SRC-AMY S.B. 335 78(R) BILL ANALYSIS Senate Research Center S.B. 335 78R1442 SLO-DBy: Wentworth Education 2/14/2003 As Filed DIGEST AND PURPOSE Currently, Texas law does not prohibit a school district from entering into a contract with a business in which a district trustee has a substantial stake. This leads to the possibility and possible perception of a conflict of interest. As proposed, S.B. 335 prohibits a school district from entering into a contract with business in which a district trustee has a substantial stake, and provides a criminal penalty for doing so. This Act includes exceptions for school districts located in areas where alternative businesses are not available. RULEMAKING AUTHORITY This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 171.003(a), Local Government Code, to make a conforming change relating to the addition of Section 171.0041 to the code. SECTION 2. Amends Chapter 171, Local Government Code, by adding Section 171.0041, as follows: Sec. 171.0041. CERTAIN SCHOOL DISTRICT CONTRACTS PROHIBITED. (a) Prohibits, except as provided by Subsection (b), a school district from entering into a contract with a business in which a district trustee has a substantial interest. (b) Authorizes a school district to enter into a contract with a business in which a district trustee has a substantial interest under certain circumstances. SECTION 3. Makes application of this Act prospective. SECTION 4. Effective date: September 1, 2003.