88R14343 JES-F     By: Dutton H.B. No. 5092       A BILL TO BE ENTITLED   AN ACT   relating to formation, funding, and support of and the   applicability of certain laws to charter schools.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  The heading to Section 12.052, Education Code,   is amended to read as follows:          Sec. 12.052.  PETITION DRIVEN AUTHORIZATION.          SECTION 2.  Section 12.052(a), Education Code, is amended to   read as follows:          (a)  In accordance with this subchapter, the board of   trustees of a school district or the governing body of a home-rule   school district shall grant or deny, through a public vote of the   board of trustees or governing body, a charter to parents and   teachers for a campus, two or more campuses, or a program on a   campus if the board is presented with a petition signed by:                (1)  the parents of a majority of the students at the    [that] school campus or at each campus, as applicable; and                (2)  a majority of the classroom teachers at the [that]   school campus or at each campus, as applicable.          SECTION 3.  The heading to Section 12.0521, Education Code,   is amended to read as follows:          Sec. 12.0521.  DISTRICT CHARTER [ALTERNATIVE]   AUTHORIZATION.          SECTION 4.  Section 12.0521, Education Code, is amended by   amending Subsections (a) and (b) and adding Subsections (d), (e),   and (f) to read as follows:          (a)  Notwithstanding Section 12.052, in accordance with this   subchapter and 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 charter for:                (1)  a new district campus; [or]                (2)  a program that is operated:                      (A)  by an entity that has entered into a contract   with the district under Section 11.157 to provide educational   services to the district through the campus or program; and                      (B)  at a facility located in the boundaries of   the district; or                (3)  an existing district campus.          (b)  A student's parent or guardian may choose to enroll the   student at a campus or in a program under this section. A school   district may not assign a student to a campus or program under this   section unless the student's parent or guardian has voluntarily   enrolled the student at the campus or in the program. A student's   parent or guardian may, at any time, remove the student from a   campus or program under this section and enroll the student at the   campus to which the student would ordinarily be assigned. If the   campus to which the student would ordinarily be assigned is also a   campus operated under a charter, the student's parent or guardian   may enroll the student at another available campus in the district   that is appropriate for the student's grade and is not operated   under a charter.          (d)  A district charter may be granted to a campus,   regardless of the performance rating under Subchapter C, Chapter   39, assigned to that campus in the previous school year.          (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 5.  Section 12.0531, Education Code, is amended to   read as follows:          Sec. 12.0531.  PERFORMANCE CONTRACT; DURATION OF CHARTER.     (a) If a charter is granted under this subchapter, the board of   trustees of the school district that granted the charter shall   enter into a performance contract with the principal or equivalent   chief operating officer of the campus or program.  The performance   contract must specify enhanced authority granted to the principal   or equivalent officer in order to achieve the academic goals that   must be met by campus or program students.  A charter granted under   this subchapter expires 10 years from the date the charter is   granted unless the specified goals are substantially met, as   determined by the board of trustees of the school district that   granted the charter.          (b)  A charter granted pursuant to a contract between a   school district and an entity granted a charter under this   subchapter as authorized by Section 11.174(a)(2) must be granted to   a school district campus for a term of not less than three years.     The term of the charter may be shortened by an action authorized   under Chapter 39A, except for the charter granted to a campus   against which the commissioner may not impose a sanction or take   action pursuant to Section 11.174(f).  A charter described by this   subsection may be placed on probation or revoked in accordance with   Section 12.064.          SECTION 6.  Section 12.056(b), Education Code, as amended by   Chapters 887 (S.B. 1697), 974 (S.B. 2081), and 1046 (S.B. 1365),   Acts of the 87th Legislature, Regular Session, 2021, is reenacted   and amended to read as follows:          (b)  A campus or program for which a charter is granted under   this subchapter is subject to Sections 12.104(b), (b-2), and (b-3),   and Sections 12.104(b-1), (b-4), and (c) apply to the campus or   program, as if the campus or program is an open-enrollment charter   school [:                [(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, except class size limits for prekindergarten classes   imposed under Section 25.112, which do not apply;                      [(G)  extracurricular activities under Section   33.081;                      [(H)  health and safety under Chapter 38;                      [(I)  the provisions of Subchapter A, Chapter 39;                      [(J)  public school accountability and special   investigations under Subchapters A, B, C, D, F, and J, Chapter 39,   and Chapter 39A;                      [(K)  the duty to discharge or refuse to hire   certain employees or applicants for employment under Section   12.1059; and                      [(K)  parental options to retain a student under   Section 28.02124].          SECTION 7.  Section 12.057(c), Education Code, is amended to   read as follows:          (c)  A campus or program granted a charter under Section   12.052 or [,] 12.0521(a)(1)[, or 12.053] is immune from liability   to the same extent as a school district, and its employees and   volunteers are immune from liability to the same extent as school   district employees and volunteers.          SECTION 8.  Section 12.062, Education Code, is amended to   read as follows:          Sec. 12.062.  REVISION. (a) A charter granted under Section   12.052 [or 12.053] may be revised:                (1)  with the approval of the board of trustees that   granted the charter; and                (2)  on a petition signed by a majority of the parents   and a majority of the classroom teachers at the campus, at each   campus, or in the program, as applicable.          (b)  A charter granted under Section 12.0521 may be revised   with the approval of the board of trustees that granted the charter,   and if applicable, the approval of the board of trustees or chief   operating officer of the partnering school district, campus, or   program. [A charter may be revised under this subsection only   before the first day of instruction of a school year or after the   final day of instruction of a school year.]          SECTION 9.  Section 12.063, Education Code, is amended to   read as follows:          Sec. 12.063.  BASIS FOR PLACEMENT ON PROBATION OR   REVOCATION. (a)  A board of trustees may place on probation or   revoke a charter it grants if the board determines that the campus,   campuses, or program:                (1)  committed a material violation of the charter,   including by failure to comply with the duty to discharge or refuse   to hire certain employees or applicants for employment, as provided   by Section 12.0631;                (2)  failed to satisfy generally accepted accounting   standards of fiscal management; or                (3)  failed to comply with this subchapter, another   law, or a state agency rule.          (b)  The action the board takes under Subsection (a) shall be   based on the best interest of campus or program students, the   severity of the violation, and any previous violation the campus,   campuses, or program has committed.          SECTION 10.  Section 12.064(b), Education Code, is amended   to read as follows:          (b)  The procedure adopted under Subsection (a) must provide   an opportunity for a hearing to the campus or program for which a   charter is granted under this subchapter and to parents and   guardians of students at the campus or in the program. A hearing   under this subsection must be held on a charter [the] campus or on   the campus operating the [one of the campuses in the case of a   cooperative] charter program.          SECTION 11.  Section 12.065, Education Code, is amended by   amending Subsection (a) and adding Subsection (c) to read as   follows:          (a)  Except as provided by Subsection (c), eligibility    [Eligibility] criteria for admission of students to the campus or   program for which a charter is granted under this subchapter must   give priority on the basis of geographic and residency   considerations.  After priority is given on those bases, secondary   consideration may be given to a student's age, grade level, or   academic credentials in general or in a specific area, as necessary   for the type of program offered.          (c)  A campus or program may enter into an agreement with and   provide for enrollment preferences to children of employees of a   business and industry partner in the same manner as an   open-enrollment charter school under Section 12.117(e) if the   business and industry partner provides donations described by   Section 12.117(g) to the campus or program in an amount equal to at   least 50 percent of the funds the campus or program is annually   entitled to under Section 12.106.          SECTION 12.  Section 12.101(b-0), Education Code, is amended   to read as follows:          (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,   two-thirds [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.          SECTION 13.  Section 12.1058, Education Code, is amended by   amending Subsection (c) and adding Subsections (d), (d-1), (d-2),   and (d-3) to read as follows:          (c)  Notwithstanding Subsection (a) or (b), an   open-enrollment charter school operated by a tax exempt entity as   described by Section 12.101(a)(3) is not considered to be a   political subdivision, local government, or local governmental   entity unless:                (1)  a [the applicable] statute specifically states   that the statute applies to an open-enrollment charter school; or                (2)  a provision in this chapter states that a specific   statute applies to an open-enrollment charter school.          (d)  A political subdivision other than a school district   shall consider an open-enrollment charter school a school district   for purposes of zoning, project permitting, platting and replatting   processes, business licensing, franchises, utility services,   eminent domain, signage, subdivision regulation, property   development projects, the requirements for posting bonds or   securities, contract requirements, land development standards as   provided by Section 212.902, Local Government Code, tree and   vegetation regulations, regulations of architectural features of a   structure, construction of fences, landscaping, garbage disposal,   noise levels, fees or other assessments, and construction or site   development work.  An open-enrollment charter school does not have   the power of eminent domain.          (d-1)  A political subdivision other than a school district   may not take any action that prohibits an open-enrollment charter   school from operating a public school campus, educational support   facility, athletic facility, or administrative office within the   political subdivision's jurisdiction or on any specific property   located within the jurisdiction of the political subdivision that   it could not take against a school district. A political   subdivision other than a school district shall grant approval in   the same manner and follow the same timelines as if the charter   school were a school district located in that political   subdivision's jurisdiction.          (d-2)  This section applies to both owned and leased property   of the open-enrollment charter school under Section 12.128.          (d-3)  Except as provided by this section, this section does   not affect the authority granted by state law to a political   subdivision to regulate an open-enrollment charter school   regarding health and safety ordinances.          SECTION 14.  Sections 12.106(a) and (i), Education Code, are   amended to read as follows:          (a)  A charter holder is entitled to receive for the   open-enrollment charter school funding under Chapter 48 equal to   the amount of funding per student in weighted average daily   attendance to which the charter holder would be entitled for the   school under Chapter 48 if the school were a school district without   a tier one local share for purposes of Section 48.266, excluding:                (1)  the adjustment under Section 48.052;                (2)  [,] the funding under Sections 48.101 and [,   48.110,] 48.111; [,] and                (3)  [48.112, and] enrichment funding under Section   48.202(a)[, to which the charter holder would be entitled for the   school under Chapter 48 if the school were a school district without   a tier one local share for purposes of Section 48.266].          (i)  The agency may approve a transfer of a charter holder's   remaining funds to another charter holder, a school district   operating a charter school under Subchapter C, or a public junior or   senior college operating a charter school under Subchapter E if the   entity [charter holder] receiving the funds has not received notice   of the expiration or revocation of the entity's [the charter   holder's] charter [for an open-enrollment charter school] or notice   of a reconstitution of the governing body of the charter holder   under Section 12.1141 or 12.115 and satisfies any other   qualification provided by a rule adopted by the commissioner under   Subsection (j).          SECTION 15.  Section 12.110(d), Education Code, is amended   to read as follows:          (d)  The commissioner shall 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 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; and                      (B)  criteria relating to improving student   performance and encouraging innovative programs[; and                      [(C)  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].          SECTION 16.  Section 12.1101, Education Code, is amended to   read as follows:          Sec. 12.1101.  NOTIFICATION OF CHARTER APPLICATION OR   ESTABLISHMENT OF CAMPUS.  (a) The commissioner by rule shall adopt   a procedure for providing notice to the following persons [on   receipt by the commissioner] of an application for a charter for an   open-enrollment charter school submitted under Section 12.110 or of   notice of the establishment of a campus as authorized under Section   12.101(b-4):                (1)  the superintendent and 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.          (b)  The commissioner by rule shall adopt a procedure for   providing notice of the approval of an expansion amendment under   Section 12.114 to the superintendent and the board of trustees of   each school district from which a new campus or the expansion of an   existing campus proposed by the expansion amendment is likely to   draw students, as determined by the commissioner.          SECTION 17.  Section 12.114(d), Education Code, is amended   to read as follows:          (d)  A charter holder may submit a request for approval for   an expansion amendment up to 36 [18] months before the date on which   the expansion will be effective.  A request for approval of an   expansion amendment does not obligate the charter holder to   complete the proposed expansion.          SECTION 18.  The heading to Section 12.117, Education Code,   is amended to read as follows:          Sec. 12.117.  ADMISSION; SUPPORT BY BUSINESS AND INDUSTRY   PARTNER.          SECTION 19.  Section 12.117, Education Code, is amended by   amending Subsections (a) and (d) and adding Subsections (e), (f),   and (g) to read as follows:          (a)  For admission to an open-enrollment charter school, the   governing body of the school shall:                (1)  require the applicant to complete and submit the   common admission application form described by Section 12.1173 not   later than a reasonable deadline the school establishes; and                (2)  on receipt of more acceptable applications for   admission under this section than available positions in the   school:                      (A)  prioritize admitting:                            (i)  a child who attended the school the   previous year;                            (ii)  a child who is a sibling of a student   admitted to the school; or                            (iii)  subject to Subsection (e), the child   of a permanent employee of a business and industry partner under   that subsection, if applicable; and                      (B)  after admitting any eligible applicant   described by Paragraph (A):                            (i)  fill the remaining available positions   by lottery; or                            (ii) [(B)]  subject to Subsection (b), fill   the remaining available positions in the order in which   applications received before the application deadline were   received.          (d)  Notwithstanding Section 12.111(a)(13), an   open-enrollment charter school may admit a child of an employee or   business and industry partner of the school as provided by this   section regardless of whether the child resides in the geographic   area served by the school.          (e)  An open-enrollment charter school may establish a   partnership with a business and industry partner for the support of   the school or a campus of the school by entering into a memorandum   of understanding described by Subsection (f) with that partner.     The memorandum of understanding under Subsection (f) must establish   the maximum enrollment that may be reserved for children of   permanent employees of the business and industry partner, which may   not be more than 50 percent of the total enrollment capacity of the   school or campus supported by the business and industry partner.   The school or campus may not, and a memorandum of understanding   entered into under Subsection (f) may not authorize or require the   school or campus to, unenroll a student who is enrolled at the   school in a school year or refuse to reenroll a student who was   enrolled at the school during the previous school year to create an   available position for the enrollment of a child of a partner   employee.          (f)  A memorandum of understanding between an   open-enrollment charter school and a business and industry partner   must specify the methods by which the business and industry partner   will support the charter school.  Support provided by a business and   industry partner:                (1)  must include a donation of funds or services under   Subdivision (2) equal to a value of at least 50 percent of the funds   the school campus is entitled to annually under Section 12.106; and                (2)  may include:                      (A)  internships;                      (B)  career counseling;                      (C)  academic tutoring; and                      (D)  enrichment activities.          (g)  The commissioner shall adopt rules as necessary to   implement Subsections (e) and (f), including rules for   qualification as a business and industry partner.  The rules must   permit a business and industry partner to be a corporation, limited   liability company, partnership, or other private or public entity.     In adopting rules regarding required donations to qualify as a   business and industry partner, the commissioner shall consider the   following types of donations as permissible:                (1)  real property on which the school or school campus   is built;                (2)  a building or space used by the school or campus at   no cost;                (3)  funds, materials, or labor for renovations to   existing school or campus buildings; and                (4)  capital improvements to the school or campus,   including investments in technology.          SECTION 20.  Section 12.1284(a), Education Code, is amended   to read as follows:          (a)  After extinguishing all payable obligations owed by an   open-enrollment charter school that ceases to operate, including a   debt described by Section 12.128(e), a former charter holder shall:                (1)  remit to the agency:                      (A)  any remaining funds described by Section   12.106(h); and                      (B)  any state reimbursement amounts from the sale   of property described by Section 12.128; or                (2)  transfer the remaining funds to another charter   holder, a school district operating a charter school under   Subchapter C, or a public junior or public senior college operating   a charter school under Subchapter E, as provided by [under] Section   12.106(i).          SECTION 21.  Section 12.141(a), Education Code, is amended   to read as follows:          (a)  The agency shall deposit funds received under Sections   12.106, 12.128, 12.1281, 12.1283, and 12.1284 into the charter   school liquidation fund and may use the funds to:                (1)  pay expenses relating to managing and closing an   open-enrollment charter school that ceases to operate, including:                      (A)  maintenance of the school's student and other   records; [and]                      (B)  the agency's personnel costs associated with   managing and closing the school; and                      (C)  the agency's costs in conducting a special   investigation of an open-enrollment charter school under Section   39.004;                (2)  dispose of property described by Section 12.128;   and                (3)  maintain property described by Section 12.128,   including expenses for insurance, utilities, maintenance, and   repairs.          SECTION 22.  Section 29.171, Education Code, is amended by   adding Subsection (d) to read as follows:          (d)  A school district or open-enrollment charter school   that partners with a private prekindergarten program may use a   facility or location for the program if the facility or location   complies with any municipal ordinance applicable to the operation   of a private prekindergarten program, if any have been adopted by   the municipality in which the facility or location is located.          SECTION 23.  Section 39A.105(a), Education Code, is amended   to read as follows:          (a)  A campus turnaround plan must include:                (1)  details on the method for restructuring,   reforming, or reconstituting the campus;                (2)  a detailed description of the academic programs to   be offered at the campus, including:                      (A)  instructional methods;                      (B)  length of school day and school year;                      (C)  academic credit and promotion criteria; and                      (D)  programs to serve special student   populations;                (3)  if a district charter is to be granted for the   campus under Section 12.0521 [12.0522]:                      (A)  the term of the charter; and                      (B)  information on the implementation of the   charter;                (4)  written comments from:                      (A)  the campus-level committee established under   Section 11.251, if applicable;                      (B)  parents; and                      (C)  teachers at the campus; and                (5)  a detailed description of the budget, staffing,   and financial resources required to implement the plan, including   any supplemental resources to be provided by the school district or   other identified sources.          SECTION 24.  Subchapter A, Chapter 48, Education Code, is   amended by adding Section 48.012 to read as follows:          Sec. 48.012.  ENROLLMENT TRANSPARENCY REPORT. The agency   shall annually prepare and publish a report indicating the amount   of local revenue in excess of entitlement that each school district   would have received if each student in the attendance zone of the   district who was enrolled during the school year in an   open-enrollment charter school or in a different school district   had instead enrolled in that district.          SECTION 25.  Section 212.001, Local Government Code, is   amended by adding Subdivision (1-a) to read as follows:                (1-a)  "Open-enrollment charter school" means a school   granted a charter under Subchapter C, D, or E, Chapter 12, Education   Code.          SECTION 26.  Section 212.902, Local Government Code, is   amended to read as follows:          Sec. 212.902.  SCHOOL DISTRICT AND OPEN-ENROLLMENT CHARTER   SCHOOL LAND DEVELOPMENT STANDARDS. (a)  This section applies to an   agreement [agreements] between a school district or   open-enrollment charter school  [districts] and a [any]   municipality which has annexed territory for limited purposes.          (b)  On request by a school district or open-enrollment   charter school, a municipality shall enter an agreement with the   board of trustees of the school district or the governing body of   the open-enrollment charter school to establish review fees, review   periods, and land development standards ordinances and to provide   alternative water pollution control methodologies for school   buildings constructed by the school district or open-enrollment   charter school. The agreement shall include a provision exempting   the district or charter school from all land development ordinances   in cases where the district or charter school is adding temporary   classroom buildings on an existing school campus.          (c)  If the municipality and the school district or   open-enrollment charter school do not reach an agreement on or   before the 120th day after the date on which the municipality   receives the district's or charter school's request for an   agreement, proposed agreements by the [school] district or charter   school and the municipality shall be submitted to an independent   arbitrator appointed by the presiding district judge whose   jurisdiction includes the [school] district or charter school. The   arbitrator shall, after a hearing at which both the [school]   district or charter school and the municipality make presentations   on their proposed agreements, prepare an agreement resolving any   differences between the proposals. The agreement prepared by the   arbitrator will be final and binding upon both the [school]   district or charter school and the municipality. The cost of the   arbitration proceeding shall be borne equally by the [school]   district or charter school and the municipality.          (d)  A school district or open-enrollment charter school   that requests an agreement under this section, at the time the   district or charter school [it] makes the request, shall send a copy   of the request to the commissioner of education. At the end of the   120-day period, the requesting district or charter school shall   report to the commissioner the status or result of negotiations   with the municipality. A municipality may send a separate status   report to the commissioner. The district or charter school shall   send to the commissioner a copy of each agreement between the   district or charter school and a municipality under this section.          (e)  In this section, "land development standards" includes   impervious cover limitations, building setbacks, floor to area   ratios, building heights and coverage, water quality controls,   landscaping, development setbacks, compatibility standards,   traffic analyses including traffic impact analyses, vehicle   queuing, parking requirements, signage requirements, and driveway   cuts, if applicable.          (f)  Nothing in this section shall be construed to limit the   applicability of or waive fees for fire, safety, health, or   building code ordinances of the municipality prior to or during   construction of school buildings, nor shall any agreement waive any   fee or modify any ordinance of a municipality for an   administration, service, or athletic facility proposed for   construction by a school district or open-enrollment charter   school.          SECTION 27.  Section 552.053, Local Government Code, is   amended by amending Subsection (b) and adding Subsections (b-1) and   (b-2) to read as follows:          (b)  The following may be exempt:                (1)  this state;                (2)  a county;                (3)  a municipality; or                (4)  [a] school districts and open-enrollment charter   schools [district].          (b-1)  For purposes of an exemption granted under Subsection   (b)(4), the exemption must be granted to both school districts and   open-enrollment charter schools.          (b-2)  For purposes of this section, "open-enrollment   charter school" means a school granted a charter under Subchapter D   or E, Chapter 12, Education Code.          SECTION 28.  The following provisions of the Education Code   are repealed:                (1)  Section 12.0522;                (2)  Section 12.053;                (3)  Section 12.0532;                (4)  Section 12.103(c);                (5)  Section 12.106(a-4); and                (6)  Section 39A.107(b).          SECTION 29.  An exemption granted to a school district under   Section 552.053(b)(4), Local Government Code, as that section   existed before the effective date of this Act, automatically   extends to all open-enrollment charter schools located in the   municipality after the effective date of this Act unless the   municipality repeals the exemption before the effective date of   this Act.          SECTION 30.  To the extent of any conflict, this Act prevails   over another Act of the 88th Legislature, Regular Session, 2023,   relating to nonsubstantive additions to and corrections in enacted   codes.          SECTION 31.  This Act applies beginning with the 2023-2024   school year.          SECTION 32.  This Act takes effect immediately if it   receives a vote of two-thirds of all the members elected to each   house, as provided by Section 39, Article III, Texas Constitution.     If this Act does not receive the vote necessary for immediate   effect, this Act takes effect September 1, 2023.