The Texas Education Agency (TEA) adopts the repeal of §89.1049 and §89.1141; new §§89.1049, 89.1052, 89.1053, and 89.1141; and amendments to §§89.1050, 89.1070, and 89.1131, concerning special education services. The sections clarify federal regulations and state statutes pertaining to delivering special education services to students with disabilities. The repeals of §89.1049 and § 89.1141 and amended §89.1131 are adopted without changes to the proposed text as published in the December 21, 2001, issue of the Texas Register (26 TexReg 10471) and will not be republished. New §§89.1049, 89.1052, 89.1053, and 89.1141 and amended §89.1050 and § 89.1070 are adopted with changes to the proposed text as published in the December 21, 2001, issue of the Texas Register (26 TexReg 10471). The TEA withdraws proposed new §89.1054 based upon a determination that the Texas Education Code (TEC), §37.0021, does not give the TEA explicit rulemaking authority on the issue of seclusion. The TEA withdraws proposed new §89.1152 based upon a letter of interpretation to the TEA from the Office of Special Education Programs, Department of Education. The notices of withdrawal for §89.1054 and §89.1152 can be found in the Withdrawn Rules section in this issue.

The adopted amendments reflect new and revised rules resulting from revisions to the TEC, clarification of rulemaking intent to align with the Individuals with Disabilities Education Act (IDEA) Amendments of 1997, and additional revisions that clarify current practice as well as the commissioner of education's intent regarding special education issues.

During the 77th Texas Legislative Session, 2001, several new sections of special education law were added and other sections were amended. Additionally, requests for clarification were received from both special education stakeholders and the United States Department of Education, Office of Special Education Programs, regarding the commissioner of education's intent with implementation of sections of 19 TAC Chapter 89 adopted effective September 1, 1996, and March 6, 2001. The adopted amendments address the legislative requirements and the requests for clarification. Technical edits are also adopted to correct references to federal statutory requirements.

The most significant issue pertaining to these adopted amendments relates to the development of new §89.1053, relating to the use of restraint and time-out for students with disabilities. This section was developed pursuant to requirements found in TEC, §37.0021. Additionally, during the legislative session in 2001, the TEC was amended to require the commissioner to develop rules regarding the transfer of parental rights to adult students with disabilities. Based on changes to the TEC, the commissioner, under his general rulemaking authority, will create a rule regarding the discretionary placement of students with disabilities in juvenile justice alternative education programs. As a result of these amendments to state statute, the repeal of and new §89.1049 and new §89.1052 are adopted to reflect legislative intent.

Additional changes include: the clarification of requirements in §89.1050(b) for developing an individualized education program (IEP) for students three years of age and older; the clarification of requirements in §89.1050(d) related to timelines for making eligibility determinations and placement decisions; the clarification of intent in §89.1050(e) related to the requirement to provide a written or audiotaped copy of the individualized education program (IEP) as referenced in TEC, §29.005; the clarification of requirements in §89.1050(f) for conducting admission, review, and dismissal (ARD) committee meetings for a student new to a school district; and the addition of a reference in §89.1050(g) to adopted new 19 TAC §89.1053, relating to procedures for use of restraint and time-out. Additional changes also include: the clarification of graduation requirements in §89.1070 and related evaluation requirements for students graduating under the provisions of §89.1070(c); the alignment of §89.1131(e) with current certification requirements for orientation and mobility specialists; and the repeal of and new §89.1141, relating to education service center regional special education leadership to align with federal requirements at 34 CFR, §300.382(j), and current responsibilities for the provision of leadership, training, and technical assistance in the area of special education.

In response to public comments, the following changes were made to 19 TAC Chapter 89, Subchapter AA, since published as proposed.

New §89.1049, Parental Rights Regarding Adult Students, was modified by adding subsection (e) to clarify that the rule does not impact the ability of adult students or parents of minor students to execute a power of attorney.

Amended §89.1050, The Admission, Review, and Dismissal (ARD) Committee, was modified in subsection (f)(1) to add wording to reflect the requirement of written documentation of parental satisfaction with their student's current IEP. Subsection (g) was revised to remove reference to §89.1054, which has been withdrawn.

New §89.1052, Discretionary Placements in Juvenile Justice Alternative Education Programs (JJAEP), was modified in order for this section to conform to other sections in this subchapter. Specific reference to charter schools was removed from subsections (b) and (c). Charter schools are not specifically referenced in this subchapter because commissioner's rules for special education are made applicable to charter schools through the TEC.

New §89.1053, Procedures for Use of Restraint and Time-Out, was modified in several ways. Language regarding a felony was removed from subsection (b)(1)(B) to allow for the use of reasonable and professional judgment in determining the serious nature of imminent property destruction. Language was added to subsections (c)(3) and (j) to reflect that the use of restraint and any behavior management technique should be implemented in consideration of the health and safety of others as well as that of the student. The required implementation date in subsections (d)(1)-(2) and (h)(1)-(2) was changed to April 1, 2003, instead of January 1, 2003, in order to allow additional time to complete training requirements on the use of restraint and time-out. Language in subsections (d)(4) and (h)(4) was revised to clarify that all trained personnel shall receive instruction in current professionally accepted practices and standards regarding behavior management and the use of restraint and time-out. Language in subsection (e)(1)-(3) was revised to address concerns regarding notification to the campus administrator and parents when restraint is used. Subsection (e)(4) was revised to address concerns about when documentation must be placed in the eligibility folder and to emphasize the role of the documentation in relation to the ARD committee's responsibility to address the behavior needs of the student. A technical edit was made in subsection (e)(5) to clarify that more than one staff member may administer restraint. Language was added to subsection (f) to provide additional clarification on the use of restraint and to provide additional examples of activities that do not constitute restraint as it relates to rule requirements. This additional language addresses the issues of self-injurious behaviors and the use of seat belts and safety devices during transportation. A technical change was made to remove the words "behavior intervention plan" in subsection (g)(2) since the acronym BIP is now identified in an earlier subsection. Language in subsection (h)(3) has been rewritten to include the provision that training on the use of time-out must be provided as part of a program which addresses a full continuum of positive behavioral intervention strategies.

New §89.1054, Seclusion, was withdrawn based on a determination that TEC, §37.0021, does not give the agency explicit rulemaking authority on the issue of seclusion.

Amended §89.1070, Graduation Requirements, was modified in subsection (e) to add clarifying language in relation to the role of the ARD committee in the evaluation process prior to graduation. Subsection (f) was revised to reflect that students who participate in graduation ceremonies but who will remain in school to complete their education do not have to be evaluated in accordance with subsection (e).

New §89.1141, Education Service Center Regional Special Education Leadership, was modified in several ways. Subsections (a), (b), and (d) were revised to reflect agency intent to utilize an existing system of professional development to create opportunities for parents and special and general education personnel to receive joint training. Specific state and federal regulations were cited in subsection (a) relative to ESC participation with TEA in this matter. Language was added to subsection (b) relative to each ESC serving as the first point of contact for special education technical assistance, support, and training for school districts, parents, and other community stakeholders. Language was added to subsection (d) to specify that any charges assessed by ESCs must be determined only after priorities have been established through input from affected school districts, including data collected from parents and communities through partnerships with school districts. Subsection (e) was changed to address the need for properly certified personnel regardless of the funds used to offer the services, while maintaining the original intent to provide flexibility in the delivery of regional services for students with visual impairments.

New §89.1152, Presentment, was withdrawn based on a letter of interpretation to the TEA from the Office of Special Education Programs, Department of Education.

The following comments were received regarding adoption of the repeals, new sections, and amendments.

General Comments.

Comment. A chairperson at an elementary school commented that all changes in the proposed rule packet seemed appropriate.

Agency Response. The agency, in general, agrees with this comment. However, modifications have been made to the rules as a result of public comment.

§89.1049. Parental Rights Regarding Adult Students.

Comment. A representative from Advocacy, Inc. commented that the rules should be supplemented by an addition to §89.1055, Content of the Individualized Education Program (IEP), requiring that the IEP of a student expected to continue receiving special education services from the public school after his/her 18th birthday address how the student will receive training on the special education process and how to be his/her own advocate during that process.

Agency Response. The agency disagrees. Any revision to §89.1055 is beyond the scope of this rulemaking process and would have to be addressed in another rulemaking process.

Comment. A director of special education, a principal, and an assistant principal in charge of special education commented that the proposed rule is clear and should be passed as proposed.

Agency Response. The agency agrees but has added additional clarifying language in subsection (e).

Comment. Five parents, a case manager, and a commenter whose role is unidentified commented that they disagree with the rule stating that a parent should not be removed from the process and that some students are not able to make appropriate educational decisions without their parent's input. Some commenters also stated that having the parents obtain legal guardianship could not only put a financial burden on the parent, but also could put a negative stigma on the child.

Agency Response. The agency disagrees. The agency believes that the rule provides for the appropriate and required transfer of parental rights to an adult student, unless action under the Probate Code has prevented the transfer. Furthermore, the agency does not believe that the rule as written precludes continued parent participation in the special education process, even when guardianship is not obtained. Parents can continue to be involved in the process at the request of either the district or the adult student and can continue to provide input into educational decisions.

Comment. A representative of United Cerebral Palsy of Texas recommended that: (1) no guardianship be required for a parent to participate; (2) parents and students be able to fully participate in all admission, review, and dismissal (ARD) meetings; (3) students receive self-advocacy training; and (4) students receive training on their rights and responsibilities under the Individuals with Disabilities Education Act, Part B (IDEA-B).

Agency Response. The agency disagrees. The agency does not believe that the rule as written precludes continued parent participation in the special education process, even when guardianship is not obtained. Parents can continue to be involved in the process at the request of either the district or the adult student and can continue to provide input into educational decisions. Additionally, the agency believes that any rule revisions related to the suggestions for self-advocacy and other training would more appropriately be reviewed and addressed within the scope of other special education rules.

Comment. A representative of the Texas Center for Disabilities Studies expressed concerns about the rule and stated that eliminating a parent's right to be involved in the educational decision making process could severely limit a student's ability to receive educational services past the age of 18. The representative also expressed concerns about parents being forced to go through an expensive legal guardianship process.

Agency Response. The agency disagrees. The agency does not believe that the rule as written precludes continued parent participation in the special education process, even when guardianship is not obtained. Parents can continue to be involved in the process at the request of either the district or the adult student and can continue to provide input into educational decisions. The agency also believes that parents and adult students will be able to resolve issues regarding educational decision making through processes other than guardianship.

Comment. A director of special education and a parent commented that the rule is a positive change that educates parents about the laws and shows the child's disability is not an inability to make decisions.

Agency Response. The agency agrees.

Comment. A government affairs specialist for The ARC of Texas and a commenter whose role was unidentified commented that subsection (a) complies with federal regulations and clarifies that the meeting notices will be sent to both the parent and student after a transfer of rights.

Agency Response. The agency agrees.

Comment. Three parents and two case managers expressed concerns about parents' continued participation in admission, review and dismissal (ARD) committee meetings after a student turns 18. The case managers stated that parents should continue to have a legal voice, and a parent requested clarification on safeguards for students if parents do not choose guardianship.

Agency Response. The agency does not believe that the rule as written precludes continued parent participation in the ARD process. However, the agency believes that it is appropriate for rights to transfer to students with disabilities at the age of majority, just as they do to students without disabilities, unless it has been determined by a legal process that this is not appropriate based on the competence of the student to make educational decisions. Parents can continue to support students in educational decision making after a transfer of rights. The agency will provide additional guidance on these issues and supports the provision of training to both parents and students to facilitate the transfer process and appropriate educational decision-making.

Comment. Two parents expressed concerns that there needs to be a plan for information dissemination to parents and stated that parents need to understand about guardianship and what options, other than guardianship, are available when rights transfer to the student so that a parent can continue to be involved.

Agency Response. The agency will provide additional guidance on these issues and supports the provision of training and dissemination of information to both parents and students to facilitate the transfer process and appropriate educational decision-making.

Comment. An Education Service Center (ESC) special education director and fifty-one school staff members questioned how much greater the responsibility of the ARD committee would be if the student cannot make competent decisions and expressed concerns about the cost of obtaining guardianship.

Agency Response. The agency will provide additional guidance on these issues. The ARD committee will continue to play its appropriate role in educational decision-making; however, determinations of competence will not be made by the ARD committee. Additionally, the agency believes that a guardianship proceeding under the Probate Code is the only mechanism available in state law for determining that an individual with a disability who has reached the age of majority is not competent to make educational decisions.

Comment. A parent, a high school principal, and two special education directors commented that language should be added to the rule to allow a parent or another appropriate individual to be appointed to represent a student if the student is deemed incompetent by the ARD committee. The parent and high school principal also stated that the phrase, "unless the student's parent or other individual has been granted guardianship of the student under the Probate Code, Chapter XIII, Guardianship" should be removed from subsection (a) and that the word "competent" should be added before the phrase "adult student" in the first sentence of subsection (d).

Agency Response. The agency disagrees. A guardianship proceeding under the Probate Code is the only mechanism available in state law for determining that an individual with a disability who has reached the age of majority is not competent to make educational decisions. Therefore, the reference to the Probate Code continues to be necessary. Additionally, the agency does not believe the addition of the word "competent" is necessary in subsection (d) to clarify the intent of the rule.

Comment. The executive director for the Texas Council for Developmental Disabilities and a program administrator for the Disability Policy Consortium expressed concerns that many adult students may not have the requisite skills to make appropriate educational decisions and that the rules would motivate parents to seek guardianship even when students were competent to make decisions in order to maintain a presence at the ARD. The commenters recommended that the rules require representation by an independent, neutral party from an advocacy or parent training organization and training for students about their educational rights.

Agency Response. The agency disagrees. The agency does not believe it is necessary or appropriate to create a higher standard regarding required representation of adult students by an independent advocacy or parent training organization. The agency will provide additional guidance on these issues and supports the provision of training and dissemination of information to both parents and students to facilitate the transfer process and appropriate educational decision-making, but the agency does not believe that it is necessary to specify training procedures in the rule.

Comment. A parent recommended that a student receive training on the special education process and how he/she can fully participate in the process.

Agency Response. The agency agrees. The agency will provide additional guidance and supports the provision of training and dissemination of information to both parents and students to facilitate the transfer process and appropriate educational decision-making. However, the agency does not believe that it is necessary to specify training procedures in the rule.

Comment. A representative of the Learning Disabilities Association of Texas recommended that the rule require a transition plan to be established allowing for preparation of the student to assume the responsibility for educational decision-making.

Agency Response. The agency disagrees. The agency will provide additional guidance and supports the provision of training and dissemination of information to both parents and students to facilitate the transfer process and appropriate educational decision-making. However, the agency does not believe that it is necessary to specify training procedures in the rule.

Comment. A special education teacher suggested that a form be provided to parents at the ARD meeting telling them they need to apply for guardianship.

Agency Response. The agency disagrees. The agency does not believe that a written notice separate from the statement contained in the individualized education program (IEP) is necessary. Furthermore, it is not at all appropriate for districts to advise parents to seek guardianship. Parents will be able to review the information as it is contained in the IEP and make their own decisions.

Comment. The executive directors of the Texas Council of Administrators of Special Education, the Texas Elementary Principals and Supervisors Association, and the Texas Association of Secondary School Principals and the associate executive directors for the Texas Association of School Boards and the Texas Association of School Administrators recommended that the wording in subsection (c) be revised to read, "within 20 school days of the day the student reaches age 18" instead of, "at the time the student reaches the age of 18." It also was recommended that clarifying language be added to (c) regarding power of attorney, such as, "Parent may act in the place of adult students if a valid power of attorney has been executed."

Agency Response. The agency believes the wording in subsection (c) regarding the timing of notice provides sufficient guidance and flexibility regarding the dissemination of this notice. This rule does not impact the ability of adult students or parents of minor students to execute a power of attorney, and language to this effect has been added in subsection (e).

Comment. One parent and one special education director indicated that power of attorney should be included in the rule. The special education director additionally requested that direction be provided on how to handle power of attorney for incarcerated students.

Agency Response. The agency agrees in part and disagrees in part. This rule does not impact the ability of adult students or parents of minor students to execute a power of attorney, and language to this effect has been added in subsection (e). The agency does not believe it is necessary to add specific reference to incarcerated students in relation to the new subsection (e).

Comment. Sixteen special education administrators and an ESC special education director requested clarification regarding the role of powers of attorney in the transfer of rights process.

Agency Response. This rule does not impact the ability of adult students or parents of minor students to execute a power of attorney, and language to this effect has been added in subsection (e).

Comment. A transition coordinator expressed concerns about the proposed effective date of the rule being after most annual ARDs are completed and requested clarification regarding whether rights remain with the parents if the ARD already has been conducted.

Agency Response. The agency believes an early implementation of this rule is appropriate given that the statute that transfers rights has been in effect since June 13, 2001. Additionally, the age of the student rather than the timing of ARD committee meetings will impact the transfer of rights.

Comment. A special education director requested clarification regarding whether a parent can file for due process after rights have been transferred to the adult student and whether parent disagreement triggers reconvening in 10 days if the student agrees.

Agency Response. The agency will provide additional guidance and clarification on these issues through future training efforts. However, a transfer of rights does give the student the rights to educational decision-making, including the right to make decisions regarding filing for a due process hearing or requesting a 10-day ARD recess.

Comment. A special education department chairperson requested clarification regarding why notices must be provided to both the parent and adult student if rights have transferred.

Agency Response. The rule requires this dual notification in compliance with federal regulations.

Comment. An educational diagnostician expressed concern for parents of students who are 18 year of age or older and who have not yet been able to obtain guardianship in relation to the possibility of losing services.

Agency Response. The agency understands the concern and believes that it will be crucial for all parties to work together during this time of transition to ensure the appropriate provision of services.

Comment. The executive director of the Texas Department of Protective and Regulatory Services requested clarification regarding whether Child Protective Services, as managing conservator, will receive notice of transfer of parental rights when a student is in foster care and whether an adult student can refuse to let parents participate if the school invites the parent to an ARD.

Agency Response. The agency will provide additional guidance and clarification on these issues through future communications and training efforts.

Comment. Three special education directors, a director of special programs, an assistant principal, and an assistant superintendent commented that the requirements for notice contained in subsection (c) appear to be redundant and an excessive notice requirement given the wording in subsection (a). A special education director and the assistant superintendent additionally requested that time should be allowed after the 18th birthday to provide notice.

Agency Response. The agency disagrees. The notice requirements in the rule are aligned with federal regulations. Additionally, the wording in subsection (c) regarding the timing of notice provides sufficient guidance and flexibility regarding the dissemination of this notice.

Comment. Two ESC special education directors, seven directors of special education, a special education teacher, and fifty-one school staff members requested that rule wording be clarified regarding the window within which the notice in (c) must be provided. Some commenters requested adding "within 20 days" or "within 30 days" of when the student reaches the age of 18, while others indicated that the wording should state "on or before" the student reaches the age of 18.

Agency Response. The agency disagrees. The wording in subsection (c) regarding the timing of notice provides sufficient guidance and flexibility regarding the dissemination of this notice.

Comment. A transition coordinator commented in support of the rule clarity in subsection (d).

Agency Response. The agency agrees.

Comment. A special education department chairperson suggested that parents and adult students be given equal rights instead of giving total autonomy to the adult student.

Agency Response. The agency disagrees. Texas Education Code (TEC), §29.017, does not provide for the sharing of any educational right other than a right to notice under TEC, Chapter 29, Subchapter A, or 20 U.S.C. §1415. Additionally, the agency believes that sharing of rights over the long-term can increase the procedural complexity of special education without increasing positive outcomes for students.

Comment. A parent and a regional program director for The ARC of Texas requested that rule language be changed to indicate that notice of ARD meeting would constitute invitation to the parent(s).

Agency Response. The agency disagrees and believes that the right to notice and the right to attend and participate in ARD committee meetings as an ARD committee member are two separate rights under federal and state law.

Comment. A representative of The ARC of Texas recommended that language be removed from the proposed rule and districts be allowed to individually interpret what the rule means in relation to notice of ARD meeting constituting parent invitation.

Agency Response. The agency disagrees and believes that the requested change would reduce rule clarity.

Comment. A governmental affairs specialist for The ARC of Texas and a commenter whose role is unidentified stated the position that schools should be free to include parents in ARD/IEP meetings and that parents should be free to attend meetings (if there is no objection) without an affirmative invitation.

Agency Response. The rule explicitly recognizes the right of a district or adult student to invite individuals who have knowledge or special expertise regarding the student, including parents. Additionally, an adult student may choose to have a parent or another individual attend an ARD committee meeting for the purpose of providing support to the student.

Comment. The president of The ARC of Texas, Wichita County, suggested that the section of the rule relating to notice not constituting an invitation be deleted so that parents can attend and participate without concerns about having to get guardianship to continue to participate.

Agency Response. The agency believes that TEC, §29.017, transfers to adult students the rights to ARD committee membership and participation. Thus, merely deleting this section of rule would not prevent those rights from transferring to adult students.

Comment. A governmental affairs specialist for The ARC of Texas, the president of The ARC of Texas, Wichita County, and a commenter whose role is unidentified recommended that rule language be added to require self- advocacy training for students.

Agency Response. The agency disagrees. Any rule revisions related to this suggestion are beyond the scope of the current rule changes and would have to be addressed in another rulemaking process.

§89.1050. The Admission, Review, and Dismissal (ARD) Committee.

Comment. A parent noted specific ARD committee responsibilities as referenced in subsection (a) and questioned whether the district in which her child was enrolled complied appropriately with the requirements. The parent also commented positively on the availability of the State Developed Alternative Assessment (SDAA).

Agency Response. The agency agrees that implementation of the SDAA was an important accomplishment. Concerns regarding the implementation of a program for a specific student go beyond the scope of this rulemaking activity and would need to be resolved through dispute resolution processes.

Comment. One special education director and one assistant superintendent commented that subsection (b) of the proposed rule provides clarity.

Agency Response. The agency agrees.

Comment. A special education director commented that the proposed rule provides clarity to subsections (b) and (d)-(g) and meets federal and Texas Education Code requirements.

Agency Response. The agency agrees.

Comment. A representative from the Learning Disabilities Association of Texas recommended changing the reference "Admission, Review and Dismissal Committee" to "Individualized Education Program (IEP) Committee" to align with the Individuals with Disabilities Education Act.

Agency Response. The agency disagrees. Since Texas combines responsibilities for both eligibility determinations and IEP and placement decisions into a single meeting, it would be inappropriate to refer to the ARD committee as the IEP committee.

Comment. One special education director and one special education department chairperson agreed with the proposed rules.

Agency Response. The agency agrees.

Comment. One ESC special education director and fifteen special education administrators supported the clarification in proposed rule regarding when the 30-day timeline falls during the summer and school is not in session.

Agency Response. The agency agrees.

Comment. A representative from the Learning Disabilities Association of Texas expressed concern about the outcome of the full and initial evaluation when the 30-day timeline falls during the summer and school is not in session.

Agency Response. The agency disagrees. The changes to subsection (d) of the rule do not change previous practice by local education agencies in relation to the timing of eligibility determinations that are impacted by summer break. The timeline for conducting a formal ARD committee meeting does not prevent interim findings and information from being discussed prior to the official meeting.

Comment. A parent/diagnostician and an unidentified commenter recommended deleting from subsection (d) the text "unless the full and individual initial evaluation indicates that the student will need extended school year (ESY) services during the summer" in order to align with ESY guidelines.

Agency Response. The agency disagrees and does not believe that the wording conflicts with ESY guidelines.

Comment. One special education director recommended that the rule be changed as it relates to initial evaluations completed during the summer to extend the 30-calendar day timeline for conducting an ARD committee meeting to begin counting the first day of school.

Agency Response. The agency disagrees. A student should have the benefit of appropriate programming as determined by the ARD committee from the beginning of school to avoid disruptions in the instructional process.

Comment. A parent indicated that the changes to subsection (e) were positive.

Agency Response. The agency agrees.

Comment. A parent who also represents an advocacy organization requested that the wording in subsection (e) read, "In the event TEC §29.005(d)(2) applies, the district shall provide…" as opposed to the district shall make a good faith effort to comply.

Agency Response. The agency disagrees. The wording as proposed is consistent with TEC, §29.005(d)(2).

Comment. One special education director recommended that subsection (e) be revised to add a provision to allow a parent to waive receipt of the audiotaped record of the ARD. Another special education director requested that the provision of an audiotaped version of the ARD committee meeting not be required if the parent attended the ARD committee meeting.

Agency Response. The agency disagrees and believes that the changes proposed in the comment would violate the requirements of TEC, §29.005.

Comment. The superintendent of the Texas School for the Deaf (TSD) requested clarification regarding the scope of subsection (f) as it relates to students referred to the TSD by a parent or placed in the TSD by a local education agency.

Agency Response. The agency believes that the TSD has the same flexibility under the rules as school districts.

Comment. A representative of the Alamo Area Council of Administrators of Special Education commented that some directors believe the proposed changes to subsection (f) would allow additional flexibility, while others believed that the changes would have limited practical impact.

Agency Response. The agency agrees in part and disagrees in part. The rule provides as much flexibility as possible under the requirements found in federal regulation and state law. Any potential reduction in the paperwork and time burden for both parents and local education agencies, when it does not sacrifice quality of services for students, promotes positive program results.

Comment. One special education director, one parent, and an unidentified commenter support subsection (f) of the proposed rules.

Agency Response. The agency agrees.

Comment. One principal and one assistant principal commented that the structure of subsection (f) provides additional clarity.

Agency Response. The agency agrees.

Comment. One special education director and one assistant superintendent support the wording in subsection (f) since it could prevent a useless meeting.

Agency Response. The agency agrees.

Comment. One parent indicated support for allowing a new school district to implement the IEP developed in a previous school district.

Agency Response. The agency agrees, within the provisions specified in the rule.

Comment. A representative of The ARC of Texas, two representatives of a local ARC chapter, the executive director of the Texas Council for Developmental Disabilities, a director at United Cerebral Palsy, a representative of Advocacy, Inc., an advocate, two parents, a special education director, and an assistant superintendent suggested that the proposed rule be revised to require that an ARD committee meeting be held when a student transfers from one school district to another. Some expressed concerns about the potential inadequacy of the IEP received from the previous school district, while some stated their belief that the Individuals with Disabilities Education Act required that a formal meeting be held.

Agency Response. The agency disagrees. The agency believes the rule wording falls clearly within guidance found in federal regulations and commentary. Additionally, the wording in subsection (f)(1) requires that a meeting be held if either the parent indicates that he/she is dissatisfied with the IEP or the new school district determines that the IEP is not appropriate and cannot be implemented as written. This establishes safeguards to address the expressed concerns.

Comment. An educational diagnostician and two directors of special education requested clarification and expressed concern in relation to subsection (f)(1) regarding who in the district will make the decision about whether the current IEP is appropriate and can be implemented as written.

Agency Response. The agency believes the current wording provides needed flexibility to districts while meeting the requirements of the IDEA.

Comment. Two special education administrators, three educational diagnosticians, and three speech pathologists requested that the phrase, "and a copy of the student's IEP is available" from subsection (f)(1) be revised to allow a school district to implement temporary special education services upon phone or written verification from the previous school district that the student was receiving special education services. The commenters went on to state that the district then could conduct a 30 school day placement ARD meeting after becoming familiar with the student so as not to rely on another district's written IEP.

Agency Response. The agency disagrees and believes the implementation of temporary special education services without an IEP either being available or developed violates the requirements of the IDEA. The rule as worded does not prevent a district from conducting ARD meetings to develop their own IEPs.

Comment. A director of special education indicated that the phrase, "and the district multidisciplinary team determines and documents" should be added to subsection (f)(1) to specify the required participants in the initial district decision-making regarding the appropriateness of the IEP and the ability of the district to implement it.

Agency Response. The agency disagrees. Federal regulations and commentary do not require that all members of the multi-disciplinary team be involved in decision-making under (f)(1).

Comment. Two special education administrators requested that the rule contain a statement of what must be addressed at the temporary ARD, specifically mentioning placement and related services.

Agency Response. The agency does not believe it is necessary to develop rules regarding items to be addressed at a temporary ARD.

Comment. The executive directors of the Texas Council of Administrators of Special Education, the Texas Elementary Principals and Supervisors Association, and the Texas Association of Secondary School Principals and the associate executive directors for the Texas Association of School Boards and the Texas Association of School Administrators recommended that, in relation to subsection (f)(1), wording should be added to reflect that written documentation is required and should be part of the student's eligibility folder.

Agency Response. The agency agrees and has added wording to reflect that written documentation is required.

Comment. A principal expressed concerns and requested clarification regarding the process for documenting whether a parent is satisfied with the current IEP as reference in subsection (f)(1).

Agency Response. The agency agrees and has added language to require written documentation.

Comment. The executive directors of the Texas Council of Administrators of Special Education, the Texas Elementary Principals and Supervisors Association, and the Texas Association of Secondary School Principals and the associate executive directors for the Texas Association of School Boards and the Texas Association of School Administrators recommended that, in relation to subsection (f)(2)(B), the TEA specify that the ARD needs to address placement and related services and add a statement that the ARD document shall reflect the program, placement and related services agreed to by the parent or adult student and the school district.

Agency Response. The agency disagrees and believes that these issues are adequately addressed in other laws.

Comment. A director of special education recommended that the phrase, "and/or related services" be added to subsection (f)(2)(B) in addition to the phrase, "special education" to serve as a reminder to address related services and requested that the rule contain a statement of what must be addressed at the temporary ARD.

Agency Response. The agency disagrees. The agency does not believe it is necessary to add the phrase "and/or related services" or develop rules regarding items to be addressed at a temporary ARD.

Comment. An educational diagnostician who also is a parent and a special education coordinator requested clarification regarding the definition of IEP in certain subsections and questioned which portion, the entire document or just goals and objectives, are being referenced when the term IEP is used.

Agency Response. The agency will address these concerns through training efforts implemented through the education service centers.

Comment. Fifteen special education administrators and one education service center special education director support the flexibility contained in subsection (f)(1) and request clarification regarding the 30 school day requirement in subsection (f)(2)(b) and whether it is tied to the date of enrollment or the date the parent presents the IEP.

Agency Response. The agency agrees with the comment regarding subsection (f)(1) and believes the wording in subsection (f)(2)(b) allows flexibility for circumstances in which a district is unaware at the time of enrollment that a student previously has received special education services. Additionally, language has been added to subsection (f)(1) to clarify that written documentation is required.

Comment. An educational diagnostician, a principal, a parent case manager, a representative of The ARC of Texas, the executive director of the Texas Council of Developmental Disabilities, a representative of a local ARC organization, a representative from Advocacy, Inc., a special education director, and an unidentified commenter indicated that subsection (f)(3) clarifies requirements and will promote more timely exchange of records.

Agency Response. The agency agrees.

Comment. One transition coordinator commented in support of the wording retained in subsection (f)(2) regarding a 30 school day requirement for conducting an ARD meeting in relationship to the 30 calendar day requirement in (f)(3) for furnishing student records, indicating that this should allow the receiving district time to receive and review records prior to the ARD.

Agency Response. The agency agrees.

Comment. An educational diagnostician who also is a parent requested that language be added to subsection (f)(3) to include psychological assessments in the special education records that are to be released when a student transfers to a new school district.

Agency Response. This comment raises the issue of an apparent conflict between laws and it would not be appropriate to resolve that conflict in this forum.

Comment. Two parents and one unidentified commenter recommend requiring parental consent prior to the release of educational records.

Agency Response. The agency disagrees and believes that the process for release of records should be expedited to the greatest extent possible within the scope of federal and state requirements.

Comment. An assistant principal agreed with the requirement that records be sent within 30 calendar days, stating that even a more stringent timeline could be applied.

Agency Response. The agency agrees in part and believes that the 30-calendar day timeline appropriate and is the timeline established in TEC, §25.002.

Comment. A director of special education requested that the wording in subsection (f)(3) be changed to reflect that records must be furnished within 30 days of receipt of the request for records, instead of within 30 days of student enrollment in the new district, based on concerns regarding the timeliness of requests.

Agency Response. The agency acknowledges these concerns but disagrees and supports collaboration among local education agencies to expedite the sharing of student records so that timely placement decisions can be based on thorough and accurate information.

Comment. A director of special education expressed concerns that the 30-day requirement for furnishing records to a new school district may be unreasonable when the district does not know where the student is now enrolled and general records requests often do not make it to the special education department.

Agency Response. The agency acknowledges these concerns but supports collaboration among local education agencies to expedite the sharing of student records so that timely placement decisions can be based on thorough and accurate information.

Comment. An assistant superintendent expressed concerns about districts that do not comply with the requirements of subsection (f)(3) regarding timely transfer of student records and those who require parental consent regardless of the law.

Agency Response. The agency acknowledges these concerns but supports collaboration among local education agencies to expedite the sharing of student records so that timely placement decisions can be based on thorough and accurate information. Consideration will be given to methods for determining compliance with legal requirements regarding transfer of student records.

Comment. The Alamo Area Council of Administrators of Special Education requested clarification regarding what constitutes student records as referenced in subsection (f)(3).

Agency Response. The agency will address these concerns through training efforts implemented through the education service centers.

Comment. An educational diagnostician who also is a parent requested that subsection (h)(1) be revised to provide additional flexibility regarding the 10-day recess requirement.

Agency Response. The agency disagrees. Any rule revisions related to this suggestion are beyond the scope of the current rule changes and would have to be addressed in another rulemaking process.

Comment. A parent indicated that the wording in subsection (h)(4) is a disincentive for parents and school districts to collaborate and allows a district to simply outlast a parent and do what they want.

Agency Response. The agency disagrees. Any rule revisions related to this suggestion are beyond the scope of the current rule changes and would have to be addressed in another rulemaking process. Additionally, the ability of the local education agency to implement the IEP is in line with federal requirements.

§89.1052. Discretionary Placements in Juvenile Justice Alternative Education Programs (JJAEP).

Comment. A special education director commented that the rule language allows special education students to be held to a lower standard, that JJAEPs should not have the authority to single out special education students to have them removed from the program, and that the rule will allow more excuses for maladaptive behavior while avoiding consequences.

Agency Response. The agency disagrees. The rule language as written is in close alignment with Texas Education Code (TEC), §37.004, which specifies that students with disabilities will be disciplined within the requirements found in federal regulations, and which specifies that JJAEP administrators will have an active decision-making role when students with disabilities are expelled by districts for discretionary offenses.

Comment. A licensed specialist in school psychology and two directors of special education expressed concerns that the rule would allow JJAEP administrators to disagree with a school district and possibly request an admission, review and dismissal (ARD) committee meeting to reconsider a student's placement. One special education director recommended that the proposed rule be revised to include a provision that "the JJAEP administrator may not arbitrarily return the student to the school district without the consent of the ARD committee."

Agency Response. The agency disagrees. The requirements as specified in rule are in close alignment with the requirements found in TEC, §37.004, and simply implement the law as written. The rule does not create a separate, higher standard than that already noted in law. However, neither the law nor the rule removes the authority of ARD committees to make placement decisions. TEC, Chapter 37, also specifies methods by which school districts and county juvenile boards/JJAEPs must establish agreements through the use of memoranda of understanding.

Comment. A parent commented in opposition of rule and indicated that the rule should require an ARD committee meeting at the new district to review a student's individualized education program (IEP) to ensure it is adequate.

Agency Response. The agency disagrees. The standards specified in the rule allow for a thorough review of the student's IEP by both school district and JJAEP personnel to ensure that the IEP can be appropriately implemented.

Comment. A special education director, a special education chairperson, a principal, and an assistant principal for special education support the proposed rule change.

Agency Response. The agency agrees.

Comment. One special education director proposed that the rule be eliminated and procedures remain as they currently are written. The director also expressed concerns about sending notice and a copy of the IEP to the JJAEP administrator since parents might not agree to this release of information.

Agency Response. The agency disagrees. The requirements as specified in rule are in close alignment with the requirements found in TEC, §37.004, and simply implement the law as written. The rule does not create a separate, higher standard than that already noted in law. Additionally, the concerns expressed regarding release of student information are moot under the Family Educational Rights and Privacy Act and the Individuals with Disabilities Education Act, Part B (IDEA-B).

Comment. An assistant superintendent for instruction expressed concerns that the presence of a JJAEP administrator at a manifestation determination ARD meeting could send the message to the parents that placement at the JJAEP already had been determined prior to the expulsion hearing.

Agency Response. The agency disagrees. The attendance of knowledgeable personnel at an ARD committee meeting to serve as resources in decision-making is important to the proper functioning of the ARD committee.

Comment. One special education director commented that they did not work in a county with a JJAEP.

Agency Response. Rule language will apply only to school districts within counties that have a JJAEP.

Comment. An administrator of a residential treatment center expressed concerns that many students with mental health problems are in recent years making their way to treatment through the juvenile justice system as opposed to having their needs met before they end up in the system. The concern with this is that the students are more difficult to work with after they come through the juvenile justice system, while many other students with mental health needs may not be identified in the juvenile justice system and may not get the treatment they need.

Agency Response. The agency supports the goal of identifying mental health issues and providing support to students prior to the student ending up in the juvenile justice system. Systems are in place to provide support to school districts in working with students with mental health needs, and continued effort is needed to address the mental health needs of youth in Texas.

Comment. A representative of the Learning Disabilities Association of Texas requested that the proposed rule be amended requiring a JJAEP representative's involvement in ARD activities and commented that the current permissive language a on JJAEP member's participation may not be in the best interests of the student.

Agency Response. The agency disagrees. The commissioner of education does not have the administrative rulemaking authority to require juvenile justice staff to attend ARD meetings. The rule language ensures the access of JJAEP administrators to the ARD committee meeting, which was the intent of the law.

§89.1053. Procedures for Use of Restraint and Time-Out.

Comment. A parent favors the proposed rules because they will give added support to those who request appropriate behavioral supports needed by children to benefit from their educational programming.

Agency Response. The agency agrees.

Comment. One parent who also is a nurse challenged educators to minimize the use of restraint and be accountable for the use of physical force with a child in an emergency.

Agency Response. The agency agrees.

Comment. A representative of Advocacy, Inc., two representatives of The ARC of Texas, president of The ARC of Wichita County, representatives of the Texas Center for Disability Studies and United Cerebral Palsy of Texas, the executive director of the Texas Council of Developmental Disabilities, two parents, a manager in the private sector, and two directors of special education expressed support for the rules on restraint and time-out.

Agency Response. The agency agrees.

Comment. A representative of the Learning Disabilities Association of Texas commented that, while the rules provide safeguards and accountability on the use of restraint and time-out, it is hoped that appropriate services and comprehensive behavior intervention plans will circumvent behaviors that require such interventions.

Agency Response. The agency agrees and believes that training efforts, as referenced in the rule, will support prevention efforts.

Comment. A special education director noted that current policies and procedures in his/her district are in compliance with the proposed rule, while another special education director noted that the rules are necessary to fulfill requirements.

Agency Response. The agency agrees that the rules are necessary to fulfill the requirements of TEC, §37.0021, and that a district already may have policies and procedures that comply with the proposed rules.

Comment. A high school principal commented that it is nearly impossible to discipline students with disabilities, and that the discipline flowchart is ridiculously complicated and convoluted and an obstacle in doing what is best for students. The principal also commented that the increase in paperwork caused by commissioner's rules is negatively impacting education and frustrating teachers.

Agency Response. The agency understands the expressed concerns but believes that the flowchart is a valuable tool that simply reflects the discipline requirements imposed by the Individuals with Disabilities Education Act, Part B (IDEA-B). The agency believes the paperwork related to this rules package is necessary to meet the spirit and intent of TEC, §37.0021, and to promote access to information that is important to educational decision-making.

Comment. A teacher commented that the rule is aimed more at the secondary level and stated that students with very low IQs or who are in elementary school should not have the freedom to leave a room or time-out when they are angry or violent.

Agency Response. The agency disagrees and believes the rules address a broad scope of individual student needs. Additional language has been added to the rule to provide clarification on restraint. The definition of time-out and the prohibition regarding the use of locked, seclusionary time-out for students with disabilities are found in TEC, §37.0021, and the commissioner does not have the authority to change the related requirements.

Comment. A special education teacher supports the language stating that special education students should be treated with dignity and respect but questioned the narrow scope of using a felony as part of the language in the definition of emergency. The teacher suggested consideration of the use of escorts out of a classroom in lieu of restraint.

Agency Response. The agency agrees in part and disagrees in part. Language regarding a felony has been removed from the rule to allow for the use of reasonable and professional judgment in determining the serious nature of imminent property destruction. However, the agency disagrees with the addition of language specifically referencing the use of escorts and notes that any use of escorts would have to comply with §89.1053.

Comment. A parent commented in opposition to the use of restraint and requested clarification regarding the definition of restraint and the ability of a district to use restraint, while a grandparent who also is an advocate requested the use of restraint be eliminated altogether and prevention used instead.

Agency Response. The agency through §89.1053 has limited the use of restraint to certain emergency situations. However, restraint may be necessary within these limited emergency situations to protect students and/or staff. Additional clarification regarding restraint will be disseminated in future training efforts.

Comment. A special education teacher commented that restraint and time-out are necessary tools of the profession and requested clarification regarding the implementation of training.

Agency Response. The agency through rule making has created procedures in compliance with TEC, §37.0021, to regulate the use of restraint and time-out for students with disabilities. Additional information will be provided regarding training.

Comment. A parent commented that the rules on use of restraint are appropriate and allow for emergency provisions as appropriate. The parent challenged school personnel to limit the use of restraint, and questioned the delay in data collection.

Agency Response. The agency agrees in part. The implementation timeline in relation to PEIMS data is necessary to allow the agency to revise the PEIMS data standards.

Comment. A middle school teacher stated that special education does not mean special privileges, and questions why the rule says students with disabilities cannot be removed from a classroom for disciplinary reasons and why disruptive students cannot be sent to the office or removed to time-out.

Agency Response. The agency does not believe the rule prohibits the removal of a disruptive student to the principal's office or from a classroom. However, the agency does not believe that a disruptive student, whose behavior does not meet the definition of emergency, should be restrained. Restraint cannot be used to address defiant and disruptive behavior unless the behavior meets the definition of emergency, and the agency believes the rule addresses the spirit and intent of TEC, §37.0021, and is consistent with professionally accepted practices and standards.

Comment. A representative of the International Council for Children with Behavior Disorders (CCBD) and a college instructor commented in support of the rules but expressed concerns about the need for in-depth, consistent, quality training. The CCBD representative suggested the use of one contractor to achieve these aims, while the instructor wanted to ensure that training resources were disseminated throughout the state.

Agency Response. The agency disagrees. While the agency agrees that consistency of training is important, it will not recommend the use of a single private provider or vendor. The agency will work with the ESCs to develop a consistent training model based on current professionally accepted practices and standards.

Comment. A director of a behavior center supports the rule and suggested that if restraint is needed more than once, the recipient should be evaluated for a behavior management program and a behavior management plan developed. The director also suggested that training from acknowledged experts is important.

Agency Response. The agency agrees that training and information from acknowledged experts is important and will support the dissemination of training and information through the leadership of the Region IV ESC. Additionally, language is subsection (e)(4) has been revised to emphasize the ARD committee's responsibility to address the behavior needs of the student.

Comment. The executive director of the Texas Department of Protective and Regulatory Services believes the proposed rule will have a positive effect on children under the Child Protective Services, but noted that the rule might result in increased referrals to the Statewide Intake (SWI), for child abuse and neglect, by reporters who are concerned about enforcement of this rule. The Executive Director stated only reports that meet statutory definitions of abuse and neglect would be taken and/or investigated.

Agency Response. The agency appreciates the executive director's comments.

Comment. A representative of the Alamo Area Council of Administrators of Special Education requested clarification regarding how police intervention fits into these requirements.

Agency Response. Additional clarification will be provided through future training and information dissemination efforts.

Comment. A program director for The ARC of Texas commented in support of how the rule outlines how and when restraint and time-out can be used and that positive behavior intervention strategies are included but requested clarification regarding how you can keep a child somewhere if you can't physically prevent them from leaving.

Agency Response. Additional clarification will be provided through future training and information dissemination efforts.

Comment. A special education teacher commented in support of most of the guidelines in §89.1053 and §89.1054 but stated that placing students in a safe, locked environment is sometimes necessary.

Agency Response. The agency agrees with comments regarding §89.1053 but disagrees with the comments regarding the proposed §89.1054 since Texas Education Code (TEC), §37.0021, prohibits the use of locked, seclusionary time-out for students with disabilities. Additionally, §89.1054 has been withdrawn because subsequent to filing the new rule as proposed, it has been determined that TEC, §37.0021, does not give the agency explicit rulemaking authority on the issue of seclusion.

Comment. A parent commented against the proposed rule on time-out stating that his/her daughter would not have a place to calm down if the door was removed and might have to be physically restrained instead.

Agency Response. The agency disagrees with the comments regarding the use of locked time-out since TEC, §37.0021, prohibits the use of locked, seclusionary time-out for students with disabilities. Additionally, restraint can only be used in limited emergency circumstances as defined in §89.1053.

Comment. A school representative requested that the commissioner define "imminent," "serious," "physical force," and "mechanical device."

Agency Response. The agency believes that these terms have commonly-understood meanings and do not need to be further defined.

Comment. A licensed specialist in school psychology (LSSP) requested that the proposed rules should not limit school district options and specifically mentioned concerns regarding the need to clearly define "time-out," "separated," "limited period," "physical force or threat of physical force," and "appropriately prescribed" and clarify "prescribed". The LSSP also expressed concerns about the definition of "imminent, serious property destruction that would constitute a felony…" and the definition of time-out, making it a place "from which the student is not prevented from leaving," which places the child at greater risk.

Agency Response. The agency believes that most of these terms have commonly-understood meanings and do not need to be further defined, while "time-out" is defined in TEC, §37.0021. Language regarding a felony has been removed from the rule to allow for the use of reasonable and professional judgment in determining the serious nature of imminent property destruction.

Comment. A director of special education commented that the rules are too detailed and narrow in scope, a school staff member requested that §89.1053 not be approved, and a worship arts coordinator indicated non- support for the rule.

Agency Response. The agency disagrees and believes specific rules are necessary to implement TEC, §37.0021.

Comment. A teacher, a principal, and a commenter whose role was unidentified stated that professional educators should be able to physically remove defiant and disruptive students from their classes, with one teacher questioning what has happened to the "so-called" educated leaders of our country who have become so concerned with the rights of special education students that they've forgotten about everyone else.

Agency Response. The agency disagrees. Restraint cannot be used to address defiant and disruptive behavior unless the behavior meets the definition of emergency, and the agency believes the rule addresses the spirit and intent of TEC, §37.0021, and is consistent with professionally accepted practices and standards.

Comment. An executive director of special services commented that the rights of the ARD committee are being taken away, that successful interventions no longer will be allowed, and that some students would rather go to a locked room than be touched.

Agency Response. The agency believes the rule addresses the spirit and intent of TEC, §37.0021, and is consistent with professionally accepted practices and standards. Additionally, TEC, §37.0021, prohibits the use of locked, seclusionary time-out for students with disabilities. Therefore, the commissioner cannot promulgate rules regarding a practice that is prevented by law.

Comment. A person trained as both a special education teacher and attorney suggested that the proposed rules be redrafted to provide educators the opportunity to use restraint and time-out rooms as instructional tools, which may be limited by the rules and allowed only when specified by the behavior intervention plan, but which should not be eliminated entirely. The commenter said that time-out should not be devoid of physical barriers.

Agency Response. The agency disagrees. While the use of restraint has not been eliminated entirely, its use has been limited to certain defined emergency situations. The agency does not agree that restraint should be used as a behavior management technique to increase or decrease the behaviors of students. Additionally, the definition of time-out used in the rule is taken directly from TEC, §37.0021.

Comment. A special education director requested that subsection (b) be removed from the rule and stated that the process should be kept in the IEP.

Agency Response. The agency disagrees. The majority of the wording in subsection (b) is taken from TEC, §37.0021, which also requires the commissioner to develop specific procedures regarding the use of restraint and time-out. The agency believes the rule addresses the spirit and intent of TEC, §37.0021, and is consistent with professionally accepted practices and standards.

Comment. The commissioner for the Texas Department of Mental Health and Mental Retardation commented that "emergency" as it is defined under MHMR requirements does not include property destruction unless it accompanies danger to self or others.

Agency Response. The agency appreciates the comment.

Comment. A director of special education commented that the definition of emergency would prevent the use of restraint when students were throwing things, kicking, hitting, screaming, or spitting and feels that this would be tying the hands of districts.

Agency Response. The agency believes that the emergency determination will need to made on a case-by-case basis and notes that some of the behaviors noted above could meet the standard of emergency as defined in the rule depending upon individual circumstances related to the behavior.

Comment. A parent indicated that some of the definitions in rule may need further clarification.

Agency Response. The agency believes that most of the terms in the rule have commonly-understood meanings and do not need to be further defined, while other terms in the rule are defined by TEC, §37.0021.

Comment. Four directors of special education and an ESC director of special education suggested that in (b)(1)(B), the word felony be changed to "criminal mischief."

Agency Response. The agency agrees in part and disagrees in part. The term "felony" has been removed from the rule altogether and has not been replaced by another term to allow for appropriate individual responses based on professional judgment.

Comment. A director of special education suggested that in (b)(1)(B), the word felony be changed to "Class A Misdemeanor."

Agency Response. The agency agrees in part and disagrees in part. The term "felony" has been removed from the rule altogether and has not been replaced by another term to allow for appropriate individual responses based on professional judgment.

Comment. A special education director commented that it was difficult for school personnel to make determinations regarding whether property destruction met the felony standard while in the middle of an emergency situation.

Agency Response. The agency agrees and the term "felony" has been removed from the rule to allow for appropriate individual responses based on professional judgment.

Comment. Fourteen directors of special education, a superintendent, an associate director of special education, an ESC director of special education and one special education coordinator commented on the need for clarification to the definition of restraint as it is used in professionally accepted practices and standards of behavior management.

Agency Response. The agency disagrees. Restraint is defined by TEC, §37.0021, and the agency believes the rule addresses the spirit and intent of TEC, §37.0021, and is consistent with professionally accepted practices and standards.

Comment. One special education director, three principals, one assistant principal, one associate principal, five special education supervisors, and one speech therapy coordinator propose that based upon age and area of disability (specifically mental retardation and autism) the ARD committee development of a treatment plan be used in place of the definitions in subsection (b)(1)(a) and (b).

Agency Response. The agency disagrees and believes that it is appropriate to define "emergency" within the context of the rule.

Comment. A principal requested that the word "serious" in subsection (b)(1)(A) be defined.

Agency Response. The agency believes that the term as used in the rule has a commonly understood meaning and does not need to be further defined.

Comment. A LSSP requested consideration of the fact that disruptive students need to be removed to a setting where there is less risk of physical harm for that student and other individuals and stated that professionals need to be able to use time-out and restraint.

Agency Response. The agency disagrees in that TEC, §37.0021, prohibits the use of locked, seclusionary time-out for students with disabilities. Additionally, restraint is allowed in circumstances in which a student is a danger to himself/herself or others, but the agency does not agree that it is in the best interests of school districts or students to use physical force to remove a non-violent student from an educational setting.

Comment. The executive directors of the Texas Council of Administrators of Special Education, the Texas Elementary Principals and Supervisors Association, and the Texas Association of Secondary School Principals and the associate executive directors for the Texas Association of School Boards and the Texas Association of School Administrators recommended that the rules specify that the provisions of §89.1053 be subject to the complaint process under TEC, §29.011(e), as opposed to due process hearing procedures.

Agency Response. The agency disagrees and believes that due process must be available to the parent or the district to ensure that appropriate services are provided to the student.

Comment. A special education director commented that while there are some very good sections in the rule, there are concerns that the language as proposed in some sections could provide danger to students when dealing with behaviors that escalate to a serious stage, that potential liability issues could arise out of staff not acting upon professional judgment because of fear about following specific rules, and that all students in general could suffer potential effects from some language proposed.

Agency Response. The agency disagrees and believes the rule addresses the spirit and intent of TEC, §37.0021, and is consistent with professionally accepted practices and standards.

Comment. A special education teacher and an unidentified individual commented that professional educators should be able to physically remove defiant and disruptive students from their classrooms.

Agency Response. The agency disagrees. Restraint cannot be used to address defiant and disruptive behavior unless the behavior meets the definition of emergency, and the agency believes the rule addresses the spirit and intent of TEC, §37.0021, and is consistent with professionally accepted practices and standards.

Comment. An individual commented on concerns about the definition of restraint and the procedures required, including documentation and training of staff.

Agency Response. The agency disagrees and notes that restraint is defined in TEC, §37.0021, and, therefore, cannot be redefined by the commissioner. Also, the agency believes the procedures as developed reflect the requirements of TEC, §37.0021.

Comment. A parent requested clarification on the vagueness of the term "restraint," and asked who will provide training, the oversight of staff to prevent abuse, and the standards and guidelines.

Agency Response. The agency notes that restraint is defined in TEC, §37.0021, and, therefore, cannot be redefined by the commissioner. Additional clarification will be provided through training efforts to be conducted after the adoption of the rules.

Comment. A teacher commented that the rules need to allow the ARD committee to make decisions regarding whether or not a student can be physically prevented from leaving the time-out area and if physical force can be used to place a student in time-out.

Agency Response. The agency disagrees and believes the language in rule reflects both the language and intent of TEC, §37.0021.

Comment. The principal of a campus for students with severe emotional disturbances and a lead teacher/administrator for a separate campus requested that similar campuses be allowed a waiver to physically prevent students from leaving time-out and/or to physically place students in time-out.

Agency Response. The agency disagrees and believes the language in rule reflects both the language and intent of TEC, §37.0021.

Comment. A teacher aide commented with concerns that the rules state that a student can only be restrained while awaiting the arrival of law enforcement.

Agency Response. The agency disagrees and believes the rule clarifies when restraint can be used.

Comment. Two educational diagnosticians expressed concerns about the phrases, "prevented from leaving" (stating it could be impossible or difficult when students are charging), "emergency no longer exists" (questioning whether that can be determined, stating it could be "student regains composure"), "campus administrator" (requesting that designee be omitted), "verbally notified" (questioning what to do if parents have no phone), "physical force or threat of physical force" (questioning whether this causes injuries, asking if therapeutic hold is included) and requested clarification regarding who will document occurrences and how often. A special education coordinator requested clarification of the term "physical force or threat of physical force" as it relates to holding a student's hand or guiding a student, while another special education coordinator requested clarification of "physically prevented from leaving" and asked that wording be clarified to allow physical guidance through the hall.

Agency Response. The agency has added additional clarifying language to subsection (f), which will address many of these concerns. The agency will provide additional guidance through future training and information dissemination activities.

Comment. A school representative asked the commissioner to re-think the narrow definition of restraint and its use only in an emergency.

Agency Response. The agency believes the rule addresses the spirit and intent of TEC, §37.0021, and is consistent with professionally accepted practices and standards.

Comment. One LSSP does not support the proposed rule because the commenter believes that to require educational professionals to serve students with significant mental health service needs, but deny them professional decision-making privileges, will create many impossible and difficult situations and that students, who are not in control, will risk the safety of self or others.

Agency Response. The agency believes the rule addresses the spirit and intent of TEC, §37.0021, and is consistent with professionally accepted practices and standards.

Comment. A teacher commented that there is no written documentation that the use of restraint should be considered by outside authorities as unlawful and unconstitutional and stated that no teacher should be held liable for the use of restraint in the State of Texas public schools. The teacher also suggested that TEA needs to back up the teaching system.

Agency Response. The agency believes the rule addresses the spirit and intent of TEC, §37.0021, and is consistent with professionally accepted practices and standards.

Comment. One individual commented that the use of restraint is barbaric and injurious and that schools should allow for more training in early intervention instead of non-productive restraints, noting that the state should do more research on reinforcing positive behaviors.

Agency Response. The agency agrees that training is important and believes that any training provided on the use of restraint must address certain required training components, which are to be defined, and must clearly link to statewide behavior and discipline management training efforts as reflected in the statewide decentralized leadership function.

Comment. One LSSP disagrees with rule based on the opinion that it limits intervention strategies used by school staff and doesn't take into consideration certain disabilities. The LSSP also disagrees with part of this rule that addresses the notification of parents and documentation in the student eligibility folder, especially the one-day time line, recommending an allowance of five days. Furthermore, it is stated that the documentation requirements are excessive and will interrupt the educational process.

Agency Response. The agency believes the rule addresses the spirit and intent of TEC, §37.0021, and is consistent with professionally accepted practices and standards. The agency has revised the language in subsection (e) to address the concerns about when documentation must be placed in the eligibility folder, but feels that documentation of restraint episodes is necessary.

Comment. A police officer commented that the use of seclusion rooms allows students to de-escalate behaviors, and that, in the absence of these rooms, restraint will be used, which will only escalate students.

Agency Response. TEC, §37.0021, prohibits the use of locked, seclusionary time-out. Additionally, §89.1053 requires training that includes information on prevention and de-escalation of student behaviors.

Comment. A principal who previously worked in an alternative education program noted disagreement with the proposed rule and indicated safety concerns for teachers dealing with students with behavioral problems and all students without the ability to isolate, secure, and restrain problematic students.

Agency Response. The agency supports efforts to increase safety in schools and believes the rule addresses the spirit and intent of TEC, §37.0021, and is consistent with professionally accepted practices and standards.

Comment. One assistant superintendent suggested the following language change in (b)(3), "Timeout means a behavior management technique in which, to provide a student with an opportunity to regain self-control, the student is separated from other students, an activity, or reinforcement for a limited period to time."

Agency Response. The agency disagrees. Time-out is defined by TEC, §37.0021.

Comment. A teaching assistant indicated that subsection (b)(3)(B) will not give students the option of having enough time to cool down in time-out and will require more police involvement.

Agency Response. The agency disagrees. TEC, §37.0021, prohibits the use of locked, seclusionary time-out, but students can continue to use time-out as a method of regaining control.

Comment. One director of special education commented that subsection (b)(3)(B) is not educationally sound. The director suggested that the wording be changed to read, "from which the student may be physically prevented from leaving."

Agency Response. The agency disagrees. TEC, §37.0021, defines time-out, and the commissioner does not have the authority to change the legally prescribed definition of time-out.

Comment. A special education director commented that the definitions of "emergency" and "restraint" were clear.

Agency Response. The agency agrees.

Comment. Two directors of special education and a grandparent/advocate requested clarification for the terminology "imminent, serious physical harm," and the directors also requested clarification of "imminent, serious property destruction" in (b)(1)(A)-(B).

Agency Response. The agency believes that these terms have commonly-understood meanings and do not need to be further defined.

Comment. A special education teacher requested that reasonable force be clarified in the context of use of restraint.

Agency Response. The agency believes that this term has a commonly understood meaning and does not need to be further defined.

Comment. The executive directors of the Texas Council of Administrators of Special Education, the Texas Elementary Principals and Supervisors Association, and the Texas Association of Secondary School Principals, the associate executive directors for the Texas Association of School Boards and the Texas Association of School Administrators, a representative of the Association of Texas Professional Educators, an assistant superintendent, and two directors of special education are concerned about the use of a monetary threshold amount to determine an emergency and requested that the phrase "that would constitute a felony under Texas Penal Code §28.03" be deleted.

Agency Response. The agency agrees and has revised the wording in subsection (b)(1)(B). Language regarding a felony has been removed from the rule to allow for the use of reasonable and professional judgment in determining the serious nature of imminent property destruction.

Comment. A special education director commented that it would be extremely difficult to determine if a felony is being committed during the middle of a crisis situation.

Agency Response. The agency agrees and has revised the wording in subsection (b)(1)(B). Language regarding a felony has been removed from the rule to allow for the use of reasonable and professional judgment in determining the serious nature of imminent property destruction.

Comment. A principal commented that a student who is running away and screaming profanity should be able to be restrained but could not be restrained under the current definition of "emergency."

Agency Response. The agency disagrees that a disruptive student should be restrained. Restraint cannot be used to address defiant and disruptive behavior unless the behavior meets the definition of emergency, and the agency believes the rule addresses the spirit and intent of TEC, §37.0021, and is consistent with professionally accepted practices and standards.

Comment. Two LSSPs commented that teachers would need to be trained in the Texas Penal Code if the current definition of "emergency" is maintained.

Agency Response. The agency agrees and has revised the wording in subsection (b)(1)(B). Language regarding a felony has been removed from the rule to allow for the use of reasonable and professional judgment in determining the serious nature of imminent property destruction.

Comment. A special services director and a school staff person requested a revision in the definition of "restraint" and "emergency" since public schools do not want to wait until there is "imminent" harm, considering the many episodes of school violence.

Agency Response. The agency believes the rule addresses the spirit and intent of TEC, §37.0021, and is consistent with professionally accepted practices and standards, and does not believe the rule prevents districts from appropriately dealing with school violence.

Comment. A special education teacher commented that the definition of restraint was very limiting and would not allow a teacher the opportunity to calm a child by wrapping their arms around them.

Agency Response. TEC, §37.0021, defines restraint, and the commissioner does not have the authority to alter the definition. However, the rule has been revised to provide additional examples of activities that do not constitute restraint as it relates to rule requirements.

Comment. One special education director asked to include language in subsection (b)(2) that would allow for physical redirection of a student.

Agency Response. The agency disagrees. The definitions in rule are based on the definitions specified in TEC, §37.0021. However, additional clarifying language regarding the use of restraint has been added to subsection (f).

Comment. Two directors of special education, a special education coordinator, a parent advocate, and a parent coordinator requested clarification of "mechanical device," with one commenter wanting to know how seat belts would be affected by the definition, and two directors requested clarification of "physical force" in the definition of restraint in subsection (b)(2).

Agency Response. The agency believes that most of these terms have commonly-understood meanings and do not need to be further defined. Additionally, wording has been added to subsection (f)(4) to address concerns about the use of seat belts.

Comment. Two teachers, four special education teachers, a nurse, a superintendent, four principals, six special education administrators, two licensed specialists in school psychology, three educational diagnosticians, two special education counselors, a school counselor, a lead teacher/administrator, a psychologist, and an associate school psychologist oppose the limitations in subsection (b)(3) regarding the ability to physically prevent a student from leaving time-out and some have concerns about requirements that do not allow a locked time-out space for students who would or could not voluntarily stay to re-gain control or who have a history that would contra-indicate the use of restraint.

Agency Response. The agency disagrees. TEC, §37.0021, prohibits the use of locked, seclusionary time-out, and the definition of allowable time-out in the law requires that a student not be physically prevented from leaving.

Comment. An LSSP questioned the meaning of "separated" in subsection (b)(3) and two LSSPs questioned the meaning and intent of "from which the student is not physically prevented from leaving" in subsection (b)(3)(B).

Agency Response. The definition contained in this subsection of rule comes directly from TEC, §37.0021. Additional clarification will be provided through future training efforts.

Comment. An educational diagnostician and an LSSP expressed concerns about the ability to deal with disruptive students under the rule and the diagnostician indicated that the documentation requirements were disruptive to the educational process. Concern also was expressed for school security personnel.

Agency Response. The agency agrees in part and disagrees in part. The agency disagrees that a disruptive student should be restrained. Restraint cannot be used to address defiant and disruptive behavior unless the behavior meets the definition of emergency, and the agency believes the rule addresses the spirit and intent of TEC, §37.0021, and is consistent with professionally accepted practices and standards. Documentation regarding use of restraint continues to be necessary, but certain timelines for documentation have been reconsidered and revised.

Comment. Two licensed specialists in school psychology requested clarification of who will determine what is a "limited period" in subsection (b)(3).

Agency Response. The agency believes that professionals will be able to exhibit professional judgment in implementing a standard of a "limited period" of time.

Comment. A parent commented that a system of enforcement to accompany special education rules is important. The parent also commented with concerns about the amount of paperwork and cost of paperwork involved, but noted the dilemma that things that aren't documented can't be enforced and noted that resources and/or money are often part of the issue in ensuring productive time in the classroom.

Agency Response. The agency agrees that documentation and enforcement are important factors in the appropriate implementation of special education requirements but also agrees that instruction and learning is the critical result of the special education process. The agency supports the instructional efforts of teachers in the classroom and strives to balance the need for documentation with the time necessary to implement requirements.

Comment. A director of special education commented that subsection (c) is clear, and a parent commented in support of the limitation on use of restraint to emergency situations and on the inclusion of prevention and de- escalation techniques in the required training.

Agency Response. The agency agrees.

Comment. A teacher who also is a grandparent commented that school personnel should be able to remove any child who is disruptive due to continuing noise and uncontrolled outbursts.

Agency Response. Section 89.1053 does not prevent the removal of disruptive students from classrooms, but it does prevent the use of restraint to remove a student unless there is an emergency situation. Restraint cannot be used to address defiant and disruptive behavior unless the behavior meets the definition of emergency, and the agency believes the rule addresses the spirit and intent of TEC, §37.0021, and is consistent with professionally accepted practices and standards.

Comment. A parent of a general education student commented that school personnel should be able to protect other students and staff from out-of-control students in cases beyond the scope of the emergency definition, such as throwing school supplies, hitting teachers, and pushing furniture, while a special education department chairperson questioned the ability to protect the safety of others.

Agency Response. The agency believes the definition of emergency as reflected in rule provides districts with the flexibility to protect students and staff when a student is a danger to self or others but limits the use of restraint to serious circumstances to protect the health and safety of the student and others or to prevent imminent, serious property destruction.

Comment. One special education director commented that restraint by properly trained staff, with prior ARD approval, should be used with out-of-control students who do not meet the criteria of imminent, serious physical harm to the student or others or to prevent imminent, serious property destruction.

Agency Response. The agency disagrees and believes that physical intervention with a student should occur only when there is an emergency situation as defined in rule.

Comment. One director of special education, a principal, and a parent requested that the proposed rule language include "peers" or "other students" and "staff" with the health and safety of the student.

Agency Response. The agency agrees and has added similar wording to the rule.

Comment. A parent and a superintendent request that the proposed rules be amended to delete "volunteer" from the use of restraint, and a parent coordinator, a parent advocate, and a parent representing Unlocking Autism expressed concerns about volunteers implementing restraint.

Agency Response. The agency disagrees. TEC, §37.0021, requires the inclusion of volunteers in regard to procedures for the use of restraint, and a volunteer could be faced with an emergency situation in a school. The rule as written does not encourage the participation of volunteers in the implementation of restraint.

Comment. One ESC director of special education requested that an additional subparagraph (C) be added to (b)(3) with the wording "is different from the classroom management strategies routinely used."

Agency Response. The agency disagrees. The definition of time-out in rule reflects the definition in TEC, §37.0021.

Comment. A certified disability advocate commented that the rules should state that, unless specific determinations can be made, under no circumstances is physical force to be used.

Agency Response. The agency believes the rule as written requires specific determinations to be made before restraint is used; i.e., an emergency situation must be present before restraint is utilized.

Comment. The executive directors of the Texas Council of Administrators of Special Education, the Texas Elementary Principals and Supervisors Association, and the Texas Association of Secondary School Principals and the associate executive directors for the Texas Association of School Boards and the Texas Association of School Administrators recommended that subsection (c)(4) be deleted due to the difficulty in interpreting the meaning of basic human necessities and based on the opinion that the same issues are covered by subsections (a) and (c)(3).

Agency Response. The agency disagrees and believes the language in (c)(4) provides clarification beyond the wording found in (a) and (c)(3) and is necessary to communicate rule intent.

Comment. One assistant superintendent suggested the language of subsection (c)(1) be changed to, "Restraint shall be limited to the use of techniques used in professionally accepted practices/standards adopted by the district. An ARD committee should determine if a more restricted setting would result due to the need for physical management."

Agency Response. The agency disagrees and believes the language is clear as written as it relates to the definition and use of restraint. Furthermore, the agency believes the rule addresses the spirit and intent of TEC, §37.0021, and is consistent with professionally accepted practices and standards.

Comment. The president of the National Alliance for the Mentally Ill requested that the language of the proposed rule reflect that the only way to handle students is positive reinforcement. The president further stated that restraint and seclusion should not be part of the school setting.

Agency Response. The agency agrees in part and disagrees in part. The agency believes that restraint may be necessary in certain limited emergency situations as described in rule. However, TEC, §37.0021, prohibits schools from using locked, seclusionary time-out for students with disabilities.

Comment. An ESC special education director commented that certain forms of commercially available training provide the training necessary to meet the requirements of subsection (c)(1)-(4), and three LSSPs requested that these training packages satisfy the training requirement.

Agency Response. The agency agrees that some commercially available training packages could provide basic information regarding the use of restraint. However, the agency believes that any training provided on the use of restraint must address certain required training components, which are to be defined, and must clearly link to statewide behavior and discipline management efforts as reflected in the statewide decentralized leadership function.

Comment. One special education counselor suggested changing the wording in subsection (c)(2) to "restraint shall be discontinued at the point at which the student is back into physical and emotional control."

Agency Response. While the agency agrees that the desired outcome is physical and emotional control, the agency believes that the use of restraint should be stopped when an emergency no longer exists as defined by the rule.

Comment. The executive directors of the Texas Council of Administrators of Special Education, the Texas Elementary Principals and Supervisors Association, and the Texas Association of Secondary School Principals, the associate executive directors for the Texas Association of School Boards and the Texas Association of School Administrators, and a special education director recommended that subsection (c)(3) be revised to add "and others" to the end of the sentence.

Agency Response. The agency agrees, and the rule has been revised.

Comment. One ESC director of special education requested that "not as discipline or punishment" be added to the end of section (c)(3).

Agency Response. The agency disagrees and believes the definition of emergency already limits the use of restraint to emergency situations and cannot be driven by attempts to discipline or punish.

Comment. A professional staff instructor with Crisis Prevention Institute, Inc., agrees that the proposed rule indicates a strong sensitivity toward the needs of the learner with special needs, as well as compatibility with the philosophic orientation of Nonviolent Crisis Intervention training. The representative, along with the director of on- site training for the Crisis Prevention Institute, support the position of training as outlined in subsection (d) and believe that training should be part of a process or a system. It was suggested that (d)(1) be worded, "Not later than January 1, 2003, and at regular intervals thereafter, …" or that a subsection be added to include ongoing and regular training.

Agency Response. The agency agrees that the rule as written considers the individual needs of students with disabilities. Subsections (c)(4) and (h)(4) require trained personnel to receive instruction in current professionally accepted practices and standards, and therefore, address the training needs mentioned by the commenter.

Comment. A school nurse commented with concerns regarding the need for documentation and training to prevent a child from harming themselves or to provide physical assistance and doesn't feel that training should be necessary in emergency situations.

Agency Response. The agency disagrees and believes that proactive steps must be taken to address training needs of staff.

Comment. A special education department chairperson requested clarification regarding who provides training, who is responsible for paying, and who attends; three educational diagnosticians requested clarification regarding who will provide training and how extensive it will be; and a principal asked where the money would come from for substitutes for staff to attend required training.

Agency Response. Additional clarification will be provided regarding future training requirements. The rule in its current form specifies who will attend training. LEAs will be responsible for acquiring and supporting training for school staff members.

Comment. A parent/diagnostician and an unidentified commenter requested clarification as to the applicability of subsection (d) and (e) to substitutes.

Agency Response. Substitutes are subject to the requirements of §89.1053(d) and (e).

Comment. One special education director and one assistant superintendent requested clarification regarding the point of having training after the fact.

Agency Response. The training requirements in rule cover the need for training of employees, volunteers, and independent contractors prior to the use of restraint whenever the need can be foreseen. However, when a person is called upon to implement restraint, and they have not received the required training, it is reasonable to require that the training be obtained within a specified period of time to ensure that the person will be trained if future occasions of restraint were to be necessary.

Comment. A director of special education commented support for the team aspect of the required training.

Agency Response. The agency agrees.

Comment. A program administrator for the Disability Policy Consortium commented in support of the rule sections related to training, documentation, and parent notification.

Agency Response. The agency agrees.

Comment. One superintendent believes the requirement of (d)(1), training of a core team, is too limiting, and suggested that training should be required only for staff who work directly with the student.

Agency Response. The agency disagrees. It is important for a campus to have a core team of trained staff to include teachers and a campus administrator or designee so that staff who are or who are likely to be directly in contact with the student have adequate training.

Comment. The executive directors of the Texas Council of Administrators of Special Education, the Texas Elementary Principals and Supervisors Association, and the Texas Association of Secondary School Principals and the associate executive directors for the Texas Association of School Boards and the Texas Association of School Administrators recommended that subsection (d)(4) be rewritten to state, "All trained personnel shall receive instruction in current, professionally accepted practices and standards regarding behavior management and the use of restraint."

Agency Response. The agency agrees and has revised the wording of subsection (d)(4).

Comment. A director of special education, a LSSP, a principal, and a special education teacher commented that the 30-day timeframe for receipt of training is too limiting and could put undue burdens on schools, and the LSSP suggested that a timeframe of four months be allowed.

Agency Response. The agency disagrees and believes that a timeline of four months is too long and could result in a number of incidences in which untrained personnel would be called upon to implement restraint.

Comment. A superintendent commented that one full year should be made available to complete core team training.

Agency Response. The agency agrees that additional time is necessary to complete the training requirements specified in rule and has extended the timeline to April 1, 2003.

Comment. A parent coordinator and a parent advocate suggested that (d) require training to be given to new personnel prior to restraining, not 30 days following the use of restraint, and requests that the training be mandated on an annual basis.

Agency Response. The agency agrees that training prior to restraint is the goal; however, it is reasonable to allow new staff a reasonable period of time to acquire training. The agency through rule also will require staff to receive instruction in current professionally accepted practices and standards.

Comment. A superintendent commented that it was not necessary for documentation on the use of restraint to be placed in the student's special education eligibility folder since, oftentimes, this information is not shared with special education staff.

Agency Response. The agency disagrees and believes that this information always should be shared with special education staff and formally documented in the student eligibility folder.

Comment. Five directors of special education requested that the language in subsection (d)(4) and four directors requested that the language in subsection (h)(4) be revised to allow for the word "current" to be defined in local special education guidelines, and another special education director requested that the agency define the word "current."

Agency Response. The agency will provide additional information and guidance as it relates to training requirements as reflected in §89.1053. However, the agency does not believe it is necessary to define the word "current" in rule.

Comment. A special education director commented in support of the idea of training but expressed concerns about the January 1, 2003 deadline.

Agency Response. The agency agrees that additional time is necessary to complete the training requirements specified in rule and has extended the timeline to April 1, 2003.

Comment. A representative of the Alamo Area Council of Administrators of Special Education requested that language be added to subsections (d) and (h) to include requirements that ESCs provide summer training for core teams and monthly training to meet the 30-day requirement.

Agency Response. The agency disagrees that this requirement is necessary in rule. ESCs, through the needs assessment process, should determine the regional training needs of their constituents and plan for the provision of training on a regional basis.

Comment. A special education director commented in support of the training of core campus teams and requested that campuses be allowed to continue with acceptable models of training. The director also commented that ESCs should provide monthly training to meet the 30-day training requirement. Additionally, the special education director commented that all staff should be trained, not only the staff members listed in the rule.

Agency Response. The agency agrees in part and disagrees in part. While the agency supports the training of core, campus teams, the agency disagrees that ESCs should be required to provide monthly training. ESCs, through the needs assessment process, should determine the regional training needs of their constituents and plan for the provision of training on a regional basis. The agency would be in support of training all staff members but does not believe that this should be required by the rule. Additionally, while the agency supports the current training of school staff, the agency also believes that any training provided on the use of restraint must address certain required training components, which are to be defined, and must clearly link to statewide behavior and discipline management efforts as reflected in the statewide decentralized leadership function.

Comment. One assistant principal commented in support of restraint training and suggested that the training for restraint have an annual update requirement.

Agency Response. The agency agrees that training on restraint is necessary and believes that the timeline for current training could vary based on individual needs and should not be limited to or required to be an annual requirement.

Comment. A representative of the Association of Texas Professional Educators commented that the rule should clarify that districts or ESCs are required to provide training on current practices.

Agency Response. The agency disagrees and believes that the rule language requires that training be obtained. However, the agency believes the rule should allow flexibility regarding the acquisition of training on professionally accepted practices and standards.

Comment. The commissioner of the Texas Department of Mental Health and Mental Retardation suggested clarifying whether personnel trained under (d)(2) would become part of the core team, or whether they will be expected to perform future restraints. The commissioner also stated the agency should make information on the professionally accepted practices and standards referenced in (d)(4) available to districts and suggested that training on these practices should be documented in their personnel files.

Agency Response. The agency does not believe it is necessary to further define the core team as referenced in rule. The agency will provide additional information regarding training efforts, and training will reflect professionally accepted practices and standards. While training will be documented, the agency does not believe it is necessary to prescribe where the documentation will be maintained.

Comment. An assistant professor of special education recommended that the agency use one particular central organization to provide district training so that there would be a common language among practitioners within a district and to reduce the need to re-train staff who transfer to other districts.

Agency Response. The agency agrees that consistency of training is important but will not recommend the use of a single private provider or vendor. The agency will work with the ESCs to develop a consistent training model based on current professionally accepted practices and standards.

Comment. A special education director asked whether the "accepted practices and standards referenced in (d)(4) is the same as "prevention and de-escalation techniques and alternatives to the use of restraint" in (d)(3).

Agency Response. The agency will continue to provide clarification regarding training issues. However, the scope of "accepted practices and standards" is greater than the scope of the phrase in subsection (d)(3).

Comment. An assistant superintendent commented in support of the training component in §89.1053 but requested that the final version include clearly explained and very specific definitions, that the use of restraint and time-out be allowed in situations where it is recommended and warranted, and that paperwork be limited to absolutely essential information.

Agency Response. The agency will provide additional information regarding training and information dissemination and does not believe that additional rule wording is necessary. The agency believes the rule allows restraint to be used in situations where it is warranted, and efforts have been made to limit documentation to necessary items.

Comment. A special education director commented that funding would be needed to provide the required training due to costs of release time from work.

Agency Response. The agency agrees that LEAs will incur training costs to implement the training requirements in §89.1053 but believes that the training is necessary implement TEC. §37.0021.

Comment. Two special education directors requested clarification regarding documentation, asking whether there must be separate documentations if one student is restrained several times in separate restraints in one day. The directors further commented that there was a tremendous amount of information to document in a short time.

Agency Response. The agency has addressed the documentation concerns with revisions to the language in subsection (e) but feels that documentation of restraint episodes is necessary. The agency believes the documentation and notification requirements will not be overly burdensome when restraint is used only in limited, emergency circumstances, but documentation must be kept on each incident of restraint.

Comment. One special education teacher is concerned that for parents without phones, subsection (e)(2) would require teachers to go to the student's home.

Agency Response. The agency believes the use of the words "good faith effort" and "verbally" preclude the necessity of making a home visit as long as a good faith effort is made to reach the parents through all reasonable verbal means.

Comment. A special education director commented in support of subsection (e), and a special education teacher commented in support of subsection (e)(4).

Agency Response. The agency agrees.

Comment. A director of special services requests that entire subsection (e) be deleted from the proposed rule because it is burdensome and redundant, and three educational diagnosticians and a special education teacher commented that the documentation requirements were unrealistic and/or very lengthy and time consuming. A principal commented that he/she would prefer that the teachers use time for instructional purposes rather than documentation.

Agency Response. The agency disagrees and believes the documentation and notification requirements will not be overly burdensome when restraint is used only in limited, emergency circumstances.

Comment. The executive directors of the Texas Council of Administrators of Special Education, the Texas Elementary Principals and Supervisors Association, and the Texas Association of Secondary School Principals and the associate executive directors for the Texas Association of School Boards and the Texas Association of School Administrators recommended the following wording for subsection (e), "Documentation and notification on use of restraint. Necessary notification and documentation (or data collection) regarding the use of restraint, if any, must be addressed in the IEP or BIP. The admission, review, and dismissal (ARD) committee must use any collected data as part of the process to judge the effectiveness of the intervention and provide a basis for making determinations regarding its continued use."

Agency Response. The agency disagrees, and prior to proposing the rules, established broad-based stakeholder support for the documentation and notification requirements contained in the rules. The agency believes the documentation and notification requirements will not be overly burdensome when restraint is used only in limited, emergency circumstances.

Comment. Two special education directors suggested that subsection (e) contain the statement, "the ARD committee will be responsible for determining the frequency and scope of reporting student restraints and time- outs."

Agency Response. The agency disagrees and believes the documentation and notification requirements are necessary and will not be overly burdensome when restraint is used only in limited, emergency circumstances. The need for documentation of emergency circumstances requires that the rule address the requirements rather than the ARD committee.

Comment. Two principals, a special education coordinator, a teacher, and two special education teachers believe that the documentation and notification requirements in subsection (e) will be time consuming and take away from instructional time, with one teacher commenting about the time spent away from the classroom.

Agency Response. The agency disagrees and believes the documentation and notification requirements will not be overly burdensome when restraint is used only in limited, emergency circumstances. The agency has addressed some of the documentation concerns with revisions to the language in subsection (e) but feels that documentation of restraint episodes is necessary.

Comment. A special education teacher commented that it could be impossible to verbally notify the campus administrator on the day restraint is utilized.

Agency Response. The agency agrees, and that is why the phrase, "or designee" was included in the proposed rules. Additionally, language has been added to allow either verbal or written notification of the campus administrator or designee.

Comment. The executive directors of the Texas Council of Administrators of Special Education, the Texas Elementary Principals and Supervisors Association, and the Texas Association of Secondary School Principals and the associate executive directors for the Texas Association of School Boards and the Texas Association of School Administrators stated that the timeline for subsection (e)(1) is not feasible and recommended that the wording state, "On the day restraint is utilized, an attempt shall be made to verbally notify the campus administrator or designee regarding the use of restraint" and an ESC special education director recommended essentially the same wording with the addition of the phrase, "or in writing."

Agency Response. The agency agrees in part and disagrees in part. The agency believes that it will be possible to notify the administrator or designee on the day restraint is utilized. Additionally, language has been added to allow either verbal or written notification of the campus administrator or designee.

Comment. The Governor's Texas Special Education Continuing Advisory Committee requested that subsection (e)(1) be revised to include the phrase, "and in writing" so that the rule would state, "On the day restraint is utilized, the campus administrator or designee must be notified verbally and in writing regarding the use of restraint."

Agency Response. The agency disagrees, but language has been added to allow either verbal or written notification of the campus administrator or designee. A school district could establish a higher standard through local policy if determined to be necessary.

Comment. A special education director and a special education teacher requested clarification and expressed concern regarding the documentation requirements related to the use of mechanical devices such as bus safety harnesses, harnesses, and devices that prevent self-injurious behavior.

Agency Response. Additional language has been added to subsection (f) to address the issues of self-injurious behaviors and use of seat belts and safety devices during transportation. The agency believes that the rule language already addresses the need for appropriately prescribed adaptive equipment.

Comment. A director of special education requested that the timeline for notification in subsection (e)(3) be changed to three school days, while another director requested an extension to ten school days and a representative of the Association of Texas Professional Educators recommended a timeline of five days.

Agency Response. The agency disagrees. While the agency has added clarifying information to subsection (e)(3) that provides some flexibility regarding the timing of written notification to parents, the agency believes that a three- day to ten-day standard is inappropriate.

Comment. A superintendent, eight directors of special education, five special education supervisors, four educational diagnosticians, three speech-language pathologists, two principals, one associate principal, and one assistant principal requested that the timeline for documentation in subsection (e)(4) be extended, with commenters requesting timelines ranging from 48 hours to 10 days.

Agency Response. The agency agrees that the timeline needs to be extended. While documentation regarding use of restraint continues to be necessary, certain timelines for documentation have been reconsidered and revised, and the standard no longer is linked to a specified number of days, but rather to educationally relevant activities.

Comment. Fifteen directors of special education and an ESC director of special education commented that documentation and notification requirements related to the use of restraint are clear and manageable with the exception of the requirement to file information in the eligibility folder within one day.

Agency Response. The agency agrees that the timeline needs to be extended. While documentation regarding use of restraint continues to be necessary, certain timelines for documentation have been reconsidered and revised, and the standard no longer is linked to a specified number of days, but rather to educationally relevant activities.

Comment. The Governor's Texas Special Education Continuing Advisory Committee requested that subsection (e)(4) be revised to read, "Written documentation regarding use of restraint must be placed in the student's special education eligibility folder prior to altering the education plan" or "prior to making decisions related to the IEP."

Agency Response. The agency agrees that the wording needs to be revised and the timeline extended. While documentation regarding use of restraint continues to be necessary, certain timelines for documentation have been reconsidered and revised, and the standard no longer is linked to a specified number of days, but rather to educationally relevant activities.

Comment. A special education teacher/department head and a special education teacher expressed concerns with the method of documentation in subsection (e)(4)-(5) and suggested that the prescribed documentation be placed in the file, but after an ARD meeting that discusses the forms that have accumulated. A summary version of the individual forms then would be filed in the eligibility folder.

Agency Response. The agency agrees in part. While documentation regarding use of restraint continues to be necessary, certain timelines for documentation have been reconsidered and revised, and the standard no longer is linked to a specified number of days, but rather to educationally relevant activities. However, the rule continues to require documentation each time restraint is utilized.

Comment. One director of special education recommended that the following be added to subsection (e), "Documentation will be used in an annual ARD or review to develop a BIP/IEP for social skills."

Agency Response. The agency has reviewed the comment and revised subsection (e) to capture the related meaning and intent.

Comment. A representative from the Association of Texas Professional Educators requested that the rule specify that voice mail messages, e-mail, or a written memo be sufficient notification to an administrator under subsection (e)(1).

Agency Response. The agency does not believe that this degree of specificity is necessary in rule. However, language has been added to allow either verbal or written notification of the campus administrator or designee.

Comment. A special education director and an assistant superintendent commented that subsection (e)(1) should require written documentation to the administrator or designee and the director noted that additional expenses could be incurred with the documentation requirements.

Agency Response. The agency agrees in part and disagrees in part. While the rule allows either verbal or written notification of the campus administrator or designee, a school district could establish a higher standard through local policy if determined to be necessary. The agency agrees that documentation costs will be incurred, but believes that the documentation requirements are necessary.

Comment. One special education director commented that the documentation requirements are excessive and the requirement to file restraint documentation in the student eligibility folder is unreasonable and recommended that documentation be maintained at the campus level in the student's folder.

Agency Response. The agency disagrees and believes that the documentation requirements are necessary. Additionally, the agency disagrees and believes the documentation and notification requirements will not be overly burdensome when restraint is used only in limited, emergency circumstances. The agency also believes it is appropriate to file restraint documentation in the student's eligibility folder to ensure that special education staff is aware of and knowledgeable about the occurrences when educational decisions are made.

Comment. A representative from the Learning Disabilities Association of Texas requested that the wording in subsection (e)(2) be changed from "an attempt shall be made to verbally notify the parents" to "every effort shall be made to verbally notify the parents..."

Agency Response. The agency disagrees in part, but has revised the wording to require a good faith effort on the part of the district. The agency believes this wording specifies the requirement but allows enough flexibility to address individual circumstances.

Comment. An assistant superintendent suggests rewording subsection (e)(2) to say, "On the day the restraint is utilized, an attempt shall be made to notify the parents verbally or in writing."

Agency Response. The agency disagrees and believes the rule language establishes a necessary requirement and allows enough flexibility to address individual circumstances. Additionally, subsection (e)(3) addresses written notification to the parent(s).

Comment. A parent advocate and parent coordinator requested that the word "must" be substituted for "shall" in subsection (e)(2), and the advocate suggested that verbal notification to the parent be on the same day, not within one school day.

Agency Response. The agency disagrees and believes the word "shall" conveys appropriate meaning, and the rule as written addresses the commenter's second concern.

Comment. A grandparent and advocate requested that the phrase "attempt shall be made" be removed from subsection (e)(2), and it should be stated that the parent will be notified and requested that a subsection (e)(5)(J) be added to include the parents' or student's side of the story.

Agency Response. The agency disagrees, but language has been added to allow either verbal or written notification of the campus administrator or designee. The agency believes the rule language establishes a necessary requirement yet allows enough flexibility to address individual circumstances. Additionally, the agency does not believe it is appropriate for required documentation to include information from the student(s) or from individuals not involved in the use of restraint.

Comment. A special education coordinator requested clarification regarding whether one school day as referenced in subsection (e)(3) means the same school day or a 24-hour period, stating that the same school day would be unreasonable, and a special education director questioned whether the letter had to be dated or delivered within one school day.

Agency Response. The agency has addressed these requests for clarification through revised language in subsection (e)(3).

Comment. A representative of the Alamo Area Council of Administrators of Special Education requested that the phrase, "unless otherwise specified by the ARD/IEP committee" be added to subsection (e)(3).

Agency Response. The agency disagrees and believes the documentation as noted in the rule is necessary.

Comment. One superintendent recommended adding to subsection (e)(3) that written notification should be in the native language of the family.

Agency Response. The agency will yield to local policy or practice regarding other similar types of communication and discipline notification sent from school districts to parents.

Comment. An assistant superintendent suggested rewording subsection (e)(4) to say, "A cumulative record of documentation regarding restraint should be maintained, and filed at the end of each school year in the student's eligibility folder."

Agency Response. The agency disagrees. The rule continues to require documentation each time restraint is utilized, and the agency believes it is appropriate for this individual documentation to be filed since the district is required to provide the documentation to the parent(s).

Comment. A director of special programs requested clarification in subsection (e)(5)(C) to add "approximate" for the time the restraint began and ended.

Agency Response. The agency does not feel that this is necessary and believes that school staff can explicitly note in the documentation any times that are of an approximate nature.

Comment. One principal recommends that the information required in subsection (e) be contained in a treatment plan with documentation being required only for deviations from the approved plan. The principal also commented that there should be clear distinctions for low incidence populations.

Agency Response. The agency disagrees and believes the rule addresses the spirit and intent of TEC, §37.0021, and is consistent with professionally accepted practices and standards.

Comment. An ESC special education director and fifty-one school staff members recommended that if the use of restraint is included in the BIP/IEP, then the documentation requirements in subsection (e) should be limited to that required for time-out.

Agency Response. The agency disagrees and believes the rule addresses the spirit and intent of TEC, §37.0021, and is consistent with professionally accepted practices and standards. Given this, the use of restraint is limited to emergency situations, and it is appropriate to document emergency situations and circumstances.

Comment. An MHMR parent coordinator recommended that subsection (e)(2) be deleted and combined with subsection (e)(3) and stated that the documentation requirements should be limited to those noted in subsection (e)(5)(A)-(C), (E), (G), and (I).

Agency Response. The agency disagrees and believes that specific documentation requirements are necessary. In addition, the agency believes that it is necessary for the documentation to include the required information as referenced in subsection (e).

Comment. A director of special education, three educational diagnosticians, and three speech-language pathologists believe parents of children who are to be notified under subsection (e)(5) do not need graphic details, which may be painful for the parents.

Agency Response. The agency disagrees and believes parents have the right to this information.

Comment. One principal and two special education directors request clarification regarding the term "one day" and the expected method of notification on use of restraint related to mailing or hand-delivering.

Agency Response. The agency agrees that clarification is appropriate and has revised the language in subsection (e)(3).

Comment. A representative of the Alamo Area Council of Administrators of Special Education requested an addition to subsection (e)(5) stating that an administrator or school nurse assessed the child to determine whether injury occurred as a result of restraint.

Agency Response. The agency disagrees and does not believe that it is appropriate for an administrator or school nurse to be called upon to make a causative determination of medical injury.

Comment. A superintendent recommended the addition of subsection (e)(5)(J) to include a summary of the debriefing after the restraint, efforts made to support the student's return to programming, and the opportunity to address emotional issues related to the restraint.

Agency Response. The agency supports the intent of the efforts recommended in the comment but does not believe that is necessary to add this information as a component of documentation and notification.

Comment. Two directors of special education suggested that subsection (e) be replaced with wording similar to wording for documentation for time-out in subsection (i).

Agency Response. The agency disagrees and believes that documentation in the case of restraint is both necessary and appropriate.

Comment. A mother/nurse is supportive of the documentation requirements for restraint in subsection (e)(2), (3), and (5), but requests more emphasis on the effectiveness of the restraints in subsection (e)(5)(F)-(H).

Agency Response. The agency believes that issues of effectiveness will be addressed by the requirements noted in subsection (e)(4).

Comment. A special education director expressed concern that the proposed rules do not recognize differences in classrooms for preschool programs for children with disabilities (PPCD), elementary grades, and for students with severe disabilities where behavior shaping is ongoing.

Agency Response. The agency disagrees and believes the rules apply appropriately to the general population of students with disabilities. However, additional language has been added to subsection (f) to provide additional clarification regarding restraint.

Comment. A principal requested clarification regarding the ability to prevent a child from climbing to the top of playground equipment, running into the street, climbing trees, or scaling buildings in relation to physically preventing a child from leaving.

Agency Response. The agency has added additional clarifying language to subsection (f) to address this concern.

Comment. Two representatives of the Association of Texas Professional Educators commented that further definition needs to be provided for what restraint does or doesn't mean and one representative also stated that a five- day timeline would be a more reasonable expectation for getting documentation to a student's eligibility folder.

Agency Response. The agency agrees. Language has been added to subsection (f) to provide additional clarification regarding restraint, and subsection (e) has been revised to address concerns about documentation timelines.

Comment. An ESC director of special education suggested that additional language be added regarding students with certain physical and mental limitations that would require hands-on guidance, and requested that guidance not be construed as restraint. The director also expressed concerns about the amount of time required to document occurrences; requested that a core team be comprised of at least two person; and asked that restraint be clarified to include prevention, de-escalation, and alternative strategies.

Agency Response. The agency agrees in part and disagrees in part. Subsection (f) of the rule has been revised to provide additional clarification regarding restraint. Documentation regarding use of restraint continues to be necessary, but certain timelines for documentation have been reconsidered and revised. The agency does not believe it is necessary to add more specific language regarding the core team, and the rule continues to contain language about prevention, de-escalation, and alternatives.

Comment. Two assistant principals, two special education directors, a special education supervisor, a principal, and a speech therapy coordinator believe the term "emergency" does not work for students needing frequent use of mechanical devices or restraints to prevent self-injury, and commented that documenting such use would be impractical. The commenters suggest that a treatment plan addressing this need is better documentation, and only deviations from the plan would be reported according to the requirements of the proposed rules.

Agency Response. The agency agrees in part and disagrees in part. Additional language has been added to subsection (f) to address the issue of self-injurious behaviors. However, the agency does not believe that a treatment plan should drive the use of restraint and does not believe that documentation requirements related to restraint should be determined by a treatment plan.

Comment. An ESC special education director and fifty-one school staff members requested that the use of restraint not be tied to an emergency, as it is in the proposed subsection (c), if it is a strategy to prevent self-injury and is documented in the IEP/BIP.

Agency Response. The agency agrees in part and disagrees in part. While the definition of emergency remains essentially unchanged, the agency has expanded the wording in subsection (f) to provide additional clarification regarding the use of restraint.

Comment. A school district representative and a commenter whose role was unidentified questioned the impact of the rule on students who need extra physical boundaries to remind them where they are or to keep them from falling out of a chair. One commenter specifically questioned the use of seat belts or harnesses on a bus.

Agency Response. Additional language has been added to subsection (f) to address the issues of self-injurious behaviors and use of seat belts and safety devices during transportation. The agency believes that the rule language already addresses the need for appropriately prescribed adaptive equipment.

Comment. Twenty individuals, a kindergarten teacher, a school counselor, two teachers, a certified orientation and mobility (O & M) specialist, and a life skills teacher commented that some students with low cognitive abilities do not recognize their own strength and could hurt others if the rules are passed, with the commenters noting that clarification is needed since seat belts on buses are not mentioned in the rules. One commenter mentioned that, if students could not be seat-belted to chairs and/or physically blocked from leaving a room, they would be able to roam the school at will.

Agency Response. Additional language has been added to subsection (f) to address the issues of self-injurious behaviors and use of seat belts and safety devices during transport. The agency believes that the rule language already addresses the need for appropriately prescribed adaptive equipment.

Comment. A special education director commented that subsection (f)(2) provides excellent clarification and examples.

Agency Response. The agency agrees that these clarifications are important and has added additional clarifying language.

Comment. Fourteen directors of special education, a superintendent, an associate director of special education, an ESC director of special education, and one special education coordinator requested that more examples be given of what is not restraint.

Agency Response. The agency agrees and has added additional language to subsection (f).

Comment. The executive directors of the Texas Council of Administrators of Special Education, the Texas Elementary Principals and Supervisors Association, and the Texas Association of Secondary School Principals and the associate executive directors for the Texas Association of School Boards and the Texas Association of School Administrators recommended that another paragraph be added to subsection (f) stating, "Restraint does not include those students with physical disabilities already employing devices or equipment to ensure their own health and safety" and further requested that language be added stating, "The rules in this section do not preempt the use of force provisions allowed under the Texas Penal Code §9.62."

Agency Response. The agency does not believe that this clarifying language is necessary. The agency believes that the rule language already addresses the need for appropriately prescribed adaptive equipment. However, other language has been added to subsection (f) to address requests for clarification regarding restraint.

Comment. An ESC special education director, a special services director, a counselor, and a PPCD teacher requested that the proposed rule be clarified with respect to the relationship of restraint and documentation and the practices of guiding a student to time-out, guidance in completing skills, positive holding, and hands-on manipulation with the special services director suggesting that the addition of the term "limited physical redirection" to subsection (f)(2) would clarify concerns.

Agency Response. The agency agrees that additional clarification is necessary, and clarifying language has been added to subsections (e) and (f) to address the expressed concerns.

Comment. Two special education directors, three speech-language pathologists, and three educational diagnosticians requested that therapeutic holding not be considered restraint for students who suffer from emotional disturbance and whose ARD has determined therapeutic holding to be a needed component of the student's behavior intervention plan.

Agency Response. The agency disagrees. Appropriate clarification regarding the use of restraint is contained in subsection (f).

Comment. One special education director suggested the word "prescribed" in subsection (f)(1) be changed to "appropriately recommended adaptive equipment."

Agency Response. The agency disagrees and believes that guidance and training can address the intent of the word "prescribed."

Comment. The executive directors of the Texas Council of Administrators of Special Education, the Texas Elementary Principals and Supervisors Association, and the Texas Association of Secondary School Principals, the associate executive directors for the Texas Association of School Boards and the Texas Association of School Administrators, and a representative of the Association of Texas Professional Educators recommended that the commissioner clarify that the definition of time-out is not applicable to a situation where the teacher moves a student away from other students yet the student remains in the classroom and is able to participate in instruction in the same manner as other students in the class.

Agency Response. The agency believes that the current definition of time-out addresses these concerns and that it is not necessary to add the suggested examples to the rule. The rule as written does not prevent a teacher from moving a student to another location in the classroom where the student continues to be part of the instructional group and process.

Comment. A special education director requested clarification regarding how many sessions of time-out are necessary to make the practice recurrent and requested information regarding whether moving a student to a place where they are seated apart from other students constituted time-out.

Agency Response. The agency believes that professionals will be able to exhibit professional judgment in determining the meaning of "recurrent" in relation to the rule. Additionally, the rule as written does not prevent a teacher from moving a student to another location in the classroom where the student continues to be part of the instructional group and process.

Comment. A principal requested clarification regarding subsection (g)(2) when a child in special education suddenly displays behavior warranting time-out and whether time-out can be used before an ARD meeting is held to do an IEP/BIP and requested clarification regarding subsection (g)(3), asking if this pertains to the amount of time a student would be in time-out and, therefore, missing curriculum. In relation to subsection (h), the principal questioned whether it is possible to get everyone trained by the date specified; and asked in relation to subsection (i) whether the information could just be an item on ARD paperwork.

Agency Response. The agency believes the wording in subsection (g)(2) clearly establishes the parameters for use of time-out and does not prevent a teacher's reaction to sudden, unexpected behavior. The agency believes that both the time and/or location of time-out could prompt concern about the issues addressed in subsection (g)(3). The agency has addressed the timeline concerns by changing the dates for training in subsection (h) and believes that subsection (i) allows flexibility for decision-making by the ARD committee.

Comment. The executive directors of the Texas Council of Administrators of Special Education, the Texas Elementary Principals and Supervisors Association, and the Texas Association of Secondary School Principals and the associate executive directors for the Texas Association of School Boards and the Texas Association of School Administrators recommended that the word "may" be substituted for "must" in subsection (g)(2) to allow flexibility regarding inclusion of time-out in the IEP.

Agency Response. The agency disagrees. The word "may" would be inappropriate in the context of the ongoing, recurrent use of time-out as referenced in the rule.

Comment. A special education department chairperson requests clarification on how subsection (g)(3) can be implemented with mainstreamed students, and a special education director questioned under which circumstances would the use of physical force to place a student in time-out become restraint.

Agency Response. The agency will provide future training and clarification regarding procedures on the use of time-out. Based on the definition of time-out found in TEC, §37.0021, the agency does not believe it is logical to use physical force or threat of physical force to place a student in a time-out location from which the student cannot be physically prevented from leaving. TEC, §37.0021, prohibits the use of locked, seclusionary time-out for students with disabilities.

Comment. A special education teacher/parent requested that subsection (g) of the proposed rule be amended to limit permission to use time-out to "designated and trained" employees, volunteers or contractors.

Agency Response. The agency disagrees and does not believe that this revision is necessary for the appropriate implementation of §89.1053(g).

Comment. A special education director commented in support of §89.1053(g)(2), and a director of special programs commented that the wording of the rule would not unnecessarily prevent a teacher from using a simple and often effective consequence.

Agency Response. The agency agrees.

Comment. Two assistant superintendents and two special education directors commented that §89.1053(g) was turning a positive technique into something negative, with one stating concern about the location of the rule implying a negative connection, presumably to restraint.

Agency Response. The agency disagrees and includes language in §89.1053(g)(2) that references time-out as part of an array of positive behavior intervention strategies.

Comment. Three educational diagnosticians, a teaching assistant, a principal, and a special education director questioned how out-of-control students would be placed in time-out without physical force or the threat of physical force, and an elementary teacher, a principal, a special education director, and a school counselor indicated that the use of physical force sometimes was necessary to place a student in time-out, particularly when the student's behavior is disrupting others.

Agency Response. Based on the definition of time-out found in TEC, §37.0021, the agency does not believe it is logical to use physical force or threat of physical force to place a student in a time-out location from which the student cannot be physically prevented from leaving. TEC, §37.0021, prohibits the use of locked, seclusionary time-out for students with disabilities.

Comment. Fourteen directors of special education, a superintendent, an associate director of special education, an ESC director of special education, a special education coordinator and a director of special populations requested that subsection (g)(1) be revised to allow the use of physical escort of a student to time-out, and an educational consultant commented that physical escort is necessary at times to get a student to time-out. A superintendent and director of special education commented that physical prompts and guidance should be allowed to get a student to time-out, and two special education directors commented that is sometimes is necessary to physically move a student to time-out.

Agency Response. The agency believes it is inappropriate to use physical force to place a student in a time-out location from which, by definition in TEC, §37.0021, the child cannot be prevented from leaving. Subsection (f) of the rule addresses requests for clarification regarding the use of restraint.

Comment. A special education supervisor requested that subsection (g)(1) be removed.

Agency Response. The agency disagrees. Based on the definition of time-out found in TEC, §37.0021, the agency does not believe it is logical to use physical force or threat of physical force to place a student in a time-out location from which the student cannot be physically prevented from leaving. TEC, §37.0021, prohibits the use of locked, seclusionary time-out for students with disabilities.

Comment. Fourteen directors of special education, a superintendent, an associate director of special education, an ESC director of special education, and one special education coordinator requested that subsection (g)(3) be revised to state, "to the extent" as opposed to "in a fashion."

Agency Response. The agency disagrees and does not believe the suggested wording would be clear.

Comment. One special education director requested wording changes to subsection (g)(2) to read: "Time-out may only be used in conjunction with an array of positive behavior intervention strategies and techniques."

Agency Response. The agency disagrees and believes it is appropriate for time-out to be included in a student's IEP or BIP when it is utilized on a recurrent basis.

Comment. One special education teacher commented that the use of time-out allows some students to gain control, and, in reference to subsection (g)(3), allows them to be involved in and advance in the general curriculum.

Agency Response. The rules as written do not preclude the use of time-out as part of an array of positive behavior intervention strategies.

Comment. A representative of the Association of Texas Professional Educators commented that educators should be allowed to place students in the corner or move them to different areas of the room as a commonly used method of time-out. The representative commented that an educator should be allowed to use these methods without consulting an IEP or BIP and should not be required to do excess paperwork for implementing these techniques.

Agency Response. The agency's intent as reflected in rule language is to regulate the recurrent use of time-out when included in an IEP or BIP as a technique to increase or decrease a targeted behavior. Other use of time-out is not regulated by the rule. Additionally, the documentation requirements related to use of time-out, if any, are to be addressed in the IEP or BIP.

Comment. A parent affiliated with a regional advocacy group commented that rewording and definition of time- out would help with blatant misuse.

Agency Response. The agency believes the rule promotes the appropriate use of time-out as a behavior intervention strategy. Additionally, the term "time-out" is defined by TEC, §37.0021.

Comment. Two special education directors commented that it sometimes was necessary to use physical force to place a young child with disabilities in time-out due to a tantrum or similar behaviors. One director commented that physical force should be allowed only as a last resort.

Agency Response. Based on the definition of time-out found in TEC, §37.0021, the agency does not believe it is logical to use physical force or threat of physical force to place a student in a time-out location from which the student cannot be physically prevented from leaving. TEC, §37.0021, prohibits the use of locked, seclusionary time-out for students with disabilities.

Comment. One special education director requested that subsection (g)(1) be changed to read, "escorting or redirecting a student to time-out should not take on the appearance of physical force without restraint regulations (§89.1053(c)-(f)) being applied."

Agency Response. The agency disagrees and believes it is necessary to explicitly prohibit the use of physical force or threat of physical force to place a student in time-out.

Comment. One special education director, one principal, one speech therapist, one special education supervisor, and two assistant principals suggested wording changes with reference to adding prompting in subsection (g)(1) as an antecedent event which helps initiate a response in order to effectively learn new behaviors for time-out.

Agency Response. The agency disagrees and does not believe it is necessary to add this language to subsection (g)(1). The agency believes that professionals will be able to exhibit professional judgment in distinguishing physical force from guidance on the part of a professional.

Comment. A special services director requests clarification on the definition of time-out; specifically, how many sessions of time-out constitute "recurrent basis."

Agency Response. The agency does not believe it is necessary to attach a specific number to the rule and believes that professionals will be able to exhibit professional judgment in determining what is considered recurrent use to increase or decrease a targeted behavior.

Comment. A licensed specialist in school psychology requested clarification of the proposed rule with regard to options for students with disabilities who are not physically aggressive but are creating disruptions that interfere with the education of other students.

Agency Response. The agency provides the following clarification with regard to restraint. Restraint cannot be used to address defiant and disruptive behavior unless the behavior meets the definition of emergency, and the agency believes the rule addresses the spirit and intent of TEC, §37.0021, and is consistent with professionally accepted practices and standards.

Comment. One assistant superintendent suggested that subsection (g) read as follows, "Physical management shall not be used to place a student in time-out unless the student is disrupting the learning environment and has not responded to other less intrusive interventions."

Agency Response. The agency disagrees. Based on the definition of time-out found in TEC, §37.0021, the agency does not believe it is logical to use physical force or threat of physical force to place a student in a time-out location from which the student cannot be physically prevented from leaving. TEC, §37.0021, prohibits the use of locked, seclusionary time-out for students with disabilities.

Comment. The commissioner of the Texas Department of Mental Health and Mental Retardation suggested that the agency have a policy stating that the use of time-out is voluntary and may not be coerced in any way, and indicated that time-out generally is not considered an appropriate strategy for increasing positive behaviors.

Agency Response. The rule prohibits the use of physical force or threat of physical force to place a student in time-out. The rule does not attempt to regulate the routine use of time-out by teachers, but rather the recurrent use of time-out based on an IEP or BIP.

Comment. A grandparent affiliated with an advocacy organization commented that allowing the use of time-out for punishment would open the door to noncompliance of subsection (g)(1)-(3).

Agency Response. The agency relies on the definition of time-out provided by TEC, §37.0021, and regulates the use of time-out for students with disabilities through §89.1053.

Comment. A principal indicated concern in distinguishing time-out in the general classroom from time-out used on a recurrent basis.

Agency Response. The agency will provide additional clarification in upcoming training but believes subsection (g)(2) provides clarification in this area.

Comment. Two special education directors requested clarification for time-out similar to that provided under subsection (f) in relation to restraint and suggested stating that regular classroom management intervention (that some teachers may use with all students) such as asking a student to move away from the rest of a group for a short period of time (but remain in the classroom) is not related to the term of "time-out" as defined in this section.

Agency Response. The agency believes that the current definition of time-out addresses these concerns and that it is not necessary to add the suggested statements to the rule. Moving a student to another location in the classroom doesn't fall within the definition of time-out in TEC, §37.0021, and, therefore, isn't regulated or impacted by the rule.

Comment. A special education director questioned whether the state will provide districts with guidelines for time-out training.

Agency Response. Information will be disseminated through the statewide decentralized behavior and discipline management function at the Region IV ESC and through the network of regional ESC representatives.

Comment. The executive directors of the Texas Council of Administrators of Special Education, the Texas Elementary Principals and Supervisors Association, and the Texas Association of Secondary School Principals, the associate executive directors for the Texas Association of School Boards and the Texas Association of School Administrators, two directors of special education, and a director of special services recommended that subsection (h)(3) be rewritten to state, "Training on the use of time-out should be provided as a part of a program which addresses a full continuum of positive behavioral intervention strategies, and must address the impact of time-out on the ability of the student to be involved in and progress in the general curriculum and advance appropriately toward attaining the annual goals specified in the student's IEP."

Agency Response. The agency agrees in part and has adopted the revised wording with the exception of changing the word "should" to "must."

Comment. A special education director expressed concerns about the January 1, 2003, deadline for training and requested that the timeline be extended.

Agency Response. The agency agrees that additional time is necessary to complete the training requirements specified in rule and has extended the timeline to April 1, 2003.

Comment. A special education director and an assistant principal commented that the training demands are excessive and place a burden on the school and staff.

Agency Response. The agency understands the concerns but believes that it is important to support quality staff training as soon as possible after the effective date of the rule.

Comment. A special education director requested that subsection (h)(4) be rewritten to state, "All trained personnel must have knowledge of professionally accepted practices and standards regarding behavior management and use of time-out."

Agency Response. The agency disagrees and feels that instruction in current professionally accepted standards and practices is necessary.

Comment. A special education chairperson commented that everyone on a campus should be trained in therapeutic hold.

Agency Response. The agency disagrees and believes that the comment goes beyond the scope of the present rulemaking effort.

Comment. An ESC special education director requested that subsection (h)(3) language be replaced with, "Training on the use of time-out should be provided as a part of a program which addresses a full continuum of positive behavioral intervention strategies and must…"

Agency Response. The agency agrees in part and has adopted the revised wording with the exception of changing the word "should" to "must."

Comment. A special education supervisor, a principal, an associate principal, and two assistant principals requested that the timeline for training be extended to August 31, 2003.

Agency Response. The agency agrees that additional time is necessary to complete the training requirements specified in rule and has extended the timeline to April 1, 2003. The agency feels that it is important for training to be completed before the end of the 2002-2003 school year.

Comment. A special educator commented that districts should have the flexibility of using local staff to provide the required training and stated that the training should be required of all staff.

Agency Response. The agency supports the training of all staff but believes the training requirements as specified in rule are sufficient. The agency has not prescribed a single training methodology in rule.

Comment. A principal questioned where the money would come from for substitutes for the required training.

Agency Response. The agency believes that training is a critical component of the rule and believes that districts, ESCs, and other stakeholders will need to plan together for the efficient and effective implementation of training in order to most efficiently use district resources.

Comment. A parent case manager requested that the proposed rules be consistent with professionally accepted practices and standards of student discipline and techniques for behavior management.

Agency Response. The agency agrees and believes the rule reflects this philosophy.

Comment. A special education coordinator requested clarification regarding whether districts will have a choice of currently existing training programs and commented that the basic concept of §89.1053 is good.

Agency Response. The agency agrees and will not recommend the use of a single private provider or existing training program. The agency will work with the ESCs to develop a consistent training model based on current professionally accepted practices and standards.

Comment. An MHMR parent coordinator, a parent advocate, and an assistant principal suggested the required training specified in subsection (h)(2) be done annually.

Agency Response. The agency through rule requires staff to receive instruction in current professionally accepted practices and standards, but the agency does not believe it is necessary to define the training as annual to allow flexibility as driven by current practices and standards as well as individual circumstances.

Comment. A director of special services recommended the deletion of subsection (e) and the changing of the title of subsection (i) to read: "Documentation on use of restraint and time-out."

Agency Response. The agency disagrees and believes that documentation on the use of restraint in emergency situations is necessary for each occurrence.

Comment. One special education director requests clarification on why the documentation of "restraint" is so specific and the documentation of "time-out" is so vague, and another director requested clarifying language about documentation on the use of time-out.

Agency Response. The agency disagrees and believes that documentation on the use of restraint in emergency situations is necessary for each occurrence in which physical force is used. However, physical force is not used in relation to time-out, and, therefore, the documentation requirements are more flexible.

Comment. The executive directors of the Texas Council of Administrators of Special Education, the Texas Elementary Principals and Supervisors Association, and the Texas Association of Secondary School Principals and the associate executive directors for the Texas Association of School Boards and the Texas Association of School Administrators recommended that subsection (i) be rewritten to state, "Documentation on use of time-out. Necessary documentation or data collection regarding the use of time-out, if any, must be addressed in the IEP or BIP. The admission, review, and dismissal (ARD) committee must use any collected data (as part of the IEP or BIP process) to judge the over-all effectiveness of the intervention and provide a basis for making determinations regarding its continued use."

Agency Response. The agency does not believe it is necessary to add the parenthetical language or the word "over-all."

Comment. An ESC director of special education requested that "and determine communication mode and frequency of communication to parent" be added to the end of the sentence in subsection (i).

Agency Response. The agency does not believe that this clarification is necessary and believes that the required admission, review and dismissal committee process will provide for communication of information.

Comment. The commissioner for the Texas Department of Mental Health and Mental Retardation commented that any use of time-out should be documented so that the ARD committee can judge its effectiveness.

Agency Response. The agency disagrees and believes that this would be a significantly burdensome requirement.

Comment. A director of special programs requested clarification regarding the requirements for documenting time-out as it relates to the phrase, "if any" in subsection (i).

Agency Response. The agency will provide additional clarification and training in the future. However, the phrase "if any" reflects the ARD committee's discretion in establishing documentation requirements for time-out.

Comment. A special education director commented in support of subsection (j), stating that safety is the key.

Agency Response. The agency agrees.

Comment. The executive directors of the Texas Council of Administrators of Special Education, the Texas Elementary Principals and Supervisors Association, and the Texas Association of Secondary School Principals and the associate executive directors for the Texas Association of School Boards and the Texas Association of School Administrators recommended that "and others" be added to subsection (j) and that the phrase, "basic human necessities" be deleted.

Agency Response. The agency agrees in part and disagrees in part. The phrase "and others" has been added to subsection (j). However, the agency believes the term "basic human necessities" communicates an important consideration and requirement in the rule.

Comment. Three educational diagnosticians do not support the proposed subsection (j) of the rule stating that the current language implies that the teacher is not looking out for the best interest of the student.

Agency Response. The agency disagrees and believes that the wording needs to be explicit in rule.

Comment. A parent requested that the safety of all students be considered in relation to subsection (j).

Agency Response. The agency agrees that safety is a concern for all members of the school community.

Comment. The commissioner for the Texas Department of Mental Health and Mental Retardation commented that the terms "behavior management technique" and "discipline management practice" be defined.

Agency Response. The agency disagrees. The terms are used in §TEC, 37.0021, without definition based on a common understanding of their meaning.

Comment. Fourteen directors of special education, a superintendent, an associate director of special education, an ESC director of special education, a director of special populations, and one special education coordinator requested specification regarding which data will be collected for PEIMS in relation to subsection (k) and expressed agreement with the timeline proposed for data collection.

Agency Response. The agency will provide additional clarification regarding data collection through training and information dissemination efforts.

Comment. An assistant principal commented in support of the restraint documentation requirements.

Agency Response. The agency agrees.

Comment. A representative of the Alamo Area Council of Administrators of Special Education requested that both subsections (j) and (k) be deleted.

Agency Response. The agency disagrees and believes that both are necessary to ensure appropriate implementation of the requirements of §89.1053.

Comment. The executive directors of the Texas Council of Administrators of Special Education, the Texas Elementary Principals and Supervisors Association, and the Texas Association of Secondary School Principals and the associate executive directors for the Texas Association of School Boards and the Texas Association of School Administrators recommended that TEA not require the data noted in subsection (k) to be processed in PEIMS, but, at a minimum, requests that it be moved to the subsection on restraint to avoid confusion.

Agency Response. The agency disagrees and believes that it is appropriate to collect data regarding the use of restraint. Additionally, the agency does not feel that it is necessary to move subsection (k).

Comment. Three educational diagnosticians commented that the data collection requirements in subsection (k) are excessive, and a special education director expressed concerns about potentially inaccurate data or accurate data that reflect negatively on a district when the use of restraint may be necessary.

Agency Response. The agency disagrees and believes that the data are necessary for program evaluation purposes.

Comment. Three directors of special education, a special education supervisor, an assistant superintendent, and three assistant principals commented that requiring the entry of restraint data into PEIMS could punish some districts using best practices, with one director questioning why TEA would need the data.

Agency Response. The agency disagrees and believes that the data are necessary for program evaluation purposes at both the state and local levels.

Comment. A special education teacher commented that reporting of data through PEIMS could violate confidentiality requirements and would not be fair to teachers who teach in behavior units.

Agency Response. The agency disagrees. PEIMS already has established mechanisms for capturing and protecting personally identifiable data. Additionally, the data collected through PEIMS are necessary for program evaluation purposes at both the state and local levels.

Comment. An ESC special education director and fifty-one school staff members commented that restraint data should not be collected in PEIMS if documented in the BIP or IEP.

Agency Response. The agency disagrees and notes that the IEP and BIP will not drive the use of restraint. PEIMS data will reflect use of restraint in emergency situations, and the data are necessary for program evaluation purposes at both the state and local levels.

Comment. An ESC special education director and two directors of special education commented that subsection (k)needs to be moved after subsection (f).

Agency Response. The agency disagrees and will maintain subsection (k).

Comment. A special education department chairperson asked who was responsible for data collection and reporting through PEIMS.

Agency Response. It is the responsibility of LEAs to develop systems for ensuring the accurate entry of data into the PEIMS system.

§89.1054. Seclusion.

Comment. The state representative who sponsored Senate Bill 1196, 77th Texas Legislature, 2001, commented that legislative intent in regard to Texas Education Code (TEC), §37.0021(a), was to clearly prohibit the use of locked confinement as a discipline management practice or behavior management technique for students with disabilities. The representative further commented that subsections (b) and (c) in relation to the definition and use of seclusion, were intended to apply to all students, not just students with disabilities. Therefore, the representative commented that to promulgate rules regarding seclusion in Chapter 89 of the Texas Administrative Code would narrow the intended scope of the bill.

Agency Response. Based upon re-evaluation of the rules subsequent to filing as proposed, it has been determined that TEC, §37.0021, does not give the agency explicit rulemaking authority on the issue of seclusion. Therefore, the agency is withdrawing this proposed rule at this time.

Comment. A professor/representative for the Council for Exceptional Children and the president elect for Council for Children with Behavior Disorders, a president of the National Alliance for the Mentally Ill, a representative of The ARC of Texas, a representative of United Cerebral Palsy of Texas, a parent/director for Partners Resource Network, Inc., a parent, an advocate, and an assistant principal support the proposed rule within the context of prohibiting the use of seclusion, with the parent stating that the rule will strengthen requests for students to be provided with positive behavioral supports.

Agency Response. The agency has withdrawn proposed §89.1054, but agrees that TEC, §37.0021, could strengthen requests for students to be provided with positive behavioral supports.

Comment. A director of special education and a special education department chairperson support the proposed rule, with one stating that it is necessary to fulfill the Texas Education Code requirement.

Agency Response. The agency has withdrawn proposed §89.1054 and does not believe that a rule must be adopted in order to give effect to TEC, §37.0021(c).

Comment. A special education director commented that it should be within the discretion of professionals and the ARD committee to determine the appropriate use of seclusion. The director suggested that the proposed rule include language regarding: (1) the ARD committees' abilities to develop behavior intervention plans (BIPs) that allow the use of physical assistance in getting a student to a seclusion area if the nature of the incident warrants this professional decision; and, (2) use of locked doors when students are extremely aggressive.

Agency Response. The agency disagrees. TEC, §37.0021, prohibits the use of locked seclusionary time-out for students with disabilities.

Comment. One parent supports the proposed rule, as well as others proposed in the rules package; however, the parent requested that a system of enforcement also accompany special education rules. The parent commented that support should be given to the rules and teachers should be trained to support an inclusive environment.

Agency Response. The agency agrees that training, support, and enforcement all are important factors in the appropriate implementation of special education requirements.

Comment. A college instructor supports the proposed rule, however, he is concerned about teacher training being disseminated around the state to all regions and school districts and about parents being involved in the training so that everyone can work together to support the student.

Agency Response. The agency agrees that training of both school personnel and parents is necessary in implementing positive behavioral supports and appropriate behavior and discipline management practices and techniques. The agency supports a statewide decentralized leadership function for behavior and discipline management that provides support for technical assistance and training on these issues. However, TEC, §37.0021, does not give the agency explicit rulemaking authority on the issue of seclusion. Therefore, the agency is withdrawing the proposed rule at this time.

Comment. A special education director, a special education nurse, a school staff member, and a police officer suggested that the commissioner reconsider the rule since locked seclusion is necessary for some students with disabilities.

Agency Response. The agency disagrees. TEC, §37.0021, prohibits the use of locked seclusionary time-out for students with disabilities.

Comment. A special education teacher/administrator suggested that the TEA issue a special license with strict requirements for programs that utilize locked seclusion for students with disabilities whose ARD committees have determined that locked seclusion is necessary.

Agency Response. The agency disagrees. TEC, §37.0021, prohibits the use of locked seclusionary time-out for students with disabilities.

Comment. A special education teacher commented that the inability to use locked seclusion as a behavior management technique will put staff members, the student, and other students at a safety risk and will result in the use of restraint for longer periods of time.

Agency Response. TEC, §37.0021, prohibits the use of locked seclusionary time-out for students with disabilities. Therefore, the commissioner does not have the authority to promulgate rules that promote the use of locked, seclusionary time-out or confinement for students with disabilities.

Comment. Two parents, an educational diagnostician, a principal, and a special education counselor commented that seclusion rooms are necessary or may be appropriate for the safety of staff, other students, and the student with the outburst. One of the parents also commented that another benefit of placing a child in a seclusion room is that the child is not modeling inappropriate behavior for the other students. The principal suggested that seclusion for some students would prevent disruption of the educational environment. The special education counselor specifically requested clarification regarding the definition of seclusion in the law and applicability of the 50 square foot requirement to students with disabilities.

Agency Response. TEC, §37.0021, prohibits the use of locked seclusionary time-out for students with disabilities, regardless of the size of a seclusion room.

Comment. A principal from the Richardson ISD commented that, with the limitations on the use of seclusion and time-out, the only option left to a school was to call the police if the student couldn't be restrained and was a danger to others. The principal also questioned the district's legal liability when a student who was too large to restrain walked out of the building. The principal then suggested that the rules would be modified if the commissioner and others responsible for the rules would teach in a special education behavior class for a couple of weeks.

Agency Response. The agency disagrees and notes that TEC, §37.0021, prohibits the use of locked seclusionary time-out for students with disabilities.

Comment. A parent coordinator for MHMR suggested that seclusion should have time limits, supervision, and immediate parent notification.

Agency Response. TEC, §37.0021, prohibits the use of locked seclusionary time-out for students with disabilities.

Comment. A nonprofessional parent advocate and former member of the original behavior and discipline management steering committee expressed concerns about the small size of a 50 square foot room and commented that the gap between parents and educators must be shortened so that all members of the special education program could be trained and that people approach the issues with trust that all stakeholders care about children. The commenter encouraged everyone to work with the education service centers as partners, stay involved, and anticipate new learning.

Agency Response. TEC, §37.0021, prohibits the use of locked seclusionary time-out for students with disabilities, regardless of the size of a seclusion room. The agency agrees that a team approach to training and an atmosphere of trust will promote positive change.

Comment. A special education director commented that the use of "locked time out" is an authorized behavior management technique if its parameters for prevention and use are written into a behavior management program and if the technique is implemented within specific guidelines. The director further commented that the technique will prove unnecessary in the vast majority of cases when a competent psychologist has developed a good behavior management plan.

Agency Response. TEC, §37.0021, prohibits the use of locked seclusionary time-out for students with disabilities, regardless of the parameters for implementation.

Comment. A special education director requested clarification regarding whether TEC, §37.0021(f), still applies and whether seclusion may be used if a district has a space larger than 50 square feet.

Agency Response. TEC, §37.0021, prohibits the use of locked seclusionary time-out for students with disabilities, regardless of the size of a seclusion room.

Comment. A representative of Advocacy, Inc., recommended that the language from TEC, §37.0021(a), which limits confinement of students with disabilities, be added to §89.1054(a). Additionally, the representative recommended that the word "local" should be removed from the last sentence of subsection (c) or replaced with the word "federal."

Agency Response. The agency believes these comments have become moot since proposed §89.1054, Seclusion, has been withdrawn.

Comment. While a representative from the Texas Center for Disability Studies and a program administrator for the Disability Policy Consortium support the prohibition of seclusion of students with disabilities, they suggested that the rule include "state and federal" standards not "local" fire and safety codes as referenced in subsection (c).

Agency Response. The agency believes these comments have become moot since proposed §89.1054, Seclusion, has been withdrawn.

Comment. The executive director of the Texas Department of Protective and Regulatory Services requested clarification in relation to the proposed rule and TEC, §37.0021, asking specifically whether districts can place a student in a locked box, closet or room that is not designed solely to seclude a person and whether this can be done if the seclusion room is greater than 50 square feet of space.

Agency Response. TEC, §37.0021, prohibits the use of locked, seclusionary time-out for students with disabilities, regardless of the size of a seclusion room.

Comment. A teacher requested clarification regarding what should be done to protect a student and others who are being hurt when a student becomes a danger.

Agency Response. TEC, §37.0021, prohibits the use of locked, seclusionary time-out for students with disabilities. Technical support in the areas of behavior and discipline management can be accessed through the regional education service centers. Emergency situations also are addressed in §89.1053.

Comment. An educational diagnostician requested that the term "locked" be defined in relation to the difference between seclusion and time-out.

Agency Response. The agency disagrees and does not believe that a definition is necessary for appropriate implementation of TEC, §37.0021, and §89.1053.

Comment. A special education teacher with a master's degree in education requests clarification as to the applicability of the proposed rule and in-school suspension (ISS).

Agency Response. The agency disagrees that this clarification is necessary in the rule itself. Neither TEC, §37.0021, nor §89.1053 create exceptions for ISS.

Comment. Two success assistants and two educational diagnosticians do not support subsection (b) of the proposed rule since the use of a seclusion room has been a successful technique for certain students with disabilities.

Agency Response. TEC, §37.0021, prohibits the use of locked, seclusionary time-out for students with disabilities. The commissioner does not have the authority to promulgate rules that conflict with state law.

Comment. The commissioner of the Texas Department of Mental Health and Mental Retardation suggested that the reference in subsection (b)(3) should be 25 TAC §405(f) instead of 25 TAC §412.308(e) and suggested that the phrase "in mental health facilities and community programs" be added to the end of the sentence.

Agency Response. The agency disagrees. The wording incorporated in the proposed rule was in alignment with the wording of TEC, §37.0021. However, the comment now is moot since the proposed rule has been withdrawn.

§89.1070. Graduation Requirements.

Comment. A representative of the Alamo Area Council of Administrators of Special Education requested that wording be added to subsection (a) as follows: "However, graduation with a regular high school diploma under subsection (c) of this section, a student may return for services upon request as per §89.1035."

Agency Response. The agency disagrees. Subsection (i) of the rules provides the necessary clarification on this subject.

Comment. One special education director and one assistant superintendent commented that the termination of student eligibility that applies to graduation under subsections (b) and (d) should apply to all graduation options. The director and assistant superintendent stated that parents and students who want graduation should not have an option of continued service after graduation, and commented that, "It is also ridiculous to have an option that could require schools to provide services to students who are ineligible for funding."

Agency Response. The agency disagrees. It is a function of the ARD committee to determine when a student is eligible to graduate from high school and when it is appropriate. Students who graduate under subsection (c) should not be punished if it later is determined that additional services are necessary for a student to receive a free, appropriate public education. In addition, students who graduate under subsection (c) and who return to school continue to be eligible for funding as referenced in subsection (a).

Comment. A transition specialist would like the language in §89.1070(b) and (d) to clarify the content, credit, and curriculum requirements for graduating under these subsections. Specifically, in subsection (b) it was requested that the language discuss instruction in the Texas Essential Knowledge and Skills, on grade level, with no content modifications, and in subsection (d) it was requested that the issue of meeting minimum credit and curriculum requirements be discussed.

Agency Response. The agency disagrees. The agency will provide additional guidance and clarification on these issues through future training efforts.

Comment. Two special education directors, one special education coordinator, an educational diagnostician, and one speech-language pathologist, requested clarification of §89.1070(b)(1)-(2) as it relates to available options for students to meet state or district curriculum requirements. Specifically, clarification was requested regarding the role of resource classes and the use of "S" on an academic achievement record as it relates to the determination of graduation type.

Agency Response. Additional clarification will be provided through future training efforts.

Comment. A representative of the Alamo Area Council of Administrators of Special Education commented that council members were divided. One group wanted to retain "academic" as part of the wording in subsection (b)(1)-(2). The other group supported the proposed use of "curriculum". Clarification was requested on the difference in meaning of "curriculum" and "academics".

Agency Response. The agency will provide additional guidance and clarification on these issues through future training efforts.

Comment. One superintendent requested clarification regarding the difference between graduation requirements under §89.1070(b)(2) and §89.1070(c)(3), indicating that understanding is critical now for those students who may remain in school and receive services past graduation.

Agency Response. The agency will provide additional guidance and clarification on these issues through future training efforts.

Comment. Two special education directors requested that the rules clarify whether or not the regular high school diploma referred to in subsection (c) is exactly the same as the "regular high school diploma" in 34 CFR §300.534(c)(2).

Agency Response. The agency will provide additional guidance and clarification on these issues through future training efforts.

Comment. The legislative vice president of the Learning Disabilities Association of Texas restated the association's primary position that high stakes decisions for students with learning disabilities, including graduation decisions, must not be made on the basis of a single criterion such as a state or district-wide mandated assessment.

Agency Response. The agency agrees that multiple pieces of information should be considered by the ARD committee in making appropriate educational decisions for students with disabilities.

Comment. One executive director of special education states that "and" at the end of subsection (c)(2) should be replaced with "or", as the director does not believe that a student can meet the requirements of subsections (c)(2) and (c)(3).

Agency Response. The agency disagrees. Students with disabilities who graduate under subsection (c) must graduate with the same number of credits as students without disabilities, and they should participate in the same curriculum to the greatest extent appropriate. Therefore, use of the conjunction "and" is appropriate.

Comment. A representative of the Alamo Area Council of Administrators of Special Education commented that council members were divided regarding whether the ultimate word in subsection (c)(2) should be "and" or "or."

Agency Response. The agency believes the rule wording is appropriate. Students with disabilities who graduate under subsection (c) must graduate with same number of credits as students without disabilities, and they should participate in the same curriculum to the greatest extent appropriate. Therefore, use of the conjunction "and" is appropriate.

Comment. Two special education directors asked that clarification be added to subsection (c)(3) to show that "modification" is referring to "curriculum modifications."

Agency Response. The agency disagrees. This clarification would be inappropriate because the scope of modifications in this scenario could go beyond curriculum modifications.

Comment. A transition specialist and an education specialist requested a definition of "full-time employment" and asked whether it meant the student had been employed full-time for a specific period of time prior to graduation or the student would begin/obtain full-time employment after graduation.

Agency Response. The agency will provide additional guidance and clarification through future training efforts.

Comment. A special education program coordinator asked for clarification of the terms "demonstrated mastery of specific employability skills and self-help skills" in subsection (c)(1)(B) and requested information on the suitability of presently available high school courses that meet the specific employability skills.

Agency Response. The agency disagrees. The language in this section has remained consistent, and the agency does not believe that new interpretations are necessary. Additional guidance and clarification on these issues can be provided through the regional education service centers.

Comment. The commissioner of the Texas Department of Mental Health and Mental Retardation (MHMR) stated in reference to subsection (c)(1)(C) that access to MHMR services should not be a criterion for graduation and is concerned that there is nothing in the rule that precludes this interpretation.

Agency Response. The agency disagrees and believes that the current rule wording provides necessary guidance and flexibility to school districts.

Comment. A transition specialist and an educational specialist ask for a clarification/definition of "access to services" in subsection (c)(1)(C) and requested clarification regarding how this option is different from full-time employment and if educational options include enrollment in post-secondary education.

Agency Response. The agency disagrees. The language in this section has remained consistent, and the agency does not believe that new interpretations are necessary. Additional guidance and clarification on these issues can be provided through the regional education service centers.

Comment. A director of special education suggested merging §89.1070(c)(2) and (3) into one statement to read as follows: "The state's or district's (whichever is greater) minimum credit requirements for students without disabilities; and the state's or district's minimum curriculum requirements to the extent possible with modifications/substitutions only when it is determined necessary by the ARD committee for the student to receive an appropriate education."

Agency Response. The agency disagrees and believes the current rule structure provides clarity.

Comment. A principal and an assistant principal in charge of special education support the language and rule listed in §89.1070. They note that subsection (c)(1)-(3) provides various avenues for graduation for students with disabilities.

Agency Response. The agency agrees.

Comment. A representative of the Alamo Area Council of Administrators of Special Education requested that subsection (c)(1)(A) should be reworded to include "part-time" as well as full-time employment.

Agency Response. The agency will provide additional guidance and clarification on these issues through future training efforts.

Comment. An educational specialist asks if a student who no longer meets age eligibility requirements must meet minimum credit requirements to receive a regular high school diploma and requested that the intent be clearly stated.

Agency Response. It is the expectation of the agency that, through appropriate education and transition planning, a school district would ensure that a student who ages out and completes his/her IEP would have accumulated more than the required number of credits to graduate. Therefore, students should not be punished at the time of graduation for lack of appropriate planning on the part of school districts and ARD committees.

Comment. A parent who also is an educational diagnostician requested that the phrase regarding a required evaluation be deleted from subsection (e) based on an opinion that it is not required by federal regulations, but requested that if the requirement is maintained that the rule specify when the evaluation prior to graduation is due.

Agency Response. The agency disagrees and believes that the evaluation is necessary in order to maintain a consistent interpretation of federal regulations as it relates to the ability of students who graduate under subsection (c) to return to school as eligible students. If the option of returning to school is available (rights to a free, appropriate public education are not terminated), then the evaluation preceding the graduation is required as well in order to consistently interpret the nature of graduation under subsection (c). Furthermore, the agency does not feel that it is necessary to proscribe specific timelines for the completion of this evaluation and that the needs of individual students will dictate appropriate timelines.

Comment. Two special education directors, three educational diagnosticians, one special education coordinator, and three speech-language pathologists commented that the evaluation required prior to graduation for those students graduating under subsection (c) should not be interpreted as re-evaluation for eligibility, but an informal evaluation of skills for employability due to concerns about the re-evaluation determining that a student no longer was eligible for services. One special education director requested that subsection (e) be returned to original wording.

Agency Response. The agency disagrees. Federal regulations regarding evaluation and re-evaluation provide sufficient flexibility related to requirements for considering existing data and acquiring new data as it relates to both eligibility determinations and decisions about educational placement and services. However, the agency believes that the evaluation now required by subsection (e) is necessary in order to maintain a consistent interpretation of federal regulations as it relates to the ability of students who graduate under subsection (c) to return to school as eligible students. If the option of returning to school is available (rights to a free, appropriate public education are not terminated), then the evaluation preceding the graduation is required as well in order to consistently interpret the nature of graduation under subsection (c).

Comment. A director of special services and an ESC director of special education commented that the rule should clarify that students who graduate under subsection (b) do not require an evaluation prior to graduation.

Agency Response. The agency disagrees and believes that the evaluation is necessary in order to maintain a consistent interpretation of federal regulations as it relates to the ability of students who graduate under subsection (c) to return to school as eligible students. If the option of returning to school is available (rights to a free, appropriate public education are not terminated), then the evaluation preceding the graduation is required as well in order to consistently interpret the nature of graduation under subsection (c).

Comment. In reference to subsection (e), one executive director of special education, one special education teacher, and one special education coordinator stated that 34 CFR §300.534(c) does not require a re-evaluation if the student is going to graduate with a regular diploma. The director and the coordinator feel that the additional assessments would create an extreme burden on the school districts.

Agency Response. The agency disagrees and believes that the evaluation is necessary in order to maintain a consistent interpretation of federal regulations as it relates to the ability of students who graduate under subsection (c) to return to school as eligible students. If the option of returning to school is available (rights to a free, appropriate public education are not terminated), then the evaluation preceding the graduation is required as well in order to consistently interpret the nature of graduation under subsection (c).

Comment. The executive directors of the Texas Council of Administrators of Special Education, the Texas Elementary Principals and Supervisors Association, and the Texas Association of Secondary School Principals and the associate executive directors for the Texas Association of School Boards and the Texas Association of School Administrators recommended that the phrase added to subsection (e) be deleted based on the opinion that is goes beyond federal requirement. As an alternative, it was suggested that the section be rewritten to allow the ARD committee to determine when a re-evaluation would be necessary.

Agency Response. The agency disagrees and believes that the evaluation is necessary in order to maintain a consistent interpretation of federal regulations as it relates to the ability of students who graduate under subsection (c) to return to school as eligible students. If the option of returning to school is available (rights to a free, appropriate public education are not terminated), then the evaluation preceding the graduation is required as well in order to consistently interpret the nature of graduation under subsection (c). Additionally, the ARD committee determines what, if any, additional data are needed for re-evaluation.

Comment. A special education director requested that the language in subsection (e) be clarified since the ARD committee does not conduct the evaluation.

Agency Response. The agency agrees and has revised the language in subsection (e).

Comment. An educational diagnostician requested clarification on subsection (e) in relationship to what the ARD committee evaluates, the purpose of the evaluation, and what happens if the student does not perform satisfactorily.

Agency Response. The agency has added clarifying language to subsection (e) in relation to the role of the ARD committee. Additional clarification will be provided through training efforts.

Comment. A transition coordinator expressed disappointment in the fact that the word "academic" was removed from subsection (b)(1)-(2) based on the belief that this was intended to put less emphasis on academics for students. Additionally, the coordinator requested clarification on subsection (e) regarding the ARD committee's role in the evaluation and the scope of the evaluation as it relates to full, individual evaluations.

Agency Response. The agency disagrees that the replacement of the word "academic" with the words "curriculum and" puts less emphasis on the academic needs of students. The wording clarifies that the standards for students with disabilities match those established for all students. Additional clarification regarding evaluation prior to graduation will be provided through future training efforts. However, the agency has added clarifying language to subsection (e) in relation to the role of the ARD committee.

Comment. A representative of the Alamo Area Council of Administrators of Special Education requested that the language in subsection (e) be revised to state, "the ARD committee shall determine the need for an evaluation."

Agency Response. The agency disagrees and believes that the evaluation is necessary in order to maintain a consistent interpretation of federal regulations as it relates to the ability of students who graduate under subsection (c) to return to school as eligible students. Therefore, the ARD committee would not have the authority to make the requested determination. However, the agency has added some clarifying language to subsection (e) in relation to the role of the ARD committee.

Comment. Two special education directors requested that subsection (e) clarify that a student who will graduate with a regular diploma does not need an evaluation to graduate.

Agency Response. The agency disagrees and believes that subsection (e) clearly communicates agency rulemaking intent.

Comment. An education specialist suggested that the wording in subsection (e) be changed to state that an ARD committee will address or request an evaluation prior to graduation. Additionally, clarification was requested regarding the scope and timing of the required evaluation. The specialist and a director of special education also requested that the term "views of the parents" be clarified in subsection (e) in relation to views of the evaluation or the graduation.

Agency Response. The agency agrees in part and disagrees in part. Clarifying language has been added regarding the role of the ARD committee in the evaluation process. Additional clarification regarding evaluation prior to graduation will be provided through future training efforts. The agency does not believe that the term, "views of the parent" requires clarification.

Comment. A transition specialist and an educational diagnostician requested that the agency clarify the purpose of the evaluation conducted under subsection (e) and asked whether it was to determine continued student eligibility or the ability of the student to meet the graduation requirements defined in subsection (c). Additionally, five directors of special education requested clarification regarding the definition/type, scope and/or timing of the required evaluation and what is to be evaluated.

Agency Response. The agency believes that the evaluation is necessary in order to maintain a consistent interpretation of federal regulations as it relates to the ability of students who graduate under subsection (c) to return to school as eligible students. If the option of returning to school is available (rights to a free, appropriate public education are not terminated), then the evaluation preceding the graduation is required as well in order to consistently interpret the nature of graduation under subsection (c). Additionally, a critical purpose of the evaluation would be to determine whether the child continues to need special education and related services in order to receive a free, appropriate public education or if graduation is appropriate. The extent of the re-evaluation would be determined as it is for all students with disabilities. Additional clarification regarding evaluation prior to graduation will be provided through future training efforts.

Comment. One educational diagnostician requested that "conduct an evaluation prior to graduation" be clarified and recommended the continued use of ARD recommendations regarding evaluation and/or collection of data.

Agency Response. Additional clarification regarding evaluation prior to graduation will be provided through future training efforts. Also, the extent of the re-evaluation would be determined as it is for all students with disabilities.

Comment. An educational diagnostician expressed concern that subsection (e) means another type of test for students with disabilities and believes that students have been tested enough.

Agency Response. The agency disagrees. Flexibility regarding the scope of this re-evaluation is the same as for all re-evaluations for students with disabilities. Pertinent existing data can play a critical role in the completion of the re-evaluation.

Comment. A superintendent requested clarification regarding the scope of the evaluation in subsection (e) and questioned whether the requirement would be for a full, individual evaluation.

Agency Response. Flexibility regarding the scope of this re-evaluation is the same as for all re-evaluations for students with disabilities. Pertinent existing data can play a critical role in the completion of the re-evaluation.

Comment. The executive director of the Texas Council of Developmental Disabilities, a program administrator for the Disability Policy Consortium, a representative of the Texas Center for Disability Studies, the president of The ARC of Wichita County, a parent/case manager, a commenter whose role is unidentified, and three parents support the intent and/or the proposed language of subsection (f), allowing students to participate in graduation ceremonies with their age-appropriate peers and then continue their public school education.

Agency Response. The agency agrees and has provided additional clarification to the subsection.

Comment. One parent case manager, a parent/school nurse, and a parent commented that students with disabilities should be allowed to participate in graduation ceremonies with age-appropriate peers and then continue their public school education.

Agency Response. The agency has revised wording in subsection (f) to reflect that students who participate in graduation ceremonies but who will remain in school to complete their education do not have to be evaluated in accordance with subsection (e).

Comment. One parent requested that the agency strengthen the wording for subsection (f) to ensure the opportunity for students with disabilities to participate in the graduation ceremony and requested that the issue be addressed at the state level to ensure consistent practices across districts.

Agency Response. The agency disagrees but has revised wording in subsection (f) to reflect that students who participate in graduation ceremonies but who will remain in school to complete their education do not have to be evaluated in accordance with subsection (e).

Comment. Fifteen special education directors, a director of special populations, an associate director of special education, one special education coordinator, and one ESC special education director thanked the agency for clarifying that students may participate in graduation ceremonies with their age appropriate peers even if they plan to continue their education in the public schools. In addition, it was requested that there be clarification indicating that it is acceptable for these students to receive a certificate noting their accomplishments and participation in this important ceremony.

Agency Response. The agency does not believe rulemaking is necessary to provide the requested clarification.

Comment. A parent commented that they did not believe in blanket graduations. It appears to the commenter that blanket graduations encourage children being "shuffled" through the system.

Agency Response. The agency agrees that graduation must be an individually determined decision for students with disabilities.

Comment. A representative of the United Cerebral Palsy of Texas requested that the rule clarify "students may participate in the graduation ceremony without graduating and receiving a diploma."

Agency Response. The agency does not believe that this clarification is necessary to convey the intended meaning of the rule but has revised wording in subsection (f) to reflect that students who participate in graduation ceremonies but who will remain in school to complete their education do not have to be evaluated in accordance with subsection (e).

Comment. A special education director stated that §89.1070 continues to be a problem in some schools and requested that TEA make a determination in writing to end the guesswork.

Agency Response. The agency is uncertain about the meaning of this comment. Additional training will be provided related to adopted commissioner's rules.

Comment. A representative from Advocacy Inc., and a governmental affairs specialist for The ARC of Texas expressed concerns that the proposed language is not specific enough and recommend a change in the proposed language of subsection (f). Advocacy Inc. is concerned that the proposed language of subsection (f) is not specific enough and recommended that it read, "Students who are not graduating under subsection (c) of this section and who will remain in school to complete their education may participate in graduation ceremonies with their non- disabled age-appropriate classmates. Students who will participate in the graduation ceremony without receiving a diploma do not have to be evaluated in accordance with (e) of this section.

Agency Response. The agency disagrees but has revised wording in subsection (f) to reflect that students who participate in graduation ceremonies but who will remain in school to complete their education do not have to be evaluated in accordance with subsection (e).

§89.1131. Qualifications of Special Education, Related Service, and Paraprofessional Personnel.

Comment. A superintendent commented that the district in which she works has no students with visual impairments.

Agency Response. The agency appreciates the comment.

Comment. An attorney and a representative for the National Federation of the Blind, a representative of the National Federation for the Blind, Progressive Chapter, the president of the Texas Association of Blind Students, the president of the National Association of Blind Students, and four unidentified commenters requested that the National Blindness Professional Certification Board be added to the rule as an additional certifying organization for orientation and mobility specialists.

Agency Response. The agency disagrees with the request. Currently, there is not enough information available about this newly developed certification to determine if it meets the highest standard requirement under the Individuals with Disabilities Education Act-Part B. A thorough review of the suggested certification standards cannot be completed within the proposed timelines for approval of these proposed rules. The option may be explored at a later date, and considered for a future rule revision.

Comment. One assistant superintendent and one director of special education requested clarification regarding the removal of the Association for Education and Rehabilitation of the Blind and Visually Impaired as a certifying organization for orientation and mobility specialists based on concerns about the availability of certified personnel.

Agency Response. The Association for Education and Rehabilitation of the Blind and Visually Impaired (AER) is a professional organization that historically certified orientation and mobility specialists. However, it no longer does so. All orientation and mobility specialists who originally were certified under this organization were required to transfer their certification to the Academy of Certification of Vision Rehabilitation and Education Professionals (the Academy) by December 1, 2001. As of that date, the AER ceased to provide any certification recognition.

Comment. An attorney for the National Federation of the Blind requested that, for the sake of clarity, the rule not be changed.

Agency Response. The agency disagrees. The rule must be changed since the Association for Education and Rehabilitation of the Blind and Visually Impaired (AER) no longer is a certifying body. Both the AER and the Academy are listed in current rule to accommodate those who were in the process of transferring the certification during the transition period prior to December 1, 2001. The inclusion of AER no longer is accurate.

Comment. A representative of the Learning Disabilities Association of Texas expressed concerns regarding the use of unqualified individuals serving as teachers for students with learning disabilities and stated that the granting of waivers by the state allowing the placement of unprepared personnel in the classroom should not be an option.

Agency Response. The nature of this comment is beyond the scope of the current rule changes, which clarify requirements for the certification of orientation and mobility specialists. The Agency supports requirements regarding the use of qualified personnel in the instruction of students with disabilities. The State Board for Educator Certification is the state agency with the authority to promulgate specific rules related to certification requirements for educators.

Comment. One educational diagnostician questioned the source and availability of fully certified staff as referenced in subsection (a).

Agency Response. The nature of this comment is beyond the scope of the current rule changes, which clarify requirements for the certification of orientation and mobility specialists. The agency is committed to increasing the availability of qualified staff for the provision of services to students with disabilities.

Comment. One special education director requested clarification regarding how the new rule will affect teachers practicing on a district teaching permit.

Agency Response. It was not the intention of the agency through this rule revision to alter requirements related to the granting of district teaching permits. District teaching permits cannot be granted to special education professionals, who, according the federal law, must meet the highest state standard related to qualification.

§89.1141. Education Service Center Regional Special Education Leadership.

Comment. An Education Service Center (ESC) executive director submitted substitute language to subsections (a), (b), and (d). It was suggested that subsection (a) be revised to note that the ESCs will participate with the TEA to promote and implement leadership and information dissemination activities to school districts and charter schools, with parents and communities removed from the list. The commenter suggested an additional sentence stating, "The ESCs will facilitate the development of systems to disseminate information to parents and communities." It was suggested that subsection (b) be revised to remove parents of students with disabilities from the first sentence and to add a sentence stating, "The ESCs will facilitate the development of systems that provide access for parents of students with disabilities to joint training, technical assistance and support." Suggested wording for subsection (d) removed the reference to Texas Education Code (TEC), §8.051(d)(5), and changed the reference to "stakeholders" in the last sentence to "school districts and charter schools."

Agency Response. The agency has considered the suggested language and made revisions to the proposed rule to reflect agency intent. It was not the agency's intention to create an expectation for support to parents of students with disabilities that would create a standard of service that ESCs could not provide or one that would lead to problems between ESCs and local school districts. However, ESCs receive federal special education discretionary funding to provide technical assistance, training, and support. These funds are the same resources the agency would use to provide the same services if ESCs did not exist. The ESCs provide a majority of the professional development regarding special education in our state. The agency's intent was to utilize an existing system of professional development to create opportunities for parents and special and general education personnel to receive joint training. If the agency needed to create a separate system for the provision of joint training, the agency would need to recapture funds currently sent to the ESCs. Additionally, it is important for the needs of parents to be considered in establishing ESC priorities, and language has been revised in response to the comment to address this need while addressing ESC comments and concerns. Furthermore, the agency feels the reference to TEC, §8.051(d)(5), is appropriate and will retain it in the adopted rules.

Comment. Two ESC special education administrators, an ESC associate director for instructional services, a superintendent, and an assistant superintendent recommended that the last sentence of subsection (a) be worded, "The ESCs will develop a model of information dissemination that will flow from the ESC to school districts and charter schools in order to facilitate the distribution of pertinent information to parents and communities." The commenters also suggested that the last sentence of subsection (b) be worded, "The ESCs will facilitate the development of a structure for the delivery of training and technical assistance and support to parents of students with disabilities." A further suggestion was to revise the last sentence of subsection (d) to state, "Any charges to school districts or charter schools must be determined only after priorities have been established through input from affected school districts and charter schools, including data collected from parents and communities through partnerships with school districts and charter schools."

Agency Response. The agency has considered the suggested language and made revisions to the proposed rule based on comments and to reflect agency intent. It was not the agency's intention to create an expectation for support that would create a standard of service that ESCs could not provide or one that would lead to problems between ESCs and local school districts. However, ESCs receive federal special education discretionary funding to provide technical assistance, training, and support. These funds are the same resources the agency would use to provide the same services if ESCs did not exist. The ESCs provide a majority of the professional development regarding special education in our state. The agency's intent was to utilize an existing system of professional development to create opportunities for parents and special and general education personnel to receive joint training. If the agency needed to create a separate system for the provision of joint training, the agency would need to recapture funds currently sent to the ESCs.

Comment. Two ESC special education directors, an assistant superintendent, and an ESC executive director, on behalf of the 20 ESC executive directors on the Commissioner's Cabinet for Regional Services, submitted suggested wording for subsections (a), (b), and (d). It was suggested that subsection (a) be revised to note that the ESCs will participate with the TEA to promote and implement leadership and information dissemination activities to school districts and charter schools, with parents and communities removed from the list. An additional sentence was added stating, "The ESCs will develop a model of information dissemination that will flow from the ESC to school districts and charter schools in order to facilitate the distribution of pertinent information to parents and communities." It was suggested that subsection (b) be revised to remove parents of students with disabilities from the first sentence and to add a sentence stating, "In conjunction with local district educators, the ESCs will facilitate the development of a structure for the delivery of training, technical assistance and support to parents of students with disabilities." Suggested wording for subsection (d) removed the reference to TEC, §8.051(d)(5), and changed the reference to "stakeholders" in the last sentence to "school districts and charter schools, including data collected from parents and community through partnership with the school districts and charter schools."

Agency Response. The agency has considered the suggested language and made revisions to the proposed rule to reflect agency intent and ESC comment. It was not the agency's intention to create an expectation for support to parents of students with disabilities that would create a standard of service that ESCs could not provide or one that would lead to problems between ESCs and local school districts. However, ESCs receive federal special education discretionary funding to provide technical assistance, training, and support. These funds are the same resources the agency would use to provide the same services if ESCs did not exist. The ESCs provide a majority of the professional development regarding special education in our state. The agency's intent was to utilize an existing system of professional development to create opportunities for parents and special and general education personnel to receive joint training. If the agency needed to create a separate system for the provision of joint training, the agency would need to recapture funds currently sent to the ESCs. However, it is important for the needs of parents to be considered in establishing ESC priorities, and language has been revised in response to this comment to address this need. Furthermore, the agency feels the reference to TEC, §8.051(d)(5), is appropriate and will retain it in the adopted rules.

Comment. An ESC special education coordinator recommended that subsection (a) be broken into two subsections, (a) and (c), and that references to parents and communities be removed from subsection (a).

Agency Response. The agency has considered the suggested language and made revisions to the proposed rule to reflect agency intent. It was not the agency's intention to create an expectation for support to parents of students with disabilities that would create a standard of service that ESCs could not provide or one that would lead to problems between ESCs and local school districts. However, ESCs receive federal special education discretionary funding to provide technical assistance, training, and support. These funds are the same resources the agency would use to provide the same services if ESCs did not exist. The ESCs provide a majority of the professional development regarding special education in our state. The agency's intent was to utilize an existing system of professional development to create opportunities for parents and special and general education personnel to receive joint training. If the agency needed to create a separate system for the provision of joint training, the agency would need to recapture funds currently sent to the ESCs.

Comment. An ESC special education coordinator recommended that subsection (b) be broken into two subsections, (d) and (e), and reworded to remove parents of students with disabilities from subsection (b) while creating a subsection that states, "Based on the results of a comprehensive needs assessment, each ESC will provide technical assistance and support to districts and charter schools to build capacity for training and information dissemination to parents of students with disabilities and communities."

Agency Response. The agency has considered the suggested language and made revisions to the proposed rule to reflect agency intent. It was not the agency's intention to create an expectation for support to parents of students with disabilities that would create a standard of service that ESCs could not provide or one that would lead to problems between ESCs and local school districts. However, ESCs receive federal special education discretionary funding to provide technical assistance, training, and support. These funds are the same resources the agency would use to provide the same services if ESCs did not exist. The ESCs provide a majority of the professional development regarding special education in our state. The agency's intent was to utilize an existing system of professional development to create opportunities for parents and special and general education personnel to receive joint training. If the agency needed to create a separate system for the provision of joint training, the agency would need to recapture funds currently sent to the ESCs.

Comment. An ESC special education coordinator recommended that the proposed subsection (c) be moved to subsection (b) within the revised structure proposed in the previous two comments and that subsection (d) be reworded into a new subsection (f) which states, "Each ESC must utilize available TEA funding to implement activities and services identified under subsections (a)-(e) of this section. If additional funding is needed to implement activities and services under subsections (a)-(e), the ESC may charge for services. Any charges must be for activities and services that are not funded from available TEA funds. If additional funding is needed to implement supplementary or enhanced activities identified through the regional needs assessment process, ESCs may access and utilize alternate sources of funding."

Agency Response. The agency has considered the suggested language and made revisions to the proposed rule to reflect agency intent.

Comment. An ESC special education director proposed that subsection (a) be rewritten to include wording such as, ESCs will "participate" with TEA to promote…to school districts, and charter schools, and suggested that parents and communities be left out. Additionally, it was suggested that a sentence be added to reflect that ESCs will develop a model with school districts that will result in the flow of information from ESCs to school districts and charter schools regarding pertinent information or training. The director further suggested that subsection (b) be rewritten to promote developing a structure for obtaining input from districts on their needs for delivering services to parents of students with disabilities and suggested that "and parents of students with disabilities" be eliminated. Additionally, it was requested that a sentence be added to subsection (b) that states that ESCs will develop a structure with LEAs for the delivery of training, technical assistance, and support to parents of students with disabilities. The director commented that subsection (d) be revised to remove, "any charges must be determined by…stakeholders."

Agency Response. The agency has considered the suggested language and made revisions to the proposed rule to reflect agency intent. It was not the agency's intention to create an expectation for support that would create a standard of service that ESCs could not provide or one that would lead to problems between ESCs and local school districts. However, ESCs receive federal special education discretionary funding to provide technical assistance, training, and support. These funds are the same resources the agency would use to provide the same services if ESCs did not exist. The ESCs provide a majority of the professional development regarding special education in our state. The agency's intent was to utilize an existing system of professional development to create opportunities for parents and special and general education personnel to receive joint training. If the agency needed to create a separate system for the provision of joint training, the agency would need to recapture funds currently sent to the ESCs.

Comment. A superintendent and a commenter whose role was unidentified disagreed with the proposed language of §89.1141. The superintendent stated his belief that the provision of services to parents should be done by the LEAs based on a concern that the rule may encourage adversarial relationships between ESCs and LEAs, and cause confusion on the part of the parents. The other commenter stated that the ESC's role should be one of facilitation instead of taking an awkward hands-on role with parents.

Agency Response. The agency disagrees and believes that the joint training requirement found in federal regulations must be considered by the education service centers in their role as the state's primary resource for providing technical assistance, training, and support in the area of special education.

Comment. In relation to subsection (e), a parent/case manager commented that training, technical assistance, and support should be provided to both parents and school staff and would like to implement a law mandating all teachers to undergo training to help a child progress academically and socially.

Agency Response. The agency agrees that training of both parents and school staff is an important element in achieving positive results for students with disabilities, and the agency agrees that both ESCs and LEAs play an important role in the provision of joint training.

Comment. A representative of Advocacy, Inc., commented in support of the addition of "parents" to those groups who will receive training, technical assistance, and support from education service centers, stating that parents in ARD meetings are often at an "information disadvantage" and would greatly benefit from access to the same information as school districts.

Agency Response. The agency agrees that training of both parents and school staff is an important element in achieving positive results for students with disabilities and agrees that the ESCs are a primary source of training, technical assistance, and support in the area of special education for students with disabilities. Although the agency agrees that ESCs should provide for the joint training of parents, special education, related services, and general education personnel, it was not the agency's intent to mislead or confuse parents and other stakeholders on what the role and responsibility would be for ESCs relating to parents of students with disabilities.

Comment. A parent/school nurse commented in support of joint training of school staff and parents, adding that cooperative efforts of parents and teachers give the student a much better chance of success.

Agency Response. The agency agrees that training of both parents and school staff is an important element in achieving positive results for students with disabilities.

Comment. A program director for The ARC of Texas commented that she really likes the fact that the information dissemination will include families and communities as well.

Agency Response. The agency agrees that families and communities are critical stakeholders in the special education process. Additionally, the agency has made revisions to the proposed rule to reflect agency intent.

Comment. The president of The ARC of Wichita County, the executive director of the Texas Council on Developmental Disabilities, a governmental affairs specialist for The ARC of Texas, a parent case manager, four parents, and two commenters whose roles were unidentified commented in support of the proposed changes to the language in §89.1141 regarding the provision of training, technical assistance, and support to school personnel, administrators, paraprofessionals, and parents.

Agency Response. The agency agrees and supports the federal joint training requirement. However, although the agency agrees that ESCs should provide for the joint training of parents, special education, related services, and general education personnel, it was not the agency's intent to mislead or confuse parents and other stakeholders on what the role and responsibility would be for ESCs relating to parents of students with disabilities.

Comment. A representative of the Alamo Area Council of Administrators of Special Education commented that the language on parent training should be left in the rule and indicated that the group also would like a local process formalizing how parents would be trained.

Agency Response. The agency agrees that a formal, local process for parent training could be beneficial. Additionally, the agency has revised rule language to reflect agency intent.

Comment. A representative of the Learning Disabilities Association of Texas expressed gratification to see the statement "ESCs will work with the TEA to promote and implement leadership and information dissemination activities to school districts, charter schools, parents, and communities." The representative supports training to enable parents to serve as equal partners in the education process.

Agency Response. The agency agrees that training of both parents and school staff is an important element in achieving positive results for students with disabilities. Although the agency agrees that ESCs should provide for the joint training of parents, special education, related services, and general education personnel, it was not the agency's intent to mislead or confuse parents and other stakeholders on what the role and responsibility would be for ESCs relating to parents of students with disabilities.

Comment. A parent commented that the Region XVII ESC always has had an open-door policy when it came to parents attending workshops, and commented that, in general, parent training efforts need to be increased.

Agency Response. The agency agrees that training of both parents and school staff is an important element in achieving positive results for students with disabilities and supports additional training efforts. The agency acknowledges the ongoing joint training efforts of some ESCs.

Comment. A parent suggested that staff for parent training be persons not employed by the Texas Education Agency, LEAs, or attorneys with connection to the parties.

Agency Response. The agency disagrees and believes that all knowledgeable parties should be considered and appropriately utilized for training and technical assistance activities.

Comment. A parent who also is a director of a community college's center for students with disabilities commented that parent involvement in planning as well as presentations in the region is critically important and works very well.

Agency Response. The agency agrees that input from parents is an important part of the needs assessment and program planning process.

Comment. In relation to subsection (f), two teachers of students with visual impairments (VI) expressed concern that only one staff person at an ESC is required to be VI certified under the present rule. And questioned how only one certified VI staff person could be expected to maintain the present high standard.

Agency Response. The agency agrees and disagrees in part. The agency agrees that services to students with visual impairments and technical assistance/support for professionals that work with students with visual impairments requires a professional with specialized knowledge and skills. However, the agency continues to disagree that each ESC must be required to employ an individual certified in the education of students with visual impairments to deliver such services and support. Therefore, the agency has amended the proposed subsection to address the need for properly certified personnel regardless of the funds used to offer the services, while maintaining the original intent to provide flexibility in the delivery of regional services for students with visual impairments.

Comment. One VI teacher requested that the previous §89.1141 not be repealed, or that any new rule, if necessary, address the ESC funding issue without changing the VI hiring requirement contained in the previous subsection (e).

Agency Response. The agency agrees and disagrees in part. The agency agrees that services to students with visual impairments and technical assistance/support for professionals that work with students with visual impairments requires a professional with specialized knowledge and skills. However, the agency continues to disagree that each ESC must be required to employ an individual certified in the education of students with visual impairments to deliver such services and support. Therefore, the agency has amended the proposed subsection to address the need for properly certified personnel regardless of the funds used to offer the services, while maintaining the original intent to provide flexibility in the delivery of regional services for students with visual impairments.

Comment. Three teachers of the visually impaired, an ESC staff member, and a family specialist for the Texas Deafblind Outreach commented that the present system under §89.1141 works because it ensures that a certified specialist is available from the ESC to the LEA to the family, and, if eliminated, would take away public oversight and assurance of quality services at the ESCs. The commenters expressed concern that proposed language relies on ESC compliance with the standard application system (SAS) for education service centers, which they state is a TEA internal document that changes annually and is not open to public comment or input.

Agency Response. The agency agrees and disagrees in part. The agency agrees that services to students with visual impairments and technical assistance/support for professionals that work with students with visual impairments requires a professional with specialized knowledge and skills. However, the agency continues to disagree that each ESC must be required to employ an individual certified in the education of students with visual impairments to deliver such services and support. Therefore, the agency has amended the proposed subsection to address the need for properly certified personnel regardless of the funds used to offer the services, while maintaining the original intent to provide flexibility in the delivery of regional services for students with visual impairments.

Comment. Twenty-six VI teachers, six VI consultants, one special education teacher, five parents, one principal, an employee of the Texas School for the Blind and Visually Impaired, one special education director, one assistant superintendent, one occupational therapist, one caseworker, one university professor, one educational diagnostician, a representative of the American Council of the Blind of Texas and the Houston Council of the Blind, the president of the Houston Council of the Blind, the president of the National Association of Blind Students, the director of governmental affairs of the National Federation of the Blind, and eight commenters whose role was unidentified requested that the present language in subsection (e) be retained or proposed language be rewritten to require that a minimum of one staff member certified in the education of students with visual impairments be employed by each ESC based on concerns that, without a certified teacher of the visually impaired on staff at the ESCs, services will suffer. Some commenters noted the unique needs of VI students, the specialized nature of the field, and concerns about increased litigation.

Agency Response. The agency agrees and disagrees in part. The agency agrees that services to students with visual impairments and technical assistance/support for professionals that work with students with visual impairments requires a professional with specialized knowledge and skills. However, the agency continues to disagree that each ESC must be required to employ an individual certified in the education of students with visual impairments to deliver such services and support. Therefore, the agency has amended the proposed subsection to address the need for properly certified personnel regardless of the funds used to offer the services, while maintaining the original intent to provide flexibility in the delivery of regional services for students with visual impairments.

Comment. One unidentified commenter requested that subsection (e) include a requirement for ESCs to hire a minimum of one full-time equivalent certified VI specialist.

Agency Response. The agency disagrees with an agency-imposed hiring requirement of a full-time certified VI specialist.

Comment. The executive director for the Texas Commission for the Blind is concerned about the repeal of subsection (e) and recommended adding the following sentence, "A minimum of one staff member certified in the education of students with visual impairments shall be employed by each ESC."

Agency Response. The agency agrees and disagrees in part. The agency agrees that services to students with visual impairments and technical assistance/support for professionals that work with students with visual impairments requires a professional with specialized knowledge and skills. However, the agency continues to disagree that each ESC must be required to employ an individual certified in the education of students with visual impairments to deliver such services and support. Therefore, the agency has amended the proposed subsection to address the need for properly certified personnel regardless of the funds used to offer the services, while maintaining the original intent to provide flexibility in the delivery of regional services for students with visual impairments.

Comment. An ESC special education director supports the removal of the requirement that each ESC employ a VI-certified staff member, noting that no other areas require this and that ESCs should be given the same flexibility with this project as with other projects. The director also states that, since the law does not require it, additional flexibility should be provided in the hiring of personnel with State Supplemental Visually Impaired (SSVI) funds, stating that VI certification should not be necessary unless the person provides direct services to students with visual impairments. The director indicates that the certification requirement does not apply to programs other than VI.

Agency Response. The agency agrees and disagrees in part. The agency believes that services to students with visual impairments and technical assistance/support for professionals that work with students with visual impairments requires a professional with specialized knowledge and skills. Therefore, the agency has amended the proposed subsection to address the need for properly certified personnel regardless of the funds used to offer the services, while maintaining the original intent to provide flexibility in the delivery of regional services for students with visual impairments.

Comment. A special education director agrees with new language in proposed subsection (e), stating that the wording will give flexibility of personnel based on need, yet still clarify that personnel hired with State Supplemental Visually Impaired funds must be certified.

Agency Response. The agency agrees and has added additional clarifying language to subsection (e).

Comment. A director of special education comments that if the requirement for a dedicated ESC position for a certified VI teacher is not retained, this would be contrary to standards required of local school districts since districts are required to hire properly licensed and certified employees. The commenter noted that TEA appears to be setting a double standard.

Agency Response. The agency disagrees. VI professionals who provide direct services to students with visual impairments must be appropriately certified regardless of whether they are employed by an ESC or LEA.

§89.1152. Presentment.

Comment. Twenty-one special education directors, one licensed specialist in school psychology, one assistant superintendent, one education service center special education director, one special populations director, one special education coordinator, and one unidentified commenter supported the proposed change but requested that the agency begin implementation August 2002 rather than delay implementation until August 2003.

Agency Response. Based on a letter of interpretation to the TEA from the Office of Special Education Programs, Department of Education, proposed §89.1152 has been withdrawn.

Comment. The executive directors of the Texas Council of Administrators of Special Education, the Texas Elementary Principals and Supervisors Association, and the Texas Association of Secondary School Principals, the associate executive directors for the Texas Association of School Boards and the Texas Association of School Administrators, two special services directors, eight special education directors, three speech-language pathologists, three educational diagnosticians, one special education coordinator, one parent/advocate, and one education service center special education director commented in support of the proposed rule.

Agency Response. Based on a letter of interpretation to the TEA from the Office of Special Education Programs, Department of Education, proposed §89.1152 has been withdrawn.

Comment. A special education director commented in support of the proposed rule and indicated that possibly more support for schools would be helpful in cases of discipline involving maladaptive behavior.

Agency Response. Based on a letter of interpretation to the TEA from the Office of Special Education Programs, Department of Education, proposed §89.1152 has been withdrawn.

Comment. One educational diagnostician questioned the impact of the proposed change in cases of parent refusal of consent for initial referral and evaluation and the district's need to pursue the issue at a due process hearing.

Agency Response. Based on a letter of interpretation to the TEA from the Office of Special Education Programs, Department of Education, proposed §89.1152 has been withdrawn.

Comment. A representative of Advocacy, Inc., a representative of United Cerebral Palsy of Texas, two parents, and a special education advocate oppose the proposed rule because of expressed concerns regarding additional burdens and/or requirements placed on parents and the interpretation that the rule as written violates the Individuals with Disabilities Education Act, Part B (IDEA-B).

Agency Response. Based on a letter of interpretation to the TEA from the Office of Special Education Programs, Department of Education, proposed §89.1152 has been withdrawn.

Comment. A representative of the Texas Center for Disabilities Studies, three parents, a manager in the private sector, the president of a local organization for persons with pervasive developmental disorders, and the president of the National Alliance for the Mentally Ill-Austin opposed the proposed rule change because of expressed concerns regarding additional burdens placed on parents by the rule. Some commenters also questioned whether the proposed rule was fair to parents, while others indicated that the rule could result in an increase in the number of due process hearings to the detriment of students, families, and districts.

Agency Response. Based on a letter of interpretation to the TEA from the Office of Special Education Programs, Department of Education, proposed §89.1152 has been withdrawn.

Comment. A representative of the Learning Disabilities Association of Texas commented that the proposed rule appears to be discriminatory to parents and that parents may inadvertently omit an issue at the admission, review, and dismissal (ARD) committee meeting but may be reminded by counsel in preparation for a due process hearing.

Agency Response. Based on a letter of interpretation to the TEA from the Office of Special Education Programs, Department of Education, proposed §89.1152 has been withdrawn.

Comment. A parent case manager for the Unity Parents Coalition of Health Services commented that parents should be informed of all service and accommodation options available in the district rather than being limited to information of services available at the student's school.

Agency Response. Based on a letter of interpretation to the TEA from the Office of Special Education Programs, Department of Education, proposed §89.1152 has been withdrawn.

Comment. A parent commented on their school's increased responsiveness to parents, program improvement, and staff training improvements that directly resulted from the school's having lost in a due process hearing.

Agency Response. Based on a letter of interpretation to the TEA from the Office of Special Education Programs, Department of Education, proposed §89.1152 has been withdrawn. The agency supports increased responsiveness to parents, program improvement, and staff training improvements and believes that these improvements can and should come about through continual program evaluation processes as opposed to litigation.

Comment. A principal commented that the rule should state that an issue not discussed at the previous ARD committee meeting should not be raised in a due process hearing unless it occurred after the ARD, and a special education department chairperson commented that there should be a provision for hearing officers to be permitted to include and act on issues related to medical or physical information obtained by the parent after the last ARD that are relevant to the hearing.

Agency Response. Based on a letter of interpretation to the TEA from the Office of Special Education Programs, Department of Education, proposed §89.1152 has been withdrawn.

Comment. A representative of The ARC of Texas, the president of The ARC of Wichita County, and a third individual whose role was unidentified recommended that the rule section be amended to include the manner in which the parent(s) will be educated about this process and the manner in which the parent(s) will be supported through the process. In addition, it was commented that, if written materials will be provided to the parent(s), the literature should be included as an exhibit to the rule.

Agency Response. Based on a letter of interpretation to the TEA from the Office of Special Education Programs, Department of Education, proposed §89.1152 has been withdrawn.

Comment. An associate director of special education commented that the phrase, "and all local district grievance procedure have been exhausted" be added to the rule.

Agency Response. Based on a letter of interpretation to the TEA from the Office of Special Education Programs, Department of Education, proposed §89.1152 has been withdrawn.

The Texas Education Agency (TEA) adopts amendments to §§89.1205, 89.1210, 89.1220, 89.1225, 89.1240, 89.1245, 89.1250, 89.1265 and the repeal of §89.1255, concerning the state plan for educating limited English proficient (LEP) students. The sections establish definitions, requirements, and procedures related to: bilingual education and English as a second language programs; program content and design; language proficiency assessment committees; testing and classification of students; parental authority and responsibility; staffing and staff development; required summer school programs; local plan; and evaluation. Sections 89.1205, 89.1210, 89.1240, 89.1245, 89.1250, and 89.1265 and the repeal of §89.1255 are adopted without changes to the proposed text as published in the January 18, 2002, issue of the Texas Register (27 TexReg 449) and will not be republished. Section 89.1220 and §89.1225 are adopted with changes to the proposed text as published in the January 18, 2002, issue of the Texas Register (27 TexReg 449).

The adopted amendments incorporate new state testing requirements for LEP students in Grades 3-8 enacted by Senate Bill 676, 77th Texas Legislature, 2001. The adopted amendments and repeal also clarify program requirements to facilitate compliance monitoring activities.

The most significant issue included in the adopted amendments relates to assessment provisions in §89.1220 that incorporate references to recently-adopted commissioner's rules concerning the participation of LEP students in state assessments. Language was added to §89.1220 to delineate appropriate assessment options for LEP students and criteria to be considered by language proficiency assessment committees. Another significant change relates to program content and design for English as a second language programs described in §89.1210. Language was modified in §89.1210 to delete obsolete language and to specify current requirements for English as a second language programs, including the requirement that these programs address the affective, linguistic, and cognitive needs of LEP students.

Additional changes include: modifications in §89.1205 that update cross-references; revised language in §89.1225 that reinforces requirements related to identification, enrollment, and exit criteria; new language in §89.1240 that addresses eligibility for inclusion in district bilingual education allotment; modifications in §89.1245 and §89.1250 that update cross-references; repeal of §89.1255 that removes the provision for districts to develop local plans; and modification in §89.1265 that removes reference to local plans.

In response to public comments, the following changes were made to 19 TAC Chapter 89, Subchapter BB, since published as proposed.

Section 89.1220(l) was modified to clarify that students who are not academically successful due to limited English proficiency shall be reclassified as LEP and shall be recommended for participation in bilingual education or English as a second language. Language was also added to clarify that students who are not reclassified as LEP may be placed in compensatory and accelerated instruction or other special language program which addresses their needs.

Several modifications were made to §89.1225. Language was added to subsection (a)(2) to provide clarification regarding identification of a LEP student whose ability is so limited that it renders assessments invalid. Subsection (f)(3) was modified to correctly cross reference subsection (j) of that section. Subsection (g) was modified to include LEP identification of kindergarten students preregistered in the spring. Subsection (h)(1)(A) was modified to include a technical edit defining the acronym for the Texas Education Code. Subsection (i) was modified to remove proposed language regarding the exit of a student from a bilingual education or English as a second language program after Grade 1. Instead, language was added to subsection (i) reinforcing the need for students to meet academic standards by Grade 3 in accordance with the legislatively mandated student success initiative.

The following public comments were received on the amendments to 19 TAC Chapter 89, Subchapter BB, since published as proposed.

Comment. An individual commented on the need to add one more criteria in §89.1220(i) addressing the student's yearly progress for the language proficiency assessment committee to consider in determining an appropriate assessment option.

Agency Response. The agency disagrees because this recommended criteria are already addressed in §89.1220(i)(2). The language was not modified.

Comment. Education service center (ESC) bilingual education representatives commented that the last part of §89.1220(l) needs clarification and recommended the following language: "Those students who are not academically successful due to limited English proficiency shall be reclassified as limited English proficient (LEP), and shall be recommended for participation in bilingual education or English as a second language. Students who are not reclassified as LEP may be placed in compensatory and accelerated instruction, or other special language program which addresses their needs."

Agency Response. The agency agrees and has modified the section accordingly.

Comment. An individual questioned whether the language in §89.1225(a)(2) "or another test approved by TEA" meant that the agency was moving away from standardized tests.

Agency Response. This language does not represent any change from current testing requirements. No modification to rule language is necessary.

Comment. ESC bilingual education representatives requested clarification in §89.1225(a)(2) regarding identification of a LEP student whose ability is so limited that it renders assessments invalid. The representatives suggested adding: "unless the norm-referenced measure is not valid in accordance with (f)(2)(C) of this section."

Agency Response. The agency agrees and has modified the section accordingly.

Comment. An individual commented that the statement "within the established norming period" in §89.1225(e) has been helpful for districts with Testing Centers.

Comment. An individual commented that the cross reference in §89.1225(f)(3) should read (j) instead of (k).

Agency Response. The agency agrees and has modified the section to correct the reference.

Comment. ESC bilingual education representatives recommended the addition of "and kindergarten" and "preregistered" in §89.1225(g) to include LEP identification of kindergarten students preregistered in the spring.

Agency Response. The agency agrees and has modified the section accordingly.

Comment. An individual asked if information provided in §89.1225(h)(1) concerning exit from a program is also applicable for moving students from bilingual to English as a second language (ESL) classes.

Agency Response. Exit criteria in §89.1225(h)(l) apply only to students who are exiting from either a bilingual education or an ESL program and are being reclassified as English proficient. No modification to rule language is necessary.

Comment. An individual asked if students need to show proficiency in the native language prior to transitioning.

Agency Response. Section 89.1225(h) establishes that only students served through bilingual education need to demonstrate proficiency in the primary language and in English. No modification to rule language is necessary.

Comment. ESC bilingual representatives and another individual asked if §89.1225(h)(2) means that parent approval is necessary for program exit. They also inquired whether the student remains classified as limited English proficient if the student's parent disapproves.

Agency Response. Section 89.1240(b) provides that students meeting exit requirements may continue in the bilingual education or English as a second language program with parental approval but are not eligible for inclusion in the district bilingual education allotment. No modification to rule language is necessary.

Comment. An individual requested clarification on whether the proposed language in §89.1225(h) makes it unallowable for students to exit with ITBS scores during the school year. The individual asked for a rationale for this requirement.

Agency Response. The proposed rule is aligned to statutory language regarding assessments at the end of the school year. No modification to rule language is necessary.

Comment. ESC bilingual education representatives requested removal of the language regarding the exit of a student from a bilingual education or ESL program after Grade 1 that had been proposed in §89.1225(i) and the addition of a statement reinforcing the need for students to meet literacy standards by Grade 3 in accordance with the legislatively mandated student success initiative.

Agency Response. The agency agrees and has modified the section accordingly.

Comment. An individual expressed high approval to the entire §89.1245 concerning the development of training materials.

Comment. An individual commented that the requirement in §89.1245(b) regarding the October 1 deadline for an exception of bilingual or ESL certification requirements was too difficult to meet for all language groups and asked if selected languages could be submitted.

Agency Response. The agency disagrees. The October 1 deadline is a well-established, long-standing date that is required in order for the agency to determine compliance for the school year. The language was not modified.

Comment. An individual asked whether the provision in §89.1245(d) regarding continuing education programs could be used instead of or in addition to district staff development and/or college courses.

Agency Response. This is a local district option. No modification to rule language is necessary.

Comment. An individual asked if it is permissible under §89.1250(3)(B) to continue to conduct the summer school program for 6 hours each day for 4 weeks.

Agency Response. The rule allows for flexibility in days and weeks as long as the requirement of 120 hours is met. No modification to rule language is necessary.

Comment. An individual asked if there was any chance that the allotment per unit for summer school will be increased since the allotment severely underfunds the program.

Agency Response. Although requested, the legislature did not authorize an increase in the limited English proficient summer school allotment. No modification to rule language is necessary.

Comment. An ESC bilingual education representative requested that an explanation of "results of training" be added to §89.1265(b).

Agency Response. This is a local district option. The state is not prescriptive in this area. No modification to rule language is necessary.

Subchapter A. OPEN-ENROLLMENT CHARTER SCHOOLS

The Texas Education Agency (TEA) adopts the repeal of §100.1011 and §100.1061; new §§100.1011, 100.1013, 100.1015, 100.1027, 100.1029, 100.1031, 100.1033, 100.1035, 100.1037, 100.1043, 100.1045, 100.1047, 100.1049, 100.1051, 100.1071, 100.1073, 100.1101, 100.1111-100.1116, 100.1131-100.1135, 100.1151, 100.1153, 100.1155, 100.1157, 100.1159, 100.1201, 100.1203, 100.1205, 100.1207, 100.1209, 100.1211, 100.1213, 100.1215, and 100.1217; and amendments to §100.1041 and §100.1063, concerning open- enrollment charter schools. The repeal of §100.1011 and §100.1061; new §§100.1013, 100.1015, 100.1037, 100.1043, 100.1045, 100.1049, 100.1051, 100.1071, 100.1073, 100.1112, 100.1114-100.1116, 100.1133- 100.1135, 100.1155, 100.1159, 100.1201, 100.1205, 100.1209, 100.1211, 100.1215, and 100.1217 and the amendment to §100.1041 are adopted without changes to the proposed text as published in the February 15, 2002, issue of the Texas Register (27 TexReg 1070) and will not be republished. New §§100.1011, 100.1027, 100.1029, 100.1031, 100.1033, 100.1035, 100.1047, 100.1101, 100.1111, 100.1113, 100.1131-100.1132, 100.1151, 100.1153, 100.100.1157, 100.1203, 100.1207, and 100.1213 and the amendment to §100.1063 are adopted with changes to the proposed text as published in the February 15, 2002, issue of the Texas Register (27 TexReg 1070).

Section 100.1011 and §100.1061 specify provisions relating to charter renewals and definitions. The repeal of these sections is adopted in order to incorporate these provisions into other amended and new sections. Section 100.1041 and §100.1063 specify provisions relating to state funding and use of public property by a charter holder. The new sections and the amendments are adopted in order to incorporate revisions and new provisions to conform to changes enacted by House Bill (HB) 6, 77th Texas Legislature, 2001.

HB 6, 77th Texas Legislature, 2001, directed the commissioner of education to adopt rules for a wide range of issues related to open-enrollment charter schools. While much of the adopted amendments and additions to 19 TAC Chapter 100, Charters, Subchapter AA, Commissioner's Rules Concerning Open-Enrollment Charter Schools, result from new statutory requirements, some of the changes are the result of a shift in authority from the State Board of Education (SBOE) to the commissioner of education. Still other portions of the adopted rules come from provisions originally in the charter contract.

19 TAC Chapter 100, Charters, Subchapter AA, Commissioner's Rules Concerning Open-Enrollment Charter Schools, as adopted, is divided into the following divisions.

Division 1, General Provisions, addresses relevant definitions, filing of documents with the Texas Education Agency (TEA), and requirements of charter applicants.

Division 2, Commissioner Action and Intervention, addresses adverse action taken by the commissioner on an open-enrollment charter school; agency audits of open-enrollment charter schools; charter renewal; charter amendment; compliance records on nepotism, conflict of interest, and restrictions on serving as an officer or on the governing body of an open-enrollment charter school; and the notification of appropriate school districts and legislators of charter application.

Division 3, Charter School Funding and Financial Operations, addresses state funding and its uses; disclosure of campaign contributions; and the financial audit of funds used for charter school operations.

Division 4, Property of Open-Enrollment Charter Schools, addresses property acquired with state funds received before September 1, 2001; possessions and control of the public property of a former charter holder; and real property.

Division 5, Charter School Governance, addresses the delegation of powers and duties by the charter holder to any other entity; issues related to nepotism and conflicts of interest among officers or governing body members of a charter school; criminal history of employees, officers, or governing body members of a charter school; and issues related to management companies.

Division 6, Charter School Operations, addresses voluntary participation in state programs; records management; procurement of professional services; student admission; municipal ordinances; and a variety of issues related to students, failure of a charter school to operate, instructional facilities, and changes in the status of entities eligible to hold charters.

In response to public comments, the following changes were made to the rules since published as proposed.

Section 100.1011 was modified in several ways. Paragraph (1) was modified to delete the phrase "officer of a charter school." Paragraph (2) was modified to that the holder of an abandoned open-enrollment charter is a "former charter holder" within the meaning of that section. Paragraph (3) was modified by adding a new subparagraph (A) clarifying that the phrase, "employee of a charter school," as used in this subchapter, means a person paid to work at a charter school under the direction and control of an officer of a charter school, regardless of whether the person is on the payroll of the charter holder, a charter school operated by the charter holder, or a management company providing management services to the charter holder, or any other person. Paragraph (3) was also modified by adding a new subparagraph (B) clarifying that the phrase, "employee of a charter holder," as used in this subchapter, means a charter holder employee who engages in no charter school activity for the charter holder and is not an officer of a charter school. Paragraph (12) was modified to define both misuse and misapplication of funds or property. Paragraph (13) was deleted to remove the separate definition of misapplication of funds or property.

Section 100.1011(14)-(24) was renumbered accordingly. Proposed paragraph (14), adopted as paragraph (13), was modified to exclude both public accountancy services and legal services from the definition of "management services" in subparagraphs (E) and (F). Proposed paragraph (15), adopted as paragraph (14), was modified to exclude regional education service center from the definition of "management company." Proposed paragraph (16), adopted paragraph (15), was modified to clarify that subparagraph (E) covers an oral statement, assurance, commitment, and/or representation made to the SBOE during a public meeting. Proposed paragraph (17), adopted as paragraph (16), was modified to clarify the phrase "employee of a charter school" and that a charter holder employee or independent contractor engaged solely in non-charter activities for the charter holder is not an "officer of a charter school" under these rules. Proposed paragraph (19), adopted as paragraph (18), was modified to change the word "initiating" to "recommending" in both places in subparagraph (D). This paragraph was also modified to exclude services provided by attorneys and certified public accountants from the functional definition of a "central administration officer."

Section 100.1011 was also modified to delete proposed paragraphs (19)(K) and (20)(G).

Section 100.1027 was modified to replace the word "cooperation" in the final sentence of subsections (b) and (c) with "failure to comply with lawful requests, directives, or other agency actions."

Section 100.1029 was modified to replace the word "cooperation" in the final sentence of subsections (b) and (c) with the phrase, "failure to comply with lawful requests, directives, or other agency actions."

Section 100.1031 was modified to provide in subsection (b) that an amendment or renewal of a contract may only be negotiated upon renewal if required by the commissioner under subsection (c). Subsection (b) was also modified to replace the phrase "differs from" with the phrase "conflicts with." Subsection (d) was modified to clarify that the phrase, "made with the consent of the charter holder," modifies only the word "amendments."

Section 100.1033 was modified to require in subsection (c)(1) that the substantive amendment request include a written resolution adopted by the governing body of the charter holder and signed by the members voting in favor. Subsection (c)(4) was modified to specify provisions for amendments granted conditional approval, including the requirement of the written resolution. Subsection (c)(5) was modified to delete the phrase "or change." Subsection (c)(6) was modified to add new subparagraphs (C) and (D) dealing with the commissioner's criteria for approving delegation amendments. In the new subparagraph (D), the functions previously listed in proposed §100.1101(e)(2), (5), and (6) were made delegable to the chief executive officer. The remaining functions listed in proposed §100.1101(e), now reflected in adopted §100.1033(c)(6)(C), will require a specific waiver before a delegation amendment is granted. In addition, the function listed in proposed §100.1101(e)(4) has been clarified in adopted §100.1033(c)(6)(C)(iii) to provide that the final authority of the governing body to direct the disposition and safekeeping of public records does not prevent the governing body from delegating the maintenance of public records subject to the final authority of the governing body to direct their disposition and safekeeping.

Section 100.1035 was modified to delete the phrase "officer and" from subsection (a)(1). Subsection (b)(5) was modified to replace the term "six months" with "one year."

Section 100.1047 was modified to provide in subsection (d) that a charter holder shall comply with TEC, §25.002. This section was also modified by adding subsection (g) defining the phrase "position of influence."

Section 100.1063 was modified to add a subsection (c)(6) providing that nothing in §100.1063 prevents a contractor of the charter holder from using public property owned by the charter holder for the purpose of providing goods or services to the charter school under the contract, if such use of charter school property is an express contract term, factored into the price of the goods or services provided under the contract, and the contract is duly authorized by the governing body of the charter holder under §100.1063(c).

Section 100.1101 was modified to delete subsection (e). The functions previously listed in proposed §100.1101(e)(2), (5), and (6) were made delegable to the chief executive officer and are delineated in adopted §100.1033(c)(6)(D). The remaining functions listed in proposed §100.1101(e), now reflected in adopted §100.1033(c)(6)(C), will require a specific waiver before a delegation amendment is granted. In addition, the function listed in proposed §100.1101(e)(4) has been clarified in adopted §100.1033(c)(6)(C)(iii) to provide that the final authority of the governing body to direct the disposition and safekeeping of public records does not prevent the governing body from delegating the maintenance of public records subject to the final authority of the governing body to direct their disposition and safekeeping.

Section 100.1111 was modified to correct the phrase "comply with subsection (d)" in subsections (b), (c), and (c)(3) to read "comply with subsection (e)." For clarification purposes, the phrase "district/campus" was changed to "district and/or campus" in subsection (d). In addition, a new subsection (g) was added addressing the time frame within which a charter holder must comply with applicable nepotism provisions after ratings are assigned each year.

Section 100.1113 was modified to summarize Government Code, §§573.021-573.025, instead of merely referring to those sections.

Section 100.1131 was modified to delete subsections (b)(2) and (7). This section was also modified to replace the phrase "comply with subsection (e)" in proposed subsections (c) and (d), with "comply with subsection (f)" and also to replace the phrase "Notwithstanding subsection (c)," with the phrase "Notwithstanding subsection (b)." For clarification purposes, the phrase "district/campus" was changed to "district and/or campus" in subsection (e). In addition, §100.1131 was modified by adding a new subsection (h) that substantially conforms to new §100.1111(g), addressing the time frame within which a charter holder must comply with applicable conflict of interest provisions after ratings are assigned each year.

Section 100.1132 was modified to delete the phrase, "who exercises responsibilities beyond those that are advisory in nature," from subsection (a)(1).

Section 100.1151 was modified to replace the phrase, "as an employee, an officer, or a member of the governing body of a charter school, or as a member of the governing body of a charter holder," in subsections (a), (h), and (j), with the phrase, "as a member of the governing body of a charter holder, as a member of the governing body of a charter school, or as an officer or employee of a charter school." Subsection (b) was modified to replace the phrase "twice a year" with the word "annually." Subsection (b)(1) was modified to replace the word "holder" with the word "school" and to add the phrase "or whom the charter holder intends to employ in any capacity relating to its charter school activities." In addition, subsection (j)(2) was modified by adding subparagraph (C), "the person does not perform, and is not charged with performing, any charter school functions."

Section 100.1153 was modified to replace the phrase, "as an employee, an officer, or a member of the governing body of a charter school, or as a member of the governing body of a charter holder," in subsections (a), (d), and (e) (2) with the phrase, "as a member of the governing body of a charter holder, as a member of the governing body of a charter school, or as an officer or employee of a charter school." Subsection (e)(2) was modified by adding subparagraph (C), "the person does not perform, and is not charged with performing, any charter school functions."

Section 100.1157 was modified by reorganizing proposed text into paragraphs (1) and (2). Adopted paragraph (1) reflects provisions from proposed language relating to conditions that must be met for management contracts and indebtedness that may continue past September 1, 2001. Adopted paragraph (2) reflects provisions for charter holder debt to its management company under subsection (e) that may be refinanced after September 1, 2001, if the management company will not be the lender but will merely guarantee or co-sign for the debt; and if the TEA division responsible for legal services finds that each of the conditions listed in new paragraph (2) have been met and that any compliance problems do not prevent the approval of the refinancing.

Section 100.1203 was modified to provide that, for purposes of subsection (a)(3), the records of a charter school mean the records indicated by the Financial Accountability System Resource Guide or the laws and rules summarized therein. Subsection (a)(4) was modified as a technical edit for consistency in referencing.

Section 100.1207 was modified to delete subsection (d).

Section 100.1213 was modified by adding the clause, "Except as otherwise provided in this section," at the beginning of subsection (a).

The following comments were received regarding adoption of the repeals, new sections, and amendments.

General Comments

Comment. The Texas Association of School Boards (TASB) stated that the proposed rules provide much needed financial and academic accountability to the Texas charter school system. Nineteen individuals commented that they supported the proposed rules implementing House Bill 6, and supported more accountability for charter schools.

Agency Response. No response required.

Comment. An individual suggested that all open-enrollment charter schools should be changed to campus charters or home-rule school district charters, and that all open-enrollment charters should not have charters renewed and should cease to exist.

Agency Response. No response required.

Division 1. General Provisions.

Proposed §100.1011. Definitions.

Comment. The Texas Classroom Teachers Association (TCTA) supports the comprehensiveness of the definitions in §100.1011. These are necessary in order to avoid any confusion or misunderstanding about what terms, such as "misuse of funds or property" mean. TCTA especially supports the definitions for various employment positions held in charter schools as there has been some confusion in the past about where responsibility and liability lie.

Agency Response. No response required.

Comment. TASB stated that many of the definitions in proposed §100.1011 are new and will certainly help provide much needed guidance on terms for charter holders. For instance, TASB appreciates the Texas Education Agency (TEA) defining "state funds" and "misuse of funds or property," as $4.5 million in public funds have been lost to charter school closures and has yet to be recovered by the state.

Agency Response. No response required.

Comment. The Association of Charter Educators (ACE) asked how long a charter holder must have ceased to operate to be considered a "former charter holder" in §100.1011(2).

Agency Response. Under §100.1011(2), a charter holder becomes a former charter holder on the date its open-enrollment charter is revoked, surrendered, or denied renewal, or the date on which all programs are ordered closed under Texas Education Code (TEC), §39.131(a)(10). To determine this date in a particular case, the charter holder must refer to the effective date of the final order of revocation, denial, or program closure, or to the effective date specified in an exchange of correspondence concerning the surrender of the open-enrollment charter.

Comment. TASB recommends amending the definition of "charter school" in §100.1011(3) or adding a separate definition to clarify that an "employee of a charter school" includes teachers, aides, and anyone else who provides instructional services to students, regardless of what legal entity technically employs them. TASB's concern is the possibility of circumventing proposed new §100.1151(a) (relating to Criminal History; Restrictions on Serving). TASB commented that charter schools are not required to hire certified teachers, but must still protect school children from felons, sex offenders, and drug dealers in their classrooms. Section 100.1151(a) states a person may not serve as an employee of a charter school if they have certain criminal convictions. However, the term "employee" normally has a very specific meaning, and §100.1011(3) fails to fully define a charter school employee. Conceivably, a charter school may incorporate separately from the charter holder, or the management company may be the employer of these personnel, and thereby evade the requirements of §100.1151(a). TCTA also recommends that §100.1151(a) extend the definition of employees, officers, members of the governing body of a charter school, and members of the governing body of a charter holder who have been convicted of a certain crime to include all employees who provide services at a school, whether compensated by the charter school, charter holder, or a managing company.

Agency Response. The agency agrees with the comment and has amended the section. Proposed §100.1011(3) has been modified to add a new subparagraph (A) clarifying that the phrase, "employee of a charter school" as used in this subchapter, means a person paid to work at a charter school under the direction and control of an officer of a charter school, regardless of whether the person is on the payroll of the charter holder, a charter school operated by the charter holder, a management company providing management services to the charter holder, or any other person.

An open-enrollment charter school is defined by statute as a public school that is operated by a charter holder under an open-enrollment charter granted to an "eligible entity." The public school operated by the charter holder is not a legal entity, such that it can enter into contracts, sue and be sued, or act as an employer. Rather, under TEC, §12.101, the public school must be operated by one of four "eligible entities": (1) an institution of higher education as defined under TEC, §61.003; (2) a private or independent institution of higher education as defined under TEC, §61.003; (3) an organization that is exempt from taxation under 26 United States Code (USC) §501(c)(3); or (4) a governmental entity. This eligible entity- the holder of the open-enrollment charter- is the only legal entity that can enter into contracts, sue and be sued, or act as an employer on behalf of the charter school.

Since 1995, TEC, §12.1057 (Membership in Teacher Retirement System of Texas), has provided that an "employee of a charter school" 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; and has provided that the charter school is "responsible for making any contribution that otherwise would be the legal responsibility of the school district…." Since 1995, this language has created a legal responsibility running, not to the "charter school" (which can have no legal liabilities), but to the charter holder receiving public funds to operate the school.

House Bill 6 presents a similar issue. TEC, §12.120 (Restrictions on Serving as Member of Governing Body of Charter Holder or Open-Enrollment Charter School or as Officer or Employee), provides that a person may not serve as an employee of a charter school if the person has a relevant criminal conviction or a substantial interest in a management company. Clearly, since the public school operated by a charter holder can have no employees, a charter school "employee" must either be an employee of the charter holder or of another entity altogether. In some cases, a charter holder has seen fit to set up subsidiary corporations for the specific purpose of operating the charter holder's charter school. In this case, the subsidiary corporation acts as the employer for the charter school employees. In other cases, a charter holder has contracted for educational services from a third party. Prior to House Bill 6, this was done by analogy to TEC, §11.157 (Contracts for Educational Services), which provides that the board of trustees of a school district may contract with a public or private entity for that entity to provide educational services for the district. After House Bill 6, this is the subject of specific statutory requirements.

The policy of TEC, §12.120, is clearly that a person convicted of certain criminal offenses may not serve as an "employee of a charter school." Yet if a charter holder has contracted for educational or management services from a third party, the offender may not be an employee of the charter school, but of its contractor. This presents three choices. First, it is conceivable that the policy of TEC, §12.120, simply must yield. Under this choice, the students enrolled in the charter school, and the finances of the charter holder, must be exposed to the offender notwithstanding the enactment of TEC, §12.120, so long as the offender is transferred from the payroll of the charter holder to the payroll of its contractor. The agency rejects this choice, because it attributes to the Legislature an irrational policy. There is no meaningful distinction between an offender placed in the classroom or the business office by a charter holder and an offender placed there by the charter holder's contractor. Second, the commissioner's rules might provide that charter holders simply cannot contract for educational or business services from third parties. This choice must also be rejected, since after House Bill 6 charter holder contracts with management companies is the subject of detailed statutory authorization. Finally, the commissioner's rules might clarify that the phrase, "employee of a charter school," includes anyone paid to work at a charter school operated by a charter holder, regardless of whether the person is on the payroll of the charter holder, its charter school, its management company, or any other person. This is the agency's preferred choice.

Comment. ACE questioned the inclusion of "contract rights" in the definition of "personal property" in §100.1011(6)(C).

Agency Response. The agency disagrees with the comment. A contract right can be construed as a type of property for many purposes. A contract right that is purchased or otherwise acquired with state funds is a right that must be exercised by the charter holder in the public interest. Including such rights within the definition of "personal property" is appropriate, since a contract right is personal property as distinguished from real property.

Comment. ACE and Harris County Juvenile Justice Charter School (HCJJCS) questioned whether including all federal funds within the definition of state funds in §100.1011(8) created a state interest where there would otherwise be no federal interest.

Agency Response. The agency disagrees with the comment. Section 100.1011(8) expressly provides that "[t]he rules in this division shall apply to property acquired, improved, or maintained with federal funds to the extent that such application is consistent with applicable federal law or regulations." Further, proposed §100.1063(a) (relating to Use of Public Property by a Charter Holder) includes a similar qualification: "Where the property is acquired with federal funds, federal law may preempt this section in whole or part." Generally, federal regulations governing federal grant funds administered by the Texas Education Agency require that the agency hold school districts and charters to the same financial accountability standards as the agency requires with respect to state funds administered by the agency. See, for example, 34 Code of Federal Regulations (CFF) §80.20. However, where a federal standard conflicts with a state standard- be the federal standard stricter or more lenient- then the federal standard controls over this rule.

Comment. ACE and HCJJCS expressed concern that §100.1011(8) and other provisions of Division 1 govern privately owned property that is merely "maintained" with state or federal funds.

Agency Response. The agency disagrees with the comment. Section 100.1011, paragraphs (8) and (11), and similar provisions concerning property "acquired" using state funds, apply with equal force to property that is either "improved" or "maintained" using state funds. This is done to permit a charter holder to use state funds to improve and/or maintain its private property with state funds, so long as the private property is used for charter school purposes in compliance with these rules.

Section 100.1011, paragraphs (8) and (11), and similar provisions are intended to subject private property that is maintained with state funds to the accounting and use restrictions imposed by §100.1063 (relating to Use of Public Property by a Charter Holder). However, they are not intended to imply that §100.1067 (relating to Possession and Control of the Public Property of a Former Charter Holder) will subject private property that is merely maintained with state funds to recovery by the state. Rather, the state may recover formerly private property only if (and to the extent that) the value of the property has been enhanced by "additions" or "betterments" to such property.

The pending rules propose no amendment to §100.1067, and therefore no clarification or other change to that section may be made in response to this comment. However, the subject is treated in Section 1.2.4.4, "Accounting for Maintenance, Additions and Betterments," in the December 2001 version 8.1 of the Financial Accountability System Resource Guide (Resource Guide). Section 1.2.4.4 is referenced in Section 1.2.4, "Fixed Assets," of the charter school supplement to the Resource Guide.

The Resource Guide governs the way a certified public accountant must record private property that has been maintained with state funds on the property exhibit to a charter holder's audited financial statement. Under §100.1067, the property exhibit determines whether, and to what extent, such property is subject to recovery by the state.

Generally, public funds simply may not be used to maintain private property. Proposed §100.1063(f) provides a mechanism for tracking the state's contribution to the cost of maintaining private property that is used by a charter holder for public purposes. However, nothing requires a charter holder to use state funds to maintain its private property. By using private funds to maintain its private property, a charter holder can avoid having to account for using state funds for this purpose. However, a charter holder that elects to use its private property for charter school purposes, and elects to maintain such property with state funds, must comply with the accounting and use restrictions imposed by §100.1063.

Comment. ACE asked for clarification of the term "indirectly" in reference to the definition of property acquired, improved, or maintained using state funds in §100.1011(11). HCJJCS asked for deletion or specific definition of the term "indirectly" in §100.1011(11).

Agency Response. The agency disagrees with the comments. The phrase "directly or indirectly" is to be contrasted with the word "directly" standing alone. The proposed rule covers any combination of transactions through which a charter holder uses state funds to gain title to, control over, use of, or benefit from property. The variety of financial transactions through which a charter holder might use state funds to gain such title, control, use, or benefit cannot be enumerated exhaustively, and any attempt to do so would unduly limit the scope of the rule.

Comment. ACE and HCJJCS suggested that the definition in §100.1011(11) should be clarified with the addition of a sentence to the effect that "property acquired or improved using state funds does not include any portion of that property acquired or improved with non-public funds." In other words, the definition should clarify that the mixing of public and private funds in the acquisition or improvement of property does not render the character of that property wholly public. Rather, such property is only "public" to the extent that public funds were used in the acquisition or improvement of the property.

Agency Response. The agency disagrees with the comment. Section 100.1063(e) expressly provides that "property acquired, improved, or maintained partly using state funds and partly using other funds is mixed public and private property, and is subject to all requirements of [§100.1063]." Section 100.1063(f)(3) provides that "[a]ll property held, acquired, improved, or maintained by the charter holder is subject to this subsection [requiring a property exhibit to the audited financial statement] regardless whether it is public or private property." The property exhibit required by §100.1063(f) is described in the charter school supplement to the Financial Accountability System Resource Guide, as revised in December 2001. The Resource Guide governs the way a certified public accountant must record property acquired, improved, or maintained partly using state funds and partly using other funds on the property exhibit. Under §100.1067, the property exhibit determines whether, and to what extent, such property is subject to recovery by the state. The pending rules propose no amendment to §100.1067 or to the Resource Guide, and therefore no clarification or other change to §100.1067 or to the Resource Guide may be made in response to this comment. Adding the suggested sentence to §100.1011(11) would not clarify the rules, but would create ambiguity.

Comment. ACE questioned including property acquired, improved, or maintained by a management company using state funds within the definition in §100.1011(11).

Agency Response. The agency disagrees with the comment. The proposed rule generally does not cover property owned by a management company, even if it is acquired, improved, or maintained by the management company using the proceeds of a contract for management services. The rule only applies to property that is "acquired, improved, or maintained through a management company under a contract for management services." If, in addition to purchasing management services from a management company, a charter holder also acquires personal or real property from the management company (or improves or maintains the property through the management company) then the property so acquired, improved, or maintained should be governed by these rules.

Comment. ACE suggested that the rules should clearly state that the state's interest in property, if any, is subject to standard depreciation schedules and/or whether there is a minimum number of years after which the state's interest in a property dissolves.

Agency Response. The agency disagrees with the comment. This subject is treated in Section 10.3.3.4, "Depreciation Expense," in the December 2001 version 8.1 of the Financial Accountability System Resource Guide. Section 10.3.3.4 governs the depreciation of property subject to §100.1063(f) of the proposed rules. There is no minimum number of years after which the state's interest in property dissolves.

The property exhibit required by §100.1063(f) is described in the charter school supplement to the Financial Accountability System Resource Guide, as revised in December 2001. Under Section 1.2.4 of the supplement, generally accepted accounting rules for the depreciation of an asset do apply to property acquired with state funds. As a result, the value of the state's interest that must be compensated under §100.1067 (relating to Possession and Control of the Public Property of a Former Charter Holder) diminishes in proportion to the depreciated value of the underlying asset. These provisions govern the way a certified public accountant must record the effects of depreciation on an asset acquired, improved, or maintained with state funds on the audited financial statement submitted by a charter holder.

The available methods for depreciating an asset are covered by generally accepted accounting principles, which are not the subject of these rules. Section 10.3.3.4 of the Resource Guide provides that any acceptable method determining depreciation may be used.

The Resource Guide governs the way a certified public accountant must record the effects of depreciation on an asset acquired, improved, or maintained with state funds.

Comment. ACE asked about the status of real estate acquired between September 1, 2001, and the effective date of the rules.

Agency Response. The rules governing the status of real estate were adopted effective November 6, 2001 (26 TexReg 8828). These rules require an exhibit to the audited financial statement of every charter holder that had any financial operations during fiscal year 2001-2002. The exhibit must include all property owned by the charter holder during that year. The rules do not distinguish between property acquired before and after November 6, 2001.

If a charter holder becomes a former charter holder in the middle of any fiscal year, the proposed rule requires the charter holder (or the commissioner at the charter holder's expense) to obtain services from a certified public accountant to prepare the property exhibit required by §100.1063(f). A charter holder that ceased operations between September 1 and November 6, 2001, is subject to this requirement.

Comment. An individual suggested that the word "agreement" in §100.1011(12)(B) be defined and examples listed. The individual asked, "How broad a definition does this encompass?"

Agency Response. The agency disagrees with the comment. The definition proposed at §100.1011(12) for the phrase, "misuse of funds or property," is taken from Penal Code, §39.01(2), which provides, at subsection (A), that "misuse" means "an agreement under which the public servant holds the property…."

Penal Code, §32.45, (Misapplication of Fiduciary Property or Property of Financial Institution) provides a similar definition for the term "misapply." The Texas Ethics Commission has developed a body of administrative decisions interpreting and applying Penal Code, §39.01(2), to the use or misuse of public property by public officials. These decisions are binding on school districts, and should inform the commissioner's application of TEC, §12.107 and §12.128, to charter holders. The Penal Code definition of "misuse" has been discussed in at least two recent opinions issued by the Commission. See Ethics Advisory Opinion No. 134 (1993); Ethics Advisory Opinion No. 1984-9 (1984).

Comment. ACE and HCJJCS stated that the terms "improper," "wrongful," and "corrupt" are subjective and vague in the definition of misapplication of funds or property at §100.1011(13).

Agency Response. The agency agrees with the comment and has modified the section. "Misapplication" has been construed by the Texas Court of Criminal Appeals to mean "an improper, illegal, wrongful or corrupt use or application" of funds or property. Ferguson v. State, 80 Tex. Crim. 383, 189 S.W. 271 (1916). In 1984, this case was followed by the Texas Ethics Commission in holding that incidental use of state telephones by state employees to make local personal calls is not a "misapplication" of public property as contemplated by an older version of Penal Code, §39.01. See Ethics Advisory Opinion No. 1984-9. The Ethics Commission held that such use of state telephones was not a "misapplication" as contemplated by this version of §39.01, provided it did not result in additional costs or damage to the state and generally would not hinder the day-to-day operation of government. This decision was followed by the Ethics Commission in Ethics Advisory Opinion No. 134 (1993).

By adopting the definitions cited and followed by the Ethics Commission in reaching this decision, the proposed rule sought to insure that the decisions of the Ethics Commission interpreting the Penal Code will provide useful guidance to charter holders in this area. However, it appears that the definition proposed for "misuse of funds or property," at §100.1011(12), would serve to define "misapplication of funds or property" as well. That definition was taken from the current Penal Code, §39.01(2). Penal Code, §32.45 (Misapplication of Fiduciary Property or Property of Financial Institution), provides a similar definition for "misapply." In light of these later statutory changes, it does not appear that separate definitions for "misuse" and "misapplication" are justified.

The proposed rule has been modified to delete the separate definition of misapplication of funds or property at §100.1011(13). Instead, the definition proposed for misuse of funds or property at §100.1011(12) has been modified to cover both misuse and misapplication of funds or property.

Comment. ATPE requested that the definition of "management services" in proposed §100.1011(14)(E) and (F) be modified to include legal services. An attorney could perform the same services as a management company- or even be an employee of a management company- and thereby skirt the intent of TEC, §12.1012(5). In the alternative, proposed §100.1011(14)(E) and (F) should be clarified to provide that attorneys working for a management company, or under contract with a management company, may not provide legal services to a charter school unless it is part of an approved management contract with that charter.

Agency Response. The agency disagrees with the comment. Under §100.1011(14) as proposed, an attorney cannot perform any "management services" other than those described in §100.1011(14)(E) and (F) without falling within the definition of a "management company." As a regular part of the practice of law, the practitioner may be called upon to give legal advice to the client concerning policies, procedures, or practices presenting legal vulnerabilities. The agency does not interpret TEC, §12.1012(5)(E), to mean that such legal advice is included within the definition of "management services." However, an attorney engaged in any other function listed in §100.1011(14) would be a "management company" under that subsection.

An attorney retained or employed by a "management company" to provide legal services to a charter holder need not be included in the coverage of §100.1011(14)(E) and (F). If an entity provides any "management services" to a charter holder, it will be covered by §100.1011(14) as proposed; and if an entity (other than a law firm) employs or retains an attorney to provide the services described in §100.1011(14)(E) and (F), that entity will also be covered.

Comment. ACE and HCJJCS suggested that professional services subject to regulation by another state or federal agency- such as certified public accountancy services- be excluded from the definition of management services at §100.1011(14)(E) and (F).

Agency Response. The agency agrees, in part, with the comment and has modified the section. The proposed rule has been modified to exclude both public accountancy services and legal services from the definition of "management services" in proposed §100.1011(14)(E) and (F), adopted as §100.1011(13)(E) and (F). The practice of certified public accountancy is similar to the practice of law in that, as a regular part of providing public accountancy services, the practitioner may be called upon to give advice to the client concerning policies, procedures, or practices to address weaknesses in financial management and related areas. The agency does not interpret TEC, §12.1012(5)(E), to mean that such public accountancy services are included within the definition of "management services."

Comment. ACE and HCJJCS suggested that services provided by education service centers be excluded from the definition of management services at §100.1011(14)(E) and (F).

Agency Response. The agency agrees, in part, with the comment. The proposed rule has been modified to exclude regional education service center from the definition of "management company" in proposed §100.1011(15), adopted as §100.1011(14). The agency does not interpret TEC, §12.1012(4), to mean that a regional education service center providing services to charter schools pursuant to its mission under TEC, Chapter 8, Subchapter B, is included within the definition of a "management company." At the same time that it added TEC, §12.1012(4), the 77th Legislature amended TEC, §12.104, to provide that a charter school is entitled to the same level of services provided to school districts by regional education service centers.

Comment. An individual asked if a "franchise structure" meets the definition of management services in reference to TEC, §12.1012(4).

Agency Response. The agency disagrees with the comment. The agency interprets TEC, §12.1012(4), to mean that any type of business entity that provides management services to a charter school is generally included within the definition of "management company." A franchise structure is not a separate legal entity, but simply a contractual arrangement among two or more legal entities.

Comment. ATPE suggested that the exceptions in the definition of "management company" in §100.1011(15)(B) should be removed, as this is a loophole around the management company regulations that could allow anyone to donate services to a charter school by offering them to the non-profit organization controlling that charter.

Agency Response. The agency disagrees with the comment. Under §100.1011(15)(B) as proposed, only a narrow class of persons may donate "management services" to a charter holder without falling into the definition of a "management company." The person must be a non-profit corporation, must be exempt from taxation under 28 USC §501(c)(3), and must be the parent corporation of the charter holder receiving the donated services. In essence, the provision covers only a situation in which a parent 501(c)(3) corporation exists, but its subsidiary 501(c)(3) corporation is technically the charter holder.

Comment. ACE and HCJJCS suggested that the exceptions in the definition of "management company" in §100.1011(15) should be expanded to include shared services arrangements among charter schools, cooperative arrangements among charter schools, and non-profit associations and resource centers that provide technical assistance to charter schools.

Agency Response. The agency disagrees with the comment. The agency interprets TEC, §12.1012(4), to mean that a tax-exempt entity providing management services to a charter school is generally included within the definition of "management company." Shared services arrangements and cooperatives among charter schools are not separate legal entities, but simply contractual arrangements among two or more charter holders.

Comment. ACE and HCJJCS asked for clarification whether the term "assurances" in §100.1011(16)(E) includes oral representations, and under what circumstances oral statements are included.

Agency Response. The agency agrees, in part, with the comment and has modified the section to clarify that proposed §100.1011(16)(E), adopted as §100.1011(15)(E), includes an oral statement, assurance, commitment, and/or representation made to the State Board of Education during a public meeting. Section 100.1011(16)(E) as proposed covers statements, assurances, commitments, and/or representations made by the charter holder "in its application for charter, attachments, or related documents." It is ambiguous because oral statements, assurances, commitments, and representations made to the State Board of Education during public meetings of that body are routinely documented, and may relate to the charter holder's application for charter. Such oral statements, assurances, commitments, and/or representations can induce- indeed are offered to induce- the board to act favorably on the pending application. Accordingly, the charter holder should be held accountable for its statements, assurances, commitments, and representations made to the board.

Comment. ACE and HCJJCS suggested that volunteers should not be included within the definition of "officer of a charter school" at §100.1011(17)(B).

Agency Response. The agency disagrees with the comment. The purpose of TEC, §12.1012(6), is to identify those individuals who are operating a publicly funded charter school. Accordingly, the definition of an "officer," as articulated in §100.1011(18)-(21), is a purely functional one. If a person performs the functions described in the rule, that person is an officer. Distinctions such as employee/contractor or paid/unpaid worker are irrelevant to the fundamental question addressed by the rule.

Comment. An individual commented that the duties and title descriptions used in defining "officer of a charter school" in proposed §100.1011(17) should be standard. The terminology should be consistent with the terminology in use at independent school districts, i.e., superintendent, principal, vice-principal, etc. The individual cites the duties of the chief operating officer of a charter school as an example of the sort of confusion caused by non-standard usage of these terms.

Agency Response. The agency disagrees with the comment. The titles, functions, powers, and duties of the officers of an independent school district are all clearly defined by statute. See, for example, TEC, §11.201 and 11.202. By contrast, the organizational structure of a charter school is not defined by law, and varies widely from one charter holder organization to the next. Since 1995, there has been no standard terminology used by charter holders to describe their principal operating officers. Using similar terms to describe positions that are not similar would create confusion and ambiguity.

Comment. ACE and HCJJCS suggested that the exceptions listed in §100.1011(14)(E) and (F), to include attorneys, accountants, auditors, and regional education service center representatives, should also be exceptions to the definition of an officer under §100.1011(17)(B). In addition, ACE questioned including legal services provided by a licensed attorney within the definition of officer at §100.1011(19)(C), (G) and (H).

Agency Response. The agency agrees, in part, with the comment. Section 100.1011(19)(G) and (H), as proposed, describe substantially the same functions as §100.1011(14)(E) and (F), and should receive similar treatment under the rules. The proposed rule was modified to exclude services provided by attorneys and certified public accountants from the functional definition of a "central administration officer" in proposed §100.1011(19)(G) and (H), adopted as §100.1011(18)(G) and (H), to the same extent as they are excluded from the definition of "management services" in adopted §100.1011(13)(E) and (F).

Comment. ACE and HCJJCS suggested removing the word "including" and substituting "where general duties include" in §100.1011(19) and (20).

Agency Response. The agency disagrees with the comment. In response to another comment, the agency has modified proposed §100.1011(19) and (20), adopted as §100.1011(18) and (20), to eliminate paragraphs proposed (19)(K) and (20)(G). The suggested change, in combination with the change already made, would introduce an ambiguity in the rules.

Comment. ACE suggested that the phrase "initiating the termination, non-renewal, or suspension of an employee" in §100.1011(19)(D) should be replaced with "terminating, non-renewing, or suspending an employee." The term "initiating" is vague and ambiguous.

Agency Response. The agency agrees, in part, with the comment. The word "initiating" has been deleted in proposed §100.1011(19)(D), adopted as §100.1011(18)(D).

Comment. ACE and HCJJCS stated that the word, "assisting" in §100.1011(19)(K) and (20)(G) is vague and ambiguous. The term could include anyone who provides any assistance of any type. Paragraphs (19)(K) and (20)(G) should be eliminated entirely. An individual suggested that §100.1011(19) and (20) need clarification on the definition of administration officer and a campus administrative officer to exclude the perceived inclusion of clerical staff, volunteers, etc.

Agency Response. The agency agrees with the comment. The functions listed in proposed §100.1011(19) and (20) are prefaced by the phrase, "including one or more of the following functions." As proposed, the subsections already include persons who are charged with assisting, or who assist, another in performing the functions listed, such that an assistant director, assistant CEO, or assistant principal, etc., is already included in the definitions for director, CEO, or principal, etc. Consequently, proposed §100.1011(19) and (20), adopted as §100.1011(18) and (20), has been modified to eliminate paragraphs (19)(K) and (20)(G).

Comment. An individual suggested that the definition of material charter violation in §100.1011(23) be changed to read, "An action or failure to act by a charter holder that is deemed contrary by TEA to the terms of its open-enrollment charter…."

Agency Response. The agency disagrees with the comment. Section 100.1011(23), as proposed, states that the defined term does not "establish that any breach of a duty occurred in a given case or what sanction is appropriate under the facts of that case." The suggested change would introduce an ambiguity in the rules.

Comment. An individual suggested that the definition of management company breach in §100.1011(24) be changed to read, "An action or failure to act by a management company that is deemed contrary by TEA to a duty owed under a management contract…."

Agency Response. The agency disagrees with the comment. Proposed §100.1011(24), adopted as §100.1011(23), states that the defined term does not "establish that any breach of a duty occurred in a given case or what sanction is appropriate under the facts of that case." The suggested change would introduce an ambiguity in the rules.

Proposed §100.1013. Filing of Documents.

Comment. ATPE recommended providing the same five-day timeframe for charter schools to file documents requiring an original signature by facsimile. The rule provides five days for other documents to be received by TEA, and a document requiring an original signature should be subject to the same deadlines as other documents.

Agency Response. The agency disagrees with the comment. Section 100.1013(2) pertains to filing documents by U.S. mail.

Section 100.1013(2) requires the document to be mailed by the filing deadline; yet even if the document is mailed on time, it is not deemed timely filed unless the postal service actually delivers the mail in time for it to be stamped received on the fifth business day. Section 100.1013(3)(B) pertains to filing documents by facsimile, and provides for filing original signatures via facsimile.

Section 100.1013(3)(B) requires the document to be actually received by facsimile on the filing deadline. By comparison, under §100.1013(2) for documents sent by certified US mail, the receiving division might receive no version of the document until the fifth business day following its deadline. Under §100.1013(3)(B), the receiving division must receive a facsimile of the document on the deadline day. Only the original of the document might be delayed until the tenth business day following the deadline.

Comment. ACE and HCJJCS suggested that procedures and documentation required as evidence of facsimile transmissions of documents should be defined in rule. ACE and HCJJCS commented that the word "completed" in §100.1013(3)(A) is vague and ambiguous. Does this mean completed as of the time and date affixed to the facsimile machine of the receiving division, or the facsimile machine of the sending party?

Agency Response. The agency disagrees with the comment. Proposed §100.1013(3)(A) is taken from existing 19 TAC §157.1050 (relating to Filing of Documents), which has enabled attorneys with cases pending before the commissioner of education to timely file deadline-critical pleadings, motions, and briefs since at least April 7, 1993. See 18 TexReg 1928. The longstanding construction of "completed" in the context of a filing rule such as the proposed §100.1013(3)(A) is that the facsimile transmission is completed on the date and time it is actually received by the apparatus maintained by the receiving division. The chief evidence that the document was actually received is that the document exists at the receiving division. (The apparatus maintained by the sending party may print a report that purports to confirm that no errors were detected in the electronic communications for the session, but this confirmation report is not a substitute for telephonic confirmation from the receiving division that all pages were received in legible form.) Normally, the time stamp placed on the document by the apparatus maintained by the receiving division is prima facie evidence of the date and time it was received, but if good cause exists to doubt the veracity of this evidence, in rare circumstances other evidence might have to be considered. These are matters within the discretion of the receiving division, and should not be addressed by rule.

It is important to note that proposed §100.1013 does not govern applications for discretionary funding or grants, nor does it govern applications for a new open-enrollment charter. The section specifically provides: "Grant applications and other documents filed with the TEA under provisions other than this subchapter are governed by the filing rules specific to those documents." The TEA Contracts and Grants Division requires all grant applications to be physically received in its offices and officially stamped by 5:00 p.m. on the due date for the application. Similarly, the State Board of Education does not reference proposed §100.1013 as its rule for determining the timely receipt by the Division of Charter Schools of an application for a new open-enrollment charter. The board adopts the procedures for timely and sufficient filing of an application for a new open-enrollment charter each time it adopts a new application.

Comment. ACE and HCJJCS suggested that the appropriate facsimile numbers for receiving divisions be posted on the TEA website.

Agency Response. No response required.

Division 2. Commissioner Action and Intervention.

Proposed §100.1027. Accreditation Sanctions.

Comment. ACE and HCJJCS suggested that the term "cooperation" in §100.1027(b) and (c) is vague and ambiguous, and that wording similar to "failure to comply with lawful requests issued under regulatory functions" or "obstruction of regulatory functions" be substituted.

Agency Response. The agency agrees, in part, with the comment. Section 100.1027(b) and (c) has been modified to replace the word "cooperation" in the final sentence with "failure to comply with lawful requests, directives, or other agency actions under TEC, §39.131."

Proposed §100.1029. Agency Audits, Monitoring, and Investigations.

Comment. ACE and HCJJCS suggested that the term "cooperation" in §100.1029(b) and (c) is vague and ambiguous, and that wording similar to "failure to comply with lawful requests issued under regulatory functions within a reasonable period of time" or "obstruction of regulatory functions" be substituted.

Agency Response. The agency agrees, in part, with the comment. Section 100.1029(b) and (c) has been modified to replace the word "cooperation" in the final sentence with "failure to comply with lawful requests, directives, or other agency actions."

Proposed §100.1031. Renewal.

Comment. TCTA expressed appreciation that proposed §100.1031(b) speaks to the fact that renegotiation of contracts is not permissible upon renewal of a contract and that all contracts are subject to and incorporate the most current version of existing rules and regulations.

Agency Response. No response required.

Comment. TCTA stated that the second sentence of §100.1031(b) is unclear, and recommended that the language state that renegotiation of contracts is not permissible upon renewal of a contract and that all contracts are subject to and incorporate the most current version of existing rules and regulations.

Agency Response. The agency agrees, in part, with the comment. Section 100.1031(b) has been modified to provide that an amendment or renewal of a contract may only be negotiated upon renewal if required by the commissioner under §100.1031(c).

Comment. ACE and HCJJCS recommended that in §100.1031(b), the following introductory clause should be added to the first sentence: "Except as provided in law or in these rules."

Agency Response. The agency disagrees with the comment. There is no exception to the rule stated in the first sentence of §100.1031(b). Consequently, the suggested change would introduce an ambiguity in the rules.

Comment. ACE and HCJJCS recommended that in §100.1031(b), the phrase "conflicts with" should be substituted for "differs from" in the first sentence.

Agency Response. The agency agrees with the comment. Section 100.1031(b) has been modified to replace the phrase "differs from" with the phrase "conflicts with."

Comment. ACE and HCJJCS recommended that the following sentence should be added at the end of §100.1031(b): "Nothing in this section affects contracts entered into prior to September 1, 2001 or contractual provisions authorized by statute." ACE and HCJJCS commented that the renewal contracts of first-generation charter schools should not be impaired retroactively.

Agency Response. The agency disagrees with the comment. The suggested change is contrary to TEC, §12.1071 (Effect of Accepting State Funding). That section states that a charter holder who accepts state funds under TEC, §12.106, after the effective date of a provision of House Bill 6 "agrees to be subject to that provision, regardless of the date on which the charter holder's charter was granted." There is no right to state funds appropriated by the 77th Texas Legislature, 2001, under laws passed by a prior Legislature. Proposed §100.1031(b) would give effect to the language in House Bill 6; the suggested change would negate it.

Comment. ATPE recommended removing from §100.1031(c) the discretionary power of the commissioner to amend a charter to correct ambiguities at renewal time. Instead, a charter holder should make necessary changes prior to obtaining a renewal. Since a material violation of the charter is the basis for most adverse action on the part of the commissioner, it will be difficult to prove if all changes are not recorded in the charter.

Agency Response. The agency disagrees with the comment. Section 100.1031(c) provides: "Notwithstanding subsection (b), the commissioner may require, as a condition of renewal, that the charter holder amend a contract under TEC, §12.112, to correct any ambiguities, defects or other infirmities." This subsection does not permit changes to the open-enrollment charter or to the contract for charter that might go unrecorded. Rather, the purpose of subsection (c) is to authorize the commissioner to insist upon changes to the contract that might interfere with interpreting, and hence enforcing, its terms.

Comment. ATPE requested that §100.1031(d) provide for notification of renewal of an open-enrollment charter in the manner required for notification of an application for a new open-enrollment charter under TEC, 12.1101. It was suggested that notification be sent to parents or guardians of students enrolled in the charter school and to affected school districts.

Agency Response. The agency disagrees with the comment. TEC, §12.1161 (Effect of Revocation, Denial of Renewal, or Surrender of Charter), provides in subsection (b) that a charter school may continue to operate for the remainder of any school year during which the commissioner denies renewal of its open-enrollment charter." Accordingly, school districts, parents, and guardians will have adequate time to plan for the impact of a decision denying the renewal of the open-enrollment charter. In addition, the rules adopted pursuant to TEC, §12.116 (Procedure for Modification, Placement on Probation, Revocation, or Denial of Renewal), provide that a charter school must post, in the manner required for open meeting notices, the commissioner's notice of intent to deny an application for renewal of its open-enrollment charter. Accordingly, school districts, parents, and guardians will have adequate notice of a potential decision denying the renewal of the open-enrollment charter. Finally, the suggested change is not contemplated by TEC, §12.1101 (Notification of Charter Application).

Comment. ACE and HCJJCS stated that the object of the prepositional phrase, "with the consent of the charter holder," in §100.1031(d) is unclear.

Agency Response. The agency agrees with the comment. Section 100.1031(d) has been changed to clarify that the phrase, "made with the consent of the charter holder" modifies only the word, "amendments."

Comment. TCTA commented that current law does require a charter applicant to include in the application a provision that renewal of charter is contingent upon acceptable student performance on assessment instruments by a deadline or at intervals specified by the charter. TCTA requested that the agency scrutinize whether it would be possible to require as an operational standard in this section that charters meet the student performance standards on assessment instruments set forth in their application for at least two years immediately preceding renewal before they are renewed.

Agency Response. The agency disagrees with the comment. The pending rules include no provision dealing with the commissioner's criteria for approving or disapproving an application for renewal of an open-enrollment charter, and therefore no clarification or other change to §100.1031 may be made in response to this comment. At a later date, the agency anticipates proposing rules dealing with the commissioner's criteria for approving or disapproving an application for renewal of an open-enrollment charter, and a similar comment may be considered at that time.

Proposed §100.1033. Charter Amendment.

Comment. TASB, ATPE, and an individual expressed concern about the lack of any requirement that the charter official seeking to amend an open-enrollment charter has been authorized to do so by the governing body of the charter holder. The individual suggested that §100.1033(c)(1) be amended to require minutes, rosters, or some form of documentary evidence presented to show the board had met to discuss and actually approve the amendment requested. TASB recommended adding language to require that each amendment request be signed by each member of the governing body voting in favor of the amendment, or at least be accompanied by a board-adopted resolution. ATPE also commented that accurate records identifying the members of the governing body was key to establishing that the affected charter holder has authorized the amendment request presented to the commissioner for action.

Agency Response. The agency agrees with the comment. Section 100.1033(c)(1) has been modified to require that the written amendment request include a written resolution adopted by the governing body of the charter holder and signed by the members voting in favor. The resolution must authorize the commissioner to amend the open- enrollment charter as set forth in the text of the amendment, as finally negotiated between the charter holder and the commissioner, including any conditions under subsection (c)(4).

Comment. ACE and HCJJCS suggested that the rules refer to the standards set forth by TEC, §12.001, in lieu of "the best interest of students" in §100.1033(c)(3). TEC, §12.001, sets forth the purposes of the charter school statute, and thus provides statutory criteria against which proposed amendments may be evaluated. A vague and ambiguous standard such as "best interest of students" should not be substituted for statutory criteria.

Agency Response. The agency disagrees with the comment. The suggested change is contrary to TEC, §12.114 (Revision). Prior to House Bill 6, TEC, §12.113, made it a discretionary decision on the part of the State Board of Education whether to grant an open-enrollment charter to a particular applicant, subject only to a limited set of statutory criteria. Similarly, TEC, §12.114, made it a discretionary decision on the part of the State Board of Education whether to grant an amendment to a particular open-enrollment charter, guided by the policies expressed by the Legislature in TEC, Chapter 12, Subchapter D. In amending TEC, §12.114, to transfer the amendments function from the State Board of Education to the commissioner, the 77th Texas Legislature made no change that would limit the scope of this discretionary decision.

Newly adopted TEC, §12.001 (Purposes of Chapter), applies with equal force to each section of each subchapter in TEC, Chapter 12, and does not warrant special emphasis in the context of this highly discretionary decision. While the commissioner is directed by TEC, §12.001, not to "unduly regulate" the instructional methods or pedagogical innovations proposed by a requester, such amendments have never been unduly regulated by the State Board of Education, and the commissioner is prohibited from doing so by TEC, §12.001.

Comment. ACE and HCJJCS suggested that §100.1033(b) and (c) be modified to set forth categories of substantive and non-substantive amendments. Alternatively, illustrative distinctions between substantive and non- substantive amendments should be provided in rule. ATPE requested a clear definition of the "non-substantive" category. For example, things like alternative procedures for competitive bidding were not specifically outlined as substantive amendments, implying that this may fall under the non-substantive category.

Agency Response. The agency disagrees with the comments. As proposed, §100.1033(b) and (c) provide that all amendments are "substantive" unless the agency designates a list of amendments that may be approved using the notification procedure set forth in §100.1033(b). Consequently, the mandatory requirements imposed by the rule are contained in §100.1033(c). Subsection (b) merely provides a less-restrictive alternative that may be used at the discretion of the commissioner. Until one or more types of amendment are designated as "non-substantive," subsection (c) will be the exclusive means for amending an open-enrollment charter. When one or more types of amendment are designated as "non-substantive," the commissioner will endeavor to describe these types of amendment with precision and clarity. However, if there is any question whether a requested amendment falls properly within the "non-substantive" category, the proposed rule provides that "the commissioner of education may in the commissioner's sole discretion determine that the amendment will be processed under subsection (c) … (governing substantive amendments), and, in such event, subsection (c) shall govern the amendment."

Comment. ATPE expressed concern about the separation of amendments into substantive and non-substantive categories, and a consequent loss of the public's opportunity to attend and observe the process by which open- enrollment charters are amended. ATPE requested the process include public hearings on both substantive and non- substantive amendments. Under TEC, §12.116(b), the procedures for "modifying" an open-enrollment charter provide an opportunity for a hearing to the parents and guardians of students enrolled in the charter school. An opportunity for a hearing is not given in the proposed rules for either type of amendment, and the procedures for "non-substantive" amendments do not provide any type of notification that an amendment is being sought.

Agency Response. The agency disagrees with the comment. The process for revising the terms of an open- enrollment charter with the consent of the charter holder is governed by TEC, §12.114 (Revision). TEC, §12.116 (Procedure for Modification, Placement on Probation, Revocation, or Denial of Renewal), governs the modification of the terms of an open-enrollment charter against the wishes of the charter holder.

Unlike the State Board of Education, the commissioner is not a multi-member agency that is required to meet as a body corporate in order to take official action. So, there is ordinarily no public meeting or hearing before the commissioner acts pursuant to authority granted him under the Texas Education Code. Thus the separation of amendments into "substantive" and "non-substantive" does not affect the public's opportunity to attend or to observe the process by which the commissioner makes such decisions.

As noted previously in response to another comment, until one or more types of amendment are designated as "non-substantive," subsection (c) will be the exclusive means for amending an open-enrollment charter. When one or more types of amendment are designated as "non-substantive," the commissioner will endeavor to select only amendments that have small policy implications. However, should ATPE have specific concerns about the commissioner's future designation of a type of amendment as non-substantive, those concerns may be expressed, and addressed, as the situation arises.

Comment. ACE and HCJJCS suggested that the maximum period of time that may elapse between submission of a proposed substantive amendment and the commissioner's approval or disapproval of that proposed amendment should be defined in rule. The maximum period of time should not exceed thirty days.

Agency Response. The agency disagrees with the comment. As proposed, §100.1033(b)(2) provides a mandatory ten-day turnaround for non-substantive amendments. But by definition, substantive amendments require more deliberation and internal agency review. Often, such review takes place in multiple divisions of the agency, and the Division of Charter Schools must coordinate the review of these several offices and formulate a recommendation for consideration by the commissioner. Until the commissioner has had opportunity to review time frames associated with various types of proposed amendments, it would not be prudent to adopt a review deadline that might, in some cases, arbitrarily cut short the agency's deliberative process.

Comment. ACE and HCJJCS suggested that the provision for "conditional approval" in §100.1033(c)(4) should be deleted. If approval of a proposed amendment will be forthcoming only with modifications defined by the commissioner, those modifications should be communicated to the charter holder proposing the amendment. The charter holder may resubmit the amendment with the required modifications. Under the conditional approval mechanism in the rules as drafted, the commissioner would be able to modify the proposed amendment unilaterally.

Agency Response. The agency disagrees with the comment. As proposed, §100.1033(c)(4) does not permit the commissioner to make unilateral changes to the open-enrollment charter of a charter holder seeking an amendment. It does, however, allow the commissioner to grant an amendment that is similar to the one requested, even where the commissioner has decided not to grant the amendment framed by the charter holder. If the charter holder prefers not to comply with the conditions required by the commissioner, the charter holder may simply decline the conditional amendment offered by the commissioner. Revision of an open-enrollment charter under TEC, §12.114, is a consensual process. A conditional amendment must be communicated to the charter holder proposing the amendment, and the charter holder must agree to the conditions included with the amendment. Modification of an open-enrollment charter without the consent of the charter holder must be for cause under TEC, §12.115.

Comment. Texans Can!, HCJJCS, and ACE suggested that amendments changing the site of a school should not be categorized as "expansion" amendments in §100.1033(c)(5). Many conditions may require that a school change its site from its charter designation during its first three years. Texans Can! has no objection to the wording restricting "adding" a new site within three years, only to the wording restricting "changing" a site.

Agency Response. The agency agrees with the comment. Section 100.1033(c)(5) has been modified to delete the phrase, "or change."

Comment. ACE and HCJJCS suggested that §100.1033(c)(5)(A)(i) should be deleted, or modified to permit earlier expansion of schools that existed as either private or public schools prior to operating as an open-enrollment charter school. The rule should, at a minimum, permit expansion amendments to be effective for such schools no later than the start of the second full school year in which the school would be operating as an open-enrollment charter school.

Agency Response. The agency disagrees with the comment. As proposed, §100.1033(c)(2) provides that, in considering an amendment request, the commissioner may consider "any relevant information concerning the charter holder, including its student and other performance, compliance, Public Education Information Management System (PEIMS) data, and other information." Where a charter holder is proposing to expand its operations, the information most relevant to the commissioner's decision is not available for review until after the second year of operations: audits concerning the financial management of the charter holder, monitoring reports concerning the charter holder's compliance with its open-enrollment charter, AEIS reports concerning student performance, and its success under the state's accountability system. Until information concerning the charter holder's past performance is available for analysis, the commissioner cannot make a rational decision whether to allow that charter holder to expand its operations.

Comment. ACE and HCJJCS suggested that the June 1st amendment approval deadline in §100.1033(c)(5)(A)(ii) should apply only to amendments proposing expansion of grade levels or enrollment, if at all.

Agency Response. The agency disagrees with the comment. Proposed §100.1033(c)(5)(A)(ii) was taken from a similar rule adopted by the State Board of Education. The primary purpose of the rule, then as now, is to provide notice to school districts affected by the expansion of a charter holder's operations. When a charter holder adds a site, extends is geographic area, increases its enrollment, or changes the grade levels that it serves, it changes the nature of the impact that its operations have on neighboring public schools. These neighboring public schools need adequate time to plan and budget for the financial and other impacts caused by such changes.

Comment. ACE and HCJJCS suggested that §100.1033(c)(6) should be deleted. Amendments pertaining to delegation of powers and duties should be treated as other substantive amendments and evaluated with reference to the criteria in TEC, §12.001.

Agency Response. The agency disagrees with the comment. In response to another comment, §100.1033(c)(6) must be expanded, not deleted. Section 100.1033(c)(6) has been amended to add specific criteria that the commissioner will use in exercising his discretion to grant or deny proposed amendments to the governance structure described in an open-enrollment charter.

Throughout House Bill 6, great emphasis is placed on the principle that a charter holder must be held accountable for exercising its authority to operate the public school authorized by its open-enrollment charter. Newly amended TEC, §12.111(9), provides that the open-enrollment charter itself must specifically list the powers and duties that the governing body intends to delegate to any person. The powers or duties not listed in the charter must be exercised by the governing body itself, acting as a body corporate through a public meeting. The only way that an open-enrollment charter granted before House Bill 6 is likely to be in compliance with TEC, §12.111(9), is if the commissioner amends the charter to list the duties actually performed by a person other than the governing body acting as a body corporate.

As stated in response to another comment, the commissioner has discretion to grant or deny any amendment, guided by the policies expressed by the Legislature in TEC, Chapter 12, Subchapter D. Newly adopted TEC, §12.001 (Purposes of Chapter), applies with equal force to each section of each subchapter in TEC, Chapter 12, and does not warrant special emphasis in the context of a highly discretionary decision such as an amendment concerning changes in the governance of a public school. Rather, the factors that should be weighed most heavily in such a decision concern the soundness of the governance structure proposed by the charter holder in light of the governance-related provisions of House Bill 6.

Proposed §100.1035. Compliance Records on Nepotism, Conflicts of Interest, and Restrictions on Serving.

Comment. TASB stated that requiring charter school board members to comply with proposed §100.1035 relating to nepotism, conflicts of interest, and restrictions on serving is appropriate considering that charters are publicly funded with taxpayer money.

Agency Response. No response required.

Comment. ATPE suggested requiring the records on employees, officers, and governing body members to be filed annually and to be updated within 30 days of any significant changes (i.e., resignation or appointment of governing body members). At a minimum, charter holders should be required to submit records on their governing body members since that body is responsible for all policies and operations at their schools. An individual suggested that the record-keeping requirements proposed by §100.1035(a) be handled by a mandatory disclosure and reporting system, much like a candidate running for public office, under which the affected charter personnel would be required to disclose any conflict of interest or nepotism, and held accountable through the penal code. ACE and HCJJCS suggested that proposed §100.1035(a) should be revised to eliminate the requirement that a charter holder "collect and maintain" the information referenced in that section. Rather, a charter holder may instead be required to make such information available upon request. This requirement responds to the state's interest in monitoring compliance. As written, the rule is overly prescriptive and interferes unnecessarily with the operation of the school.

Agency Response. The agency disagrees with the comments. The information listed in proposed §100.1035(a) is required by the charter holder in order for it to comply with the requirements of House Bill 6. The public and the media have a right to access this information under the Records Retention Act and the Public Information Act.

The information listed in proposed §100.1035 relates to many different requirements imposed on a charter holder by TEC, Chapter 12, Subchapter D. For example, TEC, §12.1054 (Applicability of Laws Relating to Conflict of Interest), makes Local Government Code, Chapter 171, apply to charter holders, including significant criminal penalties against a local public official who has a conflict of interest and knowingly fails to comply with its requirements. TEC, §12.1055 (Applicability of Nepotism Laws), makes Government Code, Chapter 573, apply to charter holders, including significant criminal penalties against a public official who takes official action benefiting a family member in violation of its requirements. TEC, §12.119 (Bylaws; Annual Report), requires that a charter holder must report the name, address, and telephone number of each officer and member of the governing body to the SBOE, as well as the amount of annual compensation paid to each officer and member. TEC, §12.1054, makes Local Government Code, §171.009, apply to charter holder board members, including a prohibition against having compensated charter holder board members. House Bill 6 also enacted TEC, §12.120 (Restrictions on Serving as Member of Governing Body of Charter Holder or Open-Enrollment Charter School or as Officer or Employee), a charter-specific law designed to prevent individuals with certain criminal convictions or a substantial interest in a management company from serving as a member of the governing body of a charter holder, as a member of the governing body of an open-enrollment charter school, or as an officer or employee of an open- enrollment charter school. Finally, the bill enacted TEC, §12.123 (Training for Members of Governing Body of School and Officers), a mandatory regime for training the principal officials running a publicly funded charter school.

It is impossible for a charter holder to comply with TEC, §§12.1054, 12.1055, 12.119, 12.120, and 12.123, without first informing itself as to the information listed in proposed §100.1035(a). For example, the policy of TEC, §12.120, is clearly that a person convicted of certain criminal offenses may not serve as an employee of a charter school. Yet if a charter holder fails to inform itself concerning the criminal convictions of its employees, the policy behind TEC, §12.120, will be frustrated. A clear (if implicit) requirement of TEC, §12.120, is that the charter holder must collect this information. There is certainly an administrative cost associated with gathering, maintaining, and reviewing the information listed in proposed §100.1035. But failing to implement these provisions is not an option.

Under TEC, §12.1052, electronic or other documents collected or created by a charter holder must be retained for the period required by the applicable records retention schedule. Under TEC, §12.1051, this information is generally public. Thus, the costs attributed to §100.1035 are, in fact, associated with the underlying statute. By contrast, the commissioner might have proposed a centralized reporting regime that required each charter holder to submit the information listed in §100.1035 in electronic form to the agency. Such a system of reporting- suggested by ATPE and the individual commenter above- would avoid substantial travel expenses to the agency for reviewing such information at the site of each charter holder. However, such savings to the agency would have come at the expense of the charter holders, whose budgets can scarcely afford the added cost. Accordingly, proposed §100.1035 merely requires the charter holder to create and retain such records as are reasonably necessary to comply with the requirements of the law. The agency will review this information via proposed §100.1029 instead.

Comment. ACE and HCJJCS suggested that the scope of the individuals covered by §100.1035(a) is overly broad. The law firm of Bracewell & Patterson, L.L.P., Attorneys and Counselors at Law, on behalf of its client, Texans Can!, on behalf of its open-enrollment charter schools, commented as follows. Regarding proposed §100.1035, the statute does not target officers of the governing body of a charter holder, if they are not also members of the governing body. Texans Can!, therefore, recommends that proposed rule § 100.1035 be revised to delete the words "officer and" in §100.1035(a)(1).

Agency Response. The agency agrees, in part, with the comment. The scope of the information listed in proposed §100.1035(a) is required by the charter holder in order for it to comply with the requirements of House Bill 6. See discussion above. However, there is an equivocal use of the term, "officer" in proposed §100.1035(a)(1) and (a)(2), which introduces an ambiguity in the rules.

The phrase, "officer of the charter school" is a defined term under the proposed rules. Typically, an officer of a charter school is a member of the charter holder's administrative staff, either an employee or an independent contractor. As used in proposed §100.1035(a)(1), the phrase, "each officer and member of the governing body of the charter holder" refers only to offices held by members of the governing body. Section 100.1035(a)(1), as proposed, was not intended to include any member of the administrative staff of the charter holder who does not fall within the definition of the phrase, "officer of the charter school."

As proposed, the definition of an officer of a charter school necessarily includes top charter holder administrators, regardless whether the charter holder engages in non-charter activities. For example, it is impossible for the chief executive officer or chief financial officer of a charter holder to fall outside the definitions provided by proposed §100.1011(18) and (21), respectively. Similarly, any employee or contractor of the charter holder who is charged with performing, or does perform, any of the functions listed in proposed §100.1011(19) is a central administration officer. These administrators are at the apex of an organization that is responsible to the governing body of the charter holder for the operation of the charter school.

However, a charter holder engaged in non-charter activities may have administrators, employees and contractors who do not perform, and are not charged with performing, any charter school functions. Such staff engaged in purely non-charter activities should be free from the requirements of House Bill 6 relating to the employees and officers of a charter school. Accordingly, proposed §100.1035 has been revised to delete the phrase, "officer and" from §100.1035(a)(1). In addition, proposed §100.1011(1) has been revised to delete the phrase "officer of a charter school," and proposed §100.1011(17), adopted as §100.1011(16), has been revised to clarify that a charter holder employee or independent contractor engaged solely in non-charter activities for the charter holder is not an "officer of a charter school" under these rules.

Comment. ACE and HCJJCS suggested that the level of detail required by §100.1035(b) is unnecessary to meet statutory goals. A charter holder should not be required to collect and maintain any of the information described in this subsection. A charter holder should only be required to produce upon request the information necessary to establish compliance with statute.

Agency Response. The agency disagrees with the comments. The information listed in proposed §100.1035(b) is required by the charter holder in order for it to comply with the requirements of House Bill 6. See earlier agency response.

Comment. ACE and HCJJCS requested that the terms "business interests" and "transactions" be defined at §100.1035(b)(7). ACE and HCJJCS asked, "For example, is an unsuccessful application for employment a "transaction?"

Agency Response. The agency disagrees with the comment. Section 100.1035(b)(7), as proposed, covers only actual business interests or transactions with a charter holder, charter school, or management company. It does not cover inchoate transactions or the solicitation of a business interest that is not obtained.

Comment. ACE and HCJJCS suggested that §100.1035(c) should be deleted, and that a requirement that a charter holder make information available upon request is sufficient to permit monitoring of compliance.

Agency Response. The agency disagrees with the comment. The information listed in proposed §100.1035(b) is required by the charter holder in order for it to comply with the requirements of House Bill 6. See earlier agency response.

Proposed §100.1037. Notification of Charter Application.

Comment. TASB stated that it appreciates §100.1037, which requires that school boards be notified of potential charter schools that could be set up in their district and draw students.

Agency Response. No response required.

Division 3. Charter School Funding.

Proposed §100.1043. Status and Use of State Funds; Depository Contract.

Comment. TASB stated that it welcomes §100.1043, which spells out that state funds received by a charter holder are public funds, holding them to the same standard as districts, TEC, §45.105(c).

Agency Response. No response required.

Proposed §100.1047. Accounting for State Funds.

Comment. TCTA supported the provisions of §100.1047 including existing charter contract language, stating that it is a necessary addition to the rules due to the fact that financial mismanagement has been one of the biggest problems plaguing some charter schools.

Agency Response. No response required.

Comment. ATPE suggested that §100.1047(b) should require the charter holder to notify the parents of students enrolled in a charter school of the results of their annual financial audit reports, and that a copy of the report be forwarded to appropriate legislators representing the area served by the charter.

Agency Response. The agency disagrees with the comment. House Bill 6 amended Local Government Code, §140.006, (Publication of Annual Financial Statement by School, Road, or Other District) to provide that the financial statement of an open-enrollment charter school shall be made available in the manner provided by Chapter 552, Government Code.

The suggested change would conflict with this provision of House Bill 6.

Comment. ATPE requested clarification concerning the reason proposed §100.1047(d)(1) includes an exemption to charter schools from complying with rules regarding the attendance accounting for court-related students, since many of the students they serve are at-risk and may fall into this category.

Agency Response. The agency disagrees with the comment. Proposed §100.1047(d)(1) provides that a charter holder is not required to comply with §129.22 of this title (relating to Court-Related Students). Section 129.22(a) requires that a student referred to a juvenile court for delinquent conduct or conduct indicating a need for supervision shall be given excused absences under TEC, §25.087 (Excused Absences), for any missed classes under certain circumstances. Section 129.22(b) requires that a student referred to the Texas Department of Human Services or a county or local welfare unit on the basis that he or she is abused or neglected shall be given excused absences under TEC, §25.087, for any missed classes under certain circumstances. Charter schools are not subject to TEC, §25.087.

Comment. TASB requested the addition of language to this section that would spell out that TEC, §25.002, (requirements for student enrollment in public schools, such as identification documents or immunization records that need to be produced within 30 days) applies to charter schools.

Agency Response. The agency agrees with the comment. Section 100.1047(d) has been modified to provide that a charter holder shall comply with TEC, §25.002.

Comment. ACE and HCJJCS suggested that the word "any" in §100.1047(e)(1) and (2) should be deleted.

Agency Response. The agency disagrees with the comment. There is no amount of private financial activity that may be commingled with the accounting, auditing, budgeting, reporting, and recordkeeping systems of the charter school, and any amount of commingling of such systems is a material charter violation. The suggested change would introduce an ambiguity in the rules.

Comment. ACE suggested that the qualifiers "intentional and knowing" should be inserted immediately before the word "commingling" in §100.1047(e)(2).

Agency Response. The agency disagrees with the comment. The suggested change would introduce an ambiguity in the rules. A person who "intentionally" or "knowingly" commingles public and private business in the accounting, auditing, budgeting, reporting, and recordkeeping systems of a charter school commits a criminal offense. By contrast, a person who unintentionally and unknowingly commingles public and private business in the accounting, auditing, budgeting, reporting, and recordkeeping systems of a charter school merely commits a material charter violation. The agency has an obligation under TEC, §12.107, to insure that taxpayer funds are not used to support the private business ventures of a charter holder, regardless of whether it is done deliberately.

Comment. ACE and HCJJCS suggested that §100.1047(f) should be reduced to the first sentence appearing in the proposed draft. Statute does not require that a charter holder separately record the information listed after the first sentence.

Agency Response. The agency disagrees with the comment. Proposed §100.1047(f) is authorized by TEC, §12.106(c), and is taken from language that has been included in every contract for charter since Generation 1. The requirement that the books and records of a charter school clearly identify self-interested transactions by charter school officials is distinguishable from the regime found in Local Government Code, Chapter 171, and its purpose is different. Section 100.1047(f) enables the agency to carry out its responsibility to audit and review these self- interested transactions for compliance with other provisions of House Bill 6.

Comment. ACE suggested that, if the language appearing after the first sentence of §100.1047(f) is not deleted, the phrase "position of influence" in subsection (f)(5) should be defined.

Agency Response. The agency agrees with the comment. Section 100.1047 has been modified to add a new subsection (g) defining the phrase, "position of influence."

Proposed §100.1051. Audit by Commissioner; Records in the Possession of a Management Company.

Comment. TCTA recommends moving §100.1051 to §100.1029, entitled "Agency Audits, Monitoring, and Investigations."

Agency Response. The agency disagrees with the comment. The subject matter of proposed §100.1051 could have been organized under different divisions. The agency has chosen to organize the section under Division 3, the division in the subchapter where many of the provisions relating to financial audits, are organized.

Division 4. Property of Open-Enrollment Charter Schools.

Proposed §100.1063. Use of Public Property by a Charter Holder.

Comment. ACE and HCJJCS commented that the term "impede" in proposed §100.1063(c)(2)(B) is vague and ambiguous.

Agency Response. The agency disagrees with the comment. Proposed §100.1063(c)(2)(B) is taken from a 1997 Ethics Advisory Opinion issued in response to a state agency asking whether it could allow its employees to use electronic mail and Internet connections acquired and maintained with state funds for personal purposes. The agency also asked whether it could allow its employees to use cellular phones acquired and maintained with state funds for personal purposes, so long as the employees reimburse the agency for any costs incurred. The Texas Ethics Commission opined, "[I]n adopting policies about use of state equipment, agencies should make sure that any permissible personal use does not result in direct costs paid by the state and does not impede agency functions." Ethics Advisory Opinion No. 372 (August 8, 1997).

The Ethics Commission has developed a body of administrative decisions interpreting and applying Penal Code, §39.02, to the use or misuse of public property by public officials. These decisions are binding on school district officials, and should inform the commissioner's application of TEC, §12.107 and §12.128, to charter holders.

Comment. ACE and HCJJCS objected to applying §100.1063(c) to property that is merely "maintained" by the charter holder using state funds.

Agency Response. The agency disagrees with the comment. Section 100.1063(c), and similar provisions concerning property "acquired" using state funds, apply with equal force to property that is either "improved" or "maintained" using state funds. This is done to permit a charter holder to use state funds to improve and/or maintain its private property with state funds, so long as the private property is used for charter school purposes in compliance with these rules.

Section 100.1063, §100.1011(8) and (11), and similar provisions are intended to subject private property that is maintained with state funds to the use restrictions imposed by §100.1063(c) and the accounting regime imposed by §100.1063(f). However, they are not intended to imply that §100.1067 (relating to Possession and Control of the Public Property of a Former Charter Holder) will subject private property that is merely maintained with state funds to recovery by the state. Rather, the state may recover formerly private property only if (and to the extent that) the value of the property has been enhanced by "additions" or "betterments" to such property.

The proposed rules presented no amendment to §100.1067, and therefore no clarification or other change to that section may be made in response to this comment. However, the subject is treated in Section 1.2.4.4, "Accounting for Maintenance, Additions and Betterments," in the December 2001 version 8.1 of the Financial Accountability System Resource Guide. This section is referenced in Section 1.2.4, "Fixed Assets," of the charter school supplement to the Resource Guide and provides: "Maintenance costs are those outlays which are necessary to keep an asset in its intended operating condition but which do not materially increase the value or physical properties of the asset. Maintenance costs should be charged to appropriate expenditure accounts and not capitalized as fixed assets."

The Resource Guide governs the way a certified public accountant must record private property that has been maintained with state funds on the property exhibit to a charter holder's audited financial statement. Under §100.1067, the property exhibit determines whether, and to what extent, such property is subject to recovery by the state.

Generally, public funds simply may not be used to maintain private property. Proposed §100.1063(f) provides a mechanism for tracking the state's contribution to the cost of maintaining private property that is used by a charter holder for public purposes. However, nothing requires a charter holder to use state funds to maintain its private property. By using private funds to maintain its private property, a charter holder can avoid having to account for using state funds for this purpose. However, a charter holder that elects to use its private property for charter school purposes, and elects to maintain such property with state funds, must comply with the accounting and use restrictions imposed by §100.1063.

Comment. ACE and HCJJCS suggested that the proposed revision to §100.1063(a) should be clarified by adding an additional statement to the effect that, while an "interest in real estate" may be public property, ownership of that property remains with the charter holder as provided in subsection (d) of that section.

Agency Response. The agency disagrees with the comment. The suggested language introduces an ambiguity in §100.1063 as proposed, and unduly complicates the section. Proposed subsection (d) clearly states that "[p]ublic property is owned by the charter holder, regardless of the funds used to acquire it."

Under the rule as proposed, the charter holder retains all title to the property, exercises complete control over the property, and is entitled to all use and benefit from the property. Notwithstanding its clear title to the property, the charter holder keeps this property in trust for the benefit of the students of the charter school, and bears the responsibility for using the property consistent with subsection (c). Finally, at the end of the charter school's life, the charter holder must surrender all the property it holds in trust back to the state. This is because the property held in trust can only be used for charter school purposes, but such purposes no longer exist. Only when this property is surrendered to the state does the state take title and become the "owner" of the property.

Comment. ACE and HCJJCS suggested that the proposed revision to §100.1063(a) should be expanded to clarify that the state maintains no security interest whatsoever in property owned by a charter holder.

Agency Response. The agency disagrees with the comment. The suggested language introduces an ambiguity in §100.1063 as proposed, and unduly complicates Division 4 of the rules. Existing §100.1069(d), (relating to Rights and Duties Not Affected) provides: "Nothing in this subchapter affects a security interest in or lien on property established by a creditor in compliance with law if the security interest or lien arose in connection with the sale or lease of the property to the charter holder…." Existing §100.1069, adopted to be effective November 6, 2001, is not currently proposed for revision.

Comment. ACE and HCJJCS suggested that the proposed revision to §100.1063(a) should be expanded to clarify that a lien on behalf of the state may be imposed only by judicial process in the event that the state becomes a creditor of the charter holder.

Agency Response. The agency disagrees with the comment. The suggested language introduces an ambiguity in §100.1063 as proposed, and unduly complicates Division 4 of the rules. Existing §100.1067(d) specifies the circumstances under which the commissioner may use legal process to take possession or assume control over the public property held by a charter holder. Existing §100.1067, adopted to be effective November 6, 2001, is not currently proposed for revision.

Comment. TCTA supported the clarification in §100.1063(c) that public property can only be used to operate kindergarten up through grade 12 programs to avoid situations in which charters want to use public property for ancillary programs not intended by TEC, §12.102, such as daycare programs.

Agency Response. No response required.

Comment. ACE and HCJJCS suggested that the proposed revisions to §100.1063 should be clarified by describing the manner in which the state will determine the compensation owed it by a former charter holder.

Agency Response. The agency disagrees with the comment. The property exhibit required by §100.1063(f) is described in the charter school supplement to the Financial Accountability System Resource Guide, as revised in December 2001. The Resource Guide governs the way a certified public accountant must record property acquired, improved, or maintained partly using state funds and partly using other funds on the property exhibit. Under §100.1067, the property exhibit determines whether, and to what extent, such property is subject to recovery by the state. The proposed rules presented no amendment to §100.1067 or to the Resource Guide, and therefore no clarification or other change to §100.1067 or to the Resource Guide may be made in response to this comment. Adding the suggested language to §100.1063 would not clarify the rules, but would create ambiguity.

Comment. ACE and HCJJCS suggested that the proposed revisions to §100.1063 should be clarified with a statement indicating whether the commissioner will provide a sample form for use in preparing the exhibit referenced in subsection (f)(1).

Agency Response. The agency disagrees with the comment. The property exhibit required by §100.1063(f) is not only described in the charter school supplement to the Resource Guide (as noted in response to the comment above), but a sample form is attached to the charter school supplement. See Resource Guide Section 1.2.4.10 ("Fixed Asset Exhibit"). The pending rules propose no amendment to the Resource Guide, and therefore no clarification or other change to the Resource Guide charter supplement may be made in response to this comment. Adding the suggested language to §100.1063 would not clarify the rules, but would create ambiguity.

Comment. ACE and HCJJCS suggested that the proposed revision to §100.1063(a) should be clarified by adding an additional statement to the effect that nothing in §100.1063 creates a state interest in property acquired, improved, or maintained with non-public funds except to the extent public funds are also used in the acquisition or improvement of the property.

Agency Response. The agency disagrees with the comment. (For further response, see the response to the comment listed earlier, "ACE objected to applying §100.1063(c) to property that is merely 'maintained' by the charter holder using state funds.")

Comment. ACE and HCJJCS suggested that §100.1063(c)(3), and/or other appropriate sections, should be clarified with the addition of the following sentence: "Nothing in this section prohibits a charter holder from leasing property owned by a charter holder to another party provided that the proceeds of the lease are applied to the purpose of implementing a program that is described in the open-enrollment charter."

Agency Response. The agency disagrees with the comment. A charter holder may not use state funds for the purpose of acquiring real property as an investment. A charter holder must invest state funds in accordance with Government Code, §§2256.009-2256.016, as required by proposed §100.1045, unless alternative requirements for investing state funds have been approved by the State Board of Education under proposed §100.103 (relating to Optional Open-Enrollment Charter Provisions for Contracting and Purchasing), and the open-enrollment charter has been amended by the commissioner to adopt the approved procedures.

Comment. ACE and HCJJCS suggested that §100.1063(c)(3), and/or other appropriate sections, should be clarified by adding a statement to the effect that nothing in this section prevents a contractor of the charter holder from using public property owned by the charter holder for the purpose of providing goods or services to the charter school under the contract, if such use of charter school property is an express contract term, factored into the price of the goods or services provided under the contract, and the contract is duly authorized by the governing body of the charter holder under §100.1063(c).

Agency Response. The agency agrees with the comment. Proposed 100.1063(c) has been modified to add a paragraph (6) providing that nothing in §100.1063 prevents a contractor of the charter holder from using public property owned by the charter holder for the purpose of providing goods or services to the charter school under the contract, if such use of charter school property is an express contract term, factored into the price of the goods or services provided under the contract, and the contract is duly authorized by the governing body of the charter holder under §100.1063(c).

Comment. ACE suggested that §100.1063(c)(3), and/or other appropriate sections, should include a statement providing that if a charter holder owns a facility that is used for the operation of the charter school described in its open-enrollment charter, it may pay itself state funds equal to or lower than the fair market value of the use of that facility, without thereby creating a state interest in ownership of the facility itself. Alternatively, the rule may require that the facility must be used for the purposes of the charter school for a prescribed minimum period of time in order to avoid the accrual of a state interest in the facility if the charter school ceases to operate.

Agency Response. The agency disagrees with the comment. The suggested language cannot be added to §100.1063 because this would suggest that the right to use the charter holder's facility- which is clearly paid for with state funds- is not "public property" within the meaning of §100.1063. Clearly, the right to occupy and use the charter holder's facility is "public property" for purposes of §100.1063 because it is bought and paid for with state funds. Whether the facility itself would be subject to recovery by the state is determined by the rules governing the property exhibit required by §100.1063(f).

Under §100.1067, the property exhibit determines whether, and to what extent, the facility in this hypothetical situation would be subject to recovery by the state. The property exhibit is described in the charter school supplement to the Financial Accountability System Resource Guide, as revised in December 2001. The Resource Guide will determine how a certified public accountant must record the facility in this hypothetical situation on the property exhibit. The proposed rules present no amendment to §100.1067 or to the Resource Guide, and therefore no clarification or other change to §100.1067 or to the Resource Guide may be made in response to this comment.

Comment. ACE suggested that §100.1063(c)(3), and/or other appropriate sections, should include a statement providing that if a charter holder is acquiring a facility that is used for the operation of the charter school described in its open-enrollment charter, it may pay the mortgage on that facility with public funds without thereby creating a state interest in the facility. Alternatively, the rule may require that the facility must be used for the purposes of the charter school for a prescribed minimum period of time in order to avoid the accrual of a state interest in the facility if the charter school ceases to operate.

Agency Response. The agency disagrees with the comment. The suggested language cannot be added to §100.1063 because this would suggest that the right to use the charter holder's facility- which is clearly paid for with state funds- is not "public property" within the meaning of §100.1063. Clearly, the right to occupy and use the charter holder's facility is "public property" for purposes of §100.1063 because it is bought and paid for with state funds. Whether the facility itself would be subject to recovery by the state is determined by the rules governing the property exhibit required by §100.1063(f).

Under §100.1067, the property exhibit determines whether, and to what extent, the facility in this hypothetical situation would be subject to recovery by the state. The property exhibit is described in the charter school supplement to the Financial Accountability System Resource Guide, as revised in December 2001. The Resource Guide will determine how a certified public accountant must record the facility in this hypothetical situation on the property exhibit. The proposed rules presented no amendment to §100.1067 or to the Resource Guide, and therefore no clarification or other change to §100.1067 or to the Resource Guide may be made in response to this comment.

Comment. ACE and HCJJCS suggested that the proposed revisions to §100.1063 should be clarified with a statement to the effect that the public property of a charter holder used for the operation of a charter school is subject to the municipal zoning ordinances governing public schools operated by independent school districts in the same manner and to the same extent that public schools operated by independent school districts are subject to such ordinances.

Agency Response. The agency disagrees with the comment. TEC, §12.103(a), states only that a charter school is subject to "municipal zoning ordinances governing public schools." The commissioner declines to adopt a rule governing the manner in which a municipality might interpret or apply TEC, §12.103(a), to charter schools operating within its jurisdiction.

Proposed §100.1071. Real Property Held in Trust.

Comment. ACE and HCJJCS asked for clarification of the term, "true owner."

Agency Response. The agency disagrees with the comment. Government Code, §2252.092 (Identification of Trust Property Required), uses the term "true owner." Because the term, "true owner" is a statutory one, providing a definition in these rules would not provide clarity but would create ambiguity as to the manner in which a court would interpret the term "true owner" as it applies to a charter holder under House Bill 6.

Comment. ACE and HCJJCS asked whether the provision in §100.1071(b)(3) making a conveyance in violation of §100.1071 void is inconsistent with Government Code, Chapter 2252, Subchapter D.

Agency Response. The agency disagrees with the comment. Government Code, §2252.093, (Noncompliance Creates Void Conveyance) provides that a conveyance of property subject to Chapter 2252, Subchapter D, is void if a covered entity fails to comply with that statute. This potential consequence is set forth in the rule simply to insure that charter holders are alerted to it.

Proposed §100.1073. Improvements to Real Property.

Comment. ATPE expressed concern that proposed §100.1073(a) does not specify whether amendments regarding an alternative bidding procedure may be approved after the original charter is granted. SBOE no longer approves amendments for existing charters, so the rule is unclear about whether these alternative procedures must be included in the original charter or if they may be adopted at a later date. TEC, §12.1053, addresses competitive bidding processes, and requires alternate procedures to be approved by the SBOE. This implies that any alternate competitive bidding procedures must be adopted during the initial application for an original charter rather than being adopted by amending the charter. Any changes to competitive bidding procedures should not be considered "non-substantive" amendments, and the rule should require that procedures for these amendments include the opportunity for parents or guardians and school districts to participate in a hearing on the issue.

Agency Response. The agency disagrees with the comment. Proposed §100.1073(a) does specify whether amendments regarding alternative procedures for purchasing and contracting may be approved after the original charter is granted; it specifies that these alternative procedures must be approved via the amendments process. Proposed §100.1073(a) does not give effect to language that may have been included in an open-enrollment charter before TEC, §12.1053, was adopted, and before the State Board of Education had determined whether the alternative is a sufficient substitute for it. Moreover, it would be unreasonable to require that a charter holder in operation on the effective date of House Bill 6 already have included such language in its open-enrollment charter or forfeit the opportunity afforded by TEC, §12.1053. Such a construction, if placed on the statute, would reduce the Legislature's policy to an illusory one for most charter holders.

TEC, §12.1053 (Applicability of Laws Relating to Public Purchasing and Contracting), provides at subsection (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 State Board of Education." As amended by House Bill 6, TEC, §12.114 (Revision), provides that an open-enrollment charter may be amended only with the approval of the commissioner. Consequently, proposed §100.1073(a) requires that the alternative procedures approved by the State Board of Education are described in the open-enrollment charter.

As proposed, §100.1033(b) and (c) provide that all amendments are "substantive" unless the agency designates a list of amendments that may be approved using the notification procedure set forth in §100.1033(b). Consequently, the mandatory requirements imposed by the rule are contained in §100.1033(c). Section 100.1033(b) merely provides a less-restrictive alternative that may be used at the discretion of the commissioner. Until one or more types of amendment are designated as "non-substantive," §100.1033(c) will be the exclusive means for amending an open-enrollment charter. When one or more types of amendment are designated as "non- substantive," the commissioner will endeavor to select only amendments that have small policy implications. However, should ATPE have specific concerns about the commissioner's future designation of a type of amendment as non-substantive, those concerns may be expressed, and addressed, as the situation arises.

Comment. ACE and HCJJCS questioned if subsection (b) might, in combination with Local Government Code, § 271.023, (Conflict of Laws) mean that charter holder must comply with the provisions of TEC, Chapter 44, Subchapter B, relating to the purchase of goods and services under contract by a school district. Accordingly, the following sentence should be added to subsection (b): "Nothing in this section requires a charter holder to comply with the provisions of Education Code Chapter 44, Subchapter B, except in contracting for the construction, repair, or renovation of a structure, road, highway, or other improvement to real property if the contract required the expenditure of public funds in the amount specified by Local Government Code, §271.024."

Agency Response. The agency disagrees with the comment. Local Government Code, §271.023, provides: "To the extent of any conflict, the provisions of Subchapter B, Chapter 44, Education Code, relating to the purchase of goods and services under contract by a school district prevail over this subchapter." This provision only operates where an entity, such as a school district, is subject both to Local Government Code, Chapter 271, Subchapter B, and to TEC, Chapter 44, Subchapter B. Charter schools are not generally subject to TEC, Chapter 44, Subchapter B. Proposed §100.1073(b) merely restates TEC, §12.1054(b), and does nothing to introduce a conflict with Local Government Code, Chapter 271, Subchapter B.

TEC, §12.1053(b)(1)(B), provides that a charter school is considered to be a "governmental entity" for purposes of Local Government Code, Chapter 271, Subchapter B. TEC, §12.1053(b), provides: "To the extent consistent with this section, a requirement in [Local Government Code, Chapter 271, Subchapter B] that applies to a school district or the board of trustees of a school district applies to an open-enrollment charter school, the governing body of a charter holder, or the governing body of an open-enrollment charter school."

As originally passed by the Texas House of Representatives, SECTION 8 of the engrossed version of HB 6, 77th Legislature (2001 Regular Session), would have amended TEC, §12.104, to add new subsection (L), placing charters under the laws relating to "purchasing and contracting under Subchapter B, Chapter 44," Education Code. At the same time, SECTION 10 of the engrossed version would have added a new TEC, §12.1053, that is substantially similar to TEC, §12.1053(a) and (c), of the bill as finally passed. The presence of the new subsection (L) in SECTION 8 of the engrossed version of HB 6, and its absence from the bill as finally passed, makes clear the intention of the Legislature. Local Government Code, §271.023, cannot be read to make TEC, Chapter 44, Subchapter B, apply to charters.

Comment. ACE and HCJJCS suggested that this section should be amended to clarify that improvements to real property paid for with public funds are subject to standard depreciation schedules and that the value of any potential state interest in the improvement declines commensurately.

Agency Response. The agency disagrees with the comment. This subject is treated in Section 10.3.3.4, "Depreciation Expense," in the December 2001 version 8.1 of the Financial Accountability System Resource Guide. Section 10.3.3.4 governs the depreciation of property subject to §100.1063(f) of the proposed rules.

The property exhibit required by §100.1063(f) is described in the charter school supplement to the Financial Accountability System Resource Guide, as revised in December 2001. Under section 1.2.4 of the supplement, generally accepted accounting rules for the depreciation of an asset do apply to property acquired with state funds. As a result, the value of the state's interest that must be compensated under §100.1067 (relating to Possession and Control of the Public Property of a Former Charter Holder) diminishes in proportion to the depreciated value of the underlying asset. These provisions govern the way a certified public accountant must record the effects of depreciation on an asset acquired, improved, or maintained with state funds on the audited financial statement submitted by a charter holder.

The available methods for depreciating an asset are covered by generally accepted accounting principles, which are not the subject of these rules. Section 10.3.3.4 of the Resource Guide provides that "any acceptable method determining depreciation may be used." The Resource Guide governs the way a certified public accountant must record the effects of depreciation on an asset acquired, improved, or maintained with state funds.

Division 5. Charter School Governance.

Comment. West Houston Charter School commented that, though some of House Bill 6 appears to be rigid and restrictive, if it is not enforced the charter school system will surely fail. The original innovative bill that created charter schools is also one that would destroy charter schools. Without strict guidelines- particularly addressing conflict of interest, executive boards, and nepotism- individuals will continue to take advantage of the public school financial system through charter schools.

Agency Response. No response required.

Proposed §100.1101. Delegation of Powers and Duties.

Comment. ACE and HCJJCS requested that §100.1101(e) be deleted. House Bill 6 does not define, nor require the commissioner to define, non-delegable powers and duties. As introduced, House Bill 6 did specify non- delegable duties, but these provisions are absent from the bill as finally passed. As finally passed, TEC, §12.111(9), requires the charter holder to specify the powers or duties of the governing body of the school that the governing body may delegate to an officer. TCTA stated that it supports the list of non-delegable powers and duties in proposed §100.1101(e). The proposed subsection is necessary to clarify that the governing body of a charter holder cannot delegate its powers and duties to operate the charter school. There have been incidents in the past in which attempts to avoid responsibility for malfeasance were made by claiming that such acts were performed by someone else to whom the powers and duties were delegated. ATPE also recommended that §100.1101(e) be retained. It is needed to prevent governing bodies from avoiding responsibility for decisions affecting the charter school. Certain duties and powers should be retained by the governing body and should not be performed by any other entity.

Agency Response. The agency agrees, in part, with the comments. Proposed §100.1101(e) has been deleted. In its place, proposed §100.1033(c)(6) has been modified to add subparagraphs (C) and (D) dealing with the commissioner's criteria for approving delegation amendments. The functions previously listed in proposed §100.1101(e)(2), (5), and (6) were made delegable to the chief executive officer and are delineated in adopted §100.1033(c)(6)(D). The remaining functions listed in proposed §100.1101(e), now reflected in adopted §100.1033(c)(6)(C), will require a specific waiver before a delegation amendment is granted. In addition, the function listed in proposed §100.1101(e)(4) has been clarified in adopted §100.1033(c)(6)(C)(iii) to provide that the final authority of the governing body to direct the disposition and safekeeping of public records does not prevent the governing body from delegating the maintenance of public records subject to the final authority of the governing body to direct their disposition and safekeeping.

Comment. TCTA commented that it supports in particular proposed §100.1101(e)(1), regarding an employee's constitutional right to be heard by the highest authority in the employee relationship, the charter holder governing body.

Agency Response. No response required; however, this provision is now addressed in §100.1033(c)(6)(C).

Comment. ACE and HCJJCS suggested that the inclusion of the function listed in §100.1011 (19)(J) in the definition of central administration officer is inconsistent with the non-delegable duties listed in §100.1101(e)(2).

Agency Response. The agency agrees with the comment. Proposed §100.1101(e) has been deleted, and proposed §100.1033(c)(6) has been modified to add subparagraphs (C) and (D) dealing with the commissioner's criteria for approving delegation amendments. The function listed in proposed §100.1011(19)(J) was removed and is now addressed in adopted §100.1033(c)(6)(D).

Comment. ACE and HCJJCS suggested that §100.1101(e)(4) be clarified to provide that the final authority of the governing body to direct the disposition and safekeeping of public records does not prevent the governing body from delegating the daily maintenance of public records subject to the final authority of the governing body to direct their disposition and safekeeping.

Agency Response. The agency agrees with the comment. Proposed §100.1101(e) has been deleted, and proposed §100.1033(c)(6) has been modified to add subparagraphs (C) and (D) dealing with the commissioner's criteria for approving delegation amendments. Adopted §100.1033(c)(6)(C)(iii) will clarify that the final authority of the governing body to direct the disposition and safekeeping of public records does not prevent the governing body from delegating the daily maintenance of public records subject to the final authority of the governing body to direct their disposition and safekeeping.

Comment. An individual suggested that the functions listed in §100.1101(e)(2), (e)(5), and (e)(6) be made delegable to the chief executive officer.

Agency Response. The agency agrees with the comment. Proposed §100.1101(e) has been deleted, and proposed §100.1033(c)(6) has been modified to add subparagraphs (C) and (D) dealing with the commissioner's criteria for approving delegation amendments. In the adopted §100.1033(c)(6)(D), the functions listed in proposed §100.1101(e)(2), (e)(5), and (e)(6) will be made delegable to the chief executive officer.

Proposed §100.1111. Applicability of Nepotism Provisions; Exception for Acceptable Performance.

Comment. ATPE expressed strong support for the nepotism provisions in House Bill 6 and these rules.

Agency Response. No response required.

Comment. ACE and HCJJCS commented that the proposed rules do not define the time frame within which a charter holder must comply with applicable nepotism provisions. A charter holder should not be required to institute required governance reforms until 180 days from the date of the event giving rise to the requirement for reform.

Agency Response. The agency agrees, in part, with the comment. Proposed §100.1111 has been modified to add a new subsection (g) dealing with the time frame within which a charter holder must comply with applicable nepotism provisions after ratings are assigned each year. However, the agency disagrees with the suggestion that a charter holder should not be required to institute required governance reforms until 180 days from the date of the event giving rise to the requirement for reform.

A charter holder is given the data on which its schools' ratings will be based well in advance of the ratings release date each year, and the standards that the agency will apply to these data are published in advance. The Accountability Manual for the coming year's ratings is readily available to the charter holder on the agency's web site. For these reasons, rating appeals may be and frequently are filed well in advance of the release date. Indeed, the objective of the charter holder is typically to appeal the rating before the official ratings release date.

A charter holder may file a ratings appeal as soon as its charter school receives its accountability data each year. The agency makes every effort to resolve ratings appeals before the release date (though resolution is not guaranteed). For the 2002 ratings year, accountability data will be provided in late June, ratings will be released on August 1, and the deadline for appeals is August 14.

When a ratings appeal is received, TEA staff examines the data used to determine a rating under a limited set of circumstances. An appeal is not a data correction opportunity, but must be based upon a data or calculation error attributable to the Texas Education Agency, a regional education service center, or the test contractor for the student assessment program. Problems due to charter holder errors in PEIMS data submissions or on TAAS answer sheets may be considered on a case-by-case basis, but the charter holder should bear in mind that such data reporting errors can result in a suspended rating for data-quality issues. Under proposed §100.1111, a suspended rating for data- quality issues is an event giving rise to the requirement for reform.

If a ratings appeal is based on a data or calculation error attributable to the Texas Education Agency, a regional education service center, or the test contractor for the student assessment program, the charter holder should file the appeal at the time it initially receives the data that are the subject of the appeal. Where possible, the charter holder should seek to resolve the appeal before the August release date.

In all cases, the charter holder must make contingency plans for an event giving rise to the requirement for reform. It is reasonable to expect that a charter holder intending to appeal its accountability data should plan for the contingency that its appeal will be denied. Indeed, given the nature of a nepotism exception based on annual ratings, no charter holder should allow family ties within its organizational and governance structures without carefully planning for the contingency that, in the near future, it may be required to replace certain of those family members. It is the responsibility of the charter holder, not the agency, to take steps now to insure that such an ever-present contingency cannot seriously disrupt its governance or operations.

The agency cannot adopt a rule that would encourage or reward delay in the filing of ratings appeals. Moreover, certain ratings (such as a suspended rating for data quality issues) are not subject to the ratings appeal process, and can be assigned or removed during the school year. Thus, the pendency of a ratings appeal generally should not delay the date on which the charter holder must implement required reforms. However, if an appeal is filed as soon as the basis for the appeal is known- or with the exercise of reasonable diligence should have been discovered- then a delay while the appeal is resolved is reasonable.

Comment. ATPE expressed concern at the prospect that charters could be exempted from the nepotism provisions if TEA does not issue accreditation ratings to charters for any reason. ATPE requested clarifications and/or examples of when the substantive ratings and consecutive ratings would not be in effect and/or assigned.

Agency Response. The agency disagrees with the comment. Proposed §100.1111(d) provides as follows: "For example, if the TEA does not assign accreditation ratings to charter schools for the 2003 school year . . . , then ratings for the 2002 and 2004 school years are consecutive within the meaning of this section." The TAAS test will not be administered in the 2003 school year; instead, the TAKS test will be given. Final decisions have not been announced concerning the 2003 accountability ratings.

Proposed §100.1111(d) would, under no circumstances, result in exempting a charter holder from the nepotism provisions of the proposed rule. If it is triggered in any given year, it merely has the effect of lengthening the period, from three calendar years to four, over which a charter holder's ratings must be examined in order to determine the applicability of the exception provided by §100.1111(e).

Comment. ATPE recommended that a sunset provision be added to §100.1111(d) instead of leaving it in effect indefinitely, since it was included to address the possibility that standard accreditation ratings will not be issued to districts or charter schools for the first year the TAKS is administered. ACE supported the idea of a sunset provision.

Agency Response. The agency disagrees with the comment. If proposed §100.1111(d) is triggered at all for the 2003 school year, then it will be needed for at least two years beyond 2003. Without it, predicting agency decisions respecting the applicability of subsection (e) to some charter holders may be difficult.

Comment. An individual commented that the phrase, "comply with subsection (d)," in proposed §100.1111(b), (c), and (c)(3), appears to be incorrect, and suggested that the phrase be changed to read, "comply with subsection (e)."

Agency Response. The agency agrees with the comment. The phrase, "comply with subsection (d)," in proposed §100.1111(b), (c), and (c)(3), has been modified to read, "comply with subsection (e)."

Proposed §100.1113. Relationships By Consanguinity or By Affinity.

Comment. ACE and HCJJCS suggested that §100.1113 summarize Government Code, §§573.021- 573.025, instead of merely referring to those sections. These provisions are among the most frequently consulted sections of the nepotism law. Charter holders may not have convenient access to the Government Code, and including the necessary information in the rules applicable to charter schools may enhance compliance with the nepotism law.

Agency Response. The agency agrees with the comment. Proposed §100.1113 has been modified to summarize Government Code, §§573.021-573.025, instead of merely referring to those sections.

Proposed §100.1114. Nepotism Prohibitions.

Comment. ATPE recommended that the rule include a prohibition related to influencing an employee of a management company who has contracted to provide services to that charter.

Agency Response. The agency disagrees with the comment. Government Code, §§573.041 (Prohibition Applicable to Public Official), 573.042 (Prohibition Applicable to Candidate), and 573.044 (Prohibition Applicable to Trading), provide for the exceptions listed in proposed §100.1114. TEC, §12.1055 (Applicability of Nepotism Laws), does not support a rule imposing a prohibition related to influencing an employee of a management company who has contracted to provide services to that charter.

Proposed §100.1115. Nepotism Exceptions.

Comment. ATPE suggested that §100.1115(a) should not exclude bus drivers and substitute teachers from the nepotism law. Bus drivers and substitute teachers are still employees of the charter school and should not be exempt from nepotism laws since they can still benefit from increased benefits, perks, and privileges as a result of their relationship with a person who makes employment decisions. There is no prohibition against long-term substitutes in charter schools, so this could provide a loophole for teachers to circumvent the nepotism laws. ATPE also expressed concern that §100.1115 (b) allows relatives of potential charter officials to gain employment at the charter school without violating nepotism provisions, if their employment begins a minimum number of days prior to the charter official accepting that position. This lends itself to abuse since a relative may be aware that they will be taking an official position with the charter school with plenty of time to influence the hiring of a relative prior to ascending to that official position. ATPE recommends deleting this section of the rule since there is no enforcement mechanism in place. A person who serves a charter school in an official capacity should not have a relative in their employment at any time during their tenure in that capacity. ATPE also recommended a provision to prohibit charter officials from discussing any aspect of a relative's employment with any person who makes employment decisions regarding the relative.

Agency Response. The agency disagrees with the comment. Government Code, §573.061 (General Exceptions), and §573.062 (Continuous Employment), provide for the exceptions listed in proposed §100.1115(a) and (b).

Proposed §100.1116. Enforcement of Nepotism Prohibitions.

Comment. ATPE recommended revising §100.1116(c)(2) to provide that a charter holder's failure to remove a person in violation of the nepotism laws constitutes a material violation of the charter that could result in adverse action being taken by the commissioner.

Agency Response. The agency disagrees with the comment. Proposed §100.1116(a) (relating to Removal by charter holder) addresses the removal of a person who violates nepotism prohibitions and exceptions. Section 100.1116 also establishes that failure to comply is a material charter violation.

Comment. ACE and HCJJCS stated that the proposed rules do not define the time frame within which a charter holder must comply with applicable nepotism provisions. A charter holder should not be required to institute required governance reforms until 180 days from the date of the event giving rise to the requirement for reform.

Agency Response. The agency agrees, in part, with the comment. See the agency's response to a similar comment on proposed §100.1111. In response to a comment on proposed §100.1116, §100.1111 has been modified to add a new subsection (g) dealing with the time frame within which a charter holder must comply with applicable nepotism provisions after ratings are assigned each year.

Comment. ACE requested that the proposed rules clarify any change in the governance regime of a charter school required by this subchapter is not effective until the deadline for appeal of the determination triggering the required change has expired.

Agency Response. The agency agrees, in part, with the comment. See the agency's response to a similar comment on proposed §100.1111. In response to a comment on proposed §100.1116, §100.1111 has been modified to add a new subsection (g) dealing with the time frame within which a charter holder must comply with applicable nepotism provisions after ratings are assigned each year.

Proposed §100.1131. Conflicts of Interest and Board Member Compensation; Exception.

Comment. ACE and HCJJCS commented that proposed §100.1131(b)(2) and (7) conflict with Local Government Code, Chapter 171. Under Chapter 171, a local public official is permitted to have a substantial interest in a business entity that sells goods or services to the local governmental entity. Chapter 171 is procedural only, and requires the local public official merely to file an affidavit and be recused from taking official action respecting such transactions. Proposed §100.1131(b)(2) and (7) prohibit the local public official from having a substantial interest in a business entity that sells goods or services to charter school or the charter holder. Such a conflict of interest should be subject to the procedural restrictions imposed by Chapter 171, but should not be prohibited by the rule.

Agency Response. The agency agrees with the comment. Proposed §100.1131(b)(2) and (7) has been deleted.

Comment. ACE and HCJJCS commented that the word "remuneration" in §100.1131(b) and (b)(8) is vague and ambiguous.

Agency Response. The agency disagrees with the comment. The word "remuneration" is modified by its context, which gives it sufficiently specific meaning without unduly restricting the intended scope of the proposed rule. First, the word is not used alone but appears only as part of the phrase, "compensation or remuneration." Second, the phrase "compensation or remuneration" appears in §100.1131(b)(8) as an inclusive closing provision in a list of seven specific examples of "compensation or remuneration." Under standard principles of construction (applicable both to statutes and rules), the phrase as it is used in §100.1131(b)(8) applies to circumstances that are similar in material respects to those set forth in §100.1131(b)(1)-(7), although not specifically listed among those subsections.

Comment. ACE and HCJJCS commented that proposed §100.1131(f)(1) is vague and ambiguous, and requested that it be clarified to permit an employee of the charter school to serve as a member of the governing body of the charter holder even if the person is employed both by the charter holder and by the charter school.

Agency Response. The agency agrees with the comment. In response to another comment, proposed §100.1011(3) has been modified to add a new subparagraph (A) clarifying that the phrase, "employee of a charter school" as used in this subchapter, means a person paid to work at a charter school under the direction and control of an officer of a charter school, regardless of whether the person is on the payroll of the charter holder, a charter school operated by the charter holder, a management company providing management services to the charter holder, or any other person. In response to the comment, proposed §100.1011(3) has been modified to add a new subparagraph (B) clarifying that the phrase, "employee of a charter holder," as used in this subchapter, means a charter holder employee who engages in no charter school activity for the charter holder and is not an officer of a charter school.

Comment. ACE and HCJJCS commented that the word "committee" in §100.1131(f)(3) is vague and ambiguous, and requested that it be clarified by adding the words "with final decision making authority."

Agency Response. The agency disagrees with the comment. TEC, §12.1055 (Applicability of Nepotism Laws), makes Government Code, Chapter 573, apply to charter holders. That section provides at subsection (b), "persons defined under Sections 573.021-573.025, Government Code, shall not constitute a quorum of the governing body or any committee of the governing body."

Comment. ACE and HCJJCS commented that proposed §100.1131 does not define the time frame within which a charter holder must comply with applicable conflict of interest provisions. A charter holder should not be required to institute required governance reforms until 180 days from the date of the event giving rise to the requirement for reform.

Agency Response. The agency agrees, in part, with the comment. See the agency's response to a similar comment on proposed §100.1111. Proposed §100.1131 has been modified to add a new subsection (h) dealing with the time frame within which a charter holder must comply with applicable conflict of interest provisions after ratings are assigned each year.

Comment. ACE requested that proposed §100.1131 be modified to clarify that any change in the governance regime of an open-enrollment charter school required by this subchapter is not effective until the deadline for appeal of the determination triggering the required change has expired.

Agency Response. The agency agrees, in part, with the comment. See the agency's response to a similar comment on proposed §100.1111. Modifications related to this comment have been made to §100.1131(h).

Comment. An individual commented that the phrase, "comply with subsection (d)," in proposed §100.1131(c) and (d), appears to be incorrect, and suggested that the phrase be changed to read, "comply with subsection (f)." In addition, in subsection (f), the phrase, "Notwithstanding subsection (c)" should be changed to read, "Notwithstanding subsection (b)."

Agency Response. The agency agrees with the comment. The phrase, "comply with subsection (e)," in proposed §100.1131(c) and (d), has been modified to read, "comply with subsection (f)." In addition, in subsection (f), the phrase, "Notwithstanding subsection (c)" has been changed to read, "Notwithstanding subsection (b)."

Proposed §100.1132. General Conflict of Interest Provisions.

Comment. ACE and HCJJCS commented that the term "local public official" in §100.1132(a)(1) is vague and ambiguous, and requested that it be clarified.

Agency Response. The agency agrees with the comment. Proposed §100.1132(a)(1) has been modified to delete the phrase, "who exercises responsibilities beyond those that are advisory in nature."

Proposed §100.1133. Conflicts Requiring Affidavit and Abstention From Voting.

Comment. ATPE suggested the conflict of interest provision in this section should be revised to prohibit a majority of the board members who share a conflict of interest from still participating in discussions and voting on the matter. This is inappropriate for charter governing board members, even though it is permitted for school district board of trustee members, because charter governing board members are appointed and not elected. Since charter board members are not elected and do not face approval from an outside, objective body of people, it is much easier and much more conceivable that a majority of the board could be comprised of individuals that share the same substantial interest in a business or property. This presents great potential for abuse.

Agency Response. The agency disagrees with the comment. TEC, §12.1054 (Applicability of Laws Relating to Conflict of Interest), makes Local Government Code, Chapter 171, apply to charter holders. That section provides at subsection (b) that: "a requirement in a law listed in this section that applies to … the board of trustees of a school district applies to … the governing body of a charter holder, or the governing body of an open-enrollment charter school." Local Government Code, §171.004 (Affidavit and Abstention From Voting Required), provides at subsection (c) for the exception provided by proposed §100.1133(c).

Proposed §100.1134. Conflict Requiring Separate Vote on Budget.

Comment. ATPE suggested the conflict of interest provision in this section should be revised to prohibit a majority of the board members who share a conflict of interest from still participating in discussions and voting on the matter. This is inappropriate for charter governing board members, even though it is permitted for school district board of trustee members, because charter governing board members are appointed and not elected. Since charter board members are not elected and do not face approval from an outside, objective body of people, it is much easier and much more conceivable that a majority of the board could be comprised of individuals that share the same substantial interest in a business or property. This presents great potential for abuse.

Agency Response. The agency disagrees with the comment. For further response, see response to a similar comment from ATPE concerning proposed §100.1133 (relating to Conflicts Requiring Affidavit and Abstention From Voting).

Proposed §100.1151. Criminal History; Restrictions on Serving.

Comment. The law firm of Donald W. Hicks, Sr., P.C., Attorneys and Counselors at Law, on behalf of its client, Texans Can!, on behalf of its open-enrollment charter schools, commented as follows. Proposed §100.1151 exceeds the language of TEC, §12.120(a), by enlarging the categories of individuals who are restricted from "serving." As proposed, an employee or officer of the governing body of a charter school, who has been convicted of a felony or a misdemeanor involving moral turpitude, is restricted from serving. The inclusion of the categories of an "employee" or an "officer" of the governing body of a charter school, is inconsistent with, and exceeds the language of the statute. TEC, §12.120(a), addresses an officer or employee of a charter school, not of the governing body of a charter school. The proposed rule is in violation of the law of the State of Texas. The law firm of Donald W. Hicks, Sr., P.C., requested that proposed §100.1151 be redrafted consistent with TEC, §12.120.

Agency Response. The agency agrees, in part, with the comment. See response to subsequent comment from Bracewell & Patterson, L.L.P.

Comment. Five representatives of Texans Can! suggested modifying the language of proposed subsections (a), (h), and (j)(2) of §100.1151 to more accurately reflect the language in TEC, §12.120(a). Texans Can! commented that subsections (a), (h), and (j)(2) of §100.1151 are confusing in that they seem to say that "a person may not serve as an employee ... of the governing body of a charter school ... if the person has been convicted of: …." TEC, §12.120(a), restricts the service of "a member of the governing body of a charter holder, ... a member of the governing body of an open-enrollment charter school, or ... an officer or employee of an open-enrollment charter school" without restriction on "an employee of the governing body of a charter school." These representatives of Texans Can! stated no objection to proposed subsections (a), (h), and (j)(2) of §100.1151 if the words "an employee" are eliminated to make the statement more consistent with the wording of TEC, §12.120(a).

Agency Response. The agency agrees, in part, with the comment. See response to subsequent comment from Bracewell & Patterson, L.L.P.

Comment. ACE commented that the rules should not add a new restriction on service. House Bill 6 specifically says certain persons should not be permitted to serve as an employee of a charter school, but leaves decisions pertaining to employees of a charter holder to the discretion of the governing board of the charter holder. The rule language extending statutory prohibitions to cover employees of the charter holder should be eliminated.

Agency Response. The agency agrees, in part, with the comment. See response to subsequent comment from Bracewell & Patterson, L.L.P.

Comment. The law firm of Bracewell & Patterson, L.L.P., Attorneys and Counselors at Law, on behalf of its client, Texans Can!, on behalf of its open-enrollment charter schools, commented as follows. In promulgating proposed §100.1151 to implement TEC, §12.120, the commissioner expanded the categories of individuals who are restricted from serving beyond those established by the Legislature, and expanded the categories of offenses targeted beyond those established by the Legislature. Bracewell & Patterson objected to the following phrases in proposed §100.1151: " as an employee, an officer, or a member of the governing body of a charter school" in subsection (a); "or any felony" in subsection (b); "charter holder" and "in any capacity" in subsection (b)(1); and "employee, an officer, or a member of the governing body of a charter school" in subsection (h).

Proposed §100.1151(a) and (h) appear to include the following categories of individuals who are not included in TEC, §12.120(a): employees of governing bodies of charter schools and officers of governing bodies who are not also members of governing bodies of charter schools. Proposed §100.1151(a)(1) expands the kinds of convictions covered by TEC, §12.120(a)(1). Rather than covering only felonies or misdemeanors involving moral turpitude, as the statute states, the proposed rule covers misdemeanors involving moral turpitude and any felonies. Finally, proposed §100.1151(b)(1) exceeds TEC, §22.083(b), by requiring criminal history checks of a person whom the charter holder intends to employ in any capacity. TEC, §22.083(b), applies only to a person who is employed with state funds at the open-enrollment charter school. Without revision, proposed §100.1151(a), (b)(1), and (h) would require charter holders, most of whom are non-profit corporations, and who may employ many other employees who have no relationship to a charter school, to terminate those employees immediately if any of those employees have been convicted of a felony or a misdemeanor involving moral turpitude. These employees may have no relationship to the charter school, and may not be paid with state funds, yet because they are employees of the charter holder they would be subject to the proposed rules.

Agency Response. The agency agrees, in part, with the comment about proposed §100.1151(a) and (h), and has made a corresponding change to proposed subsection (j) as well. As used in proposed §100.1151(a), (h), and (j), the phrase, "as an employee, an officer, or a member of the governing body of a charter school, or as a member of the governing body of a charter holder" was intended to have the same meaning as the phrase, "as a member of the governing body of a charter holder, as a member of the governing body of a charter school, or as an officer or employee of a charter school." By reordering the words in the phrase, the agency appears to have created confusion. Accordingly, proposed §100.1151 has been modified to replace the phrase, "as an employee, an officer, or a member of the governing body of a charter school, or as a member of the governing body of a charter holder" with the phrase, "as a member of the governing body of a charter holder, as a member of the governing body of a charter school, or as an officer or employee of a charter school," in §100.1151(a), (h), and (j).

A charter holder engaged in non-charter activities may have administrators, employees, and contractors who do not perform, and are not charged with performing, any charter school functions. Such staff engaged in purely non- charter activities should be free from the requirements of House Bill 6 relating to the employees and officers of a charter school.

It is important to note that the definition of an "officer of a charter school," as proposed, does include the top administrators of the charter holder, even one with significant non-charter activities. For example, it is impossible for the chief executive officer or chief financial officer of a charter holder to fall outside the definitions provided by proposed §100.1011(18) and (21), respectively. Similarly, any employee or contractor of the charter holder who is charged with performing, or does perform, any of the functions listed in proposed §100.1011(19) is a central administration officer. These administrators are at the apex of an organization that has taken on the responsibility of operating a public school using taxpayer funds.

Also, several relevant changes to the proposed rules have been made in response to other comments. Proposed §100.1011(3) has been modified to add a new subparagraph (A) clarifying that the phrase, "employee of a charter school" as used in this subchapter, means a person paid to work at a charter school under the direction and control of an officer of a charter school, regardless of whether the person is on the payroll of the charter holder, a charter school operated by the charter holder, a management company providing management services to the charter holder, or any other person. Proposed §100.1011(1) has been revised to delete the phrase "officer of a charter school." Proposed §100.1011(17) has been revised to clarify that a charter holder employee or independent contractor engaged solely in non-charter activities for the charter holder is not an "officer of a charter school" under these rules.

Secondly, the agency agrees, in part, with the comment about proposed §100.1151(b)(1). TEC, §22.083, provides in subsection (b) that an open-enrollment charter school shall obtain from any law enforcement or criminal justice agency all criminal history record information that relates to: (1) a person whom the school intends to employ in any capacity; or (2) a person who has indicated, in writing, an intention to serve as a volunteer with the school.

As noted earlier in response to another comment, a "charter school" is not a legal entity that can enter into contracts, sue and be sued, or act as an employer. Rather, a charter school can only be operated by an "eligible entity" under TEC, §12.101. A charter holder is the only legal entity that can act as an employer on behalf of a charter school. In some cases, the charter holder has seen fit to set up subsidiary corporations for the specific purpose of operating the charter holder's charter schools. But such arrangements do not excuse the charter holder from TEC, §22.083(b). Since the employer specified by the statute cannot exist, the term is ambiguous and in need of interpretation by agency rulemaking. However, it was not the intention of proposed §100.1151(b) to capture employees who do not perform, and are not charged with performing, any charter school functions. Employees engaged in purely non-charter activities should be free from the requirements of House Bill 6 relating to the employees of a "charter school." Accordingly, proposed §100.1151(b) has been modified to read, "an employee or a person whom the charter school intends to employ in any capacity, or whom the charter holder intends to employ in any capacity relating to its charter school activities."

Finally, the agency disagrees with the comment about proposed §100.1151(a)(1). Proposed §100.1151(a)(1) does not expand on the kinds of convictions covered by TEC, §12.120(a)(1). The commenter suggests that, rather than covering "only felonies or misdemeanors involving moral turpitude, as the statute states," the proposed rule improperly covers a person convicted of "any felonies." The comment misstates the language of TEC, §12.120. Section 100.1151(a)(1) on its face applies to a person who "has been convicted of a felony or a misdemeanor involving moral turpitude." In the language used by the commenter, it is not entirely clear whether the phrase "involving moral turpitude" modifies only "misdemeanors" or modifies both "misdemeanors" and "felonies." In the language of TEC, §12.120, by contrast, the phrase "involving moral turpitude" modifies only "misdemeanors." The language in proposed §100.1151(a)(1) is intended to make clear that TEC, §12.120(a)(1), applies to a person convicted of any felony.

Comment. ACE and HCJJCS questions the cost to charter schools of conducting criminal history checks three times in the first year of service. An individual questions the cost to charter schools of conducting criminal history checks twice per year, and suggests changing the rule to require such checks only annually.

Agency Response. The agency agrees, in part, with the comment. Although the agency agrees to make the suggested change, it does so with some trepidation. Under TEC, §21.003 (Certification Required), a school district may not employ a person as an educator unless the person holds an appropriate certificate or permit issued as provided by TEC, Chapter 21, Subchapter B. Consequently, the governing body of a school district can generally rely on the State Board for Educator Certification (SBEC) for screening its population of educators under TEC, §22.082 (Access to Criminal History Records by State Board for Educator Certification). This provision authorizes SBEC to obtain criminal histories on all certified educators in Texas, but no similar law authorizes TEA or another state agency to obtain criminal histories with respect to charter holder employees. Thus, the exclusive responsibility for protecting the welfare of the students enrolled in a charter school, and for protecting taxpayers from financial improprieties relating to state funds and public property, lies with the charter holder. This situation has no parallel among Texas public schools. Further, TEC, §22.083 (Access to Criminal History Records by Local and Regional Education Authorities), does not merely authorize a charter holder to obtain criminal histories on its educators. Unique among such provisions, TEC, §22.083, imposes a statutory duty to do so. Given these circumstances, the agency urges the charter holder to seek legal counsel before determining a prudent local policy as to the frequency with which it will run criminal histories. Proposed §100.1151(b) has been modified to read, "Before the person begins service, and annually thereafter;" and proposed §100.1035(b)(5) has been modified to read, "a complete criminal history record for the individual, issued by the Texas Department of Public Safety within one year of the date of the compliance record…"

Comment. ACE and HCJJCS commented that the term "volunteer" in proposed §100.1151(b)(3) is vague and ambiguous, and should be clarified. Further, the definition of a volunteer should include only those persons who perform duties on school property or at another location when (not just where) students are present.

Agency Response. The agency disagrees with the comment. Proposed §100.1151(b)(3) may be further defined by local charter holder policy. TEC, §22.083, imposes a statutory duty on the charter holder to run criminal history checks on "a person who has indicated, in writing, an intention to serve as a volunteer with" the charter school. It does not define the circumstances under which the charter holder must require written statements of such an intention. This is a matter for local discretion, since what is reasonable will depend greatly on the nature of the program operated by the charter holder. The proposed subsection does provide guidance to the charter holder in exercising its local discretion. A primary consideration should be the extent to which access to students is given to the volunteer. The agency urges the charter holder to seek legal counsel before determining a prudent local policy on criminal history checks for school volunteers. For further response, see earlier response to a similar comment, "ACE and HCJJCS questions the cost to charter schools of conducting criminal history checks three times in the first year of service."

Comment. ATPE expressed concern about allowing a person convicted of a felony or a misdemeanor involving moral turpitude to drive a bus or be an aide on a bus, even if the governing body of the charter approves it. ATPD recommended deleting §100.1151(c)(2) and (4) so that a governing body may not vote to allow a person failing the criminal history check to be employed at the charter school. Another possible remedy is to set a threshold for type of crime committed and amount of time elapsed since the conviction in rule that provides guidelines for when a governing body could vote to grant employment to such a person. If the latter option is used, ATPE recommended requiring commissioner approval before the person is finally offered employment.

Agency Response. The agency disagrees with the comment. Proposed §100.1151(c)(2) and (4) simply reiterate similar provisions found in TEC, §22.084 (Access to Criminal History Records of School Bus Drivers, Bus Monitors, and Bus Aides).

Comment. ATPE suggested that proposed §100.1151(j) be revised, and expressed concern about allowing a person to continue employment beyond September 1, 2001, after failing a criminal history check, if their employment contract was executed prior to that date and has not been renewed or altered since that date. A person could have been given a contract extending three years or more, and this would allow them to remain employed by the charter for years after failing the criminal history check. This is not in students' safety interests. A person who fails to pass the criminal history check should not be allowed to continue employment around children, regardless of an employment or other written contract. ATPE recommended giving the charter school the option of reassigning that individual to a position in which they have no contact with children if the charter holder is concerned about contractual obligations.

Agency Response. The agency agrees, in part, with the comment. Proposed §100.1151(j)(2) has been modified to add a new subparagraph (C), as follows: "the person does not perform, and is not charged with performing, any charter school functions."

Proposed §100.1153. Substantial Interest in Management Company; Restrictions on Serving.

Comment. ATPE recommended that any person with substantial interest in a management company should not be allowed to provide any services to a charter, as provided in proposed §100.1153(b), especially those that include functioning as superintendent, principal, or business manager. ATPE recommended that §100.1153(b) be revised to prohibit this arrangement from occurring and specify that failure to remove such a person constitutes a material violation of the charter.

Agency Response. The agency disagrees with the comment. The definition of "management services" provided by TEC, §12.1012(5), includes some of the functions carried out by a principal, director, or other chief operating officer of a charter school; by an assistant principal or assistant director of a charter school; or by a person charged with managing the finances of a charter school. This statutory ambiguity is resolved in the proposed rule by providing that a management company may provide services that qualify it as an "officer," so long as it complies with certain restrictions imposed or implied by other provisions of TEC, Chapter 12.

Comment. An individual suggested that the rules be examined to ensure that somewhere in the provision a rule should provide that the administrator/principal of the school, even though an employee of the management company, has a higher duty/responsibility/loyalty to the State of Texas and/or the charter.

Agency Response. The agency disagrees with the comment. There is an inherent conflict between the duty of loyalty owed by a management company employee to its employer and the duty of loyalty owed by a charter school officer to the charter holder. Many of the provisions of House Bill 6 and the proposed rules are designed to manage this conflict of interest, in the public interest. However, no set of rules can eliminate the conflicts of interest inherent in such an arrangement. As interpreted by these rules, House Bill 6 does permit a management company employee to perform some functions that make him/her officers of the charter school. However, as interpreted by these rules, House Bill 6 imposes significant restrictions and duties upon both the management company and the charter holder entering into such arrangements. For further response, see earlier response to a similar comment, "ATPE recommended that any person with substantial interest in a management company should not be allowed to provide any services to a charter."

Comments. The law firm of Donald W. Hicks, Sr., P.C., Attorneys and Counselors at Law, on behalf of its client, Texans Can!, on behalf of its open-enrollment charter schools, commented as follows. Proposed §100.1153 contains the same inconsistent and excessive language as proposed §100.1151. Again, TEC, §12.120(a)(4), does not include the categories of "employee" or "officer" of the governing body of a charter school. The law firm of Donald W. Hicks, Sr., P.C., requests that proposed §100.1153 be redrafted consistent with TEC, §12.120.

Agency Response. The agency agrees, in part, with the comment. See response to subsequent comment from Bracewell & Patterson, L.L.P.

Comments. Five representatives of Texans Can! suggested modifying the language of proposed §100.1153 to more accurately reflect the language in TEC, §12.120(a).

Agency Response. The agency agrees, in part, with the comment. See response to subsequent comment from Bracewell & Patterson, L.L.P.

Comment. ACE commented that the rules should not add a new restriction on service. House Bill 6 specifically says certain persons should not be permitted to serve as an employee of a charter school, but leaves decisions pertaining to employees of a charter holder to the discretion of the governing board of the charter holder. The rule language extending statutory prohibitions to cover employees of the charter holder should be eliminated.

Agency Response. The agency agrees, in part, with the comment. See response to subsequent comment from Bracewell & Patterson, L.L.P.

Comments: The law firm of Bracewell & Patterson, L.L.P., Attorneys and Counselors at Law, on behalf of its client, Texans Can!, on behalf of its open-enrollment charter schools, commented as follows. In promulgating proposed §100.1151 to implement TEC, §12.120, the commissioner expanded the categories of individuals who are restricted from serving beyond those established by the Legislature, and expanded the categories of offenses targeted beyond those established by the Legislature. Bracewell & Patterson objected to the phrase, "an employee, an officer, or a member of the governing body of a charter school" in proposed §100.1153(a).

Proposed §100.1153(a) appears to include the following categories of individuals who are not included in TEC, §12.120(a): employees of governing bodies of charter schools and officers of governing bodies who are not also members of governing bodies of charter schools. Without revision, proposed §100.1153 would require charter holders, most of whom are non-profit corporations, and who may employ many other employees who have no relationship to a charter school, to terminate those employees immediately if any of those employees have a substantial interest in a management company. These employees may have no relationship to the charter school, and may not be paid with state funds, yet because they are employees of the charter holder they would be subject to the proposed rules.

Agency Response. The agency agrees, in part, with the comment. As used in proposed §100.1153(a) the phrase, "as an employee, an officer, or a member of the governing body of a charter school, or as a member of the governing body of a charter holder" was intended to have the same meaning as the phrase, "as a member of the governing body of a charter holder, as a member of the governing body of a charter school, or as an officer or employee of a charter school." By reordering the words in the phrase, the agency appears to have created confusion. Accordingly, proposed §100.1153(a), (d), and (e)(2) has been modified to replace the phrase, "as an employee, an officer, or a member of the governing body of a charter school, or as a member of the governing body of a charter holder" with the phrase, "as a member of the governing body of a charter holder, as a member of the governing body of a charter school, or as an officer or employee of a charter school."

A charter holder engaged in non-charter activities may have administrators, employees, and contractors who do not perform, and are not charged with performing, any charter school functions. Such staff engaged in purely non- charter activities should be free from the requirements of House Bill 6 relating to the employees and officers of a charter school. Subsection (e)(2) has been modified to add a new subparagraph (2), as follows: "the person does not perform, and is not charged with performing, any charter school functions.

It is important to note that the definition of an "officer of a charter school," as proposed, does include the top administrators of the charter holder, even one with significant non-charter activities. For example, it is impossible for the chief executive officer or chief financial officer of a charter holder to fall outside the definitions provided by proposed §100.1011(18) and (21), respectively (adopted as §100.1011(17) and (20), respectively). Similarly, any employee or contractor of the charter holder who is charged with performing, or does perform, any of the functions listed in proposed §100.1011(19), adopted as §100.1011(18), is a central administration officer. These administrators are at the apex of an organization that has taken on the responsibility of operating a public school using taxpayer funds.

Also, several relevant changes to the proposed rules will be made in response to other comments. Proposed §100.1011(3) will be modified to add a new subparagraph (A) clarifying that the phrase, "employee of a charter school" as used in this subchapter, means a person paid to work at a charter school under the direction and control of an officer of a charter school, regardless of whether the person is on the payroll of the charter holder, a charter school operated by the charter holder, a management company providing management services to the charter holder, or any other person. Proposed §100.1011(1) has been revised to delete the phrase "officer of a charter school." Proposed §100.1011(17), adopted as §100.1011(16), has been revised to clarify that a charter holder employee or independent contractor engaged solely in non-charter activities for the charter holder is not an "officer of a charter school" under these rules.

Proposed §100.1155. Procedures for Prohibiting a Management Contract.

Comment. TASB urged the commissioner to narrow the definition of management contract so that all sorts of consulting contracts are not subject to TEA review. As it is written, TEA would end up reviewing all consulting contracts between an open-enrollment charter school and a management company. TASB expressed concern that TEA may not have enough staff and time to review all such contracts.

Agency Response. The agency disagrees with the comment. In principle, the agency agrees with TASB that proposed §100.1155 may need to narrow the types of contracts that should be submitted for review under that section. The definitions of the phrases, "management services" and "management company," may also need to be refined. However, until the commissioner has had opportunity to review time frames associated with various types of proposed management contracts, it would not be prudent to adopt review criteria that might, in some cases, arbitrarily restrict the agency's deliberative process.

Comment. ATPE recommended revising proposed §100.1155 (c)(2) and (3), to state that the commissioner must approve a management contact prior to any services being delivered to a charter school under that contract rather than allowing management services to begin after 30 days of submitting the contract to TEA if there has been no action within that time period on the part of the commissioner.

Agency Response. The agency disagrees with the comment. The great majority of contracts affected by proposed §100.1155 were executed prior to September 1, 2001; management services are currently being performed under them. If the agency has information on which to base an action under this section, then 30 days is sufficient time to initiate an action. In addition, proposed §100.1155(c)(3) provides that absence of action by the commissioner does not constitute a finding of compliance nor prevent the commissioner from acting at a later time.

Comment. ACE and HCJJCS suggested that if a charter holder is prohibited by law or rule from complying with a contract entered into with a management company prior to September 1, 2001, the charter holder should be fully indemnified by the state for any damages resulting from such noncompliance. The state should provide and pay for defense of the charter holder in the event that a management company pursues any legal recourse as a result of state- required noncompliance with the management contract.

Agency Response. The agency disagrees with the comment. The Texas Constitution provides, "No appropriation for private or individual purposes shall be made, unless authorized by this Constitution." Texas Constitution, Article 16, §6(a). It also provides, "The Legislature shall have no power to make any grant or authorize the making of any grant of public moneys to any individual, association of individuals, municipal or other corporations whatsoever." Texas Constitution, Article 3, §51. These provisions prevent the State of Texas from gratuitously indemnifying private companies for their own conduct.

As noted in an earlier response to another comment, contracts for management services are specifically authorized after September 1, 2001. Prior to House Bill 6, such contracts were loosely analogized to TEC, §11.157 (Contracts for Educational Services), which provides that the board of trustees of a school district may contract with a public or private entity for that entity to provide educational services for the district. But nothing in TEC, §11.157, and nothing in TEC, Chapter 12, Subchapter D, authorized a charter holder to obligate state funds beyond the biennium in which the contract was executed.

In their contracts obligating appropriated funds, state agencies and school districts routinely include language stating that monies due under the contract beyond the biennium shall be contingent upon Legislative authority for such expenditures. School districts, in contracting for educational services pursuant to TEC, §11.157, have no power to bind a future Legislature through their contracts. See Texas Constitution, Article 8, §6 ("No money shall be drawn from the Treasury but in pursuance of specific appropriations made by law; nor shall any appropriation of money be made for a longer term than two years."). A charter holder has no greater power to do so.

TEC, §12.106, authorizes the commissioner to fund a public school student in attendance at a charter school. House Bill 6 amended TEC, §12.106, to significantly alter the formula for such funding. Some charter holders will be entitled to fewer funds as a result, some more. The 77th Legislature might have repealed TEC, §12.106, entirely. In fact, 77th Legislature might have repealed all of TEC, Chapter 12. Indeed, such a bill might conceivably be filed in the 78th Legislature, due to begin in January 2003. Nor is an intervening act by the Legislature the only reason a charter school might close. The open-enrollment charter might be revoked under TEC, §12.116, or the school may close for countless other reasons. In each of these situations, a charter holder might have promised to pay amounts that it can no longer pay.

A publicly funded entity can never make, because it cannot keep, an unqualified promise to pay a vendor beyond a specific biennium. It is the responsibility of the charter holder, not the State of Texas, to inform itself concerning the contingencies that might impact its ability to meets its contractual obligations, and to draft its contracts accordingly.

Proposed §100.1157. Loan from Management Company Prohibited.

Comment. The law firm of Akin, Gump, Strauss, Hauer & Feld, L.L.P., Attorneys and Counselors at Law, commented on behalf of its client, Charter Schools USA, as follows. Proposed §100.1157(e) permits a contract for management services and a debt instrument to continue in effect if made before September 1, 2001, yet prevents repayment of the loan with state funds. This violates long-standing Texas law that prevents the retroactive application of a statute from impairing vested contract rights. TEC, §12.124, does not include any provision restricting the use of state funds for the payment of loans in existence prior to September 1, 2001, and does not purport to be directly or indirectly retroactive. TEC, §12.124, clearly is intended to have only prospective effect. In each instance, TEC, §12.124, provides the charter school "may not accept" certain loans or "may not enter" certain contracts.

Agency Response. The agency disagrees with the comment. House Bill 6 clearly contemplates- in fact carefully provides for- the manner in which its provisions must be applied to charter holders in existence on its effective date. TEC, §12.1071 (Effect of Accepting State Funding), provides at subsection (a) that a charter holder who accepts state funds after the effective date of a provision of TEC, Chapter 12, Subchapter D agrees to be subject to it, regardless of the date the charter was granted. TEC, §12.1071(b), provides that these charter holders agree to accept all liability for funds accepted before September 1, 2001, but specifies that the statute does not create a liability for charter holder conduct occurring before September 1, 2001.

Taken together, these provisions demonstrate not only the clear intention of the Legislature to apply the public school reforms embodied in House Bill 6 to existing charter holders, but thoughtful consideration of the reasons why legislation is generally applied prospectively. In fact, TEC, §12.1071, was inadvertently omitted from H.B. 6 as it passed out of the house-senate conference committee. Because this provision was key to the intent of the bill, its authors passed a separate bill (H.C.R. 332) to correct H.B. 6 by inserting §12.1071 as it currently reads. The agency cannot set aside, via rulemaking, the Legislature's deliberate decision on this question.

The legislative history of House Bill 6 makes clear that its many provisions regulating the relationship between non-profit charter holders and their for-profit management companies are key to the financial reforms in the bill. The following passage is from the House Public Education Committee's Interim Report to the 77th Legislature:

"Public schools outside the charter context can and do contract for a variety of services from the private sector. But the testimony heard by the committee suggests several fact patterns - unique to charters - that carry a high risk that the independence of the charitable organization responsible for operating the public school may be compromised.

The legislature should consider measures to insure that the non-profit charter holder maintains enough autonomy to sever its relationship with its management company, or to sue its management company, when such decisions are in the best interest of the charter school. …

For example, a number of management companies have loaned substantial amounts of money to the charter school with which they do business, or have made commitments to make such loans if needed. Capital financing is one of the most critical problems facing a new charter school in its start-up phase. Thus, a management company's offer of capital financing can be a very strong inducement to a new charter. Further, the existence of a lender-debtor relationship inherently weakens the autonomy of the debtor, unless the debtor remains current on all obligations. The experience of charter school loans, however, is that these charitable organizations can fall significantly behind on payments of principal, if not interest and principal. In this situation, the lender may chose to refrain from accelerating the debt payments or exercising its other rights as a creditor; but the lender does so at its discretion. Once in this position, the debtor/charter school has clearly lost any semblance of autonomy over the creditor/management company."

See Interim Report to the 77th Legislature, House Public Education Committee (November 29, 2000) (Charge 1), pp. 11-13 (cited by the House Research Organization's official analysis of House Bill 6, pp. 1-2). This passage concerns charter school management company loans; but the Interim Report is filled with detailed findings on the need for regulation of ties between charter schools and their management companies- the subject of proposed §100.1153- and the need for the agency to protect charter schools from management company overreaching- proposed as §100.1155. Still other findings deal with the need for access to charter records by students, parents, charter schools, regulators, the media, and the public. See §§100.1051, 100.1159, and 100.1203. Each of these sections is potentially impacted by the arguments of the commenter, since they supersede private agreements made between the charter holder and its management company. None of the reforms urged by the Interim Report, and passed by House Bill 6, can be applied to existing charter holders if they must yield to these private agreements.

The agency agrees that Texas Constitution, Article I, §16, is implicated where a statute takes away or impairs a vested right. But TEC, §12.124, does not impair a lender's right to collect a debt; nor does it impair a contractor's right to enforce a contract for services rendered. It simply seeks to prevent- going forward- a charter school management company from continuing in this capacity while at the same time retaining its leverage as a lender. It was the finding of the House Public Education Committee that such leverage jeopardizes the independence of the charter holder; and the Legislature determined not to fund such dual-capacity arrangements after September 1, 2001.

The Legislature clearly has the authority to make this determination, notwithstanding the private contracts in existence on September 1, 2001. These contracts do not control over the Legislature when setting public education policy. The commenter cites two cases, from 1934 and 1935 respectively, and a 1994 Texas Attorney General Opinion; but fails to cite the controlling case issued by the Texas Supreme Court in 1996, Barshop v. Medina County Underground Water Conservation Dist; 925 S.W.2d 618 (Tex. 1996). In Barshop. the Court refused to invalidate the Edwards Aquifer Act of 1993 under article I, section 16 of the Texas Constitution on the grounds that it was a valid exercise of the police power necessary to safeguard the public safety and welfare.

Further, impairment of contracts analysis only applies where the Act of the Legislature impairs a vested right. As noted earlier, TEC, §12.124, does not impair the right to collect on an invoice or a debt. Proposed §100.1157 does not even prohibit the dual-capacity relationship that is forbidden by TEC, §12.124. The only "right" that is taken away by proposed §100.1157 is the right to have the public fund a private agreement that is contrary to TEC, §12.124, past the date set by TEC, §12.1071.

As noted in an earlier response to another comment, charter school management contracts received specific statutory authority for the first time in House Bill 6. Prior to September 1, 2001, such contracts were loosely analogized to TEC, §11.157. But there was never any conceivable authority for a charter holder to obligate state funds beyond a current biennium. Thus, a management contract that extends beyond the biennium in which it is signed, and that does not permit the charter holder to withdraw from the agreement in response to an Act of a succeeding Legislature, may be void under Texas Constitution, Article 8, §6. Such a contract, executed contrary to public policy, is certainly no reason to limit the reach of TEC, §12.124, or to ignore the policy of TEC, §12.1071.

Comment. The law firm of Akin, Gump, Strauss, Hauer & Feld, L.L.P., Attorneys and Counselors at Law, commented on behalf of its client, Charter Schools USA, as follows. Without conceding that House Bill 6 may affect loans from management companies to charter schools in place prior to September 1, 2001, Charter Schools USA suggests that a management company should be permitted to guarantee or co-sign a loan entered into before September 1, 2001, under which a charter school managed by the management company is the payor. Acting as a co-signor or guarantor of such a loan does not place the management company in a position to exert influence over the conduct of the charter school in a manner prohibited by TEC, §12.124. For instance, as a guarantor or co- signor, the management company would not be able to accelerate the note, negotiate for forbearance, or take other actions as a creditor. Under these circumstances, the interests of the charter school and the management company will be aligned. The proposed exception would permit a pre-existing loan from a management company to its client charter school to be refinanced, with the management company in the position of a cosigner or guarantor, instead of lender, and would include all renewals and extensions of such notes.

Agency Response. The agency agrees, in part, with the comment. As set forth in response to the earlier comment, the agency cannot adopt a rule that would fund charter holders that continue with the sort of dual-capacity relationship forbidden by TEC, §12.124, past the date set by TEC, §12.1071. Section 100.1157(e), as proposed, allows such a relationship to continue, if necessary to comply with the terms of pre-existing written contracts, but withholds funding under TEC, §12.106. If, however, a pre-existing loan can be refinanced so as to be of less concern to the policies behind TEC, §12.124, then funding might be permitted beyond the date set by TEC, §12.1071.

The premise of the suggested change is that the co-signor or guarantor of a loan is not normally in a position to exert influence over the conduct of the primary debtor in a manner that might be of concern under TEC, §12.124. In principal, this is nearly correct, but safeguards will be necessary in practice. There can be no agreement that links the continued service of the management company to its continued position as co-signor or guarantor of the loan. Otherwise, the policy of TEC, §12.124, will be frustrated: The ability of the charter holder to fire its management company will be compromised. This does not mean that the management company cannot bargain with the charter holder, offering to refinance the loan in exchange for some consideration. But it does mean that the management company must promise not to take adverse action as co-signor or guarantor of the loan, no matter what happens in the charter holder-management company relationship.

Even in principal, the co-signor or guarantor will have, in its capacity as management company, extraordinary access to the financial decisions made by the primary debtor. This presents clear conflicts of interest. But such conflicts may be tolerated over the short term, because other provisions of House Bill 6 should enable the charter holder and the agency to manage these conflicts in the public interest.

Accordingly, proposed §100.1157(e) has been modified to add a new paragraph (2) providing that a charter holder debt to its management company under subsection (e) may be refinanced after September 1, 2001, if the management company will not be the lender but will merely guarantee or co-sign for the debt; and if the TEA division responsible for legal services finds that each of the conditions listed in new paragraph (2) have been met and that any compliance problems do not prevent the approval of the refinancing.

Proposed §100.1159. Public Records Maintained by Management Company; Contract Provision.

Comment. The law firm of Akin, Gump, Strauss, Hauer & Feld, L.L.P., Attorneys and Counselors at Law, commented on behalf of its client, Charter Schools USA as follows. Proposed §100.1159(a) should be clarified in connection with proposed §100.1203(a)(3). For further summary of this comment, see the comment from Akin, Gump regarding proposed §100.1203(a)(3).

Agency Response. The agency agrees, in part, with the comment. For further response to this comment, see the agency's response to the comment from Akin, Gump regarding proposed §100.1203(a)(3). In response to the comment on proposed §100.1159, §100.1203(a)(3) has been modified to provide that, for purposes of subsection (a)(3), the records of a charter school mean the records indicated by the Financial Accountability System Resource Guide or the laws and rules summarized therein.

Division 6. Charter School Operations.

General Comments

Comment. TCTA proposes including a requirement for a minimum number of contact hours between students and instructional personnel. Some charters have engaged in questionable instructional practices in which computer programs are substituted for on-site teachers. A minimum number of contact hours would assure that students are receiving true instruction.

Agency Response. The agency disagrees with the comment. TEC, §12.001, provides, at subsection (b) that: "This chapter may not be applied in a manner that unduly regulates the instructional methods or pedagogical innovations of charter schools."

Comment. TCTA proposes requiring charters to operate for a seven-hour instructional day unless they receive a waiver from the commissioner. Many charter schools offer half-day programs, and yet receive full-day funding for each half-day program. Students end up being in school for only short amounts of time under this scenario.

Agency Response. The agency disagrees with the comment. TEC, §12.103, provides, at subsection (b), that a charter school is "subject to this code and rules adopted under this code only to the extent the applicability to an open-enrollment charter school of a provision of this code or a rule adopted under this code is specifically provided." TEC, §25.082, provides at subsection (a) that "a school day shall be at least seven hours each day, including intermissions and recesses," but this is among the provisions from which charter schools are specifically excused by §12.103(b). The question whether less than seven hours of instruction is fundable as a full day for purposes of the Foundation School Program is governed by the Student Attendance Accounting Handbook, which applies equally to a student in attendance at a school district or a charter school. Section II, "Audit Requirements," Subsection (1), "General Requirements," of the Handbook provides that, "Students served at least four hours of instruction per day are eligible for full-day attendance (ADA eligibility code 1)." The proposed rules do not include a proposed amendment to the Student Attendance Accounting Handbook.

Comment. TASB stated that, while House Bill 6 requires charter school instructors to have at least a high school diploma, the rules are silent on whether a GED is equivalent to a high school diploma. TASB would like clarification that a GED is not the equivalent of a diploma for purposes of the rule, but if a person has a GED and then subsequently attains a college degree, then the person is qualified to be a charter school instructor for purposes for the rule.

Agency Response. The agency disagrees with the comment. The proposed rules do not include a proposed rule implementing TEC, §12.129 (Minimum Teacher Qualifications). Consequently, the agency may not clarify this issue in response to a comment on the currently proposed rules.

Proposed §100.1203. Records Management.

Comment. The law firm of Akin, Gump, Strauss, Hauer & Feld, L.L.P., Attorneys and Counselors at Law, commented on behalf of its client, Charter Schools USA as follows. Proposed §100.1203(a)(3) is not authorized by TEC, §12.1052. Local Government Code, §201.003, provides a broad definition of "record" that could require a vast number of documents held by a charter school management company to be maintained in Texas. Proposed §100.1203(a)(3) may require charter school records to be maintained in Texas, but may not include records maintained by a management company. In the alternative, Charter Schools USA suggests that a new subsection be added to proposed §100.1159 to define "record" as originals, copies or electronic versions of student records, employment records, financial statements, bank statements, and the contract of charter.

The commenter stated that this definition will limit the records to be maintained in Texas by a management company to those that are essential to the operations and TEA oversight of the charter school. The definition does not include items such as vouchers, ledgers, or interoffice communications among employees or contractors of the management company. An individual had some concerns on a previous comment concerning management company's records being kept in state. They stand by the proposal currently written with exception to any other paperwork the management company may have not pertaining to a charter school in Texas. Charter schools should have readily available access to their own financial records and not rely on out-of-state management companies. The ability for a charter school to recreate their own balance sheet and own finances should be the criteria set forth concerning documentation kept in state.

Agency Response. The agency agrees, in part, with the comment. The agency cannot redefine the term "record," as used in the Local Government Code, since this would be contrary to TEC, §12.1052, which provides at subsection (c) that requirements that apply "to a school district, the board of trustees of a school, or an officer or employee of a school district applies to an open-enrollment charter school, the governing body of a charter holder, the governing body of an open-enrollment charter school, or an officer or employee of an open-enrollment charter school except that records of an open-enrollment charter school that ceases to operate shall be transferred in the manner prescribed by Subsection (d)."

The agency agrees that the proposed rules are ambiguous insofar as they fail to clearly differentiate the records "of a charter school" under §100.1203(a)(3) from management company records "related to the charter school" under §100.1051(b). But the solution suggested by the commenter conflicts with the Financial Accountability System Resource Guide, December 2001 version 8.1, which governs this question. The subject is treated generally in Module 7, "Data Collection and Reporting," of the Resource Guide, and specifically in Section 7.4.3, "Managing a School District's Records." TEC, §12.1052(c), requires that the agency identify charter school records using the standards that identify school district records.

The agency agrees that the records of a management company are private records, and are not subject to Local Government Code, Title 6, Subtitle C, or Government Code, Chapter 441, Subchapter J. Clearly, records "related to the charter school" under §100.1051(b) are the property of the management company, not the charter holder. They include the accounting records, internal memoranda, electronic mail, etc., belonging to the management company but relating directly to its contract for management services with the charter holder. Nevertheless, under TEC, §12.1163, the commissioner may audit these private records to the extent that they relate directly to the management or operation of a charter school. The agency agrees that such an audit must take place wherever the management company chooses to locate its own records. Those records should not be subject to §100.1203(a)(3). Under TEC, §12.125, the management company must maintain all records related to the management services separately from any other records of the management company, but not necessarily in Texas.

Accordingly, §100.1203(a)(3) has been modified to provide that, for purposes of subsection (a)(3), the records of a charter school mean the records indicated by the Financial Accountability System Resource Guide or the laws and rules summarized therein.

Proposed §100.1205. Procurement of Professional Services.

Comment. ACE and HCJJCS suggested that subsection (d) be revised to state that, "Government Code, Chapter 2254, Subchapter A, does not apply to a contract executed prior to the effective date of this Subchapter."

Agency Response. The agency disagrees with the comment. Proposed §100.1205(d) (relating to Implementation schedule and transition) already provides: "Government Code, Chapter 2254, Subchapter A, does not apply to a contract executed prior to September 1, 2001." TEC, §12.1053, has been in effect since September 1, 2001. Proposed §100.1205 adds no detail or specificity that is necessary for the charter holder to comply with Government Code, Chapter 2254, Subchapter A, as written. The purpose of proposed §100.1205 is to provide for the contingency that the State Board of Education might in the future approve an alternative to compliance with Government Code, Chapter 2254, Subchapter A. No such alternative has been approved since the effective date of TEC, §12.1053. Compliance with this section has been required since that time.

Proposed §100.1207. Student Admission.

Comment. TASB, ACE, and HCJJCS asked the agency to clarify proposed §100.1207(d) to specify whether or not federal law requires all charter schools to meet the definition of "public charter school" in order for them to qualify for discretionary and grant funds.

Agency Response. The agency agrees, in part, with the comment. The agency does concur that, to be eligible for any federal formula or discretionary grants, a charter holder must meet the definition of a charter school, as provided by §5210(1) of the "No Child Left Behind Act of 2001," P.L. §107-110 (NCLBA). This definition includes a number of substantive requirements, including the stipulation at subsection (H) that this term means a public school that "is a school to which parents choose to send their children, and that admits students on the basis of a lottery, if more students apply for admission than can be accommodated; ..."

As important as this information is, the agency believes it to be an inappropriate subject for rulemaking at this time. Briefings by federal officials may clarify the manner in which they will implement the NCLBA, and it would not be prudent for the agency to adopt prescriptive requirements until the implications of the new law are made clear. Accordingly, proposed §100.1207(d) has been deleted.

Proposed §100.1209. Municipal Ordinances.

Comment. ACE and HCJJCS suggested that the proposed revisions to §100.1063 should be clarified with a statement to the effect that the public property of a charter holder used for the operation of a charter school is subject to the municipal zoning ordinances governing public schools operated by independent school districts in the same manner and to the same extent that public schools operated by independent school districts are subject to such ordinances.

Agency Response. The agency disagrees with the comment. TEC, §12.103(a), states only that a charter school is subject to "municipal zoning ordinances governing public schools." The commissioner declines to adopt a rule governing the manner in which a municipality might interpret or apply TEC, §12.103(a), to charter schools operating within its jurisdiction.

Proposed §100.1213. Failure to Operate.

Comment. ATPE commented that §100.1213 should not allow charter holders to suspend operations for up to 21 days without commissioner approval. This is not in the best educational interest of the students enrolled in the school. Subsection (b) should outline specific reasons for which a charter holder may suspend operations. A charter should not be allowed to suspend operations for more than 21 days unless health and safety hazards occur. Section 100.1213 should specify that state funds shall be suspended by the commissioner during a suspension of operations, and should require charter holders who suspend operations to ensure that students do not lose instructional time because of that suspension. Subsection (c) should be modified to include prior approval from the commissioner or a hearing before suspension of school.

Agency Response. The agency disagrees with the comment. Under proposed §100.1213, an amendment to suspend operations for more than 21 days is a substantive amendment under proposed §100.1033(c). Approving such an amendment is addressed to the sound discretion of the commissioner. However, no rule can prevent a charter holder from closing down abruptly. The best that a rule can hope to accomplish is an orderly process for such closures, and a mandatory process to be followed. Suspension of operations in contravention of these rules is a material charter violation, and may result in revocation of the open-enrollment charter. The funding consequences of a suspension of operations are automatic. Under the Student Attendance Accounting Handbook, no funds are earned while no students attend school. Finally, as noted in response to an earlier comment, the commissioner does not normally conduct a public hearing before granting an amendment, whether substantive or non-substantive.

Comment. ATPE suggested that the term, "abandonment" be defined in §100.1213(d). Abandonment should be defined as the equivalent of returning a charter, and triggering the same procedures that occur when a charter ceases to operate.

Agency Response. The agency agrees with the comment. In response to the comment on proposed §100.1213, §100.1011(2) (relating to Former Charter Holder) has been modified to state that the holder of an abandoned open-enrollment charter is a "former charter holder" within the meaning of that section.

Comment. ACE and HCJJCS suggested that the following introductory clause should be inserted at the beginning of subsection (a): "Except as otherwise provided in this section,".

Agency Response. The agency agrees with the comment. Proposed §100.1213(a) has been modified to begin with the phrase, "Except as otherwise provided in this section."

Proposed §100.1215. Instructional Facilities.

Comment. ATPE expressed concern that §100.1215(a)(2) waives the requirement that charter holders ensure the use of facilities suitable for use as classrooms when a charter obtains a dormancy amendment, but does not specify that the waiver from this requirement expires when the charter holder resumes operations. ATPE recommended revising §100.1215(a)(2) to include provisions to expire this waiver prior to a charter holder resuming classes.

Agency Response. The agency disagrees with the comment. Proposed §100.1215(a)(2) provides: "During any period of dormancy, an amendment granting the period of dormancy may waive this requirement." Dormancy is a defined term under proposed §100.1213 (relating to Failure to Operate) and requires a substantive amendment to the school's open-enrollment charter. The proposed rule specifies that the amendment that approves the dormant period can waive the requirement only during the period of dormancy.

Comment. ACE and HCJJCS suggested that §100.1215(b)(1) and (2) are redundant and duplicative of other portions of these rules and should be deleted.

Agency Response. The agency disagrees with the comment. In response to another comment, §100.1033(c)(5) has been modified to delete the phrase, "or change." In light of this modification, §100.1215 (b)(1) and (2) are no longer redundant or duplicative.