JKM C.S.H.B. 3512 75(R)BILL ANALYSIS ECONOMIC DEVELOPMENT C.S.H.B. 3512 By: Greenberg 4-12-97 Committee Report (Substituted) BACKGROUND Many government functions are being privatized in an effort to save taxpayers money. The privatization of state functions results in a need for fewer state employees and reductions in force. Because many of the employees who lose their jobs in privatization efforts have been quality employees and lost their jobs through no fault of their own, the state should provide them assistance in finding new employment. PURPOSE To provide assistance and benefits to displaced state employees in the forms of outplacement services, employment preference, and retirement benefits. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Subtitle B, Title 6, Government Code by adding Chapter 666 entitled EMPLOYMENT PREFERENCES FOR FORMER STATE EMPLOYEES, as follows: Sec. 666.001 DEFINITION. Defines a state agency as a department, commission, board, office, council, or other agency in the executive or judicial branch of state government created by state statute or by the constitution, including university system or institution of higher education. Sec. 666.002 STATE EMPLOYMENT PREFERENCE. Provides that a former state employee, whose position was eliminated due to a reduction in force or privatization of a state service, has preference for employment or appointment at a state agency over other applicants for the same position who do not have a greater qualification. Sec. 666.003. OUTPLACEMENT SERVICES. Requires that the Texas Workforce Commission establish outplacement services for former employees of a state agency which has reduced its workforce by not fewer than 25 employees, or has eliminated not fewer than 25 positions due to privatization. Requires that the outplacement services include: reasonable access to career centers, assistance in locating other available state employment, counseling regarding unemployment benefits, and instruction on resume drafting and other career-related services. Allows the Texas Workforce Commission to contract with a private enterprise to provide the outplacement services under this section. SECTION 2. Subchapter B, Chapter 814, Government Code is amended by adding Section 814.1041, entitled RETIREMENT INCENTIVE FOR EMPLOYEE CLASS, as follows: (a) States that a member of the employee class may retire under this section if the member has at least a minimum amount of service credit required under current statute and is at least 50 years of age and is not more than three years younger that the minimum age required. (b) States that this section does not apply to retirement under Section 814.107. (c) A member eligible to retire under this section is one who meets minimum age and service requirements under Section 814.104, except as provided by Subsection (a) of this section; applies for service retirement; holds a position included in the employee class on the date the application is filed; and designates an effective date of retirement that is after August 31, 1997, but before September 1, 1999, and is the later of September 30, 1997, or the earliest date that the member's retirement may become effective. (d) Requires the retirement system to report to the comptroller the name of each person who retires under this section: the effective date of the person's retirement, the entity by which the person was employed, and the amount of compensation used in computing the person's annuity. Also requires the retirement system submit reports under this subsection at the times and in the manner the comptroller provides. (e) Except as provided below in Subsection (f), the comptroller shall reduce the total amount of legislative appropriations to the entity by which the retiring member was employed immediately before retirement by the amount of the reported compensation multiplied by the number of months remaining in the fiscal biennium. (f) The comptroller may not reduce appropriations under Subsection (e) if the total legislative appropriations to the entity for the fiscal year in which the employee retires, or for any subsequent fiscal year in the biennium, are less than $1 million. (g) Limits this section to employees whose positions were eliminated due to a reduction in the workforce or a privatization of the employees' positions. (h) This section expires September 1, 1999. SECTION 3. Chapter 2252, Government Code, is amended by adding Subchapter D, entitled PRIVATIZATION OF STATE SERVICES, as follows:. Sec. 2252.091. DEFINITION. In this subchapter, "state agency" means a department, commission, board, office, council, or other agency in the executive or judicial branch of state government that is created by the state constitution or statute including a university system or institution of higher education. Sec. 2252.092 CONTRACTS. States that a contract between a state agency and a private entity that contracts to provide services formerly provided by state employees shall require the private entity to provide at least the same compensation and benefits to its employees as the state provided to employees performing similar services. SECTION 4. Amends Subchapter A, Chapter 2254, Government Code, by adding Section 2254.006, entitled CONTRACT FOR PROFESSIONAL SERVICES OF FORMER STATE EMPLOYEE. Subsection (a) prohibits a governmental entity from contracting with a former state employee for professional services if not more than a year has passed since the employee's retirement under Section 814.1041. Subsection (b) states that this Section expires September 1, 2000. SECTION 5. Amends Subchapter B, Chapter 2254, Government Code, by adding Section2254.0261, CONTRACT FOR CONSULTING SERVICES OF FORMER STATE EMPLOYEE, which states that a former state employee who has taken the early retirement incentive provided in this bill may not receive a contract for consulting services from an agency within the twelve months following the date of retirement. SECTION 6. Effective Date is September 1, 1997. SECTION 7. Emergency Clause. COMPARISON OF ORIGINAL TO SUBSTITUTE SECTION 1. CSHB 3512, Sec. 666.003, adds Subsection (c) which states that the Texas Workforce Commission may contract with private enterprise to provide the outplacement services required by this section. SECTION 2. CSHB 3512, Sec. 814.1041, removes language regarding consulting and professional services from its location in HB 3512, Subsection (a). CSHB 3512 places this language in new SECTIONS 4 and 5, and subdivides the remaining language in CSHB 3512, SECTION 2. CSHB 3512 adds to Subsection (a) the requirement that an employee be at least 50 years of age to qualify for retirement under this section. CSHB 3512 adds Subsection (g) which limits the retirement incentive to state employees whose position was eliminated due to a reduction in the workforce or a privatization of the employee's position. SECTION 4 is added to CSHB 3512 to expand on language concerning professional services which was located in HB 3512 in SECTION 2, Sec. 814.1041, Subsection (a). CSHB 3512, Subsection (a) prohibits a governmental entity from contracting with a former state employee for professional services if not more than a year has passed since the employee's retirement under Section 814.1041. Subsection (b) states that this Section expires September 1, 2000. Renumbers subsequent sections accordingly. SECTION 5. is added to CSHB 3512 to expand on language concerning consulting services which was located in HB 3512 in SECTION 2, Sec. 814.1041, Subsection (a). CSHB 3512, which states that a former state employee who has taken the early retirement incentive provided in this bill may not receive a contract for consulting services from an agency within the twelve months following the date of retirement. Renumbers subsequent sections accordingly.