16_08 Adopted New 19 TAC Chapter 102, Subchapter JJ

Commissioner's Rules

Adopted New 19 TAC Chapter 102, Educational Programs, Subchapter JJ, Commissioner's Rules Concerning Innovation District


Attachments:
I. Statutory Citations (PDF)
II. Text of Adopted New 19 TAC Chapter 102, Educational Programs, Subchapter JJ, Commissioner's Rules Concerning Innovation District (including Figure: 19 TAC §102.1307(d)) (PDF)
III. Summary of Public Comments and Agency Responses


SUMMARY: The rule action presented in this item was filed as adopted with the Texas Register under the commissioner's rulemaking authority. This item adopts new 19 TAC Chapter 102, Educational Programs, Subchapter JJ, Commissioner's Rules Concerning Innovation District. The adopted new rules outline the applicable processes and procedures related to an Innovation District to reflect the changes in statute made by House Bill (HB) 1842, 84th Texas Legislature, 2015.

STATUTORY AUTHORITY: Texas Education Code (TEC), §§12A.001-12A.009, as added by HB 1842, 84th Texas Legislature, 2015.

TEC, §12A.001, authorizes districts to be designated as a district of innovation if the district's most recent performance rating under TEC, §39.054, is at least acceptable performance. The designation as a district of innovation may be initiated by a resolution adopted by the board of trustees or a petition signed by a majority of the members of the district-level committee established under TEC, §11.251.

TEC, §12A.002, requires a board of trustees to hold a public hearing to consider if the district should develop a plan for the designation as a district of innovation after adopting a resolution or receiving a petition.

TEC, §12A.003, requires the development of a plan prior to a designation as a district of innovation. This section requires the local innovation plan to provide for a comprehensive educational program and to identify requirements of the TEC that inhibit the plan's goals and from which the district should be exempted. The section provides specific examples of the considerations the plan may include.

TEC, §12A.004, prohibits a district of innovation from being exempt from requirements that apply to open-enrollment charters; from certain sections of the TEC, Chapter 11; from state curriculum and graduation requirements adopted under the TEC, Chapter 28; and from academic and financial accountability and sanctions under the TEC, Chapter 39. The section requires the commissioner to maintain a list of the exempted provisions and provide notice to the legislature of provisions where districts enrolling a majority of students are exempt.

TEC, §12A.005, imposes requirements related to the local innovation plan that must be met prior to a board of trustees' vote on adopting the proposed innovation plan.

TEC, §12A.006, limits the term of designation as an innovation district to no more than five years.

TEC, §12A.007, authorizes a local innovation plan to be amended, rescinded, or renewed if approved by vote of the district-level committee and board of trustees.

TEC, §12A.008, authorizes the commissioner to terminate an innovation district designation or permit the district to amend its innovation plan after two consecutive years of unacceptable academic or financial performance ratings. The section requires termination after three consecutive years of unacceptable academic or financial performance ratings, or any combination of the two rating systems. This provision makes the commissioner's decision final and not appealable.

TEC, §12A.009, authorizes the commissioner to adopt rules to implement districts of innovation.

EFFECTIVE DATE: September 13, 2016.

BACKGROUND INFORMATION AND JUSTIFICATION: The 84th Texas Legislature, Regular Session, 2015, passed HB 1842, which amended the TEC by adding Chapter 12A, Districts of Innovation, authorizing an eligible school district to be designated as a district of innovation following adoption of a local innovation plan that exempts the district from certain TEC requirements that inhibit the goals of the plan. The local innovation plan must be reported to the Texas Education Agency (TEA). The adopted new rules would provide the applicable processes and procedures related to innovation districts. The adopted rules include a non-comprehensive list of allowable exemptions. A list of prohibited exemptions is also included. TEC, §12A.009, authorizes the commissioner to adopt rules to implement the TEC, Chapter 12A.

Adopted new 19 TAC §102.1301, Definitions, defines terms for implementation of the subchapter. In accordance with the TEC, §§12A.001, 12A.005, and 12A.007, paragraph (1) defines the district-level committee as the committee established under the TEC, §11.251. TEC, Chapter 12A, does not define the composition of the committee to develop the local innovation plan, so adopted new paragraph (2) addresses the composition of that committee. TEC, Chapter 12A, does not define what constitutes a "public hearing" but does distinguish between a public hearing and a public meeting. Adopted new paragraph (3) defines a public hearing as an open meeting that allows the public an opportunity to provide comments and opinions. Accordingly, adopted new paragraph (4) defines a public meeting as an open meeting that provides the public an opportunity to hear facts about a proposed plan. TEC, Chapter 12A, focuses on unacceptable performance for both academic and financial accountability purposes. Adopted new paragraphs (5) and (6) clarify the meaning of "unacceptable performance" by linking with the corresponding ratings adopted by the TEA under the accountability statutes. Based on public comments, two definitions in paragraph (1) were modified at adoption. District-level committee was amended to include a comparable committee. Innovation plan committee was amended to clarify the role of the committee and specify that the district-level committee may also serve in this role.

Adopted new 19 TAC §102.1303, Eligibility, clarifies that a district cannot be designated as a district of innovation if it receives either a preliminary or final rating of below "acceptable performance." TEC, §12A.001, authorizes districts to be designated as a district of innovation only if the district's most recent performance rating under TEC, §39.054, is at least "acceptable performance." Based on public comments, subsection (b) has been modified at adoption to state that the board may not vote on final approval of the plan if the district rating is below acceptable performance and to address the successful appeal of a preliminary rating.

Adopted new 19 TAC §102.1305, Process Timeline, recognizes the statutory methods for designating a district of innovation and the requirement that the district hold a public hearing if one of those methods is realized in accordance with the TEC, §12A.001 and §12A.002. As the statutory provisions lack a requisite timeline for action and to ensure a timely review process, adopted new subsection (b) requires the board of trustees to either decline to pursue a district of innovation or to appoint an innovation committee to develop an innovation plan not later than 30 days after the public hearing. Adopted new subsection (d) requires a district's innovation plan to meet the requirements imposed by the TEC, §12A.003.

Statutory provisions under the TEC, §12A.005, authorize the board of trustees to adopt or reject the plan after meeting certain procedural requirements. However, statutory provisions do not define a planning committee's authority when pursuing the creation of a plan; therefore, the adopted new rule would make clear that when pursuing a district of innovation plan, the board of trustees may establish parameters in which the planning committee must operate. As various statutory provisions, including TEC, §§12A.002, 12A.004 and 12A.005, emphasize public awareness and the necessity for the commissioner to maintain a list of exempted provisions and report to the legislature, adopted new subsection (e) requires the district to clearly post the innovation plan on the district website for the term of the designation as an innovation district in order to promote transparency to the public. Based on public comments, subsection (a) has been modified to clarify the reference to a petition signed by a majority of the members of the district-level committee, specify that the public hearing must be held not later than 30 days after a resolution is adopted or a petition has been received, and move language relating to the parameters for developing the plan from subsection (a) to new subsection (c). In addition, subsection (d) has been modified to clarify that the plan must meet the requirements outlined in statute and the new rules.

Adopted new 19 TAC §102.1307, Adoption of Local Innovation Plan, implements the requirements imposed by the TEC, §12A.005, which include actions necessary prior to a board of trustee's vote on adopting the proposed innovation plan, voting requirement for adoption, status of the district once the plan is adopted, and the extent of the exemptions should future requirements be amended or redesignated.

As the TEC, §12A.003(b)(2), requires a district to identify the requirements from which it seeks to be exempted and the TEC, §12A.004(b), requires the commissioner to maintain a list of TEC provisions from which innovation districts are exempt and to notify the legislature of these provisions for districts enrolling a majority of students, adopted new 19 TAC §102.1307 requires, in addition to the notification of the commissioner of approval of the plan as required by the TEC, §12A.005, that the district report exemptions to the commissioner using a form developed by the commissioner. The reporting form, adopted as Figure: 19 TAC §102.1307(d), would emphasize the non-exclusive major TEC items from which an innovation district may exempt itself and would also provide a method to include items not specifically designated on the form. In response to public comment, the agency has modified Figure: 19 TAC §102.1307(d) to add an area for the district to note if the innovation plan applies to the entire district, specific campuses, or other; the term; and added programs the educational plan may include as currently provided for in TEC, §12A.003.

Adopted new 19 TAC §102.1309, Prohibited Exemptions, provides clarity regarding the statutory provisions from which districts of innovation may not exempt themselves in accordance with the TEC, §12A.004, and the commissioner's rulemaking authority. Prohibited exemptions are as follows. In response to public comment, the organizational structure of subsection (a) has been modified at adoption to clarify that the specific exemptions are applied to open-enrollment charter schools, and subsection (b)(3) has been removed at adoption as it was found to be duplicative. In addition, subsection (b)(1) was modified to clarify that an innovation district may not be exempted from a state program in which the district voluntarily participates.

19 TAC §102.1309(a)(1)(A), (B), (E), (F), (G), and (H), (a)(6), and (a)(7)
TEC, §12A.004(a)(1), prohibits exemption of a district of innovation from any state or federal requirement applicable to an open-enrollment charter school operating under the TEC, Chapter 12, Subchapter D, which, among others, prohibits exemption from statutory sections imposed on an open-enrollment charter under the TEC, Chapter 12, including the requirements listed in the TEC, §§12.104(b), 25.001, 25.002, 25.0021, 25.0031, and 25.004; Chapter 30, Subchapter A; §30.104; Chapter 34; §§37.006(l), 37.007(e), and 37.020; §§44.0011, 44.002, 44.003, 44.004, 44.0041, 44.005, 44.0051, 44.006, 44.007, 44.0071, 44.008, 44.009, 44.011, 44.0312, 44.032, 44.051, 44.052, 44.053, and 44.054; and 45.003, 45.0031, 45.005, 45.105, 45.106, 45.202, and 45.203. This list is not comprehensive; several additional statutes reference charters. In response to public comment, TEC, Chapter 22, Subchapter B, was added at adoption to clarify the civil immunity protections and procedures related to districts of innovation.

19 TAC §§102.1309(a)(3), (a)(1)(H), (a)(4), (a)(5), (a)(6), (a)(7), and (a)(8)
TEC, §12A.004(a)(1), establishes a floor for exemptions for a district seeking to be a district of innovation. Several provisions of the TEC are inapplicable to an open-enrollment charter school, not because the legislature has intentionally limited the requirement, but because the inherent nature of an open-enrollment charter school makes application of the provision non-sensical. As the legislature clearly intended a floor to apply to the exemptions, consequently, districts may not seek an exemption from certain statutory provisions that lack a charter analog. As such, a district seeking to be a district of innovation may not seek an exemption from:

  • TEC, Chapter 13, as open-enrollment charters have no exclusive boundaries vis-à-vis other charter schools nor are open-enrollment charters as a group required to cover all geographic boundaries of the state;
  • TEC, §§37.011, 37.012, and 37.013, because a district must allow an open-enrollment charter school student to be served at a Juvenile Justice Alternative Education program;
  • TEC, Chapters 41 and 42, because open-enrollment charters have no taxing capacity, and HB 1842 contained no textual indication or legislative intent demonstrating that the legislature intended to alter current funding mechanisms;
  • TEC, §§44.0011, 44.002, 44.003, 44.004, 44.0041, 44.005, 44.0051, 44.006, 44.007, 44.0071, 44.008, 44.009, 44.011, 44.0312, 44.032, 44.051, 44.052, 44.053, and 44.054;
  • TEC, §§45.003, 45.0031, 45.005, 45.105, 45.106, 45.202, 45.203; and
  • TEC, Chapter 46, as open-enrollment charters have no taxing capacity for interest and sinking purposes and, therefore, have no access to facility assistance.

19 TAC §102.1309(a)(2)
TEC, §12A.004(a)(2), prohibits an exemption from a requirement imposed by the TEC, Chapter 11, Subchapters A, C, D, and E, with exception of §11.1511(b)(5) and (14) and §11.162.

19 TAC §102.1309(a)(1)(C)
TEC, §12A.004(a)(3), prohibits an exemption from a provision regarding state curriculum and graduation requirements adopted under the TEC, Chapter 28. A district of innovation may not seek an exemption from the TEC, §§28.002, 28.0021, 28.0023, 28.005, 28.0051, 28.006, 28.016, 28.0211, 28.0213, 28.0217, 28.025, 28.0254, 28.0255, 28.0258, 28.0259 and 28.026, as those provisions constitute a state curriculum and graduation requirement under the TEC, Chapter 28. A district may not seek an exemption from the TEC, §30.104, because this provision implements the graduation requirements adopted under the TEC, Chapter 28.

19 TAC §102.1309(a)(1)(D)
Some provisions of the TEC supersede the provisions of the TEC, Chapter 12A, and a district of innovation may not seek an exemption from those provisions. TEC, §29.201, applies the provisions of the TEC, Chapter 29, Subchapter G, notwithstanding any other law, which prohibits a district from seeking an exemption from the TEC, Chapter 29, Subchapter G.

19 TAC §102.1309(a)(1)(I)
TEC, §12A.004(a)(4), prohibits an exemption from provisions of academic and financial accountability and sanctions under the TEC, Chapter 39. A district of innovation may not be exempt from any provision of the TEC, Chapter 39.

19 TAC §102.1309(b)(1)
TEC, §12A.004(a)(1), prohibits exemption from any state or federal requirement applicable to an open-enrollment charter school operating under the TEC, Chapter 12, Subchapter D. TEC, §12.104(d), imposes a requirement on open-enrollment charters to comply with all requirements of a state program in which the charter voluntarily participates. Consequently, a school district may not seek an exemption from a requirement of a grant or other voluntary benefit.

19 TAC §102.1309(b)(2)
TEC, §12A.003(b)(2), requires a district to identify requirements imposed by the TEC from which the district should be exempt on adoption of an innovation plan. Several provisions of the TEC do not impose a requirement on districts but authorize discretionary participation by a district. However, a district that chooses to participate must meet certain conditions imposed by statute on the operation of that authority. As those provisions only apply if a district chooses to operate under those provisions, those provisions do not constitute a requirement from which the district may seek an exemption under the TEC, Chapter 12A.

19 TAC §102.1309(b)(3)
TEC, §12A.003(b)(2), limits an innovation district to identifying requirements of the TEC. Requirements imposed by provisions outside the TEC may not be exempted, including requirements under the Texas Government Code, Chapter 822.

Adopted new 19 TAC §102.1311, Term, implements the TEC, §12A.006, requirement that the term of designation as an innovation district may not exceed five years. As various provisions discuss a local innovation plan as singular, and the plan, under the TEC, §12A.003, must be "comprehensive," and multiple innovation plans would thwart the necessity for amendments under the TEC, §12A.007, adopted new 19 TAC §102.1311 would, therefore, limit a district to one innovation plan at a time. In accordance with the TEC, §12A.007, changes to a plan shall be handled through the amendment process rather than adopting multiple plans.

Adopted new 19 TAC §102.1313, Amendment, Rescission, or Renewal, implements the TEC, §12A.007, which authorizes a local innovation plan to be amended, rescinded, or renewed if approved by vote of the district-level committee and board of trustees. The adopted new rule clarifies that the requirement of the TEC, §12A.007, stating "in the same manner as required for initial adoption" imposes a two-thirds voting requirement of the board of trustees. As statute authorizes an amendment process but does not impose a requirement for total plan review, adopted new subsection (a)(1) clarifies in rule that exemptions already approved need not be reviewed during an amendment. To ensure proper notice and orderly return to statutory compliance and to allow the TEA to accurately comply with reporting requirements, adopted new subsection (a)(2) requires a district that rescinds its plan to notify the TEA of the rescission within five business days of the approved vote and provide a date for compliance with the TEC provisions, which may not be later than the following school year. To ensure orderly transition and ensure proper public notice, adopted new subsection (a)(3) clarifies in rule that all sections of the plan must be reviewed during renewal. In response to public comment, the six-month timeframe on the renewal of the plan was removed at adoption, and subsection (b) was added to clarify that any amendment, rescission, or renewal action requires notification to the commissioner.

Adopted new 19 TAC §102.1315, Termination, reflects the statutory authorization under the TEC, §12A.008, for the commissioner to terminate an innovation district designation or permit a district to amend its innovation plan after two consecutive years of unacceptable academic or financial performance ratings. The adopted new rule requires the commissioner to terminate an innovation district designation after three consecutive years of unacceptable academic or financial performance ratings, or any combination of the two rating systems. The adopted new rule also implements the statutory provision making the related commissioner decision final and not appealable.

FISCAL IMPACT: The TEA has determined that there are no fiscal implications for persons required to comply with the new rules; however, there are implications for state and local government. The TEA will incur additional personnel costs to fulfill the reporting requirements of statute. The estimated cost is $100,000 each year for fiscal years 2016 and 2017. School districts could potentially save money depending upon the exemptions claimed and how they would be implemented, but the estimated savings cannot be determined at this time.

There is no direct adverse economic impact for small businesses and microbusinesses; therefore, no regulatory flexibility analysis, specified in Texas Government Code, §2006.002, is required. There is no effect on local economy; therefore, no local employment impact statement is required under Texas Government Code, §2001.022.

PUBLIC AND STUDENT BENEFIT: The adopted new rules provide school districts with flexibilities that allow for district innovation based on their local innovation plans.

PROCEDURAL AND REPORTING IMPLICATIONS: As required by statute, the adopted new rules require innovation districts to report a list of district-approved TEC exemptions to the TEA.

LOCALLY MAINTAINED PAPERWORK REQUIREMENTS: The adopted new rules require innovation districts to maintain the approved plan to make it available on the district website for public review.

PUBLIC COMMENTS: The public comment period on the proposal began April 1, 2016, and ended May 2, 2016. Attachment III reflects a summary of public comments received and corresponding agency responses regarding Proposed New 19 TAC Chapter 102, Educational Programs, Subchapter JJ, Innovation District.

ALTERNATIVES: None.

OTHER COMMENTS AND RELATED ISSUES: None.

Staff Members Responsible:
Mark Baxter, Director, Policy and Planning
Leah Martin, Director, Accreditation and Waivers

For more information, email rules@tea.texas.gov.