84R12102 MK-F
By: Bohac H.B. No. 3375
A BILL TO BE ENTITLED
AN ACT
relating to ownership and control of property acquired with state
funds by the charter holder of an open-enrollment charter school.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 12.128, Education Code, is amended by
adding Subsections (f), (g), (h), (i), (j), and (k) to read as
follows:
(f) Notwithstanding Subsection (a), real or personal
property acquired, improved, or maintained using state funds is
considered to be public property only to the extent state funds were
used to pay for the acquisition, improvement, or maintenance. The
use of state funds for acquisition, improvement, or maintenance of
property must be detailed in the accounting and property records of
the charter holder and the charter school. If the property is
acquired with federal funds, this subsection may be preempted
wholly or partly by federal law.
(g) The property of an open-enrollment charter school used
for a purpose authorized by Subsection (a)(3) is considered to be
owned by the charter holder, regardless of the source of funds used
to acquire the property. The charter holder retains title to the
property, exercises complete control over the property, and is
entitled to all use and benefit from the property. Property
acquired, improved, or maintained using both state funds and other
funds is considered mixed public and private property, and is
subject to all requirements for public property under this section.
(h) A charter holder shall include an exhibit identifying
the capitalized assets of the charter holder and the ownership
interest of all parties for all capitalized real and personal
property held by the charter holder or acquired, improved, or
maintained by the charter holder during the term of the charter in
the annual audit report of the charter holder.
(i) The governing body and officers of the charter holder
shall ensure that:
(1) public property is properly and accurately
documented in the accounting and property records of the charter
holder and the open-enrollment charter school; and
(2) the accounting and property records of the charter
holder separately disclose the cost basis and accumulated
depreciation of all public property as determined by the
commissioner or designee, and all other property held, acquired,
improved, or maintained by the charter holder.
(j) If, after a due diligence review of the exhibits and
other disclosures in the annual audit report filed by the charter
holder, the commissioner determines that the exhibit identifying
capitalized assets contains errors, the commissioner may require a
charter holder to engage, at the charter holder's expense, an
independent audit firm for purposes of reviewing and confirming the
classification of real and personal property consistent with
applicable authoritative standards.
(k) Subject to the rights of any secured creditor or valid
lien holder and in accordance with Subsection (e), on revocation,
expiration, or surrender of the charter, dissolution of the charter
holder, or final loss of exempt status under Section 501(c)(3),
Internal Revenue Code of 1986, the charter holder shall:
(1) reimburse the state in a manner prescribed by the
commissioner for the current value of the public's ownership
interest in the capitalized assets disclosed in the exhibit
prepared under Subsection (h);
(2) transfer title to the state in a manner prescribed
by the commissioner and in accordance with the rules of the Internal
Revenue Service; or
(3) transfer title to another charter holder subject
to the consent and approval of the commissioner.
SECTION 2. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2015.