87R2892 BDP-D
 
  By: González of El Paso H.B. No. 684
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the regulation of open-enrollment charter schools and
  requiring a study comparing and evaluating certain characteristics
  of open-enrollment charter schools and school districts.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Subchapter C, Chapter 7, Education Code, is
  amended by adding Section 7.066 to read as follows:
         Sec. 7.066.  OPEN-ENROLLMENT CHARTER SCHOOL IMPACT REPORT.  
  (a)  The commissioner shall conduct a study to evaluate:
               (1)  the relative enrollment characteristics of
  open-enrollment charter schools and school districts; and
               (2)  the financial impact of open-enrollment charter
  schools on school districts required to take action under Chapter
  49 to reduce the districts' local revenue levels.
         (b)  Each school district and open-enrollment charter school
  shall submit to the commissioner any information, including
  information that is disaggregated with respect to designated
  categories, required by the commissioner to conduct the study under
  this section.
         (c)  The study must:
               (1)  compare open-enrollment charter schools to school
  districts with respect to the number of enrolled students who are:
                     (A)  eligible under Section 29.003 to participate
  in special education services;
                     (B)  identified as economically disadvantaged; or
                     (C)  placed in a disciplinary alternative
  education program or expelled; and
               (2)  examine the financial impact of open-enrollment
  charter schools on school districts required to take action under
  Chapter 49 to reduce the districts' local revenue levels by:
                     (A)  considering:
                           (i)  the adequacy of school and district
  educators and other employees necessary to achieve the state policy
  under Section 48.001; 
                           (ii)  school and district performance,
  including student performance; and
                           (iii)  student demographics, including
  race, sex, ethnicity, and national origin; and
                     (B)  determining whether open-enrollment charter
  schools affect the standard of neutrality described by Section
  48.001(b) with respect to:
                           (i)  property wealth per weighted student;
                           (ii)  revenue per weighted student;
                           (iii)  tax effort; and
                           (iv)  revenue per cent of tax effort.
         (d)  Not later than December 1, 2022, the commissioner shall
  prepare and submit to the governor, the lieutenant governor, the
  speaker of the house of representatives, and the presiding officer
  of each legislative standing committee with primary jurisdiction
  over primary and secondary education a written report containing
  the results of the study and any recommendations for legislative or
  other action.
         (e)  The commissioner shall adopt rules to administer this
  section, including rules:
               (1)  providing guidance regarding the format and manner
  for the submission of information under Subsection (b); and
               (2)  ensuring that reporting under this section
  complies with federal law regarding confidentiality of student
  medical or educational information, including the Health Insurance
  Portability and Accountability Act of 1996 (42 U.S.C. Section 1320d
  et seq.) and the Family Educational Rights and Privacy Act of 1974
  (20 U.S.C. Section 1232g), and any state law relating to the privacy
  of student information.
         (f)  This section expires September 1, 2023.
         SECTION 2.  Section 12.101, Education Code, is amended by
  amending Subsections (b-1) and (b-2) and adding Subsections (b-11)
  and (b-12) to read as follows:
         (b-1)  Beginning September 1, 2021, and except as provided by
  Subsection (b-11) [In granting charters for open-enrollment
  charter schools], the commissioner may not:
               (1)  grant a charter for an open-enrollment charter
  school, including a school operating only a full-time online
  program [a total of more than:
               [(1)  215 charters through the fiscal year ending
  August 31, 2014]; or
               (2)  approve an expansion amendment under Section
  12.114 [225 charters beginning September 1, 2014;
               [(3)  240 charters beginning September 1, 2015;
               [(4)  255 charters beginning September 1, 2016;
               [(5)  270 charters beginning September 1, 2017; and
               [(6)  285 charters beginning September 1, 2018].
         (b-2)  Beginning September 1, 2023 [2019], the total number
  of charters for open-enrollment charter schools that may be granted
  is 305 charters.
         (b-11)  Subsection (b-1) does not apply to a charter for an
  open-enrollment charter school that:
               (1)  is designated as a dropout recovery school under
  Section 12.1141(c);
               (2)  specializes in one or more performing arts; or
               (3)  provides combined services for an adult education
  program and a high school dropout recovery program under Section
  12.137.
         (b-12)  Subsections (b-1) and (b-11) and this subsection
  expire September 1, 2023.
         SECTION 3.  Section 12.1011(a), Education Code, is amended
  to read as follows:
         (a)  Notwithstanding Section 12.101(b) and beginning
  September 1, 2023, the commissioner may grant a charter for an
  open-enrollment charter school to an applicant that is:
               (1)  an eligible entity under Section 12.101(a)(3) that
  proposes to operate the charter school program of a charter
  operator that operates one or more charter schools in another state
  and with which the eligible entity is affiliated and, as determined
  by the commissioner in accordance with commissioner rule, has
  performed at a level of performance comparable to performance under
  the highest or second highest performance rating category under
  Subchapter C, Chapter 39; or
               (2)  an entity that has operated one or more charter
  schools established under this subchapter or Subchapter C or E and,
  as determined by the commissioner in accordance with commissioner
  rule, has performed in the highest or second highest performance
  rating category under Subchapter C, Chapter 39.
         SECTION 4.  Section 12.1012, Education Code, is amended by
  adding Subdivision (1-a) to read as follows:
               (1-a)  "Expansion amendment" means an amendment to the
  charter of an open-enrollment charter school that permits the
  school to increase its maximum allowable enrollment, extend the
  grade levels it serves, change its geographic boundaries, or add a
  campus or site.
         SECTION 5.  Section 12.107(a), Education Code, is amended to
  read as follows:
         (a)  Funds received under Section 12.106 after September 1,
  2001, by a charter holder:
               (1)  are considered to be public funds for all purposes
  under state law;
               (2)  are held in trust by the charter holder for the
  benefit of the students of the open-enrollment charter school;
               (3)  may be used only for a purpose for which a school
  may use local funds under Section 45.105(c);
               (4)  pending their use, must be deposited into a bank,
  as defined by Section 45.201, with which the charter holder has
  entered into a depository contract; and
               (5)  may not:
                     (A)  be pledged or used:
                           (i)  to secure loans or bonds for any other
  organization, including a non-charter operation or out-of-state
  operation conducted by the charter holder or a related party, as
  defined by commissioner rule adopted under Section 12.1166; or
                           (ii)  for marketing, advertising, or other
  activities to promote the charter holder or the open-enrollment
  charter school; or
                     (B)  be used to support an operation or activity
  not related to the educational activities of the charter holder.
         SECTION 6.  Effective September 1, 2023, Section 12.110,
  Education Code, is amended by adding Subsection (d-1) to read as
  follows:
         (d-1)  The commissioner shall deny an application for a
  charter for an open-enrollment charter school from an applicant
  that has submitted three or more applications for a charter under
  this section and has not received approval.
         SECTION 7.  Section 12.1101, Education Code, is amended to
  read as follows:
         Sec. 12.1101.  NOTIFICATION OF CHARTER APPLICATION [OR
  ESTABLISHMENT OF CAMPUS].  The commissioner by rule shall adopt a
  procedure for providing notice to the following persons on receipt
  by the commissioner of an application for a charter for an
  open-enrollment charter school under Section 12.110 [or of notice
  of the establishment of a campus as authorized under Section
  12.101(b-4)]:
               (1)  the superintendent and the board of trustees of
  each school district from which the proposed open-enrollment
  charter school [or campus] is likely to draw students, as
  determined by the commissioner; and
               (2)  each member of the legislature that represents the
  geographic area to be served by the proposed school [or campus], as
  determined by the commissioner.
         SECTION 8.  Effective September 1, 2023, Section 12.114,
  Education Code, is amended by amending Subsection (a) and adding
  Subsection (a-1) to read as follows:
         (a)  A revision of a charter of an open-enrollment charter
  school may be made only with the approval of the commissioner, in
  coordination with a member of the State Board of Education
  designated for the purpose by the chair of the board.
         (a-1)  The commissioner shall notify the State Board of
  Education of each request for revision the commissioner proposes to
  grant under this subchapter.
         SECTION 9.  Section 12.131, Education Code, is amended by
  adding Subsection (d) to read as follows:
         (d)  The commissioner by rule shall establish reporting
  procedures to require the governing body of an open-enrollment
  charter school to annually report to the commissioner information
  consistent with the information described by Section 37.020
  regarding each student placement in a disciplinary alternative
  education program and each student expulsion or out-of-school
  suspension.
         SECTION 10.  Sections 12.101(b-4) and (b-10), Education
  Code, are repealed.
         SECTION 11.  (a)  Section 12.110(d-1), Education Code, as
  added by this Act, and Section 12.114, Education Code, as amended by
  this Act, apply only to an application for a charter for an
  open-enrollment charter school or a request for approval of a
  revision to the charter of an open-enrollment charter school
  submitted on or after September 1, 2023.
         (b)  As soon as practicable after the effective date of this
  Act, the commissioner of education shall adopt rules necessary to
  implement the changes in law made by this Act.
         SECTION 12.  Except as otherwise provided by this Act, this
  Act takes effect September 1, 2021.