We’re getting a glimpse at how Senate leaders plan to tackle Governor Greg Abbott’s fifth emergency item: ethics reform. The Senate Finance Committee heard testimony Wednesday on Senate Bill 20, which aims to regulate the use of cooperative contracts.

Cooperative contracting is the controversial program that allows companies to bypass the usual bidding process for state contracts. The program, which was designed for smaller purchases, made headlines last year when Austin-based software company 21CT received a $20 million contract for Medicaid fraud detection software through that process. Subsequent accusations of corruption within the department led to several high-level resignations at HHSC, and a legislative push for more oversight in the state’s contracting process.

Senate Finance Committee Chair Jane Nelson (R – TX Senate District 12) filed Senate Bill 20, and dedicated Wednesday’s committee meeting to her legislation. It would require agency heads to approve the use of a cooperative contract for anything over $1 million and would prohibit any conflicts of interest with high-ranking department officials. It would also mandate an increasing number of competitive bids depending on the size of the contract, and would require agencies to develop an online database to post their contracts online.

“The recent reports of irregularities in contracts at our health and human services agencies have revealed what I perceive to be gaping holes in our laws on contracting,” Nelson said. “Those gaps need to be addressed across state government. Senate Bill 20 strengthens accountability, increases transparency and ensures the fair competitive bids in awarding of state contracts.”

The Finance Committee heard testimony from several departments, including the HHSC, but left the bill pending. The committee is expected to vote on the legislation next week.