ETHICS, REPORTING & DISCLOSURE LAWS

84th Legislature

Texas Water Conservation AssociationMarch 3, 2016

• HB 23 by Sarah Davis

• HB 1295 by Giovanni Capriglione

• Background and Disclaimer

HB 23• Chapter 176, Government Code

• Law has for several years required disclosure of gifts and business relationships between vendors and officials

• HB 23 tightened by including gifts of travel/lodging and entertainment, lowering threshold from $250 to $100, and including water district officials

HB 23• Requires a conflict of interest questionnaire if a

vendor (person who enters or seeks to enter into a contract) has a business relationship with an entity AND has given an officer or family member of officer gifts (including travel/lodging and entertainment but excluding food) totaling $100 or more in the calendar year preceding the date of entering into a contract or considering entering into a contract with the vendor

HB 23• Covers member of governing board of school district,

municipality, county, charter school, juni0r college district, water district, local government corporation board, commission or authority whose members are appointed by county/city• Director, superintendent, president, other person

appointed as executive officer of local government entity• Agent (including an employee) who exercises

discretion in the planning, recommending, selecting, or contracting of a vendor • Records administrator required to maintain a list and

provide to vendors that inquire

HB 23• Also requires disclosure of family relationships

o Third degree of consanguinity or second degree of affinity

• Vendors and local government officers must both file. Officers must provide more detail on gifts. Employees and agents are exempt from filing.

HB 23

• Enforcement: Offense is knowingly failing to file within 7 business days of becoming aware of facts that require the filing

• Misdemeanor tied to size of contract

• Fixes?o Dual reporting/o Consistency with lobby law?

HB 1295• A government entity may not enter into a contract of

more than $1 million that requires action by governing board unless recipient business entity submits a disclosure of interested parties at the time the business entity submits the signed contract.

• Interested party means a person who has a controlling interest or who actively participates in facilitating the contract or negotiating the terms, including a broker, intermediary, adviser, or attorney for the business entity.

HB 1295• Extraordinary number of questions about what this includes.

• Ethics Commission: Controlling interest defined as ownership of 10% or more, membership on a board of less than 10 members, service as an officer if less than four officers, or service as one of the four most highly compensated officers if there are more than four officers.

• Intermediary is a compensated non-employee who communicates with the government entity re the contract.

HB 1295• Over 6,000 forms filed to date. Posted on Ethics

Commission website.

• MASSIVE compliance burden related to value.