S.B. 147 78(R)    BILL ANALYSIS


S.B. 147
By: Barrientos
State Affairs
Committee Report (Amended)



BACKGROUND AND PURPOSE 

Risk management is a method of conducting business that recognizes that
business operations inherently possess risks that can be anticipated and
controlled to prevent losses from occurring.   

Currently, the State Office of Risk Management (SORM) may assist agencies
concerning risk assessments, risk management plans, and control
strategies, but does not have the authority to require agencies to assess
their risks or to develop risk management plans.  Imposing such a
requirement on state agencies could raise the awareness of key
decision-makers of the risks inherent within state government, and lead to
the implementation of effective and efficient risk prevention and control
measures.   

The purpose of Senate Bill 147 is to require each state agency to develop
a risk management plan, and to implement various other procedures which
will help to assess and control state agency risks.  

RULEMAKING AUTHORITY

It is the opinion of the committee that this bill does not expressly grant
any additional rulemaking authority to a state officer, department,
institution, or agency.  

ANALYSIS

Senate Bill 147 amends Subtitle B, Title 10, Government Code, by adding
Chapter 2057 to require the governing body of each executive branch state
agency to adopt a risk management plan as part of the agency's strategic
plan.  The bill sets a biennial deadline for submission of the plan to the
State Office of Risk Management (SORM), and provides that the plan must
include: 

_a risk assessment strategy,
_risk control strategies,
_a business continuity strategy designed to maintain business operations
in the face of potential disruptions, and 
_a report on the agency's achievement in implementing risk management and
risk control strategies. 

The bill provides that each state agency shall implement its risk
management plan, and shall report to the governing body of the agency at
least twice each year on its implementation of the plan.  The agency is
also required to promptly notify the governing body if it identifies a
significant risk, including the corrective measures taken to address the
risk. 

The bill delegates certain responsibilities to SORM, which include
coordinating with the Legislative Budget Board, assisting state agencies
in the preparation of risk management plans, and providing a report to the
Legislature identifying: 

_state agencies who are not adequately preparing or implementing risk
management plans, 
_the state's significant risks and exposure to loss, and
_recommendations regarding risk control.

The bill includes a provision on the proper construction of Chapter 2057
with respect to the duties assigned to state agencies by other laws.   

 The bill makes conforming amendments to Section 2056.002 (Strategic
Plans) of the Government Code consistent with the purposes of the Act. 

EFFECTIVE DATE

Upon passage, or, if the Act does not receive the necessary vote, the Act
takes effect September 1, 2003. 


EXPLANATION OF AMENDMENTS

Committee Amendment No. 1 provides that proposed Chapter 2057, Government
Code, does not expand, supersede, or replace the authority of SORM to
provide full risk and insurance management services under Chapter 412,
Labor Code, or Subchapter C, Chapter 501, Labor Code.