84R23304 SCL-F
	By: Davis of Harris	H.B. No. 23
	Substitute the following for H.B. No. 23:
	By:  Collier	C.S.H.B. No. 23

	A BILL TO BE ENTITLED
	AN ACT
	relating to disclosure of certain relationships with local
	government officers and vendors; creating criminal offenses.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Section 176.001, Local Government Code, is
	amended by amending Subdivisions (1), (2), (2-a), (2-b), (3), and
	(4) and adding Subdivisions (2-c), (2-d), and (7) to read as
	follows:
	(1)  "Agent" means a third party who undertakes to
	transact some business or manage some affair for another person by
	the authority or on account of the other person. The term includes
	an employee.
	(2)  "Family member" means a person related to another
	person within the first degree by consanguinity or affinity, as
	described by Subchapter B, Chapter 573, Government Code[, except
	that the term does not include a person who is considered to be
	related to another person by affinity only as described by Section
	573.024(b), Government Code].
	(2-a)  "Family relationship" means a relationship
	between a person and another person within the third degree by
	consanguinity or the second degree by affinity, as those terms are
	defined by Subchapter B, Chapter 573, Government Code.
	(2-b) "Gift" means a benefit offered by a person,
	including food, lodging, transportation, and entertainment
	accepted as a guest.  The term does not include a benefit offered on
	account of kinship or a personal, professional, or business
	relationship independent of the official status of the recipient
	by:
	(A)  a local government officer or a family member
	of the officer to another local government officer of the same local
	governmental entity or a family member of that officer; or
	(B)  a vendor or a family member of the vendor to
	another vendor of the same local governmental entity or a family
	member of that vendor.
	(2-c) "Goods" means personal property.
	(2-d) [(2-b)]  "Investment income" means dividends,
	capital gains, or interest income generated from:
	(A)  a personal or business:
	(i)  checking or savings account;
	(ii)  share draft or share account; or
	(iii)  other similar account;
	(B)  a personal or business investment; or
	(C)  a personal or business loan.
	(3)  "Local governmental entity" means a county,
	municipality, school district, charter school, junior college
	district, water district created under Subchapter B, Chapter 49,
	Water Code, or other political subdivision of this state or a local
	government corporation, board, commission, district, or authority
	to which a member is appointed by the commissioners court of a
	county, the mayor of a municipality, or the governing body of a
	municipality.  The term does not include an association,
	corporation, or organization of governmental entities organized to
	provide to its members education, assistance, products, or services
	or to represent its members before the legislative, administrative,
	or judicial branches of the state or federal government.
	(4)  "Local government officer" means:
	(A)  a member of the governing body of a local
	governmental entity;
	(B)  a director, superintendent, administrator,
	president, or other person designated as the executive officer of a
	[the] local governmental entity; or
	(C)  an agent [employee] of a local governmental
	entity who exercises discretion in the planning, recommending,
	selecting, or contracting of a vendor [with respect to whom the
	local governmental entity has, in accordance with Section 176.005,
	extended the requirements of Sections 176.003 and 176.004].
	(7)  "Vendor" means a person who enters or seeks to
	enter into a contract with a local governmental entity.  The term
	includes a person who seeks to influence, on behalf of a vendor, the
	contract award made by a local governmental entity, or is an agent
	of a vendor. The term includes an officer or employee of a state
	agency when that individual is acting in a private capacity to enter
	into a contract. The term does not include a state agency except
	for Texas Correctional Industries.
	SECTION 2.  The heading to Section 176.002, Local Government
	Code, is amended to read as follows:
	Sec. 176.002.  APPLICABILITY TO [CERTAIN] VENDORS AND OTHER
	PERSONS.
	SECTION 3.  Sections 176.002(a) and (b), Local Government
	Code, are amended to read as follows:
	(a)  This chapter applies to a person who is:
	(1)  a vendor [enters or seeks to enter into a contract
	with a local governmental entity]; or
	(2)  a local government officer [is an agent] of [a
	person described by Subdivision (1) in the person's business with]
	a local governmental entity.
	(b)  A person is not subject to the disclosure requirements
	of this chapter if the person is:
	(1)  a state, a political subdivision of a state, the
	federal government, or a foreign government; or
	(2)  an employee or agent of an entity described by
	Subdivision (1), acting in the employee's or agent's official
	capacity.
	SECTION 4.  Section 176.003, Local Government Code, is
	amended by amending Subsections (a) and (a-1) and adding Subsection
	(a-2) to read as follows:
	(a)  A local government officer shall file a conflicts
	disclosure statement with respect to a vendor [person described by
	Section 176.002(a)] if:
	(1)  the vendor [person] enters into a contract with
	the local governmental entity or the local governmental entity is
	considering entering into a contract with the vendor [person]; and
	(2)  the vendor [person]:
	(A)  has an employment or other business
	relationship with the local government officer or a family member
	of the officer that results in the officer or family member
	receiving taxable income, other than investment income, that
	exceeds $2,500 during the 12-month period preceding the date that
	the officer becomes aware that:
	(i)  a contract between the local
	governmental entity and vendor [described by Subdivision (1)] has
	been executed; or
	(ii)  the local governmental entity is
	considering entering into a contract with the vendor [person]; [or]
	(B)  has given to the local government officer or
	a family member of the officer one or more gifts that have an
	aggregate value of more than $100 [$250] in the 12-month period
	preceding the date the officer becomes aware that:
	(i)  a contract between the local
	governmental entity and vendor [described by Subdivision (1)] has
	been executed; or
	(ii)  the local governmental entity is
	considering entering into a contract with the vendor; or
	(C)  has a family relationship with the local
	government officer [person].
	(a-1)  A local government officer is not required to file a
	conflicts disclosure statement in relation to a gift accepted by
	the officer or a family member of the officer if the gift is:
	(1)  [given by a family member of the person accepting
	the gift;
	[(2)]  a political contribution as defined by Title 15,
	Election Code; or
	(2) [(3)]  food[, lodging, transportation, or
	entertainment] accepted as a guest.
	(a-2)  A local government officer is not required to file a
	conflicts disclosure statement under Subsection (a) if the local
	governmental entity or vendor described by that subsection is an
	administrative agency created under Section 791.013, Government
	Code.
	SECTION 5.  Section 176.004, Local Government Code, is
	transferred to Section 176.003, Local Government Code,
	redesignated as Section 176.003(e), Local Government Code, and
	amended to read as follows:
	(e)  [Sec. 176.004.  CONTENTS OF DISCLOSURE STATEMENT.] The
	commission shall adopt the conflicts disclosure statement for local
	government officers for use under this section.  The conflicts
	disclosure statement must include:
	(1)  a requirement that each local government officer
	disclose:
	(A)  an employment or other business relationship
	described by Subsection (a)(2)(A) [Section 176.003(a)], including
	the nature and extent of the relationship; and
	(B)  gifts accepted by the local government
	officer and any family member of the officer from a vendor [person
	described by Section 176.002(a)] during the 12-month period
	described by Subsection (a)(2)(B) [Section 176.003(a)(2)(B)] if
	the aggregate value of the gifts[, excluding gifts described by
	Section 176.003(a-1),] accepted by the officer or a family member
	from that vendor exceeds $100 [person exceed $250];
	(2)  an acknowledgment from the local government
	officer that:
	(A)  the disclosure applies to each family member
	of the officer; and
	(B)  the statement covers the 12-month period
	described by Subsection (a)(2)(B) [Section 176.003(a)]; and
	(3)  the signature of the local government officer
	acknowledging that the statement is made under oath under penalty
	of perjury.
	SECTION 6.  Section 176.006, Local Government Code, is
	amended by amending Subsections (a), (a-1), (b), (c), (d), and (i)
	and adding Subsection (e) to read as follows:
	(a)  A vendor [person described by Section 176.002(a)] shall
	file a completed conflict of interest questionnaire if the vendor
	[person] has a business relationship with a local governmental
	entity and:
	(1)  has an employment or other business relationship
	with a local government [an] officer of that local governmental
	entity, or a family member of the officer, described by Section
	176.003(a)(2)(A); [or]
	(2)  has given a local government [an] officer of that
	local governmental entity, or a family member of the officer, one or
	more gifts with the aggregate value specified by Section
	176.003(a)(2)(B), excluding any gift described by Section
	176.003(a-1);
	(3)  has a family relationship with a local government
	officer of that local governmental entity; or
	(4)  the amount of a contract that is either executed or
	under consideration between the vendor and that local governmental
	entity exceeds $1 million.
	(a-1)  The completed conflict of interest questionnaire must
	be filed with the appropriate records administrator not later than
	the seventh business day after the later of:
	(1)  the date that the vendor [person]:
	(A)  begins discussions or negotiations to enter
	into a contract with the local governmental entity; or
	(B)  submits to the local governmental entity an
	application, response to a request for proposals or bids,
	correspondence, or another writing related to a potential contract
	with the local governmental entity; or
	(2)  the date the vendor [person] becomes aware:
	(A)  of an employment or other business
	relationship with a local government officer, or a family member of
	the officer, described by Subsection (a); [or]
	(B)  that the vendor [person] has given one or
	more gifts described by Subsection (a); or
	(C)  of a family relationship with a local
	government officer.
	(b)  The commission shall adopt a conflict of interest
	questionnaire for use under this section that requires disclosure
	of a vendor's [person's] business and family relationships with a
	local governmental entity.
	(c)  The questionnaire adopted under Subsection (b) must
	require, for the local governmental entity with respect to which
	the questionnaire is filed, that the vendor [person] filing the
	questionnaire:
	(1)  describe each employment or business and family
	relationship the vendor [person] has with each local government
	officer of the local governmental entity;
	(2)  identify each employment or business relationship
	described by Subdivision (1) with respect to which the local
	government officer receives, or is likely to receive, taxable
	income, other than investment income, from the vendor [person
	filing the questionnaire];
	(3)  identify each employment or business relationship
	described by Subdivision (1) with respect to which the vendor
	[person filing the questionnaire] receives, or is likely to
	receive, taxable income, other than investment income, that:
	(A)  is received from, or at the direction of, a
	local government officer of the local governmental entity; and
	(B)  is not received from the local governmental
	entity; and
	(4)  describe each employment or business relationship
	with a corporation or other business entity with respect to which a
	local government officer of the local governmental entity:
	(A)  serves as an officer or director; or
	(B)  holds an ownership interest of one [10]
	percent or more.
	(d)  A vendor [person described by Subsection (a)] shall file
	an updated completed questionnaire with the appropriate records
	administrator not later than  the seventh business day after the
	date of an event that would make a statement in the questionnaire
	incomplete or inaccurate.
	(e)  A person who is both a local government officer and a
	vendor of a local governmental entity is required to file the
	questionnaire required by Subsection (a)(1) only if the person:
	(1)  enters or seeks to enter into a contract with the
	local governmental entity; or
	(2)  is an agent of a person who enters or seeks to
	enter into a contract with the local governmental entity.
	(i)  The validity of a contract between a vendor [person
	described by Section 176.002] and a local governmental entity is
	not affected solely because the vendor [person] fails to comply
	with this section.
	SECTION 7.  Section 176.011, Local Government Code, is
	redesignated as 176.0065, Local Government Code, and amended to
	read as follows:
	Sec. 176.0065  [176.011].  MAINTENANCE OF RECORDS. A
	records administrator shall:
	(1)  maintain a list of local government officers of
	the local governmental entity and shall make that list available to
	the public and any vendor who may be required to file a conflict of
	interest questionnaire under Section 176.006; and
	(2)  maintain the statements and questionnaires that
	are required to be filed under this chapter in accordance with the
	local governmental entity's records retention schedule.
	SECTION 8.  Chapter 176, Local Government Code, is amended
	by adding Section 176.013 to read as follows:
	Sec. 176.013.  ENFORCEMENT. (a) A local government officer
	commits an offense under this chapter if the officer:
	(1)  is required to file a conflicts disclosure
	statement under Section 176.003; and
	(2)  knowingly fails to file the required conflicts
	disclosure statement with the appropriate records administrator
	not later than 5 p.m. on the seventh business day after the date on
	which the officer becomes aware of the facts that require the filing
	of the statement.
	(b)  A vendor commits an offense under this chapter if the
	vendor:
	(1)  is required to file a conflict of interest
	questionnaire under Section 176.006; and
	(2)  either:
	(A)  knowingly fails to file the required
	questionnaire with the appropriate records administrator not later
	than 5 p.m. on the seventh business day after the date on which the
	vendor becomes aware of the facts that require the filing of the
	questionnaire; or
	(B)  knowingly fails to file an updated
	questionnaire with the appropriate records administrator not later
	than 5 p.m. on the seventh business day after the date of an event
	that would make a statement in a questionnaire previously filed by
	the vendor incomplete or inaccurate.
	(c)  An offense under this chapter is:
	(1)  a Class C misdemeanor if the contract amount is
	less than $1 million or if there is no contract amount for the
	contract;
	(2)  a Class B misdemeanor if the contract amount is at
	least $1 million but less than $5 million; or
	(3)  a Class A misdemeanor if the contract amount is at
	least $5 million.
	(d)  A local governmental entity may reprimand, suspend, or
	terminate the employment of an employee who knowingly fails to
	comply with a requirement adopted under this chapter.
	(e)  The governing body of a local governmental entity may,
	at its discretion, declare a contract void if the governing body
	determines that a violation of this chapter has occurred.
	SECTION 9.  The following provisions of the Local Government
	Code are repealed:
	(1)  Sections 176.003(c) and (d);
	(2)  Section 176.005;
	(3)  Sections 176.006(f), (g), and (h); and
	(4)  Section 176.007.
	SECTION 10.  As soon as practicable after the effective date
	of this Act, the Texas Ethics Commission shall adopt forms to
	implement this Act.
	SECTION 11.  (a) Chapter 176, Local Government Code, as
	amended by this Act, applies only to an event requiring disclosure
	that occurs on or after the effective date of this Act. An event
	requiring disclosure that occurs before the effective date of this
	Act is governed by the law applicable to the event immediately
	before the effective date of this Act, and the former law is
	continued in effect for that purpose.
	(b)  The repeal by this Act of Sections 176.003(c),
	176.005(c), and 176.006(f), Local Government Code, does not apply
	to an offense committed under those sections before the effective
	date of the repeal. An offense committed before the effective date
	of the repeal is governed by those sections as they existed on the
	date the offense was committed, and the former law is continued in
	effect for that purpose. For purposes of this subsection, an
	offense was committed before the effective date of the repeal if any
	element of the offense occurred before that date.
	SECTION 12.  This Act takes effect September 1, 2015.