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the Texas Education Code to apply for an open-enrollment charter,
and thereby to be recognized as a State public school entitled to
receive public funding. See Tex. Educ. Code Ann. sec.
12.101(a)(3) (Vernon 1996). Petitioner so applied and on May 14,
1998, obtained from the Texas State Board of Education (SBOE) the
requested open-enrollment charter.2 The charter, in accordance
with applicable State law, imposed upon petitioner conditions
related to its operations, including rules to require compliance
with generally accepted accounting principles (GAAP) and
recordkeeping standards, to restrict conflicts of interest and
less than arm’s-length transactions, and to adhere to specific
dictates governing student attendance and special education
programs.
In 1995, petitioner began operating a school offering pre-
kindergarten through grade 12 instruction to children. The
school employed what is referred to as a “multi-age level” or
“one-room schoolhouse” setting. Records suggest that student
enrollment grew from about 10 in early years to approximately 100
by 1999. Throughout its history, the school has focused on
serving a racially and ethnically diverse, economically
2 Although the parties’ stipulation references “March of
1998” in connection with receipt of the open-enrollment charter,
a cursory review of the underlying document reveals that the
contract for charter was entered and executed on May 14, 1998.
See Cal-Maine Foods, Inc. v. Commissioner, 93 T.C. 181, 195
(1989) (holding that stipulations are properly disregarded where
clearly contrary to evidence contained in the record).
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Last modified: November 10, 2007