By: Shapiro S.B. No. 3

(In the Senate - Filed March 5, 2009; March 9, 2009, read first time and referred to Committee on Education; April 24, 2009, reported adversely, with favorable Committee Substitute by the following vote: Yeas 8, Nays 0; April 24, 2009, sent to printer.)

COMMITTEE SUBSTITUTE FOR S.B. No. 3 By: Shapiro

A BILL TO BE ENTITLED

AN ACT

relating to public school accountability, curriculum, and promotion requirements.

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

SECTION 1. Subsections (e) and (f), Section 7.056, Education Code, are amended to read as follows:

(e) Except as provided by Subsection (f), a school campus or district may not receive an exemption or waiver under this section from:

(1) a prohibition on conduct that constitutes a criminal offense;

(2) a requirement imposed by federal law or rule, including a requirement for special education or bilingual education programs; or

(3) a requirement, restriction, or prohibition relating to:

(A) essential knowledge or skills under Section 28.002 or high school [minimum] graduation requirements under Section 28.025;

(B) public school accountability as provided by Subchapters B, C, D, E, and J [G], Chapter 39;

(C) extracurricular activities under Section 33.081 or participation in a University Interscholastic League area, regional, or state competition under Section 33.0812;

(D) health and safety under Chapter 38;

(E) purchasing under Subchapter B, Chapter 44;

(F) elementary school class size limits, except as provided by Section 25.112;

(G) removal of a disruptive student from the classroom under Subchapter A, Chapter 37;

(H) at-risk programs under Subchapter C, Chapter 29;

(I) prekindergarten programs under Subchapter E, Chapter 29;

(J) educator rights and benefits under Subchapters A, C, D, E, F, G, and I, Chapter 21, or under Subchapter A, Chapter 22;

(K) special education programs under Subchapter A, Chapter 29;

(L) bilingual education programs under Subchapter B, Chapter 29; or

(M) the requirements for the first day of instruction under Section 25.0811.

(f) A school district or campus that is required to develop and implement a student achievement improvement plan under Section 39.101 [39.131] or 39.102 [39.132] may receive an exemption or waiver under this section from any law or rule other than:

(1) a prohibition on conduct that constitutes a criminal offense;

(2) a requirement imposed by federal law or rule;

(3) a requirement, restriction, or prohibition imposed by state law or rule relating to:

(A) public school accountability as provided by Subchapters B, C, D, E, and J [G], Chapter 39; or

(B) educator rights and benefits under Subchapters A, C, D, E, F, G, and I, Chapter 21, or under Subchapter A, Chapter 22; or

(4) textbook selection under Chapter 31.

SECTION 2. Subsection (d), Section 11.203, Education Code, is amended to read as follows:

(d) A principal who was employed as principal at [of] a campus that was rated academically unacceptable during the preceding school year[, as well as any person employed to replace that principal,] shall participate in the program and complete the program requirements not later than a date determined by the commissioner.

SECTION 3. Subsection (b), Section 12.104, Education Code, is amended to read as follows:

(b) An open-enrollment charter school 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) to the extent necessary to monitor compliance with this subchapter as determined by the commissioner;

(B) criminal history records under Subchapter C, Chapter 22;

(C) reading instruments and accelerated reading instruction programs under Section 28.006;

(D) [satisfactory performance on assessment instruments and to] accelerated instruction under Section 28.0211;

(E) high school graduation requirements under Section 28.025;

(F) special education programs under Subchapter A, Chapter 29;

(G) bilingual education under Subchapter B, Chapter 29;

(H) prekindergarten programs under Subchapter E, Chapter 29;

(I) extracurricular activities under Section 33.081;

(J) discipline management practices or behavior management techniques under Section 37.0021;

(K) health and safety under Chapter 38;

(L) public school accountability under Subchapters B, C, D, E, and J [G], Chapter 39;

(M) the requirement under Section 21.006 to report an educator's misconduct; and

(N) intensive programs of instruction under Section 28.0213.

SECTION 4. Section 28.002, Education Code, is amended by adding Subsections (c-1) and (c-2) to read as follows:

(c-1) The State Board of Education may adopt rules to allow courses offered in the foundation curriculum or the enrichment curriculum to simultaneously satisfy, to the extent practicable, more than one required credit for the minimum, recommended, or advanced high school program in which the student is participating.

(c-2) The State Board of Education shall adopt rules to authorize each school district to implement a program under which students in middle or junior high school may earn credits toward high school graduation in middle or junior high school for any course determined by board rule to qualify as a high school equivalent course.

SECTION 5. The heading to Section 28.0211, Education Code, is amended to read as follows:

Sec. 28.0211. STUDENT ADVANCEMENT DETERMINATION; [SATISFACTORY] PERFORMANCE ON ASSESSMENT INSTRUMENTS [REQUIRED]; ACCELERATED INSTRUCTION.

SECTION 6. Section 28.0211, Education Code, is amended by amending Subsections (a), (b), (c), (d), (e), (f), (g), and (i) and adding Subsections (c-1), (d-1), (d-2), and (d-3) to read as follows:

(a) Not later than the first day of the school year, a school district shall determine the requirements for student advancement from one grade level to the next. In determining whether a student may be promoted to the next grade level, the district shall consider:

(1) the recommendation of the student's teacher;

(2) the student's grade in each subject or course;

(3) the student's score on an assessment instrument administered under Section 39.023(a), (b), or (l); and

(4) any other necessary information, as determined by the district [Except as provided by Subsection (b) or (e), a student may not be promoted to:

[(1) the fourth grade program to which the student would otherwise be assigned if the student does not perform satisfactorily on the third grade reading assessment instrument under Section 39.023;

[(2) the sixth grade program to which the student would otherwise be assigned if the student does not perform satisfactorily on the fifth grade mathematics and reading assessment instruments under Section 39.023; or

[(3) the ninth grade program to which the student would otherwise be assigned if the student does not perform satisfactorily on the eighth grade mathematics and reading assessment instruments under Section 39.023].

(b) A school district shall provide to a student who initially fails to perform satisfactorily on the third grade reading assessment instrument, the fifth grade mathematics and reading assessment instruments, or the eighth grade mathematics and reading assessment instruments under Section 39.023 an [assessment instrument specified under Subsection (a) at least two] additional opportunity [opportunities] to take the assessment instrument. [A school district may administer an alternate assessment instrument to a student who has failed an assessment instrument specified under Subsection (a) on the previous two opportunities. Notwithstanding any other provision of this section, a student may be promoted if the student performs at grade level on an alternate assessment instrument under this subsection that is appropriate for the student's grade level and approved by the commissioner.]

(c) If [Each time] a student fails to perform satisfactorily on a mathematics or reading [an] assessment instrument administered [specified] under Section 39.023(a), (b), or (l) in the third, fifth, or eighth grade [Subsection (a)], the school district in which the student attends school shall provide to the student accelerated instruction in the applicable subject area. If a student in a third, fifth, or eighth grade program fails to meet the requirements for student advancement from one grade level to the next as determined by a school district under Subsection (a), the district shall establish[, including reading instruction for a student who fails to perform satisfactorily on a reading assessment instrument. After a student fails to perform satisfactorily on an assessment instrument a second time,] a grade placement committee [shall be established] to prescribe the accelerated instruction the district shall provide to the student. If a student in a program other than a third, fifth, or eighth grade program fails to meet the requirements for student advancement from one grade level to the next as determined by a school district under Subsection (a), the district may establish a grade placement committee to prescribe the accelerated instruction the district shall provide to the student [before the student is administered the assessment instrument the third time]. The grade placement committee shall be composed of the principal or the principal's designee, the student's parent or guardian, and the teacher of the subject of an assessment instrument on which the student failed to perform satisfactorily. The district shall notify the parent or guardian of the time and place for convening the grade placement committee and the purpose of the committee. The accelerated instruction program provided under this subsection must be systematic and may not be based solely on assessment instrument practice skills and:

(1) for a student in a third, fifth, or eighth grade program:

(A) must provide for instruction in the applicable subject area;

(B) must be approved by the student's parent or guardian and the district; and

(C) [An accelerated instruction group administered by a school district under this section] may not have a ratio of more than 10 students for each teacher in an accelerated instruction group; or

(2) for a student in a program other than a third, fifth, or eighth grade program, be made available to the student in the next grade level.

(c-1) A school district shall implement an accelerated instruction program under Subsection (c) not later than the 30th day after the first day of school of the next school year. Accelerated instruction may occur outside of regular school hours, including during summer school.

(d) In addition to providing accelerated instruction to a student under Subsection (c), the school district shall notify the student's parent or guardian of:

(1) the information collected under Subsection (a), including if applicable, the student's failure to perform satisfactorily on the assessment instrument;

(2) the accelerated instruction program to which the student is assigned; [and]

(3) the possibility that the student might be retained at the same grade level for the next school year;

(4) the areas requiring improvement for the student to meet the requirements for advancement from one grade level to the next as determined by the district under Subsection (a); and

(5) any other applicable information as determined by the district.

(d-1) A school district shall make information provided to a parent or guardian under Subsections (d)(1), (4), and (5) available to the student's current teacher and the student's teacher in the next grade level.

(d-2) The grade placement committee shall make a determination that the student who failed to meet the requirements for student advancement from one grade level to the next determined by a school district under Subsection (a) be:

(1) retained at the same grade level for the next school year; or

(2) placed in the next grade level with accelerated instruction as provided under Subsection (c).

(d-3) A student who fails to participate in an accelerated instruction program developed under Subsection (c)(1) may not be promoted to the next grade level program to which the student would otherwise be assigned if the student does not perform satisfactorily on the applicable assessment instrument specified under Subsection (b).

(e) A [student who, after at least three attempts, fails to perform satisfactorily on an assessment instrument specified under Subsection (a) shall be retained at the same grade level for the next school year in accordance with Subsection (a). The] student's parent or guardian may [appeal the student's retention by submitting a] request that [to] the grade placement committee reconsider the committee's decision under Subsection (d-2) to retain the student [established under Subsection (c)]. The school district shall give the parent or guardian written notice of the opportunity to request reconsideration [appeal. The grade placement committee may decide in favor of a student's promotion only if the committee concludes, using standards adopted by the board of trustees, that if promoted and given accelerated instruction, the student is likely to perform at grade level]. A student may not be promoted on the basis of the grade placement committee's decision under this subsection unless that decision is unanimous. The commissioner by rule shall establish a time line for making the placement determination. This subsection does not create a property interest in promotion. The decision of the grade placement committee under this subsection is final and may not be appealed.

(f) An accelerated instruction program under Subsection (c) [A school district shall provide to a student who, after three attempts, has failed to perform satisfactorily on an assessment instrument specified under Subsection (a) accelerated instruction during the next school year as prescribed by an educational plan developed for the student by the student's grade placement committee established under Subsection (c). The district shall provide that accelerated instruction regardless of whether the student has been promoted or retained. The educational plan] must be designed to enable the student to perform at the appropriate grade level by the conclusion of the school year. During the school year, the student shall be monitored to ensure that the student is progressing in accordance with the program [plan]. The district shall administer to the student the assessment instrument for the grade level in which the student is placed at the time the district regularly administers the assessment instruments for that school year.

(g) This section does not preclude the retention at a grade level, in accordance with state law or school district policy, of a student who performs satisfactorily on an assessment instrument administered [specified] under Section 39.023 [Subsection (a)].

(i) The admission, review, and dismissal committee of a student who participates in a district's special education program under Subchapter B, Chapter 29, and who does not perform satisfactorily on a mathematics or reading [an] assessment instrument [specified under Subsection (a) and] administered under Section 39.023(a) or (b) shall determine:

(1) the manner in which the student will participate in an accelerated instruction program under this section; and

(2) whether the student will be promoted or retained under this section.

SECTION 7. Section 28.025, Education Code, is amended by amending Subsections (a), (b), and (b-1) and adding Subsections (b-3), (b-4), and (b-5) to read as follows:

(a) The State Board of Education by rule shall determine curriculum requirements for the minimum, recommended, and advanced high school programs that are consistent with the required curriculum under Section 28.002. Subject to Subsection (b-1), the State Board of Education shall designate the specific courses in the foundation curriculum required for a student participating in the minimum, recommended, or advanced high school program. Except as provided by Subsection (b-1), the State Board of Education may not designate a specific course or a specific number of credits required for a subject in the enrichment curriculum. This subsection does not prohibit the State Board of Education from designating the total number of credits required under the enrichment curriculum for a student participating in the minimum, recommended, or advanced high school program.

(b) A school district shall ensure that each student enrolls in the courses necessary to complete the curriculum requirements identified by the State Board of Education under Subsection (a) for the recommended or advanced high school program unless the student, the student's parent or other person standing in parental relation to the student, and a school counselor or school administrator agree that the student should be permitted to take courses under the minimum high school program and the student:

(1) is at least 16 years of age;

(2) has completed two credits required for graduation in each subject of the foundation curriculum under Section 28.002(a)(1); or

(3) has failed to be promoted to the tenth grade one or more times as determined by the school district.

(b-1) The State Board of Education by rule shall require that:

(1) except as provided by Subsection (b-2), the curriculum requirements for the recommended and advanced high school programs under Subsection (a) include a requirement that students successfully complete:

(A) four credits [courses] in each subject of the foundation curriculum under Section 28.002(a)(1);

(B) for the recommended high school program, two credits in the same language in a language other than English under Section 28.002(a)(2)(A) and, for the advanced high school program, three credits in the same language in a language other than English under Section 28.002(a)(2)(A); and

(C) eight elective credits; and

(2) one or more credits [courses] offered in the required curriculum for the recommended and advanced high school programs include a research writing component.

(b-3) In adopting rules to provide students with the option described by Subsection (b-1)(1), the State Board of Education must approve a variety of mathematics and science courses that may be taken by a student after completion of Algebra II and physics to comply with the recommended program requirements. A course approved under this subsection must contain substantively similar and rigorous academic content as a course approved under Subsection (b-2).

(b-4) Before a student's parent or other person standing in parental relation to the student may agree that the student be permitted to take courses under the minimum high school program as provided by Subsection (b), a school district must provide written notice to the parent or person standing in parental relation explaining the benefits of the recommended high school program. The notice shall be developed by the agency and must:

(1) be printed in English and Spanish; and

(2) require that the student's parent or person standing in parental relation to the student sign a confirmation of receipt and return the confirmation to the student's campus.

(b-5) Notwithstanding Section 5.09, Chapter 5 (H.B. 1), 79th Legislature, 3rd Called Session, 2006, the curriculum requirements for the recommended and advanced high school programs under Subsection (b-1) apply to students entering the ninth grade beginning with the 2011-2012 school year. This subsection expires September 1, 2015.

SECTION 8. Subsection (b), Section 28.0252, Education Code, is amended to read as follows:

(b) If the commissioner develops a standard method under this section, a school district shall use the standard method to compute a student's high school grade point average[, except that to the extent of a conflict between that method and the method adopted under Section 51.807, the student's grade point average computed in accordance with the method established under Section 51.807 shall be used in determining the student's eligibility for university admission under Subchapter U, Chapter 51].

SECTION 9. Subsection (c), Section 29.094, Education Code, is amended to read as follows:

(c) A campus may apply to the commissioner to participate in the pilot program. The commissioner may select for participation in the pilot program only campuses that have failed to improve student performance in reading according to standards established by the commissioner. The standards established by the commissioner for purposes of this subsection must be based on reading performance standards considered [required] for student promotion under Section 28.0211.

SECTION 10. Subsection (d), Section 29.904, Education Code, is amended to read as follows:

(d) A plan developed under this section:

(1) must establish clear, achievable goals for increasing the percentage of the school district's graduating seniors, particularly the graduating seniors attending a high school described by Subsection (a), who enroll in an institution of higher education for the academic year following graduation;

(2) must establish an accurate method of measuring progress toward the goals established under Subdivision (1) that may include the percentage of district high school students and the percentage of students attending a district high school described by Subsection (a) who:

(A) are enrolled in a course for which a student may earn college credit, such as an advanced placement or international baccalaureate course or a course offered through concurrent enrollment in high school and at an institution of higher education;

(B) are enrolled in courses that meet the curriculum requirements for the recommended or advanced high school program as determined under Section 28.025;

(C) have submitted a free application for federal student aid (FAFSA);

(D) are exempt under Section 51.3062(p) or (q) [51.306(l) or (m)] from administration of an assessment [a test] instrument under Section 51.3062 [51.306] or have performed successfully on an assessment [a test] instrument under Section 51.3062 [51.306];

(E) graduate from high school;

(F) graduate from an institution of higher education; and

(G) have taken college entrance examinations and the average score of those students on the examinations;

(3) must cover a period of at least five years; and

(4) may be directed at district students at any level of primary or secondary education.

SECTION 11. Subsection (b), Section 32.252, Education Code, is amended to read as follows:

(b) The portal must serve as a single point of access to educational resources other than student assessment data accessible through the student assessment data portal under Section 32.258. In addition to any other purpose specified by this subchapter or any other educational purpose, the portal may be used to:

(1) alleviate inequities in access to educational resources by providing access to on-line courses;

(2) improve student academic performance by providing access to tutorial materials, instructional materials that have been shown to improve academic performance, and other interactive materials, including materials that assess an individual student's knowledge and prepare the student for the administration of a standardized assessment instrument, including an assessment instrument administered under Section 39.023;

(3) provide school districts with access to administrative software and other electronic tools designed to promote administrative efficiency and intra-district communication; or

(4) [provide secure access to student assessment data; or

[(5)] provide links to appropriate educational resources and experts available through the Internet.

SECTION 12. Section 32.258, Education Code, is amended to read as follows:

Sec. 32.258. STUDENT ASSESSMENT DATA; DATA PORTAL. (a) The agency shall establish and maintain a student assessment data portal for use by school districts, teachers, parents, students, and public institutions of higher education. The agency shall [may] establish a secure, interoperable system to be implemented through the portal under which:

(1) a student or the student's parent or other person standing in parental relationship can easily access the student's individual assessment data;

(2) an authorized employee of a school district, including a district teacher, [districts] can readily access individual [student] assessment data of district students for use in developing strategies for improving student performance; and

(3) an authorized employee of a public institution of higher education can readily access individual assessment data of students applying for admission for use in developing strategies for improving student performance.

(b) The system established under Subsection (a) shall provide a means for a student or the student's parent or other person standing in parental relationship to track the student's progress on assessment instrument requirements for graduation.

(c) The agency shall establish an interoperable system to be implemented through the portal under which general student assessment data is easily accessible to the public.

(d) Student assessment data provided under this section must:

(1) be available on or before the first instructional day of the school year following the year in which the data is collected; and

(2) include student performance data on assessment instruments over multiple years, beginning with the 2007-2008 school year, including any data indicating progress in student achievement.

(e) Each [(b) In establishing the] system established under [required by] this section must permit comparisons of[, the agency shall seek to further the goal of providing school districts with access to] student performance information at the classroom, campus, district, and state levels [level].

SECTION 13. Section 39.023, Education Code, is amended by adding Subsection (a-1) and amending Subsections (c-4) and (e) to read as follows:

(a-1) The agency shall develop assessment instruments required under Subsection (a) in a manner that allows, to the extent practicable:

(1) the score a student receives to provide reliable information relating to a student's satisfactory performance for each performance standard under Section 39.0241; and

(2) an appropriate range of performances to serve as a valid indication of growth in student achievement.

(c-4) To the extent practicable and subject to Section 39.024, the agency shall ensure that each end-of-course assessment instrument adopted under Subsection (c) is:

(1) developed in a manner that measures a student's performance under the college readiness standards established under Section 28.008; and

(2) validated by national postsecondary education experts for college readiness content and performance standards.

(e) Under rules adopted by the State Board of Education, every third year, the agency shall release the questions and answer keys to each assessment instrument administered under Subsection (a), (b), (c), (d), or (l), excluding any assessment instrument administered to a student for the purpose of retaking the assessment instrument, after the last time the instrument is administered for that school year. To ensure a valid bank of questions for use each year, the agency is not required to release a question that is being field-tested and was not used to compute the student's score on the instrument. The agency shall also release, under board rule, each question that is no longer being field-tested and that was not used to compute a student's score.

SECTION 14. Subsection (d), Section 39.0233, Education Code, is amended to read as follows:

(d) The questions adopted under this section may not [must] be administered in a separate section of the end-of-course assessment instrument [in which the questions are included].

SECTION 15. Subchapter B, Chapter 39, Education Code, is amended by amending Section 39.024 and adding Sections 39.0241 and 39.0242 to read as follows:

Sec. 39.024. MEASURE OF COLLEGE READINESS. (a) In this section, "college readiness" means the level of preparation a student must attain in English language arts and mathematics courses to enroll and succeed, without remediation, in an entry-level general education course for credit in that same content area at:

(1) a postsecondary educational institution that primarily offers baccalaureate degrees and primarily serves a limited geographic region; or

(2) a postsecondary educational institution that primarily offers associate degrees or certificates or credentials other than baccalaureate or advanced degrees.

(b) The agency shall ensure that the Algebra II and English III end-of-course assessment instruments required under Section 39.023(c) are developed to be capable of, beginning with the 2011-2012 school year, measuring college readiness.

(c) Before the beginning of the 2011-2012 school year, the agency shall gather data and conduct research studies to substantiate the correlation between a certain level of performance by students on the Algebra II and English III end-of-course assessment instruments and college readiness.

(d) Studies under Subsection (c) must include an evaluation of any need for remediation courses to facilitate college readiness.

(e) Based on the results of the studies conducted under Subsection (c), the commissioner of education, in conjunction with the commissioner of higher education, shall establish student performance standards for the Algebra II and English III end-of-course assessment instruments indicating that students have attained college readiness.

(f) To the extent practicable, the agency, in conjunction with the Texas Higher Education Coordinating Board, shall conduct research studies similar to the studies conducted under Subsection (c) for the appropriate science and social studies end-of-course assessment instruments. If the commissioner of education, in conjunction with the commissioner of higher education, determines that the research studies conducted under this subsection substantiate a correlation between a certain level of performance by students on science and social studies end-of-course assessment instruments and college readiness, the commissioner of education, in conjunction with the commissioner of higher education, as soon as practicable, may establish student performance standards for the science and social studies end-of-course assessment instruments indicating that students have attained college readiness.

(f-1) Not later than December 1, 2012, the agency shall deliver to the lieutenant governor, the speaker of the house of representatives, and the clerks of the standing committees of the senate and the house of representatives with primary jurisdiction over public education a report that includes:

(1) an analysis of the feasibility of establishing college readiness performance standards for science and social studies end-of-course assessment instruments; and

(2) a summary of any implementation procedures adopted for each standard.

(f-2) Subsection (f-1) and this subsection expire January 1, 2013.

(g) The agency shall continue to gather data to perform studies as provided under Subsections (c) and (f) at least once every three years.

(h) The agency and the Texas Higher Education Coordinating Board jointly shall periodically review the college readiness performance standards established under this section and compare the performance standards to performance standards established nationally and internationally for comparable assessment instruments. Following each review, the agency and the Texas Higher Education Coordinating Board shall deliver to the lieutenant governor, the speaker of the house of representatives, and the clerks of the standing committees of the senate and the house of representatives with primary jurisdiction over public education and higher education a joint report on the results of the review indicating whether the college readiness performance standards established under this section are sufficiently rigorous to prepare students in this state to compete academically with students nationally and internationally. If the agency and the Texas Higher Education Coordinating Board determine that the college readiness performance standards established under this section are not sufficiently rigorous, the agency and board jointly shall recommend changes to the college readiness performance standards.

(i) The agency shall gather data and conduct research to substantiate any correlation between a certain level of performance by students on end-of-course assessment instruments and success in:

(1) military service; or

(2) a workforce training, certification, or other credential program at a postsecondary educational institution that primarily offers associate degrees or certificates or credentials other than baccalaureate or advanced degrees.

Sec. 39.0241. [SATISFACTORY] PERFORMANCE STANDARDS. (a) Except as otherwise provided by Subsection (b) [this subsection], the commissioner [State Board of Education] shall determine the level of performance considered to be satisfactory on the assessment instruments.

(a-1) The commissioner of education, in conjunction with the commissioner of higher education, shall determine the level of performance necessary to indicate college readiness, as defined by Section 39.024(a).

(a-2) For the purpose of establishing performance across grade levels, the commissioner shall establish:

(1) the performance standards for the Algebra II and English III end-of-course assessment instruments, as provided under Section 39.024(b) and under Subsection (a);

(2) the performance standards for the Algebra I and English II end-of-course assessment instruments, as determined based on studies under Section 39.0242 that correlate student performance on the Algebra I and English II end-of-course assessment instruments with student performance on the Algebra II and English III assessment instruments;

(3) the performance standards for the English I end-of-course assessment instrument, as determined based on studies under Section 39.0242 that correlate student performance on the English I end-of-course assessment instrument with student performance on the English II assessment instrument;

(4) the performance standards for the grade eight assessment instruments, as determined based on studies under Section 39.0242 that correlate student performance on the grade eight assessment instruments with student performance on the Algebra I and English I end-of-course assessment instruments in the same content area;

(5) the performance standards for the grade seven assessment instruments, as determined based on studies under Section 39.0242 that correlate student performance on the grade seven assessment instruments with student performance on the grade eight assessment instruments in the same content area;

(6) the performance standards for the grade six assessment instruments, as determined based on studies under Section 39.0242 that correlate student performance on the grade six assessment instruments with student performance on the grade seven assessment instruments in the same content area;

(7) the performance standards for the grade five assessment instruments, as determined based on studies under Section 39.0242 that correlate student performance on the grade five assessment instruments with student performance on the grade six assessment instruments in the same content area;

(8) the performance standards for the grade four assessment instruments, as determined based on studies under Section 39.0242 that correlate student performance on the grade four assessment instruments with student performance on the grade five assessment instruments in the same content area; and

(9) the performance standards for the grade three assessment instruments, as determined based on studies under Section 39.0242 that correlate student performance on the grade three assessment instruments with student performance on the grade four assessment instruments in the same content area.

(b) The admission, review, and dismissal committee of a student being assessed under Section 39.023(b) shall determine the level of performance considered to be satisfactory on the assessment instruments administered to that student in accordance with criteria established by agency rule.

(c) The agency shall develop study guides for the assessment instruments administered under Sections 39.023(a) and (c). To assist parents in providing assistance during the period that school is recessed for summer, each school district shall make available [distribute] the study guides to parents of students who do not perform satisfactorily on one or more parts of an assessment instrument administered under this subchapter.

(d) The agency shall develop and make available teacher training materials and other teacher training resources to assist teachers in enabling students of limited English proficiency to meet state performance expectations. The teacher training resources shall be designed to support intensive, individualized, and accelerated instructional programs developed by school districts for students of limited English proficiency.

(e) The commissioner shall retain a portion of the total amount of funds allotted under Section 42.152(a) that the commissioner considers appropriate to finance activities under Subsection [Subsections] (c) and may retain a portion for activities under Subsection (d) and for intensive programs of instruction for students of limited English proficiency offered by school districts and shall reduce each district's allotment proportionately.

Sec. 39.0242. PERFORMANCE STANDARDS: RESEARCH STUDIES AND IMPLEMENTATION OF STANDARDS. (a) During the 2010-2011 school year, the agency shall collect data through:

(1) the annual administration of assessment instruments required under Section 39.023(a) in grades three through eight; and

(2) the administration to appropriate students throughout the state of an end-of-course assessment instrument field test.

(b) Before the beginning of the 2011-2012 school year, the agency shall analyze the data collected under Subsection (a) to substantiate:

(1) the correlation between satisfactory student performance for each performance standard under Section 39.0241 on the grade three, four, five, six, or seven assessment instruments with satisfactory performance under the same performance standard on the assessment instruments in the same content area for the next grade level;

(2) the correlation between satisfactory student performance for each performance standard under Section 39.0241 on the grade eight assessment instruments with satisfactory performance under the same performance standard on the Algebra I and English I end-of-course assessment instruments in the same content area;

(3) the correlation between satisfactory student performance for each performance standard under Section 39.0241 on the English I end-of-course assessment instrument with satisfactory performance under the same performance standard on the English II end-of-course assessment instrument;

(4) the correlation between satisfactory student performance for each performance standard under Section 39.0241 on the English II end-of-course assessment instrument with satisfactory performance under the same performance standard on the English III end-of-course assessment instrument; and

(5) the correlation between satisfactory student performance for each performance standard under Section 39.0241 on the Algebra I end-of-course assessment instrument with satisfactory performance under the same performance standard on the Algebra II end-of-course assessment instrument.

(c) Studies under this section must include an evaluation of any need for remediation courses to facilitate college readiness.

(d) The agency shall continue to gather data and perform studies as provided under this section at least once every three years. If the data do not support the correlation between student performance standards and college readiness, the commissioner of education, in collaboration with the commissioner of higher education, shall revise the standard of performance considered to be satisfactory.

(e) Based on the data collected and studies performed periodically under Subsection (d), the commissioner shall increase the rigor of the performance standard established under Section 39.0241(a) as the commissioner determines necessary.

SECTION 16. Section 39.025, Education Code, is amended by amending Subsections (a), (a-1), (b), (b-1), (b-2), and (f) and adding Subsections (a-2) and (c-1) to read as follows:

(a) The commissioner shall adopt rules requiring a student participating in the recommended or advanced high school program to be administered each end-of-course assessment instrument listed in Section 39.023(c) and requiring a student participating in the minimum high school program to be administered an end-of-course assessment instrument listed in Section 39.023(c) only for Algebra I and English III and any other [a] course in which the student is enrolled and for which an end-of-course assessment instrument is administered. Except as otherwise provided by this section, a [A] student is required to perform satisfactorily under either performance standard under Section 39.0241 on two of the three end-of-course assessment instruments [achieve,] in each subject in which the student is required to take end-of-course assessment instruments [in the foundation curriculum under Section 28.002(a)(1), a cumulative score that is at least equal to the product of the number of end-of-course assessment instruments administered to the student in that subject and 70, with each end-of-course assessment instrument scored on a scale of 100. A student must achieve a score of at least 60 on an end-of-course assessment instrument for the score to count towards the student's cumulative score]. Except as provided under Subsection (a-2), a student participating in the minimum high school program must perform satisfactorily on the Algebra I and English III end-of-course assessment instruments and a student participating in the recommended or advanced high school program must perform satisfactorily on the Algebra II and English III end-of-course assessment instruments. A student who performs satisfactorily on the Algebra II and English III end-of-course assessment instruments under the college readiness performance standard, as determined under Section 39.024, is not required to comply with the requirement to perform satisfactorily on two of three end-of-course assessment instruments in those subjects [For purposes of this subsection, a student's cumulative score is determined using the student's highest score on each end-of-course assessment instrument administered to the student]. A student may not receive a high school diploma until the student has performed satisfactorily on the end-of-course assessment instruments in the manner provided under this subsection. [This subsection does not require a student to demonstrate readiness to enroll in an institution of higher education.]

(a-1) The student's score on an end-of-course assessment instrument constitutes 15 percent of the student's grade in the course for which the assessment instrument is administered.

(a-2) The commissioner by rule shall determine a method by which a student's satisfactory performance on an advanced placement test, international baccalaureate examination, a Scholastic Assessment Test (SAT) Subject Test, or another assessment instrument determined by the commissioner to be at least as rigorous as an end-of-course assessment instrument adopted under Section 39.023(c) may be used as a factor in determining whether the student satisfies the requirements of Subsection (a)[, including the cumulative score requirement of that subsection]. The commissioner by rule may determine a method by which a student's satisfactory performance on a Preliminary Scholastic Assessment Test (PSAT) assessment or a preliminary American College Test (ACT) assessment may be used as a factor in determining whether the student satisfies the requirements of Subsection (a).

(b) Each time an end-of-course assessment instrument is administered, a student who failed to perform satisfactorily [achieve a score of at least 60] on the assessment instrument as determined by the commissioner under Section 39.0241(a) shall retake the assessment instrument. A student who fails to perform satisfactorily on an Algebra II or English III end-of-course assessment instrument under the college readiness performance standard, as determined under Section 39.024(b), may retake the assessment instrument [Any other student may retake an end-of-course assessment instrument for any reason]. A student is not required to retake a course as a condition of retaking an end-of-course assessment instrument.

(b-1) A school district shall provide each student who fails to perform satisfactorily as determined by the commissioner under Section 39.0241(a) [achieve a score of at least 70] on an end-of-course assessment instrument with accelerated instruction in the subject assessed by the assessment instrument.

(b-2) The agency, in collaboration with the Texas Higher Education Coordinating Board, shall develop senior-level English language arts and mathematics accelerated instruction courses for purposes of this section. If [a school district determines that] a student does not demonstrate the performance standard for college readiness as provided by Section 39.024(b) on the Algebra II or English III end-of-course assessment instrument[, on completion of grade 11, is unlikely to achieve the cumulative score requirements for one or more subjects prescribed by Subsection (a) for receiving a high school diploma], the district shall offer [require] the student the opportunity to enroll in a [corresponding content-area college preparatory] course described by this subsection [for which an end-of-course assessment instrument has been adopted, if available]. A student who enrolls in a [college preparatory] course described by this subsection shall be administered an appropriate end-of-course assessment instrument [for the course, with the end-of-course assessment instrument scored on a scale of 40. A student may use the student's score on the end-of-course assessment instrument for the college preparatory course towards satisfying the cumulative score requirements] prescribed by Subsection (a).

(c-1) A school district may not administer an assessment instrument required for graduation administered under this section as this section existed before September 1, 1999. A school district may administer to a student who failed to perform satisfactorily on an assessment instrument described by this subsection an alternate assessment instrument selected from a list of assessment instruments approved by the commissioner. The commissioner shall determine the level of performance considered to be satisfactory on an alternate assessment instrument. The district may not administer to the student an assessment instrument or a part of an assessment instrument that assesses a subject that was not assessed in an assessment instrument required for graduation administered under this section as this section existed before September 1, 1999. The commissioner shall make available to districts information necessary to administer the alternate assessment instrument authorized by this subsection. The determination of the commissioner regarding the list of approved alternate assessment instruments under this subsection and the performance required on the assessment instruments are final and may not be appealed.

(f) The commissioner shall by rule adopt a transition plan to implement the amendments made by Chapter 1312 (S.B. No. 1031), Acts of the 80th Legislature, Regular Session, 2007, replacing general subject assessment instruments administered at the high school level with end-of-course assessment instruments [to this section and Sections 39.023(a) and (c) and 39.051(b)(5)]. The rules must provide for the end-of-course assessment instruments adopted under Section 39.023(c) to be administered beginning with students entering the ninth grade during the 2011-2012 school year. During the period under which the transition to end-of-course assessment instruments is made:

(1) for students entering a grade above the ninth grade during the 2011-2012 school year, the commissioner shall retain, administer, and use for purposes of district accreditation and other campus and district accountability measures [ratings] under this chapter [Subchapter D] the assessment instruments required by Section 39.023(a) or (c), as that section existed before amendment by Chapter 1312 (S.B. No. 1031), Acts of the 80th Legislature, Regular Session, 2007;

(2) a student subject to Subdivision (1) may not receive a high school diploma unless the student has performed satisfactorily on the English language arts, mathematics, science, and social studies assessment instruments administered under Section 39.023(c), as that section existed before amendment by Chapter 1312 (S.B. No. 1031), Acts of the 80th Legislature, Regular Session, 2007; and

(3) [(2)] the agency may defer releasing assessment instrument questions and answer keys as required by Section 39.023(e) to the extent necessary to develop additional assessment instruments.

SECTION 17. Section 39.0261, Education Code, is amended by adding Subsection (a-1) to read as follows:

(a-1) As part of the assessment program under Section 39.022, the commissioner by rule shall develop a plan for implementing college preparation assessment instruments under this section beginning with eighth grade assessment instruments under Subsection (a)(1) in the 2010-2011 school year.

SECTION 18. Section 39.027, Education Code, is amended by amending Subsections (a) and (e) and adding Subsections (a-1) and (a-2) to read as follows:

(a) A student may be administered an accommodated or alternative assessment instrument or may be granted an exemption [exempted] from or a postponement of the administration of an assessment instrument under:

(1) Section 39.023(a) or (b) if the student is eligible for a special education program under Section 29.003 and the student's individualized education program does not include instruction in the essential knowledge and skills under Section 28.002 at any grade level;

(2) Section 39.023(c) or (d) if the student is eligible for a special education program under Section 29.003 and:

(A) the student's individualized education program does not include instruction in the essential knowledge and skills under Section 28.002 at any grade level; or

(B) the assessment instrument, even with allowable modifications, would not provide an appropriate measure of the student's achievement as determined by the student's admission, review, and dismissal committee;

(3) Section 39.023(a), (b), (c), or (l) for a period of up to three years [one year] after initial enrollment in a school in the United States if the student is an immigrant and a student of limited English proficiency, as defined by Section 29.052, who, as a result of inadequate schooling outside of the United States, lacks the necessary foundation in the essential knowledge and skills of the curriculum [and has not demonstrated proficiency in English as determined by the assessment system under Subsection (e)]; or

(4) Section 39.023(a), (b), (c), or (l) for a period of up to five [two] years, if the student is a student of limited English proficiency, as defined by Section 29.052, whose initial enrollment in a school in the United States was as an unschooled asylee or refugee [in addition to the exemption period authorized by Subdivision (3) if the student has received an exemption under Subdivision (3) and:

[(A) is a recent unschooled immigrant; or

[(B) is in a grade for which no assessment instrument in the primary language of the student is available].

(a-1) The language proficiency assessment committee established under Section 29.063 shall determine whether a student meets the criteria under Subsection (a)(3) or (4). The commissioner by rule shall develop procedures under which the language proficiency assessment committee makes a determination under this subsection. In adopting rules under this subsection, the commissioner shall:

(1) consider the end-of-course requirements for graduation for students; and

(2) ensure that the language proficiency assessment committee requires students to be administered assessment instruments under this section at the earliest practical date.

(a-2) For purposes of this section, "unschooled asylee or refugee" means a student who:

(1) initially enrolled in a school in the United States as:

(A) an asylee as defined by 45 C.F.R. Section 400.41; or

(B) a refugee as defined by 8 U.S.C. Section 1101;

(2) has a visa issued by the United States Department of State with a Form I-94 Arrival/Departure record, or a successor document, issued by the United States Citizenship and Immigration Services that is stamped with "Asylee," "Refugee," or "Asylum"; and

(3) has had little or no formal schooling outside of the United States and lacks even rudimentary literacy skills.

(e) The commissioner shall develop an assessment system that shall be used for evaluating the academic progress, including reading proficiency in English, of all students of limited English proficiency, as defined by Section 29.052. A student who is exempt from the administration of an assessment instrument under Subsection (a)(3) or (4) who achieves reading proficiency in English as determined by the assessment system developed under this subsection shall be administered the assessment instruments described by Sections 39.023(a) and (c). The performance under the assessment system developed under this subsection of students to whom Subsection (a)(3) or (4) applies shall be included in the [academic excellence] indicator system under Section 39.301, as applicable [Section 39.051], the performance report under Section 39.306 [39.053], and the comprehensive annual report under Section 39.332 [39.182]. This information shall be provided in a manner that is disaggregated by the bilingual education or special language program, if any, in which the student is enrolled.

SECTION 19. Subsection (b), Section 39.033, Education Code, is amended to read as follows:

(b) An agreement under this section must require the private school to:

(1) as determined appropriate by the commissioner, provide to the commissioner the information described by Sections 39.053(c) and 39.301(c); [Section 39.051(b)] and

(2) [to] maintain confidentiality in compliance with Section 39.030.

SECTION 20. Section 39.034, Education Code, is amended by amending Subsection (d) and adding Subsection (d-1) to read as follows:

(d) The agency shall determine the necessary annual improvement required each year for a student to be prepared to perform satisfactorily on, as applicable:

(1) the grade five assessment instruments;

(2) the grade eight assessment instruments; and

(3) the end-of-course assessment instruments required under this subchapter for graduation.

(d-1) The agency shall report the necessary annual improvement required under Subsection (d) to the district. Each year, the report must state whether the student fell below, met, or exceeded the necessary target for improvement.

SECTION 21. Subchapters C through L, Chapter 39, Education Code, as amended by Section 2.25, Chapter 396 (S.B. 4), and Section 4, Chapter 931 (H.B. 2307), Acts of the 76th Legislature, Regular Session, 1999, are amended to read as follows:

SUBCHAPTER C. ACCREDITATION [PERFORMANCE INDICATORS

[SUBCHAPTER D. ACCREDITATION STATUS]

Sec. 39.051 [39.071]. ACCREDITATION STATUS. [(a)] Accreditation of a school district is determined in accordance with this subchapter [section]. The commissioner by rule shall determine in accordance with this subchapter the criteria for [define] the following accreditation statuses:

(1) accredited;

(2) accredited-warned; and

(3) accredited-probation.

Sec. 39.052. DETERMINATION OF ACCREDITATION STATUS. (a) Not later than August 8 of each [(b) Each] year, the commissioner shall determine the accreditation status of each school district.

(b) In determining the accreditation status of a school district, the commissioner:

(1) shall evaluate and consider:

(A) [the] performance on student achievement indicators described by Section 39.053(c);

(B) whether a significant pattern of decreased academic performance has developed as a result of the promotion in the preceding two school years of students who did not perform satisfactorily as determined by the commissioner under Section 39.0241(a) on assessment instruments administered under Section 39.023(a), (c), or (l) [of the district under:

[(A) the academic accountability system under Section 39.072]; and

(C) performance under [(B)] the financial accountability rating system developed under Subchapter D [I]; and

(2) may evaluate and consider:

(A) the district's compliance with statutory requirements and requirements imposed by rule of the commissioner or State Board of Education under specific statutory authority that relate to:

(i) reporting data through the Public Education Information Management System (PEIMS) or other reports required by state or federal law or court order;

(ii) the high school graduation requirements under Section 28.025; or

(iii) an item listed under Sections 7.056(e)(3)(C)-(I) that applies to the district;

(B) the effectiveness of the district's programs for special populations; and

(C) the effectiveness of the district's career and technology program.

(c) Based on a school district's performance under Subsection (b), the commissioner shall:

(1) assign each [a] district an accreditation status; or

(2) revoke the accreditation of the district and order closure of the district under this subchapter.

(d) A school district's accreditation status may be raised or lowered based on the district's performance or may be lowered based on the performance of one or more campuses in the district that is below a standard required under this subchapter.

(e) [(d)] The commissioner shall notify a school district that receives an accreditation status of accredited-warned or accredited-probation or a campus that performs below a standard required under this subchapter that the performance of the district or campus is below a standard required under this subchapter. If the district received an accreditation status of accredited-warned or accredited-probation for the preceding school year or if any campus performed below a standard required under this subchapter in the preceding school year, the commissioner shall notify the district or campus of a subsequent such designation on or before June 15 [section]. The commissioner shall require the district to notify the parents of students enrolled in the district and property owners in the district of the district's accreditation status and the implications of that accreditation status.

(f) [(e)] A school district that is not accredited may not receive funds from the agency or hold itself out as operating a public school of this state.

(g) [(f)] This chapter may not be construed to invalidate a diploma awarded, course credit earned, or grade promotion granted by a school district before the commissioner revoked the district's accreditation.

Sec. 39.053. PERFORMANCE INDICATORS: STUDENT ACHIEVEMENT. (a) The commissioner shall adopt a set of indicators of the quality of learning and student achievement. The commissioner biennially shall review the indicators for the consideration of appropriate revisions.

[Sec. 39.051. ACADEMIC EXCELLENCE INDICATORS. (a) The State Board of Education shall adopt a set of indicators of the quality of learning on a campus. The State Board of Education biennially shall review the indicators for the consideration of appropriate revisions.]

(b) Performance on the student achievement indicators adopted under this section shall be compared to state-established standards. The degree of change from one school year to the next in performance on each indicator adopted under this section shall also be considered. The indicators must be based on information that is disaggregated by race, ethnicity, [gender,] and socioeconomic status.

(c) Indicators of student achievement adopted under this section [and] must include:

(1) the results of assessment instruments required under Sections 39.023(a), (c), and (l), including the results of assessment instruments required for graduation retaken by a student, aggregated across [by] grade levels by [level and] subject area, including:

(A) for the performance standard determined by the commissioner under Section 39.0241(a):

(i) the percentage of students who performed satisfactorily on the assessment instruments, aggregated across grade levels by subject area; and

(ii) for students who did not perform satisfactorily, the percentage of students who met the standard for annual improvement, as determined by the agency under Section 39.034, on the assessment instruments, aggregated across grade levels by subject area; and

(B) for the college readiness performance standard as determined under Section 39.0241:

(i) the percentage of students who performed satisfactorily on the assessment instruments, aggregated across grade levels by subject area; and

(ii) for students who did not perform satisfactorily, the percentage of students who met the standard for annual improvement, as determined by the agency under Section 39.034, on the assessment instruments, aggregated across grade levels by subject area;

(2) dropout rates, including dropout rates and district completion rates for grade levels 9 through 12, computed in accordance with standards and definitions adopted by the National Center for Education Statistics of the United States Department of Education; and

(3) high school graduation rates, computed in accordance with standards and definitions adopted in compliance with the No Child Left Behind Act of 2001 (20 U.S.C. Section 6301 et seq.).

(d) For purposes of Subsection (c), the commissioner by rule shall determine the period within which a student must retake an assessment instrument for that assessment instrument to be considered in determining the accreditation status of the district.

(e) [(Pub. L. No. 107-110);

[(4) student attendance rates;

[(5) the percentage of graduating students who attain scores on the questions developed for end-of-course assessment instruments under Section 39.0233(a) that are equivalent to a passing score on the assessment instrument required under Section 51.3062;

[(6) the percentage of graduating students who meet the course requirements established for the recommended high school program by State Board of Education rule;

[(7) the results of the Scholastic Assessment Test (SAT), the American College Test (ACT), articulated postsecondary degree programs described by Section 61.852, and certified workforce training programs described by Chapter 311, Labor Code;

[(8) the percentage of students, aggregated by grade level, provided accelerated instruction under Section 28.0211(c), the results of assessments administered under that section, the percentage of students promoted through the grade placement committee process under Section 28.0211, the subject of the assessment instrument on which each student failed to perform satisfactorily, and the performance of those students in the school year following that promotion on the assessment instruments required under Section 39.023;

[(9) for students who have failed to perform satisfactorily on an assessment instrument required under Section 39.023(a) or (c), the numerical progress of those students grouped by percentage on subsequent assessment instruments required under those sections, aggregated by grade level and subject area;

[(10) the percentage of students exempted, by exemption category, from the assessment program generally applicable under this chapter;

[(11) the percentage of students of limited English proficiency exempted from the administration of an assessment instrument under Sections 39.027(a)(3) and (4);

[(12) the percentage of students in a special education program under Subchapter A, Chapter 29, assessed through assessment instruments developed or adopted under Section 39.023(b);

[(13) the measure of progress toward preparation for postsecondary success; and

[(14) the measure of progress toward dual language proficiency under Section 39.034(b), for students of limited English proficiency, as defined by Section 29.052.

[(b-1) Performance on the indicators described by Subsections (b)(1), (2), (3), (8), (9), and (14) must be based on longitudinal student data that is disaggregated by the bilingual education or special language program, if any, in which students of limited English proficiency, as defined by Section 29.052, are or former students of limited English proficiency were enrolled. If a student described by this subsection is not or was not enrolled in specialized language instruction, the number and percentage of those students shall be provided.

[(c)] Performance on the student achievement indicators [indicator] under Subsections (c)(1) and (2) [Subsection (b)(1)] shall be compared to state standards and[,] required improvement[, and comparable improvement]. The state standard shall be established by the commissioner. Required improvement is [defined as] the progress necessary for the campus or district to meet state standards and, for the student achievement indicator under Subsection (c)(1), for its students to meet each of the performance standards as determined under Section 39.0241.

(f) [exit requirements as defined by the commissioner. Comparable improvement is derived by measuring campuses and districts against a profile developed from a total state student performance database which exhibits substantial equivalence to the characteristics of students served by the campus or district, including past academic performance, socioeconomic status, ethnicity, and limited English proficiency.

[(d)] Annually, the commissioner shall define the state standard for the current school year for each student achievement [exemplary, recognized, and unacceptable performance for each academic excellence] indicator described by Subsection (c) [included under Subsections (b)(1) through (7)] and shall project the state standards for each [of those levels of performance for succeeding years. For the] indicator for the following two school [under Subsection (b)(8), the commissioner shall define exemplary, recognized, and unacceptable performance based on student performance for the period covering both the current and preceding academic] years.

(g) In defining the required state standard [exemplary, recognized, and unacceptable performance] for the indicator described by Subsection (c)(2) [indicators under Subsections (b)(2) and (4)], the commissioner may not consider as a dropout [or as] a student [who has failed to attend school a student] whose failure to attend school results from:

(1) the student's expulsion under Section 37.007; and

(2) as applicable:

(A) adjudication as having engaged in delinquent conduct or conduct indicating a need for supervision, as defined by Section 51.03, Family Code; or

(B) conviction of and sentencing for an offense under the Penal Code.

(g-1) In computing dropout and completion rates under Subsection (c)(2), the commissioner shall:

(1) exclude students who are ordered by a court to attend a high school equivalency certificate program but who have not yet earned a high school equivalency certificate;

(2) exclude students who were previously reported to the state as dropouts; and

(3) exclude students in attendance who are not in membership for purposes of average daily attendance;

(4) exclude students who first enrolled in U.S. schools in grades 7 through 12 as unschooled refugees or asylees per Section 39.027(a-2);

(5) exclude students who are in the district exclusively as a function of having been detained at a county detention facility but are otherwise nonstudents of the district in which the facility is located; and

(6) exclude students who return to school at any point up through the fourth Friday in October each year.

(h) [(e)] Each school district shall cooperate with the agency in determining whether a student is a dropout for purposes of accreditation and evaluating performance by school districts and campuses under this chapter [section].

(i) [(f) The indicator under Subsection (b)(1) must include the results of assessment instruments required under Section 39.023(b).

[(g)] The commissioner by rule shall adopt accountability measures to be used in assessing the progress of students who have failed to perform satisfactorily as determined by the commissioner under Section 39.0241(a) or under the college readiness standard as determined under Section 39.0241 in the preceding school year on an assessment instrument required under Section 39.023(a), (c), or (l).

Sec. 39.054. METHODS AND STANDARDS FOR EVALUATING PERFORMANCE. (a) The commissioner shall adopt rules consistent with this section to evaluate school district and campus performance and assign each district and campus a performance rating that reflects satisfactory performance, unsatisfactory performance, or performance eligible for distinction under Subchapter G.

(a-1) A campus is considered academically accredited if the campus is assigned a satisfactory performance rating under this section.

(b) In evaluating performance, the commissioner shall evaluate against state standards and consider the performance of each campus in a school district and each open-enrollment charter school on the basis of:

(1) the campus's or school's performance on the student achievement indicators adopted under Section 39.053(c); and

(2) whether a significant pattern of decreased academic performance has developed as a result of the promotion in the preceding two school years of students who did not perform satisfactorily as determined by the commissioner under Section 39.0241(a) on assessment instruments administered under Section 39.023(a), (c), or (l).

(b-1) [39.072. ACCREDITATION STANDARDS. (a) The State Board of Education shall adopt rules to evaluate the performance of school districts and to assign to each district a performance rating as follows:

[(1) exemplary (meets or exceeds state exemplary standards);

[(2) recognized (meets or exceeds required improvement and within 10 percent of state exemplary standards);

[(3) academically acceptable (below the exemplary and recognized standards but exceeds the academically unacceptable standards); or

[(4) academically unacceptable (below the state clearly unacceptable performance standard and does not meet required improvement).

[(b) The academic excellence indicators adopted under Sections 39.051(b)(1) through (8) and the district's current special education compliance status with the agency shall be the main considerations of the agency in the rating of the district under this section. Additional criteria in the rules may include consideration of:

[(1) compliance with statutory requirements and requirements imposed by rule of the State Board of Education under specific statutory authority that relate to:

[(A) reporting data through the Public Education Information Management System (PEIMS);

[(B) the high school graduation requirements under Section 28.025; or

[(C) an item listed in Sections 7.056(e)(3)(C)-(I) that applies to the district;

[(2) the effectiveness of the district's programs for special populations; and

[(3) the effectiveness of the district's career and technology programs.

[(c) The agency shall evaluate against state standards and shall, not later than August 1 of each year, report the performance of each campus in a district and each 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 Section 39.052(b)(2)(B) or (C):

(1) [Subsection (b)(2) or (3)] must:

(A) be based on data collected through the Public Education Information Management System (PEIMS) for purposes of accountability under this chapter; and

(B) include the results of assessments required under Section 39.023; and

(2) may be based on the results of a special accreditation investigation conducted under Section 39.057.

(c) In evaluating school district and campus performance on the student achievement indicators adopted under Sections 39.053(c)(1) and (2), the commissioner shall identify satisfactory performance as meeting the state standard determined by the commissioner under Section 39.053(f) for the current school year based on:

(1) student performance in the current school year; or

(2) student performance as averaged over the current school year and the preceding two school years.

(d) [Notwithstanding any other provision of this code, for purposes of determining the performance of a school district under this chapter, including the accreditation status of the district, a student confined by court order in a residential program or facility operated by or under contract with the Texas Youth Commission, Texas Juvenile Probation Commission, or any other governmental entity, including a juvenile board, is not considered to be a student of the school district in which the program or facility is physically located. The performance of such a student on an assessment instrument or other academic excellence indicator adopted under Section 39.051 shall be determined, reported, and considered separately from the performance of students attending a school of the district in which the program or facility is physically located.

[Sec. 39.0721. GOLD PERFORMANCE RATING PROGRAM. (a) In addition to district and campus performance ratings reported under Section 39.072, the commissioner shall develop a gold performance rating program based on enhanced performance. The agency shall administer the program.

[(b) Under the gold performance rating program, a district or campus rated exemplary under Section 39.072 is eligible for an exemplary gold rating, a district or campus rated recognized is eligible for a recognized gold rating, and a district or campus rated academically acceptable is eligible for an academically acceptable gold rating.

[(c) The performance standards on which a gold performance rating is based should include:

[(1) student proficiency on:

[(A) assessment instruments administered under Sections 39.023(a), (c), and (l); and

[(B) other measures of proficiency determined by the commissioner;

[(2) student performance on one or more nationally recognized norm-referenced assessment instruments;

[(3) improvement in student performance;

[(4) in the case of middle or junior high school campuses, student proficiency in mathematics, including algebra; and

[(5) in the case of high school campuses:

[(A) the extent to which graduating students are academically prepared to attend institutions of higher education;

[(B) the percentage of students who take advanced placement tests and student performance on those tests; and

[(C) the percentage of students who take and successfully complete advanced academic courses or college-level course work offered through dual credit programs provided under agreements between high schools and institutions of higher education.

[(d) The commissioner may adopt rules as necessary to implement and administer this section.

[Sec. 39.073. DETERMINING ACCREDITATION STATUS. (a) The agency shall annually review the performance of each district and campus on the indicators adopted under Sections 39.051(b)(1) through (8) and determine if a change in the accreditation status of the district is warranted. The commissioner may determine how all indicators adopted under Section 39.051(b) may be used to determine accountability ratings and to select districts and campuses for acknowledgment.

[(b)] Each annual performance review under this section shall include an analysis of the student achievement indicators adopted under Section 39.053(c) [Sections 39.051(b)(1) through (8)] to determine school district and campus performance in relation to:

(1) standards established for each indicator; and

(2) required improvement as defined under Section 39.053(e).

(d-1) The commissioner by rule may adopt a method of evaluation by which a district or campus is not assigned an unsatisfactory performance rating solely because the district or campus fails to satisfy the minimum performance standards on 15 percent or fewer of the measures of evaluation the commissioner determines appropriate with respect to the student achievement indicators adopted under Section 39.053(c). Under the method of evaluation adopted by the commissioner under this subsection, the commissioner:

(1) may grant an exception under this subsection to a district or campus only if the performance of the district or campus is within five percentage points of the minimum performance standard established by the commissioner for the measure of evaluation;

(2) may not grant an exception under this subsection if a district or campus fails to satisfy the minimum performance standard on the same measure of evaluation for two consecutive school years; and

(3) may establish other performance criteria for a district or campus to obtain an exception under this subsection [39.051(c); and

[(3) comparable improvement as defined by Section 39.051(c)].

[(c) A district's accreditation rating may be raised or lowered based on the district's performance or may be lowered based on the unacceptable performance of one or more campuses in the district.

[(d) The commissioner shall notify a district that is rated academically unacceptable that the performance of the district or a campus in the district is below each standard under Subsection (b) and shall require the district to notify property owners and parents in the district of the lowered accreditation rating and its implication.]

(e) [In determining a district's accreditation rating, the agency shall consider:

[(1) the district's current special education compliance status with the agency; and

[(2) the progress of students who have failed to perform satisfactorily in the preceding school year on an assessment instrument required under Section 39.023(a), (c), or (l).

[(f)] In the computation of dropout rates under Section 39.053(c)(2) [39.051(b)(2)], a student who is released from a juvenile pre-adjudication secure detention facility or juvenile post-adjudication secure correctional facility and fails to enroll in school or a student who leaves a residential treatment center after receiving treatment for fewer than 85 days and fails to enroll in school may not be considered to have dropped out from the [campus or] school district or campus serving the facility or center unless that district or campus [or district] is the one to which the student is regularly assigned. The commissioner may not limit the number of students excluded from being counted as dropouts under the provision of this section.

Sec. 39.055. STUDENT ORDERED BY A JUVENILE COURT NOT CONSIDERED FOR ACCOUNTABILITY PURPOSES. Notwithstanding any other provision of this code, for purposes of determining the performance of a school district or campus under this chapter, a student ordered by a juvenile court into a residential program or facility operated by or under contract with the Texas Youth Commission, the Texas Juvenile Probation Commission, a juvenile board, or any other government entity is not considered to be a student of the school district in which the program or facility is physically located. The performance of such a student on an assessment instrument or other student achievement indicator adopted under Section 39.053 or reporting indicator adopted under Section 39.301 shall be determined, reported, and considered separately from the performance of students attending a school of the district in which the program or facility is physically located.

Sec. 39.056 [39.074]. ON-SITE INVESTIGATIONS. (a) The commissioner may:

(1) direct the agency to conduct on-site investigations of a school district at any time to answer any questions concerning a program, including special education, required by federal law or for which the district receives federal funds; and

(2) [raise or lower the performance rating] as a result of the investigation, change the accreditation status of a district or accountability rating of a district or campus or withdraw a distinction designation under Subchapter G.

(b) The commissioner shall determine the frequency of on-site investigations by the agency according to annual comprehensive analyses of student performance and equity in relation to the student achievement [academic excellence] indicators adopted under Section 39.053 [39.051].

(c) In making an on-site [accreditation] investigation, the investigators shall obtain information from administrators, teachers, and parents of students enrolled in the school district. The investigation may not be closed until information is obtained from each of those sources. The State Board of Education shall adopt rules for:

(1) obtaining information from parents and using that information in the investigator's report; and

(2) obtaining information from teachers in a manner that prevents a [campus or] district or campus from screening the information.

(d) The agency shall give written notice to the superintendent and the board of trustees of a school district of any impending investigation of the district's accreditation.

(e) [If an annual review indicates low performance on one or more of the indicators under Sections 39.051(b)(1) through (8) of one or more campuses in a district, the agency may conduct an on-site evaluation of those campuses only.

[(f)] The investigators shall report orally and in writing to the board of trustees of the school district and, as appropriate, to campus administrators and shall make recommendations concerning any necessary improvements or sources of aid such as regional education service centers.

Sec. 39.057 [39.075]. SPECIAL ACCREDITATION INVESTIGATIONS. (a) The commissioner shall authorize special accreditation investigations to be conducted:

(1) when excessive numbers of absences of students eligible to be tested on state assessment instruments are determined;

(2) when excessive numbers of allowable exemptions from the required state assessment instruments are determined;

(3) in response to complaints submitted to the agency with respect to alleged violations of civil rights or other requirements imposed on the state by federal law or court order;

(4) in response to established compliance reviews of the district's financial accounting practices and state and federal program requirements;

(5) when extraordinary numbers of student placements in disciplinary alternative education programs, other than placements under Sections 37.006 and 37.007, are determined;

(6) in response to an allegation involving a conflict between members of the board of trustees or between the board and the district administration if it appears that the conflict involves a violation of a role or duty of the board members or the administration clearly defined by this code;

(7) when excessive numbers of students in special education programs under Subchapter A, Chapter 29, are assessed through assessment instruments developed or adopted under Section 39.023(b);

(8) in response to an allegation regarding or an analysis using a statistical method result indicating a possible violation of an assessment instrument security procedure established under Section 39.0301, including for the purpose of investigating or auditing a school district under that section; [or]

(9) when excessive numbers of students graduate under the minimum high school program;

(10) when excessive numbers of students eligible to enroll fail to complete an Algebra II course or any other course determined by the commissioner as distinguishing between students participating in the recommended high school program from students participating in the minimum high school program; or

(11) as the commissioner otherwise determines necessary.

(b) If the agency's findings in an investigation under Subsection (a)(6) indicate that the board of trustees has observed a lawfully adopted policy, the agency may not substitute its judgment for that of the board.

(c) [(b-1)] The commissioner may authorize special accreditation investigations to be conducted in response to repeated complaints submitted to the agency concerning imposition of excessive paperwork requirements on classroom teachers.

(d) [(c)] Based on the results of a special accreditation investigation, the commissioner may:

(1) take appropriate action under Subchapter E [G];

(2) lower the school district's accreditation status or the district's or campus's accountability rating; or

(3) take action under both Subdivisions (1) and (2).

(e) [(c) Based on the results of a special accreditation investigation, the commissioner may lower the district's accreditation rating and may take appropriate action under Subchapter G.] Regardless of whether the commissioner lowers the school district's accreditation status or the district's or campus's accountability rating under Subsection (d), the commissioner may take action under Sections 39.101(a)(1) through (8) or Section 39.102 [39.131(a)(1) through (8)] if the commissioner determines that the action is necessary to improve any area of a district's or campus's performance, including the district's financial accounting practices.

Sec. 39.058 [39.076]. CONDUCT OF INVESTIGATIONS. (a) The agency shall adopt written procedures for conducting on-site investigations under this subchapter. The agency shall make the procedures available to the complainant, the alleged violator, and the public. Agency staff must be trained in the procedures and must follow the procedures in conducting the investigation.

(b) After completing an investigation, the agency shall present preliminary findings to any person the agency finds has violated a law, rule, or policy. Before issuing a report with its final findings, the agency must provide a person the agency finds has violated a law, rule, or policy an opportunity for an informal review by the commissioner or a designated hearing examiner.

SUBCHAPTER D [I]. FINANCIAL ACCOUNTABILITY

Sec. 39.081 [39.201]. DEFINITIONS. In this subchapter:

(1) "Parent" includes a guardian or other person having lawful control of a student.

(2) "System" means the financial accountability rating system.

Sec. 39.082 [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 in this state that:

(1) distinguishes among school districts 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 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 financial management performance.

Sec. 39.0821. COMPTROLLER REVIEW OF RESOURCE ALLOCATION PRACTICES. The comptroller shall identify school districts and campuses that use resource allocation practices that contribute to high academic achievement and cost-effective operations. In identifying districts and campuses under this section, the comptroller shall:

(1) evaluate existing academic accountability and financial data by integrating the data;

(2) rank the results of the evaluation under Subdivision (1) to identify the relative performance of districts and campuses; and

(3) identify potential areas for district and campus improvement.

Sec. 39.0822. FINANCIAL SOLVENCY REVIEW REQUIRED. (a) The agency shall develop a review process to anticipate the future financial solvency of each school district. The review process shall analyze:

(1) district revenues and expenditures for the preceding school year; and

(2) projected district revenues and expenditures for the current school year and the following two school years.

(b) In analyzing the information under Subsection (a), the review process developed must consider, for the preceding school year, the current school year, and the following two school years, as appropriate:

(1) student-to-staff ratios relative to expenditures, including average staff salaries;

(2) the rate of change in the district unreserved general fund balance;

(3) the number of students enrolled in the district;

(4) the adopted tax rate of the district;

(5) any independent audit report prepared for the district; and

(6) actual district financial information for the first quarter.

(c) The agency shall consult school district financial officers and public finance experts in developing the review process under this section.

(d) The agency shall develop an electronic-based program for school districts to use in submitting information to the agency for purposes of this section. Each district shall update information for purposes of the program within the period prescribed by the commissioner. The commissioner shall adopt rules under this subsection to allow a district to enter estimates of critical data into the program before the district adopts its budget. The program must:

(1) be capable of importing, to the extent practicable, data a district has previously submitted to the agency;

(2) include an entry space that allows a district to enter information explaining any irregularity in data submitted; and

(3) provide alerts for:

(A) a student-to-staff ratio that is significantly outside the norm;

(B) a rapid depletion of the district general fund balance; and

(C) a significant discrepancy between actual budget figures and projected revenues and expenditures.

(e) An alert in the program developed under Subsection (d) must be developed to notify the agency immediately on the occurrence of a condition described by Subsection (d)(3). After the agency is alerted, the agency shall immediately notify the affected school district regarding the condition triggering the alert.

Sec. 39.0823. PROJECTED DEFICIT. (a) If the review process under Section 39.0822 indicates a projected deficit for a school district general fund within the following three school years, the district shall provide the agency interim financial reports, supplemented by staff and student count data, as needed, to evaluate the district's current budget status.

(b) If the interim financial data provided under Subsection (a) substantiates the projected deficit, the school district shall develop a financial plan and submit the plan to the agency for approval. The agency may approve the plan only if the agency determines the plan will permit the district to avoid the projected insolvency.

(c) The commissioner shall assign a school district an accredited-warned status if:

(1) the district fails to submit a plan as provided by Subsection (b);

(2) the district fails to obtain approval from the agency for a plan as provided by Subsection (b);

(3) the district fails to comply with a plan approved by the agency under Subsection (b); or

(4) the agency determines in a subsequent school year, based on financial data submitted by the district, that the approved plan for the district is no longer sufficient or is not appropriately implemented.

Sec. 39.083 [39.203]. REPORTING. (a) The commissioner shall develop, as part of the system, a reporting procedure under which:

(1) each school district 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 financial management performance based on a comparison, provided by the agency, of the district's performance on the indicators adopted under Section 39.082(b) [39.202(b)] to:

(A) state-established standards; and

(B) the district's previous performance on the indicators; [and]

(2) a description of the data submitted using the electronic-based program developed under Section 39.0822; and

(3) any descriptive information required by the commissioner.

(c) The report may include:

(1) information concerning the district'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 shall hold a public hearing on the report. The board shall give notice of the hearing to owners of real property in the district and to parents of district 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 in the manner prescribed by the commissioner.

Sec. 39.084 [39.204]. RULES. The commissioner shall adopt rules as necessary for the implementation and administration of this subchapter.

SUBCHAPTER E [G]. ACCREDITATION INTERVENTIONS AND SANCTIONS

Sec. 39.101 [39.131]. INTERVENTIONS AND SANCTIONS FOR DISTRICTS. (a) If a school district does not satisfy the accreditation criteria under Section 39.052 [39.071], the [academic] performance standards under Section 39.053 or 39.054 [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 insufficient [unacceptable] performance, the improvements in performance expected by the agency, and the interventions and 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 student achievement [academic excellence] indicator under Section 39.053(c) for which the district's performance is insufficient [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 insufficient [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, fails to satisfy any standard under Section 39.054(d) [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 for which performance is currently determined, a district has received an accreditation status of accredited-warned or accredited-probation, has failed to satisfy any standard under Section 39.054(d) [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 open-enrollment charter school, order closure of all programs operated under the district's or school's charter; or

(11) if a district has failed to satisfy any standard under Section 39.054(d) [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.

(b) This subsection applies regardless of whether a district has satisfied the accreditation criteria. If for two consecutive school years, including the [current] school year for which the accreditation status is currently determined, a district has had a conservator or management team assigned, the commissioner may appoint a board of managers, a majority of whom must be residents of the district, to exercise the powers and duties of the board of trustees.

Sec. 39.102 [39.132]. INTERVENTIONS AND SANCTIONS FOR [ACADEMICALLY UNACCEPTABLE] CAMPUSES. (a) If a campus performance is below any standard under Section 39.054(d) [39.073(b)], the [campus is considered an academically unacceptable campus. The] commissioner [may permit the campus to participate in an innovative redesign of the campus to improve campus performance or] shall take [any of the other following] actions, to the extent the commissioner determines necessary, as provided by this subchapter.

(b) For a campus described by Subsection (a), the commissioner, to the extent the commissioner determines necessary, may[:

[(1) issue public notice of the deficiency to the board of trustees;

[(2) order a hearing conducted by the board of trustees at the campus for the purpose of:

[(A) notifying the public of the unacceptable performance, the improvements in performance expected by the agency, and the sanctions that may be imposed under this section if the performance does not improve within a designated period of time; and

[(B) soliciting public comment on the initial steps being taken to improve performance;

[(3) order the preparation of a report regarding the parental involvement program at the campus and a plan describing strategies for improving parental involvement at the campus;

[(4) order the preparation of a report regarding the effectiveness of the district- and campus-level planning and decision-making committees established under Subchapter F, Chapter 11, and a plan describing strategies for improving the effectiveness of those committees;

[(5) order the preparation of a student improvement plan that addresses each academic excellence indicator for which the campus's performance is unacceptable, the submission of the plan to the commissioner for approval, and implementation of the plan;

[(6)] order a hearing to be held before the commissioner or the commissioner's designee at which the president of the board of trustees, the superintendent, and the campus principal shall appear and explain the campus's low performance, lack of improvement, and plans for improvement[; or

[(7) appoint a campus intervention team under Section 39.1322].

(c) Notwithstanding the provisions of this subchapter, if the commissioner determines that a campus subject to interventions or sanctions under this subchapter has implemented substantially similar intervention measures under federal accountability requirements, the commissioner may accept the substantially similar intervention measures as measures in compliance with this subchapter.

Sec. 39.103 [39.1321]. INTERVENTIONS AND SANCTIONS FOR CHARTER SCHOOLS. (a) Interventions and sanctions [Sanctions] authorized under this chapter for a school district or campus apply in the same manner to an open-enrollment charter school.

(b) The commissioner shall adopt rules to implement procedures to impose any intervention or sanction provision under this chapter as those provisions relate to open-enrollment charter schools.

(c) In adopting rules under this section, the commissioner shall require that the charter of an open-enrollment charter school:

(1) be automatically revoked if the 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 interventions or sanctions are imposed on an open-enrollment charter school under the procedures provided by this chapter, 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 Subchapter D, Chapter 12.

Sec. 39.104 [39.1322]. [TECHNICAL ASSISTANCE AND] CAMPUS IMPROVEMENT PLAN [INTERVENTION TEAMS]. (a) This section applies if [If] a campus performance satisfies performance standards under Section 39.054(d) [is rated academically acceptable] for the current school year but would not satisfy performance standards under Section 39.054(d) [be rated as academically unacceptable] if the [performance] standards to be used for the following school year were applied to the current school year. On request of[,] the commissioner, the campus shall submit to the commissioner in an electronic format the portions of the campus improvement plan developed under Section 11.253 that are relevant to those areas for which the campus would not satisfy performance standards [select and assign a technical assistance team to assist the campus in executing a school improvement plan and any other school improvement strategies the commissioner determines appropriate. The commissioner may waive the requirement to assign a technical assistance team under this subsection if the improvement in performance standards among all student groups, including special populations, over the preceding three years indicates that the campus is likely to be rated academically acceptable in the following school year].

(b) If the [a] campus to which this section applies is an open-enrollment charter school, the school shall establish a campus-level planning and decision-making committee as provided for through procedures as much as practicable the same as those provided by Sections 11.251(b)-(e) and develop a campus improvement plan as provided by Section 11.253. On request of the commissioner, the school shall submit to the commissioner in an electronic format the portions of the campus improvement plan that are relevant to those areas for which the school would not satisfy performance standards [has been identified as academically unacceptable under Section 39.132, the commissioner shall appoint a campus intervention team.

[(c) To the extent practicable, the commissioner shall select and assign the technical assistance team under Subsection (a) or the campus intervention team under Subsection (b) before the first day of instruction for the school year.

[(d) The commissioner may determine when the services of a technical assistance team or campus intervention team are no longer needed at a campus under this section].

Sec. 39.105 [39.1323]. CAMPUS INTERVENTION TEAM [PROCEDURES]. (a) If a campus performance is below any standard under Section 39.054(d), the commissioner shall assign a campus intervention team. A campus intervention team shall:

(1) conduct:

(A) a targeted [comprehensive] on-site needs assessment relevant to an area of insufficient performance [evaluation] of the campus as provided by Subsection (b) [to determine the cause for the campus's low performance and lack of progress]; or

(B) if the commissioner determines necessary, a comprehensive on-site needs assessment, using the procedures provided by Subsection (b);

(2) recommend appropriate actions as provided by Subsection (c)[, including reallocation of resources and technical assistance, changes in school procedures or operations, staff development for instructional and administrative staff, intervention for individual administrators or teachers, waivers from state statute or rule, or other actions the team considers appropriate];

(3) assist in the development of a targeted [school] improvement plan [for student achievement]; [and]

(4) assist the campus in submitting the targeted improvement plan to the board of trustees for approval and presenting the plan in a public hearing as provided by Subsection (e-1); and

(5) assist the commissioner in monitoring the progress of the campus in implementing the targeted [school] improvement plan [for improvement of student achievement].

(b) An [A campus intervention team assigned under Section 39.1322 to a campus shall conduct a comprehensive] on-site needs assessment of the campus under Subsection (a) must [to] determine the contributing [causal] factors resulting in the campus's low performance and lack of progress. The team shall use any of the following guidelines and procedures relevant to any area of insufficient performance in conducting a targeted on-site needs assessment and shall use each of the following guidelines and procedures in conducting a [the] comprehensive on-site needs assessment [of the campus]:

(1) an assessment of the staff to determine the percentage of certified teachers who are teaching in their field, the number of teachers with less than three years of experience, and teacher turnover rates;

(2) compliance with the appropriate class-size rules and number of class-size waivers received;

(3) an assessment of the quality, quantity, and appropriateness of instructional materials, including the availability of technology-based instructional materials;

(4) a report on the parental involvement strategies and the effectiveness of the strategies;

(5) an assessment of the extent and quality of the mentoring program provided for new teachers on the campus;

(6) an assessment of the type and quality of the professional development provided to the staff;

(7) a demographic analysis of the student population, including student demographics, at-risk populations, and special education percentages;

(8) a report of disciplinary incidents and school safety information;

(9) financial and accounting practices;

(10) an assessment of the appropriateness of the curriculum and teaching strategies; and

(11) any other research-based data or information obtained from a data collection process that would assist the campus intervention team in:

(A) recommending an action under Subsection (c); and

(B) executing a targeted [school] improvement plan under Subsection (d-1) [(d)].

(c) On completing the on-site needs assessment [evaluation] under this section, the campus intervention team shall recommend actions relating to any area of insufficient performance, including:

(1) reallocation of resources;

(2) technical assistance;

(3) changes in school procedures or operations;

(4) staff development for instructional and administrative staff;

(5) intervention for individual administrators or teachers;

(6) waivers from state statutes or rules; or

(7) other actions the campus intervention team considers appropriate.

(d) The campus intervention team shall assist the campus in submitting the targeted improvement plan to the commissioner for approval.

(d-1) In executing the targeted [a school] improvement plan [developed under Subsection (a)(3)], the campus intervention team shall, if appropriate:

(1) assist the campus in implementing research-based practices for curriculum development and classroom instruction, including bilingual education and special education programs[, if appropriate,] and financial management; and

(2) provide research-based technical assistance, including data analysis, academic deficiency identification, intervention implementation, and budget analysis, to strengthen and improve the instructional programs at the campus[; and

[(3) submit the school improvement plan to the commissioner for approval].

(e) For each year campus performance is below any standard under Section 39.054(d), a [A] campus intervention team shall [appointed under Section 39.1322(b)]:

(1) [shall] continue to work with a campus until:

(A) the campus satisfies all performance standards under Section 39.054(d) [is rated academically acceptable] for a two-year period; or

(B) the campus satisfies all performance standards under Section 39.054(d) [is rated academically acceptable] for a one-year period and the commissioner determines that the campus is operating and will continue to operate in a manner that improves student achievement; [and]

(2) assist in updating the targeted improvement plan to identify and analyze areas of growth and areas that require improvement; and

(3) submit each updated plan described by Subdivision (2) to the board of trustees of the school district [may continually update the school improvement plan, with approval from the commissioner, to meet the needs of the campus].

(e-1) After a targeted improvement plan or updated plan is submitted to the board of trustees of the school district, the board:

(1) shall conduct a hearing for the purpose of:

(A) notifying the public of the insufficient performance, the improvements in performance expected by the agency, and the intervention measures or sanctions that may be imposed under this subchapter if the performance does not improve within a designated period; and

(B) soliciting public comment on the targeted improvement plan or any updated plan;

(2) may conduct one hearing relating to one or more campuses subject to a targeted improvement plan or an updated plan; and

(3) shall submit the targeted improvement plan or any updated plan to the commissioner for approval.

(f) Notwithstanding any other provision of this subchapter, if the commissioner determines that a campus for which an intervention is ordered under Subsection (a) [Section 39.1322(b)] is not fully implementing the campus intervention team's recommendations or targeted [school] improvement plan or updated plan, the commissioner may order the reconstitution of the campus as provided by Section 39.106.

Sec. 39.106 [39.1324]. RECONSTITUTION, REPURPOSING, ALTERNATIVE MANAGEMENT, AND CLOSURE [MANDATORY SANCTIONS]. (a) Unless otherwise provided under the procedures for approval of an updated targeted improvement plan under Section 39.105(e-1) or this subsection, after [If] a campus has been identified as below any standard under Section 39.054(d) [academically unacceptable] for two consecutive school years, [including the current school year,] the commissioner shall order the reconstitution of the campus [and assign a campus intervention team]. In reconstituting a [the] campus, a campus intervention team shall assist the campus in:

(1) developing an updated targeted [a school] improvement plan;

(2) submitting the updated targeted improvement plan to the board of trustees of the school district for approval and presenting the plan in a public hearing as provided by Section 39.105(e-1);

(3) [(2)] obtaining approval of the updated plan from the commissioner; and

(4) [(3)] executing the plan on approval by the commissioner.

(b) The campus intervention team shall decide which educators may be retained at that campus. A principal who has been employed by the campus in that capacity during the full [two-year] period described by Subsection (a) may not be retained at that campus unless the campus intervention team determines that:

(1) students enrolled at the campus have demonstrated significant academic improvement; or

(2) retention is appropriate under Section 39.236.

(b-1) A teacher of a subject assessed by an assessment instrument under Section 39.023 may be retained only if the campus intervention team determines that a pattern exists of significant academic improvement by students taught by the teacher. If an educator is not retained, the educator may be assigned to another position in the district.

(b-2) For each year the performance of a campus is below any standard under Section 39.054(d) after the second consecutive school year the performance of the campus is below any standard under Section 39.054(d), a campus intervention team shall:

(1) assist in updating the targeted improvement plan to identify and analyze areas of growth and areas that require improvement;

(2) submit the updated plan to the board of trustees of the school district; and

(3) assist in submitting the updated plan to the commissioner for approval.

(c) A campus subject to Subsection (a) shall implement the updated targeted [school] improvement plan as approved by the commissioner. The commissioner may appoint a monitor, conservator, management team, or [a] board of managers to the district to ensure and oversee district-level support to low-performing campuses and the implementation of the updated targeted [school] improvement plan. In making appointments under this subsection, the commissioner shall consider individuals who have demonstrated success in managing campuses with student populations from similar demographic groups and with similar educational needs as the student population the campus at which the individual appointed will serve.

(d) If [Notwithstanding any other provision of this subchapter, if] the commissioner determines that the [a] campus [subject to Subsection (a)] is not fully implementing the updated targeted [school] improvement plan or if the students enrolled at the campus fail to demonstrate substantial improvement in the areas targeted by the updated plan, the commissioner may order:

(1) repurposing of the campus under this section;

(2) [pursue] alternative management of the campus under this section; [Section 39.1327] or

(3) [may order] closure of the campus.

(e) [If a campus is considered an academically unacceptable campus for the subsequent school year after the campus is reconstituted under this section, the commissioner shall review the progress of the campus and may order closure of the campus or pursue alternative management under Section 39.1327.

[(f)] If the performance of a campus is below any standard under Section 39.054(d) [considered academically unacceptable] for three [two] consecutive school years after the campus is reconstituted under Subsection (a), the commissioner shall order:

(1) repurposing of the campus under this section;

(2) alternative management of the campus under this section; or

(3) closure of the campus [or pursue alternative management under Section 39.1327].

(f) If the commissioner orders repurposing of a campus, the school district shall develop a comprehensive plan for repurposing the campus and submit the plan to the board of trustees for approval, using the procedures described by Section 39.105(e-1), and to the commissioner for approval. The plan must include a description of a rigorous and relevant academic program for the campus. The plan may include various instructional models. The commissioner may not approve the repurposing of a campus unless:

(1) all students in the assigned attendance zone of the campus in the school year immediately preceding the repurposing of the campus are provided with the opportunity to enroll in and are provided transportation on request to another school, which may include another school on the same campus, unless the commissioner grants an exception because there is no other school in the district in which the students may enroll;

(2) the principal is not retained at the campus, unless the commissioner determines that students enrolled at the campus have demonstrated significant academic improvement; and

(3) at least 75 percent of the teachers employed at the campus in the school year immediately preceding the repurposing of the campus are not retained at the campus, unless the commissioner or the commissioner's designee grants an exception, at the request of a school district, for:

(A) a teacher who provides instruction in a subject other than a subject for which an assessment instrument is administered under Section 39.023(a) or (c) who demonstrates to the commissioner satisfactory performance; or

(B) a teacher who provides instruction in a subject for which an assessment instrument is administered under Section 39.023(a) or (c) if the district demonstrates that the students of the teacher demonstrated satisfactory performance or improved academic growth on that assessment instrument.

(g) If an educator is not retained under Subsection (f), the educator may be assigned to another position in the district.

(h) If the commissioner orders alternative management under this section, the [Sec. 39.1327. MANAGEMENT OF CERTAIN ACADEMICALLY UNACCEPTABLE CAMPUSES. (a) A campus may be subject to this section if the campus has been identified as academically unacceptable under Section 39.132 and the commissioner orders alternative management under Section 39.1324(d), (e), or (f).

[(b) The] commissioner shall solicit proposals from qualified [nonprofit] entities to assume management of a campus subject to this section or may appoint to assume management of a campus subject to this section a school district other than the district in which the campus is located that is located in the boundaries of the same regional education service center as the campus is located. A district appointed under this section shall assume management of a campus subject to this section in the same manner provided by this section for a qualified [nonprofit] entity or in accordance with commissioner rule.

(i) [(c)] If the commissioner determines that the basis for the unsatisfactory performance of [identifying] a campus for more than two consecutive school years [as academically unacceptable] is limited to a specific condition that may be remedied with targeted technical assistance, the commissioner may[:

[(1) provide the campus a one-year waiver under this section; and

[(2)] require the district to contract for the appropriate technical assistance.

(j) [(d)] The commissioner may annually solicit proposals under this section for the management of a campus subject to this section. The commissioner shall notify a qualified [nonprofit] entity that has been approved as a provider under this section. The district must execute a contract with an approved provider and relinquish control of the campus before January 1 of the school year.

(k) [(e)] To qualify for consideration as a managing entity under this section, the entity must submit a proposal that provides information relating to the entity's management and leadership team that will participate in management of the campus under consideration, including information relating to individuals that have:

(1) documented success in whole school interventions that increased the educational and performance levels of students in [academically unacceptable] campuses in which the campus performance was below any standard under Section 39.054(d);

(2) a proven record of effectiveness with programs assisting low-performing students;

(3) a proven ability to apply research-based school intervention strategies;

(4) a proven record of financial ability to perform under the management contract; and

(5) any other experience or qualifications the commissioner determines necessary.

(l) [(f)] In selecting a managing entity under this section, the commissioner shall give preference to a qualified [nonprofit] entity that:

(1) meets any qualifications under this section; and

(2) has documented success in educating students from similar demographic groups and with similar educational needs as the students who attend the campus that is to be operated by a managing entity under this section.

(m) [(g)] The school district may negotiate the term of a management contract for not more than five years with an option to renew the contract. The management contract must include a provision describing the district's responsibilities in supporting the operation of the campus. The commissioner shall approve the contract before the contract is executed and, as appropriate, may require the district, as a term of the contract, to support the campus in the same manner as the district was required to support the campus before the execution of the management contract.

(n) [(h)] A management contract under this section shall include provisions approved by the commissioner that require the managing entity to demonstrate improvement in campus performance, including negotiated performance measures. The performance measures must be consistent with the priorities of this chapter. The commissioner shall evaluate a managing entity's performance on the first and second anniversaries of the date of the management contract. If the evaluation fails to demonstrate improvement as negotiated under the contract by the first anniversary of the date of the management contract, the district may terminate the management contract, with the commissioner's consent, for nonperformance or breach of contract and select another provider from an approved list provided by the commissioner. If the evaluation fails to demonstrate significant improvement, as determined by the commissioner, by the second anniversary of the date of the management contract, the district shall terminate the management contract and select another provider from an approved list provided by the commissioner or resume operation of the campus if approved by the commissioner. If the commissioner approves the district's operation of the campus, the commissioner shall assign a technical assistance team to assist the campus.

(o) [(i)] Notwithstanding any other provision of this code, the funding for a campus operated by a managing entity must be not less than the funding of the other campuses in the district on a per student basis so that the managing entity receives at least the same funding the campus would otherwise have received.

(p) [(j)] Each campus operated by a managing entity under this section is subject to this chapter in the same manner as any other campus in the district.

(q) [(k)] The commissioner may adopt rules necessary to implement this section.

(r) [(l)] With respect to the management of a campus under this section:

(1) a managing entity is considered to be a governmental body for purposes of Chapters 551 and 552, Government Code; and

(2) any requirement in Chapter 551 or 552, Government Code, that applies to a school district or the board of trustees of a school district applies to a managing entity.

Sec. 39.107 [39.133]. ANNUAL REVIEW. The commissioner shall review annually the performance of a district or campus subject to this subchapter to determine the appropriate actions to be implemented under this subchapter. The commissioner must review at least annually the performance of a district for which the accreditation status or rating has been lowered due to insufficient [unacceptable] student performance and may not raise the accreditation status or rating until the district has demonstrated improved student performance. If the review reveals a lack of improvement, the commissioner shall increase the level of state intervention and sanction unless the commissioner finds good cause for maintaining the current status.

Sec. 39.108 [39.1331]. ACQUISITION OF PROFESSIONAL SERVICES. In addition to other interventions and sanctions authorized under this subchapter [Sections 39.131 and 39.132], the commissioner may order a school district or campus to acquire professional services at the expense of the district or campus to address the applicable financial, assessment, data quality, program, performance, or governance deficiency. The commissioner's order may require the district or campus to:

(1) select or be assigned an external auditor, data quality expert, professional authorized to monitor district assessment instrument administration, or curriculum or program expert; or

(2) provide for or participate in the appropriate training of district staff or board of trustees members in the case of a district, or campus staff, in the case of a campus.

Sec. 39.109 [39.134]. COSTS PAID BY DISTRICT. The costs of providing a monitor, conservator, management team, campus intervention team, technical assistance team, managing entity, or service provider under this subchapter [Section 39.1327, or service provider under Section 39.1331] shall be paid by the district. If the district fails or refuses to pay the costs in a timely manner, the commissioner may:

(1) pay the costs using amounts withheld from any funds to which the district is otherwise entitled; or

(2) recover the amount of the costs in the manner provided for recovery of an overallocation of state funds under Section 42.258.

Sec. 39.110 [39.135]. CONSERVATOR OR MANAGEMENT TEAM. (a) The commissioner shall clearly define the powers and duties of a conservator or management team appointed to oversee the operations of the district.

(b) At least every 90 days, the commissioner shall review the need for the conservator or management team and shall remove the conservator or management team unless the commissioner determines that continued appointment is necessary for effective governance of the district or delivery of instructional services.

(c) A conservator or management team, if directed by the commissioner, shall prepare a plan for the implementation of action under Section 39.101(a)(9) [39.131(a)(9)] or (10). The conservator or management team:

(1) may direct an action to be taken by the principal of a campus, the superintendent of the district, or the board of trustees of the district;

(2) may approve or disapprove any action of the principal of a campus, the superintendent of the district, or the board of trustees of the district;

(3) may not take any action concerning a district election, including ordering or canceling an election or altering the date of or the polling places for an election;

(4) may not change the number of or method of selecting the board of trustees;

(5) may not set a tax rate for the district; and

(6) may not adopt a budget for the district that provides for spending a different amount, exclusive of required debt service, from that previously adopted by the board of trustees.

Sec. 39.111 [39.136]. BOARD OF MANAGERS. (a) A board of managers may exercise all of the powers and duties assigned to a board of trustees of a school district by law, rule, or regulation. This subchapter applies to a district governed by a board of managers in the same manner that this subchapter applies to any other district.

(b) If the commissioner appoints a board of managers to govern a district, the powers of the board of trustees of the district are suspended for the period of the appointment and the commissioner shall appoint a district superintendent. Notwithstanding any other provision of this code, the board of managers may amend the budget of the district.

(c) If the commissioner appoints a board of managers to govern a campus, the powers of the board of trustees of the district in relation to the campus are suspended for the period of the appointment and the commissioner shall appoint a campus principal. Notwithstanding any other provision of this code, the board of managers may submit to the commissioner for approval amendments to the budget of the district for the benefit of the campus. If the commissioner approves the amendments, the board of trustees of the district shall adopt the amendments.

(d) A conservator or a member of a management team appointed to serve on a board of managers may continue to be compensated as determined by the commissioner.

(e) At the direction of the commissioner but not later than the second anniversary of the date the board of managers of a district was appointed, the board of managers shall order an election of members of the district board of trustees. The election must be held on a uniform election date on which an election of district trustees may be held under Section 41.001, Election Code, that is at least 180 days after the date the election was ordered. On qualification of members for office, the board of trustees assumes all of the powers and duties assigned to a board of trustees by law, rule, or regulation.

Sec. 39.112 [39.137]. [SPECIAL] CAMPUS INTERVENTION TEAM. A [special] campus intervention team appointed under this subchapter may consist of teachers, principals, other educational professionals, and superintendents recognized for excellence in their roles and appointed by the commissioner to serve as members of a team.

Sec. 39.113 [39.138]. IMMUNITY FROM CIVIL LIABILITY. An employee, volunteer, or contractor acting on behalf of the commissioner under this subchapter is immune from civil liability to the same extent as a professional employee of a school district under Section 22.051.

Sec. 39.114. CAMPUS NAME CHANGE PROHIBITED. In reconstituting, repurposing, or imposing any other intervention or sanction on a campus under this subchapter, other than closure, the commissioner may not require that the name of the campus be changed.

Sec. 39.115. TRANSITIONAL INTERVENTIONS AND SANCTIONS. (a) During the period of transition to the accreditation system established under __.B. No. 3, Acts of the 81st Legislature, Regular Session, 2009, to be implemented in August 2013, the commissioner may suspend assignment of accreditation statuses and performance ratings for the 2011-2012 school year.

(b) During the 2011-2012 school year, the commissioner shall continue to implement interventions and sanctions for those districts and campuses identified as having unsatisfactory performance in the 2010-2011 school year in accordance with the performance standards applicable during the 2010-2011 school year and may increase or decrease the level of interventions and sanctions based on an evaluation of the district's or campus's performance.

(c) For purposes of determining multiple years of unsatisfactory performance and required district and campus interventions and sanctions under this subchapter, the performance ratings and accreditation statuses issued in the 2010-2011 and 2012-2013 school years shall be considered consecutive.

(d) This section expires September 1, 2014.

SUBCHAPTER F [K]. PROCEDURES FOR CHALLENGE OF ACCOUNTABILITY

DETERMINATION [RATING OR SANCTION]

Sec. 39.151 [39.301]. REVIEW BY COMMISSIONER: ACCOUNTABILITY DETERMINATION [RATINGS]. (a) The commissioner by rule shall provide a process for a school district or 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.

(b) The rules under Subsection (a) must provide for the commissioner to appoint a committee to make recommendations to the commissioner on a challenge made to an agency decision relating to an academic performance rating or determination or financial accountability rating. The commissioner may not appoint an agency employee as a member of the committee.

(c) The commissioner may limit a challenge under this section to a written submission of any issue identified by the school district or open-enrollment charter school challenging the agency decision.

(d) The commissioner shall make a final decision under this section after considering the recommendation of the committee described by Subsection (b). The commissioner's decision may not be appealed under Section 7.057 or other law.

(e) A school district or 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.

Sec. 39.152 [39.302]. REVIEW BY STATE OFFICE OF ADMINISTRATIVE HEARINGS: SANCTIONS. (a) A school district or 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.

(b) A challenge to a decision under this section is under the substantial evidence rule as provided by Subchapter G, Chapter 2001, Government Code.

(c) Notwithstanding other law:

(1) the State Office of Administrative Hearings shall provide an expedited review of a challenge under this section;

(2) the administrative law judge shall issue a final order not later than the 30th day after the date on which the hearing is finally closed; and

(3) the decision of the administrative law judge is final and may not be appealed.

SUBCHAPTER G. DISTINCTION DESIGNATIONS

Sec. 39.201. ELIGIBILITY INDICATOR FOR DISTINCTION DESIGNATION. (a) A district or campus is eligible for a distinction designation under this subchapter if:

(1) the district or campus attains a minimum percentage, as determined by the commissioner, of:

(A) students who performed satisfactorily, as determined under the college readiness performance standard under Section 39.0241, on assessment instruments required under Section 39.023(a), (b), (c), or (l), aggregated across grade levels by subject area; or

(B) students who met the standard for annual improvement, as determined by the agency under Section 39.034, on assessment instruments required under Section 39.023(a), (b), (c), or (l), aggregated across grade levels by subject area, for students who did not perform satisfactorily as described by Paragraph (A); or

(2) the district or campus demonstrates a significant increase as compared to the preceding school year, as determined by the commissioner, in the percentage of students who performed satisfactorily as described by Subdivision (1)(A) or who met the standard for annual improvement as described by Subdivision (1)(B).

(b) The commissioner shall periodically raise the minimum percentage for the eligibility for the distinction designation described by Subsection (a)(1) as necessary to reach the goal of achieving, by not later than the 2019-2020 school year, student performance in this state, disaggregated by race, ethnicity, and socioeconomic status, that ranks nationally in the top 10 states in terms of college readiness.

(c) If college readiness performance standards are adopted for science and social studies end-of-course assessment instruments under Section 39.024(f), those performance standards and assessment instruments apply in determining district or campus eligibility under this section.

Sec. 39.202. ACADEMIC EXCELLENCE DISTINCTION DESIGNATION FOR DISTRICTS AND CAMPUSES. (a) The commissioner shall award a district or campus an academic excellence distinction designation if the district or campus attains percentages of students under Sections 39.201(a)(1) and (2) higher than the percentages determined by the commissioner under Sections 39.201(a)(1) and (2).

(b) The commissioner by rule shall establish a recognized and exemplary rating for the academic distinction designation under this section. In establishing the recognized and exemplary ratings, the commissioner shall adopt criteria for the ratings, including the percentages of students under Sections 39.201(a)(1) and (2). The commissioner may consider the level of increased performance from school year to school year as a factor.

(c) The commissioner shall investigate types and amounts of monetary and nonmonetary awards available to motivate districts and campuses to increase the number of students who perform satisfactorily, as determined under the college readiness performance standard under Section 39.0241. Not later than November 30, 2010, the commissioner shall provide a report based on the investigation under this subsection to the governor, the lieutenant governor, the speaker of the house, and the presiding officers of the standing committees with primary jurisdiction over public education and appropriations. The report must include strategies for increasing student performance in this state to a level that ranks in the top 10 states in terms of college readiness.

Sec. 39.203. CAMPUS DISTINCTION DESIGNATIONS. (a) The commissioner shall award a campus a distinction designation if the campus is ranked in the top 25 percent of campuses eligible under Section 39.201 in annual improvement in student achievement, as determined under Section 39.034, in English language arts, mathematics, science, or social studies.

(b) In addition to the distinction designation described by Subsection (a), the commissioner shall award a campus a distinction designation if the campus demonstrates an ability to significantly diminish or eliminate performance differentials between student subpopulations and is ranked in the top 25 percent of campuses eligible under Section 39.201 under the performance criteria described by this subsection. The commissioner shall adopt rules related to the distinction designation under this subsection to ensure that a campus does not artificially diminish or eliminate performance differentials through inhibiting the achievement of the highest achieving student subpopulation.

(c) In addition to the distinction designations described by Subsections (a) and (b), a campus that satisfies the criteria developed under Section 39.204 shall be awarded a distinction designation by the commissioner for the following programs or the following specific categories of performance:

(1) academic achievement in English language arts, mathematics, science, or social studies;

(2) fine arts;

(3) physical education;

(4) 21st Century Workforce Development program; and

(5) second language acquisition program.

(d) A campus may not be awarded a distinction designation under this subchapter unless the campus is eligible under Section 39.201 and satisfies all performance standards under Section 39.054(d).

Sec. 39.204. CAMPUS DISTINCTION DESIGNATION CRITERIA; COMMITTEES. (a) The commissioner by rule shall establish:

(1) standards for considering campuses for distinction designations under Section 39.203(c); and

(2) methods for awarding distinction designations to campuses.

(b) In adopting rules under this section, the commissioner shall establish a separate committee to develop criteria for each distinction designation under Section 39.203(c).

(c) Each committee established under this section must include:

(1) individuals who practice as professionals in the content area relevant to the distinction designation, as applicable;

(2) individuals with subject matter expertise in the content area relevant to the distinction designation;

(3) educators with subject matter expertise in the content area relevant to the distinction designation; and

(4) community leaders, including leaders from the business community.

(d) For each committee, the governor, lieutenant governor, and speaker of the house of representatives may each appoint a person described by each subdivision of Subsection (c).

(e) In developing criteria for distinction designations under this section, each committee shall:

(1) identify a variety of indicators for measuring excellence; and

(2) consider categories for distinction designations, with criteria relevant to each category, based on:

(A) the level of a program, whether elementary school, middle or junior high school, or high school; and

(B) the student enrollment of a campus.

SUBCHAPTER H [F]. ADDITIONAL REWARDS

Sec. 39.231 [39.111]. RECOGNITION AND REWARDS. The State Board of Education shall develop a plan for recognizing and rewarding school districts and campuses that are rated as exemplary or recognized under Subchapter G and for developing a network for sharing proven successful practices statewide and regionally. The reward may be used to provide educators with summer stipends to develop curricula based on the cited successful strategies. The educators may copyright the curricula they develop.

Sec. 39.232 [39.112]. EXCELLENCE EXEMPTIONS. (a) Except as provided by Subsection (b), a school campus or district that is rated exemplary under Subchapter G is exempt from requirements and prohibitions imposed under this code including rules adopted under this code.

(b) A school campus or district is not exempt under this section from:

(1) a prohibition on conduct that constitutes a criminal offense;

(2) requirements imposed by federal law or rule, including requirements for special education or bilingual education programs; or

(3) a requirement, restriction, or prohibition relating to:

(A) curriculum essential knowledge and skills under Section 28.002 or high school [minimum] graduation requirements under Section 28.025;

(B) public school accountability as provided by Subchapters B, C, D, E, and J [G];

(C) extracurricular activities under Section 33.081;

(D) health and safety under Chapter 38;

(E) purchasing [competitive bidding] under Subchapter B, Chapter 44;

(F) elementary school class size limits, except as provided by Subsection (d) or Section 25.112;

(G) removal of a disruptive student from the classroom under Subchapter A, Chapter 37;

(H) at risk programs under Subchapter C, Chapter 29;

(I) prekindergarten programs under Subchapter E, Chapter 29;

(J) rights and benefits of school employees;

(K) special education programs under Subchapter A, Chapter 29; or

(L) bilingual education programs under Subchapter B, Chapter 29.

(c) The agency shall monitor and evaluate deregulation of a school campus or district under this section and Section 7.056.

(d) The commissioner may exempt an exemplary school campus under Subchapter G from elementary class size limits under this section if the school campus submits to the commissioner a written plan showing steps that will be taken to ensure that the exemption from the class size limits will not be harmful to the academic achievement of the students on the school campus. The commissioner shall review achievement levels annually. The exemption remains in effect until the commissioner determines that achievement levels of the campus have declined.

Sec. 39.233 [39.113]. RECOGNITION OF HIGH SCHOOL COMPLETION AND SUCCESS AND COLLEGE READINESS PROGRAMS. (a) The agency shall:

(1) develop standards for evaluating the success and cost-effectiveness of high school completion and success and college readiness programs implemented under Section 39.234 [39.114];

(2) provide guidance for school districts and campuses in establishing and improving high school completion and success and college readiness programs implemented under Section 39.234 [39.114]; and

(3) develop standards for selecting and methods for recognizing school districts and campuses that offer exceptional high school completion and success and college readiness programs under Section 39.234 [39.114].

(b) The commissioner may adopt rules for the administration of this section.

Sec. 39.234 [39.114]. HIGH SCHOOL ALLOTMENT. (a) Except as provided by Subsection (b), a school district or campus must use funds allocated under Section 42.2516(b)(3) to:

(1) implement or administer a college readiness program that provides academic support and instruction to prepare underachieving students for entrance into an institution of higher education;

(2) implement or administer a program that encourages students to pursue advanced academic opportunities, including early college high school programs and dual credit, advanced placement, and international baccalaureate courses;

(3) implement or administer a program that provides opportunities for students to take academically rigorous course work, including four years of mathematics and four years of science at the high school level;

(4) implement or administer a program, including online course support and professional development, that aligns the curriculum for grades six through 12 with postsecondary curriculum and expectations; or

(5) implement or administer other high school completion and success initiatives in grades six through 12 approved by the commissioner.

(b) A school district may use funds allocated under Section 42.2516(b)(3) on any instructional program in grades six through 12 other than an athletic program if:

(1) the district's measure of progress toward college readiness is determined exceptional by a standard set [district is recognized as exceptional] by the commissioner [under the academic accountability indicator adopted under Section 39.051(b)(13)]; and

(2) the district's completion rates for grades nine through 12 [meet or] exceed completion rate standards required by the commissioner to achieve a status of accredited under Section 39.051 [rating of exemplary under Section 39.072].

(b-1) Subsection (b) applies beginning with the 2008-2009 school year. This subsection expires September 1, 2009.

(c) 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 an open-enrollment charter school.

Sec. 39.235 [39.115]. HIGH SCHOOL INNOVATION GRANT INITIATIVE. (a) From funds appropriated for that purpose, the commissioner may establish a grant program under which grants are awarded to secondary campuses and school districts to support:

(1) the implementation of innovative high school improvement programs that are based on the best available research regarding high school reform, dropout prevention, and preparing students for postsecondary coursework or employment;

(2) enhancing education practices that have been demonstrated by significant evidence of effectiveness; and

(3) the alignment of grants and programs to the strategic plan adopted under Section 39.407 [39.357].

(b) Before awarding a grant under this section, the commissioner may require a campus or school district to:

(1) obtain local matching funds; or

(2) meet other conditions, including developing a personal graduation plan under Section 28.0212 for each student enrolled at the campus or in a district high school.

(c) The commissioner may:

(1) accept gifts, grants, or donations from a private foundation to implement a grant program under this section; and

(2) coordinate gifts, grants, or donations with other available funding to implement a grant program under this section.

(d) The commissioner may use funds appropriated under this section to support technical assistance services for school districts and open-enrollment charter schools to implement a high school improvement program under this section.

Sec. 39.236 [39.116]. INITIATIVE FOR RETAINING QUALITY EDUCATORS. Notwithstanding Section 39.106(b) [39.1324(b)], a school district, to assist in preventing dropouts and disruptions that may result from certain mandatory sanctions, may retain at a campus a principal who has been employed at the campus as a principal during the [two-year] period described by Section 39.106(a) [39.1324(a)] if the students enrolled at the campus have demonstrated a pattern of significant academic improvement.

SUBCHAPTER I [E]. SUCCESSFUL SCHOOL AWARDS

Sec. 39.261 [39.091]. CREATION OF SYSTEM. The Texas Successful Schools Awards System is created to recognize and reward those schools and school districts that demonstrate progress or success in achieving the education goals of the state.

Sec. 39.262 [39.092]. TYPES OF AWARDS. (a) The governor may present a financial award to the schools or districts that the commissioner determines have demonstrated the highest levels of sustained success or the greatest improvement in achieving the education goals. For each student in average daily attendance, each of those schools or districts is entitled to an amount set for the award for which the school or district is selected by the commissioner, subject to any limitation set by the commissioner on the total amount that may be awarded to a school or district.

(b) The governor may present proclamations or certificates to additional schools and districts determined to have met or exceeded the education goals.

(c) The commissioner may establish additional categories of awards and award amounts for a school or district determined to be successful under Subsection (a) or (b) that are contingent on the school's or district's involvement with paired, lower-performing schools.

Sec. 39.263 [39.093]. AWARDS. (a) The criteria that the commissioner shall use to select successful schools and districts must be related to the goals in Section 4.002 and must include consideration of performance on the student achievement [academic excellence] indicators adopted under Section 39.053(c) and consideration of the distinction designation criteria prescribed by or developed under Subchapter G [39.051].

(b) For purposes of selecting schools and districts under Section 39.262(a) [39.092(a)], each school's performance shall be compared to state standards and to its previous performance.

(c) [(b)] The commissioner shall select annually schools and districts qualified to receive successful school awards for their performance and report the selections to the governor and the State Board of Education.

(d) [(c)] The agency shall notify each school district of the manner in which the district or a school in the district may qualify for a successful school award.

Sec. 39.264 [39.094]. USE OF AWARDS. (a) In determining the use of a monetary award received under this subchapter, a school or district shall give priority to academic enhancement purposes. The award may not be used for any purpose related to athletics, and it may not be used to substitute for or replace funds already in the regular budget for a school or district.

(b) The campus-level committee established under Section 11.253 shall determine the use of the funds awarded to a school under this subchapter. The professional staff of the district shall determine the use of the funds awarded to the school district under this subchapter.

Sec. 39.265 [39.095]. FUNDING. The award system may be funded by donations, grants, or legislative appropriations. The commissioner may solicit and receive grants and donations for the purpose of making awards under this subchapter. A small portion of the award funds may be used by the commissioner to pay for the costs associated with sponsoring a ceremony to recognize or present awards to schools or districts under this subchapter. The donations, grants, or legislative appropriations shall be accounted for and distributed by the agency. The awards are subject to audit requirements established by the State Board of Education.

Sec. 39.266 [39.096]. CONFIDENTIALITY. All information and reports received by the commissioner under this subchapter from schools or school districts deemed confidential under Chapter 552, Government Code, are confidential and may not be disclosed in any public or private proceeding.

SUBCHAPTER J. PARENT AND EDUCATOR REPORTS

Sec. 39.301. ADDITIONAL PERFORMANCE INDICATORS: REPORTING. (a) In addition to the indicators adopted under Section 39.053, the commissioner shall adopt indicators of the quality of learning for the purpose of preparing reports under this chapter. The commissioner biennially shall review the indicators for the consideration of appropriate revisions.

(b) Performance on the indicators adopted under this section shall be evaluated in the same manner provided for evaluation of the student achievement indicators under Section 39.053(b).

(c) Indicators for reporting purposes must include:

(1) the percentage of graduating students who meet the course requirements established for the recommended high school program by State Board of Education rule;

(2) the results of the Scholastic Assessment Test (SAT), the American College Test (ACT), articulated postsecondary degree programs described by Section 61.852, and certified workforce training programs described by Chapter 311, Labor Code;

(3) for students who have failed to perform satisfactorily, under each performance standard under Section 39.0241, on an assessment instrument required under Section 39.023(a) or (c), the numerical progress of those students grouped by percentage on subsequent assessment instruments required under those sections, aggregated by grade level and subject area;

(4) the percentage of students, aggregated by grade level, provided accelerated instruction under Section 28.0211(c), the results of assessment instruments administered under that section, the percentage of students promoted through the grade placement committee process under Section 28.0211, the subject of the assessment instrument on which each student failed to perform satisfactorily under each performance standard under Section 39.0241, and the performance of those students in the school year following that promotion on the assessment instruments required under Section 39.023;

(5) the percentage of students exempted, by exemption category, from the assessment program generally applicable under this chapter;

(6) the percentage of students of limited English proficiency exempted from the administration of an assessment instrument under Sections 39.027(a)(3) and (4);

(7) the percentage of students in a special education program under Subchapter A, Chapter 29, assessed through assessment instruments developed or adopted under Section 39.023(b);

(8) the measure of progress toward college readiness;

(9) the measure of progress toward dual language proficiency under Section 39.034(b), for students of limited English proficiency, as defined by Section 29.052;

(10) the percentage of students who enroll and begin instruction at an institution of higher education in the school year following high school graduation; and

(11) the percentage of students who successfully complete the first year of instruction at an institution of higher education without needing a developmental education course.

(d) Performance on the indicators described by Section 39.053(c) and Subsections (c)(3), (4), and (9) must be based on longitudinal student data that is disaggregated by the bilingual education or special language program, if any, in which students of limited English proficiency, as defined by Section 29.052, are or former students of limited English proficiency were enrolled. If a student described by this subsection is not or was not enrolled in specialized language instruction, the number and percentage of those students shall be provided.

(e) Section 39.055 applies in evaluating indicators described by Subsection (c).

Sec. 39.302. REPORT TO DISTRICT: COMPARISONS FOR ANNUAL PERFORMANCE ASSESSMENT. (a) The agency shall report to each school district the comparisons of student performance made under Section 39.034.

(b) To the extent practicable, the agency shall combine the report of comparisons with the report of the student's performance on assessment instruments under Section 39.023.

Sec. 39.303. REPORT TO PARENTS. (a) The school district a student attends shall provide a record of the comparisons made under Section 39.034 and provided to the district under Section 39.302 in a written notice to the student's parent or other person standing in parental relationship.

(b) For a student who failed to perform satisfactorily as determined by the commissioner under Section 39.0241(a) on an assessment instrument administered under Section 39.023(a), (c), or (l), the school district shall include in the notice specific information relating to access to online educational resources at the appropriate assessment instrument content level, including educational resources described by Section 32.252(b)(2) and assessment instruments questions and answers released under Section 39.023(e).

Sec. 39.304. TEACHER REPORT CARD. Each school district shall prepare a report of the comparisons made under Section 39.034 and provided to the district under Section 39.302 and provide the report at the beginning of the school year to each teacher for incoming students who were assessed on an assessment instrument under Section 39.023.

Sec. 39.305 [39.052]. CAMPUS REPORT CARD. (a) Each school year, the agency shall prepare and distribute to each school district a report card for each campus. The campus report cards must be based on the most current data available disaggregated by student groups. Campus performance must be compared to previous campus and district performance, current district performance, and state established standards[, and comparable campus group performance].

(b) The report card shall include the following information:

(1) where applicable, the student achievement indicators described by Section 39.053(c) and the reporting indicators described by Sections 39.301(c)(1) through (4) [academic excellence indicators adopted under Sections 39.051(b)(1) through (10)];

(2) average class size by grade level and subject;

(3) the administrative and instructional costs per student, computed in a manner consistent with Section 44.0071; and

(4) the district's instructional expenditures ratio and instructional employees ratio computed under Section 44.0071, and the statewide average of those ratios, as determined by the commissioner.

(c) The commissioner shall adopt rules requiring dissemination of the information required under Subsection (b)(4) and appropriate class size and student performance portions of campus report cards annually to the parent, guardian, conservator, or other person having lawful control of each student at the campus. On written request, the school district shall provide a copy of a campus report card to any other party.

Sec. 39.306 [39.053]. PERFORMANCE REPORT. (a) Each board of trustees shall publish an annual report describing the educational performance of the district and of each campus in the district that includes uniform student performance and descriptive information as determined under rules adopted by the commissioner. The annual report must also include:

(1) campus performance objectives established under Section 11.253 and the progress of each campus toward those objectives, which shall be available to the public;

(2) information indicating the district's accreditation status and identifying each district campus awarded a distinction designation under Subchapter G or considered a low-performing campus under Subchapter E [the performance rating for the district as provided under Section 39.072(a) and the performance rating of each campus in the district as provided under Section 39.072(c)];

(3) the district's current special education compliance status with the agency;

(4) a statement of the number, rate, and type of violent or criminal incidents that occurred on each district campus, to the extent permitted under the Family Educational Rights and Privacy Act of 1974 (20 U.S.C. Section 1232g);

(5) information concerning school violence prevention and violence intervention policies and procedures that the district is using to protect students; [and]

(6) the findings that result from evaluations conducted under the Safe and Drug-Free Schools and Communities Act of 1994 (20 U.S.C. Section 7101 et seq.) [and its subsequent amendments]; and

(7) information received under Section 51.403(e) for each high school campus in the district, presented in a form determined by the commissioner.

(b) Supplemental information to be included in the reports shall be determined by the board of trustees. Performance information in the annual reports on the indicators described by Sections 39.053 and 39.301 [established under Section 39.051] and descriptive information required by this section shall be provided by the agency.

(c) The board of trustees shall hold a hearing for public discussion of the report. The board of trustees shall give notice of the hearing to property owners in the district and parents of and other persons standing in parental relation to[, guardians, conservators, and other persons having lawful control of] a district student. The notification must include notice to a newspaper of general circulation in the district and notice to electronic media serving the district. After the hearing the report shall be widely disseminated within the district in a manner to be determined under rules adopted by the commissioner.

(d) The report must also include a comparison provided by the agency of:

(1) the performance of each campus to its previous performance and to state-established standards; and

(2) the performance of each district to its previous performance and to state-established standards[; and

[(3) the performance of each campus or district to comparable improvement].

(e) The report may include the following information:

(1) student information, including total enrollment, enrollment by ethnicity, socioeconomic status, and grade groupings and retention rates;

(2) financial information, including revenues and expenditures;

(3) staff information, including number and type of staff by sex [gender], ethnicity, years of experience, and highest degree held, teacher and administrator salaries, and teacher turnover;

(4) program information, including student enrollment by program, teachers by program, and instructional operating expenditures by program; and

(5) the number of students placed in a disciplinary alternative education program under Chapter 37.

(f) The commissioner [State Board of Education] by rule shall authorize the combination of this report with other reports and financial statements and shall restrict the number and length of reports that school districts, school district employees, and school campuses are required to prepare.

(g) The report must include a statement of the amount, if any, of the school district's unencumbered surplus fund balance as of the last day of the preceding fiscal year and the percentage of the preceding year's budget that the surplus represents.

Sec. 39.307 [39.054]. USES OF PERFORMANCE REPORT. The information required to be reported under Section 39.306 [39.053] shall be:

(1) the subject of public hearings or meetings required under Sections 11.252, 11.253, and 39.306 [39.053];

(2) a primary consideration in school district and campus planning; and

(3) a primary consideration of:

(A) the State Board of Education in the evaluation of the performance of the commissioner;

(B) the commissioner in the evaluation of the performance of the directors of the regional education service centers;

(C) the board of trustees of a school district in the evaluation of the performance of the superintendent of the district; and

(D) the superintendent in the evaluation of the performance of the district's campus principals.

Sec. 39.308 [39.055]. ANNUAL AUDIT OF DROPOUT RECORDS; REPORT. (a) The commissioner shall develop a process for auditing school district dropout records electronically. The commissioner shall also develop a system and standards for review of the audit or use systems already available at the agency. The system must be designed to identify districts that are at high risk of having inaccurate dropout records and that, as a result, require on-site monitoring of dropout records.

(b) If the electronic audit of a school district's dropout records indicates that a district is not at high risk of having inaccurate dropout records, the district may not be subject to on-site monitoring under this subsection.

(c) If the risk-based system indicates that a school district is at high risk of having inaccurate dropout records, the district is entitled to an opportunity to respond to the commissioner's determination before on-site monitoring may be conducted. The district must respond not later than the 30th day after the date the commissioner notifies the district of the commissioner's determination. If the district's response does not change the commissioner's determination that the district is at high risk of having inaccurate dropout records or if the district does not respond in a timely manner, the commissioner shall order agency staff to conduct on-site monitoring of the district's dropout records.

(d) [(e)] The commissioner shall notify the board of trustees of a school district of any objection the commissioner has to the district's dropout data, any violation of sound accounting practices or of a law or rule revealed by the data, or any recommendation by the commissioner concerning the data. If the data reflect that a penal law has been violated, the commissioner shall notify the county attorney, district attorney, or criminal district attorney, as appropriate, and the attorney general.

(e) The commissioner is entitled to access to all district records the commissioner considers necessary or appropriate for the review, analysis, or approval of district dropout data.

SUBCHAPTER K [H]. REPORTS BY TEXAS EDUCATION AGENCY

Sec. 39.331 [39.181]. GENERAL REQUIREMENTS. (a) Each report required by this subchapter must:

(1) unless otherwise specified, contain summary information and analysis only, with an indication that the agency will provide the data underlying the report on request;

(2) specify a person at the agency who may be contacted for additional information regarding the report and provide the person's telephone number; and

(3) identify other sources of related information, indicating the level of detail and format of information that may be obtained, including the availability of any information on the Texas Education Network.

(b) Each component of a report required by this subchapter must:

(1) identify the substantive goal underlying the information required to be reported;

(2) analyze the progress made and longitudinal trends in achieving the underlying substantive goal;

(3) offer recommendations for improved progress in achieving the underlying substantive goal; and

(4) identify the relationship of the information required to be reported to state education goals.

(c) Unless otherwise provided, each report required by this subchapter is due not later than December 1 of each even-numbered year.

(d) Subsections (a) and (b) apply to any report required by statute that the agency or the State Board of Education must prepare and deliver to the governor, lieutenant governor, speaker of the house of representatives, or legislature.

(e) Unless otherwise provided by law, any report required by statute that the agency or the State Board of Education must prepare and deliver to the governor, lieutenant governor, speaker of the house of representatives, or legislature may be combined, at the discretion of the commissioner, with a report required by this subchapter.

Sec. 39.332 [39.182]. COMPREHENSIVE ANNUAL REPORT. (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 the information described by Subsection (b).[:]

(b)(1) The report must contain 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) The report must contain an evaluation of the status of education in the state as reflected by:

(A) the student achievement [academic excellence] indicators described by [adopted under] Section 39.053 [39.051]; and

(B) the reporting indicators described by Section 39.301.

(3) The report must contain 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) The report must contain 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) The report must contain 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) The report must contain an evaluation of the correlation between student grades and student performance on academic skills assessment instruments required by Section 39.023.[;]

(7) The report must contain 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) The report must contain 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) The report must contain 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) The report must contain 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) The report must contain 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) The report must contain 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) The report must contain 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) The report must contain 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) The report must contain a description of all funds received by and each activity and expenditure of the agency.[;]

(16) The report must contain a summary and analysis of the instructional expenditures ratios and instructional employees ratios of school districts computed under Section 44.0071.[;]

(17) The report must contain a summary of the effect of deregulation, including exemptions and waivers granted under Section 7.056 or 39.232. [39.112;]

(18) The report must contain 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) The report must contain 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) The report must contain a comparison of the performance of open-enrollment charter schools and school districts on the student achievement [academic excellence] indicators described by Section 39.053(c), the reporting indicators described by Section 39.301(c), [specified in Section 39.051(b)] and the accountability measures adopted under Section 39.053(i) [39.051(g)], with a separately aggregated comparison of the performance of open-enrollment charter schools predominantly serving students at risk of dropping out of school, as described [defined] by Section 29.081(d), with the performance of school districts.[;]

(21) The report must contain a summary of the information required by Section 38.0141 regarding student health and physical activity from each school district.[;]

(22) The report must contain a summary compilation of overall student performance under the assessment system developed to evaluate the longitudinal academic progress as required by Section 39.027(e), disaggregated by bilingual education or special language program instructional model, if any.[; and]

(23) The report must contain any additional information considered important by the commissioner or the State Board of Education.

(c) [(b)] In reporting the information required by Subsection (b)(3) or (4) [(a)(3) or (4)], the agency may separately aggregate the performance data of students enrolled in a special education program under Subchapter A, Chapter 29.

(d) [(b-1)] In reporting the information required by Subsections (b)(3), (5), and (7) [(a)(3), (5), and (7)], the agency shall separately aggregate the longitudinal performance data of all students identified as students of limited English proficiency, as defined by Section 29.052, or former students of limited English proficiency, disaggregated by bilingual education or special language program instructional model, if any, in which the students are or were enrolled.

(e) [(c)] Each report must contain the most recent data available.

Sec. 39.333 [39.183]. REGIONAL AND DISTRICT LEVEL REPORT. 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 regional and district level report covering the preceding two school years and containing:

(1) a summary of school district compliance with the student/teacher ratios and class-size limitations prescribed by Sections 25.111 and 25.112, including:

(A) the number of campuses and classes at each campus granted an exception from Section 25.112; and

(B) for [the performance rating under Subchapter D of] each campus granted an exception from Section 25.112, a statement of whether the campus has been awarded a distinction designation under Subchapter G or has been identified as a low-performing campus under Subchapter E;

(2) a summary of the exemptions and waivers granted to campuses and school districts under Section 7.056 or 39.232 [39.112] and a review of the effectiveness of each campus or district following deregulation;

(3) an evaluation of the performance of the system of regional education service centers based on the indicators adopted under Section 8.101 and client satisfaction with services provided under Subchapter B, Chapter 8;

(4) an evaluation of accelerated instruction programs offered under Section 28.006, including an assessment of the quality of such programs and the performance of students enrolled in such programs; and

(5) the number of classes at each campus that are currently being taught by individuals who are not certified in the content areas of their respective classes.

Sec. 39.334 [39.184]. TECHNOLOGY REPORT. 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 technology report covering the preceding two school years and containing information on the status of the implementation of and revisions to the long-range technology plan required by Section 32.001, including the equity of the distribution and use of technology in public schools.

Sec. 39.335 [39.185]. INTERIM REPORT. Not later than December 1 of each odd-numbered 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 an interim report containing, for the previous school year, the information required by Section 39.333(2) [39.183(2)].

SUBCHAPTER L [J]. NOTICE OF PERFORMANCE

Sec. 39.361 [39.251]. NOTICE IN STUDENT GRADE REPORT. The first written notice of a student's performance that a school district gives during a school year as required by Section 28.022(a)(2) must include [the following information]:

(1) a statement of whether the campus at which the student is enrolled has been awarded a distinction designation under Subchapter G or has been identified as a low-performing campus under Subchapter E [the most recent performance rating of the campus at which the student is enrolled, as determined under Section 39.072]; and

(2) an explanation of the significance of the information provided under Subdivision (1) [a definition and explanation of each performance rating described by Section 39.072(a)].

Sec. 39.362 [39.252]. NOTICE ON DISTRICT WEBSITE. Not later than the 10th day after the first day of instruction of each school year, a school district that maintains an Internet website shall make the following information available to the public on the website:

(1) the information contained in the most recent campus report card for each campus in the district[, as determined] under Section 39.305 [39.052];

(2) the information contained in the most recent performance report for the district[, as determined] under Section 39.306 [39.053];

(3) the most recent accreditation status [performance rating] of the district[, as determined] under Section 39.052 [39.072]; and

(4) a definition and explanation of each accreditation status under [performance rating described by] Section 39.051, based on commissioner rule adopted under that section [39.072(a)].

SUBCHAPTER M [L]. HIGH SCHOOL COMPLETION AND SUCCESS INITIATIVE

Sec. 39.401 [39.351]. DEFINITION. In this subchapter, "council" means the High School Completion and Success Initiative Council.

Sec. 39.402 [39.352]. HIGH SCHOOL COMPLETION AND SUCCESS INITIATIVE COUNCIL. (a) The High School Completion and Success Initiative Council is established to identify strategic priorities for and make recommendations to improve the effectiveness, coordination, and alignment of high school completion and college and workforce readiness efforts.

(b) The council is composed of:

(1) the commissioner of education;

(2) the commissioner of higher education; and

(3) seven members appointed by the commissioner of education.

(c) In making appointments required by Subsection (b)(3), the commissioner of education shall appoint:

(1) three members from a list of nominations provided by the governor;

(2) two members from a list of nominations provided by the lieutenant governor; and

(3) two members from a list of nominations provided by the speaker of the house of representatives.

(d) In making nominations under Subsection (c), the governor, lieutenant governor, and speaker of the house of representatives shall nominate persons who have distinguished experience in:

(1) developing and implementing high school reform strategies; and

(2) promoting college and workforce readiness.

Sec. 39.403 [39.353]. TERMS. Members of the council appointed under Section 39.402(b)(3) [39.352(b)(3)] serve terms of two years and may be reappointed for additional terms.

Sec. 39.404 [39.354]. PRESIDING OFFICER. The commissioner of education serves as the presiding officer of the council.

Sec. 39.405 [39.355]. COMPENSATION AND REIMBURSEMENT. A member of the council is not entitled to compensation for service on the council but is entitled to reimbursement for actual and necessary expenses incurred in performing council duties.

Sec. 39.406 [39.356]. COUNCIL STAFF AND FUNDING. (a) Except as otherwise provided, staff members of the agency, with the assistance of the Texas Higher Education Coordinating Board, shall provide administrative support for the council.

(b) Funding for the administrative and operational expenses of the council shall be provided by appropriation to the agency for that purpose and by gifts, grants, and donations solicited and accepted by the agency for that purpose.

Sec. 39.407 [39.357]. STRATEGIC PLAN. (a) The council shall adopt a strategic plan under this subchapter to:

(1) specify strategies to identify, support, and expand programs to improve high school completion rates and college and workforce readiness;

(2) establish specific goals with which to measure the success of the strategies identified under Subdivision (1) in improving high school completion rates and college and workforce readiness;

(3) identify strategies for alignment and coordination of federal and other funding sources that may be pursued for high school reform, dropout prevention, and preparation of students for postsecondary coursework or employment; and

(4) identify key objectives for appropriate research and program evaluation conducted as provided by this subchapter.

(b) The commissioner of education and the commissioner of higher education shall adopt rules as necessary to administer the strategic plan adopted by the council under this section.

(c) The commissioner of education or the commissioner of higher education may not, in a manner inconsistent with the strategic plan, spend money, award a grant, or enter into a contract in connection with a program relating to high school success and completion.

Sec. 39.408 [39.358]. ELIGIBILITY CRITERIA FOR CERTAIN GRANT PROGRAMS. A school district or campus is eligible to participate in programs under Sections 21.4541, 29.095, 29.096, 29.097, and 29.098 if the district or campus exhibited during each of the three preceding school years characteristics that strongly correlate with high dropout rates.

Sec. 39.409 [39.359]. PRIVATE FOUNDATION PARTNERSHIPS. (a) The commissioner of education or the commissioner of higher education, as appropriate, and the council may coordinate with private foundations that have made a substantial investment in the improvement of high schools in this state to maximize the impact of public and private investments.

(b) A private foundation is not required to obtain the approval of the appropriate commissioner or the council under Subsection (a) before allocating resources to a school in this state.

Sec. 39.410 [39.360]. GRANT PROGRAM EVALUATION. (a) The commissioner of education shall annually set aside not more than five percent of the funds appropriated for high school completion and success to contract for the evaluation of programs supported by grants approved under this subchapter. In awarding a contract under this subsection, the commissioner shall consider centers for education research established under Section 1.005.

(b) A person who receives a grant approved under this subchapter must consent to an evaluation under this section as a condition of receiving the grant.

(c) The commissioner shall ensure that an evaluation conducted under this section includes an assessment of whether student achievement has improved. Results of the evaluation shall be provided through the online clearinghouse of information relating to the best practices of campuses and school districts established under Section 7.009.

Sec. 39.411 [39.361]. COUNCIL RECOMMENDATIONS. (a) Based on the strategic plan adopted under this subchapter [section], the council shall make recommendations to the commissioner of education or the commissioner of higher education, as applicable, for the use of federal and state funds appropriated or received for high school reform, college readiness, and dropout prevention, including grants awarded under Sections 21.4511, 21.4541, 29.095-29.098, 29.917, 29.919, and 39.235 [39.115].

(b) The council shall include recommendations under this section for:

(1) key elements of program design;

(2) criteria for awarding grants and evaluating programs;

(3) program funding priorities; and

(4) program evaluation as provided by this subchapter.

(c) The commissioner of education or the commissioner of higher education, as applicable, shall consider the council's recommendations and based on those recommendations may award grants to school districts, open-enrollment charter schools, institutions of higher education, regional education service centers, and nonprofit organizations to meet the goals of the council's strategic plan.

(d) The commissioner of education or the commissioner of higher education, as applicable:

(1) is not required under this section to allocate funds to a program or initiative recommended by the council; and

(2) may not initiate a program funded under this section that does not conform to the recommended use of funds as provided under Subsections (a) and (b).

Sec. 39.412 [39.362]. FUNDING PROVIDED TO SCHOOL DISTRICTS. From funds appropriated, the commissioner of education may provide funding to school districts to permit a school district to obtain technical assistance in preparing a grant proposal for a grant program administered under this subchapter.

Sec. 39.413 [39.363]. FUNDING FOR CERTAIN PROGRAMS. (a) From funds appropriated, the Texas Higher Education Coordinating Board shall allocate $8.75 million each year to establish mathematics, science, and technology teacher preparation academies under Section 21.462 and implement and administer the program under Section 29.098.

(b) The Texas Higher Education Coordinating Board shall establish mathematics, science, and technology teacher preparation academies under Section 21.462 and implement and administer the program under Section 29.098 in a manner consistent with the goals of this subchapter and the goals in "Closing the Gaps," the state's master plan for higher education.

Sec. 39.414 [39.364]. PRIVATE FUNDING. The commissioner of education or the commissioner of higher education, as appropriate, may accept gifts, grants, or donations to fund a grant administered under this subchapter.

Sec. 39.415 [39.365]. REPORTS. (a) Not later than December 1 of each even-numbered year, the agency shall prepare and deliver a report to the legislature that recommends any statutory changes the council considers appropriate to promote high school completion and college and workforce readiness.

(b) Not later than March 1 and September 1 of each year, the commissioner of education shall prepare and deliver a progress report to the presiding officers of the standing committees of each house of the legislature with primary jurisdiction over public education, the Legislative Budget Board, and the Governor's Office of Policy and Planning on:

(1) the implementation of Sections 7.031, 21.4511, 21.4541, 21.462, 28.008(d-1), 28.0212(d), 29.095-29.098, 29.911, 29.917-29.919, and 39.235 [39.115] and this subchapter;

(2) the programs supported by grants approved under this subchapter; and

(3) the alignment of grants and programs to the strategic plan adopted under Section 39.407 [39.357].

Sec. 39.416 [39.366]. RULES. The commissioner of education and the commissioner of higher education shall adopt rules as necessary to administer this subchapter and any programs under the authority of the commissioner of education or the commissioner of higher education and the council under this subchapter.

SECTION 22. Section 51.3062, Education Code, is amended by adding Subsections (i-1) and (q-1) to read as follows:

(i-1) The commissioner of higher education may by rule require an institution of higher education to adopt uniform standards for the placement of a student under this section.

(q-1) A student who has completed a recommended or advanced high school program as determined under Section 28.025 and demonstrated the performance standard for college readiness as provided by Section 39.024 on the Algebra II and English III end-of-course assessment instruments is exempt from the requirements of this section with respect to those content areas. The commissioner of higher education by rule shall establish the period for which an exemption under this subsection is valid.

SECTION 23. Section 51.807, Education Code, as amended by Chapters 941 (H.B. 3826) and 1369 (H.B. 3851), Acts of the 80th Legislature, Regular Session, 2007, is reenacted to read as follows:

Sec. 51.807. RULEMAKING. (a) The Texas Higher Education Coordinating Board may adopt rules relating to the operation of admissions programs under this subchapter, including rules relating to the identification of eligible students.

(b) The Texas Higher Education Coordinating Board, after consulting with the Texas Education Agency, by rule shall establish standards for determining for purposes of this subchapter:

(1) whether a private high school is accredited by a generally recognized accrediting organization; and

(2) whether a person completed a high school curriculum that is equivalent in content and rigor to the curriculum requirements established under Section 28.025 for the recommended or advanced high school program.

SECTION 24. Chapter 61, Education Code, is amended by adding Subchapter T-1 to read as follows:

SUBCHAPTER T-1. CAREER AND TECHNICAL EDUCATION

Sec. 61.861. DEVELOPMENT OF MATHEMATICS AND SCIENCE COURSES FOR HIGH-DEMAND OCCUPATIONS. (a) The commissioner of higher education and the commissioner of education, in consultation with the comptroller and the Texas Workforce Commission, may award a grant in an amount not to exceed $1 million to an institution of higher education to develop advanced mathematics and science courses to prepare high school students for employment in a high-demand occupation. The commissioner of higher education, the commissioner of education, the comptroller, and the Texas Workforce Commission shall jointly determine what is considered a high-demand occupation for purposes of this subchapter.

(b) An institution of higher education shall work in partnership with at least one independent school district and a business entity in developing a course for purposes of this section.

(c) A course developed for purposes of this section must:

(1) provide content that enables a student to develop the relevant and critical skills needed to be prepared for employment or additional training in a high-demand occupation;

(2) incorporate college and career readiness skills as part of the curriculum;

(3) be offered for dual credit; and

(4) satisfy a mathematics or science requirement under the recommended or advanced high school program as determined under Section 28.025.

(d) An institution of higher education shall periodically review and revise the curriculum for a course developed for purposes of this section to accommodate changes in industry standards for the high-demand occupation.

Sec. 61.862. GRANT APPLICATION CRITERIA. The commissioner of higher education and the commissioner of education, in consultation with the comptroller and the Texas Workforce Commission, shall establish application criteria for a grant under this subchapter and in making an award, shall give priority to courses that:

(1) will prepare students for high-demand, high-wage, and high-skill occupations and further postsecondary study;

(2) may be transferred as college credit to multiple institutions of higher education; and

(3) are developed as part of a sequence of courses that includes statewide availability of the instructional materials and training for the courses at a nominal cost to public educational institutions in this state.

Sec. 61.863. USE OF FUNDS. An institution of higher education may use funds awarded under this section to develop, in connection with a course described by Section 61.861:

(1) curriculum;

(2) assessments;

(3) instructional materials, including technology-based supplemental materials; or

(4) professional development programs for secondary grade-level teachers teaching a course described by Section 61.861.

Sec. 61.864. REVIEW OF COURSES. Courses developed for which a grant is awarded under this subchapter shall be reviewed by the commissioner of higher education and the commissioner of education, in consultation with the comptroller and the Texas Workforce Commission, once every four years to determine whether the course:

(1) is being used by public educational institutions in this state;

(2) prepares high school students with the skills necessary for employment in the high-demand occupation and further postsecondary study; and

(3) satisfies a mathematics or science requirement for the recommended or advanced high school program as determined under Section 28.025.

Sec. 61.865. MATCHING CONTRIBUTION REQUIRED. An institution of higher education awarded a grant under this subchapter must obtain from one or more business entities in the industry for which students taking courses developed under Section 61.861 are training, in a total amount equal to the amount of the state grant:

(1) gifts, grants, or donations of funds; or

(2) contributions of property that may be used in providing the courses.

Sec. 61.866. LIMITATION ON TOTAL AMOUNT OF GRANTS. In any state fiscal biennium, the total amount of grants awarded under this subchapter may not exceed $10 million.

Sec. 61.867. FUNDING OF GRANTS. The commissioner of higher education shall administer this section using available appropriations and gifts, grants, and donations made for the purposes of this subchapter.

SECTION 25. The following provisions of the Education Code are repealed:

(1) Subsections (e), (f), and (g), Section 39.034; and

(2) Section 44.011.

SECTION 26. (a) Not later than December 1, 2010, the Texas Education Agency shall prepare and deliver to the governor, the lieutenant governor, the speaker of the house of representatives, each member of the legislature, the clerks of the standing committees of the senate and the house of representatives with primary jurisdiction over public education, and the Legislative Budget Board a transition plan containing the information described by Subsections (b) and (c) of this section.

(b) The transition plan referred to in Subsection (a) of this section must contain a detailed description of the process the commissioner of education will use to develop and implement this Act, including:

(1) the timeline;

(2) the means by which public school educators who are representative of this state and other stakeholders, including parents of public primary and secondary school students, and business and community leaders, will be included in the process to develop and implement this Act, in accordance with Subdivision (11), Subsection (b), Section 7.055, Education Code;

(3) the resources required to implement this Act, including resources that may be required by districts and campuses;

(4) the scope and sequence of tasks that must be accomplished to implement this Act; and

(5) the use of the standard rulemaking process to adopt any procedures necessary to implement this Act.

(c) Except as provided by this subsection, the transition plan referred to in Subsection (a) of this section must provide for the implementation during the 2011-2012 school year of changes made by this Act to the accreditation and academic accountability system. The assignment of accreditation statuses and any other academic accountability designations under this Act must be implemented beginning with the 2012-2013 school year.

SECTION 27. To the extent of any conflict, the reenactment by this Act of Section 51.807, Education Code, prevails over another Act of the 81st Legislature, Regular Session, 2009, relating to nonsubstantive additions to and corrections in enacted codes.

SECTION 28. (a) Except as provided by Subsection (b) of this section, this Act applies beginning with the 2009-2010 school year.

(b) Subchapter E, Chapter 39, Education Code, as amended by this Act, applies as provided by the transition plan adopted by the commissioner of education under Section 39.115, Education Code, as added by this Act.

SECTION 29. 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.

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