By: Zaffirini S.B. No. 1682

A BILL TO BE ENTITLED

AN ACT

relating to certain ethics requirements applicable to state agencies, including required disclosures by state contractors.

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

SECTION 1. The heading to Chapter 2263, Government Code, is amended to read as follows:

CHAPTER 2263. ETHICS AND DISCLOSURE REQUIREMENTS FOR STATE

AGENCIES AND CONTRACTORS WITH STATE AGENCEIES [OUTSIDE FINANCIAL

ADVISORS AND SERVICE PROVIDERS]

SECTION 2. Chapter 2263, Government Code, is amended by designating Sections 2263.001 through 2263.006 as Subchapter A and adding a heading to Subchapter A to read as follows:

SUBCHAPTER A. ETHICS AND DISCLOSURE REQUIREMENTS FOR OUTSIDE

FINANCIAL ADVISORS AND SERVICE PROVIDERS

SECTION 3. Sections 2263.001, 2263.002, 2263.003, and 2263.006, Government Code, are amended to read as follows:

Sec. 2263.001. APPLICABILITY. (a) This subchapter [chapter] applies in connection with the management or investment of any state funds managed or invested:

(1) under the Texas Constitution or other law, including Chapters 404 and 2256; and

(2) by or for:

(A) a public retirement system as defined by Section 802.001 that provides service retirement, disability retirement, or death benefits for officers or employees of the state;

(B) an institution of higher education as defined by Section 61.003, Education Code; or

(C) another entity that is part of state government and that manages or invests state funds or for which state funds are managed or invested.

(b) This subchapter [chapter] applies in connection with the management or investment of state funds without regard to whether the funds are held in the state treasury.

(c) This subchapter [chapter] does not apply to or in connection with a state governmental entity that does not manage or invest state funds and for which state funds are managed or invested only by the comptroller.

Sec. 2263.002. DEFINITION. In this subchapter [chapter], "financial advisor or service provider" includes a person or business entity who acts as a financial advisor, financial consultant, money or investment manager, or broker.

Sec. 2263.003. CONSTRUCTION WITH OTHER LAW. To the extent of a conflict between this subchapter [chapter] and another law, the law that imposes a stricter ethics or disclosure requirement controls.

Sec. 2263.006. PUBLIC INFORMATION. Chapter 552 controls the extent to which information contained in a statement filed under this subchapter [chapter] is subject to required public disclosure or excepted from required public disclosure.

SECTION 4. Chapter 2263, Government Code, is amended by adding Subchapters B and C to read as follows:

SUBCHAPTER B. MODEL ETHICS POLICY FOR STATE AGENCIES

Sec. 2263.051. MODEL ETHICS POLICY FOR STATE AGENCIES. A state agency shall use the following model policy in adopting an agency ethics policy under Section 572.051(c):

I. OVERVIEW.

Under Section 572.051(c), Government Code, the (agency) adopts the following ethics policy:

This ethics policy prescribes standards of conduct for all (agency) employees.

This ethics policy does not supersede any applicable federal or Texas law or administrative rule.

All (agency) employees must familiarize themselves with this ethics policy.

All (agency) employees must abide by all applicable federal and Texas laws, administrative rules, and (agency) conduct policies, including this ethics policy. An (agency) employee who violates any provision of the (agency's) conduct policies is subject to termination of the employee's state employment or another employment-related sanction. An (agency) employee who violates any applicable federal or Texas law or rule may be subject to civil or criminal penalties in addition to any employment-related sanction.

II. STANDARDS OF CONDUCT.

A. An (agency) employee may not:

(1) accept or solicit any gift, favor, or service that might reasonably tend to influence the employee in the discharge of official duties, or that the employee knows or should know is being offered with the intent to influence the employee's official conduct;

(2) intentionally or knowingly solicit, accept, or agree to accept any benefit for having exercised the employee's official powers or performed the employee's official duties in favor of another;

(3) disclose confidential information, information that is excepted from public disclosure under the Texas Public Information Law, or information that has been ordered sealed by a court that was acquired by the employee through the employee's official position;

(4) accept other employment, including self-employment, or engage in a business, charity, nonprofit organization, or professional activity that the employee might reasonably expect would require or induce the employee to disclose confidential information, information that is excepted from public disclosure under the Texas Public Information Law, or information that has been ordered sealed by a court that was acquired by the employee through the employee's official position;

(5) accept other employment, including self-employment, or compensation or engage in a business, charity, nonprofit organization, or professional activity that could reasonably be expected to impair the employee's independence of judgment in the performance of the employee's official duties;

(6) make personal investments, or have a personal or financial interest, that could reasonably be expected to create a substantial conflict between the employee's private interest and the public interest;

(7) use state, time, property, facilities, or equipment for any purpose other than official state business, unless the use is reasonable and incidental and does not result in any direct cost to the state or (agency), interfere with the employee's official duties, or interfere with (agency) functions;

(8) use the employee's official position or state-issued items, including a badge, indicating the employee's position for financial gain, to obtain privileges, or to avoid consequences of illegal acts;

(9) knowingly make misleading statements, either oral or written, or provide false information in the course of official state business; or

(10) engage in any political activity while on state time or use state resources for any political activity.

B. An (agency) employee shall:

(1) perform the employee's official duties in a lawful, professional, and ethical manner befitting the state and (agency); and

(2) report any conduct or activity that the employee believes to be in violation of this ethics policy to (agency designee).

Sec. 2263.052. MODEL ETHICS POLICY PROVISIONS FOR REGULATORY AGENCIES. Except as otherwise provided by law, a regulatory agency shall use the following model policy provisions in adopting an agency ethics policy that meets the standards of Section 572.054(b):

REGULATORY AGENCIES.

(1) In this ethics policy:

(a) "Business entity" means any entity recognized by law through which business for profit is conducted, including a sole proprietorship, partnership, firm, corporation, holding company, joint stock company, receivership, or trust.

(b) "Participated" means to have taken action through decision, approval, disapproval, recommendation, giving of advice, investigation, or similar action.

(c) "Particular matter" means a specific investigation, application, request for a ruling or determination, rulemaking proceeding, contract, claim, accusation, charge, arrest, or judicial or other proceeding.

(d) "Regulatory agency" means a department, commission, board, or other agency, other than the secretary of state or the comptroller of public accounts, that:

(i) is in the executive branch of state government;

(ii) has authority that is not limited to a geographical portion of this state;

(iii) was created by the Texas Constitution or a statute of this state; and

(iv) has constitutional or statutory authority to engage in regulation.

(2) A former employee of the (agency) who was compensated, as of the last date of state employment, at or above the amount prescribed by the General Appropriations Act for step 1, salary group A17, of the position classification salary schedule may not represent any person or entity, or receive compensation for services rendered on behalf of any person or entity, regarding a particular matter in which the former employee participated during the period of state service or employment, either through personal involvement or because the case or proceeding was a matter within the employee's official responsibility.

(3) Subsection (2) of this policy does not apply to a rulemaking proceeding that was conducted before the date the employee's service or employment ceased.

(4) Notwithstanding Subsection (1)(d) of this policy, Subsection (2) of this policy applies to employees of the secretary of state and the comptroller of public accounts.

(5) An association or organization of employees of the (agency) may not solicit, accept, or agree to accept anything of value from:

(a) a business entity regulated by the (agency) and from which the business entity must obtain a permit to operate the entity's business in this state; or

(b) an individual directly or indirectly connected with a business entity regulated by the (agency) and from which the business entity must obtain a permit to operate the entity's business in this state.

SUBCHAPTER C. ETHICS AND DISCLOSURE REQUIREMENTS

FOR CONTRACTORS

Sec. 2263.101. REQUIRED CONTRACTOR DISCLOSURE STATEMENT; STATE AGENCY EMPLOYEES. Before entering into a contract with the state, a contractor and subcontractor and must disclose each employee:

(1) who was employed by:

(A) the state at any time during the two years preceding the date of the disclosure and is now employed by the contractor or subcontractor; or

(B) the contractor or subcontractor at any time during the year preceding the date of the disclosure and is now employed by the state; and

(2) who is materially involved in the development of the contract terms or the management of the contract.

Sec. 2263.102. REQUIRED CONTRACTOR DISCLOSURE STATEMENT; OUTSOURCING. (a) Each contract entered into by a state agency must include a provision requiring disclosure of any services materially necessary to fulfill the contract, including services performed by a subcontractor, that will be or are performed in a country other than the United States. This section does not apply to services that are occasional, minor, or incidental to fulfilling the contract.

(b) The contract must include a provision allowing the state agency to terminate the contract and solicit a new contract, expect as provided by Subsection (d), if:

(1) the contractor or a subcontractor of the contractor performs a service materially necessary to fulfill the contract in a country other than the United States; and

(2) the contractor does not disclose in the contract that the service will be performed in a country other than the United States.

(c) A state agency that decides not to solicit a new contract under circumstances in which the agency is authorized to do so under a contract provision required by Subsection (b) shall report this decision to:

(1) the governor;

(2) the lieutenant governor;

(3) the speaker of the house of representatives;

(4) the Contract Advisory Team.

(d) A contractor may replace a subcontractor without termination of a contract under this section if the contractor determines that the subcontractor is performing a service materially necessary to fulfill the contract in a country other than the United States and did not disclose that fact to the contractor.

Sec. 2263.103. CONTRACTOR CONFLICTS OF INTEREST. (a) Each contractor who responds to a state agency's contract solicitation shall disclose in its response all potential conflicts of interest to the agency.

(b) The Contract Advisory Team shall develop guidelines to aid contractors and state agencies in identifying potential conflicts of interest.

SECTION 5. (a) Section 2263.101, Government Code, as added by this Act, applies only to a contract for which a state agency first advertises or otherwise solicits bids, proposals, offers, or qualifications on or after the effective date of this Act.

(b) Section 2263.103(a), Government Code, as added by this Act, applies only in relation to a contract for which a state agency first solicits bids, proposals, offers, or qualifications on or after the date that the Contract Advisory Team's guidelines regarding potential conflicts of interest take effect.

(c) A state agency is not required to comply with Section 2263.102, Government Code, as added by this Act, before September 1, 2015.

SECTION 6. This Act takes effect November 1, 2013.