TITLE 19. EDUCATION

PART 2. TEXAS EDUCATION AGENCY

CHAPTER 33. STATEMENT OF INVESTMENT OBJECTIVES, POLICIES, AND GUIDELINES OF THE TEXAS PERMANENT SCHOOL FUND

SUBCHAPTER A. STATE BOARD OF EDUCATION RULES

19 TAC §§33.10, 33.15, 33.20, 33.25, 33.30, 33.35, 33.60

The State Board of Education (SBOE) proposes amendments to §§33.10, 33.15, 33.20, 33.25, 33.30, 33.35, and 33.60, concerning the statement of investment objectives, policies, and guidelines of the Texas Permanent School Fund (PSF). The proposed amendments would reorganize references to the PSF distribution policy, include references to new authority and duties assigned by the 86th Texas Legislature, 2019, and address permissible fixed income investments.

BACKGROUND INFORMATION AND JUSTIFICATION: In accordance with statute, the rules in 19 TAC Chapter 33 establish investment objectives, policies, and guidelines for the PSF. Legislation from the 86th Texas Legislature, 2019, made changes to the Texas Education Code (TEC) and the Texas Natural Resources Code that impact the PSF and the SBOE's authority and duties related to the PSF.

The proposed amendment to §33.10, Purposes of Texas Permanent School Fund Assets and the Statement of Investment Policy, would specify that one objective of the PSF distribution policy is to maintain the value of assets per student after adjusting for inflation, as stated in 19 TAC §33.15.

The proposed amendments to §33.15, Objectives; §33.20, Responsible Parties and Their Duties; §33.30, Standards of Performance; and §33.60, Performance and Review Procedures, would implement Senate Bill 608 and House Bill 4388, 86th Texas Legislature, 2019, by accounting for the creation of the Liquid Account within the PSF and the requirement that the SBOE and School Land Board send quarterly investment and financial reports to one other.

The proposed amendment to §33.25, Permissible and Restricted Investments and General Guidelines for Investment Managers, would allow for specific uses of U.S. Treasury futures and the acquisition of a limited percentage of speculative-grade rated securities in the fixed income portfolio to enhance portfolio management abilities.

The proposed amendment to §33.35, Guidelines for the Custodian and the Securities Lending Agent, would remove a reference to a credit ratings firm that is no longer providing the services.

The SBOE approved the proposed amendments for first reading and filing authorization at its November 15, 2019 meeting.

FISCAL IMPACT: Holland Timmins, executive administrator and chief investment officer of the Texas Permanent School Fund, has determined that for the first five-year period the proposal is in effect there are no additional costs to state or local government required to comply with the proposal.

LOCAL EMPLOYMENT IMPACT: The proposal has no effect on local economy; therefore, no local employment impact statement is required under Texas Government Code, §2001.022.

SMALL BUSINESS, MICROBUSINESS, AND RURAL COMMUNITY IMPACT: The proposal has no direct adverse economic impact for small businesses, microbusinesses, or rural communities; therefore, no regulatory flexibility analysis specified in Texas Government Code, §2006.002, is required.

COST INCREASE TO REGULATED PERSONS: The proposal does not impose a cost on regulated persons, another state agency, a special district, or a local government and, therefore, is not subject to Texas Government Code, §2001.0045.

TAKINGS IMPACT ASSESSMENT: The proposal does not impose a burden on private real property and, therefore, does not constitute a taking under Texas Government Code, §2007.043.

GOVERNMENT GROWTH IMPACT: TEA staff prepared a Government Growth Impact Statement assessment for this proposed rulemaking. The proposed rulemaking would expand the rules by adding provisions in alignment with recent statutory changes. The new provisions address the SBOE's responsibilities in relation to the PSF.

The proposed rulemaking would not create or eliminate a government program; would not require the creation of new employee positions or elimination of existing employee positions; would not require an increase or decrease in future legislative appropriations to the agency; would not require an increase or decrease in fees paid to the agency; would not create a new regulation; would not limit or repeal an existing regulation; would not increase or decrease the number of individuals subject to its applicability; and would not positively or adversely affect the state's economy.

PUBLIC BENEFIT AND COST TO PERSONS: Mr. Timmins has determined that for each year of the first five years the proposal is in effect, the public benefit anticipated as a result of enforcing the proposal would be the update and clarification of provisions supporting the management and investment of the PSF. There is no anticipated economic cost to persons who are required to comply with the proposal.

DATA AND REPORTING IMPACT: The proposal would have no new data and reporting impact.

PRINCIPAL AND CLASSROOM TEACHER PAPERWORK REQUIREMENTS: TEA has determined that the proposal would not require a written report or other paperwork to be completed by a principal or classroom teacher.

PUBLIC COMMENTS: The public comment period on the proposal begins December 20, 2019, and ends January 24, 2020. A form for submitting public comments is available on the TEA website at https://tea.texas.gov/About_TEA/Laws_and_Rules/SBOE_Rules_(TAC)/Proposed_State_Board_of_Education_Rules/. Comments on the proposal may also be submitted to Cristina De La Fuente-Valadez, Rulemaking, Texas Education Agency, 1701 North Congress Avenue, Austin, Texas 78701. The SBOE will take registered oral and written comments on the proposal at the appropriate committee meeting in January 2020 in accordance with the SBOE board operating policies and procedures. A request for a public hearing on the proposal submitted under the Administrative Procedure Act must be received by the commissioner of education not more than 14 calendar days after notice of the proposal has been published in the Texas Register on December 20, 2019.

STATUTORY AUTHORITY. The amendments are proposed under Texas Constitution, Article VII, §5(a), which authorizes the State Board of Education (SBOE) to make distributions from the Permanent School Fund (PSF) to the available school fund with certain limits; Texas Constitution, Article VII, §5(f), which authorizes the SBOE to manage and invest the PSF according to the prudent investor standard and make investments it deems appropriate; Texas Education Code (TEC), §43.001, which describes the PSF as a perpetual endowment; TEC, §43.0052, as added by HB 4388, 86th Texas Legislature, 2019, and Texas Natural Resources Code, §32.068 and §51.414, as added by HB 4388, which created the Liquid Account within the PSF to be managed by the SBOE and require the SBOE and School Land Board to send quarterly investment and financial reports to the other; and Texas Natural Resources Code, §32.012, as amended by SB 608, 86th Texas Legislature, 2019, and §32.0161, as added by SB 608, which require the SBOE to submit to the governor a list of six nominees for each of two positions on the School Land Board and require the SBOE and the School Land Board to hold a joint annual public meeting to discuss the PSF.

CROSS REFERENCE TO STATUTE. The amendments implement Texas Constitution, Article VII, §5(a) and (f); Texas Education Code (TEC), §43.001; TEC, §43.0052, as added by House Bill (HB) 4388, 86th Texas Legislature, 2019; and Texas Natural Resources Code, §32.012, as amended by Senate Bill 608, 86th Texas Legislature, 2019; §32.0161, as added by SB 608, 86th Texas Legislature, 2019; and §32.068 and §51.414, as added by HB 4388, 86th Texas Legislature, 2019.

§33.10.Purposes of Texas Permanent School Fund Assets and the Statement of Investment Policy.

(a) The purpose of the Texas Permanent School Fund (PSF), as defined by the Texas Constitution, shall be to support and maintain an efficient system of public free schools. The State Board of Education (SBOE) views the PSF as a perpetual institution. Consistent with its perpetual nature, the PSF shall be an endowment fund with a long-term investment horizon. The SBOE shall strive to manage the PSF consistently with respect to the following: generating income for the benefit of the public free schools of Texas, the real growth of the corpus of the PSF, protecting capital, and balancing the needs of present and future generations of Texas school children. The PSF will strive to maintain intergenerational equity by attempting to pay out a constant distribution and maintain the value of assets per student after adjusting for inflation.

(b) The purposes of the investment policy statement are to:

(1) specify the investment objectives, policies, and guidelines the SBOE considers appropriate and prudent, considering the needs of the PSF, and to comply with the Texas Constitution by directing PSF assets;

(2) establish SBOE performance criteria for an investment manager;

(3) communicate the investment objectives, guidelines, and performance criteria to the SBOE, PSF investment staff and managers, and all other parties;

(4) guide the ongoing oversight of PSF investment and test compliance with the Texas Constitution and other applicable statutes;

(5) document that the SBOE is fulfilling its responsibilities for managing PSF investments solely in the interests of the PSF;

(6) document that the SBOE is fulfilling its responsibilities under Texas law; and

(7) provide transparency and accountability to the citizens of Texas.

§33.15.Objectives.

(a) Investment objectives.

(1) Investment objectives have been formulated based on the following considerations:

(A) the anticipated financial needs of the Texas public free school system in light of expected future contributions to the Texas Permanent School Fund (PSF);

(B) the need to preserve capital;

(C) the risk tolerance set by the State Board of Education (SBOE) and the need for diversification;

(D) observations about historical rates of return on various asset classes;

(E) assumptions about current and projected capital market and general economic conditions and expected levels of inflation;

(F) the need to maintain liquidity in the PSF Liquid Account;

(G) [(F)] the need to invest according to the prudent person rule; and

(H) [(G)] the need to document investment objectives, guidelines, and performance standards.

(2) Investment objectives represent desired results and are long-term in nature, covering typical market cycles of three to five years. Any shortfall in meeting the objectives should be explainable in terms of general economic and capital market conditions and asset allocation.

(3) The investment objectives are consistent with generally accepted standards of fiduciary responsibility.

(4) Under the provisions of this chapter, investment managers shall have discretion and authority to implement security selection and timing.

(b) Goal and objectives for the PSF.

(1) Goal. The goal of the SBOE for the PSF shall be to invest for the benefit of current and future generations of Texans consistent with the safety of principal, in light of the strategic asset allocation plan adopted. To achieve this goal, PSF investment shall be carefully administered at all times.

(2) Objectives.

(A) The preservation and safety of principal shall be a primary consideration in PSF investment.

(B) Fixed income securities shall be purchased at the highest total return consistent with the preservation and safety of principal.

(C) To the extent possible, the PSF management shall hedge against inflation.

(D) Securities, except investments for cash management purposes, shall be selected for investment on the basis of long-term investment merits rather than short-term gains.

(c) Investment rate of return and risk objectives.

(1) Because the education needs of the future generations of Texas school children are long-term in nature, the return objective of the PSF shall also be long-term and focused on fairly balancing the benefits between the current generation and future generations while preserving the real per capita value of the PSF.

(2) Investment rates of return shall adhere to the Chartered Financial Analyst (CFA) Institute Global Investment Performance Standards (GIPS) guidelines in calculating and reporting investment performance return information.

(3) The overall risk level of PSF assets in terms of potential for price fluctuation shall not be extreme and risk variances shall be acceptable in the context of the overall goals and objectives for the investment of the PSF assets. The primary means of achieving such a risk profile are:

(A) a broad diversification among asset classes that react as independently as possible through varying economic and market circumstances;

(B) careful control of risk level within each asset class by avoiding over-concentration and not taking extreme positions against the market indices; and

(C) a degree of emphasis on stable growth.

(4) Over time, the volatility of returns (or risk) for the total fund, as measured by standard deviation of investment returns, should be comparable to investments in market indices in the proportion in which the PSF invests.

(5) The rate of return objective of the total PSF fund shall be to earn, over time, an average annual total rate of return that meets or exceeds the rate of return of a composite benchmark index, consisting of representative benchmark indices for the asset classes in which the PSF is invested that are aggregated in proportion to the strategic target asset allocation of the total PSF fund as determined by the SBOE, while maintaining an acceptable risk level compared to that of the composite benchmark index.

(6) The rate of return objective of each asset class in which the PSF is invested, other than the short-term cash fund, shall be to earn, over time, an average annual average rate of return that meets or exceeds that of a representative benchmark index for such asset class in U.S. dollars, combining dividends, capital appreciation, income, and interest income, as applicable, while maintaining an acceptable risk level compared to that of the representative benchmark index.

(7) The objective of the short-term cash fund shall be to provide liquidity for the timely payment of security transactions, while earning a competitive return. The expected return, over time, shall meet or exceed that of the representative benchmark index, while maintaining an acceptable risk level compared to that of the representative benchmark index.

(8) The objective of the PSF Liquid Account shall be to maintain liquidity for the needs of the School Land Board while earning a competitive return. The expected return, over time, shall meet or exceed that of the representative benchmark index while maintaining an acceptable risk level compared to that of the representative benchmark index.

(9) [(8)] Notwithstanding the risk parameters specified in paragraphs (4)-(6) of this subsection, consideration shall be given to marginal risk variances exceeding the representative benchmark indices if returns are commensurate with the risk levels of the respective portfolios.

(d) Asset allocation policy.

(1) The SBOE shall adopt and implement a strategic asset allocation plan based on a well diversified, balanced investment approach that uses a broad range of asset classes indicated by the following characteristics of the PSF:

(A) the long-term nature of the PSF;

(B) the spending policy of the PSF;

(C) the relatively low liquidity requirements of the PSF;

(D) the investment preferences and risk tolerance of the SBOE;

(E) the liquidity mandates under the Texas Natural Resources Code, Chapter 51, Subchapter I;

(F) [(E)] the rate of return objectives; and

(G) [(F)] the diversification objectives of the PSF, specified in the Texas Constitution, Article VII, §5(d), the Texas Education Code, Chapter 43, and the provisions of this chapter.

(2) The strategic asset allocation plan shall contain guideline percentages, at market value of the total fund's assets, to be invested in various asset classes. The guideline percentages will include both a target percentage and an acceptable strategic range for each asset class, recognizing that the target mix may not be attainable at a specific point in time since actual asset allocation will be dictated by current and anticipated market conditions, as well as the overall directions of the SBOE.

(3) The SBOE Committee on School Finance/Permanent School Fund, with the advice of the PSF investment staff, shall review the provisions of this section at least annually and, as needed, rebalance the assets of the portfolio according to the asset allocation rebalancing procedure specified in the PSF Investment Procedures Manual. The SBOE Committee on School Finance/Permanent School Fund shall consider the industry diversification and the percentage allocation within the following asset classes:

(A) domestic equities;

(B) international equities;

(C) emerging market equities;

(D) domestic fixed income;

(E) emerging market debt local currency;

(F) real estate;

(G) private equity;

(H) absolute return;

(I) real return;

(J) risk parity;

(K) cash; and

(L) other asset classes as approved by the SBOE.

(4) To the extent practicable, investments shall not exceed the strategic ranges the SBOE establishes for each asset class, recognizing the inability to actively reduce allocations to certain asset classes.

(5) Periodically, the SBOE shall allocate segments of the total fund to each investment manager and specify guidelines, investment objectives, and standards of performance that apply to those assets.

§33.20.Responsible Parties and Their Duties.

(a) The Texas Constitution, Article VII, §§1-8, establish [establishes] the Available School Fund, the Texas Permanent School Fund (PSF), and the State Board of Education (SBOE), and specify [specifies] the standard of care SBOE members must exercise in managing PSF assets. In addition, the constitution directs the legislature to establish suitable provisions for supporting and maintaining an efficient public free school system, defines the composition of the PSF and the Available School Fund, and requires the SBOE to set aside sufficient funds to provide free instructional materials for the use of children attending the public free schools of this state.

(b) The Texas Natural Resources Code, Chapter 51, Subchapter I, creates the PSF Liquid Account within the PSF to be invested in liquid assets and managed by the SBOE in the same manner it manages the PSF.

(c) [(b)] The SBOE shall be responsible for overseeing all aspects of the PSF and may contract with any of the following parties, whose duties and responsibilities are as follows.

(1) An external investment manager is a Person the SBOE retains by contract to manage and invest a portion of the PSF assets under specified guidelines.

(2) A custodian is an organization, normally a financial company, the SBOE retains to safe keep, and provide accurate and timely reports of, PSF assets.

(3) A consultant is a Person the SBOE retains to advise the SBOE on PSF matters based on professional expertise.

(4) Investment Counsel is a Person retained under criteria specified in the PSF Investment Procedures Manual to advise PSF investment staff and the SBOE Committee on School Finance/Permanent School Fund within the policy framework established by the SBOE. Investment Counsel may be assigned such tasks as asset allocation reviews, manager searches, performance analysis, recommendations on spending policy, performance reporting, and benchmarking and research related to the management of PSF assets, with any such assigned tasks to be performed in consultation with PSF staff.

(5) A performance measurement consultant is a Person retained to provide the SBOE Committee on School Finance/Permanent School Fund an analysis of the PSF portfolio performance. The outside portfolio performance measurement service firm shall perform the analysis on a quarterly or as-needed basis. Quarterly reports shall be distributed to each member of the SBOE Committee on School Finance/Permanent School Fund and Investment Counsel, and a representative of the firm shall be available as necessary to brief the committee.

(6) The State Auditor's Office is an independent state agency that performs an annual financial audit of the Texas Education Agency (TEA) at the direction of the Texas Legislature. The financial audit, conducted according to generally accepted auditing standards, is designed to test compliance with generally accepted accounting principles. The state auditor performs tests of the transactions of the PSF Investment Office as part of this annual audit, including compliance with governing statutes and SBOE policies and directives. The TEA Internal Audit Division will participate in the audit process by participating in entrance and exit conferences, being provided copies of all reports and management letters furnished by the external auditor, and having access to the external auditor's audit programs and working papers.

(7) The SBOE may retain independent external auditors to review the PSF accounts annually or on an as-needed basis. The TEA Internal Audit Division will participate in the audit process by participating in entrance and exit conferences, being provided copies of all reports and management letters furnished by the external auditor, and having access to the external auditor's audit programs and working papers.

(d) [(c)] The SBOE shall meet on a regular or as-needed basis to conduct the affairs of the PSF.

(e) [(d)] In case of emergency or urgent public necessity, the SBOE Committee on School Finance/Permanent School Fund or the SBOE, as appropriate, may hold an emergency meeting under the Texas Government Code, §551.045.

(f) [(e)] The SBOE shall have the following exclusive duties:

(1) determining the strategic asset allocation mix between asset classes based on the attending economic conditions and the PSF goals and objectives, including determining the separate asset allocation for the PSF Liquid Account based on the specific goals and objectives for investing the PSF Liquid Account;

(2) ratifying all investment transactions pertaining to the purchase, sale, or reinvestment of assets by all internal and external investment managers for the current reporting period;

(3) appointing members to the SBOE Investment Advisory Committee;

(4) approving the selection of, and all contracts with, external investment managers, financial advisors, Investment Counsel, financial or other consultants, or other external professionals retained to help the SBOE invest PSF assets;

(5) approving the selection of, and the performance measurement contract with, a well-recognized and reputable firm retained to evaluate and analyze PSF investment results. The service shall compare investment results to the written investment objectives of the SBOE and also compare the investment of the PSF with the investment of other public and private funds against market indices and by managerial style;

(6) setting policies, objectives, and guidelines for investing PSF assets; [and]

(7) submitting a list of six nominees for any vacant position on the School Land Board to the Texas Governor for consideration; and

(8) [(7)] representing the PSF to the state.

(g) [(f)] The SBOE may establish committees to administer the affairs of the PSF. The duties and responsibilities of any committee established shall be specified in the PSF Investment Procedures Manual.

(h) [(g)] The PSF shall have an executive administrator, with a staff to be adjusted as necessary, who functions directly with the SBOE through the SBOE Committee on School Finance/Permanent School Fund concerning investment matters, and who functions as part of the internal operation under the commissioner of education. At all times, the PSF executive administrator and staff shall invest PSF assets as directed by the SBOE according to the Texas Constitution and all other applicable Texas statutes, as amended, and SBOE rules governing the operation of the PSF. The PSF staff shall:

(1) administer the PSF, including investing and managing assets and contracting in connection therewith, according to SBOE goals and objectives;

(2) execute all directives, policies, and procedures from the SBOE and the SBOE Committee on School Finance/Permanent School Fund;

(3) keep records and provide a continuous and accurate accounting of all PSF transactions, revenues, and expenses and provide reports on the status of the PSF portfolio;

(4) advise any officials, investment firms, or other interested parties about the powers, limitations, and prohibitions regarding PSF investments that have been placed on the SBOE or PSF investment staff by statutes, attorney general opinions and court decisions, or by SBOE policies and operating procedures;

(5) continuously research all internally managed securities held by the PSF and report to the SBOE Committee on School Finance/Permanent School Fund and the SBOE any information requested, including reports and statistics on the PSF, for the purpose of administering the PSF;

(6) establish and maintain a procedures manual that implements this section to be approved by the SBOE;

(7) make recommendations regarding investment and policy matters to the SBOE Committee on School Finance/Permanent School Fund and the SBOE, except for formal recommendations for benchmarks for internally managed PSF asset classes, which duties the Committee will assign to an appropriate third party who will present such recommendations after consultation with PSF staff; and

(8) establish and maintain accounting policies and internal control procedures concerning all receipts, disbursements and investments of the PSF, according to the procedures adopted by the SBOE.

(i) The SBOE delegates to the SBOE Committee on School Finance/Permanent School Fund, to which it has delegated certain powers and duties relating to the investment of the PSF, the responsibility of representing the SBOE at the joint annual meeting between the School Land Board and the SBOE under Texas Natural Resources Code, §32.0161. The chairs of the SBOE and the SBOE Committee on School Finance/Permanent School Fund shall be responsible for coordinating the joint annual meeting between the School Land Board and the SBOE.

§33.25.Permissible and Restricted Investments and General Guidelines for Investment Managers.

(a) Permissible investments. Any investment that satisfies the prudence standard, is consistent with the Fund's investment policy and portfolio objectives, and is used in executing investment strategies approved by the State Board of Education (SBOE).

(b) Prohibited transactions and restrictions. Except as provided in subsection (a) of this section or as approved or delegated by the SBOE, the following prohibited transactions and restrictions apply to all Texas Permanent School Fund (PSF) investment managers with respect to the investment or handling of PSF assets, except as otherwise noted:

(1) short sales of any kind except for U.S. Treasury futures for purposes of hedging fixed income portfolios;

(2) purchasing letter or restricted stock;

(3) buying or selling on margin;

(4) engaging in purchasing or writing options or similar transactions;

[(5) purchasing or selling futures on commodities contracts;]

(5) [(6)] borrowing by pledging or otherwise encumbering PSF assets;

(6) [(7)] purchasing the equity or debt securities of the PSF investment manager's own organization or an affiliated organization;

(7) [(8)] engaging in any purchasing transaction, after which the cumulative market value of common stock in a single corporation exceeds 2.5% of the PSF total market value or 5.0% of the manager's total portfolio market value;

(8) [(9)] engaging in any purchasing transaction, after which the cumulative number of shares of common stock in a single corporation held by the PSF exceeds 5.0% of the outstanding voting stock of that issuer;

(9) [(10)] engaging in any purchasing transaction, after which the cumulative market value of fixed income securities or cash equivalent securities in a single corporation (excluding the U.S. government, its federal agencies, and government sponsored enterprises) exceeds 2.5% of the PSF total market value or 5.0% of the investment manager's total portfolio market value with the PSF;

(10) [(11)] purchasing tax exempt bonds;

(11) [(12)] purchasing guaranteed investment contracts (GICs) from an insurance company or bank investment contracts (BICs) from a bank not rated at least AAA by Standard & Poor's or Moody's;

(12) [(13)] purchasing any publicly traded fixed income security not rated investment grade by Standard & Poor's (BBB-), Moody's (Baa3), or Fitch (BBB-), subject to the provisions of the PSF Investment Procedures Manual and the following restrictions:

(A) when ratings are provided by the three rating agencies, the middle rating shall be used;

(B) when ratings are provided by two ratings agencies, the lower rating is used; or

(C) when a rating is provided by one rating agency, the sole rating is used;

(13) [(14)] purchasing short-term money market instruments rated below A-1 by Standard & Poor's or P-1 by Moody's;

(14) [(15)] engaging in any transaction that results in unrelated business taxable income (excluding current holdings);

(15) [(16)] engaging in any transaction considered a "prohibited transaction" under the Internal Revenue Code or the Employee Retirement Income Security Act (ERISA);

(16) [(17)] purchasing precious metals or other commodities;

(17) [(18)] engaging in any transaction that would leverage a manager's position;

(18) [(19)] lending securities owned by the PSF, but held in custody by another party, such as a bank custodian, to any other party for any purpose, unless lending securities according to a separate written agreement the SBOE approved; and

(19) [(20)] purchasing fixed income securities without a stated par value amount due at maturity.

(c) General guidelines for investment managers.

(1) Each investment manager retained to manage a portion of PSF assets shall be aware of, and operate within, the provisions of this chapter and all applicable Texas statutes.

(2) As fiduciaries of the PSF, investment managers shall discharge their duties solely in the interests of the PSF according to the prudent expert rule, engaging in activities that include the following.

(A) Diversification. Each manager's portfolio should be appropriately diversified within its applicable asset class.

(B) Securities trading.

(i) Each manager shall send copies of each transaction record to the PSF investment staff and custodians.

(ii) Each manager shall be required to reconcile the accounts under management on a monthly basis with the PSF investment staff and custodians.

(iii) Each manager shall be responsible for complying fully with PSF policies for trading securities and selecting brokerage firms, as specified in §33.40 of this title (relating to Trading and Brokerage Policy). In particular, the emphasis of security trading shall be on best execution; that is, the highest proceeds to the PSF and the lowest costs, net of all transaction expenses. Placing orders shall be based on the financial viability of the brokerage firm and the assurance of prompt and efficient execution.

(iv) The SBOE shall require each external manager to indemnify the PSF for all failed trades not due to the negligence of the PSF or its custodian in instances where the selection of the broker dealer is not in compliance with §33.40 of this title (relating to Trading and Brokerage Policy).

(C) Acknowledgments in writing.

(i) Each external investment manager retained by the PSF must be a person, firm, or corporation registered as an investment adviser under the Investment Adviser Act of 1940, a bank as defined in the Act, or an insurance company qualified to do business in more than one state, and must acknowledge its fiduciary responsibility in writing. A firm registered with the Securities and Exchange Commission (SEC) must annually provide a copy of its Form ADV, Section II.

(ii) The SBOE may require each external manager to obtain coverage for errors and omissions in an amount set by the SBOE, but the coverage shall be at least the greater of $500,000 or 1.0% of the assets managed, not exceeding $10 million. The coverage should be specific as to the assets of the PSF. The manager shall annually provide evidence in writing of the existence of the coverage.

(iii) Each external manager may be required by the SBOE to obtain fidelity bonds, fiduciary liability insurance, or both.

(iv) Each manager shall acknowledge in writing receiving a copy of, and agreeing to comply with, the provisions of this chapter.

(D) Discretionary investment authority. Subject to the provisions of this chapter, any investment manager of marketable securities or other investments, retained by the PSF, shall have full discretionary investment authority over the assets for which the manager is responsible. Specialist advisors and investment managers retained for alternative asset investments may have a varying degree of discretionary authority, which will be outlined in contract documentation.

(d) Reporting procedures for investment managers. The investment manager shall:

(1) prepare a monthly and quarterly report for delivery to the SBOE, the SBOE Committee on School Finance/Permanent School Fund, and the PSF investment staff that shall include, in the appropriate format, items requested by the SBOE. The monthly reports shall briefly cover the firm's economic review; a review of recent and anticipated investment activity; a summary of major changes that have occurred in the investment markets and in the portfolio, particularly since the last report; and a summary of the key characteristics of the PSF portfolio. Quarterly reports shall comprehensively cover the same information as monthly reports but shall also include any changes in the firm's structure, professional team, or product offerings; a detail of the portfolio holdings; and transactions for the period. Periodically, the PSF investment staff shall provide the investment manager a detailed description of, and format for, these reports;

(2) when requested by the SBOE Committee on School Finance/Permanent School Fund, make a presentation describing the professionals retained for the PSF, the investment process used for the PSF portfolio under the manager's responsibility, and any related issues;

(3) when requested by the PSF investment staff, meet to discuss the management of the portfolio, new developments, and any related matters; and

(4) implement a specific investment process for the PSF. The manager shall describe the process and its underlying philosophy in an attachment to its investment management agreement with the PSF and manage according to this process until the PSF and manager agree in writing to any change.

§33.30.Standards of Performance.

(a) The State Board of Education (SBOE) Committee on School Finance/Permanent School Fund shall set and maintain performance standards for the total Texas Permanent School Fund (PSF) and separately for the PSF Liquid Account , for each asset class in which the assets of the PSF and the PSF Liquid Account are invested, and for all investment managers based on criteria that include the following:

(1) time horizon;

(2) real rate of return;

(3) representative benchmark index;

(4) volatility of returns (or risk), as measured by standard deviation; and

(5) universe comparison.

(b) The SBOE Committee on School Finance/Permanent School Fund shall develop and implement the procedures necessary to establish and recommend to the SBOE the performance standards criteria.

(c) Performance standards shall be included in the PSF Investment Procedures Manual.

§33.35.Guidelines for the Custodian and the Securities Lending Agent.

Completing custodial and security lending functions in an accurate and timely manner is necessary for effective investment management and accurate records.

(1) A custodian shall have the following responsibilities regarding the segments of the funds for which the custodian is responsible.

(A) Provide complete custody and depository services for the designated accounts.

(B) Provide for investment of any cash on a daily basis to avoid uninvested amounts.

(C) Implement the investment actions in a timely and effective manner as directed by the investment managers.

(D) Collect all realizable income and principal and properly report the information on the periodic statements to the Texas Permanent School Fund (PSF) investment staff, the investment managers, or other appropriate parties.

(E) Provide monthly and annual accounting statements, as well as on-line, real-time accounting, that includes all transactions. Accounting shall be based on accurate security values for cost and market value and provided within a time frame acceptable to the State Board of Education (SBOE).

(F) Report to the PSF investment staff situations in which security pricing is either not possible or subject to considerable uncertainty.

(G) Distribute all proxy voting materials in a timely manner.

(H) Provide research and assistance to the SBOE and the PSF investment staff on all issues related to accounting and administration.

(I) Confirm that the depth of resources and personnel associated with the designated funds are comparable to those of the nation's leading custodial banks.

(2) A securities lending agent for the PSF shall have the following responsibilities.

(A) Provide complete transaction reporting for the designated funds.

(B) Provide a monthly accounting, as well as on-line, real-time accounting for securities lending transactions, based on accurate security values.

(C) Report to the PSF investment staff any irregular situation that is outside the standard of practice for securities lending or inconsistent with the provisions of the securities lending agreement.

(D) Implement a securities lending program for the PSF in a manner that does not impair any rights of the PSF by virtue of PSF ownership in securities.

(E) As requested, provide research and assistance to the SBOE and the PSF investment staff on all issues related to accounting and administration.

(F) Provide indemnification to the PSF satisfactory to the SBOE in the event of default on securities lending transactions.

(G) Fully disclose all revenues and other fees associated with the securities lending program.

(H) Comply with restrictions on types of securities lending transactions or eligible investments of cash collateral or any other restrictions imposed by the SBOE or the PSF investment staff. Unless the SBOE gives its written approval, the following guidelines apply to the PSF Securities Lending Program. Cash collateral reinvestment guidelines must meet the following standards.

(i) Permissible investments.

(I) U.S. Government and U.S. Agencies, under the following criteria:

(-a-) any security issued by or fully guaranteed as to payment of principal and interest by the U.S. Government or a U.S. Government Agency or sponsored Agency, and eligible for transfer via Federal Reserve Bank book entry, Depository Trust Company book entry, and/or Participants Trust Company book entry;

(-b-) maximum 397-day maturity on fixed rate;

(-c-) maximum three-year maturity on floating rate, with maximum reset period of 94 days and use a standard repricing index such as London InterBank Offered Rate (LIBOR), Federal Funds, Treasury Bills, or commercial paper; and

(-d-) no maximum dollar limit.

(II) Bank obligations, under the following criteria:

(-a-) time deposits with maximum 60-day maturity on fixed rate or three-year maturity for floating rate, with maximum reset period of 60 days and use a standard repricing index such as LIBOR, Federal Funds, Treasury Bills, or commercial paper;

(-b-) negotiable Certificates of Deposit with maximum 397-day maturity on fixed rate or three-year maturity for floating rate, with maximum reset period of 94 days and use a standard repricing index such as LIBOR, Federal Funds, Treasury Bills, or commercial paper;

(-c-) bank notes with maximum 397-day maturity on fixed rate or three-year maturity on floating rate, with maximum reset period of 94 days and use a standard repricing index such as LIBOR, Federal Funds, Treasury Bills, or commercial paper;

(-d-) bankers acceptances with maximum 45-day maturity;

(-e-) issued by banks with at least $25 billion in assets and, for floating rate bank obligations with a maturity greater than 397 days, a long-term rating of AA2 and AA by Moody's Investor Service and Standard & Poor's Corporation at time of purchase; and, for fixed rate or floating rate bank obligations with a remaining maturity of 397 days or less, a short-term rating of "Tier 1" as defined in clause (ii)(IV) of this subparagraph or, for such bank obligations without a short-term rating, an issuer rating of Tier 1. In addition, placements can be made in branches within the following countries:

(-1-) Canada;

(-2-) France;

(-3-) United Kingdom; and

(-4-) United States; and

(-f-) dollar limit maximum per institution of 5.0% of investment portfolio at time of purchase.

(III) Commercial paper, under the following criteria:

(-a-) dollar limit maximum per issuer of 5.0% of investment portfolio at time of purchase including any other obligations of that issuer as established in subclause (II)(-d-) of this clause. If backed 100% by bank Letter of Credit, then dollar limit is applied against the issuing bank;

(-b-) must be rated "Tier 1" as defined in clause (ii)(IV) of this subparagraph; and

(-c-) maximum 397-day maturity.

(IV) Asset backed commercial paper, under the following criteria:

(-a-) dollar limit maximum per issuer of 5.0% of investment portfolio;

(-b-) must be rated "Tier 1" as defined in clause (ii)(IV) of this subparagraph; and

(-c-) maximum 397-day maturity.

(V) Asset backed securities, under the following criteria:

(-a-) maximum 397-day weighted average life on fixed rate;

(-b-) maximum three-year weighted average life on floating rate, with maximum reset period of 94 days and use a standard repricing index such as LIBOR, Federal Funds, Treasury Bills, or commercial paper; and

(-c-) rated Aaa and AAA by Moody's Investor Service and Standard & Poor's Corporation at time of purchase. One AAA rating may suffice if only rated by one Nationally Recognized Securities Rating Organization (NRSRO).

(VI) Corporate debt (other than commercial paper), under the following criteria:

(-a-) must be senior debt;

(-b-) maximum 397-day maturity on fixed rate;

(-c-) maximum three-year maturity on floating rate, with maximum reset period of 94 days and use a standard repricing index such as LIBOR, Federal Funds, Treasury Bills, or commercial paper;

(-d-) for floating rate corporate obligations with a maturity greater than 397 days, a long-term rating of AA2 and AA by Moody's Investor Service and Standard & Poor's Corporation at time of purchase; and, for fixed rate or floating rate corporate obligations with a remaining maturity of 397 days or less, a short-term rating of "Tier 1" as defined in clause (ii)(IV) of this subparagraph or, for such corporate obligations without a short-term rating, an issuer rating of Tier 1; and

(-e-) dollar limit maximum per issuer of 5.0% of investment portfolio at time of purchase, including any other obligations of that issuer.

(VII) Reverse repurchase agreements, under the following criteria:

(-a-) counterparty must be "Tier 1" rated as defined in clause (ii)(IV) of this subparagraph for fixed rate and AA2 and AA by Moody's Investor Service and Standard & Poor's Corporation for floating rate or be a "Primary Dealer" in Government Securities as per the New York Federal Reserve Bank;

(-b-) underlying collateral may be any security permitted for direct investment;

(-c-) lending agent or a third party custodian must hold collateral under tri-party agreement;

(-d-) collateral must be marked to market daily and maintained at the following margin levels:[;]

(-1-) U.S. Government, U.S. Government Agency, sponsored Agency, International Organization at 100%;

(-2-) Certificate of Deposits, Bankers Acceptance, bank notes, commercial paper at 102% under one year to maturity and rated at least "Tier 1" as defined in clause (ii)(IV) of this subparagraph; and

(-3-) corporate debt (other than commercial paper) at 105% rated at least AA2/AA or better by Moody's Investor Service and Standard & Poor's Corporation at time of purchase;

(-e-) due to daily margin maintenance, dollar limits and maturity limits of underlying collateral are waived, except with respect to the maturity limit in subclause (II)(-d-) of this clause;

(-f-) maximum 180-day maturity; and

(-g-) dollar limit for total reverse repurchase agreements is the greater of $300 million or 15% of value of cash collateral portfolio with one counterparty at time of purchase.

(VIII) Foreign sovereign debt, under the following criteria:

(-a-) any security issued by or fully guaranteed as to payment of principal and interest by a foreign government whose sovereign debt is rated AA2/AA or better by Moody's Investor Service and Standard & Poor's Corporation at time of purchase. Securities must be delivered to Lending Agent or a third party under a Tri-Party agreement;

(-b-) dollar limit maximum per issuer or guarantor of 2.5% of investment portfolio; and

(-c-) maximum maturity of 397 days.

(IX) Short Term Investment Fund (STIF) and/or Registered Mutual Funds, under the following criteria:

(-a-) funds must comprise investments similar to those that would otherwise be approved for securities lending investment under the provisions of this subparagraph, not invest in derivatives, and not re-hypothecate assets;

(-b-) lender must approve each fund in writing and only upon receipt of offering documents and qualified letter; and

(-c-) fund must have an objective of a constant share price of one dollar.

(ii) Investment parameters.

(I) Maximum weighted average maturity of investment portfolio must be 180 days.

(II) Maximum weighted average interest rate exposure of investment portfolio must be 60 days.

(III) All investments must be U.S. dollar-denominated.

(IV) "Tier 1" credit quality is defined as the highest short-term rating category by the following NRSROs:

(-a-) Standard & Poor's;

(-b-) Moody's Investors Service; and

(-c-) Fitch Investors Service. [; and]

[(-d-) Duff & Phelps, LLC.]

(V) At time of purchase all investments must be rated in the highest short-term numerical category by at least two NRSROs, one of which must be either Standard & Poor's or Moody's Investors Service.

(VI) Issuer's ratings cannot be on negative credit watch at the time of purchase.

(VII) Interest and principal only (IO, PO) stripped mortgages are not permitted.

(VIII) Mortgage backed securities are not permitted.

(IX) Complex derivative or structured securities, including, but not limited to the following are not permitted:

(-a-) inverse floating rate notes;

(-b-) defined range floating rate notes;

(-c-) trigger notes; and

(-d-) set-up notes.

(I) Provide a copy of the investment policy governing the custodian's securities lending program, as amended, to the PSF investment staff.

(J) Confirm that the depth of resources and personnel associated with the designated funds are comparable to those of the nation's leading securities lending agents.

§33.60.Performance and Review Procedures.

As requested by the State Board of Education (SBOE) or Texas Permanent School Fund (PSF) investment staff, evaluation and periodic investment reports shall supply critical information on a continuing basis, such as the amount of trading activity, investment performance, cash positions, diversification ratios, rates of return, and other perspectives of the portfolios. The reports shall address compliance with investment policy guidelines.

(1) Performance measurements. The SBOE Committee on School Finance/Permanent School Fund shall review the quarterly performance of each portfolio of the PSF in terms of the provisions of this chapter. The investment performance review shall include comparisons with representative benchmark indices, a broad universe of investment managers, and the consumer price index. A time-weighted return formula (which minimizes the effect of contributions and withdrawals) shall be used for investment return analysis. The review also may include quarterly performance analysis and comparisons of retained firms. The services of an outside, independent consulting firm that provides performance measurement and evaluation shall be retained.

(2) Meeting and reports. Upon request, the SBOE Committee on School Finance/Permanent School Fund shall meet with the PSF investment managers and custodian to review their responsibilities, the PSF portfolio, and investment results in terms of the provisions of this chapter.

(3) Reports to the School Land Board. Each quarter, the SBOE shall provide the School Land Board a financial report on the portion of the PSF assets and funds for which the SBOE is responsible in accordance with Texas Natural Resources Code, §43.0052.

(4) [(3)] Review and modification of investment policy statement. The SBOE Committee on School Finance/Permanent School Fund shall review the provisions of this chapter at least once a year to determine if modifications are necessary or desirable. Upon approval by the SBOE, any modifications shall be promptly reported to all investment managers and other responsible parties.

(5) [(4)] Compliance with this chapter and Texas statutes. Annually, the SBOE Committee on School Finance/Permanent School Fund shall confirm that the PSF and each of its managed portfolios have complied with the provisions of this chapter concerning exclusions imposed by the SBOE, proxy voting, and trading and brokerage selection.

(6) [(5)] Significant events. The SBOE must be notified promptly if any of the following events occur within the custodian or external investment manager organizations:

(A) any event that is likely to adversely impact to a significant degree the management, professionalism, integrity, or financial position of the custodian or investment manager. A custodian must report the loss of an account of $500 million or more. An investment manager must report the loss of an account of $25 million or more;

(B) a loss of one or more key people;

(C) a significant change in investment philosophy;

(D) the addition of a new portfolio manager on the sponsor's account;

(E) a change in ownership or control, through any means, of the custodian or investment manager; or

(F) any violation of policy.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on December 9, 2019.

TRD-201904618

Cristina De La Fuente-Valadez

Director, Rulemaking

Texas Education Agency

Earliest possible date of adoption: January 19, 2020

For further information, please call: (512) 475-1497


CHAPTER 61. SCHOOL DISTRICTS

SUBCHAPTER A. BOARD OF TRUSTEES RELATIONSHIP

19 TAC §61.1, §61.2

The State Board of Education (SBOE) proposes amendments to §61.1 and §61.2, concerning school district boards of trustees. The proposed amendment to §61.1 would reflect changes made by House Bill (HB) 3 and HB 403, 86th Texas Legislature, 2019, to the SBOE's duty to provide training courses for independent school district trustees. The proposed amendment to §61.2 would address the required number of nominees for trustee candidates for military reservation districts.

BACKGROUND INFORMATION AND JUSTIFICATION: Texas Education Code (TEC), §11.159, Member Training and Orientation, requires the SBOE to provide a training course for school board trustees. Section 61.1, Continuing Education for School Board Members, addresses this statutory requirement. School board trustee training under current SBOE rule includes a local school district orientation session, a basic orientation to the TEC, an annual team-building session with the local school board and the superintendent, specified hours of continuing education based on identified needs, and training on evaluating student academic performance.

HB 403, 86th Texas Legislature, 2019, amended TEC, §11.159, to include a requirement for trustees to receive training regarding sexual abuse, human trafficking, and other maltreatment of children. The proposed amendment to §61.1 would implement this requirement in proposed new subsection (b)(7).

HB 3, 86th Texas Legislature, 2019, added TEC, §11.185 and §11.186, to require each district board of trustees to adopt proficiency plans and annual goals for early childhood literacy, mathematics proficiency, and college, career, and military readiness. The annual goals should be for the subsequent five years to reach quantifiable goals. These plans are to be reviewed each year by the board of trustees and posted on the website of each district and campus. The proposed amendment to §61.1 would implement this requirement in proposed new subsection (b)(6).

In addition, §61.1 would be amended as follows.

The text of subsection (b)(1)-(6) would be reformatted for clarity using language that currently exists in the rule and, in some instances, making non-substantive changes.

Proposed new subsection (b)(1)(E) would specify that the orientation for school board members must include information on the open meetings training required by Texas Government Code, §551.005; the public information training required by Texas Government Code, §552.012; and the cybersecurity training required by Texas Government Code, §2054.5191. This requirement would ensure that school board members are aware of additional training required by statute.

The required provider for the team-building training specified in proposed new subsection (b)(4) would be changed from a registered provider to an authorized provider. This change would ensure that team-building trainings address specific needs of each school board based on the framework for governance leadership described in §61.1(a).

Language would be added in proposed new subsections (c) and (d) to clarify the distinction between a registered and an authorized training provider.

Finally, technical edits would be made throughout §61.1 to conform with the reorganization of the rule.

TEC, §11.352, grants the SBOE the authority to appoint a board of three or five trustees for each military reservation district. Enlisted personnel and officers may be appointed to the school board, but a majority of the trustees must be civilians. The trustees are selected from a list of people provided by the commanding officer of the military reservation. Section 61.2, Nomination of Trustees for Military Reservation School Districts and Boys Ranch Independent School District, addresses this statutory requirement.

The proposed amendment to §61.2 would change the minimum number of military-district trustee nominations from three to one. This change would allow for greater flexibility and local control by making an allowance for specific circumstances for each military reservation district and for the discretion of the commanding officer.

Other technical edits would also be made to §61.2.

The SBOE approved the proposed amendments for first reading and filing authorization at its November 15, 2019 meeting.

FISCAL IMPACT: Jeff Cottrill, deputy commissioner for governance and accountability, has determined that for the first five-year period the proposal is in effect there are no additional costs to state or local government required to comply with the proposal.

LOCAL EMPLOYMENT IMPACT: The proposal has no effect on local economy; therefore, no local employment impact statement is required under Texas Government Code, §2001.022.

SMALL BUSINESS, MICROBUSINESS, AND RURAL COMMUNITY IMPACT: The proposal has no direct adverse economic impact for small businesses, microbusinesses, or rural communities; therefore, no regulatory flexibility analysis specified in Texas Government Code, §2006.002, is required.

COST INCREASE TO REGULATED PERSONS: The proposal does not impose a cost on regulated persons, another state agency, a special district, or a local government and, therefore, is not subject to Texas Government Code, §2001.0045.

TAKINGS IMPACT ASSESSMENT: The proposal does not impose a burden on private real property and, therefore, does not constitute a taking under Texas Government Code, §2007.043.

GOVERNMENT GROWTH IMPACT: TEA staff prepared a Government Growth Impact Statement assessment for this proposed rulemaking. The proposed rulemaking would expand existing regulations. The amendment to 19 TAC §61.1 would add training in identifying and reporting potential victims of sexual abuse, human trafficking, and other maltreatment of children and training in setting campus goals for early childhood literacy and mathematics and college, career, and military readiness to the existing, required trustee training. In addition, the local district orientation would be required to provide information on continuing education requirements in statute. The proposal would also limit an existing regulation by reducing the number of required military-district trustee nominations.

The proposed rulemaking would not create or eliminate a government program; would not require the creation of new employee positions or elimination of existing employee positions; would not require an increase or decrease in future legislative appropriations to the agency; would not require an increase or decrease in fees paid to the agency; would not create a new regulation; would not repeal an existing regulation; would not increase or decrease the number of individuals subject to its applicability; and would not positively or adversely affect the state's economy.

PUBLIC BENEFIT AND COST TO PERSONS: Mr. Cottrill has determined that for each year of the first five years the proposal is in effect, the public benefit anticipated as a result of enforcing the proposal would be to align the rule with statute and support school boards in providing oversight regarding identifying and reporting potential victims of sexual abuse, human trafficking, and other maltreatment of children and setting campus goals for early childhood literacy and mathematics and college, career, and military readiness. There is no anticipated economic cost to persons who are required to comply with the proposal.

DATA AND REPORTING IMPACT: The proposal would have no new data and reporting impact.

PRINCIPAL AND CLASSROOM TEACHER PAPERWORK REQUIREMENTS: TEA has determined that the proposal would not require a written report or other paperwork to be completed by a principal or classroom teacher.

PUBLIC COMMENTS: The public comment period on the proposal begins December 20, 2019, and ends January 24, 2020. A form for submitting public comments is available on the TEA website at https://tea.texas.gov/About_TEA/Laws_and_Rules/SBOE_Rules_(TAC)/Proposed_State_Board_of_Education_Rules/. Comments on the proposal may also be submitted to Cristina De La Fuente-Valadez, Rulemaking, Texas Education Agency, 1701 North Congress Avenue, Austin, Texas 78701. The SBOE will take registered oral and written comments on the proposal at the appropriate committee meeting in January 2020 in accordance with the SBOE board operating policies and procedures. A request for a public hearing on the proposal submitted under the Administrative Procedure Act must be received by the commissioner of education not more than 14 calendar days after notice of the proposal has been published in the Texas Register on December 20, 2019.

STATUTORY AUTHORITY. The amendments are proposed under Texas Education Code (TEC), §11.159, as amended by House Bill (HB) 403, 86th Texas Legislature, 2019, which requires the State Board of Education (SBOE) to provide a training course for school board trustees, including one hour of training every two years, on identifying and reporting potential victims of sexual abuse, human trafficking, and other maltreatment of children; TEC, §11.185 and §11.186, as added by HB 3, 86th Texas Legislature, 2019, which requires each district board of trustees to adopt proficiency plans and annual goals for early childhood literacy, mathematics proficiency, and college, career, and military readiness; and TEC, §11.352, which grants the SBOE the authority to appoint a board of three or five trustees for each military reservation district.

CROSS REFERENCE TO STATUTE. The amendments implement Texas Education Code, §11.159, as amended by HB 403, 86th Texas Legislature, 2019; TEC, §11.185 and §11.186, as added by HB 3, 86th Texas Legislature, 2019; and TEC, §11.352.

§61.1.Continuing Education for School Board Members.

(a) Under the Texas Education Code (TEC), §11.159, the State Board of Education (SBOE) shall adopt a framework for governance leadership to be used in structuring continuing education for school board members. The framework shall be posted to the Texas Education Agency (TEA) website and shall be distributed annually by the president of each board of trustees to all current board members and the superintendent.

(b) The continuing education required under the TEC, §11.159, applies to each member of an independent school district board of trustees. [The continuing education requirement consists of orientation sessions, an annual team-building session with the local board and the superintendent, and specified hours of continuing education based on identified needs. The superintendent's participation in team-building sessions as part of the continuing education for board members shall represent one component of the superintendent's ongoing professional development.]

(1) Each school board member of an independent school district shall complete [receive] a local district orientation [and an orientation to the TEC].

(A) The purpose of the local orientation is to familiarize new board members with local board policies and procedures and district goals and priorities.

(B) A candidate for school board may complete the training up to one year before he or she is elected or appointed. A newly elected or appointed school board member who did not complete this training in the year preceding his or her election or appointment must complete the training within 120 calendar days after election or appointment.

(C) The orientation shall be at least three hours in length.

(D) The orientation shall address local district practices in the following, in addition to topics chosen by the local district:

(i) curriculum and instruction;

(ii) business and finance operations;

(iii) district operations;

(iv) superintendent evaluation; and

(v) board member roles and responsibilities.

(E) Each board member should be made aware of the continuing education requirements of this section and those of the following:

(i) open meetings act in Texas Government Code, §551.005;

(ii) public information act in Texas Government Code, §552.012; and

(iii) cybersecurity in Texas Government Code, §2054.5191.

(F) The orientation shall be open to any board member who chooses to attend.

[(A) Each new board member shall participate in a local district orientation session within one year before or 120 days after the board member's election or appointment. The purpose of the local orientation is to familiarize new board members with local board policies and procedures and district goals and priorities. The local district orientation shall be at least three hours in length for each new board member. Any sitting board member may attend or participate in the local district orientation. The local district orientation shall address local district practices in the following, in addition to topics chosen by the local district:]

[(i) curriculum and instruction;]

[(ii) business and finance operations;]

[(iii) district operations;]

[(iv) superintendent evaluation; and]

[(v) board member roles and responsibilities.]

[(B) A sitting board member shall receive a basic orientation to the TEC and relevant legal obligations. The orientation shall have special but not exclusive emphasis on statutory provisions related to governing Texas school districts. The orientation shall be delivered by regional education service centers (ESCs) and shall be no less than three hours in length. Topics shall include, but not be limited to, the TEC, Chapter 26 (Parental Rights and Responsibilities), and the TEC, §28.004 (Local School Health Advisory Council and Health Education Instruction). A newly elected or appointed board member of an independent school district shall receive the orientation to the TEC within the first 120 days of service. The orientation to the TEC shall be open to any sitting board member who chooses to attend.]

[(C) After each session of the Texas Legislature, including each regular session and called session related to education, each school board member shall receive an update from an ESC or any registered provider to the basic orientation to the TEC. The update session shall be of sufficient length to familiarize board members with major changes in the code and other relevant legal developments related to school governance. A board member who has attended an ESC basic orientation session that incorporates the most recent legislative changes is not required to attend an update.]

(2) Each school board member of an independent school district shall complete a basic orientation to the TEC and relevant legal obligations.

(A) The orientation shall have special, but not exclusive, emphasis on statutory provisions related to governing Texas school districts.

(B) A candidate for school board may complete the training up to one year before he or she is elected or appointed. A newly elected or appointed school board member who did not complete this training in the year preceding his or her election or appointment must complete the training within 120 calendar days after election or appointment.

(C) The orientation shall be at least three hours in length.

(D) Topics shall include, but not be limited to, the TEC, Chapter 26 (Parental Rights and Responsibilities), and the TEC, §28.004 (Local School Health Advisory Council and Health Education Instruction).

(E) The orientation shall be provided by a regional education service center (ESC).

(F) The orientation shall be open to any board member who chooses to attend.

(3) After each session of the Texas Legislature, including each regular session and called session related to education, each school board member shall complete an update to the basic orientation to the TEC.

(A) The update session shall be of sufficient length to familiarize board members with major changes in statute and other relevant legal developments related to school governance.

(B) The update shall be provided by an ESC or a registered provider, as defined by subsection (c) of this section.

(C) A board member who has attended an ESC basic orientation session described in paragraph (2) of this subsection that incorporated the most recent legislative changes is not required to attend an update.

(D) The continuing education may be fulfilled through online instruction, provided that the training is designed and offered by a registered provider, incorporates interactive activities that assess learning and provide feedback to the learner, and offers an opportunity for interaction with the instructor.

(E) The ESC or registered provider shall determine the clock hours of training credit to be awarded for successful completion of an online course and shall provide verification of completion as required in subsection (h) of this section.

(4) The entire board shall participate with their superintendent in a team-building session.

(A) The purpose of the team-building session is to enhance the effectiveness of the board-superintendent team and to assess the continuing education needs of the board-superintendent team.

(B) The session shall be held annually.

(C) The session shall be at least three hours in length.

(D) The session shall include a review of the roles, rights, and responsibilities of a local board as outlined in the framework for governance leadership described in subsection (a) of this section.

(E) The assessment of needs shall be based on the framework for governance leadership described in subsection (a) of this section and shall be used to plan continuing education activities for the year for the governance leadership team.

(F) The team-building session shall be provided by an authorized provider as described in subsection (d) of this section.

(G) The superintendent's participation in team-building sessions as part of the continuing education for board members shall represent one component of the superintendent's ongoing professional development.

[(2) The entire board, including all board members, shall annually participate with their superintendent in a team-building session facilitated by the ESC or any registered provider. The team-building session shall be at least three hours in length. The purpose of the team-building session is to enhance the effectiveness of the board-superintendent team and to assess the continuing education needs of the board-superintendent team. The session shall include a review of the roles, rights, and responsibilities of a local board as outlined in the framework for governance leadership. The assessment of needs shall be based on the framework for governance leadership and shall be used to plan continuing education activities for the year for the governance leadership team.]

(5) [(3)] In addition to the continuing education requirements in paragraphs (1) through (4) [and (2)] of this subsection, each board member shall complete [receive] additional continuing education [on an annual basis in fulfillment of assessed needs and] based on the framework for governance leadership described in subsection (a) of this section. [The continuing education sessions may be provided by ESCs or other registered providers.]

(A) The purpose of continuing education is to address the continuing education needs referenced in paragraph (4) of this subsection.

(B) The continuing education shall be completed annually.

(C) [(A)] In a board member's first year of service, he or she shall complete [receive] at least ten hours of continuing education in fulfillment of assessed needs. [Up to five of the required ten hours may be fulfilled through online instruction, provided that the training is designed and offered by a registered provider, incorporates interactive activities that assess learning and provide feedback to the learner, and offers an opportunity for interaction with the instructor. The registered provider shall determine the clock hours of training credit to be awarded for successful completion of an online course and shall provide verification of completion as required in subsection (g) of this section.]

(D) [(B)] Following a board member's first year of service, he or she shall complete [receive] at least five hours of continuing education annually in fulfillment of assessed needs. [A board member may fulfill the five hours of continuing education through online instruction, provided that the training is designed and offered by a registered provider, incorporates interactive activities that assess learning and provide feedback to the learner, and offers an opportunity for interaction with the instructor. The registered provider shall determine the clock hours of training credit to be awarded for successful completion of an online course and shall provide verification of completion as required in subsection (g) of this section.]

(E) [(C)] A board president shall complete [receive] continuing education related to leadership duties of a board president as some portion of the annual requirement.

(F) At least 50% of the continuing education shall be designed and delivered by persons not employed or affiliated with the board member's local school district. No more than one hour of the required continuing education that is delivered by the local district may utilize self-instructional materials.

(G) The continuing education shall be provided by an ESC or a registered provider, as defined by subsection (c) of this section.

(H) The continuing education may be fulfilled through online instruction, provided that the training is designed and offered by a registered provider, incorporates interactive activities that assess learning and provide feedback to the learner, and offers an opportunity for interaction with the instructor.

(I) The ESC or registered provider shall determine the clock hours of training credit to be awarded for successful completion of an online course and shall provide verification of completion as required in subsection (h) of this section.

(6) [(4)] Each school board member shall complete continuing education [every two years] on evaluating student academic performance and setting individual campus goals for early childhood literacy and mathematics and college, career, and military readiness.

(A) The purpose of the training on evaluating student academic performance is to provide research-based information to board members that is designed to support the oversight role of the board of trustees outlined in the TEC, §11.1515.

(B) The purpose of the continuing education on setting individual campus goals for early childhood literacy and mathematics and college, career, and military readiness is to facilitate boards meeting the requirements of TEC, §11.185 and §11.186.

(C) [(B)] A candidate for school board may complete the training up to one year before he or she [the candidate] is elected or appointed. A [If a] newly elected or appointed school board member who did not complete this training in the year preceding his or her [the member's] election or appointment [, the member] must complete the training within 120 calendar days after election or appointment. [A returning board member shall complete the training by the second anniversary of the completion of the trustee's previous training.]

(D) The continuing education shall be completed every two years.

[(C) An authorized provider for training on evaluating student academic performance is a provider who is registered pursuant to subsection (f) of this section and has demonstrated proficiency in the content required by subsection (b)(4)(E) of this section. Proficiency may be demonstrated by completing a TEA-approved train-the-trainer course and evaluation on the topic, by being certified as a Lone Star Governance coach, through a review of the provider's qualifications and course design, or through other means as determined by the commissioner of education.]

(E) [(D)] The training [on evaluating student academic performance] shall be at least three hours in length.

(F) [(E)] The continuing education [training] required by this subsection shall include, at a minimum[, the following]:

(i) instruction in school board behaviors correlated with [to] improved student outcomes with emphasis on: [inputs, outcomes, and collaborative student outcome goal setting;]

(I) setting specific, quantifiable student outcome goals; and

(II) adopting plans to improve early literacy and numeracy and college, career, and military readiness for applicable student groups evaluated in the Closing the Gaps domain of the state accountability system established under TEC, Chapter 39;

(ii) instruction in progress monitoring practices to improve student outcomes [with emphasis on progress monitoring practices, formative assessments, interim assessments, and summative assessments]; and

(iii) instruction in state accountability with emphasis on the Texas Essential Knowledge and Skills, state assessment instruments administered under the TEC, Chapter 39, and the state accountability [rating] system established under the TEC, Chapter 39.

(G) The continuing education shall be provided by an authorized provider as defined by subsection (d) of this section.

(H) [(F)] If the training is attended by an entire school board and its superintendent, includes a review of local school district data on student achievement, and otherwise meets the requirements of subsection (b)(4) [(b)(2) ] of this section, the training may serve to meet a school board member's obligation to complete [receive] training under subsection (b)(4) and (6) [(b)(2) and (4)] of this section, as long as the training complies with the Texas Open Meetings Act.

(7) Each board member shall complete continuing education on identifying and reporting potential victims of sexual abuse, human trafficking, and other maltreatment of children in accordance with TEC, §11.159(c)(2).

(A) A candidate for school board may complete the training up to one year before he or she is elected or appointed. A newly elected or appointed school board member who did not complete this training in the year preceding his or her election or appointment must complete the training within 120 calendar days after election or appointment.

(B) The training shall be completed every two years.

(C) The training shall be at least one hour in length.

(D) The training must familiarize board members with the requirements of TEC, §38.004 and §38.0041, and §61.1051 of this title (relating to Reporting Child Abuse or Neglect, Including Trafficking of a Child).

(E) The training required by this subsection shall include, at a minimum:

(i) instruction in best practices of identifying potential victims of child abuse, human trafficking, and other maltreatment of children;

(ii) instruction in legal requirements to report potential victims of child abuse, human trafficking, and other maltreatment of children; and

(iii) instruction in resources and organizations that help support victims and prevent child abuse, human trafficking, and other maltreatment of children.

(F) The training sessions shall be provided by a registered provider as defined by subsection (c) of this section.

(G) This training may be completed online, provided that the training is designed and offered by a registered provider, incorporates interactive activities that assess learning and provide feedback to the learner, and offers an opportunity for interaction with the instructor.

(H) The registered provider shall determine the clock hours of training credit to be awarded for successful completion of an online course and shall provide verification of completion as required in subsection (h) of this section.

(c) For the purposes of this section, a registered provider has demonstrated proficiency in the content required for a specific training. A private or professional organization, school district, government agency, college/university, or private consultant shall register with the TEA to provide the board member continuing education required in subsection (b)(3), (5), and (7) of this section.

(1) The registration process shall include documentation of the provider's training and/or expertise in the activities and areas covered in the framework for governance leadership.

(2) An updated registration shall be required of a provider of continuing education every three years.

(3) A school district that provides continuing education exclusively for its own board members is not required to register.

(4) An ESC is not required to register under this subsection.

(d) An authorized provider meets all the requirements of a registered provider and has demonstrated proficiency in the content required in subsection (b)(4) and (6) of this section. Proficiency may be demonstrated by completing a TEA-approved train-the-trainer course that includes evaluation on the topics and following a review of the provider's qualifications and course design, or through other means as determined by the commissioner.

(1) A private or professional organization, school district, government agency, college/university, or private consultant may be authorized by TEA to provide the board member training required in subsection (b)(4) and (6) of this section.

(2) An ESC shall be authorized by TEA to provide the board member training required in subsection (b)(4) and (6) of this section.

(3) The authorization process shall include documentation of the provider's training and/or expertise in the activities and areas covered in the framework for governance leadership.

(4) An updated authorization shall be required of a provider of training every three years.

(e) [(c)] No continuing education shall take place during a school board meeting unless that meeting is called expressly for the delivery of board member continuing education. However, continuing education may take place prior to or after a legally called board meeting in accordance with the provisions of the Texas Government Code, §551.001(4).

(f) [(d)] An ESC board member continuing education program shall be open to any interested person, including a current or prospective board member. A district is not responsible for any costs associated with individuals who are not current board members.

(g) [(e)] A registration fee shall be determined by ESCs to cover the costs of providing continuing education programs offered by ESCs.

[(f) A private or professional organization, school district, government agency, college/university, or private consultant shall register with the TEA to provide the board member continuing education required in subsection (b)(1)(C) and (2)-(4) of this section.]

[(1) The registration process shall include documentation of the provider's training and/or expertise in the activities and areas covered in the framework for governance leadership.]

[(2) An updated registration shall be required of a provider of continuing education every three years.]

[(3) A school district that provides continuing education exclusively for its own board members is not required to register.]

[(4) An ESC is not required to register under this subsection.]

(h) [(g)] For each training described in this section, the [The] provider of continuing education shall provide verification of completion of board member continuing education to the individual participant and to the participant's school district. The verification must include the provider's authorization or registration number.

[(h) At least 50% of the continuing education required in subsection (b)(3) of this section shall be designed and delivered by persons not employed or affiliated with the board member's local school district. No more than one hour of the required continuing education that is delivered by the local district may utilize self-instructional materials.]

(i) To the extent possible, the entire board shall participate in continuing education programs together.

(j) At the last regular meeting of the board of trustees before an election of trustees, the current president of each local board of trustees shall announce the name of each board member who has completed the required continuing education, who has exceeded the required hours of continuing education, and who is deficient in meeting the required continuing education as of the anniversary of the date of each board member's election or appointment to the board or two-year anniversary of his or her previous training, as applicable. The announcement shall state that completing the required continuing education is a basic obligation and expectation of any sitting board member under SBOE rule. The minutes of the last regular board meeting before an election of trustees must reflect whether each trustee has met or is deficient in meeting the training required for the trustee as of the first anniversary of the date of the trustee's election or appointment or two-year anniversary of his or her previous training, as applicable. The president shall cause the minutes of the local board to reflect the announcement and, if the minutes reflect that a trustee is deficient in training as of the anniversary of his or her joining the board, the district shall post the minutes on the district's Internet website within 10 business days of the meeting and maintain the posting until the trustee meets the requirements.

(k) Annually, the SBOE shall commend those local board-superintendent teams that complete [receive] at least eight hours of the continuing education specified in subsection (b)(4) and (5) [(b)(2) and (3)] of this section as an entire board-superintendent team.

(l) Annually, the SBOE shall commend local board-superintendent teams that effectively implement the commissioner's trustee improvement and evaluation tool developed under the TEC, §11.182, or any other tool approved by the commissioner.

§61.2.Nomination of Trustees for Military Reservation School Districts and Boys Ranch Independent School District.

(a) In nominating trustee candidates for military reservation school districts, the commanding officer of the military reservation shall do the following:

(1) submit a list to the commissioner of education with at least one nominee [three nominees] for each vacancy. A majority of the trustees appointed to the school board must be civilian, and all may be civilian. When two or more vacancies occur simultaneously, a list of at least one nominee [three different nominees] for each vacancy shall be submitted. In cases when the commanding officer wishes to reappoint existing board members, a list of at least one nominee [three nominees] for each vacancy must still be submitted. Nominees not selected for existing vacancies may be resubmitted as candidates for subsequent vacancies. The commanding officer may rank in the order of preference the nominees submitted for each vacancy;

(2) submit a statement that verifies that each of the nominees is qualified under the general school laws of Texas and lives or is employed on the military reservation;

(3) submit a copy of a current biographical vita (resume) for each nominee [of the nominees], with a signature by the nominee attesting truth to the contents of the biographical vita;

(4) submit a statement from each nominee that [of the nominees which] expresses the nominee's willingness to accept appointment and to serve in such a capacity with full adherence to the state-established standards on the duties and responsibilities of school board members;

(5) submit a signed statement that [which] expresses recognition of the powers of the board of trustees to govern and manage the operations of the military reservation school districts;

(6) submit a signed statement regarding the governance and management operations of the district that [which] expresses recognition that the role of the commanding officer of the military reservation is limited only to the duty defined by statute in the process for appointing members of the board of trustees; and

(7) submit a statement that the membership composition of the entire board of trustees is in full compliance with the provisions of the Texas Education Code (TEC), §11.352.

(b) In nominating trustee candidates for the Boys Ranch Independent School District (ISD), the president and chief executive officer of the Cal Farley's Boys Ranch shall do the following:

(1) submit a name to the commissioner for each vacancy. When two or more vacancies occur simultaneously, a name for each vacancy shall be submitted. In cases when the president and chief executive officer wishes to reappoint existing board members, the name of the existing board member for each vacancy must still be submitted;

(2) submit a statement that verifies that each of the nominees is qualified under the general school laws of Texas;

(3) submit a copy of a current biographical vita (resume) for each of the nominees, with a signature by the nominee attesting truth to the contents of the biographical vita;

(4) submit a statement from each of the nominees that [which] expresses the nominee's willingness to accept appointment and to serve in such a capacity with full adherence to the state-established standards on the duties and responsibilities of school board members;

(5) submit a signed statement that [which] expresses recognition of the powers of the board of trustees to govern and manage the operations of the Boys Ranch ISD;

(6) submit a signed statement regarding the governance and management operations of the district that [which] expresses recognition that the role of the superintendent is in full compliance with the provisions of the TEC, §11.201; and

(7) submit a statement that the membership composition of the entire board of trustees is in full compliance with the provisions of the TEC, §11.352.

(c) A member of a board of trustees appointed under the TEC, §11.352, and this section will serve a term of two years. A member of the board of trustees, who during the period of the term of office resigns from office or experiences a change of status that disqualifies such member for appointment under the provisions of the TEC, shall become ineligible to serve at the time of the change of status. A board vacancy resulting from such resignation or disqualification shall be filled in accordance with the procedures established under the TEC, §11.352, and this section.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on December 9, 2019.

TRD-201904619

Cristina De La Fuente-Valadez

Director, Rulemaking

Texas Education Agency

Earliest possible date of adoption: January 19, 2020

For further information, please call: (512) 475-1497


CHAPTER 74. CURRICULUM REQUIREMENTS

SUBCHAPTER C. OTHER PROVISIONS

19 TAC §74.26

The State Board of Education (SBOE) proposes an amendment to §74.26, concerning award of credit. The proposed amendment would update the rule to clarify that a district may award credit proportionately for successful completion of half of a course regardless of the time duration of the course.

BACKGROUND INFORMATION AND JUSTIFICATION: For students to earn state credit toward specific graduation requirements, a course must be approved by the SBOE and included in SBOE rule. Section 74.26 addresses the award of credit by a school district for high school courses. The rule outlines the general provisions for the award of credit toward state graduation requirements, including the award of credit for transfer students and students who complete high school courses in earlier grade levels and academic requirements for the award of credit. The rule also permits districts to award credit proportionately to students who are able to successfully complete only one semester of a two-semester course.

At the January-February 2018 SBOE meeting, the board approved for second reading and final adoption revisions to the award of credit for International Baccalaureate (IB) courses for 19 TAC Chapters 110, 111, 112, and 114. At the April 2018 SBOE meeting, the board approved for second reading and final adoption revisions to the award of credit for Advanced Placement (AP) and IB courses for 19 TAC Chapters 113, 118, and 126.

A discussion item regarding 19 TAC §74.26 was included on the agenda for the Committee on Instruction during the September 2019 SBOE meeting. At that time, the committee instructed staff to prepare a proposal to update the rule to clarify that districts may award credit proportionately for successful completion of half of a course regardless of the time duration of the course for consideration by the committee and the board.

The proposed amendment would specify in subsections (d) and (e) that a district may award credit proportionately for successful completion of half of a course.

The SBOE approved the proposed amendment for first reading and filing authorization at its November 15, 2019 meeting.

FISCAL IMPACT: Monica Martinez, associate commissioner for standards and support services, has determined that for the first five-year period the proposal is in effect there are no additional costs to state or local government required to comply with the proposal.

LOCAL EMPLOYMENT IMPACT: The proposal has no effect on local economy; therefore, no local employment impact statement is required under Texas Government Code, §2001.022.

SMALL BUSINESS, MICROBUSINESS, AND RURAL COMMUNITY IMPACT: The proposal has no direct adverse economic impact for small businesses, microbusinesses, or rural communities; therefore, no regulatory flexibility analysis specified in Texas Government Code, §2006.002, is required.

COST INCREASE TO REGULATED PERSONS: The proposal does not impose a cost on regulated persons, another state agency, a special district, or a local government and, therefore, is not subject to Texas Government Code, §2001.0045.

TAKINGS IMPACT ASSESSMENT: The proposal does not impose a burden on private real property and, therefore, does not constitute a taking under Texas Government Code, §2007.043.

GOVERNMENT GROWTH IMPACT: TEA staff prepared a Government Growth Impact Statement assessment for this proposed rulemaking. The proposed rulemaking would expand an existing regulation by allowing districts to award credits proportionately to students who have completed half of a course and who are in the process of completing a course for high school graduation requirements regardless of the duration of the course.

The proposed rulemaking would not create or eliminate a government program; would not require the creation of new employee positions or elimination of existing employee positions; would not require an increase or decrease in future legislative appropriations to the agency; would not require an increase or decrease in fees paid to the agency; would not create a new regulation; would not limit or repeal an existing regulation; would not increase or decrease the number of individuals subject to its applicability; and would not positively or adversely affect the state's economy.

PUBLIC BENEFIT AND COST TO PERSONS: Ms. Martinez has determined that for each year of the first five years the proposal is in effect, the public benefit anticipated as a result of enforcing the proposal would be providing districts flexibility to award credits proportionately to students for successful completion of half of a course regardless of the time duration of the course. There is no anticipated economic cost to persons who are required to comply with the proposal.

DATA AND REPORTING IMPACT: The proposal would have no new data and reporting impact.

PRINCIPAL AND CLASSROOM TEACHER PAPERWORK REQUIREMENTS: TEA has determined that the proposal would not require a written report or other paperwork to be completed by a principal or classroom teacher.

PUBLIC COMMENTS: The public comment period on the proposal begins December 20, 2019, and ends January 24, 2020. A form for submitting public comments is available on the TEA website at https://tea.texas.gov/About_TEA/Laws_and_Rules/SBOE_Rules_(TAC)/Proposed_State_Board_of_Education_Rules/. Comments on the proposal may also be submitted to Cristina De La Fuente-Valadez, Rulemaking, Texas Education Agency, 1701 North Congress Avenue, Austin, Texas 78701. The SBOE will take registered oral and written comments on the proposal at the appropriate committee meeting in January 2020 in accordance with the SBOE board operating policies and procedures. A request for a public hearing on the proposal submitted under the Administrative Procedure Act must be received by the commissioner of education not more than 14 calendar days after notice of the proposal has been published in the Texas Register on December 20, 2019.

STATUTORY AUTHORITY. The amendment is proposed under Texas Education Code (TEC), §7.102(c)(4), which requires the State Board of Education (SBOE) to establish curriculum and graduation requirements; and TEC, §28.025(a), which requires the SBOE to by rule determine the curriculum requirements for the foundation high school graduation program that are consistent with the required curriculum under the TEC, §28.002.

CROSS REFERENCE TO STATUTE. The amendment implements Texas Education Code, §7.102(c)(4) and §28.025(a).

§74.26.Award of Credit.

(a) The award of credit for a course by a school district affirms that a student has satisfactorily met all state and local requirements. Any course for which credit is awarded must be provided according to this subsection.

(1) Credit earned toward state graduation requirements by a student in an accredited school district shall be transferable and must be accepted by any other school district in the state. A district may not prohibit a new student from attending school pending receipt of transcripts or records from the school district the student previously attended. Credit earned in a local-credit course may be transferred only with the consent of the receiving school district.

(2) A school district must ensure that the records or transcripts of an out-of-state or out-of-country transfer student (including foreign exchange students) or a transfer student from a Texas nonpublic school are evaluated and that the student is placed in appropriate classes promptly. The district may use a variety of methods to verify the content of courses for which a transfer student has earned credit.

(b) Districts may offer courses designated for Grades 9-12 (refer to §74.11 of this title (relating to High School Graduation Requirements)) in earlier grade levels. A course must be considered completed and credit must be awarded if the student has demonstrated achievement by meeting the standard requirements of the course, including demonstrated proficiency in the subject matter, regardless of the time the student has received instruction in the course or the grade level at which proficiency was attained. The academic achievement record (transcript) shall reflect that students have satisfactorily completed courses at earlier grade levels than Grades 9-12 and have been awarded state graduation credits.

(c) Credit for courses for high school graduation may be earned only if the student received a grade which is the equivalent of 70 on a scale of 100, based upon the essential knowledge and skills for each course.

(d) In accordance with local district policy, students who are able to successfully complete only half of a [one semester of a two-semester] course can be awarded credit proportionately.

(e) A school district shall award credit proportionately to a student who is homeless or in substitute care who successfully completes only half of a [one semester of a two-semester] course.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on December 9, 2019.

TRD-201904620

Cristina De La Fuente-Valadez

Director, Rulemaking

Texas Education Agency

Earliest possible date of adoption: January 19, 2020

For further information, please call: (512) 475-1497


CHAPTER 89. ADAPTATIONS FOR SPECIAL POPULATIONS

SUBCHAPTER BB. COMMISSIONER'S RULES CONCERNING STATE PLAN FOR EDUCATING ENGLISH LANGUAGE LEARNERS

The Texas Education Agency (TEA) proposes amendments to §§89.1201, 89.1203, 89.1205, 89.1207, 89.1210, 89.1215, 89.1220, 89.1226, 89.1228, 89.1233, 89.1240, 89.1245, 89.1250, and 89.1265, and the repeal of §89.1225, concerning the state plan for educating English language learners. The proposed revisions would update the rules to use more current terminology, provide clarifications, make technical edits, and remove outdated provisions.

BACKGROUND INFORMATION AND JUSTIFICATION: In accordance with the TEC, Chapter 29, Subchapter B, Bilingual Education and Special Language Programs, the commissioner exercised rulemaking authority to establish rules to guide the implementation of bilingual education and special language programs. The commissioner's rules in 19 TAC Chapter 89, Subchapter BB, establish the policy that every student in the state who has a primary language other than English and who is identified as an English learner shall be provided a full opportunity to participate in a bilingual education or English as a second language (ESL) program. These rules outline the requirements of the bilingual education and ESL programs, including program content and design, home language survey, the language proficiency assessment committee (LPAC), testing and classification, facilities, parental authority and responsibility, staffing and staff development, required summer school programs, and evaluation.

The proposed revisions to 19 TAC Chapter 89, Subchapter BB, would update rules to use more current terminology, provide clarification, make technical edits, and remove outdated provisions. Specifically, the following changes would be made.

Section 89.1201, Policy, would be amended to update terminology.

Section 89.1203, Definitions, would be amended to update definitions for terms used in Chapter 89, Subchapter BB, including replacement of the term "special language program" with "ESL program" to align with current terminology. The proposed amendment would also add definitions for prekindergarten, alternative language program, and parent.

Section 89.1205, Required Bilingual Education and English as a Second Language Programs, would be amended to provide clarity regarding the language classification of the student and to align with current terminology.

Section 89.1207, Bilingual Education Exceptions and English as a Second Language Waivers, would be amended to update terminology and to add the alternative language program in the description of requirements to be included when submitting a request for a bilingual education exception or an ESL waiver. The proposed new definition would provide clearer guidance when districts submit an exception and/or a waiver and align to the characteristics of those classrooms.

Section 89.1210, Program Content and Design, would be amended to remove reference to §89.1225, Testing and Classification of Students, and update the reference to §89.1226. Additional technical edits would also be made, including updating the term "exit" to "reclassification" to align with the Every Student Succeeds Act (ESSA) requirements.

Section 89.1215, Home Language Survey, would be amended to update terminology on the survey to align with TEC and to provide more specific guidance to districts on the responsibility to ensure parents understand the survey. Reference to §89.1225 would also be removed and the reference to §89.1226 would be updated.

Section 89.1220, Language Proficiency Assessment Committee, would be amended to remove reference to §89.1225 and update the reference to §89.1226. Additional technical edits would also be made, including updating the term "exit" to "reclassification" to align with ESSA requirements.

Section 89.1225, Testing and Classification of Students, would be repealed since those provisions applied to school years prior to 2019-2020. The proposed repeal would remove outdated provisions, which are replaced with §89.1226.

Section 89.1226, Testing and Classification of Students, Beginning with School Year 2019-2020, would be amended to reflect the use of a single state-approved assessment for identification. Additional technical edits would also be made, including updating the term "exit" to "reclassification" or "reclassified" to align with ESSA requirements. The section title would be updated to remove the phrase "Beginning with School Year 2019-2020." The proposed amendment would implement the replacement of outdated provisions regarding testing and classification of students.

Section 89.1228, Two-Way Dual Language Immersion Program Model Implementation, would be amended to update terminology and clarify appropriate assessment options for English proficient students. The proposed amendment would provide clearer guidance on English proficient students in a dual language two-way program.

Section 89.1233, Participation of English Proficient Students, would be amended to update terminology from "students who are not English learners" to "English proficient students."

Section 89.1240, Parental Authority and Responsibility, would be amended to remove reference to §89.1225 and update the reference to §89.1226. The proposed amendment would also update the rule to align with HB 3, 86th Texas Legislature, 2019, which will now allow English proficient students and reclassified English learners in dual language programs to generate the bilingual education allotment. Additional technical edits would also be made, including updating the term "exit" to "reclassification" to align with ESSA requirements.

Section 89.1245, Staffing and Staff Development, would be amended to update terminology from English learners identified as "gifted and talented and English learners with disabilities" to English learners "with multiple needs and/or exceptionalities." The proposed amendment would align the rule with current terminology for students who are dually identified as an English learner and in special education.

Section 89.1250, Required Summer School Programs, would be amended to remove reference to §89.1225 and update the reference to §89.1226. Additional technical edits would also be made.

Section 89.1265, Evaluation, would be amended to update terminology from "exit" to "reclassified" to align with ESSA requirements.

FISCAL IMPACT: Matt Montano, deputy commissioner for special populations, has determined that for the first five-year period the proposal is in effect there are no additional costs to state or local government, including school districts and open-enrollment charter schools, required to comply with the proposal.

LOCAL EMPLOYMENT IMPACT: The proposal has no effect on local economy; therefore, no local employment impact statement is required under Texas Government Code, §2001.022.

SMALL BUSINESS, MICROBUSINESS, AND RURAL COMMUNITY IMPACT: The proposal has no direct adverse economic impact for small businesses, microbusinesses, or rural communities; therefore, no regulatory flexibility analysis, specified in Texas Government Code, §2006.002, is required.

COST INCREASE TO REGULATED PERSONS: The proposal does not impose a cost on regulated persons, another state agency, a special district, or a local government and, therefore, is not subject to Texas Government Code, §2001.0045.

TAKINGS IMPACT ASSESSMENT: The proposal does not impose a burden on private real property and, therefore, does not constitute a taking under Texas Government Code, §2007.043.

GOVERNMENT GROWTH IMPACT: TEA staff prepared a Government Growth Impact Statement assessment for this proposed rulemaking. During the first five years the proposed rulemaking would be in effect, it would repeal an existing regulation. The proposal would repeal §89.1225, relating to the testing and classification of students for school years prior to 2019-2020. Section 89.1225 is no longer needed with implementation of §89.1226.

The proposed rulemaking would not create or eliminate a government program; would not require the creation of new employee positions or elimination of existing employee positions; would not require an increase or decrease in future legislative appropriations to the agency; would not require an increase or decrease in fees paid to the agency; would not create a new regulation; would not expand or limit an existing regulation; would not increase or decrease the number of individuals subject to the rule's applicability; and would not positively or adversely affect the state's economy.

PUBLIC BENEFIT AND COST TO PERSONS: Mr. Montano has determined that for each year of the first five years the proposal is in effect, the public benefit anticipated as a result of enforcing the proposal would be further clarification of the rules for serving English learners. There is no anticipated economic cost to persons who are required to comply with the proposal.

DATA AND REPORTING IMPACT: The proposal would have no data and reporting impact.

PRINCIPAL AND CLASSROOM TEACHER PAPERWORK REQUIREMENTS: The TEA has determined that the proposal would not require a written report or other paperwork to be completed by a principal or classroom teacher.

PUBLIC COMMENTS: The public comment period on the proposal begins December 20, 2019, and ends January 20, 2020. A request for a public hearing on the proposal submitted under the Administrative Procedure Act must be received by the commissioner of education not more than 14 calendar days after notice of the proposal has been published in the Texas Register on December 20, 2019. A form for submitting public comments is available on the TEA website at https://tea.texas.gov/About_TEA/Laws_and_Rules/Commissioner_Rules_(TAC)/Proposed_Commissioner_of_Education_Rules/. Comments on the proposal may also be submitted to Cristina De La Fuente-Valadez, Rulemaking, Texas Education Agency, 1701 North Congress Avenue, Austin, Texas 78701.

19 TAC §§89.1201, 89.1203, 89.1205, 89.1207, 89.1210, 89.1215, 89.1220, 89.1226, 89.1228, 89.1233, 89.1240, 89.1245, 89.1250, 89.1265

STATUTORY AUTHORITY. The amendments are proposed under Texas Education Code (TEC), §29.051, which establishes the policy of the state to ensure equal educational opportunity to students with limited English proficiency through the provision of bilingual education and special language programs in the public schools and supplemental financial assistance to help school districts meet the extra costs of the programs; TEC, §29.052, which describes the definitions for both a student and a parent when used throughout TEC, Chapter 29, Subchapter B; TEC, §29.053, which outlines requirements for reporting the number of students with limited English proficiency in school districts and explains the criteria for determining whether a district is required to provide bilingual education or special language programs at the elementary and secondary school levels; TEC, §29.054, which describes the application process and documentation requirements for school districts filing a bilingual education exception; TEC, §29.055, which establishes basic requirements in the content and methods of instruction for the state's bilingual education and special language programs; TEC, §29.056, which authorizes the state to establish standardized criteria for the identification, assessment, and classification of students of limited English proficiency and describes required procedures for the identification, placement, and exiting of students with limited English proficiency; TEC, §29.0561, which provides information regarding requirements for the reevaluation and monitoring of students with limited English proficiency for two years after program exit; TEC, §29.057, which requires that bilingual education and special language programs be located in the regular public schools rather than separate facilities, that students with limited English proficiency are placed in classes with other students of similar age and level of educational attainment, and that a maximum student-teacher ratio be set by the state that reflects student needs; TEC, §29.058, which authorizes districts to enroll students who do not have limited English proficiency in bilingual education programs, with a maximum enrollment of such students set at 40% of the total number of students enrolled in the program; TEC, §29.059, which allows school districts flexibility to join other districts to provide services for students with limited English proficiency; TEC, §29.060, which describes requirements for offering summer school programs for students with limited English proficiency eligible to enter kindergarten or Grade 1 in the subsequent school year; TEC, §29.061, which describes teacher certification requirements for educators serving students with limited English proficiency in bilingual education and special language programs; TEC, §29.062, which authorizes the state to evaluate the effectiveness of programs under TEC, Chapter 29, Subchapter B; TEC, §29.063, which explains the roles and responsibilities of the language proficiency assessment committee and describes the composition of its membership; TEC, §29.064, which allows for a parent appeals process; and TEC, §29.066, which provides information regarding a school district's coding of students participating in bilingual education and special language programs through the Texas Student Data System Public Education Information Management System (TSDS PEIMS).

CROSS REFERENCE TO STATUTE. The amendments implement Texas Education Code, §§29.051-29.056, 29.0561, 29.057-29.064, and 29.066.

§89.1201.Policy.

(a) It is the policy of the state that every student in the state who has a primary language other than English and who is identified as an English learner shall be provided a full opportunity to participate in a bilingual education or English as a second language (ESL) program, as required in the Texas Education Code (TEC), Chapter 29, Subchapter B. To ensure equal educational opportunity, as required in the TEC, §1.002(a), each school district shall:

(1) identify English learners based on criteria established by the state;

(2) provide bilingual education and ESL programs, as integral parts of the general program as described in the TEC, §4.002;

(3) seek appropriately certified teaching personnel to ensure that English learners are afforded full opportunity to master the essential knowledge and skills required by the state; and

(4) assess achievement for essential knowledge and skills in accordance with the TEC, Chapter 29, to ensure accountability for English learners and the schools that serve them.

(b) The goal of bilingual education programs shall be to enable English learners to become proficient [competent ] in listening, speaking, reading, and writing in the English language through the development of literacy and academic skills in the primary language and English. Such programs shall emphasize the mastery of English language skills, as well as mathematics, science, and social studies, as integral parts of the academic goals for all students to enable English learners to participate equitably in school.

(c) The goal of ESL programs shall be to enable English learners to become proficient [competent] in listening, speaking, reading, and writing in the English language through the integrated use of second language acquisition methods. The ESL program shall emphasize the mastery of English language skills, as well as mathematics, science, and social studies, as integral parts of the academic goals for all students to enable English learners to participate equitably in school.

(d) Bilingual education and ESL programs shall be integral parts of the total school program. Such programs shall use instructional approaches designed to meet the specific language needs of English learners. The basic curriculum content of the programs shall be based on the Texas Essential Knowledge and Skills and the English language proficiency standards required by the state.

§89.1203.Definitions.

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

(1) Bilingual education allotment--An adjusted basic funding allotment provided for each school district based on student average daily attendance in a bilingual education or English as a second language (ESL) [special language] program in accordance with Texas Education Code (TEC), §42.153.

(2) Certified English as a second language teacher--The term "certified English as a second language teacher" as used in this subchapter is synonymous with the term "professional transitional language educator" used in TEC, §29.063.

(3) Dual language immersion--A state-approved bilingual program model in accordance with TEC, §29.066.

(4) Dual-language instruction--An educational approach that focuses on the use of English and the student's primary language for instructional purposes.

(5) English as a second language program--A special language program in accordance with TEC, Chapter 29, Subchapter B.

(6) English language proficiency standards (ELPS)--Standards to be published along with the Texas Essential Knowledge and Skills for each subject in the required curriculum outlined in Chapter 74 of this title (relating to Curriculum Requirements), including foundation and enrichment areas, ELPS, and college and career readiness standards.

(7) English learner (EL)--A student who is in the process of acquiring English and has another language as the student's primary or home language. The terms English language learner (ELL) and English learner are used interchangeably and are synonymous with limited English proficient (LEP) student, as used in TEC, Chapter 29, Subchapter B.

(8) Exit--The point when a student is no longer classified as LEP/EL [LEP] (i.e., the student is reclassified), no longer requires bilingual or ESL [special language] program services, and is classified as non-LEP/English proficient (EP) [non-LEP] in the Texas Student Data System Public Education Information Management System (TSDS PEIMS). The term "exit" as used in this subchapter is synonymous with the description in TEC, Chapter 29, of "transferring out" of bilingual or special language programming.

(9) Reclassification--The process by which the language proficiency assessment committee determines that an English learner has met the appropriate criteria to be classified as non-LEP/EP [non-LEP] and is coded as such in TSDS PEIMS.

(10) School district--For the purposes of this subchapter, the definition of a school district includes a local education agency, an open-enrollment charter school, and a district of innovation.

(11) Prekindergarten--For purposes of this subchapter, prekindergarten describes students enrolled in a 3- or 4-year-old prekindergarten program, as well as 3- or 4-year-old students enrolled in an early education setting.

(12) Alternative language program--A program that meets the affective, linguistic, and cognitive needs of ELs and equips the teacher under a bilingual education or ESL waiver described in §89.1207 of this title (relating to Bilingual Education Exceptions and English as a Second Language Waivers) through the comprehensive professional development plan.

(13) Parent--The term "parent" as used in this subchapter includes the parent or legal guardian of the student in accordance with TEC, §29.052.

§89.1205.Required Bilingual Education and English as a Second Language Programs.

(a) Each school district that has an enrollment of 20 or more English learners in any language classification in the same grade level district-wide shall offer a bilingual education program as described in subsection (b) of this section for the English learners in prekindergarten through the elementary grades with that language classification [who speak that language]. "Elementary grades" shall include at least prekindergarten through Grade 5; sixth grade shall be included when clustered with elementary grades.

(b) A school district required to [shall] provide a bilingual education program as described in subsection (a) of this section shall offer [by offering] dual-language instruction (English and primary language) in prekindergarten through the elementary grades, using one of the four bilingual program models described in §89.1210 of this title (relating to Program Content and Design).

(c) All English learners for whom a school district is not required to offer a bilingual education program shall be provided an English as a second language (ESL) program as described in subsection (d) of this section, regardless of the students' grade levels and primary language, and regardless of the number of such students, except in cases where a district exercises the option described in subsection (g) of this section.

(d) A school district required to provide an ESL program as described in subsection (c) of this section shall provide [ESL instruction by offering] an ESL program using one of the two models described in §89.1210 of this title.

(e) School districts may join with other school districts to provide bilingual education or ESL programs.

(f) In addition to the required bilingual and/or ESL programs, school districts are authorized to establish a bilingual education program even if they have an enrollment of fewer than 20 English learners in any language classification in the same grade level district-wide and are not required to do so under subsection (a) of this section. Under this authorization, school districts shall adhere to all program requirements as described in §§89.1210 of this title, 89.1227 of this title (relating to Minimum Requirements for Dual Language Immersion Program Model), 89.1228 of this title (relating to Two-Way Dual Language Immersion Program Model Implementation), and 89.1229 of this title (relating to General Standards for Recognition of Dual Language Immersion Program Models).

(g) In addition to the required bilingual and/or ESL programs, school districts are authorized to establish a bilingual education program at grade levels in which the bilingual education program is not required under subsection (a) of this section. Under this authorization, school districts shall adhere to all program requirements as described in §§89.1210, 89.1227, 89.1228, and 89.1229 of this title.

§89.1207.Bilingual Education Exceptions and English as a Second Language Waivers.

(a) Bilingual education program.

(1) Exceptions. A school district that is unable to provide a bilingual education program as required by §89.1205(a) of this title (relating to Required Bilingual Education and English as a Second Language Programs) because of an insufficient number of appropriately certified teachers shall request from the commissioner of education an exception to the bilingual education program and the approval of an alternative language program as defined in §89.1203(12) of this title (relating to Definitions). English learners with parental approval for program services under a bilingual education exception will be included in the bilingual education allotment designated for an alternative language program. The approval of an exception to the bilingual education program shall be valid only during the school year for which it was granted. A request for a bilingual education program exception must be submitted by November 1 and shall include:

(A) a statement of the reasons the school district is unable to provide a sufficient number of appropriately certified teachers to offer the bilingual education program with supporting documentation;

(B) a description of the alternative language [instructional] program and methods to meet the affective, linguistic, and cognitive needs of the English learners, including the manner through which the students will be given opportunity to master the essential knowledge and skills required by Chapter 74 of this title (relating to Curriculum Requirements) to include foundation and enrichment areas, English language proficiency standards (ELPS), and college and career readiness standards (CCRS);

(C) an assurance that appropriately certified teachers available in the school district will be assigned to grade levels beginning at prekindergarten followed successively by subsequent grade levels to ensure that the linguistic and academic needs of the English learners with beginning levels of English proficiency are served on a priority basis;

(D) an assurance that the school district will implement a comprehensive professional development plan that:

(i) is ongoing and targets the development of the knowledge, skills, and competencies needed to serve the needs of English learners;

(ii) includes the teachers who are not certified or not appropriately certified who are assigned to implement the proposed alternative language program; and

(iii) may include additional teachers who work with English learners;

(E) an assurance that at least 10% of the total bilingual education allotment shall be used to fund the comprehensive professional development plan required under subparagraph (D) of this paragraph when applying for a bilingual education exception, ESL waiver, or both;

(F) an assurance that the school district will take actions to ensure that the program required under §89.1205(a) of this title will be provided the subsequent year, including its plans for recruiting an adequate number of appropriately certified teachers to eliminate the need for subsequent exceptions and measurable targets for the subsequent year; and

(G) an assurance that the school district shall satisfy the additional reporting requirements described in §89.1265(c) of this title (relating to Evaluation).

(2) Documentation. A school district submitting a bilingual education exception shall maintain written records of all documents supporting the submission and assurances listed in paragraph (1) of this subsection, including:

(A) a description of the proposed alternative language [instructional] program designed to meet the affective, linguistic, and cognitive needs of the English learners;

(B) the number of teachers for whom a bilingual education exception is needed by grade level and per campus;

(C) a copy of the school district's comprehensive professional development plan; and

(D) a copy of the bilingual allotment budget documenting that a minimum of 10% of the funds were used to fund the comprehensive professional development plan.

(3) Approval of exceptions. Bilingual education program exceptions will be granted by the commissioner if the requesting school district:

(A) meets or exceeds the state average for English learner performance on the required state assessments;

(B) meets the requirements and measurable targets of the action plan described in paragraph (1)(F) of this subsection submitted the previous year and approved by the Texas Education Agency (TEA); or

(C) reduces by 25% the number of teachers under exception for bilingual programs when compared to the number of exceptions granted the previous year.

(4) Denial of exceptions. A school district denied a bilingual education program exception must submit to the commissioner a detailed action plan for complying with required regulations for the following school year.

(5) Appeals. A school district denied a bilingual education program exception may appeal to the commissioner or the commissioner's designee. The decision of the commissioner or commissioner's designee is final and may not be appealed further.

(6) Special accreditation investigation. The commissioner may authorize a special accreditation investigation under the Texas Education Code (TEC), §39.057, if a school district is denied a bilingual education program exception for more than three consecutive years.

(7) Sanctions. Based on the results of a special accreditation investigation, the commissioner may take appropriate action under the TEC, §39.102.

(b) English as a second language (ESL) program.

(1) Waivers. A school district that is unable to provide an ESL program as required by §89.1205(c) of this title because of an insufficient number of appropriately certified teachers shall request from the commissioner a waiver of the certification requirements for each teacher who will provide instruction in ESL for English learners and the approval of an alternative language program as defined in §89.1203(12) of this title. English learners with parental approval for program services under an ESL waiver will be included in the bilingual education allotment designated for an alternative language program. The approval of a waiver of certification requirements shall be valid only during the school year for which it was granted. A request for an ESL program waiver must be submitted by November 1 and shall include:

(A) a statement of the reasons the school district is unable to provide a sufficient number of appropriately certified teachers to offer the ESL program;

(B) a description of the alternative language [instructional] program, including the manner in which the teachers in the ESL program will meet the affective, linguistic, and cognitive needs of the English learners, including the manner through which the students will be given opportunity to master the essential knowledge and skills required by Chapter 74 of this title to include foundation and enrichment areas, ELPS, and CCRS;

(C) an assurance that appropriately certified teachers available in the school district will be assigned to grade levels beginning at prekindergarten followed successively by subsequent grade levels in the elementary school campus and, if needed, secondary campuses, to ensure that the linguistic and academic needs of the English learners with the lower levels of English proficiency are served on a priority basis;

(D) an assurance that the school district shall implement a comprehensive professional development plan that:

(i) is ongoing and targets the development of the knowledge, skills, and competencies needed to serve the needs of English learners;

(ii) includes the teachers who are not certified or not appropriately certified who are assigned to implement the proposed alternative language program; and

(iii) may include additional teachers who work with English learners;

(E) an assurance that at least 10% of the total bilingual education allotment shall be used to fund the comprehensive professional development plan required under subparagraph (D) of this paragraph when applying for a bilingual education exception, ESL waiver, or both;

(F) an assurance that the school district will take actions to ensure that the program required under §89.1205(c) of this title will be provided the subsequent year, including its plans for recruiting an adequate number of appropriately certified teachers to eliminate the need for subsequent waivers; and

(G) an assurance that the school district shall satisfy the additional reporting requirements described in §89.1265(c) of this title.

(2) Documentation. A school district submitting an ESL waiver shall maintain written records of all documents supporting the submission and assurances listed in paragraph (1) of this subsection, including:

(A) a description of the proposed alternative language [instructional] program designed to meet the affective, linguistic, and cognitive needs of the English learners;

(B) the name and teaching assignment, per campus, of each teacher who is assigned to implement the ESL program and is under a waiver and the estimated date for the completion of the ESL supplemental certification, which must be completed by the end of the school year for which the waiver was requested;

(C) a copy of the school district's comprehensive professional development plan;

(D) a copy of the bilingual allotment budget documenting that a minimum of 10% of the funds were used to fund the comprehensive professional development plan; and

(E) a description of the actions taken to recruit an adequate number of appropriately certified teachers.

(3) Approval of waivers. ESL waivers will be granted by the commissioner if the requesting school district:

(A) meets or exceeds the state average for English learner performance on the required state assessments; or

(B) meets the requirements and measurable targets of the action plan described in paragraph (1)(G) of this subsection submitted the previous year and approved by the TEA.

(4) Denial of waivers. A school district denied an ESL program waiver must submit to the commissioner a detailed action plan for complying with required regulations for the following school year.

(5) Appeals. A school district denied an ESL waiver may appeal to the commissioner or the commissioner's designee. The decision of the commissioner or commissioner's designee is final and may not be appealed further.

(6) Special accreditation investigation. The commissioner may authorize a special accreditation investigation under the TEC, §39.057, if a school district is denied an ESL waiver for more than three consecutive years.

(7) Sanctions. Based on the results of a special accreditation investigation, the commissioner may take appropriate action under the TEC, §39.102.

§89.1210.Program Content and Design.

(a) Each school district required to offer a bilingual education or English as a second language (ESL) program shall provide each English learner the opportunity to be enrolled in the required program at his or her grade level. Each student's level of proficiency shall be designated by the language proficiency assessment committee in accordance with §89.1220(g) of this title (relating to Language Proficiency Assessment Committee). The school district shall accommodate the instruction, pacing, and materials to ensure that English learners have a full opportunity to master the essential knowledge and skills of the required curriculum, which includes the Texas Essential Knowledge and Skills and English language proficiency standards (ELPS). Students participating in the bilingual education program may demonstrate their mastery of the essential knowledge and skills in either their primary language or in English for each content area.

(1) A bilingual education program of instruction established by a school district shall be a full-time program of dual-language instruction (English and primary language) that provides for learning basic skills in the primary language of the students enrolled in the program and for carefully structured and sequenced mastery of English language skills under Texas Education Code (TEC), §29.055(a).

(2) An ESL program of instruction established by a school district shall be a program of intensive instruction in English in which ESL teachers recognize and address language differences in accordance with TEC, §29.055(a).

(b) The bilingual education program and ESL program shall be integral parts of the general educational program required under Chapter 74 of this title (relating to Curriculum Requirements) to include foundation and enrichment areas, ELPS, and college and career readiness standards. In bilingual education programs, school districts shall purchase instructional materials in both program languages with the district's instructional materials allotment or otherwise acquire instructional materials for use in bilingual education classes in accordance with TEC, §31.029(a). Instructional materials for bilingual education programs on the list adopted by the commissioner of education, as provided by TEC, §31.0231, may be used as curriculum tools to enhance the learning process. The school district shall provide for ongoing coordination between the bilingual/ESL program and the general educational program. The bilingual education and ESL programs shall address the affective, linguistic, and cognitive needs of English learners as follows.

(1) Affective.

(A) English learners in a bilingual program shall be provided instruction using second language acquisition methods and/or [in] their primary language to introduce basic concepts of the school environment, and content instruction both in their primary language and in English, which instills confidence, self-assurance, and a positive identity with their cultural heritages. The program shall be designed to consider the students' learning experiences and shall incorporate the cultural aspects of the students' backgrounds in accordance with TEC, §29.055(b).

(B) English learners in an ESL program shall be provided instruction using second language acquisition methods in English to introduce basic concepts of the school environment, which instills confidence, self-assurance, and a positive identity with their cultural heritages. The program shall be designed to incorporate the students' primary languages and learning experiences and shall incorporate the cultural aspects of the students' backgrounds in accordance with TEC, §29.055(b).

(2) Linguistic.

(A) English learners in a bilingual program shall be provided intensive instruction in the skills of listening, speaking, reading, and writing both in their primary language and in English, provided through the ELPS. The instruction in both languages shall be structured to ensure that the students master the required essential knowledge and skills and higher-order thinking skills in all subjects.

(B) English learners in an ESL program shall be provided intensive instruction to develop proficiency in listening, speaking, reading, and writing in the English language, provided through the ELPS. The instruction in academic content areas shall be structured to ensure that the students master the required essential knowledge and skills and higher-order thinking skills in all subjects.

(3) Cognitive.

(A) English learners in a bilingual program shall be provided instruction in language arts, mathematics, science, and social studies both in their primary language and in English, using second language acquisition methods in either their primary language, in English, or in both, depending on the specific program model(s) implemented by the district. The content area instruction in both languages shall be structured to ensure that the students master the required essential knowledge and skills and higher-order thinking skills in all subjects.

(B) English learners in an ESL program shall be provided instruction in English in language arts, mathematics, science, and social studies using second language acquisition methods. The instruction in academic content areas shall be structured to ensure that the students master the required essential knowledge and skills and higher-order thinking skills.

(c) The bilingual education program shall be implemented through at least one of the following program models.

(1) Transitional bilingual/early exit is a bilingual program model in which students identified as English learners are served in both English and another language and are prepared to meet reclassification criteria to be successful in English-only instruction not earlier than two or later than five years after the student enrolls in school. Instruction in this program is delivered by a teacher appropriately certified in bilingual education under TEC, §29.061(b)(1), for the assigned grade level and content area. The goal of early-exit transitional bilingual education is for program participants to use their primary language as a resource while acquiring full proficiency in English. This model provides instruction in literacy and academic content through the medium of the students' primary language along with instruction in English that targets second language development through academic content.

(2) Transitional bilingual/late exit is a bilingual program model in which students identified as English learners are served in both English and another language and are prepared to meet reclassification criteria to be successful in English-only instruction not earlier than six or later than seven years after the student enrolls in school. Instruction in this program is delivered by a teacher appropriately certified in bilingual education under TEC, §29.061(b)(2), for the assigned grade level and content area. The goal of late-exit transitional bilingual education is for program participants to use their primary language as a resource while acquiring full proficiency in English. This model provides instruction in literacy and academic content through the medium of the students' primary language along with instruction in English that targets second language development through academic content.

(3) Dual language immersion/one-way is a bilingual/biliteracy program model in which students identified as English learners are served in both English and another language and are prepared to meet reclassification criteria in order to be successful in English-only instruction not earlier than six or later than seven years after the student enrolls in school. Instruction provided in a language other than English in this program model is delivered by a teacher appropriately certified in bilingual education under TEC, §29.061. Instruction provided in English in this program model may be delivered either by a teacher appropriately certified in bilingual education or by a different teacher certified in ESL in accordance with TEC, §29.061. The goal of one-way dual language immersion is for program participants to attain full proficiency in another language as well as English. This model provides ongoing instruction in literacy and academic content in the students' primary language as well as English, with at least half of the instruction delivered in the students' primary language for the duration of the program.

(4) Dual language immersion/two-way is a bilingual/biliteracy program model in which students identified as English learners are integrated with students proficient in English and are served in both English and another language and are prepared to meet reclassification criteria in order to be successful in English-only instruction not earlier than six or later than seven years after the student enrolls in school. Instruction provided in a language other than English in this program model is delivered by a teacher appropriately certified in bilingual education under TEC, §29.061, for the assigned grade level and content area. Instruction provided in English in this program model may be delivered either by a teacher appropriately certified in bilingual education or by a different teacher certified in ESL in accordance with TEC, §29.061, for the assigned grade level and content area. The goal of two-way dual language immersion is for program participants to attain full proficiency in another language as well as English. This model provides ongoing instruction in literacy and academic content in English and another language with at least half of the instruction delivered in the non-English program language for the duration of the program.

(d) The ESL program shall be implemented through one of the following program models.

(1) An ESL/content-based program model is an English acquisition program that serves students identified as English learners through English instruction by a teacher appropriately certified in ESL under TEC, §29.061(c), through English language arts and reading, mathematics, science, and social studies. The goal of content-based ESL is for English learners to attain full proficiency in English in order to participate equitably in school. This model targets English language development through academic content instruction that is linguistically and culturally responsive in English language arts and reading, mathematics, science, and social studies.

(2) An ESL/pull-out program model is an English acquisition program that serves students identified as English learners through English instruction provided by an appropriately certified ESL teacher under the TEC, §29.061(c), through English language arts and reading. The goal of ESL pull-out is for English learners to attain full proficiency in English in order to participate equitably in school. This model targets English language development through academic content instruction that is linguistically and culturally responsive in English language arts and reading. Instruction shall be provided by the ESL teacher in a pull-out or inclusionary delivery model.

(e) Except in the courses specified in subsection (f) of this section, second language acquisition methods, which may involve the use of the students' primary language, may be provided in any of the courses or electives required for promotion or graduation to assist the English learners to master the essential knowledge and skills for the required subject(s). The use of second language acquisition methods shall not impede the awarding of credit toward meeting promotion or graduation requirements.

(f) In subjects such as art, music, and physical education, English learners shall participate with their English-speaking peers in general education classes provided in the subjects. As noted in TEC, §29.055(d), elective courses included in the curriculum may be taught in a language other than English. The school district shall ensure that students enrolled in bilingual education and ESL programs have a meaningful opportunity to participate with other students in all extracurricular activities.

(g) The required bilingual education or ESL program shall be provided to every English learner with parental approval until such time that the student meets reclassification [exit] criteria as described in [§89.1225(i) of this title (relating to Testing and Classification of Students) or] §89.1226(i) of this title (relating to Testing and Classification of Students [, Beginning with School Year 2019-2020]) or graduates from high school.

§89.1215.Home Language Survey.

(a) School districts shall administer only one home language survey to each new student enrolling for the first time in a Texas public school in any grade from prekindergarten through Grade 12. School districts shall require that the survey be signed by the student's parent [or guardian] for each student in prekindergarten through Grade 8 or by the student in Grades 9-12 as permitted under the Texas Education Code, §29.056(a)(1). It is the school district's responsibility to ensure that the student's parent understands the language used in the survey and its implications. The original copy of the survey shall be kept in the student's permanent record.

(b) The home language survey shall be administered in English, Spanish, and Vietnamese; for students of other language groups, the home language survey shall be translated into the primary language whenever possible. The home language survey shall elicit one language answer to each of [contain] the following questions.

(1) "What language is used [spoken] in the child's home most of the time?"

(2) "What language does the child use [speak ] most of the time?"

(c) If the response on the home language survey indicates that a language other than English is used, the student shall be tested in accordance with [§89.1225 of this title (relating to Testing and Classification of Students) or] §89.1226 of this title (relating to Testing and Classification of Students[, Beginning with School Year 2019-2020]).

(d) For students previously enrolled in a Texas public school, the receiving district shall secure the student records, including the home language survey and language proficiency assessment committee documentation as described in §89.1220(l) of this title (relating to Language Proficiency Assessment Committee), as applicable. All attempts to contact the sending district to request records shall be documented. Multiple attempts to obtain the student's home language survey shall be made. [If attempts to obtain the student's home language survey from the sending district are unsuccessful, the identification process shall begin while attempts to contact the sending district for records continue throughout the four-week testing and identification period.]

§89.1220.Language Proficiency Assessment Committee.

(a) School districts shall by local board policy establish and operate a language proficiency assessment committee. The school district shall have on file policy and procedures for the selection, appointment, and training of members of the language proficiency assessment committee(s).

(b) The language proficiency assessment committee shall include an appropriately certified bilingual educator (for students served through a bilingual education program), an appropriately certified English as a second language (ESL) educator (for students served through an ESL program), a parent of an English learner participating in a bilingual or ESL program, and a campus administrator in accordance with Texas Education Code (TEC), §29.063.

(c) In addition to the three required members of the language proficiency assessment committee, the school district may add other trained members to the committee.

(d) No parent serving on the language proficiency assessment committee shall be an employee of the school district.

(e) A school district shall establish and operate a sufficient number of language proficiency assessment committees to enable them to discharge their duties within four weeks of the enrollment of English learners.

(f) All members of the language proficiency assessment committee, including parents, shall be acting for the school district and shall observe all laws and rules governing confidentiality of information concerning individual students. The school district shall be responsible for the orientation and training of all members, including the parents, of the language proficiency assessment committee.

(g) Upon their initial enrollment and at the end of each school year, the language proficiency assessment committee shall review all pertinent information on all English learners identified in accordance with [§89.1225(f) of this title (relating to Testing and Classification of Students) or] §89.1226 of this title (relating to Testing and Classification of Students [, Beginning with School Year 2019-2020]) and shall:

(1) designate the language proficiency level of each English learner in accordance with the guidelines issued pursuant to [§89.1225(b)-(f) or] §89.1226(b)-(f) of this title;

(2) designate the level of academic achievement of each English learner;

(3) designate, subject to parental approval, the initial instructional placement of each English learner in the required program;

(4) facilitate the participation of English learners in other special programs for which they are eligible while ensuring full access to the language program services required under the TEC, §29.053; and

(5) reclassify students, at the end of the school year only, as English proficient in accordance with the criteria described in [§89.1225(i) or] §89.1226(i) of this title.

(h) The language proficiency assessment committee shall give written notice to the student's parent [or guardian], advising that the student has been classified as an English learner and requesting approval to place the student in the required bilingual education or ESL program not later than the 10th calendar day after the date of the student's classification in accordance with TEC, §29.056. The notice shall include information about the benefits of the bilingual education or ESL program for which the student has been recommended and that it is an integral part of the school program.

(i) Before the administration of the state criterion-referenced test each year, the language proficiency assessment committee shall determine the appropriate assessment option for each English learner as outlined in Chapter 101, Subchapter AA, of this title (relating to Commissioner's Rules Concerning the Participation of English Language Learners in State Assessments).

(j) Pending parental [parent] approval of an English learner's entry into the bilingual education or ESL program recommended by the language proficiency assessment committee, the school district shall place the student in the recommended program. Only English learners with parental [parent] approval who are receiving services will be included in the bilingual education allotment.

(k) The language proficiency assessment committee shall monitor the academic progress of each student who has met criteria for reclassification [exit] in accordance with TEC, §29.056(g), for the first two years after reclassification. If the student earns a failing grade in a subject in the foundation curriculum under TEC, §28.002(a)(1), during any grading period in the first two school years after the student is reclassified, the language proficiency assessment committee shall determine, based on the student's second language acquisition needs, whether the student may require intensive instruction or should be reenrolled in a bilingual education or ESL [special language] program. In accordance with TEC, §29.0561, the language proficiency assessment committee shall review the student's performance and consider:

(1) the total amount of time the student was enrolled in a bilingual education or ESL [special language] program;

(2) the student's grades each grading period in each subject in the foundation curriculum under TEC, §28.002(a)(1);

(3) the student's performance on each assessment instrument administered under TEC, §39.023(a) or (c);

(4) the number of credits the student has earned toward high school graduation, if applicable; and

(5) any disciplinary actions taken against the student under TEC, Chapter 37, Subchapter A (Alternative Settings for Behavior Management).

(l) The student's permanent record shall contain documentation of all actions impacting the English learner.

(1) Documentation shall include:

(A) the identification of the student as an English learner;

(B) the designation of the student's level of language proficiency;

(C) the recommendation of program placement;

(D) parental approval of entry or placement into the program;

(E) the dates of entry into, and placement within, the program;

(F) assessment information as outlined in Chapter 101, Subchapter AA, of this title;

(G) additional instructional interventions provided to address the specific language needs of the student;

(H) the date of reclassification and the date of exit from the program with [and] parental approval;

(I) the results of monitoring for academic success, including students formerly classified as English learners, as required under the TEC, §29.063(c)(4); and

(J) the home language survey.

(2) Current documentation as described in paragraph (1) of this subsection shall be forwarded in the same manner as other student records to another school district in which the student enrolls.

(m) A school district may [identify, exit, or] place or exit a student in a program without written approval of the student's parent [or guardian] if:

(1) the student is 18 years of age or has had the disabilities of minority removed;

(2) the parent [or legal guardian] provides approval through a phone conversation or e-mail that is documented in writing and retained; or

(3) an adult who the school district recognizes as standing in parental relation to the student provides written approval. This may include a foster parent or employee of a state or local governmental agency with temporary possession or control of the student.

§89.1226.Testing and Classification of Students[, Beginning with School Year 2019-2020].

(a) The single state-approved English language proficiency test for identification of English learners described in subsection (c) of this section shall be used as part of the standardized, statewide identification process.

[(a) Beginning with school year 2019-2020, the provisions of this subsection supersede the provisions in §89.1225 of this title (relating to Testing and Classification of Students).]

(b) Within four weeks of initial enrollment in a Texas school, a student with a language other than English indicated on the home language survey shall be administered the state-approved English language proficiency test for identification as described in subsection (c) of this section and shall be identified as English learners and placed into the required bilingual education or ESL program in accordance with the criteria listed in subsection (f) of this section.

(c) For identifying English learners, school districts shall administer to each student who has a language other than English as identified on the home language survey:

(1) in prekindergarten through Grade 1, the listening and speaking components of the state-approved English language proficiency test for identification; and

(2) in Grades 2-12, the listening, speaking, reading, and writing components of the state-approved English language proficiency test for identification.

(d) School districts that provide a bilingual education program at the elementary grades shall administer a language proficiency test in the primary language of the student who is eligible to be served in the bilingual education program. If the primary language of the student is Spanish, the school district shall administer the Spanish version of the state-approved language proficiency test for identification. If a state-approved language proficiency test for identification is not available in the primary language of the student, the school district shall determine the student's level of proficiency using informal oral language assessment measures.

(e) All of the language proficiency testing shall be administered by professionals or paraprofessionals who are proficient in the language of the test and trained in the language proficiency testing requirements of the test publisher.

(f) For entry into a bilingual education or ESL program, a student shall be identified as an English learner using the following criteria.

(1) In prekindergarten through Grade 1, the student's score(s) [score] from the listening and/or [and] speaking components on the state-approved English language proficiency test for identification is/are [is] below the level designated for indicating English proficiency.

(2) In Grades 2-12, the student's score(s) [score] from the listening, speaking, reading, and/or [and] writing components on the state-approved English language proficiency test for identification is/are [is] below the level designated for indicating English proficiency.

(g) A student shall be identified as an English learner if the student's ability in English is so limited that the English language proficiency assessment described in subsection (c) of this section cannot be administered.

(h) The language proficiency assessment committee in conjunction with the admission, review, and dismissal (ARD) committee shall identify a student as an English learner if the student's ability in English is so limited or the student's disabilities are so severe that the English language proficiency assessment described in subsection (c) of this section cannot be administered. The decision for entry into a bilingual education or ESL program shall be determined by the language proficiency assessment committee in conjunction with the ARD committee in accordance with §89.1220(f) of this title (relating to Language Proficiency Assessment Committee).

(i) An English learner may be reclassified as [For exit from a bilingual education or ESL program, a student may be classified as] English proficient only at the end of the school year in which a student would be able to participate equally in a general education, all-English instructional program. This determination shall be based upon all of the following:

(1) a proficiency rating on the state-approved English language proficiency test for reclassification [exit] that is designated for indicating English proficiency in each the four language domains (listening, speaking, reading, and writing);

(2) passing standard met on the reading assessment instrument under the Texas Education Code (TEC), §39.023(a), or, for students at grade levels not assessed by the aforementioned reading assessment instrument, a score at or above the 40th percentile on both the English reading and the English language arts sections of the state-approved norm-referenced standardized achievement instrument; and

(3) the results of a subjective teacher evaluation using the state's standardized rubric.

(j) An English learner may not be reclassified as English proficient [A student may not be exited from the bilingual education or ESL program] in prekindergarten or kindergarten. A school district must ensure that English learners are prepared to meet academic standards required by the TEC, §28.0211.

(k) An English learner [A student] may not be reclassified as English proficient [exited from the bilingual education or ESL program] if the language proficiency assessment committee has recommended designated supports or accommodations on the state reading assessment instrument based on the student's second language acquisition needs.

(l) For English learners who are also eligible for special education services, the standardized process for English learner reclassification [program exit] is followed in accordance with applicable provisions of subsection (i) of this section. However, annual meetings to review student progress and make recommendations for reclassification [program exit] must be made in all instances by the language proficiency assessment committee in conjunction with the ARD committee in accordance with §89.1230(b) of this title (relating to Eligible Students with Disabilities). Additionally, the language proficiency assessment committee in conjunction with the ARD committee shall implement assessment procedures that differentiate between language proficiency and disabling conditions in accordance with §89.1230(a) of this title.

(m) For an English learner with a significant cognitive disability [disabilities, the language proficiency assessment committee in conjunction with the ARD committee may determine that the state's English language proficiency assessment for reclassification [exit] is not appropriate because of the nature of the student's disabling condition. In these cases, the language proficiency assessment committee in conjunction with the ARD committee may recommend that the student take the state's alternate English language proficiency assessment, [and shall] determine an appropriate performance standard requirement for reclassification [exit] by language domain under subsection (i)(1) of this section, and utilize the results of a subjective teacher evaluation using the state's standardized alternate rubric. [;]

(n) Notwithstanding §101.101 of this title (relating to Group-Administered Tests), all tests used for the purpose of identification, reclassification [exit], and placement of students and approved by the TEA must be re-normed at least every eight years.

§89.1228.Two-Way Dual Language Immersion Program Model Implementation.

(a) Student enrollment in a two-way dual language immersion program model is optional for English proficient students in accordance with §89.1233(a) of this title (relating to Participation of English Proficient Students).

(b) A two-way dual language immersion program model shall fully disclose candidate selection criteria and ensure that access to the program is not based on race, creed, color, religious affiliation, age, or disability.

(c) A school district implementing a two-way dual language immersion program model shall develop a policy on enrollment and continuation for students in this program model. The policy shall address:

(1) eligibility criteria;

(2) program purpose;

(3) the district's commitment to providing equitable access to services for English learners;

(4) grade levels in which the program will be implemented;

(5) support of program goals as stated in §89.1210 of this title (relating to Program Content and Design); and

(6) expectations for students and parents.

(d) A school district implementing a two-way dual language immersion program model shall obtain written parental approval as follows.

(1) For English learners, written parental approval is obtained in accordance with §89.1240 of this title (relating to Parental Authority and Responsibility).

(2) For English proficient students, written parental approval is obtained through a school district-developed process.

(e) A school district implementing a two-way dual language immersion program model shall determine the appropriate assessment option for program participants as follows.

(1) For English learners, the language proficiency assessment committee shall convene before the administration of the state criterion-referenced test each year to determine the appropriate assessment option for each English learner in accordance with §89.1220(i) of this title (relating to Language Proficiency Assessment Committee).

(2) For English proficient students, the appropriate assessment option for the administration of the state criterion-referenced test each year is determined through a school district-developed process.

§89.1233.Participation of English Proficient Students.

(a) School districts shall fulfill their obligation to provide required bilingual program services to English learners in accordance with Texas Education Code (TEC), §29.053.

(b) School districts may enroll English proficient students [who are not English learners] in the bilingual education program or the English as a second language program in accordance with TEC, §29.058.

(c) The number of participating English proficient students [who are not English learners] shall not exceed 40% of the number of students enrolled in the program district-wide in accordance with TEC, §29.058.

§89.1240.Parental Authority and Responsibility.

(a) The parent [or legal guardian] shall be notified in English and the parent's [parent or legal guardian's] primary language that their child has been classified as an English learner and recommended for placement in the required bilingual education or English as a second language (ESL) program. They shall be provided information describing the bilingual education or ESL program recommended, its benefits to the student, and its being an integral part of the school program to ensure that the parent [or legal guardian] understands the purposes and content of the program. The entry or placement of a student in the bilingual education or ESL program must be approved in writing by the student's parent [or legal guardian] in order to have the student included in the bilingual education allotment. The parent's [or legal guardian's] approval shall be considered valid for the student's continued participation in the required bilingual education or ESL program until the student meets the reclassification criteria described in [§89.1225(i) of this title (relating to Testing and Classification of Students) or] §89.1226(i) of this title (relating to Testing and Classification of Students[, Beginning with School Year 2019-2020]), the student graduates from high school, or a change occurs in program placement.

(b) The school district shall give written notification to the student's parent [or legal guardian] of the student's reclassification as English proficient and his or her exit from the bilingual education or ESL program and acquire written approval as required under the Texas Education Code, §29.056(a). Students meeting reclassification [exit] requirements may continue in the bilingual education or ESL program with parental approval [but are not eligible for inclusion in the bilingual education allotment].

(c) The parent [or legal guardian] of a student enrolled in a school district that is required to offer bilingual education or ESL programs may appeal to the commissioner of education if the school district fails to comply with the law or the rules. Appeals shall be filed in accordance with Chapter 157 of this title (relating to Hearings and Appeals).

§89.1245.Staffing and Staff Development.

(a) School districts shall take all reasonable affirmative steps to assign appropriately certified teachers to the required bilingual education and English as a second language (ESL) programs in accordance with the Texas Education Code (TEC), §29.061, concerning bilingual education and ESL [special language] program teachers. School districts that are unable to secure a sufficient number of appropriately certified bilingual education and/or ESL teachers to provide the required programs may [shall] request activation of the appropriate permits in accordance with Chapter 230 of this title (relating to Professional Educator Preparation and Certification).

(b) School districts that are unable to employ a sufficient number of teachers, including part-time teachers, who meet the requirements of subsection (a) of this section for the bilingual education and ESL programs shall apply on or before November 1 for an exception to the bilingual education program as provided in §89.1207(a) of this title (relating to Bilingual Education Exceptions and English as a Second Language Waivers) or a waiver of the certification requirements in the ESL program as provided in §89.1207(b) of this title as needed.

(c) Teachers assigned to the bilingual education program and/or ESL program may receive salary supplements as authorized by the TEC, §42.153.

(d) School districts may compensate teachers and aides assigned to bilingual education and ESL programs for participation in professional development designed to increase their skills or lead to bilingual education or ESL certification.

(e) The commissioner of education shall encourage school districts to cooperate with colleges and universities to provide training for teachers assigned to the bilingual education and/or ESL programs.

(f) The Texas Education Agency shall develop, in collaboration with education service centers, resources for implementing bilingual education and ESL training programs. The materials shall provide a framework for:

(1) developmentally appropriate bilingual education programs for early childhood through the elementary grades;

(2) affectively, linguistically, and cognitively appropriate instruction in bilingual education and ESL programs in accordance with §89.1210(b)(1)-(3) of this title (relating to Program Content and Design); and

(3) developmentally appropriate programs for English learners identified with multiple needs and/or exceptionalities [as gifted and talented and English learners with disabilities].

§89.1250.Required Summer School Programs.

Summer school programs that are provided under the Texas Education Code (TEC), §29.060, for English learners who will be eligible for admission to kindergarten or Grade 1 at the beginning of the next school year shall be implemented in accordance with this section.

(1) Purpose of summer school programs.

(A) English learners shall have an opportunity to receive special instruction designed to prepare them to be successful in kindergarten and Grade 1.

(B) Instruction shall focus on language development and essential knowledge and skills appropriate to the level of the student.

(C) The program shall address the affective, linguistic, and cognitive needs of the English learners in accordance with §89.1210(b) of this title (relating to Program Content and Design).

(2) Establishment of, and eligibility for, the program.

(A) Each school district required to offer a bilingual or English as a second language (ESL) program in accordance with the TEC, §29.053, shall offer the summer program.

(B) To be eligible for enrollment:

(i) a student must be eligible for admission to kindergarten or to Grade 1 at the beginning of the next school year and must be an English learner; and

(ii) a parent [or guardian] must have approved placement of the English learner in the required bilingual or ESL program following the procedures described in §89.1220(g) of this title (relating to Language Proficiency Assessment Committee) and [§89.1225(b)-(f) of this title (relating to Testing and Classification of Students) or] §89.1226(b)-(f) of this title (relating to Testing and Classification of Students[, Beginning with School Year 2019-2020]).

(3) Operation of the program.

(A) Enrollment is optional.

(B) The program shall be operated on a one-half day basis, a minimum of three hours each day, for eight weeks or the equivalent of 120 hours of instruction.

(C) The student/teacher ratio for the program district-wide shall not exceed 18 to one.

(D) A school district is not required to provide transportation for the summer program.

(E) Teachers shall possess certification as required in the TEC, §29.061, and §89.1245 of this title (relating to Staffing and Staff Development).

(F) Reporting of student progress shall be determined by the board of trustees. A summary of student progress shall be provided to parents at the conclusion of the program. This summary shall be provided to the student's teacher at the beginning of the next regular school term.

(G) A school district may join with other school districts in cooperative efforts to plan and implement programs.

(H) The summer school program shall not substitute for any other program required to be provided during the regular school term, including those required in the TEC, §29.153.

(4) Funding and records for programs.

(A) A school district shall use state and local funds for program purposes.

(i) Available funds appropriated by the legislature for the support of summer school programs provided under the TEC, §29.060, shall be allocated to school districts in accordance with this subsection.

(ii) Funding for the summer school program shall be on a unit basis in such an allocation system to ensure a pupil/teacher ratio of not more than 18 to one. The numbers of students required to earn units shall be established by the commissioner. The allotment per unit shall be determined by the commissioner based on funds available.

(iii) Any school district required to offer the program under paragraph (2)(A) of this subsection that has fewer than 10 students district-wide desiring to participate is not required to operate the program. However, those school districts must document that they have encouraged students' participation in multiple ways.

(iv) Payment to school districts for summer school programs shall be based on units employed. This information must be submitted in a manner and according to a schedule established by the commissioner in order for a school district to be eligible for funding.

(B) A school district shall maintain records of eligibility, attendance, and progress of students.

§89.1265.Evaluation.

(a) All school districts required to conduct a bilingual education or English as a second language (ESL) program shall conduct an annual evaluation in accordance with Texas Education Code (TEC), §29.053, collecting a full range of data to determine program effectiveness to ensure student academic success. The annual evaluation report shall be presented to the board of trustees before November 1 of each year and the report shall be retained at the school district level in accordance with TEC, §29.062.

(b) Annual school district reports of educational performance shall reflect:

(1) the academic progress in the language(s) of instruction for English learners;

(2) the extent to which English learners are becoming proficient in English;

(3) the number of students who have been reclassified as English proficient [exited from the bilingual education and ESL programs]; and

(4) the number of teachers and aides trained and the frequency, scope, and results of the professional development in approaches and strategies that support second language acquisition.

(c) In addition, for those school districts that filed in the previous year and/or will be filing a bilingual education exception and/or ESL waiver in the current year, the annual district report of educational performance shall also reflect:

(1) the number of teachers for whom an exception or waiver was/is being filed;

(2) the number of teachers for whom an exception or waiver was filed in the previous year who successfully obtained certification; and

(3) the frequency and scope of a comprehensive professional development plan, implemented as required under §89.1207 of this title (relating to Bilingual Education Exceptions and English as a Second Language Waivers), and results of such plan if an exception and/or waiver was filed in the previous school year.

(d) School districts shall report to parents the progress of their child in acquiring English as a result of participation in the program offered to English learners.

(e) Each school year, the principal of each school campus, with the assistance of the campus level committee, shall develop, review, and revise the campus improvement plan described in the TEC, §11.253, for the purpose of improving student performance for English learners.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on December 9, 2019.

TRD-201904624

Cristina De La Fuente-Valadez

Director, Rulemaking

Texas Education Agency

Earliest possible date of adoption: January 19, 2020

For further information, please call: (512) 475-1497


19 TAC §89.1225

STATUTORY AUTHORITY. The repeal is proposed under Texas Education Code (TEC), §29.051, which establishes the policy of the state to ensure equal educational opportunity to students with limited English proficiency through the provision of bilingual education and special language programs in the public schools and supplemental financial assistance to help school districts meet the extra costs of the programs; TEC, §29.052, which describes the definitions for both a student and a parent when used throughout TEC, Chapter 29, Subchapter B; TEC, §29.053, which outlines requirements for reporting the number of students with limited English proficiency in school districts and explains the criteria for determining whether a district is required to provide bilingual education or special language programs at the elementary and secondary school levels; TEC, §29.054, which describes the application process and documentation requirements for school districts filing a bilingual education exception; TEC, §29.055, which establishes basic requirements in the content and methods of instruction for the state's bilingual education and special language programs; TEC, §29.056, which authorizes the state to establish standardized criteria for the identification, assessment, and classification of students of limited English proficiency and describes required procedures for the identification, placement, and exiting of students with limited English proficiency; TEC, §29.0561, which provides information regarding requirements for the reevaluation and monitoring of students with limited English proficiency for two years after program exit; TEC, §29.057, which requires that bilingual education and special language programs be located in the regular public schools rather than separate facilities, that students with limited English proficiency are placed in classes with other students of similar age and level of educational attainment, and that a maximum student-teacher ratio be set by the state that reflects student needs; TEC, §29.058, which authorizes districts to enroll students who do not have limited English proficiency in bilingual education programs, with a maximum enrollment of such students set at 40% of the total number of students enrolled in the program; TEC, §29.059, which allows school districts flexibility to join other districts to provide services for students with limited English proficiency; TEC, §29.060, which describes requirements for offering summer school programs for students with limited English proficiency eligible to enter kindergarten or Grade 1 in the subsequent school year; TEC, §29.061, which describes teacher certification requirements for educators serving students with limited English proficiency in bilingual education and special language programs; TEC, §29.062, which authorizes the state to evaluate the effectiveness of programs under TEC, Chapter 29, Subchapter B; TEC, §29.063, which explains the roles and responsibilities of the language proficiency assessment committee and describes the composition of its membership; TEC, §29.064, which allows for a parent appeals process; and TEC, §29.066, which provides information regarding a school district's coding of students participating in bilingual education and special language programs through the Texas Student Data System Public Education Information Management System (TSDS PEIMS).

CROSS REFERENCE TO STATUTE. The repeal implements Texas Education Code, §§29.051-29.056, 29.0561, 29.057-29.064, and 29.066.

§89.1225.Testing and Classification of Students.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on December 9, 2019.

TRD-201904626

Cristina De La Fuente-Valadez

Director, Rulemaking

Texas Education Agency

Earliest possible date of adoption: January 19, 2020

For further information, please call: (512) 475-1497


CHAPTER 117. TEXAS ESSENTIAL KNOWLEDGE AND SKILLS FOR FINE ARTS

SUBCHAPTER C. HIGH SCHOOL

19 TAC §§117.312 - 117.314

The State Board of Education (SBOE) proposes amendments to §§117.312-117.314, concerning Texas Essential Knowledge and Skills (TEKS) for fine arts. The proposed amendments would revise the TEKS for music to align with current International Baccalaureate (IB) course offerings in music.

BACKGROUND INFORMATION AND JUSTIFICATION: In order for students to earn state credit toward specific graduation requirements, a course must be approved by the SBOE and included in administrative rule. At the September 2017 SBOE meeting, the committee discussed IB courses that are not currently included in SBOE rule and considerations regarding the appropriate amount of state credit that should be awarded for IB courses. At that time, the board requested that agency staff prepare rule text to address these issues and requested that staff balance the chapters that would be updated over two different meetings. At the January-February 2018 meeting, the SBOE approved proposed revisions to English language arts and reading, mathematics, science, and languages other than English IB courses for second reading and final adoption. The SBOE's approval included the addition of eight IB courses to SBOE rules and updates that increased the amount of credit available for 17 IB courses currently in rule. The revisions became effective August 27, 2018.

At the April 2018 meeting, the SBOE approved for second reading and final adoption proposed revisions to align the TEKS in science, social studies, economics, and technology applications with additional IB course offerings and update the amount of credit available for both IB and Advanced Placement (AP) courses in these subject areas. The SBOE's approval included the addition of nine IB courses to SBOE rules and updates to the amount of credit available for seven AP and IB courses currently in rule. The revisions became effective August 27, 2018.

At the January-February 2019 meeting, the SBOE approved for second reading and final adoption two proposed new courses in IB Film in 19 TAC Chapter 117, Subchapter C. The IB film courses became effective August 26, 2019.

The proposed amendments would update the TEKS for music to align with current IB course offerings in music. Section 117.312, Music, Level III (One Credit), Adopted 2013, and §117.313, Music, Level IV (One Credit), Adopted 2013, would be amended to add IB Music Standard Level and IB Music Higher Level to the list of courses that may fulfill fine arts and elective requirements for graduation. Section 117.314, Music Studies (One Credit), Adopted 2013, would be amended to remove IB Music Standard Level and IB Music Higher Level from the list of courses that may count toward a music studies credit.

The SBOE approved the proposed amendments for first reading and filing authorization at its November 15, 2019 meeting.

FISCAL IMPACT: Monica Martinez, associate commissioner for standards and support services, has determined that for the first five-year period the proposal is in effect there are no additional costs to state or local government required to comply with the proposal.

LOCAL EMPLOYMENT IMPACT: The proposal has no effect on local economy; therefore, no local employment impact statement is required under Texas Government Code, §2001.022.

SMALL BUSINESS, MICROBUSINESS, AND RURAL COMMUNITY IMPACT: The proposal has no direct adverse economic impact for small businesses, microbusinesses, or rural communities; therefore, no regulatory flexibility analysis specified in Texas Government Code, §2006.002, is required.

COST INCREASE TO REGULATED PERSONS: The proposal does not impose a cost on regulated persons, another state agency, a special district, or a local government and, therefore, is not subject to Texas Government Code, §2001.0045.

TAKINGS IMPACT ASSESSMENT: The proposal does not impose a burden on private real property and, therefore, does not constitute a taking under Texas Government Code, §2007.043.

GOVERNMENT GROWTH IMPACT: TEA staff prepared a Government Growth Impact Statement assessment for this proposed rulemaking. The proposed rulemaking would expand an existing regulation by including language that would align the existing TEKS for music with current IB course offerings in music.

The proposed rulemaking would not create or eliminate a government program; would not require the creation of new employee positions or elimination of existing employee positions; would not require an increase or decrease in future legislative appropriations to the agency; would not require an increase or decrease in fees paid to the agency; would not create a new regulation; would not limit or repeal an existing regulation; would not increase or decrease the number of individuals subject to its applicability; and would not positively or adversely affect the state's economy.

PUBLIC BENEFIT AND COST TO PERSONS: Ms. Martinez has determined that for each year of the first five years the proposal is in effect, the public benefit anticipated as a result of enforcing the proposal would be providing students enrolled in IB music courses more flexibility to fulfill credit requirements for graduation. There is no anticipated economic cost to persons who are required to comply with the proposal.

DATA AND REPORTING IMPACT: The proposal would have no new data and reporting impact.

PRINCIPAL AND CLASSROOM TEACHER PAPERWORK REQUIREMENTS: TEA has determined that the proposal would not require a written report or other paperwork to be completed by a principal or classroom teacher.

PUBLIC COMMENTS: The public comment period on the proposal begins December 20, 2019, and ends January 24, 2020. A form for submitting public comments is available on the TEA website at https://tea.texas.gov/About_TEA/Laws_and_Rules/SBOE_Rules_(TAC)/Proposed_State_Board_of_Education_Rules/. Comments on the proposal may also be submitted to Cristina De La Fuente-Valadez, Rulemaking, Texas Education Agency, 1701 North Congress Avenue, Austin, Texas 78701. The SBOE will take registered oral and written comments on the proposal at the appropriate committee meeting in January 2020 in accordance with the SBOE board operating policies and procedures. A request for a public hearing on the proposal submitted under the Administrative Procedure Act must be received by the commissioner of education not more than 14 calendar days after notice of the proposal has been published in the Texas Register on December 20, 2019.

STATUTORY AUTHORITY. The amendments are proposed under Texas Education Code (TEC), §7.102(c)(4), which requires the State Board of Education (SBOE) to establish curriculum and graduation requirements; TEC, §28.002(a), which identifies the subjects of the required curriculum; TEC, §28.002(c), which requires the SBOE to by rule identify the essential knowledge and skills of each subject in the required curriculum that all students should be able to demonstrate and that will be used in evaluating instructional materials and addressed on the state assessment instruments; and TEC, §28.025(a), which requires the SBOE to by rule determine the curriculum requirements for the foundation high school graduation program that are consistent with the required curriculum under the TEC, §28.002.

CROSS REFERENCE TO STATUTE. The amendments implement Texas Education Code, §§7.102(c)(4); 28.002(a) and (c); and 28.025(a).

§117.312.Music, Level III (One Credit), Adopted 2013.

(a) General requirements. Students may fulfill fine arts and elective requirements for graduation by successfully completing one or more of the following music courses: Band III, Choir III, Orchestra III, Jazz Ensemble III, Jazz Improvisation III, Instrumental Ensemble III, Vocal Ensemble III, World Music Ensemble III, Applied Music III, Mariachi III, Piano III, Guitar III, [and] Harp III, International Baccalaureate (IB) Music Standard Level (SL), or IB Music Higher Level (HL) (one credit per course). The recommended prerequisite for IB Music SL is one credit in music. The prerequisite for all other Music, Level III music courses is one credit of Music, Level II in the corresponding discipline.

(b) - (c) (No change.)

§117.313.Music, Level IV (One Credit), Adopted 2013.

(a) General requirements. Students may fulfill fine arts and elective requirements for graduation by successfully completing one or more of the following music courses: Band IV, Choir IV, Orchestra IV, Jazz Ensemble IV, Jazz Improvisation IV, Instrumental Ensemble IV, Vocal Ensemble IV, World Music Ensemble IV, Applied Music IV, Mariachi IV, Piano IV, Guitar IV, [and] Harp IV, International Baccalaureate (IB) Music Standard Level (SL), or IB Music Higher Level (HL) (one credit per course). The prerequisite for all Music, Level IV courses is one credit of Music, Level III in the corresponding discipline.

(b) - (c) (No change.)

§117.314.Music Studies (One Credit), Adopted 2013.

(a) General requirements. Students may fulfill fine arts and elective requirements for graduation by successfully completing one or more of the following music courses: Music Theory I-II; Music Appreciation I-II; Music Business I-II; Music Composition I-II; Music Production I-II; Music and Media Communications I-II; or College Board Advanced Placement (AP) Music Theory[; International Baccalaureate (IB) Music, Standard Level (SL); and IB Music, Higher Level (HL)]. There are no prerequisites for Music Study Level I courses[; however, the prerequisite for IB Music, SL and IB Music, HL is one credit of any Music, Level II course]. Students may take Music Studies with different course content for a maximum of three credits.

(b) - (c) (No change.)

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on December 9, 2019.

TRD-201904622

Cristina De La Fuente-Valadez

Director, Rulemaking

Texas Education Agency

Earliest possible date of adoption: January 19, 2020

For further information, please call: (512) 475-1497