BILL ANALYSIS
C.S.S.B. 1228
By: Barrientos
Education
04-27-95
Committee Report (Substituted)
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 law 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
As proposed, C.S.S.B. 1228 amends sections of the Education Code
relating to actions by the State Postsecondary Review Entity.
RULEMAKING AUTHORITY
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
SECTION 1. Amends Chapter 61, Education Code, by adding Subchapter
Q, as follows:
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.