By:  Raymond                                                      H.B. No. 3498



A BILL TO BE ENTITLED

AN ACT

Relating to a provision in certain contracts entered into by 
governmental bodies.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Chapter 2262, Government Code, is amended by 
adding a new Section 2262.003 to read as follows:
	(a)  Each unit of state government that enters into a 
contract to which this chapter applies shall include as a term of 
the contract a provision stating that the State Auditor may conduct 
an audit or investigation of any entity receiving funds from the 
state directly under a contract with the state or indirectly 
through a subcontract under a state contract, and that acceptance 
of funds from the state acts as acceptance of the authority of the 
state auditor, under the direction of the Legislative Audit 
Committee, to conduct an audit or investigation in connection with 
those funds.
	(b)  The state auditor shall provide assistance to a unit of 
state government in developing the contract provision required by 
this section.
	SECTION 2.  The change in law made by this Act:                                
		(1)  applies only in relation to a state contract 
entered into or state grant made on or after the effective date of 
the Act; and
		(2)  does not affect any authority under prior law to 
conduct an audit or investigation in relation to a state contract 
entered into or state grant made before the effective date of this 
Act.
	SECTION 3.  This Act takes effect immediately if it receives 
a vote of two-thirds of all the members elected to each house, as 
provided by Section 39, Article III, Texas Constitution.  If this 
Act does not receive the vote necessary for immediate effect, this 
Act takes effect September 1, 2003.