SECTION 100.1155. Procedures for Prohibiting a Management Contract

(a) Action prohibiting management contract. The commissioner of education may prohibit, deny renewal of, suspend, or revoke a contract between an open-enrollment charter school and a management company providing management services to the school if the commissioner determines that the management company has:

(1) failed to provide educational or related services in compliance with the company's contractual or other legal obligation to any open-enrollment charter school in Texas or to any other similar school in another state;

(2) failed to protect the health, safety, or welfare of the students enrolled at an open-enrollment charter school served by the company;

(3) violated this subchapter or a rule adopted under this subchapter; or

(4) otherwise failed to comply with any contractual or other legal obligation to provide services to the school.

(b) Procedures for making determination. A determination under subsection (a) of this section shall be made through a final investigative report issued by the Texas Education Agency (TEA). In making this determination:

(1) the commissioner may rely on one or more of the following:

(A) any finding or determination made by a court or other tribunal of competent jurisdiction, whether in Texas or in any other state, or by the United States, if the order or judgment is final under the rules governing such proceedings;

(B) any finding or determination made by the commissioner under §§100.1021 of this title (relating to Revocation and Modification of Governance of an Open-Enrollment Charter), 100.1023 of this title (relating to Intervention Based on Charter Violations), 100.1025 of this title (relating to Intervention Based on Health, Safety, or Welfare of Students), 100.1027 of this title (relating to Accountability Ratings and Sanctions), or 100.1031 of this title (relating to Renewal of an Open-Enrollment Charter), if the finding or determination is final under the rules governing such proceedings; or

(C) any finding or determination made by a court in an action for declaratory judgment or other action pertaining to the commissioner's determination under this section, if the order or judgment is final under the rules governing such proceedings; and

(2) to the extent that a finding or determination under paragraph (1) of this subsection pertains to a charter holder or charter school served by a management company, but does not directly pertain to the management company, the focus shall be on the question of whether the relevant contract for management services creates a legal duty for the management company to provide services to the charter school in areas of performance that are the subject of the finding or determination against the charter holder or charter school.

(c) Review of proposed management contract. At least 30 calendar days prior to any performance or payments under the contract, a charter holder must file a copy of each contract for management services, and each amendment, renewal or extension thereto, with the TEA division responsible for legal services for review under this section.

(1) A contract for management services is unenforceable, void, and of no force or effect until the expiration of 30 calendar days following the date on which it is filed with the TEA division responsible for legal services for review under this section. In addition, performance under the contract prior to the expiration of 30 calendar days following the date on which it is filed for review under this section is a material charter violation.

(2) Following the expiration of 30 calendar days after it is filed with the TEA division responsible for legal services for review under this section, if the commissioner takes no action within 30 days, then the parties may begin performance under the contract.

(3) The absence of action by the commissioner does not constitute a finding of compliance under this section, nor waive or in any other manner prevent the commissioner from acting at a later time under this section.

(d) Implementation schedule and transition.

(1) Notwithstanding this section:

(A) a copy of a contract for management services in effect during school year 2001-2002 shall be filed with the TEA division responsible for legal services on or before the expiration of 30 calendar days following the effective date of this section; and

(B) if a contract for management services is timely filed with the TEA division responsible for legal services for review under subparagraph (A) of this paragraph, then the parties may continue or immediately begin performance under the contract unless or until the commissioner takes action.

(2) Notwithstanding this section, if an affected contract for management services was executed prior to September 1, 2001, then the management contract may continue in effect past September 1, 2001, if each of the following conditions is met:

(A) no state funds are used to pay any amounts due the management company under the management contract, and all such amounts are paid from a clearly identified source of non-state funds; and

(B) the terms of the management contract have not been renewed, modified, or otherwise altered since September 1, 2001.

Source Note: The provisions of this §100.1155 adopted to be effective April 18, 2002, 27 TexReg 3110; amended to be effective June 22, 2009, 34 TexReg 4119; amended to be effective September 18, 2014, 39 TexReg 7295