CHAPTER 2104. CONSERVATORSHIP AS A RESULT OF FISCAL MISMANAGEMENT
GOVERNMENT CODE
TITLE 10. GENERAL GOVERNMENT
SUBTITLE C. STATE ACCOUNTING, FISCAL MANAGEMENT, AND PRODUCTIVITY
CHAPTER 2104. CONSERVATORSHIP AS A RESULT OF FISCAL MISMANAGEMENT
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 2104.001. DEFINITIONS. In this chapter:
(1) "Conservator" means a person appointed by the governor to
act as the conservator of a state agency or public junior college
in accordance with this chapter.
(2) "Gross fiscal mismanagement" includes:
(A) failure to keep adequate fiscal records;
(B) failure to maintain proper control over assets;
(C) failure to discharge fiscal obligations in a timely manner;
and
(D) misuse of state funds.
(3) "State agency" means a department, commission, board,
office, or other agency, including a university system or an
institution of higher education other than a public junior
college, that:
(A) is in the executive branch of state government;
(B) is created by statute; and
(C) does not have statutory geographical boundaries limited to a
part of the state.
(4) "State fiscal management policies" means laws or rules
relating to:
(A) fiscal recordkeeping and reporting;
(B) use or control of state property;
(C) timely discharge of fiscal obligations; or
(D) use of state funds.
Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1,
1993. Amended by Acts 1999, 76th Leg., ch. 237, Sec. 1, eff. May
28, 1999.
Sec. 2104.002. APPLICABILITY OF CHAPTER. This chapter does not
apply to an agency that is under the direction of an elected
officer, board, or commission.
Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1,
1993. Amended by Acts 1999, 76th Leg., ch. 237, Sec. 1, eff. May
28, 1999.
SUBCHAPTER B. CONSERVATORS
Sec. 2104.011. APPOINTMENT OF CONSERVATOR; TERMS. (a) A
conservator is appointed by the governor with the advice and
consent of the senate.
(b) To be eligible for appointment as a conservator, a person
must be qualified, by experience or education, in administration
or fiscal management.
(c) A public officer is eligible to serve as a conservator.
(d) A conservator's term expires on the earlier of the date the
conservatorship for which the conservator is appointed dissolves
or the second anniversary of the date of the conservator's
appointment. A conservator whose term expires before the
conservatorship is dissolved may be reappointed to continue the
conservatorship.
Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1,
1993. Amended by Acts 1995, 74th Leg., ch. 22, Sec. 1, eff. April
24, 1995; Acts 1999, 76th Leg., ch. 237, Sec. 1, eff. May 28,
1999.
Sec. 2104.012. COMPENSATION OF CONSERVATOR. (a) A conservator
appointed to act as the conservator of a state agency or public
junior college under this chapter is entitled to receive a salary
for performing those duties that is equal to the salary of the
chief administrative officer of the state agency or public junior
college under conservatorship.
(b) The state agency or public junior college under
conservatorship shall pay the salary of the conservator from
money appropriated or otherwise available to the state agency or
public junior college, except to the extent that money to pay the
salary is specifically appropriated or made available through the
budget execution process for that purpose.
Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1,
1993. Amended by Acts 1999, 76th Leg., ch. 237, Sec. 1, eff. May
28, 1999.
Sec. 2104.013. EXPENSES OF CONSERVATOR. (a) A limit provided
by appropriation on the amount of reimbursement that state
officers or members of state boards and commissions may generally
receive does not apply to reimbursement of the reasonable and
necessary expenses incurred by a conservator in the course of
performing duties under this chapter.
(b) The reasonable and necessary expenses incurred by a
conservator in the course of performing duties under this chapter
shall be paid from funds appropriated or otherwise available to
the agency or public junior college under conservatorship, except
to the extent that money to pay those expenses is specifically
appropriated or made available through the budget execution
process for that purpose.
Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1,
1993. Amended by Acts 1995, 74th Leg., ch. 22, Sec. 2, eff. April
24, 1995; Acts 1999, 76th Leg., ch. 237, Sec. 1, eff. May 28,
1999.
Sec. 2104.014. RULES. A conservator may adopt and enforce rules
necessary to administer the conservatorship for which the
conservator is appointed under this chapter. A conservator may
adopt initial rules on an emergency basis for the period
prescribed by Section 2001.034 if the conservator determines that
rules with immediate effect are necessary to ameliorate the
effect of the gross fiscal mismanagement.
Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1,
1993. Amended by Acts 1999, 76th Leg., ch. 237, Sec. 1, eff. May
28, 1999.
Sec. 2104.015. ADMINISTRATIVE SERVICES. (a) The governor shall
provide a conservator with administrative services.
(b) If necessary, the governor may use appropriations made under
Section 403.075 to provide the administrative services.
Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1,
1993. Amended by Acts 1999, 76th Leg., ch. 237, Sec. 1, eff. May
28, 1999.
SUBCHAPTER C. CONSERVATORSHIP OF STATE AGENCIES
Sec. 2104.021. MISMANAGEMENT FINDING; RECOMMENDATION;
CONSERVATORSHIP ORDER. (a) The legislative audit committee, on
finding that a condition of gross fiscal mismanagement exists in
a state agency, may:
(1) notify the governor of the finding and recommend that the
governor appoint a conservator for the agency; or
(2) recommend to the agency that it agree within a specified
time to enter into a rehabilitation plan in accordance with
Section 2104.0215.
(b) After receipt of a notice under Subsection (a), the governor
by proclamation may appoint a conservator, in accordance with the
recommendation, to act as conservator of the agency.
Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1,
1993. Amended by Acts 1999, 76th Leg., ch. 237, Sec. 1, eff. May
28, 1999.
Sec. 2104.0215. REHABILITATION PLAN IN LIEU OF CONSERVATORSHIP.
(a) A state agency that agrees to enter into a rehabilitation
plan shall engage the services of an independent management
consulting team approved by the governor and by the presiding
officer and assistant presiding officer of the legislative audit
committee. The independent management consulting team may include
the state auditor, one or more appropriate state agencies, and
private consultants.
(b) The state agency entering into the rehabilitation plan shall
pay the costs of the independent management consulting team's
services from money appropriated or otherwise available to the
agency, except to the extent that money to pay the costs is
specifically appropriated or made available through the budget
execution process for that purpose.
(c) The independent management consulting team shall assist the
state agency in developing its rehabilitation plan. The
rehabilitation plan must include specific performance goals and
the period in which the goals must be achieved. The plan must be
approved by the governing body of the agency and by the governor
and the legislative audit committee.
(d) If the state agency does not adopt the rehabilitation plan
within a reasonable time or if the state auditor determines and
informs the governor that the state agency is not making
sufficient progress in implementing its rehabilitation plan, the
governor may appoint a conservator for the agency under Section
2104.021.
(e) Participation by the state auditor under Subsection (a) is
subject to approval by the legislative audit committee for
inclusion in the audit plan under Section 321.013(c).
Added by Acts 1999, 76th Leg., ch. 237, Sec. 1, eff. May 28,
1999. Amended by Acts 2003, 78th Leg., ch. 785, Sec. 34, eff.
Sept. 1, 2003.
Sec. 2104.022. ASSUMPTION OF POLICY FUNCTIONS. The conservator
appointed by the governor under Section 2104.021 shall assume all
the powers and duties of the officers responsible for policy
direction of the state agency that is the subject of the
proclamation, and those officers may not act unless authorized by
the conservator.
Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1,
1993. Amended by Acts 1999, 76th Leg., ch. 237, Sec. 1, eff. May
28, 1999.
Sec. 2104.023. CONSERVATORSHIP POWERS AND DUTIES. (a) The
conservator of a state agency under this subchapter shall ensure
that the agency complies with state fiscal management policies.
(b) The conservator of a state agency under this subchapter,
may:
(1) terminate the employment of any employee whose conduct the
conservator determines contributed to the condition that caused
the conservatorship;
(2) employ personnel for the agency;
(3) change the agency's organization or structure as necessary
to alleviate the conditions that caused the conservatorship; and
(4) contract with persons for management or administrative
services necessary to effect the conservatorship.
(c) The conservator may delegate any part of the conservator's
powers or duties as conservator other than rulemaking authority
to a person with whom the conservator contracts under Subsection
(b)(4).
Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1,
1993. Amended by Acts 1999, 76th Leg., ch. 237, Sec. 1, eff. May
28, 1999.
Sec. 2104.024. REPORT. (a) The conservator shall report on a
conservatorship under this subchapter to the governor and the
legislative audit committee not later than the 60th day after the
date the governor orders the conservatorship and at the end of
each subsequent 60-day period until the conservatorship is
dissolved.
(b) The report must include a description of the measures taken
to ensure that the state agency complies with state fiscal
management policies and an estimate of the progress the
conservator has made in attaining that goal.
Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1,
1993. Amended by Acts 1999, 76th Leg., ch. 237, Sec. 1, eff. May
28, 1999.
Sec. 2104.025. DURATION OF CONSERVATORSHIP. A conservatorship
under this subchapter continues until the earlier of:
(1) the governor's issuing of a proclamation declaring that the
condition of gross fiscal mismanagement in the state agency no
longer exists and that the conservatorship is dissolved; or
(2) the legislative audit committee's finding and certifying to
the governor that the condition of gross fiscal mismanagement in
the agency no longer exists, in which case the conservatorship is
dissolved.
Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1,
1993. Amended by Acts 1999, 76th Leg., ch. 237, Sec. 1, eff. May
28, 1999.
SUBCHAPTER D. CONSERVATORSHIP OF PUBLIC JUNIOR COLLEGES
Sec. 2104.031. MISMANAGEMENT FINDING; CONSERVATORSHIP ORDER.
(a) On the governor's request, the Texas Higher Education
Coordinating Board with the advice and assistance of the state
auditor shall determine if a condition of gross fiscal
mismanagement exists at a public junior college.
(b) If the coordinating board finds a condition of gross fiscal
mismanagement of a public junior college, the governor by
proclamation may appoint a conservator for the college.
(c) Except as otherwise provided by this subchapter, a
conservator shall act as conservator of a public junior college
in the manner provided by this chapter for conservatorship of
state agencies by a conservator.
Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1,
1993. Amended by Acts 1999, 76th Leg., ch. 237, Sec. 1, eff. May
28, 1999.
Sec. 2104.032. REPORTS. A conservator shall file the reports
relating to public junior colleges required by Section 2104.024
with the Texas Higher Education Coordinating Board.
Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1,
1993. Amended by Acts 1999, 76th Leg., ch. 237, Sec. 1, eff. May
28, 1999.
Sec. 2104.033. DURATION OF CONSERVATORSHIP. A conservatorship
of a public junior college under this subchapter continues until
the earlier of:
(1) the governor's issuing of a proclamation declaring that the
condition of gross fiscal mismanagement no longer exists and that
the conservatorship is dissolved; or
(2) the Texas Higher Education Coordinating Board's finding and
certifying to the governor that the condition of gross fiscal
mismanagement no longer exists, in which case the conservatorship
is dissolved.
Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1,
1993. Amended by Acts 1999, 76th Leg., ch. 237, Sec. 1, eff. May
28, 1999.