|Form CIS for Employees - Online Conflict of Interest Disclosure Form CIQ for Vendors - Conflict of Interest Questionaire Submitted CIS Forms (Employees) Submitted CIQ Forms (Vendors)||
Chapter 176 of the Texas Local Government Code
Disclosure of Certain Relationships with Local Government Officers; Providing Public Access to Certain Information
Chapter 176 of the Texas Local Government Code was approved by the Legislature and it is effective January 2006. In an effort to comply with this law, the District provides annual training to the Board of Trustees, the Superintendent and its employees that are involved in the monitoring and approval of contracts with vendors.
On May 23, 2005, the Texas Senate passed House Bill No. 914, adding Chapter 176 to the Local Government Code, and imposing new disclosure and reporting obligations on vendors and potential vendors to local government entities beginning on January 1, 2006. This includes School Districts.
Failure to abide by these new statutory requirements can result in possible criminal penalties.
Austin Independent School District is requiring you to complete the CONFLICT OF INTEREST QUESTIONNAIRE (FORM CIQ) for vendors or online CONFLICT OF INTEREST DISCLOSURE (FORM CIS) for selected employees prepared by the Texas Ethics Commission, at the direction of the legislature and strongly recommends you become familiar with House Bill 914.
The following has been provided by the Texas Association of School Boards
Q: What is HB 914?
A: Adopted by the 79th Legislature, House Bill 914 (HB 914) added chapter 176 to the Texas Local Government Code. HB 914 requires the disclosure of certain conflicts of interest by local government officers and by vendors who sell goods or services to local government entities.
Q: What does HB 914 require from local government officers?
A: HB 914 requires “local government officers” (LGOs) to complete forms disclosing their relationships with actual or potential vendors. In a school district, LGOs must file these forms with the district’s superintendent.
Q: What is a “local government officer”?
A: An LGO is a member of the governing body of a local government entity (LGE). An LGO is also a director, superintendent, administrator, president, or other person designated as the executive officer of the LGE. For school districts, “local government officers” are board members and superintendents.
Q: What are the forms called and where can we find them?
A: The form for LGOs is a conflicts disclosure statement, or “CIS.” The form for vendors is a “questionnaire,” or “CIQ.” The Texas Ethics Commission was charged with developing these forms. The forms are posted at www.ethics.state.tx.us/whatsnew/conflict_forms.htm.
Q: When do LGOs have to file CIS forms?
A: An LGO must file a CIS regarding a specific vendor if the LGO has an employment or business relationship with the vendor and the district has contracted with the vendor or is considering doing business with the vendor. The form must be filed within seven days of the date the LGO becomes aware of facts requiring disclosure.
Q: What relationships must be disclosed?
A: An LGO must disclose a relationship with a vendor if the officer or a member of his family (see below) receives taxable income because of an employment or business relationship with the vendor. An LGO must also disclose gifts offered to the LGO or his family members by a vendor within the past 12 months if the value of the gifts was $250 or more.
Q: What family relationships are covered?
A: For purposes of the disclosure requirements, family relationships include first-degree relatives, both by consanguinity (blood) and by affinity (marriage). This includes the LGO’s parents, children, spouse, the spouses of the LGO’s parents and children, and the parents and children of the LGO’s spouse. See DBE(EXHIBIT).
Q: When does an LGO have to disclose gifts?
A: An LGO must disclose a vendor’s offer of gifts worth $250 or more. The CIS form requires an LGO to disclose an offer of a gift even if the officer refused the gift. However, an LGO does not have to disclose food, lodging, transportation, or entertainment accepted as a guest, even if the value exceeded $250.
Q: Does the LGO still have to file the “substantial interest” affidavit under Texas Local Government Code chapter 171?
A: Yes. These are separate and independent requirements. Thus, an LGO who has a substantial interest in a transaction involving the district may need to complete both the CIS and the substantial interest affidavit. See BBFA(LEGAL).
Q: What if I or a family member has an interest-bearing savings account at the district’s depository bank?
A: Under a conservative reading of the statute, an LGO must disclose that he or a family member receives taxable income from the district’s bank, even if the LGO or family member receives only $.01 of interest income each year. The statute refers to “taxable income” and does not contain a threshold dollar amount. Recently, state representatives Beverly Woolley and John Smithee submitted a request to the attorney general for clarification of several issues, including this one.
Q: What if an LGO owns a business that is entering into a contract with the district?
A: An LGO who owns a business that contracts with the district must file a CIS, in his capacity as a board member or superintendent, and a CIQ, in his capacity as a vendor.
Q: What if the LGO or vendor has nothing to disclose?
A: The statute does not require an LGO to file a CIS if he has nothing to disclose. Unfortunately, however, the statute does not clarify whether vendors with nothing to disclose have to file CIQ with school districts. This is one of the many questions asked in the pending Attorney General request. Until further clarification, vendors may submit “blank” CIQs out of an abundance of caution.
Q: Does HB 914 apply to employees of the district?
A: The only employee to whom the statute directly applies is the superintendent. A board of trustees may extend the disclosure requirements, subject to criminal penalties, to all or a group of district employees. Because of the additional administrative burden this may create, TASB Legal Services recommends that a board consult with its school attorney before extending these requirements to additional employees.
Q: Does an LGO have to file a CIS if one of the LGO’s relatives is employed by the district?
A: No. HB 914 does not apply when a district employs a relative of an LGO as a district employee. Such relationships continue to be regulated by the nepotism laws. See BBFB(LEGAL).
Q: What is the penalty for a violation?
A: There is a criminal penalty for failing to file a required disclosure statement. Knowing failure to file the conflicts disclosure statement is a Class C misdemeanor. It is a defense to prosecution if the officer files the statement within seven business days of receiving notice of a violation.
Q: What forms are vendors required to file?
A: An individual or business entity that contracts or seeks to contract for the sale or purchase of property, goods, or services with a district must file a CIQ. This includes individuals and entities that seek to purchase goods and services from school districts, as well as those who seek to sell goods and services to school districts. An “agent” of a vendor in the vendor’s business with the district must also file a CIQ.
Q: When and where must a vendor file the CIQ?
A: The CIQ must be filed with the superintendent within seven days of beginning contract negotiations, or submitting an application, bid, response to a request for proposal, correspondence, or other writing related to a potential agreement with a district. The forms must be updated annually.
Q: What should the superintendent do with the forms he receives?
A: The district has a responsibility to make public the information received under this statute. The superintendent must post CIS forms received from LGOs and CIQ forms received from vendors on the district’s internet Web site. The superintendent is also responsible for maintaining a list of LGOs at the district and making that list available to the public.
Q: What is the district’s obligation to notify vendors of this requirement?
A: The statute does not require school districts or other LGEs to inform vendors of the disclosure requirements, nor does the statute impose a penalty on districts for doing business with vendors who fail to file CIQs. However, the vendors face criminal liability. TASB Legal Services recommends that districts take reasonable steps to notify vendors of the requirement through bid documents, website postings, and other avenues of communication.
Q: If the district does business with another district or an ESC, does it have to complete a CIQ?
A: No. The State of Texas, a political subdivision of the state, the federal government, and foreign governments are not subject to the disclosure requirements.
Q: Why did TASB send our district a CIQ?
A: In addition to the services and resources TASB provides to school districts as a benefit of membership, TASB provides a number of products and services to school districts and other LGEs for a fee. For this reason, TASB is complying with the new requirements like any other vendor. After the January 1, 2006 effective date of the new requirements, TASB sent school districts and other LGEs its completed CIQ. In many cases, TASB was unable to identify an actual or potential conflict, but TASB submitted a form to ensure compliance. Districts should post the TASB CIQ in the same manner as other CIQs. If you have questions about TASB’s CIQ, contact Mary Ann Briley, TASB Associate Executive Director, Member Services, 800-580-8272, extension 3594.
Q: Where can I get more information?
A: In the October 2005 Texas Lone Star, TASB Legal Services overviewed these new requirements. The requirements of House Bill 914 are also reflected in Update 77 at BBFA(LEGAL) and DBD(LEGAL).
This document is provided for educational purposes only and contains information to facilitate a general understanding of the law. It is not an exhaustive treatment of the law on this subject nor is it intended to substitute for the advice of an attorney. It is important for you to consult with your own attorneys in order to apply these legal principles to specific fact situations.
Chapter 176 of the Texas Local Government Code