Texas 2025 - 89th Regular

Texas Senate Bill SB1842 Compare Versions

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

Old	New	Differences
1	1	89R1059 JTZ-D
2	2	By: Paxton S.B. No. 1842
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6	6
7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to authorizing a credit union to act as a school district
10	10	depository.
11	11	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
12	12	SECTION 1. Section 7.102(c)(34), Education Code, is amended
13	13	to read as follows:
14	14	(34) The board shall prescribe uniform bid blanks for
15	15	school districts to use in selecting a depository bank or credit
16	16	union as required under Section 45.206.
17	17	SECTION 2. Section 12.107, Education Code, is amended to
18	18	read as follows:
19	19	Sec. 12.107. STATUS AND USE OF FUNDS. (a) Funds received
20	20	under Section 12.106 after September 1, 2001, by a charter holder:
21	21	(1) are considered to be public funds for all purposes
22	22	under state law;
23	23	(2) are held in trust by the charter holder for the
24	24	benefit of the students of the open-enrollment charter school;
25	25	(3) may be used only for a purpose for which a school
26	26	may use local funds under Section 45.105(c);
27	27	(4) pending their use, must be deposited into a bank or
28	28	credit union, as defined by Section 45.201, with which the charter
29	29	holder has entered into a depository contract; and
30	30	(5) may not:
31	31	(A) be pledged or used to secure loans or bonds
32	32	for any other organization, including a non-charter operation or
33	33	out-of-state operation conducted by the charter holder or a related
34	34	party, as defined by commissioner rule adopted under Section
35	35	12.1166; or
36	36	(B) be used to support an operation or activity
37	37	not related to the educational activities of the charter holder.
38	38	(b) A charter holder shall deliver to the agency a copy of
39	39	the depository contract between the charter holder and any bank or
40	40	credit union into which state funds are deposited.
41	41	SECTION 3. Section 39A.256(c), Education Code, is amended
42	42	to read as follows:
43	43	(c) A board of managers appointed for the final closure of a
44	44	former open-enrollment charter school under Subsection (b) has the
45	45	authority to:
46	46	(1) access and manage any former charter holder's bank
47	47	or credit union account that contains funds received under Section
48	48	12.106; and
49	49	(2) subject to approval by a creditor with a security
50	50	interest in or lien on property described by Section 12.128 and in
51	51	accordance with Sections 12.1281 and 12.1282, sell or transfer to
52	52	another charter holder or school district any property titled to
53	53	the former charter holder that is identified in the former
54	54	open-enrollment charter school's annual financial report filed
55	55	under Section 44.008 as being acquired, wholly or partly, with
56	56	funds received under Section 12.106.
57	57	SECTION 4. Section 45.201, Education Code, is amended by
58	58	adding Subdivision (5) to read as follows:
59	59	(5) "Credit union" means a credit union as defined by
60	60	Section 121.002, Finance Code, or a federal credit union doing
61	61	business in this state. The term does not include any credit union
62	62	the deposits of which are not insured by the National Credit Union
63	63	Share Insurance Fund.
64	64	SECTION 5. Section 45.203, Education Code, is amended to
65	65	read as follows:
66	66	Sec. 45.203. DEPOSITORY MUST BE A BANK OR CREDIT UNION. A
67	67	school depository must be a bank or credit union located in this
68	68	state.
69	69	SECTION 6. Section 45.204, Education Code, is amended to
70	70	read as follows:
71	71	Sec. 45.204. CONFLICT OF INTEREST. (a) If a member of the
72	72	board of trustees of a school district is a stockholder, officer,
73	73	director, or employee of a bank or credit union, the bank or credit
74	74	union is not disqualified from bidding, submitting a proposal, or
75	75	becoming the depository of the district if the bank or credit union
76	76	is selected by a majority vote of the board of trustees of the
77	77	district or a majority vote of a quorum when only a quorum is
78	78	present.
79	79	(b) If a member of the board of trustees of a school district
80	80	is a stockholder, officer, director, or employee of a bank or credit
81	81	union that has bid or submitted a proposal to become a depository
82	82	for the district, the member may not vote on awarding a depository
83	83	contract to the bank or credit union, and the contract must be
84	84	awarded by a majority vote of the trustees as provided by Subsection
85	85	(a) who are not either a stockholder, officer, director, or
86	86	employee of a bank or credit union receiving a district depository
87	87	contract.
88	88	SECTION 7. Sections 45.205(a) and (b), Education Code, are
89	89	amended to read as follows:
90	90	(a) Except as provided by Subsection (b), the depository
91	91	bank or credit union when selected shall serve for a term of two
92	92	years and until its successor is selected and has qualified.
93	93	(b) A school district and the district's depository bank or
94	94	credit union may agree to extend a depository contract for three
95	95	additional two-year terms. The contract may be modified for each
96	96	two-year extension if both parties mutually agree to the terms. An
97	97	extension under this subsection is not subject to the requirements
98	98	of Section 45.206.
99	99	SECTION 8. Sections 45.206(a-1), (a-2), (b), and (d),
100	100	Education Code, are amended to read as follows:
101	101	(a-1) If a school district chooses under Subsection (a) to
102	102	use competitive bidding, the district shall, not later than the
103	103	30th day before the date the current depository contract expires,
104	104	mail to each bank or credit union located in the district and, if
105	105	desired, to other banks or credit unions, a notice stating the time
106	106	and place in which bid applications will be received for selecting a
107	107	depository or depositories. The notice must include a uniform bid
108	108	blank in the form prescribed by State Board of Education rule.
109	109	(a-2) If a school district chooses under Subsection (a) to
110	110	use requests for proposals, the district shall, not later than the
111	111	30th day before the date the current depository contract expires,
112	112	mail to each bank or credit union located in the district and, if
113	113	desired, to other banks or credit unions, a notice stating the time
114	114	and place in which proposals will be received for selecting a
115	115	depository or depositories. The notice must include a uniform
116	116	proposal blank in the form prescribed by State Board of Education
117	117	rule.
118	118	(b) The school district may add to the uniform bid or
119	119	proposal blank other terms that do not unfairly restrict
120	120	competition between banks or credit unions in or near the territory
121	121	of the district.
122	122	(d) If the school district chooses under Subsection (a) to
123	123	use requests for proposals, the district shall state the selection
124	124	criteria, including the factors specified under Section 45.207(c),
125	125	in the request for proposals and shall select the proposal that
126	126	offers the best value to the district based on the evaluation and
127	127	ranking of each submitted proposal in relation to the stated
128	128	selection criteria. A district may negotiate with the bank or
129	129	credit union that submits the highest-ranked proposal to determine
130	130	any terms of the proposed depository contract other than the
131	131	interest rates proposed.
132	132	SECTION 9. Sections 45.207(a), (a-1), (b), and (c),
133	133	Education Code, are amended to read as follows:
134	134	(a) A school district shall award the depository contract to
135	135	the bank or credit union that submits the highest bid or the
136	136	highest-ranked proposal, as determined under Subsection (c),
137	137	except that the district may award the contract as provided by
138	138	Subsection (a-1) if:
139	139	(1) the district:
140	140	(A) receives tying bids for the contract; or
141	141	(B) after evaluating the proposals for the
142	142	contract, ranks two or more proposals equally;
143	143	(2) each bank or credit union submitting a tying bid or
144	144	proposal has bid or proposed to pay the district the maximum
145	145	interest rates allowed by law by the Board of Governors of the
146	146	Federal Reserve System and the Board of Directors of the Federal
147	147	Deposit Insurance Corporation or the National Credit Union
148	148	Administration Board, as applicable; and
149	149	(3) the tying bids or proposals are otherwise equal in
150	150	the judgment and discretion of the board of trustees of the
151	151	district.
152	152	(a-1) In the case of tying bids or proposals, the board of
153	153	trustees may award the depository contract by:
154	154	(1) determining by lot which of the banks or credit
155	155	unions submitting the tying bids or proposals will receive the
156	156	contract; or
157	157	(2) awarding a contract to each of the banks or credit
158	158	unions submitting the tying bids or proposals.
159	159	(b) The board of trustees may, during the period of the
160	160	contract, determine the amount of funds to be deposited in each
161	161	depository bank or credit union and determine the account services
162	162	offered in the bid or proposal form that are to be provided by each
163	163	bank or credit union in its capacity as school district depository.
164	164	All funds received by the district from or through the agency shall
165	165	be deposited, at the district's option, in one depository bank or
166	166	credit union or invested in a public funds investment pool created
167	167	under Chapter 791, Government Code, to be designated by the
168	168	district.
169	169	(c) The board of trustees of the school district shall at a
170	170	regular or special meeting consider in accordance with this
171	171	subsection each bid or proposal received. In determining the
172	172	highest and best bid or the highest-ranked proposal, or in case of
173	173	tying bids or proposals the highest and best tying bids or
174	174	proposals, the board of trustees shall consider:
175	175	(1) the interest rate bid or proposed on time
176	176	deposits;
177	177	(2) charges for keeping district accounts, records,
178	178	and reports and furnishing checks;
179	179	(3) the ability of the bank or credit union submitting
180	180	the bid or proposal to provide the necessary services and perform
181	181	the duties as school district depository; and
182	182	(4) any other matter that in the judgment of the board
183	183	of trustees would be to the best interest of the school district.
184	184	SECTION 10. Sections 45.208(a), (b), and (f), Education
185	185	Code, are amended to read as follows:
186	186	(a) Each [The] bank or credit union [banks] selected as a
187	187	[the] depository [or depositories] and the school district shall
188	188	enter into a depository contract [or contracts], bond [or bonds],
189	189	or other necessary instrument [instruments] setting forth the
190	190	duties and agreements pertaining to the depository, in a form and
191	191	with the content prescribed by the State Board of Education. The
192	192	parties shall attach to the contract and incorporate by reference
193	193	the bid or proposal of the depository.
194	194	(b) Each [The] depository bank or credit union shall attach
195	195	to the contract and file with the school district a bond in an
196	196	initial amount equal to the estimated highest daily balance,
197	197	determined by the board of trustees of the district, of all deposits
198	198	that the school district will have in the depository during the term
199	199	of the contract, less any applicable Federal Deposit Insurance
200	200	Corporation or National Credit Union Share Insurance Fund
201	201	insurance. The bond must be payable to the school district and must
202	202	be signed by the depository bank or credit union and by some surety
203	203	company authorized to do business in this state. The depository
204	204	bank or credit union shall increase the amount of the bond if the
205	205	board of trustees determines it to be necessary to adequately
206	206	protect the funds of the school district deposited with the
207	207	depository bank or credit union.
208	208	(f) In lieu of the bond required under Subsection (b), a
209	209	[the] depository bank or credit union may deposit or pledge, with
210	210	the school district or with a trustee designated by the school
211	211	district, approved securities in an amount sufficient to adequately
212	212	protect the funds of the school district deposited with the
213	213	depository bank or credit union. A depository bank or credit union
214	214	may give a bond and deposit or pledge approved securities in an
215	215	aggregate amount sufficient to adequately protect the funds of the
216	216	school district deposited with the depository bank or credit union.
217	217	The school district shall designate from time to time the amount of
218	218	approved securities or the aggregate amount of the bond and
219	219	approved securities to adequately protect the district. The
220	220	district may not designate an amount less than the balance of school
221	221	district funds on deposit with a [the] depository bank or credit
222	222	union from day to day, less any applicable Federal Deposit
223	223	Insurance Corporation or National Credit Union Share Insurance Fund
224	224	insurance. A [The] depository bank or credit union may substitute
225	225	approved securities on obtaining the approval of the school
226	226	district. For purposes of this subsection, the approved securities
227	227	are valued at their market value.
228	228	SECTION 11. Section 45.209, Education Code, is amended to
229	229	read as follows:
230	230	Sec. 45.209. INVESTMENT OF DISTRICT FUNDS. The school
231	231	district may provide in its bid or proposal blank for the right to
232	232	place on time deposits with a bank or credit union [savings and loan
233	233	institutions] located in this state only funds that are fully
234	234	insured by the Federal Deposit Insurance Corporation or the
235	235	National Credit Union Share Insurance Fund. A district may not
236	236	place on deposit with any bank or credit union [savings and loan
237	237	institution] any bond or certificate of indebtedness proceeds as
238	238	provided by Section 45.102. A depository bank or credit union may
239	239	not be compelled without its consent to accept on time deposit any
240	240	bond proceeds under Section 45.102, but a depository bank or credit
241	241	union may offer a bid or proposal of interest equaling the highest
242	242	bid or proposal of interest for the time deposit of the bond
243	243	proceeds tendered by another bank or credit union. If the
244	244	depository bank or credit union equals the bid or proposal, it is
245	245	entitled to receive the bond proceeds on time deposit.
246	246	SECTION 12. This Act takes effect September 1, 2025.