74(R) HB 1399 House Committee Report

BILL ANALYSIS

C.S.H.B. 1399
By: Gray
4-19-95
Committee Report (Substituted)

BACKGROUND

The Office of State-Federal Relations (OSFR) began in 1965 as a
division of the Governor's Office and primarily reported on federal
actions that affected Texas. In 1971, the Legislature established
OSFR as a separate state agency. Over time, its role has changed
from monitoring federal funding and policy development to actively
attempting to influence those decisions. Today, OSFR works with
members of the U.S. Congress, particularly those from Texas; the
Governor; the Texas Legislature; and Texas state agencies to
communicate Texas' needs to the federal government. This effort is
aimed at increasing the state's share of federal funds and
influencing federal decisions for the benefit of Texas. The Office
is also responsible for producing an annual report on the state's
effectiveness in getting federal funds to Texas; evaluating
individual state agency applications for, and receipt of, federal
funds; and establishing a grants team to assist in bringing more
discretionary federal funds to Texas.

The Office of State-Federal Relations is subject to the Sunset Act
and will be abolished September 1, 1995 unless continued by the
Legislature. As a result of the review of OSFR, the Sunset
Advisory Commission recommended continuation and several statutory
modifications that are contained in this committee substitute.

PURPOSE

The purpose of this bill is to continue the Office of State-Federal
Relations for a 12-year period, make statutory modifications
recommended by the Sunset Advisory Commission, and provide for
other changes. Modifications proposed by this bill:

transfer responsibility to establish a grant writing team from
OSFR to the Governor's Office of Budget and Planning;

clarify that OSFR is responsible for providing information,
monitoring, coordinating, and reporting on federal formula
funds, and the Governor's Office of Budget and Planning is
responsible for federal discretionary grants;

increase coordination between OSFR and the Legislative Budget
Board to strengthen the budget link between Austin and
Washington, D.C.;

increase coordination between OSFR and other state agencies
affected by federal decisions and improve the working
arrangement of state agency staff located in OSFR's
Washington, D.C. office;

adjust the salaries for staff working in Washington, D.C. to
reflect higher costs of living; and

provide for other changes.

RULEMAKING AUTHORITY

In the committee's opinion, this bill grants rulemaking authority
to the Office of State-Federal Relations in the following sections:
SECTION 2 - Section 751.002, Government Code, SECTION 4 - Section
751.006, SECTION 5 - Section 751.008, SECTION 9 - Section 751.013;
and to the Governor's Office of Budget and Planning in SECTION 15 -
Section 772.009, Government Code. In addition, under the general
rulemaking authority already granted to the office, rules may also
be developed to implement other new provisions found in this bill.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 751.003, Government Code. Updates
the agency's sunset review date to September 1, 2007, which
provides for the usual 12-year review.

SECTION 2. Amends Section 751.002. Adds standard language
developed by the Sunset Commission. Requires the office to comply
with the administrative procedure law, Chapter 2001. Reletters
Subsection.

SECTION 3. Amends Section 751.005, by amending Subsection (b)
and adding Subsection (d). Adds standard language developed by the
Sunset Commission. Requires the director to prepare an annual
financial report that meets the reporting requirements in the
appropriations act.

SECTION 4. Amends Section 751.006. (a) Adds standard language
developed by the Sunset Commission. Requires the director or a
designee to inform office employees of the qualifications for
employment and each person's responsibilities under the law.
Renames the Section.

(b) Updates standard language developed by the Sunset
Commission. Requires the director or a designee to develop an
intraagency career ladder program that addresses mobility and
advancement opportunities for employees within the office and
requires intraagency posting of job openings concurrently with any
public posting.

(c) Updates standard language developed by the Sunset
Commission. Requires the director or a designee to develop a
system of annual performance evaluations based on documented
employee performance and upon which merit salary increases must be
based.

(d) - (f) Adds standard language developed by the Sunset
Commission. Requires the director or a designee to develop an
equal employment policy that is annually updated, reviewed by the
Texas Commission on Human Rights, and filed with the governor's
office.

(g) Provides for the director and staff of the office working
in Washington, D.C. to receive the same cost-of-living salary
increase as provided for other state agency personnel working in
the Washington, D.C. office.

SECTION 5. Amends Section 751.008. (a) Updates standard
language developed by the Sunset Commission. Requires the director
to prepare and distribute information to the public concerning the
office's functions and complaint procedures.

(b) Updates standard language developed by the Sunset
Commission. Requires the office to collect and maintain
information about all complaints filed with the office.

(c) Updates standard language developed by the Sunset
Commission. Requires the office to maintain files on written
complaints that the office has the authority to resolve and to
notify the parties regarding the status of the complaint quarterly
until disposition.

SECTION 6. Amends Section 751.010 by amending Subsections (c)
and (e) and adding Subsection (f).

(f) Requires the board to work with the director to hold
periodic meetings in Austin to discuss federal activities and
issues with state agency representatives. Provides for the board's
presiding officer to determine the times of the meetings.

SECTION 7. Amends Section 751.011. Requires the board to
review and approve interagency contracts according to the
requirements in Section 751.012. Reletters Subsection.

SECTION 8. Amends Section 751.012. (a) Requires state agency
staff working under an interagency contract to coordinate
activities conducted on behalf of the other agency with those of
the Office of State-Federal Relations.

(b) Requires the office to enter into an interagency contract
with the Legislative Budget Board to locate staff of the
Legislative Budget Board in Washington, D.C.

(c) Requires interagency contracts to include provisions that
require staff of other state agencies to report directly to that
agency's governing body, have an official role in the agency's
budget planning process, provide periodic updates of activities at
meetings of that agency's governing body, and receive a salary
established by the state auditor under Subsection (d).

(d) Requires the state auditor to establish a salary schedule
for employees of state agencies who contract with the office.
Requires the salary schedule to be based on experience and
expertise in state-federal relations, and include a standard cost-of-living adjustment to compensate the employee for living in
Washington, D.C.

(e) Requires state agencies that are identified by the
Legislative Budget Board as receiving significant federal funding
or as significantly affected by federal policy decisions to develop
a plan of state-federal coordination, study the benefits of
entering a contract under Subsection (a), and submit the
coordination plan and study to the office and to the Legislative
Budget Board. Agencies headed by a state-wide elected officials
are exempted from the requirements in this Subsection.

(f) Requires the Health and Human Services Commission to
satisfy the coordination requirements in Subsection (e) on behalf
of all health and human services agencies listed in Section 19,
Article 4413(502), Revised Statutes. Those agencies include the
Texas Department of Aging, the Texas Commission on Alcohol and Drug
Abuse, the Texas Commission for the Blind, the Texas Commission for
the Deaf and Hearing Impaired, the Texas Department of Health, the
Texas Department of Human Services, the Texas Juvenile Probation
Commission, the Texas Department of Mental Health and Mental
Retardation, the Texas Rehabilitation Commission, and the
Department of Protective and Regulatory Services. Reletters
Subsections.

SECTION 9. Amends Subchapter A, Chapter 751, by adding Section
751.013. Adds standard language developed by the Sunset
Commission. Requires the office to comply with state and federal
program and facility accessibility laws and to develop a plan that
describes how non-English speaking persons can be provided
reasonable access to the office's programs.

SECTION 10. Amends Subchapter A, Chapter 751, by adding
Section 751.014. Adds standard language developed by the Sunset
Commission. Requires the office's funds to be managed in
accordance with the State Funds Reform Act.

SECTION 11. Amends Section 751.021. Adds a definition of
federal formula funds to mean only those funds coming to the state
based on federal funding formulas or as otherwise legislated by
Congress, excluding those funds known as federal discretionary
grants. Strikes all other definitions in this section.

SECTION 12. Amends Section 751.022. (a) Clarifies that the
Office of State-Federal Relations has primary responsibility for
monitoring, coordinating, and reporting on the state's efforts to
ensure receipt of an equitable share of federal formula funds.

(b) Removes requirements of the Office of State-Federal
Relations to monitor the federal register, the Texas Register, and
other federal or state publications to identify federal and state
funding opportunities; to develop procedures to formally notify
appropriate state and local agencies of the availability of federal
funds and coordinate the application process; and to periodically
review the funding strategies and methods of those states that rank
significantly above the national average in per capita receipt of
federal funds to determine whether those strategies and methods
could be successfully employed by this state. Also updates rule-making language to reflect the current reference in the Government
Code.

(c) Specifies that the Office of State-Federal Relations is
required to fulfill the requirements in the subsection only as they
relate to federal formula funds. Also removes responsibility for
the Office of State-Federal Relations to provide a description of
any instance in which the state or a state agency has not pursued
available opportunities to receive federal funds or earned federal
funds and the reason for the failure to pursue the opportunity;
removes the requirement, reinstated in SECTION 15, that each state
agency designate an employee to serve as the agency's federal funds
coordinator; and removes the requirement, reinstated in SECTION 15,
that each state agency or institution file an annual report with
the office concerning the agency's efforts in acquiring available
federal funds during the preceding fiscal year.

SECTION 13. Amends Subchapter B, Chapter 751, by adding
Section 751.023. Requires all state agencies, to the extent
practicable, to contact the office before providing information to
a federal agency, or the United States Congress about state policy
or conditions. Agencies headed by a state-wide elected officials
are exempted from the requirements in this Section.

SECTION 14. Amends Subchapter B, Chapter 751, by adding
Section 751.024. (a) Requires state agencies and institutions of
higher education to report each application made to the United
States government for the grant of funds; the award or designation,
by the United States government, of any funds for expenditure by a
Texas state agency; and waivers of grant requirements to the
Legislative Budget Board.

(b) Provides that the Legislative Budget Board may develop
reporting procedures and time schedules necessary to implement this
provision.

SECTION 15. Amends Chapter 772, Government Code, by adding
Section 772.009.
(a) Requires the director of the Governor's Office of Budget
and Planning to establish a grant writing team and requires the
team to develop a plan for increased state access to available
federal funds; to coordinate with state agencies to develop a plan
for the use of federal grant funds; to monitor federal and state
publications to identify federal and state funding opportunities;
to develop procedures to formally notify appropriate state and
local agencies of the availability of discretionary federal funds
and coordinate the application process; and to periodically review
funding strategies of states that rank above the national average
in the per capita receipt of federal funds to determine whether
those strategies may be employed by this state.

(b) Authorizes the grant writing team to establish a
clearinghouse of information relating to the availability of state,
federal and private grants; to establish an automated information
system database for grant information and make it available for use
by state agencies and political subdivisions; to provide counseling
to state agencies, political subdivisions of the state, nonprofit
charitable institutions, educational institutions and residents of
the state concerning the availability and means of obtaining state,
federal and private grants; to provide grant writing assistance and
training to state agencies, political subdivisions of the state,
individuals, and other entities; to publicize the services and
activities of the grant writing team; to establish and maintain a
database of state agencies designated under state and federal law
to receive federal categorical and block grant funds; and to
analyze the criteria for grants for which state agencies are denied
access because of state law, rules or agency organization and
suggest changes in agency rules or organization that would increase
the probability of the agency's receiving federal or other grants.

(c) Authorizes the grant writing team to charge and collect
fees from a person using the grant writing team's services when
appropriate. Provides that the fee only cover the cost of services
provided.

(d) Requires the grant writing team to monitor and identify
federal grants that are available to state and local criminal
justice agencies and assist the agencies in applying for and
obtaining those grants.

(e) Authorizes the grant writing team to enter into a
memorandum of understanding with other state agencies to provide
services in obtaining federal grants.

(f) Reinstates language deleted in SECTION 12 that requires
each state agency to designate a federal funds coordinator who is
currently on the management or senior staff level. Requires the
federal funds coordinator of each state agency to oversee and
coordinate the agency's efforts in acquiring discretionary federal
funds, and send the grant writing team a quarterly report listing
the grants for which the agency has applied and the catalogue of
federal domestic grant assistance number, and giving a short
description of the grant; and notify the grant writing team of an
award or denial of a federal grant to the agency.

(g) Reinstates language deleted in SECTION 12 that requires
each state agency or institution to file an annual report with the
grant writing team concerning the agency's efforts in acquiring
available discretionary federal funds during the preceding state
fiscal year.

(h) Reinstates language deleted in SECTION 12 that authorizes
the governor or the Legislative Budget Board to take action under
Chapter 317 to affect an agency's appropriation if either the
governor or Legislative Budget Board determine that the agency's
efforts under subsection (e) were unsatisfactory.

(i) Reinstates definitions of "earned federal funds", "federal
funds", "indirect costs", and "local government entity" deleted in
SECTION 11. Defines "earned federal funds" to mean funds that are
received or earned in connection with a federally funded program
but are not required by the governing agreement to be distributed
on that program. Defines "federal funds" to mean all assistance
provided or potentially available to state agencies from the
federal government in the form of grants, contracts, loans, loan
guarantees, property, cooperative agreements, interest subsidies,
insurance, direct appropriations, or any other method of
disbursement. Defines "indirect costs" to mean costs, as defined
by Federal Management Circular A-87 or subsequent revisions of that
circular. Defines "local government entity" to mean a county,
municipality, special purpose district, including a school
district, or any other political subdivision of the state.

SECTION 16. Requires the Office of State-Federal Relations to
enter into a contract with the Legislative Budget Board as
prescribed in Section 751.012(b) by January 1, 1996.

SECTION 17. Repeals Subchapter C, Chapter 751, Government
Code, which deletes the requirement that the office establish a
grant writing team..

SECTION 18. (a) Requires the Office of State-Federal Relations
to transfer all records in the office's possession that relate to
the administration of Subchapter C, Chapter 751, Government Code,
to the Governor's Office of Budget and Planning as soon as
practicable after the effective date of this Act.

(b) Specifies that the Governor's Office of Budget and
Planning assumes the outstanding obligations of the Office of
State-Federal Relations with respect to any existing contracts
entered into by the office before the effective date of this Act
under Subchapter C, Chapter 751, Government Code.

SECTION 19. Specifies the effective date of the Act as
September 1, 1995.

SECTION 20. Emergency clause.

COMPARISON OF ORIGINAL TO SUBSTITUTE

Major points of difference between House Bill 1399, as introduced,
and the committee substitute are as follows:

1. The substitute clarifies that the Office of State-Federal Relations is responsible for providing
information, monitoring, coordinating, and reporting on
the receipt of federal formula funds; and the Governor's
Office of Budget and Planning is responsible for federal
discretionary grants.

2. The substitute transfers the responsibility to establish
a grant writing team from the Office of State-Federal
Relations to the Governor's Office of Budget and
Planning.

3. The substitute removes from OSFR the responsibility for
monitoring the federal register, the Texas Register and
other federal or state publications to identify federal
and state funding opportunities; developing procedures
to formally notify appropriate state and local agencies
of the availability of federal funds and coordinate the
application process; and periodically reviewing funding
strategies.

SUMMARY OF COMMITTEE ACTION

HB 1399 was considered by the House Committee on State, Federal,
and International Relations in a public hearing on 19 April 1995.

The following person testified in favor of the bill:

Mr. Jim Ray
Texas Association of Regional Councils of Government

The committee considered one amendment to the bill which was
adopted without objection.

The chairman directed the staff to incorporate the amendment into
a substitute.

The bill was reported favorably as substituted with the
recommendation that it do pass and be printed, by a record vote of
7 ayes, 0 nays, 0 pnv, and 2 absent.