Charter School Transparency and Efficiency Legislation
The Coalition for Education Funding was part of a larger working group that addressed charter school transparency and efficiency in the 86th Legislative Session in Texas. Here are our initial slate of proposals.
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Charter Legislation that Passed and Failed

Beginning in June of 2017 we started working on our legislative approach to address charter school transparency and efficiency. We began working with other groups in a working group to provide the above initial slate of proposals to legislators at the beginning of the 86th Texas legislative session.  Over 20 of these proposals were drafted and filed as bills during the legislative session. In the end, three of our proposals passed as bills:
 
  • TEA will create and manage a standard application for charter schools and maintain the charter school wait list of students.  While this was initially contained in HB 2621 (Bailes) that bill failed in the General Calendar due to a deadline expiration. The bill was revived as an amendment to SB 2293 (Fallon/Dutton) and passed the legislature. It was signed into law by the Governor on June 10, 2019. Effective September 1, 2019.
 
  • Include charter schools in the state whistleblower statute. While this was addressed by HB 3263 (Allen) the bill stalled in the House Calendars Committee. This bill language was later added to HB 3 and passed the legislature.  Makes charter schools subject to the provisions in Chapter 554, Government Code (Whistleblower Act), effective immediately. (Section 12.104(b), Education Code). Also makes charter schools subject to the same early childhood literacy and mathematics plans and college, career, and military readiness plans as required for school districts. (Section 12.104(b), Education Code). Signed by the Governor on June 12, 2019.
 
  • Require charter schools to pay the same amount to the Teacher Retirement System (TRS) as school districts pay for teacher salaries over the statutory minimum, which would free up $25 million in state funds and help to shore up TRS; or create parity that allows school districts to make the same payments to TRS that charter schools make.  HB 953 (King, K.) required charter schools to pay the state’s TRS contributions for the portion of a member’s salary that exceeds the minimum salary schedule, in the same manner required for school districts. The bill passed the House and was referred to the State Affairs Committee in the Senate where it died. The bill language was re-inserted into HB 3 and passed the legislature (Section 825.405, Government Code).  Signed by the Governor on June 12, 2019.
 
In addition to these bills on the working group’s legislative agenda the following legislation related to charters passed or failed to pass with coordinated efforts being made by members of the working group.

S.B. 1454 (Sen. Taylor/Rep. Huberty) – PASSED:
Relating to the ownership, sale, lease, and disposition of property and management of assets of an open-enrollment charter school. This bill:
  • Disallows charter holders from using state funds for supporting operations or activities not related to the educational activities of the charter holder and from being pledged or used for loans or bonds for any other organization, including a charter holder’s or related party’s out-of-state operation.
  • Allows Commissioner audit review of related party real estate transactions, and if a transaction using state funds exceeds fair market value or doesn’t benefit the charter school, the Commissioner may order action. Allows Commissioner by rule to require charter schools to provide the Commissioner a notice of intent to enter a related party transaction along with an appraisal.
  • For reports under Section 44.008, Education Code:
    • Requires charter schools’ annual audits to include a list of all related-party transactions and requires the Commissioner by rule to define “related party.”
    • Requires the charter schools’ annual financial report to separately disclose all financial transactions between a charter school and a related party, separately stating principal, interest, and lease payments and total compensation and benefits provided by the school and any related party for each member of the governing body and each officer and administrator of the school and the related party. Commissioner may adopt rules.
    • Requires a charter school to provide an accounting of each parcel of the school’s real property, including identifying the amount of local, state, and federal funds used to purchase or improve each parcel. Commissioner may adopt rules, including defining “local” funds.
    • Provides for disposition, sale, and transfer of property of a charter school that ceases to operate, with reimbursement to the state for charter holders retaining property.
 
SB 968 (Hughes/Deshotel) – FAILED TO PASS: 
  • Exempts charter schools from all city zoning ordinances so that charters could locate in any zoning district.
  • Requires cities to negotiate separate land development agreements with each charter operator. 

​SJR 74 (Creighton/Murphy) -- FAILED TO PASS: 
  • Provides a property tax exemption to for-profit companies that lease facilities to charter schools.