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August 20, 1970

Dr. J.W. Edgar Commissioner ofEducation Texas Education Agency Austin, Texas

Dear Dr. Edgar: Opinion No. M-666
Re: Does an Independent School District have authority to contract with private corporations for instructions of itspupils, and related questions.

BY recent letter you have requested an opinion in regard to the above stated matter. We quote, at length, fromyour letter as follows:

"TheDallas Independent School District recognizes the severe problems ineducating the economically deprived minority groups. The District proposes to enter into and operate twomajor research and development projects to develop more effective programs and to alleviate educational deprivation among 1585 inner city pupils ingrades 1, 2and 3and grades 7, 8, 9, 10, 11and 12. The projects will utilize the resources of business and industry through contracts with firms to provide specified instructional and other services, with an incentive-penalty system forpayments. Contractors will,be required to install their instructional systems in approximately 27 regular classrooms, employ and train a corps of Dallas teachers to operate theprograms, andwithin a specified period estimated at one to three years, turn theproven instructional systems back to the School District tobe operated thereafter without assistance of the contractor.

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"Toensure local control of theproject, the Dallas Independent School District Board of Education will hold the contractors accountable for theirperformance andpay thembased on increases inachievement ofpupils. An effective school-operated management system undes the direction of theAssistant Superintendent-Accountability supplemented by contracted services of education auditors, will enable Dallas school administrators tomonitor continuously thework of the instructional contractors so as tomeet the research and development and instructional goals of theproject. Both projects will be supported primarily by federal funds. Oneproject is eligible for support under Public Law 874, Title I, III andV of theElementary and Secondary Education Act and the Vocational Education Act of 1968. "The second project will be supported entirely by funds from 41 USCA 252 (c)(5)and Section 602(n) of the Economic Opportunity Act, 1964, as amended. Contract No, BIC-5141 between the Office of Economic Opportunity and the Dallas Independent School District has been executed by both institutions: , it awaits the recommendations of the Texas Education Aqency and the Governor's apnroval. (Emphasis added.) Project One "Oneproject is entitled 'Guaranteed Student Performance inEducation andTraining.' This project will serve 985 educationally disadvantaged students, grades 9through 12,who are enrolled in the following inner city high schools: Pinkston, Madison, Crozier Technical, Roosevelt, and Lincoln. These students will be selected from among those in each schoolwho areperforming below expectations inmathematics and English and'who have parental approval toparticipate. Instructional programs will be conducted on these five campuses under the direction of thebuilding principals.

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Dr. J.W. Edgar, page 3 (M-666)
Project Two' '"Thesecond project, 'Performance Incentive Remedial Education Experiment', isone of 18that theU. S. Office of Economic Opportunity is sponsoring to determine the effectiveness ofperformance contracting inavariety of educational settings and among various ethnic groups. "By letter of June 5, 1970 theDallas school district has asked thisAgency to cooperate with theplans by its approval of the above described contractual project(s), to provide financial support as set out in 'ProposedFinancial Support for the 'Guaranteed Student Performance in Education andTraining Project',' and todesignate an Agency Task Force towork with theDallas administration to complete the operation of theproject plan, monitor the project, participate in theproject evaluation and disseminate the results.
"In the absence of specific legislation, court ~decisions OrAttorney General rulings relative to the authority of a school district to enter into incentive performance contracts with private concerns or corporations for the educational instruction ofpublic school regular students, on an experimental educational development program basis or otherwise, this Agency aswell as the school district need andwould appreciate an opinion from your office on the following questions of immediate importance: "1. Under current school laws,may a school district (Dallas I.S.D.) enter into incentive performance contract/s ,withprivate concerns or corporation/s for service proposed and under the conditions andpurposes set forth inthe two projects described above--where suchprogram is primarily proposed for a study indepth of the utilization of the capability of theprivate sector as one strategy to facilitate .desirable educational reforms, as distinguished from any general plan ormovement to contract toprivate

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"2
.

"3
.

"4
. corporation/s or firm/s the education of regular public school children?
Has a school district authority to contract with or enter into agreements with an agency of the federal government? Sets. 11.02(e); 21.111(b), T.E.C. Under Section 21.111(b), T.E.C., does a school district have authority to contract or enter into agreements with private concerns, firms or corporations for the instruction of itspublic school children?
Does a school district have authority to expend localmaintenance funds topay part or all of the cost of instruction provided by aprivate concern or firm under contract with the district." Thepertinent provisions of theTexas Education Code are quoted, inpart, as follows:

"Section 11.02. General Powers andDuties "(a)... "(b)... "(c) Except for agreements entered intoby the governing board of a state university or college, the Central Education Agency shall be the sole agency of the State of Texas empowered to enter into agreements with respect to education undertakings....with an agency of the federal government. No county board of education orboard of trustees of a school district shall enter into contracts with, or accept money from, an agency of the federal government, except under rules and regulations prescribed by the Central Education Agency."

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Dr. J.W. Edgar, page 5 ~, (M-666)

"Section 11.30. Aut,horityto Enter Into Contracts 'for &ants
"For themaintenance and improvement of state educational programs and activities in thepublic schools. the State Board of Education mav enter into contracts forgrants fromboth public andprivate organizations andmay expend such funds under the terms and for the specific purposes contracted." "Section 21.111. Vocational and Other Educational Programs "(a)The board of trustees of anypublic free school district of this state, subject to rules and regulations of the Central Education Aqency heretofore andhereafter adopted, ishereby authorized and empowered to conduct and supervise vocational classes and other educational programs for students of all aqes; andwhenever itdeems necessary to expend local maintenance funds forthe cost thereof. "(b)For purposes of conducting.and/or supervision by the district of such vocational classes and other educational programs for students of any and all ages, saidboard of trustees ishereby authorized and empowered topurchase, acquire or lease real orpersonal property: to contract or enter into agreements with any department or agency of theUnited States or this state, subject to rules and regulations prescribed by the .CentralEducation Aqency appertaininq to such educational prosrams: and,to contract or enter into agreementswith any person, partnership, firm or corporation pertaininq -tothe local operation and supervision of suchprograms by the district." (Emphasis added.) Section 11.02, quoted above, requires that any school district have prior approval from the Central Education Agency, based upon rules and regulations from said agency, before entering into agreements with the federal government.

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Section 11.30, quoted above, authorizes the Education Agency to enter contracts with thegovernment to receive money and expend such money under conditions of the contract. SeeAttorney General's Opinion WW-1321 (1962).
In addition, thepurpose of Section 21.111, quoted above, was tomake express provision for vocational and other educational courses for students of all ages, there being a doubt concerning the extent of authority conferred under previous laws. See the Emergency Clause inH.B. 580,Acts 59th Legislature, R.S. 1965, Ch. 184,p. 381. Section 21.111 authorizes the local school districts to operate such programs, to contract with the federal government regarding such programs, and to contract with localprivate concerns forprivate operation and supervision of such programs, subject to the rules and requlations of 'the Central Education Aqency pertaining to such educational programs. In other words, Section 11.02 authorizes the Central EducationAgency, by rule and regulation, torequire the local school districts to obtain itsapproval before entering into agreements with or receiving money from the federal government. Section 21.111, however, makes an exception to such prior approval where "vocational classes and other educational programs for students of all ages" are concerned. Where these programs are concerned, the Central Education Agency cannot withhold approval but may, by rule and regulation, prescribe the method, etc. by which the local school district enters into contracts with the federal government or localprivate concerns for operation and supervision of suchprograms. It isalso the opinion of this office that Section 21.111 must be construed with reference to the entire body of law existing at the time of the statute aswell as inpara materia with any ,statutesdealing with the same subject insofar as the latter are not inconsistent with Section 21.111. 53Tex.Jur2d 278, Statutes, Sec. 185;p. 280, Sec. 186. For example, ifunder prior laws (suchasArticle 2902, V.C.S.) itwas notclear whether local school funds could be used'for the education ofpersons over twenty-one, it isnow clear that Section 21.111 permits

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Dr. J.W. Edgar, page 7 (M-666)

theboard of trustees, subject to rules and regulations of the Central Education Agency, to conduct and supervise vocational classes and other educational programs "for students of all ages." Likewise, incontracting with private concerns under Section 21.111(b) for the instruction ofpublic school children, a school district may not disregard the teaching qualifications and requirements, as required in other statutes of this State andpermit instruction by~persons,who do not meet the statutory standards, such as toage, health, and educational qualifications. No doubt suchmatters will be included inany contract tobe executed.
In light of the above discussion, the answer toyour first question is a qualified "yes". The yes isqualified by a determination by the school district that such aprogram is vocational as defined above, and adetermination by the Central Education Agency that the contracts inquestion are consistent with the statutes of this State and the rules and regulations of the Central Education Agency. The second question isalso'answered by a qualified "yes" as discussed above. Question No. 3 isalso answered by aqualified "yes"as discussed above.
In regard toquestion No. 4, it should suffice tonote that Subsection (a)of Section 21.111 specifically authorizes use of localmaintenance funds for the vocational typeprograms. Consequently, the answer toyour fourth question isalso aqualified "yes", as discussed above. SUMMARY
A school district may enter into a contract with private concerns, pursuant to Section 21.111 of the Texas Education Code, for the operation and supervision ofvocational classes and other educational programs for students of all ages,

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Dr. J.W. Edgar, page 8 (M-666)

as defined, provided such contracts comply with the rules and regulations of the Central Education Agency, andwith the statutes regarding teaching qualifications and requirements.
A school district may directly enter into a contract with the federal government pursuant to Section 21.111 of the Texas Education Code, subject to rules and regulations of the Central Education Agency; and such district may use local maintenance funds to carry out thepurpose of such contracts.

General ofTexas Prepared by James C.McCoy Assistant Attorney General
APPROVED: OPINION COMMITTEE
Kerns Taylor, Chairman W. E.Allen, Co-Chairman
IvanWilliams Earl Hines William J. Craig Jack Goodman
NRADE F. GRIFFIN Staff Legal Assistant
ALFRED WALKER Executive Assistant
NOIS.WHITE First Assistant

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