TCSA worked with several organizations to create this to help your organization make decisions based on changes in the bill. However, some parts of House Bill 3 affecting charters called for the Commissioner to make implementation rules. All charter leaders should continue to check for rule updates from the Texas Education Agency (TEA).

An over-arching summary of House Bill 3 is available at or here. For updates on TEA guidance related to House Bill 3, please visit For House Bill 3 questions specific to your individual charter district, please email TEA at

     House Bill 3: Changes and Implications for Public Charter Districts

Changes to the Funding Formula and Other Funding Streams

  • Charters and ISDs both receive a basic allotment of $6,160 per ADA.
  • Charters are not entitled to the following:
    1. Sparsity Adjustment - to address issues with economies of scale in ISDs with sparse student populations
    2. Fast Growth Allotment - additional .04 weight per ADA for ISDs in which the growth in student enrollment over preceding 3 years is in the top quartile of student enrollment growth for that period statewide
    3. Tier Two Allotment
  • Charters have access to the “Formula Transition Grant,” which compensates for decreases in M&O funding from 2018-2019 onward for four years.
  • Charters are entitled to the following:
  1. Small and Midsize Allotment.
    • All charters will receive this allotment. TEA will use the following formula to calculate the allotment per student in ADA:2019-06-26_1607
  1. College, Career, and Military Readiness Outcomes Bonus
    • Bonus for each graduate deemed to be “college, career, or military ready” above the 25th percentile of districts statewide in the ‘16-17 SY, as measured by proficiency and college enrollment, career certification, or military enlistment. The 25th percentile threshold will remain static. The ‘16-17 25th percentile rate is unknown/has not yet been calculated; most recent statewide average (‘16-17) is 54.2% of students meeting college, career, or military readiness proficiency standards (does not include college enrollment).
    • Amounts:
      • $5,000 for eco. dis. graduates
      • $3,000 for non-eco. dis. graduates
      • $2,000 if graduate is enrolled in a special education program under Subchapter A, Chapter 29
  1. Teacher Incentive Allotment (outlined below)
  2. Transportation Allotment
    • Changed from linear density model to simple $1/mile reimbursement
  3. New Instructional Facility Allotment
    • Cap is increased from $25 million to $100 million
  4. Dropout Recovery and Residential Treatment Center (RTC) Allotment
    • $275 per ADA for each student residing in an RTC or who attends a district or district campus designated as a dropout recovery school under Section 39.0458
  5. Reimbursement for Optional College Preparation Assessments
    • 1 exam per student per academic year in 8th (preliminary college preparation assessment), 10th (preliminary college preparation assessment), and either 11th or 12th (college preparation assessment)
    • Assessment must be valid, reliable, nationally norm-referenced and used by colleges and universities as part of admissions process; OR the assessment instrument selected by the Texas Higher Education Coordinating Board under Sec. 51.334
  6. Certification Examination Reimbursement
    • Districts are reimbursed for the cost of the certification exam for students enrolled in career/tech program, under Sec. 29.190(a) as provided by Sec. 29.190(c)
  7. Incentive for Additional Instructional Days
    • 30 instructional days paid at half-day ADA
    • Requirement for those minutes and when during the school-year (summer is likely) the instructional days can be offered will be determined by TEA rule-making
  8. Special Education Allotment
    • Increases the weight applied to the mainstream instructional arrangement of the special education allotment from 1.1 to 1.15.
  9. Dyslexia Allotment
    • .1 weight
  10. Compensatory Education Allotment
    • Weights are increased and range from .225 to .275
    • Funding will be determined by severity of disadvantage based on a five-tier spectrum of poverty determined by census blocks (based on student address). Census blocks are typically smaller (between 600 and 3,000 people, typically) than zip codes and may cut across zip codes.
    • Commissioner creating advisory committee to help determine tiers.
    • Charters must assign students to census block group using TEA resources to determine the severity of economic disadvantage.
    • Compensatory education funding can be used as it always was, but it can also now be used to provide child care services for the children of students at risk of dropping out and for life skills programs.
  11. Bilingual Education Allotment
    • Retains existing Bilingual Allotment and provides an additional 0.05 weight to students in a dual language immersion (one-way or two-way) program model. Intended to incentivize dual language.
    • Any bilingual education funds the Commissioner determines were misused will be deducted from a school/district’s foundation school program funding for the following year.
  12. Career and Technology Education Allotment
    • Expands eligibility to grades 7 and 8
  13. Early Education Allotment
    • Additional .1 weight for each comp. ed. student in Gr. K-3
    • Additional .1 weight for each ELL student in Gr. K-3
    • (Therefore, .2 weight for each student who is both ELL and comp. ed.)
    • Must be used to improve literacy and mathematics outcomes for students in grades Pre-K 3 -- this allotment is intended to be enough to cover the cost of the new full-day pre-k 4 requirement
  14. Blended Learning Grant Program
    • $6M state allocation. Amount per grant is TBD based on number of quality applicants. Agency assumes $250k average grant to 24 districts.
    • Grant is for pilot program that starts with at least all teachers in a grade level on one campus using blended learning for all students; to be scaled up across campus(es) in subsequent years. Additional program requirements will be released by TEA.
  15. Mentor Program Allotment (outlined below)

Educator Pay and Other Regulations

  • Charters may create a “Local Optional Teacher Designation System,” rating teachers as Master, Exemplary or Recognized. The rating is based on appraisals and lasts for up to five years. Districts are not required to use student achievement data (standardized test data), but can use that data in determining teacher ratings.
    1. The Commissioner is currently validity standards for these designation systems and evaluate them.
    2. Commissioner is creating Advisory Committee to assist with implementation.
    3. Schools must have a teacher designation system to access the Teacher Incentive Bonus, and it must be approved by TEA.
    4. TEA will have an application charters will need to fill out with a plan outlining their designation system. TEA will expect charters to have a rubric to appraise and designate their teachers as Master, Exemplary or Recognized. See the T-TESS rubric that 90% of ISDs use at TEA will expect something similar to the T-TESS rubric in charter applications for local designation systems.
    5. There is no target date yet for the release of this application.
    6. Charters could use existing designation system. TEA will review each charter’s designation system when they submit an application.
    7. TEA will judge the charter’s designation system based on how consistent teacher ratings would be compared to other designation systems in the state. TEA’s main objective is to ensure fair ratings, i.e. that the same teacher would not be rated lower in an ISD versus a charter, or vice versa.
  • The “Teacher Incentive Allotment” is available to any school in Texas that adopts the teacher designation system (in HB 3).
    1. Bonuses have a base level of $5K (master), $3K (exemplary), and $1.5K (recognized) and increase based on level of student need (for rural schools and compensatory education).
    2. To determine the additional amount above the base bonus, the base is multiplied by the average point value for all students taught by that teacher, with a point value of 0 for a non-eco. dis. student and point values of .5, 1.0, 2.0, 3.0, and 4.0 (from least to most severe economic disadvantage) determined by the census block of the student’s home address
    3. TEA will determine economic disadvantage by census block group of students. The allotment is larger for rural campuses with a higher percentage of economically disadvantaged students.
    4. The bonuses are only available to state-certified teachers, and those a school has designated as master, exemplary or recognized.
  • A “Mentor Teacher Allotment”
    1. Is available to charters that have implemented a mentoring program for teachers who have less than two years of teaching experience under Section 21.458.
    2. The Commissioner will create a formula for the funding, which is to be used for mentor teacher stipends.
    3. Schools receiving the allotment must provide mentor teachers and their mentees release time to engage in mentoring activities.
  • Charters must use set aside 30% of the increase in the total state aid per student they get in 2019-2020, compared to the total state aid per student they received in 2018-2019. 75% of this 30% must be used to increase compensation to teachers, full-time librarians, full-time counselors and full-time nurses. Charters must differentiate these pay increases for teachers with more than 5 years of experience. TEA recently released guidance on this requirement, which can be found here: Charters must make 6.8% contributions to TRS on every dollar of salary above the state statutory minimum for every full-time teacher, counselor, librarian and nurse. The state minimum salary schedule has been adjusted and can be found here:
  • Charters are now subject to Chapter 554 of the Government Code, the “Whistleblower Act,” which provides protections to employees for reporting violations of the law.
  • If charters fail to discharge or hire employees prohibited under 12.0271, they will be in violation of their charter. Charters must confirm that their employees are not on a do-not-hire registry under Section 22.0832.
  • Charter principals must report educator misconduct to their superintendents, and superintendents must notify the Commissioner of this misconduct. This conduct includes the following: child abuse as defined in Section 261.101 of the Family Code; romantic relationships with, or solicitation of or engagement in sexual contact with a student or minor; or any other unlawful act with a child. However, educators are entitled to a hearing related to alleged misconduct to determine whether the misconduct actually occurred.

Academic Regulations/Requirements

  • Charters must create Early Childhood Literacy and Mathematics Proficiency Plans & College, Career and Military Readiness Plans.
    1. The board of trustees of each school district shall adopt and post on the district’s Internet website early childhood literacy and mathematics proficiency plans that set specific annual quantifiable goals for performance in reading and mathematics at each campus.
    2. The plans must also outline any professional development targeted to help teachers meet their proficiency goals.
  • Charters must administer a kindergarten reading instrument and a 1st-2nd grade reading instrument from a list approved by the Commissioner or by a district-level committee. They must administer the instrument according to the Commissioner’s recommendations. Student performance must be reported to the student’s parent/guardian within 60 calendar days; and annually to the Commissioner. At least one instrument per grade level (PK, K, 1, 2) will be made available at no cost to district. This section subject to rule-making by the Commissioner.
  • Charters must use a direct instruction and phonics curriculum for grades kindergarten through 3. This section subject to rule-making by the Commissioner.
  • All K-3 teachers must have attended a Teacher Literacy Achievement Academy by school year 21-22. Principals in schools with grades K-3 must also attend the Academy. These Academies have historically been run by Education Service Centers; however, there is precedent for individual LEAs applying to run their own.
  • Charters must prioritize placement of highly effective teachers in grades K-2. Charters must administer reading development and comprehension instruments for Kindergarten through the 3rd
  • Charter high school students must complete a FAFSA application as a part of their graduation requirements, unless their parent/guardian signs a form declining it.
  • Charters will have access to tools to help them implement bilingual and special language programs.


  • If a charter district offers Pre-K, then Pre-k for eligible 4-year-olds must be full-day by SY 2021-22. Pre-k for 3-year-olds can remain half-day. The number of minutes that qualify as full-day will be determined by TEA through rulemaking.
    1. Pre-k funding is still half of ADA for each Pre-k student
    2. Additional funds to cover costs of mandate for full-day are expected to come from the Early Learning allotment
  • Districts that do not currently offer Pre-K do not have to start offering Pre-K; districts that already offer Pre-K do not have to continue offering it.
  • Pre-k for 4-year-olds must comply with high-quality program standards from TEA:
    1. Requirements include: use curriculum meeting TEA’s Pre-k guidelines; measure student progress and learning outcomes; aim for 1:11 student to teacher ratio; not use any Common Core material or standards; have teachers that are certified and have at least 1 of 5 other possible credentials listed under 29.167 of Texas Education Code
    2. Charters must test Pre-k students with an assessment instrument approved by TEA. Charters will also need to report specific information on Pre-k programs to TEA.
  • Charters are entitled to an exemption from any part of the new Pre-k law if the charter applies for the waiver and (a) the charter would be required to construction classroom space to meet the requirements, or (b) implementation would result in “fewer eligible children being enrolled.” Charters must first conduct a public meeting and consider partnerships with public and private entities to offer Pre-k before requesting a waiver. Waivers cannot exceed 3 school years, subject to one renewal (max = 6 years)
  • Charters cannot simply issue bonds to fund new Pre-k facilities. They first have to consider partnering with other public and private entities (listed in statute are providers eligible).

Other Non-HB 3 Bills with Impacts on Charters

  • Senate Bill 2293 creates a common charter school admission application form. TEA will create the form online. Families will need to fill out applications for charter schools using this form. SB 2293 also requires the charter holders to submit waitlist data to TEA, not later than the last Friday in October of each school year. Charters must submit data on the following: 1) the number of students enrolled; 2) the enrollment capacity; 3) the total number of students on the waiting list; 4) the number of students on the waiting list disaggregated by grade level; 5) the information described aggregated for all campuses operating under the charter holder's charter; and 6) any information required by the commissioner.
  • House Bill 3007 requires TEA to provide each school district a copy of the source data submitted to the agency by entities other than the district that the agency considers in the district’s accreditation status or performance ratings.
  • House Bill 391 requires schools to provide instructional materials to students in printed format if the student does not have reliable access to technology at home.
  • House Bill 2348 prohibits employers from terminating, suspending, or otherwise discriminating against an employee who is a volunteer emergency responder and who is absent from or late to work because they are responding to a declared disaster in their capacity as a volunteer emergency responder.
  • House Bill 4258 gives the attorney general sole authority to review the record of public notice and hearings relating to any bond financing an educational facility for an authorized charter school. The attorney general will also have the ability to issue approvals for the tax-exempt status of the bond issuance.


It gives me great pleasure to share news of the historic passage of HB 21 by the Texas Legislature. As you know, securing facilities funding has been the primary legislative priority for the Texas Charter Schools Association (TCSA) since our inception in 2008, and this win has been a long time coming.

Under HB 21, students at public charter schools will receive $60 million in direct support from the state for facilities funding. Governor Greg Abbott signed HB 21 on Wednesday and charter facilities funding goes into effect for the 2018-19 academic year.

Only charters with an acceptable overall rating are eligible to access facilities funds under HB 21, though residential treatment charters are exempt from this performance criteria. This requirement coupled with SB 2 (83rd Legislative Session) make for stricter accountability for charters as compared to other public schools. SB 2 mandates the automatic closure of a charter school after three consecutive years of failing to meet academic or financial standards. I know you share our commitment to providing students with an excellent public education and support legislative efforts to ensure greater student outcomes.

Facilities funds provided by HB 21 will help provide relief to public charter schools by keeping instructional funds in the classroom for students and fewer operational dollars going towards the rent or mortgage.

TCSA appreciates Governor Abbott adding school finance to the call for special session allowing for this momentous victory. We also thank Lt. Governor Dan Patrick, Chairman Larry Taylor, and Chairman Dan Huberty for their leadership ensuring that Texans have more options within public education.

I want to personally thank my team--the TCSA staff--for their hard work and long hours contributing to the passage of this bill. TCSA's Elected Advocacy Committee also deserves special recognition for their efforts.

Most importantly, thank you for providing students with an innovative, excellent public education and advocating for your students with your legislators. Together, we can celebrate this great win for students!


Do you or other business managers in your charter school system need training to satisfy TEA’s 19 TAC, Chapter 100 training requirements?  Are you working toward your Charter Business Officer Certification and need high quality training hours?

TCSA will be providing a three day training to assist financial officers and business managers comply with state and federal laws.  Trainers for this event will be charter financial officers, staff from the Texas Education Agency, financial consultants, lawyers, auditors, and charter superintendents.

Topics Covered:

Day One:  Develop Your Financial Plan

  • Begin with the End in Mind
  • Budget Creation:  How to create a budget that accurately reflects the work of the charter
  • Coding Expenditures
  • Maintenance of Effort (MOE)
  • How to Avoid Buyer’s Remorse:  Legal Requirements for Charter School Procurement of Goods and Services
  • Location, Location, Location:  Legal Issues and Do’s and Dont’s for Purchase, Sale or Lease of Real Property               
  • If You Build It… Legal Requirements for Charter School Construction, Renovations, Repairs and Improvements
  • Conflicted by Conflicts?  What Conflict of Interest Laws Apply to Charter and What Do You Need to Know to Comply

Day Two:  Execute Your Financial Plan

  • Principles of Cash Flow Accounting
  • Creating systems and internal controls that meet state and federal guidelines (Requisitions, Separation of duties, Cash in Reserves)
  • Creating Financial Reports for the Board (Statement of Activity, Statement of Financial Disposition, Cash Flow Statement)
  • Complying with Human Resource Laws
  • Administration of Employee Benefits:  Compliance with the Affordable Care Act

Day Three: Evaluating Charter Financials and Compliance Reporting

  • Welcome to Charter FIRST                                                                                                   
  • EDGAR Compliance
  • Annual Financial and Compliance Report Requirements                                
  • Preparing for the Audit

Confirmed Presenters:

  • Christina Villarreal, David Marx, Tiffany Martin & Paul Moreno from TEA
  • Joe Hoffer, Ramon Medina, Bryan Dahlberg, & Jason Adelstein from Shulman, Lopez and Hoffer
  • George Fowler, Piney Woods Academy
  • Kelly Kulchthaler, Walsh Gallegos
  • Paul King, SF Productivity
  • Kimber Fuccello, Financial Consultant
  • Paula Moeller, TCSA


TCEA--Texas Computer Education Association

3100 Alvin Devane Blvd

Austin Texas

Dates: April 13-15, 2016

Time: 8 a.m. to 4 p.m. each day

Cost: $350

Register Today






Update: Archived video of the oral arguments can be viewed here.

Former Texas Solicitor General James Ho made the case for equitable funding for public charter school students and TCSA General Counsel Denise Pierce drove the point home at the school finance trial before the Supreme Court of Texas on Tuesday.

“We want you to send a clear message to the state legislature. Tell them they can’t discriminate against public charter school parents and students. Tell them they can’t require charters to take money away from teacher salaries and computers,” Pierce concluded in her remarks to the Chief Justice and eight Justices of the court.

Charter schools are different from traditional public schools, but the Texas Charter Schools Association was there on Tuesday because of the similarities, Pierce said.

Denise SCOTX 2

State law states that charters are a part of the public school system and have to follow the same academic and financial standards, she said.

“It’s undisputed that charters receive $1,000 less per WADA, per student. It’s undisputed that charters receive no facilities funding,” said Ho.

Several times he reminded the court that public charter schools are forced to “cannibalize their education budgets” to pay for facilities.

More than 600 school districts were appellants in the case before the Supreme Court of Texas arguing that the state’s public schools are constitutionally underfunded.

Charter schools agreed and added that public charter school students face additional discrimination, because they receive no facilities funding.

“We ask the Court to tell the state not to discriminate against charters….They cannot discriminate against charters by giving facilities funding to everyone except us,” Ho said.

Pierce pointed out that it is the same as saying that the Supreme Court of Texas has to fulfill its mandated duties and pay for its own courthouses.

The state argued that charters signed a contract with the state for a certain amount of funding, and now can’t ask for more than the contractually approved amount.

Ho countered: “There’s no immunity, because there’s a constitution.”

“Charter parents and students didn’t sign a contract for less funding,” he said.

The Supreme Court of Texas adjourned just after noon on Tuesday and will likely take several months to publish its decision.

Read more about the school finance trial at School Finance Lawsuit: Three Things to Know.

By Denise Pierce, TCSA General Counsel

1. It’s historic

This is the first time in the history of the Texas charter school movement that the case for fair funding will be made before the Supreme Court of Texas.
The public charter school movement joined the school finance lawsuit in 2012 and went to trial in 2013 and again in 2014. All the testimony and evidence pointed to the indisputable conclusion that the state has failed to meet its constitutional duty to all public school students, especially public charter school students.

After decades of being shortchanged by the state, public charter schools say, "Enough."

    Watch Live: Online streaming

    When: 9 a.m. Tuesday, Sept. 1

    Where: Supreme Court of Texas, 200 W. 14th Street, Austin TX

    What: Oral arguments in Michael Williams, Commissioner of Education, et al. v. Texas Taxpayer & Student Fairness Coalition, et al.; Calhoun County ISD, et al.; Edgewood ISD, et al.; Fort Bend ISD, et al.; Texas Charter School Association, et al.; and Joyce Coleman, et al.

    How: Charter school plaintiffs will have 10 minutes for the opening and five minutes for a rebuttal.

2. It’s about fairness

Public charter school students and families deserve fair funding.

Denise Quote

Right now, each and every family that decides a public charter school is the best fit for their student is shortchanged about $1,000. That money would be there if they stayed at their traditional district school. Charters have to meet the same academic and financial standards as traditional districts and face the added threat of closure should they chronically underperform. For the nearly 230,000 public charter school students in Texas, $1,000 less per student is clear evidence that we deserve intervention by the Supreme Court of Texas.

3. It’s a team effort

The charter movement made it to this historic moment by working together for the students and families who rely on charter schools and the 105,000 students waiting for an open seat at a public charter school.

Thanks to:

  • The six parent plaintiffs: Mario Flores, Wayside Schools; Christopher Baerga, New Frontiers Charter School; Jason and Sarah Christensen, Harmony Public Schools; Dana Allen, Lumin Education; and Brooks Flemister, Ser Ninos Charter School.
  • The TCSA Board of Directors, including TCSA Executive Director David Dunn.
  • The TCSA member schools who financially supported this effort by stretching their already meager budgets.
  • The Walton Family Foundation and the Broad Foundation, which provided grants to continue this fight at the Texas Supreme Court.
  • The trial team: Robert Schulman and Leonard Schwartz.
  • The appellate counsel: Jim Ho and William Thompson.

As we stand together on Sept. 1, 2015, victory is certainly not guaranteed, but none of the plaintiffs in the case deserve it more than the charter school students and their families. The Texas Supreme Court needs to uphold the trial court’s August decision that the state does not give adequate funding to students, and declare that charter school students are entitled to equitable funding and facilities funding.