| 1 | 1 | | 87R9596 JES-F |
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| 2 | 2 | | By: Bettencourt S.B. No. 1362 |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | A BILL TO BE ENTITLED |
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| 6 | 6 | | AN ACT |
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| 7 | 7 | | relating to prohibiting public schools from leasing, owning, or |
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| 8 | 8 | | having a business interest in certain entities and real property |
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| 9 | 9 | | associated with those entities. |
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| 10 | 10 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 11 | 11 | | SECTION 1. Subchapter E, Chapter 45, Education Code, is |
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| 12 | 12 | | amended by adding Section 45.116 to read as follows: |
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| 13 | 13 | | Sec. 45.116. OWNERSHIP OF OR BUSINESS INTEREST IN CERTAIN |
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| 14 | 14 | | ENTITIES AND PROPERTY PROHIBITED. (a) In this section: |
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| 15 | 15 | | (1) "Affiliate" has the meaning assigned by Section |
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| 16 | 16 | | 1.002, Business Organizations Code. |
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| 17 | 17 | | (2) "Business interest" means owning or controlling, |
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| 18 | 18 | | directly or indirectly, more than a 10 percent interest in a |
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| 19 | 19 | | business entity. |
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| 20 | 20 | | (b) This section does not apply if the commissioner |
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| 21 | 21 | | determines that a business interest in an entity or the lease or |
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| 22 | 22 | | ownership of real property, directly or indirectly through an |
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| 23 | 23 | | affiliate, by a school district or open-enrollment charter school |
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| 24 | 24 | | is used primarily for classroom space or serves a public purpose. |
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| 25 | 25 | | (c) A school district or open-enrollment charter school may |
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| 26 | 26 | | not, directly or indirectly through an affiliate, including an |
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| 27 | 27 | | affiliated nonprofit corporation, have a business interest in an |
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| 28 | 28 | | entity or lease or own real property in this state associated with |
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| 29 | 29 | | an entity described by the North American Industry Classification |
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| 30 | 30 | | System (NAICS) in any of the following sector codes: |
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| 31 | 31 | | (1) Sector 53: Real Estate and Rental and Leasing; |
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| 32 | 32 | | (2) Sector 71: Arts, Entertainment, and Recreation; or |
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| 33 | 33 | | (3) Sector 72: Accommodation and Food Services. |
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| 34 | 34 | | (d) This section does not prohibit or restrict a school |
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| 35 | 35 | | district or open-enrollment charter school from: |
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| 36 | 36 | | (1) leasing or otherwise providing real property or a |
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| 37 | 37 | | facility that the district or school owns or leases to an individual |
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| 38 | 38 | | or entity for use by that individual or entity if the district or |
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| 39 | 39 | | school is not prohibited from owning or leasing the real property or |
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| 40 | 40 | | facility; or |
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| 41 | 41 | | (2) entering into a lease or other financing |
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| 42 | 42 | | arrangement for district or school property provided by other law, |
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| 43 | 43 | | including with a public facility corporation created under Chapter |
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| 44 | 44 | | 303, Local Government Code. |
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| 45 | 45 | | (e) The commissioner may adopt rules necessary to implement |
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| 46 | 46 | | this section. |
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| 47 | 47 | | SECTION 2. (a) The change in law made by this Act applies |
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| 48 | 48 | | only to real property leased or acquired by a school district or |
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| 49 | 49 | | open-enrollment charter school on or after the effective date of |
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| 50 | 50 | | this Act. |
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| 51 | 51 | | (b) The change in law made by this Act applies to a business |
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| 52 | 52 | | interest in an entity acquired by a school district or |
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| 53 | 53 | | open-enrollment charter school before, on, or after the effective |
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| 54 | 54 | | date of this Act. Except as provided by Subsection (c) of this |
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| 55 | 55 | | section, a school district or open-enrollment charter school |
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| 56 | 56 | | subject to Section 45.116, Education Code, as added by this Act, |
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| 57 | 57 | | shall divest all business interest in an entity described by that |
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| 58 | 58 | | section not later than September 1, 2026, unless the commissioner |
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| 59 | 59 | | of education determines that the business interest serves a public |
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| 60 | 60 | | purpose in accordance with Section 45.116(b), Education Code, as |
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| 61 | 61 | | added by this Act. |
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| 62 | 62 | | (c) A school district or open-enrollment charter school |
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| 63 | 63 | | subject to Section 45.116, Education Code, as added by this Act, |
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| 64 | 64 | | that owns a natatorium that is associated with an entity that the |
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| 65 | 65 | | district or school must divest under Subsection (b) of this section |
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| 66 | 66 | | may retain ownership of the natatorium and may provide for access |
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| 67 | 67 | | between the natatorium and the associated entity, so long as the |
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| 68 | 68 | | district or school divests the business interest in the associated |
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| 69 | 69 | | entity in accordance with Subsection (b) of this section. |
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| 70 | 70 | | SECTION 3. This Act takes effect September 1, 2021. |
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