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


Senate Research CenterC.S.S.B. 929
78R12423 KKA-DBy: Shapiro
Education
4-30-2003
Committee Report (Substituted)

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. 

C.S.S.B. 929 sends all funds currently distributed to ESCs directly to the
districts and allows the districts to decide with whom to contract for
services.  C.S.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 and
with recommendations for ESCs to be at least 80 percent funded by
fee-forservice contracts with school districts. 

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, 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. 

SECTION 2.  Amends Section 8.051(a), Education Code, to delete text
referring to funds distributed under Section 8.121 (Funding for Core
Services and Services to Improve Performance). 

SECTION 3.  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 4.  Amends Section 8.121, Education Code, as follows:

Sec. 8.121. New heading: STATE FUNDING.  (a) Deletes text referring to
state financial support for regional education service centers' provision
of services from money appropriated for the Foundation School Program, and
the distribution of that support. Prohibits the commissioner from using
money appropriated to provide regional education service centers with
financial support for services under Section 8.051 (Core Services and
Services to Improve Performance). 

(b) Requires that any money appropriated by the legislature for services
described by Section 8.051 and provided by regional education service
centers or other providers, to be distributed directly to school districts
for their use in obtaining services, except as provided by Subsection (c).
Requires the commissioner to determine the method of distribution. 

(c) Authorizes a school district to authorize, and rescind authorization
at any time, the commissioner distribute the amount that would come
directly to the district under Subsection (b), to a regional education
service center. Requires resumption of fund distribution directly to a
district if the district rescinds the authorization. Makes a conforming
change. 

SECTION 5.  (a) Requires the 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.  Requires that
the report include recommendations for a regional education service center
funding mechanism under which at least 80 percent of center funds are
derived from fee-for-service contracts with school districts. 

SECTION 6. Effective date: September 1, 2003.