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A BILL TO BE ENTITLED
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AN ACT
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relating to ownership and control of property acquired with state |
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funds by the charter holder of an open-enrollment charter school. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 12.128, Education Code, is amended by |
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adding Subsections (f), (g), (h), (i), (j), and (k) to read as |
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follows: |
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(f) Notwithstanding Subsection (a), real or personal |
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property acquired, improved, or maintained using state funds is |
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considered to be public property only to the extent state funds were |
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used to pay for the acquisition, improvement, or maintenance. The |
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use of state funds for acquisition, improvement, or maintenance of |
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property must be detailed in the accounting and property records of |
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the charter holder and the charter school. If the property is |
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acquired with federal funds, this subsection may be preempted |
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wholly or partly by federal law. |
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(g) The property of an open-enrollment charter school used |
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for a purpose authorized by Subsection (a)(3) is considered to be |
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owned by the charter holder, regardless of the source of funds used |
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to acquire the property. The charter holder retains title to the |
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property, exercises complete control over the property, and is |
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entitled to all use and benefit from the property. Property |
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acquired, improved, or maintained using both state funds and other |
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funds is considered mixed public and private property, and is |
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subject to all requirements for public property under this section. |
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(h) A charter holder shall include an exhibit identifying |
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the capitalized assets of the charter holder and the ownership |
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interest of all parties for all capitalized real and personal |
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property held by the charter holder or acquired, improved, or |
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maintained by the charter holder during the term of the charter in |
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the annual audit report of the charter holder. |
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(i) The governing body and officers of the charter holder |
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shall ensure that: |
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(1) public property is properly and accurately |
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documented in the accounting and property records of the charter |
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holder and the open-enrollment charter school; and |
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(2) the accounting and property records of the charter |
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holder separately disclose the cost basis and accumulated |
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depreciation of all public property as determined by the |
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commissioner or designee, and all other property held, acquired, |
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improved, or maintained by the charter holder. |
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(j) If, after a due diligence review of the exhibits and |
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other disclosures in the annual audit report filed by the charter |
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holder, the commissioner determines that the exhibit identifying |
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capitalized assets contains errors, the commissioner may require a |
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charter holder to engage, at the charter holder's expense, an |
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independent audit firm for purposes of reviewing and confirming the |
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classification of real and personal property consistent with |
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applicable authoritative standards. |
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(k) Subject to the rights of any secured creditor or valid |
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lien holder and in accordance with Subsection (e), on revocation, |
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expiration, or surrender of the charter, dissolution of the charter |
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holder, or final loss of exempt status under Section 501(c)(3), |
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Internal Revenue Code of 1986, the charter holder shall: |
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(1) reimburse the state in a manner prescribed by the |
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commissioner for the current value of the public's ownership |
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interest in the capitalized assets disclosed in the exhibit |
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prepared under Subsection (h); |
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(2) transfer title to the state in a manner prescribed |
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by the commissioner and in accordance with the rules of the Internal |
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Revenue Service; or |
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(3) transfer title to another charter holder subject |
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to the consent and approval of the commissioner. |
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SECTION 2. This Act takes effect immediately if it receives |
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a vote of two-thirds of all the members elected to each house, as |
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provided by Section 39, Article III, Texas Constitution. If this |
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Act does not receive the vote necessary for immediate effect, this |
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Act takes effect September 1, 2015. |