C.S.S.B. 1449 78(R)    BILL ANALYSIS


C.S.S.B. 1449
By: Harris
Elections
Committee Report (Substituted)



BACKGROUND AND PURPOSE 

In 2001, the legislature adopted new provisions of the Government Code
intended to govern conflicts of interest for registrants under the Lobby
Act.  Although these provisions were patterned after the State Bar of
Texas Disciplinary Rules of Professional Conduct, which govern conflicts
of interest for attorneys, they have not resulted in the hoped-for clear
guidance for lobbyists or for the Texas Ethics Commission.  CSSB 1449
addresses the ambiguity and vague nature of the terms of the conflict of
interest provisions while preserving the intent and spirit of the law by
giving notice to clients of lobby registrants of that registrant's other
clients when those representations present a conflict of interest. 


RULEMAKING AUTHORITY

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


ANALYSIS

CSSB 1449 amends the Government Code to add definitions for "client,"
"matter," "person associated with the registrant," and "other association
person." 

The bill prohibits a registrant from representing a client in
communicating to influence legislative subject matter or administrative
action if the representation of that client is in conflict with another
client of the registrant; another client of a person associated with the
registrant; an employer or concern employing the registrant. 

The bill prohibits a registrant from representing a client in
communicating to influence legislative subject matter or administrative
action if the representation of that client reasonably appears to be
adversely limited by the registrant's, employer's or concern's, or the
other associated person's responsibilities to another client or the
registrant's, employer's or concern's, or other associated person's own
business interests. 

The bill authorizes a registrant to represent such clients in cases where
the registrant reasonably believes the representation of each client would
not be materially affected and where the registrant notifies clients in
writing within two business days after the registrant becomes aware of a
conflict. The bill also provides that the registrant notifies, within 10
days, the Texas Ethics Commission of the name and address of each affected
client that the registrant notified. 

The bill requires the registrant to affirm, under oath, that the
registrant has complied with the provisions of this section to the best of
the registrant's knowledge. 

The bill repeals the provision relating to the criminal penalty for
violations of provisions related to conflicts of interest. 

  


 EFFECTIVE DATE

September 1, 2003.


COMPARISON OF ORIGINAL TO SUBSTITUTE

CSSB 1449 modifies the original by changing the definition of matter to
subject matters for which a registrant has been reimbursed, retained, or
employed by a client, rather than subject matters for which the registrant
has been engaged by a client.  The substitute modifies the original by
deleting the applicability of conflict of interest provisions to interests
associated with a partner's client, responsibilities, or interests.  The
substitute also modifies the original by specifying that a conflict of
interest occurs in relation to a business interest, rather than a
registrant's, employer's or concern's or other associated person's own
interests.