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79R4221 KEG-D

By:  Delisi                                                       H.B. No. 905



A BILL TO BE ENTITLED

AN ACT

relating to the powers and duties of the state auditor in connection 
with state contracts.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Section 2262.002, Government Code, is amended to 
read as follows:
	Sec. 2262.002.  EXEMPTIONS.  (a)  Except as otherwise 
provided, this [This] chapter does not apply to an institution of 
higher education as defined by Section 61.003, Education Code.
	(b)  Except as otherwise provided, this [This] chapter does 
not apply to contracts of the Texas Department of Transportation 
that relate to highway construction or highway engineering.
	SECTION 2.  Section 2262.003, Government Code, is amended by 
amending Subsection (a) and adding Subsection (c) to read as 
follows:
	(a)  Each state agency shall include in each of its contracts 
a term that provides that:
		(1)  the state auditor may conduct an audit or 
investigation of any entity receiving funds from the state directly 
under the contract or indirectly through a subcontract under the 
contract; [and]
		(2)  acceptance of funds directly under the contract or 
indirectly through a subcontract under the contract 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; and
		(3)  an entity that is the subject of an audit or 
investigation by the state auditor must provide the state auditor 
with access to any information the state auditor considers relevant 
to:
			(A)  evaluating the entity's performance under 
the contract or subcontract;
			(B)  determining the state's rights or remedies 
under the contract; or
			(C)  evaluating whether the entity has acted in 
the best interest of the state.
	(c)  This section applies to all state agency contracts, 
including contracts of:
		(1)  an institution of higher education, as that term 
is defined by Section 61.003, Education Code; and
		(2)  the Texas Department of Transportation that relate 
to highway construction or highway engineering.
	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, 2005.