Relating to contracting with a school district or open-enrollment charter school by a vendor with whom a member of the board of trustees or governing body of the district or school or a related individual has certain business interests; creating a criminal offense.

School vendors face new criminal penalties

Beginning September 1, 2025, Texas law makes specified conflicts crimes for vendors bidding on or receiving school contracts. It covers school districts and open-enrollment charter schools, including agreements with companies, individuals, contractors, subcontractors, and professional service providers. An offense occurs when a school board member has a substantial interest in the vendor or its subcontractor. It also applies when someone related to the member within the second degree by blood or marriage has a substantial interest in the vendor. Substantial interest means more than 10% of voting interests, or a direct or indirect share exceeding 10% of profits, proceeds, or capital gains. A board member receiving or being promised gifts or in-kind services worth more than $250 also triggers an offense. Penalties are Class C, Class B, and Class A misdemeanors for the first, second, and third offenses, respectively. A fourth or later offense is a state jail felony. Any offense involving vendor compensation to a board member in exchange for the contract is a state jail felony. This includes money, gifts, or in-kind services provided directly or through a third party.