Bill Text: TX SB1133 | 2019-2020 | 86th Legislature | Engrossed

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Bill Title: Relating to prohibiting public schools from owning, leasing, or having a business interest in certain entities and real property associated with those entities.

Spectrum: Slight Partisan Bill (Republican 5-2)

Status: (Engrossed - Dead) 2019-05-02 - Referred to Public Education [SB1133 Detail]

Download: Texas-2019-SB1133-Engrossed.html

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By: Bettencourt, et al. S.B. No. 1133

A BILL TO BE ENTITLED
AN ACT
relating to prohibiting public schools from owning, leasing, or
having a business interest in certain entities and real property
associated with those entities.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter E, Chapter 45, Education Code, is
amended by adding Section 45.116 to read as follows:
Sec. 45.116. OWNERSHIP OF OR BUSINESS INTEREST IN CERTAIN
ENTITIES AND PROPERTY PROHIBITED. (a) In this section:
(1) "Affiliate" has the meaning assigned by Section
1.002, Business Organizations Code.
(2) "Business interest" means owning or controlling,
directly or indirectly, more than a 10 percent interest in a
business entity.
(b) This section does not apply if the commissioner
determines that a business interest in an entity or the lease or
ownership of real property, directly or indirectly through an
affiliate, by a school district or open-enrollment charter school
is used primarily for classroom space or serves a public purpose.
(c) A school district or open-enrollment charter school may
not, directly or indirectly through an affiliate, including an
affiliated nonprofit corporation, have a business interest in an
entity or lease or own real property in this state associated with
an entity described by the North American Industry Classification
System (NAICS) in any of the following sector codes:
(1) Sector 53: Real Estate and Rental and Leasing;
(2) Sector 71: Arts, Entertainment, and Recreation;
or
(3) Sector 72: Accommodation and Food Services.
(d) This section does not prohibit or restrict a school
district or open-enrollment charter school from:
(1) leasing or otherwise providing real property or a
facility that the district or school owns or leases to an individual
or entity for use by that individual or entity if the district or
school is not prohibited from owning or leasing the real property or
facility; or
(2) entering into a lease or other financing
arrangement for district or school property provided by other law,
including with a public facility corporation created under Chapter
303, Local Government Code.
(e) The commissioner may adopt rules necessary to implement
this section.
SECTION 2. (a) The change in law made by this Act applies
only to real property leased or acquired by a school district or
open-enrollment charter school on or after the effective date of
this Act.
(b) The change in law made by this Act applies to a business
interest in an entity acquired by a school district or
open-enrollment charter school before, on, or after the effective
date of this Act. Except as provided by Subsection (c) of this
section, a school district or open-enrollment charter school
subject to Section 45.116, Education Code, as added by this Act,
shall divest all business interest in an entity described by that
section not later than September 1, 2024, unless the commissioner
determines that the business interest serves a public purpose in
accordance with Section 45.116(b), Education Code, as added by this
Act.
(c) A school district or open-enrollment charter school
subject to Section 45.116, Education Code, as added by this Act,
that owns a natatorium that is associated with an entity that the
district or school must divest under Subsection (b) of this section
may retain ownership of the natatorium and may provide for access
between the natatorium and the associated entity, so long as the
district or school divests the business interest in the associated
entity in accordance with Subsection (b) of this section.
SECTION 3. This Act takes effect September 1, 2019.