HBA-ALS H.B. 930 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 930 By: Junell State Affairs 2/18/1999 Introduced 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. 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. H.B. 930 requires a commission to adopt and submit to the governor for approval, a yearly salary schedule containing specified information before its implementation of that schedule. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the Governor of the State of Texas in SECTION 1 (Section 391.009, Local Government Code) and SECTION 6 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). (c) Requires the governor to appoint one member to each commission. 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) Requires a commission to submit any other report or audit that is required by the governor. (c) Authorizes the governor to appoint a receiver to operate or oversee a commission or withhold any 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. (d) 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) Defines "indirect costs." (b) Prohibits a commission from expending funds for commission personnel travel in excess of the amount that may be expended for state personnel pursuant to the general appropriations act or travel regulations adopted by the comptroller, including restrictions on mileage reimbursement, per diem, and lodging reimbursement rates. (c) Prohibits a commission from expending funds for the purchase of alcoholic beverages or entertainment. (d) Authorizes a commission to purchase goods or a service if the commission complies with provisions that apply to the purchase of goods or services by a state agency, including 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. (e) Prohibits 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. Sec. 391.0116. RESTRICTIONS ON EMPLOYMENT. Provides that an officer or employee of a commission is subject to the same rules regarding lobbying and advocacy activities, as an officer or employee of any state agency. Provides that the nepotism provisions under Chapter 573, Government Code (Degrees of Relationship; Nepotism Prohibitions), 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) Provides 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. (c) Prohibits a salary of a classified position from exceeding the 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 exempt positions, as determined by the state auditor. (e) Requires the commission to submit the commission's salary schedule to the governor for approval, no later than the 45th day before the beginning of the commission's fiscal year. Prohibits a commission from implementing a salary schedule without the governor's approval. 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.