HBA-ALS H.B. 930 76(R)BILL ANALYSIS


Office of House Bill AnalysisH.B. 930
By: Junell
State Affairs
4/4/1999
Committee Report (Substituted)



BACKGROUND AND PURPOSE 

Currently, a regional planning commission, also known as a council of
government (COG), is required to file with the governor's office an
independent financial audit, and each agency granting money to a COG is
responsible for reviewing the audit for allowable expenses when funding a
program.  However, no one agency or entity is responsible for reviewing the
entire budget for overall expenditures, efficiency, or performance.  To
date, Texas has not adopted any allowable indirect expenses and these
expenses are not audited by independent auditors.  Under the Appropriations
Act adopted by the 75th Legislature, COGs were made subject to state
government agency rules regarding the prohibition of state expenditures on
alcoholic beverages, political aid, and legislative influence; budgeting
and reporting; travel expenditures; annual reports and inventories; and
internal audit findings.  The purpose of this bill is to apply
administrative guidelines to COGs and to designate the governor's office as
the monitoring authority for all COGs.  

C.S.H.B. 930 requires the governor to adopt rules relating to a
commission's operations, receipt and expenditure of funds, annual reporting
requirements, standards for evaluating productivity and performance, and
review and comment procedure guidelines. This bill requires a commission to
annually report to the governor specified information relating to the
commission's funds, expenses, indirect costs,  productivity, and
performance, and authorizes the governor to appoint a receiver for failure
to comply with those reporting requirements.  This bill places restrictions
on a commission's expenditure of funds relating to travel, purchase of
alcoholic beverages, goods, and services, and indirect costs.  This bill
makes a commission's employees and officers subject to the same rules
regarding lobbying and advocacy activities as an officer or employee of a
state agency.  C.S.H.B. 930 requires a commission to adopt and submit to
the governor for objections and approval, a yearly salary schedule
containing specified information before its implementation of that
schedule.  This bill does not apply to a commission of a county having an
actual average weekly wage that exceeds the state's actual average weekly
wage by 20 percent or more for the previous year.  


RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that rulemaking
authority is expressly delegated to the governor in SECTION 1 (Section
391.009, Local Government Code) of this bill. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 391.009, Local Government Code, as follows:

Sec.  391.009.  ROLE OF GOVERNOR AND STATE AGENCIES.  (a) Requires the
governor, in order to protect the public interest or promote efficient use
of public funds, to adopt: 

(1)  rules relating to the operation and oversight of a commission;
(2) rules relating to the receipt or expenditure of funds by a commission
including specified restrictions on the expenditure of commission funds for
certain classes of expenses; 
(3)  annual reporting requirements for a commission;
(4)  annual audit requirements of all funds received or expended by a
commission; 
 (5)   rules relating to the establishment and use of standards for
evaluating the productivity and performance of each commission; and 
(6)  guidelines that are required to be followed by commissions and
governmental units in carrying out the provisions of this chapter relating
to review and comment procedures. 
Makes nonsubstantive changes.

(b)  Requires the governor and state agencies to provide technical
information and assistance to the members and staff of a commission to
ensure compliance with the rules, requirements, and guidelines adopted
under Subsection (a). 

SECTION 2.  Amends Chapter 391, Local Government Code, by adding Section
391.0095, as follows: 

Sec.  391.0095.  AUDIT AND REPORTING REQUIREMENTS.  (a) Requires the audit
and reporting requirements under Section 391.009(a) to include a
requirement that a commission annually report to the governor: 

(1) the amount and source of funds the commission receives;
(2) the amount and source of funds the commission expends;
(3) an explanation of the commission's method of computing its expenses and
indirect costs; 
(4) the commission's productivity and performance during the annual
reporting period; 
(5) a projection of the commission's productivity and performance during
the next annual reporting period; 
(6) the results of the commission's affairs compiled in an audit prepared
by an independent certified public accountant; and 
(7) any assets disposed of by the commission.

(b) Authorizes the annual audit of a commission to be commissioned by the
governor's office or the commission, as determined by the governor's
office, and requires the audit to be paid from the commission's funds. 

(c) Requires a commission to submit any other report or audit that is
required by the governor. 

(d) Authorizes the governor to appoint a receiver to operate or oversee a
commission or withhold any appropriated commission funds if the commission
fails to submit a required report or audit or comply with a rule,
requirement, or guideline under Section 391.009. 

(e) Requires a commission to send a copy of a required report or audit to
the state auditor, comptroller, and the Legislative Budget Board.  Requires
the governor to report to the state auditor for review any expenditure or
action of a commission that is questioned by the governor about its
appropriateness. 

SECTION 3.  Amends Section 391.011(d), Local Government Code, to delete
language that authorizes expending funds for the reimbursement of travel
expenses and automobile mileage that are incurred while a member of the
governing body of the commission is engaged in official commission
business. 

SECTION 4.  Amends Chapter 391, Local Government Code, by adding Sections
391.0115 to 391.0117, as follows: 

Sec.  391.0115.  RESTRICTIONS ON COMMISSION COSTS. (a) Prohibits a
commission from expending funds for commission personnel travel in excess
of the amount that may be expended for state personnel under the General
Appropriations Act or travel regulations adopted by the comptroller,
including restrictions on mileage reimbursement, per diem, and lodging
reimbursement rates. 

(b) Prohibits a commission from expending funds for the purchase of
alcoholic beverages  or entertainment. 

(c) Authorizes a commission to purchase goods or a service if the
commission complies with the same provisions that are equivalent to the
provisions applying to a local government, including Chapter 252
(Purchasing and Contracting Authority of Municipalities), Local Government
Code. 

(d) Prohibits a commission from spending on indirect costs an amount that
is more than 15 percent of the commission's total expenditures. Prohibits
the commission's capital expenditures and subcontracts, pass-throughs, or
subgrants from being considered in determining the commission's total
direct costs, for purposes of this subsection.  Defines "pass-through
funds" for purposes of this subsection.  

(e) Defines "indirect costs," and requires the governor, in administering
this section, to use the federal Office of Management and Budget circulars
A-87 and A-122 or to use rules relating to the determination of indirect
costs under Chapter 783 (Uniform Grant and Contract Management), Government
Code.   
  
Sec. 391.0116.  RESTRICTIONS ON EMPLOYMENT. Provides that an employee of a
commission is subject to the same rules regarding lobbying and advocacy
activities as an employee of any state agency.  Provides that the nepotism
provisions under Chapter 573 (Degrees of Relationship; Nepotism
Prohibitions), Government Code, apply to a commission. 

Sec. 391.0117.  SALARY SCHEDULES.  (a) Requires a commission to adopt a
salary schedule, for each fiscal year, that contains a classification
salary schedule for classified positions and identifies and specifies the
salaries for positions exempt from the classification salary schedule. 

(b) Prohibits the salary schedule for classified positions  adopted by the
commission from exceeding the state salary schedule for classified
positions as prescribed by the General Appropriations Act adopted by the
most recent legislature.  Authorizes a commission to adopt a salary
schedule which is less than the state salary schedule.   

(c) Prohibits a salary of a classified position from exceeding the state
salary approved by the state auditor's office and paid by the state for
comparable work. 

(d) Provides that a position may only be exempted from the classification
salary schedule adopted by the commission if the exemption and amount of
salary paid is within the appropriate range for state exempt positions, as
determined by the state auditor. 

(e) Requires the commission to submit the commission's salary schedule to
the governor no later than the 45th day before the beginning of the
commission's fiscal year.  Prohibits a portion of the commission's salary
schedule that is objected to by the governor from going into effect until
the governor is given satisfactory revisions or explanations and the
governor approves that portion of the schedule.   

(f) Provides that this section does not apply to a commission if the most
populous county that is a member of the commission has an actual average
weekly wage exceeding the state's actual average weekly wage by 20 percent
or more for the previous year as determined by the Texas Workforce
Commission in its County Employment and Wage Information Report.  

SECTION 5.   Effective date: September 1, 1999.

SECTION 6.  Requires the governor to adopt rules, requirements, and
guidelines required by Sections 391.009 and 391.0095, Local Government
Code, as amended or added by this Act, by January 1, 2000.  Requires an
entity which is required to file an audit or a report under Sections
391.009 or 391.0095, Local Government Code, as amended or added by this
Act, to file the initial  audit or report by September 1, 2000. 

SECTION 7.  Emergency clause. 

COMPARISON OF ORIGINAL TO SUBSTITUTE

SECTION 1.  The substitute modifies the original bill by deleting proposed
Subsection (c), which required the governor to appoint one member to each
commission. 

SECTION 2.  The substitute modifies the original bill by adding new
Subsection (b), authorizing the annual audit of a commission to be
commissioned by the governor's office or the commission, as determined by
the governor's office, and requiring that the audit be funded from the
commission's funds.  Redesignates proposed Subsection (c) of the original
to Subsection (d) of the substitute, and modifies proposed Subdivision (2)
to authorize the governor to withhold any of the commission's appropriated
funds if the commission fails to submit a required report or audit, or
comply with a rule, requirement, or guideline under Section 391.009.
Redesignates proposed Subsections (b) and (d) of the original to
Subsections (c) and (e) of the substitute. 

SECTION 4.

Sec. 391.0115. The substitute modifies the original bill by redesignating
proposed Subsection (d) of the original to Subsection (c) of the
substitute.  Adds language authorizing a commission to purchase goods or
services if the commission complies with the same provisions that apply to
a local government, rather than with those rules that apply to the purchase
of goods or a service by a state agency, including Chapter 252, Local
Government Code, rather than Chapters 2155 (Purchasing: General Rules and
Procedures), 2156 (Purchasing Methods), 2157 (Purchasing: Purchase of
Automated Information Systems), and 2158 (Purchasing: Miscellaneous
Provisions for Purchase of Certain Goods and Services), Government Code.
Redesignates proposed Subsection (e) of the original to Subsection (d) of
the substitute, and makes changes to prohibit a commission from spending an
amount greater than 15 percent of the commission's total expenditures on
its indirect costs. Prohibits the consideration of a commission's capital
expenditures and subcontracts, pass-throughs, or subgrants in determining
the commission's total direct costs, for purposes of this subsection.
Defines "pass-through funds" for purposes of this subsection. Requires the
governor, in administering this section, to use the federal Office of
Management and Budget circulars A-87 and A-122 or to use rules relating to
the determination of indirect costs under Chapter 783, Government Code
(Uniform Grant and Contract Management). Deletes poposed Subsection(e) of
the original bill which prohibited a commission from spending on indirect
costs an amount that is more than the lesser of 20 percent of the
commissions's direct personnel costs or 10 percent of the commission's
total direct costs. Redesignates proposed Subsection (a) of the original to
Subsection (e) of the substitute. Makes nonsubstantive changes. 

Sec. 391.0116.  The substitute modifies this section of the original bill
by deleting language which provided that an officer of a commission is
subject to the same rules regarding lobbying and advocacy activities as an
officer of any state agency.  

Sec. 391.0117. The substitute redesignates proposed Subsection (c) of the
original to Subsection (b), and adds language which prohibits the salary
schedule for classified positions adopted by the commission from exceeding
the state salary schedule for classified positions as prescribed by the
General Appropriations Act adopted by the most recent legislature.
Authorizes a commission to adopt a salary schedule which is less than the
state salary schedule.  Deletes porposed Subsection (b) from the original
bill which provided that the salary schedule for classified positions
adopted by the commission must be identical to the state salary schedule
for classified positions as prescribed by the general appropriations act
adopted by the most recent legislature.  In proposed Subsection (e), the
substitute requires the commission to submit its salary schedule to the
governor, rather than to the governor for approval.  Prohibits any portion
of the commission's salary schedule that is objected to by the governor
from going into effect until the governor receives satisfactory revisions
or  explanations and the governor approves that portion of the schedule.
Deletes language from the original bill which prohibited a commission from
implementing a salary schedule without the governor's approval.  Adds new
Subsection (f) stating that this section does not apply to a commission if
the most populous county that is a member of the commission has an actual
average weekly wage exceeding the state's actual average weekly wage by 20
percent or more for the previous year as determined by the Texas Workforce
Commission in its County Employment and Wage Information Report. Makes
conforming and nonsubstantive changes.