Proposed §100.1029. Agency Audits, Monitoring, and Investigations.

Comment. ACE and HCJJCS suggested that the term "cooperation" in §100.1029(b) and (c) is vague and ambiguous, and that wording similar to "failure to comply with lawful requests issued under regulatory functions within a reasonable period of time" or "obstruction of regulatory functions" be substituted.

Agency Response. The agency agrees, in part, with the comment. Section 100.1029(b) and (c) has been modified to replace the word "cooperation" in the final sentence with "failure to comply with lawful requests, directives, or other agency actions."

Proposed §100.1031. Renewal.

Comment. TCTA expressed appreciation that proposed §100.1031(b) speaks to the fact that renegotiation of contracts is not permissible upon renewal of a contract and that all contracts are subject to and incorporate the most current version of existing rules and regulations.

Agency Response. No response required.

Comment. TCTA stated that the second sentence of §100.1031(b) is unclear, and recommended that the language state that renegotiation of contracts is not permissible upon renewal of a contract and that all contracts are subject to and incorporate the most current version of existing rules and regulations.

Agency Response. The agency agrees, in part, with the comment. Section 100.1031(b) has been modified to provide that an amendment or renewal of a contract may only be negotiated upon renewal if required by the commissioner under §100.1031(c).

Comment. ACE and HCJJCS recommended that in §100.1031(b), the following introductory clause should be added to the first sentence: "Except as provided in law or in these rules."

Agency Response. The agency disagrees with the comment. There is no exception to the rule stated in the first sentence of §100.1031(b). Consequently, the suggested change would introduce an ambiguity in the rules.

Comment. ACE and HCJJCS recommended that in §100.1031(b), the phrase "conflicts with" should be substituted for "differs from" in the first sentence.

Agency Response. The agency agrees with the comment. Section 100.1031(b) has been modified to replace the phrase "differs from" with the phrase "conflicts with."

Comment. ACE and HCJJCS recommended that the following sentence should be added at the end of §100.1031(b): "Nothing in this section affects contracts entered into prior to September 1, 2001 or contractual provisions authorized by statute." ACE and HCJJCS commented that the renewal contracts of first-generation charter schools should not be impaired retroactively.

Agency Response. The agency disagrees with the comment. The suggested change is contrary to TEC, §12.1071 (Effect of Accepting State Funding). That section states that a charter holder who accepts state funds under TEC, §12.106, after the effective date of a provision of House Bill 6 "agrees to be subject to that provision, regardless of the date on which the charter holder's charter was granted." There is no right to state funds appropriated by the 77th Texas Legislature, 2001, under laws passed by a prior Legislature. Proposed §100.1031(b) would give effect to the language in House Bill 6; the suggested change would negate it.

Comment. ATPE recommended removing from §100.1031(c) the discretionary power of the commissioner to amend a charter to correct ambiguities at renewal time. Instead, a charter holder should make necessary changes prior to obtaining a renewal. Since a material violation of the charter is the basis for most adverse action on the part of the commissioner, it will be difficult to prove if all changes are not recorded in the charter.

Agency Response. The agency disagrees with the comment. Section 100.1031(c) provides: "Notwithstanding subsection (b), the commissioner may require, as a condition of renewal, that the charter holder amend a contract under TEC, §12.112, to correct any ambiguities, defects or other infirmities." This subsection does not permit changes to the open-enrollment charter or to the contract for charter that might go unrecorded. Rather, the purpose of subsection (c) is to authorize the commissioner to insist upon changes to the contract that might interfere with interpreting, and hence enforcing, its terms.

Comment. ATPE requested that §100.1031(d) provide for notification of renewal of an open-enrollment charter in the manner required for notification of an application for a new open-enrollment charter under TEC, 12.1101. It was suggested that notification be sent to parents or guardians of students enrolled in the charter school and to affected school districts.

Agency Response. The agency disagrees with the comment. TEC, §12.1161 (Effect of Revocation, Denial of Renewal, or Surrender of Charter), provides in subsection (b) that a charter school may continue to operate for the remainder of any school year during which the commissioner denies renewal of its open-enrollment charter." Accordingly, school districts, parents, and guardians will have adequate time to plan for the impact of a decision denying the renewal of the open-enrollment charter. In addition, the rules adopted pursuant to TEC, §12.116 (Procedure for Modification, Placement on Probation, Revocation, or Denial of Renewal), provide that a charter school must post, in the manner required for open meeting notices, the commissioner's notice of intent to deny an application for renewal of its open-enrollment charter. Accordingly, school districts, parents, and guardians will have adequate notice of a potential decision denying the renewal of the open-enrollment charter. Finally, the suggested change is not contemplated by TEC, §12.1101 (Notification of Charter Application).

Comment. ACE and HCJJCS stated that the object of the prepositional phrase, "with the consent of the charter holder," in §100.1031(d) is unclear.

Agency Response. The agency agrees with the comment. Section 100.1031(d) has been changed to clarify that the phrase, "made with the consent of the charter holder" modifies only the word, "amendments."

Comment. TCTA commented that current law does require a charter applicant to include in the application a provision that renewal of charter is contingent upon acceptable student performance on assessment instruments by a deadline or at intervals specified by the charter. TCTA requested that the agency scrutinize whether it would be possible to require as an operational standard in this section that charters meet the student performance standards on assessment instruments set forth in their application for at least two years immediately preceding renewal before they are renewed.

Agency Response. The agency disagrees with the comment. The pending rules include no provision dealing with the commissioner's criteria for approving or disapproving an application for renewal of an open-enrollment charter, and therefore no clarification or other change to §100.1031 may be made in response to this comment. At a later date, the agency anticipates proposing rules dealing with the commissioner's criteria for approving or disapproving an application for renewal of an open-enrollment charter, and a similar comment may be considered at that time.

Proposed §100.1033. Charter Amendment.

Comment. TASB, ATPE, and an individual expressed concern about the lack of any requirement that the charter official seeking to amend an open-enrollment charter has been authorized to do so by the governing body of the charter holder. The individual suggested that §100.1033(c)(1) be amended to require minutes, rosters, or some form of documentary evidence presented to show the board had met to discuss and actually approve the amendment requested. TASB recommended adding language to require that each amendment request be signed by each member of the governing body voting in favor of the amendment, or at least be accompanied by a board-adopted resolution. ATPE also commented that accurate records identifying the members of the governing body was key to establishing that the affected charter holder has authorized the amendment request presented to the commissioner for action.

Agency Response. The agency agrees with the comment. Section 100.1033(c)(1) has been modified to require that the written amendment request include a written resolution adopted by the governing body of the charter holder and signed by the members voting in favor. The resolution must authorize the commissioner to amend the open-enrollment charter as set forth in the text of the amendment, as finally negotiated between the charter holder and the commissioner, including any conditions under subsection (c)(4).

Comment. ACE and HCJJCS suggested that the rules refer to the standards set forth by TEC, §12.001, in lieu of "the best interest of students" in §100.1033(c)(3). TEC, §12.001, sets forth the purposes of the charter school statute, and thus provides statutory criteria against which proposed amendments may be evaluated. A vague and ambiguous standard such as "best interest of students" should not be substituted for statutory criteria.

Agency Response. The agency disagrees with the comment. The suggested change is contrary to TEC, §12.114 (Revision). Prior to House Bill 6, TEC, §12.113, made it a discretionary decision on the part of the State Board of Education whether to grant an open-enrollment charter to a particular applicant, subject only to a limited set of statutory criteria. Similarly, TEC, §12.114, made it a discretionary decision on the part of the State Board of Education whether to grant an amendment to a particular open-enrollment charter, guided by the policies expressed by the Legislature in TEC, Chapter 12, Subchapter D. In amending TEC, §12.114, to transfer the amendments function from the State Board of Education to the commissioner, the 77th Texas Legislature made no change that would limit the scope of this discretionary decision.

Newly adopted TEC, §12.001 (Purposes of Chapter), applies with equal force to each section of each subchapter in TEC, Chapter 12, and does not warrant special emphasis in the context of this highly discretionary decision. While the commissioner is directed by TEC, §12.001, not to "unduly regulate" the instructional methods or pedagogical innovations proposed by a requester, such amendments have never been unduly regulated by the State Board of Education, and the commissioner is prohibited from doing so by TEC, §12.001.

Comment. ACE and HCJJCS suggested that §100.1033(b) and (c) be modified to set forth categories of substantive and non-substantive amendments. Alternatively, illustrative distinctions between substantive and non-substantive amendments should be provided in rule. ATPE requested a clear definition of the "non-substantive" category. For example, things like alternative procedures for competitive bidding were not specifically outlined as substantive amendments, implying that this may fall under the non-substantive category.

Agency Response. The agency disagrees with the comments. As proposed, §100.1033(b) and (c) provide that all amendments are "substantive" unless the agency designates a list of amendments that may be approved using the notification procedure set forth in §100.1033(b). Consequently, the mandatory requirements imposed by the rule are contained in §100.1033(c). Subsection (b) merely provides a less-restrictive alternative that may be used at the discretion of the commissioner. Until one or more types of amendment are designated as "non-substantive," subsection (c) will be the exclusive means for amending an open-enrollment charter. When one or more types of amendment are designated as "non-substantive," the commissioner will endeavor to describe these types of amendment with precision and clarity. However, if there is any question whether a requested amendment falls properly within the "non-substantive" category, the proposed rule provides that "the commissioner of education may in the commissioner's sole discretion determine that the amendment will be processed under subsection (c). . . (governing substantive amendments), and, in such event, subsection (c) shall govern the amendment."

Comment. ATPE expressed concern about the separation of amendments into substantive and non-substantive categories, and a consequent loss of the public's opportunity to attend and observe the process by which open-enrollment charters are amended. ATPE requested the process include public hearings on both substantive and non-substantive amendments. Under TEC, §12.116(b), the procedures for "modifying" an open-enrollment charter provide an opportunity for a hearing to the parents and guardians of students enrolled in the charter school. An opportunity for a hearing is not given in the proposed rules for either type of amendment, and the procedures for "non-substantive" amendments do not provide any type of notification that an amendment is being sought.

Agency Response. The agency disagrees with the comment. The process for revising the terms of an open-enrollment charter with the consent of the charter holder is governed by TEC, §12.114 (Revision). TEC, §12.116 (Procedure for Modification, Placement on Probation, Revocation, or Denial of Renewal), governs the modification of the terms of an open-enrollment charter against the wishes of the charter holder.

Unlike the State Board of Education, the commissioner is not a multi-member agency that is required to meet as a body corporate in order to take official action. So, there is ordinarily no public meeting or hearing before the commissioner acts pursuant to authority granted him under the Texas Education Code. Thus the separation of amendments into "substantive" and "non-substantive" does not affect the public's opportunity to attend or to observe the process by which the commissioner makes such decisions.

As noted previously in response to another comment, until one or more types of amendment are designated as "non-substantive," subsection (c) will be the exclusive means for amending an open-enrollment charter. When one or more types of amendment are designated as "non-substantive," the commissioner will endeavor to select only amendments that have small policy implications. However, should ATPE have specific concerns about the commissioner's future designation of a type of amendment as non-substantive, those concerns may be expressed, and addressed, as the situation arises.

Comment. ACE and HCJJCS suggested that the maximum period of time that may elapse between submission of a proposed substantive amendment and the commissioner's approval or disapproval of that proposed amendment should be defined in rule. The maximum period of time should not exceed thirty days.

Agency Response. The agency disagrees with the comment. As proposed, §100.1033(b)(2) provides a mandatory ten-day turnaround for non-substantive amendments. But by definition, substantive amendments require more deliberation and internal agency review. Often, such review takes place in multiple divisions of the agency, and the Division of Charter Schools must coordinate the review of these several offices and formulate a recommendation for consideration by the commissioner. Until the commissioner has had opportunity to review time frames associated with various types of proposed amendments, it would not be prudent to adopt a review deadline that might, in some cases, arbitrarily cut short the agency's deliberative process.

Comment. ACE and HCJJCS suggested that the provision for "conditional approval" in §100.1033(c)(4) should be deleted. If approval of a proposed amendment will be forthcoming only with modifications defined by the commissioner, those modifications should be communicated to the charter holder proposing the amendment. The charter holder may resubmit the amendment with the required modifications. Under the conditional approval mechanism in the rules as drafted, the commissioner would be able to modify the proposed amendment unilaterally.

Agency Response. The agency disagrees with the comment. As proposed, §100.1033(c)(4) does not permit the commissioner to make unilateral changes to the open-enrollment charter of a charter holder seeking an amendment. It does, however, allow the commissioner to grant an amendment that is similar to the one requested, even where the commissioner has decided not to grant the amendment framed by the charter holder. If the charter holder prefers not to comply with the conditions required by the commissioner, the charter holder may simply decline the conditional amendment offered by the commissioner. Revision of an open-enrollment charter under TEC, §12.114, is a consensual process. A conditional amendment must be communicated to the charter holder proposing the amendment, and the charter holder must agree to the conditions included with the amendment. Modification of an open-enrollment charter without the consent of the charter holder must be for cause under TEC, §12.115.

Comment. Texans Can!, HCJJCS, and ACE suggested that amendments changing the site of a school should not be categorized as "expansion" amendments in §100.1033(c)(5). Many conditions may require that a school change its site from its charter designation during its first three years. Texans Can! has no objection to the wording restricting "adding" a new site within three years, only to the wording restricting "changing" a site.

Agency Response. The agency agrees with the comment. Section 100.1033(c)(5) has been modified to delete the phrase, "or change."

Comment. ACE and HCJJCS suggested that §100.1033(c)(5)(A)(i) should be deleted, or modified to permit earlier expansion of schools that existed as either private or public schools prior to operating as an open-enrollment charter school. The rule should, at a minimum, permit expansion amendments to be effective for such schools no later than the start of the second full school year in which the school would be operating as an open-enrollment charter school.

Agency Response. The agency disagrees with the comment. As proposed, §100.1033(c)(2) provides that, in considering an amendment request, the commissioner may consider "any relevant information concerning the charter holder, including its student and other performance, compliance, Public Education Information Management System (PEIMS) data, and other information." Where a charter holder is proposing to expand its operations, the information most relevant to the commissioner's decision is not available for review until after the second year of operations: audits concerning the financial management of the charter holder, monitoring reports concerning the charter holder's compliance with its open-enrollment charter, AEIS reports concerning student performance, and its success under the state's accountability system. Until information concerning the charter holder's past performance is available for analysis, the commissioner cannot make a rational decision whether to allow that charter holder to expand its operations.

Comment. ACE and HCJJCS suggested that the June 1st amendment approval deadline in §100.1033(c)(5)(A)(ii) should apply only to amendments proposing expansion of grade levels or enrollment, if at all.