The bill, S.B. No. 285, aims to regulate the financial practices of open-enrollment charter schools in Texas by prohibiting the misuse of funds received for these schools to support out-of-state institutions. Specifically, it introduces a new section, 12.1075, which states that charter holders cannot spend money allocated for their Texas charter school to benefit a school located outside the state, with an exception for expenditures related to contracts for goods or services directly benefiting the charter school. If a charter holder is found to have violated this provision, the commissioner of education is authorized to withhold three times the amount spent in violation from the charter holder's funding for the school year in which the violation occurred, and may adjust future entitlements to recover any remaining amounts owed.

Additionally, the bill amends Section 12.115(c) of the Education Code to include a new criterion for revoking a charter. In addition to existing performance ratings, a charter may be revoked if the holder has spent at least $100,000 in violation of the newly established Section 12.1075. This legislation is set to take effect on September 1, 2025.

Statutes affected:
Introduced: Education Code 12.115 (Education Code 12)