By: Toth H.B. No. 1379

A BILL TO BE ENTITLED

AN ACT

relating to the control of conditional federal funds for state programs.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Subtitle C, Title 10, Government Code, is amended by adding Chapter 2116 to read as follows:

CHAPTER 2116. CONTROL OF CONDITIONAL FEDERAL FUNDS

Section 2116.001. DEFINITIONS. In this chapter:

(1) "Coercive federal funding program" means a program under which the federal government transfers funds to state agencies, or to persons or local entities through state agencies, to which the federal government has attached coercive conditions, provided that federal programs that offer to return to the state a pro-rata share of the state residents' tax contributions to the federal program if the state refuses to comply with the conditions attached to such program, is not a coercive federal funding program.

(2) "Coercive conditions" are conditions in coercive federal funding programs that pertain to matters other than the manner in which the federal funds are to be spent, such as conditions that pertain to how the state must spend its own revenue, or that pertain to collateral state policies.

Section 2116.002. COORDINATED MULTI-STATE REJECTION OF COERCIVE FEDERAL FUNDING PROGRAMS. (a) The attorney general shall annually prepare a comprehensive report to the legislature designating all the coercive federal funding programs that deliver more than $100 million yearly to the state, and detailing the coercive conditions therein.

(b) Where feasible, the attorney general shall sue to enjoin enforcement of coercive conditions in coercive federal funding programs. In any case where the federal government rejects a state plan or application for funds under a coercive federal funding program, because of the state's refusal to comply with any coercive condition, the attorney shall sue for relief.

(c) The governor shall work with governors of other states to develop a coordinated approach with respect to all such coercive federal funding programs.

(c) Agencies and officers of the state shall implement all coercive federal funding programs without regard to any conditions designated as coercive conditions under this section. Applications for federal approval of state programs shall make no reference to any coercive condition. This subsection shall go into effect when a substantially similar requirement has been adopted in 20 other states.

SECTION 2. Section 751.001, Subchapter A, Chapter 751, Title 7, Government Code, is amended by adding subsection 5 to read as follows:

(5) "Coercive federal funding program" and "coercive conditions" have the meanings ascribed to them in Section 2116.001.

SECTION 3. Section 751.005, Subchapter A, Chapter 751, Title 7, Government Code, is amended to read as follows:

Sec. 751.005. GENERAL POWERS AND DUTIES OF OFFICE. (a) The office shall exercise the powers and carry out the duties prescribed by this section in order to act as a liaison from the state to the federal government.

(b) The office shall:

(1) help coordinate state and federal programs dealing with the same subject;

(2) inform the governor and the legislature of federal programs that may be carried out in the state or that affect state programs, with particular attention to programs that may be coercive federal funding programs;

(3) provide federal agencies and the United States Congress with information about state policy and state conditions on matters that concern the federal government;

(4) provide the legislature with information useful in measuring the effect of federal actions on the state and local programs;

(5) prepare and supply to the governor and all members of the legislature an annual report that:

(A) describes the office's operations;

(B) contains the office's priorities and strategies for the following year;

(C) details projects and legislation pursued by the office;

(D) discusses issues in the following congressional session of interest to this state; [and]

(E) contains an analysis of federal funds availability and formulae;

(F) sets forth a catalogue of all the conditions attached to federal funding programs, in a format that clearly designates coercive conditions as such; and

(G) contains the office's strategy for ensuring that the state regains freedom of choice in fact with respect to coercive federal funding programs, by resisting compliance with coercive conditions while ensuring receipt of an equitable share of federal funds under such programs;

(6) notify the governor, the lieutenant governor, the speaker of the house of representatives, and the legislative standing committees in each house with primary jurisdiction over intergovernmental affairs of federal activities relevant to the state and inform the Texas congressional delegation of state activities;

(7) conduct frequent conference calls with the lieutenant governor and the speaker of the house of representatives or their designees regarding state-federal relations and programs;

(8) respond to requests for information from the legislature, the United States Congress, and federal agencies;

(9) coordinate with the Legislative Budget Board regarding the effects of federal funding on the state budget and the impact of coercive conditions on the state's ability to remain responsive to the preferences of its residents; and

(10) report to, and on request send appropriate representatives to appear before, the legislative standing committees in each house with primary jurisdiction over intergovernmental affairs.

(c) The office may maintain office space at locations inside and outside the state as chosen by the office.

(d) Repealed by Acts 2011, 82nd Leg., R.S., Ch. 1083, Sec. 25(63), eff. June 17, 2011.

(e) The report required under Subsection (b)(5) must include an evaluation of the performance of the office based on performance measures that are developed by the board.

SECTION 4. Section 751.022, Subchapter A, Chapter 751, Title 7, Government Code, is amended to read as follows:

Sec. 751.022. POWERS AND DUTIES. (a) The office has primary responsibility for monitoring, coordinating, and reporting on the state's efforts to restore freedom of choice with respect to coercive federal funding programs and ensure receipt of an equitable share of federal formula funds.

(b) The office shall:

(1) serve as the state's clearinghouse for information on federal formula funds and coercive conditions attached thereto;

(2) prepare reports on federal funds and earned federal formula funds;

(3) analyze proposed and pending federal and state legislation to determine whether the legislation would have a significant negative effect on the state's ability to maintain freedom of choice with respect to coercive federal funding programs and [to] receive an equitable share of federal formula funds;

(4) make recommendations for coordination between state agencies and local governmental entities, between state agencies and agencies of other states, and between state agencies, particularly with respect to formulating strategies for escaping restrictions imposed by coercive federal funding programs; and

(5) adopt rules under the rule-making procedures of the administrative procedure law, Chapter 2001, Government Code, as necessary to carry out the responsibilities assigned by this subchapter.

(c) The office shall annually prepare a comprehensive report to the legislature on the effectiveness of the state's efforts to escape restrictions imposed by coercive federal funding programs and ensure a receipt of an equitable share of federal formula funds for the preceding federal fiscal year. The report must include:

(1) an executive summary that provides an overview of the major findings and recommendations included in the report;

(2) a comparative analysis of the state's receipt of federal formula funds relative to other states, prepared using the best available sources of data;

(3) an analysis of federal formula funding trends that may have a significant effect on resources available to the state; [and]

(4) recommendations as to what policies and programs the state could implement if it were not subject to the restrictions imposed by the ten largest coercive federal funding programs in the state budget, and were able to receive an equitable share of federal funding under such programs; and

(5) recommendations, developed in consultation with the Legislative Budget Board, the Governor's Office of Budget and Planning, and the comptroller, for any state legislative or administrative action necessary to escape restrictions imposed by coercive federal funding programs and increase the state's receipt of federal formula funds.

SECTION 5. EFFECTIVE DATE. 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, 2011.