Current through Reg. 49, No. 38; September 20, 2024
(a) Status and use of state funds.
(1) State funds received by a charter holder
are public funds for all purposes under state law, and may be used only for a
purpose for which a school district may use local funds under Texas Education
Code (TEC), §
45.105(c).
Any other use or application of such funds constitutes misuse and
misapplication of public funds and is subject to the civil and criminal laws
governing misuse or misapplication of Texas public funds.
(2) State funds received by a charter holder
are held by the charter holder in trust for the benefit of the students of the
charter school. In their use of public funds, the governing body of a charter
holder, and the governing body and officers of a charter school, shall be held
to the standard of care and fiduciary duties that a trustee owes a beneficiary
under Texas law.
(3) A charter
school shall accept tuition for students holding certain student visas as
described in TEC, §25.0031(a).
(b) Depository contract. Pending their use,
state funds received by a charter holder must be deposited into a bank with
which the charter holder has entered into a depository contract. Each year
within the period prescribed by §
100.1007
of this title (relating to Annual Report on Open-Enrollment Charter Governance)
for filing articles of incorporation, the charter holder must file a copy of
the depository contract with the Texas Education Agency division responsible
for school financial audits; however, if there has been no change since the
last filing, the charter holder may file a statement to this effect in lieu of
a copy of the depository contract.
(1) State
funds received by a charter holder must be deposited into an account owned and
controlled exclusively by the charter holder pending their use. Once properly
deposited, the charter holder may immediately use the funds for any purpose
described in subsection (a)(1) of this section, subject to the standard of care
and fiduciary duties described in subsection (a)(2) of this section.
(2) A "bank" is defined by TEC, §
45.201. Although the
term excludes a bank the deposits of which are not insured by the Federal
Deposit Insurance Corporation (FDIC), deposits exceeding FDIC-insured amounts
need not be collateralized for the institution to constitute a "bank" under
this subsection.
(3)
Notwithstanding this subsection, if required by a contract executed prior to
September 1, 2001, state funds may be deposited into an account managed by a
bond trustee acting on behalf of a charter holder for the sole purpose of
complying with debt service obligations of the charter holder on a bond issued
under TEC, Chapter 53.
