(a) Process governing conflicts of interest. A member of the governing body of a charter holder, a member of the governing body of a charter school, and an officer of a charter school shall comply with Local Government Code, Chapter 171, in the manner provided by the conflict of interest provisions described in §§100.1131-100.1135 of this division.
(b) Compensated board members generally prohibited. Except as provided by this section, a person who receives compensation or remuneration from a nonprofit corporation holding an open-enrollment charter may not serve on the governing body of the charter holder. As used in this subsection, compensation or remuneration includes, without limitation:
  (1) salary, bonuses, benefits, or other compensation received by the local public official pursuant to an employment relationship;
  (2) payment of or reimbursement for personal expenses of the local public official, excluding reimbursement for allowable travel expenses;
  (3) credit extended to the local public official by the charter holder or charter school;
  (4) the local public official's personal use of property paid for by the charter holder or charter school;
  (5) in-kind transfers of property to the local public official; and
  (6) all other forms of compensation or remuneration to the local public official.
(c) Satisfactory student performance. If each charter school operated by a charter holder has received a satisfactory rating, as defined by §100.1022(b)(2)(B) of this title (relating to Standards to Revoke and Modify the Governance of an Open-Enrollment Charter), for at least two of the preceding three school years, then charter school employees may serve on the governing body of the charter holder in accordance with subsection (f) of this section.
(d) Existing charter holders partly grandfathered. If a charter holder has operated at least one charter school which reported attendance that occurred prior to September 2, 2001, but no charter school operated by the charter holder has received a sufficient number of academic or financial ratings to determine whether it has received a satisfactory rating for at least two of the preceding three school years, then charter school employees may serve on the governing body of the charter holder in accordance with subsection (f) of this section.
  (1) For purposes of this subsection, a charter school has a sufficient number of substantive ratings to determine whether it has received a satisfactory rating for at least two of the preceding three school years if:
    (A) the charter school has received two consecutive academic ratings, and neither rating meets the criteria set forth in subsection (c) of this section; or
    (B) the charter school has received three academic ratings.
  (2) If a charter holder operates charter schools that have received a sufficient number of academic ratings to determine whether it has received a satisfactory rating for at least two of the preceding three school years, but also operates charter schools that have not received a sufficient number of academic ratings, then its eligibility to comply with subsection (f) of this section is determined by applying the criteria in subsection (c) of this section only to those schools with a sufficient number of substantive ratings.
(e) No annual ratings assigned. For purposes of this section, two academic accountability ratings are "consecutive" as determined by §100.1022(b)(2)(C) of this title.
(f) Exception to prohibition on compensated board members. Notwithstanding subsection (b) of this section, an employee of a charter school subject to this subsection may serve as a member of the governing body of the charter holder if:
  (1) only employees of the charter school, and not employees of the charter holder, serve on the governing body of the charter holder;
  (2) the only compensation or remuneration received by the board member is salary, bonuses, benefits, or other compensation received pursuant to the employment relationship with the charter school;
  (3) charter school employees do not constitute a quorum of the governing body or any committee of the governing body; and
  (4) all charter school employees serving on the governing body comply with all conflict of interest provisions referenced in subsection (a) of this section.
(g) Accounting for interested transactions. Notwithstanding compliance with this section, a charter holder shall comply fully with the requirements of §100.1047(f) of this title (relating to Accounting for State and Federal Funds).
(h) Compliance following ratings change. Notwithstanding this section, a charter holder must comply with the prohibition on compensated board members described in subsection (b) of this section within 30 days after it is assigned a rating that causes it to become ineligible for the exception provided by subsection (f) of this section.
  (1) Subject to paragraph (2) of this subsection, if a ratings appeal is provided in the applicable accountability manual, and if a timely and sufficient appeal is filed by the charter holder, then the time for compliance provided by this subsection is extended until 30 days after the date on which the appeal is finally determined.
  (2) Notwithstanding any other deadline, an appeal is "timely" for purposes of the extension of time provided in paragraph (1) of this subsection if it is received by the appeals deadline specified in the relevant Accountability Manual, or under the alternative education accountability ratings procedures, if applicable.

Source Note: The provisions of this §100.1131 adopted to be effective April 18, 2002, 27 TexReg 3110; amended to be effective April 6, 2005, 30 TexReg 1911; amended to be effective September 12, 2012, 37 TexReg 7097; amended to be effective September 18, 2014, 39 TexReg 7295