2015 Tennessee Code
Title 49 - Education
Chapter 13 - Tennessee Public Charter Schools Act of 2002
§ 49-13-112 - Funding.

(a) A local board of education shall allocate to the charter school an amount equal to the per student state and local funds received by the LEA and all appropriate allocations under federal law or regulation, including, but not limited to, Title I and ESEA funds. The allocation shall be in accordance with rules and regulations promulgated by the department of education. Each LEA shall include as part of its budget submitted pursuant to § 49-2-203, the per pupil amount of local money it will pass through to charter schools during the upcoming school year. Allocations to the charter schools during that year shall be based on that figure. The LEA shall distribute the portion of local funds it expects to receive in no fewer than nine (9) equal installments to the charter schools in the same manner as state funds are distributed pursuant to chapter 3 of this title. If the amount of local funds received increases or decreases from the budgeted figure, the LEA may adjust payments to the charter schools in October, February, and June. Before adjusting payments to the charter schools, the LEA shall receive approval from the commissioner. All funds received by a charter school shall be spent according to the budget submitted or as otherwise revised by the public charter school governing body, subject to the requirements of state and federal law. At the request of the charter school governing body, a local board of education may act as fiscal agent for a public charter school in accordance with the charter agreement and applicable state and federal law.

(b) The department of education shall promulgate rules and regulations that provide for the determination of the allocation of state and local funds as provided in subsection (a). The department shall promulgate the rules and regulations effective for the 2010-2011 school years. Notwithstanding § 4-5-209, any rules promulgated under this subsection (b) may be promulgated as emergency rules in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, part 2. At a minimum, the rules shall provide that:

(1) Allocations shall be based on one hundred percent (100%) of state and local funds received by the LEA, including current funds allocated for capital outlay purposes, excluding the proceeds of debt obligations and associated debt service;

(2) Student enrollments used in allocations shall be for the same period used in allocating state funds to the LEA under the basic education program (BEP); and

(3) (A) Allocations to the charter school may not be reduced by the LEA for administrative, indirect or any other category of cost or charge except as specifically provided in a charter agreement.

(B) If the charter school chooses to contract with the LEA for facilities or services, except for contract services for employee benefits or Tennessee Consolidated Retirement System contributions, then the charter agreement may permit and require that the LEA withhold up to one percent (1%) of funds that are due to the charter school in each year of the first four (4) years of the charter school's operation; provided, however, that such withholding shall not exceed twenty thousand dollars ($20,000) annually. These funds shall be placed into an account to be held to reimburse LEAs for any monies owed to it by the charter school for payment and for any outstanding debts of the charter school should the charter school close within the first four (4) years of operation. At the beginning of the charter school's fifth year of operation, the LEA shall remit the accumulated funds, including any interest earned, to the charter school. This subdivision (b)(3)(B) shall not apply to charter schools in existence on January 1, 2013, nor to new or expanded charter schools that are sponsored by a sponsor which has operated a charter school in the LEA for more than four (4) years.

(C) Notwithstanding subdivision (b)(3)(B), if the charter agreement includes an agreement with the chartering authority for services for employee benefits or retirement, then the chartering authority may withhold funds to cover the costs of those services. Notwithstanding subdivision (b)(3)(B), if the charter agreement includes an agreement with the chartering authority for administrative or other services, then the chartering authority may withhold funds to cover the costs of those services.

(D) Any fee for service that is agreed to by a charter school and the chartering authority shall be set forth in an addendum to the charter school agreement or in a separate document.

(c) (1) Notwithstanding any provisions of chapter 3, part 3 of this title or this section to the contrary, the department of education shall calculate the amount of state funding required under the BEP for capital outlay as a non-classroom component to be received in a fiscal year by an LEA in which one (1) or more charter schools operate. The department shall reserve from the sum for such LEA the funds that constitute the amount due to charter schools operating in the LEA and shall not distribute such reserved amount to the LEA. The department shall distribute from the reserved amount directly to each charter school its total per pupil share as determined by its average daily membership (ADM). The per pupil share of each charter school shall be based on prior year ADM, except that the per pupil share of any charter school in its first year of operation shall be based on the anticipated enrollment in the charter agreement.

(2) Notwithstanding subdivision (c)(1), the LEA shall include in the local share of funds paid to a charter school the required LEA match for the state funds generated under the BEP for capital outlay as a non-classroom component that are paid under this subsection (c) directly to a charter school as per pupil facilities aid.

(d) In order to comply with the requirements for allocating funds to the public charter school, the local board of education may provide liability or other forms of insurance pursuant to the charter agreement.

(e) A public charter school may also be funded by:

(1) (A) Federal grants;

(B) Grants, gifts, devises or donations from any private sources;

(C) State funds appropriated for the support of the public charter school, if any; and

(D) Any other funds that may be received by the local school district.

(2) Receipt of any such funds shall be reported to the chartering authority. Public charter schools, the local board of education and the state department of education are encouraged to apply for federal funds appropriated specifically for the support of public charter schools.