By Telford                                            H.B. No. 1077

         Substitute the following for H.B. No. 1077:

         By Grusendorf                                     C.S.H.B. No. 1077

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to the powers and duties of and the continuation of the

 1-3     Texas Public Finance Authority.

 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-5           SECTION 1.   Section 4, Texas Public Finance Authority Act

 1-6     (Article 601d, Vernon's Texas Civil Statutes), is amended to read

 1-7     as follows:

 1-8           Sec. 4.  COMPOSITION OF GOVERNING BOARD.  (a)  The authority

 1-9     is governed by a board of directors composed of six members

1-10     appointed by the governor with the advice and consent of the

1-11     senate.

1-12           (b)  A person is not eligible for appointment as a member of

1-13     the board if the person or the person's spouse:

1-14                 (1)  is employed by or participates in the management

1-15     of a business entity or other organization receiving funds from the

1-16     authority;

1-17                 (2)  owns or controls, directly or indirectly, more

1-18     than a 10 percent interest in a business entity or other

1-19     organization receiving funds from the authority; or

1-20                 (3)  uses or receives a substantial amount of tangible

1-21     goods, services, or funds from the authority, other than

1-22     compensation or reimbursement authorized by law for board

1-23     membership, attendance, or expenses.

1-24           (c)  Appointments to the board shall be made without regard

 2-1     to the race, color, disability, sex, religion, age, or national

 2-2     origin of the appointees.

 2-3           SECTION 2.   The Texas Public Finance Authority Act (Article

 2-4     601d, Vernon's Texas Civil Statutes) is amended by adding Sections

 2-5     5A and 5B to read as follows:

 2-6           Sec. 5A.  GROUNDS FOR REMOVAL.  (a)  It is a ground for

 2-7     removal from the board if a member:

 2-8                 (1)  violates a prohibition established by Section 8A;

 2-9                 (2)  cannot because of illness or disability discharge

2-10     the member's duties for a substantial part of the term for which

2-11     the member is appointed; or

2-12                 (3)  is absent from more than half of the regularly

2-13     scheduled board meetings that the member is eligible to attend

2-14     during a calendar year unless the absence is excused by majority

2-15     vote of the board.

2-16           (b)  The validity of an action of the board is not affected

2-17     by the fact that it is taken when a ground for removal of a board

2-18     member exists.

2-19           (c)  If the executive director of the authority has knowledge

2-20     that a potential ground for removal exists, the executive director

2-21     shall notify the presiding officer of the board of the potential

2-22     ground.  The presiding officer shall then notify the governor and

2-23     the attorney general that a potential ground for removal exists.

2-24     If the potential ground for removal involves the presiding officer,

2-25     the executive director shall notify the assistant presiding

2-26     officer, who shall notify the governor and the attorney general

2-27     that a potential ground for removal exists.

 3-1           Sec. 5B.  BOARD MEMBER TRAINING.  (a)  Before a member of the

 3-2     board may assume the member's duties and before the member may be

 3-3     confirmed by the senate, the member must complete at least one

 3-4     course of the training program established under this section.

 3-5           (b)  A training program established under this section shall

 3-6     provide information to the member regarding:

 3-7                 (1)  the enabling legislation that created the

 3-8     authority and the board;

 3-9                 (2)  the programs operated by the authority;

3-10                 (3)  the role and functions of the authority;

3-11                 (4)  the rules of the authority with an emphasis on the

3-12     rules that relate to disciplinary and investigatory authority;

3-13                 (5)  the current budget for the authority;

3-14                 (6)  the results of the most recent formal audit of the

3-15     authority;

3-16                 (7)  the requirements of the:

3-17                       (A)  open meetings law, Chapter 551, Government

3-18     Code; and

3-19                       (B)  open records law, Chapter 552, Government

3-20     Code;

3-21                 (8)  the requirements of the conflict of interest laws

3-22     and other laws relating to public officials; and

3-23                 (9)  any applicable ethics policies adopted by the

3-24     authority or the Texas Ethics Commission.

3-25           SECTION 3.   Sections 6(a) and (c), Texas Public Finance

3-26     Authority Act (Article 601d, Vernon's Texas Civil Statutes), are

3-27     amended to read as follows:

 4-1           (a)  The governor [biennially] shall designate a member of

 4-2     the board as the presiding officer of the board to serve in that

 4-3     capacity at the pleasure of the governor [appoint a chairman from

 4-4     the board's members].    The board biennially shall elect an

 4-5     assistant presiding officer [a vice-chairman] from its members.

 4-6           (c)  The board shall meet at least once in each quarter of

 4-7     the calendar year and shall meet at other times at the call of the

 4-8     presiding officer [chairman] or as prescribed by a rule of the

 4-9     board.

4-10           SECTION 4.   The Texas Public Finance Authority Act (Article

4-11     601d, Vernon's Texas Civil Statutes) is amended by adding Section

4-12     6A to read as follows:

4-13           Sec. 6A.  PUBLIC TESTIMONY AT BOARD MEETINGS.  The board

4-14     shall develop and implement policies that provide the public with a

4-15     reasonable opportunity to appear before the board and to speak on

4-16     any issue under the jurisdiction of the authority.

4-17           SECTION 5.   The Texas Public Finance Authority Act (Article

4-18     601d, Vernon's Texas Civil Statutes) is amended by adding Sections

4-19     8A-8G to read as follows:

4-20           Sec. 8A.  CONFLICT OF INTEREST.  (a)  An officer, employee,

4-21     or paid consultant of a Texas trade association in the field of

4-22     public finance may not be a member of the board or an employee of

4-23     the authority who is exempt from the state's position

4-24     classification plan or is compensated at or above the amount

4-25     prescribed by the General Appropriations Act for step 1, salary

4-26     group 17, of the position classification salary schedule.

4-27           (b)  A person who is the spouse of an officer, manager, or

 5-1     paid consultant of a Texas trade association in the field of public

 5-2     finance may not be a member of the board and may not be an employee

 5-3     of the authority who is exempt from the state's position

 5-4     classification plan or is compensated at or above the amount

 5-5     prescribed by the General Appropriations Act for step 1, salary

 5-6     group 17, of the position classification salary schedule.

 5-7           (c)  For the purposes of this section, a Texas trade

 5-8     association is a nonprofit, cooperative, and voluntarily joined

 5-9     association of business or professional competitors in this state

5-10     designed to assist its members and its industry or profession in

5-11     dealing with mutual business or professional problems and in

5-12     promoting their common interest.

5-13           (d)  A person may not serve as a member of the board or act

5-14     as the general counsel to the board or the authority if the person

5-15     is required to register as a lobbyist under Chapter 305, Government

5-16     Code, because of the person's activities for compensation on behalf

5-17     of a profession related to the operation of the authority.

5-18           Sec. 8B.  INFORMATION ON RESPONSIBILITIES OF BOARD MEMBERS

5-19     AND EMPLOYEES.  The executive director of the authority or the

5-20     executive director's designee shall provide to members of the board

5-21     and to authority employees, as often as necessary, information

5-22     regarding their qualification for office or employment under this

5-23     Act and their responsibilities under applicable laws relating to

5-24     standards of conduct for state officers or employees.

5-25           Sec. 8C.  SEPARATION OF POLICYMAKING AND MANAGEMENT

5-26     RESPONSIBILITIES.  The board shall develop and implement policies

5-27     that clearly separate the policymaking responsibilities of the

 6-1     board and the management responsibilities of the executive director

 6-2     and the staff of the authority.

 6-3           Sec. 8D.  EQUAL EMPLOYMENT OPPORTUNITY.  (a)  The executive

 6-4     director of the authority or the executive director's designee

 6-5     shall prepare and maintain a written policy statement to assure

 6-6     implementation of a program of equal employment opportunity under

 6-7     which all personnel transactions are made without regard to race,

 6-8     color, disability, sex, religion, age, or national origin.  The

 6-9     policy statement must include:

6-10                 (1)  personnel policies, including policies relating to

6-11     recruitment, evaluation, selection, appointment, training, and

6-12     promotion of personnel that are in compliance with requirements of

6-13     Chapter 21, Labor Code;

6-14                 (2)  a comprehensive analysis of the authority

6-15     workforce that meets federal and state guidelines;

6-16                 (3)  procedures by which a determination can be made

6-17     about the extent of underuse in the authority workforce of all

6-18     persons for whom federal or state guidelines encourage a more

6-19     equitable balance; and

6-20                 (4)  reasonable methods to appropriately address those

6-21     areas of underuse.

6-22           (b)  A policy statement prepared under Subsection (a) must

6-23     cover an annual period, be updated annually and reviewed by the

6-24     Texas Commission on Human Rights for compliance with Subsection

6-25     (a)(1), and be filed with the governor's office.

6-26           (c)  The governor's office shall deliver a biennial report to

6-27     the legislature based on the information received under Subsection

 7-1     (b).  The report may be made separately or as a part of other

 7-2     biennial reports made to the legislature.

 7-3           Sec. 8E.  CAREER LADDER; EMPLOYEE PERFORMANCE EVALUATIONS.

 7-4     (a)  The executive director of the authority or the executive

 7-5     director's designee shall develop an intra-agency career ladder

 7-6     program that addresses opportunities for mobility and advancement

 7-7     for employees within the authority.  The program shall require

 7-8     intra-agency posting of all positions concurrently with any public

 7-9     posting.

7-10           (b)  The executive director of the authority or the executive

7-11     director's designee shall develop a system of annual performance

7-12     evaluations that are based on documented employee performance.  All

7-13     merit pay for authority employees must be based on the system

7-14     established under this subsection.

7-15           Sec. 8F.  COMPLIANCE WITH LAWS RELATING TO ACCESSIBILITY.

7-16     The authority shall comply with federal and state laws related to

7-17     program and facility accessibility.

7-18           Sec. 8G.  INFORMATION ON COMPLAINTS.  (a)  The authority

7-19     shall keep a file about each written complaint filed with the

7-20     authority that the authority has authority to resolve.  The

7-21     authority shall provide to the person filing the complaint and the

7-22     persons or entities complained about the authority's policies and

7-23     procedures pertaining to complaint investigation and resolution.

7-24     The authority, at least quarterly and until final disposition of

7-25     the complaint, shall notify the person filing the complaint and the

7-26     persons or entities complained about of the status of the complaint

7-27     unless the notice would jeopardize an undercover investigation.

 8-1           (b)  The authority shall keep information about each

 8-2     complaint filed with the authority.  The information shall include:

 8-3                 (1)  the date the complaint is received;

 8-4                 (2)  the name of the complainant;

 8-5                 (3)  the subject matter of the complaint;

 8-6                 (4)  a record of all persons contacted in relation to

 8-7     the complaint;

 8-8                 (5)  a summary of the results of the review or

 8-9     investigation of the complaint; and

8-10                 (6)  for complaints for which the authority took no

8-11     action, an explanation of the reason the complaint was closed

8-12     without action.

8-13           SECTION 6.  Section 9B, Texas Public Finance Authority Act

8-14     (Article 601d, Vernon's Texas Civil Statutes), is amended by

8-15     amending Subsection (a) and adding Subsection (c) to read as

8-16     follows:

8-17           (a)  With respect to all bonds authorized to be issued by the

8-18     Texas National Guard Armory Board, Texas National Research

8-19     Laboratory Commission, Parks and Wildlife Department, the Texas

8-20     Low-Level Radioactive Waste Disposal Authority, and all

8-21     institutions of higher education authorized to issue bonds under

8-22     Chapter 55, Education Code, the authority has the exclusive

8-23     authority to act on behalf of those entities in issuing bonds on

8-24     their behalf.  In connection with those issuances and with the

8-25     issuance of refunding bonds on behalf of those entities, the

8-26     authority is subject to all rights, duties, and conditions

8-27     surrounding issuance previously applicable to the issuing entity

 9-1     under the statute authorizing the issuance.  All references in an

 9-2     authorizing statute to the entity on whose behalf the bonds are

 9-3     being issued apply equally to the authority in its capacity as

 9-4     issuer on behalf of the entity.

 9-5           (c)  Notwithstanding any other provision of this section,

 9-6     with respect to all bonds authorized to be issued by Midwestern

 9-7     State University, Stephen F.  Austin State University, or Texas

 9-8     Southern University, the authority has the exclusive authority to

 9-9     act on behalf of those institutions in issuing bonds on their

9-10     behalf.  In connection with those issuances and with the issuance

9-11     of refunding bonds on behalf of those institutions, the authority

9-12     is subject to all rights, duties, and conditions surrounding

9-13     issuance previously applicable to the issuing institution under the

9-14     statute authorizing the issuance.  All references in an authorizing

9-15     statute to the institution on whose behalf the bonds are being

9-16     issued apply equally to the authority in its capacity as issuer on

9-17     behalf of the institution.

9-18           SECTION 7.   The Texas Public Finance Authority Act (Article

9-19     601d, Vernon's Texas Civil Statutes) is amended by adding Section

9-20     9D to read as follows:

9-21           Sec. 9D.  OBLIGATION ISSUANCE ORIENTATION; INFORMATION TO AND

9-22     FROM CLIENT AGENCIES.  (a)  The authority shall develop an

9-23     orientation to the obligation issuance process for the authority's

9-24     client agencies.

9-25           (b)  The orientation must include:

9-26                 (1)  information explaining the obligation issuance

9-27     process in plain language; and

 10-1                (2)  an orientation meeting to be held before the

 10-2    issuance process begins.

 10-3          (c)  As part of the orientation, a client agency shall

 10-4    provide to the authority:

 10-5                (1)  detailed information concerning the project for

 10-6    which obligations are to be issued;

 10-7                (2)  a description of the legislative authority for the

 10-8    issuance of the obligations; and

 10-9                (3)  the names of employees of the client agency who

10-10    are designated to work with the authority in connection with the

10-11    project.

10-12          (d)  The authority shall prepare information of interest to

10-13    the authority's client agencies describing the functions of the

10-14    authority and the procedures by which complaints are filed with and

10-15    resolved by the authority.  The authority shall make the

10-16    information available to its client agencies.

10-17          (e)  The board by rule shall establish methods by which

10-18    client agencies are notified of the name, mailing address, and

10-19    telephone number of the authority for the purpose of directing

10-20    complaints to the authority.  The board may provide for that

10-21    notification on a form provided to a client agency during the

10-22    orientation.

10-23          (f)  In this section, "client agency" means a state agency on

10-24    whose behalf the board may issue obligations.

10-25          SECTION 8.   The Texas Public Finance Authority Act (Article

10-26    601d, Vernon's Texas Civil Statutes) is amended by adding Sections

10-27    26A and 26B to read as follows:

 11-1          Sec. 26A.  APPLICATION OF STATE FUNDS REFORM ACT.  All money

 11-2    paid to the authority under this Act is subject to Subchapter F,

 11-3    Chapter 404, Government Code.

 11-4          Sec. 26B.  ANNUAL FINANCIAL REPORT.  The board, authority, or

 11-5    executive director of the authority shall prepare annually a

 11-6    complete and detailed written report accounting for all funds

 11-7    received and disbursed by the authority during the preceding fiscal

 11-8    year.  The annual report must meet the reporting requirements

 11-9    applicable to financial reporting provided in the General

11-10    Appropriations Act.

11-11          SECTION 9.  Section 31, Texas Public Finance Authority Act

11-12    (Article 601d, Vernon's Texas Civil Statutes), is amended to read

11-13    as follows:

11-14          Sec. 31.  SUNSET PROVISION.  The Texas Public Finance

11-15    Authority is subject to Chapter 325, Government Code (Texas Sunset

11-16    Act).  Unless continued in existence as provided by that chapter

11-17    the authority is abolished and this article expires September 1,

11-18    2009 [1997].

11-19          SECTION 10.  Section 55.13, Education Code, is amended by

11-20    adding Subsection (c) to read as follows:

11-21          (c)  Notwithstanding any other provision of this section,

11-22    with respect to all bonds authorized to be issued by Midwestern

11-23    State University, Stephen F.  Austin State University, or Texas

11-24    Southern University, the Texas Public Finance Authority shall

11-25    exercise the authority of a board to issue bonds on behalf of those

11-26    institutions, in the manner provided by this subchapter, including

11-27    the authority to issue refunding bonds under Section 55.19.  In

 12-1    connection with the issuance of bonds under this chapter, the Texas

 12-2    Public Finance Authority has all the rights and duties granted or

 12-3    assigned to and is subject to the same conditions as a board under

 12-4    this chapter.

 12-5          SECTION 11.   Section 402.094(c), Health and Safety Code, is

 12-6    amended to read as follows:

 12-7          (c)  The authority may lease property on terms and conditions

 12-8    the board determines advantageous to the authority, but land that

 12-9    is part of a licensed disposal site may [not] be leased only from

12-10    the Texas Public Finance Authority as provided by the Texas Public

12-11    Finance Authority Act (Article 601d, Vernon's Texas Civil

12-12    Statutes).

12-13          SECTION 12.  Section 402.291, Health and Safety Code, is

12-14    amended by adding Subsection (d) to read as follows:

12-15          (d)  The Texas Public Finance Authority, acting on behalf of

12-16    the Texas Low-Level Radioactive Waste Disposal Authority, shall

12-17    issue all bonds authorized under this subchapter.  In connection

12-18    with the issuance of those bonds, the Texas Public Finance

12-19    Authority is subject to all rights, duties, and conditions provided

12-20    by this subchapter with respect to the issuance of bonds by the

12-21    Texas Low-Level Radioactive Waste Disposal Authority.

12-22          SECTION 13.   The changes in law made by this Act in the

12-23    qualifications of, and the prohibitions applying to, members of the

12-24    board of directors of the Texas Public Finance Authority do not

12-25    affect the entitlement of a member serving on the board immediately

12-26    before September 1, 1997, to continue to carry out the functions of

12-27    the board for the remainder of the member's term.  The changes in

 13-1    law apply only to a member appointed on or after September 1, 1997.

 13-2    This Act does not prohibit a person who is a member of the board on

 13-3    September 1, 1997, from being reappointed to the board if the

 13-4    person has the qualifications required for a member under the Texas

 13-5    Public Finance Authority Act (Article 601d, Vernon's Texas Civil

 13-6    Statutes), as amended by this Act.

 13-7          SECTION 14.   This Act takes effect September 1, 1997.

 13-8          SECTION 15.  The importance of this legislation and the

 13-9    crowded condition of the calendars in both houses create an

13-10    emergency and an imperative public necessity that the

13-11    constitutional rule requiring bills to be read on three several

13-12    days in each house be suspended, and this rule is hereby suspended.