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7/20/2018 6:02 PM

Velva L. Price
District Clerk
Travis County
Cause No. D-1-GN-17-004822 D-1-GN-17-004822
Terri Juarez

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IDEA PUBLIC SCHOOLS, § IN THE DISTRICT COURT OF

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Plaintiff, §

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§
v. §
§ TRAVIS COUNTY, TEXAS

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KEN PAXTON, IN HIS OFFICIAL §
CAPACITY AS ATTORNEY GENERAL §

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OF THE STATE OF TEXAS, §

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Defendant. § 126TH JUDICIAL DISTRICT

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PLAINTIFF IDEA PUBLIC SCHOOLS’
CROSS-MOTION FOR SUMMARY JUDGMENT

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TO THE HONORABLE JUDGE OF SAID COURT:

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Plaintiff IDEA Public Schools (“IDEA”), files this cross-motion for summary judgment,

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and in support thereof respectfully shows the Court the following:
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I. STATEMENT OF THE CASE
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On June 9, 2017, IDEA received a request for records from Gregg Wendorf of Advance
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Publishing Company under the Texas Public Information Act (the “PIA”), chapter 552 of the

Texas Government Code. IDEA subsequently requested a determination by the Office of the
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Attorney General (“Attorney General”) as to whether certain of the documents requested by


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Mr. Wendorf were subject to release under the PIA. On August 22, 2017, the Attorney General

issued Open Records Letter Ruling 2017-19181, which instructed IDEA to release documents to
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Mr. Wendorf. IDEA then brought this lawsuit to challenge the Attorney General’s determination,
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and will demonstrate that portions of the information sought by Mr. Wendorf are not subject to
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disclosure under the PIA as the documentation does not, in any way, pertain to the operation of a
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Texas open-enrollment charter school. Accordingly, the Court should grant this motion and order
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that documents related to the non-charter activities of IDEA are not subject to the PIA.
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II. GROUNDS

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Defendant misinterpreted the scope of a private entity’s duty to comply with the PIA. IDEA

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is a non-profit entity that operates open-enrollment charter schools throughout Texas. However,

other entities connected to IDEA do not involve or have any relation to the operation of a Texas

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open-enrollment charter school. Defendant erroneously determined that records related to those

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non-governmental entities are subject to the PIA, despite the controlling statute that expressly

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limits the applicability of the PIA to only the part of the entity that either operates an open-

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enrollment charter school, or is supported in whole or in part by public funds.

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III. EXHIBITS IN SUPPORT

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IDEA relies on the following exhibits in support of this cross-motion for summary
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judgment:
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1) Exhibit A, Open-Enrollment Charter Contract Renewal Petition


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2) Exhibit B, IDEA Public Schools, Inc. Consolidated Financial Report


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3) Exhibit C, Affidavit of Wyatt Truscheit, Chief Financial Officer


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4) Exhibit D, Public information request from requestor


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5) Exhibit E, Open Records Letter No. 2017-19181 (2017)


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6) In-Camera Exhibit 1, Information at issue (submitted for in-camera review),


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Bates stamped as IPS-00001 to IPS-00098 (98-page PDF file)

7) Appendix
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a. Appendix 1 - Texas Education Code § 12.1051


b. Appendix 2 - Act of June 17, 2001, 77th Leg., R.S., 2001 Tex. Sess.
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Law Serv. Ch. 1504 (H.B. 6)


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c. Appendix 3 - Greater Houston P’ship v. Paxton, 468 S.W.3d 51


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IV. INFORMATION AT ISSUE

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The information at issue in this suit will be submitted for in-camera inspection at the time

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of the summary judgment hearing, pursuant to section 552.3221 of the Government Code. The

information at issue will be offered in the form of a 98-page PDF document (In-Camera Exhibit 1),

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and will be presented to the Court on a DVD disc. The parties have agreed to identify the

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information at issue as In-Camera Exhibit 1.

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V. STATEMENT OF FACTS

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1. IDEA Public Schools, Inc. (“IDEA”) is a Texas non-profit corporation and

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501(c)(3) charitable organization under the Internal Revenue Code that has been granted a contract

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from the State of Texas to operate open-enrollment charter schools under the IDEA Public
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Schools’ name. IDEA currently operates 61 charter schools throughout the Rio Grande Valley,
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El Paso, and Central and South Texas. See Exhibit A, Exhibit C.


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2. As an open-enrollment charter school, IDEA is governed by and operates under the


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terms of Subchapter D, Chapter 12 of the Texas Education Code. See TEX. EDUC. CODE §§ 12.101
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et seq. (authorizing formation of open-enrollment charter schools).


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3. In October 2016, Articles of Formation were filed in regard to IPS Enterprises, Inc.
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(“IPS”). IDEA serves as the sole member of IPS. IPS-00002.


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4. IPS was established to provide management and support services to Louisiana

charter schools operating under a derivative of the name IDEA Public Schools of Louisiana.
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Exhibit C. IPS only provides services to Louisiana charter schools, and the corporation has never
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provided services to the Texas open-enrollment charter schools operated by IDEA Public Schools,
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Inc. Exhibit C.
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5. IPS was listed on the annual audit for IDEA (the “audit”). Exhibit B. The audit

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states:

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IDEA Public Schools, Inc. operated only a single charter school,
IDEA Public Schools, and conducted other non-charter activities for the
fiscal year ended June 30, 2017, with and through IPS Enterprises,

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LLC, which is a separate domestic single-member nonprofit limited
liability company, wholly owned and governed by its sole member,

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IDEA Public Schools, and appointed managers for IPS Enterprises, LLC.

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IPS Enterprises, LLC is a disregarded entity for federal tax purposes.

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IPS Enterprises LLP is consolidated since IDEA has a direct controlling
interest in IPS Enterprises LLP through ownership.

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6. IPS conducted various out-of-state activities according to the audit. IPS entered into

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three term notes for the acquisition of land in Baton Rouge, Louisiana. Exhibit B. The requested

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documents indicate that IPS provides support for Louisiana charter schools, and does not operate
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an open-enrollment charter school in Texas. IPS-00029.
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7. IPS does not receive any federal or state funding. Exhibit B, Exhibit C.
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8. IDEA Public Schools USA LLC (“IDEA USA”) is a Texas limited liability
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company that is a separate legal entity from IDEA and its open-enrollment charter schools operated
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under the IDEA name. Exhibit C. IDEA USA was established to be the governing corporate
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member of a separate corporation established to operate Louisiana charter schools under a


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derivative of the name IDEA Public Schools of Louisiana. IDEA USA only provides services to
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Louisiana charter schools, and the corporation has never provided services to the Texas open-

enrollment charter schools operated by IDEA. Exhibit C.


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9. The documents at issue in this matter state that IDEA USA controls the board of
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IDEA Public Schools Louisiana. IPS-00026. There is no evidence in the records that IDEA USA
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operates an open-enrollment charter school in Texas.


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10. IDEA USA does not receive any federal or state funding. Exhibit C.

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11. On June 9, 2017, IDEA received a public information request from

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Mr. Gregg Wendorf. The request sought:

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• Any and all documents related to the formation of IDEA Public Schools
USA LLC. These should include any and all memos and/or abstracts of
discussion made during the entity’s pre-formation period. These should also

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include all of the related documents filed with the Texas Secretary of State.

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Any and all documents related to the formation of IPS Enterprises LLC.

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These should include any and all memos and/or abstracts of discussion
made during the entity’s preformation period. These should also include all

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of the related documents filed with the Texas Secretary of State.
• Any and all emails that contain subject matter related to IDEA Public

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Schools USA LLC and IPS Enterprises LLC, their creation and the

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reasoning behind it. These should include any and all documents related to
the organizational or business purpose of both entities, including their

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proposed formal operational plans and budgets.

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Plaintiff sought a ruling from the Texas Attorney General’s Office, arguing that the
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records pertaining to the non-charter activities of IPS and IDEA USA were not subject to
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disclosure under the PIA.


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13. On August 22, 2017, Defendant issued Open Records Letter No. 2017-19181,
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stating that the records pertaining to IPS and IDEA USA related to the operation of an open-
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enrollment charter school, and were subject to disclosure.


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VI. SUMMARY JUDGMENT


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Summary judgment is required if the moving party, through affidavits, pleadings,


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discovery responses, and other records, shows that there is no genuine issue as to any material fact
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and that the moving party is entitled to judgment as a matter of law. TEX. R. CIV. P. 166a; see
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City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678 (Tex. 1979); Bachler v.
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Rosenthal, 798 S.W.2d 646, 648 (Tex. App.—Austin 1990, writ denied). A defendant seeking
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summary judgment must negate as a matter of law at least one element of each of the plaintiff’s
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theories of recovery, or plead and prove as a matter of law each element of an affirmative defense.

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Centeq Realty, Inc. v. Siegler, 899 S.W.2d 195, 197 (Tex. 1995). If the defendant establishes its

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right to summary judgment, the plaintiff must then raise a fact issue to avoid dismissal. Id.

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In deciding whether there is a disputed material fact issue, evidence favorable to the non-

movant will be taken as true. Every reasonable inference must be indulged in favor of the non-

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movant and any doubts resolved in its favor. Nixon v. Mr. Prop. Mgmt. Co., Inc., 690 S.W.2d 546,

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548–49 (Tex. 1985). When both parties have filed motions for summary judgment, “each party

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bears the burden of establishing that it is entitled to judgment as a matter of law.” City of Garland

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v. Dall. Morning News, 22 S.W.3d 351, 356 (Tex. 2000); City of Fort Worth v. Cornyn, 86 S.W.3d

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320, 322 (Tex. App.—Austin 2002, no pet.).

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The purpose of summary judgment is to dispose of a case when no genuine issues of fact
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exist, and only questions of law are involved, Totman v. Control Data Corp., 707 S.W.2d 739, 742
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(Tex. App.—Fort Worth 1986, no writ), and “to eliminate patently unmeritorious claims and
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defenses,” Jaso v. Travis County Juvenile Bd., 6 S.W.3d 324, 328 (Tex. App.—Austin 1999,
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no pet.) (following Swilley v. Hughes, 488 S.W.2d 64, 68 (Tex. 1972)).


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“Summary judgments must stand on their own merits, and the nonmovant’s failure to
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answer or respond cannot supply by default the summary judgment proof necessary to establish
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the movant’s right.” Clear Creek Basin Auth., 589 S.W.2d at 678. Rule 166a expressly requires
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that issues to defeat the motion must be set out in writing to the court. TEX. R. CIV. P. 166a(c).

While pleadings do not constitute summary judgment evidence, they may constitute judicial
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admissions and can be used against a party when appropriate. Trunkline LNG Co. v. Trane Thermal
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Co., 722 S.W.2d 722, 724 (Tex. App.— Houston [14th Dist.] 1986, writ ref’d n.r.e.). “A court
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cannot grant summary judgment on grounds that were not presented.” Johnson v. Brewer &
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Pritchard, P.C., 73 S.W.3d 193, 204 (Tex. 2002). “Granting a summary judgment on a claim not

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addressed in the summary judgment motion . . . is, as a general rule, reversible error.” G & H

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Towing Co. v. Magee, 347 S.W.3d 293, 297 (Tex. 2011) (citing Chessher v. Sw. Bell Tel. Co.,

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658 S.W.2d 563, 564 (Tex. 1983) (per curiam)).

Matters of statutory construction are generally legal issues. Dallas Morning News,

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22 S.W.3d at 357. Whether information is subject to the PIA and whether an exception to

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disclosure applies to the information are questions of law. Id.; Arlington Indep. Sch. Dist. v.

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Tex. Attorney Gen., 37 S.W.3d 152, 163 (Tex. App.—Austin 2001, no pet.). “The questions for

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each category of information . . . are: Is the information public under [the PIA]? If so, has the

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constitution, a statute, or a judicial decision expressly declared it confidential? These are questions

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of law.” A & T Consultants, Inc. v. Sharp, 904 S.W.2d 668, 674 (Tex. 1995).
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VII. THE PUBLIC INFORMATION ACT
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The PIA applies to governmental bodies. TEX. GOV’T CODE § 552.002. Many entities are
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clearly governmental bodies, such as state agencies, cities, school districts, and county offices.
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However, the PIA also extends to the “part, section, or portion of an organization, corporation,
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commission, committee, institution, or agency that spends or that is supported in whole or in part
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by public funds.” Id. § 552.003(1)(A)(xii) (emphasis added).


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The applicability of this portion of the PIA was the focus of a lawsuit that was ultimately
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decided by the Texas Supreme Court in 2015. That lawsuit was filed by the Greater Houston

Partnership (“GHP”), a private, non-profit corporation that promoted regional economic growth in
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the Houston area, that had contracted to provide consulting, event planning, and marketing services
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to the City of Houston pursuant to an “Agreement for Professional Services.” Greater Houston
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P’ship v. Paxton, 468 S.W.3d 51, 54 (Tex. 2015). Appendix 3. GHP received a public information
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request for records relating to its services to the City of Houston, and GHP argued to the Attorney

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General that it was not a governmental body subject to the PIA. The Attorney General disagreed,

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finding that GHP was a governmental body because it was supported by the City of Houston and

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performed services aimed at advancing the City’s interests. GHP then challenged this

determination in court.

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The Texas Supreme Court ultimately determined that the Attorney General’s interpretation

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and pronouncement of GHP as a governmental body was too broad. The court defined “supported

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in whole or in part by public funds” to include only those private entities or their sub-parts

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sustained, at least in part, by public funds, meaning they could not perform the same or similar

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services without the public funds. Id. at 63. The court reasoned that the construction of the term

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“supported” remains faithful to the TPIA’s liberal-construction clause. “We have consistently recognized
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this clause expresses an important statement of legislative purpose, and we continue to adhere to it today. .
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. . Still, even a liberal construction must remain grounded in the statute’s language and cannot overwhelm
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contextual indicators limiting public intrusion into the private affairs of nongovernmental entities.” Id. at
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62.
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VIII. ARGUMENT
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Open-enrollment charter schools (“charter schools”) are public schools in the State of
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Texas, subject to federal and state laws. See TEX. EDUC. CODE §§ 12.103(a), 11.002 (“school
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districts and charter schools have primary responsibility for implementing state’s system of public
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education”). Since 1995, open-enrollment charter schools have been a part of the Texas public-
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school system. Honors Acad., Inc. v. Texas Educ. Agency, No. 16-0519, 2018 WL 1975025, at *1
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(Tex. Apr. 27, 2018); LTTS Charter Sch., Inc. v. C2 Constr., Inc, 342 S.W.3d 73, 74 (Tex. 2011).
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Consistent with school districts, a charter school generally may not charge tuition to an eligible
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student, nor can it require a student to pay a fee that the board of trustees of a school district would

not be able to charge. See id. § 12.108. Charter schools are therefore similar to school districts in

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many respects, but are given more flexibility in regard to teacher certification, course offerings,

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and student discipline.

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School districts are generally created based on population and geographic boundaries.

Charter schools, on the other hand, are awarded through a contract for charter from the

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Commissioner of Education. Id. § 12.101(a). A charter may be granted to any eligible entity,

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including an institution of higher education, a private or independent institution of higher

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education, a governmental entity, or an organization that is exempt from taxation under

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Section 501(c)(3) of the Internal Revenue Code of 1986. Id. § 12.101(a)(1)-(4).

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Once an eligible entity receives a charter and begins to operate a charter school, it is subject

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to many state and federal requirements to the same extent as a school district. One of those
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requirements is PIA. Thus, as a non-profit and tax-exempt entity that was awarded a charter
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contract, IDEA is subject to the PIA, and routinely responds to public information requests from
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members of the public. See id. § 12.1051(a) (providing that open-enrollment charter schools are
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governmental bodies for purposes of the PIA, but only with “respect to the operation of an open-
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enrollment charter school”) (emphasis added). Appendix 1.


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IDEA engages in other activities aside from operating a charter school, which is a perfectly
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acceptable practice.1 The Texas Supreme Court has recognized that charter schools are “in some
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sense a nonpublic entity,” but that their charter activities are in turn “narrowly circumscribed by

statute.” LTTS at 80.


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See Neighborhood Centers Inc. v. Walker, 544 S.W.3d 744, 746 (Tex. 2018) (recognizing the wide range
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of activities in which a non-profit corporation that operates a charter school may engage, as the
Neighborhood Centers party was a private, nonprofit corporation that provided charitable services to low-
income communities in Houston, meals and programs for seniors, immigration services, free tax preparation
services, and a community credit union, in addition to operating a charter school).

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The issue in this case is not whether IDEA is subject to the PIA in regard to the operation

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of its numerous charter schools. The issue is instead whether the records pertaining to IDEA’s

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private, non-charter operations are subject to the PIA. IDEA’s position is that the Texas Legislature

and Commissioner of Education have expressly stated that this is not the case.

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1. The Only Records Subject to the PIA are Records Pertaining to the Operation of

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IDEA’s Charter Schools

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As previously stated, the PIA applies to the governing body of a charter holder and the

governing body of a charter school, but only “with respect to the operation of an open-enrollment

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charter school.” TEX. EDUC. CODE § 12.1051; see also id. § 12.1052(b) (noting that charter school

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records that “relate to an open-enrollment charter school are governmental records for all purposes

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under state law”). Thus, under the plain language of the law, if records belonging to a non-profit
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entity that has been awarded a charter contract do not pertain to the operation of the charter holder’s
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charter school, such records are not governmental records and are not subject to disclosure under
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the PIA.

During the 77th Legislative Session, the Texas Legislature made an important change to the
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statute applying public information laws to open-enrollment charter schools. Prior to that
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legislative session, the law was much more broad, stating:

The governing body of the school is considered a governmental body for purposes
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of Chapters 552 and 552, Government Code. Any requirement in those chapters
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relating to a school district, school board, or school children applies to an open-


enrollment charter school and to children attending an open-enrollment school.
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Subsequently, the Legislature split the statute into two subsections, and added an important
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provision limiting the scope of the law.


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(a) With respect to the operation of an open-enrollment charter school, the


governing body of a charter holding and the governing body of an open-
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enrollment charter school are considered to be governmental bodies for


purposes of Chapters 551 and 552, Government Code.

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(b) With respect to the operation of an open-enrollment charter school, any
requirement in Chapter 551 or 552, Government Code, that applies to a school

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district, the board of trustees of a school district, or public school students

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applies to an open-enrollment charter school, the governing body of a charter

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holder, the governing body of an open-enrollment charter school, or students
attending an open-enrollment charter school.

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TEX. EDUC. CODE § 12.1051(a), (b) (emphasis added). Act of June 17, 2001, 77th Leg. Sess. Law

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Serv. Ch. 1504 (H.B. 6). Appendix 2. This revision of the statute was a clear statement that the

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Legislature intended to restrict the applicability of the PIA only to situations involving the

operation of an open-enrollment charter school. By making the PIA applicable to charter schools

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only with respect to records pertaining to charter school operations, the Legislature specifically

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excluded non-charter activities from the PIA and the court should assume the Legislature acted

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with that specific intent. A revision of statute implies a reexamination and restatement of the law
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in a connected or improved form, with or without material changes, and it will be presumed the
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Legislature proceeded diligently with full knowledge of consequences of its act. Fort Worth & D.
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C. Ry. Co. v. Welch, (Civ. App. 1944) 183 S.W.2d 730, error refused.

The Texas Legislature has also gone so far as to provide guidance as to what type of
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activities would be considered within the scope of operating a charter school. For instance, the
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management and operation of a charter school includes: (A) planning, operating, supervising, and

evaluating the school’s educational programs, services, and facilities; (B) making
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recommendations to the governing body of the school relating to the selection of school personnel;
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(C) managing the school’s day-to-day operations; (D) preparing and submitting to the governing
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body of the school a proposed budget; (E) recommending policies to be adopted by the governing
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body of the school, developing appropriate procedures to implement policies adopted by the
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governing body of the school, and overseeing the implementation of adopted policies; and
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(F) providing leadership for the attainment of student performance. See TEX. EDUC. CODE

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§ 12.1012(5). The documents at issue in this case do not relate to any of these categories.

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The documents at issue here are related to the formation of two separate entities that

conduct out-of-state operations: IPS and IDEA USA. These documents do not pertain to the types

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of activities listed within Education Code section 12.1012(5). Neither of these entities operate an

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open-enrollment charter school in Texas.

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Specifically, IDEA USA is a separate legal entity from IDEA, established to be the

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governing corporate member of a corporation to operate Louisiana charter schools under a

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derivative of the name IDEA Public Schools of Louisiana. IDEA USA only provides services to

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Louisiana charter schools.2 Thus, records pertaining to the formation of IDEA USA do not relate
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to the operation of a Texas charter school, meaning those records are not considered to be public
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information subject to release under the PIA.


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Similarly, IPS is a separate legal entity from IDEA established to provide management and
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support services to Louisiana charter schools operating under a derivative of the name
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IDEA Public Schools of Louisiana. IPS only provides services to Louisiana charter schools. IPS
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has never provided services to IDEA’s Texas charter schools. Thus, records pertaining to the
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formation of IPS do not relate to the operation of a Texas charter school, meaning those records
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are not considered to be public information subject to release under the PIA.

Furthermore, the IDEA Public Schools, Inc., Consolidated Financial Report, dated June 30,
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2017 (the “Audit”), states:


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IDEA Public Schools, Inc. operated only a single charter school, IDEA Public
Schools, and conducted other non-charter activities for the fiscal year ended
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2
The documents provided to the Attorney General as part of the PIA ruling process clearly establish that
IDEA USA “controls board of IDEA Public Schools Louisiana,” and that IDEA USA is the controlling
organization for out-of-Texas charter school operations. See IPS-00026, IPS-00028. These records
conclusively demonstrate, on their face, that they are not documents relating to a Texas charter school.

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June 30, 2017, with and through IPS Enterprises, LLC, which is a separate
domestic single-member nonprofit limited liability company, wholly owned and

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governed by its sole member, IDEA Public Schools, and appointed managers for

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IPS Enterprises, LLC. IPS Enterprises, LLC is a disregarded entity for federal tax

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purposes. IPS Enterprises LLP is consolidated since IDEA has a direct controlling
interest in IPS Enterprises LLP through ownership.

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The activities of IPS are also described in the Audit, listing three term notes to finance the land

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acquisition and construction of a charter school in Baton Rouge, Louisiana. These activities are

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not related to the operation of a charter school authorized to conduct business in Texas. 3

Additionally, the only entities authorized to conduct activities pertaining to the operation

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of a Texas charter school are those entities recognized as a charter holder by the Commissioner of

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Education. IPS and IDEA USA have not been granted a charter by the Commissioner of Education,

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and have no authority to operate a Texas charter school. For those reasons, the records pertaining
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to IPS and IDEA Public Schools, USA are not subject to the Texas Public Information Act.
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Simply put, the Attorney General misapplied the law in its August 22, 2017 open records
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letter ruling. The Attorney General concluded that the documents at issue were maintained “in

connection with the transaction of [IDEA’s] official business as an open-enrollment charter


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school” and “part of the operation of IDEA.” This is an incorrect analysis. The Attorney General
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has confused the operations of IDEA, a non-profit entity, with regular charter school operations

conducted pursuant to IDEA’s charter and “narrowly circumscribed by statute.” LTTS at 80. The
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Attorney General’s analysis ignores the fact that IDEA, as a non-profit entity, conducts operations
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separate from those related to its Texas charter schools. The Attorney General’s interpretation is
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boundless, essentially conjoining all activities of a non-profit corporation with charter school
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activities, meaning that all records belonging to IDEA, no matter their purpose, are subject to the
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3
The separate nature of IPS and IDEA’s Texas charter school operations was also made clear in IDEA’s
submissions to the Attorney General as part of the PIA ruling process, and clearly showed the relationship
between IDEA and IPS, and IPS’s management responsibilities for non-Texas entities. See IPS-00029.

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TPIA. This analysis is not supported by Chapter 12 of the Education Code, nor Chapter 552 of the

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Government Code.

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The Attorney General’s decision as noted in the August 22, 2017 letter ruling also is not

subject to complete deference by this Court. IDEA recognizes that the Attorney General is charged

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with maintaining uniformity in application, operation, and interpretation of the PIA. See TEX.

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GOV’T CODE § 552.011. However, the Texas Supreme Court has demonstrated on several

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occasions that while the Attorney General’s interpretation of the PIA is entitled to due

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consideration, such deference must yield to unambiguous statutory language. See, e.g., Paxton v.

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City of Dallas, 509 S.W.3d 247, 265 (Tex. 2017) (rejecting the Attorney General’s analysis that

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attorney-client privilege is waived by missing statutory deadlines under the PIA); Boeing Co. v.
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Paxton, 466 S.W.3d 831, 838 (Tex. 2015) (rejecting the Attorney General’s interpretation that the
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PIA did not allow a private entity to raise statutory exceptions to disclosure for private
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information); City of Dallas v. Abbott, 304 S.W.3d 380, 384 (Tex. 2010) (determining the Attorney
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General’s interpretation of the PIA’s tolling provision was inconsistent with the PIA);
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Greater Houston P’ship, at 67 (rejecting the Attorney General’s determination that a private entity
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is subject to the PIA); In re City of Georgetown, 53 S.W.3d 328, 337 (Tex. 2001) (rejecting
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Attorney General’s determination that privileged report must be disclosed); Texas Comptroller of
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Pub. Accounts v. Attorney Gen. of Texas, 354 S.W.3d 336, 348 (Tex. 2010) (overturning

determination by Attorney General that dates of birth of public employees are not confidential
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information). Furthermore, the statutory provision charging the Attorney General with maintaining
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uniformity in application of the Act does not extend to the Texas Education Code. See TEX. GOV’T
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CODE § 552.011.
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2. The Texas Public Information Act Limits the Extent to Which a Private Entity is
Subject to the Law

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Section 12.1051 of the Texas Education Code can be considered a complement to the list

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of governmental bodies listed in Section 552.003(1)(A) of the PIA, which defines a governmental

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body for purposes of the PIA’s applicability. Section 552.003(1)(A) of the PIA states, among

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others, that entities such as a school district board of trustees, a county commissioners court, and

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a local workforce development board are all governmental bodies subject to the PIA.

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Section 552.003(1)(A) includes an additional provision that is particularly applicable in this

current matter: the list of governmental bodies subject to the PIA also includes “the part, section,

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or portion of an organization, corporation, commission, committee, institution, or agency that

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spends or that is supported in whole or in part by public funds.” See TEX. GOV’T CODE

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§ 552.003(1)(A)(xii). This section is very much a reflection of Section 12.1051 of the Texas
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Education Code which makes the PIA applicable to charter schools, but only with respect to
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records pertaining to the actual operation of a charter school. Thus, the PIA supports a finding that
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a private entity with no connection to the operation of a Texas charter school and that receives no

support from public funds is not subject to the PIA.


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IDEA’s charter school operations are “supported in whole or in part by public funds.” On
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the other hand, neither IPS nor IDEA USA receive government money, nor are they supported in

any manner by public funding. For this reason, records relating to IPS and IDEA USA are not
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subject to the PIA. See Greater Houston P’ship, 468 S.W.3d at 63 (“If GHP (as a private entity
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that receives government funds even while not being supported by them) presents the hard case,
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entities on the ends of the spectrum – those that receive no government money, and those that
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receive only government money – will obviously present much more straightforward questions.”)
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(emphasis added).
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Page 15
Entities subject to the PIA are either the government or its functional equivalent.

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Greater Houston P’ship, 468 S.W.3d at 59. The PIA provides the public with “complete

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information about the affairs of government and the official acts of public officials and

employees.” TEX. GOV’T CODE § 552.001(a). The Legislature carefully omitted any broad

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reference to private entities, instead including private entities insofar as they are “supported . . . by

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public funds.” Greater Houston P’ship, 468 S.W.3d at 60 (“In light of this omission, which we

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presumed the Legislature purposefully selected, the scope of the term ‘governmental body,’ as

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applied to private entities, must be filtered through the [PIA]’s purpose and function of allowing

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access to instrumentalities of government.”). The Legislature clearly did not intend for an entire

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non-profit entity to be subject to the PIA just because one discrete part of the entity is considered
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a “governmental body.” This limitation is clearly expressed in both Chapter 12 of the Education
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Code and Chapter 552 of the Government Code. “Transparency is a real concern, to be sure, and
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the [PIA]’s liberal-construction mandate reflects the depth of this interest. But liberal construction
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is not tantamount to boundless reach.” Greater Houston Partnership, 468 S.W.3d at 67; TDCJ v.
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Levin (520 S.W.3d 225).


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As stated above, the Attorney General’s interpretation of the PIA with respect to the records
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at issue in this case violates the Texas Supreme Court’s prohibition of boundless reach. The
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Attorney General’s interpretation of the PIA in the August 22, 2017 letter ruling effectively

subjects all of IDEA’s records to the PIA, regardless of whether they relate to charter school
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operations, and when Section 12.1051 of the Education Code and Section 552.003(1)(A)(xii) of
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the Government Code act as clear limitations on the reach of the PIA to private entities.
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The concept of a division between governmental and non-governmental activities is further


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illustrated by the Commissioner of Education Rules regarding the operation of a charter school.

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These rules further the Legislature’s intent of subjecting a charter school to the PIA, while keeping

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separate any private, non-charter activities. For instance, the rules note that a charter holder must

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keep separate and distinct accounting, auditing, budgeting, reporting, and recordkeeping systems

for the management and operation of the charter school. See 19 TEX. ADMIN. CODE § 100.1047(e).

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Any business activities of a charter holder not directly related to the management and operation of

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the charter school are to be kept in separate and distinct accounting, auditing, budgeting, reporting,

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and recordkeeping systems from those recording the business activities of the charter school.

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See id. § 100.1047(e)(1).

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Moreover, the Commissioner of Education may audit the records of a charter school,

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charter holder, or management company that has provided management services to a charter school
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or a charter holder. See id. § 100.1051(a). But, such an audit must be limited to matters directly
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related to the management or operation of a charter school, including the allocation of costs shared
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between the charter school and any non-charter business activity. See id. § 100.1051(b)(1).
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Additionally, a charter holder must invest state funds in accordance with Chapter 2256 of
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the Government Code, but must also maintain separate accounts for any investment accounts
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related to non-charter activities. See id. § 100.1045(b)(2).


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These rules make clear that an entity granted an open-enrollment charter is not prohibited
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from engaging in activities unrelated to charter school operations. But, if a charter holder does so,

it must keep these activities separate and apart from those activities related to school operations
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and involving public funds. The division is imperative because one part of the entity is a
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governmental body, and the remaining parts are completely private. The Attorney General’s
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August 22, 2017 determination completely ignores this distinction, and creates applicability of the
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PIA to records that simply are not public.

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3. IDEA is Entitled to Attorney’s Fees as a Party That Substantially Prevails

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The PIA provides that the court may assess costs of litigation and reasonable attorney’s

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fees incurred by a plaintiff or defendant who substantially prevails. TEX. GOV’T CODE

§ 552.323(b). The PIA’s “substantially prevails” requirement incorporates the concept of a

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“prevailing party,” and thus must be construed in line with the Texas Supreme Court's recent

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jurisprudence, derived from federal jurisprudence, addressing prevailing-party requirements for

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recovering attorney’s fees. See Dallas Morning News, Inc. v. City of Arlington, No. 03–10–00192–

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CV, 2011 WL 182886, at *2–4 (Tex. App.—Austin 2011, no pet.) (construing PIA

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section 552.323(a) in accordance with Intercontinental Group P’ship v. KB Home Lone Star L.P.,

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295 S.W.3d 650, 653–54 (Tex. 2009) and federal antecedents, principally Buckhannon Bd. & Care
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Home, Inc. v. West Va. Dep’t of Health & Human Res., 532 U.S. 598, 121 S.Ct. 1835, 149 L.Ed.2d
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855 (2001)); see also Gattis v. Duty, 349 S.W.3d 193, 201–02 (Tex. App.—Austin 2011, no pet.)
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(applying the same analysis when construing parallel “substantially prevail” language in
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attorney’s-fees provision of Texas Open Meetings Act). The Texas Supreme Court has held that a
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plaintiff does not “prevail” for purposes of qualifying for attorney’s fees unless it obtains
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(1) judicially sanctioned “relief on the merits” of its claim that (2) “materially alters the legal
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relationship between the parties.” Intercontinental, 295 S.W.3d at 653–54 (quoting


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Farrar v. Hobby, 506 U.S. 103, 111–12 (1992)); accord Dallas Morning News, Inc., 2011 WL

182886, at *3. This requires “an enforceable judgment against the defendant from whom fees are
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sought, or comparable relief through a consent decree or settlement.” Intercontinental, 295 S.W.3d
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at 654 (quoting Farrar, 506 U.S. at 111–12).


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In this instance, Defendant determined that records related to IDEA’s non-charter school
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activities were subject to the PIA. This incorrect determination not only affects the information at

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issue, but the entirety of IDEA’s non-charter school records. Were the Court to uphold the

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Attorney General’s determination, the legal status of all records pertaining to IDEA’s non-charter

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school activities and entities would be significantly impacted, and would expand the scope of the

PIA to include information that is not expressly made “public” under the law, therefore materially

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altering the legal relationship between the parties.

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Attorney’s fees are justifiable in this instance as Defendant’s August 22, 2017

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determination had no reasonably basis in law. As discussed above, Chapter 12 of the Education

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Code and Chapter 552 of the Government Code clearly restrict applicability of the PIA to

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government records. IDEA has also demonstrated that IPS and IDEA USA are non-charter school

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entities conducting out-of-state activities. The documents included with this motion establish that
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neither IPS nor IDEA USA were established to operate a Texas charter school, and they have not
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operated a Texas charter school at any time relevant to this proceeding. The Greater Houston
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Partnership case was a clear statement to the Attorney General’s Office , as the Attorney General
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acts as the “gatekeeper” in administering the PIA, determining what entities are subject to the PIA
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and what records are confidential or subject to disclosure. The Texas Supreme Court clearly
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advised the Attorney General that private entities should remain private, and private records should
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not be subject to public disclosure just because an entity does business with a governmental body.
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“Transparency, openness, and accountability in the government are all of fundamental importance.

However, these important policy objectives cannot extinguish the privacy rights properly
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belonging to private business entities in Texas. By liberally authorizing public access to


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government records while simultaneously shielding private business from unwarranted


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interference, the Legislature carefully balanced these conflicting interests.” Greater Houston
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P’ship at 53–54. Defendant’s August 22, 2017 determination rejects the directive handed down by

Page 19
the Texas Supreme Court, and makes public the records of a private entity despite clear statutory

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and court-issued guidance to the contrary. IDEA was obligated to bring this proceeding to defend

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its private records, and the court should award reasonable attorney’s fees as a result. See Exhibit F.

IV. CONCLUSION

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IDEA is a non-profit, private entity. However, it has a charter granted by the State of Texas

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to operate open-enrollment charter schools in Texas. Under Chapter 12 of the Texas Education

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Code and Chapter 552 of the Texas Government Code, IDEA does not object that it is subject to

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the PIA. However, IDEA conducts non-charter activities with other non-profit entities, which

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include IPS and IDEA USA. These entities are non-charter activities, as demonstrated by the

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records and supporting affidavit, nor do they receive state or federal funding. Thus, the records
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pertaining to the non-charter activities are not subject to the provisions of the PIA as they do not
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pertain to the operation of an open-enrollment charter school.


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Respectfully submitted,
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SCHULMAN, LOPEZ,
HOFFER & ADELSTEIN, LLP
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/s/ Joseph E. Hoffer


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Joseph E. Hoffer
State Bar No. 24049462
Email: jhoffer@slh-law.com
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Ricardo M. Lopez
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State Bar No. 24013059


Email: rlopez@slh-law.com
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Christopher H. Schulz
State Bar No. 24060576
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Email: cschulz@slh-law.com
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517 Soledad Street


San Antonio, Texas 78205
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Telephone: 210-538-5385
Facsimile: 210-538-5384
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ATTORNEYS FOR PLAINTIFF

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CERTIFICATE OF SERVICE

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This is to certify that on July 20, 2018, a true and correct copy of the foregoing has been

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served on counsel of record by e-mail:

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Ms. Rosalind L. Hunt, Assistant Attorney General, Administrative Law Division, Office
of the Attorney General of Texas, P. O. Box 12548, Capitol Station, Austin, Texas 78711-

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2548, Attorney for Defendant, Email: Rosalind.Hunt@oag.texas.gov

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/s/ Joseph E. Hoffer

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Attorney for Plaintiff

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Page 21
Exhibit A

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PLAINTIFF IDEA PUBLIC SCHOOLS’

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CROSS-MOTION FOR SUMMARY JUDGMENT

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ATTACHMENT A

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OPEN-ENROLLMENT CHARTER

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CONTRACT RENEWAL PETITION

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Current Information in Charter School Tracking System

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Charter Holder Name: IDEA ACADEMY, INC. ;

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Charter School Name: IDEA PUBLIC SCHOOLS

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Charter School County/District #: 108-807

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Generation: 04 tri
Maximum Approved Enrollment: 45,000
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Grades Approved: PK3,PK4,K,l,2,3,4,5,6,7,8,9,10,ll,12
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Campuses:
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108807001 108807002 108807003


IDEA COLLEGE PREP IDEA QUEST COLLEGE PREPARATORY IDEA FRONTIER COLLEGE
401 S1 S T ST 14001 NROOTHRD PREPARATORY
DONNA, TX 78537 EDINBURG.TX 78541 2800 S DAKOTA AVE
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BROWNSVILLE, TX 78521
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Grade Levels Currently Served: Grade Levels Currently Served: Grade Levels Currently Served:
6.7,8,9.10,11,12 6,7,8,9,10,11,12 6,7,8,9,10,11,12
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108807004 108807005 108807006


IDEA COLLEGE PREPARATORY IDEA COLLEGE PREPARATORY SAN IDEA COLLEGE PREPARATORY
py

MISSION BENITO SAN JUAN


1600 S SCHUERBACH RD 2151 RUSSELL LN 600 E SIOUX RD
MISSION, TX 78572 SAN BENITO, TX 78586 SAN JUAN, TX 78589
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Grade Levels Currently Served: Grade Levels Currently Served: Grade Levels Currently Served:
6,7,8,9,10,11,12 6,7,8,9,10,11,12 6,7,8.9,10,11,12..
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108807007 108807008 108807009


IDEA COLLEGE PREPARATORY IDEA COLLEGE PREPARATORY PHARR IDEA EDINBURG COLLEGE
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ALAMO 600ELASMILPASRD PREPARATORY


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325 E SH 495 PHARR, TX 78577 2553 N ROEGIERS RD


ALAMO, TX 78516 EDINBURG, TX 78541
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Grade Levels Currently Served:


Grade Levels Currently Served: Grade Levels Currently Served:
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6,7,8,9,10,11,12
6,7,8,9 6.7,8
ATTACHMENT A
108807010 108807011
108807012
IDEA COLLEGE PREP WESLACO IDEA MCALLEN COLLEGE
IDEA BROWNSVILLE COLLEGE
2931 E SUGAR CANE DR PREPARATORY
PREPARATORY
WESLACO, TX 78599 201 N BENTSEN RD
4395 PAREDES LINE RD

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MCALLEN, TX 78501
BROWNSVILLE, TX 78526

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Grade Levels Currently Served: Grade Levels Currently Served: Grade Levels Currently Served:

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loSSOTOU T08807020™ TosioToir
IDEA CARVER COLLEGE PREPARATORY IDEA SOUTH FLORES COLLEGE

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IDEA WESLACO PIKE COLLEGE
PREPARTORY 217 ROBINSON PL PREPARTORY
1000 E PIKE BLVD SAN ANTONIO, TX 78202 6919 S FLORES

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WESLACO, TX 78596 SAN ANTONIO, TX 78221

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Grade Levels Currently Served: Grade Levels Currently Served:
Grade Levels Currently Served:

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JLL
6
TossoTOzf 108807023
108807035
IDEA MONTERREY PARK IDEA WALZEM COLLEGE
IDEA ALLAN COLLEGE

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COLLEGE PREPARATORY PREPARATORY
PREPARATORY

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222 SW 39™ STREET 8750 FOURWINDS DRIVE
1701 VARGAS RAOD
SAN ANTONIO, TX 78237 WINDCREST, TX 78239
AUSTIN, TX 78741

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Grade Levels Currently Served: Grade Levels Currently Served: Grade Levels Currently Served:
6,7

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108807101 108807102 108807103
IDEA ACADEMY | IDEA QUEST ACADEMY IDEA FRONTIER ACADEMY
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401 S1 S T ST ' 1400! ROOTHRD 2800 S DAKOTA AVE
DONNA, TX 78537 EDINBURG,TX7854I BROWNSVILLE, TX 78521
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Grade Levels Currently Served: Grade Levels Currently Served:


Grade Levels Currently Served:
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K,1,2,3,4,5 K,1,2,3,4,5
K,l,2,3,4,5
108807104 108807105 308807106
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IDEA ACADEMY MISSION IDEA ACADEMY SAN BENITO


IDEA ACADEMY SAN JUAN
1600 S SCHUERBACH RD 21 51 RUSSELL LN
200 N NEBRASKA AVE
MISSION, TX 78572 SAN BENITO, TX 78586
SAN JUAN, TX 78589
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Grade Levels Currently Served: Grade Levels Currently Served: Grade Levels Currently Served:
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K, 1,2,3,4
108807107 108807108 108807109
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IDEA ACADEMY ALAMO IDEA ACADEMY PHARR


IDEA EDINBURG ACADEMY
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325 E SH 495 6 0 0 E L A S M I L P A S R D
2553 N ROEGIERS RD
ALAMO, TX 78516 PHARR, TX 78577
EDINBURG, TX 78541
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Grade Levels Currently Served: Grade Levels Currently Served:


Grade Levels Currently Served:
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K, 1,2,3 K, 1,2,3
K, 1,2,3,4
108807110 108807131
108807132
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IDEA ACADEMY WESLACO IDEA MCALLEN ACADEMY


IDEA BROWNSVILLE ACADEMY
2931 E SUGAR CANE DR 203 N BENTSEN RD
4395 PAREDES LINE RD
MCALLEN, TX 78501
BROWNSVILLE, TX 78526
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WESLACO, TX 78599
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Grade Levels Currently Served: Grade Levels Currently Served: Grade Levels Currently Served:
Jidi-LM— JLL-L!
108807113 10880772(F 108807121
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IDEA WESLACO PIKE ACADEMY IDEA CARVER ACADEMY


IDEA SOUTH FLORES ACADEMY
1000 E PIKE BLVD 217 ROBINSON PL
6919 S FLORES
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WESLACO, TX 78596 SAN ANTONIO, TX 78202


SAN ANTONIO, TX 78221

Grade Levels Currently Served; Grade Levels Currently Served:


Grade Levels Currently Served:
K,3,2,3,4,5
K,I,2
ATTACHMENT A
108807122 108807123 108807135
IDEA MONTERREY PARK IDEA WALZEM ACADEMY IDEA ALLAN ACADEMY
ACADEMY 8750 FOURWINDS DRIVE 220 FOREMOST DR
222 SW 39™ STREET WINDCREST, TX 78239 AUSTIN, TX 78745

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SAN ANTONIO, TX 78237

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Grade Levels Currently Served: Grade Levels Currently Served: Grade Levels Currently Served:

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1,2,3

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Geographical Boundary:
The original charter application and amendment history reflects that the following district(s) comprise the charter school's
geographic boundary:

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ALAMO HEIGHTS ISO HARLANDALE ISD LUL1NG ISD ROUND ROCK ISD
AUSTIN ISO HARLINGEN CISD MANOR ISD SAN ANTONIO ISD

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BASTROP ISO HAYS CISD MCALLEN ISD SAN BEN1TO CISD
BROWNSVILLE ISO HIDALGO ISD MCDADE ISD SAN1SIDRO1SD
COUPLAND fSD HUTTO ISD MERCEDES ISD SAN MARCOS CISD
DEL VALLE ISD MRRELL ISD MISSION CISD SANTA MARIA ISD

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DONNA ISD JIM HOGG COUNTY ISD MONTE ALTO ISD SANTA ROSA ISD

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DRIPPING SPRINGS ISD JUDSON ISD NORTH EAST ISD SHARYLAND ISD
EANES ISD LA FER1A !SD NORTHSIDE ISD SMITHV1LLE ISD

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EAST CENTRAL ISD LA JOYA ISD PFLUGERVILLE ISD SOMERSET ISD
EDCOUCH-ELSA1SD LA VILLA 1SD PHARR-SAN JUAN-ALAMO ISD SOUTH SAN ANTONIO ISD
EDGEWOOD ISD LACKLAND ISD POINT ISABEL ISD SOUTHSIDEISD

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EDINBURGCISD LAGO VISTA ISD PRAIRIE LEA ISD SOUTHWEST ISD
ELGIN ISD LAKE TRAVIS ISD PROGRESO ISD TAYLOR ISD
FLORENCE ISD LEANDER ISD RANDOLPH FIELD ISO THRALL ISD
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FT SAM HOUSTON ISD LIBERTY HILL ISD RIO GRANDE CITY CISD VALLEY VIEW ISD
GEORGETOWN ISD LOG KHART ISD RIO HONDO ISD WESLACO ISD
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GRANGER ISD LOS FRESNOS CISD ROMA ISD WIMBERLEY ISD
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OPEN-ENROLLMENT CHARTER

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RENEWAL APPLICATION

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FOR

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CONTRACT END DATE

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OF

JULY 31, 2015


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Table of Contents

Explanation of Renewal Process 4

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Application Instructions 5
Selected Definitions 6

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Application Sections:

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Section I. Coversheet (Attachment A) 7
This is a printout of current charter holder information from the TEA Division of Charter School

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Administration database, the CSTS, and must be attached as the application coversheet

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(Attachment A).

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Section II. Contact Information 8
Requires the charter holder to provide the current contact information for the superintendent, the
charter holder board chair, and the person who prepared the application.

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Section III. Website Postings .9
Requires the charter holder to provide the homepage web address where the names of the members

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of the governing body are listed; the web address where the superintendent's salary is posted; and
web address where the charter financial statements are continuously posted as required by Local
Government Code §140.006.
Section IV. Organizational Charts
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Requires the charter holder to provide the organizational chart of the charter school as well as a
chart showing other entities and programs managed by the charter holder. This section requires
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the submission of attachments 1 and 2.
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Section V. Admission Policy 11


Requires the charter holder to provide details concerning the charter school's admission policy and
practices. In addition, this section requires the submission of attachments 3,4, and 5.
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Section VI. Special Education Assurances , 14


Requires the charter holder to certify that it has policies and procedures in place that ensure
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implementation of all federal laws and regulations, Texas laws, State Board of Education rules, and
commissioner rules related to students with disabilities, and further assures that any future
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amendments to the regulations, laws, and rules will be incorporated and implemented. This section
must be signed by the charter holder board chair.
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Section VII. Serving Students at Residential Facilities Assurances.... 15


This section is required only when the charter educates students at a residential facility.
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Requires the charter holder to certify that it has policies and procedures in place that ensure
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implementation of all federal laws and regulations, Texas laws, State Board of Education rules,
and commissioner rules related to charter schools serving students at residential facilities and
further certifies that any future amendments to the laws, regulations, and rules will be
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incorporated and implemented. If required, this section must be signed by the charter holder
board chair.
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Section V11I. Bilingual/ESL, Section 504, and Dyslexia Assurances 17


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Requires the charter holder to certify that it has policies and procedures in place ensuring that it
complies with the legal and regulatory requirements concerning identifying and providing
appropriate education services to limited English proficient students, students protected by Section
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504 of the Rehabilitation Act of 1973, and students with dyslexia or related disorders. This section
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must be completed and signed by the charter holder board chair.

Page 2
Section IX. Fingerprinting and Criminal Record Check Assurance , 18
Requires the charter holder to certify that it is in compliance with TEC §12.120, and confirms that
no individual is serving in any capacity if he or she has been convicted of a misdemeanor involving
moral turpitude; a felony; an offense listed in TEC §37.007(a)\ or an offense listed in Article

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62.001(5) Code of Criminal Procedures', unless the individual is eligible to be employed in a

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position in a school district under TEC §12.120 (a-1).
Section X. Certificate of Acknowledgement 19

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Requires at least a majority of the governing body of the charter holder to certify that it has had
an opportunity to review the completed renewal application and has authorized, during an open

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meeting, submission of the application to the commissioner of education for consideration of the
renewal of the charter.

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Texas Education Agency Contact Information 20

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Renewal Process Flowchart ,.., 21

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Attachments Required of Applicant:

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Charter School Organizational Chart (Attachment 1)

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Charter Holder Organizational Chart (Attachment 2)tri
Admission Policy (Attachment 3)
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Admission Application (Attachment 4)
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Enrollment Form (Attachment 5)


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Pane 3
Explanation of Renewal Process

19 Texas Administrative Code (TAC) §100,1031 contains additional information about charter renewal.

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The renewal process is separate from the charter amendment process. Significant changes from the original charter should

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not be made in the renewal application unless a charter amendment has been previously approved.
As authorized in Texas Education Code (TEC) §12,1141, the commissioner's procedures for renewal must include three

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distinct processes: expedited renewal, discretionary renewal, and expiration.
Definitions of the three renewal processes:

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--•" ---•••• - -- ...--- — ->,

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Expedited (30 days)

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If in the preceding 3 years:

• Highest or second highest academic performance rating

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• Satisfactory or higher financial rating; and
• No campus has been assigned the lowest rating or no campus has been closed for low ratings

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Discretionary (90 days)

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Consideration among others of:

• Academic Performance 2009-2010, 2010-2011, 2012-2013, 2013-2014

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• Financial Ratings 2009-2010,2010-2011,2031-2032, 2012-2013, 2013-2014
• Performance Framework (TEC §12.1181}
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Expiration (30 day notification)

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If for any 3 of the 5 preceding school years:

• Lowest academic performance rating


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• Lower than satisfactory financial rating


• The charter was assigned any combination of ratings, or
• A campus has been assigned the lowest performance rating for the 3 preceding school years and has not been closed
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V _ ..­
The due date for charters to submit the completed renewal application to the Texas Education Agency (TEA) is
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Wednesday. January 7.2015.


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You may request an informal review of the findings and actions described in this letter by sending a written request to:
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Brandon Spenrath, Program Specialist

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Charter School Administration

Texas Education Agency

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1701 North Congress Ave.

Austin, Texas 78701

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Fax (512) 936-9281

brandon.spenrath@tga.state.tx.us

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The request must be received no later than Wednesday. December 17. 2014. Your request must identify what changes
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you are requesting, the reasons for your request, and documentation to support your request. If we do not receive your
request before the deadline, final action will be taken without further review.
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Please see 19 TAC Chapter 157, subchapter EE, Division 1 for addition information about the informal review process.

Page 4
Application Instructions

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The renewal application contains ten sections to be completed electronically, printed into hardcopy form for required
signatures and dates, and submitted on or before the due date to the Division of Charter School Administration.

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1. Deadline: The completed application must be returned by mail to the Division of Charter School Administration by
Wednesday, January 7,2Q15,

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2. Typing Requirement: All of the responses to the application sections, with the exception of signatures and dates
of signatures, must be typed.

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3. Printing Requirement: The application must be printed on one-sided 8 1/2" x H" white paper.

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4. Signature Requirement: Where signatures and dates of signatures are required, they must be in blue ink.

5. Submission of Original Document and One Copy: The completed and unbound (rubber bands or clips are

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acceptable) original renewal application, including fillable forms and attachments, and one additional copy must

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be submitted as follows:

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Texas Education Agency
Division of Charter School Administration

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1701 North Congress Avenue
Austin, Texas 78701
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Page 5
Selected Definitions

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Please review TEC §12.1012 and 19 TAG §100.1001 for definitions of terms which are available at the education laws and
rules page. Listed below are selected terms and definitions:

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• Charter holder ­ the entity to which a charter is granted under TEC, Chapter 12

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Charter school - a Texas public school operated by a charter holder under an open-enrollment charter
granted by the commissioner n pursuant to TEC, §12.101

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" Governing body of a charter holder - the board of directors, board of trustees, or other governing body of a

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charter holder

Governing body of a charter school - the board of directors, board of trustees, or other governing body of an

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open-enrollment charter school; the term includes the governing body of a charter holder if that body acts as the

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governing body of the open-enrollment charter school

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• Management company - a person or entity, other than a charter holder, that provides management services for an
open-enrollment charter school


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Officer of a charter school - the principal, director, or other chief operating officer of an open-enrollment charter
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school; an assistant principal or assistant director of an open-enrollment charter school; or a person charged with
managing the finances of an open-enrollment charter school
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Board chair or chairperson - generally the board president or presiding officer of the governing board
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Page 6
Section I.

Coversheet

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ATTACHMENT A: OPEN-ENROLLMENT CHARTER CONTRACT RENEWAL

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The enclosed document entitled OPEN-ENROLLMENT CHARTER CONTRACT RENEWAL will serve as the

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coversheet when the application is completed and submitted and includes current information in the Charter School
Tracking System. Verify the accuracy of the information on the coversheet and, if updates to the information are needed,

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create a separate sheet detailing your corrections and label the sheet "Update to Data Provided by TEA", and include it in
the renewal packet immediately followingthe preprinted coversheet.

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Page?
Section II.

Contact Information

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The persons listed below will be contacted by agency staff if there are issues to be resolved in any of the renewal application
sections. Note that any contact information, including email addresses, provided with the renewal application will be public

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information.

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Superintendent Contact Information:

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Superintendent's Name: JoAnn Gama

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Telephone Number:

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956-377-8000

Fax Number: 956-447-3796

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E-rnail Address: joann.gama@ideapublicschools.org

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Charter Holder Board Chair Contact Information:

Board Chair's Name: Mike Rhodes


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Telephone Number: 830-708-4255
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Fax Number:
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E-mail Address:
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Application Preparer's Contact Information: D Same as Superintendent D Same as Board Chair


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Contact Name: Leanne Hernandez


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Telephone Number: 956-975-0352


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Fax Number: 956-447-3796

E-mail Address: leanne.hernandez@ideapublicschools.org


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Charter School Website:


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Web address: http://www.ideapublicschools.org


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PageS
Section III.

Website Postings

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In accordance with the requirements of TEC §12.1211, an open-enrollment charter school shall list the names of the

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members of the governing body on the home page of the school's internet website. Provide the internet URL address
where the names of the members of the governing body are listed.

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http://www.ideapublicschoois.org/domain/41

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In accordance with the requirements of TEC §12.136, an open-enrollment charter school shall post the salary of the
school's superintendent or CEO on the school's internet website. Provide the internet URL address where the

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superintendent's salary is posted.
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Finance and Budget Page - http://www.ideapubIicschools.org/domain/35
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In accordance with Local Government Code §140.006, an open-enrollment charter school shall post continuously on the
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school's internet website the annual flnancials of the school. Provide the internet URL address where the annual financial
statements of the charter school are continuously posted.
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Finance and Budget Page- http://www.ideapublic5chools.org/domain/35


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Pace 9
Section IV.

Organizational Charts

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Submit, as Attachment 1, the organizational chart for the charter school that specifies the administrative positions

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including the title and name of the individual currently in each position.

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Submit, as Attachment 2, a chart that identifies all other entities under the direction of the charter holder. This would
include entities and/or programs that the charter holder governs/manages in addition to the charter school.

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Section V.

Admission Policy

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Please be aware that any change to the terms of an open-enrollment charter that relates to the following subjects:

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• grade levels,
• maximum enrollment,

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• geographic boundaries,
• approved campus(es),
• approved sites,

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• relocation of campus,
• charter holder name,

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• charter school (district) name,
• charter campus name,

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• charter holder governance,
• articles of incorporation,
• corporate bylaws,

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• management company,

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•admission policy, or
• the educational program of the school

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requires the commissioner of education's approval of an amendment. (See$100JQ33(b) Types of amendments,
19 TAC Chapter] 00.)

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A. Specify the period during which applications for admission are accepted. TEC, §12.117, requires that a charter
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school establish a reasonable application deadline for the submission of applications for admission.
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Beginning of Period (Month/Day) End of Period (Month/Day)


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September 1 April!0
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B, If the school admits students by lottery when the number of admissions applications received exceeds the number of
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available spaces, describe the procedures followed in conducting the lottery.


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For the upcoming school year, the lottery will be held on April 11. During the lottery, names will be drawn at random, by
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grade, with spots offered in the order of names drawn. When the capacity for each grade levelis reached, the remaining
applications are assigned a position on our waiting list in randomized order (only applications completed before the
deadline participate in the lottery). The lottery is open to the public and is overseen by IDEA Public Schools officials.
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C. If the school utilizes a lottery when oversubscribed, are any categories of applicants exempted from the lottery?
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O Yes
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©No
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O Not applicable (because lotteries are not utilized)


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If "Yes" was indicated inC above, state the categories of applicants that are exempted.
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N/A

Page \ \
Section V. (Continued)

Admission Policy

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D. If the school utilizes a lottery when oversubscribed, specify the approximate date on which a lottery will be

conducted.

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Approximate Date of Lottery (Month/Day)

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April 11

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E, If the school does not utilize a lottery when oversubscribed, but rather fills the available positions in the order in which

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applications were received before the expiration of the application deadline (i.e., a "first-come, first-served" admission
process), describe the manner in which the school notifies the community of the opportunity to apply for admission.
TEC, §12.117, requires a charter school that uses a first-come, first-served admission process when oversubscribed

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to publish a notice in a newspaper of general circulation not later than the seventh day before the application deadline.

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N/A

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F. If the school has a separate process for re-enrollment, state the process and the timeline to be used.
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Returning students will automatically be re-enrolled provided they notify the school of their intent to return by March 1st of
each school year.
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G. State the procedures for processing applications received once the application deadline has passed.
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The deadline to submit an application for the upcoming school year is April 1 Oth. Any application submitted after the
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deadline will be placed on the wait list until August 31 of the school year. Students who are not selected by August 31 will
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need to re-apply September 1 through April 10 for the next school year.
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-I. Describe the information that an applicant must provide in order to be considered for admission. Applicants may not he
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required to provide copies of transcripts or other academic records until after they are offered admission and are
enrolling. Furthermore, a student may not be precluded from enrolling due to the charier school's failure to receive
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information requiredfor enrollment from the student's parent or guardian or previous school. See TEC, §25.002.
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The application will ask for the student's name, contact information, birthday, as well as parent/guardian information. The
process is simple and straightforward and designed to take no more than 10 minutes to complete. Families can apply at
www.ideapublicschools.org/apply, via phone, or in person at an IDEA campus.

__­
Section V. (Continued)

Admission Policy

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The charter holder certifies that the non-discrimination statement required by TEC, §12.111 (a)(5) is printed in the
school's admission policy. TEC, §12.111 (a)(5) requires that a charter school's admission policy include a statement

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that the school will not discriminate in admissions based on gender, national origin, ethnicity, religion, disability,
academic, artistic, or athletic ability, or the district the child would othenvise attend.

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J. Does the admission policy either require or permit the school to exclude from admission all students with documented
histories of a criminal offense, ajuvenile court adjudication, or discipline problems under TEC Chapter 37, Subchapter
A as authorized by TEC, § 12.111 (a)(5)(B)l

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© Yes (The school excludes such students or reserves the right to exclude such students from admissions.)

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O No (The school does not deny admission to such students based on their documented histories of misconduct.)

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Submit
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• A current copy of the admission policy that incorporates the information provided in the above answers to questions
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A through H and any other relevant information (Attachment 3);


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• A blank copy of the current admission application, i.e., the information requested when the student first seeks
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admission (Attachment 4); and


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• A blank copy of the current enrollment form(s), i.e., the information required once an applicant has been offered
admission and is registering for enrollment (Attachment 5)
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Page 13
IDEA Public Schools

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K-12 Admissions Policy

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Students are admitted by lottery. Returning students and their siblings are given priority in

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admission. Returning students will automatically be re-enrolled provided they notify the school of
their intent to return by March 1st of each school year.

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Our application period is September 1st through April 10th. As of March 1s', all Inter-District

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Transfers & siblings of current students will be added to student rosters for next year, provided

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sufficient space is available. If there are enough slots for all remaining students, then all will be
admitted. In the event that there are more applicants than slots available, all remaining applicants

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will be drawn by lottery to be conducted on the second Saturday of April. If the second Saturday of
April is a holiday weekend, then the lottery will take place the following Saturday. If a new applicant

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is selected in the lottery and they have siblings, their sibling(s) also gets preference for the grade they

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are applying for.

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Parents will be notified of acceptance or placement of waitlist, in writing, one week after the lottery.
If parents have not received word by said date, it is the parent's responsibility to contact the school.

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After all remaining slots are filled, students will be placed on the waiting list in the order the name is
selected.
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If there are additional students who apply after April 10*, they will be added to the waiting list in the
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order that their application was received. Students on the waiting list will be admitted as spots
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become available in the school year for which they applied. Students not selected will need to re­
apply for the subsequent school year.
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It is the policy of IDEA Public Schools to comply with all non-discrimination provisions of all
federal and state laws. IDEA Public Schools admits students without regard to race, ethnicity,
religion, color, sex, national origin, disability, athletic, artistic, academic ability, limited English
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proficiency, or the district the child would otherwise attend.


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In addition, under TEC §12.1 ll(a) (6), IDEA Public Schools is authorized to exclude a student with
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a documented history of a criminal offense, a juvenile court adjudication, or discipline problems


under TEC Chapter 37, Subchaptcr A.
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C1
IDEA STUDENT APPLICATION 2015-16

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Public S c h o o l s

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Select your campus preferences. You can only select campuses where the grade you are applying
for will be available next school year. Please ONLY select the campuses you are willing to drive to

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and from in case of an emergency.
RGV

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Lower Valley D Frontier D Brownsville D SanBeniio Q Riverview

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Mid Valley D Weslaco D Weslaco Pike Q Donna Q Alamo San Juan D Pharr

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Upper Valley D McAllen D Quest D Mission D Edinburg
CENTRAL TEXAS

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San Antonio D Carver D South Flores O Monterrey Park D Walzem D Eastside
Austin D Allan D Rundberg

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Rrst Name Middle Name Last Name
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I Date of Birth Age on 9/01/2015 Current Grade Level Main Phone Number
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I Does your child currently attend: D Private School D Public School D None
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Physical Address Suite, Apt #


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City State Zip Code


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D Mailing Address same as Physical


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Mailing Address
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p At least one of the parent/guardian names is required.


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I D Father D Mother Q Legal Guardian (must provide olficiat court documents 1or custodial rights)
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First Name Middle Name Last Name


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Mobile Number Email Address

Employed by Work Number


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STUDENT #3 INFORMATION

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First Name Middle Name Last Name

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DOB Current Grade

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Do you have other children currently attending IDEA? D Yes D No

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Name Gradetri Campus

Child of iDEA employee? D Yes D No


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How did you FIRST hear about IDEA?


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Whose IDEA was it to apply... D Parent Only D Student Only D Both Parent & Student
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What had a positive influence on your decision to apply? <list all influences/media/people>
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Applicant's Statement I understand each and every question and instruction on this form, as well as my answer to each question.
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I certify, under penalty of perjury under the laws of the United States of America, that the information provided with this application is all
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true and correct. I certify also that I have not withheld any information that would affect the outcome of this application. I authorize the
release of any information from my records that IDEA Public Schools needs to determine eligibility for the benefit I am seeking.
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Transfer Statement I understand that, should my child be selected to attend a specific IDEA campus, they must attend said campus
for one full year prior to requesting a transfer to another IDEA campus.
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n I do verify and authorize this information.

Signature
IDEA APLICACION DEL ESTUDIANTE 2015-16

Public S c h o o l s

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Seleccione la escuela de su preferencia. Solo puede seleccionar escuelas que tengan disponibles
el grado para el cual esta aplicando para el proximo ano escolar. Por favor seleccione solo la

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escuela a la cual esta usted dispuesto a manejar en caso de alguna emergencia.
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Valle bajo D Frontier Q Brownsville D San Benito D Riven/Jew

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Valle medio D Weslaco n Weslaco Pike D Donna D Alamo D San Juan D Pharr

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Valle alto D McAllen D Quest D Mission D Edlnburg
CENTRODE TEXAS

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n South Flores D Monterrey Park Q Waizem D Eastside

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San Antonio D Carver
Austin D Allan D Rundberg

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Primer Normbre Segundo Nombre Apellido
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Fecha de nacimiento Edad en 09/01 /2015 Grado Escolar Actual Numero de Teteforto
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Su hijo asiste a una escuela: DPrivada D Publica D Ninguna


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Direcci6n suite/ft de departamento


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Cludad Estado Ctidigo Postal


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D Misma direccltin fislca y de correo


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Direccion de correo
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Se requiere al rnenos el nombre de uno de los padres/tutor.


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n Padre O Madre n Tutor (debe proporcionar documentos oficiales de la corte para demostrar custodial
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Primer Nombre Segundo Nombre Apeliido


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Numero de Celuiar Direccion de Correo Eiectrbnico

impieado en Telefono del trabajo


Primer Nombre Segundo Nombre Apellido

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Fecha de nacimiento GradoEscolarActual

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Primer Nombre Segundo Nombre Apellido

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iTiene hijos que estan actualmente estudiando en IDEA? D Si D No

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Nombre complete Grado
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iHijodeempleadodelDEA? D Si D No
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iComo supo de IDEA?.


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quien fue la idea de aplicar a IDEA? D Padre D Estudiante D Padres y Estudiante


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iTuvo alguna influencia positiva que lo motivo a aplicar? <Enllste todas la influencias/ gente/medios de comunicacion>
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Declaration del aspirante: Entiendo cada una de las preguntas e instrucciones en esta forma, asf como mis respuestas a cada
pregunta. Certifico bajo juramento de la leyes de los Estados Unidos de America, que la information proporcionada en esta aplicacion
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es verdadera y correcta. Certifico ademas que no retuve ninguna information que pueda afectar el resultado de esta aplicacion, Autorizo
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que IDEA Public Schools comparta mi information si es necesario para determiner elegibilidad para los beneficios que estoy buscando.
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Declaration de Transferencia: Entiendo que, si mi hijo(a) es seleccionado para asistir a una escuela de IDEA, debe de asistir a esa
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escuela por un ano escolar completo antes de que pueda solicitar un cambio a alguna otra escuela de IDEA.
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D Verifico y Autorizo

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Student Registration Form
Hoja de Inscription para Alumnos
ODEA
b Public Schools

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Please complete the following information about your student.

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Favor de llenar la siguiente informacion sobre su estudiante.

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Gqieial Information ; ^ -^_!;V_Wv K'--'^-- '-,-'-. '.^.'' '-. "•--'_ -':--'-\~- '^Vr^K. .-.-"-J^v^'K:-^"--^:;/ -'-. - -" -''-'-- '---'' ^ -T :
" -""" -~: '::--'/-:" ~\- ~'l-'f-V:V "-;. v:- =
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Studeni'eNainc:

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(Nombrcdc Estudkntc:}

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Mailing Address:
(Dirt'ccion iJc COCTCD;)

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Current Grade Level:
(Grado iLSCular Actual:)
1'bysical Address;
(Dirccciun dc Domicilio;)

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Home 1'lninc:
(T'clcfono dc Casa:)

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Parcnf/Guaraian Ihlbcmaoon E "-.-."= " " = - - : , ,"".---:-":-" ~_. : --^ v.-::> :.^- -A.v" - " -"-- 1 ". "- - ;". "-"-"."-!!" -.---": " v- " .- :
:-.'".-- : -•-"-" V. -;-"/"
Mother:

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(Madrc:)
Mother's Employer
(IjJUOrdc trabaji) dt h madrc:)

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Milliter's Phone Number:
(TeldTino dt la mad re:) tri
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O'adte-.)
Father's Employer:
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(Lugar dc irabaio del padre:)
Father's Phone Number
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(Tekfonw del padre:)


Guardian:
(Tutor)
Gundian'a F-mp!oycr
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(Lu^ar de trabajo dd rulor)


Guardian's Phone Number
(Tdcfonodc) tutor)
Name and Phone of first emergency
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:ontact:
(N ombre v Telcfono del primer
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:omacii> de cmi:r(;tncia.)
Rchtionship to student:
(Rcbcion j csrudtantc:)
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Mame and Photic of Second


Emctj-cncy Contact1,
(Nombrc y Tclcfonn del scgundo
cnnlino dc emcr^ncia:)
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Relationship to Student:
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^Uclacton a csfudiamc:)
Parent/Guardian Email:
'Corrcu dcctronico dc- Padre dt
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familia /tutor:)
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Medical Information "- . . . . - _ . . _ _ . : . - - - . . - : . . — =
"Joctor's Name:
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TJombrc del doctor) 1


"Joe tor's Phone:
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'1 defono del doctor)


Allerpcs:
Alcrgi as:)
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Medical Alert:
'Alcrtamcdica.)
dentist:
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Mombic del Jcnusia:)


3enttst I'hont
Tclefono dd dcmista.)
I Student Registration Form
Hojade Inscription para Alumnos
IDEA
ir Public Schools

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Public Ti)Fnr|Ti^Tii);|mj»csts/Solicinidcsd{.- in fomiqaqn publics
Would you like for your student's information to be released to third parties? / jLe g/tstaria que la information
del sstudiante sea compartida con ten-ems paries?

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Yes/Si No/No
Media Hdeasc/AiitoriMcirin, p-n-^ mfdips de..comunicaci6n

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May we use your child's picture in any publieationsP/^Pa/wsoj' asar la imagin tie sn hijo(a) en cuctlquier publication?

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Yes/Si No/No

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Transfer Statement /Declaration d^ Traiijifcrciicja
I understand that, should my child be selected to attend a specific IDEA campus, they must attend said campus for one fuli school year prior to requesting a
transfer to another IDKA campus, contingent on space beinj- available at that campus.?/,? Entiendo que en casa que mi hi/of a sea sehctionadol apara tin plantel de

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l, es reqnerido qiit asisia a cse plan tel par lo mcnos tin ann escnlar complete* antes Aepoder soKdtar ttna tramferencia a atro plantel ck IDEA, sietripnj caando haya capo en ese
?

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Yes/Si No/No

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By signing the following/ Al firmar,

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I understand each and ever}' question and instruction on this form, as well as my answer to each question. 1 certify, under penalty of perjury
under the laws of the United .States of America, that the information provided with this application is :ill true and correct. I certify also that I have
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not withheld any information that would affect the outcome of this application./ Etitiendo todasy cada una de las pregiinfas e instrucdones en esta soKdtiid,
al ignal qtie mi respuesta para cada prtgitnta. Yo certifies, bajo pena de perjuria bajo las /eyes ds las Estados Unidos de America, qm la information proportioned tn
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ssta solicitud es verdaderaj correcta. Certified tambihi qut no be owhado ningana information qus psieda afectar el resutlado de esta apilcadon.
\ amhorixc the release of any information from my records that IDEA PuUic Schools needs so determine clsj<ibility for the benefit 1 am s
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/ Yo aatori^o la divulgation di cualquier information de mis reftstros /as cxa/es IDRA Pab/if Schools determine necesario para detenniaar la tkgibilidad para el benefuio
qrn busca.
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Parent's Signature /Firma de Padre de Familia ___________ „ Date/Fecha _ ___


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I D E A

ir Public Schools

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Tliis form is to be completed for all students new to IDEA Public Schools, Pre-K - 12. For students who previously received
LEP services in another Texas School, a copy of the original Home Language Survey must be requested from the student's

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previous district. When received, the copy of the Home Language Survey from the previous district should be kept along with
this completed form,

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Student's Name Grade

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Nombre del alumna Grado

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Date of Birth; Previous School

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Peeha de Nadmiento Esctfe/a previa

Home Language Survey/_Cites tenario de JdinmaNatal

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1. What language is spoken in your home most of the time?

el idiama qne se hahla mas en <at Ijogar?

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2. What language does your child speak most of the time?

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ales el id'wma que sn hijo(a) habla mas?

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3. Date off first entry into ANY public school in the USA

jFecha del PRIMER ingreso en CUALQUIBR escuela pnblica de —

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E.V.?

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4. Circle the grade levels that your child attended school in the US.

Marque hs grados qite sn Ittjo(a) asistlo a la escuela en bs listados U nidus.

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1 2 3 4 5 6 7 8 9 10 11 12
5. My child attended school :_ all year _ partial year

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Mi hijo(a) asistio a la escimhi todo el'ana ano.\' pardales

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Parent Signature,^ Relationship to Child Date


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Firma del padreI tutor Relation a! estudiante Vecha


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AppID:
Campus:

Texas Education Agency

Texas Public School Student/Staff Ethnicity and Race Data Questionnaire

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The United States Department of Education (USDE) requires all state and local education
institutions to collect data on ethnicity and race for students and staff. This information is used

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for state and federal accountability reporting as well as for reporting to the Office of Civil Rights
(OCR) and the Equal Employment Opportunity Commission (EEOC).

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School district staff and parents or guardians of students enrolling in school are requested to

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provide this information. If you decline to provide this information, please be aware thatthe

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USDE requires school districts to use observer identification as a last resort for collecting the
data for federal reporting.

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Please answer both parts of the following questions on the student's or staff member's ethnicity
and race. United States Federal Register (71 FR44S6B)

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The federal government requires school districts to collect (1) ethnicity and (2) race information.

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Below is the information we have for your child.

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Part 1. Ethnicity: Is the person Hispanic/Latino? (Choose onlyone)
Q Hispanic/Latino - A person of Cuban, Mexican, Puerto Rican, South or Central American, or

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other Spanish culture or origin, regardless of race.
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D Not Hispanic/Latino Q Parental Refusal
Part 2. Race: What is the person's race? (Choose one ormore)
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American Indian or Alaska Native - A person having origins in any of the original peoples
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of North and South America (including Central America), and who maintains a tribal affiliation
or community attachment.
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Asian -A person having origins in any of the original peoples of the Far East, Southeast

Asia, or the Indian subcontinent including, for example, Cambodia, China, India, Japan,

Korea, Malaysia, Pakistan, the Philippine Islands, Thailand, andVietnam.

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Black or African American -A person having origins in any of the black racial groupsof
Africa,
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D Native Hawaiian or Other Pacific islander - A person having origins in any of the original
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peoples of Hawaii, Guam, Samoa, or other Pacific Islands.

White - A person having origins in any of the original peoples of Europe, the Middle East, or

North Africa.

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Parental Refusal
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Student/Staff Name (please print) (Parent/Guardian)/(Staff) Signature


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Date
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Student/Staff Identification Number


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AppID:
Campus:

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Military Connected and Foster Care Survey

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Student Name:

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Grade Level:

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The State of Texas requires schools to collect data relating to the enrollment of military connected and foster care
students. This collection allows schools to recognize and monitor critical elements of student success for children
who are dependents of military personnel or foster care.

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Please check one box below to indicate if your child is a dependent of a member of:

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[""] Active Duty - Army, Navy, Air Force, Marine Corps, or Coast Guard [This includes Missing in Action (MIA)]

I 1 Texas National Guard


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LJ Reserve Duty - Army, Navy, Air Force, Marine Corps, or Coast Guard

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CD This DOES NOT apply to my student

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Foster Care
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L_l My student receives Foster Care Services


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CJ This DOES NOT apply to my student


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Patent Signature Date


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AppID:
Campus:

IT Public Schools
Confidential Medical Form SY 2014-2015

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Student Health History

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Student Name: -Date of Birth: ~ID Number: (Last, First, Middle)
(MM/DD/YYYY)
Home Phone Number: -Work Phone N u m b e r : , . _Ccll Phone Number:

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Please check any current health concern:

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ADD/ADHD Allergy An aph vl axis / Epi- Pen Asthma

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Autism Blood Disorder Cancer Cerebral Palsy

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Cystic Fiforosis Diabetes Type 1 Diabetes Type 2 Down Syndrome

Gasiric/In<estiiia! Disorder (Stomach) ricarinu Loss Heart Condition 1 lij;h Blood Pressure

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lUental Health Obesity Pervasive Developmental Delay TVcHnant /Parenting

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Sdxuri^s Spina Hi fid i Tuberculosis Urinary Condition «v CatheteriMtion

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Vision Problems Other:

If you answered "Yes" to any of the above, please explain further:

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I las ynur child been seriously ill, hospitalized and/or had a serious accident »j_thc' past year? YES NO
If YES, please explain:
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In order to keep your child safe at school, certain health conditions may require a health care plan developed by the school clinic staff. This.may,
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r cg.ui r c .that f he_. cl i n i c staff re cei ve phy si ci an's o rdcrs be fore a tten d i ng schot )1.Special? roceciurcs regii i re iipciatcd physician ord,crs aji mi ajjy,
Please contactthe.-.sc.ho<>j clinic..staff.
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Consent to Release Health Information:


I understand and agree that, in order to provide s coordinated system of care, the health services team may exchange health care information
about the Student with the Student's physician or other healthcare providers in non-emergency situations, upon separate, additional approval by
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me. Separate consent


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I GIVE /„____! DO NOT GIVE permission to release information to/from student's physician or other healthcare provider in non­
emergency situations. I understand that this information will be shared in emergencies asnecessary.
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Parent/Guardian signature:,
Date:
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Medications:

Parents of students that have medication atAcho.ol must complete the "Consent to Medication Form" and bring the form and the medication

directly to the school health aide.

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Medications taken at school (please list):

Medication taken at home (please list):

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Student Health Services Consent to Treat:

I understand that the school clinic provides basic first aid for injuries and illnesses. I give permission for clinic staff at IDKA or staff under the

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guidance of the health services team, to provide described services to the student as he/she may require while present in school.

! understand that, if the student has a serious injury or illness, I will be contacted and/or Emergency Medical Services (EMS) may beconiacted

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if necessary. 1 understand and agree that IDEA nor their staff will be responsible for any cost involved if the student needs emergency medical

care.

I understand and agree that the health services team may share the student's health care information with IDEA personnel, in accordance with

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IDEA protocol, in order to provide appropriate attention to the student's health care needs.

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Parent/Guardian signature: Date:,

IMMUNIZATIONS: Suuieji|§jiyre_f^ti|^^ to the school.

IDEA Health History FormSY14-15


AppID:
Campus:

IDEA
Sr Public Schools

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Student Name: J)ate of Births. .ID Number:, (Last, First, Middle)

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(MM/DD/YYVY)
Home Phone Number: Work Phone Number: Phone Number:

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IDEA Public school health services provide basic first aid for injuries and illnesses. I give permission for clinic staff at IDEA or staff under the

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guidance of the health services team, to administer described aver the counter medications to my student as he/she may require while presentin
school. Please check the medications that you allow the health aide or staff to use on your child during the school year.

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I give my permission L» tlie following types of over-lhc-counier medications lo be used on mv child:

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Rye rinst: (commercially
j^Vg, jjn ig s_ _(Vi si n c . O p - O i n ) ^rggflredj ....,....rr;=,,m,,^,^^, ^2l?iJ2HlJH!H!:Hjl^H2!i^_™™^™. Ami-iicli crciOT' iQ'i^jJQll')1j'll1)

Mciitlachc /I'ever /Aches arid Pains


Sore Throat Spray (Chlorstseptic) (Ibuprofen like Advil, Mo trin)

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Allwgic reaction cream (Bcnadrj'3) Antacid fluff's)

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Cough Drops, Sore Throat HeatJaclie /Fever / Burns
Antibiotic ointment (Neosporin) (like Halls, Sucrets) Hum Frecac (Actiaminnphcii, like Tylenol)

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Vick's

Yn dov pcrmtso que adniinistrcn los siK«icnfcs medicamcntos a mi nino/a:


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Colas para ins ojos fVisinc, Op-Con) Unjuague para los ojos 'gpl" pant dolor buc^l (Orasol) Crema anii-comcwm (Caladrvl lotion)
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Crcma o iiijuido oral para reacciones "spray" para dolor dt gargama I'astiilas para dolor y fiebre (Ibuprofctt,
alursicas (i)enadrvl) Amiacidos (Turns) (ChUmi septic) Advii, Moirin)
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Pasiilb para tos y dolor de Pomada para Quemaduras (Burn PasrilLis para dolor y fiebre
•\ntibiotico en pomada fNcosporin) )>arj;anta ( Malls, sucrets) I?rec/e) (Acetaminophen, Tylenol)
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Vick's
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Parent/Guardian signature: Date:.


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IDEA Health History Form SY12-13


AppID:
Campus:

Student:
IDEA Public Schools
Multi-Child Free and Reduced Price School Meals Application for 2014-2015
Part 1: All Children in School in the Household Part 2. Benefits— If any
A. List the names of aft children in B. List the C. Check the appropriate box if a child participates in any one of member of your household

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D. Check
school in your household. name of the the following programs If all children participate in at least if child receives SNAP, TANF, or

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(First, Middle Initial, Last) school for one of these programs go to Part 4. If only some, go to Part 2. has no FDPIR, provide the Eligibility
income Determination Number (EDG)
Migrant | Runaway Head Start

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„ _____ ._.._._™«_|. , ,.,™_™.,_ __,_.,_,»... for the person who receives
D [ D G ! D D n benefits and skip to Part 4. If
2. 1 G G O G a G no one receives these

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G a D G o a benefits, go to Part 3.
D G D D a G EDG:
«• J

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_&_ ______ — —­ D Q a a G a

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6. D D a D

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- ^ a D G G a a

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8, H G 0 n • D
Part 3, Total Household Gross Income.
A. List all children recorded in B. List all income on the same line as the person who receives it. Record how often the income is received in the second blank.

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Part 1 who have_an income Mark the box under No Income if the person has no income,

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and all household members (A=Annua!ly M=Month!y T=Twice Per Monlh E=Every Two Weeks W=Weekly)
not recorded in Part 1 . [ Earnings from Work Before Welfare, Child Support, Social Security, SSI, orVA [ AH Other
) Deductions \ Alimony Retirement Benefits j income

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No
(Example) Jane Smith I $199.00/E \ S749.00/M $9irjQ/M' I S50.00/T Income
1. I s_ - / $ . ._ / $ I S ../ a

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2. ( $_ __/ ! $_____/ s / S / a
!$___^/___ !$___/ j.^-^^__^„_
3.
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_ . „
T7~~~~~~~"~"T~~ f$ / $ D
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5. J $._»__y_ $._____/__ $ „____/__ $„___/_ D
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6, Is _ / _ I $^____/ $ / S / a
7, a
„ ________ »_l___ ^^^^^^^^^^~~~—' l -*-£———~
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Part 4. Signature and Last Four Digits of Social Security Number—An adult household member must sign the application. If Parj_3 is completed, the adult signing
this form must provide the last four digits ol his/her Social Security number or_mark the box in tront of "I do not have a Social Security number*
/ certify (promise) that all information on this application is true and that all income is reported. I understand that the school will get federal funds based on the
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information I give, I understand that school officials may verify (check) the information. I understand that if/purposely give false information, my children may lose
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meal benefits, and I may be prosecuted,


Sign Here: Print Name Here: ,
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Date:
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Address: Phone Number:


City: . . State: Zip Code:,
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Last Four Digits of Social Security Number


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Do Not Fill Out This Part. This is For School Use Only
Multiple income frequencies must be converted to annual amounts and combined to determine household income. Do not convert if only one income frequency is provided by the household. II
converting income to annual, round only the Unal number—Annual Income Conversion: Weekly x 52 / Every2 Weeks x 26 / Twice a Month x 24 / Monthly x 12
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Total Income:_______, Per n Week D Every 2 Weeks n Twice a Month a Month D Year Household Size: ________
G Categorical Eligibility: a Meal Eligibility: Free Reduced a Denied Date Withdrawn:
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Reviewing/Determining Official's Signature: . Date:,


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Confirming Official's Signature: Date:.


Follow -Up Official's Signature; Date:
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Nondiscrimination Statement-tins explains what to do if you believe you have been treated unfairly. The U.S. Department of Agriculture prohibits discrimination against its customers,
employees, and applicants for employment on the bases of race, color, national origin, age, disability, sex, gender identity, religion, reprisal, and where applicable, political beliefs, marital
status, familial or parental status, sexual orientation, or all or part of an individual's income is derived from any public assistance program, or protected genetic information in employment or
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in any program or activity conducted or funded by the Department. (Not all prohibited bases will apply to all programs and/or employment activities.) If you wish to file a Civil Rights program
compSaint ol discrimination, complete the USDA Pmgram_Di$crimmatiDnC6mti)int Form, found online at Mp:l/mwma,mtia.Q(M£M!^MJfiinQ..£i}5WrnL or at any USDft office, or call
(666) 632-9992 to request the form. You may also write a letter containing all of the information requested in the form. Send your completed complaint form or letter to us by mail at U.S.
Department of Agriculture, Director, Office of Adjudication, 1400 Independence Avenue, S.W., Washington, D,C. 20250-941D, by fax (202) 690-7442 or email at Drogram.intake<®usda,QQV.
Individuals who are deaf, hard of hearing or have speech disabilities may contact USDA through the Federal Relay Service at (800) 877-8339; or (800) 845-61 36 (Spanish). USDA is an
equal opportunity provider and employer.
AppID:
Campus:

Student:
Multi-Child Free and Reduced Price School Meals Application for 2014-2015
Extra Household Member Reporting Sheet

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Use this sheet if needed to report additional children in the householder additional household members.

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Part 1: All Children In School in the Household
A. List the names of all children in B. List the name of the school for each C. Check the appropriate box if a child participates in any one of the D, Check if
school in your household. (First, child. following programs, If all children participate in at least one of child has

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Middle Initial, Last} these programs go to Part 4. If only some, go to Part 2. no income
Foster Homeless Migrant Runaway Head Start

L.
_. „ . __™ „_ . ™ __
_____ _______ . ___ . __________________
D D D D D a
a a ^_^ a a a a

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____™™__ __________ ______^__________ ______
a a a D a a

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12, a G a D a D

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13. a D a a D D
14. D D D a a a
15. n n a

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a D D
16. n

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™-____~_ __________ a D n D

. __________ ________________
n a D a D D

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a a D a G a
19. D a a G a

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20. a a D D D a
Part 3. Total Household Gross Incon e.
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A. List all children recorded in Part B. List all income on the same line as the person who receives it. Record how often (he income is received in the second blank.
1 who have an income and all Mark the box under No Income'^ the person has no income.
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household members not recorded (A^Annually M=Monthly T=Twice Per Month E=Every Two Weeks W=WeeHy)
in Part 1. AIO ther
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Earnings from Work Before Welfare, Child Support, Social Security, SSI, or VA j
Deductions Alimony Retirement Benefits } Inco me
{Example} Jane Smith S199.0Q/E ' S149.QO/M — "wsovw" 7 "' ~ ssac0/T No Income
i , t 1
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0
$ I S / $ / M / E /
1 II 1 a
10. $ / S / t
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C // G
11. S / S / _ * ^ § / D
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12. s / S / s / I s / D

s /
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13. S / s / i s / a
14. $ / $ / s / is / a
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15. s / S / C
29 / 1$ / a
16. $ / S / / !S / a
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17, s / S / s / i s / a
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18. $ / S / / 1$ / a
19. s / S / e
_=_==____ is / a
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20, $ / S / $ 1 S / D
The Richard B. Russell National School Lunch Act requires the information on this application. You do not have to give the information, but if you do not, we cannot approve
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your child for free or reduced-price meals. You must include the last four digits of the Social Security number of the adult household member who signs the application, The
last four digits of the Social Security number is not required when you apply on behalf of a foster child or you list a Supplemental Nutrition Assistance Program (SNAP),
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Temporary Assistance for Needy Families (TANF) or Food Distribution Program on Indian Reservations (FDPIR) case number or other FDPIR identifier for your child or when
you indicate thai the adult household member signing the application does not have a Social Security number. We will use your information to determine if your child is eligible
for free or reduced-price meals, and for administration and enforcement of the lunch and breakfast programs. We MAY share your eligibility information with education, health,
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and nutrition programs to help them evaluate, fund, or determine benefits for their programs, auditors for program reviews, and law enforcement officials to help them look into
violations of program rules.
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STUDENT TRANSPORTATION REGISTRATION FORM

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1. Student First Name: Middle Initial; Student Last Name: IDE.A student's ID #:

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Student Physical Address
House Number: Street: City: Zip Code:

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(No P.O. Boxes or Rara/Ratttes)

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Parents/Guardians Phone Numbers: Student's Grade: Student's Campus:

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2. Will your child be requiring IDEA'S A YES • If you answered YES, please proceed to complete this

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transportation services nextyear? form.
A NO

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» If you answered NO, please proceed to question
number 7.

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3. Does your child require Special A YES If you answered YES, please explain:
Ttanspot tation accommodations?
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A NO
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4, Please select which Route and Stop your child will be using. To see current listing of campus routes please visit
w\v\v.iUeapubliciscliools.org / Schools / Transportation/ School bus Routes.
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No! e: IDF^A Public Schools dots not offer custom transportation (s. g. Service to different addresses on different days, short
term changes or transportation on alternate days).
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Route Number: StopNumben.


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5. Only students in 4* -12 grade are A I DO I DO permit my 4lh-l 2thth grade child to drop off at an IDEA
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permitted to be dropped off at an IDEA bus stop without parental /guardian supervision.
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bus stop without parent/guardian A I DO


supervision. Please select one of the NOT I DO NOT permit my 4th -12th grade child to be dropped off at
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following options: IDEA bus stop without parental/guardian supervision.


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6. If you child is not in 4th grade or above or if you DO NOT a) Name, phone number and relationship
permit your child to be dropped off at an IDEA bus stop,
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please provide the full name, phone number and


relationship of at least three persons that you authorize to b) Name, phone number and relationship
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receive your child at the designated bus atop: (This will

allow our drivers to confirm that you children are being

received by you or the responsible party otherwise the


c) Name, phone number and relationship

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student will be returned to the school).

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7. Parent/Guarding please provideyour:


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Name: Signature: Date:


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Please contact the Transportation Department representative located at each campus to obtain/update any information
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related to your child's transportation needs.


Section VI.

Special Education Assurances

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The charter holder certifies it has policies and procedures in place that ensure implementation of all federal laws and

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regulations, Texas laws, State Board of Education (SHOE) and commissioner of education rules related to students with
disabilities and further certifies any future amendments to the laws, regulations, and rules will be incorporated and

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implemented.

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Signature of Charter Holder Board Chair

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(Must sign in blue ink)

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Mike Rhodes
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Printed Name of Charter Holder Board Chair
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Page 14
Section VII.

Serving Students at Residential Facilities Assurances

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If the charter school is not currently approved to serve students at residential facilities, do not provide a signature
and indicate N/A on the signature line.

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If operating a charter school campus on the site of a residential facility (RF) or serving students residing in or receiving

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services from an RF, the charter holder chair certifies by signing the assurance that:

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Compliance with Special Education Requirements: The charter holder assures that it will comply with all of the

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requirements for the provision of educational services to students with disabilities as mandated by the Individuals with
Disabilities Education Act, as amended, the Texas Education Code, and federal and state special education regulations.
The charter holder acknowledges that state and federal special education requirements require, among other things, it

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provide a free and appropriate public education (FAPE) in the least restrictive environment (LRE) to students with

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disabilities residing in RFs. The charter holder further assures that it will provide, or seek the provision of, a FAPE to

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students with disabilities, which may require it to contract with outside service providers or another local educational
agency to provide necessary services and supports to students with disabilities.

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Geographic Boundaries: The charter holder assures that it will accept students who reside in the school district(s) that
are within each campus's geographic boundaries regardless of the presence or absence of a disability or admission to or
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participation in an RF program.
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Admissions Criteria: The charter holder assures that its admissions criteria will not be based on the presence or the
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absence of a disability; or on gender; national origin; ethnicity; religion; academic; artistic or athletic ability; or the home
district the child would otherwise attend.
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School Choice: The charter holder assures that parents/legal guardians (or adult students) will be advised that they may
choose to enroll their child in either the charter school or the local public school district and that the elected choice will
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be documented in writing and filed for purposes of review or audit by the Texas Education Agency (TEA), an external
auditor, or another entity.
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Residential Facilities Monitoring (RFM) System: The charter holder assures that it understands that, pursuant to 19
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(TAC) §97.1072, there is a specific system for monitoring school districts and charter schools serving students with
disabilities who reside in RFs. The charter holder further assures that it understands it will be required to report data related
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to students with disabilities residing in RFs in TEA'S data collection system known as RF Tracker and it may be subject
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to RFM intervention activities and on~site visits based upon a review of the data reported on a random selection or other
means of selection.
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Training: The charter holder assures that all personnel involved with serving students with disabilities residing in a RF
and personnel involved with reporting data in RF Tracker will receive training on the RFM system. Please contact your
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regional Educational Service Center for information regarding the required RFM system training.
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Pas-e 15
Section VII. (Continued)

Serving Students at Residential Facilities Assurances

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The charter holder assures this document has been shared with, and understood by, the RF board and that the RF board

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has acknowledged its understanding of all federal laws and regulations, Texas laws, State Board of Education (SHOE)
and commissioner of education rules related to charter schools serving students at residential facilities and further

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certifies that any future amendments to the laws, regulations, and rules will be incorporated and implemented.

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Signature of Charter Holder Board Chair Date

(Must sign in blue ink)

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Mike Rhodes
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Printed Name of Charter Holder Board Chair


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Please write N/A in the signature line


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if the charter does not serve students at residential facilities.


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Page 16
Section VIII.

Bilingual/ESL, Section 504, and Dyslexia Assurances

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Texas Education Code, Chapter 29, Subchapter B, TEC §12.104(b)(2)(G), and 19 TAC §§89.1201-89.1265 require charter
schools to identify limited English proficient students based on state criteria and to provide an appropriate bilingual

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education or English as a second language program conducted by teachers certified for such courses.

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A. The charter holder certifies it has policies and procedures in place to ensure it complies with the legal and regulatory
requirements concerning identifying and providing appropriate educational services to limited English proficient

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students.

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©Yes

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ONo

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Section 504 of the Rehabilitation Act of 1973, 29 U.S.C. §794, prohibits discrimination on the basis of disability in any
program receiving federal financial assistance. A recipient that operates a public education program or activity shall

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provide a free, appropriate public education to qualified individuals.

B. The charter holder certifies it has policies and procedures in place to ensure it complies with the legal and regulatory

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requirements concerning identifying and providing appropriate educational services to students protected by Section
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504.
© Yes
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Texas Education Code §38.003, TEC §12. lQ4(b)(2)(K), 19 TAC §74.28 and Section 504 of the Rehabilitation Act of 1973,
29 U.S.C. §794, require charter schools to identify students with dyslexia or related disorders and to provide appropriate
educational services.
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C, The charter holder certifies it has policies and procedures in place to ensure it complies with the legal and regulatory
requirements concerning identifying and providing appropriate educational services to students with dyslexia or related
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disorders.
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I further certify that any future amendments to the laws, regulations, and rules will be incorporated and implemented.
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Signature of Charter Holder Board Chair Date

(Must sign in blue ink)

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Mike Rhodes

Printed Name of Charter Holder Board Chair

Page 17
Section IX.

Fingerprinting and Criminal Record Check Assurance

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The charter holder certifies it is in compliance with TEC §12.120, and confirms that no individual is serving in any
capacity if he or she has been convicted of a misdemeanor involving moral turpitude; a felony; an offense listed in TEC

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§37.007(a)\ or an offense listed in Article 62.001(5) Code of Criminal Procedures; unless the individual is eligible to be
employed in a position in a school district under TEC§12.120 (a-1).

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Additionally, the charter holder confirms all current fingerprinting and criminal record checks are available for all

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employees, including contract employees; volunteers who indicated in writing their intention to serve; board members;

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and officers of the charter holder who are not on the board, in compliance with TEC §§12.1059, 22.0832-22.0835.

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Signature of Charter Holder Board Chair Date

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(Must sign in blue ink)
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Mike Rhodes
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Printed Name of Charter Holder Board Chair


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Page 18
Section X.

Certificate of Acknowledgement

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This section requires at least a majority of the governing body of the charter holder to certify it has had an opportunity to
review the completed renewal application and has authorized, during an open meeting, submission of the application to the

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commissioner of education for consideration of renewal of the charter.

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CERTIFICATE OF ACKNOWLEDGEMENT
The undersigned members of the governing body of the charter holder hereby acknowledge that they have had an

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opportunity to review the completed renewal application and have authorized its submission, during an open meeting, to

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the commissioner of education for consideration of the renewal of the charter:

Typed Name Signature


(Type name next to corresponding signature) Date*

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(Must sign in blue ink)

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*Members are to sign the acknowledgement during an open meeting; therefore, (he dale next to each signature must
reflect the date of the meeting.
Page 19
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Michael Williams

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Commissioner of Education

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Lizzette C. Gonzalez Reynolds

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Chief Deputy Commissioner

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Michael Berry

Deputy Commissioner, Policy and Programs

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Sally Partridge

Associate Commissioner, Accreditation and School Improvement

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Heather Mauze

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Director, Division of Charter School Administration

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For further information contact the Division of Charter School Administration at:

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Texas Education Agency

1701 North Congress Avenue

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Austin, Texas 78701

(532)463-9575

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(512) 463-9732 fax


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Or visit the website:


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Page 21

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RENEWAL PROCESS FLOWCHART

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RECEIVED FEB 1 9 2015

Texas Education Agency

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Michael Williams
Charter Renewal Contract Commissioner

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February 2, 2015

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Mr. Michael Rhodes, Board Chair

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IDEA ACADEMY, INC.

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505 Angelita Drive, Suite 9
Weslaco.TX 78599

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Re: Charter Renewal Contract for IDEA PUBLIC SCHOOLS (CDN 108807)

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Dear Mr. Rhodes:

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I am pleased to inform you that the charter renewal is approved for IDEA PUBLIC SCHOOLS with
a contract ending date of July 31. 2025. After renewal, the charter contract shall consist of the
following:

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• the representations and assurances made by the charter holder in the original request for
application under the standard application system, including all revisions made during the
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contingency process;
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• the original contract for charter, as signed by the charter holder and the State Board of
Education;
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• any condition, amendment, modification, revision, or other change to the charter approved
by the State Board of Education or the commissioner of education, including any prior
renewal documents with revisions based on contingency responses;
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• the final renewal application received in spring 2015, on file with the Division of Charter
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School Administration, including any revisions required by the agency and any
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amendments to the charter made through the renewal application; and


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• all statements, assurances, commitments, and representations made by the charter holder
in its application for charter renewal and its attachments or related documents, to the
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extent that these documents are consistent with those listed above.
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By accepting these renewal terms, the charter holder represents that it understands that the
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charter holder, including any and all governance, at whatever level whether appointed or elected,
employees, agents, and volunteers, shall fully cooperate with every Texas Education Agency
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investigation and/or sanction deemed necessary by the commissioner based on authority and
responsibility given to the commissioner in state or federal law. This means that Texas Education
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Agency staff may conduct confidential interviews of charter school personnel and contractors
outside the presence of representatives of the charter school's administration and board and that
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failure to timely reply with reasonable requests for access to site, personnel, documents, or other
materials and/or items is a material violation of the contract for charter.
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By accepting these renewal terms, the charter holder represents that it is understood by all parties
that, if the charter holder loses its 501(c){3) tax exempt status for any period of time, through
action of the Internal Revenue Service or any other action which renders the charter holder no
Mr. Michael Rhodes, Board Chair r CCD A onin
IDEA ACADEMY, INC. KhtblVLU rttf I 9 4H3
Page 2

longer an "eligible entity" within the meaning of TEC §12.101 (a), the charter contract shall be

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rendered void, and it shal! automatically return to the Texas Education Agency without any other

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action having to be taken by the commissioner.

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Note that this contract is contingent upon legislative authorization and that the contract and the
funding under state and federal law may be modified or even terminated by future legislative acts.

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Furthermore, state and federal laws and rules may periodically be adopted, amended, or
repealed, and all such changes applicable to the charter holder or its charter school(s) may modify

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this contract, as of the effective date provided in the law or rule. Nothing in the charter contract

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shall be construed to entitle the charter holder to any privilege or benefit, including any funding,
but in accordance with state and federal laws In effect and as they may in the future be amended.

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A contract term that conflicts with any state or federal law or rule is superseded by the law or rule
to the extent that the law or rule conflicts with the contract term.

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Notwithstanding the granting of this renewal, it is understood by the parties, that the charter

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continues to be subject to future actions by the commissioner including but not limited to possible
revocation under TEC 12.115(c).

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To acknowledge acceptance of this renewed contract, the chair of the charter holder board

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must sign below and return the entire original document to:
Texas Education Agency
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Division of Charter School Administration
William B. Travis Building, Room 5-107
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1701 North Congress Avenue


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Austin, Texas 78701-1494

The charter holder should keep a copy of the document for its files. Please contact the Division
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of Charter School Administration at (512) 463-9575 with any questions.


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Sincerely,
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Michael Wpiams
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Commissioner of Education
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MW/bs
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cc: Ms. Joann Gama, Superintendent


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JTthe undersigned hereby certify that the governing body of the charter holder has accepted and
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agreed to the charter renewal agreement for IDEA PUBLIC SCHOOLS as outlined in the
foregoing letter and has authorized me to sign below,
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[Agreed and Accepted:


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Mr. Michael Rhodes n .

Board Chair, IDEA ACADEMY, INC.

Exhibit B

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PLAINTIFF IDEA PUBLIC SCHOOLS’

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CROSS-MOTION FOR SUMMARY JUDGMENT

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IDEA Public Schools, Inc.

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Consolidated Financial Report

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June 30, 2017

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Contents

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Board of Directors 1

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Certificate of Board 3

Independent auditor’s report 5-6

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Financial statements

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Exhibit A-1 Consolidated statements of financial position 8-9

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Exhibit A-2 Consolidated statements of activities 10-13

Exhibit A-3 Consolidated statements of cash flows 14-15

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Notes to consolidated financial statements 17-38

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Other supplemental information

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Exhibit B-1 Statements of activities for individual charter school 40
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Exhibit C-1 Schedules of expenses for individual charter school 41
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Exhibit D-1 Schedule of capital assets for individual charter school 42


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Exhibit E-1 Budgetary comparison schedule for individual charter school 43


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Consolidating statement of financial position 44-45

Consolidating statement of activities 47


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Consolidating statement of cash flows 48-49


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IDEA Public Schools, Inc.

Board of Directors

Board of Directors

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Thomas E. Torkelson, Executive Chairman

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Bill Martin, Chairman

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Reba Cardenas McNair, Chairman Elect

Al Lopez, Secretary, Austin Regional Board Chair

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David Guerra, Treasurer

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Eric Ziehe, Member

Gabe Puente, Member

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Bert Garcia, Member

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Ryan Vaughn, Member

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Xenia Garza, Member
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David Earl, Member
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David Handly, San Antonio Regional Board Chair
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Chief Executive Officer


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Thomas E. Torkelson
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President and Superintendent


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JoAnn Gama
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Chief Financial Officer


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Wyatt J. Truscheit
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Independent Auditor’s Report

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To the Board of Directors

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IDEA Public Schools, Inc.

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Report on the Financial Statements
We have audited the accompanying consolidated financial statements of IDEA Public Schools, Inc. (the
School), which comprise the consolidated statement of financial position as of June 30, 2017, the related

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consolidated statement of activities, and cash flows for the year then ended, and the related notes to the

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consolidated financial statements.

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Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial
statements in accordance with accounting principles generally accepted in the United States of America;

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this includes the design, implementation and maintenance of internal control relevant to the preparation
and fair presentation of financial statements that are free from material misstatement, whether due to
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fraud or error.
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Auditor’s Responsibility
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Our responsibility is to express an opinion on these consolidated financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards,
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issued by the Comptroller General of the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the consolidated financial statements
are free from material misstatement.
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An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
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the consolidated financial statements. The procedures selected depend on the auditor’s judgment,
including the assessment of the risks of material misstatement of the consolidated financial statements,
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whether due to fraud or error. In making those risk assessments, the auditor considers internal control
relevant to the School’s preparation and fair presentation of the financial statements in order to design
audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an
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opinion on the effectiveness of the School’s internal control. Accordingly, we express no such opinion. An
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audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of
significant accounting estimates made by management, as well as evaluating the overall presentation of
the consolidated financial statements.
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We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
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our audit opinion.


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Opinion
In our opinion, the consolidated financial statements referred to above present fairly, in all material
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respects, the consolidated financial position of the School as of June 30, 2017, and the changes in its net
assets, and its cash flows for the year then ended, in accordance with accounting principles generally
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accepted in the United States of America.

5
Other Matters

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Other Information

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Our audit was conducted for the purpose of forming an opinion on the consolidated financial statements
as a whole. The accompanying other supplemental information, as listed in the table of contents, is

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presented for purposes of additional analysis and is not a required part of the consolidated financial
statements. Such information is the responsibility of management and was derived from and relates
directly to the underlying accounting and other records used to prepare the consolidated financial

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statements. The information has been subjected to the auditing procedures applied in the audit of the
consolidated financial statements and certain additional procedures, including comparing and reconciling

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such information directly to the underlying accounting and other records used to prepare the financial

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statements or to the financial statements themselves, and other additional procedures in accordance with
auditing standards generally accepted in the United States of America. In our opinion, the information is

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fairly stated, in all material respects, in relation to the financial statements as a whole.

Other Reporting Required by Government Auditing Standards

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In accordance with Government Auditing Standards, we have also issued our report dated August 25,

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2017, on our consideration of the School’s internal control over financial reporting and on our tests of its
compliance with certain provisions of laws, regulations, contracts and grant agreements, and other

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matters. The purpose of that report is to describe the scope of our testing of internal control over financial
reporting and compliance and the results of that testing, and not to provide an opinion on internal control
over financial reporting or on compliance. That report is an integral part of an audit performed in

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accordance with Government Auditing Standards in considering the School’s internal control over
financial reporting and compliance.
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Other Matter
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The financial statements of IDEA Public Schools, Inc. as of and for the year ended June 30, 2016, were
audited by other auditors, whose report dated August 12, 2016, expressed an unmodified opinion on
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those statements.
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San Antonio, Texas


August 25, 2017
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Financial Statements
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IDEA Public Schools, Inc.

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Exhibit A-1 Consolidated Statements of Financial Position

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June 30, 2017 and 2016

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2017 2016
Assets

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Current assets:

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Cash and cash equivalents $ 96,034,815 $ 80,454,187

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Cash and cash equivalents—restricted 29,114,610 24,923,115
Due from government agencies 39,802,011 35,407,854

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Other receivables 405,129 245,189
Certificates of deposit 4,000,000 134,743

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Inventories 113,641 124,590

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Prepaid expenses 1,646,228 446,822
Other current assets 385,210 213,769

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Total current assets 171,501,644 141,950,269

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Property and equipment:
Land and improvements 49,910,789 37,731,129
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Buildings and improvements 343,196,032 244,580,903
Leasehold improvements 2,939,264 2,913,247
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Vehicles 10,676,710 8,934,259


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Furniture and equipment 11,515,619 7,155,518


Construction in progress 125,884,278 114,514,317
Total property and equipment 544,122,692 415,829,373
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Less accumulated depreciation and amortization 62,928,072 46,141,058


Net property and equipment 481,194,620 369,688,315
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Other assets:
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Cash and cash equivalents—noncurrent—restricted 27,476,276 38,457,826


Total other assets 27,476,276 38,457,826
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Total assets $ 680,172,540 $ 550,096,410


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2017 2016

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Liabilities and Net Assets

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Current liabilities:

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Accounts payable $ 23,593,886 $ 19,267,419
Accrued wages payable 15,312,435 10,775,456

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Accrued payroll expenses 3,965,706 3,227,867
Accrued interest payable 9,407,186 8,227,841

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Accrued expenses 5,187,876 9,125,198

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Deferred revenues 7,490,036 6,704,585
Other liabilities 232,130 196,810

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Notes payable—current portion 15,160,929 7,937,603
Bonds payable—current portion 7,315,000 5,860,000

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Capital leases payable—current portion 469,831 659,414
Total current liabilities 88,135,015 71,982,193
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Long-term liabilities:
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Bonds payable 443,550,000 370,320,000


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Bond and other debt issuance costs, net (8,431,018) (7,518,532)


Premium on issuance of bonds, net of amortization 34,192,750 16,099,737
Notes payable 3,880,318 1,645,754
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Capital leases payable 3,341,553 644,346


Total long-term liabilities 476,533,603 381,191,305
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Total liabilities 564,668,618 453,173,498


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Net assets:
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Unrestricted 1,360,428 439,951


Temporarily restricted 114,143,494 96,482,961
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Total net assets 115,503,922 96,922,912


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Total liabilities and net assets $ 680,172,540 $ 550,096,410


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See notes to consolidated financial statements.


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IDEA Public Schools, Inc.

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Exhibit A-2 Consolidated Statement of Activities

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Year Ended June 30, 2017

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Temporarily
Unrestricted Restricted Total

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Revenues and other support:
Local support:

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Contributions $ 1,608,714 $ 2,684,824 $ 4,293,538

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Grants - 11,870,942 11,870,942
Food service - 1,019,478 1,019,478

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Other revenues 400,433 6,495,387 6,895,820
Total local support 2,009,147 22,070,631 24,079,778

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State program revenues:
Foundation School Program - 248,565,042 248,565,042

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Other state aid - 4,054,979 4,054,979
Total state program revenues - 252,620,021 252,620,021

Federal program revenues: ct


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ESEA Title I—Part A - 8,218,535 8,218,535
ESEA Title I—Part A—Priority and Focus School - 38,039 38,039
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ESEA Title II—Part A Teacher/Principal Training - 1,662,432 1,662,432


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ESEA Title III—Part A Language Acquisition - 726,738 726,738


IDEA B Formula—Special Education - 3,154,468 3,154,468
IDEA—Part B Special Education Preschool Grants - 1,276 1,276
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ESEA Title V—Part B Charter Schools - 6,243,533 6,243,533


ESEA Title V—Part C Charter Schools - 49,794 49,794
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HEA Title IV—Part A GEAR-UP—Connect2College - 1,408,312 1,408,312


ARRA ESEA Race To The Top—District Grants - 7,131,316 7,131,316
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ESEA Title V—Part D Fund for the Improvement


of Education - 318,024 318,024
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Twenty—First Century Community Learning Centers - 3,309,259 3,309,259


Child Nutrition - 21,541,133 21,541,133
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SSA, Title XIX—School Health and Related Services - 1,162,197 1,162,197


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School Improvement Grants - 1,110,205 1,110,205


Total federal program revenues - 56,075,261 56,075,261
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Net assets released from restrictions:


Restrictions satisfied by payments 313,105,380 (313,105,380) -
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Total revenues and other support 315,114,527 17,660,533 332,775,060


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(Continued)
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IDEA Public Schools, Inc.

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Exhibit A-2 Consolidated Statement of Activities (Continued)

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Year Ended June 30, 2017

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Temporarily
Unrestricted Restricted Total

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Expenses:
Program services:

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Instructional and instructional-related services $ 139,340,956 $ - $ 139,340,956

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Instructional and school leadership 41,205,523 41,205,523
Total program services 180,546,479 - 180,546,479

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Support services:

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Administrative support services 18,231,679 - 18,231,679

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Ancillary services 298,373 - 298,373
Support services—nonstudent based 39,973,507 - 39,973,507

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Support services—student (pupil) 49,102,755 - 49,102,755
Debt service 15,623,286 - 15,623,286

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Fundraising 1,988,748 - 1,988,748
Total support services 125,218,348 - 125,218,348
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Total expenses 305,764,827 - 305,764,827
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Loss on extinguishment of debt (8,429,223) - (8,429,223)

Change in net assets 920,477 17,660,533 18,581,010


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Net assets at beginning of year 439,951 96,482,961 96,922,912


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Net assets at end of year $ 1,360,428 $ 114,143,494 $ 115,503,922


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IDEA Public Schools, Inc.

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Exhibit A-2 Consolidated Statement of Activities

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Year Ended June 30, 2016

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Temporarily
Unrestricted Restricted Total

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Revenues and other support:
Local support:

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Contributions $ 756,824 $ 2,557,972 $ 3,314,796

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Grants - 5,209,807 5,209,807
Food service - 949,641 949,641

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Other revenues 7,178 4,807,624 4,814,802
Total local support 764,002 13,525,044 14,289,046

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State program revenues:

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Foundation School Program - 205,329,975 205,329,975

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Other state aid - 3,807,219 3,807,219
Total state program revenues - 209,137,194 209,137,194

Federal program revenues:


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ESEA Title I—Part A - 4,990,361 4,990,361
ESEA Title I—Part A Priority and Focus School - 28,975 28,975
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ESEA Title II—Part A Teacher/Principal Training - 1,346,661 1,346,661


ESEA Title III—Part A Language Acquisition - 530,168 530,168
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ESEA Title V—Part B Charter Schools - 3,792,410 3,792,410


ESEA Title V—Part D Fund for the Improvement
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of Education - 691,198 691,198


ARRA ESEA Race to the Top—District Grants - 8,945,424 8,945,424
HEA Title IV—Part A GEAR UP—Connect2College - 2,145,868 2,145,868
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IDEA B Formula—Special Education - 2,705,454 2,705,454


IDEA B—Special Education—Preschool - 1,805 1,805
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Twenty-First Century Community Learning


Centers - 2,373,477 2,373,477
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School Improvement Grants - 579,519 579,519


Advanced Placement Program - 31,460 31,460
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Child Nutrition - 16,668,604 16,668,604


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SSA, Title XIX—School Health and Related


Services - 911,179 911,179
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Total federal program revenues - 45,742,563 45,742,563

Net assets released from restrictions:


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Restrictions satisfied by payments 247,373,076 (247,373,076) -


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Total revenues and other support 248,137,078 21,031,725 269,168,803


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(Continued)
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IDEA Public Schools, Inc.

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Exhibit A-2 Consolidated Statement of Activities (Continued)

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Year Ended June 30, 2016

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Temporarily
Unrestricted Restricted Total

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Expenses:
Program services:

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Instructional and instructional-related services $ 115,199,555 $ - $ 115,199,555

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Instructional and school leadership 31,074,477 - 31,074,477
Total program services 146,274,032 - 146,274,032

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Support services:

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Administrative support services 13,487,085 - 13,487,085

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Ancillary services 415,105 - 415,105
Support services—nonstudent based 40,295,114 - 40,295,114

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Support services—student (pupil) 31,596,486 - 31,596,486
Debt service 15,247,506 - 15,247,506

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Fundraising 1,394,453 - 1,394,453
Total support services 102,435,749 - 102,435,749
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Total expenses 248,709,781 - 248,709,781
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Gain on disposal of assets 240,767 - 240,767


Loss on disposal of assets (128) - (128)
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Change in net assets (332,064) 21,031,725 20,699,661


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Net assets at beginning of year 772,015 75,451,236 76,223,251


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Net assets at end of year $ 439,951 $ 96,482,961 $ 96,922,912


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See notes to consolidated financial statements.


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IDEA Public Schools, Inc.

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Exhibit A-3 Consolidated Statements of Cash Flows

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Years Ended June 30, 2017 and 2016

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2017 2016
Cash flows from operating activities:

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Change in net assets $ 18,581,010 $ 20,699,661
Adjustments to reconcile change in net assets to net cash provided by

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operating activities:

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Depreciation and amortization 13,362,889 12,176,565
Allowance for doubtful accounts 490,041 698,848

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Extinguishment of debt 8,429,223 -
Gain on disposal of assets - (240,767)
Loss on disposal of assets - 128

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Changes in current assets and liabilities:

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Due from government agencies (4,394,157) (4,592,831)
Other receivables (905,299) 425,997

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Inventories 10,949 (53,082)
Prepaid expenses (1,199,406) 143,392

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Other current assets (181,441) 82,340
Accounts payable 4,326,467 8,085,543
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Accrued wages payable 4,536,979 2,651,770
Accrued payroll expenses 737,839 1,666,743
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Accrued interest payable 1,179,345 1,308,270


Accrued expenses (3,937,322) 431,790
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Deferred revenues 785,451 1,324,376


Other liabilities 780,679 (38,565)
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Net cash provided by operating activities 42,603,247 44,770,178

Cash flows from investing activities:


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Construction and purchase of property and equipment (128,293,319) (100,829,376)


Purchase of certificate of deposit (4,000,000) -
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Proceeds from certificate of deposit 134,742 (68)


Proceeds from disposal of property and equipment - 788,702
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Investment in notes receivable from graduates (490,041) (698,848)


Net cash used in investing activities (132,648,618) (100,739,590)
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Cash flows from financing activities:


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Proceeds from borrowings of long-term debt 132,430,692 86,281,474


Principal payments on long-term debt (31,540,260) (10,611,892)
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Payment to escrow for extinguishment of debt, net (2,054,488) -


Net cash provided by financing activities 98,835,944 75,669,582
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Net increase in cash and cash equivalents 8,790,573 19,700,170


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Cash and cash equivalents at beginning of year 143,835,128 124,134,958


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Cash and cash equivalents at end of year $ 152,625,701 $ 143,835,128


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(Continued)

14
IDEA Public Schools, Inc.

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Exhibit A-3 Consolidated Statements of Cash Flows (Continued)

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Years Ended June 30, 2017 and 2016

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2017 2016

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Cash and cash equivalents $ 96,034,815 $ 80,454,187
Cash and cash equivalents—restricted 29,114,610 24,923,115

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Cash and cash equivalents—noncurrent—restricted 27,476,276 38,457,826

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Total cash and cash equivalents $ 152,625,701 $ 143,835,128

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Supplemental disclosures of cash flow information:
Cash paid for interest $ 20,774,183 $ 17,805,065

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Accrued liabilities related to the purchase of property and equipment $ 12,576,024 $ 15,647,171

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Proceeds deposited into escrow for purposes of refunding bonds $ 44,043,157 $ -

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Retirement of existing bonds from escrow tri $ (36,670,000) $ -

See notes to consolidated financial statements.


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15
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This Page Intentionally Left Blank. k
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IDEA Public Schools, Inc.

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Notes to Consolidated Financial Statements

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Note 1. Organization and Significant Accounting Policies
Organization: IDEA Public Schools, Inc. (charter holder known as IDEA Academy, Inc.) is a not-for-profit
Texas corporation formed in June 2000. IDEA Public Schools (the School) operates and does business

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as Individuals Dedicated to Excellence and Achievement (IDEA) Public Schools. The School is a state
authorized, open enrollment charter school. The Contract for Charter granted by the State Board of

a
Education of the state of Texas pursuant to Chapter 12 of the Texas Education Code is effective until

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July 2025. The School provides educational services to students in grades Pre-K through 12.

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IDEA Public Schools, Inc. operated only a single charter school, IDEA Public Schools, and conducted
other noncharter activities for the fiscal year ended June 30, 2017, with and through IPS Enterprises,
LLC, which is a separate domestic single-member nonprofit limited liability company, wholly owned and

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governed by its sole member, IDEA Public Schools, and appointed managers for IPS Enterprises, LLC.

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IPS Enterprises, LLC is a disregarded entity for federal tax purposes. IPS Enterprises LLP is
consolidated since IDEA has a direct controlling interest in IPS Enterprises LLP through ownership.

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Adopted accounting pronouncement:

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Debt issuance costs: In April 2015, the Financial Accounting Standards Board (FASB) issued
Accounting Standards Update (ASU) No. 2015‐03, Interest—Imputation of Interest (Subtopic 835-30):
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Simplifying the Presentation of Debt Issuance Costs. The amendments in this ASU require that debt
issuance costs related to a recognized debt liability be presented in the balance sheet as a direct
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deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition
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and measurement guidance for debt issuance costs are not affected by the amendments in this ASU. The
School has adopted this accounting pronouncement effective July 1, 2016. Bond issuance costs were
reclassified from other assets to long-term liabilities on the statement of financial position.
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Recent accounting pronouncements:


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Leases: In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The guidance in this
ASU supersedes the current leasing guidance. Under the new guidance, lessees are required to
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recognize lease assets and lease liabilities on the balance sheet for all leases with terms longer than
12 months. Leases will be classified as either finance or operating, with classification affecting the pattern
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of expense recognition in the statement of income. The new standard is effective for fiscal years
beginning after December 15, 2019, including interim periods within those fiscal years. A modified
retrospective transition approach is required for lessees for capital and operating leases existing at, or
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entered into after, the beginning of the earliest comparative period presented in the financial statements,
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with certain practical expedients available. The School is currently evaluating the impact of its pending
adoption of the new standard on its financial statements.
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Revenue recognition: In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with
Customers (Topic 606), requiring an entity to recognize the amount of revenue to which it expects to be
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entitled for the transfer of promised goods or services to customers. The updated standard will replace
most existing revenue recognition guidance in accounting principles generally accepted in the United
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States of America (U.S. GAAP) when it becomes effective and permits the use of either a full
retrospective or retrospective with cumulative effect transition method. In August 2015, the FASB issued
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ASU No. 2015-14, which defers the effective date of ASU No. 2014-09 one year, making it effective for
annual reporting periods beginning after December 15, 2018. The School has not yet selected a
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transition method and is currently evaluating the effects the standard will have on its consolidated
financial statements.

17
IDEA Public Schools, Inc.

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Notes to Consolidated Financial Statements

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Note 1. Organization and Significant Accounting Policies (Continued)
Presentation of financial statements: In August 2016, the FASB issued ASU No. 2016-14, Not-for-
Profit Entities (Topic 958): Presentation of Financial Statements of Not-for-Profit Entities. This guidance

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amends the requirements for financial statements and notes presented by a not-for-profit entity to:
(a) present on the face of the statement of financial position amounts for two classes of net assets at the

a
end of the period, rather than for the currently required three classes; (b) present on the face of the

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statement of activities the amount of the change in either of the two classes of net assets rather than that
of the currently required three classes; (c) provide enhanced disclosures in the notes to the financial

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statements; (d) report investment return net of external and direct internal investment expenses and
(e) utilize, in the absence of explicit donor stipulations, the placed-in-service approach for reporting
expirations of restrictions on gifts of cash or other assets to be used to acquire or construct a long-lived

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asset. The ASU will be effective for the School for the year ending December 31, 2018. Early application

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is permitted. Retrospective application is required for many provisions of this guidance. The School is
currently evaluating the impact of the pending adoption of the new standard on its consolidated financial

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statements.

Basis of presentation: The consolidated financial statements include the accounts of the School and

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wholly-owned IPS Enterprises, LLC. Intercompany transactions are eliminated in the consolidation
process.
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The financial statements of the School have been prepared in conformity with U.S. GAAP. The FASB is
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the accepted standard-setting body for establishing not-for-profit accounting and financial reporting
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principles. The more significant of the School’s accounting policies are described below.

The accompanying financial statements have been prepared on the accrual basis of accounting in
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accordance with U.S. GAAP.

Net assets and revenues, expenses, gains and losses are classified based on the existence or absence
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of donor-imposed restrictions. Accordingly, net assets of the School and changes therein are classified
and reported as follows.
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Unrestricted: Unrestricted net assets are not subject to donor-imposed stipulations.


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Temporarily restricted: Temporarily restricted net assets are those resources subject to donor-imposed
restrictions that will be satisfied by the actions of the School or the passage of time. As of June 30, 2017
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and 2016, temporarily restricted net assets represent the net assets of the food service fund, which must
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be used for future food service activities; state funds that may be used in the following fiscal year and any
unspent state foundation, campus activity and Race to the Top monies.
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Permanently restricted: Permanently restricted net assets are those resources subject to donor-
imposed restriction that will be maintained permanently by the School. The donors of these resources
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require that the principal be invested in perpetuity and permit the income earned, including unrealized
appreciation, to be used, all or in part, for unrestricted or temporarily restricted purposes. As of June 30,
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2017 and 2016, the School had no permanently restricted net assets.
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Cash and cash equivalents: For financial statement purposes, the School considers all highly liquid
investments with an original maturity of three months or less to be cash equivalents.
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Restricted cash: Restricted cash is limited as to use under the terms of the bond indenture. The current
and long term portion of restricted cash represents amounts restricted for construction activity and debt
service requirements for bonds.

18
IDEA Public Schools, Inc.

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Notes to Consolidated Financial Statements

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Note 1. Organization and Significant Accounting Policies (Continued)
Due from government agencies: The School considers all government grants and contracts to be
contributions. The School recognizes revenue from governmental grants and contracts, as eligible

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expenditures are incurred. Advances from government agencies are recorded as deferred revenues if the
monies are conditioned on an action or future event. Eligible expenditures incurred in excess of grant

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fund reimbursements are recorded as receivables.

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Any of the funding sources may, at their discretion, request reimbursement for expenses or return of

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funds, or both, as a result of any noncompliance with the terms of the grant or contract.

Other receivables: The School’s other receivables primarily represents E-rate and other receivables.

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The allowance for doubtful accounts is established as losses are estimated to have occurred through a

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provision for bad debts charged to earnings. Losses are charged against the allowance when
management believes the uncollectibility of a receivable is confirmed. Subsequent recoveries, if any, are

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credited to the allowance. The School considers accounts receivable to be fully collectible; accordingly,
no allowance for doubtful accounts is recorded in these financial statements.

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Investments: Investments are stated at fair value based upon quoted market prices, when available, or
estimates of fair value in the statements of financial position. Unrealized gains and losses are included in
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the statements of activities.
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Inventories: Inventories are stated at the lower of cost (first-in, first-out method) or market (net realizable
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value).

Notes receivable: Notes receivable represents loans from nonpublic fund sources to graduates of the
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School that are enrolled in college. The loans are interest free with principal due six months after
graduation from college or immediately upon withdrawal from college. Outstanding notes receivable at
June 30, 2017 and 2016, totaled $1,804,651 and $1,314,610, respectively. The School considers notes
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receivable to be fully uncollectible; accordingly, an allowance for doubtful accounts of $1,804,651 and
$1,314,610 at June 30, 2017 and 2016, respectively, is recorded in these financial statements.
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Revenue recognition: Capitation received, including base capitation, entitlements and special services,
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is recognized in the period services are provided. Revenues from the state of Texas are earned based on
reported attendance. Public and private grants received are recognized in the period received and when
the terms of the grant are met. If public and private grant terms are not met revenues are reimbursed to
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funder. Conditional promises to give are contingent upon the School meeting certain criteria specified by
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the donors. Revenue from conditional promises to give are not recognized until the condition has been
fulfilled, advances received from donors are recorded as deferred revenues until the conditional has been
fulfilled.
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The School’s policy is to report restricted support as temporarily restricted regardless of whether or not
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the restrictions are met within the same fiscal year.


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Depreciation and amortization: Property and equipment are stated at cost. Assets held under capital
leases are recorded at the lower of the net present value of the minimum lease payments or the fair value
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of the leased asset at the inception of the lease. Amortization expense is computed using the straight-line
method over the shorter of the estimated useful lives of the assets or the period of the related lease.
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Amortization of leasehold improvements is computed using the straight-line method over the shorter of
the remaining lease term or the estimated useful lives of the improvements.

19
IDEA Public Schools, Inc.

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Notes to Consolidated Financial Statements

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Note 1. Organization and Significant Accounting Policies (Continued)
Depreciation and amortization are calculated on the straight-line method based on the following estimated
useful lives of the respective assets:

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Estimated

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Asset Classification Useful Lives

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Buildings and improvements 10-30 years
Leasehold improvements 5-15 years
Vehicles 5 years

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Furniture and equipment 3-10 years

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Capitalized interest: Interest expense during the construction period is capitalized as part of the cost of

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property and equipment. Capitalized interest for the year ended June 30, 2017 and 2016, totaled
$3,220,196 and $3,738,466, respectively.

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Impairment of long-lived assets: The School reviews the carrying value of property and equipment for
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impairment whenever events and circumstances indicate the carrying value of an asset may not be
recoverable from the estimated future cash flows expected to result from its use and eventual disposition.
In cases where undiscounted expected future cash flows are less than the carrying value, an impairment
is

loss is recognized equal to an amount by which the carrying value exceeds the fair value of assets. The
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factors considered by management in performing this assessment include current operating results,
trends and prospects and the effects of obsolescence, demand, competition and other economic factors.
The School did not recognize an impairment loss during the years ended June 30, 2017 and 2016.
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Functional allocation of expenses: The costs of providing various programs and activities have been
summarized on a functional basis in the statements of activities and changes in net assets. Accordingly,
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certain costs have been allocated among the programs and supporting services benefited.
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Donated services and assets: Contributions of donated services that create or enhance nonfinancial
assets or that require specialized skills that are provided by individuals possessing those skills and that
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would typically need to be purchased if not provided by donation are recorded at the estimated fair market
value in the period received.
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Contributions of donated noncash assets are recorded at the estimated fair market value in the period
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received.

Federal income taxes: The School is a nonprofit organization and is exempt from federal income taxes
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under section 501(c)(3) of the Internal Revenue Code, except to the extent it has unrelated business
income. The School files a Form 990 (Return of Organization Exempt from Income Tax) and, if applicable,
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unrelated business income (UBI) is reported on Form 990-T. Management has evaluated its material tax
positions, which include such matters as the tax exempt status of the School and, if applicable, potential
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sources of UBI. As of June 30, 2017 and 2016, there were no uncertain tax benefits. No such provision
has been made in the accompanying financial statements.
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Use of estimates: The preparation of financial statements in conformity U.S. GAAP requires
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management to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period. Actual results could differ from
those estimates.

20
IDEA Public Schools, Inc.

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Notes to Consolidated Financial Statements

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Note 1. Organization and Significant Accounting Policies (Continued)
Advertising costs: The School expenses advertising costs when they are incurred. Advertising costs for
the years ended June 30, 2017 and 2016, totaled $1,918,062 and $1,318,784, respectively.

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Subsequent events: The School has evaluated subsequent events that occurred after June 30, 2017,

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through the date of this report on August 25, 2017. Any material subsequent events that occurred during

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this time have been properly recognized or disclosed in the financial statements.

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Note 2. Fair Value Measurements and Disclosures
The requirements of Fair Value Measurements and Disclosures of the FASB Accounting Standards

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Codification (ASC) apply to all financial instruments and all nonfinancial assets and nonfinancial liabilities

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that are being measured and reported on a fair value basis. Fair value is defined as the price that would
be received to sell an asset or paid to transfer a liability in an orderly transaction between market

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participants at the measurement date. Fair Value Measurements and Disclosures also establishes a fair
value hierarchy that prioritizes the inputs used in valuation methodologies into the following three levels.

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Level 1: Inputs are unadjusted quoted prices in active markets for identical assets or liabilities.
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Level 2: Inputs are observable, other than Level 1 prices, such as quoted prices for similar assets or
liabilities, or other inputs that can be corroborated by observable market data for substantially the full term
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of the assets or liabilities.


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Level 3: Inputs are unobservable and are supported by little or no market activity and are significant to
the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose
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value is determined using pricing models, discounted cash flow methodologies, or other valuation
techniques, as well as instruments for which the determination of fair value requires significant
management judgment or estimation.
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The School did not have any investments that are required to be measured at fair value.
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Financial instruments: The fair value of the School’s cash and cash equivalents, due from government
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agencies, payables, prepaid expenses and other receivables approximates the carrying amounts of such
instruments due to their short-term maturity. The fair value of the debt approximates the carrying amount
because the rate and terms currently available to the School approximate the rate and terms on the
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existing debt.
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There have been no changes in valuation techniques used for any assets or liabilities measured at fair
value during the years ended June 30, 2017 and 2016.
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21
IDEA Public Schools, Inc.

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Notes to Consolidated Financial Statements

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Note 3. Cash and Cash Equivalents
Cash and cash equivalents consist of the following:

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June 30
2017 2016

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Petty cash $ 216 $ 248

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Checking accounts 86,007,936 80,442,661
Money market accounts 66,617,549 63,392,219
$ 152,625,701 $ 143,835,128

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Cash and cash equivalents were temporarily restricted as follows:

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June 30
2017 2016

Construction ct $ 27,044,071 $ 35,238,906


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Debt service requirements for bonds 29,546,815 28,142,035
56,590,886 63,380,941
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Less current cash and cash equivalents—restricted 29,114,610 24,923,115


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Cash and cash equivalents—noncurrent—restricted $ 27,476,276 $ 38,457,826


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Note 4. Concentration of Credit Risk


The School maintains its cash deposits at Wells Fargo, Public Funds Administration and, at June 30,
2017 and 2016, is insured up to $250,000 and $384,743, respectively, by the Federal Deposit Insurance
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Corporation. Investment securities held by Wells Fargo that had a carrying value at June 30, 2017 and
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2016, of $93,938,666 and $89,619,325, respectively, were pledged as collateral to secure public funds on
deposit.
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The School maintains proceeds received from the sale of bonds at Regions Bank, Corporate Trust
Services in fiduciary accounts. The Office of the Comptroller of the Currency, Regulation 9, requires that
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banks collateralize uninvested cash in fiduciary accounts. At June 30, 2017 and 2016, assets held by
Regions Bank were pledged as collateral as a whole for all Regions Bank fiduciary accounts to secure
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fiduciary funds held in trust.


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The School has not experienced any losses on these accounts, and management believes it is not
exposed to any significant credit risk on the excess amounts.
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22
IDEA Public Schools, Inc.

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Notes to Consolidated Financial Statements

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Note 5. Certificates of Deposit
Certificates of deposit consist of the following:

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June 30
2017 2016

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Certificate of deposit; maturing June 15, 2018;

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interest at 1.25% $ 1,000,000 $ -

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Certificate of deposit; maturing June 15, 2018;
interest at 0.60% 1,000,000 -
Certificate of deposit; maturing June 16, 2018;

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interest at 0.75% 1,000,000 -

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Certificate of deposit; maturing June 15, 2018;
interest at 0.75% 1,000,000 -

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Certificate of deposit; maturing August 31, 2016;
interest at 0.05% - 134,743

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tri $ 4,000,000 $ 134,743

Interest income for the years ended June 30, 2017 and 2016, totaled $9,765 and $68, respectively.
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Note 6. Due From Government Agencies


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Amounts due from government agencies consist of the following:


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June 30
2017 2016
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Texas Department of Education, Texas Education Agency (TEA) $ 36,941,148 $ 32,671,260


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United States Department of Education 1,361,917 1,887,286


United States Department of Education passed through TEA 1,085,839 525,413
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United States Department of Agriculture passed through TEA 413,107 323,895


$ 39,802,011 $ 35,407,854
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23
IDEA Public Schools, Inc.

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Notes to Consolidated Financial Statements

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Note 7. Property and Equipment
Property and equipment consist of the following:

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June 30, Deductions June 30,

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2016 Additions and Transfers 2017

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Land and improvements $ 37,731,129 $ 14,183,061 $ (2,003,401) $ 49,910,789

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Buildings and improvements 244,580,903 1,137,883 97,477,246 343,196,032
Leasehold improvements 2,913,247 26,017 - 2,939,264
Vehicles 8,934,259 1,742,451 - 10,676,710

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Furniture and equipment 7,155,518 2,128,162 2,231,939 11,515,619

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Construction in progress 114,514,317 109,075,745 (97,705,784) 125,884,278
415,829,373 128,293,319 - 544,122,692

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Less accumulated depreciation
and amortization 46,141,058 16,787,014 62,928,072
$ 369,688,315 $ 111,506,305 $ - $ 481,194,620

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Depreciation and amortization expense for the years ended June 30, 2017 and 2016, totaled $16,787,014
and $12,338,214, respectively.
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Capitalized property and equipment acquired with public funds received by the School constitute public
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property pursuant to Chapter 12 of the Texas Education Code. These assets are specifically identified on
the schedule of capital assets for the individual charter school.
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Note 8. Bonds Payable


Bonds payable consist of the following:
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June 30, 2016 Retirements Additions June 30, 2017


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Series 2007 A $ 2,660,000 $ (850,000) $ - $ 1,810,000


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Series 2009 A and B 27,625,000 (14,050,000) - 13,575,000


Series 2010 A and B 31,665,000 (24,000,000) - 7,665,000
Series 2010 Q 7,555,000 - - 7,555,000
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Series 2011 25,555,000 (485,000) - 25,070,000


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Series 2012 57,505,000 (1,150,000) - 56,355,000


Series 2013 62,130,000 (945,000) - 61,185,000
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Series 2014 90,600,000 (1,050,000) - 89,550,000


Series 2015 70,885,000 - - 70,885,000
Series 2016 A - - 99,025,000 99,025,000
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Series 2016 B - - 18,190,000 18,190,000


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376,180,000 $ (42,530,000) $ 117,215,000 450,865,000


Less current portion 5,860,000 7,315,000
Net long-term bonds
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payable $ 370,320,000 $ 443,550,000


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24
IDEA Public Schools, Inc.

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Notes to Consolidated Financial Statements

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Note 8. Bonds Payable (Continued)
Interest expense for the years ended June 30, 2017 and 2016, totaled $21,645,040 and $18,792,810,
respectively. Capitalized interest for the years ended June 30, 2017 and 2016, totaled $3,220,196 and

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$3,738,466, respectively.

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The Series 2010 Q bonds tax credit interest subsidy for the years ended June 30, 2017 and 2016, totaled

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$386,358 and $385,528, respectively, and is reflected in local support, other revenues in the statements
of activities.

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Series 2007 A bonds: On June 6, 2007, the School issued $36,930,000 of Education Revenue Bonds,
Series 2007 A, and $165,000 of Taxable Education Revenue Bonds, Series 2007 B. Proceeds of the

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bonds were for construction and future debt service. The School paid an insurance premium of $722,942

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to ACA Financial Guaranty Corporation to issue a bond insurance policy related to the bonds.

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As part of the Series 2014 bonds issuance, the School called and defeased $29,340,000 of Series
2007 A, Education Revenue Bonds. The Series 2007 A bonds mature serially each August 15, starting
2015 through 2018, with a stated interest rate ranging from 4.125 percent to 4.250 percent. As a result of

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the defeasance, the School is no longer required to maintain a bond insurance policy related to the
Series 2007 A bonds.
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The School is required to maintain a debt service reserve fund, which currently is equal to the maximum
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annual principal and interest requirements of the 2007 bonds. The Series 2007 A bonds are subject to
.D

optional redemption in whole or in part on August 15, 2017.

Series 2009 A and B bonds: On December 10, 2009, the School issued $29,105,000 of Education
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Revenue Bonds, Series 2009 A, and $520,000 of Taxable Education Revenue Bonds, Series 2009 B.
Proceeds of the bonds were for construction and future debt service.
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As part of the Series 2016 bonds issuance, the School called and defeased $13,495,000 of
Series 2009 A, Education Revenue Bonds. The Series 2009 A bonds mature serially each August 15,
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starting 2014 through 2032, with a stated interest rate ranging from 4.76 percent to 6.50 percent. The
Series 2009 B bonds mature serially each August 15, starting 2012 through 2014, with a stated interest
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rate ranging from 5.75 percent to 6.05 percent.

The School is required to maintain a debt service reserve fund, which currently is equal to the maximum
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annual principal and interest requirements of the 2009 bonds. The Series 2009 A bonds are subject to
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optional redemption in whole or in part on August 15, 2019.

Series 2010 A, B and Q bonds: On December 7, 2010, the School issued $33,780,000 of Education
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Revenue Bonds, Series 2010 A; $120,000 of Taxable Education Revenue Bonds, Series 2010 B; and
$7,555,000 of Qualified School Construction Bonds—Direct Pay, Series Q. Proceeds of the bonds were
ia

for construction and future debt service.


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As part of the Series 2016 bonds issuance, the School called and defeased $23,175,000 of
Series 2010 A, Education Revenue Bonds. The Series 2010 A bonds mature serially each August 15,
of

starting 2020 through 2024, with a stated interest rate ranging from 5.125 percent to 5.750 percent. The
Series 2010 B bonds matured August 15, 2014, with a stated interest rate of 7.500 percent.
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The Series Q bonds mature August 15, 2029, with a stated interest rate of 8.25 percent. Interest on the
Series A, B and Q bonds is due semiannually on February 15 and August 15.

25
IDEA Public Schools, Inc.

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Notes to Consolidated Financial Statements

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Note 8. Bonds Payable (Continued)
The School is required to maintain a debt service reserve fund, which currently is equal to the maximum
annual principal and interest requirements of the 2010 bonds. The Series 2010 A bonds are subject to

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optional redemption in whole or in part on August 15, 2020.

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The Series 2010 Q bonds have been designated as “qualified schools construction bonds” pursuant to

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section 54F of the Internal Revenue Code of 1986, as amended (the Code) and are subject to an
irrevocable election to treat such bonds as “specified tax credit bonds” pursuant to section 6431(f) of the

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Code.

Series 2011 bonds: On December 8, 2011, the School issued $26,480,000 of Education Revenue

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Bonds, Series 2011. Proceeds of the bonds were for construction and future debt service. The

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Series 2011 bonds mature serially each August 15, starting 2015 through 2041, with a stated interest rate
ranging from 3.20 percent to 5.75 percent.

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The School is required to maintain a debt service reserve fund, which currently is equal to the maximum
annual principal and interest requirements of the 2011 bonds. The Series 2011 bonds are subject to
optional redemption in whole or in part on August 15, 2021.
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Series 2012 bonds: On August 17, 2012, the School issued $59,730,000 of Education Revenue Bonds,
Series 2012. Proceeds of the bonds were for construction and future debt service. The Series 2012
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bonds mature serially each August 15, starting 2015 through 2042, with a stated interest rate ranging
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from 2.15 percent to 5.00 percent.

The School is required to maintain a debt service reserve fund, which currently is equal to the maximum
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annual principal and interest requirements of the 2012 bonds. The Series 2012 bonds are subject to
optional redemption in whole or in part on August 15, 2022.
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Series 2013 bonds: On October 16, 2013, the School issued $63,025,000 of Education Revenue Bonds,
Series 2013. Proceeds of the bonds were for construction, future debt service and repayment of the
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multiple draw term notes payable to Regions Bank. The Series 2013 bonds mature serially each
August 15, starting 2015 through 2043, with a stated interest rate ranging from 5 percent to 6 percent.
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The School is required to maintain a debt service reserve fund, which currently is equal to the maximum
annual principal and interest requirements of the 2013 bonds. The Series 2013 bonds are subject to
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optional redemption in whole or in part on August 15, 2023.


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Series 2014 bonds: On October 1, 2014, the School issued $90,600,000 of Education Revenue and
Refunding Bonds, Series 2014. Proceeds of the bonds were for construction, future debt service and
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repayment of the multiple draw term notes payable to Regions Bank. The Series 2014 bonds mature
serially each August 15, starting 2016 through 2044, with a stated interest rate ranging from 2 percent to
ia

5 percent.
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As part of this issuance, the School called and defeased $29,340,000 of Series 2007 A, Education
Revenue Bonds, which resulted in a noncash loss of extinguishment of debt of $4,293,652. As a result of
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this defeasance, the School will realize a total decrease in debt service payments of $3,155,343, net of
refunding expenses, which resulted in an economic gain of $2,147,481.
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The School is required to maintain a debt service reserve fund, which currently is equal to the maximum
annual principal and interest requirements of the 2014 bonds. The Series 2014 bonds are subject to
optional redemption in whole or in part on August 15, 2024.

26
IDEA Public Schools, Inc.

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Notes to Consolidated Financial Statements

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Note 8. Bonds Payable (Continued)
Series 2015 bonds: On October 1, 2015, the School issued $70,885,000 of Education Revenue Bonds,
Series 2015. Proceeds of the bonds were for construction, future debt service, and repayment of the

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multiple draw term notes payable to Regions Bank. The Series 2015 bonds mature serially each
August 15, starting 2017 through 2045, with a stated interest rate ranging from 3 percent to 5 percent.

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The School is required to maintain a debt service reserve fund, which currently is equal to the maximum
annual principal and interest requirements of the 2015 bonds. The Series 2015 bonds are subject to

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optional redemption in whole or in part on August 15, 2025.

Series 2016 A bonds: On September 1, 2016, the School issued $99,025,000 of Education Revenue

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and Refunding Bonds, Series 2016 A. Proceeds of the bonds were for construction, future debt service,

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and repayment of the multiple draw term notes payable to Regions Bank. The Series 2016 A bonds
mature serially each August 15, starting 2017 through 2046, with a stated interest rate ranging from

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2 percent to 5 percent.

As part of this issuance, the School called and defeased $13,495,000 of Series 2009 A, Education

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Revenue Bonds and $23,175,000 of Series 2010 A, Education Revenue Bonds which resulted in a
noncash loss of extinguishment of debt of $8,429,223. As a result of this defeasance, the School will
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realize a total decrease in debt service payments of $16,209,572, net of refunding expenses, which
resulted in an economic gain of $8,789,599.
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The School is required to maintain a debt service reserve fund, which currently is equal to the maximum
annual principal and interest requirements of the 2016 A bonds. The Series 2016 A bonds are subject to
optional redemption in whole or in part on August 15, 2026.
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Series 2016 B bonds: On October 1, 2016, the School issued $18,190,000 of Education Revenue
Bonds, Series 2016 B. Proceeds of the bonds were for construction, future debt service. The
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Series 2016 B bonds mature serially each August 15, starting 2018 through 2028, with a stated interest
rate ranging from 2 percent to 5 percent.
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The School is required to maintain a debt service reserve fund, which currently is equal to the maximum
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annual principal and interest requirements of the 2016 B bonds. The Series 2016 B bonds are subject to
optional redemption in whole or in part on August 15, 2026.
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Covenants: All bond loan agreements establish a debt service coverage ratio, which stipulates that
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available revenues for each fiscal year (without excluding any discretionary expense actually incurred in
such fiscal year) must be equal to at least 1.10 times the annual debt service requirements of the School
as of the end of the first fiscal year after the date of issuance of the bonds and thereafter until the bonds
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have been paid in full. Management believes the School was in compliance with this covenant and all
other applicable covenants contained in the loan agreements during the years ended June 30, 2017 and
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2016.
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27
IDEA Public Schools, Inc.

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Notes to Consolidated Financial Statements

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Note 8. Bonds Payable (Continued)
Debt service requirements for bonds payable for the year ended June 30, 2017, are as follows:

L.
Tax Credit
Principal Interest Subsidy Totals

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Years ending June 30:

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2018 $ 7,315,000 $ 22,214,379 $ (414,769) $ 29,114,610

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2019 8,305,000 21,896,361 (414,769) 29,786,592
2020 9,285,000 21,524,333 (414,769) 30,394,564
2021 9,720,000 21,092,994 (414,769) 30,398,225

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2022 10,190,000 20,625,914 (414,769) 30,401,145

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Thereafter 406,050,000 258,884,806 (2,190,647) 662,744,159
$ 450,865,000 $ 366,238,787 $ (4,264,492) $ 812,839,295

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Note 9. Notes Payable
Notes payable consist of the following: ct
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June 30
2017 2016
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A multiple draw term note payable to Regions Commercial


Equipment Finance, LLC, in the original amount equal to,
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or less than, $30,000,000 during the draw period; requiring


semiannual payments of interest on the 15th day of February
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and August of each calendar year; beginning August 15,


2017, and continuing regularly and semiannually thereafter at
monthly LIBOR plus 2.40%. The note is secured by a first and
prior lien and security interest on any real property securing
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the Master Indenture and any other security pledged. The note
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is subject to various restrictive covenants, with which management


believes the School was in compliance as of June 30, 2017.
Subsequent to fiscal year end, on July 26, 2017 the note was
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refinanced and repaid in full (see Note 20). $ 14,951,921 $ -


A term note payable to Frost Bank in the original amount of
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$2,500,000; maturing February 1, 2027; requiring monthly


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payments of principal and interest, including interest at


4.83% through February 1, 2027. This note is unsecured and
subordinate to all other debt obligations of the School. 2,443,572 -
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IDEA Public Schools, Inc.

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Notes to Consolidated Financial Statements

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Note 9. Notes Payable (Continued)
June 30
2017 2016

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A multiple draw term note payable to Regions Commercial
Equipment LLC, in the original amount equal to, or less than,

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$20,000,000 during the draw period; requiring semiannual

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payments of interest on the 15th day of February and August of
each calendar year; beginning February 15, 2015, and continuing

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regularly and semiannually thereafter at monthly LIBOR plus 2.40%
through the earlier of the issuance by the School of additional
bonds or November 12, 2017. The note is secured by a first and

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prior lien and security interest on any real property securing the

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Master Indenture and any other security pledged. The note is subject
to various restrictive covenants, with which management believes the

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School was in compliance as of June 30, 2017 and 2016. $ - $ 7,369,510
A term note payable to Wells Fargo Equipment Finance, Inc. in
the original amount of $337,600; maturing July 26, 2018;

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requiring monthly payments of principal and interest, including
interest at 3.15% through July 26, 2018. This note is secured
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by the corresponding buses acquired. 135,087 246,995
A term note payable to Wells Fargo Equipment Finance, Inc. in
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the original amount of $1,372,600; maturing July 10, 2018;


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requiring monthly payments of principal and interest, including


interest at 3.15% through July 10, 2018. This note is secured
by the corresponding buses acquired. 510,667 966,852
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A term note payable to Charter Fund, Inc. in the original amount


of $400,000; maturing June 30, 2018; with a $400,000 balloon
payment at the end of the term, including interest at 1.00%
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through June 30, 2018. This note is unsecured and subordinate


to all other debt obligations of the School. 400,000 400,000
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A term note payable to Charter Fund, Inc. in the original amount


of $500,000; maturing June 30, 2019; with a $500,000 balloon
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payment at the end of the term, including interest at 1.00%


through June 30, 2019. This note is unsecured and subordinate
to all other debt obligations of the School. 500,000 500,000
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A term note payable to Charter Fund, Inc. in the original amount


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of $100,000; maturing June 30, 2019; with a $100,000 balloon


payment at the end of the term, including interest at 1.00%
through June 30, 2019. This note is unsecured and subordinate
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to all other debt obligations of the School. 100,000 100,000


19,041,247 9,583,357
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Less current portion 15,160,929 7,937,603


$ 3,880,318 $ 1,645,754
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IDEA Public Schools, Inc.

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Notes to Consolidated Financial Statements

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Note 9. Notes Payable (Continued)
The future minimum payments for notes payable as of June 30, 2017, are as follows:

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Years ending June 30:
2018 $ 15,160,929

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2019 1,849,788

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2020 221,906

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2021 233,276
2022 244,960
Thereafter 1,330,388

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$ 19,041,247

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Interest expense for the years ended June 30, 2017 and 2016, totaled $175,927 and $120,920,

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respectively. There was no capitalized interest for the years ended June 30, 2017 and 2016.

Note 10. Capital Leases Payable


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Capital leases payable consist of the following:
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June 30
2017 2016
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Buildings:
Capital lease payable to Regions Commercial Equipment,
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LLC in the original amount of $2,952,500, requiring monthly


payments in the amount of $29,809, including interest at
3.94% through September 2026; secured by the corresponding
portable buildings acquired. $ 2,769,074 $ -
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A multiple draw capital lease payable to Regions Commercial


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Equipment, LLC in the original amount equal to or less than


$2,913,104, during the draw period requiring monthly
payments of interest at LIBOR plus 1.67% through the draw
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period ending September 30, 2016; secured by the


corresponding portable buildings acquired. - 617,611
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Capital lease payable to RGV Professional, Ltd. in the original


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amount of $978,060, requiring monthly payments in the


amount of $11,866, including interest at 8.00% through
April 2017; secured by the corresponding building acquired. - 114,428
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Buses:
Capital lease payable to Regions Commercial Equipment,
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LLC in the original amount of $1,105,000, requiring monthly


payments in the amount of $14,636, including interest at
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3.07% through July 2023; secured by the corresponding


buses acquired. 973,431 -
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Capital lease payable to Regions Commercial Equipment,


LLC in the original amount of $270,000, requiring monthly
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payments in the amount of $7,742, including interest at


2.07% through July 2017; secured by the corresponding
buses acquired. 7,728 99,438
 

30
IDEA Public Schools, Inc.

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Notes to Consolidated Financial Statements

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Note 10. Capital Leases Payable (Continued)
June 30
2017 2016

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Buses: (continued)
Capital lease payable to Regions Commercial Equipment,

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LLC in the original amount of $286,000, requiring monthly

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payments in the amount of $8,200, including interest at
2.07% through July 2017; secured by the corresponding

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buses acquired. $ 8,186 $ 105,331
Capital lease payable to Regions Commercial Equipment,
LLC in the original amount of $192,000, requiring monthly

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payments in the amount of $5,505, including interest at

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2.07% through August 2017; secured by the corresponding
buses acquired. 10,982 76,085

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Capital lease payable to Regions Commercial Equipment,
LLC in the original amount of $112,000, requiring monthly
payments in the amount of $3,211, including interest at
2.07% through August 2017; secured by the corresponding
buses acquired. ct 6,406 44,383
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Capital lease payable to Regions Commercial Equipment,
LLC in the original amount of $484,000, requiring monthly
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payments in the amount of $13,878, including interest at


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2.07% through August 2017; secured by the corresponding


buses acquired. 27,684 191,799
Capital lease payable to Regions Commercial Equipment,
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LLC in the original amount of $138,000, requiring monthly


payments in the amount of $3,957, including interest at
2.07% through August 2017; secured by the corresponding
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buses acquired. 7,893 54,685


$ 3,811,384 $ 1,303,760
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The future minimum lease payments under the capital leases and the net present value of future
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minimum lease payments as of June 30, 2017, are as follows:

Years ending June 30:


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2018 $ 602,374
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2019 533,329
2020 533,329
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2021 533,329
2022 533,329
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Thereafter 1,710,496
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Total future minimum lease payments 4,446,186


Less amount representing interest 634,802
Present value of future minimum lease payments 3,811,384
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Less current portion 469,831


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Net long-term capital leases payable $ 3,341,553

Interest expense for the years ended June 30, 2017 and 2016, totaled $132,556 and $32,383,
respectively.

31
IDEA Public Schools, Inc.

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Notes to Consolidated Financial Statements

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Note 11. Long-Term Debt
Combined maturities for all long-term debt principal at June 30, 2017, are as follows:

L.
Capital
Bonds Notes Leases Total

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Payable Payable Payable Maturities

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Years ending June 30:

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2018 $ 7,315,000 $ 15,160,929 $ 469,831 $ 22,945,760
2019 8,305,000 1,849,788 415,708 10,570,496
2020 9,285,000 221,906 431,017 9,937,923

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2021 9,720,000 233,276 446,897 10,400,173

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2022 10,190,000 244,960 463,371 10,898,331
Thereafter 406,050,000 1,330,388 1,584,560 408,964,948

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$ 450,865,000 $ 19,041,247 $ 3,811,384 $ 473,717,631

Note 12. Deferred Revenues


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Deferred revenues consist of the following:
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June 30
.D

2017 2016

Michael & Susan Dell Foundation $ 625,000 $ -


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Brown Foundation 616,827 -


CREED Foundation 573,515 -
Rainwater Foundation 350,000 -
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Walton Foundation 98,200 -


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Miles Foundation 50,000 -


City Education Partners 3,115,540 2,111,009
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Choose to Succeed 669,082 1,316,890


KLE Foundation 601,166 1,040,213
Mays Family Foundation - 484,479
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Harvy Najim Foundation - 291,272


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Charter School Growth Fund 653,636 22,048


George W. Brakenridge Foundation 137,070 378,942
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Karen and Tom Hixon Fund - 100,105


Ewing Halsell Foundation - 789,452
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Louis Calder Foundation - 100,000


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Child Nutrition Program - 64,015


KNAPP Community Care Foundation - 6,160
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$ 7,490,036 $ 6,704,585
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32
IDEA Public Schools, Inc.

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Notes to Consolidated Financial Statements

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Note 13. Conditional Contributions
The School has conditional promises to give from philanthropic organizations as follows:

L.
June 30
2017 2016

a
lv
Charter School Growth Fund $ 14,000,000 $ -

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Walton Foundation $ 2,641,800 $ -
Michael & Susan Dell Foundation 375,000 -
CREED Foundation 9,000,000 -

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KLE Foundation 14,901,400 16,530,400

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Ewing Halsell Foundation 1,000,000 2,500,000
City Education Partners 506,665 2,310,924

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Louis Calder Foundation 100,000 200,000
Anonymous grant 100,000 250,000

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Karen and Tom Hixon Foundation 100,000 203,189
KNAPP Community Care Foundation - 71,875
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George W. Brakenridge Foundation - 300,000
$ 42,724,865 $ 22,366,388
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The future payments under the conditional promises to give from philanthropic organizations at June 30,
2017, are as follows:
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Years ending June 30:


2018 $ 13,247,465
2019 10,277,400
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2020 9,800,000
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2021 4,800,000
2022 2,800,000
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Thereafter 1,800,000
$ 42,724,865
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Payment is contingent upon the School meeting certain criteria specified by the donors. As the condition
for payment from the donors has not been met as of June 30, 2017, the amount has not been included in
these financial statements.
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IDEA Public Schools, Inc.

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Notes to Consolidated Financial Statements

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Note 14. Temporarily Restricted Net Assets
Temporarily restricted net assets consist of the following:

L.
June 30
2017 2016

a
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Child Nutrition Program $ 9,894,029 $ 7,962,714

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Summer Feeding Program 1,021 1,021
Race to the Top - 53,086
Najim Foundation 785,411 -

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Foundation School Program 102,413,073 87,481,431

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Campus Activity Funds 1,049,960 984,709
$ 114,143,494 $ 96,482,961

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Net assets released from donor restrictions by incurring expenses satisfying the purpose or time

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restrictions specified by donors are as follows: tri
Years Ended June 30
2017 2016
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Philanthropic grants $ 11,085,531 $ 5,209,807


Campus Activity Funds 3,397,078 3,257,413
Foundation School Program 240,512,897 191,820,633
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Instructional materials allotment 2,907,045 2,379,963


Other state programs 1,025,681 1,376,045
Federal programs 33,425,017 28,369,451
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Child Nutrition Program 20,752,131 14,959,764


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$ 313,105,380 $ 247,373,076
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Note 15. Pension Plan Obligations


Plan description: The School participates in the Teacher Retirement System of Texas (TRS), a public
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employee retirement system. TRS is a cost sharing, multiple-employer defined benefit plan with
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one exception: all risks and costs are not shared by the School, but are the liability of the state of Texas.
TRS provides service retirement and disability retirement benefits and death benefits to plan members
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and beneficiaries. TRS operates under the authority of provisions contained primarily in the Texas
Government Code, Title 8, Public Retirement Systems, Subtitle C, Teachers Retirement System of Texas,
which is subject to amendment by the Texas state legislature.
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TRS issues a publicly available financial report that includes financial statements and required
supplementary information for the defined benefit pension plan. The report may be obtained by writing to
the TRS Communications Department, 1000 Red River Street, Austin, Texas 78701, by calling the TRS
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Communications Department at 1-800-877-0123, or by downloading the report from the TRS Internet
website, www.trs.state.tx.us, under TRS Publications.
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34
IDEA Public Schools, Inc.

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Notes to Consolidated Financial Statements

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Note 15. Pension Plan Obligations (Continued)
Charter schools are entities legally separate from the state and each other. Assets contributed by
one charter or independent school district (ISD) may be used for the benefit of an employee of another

L.
ISD or charter. The risk of participating in multi-employer pension plans is different from single-employer
plans. Assets contributed to a multi-employer plan by one employer may be used to provide benefits to

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employees of other participating employers. If a participating employer stops contributing to the plan, the

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unfunded obligations of the plan may be borne by the remaining participating employers. There is no
withdrawal penalty for leaving the TRS system. There is no collective-bargaining agreement.

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Funding policy: Contribution requirements are not actuarially determined, but are established and
amended by the Texas state legislature. The state funding policy is as follows: (1) The state constitution

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requires the legislature to establish a member contribution rate of not less than 6.0 percent of the

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member’s annual compensation and a state contribution rate of not less than 6.0 percent and not more
than 10.0 percent of the aggregate annual compensation of all members of the system and (2) a state

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statute prohibits benefit improvements or contribution reductions if, as a result of a particular action, the
time required to amortize TRS’ unfunded actuarial liabilities would be increased to a period that exceeds
31 years, or if the amortization period already exceeds 31 years, the period would be increased by such

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action. Under provisions in Texas state law, plan members are required to contribute 7.7 percent and
7.2 percent of their annual covered salary for each of the years ended June 30, 2017 and 2016,
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respectively. The state’s contribution rate as a nonemployer contributing entity was 6.8 percent for the
years ended June 30, 2017 and 2016. The School’s employees’ contributions to TRS for the years ended
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June 30, 2017 and 2016, totaled $12,334,103 and $9,328,579, respectively, equal to the required
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contributions for each year. There have been no changes that would affect the comparison from year to
year.
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The School’s contribution rate was 6.8% for the years ended June 30, 2017 and 2016. Other
contributions made from federal and private grants and from the School totaled $4,038,482 and
$3,420,263 for the years ended June 30, 2017 and 2016, respectively. The School’s contributions into the
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plan do not represent more than 5.0% of the total contributions to the plan. The School’s participation in
the TRS plan for the year ended June 30, 2017, is outlined in the table below (ABO refers to the
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accumulation benefit obligation):


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Accumulation
Pension Total Plan Assets Benefit Obligation Percent Surcharge
Fund 2016 2016 Funded Imposed
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TRS $ 152,925,647,396 $ 171,797,150,487 78.00% No


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IDEA Public Schools, Inc.

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Notes to Consolidated Financial Statements

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Note 15. Pension Plan Obligations (Continued)
Supplemental retirement plans: The School offers a voluntary 403(b) plan for all employees to make
elective contributions to the plan. The School is not required to match any employee contributions and

L.
made no matching contributions for the years ended June 30, 2017 and 2016.

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The School has adopted an employer-paid 403(b) plan for eligible employees in top management

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positions to make elective contributions to this plan. The School provides a 1-to-1 match on employee
contributions up to 10 percent of the employee’s annual salary. Employer contributions to the plan totaled

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$259,470 and $111,367 for the years ended June 30, 2017 and 2016, respectively.

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Note 16. Operating Leases

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For the year ended June 30, 2017, future minimum payments on long-term noncancelable operating
leases are as follows:

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Years ending June 30:

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2018 $ 2,674,306
2019 1,849,339
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2020 791,265
2021 123,639
is

2022 86,400
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Thereafter 79,200
$ 5,604,149
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Rent expense for the years ended June 30, 2017 and 2016, totaled $2,818,186 and $2,249,308,
respectively.
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Note 17. Commitments and Contingencies


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The School receives funds through state and federal programs that are governed by various statutes and
regulations. State program funding is based primarily on student attendance data submitted to TEA and is
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subject to audit and adjustment. Expenses charged to federal programs are subject to audit and
adjustment by the grantor agency. The programs administered by the School have complex compliance
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requirements and, should state or federal auditors discover areas of noncompliance, funds may be
subject to refund if so determined by the TEA or other grantor agency.
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On June 15, 2017, the Board of Directors authorized the issuance of approximately $183,320,297 in
lc

additional bonds for the purpose of capital improvements. Management anticipates the note payable to
Regions Bank will be repaid with the proceeds from the bond issuance.
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IDEA Public Schools, Inc.

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Notes to Consolidated Financial Statements

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Note 17. Commitments and Contingencies (Continued)
At June 30, 2017, the School had the following construction commitments:

L.
Contract Amount Remaining
Amount Expended Commitment

a
lv
Bluff Springs Campus (Phase I) $ 11,553,728 $ 11,358,478 $ 195,250

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Bluff Springs Campus (Phase II) 6,125,182 - 6,125,182
Brackenridge Campus (Phase I) 12,657,000 10,453,304 2,203,696
Carver Campus (Phase II) 3,909,521 3,888,344 21,177

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Eastside Campus (Phase II) 6,242,749 5,509,250 733,499

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Ewing Halsell Campus (Phase I) 12,428,973 11,130,640 1,298,333
Frontier Campus (Phase III) 3,657,000 2,593,997 1,063,003

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Judson Campus (Phase II) 6,126,000 - 6,126,000
Mays Campus (Phase II) 6,417,054 574,465 5,842,589

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Najim Campus (Phase II) 12,775,000 10,949,515 1,825,485
North Mission Campus (Ph II) 4,124,440 - 4,124,440
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Quest Campus (Phase III) 2,701,265 1,334,745 1,366,520
Rio Grande City Campus (Phase I) 11,386,778 10,398,961 987,817
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Riverview Campus (Phase II) 4,491,851 4,231,439 260,412


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Rundberg Campus (Phase II) 6,194,890 5,265,544 929,346


South Flores Campus (Phase III) 2,250,000 1,216,324 1,033,676
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Tres Lagos Campus (Phase I) 11,009,138 10,082,904 926,234


IDEA U Campus (Renovations) 49,700 44,730 4,970
$ 124,100,268 $ 89,032,640 $ 35,067,628
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Note 18. Health Insurance


Employees of the School were covered by a health insurance plan during the years ended June 30, 2017
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and 2016. The School contributed a monthly portion depending on the employees’ health insurance plan
rate. The School contributed $341-$674 and $341-$600 for the years ended June 30, 2017 and 2016,
respectively. Employees, at their option, authorized payroll withholdings to pay contributions or premiums
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for dependents. All premiums were paid to licensed insurers.


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Note 19. Related Parties


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In the ordinary course of business, the School has entered into contracted service transactions with
vendors affiliated with School employees. Related-party transactions consist of the following:
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June 30
2017 2016
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Payments $ 389,006 $ 618,811


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Accounts payable 101,742 64,755


$ 490,748 $ 683,566

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IDEA Public Schools, Inc.

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Notes to Consolidated Financial Statements

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Note 20. Subsequent Events
On July 17, 2017, the School entered into a multiple draw term note payable with Regions Capital
Advantage, Inc. to finance the acquisition and renovation of Camp Rio, in the original amount equal to, or

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less than, $6,000,000 during the draw period; requiring quarterly payments of interest on the 1st day of
January, April, July and October of each calendar year; beginning October 15, 2017, and continuing

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regularly and quarterly thereafter at a rate of 3.48% through the earlier of the issuance by the School of

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additional bonds or July 1, 2029. The note is secured by a first and prior lien and security interest on any
real property securing the Master Indenture and any other security pledged.

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On July 26, 2017 the School refinanced a multiple draw term note payable to Regions Commercial
Equipment Finance, LLC, to finance new campus construction, land purchases and certain other projects,

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in the original amount equal to, or less than, $65,000,000 during the draw period; requiring quarterly

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payments of interest on the 15th day of February and August of each calendar year; beginning August 15,
2017, and continuing regularly and semiannually thereafter at monthly LIBOR plus 2.20% through the

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earlier of the issuance by the School of additional bonds or August 15, 2020. The note is secured by a
first and prior lien and security interest on any real property securing the Master Indenture and any other
security pledged.

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On August 18, 2017, IPS Enterprises, LLC entered into a term note payable with Mutual of Omaha Bank
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to finance the land acquisition and construction of a new public charter school facility in Baton Rouge,
Louisiana, in the original amount of $11,360,000; maturing February 28, 2023; requiring monthly
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payments of interest only at 4% plus the 5-year treasury rate through August 31, 2019 and thereafter
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requiring monthly payments of principal and interest through February 28, 2023. The initial 4% interest
rate may vary during the loan term based on the average collected balance on deposit in the
compensating balances account maintained by IPS Enterprises, LLC and the School. This note is
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secured by the corresponding land and school facility.

On August 18, 2017, IPS Enterprises, LLC entered into a term note payable with IPSBN, LLC to finance
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the land acquisition and construction of a new public charter school facility in Baton Rouge, Louisiana, in
the original amount of $2,700,000; maturing February 28, 2023; requiring monthly payments of interest
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only at 11.75% through August 31, 2020 and thereafter requiring monthly payments of $27,940 principal
and interest through February 28, 2023. This note is secured by a subordinate interest in the
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corresponding land and school facility.

On August 18, 2017, IPS Enterprises, LLC entered into a term note payable with CSGF Facility Fund III,
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LLC to finance the land acquisition and construction of a new public charter school facility in Baton
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Rouge, Louisiana, in the original amount of $1,800,000; maturing February 28, 2023; requiring monthly
payments of interest at 3% through February 28, 2023, with a $900,000 balloon payment on February 28,
2021 and $900,000 at the end of the term. This note is unsecured and subordinate to all other debt
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obligations of IPS Enterprises, LLC.


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Other Supplemental Information
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IDEA Public Schools, Inc.

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Exhibit B-1 Schedule of Activities for Individual Charter School

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Years Ended June 30, 2017 and 2016

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Temporarily Total
Unrestricted Restricted 2017 2016

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Revenues and other support:
Local support:
5740 Other revenues from local sources $ 1,723,055 $ 20,913,346 $ 22,636,401 $ 13,335,969

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5750 Other revenues from other activities 188,222 1,021,056 1,209,278 953,077
Total local support 1,911,277 21,934,402 23,845,679 14,289,046

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State program revenues:

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5810 Foundation School Program Act revenues - 248,565,042 248,565,042 205,329,975
5820 State program revenues distributed by the Texas
Education Agency - 4,034,330 4,034,330 3,786,555

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5830 State revenues—other agencies - 20,649 20,649 20,664
Total state program revenues - 252,620,021 252,620,021 209,137,194

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Federal program revenues:

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5920 Federal revenues distributed by the Texas Education Agency - 39,762,085 39,762,085 29,256,484
5930 Federal revenues distributed by other state of Texas
government agencies - 1,162,197 1,162,197 911,179

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5940 Federal revenues distributed directly from the federal government - 15,150,979 15,150,979 15,574,900
Total federal program revenues - 56,075,261 56,075,261 45,742,563
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Net assets released from restrictions:
Restrictions satisfied by payments 312,969,151 (312,969,151) - -
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Total revenues 314,880,428 17,660,533 332,540,961 269,168,803


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Expenses:
11 Instruction 133,638,945 - 133,638,945 110,204,220
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12 Instructional resources and media services 2,027,389 - 2,027,389 1,632,596


13 Curriculum and instructional staff development 3,674,622 - 3,674,622 3,362,737
21 Instructional leadership 11,532,226 - 11,532,226 6,551,044
23 School leadership 29,673,297 - 29,673,297 24,523,434
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31 Guidance, counseling and evaluation services 12,671,010 - 12,671,010 11,481,211


32 Social work services 5,306 - 5,306 4,273
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33 Health services 1,105,366 - 1,105,366 1,021,906


34 Student (pupil) transportation 11,571,839 - 11,571,839 10,263,539
35 Food services 20,786,893 - 20,786,893 15,087,824
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36 Cocurricular/extracurricular activities 2,912,341 - 2,912,341 2,436,362


41 General administration 18,061,339 - 18,061,339 13,487,085
51 Plant maintenance and operations 33,212,732 - 33,212,732 25,025,418
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52 Security and monitoring services 1,645,690 - 1,645,690 1,044,002


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53 Data processing services 5,115,085 - 5,115,085 5,527,066


61 Community services 298,373 - 298,373 415,105
71 Debt service 15,623,286 - 15,623,286 15,247,506
81 Fundraising 1,974,989 - 1,394,453
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1,974,989
Total expenses 305,530,728 - 305,530,728 248,709,781
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Gain on disposal of assets - - - 240,767


Loss on disposal of assets - - - (128)
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Loss on extinguishment of debt (8,429,223) - (8,429,223) -

Change in net assets 920,477 17,660,533 18,581,010 20,699,661


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Net assets at beginning of year 439,951 96,482,961 96,922,912 76,223,251


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Net assets at end of year $ 1,360,428 $ 114,143,494 $ 115,503,922 $ 96,922,912

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IDEA Public Schools, Inc.

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Exhibit C-1 Schedule of Expenses for Individual Charter School

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Years Ended June 30, 2017 and 2016

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2017 2016
Expenses:

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6100 Payroll costs $ 185,599,606 $ 147,929,700
6200 Professional and contracted services 34,551,956 27,471,613

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6300 Supplies and materials 35,858,057 29,319,962

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6400 Other operating costs 33,897,823 28,741,000
6500 Debt 15,623,286 15,247,506

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Total expenses $ 305,530,728 $ 248,709,781

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IDEA Public Schools, Inc.

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Exhibit D-1 Schedule of Capital Assets for Individual Charter School

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June 30, 2017

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Ownership Interest
Asset Classification Local State Federal

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Property and equipment:
1510 Land and improvements $ - $ 49,891,889 $ 18,900

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1520 Building and improvements - 343,181,532 14,500

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1531 Vehicles - 7,857,418 123,342

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1539 Furniture and equipment 6,704 5,809,535 5,632,351
Capital leases:
1542 Building improvements - 2,939,264 -

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1558 Vehicles 108,950 2,587,000 -

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1559 Equipment - 36,239 -
1580 Construction in progress - 123,011,749 2,246,428

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$ 115,654 $ 535,314,626 $ 8,035,521

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IDEA Public Schools, Inc.

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Exhibit E-1 Budgetary Comparison Schedule for Individual Charter School

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Year Ended June 30, 2017

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Variance With
Budgeted Amounts Final Budget

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Original Final Actual Positive (Negative)
Revenues:
Local support:

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5740 Other revenues from local sources $ 17,332,978 $ 20,680,713 $ 22,636,401 $ 1,955,688
5750 Other revenues from other activities 1,350,884 1,285,460 1,209,278 (76,182)

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Total local support 18,683,862 21,966,173 23,845,679 1,879,506

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State program revenues:
5810 Foundation School Program Act revenues 237,704,506 247,604,206 248,565,042 960,836
5820 State program revenues distributed by the Texas Education

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Agency 3,862,832 3,862,832 4,034,330 171,498
5830 State revenues—other agencies - 20,923 20,649 (274)

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Total state program revenues 241,567,338 251,487,961 252,620,021 1,132,060

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Federal program revenues:
5920 Federal revenues distributed by the Texas Education
Agency 38,711,553 40,311,502 39,762,085 (549,417)

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5930 Federal revenues distributed by other state of Texas
government agencies 645,980 1,162,197 1,162,197 -
5940 Federal revenues distributed directly from the federal
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government 16,231,011 16,051,832 15,150,979 (900,853)
Total federal program revenues 55,588,544 57,525,531 56,075,261 (1,450,270)
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Total revenues 315,839,744 330,979,665 332,540,961 1,561,296


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Expenses:
11 Instruction 119,528,350 122,770,167 133,638,945 (10,868,778)
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12 Instructional resources and media services 2,107,493 2,002,378 2,027,389 (25,011)


13 Curriculum and instructional staff development 3,590,229 3,401,110 3,674,622 (273,512)
21 Instructional leadership 16,850,783 11,913,511 11,532,226 381,285
23 School leadership 26,412,338 31,109,279 29,673,297 1,435,982
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31 Guidance, counseling and evaluation services 15,006,867 13,733,585 12,671,010 1,062,575


32 Social work services 14,000 5,425 5,306 119
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33 Health services 983,204 1,017,740 1,105,366 (87,626)


34 Student (pupil) transportation 11,662,307 11,866,898 11,571,839 295,059
35 Food services 22,954,547 22,947,594 20,786,893 2,160,701
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36 Cocurricular/extracurricular activities 3,784,437 2,833,362 2,912,341 (78,979)


41 General administration 15,430,546 16,602,381 18,061,339 (1,458,958)
51 Plant maintenance and operations 31,449,557 30,618,116 33,212,732 (2,594,616)
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52 Security and monitoring services 434,502 1,563,645 1,645,690 (82,045)


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53 Data processing services 4,317,230 4,806,975 5,115,085 (308,110)


61 Community services 865,830 277,123 298,373 (21,250)
71 Debt service 16,016,598 16,758,870 15,623,286 1,135,584
81 Fundraising 1,566,621 1,815,001 1,974,989 (159,988)
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Total expenses 292,975,439 296,043,160 305,530,728 (9,487,568)


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Loss on extinguishment of debt - (8,429,223) (8,429,223) -


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Change in net assets 22,864,305 26,507,282 18,581,010 (7,926,272)

Net assets at beginning of year 71,045,325 72,383,993 96,922,912 24,538,919


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Net assets at end of year $ 93,909,630 $ 98,891,275 $ 115,503,922 $ 16,612,647


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43
IDEA Public Schools, Inc.

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Consolidating Statement of Financial Position
June 30, 2017

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IPS
IDEA Enterprises,
Charter LLC Eliminations Total

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Assets

Current assets:

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Cash and cash equivalents $ 94,965,252 $ 1,069,563 $ - $ 96,034,815

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Cash and cash equivalents—restricted 29,114,610 - - 29,114,610
Due from government agencies 39,802,011 - - 39,802,011

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Other receivables 1,014,236 136,252 (745,359) 405,129
Certificates of deposit 4,000,000 - - 4,000,000
Inventories 113,641 - - 113,641

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Prepaid expenses 1,521,403 124,825 - 1,646,228
Other current assets 360,210 25,000 - 385,210

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Total current assets 170,891,363 1,355,640 (745,359) 171,501,644

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Property and equipment:
Land and improvements 49,910,789 - - 49,910,789
Buildings and improvements 343,196,032 - - 343,196,032
Leasehold improvements
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2,939,264
10,676,710
-
-
-
-
2,939,264
10,676,710
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Vehicles
Furniture and equipment 11,484,829 30,790 - 11,515,619
Construction in progress 125,258,177 626,101 - 125,884,278
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Total property and equipment 543,465,801 656,891 - 544,122,692


Less accumulated depreciation and amortization 62,926,362 1,710 - 62,928,072
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Net property and equipment 480,539,439 655,181 - 481,194,620


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Other assets:
Cash and cash equivalents—noncurrent—restricted 27,476,276 - - 27,476,276
Total other assets 27,476,276 - - 27,476,276
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Total assets $ 678,907,078 $ 2,010,821 $ (745,359) $ 680,172,540


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IDEA Enterprises,
Charter LLC Eliminations Total

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Liabilities and Net Assets

Current liabilities:

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Accounts payable $ 23,588,886 $ 5,000 $ - $ 23,593,886

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Accrued wages payable 15,312,435 - - 15,312,435
Accrued payroll expenses 3,965,706 - - 3,965,706

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Accrued interest payable 9,407,186 - - 9,407,186
Accrued expenses 5,187,876 - - 5,187,876
Deferred revenues 6,219,574 1,270,462 - 7,490,036

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Other liabilities 232,130 745,359 (745,359) 232,130
Notes payable—current portion 15,160,929 - - 15,160,929

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Bonds payable—current portion 7,315,000 - - 7,315,000
Capital leases payable—current portion 469,831 - - 469,831

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Total current liabilities 86,859,553 2,020,821 (745,359) 88,135,015

Long-term liabilities:
Bonds payable
Bond and other debt issuance costs, net ct
443,550,000
(8,421,018)
-
(10,000)
-
-
443,550,000
(8,431,018)
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Premium on issuance of bonds, net of amortization 34,192,750 - - 34,192,750
Notes payable 3,880,318 - - 3,880,318
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Capital leases payable 3,341,553 - - 3,341,553


Total long-term liabilities 476,543,603 (10,000) - 476,533,603
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Total liabilities 563,403,156 2,010,821 (745,359) 564,668,618


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Net assets:
Unrestricted 1,360,428 - - 1,360,428
Temporarily restricted 114,143,494 - - 114,143,494
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Total net assets 115,503,922 - - 115,503,922


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Total liabilities and net assets $ 678,907,078 $ 2,010,821 $ (745,359) $ 680,172,540


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IDEA Public Schools, Inc.

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Consolidating Statement of Activities
Year Ended June 30, 2017

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IPS
IDEA Enterprises,
Charter LLC Total
Revenues and other support:

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Local support:
Contributions $ 4,293,538 $ - $ 4,293,538
Grants 11,734,713 136,229 11,870,942

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Food service 1,019,478 - 1,019,478

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Other revenues 6,797,950 97,870 6,895,820
Total local support 23,845,679 234,099 24,079,778

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State program revenues:
Foundation School Program 248,565,042 - 248,565,042
Other state aid 4,054,979 - 4,054,979

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Total state program revenues 252,620,021 - 252,620,021

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Federal program revenues:

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ESEA Title I—Part A 8,218,535 - 8,218,535
ESEA Title I—Part A—Priority and Focus School 38,039 - 38,039
ESEA Title II—Part A Teacher/Principal Training 1,662,432 - 1,662,432
ESEA Title III—Part A Language Acquisition 726,738 - 726,738
IDEA B Formula—Special Education
IDEA—Part B Special Education Preschool Grants
ct 3,154,468
1,276
-
-
3,154,468
1,276
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ESEA Title V—Part B Charter Schools 6,243,533 - 6,243,533
ESEA Title V—Part C Charter Schools 49,794 - 49,794
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HEA Title IV—Part A GEAR-UP—Connect2College 1,408,312 - 1,408,312
ARRA ESEA Race To The Top—District Grants 7,131,316 - 7,131,316
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ESEA Title V—Part D Fund for the Improvement of Education 318,024 - 318,024
Twenty—First Century Community Learning Centers 3,309,259 - 3,309,259
Child Nutrition 21,541,133 - 21,541,133
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SSA, Title XIX—School Health and Related Services 1,162,197 - 1,162,197


School Improvement Grants 1,110,205 - 1,110,205
Total federal program revenues 56,075,261 - 56,075,261
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Total revenues and other support 332,540,961 234,099 332,775,060


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Expenses:
Program services:
Instructional and instructional related services 139,340,956 - 139,340,956
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Instructional and school leadership 41,205,523 - 41,205,523


Total program services 180,546,479 - 180,546,479
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Support services:
Administrative support services 18,061,339 170,340 18,231,679
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Ancillary services 298,373 - 298,373


Support services—nonstudent based 39,973,507 - 39,973,507
Support services—student (pupil) 49,052,755 50,000 49,102,755
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Debt service 15,623,286 - 15,623,286


Fundraising 1,974,989 13,759 1,988,748
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Total support services 124,984,249 234,099 125,218,348

Total expenses 305,530,728 234,099 305,764,827


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Loss on extinguishment of debt (8,429,223) - (8,429,223)


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Change in net assets 18,581,010 - 18,581,010


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Net assets at beginning of year 96,922,912 - 96,922,912

Net assets at end of year $ 115,503,922 $ - $ 115,503,922

47
IDEA Public Schools, Inc.

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Consolidating Statement of Cash Flows

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Year Ended June 30, 2017

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IPS
IDEA Enterprises,

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Charter LLC Total
Cash flows from operating activities:
Change in net assets $ 18,581,010 $ - $ 18,581,010

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Adjustments to reconcile change in net assets to net cash

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provided by operating activities:

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Depreciation and amortization 13,361,178 1,711 13,362,889
Allowance for doubtful accounts 490,041 - 490,041
Extinguishment of debt 8,429,223 - 8,429,223

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Gain on disposal of assets - - -
Changes in current assets and liabilities:

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Due from government agencies (4,394,157) - (4,394,157)
Other receivables (769,047) (136,252) (905,299)

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Inventories 10,949 - 10,949
Prepaid expenses (1,074,581) (124,825) (1,199,406)

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Other current assets (146,441) (35,000) (181,441)
Accounts payable 4,321,467 5,000 4,326,467
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Accrued wages payable 4,536,979 - 4,536,979
Accrued payroll expenses 737,839 - 737,839
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Accrued interest payable 1,179,345 - 1,179,345


Accrued expenses (3,937,322) - (3,937,322)
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Deferred revenues (485,011) 1,270,462 785,451


Other liabilities 35,320 745,359 780,679
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Net cash provided by operating activities 40,876,792 1,726,455 42,603,247

Cash flows from investing activities:


Construction and purchase of property and equipment (127,636,427) (656,892) (128,293,319)
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Purchase of certificate of deposit (4,000,000) - (4,000,000)


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Proceeds from certificate of deposit 134,742 - 134,742


Investment in notes receivable from graduates (490,041) - (490,041)
Net cash used in investing activities (131,991,726) (656,892) (132,648,618)
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Cash flows from financing activities:


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Proceeds from borrowings of long-term debt 132,430,692 - 132,430,692


(31,540,260) - (31,540,260)
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Principal payments on long-term debt


Payment to escrow for extinguishment of debt, net (2,054,488) - (2,054,488)
Net cash provided by financing activities 98,835,944 - 98,835,944
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Net increase in cash and cash equivalents 7,721,010 1,069,563 8,790,573


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Cash and cash equivalents at beginning of year 143,835,128 - 143,835,128


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Cash and cash equivalents at end of year $ 151,556,138 $ 1,069,563 $ 152,625,701


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(Continued)
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IDEA Public Schools, Inc.

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Consolidating Statement of Cash Flows (Continued)

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Year Ended June 30, 2017

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IPS
IDEA Enterprises,

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Charter LLC Total

Cash and cash equivalents $ 94,965,252 $ 1,069,563 $ 96,034,815

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Cash and cash equivalents—restricted 29,114,610 - 29,114,610

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Cash and cash equivalents—noncurrent—restricted 27,476,276 - 27,476,276

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Total cash and cash equivalents $ 151,556,138 $ 1,069,563 $ 152,625,701

Supplemental disclosures of cash flow information:

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Cash paid for interest $ 20,774,183 $ - $ 20,774,183

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Accrued liabilities related to the purchase of property

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and equipment $ 12,544,595 $ 31,429 $ 12,576,024

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Proceeds deposited into escrow for purposes of
refunding bonds $ 44,043,157 $ - $ 44,043,157
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Retirement of existing bonds from escrow $ (36,670,000) $ - $ (36,670,000)
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Exhibit C

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PLAINTIFF IDEA PUBLIC SCHOOLS’

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CROSS-MOTION FOR SUMMARY JUDGMENT

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Exhibit D

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PLAINTIFF IDEA PUBLIC SCHOOLS’

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CROSS-MOTION FOR SUMMARY JUDGMENT

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Advance Publishing Company

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217 West Park Avenue, Pharr, Texas, 78577

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June 9, 2017
IDEA Public Schools

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Weslaco, Texas

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Public Information Request

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Dear Officer for Public Records:

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This request is made under the Texas Public Information Act, Chapter 552, Texas Government Code, which

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guarantees the public’s access to information in the custody of governmental agencies. I respectfully request the
following information:

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1) Any and all documents related to the formation of IDEA Public Schools USA LLC. These
should include any and all memos and/or abstracts of discussion made during the entity’s
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pre-formation period. These should also include all of the related documents filed with
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the Texas Secretary of State.


2) Any and all documents related to the formation of IPS Enterprises LLC. These should
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include any and all memos and/or abstracts of discussion made during the entity’s pre-
formation period. These should also include all of the related documents filed with the
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Texas Secretary of State


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3) Any and all emails that contain subject matter related to IDEA Public Schools USA LLC
and IPS Enterprises LLC, their creation and the reasoning behind it. These should include
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any and all documents related to the organizational or business purpose of both entities,
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including their proposed formal operational plans and budgets.


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In the interest of expediency, and to minimize the research and/or duplication burden on your staff, I would be
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pleased to personally examine the relevant records if you would grant me immediate access to the requested
material. Additionally, and since time is a factor, please communicate with me by telephone or email rather than by
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mail. My telephone number is 956-783-0036 and my email address is GWendorf@aol.com.


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Disclosure of this information is in the public interest because providing a copy of the information primarily
benefits the general public. I therefore request a waiver of all fees and charges pursuant to Section 552.267 of the
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act.
I shall look forward to hearing from you promptly, as specified in the law. Thank you for your cooperation.

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Sincerely,

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Gregg Wendorf

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Advance Publishing Company

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Exhibit E

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PLAINTIFF IDEA PUBLIC SCHOOLS’

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CROSS-MOTION FOR SUMMARY JUDGMENT

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KEN PAXTON

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ATTORNEY GENERAL OF TEXAS

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August 22, 201 7

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Mr. Allen M. Keller

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Counsel for IDEA Public Schools

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Schulman, Lopez, Hoffer, and Adelstein, L.L.P.
51 7 Soledad Street

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San Antonio, Texas 78205-1508 tri
OR2017-19181
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Dear Mr. Keller:


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You ask whether certain information is subject to required public disclosure under the
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Public Information Act (the "Act"), chapter 552 of the Government Code. Your request was
assigned ID# 671925.
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IDEA Public Schools, Inc. ("IDEA"), which you represent, received a request for information
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pertaining to the formation ofIDEA Public Schools USA, L.L.C ("IDEA USA") and IPS
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Enterprises, L.L.C. ("IPS") You claim the submitted information is not subject to the Act,,
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or in the alternative, that a portion of it is excepted from disclosure under section 552. l 07
of the Government Code. 1 We have considered your arguments and reviewed the submitted
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representative sample of information. 2


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'Although you raise section 552. l 0 I of the Government Code, we understand you to claim, based on
the substance of your arguments, that the submitted infonnation is not public information subject to release
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under the Act.


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2
We assume that the "representative sample" ofrecords submitted to this office is truly representative
of the requested records as a whole. See Open Records Decision Nos. 499 (1988), 497 (1988). This open
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records letter does not reach, and therefore does not authorize the withholding of, any other requested records
to the extent that those records contain substantially different types of information than that submitted to this
office.

Post Office Box 12548, Austin, Texas 78711-2548 • (512) 463-2100 • www.texasattorneygeneral.gov
Mr. Allen M. Keller - Page 2

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We note the Act is applicable only to "public information." See id. §§ 552.002, .021.

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Section 552.002(a) reads as follows:

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(a) In this chapter, "public information" means information that is written,
produced, collected, assembled, or maintained under a law or ordinance or in

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connection with the transaction of official business:

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(1) by a governmental body;

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(2) for a governmental body and the governmental body:

(A) owns the information;

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(B) has a right of access to the information; or

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(C) spends or contributes public money for the purpose of

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writing, producing, collecting, assembling, or maintaining the
information; or
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(3) by an individual officer or employee of a governmental body in
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the officer's or employee's official capacity and the information


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pertains to official business of the governmental body.


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Gov't Code§ 552.002(a). Thus, virtually all of the information in a governmental body's
physical possession constitutes public information and, thus, is subject to the Act. Id.
§ 552.002(a)(l); see Open Records Decision Nos. 549 at 4 (1990), 514 at 1-2 (1988). The
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Act also encompasses information that a governmental body does not physically possess, if
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the information is collected, assembled, or maintained for the governmental body, and the
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governmental body owns the information or has a right of access to it. Gov't Code
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§ 552.002(a)(2); see Open Records Decision No. 462 at 4 (1987). Further, information that
is written, produced, collected, assembled, or maintained by an individual officer or
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employee of a governmental body in the officer's or employee's official capacity may be


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subject to disclosure under the Act if the information pertains to official business of the
governmental body. Gov't Code § 552.002(a)(3). Information is "in connection with the
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transaction of official business" if the information is created by, transmitted to, received by,
or maintained by a person or entity performing official business or a government function
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on behalf of a governmental body and the information pertains to official business of the
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governmental body. See id. § 552.002(a-l). Moreover, section 552.001 of the Act provides
it is the policy of this state that each person is entitled, unless otherwise expressly provided
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by law, at all times to complete information about the affairs of government and the official
acts of public officials and employees. See id. § 552.00l(a).
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You inform us IDEA is an open-enrollment charter school subject to subchapter D,

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chapter 12 ofthe Education Code. See Educ. Code§§ 12.101 et seq. (authorizing formation
of open-enrollment chmier schools). We note section 12.105 provides that "[a]n

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open-enrollment charter school is part of the public school system of this state." Id.
§ 12.105. Further, section 12.1051 of the Education Code reads as follows:

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(a) With respect to the operation of an open-enrollment charter school, the

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governing body of a charter holder and the governing body of an open-

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enrollment charter school are considered to be governmental bodies for

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purposes of Chapters 551and552 of the Government Code.

(b) With respect to the operation of an open-enrollment charter school, any

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requirement in Chapter 552 of the Government Code, or another law that

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concerns open meetings or the availability of information, that applies to a

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school district, the board of trustees of a school district, or public school
students applies to an open-enrollment charter school, the governing body of

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a chmier holder, the governing body of an open-enrollment charter school, or
students attending an open-enrollment charter school.
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Id. § 12 .10 51. You inform us that the requested information consists of certain corporate
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documents and communications pertaining to the formation ofIDEA USA and IPS by ID EA.
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You argue these records do not relate to the· operation of an open-enrollment charter school
for purposes of subsections 12.1051(a) and (b) and, thus, are not considered to be public
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information subject to release under the Act. We disagree. Upon review, we find IDEA
maintains the submitted inf01mation in connection with the transaction ofits official business
as an open-enrollment chmier school. We further find the records at issue were created as
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part of the operation ofIDEA which, as noted above, you inform us is an open-enrollment
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chmier school subject to subchapter D, chapter 12 of the Education Code. See id


§§ 12.1051, 12.1052(b) (stating records ofan open enrollment charter school are government
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records for all purposes under state law); see also Attorney General Opinion GA-0446 (2006)
(citing to section 12.1051 and noting "open-enrollment charter schools are subject to many
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of the same laws applicable to political subdivisions that are designed to promote openness
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and fairness in government"); cf Attorney General Opinion GA-1079 (2014) (noting


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section 12.1051 requires open enrollment charter schools to comply with the Open Meetings
Act). Thus, the submitted information constitutes "public information" as defined by
section 552.002(a) of the Government Code. Accordingly, the submitted information is
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subject to the Act in its entirety and IDEA must release it, unless it falls within an exception
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topublicdisclosureundertheAct. See id.§§ 552.006, .021, .301, .302. Therefore, we must


determine whether the submitted information is excepted from release under the Act.
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Section 552.107(1) of the Government Code protects information coming within the
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attorney-client privilege. See Gov't Code§ 552.107(1 ). When asserting the attorney-client
privilege, a governmental body has the burden of providing the necessary facts to
Mr. Allen M. Keller - Page 4

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demonstrate the elements of the privilege in order to withhold the information at issue. Open

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Records Decision No. 676 at 6-7 (2002). First, a governmental body must demonstrate that
the information constitutes or documents a communication. Id. at 7. Second, the

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communication must have been made "to facilitate the rendition of professional legal
services" to the client governmental body. TEX. R. Evro. 503(b )(1 ). The privilege does not

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apply when an attorney or representative is involved in some capacity other than that of
providing or facilitating professional legal services to the client governmental body. In re

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Tex. Farmers Ins. Exch., 990 S.W.2d 337, 340 (Tex. App.-Texarkana 1999, orig.
proceeding) (attorney-client privilege does not apply if attorney acting in a capacity other

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than that of attorney). Governmental attorneys often act in capacities other than that of
professional legal counsel, such as administrators, investigators, or managers. Thus, the
mere fact that a communication involves an attorney for the government does not

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demonstrate this element. Third, the privilege applies only to communications between or

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among clients, client representatives, lawyers, and lawyer representatives. TEX. R.

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Evro. 503(b)(l)(A), (B), (C), (D), (E). Thus, a governmental body must inform this office
of the identities and capacities of the individuals to whom each communication at issue has

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been made. Lastly, the attorney-client privilege applies only to a confidential
communication, id. 503(b)(1 ), meaning it was "not intended to be disclosed to third persons
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other than those: (A) to whom disclosure is made to further the rendition of professional
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legal services to the client; or (B) reasonably necessary to transmit the communication."
Id. 503(a)(5). Whether a communication meets this definition depends on the intent of the
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parties involved at the time the information was communicated. Osborne v. Johnson, 954
S.W.2d 180, 184 (Tex. App.-Waco 1997, orig. proceeding). Moreover, because the client
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may elect to waive the privilege at any time, a governmental body must explain that the
confidentiality of a communication has been maintained. Section 552.107(1) generally
excepts an entire communication that is demonstrated to be protected by the attorney-client
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privilege unless otherwise waived by the governmental body. See Huie v. DeShazo, 922
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S. W.2d 920, 923 (Tex. 1996) (privilege extends to entire communication, including facts
contained therein).
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You state Attachment 4 consists of communications involving attorneys for IDEA and IDEA
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officials in their capacities as clients. You state these communications were made in
furtherance of the rendition of professional legal services to IDEA. Your further state these
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communications were intended to be, and have remained, confidential. Based on these
representations and our review, we find· you have demonstrated the applicability of the
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attorney-client privilege to Attachment 4. Accordingly, IDEA may withhold Attachment 4


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under section 552.107(1) of the Government Code. As you make no further arguments
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against release of the remaining information, IDEA must release it to the requesetor.
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This letter ruling is limited to the particular information at issue in this request and limited
to the facts as presented to us; therefore, this ruling must not be relied upon as a previous
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determination regarding any other information or any other circumstances.


Mr. Allen M. Keller - Page 5

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This ruling triggers important deadlines regarding the rights and responsibilities of the

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governmental body and of the requestor. For more information concerning those rights
and responsibilities, please visit our website at http://www.texasattorneygeneral.gov/open/

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orl ruling info.shtml, or call the Office of the Attorney General's Open Government
Hotline, toll free, at (877) 673-6839. Questions concerning the allowable charges for

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providing public information under the Act may be directed to the Office of the Attorney
General, toll free, at (888) 672-6787.

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Sincerely,

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/'12 ... "' A,
1 fV!Wt .?i
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Ramsey area

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Assistant AC/:rney General

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Open Records Division

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Ref: ID# 671925
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Enc. Submitted documents


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c: Requestor
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(w/o enclosures)
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APPENDIX TO
PLAINTIFF IDEA PUBLIC SCHOOLS’

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CROSS-MOTION FOR SUMMARY JUDGMENT

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Appendix 1 - Texas Education Code § 12.1051

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Appendix 2 - Act of June 17, 2001, 77th Leg., R.S., 2001 Tex. Sess. Law Serv.

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Ch. 1504 (H.B. 6)

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Appendix 3 - Greater Houston P’ship v. Paxton, 468 S.W.3d 51

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Appendix 1

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Texas Education Code § 12.1051

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7/20/2018 § 12.1051. Applicability of Open Meetings and Public Information Laws | Statutes | Westlaw

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NOTES OF DECISIONS (2)

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Accessibility to public 
Vernon's Texas Statutes and Codes Annotated
Videoconference 
Education Code (Refs & Annos)

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Title 2. Public Education (Refs & Annos)
Subtitle C. Local Organization and Governance
§ 12.1051. Applicability of Open Meetings and Public Information Laws
Vernon's Texas Statutes and Codes Annotated
Chapter 12. Education Code Effective: September 1, 2007
Charters (Refs & Annos)  (Approx. 2 pages)

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Subchapter D. Open-Enrollment Charter School

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Effective: September 1, 2007

V.T.C.A., Education Code § 12.1051

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§ 12.1051. Applicability of Open Meetings and Public Information Laws

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Currentness

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(a) With respect to the operation of an open­enrollment charter school, the governing body

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of a charter holder and the governing body of an open­enrollment charter school are
considered to be governmental bodies for purposes of Chapters 551 and 552, Government
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Code.
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(b) With respect to the operation of an open­enrollment charter school, any requirement in
Chapter 551 or 552, Government Code, or another law that concerns open meetings or the
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availability of information, that applies to a school district, the board of trustees of a school
district, or public school students applies to an open­enrollment charter school, the
governing body of a charter holder, the governing body of an open­enrollment charter
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school, or students attending an open­enrollment charter school.

Credits
Amended by Acts 1999, 76th Leg., ch. 1335, § 1, eff. June 19, 1999. Renumbered from
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V.T.C.A., Education Code § 12.105(b) and amended by Acts 2001, 77th Leg., ch. 1504, § 6,
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eff. Sept. 1, 2001. Amended by Acts 2007, 80th Leg., ch. 258, § 3.01, eff. Sept. 1, 2007.
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Notes of Decisions (2)
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V. T. C. A., Education Code § 12.1051, TX EDUC § 12.1051
Current through the end of the 2017 Regular and First Called Sessions of the 85th
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Legislature
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End of © 2018 Thomson Reuters. No claim to original U.S. Government Works.
Document
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Westlaw. © 2018 Thomson Reuters Privacy Statement Accessibility Supplier Terms Contact Us 1­800­REF­ATTY (1­800­733­2889) Improve Westlaw


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https://1.next.westlaw.com/Document/NDCF49F60453311DCAA2DA901039F8281/View/FullText.html?transitionType=UniqueDocItem&contextData=(sc.Default)… 1/1
Appendix 2

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2001 Tex. Sess. Law Serv. Ch. 1504 (H.B. 6)

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OPEN-ENROLLMENT CHARTER SCHOOLS, 2001 Tex. Sess. Law Serv. Ch. 1504...

2001 Tex. Sess. Law Serv. Ch. 1504 (H.B. 6) (VERNON'S)

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VERNON'S TEXAS SESSION LAW SERVICE 2001

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Seventy-Seventh Legislature, 2001 Regular Session

Additions are indicated by <<+ Text +>>; deletions by <<- Text ->>

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Changes in tables are made but not highlighted.

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CHAPTER 1504

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H.B. No. 6
OPEN-ENROLLMENT CHARTER SCHOOLS

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AN ACT relating to open-enrollment charter schools.

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Be it enacted by the Legislature of the State of Texas:

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SECTION 1. Subchapter A, Chapter 12, Education Code, is amended by amending Section 12.001 and adding Section

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12.0011 to read as follows: tri
<< TX EDUC § 12.001 >>
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Sec. 12.001. <<+PURPOSES OF CHAPTER. (a) The purposes of this chapter are to:+>>
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<<+(1) improve student learning;+>>


<<+(2) increase the choice of learning opportunities within the public school system;+>>
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<<+(3) create professional opportunities that will attract new teachers to the public school system;+>>
<<+(4) establish a new form of accountability for public schools; and+>>
<<+(5) encourage different and innovative learning methods.+>>
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<<+(b) This chapter shall be applied in a manner that ensures the fiscal and academic accountability of persons holding
charters issued under this chapter. This chapter may not be applied in a manner that unduly regulates the instructional
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methods or pedagogical innovations of charter schools.+>>


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<< TX EDUC § 12.0011 >>


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<<+Sec. 12.0011.+>> ALTERNATIVE METHOD OF OPERATION. As an alternative to operating in the manner


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generally provided by this title, an independent school district, a school campus, or an educational program may choose
to operate under a charter in accordance with this chapter.
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SECTION 2. Section 12.101(b), Education Code, is amended to read as follows:

<< TX EDUC § 12.101 >>


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(b) The State Board of Education may <<+grant a charter for an open-enrollment charter school only to an applicant
that meets any financial, governing, and operational standards adopted by the commissioner under this subchapter.
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The State Board of Education may+>> not grant a total of more than <<+215+>> <<-20->> charters for an open-
enrollment charter school.
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SECTION 3. Subchapter D, Chapter 12, Education Code, is amended by adding Section 12.1012 to read as follows:

<< TX EDUC § 12.1012 >>

<<+Sec. 12.1012. DEFINITIONS. In this subchapter:+>>

© 2018 Thomson Reuters. No claim to original U.S. Government Works. 1


OPEN-ENROLLMENT CHARTER SCHOOLS, 2001 Tex. Sess. Law Serv. Ch. 1504...

<<+(1) “Charter holder” means the entity to which a charter is granted under this subchapter.+>>
<<+(2) “Governing body of a charter holder” means the board of directors, board of trustees, or other governing
body of a charter holder.+>>

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<<+(3) “Governing body of an open-enrollment charter school” means the board of directors, board of trustees, or

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other governing body of an open-enrollment charter school. The term includes the governing body of a charter holder
if that body acts as the governing body of the open-enrollment charter school.+>>

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<<+(4) “Management company” means a person, other than a charter holder, who provides management services for
an open-enrollment charter school.+>>

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<<+(5) “Management services” means services related to the management or operation of an open-enrollment charter
school, including:+>>

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<<+(A) planning, operating, supervising, and evaluating the school's educational programs, services, and facilities;

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+>>

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<<+(B) making recommendations to the governing body of the school relating to the selection of school personnel;
+>>
<<+(C) managing the school's day-to-day operations as its administrative manager;+>>

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<<+(D) preparing and submitting to the governing body of the school a proposed budget;+>>

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<<+(E) recommending policies to be adopted by the governing body of the school, developing appropriate procedures

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to implement policies adopted by the governing body of the school, and overseeing the implementation of adopted
policies; and+>>
<<+(F) providing leadership for the attainment of student performance at the school based on the indicators adopted
under Section 39.051 or by the governing body of the school.+>>
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<<+(6) “Officer of an open-enrollment charter school” means:+>>
<<+(A) the principal, director, or other chief operating officer of an open-enrollment charter school;+>>
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<<+(B) an assistant principal or assistant director of an open-enrollment charter school; or+>>


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<<+(C) a person charged with managing the finances of an open-enrollment charter school.+>>
SECTION 4. Section 12.103, Education Code, is amended to read as follows:
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<< TX EDUC § 12.103 >>

Sec. 12.103. <<+GENERAL+>> APPLICABILITY OF LAWS<<+,+>> <<-AND->> RULES<<+, AND


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ORDINANCES+>> TO OPEN-ENROLLMENT CHARTER SCHOOL. <<+(a) Except as provided by Subsection


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(b) or (c), an+>> <<-An->> open-enrollment charter school is subject to federal and state laws and rules governing
public schools <<+and to municipal zoning ordinances governing public schools.+>>
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<<+(b) An+>> <<-, except that an->> open-enrollment charter school is subject to this code and rules adopted under
this code only to the extent the applicability to an open-enrollment charter school of a provision of this code or a rule
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adopted under this code is specifically provided.


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<<+(c) Notwithstanding Subsection (a), a campus of an open-enrollment charter school located in whole or in part
in a municipality with a population of 20,000 or less is not subject to a municipal zoning ordinance governing public
schools.+>>
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SECTION 5. Section 12.104, Education Code, is amended by adding Subsections (c) and (d) to read as follows:
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<< TX EDUC § 12.104 >>


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<<+(c) An open-enrollment charter school is entitled to the same level of services provided to school districts by regional
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education service centers. The commissioner shall adopt rules that provide for the representation of open-enrollment
charter schools on the boards of directors of regional education service centers.+>>
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<<+(d) The commissioner may by rule permit an open-enrollment charter school to voluntarily participate in any
state program available to school districts, including a purchasing program, if the school complies with all terms of the
program.+>>

© 2018 Thomson Reuters. No claim to original U.S. Government Works. 2


OPEN-ENROLLMENT CHARTER SCHOOLS, 2001 Tex. Sess. Law Serv. Ch. 1504...

SECTION 6. Subchapter D, Chapter 12, Education Code, is amended by amending Section 12.105 and adding Sections
12.1051–12.1057 to read as follows:

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<< TX EDUC § 12.105 >>

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Sec. 12.105. STATUS. <<-(a)->> An open-enrollment charter school is part of the public school system of this state.

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<< TX EDUC § 12.1051 >>

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<<+Sec. 12.1051. APPLICABILITY OF OPEN MEETINGS AND PUBLIC INFORMATION LAWS. (a) With
respect to the operation of an open-enrollment charter school, the+>> <<-(b) The->> governing body of <<+a charter

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holder and the governing body of an open-enrollment charter+>> <<-the->> school <<+ are+>> <<-is->> considered

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<<+to be+>> <<-a->> governmental <<+ bodies+>> <<-body->> for purposes of Chapters 551 and 552, Government

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Code.
<<+(b) With respect to the operation of an open-enrollment charter school, any+>> <<-Any->> requirement in <<
+Chapter 551 or 552, Government Code, that applies+>> <<-those chapters relating->> to a school district, <<+ the

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board of trustees of a school district+>> <<-school board->>, or <<+public+>> school <<+students+>> <<-children-

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>> applies to an open-enrollment charter school<<+, the governing body of a charter holder, the governing body of
an open-enrollment charter school, or students+>> <<- and to children->> attending an open-enrollment <<+charter

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+>> school.

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<< TX EDUC § 12.1052 >>
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<<+Sec. 12.1052. APPLICABILITY OF LAWS RELATING TO LOCAL GOVERNMENT RECORDS. (a) With
respect to the operation of an open-enrollment charter school, an open-enrollment charter school is considered to
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be a local government for purposes of Subtitle C, Title 6, Local Government Code, and Subchapter J, Chapter 441,
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Government Code.+>>
<<+(b) Records of an open-enrollment charter school and records of a charter holder that relate to an open-enrollment
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charter school are government records for all purposes under state law.+>>
<<+(c) Any requirement in Subtitle C, Title 6, Local Government Code, or Subchapter J, Chapter 441, Government
Code, that applies to a school district, the board of trustees of a school district, or an officer or employee of a school
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district applies to an open-enrollment charter school, the governing body of a charter holder, the governing body of an
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open-enrollment charter school, or an officer or employee of an open-enrollment charter school except that the records
of an open-enrollment charter school that ceases to operate shall be transferred in the manner prescribed by Subsection
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(d).+>>
<<+(d) The records of an open-enrollment charter school that ceases to operate shall be transferred in the manner
specified by the commissioner to a custodian designated by the commissioner. The commissioner may designate any
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appropriate entity to serve as custodian, including the agency, a regional education service center, or a school district.
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In designating a custodian, the commissioner shall ensure that the transferred records, including student and personnel
records, are transferred to a custodian capable of:+>>
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<<+(1) maintaining the records;+>>


<<+(2) making the records readily accessible to students, parents, former school employees, and other persons entitled
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to access; and+>>
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<<+(3) complying with applicable state or federal law restricting access to the records.+>>
<<+(e) If the charter holder of an open-enrollment charter school that ceases to operate or an officer or employee of
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such a school refuses to transfer school records in the manner specified by the commissioner under Subsection (d), the
commissioner may ask the attorney general to petition a court for recovery of the records. If the court grants the petition,
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the court shall award attorney's fees and court costs to the state.+>>

<< TX EDUC § 12.1053 >>

© 2018 Thomson Reuters. No claim to original U.S. Government Works. 3


OPEN-ENROLLMENT CHARTER SCHOOLS, 2001 Tex. Sess. Law Serv. Ch. 1504...

<<+Sec. 12.1053. APPLICABILITY OF LAWS RELATING TO PUBLIC PURCHASING AND


CONTRACTING. (a) This section applies to an open-enrollment charter school unless the school's charter otherwise
describes procedures for purchasing and contracting and the procedures are approved by the State Board of Education.

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+>>

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<<+(b) An open-enrollment charter school is considered to be:+>>
<<+(1) a governmental entity for purposes of:+>>

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<<+(A) Subchapter D, Chapter 2252, Government Code; and+>>
<<+(B) Subchapter B, Chapter 271, Local Government Code;+>>

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<<+(2) a political subdivision for purposes of Subchapter A, Chapter 2254, Government Code; and+>>
<<+(3) a local government for purposes of Sections 2256.009–2256.016, Government Code.+>>

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<<+(c) To the extent consistent with this section, a requirement in a law listed in this section that applies to a school

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district or the board of trustees of a school district applies to an open-enrollment charter school, the governing body of

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a charter holder, or the governing body of an open-enrollment charter school.+>>

<< TX EDUC § 12.1054 >>

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<<+Sec. 12.1054. APPLICABILITY OF LAWS RELATING TO CONFLICT OF INTEREST. (a) A member of
the governing body of a charter holder, a member of the governing body of an open-enrollment charter school, or an

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officer of an open-enrollment charter school is considered to be a local public official for purposes of Chapter 171, Local
Government Code. For purposes of that chapter:+>>

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<<+(1) a member of the governing body of a charter holder or a member of the governing body or officer of an
open-enrollment charter school is considered to have a substantial interest in a business entity if a person related to
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the member or officer in the third degree by consanguinity or affinity, as determined under Chapter 573, Government
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Code, has a substantial interest in the business entity under Section 171.002, Local Government Code;+>>
<<+(2) notwithstanding any provision of Section 12.1054(1), an employee of an open-enrollment charter school rated
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as academically acceptable or higher under Chapter 39 for at least two of the preceding three school years may serve
as a member of the governing body of the charter holder of the governing body of the school if the employees do not
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constitute a quorum of the governing body or any committee of the governing body; however, all members shall comply
with the requirements of Sections 171.003–171.007, Local Government Code.+>>
<<+(b) To the extent consistent with this section, a requirement in a law listed in this section that applies to a school
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district or the board of trustees of a school district applies to an open-enrollment charter school, the governing body of
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a charter holder, or the governing body of an open-enrollment charter school.+>>

<< TX EDUC § 12.1055 >>


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<<+Sec. 12.1055. APPLICABILITY OF NEPOTISM LAWS. (a) An open-enrollment charter school is subject to a
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prohibition, restriction, or requirement, as applicable, imposed by state law or by a rule adopted under state law, relating
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to nepotism under Chapter 573, Government Code.+>>


<<+(b) Notwithstanding Subsection (a), if an open-enrollment charter school is rated academically acceptable or higher
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under Chapter 39 for at least two of the preceding three school years, then Chapter 573, Government Code, does not
apply to that school; however, a member of the governing body of a charter holder or a member of the governing
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body or officer of an open-enrollment charter school shall comply with the requirements of Sections 171.003–171.007,
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Local Government Code, with respect to a personnel matter concerning a person related to the member or officer
within the degree specified by Section 573.002, Government Code, as if the personnel matter were a transaction with a
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business entity subject to those sections, and persons defined under Sections 573.021–573.025, Government Code, shall
not constitute a quorum of the governing body or any committee of the governing body.+>>
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<< TX EDUC § 12.1056 >>

<<+Sec. 12.1056. IMMUNITY FROM LIABILITY. In matters related to operation of an open-enrollment charter
school, an open-enrollment charter+>> <<-(c) The->> school is immune from liability to the same extent as a school

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OPEN-ENROLLMENT CHARTER SCHOOLS, 2001 Tex. Sess. Law Serv. Ch. 1504...

district, and its employees and volunteers are immune from liability to the same extent as school district employees and
volunteers. <<+A member of the governing body of an open-enrollment charter school or of a charter holder is immune
from liability to the same extent as a school district trustee.+>>

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<< TX EDUC § 12.1057 >>

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<<+Sec. 12.1057. MEMBERSHIP IN TEACHER RETIREMENT SYSTEM OF TEXAS. (a)+>> <<-(d)->> An
employee of an open-enrollment charter school who qualifies for membership in the Teacher Retirement System of Texas

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shall be covered under the system to the same extent a qualified employee of a school district is covered.
<<+(b)+>> For each employee of the school covered under the system, the school is responsible for making any

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contribution that otherwise would be the legal responsibility of the school district, and the state is responsible for making

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contributions to the same extent it would be legally responsible if the employee were a school district employee.
SECTION 7. Sections 12.106 and 12.107, Education Code, are amended to read as follows:

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<< TX EDUC § 12.106 >>

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Sec. 12.106. STATE FUNDING. (a) <<+A charter holder is entitled to receive for the open-enrollment charter school

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funding under Chapter 42 as if the school were a school district without a tier one local share for purposes of Section
42.253 and without any local revenue (“LR”) for purposes of Section 42.302. In determining funding for an open-

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enrollment charter school, adjustments under Sections 42.102, 42.103, 42.104, and 42.105 and the district enrichment
tax rate (“DTR”) under Section 42.302 are based on the average adjustment and average district enrichment tax rate
for the state.+>>
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<<+(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
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provides that open-enrollment charter schools are not entitled to the funding.+>>
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<<+(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
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and is necessary or prudent to provide or account for state funds.+>> <<-An open-enrollment charter school is entitled
to the distribution from the available school fund for a student attending the open-enrollment charter school to which
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the district in which the student resides would be entitled.->>


<<-(b) A student attending an open-enrollment charter school who is eligible under Section 42.003 is entitled to the
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benefits of the Foundation School Program under Chapter 42. The commissioner shall distribute from the foundation
school fund to each school an amount equal to the cost of a Foundation School Program provided by the program for
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which the charter is granted as determined under Section 42.251, including the transportation allotment under Section
42.155, for the student that the district in which the student resides would be entitled to, less an amount equal to the sum
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of the school's tuition receipts under Section 12.107 plus the school's distribution from the available school fund.->>
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<< TX EDUC § 12.107 >>


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Sec. 12.107. <<+STATUS AND USE OF FUNDS. (a) Funds received under Section 12.106 after September 1, 2001,
by a charter holder:+>>
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<<+(1) are considered to be public funds for all purposes under state law;+>>
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<<+(2) are held in trust by the charter holder for the benefit of the students of the open-enrollment charter school;+>>
<<+(3) may be used only for a purpose for which a school may use local funds under Section 45.105(c); and+>>
of

<<+(4) pending their use, must be deposited into a bank, as defined by Section 45.201, with which the charter holder
has entered into a depository contract.+>>
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<<+(b) A charter holder shall deliver to the agency a copy of the depository contract between the charter holder and
any bank into which state funds are deposited.+>> <<-LOCAL FUNDING. (a) Except as provided by Subsection (b),
an open-enrollment charter school is entitled to receive tuition from the school district in which a student attending the
school resides in an amount equal to the quotient of the tax revenue collected by the school district for maintenance and

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OPEN-ENROLLMENT CHARTER SCHOOLS, 2001 Tex. Sess. Law Serv. Ch. 1504...

operations for the school year for which tuition is being paid divided by the sum of the number of students enrolled in
the district as reported in the Public Education Information Management System (PEIMS), including the number of
students for whom the district is required to pay tuition.->>

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<<-(b) The tuition to be paid under Subsection (a) by a school district with a wealth per student that exceeds the

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equalized wealth level under Chapter 41 shall be based on the district's tax revenue after the district has acted to achieve
the equalized wealth level under Chapter 41.->>

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SECTION 8. Subchapter D, Chapter 12, Education Code, is amended by adding Section 12.1071 to read as follows:

L.
<< TX EDUC § 12.1071 >>

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<<+Sec. 12.1071. EFFECT OF ACCEPTING STATE FUNDING. (a) A charter holder who accepts state funds under

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Section 12.106 after the effective date of a provision of this subchapter agrees to be subject to that provision, regardless
of the date on which the charter holder's charter was granted.+>>

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<<+(b) A charter holder who accepts state funds under Section 12.106 after September 1, 2001, agrees to accept all
liability under this subchapter for any funds accepted under that section before September 1, 2001. This subsection does

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not create liability for charter holder conduct occurring before September 1, 2001.+>>

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SECTION 9. Section 12.108, Education Code, is amended to read as follows:

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<< TX EDUC § 12.108 >>

Sec. 12.108. TUITION <<+AND FEES+>> RESTRICTED. <<+(a) An+>> <<- Except as provided by Section

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12.106, an->> open-enrollment charter school may not charge tuition to an eligible student who applies under Section
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12.117.
<<+(b) The governing body of an open-enrollment charter school may require a student to pay any fee that the board
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of trustees of a school district may charge under Section 11.158(a). The governing body may not require a student to pay
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a fee that the board of trustees of a school district may not charge under Section 11.158(b).+>>
SECTION 10. Subchapter D, Chapter 12, Education Code, is amended by adding Section 12.1101 to read as follows:
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<< TX EDUC § 12.1101 >>

<<+Sec. 12.1101. NOTIFICATION OF CHARTER APPLICATION. The commissioner by rule shall adopt a
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procedure for providing notice to the following persons on receipt by the State Board of Education of an application for
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a charter for an open-enrollment charter school under Section 12.110:+>>


<<+(1) the board of trustees of each school district from which the proposed open-enrollment charter school is likely
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to draw students, as determined by the commissioner; and+>>


<<+(2) each member of the legislature that represents the geographic area to be served by the proposed school, as
determined by the commissioner.+>>
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SECTION 11. Sections 12.111 and 12.113, Education Code, are amended to read as follows:
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<< TX EDUC § 12.111 >>


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Sec. 12.111. CONTENT. Each charter granted under this subchapter must:
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(1) describe the educational program to be offered, which must include the required curriculum as provided by Section
28.002;
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(2) specify the period for which the charter or any charter renewal is valid;
(3) provide that continuation or renewal of the charter is contingent on acceptable student performance on assessment
of

instruments adopted under Subchapter B, Chapter 39, and on compliance with any accountability provision specified
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by the charter, by a deadline or at intervals specified by the charter;


(4) establish the level of student performance that is considered acceptable for purposes of Subdivision (3);
(5) specify any basis, in addition to a basis specified by this subchapter, on which the charter may be placed on
probation or revoked or on which renewal of the charter may be denied;

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OPEN-ENROLLMENT CHARTER SCHOOLS, 2001 Tex. Sess. Law Serv. Ch. 1504...

(6) prohibit discrimination in admission policy on the basis of sex, national origin, ethnicity, religion, disability,
academic<<+, artistic,+>> or athletic ability, or the district the child would otherwise attend in accordance with this
code, although the charter may provide for the exclusion of a student who has a documented history of a criminal

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offense, a juvenile court adjudication, or discipline problems under Subchapter A, Chapter 37;

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(7) specify the grade levels to be offered;
(8) describe the governing structure of the program, including:

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(A) the officer positions designated;
(B) the manner in which officers are selected and removed from office;

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(C) the manner in which members of the governing body <<+of the school+>> are selected and removed from office;
(D) the manner in which vacancies on <<+that+>> <<-the->> governing <<+body+>> <<-board->> are filled;

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(E) the term for which members of <<+that+>> <<-the->> governing body serve; and

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(F) whether the terms are to be staggered;

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(9) <<+specify the powers or duties of the governing body of the school that the governing body may delegate to an
officer;+>>
<<+(10)+>> specify the <<+manner in which the school will distribute to parents information related to the

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+>> qualifications <<+of each+>> <<- to be met by->> professional <<+employee+>> <<-employees->> of the

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program<<+, including any professional or educational degree held by each employee, a statement of any certification

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under Subchapter B, Chapter 21, held by each employee, and any relevant experience of each employee+>>;
<<+(11)+>> <<-(10)->> describe the process by which the person providing the program will adopt an annual budget;
<<+(12)+>> <<-(11)->> describe the manner in which an annual audit of the financial and programmatic operations

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of the program is to be conducted, including the manner in which the person providing the program will provide
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information necessary for the school district in which the program is located to participate, as required by this code or
by State Board of Education rule, in the Public Education Information Management System (PEIMS);
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<<+(13)+>> <<-(12)->> describe the facilities to be used;


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<<+(14)+>> <<-(13)->> describe the geographical area served by the program; and
<<+(15)+>> <<-(14)->> specify any type of enrollment criteria to be used.
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<< TX EDUC § 12.113 >>

Sec. 12.113. CHARTER GRANTED. <<+(a)+>> Each charter the State Board of Education grants for an open-
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enrollment charter school must:


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(1) satisfy this subchapter; and


(2) include the information that is required under Section 12.111 consistent with the information provided in the
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application and any modification the board requires.


<<+(b) The grant of a charter under this subchapter does not create an entitlement to a renewal of a charter on the
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same terms as it was originally issued.+>>


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SECTION 12. Sections 12.114–12.116, Education Code, are amended to read as follows:

<< TX EDUC § 12.114 >>


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Sec. 12.114. REVISION. A revision of a charter of an open-enrollment charter school may be made only with the
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approval of the <<+commissioner+>> <<- State Board of Education->>.


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<< TX EDUC § 12.115 >>


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Sec. 12.115. BASIS FOR MODIFICATION, PLACEMENT ON PROBATION, REVOCATION, OR DENIAL


OF RENEWAL. (a) The <<+commissioner+>> <<-State Board of Education->> may modify, place on probation,
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revoke, or deny renewal of the charter of an open-enrollment charter school if the <<+ commissioner+>> <<-board-
>> determines that the <<+charter holder+>> <<-person operating the school->>:
(1) committed a material violation of the charter, including failure to satisfy accountability provisions prescribed by
the charter;

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OPEN-ENROLLMENT CHARTER SCHOOLS, 2001 Tex. Sess. Law Serv. Ch. 1504...

(2) failed to satisfy generally accepted accounting standards of fiscal management;


<<+(3) failed to protect the health, safety, or welfare of the students enrolled at the school;+>> or
<<+(4)+>> <<-(3)->> failed to comply with this subchapter or another applicable law or rule.

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(b) The action the <<+commissioner+>> <<-board->> takes under Subsection (a) shall be based on the best interest

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of the school's students, the severity of the violation, and any previous violation the school has committed.

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<< TX EDUC § 12.116 >>

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Sec. 12.116. PROCEDURE FOR MODIFICATION, PLACEMENT ON PROBATION, REVOCATION, OR
DENIAL OF RENEWAL. (a) The <<+commissioner+>> <<-State Board of Education->> shall adopt a procedure to

a
be used for modifying, placing on probation, revoking, or denying renewal of the charter of an open-enrollment charter

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school.
(b) The procedure adopted under Subsection (a) must provide an opportunity for a hearing to the <<+charter holder

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+>> <<-person operating the open-enrollment charter school->> and to parents and guardians of students in the school.
A hearing under this subsection must be held at the facility at which the program is operated.

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<<+(c) Chapter 2001, Government Code, does not apply to a hearing that is related to a modification, placement on

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probation, revocation, or denial of renewal under this subchapter.+>>
SECTION 13. Subchapter D, Chapter 12, Education Code, is amended by adding Sections 12.1161–12.1163 to read

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as follows:

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<< TX EDUC § 12.1161 >>
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<<+Sec. 12.1161. EFFECT OF REVOCATION, DENIAL OF RENEWAL, OR SURRENDER OF CHARTER.
(a) Except as provided by Subsection (b), if the commissioner revokes or denies the renewal of a charter of an open-
is

enrollment charter school, or if an open-enrollment charter school surrenders its charter, the school may not:+>>
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<<+(1) continue to operate under this subchapter; or+>>


<<+(2) receive state funds under this subchapter.+>>
<<+(b) An open-enrollment charter school may continue to operate and receive state funds under this subchapter for
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the remainder of a school year if the commissioner denies renewal of the school's charter before the completion of that
school year.+>>
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<< TX EDUC § 12.1162 >>


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<<+Sec. 12.1162. ADDITIONAL SANCTIONS. (a) The commissioner shall take any of the actions described by
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Subsection (b) or by Section 39.131(a), to the extent the commissioner determines necessary, if an open-enrollment
charter school, as determined by a report issued under Section 39.076(b):+>>
<<+(1) commits a material violation of the school's charter;+>>
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<<+(2) fails to satisfy generally accepted accounting standards of fiscal management; or+>>
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<<+(3) fails to comply with this subchapter or another applicable rule or law.+>>
<<+(b) The commissioner may temporarily withhold funding, suspend the authority of an open-enrollment charter
lc

school to operate, or take any other reasonable action the commissioner determines necessary to protect the health,
safety, or welfare of students enrolled at the school based on evidence that conditions at the school present a danger to
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the health, safety, or welfare of the students.+>>


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<<+(c) After the commissioner acts under Subsection (b), the open-enrollment charter school may not receive funding
and may not resume operating until a determination is made that:+>>
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<<+(1) despite initial evidence, the conditions at the school do not present a danger of material harm to the health,
safety, or welfare of students; or+>>
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<<+(2) the conditions at the school that presented a danger of material harm to the health, safety, or welfare of
students have been corrected.+>>
<<+(d) Not later than the third business day after the date the commissioner acts under Subsection (b), the
commissioner shall provide the charter holder an opportunity for a hearing.+>>

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OPEN-ENROLLMENT CHARTER SCHOOLS, 2001 Tex. Sess. Law Serv. Ch. 1504...

<<+(e) Immediately after a hearing under Subsection (d), the commissioner must cease the action under Subsection
(b) or initiate action under Section 12.116.+>>
<<+(f) The commissioner shall adopt rules implementing this section. Chapter 2001, Government Code, does not apply

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to a hearing under this section.+>>

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<< TX EDUC § 12.1163 >>

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<<+Sec. 12.1163. AUDIT BY COMMISSIONER. (a) To the extent consistent with Subsection (b), the commissioner

L.
may audit the records of:+>>
<<+(1) an open-enrollment charter school;+>>

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<<+(2) a charter holder; and+>>

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<<+(3) a management company.+>>
<<+(b) An audit under Subsection (a) must be limited to matters directly related to the management or operation of

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an open-enrollment charter school, including any financial and administrative records.+>>
SECTION 14. Section 12.117, Education Code, is amended to read as follows:

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<< TX EDUC § 12.117 >>

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Sec. 12.117. <<-APPLICATION FOR->> ADMISSION. <<+(a)+>> For admission to an open-enrollment charter

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school, the <<+governing body of+>> <<- person operating->> the school <<+shall:+>>
<<+(1)+>> <<-may->> require the applicant to complete and submit an application not later than a reasonable
deadline the school establishes<<+; and+>>
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<<+(2) on receipt of more acceptable applications for admission under this section than available positions in the
school:+>>
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<<+(A) fill the available positions by lottery; or+>>


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<<+(B) subject to Subsection (b), fill the available positions in the order in which applications received before the
application deadline were received.+>>
<<+(b) An open-enrollment charter school may fill applications for admission under Subsection (a)(2)(B) only if
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the school published a notice of the opportunity to apply for admission to the school. A notice published under this
subsection must:+>>
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<<+(1) state the application deadline; and+>>


<<+(2) be published in a newspaper of general circulation in the community in which the school is located not later
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than the seventh day before the application deadline+>>.


SECTION 15. Sections 12.118(a) and (c), Education Code, are amended to read as follows:
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<< TX EDUC § 12.118 >>


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(a) The <<+commissioner+>> <<-board->> shall designate an impartial organization with experience in evaluating
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school choice programs to conduct an annual evaluation of open-enrollment charter schools.


(c) The evaluation of open-enrollment charter schools must also include an evaluation of:
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(1) the costs of instruction, administration, and transportation incurred by open-enrollment charter schools; <<-and-
>>
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(2) the effect of open-enrollment charter schools on school districts and on teachers, students, and parents in those
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districts<<+; and+>>
<<+(3) other issues, as determined by the commissioner+>>.
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SECTION 16. Section 12.119(a), Education Code, is amended to read as follows:


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<< TX EDUC § 12.119 >>

(a) <<+A charter holder+>> <<-The entity to which a charter is granted for an open-enrollment charter school-
>> shall file with the State Board of Education a copy of its <<+articles of incorporation and+>> bylaws, or <<-a-

© 2018 Thomson Reuters. No claim to original U.S. Government Works. 9


OPEN-ENROLLMENT CHARTER SCHOOLS, 2001 Tex. Sess. Law Serv. Ch. 1504...

>> comparable <<+documents+>> <<-document->> if the <<+ charter holder+>> <<-entity->> does not have <<
+articles of incorporation or+>> bylaws, within the period and in the manner prescribed by the board.
SECTION 17. Section 12.120, Education Code, is amended to read as follows:

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<< TX EDUC § 12.120 >>

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Sec. 12.120. <<+RESTRICTIONS+>> <<-LIMITATION->> ON SERVING AS <<+ MEMBER OF
GOVERNING BODY OF CHARTER HOLDER OR OPEN-ENROLLMENT CHARTER SCHOOL OR AS+>>

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OFFICER OR EMPLOYEE. <<+(a)+>> A person <<+may not serve as a member of the governing body of a charter
holder, as a member of the governing body of an open-enrollment charter school, or as an officer or employee of an

a
open-enrollment charter school if the person:+>>

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<<+(1)+>> <<-who->> has been convicted of a felony or a misdemeanor involving moral turpitude<<+;+>>
<<+(2) has been convicted of an offense listed in Section 37.007(a);+>>

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<<+(3) has been convicted of an offense listed in Article 62.01(5), Code of Criminal Procedure; or+>>
<<+(4) has a substantial interest in a management company.+>>

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<<+(b) For purposes of Subsection (a)(4), a person has a substantial interest in a management company if the person:

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+>>
<<+(1) has a controlling interest in the company;+>>

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<<+(2) owns more than 10 percent of the voting interest in the company;+>>
<<+(3) owns more than $25,000 of the fair market value of the company;+>>

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<<+(4) has a direct or indirect participating interest by shares, stock, or otherwise, regardless of whether voting rights
are included, in more than 10 percent of the profits, proceeds, or capital gains of the company;+>>
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<<+(5) is a member of the board of directors or other governing body of the company;+>>
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<<+(6) serves as an elected officer of the company; or+>>
<<+(7) is an employee of the company+>> <<-may not serve as an officer or member of the governing body of an
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open-enrollment charter school->>.


SECTION 18. Subchapter D, Chapter 12, Education Code, is amended by adding Sections 12.121–12.130 to read as
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follows:

<< TX EDUC § 12.121 >>


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<<+Sec. 12.121. RESPONSIBILITY FOR OPEN-ENROLLMENT CHARTER SCHOOL. The governing body of
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an open-enrollment charter school is responsible for the management, operation, and accountability of the school,
regardless of whether the governing body delegates the governing body's powers and duties to another person.+>>
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<< TX EDUC § 12.122 >>


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<<+Sec. 12.122. LIABILITY OF MEMBERS OF GOVERNING BODY OF OPEN-ENROLLMENT CHARTER


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SCHOOL. (a) Notwithstanding the Texas Non-Profit Corporation Act (Article 1396–1.01 et seq., Vernon's Texas
Civil Statutes) or other law, on request of the commissioner, the attorney general may bring suit against a member
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of the governing body of an open-enrollment charter school for breach of a fiduciary duty by the member, including
misapplication of public funds.+>>
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<<+(b) The attorney general may bring suit under Subsection (a) for:+>>
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<<+(1) damages;+>>
<<+(2) injunctive relief; or+>>
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<<+(3) any other equitable remedy determined to be appropriate by the court.+>>


<<+(c) This section is cumulative of all other remedies.+>>
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<< TX EDUC § 12.123 >>

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OPEN-ENROLLMENT CHARTER SCHOOLS, 2001 Tex. Sess. Law Serv. Ch. 1504...

<<+Sec. 12.123. TRAINING FOR MEMBERS OF GOVERNING BODY OF SCHOOL AND OFFICERS. (a) The
commissioner shall adopt rules prescribing training for:+>>
<<+(1) members of governing bodies of open-enrollment charter schools; and+>>

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<<+(2) officers of open-enrollment charter schools.+>>

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<<+(b) The rules adopted under Subsection (a) may:+>>
<<+(1) specify the minimum amount and frequency of the training;+>>

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<<+(2) require the training to be provided by:+>>
<<+(A) the agency and regional education service centers;+>>

L.
<<+(B) entities other than the agency and service centers, subject to approval by the commissioner; or+>>
<<+(C) both the agency, service centers, and other entities; and+>>

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<<+(3) require training to be provided concerning:+>>

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<<+(A) basic school law, including school finance;+>>

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<<+(B) health and safety issues;+>>
<<+(C) accountability requirements related to the use of public funds; and+>>
<<+(D) other requirements relating to accountability to the public, such as open meetings requirements under

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Chapter 551, Government Code, and public information requirements under Chapter 552, Government Code.+>>

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<< TX EDUC § 12.124 >>

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<<+Sec. 12.124. LOANS FROM MANAGEMENT COMPANY PROHIBITED. (a) The charter holder or the

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governing body of an open-enrollment charter school may not accept a loan from a management company that has a
contract to provide management services to:+>>
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<<+(1) that charter school; or+>>
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<<+(2) another charter school that operates under a charter granted to the charter holder.+>>
<<+(b) A charter holder or the governing body of an open-enrollment charter school that accepts a loan from a
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management company may not enter into a contract with that management company to provide management services
to the school.+>>
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<< TX EDUC § 12.125 >>


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<<+Sec. 12.125. CONTRACT FOR MANAGEMENT SERVICES. Any contract, including a contract renewal,
between an open-enrollment charter school and a management company proposing to provide management services to
av

the school must require the management company to maintain all records related to the management services separately
from any other records of the management company.+>>
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<< TX EDUC § 12.126 >>


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<<+Sec. 12.126. CERTAIN MANAGEMENT SERVICES CONTRACTS PROHIBITED. The commissioner may
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prohibit, deny renewal of, suspend, or revoke a contract between an open-enrollment charter school and a management
company providing management services to the school if the commissioner determines that the management company
lc

has:+>>
<<+(1) failed to provide educational or related services in compliance with the company's contractual or other legal
ia

obligation to any open-enrollment charter school in this state or to any other similar school in another state;+>>
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<<+(2) failed to protect the health, safety, or welfare of the students enrolled at an open-enrollment charter school
served by the company;+>>
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<<+(3) violated this subchapter or a rule adopted under this subchapter; or+>>
<<+(4) otherwise failed to comply with any contractual or other legal obligation to provide services to the school.+>>
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<< TX EDUC § 12.127 >>

© 2018 Thomson Reuters. No claim to original U.S. Government Works. 11


OPEN-ENROLLMENT CHARTER SCHOOLS, 2001 Tex. Sess. Law Serv. Ch. 1504...

<<+Sec. 12.127. LIABILITY OF MANAGEMENT COMPANY. (a) A management company that provides
management services to an open-enrollment charter school is liable for damages incurred by the state as a result of the
failure of the company to comply with its contractual or other legal obligation to provide services to the school.+>>

e
<<+(b) On request of the commissioner, the attorney general may bring suit on behalf of the state against a management

ic
company liable under Subsection (a) for:+>>
<<+(1) damages, including any state funding received by the company and any consequential damages suffered by

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the state;+>>
<<+(2) injunctive relief; or+>>

L.
<<+(3) any other equitable remedy determined to be appropriate by the court.+>>
<<+(c) This section is cumulative of all other remedies and does not affect:+>>

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<<+(1) the liability of a management company to the charter holder; or+>>

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<<+(2) the liability of a charter holder, a member of the governing body of a charter holder, or a member of the

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governing body of an open-enrollment charter school to the state.+>>

<< TX EDUC § 12.128 >>

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<<+Sec. 12.128. PROPERTY PURCHASED OR LEASED WITH STATE FUNDS. (a) Property purchased or leased
with funds received by a charter holder under Section 12.106 after September 1, 2001:+>>

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<<+(1) is considered to be public property for all purposes under state law;+>>
<<+(2) is held in trust by the charter holder for the benefit of the students of the open-enrollment charter school;

ct
and+>>
<<+(3) may be used only for a purpose for which a school district may use school district property.+>>
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<<+(b) If at least 50 percent of the funds used by a charter holder to purchase real property are funds received under
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Section 12.106 before September 1, 2001, the property is considered to be public property to the extent it was purchased
with those funds.+>>
.D

<<+(c) The commissioner shall:+>>


<<+(1) take possession and assume control of the property described by Subsection (a) of an open-enrollment charter
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school that ceases to operate; and+>>


<<+(2) supervise the disposition of the property in accordance with law.+>>
<<+(d) The commissioner may adopt rules necessary to administer this section.+>>
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<<+(e) This section does not affect a security interest in or lien on property established by a creditor in compliance with
av

law if the security interest or lien arose in connection with the sale or lease of the property to the charter holder.+>>

<< TX EDUC § 12.129 >>


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<<+Sec. 12.129. MINIMUM TEACHER QUALIFICATIONS. A person employed as a teacher by an open-


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enrollment charter school must hold a high school diploma. +>>


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<< TX EDUC § 12.130 >>


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<<+Sec. 12.130. NOTICE OF TEACHER QUALIFICATIONS. Each open-enrollment charter school shall provide
to the parent or guardian of each student enrolled in the school written notice of the qualifications of each teacher
ia

employed by the school.+>>


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SECTION 19. Chapter 12, Education Code, is amended by adding Subchapter E to read as follows:
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<<+SUBCHAPTER E. COLLEGE OR UNIVERSITY CHARTER SCHOOL+>>


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<< TX EDUC § 12.151 >>

<<+Sec. 12.151. DEFINITION. In this subchapter, “public senior college or university” has the meaning assigned by
Section 61.003.+>>

© 2018 Thomson Reuters. No claim to original U.S. Government Works. 12


OPEN-ENROLLMENT CHARTER SCHOOLS, 2001 Tex. Sess. Law Serv. Ch. 1504...

<< TX EDUC § 12.152 >>

<<+Sec. 12.152. AUTHORIZATION. (a) In accordance with this subchapter and Subchapter D, the State Board of

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Education may grant a charter on the application of a public senior college or university for an open-enrollment charter

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school to operate on the campus of the public senior college or university or in the same county in which the campus of

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the public senior college or university is located.+>>

<< TX EDUC § 12.153 >>

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<<+Sec. 12.153. RULES. The commissioner may adopt rules to implement this subchapter.+>>

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<< TX EDUC § 12.154 >>

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<<+Sec. 12.154. CONTENT. Notwithstanding Section 12.110(d), the State Board of Education may grant a charter
under this subchapter only if the following criteria are satisfied in the public senior college's or university's application,
as determined by the State Board of Education:+>>

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<<+(1) the college or university charter school's educational program must include innovative teaching methods;+>>
<<+(2) the college or university charter school's educational program must be implemented under the direct

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supervision of a member of the teaching or research faculty of the public senior college or university;+>>
<<+(3) the faculty member supervising the college or university charter school's educational program must have

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substantial experience and expertise in education research, teacher education, classroom instruction, or educational
administration;+>>
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<<+(4) the college or university charter school's educational program must be designed to meet specific goals described
in the charter, including improving student performance, and each aspect of the program must be directed toward the
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attainment of the goals;+>>


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<<+(5) the attainment of the college or university charter school's educational program goals must be measured using
specific, objective standards set forth in the charter, including assessment methods and a time frame; and+>>
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<<+(6) the financial operations of the college or university charter school must be supervised by the business office
of the public senior college or university.+>>
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<< TX EDUC § 12.155 >>


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<<+Sec. 12.155. SCHOOL NAME. The name of a college or university charter school must include the name of the
public senior college or university operating the school.+>>
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<< TX EDUC § 12.156 >>


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<<+Sec. 12.156. APPLICABILITY OF CERTAIN PROVISIONS. (a) Except as otherwise provided by this
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subchapter, Subchapter D applies to a college or university charter school as though the college or university charter
school were granted a charter under that subchapter.+>>
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<<+(b) A charter granted under this subchapter is not considered for purposes of the limit on the number of open-
enrollment charter schools imposed by Section 12.101(b).+>>
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SECTION 20. Section 22.083, Education Code, is amended to read as follows:


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<< TX EDUC § 22.083 >>


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Sec. 22.083. ACCESS TO CRIMINAL HISTORY RECORDS BY LOCAL AND REGIONAL EDUCATION
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AUTHORITIES. (a) A school district, <<-open-enrollment charter school,->> private school, regional education
service center, or shared services arrangement may obtain from any law enforcement or criminal justice agency all
criminal history record information that relates to a person:
(1) whom the district, school, service center, or shared services arrangement intends to employ in any capacity; or

© 2018 Thomson Reuters. No claim to original U.S. Government Works. 13


OPEN-ENROLLMENT CHARTER SCHOOLS, 2001 Tex. Sess. Law Serv. Ch. 1504...

(2) who has indicated, in writing, an intention to serve as a volunteer with the district, school, service center, or shared
services arrangement.
(b) <<+An open-enrollment charter school shall obtain from any law enforcement or criminal justice agency all criminal

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history record information that relates to:+>>

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<<+(1) a person whom the school intends to employ in any capacity; or+>>
<<+(2) a person who has indicated, in writing, an intention to serve as a volunteer with the school.+>>

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<<+(c)+>> A school district, open-enrollment charter school, private school, regional education service center, or
shared services arrangement may obtain from any law enforcement or criminal justice agency all criminal history record

L.
information that relates to:
(1) a volunteer or employee of the district, school, service center, or shared services arrangement; or

a
(2) an employee of or applicant for employment by a person that contracts with the district, school, service center, or

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shared services arrangement to provide services, if:

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(A) the employee or applicant has or will have continuing duties related to the contracted services; and
(B) the duties are or will be performed on school property or at another location where students are regularly present.
<<+(d)+>> <<-(c)->> The superintendent of a district or the director of an open-enrollment charter school, private

k
school, regional education service center, or shared services arrangement shall promptly notify the State Board for

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Educator Certification in writing if the person obtains or has knowledge of information showing that an applicant for

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or holder of a certificate issued under Subchapter B, Chapter 21, has a reported criminal history.
SECTION 21. Section 25.088, Education Code, is amended to read as follows:

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<< TX EDUC § 25.088 >>
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Sec. 25.088. SCHOOL ATTENDANCE OFFICER. The school attendance officer may be selected by:
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(1) the county school trustees of any county; <<-or->>
(2) the board of trustees of any school district or the boards of trustees of two or more school districts jointly<<+;
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or+>>
<<+(3) the governing body of an open-enrollment charter school+>>.
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SECTION 22. Section 25.089(a), Education Code, is amended to read as follows:

<< TX EDUC § 25.089 >>


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(a) An attendance officer may be compensated from the funds of the county<<+,+>> <<-or the->> independent school
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district<<+, or open-enrollment charter school+>>, as applicable.


SECTION 23. Section 25.090, Education Code, is amended to read as follows:
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<< TX EDUC § 25.090 >>


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Sec. 25.090. ATTENDANCE OFFICER NOT SELECTED. <<+(a)+>> In those counties and independent school
op

districts where an attendance officer has not been selected, the duties of attendance officer shall be performed by the
school superintendents and peace officers of the counties and districts.
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<<+(b) If the governing body of an open-enrollment charter school has not selected an attendance officer, the duties
of attendance officer shall be performed by the peace officers of the county in which the school is located. +>>
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<<+(c)+>> Additional compensation may not be paid for <<-the->> services <<+performed under this section+>>.
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SECTION 24. Sections 25.093(f) and (g), Education Code, are amended to read as follows:
of

<< TX EDUC § 25.093 >>


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(f) A fine collected under this section shall be deposited as follows:


(1) one-half shall be deposited to the credit of the operating fund of<<+, as applicable:+>>
<<+(A)+>> the school district in which the child attends school<<+;+>>
<<+(B) the open-enrollment charter school the child attends;+>> or

© 2018 Thomson Reuters. No claim to original U.S. Government Works. 14


OPEN-ENROLLMENT CHARTER SCHOOLS, 2001 Tex. Sess. Law Serv. Ch. 1504...

<<+(C)+>> <<-of->> the juvenile justice alternative education program that the child has been ordered to
attend<<-, as applicable->>; and
(2) one-half shall be deposited to the credit of:

e
(A) the general fund of the county, if the complaint is filed in the county court or justice court; or

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(B) the general fund of the municipality, if the complaint is filed in municipal court.
(g) At the trial of any person charged with violating this section, the attendance records of the child may be presented

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in court by any authorized employee of the school district <<+or open-enrollment charter school, as applicable+>>.
SECTION 25. Section 25.095(a), Education Code, is amended to read as follows:

L.
<< TX EDUC § 25.095 >>

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(a) A school district <<+or open-enrollment charter school+>> shall notify a student's parent in writing if, in a six-
month period, the student has been absent without an excuse five times for any part of the day. The notice must state

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that if the student is absent without an excuse for 10 or more days or parts of days in a six-month period:
(1) the student's parent is subject to prosecution under Section 25.093; and

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(2) the student is subject to prosecution under Section 25.094.

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SECTION 26. Section 39.073(a), Education Code, is amended to read as follows:

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<< TX EDUC § 39.073 >>

(a) The agency shall annually review the performance of each district and campus on the indicators adopted under

ct
Sections 39.051(b)(1) through (7) and determine if a change in the accreditation status of the district is warranted.
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<<+The commissioner may determine how all indicators adopted under Section 39.051(b) may be used to determine
accountability ratings and to select districts and campuses for acknowledgment.+>>
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SECTION 27. Subchapter D, Chapter 39, Education Code, is amended by adding Section 39.0731 to read as follows:
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<< TX EDUC § 39.0731 >>


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<<+Sec. 39.0731. ALTERNATIVE ACCREDITATION STATUS PILOT PROGRAM FOR CERTAIN


DISTRICTS, CAMPUSES, AND OPEN-ENROLLMENT CHARTER SCHOOLS. (a) The commissioner may by rule
develop an alternative accreditation status pilot program for the 2001–2002 school year that is designed to reflect the
is

academic performance and improvement of students enrolled at a district, campus, or open-enrollment charter school
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that:+>>
<<+(1) primarily serves at-risk students, as defined in Section 29.081, as determined by the commissioner; or+>>
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<<+(2) is not required to administer assessment instruments under Section 39.023.+>>


<<+(b) The pilot program:+>>
<<+(1) must include an analysis of student performance and improvement on indicators determined by the
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commissioner under Section 39.073(a); and+>>


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<<+(2) may include an analysis of student performance on an assessment instrument authorized under Section 28.006.
+>>
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<<+(c) Notwithstanding participation in the pilot program, a district, campus, or open-enrollment charter school that
participates in the pilot program also continues to receive the accountability rating that the district, campus, or school
ia

would otherwise receive under this chapter and is subject to any applicable sanctions under this chapter based on that
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rating.+>>
<<+(d) Not later than December 1, 2002, the commissioner shall compile the results of the pilot program and any
of

recommendations in a report and submit the report to the governor, lieutenant governor, speaker of the house of
representatives, and the presiding officer of each standing committee of the senate and house of representatives having
Un

primary jurisdiction over public education.+>>


<<+(e) This section expires January 1, 2003.+>>
SECTION 28. Section 39.075(a), Education Code, is amended to read as follows:

© 2018 Thomson Reuters. No claim to original U.S. Government Works. 15


OPEN-ENROLLMENT CHARTER SCHOOLS, 2001 Tex. Sess. Law Serv. Ch. 1504...

<< TX EDUC § 39.075 >>

(a) The commissioner shall authorize special accreditation investigations to be conducted <<-under the following

e
circumstances->>:

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(1) when excessive numbers of absences of students eligible to be tested on state assessment instruments are determined;

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(2) when excessive numbers of allowable exemptions from the required state assessment are determined;
(3) in response to complaints submitted to the agency with respect to alleged violations of civil rights or other

L.
requirements imposed on the state by federal law or court order;
(4) in response to established compliance reviews of the district's financial accounting practices and state and federal

a
program requirements;

lv
(5) when extraordinary numbers of student placements in alternative education programs, other than placements under
Sections 37.006 and 37.007, are determined; <<-or->>

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(6) in response to an allegation involving a conflict between members of the board of trustees or between the board
and the district administration if it appears that the conflict involves a violation of a role or duty of the board members

k
or the administration clearly defined by this code<<+; or+>>

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<<+(7) as the commissioner otherwise determines necessary+>>.
SECTION 29. Sections 39.131(a) and (d), Education Code, are amended to read as follows:

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<< TX EDUC § 39.131 >>

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(a) If a district does not satisfy the accreditation criteria, the commissioner shall take any of the following actions, listed
tri
in order of severity, to the extent the commissioner determines necessary:
(1) issue public notice of the deficiency to the board of trustees;
is

(2) order a hearing conducted by the board of trustees of the district for the purpose of notifying the public of the
.D

unacceptable performance, the improvements in performance expected by the agency, and the sanctions that may be
imposed under this section if the performance does not improve;
(3) order the preparation of a student achievement improvement plan that addresses each academic excellence indicator
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for which the district's performance is unacceptable, the submission of the plan to the commissioner for approval, and
implementation of the plan;
is

(4) order a hearing to be held before the commissioner or the commissioner's designee at which the president of the
board of trustees of the district and the superintendent shall appear and explain the district's low performance, lack of
av

improvement, and plans for improvement;


(5) arrange an on-site investigation of the district;
Tr

(6) appoint an agency monitor to participate in and report to the agency on the activities of the board of trustees or
the superintendent;
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(7) appoint a master to oversee the operations of the district;


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(8) appoint a management team to direct the operations of the district in areas of unacceptable performance or require
the district to obtain certain services under a contract with another person;
lc

(9) if a district has been rated as academically unacceptable for a period of one year or more, appoint a board of
managers <<-composed of residents of the district->> to exercise the powers and duties of the board of trustees; or
ia

(10) if a district has been rated as academically unacceptable for a period of two years or more<<+:+>>
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<<+(A)+>><<-,->> annex the district to one or more adjoining districts under Section 13.054<<+;+>> or
<<+(B)+>> in the case of a home-rule school district <<+or open-enrollment charter school+>>, <<+order closure
of

of all programs operated under the district's or school's+>> <<-request the State Board of Education to revoke the
district's home-rule school district->> charter.
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(d) The costs of providing a monitor, master, management team, or special campus intervention team shall be paid by
the district. <<+If the district fails or refuses to pay the costs in a timely manner, the commissioner may:+>>
<<+(1) pay the costs using amounts withheld from any funds to which the district is otherwise entitled; or+>>

© 2018 Thomson Reuters. No claim to original U.S. Government Works. 16


OPEN-ENROLLMENT CHARTER SCHOOLS, 2001 Tex. Sess. Law Serv. Ch. 1504...

<<+(2) recover the amount of the costs in the manner provided for recovery of an overallocation of state funds under
Section 42.258.+>>
SECTION 30. Subchapter A, Chapter 46, Education Code, is amended by adding Section 46.012 to read as follows:

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<< TX EDUC § 46.012 >>

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<<+Sec. 46.012. APPLICABILITY TO OPEN-ENROLLMENT CHARTER SCHOOLS. An open-enrollment
charter school is not entitled to an allotment under this subchapter.+>>

L.
SECTION 31. Subchapter B, Chapter 46, Education Code, is amended by adding Section 46.036 to read as follows:

<< TX EDUC § 46.036 >>

a
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<<+Sec. 46.036. APPLICABILITY TO OPEN-ENROLLMENT CHARTER SCHOOLS. An open-enrollment

Ve
charter school is not entitled to an allotment under this subchapter.+>>
SECTION 32. Subchapter C, Chapter 53, Education Code, is amended by adding Section 53.351 to read as follows:

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<< TX EDUC § 53.351 >>

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<<+Sec. 53.351. BONDS FOR OPEN-ENROLLMENT CHARTER SCHOOL FACILITIES. (a) The Texas Public

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Finance Authority shall establish a nonprofit corporation to issue revenue bonds on behalf of authorized open-
enrollment charter schools for the acquisition, construction, repair, or renovation of educational facilities of those

ct
schools.+>>
<<+(b) The Texas Public Finance Authority shall appoint the directors of the corporation in consultation with the
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commissioner of education. Directors serve without compensation but are entitled to reimbursement for travel expenses
incurred in attending board meetings. The board shall meet at least once a year.+>>
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<<+(c) The corporation has all powers granted under the Texas Non-Profit Corporation Act (Article 1396–1.01 et
.D

seq., Vernon's Texas Civil Statutes) for the purpose of aiding authorized open-enrollment charter schools in providing
educational facilities. In addition, Sections 53.131, 53.15, 53.31, 53.32, 53.331, 53.34, 53.35, 53.36(a), and 53.37–53.42
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apply to and govern the corporation and its procedures and bonds.+>>
<<+(d) The corporation shall adopt rules governing the issuance of bonds on behalf of an authorized open-enrollment
charter school.+>>
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<<+(e) The comptroller shall establish a fund dedicated to the credit enhancement of bonds issued under this section.
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The fund may receive donations. The obligation of the fund is limited to an amount equal to the balance of the fund.+>>
<<+(f) A revenue bond issued under this section is not a debt of the state or any state agency, political corporation,
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or political subdivision of the state and is not a pledge of the faith and credit of any of these entities. A revenue bond is
payable solely from the revenue of the authorized open-enrollment charter school on whose behalf the bond is issued. A
revenue bond issued under this section must contain on its face a statement to the effect that:+>>
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<<+(1) neither the state nor a state agency, political corporation, or political subdivision of the state is obligated to
op

pay the principal of or interest on the bond; and+>>


<<+(2) neither the faith and credit nor the taxing power of the state or any state agency, political corporation, or
lc

political subdivision of the state is pledged to the payment of the principal of or interest on the bond.+>>
<<+(g) An educational facility financed in whole or in part under this section is exempt from taxation if the facility:+>>
ia

<<+(1) is owned by an authorized open-enrollment charter school;+>>


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<<+(2) is held for the exclusive benefit of the school; and+>>


<<+(3) is held for the exclusive use of the students, faculty, and staff members of the school.+>>
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SECTION 33. Section 411.097, Government Code, is amended by amending Subsections (c) and (d) and adding
Subsection (e) to read as follows:
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<< TX GOVT § 411.097 >>

© 2018 Thomson Reuters. No claim to original U.S. Government Works. 17


OPEN-ENROLLMENT CHARTER SCHOOLS, 2001 Tex. Sess. Law Serv. Ch. 1504...

(c) <<+An open-enrollment charter school is entitled to obtain from the department criminal history record information
maintained by the department that relates to a person who:+>>
<<+(1) is a member of the governing body of the school, as defined by Section 12.1012, Education Code; or+>>

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<<+(2) has agreed to serve as a member of the governing body of the school.+>>

ic
<<+(d)+>> Criminal history record information obtained by a school district, charter school, private school, service
center, commercial transportation company, or shared services arrangement under Subsection (a)<<+,+>> <<-or->>

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(b)<<+, or (c)+>> may not be released or disclosed to any person, other than the individual who is the subject of the
information, the Texas Education Agency, the State Board for Educator Certification, or the chief personnel officer of

L.
the transportation company, if the information is obtained under Subsection (a)(2).
<<+(e)+>> <<-(d)->> If a regional education service center or commercial transportation company that receives

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criminal history record information from the department under this section requests the information by providing to

lv
the department a list, including the name, date of birth, and any other personal descriptive information required by

Ve
the department for each person, through electronic means, magnetic tape, or disk, as specified by the department, the
department may not charge the service center or commercial transportation company more than the lesser of:
(1) the department's cost for providing the information; or

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(2) the amount prescribed by another law.

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SECTION 34. Section 140.005, Local Government Code, is amended to read as follows:

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<< TX LOCAL GOVT § 140.005 >>

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Sec. 140.005. ANNUAL FINANCIAL STATEMENT OF SCHOOL, ROAD, OR OTHER DISTRICT. The
governing body of a school district, <<+open-enrollment charter school,+>> junior college district, or a district or
tri
authority organized under Article III, Section 52, or Article XVI, Section 59, of the Texas Constitution, shall prepare an
is
annual financial statement showing for each fund subject to the authority of the governing body during the fiscal year:
(1) the total receipts of the fund, itemized by source of revenue, including taxes, assessments, service charges, grants
.D

of state money, gifts, or other general sources from which funds are derived;
(2) the total disbursements of the fund, itemized by the nature of the expenditure; and
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(3) the balance in the fund at the close of the fiscal year.
SECTION 35. Section 140.006(c), Local Government Code, is amended to read as follows:
is

<< TX LOCAL GOVT § 140.006 >>


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(c) The presiding officer of a school district shall submit a financial statement prepared under Section 140.005 to a daily,
weekly, or biweekly newspaper published within the boundaries of the district. If a daily, weekly, or biweekly newspaper
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is not published within the boundaries of the <<+ school+>> district, the financial statement shall be published in the
manner provided by Subsections (a) and (b). <<+The financial statement of an open-enrollment charter school shall be
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made available in the manner provided by Chapter 552, Government Code.+>>


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<< Repealed: TX EDUC § 12.1011 >>


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SECTION 36. (a) Section 12.1011, Education Code, is repealed.


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<< Note: TX EDUC § 12.101 >>


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(b) A charter for an open-enrollment charter school granted under the authority of Section 12.1011, Education Code,
as that section existed before repeal by this Act, is considered to have been granted under the authority of Section 12.101,
of

Education Code.
Un

<< Note: TX EDUC § 12.123 >>

© 2018 Thomson Reuters. No claim to original U.S. Government Works. 18


OPEN-ENROLLMENT CHARTER SCHOOLS, 2001 Tex. Sess. Law Serv. Ch. 1504...

SECTION 37. Not later than January 1, 2002, the commissioner of education shall adopt rules relating to training
for the members of governing bodies and officers of open-enrollment charter schools, as required by Section 12.123,
Education Code, as added by this Act.

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<< Note: TX EDUC § 22.083 >>

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SECTION 38. Beginning September 1, 2001, an open-enrollment charter school shall obtain, in compliance with
Section 22.083, Education Code, as amended by this Act, criminal history record information relating to each prospective

L.
employee or volunteer.

<< Note: TX LOCAL GOVT § 203.025 >>

a
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SECTION 39. Not later than September 1, 2002, an open-enrollment charter school in existence on September 1, 2001,

Ve
shall fulfill the requirements of Sections 203.025, 203.026, and 203.041, Local Government Code.

<< Note: TX EDUC § 12.106 >>

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SECTION 40. (a) The change in law made by Sections 12.106 and 12.107, Education Code, as amended by this Act,
applies beginning with the 2001–2002 school year, except as provided by this section.

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(b) An open-enrollment charter school operating on September 1, 2001, is funded as follows:
(1) for the 2001–2002 and 2002–2003 school years, the school receives funding according to the law in effect on August

ct
31, 2001;
(2) for the 2003–2004 school year, the school receives 90 percent of its funding according to the law in effect on August
tri
31, 2001, and 10 percent of its funding according to the change in law made by Sections 12.106 and 12.107, Education
Code, as amended by this Act;
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(3) for the 2004–2005 school year, the school receives 80 percent of its funding according to the law in effect on August
.D

31, 2001, and 20 percent of its funding according to the change in law made by Sections 12.106 and 12.107, Education
Code, as amended by this Act;
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(4) for the 2005–2006 school year, the school receives 70 percent of its funding according to the law in effect on August
31, 2001, and 30 percent of its funding according to the change in law made by Sections 12.106 and 12.107, Education
Code, as amended by this Act;
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(5) for the 2006–2007 school year, the school receives 60 percent of its funding according to the law in effect on August
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31, 2001, and 40 percent of its funding according to the change in law made by Sections 12.106 and 12.107, Education
Code, as amended by this Act;
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(6) for the 2007–2008 school year, the school receives 50 percent of its funding according to the law in effect on August
31, 2001, and 50 percent of its funding according to the change in law made by Sections 12.106 and 12.107, Education
Code, as amended by this Act;
y

(7) for the 2008–2009 school year, the school receives 40 percent of its funding according to the law in effect on August
op

31, 2001, and 60 percent of its funding according to the change in law made by Sections 12.106 and 12.107, Education
Code, as amended by this Act;
lc

(8) for the 2009–2010 school year, the school receives 30 percent of its funding according to the law in effect on August
31, 2001, and 70 percent of its funding according to the change in law made by Sections 12.106 and 12.107, Education
ia

Code, as amended by this Act;


fic

(9) for the 2010–2011 school year, the school receives 20 percent of its funding according to the law in effect on August
31, 2001, and 80 percent of its funding according to the change in law made by Sections 12.106 and 12.107, Education
of

Code, as amended by this Act;


(10) for the 2011–2012 school year, the school receives 10 percent of its funding according to the law in effect on August
Un

31, 2001, and 90 percent of its funding according to the change in law made by Sections 12.106 and 12.107, Education
Code, as amended by this Act; and
(11) for the 2012–2013 school year and subsequent school years, the school receives 100 percent of its funding according
to the change in law made by Sections 12.106 and 12.107, Education Code, as amended by this Act.

© 2018 Thomson Reuters. No claim to original U.S. Government Works. 19


OPEN-ENROLLMENT CHARTER SCHOOLS, 2001 Tex. Sess. Law Serv. Ch. 1504...

(c) The commissioner of education may adopt rules as necessary to implement this section.

<< Note: TX EDUC § 12.114 >>

e
SECTION 41. (a) The change in law made by Section 12.114, Education Code, as amended by this Act, applies to a

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revision proposed by an open-enrollment charter school that has not been approved by the State Board of Education

Pr
before September 1, 2001, regardless of the date on which the school proposed the revision.

<< Note: TX EDUC § 12.127 >>

L.
(b) The change in law made by Section 12.127, Education Code, as added by this Act, applies only to a cause of action

a
that accrues on or after September 1, 2001. A cause of action that accrued before September 1, 2001, is governed by the

lv
law in effect at the time the cause of action accrued, and that law is continued in effect for that purpose.

Ve
<< Note: TX EDUC § 12.1101 >>

SECTION 42. Section 12.1101, Education Code, as added by this Act, applies only to an application for a charter for

k
er
an open-enrollment charter school received by the State Board of Education on or after the effective date of this Act.
An application received before the effective date of this Act is governed by the law as it existed immediately before the

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effective date of this Act, and that law is continued in effect for that purpose.

<< Note: TX EDUC § 12.001 >>

ct
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SECTION 43. This Act prevails over any conflicting Act of the 77th Legislature, Regular Session, 2001, that amends
or repeals a provision of Title 2, Education Code, as amended by this Act, regardless of the relative dates of enactment.
is

SECTION 44. This Act takes effect September 1, 2001.


Passed by the House on April 5, 2001, by a non-record vote; the House refused to concur in Senate amendments to
.D

H.B. No. 6 on May 21, 2001, and requested the appointment of a conference committee to consider the differences
between the two houses; the House adopted the conference committee report on H.B. No. 6 on May 27, 2001, by a
Co

non-record vote; the House adopted H.C.R. No. 332 authorizing certain corrections in H.B. No. 6 on May 28, 2001,
by a non-record vote; passed by the Senate, with amendments, on May 17, 2001, by a viva-voce vote; at the request
of the House, the Senate appointed a conference committee to consider the differences between the two houses; the
is

Senate adopted the conference committee report on H.B. No. 6 on May 27, 2001, by a viva-voce vote; the Senate
av

adopted H.C.R. No. 332 authorizing certain corrections in H.B. No. 6 on May 28, 2001, by a viva-voce vote.
Tr

Filed without signature June 17, 2001.

Effective September 1, 2001.


y
op

TX LEGIS 1504 (2001)


lc

End of Document © 2018 Thomson Reuters. No claim to original U.S. Government Works.
ia
fic
of
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© 2018 Thomson Reuters. No claim to original U.S. Government Works. 20


Appendix 3

e
Greater Houston v. Paxton, 468 S.W.3d 51

ic
Pr
L.
a
lv
Ve
k
er
Cl
ct
tri
is
.D
Co
is
av
Tr
y
op
lc
ia
fic
of
Un
Greater Houston Partnership v. Paxton, 468 S.W.3d 51 (2015)
58 Tex. Sup. Ct. J. 1362

quid pro quo contract, which services were


designed enhance economic development,
468 S.W.3d 51
was not “supported in whole or in part
Supreme Court of Texas.

e
by public funds,” and thus, was not

ic
GREATER HOUSTON PARTNERSHIP, Petitioner, “government body,” within meaning of
Texas Public Information Act (TPIA); funds

Pr
v.
Ken PAXTON, Texas Attorney General; received from city constituted compensation
for services rendered under contract,
and Jim Jenkins, Respondents.

L.
organization received only small portion of its
No. 13–0745 annual revenues from contract, organization

a
| would still continue to operate and perform

lv
Argued March 25, 2015 same services without public funds. Tex. Gov't

Ve
| Code Ann. § 552.003(1)(A).
OPINION DELIVERED: June 26, 2015
Cases that cite this headnote

k
Synopsis

er
Background: Private nonprofit organization that received [2] Records
public funds from city pursuant to quid pro quo

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Judicial enforcement in general
contract brought action against Attorney General seeking
Whether an entity is a “governmental body”
declaratory judgment that it was not “government

ct
whose records are subject to disclosure under
body” within meaning of Texas Public Information Act.
the Texas Public Information Act (TPIA)
tri
Petitioner whose records request organization denied
presents a matter of statutory construction
intervened. The District Court, Travis County, 98th
that the appellate court reviews de novo. Tex.
is

Judicial District, Scott H. Jenkins, J., entered judgment


Gov't Code Ann. § 552.003(1)(A).
.D

for Attorney General and ordered disclosure of records


requested. Organization appealed, and Austin Court of 2 Cases that cite this headnote
Appeals, 407 S.W.3d 776, affirmed. Petition for review
Co

was granted.
[3] Statutes
Language and intent, will, purpose, or
is

policy
av

[Holding:] The Supreme Court, Guzman, J., held that


Statutes
private organization was not “supported in whole or in
Plain Language; Plain, Ordinary, or
Tr

part by public funds,” and thus, was not “government


Common Meaning
body,” within meaning of TPIA.
When interpreting a statute, the court's
y

primary objective is to ascertain and give


op

Reversed and rendered. effect to the Legislature's intent without


unduly restricting or expanding the act's
lc

Boyd, J., filed dissenting opinion in which Johnson and scope, and the court seeks that intent first and
Willett, JJ., joined. foremost in the plain language of the text.
ia

10 Cases that cite this headnote


fic

West Headnotes (15)


of

[4] Statutes
Undefined terms
Un

[1] Records Statutes


Agencies or custodians affected Context
Nonprofit organization that received public Undefined terms in a statute are typically
funds for services provided to city under given their ordinary meaning, but if a different

© 2018 Thomson Reuters. No claim to original U.S. Government Works. 1


Greater Houston Partnership v. Paxton, 468 S.W.3d 51 (2015)
58 Tex. Sup. Ct. J. 1362

or more precise definition is apparent from the


term's use in the context of the statute, the 3 Cases that cite this headnote
court will apply that meaning.

e
[9] Records

ic
11 Cases that cite this headnote
Agencies or custodians affected

Pr
For a private entity to be “sustained” by
[5] Statutes public funds, which would render the entity
Undefined terms

L.
a “government body” subject to the Texas
Statutes Public Information Act (TPIA) suggests

a
Construing together; harmony the existence of a financially dependent

lv
A court will not give an undefined term relationship between the governmental body
a meaning that is out of harmony or and a private entity or its subdivision redolent

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inconsistent with other terms in the statute; of that between a parent and child or principal
therefore, even if an undefined term has and agent; however, financial dependence

k
multiple meanings, the court recognizes and need not be absolute. Tex. Gov't Code Ann. §

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applies only the meanings that are consistent 552.003(1)(A).
with the statutory scheme as a whole.

Cl
2 Cases that cite this headnote
6 Cases that cite this headnote

ct
[10] Records
Agencies or custodians affected
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[6] Statutes
In general; factors considered A private entity “supported” by public
is

Statutes funds, which would qualify the entity as


a “government body” subject to the Texas
.D

Extrinsic Aids to Construction


Public Information Act (TPIA), would not
When interpreting a statute, the court will
just receive government funds; it would
Co

only resort to rules of construction or extrinsic


require them to operate in whole or in part.
aids when a statute's words are ambiguous.
Tex. Gov't Code Ann. § 552.003(1)(A).
is

2 Cases that cite this headnote


2 Cases that cite this headnote
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[7] Statutes
[11] Statutes
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Liberal or strict construction


Associated terms and provisions;
When interpreting a statute, liberal- noscitur a sociis
y

construction objectives do not permit a


The canon of statutory construction known
op

construction of the act untethered from its


as “noscitur a sociis” —“it is known by its
statutory moorings.
associates”—holds that the meaning of a word
lc

Cases that cite this headnote or phrase, especially one in a list, should be
known by the words immediately surrounding
ia

it.
[8] Statutes
fic

Context 1 Cases that cite this headnote


of

Meanings of statutory terms cannot be


determined in isolation but must be drawn [12] Statutes
Un

from the context in which they are Language


used; the court must therefore analyze the
Even a liberal construction of a statute must
reasonableness of each definition in light of
remain grounded in the statute's language.
the statutory context.

© 2018 Thomson Reuters. No claim to original U.S. Government Works. 2


Greater Houston Partnership v. Paxton, 468 S.W.3d 51 (2015)
58 Tex. Sup. Ct. J. 1362

1 Cases that cite this headnote Charles Roy, Daniel T. Hodge, First Asst. Attorney
General, David A. Talbot Jr., Consumer Protection,

e
David C. Mattax, James Edward Davis, Kimberly
[13] Records

ic
L. Fuchs, Matthew H. Frederick, Assistant Solicitor
Agencies or custodians affected
General, Warren Kenneth Paxton Jr., Office of the

Pr
Determining whether a private entity partially Attorney General, Rosalind L. Hunt, Office of Attorney
funded with public funds qualifies as a General, Administrative Law Divison, Austin, TX, Eric

L.
“governmental body” subject to the Texas Lyf Yollick, Yollick Law Firm, P.C., The Woodlands,
Public Information Act (TPIA) will likely TX, for Respondents.

a
require case-specific analysis and a close

lv
examination of the facts. Tex. Gov't Code Opinion
Ann. § 552.003(1)(A).

Ve
JUSTICE GUZMAN delivered the opinion of the
2 Cases that cite this headnote Court, in which CHIEF JUSTICE HECHT, JUSTICE
GREEN, JUSTICE LEHRMANN, JUSTICE DEVINE,

k
and JUSTICE BROWN joined.

er
[14] Statutes
Associated terms and provisions; The question presented here is whether a private entity

Cl
noscitur a sociis operating like a chamber of commerce is a “governmental
The canon of statutory construction “noscitur body” subject to public disclosure of its private business
a sociis” that a word or phrase, especially
ct
affairs under the Texas Public Information Act. In seeking
tri
one in a list, should be known by the to promote the public's legitimate interest in transparent
words immediately surrounding it, cannot be government, the Act imposes considerable disclosure
is

used to render express statutory language obligations on “governmental bod[ies].” Importantly, the
meaningless.
.D

statutory definition of “governmental body” extends only


to “the part, section, or portion of an organization,
1 Cases that cite this headnote
corporation, commission, committee, institution, or
Co

agency that spends or that is supported in whole or in part


[15] Statutes by public funds.” See TEX. GOV'T CODE § 552.003(1)(A)
is

Superfluousness (xii) (emphasis added). This operates to prevent nominally


When interpreting a statute, the court will private entities whose work might otherwise qualify
av

generally attempt to avoid treating statutory them as de facto public agencies from circumventing the
language as surplusage. Act's disclosure requirements. This case requires us to
Tr

decide whether the term “supported” encompasses private


Cases that cite this headnote entities contracting at arm's length with the government
y

to provide general and specific services or whether the


op

term properly includes only those entities that could not


perform similar services without public funds and, are
lc

*53 On Petition for Review from the Court of Appeals thus, sustained—in whole or part—by such funds.
for the Third District of Texas. Honorable Scott H.
ia

Jenkins, Judge. When a private entity enters into a contract and receives
fic

government funds in exchange for its services, the


Attorneys and Law Firms entity's right to conduct its affairs confidentially may
of

be in tension with the public's right to know how


Bill Aleshire, Aleshire Law PC, Jennifer S. Riggs, Riggs government funds are spent. Transparency, openness, and
Un

Aleshire & Ray, Austin, TX, Lynne Liberato, Polly accountability in the government are all of fundamental
B. Fohn, Haynes and Boone LLP, Houston, TX, for importance. However, these important policy objectives
Petitioner. cannot extinguish the privacy rights properly belonging to
private business entities in Texas. By liberally authorizing

© 2018 Thomson Reuters. No claim to original U.S. Government Works. 3


Greater Houston Partnership v. Paxton, 468 S.W.3d 51 (2015)
58 Tex. Sup. Ct. J. 1362

public access to government records while simultaneously functions much like thousands of chambers of commerce
shielding private business from unwarranted interference, across the nation that promote municipal and regional
the Legislature carefully balanced these *54 conflicting economies.

e
interests. Mindful of the delicate equilibrium between

ic
these equally compelling concerns, we conclude that the Consistent with its business model, GHP contracted
term “supported,” which helps define the breadth of to provide consulting, event planning, and marketing

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the Act, unambiguously includes only those entities at services to the City of Houston, pursuant to an
least partially sustained by public funding. Because the “Agreement for Professional Services.” GHP and the

L.
statutory language is unambiguous, we need not consider City signed similar agreements annually for several years,
the accuracy or vitality of the test articulated in Kneeland including 2007 and 2008, the time periods at issue here.

a
v. National Collegiate Athletic Ass'n, 850 F.2d 224 (5th The contracts included a “Scope of Services” exhibit that

lv
Cir. 1988), which the Attorney General's Open Records delineated, under general headers, the specific services that

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Division has traditionally applied to private entities in GHP would provide to the City. Under these contracts,
cases involving open-record requests. GHP received quarterly payments in arrears contingent
upon the City's approval of performance reports detailing

k
Here, Greater Houston Partnership, a nonprofit the particular services GHP provided in that quarter.

er
corporation providing economic-development services to If GHP failed to deliver the contracted-for services to

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the City and other clients pursuant to quid pro quo the City's satisfaction, the contracts authorized the City
contracts, contests whether it is a “governmental body” to pay GHP for the portion of services satisfactorily
in whole or in part. Applying Kneeland, the Attorney rendered. Notably, however, the two contracts differed
General and lower courts held that it is. We hold, however,
ct
in one significant respect: the 2008 contract expressly
tri
that Greater Houston Partnership is not a “governmental provided that “[n]othing in this Agreement shall be
body” under the Texas Public Information Act because construed to imply that [GHP] is subject to the Texas
is

it is not wholly or partially sustained by public funds; Public Information Act.”


.D

we therefore reverse the court of appeals' judgment and


render judgment for Greater Houston Partnership. The instant suit arose from a May 2008 request Houston-
area resident Jim Jenkins submitted to GHP in which he
Co

sought “a copy of the check register for [GHP] for *55


all checks issued for the year 2007.” Jenkins grounded
I. Factual and Procedural Background
is

his request in the Texas Public Information Act (TPIA),


Greater Houston Partnership (GHP) is a private, claiming that “[p]ublic records show that [GHP] is an
av

nonprofit corporation that promotes regional economic organization that spends or that is supported in whole
growth and an attractive business climate for a ten- or in part by public funds,” and GHP is, therefore,
Tr

county area centered around Houston, Texas. GHP's “subject to the Public Information Act in the same manner
stated purpose is to enhance economic prosperity, as a governmental body.” See TEX. GOV'T CODE
y

facilitate business relocation and expansion, encourage § 552.003(1)(A)(xii) (defining “governmental body” for
op

international outreach initiatives, and provide strategic purposes of the TPIA).


planning to advocate for “the improvement of
lc

commercial, industrial, agricultural, civic, and cultural GHP objected to Jenkin's request and did not disclose
affairs” in the Houston region. In furtherance of this the information. GHP acknowledged it received public
ia

objective, GHP provides consulting, event planning, and funds from the City but disagreed it qualified as a
fic

marketing services (including advertising and market “governmental body” under the TPIA because the public
research) to its roughly 2,100 member companies on a funds were compensation for vendor services provided
of

contractual basis. GHP also hosts numerous networking pursuant to an arm's-length contract with the City. The
and professional development events, including several City's annual payments under the contract amounted to
Un

weekly GHP Council meetings on topics relevant to the less than 8% of GHP's total annual revenue; member
regional economy. GHP operates on an annual budget contributions, on the other hand, totaled more than 90%
of approximately $11.7 million, and these funds emanate of its revenue. GHP further noted that of the roughly 2,100
primarily from membership revenue. In short, GHP companies that comprise its membership, only four could

© 2018 Thomson Reuters. No claim to original U.S. Government Works. 4


Greater Houston Partnership v. Paxton, 468 S.W.3d 51 (2015)
58 Tex. Sup. Ct. J. 1362

be described as governmental bodies. Refusing to disclose


the requested information, GHP referred the matter to the • An agency-type relationship was created between
Texas Attorney General as required under the TPIA. See GHP and the City of Houston.

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id. §§ 552.301(a), .307.

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The court of appeals agreed with the trial court and
In an informal letter ruling, the Attorney General's Open affirmed its judgment, albeit over a strongly worded

Pr
Records Division agreed with Jenkins, and concluded dissent. 407 S.W.3d at 786, 787. Finding the phrase
that GHP was a “governmental body” subject to the “supported in whole or in part by public funds”

L.
TPIA's disclosure requirements specifically with respect ambiguous, the lower court relied on an extra-textual
analytical construct known as the Kneeland test to
to the 2007 contract with the City. 1 Tex. Att'y Gen.

a
conclude GHP qualified as a governmental body under
OR2008–16062; see also TEX. GOV'T CODE § 552.306.

lv
In reaching this conclusion, the Attorney General the TPIA. 3 Id. at 782–83. The dissent criticized the court's

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determined that GHP's operations were “supported” by reliance on the Kneeland test, finding the statutory context
the City because: (1) GHP provided vague and indefinite unambiguously dictated only the narrow construction of
services to the City aimed at advancing the City's overall “supported” as applied to a private entity. Id. at 788

k
economic development; (2) GHP and the City shared a (Jones, C.J., dissenting).

er
common purpose and objective centered around the City's

Cl
economy; and (3) GHP provided services traditionally On appeal to this Court, GHP advances three principal
supplied by the government. Tex. Att'y Gen. OR2008– reasons why it is not a “governmental body” under the
TPIA. First, GHP contends the phrase “supported ...

ct
16062.
by public funds” unambiguously excludes the City's
tri
In response to the Attorney General's informal ruling, payments to GHP. Second, even if the language is
GHP filed a declaratory-judgment action against the ambiguous, the Court should reject the Kneeland test
is

Attorney General seeking a declaration that: (1) the because it is unclear and not grounded in the statutory
.D

Attorney General lacked jurisdiction over the dispute language. Third, GHP argues it is not “supported ... by
and (2) even if jurisdiction was proper, GHP was not a public funds” even under the Kneeland test. The Attorney
General disputes all three points. First, it contends that
Co

“governmental body” under the TPIA. See TEX. GOV'T


CODE §§ 552.3215(e), .321, .325(a). Shortly after GHP GHP plainly qualifies as a “governmental body” under
filed suit, Jenkins filed an additional request seeking the TPIA; limiting the statute's reach to entities that
is

a copy of GHP's 2008 “disbursement registers and/or exist solely to carry out government functions would
check registers,” including the number, date, payee name, frustrate its purpose of openness, and GHP is “supported”
av

amount, and purpose. Noting that GHP had already by public funds. Second, the Kneeland test is not only
the relevant framework in which to evaluate the TPIA's
Tr

filed suit regarding the 2007 check-register request, the


Attorney General closed the second request without a application to otherwise private entities, the Legislature
finding and directed the trial court to resolve the dispute. has effectively endorsed the Kneeland test. 4 Third, the
y

Jenkins intervened in the lawsuit shortly thereafter. See id. court of appeals properly applied the three Kneeland
op

§ 552.325 (authorizing a requestor to intervene in the suit). elements to GHP, a “governmental body” subject to
regulation under the TPIA.
lc

After a bench trial, the trial court found GHP was a


“governmental body” supported by public funds and *57 We granted GHP's petition for review to determine
ia

ordered disclosure of the 2007 and 2008 check registers. 2 the proper scope of the funding source element of the
fic

The trial court determined that: TPIA's “governmental body” definition.


of

*56 • GHP received public funds to provide economic


development and promotion services for or on behalf
Un

II. Discussion
of the City;

• GHP and the City shared the common purpose of A. Background Law
economic development and promotion; and

© 2018 Thomson Reuters. No claim to original U.S. Government Works. 5


Greater Houston Partnership v. Paxton, 468 S.W.3d 51 (2015)
58 Tex. Sup. Ct. J. 1362

The Legislature enacted the Texas Open Records Act [1] [2] [3] [4] [5] [6] GHP argues that as
in 1973 to increase government transparency in the a private entity, it is not subject to the TPIA's
wake of public scandals, including a massive stock- disclosure requirements because it does not qualify

e
fraud imbroglio known as the Sharpstown scandal. 5 as a “governmental body” under the statute's plain

ic
In 1993, the Open Records Act was recodified without language. GHP therefore contends that it is entitled
to seek the privacy protections typically afforded to

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substantive revision as the Texas Public Information
nongovernmental entities. Determining whether GHP is
Act. 6 Currently codified in Chapter 552 of the Texas
a “governmental body” whose records are subject to

L.
Government Code, the TPIA's stated policy objectives
disclosure under the TPIA presents a matter of statutory
are to provide accountability and transparency in
construction that we review de novo. City of Garland

a
government by establishing mechanisms to foster public
v. Dall. Morning News, 22 S.W.3d 351, 357 (Tex.2000).

lv
access to government records. See TEX. GOV'T CODE
When interpreting a statute, our primary objective is to
§§ 552.001–.353. Importantly, an entity's disclosure

Ve
ascertain and give effect to the Legislature's intent without
obligations under the TPIA hinge on whether it is in fact
unduly restricting or expanding the Act's scope. City of
a “governmental body.”
Lorena v. BMTP Holdings, L.P., 409 S.W.3d 634, 641

k
(Tex.2013). We seek that intent first and foremost in

er
The TPIA defines a “governmental body” as one of twelve
the plain meaning of the text. Id.; see also Tex. Lottery
different types of entities. See id. § 552.003(1)(A). Most

Cl
Comm'n v. First State Bank of DeQueen, 325 S.W.3d 628,
of the entities listed in section 552.003(1)(A) are identified
635 (Tex.2010). “Undefined terms in a statute are typically
quite precisely; for example, a “school district board of
given their ordinary meaning, but if a different or more

ct
trustees” is statutorily defined as a “governmental body.”
precise definition is apparent from the term's use in the
Id. § 552.003(1)(A)(v). Others are more amorphous,
tri
context of the statute, we apply that meaning.” TGS–
including the section at issue here, which subjects “the
NOPEC Geophysical Co. v. Combs, 340 S.W.3d 432, 439
is
part, section, or portion of an organization, corporation,
(Tex.2011). “However, we will not give an undefined term
commission, committee, institution, or agency that spends
.D

a meaning that is out of harmony or inconsistent with


or that is supported in whole or in part by public funds”
other terms in the statute.” State v. $1,760.00 in U.S.
to the TPIA. Id. § 552.003(1)(A)(xii). The crux of our
Currency, 406 S.W.3d 177, 180 (Tex.2013). Therefore,
Co

inquiry in this case is the meaning of “supported in whole


even if an undefined term has multiple meanings, we
or in part by public funds.” The proper scope of this
recognize and apply only the meanings that are consistent
phrase is significant because the consequences of being
is

with the statutory scheme as a whole. Id. at 180–81. We


characterized as a governmental body are considerable.
only resort to rules of construction or extrinsic aids when
av

The most obvious is that under section 552.221 of


a statute's words are ambiguous. Entergy Gulf States, Inc.
the Texas Government Code, a “governmental body”
v. Summers, 282 S.W.3d 433, 437 (Tex.2009). Finally, in
Tr

must promptly produce “public information” on request


construing the TPIA, we are mindful of the legislative
unless an exemption from disclosure applies and is timely
mandate that the TPIA be “liberally construed in favor of
y

asserted. 7 See id. §§ 552.101–.123, .221; see also Tex. granting a request for information.” TEX. GOV'T CODE
op

Comptroller of Pub. Accounts v. Att'y Gen. of Tex., 354 § 552.001(b).


S.W.3d 336, 341–48 (Tex.2010) (construing an exemption
lc

under the TPIA). The term “public information” broadly As an initial matter, we observe the parties' agreement
includes “information that is collected, assembled, or that GHP is a “governmental body” only if it, or a
ia

maintained under a law or ordinance or in connection “part, section, or portion” of it “is supported in whole
with the transaction of official business” either: (1) “by
fic

or in part by public funds.” It is likewise undisputed


a governmental body” or (2) “for a governmental body
that GHP receives “public funds.” 8 The parties disagree,
and the governmental body owns the information or has
of

however, on the meaning and application of the statutory


a right of access to it.” TEX. GOV'T CODE § 552.002(a).
phrase, “supported in whole or in part by.” GHP argues
Un

that the TPIA cannot reasonably be interpreted to


apply to privately-controlled corporations that perform
*58 B. Statutory Construction services under quid pro quo government contracts.
According to GHP, the Legislature unambiguously

© 2018 Thomson Reuters. No claim to original U.S. Government Works. 6


Greater Houston Partnership v. Paxton, 468 S.W.3d 51 (2015)
58 Tex. Sup. Ct. J. 1362

intended “supported in whole or in part by public funds” of the statutory context. See Jaster v. Comet II Const.,
to identify entities that were created or exist to carry out Inc., 438 S.W.3d 556, 562 (Tex.2014); see also R.R.
government functions and whose existence are maintained Comm'n v. Tex. Citizens for a Safe Future & Clean

e
in whole or in part with public funds. Conversely, Water, 336 S.W.3d 619, 628 (Tex.2011) ( “We generally

ic
the Attorney General declares the statutory language avoid construing individual provisions of a statute in
ambiguous because it could reasonably be read to apply to isolation from the statute as a whole.”). The statute's

Pr
any contract between the government and a private entity. first contextual clue emerges from the words immediately
We agree with GHP. surrounding “supported.” To avoid disharmony with

L.
the rest of the statute, “supported” must bear reference
[7] “Supported” is an undefined term with multiple and to “public funds,” so it is clear that non-monetary

a
varied dictionary definitions. However, only two of the definitions of “supported” make little sense in context.

lv
definitions are even remotely possible as applied to the See WEBSTER'S THIRD NEW INT'L DICTIONARY

Ve
TPIA and only one of those definitions is reasonable when 921 (2002) (defining “funds” as “available pecuniary
the statute is considered as a whole. Reading the definition resources”). Applying this limitation, we winnow the field
of “governmental body” in its contextual environment— down to two potential meanings for “supported,” both of

k
as we are bound to do—reveals that the TPIA applies which are faithful to the statutory context:

er
only to entities acting as the functional equivalent *59
(1) to pay the costs of: maintain; to supply with the

Cl
of a governmental body that are “sustained” at least in
part, by public funds. In reaching this conclusion, we means of maintenance (as lodging, food or clothing) or
remain ever mindful of the statute's liberal-construction to earn or furnish funds for maintaining; or
clause. But liberal-construction objectives do not permit
ct
(2) to provide a basis for the existence or subsistence
tri
a construction of the Act untethered from its statutory
of: serve as the source of material or immaterial
moorings.
is
supply, nourishment, provender, fuel, raw material, or
sustenance of.
.D

Familiar interpretive guides and established canons of


construction inform our reading of section 552.003(1)(A) See WEBSTER'S THIRD NEW INT'L DICTIONARY
(xii). In determining the meaning of “supported ... by
Co

2297 (2002); accord BLACK'S LAW DICTIONARY


public funds,” we begin, as we must, with the statute's 1668 (10th ed. 2009) (defining the term “support” to mean
plain language. Tex. Lottery Comm'n, 325 S.W.3d at 635. “[s]ustenance or maintenance”). In statutory context,
is

Common English words frequently have a number of “supported” must thus mean sustenance, maintenance, or
dictionary definitions, some quite abstruse and esoteric, both.
av

others more comprehensible and commonplace. See, e.g.,


$1,760.00 in U.S. Currency, 406 S.W.3d at 180–81 (noting Another contextual clue derives from the Act's purpose.
Tr

that “novelty” has multiple dictionary definitions). Not The statutory context indicates that all section 552.001(a)
surprisingly, “supported,” the key term here, is subject to entities are either the government or its functional
y

at least six disparate definitions in its verb form alone, with equivalent. First, the statute provides the public with
op

many of those including more nuanced sub-definitions. “complete information about the affairs of government
See WEBSTER'S THIRD NEW INT'L DICTIONARY and the official acts of public officials and employees.”
lc

2297 (2002). By reading the term in context, however, we TEX. GOV'T CODE § 552.001(a). The stated purpose
can narrow the universe of possible definitions to the most of permitting access to this information is to allow the
ia

apposite. See TGS–NOPEC Geophysical Co., 340 S.W.3d public to “retain control over the instruments they have
fic

at 439. created.” Id. A reasonable definition of “supported”


must be compatible with this stated purpose. The statute
of

[8] As always, we are cognizant of the “fundamental also specially *60 defines the term “governmental
principle of statutory construction and indeed of language body.” In defining that term, the Legislature carefully
Un

itself that words' meanings cannot be determined in omitted any broad reference to private entities, instead
isolation but must be drawn from the context in including private entities insofar as they are “supported ...
which they are used.” Id. at 441. We must therefore by public funds.” Compare id. with FLA. STAT. §
analyze the reasonableness of each definition in light 119.011(2). In light of this omission, which we presume

© 2018 Thomson Reuters. No claim to original U.S. Government Works. 7


Greater Houston Partnership v. Paxton, 468 S.W.3d 51 (2015)
58 Tex. Sup. Ct. J. 1362

the Legislature purposefully selected, the scope of the giving way.” See WEBSTER'S THIRD NEW INT'L
term “governmental body,” as applied to private entities, DICTIONARY 2304 (2002); see also BLACK'S LAW
must be filtered through the Act's purpose and function DICTIONARY 1676 (10th ed. 2009) (defining “sustain”

e
of allowing access to instrumentalities of government. to mean “to nourish and encourage”). Applying this

ic
Thus, the Act only applies to private entities acting as construction, the universe of private entities constituting
the functional equivalent of the government. See TGS– governmental bodies is obviously more circumscribed

Pr
NOPEC Geophysical Co., 340 S.W.3d at 439. because only a small segment of private entities could
fairly be considered to be sustained by the government.

L.
Defining “supported” to mean “maintenance” is To be “sustained” by public funds suggests the existence
untenable because doing so risks sweeping any private of a financially dependent relationship between the

a
entity that received any public funds within the definition governmental body and a private entity or its subdivision

lv
of a “governmental body.” See 407 S.W.3d at 781 redolent of that between a parent and child or principal

Ve
(citing Tex. Ass'n of Appraisal Dists., Inc. v. Hart, 382 and agent. Financial dependency need not be absolute,
S.W.3d 587, 591–92 (Tex.App.–Austin 2012, no pet.)). To however. Rather, the government could be one of
resurrect the example provided by the court of appeals, several contributing sources. But sustenance implies

k
if we equate “supported” with supplying an entity with that if the government ceased to provide financial

er
a means by which the entity can pay for necessities, support, the entity would be unable to meet its financial

Cl
then even a paper vendor with hundreds of clients would obligations. Unquestionably, a *61 private entity would
qualify as a “governmental body” merely by virtue of qualify under a financially dependent construction of
getting paid for selling office supplies to a single state “supported” if it could not pursue its mission and
office. See 407 S.W.3d at 781. Every company must
ct
objectives without the receipt of public funds, even if that
tri
expend funds to stay in business; it would be impossible funding only partially financed the entity's endeavors. In
to conclude that any business compensated for providing short, an entity “supported” by public funds would not
is

goods or services to a governmental entity pursuant to a just receive government funds; it would require them to
.D

quid pro quo contract was not using public funds to pay operate in whole or in part. 9 If we construe “supported ...
for necessities. Thus, any entity doing business with the by public funds” in this manner, we must conclude GHP
government would be a “governmental body.”
Co

is not “supported” by public funds because it receives only


a small portion of its revenue from government contracts.
“Quid pro quo” means “[a]n action or thing that is And even if these government contracts were eliminated,
is

exchanged for another action or thing of more or less it could continue to operate given the substantial revenue
equal value.” See BLACK'S LAW DICTIONARY 1443 derived from other non-governmental sources. Moreover,
av

(10th ed. 2009). As the dissent agrees, the Legislature did GHP could and would continue to promote the greater
not intend for the statute to reach entities involved in
Tr

Houston economy to advance its own interests and those


quid pro quo transactions with the government, and it of its more than 2,000 non-government members. GHP,
is undisputed that a fair reading of the statute cannot in sum, does not require public funds and thus, is not
y

countenance such a result. 407 S.W.3d at 789. We reject sustained by public funds.
op

any reading of “supported” that would injudiciously apply


public transparency laws to private businesses merely [11] Because only one definition fits the statutory context,
lc

because they receive public funds under a contract with the


we conclude that “supported ... by public funds” must
government. Accordingly, the “maintenance” definition be appropriately defined to only include those entities
ia

of “supported” is not textually viable. “sustained” by public funds—thereby ensuring that the
fic

statute encompasses only those private entities dependent


[9] [10] In contrast, defining “supported” as on the public fisc to operate as a going concern.
of

“sustenance” ensures that only an entity, or its “part, Although not dispositive, our conclusion is reinforced by
section or portion,” whose existence is predicated on the fact that this construction of the term “supported”
Un

the continued receipt of government funds would qualify is consistent with the scope and nature of the eleven
as a “governmental body.” Among the meanings of other types of entities more clearly described as a
“sustain” are “to cause to continue; to keep up; to carry “governmental body” in the same provision. See TEX.
or withstand; to nourish; to prevent from sinking or GOV'T CODE § 552.003(1)(A). The canon of statutory

© 2018 Thomson Reuters. No claim to original U.S. Government Works. 8


Greater Houston Partnership v. Paxton, 468 S.W.3d 51 (2015)
58 Tex. Sup. Ct. J. 1362

construction known as noscitur a sociis —“it is known OF CMTY. SERVS., U.S. DEP'T OF HEALTH
by its associates”—holds that the meaning of a word & HUMAN SERVS., COMMUNITY SERVICES
or phrase, especially one in a list, should be known BLOCK GRANT STATE AND ELIGIBLE ENTITY

e
by the words immediately surrounding it. See TGS– TECHNICAL ASSISTANT SERVICES 16–17(2015)

ic
NOPEC Geophysical Co., 340 S.W.3d at 441. We rely (listing eligibility requirements). 11 A section 552.003(i)
on this principle to avoid ascribing to one word a

Pr
(A)(xi) “governmental body” must be “authorized by
meaning so broad that it is incommensurate with the this state to serve a geographic area of the state.”
statutory context. Accordingly, in evaluating the breadth See TEX. GOV'T CODE § 552.003(1)(A)(xi). This

L.
of “supported in whole or in part by public funds,” we requirement presupposes that the nonprofit has a close
may consider the scope of the enumerated categories working relationship with the state government. See 10

a
preceding it. See Fiess v. State Farm Lloyds, 202 S.W.3d TEX. ADMIN. CODE § 5.211 (requiring an authorized

lv
744, 750–51 (Tex.2006). Of the eleven other examples of a nonprofit to submit monthly performance reports to the

Ve
“governmental body” listed in the statutory definition of state agency monitoring the program).
the term, two stand out as arguably the most analogous
to a private nonprofit like GHP. Thus, we briefly consider The foregoing examples describe ostensibly private

k
each in comparison. entities deputized by the government to provide services

er
traditionally considered governmental prerogatives or

Cl
First, the statute expressly identifies as a “governmental responsibilities. Thus, although nominally private, each is
body” the governing board of a nonprofit water supply in fact acting as a quasi-public entity performing a core
or wastewater service corporation that is organized under

ct
governmental function. There is a significant difference
Chapter 67 of the Texas Water Code and exempt from between an entity of this nature and one like GHP, and our
tri
ad valorem taxation under the Texas Tax Code. See construction of “supported in whole or in part by public
TEX. GOV'T CODE § 552.003(1)(A)(ix). A nonprofit funds” reflects as much by capturing only those entities
is

corporation of this type is authorized to engage in several acting as the functional equivalent of the government. See
.D

traditional governmental functions, such as the right to Fiess, 202 S.W.3d at 751.
build and operate water- and waste-treatment facilities
and sell water to political subdivisions, private entities,
Co

[12] Our construction of the term “supported” remains


or individuals. See TEX. WATER CODE § 67.002. faithful to the TPIA's liberal-construction clause. See
Additionally, depending on the size of the county it serves, TEX. GOV'T CODE § 552.001(b) (“This chapter shall
is

a nonprofit water or waste-water service provider may be liberally construed in favor of granting a request
even establish and enforce “customer water conservation for information.”). We have consistently recognized this
av

practices” through the assessment *62 of “reasonable clause expresses an important statement of legislative
penalties as provided in the corporation's tariff.” See
Tr

purpose, and we continue to adhere to it today. See,


id. § 67.011(a)(5), (b). By virtue of their special powers e.g., City of Garland, 22 S.W.3d at 364 (“Unlike the
and privileges, these nonprofit utility operators essentially [Freedom of Information Act], our Act contains a strong
y

function as quasi-public corporations servicing the public. statement of public policy favoring public access to
op

See Garwood Irr. Co. v. Williams, 243 S.W.2d 453, 456 governmental information and a statutory mandate to
(Tex.Civ.App.–Galveston 1951, writ ref'd n.r.e.). construe the Act to implement that policy and to construe
lc

it in favor of granting a request for information.”). Still,


The second potentially private “governmental body” even a liberal construction must remain grounded in
ia

identified in the statute is a nonprofit corporation eligible the statute's language and cannot overwhelm contextual
fic

to receive federal funding, in the form of block grants, indicators limiting public intrusion into the private affairs
for anti-poverty programs at the state level. TEX. GOV'T
of nongovernmental entities. 12
of

CODE § 552.003(1)(A)(xi). Under this federal initiative, a


nonprofit may receive funds if it demonstrates “expertise
[13] *63 In sum, we define “supported in whole or
Un

in providing training to individuals and organizations on


in part by public funds” to include only those private
methods of effectively addressing the needs of low-income
entities or their sub-parts sustained, at least in part, by
families and communities” through a detailed application
public funds, meaning they could not perform the same
process. 10 42 U.S.C. § 9913(c)(2) (2012); see also OFFICE or similar services without the public funds. If GHP

© 2018 Thomson Reuters. No claim to original U.S. Government Works. 9


Greater Houston Partnership v. Paxton, 468 S.W.3d 51 (2015)
58 Tex. Sup. Ct. J. 1362

(as a private entity that receives government funds even Children & Family Servs., Inc., 87 S.W.3d 67, 78–79
while not being supported by them) presents the hard (Tenn.2002); see also State ex rel. Oriana House, Inc. v.
case, entities on the ends of the spectrum—those that Montgomery, 110 Ohio St.3d 456, 854 N.E.2d 193, 198–

e
receive no government money, and those that receive 99 (2006).

ic
only government money—will obviously present much
more straightforward questions. Determining whether Recognizing the right of private businesses to conduct

Pr
a partially funded entity qualifies as a “governmental their affairs autonomously, at least one court has
body” will likely require case-specific analysis and a close adopted a *64 presumption that a private entity is

L.
examination of the facts. Nonetheless, we recognize as a not subject to an open-records request absent clear
general proposition that an entity, like GHP, that does and convincing evidence that the private entity is the

a
not depend on any particular revenue source to survive functional equivalent of a governmental body. See, e.g.,

lv
—public or private—is not sustained even in part by State ex rel Oriana House, Inc., 854 N.E.2d at 200. In

Ve
government funds. Florida, the only state whose statute expressly includes
private entities, the Florida Supreme Court narrowly
interpreted its open-records act to exclude private entities

k
merely providing professional services to a governmental

er
C. Other Jurisdictions
body. See News & Sun–Sentinel Co. v. Schwab, Twitty &

Cl
While our construction of the TPIA is supported by a Hanser Architectural Group, Inc., 596 So.2d 1029, 1031
plain-meaning reading of the statute, an examination of (Fla.1992) (construing FLA. STAT. § 119.011(2)). In
fact, of those states with similar statutes, we have not

ct
similar open-records statutes from other jurisdictions is
also instructive. In states where open-records acts apply to encountered one that has construed an open-records act to
tri
entities “supported in whole or in part by public funds,” include a private entity providing specific and measurable
our sister courts have unanimously construed the phrase vendor services to a governmental body, even if that
is

to exclude, as a general matter, private entities receiving entity receives public funds. We find it difficult to ignore
.D

public funds pursuant to quid pro quo agreements without this interpretative uniformity, especially considering the
regard to whether such an agreement is the entity's gravitas of the interests at stake.
Co

only funding source. See, e.g., Indianapolis Convention


& Visitors Ass'n, Inc. v. Indianapolis Newspapers, Inc., Our plain-meaning construction also comports with
577 N.E.2d 208, 214 (Ind.1991) (“In situations involving federal precedent interpreting the federal analogue—
is

a quid pro quo, that is, measured goods or services the Freedom of Information Act (FOIA). See Tex.
given in exchange for payment based on identifiable Comptroller of Pub. Accounts, 354 S.W.3d at 342 (noting
av

quantities of goods or services, a private entity would that because the Legislature modeled the TPIA on the
not be transformed into a public entity because it would FOIA, federal precedent is persuasive in construing the
Tr

not be maintained and supported by public funds.”); Act). Under the FOIA, “agency,” the federal equivalent
Weston v. Carolina Research & Dev. Found., 303 S.C. of “governmental body,” is defined to include:
y

398, 401 S.E.2d 161, 165 (1991) (“[T]his decision does not
op

any executive department,


mean that the [open-records act] would apply to business
military department, Government
enterprises that receive payment from public bodies in
lc

corporation, Government
return for supplying specific goods or services on an
controlled corporation, or other
arms length basis.”); Adams Cnty. Record v. Greater N.D.
ia

establishment in the executive


Ass'n, 529 N.W.2d 830, 836 (N.D.1995) (“When there is
branch of the Government
fic

a bargained-for exchange of value, a quid pro quo, the


(including the Executive Office of
entity is not supported by public funds.”). Additionally,
the President), or any independent
of

even in those states whose open-records acts fail to define


regulatory agency.
“governmental body” or an equivalent term, our sister
Un

courts still narrowly construe the statute to include only 5 U.S.C. § 552(f)(1) (2012). In interpreting this broad
private entities that have a relationship so intertwined with language, the United States Supreme Court held that
the government that they are the “functional equivalent of a private entity receiving federal funding is considered
a governmental agency.” Memphis Publ'g Co. v. Cherokee a “government controlled corporation” and subject to

© 2018 Thomson Reuters. No claim to original U.S. Government Works. 10


Greater Houston Partnership v. Paxton, 468 S.W.3d 51 (2015)
58 Tex. Sup. Ct. J. 1362

FOIA disclosure requirements only if the private entity “the direction given is a mite uncertain.” Kneeland, 850
is also subjected to “extensive, detailed, and virtually F.2d at 228. The dissent finds Kneeland “persuasive”
day-to-day supervision” by the government. Forsham v. but we do not reach that analysis because of our

e
Harris, 445 U.S. 169, 180, 100 S.Ct. 977, 63 L.Ed.2d 293 determination that the statutory language unambiguously

ic
(1980). The federal supervision must be “substantial ... excludes GHP from qualifying as a “governmental
and not just the exercise of regulatory authority necessary body.” Nonetheless, we think it worth brief pause to

Pr
to assure compliance with the goals of the federal grant.” note Kneeland 's questionable foundation, as it—along
Id. at 180 n.11, 100 S.Ct. 977. Thus, narrowly defining with the raft of informal Attorney General rulings that

L.
“supported in whole or in part by public funds” under bookend the decision—constitute the “forty years of legal
Texas law is consistent with the approach of other interpretations” that we supposedly ignore in today's

a
jurisdictions featuring similar acts and the United States opinion. 13 Op. at 68 (Boyd, J., dissenting). But many

lv
Supreme Court's interpretation of the federal act on which of these rulings were informal and, as such lack any

Ve
the TPIA is based. precedential value. Put simply, the weight of this legal
authority is considerably less august than the dissent's
formulation implies.

k
er
D. Response to the Dissent
While the dissent purports to rehabilitate Kneeland,

Cl
[14] We briefly address some of the contentions in the its revised test is at best a partial improvement. The
dissenting opinion. Regarding statutory construction, revised test makes it virtually impossible for an entity

ct
there is little disagreement about the guiding principles that provides intangible deliverables, such as consulting,
and relevant canons involved here, and we agree, of advertising, or legal services, to satisfy the “specific
tri
course, that the canon of noscitur a sociis “cannot be and measurable services” prong of the test. The dissent
used to render express statutory language meaningless.” portrays GHP as sharing only broad, amorphous goals
is

Op. at 83 (Boyd, J., dissenting). We disagree as to the with the City. Yet, the “broad” contract language
.D

proper implementation of the canon, however. The dissent referenced by the dissent actually refers to GHP's
asserts that the first eleven definitions of “governmental more general overarching objectives (essentially, these
Co

body” in the TPIA should be cabined off from the twelfth statements of objectives function as titles under which
definition of that term because the twelfth definition “uses specific obligations of the contract are delineated). Each
specific language, inherently different than the language broad objective is followed by a list of specific services
is

of the other definitions.” Id. at 82. The dissent, thus, GHP promised to provide to achieve those objectives.
argues that the nature of the first eleven definitions For example, GHP was hired “to identify new business
av

cannot inform the twelfth. We disagree. All twelve are opportunities, secure economic incentives and increase
definitions of governmental bodies, and given that the
Tr

outreach and recruitment activities to the region's targeted


twelfth definition is the most open-ended, blinders would key industries to strengthen the City of Houston as
be required to construe it in isolation *65 from its a competitive place to do business.” In furtherance of
y

statutory predecessors. Separating the definitions in this that objective, GHP is contractually obligated to develop
op

way would not only be artificial, it would also deprive us business relationships with the top twenty-five companies
of a key source of insight into the parameters of the more not currently headquartered in the City; create and
lc

expansive twelfth definition. implement a business-retention program to provide quick


responses to companies in the City; and arrange and host
ia

More significant, however, is the dissent's suggestion ten recruiting trips, or “Signature Events,” for Houston-
fic

that the statute is ambiguous. The dissent, building on based executives to visit target companies and pitch them
this imprudent reading, would look to Attorney General on the City's business advantages. These services are
of

decisions and the Kneeland test for “further guidance.” Id. specific and measurable and are the sort of quid pro quo
at 85. In canvassing the landscape of informal Attorney exchanges typical of a vendor services contract in that
Un

General rulings and divining instruction therefrom, the industry.


dissent resurrects Kneeland 's questionable methodology,
which did the same. And as that court itself noted, *66 Thus, we do not believe that the monetary payments
even if “[o]ne may have no quarrel with the formulae,” due to GHP under the 2007 and 2008 agreements are

© 2018 Thomson Reuters. No claim to original U.S. Government Works. 11


Greater Houston Partnership v. Paxton, 468 S.W.3d 51 (2015)
58 Tex. Sup. Ct. J. 1362

“general or unrestricted payment[s] provided to subsidize precisely what the Legislature intended.” In re Estate of
or underwrite the entity's activities” rather than “specific Nash, 220 S.W.3d 914, 917–18 (Tex.2007); see also In
measurable services.” Id. at 86. Even the dissent admits re City of Georgetown, 53 S.W.3d 328, 336 (Tex.2001)

e
that some—but not all—of GHP's activities qualify as (noting that statutory redundancies may mean that “the

ic
“specific measurable services,” so the disagreement here is Legislature repeated itself out of an abundance of caution,
more a matter of degree than anything else. for emphasis, or both”). Regardless of whether such

Pr
drafting caution is at work here, the point remains that
The dissent's revised test would also require that “the there are a host of possible explanations addressing the

L.
funds be intended to promote a purpose, interest, or dissent's concerns.
mission that the governmental and private entities share

a
and would both pursue even in the absence of their

lv
contractual relationship.” Id. at 88. The dissent posits
III. Conclusion

Ve
that a law firm may share a broad goal with a client,
but the firm's interest remains “transaction specific” in Amidst all the argument attempting to classify GHP as
a way that GHP's engagement is not. Id. at 89. At a governmental body, it is worth recalling precisely what

k
the risk of quibbling, we dispute that this metaphorical GHP is not: GHP is not a government agency, nor is it

er
dividing line is nearly that clear or marked. Many a quasi-public agency specifically listed under the Texas

Cl
law firms are hired not merely for a specific litigation Government Code as a “governmental body.” GHP does
matter but rather to provide more enduring and wide- not rely on its government contracts to sustain itself as a
ranging counsel. And more importantly, while the dissent

ct
going concern; as all parties acknowledge, the government
takes for granted that GHP and the City's interests funds it receives constitute a relatively minuscule portion
tri
are perfectly aligned (and presumably always will be), of *67 GHP's annual budget. The only way GHP can
that assumption is debatable. For instance, although qualify as a “governmental body,” then, is if it can be said
is

the vast majority of cities presumably welcome financial to be “supported in whole or in part by public funds.”
.D

investment, growth can prove politically divisive—just


witness the debates over gentrification that grip many GHP, like countless chambers of commerce nationwide,
major cities experiencing explosive economic expansion.
Co

provides marketing, consulting, and event-planning


Regardless, the point is that GHP is hardly the auxiliary services to the City and other clients pursuant to quid
and mirror of the City that the dissent portrays it to be, pro quo contracts. Like the lobbying shops and law firms
is

and the proposed revision of the Kneeland test will not that also populate the State payroll, GHP shares many
significantly clarify this confused area of the law. common objectives with the City, but without more, such
av

shared interests can hardly transform a service provider


[15] The dissent also contends that “the Court writes the into a government appendage. A private entity engaged
Tr

words ‘in part’ completely out of the statutory definition.” in economically delicate work should not be subjected to
Id. at 79. Nothing so drastic is occurring here. The invasive disclosure requirements merely because it counts
y

statute's “in part” language may envision a multi-division the government as one client among many. Transparency
op

entity that does business with the government, but not is a real concern, to be sure, and the TPIA's liberal-
uniformly and not across all units. For instance, one construction mandate reflects the depth of this interest.
lc

can conceptualize a subdivision of a large corporation But liberal construction is not tantamount to boundless
wholly funded by government contracts; nevertheless, reach. Yet, even if not directly subject to disclosure
ia

because the subdivision is only a small part of the large obligations under the TPIA, GHP's transactions with the
fic

organization, the government business forms a relatively government are hardly in a black box; the City—which
small portion of the corporation's total revenue. In this is indisputably a “governmental body”—must disclose
of

scenario, the organization may be said to be supported information regarding its contractors, including GHP.
“in part” by public funds. Moreover, there may be
Un

more overlap between “in part” and the neighboring Applying the TPIA's plain and unambiguous language,
statutory language than the dissent allows. While we we hold that GHP is not “supported in whole or in part
generally attempt to avoid treating statutory language by public funds” and thus is not a “governmental body”
as surplusage, “there are times when redundancies are under the TPIA. Because the relevant provisions of the

© 2018 Thomson Reuters. No claim to original U.S. Government Works. 12


Greater Houston Partnership v. Paxton, 468 S.W.3d 51 (2015)
58 Tex. Sup. Ct. J. 1362

TPIA are unambiguous, we do not apply the analysis part by public funds” and thus a “governmental body”
outlined in Kneeland v. National Collegiate Athletic Ass'n, if it (1) receives public funds, (2) not as compensation
850 F.2d 224 (5th Cir. 1988), nor any other extra-textual or consideration paid in exchange for “specific goods”

e
construct. We therefore reverse the court of appeals' or “specific measurable services,” but as a general or

ic
judgment and render judgment for Greater Houston unrestricted payment provided to subsidize or underwrite
Partnership. the entity's activities, and (3) those activities promote a

Pr
purpose, interest, or mission that the governmental and
private entities share and would each pursue even in

L.
the absence of their contractual relationship. Because the
JUSTICE BOYD filed a dissenting opinion, in which
evidence establishes all three of these elements in this case,

a
JUSTICE JOHNSON and JUSTICE WILLETT joined.
I would hold on this record that the Greater Houston

lv
Partnership is a governmental body. Because the Court

Ve
JUSTICE BOYD, joined by JUSTICE JOHNSON and holds otherwise, I respectfully dissent.
JUSTICE WILLETT, dissenting.
Forty-two years ago, the Texas Legislature passed what

k
has become “widely regarded as the strongest and most

er
I.
successful open government law in the country.” 1 Just

Cl
three years later, in this Court's first opinion addressing
Background
the new Texas Open Records Act, 2 we confirmed that

ct
it is the Legislature's policymaking role to balance “the This case presents a single question of statutory
public's right of access” against “potential abuses of the construction: what does the Texas Public Information Act
tri
right,” and the Court's role is merely “to enforce the mean when it refers to a “part, section, or portion” of
public's right of access given by the Act.” Indus. Found.
is
an entity that is “supported in whole or in part by public
of the S. v. Tex. Indus. Accident Bd., 540 S.W.2d 668, funds”? Id. Purporting to rely on “[f]amiliar interpretive
.D

675 (Tex.1976). Balancing these interests, the Legislature guides and established canons of construction,” ante at 59,
decided that the Act should apply to “the part, section, the Court discards over forty years of legal interpretations
Co

or portion” of any “organization [or] corporation ... that and announces a brand new interpretation that, at best,
is supported in whole or in part by public funds.” TEX. reflects the Court's concerns instead of the Legislature's
GOV'T CODE § 552.003(1)(A)(xii). That may be bad language. In light of the Court's analysis, and to place
is

policy, or it may be good policy, but it is the policy of the issue in perspective, I begin by highlighting the Act's
av

Texas, and this Court's only task is to enforce it. relevant requirements, the reasons for its enactment, prior
constructions of the language at issue, and the evidence
Tr

To enforce the Legislature's policy choice in this case, here regarding the Partnership and its support.
we must decide what it *68 means for a “part, section,
or portion” of a corporation to be “supported in
y

A. Requirements of the Act


op

whole or in part by public funds.” See id. The Court


adopts the narrowest construction possible, identifying
two requirements that appear nowhere in the statute's The Public Information Act requires the “officer for
lc

language. The Court's all-or-nothing construction is public information of a governmental body” 3 to


irreconcilable with the provision's express inclusion of a “promptly produce public information” upon request.
ia

“part, section, or portion” of an entity that is “supported TEX. GOV'T CODE § 552.221(a). “Public information”
fic

in whole or in part by public funds.” See id. (emphasis means information “that is written, produced, collected,
added). Striving to be faithful to the Act's plain language, assembled, or maintained under a law or ordinance or
of

mindful of its express mandate that courts construe it in connection with the transaction of official business,”
liberally in favor of access to information, and respectful either (1) “by a governmental body;” (2) “for a
Un

of the many prior decisions of the Texas Attorneys governmental body” if the governmental body owns the
General charged with interpreting and enforcing the Act, information, has a right of access to it, or “spends or
I would hold that a “part, section, or portion” of a private contributes public money for the purpose of writing,
organization or corporation is “supported in whole or in producing, collecting, assembling, or maintaining the

© 2018 Thomson Reuters. No claim to original U.S. Government Works. 13


Greater Houston Partnership v. Paxton, 468 S.W.3d 51 (2015)
58 Tex. Sup. Ct. J. 1362

information;” or (3) “by an individual officer or employee within one of the Act's exceptions, id. § 552.306(a); see
of a governmental body in the officer's or employee's also id. § 552.306(b) (requiring the Attorney General
official capacity and the information pertains to official to issue “a written opinion” and provide a copy to

e
business of the governmental *69 body.” Id. § 552.002(a). the requestor). Through its Open Records Division,

ic
“Information is in connection with the transaction the Attorney General's Office issues thousands of open
of official business if the information is created by, records letter rulings every year, including more than

Pr
transmitted to, received by, or maintained by an officer 23,000 in 2014, and it is on pace to surpass that number
or employee of the governmental body in the officer's this year. 4 If a governmental body fails to *70 request

L.
or employee's official capacity, or a person or entity an Attorney General decision when and as required,
performing official business or a governmental function the requested information “is presumed to be subject to

a
on behalf of a governmental body, and pertains to official required public disclosure and must be released unless

lv
business of the governmental body.” Id. § 552.002(a-1). there is a compelling reason to withhold the information.”

Ve
Id. § 552.302.
The Act does not require a governmental body to
produce public information that is “considered to be If a governmental body refuses to request an Attorney

k
confidential by law, either constitutional, statutory, or General decision or refuses to produce public information

er
by judicial decision.” Id. § 552.101. The Act itself or information that the Attorney General has determined

Cl
provides numerous other exceptions to its disclosure is public and not excepted from disclosure, the Attorney
requirement, which include, among other things, certain General or a requestor may file suit for a writ of
personnel records, id. § 552.102, litigation records, id.

ct
mandamus compelling the governmental body to make
§ 552.103, information that “would give advantage to the information available. Id. § 552.321. Conversely, a
tri
a competitor or bidder,” id. § 552.104, attorney-client governmental body may file suit against the Attorney
information, id. § 552.107, trade secrets and commercial General, seeking declaratory relief from compliance with
is

financial information, id. § 552.110, personal and family the Attorney General's decision. Id. § 552.324(a). In that
.D

information of governmental employees, id. § 552.117(a), suit, however, a governmental body can only rely on
and “information [that] relates to economic development exceptions it asserted when it requested the Attorney
negotiations involving a governmental body and a
Co

General's decision, unless the exception is based on a


business prospect that the governmental body seeks to federal law requirement or involves another person's
have locate, stay, or expand in or near the territory of the property or privacy interests. Id. § 552.326(a), (b).
is

governmental body,” id. § 552.131(a). The Act does not


allow a governmental body to unilaterally decide for itself The Act's requirements apply only to a “governmental
av

whether it can withhold requested information. Instead, a body,” which the Act defines to mean:
governmental body that wishes to withhold information
Tr

in response to a request must ask the Attorney General to (i) a board, commission, department, committee,
decide whether the information fits within one of the Act's institution, agency, or office that is within or is
y

exceptions. Id. § 552.301(a). created by the executive or legislative branch of state


op

government and that is directed by one or more


It is difficult to overstate the Attorney General's role elected or appointed members;
lc

in this process. The Act assigns to the Attorney


General the duty to “maintain uniformity in the (ii) a county commissioners court in the state;
ia

application, operation, and interpretation” of the Act


(iii) a municipal governing body in the state;
fic

and authorizes the Attorney General to “publish any


materials, including detailed and comprehensive written (iv) a deliberative body that has rulemaking or quasi-
of

decisions and opinions, that relate to or are based on this judicial power and that is classified as a department,
chapter.” Id. § 552.011. Upon receipt of a governmental agency, or political subdivision of a county or
Un

body's request for a decision, the Attorney General municipality;


considers comments and arguments from any interested
person, id. § 552.304(a), and then must “promptly render (v) a school district board of trustees;
a decision” on whether the requested information is
(vi) a county board of school trustees;

© 2018 Thomson Reuters. No claim to original U.S. Government Works. 14


Greater Houston Partnership v. Paxton, 468 S.W.3d 51 (2015)
58 Tex. Sup. Ct. J. 1362

liberally construed to implement this policy.” Id. Courts


(vii) a county board of education; must construe the Act's provisions “in favor of disclosure
of requested information.” Jackson v. State Office of
(viii) the governing board of a special district;

e
Admin. Hearings, 351 S.W.3d 290, 293 (Tex.2011); see also

ic
(ix) the governing body of a nonprofit corporation TEX. GOV'T CODE § 552.001(b) (“This chapter shall
be liberally construed in favor of granting a request for

Pr
organized under Chapter 67, Water Code, that
provides a water supply or wastewater service, or information.”).
both, and is exempt from ad valorem taxation under

L.
Section 11.30, Tax Code;
C. Prior Constructions of the Act

a
(x) a local workforce development board created under

lv
Pursuant to their responsibility to “maintain uniformity
Section 2308.253;
in the application, operation, and interpretation” of the

Ve
(xi) a nonprofit corporation that is eligible to receive Act, TEX. GOV'T CODE § 552.011, Texas Attorneys
funds under the federal community services block General have issued numerous opinions addressing

k
grant program and that is authorized *71 by this whether private entities—including several chambers of

er
state to serve a geographic area of the state; and commerce and similar organizations—were “supported in
whole or in part by public funds.” Respecting the Attorney

Cl
(xii) the part, section, or portion of an organization, General's unique role, courts have given deference
corporation, commission, committee, institution, or to Attorney General interpretations and applications,

ct
agency that spends or that is supported in whole or most notably the Fifth Circuit in Kneeland v. National
in part by public funds[.] Collegiate Athletic Ass'n, 850 F.2d 224, 228 (5th Cir. 1988).
tri
Id. § 552.003(1)(A)(i)–(xii). The question here is whether
is

the Greater Houston Partnership is “supported in whole 1. Pre-Kneeland Attorney General Decisions
.D

or in part by public funds,” and thus a “governmental


body” under part (xii). “Public funds” means “funds of In 1973, shortly after the Act became effective, the
Attorney General's very first open records decision
Co

the state or of a governmental subdivision of the state.”


Id. § 552.003(5). addressed the statutory language we address today and
concluded that a private bank was not “supported in
is

whole or in part by public funds” merely because it


B. Reasons for the Act received and held deposits of public funds. Tex. Att'y
av

Gen. ORD–1 (1973). Six years later, the Attorney General


The Public Information Act is unique in its extensive concluded that an organization very similar to the
Tr

explanation of the policies that led to its enactment. As Partnership—a private, nonprofit corporation chartered
the Court explains, the Legislature first adopted the Act to promote the interests of the Dallas–Fort Worth
y

in response to the “Sharpstown scandal.” Ante at 57. The metropolitan area—was a governmental body under the
op

Act begins by expressing the “fundamental philosophy” Act. Tex. Att'y Gen. ORD–228 (1979). Pursuant to a
that “government is the servant and not the master of contract, the City of Fort Worth paid the corporation
lc

the people” and “the policy of this state that each person $80,000 to “[c]ontinue its current successful programs
is entitled, unless otherwise expressly provided by law, and implement such new and innovative programs as
ia

at all times to complete information about the affairs of will further its corporate objectives and common *72
government and the official acts of public officials and
fic

City's interests and activities” over a three-year period.


employees.” TEX. GOV'T CODE § 552.001(a). While Id. The Attorney General concluded that, by using the
the people of Texas have delegated governing authority
of

phrase “supported in whole or in part,” the Legislature


to public employees, they “do not give their public “did not intend to extend the application of the Act
Un

servants the right to decide what is good for the people to private persons or businesses simply because they
to know and what is not good for them to know.” Id. provide specific goods or services under a contract with a
Because “[t]he people insist on remaining informed so governmental body.” Id. But this contract did not “impose
that they may retain control over the instruments they a specific and definite obligation on the [corporation]
have created,” the Act expressly provides that it “shall be

© 2018 Thomson Reuters. No claim to original U.S. Government Works. 15


Greater Houston Partnership v. Paxton, 468 S.W.3d 51 (2015)
58 Tex. Sup. Ct. J. 1362

to provide a measurable amount of service in exchange were not governmental bodies because neither of them
for a certain amount of money as would be expected received any public funds. Tex. Att'y Gen. Op. Nos. JM–
in a typical arms-length contract for services between a 154 (1984), JM–596 (1986). Then, in 1987, the Attorney

e
vendor and purchaser.” Id. Thus, not every “contract General concluded that a volunteer fire department was a

ic
with a governmental body causes the records of a private governmental body under the Act because fire protection
contractor to be open,” but a private entity is supported is “traditionally provided by governmental bodies,”

Pr
by public funds, and is thus a “governmental body,” when volunteer fire departments have “strong affiliations
the public funds are “used for the general support of the with public agencies,” and the contract provided the

L.
[entity] rather than being attributable to specific payment department with funds “to carry on its duties and
for specific measurable services.” Id. responsibilities,” which the Attorney General considered

a
to be for its “general support.” Tex. Att'y Gen. Op. No.

lv
Three years later, the Attorney General relied on JM–821 (1987). The Attorney General stated that the

Ve
ORD–228 to find that another chamber-of-commerce- “test” for whether an entity is a governmental body under
like organization—a private, nonprofit entity created the Act “cannot be applied mechanically” and that the
to promote manufacturing and industrial development “precise *73 manner of funding is not the sole dispositive

k
in the Bryan area—was a governmental body because issue.” Id. Instead, the Attorney General considered “[t]he

er
the City of Bryan's contractual payment of $48,000 overall nature of the relationship,” and concluded “a

Cl
was like an “unrestricted” grant, rather than payment contract or relationship that involves public funds and
for specific measurable services. Tex. Att'y Gen. ORD– that indicates a common purpose or objective or that
302 (1982) (noting that the situation was “virtually creates an agency-type relationship” will bring the private
identical” to that in ORD–228). That same year, the
ct
entity within the Act's definition of governmental body.
tri
Attorney General concluded that a private medical service Id.
provider for the Amarillo Hospital District was not a
is

governmental body under the Act because the parties'


2. Kneeland v. NCAA
.D

contract prescribed specific measurable services, including


ambulance services, for which the provider received a
In 1988, the Fifth Circuit was asked whether the
monthly sum “equal to the difference between cash
Co

National Collegiate Athletic Association (NCAA) and


receipts and approved operating expenditures of the
the former Southwest Conference (SWC), which received
ambulance service.” Tex. Att'y Gen. ORD–343 (1982).
public funds from several Texas public universities, were
is

“supported in whole or in part by public funds” and


The following year, the Attorney General determined
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thus “governmental bodies” under the Act. Kneeland,


that a proposed athletic conference consisting of member
850 F.2d at 228. In addressing this issue, the Court
universities would be a governmental body under the
Tr

expressly based its analysis on the Attorneys General's


Act because each university would pay an upfront
prior decisions, noting that “[t]he usual deference paid to
“membership fee” and subsequent annual fees that would
y

formal opinions of state attorneys general is accentuated


be used for the conference's “general support ... rather
op

in this case because the Texas Legislature has formally


than being attributable to specific payments for specific
invited its Attorney General to interpret the Act when
measurable services.” Tex. Att'y Gen. Op. No. JM–
asked to do so.” Id. at 228–29. Construing the statute's
lc

116 (1983) (quoting Tex. Att'y Gen. ORD–228). The


language and extrapolating principles from the Attorneys
conference's constitution stated one of its purposes was
ia

General's decisions, the Court cobbled together the


to aid members in incorporating intercollegiate athletics
following criteria—now known as the “Kneeland test”—
fic

within their educational programs and to “place and


for determining whether a private entity is “supported ...
maintain such athletics under the same administrative and
by public funds” and thus a governmental body under the
of

academic control.” Id. The constitution did not identify


Act:
any specific, measurable services that the conference
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would provide in exchange for the public funds. Id. • “The Act does not apply to ‘private persons or
businesses simply because they provide specific goods
The Attorney General later determined that a private high or services under a contract with a government body.’
school and a private nonprofit water supply corporation ” Id. at 228 (quoting Tex. Att'y Gen. ORD–1).

© 2018 Thomson Reuters. No claim to original U.S. Government Works. 16


Greater Houston Partnership v. Paxton, 468 S.W.3d 51 (2015)
58 Tex. Sup. Ct. J. 1362

supporting the festival and gave the commission the


• “[A]n entity receiving public funds becomes a right, subject to necessary approvals, to lease city-owned
governmental body under the Act, unless its premises, obtain permits for parades and concession

e
relationship with the government imposes ‘a specific stands along parade route, grant permission to place

ic
and definite obligation ... to provide a measurable seating along parade route, and assign its permit and
amount of service in exchange for a certain amount lease rights to other entities sponsoring the event. Id.

Pr
of money as would be expected in a typical arms- The Attorney General nevertheless concluded that the
length contract for services between a vendor and commission was not a governmental body because it did

L.
purchaser.’ ” Id. (quoting Tex. Att'y Gen. Op. No. not receive any public funds. Id. (“The threshold question
JM–821, which quotes Tex. Att'y Gen. ORD–228). is whether the commission receives any funds from the

a
City of San Antonio.”). The Attorney General rejected

lv
• “[A] contract or relationship that involves public funds
the argument that money the commission received from
and that indicates a common purpose or objective

Ve
the sale of tickets for seating along the parade route was
or that creates an agency-type relationship between a
“public funds” because the money would otherwise have
private entity and a public entity will bring the private
been paid to the city. Id. (“By requiring the commission

k
entity within the ... definition of a ‘governmental
to get a permit for erecting bleachers and limiting the

er
body.’ ” Id. (quoting Tex. Att'y Gen. Op. No. JM–
charge per seat, the city is not granting public funds to the
821).

Cl
commission, nor do the charges for seats constitute funds
• “[S]ome entities, such as volunteer fire departments, of the city.”).

ct
will be considered governmental bodies if
they provide ‘services traditionally provided by In 1992, the Attorney General concluded that the Dallas
tri
governmental bodies.’ ” Id. (quoting Tex. Att'y Gen. Museum of Art was a governmental body under the
Op. No. JM–821). Act, even though it received 85% of its revenue from
is

private sources. Tex. Att'y Gen. ORD–602 (1992). The


.D

Based on these principles and the Attorneys General's city owned some of the artwork at the museum, owned
decisions from which they were drawn, the Kneeland court and maintained the premises housing the museum, and
paid the museum's utilities, half of the museum employees'
Co

held that the NCAA and SWC were not governmental


bodies under the Act. Id. at 230–31. With respect to salaries, and a pro rata portion of the insurance premiums.
the NCAA, the court concluded that the universities Id. The museum admitted that it received public funds but
is

“receive[d] a quid pro quo, in sufficiently identifiable and argued that it received the funds in exchange for “known,
measurable quantities of services,” in exchange for the specific, and measurable services” as opposed to general
av

public funds they paid to the NCAA. Id. at 230. Similarly, support. Id. Relying on Kneeland and the prior decisions,
the court concluded that the SWC provided “specific and the Attorney General disagreed, concluding that while
Tr

guageable services which negate[d] the general support the city received “valuable services in exchange for its
element required for a governmental body designation.” obligations” to the museum, those “highly specialized,
y

Id. at 231. unique services” could not be “known, specific, or


op

measurable,” and the city thus instead provided funds for


the museum's general support. Id. The Attorney General
lc

3. Post-Kneeland Attorney General Decisions nevertheless held that the museum was not required to
disclose the requested records because only the part of the
ia

Attorneys General have had several opportunities to


museum supported by public funds was a governmental
address the issue since Kneeland, and in doing so have
fic

body, and the records related to a collection the museum


adopted *74 the federal court's synopsis of the principles
owned as part of its permanent collection, not to the
from their prior decisions. A few years after Kneeland, the
of

part of the museum for which the city provided “direct


Attorney General concluded that a private commission
support.” Id. (noting the city's ownership of the building
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created by the San Antonio Chamber of Commerce


in which the collection was housed and its payment of a
to coordinate the annual Fiesta celebration was not a
portion of the overhead expenses was “tangential” and
governmental body. Tex. Att'y Gen. ORD–569 (1990).
“insufficient to bring documents relating to the collection
The city designated the commission as its “official agency”
within the scope of the act”).
responsible for planning, coordinating, and financially

© 2018 Thomson Reuters. No claim to original U.S. Government Works. 17


Greater Houston Partnership v. Paxton, 468 S.W.3d 51 (2015)
58 Tex. Sup. Ct. J. 1362

under this contract, the [Partnership] has not sufficiently


Again addressing chamber-of-commerce-type entities, demonstrated that the nature of the services it provides are
the Attorney General conducted a similar analysis in known, specific, or measurable.” Id. “Consequently,” the

e
holding that the Arlington Chamber of Commerce and Attorney General concluded, “the [Partnership's] records

ic
the Arlington Economic Development Foundation were concerning its operations that are directly supported by
governmental bodies under the Act. See Tex. Att'y governmental bodies are subject to the Act as public

Pr
Gen. ORD–621 (1993). The foundation admitted that information.” Id. (emphasis added).
it received public funds but argued that it did so

L.
in exchange for specific, measurable services. Id. The In addition to arguing that it was not a governmental
Attorney General disagreed, concluding that while the body, the Partnership alternatively relied on the Act's

a
city received “valuable services in exchange for the public exceptions to disclosure for certain economic development

lv
funds,” the agreement failed “to impose on the foundation information and for certain email addresses. See id.; TEX.

Ve
a specific and definite obligation to provide a measurable GOV'T CODE §§ 552.131 (excepting certain information
amount of services in exchange for a certain amount of relating to economic development negotiations), 552.137
money, as one would expect *75 to find in a typical arms- (excepting certain email addresses). The Attorney General

k
length contract.” Id. The Attorney General concluded agreed in part and disagreed in part, instructing the

er
that the chamber of commerce was also a governmental Partnership to release some but not all of the documents

Cl
body, even though it received public funds through the submitted to the Attorney General for review. See Tex.
foundation rather than from the city directly. Id. Att'y Gen. OR2004–4221.

Eight years later, the Attorney General reached the same


ct
In 2007, the Attorney General again relied on Kneeland
tri
result with respect to the Round Rock Chamber of and the distinction between use of public funds for
Commerce, observing that its contract with the City of “general support” as opposed to payment for “specific and
is

Round Rock neither restricted the chamber's use of the measurable services” to conclude that a family planning
.D

public funds it received nor imposed any “specific and service provider that contracted with the Department of
definite obligation to provide a measurable amount of State Health Services was a governmental body under the
services in exchange for a certain amount of money, as one Act. Tex. Att'y Gen. OR2007–06167 (2007). Similarly, in
Co

would expect to find in a typical arms-length contract.” 2011, the Attorney General decided that channel Austin,
Tex. Att'y Gen. OR2001–4849 (2001). a nonprofit corporation that contracted with the City of
is

Austin “to manage the equipment, building, resources,


And a few years after that, the Attorney General and the three channels for Public Access,” received public
av

held that the Greater Houston Partnership itself was funds as an “unrestricted grant” for its “general support
a governmental body under the Act, under a similar rather than payment for specific services.” Tex. Att'y Gen.
Tr

analysis. Tex. Att'y Gen. OR2004–4221 (2004). The OR2011–17967 (2011).


Partnership specified in its request for an Attorney
y

General's ruling that the requested records related to a In a 2008 formal opinion, the Attorney General observed,
op

project being handled by a specific part of the Partnership, consistent with the Kneeland test, that it is sometimes
the Economic Development Division. At that time, significant that the private entity has a “common
lc

different contracts governed the Partnership's relationship purpose or objective or one that creates an *76
with the City of Houston. Examining those contracts' agency-type relationship” with the governmental entity,
ia

provisions—including one that obligated the Partnership or that it performs services “traditionally provided by
fic

to “support the efforts of the University of Houston governmental bodies.” Tex. Att'y Gen. Op. No. GA–
Small [B]usiness Development Center in the conduct 666 (2008). But the Attorney General explained that the
of

of the Director Business Assistance Program, designed “primary test” is “whether the entity receives public funds
to assist and promote the efforts of local businesses for the general support of its activities, rather than using
Un

and entrepreneurs to form new business ventures or those funds to perform a specific and definite obligation.”
to expand existing business ventures”—the Attorney Id. (determining that an association of appraisal districts,
General determined that, “[a]lthough ... the city is which received membership fees from governmental
receiving valuable services in exchange for its obligations entities in exchange for promoting “effective and efficient

© 2018 Thomson Reuters. No claim to original U.S. Government Works. 18


Greater Houston Partnership v. Paxton, 468 S.W.3d 51 (2015)
58 Tex. Sup. Ct. J. 1362

functioning and administration of appraisal districts in any other reports the Directors request; to produce any
Texas,” was a governmental body). Four years later, the non-confidential records the City Attorney requires to
Attorney General held that a health services provider was evaluate the Partnership's compliance with the contract;

e
a governmental body under the Act because the contract and to inform the City of any claims arising out of the

ic
language evidenced a “common purpose or objective Partnership's failure to pay its employees, subcontractors,
between the health service and the district such that an or suppliers. The contracts granted the City “full

Pr
agency-type relationship [wa]s created.” Tex. Att'y Gen. membership and exclusive benefits as a General Partner”
OR2012–11220 (2012) (considering contract in which the of the Partnership, *77 which included membership in

L.
parties agreed “to cooperate to provide services to the the Partnership's policy-level committees, but prohibited
residents of Nacogdoches County who are in need of the City from participating on any of the Partnership's

a
service avoiding duplication of services when possible” governing boards.

lv
and “to refer patients for services, as needed, and in doing

Ve
so will provide documentation for patient records when The 2008 agreement differs from the 2007 agreement
needed”). in several respects. While the 2007 agreement required
the Partnership to “implement a program” to increase

k
investments in the Houston area, the 2008 agreement

er
D. The Partnership's “Support” required the Partnership to provide “specific, measurable

Cl
services” to increase investments. While the 2007 contract
With the statute's language and these prior decisions
permitted the City to require the Partnership to
in mind, I turn to the facts at issue here. The Greater
terminate any employee or subcontractor whose work

ct
Houston Partnership is a private nonprofit corporation
the Directors deemed unsatisfactory, the 20