| (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.
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| Source Note: The provisions of this §100.1043 adopted to be effective April 18, 2002, 27 TexReg 3110; amended to be effective April 6, 2005, 30 TexReg 1911; amended to be effective September 18, 2014, 39 TexReg 7295 |
