By Gallego H.B. No. 2520
75R14167 JRD-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the conservatorship of state agencies and public junior
1-3 colleges as a result of fiscal mismanagement.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Chapter 2104, Government Code, is amended to read
1-6 as follows:
1-7 CHAPTER 2104. CONSERVATORSHIP AS A RESULT OF FISCAL
1-8 MISMANAGEMENT
1-9 SUBCHAPTER A. GENERAL PROVISIONS
1-10 Sec. 2104.001. DEFINITIONS. In this chapter:
1-11 (1) "Conservator" ["Board"] means a person appointed
1-12 by the governor to act as the conservator of a state agency or
1-13 public junior college in accordance with this chapter [the State
1-14 Conservatorship Board].
1-15 (2) "Gross fiscal mismanagement" includes:
1-16 (A) failure to keep adequate fiscal records;
1-17 (B) failure to maintain proper control over
1-18 assets;
1-19 (C) failure to discharge fiscal obligations in a
1-20 timely manner; and
1-21 (D) misuse of state funds.
1-22 (3) "State agency" means a department, commission,
1-23 board, office, or other agency, including a university system or an
2-1 institution of higher education other than a public junior college,
2-2 that:
2-3 (A) is in the executive branch of state
2-4 government;
2-5 (B) is created by statute; and
2-6 (C) does not have statutory geographical
2-7 boundaries limited to a part of the state.
2-8 (4) "State fiscal management policies" means laws or
2-9 rules relating to:
2-10 (A) fiscal recordkeeping and reporting;
2-11 (B) use or control of state property;
2-12 (C) timely discharge of fiscal obligations; or
2-13 (D) use of state funds.
2-14 Sec. 2104.002. APPLICABILITY OF CHAPTER. This chapter does
2-15 not apply to an agency that is under the direction of an elected
2-16 officer, board, or commission.
2-17 (Sections 2104.003-2104.010 reserved for expansion)
2-18 SUBCHAPTER B. CONSERVATORS [STATE CONSERVATORSHIP BOARD]
2-19 Sec. 2104.011. APPOINTMENT OF CONSERVATOR [BOARD
2-20 COMPOSITION]; TERMS. (a) A conservator [The board] is [composed
2-21 of three members] appointed by the governor with the advice and
2-22 consent of the senate.
2-23 (b) To be eligible for appointment as a conservator [to the
2-24 board], a person must be qualified, by experience or education, in
2-25 administration or fiscal management.
3-1 (c) A public officer is eligible to serve as a conservator
3-2 [on the board].
3-3 (d) A conservator's term expires on the earlier of the date
3-4 the conservatorship for which the conservator is appointed
3-5 dissolves or the second anniversary of the date of the
3-6 conservator's appointment. A conservator whose term expires before
3-7 the conservatorship is dissolved may be reappointed to continue the
3-8 conservatorship. [Members serve staggered six-year terms with the
3-9 term of one member expiring on January 31 of each odd-numbered
3-10 year.]
3-11 Sec. 2104.012. COMPENSATION OF CONSERVATOR [PRESIDING
3-12 OFFICER; MEETINGS]. (a) A conservator appointed to act as the
3-13 conservator of a state agency or public junior college under this
3-14 chapter is entitled to receive a salary for performing those duties
3-15 that is equal to the salary of the chief administrative officer of
3-16 the state agency or public junior college under conservatorship.
3-17 [The governor shall designate a board member to serve as presiding
3-18 officer for a two-year period expiring on January 31 of
3-19 odd-numbered years.]
3-20 (b) The state agency or public junior college under
3-21 conservatorship shall pay the salary of the conservator from money
3-22 appropriated or otherwise available to the state agency or public
3-23 junior college, except to the extent that money to pay the salary
3-24 is specifically appropriated or made available through the budget
3-25 execution process for that purpose. [The board shall meet at the
4-1 call of the presiding officer or as provided by board rule.]
4-2 Sec. 2104.013. [COMPENSATION;] EXPENSES OF CONSERVATOR. (a)
4-3 [A board member may not receive compensation but is entitled to
4-4 reimbursement for actual and necessary expenses incurred in the
4-5 performance of official duties.] A limit provided by appropriation
4-6 on the amount of reimbursement that state officers or members of
4-7 state boards and commissions may generally receive does not apply
4-8 to reimbursement of the reasonable and necessary expenses incurred
4-9 by a conservator in the course of performing duties under this
4-10 chapter [members of the State Conservatorship Board].
4-11 (b) The reasonable and necessary expenses incurred by a
4-12 conservator in the course of performing duties under this chapter
4-13 [If funds for the purpose of this chapter are not appropriated to
4-14 the board, the expenses of the board] shall be paid from funds
4-15 appropriated or otherwise available to the agency or public junior
4-16 college under conservatorship, except to the extent that money to
4-17 pay those expenses is specifically appropriated or made available
4-18 through the budget execution process for that purpose.
4-19 Sec. 2104.014. RULES. A conservator [The board] may adopt
4-20 and enforce rules necessary to administer the conservatorship for
4-21 which the conservator is appointed under this chapter. A
4-22 conservator may adopt initial rules on an emergency basis for the
4-23 period prescribed by Section 2001.034 if the conservator determines
4-24 that rules with immediate effect are necessary to ameliorate the
4-25 effect of the gross fiscal mismanagement.
5-1 Sec. 2104.015. ADMINISTRATIVE SERVICES. (a) The governor
5-2 shall provide a conservator [the board] with administrative
5-3 services.
5-4 (b) If necessary, the governor may use appropriations made
5-5 under Section 403.075 to provide the administrative services.
5-6 (Sections 2104.016-2104.020 reserved for expansion)
5-7 SUBCHAPTER C. CONSERVATORSHIP OF STATE
5-8 AGENCIES
5-9 Sec. 2104.021. MISMANAGEMENT FINDING; RECOMMENDATION;
5-10 CONSERVATORSHIP ORDER. (a) The legislative audit committee, on
5-11 [shall notify the governor of the committee's] finding that a
5-12 condition of gross fiscal mismanagement exists in a state agency,
5-13 may:
5-14 (1) notify the governor of the finding and recommend
5-15 that the governor appoint a conservator for the agency; or
5-16 (2) recommend to the agency that it agree within a
5-17 specified time to enter into a rehabilitation plan in accordance
5-18 with Section 2104.0215.
5-19 (b) After receipt of a [the] notice under Subsection (a),
5-20 the governor by proclamation may appoint a conservator, in
5-21 accordance with the recommendation, [order the board] to act as
5-22 conservator of the agency.
5-23 Sec. 2104.0215. REHABILITATION PLAN IN LIEU OF
5-24 CONSERVATORSHIP. (a) A state agency that agrees to enter into a
5-25 rehabilitation plan shall engage the services of an independent
6-1 management consulting team approved by the governor and by the
6-2 presiding officer and assistant presiding officer of the
6-3 legislative audit committee. The independent management consulting
6-4 team may include the state auditor, one or more appropriate state
6-5 agencies, and private consultants.
6-6 (b) The state agency entering into the rehabilitation plan
6-7 shall pay the costs of the independent management consulting team's
6-8 services from money appropriated or otherwise available to the
6-9 agency, except to the extent that money to pay the costs is
6-10 specifically appropriated or made available through the budget
6-11 execution process for that purpose.
6-12 (c) The independent management consulting team shall assist
6-13 the state agency in developing its rehabilitation plan. The
6-14 rehabilitation plan must include specific performance goals and the
6-15 period in which the goals must be achieved. The plan must be
6-16 approved by the governing body of the agency and by the governor
6-17 and the legislative audit committee.
6-18 (d) If the state agency does not adopt the rehabilitation
6-19 plan within a reasonable time or if the state auditor determines
6-20 and informs the governor that the state agency is not making
6-21 sufficient progress in implementing its rehabilitation plan, the
6-22 governor may appoint a conservator for the agency under Section
6-23 2104.021.
6-24 Sec. 2104.022. ASSUMPTION OF POLICY FUNCTIONS. The
6-25 conservator appointed by [board, acting on an order of] the
7-1 governor under Section 2104.021[,] shall assume all the powers and
7-2 duties of the officers responsible for policy direction of the
7-3 state agency that is the subject of [to] the proclamation [order],
7-4 and those officers may not act unless authorized by the conservator
7-5 [board].
7-6 Sec. 2104.023. [BOARD] CONSERVATORSHIP POWERS AND DUTIES.
7-7 (a) The [board, acting as] conservator of a state agency under
7-8 this subchapter[,] shall ensure that the agency complies with state
7-9 fiscal management policies.
7-10 (b) The [board, acting as] conservator of a state agency
7-11 under this subchapter, may:
7-12 (1) terminate the employment of any employee whose
7-13 conduct the conservator [board] determines contributed to the
7-14 condition that caused the conservatorship;
7-15 (2) employ personnel for the agency;
7-16 (3) change the agency's organization or structure as
7-17 necessary to alleviate the conditions that caused the
7-18 conservatorship; and
7-19 (4) contract with persons for management or
7-20 administrative services necessary to effect the conservatorship.
7-21 (c) The conservator [board] may delegate any part of the
7-22 conservator's [its] powers or duties as conservator other than
7-23 [its] rulemaking authority to a person with whom the conservator
7-24 [it] contracts under Subsection (b)(4).
7-25 Sec. 2104.024. REPORT. (a) The conservator [board] shall
8-1 report on a conservatorship under this subchapter to the governor
8-2 and the legislative audit committee not later than the 60th day
8-3 after the date the governor orders the conservatorship and at the
8-4 end of each subsequent 60-day period until the conservatorship is
8-5 dissolved.
8-6 (b) The report must include a description of the measures
8-7 taken to ensure that the state agency complies with state fiscal
8-8 management policies and an estimate of the progress the conservator
8-9 [board] has made in attaining that goal.
8-10 Sec. 2104.025. DURATION OF CONSERVATORSHIP. A
8-11 conservatorship under this subchapter continues until the earlier
8-12 of:
8-13 (1) the governor's issuing of a proclamation declaring
8-14 that the condition of gross fiscal mismanagement in the state
8-15 agency no longer exists and that the conservatorship is dissolved;
8-16 or
8-17 (2) the legislative audit committee's finding and
8-18 certifying to the governor that the condition of gross fiscal
8-19 mismanagement in the agency no longer exists, in which case the
8-20 conservatorship is dissolved.
8-21 (Sections 2104.026-2104.030 reserved for expansion)
8-22 SUBCHAPTER D. CONSERVATORSHIP OF PUBLIC JUNIOR COLLEGES
8-23 Sec. 2104.031. MISMANAGEMENT FINDING; CONSERVATORSHIP ORDER.
8-24 (a) On the governor's request, the Texas Higher Education
8-25 Coordinating Board with the advice and assistance of the state
9-1 auditor shall determine if a condition of gross fiscal
9-2 mismanagement exists at a public junior college.
9-3 (b) If the coordinating board finds a condition of gross
9-4 fiscal mismanagement of a public junior college, the governor by
9-5 proclamation may appoint a [order the board to act as] conservator
9-6 for [of] the college.
9-7 (c) Except as otherwise provided by this subchapter, a
9-8 conservator [the board] shall act as conservator of a public
9-9 junior college in the manner provided by this chapter for
9-10 conservatorship of state agencies by a conservator [the board].
9-11 Sec. 2104.032. REPORTS. A conservator [The board] shall
9-12 file the reports relating to public junior colleges required by
9-13 Section 2104.024 with the Texas Higher Education Coordinating
9-14 Board.
9-15 Sec. 2104.033. DURATION OF CONSERVATORSHIP. A
9-16 conservatorship of a public junior college under this subchapter
9-17 continues until the earlier of:
9-18 (1) the governor's issuing of a proclamation declaring
9-19 that the condition of gross fiscal mismanagement no longer exists
9-20 and that the conservatorship is dissolved; or
9-21 (2) the Texas Higher Education Coordinating Board's
9-22 finding and certifying to the governor that the condition of gross
9-23 fiscal mismanagement no longer exists, in which case the
9-24 conservatorship is dissolved.
9-25 SECTION 2. (a) The State Conservatorship Board as
10-1 constituted on the effective date of this Act is abolished on the
10-2 effective date of this Act unless on that date a state agency or
10-3 public junior college is under the conservatorship of the board. If
10-4 on the effective date of this Act a state agency or public junior
10-5 college is under the conservatorship of the board, the board
10-6 continues in existence under the law in effect immediately before
10-7 the effective date of this Act, and the prior law is continued in
10-8 effect for that purpose. The board is abolished on the date the
10-9 conservatorship is dissolved.
10-10 (b) The changes in law made by this Act do not apply to an
10-11 ongoing conservatorship of a state agency or public junior college
10-12 on the effective date of this Act. A conservatorship that is
10-13 ongoing on the effective date of this Act is governed by the law in
10-14 effect immediately before the effective date of this Act until the
10-15 conservatorship is dissolved, and the prior law is continued in
10-16 effect for that purpose.
10-17 SECTION 3. The importance of this legislation and the
10-18 crowded condition of the calendars in both houses create an
10-19 emergency and an imperative public necessity that the
10-20 constitutional rule requiring bills to be read on three several
10-21 days in each house be suspended, and this rule is hereby suspended,
10-22 and that this Act take effect and be in force from and after its
10-23 passage, and it is so enacted.