HBA-MPM H.B. 2358 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 2358 By: Olivo Public Education 4/20/1999 Introduced BACKGROUND AND PURPOSE There have been 168 charters granted by the State Board of Education (board) for open enrollment charter schools (charter schools), 88 of which are currently operational in Texas. The board recently adopted a resolution to encourage the creation of more charter schools. Preliminary findings suggest that charter schools are not out-performing public schools when it comes to the percentage of student who pass the Texas Assessment of Academic Skills (TAAS) test. H.B. 2358 prohibits the board from granting additional original charters, and requires the evaluation of charter schools to emphasis the performance of the charter schools' students on the TAAS test, as well as the number of students who did not re-enroll at the charter school the following year. This bill also makes a charter school subject to annual audits and requires the state auditor to conduct an audit of each charter school at least once during the term of the charter. The bill further prohibits a charter school from contracting out of the management or operation of a charter school to another entity that would not be eligible to receive a charter, such as a for-profit entity. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 12.101(b), Education Code, to prohibit the State Board of Education from granting an original charter, rather than a total of more than 20 charters, for an open-enrollment charter school (charter school) after the effective date of the 1999 amendment to this section. SECTION 2. Amends Section 12.118, Education Code, by amending Subsection (b) and adding Subsection (d), as follows: (b) Provides that an evaluation under this section, before and after implementing the charter, as applicable, must emphasize student's scores on assessment instruments administered under Subchapter B (Assessment of Academic Skills), Chapter 39 (Public School System Accountability), Education Code, and the rate at which eligible students re-enroll in the school from year to year, as well as include consideration of certain items regarding student attendance, grades, incidents involving student discipline, socioeconomic data on students' families, and students' and parents' satisfaction with the charter school. Deletes students' scores on assessment instruments administered under Subchapter B, Chapter 39, Education Code. Redesignates Subdivision (1) to Subdivision (2) and Subdivisions (1)-(7) to Paragraphs (A)-(F). Makes conforming changes. (d) Requires the Texas Education Agency (agency) to reimburse a charter school for the cost of an evaluation under this section if funds are appropriated for that purpose. Requires the commissioner of education (commissioner) to reimburse each school proportionately if the funds appropriated are insufficient to cover the cost of evaluation of all schools. SECTION 3. Amends Subchapter D, Chapter 12, Education code, by adding Sections 12.119 and 12.120, as follows: Sec. 12.119. FINANCIAL AUDITS. (a) Provides that a charter school is subject to the financial audit requirements of Section 44.008 (Annual Audit; Report), Education Code. (b) Requires the state auditor, at least once during the period for which a charter or renewed charter is valid, to perform a financial audit of each charter school and to prescribe a schedule of audits for this purpose. Requires the charter school to reimburse the state auditor for the cost of this audit. Provides that the audit of the state auditor satisfies the annual financial audit requirements of Section 44.008, Education Code, for the year the audit is performed. Sec. 12.120. CERTAIN CONTRACTS PROHIBITED. Prohibits a charter school from contracting for the management or operation of the school by an entity that is ineligible for a charter under Section 12.101(a) (regarding the granting of a charter on the application of an eligible entity for a charter school to operate in a facility of a commercial or nonprofit entity or a school district, including a home-rule school district), Education Code. SECTION 4. Repealer: Section 12.1011 (Public Education Grant Charters), Education Code. This section states that, in addition to the other charters authorized under this subchapter, in accordance with this subchapter, the board may grant no more than 100 charters for charter schools that adopt an express policy providing for the admission of students eligible for a public education grant; and additional charters for charter schools for which at least 75 percent of the prospective student population, as specified in the proposed charter, will be students who have dropped out of school or are at risk of dropping out of school. Further states that a charter school granted a charter under this section may serve students who are not eligible for a public education grant, but a school granted a charter must maintain, as a condition of its charter, the required percentage of students. SECTION 5. Provides that this Act takes effect September 1, 1999, with the exceptions of Sections 1 and 4 of this Act, which take effect immediately. Makes changes in law made by this Act prospective. SECTION 6.Emergency clause.