TITLE 19.EDUCATION

Part 2. TEXAS EDUCATION AGENCY

Chapter 100. CHARTERS

Subchapter AA. COMMISSIONER'S RULES CONCERNING OPEN-ENROLLMENT CHARTER SCHOOLS

The Texas Education Agency (TEA) proposes an amendment to §100.1011 and new §§100.1102-100.1108, concerning open-enrollment charter schools. Section 100.1011 specifies provisions relating to definitions. The proposed amendment and new sections relate to charter school board and officer training mandated by House Bill (HB) 6, 77th Texas Legislature, 2001.

Texas Education Code (TEC), §12.123, added by HB 6, 77th Texas Legislature, 2001, requires that the commissioner adopt rules prescribing training for members of charter holder governing bodies, members of charter school governing bodies, and charter school officers. Prior to the passage of HB 6, no training was required for these entities.

The proposed amendment to 19 TAC §100.1011 defines the role of a shared services cooperative as it relates to charter school board and officer training. This amendment includes details relating to contractual arrangements.

The proposed new 19 TAC §100.1102 provides guidance for charter school board and officer training. This new rule includes provisions relating to training required, the timeline for completing training, the transition timeline, course content, the required course curriculum outline, continuing training, and exemptions.

The proposed new 19 TAC §100.1103 details the requirements for training for chief executive and central administrative officers, including training required, the timeline for completing training, the transition timeline, course content, the required course curriculum outline, continuing training, and exemptions.

The proposed new 19 TAC §100.1104 establishes guidelines for the training of campus administrative officers, including training required, the timeline for completing training, the transition timeline, course content, the required course curriculum outline, continuing training, and exemptions.

The proposed new 19 TAC §100.1105 provides guidance for business manager training, including training required, the timeline for completing training, the transition timeline, course content, the required course curriculum outline, continuous training, and exemptions.

The proposed new 19 TAC §100.1106 details the exemptions for participation in a shared services cooperative.

The proposed new 19 TAC §100.1107 establishes guidelines for course providers. This new rule specifies provisions for authorized course providers, the application for registration and qualifications of applicants, compliance with training rules, and annual registration.

The proposed new 19 TAC §100.1108 requires that charter holders maintain records of compliance and that they disclose non-compliance.

Susan Barnes, assistant commissioner for charter schools, has determined that for the first five-year period the amendment and new sections are in effect there will be no fiscal implications for state or local government as a result of enforcing or administering the amendment and new sections. There are fiscal implications anticipated for charter schools as a result of enforcing these proposed rule actions. Charter schools will incur cost as a result of the required board member and officer training. The fiscal impact to charter schools cannot be precisely determined since the number of board members and officers at different charter schools will likely vary, as will the fees charged by different providers.

Ms. Barnes has determined that for each year of the first five years the amendment and new sections are in effect the public benefit anticipated as a result of enforcing the amendment and new sections will be that open-enrollment charter schools provide the public with choices among public schools and innovation in education programs throughout the state. The proposed rule actions ensure that entities responsible for the operation of charter schools will receive training in basic law, including school finance; health and safety issues; accountability issues related to the use of public funds; and other requirements relating to accountability to the public, such as open meetings and public information. There will not be an effect on small businesses. There is no anticipated economic cost to persons who are required to comply with the amendment and new sections.

Comments on the proposal may be submitted to Cristina De La Fuente-Valadez, Accountability Reporting and Research, 1701 North Congress Avenue, Austin, Texas 78701, (512) 463-9701. Comments may also be submitted electronically to rules@tea.state.tx.us or faxed to (512) 475-3499. All requests for a public hearing on the proposed amendment and new sections submitted under the Administrative Procedure Act must be received by the commissioner of education not more than 15 calendar days after notice of the proposal has been published in the Texas Register .

1. GENERAL PROVISIONS

19 TAC §100.1011

The amendment is proposed under Texas Education Code, §12.123, which authorizes the commissioner to adopt rules prescribing training for members of charter holder governing bodies, members of charter school governing bodies, and officers of charter schools.

The amendment implements Texas Education Code, §12.123.

§100.1011.Definitions.

The following words and terms, when used in this subchapter, shall have the following meaning, unless the context clearly indicates otherwise.

(1)-(13) (No change.)

(14) Management company--A natural person or a corporation, partnership, sole proprietor, association, agency, or other legal entity that provides any management services to a charter holder or charter school, except that:

(A) a charter holder and its employees may provide management services to a charter school that is under the charter holder's supervision and control pursuant to the open-enrollment charter, and such charter holder is not thereby a management company;

(B) a non-profit corporation that is exempt from taxation under 28 United States Code §501(c)(3) may donate management services to a charter holder, and the donor corporation is not thereby a management company if the donee charter holder is a subsidiary corporation controlled by the donor corporation under the articles of incorporation and bylaws of the donee charter holder; [ and ]

(C) a regional education service center providing services to a charter school under TEC, Chapter 8, is not a management company ; and [ . ]

(D) the fiscal agent of a shared services cooperative providing services to a member of the shared services cooperative is not a management company.

(15)-(23) (No change.)

(24) Shared services cooperative--A contractual arrangement among charter holders through which one member of the cooperative, acting as the fiscal and administrative agent for the other members, provides educational services and/or management services to member charter holders under a written contract executed by each member. A contract establishing a shared services cooperative must at a minimum:

(A) establish clear procedures for administering services under the direction and control of the cooperative, and for assigning responsibility for all costs and liabilities associated with services provided under the contract;

(B) establish the duties, responsibilities, and accountability of the fiscal agent and of each member for services provided under the contract;

(C) establish clear procedures for withdrawal of a member from the agreement, and for the dissolution and winding up of the affairs of the cooperative;

(D) if the cooperative may provide special education services, comply with TEC, §29.007; and

(E) be approved in writing by the commissioner before any services are provided.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on March 12, 2003.

TRD-200301711

Cristina De La Fuente-Valadez

Manager, Policy Planning

Texas Education Agency

Earliest possible date of adoption: April 27, 2003

For further information, please call: (512) 463-9701


5. CHARTER SCHOOL GOVERNANCE

19 TAC §§100.1102 - 100.1108

The new sections are proposed under Texas Education Code, §12.123, which authorizes the commissioner to adopt rules prescribing training for members of charter holder governing bodies, members of charter school governing bodies, and officers of charter schools.

The new sections implement Texas Education Code, §12.123.

§100.1102.Training for Members of Governing Bodies of Charter Holder and School.

(a) Training required. Unless exempted under subsection (g) of this section, a member of the governing body of a charter holder or a member of the governing body of a charter school must complete a training course consisting of 12 instructional hours, excluding breaks, administrative tasks, and other non-instructional time, delivered by a course provider registered under §100.1107 of this title (relating to Course Providers). The training course may not use self- instructional materials.

(b) Timeline for completing training. Except as provided in subsection (c) of this section, a member of the governing body of a charter holder or a member of the governing body of a charter school must complete the training course required by this section within one calendar year of appointment or election to such governing body.

(c) Transition timeline. A member serving on the governing body of a charter holder or the governing body of a charter school on the effective date of this section must complete at least the first six hours of the training course required by this section within six months of the effective date of the curriculum outline approved under subsection (e) of this section, and must complete the remaining six hours of such training within one year of the effective date of the approved curriculum outline. Training completed prior to the effective date of this section and after September 1, 2001, may be counted toward the first six hours of the training course required by this section if it meets the requirements of the curriculum outline approved under subsection (e).

(d) Course content. The training course required by this section shall include the following modules:

(1) a module consisting of at least 150 minutes of instruction in basic school law, with special emphasis on corporate director duties and liabilities, non-delegable duties, nepotism, conflicts of interest, management companies, and the legal requirements specific to members of the governing body of a charter holder;

(2) a module consisting of at least 60 minutes of instruction in basic school finance, with special emphasis on accounting for public funds and property, student attendance accounting, federal funds and property management, grant administration, audit requirements, and the financial duties specific to the members of the governing body of a charter holder;

(3) a module consisting of at least 30 minutes of instruction in health and safety issues, with special emphasis on health and safety codes, ordinances, and other laws applicable to operating a Texas public school; student discipline; and safe schools;

(4) a module consisting of at least 110 minutes of instruction in accountability requirements related to the use of public funds, with special emphasis on the duties and liabilities of a trustee under Texas law, the shared use of real property for charter and non-charter business, bank depository contracts, capital financing, incidental use of public property by charter holder personnel, and recovery by the commissioner of education of the public property held by a former charter holder;

(5) a module consisting of at least 60 minutes of instruction in other requirements relating to accountability to the public, with special emphasis on the administration of statewide assessments, Public Education Information Management System (PEIMS) reporting, dropout reporting, statewide standards for acceptable student performance, charter- specific standards for acceptable student performance, accountability sanctions under Texas Education Code (TEC), §39.131, and the role of student performance in adverse actions under TEC, §12.116 and §12.1162;

(6) a module consisting of at least 60 minutes of instruction in open meetings requirements under Government Code, Chapter 551, with special emphasis on posting the agenda, executive sessions, accessibility of the meeting location to the public, employee board members, and civil and criminal sanctions; and

(7) a module consisting of at least 60 minutes of instruction in requirements relating to public records, with special emphasis on the Public Information Act, the Records Retention Act, confidential student records, records in the possession of a management company, and other duties respecting public records.

(e) Required course curriculum outline. The commissioner shall approve and disseminate a curriculum outline that is consistent with the module topics and minimum durations identified in subsection (d) of this section. Training that does not conform to the curriculum outline does not satisfy the training requirements of this section. The entire duration of the training course must be dedicated to topics identified in the curriculum outline. The curriculum outline will be available on the Texas Education Agency (TEA) website. The process for the development and/or revision of a curriculum outline under this section must include an opportunity for stakeholder comment.

(f) Continuing training. A member serving on the governing body of a charter holder or the governing body of a charter school who has completed the 12-hour training course required by this section must annually thereafter receive six hours of training, excluding breaks, administrative tasks, and other non-instructional time, delivered by a course provider registered under §100.1107 of this title. Continuing training under this subsection shall fulfill assessed training needs, including any training needs identified by TEA monitoring, and address update items identified in the curriculum outline approved under subsection (e) as well as additional topics selected from the curriculum outline. Selected topics must be covered in greater depth than the curriculum outline indicates for initial training on those topics. No more than one hour of continuing training may use self- instructional materials.

(g) Exemptions. A member of the governing body of a charter holder who serves on the governing body of a governmental entity or an institution of higher education as defined under TEC, §61.003, is exempt from the training required by this section if, by virtue of such service, the member is subject to other mandatory training and the members of the governing body of the charter school operated by the charter holder comply with this section.

§100.1103.Training for Chief Executive and Central Administrative Officers.

(a) Training required. Unless exempted under subsection (g) of this section, a chief executive officer or a central administrative officer, including persons providing management services that include the functions of a chief executive officer or central administrative officer, must complete a training course consisting of 30 instructional hours, excluding breaks, administrative tasks, and other non- instructional time, delivered by a course provider registered under §100.1107 of this title (relating to Course Providers). The training course may not use self-instructional materials.

(b) Timeline for completing training. Except as provided in subsection (c) of this section, a chief executive officer or a central administrative officer must complete the training course required by this section within one calendar year of beginning service in that capacity.

(c) Transition timeline. A person serving as a chief executive officer or central administrative officer on the effective date of this section must complete at least the first 15 hours of the training course required by this section within six months of the effective date of the curriculum outline approved under subsection (e) of this section, and must complete the remaining 15 hours of such training within one year of the effective date of the approved curriculum outline. Training completed prior to the effective date of this section and after September 1, 2001, may be counted toward the first 15 hours of the training course required by this section if it meets the requirements of the curriculum outline approved under subsection (e).

(d) Course content. The training course required by this section shall include the following modules:

(1) a module consisting of at least 240 minutes of instruction in school law, with special emphasis on TEC, Chapter 12, Subchapter D, and this subchapter;

(2) a module consisting of at least 200 minutes of instruction in school finance, with special emphasis on accounting for public funds and property, student attendance accounting, federal funds and property management, grant administration, audit requirements, and capital financing;

(3) a module consisting of at least 120 minutes of instruction in health and safety issues, with special emphasis on health and safety codes, ordinances, and other laws applicable to operating a Texas public school; student discipline; and safe schools;

(4) a module consisting of at least 240 minutes of instruction in accountability requirements related to the use of public funds, with special emphasis on the duties and liabilities of a trustee under Texas law, the shared use of real property for charter and non-charter business, bank depository contracts, capital financing, incidental use of public property by charter holder personnel, and recovery by the commissioner of education of the public property held by a former charter holder;

(5) a module consisting of at least 240 minutes of instruction in other requirements relating to accountability to the public, with special emphasis on the administration of statewide assessments, PEIMS reporting, dropout reporting, statewide standards for acceptable student performance, charter-specific standards for acceptable student performance, accountability sanctions under TEC, §39.131, and the role of student performance in adverse actions under TEC, §12.116 and §12.1162;

(6) a module consisting of at least 60 minutes of instruction in open meetings requirements under Government Code, Chapter 551, with special emphasis on posting the agenda, executive sessions, accessibility of the meeting location to the public, employee board members, and civil and criminal sanctions; and

(7) a module consisting of at least 140 minutes of instruction in requirements relating to public records, with special emphasis on the Public Information Act, the Records Retention Act, confidential student records, records in the possession of a management company, and other duties respecting public records.

(e) Required course curriculum outline. The commissioner shall approve and disseminate a curriculum outline that is consistent with the module topics and minimum durations identified in subsection (d) of this section. Training that does not conform to the curriculum outline does not satisfy the training requirements of this section. The entire duration of the training course must be dedicated to topics identified in the curriculum outline. The curriculum outline will be available on the Texas Education Agency (TEA) website. The process for the development and/or revision of a curriculum outline under this section must include an opportunity for stakeholder comment.

(f) Continuing training. A chief executive officer or a central administrative officer who has completed the 30-hour training course required by this section must annually thereafter receive 15 hours of training, excluding breaks, administrative tasks, and other non-instructional time, delivered by a course provider registered under §100.1107 of this title. Continuing training under this subsection shall fulfill assessed training needs, including any training needs identified by TEA monitoring, and address update items identified in the curriculum outline approved under subsection (e) as well as additional topics selected from the curriculum outline. Selected topics must be covered in greater depth than the curriculum outline indicates for initial training on those topics. No more than three hours of continuing training may use self-instructional materials.

(g) Exemptions. A central administrative officer is exempt from the training required by this section if the person is the holder in good standing of a Standard Superintendent Certificate issued by the State Board for Educator Certification and all other officers of the charter school comply with this division.

§100.1104.Training for Campus Administrative Officers.

(a) Training required. Unless exempted under subsection (g) of this section, a campus administrative officer, including persons providing management services that include the functions of a campus administrative officer, must complete a training course consisting of 10 instructional hours, excluding breaks, administrative tasks, and other non-instructional time, delivered by a course provider registered under §100.1107 of this title (relating to Course Providers). The training course may not use self-instructional materials.

(b) Timeline for completing training. Except as provided in subsection (c) of this section, a campus administrative officer must complete the training course required by this section within one calendar year of beginning service in that capacity.

(c) Transition timeline. A person serving as a campus administrative officer on the effective date of this section must complete at least the first five hours of the training course required by this section within six months of the effective date of the curriculum outline approved under subsection (e) of this section, and must complete the remaining five hours of such training within one year of the effective date of the approved curriculum outline. Training completed prior to the effective date of this section and after September 1, 2001, may be counted toward the first five hours of the training course required by this section if it meets the requirements of the curriculum outline approved under subsection (e).

(d) Course content. The training course required by this section shall include the following modules:

(1) a module consisting of at least 80 minutes of instruction in school law, with special emphasis on TEC, Chapter 12, Subchapter D; this subchapter; students with disabilities; student records; student admissions; geographic boundaries; and residency;

(2) a module consisting of at least 40 minutes of instruction in school finance, with special emphasis on student attendance accounting, federal funds and property management, and grant administration;

(3) a module consisting of at least 80 minutes of instruction in health and safety issues, with special emphasis on health and safety codes, ordinances, and other laws applicable to operating a Texas public school; student discipline; and safe schools;

(4) a module consisting of at least 20 minutes of instruction in accountability requirements related to the use of public funds, with special emphasis on incidental use of public property by charter holder personnel;

(5) a module consisting of at least 120 minutes of instruction in other requirements relating to accountability to the public, with special emphasis on the administration of statewide assessments, PEIMS reporting, and dropout reporting;

(6) a module consisting of at least 20 minutes of instruction in open meetings requirements under Government Code, Chapter 551, with special emphasis on employee board members; and

(7) a module consisting of at least 40 minutes of instruction in requirements relating to public records, with special emphasis on confidential student records.

(e) Required course curriculum outline. The commissioner of education shall approve and disseminate a curriculum outline that is consistent with the module topics and minimum durations identified in subsection (d) of this section. Training that does not conform to the curriculum outline does not satisfy the training requirements of this section. The entire duration of the training course must be dedicated to topics identified in the curriculum outline. The curriculum outline will be available on the Texas Education Agency (TEA) website. The process for the development and/or revision of a curriculum outline under this section must include an opportunity for stakeholder comment.

(f) Continuing training. A campus administrative officer who has completed the 10-hour training course required by this section must annually thereafter receive five hours of training, excluding breaks, administrative tasks, and other non-instructional time, delivered by a course provider registered under §100.1107 of this title. Continuing training under this subsection shall fulfill assessed training needs, including any training needs identified by TEA monitoring, and address update items identified in the curriculum outline approved under subsection (e) as well as additional topics selected from the curriculum outline. Selected topics must be covered in greater depth than the curriculum outline indicates for initial training on those topics. No more than 30 minutes of continuing training may use self-instructional materials.

(g) Exemptions. A campus administrative officer is exempt from the training required by this section if the person is the holder in good standing of a Standard Principal Certificate issued by the State Board for Educator Certification, and all other officers of the charter school comply with this division.

§100.1105.Training for Business Managers.

(a) Training required. Unless exempted under subsection (g) of this section, a business manager, including persons providing management services that include the functions of a business manager, must complete a training course consisting of 30 instructional hours, excluding breaks, administrative tasks, and other non-instructional time, delivered by a course provider registered under §100.1107 of this title (relating to Course Providers). The training course may not use self-instructional materials.

(b) Timeline for completing training. Except as provided in subsection (c) of this section, a business manager must complete the training course required by this section within one calendar year of beginning service in that capacity.

(c) Transition timeline. A person serving as a business manager on the effective date of this section must complete at least the first 15 hours of the training course required by this section within six months of the effective date of the curriculum outline approved under subsection (e) of this section, and must complete the remaining 15 hours of such training within one year of the effective date of the approved curriculum outline. Training completed prior to the effective date of this section and after September 1, 2001, may be counted toward the first 15 hours of the training course required by this section if it meets the requirements of the curriculum outline approved under subsection (e).

(d) Course content. The training course required by this section shall include the following modules:

(1) a module consisting of at least 240 minutes of instruction in school law, with special emphasis on TEC, Chapter 12, Subchapter D; this subchapter; and the Financial Accountability System Resource Guide;

(2) a module consisting of at least 480 minutes of instruction in school finance, with special emphasis on the Financial Accountability System Resource Guide, generally accepted accounting principles, student attendance accounting, federal funds and property management, purchasing, grant administration, audit requirements, and capital financing;

(3) a module consisting of at least 20 minutes of instruction in health and safety issues, with special emphasis on health and safety codes, ordinances, and other laws applicable to operating a Texas public school;

(4) a module consisting of at least 240 minutes of instruction in accountability requirements related to the use of public funds, with special emphasis on the duties and liabilities of a trustee under Texas law, the shared use of real property for charter and non-charter business, bank depository contracts, capital financing, incidental use of public property by charter holder personnel, and recovery by the commissioner of education of the public property held by a former charter holder;

(5) a module consisting of at least 160 minutes of instruction in other requirements relating to accountability to the public, with special emphasis on PEIMS reporting, internal management controls, and audit requirements;

(6) a module consisting of at least 20 minutes of instruction in open meetings requirements under Government Code, Chapter 551, with special emphasis on adopting and amending the budget; and

(7) a module consisting of at least 40 minutes of instruction in requirements relating to public records, with special emphasis on recordkeeping required by generally accepted accounting principles and applicable law.

(e) Required course curriculum outline. The commissioner shall approve and disseminate a curriculum outline that is consistent with the module topics and minimum durations identified in subsection (d) of this section. Training that does not conform to the curriculum outline does not satisfy the training requirements of this section. The entire duration of the training course must be dedicated to topics identified in the curriculum outline. The curriculum outline will be available on the Texas Education Agency (TEA) website. The process for the development and/or revision of a curriculum outline under this section must include an opportunity for stakeholder comment.

(f) Continuing training. A business manager who has completed the 30-hour training course required by this section must annually thereafter receive 15 hours of training, excluding breaks, administrative tasks, and other non-instructional time, delivered by a course provider registered under §100.1107 of this title. Continuing training under this subsection shall fulfill assessed training needs, including any training needs identified by TEA monitoring, and address update items identified in the curriculum outline approved under subsection (e) as well as additional topics selected from the curriculum outline. Selected topics must be covered in greater depth than the curriculum outline indicates for initial training on those topics. No more than three hours of continuing training may use self-instructional materials.

(g) Exemptions.

(1) A business manager is exempt from the training required by this section if the person is the holder in good standing of one or more of the following credentials issued by the Texas Association of School Business Officials, and if all other officers of the charter school comply with this division:

(A) Registered Texas School Business Administrator;

(B) Certified Texas School Business Official;

(C) Certified Texas School Business Specialist; or

(D) Certified Texas School Business Administrator; and

(2) A business manager is exempt from a module of required training, if:

(A) the business manager is a certified public accountant (CPA) registered in good standing with the Texas State Board of Public Accountancy; and

(B) the subject matter of the module of required training is covered by the Uniform CPA Examination administered by the Texas State Board of Public Accountancy.

§100.1106.Exemption for Participation in a Shared Services Cooperative.

(a) An officer of a charter school is exempt from a module of required training on a specific duty or responsibility, if:

(1) the charter holder is a member of a shared services cooperative;

(2) the written contract establishing the cooperative assigns to the cooperative the specific duty or responsibility, and assigns to the cooperative the requirement to complete that module of training, by:

(A) insuring that all relevant employees attend that module of required training and receive a certificate of course completion for that module from a regional education service center or course provider registered under §100.1107 of this title (relating to Course Providers); or

(B) if the cooperative is a registered course provider, insuring that all relevant employees attend that module of training and receive a certificate of course completion for that module from the cooperative; and

(3) all relevant employees of the cooperative actually attend that module of training and receive a certificate of course completion for that module.

(b) Nothing in this section affects an exemption available by virtue of another section in this division.

§100.1107.Course Providers.

(a) Authorized course providers. Training under this division must be provided by a regional education service center (RESC) or by a course provider registered with the commissioner of education under this section. Training provided by a course provider that is not registered under this section at the time of training does not satisfy training requirements specified in this division. The fee for a course or module of training shall be determined by the RESC or registered course provider.

(b) Application for registration; qualifications. An applicant for course provider registration must file with the commissioner documents and information demonstrating a history of training experience and subject-matter expertise in each area covered by a training course required by this division.

(1) The course provider may apply to be registered as a course provider for one or more training courses, and may submit documents and information about more than one instructor. However, each instructor must be under contract to teach the course or module for the applicable period of registration.

(2) The course provider is not registered under this section until it receives written notice of registration under this section.

(c) Compliance with training rules. A registered course provider that fails to comply with §§100.1102-100.1107 of this division will not be registered in any subsequent year. A person who completes a training course that does not comply with §§100.1102-100.1105 and curriculum outlines approved thereunder has not satisfied the requirements for continued service.

(d) Annual registration; no renewal. Initial registration under this section is effective for 18 months. Thereafter, re-registration may be for a period of up to three years. Re-registration is by original application under this section, except that the process for re-registration of a registered course provider must include an opportunity for stakeholder comment on that course provider's performance. A successful application for registration in a prior registration period confers no right or expectation that the commissioner will grant an application for registration in a subsequent year.

§100.1108.Record of Compliance and Disclosure of Non-compliance.

Record of compliance; non-compliance.

(1) Record of compliance. It is the obligation of the charter holder to comply with this section, including compliance with §§100.1102-100.1105 of this division by each a member of the governing body of the charter holder, each member of any governing body of a charter school operated by the charter holder, and each chief executive officer, central administrative officer, campus administrative officer, and business manager of any charter school operated by the charter holder. The charter holder shall document its compliance with §§100.1102-100.1105 and this section.

(2) Continued service. A person may not continue to serve 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 of a charter school, unless the person is in compliance with §§100.1102- 100.1105 and this section.

(3) Audit disclosure. A charter holder shall separately disclose, in its annual audit report required by §100.1047(c) of this title (relating to Accounting for State Funds), any member of the governing body of the charter holder or a charter school, and any officer of a charter school, who fails to comply with §§100.1102-100.1105 and this section and who continues to serve in such capacity as of the date of the audit report.

(4) Material charter violation. Failure to comply with §§100.1102-100.1105 and this section is a material charter violation that may be considered by the commissioner in any action or intervention under Division 2 of this subchapter (relating to Commissioner Action and Intervention).

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on March 12, 2003.

TRD-200301712

Cristina De La Fuente-Valadez

Manager, Policy Planning

Texas Education Agency

Earliest possible date of adoption: April 27, 2003

For further information, please call: (512) 463-9701