C.S.H.B. 758 78(R)    BILL ANALYSIS


C.S.H.B. 758
By: Giddings
Public Education
Committee Report (Substituted)



BACKGROUND AND PURPOSE 

Under current law, members of local boards of trustees are not prevented
from doing business with the school districts they serve. Although board
members are required to declare their interests in businesses and abstain
from voting on issues that involve contracts with those businesses, there
is clear evidence that board members are benefitting from contracts
obtained within these guidelines from business dealings with the districts
they serve.  To ensure that all business transactions made by a school
district are truly independent of any undue influence, are highly ethical
and are always conducted in the best interest of the students and
taxpayers of the community, board members should be prohibited from doing
business either directly or indirectly with the school district they are
serving as elected officials. C.S.H.B. 758 amends the Local Government
Code relating to contracts between school districts and business entities. 


RULEMAKING AUTHORITY

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


ANALYSIS

C.S.H.B. 758 amends the Local Government Code prohibiting certain school
districts from entering into a contract with a business entity where a
district trustee has substantial interest. The bill authorizes a school
district to enter into a contract with a business entity in which a
trustee has a substantial interest if the board of trustees at an open
meeting determines, based on credible evidence, that no other business
entity within a 50-mile radius of the school district's central
administrative office is capable of providing the same or better quality
goods or services at the same or lower cost.   

The bill requires that a school district entering such a contract comply
with Section 44.031, Education Code, and that each trustee with a
substantial interest comply with Section 171.004, Local Government Code. 


EFFECTIVE DATE

September 1, 2003.


COMPARISON OF ORIGINAL TO SUBSTITUTE

C.S.H.B. 758 modifies the original version by adding a provision requiring
school districts to comply with Section 44.031 Education Code relating to
purchasing contracts. C.S.H.B. 758 modifies the original version by
removing provisions that stipulate that a local public official commits an
offense if the official violates this added section (Section 171.0041,
Education Code).