SRC-SEW S.B. 360 77(R)   BILL ANALYSIS


Senate Research Center   S.B. 360
77R1378 MXM-DBy: Lucio
State Affairs
2/28/2001
As Filed


DIGEST AND PURPOSE 

Under Texas' current competitive process, the Council of Competitive
Government (CCG) is authorized to identify competitive opportunities
throughout state agencies and to respond to suggestions for competition
from private vendors.  At present, however, nothing in state law requires
the agencies themselves to identify such opportunities, or to catalog their
own commercially-available activities. Such stipulations at the federal
level have made the Federal Activities Inventory Reform (FAIR) Act of 1998
a valuable vehicle for initiating public-private competition, thus reducing
operating costs and increasing efficiency.  As proposed, S.B. 360 requires
state agencies to: endeavor to limit the size and use of  funds as
effectively and efficiently as possible in the performance of essential
government functions; endeavor not to perform a function if a private
entity can perform that function better and at a lower cost; identify (as
determined by CCG rule) each agency function that is also commercially
available in the private sector, link each identified function with the
state agency employees or positions that perform that function, and select
a reasonable percentage of the functions identified to compete with the
private sector; and annually report the percentage and specific projects
identified and summarize the results of the competition to the CCG and in
their strategic plan. 

RULEMAKING AUTHORITY

Rulemaking authority is expressly granted to the State Council on
Competitive Government in SECTION 1 (Section 2163.004) of this bill. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Title 10D, Government Code, by adding Chapter 2163, as
follows:   

CHAPTER 2163.  GOVERNMENT COMPETITION WITH THE PRIVATE SECTOR.

Sec. 2163.001.  DEFINITION.  Defines "council." 

Sec. 2163.002.  SIZE OF STATE AGENCIES; PERFORMANCE OF ESSENTIAL GOVERNMENT
FUNCTIONS.  Requires a state agency to endeavor to limit its size and use
its funds as effectively and efficiently as possible in the performance of
essential government functions. 

.  Sec. 2163. 003.  LIMIT ON FUNCTIONS THAT AGENCY MAY PERFORM.  Requires a
state agency to endeavor not to perform a function if a private entity can
perform that function better and at a lower cost. 

Sec. 2163.004.  IDENTIFICATION OF COMMERCIALLY AVAILABLE ACTIVITIES;
STRATEGIC PLANS.  Requires a state agency, as determined by State Council
on Competitive Government (council) rule, to identify each function that it
performs that is also commercially available in the private sector.
Requires the agency to link each identified function with the state agency
employees or positions that perform that function and to include the
findings in its strategic plan under Section 2056.002. 
 
Sec. 2163.005.  PERFORMANCE TARGETS AND COMPETITION WITH PRIVATE SECTOR.
(a) Requires a state agency to annually select a reasonable percentage of
the functions identified under Section 2163.004 and subject specific
selected functions to competition with the private sector by using an
appropriate competitive procurement process allowed under state law under
which private businesses may offer to perform a selected function. 

(b) Authorizes the division or part of the agency that performs a function
subjected to competition under Subsection (a) to participate in the
competitive procurement process as if the division or part were a private
business.  Authorizes the division or part, if the bid, proposal, or other
applicable kind of offer submitted by the division or part provides the
best value for the state, to continue to perform the function but in
accordance with the bid, proposal, or other applicable kind of offer the
division or part submitted.  Requires the Texas Incentive and Productivity
Commission, under such circumstances, to treat the successful bid,
proposal, or other applicable kind of offer as a suggestion submitted by a
state employee group and consider whether the employees of the division or
part are eligible for a bonus under Section 2108.0236 or a recognition
award under Section 2108.0235. 

Sec. 2163.006.  REPORTING.  Requires the agency to annually report the
percentage and specific projects identified under section 2163.005(a) and
summarize the results of the competition to the council and in the agency's
strategic plan under Section 2056.002.   

SECTION 2.  Defines "state agency."  Requires each state agency to make a
list of all functions that it performs, including services that it
provides, that are also commercially available in the private sector.
Requires each state agency, not later than June 1, 2002, to electronically
report its list to the governor's office. 

SECTION 3.  Effective date:  upon passage or September 1, 2001.