Texas 2017 - 85th Regular

Texas House Bill HB1295 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	85R8600 YDB-F
2	2	By: Capriglione H.B. No. 1295
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the disclosure of interested parties by business
8	8	entities contracting with governmental entities and state
9	9	agencies; authorizing a civil penalty.
10	10	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	11	SECTION 1. The heading to Section 2252.908, Government
12	12	Code, is amended to read as follows:
13	13	Sec. 2252.908. DISCLOSURE OF INTERESTED PARTIES; CIVIL
14	14	PENALTY.
15	15	SECTION 2. Section 2252.908(a), Government Code, is amended
16	16	by amending Subdivisions (1), (2), and (3) and adding Subdivisions
17	17	(1-a), (1-b), (3-a), (3-b), (3-c), and (5) to read as follows:
18	18	(1) "Business entity" means any entity recognized by
19	19	law through which business is conducted with a governmental entity
20	20	or state agency. The term includes [, including] a sole
21	21	proprietorship, partnership, or corporation. The term does not
22	22	include the United States, a federal agency, a state agency, or
23	23	another governmental entity.
24	24	(1-a) "Contract" means a binding agreement between a
25	25	governmental entity or state agency and a business entity effective
26	26	on the earlier of the date the governing body of the governmental
27	27	entity or state agency votes to approve the contract or the date the
28	28	governmental entity or state agency becomes bound under the
29	29	contract. The term includes an amendment to or an extension or
30	30	renewal of the contract.
31	31	(1-b) "Controlling interest" means:
32	32	(A) an ownership or participating interest in a
33	33	business entity represented by a unit, percentage, share, stock, or
34	34	other acknowledgment of ownership or participating interest in an
35	35	amount that exceeds five percent of the total ownership or
36	36	participating interest in the business entity;
37	37	(B) membership on the board of directors or other
38	38	governing body of a business entity, provided the composition of
39	39	the board or governing body does not exceed 10 members; or
40	40	(C) service as an officer of a business entity
41	41	that has not more than four officers or service as one of the four
42	42	highest ranking officers of a business entity with more than four
43	43	officers, excluding an officer of a publicly held business entity
44	44	or its wholly owned subsidiary.
45	45	(2) "Governmental entity" means a municipality,
46	46	county, public school district, open-enrollment charter school, or
47	47	special-purpose district or authority.
48	48	(3) "Interested party" means a person who has a
49	49	controlling interest in a business entity with whom a governmental
50	50	entity or state agency contracts or who is an [actively
51	51	participates in facilitating the contract or negotiating the terms
52	52	of the contract, including a broker,] intermediary[, adviser, or
53	53	attorney] for the business entity.
54	54	(3-a) "Intermediary" means a person who actively
55	55	participates in facilitating or negotiating a contract, including a
56	56	broker, adviser, attorney, or agent for or representative of a
57	57	business entity, and who:
58	58	(A) receives compensation from the business
59	59	entity for the person's participation;
60	60	(B) communicates directly regarding the contract
61	61	with the governmental entity or state agency for the business
62	62	entity; and
63	63	(C) is not:
64	64	(i) an employee of the business entity or of
65	65	a person with a controlling interest in the business entity; or
66	66	(ii) an interested party with a controlling
67	67	interest in the business entity.
68	68	(3-b) "Person" has the meaning assigned by Section
69	69	311.005.
70	70	(3-c) "Signed" includes the use of any symbol executed
71	71	or adopted by a person that is evidence of present intent to
72	72	authenticate a writing, including an electronic signature.
73	73	(5) "Value" means, with respect to a contract, the
74	74	amount of consideration received or to be received by a business
75	75	entity from a governmental entity or state agency under the
76	76	contract.
77	77	SECTION 3. Section 2252.908, Government Code, is amended by
78	78	amending Subsections (b), (c), (e), and (f) and adding Subsections
79	79	(d-1), (e-1), (h), and (i) to read as follows:
80	80	(b) This section applies only to a contract of a
81	81	governmental entity or state agency that requires the expenditure
82	82	of the governmental entity's or state agency's money and that:
83	83	(1) requires an action or vote by the governing body of
84	84	the entity or agency before the contract may be signed; or
85	85	(2) has a value of at least $1 million.
86	86	(c) Notwithstanding Subsection (b), this section does not
87	87	apply to:
88	88	(1) a sponsored research contract of an institution of
89	89	higher education;
90	90	(2) an interagency contract of a state agency or an
91	91	institution of higher education; [or]
92	92	(3) a contract related to health and human services
93	93	if:
94	94	(A) the value of the contract cannot be
95	95	determined at the time the contract is executed; and
96	96	(B) any qualified vendor is eligible for the
97	97	contract;
98	98	(4) a contract with a publicly traded business entity,
99	99	including a wholly owned subsidiary of the business entity;
100	100	(5) a contract related to a state of disaster declared
101	101	by the governor under Section 418.014 that requires an immediate
102	102	disbursement of state money to preserve or protect the public
103	103	health or safety, to preserve property, or for public necessity;
104	104	(6) a contract that is necessary to prevent
105	105	unforeseen, imminent damage to public machinery, equipment, or
106	106	other property;
107	107	(7) a contract related to a subsequent sale of a
108	108	municipal bond after the initial bond sale;
109	109	(8) a contract with a federally insured financial
110	110	institution;
111	111	(9) a contract with an electric utility as that term is
112	112	defined by Section 31.002, Utilities Code;
113	113	(10) a contract with a gas utility engaged in the
114	114	wholesale business of transporting or distributing gas for public
115	115	consumption;
116	116	(11) a contract for an insurance policy regulated by
117	117	the Texas Department of Insurance that is purchased by a
118	118	governmental entity or state agency;
119	119	(12) an interlocal contract of a local governmental
120	120	entity; or
121	121	(13) a contract related to a public security, as that
122	122	term is defined by Section 1201.002, that is not a debt.
123	123	(d-1) A business entity that submits a disclosure of
124	124	interested parties under Subsection (d) shall submit a modified
125	125	disclosure of interested parties for the contract if there is any
126	126	change from the interested parties previously disclosed. The
127	127	modified disclosure must be submitted on or before the next
128	128	anniversary of the date the signed contract was submitted to the
129	129	governmental entity or state agency under Subsection (d) that
130	130	occurs after the change in interested parties.
131	131	(e) The disclosure of interested parties or modified
132	132	disclosure of interested parties must be submitted on a form
133	133	prescribed by the Texas Ethics Commission that includes:
134	134	(1) a list of each interested party for the contract of
135	135	which the contracting business entity is aware; and
136	136	(2) a written, unsworn declaration subscribed by [the
137	137	signature of] the authorized agent of the contracting business
138	138	entity as true[, acknowledging that the disclosure is made under
139	139	oath and] under penalty of perjury that is in substantially the
140	140	following form:
141	141	"My name is ________________________________, my
142	142	date of birth is _________________, and my address is
143	143	_____________, ____________, _________, ____________,
144	144	(Street) (City) (State) (Zip Code)
145	145	__________________. I declare under penalty of
146	146	(Country)
147	147	perjury that the foregoing is true and correct.
148	148	Executed in _______ County, State of ________, on
149	149	the ________ day of ________, ________.
150	150	(Month) (Year)
151	151	____________________
152	152	Declarant".
153	153	(e-1) The written, unsworn declaration described by
154	154	Subsection (e)(2) may be executed using the electronic signature of
155	155	the authorized agent of the contracting business entity.
156	156	(f) Not later than the 30th day after the date the parties
157	157	become bound under a contract for which a disclosure of interested
158	158	parties is filed or the date a modified disclosure of interested
159	159	parties is filed [governmental entity or state agency receives a
160	160	disclosure of interested parties required under this section], the
161	161	governmental entity or state agency shall submit [a copy of the
162	162	disclosure] to the Texas Ethics Commission an acknowledgment that
163	163	the governmental entity or state agency has received the disclosure
164	164	or modified disclosure, as applicable.
165	165	(h) A business entity that fails to submit to a governmental
166	166	entity or state agency a disclosure of interested parties or
167	167	modified disclosure of interested parties required by this section
168	168	is liable for a civil penalty of $500 for the first day the
169	169	violation occurs and $100 for each additional day the violation
170	170	occurs, not to exceed the lesser of the total amount prescribed by
171	171	rule or $10,000. The governmental entity or state agency shall
172	172	immediately notify the Texas Ethics Commission if a business entity
173	173	fails to submit a disclosure or modified disclosure on or before the
174	174	30th day after the date the disclosure is due. The commission shall
175	175	immediately provide to the business entity written notice of the
176	176	violation and civil penalty. If the business entity fails to submit
177	177	the disclosure or modified disclosure on or before the 10th day
178	178	after the date the notice is provided, the business entity is liable
179	179	to this state for the civil penalty.
180	180	(i) The attorney general, at the request of the Texas Ethics
181	181	Commission, may sue to collect a civil penalty imposed under
182	182	Subsection (h). The attorney general and the commission may
183	183	recover reasonable expenses incurred in obtaining a civil penalty
184	184	under that subsection, including investigation and court costs,
185	185	reasonable attorney's fees, witness fees, and other expenses.
186	186	SECTION 4. Not later than December 1, 2017, the Texas Ethics
187	187	Commission shall adopt rules and modify the disclosure of
188	188	interested parties form as necessary to comply with the changes in
189	189	law made by this Act.
190	190	SECTION 5. The changes in law made by this Act apply only to
191	191	a contract entered into or amended on or after January 1, 2018.
192	192	SECTION 6. This Act takes effect September 1, 2017.