HBA-MPM C.S.H.B. 2358 76(R)BILL ANALYSIS


Office of House Bill AnalysisC.S.H.B. 2358
By: Olivo
Public Education
5/7/1999
Committee Report (Substituted)



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 students who pass the Texas Assessment
of Academic Skills (TAAS) test.  C.S.H.B. 2358 prohibits the board from
granting additional original charters, and requires the evaluation of
charter schools to emphasize 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
requires the state auditor to monitor the board's oversight of charter
schools. 

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 Subchapter D, Chapter 12, Education Code, by adding
Section 12.1012, as follows: 

Sec. 12.1012.  MORATORIUM ON NEW CHARTERS. Prohibits the State Board of
Education (board), notwithstanding Sections 12.101 (Authorization) and
12.1011 (Public Education Grant Charters), Education Code, from issuing a
charter for an open-enrollment charter school (charter school) after the
effective date of H.B. 2358, Acts of the 76th Legislature, Regular Session,
1999 (relating to open-enrollment charter schools).  Provides that this
section expires September 1, 2001. 

SECTION 2.  Amends Section 12.111, Education Code, to provide that each
charter granted under this subchapter must, among other things, describe
the governing structure of the program, including the officer positions
designated, the manner in which officers are selected, the manner in which
members of the governing body are elected or appointed, the manner in which
vacancies on the governing board are filled, the term for which members of
the governing body serve, and whether the terms are to be staggered. 

SECTION 3.  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.  Makes conforming changes. 
 
(d)  Requires the Texas Education Agency (agency) to conduct an evaluation
under this section of each charter school, and no later than December 1,
2000, to prepare and deliver a report of the evaluation results to the
governor, lieutenant governor, and each member of the legislature.
Provides that this subsection expires September 1, 2001. 

SECTION 4.  Amends Subchapter D, Chapter 12, Education code, by adding
Sections 12.119, 12.120, and 12.121, 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 to monitor the board's oversight of charter
schools 

Sec. 12.120.  BYLAWS; ANNUAL REPORT.  (a)  Requires the entity to which a
charter is granted for a charter school to file with the board a copy of
its bylaws, or a comparable document if the entity does not have bylaws,
within the period and manner prescribed by the board. 

(b)  Requires each charter school, each year within the period and in a
form prescribed by the board, to file with the board certain information
with respect to the charter school. 

(c)  Requires the board, on request, to provide the information required by
this section and Section 12.111, Education Code, to a member of the public.
Authorizes the board to charge a reasonable fee to cover its cost in
providing the information. 

Sec. 12.121.  LIMITATION ON SERVING AS OFFICER OR EMPLOYEE.  Prohibits a
person who has been convicted of a felony or certain misdemeanors from
serving as an officer or member of the governing body of a charter school. 

SECTION 5.  Provides that this Act takes effect September 1, 1999, with the
exceptions of SECTION 1 of this Act, which takes effect immediately.
Requires each charter school for which a charter is granted before
September 1, 1999, to revise its charter as necessary to comply with
Section 12.111, Education Code, as amended by this Act, no later than
January 1, 2000.  Requires the entity to which a charter for a charter
school is granted before September 1, 1999, to file a copy of its bylaws or
other document as required by Section 12.120, Education Code, as added by
this Act, no later than January 1, 2000.  Provides that changes in law made
by this Act do not affect the validity of charters issued before the
effective date of a provision of this Act.   

SECTION 6.Emergency clause.

COMPARISON OF ORIGINAL TO SUBSTITUTE

C.S.H.B. 2358 differs from the original by adding new SECTIONS 1 and 2.
Please see the Sectionby-Section Analysis in this document. 

SECTION 1 of the original, which amended Section 12.101(b), Education Code,
to prohibit the State Board of Education (board) 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, is deleted. 

SECTION 3 of the substitute is redesignated from SECTION 2 of the original,
which amends Section 12.118, Education Code.  The substitute replaces
proposed Subsection (d) of the original with new text which requires the
Texas Education Agency (agency) to conduct an evaluation under this section
of each charter school, and no later than December 1, 2000, to prepare and
deliver a report of the evaluation results to the governor, lieutenant
governor, and each member of the legislature, and provides that this
subsection expires September 1, 2001. Subsection (d) of the original
required the agency to reimburse a charter school for the cost of an
evaluation under this section if funds are appropriated for that purpose.
The original also required 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 4 of the substitute is redesignated from SECTION 3 of the original,
however, instead of adding Sections 12.119 and 12.120, Education Code, the
substitute adds Sections 12.119, 12.120, and 12.121.  In proposed Section
12.119, the substitute requires the state auditor to monitor the board's
oversight of charter schools, whereas, the original required the state
auditor to perform financial audits of charter schools at least once during
the period for which a charter or renewed charter is valid. 

The substitute replaces proposed Section 12.120 (Certain Contracts
Prohibited), Education Code, of the original with entirely new text.
Please refer to the Section-by-Section Analysis in this document for an
analysis of this new section.  In the original, this section prohibited 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. 

The substitute adds entirely new Section 12.121 (Limitation on Serving as
Officer or Employee), Education Code.  Please see the Section-by-Section
Analysis for an analysis of this new section. 

SECTION 4 of the original, which repealed Section 12.1011 (Public Education
Grant Charters), Education Code, is removed from the substitute.  The
language in the original would have repealed language stating 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.  This section 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 of the substitute differs from the original by making this Act
effective September 1, 1999, with the exception of SECTION 1, rather than
SECTIONS 1 and 4, of this Act.  The substitute also requires each charter
school for which a charter is granted before September 1, 1999, to revise
its charter as necessary to comply with Section 12.111, Education Code, as
amended by this Act, no later than January 1, 2000; and requires the entity
to which a charter for a charter school is granted before September 1,
1999, to file a copy of its bylaws or other document as required by Section
12.120, Education Code, as added by this Act, no later than January 1,
2000.