Opinion ID: 6109717
Heading Depth: 3
Heading Rank: 1

Heading: The Laws Governing Charter Schools

Text: The Education Code requires the Commissioner to set academic and financial accountability standards for all school districts and charter schools. Id. §§ 39.053, .082. The Code also generally describes the information the Commissioner must consider when setting those standards. Id. For example, when determining whether a school district or charter school meets academic performance standards, the Commissioner must take into account student performance on standardized tests, student improvement on those tests, the performance of students from different racial and ethnic backgrounds, and dropout and graduation rates, among other things. Id. § 39.053(c). As part of the academic accountability standard, the Commissioner is required to assess dropout rates, including dropout  rates and district completion rates for grade levels 9 through 12, computed in accordance with standards and definitions adopted by the National Center for Education Statistics of the United States Department of Education .... Id. § 39.053(c)(4)(A)(i). This requires consideration of data from previous school years. Texas law has used federal standards for dropout rates since 2003. Act of May 28, 2003, 78th Leg. R.S., ch. 805, § 1, 2003 Tex. Gen. Laws 2356 , 2356-57 (originally codified in TEX. EDUC. CODE § 39.051 ). In 2009, the Legislature required the TEA to substantially revise the academic accountability regime with the State of Texas Assessments of Academic Readiness (STAAR) testing program. Act of June 1, 2009, 81st Leg., R.S., ch. 895, 2009 Tex. Gen. Laws 2357 . Although the Legislature amended many of the accountability standards, it did not alter the requirement that the Commissioner consider dropout rates in accordance with federal standards. Id. § 59, 2009 Tex. Gen. Laws 2381 , 2382. Because of the substantial changes to the academic ratings system, the Legislature gave the Commissioner the option to suspend assignment of accreditation statutes and performance ratings for the 2011-2012 school year. Id. § 59, 2009 Tex. Gen. Laws 2401 -02. The Commissioner took that option, leaving school districts and charter schools without academic ratings for 2011-2012. The new academic accountability system was first used in the 2012-2013 school year. Charter schools and school districts must also meet certain financial accountability standards. A school's financial rating is often referred to as its FIRST rating, an acronym for Financial Integrity Rating System of Texas. The financial rating for any given fiscal year is based on data from the prior fiscal year. At the time of the relevant events here, the Texas Administrative Code made that explicit: The financial accountability rating for a particular year will always be based on complete and audited financial data from the previous fiscal year given the availability of the data. For example, the final 2010 School FIRST rating issued in August 2010 is based on complete and audited financial data for the 2008-2009 fiscal year and is the financial accountability rating for the 2009-1010 school year for the purposes of § 97.1055 of this title (relating to Accreditation Status). 36 Tex. Reg. 6941 , 6946 (2011) (formerly 19 Tex. Admin. Code § 109.1002 (i) ). The current rule similarly provides: The TEA will base the financial accountability rating for a rating year on the data from the fiscal year preceding the rating year. 19 Tex. Admin. Code § 109.1001 (k).
The Commissioner revoked the charters of AYW and Honors under the authority provided in Education Code § 12.115. That authority was changed by the Legislature in 2013. Before that, the Commissioner's decision to revoke an open-enrollment was discretionary. Act of May 28, 2001, 77th Leg., R.S., ch. 1504, § 12, 2001 Tex. Gen. Laws 5344 , 5350 (stating that the Commissioner may revoke a charter). The previous legislation listed multiple conditions that might warrant revocation but the duration and severity of those conditions was left undefined. Id. (allowing revocation for commit[ing] a material violation of the charter, fail[ing] to satisfy accountability provisions, and fail[ing] to comply with the law). After the 2013 amendments, what had been discretionary with the Commissioner became mandatory. The 2013 amendments also added a new mandatory revocation ground, which is the  focus of this appeal. TEX. EDUC. CODE § 12.115(c). Section 12.115(c) directs the Commissioner to revoke a charter when a charter school's academic or financial performance, or any combination of the two, fall below acceptable standards for the three preceding school years. See Id. § 12.115(c)(1) (pertaining to unacceptable academic performance rating), (c)(2) (pertaining to unsatisfactory financial accountability performance rating), (c)(3) (pertaining to any combination of these ratings). Another new provision described the initial three-year period the Commissioner was to consider when determining a school's academic and financial performance for purposes of the § 12.115(c)'s mandatory revocation. See Id. § 12.115(c-1).