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A BILL TO BE ENTITLED
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AN ACT
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relating to the sale of facilities of public institutions of higher |
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education to real estate investment trusts. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Chapter 55, Education Code, is amended by adding |
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Subchapter D to read as follows: |
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SUBCHAPTER D. SALE OF INSTITUTION OR JUNIOR COLLEGE FACILITIES TO |
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REAL ESTATE INVESTMENT TRUST |
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Sec. 55.501. SALE OF INSTITUTION OR JUNIOR COLLEGE |
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FACILITIES TO REAL ESTATE INVESTMENT TRUST AUTHORIZED. An |
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institution of higher education or junior college district may sell |
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a facility owned by the institution or junior college district to a |
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real estate investment trust as provided by this subchapter. |
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Sec. 55.502. CONCURRENT AGREEMENTS. (a) Concurrent with |
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the sale of a facility under this subchapter, an institution of |
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higher education or junior college district must enter into: |
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(1) a lease with the real estate investment trust |
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purchasing the facility under which the institution or district may |
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use the facility as provided by Subsection (c); and |
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(2) a contract with the investment trust or another |
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entity for the trust or other entity to manage, maintain, and, as |
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necessary, improve the facility. |
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(b) A lease under Subsection (a)(1) must be for a term of at |
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least 20 years. A contract under Subsection (a)(2) for a facility |
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must be for the same term as the lease relating to that facility. |
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(c) A lease under Subsection (a)(1) must provide that, for |
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the duration of the lease: |
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(1) during hours when the institution of higher |
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education or junior college district offers classes, the facility |
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must be used for educational purposes; and |
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(2) at times other than during class hours, the |
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facility may be used for other purposes as determined by the trust |
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managers of the real estate investment trust. |
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Sec. 55.503. NOTICE OF PROPOSED SALE; PROPOSAL. (a) Except |
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as provided by Section 55.504, before selling a facility to a real |
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estate investment trust under this subchapter or executing a lease |
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or contract in connection with the sale, the governing board of an |
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institution of higher education or junior college district shall: |
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(1) determine which facility is proposed to be sold; |
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(2) determine the terms on which the board will |
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consider selling the facility; |
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(3) publish a notice to prospective purchasers |
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requesting sealed written proposals from prospective purchasers to |
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purchase the facility; and |
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(4) make a formal determination as to which sealed |
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written proposal is most advantageous to the institution or |
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district and accept that proposal or reject all proposals if the |
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governing board considers it advisable to do so. |
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(b) A notice under Subsection (a)(3) must be published at |
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least two weeks before the date set for receiving proposals in a |
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real estate journal and in at least two newspapers of general |
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circulation in the county in which the institution of higher |
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education is located or in the junior college district, as |
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applicable. The notice must include: |
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(1) the terms of sale and the matters to be addressed |
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by concurrent agreements required under Section 55.502 that will be |
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considered; and |
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(2) the time and date by which, and place where, the |
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proposals must be received. |
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(c) A proposal submitted by a real estate investment trust |
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under this section must include proposals relating to the terms of |
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each concurrent agreement required by Section 55.502. |
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Sec. 55.504. UNSOLICITED PROPOSALS BY REAL ESTATE |
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INVESTMENT TRUSTS. (a) A real estate investment trust may make an |
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unsolicited proposal to an institution of higher education or |
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junior college district to purchase a facility owned by the |
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institution or district under this subchapter. A proposal |
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submitted by a real estate investment trust under this subsection |
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must include proposals relating to the terms of each concurrent |
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agreement required by Section 55.502. |
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(b) Before an institution of higher education or junior |
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college district may accept a proposal received under Subsection |
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(a), the institution or district must: |
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(1) publish a notice of the proposed sale and a request |
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for competing sealed written proposals; |
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(2) evaluate any competing proposals submitted; and |
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(3) make a formal determination as to whether a |
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competing proposal is more advantageous to the institution or |
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district than the unsolicited proposal. |
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(c) A notice under Subsection (b) must include: |
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(1) the terms of sale and the matters to be addressed |
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by concurrent agreements required under Section 55.502 that are |
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contained in the unsolicited proposal; and |
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(2) the time and date by which, and place where, the |
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competing proposals must be received. |
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(d) A notice under Subsection (b) must be published in the |
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manner required by Section 55.503(b) for a notice under Section |
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55.503(a)(3). |
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Sec. 55.505. PURCHASE BY REAL ESTATE INVESTMENT TRUST OF |
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FACILITIES OF MORE THAN ONE INSTITUTION OR JUNIOR COLLEGE DISTRICT. |
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A real estate investment trust may purchase facilities from any |
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combination of institutions of higher education and junior college |
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districts. |
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Sec. 55.506. MANAGEMENT OF TRUST. (a) Notwithstanding |
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Chapter 200, Business Organizations Code, or the Texas Real Estate |
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Investment Trust Act (Article 6138A, Vernon's Texas Civil |
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Statutes): |
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(1) if a real estate investment trust is established |
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to purchase a facility of an institution of higher education or |
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junior college district under this subchapter, the certificate of |
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formation of the real estate investment trust must provide that: |
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(A) the governing board of each institution of |
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higher education or junior college district participating in the |
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sale is entitled to appoint two members of the board to act as trust |
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managers of the real estate investment trust for the duration of the |
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lease required by Section 55.502(a)(1); and |
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(B) the requirement of Paragraph (A) may not be |
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altered by amending the certificate of formation or bylaws; and |
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(2) if an existing real estate investment trust seeks |
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to purchase a facility of an institution of higher education or |
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junior college district under Section 55.504, the certificate of |
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formation or bylaws of the real estate investment trust must be |
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amended to provide that if the purchase is completed, the governing |
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board of each institution of higher education or junior college |
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district participating in the sale is entitled to appoint two |
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members of the board to act as trust managers of the real estate |
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investment trust for the duration of the lease required by Section |
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55.502(a)(1). |
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(b) Any compensation paid by a real estate investment trust |
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to a member of a governing board of an institution of higher |
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education or junior college district for service as a trust manager |
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is the property of the institution or junior college district, as |
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applicable. |
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SECTION 2. This Act takes effect September 1, 2007. |