Current through Reg. 50, No. 13; March 28, 2025
(a) Related parties defined. A related party
is such a party as defined in §
100.1001 of this title (relating
to Definitions) or identified as at least one of the following:
(1) a founder or current or former board
member, administrator, or officer who meets the criteria in the following
subparagraphs. For purposes of this paragraph, a person is a former board
member, administrator, or officer if the person served in that capacity within
one year of the date on which a financial transaction between the charter
holder and a related party occurred:
(A) a
board member, administrator, or officer of an open-enrollment charter school;
or
(B) related within the third
degree of consanguinity or affinity, as determined under Texas Government Code,
Chapter 573, to a board member, administrator, or officer of an open-enrollment
charter school;
(2) a
charter holder's related organizations, joint ventures, and jointly governed
organizations, including a management company or any other charter schools or
network in another state operated by the same charter management company or
under the same charter school network brand-identity by license, other written
agreement or otherwise;
(3) an
open-enrollment charter school's board members, administrators, or officers or
a person related to a board member, administrator, or officer within the third
degree of consanguinity or affinity, as determined under Texas Government Code,
Chapter 573; or
(4) any other
disqualified person, as that term is defined by
26 United States Code,
§
4958(f), including:
(A) any person who was, at any time during
the 5-year period ending on the date of such transaction, in a position to
exercise substantial influence over the affairs of the organization, such as a
voting member of the governing body, a person who has ultimate responsibility
for implementing the decisions of the governing body or for supervising the
management, administration, or operation of the organization, or a person who
has ultimate responsibility for managing the finances of the
organization;
(B) a member of the
family of an individual described in subparagraph (A) of this paragraph;
or
(C) a 35% controlled
entity.
(b)
Related party property transactions. A charter holder shall notify the
commissioner of education that it intends to enter into a property transaction
with a related party as defined by subsection (a) of this section and §
100.1001 of this title.
(1) The charter holder shall provide such
notice to the commissioner through the Texas Education Agency division
responsible for charter schools no later than 10 days prior to the
transaction.
(2) If the amount of
the transaction exceeds $5,000, upon request and by a date specified by the
commissioner, the charter holder shall provide an appraisal from a certified
appraiser to TEA.
(c)
Related party transactions in audit. All related party transactions shall be
reported in the annual audit as required by §
100.1067(f) of
this title (related to Accounting for State and Federal Funds).
