BUSINESS AND OPERATIONS: DEPOSITORY CONTRACT [LAW]

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. No later than November 1 of each year, the charter holder shall file a copy of the depository contract with the Texas Education Agency division responsible for school financial audits.

A. State funds received by a charter holder must be deposited into an account owned and controlled by the charter holder pending their use. Once properly deposited, the charter holder may immediately use the funds for any purpose described in this policy, subject to the standard of care and fiduciary duties described herein.

B. The depository selected under the terms of this policy shall be a bank located in the State of Texas. The depository may be a state bank authorized and regulated under Texas law, a national bank, a savings and loan association, or savings bank organized under Texas law, the laws of another state, or federal law. The bank must have its main office or a branch office located in the State of Texas. The term does not include any bank the deposits of which are not insured by the Federal Deposit Insurance Corporation (FDIC). Although the term excludes a bank the deposits of which are not insured by the FDIC, deposits exceeding FDIC-insured amounts need not be collateralized for the institution to constitute a “bank” for purposes of this policy.

Tex. Educ. Code §§ 12.107(a)(4), (b); 45.201(2), 45.203; 19 Tex. Admin. Code § 100.1043(b)(2).