TX HB1878

Prohibits open-enrollment charter school holders from using state funding received under Section 12.106 to support schools located outside of Texas, with an exception for contracts providing goods or services directly to the Texas charter school

Imposes a financial penalty equal to three times the amount misspent if the commissioner determines a charter holder violated the prohibition, with the penalty withheld from the charter holder's state funding entitlement

Allows the commissioner to adjust a charter holder's funding entitlement in subsequent school years to recover any remaining amounts owed from the violation

Requires mandatory charter revocation if a charter holder spends at least $100,000 in violation of the new out-of-state funding restriction

Takes effect September 1, 2025