79R4917 ESH-D
By: Harper-Brown H.B. No. 2204
A BILL TO BE ENTITLED
AN ACT
relating to the sale of public educational facilities to real
estate investment trusts.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 45, Education Code, is amended by adding
Subchapter I to read as follows:
SUBCHAPTER I. SALE OF SCHOOL DISTRICT OR CHARTER SCHOOL FACILITIES
TO REAL ESTATE INVESTMENT TRUST
Sec. 45.251. SALE OF SCHOOL DISTRICT OR CHARTER SCHOOL
FACILITIES TO REAL ESTATE INVESTMENT TRUST AUTHORIZED. An
independent school district or open-enrollment charter school may
sell a district or school facility to a real estate investment trust
as provided by this subchapter.
Sec. 45.252. CONCURRENT AGREEMENTS. (a) Concurrent with
the sale of a facility under this subchapter, a school district or
charter school must enter into:
(1) a lease with the real estate investment trust
purchasing the facility under which the school district or charter
school may use the facility as provided by Subsection (c); and
(2) a contract with the investment trust or another
entity for the trust or other entity to manage, maintain, and, as
necessary, improve the facility.
(b) A lease under Subsection (a)(1) must be for a term of at
least 20 years. A contract under Subsection (a)(2) for a facility
must be for the same term as the lease relating to that facility.
(c) A lease under Subsection (a)(1) must provide that, for
the duration of the lease:
(1) during mandatory school hours, the facility must
be used for educational purposes; and
(2) at times other than during mandatory school hours,
the facility may be used for other purposes as determined by the
trust managers of the real estate investment trust.
Sec. 45.253. NOTICE OF PROPOSED SALE; PROPOSAL. (a) Except
as provided by Section 45.254, before selling a facility to a real
estate investment trust under this subchapter or executing a lease
or contract in connection with the sale, the board of trustees of a
school district or the governing body of an open-enrollment charter
school shall:
(1) determine which facility is proposed to be sold;
(2) determine the terms on which the board or
governing body will consider selling the facility;
(3) publish a notice to prospective purchasers
requesting sealed written proposals from prospective purchasers to
purchase the facility; and
(4) make a formal determination as to which sealed
written proposal is most advantageous to the district or charter
school and accept that proposal or reject all proposals if
considered advisable.
(b) A notice under Subsection (a)(3) must be published at
least two weeks before the date set for receiving proposals in a
real estate journal and in at least two newspapers of general
circulation in the school district or the area served by the charter
school, as applicable. The notice must include:
(1) the terms of sale and the matters to be addressed
by concurrent agreements required under Section 45.252 that will be
considered; and
(2) the time and date by which, and place where, the
proposals must be received.
(c) A proposal submitted by a real estate investment trust
under this section must include proposals relating to the terms of
each concurrent agreement required by Section 45.252.
Sec. 45.254. UNSOLICITED PROPOSALS BY REAL ESTATE
INVESTMENT TRUSTS. (a) A real estate investment trust may make an
unsolicited proposal to a school district or open-enrollment
charter school to purchase a district or school facility under this
subchapter. A proposal submitted by a real estate investment trust
under this subsection must include proposals relating to the terms
of each concurrent agreement required by Section 45.252.
(b) Before a school district or charter school may accept a
proposal received under Subsection (a), the district or school
must:
(1) publish a notice of the proposed sale and a request
for competing sealed written proposals;
(2) evaluate any competing proposals submitted; and
(3) make a formal determination as to whether a
competing proposal is more advantageous to the district or charter
school than the unsolicited proposal.
(c) A notice under Subsection (b) must include:
(1) the terms of sale and the matters to be addressed
by concurrent agreements required under Section 45.252 that are
contained in the unsolicited proposal; and
(2) the time and date by which, and place where, the
competing proposals must be received.
(d) A notice under Subsection (b) must be published in the
manner required by Section 45.253(b) for a notice under Section
45.253(a)(3).
Sec. 45.255. PURCHASE BY REAL ESTATE INVESTMENT TRUST OF
FACILITIES OF MORE THAN ONE EDUCATIONAL INSTITUTION. (a) In this
section, "institution of higher education" has the meaning assigned
by Section 61.003.
(b) A real estate investment trust may purchase facilities
from any combination of school districts, open-enrollment charter
schools, and institutions of higher education.
Sec. 45.256. MANAGEMENT OF TRUST. (a) Notwithstanding
Chapter 200, Business Organizations Code, or the Texas Real Estate
Investment Trust Act (Article 6138A, Vernon's Texas Civil
Statutes):
(1) if a real estate investment trust is established
to purchase a school district or open-enrollment charter school
facility under this subchapter, the certificate of formation of the
real estate investment trust must provide that:
(A) the board of trustees of each school district
or the governing body of each open-enrollment charter school
participating in the sale is entitled to appoint two members of the
board or governing body, as applicable, to act as trust managers of
the real estate investment trust for the duration of the lease
required by Section 42.252(a)(1); and
(B) the requirement of Paragraph (A) may not be
altered by amending the certificate of formation or bylaws; and
(2) if an existing real estate investment trust seeks
to purchase a school district or open-enrollment charter school
facility under Section 42.254, the certificate of formation or
bylaws of the real estate investment trust must be amended to
provide that if the purchase is completed, the board of trustees of
each school district or the governing body of each open-enrollment
charter school participating in the sale is entitled to appoint two
members of the board or governing body, as applicable, to act as
trust managers of the real estate investment trust for the duration
of the lease required by Section 42.252(a)(1).
(b) Any compensation paid by a real estate investment trust
to a member of a school district board of trustees or of a governing
body of an open-enrollment charter school for service as a trust
manager is the property of the school district or open-enrollment
charter school, as applicable.
SECTION 2. Subchapter A, Chapter 46, Education Code, is
amended by adding Section 46.0041 to read as follows:
Sec. 46.0041. LEASES WITH REAL ESTATE INVESTMENT TRUSTS.
(a) A district may receive state assistance in connection with a
lease with a real estate investment trust under Subchapter I,
Chapter 45, concerning an instructional facility. For purposes of
this subchapter:
(1) taxes levied for purposes of maintenance and
operations that are necessary to pay a district's share of the
payments under a lease with a real estate investment trust for which
the district receives state assistance under this subchapter are
considered to be bond taxes; and
(2) payments under a lease with a real estate
investment trust are considered to be payments of principal of and
interest on bonds.
(b) Section 46.003(b) applies to taxes levied to pay a
district's share of the payments under a lease with a real estate
investment trust for which the district receives state assistance
under this subchapter.
SECTION 3. Subchapter B, Chapter 46, Education Code, is
amended by adding Section 46.0331 to read as follows:
Sec. 46.0331. LEASES WITH REAL ESTATE INVESTMENT TRUSTS.
(a) A district that sells a school facility to a real estate
investment trust under Subchapter I, Chapter 45, may receive state
assistance in connection with a lease of the facility if the
facility was acquired or constructed with eligible bonds for which
the district was receiving assistance under this subchapter. For
purposes of this subchapter:
(1) taxes levied for purposes of maintenance and
operations that are necessary to pay a district's share of the
payments under a lease with a real estate investment trust for which
the district receives state assistance under this subchapter are
considered to be bond taxes; and
(2) payments under a lease with a real estate
investment trust are considered to be payments of principal of and
interest on bonds.
(b) Section 46.003(b) applies to taxes levied to pay a
district's share of the payments under a lease with a real estate
investment trust for which the district receives state assistance
under this subchapter.
SECTION 4. Chapter 55, Education Code, is amended by adding
Subchapter D to read as follows:
SUBCHAPTER D. SALE OF INSTITUTION OR JUNIOR COLLEGE FACILITIES TO
REAL ESTATE INVESTMENT TRUST
Sec. 55.101. SALE OF INSTITUTION OR JUNIOR COLLEGE
FACILITIES TO REAL ESTATE INVESTMENT TRUST AUTHORIZED. An
institution of higher education or public junior college may sell
an institution or junior college facility to a real estate
investment trust as provided by this subchapter.
Sec. 55.102. CONCURRENT AGREEMENTS. (a) Concurrent with
the sale of a facility under this subchapter, an institution of
higher education or public junior college must enter into:
(1) a lease with the real estate investment trust
purchasing the facility under which the institution or junior
college may use the facility as provided by Subsection (c); and
(2) a contract with the investment trust or another
entity for the trust or other entity to manage, maintain, and, as
necessary, improve the facility.
(b) A lease under Subsection (a)(1) must be for a term of at
least 20 years. A contract under Subsection (a)(2) for a facility
must be for the same term as the lease relating to that facility.
(c) A lease under Subsection (a)(1) must provide that, for
the duration of the lease:
(1) during hours when the institution of higher
education or public junior college offers classes, the facility
must be used for educational purposes; and
(2) at times other than during class hours, the
facility may be used for other purposes as determined by the trust
managers of the real estate investment trust.
Sec. 55.103. NOTICE OF PROPOSED SALE; PROPOSAL. (a) Except
as provided by Section 55.104, before selling a facility to a real
estate investment trust under this subchapter or executing a lease
or contract in connection with the sale, the governing board of an
institution of higher education or public junior college shall:
(1) determine which facility is proposed to be sold;
(2) determine the terms on which the board will
consider selling the facility;
(3) publish a notice to prospective purchasers
requesting sealed written proposals from prospective purchasers to
purchase the facility; and
(4) make a formal determination as to which sealed
written proposal is most advantageous to the institution or junior
college and accept that proposal or reject all proposals if
considered advisable.
(b) A notice under Subsection (a)(3) must be published at
least two weeks before the date set for receiving proposals in a
real estate journal and in at least two newspapers of general
circulation in the county in which the institution of higher
education is located or in the junior college district, as
applicable. The notice must include:
(1) the terms of sale and the matters to be addressed
by concurrent agreements required under Section 55.102 that will be
considered; and
(2) the time and date by which, and place where, the
proposals must be received.
(c) A proposal submitted by a real estate investment trust
under this section must include proposals relating to the terms of
each concurrent agreement required by Section 55.102.
Sec. 55.104. UNSOLICITED PROPOSALS BY REAL ESTATE
INVESTMENT TRUSTS. (a) A real estate investment trust may make an
unsolicited proposal to an institution of higher education or
public junior college to purchase an institution or junior college
facility under this subchapter. A proposal submitted by a real
estate investment trust under this subsection must include
proposals relating to the terms of each concurrent agreement
required by Section 55.102.
(b) Before an institution of higher education or junior
college may accept a proposal received under Subsection (a), the
institution or junior college must:
(1) publish a notice of the proposed sale and a request
for competing sealed written proposals;
(2) evaluate any competing proposals submitted; and
(3) make a formal determination as to whether a
competing proposal is more advantageous to the institution or
junior college than the unsolicited proposal.
(c) A notice under Subsection (b) must include:
(1) the terms of sale and the matters to be addressed
by concurrent agreements required under Section 55.102 that are
contained in the unsolicited proposal; and
(2) the time and date by which, and place where, the
competing proposals must be received.
(d) A notice under Subsection (b) must be published in the
manner required by Section 55.103(b) for a notice under Section
55.103(a)(3).
Sec. 55.105. PURCHASE BY REAL ESTATE INVESTMENT TRUST OF
FACILITIES OF MORE THAN ONE EDUCATIONAL INSTITUTION. (a) In this
section, "open-enrollment charter school" means a school that has
been granted a charter under Subchapter D, Chapter 12.
(b) A real estate investment trust may purchase facilities
from any combination of institutions of higher education, public
junior colleges, independent school districts, and open-enrollment
charter schools.
Sec. 55.106. MANAGEMENT OF TRUST. (a) Notwithstanding
Chapter 200, Business Organizations Code, or the Texas Real Estate
Investment Trust Act (Article 6138A, Vernon's Texas Civil
Statutes):
(1) if a real estate investment trust is established
to purchase a facility of an institution of higher education or
public junior college under this subchapter, the certificate of
formation of the real estate investment trust must provide that:
(A) the governing board of each institution of
higher education or public junior college participating in the sale
is entitled to appoint two members of the board to act as trust
managers of the real estate investment trust for the duration of the
lease required by Section 55.102(a)(1); and
(B) the requirement of Paragraph (A) may not be
altered by amending the certificate of formation or bylaws; and
(2) if an existing real estate investment trust seeks
to purchase a facility of an institution of higher education or
public junior college under Section 55.104, the certificate of
formation or bylaws of the real estate investment trust must be
amended to provide that if the purchase is completed, the governing
board of each institution of higher education or public junior
college participating in the sale is entitled to appoint two
members of the board to act as trust managers of the real estate
investment trust for the duration of the lease required by Section
55.102(a)(1).
(b) Any compensation paid by a real estate investment trust
to a member of a governing board of an institution of higher
education or public junior college for service as a trust manager is
the property of the institution or junior college, as applicable.
SECTION 5. This Act takes effect September 1, 2005.