BILL ANALYSIS


S.B. 1228
By: Barrientos (Gutierrez)
05-05-95
Committee Report (Unamended)


BACKGROUND

In 1993, Congress enacted legislation requiring the governor of
each state to establish a State PostSecondary Review Program to
reduce student loan defaults and to eliminate fraud, waste, and 
abuse in certain student programs.  The Texas Higher Education
Coordinating Board was designated by the governor as the State
Postsecondary Review Entity, and is responsible for reviewing
postsecondary institutions.  Each review helps determine whether an
institution may continue to participate in federal student
financial aid programs.

Existing state and federal laws affecting the State Postsecondary
Review Entity (entity) do not provide institutions protection
against premature or inappropriate disclosure of unfounded  
allegations about an institution under review, nor do they grant
the entity any enforcement authority.

PURPOSE

If enacted, S.B. 1228 amends sections of the Education Code
relating to actions by the State Postsecondary Review Entity.

RULEMAKING

It is the committee's opinion that this bill does not grant any
additional rulemaking authority to a state officer, institution, or
agency.

SECTION BY SECTION ANALYSIS

            SUBCHAPTER Q.  STATE POSTSECONDARY REVIEW PROGRAM

   Sec.  61.791.  DEFINITIONS.  Defines "entity" and "program."

   Sec.  61.792.  AGREEMENT.  Authorizes the governor to enter into
an agreement with the United States Secretary of Education under 20
U.S.C. Chapter 28, Subchapter IV, Part G, Subpart 1, to participate 
in the program.  Requires the agreement to designate the entity to
administer the program.

   Sec.  61.793.  NOTICE.  Requires the entity to notify an 
institution of higher education (institution) whose activities are
being reviewed under the program that the review has begun as soon 
as practicable after beginning the review.  Requires the notice to 
describe the acts and circumstances giving rise to the review in
sufficient detail to provide the institution with notice of the
allegations made.

   Sec.  61.794.  CIVIL INVESTIGATIVE DEMAND.  (a)  Authorizes an
authorized employee or agent of the entity to execute in writing
and serve on an institution under review a civil investigative
demand requiring the institution to produce documents and records
or permit inspection and copying of such documents and records.

   (b)  Requires a civil investigative demand to perform certain
responsibilities.

   (c)  Authorizes the entity to serve a civil investigative demand
on an institution's president, chief financial officer or
registered agent for service of process.

   (d)  Authorizes service of a civil investigative demand to be
made by personal service of an executed copy of the demand or
mailing of an executed copy of the demand by certified mail.

   (e)  Requires an institution to produce documents or records
demanded under this section during normal business hours at the
institution's normal place of business or at the time and place on
which the institution and the staff of the entity agree.

   (f)  Authorizes the entity to file a petition for an order of
enforcement in a district court in the county in which the
institution is located, and serve the petition on a person
designated in Subsection (c) if an institution does not comply with
a civil investigative demand under this section.  Authorizes the
court to enter any order necessary to enforce the demand.  Provides 
that failure to comply with a final order entered under this
subsection is punishable by contempt. Provides that a final order
entered under this subsection is subject to appeal to the Texas 
Supreme Court.

   Sec.  61.795.  JUDICIAL REVIEW.  (a)  Authorizes an institution
to appeal a decision rendered by the entity in a contested case
brought under the program.  Requires the court to determine the
appeal under the substantial evidence rule.

   (b)  Requires an action brought under the program to be brought
in a district court in Travis County, except as provided by Section
61.794.

   Sec.  61.796.  CONFIDENTIALITY.  (a)  Provides that
investigative information obtained by the entity or an employee or
agent of the entity as a result of the review of an institution,
including complaints received, investigation files and reports, and
documentary material produced under Section 61.794, is privileged
and confidential.  Prohibits investigative information obtained
during the review of an institution from being disclosed to a
person other than the entity or an authorized employee or agent of
the entity, except as provided in Subsections (c), (d), or (e).

   (b)  Authorizes the entity to use investigative information
obtained during a review of an institution in an enforcement action
brought under the program.  Prohibits the entity from being
required to produce investigative reports or memoranda,
attorney-client communications, attorney-work product, or other
materials protected by a privilege or to disclose the identity of
nontestifying complaints while an action against an institution is
pending, except as provided by the Texas Rules of Civil Procedure
or the Texas Rules of Civil Evidence.  Provides that the
investigative information obtained during the review is available
as provided by Chapter 552, Government Code, on final adjudication
of an action brought by the entity against an institution or on
completion of a review of the institution without any action being
taken against the institution.

   (c)  Authorizes investigative information in the possession of
the entity or an authorized employee or agent of the entity to be
disclosed to an appropriate law enforcement authority if it relates
to an investigation of an institution in another state, territory,
or country if that institution has a branch campus or home office
in this state.

   (d)  Requires the entity to report the information to the
appropriate law enforcement agency in accordance with law if
investigative information in the possession of the entity or an 
authorized employee or agent of the entity indicates that a crime
may have been committed.  Provides that confidential information
disclosed by the entity to a law enforcement agency remains
confidential and may not be disclosed by the investigating agency 
except as necessary to further the investigation or prosecute a
criminal violation.

   (e)  Authorizes the entity to disclose relevant investigative
information to the institution's governing board if investigative
information in the possession of the entity or an authorized
employee or agent of the entity indicates a potential violation of
another law for which the institution may be liable.

   Sec.  61.797.  IMMUNITY.  Provides that a person who, in good
faith, assists the entity in the performance of the program is
immune from suit by a private party.

SECTION 2. Effective date:  September 1, 1995.

SECTION 3. Emergency clause.

SUMMARY OF COMMITTEE ACTION

S.B. 1228 was considered by the committee in a formal meeting on
May 5, 1995.

The bill was reported favorably without amendment, with the
recommendation that it do pass and be printed, by a record vote of
7 ayes, 0 nays, 0 pnv, 2 absent.