The Senate met at 10:00 a.m. pursuant to adjournment and was called to order by the President.

The roll was called and the following Senators were present: Armbrister, Barrientos, Bernsen, Bivins, Brown, Cain, Carona, Duncan, Ellis, Fraser, Gallegos, Harris, Haywood, Jackson, Lindsay, Lucio, Madla, Moncrief, Nelson, Nixon, Ogden, Ratliff, Shapiro, Shapleigh, Sibley, Truan, Wentworth, West, Whitmire, Zaffirini.

Absent-excused: Luna.

(Senator Ratliff in Chair)

The Presiding Officer announced that a quorum of the Senate was present.

Senate Doorkeeper Don Long offered the invocation as follows:

Merciful heavenly Father, who looks upon the weakness of Your children more in pity than in anger, and more in love than in pity, we come this day before Your throne of grace asking that You teach these Senators, 31 of the best citizens in Texas, that diplomacy is more than shrewdness. Furnish them with the insights, the rectitude, the resources, and the gifts that will enable them to represent their constituents with nobility and clarity of purpose. Crown their efforts with growth and understanding and goodwill among all the peoples of Texas. And, God, bless each and every one in this Senate Chamber. Amen.

On motion of Senator Truan and by unanimous consent, the reading of the Journal of the proceedings of yesterday was dispensed with and the Journal was approved.

LEAVE OF ABSENCE

On motion of Senator Barrientos, Senator Luna was granted leave of absence for today on account of illness.

CONFERENCE COMMITTEE ON HOUSE BILL 2954

Senator Brown called from the President's table, for consideration at this time, the request of the House for a conference committee to adjust the differences between the two Houses on HB 2954 and moved that the request be granted.

The motion prevailed.

The Presiding Officer asked if there were any motions to instruct the conference committee on HB 2954 before appointment.

There were no motions offered.

Accordingly, the Presiding Officer announced the appointment of the following conferees on the part of the Senate on the bill: Senators Brown, Chair; Madla, Armbrister, Bivins, and Gallegos.

SENATE RESOLUTION 1173

Senator Zaffirini offered the following resolution:

BE IT RESOLVED by the Senate of the State of Texas, That Senate Rule 12.03 is suspended, as provided by Senate Rule 12.08, to enable the conference committee appointed to resolve the differences between the house and senate versions of HB 1275, relating to providing a parent with a copy of a special education student's education plan translated into the parent's native language, to consider and take action on the following matter:

Senate Rules 12.03(3) and (4) are suspended to permit the committee to add text to read as follows:

SECTION 1. Section 29.005, Education Code, is amended by adding Subsection (d) to read as follows:

(d) If the child's parent is unable to speak English, the district shall:

(1) provide the parent with a written or audiotaped copy of the child's individualized education program translated into Spanish if Spanish is the parent's native language; or

(2) if the parent's native language is a language other than Spanish, make a good faith effort to provide the parent with a written or audiotaped copy of the child's individualized education program translated into the parent's native language.

SECTION 2. The importance of this legislation and the crowded condition of the calendars in both houses create an emergency and an imperative public necessity that the constitutional rule requiring bills to be read on three several days in each house be suspended, and this rule is hereby suspended, and that this Act take effect and be in force from and after its passage, and it is so enacted.

Explanation: This change is necessary to require a school district to provide a copy of an individualized education program in Spanish if a parent's native language is Spanish, and to require, if a parent's native language is a language other than Spanish, a good faith effort to provide the copy in that language.

The resolution was read and was adopted by the following vote: Yeas 30, Nays 0.

Absent-excused: Luna.

CONFERENCE COMMITTEE ON HOUSE BILL 1059

Senator Barrientos called from the President's table, for consideration at this time, the request of the House for a conference committee to adjust the differences between the two Houses on HB 1059 and moved that the request be granted.

The motion prevailed.

The Presiding Officer asked if there were any motions to instruct the conference committee on HB 1059 before appointment.

There were no motions offered.

Accordingly, the Presiding Officer announced the appointment of the following conferees on the part of the Senate on the bill: Senators Barrientos, Chair; Madla, Whitmire, Zaffirini, and Wentworth.

SENATE RESOLUTION 1054

Senator Sibley offered the following resolution:

WHEREAS, The Senate of the State of Texas takes great pleasure in honoring Lisa Lyn Graves on her outstanding high school career and her graduation from Goldthwaite High School; and

WHEREAS, Lisa Lyn Graves was born on April Fool's Day-April 1, 1981, in Goldthwaite, Texas; Lisa is the daughter of Dr. T. C. and Carol Graves, the sister of Debra and Cody Graves, and the granddaughter of Minnie Graves and the late Dr. T. C. Graves and the late Leona and Edwin VanDerLeest; and

WHEREAS, Lisa achieved the prestigious honor of being named valedictorian of Goldthwaite High School, Class of 1999; she earned straight A's from kindergarten through 12th grade; she is a third-generation valedictorian, preceded in this high honor by her father, Dr. Thomas Cody Graves, Goldthwaite High School, Class of 1960, and her grandfather, the late Dr. Thomas Clark Graves, Goldthwaite High School, Class of 1928; and

WHEREAS, Lisa has earned many accolades throughout her high school career, including President of the National Honor Society, President of the United Methodist Youth Fellowship, President of the Future Homemakers of America, and President of her Sophomore Class; she has been named a class officer, a student council member and officer, and Lions Club Honor Banquet Honoree four years in a row; she was voted "Best All-Around" by her peers in 1998 and 1999, was awarded Ms. Goldthwaite High School, and was selected to attend the National Youth Leadership Forum in Washington, D.C.; she was also the recipient of the Mills County State Bank Scholarship and the Mirabeau B. Lamar academic scholarship; and

WHEREAS, Lisa is an outstanding student but is also an impressive athlete; she was a member of the 1998-99 Goldthwaite Lady Eagle basketball team, which qualified for the area tournament, and Lisa served as captain of the team her junior and senior years; she was also a regional cross-country team qualifier; and

WHEREAS, Lisa received many athletic awards throughout her high school career, including: Lady Eagle Defensive Award, Lady Eagle Leading Assist Award, Lady Eagle Golden Heart Award, All-District Co-Most Valuable Defensive Player, All-District Most Valuable Defensive Player, Second Team All-Big Country, and Second Team All-Region; she was nominated for Basketball Academic All-State; and

WHEREAS, Lisa is a kind, loving, and talented young woman who has exemplified the highest academic, athletic, and moral standards and serves as a role model for all Texas youth; now, therefore, be it

RESOLVED, That the Senate of the State of Texas, 76th Legislature, hereby extend congratulations to Lisa Lyn Graves on her achievement as valedictorian of her graduating class and wish her continued success in her college career at The University of Texas at Austin; and, be it further

RESOLVED, That a copy of this Resolution be prepared for Lisa as an expression of the highest regard by the Texas Senate.

SIBLEY

FRASER

The resolution was read.

On motion of Senator Fraser and by unanimous consent, the names of the Lieutenant Governor and Senators were added to the resolution as signers thereof.

On motion of Senator Sibley, the resolution was adopted by a viva voce vote.

SENATE CONCURRENT RESOLUTION 18

WITH HOUSE AMENDMENT

Senator Nixon called SCR 18 from the President's table for consideration of the House amendment to the resolution.

The Presiding Officer, Senator Ratliff in Chair, laid the resolution and the House amendment before the Senate.

Amendment

Amend SCR 18 by substituting in lieu thereof the following:

CONCURRENT RESOLUTION

WHEREAS, Anderson Columbia Environmental, Inc., alleges that:

(1) on September 26, 1995, it entered into a contract with the Texas Natural Resource Conservation Commission for the implementation of Phase B of the Industrial Remediation project for the United Creosoting Superfund Site;

(2) Anderson Columbia Environmental, Inc., has fulfilled all of its obligations under the contract;

(3) the Texas Natural Resource Conservation Commission failed to give the proper notice required when terminating the contract and has wrongfully withheld payment from Anderson Columbia Environmental, Inc.; and

(4) Anderson Columbia Environmental, Inc., is entitled to recover compensation for the work performed and to other appropriate remedies as provided by the contract, excluding exemplary or punitive damages; now, therefore, be it

RESOLVED by the Legislature of the State of Texas, That Anderson Columbia Environmental, Inc., is granted permission to sue the State of Texas and the Texas Natural Resource Conservation Commission subject to Chapter 107, Civil Practice and Remedies Code; and, be it further

RESOLVED, That the suit authorized by this resolution shall be brought in Travis County; and, be it further

RESOLVED, That the total of all damages awarded in the suit authorized by this resolution, including any court costs, attorney's fees, and prejudgment interest awarded under law, may not exceed $1.5 million, that Anderson Columbia Environmental, Inc., may not plead an amount in excess of that amount in a suit authorized by this resolution, and that this is the total amount that may be recovered with respect to the contract that is the subject of this resolution in all actions brought with respect to that contract; and, be it further

RESOLVED, That the executive director of the Texas Natural Resource Conservation Commission be served process as provided by Section 107.002(a)(3), Civil Practice and Remedies Code.

The amendment was read.

On motion of Senator Nixon, the Senate concurred in the House amendment to SCR 18 by a viva voce vote.

SENATE RESOLUTION 1169

Senator Sibley offered the following resolution:

BE IT RESOLVED by the Senate of the State of Texas, 76th Legislature, Regular Session, 1999, That Senate Rule 12.03 be suspended in part as provided by Senate Rule 12.08 to enable the conference committee appointed to resolve the differences on SB 138, relating to government restrictions on the exercise of religion, to consider and take action on the following matter:

Senate Rules 12.03(1), (2), and (3) are suspended to permit the committee to omit text relating to a presumption established by certain ordinances, rules, orders, decisions, or practices, and substitute the following new SECTIONS, appropriately numbered:

SECTION . Subchapter G, Chapter 61, Human Resources Code, is amended by adding Section 61.097 to read as follows:

Sec. 61.097. APPLICATION OF LAW RELATING TO FREE EXERCISE OF RELIGION. For purposes of Chapter 110, Civil Practice and Remedies Code, an ordinance, rule, order, decision, or practice that applies to a person in the custody of a juvenile detention facility or other correctional facility operated by or under a contract with the commission, a county, or a juvenile probation department is presumed to be in furtherance of a compelling governmental interest and the least restrictive means of furthering that interest. The presumption may be rebutted.

SECTION . Chapter 76, Government Code, is amended by adding Section 76.018 to read as follows:

Sec. 76.018. APPLICATION OF LAW RELATING TO FREE EXERCISE OF RELIGION. For purposes of Chapter 110, Civil Practice and Remedies Code, an ordinance, rule, order, decision, or practice that applies to a person in the custody of a correctional facility operated by or under a contract with a community supervision and corrections department is presumed to be in furtherance of a compelling governmental interest and the least restrictive means of furthering that interest. The presumption may be rebutted.

SECTION . Chapter 493, Government Code, is amended by adding Section 493.023 to read as follows:

Sec. 493.023. APPLICATION OF LAW RELATING TO FREE EXERCISE OF RELIGION. For purposes of Chapter 110, Civil Practice and Remedies Code, an ordinance, rule, order, decision, or practice that applies to a person in the custody of a jail or other correctional facility operated by or under a contract with the department is presumed to be in furtherance of a compelling governmental interest and the least restrictive means of furthering that interest. The presumption may be rebutted.

SECTION . Chapter 361, Local Government Code, is amended by adding Subchapter G to read as follows:

SUBCHAPTER G. RELIGIOUS FREEDOM

Sec. 361.101. APPLICATION OF LAW RELATING TO FREE EXERCISE OF RELIGION. For purposes of Chapter 110, Civil Practice and Remedies Code, an ordinance, rule, order, decision, or practice that applies to a person in the custody of a municipal or county jail or other correctional facility operated by or under a contract with a county or municipality is presumed to be in furtherance of a compelling governmental interest and the least restrictive means of furthering that interest. The presumption may be rebutted.

Explanation: This change is necessary to place text relating to certain government agencies in the law relating specifically to those agencies and to clarify the application of the presumption established by the affected text to certain juvenile detention and other correctional facilities.

The resolution was read and was adopted by the following vote: Yeas 30, Nays 0.

Absent-excused: Luna.

SENATE RESOLUTION 1174

Senator Madla offered the following resolution:

BE IT RESOLVED by the Senate of the State of Texas, 76th Legislature, Regular Session, 1999, That Senate Rule 12.03 be suspended in part as provided by Senate Rule 12.08 to enable the conference committee appointed to resolve the differences on SB 957, relating to the licensing of certain persons who provide services related to the business of insurance, to consider and take action on the following matter:

Senate Rule 12.03(4) is suspended to permit the committee to add the following text as an appropriately numbered article:

ARTICLE . LICENSING REQUIREMENTS

FOR AUTOMOBILE CLUBS

SECTION __.01. Subchapter F, Chapter 21, Insurance Code, is amended by adding Article 21.80 to read as follows:

Art. 21.80. LICENSING REQUIREMENTS FOR AUTOMOBILE CLUBS. (a) An automobile club as defined in Section 722.002(2), Transportation Code, may provide insurance service only as provided by this section.

(b) An automobile club may provide a member accidental injury and death benefit insurance coverage through purchase of a group policy of insurance issued to the automobile club for the benefit of its members. The coverage must be purchased from an insurance company authorized to sell that type of coverage in this state. The automobile club shall provide each member covered by the insurance a certificate of participation. The certificate of participation must state on its face in at least 14-point black boldface type that the certificate is only a certificate of participation in a group accidental injury and death policy and is not motor vehicle liability insurance coverage.

(c) An automobile club may endorse insurance products and refer members to agents or insurers authorized to provide the insurance products in this state. The automobile club or an agent of the automobile club may not receive remuneration for the referral.

(d) Except as provided by Subsection (e) of this article, an automobile club performing services permitted by this article is not subject to regulation under the insurance laws of this state because of the performance of those services.

(e) An automobile club may sell insurance products to a member for a consideration separate from the amount that the member pays for membership in the automobile club if the automobile club is properly licensed as an agent under the applicable provisions of this code.

(f) In addition to reimbursement services enumerated in Section 722.002(2), Transportation Code, an automobile club may contract with a member to reimburse the member for expenses the member incurs for towing, emergency road service, and lockout or lost key service, and to provide immediate destination assistance and trip interruption service. The insurance laws of this state do not apply to reimbursement provided under this subsection.

SECTION .02. Section 722.013, Transportation Code, is repealed.

Explanation: This change is necessary to regulate the provision of certain insurance through automobile clubs.

The resolution was read and was adopted by the following vote: Yeas 30, Nays 0.

Absent-excused: Luna.

SENATE RULE 11.13 SUSPENDED

On motion of Senator Bivins and by unanimous consent, Senate Rule 11.13, which states that no Senate committee or conference committee may meet while the Senate is meeting, was suspended to grant the conference committee on SB 4 permission to meet.

CONFERENCE COMMITTEE ON HOUSE BILL 801

Senator Armbrister called from the President's table, for consideration at this time, the request of the House for a conference committee to adjust the differences between the two Houses on HB 801 and moved that the request be granted.

The motion prevailed.

The Presiding Officer asked if there were any motions to instruct the conference committee on HB 801 before appointment.

There were no motions offered.

Accordingly, the Presiding Officer announced the appointment of the following conferees on the part of the Senate on the bill: Senators Armbrister, Chair; Brown, Nelson, Ratliff, and Sibley.

SENATE BILL 705 WITH HOUSE AMENDMENTS

Senator Ogden called SB 705 from the President's table for consideration of the House amendments to the bill.

The Presiding Officer laid the bill and the House amendments before the Senate.

Amendment

Amend SB 705 by substituting in lieu thereof the following:

A BILL TO BE ENTITLED

AN ACT

relating to providing aid, support, and assistance to agriculture; establishing the agricultural technology program.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. (a) SHORT TITLE. This Act may be cited as the Farm and Ranch Recovery Act.

(b) FINDINGS. The legislature finds that:

(1) agriculture is a vital component of a diversified state economy;

(2) agriculture is more directly and substantially affected by adverse weather conditions than other industries;

(3) limited availability of federal crop subsidies and adverse weather conditions present a significant risk to the economic vitality of agricultural enterprises; and

(4) a comprehensive state agricultural policy that addresses changes in federal policy and recurrent adverse weather conditions will promote the growth of agriculture in this state and will avert a public calamity.

(c) PURPOSES. The purposes of this Act are to:

(1) promote economic development by ensuring a diversified economy;

(2) foster the growth of agriculture in this state; and

(3) avert the substantial risk of a public calamity that will likely result if agricultural industries do not receive the benefit of state planning and assistance.

SECTION 2. Title 4, Agriculture Code, is amended by adding Chapter 60 to read as follows:

CHAPTER 60. COMMODITY CRISIS COUNCIL AND MANAGER

Sec. 60.001. DEFINITIONS. In this chapter:

(1) "Agricultural crisis" means an event or condition, including adverse weather conditions, water shortage, disruption in transportation, low commodity prices, an animal health issue, crop disease, or insect infestation, that could disrupt or jeopardize an aspect of the agriculture industry.

(2) "Council" means the Commodity Crisis Council.

(3) "Manager" means the commodity crisis manager.

Sec. 60.002. MANAGER; DUTIES. (a) The commissioner may designate a person, who may be an employee of the department, to serve as manager. The manager is charged with mitigating the impact of any agricultural crisis on commodities and agricultural production.

(b) The manager serves as:

(1) presiding officer of the council;

(2) the representative of the department on the emergency management council established by Executive Order GWB 95-1b; and

(3) the representative of the department on the drought response and monitoring committee under Section 16.055, Water Code.

(c) The manager shall:

(1) manage and coordinate department planning and response to any agricultural crisis, as identified by the commissioner;

(2) develop a state plan to prepare for recurring drought conditions that affect agricultural commodities, including specific response actions, long-term solutions to minimize the effect of drought conditions, and an assessment of which regions of the state and which agricultural products are vulnerable to a drought; and

(3) manage the emergency hay program under Chapter 254.

Sec. 60.003. COUNCIL COMPOSITION; DUTIES. (a) The council is composed of the manager, the members appointed under Subsection (b), and one representative from each of the following agencies appointed by the administrative head of that agency:

(1) the Texas Agricultural Extension Service;

(2) the State Soil and Water Conservation Board; and

(3) the Texas Forest Service.

(b) The commissioner shall appoint not more than five representatives of agricultural industries to serve on the council.

(c) The council shall:

(1) advise the manager in the development of a state plan to address recurring drought conditions;

(2) prepare and submit an informational report to the governor and the legislature for each agricultural crisis, as identified by the commissioner, in this state;

(3) prepare and submit a report to the commissioner to recommend projects for the agri-tech program under Chapter 46;

(4) develop a program through the Texas Agricultural Extension Service to educate agricultural producers and the public about each agricultural crisis, as identified by the commissioner, in this state; and

(5) meet as necessary to carry out the provisions of this section.

(d) The commissioner's appointees serve without compensation, but are entitled to reimbursement for actual expenses incurred in the performance of official council duties, subject to approval of the commissioner. The other council members are entitled to be reimbursed for actual expenses by their representative agencies.

(e) The commissioner shall provide the council with staff necessary to assist the council in carrying out its duties.

SECTION 3. Title 3, Agriculture Code, is amended by adding Chapter 46 to read as follows:

CHAPTER 46. AGRICULTURAL TECHNOLOGY PROGRAM

Sec. 46.001. DEFINITIONS. In this chapter:

(1) "Agricultural crisis" means an event or condition, including adverse weather conditions, water shortage, disruption in transportation, low commodity prices, an animal health issue, crop disease, or insect infestation, that could disrupt or jeopardize an aspect of the agriculture industry.

(2) "Agri-tech program" means the agricultural technology program established under this chapter.

(3) "Applied research" means research directed at gaining the knowledge or understanding necessary to meet a specific and recognized need, including the discovery of new scientific knowledge that has specific objectives relating to products or processes.

(4) "Eligible institution" means an institution of higher education, as that term is defined by Section 61.003, Education Code, that is designated as an eligible institution under Section 46.002(e).

Sec. 46.002. ADMINISTRATION; GUIDELINES AND PROCEDURES. (a) The department shall develop, maintain, and administer the agri-tech program to provide support for eligible institutions to conduct research projects on methods to address agricultural crises in this state.

(b) In awarding funds to support projects under this chapter, the department shall:

(1) give priority to applied research projects that the commissioner determines to be necessary to address an immediate agricultural crisis; and

(2) consider the recommendations of the Commodity Crisis Council for specific projects.

(c) The department shall award funds to support projects as needed to address agricultural crises in this state.

(d) The department shall develop and maintain guidelines and procedures to provide awards under this chapter for specific projects at eligible institutions on a competitive, peer-review basis.

(e) The department shall determine whether an institution of higher education qualifies as an eligible institution for the purposes of this chapter. To be designated as an eligible institution, an institution of higher education must demonstrate an exceptional capability to attract federal, state, and private funding for scientific and technical research and have an exceptionally strong research staff and the necessary equipment and facilities.

(f) In considering projects for selection, the commissioner shall give special consideration to projects that:

(1) leverage funds from other sources; and

(2) propose innovative, collaborative efforts:

(A) across academic disciplines;

(B) involving two or more eligible institutions; or

(C) involving eligible institutions, private industry, and the federal government.

(g) The commissioner may adopt rules necessary to accomplish the purposes of this chapter.

Sec. 46.003. AGRICULTURAL TECHNOLOGY ACCOUNT. (a) The agricultural technology account is an account in the general revenue fund.

(b) The agricultural technology account consists of legislative appropriations, gifts and grants received under Subsection (c), and other money required by law to be deposited in the account.

(c) The department may solicit and accept gifts in kind and grants of money from the federal government, local governments, private corporations, or other persons to be used for the purposes of this chapter.

(d) Funds in the agricultural technology account may be used only as provided by this chapter. The account is exempt from the application of Section 403.095, Government Code.

(e) Income from money in the account shall be credited to the account.

Sec. 46.004. USE OF FUNDS IN AGRICULTURAL TECHNOLOGY ACCOUNT. (a) From funds appropriated for the agri-tech program, the comptroller shall issue warrants to each eligible institution in the amount certified by the department to the comptroller.

(b) Funds awarded from the agricultural technology account may be expended to support the particular research project for which the award is made and may not be expended for the general support of research and instruction at the institution conducting or sponsoring the project or for the construction or remodeling of a facility.

(c) Funds in the agricultural technology account shall be used, when practicable within the purposes of this chapter, to match grants provided by the federal government or private industry for specific collaborative research projects at eligible institutions.

(d) Supplies, materials, services, and equipment purchased with funds obtained under this section are not subject to General Services Commission authority.

Sec. 46.005. PROGRESS REPORTS. An institution receiving funds under this chapter shall report on the progress of the funded research to the department not later than September 1 of each year.

Sec. 46.006. MERIT REVIEW. The commissioner shall appoint a committee consisting of representatives of the agriculture industry and of private enterprise advanced technology research organizations to evaluate the agri-tech program's effectiveness. The committee shall report its findings to the department not later than September 1 of the second year of each biennium.

SECTION 4. Title 3, Agriculture Code, is amended by adding Chapter 47 to read as follows:

CHAPTER 47. AGRICULTURE RISK MANAGEMENT EDUCATION

Sec. 47.001. LEGISLATIVE FINDINGS; PURPOSE. (a) The legislature finds that:

(1) the increasingly global marketplace and the increasing flexibility in agriculture production decisions expose agricultural producers and agribusinesses to increased income risk;

(2) managing these increased risks is critical to the future economic competitiveness and success of agriculture in this state; and

(3) policymakers, lenders, agribusiness firms, rural community leaders, and researchers will benefit from a better understanding of how farmers and ranchers adapt to different economic, regulatory, and political environments.

(b) The purposes of this chapter are to:

(1) increase risk management educational efforts to help agricultural producers and agribusinesses to:

(A) understand risk and its consideration in decision making;

(B) understand the economic impacts on farms or ranches of adopting new production or information technologies;

(C) understand the economic impacts on farms or ranches of changing agricultural, regulatory, monetary, and fiscal policies; and

(D) measure the relative risk associated with alternative production, marketing, and financial decisions;

(2) establish a statewide educational program that includes a risk management support system and a comprehensive educational curriculum; and

(3) foster the economic competitiveness and success of agriculture in this state.

Sec. 47.002. CREATION OF PROGRAMS. (a) The Texas Agricultural Extension Service shall administer a statewide financial and risk management assistance support system to help farmers and ranchers make long-term strategic planning decisions and adjust their operations to new production, marketing, and financing situations. The support system may include computer and communications technology to provide agricultural producers and agribusinesses with information needed for individual long-term strategic farm or ranch planning.

(b) The extension service shall develop and implement a statewide comprehensive educational curriculum program to provide agricultural producers and agribusinesses with additional information about risk management and potential tools and options to consider in managing risks. The curriculum may include instructional materials, instructors, and other resources in areas of agricultural, regulatory, monetary, and fiscal interest.

(c) The extension service may organize and deliver the programs with the assistance of interested agricultural groups.

Sec. 47.003. ELIGIBILITY FOR EDUCATIONAL MATERIALS AND SERVICES. As a condition for educational assistance under this chapter, the Texas

Agricultural Extension Service shall require that a person pay a subscription fee or other charge in exchange for educational services and materials.

SECTION 5. Title 8, Agriculture Code, is amended by adding Chapter 254 to read as follows:

CHAPTER 254. EMERGENCY HAY PROGRAM

Sec. 254.001. DEFINITION. In this chapter, "manager" means the commodity crisis manager under Chapter 60.

Sec. 254.002. EMERGENCY HAY PROGRAM. (a) The department shall adopt rules and administer a program to provide assistance for the transportation of hay for use by agricultural producers whose production abilities are hindered during periods of natural disaster or other emergencies due to a lack of forage.

(b) The manager shall oversee the program.

Sec. 254.003. EMERGENCY HAY ACCOUNT. (a) The emergency hay account is an account in the general revenue fund.

(b) The emergency hay account consists of legislative appropriations and other money required by law to be deposited in the account.

(c) The department may solicit and accept gifts in kind and grants of money from the federal government, local governments, private corporations, or other persons to be used for the purposes of this chapter.

(d) Money in the account may be used only for the purposes of this chapter. The account is exempt from the application of Section 403.095, Government Code.

(e) Income from money in the account shall be credited to the account.

Sec. 254.004. DUTIES OF DEPARTMENT. (a) To provide assistance under this chapter, the department shall:

(1) establish a reciprocal system of waivers to help facilitate the interstate transportation of hay;

(2) create a database to identify public and private haulers that are willing to donate transportation services;

(3) develop and promote a hay and grazing hotline designed to:

(A) connect Texas hay buyers with Texas hay sellers;

(B) connect Texas hay buyers with out-of-state hay sellers;

(C) connect Texas livestock producers that have their own transportation with out-of-state hay donors;

(D) connect donated transportation with hay donors; and

(E) connect livestock owners with grazing leases in and out of Texas; and

(4) develop a plan, with periodic updates, to secure and manage transportation and local distribution of hay donations.

(b) The department shall coordinate its efforts with other emergency relief programs administered by the governor's division of emergency management.

(c) To the extent practicable, the department shall use the resources of the Texas Agricultural Extension Service and of agricultural commodity associations when developing and implementing its plan.

Sec. 254.005. POWERS OF COMMISSIONER. (a) The commissioner may authorize the use of available funds from the emergency hay account to facilitate the transportation of hay to producers when donated resources have been exhausted.

(b) The commissioner may:

(1) negotiate contracts with commercial haulers; and

(2) certify commercial haulers for use during a natural disaster or other emergency.

Sec. 254.006. ELIGIBILITY FOR PROGRAM. The assistance provided under this chapter is available only for agricultural producers located within a county that is declared a federal disaster area.

Sec. 254.007. ASSISTANCE FOR DEPARTMENT. (a) The Texas Agricultural Extension Service shall enter into a memorandum of understanding with the department to assist the department in administering the program.

(b) The assistance provided by the extension service under this section may include:

(1) an assessment of local conditions within a county in which agricultural producers are eligible for assistance under Section 254.006;

(2) the selection of hay distribution sites; and

(3) coordination of volunteer efforts.

(c) The extension service shall develop guidelines for county extension agents to implement this section.

(d) For purposes of this section, a county extension agent may establish an advisory committee of local producers or work with an existing committee.

Sec. 254.008. TERMINATION OF PROGRAM ASSISTANCE. The department shall terminate program assistance in a county if:

(1) the county's federal disaster area designation expires; or

(2) funds in the emergency hay account are depleted.

SECTION 6. Subchapter F, Chapter 661, Government Code, is amended by adding Section 661.152 to read as follows:

Sec. 661.152. LEAVE FOR VOLUNTEER FIREFIGHTERS IN CERTAIN DISASTERS. (a) This section applies only to a state employee who:

(1) is trained as a volunteer firefighter; and

(2) volunteers for duty to prevent or fight fires in an area designated as a federal disaster area as the result of drought conditions.

(b) A person to whom this section applies is eligible for a leave of absence from work as a state employee without loss of compensation or risk of termination for the hours during which the employee serves as a volunteer firefighter in a situation described by Subsection (a)(2).

(c) The state agency that employs a person who requests leave under this section shall verify the person's eligibility to take the leave.

SECTION 7. This Act takes effect September 1, 1999.

SECTION 8. The importance of this legislation and the crowded condition of the calendars in both houses create an emergency and an imperative public necessity that the constitutional rule requiring bills to be read on three several days in each house be suspended, and this rule is hereby suspended.

Floor Amendment No. 1

Amend CSSB 705 (House Committee Printing) as follows:

(1) Strike SECTION 1 of the bill and renumber the subsequent SECTIONS of the bill appropriately.

(2) In SECTION 4 of the bill (page 8, line 11 - page 9, line 12), strike added Section 47.001, Agriculture Code, and renumber added Sections 47.002 and 47.003, Agriculture Code, as Sections 47.001 and 47.002.

Floor Amendment No. 2

Amend CSSB 705 (House Committee Printing) by adding the following appropriately numbered SECTION to the bill and renumbering any subsequent SECTIONS appropriately:

SECTION . (a) Chapters 46, 47, 60 and 254 Agriculture Code, as added by this Act, each take effect only if a specific appropriation for the implementation and funding of the agricultural program created by the corresponding chapter is provided in HB 1 (General Appropriations Act), Acts of the 76th Legislature, Regular Session, 1999.

(b) If no specific appropriation for a chapter listed in Subsection (a) of this section is provided in HB 1 (General Appropriations Act), that chapter has no effect.

(c) A reference to the "commodity crisis manager" in the Agriculture Code refers to the commissioner of agriculture or an employee designated by the commissioner.

Floor Amendment No. 3

Amend CSSB 705 as follows:

Immediately following SECTION 4 of the bill (House Committee Report, page 10, between lines 8 and 9), insert the following appropriately numbered SECTIONS and renumber the subsequent SECTIONS of the bill accordingly:

SECTION . Subtitle D, Title 6, Agriculture Code, is amended by adding Chapter 182 to read as follows:

CHAPTER 182. SOUTHERN DAIRY COMPACT

Sec. 182.001. DEFINITIONS. In this chapter:

(1) "Compact" means the Southern Dairy Compact.

(2) "Compact commission" means the Southern Dairy Compact Commission established by Section 4, Article III, of the compact.

(3) "Delegate" means a member of the delegation from this state to the Southern Dairy Compact Commission as set forth in Section 4, Article III, of the compact.

Sec. 182.002. DELEGATES; QUALIFICATIONS. (a) The commissioner shall appoint one delegate to this state's delegation to the compact commission to serve at the pleasure of the commissioner. The commissioner may appoint the commodity crisis manager under Chapter 60 as the delegate under this subsection. If the commissioner appoints a person other than the commodity crisis manager as a delegate, the commissioner's appointee must be an employee of the department, preferably an employee with experience with milk marketing and stabilization. The delegate serving under this subsection shall serve as chair of the delegation from this state.

(b) The governor shall appoint four delegates to this state's delegation to the compact commission as follows:

(1) two delegates who must be dairy farmers engaged in the production of milk at the time of appointment or reappointment;

(2) one delegate who must be a dairy processor engaged in the production of milk at the time of appointment or reappointment; and

(3) one delegate who must be a consumer representative.

(c) Each delegate must be a resident and registered voter of this state.

(d) A delegate is not an officer of this state by virtue of holding the position of delegate.

Sec. 182.003. TERMS; REMOVAL; VACANCY. (a) Each delegate serves a term of four years.

(b) Each delegate shall serve from the date of appointment until a successor is appointed and qualified.

(c) An individual may not serve more than three consecutive terms as a delegate.

(d) A delegate may be removed for cause.

Sec. 182.004. EFFECTIVE DATE OF COMPACT; SUNSET PROVISION. (a) The compact shall become effective when:

(1) the governor has executed the compact in a form substantially similar to that contained in Section 182.005 on behalf of this state and has filed a verified copy of the compact with the secretary of state;

(2) the United States Congress has consented to the compact; and

(3) two or more of the other states named in Section 20, Article VIII, of the compact, have ratified the compact in a form substantially similar to that contained in Section 182.005.

(b) The governor shall take such action as may be necessary to complete the exchange of official documents between this state and any other state ratifying the compact.

(c) This state's delegation to the compact commission is subject to Chapter 325, Government Code (Texas Sunset Act). Unless continued in existence as provided by that chapter, the state's delegation to the commission is abolished and this chapter expires September 1, 2003.

Sec. 182.005. COMPACT TO BE ENTERED; TEXT. Subject to Section 182.004, the Southern Dairy Compact is hereby entered into and enacted into law as follows:

ARTICLE I. STATEMENT OF PURPOSE,

FINDINGS, AND DECLARATION OF POLICY

Sec. 1. STATEMENT OF PURPOSE, FINDINGS, AND DECLARATION OF POLICY. The purpose of this compact is to recognize the interstate character of the southern dairy industry and the prerogative of the states under the United States Constitution to form an interstate commission for the southern region. The mission of the commission is to take such steps as are necessary to assure the continued viability of dairy farming in the South, and to assure consumers of an adequate, local supply of pure and wholesome milk.

The participating states find and declare that the dairy industry is an essential agricultural activity of the South. Dairy farms, and associated suppliers, marketers, processors, and retailers, are an integral component of the region's economy. Their ability to provide a stable, local supply of pure, wholesome milk is a matter of great importance to the health and welfare of the region.

The participating states further find that dairy farms are essential and they are an integral part of the region's rural communities. The farms preserve land for agricultural purposes and provide needed economic stimuli for rural communities.

By entering into this compact, the participating states affirm that their ability to regulate the price which southern dairy farmers receive for their product is essential to the public interest. Assurance of a fair and equitable price for dairy farmers ensures their ability to provide milk to the market and the vitality of the southern dairy industry, with all the associated benefits.

Recent dramatic price fluctuations, with a pronounced downward trend, threaten the viability and stability of the southern dairy region. Historically, individual state regulatory action had been an effective emergency remedy available to farmers confronting a distressed market. The federal order system, implemented by the Agricultural Marketing Agreement Act of 1937, establishes only minimum prices paid to producers for raw milk, without preempting the power of states to regulate milk prices above the minimum levels so established.

In today's regional dairy marketplace, cooperative, rather than individual state action, is needed to more effectively address the market disarray. Under our constitutional system, properly authorized states acting cooperatively may exercise more power to regulate interstate commerce than they may assert individually without such authority. For this reason, the participating states invoke their authority to act in common agreement, with the consent of the United States Congress, under the compact clause of the United States Constitution.

In establishing their constitutional regulatory authority over the region's fluid milk market by this compact, the participating states declare their purpose that this compact neither displace the federal order system nor encourage the merging of federal orders. Specific provisions of the compact itself set forth this basic principle.

Designed as a flexible mechanism able to adjust to changes in a regulated marketplace, the compact also contains a contingency provision should the federal order system be discontinued. In that event, the interstate commission is authorized to regulate the marketplace in replacement of the order system. This contingent authority does not anticipate such a change, however, and should not be so construed. It is only provided should developments in the market other than establishment of this compact result in discontinuance of the order system.

ARTICLE II. DEFINITIONS AND RULES OF CONSTRUCTION

Sec. 2. DEFINITIONS. For the purposes of this compact, and of any supplemental or concurring legislation enacted pursuant thereto, except as may be otherwise required by the context:

(1) "Class I milk" means milk disposed of in fluid form or as a fluid milk product, subject to further definition in accordance with the principles expressed in Subsection (b) of Section three.

(2) "Commission" means the Southern Dairy Compact Commission established by this compact.

(3) "Commission marketing order" means regulations adopted by the commission pursuant to Sections 9 and 10 of this compact in place of a terminated federal marketing order or state dairy regulation. Such order may apply throughout the region or in any part or parts thereof as defined in the regulations of the commission. Such order may establish minimum prices for any or all classes of milk.

(4) "Compact" means this interstate compact.

(5) "Compact over-order price" means a minimum price required to be paid to producers for Class I milk established by the commission in regulations adopted pursuant to Sections 9 and 10 of this compact, which is above the price established in federal marketing orders or by state farm price regulation in the regulated area. Such price may apply throughout the region or in any part or parts thereof as defined in the regulations of the commission.

(6) "Milk" means the lacteal secretion of cows and includes all skim, butterfat, or other constituents obtained from separation or any other process. The term is used in its broadest sense and may be further defined by the commission for regulatory purposes.

(7) "Partially regulated plant" means a milk plant not located in a regulated area but having Class I distribution within such area. Commission regulations may exempt plants having such distribution or receipts in amounts less than the limits defined therein.

(8) "Participating state" means a state which has become a party to this compact by the enactment of concurring legislation.

(9) "Pool plant" means any milk plant located in a regulated area.

(10) "Region" means the territorial limits of the states which are parties to this compact.

(11) "Regulated area" means any area within the region governed by and defined in regulations establishing a compact over-order price or commission marketing order.

(12) "State dairy regulation" means any state regulation of dairy prices, and associated assessments, whether by statute, marketing order, or otherwise.

Sec. 3. RULES OF CONSTRUCTION. (a) This compact shall not be construed to displace existing federal milk marketing orders or state dairy regulation in the region but to supplement them. In the event some or all federal orders in the region are discontinued, the compact shall be construed to provide the commission the option to replace them with one or more commission marketing orders pursuant to this compact.

(b) This compact shall be construed liberally in order to achieve the purposes and intent enunciated in Section 1. It is the intent of this compact to establish a basic structure by which the commission may achieve those purposes through the application, adaptation, and development of the regulatory techniques historically associated with milk marketing and to afford the commission broad flexibility to devise regulatory mechanisms to achieve the purposes of this compact. In accordance with this intent, the technical terms which are associated with market order regulation and which have acquired commonly understood general meanings are not defined herein, but the commission may further define the terms used in this compact and develop additional concepts and define additional terms as it may find appropriate to achieve its purposes.

ARTICLE III. COMMISSION ESTABLISHED

Sec. 4. COMMISSION ESTABLISHED. There is hereby created a commission to administer the compact, composed of delegations from each state in the region. The commission shall be known as the Southern Dairy Compact Commission. A delegation shall include not less than three nor more than five persons. Each delegation shall include at least one dairy farmer who is engaged in the production of milk at the time of appointment or reappointment, and one consumer representative. Delegation members shall be residents and voters of, and subject to such confirmation process as is provided for in, the appointing state. Delegation members shall serve no more than three consecutive terms with no single term of more than four years and be subject to removal for cause. In all other respects, delegation members shall serve in accordance with the laws of the state represented. The compensation, if any, of the members of a state delegation shall be determined and paid by each state, but their expenses shall be paid by the commission.

Sec. 5. VOTING REQUIREMENTS. All actions taken by the commission, except for the establishment or termination of an over-order price or commission marketing order, and the adoption, amendment, or rescission of the commission's bylaws shall be by majority vote of the delegations present. Each state delegation shall be entitled to one vote in the conduct of the commission's affairs. Establishment or termination of an over-order price or commission marketing order shall require at least a two-thirds vote of the delegations present. The establishment of a regulated area which covers all or part of a participating state shall require also the affirmative vote of that state's delegation. A majority of the delegations from the participating states shall constitute a quorum for the conduct of the commission's business.

Sec. 6. ADMINISTRATION AND MANAGEMENT. (a) The commission shall elect annually from among the members of the participating state delegations a chairperson, a vice-chairperson, and a treasurer. The commission shall appoint an executive director and fix his or her duties and compensation. The executive director shall serve at the pleasure of the commission, and, together with the treasurer, shall be bonded in an amount determined by the commission. The commission may establish through its bylaws an executive committee composed of one member elected by each delegation.

(b) The commission shall adopt bylaws for the conduct of its business by a two-thirds vote and shall have the power by the same vote to amend and rescind these bylaws. The commission shall publish its bylaws in convenient form with the appropriate agency or officer in each of the participating states. The bylaws shall provide for appropriate notice to the delegations of all commission meetings and hearings and of the business to be transacted at such meetings or hearings. Notice also shall be given to other agencies or officers of participating states as provided by the laws of those states.

(c) The commission shall file an annual report with the secretary of agriculture of the United States, and with each of the participating states by submitting copies to the governor, both houses of the legislature, and the head of the state department having responsibilities for agriculture.

(d) In addition to the powers and duties elsewhere prescribed in this compact, the commission shall have the power:

(1) to sue and be sued in any state or federal court;

(2) to have a seal and alter the same at pleasure;

(3) to acquire, hold, and dispose of real and personal property by gift, purchase, lease, license, or other similar manner, for its corporate purposes;

(4) to borrow money and to issue notes, to provide for the rights of the holders thereof and to pledge the revenue of the commission as security therefore, subject to the provisions of Section 18 of this compact;

(5) to appoint such officers, agents, and employees as it may deem necessary, prescribe their powers, duties, and qualifications; and

(6) to create and abolish such offices, employments, and positions as it deems necessary for the purposes of the compact and provide for the removal, term, tenure, compensation, fringe benefits, pension, and retirement rights of its officers and employees. The commission may also retain personal services on a contract basis.

Sec. 7. RULEMAKING POWER. In addition to the power to promulgate a compact over-order price or commission marketing orders as provided by this compact, the commission is further empowered to make and enforce such additional rules and regulations as it deems necessary to implement any provisions of this compact, or to effectuate in any other respect the purposes of this compact.

ARTICLE IV. POWERS OF THE COMMISSION

Sec. 8. POWERS TO PROMOTE REGULATORY UNIFORMITY, SIMPLICITY, AND INTERSTATE COOPERATION. The commission is hereby empowered to:

(1) Investigate or provide for investigations or research projects designed to review the existing laws and regulations of the participating states, to consider their administration and costs, to measure their impact on the production and marketing of milk and their effects on the shipment of milk and milk products within the region.

(2) Study and recommend to the participating states joint or cooperative programs for the administration of the dairy marketing laws and regulations and to prepare estimates of cost savings and benefits of such programs.

(3) Encourage the harmonious relationships between the various elements in the industry for the solution of their material problems. Conduct symposia or conferences designed to improve industry relations or a better understanding of problems.

(4) Prepare and release periodic reports on activities and results of the commission's efforts to the participating states.

(5) Review the existing marketing system for milk and milk products and recommend changes in the existing structure for assembly and distribution of milk which may assist, improve, or promote more efficient assembly and distribution of milk.

(6) Investigate costs and charges for producing, hauling, handling, processing, distributing, selling, and for all other services performed with respect to milk.

(7) Examine current economic forces affecting producers, probable trends in production and consumption, the level of dairy farm prices in relation to costs, the financial conditions of dairy farmers, and the need for an emergency order to relieve critical conditions on dairy farms.

Sec. 9. EQUITABLE FARM PRICES. (a) The powers granted in this section and Section 10 shall apply only to the establishment of a compact over-order price, so long as federal milk marketing orders remain in effect in the region. In the event that any or all such orders are terminated, this article shall authorize the commission to establish one or more commission marketing orders, as herein provided, in the region or parts thereof as defined in the order.

(b) A compact over-order price established pursuant to this section shall apply only to Class I milk. Such compact over-order price shall not exceed $1.50 per gallon at Atlanta, Georgia; however, this compact over-order price shall be adjusted upward or downward at other locations in the region to reflect differences in minimum federal order prices. Beginning in 1990, and using that year as a base, the foregoing $1.50 per gallon maximum shall be adjusted annually by the rate of change in the Consumer Price Index as reported by the Bureau of Labor Statistics of the United States Department of Labor. For purposes of the pooling and equalization of an over-order price, the value of milk used in other use classifications shall be calculated at the appropriate class price established pursuant to the applicable federal order or state dairy regulation, and the value of unregulated milk shall be calculated in relation to the nearest prevailing class price in accordance with and subject to such adjustments as the commission may prescribe in regulations.

(c) A commission marketing order shall apply to all classes and uses of milk.

(d) The commission is hereby empowered to establish a compact over-order price for milk to be paid by pool plants and partially regulated plants. The commission is also empowered to establish a compact over-order price to be paid by all other handlers receiving milk from producers located in a regulated area. This price shall be established either as a compact over-order price or by one or more commission marketing orders. Whenever such a price has been established by either type of regulation, the legal obligation to pay such price shall be determined solely by the terms and purpose of the regulation without regard to the situs of the transfer of title, possession, or any other factors not related to the purposes of the regulation and this compact. Producer-handlers as defined in an applicable federal market order shall not be subject to a compact over-order price. The commission shall provide for similar treatment of producer-handlers under commission marketing orders.

(e) In determining the price, the commission shall consider the balance between production and consumption of milk and milk products in the regulated area, the costs of production including, but not limited to, the price of feed, the cost of labor, including the reasonable value of the producer's own labor and management, machinery expense, and interest expense, the prevailing price for milk outside the regulated area, the purchasing power of the public, and the price necessary to yield a reasonable return to the producer and distributor.

(f) When establishing a compact over-order price, the commission shall take such other action as is necessary and feasible to help ensure that the over-order price does not cause or compensate producers so as to generate local production of milk in excess of those quantities necessary to assure consumers of an adequate supply for fluid purposes.

(g) The commission shall whenever possible enter into agreements with state or federal agencies for exchange of information or services for the purpose of reducing regulatory burden and cost of administering the compact. The commission may reimburse other agencies for the reasonable cost of providing these services.

Sec. 10. OPTIONAL PROVISIONS FOR PRICING ORDER. Regulations establishing a compact over-order price or a commission marketing order may contain, but shall not be limited to, any of the following:

(1) provisions classifying milk in accordance with the form in which or purpose for which it is used, or creating a flat pricing program;

(2) with respect to a commission marketing order only, provisions establishing or providing a method for establishing separate minimum prices for each use classification prescribed by the commission, or a single minimum price for milk purchased from producers or associations of producers;

(3) with respect to an over-order minimum price, provisions establishing or providing a method for establishing such minimum price for Class I milk;

(4) provisions for establishing either an over-order price or a commission marketing order may make use of any reasonable method for establishing such price or prices including flat pricing and formula pricing. Provision may also be made for location adjustments, zone differentials, and for competitive credits with respect to regulated handlers who market outside the regulated area;

(5) provisions for the payment to all producers and associations of producers delivering milk to all handlers of uniform prices for all milk so delivered, irrespective of the uses made of such milk by the individual handler to whom it is delivered, or for the payment of producers delivering milk to the same handler of uniform prices for all milk delivered by them;

(A) With respect to regulations establishing a compact over-order price, the commission may establish one equalization pool within the regulated area for the sole purpose of equalizing returns to producers throughout the regulated area.

(B) With respect to any commission marketing order, as defined in Section 2, Subdivision three, which replaces one or more terminated federal orders or state dairy regulation, the marketing area of now separate state or federal orders shall not be merged without the affirmative consent of each state, voting through its delegation, which is partly or wholly included within any such new marketing area.

(6) provisions requiring persons who bring Class I milk into the regulated area to make compensatory payments with respect to all such milk to the extent necessary to equalize the cost of milk purchased by handlers subject to a compact over-order price or commission marketing order. No such provisions shall

discriminate against milk producers outside the regulated area. The provisions for compensatory payments may require payment of the difference between the Class I price required to be paid for such milk in the state of production by a federal milk marketing order or state dairy regulation and the Class I price established by the compact over-order price or commission marketing order;

(7) provisions specially governing the pricing and pooling of milk handled by partially regulated plants;

(8) provisions requiring that the account of any person regulated under the compact over-order price shall be adjusted for any payments made to or received by such persons with respect to a producer settlement fund of any federal or state milk marketing order or other state dairy regulation within the regulated area;

(9) provisions requiring the payment by handlers of an assessment to cover the costs of the administration and enforcement of such order pursuant to Article VII, Section 18(a);

(10) provisions for reimbursement to participants of the Women, Infants and Children Special Supplemental Food Program of the United States Child Nutrition Act of 1966;

(11) other provisions and requirements as the commission may find are necessary or appropriate to effectuate the purposes of this compact and to provide for the payment of fair and equitable minimum prices to producers.

ARTICLE V. RULEMAKING PROCEDURE

Sec. 11. RULEMAKING PROCEDURE. Before promulgation of any regulations establishing a compact over-order price or commission marketing order, including any provision with respect to milk supply under Subsection 9(f), or amendment thereof, as provided in Article IV, the commission shall conduct an informal rulemaking proceeding to provide interested persons with an opportunity to present data and views. Such rulemaking proceeding shall be governed by Section 4 of the federal Administrative Procedure Act, as amended (5 U.S.C. Section 553). In addition, the commission shall, to the extent practicable, publish notice of rulemaking proceedings in the official register of each participating state. Before the initial adoption of regulations establishing a compact over-order price or a commission marketing order and thereafter before any amendment with regard to prices or assessments, the commission shall hold a public hearing. The commission may commence a rulemaking proceeding on its own initiative or may in its sole discretion act upon the petition of any person including individual milk producers, any organization of milk producers or handlers, general farm organizations, consumer or public interest groups, and local, state, or federal officials.

Sec. 12. FINDINGS AND REFERENDUM. In addition to the concise general statement of basis and purpose required by Section 4(b) of the federal Administrative Procedure Act, as amended (5 U.S.C. Section 553 (c)), the commission shall make findings of fact with respect to:

(1) whether the public interest will be served by the establishment of minimum milk prices to dairy farmers under Article IV;

(2) what level of prices that will assure that producers receive a price sufficient to cover their costs of production and will elicit an adequate supply of milk for the inhabitants of the regulated area and for manufacturing purposes;

(3) whether the major provisions of the order, other than those fixing minimum milk prices, are in the public interest and are reasonably designed to achieve the purposes of the order;

(4) whether the terms of the proposed regional order or amendment are approved by producers as provided in Section 13.

Sec. 13. PRODUCER REFERENDUM. (a) For the purpose of ascertaining whether the issuance or amendment of regulations establishing a compact over-order price or a commission marketing order, including any provision with respect to milk supply under Section 9(f) of this compact, is approved by producers, the commission shall conduct a referendum among producers. The referendum shall be held in a timely manner, as determined by regulation of the commission. The terms and conditions of the proposed order or amendment shall be described by the commission in the ballot used in the conduct of the referendum, but the nature, content, or extent of such description shall not be a basis for attacking the legality of the order or any action relating thereto.

(b) An order or amendment shall be deemed approved by producers if the commission determines that it is approved by at least two-thirds of the voting producers who, during a representative period determined by the commission, have been engaged in the production of milk, the price of which would be regulated under the proposed order or amendment.

(c) For purposes of any referendum, the commission shall consider the approval or disapproval by any cooperative association of producers, qualified under the provisions of the Act of Congress of February 18, 1922, as amended, known as the Capper-Volstead Act, bona fide engaged in marketing milk, or in rendering services for or advancing the interests of producers of such commodity, as the approval or disapproval of the producers who are members or stockholders in, or under contract with, such cooperative association of producers, except as provided in Subdivision (1) hereof and subject to the provisions of Subdivisions (2) through (5) hereof.

(1) No cooperative which has been formed to act as a common marketing agency for both cooperatives and individual producers shall be qualified to block vote for either.

(2) Any cooperative which is qualified to block vote shall, before submitting its approval or disapproval in any referendum, give prior written notice to each of its members as to whether and how it intends to cast its vote. The notice shall be given in a timely manner as established and in the form prescribed by the commission.

(3) Any producer may obtain a ballot from the commission in order to register approval or disapproval of the proposed order.

(4) A producer who is a member of a cooperative which has provided notice of its intent to approve or not to approve a proposed order, and who obtains a ballot and with such ballot expresses his approval or disapproval of the proposed order, shall notify the commission as to the name of the cooperative of which he or she is a member, and the commission shall remove such producer's name from the list certified by such cooperative with its corporate vote.

(5) In order to ensure that all milk producers are informed regarding a proposed order, the commission shall notify all milk producers that an order is being considered and that each producer may register his approval or disapproval with the commission either directly or through his or her cooperative.

Sec. 14. TERMINATION OF OVER-ORDER PRICE OR MARKETING ORDER. (a) The commission shall terminate any regulations establishing an over-order price or commission marketing order issued under this article whenever it finds that such order or price obstructs or does not tend to effectuate the declared policy of this compact.

(b) The commission shall terminate any regulations establishing an over-order price or a commission marketing order issued under this article whenever it finds that such termination is favored by a majority of the producers who, during a representative period determined by the commission, have been engaged in the production of milk the price of which is regulated by such order; but such termination shall be effective only if announced on or before such date as may be specified in such marketing agreement or order.

(c) The termination or suspension of any order or provision thereof shall not be considered an order within the meaning of this article and shall require no hearing but shall comply with the requirements for informal rulemaking prescribed by Section 4 of the federal Administrative Procedure Act, as amended (5 U.S.C. Section 553).

ARTICLE VI. ENFORCEMENT

Sec. 15. RECORDS, REPORTS, ACCESS TO PREMISES. (a) The commission may by rule and regulation prescribe recordkeeping and reporting requirements for all regulated persons. For purposes of the administration and enforcement of this compact, the commission is authorized to examine the books and records of any regulated person relating to his or her milk business, and for that purpose, the commission's properly designated officers, employees, or agents shall have full access during normal business hours to the premises and records of all regulated persons.

(b) Information furnished to or acquired by commission officers, employees, or its agents pursuant to this section shall be confidential and not subject to disclosure except to the extent that the commission deems disclosure to be necessary in any administrative or judicial proceeding involving the administration or enforcement of this compact, an over-order price, a compact marketing order, or other regulations of the commission. The commission may promulgate regulations further defining the confidentiality of information pursuant to this section. Nothing in this section shall be deemed to prohibit (i) the issuance of general statements based upon the reports of a number of handlers which do not identify the information furnished by any person, or (ii) the publication by direction of the commission of the name of any person violating any regulation of the commission, together with a statement of the particular provisions violated by such person.

(c) No officer, employee, or agent of the commission shall intentionally disclose information, by inference or otherwise, which is made confidential pursuant to this section. Any person violating the provisions of this section shall, upon conviction, be subject to a fine of not more than $1,000 or to imprisonment for not more than one year, or both, and shall be removed from office. The commission shall refer any allegation of a violation of this section to the appropriate state enforcement authority or the United States Attorney.

Sec. 16. SUBPOENA, HEARINGS, AND JUDICIAL REVIEW. (a) The commission is hereby authorized and empowered by its members and its properly designated officers to administer oaths and issue subpoenas throughout all signatory states to compel the attendance of witnesses and the giving of testimony and the production of other evidence.

(b) Any handler subject to an order may file a written petition with the commission stating that any such order or any provision of any such order or any obligation imposed in connection therewith is not in accordance with law and praying for a modification thereof or to be exempted therefrom. He shall thereupon be given an opportunity for a hearing upon such petition, in accordance with regulations made by the commission. After such hearing, the commission shall make a ruling upon the prayer of such petition which shall be final, if in accordance with law.

(c) The district courts of the United States in any district in which such handler is an inhabitant, or has his principal place of business, are hereby vested with jurisdiction to review such ruling, provided a complaint for that purpose is filed within 30 days from the date of the entry of such ruling. Service of process in such proceedings may be had upon the commission by delivering to it a copy of the complaint. If the court determines that such ruling is not in accordance with law, it shall remand such proceedings to the commission with directions either (1) to make such ruling as the court shall determine to be in accordance with law, or (2) to take such further proceedings as, in its opinion, the law requires. The pendency of proceedings instituted pursuant to this subsection shall not impede, hinder, or delay the commission from obtaining relief pursuant to Section 17. Any proceedings brought pursuant to Section 17, except where brought by way of counterclaim in proceedings instituted pursuant to this section, shall abate whenever a final decree has been rendered in proceedings between the same parties, and covering the same subject matter, instituted pursuant to this section.

Sec. 17. ENFORCEMENT WITH RESPECT TO HANDLERS. (a) Any violation by a handler of the provisions of regulations establishing an over-order price or a commission marketing order, or other regulations adopted pursuant to this compact, shall:

(1) Constitute a violation of the laws of each of the signatory states. Such violation shall render the violator subject to a civil penalty in an amount as may be prescribed by the laws of each of the participating states, recoverable in any state or federal court of competent jurisdiction. Each day such violation continues shall constitute a separate violation.

(2) Constitute grounds for the revocation of a license or permit to engage in the milk business under the applicable laws of the participating states.

(b) With respect to handlers, the commission shall enforce the provisions of this compact, regulations establishing an over-order price, a commission marketing order, or other regulations adopted hereunder by:

(1) commencing an action for legal or equitable relief brought in the name of the commission in any state or federal court of competent jurisdiction; or

(2) referral to the state agency for enforcement by judicial or administrative remedy with the agreement of the appropriate state agency of a participating state.

(c) With respect to handlers, the commission may bring an action for injunction to enforce the provisions of this compact or the order or regulations adopted thereunder without being compelled to allege or prove that an adequate remedy of law does not exist.

ARTICLE VII. FINANCE

Sec. 18. FINANCE OF START-UP AND REGULAR COSTS. (a) To provide for its start-up costs, the commission may borrow money pursuant to its general power under Section 6, Subdivision (d), Paragraph 4. In order to finance the costs of administration and enforcement of this compact, including payback of start-up costs, the commission is hereby empowered to collect an assessment from each handler who purchases milk from producers within the region. If imposed, this assessment shall be collected on a monthly basis for up to one year from the date the commission convenes, in an amount not to exceed $.015 per hundredweight of milk purchased from producers during the period of the assessment. The initial assessment may apply to the projected purchases of handlers for the two-month period following the date the commission convenes. In addition, if regulations establishing an over-order price or

a compact marketing order are adopted, they may include an assessment for the specific purpose of their administration. These regulations shall provide for establishment of a reserve for the commission's ongoing operating expenses.

(b) The commission shall not pledge the credit of any participating state or of the United States. Notes issued by the commission and all other financial obligations incurred by it shall be its sole responsibility and no participating state or the United States shall be liable therefor.

Sec. 19. AUDIT AND ACCOUNTS. (a) The commission shall keep accurate accounts of all receipts and disbursements, which shall be subject to the audit and accounting procedures established under its rules. In addition, all receipts and disbursements of funds handled by the commission shall be audited yearly by a qualified public accountant and the report of the audit shall be included in and become part of the annual report of the commission.

(b) The accounts of the commission shall be open at any reasonable time for inspection by duly constituted officers of the participating states and by any persons authorized by the commission.

(c) Nothing contained in this article shall be construed to prevent commission compliance with laws relating to audit or inspection of accounts by or on behalf of any participating state or of the United States.

ARTICLE VIII. ENTRY INTO FORCE;

ADDITIONAL MEMBERS AND WITHDRAWAL

Sec. 20. ENTRY INTO FORCE; ADDITIONAL MEMBERS. The compact shall enter into force effective when enacted into law by any three states of the group of states composed of Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia, and West Virginia and when the consent of the United States Congress has been obtained.

Sec. 21. WITHDRAWAL FROM COMPACT. Any participating state may withdraw from this compact by enacting a statute repealing the same, but no such withdrawal shall take effect until one year after notice in writing of the withdrawal is given to the commission and the governors of all other participating states. No withdrawal shall affect any liability already incurred by or chargeable to a participating state before the time of such withdrawal.

Sec. 22. SEVERABILITY. If any part or provision of this compact is adjudged invalid by any court, such judgment shall be confined in its operation to the part or provision directly involved in the controversy in which such judgment shall have been rendered and shall not affect or impair the validity of the remainder of this compact. In the event Congress consents to this compact subject to conditions, said conditions shall not impair the validity of this compact when said conditions are accepted by three or more compacting states. A compacting state may accept the conditions of Congress by implementation of this compact.

SECTION . Section 12.020(c), Agriculture Code, is amended to read as follows:

(c) The provisions of this code subject to this section and the applicable penalty amounts are as follows:

Provision Maximum Penalty

Chapters 13, 14, 18, 61, 94, 95

101, 102, 103, 121, 125, 132,

[and ] 134, and 182 $500

Subchapter B, Chapter 71

Chapter 19 $2,000

Chapters 75 and 76

Subchapters A and C, Chapter 71

Chapters 72, 73, and 74 $5,000.

The amendments were read.

Senator Ogden moved that the Senate do not concur in the House amendments, but that a conference committee be appointed to adjust the differences between the two Houses on the bill.

The motion prevailed.

The Presiding Officer asked if there were any motions to instruct the conference committee on SB 705 before appointment.

There were no motions offered.

The Presiding Officer announced the appointment of the following conferees on the part of the Senate on the bill: Senators Ogden, Chair; Armbrister, Brown, Bivins, and Lucio.

CONFERENCE COMMITTEE REPORT ON

HOUSE BILL 1592 ADOPTED

Senator Duncan called from the President's table the Conference Committee Report on HB 1592. The Conference Committee Report was filed with the Senate on Thursday, May 27, 1999.

On motion of Senator Duncan, the Conference Committee Report was adopted by a viva voce vote.

CONFERENCE COMMITTEE REPORT ON

SENATE BILL 216 ADOPTED

Senator Duncan called from the President's table the Conference Committee Report on SB 216. The Conference Committee Report was filed with the Senate on Tuesday, May 25, 1999.

On motion of Senator Duncan, the Conference Committee Report was adopted by a viva voce vote.

CONFERENCE COMMITTEE REPORT ON

HOUSE BILL 2599 ADOPTED

Senator Duncan called from the President's table the Conference Committee Report on HB 2599. The Conference Committee Report was filed with the Senate on Thursday, May 27, 1999.

On motion of Senator Duncan, the Conference Committee Report was adopted by a viva voce vote.

CONFERENCE COMMITTEE ON HOUSE BILL 1861

Senator Shapleigh called from the President's table, for consideration at this time, the request of the House for a conference committee to adjust the differences between the two Houses on HB 1861 and moved that the request be granted.

The motion prevailed.

The Presiding Officer asked if there were any motions to instruct the conference committee on HB 1861 before appointment.

There were no motions offered.

Accordingly, the Presiding Officer announced the appointment of the following conferees on the part of the Senate on the bill: Senators Shapleigh, Chair; Shapiro, Lucio, Madla, and Bivins.

CONFERENCE COMMITTEE REPORT ON

HOUSE BILL 2085 ADOPTED

Senator Brown called from the President's table the Conference Committee Report on HB 2085. The Conference Committee Report was filed with the Senate on Wednesday, May 26, 1999.

On motion of Senator Brown, the Conference Committee Report was adopted by the following vote: Yeas 30, Nays 0.

Absent-excused: Luna.

CONFERENCE COMMITTEE REPORT ON

HOUSE BILL 1975 ADOPTED

Senator Bivins called from the President's table the Conference Committee Report on HB 1975. The Conference Committee Report was filed with the Senate on Tuesday, May 25, 1999.

On motion of Senator Bivins, the Conference Committee Report was adopted by a viva voce vote.

SENATE BILL 955 WITH HOUSE AMENDMENTS

Senator Bivins called SB 955 from the President's table for consideration of the House amendments to the bill.

The Presiding Officer, Senator Ratliff in Chair, laid the bill and the House amendments before the Senate.

Amendment

Amend SB 955 by substituting in lieu thereof the following:

A BILL TO BE ENTITLED

AN ACT

relating to pre-reading instruction and the provision of scholarships, bonuses, wage supplementation, and student loan repayment assistance for certain professional child-care workers.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Subchapter E, Chapter 29, Education Code, is amended by adding Section 29.155 to read as follows:

Sec. 29.155. READY TO READ GRANTS. (a) From funds appropriated for the purpose, the commissioner shall make grants as provided by this section in support of pre-reading instruction.

(b) The commissioner shall establish a competitive grant program for distribution of at least 95 percent of the available appropriated funds. Grants shall be

used to provide scientific, research-based pre-reading instruction for the purpose of directly improving pre-reading skills and for identifying cost-effective models for pre-reading intervention. The commissioner shall distribute the grants in amounts not less than $50,000 or more than $150,000 to eligible applicants to be used for:

(1) professional staff development in pre-reading instruction;

(2) pre-reading curriculum and materials;

(3) pre-reading skills assessment materials; and

(4) employment of pre-reading instructors.

(c) A public school operating a prekindergarten program, or an eligible entity as defined by Section 12.101(a) that provides a preschool instruction program and that meets qualifications prescribed by the commissioner, is eligible to apply for a grant if at least 75 percent of the children enrolled in the program are low-income students, as determined by rule of the commissioner.

(d) As a condition to receiving a grant, an applicant must commit public or private funds matching the grant in a percentage set by the commissioner. The commissioner shall determine the required percentage of matching funds based on the demonstrated economic capacity of the community served by the program to raise funds for the purpose of matching the grant, as determined by the commissioner. Matching funds must equal at least 30 percent, but not more than 75 percent, of the amount of the grant.

(e) The commissioner shall develop and implement performance measures for evaluating the effectiveness of grants under this section. Those measures must correlate to other reading diagnostic assessments used in public schools in kindergarten through the second grade.

(f) The commissioner may adopt rules as necessary for the administration of this section.

SECTION 2. Subtitle B, Title 3, Human Resources Code, is amended by adding Chapter 72 to read as follows:

CHAPTER 72. HEAD START PROGRAMS

Sec. 72.001. DEFINITION. In this chapter, "Head Start program" means the federal program established under the Head Start Act (42 U.S.C. Section 9831 et seq.) and its subsequent amendments.

Sec. 72.002. EDUCATIONAL SERVICES. To promote the comprehensive health, safety, and well-being of children receiving child care through Head Start programs, a program provider shall provide educational services to children participating in the program so that each child is prepared to enter school and is ready to learn after completing the program. The educational services provided must include components designed to enable a child to:

(1) develop phonemic, print, and numeracy awareness, including the ability to:

(A) recognize that letters of the alphabet are a special category of visual graphics that can be individually named;

(B) recognize a word as a unit of print;

(C) identify at least 10 letters of the alphabet; and

(D) associate sounds with written words;

(2) understand and use language to communicate for various purposes;

(3) understand and use an increasingly complex and varied vocabulary;

(4) develop and demonstrate an appreciation of books; and

(5) progress toward mastery of the English language, if the child's primary language is a language other than English.

SECTION 3. Subchapter A, Chapter 302, Labor Code, is amended by adding Section 302.006 to read as follows:

Sec. 302.006. PROFESSIONAL CHILD-CARE TRAINING SCHOLARSHIPS, BONUSES, AND WAGE SUPPLEMENTATION. (a) The commission shall develop and administer a program under which the commission awards scholarships in the amount of $1,000 each for professional child-care training to eligible recipients.

(b) A recipient may use a scholarship awarded under this section only to pay expenses associated with obtaining:

(1) Child Development Associate (CDA) national credentials;

(2) Certified Child-Care Professional (CCP) credentials; or

(3) a level one certificate or associate's degree in the area of child development or early childhood education from a public or private institution of higher education.

(c) To be eligible to receive a scholarship awarded under this section, a person must:

(1) be employed in a child-care facility, as defined by Section 42.002, Human Resources Code;

(2) intend to obtain a credential, certificate, or degree specified in Subsection (b);

(3) agree to work in a child-care facility, as defined by Section 42.002, Human Resources Code, for at least 18 additional months; and

(4) satisfy any other requirements adopted by the commission.

(d) A person may not receive more than one scholarship awarded under this section.

(e) In addition, the commission may provide for payment of a bonus or wage supplementation to a scholarship recipient who for 18 months after the date of receiving the scholarship provides care for children younger than six years of age while remaining in the employment of the child-care facility that employed the person when the scholarship was awarded. Any bonus or wage supplementation provided under this subsection shall be paid in equal shares by the scholarship recipient's employer and the commission. The commission shall determine the amount of any bonus and the amount and duration of any wage supplementation provided under this subsection.

(f) The commission shall fund scholarships and any bonuses or wage supplementation provided under this section through federal Child Care Development funds or other funding sources available to the commission. Total funding may not exceed $2 million per state biennium.

(g) The commission shall adopt rules necessary to implement this section. The rules must include provisions that:

(1) address the computation of the 18-month service requirement prescribed by Subsection (c); and

(2) ensure that the commission may recover scholarship money from a recipient who fails to comply with that service requirement or any other requirement imposed by the commission.

SECTION 4. Chapter 61, Education Code, is amended by adding Subchapter T to read as follows:

SUBCHAPTER T. EARLY CHILDHOOD CHILD-CARE WORKER

STUDENT LOAN REPAYMENT PROGRAM

Sec. 61.871. DEFINITIONS. In this subchapter:

(1) "Child-care facility" has the meaning assigned by Section 42.002, Human Resources Code.

(2) "Early childhood child-care worker" means a person who works more than 30 hours a week in a child-care facility, whether as an employee, owner, or volunteer, and whose duties consist primarily of providing child care or education to children less than four years of age.

Sec. 61.872. LOAN REPAYMENT ASSISTANCE AUTHORIZED. The board shall provide, in accordance with this subchapter and board rules, assistance in the repayment of eligible student loans for persons who apply and qualify for the assistance.

Sec. 61.873. ELIGIBILITY FOR ASSISTANCE. To be eligible to receive loan repayment assistance under this subchapter, a person must:

(1) hold an associate, baccalaureate, or graduate degree in early childhood development or the equivalent from a public or private institution of higher education accredited by a recognized accrediting agency; and

(2) enter into an agreement to serve as an early childhood child-care worker as provided by Section 61.875.

Sec. 61.874. ELIGIBLE LOANS. (a) A person may receive loan repayment assistance under this subchapter for the repayment of any student loan for education at any public or private institution of higher education through any lender. If the loan is not a state or federal guaranteed student loan, the note or other writing governing the terms of the loan must require the loan proceeds to be used for expenses incurred by a person attending any public or private institution of higher education.

(b) The board may not provide repayment assistance for a student loan that is in default at the time of the person's application.

Sec. 61.875. AGREEMENT; TERMS. (a) To qualify for loan repayment assistance under this subchapter, a person must enter into a written agreement with the board as provided by this subchapter. The agreement must specify the conditions the person must satisfy to receive repayment assistance.

(b) To be eligible for loan repayment assistance, a person must agree to serve at least two years as an early childhood child-care worker in this state. A person may receive loan repayment assistance for additional years of service as specified in the agreement.

(c) The agreement must specify the number of additional years of service for which the person may receive repayment assistance and the period within which the person must complete those years of additional service.

(d) Only service as an early childhood child-care worker after the date the person enters into the agreement may be used to satisfy the service requirement under the agreement.

(e) The person must complete the initial service obligation within three years of the date of the agreement unless the board grants the person additional time to begin fulfilling the initial service obligation. The board shall grant the person additional time to complete the service obligation for good cause.

(f) The board shall cancel a person's service obligation if the board determines that the person:

(1) has become permanently disabled so that the person is not able to work as an early childhood child-care worker; or

(2) has died.

(g) The board shall require a person who receives loan repayment assistance under this subchapter to sign an agreement in the nature of a contract under which the person agrees to perform the required years of service. In the event the person does not fulfill the terms of the agreement, all loan repayment assistance paid on behalf of the person becomes a loan and must be repaid. The agreement must include a promissory note acknowledging the conditional nature of the loan repayment assistance and promising to repay the amount of the loan repayment, applicable interest, and reasonable collection costs if the person does not satisfy the applicable conditions. The board shall determine the terms of the promissory note.

Sec. 61.876. AMOUNT OF REPAYMENT ASSISTANCE; LIMITATIONS. (a) For each year that a qualified person serves as an early childhood child-care worker in this state under an agreement under Section 61.875, the person may receive loan repayment assistance in an amount not to exceed 15 percent of the total amount of the person's outstanding student loans, including scheduled interest payments that would become due if the loan is not prepaid, when the person enters into the agreement. The amount of repayment assistance paid for a year may not exceed the lesser of:

(1) the actual amount of the loan payments the person receiving the assistance is required to make for that year; or

(2) an amount set by the board equal to the maximum amount of resident tuition and required fees paid by a person enrolled as a full-time student at a general academic teaching institution for the most recent academic year, excluding summer sessions.

(b) The board may enter into an agreement to provide loan repayment assistance under Section 61.875 only to the extent money is appropriated or otherwise available to provide the repayment assistance as it becomes payable. If that money will not be sufficient to provide repayment assistance to each eligible applicant, the board shall select persons to receive repayment assistance from the eligible applicants according to financial need or on another basis the board considers reasonable to further the purposes of this subchapter.

(c) The board may determine the manner in which the loan repayment assistance is to be paid and shall include provisions governing the manner of repayment in the agreement. The board may provide for the payment of a portion of the repayment assistance in one or more installments before the person completes a full year of service as an early childhood child-care worker and for the payment of the remainder of the repayment assistance for that year after the completion of the full year of service.

Sec. 61.877. ADMINISTRATION; RULES. (a) The board shall adopt rules necessary for the administration of this subchapter.

(b) The board shall distribute a copy of the rules adopted under this section and pertinent information in this subchapter to each public or private institution of higher education in this state that offers a degree program in early childhood development or an equivalent degree.

Sec. 61.878. FUNDING. The board may solicit and accept gifts, grants, and donations from any public or private source for the purposes of this subchapter.

SECTION 5. To the extent practical, the commissioner of education shall administer the grant program established by Section 29.155, Education Code, as added by this Act, in a manner consistent with other reading programs the commissioner identifies as components of the governor's reading initiative.

SECTION 6. (a) Subchapter T, Chapter 61, Education Code, as added by this Act, takes effect immediately and applies beginning with the 1999 fall semester.

(b) Section 29.155, Education Code, and Section 302.006, Labor Code, as added by this Act, take effect September 1, 1999.

SECTION 7. The importance of this legislation and the crowded condition of the calendars in both houses create an emergency and an imperative public necessity that the constitutional rule requiring bills to be read on three several days in each house be suspended, and this rule is hereby suspended, and that this Act take effect and be in force according to its terms, and it is so enacted.

Floor Amendment No. 1

Amend CSSB 955, as follows:

(1) On page 3, line 25, strike SECTIONS 3 and 4.

The amendments were read.

On motion of Senator Bivins, the Senate concurred in the House amendments to SB 955 by a viva voce vote.

CONFERENCE COMMITTEE REPORT ON

HOUSE BILL 676 ADOPTED

Senator Bivins called from the President's table the Conference Committee Report on HB 676. The Conference Committee Report was filed with the Senate on Wednesday, May 26, 1999.

On motion of Senator Bivins, the Conference Committee Report was adopted by a viva voce vote.

SENATE RESOLUTION 1181

Senator Sibley offered the following resolution:

BE IT RESOLVED by the Senate of the State of Texas, 76th Legislature, Regular Session, 1999, That Senate Rule 12.03 be suspended in part as provided by Senate Rule 12.08 to enable the conference committee appointed to resolve the differences on SB 560, relating to the regulation of telecommunications utilities by the Public Utility Commission of Texas and the provision of telecommunications services, to consider and take action on the following matters:

(1) Senate Rules 12.03(3) and (4) are suspended to permit the committee to add additional text not included in either the house or senate version of the bill, in Section 5 of the bill, in amended Section 51.002, Utilities Code, so that Section 5 reads as follows:

SECTION 5. Sections 51.002(6), (7), and (10), Utilities Code, are amended to read as follows:

(6) "Long run incremental cost" has the meaning assigned by 16 T.A.C. Section 23.91 or its successor.

(7) "Pricing flexibility" includes:

(A) customer specific contracts;

(B) packaging of services;

(C) volume, term, and discount pricing;

(D) zone density pricing, with a zone to be defined as an exchange; and

(E) other promotional pricing.

(10) "Telecommunications provider":

(A) means:

(i) a certificated telecommunications utility;

(ii) a shared tenant service provider;

(iii) a nondominant carrier of telecommunications services;

(iv) a provider of commercial mobile service as defined by Section 332(d), Communications Act of 1934 (47 U.S.C. Section 151 et seq.), Federal Communications Commission rules, and the Omnibus Budget Reconciliation Act of 1993 (Public Law 103-66), except that the term does not include these entities for the purposes of Chapter 55 or 64;

(v) a telecommunications entity that provides central office based PBX-type sharing or resale arrangements;

(vi) an interexchange telecommunications carrier;

(vii) a specialized common carrier;

(viii) a reseller of communications;

(ix) a provider of operator services;

(x) a provider of customer-owned pay telephone service; or

(xi) another person or entity determined by the commission to provide telecommunications services to customers in this state; and

(B) does not mean:

(i) a provider of enhanced or information services, or another user of telecommunications services, who does not also provide telecommunications services; or

(ii) a state agency or state institution of higher education, or a service provided by a state agency or state institution of higher education.

Explanation: This change is needed to specify provisions for zone density pricing.

(2) Senate Rules 12.03(3) and (4) are suspended to permit the committee to add additional text not included in either the house or senate version of the bill, to read as follows:

SECTION 34. Subchapter A, Chapter 58, Utilities Code, is amended by adding Section 58.004 to read as follows:

Sec. 58.004. PACKAGING, TERM AND VOLUME DISCOUNTS, AND PROMOTIONAL OFFERINGS. (a) Notwithstanding any other provision of this chapter, an electing company that has more than five million access lines in this state may not offer in an exchange a service listed in Sections 58.151(1)-(4) as a component of a package of services or as a promotional offering until the company makes the reduction in switched access service rates required by Section 58.301(2) unless the customer of one of the pricing flexibility offerings described in this subsection is a federal, state, or local governmental entity.

(b) Notwithstanding any other provision of this chapter, an electing company that has more than five million access lines in this state may not offer a volume or term discount on any service listed in Sections 58.151(1)-(4) until September 1, 2000, unless the customer of one of the pricing flexibility offerings described in this subsection is a federal, state, or local governmental entity.

(c) Notwithstanding any other provision of this chapter, an electing company that has more than five million access lines in this state may offer in an exchange a service listed in Sections 58.051(a)(1)-(4) as a component of a package of services, as a promotional offering, or with a volume or term discount on and after September 1, 1999.

Explanation: This change is necessary to provide restrictions on offering certain nonbasic services as a component of a package of services, as a promotional offering, or with a volume or term discount.

The resolution was read and was adopted by the following vote: Yeas 30, Nays 0.

Absent-excused: Luna.

GUESTS PRESENTED

Senator Duncan was recognized and introduced to the Senate members of the select baseball team "The Thunder" from Lubbock, accompanied by their coaches.

The Senate welcomed its guests.

SENATE BILL 1896 WITH HOUSE AMENDMENT

Senator Jackson called SB 1896 from the President's table for consideration of the House amendment to the bill.

The Presiding Officer laid the bill and the House amendment before the Senate.

Amendment

Amend SB 1896 by substituting in lieu thereof the following:

A BILL TO BE ENTITLED

AN ACT

relating to the sale of real property by counties.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 263.008, Local Government Code, is amended to read as follows:

Sec. 263.008. REAL ESTATE BROKER [REALTOR ] AGREEMENTS AND FEES FOR THE SALE OF REAL PROPERTY. (a) In this section, "real estate broker" means a person licensed as a real estate broker under The Real Estate License Act (Article 6573a, Vernon's Texas Civil Statutes).

(b) The commissioners court of a county may contract with a real estate broker [person licensed under The Real Estate License Act (Article 6573a, Vernon's Texas Civil Statutes) ] to sell a tract of real property that is owned by the county.

(c) [(b) ] The commissioners court of a county may pay a fee if a real estate broker [person licensed under The Real Estate License Act (Article 6573a, Vernon's Texas Civil Statutes) ] produces a ready, willing, and able buyer to purchase a tract of real property [that is owned by the county ].

(d) If a contract made under Subsection (b) requires a real estate broker to list the tract of real property for sale for at least 30 days with a multiple-listing service used by other real estate brokers in the county, the commissioners court on or after the 30th day after the date the property is listed may sell the tract of real property to a ready, willing, and able buyer who is produced by any real estate broker using the multiple-listing service and who submits the highest cash offer.

(e) The commissioners court may sell a tract of real property under this section without complying with the requirements for conducting a public auction, including the requirements prescribed by Section 263.001.

SECTION 2. The importance of this legislation and the crowded condition of the calendars in both houses create an emergency and an imperative public necessity that the constitutional rule requiring bills to be read on three several days in each house be suspended, and this rule is hereby suspended, and that this Act take effect and be in force from and after its passage, and it is so enacted.

The amendment was read.

Senator Jackson moved to concur in the House amendment to SB 1896.

The motion prevailed by the following vote: Yeas 30, Nays 0.

Absent-excused: Luna.

CONFERENCE COMMITTEE ON HOUSE BILL 1884

Senator Brown, on behalf of Senator Harris, called from the President's table, for consideration at this time, the request of the House for a conference committee to adjust the differences between the two Houses on HB 1884 and moved that the request be granted.

The motion prevailed.

The Presiding Officer asked if there were any motions to instruct the conference committee on HB 1884 before appointment.

There were no motions offered.

Accordingly, the Presiding Officer announced the appointment of the following conferees on the part of the Senate on the bill: Senators Harris, Chair; Ellis, Madla, Brown, and Wentworth.

CONFERENCE COMMITTEE ON HOUSE BILL 2510

Senator Shapleigh called from the President's table, for consideration at this time, the request of the House for a conference committee to adjust the differences between the two Houses on HB 2510 and moved that the request be granted.

The motion prevailed.

The Presiding Officer asked if there were any motions to instruct the conference committee on HB 2510 before appointment.

There were no motions offered.

Accordingly, the Presiding Officer announced the appointment of the following conferees on the part of the Senate on the bill: Senators Shapleigh, Chair; Brown, Bernsen, Sibley, and West.

CONFERENCE COMMITTEE REPORT ON

SENATE BILL 1207 ADOPTED

Senator Cain called from the President's table the Conference Committee Report on SB 1207. The Conference Committee Report was filed with the Senate on Wednesday, May 26, 1999.

On motion of Senator Cain, the Conference Committee Report was adopted by the following vote: Yeas 30, Nays 0.

Absent-excused: Luna.

SENATE BILL 1595 WITH HOUSE AMENDMENT

Senator Brown called SB 1595 from the President's table for consideration of the House amendment to the bill.

The Presiding Officer, Senator Ratliff in Chair, laid the bill and the House amendment before the Senate.

Floor Amendment No. 1

Amend SB 1595 by striking Sections 9 and 10 of the bill and substituting the following:

SECTION 9. The importance of this legislation and the crowded condition of the calendars in both houses create an emergency and an imperative public necessity that the constitutional rule requiring bills to be read on three several days in each house be suspended, and this rule is hereby suspended, and that this Act take effect and be in force from and after its passage, and it is so enacted.

The amendment was read.

Senator Brown moved to concur in the House amendment to SB 1595.

The motion prevailed by the following vote: Yeas 30, Nays 0.

Absent-excused: Luna.

CONFERENCE COMMITTEE REPORT ON

SENATE BILL 287 ADOPTED

Senator Brown called from the President's table the Conference Committee Report on SB 287. The Conference Committee Report was filed with the Senate on Wednesday, May 26, 1999.

On motion of Senator Brown, the Conference Committee Report was adopted by the following vote: Yeas 30, Nays 0.

Absent-excused: Luna.

(Senator Brown in Chair)

CONFERENCE COMMITTEE REPORT ON

SENATE BILL 177 ADOPTED

Senator Ratliff called from the President's table the Conference Committee Report on SB 177. The Conference Committee Report was filed with the Senate on Thursday, May 27, 1999.

On motion of Senator Ratliff, the Conference Committee Report was adopted by a viva voce vote.

CONFERENCE COMMITTEE REPORT ON

HOUSE BILL 1945 ADOPTED

Senator Ratliff called from the President's table the Conference Committee Report on HB 1945. The Conference Committee Report was filed with the Senate on Monday, May 24, 1999.

On motion of Senator Ratliff, the Conference Committee Report was adopted by the following vote: Yeas 30, Nays 0.

Absent-excused: Luna.

CONFERENCE COMMITTEE REPORT ON

HOUSE BILL 1676 ADOPTED

Senator Ratliff called from the President's table the Conference Committee Report on HB 1676. The Conference Committee Report was filed with the Senate on Monday, May 24, 1999.

On motion of Senator Ratliff, the Conference Committee Report was adopted by a viva voce vote.

MOTION TO RECESS

On motion of Senator Carona, the Senate at 11:33 a.m. agreed to recess, upon receipt of Messages from the House, until 1:00 p.m. today.

MESSAGE FROM THE HOUSE

HOUSE CHAMBER

Austin, Texas

May 29, 1999

The Honorable President of the Senate

Senate Chamber

Austin, Texas

Mr. President:

I am directed by the House to inform the Senate that the House has taken the following action:

THE HOUSE HAS GRANTED THE REQUEST OF THE SENATE FOR THE APPOINTMENT OF A CONFERENCE COMMITTEE ON THE FOLLOWING MEASURES:

SB 50

House Conferees: Naishtat - Chair/Dukes/King, Phil/Pickett/Reyna, Arthur

SB 86

House Conferees: Danburg - Chair/Brimer/Hunter/Merritt/Turner, Sylvester

SB 528

House Conferees: Giddings - Chair/Dutton/Garcia/Haggerty/Hinojosa

SB 558

House Conferees: Garcia - Chair/Chavez/Christian/Naishtat/Talton

SB 655

House Conferees: Uresti - Chair/Chavez/Hunter/Jones, Charles/Solis, Juan

SB 694

House Conferees: Solis, Jim - Chair/Capelo/King, Tracy/Thompson/Uresti

SB 766

House Conferees: Allen - Chair/Chisum/Gallego/Maxey/Zbranek

SB 947

House Conferees: Maxey - Chair/Brown, Fred/Farabee/Rangel/Wohlgemuth

SB 982

House Conferees: Van de Putte - Chair/Burnam/Eiland/Smithee/Thompson

SB 996

House Conferees: Coleman - Chair/Davis, John/Naishtat/Noriega/Truitt

SB 1438

House Conferees: Wilson - Chair/Gutierrez/McReynolds/Pickett/Pitts

SB 1520

House Conferees: Elkins - Chair/Averitt/Marchant/Pitts/Solomons

Respectfully,

/s/Sharon Carter, Chief Clerk

House of Representatives

RECESS

Pursuant to a previously adopted motion, the Senate at 12:11 p.m. recessed until 1:00 p.m. today.

AFTER RECESS

The Senate met at 1:00 p.m. and was called to order by Senator Ratliff.

CONFERENCE COMMITTEE ON HOUSE BILL 3457

Senator Armbrister called from the President's table, for consideration at this time, the request of the House for a conference committee to adjust the differences between the two Houses on HB 3457 and moved that the request be granted.

The motion prevailed.

The Presiding Officer asked if there were any motions to instruct the conference committee on HB 3457 before appointment.

There were no motions offered.

Accordingly, the Presiding Officer announced the appointment of the following conferees on the part of the Senate on the bill: Senators Armbrister, Chair; Whitmire, Jackson, Nelson, and West.

SENATE BILL 1563 WITH HOUSE AMENDMENT

Senator Armbrister called SB 1563 from the President's table for consideration of the House amendment to the bill.

The Presiding Officer laid the bill and the House amendment before the Senate.

Floor Amendment No. 1

Amend SB 1563 as follows:

1. In SECTION 1 of the bill, in new Section 2113.002(b), Government Code, (House Committee Report, page 1, line 17), between "groups" and "regarding", insert "or other appropriate methods approved by the Governor's Office of Budget and Planning and the Legislative Budget Board."

2. In SECTION 1 of the bill, in new Section 2113.002(b), Government Code, (House Committee Report, page 1, line 19), strike "must" and insert "shall be as specified by the Governor's Office of Budget and Planning and the Legislative Budget Board and may . . .

3. In SECTION 1 of the bill, in new Section 2113.006(c), Government Code, (House Committee Report, page 4, line 1), between "Planning" and the ".", insert "and Legislative Budget Board".

4. In SECTION 1 of the bill, (House Committee Report, page 4, between lines 9 and 10), insert new subsection (d) to read as follows:

(d) Each agency that maintains a web site shall publish its Compact With Texans on that web site.

5. In SECTION 1 of the bill (House Committee Report, page between lines 9 and 10), insert the following new Section 2113.007:

Sec. 2113.007. RULEMAKING AUTHORITY. (a) The Governor's Office of Budget and Planning may adopt rules to implement this Chapter.

(b) In developing the rules the Office shall consult with and consider the comments of the Legislative Budget Board.

6. In SECTION 2(b) of the bill, (House Committee Report, page 4 line 17), between "a" and "report" insert "two volume".

7. In SECTION 2(c) of the bill, (House Committee Report, page 4, lines 21-25) strike subdivisions (1) and (2) and substitute the following:

"(1) a compilation of each agency's customer service performance standards; and

(2) an analysis of agencies' customer service performance standards and recommendations for improving customer service and customer service standards by state agencies."

The amendment was read.

On motion of Senator Armbrister, the Senate concurred in the House amendment to SB 1563 by a viva voce vote.

CONFERENCE COMMITTEE REPORT ON

HOUSE BILL 2960 ADOPTED

Senator Armbrister called from the President's table the Conference Committee Report on HB 2960. The Conference Committee Report was filed with the Senate on Wednesday, May 26, 1999.

On motion of Senator Armbrister, the Conference Committee Report was adopted by a viva voce vote.

SENATE BILL 1130 WITH HOUSE AMENDMENT

Senator Armbrister called SB 1130 from the President's table for consideration of the House amendment to the bill.

The Presiding Officer laid the bill and the House amendment before the Senate.

Amendment

Amend SB 1130 by substituting in lieu thereof the following:

A BILL TO BE ENTITLED

AN ACT

relating to programs and systems administered by the Employees Retirement System of Texas.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 803.402, Government Code, is amended to read as follows:

Sec. 803.402. RECORDS. Except as provided by Section 825.507, records of members and beneficiaries of a retirement system to which this chapter applies that are in the custody of any retirement [the ] system to which this chapter applies are [considered to be personnel records and ] confidential and not subject to disclosure and are exempt from the public access provisions of [information under ] Chapter 552. The records or information in the records may be transferred between retirement systems to which this chapter applies to the extent necessary to administer the proportionate retirement program provided by this chapter.

SECTION 2. Section 805.008, Government Code, is amended by amending Subsection (c) and adding Subsection (h) to read as follows:

(c) As an alternative to Subsections (a) and (b) and except as provided by Subsection (h), the systems by rule may require the system from which service credit is transferred to pay monthly an amount equal to the portion of the actual value of the monthly payment of the annuity that represents the percentage of the total amount of service credit that is transferred.

(h) If a person elects to receive a partial lump-sum payment under the law governing the system from which the person is retiring, a transfer of an amount equal to the portion of the actual value of a lump-sum payment that represents the percentage of the amount of service credit transferred shall be made at the time the lump-sum payment is made.

SECTION 3. Section 811.001, Government Code, is amended by amending Subdivision (8) and adding Subdivision (18) to read as follows:

(8) "Custodial officer" means a member of the retirement system who is employed by the Board of Pardons and Paroles or the Texas Department of Criminal Justice as a parole officer or caseworker or who is employed by the institutional division or the state jail division of the Texas Department of Criminal Justice and certified by the department as having a normal job assignment that requires frequent or infrequent regularly planned contact with, and in close proximity to, inmates of the institutional division or inmates or defendants confined in the state jail division without the protection of bars, doors, security screens, or similar devices and includes assignments normally involving supervision or the potential for supervision of inmates in inmate housing areas, educational or recreational facilities, industrial shops, kitchens, laundries, medical areas, agricultural shops or fields, or in other areas on or away from property of the institutional division or the state jail division. The term includes a member who transfers from the Texas Department of Criminal Justice to the managed health care unit of The University of Texas Medical Branch or the Texas Tech University Health Sciences Center pursuant to Section 9.01, Chapter 238, Acts of the 73rd Legislature, 1993, elects at the time of transfer to retain membership in the retirement system, and is certified by the managed health care unit or the health sciences center as having a normal job assignment described by this subdivision.

(18) "Parole officer" has the meaning assigned by Section 508.001.

SECTION 4. Subsection (a), Section 812.101, Government Code, is amended to read as follows:

(a) A member of the retirement system may withdraw all of the member's accumulated contributions for service credited in the employee class of membership if:

(1) the member does not hold a position included in that class;

(2) the member does not assume or resume, during the 30 days after the date on [calendar month following the month in ] which the member terminates employment, a position included in that class; and

(3) the member's application for withdrawal is filed before the member assumes or resumes a position included in that class.

SECTION 5. Section 812.104, Government Code, is amended by amending Subsection (a) and adding Subsection (c) to read as follows:

(a) Except as provided by Subsection (c), deposits [Deposits ] representing interest or membership fees that are required of a member to establish service credit under Section 813.202, 813.302, 813.402, or 813.502 are not refundable.

(c) At the time a service retirement, disability retirement, or death benefit annuity becomes payable, the retirement system shall refund any contributions, interest, or membership fees used to establish service credit that is not used in computing the amount of the annuity.

SECTION 6. Subsection (b), Section 813.102, Government Code, is amended to read as follows:

(b) A member may reestablish credit by depositing with the retirement system in a lump sum the amount withdrawn from a membership class, [plus all membership fees due, ] plus interest computed on the basis of the state fiscal year at an annual rate of five percent from the date of withdrawal to the date of redeposit.

SECTION 7. Subsection (b), Section 813.104, Government Code, is amended to read as follows:

(b) Except as provided by Subsection (c), payments may not be made under a rule adopted under this section:

(1) to establish or reestablish service credit of a person who is currently [has ] retired or has died; or

(2) to establish current service under Section 813.201.

SECTION 8. Subsection (b), Section 813.201, Government Code, is amended to read as follows:

(b) A member may not, after August 31, 1997 [1991 ], accrue or establish [a total of more than 50 years of ] service credit in the employee class of membership when the total amount of service credit, multiplied by the percentage in effect for computing annuities under Section 814.105, would exceed the number 100. When the maximum amount [a total of 50 years ] of service credit is accrued or established by a member in the employee class, member and state contributions cease, although the member retains membership subject to Section 812.005.

SECTION 9. Subsection (b), Section 813.202, Government Code, is amended to read as follows:

(b) A member may establish credit under this section by depositing with the retirement system in a lump sum a contribution computed as provided by Section 813.404 or 813.505, [plus all membership fees due, ] plus interest computed on the basis of the state fiscal year at an annual rate of 10 percent from the date the service was performed to the date of deposit.

SECTION 10. Subsection (b), Section 813.402, Government Code, is amended to read as follows:

(b) A member may establish credit under this section by depositing with the retirement system in a lump sum a contribution computed as provided by Section 813.404, [plus all membership fees due, ] plus interest computed at an annual rate of 10 percent from the fiscal year in which the service was performed to the date of deposit.

SECTION 11. Subsections (b) and (c), Section 813.506, Government Code, are amended to read as follows:

(b) To be creditable as custodial officer service, service performed must be performed as a parole officer or caseworker or must meet the requirements of the rules adopted under Subsection (a) and [may ] be performed by persons in one of the following job categories:

(1) all persons classified as Correctional Officer I through warden, including training officers and special operations reaction team officers;

(2) all other employees assigned to work on a unit and whose jobs require routine contact with inmates or defendants confined in the state jail division, including but not limited to farm managers, livestock supervisors, maintenance foremen, shop foremen, medical assistants, food service supervisors, stewards, education consultants, commodity specialists, and correctional counselors;

(3) employees assigned to administrative offices whose jobs require routine contact with inmates or defendants confined in the state jail division at least 50 percent of the time, including but not limited to investigators, compliance monitors, accountants routinely required to audit unit operations, sociologists, interviewers, classification officers, and supervising counselors; and

(4) administrative positions whose jobs require response to emergency situations involving inmates or defendants confined in the state jail division, including but except as specified not limited to the director, deputy directors, assistant directors, and not more than 25 administrative duty officers.

(c) The Texas Department of Criminal Justice, the managed health care unit of The University of Texas Medical Branch[, ] or the Texas Tech University Health Sciences Center, or the Board of Pardons and Paroles, as applicable, shall determine a person's eligibility to receive credit as a custodial officer. A determination of the department, [or ] unit, or board may not be appealed by an employee but is subject to change by the retirement system.

SECTION 12. Subchapter F, Chapter 813, Government Code, is amended by adding Section 813.511 to read as follows:

Sec. 813.511. CREDIT FOR ACCUMULATED ANNUAL LEAVE. (a) A member who holds a position included in the employee class of membership during the month that includes the effective date of the member's retirement and who retires based on service or a disability is entitled to service credit in the retirement system for the member's annual leave that has accumulated and is unused on the last day of employment. Annual leave is creditable in the retirement system at the rate of one month of service credit for each 20 days, or 160 hours, of accumulated annual leave and one month for each fraction of days or hours remaining after division of the total hours of accumulated annual leave by 160.

(b) A member who holds a position included in the employee class may use annual leave creditable under this section to satisfy service requirements for retirement under Section 814.104 or 814.107 if the annual leave attributed to the eligibility requirements remains otherwise unused on the last day of employment.

(c) Except as provided by Subsection (d), the disbursing officer of each department or agency shall, before the 11th day after the effective date of retirement of one or more employees of the department or agency, certify to the retirement system:

(1) the name of each person whose retirement from the department or agency, and from state service, became effective during the preceding month; and

(2) the amount of the person's accumulated annual leave on the last day of employment.

(d) The disbursing officer of a department or agency that employs a member who applies for retirement under Subsection (b) shall, not more than 90 or less than 30 days before the effective date of the member's retirement, certify to the retirement system the amount of the member's accumulated and unused annual leave. The officer shall immediately notify the retirement system if the member uses annual leave after the date of certification.

(e) On receipt of a certification under Subsection (c) or (d), the retirement system shall grant any credit to which a retiring member or retiree who is a subject of the certification is entitled. An increase in the computation of an annuity because of credit provided by this section after a certification under Subsection (d) begins with the first payment that becomes due after certification.

(f) The retirement system shall cancel the retirement of a person who used annual leave creditable under this section to qualify for service retirement if the annual leave is otherwise used by the person before the effective date of retirement.

SECTION 13. Section 814.104, Government Code, is amended by amending Subsection (a) and adding Subsection (c) to read as follows:

(a) Except as provided by Section 814.102 or by rule adopted under Section 813.304(d) or 803.202(a)(2) [803.202(2) ], a member who has service credit in the retirement system is eligible to retire and receive a service retirement annuity if the member:

(1) [if the member ] is at least 60 years old and has at least 5 years of service credit in the employee class; or

(2) has at least 5 years of service credit in the employee class and [if ] the sum of the member's age and amount of service credit in the employee class, including months of age and credit, equals or exceeds the number 80.

(c) For the sole purpose of determining eligibility to receive a service retirement annuity, the retirement system shall consider service performed as a participant in the optional retirement program under Chapter 830 as if it were service for which credit is established in the retirement system.

SECTION 14. Section 814.1041, Government Code, is amended to read as follows:

Sec. 814.1041. TEMPORARY SERVICE RETIREMENT OPTION FOR MEMBERS AFFECTED BY PRIVATIZATION OR OTHER REDUCTION IN WORKFORCE. (a) This section applies only to members of the employee class who are not otherwise eligible to retire and whose positions with the Texas Workforce Commission, the Texas Department of Human Services, [or ] the Texas Department of Mental Health and Mental Retardation, or the Texas Department of Health are eliminated as a result of contracts with private service providers or other reductions in services provided by those agencies and who separate from state service at that time.

(b) A member described by Subsection (a) is eligible to retire and receive a service retirement annuity if the member's age and service credit, each equally

increased only as needed to meet minimum age and service requirements, but not by more than [by ] three years, would meet the minimum age and service requirements for service retirement under Section 814.104(a) at the time the member separates from state service as described by Subsection (a). The annuity of a person who retires under this subsection is computed on the person's accrued service credit increased by the minimum amount of service credit necessary to meet the service credit requirement for retirement, but not by more than three years.

(c) [A member described by Subsection (a) becomes eligible to retire and receive a service retirement annuity on the date on which the member would have met the age and service requirements for service retirement under Section 814.104(a) had the member remained employed by the state if, on the date of separation from state service, the member's age and service credit, each increased by five years, would meet age and service requirements for service retirement under Section 814.104(a). The annuity of a person who retires under this subsection is computed on the person's accrued service credit.

[(d) If a member described by Subsection (c) is reemployed by the state before retirement, the time between the member's separation from state service and reemployment may be used only to compute eligibility for service retirement and may not be used to compute the amount of any service retirement annuity.

[(e) ] A member who applies to retire under this section and the state agency from which the member separated from service shall provide documentation required by the retirement system to establish eligibility to retire under this section.

(d) [(f) ] This section applies only to positions eliminated by privatization or other reductions in workforce before September 1, 2001 [1999 ].

SECTION 15. Subchapter B, Chapter 814, Government Code, is amended by adding Section 814.1042 to read as follows:

Sec. 814.1042. SERVICE FOR CERTAIN GOVERNMENTAL EMPLOYERS. (a) For the sole purpose of determining eligibility to receive a service retirement annuity under Section 814.104(a)(2), the retirement system shall consider not more than 60 months, or portions of months, of service performed for a Texas governmental employer by a member who has at least five years of service credit, excluding military service, in the employee class as if it were service for which credit is established in the retirement system.

(b) A member who seeks the application of this section must provide documentation satisfactory to the retirement system of the amount of service performed for the governmental employer.

(c) Service described by this section may not be used in determining eligibility for participation in the Texas Employees Uniform Group Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance Code).

SECTION 16. Subsections (c), (d), and (e), Section 814.107, Government Code, are amended to read as follows:

(c) The standard combined service retirement annuity that is payable under this section is based on retirement on or after the attainment of the normal retirement age, which for purposes of this section is the earlier of either the age of 50 or the age at which the sum of the member's age and amount of service credit in the employee class equals the number 80 [at the age of 50 or older ]. A law enforcement or custodial officer who retires before attaining the normal retirement age [of 50 ] is entitled to an annuity that is actuarially reduced from the annuity available at the normal retirement age [of 50 ] to the law enforcement or custodial officer service credit annuity amount

available at the sum of the member's age and amount of employee class service credit. The annuity [earlier retirement age and ] is payable from the law enforcement and custodial officer supplemental retirement fund.

(d) A member who retires under this section retires simultaneously from the employee class of membership. Benefits for service in the employee class of membership become payable from the trust fund established by Section 815.310 at the normal retirement age [of 50 ] under the computation provided by Section 814.105. Optional retirement annuities provided by Section 814.108 are available to a member eligible to receive a service retirement annuity under this section, but the same optional plan and designee must be selected for the portion of the annuity payable from the law enforcement and custodial officer supplemental retirement fund and the portion payable from the trust fund established by Section 815.310.

(e) The amount payable from the law enforcement and custodial officer supplemental retirement fund is reducible by the amount paid from the trust fund established by Section 815.310 for service as a law enforcement or custodial officer. The total combined amount of an annuity under this section may not be less than the authorized benefit under Subsection (b) subtracted by any amount necessary because of selection of an optional annuity, because of retirement before the normal retirement age [of 50 ], or as provided by Subsection (f).

SECTION 17. Subchapter B, Chapter 814, Government Code, is amended by adding Section 814.1082 to read as follows:

Sec. 814.1082. PARTIAL LUMP-SUM OPTION. (a) A member who is eligible for an unreduced service retirement annuity may select a standard retirement annuity or an optional retirement annuity described by Section 814.108 together with a partial lump-sum distribution.

(b) The amount of the lump-sum distribution under this section may not exceed the sum of 36 months of a standard service retirement annuity computed without regard to this section.

(c) The service retirement annuity selected by the member shall be actuarially reduced to reflect the lump-sum option selected by the member and shall be actuarially equivalent to a standard or optional service retirement annuity, as applicable, without the partial lump-sum distribution. The annuity and lump sum shall be computed to result in no actuarial loss to the retirement system.

(d) Unless otherwise specified in rules adopted by the board of trustees, the lump-sum distribution will be made as a single payment payable at the time that the first monthly annuity payment is paid to the retiree.

(e) The amount of the lump-sum distribution will be deducted from any amount otherwise payable under Section 814.505.

(f) The partial lump-sum option under this section may be elected only once by a member and may not be elected by a retiree. A member retiring under the proportionate retirement program under Chapter 803 is not eligible for the partial lump-sum option.

(g) Before a retiring member selects a partial lump-sum distribution under this section, the retirement system shall provide a written notice to the member of the amount by which the member's annuity will be reduced because of the selection. The member shall be asked to sign a copy of or a receipt for the notice, and the retirement system shall maintain the signed copy or receipt.

(h) The board of trustees may adopt rules for the implementation of this section and may authorize the option to be used for a death benefit annuity. This section does not apply to a disability retirement annuity.

SECTION 18. Section 814.202, Government Code, is amended by adding Subsection (d) to read as follows:

(d) For the sole purpose of determining eligibility to receive a disability retirement annuity under Subsection (a)(3), the retirement system shall consider service performed as a participant in the optional retirement program under Chapter 830 as if it were service for which credit is established in the retirement system.

SECTION 19. Subsection (b), Section 814.302, Government Code, is amended to read as follows:

(b) If a person dies who, at the time of death, was a contributing member of a retirement program administered by the board of trustees and was eligible, having met the requirements of service credit and attained age, for a service retirement annuity based on service in one or more board-administered programs or was a contributing member of the employee class, had at least three years of service credit in that class, and would have been eligible to retire under the proportionate retirement program under Chapter 803, but was not eligible to select a death benefit plan, the person's surviving spouse may select a plan in the same manner that the decedent could have made the selection if the decedent had retired on the last day of the month in which the person died. If there is no surviving spouse, the guardian of the decedent's surviving minor children may select a plan. If the decedent is not survived by a spouse or minor children, an annuity may not be paid under this subsection.

SECTION 20. Section 815.103, Government Code, is amended by adding Subsection (d) to read as follows:

(d) The board of trustees may accept on behalf of the retirement system gifts of money or other property from any public or private source.

SECTION 21. Subsection (e), Section 815.110, Government Code, is amended to read as follows:

(e) The board of trustees [annually ] shall select an independent auditor to perform an annual [a ] financial audit of the retirement system. The selection shall be in accordance with the requirements of Chapter 2254 for obtaining the services of a certified public accountant [made under a competitive bidding process in which the state auditor is eligible to bid ].

SECTION 22. Subsection (f), Section 815.202, Government Code, is amended to read as follows:

(f) The board of trustees may specifically delegate any right, power, or duty imposed or conferred on the executive director by law to another employee of the retirement system. If not so specifically delegated, the executive director may delegate to another employee of the retirement system any right, power, or duty assigned to the executive director.

SECTION 23. Section 815.208, Government Code, is amended by adding Subsections (d) and (e) to read as follows:

(d) The board of trustees may compensate employees of the retirement system, whether subject to or exempt from the overtime provisions of the Fair Labor Standards Act of 1938 (29 U.S.C. Section 201 et seq.), at the rate equal to the employees' regular rate of pay for work performed on a legal holiday or for other compensatory time accrued, when taking compensatory time off would be disruptive to the system's normal business functions.

(e) The retirement system is exempt from Subchapter K, Chapter 659, and Chapter 660, to the extent the board of trustees determines an exemption is necessary for the performance of fiduciary duties.

SECTION 24. Section 815.301, Government Code, is amended by adding Subsection (f) to read as follows:

(f) For purposes of the investment authority of the board of trustees under Section 67, Article XVI, Texas Constitution, "securities" means any investment instrument within the meaning of the term as defined by Section 4, The Securities Act (Article 581-4, Vernon's Texas Civil Statutes), 15 U.S.C. Section 77b(a)(1), or 15 U.S.C. Section 78c(a)(10).

SECTION 25. Section 815.322, Government Code, is amended to read as follows:

Sec. 815.322. TRANSFER OF ASSETS TO ADJUST AMOUNT IN RETIREMENT ANNUITY RESERVE ACCOUNT. After making the transfers required by Section 815.318, the executive director [board of trustees ] shall make a transfer to make the amount in the retirement annuity reserve account equal, as of the last day of each fiscal year, to the actuarial present value of the annuities for which a transfer of assets has been made as required by Section 815.319. The transfer shall be:

(1) a transfer from the retirement annuity reserve account to the state accumulation account of the amount by which the amount in the retirement annuity reserve account exceeds the actuarial present value of the annuities; or

(2) a transfer from the state accumulation account to the retirement annuity reserve account of the amount by which the actuarial present value of the annuities exceeds the amount in the retirement annuity reserve account.

SECTION 26. Subsection (a), Section 815.502, Government Code, is amended to read as follows:

(a) If a valid application for payment based on money or credit in a member's individual account in the employees saving account is not filed with the retirement system before the expiration of five years after the last day of the most recent month of service for which the member has credit in the retirement system, the retirement system may [shall ] mail a notice to the member at the member's most recent address as shown on system records. If no address is available or if the notice is returned unclaimed, the retirement system shall cause a notice to be published in a newspaper of general circulation in the state.

SECTION 27. Section 815.503, Government Code, is amended to read as follows:

Sec. 815.503. [MEMBERS' ] RECORDS. (a) Records of members and annuitants [beneficiaries ] under retirement plans administered by the retirement system that are in the custody of the system or of an administrator, carrier, or other governmental agency acting in cooperation with or on behalf of the retirement system are [considered to be personnel records and are required to be treated as ] confidential and not subject to public disclosure and are exempt from the public access provisions of Chapter 552, except as otherwise provided by this section [information under Section 552.101 ].

(b) Records may be released to a member or annuitant or to an authorized attorney, family member, or representative acting on behalf of the member or annuitant. The retirement system may release the records to an administrator, carrier, or agent or attorney acting on behalf of the retirement system, to another governmental entity having a legitimate need for the information to perform the purposes of the retirement system, or to a party in response to a subpoena issued under applicable law.

(c) The records of a member or annuitant remain confidential after release to a person as authorized by this section. The records of a member or annuitant may

become part of the public record of an administrative or judicial proceeding related to a contested case under Subtitle D or E or this subtitle, unless the records are closed to public access by a protective order issued under applicable law.

SECTION 28. Section 815.505, Government Code, is amended to read as follows:

Sec. 815.505. CERTIFICATION OF NAMES OF LAW ENFORCEMENT AND CUSTODIAL OFFICERS. Not later than the 12th day of the month following the month in which a person begins or ceases employment as a law enforcement officer or custodial officer, the Public Safety Commission, the Texas Alcoholic Beverage Commission, the Parks and Wildlife Commission, the State Board of Pharmacy, the Board of Pardons and Paroles, or the Texas Board of Criminal Justice, as applicable, shall certify to the retirement system, in the manner prescribed by the system, the name of the employee and such other information as the system determines is necessary for the crediting of service and financing of benefits under this subtitle.

SECTION 29. Section 815.511, Government Code, is amended to read as follows:

Sec. 815.511. [APPEAL OF ] ADMINISTRATIVE DECISION; APPEAL AND NEGOTIATION. (a) The board of trustees may modify or delete a proposed finding of fact or conclusion of law contained in a proposal for decision submitted by an administrative law judge or other hearing examiner, or make alternative findings of fact and conclusions of law, in a proceeding considered to be a contested case under Chapter 2001. The board of trustees shall state in writing the specific reason for its determination and may adopt rules for the implementation of this subsection.

(b) A person aggrieved by a decision of any retirement system administered by the board of trustees denying or limiting membership, service credit, or eligibility for or the amount of benefits payable by a system may appeal the decision to the board. The appeal is considered to be an appeal of a contested case under the administrative procedure law, Chapter 2001. On judicial appeal the standard of review is by substantial evidence.

(c) Notwithstanding Subsection (b), the retirement system and a person aggrieved by a decision of the system may at any time informally negotiate an award of benefits. Negotiated benefits may not exceed the maximum benefits otherwise available or required by law.

(d) On behalf of the retirement system, the executive director may refer an appeal made under Subsection (b) to the State Office of Administrative Hearings for a hearing or, notwithstanding Section 2003.021 or other law, employ or contract for the services of an administrative law judge or hearing examiner not affiliated with the State Office of Administrative Hearings to conduct the hearing.

SECTION 30. Section 840.102, Government Code, is amended by amending Subsection (a) and adding Subsection (g) to read as follows:

(a) Except as provided by Subsection (g), each [Each ] payroll period, a judicial officer who is a member of the retirement system is required to contribute six percent of the officer's state compensation for the period to the retirement system.

(g) A member who accrues 20 years of service credit in the retirement system ceases making contributions under this section but is considered a contributing member for all other purposes under this subtitle.

SECTION 31. Subsection (b), Section 840.103, Government Code, is amended to read as follows:

(b) Not later than December 31 [Before November 2 ] of each even-numbered year, the retirement system shall certify to the Legislative Budget Board and to the budget division of the governor's office for review:

(1) an actuarial valuation of the retirement system to determine the percentage of annual payroll required from the state to finance fully the retirement system as provided by Section 840.106;

(2) an estimate of the amount necessary to pay the state's contribution under Subdivision (1) for the following biennium; and

(3) as a separate item, an estimate of the amount, in addition to anticipated receipts from membership fees, required to administer the retirement system for the following biennium.

SECTION 32. Section 840.301, Government Code, is amended by adding Subsection (c) to read as follows:

(c) For purposes of the investment authority of the board of trustees under Section 67, Article XVI, Texas Constitution, "securities" means any investment instrument within the meaning of the term as defined by Section 4, The Securities Act (Article 581-4, Vernon's Texas Civil Statutes), 15 U.S.C. Section 77b(a)(1), or 15 U.S.C. Section 78c(a)(10).

SECTION 33. Section 840.402, Government Code, is amended to read as follows:

Sec. 840.402. RETIREMENT SYSTEM RECORDS. Records of members and annuitants [beneficiaries ] of the retirement system [that are in the custody of the system ] are [considered to be personnel records and are required to be treated as ] confidential within the terms of Section 815.503 [information under Section 552.101 ].

SECTION 34. Subdivision (18), Subsection (a), Section 3, Texas Employees Uniform Group Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance Code), is amended to read as follows:

(18) "Institution of higher education" means any public community/junior college or senior college or university, or any other agency of higher education within the meaning and jurisdiction of Chapter 61, Education Code, except The University of Texas System and The Texas A&M University System. [The term does not include Texas Tech University and the University of Houston System unless either of these entities elects to participate in accordance with Section 3A of this Act. ]

SECTION 35. Section 3A, Texas Employees Uniform Group Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance Code), is amended to read as follows:

Sec. 3A. PARTICIPATION BY CERTAIN ENTITIES [CERTAIN INSTITUTIONS MAY ELECT TO PARTICIPATE ]. (a) The Texas Municipal Retirement System and the Texas County and District Retirement System shall [Texas Tech University, the University of Houston System, or both may ] participate in the Texas Employees Uniform Group Insurance [Benefits ] Program administered by the Employees Retirement System of Texas under this Act. Participation is limited to the officers and employees of the systems; eligible dependents of the officers and employees; persons who have retired from either system, who receive or are eligible to receive an annuity from either system or under Chapter 803, Government Code, based on at least 10 years of service credit, who have at least three years of service with a department, including either system, whose employees are authorized to participate in the program provided by this Act, and who were officers or employees of either system; and eligible dependents of the retired officers and employees. An officer or employee of either system is an employee for purposes of this Act, and a retired officer

or employee of either system is an annuitant for purposes of this Act. Participation under this subsection does not include the governing bodies of either system, the municipalities or subdivisions participating in either system, or the trustees, officers, or employees, or their dependents, of the participating municipalities or subdivisions. A participant described by this subsection may not receive a state contribution for premiums [The university or system must notify the trustee of its election to participate not later than April 1, 1992 ].

(b) A person who began employment with, or became an officer of, the Texas Turnpike Authority within the three-year period preceding August 31, 1997, who was an officer or employee of the Texas Turnpike Authority on that date, who became an officer or employee of the North Texas Tollway Authority on September 1, 1997, and who retires or is eligible to retire with at least 10 years of service credit under the proportionate retirement program established by Chapter 803, Government Code, or under one of the public retirement systems to which Chapter 803 applies may participate in the programs and coverages provided by this Act as an annuitant and may obtain coverage for the person's dependents as any other participating annuitant. The North Texas Tollway Authority is responsible for payment of the contributions the state would make if the annuitants were state employees.

SECTION 36. Section 4B, Texas Employees Uniform Group Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance Code), is amended by adding Subsections (c-1), (c-2), and (c-3) to read as follows:

(c-1) The board of trustees may modify or delete a proposed finding of fact or conclusion of law contained in a proposal for decision submitted by an administrative law judge or other hearing examiner, or make alternative findings of fact and conclusions of law, in a proceeding considered to be a contested case under Chapter 2001, Government Code. The board of trustees shall state in writing the specific reason for the determination and may adopt rules for the implementation of this subsection.

(c-2) Notwithstanding Subsections (c) and (d) of this section, the trustee and a person who has standing to pursue an administrative appeal may at any time informally negotiate an award of benefits. Negotiated benefits may not exceed the maximum benefits otherwise available or required by law.

(c-3) On behalf of the trustee, the executive director may refer an appeal made under Subsection (c) of this section to the State Office of Administrative Hearings for a hearing or, notwithstanding Section 2003.021, Government Code, or other law, employ or contract for the services of an administrative law judge or hearing examiner not affiliated with the State Office of Administrative Hearings to conduct the hearing.

SECTION 37. Section 5, Texas Employees Uniform Group Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance Code), is amended by amending Subsections (a), (d), and (f) and adding Subsection (e) to read as follows:

(a) The trustee is authorized, empowered, and directed to establish plans of group coverages for active employees and retired employees which in the trustee's discretion may include but are not necessarily limited to the following: group life coverages, accidental death and dismemberment, health benefits plans, including but not limited to hospital care and benefits, surgical care and treatment, medical care and treatment, dental care, obstetrical benefits, prescribed drugs, medicines, and prosthetic devices and supplemental benefits, supplies, and services in conformity with the provisions of this Act, protection against either long or short term loss of salary and any other group coverages which in the discretion of the trustee with consultation from the advisory

committee shall be deemed advisable. All rules and regulations shall be promulgated pursuant thereto. The trustee shall determine the coverages desired for state employees and other eligible participants [will submit this information to the State Board of Insurance for any recommendations as to the types and sufficiency of such coverages. The State Board of Insurance will notify the board of trustees within 30 days as to any such recommendations and will furnish the board of trustees with a list of all carriers authorized to do business in the State of Texas who would be eligible to bid on the coverages that are to be insured by a carrier ]. The trustee will notify eligible [those ] carriers that competitive bidding will be conducted and that they are to submit their bids to the trustee [State Board of Insurance ] by a specified date if they wish to bid on the contract. An actuary selected by the trustee shall advise the trustee as to the actuarial soundness of the bids received. [The State Board of Insurance will, after the designated closing date of receiving bids, examine and evaluate the bidding contracts and certify their actuarial soundness to the trustee within 15 days from the closing date. ] The trustee shall select the desired carrier or carriers and will notify the bidding eligible carriers as to the results of the bidding. The trustee shall select the desired carrier or carriers to provide services that will [which shall ] be in the best interest of the employees covered by this Act. The trustee is not required to select the lowest bid but shall take into consideration other factors such as ability to service contracts, past experience, financial ability, and other relevant criteria. Should the trustee select a carrier whose bid differs from that advertised, such deviation shall be recorded and the reasons for such deviation shall be fully justified and explained in the minutes of the next meeting of the trustee. The trustee shall submit the coverages provided by the group plan for competitive bidding at least every six years.

(d) No department shall establish, continue, or authorize payroll deductions or reductions for any benefits or coverage as provided in this Act without the express approval of the trustee[, except for benefits from the deferred compensation program established pursuant to Chapter 197, Acts of the 63rd Legislature, Regular Session, 1973 (Article 6252-3b, Vernon's Texas Civil Statutes) ].

(e) Before the first day of each state fiscal biennium, the trustee shall estimate for an average 60-day period during the biennium the expenditures from the fund anticipated for self-funded plans, considering claims and administrative expenses for those plans that are projected to be incurred. The trustee shall place the estimated amount in a contingency reserve fund to provide for adverse fluctuations in claims or administrative expenses. The trustee shall include in each request for legislative appropriations to the program the amount the trustee determines to be necessary to maintain the contingency reserve fund at the level required by this subsection. The trustee may invest and reinvest any portion of the contingency reserve fund under the standard of care provided by Section 815.307, Government Code, considering the functional need to provide for adverse fluctuations in claims or administrative expenses. The interest on, earnings of, and proceeds from the sale of investments of assets in the contingency reserve fund shall be credited to the fund.

(f) The trustee, in its sole discretion and in accordance with the requirements of this section, shall determine those plans of coverages for which the trustee does not intend to purchase insurance and which it intends to provide directly from the Employees Life, Accident, and Health Insurance and Benefits Fund. Any plan of coverages for which the trustee does not purchase insurance but provides under this Act on a self-funded basis is exempt from any other insurance law unless the law expressly applies to this plan or this Act. A qualified actuary selected by the trustee

shall advise the trustee as to an actuarially sound level of contributions required to provide coverages directly from the fund. [The trustee shall make an estimate of the unrestricted balance of the fund. Unless such estimated unrestricted balance is equal to at least 10 percent of the total benefits expected to be provided directly from the fund as a result of claims incurred during the fiscal year, the trustee shall include in the contributions required the amount necessary to establish an unrestricted balance in the fund of not less than 10 percent. The unrestricted balance shall be placed in a contingency reserve fund to provide for adverse fluctuations in future charges, claims, costs, or expenses of the program. ]

SECTION 38. Section 6, Texas Employees Uniform Group Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance Code), is amended to read as follows:

Sec. 6. BENEFIT CERTIFICATES; IDENTIFICATION CARDS. (a) The trustees shall provide for the issuance to each employee insured under this Act a certificate of insurance setting forth the benefits to which the employee is entitled, to whom the benefits are payable, to whom the claims shall be submitted, and summarizing the provisions of the policy principally affecting the employee.

(b) The trustee may issue a single identification card to participants in a health benefits plan and separately administered coverage under this Act that offers pharmacy benefits. The card may contain information regarding both health and pharmacy benefits.

SECTION 39. Section 7, Texas Employees Uniform Group Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance Code), is amended to read as follows:

Sec. 7. ANNUAL REPORT. The [As soon as practicable after the end of each calendar year but not later than 90 days thereafter, the ] trustee shall make a written report not later than January 1 of each year to the governor, lieutenant governor, speaker of the house of representatives, and Legislative Budget Board [State Board of Insurance ] concerning the coverages provided and the benefits and services being received by all employees insured under the provisions of this Act and including information about the effectiveness and efficiency of managed care cost containment practices and fraud detection and prevention procedures. [It shall be the duty of the State Board of Insurance to review such report and advise the trustee in regard to the features of the coverages provided for employees and cooperate fully with the trustee in carrying out the purposes of the Act. ]

SECTION 40. Section 8, Texas Employees Uniform Group Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance Code), is amended to read as follows:

Sec. 8. REINSURANCE. The trustee, in its sole discretion and under conditions it approves, may reinsure any coverage that it has determined will be provided directly from the fund in accordance with Section 5(f) of this Act. [(a) The trustee shall arrange with any carrier or carriers issuing any policy or policies under this Act for the reinsurance, under conditions approved by the trustee, of portions of the total amount of insurance under such policy or policies, with other qualified carriers which elect to participate in the reinsurance.

[(b) The trustee shall determine for and in advance of a policy year which qualified carriers are eligible to participate as reinsurers and the amount of insurance under a policy or policies which is to be allocated to the issuing company and reinsurers. The trustee shall make this determination when a participating company withdraws. ]

SECTION 41. Section 10, Texas Employees Uniform Group Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance Code), is amended by adding Subsection (c) to read as follows:

(c) The records of a participant in the Texas Employees Uniform Group Insurance Program in the custody of the trustee, or of an administrator or carrier acting on behalf of the trustee, are confidential and not subject to disclosure and are exempt from the public access provisions of Chapter 552, Government Code, except as provided by this subsection. Records may be released to a participant or to an authorized attorney, family member, or representative acting on behalf of the participant. The trustee may release the records to an administrator, carrier, or agent or attorney acting on behalf of the trustee, to another governmental entity, to a medical provider of the participant for the purpose of carrying out the purposes of this Act, or to a party in response to a subpoena issued under applicable law. The records of a participant remain confidential after release to a person as authorized by this subsection. The records of a participant may become part of the public record of an administrative or judicial proceeding related to a contested case under this Act, unless the records are closed to public access by a protective order issued under applicable law.

SECTION 42. Subdivision (3), Subsection (e), Section 11, Texas Employees Uniform Group Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance Code), is amended to read as follows:

(3) An annuitant [A retiree ] participating in optional term life insurance coverage is not eligible for premium-waived extended insurance benefits [or accelerated life insurance benefits ] if the total disability [or terminal condition, respectively, ] begins after the date of retirement. Accidental death and dismemberment insurance coverage ceases on the date of retirement, regardless of age. An annuitant participating in optional term life insurance coverage is eligible for accelerated life insurance benefits as provided by rules adopted under the authority of Subsection (d) of this section, as added by Chapter 1048, Acts of the 75th Legislature, Regular Session, 1997.

SECTION 43. Section 11A, Texas Employees Uniform Group Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance Code), is amended to read as follows:

Sec. 11A. PAYMENT OF ACCELERATED BENEFITS; IRREVOCABLE DESIGNATION OF BENEFICIARY. [(a) ] The trustee shall adopt rules requiring a group life insurance program provided to employees, including annuitants or dependents, to include a provision allowing the employee, annuitant, or dependent to make, in conjunction with receipt of a viatical settlement, an irrevocable designation of beneficiary for part or all of the group life coverage benefits. A viatical settlement is not valid for any coverage under the Texas Employees Uniform Group Insurance Program unless the employee, annuitant, or dependent has a terminal illness or terminal injury, as defined by rules adopted by the trustee, at the time application for benefits is made.[:

[(1) elect to receive an accelerated benefit under Article 3.50-6, Insurance Code, subject to the provisions of that article; or

[(2) make, in conjunction with receipt of a viatical settlement, an irrevocable designation of a beneficiary for all or a part of the group life coverage benefits.

[(b) ] In this section, "viatical settlement" has the meaning assigned by Article 3.50-6A, Insurance Code.

SECTION 44. Section 13, Texas Employees Uniform Group Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance Code), is amended by adding Subsection (e) to read as follows:

(e) Except as provided by Section 13A of this Act, on application to the trustee and arrangement for payment of contributions, a former member of a board or commission described by Section 3(a)(5)(A)(vi) of this Act or a former member of the governing body of an institution of higher education remains eligible for participation in a group health coverage plan offered under this Act as long as no lapse in coverage occurs after the end of the former member's term. A participant described by this subsection may not receive a state contribution for premiums, but the governing body of an institution of higher education may elect to pay from local funds part or all of the contributions the state would pay for similar coverage of other participants in the program. The participant's contribution for coverage under a group health coverage plan may not be greater than the contribution for continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (Pub. L. No. 99-272).

SECTION 45. Subsection (d), Section 13B, Texas Employees Uniform Group Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance Code), is amended to read as follows:

(d) Each employee shall be enrolled in the premium conversion benefit portion of the cafeteria plan [unless the employee notifies the trustee in writing that the employee elects not to be enrolled ]. Notwithstanding any provision of Section 16B of this Act to the contrary, the trustee may not establish a fee or charge for administering the premium conversion benefit portion of the cafeteria plan.

SECTION 46. The Texas Employees Uniform Group Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance Code) is amended by adding Section 16A to read as follows:

Sec. 16A. MANAGEMENT OF ASSETS. The trustee may commingle for investment purposes the assets of any fund created under this Act with any other fund created under this Act or any other trust fund administered by the trustee, as long as proportionate ownership records are maintained and credited.

SECTION 47. The Texas Employees Uniform Group Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance Code) is amended by adding Section 16C to read as follows:

Sec. 16C. EMPLOYEES' HEALTH CARE STABILIZATION TRUST FUND. (a) The employees' health care stabilization trust fund is a special fund in the treasury outside the general revenue fund.

(b) The fund is composed of:

(1) money transferred to the fund at the direction of the legislature;

(2) gifts and grants contributed to the fund; and

(3) the returns received as interest on, and from investment of, money in the fund.

(c) The trustee shall administer the fund. The trustee may manage and invest the money in the fund under the standard of care provided by Section 815.307, Government Code. In administering the fund, the trustee shall make investments in a manner that preserves the purchasing power of the fund's assets.

(d) Money in the fund may not be spent for any purpose, except that the interest and investment returns of the fund may be appropriated only for the purpose of stabilizing the cost of state and participant contributions for health care coverage under this Act by minimizing to the greatest extent possible increases in those contributions.

(e) The fund is exempt from the application of Section 403.095, Government Code.

SECTION 48. Subsection (a), Section 18, Texas Employees Uniform Group Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance Code), is amended to read as follows:

(a) The group benefits advisory committee is composed of 26 voting members as provided by this section. The office of the attorney general, the office of the comptroller, the Railroad Commission of Texas, the General Land Office, and the Department of Agriculture are entitled to be represented by one member each on the committee, who may be appointed by the governing body of the state agency or elected by and from the employees of the agency, as determined by rule by the governing body of the agency. One employee shall be elected from each of the remaining eight largest state agencies that are governed by appointed officers by and from the employees of those agencies. One nonvoting member shall be the executive director of the Employees Retirement System of Texas. One member shall be an expert in employee benefit issues from the private sector, appointed by the governor. One member shall be an expert in employee benefits issues from the private sector, appointed by the lieutenant governor. One member shall be a retired state employee appointed by the trustee. One member shall be a state employee of a state agency eligible for membership in the Texas Small State Agency Task Force [other than one of the eight largest state agencies ], appointed by the trustee. Not more than one employee from a particular state agency may serve on the committee. Each of the seven largest institutions of higher education, as determined by the number of employees on the payroll of an institution, shall elect one member of the committee from among persons who have each been nominated by a petition signed by at least 300 employees. Two members shall be employees of institutions of higher education, other than the seven largest institutions of higher education, who are appointed by the Texas Higher Education Coordinating Board, but not more than one employee shall be from any one institution. The members shall elect a presiding officer from their membership to serve a one-year term.

SECTION 49. Subsection (b), Section 19, Texas Employees Uniform Group Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance Code), is amended to read as follows:

(b) A surviving spouse of an employee or a retiree who is entitled to monthly benefits paid by a retirement system named in this Act may, following the death of the employee or retiree, elect to retain the spouse's authorized coverages and also retain authorized coverages for any dependent of the spouse, at the group rate for employees, provided such coverage was previously secured by the employee or retiree for the spouse or dependent, and the spouse directs the applicable retirement system to deduct required contributions from the monthly benefits paid the surviving spouse by the retirement system. A surviving dependent of a retiree who was receiving monthly benefits paid by a retirement system named in this Act may, after the death of the retiree and if the retiree leaves no surviving spouse, elect to retain any coverage previously secured by the retiree, at the group rate for employees, until the dependent becomes ineligible for coverage for a reason other than the death of the member of the group. A dependent who makes an election under this subsection and who is entitled to monthly benefits from a retirement system named in this Act based on the service of the deceased retiree must direct the applicable retirement system to deduct required contributions for the coverage from the monthly benefits paid the surviving dependent

by the retirement system. If funds are specifically appropriated for the purpose, the state shall pay the same portion of the cost of the required contributions for a deceased retiree's surviving spouse or other surviving dependent who elects to retain coverage under this subsection as it pays for similar dependent coverage for an employee or retiree participating in the program.

SECTION 50. Subsection (a), Section 403.026, Government Code, as added by Chapter 1153, Acts of the 75th Legislature, Regular Session, 1997, is amended to read as follows:

(a) The comptroller shall conduct a study each biennium to determine the number and type of fraudulent claims for medical or health care benefits submitted:

(1) under the state Medicaid program; or

(2) [under group health insurance programs administered through the Employees Retirement System of Texas for active and retired state employees; or

[(3) ] by or on behalf of a state employee and administered by the attorney general under Chapter 501, Labor Code.

SECTION 51. Section 609.007, Government Code, is amended by adding Subsection (d) to read as follows:

(d) A contract created under this section need not be in writing and may be communicated to the plan administrator electronically or by any other means approved by the plan's trustees.

SECTION 52. Section 609.505, Government Code, is amended by amending Subsection (a) and adding Subsections (c) and (d) to read as follows:

(a) The board of trustees, in accordance with rules adopted under this subchapter, may contract with a [qualified ] vendor qualified to participate in a deferred compensation plan.

(c) A vendor or investment product having an ownership or other financial interest in the contractor selected by the board of trustees to administer a deferred compensation plan is not qualified to participate in that plan.

(d) The board of trustees shall select vendors or investment products based on the quality of investment performance, proven ability to manage institutional assets, minimum net worth requirements, fee structure, compliance with applicable federal and state laws, and other criteria established by the board. The board of trustees shall determine the minimum and maximum number of vendors and investment products that may be offered by a plan at any particular time.

SECTION 53. Section 609.510, Government Code, is amended to read as follows:

Sec. 609.510. EXEMPTION FOR CERTAIN CONTRACTS. A contract authorized by Section 609.505 [for TexaSaver ] or by Section 609.509 for either deferred compensation plan is exempt from:

(1) Subtitle D, Title 10;

(2) Chapter 463; and

(3) Chapter 2254.

SECTION 54. Section 615.001, Government Code, is amended to read as follows:

Sec. 615.001. DEFINITION. In this chapter, "minor child" means a child who, on the date of the death of an individual listed under Section 615.003, is younger than 18 [21 ] years of age.

SECTION 55. Subchapter C, Chapter 2155, Government Code, is amended by adding Section 2155.146 to read as follows:

Sec. 2155.146. CERTAIN PURCHASES BY EMPLOYEES RETIREMENT SYSTEM OF TEXAS. (a) The Employees Retirement System of Texas is delegated all purchasing functions relating to the purchase of goods or services from funds other than general revenue funds for a purpose the retirement system determines relates to the fiduciary duties of the retirement system.

(b) The Employees Retirement System of Texas shall acquire goods or services by any procurement method approved by the board of trustees of the retirement system that provides the best value to the retirement system. The retirement system shall consider the best value standards enumerated in Section 2155.074, as added by Chapter 1206, Acts of the 75th Legislature, Regular Session, 1997.

(c) The commission shall procure goods or services for the Employees Retirement System of Texas at the request of the retirement system, and the retirement system may use the services of the commission in procuring goods or services.

SECTION 56. Subsection (b), Section 2171.055, Government Code, is amended to read as follows:

(b) An institution of higher education as defined by Section 61.003, Education Code, is not required to participate in the commission's contracts for travel agency services or other travel services purchased from funds other than general revenue funds or educational and general funds as defined by Section 51.009, Education Code. The Employees Retirement System of Texas is not required to participate in the commission's contracts for travel agency services or other travel services purchased from funds other than general revenue funds.

SECTION 57. (a) Monthly payments of a retirement or death benefit annuity by the Employees Retirement System of Texas under Subtitle B, Title 8, Government Code, are increased beginning with the first payment of the annuities that becomes due on or after the effective date of this section.

(b) The increase does not apply to annuities payable under Section 814.103, Government Code.

(c) The amount of the monthly increase is computed by multiplying the previous monthly benefit by a percentage determined in accordance with the following table:

LATEST RETIREMENT DATE OR,

IF APPLICABLE, DATE OF DEATH INCREASE

Before September 1, 1953 49%

On or after September 1, 1953, but before September 1, 1954 47%

On or after September 1, 1954, but before September 1, 1955 52%

On or after September 1, 1955, but before September 1, 1956 45%

On or after September 1, 1956, but before September 1, 1958 49%

On or after September 1, 1958, but before September 1, 1959 52%

On or after September 1, 1959, but before September 1, 1960 47%

On or after September 1, 1960, but before September 1, 1961 49%

On or after September 1, 1961, but before September 1, 1962 47%

On or after September 1, 1962, but before September 1, 1963 45%

On or after September 1, 1963, but before September 1, 1964 47%

On or after September 1, 1964, but before September 1, 1965 49%

On or after September 1, 1965, but before September 1, 1967 52%

On or after September 1, 1967, but before September 1, 1968 54%

On or after September 1, 1968, but before September 1, 1970 49%

On or after September 1, 1970, but before September 1, 1972 54%

On or after September 1, 1972, but before September 1, 1973 47%

On or after September 1, 1973, but before September 1, 1974 37%

On or after September 1, 1974, but before September 1, 1975 35%

On or after September 1, 1975, but before September 1, 1976 45%

On or after September 1, 1976, but before September 1, 1977 41%

On or after September 1, 1977, but before September 1, 1978 49%

On or after September 1, 1978, but before September 1, 1979 37%

On or after September 1, 1979, but before September 1, 1981 23%

On or after September 1, 1981, but before September 1, 1982 20%

On or after September 1, 1982, but before September 1, 1983 22%

On or after September 1, 1983, but before September 1, 1984 23%

On or after September 1, 1984, but before September 1, 1985 20%

On or after September 1, 1985, but before September 1, 1986 23%

On or after September 1, 1986, but before September 1, 1987 19%

On or after September 1, 1987, but before September 1, 1988 20%

On or after September 1, 1988, but before September 1, 1989 15%

On or after September 1, 1989, but before September 1, 1990 12%

On or after September 1, 1990, but before September 1, 1991 9%

On or after September 1, 1991, but before September 1, 1992 7%

On or after September 1, 1992, but before September 1, 1993 6%

On or after September 1, 1993, but before September 1, 1994 12%

On or after September 1, 1994, but before September 1, 1995 9%

On or after September 1, 1995, but before September 1, 1996 6%

On or after September 1, 1996, but before September 1, 1997 3%

On or after September 1, 1997, but before September 1, 1998 2%

On or after September 1, 1998, but before September 1, 1999 1%

SECTION 58. The Employees Retirement System of Texas shall make a supplemental payment under Section 814.603(d), Government Code, in the fiscal year beginning September 1, 2000, if the payment is in compliance with Section 811.006, Government Code.

SECTION 59. The Employees Retirement System of Texas shall recompute each annuity being paid under Subtitle E, Title 8, Government Code, on December 31, 1999, as if the retirement or death on which the annuity is based occurs on that date. Payments of an annuity recomputed under this section begin with the first payments that become due after December 31, 1999.

SECTION 60. The change in law made by this Act to Section 814.1041, Government Code, prevails over any other Act of the 76th Legislature, Regular Session, 1999, regardless of the relative dates of enactment, that purports to amend Section 814.1041 or create a similar provision to allow a temporary retirement option for members of the Employees Retirement System of Texas whose positions are subject to privatization or a reduction in workforce or who are transferred between state agencies, and any amendment to Section 814.1041, Government Code, or similar provision in another Act of the 76th Legislature, Regular Session, 1999, has no effect.

SECTION 61. Before October 1, 1999, the Board of Pardons and Paroles and the Texas Department of Criminal Justice shall certify to the Employees Retirement System of Texas, in the manner prescribed by the retirement system, the name of each person employed by the board on September 1, 1999, as a custodial officer as defined by Section 811.001, Government Code, as amended by this Act, and such other information as the system determines is necessary for the crediting of service and financing of benefits under Subtitle B, Title 8, Government Code.

SECTION 62. Section 813.405, Government Code, and Subsections (b), (c), and (g), Section 5, Texas Employees Uniform Group Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance Code), are repealed.

SECTION 63. (a) Except as provided by Subsection (b) of this section, Subsection (b), Section 814.302, Government Code, as amended by this Act, applies only to deaths of contributing members of the Employees Retirement System of Texas that occur on or after the effective date of this Act.

(b) The surviving spouse of a contributing member of the Employees Retirement System of Texas who died before the effective date of this Act and whose account has not been refunded may apply for and receive a death benefit annuity under Subsection (b), Section 814.302, Government Code, as amended by this Act. The effective date of an annuity under this subsection is the last day of the month in which the member died. The amount of an annuity payable under this subsection will be determined under the plan terms in effect in the month in which the member died. The retirement system shall make a lump-sum payment of all unpaid annuity payments under this subsection at the time the first payment of the annuity becomes due on or after the effective date of this Act. This subsection expires December 31, 1999.

SECTION 64. Notwithstanding Section 3A, Texas Employees Uniform Group Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance Code), as amended by this Act, a person who retires from the Texas County and District Retirement System or the Texas Municipal Retirement System on or after the effective date of this Act but before September 1, 2002, is not required to meet the requirement of three years of service for a department whose employees are authorized to participate in the program provided by that Act to continue participation authorized by that section.

SECTION 65. Section 814.1082, Government Code, as added by this Act, applies only to retirements that occur on or after January 1, 2000.

SECTION 66. This Act takes effect September 1, 1999, except Sections 42, 43, and 57, which take effect January 1, 2000.

SECTION 67. The importance of this legislation and the crowded condition of the calendars in both houses create an emergency and an imperative public necessity that the constitutional rule requiring bills to be read on three several days in each house be suspended, and this rule is hereby suspended.

The amendment was read.

On motion of Senator Armbrister, the Senate concurred in the House amendment to SB 1130 by a viva voce vote.

STATEMENT OF LEGISLATIVE INTENT

Senator Armbrister submitted the following statement of legislative intent for SB 1130:

During discussion of SB 1130 in the Texas House of Representatives on May 25, a question was raised regarding the contingency reserve fund and whether Section 37 of the bill bound future legislatures to fund it. As a result of that discussion, I wish to enter into the Senate Journal my legislative intent in regard to this matter.

Section 37 was drafted to clarify the amount and method of calculating the reserve. The need for clarification of the existing statute was suggested by the State Auditor's Office in a report made during the interim. Section 37 was not drafted to mandate an appropriation to fund it. As stated in a letter from the Legislative Council, the Employees Retirement System of Texas is instructed to

request appropriations for any amounts needed to maintain the contingency reserve fund at the defined level. It does not, however, bind any future legislatures to fund it. Appropriated funds may be used for this purpose as they have been in the past or the Employees Retirmement System of Texas can maintain the reserve fund by using other funds available for the insurance program, e.g., earnings from the insurance investment fund, reduced benefits and increased co-pays.

ARMBRISTER

CONFERENCE COMMITTEE REPORT ON

HOUSE BILL 2145 ADOPTED

Senator Whitmire called from the President's table the Conference Committee Report on HB 2145. The Conference Committee Report was filed with the Senate on Thursday, May 27, 1999.

On motion of Senator Whitmire, the Conference Committee Report was adopted by a viva voce vote.

CONFERENCE COMMITTEE REPORT ON

SENATE BILL 46 ADOPTED

Senator Carona called from the President's table the Conference Committee Report on SB 46. The Conference Committee Report was filed with the Senate on Thursday, May 27, 1999.

On motion of Senator Carona, the Conference Committee Report was adopted by a viva voce vote.

CONFERENCE COMMITTEE REPORT ON

HOUSE BILL 610 ADOPTED

Senator Carona called from the President's table the Conference Committee Report on HB 610. The Conference Committee Report and was filed with the Senate on Thursday, May 27, 1999.

On motion of Senator Carona, the Conference Committee Report was adopted by a viva voce vote.

SENATE BILL 844 WITH HOUSE AMENDMENT

Senator Carona called SB 844 from the President's table for consideration of the House amendment to the bill.

The Presiding Officer, Senator Ratliff in Chair, laid the bill and the House amendment before the Senate.

Floor Amendment No. 1

Amend SB 844 (senate engrossment) as follows:

(1) In SECTION 1 of the bill, strike Subdivision (4) (page 1, lines 12-13) and substitute the following:

(4) a municipal police officer in a municipality with a population of:

(A) 100,000 or more; or

(B) 74,000 or more in a county with a population of more than 1.5 million; or

(2) In SECTION 2 of the bill, strike Subdivision (1) (page 1, lines 22-24) and substitute the following:

(1) to enforce this subchapter in any area of this state other than in the territory of a municipality with a population of more than:

(A) 100,000; or

(B) 74,000 in a county with a population of more than 1.5 million; and

The amendment was read.

On motion of Senator Carona, the Senate concurred in the House amendment to SB 844 by a viva voce vote.

CONFERENCE COMMITTEE ON HOUSE BILL 2434

Senator Moncrief called from the President's table, for consideration at this time, the request of the House for a conference committee to adjust the differences between the two Houses on HB 2434 and moved that the request be granted.

The motion prevailed.

The Presiding Officer asked if there were any motions to instruct the conference committee on HB 2434 before appointment.

There were no motions offered.

Accordingly, the Presiding Officer announced the appointment of the following conferees on the part of the Senate on the bill: Senators Moncrief, Chair; Ellis, Nixon, Lindsay, and Madla.

MOTION TO GRANT REQUEST FOR

CONFERENCE COMMITTEE ON HOUSE BILL 3158

Senator Madla called from the President's table, for consideration at this time, the request of the House for a conference committee to adjust the differences between the two Houses on HB 3158 and moved that the request be granted.

The motion was lost by a viva voce vote.

SENATE BILL 1651 WITH HOUSE AMENDMENT

Senator Jackson called SB 1651 from the President's table for consideration of the House amendment to the bill.

The Presiding Officer laid the bill and the House amendment before the Senate.

Floor Amendment No. 1

Amend SB 1651 in SECTION 2 of the bill (senate engrossment) as follows:

(1) In Subsection (a) (page 1, lines 14 and 15), strike "an institution" and substitute "a particular institution".

(2) In Subsection (a) (page 1, line 17), between "shall" and "assist", insert "review and may approve the transition and shall".

(3) In Subsection (b) (page 1, line 23), strike "selected" and substitute "as approved".

The amendment was read.

Senator Jackson moved to concur in the House amendment to SB 1651.

The motion prevailed by the following vote: Yeas 30, Nays 0.

Absent-excused: Luna.

CONFERENCE COMMITTEE REPORT ON

HOUSE BILL 3799 ADOPTED

Senator Gallegos called from the President's table the Conference Committee Report on HB 3799. The Conference Committee Report was filed with the Senate on Thursday, May 27, 1999.

On motion of Senator Gallegos, the Conference Committee Report was adopted by the following vote: Yeas 30, Nays 0.

Absent-excused: Luna.

CONFERENCE COMMITTEE REPORT ON

SENATE JOINT RESOLUTION 12 ADOPTED

Senator Carona called from the President's table the Conference Committee Report on SJR 12. The Conference Committee Report was filed with the Senate on Wednesday, May 26, 1999.

On motion of Senator Carona, the Conference Committee Report was adopted by the following vote: Yeas 30, Nays 0.

Absent-excused: Luna.

SENATE BILL 1866 WITH HOUSE AMENDMENT

Senator Lindsay called SB 1866 from the President's table for consideration of the House amendment to the bill.

The Presiding Officer laid the bill and the House amendment before the Senate.

Amendment

Amend SB 1866 by substituting in lieu thereof the following:

A BILL TO BE ENTITLED

AN ACT

relating to the creation of the Harris County Municipal Management District No. 1; providing authority to impose a tax and issue bonds.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Chapter 376, Local Government Code, is amended by adding Subchapter H to read as follows:

SUBCHAPTER H. HARRIS COUNTY MUNICIPAL

MANAGEMENT DISTRICT NO. 1

Sec. 376.301. CREATION OF DISTRICT. (a) The Harris County Municipal Management District No. 1 is created as a special district under Section 59, Article XVI, Texas Constitution.

(b) The board by resolution may change the district's name.

(c) The creation of the district is essential to accomplish the purposes of Sections 52 and 52-a, Article III, and Section 59, Article XVI, Texas Constitution, and other public purposes stated in this subchapter.

Sec. 376.302. DECLARATION OF INTENT. (a) The creation of the district is necessary to promote, develop, encourage, and maintain employment, commerce, transportation, housing, tourism, recreation, arts, entertainment, economic development, safety, and the public welfare in the district.

(b) The creation of the district and this legislation are not to be interpreted to relieve the county or the municipality from providing the level of services, as of the effective date of this subchapter, to the area in the district or to release the county or the municipality from the obligations each entity has to provide services to that area. The district is created to supplement and not supplant the municipal or county services provided in the area in the district.

(c) By creating the district and in authorizing the municipality, county, and other political subdivisions to contract with the district, the legislature has established a program to accomplish the public purposes set out in Section 52-a, Article III, Texas Constitution.

Sec. 376.303. DEFINITIONS. In this subchapter:

(1) "Board" means the board of directors of the district.

(2) "County" means Harris County.

(3) "District" means the Harris County Municipal Management District No. 1.

(4) "Municipality" means the City of Houston.

(5) "Utility" means a person that provides to the public gas, electricity, telephone, sewage, or water service.

Sec. 376.304. BOUNDARIES. The district includes all the territory contained within the following described area:

BEGINNING AT A POINT located at the intersection of the east right-of-way line of Bunker Hill Road and the north right-of-way line of Interstate Highway 10 frontage road, in the City of Houston, Harris County, Texas;

THENCE, in a southerly direction crossing Interstate Highway 10 along the east right-of-way line of Bunker Hill Road to the extension of the south right-of-way line of Barryknoll Lane;

THENCE, in a westerly direction following the south right-of-way line of Barryknoll Lane to the northwest corner of the Riedel Estates;

THENCE, in a southerly direction approximately 930 feet following the west property line of Riedel Estates;

THENCE, in a westerly direction approximately 625 feet following the north right-of-way line of Kimberly Lane to the east boundary of a H.C.F.C.D. easement;

THENCE, in a northerly direction approximately 690 feet following the east boundary line of a H.C.F.C.D. easement to a point being an intersection of the east line of said ditch with the southeasterly projection of the north line of Memorial Hollow Section 8;

THENCE, in a west northwesterly direction approximately 625 feet following the north line of Memorial Hollow Section 8, to a point in the south right-of-way line of Barryknoll Lane;

THENCE, in a westerly direction to the intersection of the south right-of-way line of Barryknoll Lane and the east right-of-way line of Plantation Road;

THENCE, in a southerly direction approximately 620 feet following the east right-of-way line of Plantation Road to a point;

THENCE, in a west northwesterly direction approximately 820 feet, along the north property line of Memorial Hollow Section 7, to a point on the west right-of-way line of Gessner Road;

THENCE, in a northerly direction approximately 600 feet following the west right-of-way line of Gessner Road, to the northeast corner of Memorial Hollow Section 6 Replat;

THENCE, in a westerly direction along the north property line of Memorial Hollow Section 6 Replat to the east right-of-way line Frostwood Drive;

THENCE, in a southerly direction approximately 60 feet along a curve to the left, being the east right-of-way line of Frostwood Drive;

THENCE, in a westerly direction approximately 450 feet along the north subdivision line to the northwest corner of Memorial Hollow Section 5 Replat;

THENCE, in a northerly direction approximately 2,400 feet to a point in the north right-of-way line of the Interstate Highway 10 frontage road;

THENCE, in an easterly direction along the north right-of-way of Interstate Highway 10 frontage road approximately 5,400 feet to the POINT OF BEGINNING.

SAVE AND EXCEPT the subdivision known as Memorial Village Townhouses Section 1 and Memorial Village Townhouses Section 2, more particularly described by metes and bounds as follows;

BEGINNING at a point approximately 190 feet west along the north right-of-way of Barryknoll Lane from the intersection of Barryknoll Lane and the west right-of-way line of Bunker Hill Road;

THENCE, in a westerly direction approximately 570 feet along the north right-of-way of Barryknoll Lane to the southwest corner of Memorial Village Townhouses Section 2;

THENCE, in a northerly direction approximately 435 feet to a point for corner;

THENCE, in an easterly direction approximately 180 feet to a point for corner;

THENCE, in a northerly direction approximately 136 feet to a point for corner;

THENCE, in a westerly direction approximately 183 feet to a point for corner;

THENCE, in a northerly direction approximately 405 feet to the northeast corner of Memorial City Terrace Replat to a point for corner;

THENCE, in an easterly direction approximately 770 feet to a point in the west right-of-way line of Bunker Hill Road;

THENCE, in a southerly direction approximately 60 feet along the west right-of-way of Bunker Hill Road to a point for corner;

THENCE, in a westerly direction approximately 200 feet to a point for corner;

THENCE, in a southerly direction approximately 920 feet to the north right-of-way line on Barryknoll Lane and being the POINT OF BEGINNING.

SAVE AND EXCEPT all tracts or parcels of land, rights-of-way, facilities, and improvements owned by a utility.

Sec. 376.305. FINDINGS RELATING TO BOUNDARIES. The boundaries and field notes of the district form a closure. If a mistake is made in the field notes or in copying the field notes in the legislative process, it does not affect the district's:

(1) organization, existence, or validity;

(2) right to issue any type of bond for the purposes for which the district is created or to pay the principal of and interest on a bond;

(3) right to impose or collect an assessment or taxes; or

(4) legality or operation.

Sec. 376.306. FINDINGS OF BENEFIT AND PUBLIC PURPOSE. (a) All the land and other property included in the district will be benefited by the improvements and services to be provided by the district under powers conferred by Sections 52 and 52-a, Article III, and Section 59, Article XVI, Texas Constitution, and other

powers granted under this subchapter, and the district is created to serve a public use and benefit.

(b) The creation of the district is in the public interest and is essential to:

(1) further the public purposes of the development and diversification of the economy of the state; and

(2) eliminate unemployment and underemployment and develop or expand transportation and commerce.

(c) The district will:

(1) promote the health, safety, and general welfare of residents, employers, employees, visitors, consumers in the district, and the general public;

(2) provide needed funding to preserve, maintain, and enhance the economic health and vitality of the area as a community and business center; and

(3) further promote the health, safety, welfare, and enjoyment of the public by providing pedestrian ways and by landscaping and developing certain areas in the district, which are necessary for the restoration, preservation, and enhancement of scenic and aesthetic beauty.

(d) Pedestrian ways along or across a street, whether at grade or above or below the surface, and street lighting, street landscaping, and street art objects are parts of and necessary components of a street and are considered to be a street or road improvement.

(e) The district may not act as the agent or instrumentality of any private interest even though many private interests will be benefited by the district, as will the general public.

Sec. 376.307. APPLICATION OF OTHER LAW. Except as otherwise provided by this subchapter, Chapter 375 applies to the district.

Sec. 376.308. LIBERAL CONSTRUCTION OF SUBCHAPTER. This subchapter shall be liberally construed in conformity with the findings and purposes stated in this subchapter.

Sec. 376.309. BOARD OF DIRECTORS IN GENERAL. (a) The district is governed by a board of 11 directors who serve staggered terms of four years.

(b) A director shall receive compensation as provided by Section 49.060, Water Code.

Sec. 376.310. APPOINTMENT OF DIRECTORS. (a) The mayor and members of the governing body of the municipality shall appoint directors from persons recommended by the board. A person is appointed if a majority of the members and the mayor vote to appoint that person.

(b) A person may not be appointed to the board if the appointment of that person would result in less than two-thirds of the directors residing in the municipality.

Sec. 376.311. EX OFFICIO BOARD MEMBERS. (a) The following persons shall serve as a nonvoting ex officio director:

(1) the director of the following departments of the municipality:

(A) parks and recreation;

(B) planning and development;

(C) public works; and

(D) civic center;

(2) the municipality's chief of police;

(3) the county's general manager of the Metropolitan Transit Authority; and

(4) the presidents of any institutions of higher learning located in the district.

(b) If a department described by Subsection (a) is consolidated, renamed, or changed, the board may appoint a director of the consolidated, renamed, or changed department as a nonvoting ex officio board member. If a department described by Subsection (a) is abolished, the board may appoint a representative of another department of the municipality that performs duties comparable to those performed by the abolished department.

(c) The board may appoint the presiding officer of a nonprofit corporation that is actively involved in activities in the municipality's midtown area to serve as a nonvoting ex officio director.

Sec. 376.312. CONFLICTS OF INTEREST; ONE-TIME AFFIDAVIT. (a) Except as provided in this section:

(1) a director may participate in all board votes and decisions; and

(2) Chapter 171 governs conflict of interest for board members.

(b) Section 171.004 does not apply to the district. A director who has a substantial interest in a business or charitable entity that will receive a pecuniary benefit from a board action shall file a one-time affidavit declaring the interest. An additional affidavit is not required if the director's interest changes. After the affidavit is filed with the board secretary, the director may participate in a discussion or vote on that action if:

(1) a majority of the directors have a similar interest in the same entity; or

(2) all other similar business or charitable entities in the district will receive a similar pecuniary benefit.

(c) A director who is also an officer or employee of a public entity may not participate in the discussion of or vote on a matter regarding a contract with that same public entity.

(d) For purposes of this section, a director has a substantial interest in a charitable entity in the same manner that a person would have a substantial interest in a business entity under Section 171.002.

Sec. 376.313. ADDITIONAL POWERS OF DISTRICT. (a) The district may exercise the powers given to a corporation created under Section 4B, Development Corporation Act of 1979 (Article 5190.6, Vernon's Texas Civil Statutes).

(b) The district may exercise the powers given to a housing finance corporation created under Chapter 394 to provide housing or residential development projects in the district.

(c) The district may exercise the powers granted to an eligible political subdivision under Chapter 221, Natural Resources Code.

(d) The district may exercise its powers in areas outside the boundaries of the district if the board determines that there is a benefit to the district in exercising that power.

Sec. 376.314. AGREEMENTS: GENERAL; DONATIONS, INTERLOCAL AGREEMENTS, AND LAW ENFORCEMENT SERVICES. (a) The district may make an agreement with or accept a donation, grant, or loan from any person.

(b) The implementation of a project is a governmental function or service for the purposes of Chapter 791, Government Code.

(c) To protect the public interest, the district may contract with the municipality or the county for the municipality or county to provide law enforcement services in the district for a fee.

Sec. 376.315. NONPROFIT CORPORATION. (a) The board by resolution may authorize the creation of a nonprofit corporation to assist and act on behalf of the district in implementing a project or providing a service authorized by this subchapter.

(b) The board shall appoint the board of directors of a nonprofit corporation created under this section. The board of directors of the nonprofit corporation shall serve in the same manner, term, and conditions as a board of directors of a local government corporation created under Chapter 431, Transportation Code.

(c) A nonprofit corporation created under this section has the powers of and is considered for purposes of this subchapter to be a local government corporation created under Chapter 431, Transportation Code.

(d) A nonprofit corporation created under this section may implement any project and provide any service authorized by this subchapter.

Sec. 376.316. ANNEXATION. The district may:

(1) annex territory as provided by Subchapter C, Chapter 375; and

(2) annex territory located inside the boundaries of a reinvestment zone created by the municipality under Chapter 311, Tax Code, if the governing body of the municipality consents to the annexation.

Sec. 376.317. ASSESSMENTS. (a) The board may impose and collect an assessment for any purpose authorized by this subchapter. The imposition of an assessment requires that two-thirds of the board members vote in favor of the imposition.

(b) Assessments, reassessments, or assessments resulting from an addition to or correction of the assessment roll by the district, penalties and interest on an assessment or reassessment, expenses of collection, and reasonable attorney's fees incurred by the district:

(1) are a first and prior lien against the property assessed;

(2) are superior to any other lien or claim other than a lien or claim for county, school district, or municipal ad valorem taxes; and

(3) are the personal liability of and charge against the owners of the property even if the owners are not named in the assessment proceedings.

(c) The lien is effective from the date of the resolution of the board levying the assessment until the assessment is paid. The board may enforce the lien in the same manner that the board may enforce an ad valorem tax lien against real property.

Sec. 376.318. PETITION REQUIRED FOR FINANCING SERVICES AND IMPROVEMENTS. The board may not finance a service or improvement project under this subchapter unless a written petition requesting the improvement or service has been filed with the board. The petition must be signed by the owners of a majority of the assessed value of real property in the district as determined by the most recent certified county property tax rolls.

Sec. 376.319. ELECTIONS. (a) In addition to the elections the district must hold under Subchapter L, Chapter 375, the district shall hold an election in the manner provided by that subchapter to obtain voter approval before the district imposes a maintenance tax or issues bonds payable from ad valorem taxes or assessments.

(b) The board may include more than one purpose in a single proposition at an election.

Sec. 376.320. MAINTENANCE TAX. (a) The district may impose and collect an annual ad valorem tax on taxable property in the district for the maintenance and operation of the district and the improvements constructed or acquired by the district or for the provision of services only if:

(1) two-thirds of the board members vote in favor of imposing the tax; and

(2) the tax is authorized at an election held in accordance with Section 376.319.

(b) The board shall determine the tax rate.

Sec. 376.321. UTILITIES. The district may not impose an assessment or impact fee on a utility's property.

Sec. 376.322. MUNICIPAL APPROVAL. (a) Except as provided by Subsection (b), the district must obtain approval from the municipality's governing body of:

(1) the issuance of bonds for an improvement project; and

(2) the plans and specifications of an improvement project financed by the bonds.

(b) If the district obtains approval from the municipality's governing body of a capital improvements budget for a period not to exceed five years, the district may finance the capital improvements and issue bonds specified in the budget without further approval from the municipality.

(c) The district must obtain approval from the municipality's governing body of the plans and specifications of any district improvement project related to the use of land owned by the municipality, an easement granted by the municipality, or a right-of-way of a street, road, or highway.

(d) Except as provided by Section 375.263, a municipality is not obligated to pay any bonds, notes, or other obligations of the district.

Sec. 376.323. DISBURSEMENTS OR TRANSFERS OF FUNDS. The board by resolution shall establish the number of directors' signatures and the procedure required for a disbursement or transfer of the district's money.

Sec. 376.324. COMPETITIVE BIDDING LIMIT. Section 375.221 does not apply to the district unless the contract is for more than $25,000.

Sec. 376.325. EXCEPTION FOR DISSOLUTION OF DISTRICT WITH OUTSTANDING DEBTS. (a) The board may vote to dissolve a district that has debt. If the vote is in favor of dissolution, the district shall remain in existence solely for the limited purpose of discharging its debts. The dissolution is effective when all debts have been discharged.

(b) Section 375.264 does not apply to the district.

SECTION 2. The legislature finds that:

(1) proper and legal notice of the intention to introduce this Act, setting forth the general substance of this Act, has been published as provided by law, and the notice and a copy of this Act have been furnished to all persons, agencies, officials, or entities to which they are required to be furnished by the constitution and laws of this state, including the governor, who has submitted the notice and Act to the Texas Natural Resource Conservation Commission;

(2) the Texas Natural Resource Conservation Commission has filed its recommendations relating to this Act with the governor, lieutenant governor, and speaker of the house of representatives within the required time;

(3) the general law relating to consent by political subdivisions to the creation of districts with conservation, reclamation, and road powers and the inclusion of land in those districts has been complied with; and

(4) all requirements of the constitution and laws of this state and the rules and procedures of the legislature with respect to the notice, introduction, and passage of this Act have been fulfilled and accomplished.

SECTION 3. Notwithstanding Section 376.310, Local Governmental Code, as added by this Act:

(1) the initial board of directors of the Harris County Municipal Management District No. 1 consists of:

Pos. No. Name of Board Member

1. Bill Huntsinger

2. Jana Lee

3. Kathy Miller

4. Randy Nerren

5. Lisa Zinis

6. Marshall Heins

7. Larry Beerman

8. John Chang

9. Gracie Saenz

10. Billy Reed

11. Bill Mosley; and

(2) of the initial board members, the members appointed for positions 1 through 6 serve until June 1, 2003, and the members appointed for positions 7 through 11 serve until June 1, 2001.

SECTION 4. The importance of this legislation and the crowded condition of the calendars in both houses create an emergency and an imperative public necessity that the constitutional rule requiring bills to be read on three several days in each house be suspended, and this rule is hereby suspended, and that this Act take effect and be in force from and after its passage, and it is so enacted.

The amendment was read.

Senator Lindsay moved to concur in the House amendment to SB 1866.

The motion prevailed by the following vote: Yeas 30, Nays 0.

Absent-excused: Luna.

SENATE RESOLUTION 1180

Senator Lucio offered the following resolution:

BE IT RESOLVED by the Senate of the State of Texas, 76th Legislature, Regular Session, 1999, That Senate Rule 12.03 is suspended, as provided by Senate Rule 12.08, to enable the conference committee appointed to resolve the differences between the house and senate versions of SB 558, relating to training requirements for certain child-care providers, to consider and take action on the following matter:

Senate Rules 12.03(1) and (2) are suspended to permit the committee to amend Section 1 of the bill to read as follows:

SECTION 1. Subchapter C, Chapter 42, Human Resources Code, is amended by adding Section 42.0421 to read as follows:

Sec. 42.0421. MINIMUM TRAINING STANDARDS. (a) The minimum training standards prescribed by the department under Section 42.042(p) for an employee of a day-care center or group day-care home must include:

(1) eight hours of initial training for an employee of a day-care center who has no previous training or employment experience in a regulated child-care facility, to be completed before the employee is given responsibility for a group of children;

(2) 15 hours of annual training for each employee of a day-care center or group day-care home, excluding the director; and

(3) 20 hours of annual training for each director of a day-care center or group day-care home.

(b) The minimum training standards prescribed by the department under Section 42.042(p) must require an employee of a licensed day-care center or group day-care home who provides care for children younger than 24 months of age to receive special training regarding the care of those children. The special training must be included as a component of the initial training required by Subsection (a)(1) and as a one-hour component of the annual training required by Subsections (a)(2) and (a)(3). The special training must include information on:

(1) recognizing and preventing shaken baby syndrome;

(2) preventing sudden infant death syndrome; and

(3) understanding early childhood brain development.

(c) The department by rule shall require an operator of a registered family home who provides care for a child younger than 24 months of age to complete one hour of annual training on:

(1) recognizing and preventing shaken baby syndrome;

(2) preventing sudden infant death syndrome; and

(3) understanding early childhood brain development.

(d) Section 42.042(m) does not apply to the minimum training standards required by this section.

Explanation: This amendment is necessary to require that the special training required by Section 42.0421(b), Human Resources Code, as added by the Act, be included as a component of the required eight hours of initial training.

The resolution was read and was adopted by the following vote: Yeas 30, Nays 0.

Absent-excused: Luna.

SENATE RESOLUTION 1175

Senator Wentworth offered the following resolution:

BE IT RESOLVED by the Senate of the State of Texas, 76th Legislature, Regular Session, 1999, That Senate Rule 12.03 is suspended in part, as provided by Senate Rule 12.08, to enable the conference committee appointed to resolve the differences on HB 3549, relating to the administration and collection of ad valorem taxes and certain local standby fees, to consider and take action on the following matter:

Senate Rule 12.03(4) is suspended to permit the committee to add text on a matter that is not included in either the house or senate version of the bill to read as follows:

SECTION 32. Section 34.08(b), Tax Code, is amended to read as follows:

(b) A person may not commence an action challenging the validity of a tax sale after the time set forth in Section 33.54(a)(1) or (2), as applicable to the property, against a subsequent purchaser for value who acquired the property in reliance on the tax sale. The purchaser may conclusively presume that the tax sale was valid and shall have full title to the property free and clear of the right, title, and interest of any person that arose before the tax sale, subject only to recorded restrictive covenants and valid easements of record set forth in Section 34.01(n) [34.01(d) ] and subject to applicable rights of redemption.

Explanation: This change is necessary to conform a cross-reference to Section 34.01(d), Tax Code, contained in Section 34.08(b), Tax Code, to the amendment of Section 34.01(d) made by the bill.

The resolution was read and was adopted by the following vote: Yeas 30, Nays 0.

Absent-excused: Luna.

CONFERENCE COMMITTEE REPORT ON

HOUSE BILL 2684 ADOPTED

Senator Gallegos called from the President's table the Conference Committee Report on HB 2684. The Conference Committee Report was filed with the Senate on Thursday, May 27, 1999.

On motion of Senator Gallegos, the Conference Committee Report was adopted by the following vote: Yeas 30, Nays 0.

Absent-excused: Luna.

SENATE BILL 875 WITH HOUSE AMENDMENT

Senator Shapiro called SB 875 from the President's table for consideration of the House amendment to the bill.

The Presiding Officer, Senator Ratliff in Chair, laid the bill and the House amendment before the Senate.

Amendment

Amend SB 875 by substituting in lieu thereof the following:

A BILL TO BE ENTITLED

AN ACT

relating to the financial accountability of school districts.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Chapter 39, Education Code, is amended by adding Subchapter I to read as follows:

SUBCHAPTER I. FINANCIAL ACCOUNTABILITY

Sec. 39.201. PROPOSED FINANCIAL ACCOUNTABILITY RATING SYSTEM. (a) The commissioner shall in consultation with the comptroller develop proposals for a school district accountability rating system, to be presented to the Legislature no later than December 15, 2000. This subsection expires September 1, 2001.

SECTION 2. Subsection (e), Section 44.008, Education Code, is amended to read as follows:

(e) The audit reports shall be reviewed by the agency, and the commissioner shall notify the board of trustees of objections, violations of sound accounting practices or law and regulation requirements, or of recommendations concerning the audit reports that the commissioner wants to make. If the audit report reflects that penal laws have been violated, the commissioner shall notify the appropriate county or district attorney and the attorney general. The commissioner shall have access to all vouchers, receipts, district fiscal and financial records, and other school records as the commissioner considers necessary and appropriate for the review, analysis, and passing on audit reports.

SECTION 3. This Act takes effect September 1, 1999.

SECTION 4. The importance of this legislation and the crowded condition of the calendars in both houses create an emergency and an imperative public necessity that the constitutional rule requiring bills to be read on three several days in each house be suspended, and this rule is hereby suspended, and that this Act take effect and be in force from and after its passage, and it is so enacted.

The amendment was read.

Senator Shapiro moved to concur in the House amendment to SB 875.

The motion prevailed by the following vote: Yeas 30, Nays 0.

Absent-excused: Luna.

SENATE BILL 824 WITH HOUSE AMENDMENT

Senator Gallegos called SB 824 from the President's table for consideration of the House amendment to the bill.

The Presiding Officer laid the bill and the House amendment before the Senate.

Amendment

Amend SB 824 by substituting in lieu thereof the following:

A BILL TO BE ENTITLED

AN ACT

relating to the powers of municipalities that have created certain reinvestment zones.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 311.008, Tax Code, is amended to read as follows:

Sec. 311.008. POWERS OF MUNICIPALITY. (a) In this section, "educational facility" includes equipment, real property, and other facilities, including a public school building, that are used or intended to be used jointly by the municipality and an independent school district.

(b) A municipality may exercise any power necessary and convenient to carry out this chapter, including the power to:

(1) cause project plans to be prepared, approve and implement the plans, and otherwise achieve the purposes of the plan;

(2) acquire real property by purchase, condemnation, or other means to implement project plans and sell that property on the terms and conditions and in the manner it considers advisable;

(3) enter into agreements, including agreements with bondholders, determined by the governing body of the municipality to be necessary or convenient to implement project plans and achieve their purposes, which agreements may include conditions, restrictions, or covenants that run with the land or that by other means regulate or restrict the use of land; and

(4) consistent with the project plan for the zone:

(A) acquire blighted, deteriorated, deteriorating, undeveloped, or inappropriately developed real property or other property in a blighted area or in a federally assisted new community in the zone for the preservation or restoration of

historic sites, beautification or conservation, the provision of public works or public facilities, or other public purposes; [or ]

(B) acquire, construct, reconstruct, or install public works, facilities, or sites or other public improvements, including utilities, streets, street lights, water and sewer facilities, pedestrian malls and walkways, parks, flood and drainage facilities, [educational facilities, ] or parking facilities, but not including educational facilities; or

(C) in a reinvestment zone created on or before September 1, 1999, acquire, construct, or reconstruct educational facilities in the municipality.

(c) [(b) ] The powers authorized by Subsection (b)(2) [(a)(2) ] prevail over any law or municipal charter to the contrary.

(d) [(c) ] A municipality may make available to the public on request financial information regarding the acquisition by the municipality of land in the zone when the municipality acquires the land.

SECTION 2. The importance of this legislation and the crowded condition of the calendars in both houses create an emergency and an imperative public necessity that the constitutional rule requiring bills to be read on three several days in each house be suspended, and this rule is hereby suspended, and that this Act take effect and be in force from and after its passage, and it is so enacted.

The amendment was read.

Senator Gallegos moved to concur in the House amendment to SB 824.

The motion prevailed by the following vote: Yeas 30, Nays 0.

Absent-excused: Luna.

CONFERENCE COMMITTEE ON HOUSE BILL 3014

Senator Bernsen called from the President's table, for consideration at this time, the request of the House for a conference committee to adjust the differences between the two Houses on HB 3014 and moved that the request be granted.

The motion prevailed.

The Presiding Officer asked if there were any motions to instruct the conference committee on HB 3014 before appointment.

There were no motions offered.

Accordingly, the Presiding Officer announced the appointment of the following conferees on the part of the Senate on the bill: Senators Bernsen, Chair; Armbrister, Jackson, Cain, and Lucio.

CONFERENCE COMMITTEE ON HOUSE BILL 1703

Senator Madla called from the President's table, for consideration at this time, the request of the House for a conference committee to adjust the differences between the two Houses on HB 1703 and moved that the request be granted.

The motion prevailed.

The Presiding Officer asked if there were any motions to instruct the conference committee on HB 1703 before appointment.

There were no motions offered.

Accordingly, the Presiding Officer announced the appointment of the following conferees on the part of the Senate on the bill: Senators Madla, Chair; Lindsay, Lucio, Nixon, and Gallegos.

CONFERENCE COMMITTEE ON HOUSE BILL 3328

Senator Madla called from the President's table, for consideration at this time, the request of the House for a conference committee to adjust the differences between the two Houses on HB 3328 and moved that the request be granted.

The motion prevailed.

The Presiding Officer asked if there were any motions to instruct the conference committee on HB 3328 before appointment.

There were no motions offered.

Accordingly, the Presiding Officer announced the appointment of the following conferees on the part of the Senate on the bill: Senators Madla, Chair; Bivins, Wentworth, Ellis, and Cain.

(President in Chair)

SENATE RESOLUTION 1178

Senator Ratliff, on behalf of Senator West, offered the following resolution:

BE IT RESOLVED by the Senate of the State of Texas, 76th Legislature, Regular Session, 1999, That Senate Rule 12.03 be suspended in part, as provided by Senate Rule 12.08, to enable the conference committee appointed to resolve the differences on SB 840, relating to the automatic expunction of certain arrest records, to consider and take action on the following matters:

(1) Senate Rule 12.03(2) is suspended to permit the committee to omit the following text, which is not in disagreement:

SECTION 6. This Act takes effect only if a specific appropriation for the implementation of this Act is provided in HB 1 (General Appropriations Act), Acts of the 76th Legislature, Regular Session, 1999. If no specific appropriation is provided in HB 1, the General Appropriations Act, this Act has no effect.

Explanation: This change is necessary to ensure that SB 840 takes effect by its own terms, rather than taking effect contingent on the existence of certain provisions in the General Appropriations Act.

(2) Senate Rules 12.03(3) and (4) are suspended to permit the committee to add additional text not included in either the house or senate version of the bill to read as follows:

SECTION 6. The Texas Department of Public Safety shall implement the provisions of Chapter 55, Code of Criminal Procedure, as amended by this Act, imposing duties on the department, from funds made available to the department in the General Appropriations Act.

Explanation: This change is necessary to ensure that the Texas Department of Public Safety implements certain changes in law made by SB 840 using funds appropriated to the department in the General Appropriations Act.

The resolution was read and was adopted by the following vote: Yeas 30, Nays 0.

Absent-excused: Luna.

BILLS AND RESOLUTIONS SIGNED

The President announced the signing of the following enrolled bills and resolutions in the presence of the Senate after the captions had been read:

SB 7, SB 61, SB 153, SB 155, SB 230, SB 261, SB 338, SB 339, SB 368, SB 376, SB 383, SB 562, SB 607, SB 760, SB 779, SB 830, SB 874, SB 881, SB 964, SB 967, SB 1085, SB 1129, SB 1150, SB 1183, SB 1185, SB 1192, SB 1209, SB 1220, SB 1224, SB 1233, SB 1239, SB 1257, SB 1261, SB 1320, SB 1426, SB 1427, SB 1464, SB 1477, SB 1507, SB 1553, SB 1577, SB 1578, SB 1580, SB 1588, SB 1623, SB 1670, SB 1677, SB 1678, SB 1726, SB 1731, SB 1741, SB 1751, SB 1763, SB 1766, SB 1816, SB 1824, SB 1841, SCR 26, SCR 66, SCR 71, SCR 74, SCR 86, HB 160, HB 618, HB 656, HB 749, HB 817, HB 1014, HB 1049, HB 1052, HB 1102, HB 1324, HB 1511, HB 1852, HB 1907, HB 2274, HB 2317, HB 2337, HB 2388, HB 2421, HB 2441, HB 2456, HB 2511, HB 2513, HB 2514, HB 2526, HB 2537, HB 2538, HB 2573, HB 2760, HB 2787, HB 2800, HB 2862, HB 2894, HB 2977, HB 2990, HB 3084, HB 3191, HB 3197, HB 3230, HB 3249, HB 3272, HB 3276, HB 3333, HB 3340, HB 3407, HB 3425, HB 3433, HB 3446, HB 3481, HB 3492, HB 3598, HB 3642, HB 3741, HB 3828, HB 3832, HB 3836, HB 3847, HCR 268, HCR 293, HCR 302, HCR 304, HCR 305, HCR 308.

CONFERENCE COMMITTEE ON HOUSE BILL 485

Senator Madla called from the President's table, for consideration at this time, the request of the House for a conference committee to adjust the differences between the two Houses on HB 485 and moved that the request be granted.

The motion prevailed.

The President asked if there were any motions to instruct the conference committee on HB 485 before appointment.

There were no motions offered.

Accordingly, the President announced the appointment of the following conferees on the part of the Senate on the bill: Senators Madla, Chair; Nixon, Moncrief, Lindsay, and Lucio.

(Senator Duncan in Chair)

CONFERENCE COMMITTEE REPORT ON

HOUSE BILL 1620 ADOPTED

Senator Fraser called from the President's table the Conference Committee Report on HB 1620. The Conference Committee Report was filed with the Senate on Thursday, May 27, 1999.

On motion of Senator Fraser, the Conference Committee Report was adopted by a viva voce vote.

SENATE BILL 1650 WITH HOUSE AMENDMENTS

Senator Jackson called SB 1650 from the President's table for consideration of the House amendments to the bill.

The Presiding Officer laid the bill and the House amendments before the Senate.

Floor Amendment No. 1

Amend SB 1650, in SECTION 4 of the bill, at the end of proposed Article 62.045(a), Code of Criminal Procedure (House Committee Report, page 11, line 2), by adding "In providing written notice under this subsection, the department shall use employees of the department whose duties in providing the notice are in addition to the employee's regular duties."

Floor Amendment No. 2

Amend SB 1650 to strike SECTION 7 (House Committee Report, page 13, line 4).

Floor Amendment No. 3

Amend SB 1650 as follows:

(1) In SECTION 4 of the bill (Committee Printing page 11, line 25) add a new Subsection (e) to Art. 62.045 to read as follows:

(e) An owner of a single-family residential property or the owner's agent has no duty to make a disclosure to a prospective buyer or tenant about registrants under this chapter.

The amendments were read.

Senator Jackson moved to concur in the House amendments to SB 1650.

The motion prevailed by the following vote: Yeas 30, Nays 0.

Absent-excused: Luna.

CONFERENCE COMMITTEE ON HOUSE BILL 1188

Senator Shapiro called from the President's table, for consideration at this time, the request of the House for a conference committee to adjust the differences between the two Houses on HB 1188 and moved that the request be granted.

The motion prevailed.

The Presiding Officer asked if there were any motions to instruct the conference committee on HB 1188 before appointment.

There were no motions offered.

Accordingly, the Presiding Officer announced the appointment of the following conferees on the part of the Senate on the bill: Senators Shapiro, Chair; Fraser, Nelson, Armbrister, and Duncan.

CONFERENCE COMMITTEE ON HOUSE BILL 628

Senator Shapiro called from the President's table, for consideration at this time, the request of the House for a conference committee to adjust the differences between the two Houses on HB 628 and moved that the request be granted.

The motion prevailed.

The Presiding Officer asked if there were any motions to instruct the conference committee on HB 628 before appointment.

There were no motions offered.

Accordingly, the Presiding Officer announced the appointment of the following conferees on the part of the Senate on the bill: Senators Shapiro, Chair; Jackson, West, Fraser, and Nelson.

CONFERENCE COMMITTEE ON HOUSE BILL 2553

Senator Ratliff, on behalf of Senator Bivins, called from the President's table, for consideration at this time, the request of the House for a conference committee to adjust the differences between the two Houses on HB 2553 and moved that the request be granted.

The motion prevailed.

The Presiding Officer asked if there were any motions to instruct the conference committee on HB 2553 before appointment.

There were no motions offered.

Accordingly, the Presiding Officer announced the appointment of the following conferees on the part of the Senate on the bill: Senators Bivins, Chair; Lucio, Sibley, Cain, and Jackson.

(Senator Ratliff in Chair)

CONFERENCE COMMITTEE REPORT ON

HOUSE BILL 1865 ADOPTED

Senator West called from the President's table the Conference Committee Report on HB 1865. The Conference Committee Report was filed with the Senate on Thursday, May 27, 1999.

On motion of Senator West, the Conference Committee Report was adopted by a viva voce vote.

SENATE RESOLUTION 1184

Senator Brown offered the following resolution:

BE IT RESOLVED by the Senate of the State of Texas, 76th Legislature, Regular Session, 1999, That Senate Rule 12.03 be suspended in part as provided by Senate Rule 12.08 to enable the conference committee appointed to resolve the differences between the house and senate versions of HB 2954, relating to the application of the

sunset review process to certain state agencies, to consider and take action on the following matters:

Senate Rule 12.03(4) is suspended to permit the committee to add a section to the bill that amends Section 571.022, Government Code, to read as follows:

SECTION . TEXAS ETHICS COMMISSION. Section 571.022, Government Code, is amended to read as follows:

Sec. 571.022. SUNSET PROVISION. The commission is subject to review under Chapter 325 (Texas Sunset Act), but is not abolished under that chapter. The commission shall be reviewed during the periods in which state agencies abolished in 2003 [2001 ] and every 12th year after that year [2001 ] are reviewed.

Explanation: This change is necessary to give the Texas Ethics Commission sufficient time to implement, before the commission undergoes sunset review, a system for the electronic reporting of certain political contributions and political expenditures.

The resolution was read and was adopted by the following vote: Yeas 30, Nays 0.

Absent-excused: Luna.

CONFERENCE COMMITTEE REPORT ON

HOUSE BILL 1362 ADOPTED

Senator Ogden called from the President's table the Conference Committee Report on HB 1362. The Conference Committee Report was filed with the Senate on Thursday, May 20, 1999.

On motion of Senator Ogden, the Conference Committee Report was adopted by a viva voce vote.

CONFERENCE COMMITTEE ON HOUSE BILL 143

Senator West called from the President's table, for consideration at this time, the request of the House for a conference committee to adjust the differences between the two Houses on HB 143 and moved that the request be granted.

The motion prevailed.

The Presiding Officer asked if there were any motions to instruct the conference committee on HB 143 before appointment.

There were no motions offered.

Accordingly, the Presiding Officer announced the appointment of the following conferees on the part of the Senate on the bill: Senators West, Chair; Madla, Ellis, Moncrief, and Cain.

SENATE RULE 11.13 SUSPENDED

On motion of Senator Brown and by unanimous consent, Senate Rule 11.13, which states that no Senate committee or conference committee may meet while the Senate is meeting, was suspended to grant the conference committee on SB 370 permission to meet.

MESSAGE FROM THE HOUSE

HOUSE CHAMBER

Austin, Texas

May 29, 1999

The Honorable President of the Senate

Senate Chamber

Austin, Texas

Mr. President:

I am directed by the House to inform the Senate that the House has taken the following action:

THE HOUSE HAS PASSED THE FOLLOWING MEASURES:

HCR 106, Granting Anh N. Pham permission to sue the state and the Mental Health and Mental Retardation Authority of Harris County.

HCR 249, Memorializing the U.S. Congress and urging the president, in considering Social Security reform legislation, to refrain from the inclusion of mandatory coverage for employees of previously noncovered state and local governments.

HCR 311, Commending Oklahoma State Senator Larry Dickerson and wishing him well.

HCR 312, Honoring Paul Koeltzow for his contributions to public education.

HCR 313, Instructing the enrolling clerk of the house to make a technical correction in HB 2022.

SCR 79, Directing certain state agencies to lead an inquiry into youth violence in the State of Texas.

(Amended)

THE HOUSE HAS GRANTED THE REQUEST OF THE SENATE FOR THE APPOINTMENT OF A CONFERENCE COMMITTEE ON THE FOLLOWING MEASURES:

SB 705

House Conferees: Swinford - Chair/McReynolds/Telford/Turner, Bob/Wohlgemuth

THE HOUSE HAS ADOPTED THE FOLLOWING CONFERENCE COMMITTEE REPORTS:

HB 597 (Viva-voce vote)

HB 713 (142 ayes, 2 nays, 1 present, not voting)

HB 819 (Viva-voce vote)

HB 869 (Viva-voce vote)

HB 1291 (Viva-voce vote)

HB 2130 (Viva-voce vote)

HB 2145 (Viva-voce vote)

HB 2224 (Viva-voce vote)

HB 2611 (Viva-voce vote)

HB 3693 (143 ayes, 0 nays, 1 present, not voting)

HB 3757 (Viva-voce vote)

HB 3778 (Viva-voce vote)

HB 3799 (140 ayes, 0 nays, 1 present, not voting)

SB 46 (Viva-voce vote)

SB 1237 (Viva-voce vote)

SB 1423 (Viva-voce vote)

SB 1525 (Viva-voce vote)

THE HOUSE HAS DISCHARGED ITS CONFEREES AND CONCURRED IN SENATE AMENDMENTS TO THE FOLLOWING MEASURES:

HB 1984 (Viva-voce vote)

Respectfully,

/s/Sharon Carter, Chief Clerk

House of Representatives

HOUSE BILL 1799 RECOMMITTED

On motion of Senator Armbrister and by unanimous consent, the Conference Committee Report on HB 1799 was recommitted to the conference committee.

(Senator Armbrister in Chair)

BILLS AND RESOLUTIONS SIGNED

The Presiding Officer announced the signing of the following enrolled bills and resolutions in the presence of the Senate after the captions had been read:

SB 294, SB 469, SB 539, SB 609, SB 639, SB 673, SB 724, SB 773, SB 983, SB 984, SB 1031, SB 1131, SB 1133, SB 1232, SCR 24, SCR 60, SCR 61.

MOTION TO ADJOURN

On motion of Senator Truan and by unanimous consent, the Senate at 3:40 p.m. agreed to adjourn, upon receipt of Messages from the House, Conference Committee Reports, and the signing of bills and resolutions, in memory of Roy P. Benavidez of El Campo and the Honorable William T. Moore of Bryan, until 2:00 p.m. tomorrow.

MESSAGE FROM THE HOUSE

HOUSE CHAMBER

Austin, Texas

May 29, 1999

The Honorable President of the Senate

Senate Chamber

Austin, Texas

Mr. President:

I am directed by the House to inform the Senate that the House has taken the following action:

THE HOUSE HAS PASSED THE FOLLOWING MEASURES:

SCR 44, Recognizing March 22, 1999, as La Mafia Day at the Capitol.

SCR 87, In memory of Kevin Phillip Roberts.

THE HOUSE HAS ADOPTED THE FOLLOWING CONFERENCE COMMITTEE REPORTS:

HB 211 (141 ayes, 0 nays, 1 present, not voting)

HB 1104 (144 ayes, 0 nays, 1 present, not voting)

HB 1223 (141 ayes, 0 nays, 1 present, not voting)

HB 1444 (143 ayes, 0 nays, 1 present, not voting)

HB 1603 (Viva-voce vote)

HB 1939 (Viva-voce vote)

HB 2147 (Viva-voce vote)

HB 2175 (Viva-voce vote)

HB 3079 (Viva-voce vote)

HB 3470 (136 ayes, 2 nays, 1 present, not voting)

HB 3697 (143 ayes, 0 nays, 1 present, not voting)

SB 371 (Viva-voce vote)

THE HOUSE HAS RECOMMITTED THE FOLLOWING MEASURES TO CONFERENCE COMMITTEE:

HB 1799 (Viva-voce vote)

Respectfully,

/s/Sharon Carter, Chief Clerk

House of Representatives

BILLS AND RESOLUTIONS SIGNED

The Presiding Officer announced the signing of the following enrolled bills and resolutions in the presence of the Senate after the captions had been read:

SB 496, SB 510, SB 542, SB 581, SB 751, SB 777, SB 932, SB 1775, SB 1804.

CONFERENCE COMMITTEE REPORT ON

HOUSE BILL 3697

Senator Sibley submitted the following Conference Committee Report:

Austin, Texas

May 26, 1999

Honorable Rick Perry

President of the Senate

Honorable James E. "Pete" Laney

Speaker of the House of Representatives

Sirs:

We, Your Conference Committee, appointed to adjust the differences between the Senate and the House of Representatives on HB 3697 have met and had the same

under consideration, and beg to report it back with the recommendation that it do pass.

SIBLEY SIEBERT

FRASER BRIMER

ARMBRISTER EILAND

CAIN BAILEY

RITTER

On the part of the Senate On the part of the House

The Conference Committee Report was filed with the Secretary of the Senate on Friday, May 28, 1999.

CONFERENCE COMMITTEE REPORT ON

HOUSE BILL 826

Senator Wentworth submitted the following Conference Committee Report:

Austin, Texas

May 29, 1999

Honorable Rick Perry

President of the Senate

Honorable James E. "Pete" Laney

Speaker of the House of Representatives

Sirs:

We, Your Conference Committee, appointed to adjust the differences between the Senate and the House of Representatives on HB 826 have had the same under consideration, and beg to report it back with the recommendation that it do pass.

WENTWORTH GREENBERG

WEST WOLENS

RATLIFF LONGORIA

CAIN

HARRIS

On the part of the Senate On the part of the House

The Conference Committee Report was filed with the Secretary of the Senate.

CONFERENCE COMMITTEE REPORT ON

SENATE BILL 1230

Senator Wentworth submitted the following Conference Committee Report:

Austin, Texas

May 27, 1999

Honorable Rick Perry

President of the Senate

Honorable James E. "Pete" Laney

Speaker of the House of Representatives

Sirs:

We, Your Conference Committee, appointed to adjust the differences between the Senate and the House of Representatives on SB 1230 have had the same under

consideration, and beg to report it back with the recommendation that it do pass in the form and text hereto attached.

WENTWORTH DESHOTEL

MADLA HINOJOSA

BROWN JIM SOLIS

HARRIS TILLERY

ELLIS THOMPSON

On the part of the Senate On the part of the House

A BILL TO BE ENTITLED

AN ACT

relating to the procedures governing the prosecution and administration of misdemeanor offenses in the jurisdiction of the justice and municipal courts.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Article 2.07, Code of Criminal Procedure, is amended by adding Subsection (g) to read as follows:

(g) An attorney appointed under Subsection (a) to perform the duties of the office of an attorney for the state in a justice or municipal court may be paid a reasonable fee for performing those duties.

SECTION 2. Article 4.12, Code of Criminal Procedure, is amended to read as follows:

Art. 4.12. MISDEMEANOR CASES; PRECINCT IN WHICH DEFENDANT TO BE TRIED IN JUSTICE COURT. (a) Except as otherwise provided by this article, a [A ] misdemeanor case to be tried in justice court shall be tried:

(1) in the precinct in which the offense was committed;

(2) in the precinct[, or ] in which the defendant or any of the defendants reside; or

(3) [, or, ] with the written consent of the state [State ] and each defendant or the defendant's [his ] attorney, in any other precinct within the county.

(b) In [; provided that in ] any misdemeanor case in which the offense was committed in a precinct where there is no qualified justice [precinct ] court, then trial shall be held:

(1) [had ] in the next adjacent precinct in the same county which has [may have ] a duly qualified justice [precinct ] court; or

(2) [, or ] in the precinct in which the defendant may reside.

(c) In[; provided that in ] any [such ] misdemeanor case in which each justice [, upon disqualification for any reason of all justices ] of the peace in the precinct where the offense was committed is disqualified for any reason, such case may be tried in the next adjoining precinct in the same county[, ] having a duly qualified justice of the peace.

SECTION 3. Article 43.09(k), Code of Criminal Procedure, is amended to read as follows:

(k) A defendant is considered to have discharged $100 [$50 ] of fines or costs for each eight hours of community service performed under Subsection (f) of this article.

SECTION 4. Article 44.181(a), Code of Criminal Procedure, is amended to read as follows:

(a) A court conducting a trial de novo based on an appeal from a justice or municipal court may [not ] dismiss the case because of a defect in the complaint only if the defendant objected to the defect before the trial began in the justice or municipal court.

SECTION 5. The heading to Chapter 45, Code of Criminal Procedure, is amended to read as follows:

CHAPTER FORTY-FIVE. JUSTICE AND

MUNICIPAL [CORPORATION ] COURTS

SECTION 6. Chapter 45, Code of Criminal Procedure, is amended by adding a new Subchapter A to read as follows:

SUBCHAPTER A. GENERAL PROVISIONS

Art. 45.001. OBJECTIVES OF CHAPTER. The purpose of this chapter is to establish procedures for processing cases that come within the criminal jurisdiction of the justice courts and municipal courts. This chapter is intended and shall be construed to achieve the following objectives:

(1) to provide fair notice to a person appearing in a criminal proceeding before a justice or municipal court and a meaningful opportunity for that person to be heard;

(2) to ensure appropriate dignity in court procedure without undue formalism;

(3) to promote adherence to rules with sufficient flexibility to serve the ends of justice; and

(4) to process cases without unnecessary expense or delay.

Art. 45.002. APPLICATION OF CHAPTER. Criminal proceedings in the justice and municipal courts shall be conducted in accordance with this chapter, including any other rules of procedure specifically made applicable to those proceedings by this chapter. If this chapter does not provide a rule of procedure governing any aspect of a case, the justice or judge shall apply the other general provisions of this code to the extent necessary to achieve the objectives of this chapter.

Art. 45.003. DEFINITION FOR CERTAIN PROSECUTIONS. For purposes of dismissing a charge under Section 502.407 or 548.605, Transportation Code, "day" does not include Saturday, Sunday, or a legal holiday.

SECTION 7. The articles of Chapter 45, Code of Criminal Procedure, added or redesignated by this Act as Articles 45.011 through 45.053, Code of Criminal Procedure, are designated as Subchapter B of Chapter 45, Code of Criminal Procedure, and a heading is added to that subchapter to read as follows:

SUBCHAPTER B. PROCEDURES FOR

JUSTICE AND MUNICIPAL COURTS

SECTION 8. Article 45.38, Code of Criminal Procedure, is redesignated as Article 45.011 and amended to read as follows:

Art. 45.011 [45.38 ]. RULES OF EVIDENCE. The rules of evidence that [which ] govern the trials of criminal actions in the district court [shall ] apply to a criminal proceeding [such actions ] in a justice or municipal court [courts ].

SECTION 9. Article 45.021, Code of Criminal Procedure, is redesignated as Article 45.012 and amended to read as follows:

Art. 45.012 [45.021 ]. ELECTRONICALLY CREATED RECORDS. (a) Notwithstanding any other provision of law, a document that is issued or maintained by a justice or municipal court or a notice or a citation issued by a law enforcement officer may be created by electronic means, including optical imaging, optical disk, or other electronic reproduction technique that does not permit changes, additions, or deletions to the originally created document.

(b) The court may use electronic means to:

(1) produce a document required by law to be written; [or ]

(2) record an instrument, paper, or notice that is permitted or required by law to be recorded or filed; or

(3) maintain a docket.

(c) The court shall maintain original documents as provided by law.

(d) An electronically recorded judgment has the same force and effect as a written signed judgment.

(e) A record created by electronic means is an original record or a certification of the original record.

(f) [(e) ] A printed copy of an optical image of the original record printed from an optical disk system is an accurate copy of the original record.

(g) A justice or municipal court shall have a court seal, the impression of which must be attached to all papers issued out of the court except subpoenas, and which must be used to authenticate the official acts of the clerk and of the recorder. A court seal may be created by electronic means, including optical imaging, optical disk, or other electronic reproduction technique that does not permit changes, additions, or deletions to an original document created by the same type of system.

SECTION 10. Subchapter B, Chapter 45, Code of Criminal Procedure, as designated by this Act, is amended by adding Article 45.013 to read as follows:

Art. 45.013. FILING WITH CLERK BY MAIL. (a) Notwithstanding any other law, for the purposes of this chapter a document is considered timely filed with the clerk of a court if:

(1) the document is deposited with the United States Postal Service in a first class postage prepaid envelope properly addressed to the clerk on or before the date the document is required to be filed with the clerk; and

(2) the clerk receives the document not later than the 10th day after the date the document is required to be filed with the clerk.

(b) A legible postmark affixed by the United States Postal Service is prima facie evidence of the date the document is deposited with the United States Postal Service.

(c) In this article, "day" does not include Saturday, Sunday, or a legal holiday.

SECTION 11. Article 45.18, Code of Criminal Procedure, is redesignated as Article 45.014 and amended to read as follows:

Art. 45.014 [45.18 ]. WARRANT OF ARREST [SHALL ISSUE ]. (a) When a sworn complaint or affidavit based on probable cause has been filed before the justice or municipal court [the requirements of the preceding Article have been complied with ], the justice or judge may [shall ] issue a warrant for the arrest of the accused and deliver the same to the proper officer to be executed.

(b) The warrant is sufficient if:

(1) it is issued in the name of "The State of Texas";

(2) it is directed to the proper peace officer or some other person specifically named in the warrant;

(3) it includes a command that the body of the accused be taken, and brought before the authority issuing the warrant, at the time and place stated in the warrant;

(4) it states the name of the person whose arrest is ordered, if known, or if not known, it describes the person as in the complaint;

(5) it states that the person is accused of some offense against the laws of this state, naming the offense; and

(6) it is signed by the justice or judge, naming the office of the justice or judge in the body of the warrant or in connection with the signature of the justice or judge.

(c) Chapter 15 applies to a warrant of arrest issued under this article, except as inconsistent or in conflict with this chapter.

SECTION 12. Article 45.43, Code of Criminal Procedure, is redesignated as Article 45.015 and amended to read as follows:

Art. 45.015 [45.43 ]. DEFENDANT PLACED IN JAIL. Whenever, by the provisions of this title, the peace officer is authorized to retain a defendant in custody, the peace officer [he ] may place the defendant [him ] in jail in accordance with this code or other law [or any other place where he can be safely kept ].

SECTION 13. Article 45.41, Code of Criminal Procedure, is redesignated as Article 45.016 and amended to read as follows:

Art. 45.016 [45.41 ]. [DEFENDANT TO GIVE ] BAIL. The [In case of adjournment, the ] justice or judge may [shall ] require the defendant to give bail to secure the defendant's [for his ] appearance in accordance with this code. If the defendant [he ] fails to give bail, the defendant [he ] may be held in custody.

SECTION 14. Article 45.13, Code of Criminal Procedure, is redesignated as Article 45.017 and amended to read as follows:

Art. 45.017 [45.13 ]. CRIMINAL DOCKET. (a) The justice or judge of each court, or, if directed by the justice or judge, the clerk of the court, [Each justice of the peace and each municipal court judge ] shall keep a docket containing the following information [in which he shall enter the proceedings in each trial had before him, which docket shall show ]:

(1) the [1. The ] style and file number of each criminal [the ] action;

(2) the [2. The ] nature of the offense charged;

(3) the plea offered by the defendant and the date the plea was entered;

(4) the [3. The ] date the warrant, if any, was issued and the return made thereon;

(5) the date [4. The time when ] the examination or trial was held [had ], and if a trial was held, whether it was by a jury or by the justice or judge [himself ];

(6) the [5. The ] verdict of the jury, if any, and the date of the verdict;

(7) the [6. The ] judgment and sentence of the court, and the date each was given;

(8) the motion [7. Motion ] for new trial, if any, and the decision thereon; and

(9) whether [8. If ] an appeal was taken and the date of that action[; and

[9. The time when, and the manner in which, the judgment and sentence was enforced ].

(b) The information in the docket may be processed and stored by the use of electronic data processing equipment, at the discretion of the justice of the peace or the municipal court judge.

SECTION 15. Subchapter B, Chapter 45, Code of Criminal Procedure, as designated by this Act, is amended by adding Article 45.018 to read as follows:

Art. 45.018. COMPLAINT. (a) For purposes of this chapter, a complaint is a sworn allegation charging the accused with the commission of an offense.

(b) A defendant is entitled to notice of a complaint against the defendant not later than the day before the date of any proceeding in the prosecution of the defendant under the complaint. The defendant may waive the right to notice granted by this subsection.

SECTION 16. Article 45.17, Code of Criminal Procedure, is redesignated as Article 45.019 and amended to read as follows:

Art. 45.019 [45.17 ]. REQUISITES OF [WHAT ] COMPLAINT [MUST STATE ]. (a) A [Such ] complaint is sufficient, without regard to its form, if it substantially satisfies the following requisites [shall state ]:

(1) it must be in writing;

(2) it must commence "In the name and by the authority of the State of Texas";

(3) it must state the [1. The ] name of the accused, if known, or [and ] if unknown, must include a reasonably definite description of the accused [shall describe him as accurately as practicable ];

(4) it must show that the accused has committed an offense against the law of this state, or state that the affiant has good reason to believe and does believe that the accused has committed an offense against the law of this state [2. The offense with which he is charged, in plain and intelligible words ];

(5) it must state the date the offense was committed as definitely as the affiant is able to provide;

(6) it must bear the signature or mark of the affiant; and

(7) it must conclude with the words "Against the peace and dignity of the State" and, if the offense charged is an offense only under a municipal ordinance, it may also conclude with the words "Contrary to the said ordinance".

(b) A complaint filed in justice court must allege that [3. That ] the offense was committed in the county in which the complaint is made[; and

[4. It must show, from the date of the offense stated therein, that the offense is not barred by limitation ].

(c) A complaint filed in municipal court must allege that the offense was committed in the territorial limits of the municipality in which the complaint is made.

(d) A complaint may be sworn to before any officer authorized to administer oaths.

(e) A complaint in municipal court may be sworn to before:

(1) the municipal judge;

(2) the clerk of the court or a deputy clerk;

(3) the city secretary; or

(4) the city attorney or a deputy city attorney.

(f) If the defendant does not object to a defect, error, or irregularity of form or substance in a charging instrument before the date on which the trial on the merits commences, the defendant waives and forfeits the right to object to the defect, error, or irregularity. Nothing in this article prohibits a trial court from requiring that an objection to a charging instrument be made at an earlier time.

SECTION 17. Article 45.37, Code of Criminal Procedure, is redesignated as Article 45.020 and amended to read as follows:

Art. 45.020 [45.37 ]. APPEARANCE [MAY APPEAR ] BY COUNSEL. (a) The defendant has a right to appear by counsel as in all other cases.

(b) Not more than one counsel shall conduct either the prosecution or defense. State's counsel may open and conclude the argument.

SECTION 18. Article 45.33, Code of Criminal Procedure, is redesignated as Article 45.021 and amended to read as follows:

Art. 45.021 [45.33 ]. PLEADINGS [PLEADING IS ORAL ]. All pleading of the defendant in justice or municipal court may be oral or in writing as the court [defendant ] may direct [elect ]. [The justice shall note upon his docket the plea offered. ]

SECTION 19. Article 45.331, Code of Criminal Procedure, is redesignated as Article 45.0215 and amended to read as follows:

Art. 45.0215 [45.331 ]. PLEA BY MINOR AND APPEARANCE OF PARENT. (a) If a defendant is younger than 17 years of age and has not had the disabilities of minority removed, the judge or justice [court ]:

(1) must take the defendant's plea in open court; and

(2) shall issue a summons to compel the defendant's parent, guardian, or managing conservator to be present during:

(A) the taking of the defendant's plea; and

(B) all other proceedings relating to the case.

(b) If the court is unable to secure the appearance of the defendant's parent, guardian, or managing conservator by issuance of a summons, the court may, without the defendant's parent, guardian, or managing conservator present, take the defendant's plea and proceed against the defendant.

(c) If the defendant resides in a county other than the county in which the alleged offense occurred, the defendant may, with leave of the judge of the court of original jurisdiction [court ], enter the plea, including a plea under Article 45.052 [45.55 ], before a judge [justice ] in the county in which the defendant resides.

SECTION 20. Article 45.34, Code of Criminal Procedure, is redesignated as Article 45.022 and amended to read as follows:

Art. 45.022 [45.34 ]. PLEA OF GUILTY OR NOLO CONTENDERE. Proof as to the offense may be heard upon a plea of guilty or [and ] a plea of nolo contendere and the punishment assessed by the court [or jury ].

SECTION 21. Article 45.31, Code of Criminal Procedure, is redesignated as Article 45.023 and amended to read as follows:

Art. 45.023 [45.31 ]. DEFENDANT'S PLEA [DEFENDANT SHALL PLEAD ]. After the jury is impaneled, or after the defendant has waived trial by jury, the defendant may:

(1) plead guilty or not guilty;

(2) [or may ] enter a plea of nolo contendere;[, ] or

(3) enter the special plea of double jeopardy as described by Article 27.05 [named in the succeeding Article ].

SECTION 22. Article 45.35, Code of Criminal Procedure, is redesignated as Article 45.024 and amended to read as follows:

Art. 45.024 [45.35 ]. DEFENDANT'S REFUSAL [IF DEFENDANT REFUSES ] TO PLEAD. The justice or judge shall enter a plea of not guilty if the defendant refuses to plead.

SECTION 23. Article 45.24, Code of Criminal Procedure, is redesignated as Article 45.025 and amended to read as follows:

Art. 45.025 [45.24 ]. DEFENDANT MAY WAIVE JURY. The accused may waive a trial by jury in writing. If the defendant waives a trial by jury[; and in such case ], the justice or judge shall hear and determine the cause without a jury.

SECTION 24. Article 45.251, Code of Criminal Procedure, is redesignated as Article 45.026 and amended to read as follows:

Art. 45.026 [45.251 ]. [DEMAND FOR ] JURY TRIAL [IN JUSTICE COURT OR MUNICIPAL COURT ]; FAILURE TO APPEAR. (a) A justice or municipal court may order a party who does not waive [demands ] a jury trial in a justice or municipal court and who fails to appear for the trial to pay the costs incurred for impaneling the jury.

(b) The justice or municipal court may release a party from the obligation to pay costs under this section for good cause.

(c) An order issued by a justice or municipal court under this section may be enforced by contempt as prescribed by Section 21.002(c), Government Code.

SECTION 25. Article 45.25, Code of Criminal Procedure, is redesignated as Article 45.027 and amended to read as follows:

Art. 45.027 [45.25 ]. JURY SUMMONED. (a) If the accused does not waive a trial by jury, the justice or judge shall issue a writ commanding the proper officer to summon [forthwith ] a venire from which six qualified persons shall be selected to serve as jurors in the case.

(b) The [Said ] jurors when so summoned shall remain in attendance as jurors in all cases that may come up for hearing until discharged by the court.

(c) Any person so summoned who fails to attend may be fined an amount not to exceed [exceeding ] $100 for contempt.

SECTION 26. Article 45.29, Code of Criminal Procedure, is redesignated as Article 45.028 and amended to read as follows:

Art. 45.028 [45.29 ]. OTHER JURORS SUMMONED. If, from challenges or any other cause, a sufficient number of jurors are not in attendance, the justice or judge shall order the proper officer to summon a sufficient number of qualified persons to form the jury.

SECTION 27. Article 45.28, Code of Criminal Procedure, is redesignated as Article 45.029 and amended to read as follows:

Art. 45.029 [45.28 ]. PEREMPTORY CHALLENGES [CHALLENGE OF JURORS ]. In all jury trials in a [the ] justice or municipal court, the state [State ] and each defendant in the case is [shall be ] entitled to three peremptory challenges[, and also to any number of challenges for cause, which cause shall be judged of by the justice ].

SECTION 28. Article 45.30, Code of Criminal Procedure, is redesignated as Article 45.030 and amended to read as follows:

Art. 45.030 [45.30 ]. FORMATION OF [OATH TO ] JURY. The justice or judge shall form the jury and administer the appropriate [following ] oath in accordance with Chapter 35 [to the jury: "Each of you do solemnly swear that you will well and truly try the cause about to be submitted to you and a true verdict render therein, according to the law and the evidence, so help you God" ].

SECTION 29. Article 45.36, Code of Criminal Procedure, is redesignated as Article 45.031 and amended to read as follows:

Art. 45.031 [45.36 ]. COUNSEL FOR STATE NOT PRESENT [WITNESSES EXAMINED BY WHOM ]. If [The justice shall examine the witnesses if ] the state [State ] is not represented by counsel when the case is called for trial, the justice or judge may:

(1) postpone the trial to a date certain;

(2) appoint an attorney pro tem as provided by this code to represent the state; or

(3) proceed to trial.

SECTION 30. Article 45.031, Code of Criminal Procedure, is redesignated as Article 45.032 and amended to read as follows:

Art. 45.032 [45.031 ]. DIRECTED VERDICT. If, upon the trial of a case in a justice or municipal [corporation ] court, [there is a material variance between the allegations in the complaint and the proof offered by the state, or ] the state fails [has failed ] to prove a prima facie case of the offense alleged in the complaint, the defendant is entitled to a directed verdict of "not guilty." [guilty" as in any other criminal case. ]

SECTION 31. Subchapter B, Chapter 45, Code of Criminal Procedure, as designated by this Act, is amended by adding Article 45.033 to read as follows:

Art. 45.033. JURY CHARGE. The judge shall charge the jury. The charge may be made orally or in writing, except that the charge shall be made in writing if required by law.

SECTION 32. Article 45.39, Code of Criminal Procedure, is redesignated as Article 45.034 and amended to read as follows:

Art. 45.034 [45.39 ]. JURY KEPT TOGETHER. The jury shall retire in charge of an officer when the cause is submitted to them, and be kept together until they agree to a verdict, [or ] are discharged, or the court recesses.

SECTION 33. Article 45.40, Code of Criminal Procedure, is redesignated as Article 45.035 and amended to read as follows:

Art. 45.035 [45.40 ]. MISTRIAL. A jury shall be discharged if it fails to agree to a verdict after being kept together a reasonable time. If a jury is discharged because it fails to agree to a verdict, [there be time left on the same day, another jury may be impaneled to try the cause, or ] the justice or judge may [adjourn for not more than 30 days and again ] impanel another [a ] jury as soon as practicable to try such cause.

SECTION 34. Article 45.42, Code of Criminal Procedure, is redesignated as Article 45.036 and amended to read as follows:

Art. 45.036 [45.42 ]. VERDICT. (a) When the jury has agreed on [upon ] a verdict, the jury [it ] shall bring the verdict [same ] into court.

(b) The [; and the ] justice or judge shall see that the verdict [it ] is in proper form and shall [enter it upon his docket and ] render the proper judgment and sentence on the verdict [thereon ].

SECTION 35. Article 45.45, Code of Criminal Procedure, is redesignated as Article 45.037 and amended to read as follows:

Art. 45.037 [45.45 ]. MOTION FOR NEW TRIAL. A motion [An application ] for a new trial must be made within one day after the rendition of judgment and sentence, and not afterward [; and the execution of the judgment and sentence shall not be stayed until a new trial has been granted ].

SECTION 36. Article 45.44, Code of Criminal Procedure, is redesignated as Article 45.038 and amended to read as follows:

Art. 45.038 [45.44 ]. NEW TRIAL GRANTED. (a) Not later than the 10th day after the date that the judgment is entered, a [A ] justice or judge may, for good cause shown, grant the defendant a new trial, whenever the justice or judge [he ] considers that justice has not been done the defendant in the trial of the [such ] case.

(b) If a motion for a new trial is not granted before the 11th day after the date that the judgment is entered, the motion shall be considered denied.

SECTION 37. Article 45.46, Code of Criminal Procedure, is redesignated as Article 45.039 and amended to read as follows:

Art. 45.039 [45.46 ]. ONLY ONE NEW TRIAL GRANTED. Not more than one new trial shall be granted the defendant in the same case. When a new trial has been granted, the justice or judge shall proceed, as soon as practicable, to try the case again.

SECTION 38. Article 45.47, Code of Criminal Procedure, is redesignated as Article 45.040 and amended to read as follows:

Art. 45.040 [45.47 ]. STATE NOT ENTITLED TO NEW TRIAL. In no case shall the state [State ] be entitled to a new trial.

SECTION 39. Article 45.50, Code of Criminal Procedure, is redesignated as Article 45.041 and amended to read as follows:

Art. 45.041 [45.50 ]. [THE ] JUDGMENT. (a) The judgment and sentence, in case of conviction in a criminal action before a justice of the peace or municipal court judge, shall be that the defendant pay the amount of the fine and costs to the state.

(b) The justice or judge may direct the defendant:

(1) to pay:

(A) the entire fine and costs when sentence is pronounced; [or ]

(B) [(2) to pay ] the entire fine and costs at some later date; or

(C) [(3) to pay ] a specified portion of the fine and costs at designated intervals;

(2) if applicable, to make restitution to any victim of the offense in an amount not to exceed $500; and

(3) to satisfy any other sanction authorized by law.

(c) The justice or judge shall credit the defendant for time served in jail as provided by Article 42.03. The credit shall be applied to the amount of the fine and costs at the rate provided by Article 45.048.

(d) All judgments, sentences, and final orders of the justice or judge shall be rendered in open court.

SECTION 40. Article 45.10, Code of Criminal Procedure, is redesignated as Article 45.042 and amended to read as follows:

Art. 45.042 [45.10 ]. APPEAL. (a) Appeals from a justice or municipal court, including appeals from final judgments in bond forfeiture proceedings, shall be heard by the county court except in cases where the county court has no jurisdiction, in which counties such appeals shall be heard by the proper court.

(b) Unless the appeal is taken from a municipal court of record and the appeal is based on error reflected in the record, the trial shall be de novo [in the proper court. Said appeals shall be governed by the rules of practice and procedure for appeals from justice courts to the county court, as far as applicable ].

(c) In an appeal from the judgment and sentence of a justice or municipal court, if the defendant is in custody, the defendant is to be committed to jail unless the defendant gives bail.

SECTION 41. Subchapter B, Chapter 45, Code of Criminal Procedure, as designated by this Act, is amended by adding Article 45.0425 to read as follows:

Art. 45.0425. APPEAL BOND. (a) If the court from whose judgment and sentence the appeal is taken is in session, the court must approve the bail. The amount of a bail bond may not be less than two times the amount of the fine and costs adjudged against the defendant, payable to the State of Texas. The bail may not in any case be for a sum less than $50. If the appeal bond otherwise meets the requirements of this code, the court without requiring a court appearance by the defendant shall approve the appeal bond in the amount the court under Article 27.14(b) notified the defendant would be approved.

(b) An appeal bond shall recite that in the cause the defendant was convicted and has appealed and be conditioned that the defendant shall make the defendant's personal appearance before the court to which the appeal is taken instanter, if the court is in session, or, if the court is not in session, at its next regular term, stating the time and place of that session, and there remain from day to day and term to term, and answer in the cause in the court.

SECTION 42. Article 44.14, Code of Criminal Procedure, is redesignated as Article 45.0426 of Subchapter B, Chapter 45, Code of Criminal Procedure, as designated by this Act, and amended to read as follows:

Art. 45.0426 [44.14 ]. FILING BOND PERFECTS APPEAL. (a) When [In appeals from justice and municipal courts, when ] the appeal bond [provided for in the preceding Article ] has been filed with the justice or judge who tried the case not later than the 10th day after the date the judgment was entered, the appeal in such case shall be held to be perfected.

(b) If an appeal bond is not timely filed, the appellate [appeal ] court does not have jurisdiction over the case and shall remand the case to the justice or municipal court for execution of the sentence.

(c) An [No ] appeal may not [shall ] be dismissed because the defendant failed to give notice of appeal in open court. An appeal by the defendant or the state may not be dismissed on account of any defect in the transcript.

SECTION 43. Article 45.48, Code of Criminal Procedure, is redesignated as Article 45.043 and amended to read as follows:

Art. 45.043 [45.48 ]. EFFECT OF APPEAL. When a defendant files the appeal bond required by law with the justice or municipal court, all further proceedings [proceeding ] in the case in the justice or municipal court shall cease.

SECTION 44. Article 45.231, Code of Criminal Procedure, is redesignated as Article 45.044 and amended to read as follows:

Art. 45.044 [45.231 ]. FORFEITURE OF CASH BOND IN SATISFACTION OF FINE. (a) A justice or judge may enter a judgment of conviction and forfeit a cash bond posted by the defendant in satisfaction of the defendant's fine and cost if the defendant:

(1) has entered a written and signed plea of nolo contendere and a waiver of jury trial; and

(2) fails to appear according to the terms of the defendant's release.

(b) A justice or judge who enters a judgment of conviction and forfeiture under Subsection (a) of this article shall immediately notify the defendant in writing, by regular mail addressed to the defendant at the defendant's last known address, that:

(1) a judgment of conviction and forfeiture of bond was entered against the defendant on a date certain and the forfeiture satisfies the defendant's fine and costs in the case; and

(2) the defendant has a right to a new trial in the case if the defendant applies for the new trial not later than the 10th day after the date of judgment and forfeiture.

(c) Notwithstanding Article 45.037 [45.45 ] of this code, the defendant may file a motion [apply ] for a new trial within the period provided by Subsection (b) of this article, and the court shall grant the motion [application ] if the motion [application ] is made within that [the ] period. On the new trial, the court shall permit the defendant to withdraw the previously entered plea of nolo contendere and waiver of jury trial.

SECTION 45. Article 45.51, Code of Criminal Procedure, is redesignated as Article 45.045 and amended to read as follows:

Art. 45.045 [45.51 ]. CAPIAS PRO FINE. [(a) ] If the defendant is not in custody when the judgment is rendered or if the defendant fails to satisfy the judgment according to its terms, the court may order a capias pro fine issued for the defendant's [his ] arrest. The capias pro fine shall state the amount of the judgment and sentence, and command the appropriate peace officer [sheriff ] to bring the defendant before the court or place the defendant [him ] in jail until the defendant [he ] can be brought before the court.

[(b) If the defendant escapes from custody after judgment is rendered, a capias shall issue for his arrest and confinement until he is legally discharged. ]

SECTION 46. Article 45.52, Code of Criminal Procedure, is redesignated as Article 45.046 and amended to read as follows:

Art. 45.046 [45.52 ]. COMMITMENT [COLLECTION OF FINES ]. (a) When a judgment and sentence have been entered [rendered ] against a defendant [for a fine and costs ] and the defendant [he ] defaults in the discharge of the judgment [payment ], the judge [justice ] may order the defendant confined [him imprisoned ] in jail until discharged by law if the judge determines that:

(1) the defendant intentionally failed to make a good faith effort to discharge the judgment; or

(2) the defendant is not indigent.

(b) A certified copy of the judgment, sentence, and order is sufficient to authorize such confinement [imprisonment ].

[(b) The justice may order the fine and costs collected by execution against the defendant's property in the same manner as a judgment in a civil suit. ]

SECTION 47. Subchapter B, Chapter 45, Code of Criminal Procedure, as designated by this Act, is amended by adding Article 45.047 to read as follows:

Art. 45.047. CIVIL COLLECTION OF FINES AFTER JUDGMENT. If after a judgment and sentence is entered the defendant defaults in payment of a fine, the justice or judge may order the fine and costs collected by execution against the defendant's property in the same manner as a judgment in a civil suit.

SECTION 48. Article 45.53, Code of Criminal Procedure, is redesignated as Article 45.048 and amended to read as follows:

Art. 45.048 [45.53 ]. DISCHARGED FROM JAIL. A defendant placed in jail on account of failure to pay the fine and costs shall [can ] be discharged on habeas corpus by showing that the defendant:

(1) [1. That he ] is too poor to pay the fine and costs; or [and ]

(2) [2. That he ] has remained in jail a sufficient length of time to satisfy the fine and costs, at the rate of not less than $100 [$15 ] for each day or part of a day of jail time served.

SECTION 49. Articles 45.521 and 45.522, Code of Criminal Procedure, are redesignated as Articles 45.049 and 45.050 and amended to read as follows:

Art. 45.049 [45.521 ]. COMMUNITY SERVICE IN SATISFACTION OF FINE OR COSTS. (a) A justice or judge may require a defendant who fails to pay a previously assessed fine or costs, or who is determined by the court to have insufficient resources or income to pay a fine or costs, to discharge all or part of the fine or costs by performing community service. A defendant may discharge an obligation to perform community service under this article by paying at any time the fine and costs assessed.

(b) In the justice's or judge's order requiring a defendant to participate in community service work under this article, the justice or judge must specify[:

[(1) ] the number of hours the defendant is required to work[;

[(2) the entity or organization for which the defendant is required to work; and

[(3) the project on which the defendant is required to work ].

(c) The justice or judge may order the defendant to perform community service work under this article only for a governmental entity or a nonprofit organization that provides services to the general public that enhance social welfare and the general well-being of the community. A governmental entity or nonprofit organization that accepts a defendant under this article to perform community service must agree to supervise the defendant in the performance of the defendant's work and report on the defendant's work to the justice or judge who ordered the community service.

(d) A justice or judge may not order a defendant to perform more than 16 hours per week of community service under this article unless the justice or judge determines that requiring the defendant to work additional hours does not work a hardship on the defendant or the defendant's dependents.

(e) A defendant is considered to have discharged $100 [$50 ] of fines or costs for each eight hours of community service performed under this article.

(f) A sheriff, employee of a sheriff's department, county commissioner, county employee, county judge, justice of the peace, municipal court judge, or officer or employee of a political subdivision other than a county is not liable for damages arising from an act or failure to act in connection with manual labor performed by a defendant under this article if the act or failure to act:

(1) was performed pursuant to court order; and

(2) was not intentional, wilfully or wantonly negligent, or performed with conscious indifference or reckless disregard for the safety of others.

Art. 45.050 [45.522 ]. FAILURE TO PAY FINE; CONTEMPT: JUVENILES. (a) A justice court or municipal court may not order the confinement of a person who is a child for the purposes of Title 3, Family Code, for the failure to pay all or any part of a fine or costs imposed for the conviction of an offense punishable by fine only.

(b) If a person who is a child under Section 51.02, Family Code, [Section 51.03(a)(3), Family Code, and the procedures for the adjudication of a child for delinquent conduct apply to a child who ] fails to obey an order of a justice or municipal court under circumstances that would constitute contempt of court, the justice or municipal court has jurisdiction to:

(1) hold the child in contempt of the justice or municipal court order as provided by Section 52.027(h), Family Code; or

(2) refer the child to the appropriate juvenile court for delinquent conduct for contempt of the justice or municipal court order.

SECTION 50. Article 45.54, Code of Criminal Procedure, is redesignated as Article 45.051 and amended to read as follows:

Art. 45.051 [45.54 ]. SUSPENSION OF SENTENCE AND DEFERRAL OF FINAL DISPOSITION. (a) [(1) ] On a plea of guilty or nolo contendere by a defendant or on a finding of guilt in a misdemeanor case punishable by fine only and payment of all court costs, the justice may defer further proceedings without entering an adjudication of guilt and place the defendant on probation for a period not to exceed 180 days. [This article does not apply to a misdemeanor case disposed of by Section 143A, Uniform Act Regulating Traffic on Highways (Article 6701d, Vernon's Texas Civil Statutes), or a serious traffic violation as defined in Section 3(26), Texas Commercial Driver's License Act (Article 6687b-2, Revised Statutes).

[(2) During the deferral period, the justice shall require the defendant to successfully complete a Central Education Agency-approved driving safety course, if the offense alleged is an offense involving the operation of a motor vehicle, other than a commercial motor vehicle, as defined in Subdivision (6), Section 3, Texas Commercial Driver's License Act (Article 6687b-2, Revised Statutes), and the defendant:

[(A) has completed an approved driving safety course within the preceding 12 months; or

[(B) is a first-time offender who elects deferred adjudication. ]

(b) [(3) ] During the [said ] deferral period, the justice may require the defendant to:

(1) [(a) ] post a bond in the amount of the fine assessed to secure payment of the fine;

(2) [(b) ] pay restitution to the victim of the offense in an amount not to exceed the fine assessed;

(3) [(c) ] submit to professional counseling;

(4) submit to diagnostic testing for alcohol or a controlled substance or drug;

(5) submit to a psychosocial assessment;

(6) participate in an alcohol or drug abuse treatment or education program;

(7) pay the costs of any diagnostic testing, psychosocial assessment, or participation in a treatment or education program either directly or through the court as court costs; and

(8) [(d) ] comply with any other reasonable condition[; and

[(e) require the defendant to successfully complete a Central Education Agency approved driving safety course, if:

[(1) the offense alleged is an offense involving the operation of a motor vehicle, other than a commercial motor vehicle, as defined in Subdivision (6),

Section 3, Texas Commercial Driver's License Act (Article 6687b-2, Revised Statutes); and

[(2) the defendant has not completed an approved driving safety course within the preceding 12 months ].

(c) [(4) ] At the conclusion of the deferral period, if the defendant presents satisfactory evidence that he has complied with the requirements imposed, the justice shall dismiss the complaint, and it shall be clearly noted in the docket that the complaint is dismissed and that there is not a final conviction. Otherwise, the justice may proceed with an adjudication of guilt. After an adjudication of guilt, the justice may reduce the fine assessed or may then impose the fine assessed, less any portion of the assessed fine that has been paid. If the complaint is dismissed, a special expense not to exceed the amount of the fine assessed may be imposed.

(d) [(5) ] If at the conclusion of the deferral period the defendant does not present satisfactory evidence that the defendant complied with the requirements imposed, the justice may impose the fine assessed or impose a lesser fine. The imposition of the fine or lesser fine constitutes a final conviction of the defendant.

(e) [(6) ] Records relating to a complaint dismissed as provided by this article may be expunged under Article 55.01 of this code. If a complaint is dismissed under this article, there is not a final conviction and the complaint may not be used against the person for any purpose.

SECTION 51. Subchapter B, Chapter 45, Code of Criminal Procedure, as designated by this Act, is amended by adding Article 45.0511 to read as follows:

Art. 45.0511. DEFERRED DISPOSITION PROCEDURES APPLICABLE TO TRAFFIC OFFENSES. (a) This article applies to an alleged offense involving the operation of a motor vehicle other than a commercial motor vehicle, as defined by Section 522.003, Transportation Code, and supplements Article 45.051.

(b) During the deferral period under Article 45.051, the justice:

(1) shall require the defendant to successfully complete a driving safety course approved by the Texas Education Agency if the defendant elects deferred disposition and the defendant has not completed an approved driving safety course or motorcycle operator training course, as appropriate, within the preceding 12 months; and

(2) may require the defendant to successfully complete a driving safety course approved by the Texas Education Agency if the defendant has completed an approved driving safety course within the preceding 12 months.

(c) Subsection (b)(1) applies only if:

(1) the person enters a plea in person or in writing of no contest or guilty and, before the answer date on the notice to appear:

(A) presents in person to the court an oral or written request to take a course; or

(B) sends to the court by certified mail, return receipt requested, postmarked on or before the answer date on the notice to appear, a written request to take a course;

(2) the court enters judgment on the person's plea of no contest or guilty at the time the plea is made but defers imposition of the judgment for 180 days;

(3) the person has a Texas driver's license or permit;

(4) the person is charged with an offense to which this article applies, other than speeding 25 miles per hour or more over the posted speed limit;

(5) the person provides evidence of financial responsibility as required by Chapter 601, Transportation Code;

(6) the defendant's driving record as maintained by the Texas Department of Public Safety shows the defendant has not completed an approved driving safety course or motorcycle operator training course, as appropriate, within the 12 months preceding the date of the offense; and

(7) the defendant files an affidavit with the court stating that the person is not taking a course under this section and has not completed a course that is not shown on the person's driving record within the 12 months preceding the date of the offense.

(d) Notwithstanding Subsection (c)(1), on a written motion submitted to the court before the final disposition of the case, the court may grant a request to take a driving safety course or a motorcycle operator training course under this article.

(e) A request to take a driving safety course made at or before the time and at the place at which a person is required to appear in court is an appearance in compliance with the person's promise to appear.

(f) The court may require a person requesting a driving safety course to pay a fee set by the court at an amount of not more than $10, including any other fee authorized by statute or municipal ordinance, to cover the cost of administering this article.

(g) A person who requests but does not take a course is not entitled to a refund of the fee.

(h) Fees collected by a municipal court shall be deposited in the municipal treasury. Fees collected by another court shall be deposited in the county treasury of the county in which the court is located.

(i) If a person requesting a driving safety course fails to furnish evidence of the successful completion of the course to the court, the court shall:

(1) notify the person in writing, mailed to the address appearing on the notice to appear, of that failure; and

(2) require the person to appear at the time and place stated in the notice to show cause why the evidence was not timely submitted to the court.

(j) A person who fails to appear at the time and place stated in the notice commits a misdemeanor punishable as provided by Section 543.009, Transportation Code.

(k) On a person's showing of good cause for failure to furnish evidence to the court, the court may allow an extension of time during which the person may present a uniform certificate of course completion as evidence that the person successfully completed the driving safety course.

(l) When a person complies with Subsection (b) and a uniform certificate of course completion is accepted by the court, the court shall:

(1) remove the judgment and dismiss the charge;

(2) report the fact that the person successfully completed a driving safety course and the date of completion to the Texas Department of Public Safety for inclusion in the person's driving record; and

(3) state in this report whether the course was taken under the procedure provided by this article to provide information necessary to determine eligibility to take a subsequent course under Subsection (b).

(m) The court may dismiss only one charge for each completion of a course.

(n) A charge that is dismissed under this article may not be part of a person's driving record or used for any purpose.

(o) An insurer delivering or issuing for delivery a motor vehicle insurance policy in this state may not cancel or increase the premium charged an insured under the policy because the insured completed a driving safety course or had a charge dismissed under this article.

(p) The court shall advise a person charged with a misdemeanor under Subtitle C, Title 7, Transportation Code, committed while operating a motor vehicle of the

person's right under this article to successfully complete a driving safety course or, if the offense was committed while operating a motorcycle, a motorcycle operator training course. The right to complete a course does not apply to a person charged with a violation of Section 545.066, 545.401, 545.421, 550.022, or 550.023, Transportation Code, or serious traffic violation as defined by Section 522.003, Transportation Code.

SECTION 52. Article 45.55, Code of Criminal Procedure, is redesignated as Article 45.052 to read as follows:

Art. 45.052 [45.55 ]. DISMISSAL OF MISDEMEANOR CHARGE ON COMPLETION OF TEEN COURT PROGRAM. (a) A justice or municipal court may defer proceedings against a defendant who is under the age of 18 or enrolled full time in an accredited secondary school in a program leading toward a high school diploma for 90 days if the defendant:

(1) is charged with a misdemeanor punishable by fine only or a violation of a penal ordinance of a political subdivision, including a traffic offense punishable by fine only;

(2) pleads nolo contendere or guilty to the offense in open court with the defendant's parent, guardian, or managing conservator present;

(3) presents to the court an oral or written request to attend a teen court program; and

(4) has not successfully completed a teen court program in the two years preceding the date that the alleged offense occurred.

(b) The teen court program must be approved by the court.

(c) The justice or municipal court shall dismiss the charge at the conclusion of the deferral period if the defendant presents satisfactory evidence that the defendant has successfully completed the teen court program.

(d) A charge dismissed under this article may not be part of the defendant's criminal record or driving record or used for any purpose. However, if the charge was for a traffic offense, the court shall report to the Department of Public Safety that the defendant successfully completed the teen court program and the date of completion for inclusion in the defendant's driving record.

(e) The justice or municipal court may require a person who requests a teen court program to pay a fee not to exceed $10 that is set by the court to cover the costs of administering this article. Fees collected by a municipal court shall be deposited in the municipal treasury. Fees collected by a justice court shall be deposited in the county treasury of the county in which the court is located. A person who requests a teen court program and fails to complete the program is not entitled to a refund of the fee.

(f) A court may transfer a case in which proceedings have been deferred under this section to a court in a contiguous county if the court to which the case is transferred consents. A case may not be transferred unless it is within the jurisdiction of the court to which it is transferred.

(g) In addition to the fee authorized by Subsection (e) of this article, the court may require a child who requests a teen court program to pay a $10 fee to cover the cost to the teen court for performing its duties under this article. The court shall pay the fee to the teen court program, and the teen court program must account to the court for the receipt and disbursal of the fee. A child who pays a fee under this subsection is not entitled to a refund of the fee, regardless of whether the child successfully completes the teen court program.

(h) A justice or municipal court may exempt a defendant for whom proceedings are deferred under this article from the requirement to pay a court cost or fee that is imposed by another statute.

SECTION 53. Article 45.56, Code of Criminal Procedure, is redesignated as Article 45.053 to read as follows:

Art. 45.053 [45.56 ]. DISMISSAL OF MISDEMEANOR CHARGE ON COMMITMENT OF CHEMICALLY DEPENDENT PERSON. (a) On a plea of guilty or nolo contendere by a defendant or on a finding of guilt in a misdemeanor case punishable by a fine only, a justice or municipal court may defer further proceedings for 90 days without entering an adjudication of guilt if:

(1) the court finds that the offense resulted from or was related to the defendant's chemical dependency; and

(2) an application for court-ordered treatment of the defendant is filed in accordance with Chapter 462, Health and Safety Code.

(b) At the end of the deferral period, the justice or municipal court shall dismiss the charge if satisfactory evidence is presented that the defendant was committed for and completed court-ordered treatment in accordance with Chapter 462, Health and Safety Code, and it shall be clearly noted in the docket that the complaint is dismissed and that there is not a final conviction.

(c) If at the conclusion of the deferral period satisfactory evidence that the defendant was committed for and completed court-ordered treatment in accordance with Chapter 462, Health and Safety Code, is not presented, the justice or municipal court may impose the fine assessed or impose a lesser fine. The imposition of a fine constitutes a final conviction of the defendant.

(d) Records relating to a complaint dismissed under this article may be expunged under Article 55.01 of this code. If a complaint is dismissed under this article, there is not a final conviction and the complaint may not be used against the person for any purpose.

SECTION 54. Article 45.101, as added by this Act, and Articles 45.102 and 45.103, as redesignated by this Act, are designated as Subchapter C of Chapter 45, Code of Criminal Procedure, and a heading is added to that subchapter to read as follows:

SUBCHAPTER C. PROCEDURES IN JUSTICE COURT

SECTION 55. Subchapter C, Chapter 45, Code of Criminal Procedure, as designated by this Act, is amended by adding Article 45.101 to read as follows:

Art. 45.101. JUSTICE COURT PROSECUTIONS. (a) All prosecutions in a justice court shall be conducted by the county or district attorney or a deputy county or district attorney.

(b) Except as otherwise provided by law, appeals from justice court may be prosecuted by the district attorney or a deputy district attorney with the consent of the county attorney.

SECTION 56. Article 45.21, Code of Criminal Procedure, is redesignated as Article 45.102 and amended to read as follows:

Art. 45.102 [45.21 ]. OFFENSES COMMITTED IN ANOTHER COUNTY. Whenever complaint is made before any justice of the peace that a felony has been committed in any other than a county in which the complaint is made, the [such ] justice shall issue a [his ] warrant for the arrest of the accused, directed as in other cases, commanding that the accused be arrested and taken before any magistrate of the county where such felony is alleged to have been committed, forthwith, for examination as in other cases.

SECTION 57. Article 45.15, Code of Criminal Procedure, is redesignated as Article 45.103 and amended to read as follows:

Art. 45.103 [45.15 ]. WARRANT WITHOUT COMPLAINT. If [Whenever ] a criminal offense that [which ] a justice of the peace has jurisdiction to try is [shall be ]

committed within the view of the [such ] justice, the justice [he ] may issue a [his ] warrant for the arrest of the offender.

SECTION 58. Articles 45.201, 45.202, and 45.203, as redesignated or added by this Act, are designated as Subchapter D of Chapter 45, Code of Criminal Procedure, and a heading is added to that subchapter to read as follows:

SUBCHAPTER D. PROCEDURES IN MUNICIPAL COURT

SECTION 59. Article 45.03, Code of Criminal Procedure, is redesignated as Article 45.201 and amended to read as follows:

Art. 45.201 [45.03 ]. MUNICIPAL PROSECUTIONS. (a) All prosecutions in a municipal court shall be conducted by the city attorney of the municipality [such city, town or village, ] or by a [his ] deputy city attorney.

(b) The county attorney of the county in which the municipality [said city, town or village ] is situated may, if the county attorney [he ] so desires, also represent the state [State ] in such prosecutions. In such cases, the [said ] county attorney is [shall ] not [be ] entitled to receive any fees or other compensation [whatever ] for those [said ] services.

(c) [The county attorney shall have no power to dismiss any prosecution pending in said court unless for reasons filed and approved by the judge. ] With the consent of the county attorney, appeals from municipal court to a county court, county court at law, or any appellate court may be prosecuted by the city attorney or a [his ] deputy city attorney.

(d) It is the primary duty of a municipal prosecutor not to convict, but to see that justice is done.

SECTION 60. Article 45.04, Code of Criminal Procedure, is redesignated as Article 45.202 and amended to read as follows:

Art. 45.202 [45.04 ]. SERVICE OF PROCESS. (a) [Sec. 1. ] All process issuing out of a municipal [corporation ] court may be served and shall be served when directed by the court, by a peace officer [policeman ] or marshal of the municipality [city, town or village ] within which it is situated, under the same rules as are provided by law for the service by sheriffs and constables of process issuing out of the justice court, so far as applicable.

(b) [Sec. 2. ] The peace officer [policeman ] or marshal may serve all process issuing out of a municipal [corporation ] court anywhere in the county in which the municipality [city, town or village ] is situated. If the municipality [city, town or village ] is situated in more than one county, the peace officer [policeman ] or marshal may serve the process throughout those counties.

[Sec. 3. A defendant is entitled to at least one day's notice of any complaint against him, if such time is demanded. ]

SECTION 61. Article 45.06, Code of Criminal Procedure, is redesignated as Article 45.203 and amended to read as follows:

Art. 45.203 [45.06 ]. COLLECTION OF FINES, COSTS, AND SPECIAL EXPENSES. (a) The governing body of each municipality [incorporated city, town or village ] shall by ordinance prescribe [such ] rules, not inconsistent with any law of this state [State ], as may be proper to enforce the collection of fines imposed by a municipal court. In addition to any other method of enforcement, the municipality may enforce the collection of fines by:

(1) [, by ] execution against the property of the defendant;[, ] or

(2) imprisonment of the defendant.

(b) The governing body of a municipality may[, the collection of all fines imposed by such court, and shall also have power to ] adopt such rules and regulations, not inconsistent with any law of this state, concerning the practice and procedure in the municipal [such ] court as the [said ] governing body may consider [deem ] proper[, not inconsistent with any law of this State ].

(c) The governing body of each municipality may prescribe by ordinance the collection, after due notice, of [All such fines; ] a special expense, not to exceed $25 for the issuance and service of a warrant of arrest for an offense under Section 38.10, Penal Code, or Section 543.009, Transportation Code. Money collected from the special expense [under Section 149, Uniform Act Regulating Traffic on Highways (Article 6701d, Vernon's Texas Civil Statutes); and the special expenses described in Article 17.04 dealing with the requisites of a personal bond and a special expense for the issuance and service of a warrant of arrest, after due notice, not to exceed $25, ] shall be paid into the municipal [city ] treasury for the use and benefit of the municipality [city, town or village. The governing body of each incorporated city, town or village may by ordinance authorize a municipal court to collect a special expense for services performed in cases in which the laws of this State require that the case be dismissed because of actions by or on behalf of the defendant which were subsequent to the date of the alleged offense. Such actions are limited to compliance with the provisions of Subsection (a), Section 143A, Uniform Act Regulating Traffic on Highways (Article 6701d, Vernon's Texas Civil Statutes). Such special expense shall not exceed the actual expenses incurred for the services or $10, whichever is less ].

(d) Costs may not be imposed or collected in criminal cases in municipal court by municipal ordinance.

SECTION 62. Article 42.111, Code of Criminal Procedure, is amended to read as follows:

Art. 42.111. DEFERRAL OF PROCEEDINGS IN CASES APPEALED TO COUNTY COURT. If a defendant convicted of a misdemeanor punishable by fine only appeals the conviction to a county court, on the trial in county court the defendant may enter a plea of guilty or nolo contendere to the offense. If the defendant enters a plea of guilty or nolo contendere, the court may defer further proceedings without entering an adjudication of guilt in the same manner as provided for the deferral of proceedings in justice court or municipal court under Article 45.051 [45.54 ] of this code. This article does not apply to a misdemeanor case disposed of under Subchapter B, Chapter 543, Transportation Code [by Section 143A, Uniform Act Regulating Traffic on Highways (Article 6701d, Vernon's Texas Civil Statutes) ], or a serious traffic violation as defined by Section 522.003, Transportation Code [in Section 3(26), Texas Commercial Driver's License Act (Article 6687b-2, Revised Statutes) ].

SECTION 63. Subsections (b) and (c), Article 102.002, Code of Criminal Procedure, are amended to read as follows:

(b) The justices of the peace and municipal courts shall maintain a record of and the clerks of district and county courts and county courts at law shall keep a book and record in the book:

(1) the number and style of each criminal action before the court;

(2) the name of each witness subpoenaed, attached, or recognized to testify in the action; and

(3) whether the witness was a witness for the state or for the defendant.

(c) Except as otherwise provided by this subsection, a defendant is liable on conviction for the fees provided by this article for witnesses in the defendant's case. If a defendant convicted of a misdemeanor does not pay the defendant's [his ] fines and costs, the county or municipality, as appropriate, is liable for the fees provided by this article for witnesses in the defendant's case.

SECTION 64. Article 102.004, Code of Criminal Procedure, is amended to read as follows:

Art. 102.004. JURY FEE. (a) A defendant convicted by a jury in a trial before a justice or municipal court shall pay a jury fee of $3. A defendant in a justice or municipal court who requests a trial by jury and who withdraws the request not earlier than 24 hours before the time of trial shall pay a jury fee of $3, if the defendant is convicted of the offense or final disposition of the defendant's case is deferred. A defendant convicted by a jury in a county court, a county court at law, or a district court shall pay a jury fee of $20.

(b) If two or more defendants are tried jointly in a justice or municipal court, only one jury fee of $3 may be imposed under this article. If the defendants sever and are tried separately, each defendant convicted shall pay a jury fee.

SECTION 65. Article 45.11, Code of Criminal Procedure, is redesignated as Article 44.281, Code of Criminal Procedure, transferred to Chapter 44 of that code, and amended to read as follows:

Art. 44.281 [45.11 ]. DISPOSITION OF FINES AND COSTS WHEN MISDEMEANOR AFFIRMED [FEES ]. In misdemeanor cases affirmed on appeal from a municipal court, the [The ] fine imposed on appeal and the costs imposed on appeal shall be collected from [of ] the defendant, and the [such ] fine of the municipal [corporation ] court when collected shall be paid into the municipal treasury.

SECTION 66. Section 52.027, Family Code, is amended by amending Subsection (h) and adding Subsection (j) to read as follows:

(h) If a child [A municipal court or justice court may not hold a child in contempt for ] intentionally or knowingly fails [refusing ] to obey a lawful order of disposition after an adjudication of guilt of a traffic offense or other offense punishable by fine only, the[. The ] municipal court or justice court may:

(1) except as provided by Subsection (j), hold the child in contempt of the municipal court or justice court order and order the child to pay a fine not to exceed $500; or

(2) [shall instead ] refer the child to the appropriate juvenile court for delinquent conduct for contempt of the municipal court or justice court order.

(j) A municipal or justice court may not order a child to a term of confinement or imprisonment for contempt of a municipal or justice court order under Subsection (h).

SECTION 67. Subsection (b), Section 30.00430, Government Code, is amended to read as follows:

(b) Complaints must comply with Article 45.019 [45.17 ], Code of Criminal Procedure.

SECTION 68. Subsection (b), Section 30.00940, Government Code, is amended to read as follows:

(b) Complaints must comply with Article 45.019 [45.17 ], Code of Criminal Procedure.

SECTION 69. Subsection (b), Section 30.01101, Government Code, is amended to read as follows:

(b) Complaints must comply with Article 45.019 [45.17 ], Code of Criminal Procedure.

SECTION 70. Subsection (b), Section 30.01221, Government Code, is amended to read as follows:

(b) Complaints must comply with Article 45.019 [45.17 ], Code of Criminal Procedure.

SECTION 71. Subsection (d), Section 406.014, Government Code, is amended to read as follows:

(d) A notary public who administers an oath pursuant to Article 45.019 [45.01 ], Code of Criminal Procedure, is exempt from the requirement in Subsection (a) of recording that oath.

SECTION 72. Subsection (b), Section 542.402, Transportation Code, is amended to read as follows:

(b) In each fiscal year, a municipality having a population of less than 5,000 may retain, from fines collected for violations of highway laws in this subtitle and from special expenses collected under Article 45.051 [45.54 ], Code of Criminal Procedure, in cases in which a violation of this subtitle is alleged, an amount equal to 30 percent of the municipality's revenue for the preceding fiscal year from all sources, other than federal funds and bond proceeds, as shown by the audit performed under Section 103.001, Local Government Code. After a municipality has retained that amount, the municipality shall send to the comptroller any portion of a fine or a special expense collected that exceeds $1.

SECTION 73. Subsection (a), Section 543.204, Transportation Code, is amended to read as follows:

(a) A justice of the peace or municipal judge who defers further proceedings, suspends all or part of the imposition of the fine, and places a defendant on probation under Article 45.051 [45.54 ], Code of Criminal Procedure, or a county court judge who follows that procedure under Article 42.111, Code of Criminal Procedure, may not submit a written record to the department, except that if the justice or judge subsequently adjudicates the defendant's guilt, the justice or judge shall submit the record not later than the 30th day after the date on which the justice or judge adjudicates guilt.

SECTION 74. Subdivision (1), Section 706.001, Transportation Code, is amended to read as follows:

(1) "Complaint" means a notice of an offense as described by Article 27.14(d) or 45.019 [45.01 ], Code of Criminal Procedure.

SECTION 75. (a) Articles 44.13, 45.01, 45.02, 45.05, 45.07, 45.08, 45.09, 45.12, 45.16, 45.19, 45.22, 45.23, 45.26, 45.27, 45.32, and 45.49, Code of Criminal Procedure, are repealed.

(b) Sections 543.102-543.110, Transportation Code, are repealed.

SECTION 76. This Act takes effect September 1, 1999.

SECTION 77. (a) The changes in law made by this Act apply to every act, proceeding, or event covered by a law amended by this Act that occurs on or after the effective date of this Act, without regard to whether the offense to which the act, proceeding, or event applies occurred before, on, or after the effective date of this Act, except as provided by Subsections (b)-(f) of this section.

(b) In a proceeding related to the prosecution of an offense that occurs or is alleged to have occurred before the effective date of this Act, the accused may elect to have the proceeding governed by any provision of Chapter 45, Code of Criminal Procedure, as that provision would have applied to the offense in the absence of the changes made by this Act, and that prior law is continued in effect for that purpose.

(c) The change in law made by Section 49 of this Act to Article 45.522, Code of Criminal Procedure, redesignated by this Act as Article 45.050, Code of Criminal Procedure, and the change in law made by Section 66 of this Act to Section 52.027, Family Code, applies only to an offense committed or, for the purposes of Title 3,

Family Code, to conduct that occurs on or after the effective date of this Act. An offense committed before the effective date of this Act is covered by the law in effect when the offense was committed, and the former law is continued in effect for that purpose. Conduct that occurs before the effective date of this Act is covered by the law in effect at the time the conduct occurred, and the former law is continued in effect for that purpose. For purposes of this subsection, an offense is committed on or after the effective date of this Act if every element of the offense occurs on or after that date and conduct violating a penal law of this state occurs on or after the effective date of this Act if every element of the violation occurs on or after that date.

(d) The change in law made by Article 45.012(g), Code of Criminal Procedure, as added by this Act, applies only to a paper issued or an act committed on or after September 1, 2000.

(e) Article 45.013, Code of Criminal Procedure, as added by this Act, applies only to a document required to be filed on or after the effective date of this Act.

(f) The change in law made by this Act to Article 44.181(a), Code of Criminal Procedure, applies only to an appeal from a justice or municipal court that is filed on or after the effective date of this Act. An appeal filed before the effective date of this Act is covered by the law in effect when the appeal was filed, and the former law is continued in effect for that purpose.

SECTION 78. The importance of this legislation and the crowded condition of the calendars in both houses create an emergency and an imperative public necessity that the constitutional rule requiring bills to be read on three several days in each house be suspended, and this rule is hereby suspended.

The Conference Committee Report was filed with the Secretary of the Senate.

CONFERENCE COMMITTEE REPORT ON

HOUSE BILL 1104

Senator Cain submitted the following Conference Committee Report:

Austin, Texas

May 28, 1999

Honorable Rick Perry

President of the Senate

Honorable James E. "Pete" Laney

Speaker of the House of Representatives

Sirs:

We, Your Conference Committee, appointed to adjust the differences between the Senate and the House of Representatives on HB 1104 have had the same under consideration, and beg to report it back with the recommendation that it do pass.

CAIN DUNNAM

OGDEN A. REYNA

WEST LENGEFELD

SIBLEY HOCHBERG

RATLIFF

On the part of the Senate On the part of the House

The Conference Committee Report was filed with the Secretary of the Senate.

CONFERENCE COMMITTEE REPORT ON

SENATE BILL 358

Senator Madla submitted the following Conference Committee Report:

Austin, Texas

May 24, 1999

Honorable Rick Perry

President of the Senate

Honorable James E. "Pete" Laney

Speaker of the House of Representatives

Sirs:

We, Your Conference Committee, appointed to adjust the differences between the Senate and the House of Representatives on SB 358 have had the same under consideration, and beg to report it back with the recommendation that it do pass in the form and text hereto attached.

MADLA GRAY

HARRIS BOSSE

NIXON CAPELO

MONCRIEF MCCALL

On the part of the Senate On the part of the House

A BILL TO BE ENTITLED

AN ACT

relating to the continuation and functions of the Texas Department of Mental Health and Mental Retardation.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 532.002, Health and Safety Code, is amended to read as follows:

Sec. 532.002. SUNSET PROVISION. The Texas Department of Mental Health and Mental Retardation is subject to Chapter 325, Government Code (Texas Sunset Act). Unless continued in existence as provided by that Act, the department is abolished and this chapter expires September 1, 2011 [1999 ].

SECTION 2. Chapter 532, Health and Safety Code, is amended by adding Section 532.0035 to read as follows:

Sec. 532.0035. BOARD TRAINING. (a) A person who is appointed to and qualifies for office as a member of the board may not vote, deliberate, or be counted as a member in attendance at a meeting of the board until the person completes a training session that complies with this section.

(b) The training program must provide the person with information regarding:

(1) the legislation that created the department and board;

(2) the programs operated by the department;

(3) the roles and functions of the department;

(4) the rules of the department with an emphasis on the rules that relate to disciplinary and investigatory authority;

(5) the current budget for the department;

(6) the results of the most recent formal audit of the department;

(7) the requirements of:

(A) the open meetings law, Chapter 551, Government Code;

(B) the public information law, Chapter 552, Government Code;

(C) the administrative procedure law, Chapter 2001, Government Code; and

(D) other laws relating to public officials, including conflict-of-interest laws; and

(8) any applicable ethics policies adopted by the department or the Texas Ethics Commission.

(c) A person appointed to the board is entitled to reimbursement, as provided by the General Appropriations Act, for the travel expenses incurred in attending the training program regardless of whether the attendance at the program occurs before or after the person qualifies for office.

SECTION 3. Subsections (d) and (e), Section 532.016, Health and Safety Code, are amended to read as follows:

(d) The commissioner or the commissioner's designee shall prepare and maintain a written policy statement that implements [to assure implementation of ] a program of equal employment opportunity to ensure that [under which ] all personnel decisions [transactions ] are made without regard to race, color, disability [handicap ], sex, religion, age, or national origin. The policy statement must include:

(1) personnel policies, including policies relating to recruitment, evaluation, selection, [appointment, ] training, and promotion of personnel, that show the intent of the department to avoid the unlawful employment practices described by Chapter 21, Labor Code;

(2) an analysis of the extent to which the composition of the department's personnel is in accordance with state and federal law and a description of reasonable methods to achieve compliance with state and federal law[;

[(2) a comprehensive analysis of the department work force that meets federal and state guidelines ]; and

(3) procedures by which a determination can be made of significant underutilization in the department work force of all persons for whom federal or state guidelines encourage a more equitable balance and reasonable methods to appropriately address those areas of significant underutilization.

(e) The [A ] policy statement [prepared under Subsection (d) ] must:

(1) [cover an annual period;

[(2) ] be updated [at least ] annually;

(2) be reviewed by the Commission on Human Rights for compliance with Subsection (d)(1); and

(3) be filed with the governor's office [governor ].

SECTION 4. Subchapter A, Chapter 533, Health and Safety Code, is amended by adding Section 533.013 to read as follows:

Sec. 533.013. DUPLICATION OF REHABILITATION SERVICES. The department shall enter into an agreement with the Texas Rehabilitation Commission that defines the roles and responsibilities of the department and the commission regarding the agencies' shared client populations. The agreement must establish methods to prevent the duplication and fragmentation of employment services provided by the agencies.

SECTION 5. Section 533.032, Health and Safety Code, is amended to read as follows:

Sec. 533.032. LONG-RANGE PLANNING [PLAN ]. (a) The department shall have a long-range plan covering at least six years that includes at least the provisions required by Sections 531.022 and 531.023, Government Code [Section 10, Article 4413(502), Revised Statutes ], and Chapter 2056, Government Code. The plan must cover the provision of services in and policies for state-operated institutions and ensure that the medical needs of the most medically fragile persons the department serves are met.

(b) In developing the plan, the department shall:

(1) solicit input from:

(A) local authorities for mental health and mental retardation;

(B) community representatives;

(C) consumers of mental health and mental retardation services, including consumers of campus-based and community-based services, and family members of consumers of those services; and

(D) other interested persons; and

(2) consider the report developed under Subsection (c).

(c) The department shall develop a report containing information and recommendations regarding the most efficient long-term use and management of the department's campus-based facilities. The report must:

(1) project future bed requirements for state schools and state hospitals;

(2) document the methodology used to develop the projection of future bed requirements;

(3) project maintenance costs for institutional facilities;

(4) recommend strategies to maximize the use of institutional facilities; and

(5) specify how each state school and state hospital will:

(A) serve and support the communities and consumers in its service area; and

(B) fulfill statewide needs for specialized services.

(d) In developing the report under Subsection (c), the department shall:

(1) conduct two public meetings, one meeting to be held at the beginning of the process and the second meeting to be held at the end of the process, to receive comments from interested parties; and

(2) consider:

(A) the medical needs of the most medically fragile of its clients;

(B) the provision of services to clients with severe and profound mental retardation and to persons with mental retardation who are medically fragile or have behavioral problems;

(C) the program and service preference information collected under Section 533.038; and

(D) input solicited from consumers of services of state schools and state hospitals.

(e) The department shall develop a report analyzing state and federally funded residential services for persons with mental retardation. The report shall:

(1) determine any disparity in cost and quality outcomes achieved between services provided in state-operated programs, including but not limited to ICFs-MR and HCS, and the same or comparable services provided by private sector providers; and

(2) identify and quantify the reasons for any disparity that exists.

(f) The department, in preparing the report under Subsection (e), shall obtain ongoing input from stakeholders, including department staff, private providers, advocates, consumers, and family members of consumers.

(g) The department shall:

(1) attach the reports required by Subsections (c) and (e) to the department's legislative appropriations request for each biennium;

(2) at the time the department presents its legislative appropriations request, present the reports to the:

(A) governor;

(B) governor's budget office;

(C) lieutenant governor;

(D) speaker of the house of representatives;

(E) Legislative Budget Board; and

(F) Health and Human Services Commission; and

(3) update the department's long-range plan biennially and include the reports in the plan.

(h) The department shall, in coordination with the Health and Human Services Commission, evaluate the current and long-term costs associated with serving inpatient psychiatric needs of persons living in counties now served by at least three state hospitals within 120 miles of one another. This evaluation shall take into consideration the condition of the physical plants and other long-term asset management issues associated with the operation of the hospitals, as well as other issues associated with quality psychiatric care. After such determination is made, the Health and Human Services Commission shall begin to take action to influence the utilization of these state hospitals in order to ensure efficient service delivery.

SECTION 6. Subchapter B, Chapter 533, Health and Safety Code, is amended by adding Section 533.0325 to read as follows:

Sec. 533.0325. CONTINUUM OF SERVICES IN CAMPUS FACILITIES. The board by rule shall establish criteria regarding the uses of the department's campus-based facilities as part of a full continuum of services.

SECTION 7. Subchapter B, Chapter 533, Health and Safety Code, is amended by adding Sections 533.0345 and 533.0346 to read as follows:

Sec. 533.0345. STATE AGENCY SERVICES STANDARDS. (a) The department by rule shall develop model program standards for mental health and mental retardation services for use by each state agency that provides or pays for mental health or mental retardation services. The department shall provide the model standards to each agency that provides mental health or mental retardation services as identified by the Health and Human Services Commission.

(b) Model standards developed under Subsection (a) must be designed to improve the consistency of mental health and mental retardation services provided by or through a state agency.

(c) Biennially the department shall review the model standards developed under Subsection (a) and determine whether each standard contributes effectively to the consistency of service delivery by state agencies.

Sec. 533.0346. AUTHORITY TO TRANSFER SERVICES TO COMMUNITY CENTERS. (a) The department may transfer operations of and services provided at the Amarillo State Center, Beaumont State Center, and Laredo State Center to a community center established under Chapter 534, including a newly established center providing mental retardation services or mental health and mental retardation services.

(b) The transfer may occur only on the department's approval of a plan submitted in accordance with Section 534.001(d) or of an amendment to a previously approved plan. In developing the plan or plan amendment, the center or proposed center proposing to accept the state center operation and service responsibilities shall consider input from consumers of mental health and mental retardation services and family members of and advocates for those consumers, organizations that represent affected employees, and other providers of mental health and mental retardation services.

(c) The center or proposed center proposing to accept the state center operation and service responsibilities shall publish notice of the initial planning meeting regarding the content of the plan or plan amendment and of the meeting to review the content of the proposed plan or plan amendment before it is submitted under Section 534.001(d). The notices must include the time and location of the meeting. The notice of the meeting to review the content of the plan or amendment must include information regarding how to obtain a copy of the proposed plan or amendment. The notices must be published not fewer than 30 days and not more than 90 days before the date set for the meeting in a newspaper of general circulation in each county containing any part of the proposed service area. If a county in which notice is required to be published does not have a newspaper of general circulation, the notices shall be published in a newspaper of general circulation in the nearest county in which a newspaper of general circulation is published.

(d) At the time the operations and services are transferred to the community center, money supporting the cost of providing operations and services at a state center shall be transferred to the community center to ensure continuity of services.

(e) The Amarillo State Center is exempt from the requirements listed in Subsections (b) and (c).

SECTION 8. Subchapter B, Chapter 533, Health and Safety Code, is amended by adding Section 533.0351 to read as follows:

Sec. 533.0351. LOCAL AUTHORITY TECHNICAL ADVISORY COMMITTEE. (a) In this section "local authority" means a local mental health or mental retardation authority.

(b) The commissioner shall establish a nine-member local authority advisory committee to advise the commissioner on technical and administrative issues that directly affect local authority responsibilities.

(c) The committee is composed of representatives of local authorities and one member representing the public appointed by the commissioner. In appointing the members, the commissioner shall ensure a balanced representation of:

(1) different regions of this state;

(2) rural and urban counties; and

(3) single-county and multicounty local authorities.

(d) Except for the member representing the public, members appointed to the advisory committee must have expertise in the day-to-day operations of a local authority.

(e) The advisory committee shall:

(1) review rules and proposed rules related to local authority operations;

(2) advise the commissioner regarding evaluation and coordination of initiatives related to local authority operations;

(3) advise and assist the department in developing a method of contracting with local authorities that will result in contracts that are flexible and responsive to:

(A) the needs and services of local communities; and

(B) the department's performance expectations;

(4) coordinate with and monitor the activities of work groups whose actions may affect local authority operations;

(5) report to the board on the committee's activities and recommendations at least once each fiscal quarter; and

(6) work with the commissioner as the commissioner directs.

(f) For any written recommendation the committee makes to the department, the department shall provide to the committee a written response regarding any action taken on the recommendation or the reasons for the department's inaction on the subject of the recommendation.

(g) The committee is subject to Chapter 2110, Government Code. The department by rule shall provide, in accordance with Section 2110.008, Government Code, that the committee is abolished on September 1, 2007, unless the board affirmatively votes to continue the committee in existence.

SECTION 9. Subchapter B, Chapter 533, Health and Safety Code, is amended by adding Section 533.0356 to read as follows:

Sec. 533.0356. LOCAL BEHAVIORAL HEALTH AUTHORITIES. (a) In this section, "commission" means the Texas Commission on Alcohol and Drug Abuse.

(b) The department and the commission jointly may designate a local behavioral health authority in a local service area to provide mental health and chemical dependency services in that area. The board and the commission may delegate to an authority designated under this section the authority and responsibility for planning, policy development, coordination, resource allocation, and resource development for and oversight of mental health and chemical dependency services in that service area. An authority designated under this section has:

(1) all the responsibilities and duties of a local mental health authority provided by Section 533.035 and by Subchapter B, Chapter 534; and

(2) the responsibility and duty to ensure that chemical dependency services are provided in the service area as described by the statewide service delivery plan adopted under Section 461.0124.

(c) In the planning and implementation of services, the authority shall give proportionate priority to mental health services and chemical dependency services that ensures that funds purchasing services are used in accordance with specific regulatory and statutory requirements that govern the respective funds.

(d) A local mental health authority may apply to the department and commission for designation as a local behavioral health authority.

(e) The department and commission, by contract or by a case-rate or capitated arrangement or another method of allocation, may disburse money, including federal money, to a local behavioral health authority for services.

(f) A local behavioral health authority, with the approval of the department or the commission as provided by contract, shall use money received under Subsection (e) to ensure that mental health and chemical dependency services are provided in the local service area at the same level as the level of services previously provided through:

(1) the local mental health authority; and

(2) the commission.

(g) In determining whether to designate a local behavioral health authority for a service area and in determining the functions of the authority if designated, the department and commission shall solicit and consider written comments from any

interested person including community representatives, persons who are consumers of the proposed services of the authority, and family members of those consumers.

(h) An authority designated under this section shall demonstrate to the department and the commission that services involving state funds that the authority oversees comply with relevant state standards.

(i) The board and the commission jointly may adopt rules to govern the operations of local behavioral health authorities. The department and the commission jointly may assign the local behavioral health authority the duty of providing a single point of entry for mental health and chemical dependency services.

SECTION 10. Section 533.038, Health and Safety Code, is amended by adding Subsections (d), (e), and (f) to read as follows:

(d) A person with mental retardation, or a person's legally authorized representative, seeking residential services shall receive a clear explanation of programs and services for which the person is determined to be eligible, including state schools, community ICF-MR programs, waiver services under Section 1915(c) of the federal Social Security Act (42 U.S.C. Section 1396n(c)), or other services. The preferred programs and services chosen by the person or the person's legally authorized representative shall be documented in the person's record. If the preferred programs or services are not available, the person or the person's legally authorized representative shall be given assistance in gaining access to alternative services and the selected waiting list.

(e) The department shall ensure that the information regarding program and service preferences collected under Subsection (d) is documented and maintained in a manner that permits the department to access and use the information for planning activities conducted under Section 533.032.

(f) The department may spend money appropriated for the state school system only in accordance with limitations imposed by the General Appropriations Act.

SECTION 11. Subchapter B, Chapter 533, Health and Safety Code, is amended by adding Section 533.039 to read as follows:

Sec. 533.039. CLIENT SERVICES OMBUDSMAN. (a) The commissioner shall employ an ombudsman responsible for assisting a person, or a parent or guardian of a person, who has been denied service by the department, a department program or facility, or a local mental health or mental retardation authority.

(b) The ombudsman shall:

(1) explain and provide information on department and local mental health or mental retardation authority services, facilities, and programs and the rules, procedures, and guidelines applicable to the person denied services; and

(2) assist the person in gaining access to an appropriate program or in placing the person on an appropriate waiting list.

SECTION 12. Subsection (a), Section 534.004, Health and Safety Code, is amended to read as follows:

(a) The local agency or organizational combination of local agencies that establishes a community center shall prescribe:

(1) the application procedure for a position on the board of trustees;

(2) the procedure and criteria for making appointments to the board of trustees;

(3) the procedure for posting notice of and filling a vacancy on the board of trustees; and

(4) the grounds and procedure for removing a member of the board of trustees[; and

[(5) a procedure to ensure that an appointed member of a board of trustees appointed by a local agency or organizational combination of local agencies primarily located in only one county serves not more than four consecutive and complete two-year terms ].

SECTION 13. Section 534.005, Health and Safety Code, is amended to read as follows:

Sec. 534.005. TERMS; VACANCIES. (a) Appointed members of the board of trustees who are not members of a local agency's governing body serve staggered two-year terms. In appointing the initial members, the appointing authority shall designate not less than one-third or more than one-half of the members to serve one-year terms and shall designate the remaining members to serve two-year terms.

(b) A vacancy on a board of trustees composed of qualified voters is filled by appointment for the remainder of the unexpired term.

[(c) If the local agency or organizational combination of local agencies that appoints the board of trustees is primarily located in only one county, a person appointed to the board of trustees may not serve more than four consecutive and complete two-year terms. ]

SECTION 14. Section 534.007, Health and Safety Code, is amended to read as follows:

Sec. 534.007. PROHIBITED ACTIVITIES BY FORMER OFFICERS OR EMPLOYEES; OFFENSE. (a) A [For one year after the date on which a ] former officer or employee of a community center who ceases [terminates ] service or employment with the center[, the individual ] may not represent any person or receive compensation for services rendered on behalf of any person regarding a particular matter in which the former officer or employee participated during the period of employment, either through personal involvement or because the case or proceeding was a matter within the officer's or employee's official[, directly or indirectly, attempt or aid in the attempt to procure a contract with the community center in which the individual served or was employed if the contract relates to a program or service in which the individual was directly concerned or for which the individual had administrative ] responsibility.

(b) This section does not apply to:

(1) a former employee who is compensated on the last date of service or employment below the amount prescribed by the General Appropriations Act for [step 1, ] salary group 17, Schedule A, or salary group 9, Schedule B, of the position classification salary schedule; or

(2) a former officer or employee who is employed by a state agency or another community center.

(c) Subsection (a) does not apply to a proceeding related to policy development that was concluded before the officer's or employee's service or employment ceased.

(d) A former officer or employee of a community center commits an offense if the former officer or employee violates this section. An offense under this section is a Class A misdemeanor.

(e) In this section:

(1) "Participated" means to have taken action as an officer or employee through decision, approval, disapproval, recommendation, giving advice, investigation, or similar action.

(2) "Particular matter" means a specific investigation, application, request for a ruling or determination, proceeding related to the development of policy, contract, claim, charge, accusation, arrest, or judicial or other proceeding.

SECTION 15. Subsection (b), Section 534.065, Health and Safety Code, is amended to read as follows:

(b) The mental health or mental retardation authority may [shall ] renew the contract only if the contract meets the criteria provided by Section 533.016 [if the authority finds that:

[(1) funding is available;

[(2) the authority plans to continue the services;

[(3) the provider is in substantial compliance with each material provision of the contract, unless the authority determines that the provision is not legal and enforceable under applicable state and federal law;

[(4) the provider is providing a reasonably adequate level of service in accordance with the contract and at a reasonable cost;

[(5) the provider agrees to a renewal contract that is substantially in compliance with a model contract developed by the department under Section 534.055;

[(6) the provider was during the term of any contract with the authority and is at the time of renewal in compliance with applicable laws governing the subject matter of the contract; and

[(7) neither the provider nor any of its officers, directors, or principal employees has been convicted or found by a final administrative decision to have been guilty of fraud or abuse in the provision of health care services under a contract with a state or federal agency ].

SECTION 16. Subchapter C, Chapter 534, Health and Safety Code, is amended by adding Section 534.106 to read as follows:

Sec. 534.106. CONDITIONS FOR CERTAIN CONTRACTS. A contract between the department and a health maintenance organization formed by one or more community centers must provide that the health maintenance organization may not form a for-profit entity unless the organization transfers all of the organization's assets to the control of the boards of trustees of the community centers that formed the organization.

SECTION 17. Chapter 461, Health and Safety Code, is amended by adding Section 461.0128 to read as follows:

Sec. 461.0128. STATE AGENCY SERVICES STANDARDS. (a) The commission by rule shall develop model program standards for substance abuse services for use by each state agency that provides or pays for substance abuse services. The commission shall provide the model standards to each agency that provides substance abuse services as identified by the Health and Human Services Commission.

(b) Model standards developed under Subsection (a) must be designed to improve the consistency of substance abuse services provided by or through a state agency.

(c) Biennially the commission shall review the model standards developed under Subsection (a) and determine whether each standard contributes effectively to the consistency of service delivery by state agencies.

SECTION 18. Chapter 461, Health and Safety Code, is amended by adding Section 461.0129 to read as follows:

Sec. 461.0129. LOCAL BEHAVIORAL HEALTH AUTHORITIES. The commission may designate and provide services through local behavioral health authorities as provided by Section 533.0356 and rules adopted jointly with the Texas Board of Mental Health and Mental Retardation.

SECTION 19. Section 574.083, Health and Safety Code, is amended to read as follows:

Sec. 574.083. RETURN TO FACILITY UNDER [FACILITY ADMINISTRATOR'S CERTIFICATE OR ] COURT ORDER. (a) The facility administrator of a facility to which a patient was admitted for court-ordered inpatient health care services may have an absent patient taken into custody, detained, and returned to the facility by filing an affidavit as prescribed by Subsection (c)[:

[(1) signing a certificate authorizing the patient's return; or

[(2) filing the certificate ] with a magistrate and requesting the magistrate to order the patient's return.

(b) A magistrate may issue an order directing a peace or health officer to take a patient into custody and return the patient to the facility if the facility administrator files the affidavit [certificate as ] prescribed by Subsection (c) [this section ]. An order issued under this subsection extends to any part of this state and authorizes any peace officer to whom the order is directed or transferred to execute the order.

(c) An affidavit filed under Subsection (a) must set out facts establishing that the patient is receiving court-ordered inpatient mental health services at a facility and show that [The facility administrator may sign or file the certificate if ] the facility administrator reasonably believes that:

(1) the patient is absent without authority from the facility;

(2) the patient has violated the conditions of a pass or furlough; or

(3) the patient's condition has deteriorated to the extent that the patient's continued absence from the facility under a pass or furlough is inappropriate.

(d) A peace or health officer shall take the patient into custody and return the patient to the facility as soon as possible if the patient's return is authorized by [the facility administrator's certificate or ] the court order.

(e) The peace or health officer may take the patient into custody without having the [certificate or ] court order in the officer's possession.

(f) A peace or health officer who cannot immediately return a patient to the facility named in the order may transport the patient to a local facility for detention. The patient may not be detained in a nonmedical facility that is used to detain persons who are charged with or convicted of a crime unless detention in the facility is warranted by an extreme emergency. If the patient is detained at a nonmedical facility:

(1) the patient:

(A) may not be detained in the facility for more than 24 hours; and

(B) must be isolated from all persons charged with or convicted of a crime; and

(2) the facility must notify the county health authority of the detention.

(g) The county health authority shall ensure that a patient detained in a nonmedical facility under Subsection (f) receives proper care and medical attention.

(h) Notwithstanding other law regarding confidentiality of patient information, the facility administrator may release to a law enforcement official information about the patient if the administrator determines the information is needed to facilitate the return of the patient to the facility.

SECTION 20. Section 593.012, Health and Safety Code, is amended to read as follows:

Sec. 593.012. ABSENT WITHOUT AUTHORITY [PERMISSION ]. (a) The superintendent of a residential care facility to which a client has been admitted for court-ordered care and treatment may have a client who is absent without authority taken into custody, detained, and returned to the facility by filing an affidavit with a magistrate in the manner prescribed by Section 574.083 [may immediately issue an order authorizing a peace officer to detain a resident committed to the facility under Subchapter C who is absent from the facility without proper permission ].

(b) The client shall be returned to the residential care facility in accordance with the procedures prescribed by Section 574.083 [A peace officer shall immediately notify the superintendent when the officer takes a resident into custody and shall promptly arrange the return of the resident to the assigned facility on request of the superintendent ].

SECTION 21. (a) The Texas Department of Mental Health and Mental Retardation and the Texas Department of Housing and Community Affairs shall implement a program to demonstrate the effectiveness of interagency cooperation for providing supported housing services to individuals with mental illness who reside in personal care facilities.

(b) The Texas Department of Mental Health and Mental Retardation and the Texas Department of Housing and Community Affairs shall design the supported housing services to give individualized assistance to persons to acquire and retain living arrangements that are:

(1) typical of the general population in the area in which the services are provided; and

(2) located among residences of individuals who are not receiving the services.

(c) The supported housing services under the program must be provided in accordance with rules of the Texas Department of Mental Health and Mental Retardation and may include:

(1) rental assistance for an individual who:

(A) meets income guidelines of the Texas Department of Housing and Community Affairs; and

(B) is not receiving housing assistance from the federal government;

(2) consumer rehabilitation services; and

(3) support services.

(d) The Texas Department of Mental Health and Mental Retardation and the Texas Department of Housing and Community Affairs shall work with the Texas Department of Human Services to allocate resources for the demonstration program so that priority is given to communities that:

(1) have the greatest number of personal care facilities and facilities that do not comply with licensing rules for personal care facilities; and

(2) have supported housing plans that the Texas Department of Mental Health and Mental Retardation and the Texas Department of Housing and Community Affairs have found to be consistent with the purposes of the demonstration program.

(e) The Texas Department of Mental Health and Mental Retardation and the Texas Department of Housing and Community Affairs shall establish an application process for communities that seek to participate in the demonstration program.

(f) The Texas Department of Mental Health and Mental Retardation and the Texas Department of Housing and Community Affairs shall establish a committee to

supervise the design and implementation of the demonstration program. The committee must include representatives of:

(1) the Texas Department of Mental Health and Mental Retardation;

(2) the Texas Department of Housing and Community Affairs;

(3) the Texas Department of Human Services;

(4) consumers of mental health services; and

(5) advocates of persons with mental illness.

(g) A community may not be selected to participate in the demonstration program unless the person that applies for the community's participation demonstrates collaboration between the local mental health authority and a public housing authority, community housing development organization, community development corporation, or other housing organization.

(h) An individual is not eligible for assistance under the demonstration program if the individual:

(1) does not have a mental illness;

(2) does not reside in a licensed or unlicensed personal care facility at the time the individual is first offered services under the demonstration program; or

(3) was placed in a licensed or unlicensed personal care facility for the sole purpose of becoming eligible for the demonstration program.

(i) The Texas Department of Mental Health and Mental Retardation and the Texas Department of Housing and Community Affairs shall implement the demonstration program required by this section as soon as possible after the effective date of this Act and not later than January 1, 2000.

(j) On or before January 15, 2001, the Texas Department of Mental Health and Mental Retardation and the Texas Department of Housing and Community Affairs shall make a joint report to the governor, the lieutenant governor, and the speaker of the house of representatives. The report must include an evaluation of the demonstration program's benefits for individuals who received services and recommendations on the continuation or termination of the project or commencement of a similar project.

(k) This section expires August 31, 2001.

SECTION 22. (a) The commissioner of health and human services shall appoint a committee to evaluate the delivery and regulation of the services to residents of intermediate care facilities for the mentally retarded under Chapters 222 and 252, Health and Safety Code. The committee is composed of the following nine members:

(1) four members representing residents, families, and advocates;

(2) three members representing providers;

(3) one ex officio nonvoting member representing the Texas Department of Human Services; and

(4) one ex officio nonvoting member representing the Texas Department of Mental Health and Mental Retardation.

(b) The committee shall evaluate the impact and feasibility of consolidating at the Texas Department of Mental Health and Mental Retardation service delivery, licensing, surveying, and regulation of intermediate care facilities for the mentally retarded. In evaluating that impact and feasibility, the committee shall:

(1) review the current service delivery, licensing, surveying, and regulation;

(2) analyze current consumer and provider satisfaction with service delivery, licensing, surveying, and regulation;

(3) determine the impact on residents and providers of consolidating service delivery, licensing, surveying, and regulation at the Texas Department of Mental Health and Mental Retardation;

(4) determine if the transfer of service delivery, licensing, surveying, and regulation to the Texas Department of Mental Health and Mental Retardation from the Texas Department of Human Services, or a successor agency, to achieve consolidation is in the best interests of the residents; and

(5) adopt a plan to address the consolidation if the committee determines that the transfer is in the best interests of the residents.

(c) The committee shall prepare a report that includes its findings and recommendations, including a specific recommendation on whether consolidation of service delivery, licensing, surveying, and regulation at the Texas Department of Mental Health and Mental Retardation is or is not in the best interests of the residents. Not later than October 1, 2000, the committee shall present the report to the governor, the lieutenant governor, the speaker of the house of representatives, and the presiding officers of the house and senate committees having jurisdiction over the affected agencies.

SECTION 23. (a) The transfer prescribed by this section may not occur if the committee established under Section 22 of this Act determines, in accordance with that section, that consolidating service delivery, licensing, surveying, and regulation at the Texas Department of Mental Health and Mental Retardation is not in the best interests of the residents.

(b) Subject to limitations imposed by Subsection (a) of this section or by federal law, on September 1, 2001, the licensing, surveying, and regulation of intermediate care facilities for the mentally retarded under Chapters 222 and 252, Health and Safety Code, are transferred from the Texas Department of Human Services, or its successor agency, to the Texas Department of Mental Health and Mental Retardation.

(c) On the transfer of the functions listed in Subsection (b) of this section:

(1) all funds, obligations, and contracts of the Texas Department of Human Services related to a listed function are transferred to the Texas Department of Mental Health and Mental Retardation;

(2) all property and records in the custody of the Texas Department of Human Services related to a listed function and all funds appropriated by the legislature to the Texas Department of Human Services for a listed function are transferred to the Texas Department of Mental Health and Mental Retardation;

(3) all employees of the Texas Department of Human Services who perform duties related to a listed function become employees of the Texas Department of Mental Health and Mental Retardation, to be assigned duties by that department;

(4) a rule or form adopted by the Texas Department of Human Services that relates to a listed function is a rule or form of the Texas Department of Mental Health and Mental Retardation and remains in effect until altered by that department; and

(5) the Texas Department of Mental Health and Mental Retardation, in consultation with the commissioner of health and human services, shall establish policies and procedures that clearly delineate the functions of the department related to service delivery and the functions of the department related to licensing, surveying, and regulation.

(d) The secretary of state is authorized to adopt rules as necessary to expedite the implementation of Subsection (c)(4) of this section.

(e) The transfer of the functions listed in Subsection (b) of this section does not affect or impair any act done, any obligation, right, order, license, permit, rule, criterion, standard, or requirement existing, any investigation begun, or any penalty accrued under former law, and that law remains in effect for any action concerning those matters.

(f) An action brought or proceeding commenced before the transfer prescribed by this section is effected, including a contested case or a remand of an action or proceeding by a reviewing court, is governed by the law and rules applicable to the action or proceeding before the date of the transfer.

(g) After the transfer prescribed by this section is effected:

(1) a reference in law to the Texas Department of Human Services that relates to a function listed in Subsection (b) of this section means the Texas Department of Mental Health and Mental Retardation; and

(2) a reference in law to the Texas Board of Human Services that relates to a function listed in Subsection (b) of this section means the Texas Board of Mental Health and Mental Retardation.

(h) The commissioner of health and human services shall facilitate and supervise the transfer prescribed by this section and shall ensure the proper transfer of money, information, equipment, employees, property, and other items necessary for the Texas Department of Mental Health and Mental Retardation and the Texas Board of Mental Health and Mental Retardation to assume responsibility for the licensing, surveying, and regulation of intermediate care facilities for the mentally retarded.

SECTION 24. (a) The changes in law made by Section 532.0035, Health and Safety Code, as added by this Act, apply only to a member of the Texas Board of Mental Health and Mental Retardation appointed on or after the effective date of this Act. The qualifications of a board member appointed before the effective date of this Act are governed by the law as it existed immediately before that date and the former law is continued in effect for that purpose.

(b) The changes in law to Section 534.007, Health and Safety Code, made by this Act apply only to a person who ceases employment on or after the effective date of this Act. The relationship between a community center and a former employee who terminated employment before the effective date of this Act is governed by Section 534.007, Health and Safety Code, as it existed immediately before the effective date of this Act, and the former law is continued in effect for that purpose.

(c) The changes in law to Subsection (b), Section 534.065, Health and Safety Code, made by this Act apply only to a contract considered for renewal on or after the effective date of this Act. Actions related to the renewal of a contract that are taken before the effective date of this Act and a contract renewed before that date are governed by Section 534.065, Health and Safety Code, as it existed immediately before the effective date of this Act, and the former law is continued in effect for that purpose.

SECTION 25. This Act takes effect September 1, 1999.

SECTION 26. The importance of this legislation and the crowded condition of the calendars in both houses create an emergency and an imperative public necessity that the constitutional rule requiring bills to be read on three several days in each house be suspended, and this rule is hereby suspended.

The Conference Committee Report was filed with the Secretary of the Senate.

CONFERENCE COMMITTEE REPORT ON

SENATE BILL 1703

Senator Ellis submitted the following Conference Committee Report:

Austin, Texas

May 27, 1999

Honorable Rick Perry

President of the Senate

Honorable James E. "Pete" Laney

Speaker of the House of Representatives

Sirs:

We, Your Conference Committee, appointed to adjust the differences between the Senate and the House of Representatives on SB 1703 have had the same under consideration, and beg to report it back with the recommendation that it do pass in the form and text hereto attached.

ELLIS HODGE

JACKSON CLARK

SHAPLEIGH EDWARDS

ZAFFIRINI HILL

NAJERA

On the part of the Senate On the part of the House

A BILL TO BE ENTITLED

AN ACT

relating to loan assistance for low-income individuals and families.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Chapter 2306, Government Code, is amended by adding Subchapter FF to read as follows:

SUBCHAPTER FF. PILOT INTERIM

CONSTRUCTION LOAN PROGRAM

Sec. 2306.751. DEFINITIONS. In this subchapter:

(1) "Construction supply company" means a retail or wholesale entity that sells construction equipment and supplies for home construction and home improvements.

(2) "Nonprofit housing assistance organization" means a nonprofit entity that aids low-income persons in acquiring affordable housing and includes an entity that provides construction equipment and supplies or technical assistance for home construction or home improvements.

(3) "Owner-builder" means a person who owns a piece of real property, either through a contract for deed or a warranty deed, and who undertakes to make improvements to that property. The term does not include a person who owns or operates a construction business.

Sec. 2306.752. PILOT INTERIM CONSTRUCTION LOAN PROGRAM. (a) To provide for the development of affordable housing in this state, the department shall establish a pilot program in which the department:

(1) cooperates with construction supply companies or nonprofit housing assistance organizations to provide interim construction loans for owner-builders; and

(2) provides other services that facilitate the implementation of the program, including assistance in refinancing interim construction loans to provide private market-rate mortgages for owner-builders who participate in the program.

(b) An interim construction loan under this program may provide resources to:

(1) build new residential housing; or

(2) develop, renovate, or otherwise make basic repairs or improvements to existing residential housing.

(c) An interim construction loan under this program may not provide resources to finance a luxury item or other improvement that is not a basic improvement or repair necessary for a housing unit to comply with minimum building code standards.

(d) The department may adopt rules necessary to accomplish the purposes of this subchapter.

Sec. 2306.753. PARTICIPATION AGREEMENT. (a) Under the program, the department may enter into a participation agreement with one or more construction supply companies or nonprofit housing assistance organizations to provide loan guarantees from the department for interim construction loans made by the company or organization to eligible owner-builders under this subchapter.

(b) The department by rule shall establish a limit for the percentage of an interim construction loan that the department guarantees under the program that is based on the estimated value of the property after the improvements to the property are completed. The department may not agree to a guarantee for an interim builder loan issued to an owner-builder by a participating construction supply company or nonprofit housing assistance organization that exceeds that limit.

(c) The department may not make an agreement with a construction supply company or nonprofit housing assistance organization under the program unless the participation agreement allows the department to annually renegotiate the guarantee percentage for an interim construction loan issued by the construction supply company or nonprofit housing assistance organization. The department shall renegotiate the terms of an interim construction loan guarantee when possible to obtain a better guarantee percentage for the state from the construction supply company or nonprofit housing assistance organization.

(d) A participating construction supply company or nonprofit housing assistance organization may require an owner-builder to provide a warranty deed for the property that is the proposed subject of the interim construction loan as collateral for the loan.

Sec. 2306.754. OWNER-BUILDER ELIGIBILITY. (a) The department shall establish eligibility requirements for owner-builders to participate in the program. The eligibility requirements must include a priority for owner-builders who are individuals or families of very low or extremely low income.

(b) The department may select nonprofit housing assistance organizations to certify the eligibility of owner-builders to participate in the interim construction loan program. A nonprofit housing assistance organization selected by the department shall use the eligibility requirements established by the department to certify the eligibility of an owner-builder for the program.

Sec. 2306.755. PARTICIPANT DUTIES. A construction supply company or nonprofit housing assistance organization that participates in the program shall:

(1) administer the interim construction loan;

(2) provide technical assistance to the owner-builder for improvements made to the property;

(3) perform the necessary inspections for improvements made to the property; and

(4) warrant that funds provided under the interim construction loan have been used exclusively for eligible purposes under this subchapter.

Sec. 2306.756. REFINANCING ASSISTANCE. (a) The department shall assist an owner-builder who obtains an interim construction loan under the program to refinance the loan to:

(1) pay the balance of the interim construction loan; and

(2) obtain a mortgage loan on the improved property.

(b) The department shall identify:

(1) private lenders to provide private market-rate mortgages for low-income owner-builders who obtain loans under the program; and

(2) nonprofit housing assistance organizations and housing assistance programs to aid owner-builders who do not qualify for private market-rate mortgages.

Sec. 2306.757. FUNDING. (a) The department may not spend state money to fund a loan guarantee issued under this subchapter.

(b) The department shall identify funds that are appropriate for the program.

(c) The department may cooperate with nonprofit housing assistance organizations to establish loan guarantee pools that may be used to obtain loans for the purposes of this subchapter.

Sec. 2306.758. REPORTING DUTIES. The department shall:

(1) compose an annual report that evaluates the repayment history and any coinciding loan guarantee issued under a program under this subchapter;

(2) report the loan amounts, uses, nature of improvements funded, and the incomes of the owner-builders who participate in the program;

(3) make recommendations to improve the effectiveness and efficiency of the program; and

(4) deliver a copy of the report to the governor, the lieutenant governor, and the speaker of the house of representatives.

SECTION 2. (a) This Act takes effect September 1, 1999.

(b) The Texas Department of Housing and Community Affairs shall deliver the first report required by Section 2306.758, Government Code, as added by this Act, not later than January 1, 2001.

(c) The Texas Department of Housing and Community Affairs shall select an economically distressed area, as defined by Section 16.341, Water Code, or a census tract delineated by the U.S. Bureau of the Census in which the median family income as reported by the bureau is less than 80 percent of the area median family income in which to implement the pilot program required by Subchapter FF, Chapter 2306, Government Code, as added by this Act.

(d) The Texas Department of Housing and Community Affairs may not enter into a participation agreement under the pilot program authorized by Subchapter FF, Chapter 2306, Government Code, as added by this Act, on or after September 1, 2001.

SECTION 3. The importance of this legislation and the crowded condition of the calendars in both houses create an emergency and an imperative public necessity that the constitutional rule requiring bills to be read on three several days in each house be suspended, and this rule is hereby suspended.

The Conference Committee Report was filed with the Secretary of the Senate.

CONFERENCE COMMITTEE REPORT ON

HOUSE BILL 3582

Senator Brown submitted the following Conference Committee Report:

Austin, Texas

May 28, 1999

Honorable Rick Perry

President of the Senate

Honorable James E. "Pete" Laney

Speaker of the House of Representatives

Sirs:

We, Your Conference Committee, appointed to adjust the differences between the Senate and the House of Representatives on HB 3582 have had the same under consideration, and beg to report it back with the recommendation that it do pass.

BROWN ALVARADO

LUCIO CRADDICK

SHAPLEIGH NIXON

ARMBRISTER KEFFER

HAYWOOD

On the part of the Senate On the part of the House

The Conference Committee Report was filed with the Secretary of the Senate.

CONFERENCE COMMITTEE REPORT ON

HOUSE BILL 1603

Senator Harris submitted the following Conference Committee Report:

Austin, Texas

May 28, 1999

Honorable Rick Perry

President of the Senate

Honorable James E. "Pete" Laney

Speaker of the House of Representatives

Sirs:

We, Your Conference Committee, appointed to adjust the differences between the Senate and the House of Representatives on HB 1603 have had the same under consideration, and beg to report it back with the recommendation that it do pass.

HARRIS THOMPSON

NELSON CAPELO

MADLA HINOJOSA

On the part of the Senate On the part of the House

The Conference Committee Report was filed with the Secretary of the Senate.

CONFERENCE COMMITTEE REPORT ON

HOUSE BILL 1223

Senator Armbrister submitted the following Conference Committee Report:

Austin, Texas

May 28, 1999

Honorable Rick Perry

President of the Senate

Honorable James E. "Pete" Laney

Speaker of the House of Representatives

Sirs:

We, Your Conference Committee, appointed to adjust the differences between the Senate and the House of Representatives on HB 1223 have had the same under consideration, and beg to report it back with the recommendation that it do pass.

ARMBRISTER SEAMAN

SHAPIRO HUNTER

WENTWORTH UHER

ZAFFIRINI LUNA

SHAPLEIGH P. MORENO

On the part of the Senate On the part of the House

The Conference Committee Report was filed with the Secretary of the Senate.

CONFERENCE COMMITTEE REPORT ON

SENATE BILL 1237

Senator Nelson submitted the following Conference Committee Report:

Austin, Texas

May 26, 1999

Honorable Rick Perry

President of the Senate

Honorable James E. "Pete" Laney

Speaker of the House of Representatives

Sirs:

We, Your Conference Committee, appointed to adjust the differences between the Senate and the House of Representatives on SB 1237 have had the same under consideration, and beg to report it back with the recommendation that it do pass in the form and text hereto attached.

NELSON VAN DE PUTTE

MONCRIEF UHER

ARMBRISTER J. MORENO

JACKSON

BERNSEN

On the part of the Senate On the part of the House

A BILL TO BE ENTITLED

AN ACT

relating to the administration of pharmacy benefits under certain health benefit plans.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 1, Article 21.07-6, Insurance Code, is amended by amending Subdivision (1) and adding Subdivision (9) to read as follows:

(1) "Administrator" means a person who collects premiums or contributions from or who adjusts or settles claims in connection with life, health, and accident benefits, including pharmacy benefits, or annuities for residents of this state but does not include:

(A) an employer on behalf of its employees or the employees of one or more subsidiaries or affiliated corporations of the employer;

(B) a union on behalf of its members;

(C) an insurance company or a group hospital service corporation subject to Chapter 20 of this code with respect to a policy lawfully issued and delivered by it in and under the law of a state in which the insurer was authorized to do an insurance business;

(D) a health maintenance organization that is authorized to operate in this state under the Texas Health Maintenance Organization Act (Chapter 20A, Vernon's Texas Insurance Code), with respect to any activity that is specifically regulated under that Act;

(E) an agent licensed under Article 21.07 or Chapter 213, Acts of the 54th Legislature, Regular Session, 1955 (Article 21.07-1, Vernon's Texas Insurance Code), who is acting under appointment on behalf of an insurance company authorized to do business in this state and within the customary scope and duties of the insurance agent's authority as an agent and who receives commissions as an agent;

(F) a creditor who is acting on behalf of its debtors with respect to insurance that covers a debt between the creditor and its debtor so long as only the functions of a group policyholder or creditor are performed;

(G) a trust established in conformity with 29 U.S.C. Section 186 and the trustees and employees who are acting under the trust;

(H) a trust that is exempt from taxation under Section 501(a) of the Internal Revenue Code of 1986 and the trustees and employees acting under the trust, or a custodian and the custodian's agents and employees who are acting pursuant to a custodian account that complies with Section 401(f), Internal Revenue Code of 1986;

(I) a bank, credit union, savings and loan association, or other financial institution that is subject to supervision or examination under federal or state law by federal or state regulatory authorities so long as that institution is performing only those functions for which it holds a license under federal or state law;

(J) a company that advances and collects a premium or charge from its credit card holders on their authorization, if the company does not adjust or settle claims and acts only in the company's debtor-creditor relationship with its credit card holders;

(K) a person who adjusts or settles claims in the normal course of his practice or employment as a licensed attorney and who does not collect any premium or charge in connection with life, health, or accident benefits, including pharmacy benefits, or annuities;

(L) an adjuster licensed by the commissioner, if the adjuster is engaged in the performance of his powers and duties as an adjuster within the scope of his license;

(M) a person who provides technical, advisory, utilization review, precertification, or consulting services to an insurer, plan, or plan sponsor and who does not make any management or discretionary decisions on behalf of an insurer, plan, or plan sponsor;

(N) an attorney in fact for a Lloyd's operating under Chapter 18 of this code or a reciprocal or interinsurance exchange operating under Chapter 19 of this code if acting in the capacity of attorney in fact under the applicable chapter;

(O) a municipality that is self-insured or a joint fund, risk management pool, or a self-insurance pool composed of political subdivisions of this state that participate in a fund or pool through interlocal agreements and any nonprofit administrative agency or governing body or any nonprofit entity that acts solely on behalf of a fund, pool, agency, or body or any other funds, pools, agencies, or bodies that are established pursuant to or for the purpose of implementing an interlocal governmental agreement;

(P) a self-insured political subdivision;

(Q) a plan under which insurance benefits are provided exclusively by a carrier licensed to do business in this state and the administrator of the plan is either:

(i) a full-time employee of the plan's organizing or sponsoring association, trust, or other entity; or

(ii) the trustee or trustees of the organizing or sponsoring trust; or

(R) a parent of a wholly owned direct or indirect subsidiary insurer licensed to do business in this state or a wholly owned direct or indirect subsidiary insurer that is a part of the parent's holding company system that, only on behalf of itself or its affiliated insurers:

(i) collects premiums or contributions, if the parent or subsidiary insurer prepares only billing statements, places those statements in the United States mail, and causes all collected premiums to be deposited directly in a depository account of the particular affiliated insurer, and the services rendered by the parent or subsidiary are performed under an agreement regulated and approved under Article 21.49-1 of this code or a similar statute of the domiciliary state if the parent or subsidiary is a foreign insurer doing business in this state; or

(ii) furnishes proof-of-loss forms, reviews claims, determines the amount of the liability for those claims, and negotiates settlements, but pays claims only from the funds of the particular subsidiary by checks or drafts of that subsidiary and the services rendered by the parent or subsidiary are performed under an agreement regulated and approved under Article 21.49-1 of this code or a similar statute of the domiciliary state if the parent or subsidiary is a foreign insurer doing business in this state.

(9) "Pharmacy benefit manager" means a person, other than a pharmacy or pharmacist, who acts as an administrator in connection with pharmacy benefits.

SECTION 2. Article 21.07-6, Insurance Code, is amended by adding Section 19A to read as follows:

Sec. 19A. IDENTIFICATION CARDS FOR CERTAIN PLANS. (a) Except as provided by rules adopted by the commissioner, an administrator for a plan that provides pharmacy benefits shall issue an identification card to each individual covered by the plan.

(b) The commissioner by rule shall adopt standard information to be included on the identification card. At minimum, the standard form identification card must include:

(1) the name or logo of the entity that is administering the pharmacy benefits;

(2) the International Identification Number that is assigned by the American National Standards Institute for the entity that is administering the pharmacy benefits;

(3) the group number applicable for the individual;

(4) the effective date of the coverage evidenced by the card;

(5) a telephone number to be used to contact an appropriate person to obtain information relating to the pharmacy benefits provided under the coverage; and

(6) copayment information for generic and brand-name prescription drugs.

(c) An administrator for a plan that provides pharmacy benefits shall issue to an individual an identification card not later than the 30th day after the date the administrator receives notice that the individual is eligible for the benefits.

SECTION 3. Article 21.07-6, Insurance Code, is amended by adding Section 19B to read as follows:

Sec. 19B. DISCLOSURE OF CERTAIN PATIENT INFORMATION PROHIBITED. (a) A pharmacy benefit manager may not sell a list of patients that contains information through which the identity of individual patients is disclosed.

(b) All data that identifies a patient maintained by the pharmacy benefit manager shall be maintained in a confidential manner that prevents disclosure to third parties, unless the disclosure is otherwise authorized by law or by the patient.

(c) This section does not prohibit:

(1) general advertising about a specific pharmaceutical product or service;

(2) a person from requesting and receiving information regarding a specific pharmaceutical product or service; or

(3) a person from requesting and receiving information regarding the person's own records or claims, or information regarding the person's dependent's records or claims.

SECTION 4. Subchapter E, Chapter 21, Insurance Code, is amended by adding Article 21.53L to read as follows:

Art. 21.53L. PHARMACY BENEFIT CARDS

Sec. 1. DEFINITION. In this article, "health benefit plan" means a health benefit plan described by Section 2 of this article.

Sec. 2. SCOPE OF ARTICLE. (a) This article applies only to a health benefit plan that provides benefits for medical or surgical expenses incurred as a result of a health condition, accident, or sickness, including an individual, group, blanket, or franchise insurance policy or insurance agreement, a group hospital service contract, or an individual or group evidence of coverage or similar coverage document that is offered by:

(1) an insurance company;

(2) a group hospital service corporation operating under Chapter 20 of this code;

(3) a fraternal benefit society operating under Chapter 10 of this code;

(4) a stipulated premium insurance company operating under Chapter 22 of this code;

(5) a reciprocal exchange operating under Chapter 19 of this code;

(6) a health maintenance organization operating under the Texas Health Maintenance Organization Act (Chapter 20A, Vernon's Texas Insurance Code);

(7) a multiple employer welfare arrangement that holds a certificate of authority under Article 3.95-2 of this code; or

(8) an approved nonprofit health corporation that holds a certificate of authority issued by the commissioner under Article 21.52F of this code.

(b) This article does not apply to:

(1) a plan that provides coverage:

(A) only for a specified disease or other limited benefit;

(B) only for accidental death or dismemberment;

(C) for wages or payments in lieu of wages for a period during which an employee is absent from work because of sickness or injury;

(D) as a supplement to liability insurance;

(E) for credit insurance;

(F) only for dental or vision care;

(G) only for hospital expenses; or

(H) only for indemnity for hospital confinement;

(2) a small employer health benefit plan written under Chapter 26 of this code;

(3) a Medicare supplemental policy as defined by Section 1882(g)(1), Social Security Act (42 U.S.C. Section 1395ss);

(4) workers' compensation insurance coverage;

(5) medical payment insurance coverage issued as part of a motor vehicle insurance policy; or

(6) a long-term care policy, including a nursing home fixed indemnity policy, unless the commissioner determines that the policy provides benefit coverage so comprehensive that the policy is a health benefit plan as described by Subsection (a) of this section.

Sec. 3. IDENTIFICATION CARD; PHARMACY BENEFITS. (a) A health benefit plan that provides pharmacy benefits for enrollees in the plan shall include on the identification card of each enrollee:

(1) the name or logo of the entity that is administering the pharmacy benefits, if different from the health benefit plan;

(2) the group number applicable to the individual;

(3) the effective date of the coverage evidenced by the card;

(4) a telephone number to be used to contact an appropriate person to obtain information relating to the pharmacy benefits provided under the coverage; and

(5) copayment information for generic and brand-name prescription drugs.

(b) This section does not require a health benefit plan that administers its own pharmacy benefits to issue an identification card separate from any identification card issued to an enrollee to evidence coverage under the health benefit plan, if the identification card contains the elements required by Subsection (a) of this section.

Sec. 4. RULES. The commissioner shall adopt rules as necessary to implement this article.

SECTION 5. This Act takes effect September 1, 1999.

SECTION 6. (a) This Act applies only to a person acting as an administrator, as that term is defined by Subdivision (1), Section 1, Article 21.07-6, Insurance Code, as amended by this Act, with respect to pharmacy benefits on or after January 1, 2000. A person acting as an administrator with respect to pharmacy benefits before January 1, 2000, is governed by the law as it existed immediately before the effective date of this Act, and that law is continued in effect for that purpose.

(b) An administrator, as that term is defined by Subdivision (1), Section 1, Article 21.07-6, Insurance Code, as amended by this Act, is not required to issue a new

identification card to an individual, as required by Section 19A, Article 21.07-6, Insurance Code, as added by this Act, if the identification card held by the individual on the effective date of this Act contains the elements described by Subdivisions (2) through (5), Subsection (b), Section 19A, Article 21.07-6, Insurance Code, as added by this Act. A new card complying with Section 19A, Article 21.07-6, Insurance Code, as added by this Act, must be issued at the time the individual's coverage is modified.

(c) A health benefit plan, as that term is defined by Section 1, Article 21.53L, Insurance Code, as added by this Act, is not required to issue a new identification card to an enrollee, as required by Section 3, Article 21.53L, Insurance Code, as added by this Act, if the identification card held by the enrollee on the effective date of this Act contains the elements described by Subdivisions (2), (3), and (4), Subsection (a), Section 3, Article 21.53L, Insurance Code, as added by this Act. A new card complying with Article 21.53L, Insurance Code, as added by this Act, must be issued at the time the enrollee's coverage is modified.

SECTION 7. The importance of this legislation and the crowded condition of the calendars in both houses create an emergency and an imperative public necessity that the constitutional rule requiring bills to be read on three several days in each house be suspended, and this rule is hereby suspended.

The Conference Committee Report was filed with the Secretary of the Senate.

CONFERENCE COMMITTEE REPORT ON

SENATE BILL 1128

Senator Armbrister submitted the following Conference Committee Report:

Austin, Texas

May 27, 1999

Honorable Rick Perry

President of the Senate

Honorable James E. "Pete" Laney

Speaker of the House of Representatives

Sirs:

We, Your Conference Committee, appointed to adjust the differences between the Senate and the House of Representatives on SB 1128 have had the same under consideration, and beg to report it back with the recommendation that it do pass in the form and text hereto attached.

ARMBRISTER GREENBERG

NELSON WALKER

LUCIO TELFORD

BERNSEN MCCLENDON

BIVINS

On the part of the Senate On the part of the House

A BILL TO BE ENTITLED

AN ACT

relating to systems and programs administered by the Teacher Retirement System of Texas.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 822.201, Government Code, is amended by amending Subsection (b), as amended by Chapters 330 and 1035, Acts of the 75th Legislature, Regular Session, 1997, and adding Subsection (e) to read as follows:

(b) "Salary and wages" as used in Subsection (a) means:

(1) normal periodic payments of money for service the right to which accrues on a regular basis in proportion to the service performed;

(2) amounts by which the member's salary is reduced under a salary reduction agreement authorized by Chapter 610;

(3) amounts that would otherwise qualify as salary and wages under Subdivision (1) but are not received directly by the member pursuant to a good faith, voluntary written salary reduction agreement in order to finance payments to a deferred compensation or tax sheltered annuity program specifically authorized by state law or to finance benefit options under a cafeteria plan qualifying under Section 125 of the Internal Revenue Code of 1986 (26 U.S.C. Section 125), if:

(A) the program or benefit options are made available to all employees of the employer; and

(B) the benefit options in the cafeteria plan are limited to one or more options that provide deferred compensation, group health and disability insurance, group term life insurance, dependent care assistance programs, or group legal services plans; [and ]

(4) performance pay awarded to an employee by a school district as part of a total compensation plan approved by the board of trustees of the district and meeting the requirements of Subsection (e); and[. ]

(5) [(4) ] the benefit replacement pay a person earns under Subchapter H, Chapter 659, as added by Chapter 417, Acts of the 74th Legislature, 1995, except as provided by Subsection (c).

(e) For purposes of Subsection (b)(4), a total compensation plan must:

(1) describe all elements of compensation received by or available to all employees of the employer;

(2) provide for the availability of at least one type of performance pay to classroom teachers employed by the employer;

(3) identify each type of performance pay, the performance criteria for each type of performance pay, and the classes of employees eligible for each type of performance pay;

(4) contain sufficient information concerning the plan to ascertain the amount of each qualifying employee's pay under the plan;

(5) contain performance criteria for earning performance pay that preclude the exercise of discretion for awarding the pay on any basis other than an evaluation of employee or group performance or availability of funding; and

(6) satisfy any other requirements adopted by the retirement system.

SECTION 2. Subchapter A, Chapter 823, Government Code, is amended by adding Section 823.006 to read as follows:

Sec. 823.006. PERMISSIVE SERVICE CREDIT RESTRICTIONS. (a) In this section:

(1) "Nonqualified service" means service for which permissive service credit is authorized by this subtitle, other than:

(A) military service; and

(B) service for any agency or instrumentality of this state, including a political subdivision of this state, or for any public school supported by the United

States or a state or territory of the United States, if credit for the service would not cause a person to receive a retirement benefit for the same service from more than one retirement system or program.

(2) "Permissive service credit" means service credit:

(A) that is not membership credit authorized to be reinstated;

(B) that is recognized under this subtitle for purposes of computing a member's benefit under the retirement system;

(C) for which the member has not received credit with the retirement system; and

(D) that a member may receive only by making a voluntary additional contribution in an amount determined as provided by this subtitle that does not exceed the amount necessary to fund the benefit attributable to the service credit.

(b) The purchase of permissive service credit by a person who first becomes a member of the retirement system after August 31, 2000, is subject to the restrictions and conditions of Subsection (d) in addition to all other requirements of this subtitle applicable to the purchase.

(c) The purchase by any person of permissive service credit that was first made available under the retirement system after December 31, 1997, is subject to the restrictions and conditions of Subsection (d) in addition to all other requirements of this subtitle applicable to the purchase.

(d) Under a circumstance described by Subsection (b) or (c), a member may not purchase more than five years of permissive service credit for nonqualified service, and a member may not purchase service credit for nonqualified service before the member has at least five years of membership service credit.

SECTION 3. Subchapter C, Chapter 823, Government Code, is amended by adding Section 823.203 to read as follows:

Sec. 823.203. MEMBERSHIP SERVICE FOR OPTIONAL RETIREMENT PROGRAM. A member may not establish service credit in the retirement system for any period when the member was participating in the optional retirement program under Chapter 830.

SECTION 4. Section 823.401, Government Code, is amended by adding Subsection (j) to read as follows:

(j) The board of trustees may adopt rules providing for the adoption of a reciprocal agreement with a state or territory of a member's previous employment for the payment for service credit established under this section through the transfer from the state or territory to the retirement system of contributions made on behalf of the member in the form of an eligible rollover distribution as provided by Section 401(a)(31), Internal Revenue Code of 1986, and its subsequent amendments.

SECTION 5. Sections 823.501(b) and (f), Government Code, are amended to read as follows:

(b) A person eligible to reinstate service credit under this section is one who is a [contributing ] member of the retirement system at the time the service is reinstated.

(f) A [contributing ] member may have an account that was terminated by absence from service reactivated by requesting the reactivation in writing. The beneficiary of a decedent who was a [contributing ] member at the time of death may have an account that was terminated by the decedent's absence from service reactivated by requesting the reactivation in writing before the first payment of a death benefit.

SECTION 6. Section 824.101(c), Government Code, is amended to read as follows:

(c) Only one person may be designated as beneficiary of an optional retirement annuity under Section 824.204(c)(1), (c)(2), or (c)(5), and a designation of beneficiary under any of those options may not be made, changed, or revoked, except as provided by Sections 824.1011, [and ] 824.1012, and 824.1013, after the later of the date on which the retirement system makes the first annuity payment to the retiree or the date the first payment becomes due. For purposes of this section, the term "makes payment" includes the depositing in the mail of a payment warrant or the crediting of an account with payment through electronic funds transfer.

SECTION 7. Section 824.1011(a), Government Code, is amended to read as follows:

(a) A retiree who is receiving a standard service or disability retirement annuity under Section 824.203 or 824.304(b) and who marries after the date of the person's retirement may replace the annuity by selecting an optional retirement annuity under Section 824.204(c)(1), (c)(2), or (c)(5) or under Section 824.308(c)(1), (c)(2), or (c)(5), as applicable, and designating the person's spouse as beneficiary before the second [first ] anniversary of the marriage in the same manner as an annuity selection and designation of beneficiary may be made before retirement.

SECTION 8. Section 824.1012(a), Government Code, as added by Chapter 401, Acts of the 75th Legislature, Regular Session, 1997, is amended to read as follows:

(a) As an exception to Section 824.101(c), a retiree who selected an optional service retirement annuity under Section 824.204(c)(1), (c)(2), or (c)(5) or an optional disability retirement annuity under Section 824.308(c)(1), (c)(2), or (c)(5) may revoke the designation of the beneficiary to receive the annuity on the death of the retiree, if a court in a divorce proceeding involving the retiree and beneficiary approves or orders the revocation in the divorce decree or acceptance of a property settlement or if the beneficiary is an adult child of the retiree and signs a notarized consent to the revocation. The revocation takes effect when the retirement system receives it.

SECTION 9. Section 824.1012, Government Code, as added by Chapter 1416, Acts of the 75th Legislature, Regular Session, 1997, is redesignated as Section 824.1013 to read as follows:

Sec. 824.1013 [824.1012 ]. CHANGE OF BENEFICIARY AFTER RETIREMENT. (a) A retiree receiving an optional retirement annuity under Section 824.204(c)(1), (c)(2), or (c)(5) or Section 824.308(c)(1), (c)(2), or (c)(5) may change the designated beneficiary as provided by this section for the benefits payable after the retiree's death under those sections.

(b) If the beneficiary designated at the time of the retiree's retirement is the spouse or former spouse of the retiree:

(1) the spouse or former spouse must give written, notarized consent to the change; or

(2) a court with jurisdiction over the marriage must have ordered the change.

(c) A beneficiary designated under this section is entitled on the retiree's death to receive monthly payments of the survivor's portion of the retiree's optional retirement annuity for the shorter of:

(1) the remainder of the life expectancy of the beneficiary designated as of the effective date of the retiree's retirement; or

(2) the remainder of the new beneficiary's life.

(d) A retiree may not change a beneficiary under this section after retirement if the retiree has previously changed or designated after retirement a beneficiary for optional retirement annuity payments under this subtitle.

SECTION 10. Sections 824.203(a) and (e), Government Code, are amended to read as follows:

(a) Except as provided by Subsections (c), (d), and (e), the standard service retirement annuity is an amount computed on the basis of the member's average annual compensation for the three years of service, whether or not consecutive, in which the member received the highest annual compensation, times 2.2 [two ] percent for each year of service credit in the retirement system.

(e) The annual standard service retirement annuity for a person who immediately before retirement holds a position as a classroom teacher or full-time librarian, or the annual death benefit annuity based on the service of a member who at the time of death held a position as a classroom teacher or full-time librarian, may not be less than an amount computed on the basis of the minimum annual salary provided by the Education Code for a classroom teacher or full-time librarian, multiplied by 2.2 [two ] percent for each year of service credit in the retirement system.

SECTION 11. Subchapter C, Chapter 824, Government Code, is amended by adding Section 824.2045 to read as follows:

Sec. 824.2045. PARTIAL LUMP-SUM OPTION. (a) A member who is eligible for an unreduced service retirement annuity and is not participating in the deferred retirement option plan under Subchapter I may select a standard service retirement annuity or an optional service retirement annuity described by Section 824.204, together with a partial lump-sum distribution.

(b) The amount of the lump-sum distribution under this section may not exceed the sum of 36 months of a standard service retirement annuity computed without regard to this section.

(c) The service retirement annuity selected by the member shall be actuarially reduced to reflect the lump-sum option selected by the member and shall be actuarially equivalent to a standard or optional service retirement annuity, as applicable, without the partial lump-sum distribution. The annuity and lump sum shall be computed to result in no actuarial loss to the retirement system.

(d) The retiring member may choose a lump sum equal to 12 months of a standard service retirement annuity and payable at the same time that the first monthly payment of the annuity is paid, a lump sum equal to 24 months of a standard annuity and payable in one or two annual payments, or a lump sum equal to 36 months of a standard annuity and payable in one, two, or three annual payments. At the option of the member, a payment under this subsection may be made as provided by Section 825.509.

(e) The amount of the lump-sum distribution will be deducted from any amounts otherwise payable under Section 824.503.

(f) The partial lump-sum option under this section may be elected only once by a member and may not be elected by a retiree. A member retiring under the proportionate retirement program under Chapter 803 is not eligible for the partial lump-sum option.

(g) Before a retiring member selects a partial lump-sum distribution under this section, the retirement system shall provide a written notice to the member of the amount by which the member's annuity will be reduced because of the selection. The member shall be asked to sign a copy of or receipt for the notice, and the retirement system shall maintain the signed copy or receipt.

(h) The board of trustees may adopt rules for the implementation of this section.

SECTION 12. Section 824.402, Government Code, is amended by redesignating existing Subsection (b) as Subsection (c) and adding new Subsection (b) to read as follows:

(b) In addition to the benefits provided under Subsection (a), the designated beneficiary of a member who is an employee of a school district and who dies as the result of a physical assault during the performance of the employee's regular duties is eligible to receive a lump-sum death benefit payment in the amount of $160,000.

(c) The board of trustees by rule may prescribe the manner of payment of benefits under this section.

SECTION 13. Section 824.502, Government Code, is amended to read as follows:

Sec. 824.502. BENEFITS ON DEATH OF DISABILITY RETIREE. The designated beneficiary of a disability retiree who retires before September 1, 1992, who has not selected an optional annuity under Section 824.308, and who dies while receiving a retirement benefit may elect to receive, instead of survivor benefits provided by Section 824.501, a benefit available under Section 824.402, computed as if the decedent had been in service at the time of death.

SECTION 14. Sections 824.602(a) and (d), Government Code, are amended to read as follows:

(a) Subject to Section 825.506, the [The ] retirement system may not, under Section 824.601, withhold a monthly benefit payment if the retiree is employed in a Texas public educational institution:

(1) as a substitute only with pay not more than the daily rate of substitute pay established by the employer and, if the retiree is a disability retiree, the employment has not exceeded a total of 90 days in the school year;

(2) in a position, other than as a substitute, on no more than a one-half time basis for the month;

(3) in one or more positions on as much as a full-time basis, if[:

[(A) ] the work occurs in not more than six months of a school year that begins after the retiree's effective date of retirement;

[(B) the work occurs in no more than six months of the school year; and

[(C) the retiree executes on a form and within any deadline prescribed by the retirement system a written election to have this exception apply for the school year in determining whether benefits are to be suspended for employment after retirement; or ]

(4) in a position, other than as a substitute, on no more than a one-half time basis for no more than 90 days in the school year, if the retiree is a disability retiree; or

(5) in a position as a classroom teacher on as much as a full-time basis, if the retiree has retired under Section 824.202(a) without reduction for retirement at an early age, is certified under Subchapter B, Chapter 21, Education Code, to teach the subjects assigned, is teaching in an acute shortage area as defined by the commissioner of education, and has been separated from service with all public schools for at least 12 months.

(d) A retiree to whom [who has elected to avoid loss of monthly benefits in a school year pursuant to ] Subsection (a)(3) applies is not eligible during that school year for any other exceptions to loss of benefits provided in this section. If a retiree is employed under [elects ] the exemption provided in Subsection (a)(3) for a school year, the retirement system must include any previous employment during the school year, including any employment that relied upon the exemptions in Subsection (a)(1) or (a)(2), in determining whether and when the retiree has exceeded six months of employment in the school year.

SECTION 15. Sections 824.804(a) and (d), Government Code, are amended to read as follows:

(a) On the effective date of a member's participation in the plan, the retirement system shall make the transfers required by Section 825.309 to the retired reserve account as if the member had retired on that date. The retirement system shall transfer monthly, during the period of the member's participation in the plan, from the retired reserve account to an account for the member in the deferred retirement option account an amount equal to:

(1) 60 percent of the amount the member would have received that month under a standard service retirement annuity if the member had retired under the multiplier currently in effect; or

(2) if the member began participation in the plan before September 1, 1999, 79 percent of the amount the member would have received that month under a standard service retirement annuity if the member had retired under the multiplier currently in effect [on the effective date of plan participation ].

(d) Payment of the benefit provided under the plan is in addition to any annuity otherwise payable under this subtitle. The retiring member may choose a DROP payment in accordance with the provisions of Section 825.509.

SECTION 16. Section 824.805, Government Code, is amended to read as follows:

Sec. 824.805. TERMINATION OF PARTICIPATION IN PLAN. (a) Except as provided by Subsection (b), a [A ] member terminates participation in the plan by:

(1) retirement;

(2) death; or

(3) expiration of the period for which participation was approved.

(b) A member participating in the plan on September 1, 1999, may, before September 1, 2000, elect to discontinue participation in the plan on a form prescribed by and filed with the retirement system. The retirement system shall make account transfers and change records for a member who elects under this subsection to discontinue participation in the plan as if the member had never participated in the plan.

SECTION 17. Section 825.301, Government Code, is amended by amending Subsection (a) and adding Subsection (a-1) to read as follows:

(a) The board of trustees shall invest and reinvest assets of the retirement system without distinction as to their source in accordance with Section 67, Article XVI, Texas Constitution. For purposes of the investment authority of the board of trustees under Section 67, Article XVI, Texas Constitution, "securities" means any investment instrument within the meaning of the term as defined by Section 4, The Securities Act (Article 581-4, Vernon's Texas Civil Statutes), 15 U.S.C. Section 77b(a)(1), or 15 U.S.C. Section 78c(a)(10). An interest in a limited partnership or investment contract is considered a security without regard to the number of investors or the control, access to information, or rights granted to or retained by the retirement system. Any instrument or contract intended to manage transaction or currency exchange risk in purchasing, selling, or holding securities is considered to be a security. Investment decisions are subject to the standard provided in the Texas Trust Code by Section 113.056(a), Property Code.

(a-1) The legislative audit committee shall select an independent firm during the biennium beginning September 1, 1999, to evaluate the retirement system's

investment practices and performance under Subsection (a) as provided by Section 825.512. This subsection expires January 1, 2001.

SECTION 18. The heading of Section 825.303, Government Code, is amended to read as follows:

Sec. 825.303. SECURITIES CUSTODY AND SECURITIES LENDING.

SECTION 19. Section 825.303(a), Government Code, is amended to read as follows:

(a) The retirement system may, in the exercise of its constitutional discretion to manage the assets of the retirement system, select one or more commercial banks, depository trust companies, or other entities to serve as custodian or custodians of the system's securities and to lend the securities under rules adopted by the board of trustees and as required by this section. The retirement system may select one or more commercial banks, depository trust companies, or other entities to act independently of the custodian and lend the securities under board rules and as required by this section.

SECTION 20. Section 825.405(c), Government Code, is amended to read as follows:

(c) Monthly, employers shall:

(1) report to the retirement system in a form prescribed by the system a certification of the total amount of salary paid above the statutory minimum salary and the total amount of employer contributions due under this section for the payroll period; and

(2) retain information, as determined by the retirement system, sufficient to allow administration of this section, [The employer's form showing deductions and certification of earnings must provide the retirement system with information sufficient to administer this section, as determined by the system, ] including information for each employee showing the applicable minimum salary as well as aggregate annual compensation.

SECTION 21. Section 825.406(c), Government Code, is amended to read as follows:

(c) Monthly, employers shall:

(1) report to the retirement system in a form prescribed by the system a certification of the total amount of salary paid from federal funds and private grants and the total amounts provided by the funds and grants for state contributions for the employees; and

(2) retain the following information:

(A) [(1) ] the name of each employee paid in whole or part from a grant;

(B) [(2) ] the source of the grant;

(C) [(3) ] the amount of the employee's salary paid from the grant;

(D) [(4) ] the amount of the money provided by the grant for state contributions for the employee; and

(E) [(5) ] any other information the retirement system determines is necessary to enforce this section.

SECTION 22. Section 825.407(c), Government Code, is amended to read as follows:

(c) The designated disbursing officer of each general academic teaching institution and the designated disbursing officer of each medical and dental unit shall:

(1) submit to the retirement system, at a time and in the manner prescribed by the retirement system, a monthly report containing a certification of the total amount

of salary paid from noneducational and general funds and the total amount of employer contributions due under this section for the payroll period; and

(2) maintain and retain the following information:

(A) [(1) ] the name of each member employed by the institution or unit who, for the most recent payroll period, was paid wholly or partly from noneducational and general funds;

(B) [(2) ] the amount of the employee's salary for the most recent payroll period that was paid from noneducational and general funds;

[(3) a certification of the total amount of employer contributions due under this section for the payroll period; ] and

(C) [(4) ] any other information the retirement system determines is necessary to administer this section.

SECTION 23. Section 825.408(a), Government Code, is amended to read as follows:

(a) An employing district that fails to remit, before the 11th day after the last day of a month, all member and employer deposits and documentation of the deposits required by this subchapter to be remitted by the district for the month shall pay to the retirement system, in addition to the deposits, interest on the unpaid or undocumented amounts at an annual rate compounded monthly. The rate of interest is the rate established under Section 825.313(b)(2), plus two percent. Interest required under this section is creditable to the interest account.

SECTION 24. Section 825.515, Government Code, is amended to read as follows:

Sec. 825.515. INFORMATION ABOUT MEMBER POSITIONS. (a) At least annually, the [The ] retirement system shall acquire and maintain records identifying members and the types of positions they hold [have held ] as members[, the length of service in each type of position, and whether service in each type of position is or was as a full-time employee ]. The type of position shall be identified as Administrative/Professional, Teacher/Full-Time Librarian, Support, or Bus Driver. [The retirement system shall cooperate with the commissioner of education in maintaining information about the employment status of members of the retirement system. ]

(b) [Each school year, the retirement system shall provide to the commissioner of education information, of a type and in a form determined by the commissioner, that allows contributing members of the retirement system to be identified in information submitted to the commissioner by school districts under the Education Code.

[(c) ] Information contained in records of the retirement system maintained under this section is confidential within the limits prescribed by Section 825.507.

SECTION 25. Sections 825.516(a) and (b), Government Code, are amended to read as follows:

(a) A retiree who is receiving an annuity from the retirement system may request the system to withhold from the retiree's monthly annuity payment membership dues for a nonprofit association of retired school employees in this state, if the association is statewide and its membership includes at least five percent of all retirees of the retirement system. The request for withholding must be on a form provided by the retirement system.

(b) After the retirement system receives a request authorized by this section, the system may [shall ] make the requested deductions until the earlier of:

(1) the date the annuity is terminated; or

(2) the first payment of the annuity after the date the system receives a written request signed by the retiree canceling the request for the withholding.

SECTION 26. Section 16A(d), Article 3.50-4, Insurance Code, is amended to read as follows:

(d) Monthly, employers shall:

(1) report to the trustee in a form prescribed by the trustee a certification of the total amount of salary paid from federal funds and private grants and the total amounts provided by the funds and grants for state contributions for the employees; and

(2) maintain and retain the following information:

(A) [(1) ] the name of each [active ] employee paid in whole or part from a grant;

(B) [(2) ] the source of the grant;

(C) [(3) ] the amount of the [active ] employee's salary paid from the grant;

(D) [(4) ] the amount of the money provided by the grant for state contributions for the [active ] employee; and

(E) [(5) ] any other information the trustee determines is necessary to enforce this section.

SECTION 27. Subchapter E, Chapter 3, Insurance Code, is amended by adding Article 3.50-4A to read as follows:

Art. 3.50-4A. INSURANCE FOR SCHOOL DISTRICT EMPLOYEES AND RETIREES

Sec. 1. DEFINITIONS. In this article:

(1) "Employee" means a person who is a participating member of the Teacher Retirement System of Texas and is not participating in a group insurance program under the Texas Employees Uniform Group Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance Code) or the Texas State College and University Employees Uniform Insurance Benefits Act (Article 3.50-3, Vernon's Texas Insurance Code).

(2) "Retiree" means a person who:

(A) has retired under the Teacher Retirement System of Texas with at least 10 years of credit for service in public schools of this state or has retired under that system for disability and is entitled to receive an annuity from the system based on the person's service; and

(B) is not eligible to participate in the group insurance program provided under the Texas Employees Uniform Group Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance Code) or the Texas State College and University Employees Uniform Insurance Benefits Act (Article 3.50-3, Vernon's Texas Insurance Code).

(3) "Trustee" means the Teacher Retirement System of Texas.

Sec. 2. INSURANCE COVERAGE. (a) The trustee shall contract with one or more carriers authorized to provide life insurance in this state to offer employees and retirees optional permanent life insurance coverage.

(b) The trustee shall contract with one or more carriers authorized to provide long-term care insurance in this state to offer employees and retirees optional long-term care insurance coverage. The long-term care insurance coverage shall include home, community, and institutional care.

(c) The trustee shall contract with one or more carriers authorized to provide disability insurance in this state to offer employees optional insurance against short-term or long-term loss of salary because of disability.

(d) In contracting for any benefits under this article, competitive bidding shall be required under rules adopted by the trustee. The rules may provide criteria to determine qualified carriers. The trustee is not required to select the lowest bid but also may consider ability to service contracts, past experiences, financial stability, and other relevant criteria. If the trustee awards a contract to an entity whose bid deviates from that advertised, the deviation shall be recorded and the reasons for the deviation shall be fully justified in the minutes of the next meeting of the trustee.

(e) Insurance coverage provided under this section shall be made available periodically during open enrollment periods determined by the trustee.

Sec. 3. ADMINISTRATION. (a) The trustee shall adopt rules for the selection of contractors under this article. The rules must require the contractors to administer enrollment, adjudication of claims, and coordination of services under the insurance coverages and require the contractors to account for premiums collected and disbursed under the coverages.

(b) The trustee may adopt other rules necessary to administer the program provided under this article.

Sec. 4. PARTICIPATION IN COVERAGE. (a) The trustee shall offer the coverages provided under this article to employees through their employers and to retirees through the trustee's administration of the retirement system.

(b) The full cost of premiums in a plan of insurance coverage provided under this article is the responsibility of the enrollees.

(c) An employee participating in a plan of insurance coverage provided under this article shall pay premiums by payroll deduction remitted by the employee's employer at the times and in the manner provided by the trustee.

(d) A retiree participating in a plan of insurance coverage provided under this article shall pay premiums by deduction from the retiree's monthly retirement annuity.

Sec. 5. SCHOOL DISTRICT EMPLOYEES AND RETIREES OPTIONAL INSURANCE TRUST FUND. (a) The school district employees and retirees optional insurance trust fund is created as a trust fund with the comptroller and shall be administered by the trustee on behalf of the participants in the plans of insurance coverage provided under this article.

(b) Premiums paid by enrollees, amounts recovered under contracts for the implementation of the program provided by this article, and investment and depository income of the fund shall be credited to the fund.

(c) Money in the fund may be used only for the purpose of providing the program of insurance coverage provided under this article, including the expenses of administering the program.

(d) The trustee may invest the fund in the manner provided by Section 67(a)(3), Article XVI, Texas Constitution.

SECTION 28. Sections 22.004(c) and (d), Education Code, are amended to read as follows:

(c) Each district shall report the district's compliance with this subsection to the executive director of the Teacher Retirement System of Texas not later than March [November ] 1 of each even-numbered year in the manner required by the board of trustees of the Teacher Retirement System of Texas. The report must be based on the district group health coverage plan in effect during the current plan year [on November 1 ] and must include:

(1) appropriate documentation of:

(A) the district's contract for group health coverage with a provider licensed to do business in this state by the Texas Department of Insurance or a risk pool authorized under Chapter 172, Local Government Code; or

(B) a resolution of the board of trustees of the district authorizing a self-insurance plan for district employees and of the district's review of district ability to cover the liability assumed;

(2) the schedule of benefits;

(3) the premium rate sheet, including the amount paid by the district and employee;

(4) the number of employees covered by each health coverage plan offered by the district; and

(5) any other information considered appropriate by the executive director of the Teacher Retirement System of Texas.

(d) Based on the criteria prescribed by Subsection (a), the executive director of the Teacher Retirement System of Texas shall certify whether a district's coverage is comparable to the basic health coverage provided under the Texas Employees Uniform Group Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance Code). If the executive director of the Teacher Retirement System of Texas determines that the group health coverage offered by a district is not comparable, the executive director shall report that information to the district and to the Legislative Budget Board. The executive director shall submit a report to the legislature not later than September [January ] 1 of each even-numbered [odd numbered ] year describing the status of each district's group health coverage program based on the information contained in the report required by Subsection (c) and the certification required by this subsection.

SECTION 29. (a) Monthly payments of a death or retirement benefit annuity by the Teacher Retirement System of Texas are increased beginning with the payment due at the end of September 1999.

(b) The increase does not apply to payments under Section 824.304(a), 824.404, or 824.501, Government Code.

(c) Except as provided by Subsection (d) of this section, the amount of the monthly increase is computed by multiplying the previous monthly benefit by a percentage determined in accordance with the following table:

LATEST RETIREMENT DATE OR,

IF APPLICABLE, DATE OF DEATH INCREASE

Before September 1, 1973 5%

On or after September 1, 1973, but before September 1, 1974 6%

On or after September 1, 1974, but before September 1, 1979 5%

On or after September 1, 1979, but before September 1, 1981 6%

On or after September 1, 1981, but before September 1, 1982 7%

On or after September 1, 1982, but before September 1, 1983 6%

On or after September 1, 1983, but before September 1, 1990 7%

On or after September 1, 1990, but before September 1, 1991 6%

On or after September 1, 1991, but before September 1, 1992 7%

On or after September 1, 1992, but before September 1, 1995 6%

On or after September 1, 1995, but before September 1, 1997 5%

On or after September 1, 1997, but before September 1, 1998 2%

(d) After making the computations required by Subsection (c) of this section, the retirement system shall increase each annuity payable by the system on September 1, 1999, other than an annuity under Section 824.304(a), 824.404, or 824.501, Government Code, by 10 percent, which is a benefit equivalent to the benefit provided by using a 2.2 percent multiplier for computing annuities.

SECTION 30. (a) Notwithstanding Section 824.1011, Government Code, as amended by this Act, a person who is receiving a standard service or disability retirement annuity under Section 824.203 or 824.304(b), Government Code, on the effective date of this Act and who married after retirement but before that date may, before September 1, 2000, replace the annuity by selecting an optional annuity and designating the person's spouse as beneficiary as if the person had married after the effective date of this Act.

(b) Notwithstanding Section 824.1011, Government Code, as amended by this Act, a person who retired before September 1, 1992, and is receiving a standard disability retirement annuity under Section 824.304(b), Government Code, on the effective date of this Act may before September 1, 2001, replace the annuity by selecting an optional annuity described by Section 824.308, Government Code. An optional annuity selected under this subsection shall be actuarially reduced according to the ages of the retiree and the designated beneficiary at the time the annuity is selected.

SECTION 31. This Act takes effect September 1, 1999, except Section 14, which takes effect at the beginning of the 1999-2000 school year.

SECTION 32. The importance of this legislation and the crowded condition of the calendars in both houses create an emergency and an imperative public necessity that the constitutional rule requiring bills to be read on three several days in each house be suspended, and this rule is hereby suspended, and that this Act take effect and be in force according to its terms, and it is so enacted.

The Conference Committee Report was filed with the Secretary of the Senate.

CONFERENCE COMMITTEE REPORT ON

HOUSE BILL 1376

Senator Carona submitted the following Conference Committee Report:

Austin, Texas

May 27, 1999

Honorable Rick Perry

President of the Senate

Honorable James E. "Pete" Laney

Speaker of the House of Representatives

Sirs:

We, Your Conference Committee, appointed to adjust the differences between the Senate and the House of Representatives on HB 1376 have had the same under consideration, and beg to report it back with the recommendation that it do pass.

CARONA BOSSE

MADLA ALEXANDER

FRASER UHER

JACKSON HILBERT

WHITMIRE NORIEGA

On the part of the Senate On the part of the House

The Conference Committee Report was filed with the Secretary of the Senate.

CONFERENCE COMMITTEE REPORT ON

HOUSE BILL 1140

Senator Armbrister submitted the following Conference Committee Report:

Austin, Texas

May 28, 1999

Honorable Rick Perry

President of the Senate

Honorable James E. "Pete" Laney

Speaker of the House of Representatives

Sirs:

We, Your Conference Committee, appointed to adjust the differences between the Senate and the House of Representatives on HB 1140 have had the same under consideration, and beg to report it back with the recommendation that it do pass.

ARMBRISTER THOMPSON

WHITMIRE JIM SOLIS

BIVINS HINOJOSA

MONCRIEF

On the part of the Senate On the part of the House

The Conference Committee Report was filed with the Secretary of the Senate.

CONFERENCE COMMITTEE REPORT ON

HOUSE BILL 1622

Senator Harris submitted the following Conference Committee Report:

Austin, Texas

May 27, 1999

Honorable Rick Perry

President of the Senate

Honorable James E. "Pete" Laney

Speaker of the House of Representatives

Sirs:

We, Your Conference Committee, appointed to adjust the differences between the Senate and the House of Representatives on HB 1622 have had the same under consideration, and beg to report it back with the recommendation that it do pass.

HARRIS GOODMAN

MADLA NAISHTAT

ELLIS A. REYNA

TRUITT

On the part of the Senate On the part of the House

The Conference Committee Report was filed with the Secretary of the Senate.

CONFERENCE COMMITTEE REPORT ON

HOUSE BILL 1498

Senator Sibley submitted the following Conference Committee Report:

Austin, Texas

May 28, 1999

Honorable Rick Perry

President of the Senate

Honorable James E. "Pete" Laney

Speaker of the House of Representatives

Sirs:

We, Your Conference Committee, appointed to adjust the differences between the Senate and the House of Representatives on HB 1498 have had the same under consideration, and beg to report it back with the recommendation that it do pass.

SIBLEY JANEK

JACKSON EILAND

MADLA SIEBERT

OGDEN VAN DE PUTTE

On the part of the Senate On the part of the House

The Conference Committee Report was filed with the Secretary of the Senate.

CONFERENCE COMMITTEE REPORT ON

HOUSE BILL 3304

Senator Sibley submitted the following Conference Committee Report:

Austin, Texas

May 28, 1999

Honorable Rick Perry

President of the Senate

Honorable James E. "Pete" Laney

Speaker of the House of Representatives

Sirs:

We, Your Conference Committee, appointed to adjust the differences between the Senate and the House of Representatives on HB 3304 have had the same under consideration, and beg to report it back with the recommendation that it do pass.

SIBLEY THOMPSON

CAIN JIM SOLIS

ARMBRISTER CAPELO

HINOJOSA

HARTNETT

On the part of the Senate On the part of the House

The Conference Committee Report was filed with the Secretary of the Senate.

CONFERENCE COMMITTEE REPORT ON

HOUSE BILL 1283

Senator Brown submitted the following Conference Committee Report:

Austin, Texas

May 29, 1999

Honorable Rick Perry

President of the Senate

Honorable James E. "Pete" Laney

Speaker of the House of Representatives

Sirs:

We, Your Conference Committee, appointed to adjust the differences between the Senate and the House of Representatives on HB 1283 have had the same under consideration, and beg to report it back with the recommendation that it do pass.

BROWN COUNTS

ARMBRISTER COOK

BERNSEN T. KING

RATLIFF WALKER

On the part of the Senate On the part of the House

The Conference Committee Report was filed with the Secretary of the Senate.

CONFERENCE COMMITTEE REPORT ON

HOUSE BILL 352

Senator Brown submitted the following Conference Committee Report:

Austin, Texas

May 28, 1999

Honorable Rick Perry

President of the Senate

Honorable James E. "Pete" Laney

Speaker of the House of Representatives

Sirs:

We, Your Conference Committee, appointed to adjust the differences between the Senate and the House of Representatives on HB 352 have had the same under consideration, and beg to report it back with the recommendation that it do pass.

BROWN DENNY

LINDSAY ALEXANDER

MONCRIEF Y. DAVIS

MADLA MADDEN

ARMBRISTER

On the part of the Senate On the part of the House

The Conference Committee Report was filed with the Secretary of the Senate.

CONFERENCE COMMITTEE REPORT ON

HOUSE BILL 153

Senator Moncrief submitted the following Conference Committee Report:

Austin, Texas

May 29, 1999

Honorable Rick Perry

President of the Senate

Honorable James E. "Pete" Laney

Speaker of the House of Representatives

Sirs:

We, Your Conference Committee, appointed to adjust the differences between the Senate and the House of Representatives on HB 153 have had the same under consideration, and beg to report it back with the recommendation that it do pass.

MONCRIEF NIXON

RATLIFF DUNNAM

ARMBRISTER HINOJOSA

WHITMIRE KEEL

TALTON

On the part of the Senate On the part of the House

The Conference Committee Report was filed with the Secretary of the Senate.

CONFERENCE COMMITTEE REPORT ON

HOUSE BILL 2031

Senator Armbrister submitted the following Conference Committee Report:

Austin, Texas

May 28, 1999

Honorable Rick Perry

President of the Senate

Honorable James E. "Pete" Laney

Speaker of the House of Representatives

Sirs:

We, Your Conference Committee, appointed to adjust the differences between the Senate and the House of Representatives on HB 2031 have had the same under consideration, and beg to report it back with the recommendation that it do pass.

ARMBRISTER KUEMPEL

SHAPLEIGH B. TURNER

SHAPIRO DRIVER

ZAFFIRINI BERMAN

NAJERA

On the part of the Senate On the part of the House

The Conference Committee Report was filed with the Secretary of the Senate.

CONFERENCE COMMITTEE REPORT ON

HOUSE BILL 577

Senator Nelson submitted the following Conference Committee Report:

Austin, Texas

May 27, 1999

Honorable Rick Perry

President of the Senate

Honorable James E. "Pete" Laney

Speaker of the House of Representatives

Sirs:

We, Your Conference Committee, appointed to adjust the differences between the Senate and the House of Representatives on HB 577 have had the same under consideration, and beg to report it back with the recommendation that it do pass.

NELSON GIDDINGS

SHAPIRO DUTTON

MONCRIEF HINOJOSA

ARMBRISTER S. TURNER

JACKSON

On the part of the Senate On the part of the House

The Conference Committee Report was filed with the Secretary of the Senate.

CONFERENCE COMMITTEE REPORT ON

SENATE BILL 947

Senator Barrientos submitted the following Conference Committee Report:

Austin, Texas

May 28, 1999

Honorable Rick Perry

President of the Senate

Honorable James E. "Pete" Laney

Speaker of the House of Representatives

Sirs:

We, Your Conference Committee, appointed to adjust the differences between the Senate and the House of Representatives on SB 947 have had the same under consideration, and beg to report it back with the recommendation that it do pass in the form and text hereto attached.

BARRIENTOS MAXEY

ZAFFIRINI FARABEE

CAIN WOHLGEMUTH

WEST F. BROWN

NELSON

On the part of the Senate On the part of the House

A BILL TO BE ENTITLED

AN ACT

relating to the authority of the board of regents of The University of Texas System to increase the student union fee at The University of Texas at Austin and to the use of the student union fee.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Subsection (a), Section 54.530, Education Code, is amended to read as follows:

(a) The board of regents of The University of Texas System may levy and collect from each student a compulsory fee for operating, maintaining, improving, equipping, and/or constructing additions to the existing Texas Union building near Guadalupe Street. Unless the board increases the amount as provided by this subsection, the fee may not [to ] exceed $33 for each regular semester and $16.50 for each term of each summer session. The money collected from the[, with such ] fees shall [to ] be deposited to an account known as the Texas Union Fee Account. With the concurrence of the student fees advisory committee, the board may increase the amount of the [; this ] fee [may be raised ] to an amount that is not more than 10 percent of the amount imposed in the preceding academic year. The board may increase the amount of the fee to an amount that is more than 10 percent of the amount imposed in the preceding academic year [not to exceed $40 for each regular semester and $20 for each term of each summer session ] if that increase in the fee is approved by a majority vote of those students participating in a general election called for that purpose. However, the board may not increase the amount of the fee to an amount that is more than $50 for each regular semester and $30 for each term of each summer session. The activities of said Texas Union building financed in whole or in part by the [this ] fee shall be limited to those activities in which the entire student body is eligible to participate, and in no event shall any of the activities so financed be held outside of the territorial limits of the campus of The University of Texas at Austin.

SECTION 2. (a) A review panel consisting of three members appointed under this section and financed by the office of the vice president for student affairs at The University of Texas at Austin shall conduct an external review of the operation of the Texas Union to ensure the appropriate use of the student union fee imposed by Section 54.530, Education Code. The review shall include an examination of management decisions and other areas relating to the operation of the Texas Union as necessary. Not later than the first day of the 2000 fall semester, the review panel shall make to the Board of Directors of the Texas Union related recommendations on ways to improve the facilities and operations of the Texas Union.

(b) The vice president for student affairs at The University of Texas at Austin shall compile a list of seven proposed members of the review panel, which must consist of current or former student union directors, associate student union directors, or college or university vice presidents with student union experience. A proposed member of the review panel may have acquired the necessary union experience at a college or university in or outside of this state. The vice president for student affairs may not serve on the review panel.

(c) The vice president for student affairs at The University of Texas at Austin shall submit the list to a student committee consisting of five representatives to the Student Assembly of The University of Texas at Austin, to be selected by the Student Assembly. The student committee shall select three persons from the list submitted by

the vice president for student affairs to constitute the review panel. If a vacancy occurs on the review panel, the student committee shall select another person from the list to fill the vacant position. The selections of the student committee, including any replacement selections, are final unless a proposed member is unable to serve, in which event the student committee shall select a replacement.

(d) If, at any time, the list of proposed members of the review panel consists of fewer than five persons, the vice president for student affairs at The University of Texas at Austin shall submit to the student committee additional names as necessary to restore the list of proposed members to seven.

(e) This section expires January 1, 2001.

SECTION 3. Section 1 of this Act applies beginning with the 1999 fall semester and applies to fees charged for or after that semester. Fees charged before the 1999 fall semester are governed by the law in effect at the time the fees are charged, and that law is continued in effect for that purpose.

SECTION 4. The importance of this legislation and the crowded condition of the calendars in both houses create an emergency and an imperative public necessity that the constitutional rule requiring bills to be read on three several days in each house be suspended, and this rule is hereby suspended, and that this Act take effect and be in force from and after its passage, and it is so enacted.

The Conference Committee Report was filed with the Secretary of the Senate.

CONFERENCE COMMITTEE REPORT ON

HOUSE BILL 2434

Senator Moncrief submitted the following Conference Committee Report:

Austin, Texas

May 28, 1999

Honorable Rick Perry

President of the Senate

Honorable James E. "Pete" Laney

Speaker of the House of Representatives

Sirs:

We, Your Conference Committee, appointed to adjust the differences between the Senate and the House of Representatives on HB 2434 have had the same under consideration, and beg to report it back with the recommendation that it do pass.

MONCRIEF UHER

MADLA TILLERY

NIXON GREENBERG

LINDSAY CARTER

ELLIS

On the part of the Senate On the part of the House

The Conference Committee Report was filed with the Secretary of the Senate.

CONFERENCE COMMITTEE REPORT ON

SENATE BILL 560

Senator Sibley submitted the following Conference Committee Report:

Austin, Texas

May 29, 1999

Honorable Rick Perry

President of the Senate

Honorable James E. "Pete" Laney

Speaker of the House of Representatives

Sirs:

We, Your Conference Committee, appointed to adjust the differences between the Senate and the House of Representatives on SB 560 have had the same under consideration, and beg to report it back with the recommendation that it do pass in the form and text hereto attached.

SIBLEY GOODMAN

ARMBRISTER MCCALL

FRASER VAN DE PUTTE

MADLA

On the part of the Senate On the part of the House

A BILL TO BE ENTITLED

AN ACT

relating to the regulation of telecommunications utilities by the Public Utility Commission of Texas and the provision of telecommunications services.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 12.005, Utilities Code, is amended to read as follows:

Sec. 12.005. APPLICATION OF SUNSET ACT. The Public Utility Commission of Texas is subject to Chapter 325, Government Code (Texas Sunset Act). Unless continued in existence as provided by that chapter, the commission is abolished and this title expires September 1, 2005 [2001 ].

SECTION 2. Section 13.002, Utilities Code, is amended to read as follows:

Sec. 13.002. APPLICATION OF SUNSET ACT. The Office of Public Utility Counsel is subject to Chapter 325, Government Code (Texas Sunset Act). Unless continued in existence as provided by that chapter, the office is abolished and this chapter expires September 1, 2005 [2001 ].

SECTION 3. Section 15.024(c), Utilities Code, is amended to read as follows:

(c) A penalty may not be assessed under this section if the person against whom the penalty may be assessed remedies the violation before the 31st day after the date the person receives the notice under Subsection (b). A person who claims to have remedied an alleged violation has the burden of proving to the commission that the alleged violation was remedied and was accidental or inadvertent. This subsection does not apply to a violation of Chapter 55 or 64.

SECTION 4. Section 51.001, Utilities Code, is amended by amending Subsection (a) and adding Subsection (g) to read as follows:

(a) Significant changes have occurred in telecommunications since the law from which this title is derived was originally adopted. To encourage and accelerate the

development of a competitive and advanced telecommunications environment and infrastructure, new rules, policies, and principles must be formulated and applied to protect the public interest. Changes in technology and market structure have increased the need for minimum standards of service quality, customer service, and fair business practices to ensure high-quality service to customers and a healthy marketplace where competition is permitted by law. It is the purpose of this subtitle to grant the commission authority to make and enforce rules necessary to protect customers of telecommunications services consistent with the public interest.

(g) It is the policy of this state to ensure that customers in all regions of this state, including low-income customers and customers in rural and high cost areas, have access to telecommunications and information services, including interexchange services, cable services, wireless services, and advanced telecommunications and information services, that are reasonably comparable to those services provided in urban areas and that are available at prices that are reasonably comparable to prices charged for similar services in urban areas. Not later than November 1, 1999, the commission shall begin a review and evaluation of the availability and the pricing of telecommunications and information services, including interexchange services, cable services, wireless services, and advanced telecommunications and information services, in rural and high cost areas, as well as the convergence of telecommunications services. The commission shall file a report with the legislature not later than January 1, 2001. The report must include the commission's recommendations on the issues reviewed and evaluated.

SECTION 5. Sections 51.002(6), (7), and (10), Utilities Code, are amended to read as follows:

(6) "Long run incremental cost" has the meaning assigned by 16 T.A.C. Section 23.91 or its successor.

(7) "Pricing flexibility" includes:

(A) customer specific contracts;

(B) packaging of services;

(C) volume, term, and discount pricing;

(D) zone density pricing, with a zone to be defined as an exchange; and

(E) other promotional pricing.

(10) "Telecommunications provider":

(A) means:

(i) a certificated telecommunications utility;

(ii) a shared tenant service provider;

(iii) a nondominant carrier of telecommunications services;

(iv) a provider of commercial mobile service as defined by Section 332(d), Communications Act of 1934 (47 U.S.C. Section 151 et seq.), Federal Communications Commission rules, and the Omnibus Budget Reconciliation Act of 1993 (Public Law 103-66), except that the term does not include these entities for the purposes of Chapter 55 or 64;

(v) a telecommunications entity that provides central office based PBX-type sharing or resale arrangements;

(vi) an interexchange telecommunications carrier;

(vii) a specialized common carrier;

(viii) a reseller of communications;

(ix) a provider of operator services;

(x) a provider of customer-owned pay telephone service; or

(xi) another person or entity determined by the commission to provide telecommunications services to customers in this state; and

(B) does not mean:

(i) a provider of enhanced or information services, or another user of telecommunications services, who does not also provide telecommunications services; or

(ii) a state agency or state institution of higher education, or a service provided by a state agency or state institution of higher education.

SECTION 6. Section 51.004, Utilities Code, is amended to read as follows:

Sec. 51.004. PRICING FLEXIBILITY. (a) A discount or other form of pricing flexibility may not be preferential, prejudicial, [or ] discriminatory, predatory, or anticompetitive.

(b) This title does not prohibit a volume discount or other discount based on a reasonable business purpose. A price that is set at or above the long run incremental cost of a service is presumed not to be a predatory price.

SECTION 7. The section heading to Section 52.058, Utilities Code, is amended to read as follows:

Sec. 52.058. GENERAL PROVISIONS RELATING TO NEW OR EXPERIMENTAL SERVICES OR PROMOTIONAL RATES.

SECTION 8. Subchapter B, Chapter 52, Utilities Code, is amended by adding Sections 52.0583, 52.0584, and 52.0585 to read as follows:

Sec. 52.0583. NEW SERVICES. (a) An incumbent local exchange company may introduce a new service 10 days after providing an informational notice to the commission, to the office, and to any person who holds a certificate of operating authority in the incumbent local exchange company's certificated area or areas or who has an effective interconnection agreement with the incumbent local exchange company.

(b) An incumbent local exchange company shall price each new service at or above the service's long run incremental cost. The commission shall allow a company serving fewer than one million access lines in this state to establish a service's long run incremental cost by adopting, at that company's option, the cost studies of a larger company for that service that have been accepted by the commission.

(c) An affected person, the office on behalf of residential or small commercial customers, or the commission may file a complaint at the commission challenging whether the pricing by an incumbent local exchange company of a new service is in compliance with Subsection (b).

(d) If a complaint is filed under Subsection (c), the incumbent local exchange company has the burden of proving that the company set the price for the new service in accordance with the applicable provisions of this subchapter. If the complaint is finally resolved in favor of the complainant, the company:

(1) shall, not later than the 10th day after the date the complaint is finally resolved, amend the price of the service as necessary to comply with the final resolution; or

(2) may, at the company's option, discontinue the service.

(e) A company electing incentive regulation under Chapter 58 or 59 may introduce new services only in accordance with the applicable provisions of Chapter 58 or 59.

Sec. 52.0584. PRICING AND PACKAGING FLEXIBILITY; CUSTOMER PROMOTIONAL OFFERINGS. (a) Notwithstanding any other provision of this title, an incumbent local exchange company may exercise pricing flexibility in accordance with this section, including the packaging of any regulated service such as basic local telecommunications service with any other regulated or unregulated service or any service of an affiliate. The company may exercise pricing flexibility 10 days after providing an informational notice to the commission, to the office, and to any person who holds a certificate of operating authority in the incumbent local exchange company's certificated area or areas or who has an effective interconnection agreement with the incumbent local exchange company. Pricing flexibility includes all pricing arrangements included in the definition of "pricing flexibility" prescribed by Section 51.002 and includes packaging of any regulated service with any unregulated service or any service of an affiliate.

(b) An incumbent local exchange company, at the company's option, shall price each regulated service offered separately or as part of a package under Subsection (a) at either the service's tariffed rate or at a rate not lower than the service's long run incremental cost. The commission shall allow a company serving fewer than one million access lines in this state to establish a service's long run incremental cost by adopting, at that company's option, the cost studies of a larger company for that service that have been accepted by the commission.

(c) An affected person, the office on behalf of residential or small commercial customers, or the commission may file a complaint alleging that an incumbent local exchange company has priced a regulated service in a manner that does not meet the pricing standards of this subchapter. The complaint must be filed before the 31st day after the date the company implements the rate.

(d) A company electing incentive regulation under Chapter 58 or 59 may use pricing and packaging flexibility and introduce customer promotional offerings only in accordance with the applicable provisions of Chapter 58 or 59.

Sec. 52.0585. CUSTOMER PROMOTIONAL OFFERINGS. (a) An incumbent local exchange company may offer a promotion for a regulated service for not more than 90 days in any 12-month period.

(b) The company shall file with the commission a promotional offering that consists of: