1. A. Formula.

   1. (1) A local board of education shall calculate commensurate funding for the public charter schools in its jurisdiction using a formula that complies with Education Article, §9-109, Annotated Code of Maryland, and this regulation.

   2. (2) The local board shall identify a preliminary total per pupil allocation for each public charter school by completing all of the following steps in order:

      1. (a) Identify all local, State, and federal revenue sources, consistent with §A(3) of this regulation, contained in the local school system’s operating budget;
      2. (b) Identify the enrollment counts, consistent with §A(4) of this regulation, for the local school system and each public charter school;
      3. (c) Divide each local, State, and federal revenue source that is not eligibility based by total enrollment;
      4. (d) Multiply the results from §A(2)(c) of this regulation by the last enrollment count for each public charter school to determine the base per pupil allocation;
      5. (e) Divide each local, State, and federal revenue source that is eligibility based, with the exception of special education revenue and special education transportation revenue, by eligible enrollment;
      6. (f) Multiply the results from §A(2)(e) of this regulation by the last enrollment count of eligible students for each public charter school to determine the eligibility per pupil allocation;
      7. (g) Add the results from §A(2)(d) and (f) of this regulation;
      8. (h) Determine the shared cost deduction rate by dividing the sum of the shared cost deductions in §B of this regulation by all local, State, and federal revenue sources identified in §A(2)(a) of this regulation;
      9. (i) Multiply the result from §A(2)(g) of this regulation by the difference between 1.0 and the result in §A(2)(h) of this regulation;
      10. (j) Identify the special education allocation, consistent with §A(5) of this regulation, necessary to implement the individualized education programs of all students with disabilities enrolled at each public charter school;
      11. (k) Add the results from §§A(2)(i) and (j) of this regulation; and
      12. (l) Multiply the result from §A(2)(k) of this regulation by the difference between 1.0 and the administrative fee in §C of this regulation.

   3. (3) Revenue Sources.

      1. (a) The preliminary total per pupil allocation shall be calculated using 100 percent of each revenue source.
      2. (b) Any restrictions applicable to a revenue source shall continue to apply notwithstanding this regulation.
      3. (c) The concentration of poverty grant program established under Education Article, §5-223, Annotated Code of Maryland, is not a revenue source for purposes of this regulation.

   4. (4) Enrollment Counts.

      1. (a) The preliminary total per pupil allocation shall be determined using the following data points, as applicable, for the local school system and each public charter school during the prior school year:

         1. (i) The enrollment data collected on September 30 or an alternate date set by the Department; or
         2. (ii) For a public charter school that is new or expanding, or with the consent of the public charter school, the enrollment data projected by the local school system.
      2. (b) The final total per pupil allocation shall be adjusted, upward or downward, only one time based on the actual enrollment count for each public charter school during the school year.

   5. (5) Special Education Allocation.

      1. (a) The special education allocation identified in §A(2) of this regulation shall be determined by the local school system based on:

         1. (i) The special education revenue and special education transportation revenue for which each student enrolled in each public charter school is eligible;
         2. (ii) Any additional revenue that is necessary to provide the services documented in the individualized education program of each student enrolled in the public charter school; and
         3. (iii) Equivalent costs for services delivered in other schools within the local school system.

      2. (b) If a public charter school elects to delegate the management of special education to the local school system, the special education allocation amount shall be:

         1. (i) Excluded from the public charter school’s preliminary total per pupil allocation; and
         2. (ii) Expended by the local school system to serve the students with disabilities enrolled at the public charter school in accordance with their individualized education programs.

      3. (c) If a public charter school elects to manage special education directly, the special education allocation amount shall be:

         1. (i) Included in the public charter school’s preliminary total per pupil allocation; and
         2. (ii) Expended by the public charter school, including the option for buy backs, to serve the students with disabilities enrolled at the public charter school in accordance with their individualized education programs.
      4. (d) If a public charter school fails to timely complete corrective action required for special education noncompliance, the local school system may centralize management of special education with the approval of the Department.
      5. (e) If a public charter school student’s individualized education program can only be implemented in a non-public placement, the student is no longer considered part of the special education allocation at the public charter school.

   6. (6) The local board shall identify a final total per pupil allocation for each public charter school after:

      1. (a) Negotiating with the public charter schools in good faith regarding in-kind services, buy backs, and the management of special education; and
      2. (b) Subtracting the cost of the negotiated items from the preliminary total per pupil allocation.

   7. (7) The local board shall provide each public charter school with a table showing:

      1. (a) The calculation of its preliminary total per pupil allocation, including:

         1. (i) The base per pupil allocation;
         2. (ii) The eligibility per pupil allocation;
         3. (iii) The special education allocation;
         4. (iv) The amount of the shared cost deductions; and
         5. (v) The amount the administrative fee;
      2. (b) The calculation of its final total per pupil allocation; and
      3. (c) To the extent practicable, the per pupil allocation of a comparable public school that is not a public charter school.
   8. (8) Each public charter school shall provide the information necessary for the local school system to comply with reporting requirements in Education Article, §§ 5-406 and 5-234, Annotated Code of Maryland.

   9. (9) Compliance Monitoring.

      1. (a) A local board with public charter schools in its jurisdiction shall include a review of compliance with this regulation in the annual audit required by Education Article, §5-109, Annotated Code of Maryland.
      2. (b) The Department may periodically review the tables provided by the local board to the public charter schools under §A(7) of this regulation to provide technical assistance and monitor compliance.

2. B. Shared Cost Deductions.

   1. (1) A local board may apply shared cost deductions when calculating commensurate funding under §A of this regulation.

   2. (2) Each of the following shared cost deductions may be applied by a local board:

      1. (a) Retiree benefits;
      2. (b) Adult education;
      3. (c) Special education adjustment, not to exceed 10 percent of all local, State, and federal revenue sources identified in §A(2)(a) of this regulation; and
      4. (d) If a public charter school occupies one of the local board’s buildings, debt service.

3. C. Administrative Fee.

   1. (1) A local board may charge an administrative fee to each public charter school in its jurisdiction.

   2. (2) The administrative fee shall account for the costs related to:

      1. (a) Implementation of Education Article, §9-110(a), Annotated Code of Maryland;
      2. (b) Local superintendent and local board administration;
      3. (c) Special education and student services administration; and
      4. (d) Human resources administration.

   3. (3) The administrative fee applied by a local board shall:

      1. (a) Not exceed 5 percent of each public charter school’s preliminary total per pupil allocation; and
      2. (b) Be adequately documented, including the specific services rendered, in the table provided to each public charter school under §A(7) of this regulation.

Authority: Education Article, §§ 2-205 and 9-101— 9-112, Annotated Code of Maryland

Effective date: May 25, 2026 (53:10 Md. R. 455)