HBA-TYH S.B. 1438 76(R) BILL ANALYSIS Office of House Bill AnalysisS.B. 1438 By: Duncan State Affairs 5/12/1999 Engrossed BACKGROUND AND PURPOSE Several state agencies regulate specific professions in the public interest. The agencies perform functions that are important to the interest of the state and of its people. They regulate their respective professions to ensure that persons holding professional licenses meet the highest standards of competence and professionalism. The public relies on these professionals for their expert judgment on matters ranging from the soundness of public structures to the financial solvency of a potential investment. The public has a vital interest in maintaining competence and improving the quality of the licensees of the agencies. At the same time, the controls on the licensing agencies ensure that the functions of the agencies are carried out efficiently and effectively. While the agencies may collect and remit the $200 professional fee to the state, their operations are supported by examination, licensing, and other fees paid by the professionals they regulate. However, the state controls the activities of the licensing agencies in many ways. The governor appoints the board members who run the agencies. The agencies are subject to the open meetings law and the public information law. The decisions of the agencies are procedurally and substantively guided by the Administrative Procedure Act, and ultimately the courts of the State of Texas can review and reverse their decisions. All contested cases brought by the agencies are tried before administrative law judges of the State Office of Administrative Hearings. The agencies are represented in the courts of the State of Texas by the attorney general. They are subject to sunset review and file annual reports with the governor. They are audited by the state auditor and several are subject to the Texas Internal Auditing Act. In addition, the legislature has set specific limits on the amounts that may be charged the regulated profession for the services provided by the agencies. Texas has a number of semi-independent agencies that carry out the functions of the state in other areas and in the public interest with far fewer controls than those agencies mentioned above. S.B. 1438 establishes a pilot project transferring certain professional and occupational licensing boards to self-directed, semi-independent status and makes an appropriation. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the Texas State Board of Public Accountancy, the Texas Board of Professional Engineers, the Texas Board of Architectural Examiners, the Board of Tax Professional Examiners, and the Texas Board of Professional Land Surveying in SECTION 2 (Section 14, Article 8930, V.T.C.S.) of this bill. SECTION BY SECTION ANALYSIS SECTION 1. LEGISLATIVE INTENT. Sets forth the intent of the legislature regarding licensing agencies. SECTION 2. AMENDMENT. Amends Title 132, V.T.C.S., by adding Article 8930, as follows: Art. 8930. SELF-DIRECTED SEMI-INDEPENDENT AGENCY PROJECT ACT Sec. 1. SHORT TITLE. Requires this Act to be known as the Self-Directed SemiIndependent Agency Project Act (Act). Sec. 2. AGENCY PARTICIPATION. Requires the Texas State Board of Public Accountancy, the Texas Board of Professional Engineers, the Texas Board of Architectural Examiners, the Board of Tax Professional Examiners, and the Texas Board of Professional Land Surveying to be part of the pilot project created by this Act. Sec. 3. DEFINITION. Defines "project agency." Sec. 4. PILOT PROJECT. Requires each project agency to become self-directed and semiindependent as specified in this Act. Requires each project agency to continue to be a state agency, as that term is defined in Section 2001.003(7) (Definitions), Government Code. Provides that this Act is subject to Chapter 325 (Texas Sunset Act), Government Code. Provides that this Act expires September 1, 2005, unless continued in existence as provided by that chapter. Sec. 5. GENERAL DUTIES OF ALL PROJECT AGENCIES. Requires each project agency to have the duties prescribed by Sections 6 through 9 of this Act, in addition to the duties enumerated in the enabling legislation specifically applicable to each project agency. Sec. 6. BUDGET. Requires the project agency to adopt a budget annually using generally accepted accounting principles. Requires the budget to be reviewed and approved only by the project agency's governing board notwithstanding any other provision of law, including the General Appropriations Act. Prohibits costs from being incurred by the general revenue fund. Requires a project agency to be responsible for all costs, both direct and indirect. Requires a project agency to keep financial and statistical information as necessary to disclose completely and accurately the financial condition and operation of the project agency. Requires any surplus generated by a project agency to be remitted annually to the general revenue fund. Sec. 7. AUDITS. Prohibits this Act from affecting the duty of the state auditor (auditor) to audit a project agency. Requires the auditor to enter into a contract and schedule with each project agency to conduct audits, including financial reports and performance audits. Requires costs incurred in performing such audits to be reimbursed by the project agency Sec. 8. REPORTING REQUIREMENTS. Requires a project agency to submit to the legislature and the governor by the first day of the regular session of the legislature a report describing all of the agency's activities in the previous biennium. Requires the report to include the specified items. Sec. 9. DISPOSITION OF FUNDS. Requires the project agency, if provided in a project agency's enabling legislation, to collect a professional fee of $200 and a scholarship fee of $10 from its licensees annually which are required to be remitted to the state. Requires all funds other than the $200 professional fee collected or received by a project agency to be deposited into an account in a depository institution insured by the Federal Deposit Insurance Corporation selected by the project agency. Sec. 10. GENERAL POWERS OF ALL PROJECT AGENCIES. Requires each project agency to have the powers described in Sections 11 through 14 of this Act, in addition to the powers enumerated in each project agency's enabling legislation. Sec. 11. ABILITY TO CONTRACT. Authorizes a project agency, in order to carry out and promote the objectives of this Act, to enter into contracts and do all other acts incidental to those contracts that are necessary for the administration of its affairs and for the attainment of its purpose; provided, however, that any indebtedness, liability, or obligation of the project agency is prohibited from creating the specified liability. Sec. 12. PROPERTY. Authorizes a project agency to take certain action regarding property. Sec. 13. SUITS. Requires the office of the attorney general to represent a project agency in any litigation. Sec. 14. FEES. Authorizes each project agency to set the amount of fees by statute or rule as necessary for the purpose of carrying out the functions of the project agency, subject to the limitation, if any, in the applicable enabling legislation. Sec. 15. LIABILITY. Provides that a project agency and its board members, employees, agents, and volunteers have the protection from liability provided by the agency enabling legislation, common law, and any other statute, including and not limited to Chapter 104 (State Liability for Conduct of Public Servants), Civil Practice and Remedies Code. Sec. 16. OPEN GOVERNMENT. Provides that subject to the confidentiality provisions of a project agency's enabling legislation, meetings of the project agency and records maintained by the project agency are subject to Chapters 551 (Open Meetings) and 552 (Public Information), Government Code. Sec. 17. MEMBERSHIP IN EMPLOYEE RETIREMENT SYSTEM. Provides that the employees of the project agencies are members of the Employees Retirement System of Texas under Chapter 812 (Membership), Government Code, and requires transition to independent status to have no effect on their membership. SECTION 3. AMENDMENT. Amends Section 7, Article 41a-1, V.T.C.S. (Public Accountancy Act), to require the fees, rather than fees and other money, received by the Texas Board of Public Accountancy (board) under this article to be deposited in a depository institution, rather than the state treasury, at the direction of the board. Deletes text regarding special fund and annual report. Makes a conforming change. SECTION 4. AMENDMENT. Amends Section 9(g), Article 41a-1, V.T.C.S. (Public Accountancy Act), to require the fee increase to be deposited as provided by Section 7, rather than 22A, of this article. SECTION 5. AMENDMENT. Amends Section 21D(j), Article 41a-1, V.T.C.S. (Public Accountancy Act), to make a conforming change. SECTION 6. AMENDMENT. Amends Section 22A, Article 41a-1, V.T.C.S. (Public Accountancy Act), as follows: Sec. 22A. New title: ENFORCEMENT COMMITTEES. Deletes existing Subsection (b), regarding a special fund. SECTION 7. AMENDMENT. Amends Section 28, Article 41a-1, V.T.C.S. (Public Accountancy Act), to provide that the board is abolished and this article expires September 1, 2005, rather than 2003. SECTION 8. AMENDMENT. Amends Section 2a, Article 249a, V.T.C.S. (Chapter 478, Acts of the 45th Legislature, Regular Session 1937), to provide that the Texas Board of Architectural Examiners (architectural board) is abolished and this article expires September 1, 2005, rather than 2003. SECTION 9. AMENDMENT. Amends Section 4(a), Article 249a, V.T.C.S. (Chapter 478, Acts of the 45th Legislature, Regular Session 1937), to require the fees received by the architectural board under this article, rather than fees collected or money derived under the provisions of this article, to be deposited, and authorizes it to be used only for the administration of this article. SECTION 10. AMENDMENT. Amends Section 4A, Article 249a, V.T.C.S. (Chapter 478, Acts of the 45th Legislature, Regular Session 1937), to delete text regarding appropriations, a per diem, and general revenue funds. SECTION 11. AMENDMENT. Amends Section 10(b), Article 249c, V.T.C.S. (Chapter 457, Acts of the 61st Legislature, Regular Session 1969), to make conforming changes. SECTION 12. AMENDMENT. Amends Section 6, Article 249e, V.T.C.S., to require the fees received by the architectural board under this article to be deposited, and authorizes them to be used only for the administration of this article (Regulation of practice of interior design). Deletes text regarding General Appropriations Act. SECTION 13. AMENDMENT. Amends Section 3a, Article 3271a, V.T.C.S. (The Texas Engineering Practice Act), to provide that the Texas Board of Professional Engineers (engineering board) is abolished and this article expires September 1, 2005, rather than 2003. SECTION 14. AMENDMENT. Amends Section 9, Article 3271a, V.T.C.S. (The Texas Engineering Practice Act), to require the executive director, rather than secretary, of the engineering board to receive and account for all moneys derived under the provisions of this article. Requires the fees received by the engineering board under this article to be deposited in a depository institution at the direction of the engineering board, and authorizes them to be used only for the administration of this article and other duties authorized by law. Requires the engineering board to employ an executive director, who shall receive such compensation as annually established by the engineering board. Requires the executive director, rather than engineering board, to employ such engineering, administrative, and clerical staff or other assistance as are necessary for the proper implementation, rather than performance, of this article and other duties authorized by law, and authorizes the executive director to make expenditures from the depository institution consistent with this purpose. Deletes text regarding surety bond, opinion of the engineering board, Professional Engineers' Fund, and salaries with regard to salaries paid for similar work in other departments. SECTION 15. AMENDMENT. Amends Section 5, Article 5282c, V.T.C.S. (Professional Land Surveying Practices Act), to provide that the Texas Board of Professional Land Surveying is abolished and this article expires September 1, 2005, rather than 2003. SECTION 16. AMENDMENT. Amends Sections 13 and 23B, Article 5282c, V.T.C.S. (Professional Land Surveying Practices Act), as follows: Sec. 13. RECEIPTS AND DISBURSEMENTS. Deletes references to the Land Surveying Fund (fund), the condition under which the fund will be paid out, an annual report, and subjectivity of financial transactions of the board to audit by the state auditor. Makes a conforming change. Sec. 23B. CIVIL PENALTY. Deletes existing Subsection (c), requiring a civil penalty collected under this section to be deposited in the state treasury to the credit of the General Revenue Fund. Makes a conforming change. SECTION 17. AMENDMENT. Amends Section 4(e), Article 8885, V.T.C.S. (The Property Taxation Professional Certification Act), to provide that the Board of Tax Professional Examiners is abolished and this article expires September 1, 2005, rather than 2003. SECTION 18. AMENDMENT. Amends Section 8, Article 8885, V.T.C.S. (The Property Taxation Professional Certification Act), to require the executive director of the Texas Board of Tax Professional Examiners (examiners board), rather than the examiners board, to receive and account for all money derived under the provisions of this article. Deletes text requiring the board to pay all money derived under the provisions of this article to the comptroller. Requires the examiners board, to maintain a roster of all persons registered with the examiners board, showing their names, BTPE numbers, places of employment, and classification. Makes conforming changes. SECTION 19. REPEALER. Repealer: Section 10 (Compensation and Expenses of Board Members), Article 5282c (Professional Land Surveying Practices Act), V.T.C.S. SECTION 20. APPROPRIATIONS. Provides that each project agency is appropriated an amount equal to 50 percent of that agency's appropriated amounts for fiscal year 1999 to provide a reasonable period for each project agency under Article 8930, V.T.C.S., to establish itself as semiindependent and self-directed after the conclusion of fiscal year 1999. Requires this appropriation to be repaid to the general revenue fund by the project agency as funds become available. SECTION 21. EFFECT OF TRANSITION TO INDEPENDENT STATUS. Prohibits the transfer of a project agency under Article 8930, V.T.C.S., as added by this article, to semi-independent status and the expiration of semi-independent status from acting to cancel, suspend, or prevent the specified actions. Requires each project agency to continue to have and exercise the powers and duties allocated to it in its enabling legislation, except as specifically amended by this article. Provides that title to all supplies, materials, records, equipment, books, papers, and facilities used by each respective project agency is transferred to each agency in fee simple. Prohibits this article from having any effect on property already owned by the project agencies. Authorizes each project agency, at its sole option, to continue to occupy its current premises at the rates prescribed by the General Services Commission for indirect costs and bond debt services for the duration of the pilot project. Requires examination fees collected prior to September 1, 1999, for examinations conducted after September 1, 1999, to be made available to the project agency for costs associated with conducting the examination. SECTION 22. EFFECTIVE DATE. Effective date: September 1, 1999. SECTION 23. EMERGENCY. Emergency clause.