86R979 ATP-F

By: Davis of Harris H.B. No. 784

A BILL TO BE ENTITLED

AN ACT

relating to conflicts of interest of members of state agency governing boards and governing officers; creating a criminal offense.

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

SECTION 1. Subtitle B, Title 5, Government Code, is amended by adding Chapter 576 to read as follows:

CHAPTER 576. CONFLICT OF INTEREST OF STATE AGENCY GOVERNING BOARD

MEMBER OR OFFICER

Sec. 576.001. DEFINITIONS. In this chapter:

(1) "Conflict of interest" means the conflict between an official decision made by a state agency governing board member or governing officer in the individual's official capacity and the individual's private financial interest in which the individual realizes any pecuniary gain.

(2) "Financial interest" means ownership or control, directly or indirectly, of an ownership interest of at least five percent in a person, including the right to share in profits, proceeds, or capital gains, or an ownership interest that an individual could reasonably foresee could result in any financial benefit to the individual. The term does not include an interest in a retirement plan, a blind trust, insurance coverage, or capital gains.

(3) "State agency" means a board, commission, council, committee, department, office, agency, or other governmental entity in the executive branch of state government.

Sec. 576.002. DUTY TO DISCLOSE AND REFRAIN FROM PARTICIPATION. (a) Except as provided by Subsection (b) or (c), in each matter before the governing board of a state agency or, if the agency is not governed by a multimember governing board, the officer who governs the agency, for which a member of the board or officer, as applicable, has a conflict of interest, the individual:

(1) shall disclose in writing the conflict of interest to the agency; and

(2) may not participate in the decision on the matter.

(b) If a majority of the members of the governing board of a state agency has a conflict of interest related to a matter before the board or, if the agency is not governed by a multimember governing board, the officer who governs the agency has a conflict of interest on the matter, the board or officer may decide the matter only if:

(1) each member, or the officer, as applicable, who has a conflict of interest discloses in writing the conflict of interest to the agency; and

(2) the board, or officer, as applicable, makes a finding that an emergency exists that requires a decision on the matter despite the conflict of interest.

(c) The duty to disclose a conflict of interest and refrain from participation in the decision on a matter for a member of the governing board of an institution of higher education, as those terms are defined by Section 61.003, Education Code, is governed by Section 51.923, Education Code.

Sec. 576.003. PUBLIC INFORMATION. A written disclosure made under Section 576.002 is public information.

Sec. 576.004. REPORT TO TEXAS ETHICS COMMISSION; RULES. (a) A state agency that receives a written disclosure under Section 576.002 shall file a copy of the disclosure with the Texas Ethics Commission.

(b) The Texas Ethics Commission may adopt the rules necessary to implement this chapter, including rules on the disclosure to be filed with the commission under Subsection (a).

Sec. 576.005. CRIMINAL PENALTY. (a) An individual commits an offense if the individual knowingly fails to comply with Section 576.002.

(b) An offense under this section is a Class B misdemeanor.

SECTION 2. Section 571.061(a), Government Code, is amended to read as follows:

(a) The commission shall administer and enforce:

(1) Chapters 302, 303, 305, 572, 576, and 2004;

(2) Subchapter C, Chapter 159, Local Government Code, in connection with a county judicial officer, as defined by Section 159.051, Local Government Code, who elects to file a financial statement with the commission;

(3) Title 15, Election Code; and

(4) Sections 2152.064 and 2155.003.

SECTION 3. This Act takes effect September 1, 2019.