By Najera                                             H.B. No. 1486
         77R668 JJT-D                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to reviews by the comptroller or the state auditor of
 1-3     contracts involving state money.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1.  Subtitle F, Title 10, Government Code, is amended
 1-6     by adding Chapter 2261 to read as follows:
 1-7         CHAPTER 2262.  REVIEW OF CONTRACTS OF POLITICAL SUBDIVISION
 1-8           Sec. 2262.001.  APPLICABILITY.  This chapter applies only to
 1-9     a contract entered into by a political subdivision of the state or
1-10     an agency of the political subdivision under which:
1-11                 (1)  the political subdivision receives money from the
1-12     state to accomplish a purpose on the state's behalf; or
1-13                 (2)  money the political subdivision received from the
1-14     state to accomplish a purpose on the state's behalf is or will be a
1-15     source of money that the political subdivision pays to another.
1-16           Sec. 2262.002.  DEFINITIONS.  In this chapter:
1-17                 (1)  "Contract" includes a grant received or made by a
1-18     political subdivision of the state or an agency of the political
1-19     subdivision.
1-20                 (2)  "Money the political subdivision received from the
1-21     state to accomplish a purpose on the state's behalf":
1-22                       (A)  includes money that the state originally
1-23     received from the federal government or any other source; and
1-24                       (B)  does not include money that the political
 2-1     subdivision receives from the state according to a formula
 2-2     prescribed by a state statute or prescribed by a rule a state
 2-3     statute requires a state agency to adopt.
 2-4           Sec. 2262.003.  REVIEW OF CONTRACTS INVOLVING STATE MONEY.
 2-5     (a)  The comptroller or the state auditor may review any contract
 2-6     to determine whether:
 2-7                 (1)  the parties to the contract have sufficient
 2-8     authority to enter into the contract;
 2-9                 (2)  the contract is proper, reasonable, and easily
2-10     understood by each party;
2-11                 (3)  the contract implies that the state or federal
2-12     laws or rules governing the subject matter of the contract apply in
2-13     a different manner than the officer conducting the review considers
2-14     correct; and
2-15                 (4)  the purposes for which the state has provided
2-16     state money are being adequately furthered by the contract.
2-17           (b)  The comptroller or state auditor may send any material
2-18     or information developed in conducting a review under this section
2-19     to the attorney general or other state or federal investigatory
2-20     agency if the comptroller or state auditor finds reason for further
2-21     investigation by another entity of matters related to the contract.
2-22           (c)  The comptroller or state auditor shall provide a report
2-23     of the results of a review conducted under this section to the
2-24     contracting parties, the governor, the presiding officer of each
2-25     house of the legislature, and any state agency interested in the
2-26     subject matter of the contract.
2-27           SECTION 2.  This Act takes effect immediately if it receives
 3-1     a vote of two-thirds of all the members elected to each house, as
 3-2     provided by Section 39, Article III, Texas Constitution.  If this
 3-3     Act does not receive the vote necessary for immediate effect, this
 3-4     Act takes effect September 1, 2001.