Bill Text: TX HB3736 | 2015-2016 | 84th Legislature | Enrolled

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Bill Title: Relating to conflicts of interest by members of state agency governing boards and governing officers and the contents and amendment of financial statements filed by certain persons; creating a criminal offense.

Sponsorship: Partisan Bill (Republican 3)

Status: (Vetoed) 2015-06-20 - Vetoed by the Governor [HB3736 Detail]

Download: Texas-2015-HB3736-Enrolled.html

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H.B. No. 3736

AN ACT
relating to conflicts of interest by members of state agency
governing boards and governing officers and the contents and
amendment of financial statements filed by certain persons;
creating a criminal offense.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 572.023, Government Code, is amended by
amending Subsections (a) and (b) and adding Subsection (e) to read
as follows:
(a) A financial statement must include an account of the
financial activity for the preceding calendar year of:
(1) any property characterized as separate property
under Section 3.001, Family Code, of the individual required by
this subchapter to file a financial statement;
(2) any community property of which the individual
required by this subchapter to file a financial statement has sole
management, control, and disposition as provided by Section
3.102(a), Family Code;
(3) any community property of the individual required
by this subchapter to file a financial statement, if the individual
exercised both factual and legal control over the activity; and
(4) [an account of the financial activity of] the
individual's [spouse and] dependent children if the individual
exercised or held the right to exercise any degree of legal or
factual [had actual] control over that activity [for the preceding
calendar year].
(b) The account of financial activity consists of:
(1) a list of all sources of occupational income,
identified by employer, or if self-employed, by the nature of the
occupation, including identification of a person or other
organization from which the individual or a business in which the
individual has a substantial interest received a fee as a retainer
for a claim on future services in case of need, as distinguished
from a fee for services on a matter specified at the time of
contracting for or receiving the fee, if professional or
occupational services are not actually performed during the
reporting period equal to or in excess of the amount of the
retainer, and the category of the amount of the fee;
(2) identification by name and the category of the
number of shares of stock of any business entity held or acquired,
and if sold, the category of the amount of net gain or loss realized
from the sale;
(3) a list of all bonds, notes, and other commercial
paper held or acquired, and if sold, the category of the amount of
net gain or loss realized from the sale;
(4) identification of each source and the category of
the amount of income in excess of $500 derived from each source from
interest, dividends, royalties, and rents;
(5) identification of each guarantor of a loan and
identification of each person or financial institution to whom a
personal note or notes or lease agreement for a total financial
liability in excess of $1,000 existed at any time during the year
and the category of the amount of the liability;
(6) identification by description of all beneficial
interests in real property and business entities held or acquired,
and if sold, the category of the amount of the net gain or loss
realized from the sale;
(7) identification of a person or other organization
from which the individual or the individual's spouse or dependent
children received a gift of anything of value in excess of $250 and
a description of each gift, except:
(A) a gift received from an individual related to
the individual at any time within the second degree by
consanguinity or affinity, as determined under Subchapter B,
Chapter 573;
(B) a political contribution that was reported as
required by Chapter 254, Election Code; and
(C) an expenditure required to be reported by a
person required to be registered under Chapter 305;
(8) identification of the source and the category of
the amount of all income received as beneficiary of a trust, other
than a blind trust that complies with Subsection (c), and
identification of each trust asset, if known to the beneficiary,
from which income was received by the beneficiary in excess of $500;
(9) identification by description and the category of
the amount of all assets and liabilities of a corporation, firm,
partnership, limited partnership, limited liability partnership,
professional corporation, professional association, joint venture,
or other business association in which 50 percent or more of the
outstanding ownership was held, acquired, or sold;
(10) a list of all boards of directors of which the
individual is a member and executive positions that the individual
holds in corporations, firms, partnerships, limited partnerships,
limited liability partnerships, professional corporations,
professional associations, joint ventures, or other business
associations or proprietorships, stating the name of each
corporation, firm, partnership, limited partnership, limited
liability partnership, professional corporation, professional
association, joint venture, or other business association or
proprietorship and the position held;
(11) identification of any person providing
transportation, meals, or lodging expenses permitted under Section
36.07(b), Penal Code, and the amount of those expenses, other than
expenditures required to be reported under Chapter 305;
(12) any corporation, firm, partnership, limited
partnership, limited liability partnership, professional
corporation, professional association, joint venture, or other
business association, excluding a publicly held corporation, in
which both the individual and a person registered under Chapter 305
have an interest;
(13) identification by name and the category of the
number of shares of any mutual fund held or acquired, and if sold,
the category of the amount of net gain or loss realized from the
sale; [and]
(14) identification of each blind trust that complies
with Subsection (c), including:
(A) the category of the fair market value of the
trust;
(B) the date the trust was created;
(C) the name and address of the trustee; and
(D) a statement signed by the trustee, under
penalty of perjury, stating that:
(i) the trustee has not revealed any
information to the individual, except information that may be
disclosed under Subdivision (8); and
(ii) to the best of the trustee's knowledge,
the trust complies with this section;
(15) if the aggregate cost of goods or services sold
under one or more written contracts described by this subdivision
exceeds $10,000 in the year covered by the report, identification
of each written contract, including the name of each party to the
contract:
(A) for the sale of:
(i) goods in the amount of $2,500 or more;
or
(ii) services, including professional
services as defined by Section 2254.002, consulting services as
defined by Section 2254.021, or legal counsel, in the amount of
$5,000 or more;
(B) to which the individual or any business
entity of which the individual has at least a 50 percent ownership
interest is a party; and
(C) with:
(i) a governmental entity; or
(ii) a person who contracts with a
governmental entity, to fulfill one or more of the person's
obligations to the governmental entity under that contract;
(16) if the individual is a member of the legislature
and provides bond counsel services to an issuer, as defined by
Section 1201.002(1), identification of the following for each
issuance for which the individual served as bond counsel:
(A) the amount of the issuance;
(B) the name of the issuer;
(C) the date of the issuance;
(D) the amount of fees paid to the individual,
and whether the amount is:
(i) less than $5,000;
(ii) at least $5,000 but less than $10,000;
(iii) at least $10,000 but less than
$25,000; or
(iv) $25,000 or more; and
(E) the amount of fees paid to the individual's
firm, if applicable, and whether the amount is:
(i) less than $5,000;
(ii) at least $5,000 but less than $10,000;
(iii) at least $10,000 but less than
$25,000; or
(iv) $25,000 or more; and
(17) identification of any other source of earned or
unearned income not reported under another provision of this
subsection, including public benefits or a pension, individual
retirement account, or other retirement plan, and the category of
the amount of income derived from each source.
(e) In this section, "governmental entity" means the state,
a political subdivision of the state, or an agency or department of
the state or a political subdivision of the state.
SECTION 2. Subchapter B, Chapter 572, Government Code, is
amended by adding Section 572.0295 to read as follows:
Sec. 572.0295. AMENDMENT OF STATEMENT. (a) A person who
files a financial statement under this chapter may amend the
statement.
(b) A financial statement that is amended before the eighth
day after the date the original statement was filed is considered to
have been filed on the date on which the original statement was
filed.
SECTION 3. Subtitle B, Title 5, Government Code, is amended
by adding Chapter 576 to read as follows:
CHAPTER 576. CONFLICT OF INTEREST BY STATE AGENCY GOVERNING BOARD
MEMBER OR OFFICER
Sec. 576.001. DEFINITIONS. In this chapter:
(1) "Conflict of interest" means the conflict between
an official decision made by a state agency governing board member
or governing officer in the individual's official capacity and the
individual's private financial interest in which the individual
realizes any pecuniary gain, if the pecuniary gain accrued to the
individual as a member of a class of persons, including an
occupation, profession, or industry, to a greater extent than any
other member of the class.
(2) "Financial interest" means ownership or control,
directly or indirectly, of an ownership interest of at least five
percent in a person, including the right to share in profits,
proceeds, or capital gains, or an ownership interest that an
individual could reasonably foresee could result in any financial
benefit to the individual. The term does not include an interest in
a retirement plan, a blind trust, insurance coverage, or capital
gains.
(3) "Rule" means all or part of a statement of a state
agency that is of general or particular applicability and of future
effect designed to implement, interpret, or prescribe law or policy
for the state agency or to describe the organization, procedure, or
practice requirements of the state agency.
(4) "State agency" means a board, commission, council,
committee, department, office, agency, or other governmental
entity in the executive branch of state government.
Sec. 576.002. DUTY TO DISCLOSE AND REFRAIN FROM
PARTICIPATION. (a) Except as provided by Subsection (b) or (c), in
each matter before the governing board of a state agency or, if the
agency is not governed by a multimember governing board, the
officer who governs the agency, for which a member of the board or
officer, as applicable, has a conflict of interest, the individual:
(1) shall disclose in writing the conflict of interest
to the agency; and
(2) may not participate in the decision on the matter.
(b) If a majority of the members of the governing board of a
state agency has a conflict of interest related to a matter before
the board or, if the agency is not governed by a multimember
governing board, the officer who governs the agency has a conflict
of interest on the matter, the board or officer may decide the
matter only if:
(1) each member, or the officer, as applicable, who
has a conflict of interest discloses in writing the conflict of
interest to the agency; and
(2) the board, or officer, as applicable, makes a
finding that an emergency exists that requires a decision on the
matter despite the conflict of interest.
(c) The duty to disclose a conflict of interest and refrain
from participation in the decision on a matter for a member of the
governing board of an institution of higher education, as those
terms are defined by Section 61.003, Education Code, is governed by
Section 51.923, Education Code.
Sec. 576.003. PUBLIC INFORMATION. A written disclosure
made under Section 576.002 is public information.
Sec. 576.004. REPORT TO TEXAS ETHICS COMMISSION; RULES.
(a) A state agency that receives a written disclosure under Section
576.002 shall file a copy of the disclosure with the Texas Ethics
Commission.
(b) The Texas Ethics Commission may adopt the rules
necessary to implement this chapter, including rules on the
disclosure to be filed with the commission under Subsection (a).
Sec. 576.005. CRIMINAL PENALTY. (a) An individual commits
an offense if the individual knowingly fails to comply with Section
576.002.
(b) An offense under this section is a Class B misdemeanor.
Sec. 576.006. EXEMPTION. This chapter does not apply to:
(1) the consideration of a proposed rule; or
(2) a vote to adopt a proposed rule.
SECTION 4. Section 571.061(a), Government Code, is amended
to read as follows:
(a) The commission shall administer and enforce:
(1) Chapters 302, 303, 305, 572, 576, and 2004;
(2) Subchapter C, Chapter 159, Local Government Code,
in connection with a county judicial officer, as defined by Section
159.051, Local Government Code, who elects to file a financial
statement with the commission;
(3) Title 15, Election Code; and
(4) Sections 2152.064 and 2155.003.
SECTION 5. The changes in law made by this Act apply only to
a financial statement filed under Subchapter B, Chapter 572,
Government Code, as amended by this Act, on or after September 1,
2015. A financial statement filed before September 1, 2015, is
governed by the law in effect on the date of filing, and the former
law is continued in effect for that purpose.
SECTION 6. This Act takes effect September 1, 2015.
______________________________ ______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 3736 was passed by the House on May
11, 2015, by the following vote: Yeas 135, Nays 0, 2 present, not
voting; that the House refused to concur in Senate amendments to
H.B. No. 3736 on May 28, 2015, and requested the appointment of a
conference committee to consider the differences between the two
houses; and that the House adopted the conference committee report
on H.B. No. 3736 on May 31, 2015, by the following vote: Yeas 141,
Nays 0, 2 present, not voting.
______________________________
Chief Clerk of the House
I certify that H.B. No. 3736 was passed by the Senate, with
amendments, on May 26, 2015, by the following vote: Yeas 31, Nays
0; at the request of the House, the Senate appointed a conference
committee to consider the differences between the two houses; and
that the Senate adopted the conference committee report on H.B. No.
3736 on May 31, 2015, by the following vote: Yeas 28, Nays 3.
______________________________
Secretary of the Senate
APPROVED: __________________
Date
__________________
Governor