1-1 By: Gallego (Senate Sponsor - Moncrief) H.B. No. 81
1-2 (In the Senate - Received from the House April 19, 1999;
1-3 April 20, 1999, read first time and referred to Committee on
1-4 Finance; May 5, 1999, reported favorably by the following vote:
1-5 Yeas 10, Nays 0; May 5, 1999, sent to printer.)
1-6 A BILL TO BE ENTITLED
1-7 AN ACT
1-8 relating to the conservatorship of state agencies and public junior
1-9 colleges as a result of fiscal mismanagement.
1-10 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-11 SECTION 1. Chapter 2104, Government Code, is amended to read
1-12 as follows:
1-13 CHAPTER 2104. CONSERVATORSHIP AS A RESULT OF FISCAL
1-14 MISMANAGEMENT
1-15 SUBCHAPTER A. GENERAL PROVISIONS
1-16 Sec. 2104.001. DEFINITIONS. In this chapter:
1-17 (1) "Conservator" ["Board"] means a person appointed
1-18 by the governor to act as the conservator of a state agency or
1-19 public junior college in accordance with this chapter [the State
1-20 Conservatorship Board].
1-21 (2) "Gross fiscal mismanagement" includes:
1-22 (A) failure to keep adequate fiscal records;
1-23 (B) failure to maintain proper control over
1-24 assets;
1-25 (C) failure to discharge fiscal obligations in a
1-26 timely manner; and
1-27 (D) misuse of state funds.
1-28 (3) "State agency" means a department, commission,
1-29 board, office, or other agency, including a university system or an
1-30 institution of higher education other than a public junior college,
1-31 that:
1-32 (A) is in the executive branch of state
1-33 government;
1-34 (B) is created by statute; and
1-35 (C) does not have statutory geographical
1-36 boundaries limited to a part of the state.
1-37 (4) "State fiscal management policies" means laws or
1-38 rules relating to:
1-39 (A) fiscal recordkeeping and reporting;
1-40 (B) use or control of state property;
1-41 (C) timely discharge of fiscal obligations; or
1-42 (D) use of state funds.
1-43 Sec. 2104.002. APPLICABILITY OF CHAPTER. This chapter does
1-44 not apply to an agency that is under the direction of an elected
1-45 officer, board, or commission.
1-46 (Sections 2104.003-2104.010 reserved for expansion)
1-47 SUBCHAPTER B. CONSERVATORS [STATE CONSERVATORSHIP BOARD]
1-48 Sec. 2104.011. APPOINTMENT OF CONSERVATOR [BOARD
1-49 COMPOSITION]; TERMS. (a) A conservator [The board] is [composed
1-50 of three members] appointed by the governor with the advice and
1-51 consent of the senate.
1-52 (b) To be eligible for appointment as a conservator [to the
1-53 board], a person must be qualified, by experience or education, in
1-54 administration or fiscal management.
1-55 (c) A public officer is eligible to serve as a conservator
1-56 [on the board].
1-57 (d) A conservator's term expires on the earlier of the date
1-58 the conservatorship for which the conservator is appointed
1-59 dissolves or the second anniversary of the date of the
1-60 conservator's appointment. A conservator whose term expires before
1-61 the conservatorship is dissolved may be reappointed to continue the
1-62 conservatorship. [Members serve staggered six-year terms with the
1-63 term of one member expiring on January 31 of each odd-numbered
1-64 year.]
2-1 Sec. 2104.012. COMPENSATION OF CONSERVATOR [PRESIDING
2-2 OFFICER; MEETINGS]. (a) A conservator appointed to act as the
2-3 conservator of a state agency or public junior college under this
2-4 chapter is entitled to receive a salary for performing those duties
2-5 that is equal to the salary of the chief administrative officer of
2-6 the state agency or public junior college under conservatorship.
2-7 [The governor shall designate a board member to serve as presiding
2-8 officer for a two-year period expiring on January 31 of
2-9 odd-numbered years.]
2-10 (b) The state agency or public junior college under
2-11 conservatorship shall pay the salary of the conservator from money
2-12 appropriated or otherwise available to the state agency or public
2-13 junior college, except to the extent that money to pay the salary
2-14 is specifically appropriated or made available through the budget
2-15 execution process for that purpose. [The board shall meet at the
2-16 call of the presiding officer or as provided by board rule.]
2-17 Sec. 2104.013. [COMPENSATION;] EXPENSES OF CONSERVATOR. (a)
2-18 [A board member may not receive compensation but is entitled to
2-19 reimbursement for actual and necessary expenses incurred in the
2-20 performance of official duties.] A limit provided by appropriation
2-21 on the amount of reimbursement that state officers or members of
2-22 state boards and commissions may generally receive does not apply
2-23 to reimbursement of the reasonable and necessary expenses incurred
2-24 by a conservator in the course of performing duties under this
2-25 chapter [members of the State Conservatorship Board].
2-26 (b) The reasonable and necessary expenses incurred by a
2-27 conservator in the course of performing duties under this chapter
2-28 [If funds for the purpose of this chapter are not appropriated to
2-29 the board, the expenses of the board] shall be paid from funds
2-30 appropriated or otherwise available to the agency or public junior
2-31 college under conservatorship, except to the extent that money to
2-32 pay those expenses is specifically appropriated or made available
2-33 through the budget execution process for that purpose.
2-34 Sec. 2104.014. RULES. A conservator [The board] may adopt
2-35 and enforce rules necessary to administer the conservatorship for
2-36 which the conservator is appointed under this chapter. A
2-37 conservator may adopt initial rules on an emergency basis for the
2-38 period prescribed by Section 2001.034 if the conservator determines
2-39 that rules with immediate effect are necessary to ameliorate the
2-40 effect of the gross fiscal mismanagement.
2-41 Sec. 2104.015. ADMINISTRATIVE SERVICES. (a) The governor
2-42 shall provide a conservator [the board] with administrative
2-43 services.
2-44 (b) If necessary, the governor may use appropriations made
2-45 under Section 403.075 to provide the administrative services.
2-46 (Sections 2104.016-2104.020 reserved for expansion)
2-47 SUBCHAPTER C. CONSERVATORSHIP OF STATE
2-48 AGENCIES
2-49 Sec. 2104.021. MISMANAGEMENT FINDING; RECOMMENDATION;
2-50 CONSERVATORSHIP ORDER. (a) The legislative audit committee, on
2-51 [shall notify the governor of the committee's] finding that a
2-52 condition of gross fiscal mismanagement exists in a state agency,
2-53 may:
2-54 (1) notify the governor of the finding and recommend
2-55 that the governor appoint a conservator for the agency; or
2-56 (2) recommend to the agency that it agree within a
2-57 specified time to enter into a rehabilitation plan in accordance
2-58 with Section 2104.0215.
2-59 (b) After receipt of a [the] notice under Subsection (a),
2-60 the governor by proclamation may appoint a conservator, in
2-61 accordance with the recommendation, [order the board] to act as
2-62 conservator of the agency.
2-63 Sec. 2104.0215. REHABILITATION PLAN IN LIEU OF
2-64 CONSERVATORSHIP. (a) A state agency that agrees to enter into a
2-65 rehabilitation plan shall engage the services of an independent
2-66 management consulting team approved by the governor and by the
2-67 presiding officer and assistant presiding officer of the
2-68 legislative audit committee. The independent management consulting
2-69 team may include the state auditor, one or more appropriate state
3-1 agencies, and private consultants.
3-2 (b) The state agency entering into the rehabilitation plan
3-3 shall pay the costs of the independent management consulting team's
3-4 services from money appropriated or otherwise available to the
3-5 agency, except to the extent that money to pay the costs is
3-6 specifically appropriated or made available through the budget
3-7 execution process for that purpose.
3-8 (c) The independent management consulting team shall assist
3-9 the state agency in developing its rehabilitation plan. The
3-10 rehabilitation plan must include specific performance goals and the
3-11 period in which the goals must be achieved. The plan must be
3-12 approved by the governing body of the agency and by the governor
3-13 and the legislative audit committee.
3-14 (d) If the state agency does not adopt the rehabilitation
3-15 plan within a reasonable time or if the state auditor determines
3-16 and informs the governor that the state agency is not making
3-17 sufficient progress in implementing its rehabilitation plan, the
3-18 governor may appoint a conservator for the agency under Section
3-19 2104.021.
3-20 Sec. 2104.022. ASSUMPTION OF POLICY FUNCTIONS. The
3-21 conservator appointed by [board, acting on an order of] the
3-22 governor under Section 2104.021[,] shall assume all the powers and
3-23 duties of the officers responsible for policy direction of the
3-24 state agency that is the subject of [to] the proclamation [order],
3-25 and those officers may not act unless authorized by the conservator
3-26 [board].
3-27 Sec. 2104.023. [BOARD] CONSERVATORSHIP POWERS AND DUTIES.
3-28 (a) The [board, acting as] conservator of a state agency under
3-29 this subchapter[,] shall ensure that the agency complies with state
3-30 fiscal management policies.
3-31 (b) The [board, acting as] conservator of a state agency
3-32 under this subchapter, may:
3-33 (1) terminate the employment of any employee whose
3-34 conduct the conservator [board] determines contributed to the
3-35 condition that caused the conservatorship;
3-36 (2) employ personnel for the agency;
3-37 (3) change the agency's organization or structure as
3-38 necessary to alleviate the conditions that caused the
3-39 conservatorship; and
3-40 (4) contract with persons for management or
3-41 administrative services necessary to effect the conservatorship.
3-42 (c) The conservator [board] may delegate any part of the
3-43 conservator's [its] powers or duties as conservator other than
3-44 [its] rulemaking authority to a person with whom the conservator
3-45 [it] contracts under Subsection (b)(4).
3-46 Sec. 2104.024. REPORT. (a) The conservator [board] shall
3-47 report on a conservatorship under this subchapter to the governor
3-48 and the legislative audit committee not later than the 60th day
3-49 after the date the governor orders the conservatorship and at the
3-50 end of each subsequent 60-day period until the conservatorship is
3-51 dissolved.
3-52 (b) The report must include a description of the measures
3-53 taken to ensure that the state agency complies with state fiscal
3-54 management policies and an estimate of the progress the conservator
3-55 [board] has made in attaining that goal.
3-56 Sec. 2104.025. DURATION OF CONSERVATORSHIP. A
3-57 conservatorship under this subchapter continues until the earlier
3-58 of:
3-59 (1) the governor's issuing of a proclamation declaring
3-60 that the condition of gross fiscal mismanagement in the state
3-61 agency no longer exists and that the conservatorship is dissolved;
3-62 or
3-63 (2) the legislative audit committee's finding and
3-64 certifying to the governor that the condition of gross fiscal
3-65 mismanagement in the agency no longer exists, in which case the
3-66 conservatorship is dissolved.
3-67 (Sections 2104.026-2104.030 reserved for expansion)
3-68 SUBCHAPTER D. CONSERVATORSHIP OF PUBLIC JUNIOR COLLEGES
3-69 Sec. 2104.031. MISMANAGEMENT FINDING; CONSERVATORSHIP ORDER.
4-1 (a) On the governor's request, the Texas Higher Education
4-2 Coordinating Board with the advice and assistance of the state
4-3 auditor shall determine if a condition of gross fiscal
4-4 mismanagement exists at a public junior college.
4-5 (b) If the coordinating board finds a condition of gross
4-6 fiscal mismanagement of a public junior college, the governor by
4-7 proclamation may appoint a [order the board to act as] conservator
4-8 for [of] the college.
4-9 (c) Except as otherwise provided by this subchapter, a
4-10 conservator [the board] shall act as conservator of a public
4-11 junior college in the manner provided by this chapter for
4-12 conservatorship of state agencies by a conservator [the board].
4-13 Sec. 2104.032. REPORTS. A conservator [The board] shall
4-14 file the reports relating to public junior colleges required by
4-15 Section 2104.024 with the Texas Higher Education Coordinating
4-16 Board.
4-17 Sec. 2104.033. DURATION OF CONSERVATORSHIP. A
4-18 conservatorship of a public junior college under this subchapter
4-19 continues until the earlier of:
4-20 (1) the governor's issuing of a proclamation declaring
4-21 that the condition of gross fiscal mismanagement no longer exists
4-22 and that the conservatorship is dissolved; or
4-23 (2) the Texas Higher Education Coordinating Board's
4-24 finding and certifying to the governor that the condition of gross
4-25 fiscal mismanagement no longer exists, in which case the
4-26 conservatorship is dissolved.
4-27 SECTION 2. (a) The State Conservatorship Board as
4-28 constituted on the effective date of this Act is abolished on the
4-29 effective date of this Act unless on that date a state agency or
4-30 public junior college is under the conservatorship of the board. If
4-31 on the effective date of this Act a state agency or public junior
4-32 college is under the conservatorship of the board, the board
4-33 continues in existence under the law in effect immediately before
4-34 the effective date of this Act, and the prior law is continued in
4-35 effect for that purpose. The board is abolished on the date the
4-36 conservatorship is dissolved.
4-37 (b) The changes in law made by this Act do not apply to an
4-38 ongoing conservatorship of a state agency or public junior college
4-39 on the effective date of this Act. A conservatorship that is
4-40 ongoing on the effective date of this Act is governed by the law in
4-41 effect immediately before the effective date of this Act until the
4-42 conservatorship is dissolved, and the prior law is continued in
4-43 effect for that purpose.
4-44 SECTION 3. The importance of this legislation and the
4-45 crowded condition of the calendars in both houses create an
4-46 emergency and an imperative public necessity that the
4-47 constitutional rule requiring bills to be read on three several
4-48 days in each house be suspended, and this rule is hereby suspended,
4-49 and that this Act take effect and be in force from and after its
4-50 passage, and it is so enacted.
4-51 * * * * *