HBA-JLV H.B. 2914 77(R)BILL ANALYSIS Office of House Bill AnalysisH.B. 2914 By: Bonnen Ways & Means 8/9/2001 Enrolled BACKGROUND AND PURPOSE Each legislative session, the comptroller of public accounts (comptroller) makes recommendations to the legislature to streamline and enhance the agency's administration of the state's fiscal matters. House Bill 2914 makes technical and policy changes to several statutes relating to the state's fiscal management and the comptroller's powers and duties to administer those laws. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the state energy conservation office in SECTION 18 (Section 447.002, Government Code), to the Product Development and Small Business Incubator Board in SECTION 19 (Sections 403.410 and 403.413), to the comptroller of public accounts in SECTION 24 (Section 659.308, Government Code), SECTION 42 (Section 2113.205, Government Code), SECTION 54 (Section 2251.026, Government Code), SECTION 57 (Section 2252.903, Government Code), and in SECTION 60 (Section, 2305.011, Government Code), and to the Texas Natural Resource Conservation Commission in SECTION 78 (Section 382.051865, Health and Safety Code) of this bill. ANALYSIS House Bill 2914 amends the Business & Commerce, Education, Finance, Government, Health and Safety, Tax, and Utilities codes to make technical and policy changes relating to the state's fiscal management and the comptroller of public account's (comptroller) powers and duties to administer those laws. The bill amends the Business & Commerce Code to provide that any requirement of the Department of Information Resources that generally applies to one or more state agencies using electronic records or electronic signatures is considered to be a recommendation to the comptroller concerning the electronic records or electronic signatures used by the comptroller. The bill authorizes the comptroller to adopt or decline to adopt the recommendation (Sec. 43.020). The bill amends the Education Code to provide that the comptroller is no longer prohibited from issuing a warrant or initiating an electronic funds transfer to a person properly reported to the comptroller or to the person's assignee, the person's estate, the distributees of the person's estate, or the person's surviving spouse if the Texas Guaranteed Student Loan Corporation consents to the issuance of the warrant or initiation of the transfer (Sec. 57.48). The bill amends the Finance Code to provide that individuals appointed to official committees are entitled to reimbursement for reasonable and necessary expenses incidental to travel that occurred in connection with the performance of official duties (Sec. 15.407). The bill amends the Government Code to prohibit a statute from being construed as a waiver of sovereign immunity unless the waiver is effected by clear and unambiguous language in order to preserve the legislature's intent (Sec. 311.034). The bill authorizes the comptroller to establish a procedure for a person to use a digital signature to authenticate a document, a communication, or data submitted to the comptroller if the digital signature is unique to the person using it, capable of independent verification, under the sole control of the person using it, and transmitted in a manner that makes it infeasible to change the signature, document, communication, or data without invalidating the signature. The bill provides that the electronic approval of a voucher is governed by these provisions if the comptroller has established a procedure for the person approving the voucher or is governed by provisions governing expenditures by state agencies (Sec. 403.027). The bill sets forth provisions relating to the comptroller's authority regarding intellectual property and requires the comptroller to establish intellectual property policies for the comptroller's office (Sec. 403.030). The bill authorizes a state agency to consent to the comptroller's issuance of a warrant or initiation of a direct deposit to a person that the agency had previously reported to the comptroller as having an indebtedness to the state or a tax delinquency. If the agency does not consent, the comptroller is still prohibited from issuing the warrant or initiating the direct deposit (Sec. 403.055). The bill sets forth provisions relating to state financing of the development and production of Texas biotechnological and biomedical products and small businesses and provides for the issuance of bonds. The bill establishes the Product Development and Small Business Incubator Board (board) in the comptroller's office and requires the board to administer the product development and small business incubator programs (programs) and their respective funds (Sec. 403.402). The bill sets forth provisions for the appointment, terms of office, removal, and training of the members of the board, which includes the comptroller of public accounts (comptroller) (Secs. 403.403-404.405). The bill sets forth provisions regarding the administration, powers, and duties of the board (Secs. 403.406-403.409). The bill provides the financing requirements to fund the programs and authorizes the board to adopt rules, policies, and procedures necessary or reasonable to implement these provisions (Secs. 403.410-403.412). The bill provides that financing may be made only for a product or small business approved by the board. In determining eligible products and small businesses, the board is required to give special preference to products or businesses in the areas of biotechnology and biomedicine that have the greatest likelihood of commercial success, job creation, and job retention in this state. The bill requires the board to give further preference in providing financing to projects or businesses that are: grantees under the small business innovation research program; companies formed in this state to commercialize research funded at least in part with state funds; companies formed in this state and receiving assistance from designated state small business development centers; or applicants who are residents of this state doing business in this state and performing financed activities predominantly in this state. The bill also sets forth provisions regarding the application process to receive financing, confidentiality of information produced to receive financing, and the coordination of the programs (Secs. 403.413-404.416). The bill provides that the warrant number of an outstanding warrant is excepted from public disclosure requirements if the warrant is issued by the comptroller. The bill authorizes the person who issues a warrant to disclose the warrant number of the warrant to a person other than the comptroller only if the comptroller has informed the person that the warrant is not an outstanding warrant or if the comptroller has authorized or required the disclosure (Sec. 404.058). The bill authorizes the Texas treasury safekeeping trust company (trust company) to hire employees, to fix their compensation and prescribe their duties, or to contract with the comptroller's office for staff support. The trust company is required to develop a fee schedule in the amount necessary to recover costs of service and to retain adequate reserves to support the operations of the trust company. The bill provides that the trust company is exempt from other state law regulating or limiting state purchasing or a purchasing decision if the trust company determines that the purchase or decision relates to the fiduciary duties of the trust company. The bill requires the trust company to make all purchases of goods and services using purchasing methods that ensure the best value to the trust company and its participants. In determining the best value, the trust company is authorized to consider the best value standards applicable to state agencies. The bill requires the trust company to develop a plan of operation that includes procedures and standards for the purchases of goods and services using best value methods (Sec. 404.103). The bill authorizes the trust company to contract with a certified public accountant to conduct an independent audit of the trust company (Sec. 404.104). The bill requires the trust company to hold capital stock and reserve balances outside the treasury for participation in a depository trust company. The bill prohibits the stock of the trust company from exceeding $1 million (Sec. 404.105). The bill authorizes the trust company to hold reserve balances or securities as required by the Federal Reserve System or as required for participation in a depository trust company (Sec. 404.106). The bill requires certain agencies and local political subdivisions to pay established fees on the trust company's fee schedule (Sec. 404.107). The comptroller is authorized to appoint an investment advisory board (advisory board) to advise the comptroller with respect to managing assets held by the trust company. The bill sets forth the composition of the advisory board, removal of certain members, requirements for appointment as an advisory board member, and restrictions on advisory board appointment, membership, and employment (Secs. 404.108 and 404.110). The bill provides for the administration, powers, and duties of the advisory board (Secs. 404.112-404.116). The bill provides that the energy management center is established as the state energy conservation office (office) under the direction and control of the comptroller and sets forth provisions authorizing the office to establish procedures and adopt rules relating to energy conservation. The bill requires the office to provide assistance to a state agency in implementing energy conservation measures. The bill requires a state agency or institution of higher education (institution) to present a plan to the office and use the plan in preparing construction and major renovation plans (Secs. 447.001-447.011). Each August, the comptroller is required to estimate the amount to be transferred to the foundation school fund on or before September 15 and to transfer the estimated amount to the foundation school fund before August installment payments are made (Sec. 466.355). The bill decreases, from five to three, the number of years of lifetime service credit that a state employee must accrue in order to receive longevity pay to be included in the employee's monthly compensation (Sec. 659.043). The bill sets forth provisions authorizing the Texas Youth Commission (TYC) to pay a TYC employee certain amounts of longevity pay and hazardous duty pay (Sec. 659.044). The bill provides that the amount of an employee's lifetime service credit does not include the period served in a hazardous duty position if the employee is entitled to receive hazardous duty pay or is receiving the maximum amount of hazardous duty pay that the commission may pay to the employee (Sec. 659.046). The bill sets forth provisions relating to hazardous duty pay in the Government Code (Sec. 659.301-659.308). The bill removes provisions prohibiting an employee from advancing to a step number in a new salary group higher than the step number rate held before the reallocation or reclassification if the employee's salary group is divided into steps by the General Appropriations Act (Sec. 659.254). The bill prohibits a state employee from being temporarily reassigned to a position classified in a salary group with a lower minimum salary rate (Sec. 659.260). The bill requires each state agency to adopt policies to ensure that an employee's performance expectations are linked to the goals in the agency's strategic plan (Sec. 659.2551). The bill sets forth provisions establishing a task force to evaluate employee compensation systems (Sec. 659.2552). The bill provides that an individual is entitled to reimbursement for certain expenses while performing the duties of the individual's office or employment if the individual is a member of the Texas Natural Resource Conservation Commission, the Texas Workforce Commission, the Public Utility Commission of Texas, the Board of Pardons and Paroles, or the Sabine River Compact Administration, or a full-time member of a board and receives a salary from the state for service on that board (Sec. 660.203). The bill sets forth provisions relating to recovering excess compensation paid to a state officer or employee (Sec. 666.001-666.007). The bill sets forth provisions authorizing a state agency to recover the amount of a state employee's indebtedness by reducing future gross pay. The bill sets forth provisions authorizing the comptroller to recover the amount of a state employee's indebtedness to a state agency (Sec. 666.002). The bill sets forth provisions to provide when an indebtedness is incurred. The bill provides that the provisions neither authorizes nor prohibits a state employee or the employee's successor from assigning the employee's or successor's right or eligibility to receive compensation (Sec. 666.006). The bill provides that a state agency's approval of a voucher includes the agency's approval of any interest that must be paid at the same time the principal amount is paid to a vendor (Sec. 2103.004). The bill sets forth provisions relating to payments by a state agency to debtors or delinquents. The bill authorizes a state agency to issue a payment to a person that is indebted to the state or has a tax delinquency and is also authorized to issue any part of that payment to the person's estate, the distributees of the person's estate, or the person's surviving spouse. The bill provides that a state agency is not prohibited from making a payment if each state agency that properly reported the person to the comptroller consents to the payment (Sec. 2107.008). The bill authorizes a state agency to use money appropriated for a particular fiscal year to pay expenses related to conducting a seminar or conference that will occur partly or entirely during a different fiscal year, if it is cost-effective to do so. The bill authorizes a state agency to use money appropriated for a particular fiscal year to pay the entire cost or amount of a periodical subscription, a maintenance contract, a post office box rental, insurance, or a surety or honesty bond. The bill also authorizes a state agency to use money appropriated for a particular fiscal year to pay for a utility service provided during that fiscal year and September of the next fiscal year. The bill authorizes the comptroller to establish procedures and adopt rules to administer these provisions (Sec. 2113.205). The bill deletes provisions prohibiting a state agency from accepting a bid or awarding a contract to certain out-of-state individuals and business entities unless they hold a sales and use tax permit issued by the comptroller or certify that they do not sell taxable property or services (Sec. 2155.004). The bill modifies provisions to require the state energy conservation office, rather than the energy management center of the governor's office, to assist a governing body of a state agency, commission, or institution in preparing energy conservation standards by providing technical assistance and advice (Sec. 2166.402). The bill requires the General Services Commission (commission) to establish procedures and adopt rules to administer provisions relating to the payment of goods and services, except that the commission is prohibited from establishing a procedure or adopting a rule that conflicts with a procedure established or a rule adopted by the comptroller (Sec. 2251.003). The bill provides that the renewal, amendment, or extension of a contract is considered to be the execution of a new contract executed on or before September 1, 1993, for the purposes of prompt payment by a governmental entity (Sec. 2251.021). The bill authorizes a state agency to pay interest to a vendor in the amount specified in the contract between the agency and the vendor, but only if that amount is less than the amount specified in the prompt payment statutes. The bill requires interest to accrue on a payment to a vendor during the period that the comptroller is prohibited from issuing a payment to the vendor because of its tax delinquency, indebtedness to the state, child support delinquency, or student loan default. The bill requires that these provisions take effect on the date the comptroller files a certification with the secretary of state. The bill requires the secretary of state to publish the certification in the Texas Register (Sec. 2251.025). The bill sets forth provisions relating to the payment of interest by a state agency and requires a state agency to determine the amount of interest owed to a vendor by the agency if the amount is based on the contract between the vendor and the agency. The bill provides that a state agency is liable for any interest that accrues on an overdue payment and requires the state agency to pay the interest from funds appropriated or otherwise available to the agency at the same time the principal is paid. The bill requires the comptroller or state agency to submit the interest payment with the net amount due for the goods and services. The bill authorizes the comptroller to establish procedures and adopt rules to administer the portion of prompt payment provisions that govern interest payments by the comptroller on behalf of state agencies (Sec. 2251.026). The bill requires a state agency to determine whether a payment law prohibits the comptroller from issuing a warrant or initiating an electronic funds transfer to a person before an agency enters into a written contract with that person. The bill requires the agency to make the determination not later than the seventh day before and not later than the date of entering the contract. If the agency determined that a payment law prohibited the comptroller from issuing a payment to a person, the agency is prohibited from entering into the contract unless it required the agency's payments under the contract to be applied directly toward eliminating the person's debt or delinquency. The bill authorizes the comptroller to adopt rules and establish procedures to administer these provisions (Sec. 2252.903). The bill provides that the legislature retains the authority to deny or grant a waiver of immunity to suit against a unit of state government by statute, resolution, or any other means the legislature may determine appropriate (Sec. 2260.007). The bill amends the Health and Safety Code to require the Texas Natural Resource Conservation Commission (TNRCC), by rule, to develop a program for the reduction of emissions of nitrogen oxides from reciprocating internal combustion engines associated with pipelines that are required to reduce hourly emissions of nitrogen oxides by at least 50 percent. TNRCC may authorize the executive director to enter into contracts with a public agency, private person, or other entity for the purpose of implementing the emissions reduction program. The emissions reduction program may include incentives as developed by TNRCC for nitrogen oxides emissions reduction projects for reciprocating internal combustion engines, including a partial reimbursement for the capital cost of installing technology to reduce the emissions. The bill sets forth criteria for determining eligibility for an emissions reduction project incentive under the program. The bill provides that an emissions reduction project must be initiated on or before September 1, 2006, and completed before March 1, 2007. The bill prohibits TNRCC from paying or providing a financial incentive for an emissions reduction project before the project is complete. The bill prohibits TNRCC from paying or providing a financial incentive on or after March 1, 2007. Gifts or contributions by an electric utility or an affiliated power generating company to a program shall be considered tangible or intangible capital costs to improve air quality, deemed to be incurred before January 1, 2002, included in the electric utility's generation-related invested capital, and deemed to be a cost to offset the emission of airborne contaminants from electric generating facilities. The bill provides that these provisions expire March 1, 2007. The bill requires the comptroller to establish an emissions reductions incentives account (Sec. 382.051865). The bill transfers the collection of certain 9-1-1 fees, emergency services fees, and equalization surcharges from the Commission on State Emergency Communications to the comptroller (Secs. 771.071, 771.0711, 771.072, 771.073, and 771.077). The bill exempts the federal government from fees or surcharges authorized by state or local emergency communications or a home-rule municipality (Sec. 771.074). The bill authorizes the comptroller to audit a service provider without first receiving notification of irregularity from the Commission on State Emergency Communications (Sec. 771.076). The bill amends the Occupations Code to provide that money in the law enforcement standards and education fund account at the end of the state fiscal year, other than money encumbered by the Commission on Law Enforcement Officer Standards and Education and money allocated by the comptroller used for continuing education, shall be transferred to the general revenue fund (Sec. 1701.156). The bill amends the Tax Code to provide that a local revenue fund is no longer eligible to accrue credit interest (Sec. 111.064). The bill authorizes a governmental entity to file a claim for a refund of the state hotel occupancy tax paid by the entity only on a fiscal year basis (Sec. 156.154). The bill requires the comptroller to submit a biennial report to the governor, lieutenant governor, and the speaker of the house of representatives about franchise tax credits claimed by corporations for certain capital investments (Sec. 171.837). The bill provides that all functions and activities performed by the General Services Commission that relate to energy conservation, under provisions governing the energy management center and restitutions for oil overcharges, are transferred to the comptroller (SECTION 95). The bill amends the Government Code to increase, from $4 to $20, the monthly amount of longevity pay for public officers for every three years of lifetime service credit (Sec. 659.044). EFFECTIVE DATE June 15, 2001. The bill also provides other implementation dates for certain sections of the bill.