By: Hinojosa, et al. S.B. No. 217
(In the Senate - Filed March 5, 2015; March 10, 2015, read
first time and referred to Committee on Business and Commerce;
March 30, 2015, rereferred to Committee on Finance; April 13, 2015,
reported adversely, with favorable Committee Substitute by the
following vote: Yeas 14, Nays 0; April 13, 2015, sent to printer.)
Click here to see the committee vote
COMMITTEE SUBSTITUTE FOR S.B. No. 217 By: Hinojosa
A BILL TO BE ENTITLED
AN ACT
relating to the self-directed and semi-independent status of
certain agencies and to the requirements applicable to, and the
oversight of, those agencies.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Sections 472.001 and 472.002, Government Code,
are amended to read as follows:
Sec. 472.001. APPLICABILITY OF CHAPTER. This chapter
applies to:
(1) the Texas State Board of Public Accountancy;
(2) the Texas Board of Professional Engineers; [and]
(3) the Texas Board of Architectural Examiners;
(4) the Texas Real Estate Commission;
(5) the Texas Appraiser Licensing and Certification
Board;
(6) the Texas Department of Banking;
(7) the Department of Savings and Mortgage Lending;
(8) the Office of Consumer Credit Commissioner; and
(9) the Credit Union Department.
Sec. 472.002. DEFINITIONS [DEFINITION]. In this chapter:
(1) "Agency"[, "agency"] means an agency listed in
Section 472.001.
(2) "Board" means the Legislative Budget Board.
(3) "Financial regulatory agency" means an agency
described by Sections 472.001(6)-(9).
SECTION 2. Subchapter A, Chapter 472, Government Code, is
amended by adding Sections 472.003, 472.004, 472.005, and 472.006
to read as follows:
Sec. 472.003. STATUS AND OVERSIGHT OF CERTAIN AGENCIES.
This chapter does not affect:
(1) the Texas Appraiser Licensing and Certification
Board's status as an independent subdivision of the Texas Real
Estate Commission as provided by Section 1103.051, Occupations
Code; or
(2) the oversight of a financial regulatory agency by
that agency's governing body or the agency's accountability to, and
relationship with, that governing body.
Sec. 472.004. ROLE OF BOARD; RECOVERY OF COSTS. (a) The
board has responsibility under this chapter for developing and
administering the application process, monitoring agencies, and
performing other duties provided under this chapter.
(b) The board may recover from an agency the costs
associated with administering the application process for the
agency and the board's monitoring of the agency.
Sec. 472.005. APPLICATION FOR SELF-DIRECTED AND
SEMI-INDEPENDENT AGENCY STATUS; AUDIT REQUIRED. (a) Before a
state agency may be granted self-directed and semi-independent
status, the agency must:
(1) submit an application to the board; and
(2) undergo a financial audit and an effectiveness
audit as required under Subsection (e).
(b) A state agency may not submit the application required
under Subsection (a) until the agency's governing body:
(1) provides notice and holds a public hearing on the
application; and
(2) approves, by majority vote, the submission of the
application.
(c) The application must be submitted to the board as part
of the agency's legislative appropriations request.
(d) The application shall be in the form prescribed by the
board, which must require the agency applying for self-directed and
semi-independent status to:
(1) state the reasons for which the agency is seeking
self-directed and semi-independent status and address any
potential problems that may result from granting that status; and
(2) include, as relevant to the agency's application:
(A) information demonstrating the agency's
history of efficient operation and continuing ability to operate
efficiently and in a manner that protects the public interest;
(B) documentation of adequate budgetary
processes and controls; and
(C) an analysis of the fiscal effect on state
revenue and other state agencies demonstrating that the agency's
status as self-directed and semi-independent would be revenue
neutral.
(e) A state agency must undergo a financial audit and an
effectiveness audit by the state auditor during the four-year
period preceding the date the agency submits an application under
Subsection (a). The state auditor shall conduct the financial
audit and effectiveness audit and make the findings of the
completed audits available to the board.
(f) The board may require an agency to submit additional
information necessary to evaluate the agency's ability to operate
effectively as a self-directed and semi-independent agency.
Sec. 472.006. REVIEW OF APPLICATION AND RECOMMENDATION.
(a) The board's staff shall promptly review an application
submitted under Section 472.005. The staff review shall determine
whether the agency's application is sufficient and whether the
agency's application should be granted or denied.
(b) The board's staff shall submit the staff's
recommendation as to whether the agency's application should be
granted or denied to the board. The board may recommend to the
committee of each house of the legislature that has jurisdiction
over appropriations that legislation be introduced to grant
self-directed and semi-independent status to the agency.
SECTION 3. Section 472.051(c), Government Code, is amended
to read as follows:
(c) The Sunset Advisory Commission shall examine each
agency's status and performance as a self-directed and
semi-independent agency and the agency's compliance with this
chapter as part of the commission's periodic review of the agency
under Chapter 325 (Texas Sunset Act).
SECTION 4. Subchapter B, Chapter 472, Government Code, is
amended by adding Sections 472.052 and 472.053 to read as follows:
Sec. 472.052. REVIEW OF SELF-DIRECTED AND SEMI-INDEPENDENT
AGENCIES. (a) The board's staff and the board shall review each
agency's annual report submitted under Section 472.104(b) and any
additional information requested by the board and received from the
agency to determine the agency's compliance with this chapter.
(b) The board's staff may make a recommendation to the
committee of each house of the legislature that has jurisdiction
over appropriations and to the legislature to address issues
identified during a review conducted under this section, except
that the staff may not recommend the revocation of an agency's
self-directed and semi-independent status.
(c) The board may recommend that legislation be introduced
to revoke an agency's self-directed and semi-independent status or
otherwise address issues raised by the board. A recommendation to
revoke an agency's self-directed and semi-independent status may be
based on the agency's conduct, including:
(1) material abuse by the agency of its self-directed
and semi-independent status; or
(2) fiscal mismanagement.
Sec. 472.053. REVOCATION OF SELF-DIRECTED AND
SEMI-INDEPENDENT STATUS. (a) The board may develop criteria for
determining when a recommendation for the revocation of an agency's
self-directed and semi-independent status is appropriate. The
board may recommend the revocation of an agency's self-directed and
semi-independent status to the legislature as provided by Section
472.052(c). If the board recommends revocation of an agency's
self-directed and semi-independent status, the agency shall have
the opportunity to respond in writing to that recommendation.
(b) The Sunset Advisory Commission may recommend revocation
of an agency's self-directed and semi-independent status to the
legislature as part of the commission's periodic review of the
agency under Chapter 325 (Texas Sunset Act).
(c) The legislature may consider legislation to revoke an
agency's self-directed and semi-independent status regardless of
whether the revocation is recommended by the board or the Sunset
Advisory Commission.
(d) The board shall assist an agency in transitioning from
self-directed and semi-independent status if the agency's status is
revoked. The board may consider issues relating to appropriations
and financial planning for the agency, and an evaluation of the
status and disposition of agency contracts, facilities,
properties, and leases when assisting an agency under this
subsection.
SECTION 5. Section 472.102, Government Code, is amended by
adding Subsection (d) to read as follows:
(d) Not later than August 31 of each state fiscal year, the
Texas Real Estate Commission and the Texas Appraiser Licensing and
Certification Board together shall remit $750,000 to the general
revenue fund.
SECTION 6. Section 472.103, Government Code, is amended to
read as follows:
Sec. 472.103. AUDITS. Nothing in this chapter shall affect
the duty of the state auditor to audit an agency. The state auditor
shall enter into a contract and schedule with each agency to conduct
audits, including financial audits [reports] and effectiveness
[performance] audits. The schedule must require an agency to
undergo a financial audit and an effectiveness audit at least once
every six years, unless the state auditor determines that the
auditor may rely on an independent audit of the agency conducted
during the same period. The state auditor may conduct a risk-based
audit of an agency at any time. Costs incurred in performing such
audits shall be reimbursed by the agency.
SECTION 7. Section 472.104, Government Code, is amended by
amending Subsection (b) and adding Subsection (c) to read as
follows:
(b) In addition to the reporting requirements of Subsection
(a), each agency shall, in the form prescribed by the board, report
annually, not later than November 20 [1], to the governor, to the
committee of each house of the legislature that has jurisdiction
over appropriations, and to the board [Legislative Budget Board]
the following:
(1) the salary for all agency personnel and the total
amount of per diem expenses and travel expenses paid for all agency
employees, including trend performance data for the preceding five
fiscal years;
(2) the total amount of per diem expenses and travel
expenses paid for each member of the governing body of each agency,
including trend performance data for the preceding five fiscal
years;
(3) each agency's operating plan covering a period of
two fiscal years;
(4) each agency's operating budget, including revenues
from all sources, an accounting of all expenditures, and a
breakdown of expenditures by program and administrative expenses,
showing:
(A) projected budget data for a period of two
fiscal years; and
(B) trend performance data for the preceding five
fiscal years; [and]
(5) the purchase or sale of any real property during
the year;
(6) any lease and maintenance costs associated with
real property owned or leased by the agency;
(7) for an agency other than a financial regulatory
agency, trend performance data for the preceding five fiscal years
regarding:
(A) the number of full-time equivalent positions
at the agency;
(B) the number of complaints received from the
public and the number of complaints initiated by agency staff;
(C) the number of complaints dismissed and the
number of complaints resolved by enforcement action;
(D) the number of enforcement actions by sanction
type;
(E) the number of enforcement cases closed
through voluntary compliance;
(F) the amount of administrative penalties
assessed and the rate of collection of assessed administrative
penalties;
(G) the number of enforcement cases that allege a
threat to public health, safety, or welfare or a violation of
professional standards of care and the disposition of those cases;
(H) the average time to resolve a complaint;
(I) the number of license holders or regulated
persons broken down by type of license and license status,
including inactive status or retired status;
(J) the fee charged to issue and renew each type
of license, certificate, permit, or other similar authorization
issued by the agency;
(K) the average time to issue a license;
(L) litigation costs, broken down by
administrative hearings, judicial proceedings, and outside counsel
costs; and
(M) reserve fund balances; and
(8) for a financial regulatory agency, trend
performance data for the preceding five fiscal years regarding:
(A) the number of full-time equivalent positions
at the agency;
(B) the number of complaints received;
(C) the number of complaints dismissed or
resolved and, of those complaints, the number resolved by
enforcement action;
(D) the number of enforcement actions by type;
(E) the amount of administrative penalties
assessed and the amount of administrative penalties collected;
(F) the number of entities regulated by the
agency;
(G) the fee charged to issue and renew each type
of license, certificate, permit, or other similar authorization
issued by the agency, or any assessments paid to the agency by the
holder of a license, certificate, permit, or other similar
authorization issued by the agency;
(H) litigation costs, broken down by
administrative hearings, judicial proceedings, and outside counsel
costs;
(I) reserve fund balances; and
(J) the key performance measures approved by the
governing board of the agency during the fiscal year for which the
report is due.
(c) If, based on a review of an agency's annual report
submitted as required under Subsection (b), the board determines
that additional information is necessary to address an issue
identified during the review, the board may require an agency to
submit information to the board demonstrating the agency's:
(1) ability to perform those duties that are required
of the agency by its enabling statute or a related duty contained in
another law;
(2) financial soundness, including the agency's
ability to raise sufficient revenue, maintain sufficient operating
reserves, and meet all of the agency's financial obligations;
(3) compliance with the provisions of this chapter;
and
(4) satisfactory audit history, including a summary of
any corrective action taken by the agency in response to an audit.
SECTION 8. Section 472.105, Government Code, is amended to
read as follows:
Sec. 472.105. DISPOSITION OF CERTAIN FEES COLLECTED.
(a) Subject to Subsection (b), if [If] provided in an agency's
enabling legislation, the agency shall collect annually from its
license holders:
(1) a professional fee of $200 [from its license
holders annually], which shall be remitted to the state; and
(2)[. If provided in an agency's enabling legislation,
the agency shall collect] a scholarship fee of $10 [annually from
its license holders].
(b) A fee increase described by Section 1101.153,
Occupations Code, shall be deposited as provided by Subsection (b)
of that section.
SECTION 9. Section 472.108, Government Code, is amended to
read as follows:
Sec. 472.108. PROPERTY. An agency may:
(1) acquire by purchase, lease, gift, or any other
manner provided by law and maintain, use, and operate[,] any real,
personal, or mixed property, or any interest in property, necessary
or convenient to the exercise of the powers, rights, privileges, or
[and] functions of the agency;
(2) sell or otherwise dispose of any real, personal,
or mixed property, or any interest in property, that the agency
determines is not necessary or convenient to the exercise of the
agency's powers, rights, privileges, or functions;
(3) construct, extend, improve, maintain, and
reconstruct, or cause to construct, extend, improve, maintain, and
reconstruct, and use and operate all facilities necessary or
convenient to the exercise of the powers, rights, privileges, or
functions of the agency; and
(4) borrow money, as may be authorized from time to
time by an affirmative vote of a two-thirds majority of the
policy-making body of the agency, for a period not to exceed five
years if necessary or convenient to the exercise of the agency's
powers, rights, privileges, or functions.
SECTION 10. Sections 472.110(b) and (d), Government Code,
are amended to read as follows:
(b) Except as provided by Section 472.105 and this
subsection, all [All] fees and funds collected by an agency, any
funds appropriated to the agency, and any other funds belonging to
or under the control of an agency shall be deposited in
interest-bearing deposit accounts in the Texas Treasury
Safekeeping Trust Company. The comptroller shall contract with the
agency for the maintenance of the deposit accounts under terms
comparable to a contract between a commercial banking institution
and its customers. An agency may not hold funds in an account that
is not under the control of the comptroller. This subsection does
not apply to funds held by an agency under Section 13.016, 154.351,
154.353, 154.412, 156.501, 157.0201, 341.602, or 393.628, Finance
Code.
(d) An agency shall remit all administrative penalties
collected by the agency to the comptroller for deposit in the
general revenue fund. This subsection does not apply to the Texas
Real Estate Commission, the Texas Appraiser Licensing and
Certification Board, or a financial regulatory agency.
SECTION 11. Section 16.001, Finance Code, is amended to
read as follows:
Sec. 16.001. SELF-DIRECTED AND SEMI-INDEPENDENT STATUS OF
FINANCIAL REGULATORY AGENCIES [DEFINITIONS]. (a) A financial
regulatory agency has self-directed and semi-independent status as
provided under Chapter 472, Government Code.
(b) For purposes of [In] this chapter and Chapter 472,
Government Code:
(1) "Financial regulatory agency" means:
(A) the Texas Department of Banking;
(B) the Department of Savings and Mortgage
Lending;
(C) the Office of Consumer Credit Commissioner;
and
(D) the Credit Union Department.
(2) "Policy-making body" means:
(A) the Finance Commission of Texas for:
(i) the Texas Department of Banking;
(ii) the Department of Savings and Mortgage
Lending; and
(iii) the Office of Consumer Credit
Commissioner; and
(B) the Credit Union Commission for the Credit
Union Department.
SECTION 12. Sections 1105.001 and 1105.002, Occupations
Code, are amended to read as follows:
Sec. 1105.001. DEFINITIONS. In this chapter [section]:
(1) "Agency" means the commission and the board.
(2) "Board" means the Texas Appraiser Licensing and
Certification Board.
(3) "Commission" means the Texas Real Estate
Commission.
Sec. 1105.002. SELF-DIRECTED AND SEMI-INDEPENDENT STATUS.
(a) Notwithstanding any other provision of law, the agency is
self-directed and semi-independent as specified by Chapter 472,
Government Code. [this chapter. Any Act of the 82nd Legislature
that relates to the agency and that is inconsistent with the agency
being self-directed and semi-independent may be implemented by the
administrator of the agency only on authorization by the agency.]
(b) Chapter 472, Government Code, [This chapter] does not
affect the board's status as an independent subdivision of the
commission as provided by Section 1103.051.
SECTION 13. The following are repealed:
(1) Sections 16.002, 16.003, 16.004, 16.005, 16.006,
16.007, 16.008, 16.009, 16.010, 16.011, and 16.012, Finance Code;
and
(2) Sections 1105.003, 1105.004, 1105.005, 1105.006,
1105.007, 1105.008, 1105.009, 1105.010, 1105.011, and 1105.012,
Occupations Code.
SECTION 14. Section 472.104, Government Code, as amended by
this Act, applies only to a report originally due on or after the
effective date of this Act. A report originally due before the
effective date of this Act is governed by the law in effect on the
date the report was originally due, and the former law is continued
in effect for that purpose.
SECTION 15. The repeal by this Act of Section 16.006,
Finance Code, and Section 1105.006, Occupations Code, does not
affect the validity of a contract entered into under those sections
before the effective date of this Act.
SECTION 16. This Act takes effect September 1, 2015.
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