78R1442 SLO-D

By:  Giddings                                                     H.B. No. 758



A BILL TO BE ENTITLED

AN ACT

relating to contracts between a school district and a business 
entity in which a district trustee has a substantial interest; 
providing a criminal penalty.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Section 171.003(a), Local Government Code, is 
amended to read as follows:
	(a)  A local public official commits an offense if the 
official knowingly:   
		(1)  violates Section 171.004 or 171.0041;                             
		(2)  acts as surety for a business entity that has work, 
business, or a contract with the governmental entity; or
		(3)  acts as surety on any official bond required of an 
officer of the governmental entity.
	SECTION 2.  Chapter 171, Local Government Code, is amended 
by adding Section 171.0041 to read as follows:
	Sec. 171.0041.  CERTAIN SCHOOL DISTRICT CONTRACTS 
PROHIBITED.  (a)  Except as provided by Subsection (b), a school 
district may not enter into a contract with a business entity in 
which a district trustee has a substantial interest.
	(b)  A school district may enter into a contract with a 
business entity in which a district trustee has a substantial 
interest if:
		(1)  the board of trustees at an open meeting 
determines, based on credible evidence, that:
			(A)  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; and
			(B)  the goods or services at issue are reasonably 
priced; and      
		(2)  each trustee who has a substantial interest in the 
business entity complies with Section 171.004.
	SECTION 3.  Section 171.0041, Local Government Code, as 
added by this Act, applies only to a contract executed on or after 
September 1, 2003. A contract executed before September 1, 2003, is 
governed by the law as it existed on the date the contract was 
executed, and the former law is continued in effect for that 
purpose.
	SECTION 4.  This Act takes effect September 1, 2003.