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                     August 20, 1970


Dr. J. W. Edgar                  Opinion No.   M-666
Commissioner of Education
Texas Education Agency           Re: Does an Independent School
Austin, Texas                        District have authority to
                                     contract with private
                                     corporations for instruc-
                                     tions of its pupils, and
                                     related questions.
Dear Dr. Edgar:

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

           "The Dallas Independent School District recognizes
      the severe problems in educating the economically
      deprived minority groups. The District proposes to
      enter into and operate two major research and develop-
      ment projects to develop more effective programs and
      to alleviate educational deprivation among 1585 inner
      city pupils in grades 1, 2 and 3 and grades 7, 8, 9, 10,
      11 and 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 for payments.  Contractors
      will,be required to install their instructional systems
      in approximately 27 regular classrooms, employ and
      train a corps of Dallas teachers to operate the programs,
      and within a specified period estimated at one to three
      years, turn the proven instructional systems back to the
      School District to be operated thereafter without
      assistance of the contractor.




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Dr. J. W. Edgar, page 2          (M-666)


          "To ensure local control of the project, the Dallas
    Independent School District Board of Education will hold
    the contractors accountable for their performance and pay
    them based on increases in achievement of pupils. An
    effective school-operated management system undes the
    direction of the Assistant Superintendent-Accountability
    supplemented by contracted services of education auditors,
    will enable Dallas school administrators to monitor
    continuously the work of the instructional contractors so
    as to meet the research and development and instructional
    goals of the project. Both projects will be supported
    primarily by federal funds. One project is eligible
    for support under Public Law 874, Title I, III and V of
    the Elementary 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

          "One project is entitled 'Guaranteed Student Per-
     formance in Education and Training.'   This project will
     serve 985 educationally disadvantaged students, grades
     9 through 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 school who are performing below
     expectations in mathematics and English and'who have
     parental approval to participate.   Instructional programs
     will be conducted on these five campuses under the
     direction of the building principals.




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Dr. J. W. Edgar, page 3          (M-666)


                      Project Two'

          '"The second project, 'Performance Incentive Remedial
     Education Experiment', is one of 18 that the U. S. Office
     of Economic Opportunity is sponsoring to determine the
     effectiveness of performance contracting in a variety of
     educational settings and among various ethnic groups.

          "By letter of June 5, 1970 the Dallas school district
     has asked this Agency to cooperate with the plans by its
     approval of the above described contractual project(s), to
     provide financial support as set out in 'Proposed Financial
     Support for the 'Guaranteed Student Performance in
     Education and Training Project',' and to designate an
     Agency Task Force to work with the Dallas administration
     to complete the operation of the project plan, monitor the
     project, participate in the project evaluation and dis-
     seminate the results.

          "In the absence of specific legislation, court ~decisions
     Or Attorney General rulings relative to the authority of
     a school district to enter into incentive performance con-
     tracts with private concerns or corporations for the edu-
     cational instruction of public school regular students,
     on an experimental educational development program basis
     or otherwise, this Agency as well as the school district
     need and would appreciate an opinion from your office on
     the following questions of immediate importance:

     "1.   Under current school laws, may a school dis-
           trict (Dallas I.S.D.) enter into incentive
           performance contract/s ,with private concerns or
           corporation/s for service proposed and under
           the conditions and purposes set forth in the two
           projects described above --where such program is
           primarily proposed for a study in depth of the
           utilization of the capability of the private
           sector as one strategy to facilitate .desirable
           educational reforms, as distinguished from any
           general plan or movement to contract to private




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Dr. J. W. Edgar, page 4            (M-666)


            corporation/s or firm/s the education of regular
            public school children?

     "2 .   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.

     "3 .   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 its public
            school children?

     "4 .   Does a school district have authority to expend
            local maintenance funds to pay part or all of
            the cost of instruction provided by a private
            concern or firm under contract with the district."

     The pertinent provisions of the Texas Education Code are
quoted, in part, as follows:

            "Section 11.02.   General Powers and Duties

            "(a)...

            "(b)...

          "(c) Except for agreements entered into by 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
     or board 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,hority to Enter Into Contracts
                             'for &ants

          "For the maintenance and improvement of state
     educational programs and activities in the public
     schools. the State Board of Education mav enter into
     contracts for grants from both public and private
     organizations and may 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 any public free
     school district of this state, subject to rules and
     regulations of the Central Education Aqency heretofore
     and hereafter adopted, is hereby authorized and
     empowered to conduct and supervise vocational classes
     and other educational programs for students of all
     aqes; and whenever it deems 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,
      said board of trustees is hereby authorized and
      empowered to purchase, acquire or lease real or personal
     property: to contract or enter into agreements with any
      department or agency of the United States or this state,
      subject to rules and regulations prescribed by the
     .Central Education Aqency appertaininq to such educational
     prosrams: and,to contract or enter into agreements with
      any person, partnership, firm or corporation pertaininq
     -to the local operation and supervision of such programs by
     the district." (Emphasis added.)

     Section 11.02, quoted above, requires that any school dis-
trict 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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Dr. J. W. Edgar, page 6         (M-666)


     Section 11.30, quoted above, authorizes the Education Agency
to enter contracts with the government to receive money and ex-
pend such money under conditions of the contract.  See Attorney
General's Opinion WW-1321 (1962).

     In addition, the purpose of Section 21.111, quoted above,
was to make express provision for vocational and other educational
courses for students of all ages, there being a doubt concern-
ing the extent of authority conferred under previous laws. See
the Emergency Clause in H.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
local private concerns for private 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, to require the local
school districts to obtain its approval 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 with-
hold 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 local private concerns
for operation and supervision of such programs.

     It is also the opinion of this office that Section 21.111
must be construed with reference to the entire body of law exist-
ing at the time of the statute as well as in para materia with
any ,statutes dealing with the same subject insofar as the latter
are not inconsistent with Section 21.111. 53 Tex.Jur2d 278,
Statutes, Sec. 185; p. 280, Sec. 186. For example, if under
prior laws (such as Article 2902, V.C.S.) it was notclear whether
local school funds could be used'for the education of persons
over twenty-one, it is now clear that Section 21.111 permits




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


the board 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, in contracting with private concerns under
Section 21.111(b) for the instruction of public school children,
a school district may not disregard the teaching qualifications
and requirements, as required in other statutes of this State
and permit instruction by~persons,who do not meet the statutory
standards, such as to age, health, and educational qualifications.
No doubt such matters will be included in any contract to be
executed.

     In light of the above discussion, the answer to your first
question is a qualified "yes". The yes is qualified by a
determination by the school district that such a program is
vocational as defined above, and a determination by the Central
Education Agency that the contracts in question are consistent
with the statutes of this State and the rules and regulations of
the Central Education Agency.

     The second question is also'answered by a qualified    "yes"
as discussed above.

     Question No. 3 is also answered by a qualified    "yes" as
discussed above.

     In regard to question No. 4, it should suffice to note that
Subsection (a) of Section 21.111 specifically authorizes use of
local maintenance funds for the vocational type programs.
Consequently, the answer to your fourth question is also a quali-
fied "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 of vocational 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, and with 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 the purpose of such
          contracts.




                                             General of Texas

Prepared by James C. McCoy
Assistant Attorney General

APPROVED:
OPINION COMMITTEE

Kerns Taylor, Chairman
W. E. Allen, Co-Chairman

Ivan Williams
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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