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.