The Texas Education Agency (TEA) proposes new §§100.1001-100.1007, 100.1010, 100.1021, 100.1022, 100.1026, 100.1031, 100.1032, 100.1050, and 100.1052; amendments to §§100.1015, 100.1017, 100.1023, 100.1025, 100.1033, 100.1035, 100.1041, 100.1043, 100.1045, 100.1047, 100.1051, 100.1063, 100.1067, 100.1071, 100.1073, 100.1102-100.1105, 100.1111, 100.1112, 100.1131, 100.1133, 100.1151, 100.1155, 100.1205, 100.1207, 100.1211, 100.1213, 100.1215, and 100.1217; and the repeal of §§100.1011, 100.1021, 100.1022, 100.1031, and 100.1037, concerning charters. The sections establish requirements for open-enrollment charter schools. The proposed actions would modify the existing rules to reflect changes in law made by Senate Bill (SB) 2, 83rd Texas Legislature, Regular Session, 2013, and to more closely match other existing statutory provisions.

From 1995 until September 1, 2013, the State Board of Education (SBOE) had the authority to adopt the charter guidelines and application documents and to grant open-enrollment charters, public senior college or university charters, and public junior college charters. Additionally, the SBOE had the authority to approve the annual charter school governance reporting form and optional charter provisions for purchasing and contracting.

SB 2, 83rd Texas Legislature, Regular Session, 2013, granted the commissioner of education the authority to approve the annual charter school governance reporting form and optional charter provisions for purchasing and contracting, as well as to establish and approve the contents of the request for application and the criteria by which charter schools would be awarded. Additionally, SB 2 gave the commissioner the authority to award up to 305 open-enrollment charters on a graduated basis by the year 2019 to eligible entities that are considered capable of carrying out the responsibilities of the charter, are likely to operate a school of high quality, have been nominated by the commissioner, and are not rejected by a majority of the members of the SBOE present and voting. SB 2 specifies that a member of the SBOE designated by the SBOE chair will work in coordination with the commissioner to investigate and evaluate charter applicant(s). Texas Education Code, §12.101, gives the SBOE the authority to veto or take no action on the charter(s) the commissioner has recommended for award.

The existing commissioner's rules in 19 TAC Chapter 100, Subchapter AA, adopted effective November 6, 2001, and last amended effective September 12, 2002, cover a wide range of issues related to open-enrollment charter schools. The rules are organized in divisions addressing related subject matter, as follows: Division 1, General Provisions; Division 2, Commissioner Action and Intervention; Division 3, Charter School Funding and Financial Operations; Division 4, Property of Open-Enrollment Charter Schools; Division 5, Charter School Governance; and Division 6, Charter School Operations.

The proposed revisions to 19 TAC Chapter 100, Subchapter AA, would incorporate the requirements of SB 2 by adding new rules that include provisions relating to the application and selection procedures and criteria, optional provisions for contracting and purchasing, annual reports on open-enrollment charter governance, and performance frameworks. The proposed revisions would also update and add new rules relating to standards for and the revocation and modification of the governance of an open-enrollment charter as well as the management of charter campuses following revocation, surrender, or expiration.

Additionally, the proposed revisions to 19 TAC Chapter 100, Subchapter AA, would amend, repeal, and add new rules relating to charter renewals and amendments; compliance records on nepotism, conflicts of interest, and restrictions on serving; charter school funding and financial operations; property of open-enrollment charter schools; charter school governance; and charter school operations.

The proposed rule actions would have procedural and reporting requirements for charters. Charters are required to post the names of the members of the governing body of an open-enrollment charter and the salary of the charter superintendent or the chief operating officer on the school's Internet home page and submit evidence thereof to the TEA on the governance reporting form. Charters must also submit to the TEA an accounting of all employees employed by the school as of September 1, 2013, including the declaration of any nepotistic relationships. Pending the adoption of the Charter School Performance Framework Manual, charters may have nominal data to report annually.

The proposed rule actions may have additional locally maintained paperwork requirements. If not already maintained, additional reporting requirements may result in the need for charters to maintain additional personnel information.

Heather Mauze, director of charter school administration, has determined that for the first five-year period the rule actions are in effect there would be no additional costs for local government required to comply with the proposed rule actions. There will, however, be fiscal implications for state government.

The proposed revisions include the provision for an annual performance framework report for all charters. The performance framework aims to measure the academic, financial, and organizational performance of charters using a myriad of indicators. While the state currently has indicators and performance measures in the areas of student accountability and financial accountability, there is not a systemic way of measuring a charter's organizational or operational structure, nor is there a system that interfaces with each universe to pull the appropriate data. A new system is required that will be designed with TEA login security, administrative functionality to set values, indicator calculation definitions, rating/indicator reports, controls to set the viewing level of the charter performance framework rating results or reports, and systems data rollout from one school year to the next.

For the initial year development of the web system and associated supports, the total cost in fiscal year 2015 is estimated to be as much as $919,456. The annual operating budget for fiscal years 2016-2019 is estimated at $227,896 each year. The estimated costs include $691,560 for operating expenses for development in fiscal year 2015 in addition to $175,000 for personnel and $52,896 for equipment for each year of fiscal years 2015-2019. Development of a system to meet these requirements is pending fiscal approval.

Ms. Mauze has determined that for each year of the first five years the rule actions are in effect the public benefit anticipated as a result of enforcing the rule actions will be to ensure that rules governing the selection and operation of open-enrollment charter schools are aligned with current law. There is no anticipated economic cost to persons who are required to comply with the proposed rule actions.

There is no direct adverse economic impact for small businesses and microbusinesses; therefore, no regulatory flexibility analysis, specified in Texas Government Code, §2006.002, is required.

The public comment period on the proposal begins July 11, 2014, and ends August 11, 2014. Comments on the proposal may be submitted to Cristina De La Fuente-Valadez, Rulemaking, Texas Education Agency, 1701 North Congress Avenue, Austin, Texas 78701, (512) 475-1497. Comments may also be submitted electronically to rules@tea.state.tx.us or faxed to (512) 463-5337.

A public hearing on the proposed revisions has been scheduled for 9 a.m. to 3 p.m. on Friday, July 25, 2014, in Room 1-111, William B. Travis Building, 1701 North Congress Avenue, Austin, Texas 78701. Questions about the scheduled public hearing on the proposed revisions to 19 TAC Chapter 100, Charters, Subchapter AA, Commissioner's Rules Concerning Open-Enrollment Charter Schools, should be directed to the TEA Division of Charter School Administration at (512) 463-9575. Public comments on the proposed revisions to 19 TAC Chapter 157, Hearings and Appeals, Subchapter EE, Review by State Office of Administrative Hearings: Certain Accreditation Sanctions, will also be heard at the July 25, 2014, public hearing.

The amendments are proposed under the Texas Education Code (TEC), §12.101, which authorizes the commissioner to grant a charter on the application of an eligible entity for an open-enrollment charter school, including the adoption of rules to modify criteria for granting a charter to the extent necessary to address changes in performance rating categories or in the financial accountability system under TEC, Chapter 39; TEC, §12.1011, which authorizes the commissioner to adopt rules to modify criteria for granting charters for high-performing entities to the extent necessary to address changes in performance rating categories or in the financial accountability system under TEC, Chapter 39; TEC, §12.102, which requires schools to operate and govern in accordance with its charter; TEC, §12.103, which authorizes that schools are subject to federal and state laws and rules adopted as applicable to charters; TEC, §12.104, which authorizes the commissioner to adopt rules relating to the applicability of public education law to charter schools; TEC, §12.1053, which authorizes the commissioner to approve procedures for contracting and purchasing or subject schools to rules of governmental entity; TEC, §12.117, which authorizes how the admissions process of an open-enrollment charter school shall occur; TEC, §12.120, which mandates under which circumstances an individual may or may not serve on a governing body of a charter holder or charter school or serve as an employee; TEC, §12.121, which requires the governing body of a charter holder to be responsible for and to retain control of the management, operation, and accountability of the school; TEC, §12.128, which authorizes the commissioner to adopt rules necessary to insure that all property purchased or leased with state funds considered to be public property for all purposes under state law held in trust for the benefit of students of the open-enrollment school is returned to the state when the open-enrollment charter school ceases to operate; and Local Government Code, §171.004, which authorizes how all local public officials with a substantial interest in a business entity or real property shall conduct their affairs.

The amendments implement the TEC, §§12.101, 12.1011, 12.102, 12.103, 12.104, 12.1053, 12.117, 12.120, 12.121, and 12.128 and Local Government Code, §171.004.