By: Cook (Senate Sponsor - Nichols) H.B. No. 2499
         (In the Senate - Received from the House April 19, 2011;
  April 26, 2011, read first time and referred to Committee on
  Government Organization; May 12, 2011, reported adversely, with
  favorable Committee Substitute by the following vote:  Yeas 5,
  Nays 0; May 12, 2011, sent to printer.)
 
  COMMITTEE SUBSTITUTE FOR H.B. No. 2499 By:  Hegar
 
 
A BILL TO BE ENTITLED
 
AN ACT
 
  relating to the continuation and functions of the Department of
  Information Resources and the transfer of certain department
  functions to the comptroller of public accounts.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 572.054, Government Code, is amended by
  adding Subsection (g-1) to read as follows:
         (g-1)  For purposes of this section, the Department of
  Information Resources is a regulatory agency.
         SECTION 2.  Section 2054.005, Government Code, is amended to
  read as follows:
         Sec. 2054.005.  SUNSET PROVISION. The Department of
  Information Resources is subject to Chapter 325 (Texas Sunset Act).  
  Unless continued in existence as provided by that chapter, the
  department is abolished and this chapter expires September 1, 2017
  [2011].
         SECTION 3.  Sections 2054.021(a), (c), (g), and (h),
  Government Code, are amended to read as follows:
         (a)  The department is governed by a board composed of seven
  voting members appointed by the governor with the advice and
  consent of the senate. One member must be employed by an
  institution of higher education as defined by Section 61.003,
  Education Code.  Each member must have expertise in at least one of
  the following areas:
               (1)  business or financial management;
               (2)  information technology;
               (3)  telecommunications; or
               (4)  any other area necessary for policymaking and
  oversight of the department.
         (c)  Three [Two] groups each composed of three ex officio
  members serve on the board on a rotating basis.  The ex officio
  members serve as nonvoting members of the board.  [Only one group
  serves at a time.]  The first group is composed of the commissioner
  of insurance, the executive commissioner of the Health and Human
  Services Commission, and the executive director of a small state
  agency [the Texas Department of Transportation].  [Members of the
  first group serve for two-year terms that begin February 1 of every
  other odd-numbered year and that expire on February 1 of the next
  odd-numbered year.]  The second group is composed of the executive
  director of the Texas Department of Transportation, the
  commissioner of education, and the executive director of a small
  state agency.  The third group is composed of the executive director
  of the Texas Department of Criminal Justice, [and] the executive
  director of the Parks and Wildlife Department, and the executive
  director of a small state agency.  Members of a [the second] group
  serve on the board for two-year terms that begin February 1 of [the]
  odd-numbered years [in which the terms of members of the first group
  expire] and [that] expire on February 1 of the next odd-numbered
  year. Only one group serves at a time.  The governor shall appoint
  the small state agency representative for each group. In this
  subsection, "small state agency" means a state agency with fewer
  than 100 employees.
         (g)  The training program must provide information to the
  person regarding:
               (1)  this chapter and the board [the enabling
  legislation that created the department and its policymaking body]
  to which the person is appointed to serve;
               (2)  the programs operated by the department;
               (3)  the role and functions of the department;
               (4)  the rules of the department, with an emphasis on
  the rules that relate to disciplinary and investigatory authority;
               (5)  the current budget for the department;
               (6)  the results of the most recent formal audit of the
  department;
               (7)  the requirements of the:
                     (A)  open meetings law, Chapter 551;
                     (B)  open records law, Chapter 552; and
                     (C)  administrative procedure law, Chapter 2001;
               (8)  the requirements of the conflict of interest laws
  and other laws relating to public officials; [and]
               (9)  any applicable ethics policies adopted by the
  department or the Texas Ethics Commission; and
               (10)  contract management training.
         (h)  A person appointed to the board under Subsection (a) is
  entitled to reimbursement for travel expenses incurred in attending
  the training program, as provided by the General Appropriations Act
  and as if the person were a member of the board.
         SECTION 4.  Section 2054.022(c), Government Code, is amended
  to read as follows:
         (c)  An employee of the department, other than the executive
  director,[:
               [(1)     may not participate in the department's bidding
  process, including the proposal development related to a contract
  and the negotiation of a contract, if:
                     [(A)     the employee receives more than five percent
  of the employee's income from any likely bidder on the contract; or
                     [(B)     the employee's spouse is employed by any
  likely bidder on the contract; and
               [(2)]  may not:
               (1) [(A)]  be a person required to register as a
  lobbyist under Chapter 305 because of the person's activities for
  compensation on behalf of a business entity that has, or on behalf
  of a trade association of business entities that have, a
  substantial interest in the information resources technologies
  industry; or
               (2) [(B)]  be employed by a state agency as a
  consultant on information resources technologies.
         SECTION 5.  Section 2054.0285(b), Government Code, is
  amended to read as follows:
         (b)  The executive director has authority for certain [all]
  aspects of information technology for state agencies, including:
               (1)  the use of technology to support state goals;
               (2)  functional support to state agencies;
               (3)  [technology purchases;
               [(4)]  deployment of new technology;
               (4) [(5)]  delivery of technology services; and
               (5) [(6)]  provision of leadership on technology
  issues.
         SECTION 6.  Subchapter B, Chapter 2054, Government Code, is
  amended by adding Section 2054.0331 to read as follows:
         Sec. 2054.0331.  CUSTOMER ADVISORY COMMITTEE. (a)  The
  board shall appoint a customer advisory committee under Section
  2054.033.
         (b)  The advisory committee is composed of customers who
  receive services from each of the department's key programs and of
  members of the public, including at least:
               (1)  one member representing a state agency with fewer
  than 100 employees;
               (2)  one member appointed by the Information Technology
  Council for Higher Education; and
               (3)  one public member.
         (c)  The advisory committee shall report to and advise the
  board on the status of the department's delivery of critical
  statewide services.
         SECTION 7.  Subchapter B, Chapter 2054, Government Code, is
  amended by adding Sections 2054.0345 and 2054.0346 to read as
  follows:
         Sec. 2054.0345.  DETERMINATION OF ADMINISTRATIVE FEES. (a)  
  The department shall adopt a process to determine the amount of the
  administrative fee the department charges to administer any of its
  programs, including fees charged for programs under Sections
  2054.380 and 2170.057.
         (b)  The process must require that the amount of a fee
  directly relate to the amount necessary for the department to
  recover the cost of its operations, as determined by the
  department's annual budget process.
         (c)  The department shall develop clear procedures directing
  staff for each department program and the department's financial
  staff to work together to determine the amount of administrative
  fees.  The procedures must require review and approval of all
  administrative fees by the board, the executive director, and the
  department's chief financial officer.
         Sec. 2054.0346.  REPORTING OF ADMINISTRATIVE FEES. (a)  The
  department shall report to the Legislative Budget Board all
  administrative fees that the department sets under Section
  2054.0345 each fiscal year. The report must include:
               (1)  the underlying analysis and methodology used to
  determine the fee amounts; and
               (2)  the cost allocation charged to customers.
         (b)  The department shall post on the department's website
  information about each administrative fee the department charges,
  including a description of how the fee is determined. The
  department must update this information when a contract amendment
  or other action results in a major change to the costs incurred or
  the price paid by the department or a customer of the department.
         SECTION 8.  Subchapter B, Chapter 2054, Government Code, is
  amended by adding Section 2054.037 to read as follows:
         Sec. 2054.037.  NEGOTIATED RULEMAKING; ALTERNATIVE DISPUTE
  RESOLUTION.  (a)  The board shall develop and implement a policy to
  encourage the use of:
               (1)  negotiated rulemaking procedures under Chapter
  2008 for the adoption of department rules; and
               (2)  appropriate alternative dispute resolution
  procedures under Chapter 2009 to assist in the resolution of
  internal and external disputes under the department's
  jurisdiction.
         (b)  The department's procedures relating to alternative
  dispute resolution must conform, to the extent possible, to any
  model guidelines issued by the State Office of Administrative
  Hearings for the use of alternative dispute resolution by state
  agencies.
         (c)  The department shall:
               (1)  coordinate the implementation of the policy
  adopted under Subsection (a);
               (2)  provide training as needed to implement the
  procedures for negotiated rulemaking or alternative dispute
  resolution; and
               (3)  collect data concerning the effectiveness of those
  procedures.
         SECTION 9.  Subchapter B, Chapter 2054, Government Code, is
  amended by adding Sections 2054.038, 2054.039, and 2054.040 to read
  as follows:
         Sec. 2054.038.  INTERNAL AUDITOR; POWERS AND DUTIES.  (a)  
  The board shall:
               (1)  appoint an internal auditor who reports directly
  to the board and serves at the will of the board; and
               (2)  provide staff and other resources to the internal
  auditor as appropriate.
         (b)  The internal auditor shall prepare an annual audit plan
  using risk assessment techniques to rank high-risk functions in the
  department.  The internal auditor shall submit the annual audit
  plan to the board for consideration and approval.  The board may
  change the plan as necessary or advisable.
         (c)  The internal auditor may bring before the board an issue
  outside of the annual audit plan that requires the immediate
  attention of the board.
         (d)  The internal auditor may not be assigned any operational
  or management responsibilities that impair the ability of the
  internal auditor to make an independent examination of the
  department's operations.  The internal auditor may provide guidance
  or other advice before an operational or management decision is
  made but may not make the decision, approve the decision, or
  otherwise violate this subsection.
         (e)  The department shall give the internal auditor
  unrestricted access to the activities and records of the department
  unless restricted by other law.
         Sec. 2054.039.  OPEN MEETINGS EXCEPTION FOR INTERNAL
  AUDITOR. A meeting between the board and the department's internal
  auditor to discuss issues related to fraud, waste, or abuse is not
  required to be an open meeting under Chapter 551.
         Sec. 2054.040.  AUDIT SUBCOMMITTEE. (a)  The board shall
  maintain an audit subcommittee of the board.  The subcommittee
  shall oversee the department's internal auditor and any other audit
  issues that the board considers appropriate.
         (b)  The subcommittee shall evaluate whether the internal
  auditor has sufficient resources to perform the auditor's duties
  and ensure that sufficient resources are available.
         SECTION 10.  Subchapter B, Chapter 2054, Government Code, is
  amended by adding Section 2054.041 to read as follows:
         Sec. 2054.041.  ADDITIONAL BOARD OVERSIGHT. (a)  The board
  shall adopt a policy describing the board's role in setting a
  strategic direction for the department.  The policy must address
  the board's role in developing new initiatives for and service
  offerings by the department, including requiring the board to
  evaluate and approve new initiatives for, or categories of,
  services offered by the department under the department's various
  programs.
         (b)  The board shall regularly evaluate the extent to which
  the department fulfills the department's information resources
  technology mission by providing cost-effective services and
  meeting customer needs.
         (c)  The board shall regularly evaluate department
  operations, including an evaluation of analytical data and
  information regarding trends in department revenue and expenses, as
  well as performance information.
         SECTION 11.  Subchapter C, Chapter 2054, Government Code, is
  amended by adding Section 2054.0525 to read as follows:
         Sec. 2054.0525.  ASSISTANCE TO STATE AGENCIES. The
  department on request shall advise and provide technical assistance
  to a state agency to determine the agency's information resources
  technology needs and to solve the agency's information resources
  technology problems.
         SECTION 12.  Section 2054.0565(a), Government Code, is
  amended to read as follows:
         (a)  The comptroller [department] may include terms in a
  procurement contract entered into by the comptroller [department],
  including a contract entered into under Section 2157.068, that
  allow the contract to be used by another state agency, a political
  subdivision of this state, a governmental entity of another state,
  or an assistance organization as defined by Section 2175.001.
         SECTION 13.  Section 2054.057, Government Code, is amended
  to read as follows:
         Sec. 2054.057.  TRAINING IN CONTRACT NEGOTIATION. (a) The
  [department, with the cooperation of the] comptroller and other
  appropriate state agencies[,] shall develop and implement a program
  to train state agency personnel in effectively negotiating
  contracts for the purchase of information resources technologies.
         (b)  The comptroller [department] shall make the training
  available to state agency personnel who are directly or indirectly
  involved in contract negotiations, such as senior or operational
  management, purchasers, users of the purchased technologies, and
  personnel with relevant technical, legal, or financial knowledge.
         (c)  The comptroller [department] shall include in the
  training:
               (1)  information on developing a structured purchasing
  method that meets an agency's needs;
               (2)  information drawn from the state's previous
  procurement experience about what is or is not advantageous for the
  state;
               (3)  the perspective of state agencies with oversight
  responsibilities related to the state's procurement of information
  resources technologies; and
               (4)  other information that the comptroller
  [department] considers to be useful.
         (d)  The comptroller [department] may use its own staff or
  contract with private entities or other state agencies to conduct
  the training.
         SECTION 14.  Subchapter C, Chapter 2054, Government Code, is
  amended by adding Section 2054.061 to read as follows:
         Sec. 2054.061.  USE OF CONSULTANTS AND OUTSIDE STAFF. (a)  
  The department shall develop clear criteria for the appropriate use
  of consultants and outside staff by the department to temporarily
  augment the department's existing staff.
         (b)  The department shall annually analyze:
               (1)  the department's staffing needs;
               (2)  the need for and cost-effectiveness of contracting
  for consultants and outside staff;
               (3)  whether the department could use department staff
  to accomplish tasks proposed for the consultants and outside staff;
  and
               (4)  whether and what type of training or additional
  resources are necessary for the department to use the department's
  own staff to accomplish tasks proposed for the consultants or
  outside staff.
         (c)  In conjunction with the budget process, the department
  shall provide the analysis to the board for approval.  The
  department may not hire or train any consultants or outside staff
  unless it has been approved during this budget process.
         SECTION 15.  Subchapter C, Chapter 2054, Government Code, is
  amended by adding Section 2054.062 to read as follows:
         Sec. 2054.062.  INFORMATION RESOURCES TECHNOLOGIES
  CONSOLIDATION. (a)  The department shall develop a consistent and
  clear method of measuring the costs and progress of an information
  resources technology consolidation initiative, including a
  consolidation under Subchapter L.
         (b)  The department shall work with any entity involved in an
  information resources technology consolidation to develop an
  agreed on methodology for collecting and validating data to
  determine a baseline assessment of costs.  The department shall use
  the data both in the department's initial cost projections and in
  any later cost comparison.  The department shall coordinate with
  the internal auditor for guidance, subject to Section 2054.038(d),
  on developing a methodology that provides an objective assessment
  of costs and project status.
         (c)  Using the methodology agreed on under Subsection (b),
  the department shall evaluate actual costs and cost savings related
  to the consolidation.  The department shall also evaluate the
  progress of the department's information resources consolidation
  projects compared to the initially projected timelines for
  implementation.  The evaluation results must break out the
  information on both statewide and individual entity levels.
         (d)  The department shall annually report the evaluation
  results to:
               (1)  the board;
               (2)  the Legislative Budget Board; and
               (3)  customers involved in the consolidation.
         (e)  The department shall post on the department's website
  the report required by this section.
         SECTION 16.  Sections 2054.1015(b), (c), (d), and (e),
  Government Code, are amended to read as follows:
         (b)  The comptroller [department] may require a state agency
  to provide [to the department] a planned procurement schedule for
  commodity items if the comptroller [department] determines that the
  information in the schedule can be used to provide a benefit to the
  state.  If required by the comptroller [department], a state agency
  must provide a planned procurement schedule for commodity items to
  the comptroller and the department before the agency's operating
  plan may be approved under Section 2054.102.
         (c)  The comptroller [department] shall use information
  contained in the schedules to plan future vendor solicitations of
  commodity items or for any other activity that provides a benefit to
  the state.
         (d)  A state agency shall notify the comptroller
  [department], the Legislative Budget Board, and the state auditor's
  office if the agency makes a substantive change to a planned
  procurement schedule for commodity items.
         (e)  The comptroller [department] shall specify hardware
  configurations for state commodity items in its instructions for
  the preparation of planned procurement schedules.
         SECTION 17.  Section 2054.122, Government Code, is amended
  to read as follows:
         Sec. 2054.122.  COORDINATED TECHNOLOGY TRAINING. A state
  agency each calendar quarter shall coordinate agency training for
  the use of information resources technologies with training offered
  or coordinated by the department or comptroller. The agency shall
  use training offered or coordinated by the department or
  comptroller if it meets agency requirements and is
  cost-competitive.
         SECTION 18.  Section 2054.124, Government Code, is amended
  to read as follows:
         Sec. 2054.124.  POWER MANAGEMENT SOFTWARE. (a) After
  researching the software available, the comptroller [department]
  shall by competitive bid select power management software to be
  used, if technically feasible, by state agencies to reduce the
  amount of energy required to operate state computer networks and
  networked personal computers.
         (b) [(c)]  An institution of higher education shall
  purchase, lease, or otherwise acquire and use power management
  software only if the comptroller [department], in consultation with
  the Information Technology Council for Higher Education,
  determines that the institution of higher education's use of power
  management software would provide cost savings to this state.  In
  making a determination under this subsection, the comptroller
  [department] must perform the analysis described by Section
  2054.121(c) in the same manner as the department under that
  subsection.  The analysis must include an assessment of how the use
  of power management software affects the security of electronic
  data, including data protected from public disclosure by state or
  federal law.
         SECTION 19.  Section 2054.376(b), Government Code, is
  amended to read as follows:
         (b)  This subchapter does not apply to:
               (1)  the Department of Public Safety's use for criminal
  justice or homeland security purposes of a federal database or
  network;
               (2)  a Texas equivalent of a database or network
  described by Subdivision (1) that is managed by the Department of
  Public Safety;
               (3)  the uniform statewide accounting system, as that
  term is used in Subchapter C, Chapter 2101;
               (4)  the state treasury cash and treasury management
  system; [or]
               (5)  a database or network managed by the comptroller
  to:
                     (A)  collect and process multiple types of taxes
  imposed by the state; or
                     (B)  manage or administer fiscal, financial,
  revenue, and expenditure activities of the state under Chapter 403
  and Chapter 404;
               (6)  a database or network managed by the Department of
  Agriculture; or
               (7)  a database or network managed by the General Land
  Office.
         SECTION 20.  Subchapter L, Chapter 2054, Government Code, is
  amended by adding Section 2054.392 to read as follows:
         Sec. 2054.392.  STATEWIDE TECHNOLOGY ACCOUNT.  The
  comptroller shall establish in the state treasury the statewide
  technology account.  The account is a revolving fund account for the
  administration of this subchapter. The account is the depository
  for all money received from entities served under this subchapter.  
  Money in the account may be used only for the operation and
  management of a statewide technology center or for any other
  purpose specified by the legislature.
         SECTION 21.  Chapter 2054, Government Code, is amended by
  adding Subchapters N and O to read as follows:
  SUBCHAPTER N.  MAJOR OUTSOURCED CONTRACTS
         Sec. 2054.501.  MAJOR OUTSOURCED CONTRACT DEFINED; RULE.  
  The board by rule shall define what constitutes a major outsourced
  contract with regard to contracts the department executes with
  entities other than this state or a political subdivision of this
  state. The definition must include as a major outsourced contract:
               (1)  outsourced contracts entered into under
  Subchapter I and Subchapter L of this chapter or Chapter 2170; and
               (2)  contracts that exceed a monetary threshold, other
  than those described by Subdivision (1).
         Sec. 2054.502.  BOARD APPROVAL AND OVERSIGHT OF MAJOR
  OUTSOURCED CONTRACTS. (a)  The department must receive approval
  from the board before:
               (1)  entering into a major outsourced contract; or
               (2)  amending any major outsourced contract, if the
  amendment has significant statewide impact.
         (b)  The board shall establish one or more subcommittees to
  monitor the department's major outsourced contracts.
         Sec. 2054.503.  MANAGEMENT PLANS FOR MAJOR OUTSOURCED
  CONTRACTS. (a)  The department shall specify procedures for
  administering, monitoring, and overseeing each major outsourced
  contract by creating a management plan for each contract.  In each
  management plan, the department shall specify the department's
  approach to managing and mitigating the risks inherent in each
  contract.
         (b)  Department staff who perform contract administration
  and program duties shall jointly develop the management plans with
  input from executive management and the board. Each management plan
  must be approved by the executive director.
         (c)  Each management plan must establish clear lines of
  accountability and coordination of contract activities. The plan
  must provide details about implementing the program that is the
  subject of the contract as well as procedures for monitoring
  contractor performance, identifying and mitigating risks related
  to the contract, and involving and communicating with customers who
  will be served by any programs implemented through the contract.  As
  appropriate, the plan must define an approach for transitioning
  from one major outsourced contract to another major outsourced
  contract.
         (d)  The department shall revise each management plan:
               (1)  as necessary to keep current during the
  contracting process; and
               (2)  when the department renews, amends, or resolicits
  a major outsourced contract to ensure the plan remains updated and
  incorporates any changes resulting from a new contract.
         Sec. 2054.504.  CUSTOMER INVOLVEMENT IN MAJOR OUTSOURCED
  CONTRACTS. The department shall establish formal procedures to
  ensure customer involvement in decision making regarding each of
  the department's major outsourced contracts, including initial
  analysis, solicitation development, and contract award and
  implementation, that affect those customers.
  SUBCHAPTER O.  ADDITIONAL PROVISIONS ON CONTRACTING
         Sec. 2054.531.  DEFINITION. In this subchapter, "contract
  management guide" means the guide developed under this subchapter.
         Sec. 2054.532.  RULES. In addition to the rules adopted
  under Subchapter N for major outsourced contracts, the board by
  rule shall establish approval requirements for all other contracts,
  including a monetary threshold above which board approval is
  required before the contract may be executed.
         Sec. 2054.533.  CONFLICT OF INTEREST IN CONTRACTING. (a)  A
  department employee may not:
               (1)  have an interest in, or in any manner be connected
  with, a contract or bid for a purchase of goods or services by the
  department; or
               (2)  in any manner, including by rebate or gift,
  directly or indirectly accept or receive from a person to whom a
  contract may be awarded anything of value or a promise, obligation,
  or contract for future reward or compensation.
         (b)  A department employee who violates Subsection (a)(2) is
  subject to dismissal.
         (c)  The board shall adopt rules to implement this section.
         (d)  The department shall train staff in the requirements of
  this section and Section 572.054 and incorporate the requirements
  into the contract management guide and the department's internal
  policies, including employee manuals.
         Sec. 2054.534.  CONTRACT MANAGEMENT TRAINING POLICY. (a)  
  The department shall develop a policy for training department staff
  in contract management.
         (b)  The policy must establish contract management training
  requirements for all staff involved in contract management,
  including contract managers, program staff, and executive
  management.
         (c)  The policy must specify the department's overall
  approach to procuring and managing contracts, as well as
  contract-specific procedures developed in the contract management
  guide and under Subchapter N.
         Sec. 2054.535.  CONTRACT MANAGEMENT GUIDE; RULES. (a) The
  department shall develop and periodically update a contract
  management guide to provide an overall, consistent approach on
  procurement and management of major outsourced contracts under
  Subchapter N and other contracts.  In updating the guide, the
  department shall make changes based on contract experiences and
  account for changing conditions to guide the updates.
         (b)  The department shall coordinate with the department's
  internal auditor, subject to Section 2054.038(d), as needed for
  assistance and guidance in developing procedures in the contract
  management guide for monitoring contracts and individual
  contractors.
         (c)  The board may adopt rules necessary to develop or update
  the contract management guide.
         (d)  The contract management guide must provide information
  regarding the department's:
               (1)  general approach to business case analysis,
  procurement planning, contract solicitation, contract execution,
  and contract monitoring and oversight;
               (2)  ethics standards and policies, including those
  required by Section 2054.533; and
               (3)  approach to changing a program's internal
  structure or model for delivering services to customers.
         (e)  The contract management guide must:
               (1)  establish clear lines of accountability, staff
  roles and responsibilities, and decision-making authority for
  program staff, contract management staff, executive management,
  customers, and the board;
               (2)  include the procedures established under Section
  2054.504 regarding customer involvement; and
               (3)  establish the department's process for evaluating
  and managing risk during each stage of contract procurement,
  implementation, and management.
         (f)  The contract management guide must describe the
  expectations and standards for obtaining and using customer input
  during all contract management phases.
         SECTION 22.  Sections 2155.502(a), (b), and (c), Government
  Code, are amended to read as follows:
         (a)  The comptroller [commission] shall develop a schedule
  of multiple award contracts that have been previously awarded using
  a competitive process by:
               (1)  the federal government, including the federal
  General Services Administration; or
               (2)  any other governmental entity in any state.
         (b)  In developing a schedule under Subsection (a) [or (e)],
  the comptroller [commission or department, as appropriate,] shall
  modify any contractual terms, with the agreement of the parties to
  the contract, as necessary to comply with any federal or state
  requirements, including rules adopted under this subchapter.
         (c)  The comptroller [commission] may not list a multiple
  award contract on a schedule developed under Subsection (a) if the
  goods or services provided by that contract:
               (1)  are available from only one vendor; or
               (2)  are telecommunications services, facilities, or
  equipment[; or
               [(3)     are commodity items as defined by Section
  2157.068(a)].
         SECTION 23.  Section 2155.503, Government Code, is amended
  to read as follows:
         Sec. 2155.503.  RULES. (a) The comptroller [and the
  department] shall adopt rules to implement this subchapter.  The
  rules must:
               (1)  establish standard terms for contracts listed on a
  schedule; and
               (2)  maintain consistency with existing purchasing
  standards.
         (b)  The comptroller [and the department] shall consult with
  the attorney general in developing rules under this section.
         SECTION 24.  Section 2157.004, Government Code, is amended
  to read as follows:
         Sec. 2157.004.  TRANSFERS AND LOANS. A state agency that
  acquires a telecommunications device, system, or service or an
  automated information system by interagency transfer, contract, or
  loan, or by public loan, shall comply with the requirements that
  apply to that acquisition under [of] Chapter 2054 and this chapter.
         SECTION 25.  Section 2157.068, Government Code, is amended
  to read as follows:
         Sec. 2157.068.  PURCHASE OF INFORMATION TECHNOLOGY
  COMMODITY ITEMS. (a)  In this section, "commodity items" means
  commercial software, hardware, or technology services, other than
  telecommunications services, that are generally available to
  businesses or the public and for which the comptroller [department]
  determines that a reasonable demand exists in two or more state
  agencies.  The term includes seat management, through which a state
  agency transfers its personal computer equipment and service
  responsibilities to a private vendor to manage the personal
  computing needs for each desktop in the state agency, including all
  necessary hardware, software, and support services.
         (b)  The comptroller [department] shall negotiate with
  vendors to attempt to obtain a favorable price for all of state
  government on licenses for commodity items, based on the aggregate
  volume of purchases expected to be made by the state.  The terms and
  conditions of a license agreement between a vendor and the
  comptroller [department] under this section may not be less
  favorable to the state than the terms of similar license agreements
  between the vendor and retail distributors.
         (c)  In contracting for commodity items under this section,
  the comptroller [department] shall make good faith efforts to
  provide contracting opportunities for, and to increase contract
  awards to, historically underutilized businesses and persons with
  disabilities' products and services available under Chapter 122,
  Human Resources Code.
         (d)  The comptroller [department] may charge a reasonable
  administrative fee to a state agency, political subdivision of this
  state, or governmental entity of another state that purchases
  commodity items through the comptroller [department] in an amount
  that is sufficient to recover costs associated with the
  administration of this section.  The comptroller shall develop a
  clear procedure for calculating the fee under this subsection,
  including procedures for review and approval of the fee.
         (e)  The comptroller [department] shall compile and maintain
  a list of commodity items available for purchase through the
  comptroller [department] that have a lower price than the prices
  for commodity items otherwise available to state agencies under
  this chapter.  The comptroller [department] shall make the list
  available on the comptroller's website [world wide web or on a
  suitable successor to the world wide web if the technological
  developments involving the Internet make it advisable to do so].
         (f)  The comptroller [department] may adopt rules regulating
  a purchase by a state agency of a commodity item under this section,
  including a requirement that, notwithstanding other provisions of
  this chapter, the agency must make the purchase in accordance with a
  contract developed by the comptroller [department] unless the
  agency obtains:
               (1)  an exemption from the comptroller [department]; or
               (2)  express prior approval from the Legislative Budget
  Board for the expenditure necessary for the purchase.
         (g)  The Legislative Budget Board's approval of a biennial
  operating plan under Section 2054.102 is not an express prior
  approval for purposes of Subsection (f)(2).  A state agency must
  request an exemption from the comptroller [department] under
  Subsection (f)(1) before seeking prior approval from the
  Legislative Budget Board under Subsection (f)(2).
         (h)  The comptroller [department] shall, in cooperation with
  state agencies, establish guidelines for the classification of
  commodity items under this section. The comptroller [department]
  may determine when a statewide vendor solicitation for a commodity
  item will reduce purchase prices for a state agency.
         (i)  Unless the agency has express statutory authority to
  employ a best value purchasing method other than a purchasing
  method designated by the comptroller [commission] under Section
  2157.006(a)(2), a state agency shall use a purchasing method
  provided by Section 2157.006(a) when purchasing a commodity item
  if:
               (1)  the agency has obtained an exemption from the
  comptroller [department] or approval from the Legislative Budget
  Board under Subsection (f); or
               (2)  the agency is otherwise exempt from this section.
         SECTION 26.  Subchapter B, Chapter 2157, Government Code, is
  amended by adding Section 2157.0685 to read as follows:
         Sec. 2157.0685.  REPORTING OF ADMINISTRATIVE FEES FOR
  COMMODITY ITEMS. (a)  The comptroller shall report to the
  Legislative Budget Board any administrative fee the comptroller
  sets under Section 2157.068 for each fiscal year. The report must
  include the underlying analysis and methodology used to determine
  the fee amounts.
         (b)  The comptroller shall post on the comptroller's website
  information about the fee, including a description of how the fee is
  determined. The comptroller must update this information when a
  contract amendment or other action results in a major change to the
  costs incurred or the price paid by the comptroller or a customer of
  the comptroller.
         SECTION 27.  Subchapter B, Chapter 2157, Government Code, is
  amended by adding Section 2157.069 to read as follows:
         Sec. 2157.069.  CLEARING FUND ACCOUNT. The comptroller
  shall establish in the state treasury the clearing fund account.  
  The account is a revolving fund account for the administration of
  Section 2157.068. The account is the depository for all money
  received from entities served under that section.  Money in the
  account may be used only to administer that section or for any other
  purpose specified by the legislature.
         SECTION 28.  Section 2157.121, Government Code, is amended
  to read as follows:
         Sec. 2157.121.  ACQUISITION THROUGH COMPETITIVE SEALED
  PROPOSALS. (a)  The comptroller [commission] or other state agency
  may acquire a telecommunications device, system, or service or an
  automated information system by using competitive sealed proposals
  if the comptroller [commission] determines that competitive sealed
  bidding and informal competitive bidding are not practical or are
  disadvantageous to the state.
         (b)  A state agency, other than the department under
  Subsection (c), shall send its proposal specifications and criteria
  to the comptroller [commission] for approval or request the
  comptroller [commission] to develop the proposal specifications
  and criteria.
         (c)  The department may acquire a telecommunications device,
  system, or service [or an automated information system] by using
  competitive sealed proposals without regard to whether the
  comptroller [commission] makes the determination required under
  Subsection (a) for other state agencies.  This subsection applies
  only to an acquisition under Subchapter H, Chapter 2054, or under
  Chapter 2170.
         SECTION 29.  Section 2157.181(a), Government Code, is
  amended to read as follows:
         (a)  The comptroller [commission, with the concurrence of
  the department,] may negotiate with vendors preapproved terms and
  conditions to be included in contracts relating to the purchase or
  lease of [a telecommunication device, system, or service or] an
  automated information system awarded to a vendor by a state agency.
         SECTION 30.  Section 2157.182, Government Code, is amended
  to read as follows:
         Sec. 2157.182.  VALIDITY OF PREAPPROVED TERMS AND
  CONDITIONS; RENEGOTIATION.  (a) Preapproved terms and conditions
  to which a vendor[, the commission,] and the comptroller
  [department] agree are valid for two years after the date of the
  agreement and must provide that the terms and conditions are to be
  renegotiated before the end of the two years.
         (b)  The comptroller [commission and the department jointly]
  shall establish procedures to ensure that terms and conditions are
  renegotiated before they expire in a contract between the vendor
  and a state agency.
         SECTION 31.  Section 2157.184, Government Code, is amended
  to read as follows:
         Sec. 2157.184.  NOTIFICATION OF STATE AGENCIES AND VENDORS.
  The comptroller [commission and the department jointly] shall
  establish procedures to notify state agencies and potential vendors
  of the provisions of this subchapter regarding preapproved terms
  and conditions.
         SECTION 32.  Sections 2054.024(c), 2155.501(1),
  2155.502(e), 2157.0611, and 2157.181(b), Government Code, are
  repealed.
         SECTION 33.  (a)  Not later than September 1, 2011, the
  governor shall appoint the initial members of the governing board
  of the Department of Information Resources under Section 2054.021,
  Government Code, as amended by this Act. The governor shall
  appoint:
               (1)  two members whose terms expire February 1, 2013;
               (2)  two members whose terms expire February 1, 2015;
  and
               (3)  three members whose terms expire February 1, 2017.
         (b)  The terms of the current members of the board expire
  September 1, 2011.
         SECTION 34.  (a)  Not later than September 1, 2011, the
  first group of ex officio members shall begin serving or be
  appointed under Section 2054.021(c), Government Code, as amended by
  this Act.
         (b)  The governor shall appoint to the first group an ex
  officio member from a state agency with fewer than 100 employees
  under Section 2054.021(c), Government Code, as amended by this Act.
  When that member is appointed, the term of the executive director of
  the Texas Department of Transportation expires.
         (c)  The commissioner of insurance and the executive
  commissioner of the Health and Human Services Commission shall
  continue to serve in the first group under Section 2054.021(c),
  Government Code, as amended by this Act, until February 1, 2013.
         SECTION 35.  (a)  In this section, "department" means the
  Department of Information Resources.
         (b)  On the effective date of this Act, the powers and duties
  of the department under Section 2157.068, Government Code, or other
  law relating to information and communications technology
  cooperative contracts are transferred to the comptroller.
         (c)  The department shall work in cooperation with and at the
  direction of the comptroller to facilitate the transfer described
  by this section.
         (d)  A rule, form, policy, procedure, or decision of the
  department that is related to a power or duty transferred under
  Subsection (b) of this section continues in effect as a rule, form,
  policy, procedure, or decision of the comptroller until superseded
  by an act of the comptroller.
         (e)  A court case, administrative proceeding, contract
  negotiation, or other proceeding involving the department that is
  related to a power or duty transferred under Subsection (b) of this
  section is transferred without change in status to the comptroller,
  and the comptroller assumes, without a change in status, the
  position of the department in a negotiation or proceeding relating
  to a power or duty transferred under Subsection (b) of this section
  to which the department is a party.
         (f)  All department employees who primarily perform duties
  related to a power or duty transferred under Subsection (b) of this
  section, including employees who provide administrative support
  for those powers or duties, are transferred to the office of the
  comptroller. A management employee of the department who is
  transferred to the office of the comptroller under this section
  does not automatically continue to hold the person's management
  position. To hold the management position on other than an interim
  basis, the person must apply for the position with the comptroller.
         (g)  All personal property, including records, in the
  custody of the department related to a power or duty transferred
  under Subsection (b) of this section is transferred to and becomes
  the property of the comptroller.
         (h)  All contracts, memoranda of understanding, leases, and
  rights of the department related to a power or duty transferred
  under Subsection (b) of this section are transferred to the
  comptroller.
         (i)  All money appropriated by the legislature to the
  department related to a power or duty transferred under Subsection
  (b) of this section, including money for providing administrative
  support, is transferred to the comptroller.
         SECTION 36.  A contract transferred under Section 35 of this
  Act may not be canceled by the comptroller except as provided by the
  terms of the contract.
         SECTION 37.  Sections 2054.502 and 2054.533, Government
  Code, as added by this Act, apply only to a contract for which a
  solicitation of bids or proposals or similar expressions of
  interest is published on or after September 1, 2011.  A contract for
  which a solicitation of bids or proposals or similar expressions of
  interest is published before September 1, 2011, is governed by the
  law in effect on the date the state agency first publishes the
  solicitation of bids or proposals or similar expressions of
  interest, and the former law is continued in effect for that
  purpose.
         SECTION 38.  This Act takes effect September 1, 2011.
 
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