85R12633 AJZ-D
	By: Dukes	H.B. No. 2383

	A BILL TO BE ENTITLED
	AN ACT
	relating to outsourcing a service performed by the Health and Human
	Services Commission or a health and human services agency to a
	private commercial contractor.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Chapter 2162, Government Code, is amended by
	adding Subchapter D to read as follows:
	SUBCHAPTER D.  OUTSOURCING MAJOR FUNCTIONS
	Sec. 2162.151.  DEFINITIONS. In this subchapter:
	(1)  "Commission" means the Health and Human Services
	Commission.
	(2)  "Health and human services agency" has the meaning
	assigned by Section 531.001.
	Sec. 2162.152.  APPLICABILITY.  This subchapter applies in
	relation to a contract, contract amendment, or contract extension
	made or proposed to be made between the commission or a health and
	human services agency and a private commercial contractor only if:
	(1)  a service performed by the commission or agency at
	the time the contract is awarded, amended, or extended will be
	outsourced under the contract, contract amendment, or contract
	extension; and
	(2)  the contract, contract amendment, or contract
	extension, as applicable:
	(A)  will lead to the loss of 100 or more state
	employee positions; or
	(B)  has a value of $10 million or more.
	Sec. 2162.153.  COST ANALYSIS AND CONTRACT CONSIDERATIONS
	FOR OUTSOURCING STATE SERVICES.  (a)  Before awarding, amending, or
	extending a contract to which this subchapter applies, the
	commission or a health and human services agency, as applicable,
	shall perform a cost analysis comparing the commission's or
	agency's costs of performing the service to be outsourced to the
	costs of outsourcing the service as provided by this section. The
	council, in making a determination under Section 2162.102(a), shall
	perform a cost analysis comparing the commission's or agency's
	costs of performing a service to the costs of outsourcing the
	service as provided by this section.
	(b)  In determining the costs of performing the service, an
	analysis shall be prepared that includes:
	(1)  the commission's or health and human services
	agency's actual cost of providing the service currently, including:
	(A)  services provided by the comptroller,
	attorney general, and other support agencies; and
	(B)  other indirect expenses related to the
	performance of the service;
	(2)  the assumptions and documentation supporting the
	actual cost determination under Subdivision (1); and
	(3)  recommendations for improving the commission's or
	the health and human services agency's performance by developing
	the most efficient organizational model to provide the service, if
	applicable, including implementing recommendations of state
	oversight agencies, including the Legislative Budget Board, the
	state auditor, and the Sunset Advisory Commission.
	(c)  In comparing the cost of providing the service under
	this section, the commission, health and human services agency, or
	council shall:
	(1)  include the costs of a private contractor to
	perform the state service and the cost to the commission or agency
	of monitoring the contractor's performance against the terms of the
	contract;
	(2)  include an assessment of whether the private
	contractor is capable of providing a level of service comparable to
	the level provided by the commission or agency that most recently
	provided the service; and
	(3)  prepare and consider an estimate of the costs of
	returning the performance of the service from the private
	contractor to the commission or agency if necessary, including a
	reasonable proposed schedule for actions necessary to return the
	service to the commission or agency.
	(d)  The commission or a health and human services agency
	performing a cost analysis under this section may consider a
	reorganized service delivery method to compete directly with the
	performance of a private contractor.
	(e)  A bid or contract for outsourcing a service must include
	an analysis of health care benefits, retirement, and workers'
	compensation insurance for a private contractor's employees that
	are reasonably comparable to the health care benefits, retirement,
	and workers' compensation insurance of this state.
	(f)  A cost analysis under this section must cover a period
	of at least one year and not more than five years.
	Sec. 2162.154.  REPORT; STATE AUDITOR REVIEW.  (a)  The
	commission or a health and human services agency shall send the
	analysis and supporting documentation required by Section
	2162.153(b) to the governor, the chairs of the appropriate
	legislative committees with jurisdiction over the commission or
	agency, the Legislative Budget Board, and the state auditor. The
	analysis and supporting documentation must be sent to the state
	auditor before extending a solicitation for bids for, amending, or
	extending a contract to which this subchapter applies.
	(b)  Based on a risk assessment, the state auditor may review
	and comment on the methodology used to determine the commission's
	or health and human services agency's cost required by Section
	2163.153(a).  The state auditor shall provide the results of the
	review and comment to the affected commission or agency, the
	governor, the chairs of the appropriate legislative committees with
	jurisdiction over the commission or agency, and the Legislative
	Budget Board.
	Sec. 2162.155.  AUDIT AUTHORITY. (a)  Based on a risk
	assessment performed by the state auditor, a cost analysis under
	Section 2162.153 is subject to audit by the state auditor in
	accordance with Chapter 321.
	(b)  Based on a risk assessment performed by the state
	auditor, a contract to which this subchapter applies is subject to
	audit by the state auditor in accordance with Chapter 321. The
	private contractor shall pay the costs of an audit conducted under
	this subsection. In conducting the audit, the state auditor may:
	(1)  assess whether cost savings have been realized
	from the contract; and
	(2)  address compliance under the terms of the
	contract, including amounts paid under the contract.
	(c)  A contract to which this subchapter applies must include
	a provision that authorizes the state auditor to have access to any
	information the state auditor considers relevant in performing the
	state auditor's duties under this section.
	(d)  The state auditor shall file an audit report for audits
	performed under Subsections (a) and (b).
	(e)  Reports filed by the state auditor under Subsection (d)
	shall be provided to:
	(1)  the commission and any affected health and human
	services agency;
	(2)  the governor;
	(3)  the chairs of the appropriate legislative
	committees with jurisdiction over the commission or agency;
	(4)  the Legislative Budget Board;
	(5)  the council, if applicable;
	(6)  the attorney general; and
	(7)  the private contractor, if applicable.
	Sec. 2162.156.  REQUIRED NOTIFICATION. The commission or a
	health and human services agency that enters into a contract or
	agrees to a contract amendment or extension subject to this
	subchapter shall notify the state auditor about the contract not
	later than the date the contract, contract amendment, or contract
	extension takes effect.
	Sec. 2162.157.  RECOVERY OF FUNDS. If, in the performance of
	an audit under this subchapter, the state auditor identifies
	amounts overpaid, amounts paid for unperformed services, or
	unallowable costs, the attorney general and the commission or
	affected health and human services agency shall cooperate in taking
	action to recover the amounts owed to the state.
	Sec. 2162.158.  CONTRACT TERMINATION. If the executive
	commissioner of the commission, after reviewing an audit report by
	the state auditor under this subchapter, any response by the
	private contractor, and applicable agency performance evaluations
	of the private contractor, concludes that the private contractor
	did not perform satisfactorily under the contract, the executive
	commissioner shall terminate the contract as soon as practicable.
	Sec. 2162.159.  ACTIONS FOLLOWING RETURN OF SERVICE. If a
	service obligation is returned to the commission or a health and
	human services agency after a contract is terminated under Section
	2162.158, the commission or agency, as applicable, shall:
	(1)  immediately complete a performance evaluation to
	design a program to improve the delivery of the service and
	implement the program designed; or
	(2)  rebid the contract.
	SECTION 2.  Section 2162.103(a), Government Code, is amended
	to read as follows:
	(a)  Except as otherwise provided by Section 2162.153, in
	[In] comparing the cost of providing a service, the council shall
	consider the:
	(1)  cost of supervising the work of a private
	contractor; and
	(2)  cost of a state agency's performance of the
	service, including:
	(A)  the costs of the comptroller, attorney
	general, and other support agencies; and
	(B)  other indirect costs related to the agency's
	performance of the service.
	SECTION 3.  The changes in law made by this Act apply only
	to:
	(1)  the activities of the Health and Human Services
	Commission, the State Council on Competitive Government, the
	Department of Family and Protective Services, or the Department of
	State Health Services concerning a proposal to contract with a
	private contractor to provide services being performed by the
	Health and Human Services Commission, the Department of Family and
	Protective Services, or the Department of State Health Services, on
	or after the effective date of this Act; and
	(2)  the evaluation of the services performed by a
	private contractor under a contract, contract amendment, or
	contract extension made on or after the effective date of this Act.
	SECTION 4.  This Act takes effect September 1, 2017.