GEC C.S.H.B. 1572 75(R) BILL ANALYSIS BUSINESS & INDUSTRY C.S.H.B. 1572 By: Davila 4-23-97 Committee Report (Substituted) BACKGROUND In 1995, HB 2128 (the Public Utility Regulatory Act) was passed. This act created the Telecommunications Infrastructure Fund which will provide $150 million a year in grants to schools, non-profit hospitals, and libraries to promote the utilization of distance learning, information sharing, and telemedicine in Texas. Additionally, grants administered by several state agencies include requests for telecommunications and computer equipment. The Texas Department of Health alone issued $648,914 in grants for technical equipment during Fiscal Year 1996. The large amount of state dollars invested in technical equipment for non-profit organizations is allowed to be disposed of without restriction once the agency has obtained newer equipment. Similar organizations could utilize the discarded equipment if it is still operable, and therefore may not have to request additional funds from the state. A provision such as this would maximize the utility of state dollars invested in high-tech equipment for non-profit agencies. PURPOSE To ensure that non-profit agencies purchasing certain technical equipment with state grants maximize the utility of that equipment. RULEMAKING AUTHORITY It is the opinion of the author that the bill does grant additional rule making authority to the State Comptroller. SECTION BY SECTION ANALYSIS SECTION 1: Amends Title 132 of the Revised Statutes by adding Article 9023d Article 9023d: DISPOSAL OF COMPUTER EQUIPMENT BY CHARITABLE ORGANIZATION (a) Defines "computer equipment" and "charitable organization". (b) Charitable organization that expend funds received from the state to purchase computer equipment may not dispose of or discard the equipment before the fourth anniversary of the date the organization purchased the equipment. (c) Exceptions to the section (1) the sale or trade of computer equipment (2) the disposal of equipment that is not operational (d) Organizations may dispose of computer equipment purchased with state funds within four years by donating it to another non-profit organization. (e) The section applies only to computer equipment purchased for at least $500. (f) Comptroller will adopt rules to implement this section. SECTION 2: Effective Date-September 1, 1997 This Act only applies to computer equipment purchased after this date. SECTION 3: Emergency Clause COMPARISON OF ORIGINAL TO SUBSTITUTE Originally, H.B. 1572 proposed that this legislation apply to computer equipment that was obtained with state funds for a period within five years of the purchase. Due to the fast paced computer technology market and concerns that equipment might become obsolete, this time frame was shortened to four years. Additionally, language establishing that the equipment had to be donated to another charitable organization providing similar services through a drawing has been modified. Now, the equipment can be donated other charitable organizations whether or not they provide similar services. Also, the rules to implement this article will be adopted by the comptroller. The primary reason for the latter change is to allow for procedures that can accommodate both rural and urban charitable organizations and various situations that can arise by not making this process an administrative burden. The goal of the legislation is simply to maximize state dollars in the most efficient way possible.