By SCOTT JORGENSEN

SALEM, Ore.- Sections of an omnibus education bill may have unintended consequences for rural communities in Eastern Oregon if passed in their current form.

The Senate Education and Workforce Development Committee held a hearing on Monday regarding Senate Bill 1540. The bill has been amended several times and is intended to implement several of the education reforms passed during the 2011 legislative session.

A section of the bill deals with limiting the ability of Educational Service Districts (ESDs) to engage in entrepreneurial activities. It was prompted by a highly publicized financial scandal involving the Willamette ESD.

Ozzie Rose, a legislative advocate and former head of the Confederation of Oregon School Administrators, spoke on behalf of the Oregon Association of ESDs.

Rose said the Grant County ESD provides internet service to many local municipal entities, including the district attorney’s office, the City of John Day, treatment plants and the fairgrounds.

The number of places served by ESDs in Eastern Oregon is larger due to the scarcity of services and providers in the area, Rose said, adding that he supports the theory that such regionalization can help drive down costs.

Condon resident Rob Myers offered similar testimony. He said that in small rural towns, not many information technology services are available.

Myers said the North Central ESD partners with Frontier Communications. Through that partnership, he said, broadband and data services are provided to law enforcement agencies, communities and people who otherwise would not be able to have them.

That partnership provides bandwidth to Grant ESD, Myers said, warning committee members of the “unintended consequences” that the proposed legislation would have on those existing arrangements. He added that the partnership does not compete with private businesses in offering those services.

Cindy Hunt from the state Department of Education said the agency is “neutral” regarding the entrepreneurial services amendment but that it may have the “reverse impact” from its original intent.

Hunt said current contracts still would exist under the amendment but would not in the future. She said this would prevent ESDs from participating in the bidding process for providing services, which then could drive up costs.

Sen. Frank Morse, R-Albany, said the intent of the amendment was not to eliminate entrepreneurial activity that helps education. He said the intent of the amendment was to prevent public money from being used for other activities and added that ESDs should be devoted to education and not to making money.

“We have no business doing that,” Morse said.

Morse suggested to Sen. Mark Hass, D-Beaverton, chair of the committee, that the language in question be clarified.

“Somehow, there needs to be some sideboards,” Morse said, to focus ESD efforts on education.

Hass said that although he originally wanted to pass the bill out of committee following the hearing, he agreed that it needed more work. He said more amendments could be drafted and the matter would be revisited during the committee’s next meeting on Wednesday.