§ 12.106 — STATE FUNDING.

Texas § 12.106

• Jurisdiction: Texas
• Code ED: Education Code

Text

Sec. 12.106. STATE FUNDING. (a) A charter holder is entitled to receive for the open-enrollment charter school funding under Chapter 48 equal to the amount of funding per student in weighted average daily attendance to which the charter holder would be entitled for the school under that chapter if the school were a school district without a tier one local share for purposes of Section 48.266 , excluding:
(1) the adjustment under Section 48.052 ;
(2) the funding under Sections 48.101 and 48.111 ; and
(3) enrichment funding under Section 48.202 (a).
(a-1) In determining funding for an open-enrollment charter school under Subsection (a), the amount of the allotment under Section 48.102 is based solely on the basic allotment to which the charter holder is entitled and does not include any amount based on the allotment under Section 48.101 .
(a-2) In addition to the funding provided by Subsection (a), a charter holder is entitled to receive for the open-enrollment charter school an allotment per student in average daily attendance in an amount equal to the difference between:
(1) the product of:
(A) the quotient of:
(i) the total amount of funding provided to eligible school districts under Section 48.101 (b) or (c); and
(ii) the total number of students in average daily attendance in school districts that receive an allotment under Section 48.101 (b) or (c); and
(B) the sum of one and the quotient of:
(i) the total number of students in average daily attendance in school districts that receive an allotment under Section 48.101 (b) or (c); and
(ii) the total number of students in average daily attendance in school districts statewide; and
(2) $300.
(a-3) In addition to the funding provided by Subsections (a) and (a-2), a charter holder is entitled to receive for the open-enrollment charter school enrichment funding under Section 48.202 based on the state average tax effort.
(a-4) In addition to the funding provided by Subsections (a), (a-2), and (a-3), a charter holder is entitled to receive funding for the open-enrollment charter school under Sections 48.110 and 48.112 and Subchapter D , Chapter 48 , if the charter holder would be entitled to the funding if the school were a school district.
(b) An open-enrollment charter school is entitled to funds that are available to school districts from the agency or the commissioner in the form of grants or other discretionary funding unless the statute authorizing the funding explicitly provides that open-enrollment charter schools are not entitled to the funding.
(c) The commissioner may adopt rules to provide and account for state funding of open-enrollment charter schools under this section. A rule adopted under this section may be similar to a provision of this code that is not similar to Section 12.104 (b) if the commissioner determines that the rule is related to financing of open-enrollment charter schools and is necessary or prudent to provide or account for state funds.
(d) Subject to Subsections (e) and (e-2), in addition to other amounts provided by this section, a charter holder is entitled to receive, for the open-enrollment charter school, an annual allotment per student in average daily attendance equal to the lesser of:
(1) the state average interest and sinking fund tax rate imposed by school districts for the current year multiplied by the guaranteed level of state and local funds per student per cent of tax effort under Section 46.032 (a); or
(2) the maximum amount of the basic allotment provided under Section 48.051 for the applicable school year multiplied by 0.06.
(e) Subject to Subsection (e-1), a charter holder is not entitled to receive funding under Subsection (d) for an open-enrollment charter school if the school has been assigned:
(1) an unacceptable performance rating under Subchapter C , Chapter 39 , for the two preceding school years;
(2) a financial accountability performance rating under Subchapter D , Chapter 39 , indicating a financial performance lower than satisfactory for the two preceding school years; or
(3) any combination of the ratings described by Subdivisions (1) and (2) for the two preceding school years.
(e-1) Subsection (e) does not apply to a charter holder:
(1) during the first two years of the applicable open-enrollment charter school's operation; or
(2) that operates a school program located at a day treatment facility, residential treatment facility, psychiatric hospital, or medical hospital.
(e-2) A charter holder is entitled to receive funding under Subsection (d) for an open-enrollment charter school only if the governing body of the school annually certifies in writing to the agency that none of the following derives any financial benefit from a real estate transaction with the school:
(1) an administrator, officer, or employee of the school;
(2) a member of the governing body of the school or its charter holder; or
(3) a person related within the third degree by consanguinity or second degree by affinity, as determined under Chapter 573 , Government Code, to a person described by Subdivision (1) or (2).
(f) Funds received by a charter holder under Subsection (d):
(1) notwithstanding any other law, may not be used to pay a salary, bonus, stipend, or any other form of compensation to a school superintendent or administrator serving as educational leader and chief executive officer of the school; and
(2) may only be used:
(A) to lease an instructional facility;
(B) to pay property taxes imposed on an instructional facility;
(C) to pay debt service on bonds issued for a purpose for which a school district is authorized to issue bonds under Section 45.001 (a)(1) or to pay for a purchase for which a school district is authorized to issue bonds under that section; or
(D) for any other purpose related to the purchase, lease, sale, acquisition, or maintenance of an instructional facility.
(f-1) The governing body of an open-enrollment charter school must comply with Chapter 551 , Government Code, when considering the issuance of bonds.
(g) In this section, "instructional facility" has the meaning assigned by Section 46.001 .
(h) Except as provided by Subsection (i), all remaining funds of a charter holder for an open-enrollment charter school that ceases to operate must be returned to the agency and deposited in the charter school liquidation fund.
(i) The agency may approve a transfer of a charter holder's remaining funds to another charter holder if the charter holder receiving the funds has not received notice of the expiration or revocation of the charter holder's charter for an open-enrollment charter school or notice of a reconstitution of the governing body of the charter holder under Section 12.1141 or 12.115 .
(j) The commissioner may adopt rules specifying:
(1) the time during which a former charter holder must return remaining funds under Subsection (h); and
(2) the qualifications required for a charter holder to receive a transfer of remaining funds under Subsection (i).

Legislative History

Added by Acts 1995, 74th Leg., ch. 260, Sec. 1, eff. May 30, 1995. Amended by Acts 2001, 77th Leg., ch. 1504, Sec. 7, eff. Sept. 1, 2001. Amended by: Acts 2009, 81st Leg., R.S., Ch. 1328 (H.B. 3646 ), Sec. 5, eff. September 1, 2009. Acts 2011, 82nd Leg., 1st C.S., Ch. 4 (S.B. 1 ), Sec. 57.02, eff. September 28, 2011. Acts 2011, 82nd Leg., 1st C.S., Ch. 4 (S.B. 1 ), Sec. 57.03, eff. September 1, 2017. Acts 2017, 85th Leg., 1st C.S., Ch. 8 (H.B. 21 ), Sec. 1, eff. September 1, 2018. Acts 2019, 86th Leg., R.S., Ch. 631 (S.B. 1454 ), Sec. 3, eff. June 10, 2019. Acts 2019, 86th Leg., R.S., Ch. 943 (H.B. 3 ), Sec. 1.002, eff. September 1, 2019. Acts 2021, 87th Leg., R.S., Ch. 806 (H.B. 1525 ), Sec. 3, eff. September 1, 2021. Acts 2025, 89th Leg., R.S., Ch. 1065 (H.B. 2 ), Sec. 7.02, eff. September 1, 2025.