Texas 2019 - 86th Regular

Texas Senate Bill SB398 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	86R2570 GRM-D
2	2	By: Zaffirini S.B. No. 398
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to authorizing a credit union to act as a school district
8	8	depository.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Section 7.102(c)(34), Education Code, is amended
11	11	to read as follows:
12	12	(34) The board shall prescribe uniform bid blanks for
13	13	school districts to use in selecting a depository bank or credit
14	14	union as required under Section 45.206.
15	15	SECTION 2. Section 12.107, Education Code, is amended to
16	16	read as follows:
17	17	Sec. 12.107. STATUS AND USE OF FUNDS. (a) Funds received
18	18	under Section 12.106 after September 1, 2001, by a charter holder:
19	19	(1) are considered to be public funds for all purposes
20	20	under state law;
21	21	(2) are held in trust by the charter holder for the
22	22	benefit of the students of the open-enrollment charter school;
23	23	(3) may be used only for a purpose for which a school
24	24	may use local funds under Section 45.105(c); and
25	25	(4) pending their use, must be deposited into a bank or
26	26	credit union, as defined by Section 45.201, with which the charter
27	27	holder has entered into a depository contract.
28	28	(b) A charter holder shall deliver to the agency a copy of
29	29	the depository contract between the charter holder and any bank or
30	30	credit union into which state funds are deposited.
31	31	SECTION 3. Section 45.201, Education Code, is amended by
32	32	adding Subdivision (5) to read as follows:
33	33	(5) "Credit union" has the meaning assigned by Section
34	34	121.002, Finance Code. The term does not include any credit union
35	35	the deposits of which are not insured by the National Credit Union
36	36	Share Insurance Fund.
37	37	SECTION 4. Section 45.203, Education Code, is amended to
38	38	read as follows:
39	39	Sec. 45.203. DEPOSITORY MUST BE A BANK OR CREDIT UNION. A
40	40	school depository must be a bank or credit union located in this
41	41	state.
42	42	SECTION 5. Section 45.204, Education Code, is amended to
43	43	read as follows:
44	44	Sec. 45.204. CONFLICT OF INTEREST. (a) If a member of the
45	45	board of trustees of a school district is a stockholder, officer,
46	46	director, or employee of a bank or credit union, the bank or credit
47	47	union is not disqualified from bidding, submitting a proposal, or
48	48	becoming the depository of the district if the bank or credit union
49	49	is selected by a majority vote of the board of trustees of the
50	50	district or a majority vote of a quorum when only a quorum is
51	51	present.
52	52	(b) If a member of the board of trustees of a school district
53	53	is a stockholder, officer, director, or employee of a bank or credit
54	54	union that has bid or submitted a proposal to become a depository
55	55	for the district, the member may not vote on awarding a depository
56	56	contract to the bank or credit union, and the contract must be
57	57	awarded by a majority vote of the trustees as provided by Subsection
58	58	(a) who are not either a stockholder, officer, director, or
59	59	employee of a bank or credit union receiving a district depository
60	60	contract.
61	61	SECTION 6. Sections 45.205(a) and (b), Education Code, are
62	62	amended to read as follows:
63	63	(a) Except as provided by Subsection (b), the depository
64	64	bank or credit union when selected shall serve for a term of two
65	65	years and until its successor is selected and has qualified.
66	66	(b) A school district and the district's depository bank or
67	67	credit union may agree to extend a depository contract for three
68	68	additional two-year terms. The contract may be modified for each
69	69	two-year extension if both parties mutually agree to the terms. An
70	70	extension under this subsection is not subject to the requirements
71	71	of Section 45.206.
72	72	SECTION 7. Sections 45.206(a-1), (a-2), (b), and (d),
73	73	Education Code, are amended to read as follows:
74	74	(a-1) If a school district chooses under Subsection (a) to
75	75	use competitive bidding, the district shall, not later than the
76	76	30th day before the date the current depository contract expires,
77	77	mail to each bank or credit union located in the district and, if
78	78	desired, to other banks or credit unions, a notice stating the time
79	79	and place in which bid applications will be received for selecting a
80	80	depository or depositories. The notice must include a uniform bid
81	81	blank in the form prescribed by State Board of Education rule.
82	82	(a-2) If a school district chooses under Subsection (a) to
83	83	use requests for proposals, the district shall, not later than the
84	84	30th day before the date the current depository contract expires,
85	85	mail to each bank or credit union located in the district and, if
86	86	desired, to other banks or credit unions, a notice stating the time
87	87	and place in which proposals will be received for selecting a
88	88	depository or depositories. The notice must include a uniform
89	89	proposal blank in the form prescribed by State Board of Education
90	90	rule.
91	91	(b) The school district may add to the uniform bid or
92	92	proposal blank other terms that do not unfairly restrict
93	93	competition between banks or credit unions in or near the territory
94	94	of the district.
95	95	(d) If the school district chooses under Subsection (a) to
96	96	use requests for proposals, the district shall state the selection
97	97	criteria, including the factors specified under Section 45.207(c),
98	98	in the request for proposals and shall select the proposal that
99	99	offers the best value to the district based on the evaluation and
100	100	ranking of each submitted proposal in relation to the stated
101	101	selection criteria. A district may negotiate with the bank or
102	102	credit union that submits the highest-ranked proposal to determine
103	103	any terms of the proposed depository contract other than the
104	104	interest rates proposed.
105	105	SECTION 8. Sections 45.207(a), (a-1), (b), and (c),
106	106	Education Code, are amended to read as follows:
107	107	(a) A school district shall award the depository contract to
108	108	the bank or credit union that submits the highest bid or the
109	109	highest-ranked proposal, as determined under Subsection (c),
110	110	except that the district may award the contract as provided by
111	111	Subsection (a-1) if:
112	112	(1) the district:
113	113	(A) receives tying bids for the contract; or
114	114	(B) after evaluating the proposals for the
115	115	contract, ranks two or more proposals equally;
116	116	(2) each bank or credit union submitting a tying bid or
117	117	proposal has bid or proposed to pay the district the maximum
118	118	interest rates allowed by law by the Board of Governors of the
119	119	Federal Reserve System and the Board of Directors of the Federal
120	120	Deposit Insurance Corporation or the National Credit Union
121	121	Administration Board, as applicable; and
122	122	(3) the tying bids or proposals are otherwise equal in
123	123	the judgment and discretion of the board of trustees of the
124	124	district.
125	125	(a-1) In the case of tying bids or proposals, the board of
126	126	trustees may award the depository contract by:
127	127	(1) determining by lot which of the banks or credit
128	128	unions submitting the tying bids or proposals will receive the
129	129	contract; or
130	130	(2) awarding a contract to each of the banks or credit
131	131	unions submitting the tying bids or proposals.
132	132	(b) The board of trustees may, during the period of the
133	133	contract, determine the amount of funds to be deposited in each
134	134	depository bank or credit union and determine the account services
135	135	offered in the bid or proposal form that are to be provided by each
136	136	bank or credit union in its capacity as school district depository.
137	137	All funds received by the district from or through the agency shall
138	138	be deposited, at the district's option, in one depository bank or
139	139	credit union or invested in a public funds investment pool created
140	140	under Chapter 791, Government Code, to be designated by the
141	141	district.
142	142	(c) The board of trustees of the school district shall at a
143	143	regular or special meeting consider in accordance with this
144	144	subsection each bid or proposal received. In determining the
145	145	highest and best bid or the highest-ranked proposal, or in case of
146	146	tying bids or proposals the highest and best tying bids or
147	147	proposals, the board of trustees shall consider:
148	148	(1) the interest rate bid or proposed on time
149	149	deposits;
150	150	(2) charges for keeping district accounts, records,
151	151	and reports and furnishing checks;
152	152	(3) the ability of the bank or credit union submitting
153	153	the bid or proposal to provide the necessary services and perform
154	154	the duties as school district depository; and
155	155	(4) any other matter that in the judgment of the board
156	156	of trustees would be to the best interest of the school district.
157	157	SECTION 9. Sections 45.208(a), (b), and (f), Education
158	158	Code, are amended to read as follows:
159	159	(a) Each [The] bank or credit union [banks] selected as a
160	160	[the] depository [or depositories] and the school district shall
161	161	enter into a depository contract [or contracts], bond [or bonds],
162	162	or other necessary instrument [instruments] setting forth the
163	163	duties and agreements pertaining to the depository, in a form and
164	164	with the content prescribed by the State Board of Education. The
165	165	parties shall attach to the contract and incorporate by reference
166	166	the bid or proposal of the depository.
167	167	(b) Each [The] depository bank or credit union shall attach
168	168	to the contract and file with the school district a bond in an
169	169	initial amount equal to the estimated highest daily balance,
170	170	determined by the board of trustees of the district, of all deposits
171	171	that the school district will have in the depository during the term
172	172	of the contract, less any applicable Federal Deposit Insurance
173	173	Corporation or National Credit Union Share Insurance Fund
174	174	insurance. The bond must be payable to the school district and must
175	175	be signed by the depository bank or credit union and by some surety
176	176	company authorized to do business in this state. The depository
177	177	bank or credit union shall increase the amount of the bond if the
178	178	board of trustees determines it to be necessary to adequately
179	179	protect the funds of the school district deposited with the
180	180	depository bank or credit union.
181	181	(f) In lieu of the bond required under Subsection (b), a
182	182	[the] depository bank or credit union may deposit or pledge, with
183	183	the school district or with a trustee designated by the school
184	184	district, approved securities in an amount sufficient to adequately
185	185	protect the funds of the school district deposited with the
186	186	depository bank or credit union. A depository bank or credit union
187	187	may give a bond and deposit or pledge approved securities in an
188	188	aggregate amount sufficient to adequately protect the funds of the
189	189	school district deposited with the depository bank or credit union.
190	190	The school district shall designate from time to time the amount of
191	191	approved securities or the aggregate amount of the bond and
192	192	approved securities to adequately protect the district. The
193	193	district may not designate an amount less than the balance of school
194	194	district funds on deposit with a [the] depository bank or credit
195	195	union from day to day, less any applicable Federal Deposit
196	196	Insurance Corporation or National Credit Union Share Insurance Fund
197	197	insurance. A [The] depository bank or credit union may substitute
198	198	approved securities on obtaining the approval of the school
199	199	district. For purposes of this subsection, the approved securities
200	200	are valued at their market value.
201	201	SECTION 10. Section 45.209, Education Code, is amended to
202	202	read as follows:
203	203	Sec. 45.209. INVESTMENT OF DISTRICT FUNDS. The school
204	204	district may provide in its bid or proposal blank for the right to
205	205	place on time deposits with a bank or credit union [savings and loan
206	206	institutions] located in this state only funds that are fully
207	207	insured by the Federal Deposit Insurance Corporation or the
208	208	National Credit Union Share Insurance Fund. A district may not
209	209	place on deposit with any bank or credit union [savings and loan
210	210	institution] any bond or certificate of indebtedness proceeds as
211	211	provided by Section 45.102. A depository bank or credit union may
212	212	not be compelled without its consent to accept on time deposit any
213	213	bond proceeds under Section 45.102, but a depository bank or credit
214	214	union may offer a bid or proposal of interest equaling the highest
215	215	bid or proposal of interest for the time deposit of the bond
216	216	proceeds tendered by another bank or credit union. If the
217	217	depository bank or credit union equals the bid or proposal, it is
218	218	entitled to receive the bond proceeds on time deposit.
219	219	SECTION 11. This Act takes effect September 1, 2019.