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  By: Patrick, Campbell S.B. No. 2
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to certain charter schools.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Subchapter D, Chapter 11, Education Code, is
  amended by adding Sections 11.1542 and 11.1543 to read as follows:
         Sec. 11.1542.  OPEN-ENROLLMENT CHARTER SCHOOL OFFER FOR
  DISTRICT FACILITY. (a)  The board of trustees of an independent
  school district that intends to sell, lease, or allow use for a
  purpose other than a district purpose of an unused or underused
  district facility must give each open-enrollment charter school
  located wholly or partly within the boundaries of the district the
  opportunity to make an offer to purchase, lease, or use the
  facility, as applicable, in response to any terms established by
  the board of trustees, before offering the facility for sale or
  lease or to any other specific entity.
         (b)  This section does not require the board of trustees of a
  school district to accept an offer made by an open-enrollment
  charter school.
         Sec. 11.1543.  CHARTER SCHOOL PAYMENT FOR FACILITIES USE OR
  FOR SERVICES. (a)  An independent school district may not require
  a campus or campus program that has been granted a charter under
  Subchapter C, Chapter 12, and that is the result of the conversion
  of the status of an existing school district campus to pay rent for
  or to purchase a facility in order to use the facility.
         (b)  An independent school district may not require a campus
  or campus program described by Subsection (a) or an open-enrollment
  charter school to pay for any service provided by the district under
  a contract between the district and the campus, campus program, or
  open-enrollment charter school an amount that is greater than the
  amount of the actual costs to the district of providing the service.
         SECTION 2.  Subchapter C, Chapter 12, Education Code, is
  amended by adding Section 12.0522 to read as follows:
         Sec. 12.0522.  DISTRICT CHARTER AUTHORIZATION.  (a)  
  Notwithstanding Section 12.052, in the manner provided by this
  section, the board of trustees of a school district or the governing
  body of a home-rule school district may grant a district charter to
  a campus to the extent authorized under this section.
         (b)  Except as otherwise provided by this subsection or
  Subsection (c), a district charter may be granted under this
  section only to one or more campuses serving in total a percentage
  of the district's student enrollment equal to not more than 15
  percent of the district's student enrollment for the preceding
  school year.  The percentage limit may not prevent a district from
  granting a district charter to at least one feeder pattern of
  schools, including an elementary, middle or junior high, and high
  school.
         (c)  A district charter may be granted to any campus that has
  received the lowest performance rating under Subchapter C, Chapter
  39.
         (d)  Subchapter D applies to a campus granted a district
  charter under this section as though the campus were granted a
  charter under Subchapter D, and the campus is considered an
  open-enrollment charter school.
         (e)  A charter granted under this section is not considered
  for purposes of the limit on the number of charters for
  open-enrollment charter schools imposed by Section 12.101.
         (f)  The commissioner may adopt rules as necessary for the
  administration of this section.
         SECTION 3.  Section 12.055, Education Code, is amended to
  read as follows:
         Sec. 12.055.  APPLICABILITY OF LAWS AND RULES TO CAMPUS OR
  PROGRAM GRANTED CHARTER.  (a)  A campus or program for which a
  charter is granted under this subchapter is subject to federal and
  state laws and rules governing public schools, except that the
  campus or program is subject to this code and rules adopted under
  this code only to the extent the applicability to a campus or
  program for which a charter is granted under this subchapter of a
  provision of this code or a rule adopted under this code is
  specifically provided.
         (b)  A school district may contract with another district or
  an open-enrollment charter school for services at a campus charter.  
  An employee of the district or open-enrollment charter school
  providing contracted services to a campus charter is eligible for
  membership in and benefits from the Teacher Retirement System of
  Texas if the employee would be eligible for membership and benefits
  if holding the same position at the employing district or
  open-enrollment charter school.
         SECTION 4.  Subsection (b), Section 12.056, Education Code,
  is amended to read as follows:
         (b)  A campus or program for which a charter is granted under
  this subchapter is subject to:
               (1)  a provision of this title establishing a criminal
  offense; and
               (2)  a prohibition, restriction, or requirement, as
  applicable, imposed by this title or a rule adopted under this
  title, relating to:
                     (A)  the Public Education Information Management
  System (PEIMS) to the extent necessary to monitor compliance with
  this subchapter as determined by the commissioner;
                     (B)  criminal history records under Subchapter C,
  Chapter 22;
                     (C)  high school graduation under Section 28.025;
                     (D)  special education programs under Subchapter
  A, Chapter 29;
                     (E)  bilingual education under Subchapter B,
  Chapter 29;
                     (F)  prekindergarten programs under Subchapter E,
  Chapter 29;
                     (G)  extracurricular activities under Section
  33.081;
                     (H)  health and safety under Chapter 38; and
                     (I)  public school accountability under
  Subchapters B, C, D, E, F, and J, Chapter 39.
         SECTION 5.  Section 12.057, Education Code, is amended by
  adding Subsection (b-1) to read as follows:
         (b-1)  An employee of a charter holder, as defined by Section
  12.1012, who is employed on a campus or in a program granted a
  charter under this subchapter and who qualifies for membership in
  the Teacher Retirement System of Texas shall be covered under the
  system in the same manner and to the same extent as a qualified
  employee of an independent school district who is employed on a
  regularly operating campus or in a regularly operating program.
         SECTION 6.  Section 12.059, Education Code, is amended to
  read as follows:
         Sec. 12.059.  CONTENT. Each charter granted under this
  subchapter must:
               (1)  describe the educational program to be offered,
  which may be a general or specialized program;
               (2)  provide that continuation of the charter is
  contingent on satisfactory student performance under Subchapter B,
  Chapter 39, satisfactory financial performance under Subchapter D,
  Chapter 39, and [on] compliance with other applicable
  accountability provisions under Chapter 39;
               (3)  specify any basis, in addition to a basis
  specified by this subchapter, on which the charter may be [placed on
  probation or] revoked;
               (4)  prohibit discrimination in admission on the basis
  of national origin, ethnicity, race, religion, or disability;
               (5)  describe the governing structure of the campus or
  program;
               (6)  specify any procedure or requirement, in addition
  to those under Chapter 38, that the campus or program will follow to
  ensure the health and safety of students and employees; and
               (7)  describe the manner in which an annual audit of
  financial and programmatic operations of the campus or program is
  to be conducted, including the manner in which the campus or program
  will provide information necessary for the school district in which
  it is located to participate, as required by this code or by
  commissioner [State Board of Education] rule, in the Public
  Education Information Management System (PEIMS).
         SECTION 7.  Section 12.101, Education Code, is amended by
  amending Subsections (a) and (b) and adding Subsections (b-0),
  (b-1), (b-2), (b-3), (b-4), (b-5), (b-6), and (b-7) to read as
  follows:
         (a)  In accordance with this subchapter, the commissioner
  [State Board of Education] may grant a charter on the application of
  an eligible entity for an open-enrollment charter school to operate
  in a facility of a commercial or nonprofit entity, an eligible
  entity, or a school district, including a home-rule school
  district. In this subsection, "eligible entity" means:
               (1)  an institution of higher education as defined
  under Section 61.003;
               (2)  a private or independent institution of higher
  education as defined under Section 61.003;
               (3)  an organization that is exempt from taxation under
  Section 501(c)(3), Internal Revenue Code of 1986 (26 U.S.C. Section
  501(c)(3)); or
               (4)  a governmental entity.
         (b)  After thoroughly investigating and evaluating an
  applicant, the commissioner [The State Board of Education] may
  grant a charter for an open-enrollment charter school only to an
  applicant that meets any financial, governing, educational, and
  operational standards adopted by the commissioner under this
  subchapter, that the commissioner determines is capable of carrying
  out the responsibilities provided by the charter and likely to
  operate a school of high quality, and that:
               (1)  has not within the preceding 10 years had a charter
  under this chapter or a similar charter issued under the laws of
  another state surrendered under a settlement agreement, revoked,
  denied renewal, or returned; or
               (2)  is not, under rules adopted by the commissioner,
  considered to be a corporate affiliate of or substantially related
  to an entity that has within the preceding 10 years had a charter
  under this chapter or a similar charter issued under the laws of
  another state surrendered under a settlement agreement, revoked,
  denied renewal, or returned.
         (b-0)  The commissioner shall notify the State Board of
  Education of each charter the commissioner proposes to grant under
  this subchapter. Unless, before the 90th day after the date on
  which the board receives the notice from the commissioner, a
  majority of the members of the board present and voting vote against
  the grant of that charter, the commissioner's proposal to grant the
  charter takes effect. The board may not deliberate or vote on any
  grant of a charter that is not proposed by the commissioner.
         (b-1)  In granting charters for open-enrollment charter
  schools, the commissioner [The State Board of Education] may not
  grant a total of more than:
               (1)  215 charters through the fiscal year ending August
  31, 2014;
               (2)  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 [for an
  open-enrollment charter school].
         (b-2)  Beginning September 1, 2019, the total number of
  charters for open-enrollment charter schools that may be granted is
  305 charters.
         (b-3)  The commissioner may not grant more than one charter
  for an open-enrollment charter school to any charter holder.  The
  commissioner may consolidate charters for an open-enrollment
  charter school held by multiple charter holders into a single
  charter held by a single charter holder with the written consent to
  the terms of consolidation by or at the request of each charter
  holder affected by the consolidation.
         (b-4)  A charter holder having an accreditation status of
  accredited and at least 50 percent of its student population in
  grades assessed under Subchapter B, Chapter 39, may establish one
  or more new open-enrollment charter school campuses under an
  existing charter held by the charter holder if:
               (1)  the charter holder is currently evaluated under
  the standard accountability procedures for evaluation under
  Chapter 39 and received a district rating in the highest or second
  highest performance rating category under Subchapter C, Chapter 39,
  for three of the last five years with at least 75 percent of the
  campuses rated under the charter also receiving a rating in the
  highest or second highest performance rating category and with no
  campus with a rating in the lowest performance rating category in
  the most recent ratings;
               (2)  the charter holder provides written notice to the
  commissioner of the establishment of any campus under this
  subsection in the time, manner, and form provided by rule of the
  commissioner; and
               (3)  not later than the 60th day after the date the
  charter holder provides written notice under Subdivision (2), the
  commissioner does not provide written notice to the charter holder
  disapproving a new campus under this section.
         (b-5)  The initial term of a charter granted under this
  section is five years.
         (b-6)  The commissioner shall adopt rules to modify criteria
  for granting a charter for an open-enrollment charter school under
  this section to the extent necessary to address changes in
  performance rating categories or in the financial accountability
  system under Chapter 39.
         (b-7)  A charter granted under this section for a dropout
  recovery school is not considered for purposes of the limit on the
  number of charters for open-enrollment charter schools imposed by
  this section.  For purposes of this subsection, an open-enrollment
  charter school is considered to be a dropout recovery school if the
  school meets the criteria for designation as a dropout recovery
  school under Section 12.1141(c).
         SECTION 8.  Subchapter D, Chapter 12, Education Code, is
  amended by adding Section 12.1011 to read as follows:
         Sec. 12.1011.  CHARTER AUTHORIZATION FOR HIGH-PERFORMING
  ENTITIES.  (a)  Notwithstanding Section 12.101(b), 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.
         (b)  A charter holder granted a charter for an
  open-enrollment charter school under Subsection (a) may vest
  management of corporate affairs in a member entity provided that
  the member entity may change the members of the governing body of
  the charter holder before the expiration of a member's term only
  with the express written approval of the commissioner.
         (c)  The initial term of a charter granted under this section
  is five years.
         (d)  The commissioner shall adopt rules to modify criteria
  for granting a charter for an open-enrollment charter school under
  this section to the extent necessary to address changes in
  performance rating categories under Subchapter C, Chapter 39.
         SECTION 9.  Subchapter D, Chapter 12, Education Code, is
  amended by adding Section 12.1013 to read as follows:
         Sec. 12.1013.  CHARTER AUTHORIZER ACCOUNTABILITY.  (a)  The
  commissioner shall annually report under Subchapters J and K,
  Chapter 39, the performance of open-enrollment charter schools by
  authorizer compared to campus charters and matched traditional
  campuses based on student achievement indicators adopted under
  Section 39.053.
         (b)  The format of the report must enable the public to
  distinguish and compare the performance of each type of public
  school by classifying the schools as follows:
               (1)  open-enrollment charters granted by the State
  Board of Education;
               (2)  open-enrollment charters granted by the
  commissioner;
               (3)  charters granted by school districts; and
               (4)  matched traditional campuses.
         (c)  The report must include the performance of each public
  school in each class described by Subsection (b) as measured by the
  student achievement indicators adopted under Section 39.053.
         (d)  The report must also:
               (1)  aggregate and compare the performance of
  open-enrollment charter schools granted charters by the State Board
  of Education, open-enrollment charter schools granted charters by
  the commissioner, campuses and programs granted charters by school
  districts, and matched traditional campuses; and
               (2)  rate the aggregate performance of elementary,
  middle or junior high, and high schools within each class described
  by Subsection (b) as indicated by the composite rating that would be
  assigned to the class of elementary, middle or junior high, and high
  schools if the students attending all schools in that class were
  cumulatively enrolled in one elementary, middle or junior high, or
  high school.
         SECTION 10.  Section 12.102, Education Code, is amended to
  read as follows:
         Sec. 12.102.  AUTHORITY UNDER CHARTER. An open-enrollment
  charter school:
               (1)  shall provide instruction to students at one or
  more elementary or secondary grade levels as provided by the
  charter;
               (2)  is governed under the governing structure
  described by the charter;
               (3)  retains authority to operate under the charter to
  the extent authorized under Sections 12.1141 and 12.115 and
  Subchapter E, Chapter 39 [contingent on satisfactory student
  performance as provided by the charter in accordance with Section
  12.111]; and
               (4)  does not have authority to impose taxes.
         SECTION 11.  Subsection (b), Section 12.104, Education Code,
  is amended to read as follows:
         (b)  An open-enrollment charter school is subject to:
               (1)  a provision of this title establishing a criminal
  offense; and
               (2)  a prohibition, restriction, or requirement, as
  applicable, imposed by this title or a rule adopted under this
  title, relating to:
                     (A)  the Public Education Information Management
  System (PEIMS) to the extent necessary to monitor compliance with
  this subchapter as determined by the commissioner;
                     (B)  criminal history records under Subchapter C,
  Chapter 22;
                     (C)  reading instruments and accelerated reading
  instruction programs under Section 28.006;
                     (D)  accelerated instruction under Section
  28.0211;
                     (E)  high school graduation requirements under
  Section 28.025;
                     (F)  special education programs under Subchapter
  A, Chapter 29;
                     (G)  bilingual education under Subchapter B,
  Chapter 29;
                     (H)  prekindergarten programs under Subchapter E,
  Chapter 29;
                     (I)  extracurricular activities under Section
  33.081;
                     (J)  discipline management practices or behavior
  management techniques under Section 37.0021;
                     (K)  health and safety under Chapter 38;
                     (L)  public school accountability under
  Subchapters B, C, D, E, F, G, and J, Chapter 39;
                     (M)  the requirement under Section 21.006 to
  report an educator's misconduct; and
                     (N)  intensive programs of instruction under
  Section 28.0213.
         SECTION 12.  Section 12.1051, Education Code, is amended by
  amending Subsection (b) and adding Subsection (c) to read as
  follows:
         (b)  With respect to the operation of an open-enrollment
  charter school, except as provided by Subsection (c), any
  requirement in Chapter 551 or 552, Government Code, or another law
  that concerns open meetings or the availability of information,
  that applies to a school district, the board of trustees of a school
  district, or public school students applies to an open-enrollment
  charter school, the governing body of a charter holder, the
  governing body of an open-enrollment charter school, or students
  attending an open-enrollment charter school.
         (c)  Notwithstanding Subchapter F, Chapter 551, Government
  Code, the commissioner shall provide by rule for meetings by
  telephone conference call or video conference call where a majority
  of the quorum of the governing body of a charter holder or charter
  school is not physically present at one location of the meeting.  
  The rule may apply only to meetings of the governing body of a
  charter holder or charter school with its central administrative
  offices in a state other than this state.
         SECTION 13.  Subsection (a), Section 12.1053, Education
  Code, is amended to read as follows:
         (a)  This section applies to an open-enrollment charter
  school unless the school's charter otherwise describes procedures
  for purchasing and contracting and the procedures are approved by
  the commissioner [State Board of Education].
         SECTION 14.  Subsection (a), Section 12.1057, Education
  Code, is amended to read as follows:
         (a)  An employee of an open-enrollment charter school
  [operating under a charter granted by the State Board of Education]
  who qualifies for membership in the Teacher Retirement System of
  Texas shall be covered under the system to the same extent a
  qualified employee of a school district is covered.
         SECTION 15.  Section 12.110, Education Code, is amended by
  amending Subsections (a), (c), and (d), and adding Subsection (e)
  to read as follows:
         (a)  The commissioner [State Board of Education] shall
  adopt:
               (1)  an application form and a procedure that must be
  used to apply for a charter for an open-enrollment charter school;
  and
               (2)  criteria to use in selecting a program for which to
  grant a charter.
         (c)  As part of the application procedure, the commissioner
  [board] may require a petition supporting a charter for a school
  signed by a specified number of parents or guardians of school-age
  children residing in the area in which a school is proposed or may
  hold a public hearing to determine parental support for the school.
         (d)  The commissioner shall [board may] approve or deny an
  application based on:
               (1)  documented evidence collected through the
  application review process;
               (2)  merit; and
               (3)  other criteria as adopted by the commissioner,
  which [it adopts. The criteria the board adopts] must include:
                     (A)  criteria relating to the capability of the
  applicant to carry out the responsibilities provided by the charter
  and the likelihood that the applicant will operate a school of high
  quality;
                     (B) [(1)]  criteria relating to improving student
  performance and encouraging innovative programs; and
                     (C) [(2)]  a statement from any school district
  whose enrollment is likely to be affected by the open-enrollment
  charter school, including information relating to any financial
  difficulty that a loss in enrollment may have on the district.
         (e)  The commissioner shall give priority and approval to
  applications that include a plan to:
               (1)  increase the educational and performance levels of
  students in campuses that received unacceptable performance
  ratings under Section 39.054; and
               (2)  educate populations of students to be enrolled at
  the campus.
         SECTION 16.  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 [State Board of Education] 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 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 17.  Subsection (a), Section 12.111, Education Code,
  is amended to read as follows:
         (a)  Each charter granted under this subchapter must:
               (1)  describe the educational program to be offered,
  which must include the required curriculum as provided by Section
  28.002;
               (2)  [specify the period for which the charter or any
  charter renewal is valid;
               [(3)]  provide that continuation [or renewal] of the
  charter is contingent on the status of the charter as determined
  under Section 12.1141 or 12.115 or under Subchapter E, Chapter 39 
  [acceptable student performance on assessment instruments adopted
  under Subchapter B, Chapter 39, and on compliance with any
  accountability provision specified by the charter, by a deadline or
  at intervals specified by the charter];
               (3)  specify the academic, operational, and financial
  performance expectations by which a school operating under the
  charter will be evaluated, which must include applicable elements
  of the performance frameworks adopted under Section 12.1181 
  [(4)   establish the level of student performance that is considered
  acceptable for purposes of Subdivision (3)];
               (4) [(5)]  specify:
                     (A)  any basis, in addition to a basis specified
  by this subchapter or Subchapter E, Chapter 39, on which the charter
  may be [placed on probation or] revoked, [or on which] renewal of
  the charter may be denied, or the charter may be allowed to expire;
  and
                     (B)  the standards for evaluation of a school
  operating under the charter for purposes of charter renewal, denial
  of renewal, expiration, revocation, or other intervention in
  accordance with Section 12.1141 or 12.115 or Subchapter E, Chapter
  39, as applicable;
               (5) [(6)]  prohibit discrimination in admission policy
  on the basis of sex, national origin, ethnicity, religion,
  disability, academic, artistic, or athletic ability, or the
  district the child would otherwise attend in accordance with this
  code, although the charter may:
                     (A)  provide for the exclusion of a student who
  has a documented history of a criminal offense, a juvenile court
  adjudication, or discipline problems under Subchapter A, Chapter
  37; and
                     (B)  provide for an admission policy that requires
  a student to demonstrate artistic ability if the school specializes
  in performing arts;
               (6) [(7)]  specify the grade levels to be offered;
               (7) [(8)]  describe the governing structure of the
  program, including:
                     (A)  the officer positions designated;
                     (B)  the manner in which officers are selected and
  removed from office;
                     (C)  the manner in which members of the governing
  body of the school are selected and removed from office;
                     (D)  the manner in which vacancies on that
  governing body are filled;
                     (E)  the term for which members of that governing
  body serve; and
                     (F)  whether the terms are to be staggered;
               (8) [(9)]  specify the powers or duties of the
  governing body of the school that the governing body may delegate to
  an officer;
               (9) [(10)]  specify the manner in which the school will
  distribute to parents information related to the qualifications of
  each professional employee of the program, including any
  professional or educational degree held by each employee, a
  statement of any certification under Subchapter B, Chapter 21, held
  by each employee, and any relevant experience of each employee;
               (10) [(11)]  describe the process by which the person
  providing the program will adopt an annual budget;
               (11) [(12)]  describe the manner in which an annual
  audit of the financial and programmatic operations of the program
  is to be conducted, including the manner in which the person
  providing the program will provide information necessary for the
  school district in which the program is located to participate, as
  required by this code or by commissioner [State Board of Education]
  rule, in the Public Education Information Management System
  (PEIMS);
               (12) [(13)]  describe the facilities to be used;
               (13) [(14)]  describe the geographical area served by
  the program;
               (14)  [and]
               [(15)]  specify any type of enrollment criteria to be
  used;
               (15)  provide information, as determined by the
  commissioner, relating to any management company that will provide
  management services to a school operating under the charter; and
               (16)  specify that the governing body of an
  open-enrollment charter school accepts and may not delegate
  ultimate responsibility for the school, including the school's
  academic performance and financial and operational viability, and
  is responsible for overseeing any management company providing
  management services for the school and for holding the management
  company accountable for the school's performance.
         SECTION 18.  Section 12.112, Education Code, is amended to
  read as follows:
         Sec. 12.112.  FORM. A charter for an open-enrollment
  charter school shall be in the form of a written contract signed by
  the commissioner [chair of the State Board of Education] and the
  chief operating officer of the school.
         SECTION 19.  Subsection (a), Section 12.113, Education Code,
  is amended to read as follows:
         (a)  Each charter the commissioner [State Board of
  Education] grants for an open-enrollment charter school must:
               (1)  satisfy this subchapter; and
               (2)  include the information that is required under
  Section 12.111 consistent with the information provided in the
  application and any modification the commissioner [board]
  requires.
         SECTION 20.  Subchapter D, Chapter 12, Education Code, is
  amended by adding Section 12.1141 to read as follows:
         Sec. 12.1141.  RENEWAL OF CHARTER; DENIAL OF RENEWAL;
  EXPIRATION.  (a)  The commissioner shall develop and by rule adopt
  a procedure for renewal, denial of renewal, or expiration of a
  charter for an open-enrollment charter school at the end of the term
  of the charter.  The procedure must include consideration of the
  performance under Chapter 39 of the charter holder and each campus
  operating under the charter and must include three distinct
  processes, which must be expedited renewal, discretionary
  consideration of renewal or denial of renewal, and expiration.  To
  renew a charter at the end of the term, the charter holder must
  submit a petition for renewal to the commissioner in the time and
  manner established by commissioner rule.
         (b)  At the end of the term of a charter for an
  open-enrollment charter school, if a charter holder submits to the
  commissioner a petition for expedited renewal of the charter, the
  charter automatically renews unless, not later than the 30th day
  after the date the charter holder submits the petition, the
  commissioner provides written notice to the charter holder that
  expedited renewal of the charter is denied.  The commissioner may
  not deny expedited renewal of a charter if:
               (1)  the charter holder has been assigned the highest
  or second highest performance rating under Subchapter C, Chapter
  39, for the three preceding school years;
               (2)  the charter holder has been assigned a financial
  performance accountability rating under Subchapter D, Chapter 39,
  indicating financial performance that is satisfactory or better for
  the three preceding school years; and
               (3)  no campus operating under the charter has been
  assigned the lowest performance rating under Subchapter C, Chapter
  39, for the three preceding school years or such a campus has been
  closed.
         (c)  At the end of the term of a charter for an
  open-enrollment charter school, if a charter holder submits to the
  commissioner a petition for renewal of the charter and the charter
  does not meet the criteria for expedited renewal under Subsection
  (b) or for expiration under Subsection (d), the commissioner shall
  use the discretionary consideration process.  The commissioner's
  decision under the discretionary consideration process must take
  into consideration the results of annual evaluations under the
  performance frameworks established under Section 12.1181.  The
  renewal of the charter of an open-enrollment charter school that is
  registered under the agency's alternative education accountability
  procedures for evaluation under Chapter 39 shall be considered
  under the discretionary consideration process regardless of the
  performance ratings under Subchapter C, Chapter 39, of the
  open-enrollment charter school or of any campus operating under the
  charter, except that if the charter holder has been assigned a
  financial accountability performance rating under Subchapter D,
  Chapter 39, indicating financial performance that is lower than
  satisfactory for any three of the five preceding school years, the
  commissioner shall allow the charter to expire under Subsection
  (d).  In considering the renewal of the charter of an
  open-enrollment charter school that is registered under the
  agency's alternative education accountability procedures for
  evaluation under Chapter 39, such as a dropout recovery school or a
  school providing education within a residential treatment
  facility, the commissioner shall use academic criteria established
  by commissioner rule that are appropriate to measure the specific
  goals of the school.  The criteria established by the commissioner
  shall recognize growth in student achievement as well as
  educational attainment.  For purposes of this subsection, the
  commissioner shall designate as a dropout recovery school an
  open-enrollment charter school or a campus of an open-enrollment
  charter school:
               (1)  that serves students in grades 9 through 12 and has
  an enrollment of which at least 50 percent of the students are 17
  years of age or older as of September 1 of the school year as
  reported for the fall semester Public Education Information
  Management System (PEIMS) submission; and
               (2)  that meets the eligibility requirements for and is
  registered under alternative education accountability procedures
  adopted by the commissioner.
         (d)  At the end of the term of a charter for an
  open-enrollment charter school, if a charter holder submits to the
  commissioner a petition for renewal of the charter, the
  commissioner may not renew the charter and shall allow the charter
  to expire if:
               (1)  the charter holder has been assigned the lowest
  performance rating under Subchapter C, Chapter 39, for any three of
  the five preceding school years;
               (2)  the charter holder has been assigned a financial
  accountability performance rating under Subchapter D, Chapter 39,
  indicating financial performance that is lower than satisfactory
  for any three of the five preceding school years;
               (3)  the charter holder has been assigned any
  combination of the ratings described by Subdivision (1) or (2) for
  any three of the five preceding school years; or
               (4)  any campus operating under the charter has been
  assigned the lowest performance rating under Subchapter C, Chapter
  39, for the three preceding school years and such a campus has not
  been closed.
         (e)  Notwithstanding any other law, a determination by the
  commissioner under Subsection (d) is final and may not be appealed.
         (f)  Not later than the 90th day after the date on which a
  charter holder submits a petition for renewal of a charter for an
  open-enrollment charter school at the end of the term of the
  charter, the commissioner shall provide written notice to the
  charter holder, in accordance with commissioner rule, of the basis
  on which the charter qualified for expedited renewal, discretionary
  consideration, or expiration, and of the commissioner's decision
  regarding whether to renew the charter, deny renewal of the
  charter, or allow the charter to expire.
         (g)  Except as provided by Subsection (e), a decision by the
  commissioner to deny renewal of a charter for an open-enrollment
  charter school is subject to review by the State Office of
  Administrative Hearings.  Notwithstanding Chapter 2001, Government
  Code:
               (1)  the administrative law judge shall uphold a
  decision by the commissioner to deny renewal of a charter for an
  open-enrollment charter school unless the judge finds the decision
  is arbitrary and capricious or clearly erroneous; and
               (2)  a decision of the administrative law judge under
  this subsection is final and may not be appealed.
         (h)  If a charter holder submits a petition for renewal of a
  charter for an open-enrollment charter school, notwithstanding the
  expiration date of the charter, the charter term is extended until
  the commissioner has provided notice to the charter holder of the
  renewal, denial of renewal, or expiration of the charter.
         (i)  The term of a charter renewed under this section is 10
  years for each renewal.
         (j)  The commissioner shall adopt rules to modify criteria
  for renewal, denial of renewal, or expiration of a charter for an
  open-enrollment charter school under this section to the extent
  necessary to address changes in performance rating categories or in
  the financial accountability system under Chapter 39.
         SECTION 21.  Section 12.115, Education Code, is amended to
  read as follows:
         Sec. 12.115.  BASIS FOR CHARTER [MODIFICATION, PLACEMENT ON
  PROBATION,] REVOCATION[,] OR MODIFICATION OF GOVERNANCE [DENIAL OF
  RENEWAL]. (a)  Except as provided by Subsection (c), the [The] 
  commissioner shall [may modify, place on probation,] revoke[, or
  deny renewal of] the charter of an open-enrollment charter school
  or reconstitute the governing body of the charter holder if the
  commissioner determines that the charter holder:
               (1)  committed a material violation of the charter,
  including failure to satisfy accountability provisions prescribed
  by the charter;
               (2)  failed to satisfy generally accepted accounting
  standards of fiscal management;
               (3)  failed to protect the health, safety, or welfare
  of the students enrolled at the school; [or]
               (4)  failed to comply with this subchapter or another
  applicable law or rule;
               (5)  failed to satisfy the performance framework
  standards adopted under Section 12.1181; or
               (6)  is imminently insolvent as determined by the
  commissioner in accordance with commissioner rule.
         (b)  The action the commissioner takes under Subsection (a)
  shall be based on the best interest of the open-enrollment charter
  school's students, the severity of the violation, [and] any
  previous violation the school has committed, and the accreditation
  status of the school.
         (c)  Except as provided by Subsection (d), the commissioner
  shall revoke the charter of an open-enrollment charter school if:
               (1)  the charter holder has been assigned an
  unacceptable performance rating under Subchapter C, Chapter 39, for
  the three preceding school years;
               (2)  the charter holder has been assigned a financial
  accountability performance rating under Subchapter D, Chapter 39,
  indicating financial performance lower than satisfactory for the
  three preceding school years; or
               (3)  the charter holder has been assigned any
  combination of the ratings described by Subdivision (1) or (2) for
  the three preceding school years.
         (d)  Subsections (c)(1) and (3) do not apply to a charter
  holder registered under the agency's alternative education
  accountability procedures for evaluation under Chapter 39.
         (e)  This section does not limit the authority of the
  attorney general to take any action authorized by law.
         (f)  A charter holder rated as academically unacceptable
  under Subchapter D, Chapter 39, as that subchapter existed on
  January 1, 2009, for the 2010-2011 school year is considered to have
  been assigned an unacceptable performance rating for that school
  year under Subsection (c)(1).  This subsection expires September 1,
  2015.
         SECTION 22.  Section 12.116, Education Code, is amended to
  read as follows:
         Sec. 12.116.  PROCEDURE FOR [MODIFICATION, PLACEMENT ON
  PROBATION,] REVOCATION[,] OR MODIFICATION OF GOVERNANCE [DENIAL OF
  RENEWAL].  (a)  The commissioner shall adopt an informal [a]
  procedure to be used for [modifying, placing on probation,]
  revoking[, or denying renewal of] the charter of an open-enrollment
  charter school or for reconstituting the governing body of the
  charter holder as authorized by Section 12.115.
         (b)  [The procedure adopted under Subsection (a) must
  provide an opportunity for a hearing to the charter holder and to
  parents and guardians of students in the school.   A hearing under
  this subsection must be held at the facility at which the program is
  operated.
         [(c)]  Chapter 2001, Government Code, does not apply to a
  procedure [hearing] that is related to a [modification, placement
  on probation,] revocation[,] or modification of governance [denial
  of renewal] under this subchapter.
         (c)  A decision by the commissioner to revoke a charter is
  subject to review by the State Office of Administrative Hearings.  
  Notwithstanding Chapter 2001, Government Code:
               (1)  the administrative law judge shall uphold a
  decision by the commissioner to revoke a charter unless the judge
  finds the decision is arbitrary and capricious or clearly
  erroneous; and
               (2)  a decision of the administrative law judge under
  this subsection is final and may not be appealed.
         (d)  If the commissioner revokes the charter of an
  open-enrollment charter school, the commissioner may:
               (1)  manage the school until alternative arrangements
  are made for the school's students; and
               (2)  assign operation of one or more campuses formerly
  operated by the charter holder who held the revoked charter to a
  different charter holder who consents to the assignment.
         SECTION 23.  Subsection (a), Section 12.1161, Education
  Code, is amended to read as follows:
         (a)  If [Except as provided by Subsection (b), if] the
  commissioner revokes or denies the renewal of a charter of an
  open-enrollment charter school[,] or [if] an open-enrollment
  charter school surrenders its charter, the school may not:
               (1)  continue to operate under this subchapter; or
               (2)  receive state funds under this subchapter.
         SECTION 24.  Subsection (c), Section 12.1163, Education
  Code, is amended to read as follows:
         (c)  Unless the commissioner has specific cause to conduct an
  additional audit, the commissioner may not conduct more than one
  on-site audit [under Section 12.1163] during any fiscal year,
  including any financial and administrative records. For purposes
  of this subsection, an audit of a charter holder or management
  company associated with an open-enrollment charter school is not
  considered an audit of the school.
         SECTION 25.  Subsection (a), Section 12.1164, Education
  Code, is amended to read as follows:
         (a)  The commissioner must notify the Teacher Retirement
  System of Texas in writing of the revocation, denial of renewal,
  expiration, or surrender of a charter under this subchapter not
  later than the 10th business day after the date of the event.
         SECTION 26.  Subchapter D, Chapter 12, Education Code, is
  amended by adding Section 12.1181 to read as follows:
         Sec. 12.1181.  PERFORMANCE FRAMEWORKS; ANNUAL EVALUATIONS.  
  (a)  The commissioner shall develop and by rule adopt performance
  frameworks that establish standards by which to measure the
  performance of an open-enrollment charter school. The commissioner
  shall develop and by rule adopt separate, specific performance
  frameworks by which to measure the performance of an
  open-enrollment charter school that is registered under the
  agency's alternative education accountability procedures for
  evaluation under Chapter 39. The performance frameworks shall be
  based on national best practices that charter school authorizers
  use in developing and applying standards for charter school
  performance. In developing the performance frameworks, the
  commissioner shall solicit advice from charter holders, the members
  of the governing bodies of open-enrollment charter schools, and
  other interested persons.
         (b)  The performance frameworks may include a variety of
  standards. In evaluating an open-enrollment charter school, the
  commissioner shall measure school performance against an
  established set of quality standards developed and adopted by the
  commissioner.
         (c)  Each year, the commissioner shall evaluate the
  performance of each open-enrollment charter school based on the
  applicable performance frameworks adopted under Subsection (a).
         SECTION 27.  Section 12.119, Education Code, is amended to
  read as follows:
         Sec. 12.119.  BYLAWS; ANNUAL REPORT. (a)  A charter holder
  shall file with the commissioner [State Board of Education] a copy
  of its articles of incorporation and bylaws, or comparable
  documents if the charter holder does not have articles of
  incorporation or bylaws, within the period and in the manner
  prescribed by the commissioner [board].
         (b)  Each year within the period and in a form prescribed by
  the commissioner [State Board of Education], each open-enrollment
  charter school shall file with the commissioner [board] the
  following information:
               (1)  the name, address, and telephone number of each
  officer and member of the governing body of the open-enrollment
  charter school; and
               (2)  the amount of annual compensation the
  open-enrollment charter school pays to each officer and member of
  the governing body.
         (c)  On request, the commissioner [State Board of Education]
  shall provide the information required by this section and Section
  12.111(a)(7) [12.111(a)(8)] to a member of the public.  The
  commissioner [board] may charge a reasonable fee to cover the
  commissioner's [board's] cost in providing the information.
         SECTION 28.  Subchapter D, Chapter 12, Education Code, is
  amended by adding Section 12.1211 to read as follows:
         Sec. 12.1211.  NAMES OF MEMBERS OF GOVERNING BODY LISTED ON
  WEBSITE. An open-enrollment charter school shall list the names of
  the members of the governing body on the home page of the school's
  Internet website.
         SECTION 29.  Subsection (a), Section 12.122, Education Code,
  is amended to read as follows:
         (a)  Notwithstanding the applicable provisions of the
  Business Organizations Code [Texas Non-Profit Corporation Act
  (Article 1396-1.01 et seq., Vernon's Texas Civil Statutes)] or
  other law, on request of the commissioner, the attorney general may
  bring suit against a member of the governing body of an
  open-enrollment charter school for breach of a fiduciary duty by
  the member, including misapplication of public funds.
         SECTION 30.  Subsection (a), Section 12.128, Education Code,
  is amended to read as follows:
         (a)  Property purchased or leased with funds received by a
  charter holder under Section 12.106 after September 1, 2001:
               (1)  is considered to be public property for all
  purposes under state law;
               (2)  is property of this state held in trust by the
  charter holder for the benefit of the students of the
  open-enrollment charter school; and
               (3)  may be used only for a purpose for which a school
  district may use school district property.
         SECTION 31.  Subchapter D, Chapter 12, Education Code, is
  amended by adding Section 12.1231 to read as follows:
         Sec. 12.1231.  TRAINING FOR AGENCY EMPLOYEES. Not later
  than October 1, 2013, each agency employee assigned responsibility
  related to granting charters for open-enrollment charter schools or
  providing oversight or monitoring of charter holders or
  open-enrollment charter schools must participate in training on
  charter school authorization, oversight, and monitoring provided
  by a nationally recognized organization of charter school
  authorizers identified by the commissioner. This section expires
  January 1, 2014.
         SECTION 32.  Sections 12.152 and 12.154, Education Code, are
  amended to read as follows:
         Sec. 12.152.  AUTHORIZATION. [(a)]  In accordance with this
  subchapter and Subchapter D, the commissioner [State Board of
  Education] may grant a charter on the application of:
               (1)  a public senior college or university for an
  open-enrollment charter school to operate on the campus of the
  public senior college or university or in the same county in which
  the campus of the public senior college or university is located; or
               (2)  a public junior college for an open-enrollment
  charter school to operate on the campus of the public junior college
  or in the same county in which the campus of the public junior
  college is located.
         Sec. 12.154.  CONTENT. (a)  Notwithstanding Section
  12.110(d), the commissioner [State Board of Education] may grant a
  charter under this subchapter to a public senior college or
  university only if the following criteria are satisfied in the
  public senior college's or university's application, as determined
  by the commissioner [State Board of Education]:
               (1)  the college or university charter school's
  educational program must include innovative teaching methods;
               (2)  the college or university charter school's
  educational program must be implemented under the direct
  supervision of a member of the teaching or research faculty of the
  public senior college or university;
               (3)  the faculty member supervising the college or
  university charter school's educational program must have
  substantial experience and expertise in education research,
  teacher education, classroom instruction, or educational
  administration;
               (4)  the college or university charter school's
  educational program must be designed to meet specific goals
  described in the charter, including improving student performance,
  and each aspect of the program must be directed toward the
  attainment of the goals;
               (5)  the attainment of the college or university
  charter school's educational program goals must be measured using
  specific, objective standards set forth in the charter, including
  assessment methods and a time frame; and
               (6)  the financial operations of the college or
  university charter school must be supervised by the business office
  of the public senior college or university.
         (b)  Notwithstanding Section 12.110(d), the commissioner
  [State Board of Education] may grant a charter under this
  subchapter to a public junior college only if the following
  criteria are satisfied in the public junior college's application,
  as determined by the commissioner [State Board of Education]:
               (1)  the junior college charter school's educational
  program must be implemented under the direct supervision of a
  member of the faculty of the public junior college;
               (2)  the faculty member supervising the junior college
  charter school's educational program must have substantial
  experience and expertise in teacher education, classroom
  instruction, or educational administration;
               (3)  the junior college charter school's educational
  program must be designed to meet specific goals described in the
  charter, such as dropout recovery, and each aspect of the program
  must be directed toward the attainment of the goals;
               (4)  the attainment of the junior college charter
  school's educational program goals must be measured using specific,
  objective standards set forth in the charter, including assessment
  methods and a time frame; and
               (5)  the financial operations of the junior college
  charter school must be supervised by the business office of the
  junior college.
         SECTION 33.  Subsection (b), Section 12.156, Education Code,
  is amended to read as follows:
         (b)  A charter granted under this subchapter is not
  considered for purposes of the limit on the number of
  open-enrollment charter schools imposed by Section 12.101
  [12.101(b)].
         SECTION 34.  Section 39.152, Education Code, is amended to
  read as follows:
         Sec. 39.152.  REVIEW BY STATE OFFICE OF ADMINISTRATIVE
  HEARINGS:  SANCTIONS.  (a)  A school district or open-enrollment
  charter school that intends to challenge a decision by the
  commissioner under this chapter to close the district or a district
  campus or the charter school or to pursue alternative management of
  a district campus or the charter school must appeal the decision
  under this section [the procedures provided for a contested case
  under Chapter 2001, Government Code].
         (b)  A challenge to a decision under this section is under
  the substantial evidence rule as provided by Subchapter G, Chapter
  2001, Government Code.  The commissioner shall adopt procedural
  rules for a challenge under this section.
         (c)  Notwithstanding other law:
               (1)  the State Office of Administrative Hearings shall
  conduct [provide] an expedited review of a challenge under this
  section;
               (2)  the administrative law judge shall issue a final
  order not later than the 30th day after the date on which the
  hearing is finally closed; [and]
               (3)  the decision of the administrative law judge is
  final and may not be appealed; and
               (4)  the decision of the administrative law judge may
  set an effective date for an action under this section.
         SECTION 35.  Subsection (a), Section 221.0071, Human
  Resources Code, is amended to read as follows:
         (a)  Notwithstanding any other law and in addition to the
  number of charters allowed under Subchapter D, Chapter 12,
  Education Code, the commissioner of education [State Board of
  Education] may grant a charter on the application of a detention,
  correctional, or residential facility established only for
  juvenile offenders under Section 51.12, 51.125, or 51.126, Family
  Code.
         SECTION 36.  Subsection (d), Section 221.056, Human
  Resources Code, is amended to read as follows:
         (d)  Notwithstanding any other law and in addition to the
  number of charters allowed under Subchapter D, Chapter 12,
  Education Code, the commissioner of education [State Board of
  Education] shall grant a charter on the application of a
  residential treatment facility established under this section for a
  school chartered for the purposes of this section.
         SECTION 37.  The following provisions of the Education Code
  are repealed:
               (1)  Subsection (b), Section 12.113; and
               (2)  Subsection (b), Section 12.1161.
         SECTION 38.  This Act takes effect September 1, 2013.