CHAPTER 44. FISCAL MANAGEMENT - Texas Statutes

EDUCATION CODE

TITLE 2. PUBLIC EDUCATION

SUBTITLE I. SCHOOL FINANCE AND FISCAL MANAGEMENT

CHAPTER 44. FISCAL MANAGEMENT

SUBCHAPTER A. SCHOOL DISTRICT FISCAL MANAGEMENT

Sec. 44.001. FISCAL GUIDELINES. (a) The commissioner shall

establish advisory guidelines relating to the fiscal management

of a school district.

(b) The commissioner shall report annually to the State Board of

Education the status of school district fiscal management as

reflected by the advisory guidelines and by statutory

requirements.

Added by Acts 1995, 74th Leg., ch. 260, Sec. 1, eff. May 30,

1995.

Sec. 44.0011. FISCAL YEAR. The fiscal year of a school district

begins on July 1 or September 1 of each year, as determined by

the board of trustees of the district. The commissioner may adopt

rules concerning the submission of information by a district

under Chapter 39 or 42 based on the fiscal year of the district.

Added by Acts 1999, 76th Leg., ch. 643, Sec. 1, eff. Sept. 1,

2001.

Sec. 44.002. PREPARATION OF BUDGET. (a) On or before a date

set by the State Board of Education, the superintendent shall

prepare, or cause to be prepared, a proposed budget covering all

estimated revenue and proposed expenditures of the district for

the following fiscal year.

(b) The budget must be prepared according to generally accepted

accounting principles, rules adopted by the State Board of

Education, and adopted policies of the board of trustees.

Added by Acts 1995, 74th Leg., ch. 260, Sec. 1, eff. May 30,

1995.

Sec. 44.003. RECORDS AND REPORTS. The superintendent shall

ensure that records are kept and that copies of all budgets, all

forms, and all other reports are filed on behalf of the school

district at the proper times and in the proper offices as

required by this code.

Added by Acts 1995, 74th Leg., ch. 260, Sec. 1, eff. May 30,

1995.

Sec. 44.004. NOTICE OF BUDGET AND TAX RATE MEETING; BUDGET

ADOPTION. (a) When the budget has been prepared under Section

44.002, the president shall call a meeting of the board of

trustees for the purpose of adopting a budget for the succeeding

fiscal year.

(b) The president shall provide for the publication of notice of

the budget and proposed tax rate meeting in a daily, weekly, or

biweekly newspaper published in the district. If no daily,

weekly, or biweekly newspaper is published in the district, the

president shall provide for the publication of notice in at least

one newspaper of general circulation in the county in which the

district's central administrative office is located. Notice under

this subsection shall be published not earlier than the 30th day

or later than the 10th day before the date of the hearing.

(c) The notice of public meeting to discuss and adopt the budget

and the proposed tax rate may not be smaller than one-quarter

page of a standard-size or a tabloid-size newspaper, and the

headline on the notice must be in 18-point or larger type.

Subject to Subsection (d), the notice must:

(1) contain a statement in the following form:

"NOTICE OF PUBLIC MEETING TO DISCUSS BUDGET AND PROPOSED TAX RATE

"The (name of school district) will hold a public meeting at

(time, date, year) in (name of room, building, physical location,

city, state). The purpose of this meeting is to discuss the

school district's budget that will determine the tax rate that

will be adopted. Public participation in the discussion is

invited." The statement of the purpose of the meeting must be in

bold type. In reduced type, the notice must state: "The tax

rate that is ultimately adopted at this meeting or at a separate

meeting at a later date may not exceed the proposed rate shown

below unless the district publishes a revised notice containing

the same information and comparisons set out below and holds

another public meeting to discuss the revised notice.";

(2) contain a section entitled "Comparison of Proposed Budget

with Last Year's Budget," which must show the difference,

expressed as a percent increase or decrease, as applicable, in

the amounts budgeted for the preceding fiscal year and the amount

budgeted for the fiscal year that begins in the current tax year

for each of the following:

(A) maintenance and operations;

(B) debt service; and

(C) total expenditures;

(3) contain a section entitled "Total Appraised Value and Total

Taxable Value," which must show the total appraised value and the

total taxable value of all property and the total appraised value

and the total taxable value of new property taxable by the

district in the preceding tax year and the current tax year as

calculated under Section 26.04, Tax Code;

(4) contain a statement of the total amount of the outstanding

and unpaid bonded indebtedness of the school district;

(5) contain a section entitled "Comparison of Proposed Rates

with Last Year's Rates," which must:

(A) show in rows the tax rates described by Subparagraphs

(i)-(iii), expressed as amounts per $100 valuation of property,

for columns entitled "Maintenance & Operations," "Interest

& Sinking Fund," and "Total," which is the sum of

"Maintenance & Operations" and "Interest & Sinking Fund":

(i) the school district's "Last Year's Rate";

(ii) the "Rate to Maintain Same Level of Maintenance &

Operations Revenue & Pay Debt Service," which:

(a) in the case of "Maintenance & Operations," is the tax

rate that, when applied to the current taxable value for the

district, as certified by the chief appraiser under Section

26.01, Tax Code, and as adjusted to reflect changes made by the

chief appraiser as of the time the notice is prepared, would

impose taxes in an amount that, when added to state funds to be

distributed to the district under Chapter 42, would provide the

same amount of maintenance and operations taxes and state funds

distributed under Chapter 42 per student in average daily

attendance for the applicable school year that was available to

the district in the preceding school year; and

(b) in the case of "Interest & Sinking Fund," is the tax

rate that, when applied to the current taxable value for the

district, as certified by the chief appraiser under Section

26.01, Tax Code, and as adjusted to reflect changes made by the

chief appraiser as of the time the notice is prepared, and when

multiplied by the district's anticipated collection rate, would

impose taxes in an amount that, when added to state funds to be

distributed to the district under Chapter 46 and any excess taxes

collected to service the district's debt during the preceding tax

year but not used for that purpose during that year, would

provide the amount required to service the district's debt; and

(iii) the "Proposed Rate";

(B) contain fourth and fifth columns aligned with the columns

required by Paragraph (A) that show, for each row required by

Paragraph (A):

(i) the "Local Revenue per Student," which is computed by

multiplying the district's total taxable value of property, as

certified by the chief appraiser for the applicable school year

under Section 26.01, Tax Code, and as adjusted to reflect changes

made by the chief appraiser as of the time the notice is

prepared, by the total tax rate, and dividing the product by the

number of students in average daily attendance in the district

for the applicable school year; and

(ii) the "State Revenue per Student," which is computed by

determining the amount of state aid received or to be received by

the district under Chapters 42, 43, and 46 and dividing that

amount by the number of students in average daily attendance in

the district for the applicable school year; and

(C) contain an asterisk after each calculation for "Interest

& Sinking Fund" and a footnote to the section that, in

reduced type, states "The Interest & Sinking Fund tax revenue

is used to pay for bonded indebtedness on construction,

equipment, or both. The bonds, and the tax rate necessary to pay

those bonds, were approved by the voters of this district.";

(6) contain a section entitled "Comparison of Proposed Levy with

Last Year's Levy on Average Residence," which must:

(A) show in rows the information described by Subparagraphs

(i)-(iv), rounded to the nearest dollar, for columns entitled

"Last Year" and "This Year":

(i) "Average Market Value of Residences," determined using the

same group of residences for each year;

(ii) "Average Taxable Value of Residences," determined after

taking into account the limitation on the appraised value of

residences under Section 23.23, Tax Code, and after subtracting

all homestead exemptions applicable in each year, other than

exemptions available only to disabled persons or persons 65 years

of age or older or their surviving spouses, and using the same

group of residences for each year;

(iii) "Last Year's Rate Versus Proposed Rate per $100 Value";

and

(iv) "Taxes Due on Average Residence," determined using the same

group of residences for each year; and

(B) contain the following information: "Increase (Decrease) in

Taxes" expressed in dollars and cents, which is computed by

subtracting the "Taxes Due on Average Residence" for the

preceding tax year from the "Taxes Due on Average Residence" for

the current tax year;

(7) contain the following statement in bold print: "Under state

law, the dollar amount of school taxes imposed on the residence

of a person 65 years of age or older or of the surviving spouse

of such a person, if the surviving spouse was 55 years of age or

older when the person died, may not be increased above the amount

paid in the first year after the person turned 65, regardless of

changes in tax rate or property value.";

(8) contain the following statement in bold print: "Notice of

Rollback Rate: The highest tax rate the district can adopt

before requiring voter approval at an election is (the school

district rollback rate determined under Section 26.08, Tax Code).

This election will be automatically held if the district adopts

a rate in excess of the rollback rate of (the school district

rollback rate)."; and

(9) contain a section entitled "Fund Balances," which must

include the estimated amount of interest and sinking fund

balances and the estimated amount of maintenance and operation or

general fund balances remaining at the end of the current fiscal

year that are not encumbered with or by corresponding debt

obligation, less estimated funds necessary for the operation of

the district before the receipt of the first payment under

Chapter 42 in the succeeding school year.

(c-1) The notice described by Subsection (c) must state in a

distinct row or on a separate or individual line for each of the

following taxes:

(1) the proposed rate of the school district's maintenance tax

described by Section 45.003, under the heading "Maintenance Tax";

and

(2) if the school district has issued ad valorem tax bonds under

Section 45.001, the proposed rate of the tax to pay for the

bonds, under the heading "School Debt Service Tax Approved by

Local Voters."

(d) The comptroller shall prescribe the language and format to

be used in the part of the notice required by Subsection (c). A

notice under Subsection (c) is not valid if it does not

substantially conform to the language and format prescribed by

the comptroller under this subsection.

(e) A person who owns taxable property in a school district is

entitled to an injunction restraining the collection of taxes by

the district if the district has not complied with the

requirements of Subsections (b), (c), and (d), and, if

applicable, Subsection (i), and the failure to comply was not in

good faith. An action to enjoin the collection of taxes must be

filed before the date the school district delivers substantially

all of its tax bills.

(f) The board of trustees, at the meeting called for that

purpose, shall adopt a budget to cover all expenditures for the

school district for the next succeeding fiscal year. Any taxpayer

of the district may be present and participate in the meeting.

(g) The budget must be adopted before the adoption of the tax

rate for the tax year in which the fiscal year covered by the

budget begins.

(h) Notwithstanding any other provision of this section, a

school district with a fiscal year beginning July 1 may use the

certified estimate of the taxable value of district property

required by Section 26.01(e), Tax Code, in preparing the notice

required by this section if the district does not receive on or

before June 7 the certified appraisal roll for the district

required by Section 26.01(a), Tax Code.

(i) A school district that uses a certified estimate, as

authorized by Subsection (h), may adopt a budget at the public

meeting designated in the notice prepared using the estimate, but

the district may not adopt a tax rate before the district

receives the certified appraisal roll for the district required

by Section 26.01(a), Tax Code. After receipt of the certified

appraisal roll, the district must publish a revised notice and

hold another public meeting before the district may adopt a tax

rate that exceeds:

(1) the rate proposed in the notice prepared using the estimate;

or

(2) the district's rollback rate determined under Section 26.08,

Tax Code, using the certified appraisal roll.

(j) Notwithstanding Subsections (g), (h), and (i), a school

district may adopt a budget after the district adopts a tax rate

for the tax year in which the fiscal year covered by the budget

begins if the district elects to adopt a tax rate before

receiving the certified appraisal roll for the district as

provided by Section 26.05(g), Tax Code. If a school district

elects to adopt a tax rate before adopting a budget, the district

must publish notice and hold a meeting for the purpose of

discussing the proposed tax rate as provided by this section.

Following adoption of the tax rate, the district must publish

notice and hold another public meeting before the district may

adopt a budget. The comptroller shall prescribe the language and

format to be used in the notices. The school district may use

the certified estimate of taxable value in preparing a notice

under this subsection.

Added by Acts 1995, 74th Leg., ch. 260, Sec. 1, eff. May 30,

1995. Amended by Acts 1999, 76th Leg., ch. 398, Sec. 1, eff. Aug.

30, 1999; Acts 2001, 77th Leg., ch. 898, Sec. 1, eff. Sept. 1,

2001.

Amended by:

Acts 2005, 79th Leg., Ch.

807, Sec. 2, eff. June 17, 2005.

Acts 2006, 79th Leg., 3rd C.S., Ch.

5, Sec. 1.11, eff. May 31, 2006.

Acts 2009, 81st Leg., R.S., Ch.

1328, Sec. 66, eff. September 1, 2009.

Sec. 44.0041. PUBLICATION OF SUMMARY OF PROPOSED BUDGET. (a)

Concurrently with the publication of notice of the budget under

Section 44.004, a school district shall post a summary of the

proposed budget:

(1) on the school district's Internet website; or

(2) if the district has no Internet website, in the district's

central administrative office.

(b) The budget summary must include:

(1) information relating to per student and aggregate spending

on:

(A) instruction;

(B) instructional support;

(C) central administration;

(D) district operations;

(E) debt service; and

(F) any other category designated by the commissioner; and

(2) a comparison to the previous year's actual spending.

Added by Acts 2006, 79th Leg., 3rd C.S., Ch.

5, Sec. 2.06, eff. May 31, 2006.

Sec. 44.005. FILING OF ADOPTED BUDGET. On or before a date set

by the State Board of Education, the budget must be filed with

the agency according to the rules established by the State Board

of Education.

Added by Acts 1995, 74th Leg., ch. 260, Sec. 1, eff. May 30,

1995.

Sec. 44.006. EFFECT OF ADOPTED BUDGET; AMENDMENTS. (a) Public

funds of the school district may not be spent in any manner other

than as provided for in the budget adopted by the board of

trustees, but the board may amend a budget or adopt a

supplementary emergency budget to cover necessary unforeseen

expenses.

(b) Any amendment or supplementary budget must be prepared and

filed according to rules adopted by the State Board of Education.

Added by Acts 1995, 74th Leg., ch. 260, Sec. 1, eff. May 30,

1995.

Sec. 44.007. ACCOUNTING SYSTEM; REPORT. (a) A standard school

fiscal accounting system must be adopted and installed by the

board of trustees of each school district. The accounting system

must conform with generally accepted accounting principles.

(b) The accounting system must meet at least the minimum

requirements prescribed by the commissioner, subject to review

and comment by the state auditor.

(c) A record must be kept of all revenues realized and of all

expenditures made during the fiscal year for which a budget is

adopted. A report of the revenues and expenditures for the

preceding fiscal year shall be filed with the agency on or before

the date set by the State Board of Education.

(d) The State Board of Education shall require each district, as

part of the report required by this section, to include

management, cost accounting, and financial information in a

format prescribed by the board and in a manner sufficient to

enable the board to monitor the funding process and determine

educational system costs by district, campus, and program.

Added by Acts 1995, 74th Leg., ch. 260, Sec. 1, eff. May 30,

1995.

Amended by:

Acts 2006, 79th Leg., 3rd C.S., Ch.

5, Sec. 2.08, eff. May 31, 2006.

Sec. 44.0071. COMPUTATION OF INSTRUCTIONAL EXPENDITURES RATIO

AND INSTRUCTIONAL EMPLOYEES RATIO. (a) Each fiscal year, a

school district shall compute and report to the commissioner:

(1) the percentage of the district's total expenditures for the

preceding fiscal year that were used to fund direct instructional

activities; and

(2) the percentage of the district's full-time equivalent

employees during the preceding fiscal year whose job function was

to directly provide classroom instruction to students, determined

by dividing the number of hours spent by employees in providing

direct classroom instruction by the total number of hours worked

by all district employees.

(b) At least annually a school district shall provide educators

employed by the district with a list of district employees

determined by the district for purposes of this section to be

engaged in directly providing classroom instruction to students.

The list must include the percentage of time spent by each

employee in directly providing classroom instruction to students.

(c) For purposes of this section, the computation of a

district's expenditures used to fund direct instructional

activities shall include the salary, including any associated

employment taxes, and value of any benefits provided to any

district employee who directly provided classroom instruction to

students, but only in proportion to the percentage of time spent

by the employee in directly providing classroom instruction to

students.

(d) The commissioner shall adopt rules as necessary to implement

this section. To the extent possible, the rules must provide for

development of the information required by this section using

information otherwise compiled by school districts for reporting

through the Public Education Information Management System

(PEIMS).

Added by Acts 2003, 78th Leg., ch. 1269, Sec. 1, eff. Sept. 1,

2003.

Sec. 44.008. ANNUAL AUDIT; REPORT. (a) The board of school

trustees of each school district shall have its school district

fiscal accounts audited annually at district expense by a

certified or public accountant holding a permit from the Texas

State Board of Public Accountancy. The audit must be completed

following the close of each fiscal year.

(b) The independent audit must meet at least the minimum

requirements and be in the format prescribed by the State Board

of Education, subject to review and comment by the state auditor.

The audit shall include an audit of the accuracy of the fiscal

information provided by the district through the Public Education

Information Management System (PEIMS).

(c) Each treasurer receiving or having control of any school

fund of any school district shall keep a full and separate

itemized account with each of the different classes of its school

funds coming into the treasurer's hands. The treasurer's records

of the district's itemized accounts and records shall be made

available to audit.

(d) A copy of the annual audit report, approved by the board of

trustees, shall be filed by the district with the agency not

later than the 150th day after the end of the fiscal year for

which the audit was made. If the board of trustees declines or

refuses to approve its auditor's report, it shall nevertheless

file with the agency a copy of the audit report with its

statement detailing reasons for failure to approve the report.

(e) The audit reports shall be reviewed by the agency, and the

commissioner shall notify the board of trustees of objections,

violations of sound accounting practices or law and regulation

requirements, or of recommendations concerning the audit reports

that the commissioner wants to make. If the audit report reflects

that penal laws have been violated, the commissioner shall notify

the appropriate county or district attorney and the attorney

general. The commissioner shall have access to all vouchers,

receipts, district fiscal and financial records, and other school

records as the commissioner considers necessary and appropriate

for the review, analysis, and passing on audit reports.

Added by Acts 1995, 74th Leg., ch. 260, Sec. 1, eff. May 30,

1995. Amended by Acts 2001, 77th Leg., ch. 914, Sec. 2, eff.

Sept. 1, 2001.

Sec. 44.009. FINANCIAL REPORTS TO COMMISSIONER OR AGENCY; FORMS.

(a) All financial reports made by or for school districts or by

their officers, agents, or employees, to the commissioner or to

the agency, shall be made on forms prescribed by the agency,

subject to review and comment by the state auditor.

(b) The agency shall combine as many forms as possible to avoid

multiplicity of reports. The forms shall provide for entry of all

information required by law or by the commissioner and

information considered necessary by the state auditor.

Added by Acts 1995, 74th Leg., ch. 260, Sec. 1, eff. May 30,

1995.

Sec. 44.010. REVIEW BY AGENCY. The budgets, fiscal reports, and

audit reports filed with the agency shall be reviewed and

analyzed by the staff of the agency to determine whether all

legal requirements have been met and to collect fiscal data

needed in preparing school fiscal reports for the governor and

the legislature.

Added by Acts 1995, 74th Leg., ch. 260, Sec. 1, eff. May 30,

1995.

SUBCHAPTER B. PURCHASES; CONTRACTS

Sec. 44.031. PURCHASING CONTRACTS. (a) Except as provided by

this subchapter, all school district contracts, except contracts

for the purchase of produce or vehicle fuel, valued at $50,000 or

more in the aggregate for each 12-month period shall be made by

the method, of the following methods, that provides the best

value for the district:

(1) competitive bidding;

(2) competitive sealed proposals;

(3) a request for proposals, for services other than

construction services;

(4) an interlocal contract;

(5) a design/build contract;

(6) a contract to construct, rehabilitate, alter, or repair

facilities that involves using a construction manager;

(7) a job order contract for the minor construction, repair,

rehabilitation, or alteration of a facility;

(8) the reverse auction procedure as defined by Section

2155.062(d), Government Code; or

(9) the formation of a political subdivision corporation under

Section 304.001, Local Government Code.

(b) Except as provided by this subchapter, in determining to

whom to award a contract, the district shall consider:

(1) the purchase price;

(2) the reputation of the vendor and of the vendor's goods or

services;

(3) the quality of the vendor's goods or services;

(4) the extent to which the goods or services meet the

district's needs;

(5) the vendor's past relationship with the district;

(6) the impact on the ability of the district to comply with

laws and rules relating to historically underutilized businesses;

(7) the total long-term cost to the district to acquire the

vendor's goods or services; and

(8) any other relevant factor specifically listed in the request

for bids or proposals.

(b-1) In awarding a contract by competitive sealed bid under

this section, a school district that has its central

administrative office located in a municipality with a population

of less than 250,000 may consider a bidder's principal place of

business in the manner provided by Section 271.9051, Local

Government Code. This subsection does not apply to the purchase

of telecommunications services or information services, as those

terms are defined by 47 U.S.C. Section 153.

(c) The state auditor may audit purchases of goods or services

by the district.

(d) The board of trustees of the district may adopt rules and

procedures for the acquisition of goods or services.

(e) To the extent of any conflict, this subchapter prevails over

any other law relating to the purchasing of goods and services

except a law relating to contracting with historically

underutilized businesses.

(f) This section does not apply to a contract for professional

services rendered, including services of an architect, attorney,

or fiscal agent. A school district may, at its option, contract

for professional services rendered by a financial consultant or a

technology consultant in the manner provided by Section 2254.003,

Government Code, in lieu of the methods provided by this section.

(g) Notice of the time by when and place where the bids or

proposals, or the responses to a request for qualifications, will

be received and opened shall be published in the county in which

the district's central administrative office is located, once a

week for at least two weeks before the deadline for receiving

bids, proposals, or responses to a request for qualifications. If

there is not a newspaper in that county, the advertising shall be

published in a newspaper in the county nearest the county seat of

the county in which the district's central administrative office

is located. In a two-step procurement process, the time and place

where the second-step bids, proposals, or responses will be

received are not required to be published separately.

Text of subsec. (h) as amended by Acts 1999, 76th Leg., ch. 922,

Sec. 1

(h) If school equipment, a school facility, or a portion of a

school facility is destroyed, severely damaged, or experiences a

major unforeseen operational or structural failure, and the board

of trustees determines that the delay posed by the contract

methods required by this section would prevent or substantially

impair the conduct of classes or other essential school

activities, then contracts for the replacement or repair of the

equipment, school facility, or portion of the school facility may

be made by a method other than the methods required by this

section.

Text of subsec. (h) as amended by Acts 1999, 76th Leg., ch. 1225,

Sec. 1

(h) If school equipment or a part of a school facility or

personal property is destroyed or severely damaged or, as a

result of an unforeseen catastrophe or emergency, undergoes major

operational or structural failure, and the board of trustees

determines that the delay posed by the methods provided for in

this section would prevent or substantially impair the conduct of

classes or other essential school activities, then contracts for

the replacement or repair of the equipment or the part of the

school facility may be made by methods other than those required

by this section.

(i) A school district may acquire computers and computer-related

equipment, including computer software, through the Department of

Information Resources under contracts entered into in accordance

with Chapter 2054 or 2157, Government Code. Before issuing an

invitation for bids, the department shall consult with the agency

concerning the computer and computer-related equipment needs of

school districts. To the extent possible the resulting contract

shall provide for such needs.

(j) Without complying with Subsection (a), a school district may

purchase an item that is available from only one source,

including:

(1) an item for which competition is precluded because of the

existence of a patent, copyright, secret process, or monopoly;

(2) a film, manuscript, or book;

(3) a utility service, including electricity, gas, or water; and

(4) a captive replacement part or component for equipment.

(k) The exceptions provided by Subsection (j) do not apply to

mainframe data-processing equipment and peripheral attachments

with a single-item purchase price in excess of $15,000.

(l) Each contract proposed to be made by a school district for

the purchase or lease of one or more school buses, including a

lease with an option to purchase, must be submitted to

competitive bidding when the contract is valued at $20,000 or

more.

(m) If a purchase is made at the campus level in a school

district with a student enrollment of 180,000 or more that has

formally adopted a site-based decision-making plan under

Subchapter F, Chapter 11, that delegates purchasing decisions to

the campus level, this section applies only to the campus and

does not require the district to aggregate and jointly award

purchasing contracts. A district that adopts site-based

purchasing under this subsection shall adopt a policy to ensure

that campus purchases achieve the best value to the district and

are not intended or used to avoid the requirement that a district

aggregate purchases under Subsection (a).

Added by Acts 1995, 74th Leg., ch. 260, Sec. 1, eff. May 30,

1995. Amended by Acts 1997, 75th Leg., ch. 1179, Sec. 1, eff.

Sept. 1, 1997; Acts 1999, 76th Leg., ch. 881, Sec. 1, eff. June

18, 1999; Acts 1999, 76th Leg., ch. 922, Sec. 1, eff. June 18,

1999; Acts 1999, 76th Leg., ch. 1225, Sec. 1, eff. Sept. 1, 1999;

Acts 2001, 77th Leg., ch. 436, Sec. 7, eff. May 28, 2001; Acts

2001, 77th Leg., ch. 1409, Sec. 9, eff. Sept. 1, 2001; Acts 2003,

78th Leg., ch. 201, Sec. 38, eff. Sept. 1, 2003; Acts 2003, 78th

Leg., ch. 680, Sec. 1, eff. June 20, 2003.

Amended by:

Acts 2005, 79th Leg., Ch.

1205, Sec. 2, eff. September 1, 2005.

Acts 2007, 80th Leg., R.S., Ch.

325, Sec. 1, eff. June 15, 2007.

Acts 2007, 80th Leg., R.S., Ch.

449, Sec. 4, eff. June 16, 2007.

Acts 2007, 80th Leg., R.S., Ch.

937, Sec. 2.02, eff. September 1, 2007.

Acts 2007, 80th Leg., R.S., Ch.

1081, Sec. 1, eff. September 1, 2007.

Acts 2009, 81st Leg., R.S., Ch.

1266, Sec. 1, eff. June 19, 2009.

Sec. 44.0311. APPLICABILITY TO JUNIOR COLLEGE DISTRICTS. (a)

Except as provided by Subsection (c), this subchapter applies to

junior college districts.

(b) For purposes of this subchapter, "board of trustees"

includes the governing board of a junior college district.

(c) This subchapter does not apply to a purchase, acquisition,

or license of library goods and services for a library operated

as a part of a junior college district. In this subsection,

"library goods and services" has the meaning assigned by Section

130.0101(a).

Added by Acts 1999, 76th Leg., ch. 1225, Sec. 2, eff. Sept. 1,

1999.

Amended by:

Acts 2009, 81st Leg., R.S., Ch.

336, Sec. 1, eff. June 19, 2009.

Sec. 44.0312. DELEGATION. (a) The board of trustees of the

district may, as appropriate, delegate its authority under this

subchapter regarding an action authorized or required by this

subchapter to be taken by a school district to a designated

person, representative, or committee. In procuring construction

services, the district shall provide notice of the delegation and

the limits of the delegation in the request for bids, proposals,

or qualifications or in an addendum to the request. If the

district fails to provide that notice, a ranking, selection, or

evaluation of bids, proposals, or qualifications for construction

services other than by the board of trustees in an open public

meeting is advisory only.

(b) The board may not delegate the authority to act regarding an

action authorized or required by this subchapter to be taken by

the board of trustees of a school district.

(c) Notwithstanding any other provision of this code, in the

event of a catastrophe, emergency, or natural disaster affecting

a school district, the board of trustees of the district may

delegate to the superintendent or designated person the authority

to contract for the replacement, construction, or repair of

school equipment or facilities under this subchapter if emergency

replacement, construction, or repair is necessary for the health

and safety of district students and staff.

Added by Acts 1999, 76th Leg., ch. 1225, Sec. 2, eff. Sept. 1,

1999.

Amended by:

Acts 2009, 81st Leg., R.S., Ch.

1006, Sec. 6, eff. June 19, 2009.

Sec. 44.0313. PROCEDURES FOR ELECTRONIC BIDS OR PROPOSALS. (a)

A school district may receive bids or proposals under this

chapter through electronic transmission if the board of trustees

of the school district adopts rules to ensure the identification,

security, and confidentiality of electronic bids or proposals and

to ensure that the electronic bids or proposals remain

effectively unopened until the proper time.

(b) Notwithstanding any other provision of this chapter, an

electronic bid or proposal is not required to be sealed. A

provision of this chapter that applies to a sealed bid or

proposal applies to a bid or proposal received through electronic

transmission in accordance with the rules adopted under

Subsection (a).

Added by Acts 2009, 81st Leg., R.S., Ch.

1266, Sec. 2, eff. June 19, 2009.

Sec. 44.0315. DEFINITIONS. In this subchapter:

(1) "Architect" means an individual registered as an architect

under Chapter 1051, Occupations Code.

(2) "Contractor" in the context of a contract for the

construction, rehabilitation, alteration, or repair of a facility

means a sole proprietorship, partnership, corporation, or other

legal entity that assumes the risk for constructing,

rehabilitating, altering, or repairing all or part of the

facility at the contracted price.

(3) "Engineer" means an individual licensed as an engineer under

Chapter 1001, Occupations Code.

(4) "Facility" means real property, including buildings and

associated structures and improved or unimproved land. The term

does not include:

(A) highways, roads, streets, bridges, utilities, water supply

projects, water plants, wastewater plants, water and wastewater

distribution or conveyance facilities, wharves, docks, airport

runways and taxiways, drainage projects, or related types of

projects associated with civil engineering construction; or

(B) buildings or structures that are incidental to projects that

are primarily civil engineering construction projects.

(5) "Fee" in the context of a contract for the construction,

rehabilitation, alteration, or repair of a facility means the

payment a construction manager receives for its overhead and

profit in performing its services.

(6) "General conditions" in the context of a contract for the

construction, rehabilitation, alteration, or repair of a facility

means on-site management, administrative personnel, insurance,

bonds, equipment, utilities, and incidental work, including minor

field labor and materials.

Added by Acts 1997, 75th Leg., ch. 1179, Sec. 2, eff. Sept. 1,

1997. Amended by Acts 2001, 77th Leg., ch. 1409, Sec. 10, eff.

Sept. 1, 2001; Acts 2003, 78th Leg., ch. 1276, Sec. 14A.756, eff.

Sept. 1, 2003.

Sec. 44.032. ENFORCEMENT OF PURCHASE PROCEDURES: CRIMINAL

PENALTIES; REMOVAL; INELIGIBILITY. (a) In this section:

(1) "Component purchases" means purchases of the component parts

of an item that in normal purchasing practices would be purchased

in one purchase.

(2) "Separate purchases" means purchases, made separately, of

items that in normal purchasing practices would be purchased in

one purchase.

(3) "Sequential purchases" means purchases, made over a period,

of items that in normal purchasing practices would be purchased

in one purchase.

(b) An officer, employee, or agent of a school district commits

an offense if the person with criminal negligence makes or

authorizes separate, sequential, or component purchases to avoid

the requirements of Section 44.031(a) or (b). An offense under

this subsection is a Class B misdemeanor and is an offense

involving moral turpitude.

(c) An officer, employee, or agent of a school district commits

an offense if the person with criminal negligence violates

Section 44.031(a) or (b) other than by conduct described by

Subsection (b). An offense under this subsection is a Class B

misdemeanor and is an offense involving moral turpitude.

(d) An officer or employee of a school district commits an

offense if the officer or employee knowingly violates Section

44.031, other than by conduct described by Subsection (b) or (c).

An offense under this subsection is a Class C misdemeanor.

(e) The final conviction of a person other than a trustee of a

school district for an offense under Subsection (b) or (c)

results in the immediate removal from office or employment of

that person. A trustee who is convicted of an offense under this

section is considered to have committed official misconduct for

purposes of Chapter 87, Local Government Code, and is subject to

removal as provided by that chapter and Section 24, Article V,

Texas Constitution. For four years after the date of the final

conviction, the removed person is ineligible to be a candidate

for or to be appointed or elected to a public office in this

state, is ineligible to be employed by or act as an agent for the

state or a political subdivision of the state, and is ineligible

to receive any compensation through a contract with the state or

a political subdivision of the state. This subsection does not

prohibit the payment of retirement benefits to the removed person

or the payment of workers' compensation benefits to the removed

person for an injury that occurred before the commission of the

offense for which the person was removed. This subsection does

not make a person ineligible for an office for which the federal

or state constitution prescribes exclusive eligibility

requirements.

(f) A court may enjoin performance of a contract made in

violation of this subchapter. A county attorney, a district

attorney, a criminal district attorney, a citizen of the county

in which the school district is located, or any interested party

may bring an action for an injunction. A party who prevails in an

action brought under this subsection is entitled to reasonable

attorney's fees as approved by the court.

Added by Acts 1995, 74th Leg., ch. 260, Sec. 1, eff. May 30,

1995. Amended by Acts 1999, 76th Leg., ch. 1225, Sec. 3, eff.

Sept. 1, 1999.

Sec. 44.0331. MANAGEMENT FEES UNDER CERTAIN COOPERATIVE

PURCHASING CONTRACTS. (a) A school district that enters into a

purchasing contract valued at $25,000 or more under Section

44.031(a)(5), under Subchapter F, Chapter 271, Local Government

Code, or under any other cooperative purchasing program

authorized for school districts by law shall document any

contract-related fee, including any management fee, and the

purpose of each fee under the contract.

(b) The amount, purpose, and disposition of any fee described by

Subsection (a) must be presented in a written report and

submitted annually in an open meeting of the board of trustees of

the school district. The written report must appear as an agenda

item.

(c) The commissioner may audit the written report described by

Subsection (b).

Added by Acts 2007, 80th Leg., R.S., Ch.

449, Sec. 5, eff. June 16, 2007.

Sec. 44.034. NOTIFICATION OF CRIMINAL HISTORY OF CONTRACTOR.

(a) A person or business entity that enters into a contract with

a school district must give advance notice to the district if the

person or an owner or operator of the business entity has been

convicted of a felony. The notice must include a general

description of the conduct resulting in the conviction of a

felony.

(b) A school district may terminate a contract with a person or

business entity if the district determines that the person or

business entity failed to give notice as required by Subsection

(a) or misrepresented the conduct resulting in the conviction.

The district must compensate the person or business entity for

services performed before the termination of the contract.

(c) This section does not apply to a publicly held corporation.

Added by Acts 1995, 74th Leg., ch. 260, Sec. 1, eff. May 30,

1995.

Sec. 44.035. EVALUATION OF BIDS AND PROPOSALS FOR CONSTRUCTION

SERVICES. (a) The board of trustees of a school district that

is considering a construction contract using a method specified

by Section 44.031(a) must, before advertising, determine which

method provides the best value for the district.

(b) The district shall base its selection among offerors on

criteria authorized to be used under Section 44.031(b). The

district shall publish in the request for bids, proposals, or

qualifications the criteria that will be used to evaluate the

offerors and the relative weights given to the criteria.

(c) The district shall document the basis of its selection and

shall make the evaluations public not later than the seventh day

after the date the contract is awarded.

Added by Acts 1997, 75th Leg., ch. 1179, Sec. 2, eff. Sept. 1,

1997. Amended by Acts 1999, 76th Leg., ch. 1225, Sec. 4, eff.

Sept. 1, 1999; Acts 2001, 77th Leg., ch. 1409, Sec. 11, eff.

Sept. 1, 2001.

Sec. 44.036. DESIGN-BUILD CONTRACTS FOR FACILITIES. (a) In

this section:

(1) "Design-build contract" means a single contract with a

design-build firm for the design and construction of a facility.

(2) "Design-build firm" means a partnership, corporation, or

other legal entity or team that includes an engineer or architect

and builder qualified to engage in building construction in

Texas.

(3) "Design criteria package" means a set of documents that

provides sufficient information to permit a design-build firm to

prepare a response to a school district's request for

qualifications and any additional information requested,

including criteria for selection. The design criteria package

must specify criteria the district considers necessary to

describe the project and may include, as appropriate, the legal

description of the site, survey information concerning the site,

interior space requirements, special material requirements,

material quality standards, conceptual criteria for the project,

special equipment requirements, cost or budget estimates, time

schedules, quality assurance and quality control requirements,

site development requirements, applicable codes and ordinances,

provisions for utilities, parking requirements, or any other

requirement, as applicable.

(b) A school district may use the design-build method for the

construction, rehabilitation, alteration, or repair of a

facility. In using that method and in entering into a contract

for the services of a design-build firm, the contracting school

district and the design-build firm shall follow the procedures

provided by Subsections (c)-(j).

(c) The district shall designate an engineer or architect

independent of the design-build firm to act as its representative

for the duration of the work on the facility. If the district's

engineer or architect is not a full-time employee of the

district, any engineer or architect designated shall be selected

on the basis of demonstrated competence and qualifications in

accordance with Section 2254.004, Government Code.

(d) The district shall prepare a request for qualifications that

includes general information on the project site, project scope,

budget, special systems, selection criteria, and other

information that may assist potential design-build firms in

submitting proposals for the project. The district shall also

prepare the design criteria package that includes more detailed

information on the project. If the preparation of the design

criteria package requires engineering or architectural services

that constitute the practice of engineering within the meaning of

Chapter 1001, Occupations Code, or the practice of architecture

within the meaning of Chapter 1051, Occupations Code, those

services shall be provided in accordance with the applicable law.

(e) The district shall evaluate statements of qualifications and

select a design-build firm in two phases:

(1) In phase one, the district shall prepare a request for

qualifications and evaluate each offeror's experience, technical

competence, and capability to perform, the past performance of

the offeror's team and members of the team, and other appropriate

factors submitted by the team or firm in response to the request

for qualifications, except that cost-related or price-related

evaluation factors are not permitted. Each offeror must certify

to the district that each engineer or architect that is a member

of its team was selected based on demonstrated competence and

qualifications, in the manner provided by Section 2254.004,

Government Code. The district shall qualify a maximum of five

offerors to submit additional information and, if the district

chooses, to interview for final selection.

(2) In phase two, the district shall evaluate the information

submitted by the offerors on the basis of the selection criteria

stated in the request for qualifications and the results of any

interview. The district may request additional information

regarding demonstrated competence and qualifications,

considerations of the safety and long-term durability of the

project, the feasibility of implementing the project as proposed,

the ability of the offeror to meet schedules, costing

methodology, or other factors as appropriate. The district may

not require offerors to submit detailed engineering or

architectural designs as part of the proposal. The district shall

rank each proposal submitted on the basis of the criteria set

forth in the request for qualifications. The district shall

select the design-build firm that submits the proposal offering

the best value for the district on the basis of the published

selection criteria and on its ranking evaluations. The district

shall first attempt to negotiate with the selected offeror a

contract. If the district is unable to negotiate a satisfactory

contract with the selected offeror, the district shall, formally

and in writing, end negotiations with that offeror and proceed to

negotiate with the next offeror in the order of the selection

ranking until a contract is reached or negotiations with all

ranked offerors end.

(f) Following selection of a design-build firm under Subsection

(e), that firm's engineers or architects shall complete the

design, submitting all design elements for review and

determination of scope compliance to the district or district's

engineer or architect before or concurrently with construction.

(g) An engineer shall have responsibility for compliance with

the engineering design requirements and all other applicable

requirements of Chapter 1001, Occupations Code. An architect

shall have responsibility for compliance with the requirements of

Chapter 1051, Occupations Code.

(h) The district shall provide or contract for, independently of

the design-build firm, the inspection services, the testing of

construction materials engineering, and the verification testing

services necessary for acceptance of the facility by the

district. The district shall select those services for which it

contracts in accordance with Section 2254.004, Government Code.

(i) The design-build firm shall supply a signed and sealed set

of construction documents for the project to the district at the

conclusion of construction.

(j) A payment or performance bond is not required for, and may

not provide coverage for, the portion of a design-build contract

under this section that includes design services only. If a fixed

contract amount or guaranteed maximum price has not been

determined at the time a design-build contract is awarded, the

penal sums of the performance and payment bonds delivered to the

district must each be in an amount equal to the project budget,

as specified in the design criteria package. The design-build

firm shall deliver the bonds not later than the 10th day after

the date the design-build firm executes the contract unless the

design-build firm furnishes a bid bond or other financial

security acceptable to the district to ensure that the

design-build firm will furnish the required performance and

payment bonds when a guaranteed maximum price is established.

Added by Acts 1997, 75th Leg., ch. 1179, Sec. 2, eff. Sept. 1,

1997. Amended by Acts 1999, 76th Leg., ch. 1225, Sec. 5, 6, eff.

Sept. 1, 1999; Acts 2001, 77th Leg., ch. 1409, Sec. 12, eff.

Sept. 1, 2001; Acts 2003, 78th Leg., ch. 1276, Sec. 14A.757, eff.

Sept. 1, 2003.

Sec. 44.037. CONTRACTS FOR FACILITIES: CONSTRUCTION

MANAGER-AGENT. (a) A school district may use the construction

manager-agent method for the construction, rehabilitation,

alteration, or repair of a facility. In using that method and in

entering into a contract for the services of a construction

manager-agent, a district shall follow the procedures prescribed

by this section.

(b) A construction manager-agent is a sole proprietorship,

partnership, corporation, or other legal entity that provides

consultation to the school district regarding construction,

rehabilitation, alteration, or repair of the facility. A district

using the construction manager-agent method may, under the

contract between the district and the construction manager-agent,

require the construction manager-agent to provide administrative

personnel, equipment necessary to perform duties under this

section, and on-site management and other services specified in

the contract. A construction manager-agent represents the

district in a fiduciary capacity.

(c) Before or concurrently with selecting a construction

manager-agent, the district shall select or designate an engineer

or architect who shall prepare the construction documents for the

project and who has full responsibility for complying with

Chapter 1001 or 1051, Occupations Code, as applicable. If the

engineer or architect is not a full-time employee of the

district, the district shall select the engineer or architect on

the basis of demonstrated competence and qualifications as

provided by Section 2254.004, Government Code. The district's

engineer or architect may not serve, alone or in combination with

another person, as the construction manager-agent unless the

engineer or architect is hired to serve as the construction

manager-agent under a separate or concurrent procurement

conducted in accordance with this subchapter. This subsection

does not prohibit the district's engineer or architect from

providing customary construction phase services under the

engineer's or architect's original professional service agreement

in accordance with applicable licensing laws.

(d) A district shall select a construction manager-agent on the

basis of demonstrated competence and qualifications in the same

manner as provided for the selection of engineers or architects

under Section 2254.004, Government Code.

(e) A district using the construction manager-agent method shall

procure, in accordance with applicable law and in any manner

authorized by this chapter, a general contractor, trade

contractors, or subcontractors who will serve as the prime

contractor for their specific portion of the work.

(f) The district or the construction manager-agent shall procure

in accordance with Section 2254.004, Government Code, all of the

testing of construction materials engineering, the inspection

services, and the verification testing services necessary for

acceptance of the facility by the district.

Added by Acts 1997, 75th Leg., ch. 1179, Sec. 2, eff. Sept. 1,

1997. Amended by Acts 1999, 76th Leg., ch. 1225, Sec. 7, eff.

Sept. 1, 1999; Acts 2003, 78th Leg., ch. 1276, Sec. 14A.758, eff.

Sept. 1, 2003.

Sec. 44.038. CONTRACTS FOR FACILITIES: CONSTRUCTION

MANAGER-AT-RISK. (a) A school district may use the construction

manager-at-risk method for the construction, rehabilitation,

alteration, or repair of a facility. In using that method and in

entering into a contract for the services of a construction

manager-at-risk, a district shall follow the procedures

prescribed by this section.

(b) A construction manager-at-risk is a sole proprietorship,

partnership, corporation, or other legal entity that assumes the

risk for construction, rehabilitation, alteration, or repair of a

facility at the contracted price as a general contractor and

provides consultation to the school district regarding

construction during and after the design of the facility.

(c) Before or concurrently with selecting a construction

manager-at-risk, the district shall select or designate an

engineer or architect who shall prepare the construction

documents for the project and who has full responsibility for

complying with Chapter 1001 or 1051, Occupations Code, as

applicable. If the engineer or architect is not a full-time

employee of the district, the district shall select the engineer

or architect on the basis of demonstrated competence and

qualifications as provided by Section 2254.004, Government Code.

The district's engineer, architect, or construction manager-agent

for a project may not serve, alone or in combination with

another, as the construction manager-at-risk unless the engineer

or architect is hired to serve as the construction

manager-at-risk under a separate or concurrent procurement

conducted in accordance with this subchapter. This subsection

does not prohibit the district's engineer or architect from

providing customary construction phase services under the

engineer's or architect's original professional service agreement

in accordance with applicable licensing laws.

(d) The district shall provide or contract for, independently of

the construction manager-at-risk, the inspection services, the

testing of construction materials engineering, and the

verification testing services necessary for acceptance of the

facility by the district. The district shall select those

services for which it contracts in accordance with Section

2254.004, Government Code.

(e) The district shall select the construction manager-at-risk

in either a one-step or two-step process. The district shall

prepare a request for proposals, in the case of a one-step

process, or a request for qualifications, in the case of a

two-step process, that includes general information on the

project site, project scope, schedule, selection criteria,

estimated budget, and the time and place for receipt of proposals

or qualifications, as applicable, a statement as to whether the

selection process is a one-step or two-step process, and other

information that may assist the district in its selection of a

construction manager-at-risk. The district shall state the

selection criteria in the request for proposals or

qualifications, as applicable. The selection criteria may include

the offeror's experience, past performance, safety record,

proposed personnel and methodology, and other appropriate factors

that demonstrate the capability of the construction

manager-at-risk. If a one-step process is used, the district may

request, as part of the offeror's proposal, proposed fees and

prices for fulfilling the general conditions. If a two-step

process is used, the district may not request fees or prices in

step one. In step two, the district may request that five or

fewer offerors, selected solely on the basis of qualifications,

provide additional information, including the construction

manager-at-risk's proposed fee and its price for fulfilling the

general conditions.

(f) At each step, the district shall receive, publicly open, and

read aloud the names of the offerors. At the appropriate step,

the district shall also read aloud the fees and prices, if any,

stated in each proposal as the proposal is opened. Within 45 days

after the date of opening the proposals, the district shall

evaluate and rank each proposal submitted in relation to the

criteria set forth in the request for proposals.

(g) The district shall select the offeror that submits the

proposal that offers the best value for the district based on the

published selection criteria and on its ranking evaluation. The

district shall first attempt to negotiate with the selected

offeror a contract. If the district is unable to negotiate a

satisfactory contract with the selected offeror, the district

shall, formally and in writing, end negotiations with that

offeror and proceed to negotiate with the next offeror in the

order of the selection ranking until a contract is reached or

negotiations with all ranked offerors end.

(h) A construction manager-at-risk shall publicly advertise, in

accordance with Section 44.031(g), and receive bids or proposals

from trade contractors or subcontractors for the performance of

all major elements of the work other than the minor work that may

be included in the general conditions. A construction

manager-at-risk may seek to perform portions of the work itself

if the construction manager-at-risk submits its bid or proposal

for those portions of the work in the same manner as all other

trade contractors or subcontractors and if the district

determines that the construction manager-at-risk's bid or

proposal provides the best value for the district.

(i) The construction manager-at-risk and the district or its

representative shall review all trade contractor or subcontractor

bids or proposals in a manner that does not disclose the contents

of the bid or proposal during the selection process to a person

not employed by the construction manager-at-risk, engineer,

architect, or district. All bids or proposals shall be made

public after the award of the contract or within seven days after

the date of final selection of bids or proposals, whichever is

later.

(j) If the construction manager-at-risk reviews, evaluates, and

recommends to the district a bid or proposal from a trade

contractor or subcontractor but the district requires another bid

or proposal to be accepted, the district shall compensate the

construction manager-at-risk by a change in price, time, or

guaranteed maximum cost for any additional cost and risk that the

construction manager-at-risk may incur because of the district's

requirement that another bid or proposal be accepted.

(k) If a selected trade contractor or subcontractor defaults in

the performance of its work or fails to execute a subcontract

after being selected in accordance with this section, the

construction manager-at-risk may, without advertising, itself

fulfill the contract requirements or select a replacement trade

contractor or subcontractor to fulfill the contract requirements.

(l) If a fixed contract amount or guaranteed maximum price has

not been determined at the time the contract is awarded, the

penal sums of the performance and payment bonds delivered to the

district must each be in an amount equal to the project budget,

as specified in the request for qualifications. The construction

manager shall deliver the bon