability to finance a substantial portion of the cost of the instructional facility and the inability to fully pay the costs of the instructional facility, as determined by the commissioner under commissioner rule; and

(5) satisfies any other requirement required under commissioner rule.

(c) The commissioner shall use at least 10 percent of the total amount of funds available for purposes of allotments under Section 46.014 for allotments under this section. The amount of an allotment under this section is an amount established by the commissioner, based on the amount of funds available for the purpose, for each student in average daily attendance during the preceding school year at the open-enrollment charter school campus.

(d) Sections 46.014(f) and (h) apply to the use of funds a charter holder receives under this section as if the funds were received under Section 46.014.

(e) A decision of the commissioner under this section is final and may not be appealed.

(f) Sections 12.107 and 12.1161 apply to funds allotted under this section as though the funds were received under Subchapter D, Chapter 12. Section 12.128 applies to property purchased with funds allotted under this section as though the property were purchased with funds received under Subchapter D, Chapter 12.

SECTION 6. Sections 12.115(b) and 46.012, Education Code, are repealed.

SECTION 7. This Act applies beginning with the 2009-2010 school year.

SECTION 8. 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, 2009.