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S.B. No. 147
AN ACT
relating to the adoption by state agencies of risk management plans
and risk control strategies.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle B, Title 10, Government Code, is
amended by adding Chapter 2057 to read as follows:
CHAPTER 2057. STATE AGENCY RISK MANAGEMENT POLICIES AND RISK
CONTROL STRATEGIES
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 2057.001. DEFINITIONS. In this chapter:
(1) "Objective" means a goal to which senior
management of a state agency and the agency's governing body
intends to devote a significant portion of their time and attention
to accomplish during the biennium following a regular legislative
session.
(2) "Risk assessment" means:
(A) the identification of significant
impediments that may prevent a state agency from achieving its
goals and objectives; or
(B) the identification of a significant
likelihood that an opportunity may be lost for enabling a state
agency to achieve its goals and objectives.
(3) "Risk control strategy" means a state agency
policy, procedure, or process that is designed to signal the
existence of a risk and mitigate or avoid that risk.
(4) "Risk management" means the practice of
identifying and analyzing risks and loss exposures, and taking
steps to eliminate or minimize the adverse operational or financial
effects of those risks and exposures.
(5) "State agency" means a department, commission,
board, office, authority, or other agency in the executive branch
of state government, created under the constitution or a statute,
with statewide authority, including a university system or an
institution of higher education as defined by Section 61.003,
Education Code.
Sec. 2057.002. CONSTRUCTION OF CHAPTER. (a) This chapter
does not expand, supersede, or replace the authority of the State
Office of Risk Management to provide full risk and insurance
management services under Chapter 412, Labor Code, or Subchapter C,
Chapter 501, Labor Code.
(b) This chapter does not supersede or replace the duties of
state agencies under Chapter 412, Labor Code, or Subchapter C,
Chapter 501, Labor Code.
[Sections 2057.003–2057.050 reserved for expansion]
SUBCHAPTER B. POWERS AND DUTIES
Sec. 2057.051. ADOPTION OF RISK MANAGEMENT PLAN; STRATEGIC
PLAN. (a) The governing body of each state agency shall adopt a
risk management plan for the succeeding strategic planning period.
The agency shall include the plan as part of the agency's strategic
plan under Section 2056.002.
(b) Not later than July 15 of each even-numbered year, the
state agency shall forward a copy of the risk management plan to the
State Office of Risk Management.
Sec. 2057.052. CONTENT OF RISK MANAGEMENT PLAN. (a) The
risk management plan must include information required by the State
Office of Risk Management, including:
(1) a risk assessment for the agency;
(2) risk control strategies for the agency; and
(3) other information as provided by this section.
(b) The risk management plan must include a business
continuity strategy that outlines plans and procedures designed to
keep a business operational in the face of potential disruptions,
including disruptions of production, finance, administration, and
other essential operations.
(c) The risk management and risk control strategies
contained in the plan must:
(1) specify the operational, strategic, and financial
objectives of the state agency;
(2) assess the nature and extent of the risks to
achieve those objectives;
(3) identify any significant risks that may impede the
achievement of those objectives;
(4) identify measures that may lessen or eliminate
significant risks, including alternative or contingency measures
for implementing the objectives; and
(5) analyze the likelihood that the risk may occur and
the cost of controlling the risk compared to the benefits of
managing the risk.
(d) The risk management plan must include a report on the
state agency's level of achievement in implementing risk management
and risk control strategies, including:
(1) a review of whether the state agency has achieved
the objectives established for the preceding biennium and, if not,
whether the state agency will achieve its objectives by the end of
the current biennium;
(2) a description of any significant risk control
strategy failings or weaknesses that have been identified during
the preceding biennium;
(3) an assessment of the extent to which the
identified failings or weaknesses resulted in unforeseen outcomes
that may have prevented the achievement of the state agency's
objectives or may have had a material impact on the performance of
the state agency's mission;
(4) an examination in detail of any corrective action
by the state agency; and
(5) an assessment of the state agency's risk control
strategy, including a review of the scope and quality of
management's ongoing monitoring of risks.
Sec. 2057.053. STATE AGENCY IMPLEMENTATION OF RISK
MANAGEMENT PLAN AND RISK CONTROL STRATEGIES. (a) Each state
agency shall implement the risk management plan, including the risk
control strategies adopted by its governing body under this
subchapter.
(b) At least twice each year, the state agency shall provide
to the governing body progress reports concerning the
implementation of the risk management plan.
(c) The state agency shall promptly notify its governing
body of the identification of any significant risk that threatens
to impede the achievement of an objective contained in the risk
management plan and of the measures taken to mitigate or avoid that
risk.
Sec. 2057.054. STATE OFFICE OF RISK MANAGEMENT AND
LEGISLATIVE BUDGET BOARD RESPONSIBILITIES. (a) The State Office
of Risk Management shall:
(1) develop information to be used by each state
agency in the preparation of a risk management plan under this
subchapter, including information to guide each agency regarding
risk assessment and risk control strategies; and
(2) assist each state agency in the preparation of a
risk management plan under this subchapter.
(b) The State Office of Risk Management shall include in its
report to the legislature under Section 412.032, Labor Code:
(1) the identity of each state agency that has not
developed a risk management plan or that has not made substantial
progress toward implementation of the risk management plan;
(2) a list of significant efforts by state agencies to
implement risk control strategies to avoid or mitigate the risks
contained in the strategies;
(3) an assessment and summary of the state's
significant risks and exposures to loss; and
(4) recommendations regarding risk control, including
recommendations for any necessary statutory changes.
(c) The Legislative Budget Board and the State Office of
Risk Management shall cooperate in preparing the risk management
plan portion of the strategic plans required under this subchapter
and Section 2056.002.
SECTION 2. Subsection (b), Section 2056.002, Government
Code, is amended to read as follows:
(b) Except as provided in Subchapter B, Chapter 2057, the
[The] Legislative Budget Board and the Governor's Office of Budget
and Planning shall determine the elements required to be included
in each agency's strategic plan. Unless modified by the
Legislative Budget Board and the Governor's Office of Budget and
Planning, and except as provided by Subsection (c), a plan must
include:
(1) a statement of the mission and goals of the state
agency;
(2) a description of the indicators developed under
this chapter and used to measure the output and outcome of the
agency;
(3) identification of the groups of people served by
the agency, including those having service priorities, or other
service measures established by law, and estimates of changes in
those groups expected during the term of the plan;
(4) an analysis of the use of the agency's resources to
meet the agency's needs, including future needs, and an estimate of
additional resources that may be necessary to meet future needs;
(5) an analysis of expected changes in the services
provided by the agency because of changes in state or federal law;
(6) a description of the means and strategies for
meeting the agency's needs, including future needs, and achieving
the goals established under Section 2056.006 for each area of state
government for which the agency provides services;
(7) a description of the capital improvement needs of
the agency during the term of the plan and a statement, if
appropriate, of the priority of those needs;
(8) identification of each geographic region of this
state, including the Texas-Louisiana border region and the
Texas-Mexico border region, served by the agency, and if
appropriate the agency's means and strategies for serving each
region;
(9) a description of the training of the agency's
contract managers under Section 2262.053; [and]
(10) the risk management plan required under Section
2057.051; and
(11) other information that may be required.
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.
______________________________ ______________________________
President of the Senate Speaker of the House
I hereby certify that S.B. No. 147 passed the Senate on
May 6, 2003, by the following vote: Yeas 31, Nays 0; and that the
Senate concurred in House amendment on May 29, 2003, by the
following vote: Yeas 31, Nays 0.
______________________________
Secretary of the Senate
I hereby certify that S.B. No. 147 passed the House, with
amendment, on May 25, 2003, by the following vote: Yeas 117,
Nays 0, two present not voting.
______________________________
Chief Clerk of the House
Approved:
______________________________
Date
______________________________
Governor