1. (a) To be selected as a certified educational assistance organization by the comptroller, an organization must:

   1. (1) be registered with the secretary to do business in this state;
   2. (2) have the right to transact business in this state and comply with all tax filing, collection, and payment requirements imposed by the state of Texas;

   3. (3) comply with the audit requirements under Education Code, §29.363, by providing to a private entity under contract with the comptroller or to the state auditor, as applicable:

      1. (A) the organization's internal controls over program transactions;
      2. (B) confirmation that residency documentation specified under Education Code, §29.355(a-1), for each child admitted to the program and served by the organization during the applicable program year was verified by the organization; and
      3. (C) any other information or documentation related to a program transaction;
   4. (4) establish and maintain cybersecurity controls and processes satisfactory to the comptroller, including best practices developed under Government Code, §2054.5181;
   5. (5) comply with all applicable state and federal confidentiality and privacy laws, including the Family Educational Rights Privacy Act of 1974 (20 U.S.C. §1232g); and
   6. (6) comply with all program requirements under Education Code, Chapter 29, Subchapter J.
2. (b) A certified educational assistance organization must have the ability to perform one or more of the services listed in Education Code, §29.354.
3. (c) On or before every October 1 and February 1, or as additionally requested by the comptroller, each certified educational assistance organization shall comply with the requirements under §29.362(d), Education Code, for each participating child served by the organization.

Source Note:The provisions of this §16.402 adopted to be effective December 15, 2025, 50 TexReg 8046.