Texas Administrative Code › Title 19 - EDUCATION › Part 2 - TEXAS EDUCATION AGENCY › Chapter 100 - CHARTERS › Subchapter AA - COMMISSIONER'S RULES CONCERNING OPEN-ENROLLMENT CHARTER SCHOOLS › Division 1 - GENERAL PROVISIONS › Section 100.1015 - Applicants for an Open-Enrollment Charter, Public Senior College or University Charter, or Public Junior College Charter

Current through Reg. 49, No. 28; July 12, 2024
(a) No applicant will be considered that has,
					 within the preceding ten years, had a charter under Texas law or similar
					 charter under the laws of another state surrendered under a settlement
					 agreement, revoked, denied renewal, or returned or that is considered to be a
					 corporate affiliate of, or substantially related to, an entity that, within the
					 preceding ten years, had a charter under Texas law or similar charter under the
					 laws of another state surrendered under a settlement agreement, revoked, denied
					 renewal, or returned. The commissioner of education may not grant more than one
					 charter for an open-enrollment charter school to any charter holder.
(b) Notwithstanding any other provisions in
					 this chapter, the following provisions apply to open-enrollment charter
					 applicants and successful charter awardees authorized by the commissioner under
					 requests for applications adopted after November 1, 2012.
(1) Financial standards. An applicant for an
					 open-enrollment charter, a public senior college or university charter, or a
					 public junior college charter shall meet each of the following financial
					 standards to demonstrate the financial viability of the charter, as determined
					 by the commissioner or the commissioner's designee, prior to being considered
					 for award of a charter and must understand that any failure to maintain ongoing
					 compliance with these requirements, if awarded a charter, will be considered a
					 material violation of the charter contract and may be grounds for revocation.
(A) Any existing entity applying for the
					 charter must be in good standing with the Internal Revenue Service (IRS), the
					 Texas Secretary of State, and the Texas Comptroller of Public Accounts. An
					 existing entity must also be in good standing with all regulatory agencies in
					 its home state.
(B) Each entity
					 must provide evidence of financial competency and sustainability by providing
					 evidence of an appropriate business plan that includes each of the following:
(i) a succinct long-term vision for the
					 proposed school;
(ii) three to five
					 core values or beliefs, with succinct explanations, for the operation of the
					 proposed school;
(iii) a brief
					 analysis of the target location(s) for the proposed school with a succinct
					 explanation of the reasons for choosing the location(s);
(iv) a brief analysis of the competition in
					 the area(s) for the same students and the methods that the proposed school will
					 use to recruit and retain students;
(v) a brief narrative of the growth plan for
					 the first five years of operation of the proposed school that matches all
					 projections included in the budget and considers the potential expansion of
					 competition in the area for the same student population;
(vi) a list of risk factors, with brief
					 explanations, that could jeopardize the viability of the proposed
					 school;
(vii) a list of success
					 factors, with brief explanations, that the proposed school founders have
					 analyzed and determined will outweigh the risks;
(viii) an unqualified opinion as provided in
					 the most recent audited financial statements of the applicant if the entity has
					 been in existence at least a year;
(ix) a five-year budget projection of revenue
					 and expenditures for the proposed charter using the template that will be
					 provided in the request for applications (RFA);
(x) a narrative response, based on the
					 revenue and expenditures provided in the template that will be provided in the
					 RFA, detailing the ways in which the budget projections were derived, including
					 any assumptions used; and
(xi)
					 support documentation for budget projections as detailed in the budget template
					 that will be provided with the RFA.
(C) Loans and lines of credit are liabilities
					 that must be repaid and will be considered as available funding. Loans or lines
					 of credit may be characterized as assets and as cash on hand. The applicant
					 must identify in the template provided in the RFA available funding for
					 start-up costs, as documented by current assets listed in the balance sheet
					 and/or pledges for donations that do not require repayment, meeting or
					 exceeding the following amounts:
(i) the total
					 amount of funds available;
(ii) the
					 amount per student proposed to be served in the first year of operation;
					 and
(iii) the number of days of
					 operation funded by the amount in this subparagraph, defined by the total
					 annual budget divided by the number of approved instructional days.
(D) To ensure financial viability,
					 the entity must commit to serving a minimum of 100 students at all
					 times.
(E) The entity applying for
					 the charter must have liabilities that are less than 80% of its
					 assets.
(F) The aggregate of
					 projected budgeted expenses must be less than the aggregate of projected total
					 revenues by the end of the first year of operation provided that:
(i) projected revenues are documented and use
					 the amount per student designated in the RFA when calculating Foundation School
					 Program (FSP) funding that will begin during the first year of operation, or
					 the applicant provides compelling evidence as to the reasons that its FSP will
					 be higher than the rate designated in the RFA; and
(ii) all reasonable start-up and first-year
					 expenditures are included in the budgets or an explanation for not needing to
					 include them is included in the budget narratives.
(G) No more than 27% of the budget may be
					 allocated for administrative costs for charters with an anticipated first-year
					 enrollment of 500 or fewer students, or no more than 16% of the budget may be
					 allocated for administrative costs for charters with an anticipated first-year
					 enrollment of more than 500 students. Administrative costs are those costs
					 identified as such in Texas Education Agency (TEA) financial publications for
					 charter schools.