HB3975 - Relating to authorizing a credit union to act as a school district depository.

  89R1059 JTZ-D     By: Richardson H.B. No. 3975       A BILL TO BE ENTITLED   AN ACT   relating to authorizing a credit union to act as a school district   depository.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Section 7.102(c)(34), Education Code, is amended   to read as follows:                (34)  The board shall prescribe uniform bid blanks for   school districts to use in selecting a depository bank or credit   union as required under Section 45.206.          SECTION 2.  Section 12.107, Education Code, is amended to   read as follows:          Sec. 12.107.  STATUS AND USE OF FUNDS.  (a)  Funds received   under Section 12.106 after September 1, 2001, by a charter holder:                (1)  are considered to be public funds for all purposes   under state law;                (2)  are held in trust by the charter holder for the   benefit of the students of the open-enrollment charter school;                (3)  may be used only for a purpose for which a school   may use local funds under Section 45.105(c);                (4)  pending their use, must be deposited into a bank or   credit union , as defined by Section 45.201, with which the charter   holder has entered into a depository contract; and                (5)  may not:                      (A)  be pledged or used to secure loans or bonds   for any other organization, including a non-charter operation or   out-of-state operation conducted by the charter holder or a related   party, as defined by commissioner rule adopted under Section   12.1166; or                      (B)  be used to support an operation or activity   not related to the educational activities of the charter holder.          (b)  A charter holder shall deliver to the agency a copy of   the depository contract between the charter holder and any bank or   credit union into which state funds are deposited.          SECTION 3.  Section 39A.256(c), Education Code, is amended   to read as follows:          (c)  A board of managers appointed for the final closure of a   former open-enrollment charter school under Subsection (b) has the   authority to:                (1)  access and manage any former charter holder's bank   or credit union account that contains funds received under Section   12.106; and                (2)  subject to approval by a creditor with a security   interest in or lien on property described by Section 12.128 and in   accordance with Sections 12.1281 and 12.1282, sell or transfer to   another charter holder or school district any property titled to   the former charter holder that is identified in the former   open-enrollment charter school's annual financial report filed   under Section 44.008 as being acquired, wholly or partly, with   funds received under Section 12.106.          SECTION 4.  Section 45.201, Education Code, is amended by   adding Subdivision (5) to read as follows:                 (5)     "Credit union" means a credit union as defined by   Section 121.002, Finance Code, or a federal credit union doing   business in this state.   The term does not include any credit union   the deposits of which are not insured by the National Credit Union   Share Insurance Fund.          SECTION 5.  Section 45.203, Education Code, is amended to   read as follows:          Sec. 45.203.  DEPOSITORY MUST BE A BANK OR CREDIT UNION . A   school depository must be a bank or credit union located in this   state.          SECTION 6.  Section 45.204, Education Code, is amended to   read as follows:          Sec. 45.204.  CONFLICT OF INTEREST. (a)  If a member of the   board of trustees of a school district is a stockholder, officer,   director, or employee of a bank or credit union , the bank or credit   union is not disqualified from bidding, submitting a proposal, or   becoming the depository of the district if the bank or credit union     is selected by a majority vote of the board of trustees of the   district or a majority vote of a quorum when only a quorum is   present.          (b)  If a member of the board of trustees of a school district   is a stockholder, officer, director, or employee of a bank or credit   union that has bid or submitted a proposal to become a depository   for the district, the member may not vote on awarding a depository   contract to the bank or credit union , and the contract must be   awarded by a majority vote of the trustees as provided by Subsection   (a) who are not either a stockholder, officer, director, or   employee of a bank or credit union receiving a district depository   contract.          SECTION 7.  Sections 45.205(a) and (b), Education Code, are   amended to read as follows:          (a)  Except as provided by Subsection (b), the depository   bank or credit union when selected shall serve for a term of two   years and until its successor is selected and has qualified.          (b)  A school district and the district's depository bank or   credit union may agree to extend a depository contract for three   additional two-year terms.  The contract may be modified for each   two-year extension if both parties mutually agree to the terms.  An   extension under this subsection is not subject to the requirements   of Section 45.206.          SECTION 8.  Sections 45.206(a-1), (a-2), (b), and (d),   Education Code, are amended to read as follows:          (a-1)  If a school district chooses under Subsection (a) to   use competitive bidding, the district shall, not later than the   30th day before the date the current depository contract expires,   mail to each bank or credit union located in the district and, if   desired, to other banks or credit unions , a notice stating the time   and place in which bid applications will be received for selecting a   depository or depositories. The notice must include a uniform bid   blank in the form prescribed by State Board of Education rule.          (a-2)  If a school district chooses under Subsection (a) to   use requests for proposals, the district shall, not later than the   30th day before the date the current depository contract expires,   mail to each bank or credit union located in the district and, if   desired, to other banks or credit unions , a notice stating the time   and place in which proposals will be received for selecting a   depository or depositories. The notice must include a uniform   proposal blank in the form prescribed by State Board of Education   rule.          (b)  The school district may add to the uniform bid or   proposal blank other terms that do not unfairly restrict   competition between banks or credit unions in or near the territory   of the district.          (d)  If the school district chooses under Subsection (a) to   use requests for proposals, the district shall state the selection   criteria, including the factors specified under Section 45.207(c),   in the request for proposals and shall select the proposal that   offers the best value to the district based on the evaluation and   ranking of each submitted proposal in relation to the stated   selection criteria.  A district may negotiate with the bank or   credit union that submits the highest-ranked proposal to determine   any terms of the proposed depository contract other than the   interest rates proposed.          SECTION 9.  Sections 45.207(a), (a-1), (b), and (c),   Education Code, are amended to read as follows:          (a)  A school district shall award the depository contract to   the bank or credit union that submits the highest bid or the   highest-ranked proposal, as determined under Subsection (c),   except that the district may award the contract as provided by   Subsection (a-1) if:                (1)  the district:                      (A)  receives tying bids for the contract; or                      (B)  after evaluating the proposals for the   contract, ranks two or more proposals equally;                (2)  each bank or credit union submitting a tying bid or   proposal has bid or proposed to pay the district the maximum   interest rates allowed by law by the Board of Governors of the   Federal Reserve System and the Board of Directors of the Federal   Deposit Insurance Corporation or the National Credit Union   Administration Board, as applicable ; and                (3)  the tying bids or proposals are otherwise equal in   the judgment and discretion of the board of trustees of the   district.          (a-1)  In the case of tying bids or proposals, the board of   trustees may award the depository contract by:                (1)  determining by lot which of the banks or credit   unions submitting the tying bids or proposals will receive the   contract; or                (2)  awarding a contract to each of the banks or credit   unions submitting the tying bids or proposals.          (b)  The board of trustees may, during the period of the   contract, determine the amount of funds to be deposited in each   depository bank or credit union and determine the account services   offered in the bid or proposal form that are to be provided by each   bank or credit union in its capacity as school district depository.     All funds received by the district from or through the agency shall   be deposited, at the district's option, in one depository bank or   credit union  or invested in a public funds investment pool created   under Chapter 791, Government Code, to be designated by the   district.          (c)  The board of trustees of the school district shall at a   regular or special meeting consider in accordance with this   subsection each bid or proposal received. In determining the   highest and best bid or the highest-ranked proposal, or in case of   tying bids or proposals the highest and best tying bids or   proposals, the board of trustees shall consider:                (1)  the interest rate bid or proposed on time   deposits;                (2)  charges for keeping district accounts, records,   and reports and furnishing checks;                (3)  the ability of the bank or credit union submitting   the bid or proposal to provide the necessary services and perform   the duties as school district depository; and                (4)  any other matter that in the judgment of the board   of trustees would be to the best interest of the school district.          SECTION 10.  Sections 45.208(a), (b), and (f), Education   Code, are amended to read as follows:          (a)   Each  [ The ] bank or credit union [ banks ] selected as a     [ the ] depository [ or depositories ] and the school district shall   enter into a depository contract [ or contracts ], bond [ or bonds ],   or other necessary instrument  [ instruments ] setting forth the   duties and agreements pertaining to the depository, in a form and   with the content prescribed by the State Board of Education.  The   parties shall a [Text truncated for display. Full text available on Congress.gov.]