By:  Shapiro                                                      S.B. No. 929


A BILL TO BE ENTITLED

AN ACT

relating to regional education service centers.                               
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Subchapter A, Chapter 8, Education Code, is 
amended by adding Section 8.008 to read as follows:
	Sec. 8.008.  APPLICABILITY OF CERTAIN LAWS RELATING TO 
POLITICAL ACTIVITIES.  A regional education service center and each 
center employee is subject to Chapter 556, Government Code, and for 
purposes of that chapter:
		(1)  the center is considered to be a state agency; and                
		(2)  each center employee is considered to be a state 
employee.      
	SECTION 2.  Subchapter B, Chapter 8, Education Code, is 
amended by adding Section 8.056 to read as follows:
	Sec. 8.056.  LIMITATION ON COMPENSATION FOR CERTAIN 
SERVICES.  A regional education service center that acts as a fiscal 
agent or broker in connection with an agreement between two school 
districts under Subchapter E, Chapter 41, may not, unless 
authorized in writing by the district receiving transferred funds 
in accordance with the agreement:
		(1)  be compensated by the districts in an amount that 
exceeds the administrative cost of providing the service; or
		(2)  otherwise retain for use by the center any amount 
other than the compensation permitted under Subdivision (1) from 
the funds transferred between the districts in accordance with the 
agreement.
	SECTION 3.  (a)  The comptroller of public accounts shall 
contract with a consultant for a comprehensive audit of regional 
education service centers in this state.  The audit must include:
		(1)  a detailed analysis of all services provided by 
regional education service centers that identifies, for each 
service provided:
			(A)  the percentage of school districts receiving 
the service;             
			(B)  the costs to the regional education service 
centers of providing the service;
			(C)  the charges imposed on school districts by 
the regional education service centers for providing the service; 
and
			(D)  the difference between the amount determined 
under Paragraph (B) of this subdivision and the amount determined 
under Paragraph (C) of this subdivision;
		(2)  an evaluation of whether any services provided by 
a regional education service center could be provided at a lower 
cost by an alternative service provider, as determined based on a 
survey of potential alternative service providers;
		(3)  an analysis of the governance structures of 
regional education service centers;
		(4)  a review of the financial condition of regional 
education service centers and their current funding sources to 
determine the adequacy of state appropriations to regional 
education service centers and whether those appropriations should 
continue to be made;
		(5)  a review of the number and geographic distribution 
of regional education service centers;
		(6)  a review of the institutional structure of 
regional education service centers, with consideration of whether a 
separate system of Texas Education Agency field offices would be 
appropriate or whether any regional education service center 
functions should be transferred to Texas Education Agency 
facilities; and
		(7)  an analysis of the support functions of regional 
education service centers to determine whether support 
requirements could be decreased through business processes or 
application redesigns.
	(b)  Costs of the audit required by Subsection (a) of this 
section shall 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)  Not later than December 1, 2004, the comptroller of 
public accounts shall submit a report to the legislature concerning 
the results of the audit required by Subsection (a) of this section.  
The report must 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 4.  This Act takes effect September 1, 2003.