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 §33.5

The State Board of Education (SBOE) proposes an amendment to §33.5, concerning the Texas Permanent School Fund (PSF) code of ethics. The proposed amendment would improve and clarify how the section applies to investments of the PSF in investment funds.

In accordance with statute, the rules in 19 TAC Chapter 33 establish investment objectives, policies, and guidelines for the Texas Permanent School Fund.

Section 33.5 describes the code of ethics and disclosures, including prescribed forms that apply to members, relevant staff, and service providers, regarding the management of the PSF as required by statute.

The proposed amendment to §33.5 would update the definition of PSF Service Provider to separately define Fund Manager. Reference to and provisions pertaining to Fund Manager would be updated throughout the rule.

Additionally, the proposed amendment would remove in subsection (n)(2)(J) the expenditure report entitled "Report of Expenditures of Persons Providing Services to the State Board of Education Relating to the Management and Investment of the Permanent School Fund" from rule. Annual reports would be filed in the format specified by PSF staff.

The SBOE approved the amendment for first reading and filing authorization at its February 2, 2018, meeting.

The proposed amendment would have no procedural and reporting implications. The proposed amendment would have no locally maintained paperwork requirements.

FISCAL NOTE. Holland Timmins, executive administrator and chief investment officer of the Texas Permanent School Fund, has determined that for the first five-year period the proposed amendment is in effect there will be no additional costs to state or local government as a result of enforcing or administering the proposed amendment.

There is no effect on local economy for the first five years that the proposed amendment is in effect; therefore, no local employment impact statement is required under Texas Government Code, §2001.022. The proposed amendment does not impose a cost on regulated persons and, therefore, is not subject to Texas Government Code, §2001.0045.

GOVERNMENT GROWTH IMPACT. TEA staff has determined that the proposed amendment does not have a government growth impact pursuant to Texas Government Code, §2001.0221.

PUBLIC BENEFIT/COST NOTE. Mr. Timmins has determined that for each year of the first five years the proposed amendment is in effect, the public benefit anticipated as a result of enforcing the amendment will be updated and clarified provisions supporting the management and investment of the PSF. There is no anticipated economic cost to persons who are required to comply with the proposed amendment.

ECONOMIC IMPACT STATEMENT AND REGULATORY FLEXIBILITY ANALYSIS FOR SMALL BUSINESSES, MICROBUSINESSES, AND RURAL COMMUNITIES. There is no direct adverse economic impact for small businesses, microbusinesses, and rural communities; therefore, no regulatory flexibility analysis, specified in Texas Government Code, §2006.002, is required.

REQUEST FOR PUBLIC COMMENT. Comments on the proposal may be submitted to Cristina De La Fuente-Valadez, Rulemaking, Texas Education Agency, 1701 North Congress Avenue, Austin, Texas 78701. Comments may also be submitted electronically to rules@tea.texas.gov. A request for a public hearing on the proposed amendment 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.

STATUTORY AUTHORITY. The amendment is proposed under the Texas Education Code (TEC), §7.102(c)(31), which states that the State Board of Education (SBOE) may invest the Permanent School Fund (PSF) within the limits of the authority granted by the Texas Constitution, Article VII, §5, and the TEC, Chapter 43; TEC, §7.102(c)(33), which authorizes the SBOE to adopt an annual report on the status of the guaranteed bond program and states that the SBOE may adopt rules as necessary to administer the guaranteed bond program as provided under the TEC, Chapter 45, Subchapter C; TEC, §43.0031, which requires the SBOE to adopt and enforce an ethics policy regarding management and investment of the PSF; TEC, §43.0032, which requires disclosure of certain relationships with entities that provide services relating to the management and investment of the PSF, requires the board to define those relationships, and prohibits giving advice when relationships exist in certain circumstances; TEC, §43.0033, which requires certain persons providing services to the SBOE regarding management and investment of the PSF to file expenditure reports; TEC, §43.0034, which requires the SBOE to prescribe forms for statements of possible conflicts of interest and waivers of possible conflicts of interest under the TEC, §43.0032, and reports of expenditures under the TEC, §43.0033; TEC, §43.004, which requires the SBOE to adopt written investment objectives for the PSF and employ a service to analyze the performance of the PSF; Texas Government Code, §2263.004,which requires the SBOE to adopt by rule standards of conduct applicable to certain financial advisors or service providers; and Texas Constitution, Article VII, §5, which describes the PSF, the limit on distributions to the Available School Fund, the setting of spending rates by the SBOE, and the ten-year distribution test; authorizes a bond guarantee utilizing the PSF; and describes the management of the PSF by the SBOE.

CROSS REFERENCE TO STATUTE. The amendment implements the Texas Education Code, §§7.102(c)(31) and (33), 43.0031-43.0034, and 43.004; Texas Government Code, §2263.004; and the Texas Constitution, Article VII, §5(a)(2), (d), and (f).

§33.5.Code of Ethics.

(a) General principles. The Texas Permanent School Fund (PSF) is held in public trust for the benefit of the schoolchildren of Texas. All those charged with the management of the PSF will aspire to the highest standards of ethical conduct. The purpose of the PSF code of ethics is to assist and help guide all such persons in the proper discharge of their duties and to assist them in avoiding even the appearance of impropriety.

(b) Fiduciary responsibility. The members of the State Board of Education (SBOE) serve as fiduciaries of the PSF and are responsible for prudently investing its assets. The SBOE members or anyone acting on their behalf shall comply with the provisions of this section, the Texas Constitution, Texas statutes, and all other applicable provisions governing the responsibilities of a fiduciary.

(c) Compliance with constitution and code of ethics. The SBOE members are public officials governed by the provisions of the Texas Government Ethics Act, as stated in the Texas Government Code, Chapter 572.

(d) Definitions. For purposes of this chapter, the following terms shall have the following meanings.

(1) SBOE Member, for the purposes of the PSF code of ethics, means a member of the SBOE, and shall be deemed to include the SBOE Member or a person related to the member within the second degree of affinity or consanguinity.

(2) Person means any individual, corporation, firm, limited liability company, limited partnership, trust, association, or other legal entity.

(3) Investment manager or manager means a Person who manages and invests PSF assets and may be either an internal investment manager or an external investment manager.

(4) PSF Service Providers are the following Persons:

(A) any Person who is an external investment manager, as described in §33.20(b)(1) of this title (relating to Responsible Parties and Their Duties), or who is responsible by contract for providing legal advice regarding the PSF, executing PSF brokerage transactions, or acting as a custodian of the PSF;

[(B) any Person except the Texas Education Agency (TEA) or a member of the PSF staff who acts as the sponsor, general partner, managing member, manager, or adviser to an investment fund or other investment vehicle (which, by way of example but without limitation, may include a partnership, a limited liability company, trust, association, or other entity) in which the PSF is invested. Such Persons hereafter in this chapter referred to as Fund Managers;]

(B) [(C)] a member of the Committee of Investment Advisors;

(C) [(D)] any Person who is Investment Counsel as described in §33.20(b)(4) of this title or provides consultant services for compensation regarding the management and investment of the PSF;

(D) [(E)] any Person who provides investment and management advice to an SBOE Member, with or without compensation, if an SBOE Member:

(i) gives the Person access to PSF records or information that are identified as confidential; or

(ii) asks the Person to interview, meet with, or otherwise confer with a PSF Service Provider, Fund Manager, or TEA staff;

(E) [(F)] any Person who is a member of the PSF staff who is responsible for managing or investing assets of the PSF, executing brokerage transactions, acting as a custodian of the PSF, or providing investment or management advice regarding the investment or management of the PSF to an SBOE Member or PSF staff;

(F) [(G)] any Person who is a member of TEA legal staff who is responsible for providing legal advice regarding the investment or management of the PSF; or

(G) [(H)] any Person who submits a response to a Request for Proposal (RFP) or Request for Qualifications (RFQ), or similar types of solicitations, while such response is pending. An applicant is not required to file reports under this section except as required in the RFP or RFQ process.

(5) Expenditure, for purposes of this section, means any expenditure other than an expenditure made on behalf of an employee acting in the scope of their employment.

(6) Fund Manager means the Person, except the Texas Education Agency (TEA) or a member of the PSF staff, who controls a non-publicly traded investment fund or other investment vehicle (which, by way of example but without limitation, may include a partnership, a limited liability company, trust, association, or other entity) in which the PSF is invested, such as the Person who acts as the vehicle's sponsor, general partner, managing member, manager, or adviser. For purposes of this chapter, Fund Managers are not considered to be PSF Service Providers, external investment managers, consultants, or Investment Counsel.

(e) Assets affected by this section. The provisions of this section apply to all PSF assets, both publicly and nonpublicly traded investments.

(f) General ethical standards.

(1) SBOE Members and PSF Service Providers must comply with all laws applicable to them, which may include one or more of the following statutes: Texas Government Code, Chapter 2263 (Ethics and Disclosure Requirements for Outside Financial Advisors and Service Providers), §572.051 (Standards of Conduct; State Agency Ethics Policy), §552.352 (Distribution or Misuse of Confidential Information), §572.002 (General Definitions), §572.004 (Definition: Regulation), §572.054 (Representation by Former Officer or Employee of Regulatory Agency Restricted; Criminal Offense), §572.058 (Private Interest in Measure or Decision; Disclosure; Removal from Office for Violation), §572.021 (Financial Statement Required), §2252.908 (Disclosure of Interested Parties), and Chapter 305 (Registration of Lobbyists); Texas Penal Code, Chapter 36 (Bribery and Corrupt Influence) and Chapter 39 (Abuse of Office); and Texas Education Code, §43.0031 (Permanent School Fund Ethics Policy), §43.0032 (Conflicts of Interest), and §43.0033 (Reports of Expenditures). The omission of any applicable statute listed in this paragraph does not excuse violation of its provisions. Fund Managers must comply with all applicable laws, including laws governing the investment vehicle, as provided in the governing documents of the investment vehicle.

(2) SBOE Members and PSF Service Providers must be honest in the exercise of their duties and must not take actions that will discredit the PSF.

(3) SBOE Members and PSF Service Providers shall be loyal to the interests of the PSF to the extent that such loyalty is not in conflict with other duties, which legally have priority [(which, by way of example but without limitation, may include obligations of Fund Managers to other investors in commingled funds)]. SBOE Members and PSF Service Providers shall avoid personal, employment, or business relationships that create conflicts of interest as defined in subsection (i)(1) of this section. Should an SBOE Member or a PSF Service Provider become aware of any conflict of interest involving himself or herself or another SBOE Member, [or] PSF Service Provider, or Fund Manager, he or she has an affirmative duty to disclose the conflict to the SBOE chair and vice chair and the commissioner within seven days of discovering the conflict and, in the case of a conflict involving himself or herself, to cure the conflict in a manner provided for under this section prior to the next SBOE or committee meeting and such SBOE Member shall take no action nor participate in the RFP or RFQ process, or similar types of solicitations, that concerns the conflict.

(4) SBOE Members and PSF Service Providers shall not use nonpublic information gained through their relationship with the PSF to seek or obtain personal gain beyond agreed compensation and/or any properly authorized expense reimbursement. This should not be interpreted to forbid the use of PSF as a reference or the communication to others of the fact that a relationship with PSF exists, provided that no misrepresentation is involved.

(5) An SBOE Member shall report in writing the name and address of any PSF Service Provider, as defined by subsection (d)(4)(D) [(d)(4)(E)] of this section, who provides investment and management advice to that SBOE Member. The SBOE Member shall submit the report to the commissioner of education for distribution to the SBOE within 30 days of the PSF Service Provider first providing investment and management advice to that SBOE Member.

(6) SBOE Members and PSF Service Providers shall report in writing any action described by the Texas Education Code, §7.108, to the commissioner of education for distribution to the SBOE within seven days of discovering the violation.

(7) A PSF Service Provider or Fund Manager shall not make any gift or donation to a school or other charitable interest on behalf of, at the request of, or in coordination with an SBOE Member. Any PSF Service Provider, Fund Manager, or SBOE Member shall disclose in writing to the commissioner of education any information regarding such a donation.

(8) A PSF Service Provider or Fund Manager shall disclose in writing to the commissioner of education for dissemination to all SBOE Members any business or financial transaction greater than $50 in value with an SBOE Member, the commissioner of education, or any member of PSF staff or TEA legal staff who is a PSF Service Provider within 30 days of the transaction. Excluded from this subsection are checking accounts, savings accounts, credit cards, brokerage accounts, mutual funds, or other financial accounts that are provided to the SBOE Member or to a member of the PSF staff or TEA legal staff under the same terms and conditions as they are provided to members of the general public.

(9) An SBOE Member shall disclose in writing to the commissioner of education on a quarterly basis any business or financial transaction greater than $50 in value between the SBOE Member, or a business entity in which the SBOE Member has a significant ownership interest, and a PSF Service Provider or Fund Manager. A report shall be filed even if there has not been a business or financial transaction greater than $50 in value between the SBOE Member, or a business entity in which the SBOE Member has a significant ownership interest, and a PSF Service Provider or Fund Manager. Excluded from this subsection are checking accounts, savings accounts, credit cards, brokerage accounts, mutual funds, or other financial accounts that are provided to an SBOE Member under the same terms and conditions as they are provided to members of the general public. The reports shall be filed on or before January 15, April 15, July 15, and October 15 and shall cover the preceding three calendar months. The first report filed for each SBOE Member shall cover the preceding one-year period. Subsection (u) of this section does not apply to the first report filed. The commissioner of education shall communicate the information included in the disclosure to all SBOE Members.

(g) Notification of disclosure. In order to preserve the integrity and public trust in the PSF, it is deemed necessary and appropriate to allow all SBOE Members a reasonable time to promptly review and respond to any disclosures or written inquiries made by applicants or made by PSF Service Providers as provided in SBOE operating procedures. In compliance with Texas Government Code, §2156.123, no SBOE Member or PSF Service Provider should publicly disclose any submission materials prior to completion of the RFP or RFQ process. For purposes of this subsection, an RFP or RFQ is completed upon final award of an RFP, or selection of qualified bidders for an RFQ, or closure without any selection. This subsection does not allow an SBOE Member to refrain from publicly disclosing a conflict of interest as required by subsections (f)(3) and (i)(4) of this section and Texas Government Code, §572.058.

(h) Disclosure.

(1) If an SBOE Member solicited a specific investment action by the PSF staff or a PSF Service Provider or a Fund Manager, the SBOE Member shall publicly disclose the fact to the SBOE in a public meeting. The disclosure shall be entered into the minutes of the meeting. For purposes of this section, a matter is a prospective directive to the PSF staff or a PSF Service Provider or a Fund Manager to undertake a specific investment or divestiture of securities for the PSF. This term does not include ratification of prior securities transactions performed by the PSF staff or a PSF Service Provider and does not include an action to allocate classes of assets within the PSF.

(2) In addition, an SBOE Member shall fully disclose any substantial interest in any publicly or nonpublicly traded PSF investment (business entity) on the SBOE Member's annual financial report filed with the Texas Ethics Commission pursuant to Texas Government Code, §572.021. An SBOE Member has a substantial interest if the SBOE Member:

(A) has a controlling interest in the business entity;

(B) owns more than 10% of the voting interest in the business entity;

(C) owns more than $25,000 of the fair market value of the business entity;

(D) has a direct or indirect participating interest by shares, stock, or otherwise, regardless of whether voting rights are included, in more than 10% of the profits, proceeds, or capital gains of the business entity;

(E) is a member of the board of directors or other governing board of the business entity;

(F) serves as an elected officer of the business entity; or

(G) is an employee of the business entity.

(i) Conflicts of interest.

(1) A conflict of interest exists whenever SBOE Members or PSF Service Providers have business, commercial, or other relationships, including, but not limited to, personal and private relationships, that could reasonably be expected to diminish their independence of judgment in the performance of their duties. For example, a person's independence of judgment is diminished when the person is in a position to take action or not take action with respect to PSF and such act or failure to act is, may be, or reasonably appears to be influenced by considerations of personal gain or benefit rather than motivated by the interests of the PSF. Conflicts include, but are not limited to, beneficial interests in securities, corporate directorships, trustee positions, familial relationships, or other special relationships that could reasonably be considered a conflict of interest with the duties to the PSF. Further, Texas Education Code, §43.0032, requires disclosure and no participation, unless a waiver is granted, when an SBOE Member or a PSF Service Provider has a business, commercial, or other relationship that could reasonably be expected to diminish a person's independence of judgment in the performance of the person's responsibilities relating to the management or investment of the PSF. Such business, commercial, or other relationship is defined to be a relationship that is prohibited under Texas Government Code, §572.051, or that would require public disclosure under Texas Government Code, §572.058, or a relationship that does not rise to this level but that is determined by the SBOE to create an unacceptable risk to the integrity and reputation of the PSF investment program.

(2) Any SBOE Member or PSF Service Provider who has a possible conflict of interest as defined in paragraph (1) of this subsection shall disclose the possible conflict to the commissioner of education and the chair and vice chair of the SBOE on the disclosure form. The disclosure form is provided in this paragraph entitled "Potential Conflict of Interest Disclosure Form."

Figure: 19 TAC §33.5(i)(2) (No change.)

(3) A person who files a statement under paragraph (2) of this subsection disclosing a possible conflict of interest may not give advice or make decisions about a matter affected by the possible conflict of interest unless the SBOE, after consultation with the general counsel of the TEA, expressly waives this prohibition. The SBOE may delegate the authority to waive this prohibition. If a waiver is not granted by the SBOE or its delegate to an SBOE Member or a PSF Service Provider for a possible conflict of interest, the SBOE Member or PSF Service Provider may request an opinion from the Texas Ethics Commission as to a determination of whether a conflict of interest exists. An SBOE Member will be given the assistance of the TEA ethics advisor to help draft a request for an opinion, if such assistance is requested. When the SBOE Member or PSF Service Provider receives the opinion of the Texas Ethics Commission and if a waiver is still sought, the SBOE Member or PSF Service Provider shall forward the opinion to the SBOE chair and vice chair and the commissioner. An opinion of the Texas Ethics Commission that determines a conflict exists is final and the SBOE may not waive the conflict of interest. An opinion of the Texas Ethics Commission that determines that no conflict exists will automatically result in an SBOE waiver.

(4) If an SBOE Member believes he or she has a conflict of interest based on the existence of certain relationships described in Texas Government Code, §572.058, the SBOE Member shall publicly disclose the conflict at an SBOE meeting or committee meeting and the SBOE Member shall not vote or otherwise participate in any decision involving the conflict. In accordance with Texas Government Code, §572.058, the SBOE may not waive the prohibition under this paragraph. This requirement is in addition to the requirement of filing a disclosure under paragraph (2) of this subsection.

(5) Texas Government Code, §572.051, establishes standards of conduct for state officers and employees. SBOE Members and TEA employees shall abide by these standards.

(j) Prohibited transactions and interests.

(1) For purposes of this section, the term "direct placement" (with respect to investments that are not publicly traded) is defined as a direct sale of fixed income securities, generally to institutional investors, with or without the use of brokers or underwriters, primarily offered to Qualified Institutional Buyers (QIBs) and not registered by the Securities and Exchange Commission. The term does not include offerings or sales of interests in investment funds or investment vehicles.

(2) For the purposes of this section, the term "placement agent" is defined as any third party, whether or not affiliated with a PSF Service Provider or Fund Manager, that is a party to an agreement or arrangement (whether written or oral) with a PSF Service Provider or Fund Manager for direct or indirect payment of a fee in connection with a PSF investment.

(3) No SBOE Member or PSF Service Provider shall:

(A) have a financial interest in a direct placement investment of the PSF;

(B) serve as an officer, director, or employee of an entity in which a direct placement investment is made by the PSF; or

(C) serve as a consultant to, or receive any fee, commission or payment from, an entity in which a direct placement investment is made by the PSF.

(4) No SBOE Member shall:

(A) act as a representative or agent of a third party in dealing with a PSF investment manager, Investment Counsel, or consultant in connection with a PSF investment; or

(B) be employed for two years after the end of his or her term on the SBOE with an organization in which the PSF invested, unless the organization's stock or other evidence of ownership is traded on the public stock or bond exchanges.

(5) A PSF Service Provider shall[:]

[(A)] not act as a representative or agent of a third party in dealing with a PSF investment manager, Investment Counsel, or consultant in connection with a PSF investment.[; and]

(6) [(B)] A PSF Service Provider or Fund Manager shall, except as approved by the SBOE, not use a placement agent in connection with a PSF investment unless:

(A) [(i)] the relationship of the PSF Service Provider or Fund Manager with the placement agent, any compensation, and a description of the services provided by the placement agent in connection with a PSF investment are disclosed in writing to PSF staff;

(B) [(ii)] the placement agent is registered with the Securities and Exchange Commission (SEC) or the Financial Industry Regulatory Authority (FINRA) or, if not required to register with the SEC or FINRA, is registered with an applicable regulatory body;

(C) [(iii)] such placement agent does not share any fees with a non-registered person or entity; and

(D) [(iv)] in executed closing documents for the PSF investment, the PSF Service Provider or Fund Manager contractually represents and warrants that the information provided about the placement agent is true, correct, and complete in all material respects, provided that information provided by the placement agent is, to the knowledge of the PSF Service Provider or Fund Manager, true, correct, and complete in all material respects.

(7) [(6)] A placement agent shall file campaign contribution reports in the same manner as does a PSF Service Provider under subsection (o)(1) of this section for the period during which the placement agent provides services in connection with a PSF investment.

(k) Solicitation of support. No SBOE Member shall solicit or receive a campaign contribution on behalf of any political candidate, political party, or political committee from a PSF Service Provider or Fund Manager. The PSF Service Provider or Fund Manager shall report any such incident in writing to the commissioner of education for distribution to the SBOE.

(l) Hiring external professionals. The SBOE may contract with investment managers to make or assist with PSF investments. The SBOE has the authority and responsibility to hire other external professionals, including custodians, Investment Counsel, or consultants. The SBOE shall select each professional based on merit and cost and subject to the provisions of §33.55 of this title (relating to Standards for Selecting Consultants, Investment Managers, Custodians, and Other Professionals To Provide Outside Expertise for the Fund).

(m) Responsibilities of PSF Service Providers and Fund Managers. The PSF Service Providers and Fund Managers shall be notified in writing of the code of ethics contained in this section. Any existing contracts for investment and any future investment shall strictly conform to this code of ethics. The PSF Service Provider or Fund Manager shall report in writing any suggestion or offer by an SBOE Member to deviate from the provisions of this section to the commissioner of education for distribution to the SBOE within 30 days of the PSF Service Provider or Fund Manager discovering the violation. The PSF Service Provider or Fund Manager shall report in writing any violation of this code of ethics committed by another PSF Service Provider or Fund Manager to the commissioner of education for distribution to the SBOE within 30 days of the PSF Service Provider or Fund Manager discovering the violation. A PSF Service Provider or other person retained in a fiduciary capacity must comply with the provisions of this section.

(n) Gifts and entertainment.

(1) Bribery. SBOE Members are prohibited from soliciting, offering, or accepting gifts, payments, and other items of value in exchange for an official act, including a vote, recommendation, or any other exercise of official discretion pursuant to Texas Penal Code, §36.02.

(2) Acceptance of gifts.

(A) An SBOE Member may not accept gifts, favors, services, or benefits that may reasonably tend to influence the SBOE Member's official conduct or that the SBOE Member knows or should know are intended to influence the SBOE Member's official conduct. For purposes of this paragraph, a gift does not include an item with a value of less than $50, excluding cash, checks, loans, direct deposit, or negotiable instruments.

(B) An SBOE Member may not accept a gift, favor, service, or benefit from a Person that the SBOE Member knows is interested or is likely to become interested in a charter, contract, purchase, payment, claim, or other pecuniary transaction over which the SBOE has discretion.

(C) An SBOE Member may not accept a gift, favor, service, or benefit from a Person that the SBOE Member knows to be subject to the regulation, inspection, or investigation of the SBOE or the TEA.

(D) An SBOE Member may not solicit, accept, or agree to accept a gift, favor, service, or benefit from a Person with whom the SBOE Member knows that civil or criminal litigation is pending or contemplated by the SBOE or the TEA.

(E) Except as prohibited in subparagraphs (A)-(D) of this paragraph and subject to the requirements for PSF Service Providers, Fund Managers, [providers] and lobbyists in subparagraph (F) of this paragraph, an SBOE Member may accept a gift, favor, service, or benefit if it fits into one of the following categories:

(i) items worth less than $50, but may not be cash, checks, loans, or negotiable instruments;

(ii) item is given in the context of a relationship, such as kinship, or a personal, professional, or business relationship that is independent of the SBOE Member's official capacity;

(iii) fees for services rendered outside the SBOE Member's official capacity;

(iv) government property issued by a governmental entity that allows the use of the property; or

(v) food, lodging, entertainment, and transportation, if accepted as a guest and the donor is present.

(F) In addition to the requirements of subparagraph (E) of this paragraph, the following provisions govern the disposition of an individual who is a PSF Service Provider or Fund Manager or who is both a lobbyist registered with the Texas Ethics Commission and who represents a person subject to the SBOE's or the TEA's regulation, inspection, or investigation. A gift, favor, service, or benefit from a PSF Service Provider or Fund Manager or lobbyist will not be considered a violation of the prohibition set forth in subparagraph (C) of this paragraph.

(i) An SBOE Member may not accept the following from a PSF Service Provider or Fund Manager or lobbyist, even if otherwise permitted under subparagraph (E) of this paragraph:

(I) loans, cash, checks, direct deposits, or negotiable instruments;

(II) transportation or lodging for a pleasure trip;

(III) transportation or lodging in connection with a fact-finding trip or to a seminar or conference at which the SBOE Member does not provide services;

(IV) entertainment worth more than $250 in a calendar year;

(V) gifts, other than awards and mementos, that combined are worth more than $250 in value for a calendar year. Gifts do not include food, entertainment, lodging, and transportation if accepted as a guest and the PSF Service Provider or Fund Manager or lobbyist is present; or

(VI) individual awards and mementos worth more than $250 each if from a lobbyist or worth $50 or more each if from a PSF Service Provider or Fund Manager.

(ii) An SBOE Member may accept food and beverages as a guest if the PSF Service Provider or Fund Manager or lobbyist is present.

(G) An SBOE Member may not solicit, agree to accept, or accept an honorarium in consideration for services that the SBOE Member would not have been asked to provide but for the SBOE Member's official position. An SBOE Member may accept food, transportation, and lodging in connection with a speech performed as a result of the SBOE Member's position in accordance with the rulings with the Texas Ethics Commission, which may place limitations on the type of entity that may fund such travel. An SBOE Member must report the food, lodging, or transportation accepted under this subparagraph in the SBOE Member's annual personal financial statement.

(H) Under no circumstances shall an SBOE Member accept a prohibited gift if the source of the gift is not identified or if the SBOE Member knows or has reason to know that the gift is being offered through an intermediary.

(I) If an unsolicited prohibited gift is received by an SBOE Member, he or she should return the gift to its source. If that is not possible or feasible, the gift should be donated to charity. The SBOE Member shall report the return of the gift or the donation of the gift to the commissioner of education.

(J) A PSF Service Provider or Fund Manager shall file a report annually with the TEA's PSF office, in the format specified by the PSF staff, on or before January 31 of each year. [on the expenditure report provided in this subparagraph entitled "Report of Expenditures of Persons Providing Services to the State Board of Education Relating to the Management and Investment of the Permanent School Fund."] The report shall be for the time period beginning on January 1 and ending on December 31 of the previous year. The expenditure report must describe in detail any expenditure of more than $50 made by the Person on behalf of:

[Figure: 19 TAC §33.5(n)(2)(J)]

(i) an SBOE Member;

(ii) the commissioner of education; or

(iii) an employee of the TEA or of a nonprofit corporation created under the Texas Education Code, §43.006.

(K) A PSF Service Provider or Fund Manager shall file a report annually with the TEA's PSF office, in the format specified by the PSF staff, on or before January 31 of each year. The report will be deemed to be filed when it is actually received. The report shall be for the time period beginning on January 1 and ending on December 31 of the previous year. It shall list any individuals who served in any of the following capacities at any time during the reporting period:

(i) all members of the governing body of the PSF Service Provider or Fund Manager;

(ii) the officers of the PSF Service Provider or Fund Manager;

(iii) any broker who conducts transactions with PSF funds;

(iv) all members of the governing body of the firm of a broker who conducts transactions with PSF funds; and

(v) all officers of the firm of a broker who conducts transactions with PSF funds.

(L) This subsection does not apply to campaign contributions.

(M) Each SBOE Member and each PSF Service Provider and Fund Manager shall, no later than April 15, file an annual report affirmatively disclosing any violation of this code of ethics known to that Person during the time period beginning January 1 and ending December 31 of the previous year which has not previously been disclosed in writing to the commissioner of education for distribution to all board members, or affirmatively state that the Person has no knowledge of any such violation. For purposes of this subparagraph only, "SBOE Member" means only the individual elected official.

(o) Campaign contributions.

(1) A PSF Service Provider or Fund Manager shall, no later than January 31 and July 31, file a semi-annual report of each political contribution that the PSF Service Provider or Fund Manager has made to an SBOE Member or a candidate seeking election to the SBOE in writing to the commissioner of education. The report shall be for the six-month time period preceding the reporting dates and include the name of each SBOE Member or candidate seeking election to the SBOE who received a contribution, the amount of each contribution, and date of each contribution. Subsection (u) of this section does not apply to the first report filed. A report shall be filed even if the PSF Service Provider or Fund Manager made no reportable contribution during the reporting period to an SBOE Member or a candidate seeking election to the SBOE. The commissioner of education shall communicate the information included in the disclosure to all SBOE Members.

(2) Any person or firm filing a response to an RFP or RFQ relating to the management and investments of the PSF shall disclose in the response whether at any time in the preceding four years from the due date of the response to the RFP or RFQ the person or firm has made a campaign contribution to a candidate for or member of the SBOE.

(p) Compliance with professional standards.

(1) SBOE Members and PSF Service Providers who are members of professional organizations which promulgate standards of conduct must comply with those standards.

(2) To the extent applicable to them, PSF Service Providers must comply with the Code of Ethics and Standards of Professional Conduct of the Chartered Financial Analyst Institute.

(q) Transactions involving PSF Service Providersor Fund Managers.

(1) A PSF Service Provider or Fund Manager other than a PSF executing broker shall not engage in any transaction involving the assets of the PSF with a Person who is an SBOE Member, Investment Counsel, a consultant to the SBOE or to an SBOE Member, or a member of the PSF staff or TEA legal staff who is responsible for managing or investing assets of the PSF or providing investment or management advice or legal advice regarding the investment or management of the PSF.

(2) A PSF Service Provider or Fund Manager other than a PSF executing broker shall report to the SBOE on a quarterly basis all investment transactions or trades and any fees or compensation paid or received in connection with the transactions or trades with a Person who is an SBOE Member, Investment Counsel, a consultant to the SBOE or an SBOE Member, or a member of the PSF staff or TEA legal staff who is responsible for managing or investing assets of the PSF or providing investment or management advice or legal advice regarding the investment or management of the PSF.

(r) Compliance and enforcement.

(1) The SBOE will enforce this section through its chair or vice chair or the commissioner of education.

(2) Any violation of this section will be reported to the chair and vice chair of the SBOE and the commissioner of education and a recommended action will be presented to the SBOE by the chair or the commissioner. A violation of this section may result in the termination of the contract or a lesser sanction. Repeated minor violations may also result in the termination of the contract. With respect to Fund Managers, the recommended action, if any, shall be limited to a withdrawal or other disposition of the PSF's interest in the investment vehicle, each in accordance with the governing documents of the investment vehicle and laws applicable thereto.

(3) The PSF compliance officer under the direction of the TEA confidentiality officer shall act as custodian of all statements, waivers, and reports required under this section for purposes of public disclosure requirements.

(4) The ethics advisor of the TEA shall respond to inquiries from the SBOE Members and PSF Service Providers concerning the provisions of this section. The ethics advisor may confer with the general counsel and the executive administrator of the PSF.

(5) No payment shall be made to a PSF Service Provider who has failed to timely file a completed report as described by subsection (m) of this section, until a completed report is filed.

(s) Ethics training. The SBOE shall receive annual training regarding state ethics laws through the Texas Ethics Commission and the TEA's ethics advisor.

(t) TEA general ethical standards. The commissioner of education and PSF staff shall comply with the General Ethical Standards for the Staff of the Permanent School Fund and the Commissioner of Education.

(u) Reporting period. A new report required by an amendment to the code of ethics need only concern events after the effective date of the amendment. An amendment to a rule that presently requires a report does not affect the reporting period unless the amendment explicitly changes the reporting period.

(v) Statutory statement.

(1) A "statutory financial advisor or service provider" as defined in this subsection shall on or before April 15 file a statement as required by Texas Government Code, §2263.005, with the commissioner of education and the state auditor, for the previous calendar year. The statement will be deemed filed when it is actually received. A statutory financial advisor or service provider shall promptly file a new or amended statement with the commissioner of education and the state auditor whenever there is new information required to be reported under Texas Government Code, §2263.005(a).

(2) A "statutory financial advisor or service provider" is a member of the Committee of Investment Advisors or an individual or business entity, including a financial advisor, financial consultant, money or investment manager, or broker, who is not an employee of the TEA, but who provides financial services or advice to the TEA or the SBOE or an SBOE member in connection with the management and investment of the PSF and who may reasonably be expected to receive, directly or indirectly, more than $5,000 in compensation from the TEA or the SBOE during a fiscal year.

(3) An annual statement required to be filed under this subsection will be made using the form developed by the state auditor.

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 February 26, 2018.

TRD-201800800

Cristina De La Fuente-Valadez

Director, Rulemaking

Texas Education Agency

Earliest possible date of adoption: April 8, 2018

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


19 TAC §33.15, §33.20

The State Board of Education (SBOE) proposes amendments to §33.15 and §33.20, concerning statement of investment objectives, policies, and guidelines of the Texas Permanent School Fund (PSF). The proposed amendments would update the rate of return objective of the PSF and clarify roles and responsibilities for providing advice to the SBOE on benchmark and performance reporting.

In accordance with statute, the rules in 19 TAC Chapter 33 establish investment objectives, policies, and guidelines for the Texas PSF.

Section 33.15 establishes the investment objectives, PSF goal and objectives, investment rate of return and risk objectives, and the asset allocation policy. The proposed amendment to §33.5 would update the rate of return objective of the PSF.

Section 33.20 addresses responsible parties and the duties related to the PSF. The proposed amendment to §33.20 would clarify roles and responsibilities for providing advice to the SBOE on benchmark and performance reporting.

The SBOE approved the amendment for first reading and filing authorization at its February 2, 2018 meeting.

The proposed amendments would have no procedural and reporting implications. The proposed amendments would have no locally maintained paperwork requirements.

FISCAL NOTE. Holland Timmins, executive administrator and chief investment officer of the Texas Permanent School Fund, has determined that for the first five-year period the proposed amendments are in effect there will be no additional costs to state or local government as a result of enforcing or administering the proposed amendments.

There is no effect on local economy for the first five years that the proposed amendments are in effect; therefore, no local employment impact statement is required under Texas Government Code, §2001.022. The proposed amendments do not impose a cost on regulated persons and, therefore, is not subject to Texas Government Code, §2001.0045.

GOVERNMENT GROWTH IMPACT. TEA staff has determined that the proposed amendments do not have a government growth impact pursuant to Texas Government Code, §2001.0221.

PUBLIC BENEFIT/COST NOTE. Mr. Timmins has determined that for each year of the first five years the proposed amendments are in effect, the public benefit anticipated as a result of enforcing the amendments will be updated and clarified provisions supporting the management and investment of the PSF. There is no anticipated economic cost to persons who are required to comply with the proposed amendments.

ECONOMIC IMPACT STATEMENT AND REGULATORY FLEXIBILITY ANALYSIS FOR SMALL BUSINESSES, MICROBUSINESSES, AND RURAL COMMUNITIES. There is no direct adverse economic impact for small businesses, microbusinesses, and rural communities; therefore, no regulatory flexibility analysis, specified in Texas Government Code, §2006.002, is required.

REQUEST FOR PUBLIC COMMENT. Comments on the proposal may be submitted to Cristina De La Fuente-Valadez, Rulemaking, Texas Education Agency, 1701 North Congress Avenue, Austin, Texas 78701. Comments may also be submitted electronically to rules@tea.texas.gov. A request for a public hearing on the proposed amendments 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.

STATUTORY AUTHORITY. The amendments are proposed under the Texas Education Code (TEC), §7.102(c)(31), which states that the SBOE may invest the PSF within the limits of the authority granted by the Texas Constitution, Article VII, §5, and the TEC, Chapter 43; TEC, §7.102(c)(33), which authorizes the SBOE to adopt an annual report on the status of the guaranteed bond program and states that the SBOE may adopt rules as necessary to administer the guaranteed bond program as provided under the TEC, Chapter 45, Subchapter C; TEC, §43.0031, which requires the SBOE to adopt and enforce an ethics policy regarding management and investment of the PSF; TEC, §43.0033, which requires certain persons providing services to the SBOE regarding management and investment of the PSF to file expenditure reports; TEC, §43.004, which requires the SBOE to adopt written investment objectives for the PSF and employ a service to analyze the performance of the PSF; Texas Government Code, §2263.004, which requires the SBOE to adopt by rule standards of conduct applicable to certain financial advisors or service providers; and Texas Constitution, Article VII, §5, which describes the PSF, the limit on distributions to the Available School Fund, the setting of spending rates by the SBOE, and the ten-year distribution test; authorizes a bond guarantee utilizing the PSF; and describes the management of the PSF by the SBOE.

CROSS REFERENCE TO STATUTE. The amendments implement the Texas Education Code, §§7.102(c)(31) and (33), 43.0031, 43.0033, and 43.004; Texas Government Code, §2263.004; and the Texas Constitution, Article VII, §5(d), and (f).

§33.15.Objectives.

(a) - (b) (No change.)

(c) Investment rate of return and risk objectives.

(1) - (4) (No change.)

(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 [actual asset allocation of the PSF for the relevant time period], 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) (No change.)

(d) (No change.)

§33.20.Responsible Parties and Their Duties.

(a) The Texas Constitution, Article VII, §§1-8, establishes the Available School Fund, the Texas Permanent School Fund (PSF), and the State Board of Education (SBOE), and 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 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 [recommendations] 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.

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

(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.

(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;

(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) representing the PSF to the state.

(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.

(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.

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 February 26, 2018.

TRD-201800799

Cristina De La Fuente-Valadez

Director, Rulemaking

Texas Education Agency

Earliest possible date of adoption: April 8, 2018

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


CHAPTER 61. SCHOOL DISTRICTS

SUBCHAPTER A. BOARD OF TRUSTEES RELATIONSHIP

19 TAC §61.1

The State Board of Education (SBOE) proposes an amendment to §61.1, concerning continuing education for school board members. The proposed amendment would reflect changes made by Senate Bill (SB) 1566, 85th Texas Legislature, Regular Session, 2017, to the SBOE's duty to provide training courses for independent school district trustees.

The 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 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, and specified hours of continuing education based on identified needs.

SB 1566, 85th Texas Legislature, Regular Session, 2017, amended the TEC, §11.159, to specify that the SBOE shall require board members to complete at least three hours of training every two years on evaluating student academic performance. The bill also outlines when a board member must complete this training.

The proposed amendment to §61.1 would implement SB 1566 as follows.

In subsection (b), proposed new paragraph (4) would be added to require the entire board to receive continuing education on evaluating student academic performance. The purpose of the proposed training would be to provide research-based information to board members designed to support the oversight role of the board of trustees outlined in the TEC, §11.1515. Proposed new paragraph (4) would specify when board members must take the training, who may provide the training, the required length of the training, and the information that must be approved by the Texas Education Agency and included in the training. The proposed new paragraph would also allow the training on evaluating student academic performance to meet the requirement for a team-building session if the entire school board and superintendent attend the training.

Subsection (j) would be amended to require the school board president to announce board member continuing education training outcomes at either the last regular meeting of the board of trustees before an election of trustees or, for years in which an election will not be held, at the regular meeting preceding the uniform election date at which board members are regularly elected for the school district. If the minutes from that meeting reflect that a trustee is deficient in training, the minutes would be required to be posted on the district's Internet website within 10 business days of the meeting and remain on the website until any trustee training deficits have been corrected.

In addition, the following changes would be made.

Subsection (b)(1)(A) would be amended to allow a new board member to participate in a local district orientation session within one year before the board member's election or appointment.

Subsection (b)(2) would be amended to specify that the required team-building session must be three hours in length.

Subsection (d) would be amended to specify that a district is not responsible for any costs to train an individual who is not a current board member.

Subsection (f)(4) would be added to clarify that an ESC is not required to register as a provider.

New subsection (l) would be added to provide for an annual commendation for local board-superintendent teams that effectively implement the commissioner's trustee improvement and evaluation tool developed under the TEC, §11.182.

The SBOE approved the amendment for first reading and filing authorization at its February 2, 2018 meeting.

Proposed new §61.1(b)(4)(E) would outline the required content for the training on evaluating student academic performance and would require authorized providers, which may include school districts, to submit their curriculum to TEA for approval. In addition, proposed new §61.1(b)(4)(C) would require that a provider, which may include a school district, must demonstrate proficiency in the content outlined in subsection (b)(4)(E) in order to become an authorized provider for the training.

The proposed amendment would impact locally maintained paperwork requirements. In accordance with current 19 TAC §61.1, verification of completion of board member continuing education must be maintained by the participant and participant's school district. Minutes of the board meeting in which continuing education hours obtained by each board member are announced must also be maintained locally. Previously, statute required this meeting to take place at the last board meeting held during a calendar year. SB 1566, 85th Texas Legislature, Regular Session, 2017, updated this requirement such that this board meeting is to take place before the election of trustees. In addition, SB 1566 also requires the minutes of this board meeting to be posted to the district website if those minutes reflect that a trustee is deficient in any SBOE-required continuing education.

FISCAL NOTE. A.J. Crabill, deputy commissioner for governance, has determined that for the first five-year period the proposed amendment is in effect there will be no additional costs to state or local government as a result of enforcing or administering the proposed amendment.

There is no effect on local economy for the first five years that the proposed amendment is in effect; therefore, no local employment impact statement is required under Texas Government Code, §2001.022. The proposed amendment does not impose a cost on regulated persons and, therefore, is not subject to Texas Government Code, §2001.0045.

GOVERNMENT GROWTH IMPACT. TEA staff has determined that the proposed amendment does have a government growth impact pursuant to Texas Government Code, §2001.0221.

The proposed amendment would create a new regulation. The proposal would require a trustee to complete at least three hours of training every two years on evaluating student academic performance. A new trustee must complete the training with an authorized provider within 120 days after the date of the trustee's election or appointment and a returning trustee to complete the training by the second anniversary of the completion of the trustee's previous training.

In addition, the proposed amendment would repeal the board president's requirement to have the minutes of the last regular meeting held during a calendar year reflect whether any trustees are delinquent in meeting training required as of the date of the meeting. The board president was also required to make that information available to the local media. The proposed amendment, in place of the deleted regulation, would create a new regulation. The proposed amendment would require that the minutes of the last regular meeting of the board of trustees held before an election of trustees reflect whether each trustee has met or is deficient in meeting the training required by the SBOE for the trustee as of the first anniversary of the date of the trustee's election or appointment. The proposed amendment would require the district, if the minutes reflect that a trustee is deficient, to 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.

PUBLIC BENEFIT/COST NOTE. Mr. Crabill has determined that for each year of the first five years the proposed amendment is in effect, the public benefit anticipated as a result of enforcing the amendment will be alignment of the rule with statute and support for school boards in providing oversight regarding student academic achievement and strategic leadership for maximizing student performance. There is no anticipated economic cost to persons who are required to comply with the proposed amendment.

ECONOMIC IMPACT STATEMENT AND REGULATORY FLEXIBILITY ANALYSIS FOR SMALL BUSINESSES, MICROBUSINESSES, AND RURAL COMMUNITIES. There is no direct adverse economic impact for small businesses, microbusinesses, and rural communities; therefore, no regulatory flexibility analysis, specified in Texas Government Code, §2006.002, is required.

REQUEST FOR PUBLIC COMMENT. Comments on the proposal may be submitted to Cristina De La Fuente-Valadez, Rulemaking, Texas Education Agency, 1701 North Congress Avenue, Austin, Texas 78701. Comments may also be submitted electronically to rules@tea.texas.gov. A request for a public hearing on the proposed amendment 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.

STATUTORY AUTHORITY. The amendment is proposed under the Texas Education Code, §11.159, which requires the State Board of Education to provide a training course for school board trustees, including three hours of training every two years on evaluating student academic performance.

CROSS REFERENCE TO STATUTE. The amendment implements the Texas Education Code, §11.159.

§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 receive a local district orientation and an orientation to the TEC.

(A) Each new board member shall participate in a local district orientation session within one year before or 60 days [before or] 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) 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 [of a length deemed appropriate by the board, but generally 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.

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

(A) In a board member's first year of service, he or she shall 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.

(B) Following a board member's first year of service, he or she shall 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.

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

(4) Each school board member shall complete continuing education every two years on evaluating student academic performance.

(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) A candidate for school board may complete the training up to one year before the candidate is elected. If a newly elected or appointed school board member did not complete this training in the year preceding the member's election, the member must complete the training within 120 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.

(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, or through other means as determined by the commissioner of education.

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

(E) The continuing education training required by this subsection shall be approved by TEA and include, at a minimum, the following:

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

(ii) instruction in progress monitoring 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.

(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)(2) of this section, the training may serve to meet a school board member's obligation to receive training under subsection (b)(2) and (4) of this section.

(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).

(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.

(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)[, (2), and (3)] 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.

(g) 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 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) Annually, at the last regular meeting of the board of trustees before an election of trustees [held during a calendar year], 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 [date of the meeting]. The announcement shall state that completing the annual required continuing education is a basic obligation and expectation of any sitting board member under SBOE [State Board of Education] rule. In any year in which an election of board members will not be held, the annual announcement should be made at the regular meeting preceding the uniform election date at which board members are regularly elected for the school district. The president shall cause the minutes of the local board to reflect the announcement [information] 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 [shall make this information available to the local media].

(k) Annually, the SBOE shall commend those local board-superintendent teams that receive at least eight hours of the continuing education specified in subsection (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.

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 February 26, 2018.

TRD-201800807

Cristina De La Fuente-Valadez

Director, Rulemaking

Texas Education Agency

Earliest possible date of adoption: April 8, 2018

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


CHAPTER 74. CURRICULUM REQUIREMENTS

SUBCHAPTER A. REQUIRED CURRICULUM

19 TAC §74.5

The State Board of Education (SBOE) proposes an amendment to §74.5, concerning academic achievement records/transcripts. The proposed amendment would update the section to align with recent changes to graduation and instructional requirements.

The 83rd Texas Legislature, Regular Session, 2013, passed House Bill (HB) 5, amending the Texas Education Code (TEC), §28.025, to change the high school graduation programs from the minimum, recommended, and advanced high school programs to one foundation high school program with endorsements to increase flexibility in graduation requirements for students.

In January 2014, the SBOE adopted rules to implement the Foundation High School Program, effective July 8, 2014. Under the Foundation High School Program, a specific speech course is not a requirement to graduate; alternatively, to satisfy the speech requirement, a student must demonstrate proficiency, as determined by the district in which the student is enrolled, in a set of speech-related skills: delivering clear verbal messages; choosing effective nonverbal behaviors; listening for desired results; applying valid critical-thinking and problem-solving processes; and identifying, analyzing, developing, and evaluating communication skills needed for professional and social success in interpersonal situations, group interactions, and personal and professional presentations. In April 2014, the SBOE gave final approval for proposed revisions to 19 TAC Chapter 74, Subchapter A, to align with the requirements of HB 5, including changes to the required content for the academic achievement records/transcripts and diplomas.

In 2013, the 83rd Texas Legislature also passed HB 897, amending the TEC, §28.0023, to require that the SBOE include instruction in cardiopulmonary resuscitation (CPR) for students in Grades 7-12. The legislation also requires school districts and open-enrollment charter schools to provide instruction in CPR and for students to receive the CPR instruction at least once before graduation. The legislation specifies that the instruction may be provided as part of any course.

The 84th Texas Legislature, 2015, passed HB 181, amending the TEC, §28.025(c-1), (c-5), and (e-1), to remove the requirement that school districts and charter schools identify endorsements and performance acknowledgments on high school diplomas. Districts must still include this information on high school academic achievement records/transcripts. In April 2016, the SBOE approved a proposed amendment to 19 TAC §74.5 to align the rule for the academic achievement records with the requirements of HB 181.

The 85th Texas Legislature, Regular Session, 2017, passed SB 30, also known as the Community Safety Education Act. The legislation added TEC, §28.012, to require the SBOE to enter into a memorandum of understanding with the Texas Commission on Law Enforcement (TCOLE) to establish the respective responsibilities of each agency in developing required instruction, including curriculum and instructional modules, on proper interaction with peace officers during traffic stops and other in-person encounters. SB 30 also required the SBOE to adopt rules to include the instruction on proper interaction with peace officers during traffic stops and other in-person encounters in one or more courses in the required curriculum for students in Grades 9-12. At its November 2017 meeting, the Committee of the Full Board discussed the requirements of the new legislation and the board's rulemaking responsibility.

The 85th Texas Legislature, Regular Session, 2017, also passed SB 671, adding TEC, §28.025(b-21), to require that the SBOE adopt criteria to allow a student to satisfy one graduation credit toward the languages other than English requirement by successfully completing a dual language immersion program at an elementary school.

The proposed amendment to §74.5, Academic Achievement Record (Transcript), would update the rule to require the academic achievement record to indicate the completion of requirements for speech, CPR instruction (if the instruction is provided in Grades 9-12), instruction on proper interaction with law enforcement, and satisfaction of a graduation credit for languages other than English by successfully completing a dual language immersion program at an elementary school.

The SBOE approved the amendment for first reading and filing authorization at its February 2, 2018 meeting.

The proposed amendment would require districts to report the completion of certain requirements and instruction on the academic achievement record.

The proposed amendment would have no new locally maintained paperwork requirements.

FISCAL NOTE. Monica Martinez, associate commissioner for standards and support services, has determined that for the first five-year period the proposed amendment is in effect there will be no additional costs to state government as a result of enforcing or administering the proposed amendment. However, there may be costs to districts and charter schools associated with required updates to local student information systems. These may include the need for professional development and amendments to district-developed databases. Since the design and format of and data collection for the academic achievement record (high school transcript) are made at the local district level, it is difficult to estimate the fiscal impact on any given district.

There is no effect on local economy for the first five years that the proposed amendment is in effect; therefore, no local employment impact statement is required under Texas Government Code, §2001.022. The proposed amendment does not impose a cost on regulated persons and, therefore, is not subject to Texas Government Code, §2001.0045.

GOVERNMENT GROWTH IMPACT. TEA staff has determined that the proposed amendment does not have a government growth impact pursuant to Texas Government Code, §2001.0221.

PUBLIC BENEFIT/COST NOTE. Ms. Martinez has determined that for each year of the first five years the proposed amendment is in effect, the public benefit anticipated as a result of enforcing the amendment will be improved documentation of requirements on the academic achievement record and the ability to more effectively transmit that information between school districts. There is no anticipated economic cost to persons who are required to comply with the proposed amendment.

ECONOMIC IMPACT STATEMENT AND REGULATORY FLEXIBILITY ANALYSIS FOR SMALL BUSINESSES, MICROBUSINESSES, AND RURAL COMMUNITIES. There is no direct adverse economic impact for small businesses, microbusinesses, and rural communities; therefore, no regulatory flexibility analysis, specified in Texas Government Code, §2006.002, is required.

REQUEST FOR PUBLIC COMMENT. Comments on the proposal may be submitted to Cristina De La Fuente-Valadez, Rulemaking, Texas Education Agency, 1701 North Congress Avenue, Austin, Texas 78701. Comments may also be submitted electronically to rules@tea.texas.gov. A request for a public hearing on the proposed amendment 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.

STATUTORY AUTHORITY. The amendment is proposed under the Texas Education Code (TEC), §7.102(c)(13), which requires the State Board of Education (SBOE) to adopt transcript forms and standards for differentiating high school performance for purposes of reporting academic achievement under TEC, §28.025; TEC, §28.0023, which requires the SBOE to adopt rules to require instruction in cardiopulmonary resuscitation for students in Grades 7-12; and TEC, §28.025, which requires the SBOE to adopt rules to include the instruction on proper interaction with peace officers during traffic stops and other in-person encounters in one or more courses in the required curriculum for students in Grades 9-12 and requires that the SBOE adopt criteria to allow a student to satisfy one graduation credit toward the languages other than English requirement by successfully completing a dual language immersion program at an elementary school.

CROSS REFERENCE TO STATUTE. The amendment implements the Texas Education Code, §§7.102(c)(13), 28.0023, and 28.025.

§74.5.Academic Achievement Record (Transcript).

(a) The commissioner of education shall develop and distribute to each school district and institution of higher education the state guidelines for a common academic achievement record and coding system for courses and instructions for recording information on the academic achievement record. Each school district must use the coding system provided by the commissioner.

(b) Following guidelines developed by the commissioner, each school district must use an academic achievement record (transcript) form that includes the following:

(1) student demographics;

(2) school data;

(3) student data; and

(4) the record of courses and credits earned.

(c) The academic achievement record shall serve as the academic record for each student and must be maintained permanently by the district. Each district must ensure that copies of the record are made available for a student transferring from one district to another. To ensure appropriate placement of a transfer student, a district must respond promptly to each request for student records from a receiving school district.

(d) Any credit earned by a student must be recorded on the academic achievement record, regardless of when the credit was earned.

(e) A student who completes high school graduation requirements shall have attached to the academic achievement record a seal approved by the SBOE.

(f) A student who completes the requirements for an endorsement shall have the endorsement clearly indicated on the academic achievement record.

(g) A student who earns a performance acknowledgment shall have the performance acknowledgment clearly indicated on the academic achievement record.

(h) A student who earns the distinguished level of achievement shall have the distinguished level of achievement clearly indicated on the academic achievement record.

(i) A student who demonstrates proficiency in speech as specified in §74.11(a)(3) of this title (relating to High School Graduation Requirements) shall have completion of the speech requirement clearly indicated on the academic achievement record.

(j) A student who completes the required instruction in cardiopulmonary resuscitation (CPR) as specified in §74.38 of this title (relating to Requirements for Instruction in Cardiopulmonary Resuscitation (CPR)) in Grade 9, 10, 11, or 12 shall have completion of the CPR instruction clearly indicated on the academic achievement record.

(k) A student who completes the required instruction on proper interaction with peace officers shall have completion of the instruction clearly indicated on the academic achievement record.

(l) A student who satisfies a languages other than English graduation credit requirement by successfully completing a dual language immersion program at an elementary school in accordance with §74.12(b)(5)(E) of this title (relating to Foundation High School Program) shall have the credit clearly indicated on the academic achievement record.

(m) [(i)] A student who completes all graduation requirements except for required end-of-course assessment instruments may be issued a certificate of coursework completion. The academic achievement record will include a notation of the date such a certificate was issued to the student.

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 February 26, 2018.

TRD-201800798

Cristina De La Fuente-Valadez

Director, Rulemaking

Texas Education Agency

Earliest possible date of adoption: April 8, 2018

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


CHAPTER 110. TEXAS ESSENTIAL KNOWLEDGE AND SKILLS FOR ENGLISH LANGUAGE ARTS AND READING

SUBCHAPTER D. OTHER HIGH SCHOOL ENGLISH LANGUAGE ARTS AND READING COURSES

The State Board of Education (SBOE) proposes the repeal of §110.82 and amendments to §§110.83 - 110.85, concerning Texas Essential Knowledge and Skills (TEKS) for English language arts and reading. The proposed repeal and amendments would update the amount of credit available for Advanced Placement (AP) English language arts and reading courses and remove a rule that is outdated and duplicative of other SBOE rules.

Rules in 19 TAC Chapter 110, Subchapter D, identify the requirements for high school English language arts and reading AP and International Baccalaureate courses. The rules also include requirements for independent study courses for which a student may receive English language arts and reading credit.

The proposed repeal would eliminate §110.82, relating to independent study in English, journalism, and/or speech, to remove a rule that is duplicative and reduce confusion.

The proposed amendments to §§110.83 - 110.85 would modify the amount of credit that could be earned for AP courses in English language arts and reading to eliminate the range of credits. The section titles would be updated to indicate the change in credit.

The SBOE approved the revisions for first reading and filing authorization at its February 2, 2018 meeting.

The proposed revisions would have no new procedural and reporting requirements. The proposed revisions would have no new locally maintained paperwork requirements.

FISCAL NOTE. Monica Martinez, associate commissioner for standards and support services, has determined that for the first five-year period the proposed revisions are in effect there will be no additional costs to state and local government as a result of enforcing or administering the proposed revisions.

There is no effect on local economy for the first five years that the proposed revisions are in effect; therefore, no local employment impact statement is required under Texas Government Code, §2001.022. The proposed revisions do not impose a cost on regulated persons and, therefore, are not subject to Texas Government Code, §2001.0045.

GOVERNMENT GROWTH IMPACT. TEA staff has determined that the proposed revisions do not have a government growth impact pursuant to Texas Government Code, §2001.0221.

PUBLIC BENEFIT/COST NOTE. Ms. Martinez has determined that for each year of the first five years the proposed revisions are in effect, the public benefit anticipated as a result of enforcing the revisions will be consistency in TEKS-based AP course credit and the elimination of language that is outdated or duplicative to prevent confusion for administrators and teachers. There is no anticipated economic cost to persons who are required to comply with the proposed revisions.

ECONOMIC IMPACT STATEMENT AND REGULATORY FLEXIBILITY ANALYSIS FOR SMALL BUSINESSES, MICROBUSINESSES, AND RURAL COMMUNITIES. There is no direct adverse economic impact for small businesses, microbusinesses, and rural communities; therefore, no regulatory flexibility analysis, specified in Texas Government Code, §2006.002, is required.

REQUEST FOR PUBLIC COMMENT. Comments on the proposal may be submitted to Cristina De La Fuente-Valadez, Rulemaking, Texas Education Agency, 1701 North Congress Avenue, Austin, Texas 78701. Comments may also be submitted electronically to rules@tea.texas.gov. A request for a public hearing on the proposed revisions 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.

19 TAC §110.82

STATUTORY AUTHORITY. The repeal is proposed under the Texas Education Code (TEC), §7.102(c)(4), which requires the State Board of Education (SBOE) to establish curriculum and graduation requirements; §28.002, which identifies the subjects of the required curriculum and requires the SBOE by rule to 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 §28.025, which requires the SBOE by rule to 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 repeal implements the Texas Education Code, §§7.102(c)(4), 28.002, and 28.025.

§110.82.Independent Study in English, Journalism, and/or Speech (One-Half to One Credit).

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 February 26, 2018.

TRD-201800794

Cristina De La Fuente-Valadez

Director, Rulemaking

Texas Education Agency

Earliest possible date of adoption: April 8, 2018

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


19 TAC §§110.83 - 110.85

STATUTORY AUTHORITY. The amendments are proposed under the Texas Education Code (TEC), §7.102(c)(4), which requires the State Board of Education (SBOE) to establish curriculum and graduation requirements; §28.002, which identifies the subjects of the required curriculum and requires the SBOE by rule to 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 §28.025, which requires the SBOE by rule to 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 the Texas Education Code, §§7.102(c)(4), 28.002, and 28.025.

§110.83.Advanced Placement (AP) English Language and Composition ([One-Half to] One Credit).

(a) General requirements. Students shall [can] be awarded [one-half to] one credit for successful completion of this course. Recommended prerequisites: English II.

(b) Content requirements. Content requirements for Advanced Placement (AP) English Language and Composition are prescribed in the College Board Publication Advanced Placement Course Description: English, published by The College Board. This publication may be obtained from the College Board Advanced Placement Program.

§110.84.Advanced Placement (AP) English Literature and Composition ([One-Half to] One Credit).

(a) General requirements. Students shall [can] be awarded [one-half to] one credit for successful completion of this course. Recommended prerequisite: English III or Advanced Placement (AP) English Language and Composition.

(b) Content requirements. Content requirements for Advanced Placement (AP) English Literature and Composition are prescribed in the College Board Publication Advanced Placement Course Description: English, published by The College Board. This publication may be obtained from the College Board Advanced Placement Program.

§110.85.Advanced Placement (AP) International English Language ([One-Half to] One Credit).

(a) General requirements. Students shall [can] be awarded [one-half to] one credit for successful completion of this course. Recommended prerequisite: English III.

(b) Content requirements. Content requirements for Advanced Placement (AP) International English Language are prescribed in the College Board Publication Advanced Placement Course Description: English, published by The College Board. This publication may be obtained from the College Board Advanced Placement Program.

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 February 26, 2018.

TRD-201800795

Cristina De La Fuente-Valadez

Director, Rulemaking

Texas Education Agency

Earliest possible date of adoption: April 8, 2018

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


CHAPTER 111. TEXAS ESSENTIAL KNOWLEDGE AND SKILLS FOR MATHEMATICS

SUBCHAPTER D. OTHER HIGH SCHOOL MATHEMATICS COURSES

The State Board of Education (SBOE) proposes amendments to §§111.53-111.55 and the repeal of §111.61, concerning Texas Essential Knowledge and Skills (TEKS) for mathematics. The proposed amendments and repeal would update the amount of credit available for Advanced Placement (AP) mathematics courses and remove a rule that is outdated and duplicative of other SBOE rules.

Rules in 19 TAC Chapter 111, Subchapter D, identify the requirements for high school AP and International Baccalaureate (IB) courses and for career and technical education (CTE) courses eligible for mathematics credit.

The proposed amendments to §§111.53-111.55 would modify the amount of credit that could be earned for AP courses in mathematics to eliminate the range of credits. The section titles would be updated to indicate the change in credit.

The CTE TEKS are included in 19 TAC Chapter 130, Texas Essential Knowledge and Skills for Career and Technical Education. In 2015, the SBOE approved new CTE TEKS, which were implemented beginning in the 2017-2018 school year. The new CTE TEKS that the SBOE approved for mathematics credit include revised course titles and section numbers. These outdated CTE courses are currently cross referenced in 19 TAC §111.61; therefore, the titles and/or section numbers for the courses are no longer aligned. The proposed repeal would eliminate §111.61, relating to CTE course for which students may receive mathematics credit, to remove a rule that is outdated and no longer aligned with other SBOE rules.

The SBOE approved the revisions for first reading and filing authorization at its February 2, 2018, meeting.

The proposed revisions would have no new procedural and reporting requirements. The proposed revisions would have no new locally maintained paperwork requirements.

FISCAL NOTE. Monica Martinez, associate commissioner for standards and support services, has determined that for the first five-year period the proposed revisions are in effect there will be no additional costs to state and local government as a result of enforcing or administering the proposed revisions.

There is no effect on local economy for the first five years that the proposed revisions are in effect; therefore, no local employment impact statement is required under Texas Government Code, §2001.022. The proposed revisions do not impose a cost on regulated persons and, therefore, are not subject to Texas Government Code, §2001.0045.

GOVERNMENT GROWTH IMPACT. TEA staff has determined that the proposed revisions do not have a government growth impact pursuant to Texas Government Code, §2001.0221.

PUBLIC BENEFIT/COST NOTE. Ms. Martinez has determined that for each year of the first five years the proposed revisions are in effect, the public benefit anticipated as a result of enforcing the revisions will be consistency in TEKS-based AP course credit and the elimination of language that is outdated or duplicative to prevent confusion for administrators and teachers. There is no anticipated economic cost to persons who are required to comply with the proposed revisions.

ECONOMIC IMPACT STATEMENT AND REGULATORY FLEXIBILITY ANALYSIS FOR SMALL BUSINESSES, MICROBUSINESSES, AND RURAL COMMUNITIES. There is no direct adverse economic impact for small businesses, microbusinesses, and rural communities; therefore, no regulatory flexibility analysis, specified in Texas Government Code, §2006.002, is required.

REQUEST FOR PUBLIC COMMENT. Comments on the proposal may be submitted to Cristina De La Fuente-Valadez, Rulemaking, Texas Education Agency, 1701 North Congress Avenue, Austin, Texas 78701. Comments may also be submitted electronically to rules@tea.texas.gov. A request for a public hearing on the proposed revisions 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.

19 TAC §§111.53 - 111.55

STATUTORY AUTHORITY. The amendments are proposed under the Texas Education Code (TEC), §7.102(c)(4), which requires the State Board of Education (SBOE) to establish curriculum and graduation requirements; §28.002, which identifies the subjects of the required curriculum and requires the SBOE by rule to 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 §28.025, which requires the SBOE by rule to 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 the Texas Education Code, §§7.102(c)(4), 28.002, and 28.025.

§111.53.Advanced Placement (AP) Statistics ([One-Half to] One Credit).

(a) General requirements. Students shall [can] be awarded [one-half to] one credit for successful completion of this course. Recommended prerequisites: Algebra II, Geometry.

(b) Content requirements. Content requirements for Advanced Placement (AP) Statistics are prescribed in the College Board Publication Advanced Placement Course Description: Statistics, published by The College Board. This publication may be obtained from the College Board Advanced Placement Program.

§111.54.Advanced Placement (AP) Calculus AB ([One-Half to] One Credit).

(a) General requirements. Students shall [can] be awarded [one-half to] one credit for successful completion of this course. Recommended prerequisite: Precalculus.

(b) Content requirements. Content requirements for Advanced Placement (AP) Calculus AB are prescribed in the College Board Publication Advanced Placement Course Description Mathematics: Calculus AB, Calculus BC, published by The College Board. This publication may be obtained from the College Board Advanced Placement Program.

§111.55.Advanced Placement (AP) Calculus BC ([One-Half to] One Credit).

(a) General requirements. Students shall [can] be awarded [one-half to] one credit for successful completion of this course. Recommended prerequisite: Precalculus.

(b) Content requirements. Content requirements for Advanced Placement (AP) Calculus BC are prescribed in the College Board Publication Advanced Placement Course Description: Calculus AB, Calculus BC, published by The College Board. This publication may be obtained from the College Board Advanced Placement Program.

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 February 26, 2018.

TRD-201800796

Cristina De La Fuente-Valadez

Director, Rulemaking

Texas Education Agency

Earliest possible date of adoption: April 8, 2018

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


19 TAC §111.61

STATUTORY AUTHORITY. The repeal is proposed under the Texas Education Code (TEC), §7.102(c)(4), which requires the State Board of Education (SBOE) to establish curriculum and graduation requirements; §28.002, which identifies the subjects of the required curriculum and requires the SBOE by rule to 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 §28.025, which requires the SBOE by rule to 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 repeal implements the Texas Education Code, §§7.102(c)(4), 28.002, and 28.025.

§111.61.Other Courses for Which Students May Receive Mathematics Credit.

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 February 26, 2018.

TRD-201800797

Cristina De La Fuente-Valadez

Director, Rulemaking

Texas Education Agency

Earliest possible date of adoption: April 8, 2018

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


CHAPTER 112. TEXAS ESSENTIAL KNOWLEDGE AND SKILLS FOR SCIENCE

SUBCHAPTER D. OTHER SCIENCE COURSES

19 TAC §112.81, §112.82

The State Board of Education (SBOE) proposes new §112.81 and §112.82, concerning Texas Essential Knowledge and Skills (TEKS) for science. The proposed new sections would align the rules with current course offerings by the International Baccalaureate (IB) Organization and update the amount of credit available for IB and Advanced Placement (AP) courses.

For students to earn state credit toward specific graduation requirements, a course must be approved by the SBOE and included in SBOE 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 all 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 November 2017 meeting, the SBOE was presented with proposed revisions to align the TEKS for English language arts and reading, mathematics, science, and languages other than English (LOTE) with current IB course offerings. At that meeting, the SBOE approved the proposed revisions to the English language arts and reading, mathematics, science, and LOTE IB courses for first reading and filing authorization. The SBOE's approval included the addition of eight IB courses to SBOE rules and proposed updates to the amount of credit available for 13 IB courses currently in rule. At the February 2, 2018 SBOE meeting, the SBOE approved revisions that would add two additional IB science courses, not currently in rule, to Chapter 112.

The proposed revisions to Chapter 112 would add two new two-credit IB courses, Design Technology Standard Level and Design Technology Higher Level, to the TEKS for science.

The SBOE approved the new sections in Chapter 112 for first reading and filing authorization at its February 2, 2018 meeting.

The proposed new sections would have no new procedural and reporting requirements. The proposed new sections would have no new locally maintained paperwork requirements.

FISCAL NOTE. Monica Martinez, associate commissioner for standards and support services, has determined that for the first five-year period the proposed new sections are in effect there will be no additional costs to state and local government as a result of enforcing or administering the proposed new sections.

There is no effect on local economy for the first five years that the proposed new sections are in effect; therefore, no local employment impact statement is required under Texas Government Code, §2001.022. The proposed new sections do not impose a cost on regulated persons and, therefore, are not subject to Texas Government Code, §2001.0045.

GOVERNMENT GROWTH IMPACT. TEA staff has determined that the proposed new sections do not have a government growth impact pursuant to Texas Government Code, §2001.0221.

PUBLIC BENEFIT/COST NOTE. Ms. Martinez has determined that for each year of the first five years the proposed new sections are in effect, the public benefit anticipated as a result of enforcing the new sections will be the availability of additional IB courses to allow students more flexibility in meeting state requirements for graduation and consistency in the amount of credit available for AP and IB courses. There is no anticipated economic cost to persons who are required to comply with the proposed new sections.

ECONOMIC IMPACT STATEMENT AND REGULATORY FLEXIBILITY ANALYSIS FOR SMALL BUSINESSES, MICROBUSINESSES, AND RURAL COMMUNITIES. There is no direct adverse economic impact for small businesses, microbusinesses, and rural communities; therefore, no regulatory flexibility analysis, specified in Texas Government Code, §2006.002, is required.

REQUEST FOR PUBLIC COMMENT. Comments on the proposal may be submitted to Cristina De La Fuente-Valadez, Rulemaking, Texas Education Agency, 1701 North Congress Avenue, Austin, Texas 78701. Comments may also be submitted electronically to rules@tea.texas.gov. A request for a public hearing on the proposed new sections 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.

STATUTORY AUTHORITY. The new sections are proposed under the Texas Education Code (TEC), §7.102(c)(4), which requires the State Board of Education (SBOE) to establish curriculum and graduation requirements; §28.002, which identifies the subjects of the required curriculum and requires the SBOE by rule to 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 §28.025, which requires the SBOE by rule to 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 new sections implement the Texas Education Code, §§7.102(c)(4), 28.002, and 28.025.

§112.81.International Baccalaureate (IB) Design Technology Standard Level (Two Credits).

(a) General requirements. Students shall be awarded two credits for successful completion of this course. Recommended prerequisites: two credits of high school laboratory science. This course is recommended for students in Grade 11 or 12.

(b) Content requirements. Content requirements for International Baccalaureate (IB) Design Technology Standard Level are prescribed by the International Baccalaureate Organization. Subject guides may be obtained from International Baccalaureate of North America.

§112.82.International Baccalaureate (IB) Design Technology Higher Level (Two Credits).

(a) General requirements. Students shall be awarded two credits for successful completion of this course. Recommended prerequisites: two credits of high school laboratory science. This course is recommended for students in Grade 11 or 12.

(b) Content requirements. Content requirements for International Baccalaureate (IB) Design Technology Higher Level are prescribed by the International Baccalaureate Organization. Subject guides may be obtained from International Baccalaureate of North America.

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 February 26, 2018.

TRD-201800802

Cristina De La Fuente-Valadez

Director, Rulemaking

Texas Education Agency

Earliest possible date of adoption: April 8, 2018

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


CHAPTER 113. TEXAS ESSENTIAL KNOWLEDGE AND SKILLS FOR SOCIAL STUDIES

SUBCHAPTER D. OTHER SOCIAL STUDIES COURSES

The State Board of Education (SBOE) proposes amendments to §§113.52, 113.56, and 113.60-113.68, the repeal of §113.69, and new §§113.71-113.75 concerning Texas Essential Knowledge and Skills (TEKS) for social studies. The proposed amendments, repeal, and new sections would align the rules with current course offerings by the International Baccalaureate (IB) Organization and update the amount of credit available for IB and Advanced Placement (AP) courses.

For students to earn state credit toward specific graduation requirements, a course must be approved by the SBOE and included in SBOE 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 November 2017 meeting, the SBOE was presented with proposed revisions to align the TEKS for English language arts and reading, mathematics, science, and languages other than English (LOTE) with current IB course offerings. At that meeting, the SBOE approved the proposed revisions to the English language arts and reading, mathematics, science, and LOTE IB courses for first reading and filing authorization. The SBOE's approval included the addition of eight IB courses to SBOE rules and proposed updates to the amount of credit available for 13 IB courses currently in rule. At the February 2, 2018 SBOE meeting, the SBOE updated to two credits each all IB courses and approved the revisions for second reading and final adoption.

Also at the February 2, 2018 meeting, the SBOE approved a proposal to update the TEKS for social studies to align rules with additional IB course offerings and update the amount of credit available for both IB and advanced social studies courses. The proposed revisions would also update IB social studies course titles and eliminate §113.69, Other Courses for which Student May Receive Social Studies Credit, as it is outdated and no longer necessary.

The SBOE approved the revisions to Chapter 113 for first reading and filing authorization at its February 2, 2018 meeting.

The proposed revisions would have no new procedural and reporting requirements. The proposed revisions would have no new locally maintained paperwork requirements.

FISCAL NOTE. Monica Martinez, associate commissioner for standards and support services, has determined that for the first five-year period the proposed revisions are in effect there will be no additional costs to state and local government as a result of enforcing or administering the proposed revisions.

There is no effect on local economy for the first five years that the proposed revisions are in effect; therefore, no local employment impact statement is required under Texas Government Code, §2001.022. The proposed revisions do not impose a cost on regulated persons and, therefore, are not subject to Texas Government Code, §2001.0045.

GOVERNMENT GROWTH IMPACT. TEA staff has determined that the proposed revisions do not have a government growth impact pursuant to Texas Government Code, §2001.0221.

PUBLIC BENEFIT/COST NOTE. Ms. Martinez has determined that for each year of the first five years the proposed revisions are in effect, the public benefit anticipated as a result of enforcing the revisions will be the availability of additional IB courses to allow students more flexibility in meeting state requirements for graduation and consistency in the amount of credit available for AP and IB courses. There is no anticipated economic cost to persons who are required to comply with the proposed revisions.

ECONOMIC IMPACT STATEMENT AND REGULATORY FLEXIBILITY ANALYSIS FOR SMALL BUSINESSES, MICROBUSINESSES, AND RURAL COMMUNITIES. There is no direct adverse economic impact for small businesses, microbusinesses, and rural communities; therefore, no regulatory flexibility analysis, specified in Texas Government Code, §2006.002, is required.

REQUEST FOR PUBLIC COMMENT. Comments on the proposal may be submitted to Cristina De La Fuente-Valadez, Rulemaking, Texas Education Agency, 1701 North Congress Avenue, Austin, Texas 78701. Comments may also be submitted electronically to rules@tea.texas.gov. A request for a public hearing on the proposed revisions 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.

19 TAC §§113.52, 113.56, 113.60 - 113.68, 113.71 - 113.75

STATUTORY AUTHORITY. The amendments and new rules are proposed under the Texas Education Code (TEC), §7.102(c)(4), which requires the State Board of Education (SBOE) to establish curriculum and graduation requirements; §28.002, which identifies the subjects of the required curriculum and requires the SBOE by rule to 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 §28.025, which requires the SBOE by rule to 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 and new rules implement the Texas Education Code, §§7.102(c)(4), 28.002, and 28.025.

§113.52.Social Studies Advanced Studies (One-Half [to One] Credit).

(a) General requirements. Students shall be awarded one-half [to one] unit of credit for successful completion of this course. Students may take this course with different course content for a maximum of two credits. [Students who are pursuing the Distinguished Achievement Program may take Social Studies Advanced Studies to earn state credit for developing, researching, and presenting their mentorship or independent study advanced measure.]

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

§113.56.Advanced Placement (AP) Human Geography (One-Half to One Credit).

(a) General requirements. Students shall be awarded either one-half credit or [to] one credit for successful completion of this course. When completed for one credit, this course may be used as a substitute for World Geography Studies. When completed for one-half credit, this course may be used to meet only elective course requirements.

(b) Content requirements. Content requirements for Advanced Placement (AP) Human Geography are prescribed in the College Board Publication Advanced Placement Course Description in Human Geography, published by The College Board and in §113.43 of this title (relating to World Geography Studies (One Credit), Beginning with School Year 2011-2012) when taught as a one credit course. Content requirements for AP Human Geography are prescribed in the College Board Publication Advanced Placement Course Description in Human Geography, published by The College Board when taught as a one-half credit course.

§113.60.International Baccalaureate (IB) History[,] Standard Level (SL) (Two Credits [One Credit]).

(a) General requirements. Students shall be awarded two credits [one credit] for successful completion of this course. This course may be used to meet only elective course requirements for state graduation.

(b) Content requirements. Content requirements for IB [International Baccalaureate (IB)] History SL are prescribed by the International Baccalaureate Organization. Subject guides may be obtained from International Baccalaureate of North America [in the International Baccalaureate publication History ].

§113.61.International Baccalaureate (IB) History of[:] Africa and the Middle East[,] Higher Level (HL) (Two Credits).

(a) General requirements. Students shall be awarded two credits for successful completion of this course. This course may be used to meet only elective course requirements for state graduation.

(b) Content requirements. Content requirements for IB [International Baccalaureate (IB)] History of Africa and the Middle East HL [SL] are prescribed by the International Baccalaureate Organization. Subject guides may be obtained from International Baccalaureate of North America [in the International Baccalaureate publication History: Africa].

§113.62.International Baccalaureate (IB) History of the[:] Americas[,] Higher Level (HL) (Two Credits).

(a) General requirements. Students shall be awarded two credits for successful completion of this course. One credit may be used to meet the course requirement in United States history for state graduation; the other credit may be used to meet only elective course requirements for state graduation.

(b) Content requirements. Content requirements for IB [International Baccalaureate (IB)] History of the[:] Americas HL are prescribed by the International Baccalaureate Organization. Subject guides may be obtained from International Baccalaureate of North America [in the International Baccalaureate publication History: Americas] and in §113.41 of this title (relating to United States History Studies Since 1877 (One Credit), Beginning with School Year 2011-2012).

§113.63.International Baccalaureate (IB) History of[: East and Southeast] Asia and Oceania[,] Higher Level (HL) (Two Credits).

(a) General requirements. Students shall be awarded two credits for successful completion of this course. This course may be used to meet only elective course requirements for state graduation.

(b) Content requirements. Content requirements for IB [International Baccalaureate (IB)] History of[: East and Southeast] Asia and Oceania HL are prescribed by the International Baccalaureate Organization. Subject guides may be obtained from International Baccalaureate of North America [in the International Baccalaureate publication History: East and Southeast Asia].

§113.64.International Baccalaureate (IB) History of[:] Europe[,] Higher Level (HL) (Two Credits).

(a) General requirements. Students shall be awarded two credits for successful completion of this course. This course may be used to meet only elective course requirements for state graduation.

(b) Content requirements. Content requirements for IB [International Baccalaureate (IB)] History of[ :] Europe HL are prescribed by the International Baccalaureate Organization. Subject guides may be obtained from International Baccalaureate of North America [in the International Baccalaureate publication History: Europe].

§113.65.International Baccalaureate (IB) Geography[,] Standard Level (SL) (Two Credits [One Credit]).

(a) General requirements. Students shall be awarded two credits [one credit] for successful completion of this course. This course may be used to meet required course requirements for state graduation.

(b) Content requirements. Content requirements for IB [International Baccalaureate (IB)] Geography SL are prescribed by the International Baccalaureate Organization. Subject guides may be obtained from International Baccalaureate of North America [in the International Baccalaureate publication Geography] and in §113.43 of this title (relating to World Geography Studies (One Credit), Beginning with School Year 2011-2012).

§113.66.International Baccalaureate (IB) Geography[,] Higher Level (HL) (Two Credits).

(a) General requirements. Students shall be awarded two credits for successful completion of this course. One credit may be used to meet the course requirement in World Geography Studies for state graduation; the other credit may be used to meet only elective course requirements for state graduation.

(b) Content requirements. Content requirements for IB [International Baccalaureate (IB)] Geography HL are prescribed by the International Baccalaureate Organization. Subject guides may be obtained from International Baccalaureate of North America [in the International Baccalaureate publication Geography] and in §113.43 of this title (relating to World Geography Studies (One Credit), Beginning with School Year 2011-2012).

§113.67.International Baccalaureate (IB) Psychology[,] Standard Level (SL) (Two Credits [One Credit]).

(a) General requirements. Students shall be awarded two credits [one credit] for successful completion of this course. This course may be used to meet only elective course requirements for state graduation.

(b) Content requirements. Content requirements for IB [International Baccalaureate (IB)] Psychology SL are prescribed by the International Baccalaureate Organization. Subject guides may be obtained from International Baccalaureate of North America [in the International Baccalaureate publication Psychology].

§113.68.International Baccalaureate (IB) Psychology[,] Higher Level (HL) (Two Credits).

(a) General requirements. Students shall be awarded two credits for successful completion of this course. This course may be used to meet only elective course requirements for state graduation.

(b) Content requirements. Content requirements for IB [International Baccalaureate (IB)] Psychology HL are prescribed by the International Baccalaureate Organization. Subject guides may be obtained from International Baccalaureate of North America [in the International Baccalaureate publication Psychology].

§113.71.International Baccalaureate (IB) Social and Cultural Anthropology Standard Level (SL) (Two Credits).

(a) General Requirements. Students shall be awarded two credits for successful completion of this course. This course may be used to meet only elective course requirements for state graduation.

(b) Content requirements. Content requirements for IB Social and Cultural Anthropology SL are prescribed by the International Baccalaureate Organization. Subject guides may be obtained from the International Baccalaureate of North America.

§113.72.International Baccalaureate (IB) Social and Cultural Anthropology Higher Level (HL) (Two Credits).

(a) General Requirements. Students shall be awarded two credits for successful completion of this course. This course may be used to meet only elective course requirements for state graduation.

(b) Content requirements. Content requirements for IB Social and Cultural Anthropology HL are prescribed by the International Baccalaureate Organization. Subject guides may be obtained from the International Baccalaureate of North America.

§113.73.International Baccalaureate (IB) World Religions Standard Level (SL) (Two Credits).

(a) General Requirements. Students shall be awarded two credits for successful completion of this course. This course may be used to meet only elective course requirements for state graduation.

(b) Content requirements. Content requirements for IB World Religions SL are prescribed by the International Baccalaureate Organization. Subject guides may be obtained from the International Baccalaureate of North America.

§113.74.International Baccalaureate (IB) Global Politics Standard Level (SL) (Two Credits).

(a) General Requirements. Students shall be awarded two credits for successful completion of this course. This course may be used to meet only elective course requirements for state graduation.

(b) Content requirements. Content requirements for IB Global Politics SL are prescribed by the International Baccalaureate Organization. Subject guides may be obtained from the International Baccalaureate of North America.

§113.75.International Baccalaureate (IB) Global Politics Higher Level (HL) (Two Credits).

(a) General Requirements. Students shall be awarded two credits for successful completion of this course. This course may be used to meet only elective course requirements for state graduation.

(b) Content requirements. Content requirements for IB Global Politics HL are prescribed by the International Baccalaureate Organization. Subject guides may be obtained from the International Baccalaureate of North America.

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 February 26, 2018.

TRD-201800803

Cristina De La Fuente-Valadez

Director, Rulemaking

Texas Education Agency

Earliest possible date of adoption: April 8, 2018

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


19 TAC §113.69

STATUTORY AUTHORITY. The repeal is proposed under the Texas Education Code (TEC), §7.102(c)(4), which requires the State Board of Education (SBOE) to establish curriculum and graduation requirements; §28.002, which identifies the subjects of the required curriculum and requires the SBOE by rule to 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 §28.025, which requires the SBOE by rule to 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 repeal implements the Texas Education Code, §§7.102(c)(4), 28.002, and 28.025.

§113.69.Other Courses for which Students May Receive Social Studies Credit.

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 February 26, 2018.

TRD-201800804

Cristina De La Fuente-Valadez

Director, Rulemaking

Texas Education Agency

Earliest possible date of adoption: April 8, 2018

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


CHAPTER 118. TEXAS ESSENTIAL KNOWLEDGE AND SKILLS FOR ECONOMICS WITH EMPHASIS ON THE FREE ENTERPRISE SYSTEM AND ITS BENEFITS

SUBCHAPTER B. OTHER ECONOMICS COURSES

19 TAC §118.15, §118.16

The State Board of Education (SBOE) proposes amendments to §118.15 and §118.16, concerning Texas Essential Knowledge and Skills (TEKS) for economics with emphasis on the free enterprise system and its benefits. The proposed amendments would align the rules with current course offerings by the International Baccalaureate (IB) Organization and update the amount of credit available for IB and Advanced Placement (AP) courses.

For students to earn state credit toward specific graduation requirements, a course must be approved by the SBOE and included in SBOE 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 November 2017 meeting, the SBOE was presented with proposed revisions to align the TEKS for English language arts and reading, mathematics, science, and languages other than English (LOTE) with current IB course offerings. At that meeting, the SBOE approved the proposed revisions to the English language arts and reading, mathematics, science, and LOTE IB courses for first reading and filing authorization. The SBOE's approval included the addition of eight IB courses to SBOE rules and proposed updates to the amount of credit available for 13 IB courses currently in rule. At the February 2, 2018 SBOE meeting, the SBOE approved revisions that would eliminate the range of credit in AP courses and add two additional IB courses, not currently in rule, to Chapter 112.

The proposed revisions would update the TEKS for economics to align rules with additional IB course offerings and update the amount of credit for IB economics courses to two credits each.

The SBOE approved the amendments in Chapter 118 for first reading and filing authorization at its February 2, 2018 meeting.

The proposed amendments would have no new procedural and reporting requirements. The proposed amendments would have no new locally maintained paperwork requirements.

FISCAL NOTE. Monica Martinez, associate commissioner for standards and support services, has determined that for the first five-year period the proposed amendments are in effect there will be no additional costs to state and local government as a result of enforcing or administering the proposed amendments.

There is no effect on local economy for the first five years that the proposed amendments are in effect; therefore, no local employment impact statement is required under Texas Government Code, §2001.022. The proposed amendments do not impose a cost on regulated persons and, therefore, are not subject to Texas Government Code, §2001.0045.

GOVERNMENT GROWTH IMPACT. TEA staff has determined that the proposed amendments do not have a government growth impact pursuant to Texas Government Code, §2001.0221.

PUBLIC BENEFIT/COST NOTE. Ms. Martinez has determined that for each year of the first five years the proposed amendments are in effect, the public benefit anticipated as a result of enforcing the new sections will be the availability of additional IB courses to allow students more flexibility in meeting state requirements for graduation and consistency in the amount of credit available for AP and IB courses. There is no anticipated economic cost to persons who are required to comply with the proposed amendments.

ECONOMIC IMPACT STATEMENT AND REGULATORY FLEXIBILITY ANALYSIS FOR SMALL BUSINESSES, MICROBUSINESSES, AND RURAL COMMUNITIES. There is no direct adverse economic impact for small businesses, microbusinesses, and rural communities; therefore, no regulatory flexibility analysis, specified in Texas Government Code, §2006.002, is required.

REQUEST FOR PUBLIC COMMENT. Comments on the proposal may be submitted to Cristina De La Fuente-Valadez, Rulemaking, Texas Education Agency, 1701 North Congress Avenue, Austin, Texas 78701. Comments may also be submitted electronically to rules@tea.texas.gov. A request for a public hearing on the proposed amendments 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.

STATUTORY AUTHORITY. The amendments are proposed under the Texas Education Code (TEC), §7.102(c)(4), which requires the State Board of Education (SBOE) to establish curriculum and graduation requirements; §28.002, which identifies the subjects of the required curriculum and requires the SBOE by rule to 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 §28.025, which requires the SBOE by rule to 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 the Texas Education Code, §§7.102(c)(4), 28.002, and 28.025.

§118.15.International Baccalaureate (IB) Economics Standard Level (SL) (Two Credits [One Credit]).

(a) General requirements. One-half credit may be used to meet the course requirement in Economics for state graduation and one and one-half credits [credit] may be used to meet only elective course requirements for state graduation.

(b) Content requirements. Content requirements for IB [International Baccalaureate (IB)] Economics SL are prescribed by the International Baccalaureate Organization. Subject guides may be obtained from International Baccalaureate of North America [in the International Baccalaureate publication Economics].

§118.16.International Baccalaureate (IB) Economics Higher Level (HL) (Two Credits).

(a) General requirements. One-half credit may be used to meet the course requirement in Economics for state graduation and one and one-half credits may be used to meet only elective course requirements for state graduation.

(b) Content requirements. Content requirements for IB [International Baccalaureate (IB)] Economics HL are prescribed by the International Baccalaureate Organization. Subject guides may be obtained from International Baccalaureate of North America [in the International Baccalaureate publication Economics].

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 February 26, 2018.

TRD-201800805

Cristina De La Fuente-Valadez

Director, Rulemaking

Texas Education Agency

Earliest possible date of adoption: April 8, 2018

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


CHAPTER 126. TEXAS ESSENTIAL KNOWLEDGE AND SKILLS FOR TECHNOLOGY APPLICATIONS

SUBCHAPTER D. OTHER TECHNOLOGY APPLICATIONS COURSES

19 TAC §§126.62 - 126.64, 126.66, 126.67

The State Board of Education (SBOE) proposes amendments to §§126.62 - 126.64 and new §126.66 and §126.67, concerning Texas Essential Knowledge and Skills (TEKS) for technology applications. The proposed amendments and new sections would align the rules with current course offerings by the International Baccalaureate (IB) Organization and update the amount of credit available for IB and Advanced Placement (AP) courses.

For students to earn state credit toward specific graduation requirements, a course must be approved by the SBOE and included in SBOE 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 November 2017 meeting, the SBOE was presented with proposed revisions to align the TEKS for English language arts and reading, mathematics, science, and languages other than English (LOTE) with current IB course offerings. At that meeting, the SBOE approved the proposed revisions to the English language arts and reading, mathematics, science, and LOTE IB courses for first reading and filing authorization. The SBOE's approval included the addition of eight IB courses to SBOE rules and proposed updates to the amount of credit available for 13 IB courses currently in rule. At the February 2, 2018 SBOE meeting, the SBOE updated to two credits each all IB courses and approved the revisions for second reading and final adoption.

Also at the February 2, 2018 meeting, the SBOE approved a proposal to update the TEKS for technology applications to align rules with additional IB course offerings, update to two credits each the amount of credit available for IB Computer Science courses, eliminate the range of credit for AP Computer Science A, and add two new two-credit technology applications courses, IB Information Technology in a Global Society Standard Level and IB Information Technology in a Global Society Higher Level.

The SBOE approved the revisions to Chapter 126 for first reading and filing authorization at its February 2, 2018 meeting.

The proposed revisions would have no new procedural and reporting requirements. The proposed revisions would have no new locally maintained paperwork requirements.

FISCAL NOTE. Monica Martinez, associate commissioner for standards and support services, has determined that for the first five-year period the proposed revisions are in effect there will be no additional costs to state and local government as a result of enforcing or administering the proposed revisions.

There is no effect on local economy for the first five years that the proposed revisions are in effect; therefore, no local employment impact statement is required under Texas Government Code, §2001.022. The proposed revisions do not impose a cost on regulated persons and, therefore, are not subject to Texas Government Code, §2001.0045.

GOVERNMENT GROWTH IMPACT. TEA staff has determined that the proposed revisions do not have a government growth impact pursuant to Texas Government Code, §2001.0221.

PUBLIC BENEFIT/COST NOTE. Ms. Martinez has determined that for each year of the first five years the proposed revisions are in effect, the public benefit anticipated as a result of enforcing the revisions will be the availability of additional IB courses to allow students more flexibility in meeting state requirements for graduation and consistency in the amount of credit available for AP and IB courses. There is no anticipated economic cost to persons who are required to comply with the proposed revisions.

ECONOMIC IMPACT STATEMENT AND REGULATORY FLEXIBILITY ANALYSIS FOR SMALL BUSINESSES, MICROBUSINESSES, AND RURAL COMMUNITIES. There is no direct adverse economic impact for small businesses, microbusinesses, and rural communities; therefore, no regulatory flexibility analysis, specified in Texas Government Code, §2006.002, is required.

REQUEST FOR PUBLIC COMMENT. Comments on the proposal may be submitted to Cristina De La Fuente-Valadez, Rulemaking, Texas Education Agency, 1701 North Congress Avenue, Austin, Texas 78701. Comments may also be submitted electronically to rules@tea.texas.gov. A request for a public hearing on the proposed revisions 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.

STATUTORY AUTHORITY. The amendments and new sections are proposed under the Texas Education Code (TEC), §7.102(c)(4), which requires the State Board of Education (SBOE) to establish curriculum and graduation requirements; §28.002, which identifies the subjects of the required curriculum and requires the SBOE by rule to 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 §28.025, which requires the SBOE by rule to 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 and new sections implement the Texas Education Code, §§7.102(c)(4), 28.002, and 28.025.

§126.62.Advanced Placement (AP) Computer Science A ([One to] Two Credits), Beginning with School Year 2012-2013.

(a) General requirements. Students shall be awarded [one to] two credits for successful completion of this course. Recommended prerequisites: Computer Science I, Algebra II, or a student should be comfortable with functions and the concepts found in the uses of functional notation such as f(x) = x + 2 and f(x) = g(h(x)).

(b) Content requirements. Content requirements for Advanced Placement (AP) Computer Science A are prescribed in the College Board Publication Advanced Placement Course Description: Computer Science A, published by The College Board.

§126.63.International Baccalaureate (IB) Computer Science[,] Standard Level ([One to] Two Credits), Beginning with School Year 2012-2013.

(a) General requirements. Students shall be awarded [one to] two credits for successful completion of this course. Recommended prerequisites: Computer Science I, Algebra II.

(b) Content requirements. Content requirements for IB [International Baccalaureate (IB)] Computer Science[,] Standard Level are prescribed by the International Baccalaureate Organization. Subject [Curriculum] guides may be obtained from International Baccalaureate of North America.

§126.64.International Baccalaureate (IB) Computer Science[,] Higher Level ([One to] Two Credits), Beginning with School Year 2012-2013.

(a) General requirements. Students shall be awarded [one to] two credits for successful completion of this course. Recommended prerequisites: Computer Science I, Algebra II.

(b) Content requirements. Content requirements for IB [International Baccalaureate (IB)] Computer Science[,] Higher Level are prescribed by the International Baccalaureate Organization. Subject [Curriculum] guides may be obtained from International Baccalaureate of North America.

§126.66.International Baccalaureate (IB) Information Technology in a Global Society Standard Level (Two Credits).

(a) General requirements. Students shall be awarded two credits for successful completion of this course. Recommended prerequisites: Computer Science I, Algebra II.

(b) Content requirements. Content requirements for IB Information Technology in a Global Society Standard Level are prescribed by the International Baccalaureate Organization. Subject guides may be obtained from International Baccalaureate of North America.

§126.67.International Baccalaureate (IB) Information Technology in a Global Society Higher Level (Two Credits).

(a) General requirements. Students shall be awarded two credits for successful completion of this course. Recommended prerequisites: Computer Science I, Algebra II.

(b) Content requirements. Content requirements for IB Information Technology in a Global Society Higher Level are prescribed by the International Baccalaureate Organization. Subject guides may be obtained from International Baccalaureate of North America.

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 February 26, 2018.

TRD-201800806

Cristina De La Fuente-Valadez

Director, Rulemaking

Texas Education Agency

Earliest possible date of adoption: April 8, 2018

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