House Bill No. 1878 aims to regulate the financial practices of open-enrollment charter schools in Texas, specifically prohibiting the misuse of funds intended for these schools to support out-of-state educational institutions. The bill introduces a new section, 12.1075, which explicitly states that charter holders cannot spend money received under Section 12.106 for any school located outside Texas, with an exception for expenditures related to contracts for goods or services for the charter school. If a charter holder is found to have violated this provision, the commissioner of education is authorized to withhold funds equivalent to three times the amount misused and may adjust future entitlements to recover any remaining owed amounts.

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 amendment strengthens accountability measures for charter schools and aims to ensure that funds are used appropriately to support educational activities within Texas. The bill is set to take effect on September 1, 2025.

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