SRC-AMY S.B. 929 78(R)    BILL ANALYSIS


Senate Research CenterS.B. 929
By: Shapiro
Education
6-13-2003
Enrolled
DIGEST AND PURPOSE 

Regional education service centers (ESC) were developed to provide school
districts with a broker for contracts with service providers and to take
advantage of economies-of-scale buying power.  Currently ESCs are neither
a direct state agency not a dire instruction provider.  ESCs have utilized
state and local funds to build regional facilities that require
significant capital expenditures for construction and maintenance.  Funds
designated for district use are often directed to ESCs for program
development to serve the districts; if the programs developed do not meet
a district's need there is not an alternative to which the district can
look for appropriate services.  ESCs, as brokers, retain a portion of the
Chapter 41 (Equalized Wealth Level) funds designated for Chapter 42
(Foundation School Program) districts to develop programs that benefit all
districts in the region. However, at least 13 percent of the contracts
reviewed by the Legislative Budget Board were with Chapter 42 districts
outside of the ESCs' individual regions and therefore not served by the
programs. 

S.B. 929 establishes the applicability of laws regarding political
activities and conflict of interests to ESCs. S.B. 929 provides a
mechanism for a district to decide to have its funds distributed directly
to an ESC. This bill also prohibits an ESC from retaining any fees for
brokering beyond the administrative cost of brokering a transfer of funds.
This bill requires the comptroller to audit all ESCs and report to the
legislature on the results thereof. 

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 Subchapter A, Chapter 8, Education Code, by adding
Section 8.008, 8.009, and 8.010, as follows: 

Sec. 8.008.  APPLICABILITY OF CERTAIN LAWS RELATING TO POLITICAL
ACTIVITIES.  Provides that a regional education service center and each
center employee is subject to Chapter 556, Government Code (Political
Activities by Certain Public Entities and Individuals).  Provides that for
purposes of that chapter, the center is considered a state agency and each
center employee is considered a state employee. 

Sec. 8.009.  APPLICABILITY OF CERTAIN LAWS RELATING TO CONFLICT OF
INTEREST.  (a) Provides that a member of the board of directors and the
executive director of a regional education service center are each
considered to be a local public official for purposes of Chapter 171
(Regulation of Conflicts of Interest of Officers of Municipalities,
Counties, and Certain Other Local Governments), Local Government Code.
Provides that, for the purposes of this chapter, a member of the board of
directors and the executive director of a regional education service
center are each considered to have a substantial interest in a business
entity if a person related to the member or the executive director in the
third degree by consanguinity or affinity, as determined under Chapter 573
(Degrees of Relationship, Nepotism Prohibitions) Government Code, has a
substantial interest in the business entity under Section 171.002
(Substantial Interest in Business Entity), Local Government Code. 

(b) Provides that a regional education service center is considered to be
a political  subdivision for purposes of Section 131.903 (Conflict of
Interest), Local Government Code. 

(c) Provides that, to the extent consistent with this section, if a law
described by this section applies to a school district or the board of
trustees of a school district, the law applies to a regional education
service center and the board of directors and executive director of a
regional education service center. 

Sec. 8.010.  SUNSET PROVISION.  (a) Provides that, notwithstanding any
other law, regional education service centers are subject to Chapter 325
(Sunset Law),  Government Code (Texas Sunset Act).  Provides that unless
continued in existence as provided by that chapter, the regional education
service centers are abolished and this chapter expires September 1, 2005.
Requires review of regional education service centers under this section
to be conducted in conjunction with review of the agency under Section
7.004 (Sunset Provision). 

(b) Requires the comptroller, to assist the Sunset Advisory Commission
(Sunset) in its review, to conduct a review of the regional education
service centers and report the results of the review to Sunset not later
than June 1, 2004.  Requires the comptroller to consult with Sunset
regarding the scope of the review and to transmit the report to certain
elected officials. 

SECTION 2.  Amends Subchapter B, Chapter 8, Education Code, by adding
Section 8.056, as follows: 

Sec. 8.056.  LIMITATION ON COMPENSATION FOR CERTAIN SERVICES. Prohibits a
regional education service center that acts as a fiscal agent or broker in
connection with an agreement between two school districts under Chapter
41E (Education of Nonresident Students) from being compensated by the
districts over and above the administrative cost of providing the service
or otherwise retaining funds from the transfer between districts for
center use, unless authorized in writing by the district receiving
transferred funds. 

SECTION 3.  (a) Requires the comptroller of public accounts (comptroller)
to contract with a consultant for a comprehensive audit of regional
education service centers in the state and sets forth the required content
of the audit. 

(b) Requires costs of the audit required by Subsection (a) of this section
to be paid using amounts appropriated for the fiscal biennium ending
August 31, 2005, to regional education service centers or to the Texas
Education Agency for the costs of services provided by regional education
service centers, not to exceed a total amount of $750,000. 

(c) Requires the comptroller to submit a report concerning the audit
required in Subsection (a) not later than December 1, 2004.  

SECTION 4.  Effective date: September 1, 2003.