HBA-JLV H.B. 2914 77(R)BILL ANALYSIS


Office of House Bill AnalysisH.B. 2914
By: Bonnen
Ways & Means
8/9/2001
Enrolled



BACKGROUND AND PURPOSE 

Each legislative session, the comptroller of public accounts (comptroller)
makes recommendations to the legislature to streamline and enhance the
agency's administration of the state's fiscal matters.  House Bill 2914
makes technical and policy changes to several statutes relating to the
state's fiscal management and the comptroller's powers and duties to
administer those laws. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that rulemaking
authority is expressly delegated to the state energy conservation office in
SECTION 18 (Section 447.002, Government Code), to the Product Development
and Small Business Incubator Board in SECTION 19 (Sections 403.410 and
403.413), to the comptroller of public accounts in SECTION 24 (Section
659.308, Government Code), SECTION 42 (Section 2113.205, Government Code),
SECTION 54 (Section 2251.026, Government Code), SECTION 57 (Section
2252.903, Government Code), and in SECTION 60 (Section, 2305.011,
Government Code), and to the Texas Natural Resource Conservation Commission
in SECTION 78 (Section 382.051865, Health and Safety Code) of this bill. 

ANALYSIS

House Bill 2914 amends the Business & Commerce, Education, Finance,
Government, Health and Safety, Tax, and Utilities codes to make technical
and policy changes relating to the state's fiscal management and the
comptroller of public account's (comptroller) powers and duties to
administer those laws. 

The bill amends the Business & Commerce Code to provide that any
requirement of the Department of Information Resources that generally
applies to one or more state agencies using electronic records or
electronic signatures is considered to be a recommendation to the
comptroller concerning the electronic records or electronic signatures used
by the comptroller.  The bill authorizes the comptroller to adopt or
decline to adopt the recommendation (Sec. 43.020). 

The bill amends the Education Code to provide that the comptroller is no
longer prohibited from issuing a warrant or initiating an electronic funds
transfer to a person properly reported to the comptroller or to the
person's assignee, the person's estate, the distributees of the person's
estate, or the person's surviving spouse if the Texas Guaranteed Student
Loan Corporation consents to the issuance of the warrant or initiation of
the transfer (Sec. 57.48).   

The bill amends the Finance Code to provide that individuals appointed to
official committees are entitled to reimbursement for reasonable and
necessary expenses incidental to travel that occurred in connection with
the performance of official duties (Sec. 15.407). 

The bill amends the Government Code to prohibit a statute from being
construed as a waiver of sovereign immunity unless the waiver is effected
by clear and unambiguous language in order to preserve the legislature's
intent (Sec. 311.034). The bill authorizes the comptroller to establish a
procedure for a person to use a digital signature to authenticate a
document, a communication, or data submitted to the comptroller  if the
digital signature is unique to the person using it, capable of independent
verification, under the sole control of the person using it, and
transmitted in a manner that makes it infeasible to change the signature,
document, communication, or data without invalidating the signature.  The
bill provides that the electronic approval of a voucher is governed by
these provisions if the comptroller has established a procedure for the
person approving the voucher or is governed by provisions governing
expenditures by state agencies (Sec. 403.027). 

The bill sets forth provisions relating to the comptroller's authority
regarding intellectual property and requires the comptroller to establish
intellectual property policies for the comptroller's office (Sec. 403.030). 

The bill authorizes a state agency to consent to the comptroller's issuance
of a warrant or initiation of a direct deposit to a person that the agency
had previously reported to the comptroller as having an indebtedness to the
state or a tax delinquency.  If the agency does not consent, the
comptroller  is still prohibited from issuing the warrant or initiating the
direct deposit (Sec. 403.055).   

The bill sets forth provisions relating to state financing of the
development and production of Texas biotechnological and biomedical
products and small businesses and provides for the issuance of bonds. The
bill establishes the Product Development and Small Business Incubator Board
(board) in the comptroller's office and requires the board to administer
the product development and small business incubator programs (programs)
and their respective funds (Sec. 403.402). The bill sets forth provisions
for the appointment, terms of office, removal, and training of the members
of the board, which includes the comptroller of public accounts
(comptroller) (Secs. 403.403-404.405). The bill sets forth provisions
regarding the administration, powers, and duties of the board (Secs.
403.406-403.409).  

The bill provides the financing requirements to fund the programs and
authorizes the board to adopt rules, policies, and procedures necessary or
reasonable to implement these provisions (Secs. 403.410-403.412).  

The bill provides that financing may be made only for a product or small
business approved by the board. In determining eligible products and small
businesses, the board is required to give special preference to products or
businesses in the areas of biotechnology and biomedicine that have the
greatest likelihood of commercial success, job creation, and job retention
in this state. The bill requires the board to give further preference in
providing financing to projects or businesses that are: 
grantees under the small business innovation research program; companies
formed in this state to commercialize research funded at least in part with
state funds;  companies formed in this state and receiving assistance from
designated state small business development centers; or applicants who are
residents of this state doing business in this state and performing
financed activities predominantly in this state.  

The bill also sets forth provisions regarding the application process to
receive financing, confidentiality of information produced to receive
financing, and the coordination of the programs (Secs. 403.413-404.416).  

The bill provides that the warrant number of an outstanding warrant is
excepted from public disclosure requirements if the warrant is issued by
the comptroller.  The bill authorizes the person who issues a warrant to
disclose the warrant number of the warrant to a person other than the
comptroller only if the comptroller has informed the person that the
warrant is not an outstanding warrant or if the comptroller has authorized
or required the disclosure (Sec. 404.058). 

The bill authorizes the Texas treasury safekeeping trust company (trust
company) to hire employees, to fix their compensation and prescribe their
duties, or to contract with the comptroller's office for staff support. The
trust company is required to develop a fee schedule in the amount necessary
to recover costs of service and to retain adequate reserves to support the
operations of the trust company.  The bill provides that the trust  company
is exempt from other state law regulating or limiting state purchasing or a
purchasing decision if the trust company determines that the purchase or
decision relates to the fiduciary duties of the  trust company.  The bill
requires the trust company to make all purchases of goods and services
using purchasing methods that ensure the best value to the trust company
and its participants.  In determining the best value, the trust company is
authorized to consider the best value standards applicable to state
agencies. The bill requires the trust company to develop a plan of
operation that includes procedures and standards for the purchases of goods
and services using best value methods (Sec. 404.103).   

The bill authorizes the trust company to contract with a certified public
accountant to conduct an independent audit of the trust company (Sec.
404.104).  The bill requires the trust company to hold capital stock and
reserve balances outside the treasury for participation in a depository
trust company.  The bill prohibits the stock of the trust company from
exceeding $1 million (Sec. 404.105).  The bill authorizes the trust company
to hold reserve balances or securities as required by the Federal Reserve
System or as required for participation in a depository trust company (Sec.
404.106).  The bill requires certain agencies and local political
subdivisions to pay established fees on the trust company's fee schedule
(Sec. 404.107). 

The comptroller is authorized to appoint an investment advisory board
(advisory board) to advise the comptroller with respect to managing assets
held by the trust company.  The bill sets forth the composition of the
advisory board, removal of certain members, requirements for appointment as
an advisory board member, and restrictions on advisory board appointment,
membership, and employment (Secs. 404.108 and 404.110).  The bill provides
for the administration, powers, and duties of the advisory board (Secs.
404.112-404.116). 

The bill provides that the energy management center is established as the
state energy conservation office (office) under the direction and control
of the comptroller and sets forth provisions authorizing the office to
establish procedures and adopt rules relating to energy conservation.  The
bill requires the office to provide assistance to a state agency in
implementing energy conservation measures.  The bill requires a state
agency or institution of higher education (institution) to present a plan
to the office and use the plan in preparing construction and major
renovation plans (Secs. 447.001-447.011).  

Each August, the comptroller is required to estimate the amount to be
transferred to the foundation school fund on or before September 15 and to
transfer the estimated amount to the foundation school fund before August
installment payments are made (Sec. 466.355). 

The bill decreases, from five to three, the number of years of lifetime
service credit  that a state employee must accrue in order to receive
longevity pay to be included in the employee's monthly compensation (Sec.
659.043).  The bill sets forth provisions authorizing the Texas Youth
Commission (TYC) to pay a TYC employee certain amounts of longevity pay and
hazardous duty pay (Sec. 659.044).  The bill provides that the amount of an
employee's lifetime service credit does not include the period served in a
hazardous duty position if the employee is entitled to receive hazardous
duty pay or is receiving the maximum amount of hazardous duty pay that the
commission may pay to the employee (Sec. 659.046).  The bill sets forth
provisions relating to hazardous duty pay in the Government Code (Sec.
659.301-659.308).  The bill removes provisions prohibiting an employee from
advancing to a step number in a new salary group higher than the step
number rate held before the reallocation or reclassification if the
employee's salary group is divided into steps by the General Appropriations
Act (Sec. 659.254).  The bill prohibits a state employee from being
temporarily reassigned to a position classified in a salary group with a
lower minimum salary rate (Sec. 659.260).  The bill requires each state
agency to adopt policies to ensure that an employee's performance
expectations are linked to the goals in the agency's strategic plan (Sec.
659.2551).  The bill sets forth provisions establishing a task force to
evaluate employee compensation systems (Sec. 659.2552). 

The bill provides that an individual is entitled to reimbursement for
certain expenses while performing the duties of the individual's office or
employment if the individual is a member of the Texas Natural Resource
Conservation Commission, the Texas Workforce Commission, the Public Utility
Commission of Texas, the Board of Pardons and Paroles, or the Sabine River
Compact Administration, or a full-time member of a board and receives a
salary from the state for service on that board (Sec. 660.203). 

The bill sets forth provisions relating to recovering excess compensation
paid to a state officer or employee  (Sec. 666.001-666.007).  The bill sets
forth provisions authorizing a state agency to recover the amount of a
state employee's indebtedness by reducing future gross pay.  The bill sets
forth provisions authorizing the comptroller to recover the amount of a
state employee's indebtedness to a state agency (Sec. 666.002).  The bill
sets forth provisions to provide when an indebtedness is incurred.  The
bill provides that the provisions neither authorizes nor prohibits a state
employee  or the employee's successor from assigning the employee's or
successor's right or eligibility to receive compensation (Sec. 666.006).  

The bill provides that a state agency's approval of a voucher includes the
agency's approval of any interest that must be paid at the same time the
principal amount is paid to a vendor (Sec. 2103.004). 


The bill sets forth provisions relating to payments by a state agency to
debtors or delinquents.  The bill authorizes a state agency to issue a
payment to a person that is indebted to the state or has a tax delinquency
and is also authorized to issue any part of that payment to the person's
estate, the distributees of the person's estate, or the person's surviving
spouse.  The bill provides that a state agency is not prohibited from
making a payment if each state agency that properly reported the person to
the comptroller consents to the payment (Sec. 2107.008). 

The bill authorizes a state agency to use money appropriated for a
particular fiscal year to pay expenses related to conducting a seminar or
conference that will occur partly or entirely during a different fiscal
year, if it is cost-effective to do so.  The bill authorizes a state agency
to use money appropriated for a particular fiscal year to pay the entire
cost or amount of a periodical subscription, a maintenance contract, a post
office box rental, insurance, or a surety or honesty bond.  The bill also
authorizes a state agency to use money appropriated for a particular fiscal
year to pay for a utility service provided during that fiscal year and
September of the next fiscal year.  The bill authorizes the comptroller to
establish procedures and adopt rules to administer these provisions (Sec.
2113.205). 

The bill deletes provisions prohibiting a state agency from accepting a bid
or awarding a contract to certain out-of-state individuals and business
entities unless they hold a sales and use tax permit issued by the
comptroller or certify that they do not sell taxable property or services
(Sec. 2155.004). 

The bill modifies provisions to require the state energy conservation
office, rather than the energy management center of the governor's office,
to assist a governing body of a state agency, commission, or institution in
preparing energy conservation standards by providing technical assistance
and advice (Sec. 2166.402).   

The bill requires the General Services Commission (commission) to establish
procedures and adopt rules to administer provisions relating to the payment
of goods and services, except that the commission is prohibited from
establishing a procedure or adopting a rule that conflicts with a procedure
established or a rule adopted by the comptroller (Sec. 2251.003). 

The bill provides that the renewal, amendment, or extension of a contract
is considered to be the execution of a new contract executed on or before
September 1, 1993, for the purposes of prompt payment by a governmental
entity (Sec. 2251.021).  

The bill authorizes a state agency to pay interest to a vendor in the
amount specified in the contract between the agency and the vendor, but
only if that amount is less than the amount specified in the prompt payment
statutes.  The bill requires interest to accrue on a payment to a vendor
during the period that the comptroller is prohibited from issuing a payment
to the vendor because of its tax delinquency, indebtedness to the state,
child support delinquency, or student loan default.  The bill requires that
these provisions take effect on the date the comptroller files a
certification with the secretary of state.  The bill requires the secretary
of state to publish the certification in the Texas Register (Sec.
2251.025).  The bill sets forth provisions relating to the payment of
interest by a state agency and requires a state agency to determine the
amount of interest owed to a vendor by the agency if the amount is based on
the contract between the vendor and the agency.  The bill provides that  a
state agency  is liable for any interest that accrues on an overdue payment
and  requires the state agency to pay the interest from funds appropriated
or otherwise available to the agency at the same time the principal is
paid.  The bill requires the comptroller or state agency to submit the
interest payment with the net amount due for the goods and services.  The
bill authorizes the comptroller to establish procedures and adopt rules to
administer the portion of prompt payment provisions that govern interest
payments by the comptroller on behalf of state agencies (Sec. 2251.026). 

The bill requires a state agency to determine whether a payment law
prohibits the comptroller from issuing a warrant or initiating an
electronic funds transfer to a person before an agency enters into a
written contract with that person.  The bill requires the agency to make
the determination not later than the seventh day before and not later than
the date of entering the contract.  If the agency determined that a payment
law prohibited the comptroller from issuing a payment to a person, the
agency is prohibited from entering into the contract unless it required the
agency's payments under the contract to be applied directly toward
eliminating the person's debt or delinquency.  The bill authorizes the
comptroller to adopt rules and establish procedures to administer these
provisions (Sec. 2252.903). 

The bill provides that the legislature retains the authority to deny or
grant a waiver of immunity to suit against a unit of state government by
statute, resolution, or any other means the legislature may determine
appropriate (Sec. 2260.007). 

The bill amends the Health and Safety Code to require the Texas Natural
Resource Conservation Commission (TNRCC), by rule, to develop a program for
the reduction of emissions of nitrogen oxides from reciprocating internal
combustion engines associated with pipelines that are required to reduce
hourly emissions of nitrogen oxides by at least 50 percent.  TNRCC may
authorize the executive director to enter into contracts with a public
agency, private person, or other entity for the purpose of implementing the
emissions reduction program.  The emissions reduction program may include
incentives as developed by TNRCC for nitrogen oxides emissions reduction
projects for reciprocating internal combustion engines, including a partial
reimbursement for the capital cost of installing technology to reduce the
emissions.   

The bill sets forth criteria for determining eligibility for an emissions
reduction project incentive under the program.  The bill provides that an
emissions reduction project must be initiated on or before September 1,
2006, and completed before March 1, 2007.  The bill prohibits TNRCC from
paying or providing a financial incentive for an emissions reduction
project before the project is complete.  The bill prohibits TNRCC from
paying or  providing a financial incentive on or after March 1, 2007.
Gifts or contributions by an electric utility or an affiliated power
generating company to a program shall be considered tangible or intangible
capital costs to improve air quality, deemed to be incurred before January
1, 2002, included in the electric utility's generation-related invested
capital, and deemed to be a cost to offset the emission of airborne
contaminants from electric generating facilities.  The bill provides that
these provisions expire March 1, 2007.  The bill requires the comptroller
to establish an emissions reductions incentives account (Sec. 382.051865). 

The bill transfers the collection of certain 9-1-1 fees, emergency services
fees, and equalization surcharges from the Commission on State Emergency
Communications to the comptroller (Secs. 771.071, 771.0711, 771.072,
771.073, and 771.077).  The bill exempts the federal government from fees
or surcharges authorized by state or local emergency communications or a
home-rule municipality (Sec. 771.074).  The bill authorizes the comptroller
to audit a service provider without first receiving notification of
irregularity from the Commission on State Emergency Communications (Sec.
771.076).   

The bill amends the Occupations Code to provide that money in the law
enforcement standards and education fund account at the end of the state
fiscal year, other than money encumbered by the Commission on Law
Enforcement Officer Standards and Education and money allocated by the
comptroller used for continuing education, shall be transferred to the
general revenue fund (Sec. 1701.156). 

The bill amends the Tax Code to provide that a local revenue fund is no
longer eligible to accrue credit interest (Sec. 111.064).  The bill
authorizes a governmental entity to file a claim for a refund of the state
hotel occupancy tax paid by the entity only on a fiscal year basis (Sec.
156.154).  The bill requires the  comptroller to submit a biennial report
to the governor, lieutenant governor, and the speaker of the house of
representatives about franchise tax credits claimed by corporations for
certain capital investments (Sec. 171.837).  

The bill provides that all functions and activities performed by the
General Services Commission that relate to energy conservation, under
provisions governing the energy management center and restitutions for oil
overcharges, are transferred to the comptroller (SECTION 95). 

The bill amends the Government Code to increase, from $4 to $20, the
monthly amount of longevity pay for public officers for every three years
of lifetime service credit (Sec. 659.044). 

EFFECTIVE DATE

June 15, 2001.  The bill also provides other implementation dates for
certain sections of the bill.