What Changed With Conflicts and Gifts in 2025? Here’s What Trustees Need To Know

The 2025 legislative session brought sweeping changes to conflict-of-interest and gifts rules affecting Texas public schools. While the core disclosure statutes remain in place, lawmakers added new prohibitions and penalties designed to restrict vendor relationships and outside employment by administrators.  

“Recent legislation significantly changes the rules around conflicts and gifts,” said Mark Tilley, Division Director of TASB Legal Services. “And TASB is ready to assist trustees with compliance so they can focus on good governance and serving students.” 

Here is what’s new, what’s unchanged, and the practical steps board members can take right now to stay compliant and protect their district’s integrity. 

Big Shifts from the 2025 Session 

1. New Civil Penalties for Administrators’ Outside Personal Services (Educ. Code § 11.006) 

Lawmakers created a clear-cut rule: school district administrators (people with significant administrative duties, which include campus, program, or division leadership) may not receive any financial benefit for performing personal services for: 

• Any business that does or solicits business with the administrator’s district 
• An education business providing curriculum or administrative services to any district 
• Another school district, open-enrollment charter school, or regional ESC 

Limited exception: Administrators other than superintendents, assistant superintendents, or board-of-managers members may contract for such services only if the home district’s board approves a written contract that won’t harm the district, avoids a conflict of interest, and is performed on the administrator’s personal time. The contract is subject to public disclosure. Failure to comply could result in a penalty charged to the administrator up to $10,000 per violation. 

Trustee takeaway: This is a prohibition, so disclosure alone doesn’t suffice. Expect to be asked to approve contracts from lower-level administrators for work they may perform outside their school district duties. 

2. Criminal Liability for Vendors With Prohibited Trustee Relationships (Educ. Code § 11.067) 

Vendors now risk criminal charges if they bid for or receive a district contract and a prohibited relationship exists with a trustee. A prohibited relationship includes where a trustee: 

• Has a substantial interest in the vendor or its subcontractor (more than 10% ownership/profits) 
• Is related to someone with a substantial interest within the second degree by blood or marriage 
• Has received or been promised a gift or in-kind services over $250 from the vendor 

Penalty ladder: 

• 1st offense: Class C misdemeanor; 2nd: Class B; 3rd: Class A; 4th+: state jail felony 
• Automatic elevation to a state jail felony if the vendor directly or indirectly compensates a member (money, gifts, or in-kind services) as consideration for awarding the contract. 

Trustee takeaway: This new criminal offense may affect longstanding relationships with vendors. Trustees with small businesses or who have family members with businesses that previously were able to compete for district contracts as long as they made the proper disclosures could now face criminal charges. Vendors who have connections with trustees will need to police their contacts and gifts. Expect vendors to ask you and your family members more questions, earlier. 

What Didn’t Change (But Still Matters) 

The three foundational disclosure laws still apply and still work independently. Complying with one doesn’t satisfy the others: 

• Local Gov’t Code ch. 171 — Substantial interest in a business or real property 
  • A person has a substantial interest if they own 10% of a business or 10% of the person’s income comes from the company. For real property, substantial interest is ownership with a fair market value of $2,500 or more. 
  • Affidavit + abstention when the board action has a special economic effect on the business entity or the real property’s value that is distinguishable from the effect on the public 
  • First-degree relatives count (ex. parents, siblings, children); violations may void board action and can be a Class A misdemeanor 
• Local Gov’t Code ch. 176 — Conflicts with vendors (trustees/superintendent/others who exercise discretion) 
  • Form CIS required within 7 business days after awareness when income, gifts (> $100 aggregate over 12 months), or family relationships with a vendor (or prospective vendor) exist 
  • Vendors must file Form CIQ on a parallel timeline 
  • Criminal penalties scale with the contract amount; a timely cure after district notice can avoid liability
• Gov’t Code ch. 553, subch. A — Interest in real property to be acquired with public funds 
  • Separate affidavit filed with applicable county clerk(s), in addition to any ch. 171 affidavit 
  • Failure to file can be a Class A misdemeanor 
• Additionally, School FIRST requires annual public reporting of certain gifts ($250+) to executive officers and board members from entities paid by the district in the prior fiscal year (note a limited travel-reimbursement exception). 

View a chart outlining Required Conflict of Interest Disclosures (TASB login required). 

Gifts: What the Penal Code Still Says and How 2025 Rules Apply 

The Texas Penal Code continues to prohibit bribery (in any dollar amount) and restricts gifts to public servants from those under their jurisdiction, with narrow safe harbors (e.g., items under $50 — not cash or gift cards — and food accepted as a guest when the donor reports as required). Honoraria are generally prohibited for services requested because of the official position, though travel/lodging for substantive speaking may be permissible. 

Why this matters more now: The new vendor-liability statute (Educ. Code § 11.067) raises the stakes around vendor gifts. A vendor that gives a trustee an item worth more than $250 and later bids or contracts could face criminal exposure, even if the board member’s acceptance fits a Penal Code safe harbor and even if the trustee made a timely Form CIS disclosure.  

Quick Reference: Who Files What, When 

• Chapter 171 (Substantial Interest): Trustee files affidavit before action and abstains if special economic effect distinguishable from public. First-degree relatives count. 
• Chapter 176 (Vendor Conflicts): 
  • Trustee/superintendent/other officers: Form CIS within 7 business days after awareness if income, gifts (> $100 aggregate), or family relationship exists with a vendor or prospective vendor. 
  • Vendors: Form CIQ on the same timeline and when facts change. 
  • Cure: Timely filing after district notice can avoid criminal penalties. 
• Chapter 553 (District Land Acquisition): Trustee/candidate files separate affidavit with county clerk(s); this is in addition to ch. 171, if applicable. 
• School FIRST (Annual Report): Public disclosure of $250+ gifts to executive officers/board members from paid outside entities in the prior fiscal year (limited travel reimbursement exception). 

Bottom Line for Trustees 

• Disclose early, abstain when required, and keep records clean. 
• Assume vendors will avoid gifts altogether — and your safest course is to decline or donate items that even arguably exceed minimal value. 
• Outside work by administrators is now tightly restricted; board-approved written contracts are the rare exception and must meet strict findings. 
• One interest can trigger multiple laws. Check 171, 553, and 176 every time, and don’t forget School FIRST reporting. 

For comprehensive information on gifts and conflicts of interest, the following eSource documents are available (TASB login required). 

For tailored guidance, consult TASB Policy BBFA(LEGAL) and related local policies, and reach out to TASB Legal Line at 800-580-5345. We’re here to help you navigate these changes with clarity and confidence.