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A BILL TO BE ENTITLED
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AN ACT
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relating to the governance of certain state agencies. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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ARTICLE 1. INTERIM ADMINISTRATION OF CERTAIN INSTITUTIONS OF |
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HIGHER EDUCATION ON FINDING OF FINANCIAL OR ADMINISTRATIVE EXIGENCY |
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SECTION 1.01. Subchapter G, Chapter 51, Education Code, is |
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amended by adding Sections 51.358 and 51.359 to read as follows: |
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Sec. 51.358. INTERIM ADMINISTRATION OF CERTAIN |
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INSTITUTIONS ON FINDING OF FINANCIAL OR ADMINISTRATIVE EXIGENCY. |
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(a) In this section, "university" means a general academic |
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teaching institution as defined by Section 61.003. |
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(b) This section applies only to a university or university |
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system. |
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(c) The governor may make an independent finding that a |
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condition of financial or administrative exigency exists within a |
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university or university system that: |
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(1) creates continuing and pervasive instability in |
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the operation and management of the university or system; or |
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(2) results in the university or system consistently |
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failing to properly perform all or part of the primary functions or |
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duties of the university or system. |
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(d) The governor shall notify each member of the legislative |
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audit committee of the governor's finding under Subsection (c). |
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The legislative audit committee may meet to act on the governor's |
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finding, at the call of both chairs of the committee, not later than |
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the 10th business day after the latest date a member of the |
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committee receives notice from the governor under this subsection. |
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(e) The governor may abolish the governing body of the |
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university or university system if the legislative audit committee: |
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(1) concurs with the governor's finding under |
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Subsection (c); and |
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(2) recommends that the governing body be abolished. |
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(f) If the governing body is abolished under this section, |
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an interim governing board for the university or university system |
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is reconstituted composed of five members appointed by the governor |
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with the advice and consent of the senate. Each member appointed |
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under this subsection holds office for a term expiring on the second |
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anniversary of the date of the first appointment of a member of the |
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interim governing board. The interim governing board may appoint |
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an interim president or chancellor to the university or system with |
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the duties determined by the interim governing board to serve |
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during the term of the interim governing board. |
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(g) Following the expiration of the terms of the interim |
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governing board members under Subsection (f), the governing body of |
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the university or university system is reconstituted under the law |
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providing for the governance of the university or system. The |
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initial members of the reconstituted governing body shall be |
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appointed for terms that expire on the dates necessary to conform to |
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the permanent law establishing those terms. |
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(h) During the period in which an interim governing board is |
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in effect, the law establishing the governing body of the |
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university or university system and the terms of office of the |
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members of the governing body are suspended. |
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(i) The interim governing board, with the assistance of the |
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interim president or chancellor, if any, shall develop and |
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implement a comprehensive administration improvement plan for the |
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university or university system and submit the plan to the governor |
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and to each of the joint chairs of the legislative audit committee. |
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The plan must address: |
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(1) finance and accounting; |
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(2) human resources; |
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(3) management information systems; |
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(4) planning and communications; |
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(5) student financial aid; |
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(6) contract and grant management; and |
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(7) other elements determined appropriate by the |
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governor or the legislative audit committee. |
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(j) The administration improvement plan must: |
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(1) include timelines, benchmarks, and projected |
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outcomes for improvements in the areas described by Subsection (i); |
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(2) provide a procedure for the investigation of any |
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possible criminal activity and for the reporting of that activity |
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to the appropriate district or county attorney and, unless |
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prohibited by law, to the governor, the lieutenant governor, the |
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speaker of the house of representatives, and the attorney general, |
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if the activity: |
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(A) is committed by a university or university |
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system employee; and |
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(B) contributes to the condition of financial or |
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administrative exigency; and |
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(3) be prepared in a format specified by the governor |
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with the approval of the legislative audit committee. |
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(k) The interim governing board may consult with |
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appropriate experts as the interim governing board considers |
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necessary in developing and implementing the administration |
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improvement plan. |
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(l) The interim governing board may contract with another |
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university system's administration office to provide financial and |
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accounting services, including consulting services, to assist the |
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university or university system under interim administration in: |
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(1) reviewing policies and procedures relating to: |
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(A) revenue and expenditure controls; |
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(B) fixed assets; |
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(C) treasury matters; |
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(D) payroll; and |
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(E) information technology; |
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(2) reviewing and approving grants and contracts; |
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(3) determining and recommending best business |
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practices; |
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(4) segregating duties affecting internal controls to |
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ensure that no one individual has control over multiple areas of |
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operations or financial transactions; |
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(5) establishing a monthly financial report that |
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includes receipts, bank statements, and monthly reconciliations; |
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(6) providing accurate and timely recording of assets |
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in the state property accounting system; and |
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(7) providing other management and financial |
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operations. |
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(m) The interim governing board shall prepare an annual |
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financial statement for the university or university system. An |
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audit of the financial statement must be prepared by the state |
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auditor or, if the authority to contract for audit services is |
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delegated by the state auditor in accordance with Section 321.020, |
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Government Code, by an independent private auditor. The audit |
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required by this subsection must include a review of a contract |
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entered into by the university or university system that: |
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(1) is active; or |
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(2) the university or university system entered into |
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during the two-year period immediately preceding the date the |
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interim administration took effect. |
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(n) The interim governing board shall report to the |
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governor, the legislative audit committee, and the legislative |
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oversight committee appointed under Subsection (r) on the progress |
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of the administration improvement plan and on the progress of the |
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outcomes for each area described by Subsection (i), including |
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specific information regarding that progress: |
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(1) not later than the 60th day after the date the |
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interim governing board is appointed; |
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(2) at least once each quarter; and |
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(3) at other times as directed by the governor or the |
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legislative audit committee. |
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(o) An interim governing board appointed for a university or |
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university system under Subsection (f) and an interim president or |
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chancellor appointed by that governing board shall consult with the |
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accreditation agencies by which the university or system is |
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accredited and take appropriate action to the extent necessary to |
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ensure that the university or system maintains accreditation during |
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the period in which the interim governing board is in effect. |
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(p) A person appointed to act as the interim president or |
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chancellor of a university or university system under this section |
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is entitled to receive a salary for performing those duties that is |
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equal to the salary of the chief administrative officer of the |
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university or system under interim administration. The university |
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or system under interim administration shall pay the salary of the |
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interim president or chancellor from money appropriated or |
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otherwise available to the university or system, except to the |
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extent that money to pay the salary is specifically appropriated or |
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made available through the budget execution process for that |
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purpose. |
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(q) A member of an interim governing board or an interim |
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president or chancellor is entitled to reimbursement for the |
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reasonable and necessary expenses incurred by the person in the |
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course of performing the person's duties under this section. |
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Reimbursement shall be paid from funds appropriated or otherwise |
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available to the university or university system under interim |
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administration, except to the extent that money to pay those |
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expenses is specifically appropriated or made available through the |
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budget execution process for that purpose. |
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(r) As soon as practicable after appointing an interim |
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governing board under Subsection (f), the lieutenant governor and |
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the speaker of the house shall appoint a legislative oversight |
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committee composed of three members of the senate and three members |
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of the house of representatives to review the activities of the |
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interim governing board and the reconstituted governing body that |
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succeeds the interim governing board. A legislative oversight |
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committee appointed under this subsection expires on the third |
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anniversary of the date of the first appointment of a member of the |
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interim governing board. |
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(s) After the termination of an interim administration |
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under this section, the university or university system placed |
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under the interim administration shall continue to report to the |
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governor and the legislative audit committee at least once each |
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quarter until both the governor and the legislative audit committee |
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determine that the reports are no longer necessary. The report must |
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include the information required by Subsection (i). |
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Sec. 51.359. DENIAL OF EMPLOYMENT FOR CONTRIBUTION TO |
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FINANCIAL OR ADMINISTRATIVE EXIGENCY. The interim governing board |
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of a university or university system subject to an interim |
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administration under Section 51.358 may make a determination that |
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an individual's act or omission was a material cause of the |
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condition of financial or administrative exigency at the university |
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or university system that resulted in the interim administration. |
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If the interim governing board makes a determination under this |
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section, the individual shall be denied employment in an |
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administrative capacity with the university or university system |
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and any employment contract provision concerning administrative |
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employment of that individual is void by the university or system. |
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ARTICLE 2. INTERIM ADMINISTRATION OF CERTAIN STATE AGENCIES ON |
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FINDING OF FINANCIAL OR ADMINISTRATIVE EXIGENCY |
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SECTION 2.01. Subtitle C, Title 10, Government Code, is |
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amended by adding Chapter 2116 to read as follows: |
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CHAPTER 2116. INTERIM ADMINISTRATION OF CERTAIN STATE AGENCIES ON |
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FINDING OF FINANCIAL OR ADMINISTRATIVE EXIGENCY |
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SUBCHAPTER A. GENERAL PROVISIONS |
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Sec. 2116.001. DEFINITION. In this chapter, "state agency" |
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means a department, commission, board, office, or other agency or |
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entity governed by a commissioner or other officer appointed by the |
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governor or by a board, commission, or other governing body with one |
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or more members appointed by the governor that: |
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(1) is in the executive branch of state government; or |
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(2) is created by statute. |
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Sec. 2116.002. APPLICABILITY OF CHAPTER. This chapter does |
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not apply to: |
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(1) an agency that is under the direction of an elected |
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officer, board, or commission; or |
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(2) a university system or institution of higher |
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education. |
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[Sections 2116.003-2116.010 reserved for expansion] |
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SUBCHAPTER B. INTERIM ADMINISTRATOR |
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Sec. 2116.011. APPOINTMENT; TERM. (a) The governor with |
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the advice and consent of the senate may appoint an interim |
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administrator to oversee the interim administration of a state |
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agency only if the required finding and recommendation are made |
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under Section 2116.021. An appointment under this subsection must |
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be made in consultation with the legislative audit committee. |
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(b) To be eligible for appointment under this section, a |
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person must be qualified, by experience or education, to administer |
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under the prevailing circumstances the state agency for which the |
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person is appointed. |
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(c) The term of an interim administrator expires on the date |
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the interim administration terminates as determined under Section |
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2116.026. An interim administrator may be reappointed to continue |
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the interim administration if the interim administration is |
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extended under Section 2116.026. |
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Sec. 2116.012. TITLE. The governor shall provide that the |
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interim administrator has the title of interim administrator or |
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interim commissioner, as appropriate to the state agency to which |
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the interim administrator is appointed. |
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Sec. 2116.013. COMPENSATION. (a) A person appointed to |
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act as the interim administrator of a state agency under this |
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chapter is entitled to receive a salary for performing those duties |
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that is equal to the salary of the chief administrative officer of |
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the state agency under interim administration. |
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(b) The state agency under interim administration shall pay |
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the salary of the interim administrator from money appropriated or |
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otherwise available to the state agency, except to the extent that |
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money to pay the salary is specifically appropriated or made |
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available through the budget execution process for that purpose. |
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Sec. 2116.014. REIMBURSEMENT OF EXPENSES. (a) An interim |
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administrator is entitled to reimbursement for the reasonable and |
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necessary expenses incurred by the interim administrator in the |
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course of performing duties under this chapter. Reimbursement |
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shall be paid from funds appropriated or otherwise available to the |
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state agency under interim administration, except to the extent |
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that money to pay those expenses is specifically appropriated or |
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made available through the budget execution process for that |
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purpose. |
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(b) A limit prescribed by general law or the General |
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Appropriations Act on the amount of reimbursement for expenses that |
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state officers or members of state boards and commissions may |
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generally receive does not apply to reimbursement of the reasonable |
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and necessary expenses incurred by an interim administrator in the |
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course of performing duties under this chapter. |
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[Sections 2116.015-2116.020 reserved for expansion] |
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SUBCHAPTER C. INTERIM ADMINISTRATION |
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Sec. 2116.021. FINDING OF FINANCIAL OR ADMINISTRATIVE |
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EXIGENCY. (a) The governor may make an independent finding that a |
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condition of financial or administrative exigency exists within a |
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state agency that: |
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(1) creates continuing and pervasive instability in |
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the operation and management of the agency; or |
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(2) results in the agency consistently failing to |
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properly perform all or part of the agency's primary functions or |
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duties. |
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(b) The governor shall notify each member of the legislative |
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audit committee of the governor's finding under Subsection (a). |
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The legislative audit committee may meet to act on the governor's |
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finding, at the call of both chairs of the committee, not later than |
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the 10th business day after the latest date a member of the |
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committee receives notice from the governor under this subsection. |
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(c) The governor may place the state agency under interim |
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administration and appoint an interim administrator as provided by |
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this chapter only if the legislative audit committee: |
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(1) concurs with the governor's finding under |
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Subsection (a); and |
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(2) recommends that the governor place the agency |
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under interim administration and appoint an interim administrator. |
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Sec. 2116.022. GOVERNING POWERS; SUSPENSION; TRANSFER. |
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(a) Unless the governor abolishes the position of governing |
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officer or the governing body under Section 2116.041, the governor |
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may suspend the powers and duties of the governing officer or |
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governing body, as applicable, of a state agency placed under |
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interim administration under Section 2116.021. The suspension |
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terminates when the interim administration terminates. |
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(b) Except as provided by Subsection (c), the powers and |
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duties of the governing officer or governing body suspended by the |
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governor under Subsection (a) are transferred to the interim |
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administrator appointed by the governor under this chapter. |
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(c) To the extent necessary to maintain accreditation |
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status with an appropriate accrediting agency, an interim |
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administrator shall consult the governing officer or governing |
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body, as applicable, of the state agency to which the interim |
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administrator is appointed. |
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Sec. 2116.023. ADMINISTRATION IMPROVEMENT PLAN. (a) The |
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interim administrator appointed under this chapter shall develop |
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and implement a comprehensive administration improvement plan for |
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the state agency approved by the governor and by each of the joint |
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chairs of the legislative audit committee. The plan must address: |
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(1) finance and accounting; |
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(2) human resources; |
|
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(3) management information systems; |
|
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(4) planning and communications; |
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(5) contract and grant management; and |
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(6) other elements determined appropriate by the |
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governor or the legislative audit committee. |
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(b) The administration improvement plan must: |
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(1) include timelines, benchmarks, and projected |
|
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outcomes for improvements in the areas described in Subsection (a); |
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(2) provide a procedure for the investigation of any |
|
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possible criminal activity and for the reporting of that activity |
|
|
to the appropriate district or county attorney and, unless |
|
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prohibited by law, to the governor, the lieutenant governor, the |
|
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speaker of the house of representatives, and the attorney general, |
|
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if the activity: |
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(A) is committed by an agency employee; and |
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(B) contributes to the condition of financial or |
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administrative exigency; and |
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(3) be prepared in a format specified by the governor |
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with the approval of the legislative audit committee. |
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(c) The interim administrator may consult with appropriate |
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experts as the interim administrator considers necessary in |
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developing and implementing the administration improvement plan. |
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Sec. 2116.024. FINANCIAL OVERSIGHT. (a) The interim |
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administrator may contract with another state agency that provides |
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financial and accounting services, including consulting services, |
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to assist the state agency under interim administration in: |
|
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(1) reviewing policies and procedures relating to: |
|
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(A) revenue and expenditure controls; |
|
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(B) fixed assets; |
|
|
(C) treasury matters; |
|
|
(D) payroll; and |
|
|
(E) information technology; |
|
|
(2) reviewing and approving grants and contracts; |
|
|
(3) determining and recommending best business |
|
|
practices; |
|
|
(4) segregating duties affecting internal controls to |
|
|
ensure that no one individual has control over multiple areas of |
|
|
operations or financial transactions; |
|
|
(5) establishing a monthly financial report that |
|
|
includes receipts, bank statements, and monthly reconciliations; |
|
|
(6) providing accurate and timely recording of assets |
|
|
in the state property accounting system; and |
|
|
(7) providing other management and financial |
|
|
operations. |
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(b) The interim administrator shall prepare an annual |
|
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financial statement for the state agency. An audit of the financial |
|
|
statement must be prepared by the state auditor or, if the authority |
|
|
to contract for audit services is delegated by the state auditor in |
|
|
accordance with Section 321.020, by an independent private auditor. |
|
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The audit required by this subsection must include a review of a |
|
|
contract entered into by the agency that: |
|
|
(1) is active; or |
|
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(2) the agency entered into during the two-year period |
|
|
immediately preceding the date the interim administration took |
|
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effect. |
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Sec. 2116.025. REPORT. (a) The interim administrator |
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shall report to the governor and the legislative audit committee on |
|
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the progress of the administration improvement plan: |
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(1) at least once each quarter; |
|
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(2) on completion of the interim administration; and |
|
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(3) at other times as directed by the governor or the |
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legislative audit committee. |
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(b) The report must include specific information on the |
|
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progress of the outcomes for each area described by Section |
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2116.023(a). |
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Sec. 2116.026. DURATION OF INTERIM ADMINISTRATION. |
|
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(a) The governor with the approval of the legislative audit |
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committee shall determine the duration of an interim |
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administration, except that the duration of an interim |
|
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administration may not exceed two years. |
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(b) If the initial duration of an interim administration is |
|
|
less than two years, the governor with the approval of the |
|
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legislative audit committee may extend the duration of the interim |
|
|
administration on a determination by the governor that an extension |
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is necessary to accomplish the purposes of this chapter, provided |
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the initial duration and the extended duration together may not |
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exceed two years. |
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(c) If the duration of an interim administration is longer |
|
|
than six months, the governor shall review the progress of the |
|
|
interim administration after each six-month period and consider |
|
|
whether to continue the interim administration after that period. |
|
|
The interim administration terminates on the 30th day after the end |
|
|
of that period unless the governor with the approval of the |
|
|
legislative audit committee elects to continue the interim |
|
|
administration. |
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(d) Notwithstanding any other provision of this chapter, |
|
|
the interim administration of a state agency is immediately |
|
|
terminated if the governor or the legislative audit committee makes |
|
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a determination that the condition of financial or administrative |
|
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exigency at the agency that resulted in the interim administration |
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no longer exists. |
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Sec. 2116.027. REPORT FOLLOWING TERMINATION OF INTERIM |
|
|
ADMINISTRATION. After the termination of an interim administration |
|
|
under this chapter, the state agency placed under the interim |
|
|
administration must continue to report to the governor and the |
|
|
legislative audit committee at least once each quarter until both |
|
|
the governor and the legislative audit committee determine that the |
|
|
reports are no longer necessary. The report must include the |
|
|
information required by Section 2116.025. |
|
|
[Sections 2116.028-2116.040 reserved for expansion] |
|
|
SUBCHAPTER D. OPTION FOR INTERIM GOVERNING BOARD AND RECONSTITUTED |
|
|
GOVERNING OFFICER OR BODY |
|
|
Sec. 2116.041. ABOLITION OF GOVERNING OFFICER OR BODY. (a) |
|
|
As an alternative to the appointment of an interim administrator |
|
|
and suspension of the powers and duties of a governing officer or |
|
|
governing body of a state agency under Subchapters B and C, the |
|
|
governor may make an independent finding that a condition of |
|
|
financial or administrative exigency exists within the agency as |
|
|
described by Section 2116.021 and propose that the position of |
|
|
governing officer or the governing body, as applicable, of the |
|
|
agency be abolished. |
|
|
(b) The governor shall notify each member of the legislative |
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|
audit committee of the governor's finding under Subsection (a). |
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|
The legislative audit committee may meet to act on the governor's |
|
|
finding, at the call of both chairs of the committee, not later than |
|
|
the 10th business day after the latest date a member of the |
|
|
committee receives notice from the governor under this subsection. |
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|
(c) The governor may abolish the position of governing |
|
|
officer or the governing body, as applicable, of the agency under |
|
|
this section only if the legislative audit committee: |
|
|
(1) concurs with the governor's finding under |
|
|
Subsection (a); and |
|
|
(2) recommends that the position of governing officer |
|
|
or the governing body, as applicable, be abolished. |
|
|
Sec. 2116.042. INTERIM GOVERNING BOARD. If the position of |
|
|
governing officer or the governing body is abolished under this |
|
|
subchapter, an interim governing board for the state agency is |
|
|
reconstituted composed of five members appointed by the governor |
|
|
with the advice and consent of the senate. Each member appointed |
|
|
under this section holds office for a term expiring on the second |
|
|
anniversary of the date of the first appointment of a member of the |
|
|
interim governing board. An appointment under this subsection must |
|
|
be made in consultation with the legislative audit committee. |
|
|
Sec. 2116.043. RECONSTITUTION OF PERMANENT GOVERNING |
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|
OFFICER OR BODY. (a) Following the expiration of the terms of the |
|
|
interim governing board members under Section 2116.042, the |
|
|
position of governing officer or the governing body, as applicable, |
|
|
is reconstituted under the law providing for the governance of the |
|
|
state agency. The initial reconstituted governing officer or |
|
|
initial members of the reconstituted governing body shall be |
|
|
appointed for a term or terms that expire on the date or dates |
|
|
necessary to conform to the permanent law establishing those terms. |
|
|
(b) During the period in which an interim governing board is |
|
|
in effect, the law establishing the governing officer or governing |
|
|
body of the state agency and the term or terms of office of the |
|
|
governing officer or governing body are suspended. |
|
|
[Sections 2116.044-2116.060 reserved for expansion] |
|
|
SUBCHAPTER E. EMPLOYMENT PROVISIONS DURING INTERIM ADMINISTRATION |
|
|
Sec. 2116.061. DENIAL OF EMPLOYMENT FOR CONTRIBUTION TO |
|
|
FINANCIAL OR ADMINISTRATIVE EXIGENCY. The interim administrator or |
|
|
interim governing board or officer, as applicable, of a state |
|
|
agency subject to this chapter may make a determination that an |
|
|
individual's act or omission was a material cause of the condition |
|
|
of financial or administrative exigency at the agency that resulted |
|
|
in the interim administration or the abolition of the position of |
|
|
governing officer or the governing body. If the interim |
|
|
administrator, or interim governing board or officer, as |
|
|
applicable, makes a determination under this section, the |
|
|
individual shall be denied employment with the agency and any |
|
|
existing employment contract with that individual is void. |
|
|
ARTICLE 3. LEGISLATIVE AUDIT COMMITTEE MEETING BY |
|
|
TELECOMMUNICATION DEVICE |
|
|
SECTION 3.01. Chapter 321, Government Code, is amended by |
|
|
adding Section 321.024 to read as follows: |
|
|
Sec. 321.024. MEETING BY TELECOMMUNICATION DEVICE. (a) As |
|
|
an exception to Chapter 551 and other law, if a meeting is located |
|
|
in Austin and the joint chairs of the committee are physically |
|
|
present at the meeting, then any number of the other members of the |
|
|
committee may attend the meeting by use of telephone conference |
|
|
call, video conference call, or other similar telecommunication |
|
|
device. |
|
|
(b) This section applies for purposes of constituting a |
|
|
quorum, for purposes of voting, and for any other purpose allowing a |
|
|
member of the committee to otherwise fully participate in any |
|
|
meeting of the committee, and applies only to a meeting held |
|
|
pursuant to Chapter 2104 or 2116 of this code, or Section 51.358, |
|
|
Education Code. |
|
|
(c) A meeting held by use of telephone conference call, |
|
|
video conference call, or other similar telecommunication device: |
|
|
(1) is subject to the notice requirements applicable |
|
|
to other meetings of the committee; |
|
|
(2) must specify in the notice of the meeting the |
|
|
location in Austin of the meeting at which the joint chairs will be |
|
|
physically present; |
|
|
(3) must be open to the public and shall be audible to |
|
|
the public at the location in Austin specified in the notice of the |
|
|
meeting as the location of the meeting at which the joint chairs |
|
|
will be physically present; and |
|
|
(4) must provide two-way audio communication between |
|
|
all members of the committee attending the meeting during the |
|
|
entire meeting, and if the two-way audio communication link with |
|
|
any member attending the meeting is disrupted at any time, the |
|
|
meeting may not continue until the two-way audio communication link |
|
|
is reestablished. |
|
|
ARTICLE 4. EFFECTIVE DATE |
|
|
SECTION 4.01. 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, 2007. |