(e) Implementation
schedule and transition. Notwithstanding this subsection, if the affected
management contract was executed prior to September 1, 2001, and the affected
promissory note or other debt instrument was also executed prior to September
1, 2001, then:
(1) both the management
contract and the indebtedness may continue in effect past September 1, 2001, if
each of the following conditions is met:
(A)
no state funds are used to pay any amounts due the management company under the
management contract, and all such amounts are paid from a clearly identified
source of non-state funds;
(B) no
state funds are used to pay any amounts due the management company under the
promissory note or other debt instrument, and all such amounts are paid from a
clearly identified source of non-state funds; and
(C) the terms of the management contract and
the promissory note or other debt instrument have not been renewed, modified,
or otherwise altered since September 1, 2001; or
(2) the indebtedness may be refinanced after
September 1, 2001, and the management contract may be renegotiated after
September 1, 2001, if each of the following conditions is met:
(A) on or before September 1, 2002, the
charter holder and the management company shall file with the TEA division
responsible for legal services the following:
(i) a copy of each and every contract,
promissory note, debt instrument, agreement or document executed, or in effect,
at any time on or after September 1, 2001, between or among: the charter holder
or any of its charter schools or management companies; the management company
or any of its subsidiaries, parents, affiliates, or related companies; and the
lender or any of its subsidiaries, parents, affiliates, or related companies;
and
(ii) additional documents as
requested by the TEA division responsible for legal services during its review
under this subsection;
(B) the documents filed under subparagraph
(A) of this paragraph shall establish that, upon approval by the TEA division
responsible for legal services, the management company will not be the lender
of any funds, but will merely act as the guarantor or co-signer on loans
totaling an amount equal to or less than the indebtedness owed by the charter
holder to the management company prior to September 1, 2001;
(C) the documents filed under subparagraph
(A) of this paragraph shall establish that the management company may not take
any action in its capacity as guarantor or co-signer to prevent, deter, or
discourage the charter holder from taking any action respecting the management
company under its contract for management services;
(D) the documents filed under subparagraph
(A) of this paragraph shall establish that the term of the contract for
management services between the management company and the charter holder may
not extend beyond the term of the current contract for charter between the
charter holder and the State Board of Education, and that the contract for
management services is renewable beyond the current term of the open-enrollment
charter only through negotiation and execution of a new contract for management
services;
(E) the documents filed
under subparagraph (A) of this paragraph shall establish that the management
company may not take any action in its capacity as guarantor or co-signer to
coerce, influence, or encourage the charter holder to negotiate or execute
another contract for management services under subparagraph (D) of this
paragraph; and
(F) the TEA division
responsible for legal services finds, in writing, that the documents filed
under subparagraph (A) of this paragraph meet the criteria specified in
paragraph (2) of this subsection, and finds that any compliance problems
concerning the governance and the financial or other management of the charter
holder do not prevent the approval of the arrangements reflected in the
documents.
